China-EU Investment Agreement Negotiations Completed
The leaders of China and the European Union (EU) jointly announced the completion of the negotiations of China-EU Comprehensive Agreement on Investment as scheduled on 30 December 2020. The outcomes of the negotiations cover four aspect: market access commitments, fair competition rules, sustainable development and dispute settlement. The main market access commitments made by China are as follows:
- Manufacturing Sector
China will substantially remove restrictions on foreign investment in manufacturing sector (including transport, telecommunication equipment, chemicals, health equipment and other fields where EU investors invest most in China), so as to make the opening-up level of China’s manufacturing sector equal to that of EU manufacturing sector as a whole.
- Automotive Sector
China will gradually remove and phase out joint venture requirements and commit market access for new energy vehicles.
- Financial Services
China had already started the process of gradually liberalising the financial services sector and will grant and commit to keep that opening to EU investors. Joint venture requirements and foreign equity caps have been removed for banking, trading in securities and insurance (including reinsurance), as well as asset management.
- Health (Private Hospitals)
China will offer new market opening by lifting joint venture requirements for private hospitals in key Chinese cities, including Beijing, Shanghai, Tianjian, Guangzhou and Shenzhen.
- R&D (Biological Resources)
China has not previously committed openness to foreign investment in R&D in biological resources. China has agreed not to introduce new restrictions and to give to the EU any lifting of current restrictions in this area that may happen in the future.
- Telecommunication/Cloud Services
China has agreed to lift the investment ban for cloud services. They will now be open to EU investors subject to a 50% equity cap.
- Computer Services
China has agreed to bind market access for computer services and will include a ‘technology neutrality?clause, which will ensure that equity caps imposed for value-added telecom services will not be applied to other services such as financial, logistics, medical etc. if offered online.
- International Maritime Transport
China will allow investment in the relevant land-based auxiliary activities, enabling EU companies to invest without restriction in cargo-handling, container depots and stations, maritime agencies, etc. This will allow EU companies to organise a full range of multi-modal door-to-door transport, including the domestic leg of international maritime transport.
- Air Transport-related Services
China will open up in the key areas of computer reservation systems, ground handling and selling and marketing services. China has also removed its minimum capital requirement for rental and leasing of aircraft without crew.
- Business Services
China will eliminate joint venture requirements in real estate services, rental and leasing services, repair and maintenance for transport, advertising, market research, management consulting and translation services, etc.
- Environmental Services
China will remove joint venture requirements in environmental services such as sewage, noise abatement, solid waste disposal, cleaning of exhaust gases, nature and landscape protection, sanitations and other environmental services.
- Construction Services
China will eliminate the project limitations currently reserved in its WTO GATS commitments.
- Employees of EU Investors
Managers and specialists of EU companies will be allowed to work up to three years in Chinese subsidiaries, without restrictions such as labour market tests or quotas. Representatives of EU investors will be allowed to visit freely prior to making an investment.
KAIZEN Group is equipped with experienced and highly qualified professional consultants and is therefore well positioned to provide professional advices and services in respect of the formation and registration of company, application for various business licences and permits, company compliance, tax planning, audit and accounting in China. Please call and talk to our professional consultants for details.
|
