The European interest in an investment treaty with China

The euro crisis in 2010 led to a 'Scramble for Europe' as indebted EU member states – especially in the so-called periphery – desperately sought investment, above all in their sovereign debt and infrastructure. But since then, the rush for Chinese investment has spread from the periphery to the core. The UK leads the race, and even France is now aiming for Chinese investment in its infrastructure – for example, in December 2014, the French government announced the sale of a 49.9% stake in the Toulouse airport to a Chinese consortium, with Lyon supposed to follow.

This makes it even more urgent for the EU to sign a Bilateral Investment Treaty (BIT) with China. China, which prefers to deal bilaterally with EU member states, was until recently reluctant to agree to such a treaty. However, the emergence of a series of mega-trade deals such as the Transatlantic Trade and Investment Partnership (TTIP) seems to have changed China’s mind. As China’s long-term 'go-global strategy shifts from resource producers to developed markets – and the renminbi gets stronger – China increasingly needs to invest in Europe.

'The European interest in an investment treaty with China' by Francois Godement and Angela Stanzel, explores what leverage Europeans have to negotiate the long wanted BIT with China.