The new silk road : achievements and perspectives of EU-China investment relations

The Treaty of Lisbon in 2009 has further expanded the competences of the EU in the commercial policy field. In this way the EU has acquired the competence to negotiate international investment agreements for all the Member States, covering both market access and investment protection and harmonizing the non-transparent patchwork of EU member states foreign investment laws. This will lead to the creation of a European comprehensive Common Investment Policy. This paper aims to scrutinize, from a juridical and economic perspective, the relationships between EU and China, looking specifically at the foreign investment relation. Accordingly, there will be highlighted the related mutual benefits achieved in the last decades and introduced the challenges that the two partners may face in the next future. Indeed, the EU and China are among the world' s largest originators and recipients of foreign investment, but investment flows between the two regions remain still limited and concerns about the lack of a level playing field in China abides strong. To best serve European investors’ needs, the new investment policy should facilitate the liberalization of investment flows, ensuring free access to the most important markets. In this regard, a large and growing market such as China has been defined by the European Commission as a perfect candidate for a stand-alone investment agreement, in which the protection of all kinds of assets related to foreign investment should be covered. Accordingly, an issue developed concerns the framework of the protection clauses, given that these, if included, will have to guarantee investors and preserve States sovereign rights to regulate. In parallel, it is tackled the question of investment disputes resolution system, stated that China has been reluctant in accepting the arbitration systems. The conclusion is that a comprehensive negotiation for an investment agreement between the EU and China would offer the opportunity to create a single framework applicable to all European investments and to achieve a strategic and mutually beneficial partnership with China.