China offers less favourable Foreign Direct Investment (FDI) conditions than the EU. In the service sector, for instance, foreign investments are heavily protected, if not legally prohibited.
Recent Chinese acquisitions in the EU are twice as large as EU acquisitions in China. This offers growth promoting FDI in the EU.
But it also raises a question mark about the control over strategic technologies. In some sectors, EU firms cannot easily carry out traditional mergers and acquisitions in China.
Instead, they have to engage in joint ventures with Chinese firms, transferring technology and intellectual property.
In addition, foreign businesses face challenging framework conditions. For instance, China imposes limitations to market access and provides insufficient intellectual property right protection.
In order to address these imbalances, the EU and China have committed themselves to build their economic relationship on openness, non-discrimination, and fair competition, ensuring a level playing field and transparency based on mutual benefits.
The report
China – Challenges and Prospects of an Industrial and Innovation Powerhouse
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