Trade, Investment and Sustainable Development in EU-China Relations presented by Dr Dini Sejko, Research Associate from the Chinese University of Hong Kong at the EISPS China Centre for Politics, Law and Culture at UCL on 6 July 2022.

1. Trade, Investment
and Sustainable
Development in EU-
China Relations
EISPS China Centre for Politics, Law and
Culture - UCL
6 July 2022
Dr Dini Sejko MCIArb
Research Associate
The Chinese University of
Hong Kong

2. 10 July 1986
China formally submitted to the GATT Secretariat
its request of resumption of China’s status as a
contracting party to the GATT.
Nov. 1995
China formally requested to accede to the WTO
11 Dec. 2001
China officially became WTO’s 143rd member.
China in the WTO
Dini Sejko ©

3. China in
the WTO
•“In any event, the provisions of
subparagraph (a)(ii) shall expire 15
years after the date of accession”
Non-market economy status
•China as respondent – 49 cases
•China as complainant – 22 cases
•China as third party – 192 case
China and the DSM

4. EU China CAI
 15th EU-China Summit - February 2012 - agreement to launch negotiations for
an EU-China Comprehensive Agreement on Investment (CAI).
 May 2013 - the European Commission published an impact assessment on the
EU-China investment relations accompanying a recommendation for a Council
Decision authorising the opening of negotiations of an EU-China CAI.
 October 2013 - the Council adopted the negotiating mandate for the
Commission
 November 2013 – Formal the launch of negotiations was announced at the
16th EU-China Summit.
 The first round of talks took place in January 2014.

5. Epic Routes and the
Modern Projects
• Ferdinand von Richthofen
• Silk roads
• China-Mongolia-Russia Economic Corridor,
• New Eurasian Land Bridge,
• China Central Asia-Western Asia Corridor,
• China-Indochina Peninsula,
• China-Pakistan Economic Corridor
• Bangladesh-China-India-Myanmar Corridor.
Dini Sejko ©

6. A Geostrategic design?
Dini Sejko ©
 The Wall Street Journal
 The Financial Times
 Bloomberg
 Reuters

7. China Ocean Shipping Company (COSCO) & Piraeus Port

8. Chinese sovereign Investments in Italy
Dini Sejko ©

9. MOUs and other Soft Law Instruments
Memorandum D’Intesa tra il Governo della Repubblica Italiana
e il Governo della Repubblica Popolare Cinese sulla Collaborazione
nell’ambito Della “Via Della Seta Economica” e dell’ “Iniziativa per
una Via Della Seta Marittima Del 21° Secolo”
• Il presente Memorandum d’Intesa
non costituisce un accordo
internazionale da cui possano
derivare diritti ed obblighi di diritto
internazionale. Nessuna delle
disposizioni del presente
Memorandum deve essere
interpretata ed applicata come un
obbligo giuridico o finanziario o
impegno per le Parti.
Déclaration Conjointe entre la République Française et la
République Populaire le Chine sur la Préservation du
Multilatéralisme et l’amélioration de la Gouvernance Mondiale
• La France et la Chine soutiennent les
travaux en cours entre l’UE et la
Chine pour le développement de
synergies entre les initiatives de
connectivité, notamment la stratégie
de l’UE sur la connectivité
euroasiatique et l’initiative chinoise «
La ceinture, la Route ». Elles
souhaitent accélérer les échanges
dans le cadre de la Plateforme UE-
Chine de connectivité.

10. State Council
SASAC NDRC MOFCOM SAFE MOFA CBRC
Large SOEs
Policy and
commercial banks
Provide
financing
Governmental Influence in Decision-making Process

11. EU Leaders
2017
declarations
• .. we are not naïve free traders….if a foreign, state-owned, company
wants to purchase a European harbour, part of our energy
infrastructure or a defence technology firm, this should only happen
in transparency, with scrutiny and debate’.
Juncker
• "The EU is and will remain one of the most open investment regimes
in the world. Foreign direct investment is an important source of
growth, jobs and innovation. However, we cannot turn a blind eye to
the fact that in certain cases foreign take-overs can be detrimental
to our interests.”
Katainen
• The aim of what we are proposing is to keep the EU open to foreign
investment, with a non-discriminatory, transparent and predictable
framework. A European framework for screening foreign direct
investments will allow us to respond collectively and defend our
European strategic interests when they are at risk.”
Malmström

12. EU-China – 2019 Strategic Outlook
A cooperation partner with whom the EU
has closely aligned objectives
A negotiating partner with whom the EU
needs to find a balance of interests
An economic competitor in the pursuit of
technological leadership
A systemic rival promoting alternative
models of governance
China is, simultaneously,
in different policy areas,

13. Some European Examples
Dini Sejko © 13
United Kingdom
Enterprise Act of 2002 - No definition of National Security
Secretary of State for Business etc
Qualified Public Interest Test
National Security and Investment Act 2021
Germany
Foreign Trade and Payments Act (Aussenwirtschaftsgesetz)
Foreign Trade and Payments Regulation (Aussenwirtschaftsverordnung or
AWV).
Federal Ministry for Economic Affairs and Energy
Contrary to public order and security
Possibility to block 25% acquisition non-EU/EFTA in any sector on public order
and national security
France
Foreign Investment Regulations
Amended in 2005, 2012 & 2014
Ministry of Economy
33% (non EC investor) or 50%
Contrary to public order, public security and national defence interest
Italy
Law 11 May 2012, n. 56
Presidency of the Council of Ministers
Transactions regarding assets of companies operating in the sectors of
defence or national security,
strategic activities in the energy, transport and communications industries
2017 amendments
EU Countries different approaches

14. Expanding National Security
in the EU and beyond
Industrial Policies
Med Tech
Data protection
Food & Water Security
Critical Tech &
Infrastructure
Energy Security
Defence
Dini Sejko ©

15. EU Member
States ISM

16. The EU
Investment
Screening
Mechanism
• The Commission’s enables the EU Member States and the
Commission to screen foreign direct investment on the grounds of
security or public order.
• Transparent, non-discriminatory and predictable.
• Effects on critical infrastructure
• Security of supply of critical inputs
• Access to or ability to control sensitive information
• Effects on critical technologies
• Take into account whether investor is controlled by the government
of a third country
The Commission will be able to screen foreign investment likely to
affect projects or programmes of Union interest
• Research - Horizon 2020,
• Space - Galileo
• Transport, energy and telecommunication networks (Trans-European
Networks – TEN).
EU Cooperation mechanism

17. Security and
public Order -
Assessment
Criteria
• Physical and virtual
Critical and Strategic Infrastructure
Critical and strategic technologies
Strategic autonomy of the European
Access to sensitive information
Plurality and independence of the media
• Strategic sector in the investors country of origin
• Legitimate risk of violations of criminal activities, ML, ICHR, ILO
Standards
• Change of ownership clause
• Impact on competitive neutrality
• Reciprocity and level playing field
• Previous relations with the Foreign investor
Secondary criteria

18. International Cooperation under ISM
Member States and the Commission
may cooperate with the responsible
authorities of third countries on issues
relating to the screening of foreign
direct investments on grounds of
security and public order.
• EU Regulation 2019/452 Article 13
Bilateral or Plurilateral formats
• G7, OECD, NATO

19. EU-China Comprehensive Agreement on Investment
(CAI)

20. China and ILO Conventions
C029 - Forced Labour Convention, 1930 (No. 29)
C105 - Abolition of Forced Labour Convention, 1957
(No. 105)
China ratifies 28 ILO Conventions
6 of the 8 Fundamental Conventions

21. Concluding remarks
 The increasingly complex relationship between China and the EU
 Environment and sustainability issues
 Areas of collaboration and potential success
 CAI achievements and Chinese commitment
Investment Screening Mechanism
 EU and MS legal harmonisation with major global economic actors
 Fluid domestic frameworks & Domestic regulatory issues
 Risk of increased protectionism
 Benefits of interdependence?
 Measures yet to be tested under the regime of International Investment Agreements

22. Thank you for your attention!
Contact: sejko.dini@gmail.com
(c) Dini Sejko 22