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EU Investment in China - Challenges and Possibilities · 2014-12-17 · Source: Rhodium Group:...
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EU Investment in China -Challenges and Possibilities
Dirk MoensSecretary General
The European Union Chamber of Commerce in China
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Strategic importance
Declining� in importance
Same level� of importance
Increasingly� important
IMPORTANCE OF CHINA IN COMPANIES' OVERALL GLOBAL STRATEGY
74%
23%
3%
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Increasing investment
CONTEMPLATING NEW INVESTMENTS
39%
41%
59%
52%
48%
61%
63%
37%63% plan to make new investments in China in
the next two years
71% set China as a top 3 destination for future
investments
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Regulatory barriers
GOVERNMENT POLICY TRENDS AFFECTING FIEs OVER LAST 2 YEARS
No Opinion27%
Fairer13%
Same18%
Less Fair42%
MISSED OPPORTUNITIES BECAUSE OF REGULATORY BARRIERS
No52%
Yes48%
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Shifting investment
COMPANIES CONSIDERING MOVING INVESTMENTS OUTSIDE PRC
No78%
Yes 22%
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Unequal by design
STATE-LED PROMOTION OF DOMESTIC INDUSTRY
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Unequal access
UNEQUAL MARKET ACCESS IS COMPOUNDED BY UNEQUAL ACCESS IN OTHER AREAS
Real Equal Real Equal TreatmentTreatment
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MarketMarketAccessAccess
Restricted market access
SIGNIFICANT BARRIERS TO MARKET ACCESS FOR FOREIGN-INVESTED ENTERPRISES
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Bilateral investment
Source: Rhodium Group: China Invests in Europe
FDI FLOWS ALLOW FOR LARGE SCALE IMPROVEMENTS
From EU = 2%
From China= 3.5%
EU FDI INFLOWS CHINA FDI INFLOWS
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Chinese investment
Source: Rhodium Group: China Invests in Europe
ABSOLUTE VALUES REMAIN SMALL COMPARED TO TOTAL FDI STOCK, BUT THERE IS A REAL CHANGE IN THE TREND LINE
SOEs account
for 2/3 of investmen
t value
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"Treaty"/ "Agreement"
MUST BE A STAND-ALONE AGREEMENT THAT GOES SUBSTANTIALLY BEYOND THE EXISTING BITs
Consolidation of the 26 existing BITs is of
more interest to China
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Consider Investment Realities
Require a commitment from
China to discuss adding pre-
establishment national treatment within negotiations prior to granting a
formal mandate for negotiations
Post-establishment national treatment
&Pre-establishment national treatment
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Potential areas for opening
PRE-ESTABLISHMENT NATIONAL TREATMENT MUST SERVE TO SUBSTANTIALLY OPEN ACCESS, BUT MUST BE REALISTIC
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Protection provisions
REMAINING IMPORTANCE OF THE VARIOUS CONVENTIONAL INVESTMENT PROTECTION PROVISIONS
Grandfathering clause
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Thank you
http://www.europeanchamber.com.cn/en/chamber-publications
Dirk MoensSecretary General