China Investment Forum Opened and Bilateral Investment Treaty Talks

Nov. 13 – The China Investment Forum 2013 opened on Nov. 12 in Prague. According to China reporting, this 3 days China investment forum (Nov.12-14) focus on expanding the scope and areas of cooperation, creating healthy cooperation mechanism and laying a good foundation of bilateral cooperation between China and Central and Eastern European countries.

The China Investment Forum is a platform that actively supports economic dialogue, investment flow and trade development between Central and Eastern Europe and China by providing first-hand information about hot economic issues, current business opportunities and investment climate. The Chinese side hopes to make joint efforts with the countries of Central and Eastern Europe to expand and open up the market.

According to the top EU envoy in China, China and the EU are expected to start negotiations on a landmark bilateral investment treaty during the upcoming China-EU Summit on Nov. 21, 3013, that the EU will make a number of proposals for new initiatives, including launching negotiations on a bilateral investment agreement.

According to analysts, the agreement will help China upgrade its economy and better integrate with the world economy. That will enhance the potential for mutual investment. It will also give (China), looked at from the Chinese side, more certainty and predictability to the legal environment, because it will cover all member states. Investment conditions in member states differ and sometimes the laws differ, but it will set a few basic rules that will apply to all member states, so that will also improve the investment climate for Chinese companies.

Meanwhile, a new agreement will streamline existing bilateral investment protection agreements between China and EU member states into a single, coherent text to improve the protection of bilateral investments and increase investment flows. With goods and services worth more than $1.34 billion traded between both sides every day, trade flows between China and the EU are impressive. However, the flow of bilateral investment remains relatively low.

Statistics from the EU show that China’s direct investment to the EU comprises only 2.2 percent of the whole, while bilateral foreign direct investment represents less than 3 percent of both sides’ total outflows in 2012. We will establish across the board a simpler and more predictable legal and political environment for mutual investments. The uniformity and certainty on investment conditions will grow on both sides. In terms of regulating the investment practices, it will be more comprehensive than the bilateral agreements from the member states, because it will also be broader in substance matter. It will be about investment protection, but it will also be about market access and national treatment.

China has been entering into bilateral investment treaties with other countries since the early 1980s, when the nation began its path to reforms under then-Premier Deng Xiaoping. Although many have now been superseded by more complicated and sophisticated trade agreements such as double tax treaties (DTAs) and other bilateral mechanisms, bilateral investment treaties remain important, especially for investors from emerging nations with relatively immature tax laws and regulatory environments. Such treaties also help to underpin the bilateral investment conditions between China and other developed nations.

The purpose of a Bilateral Investment Treaty between two countries is reciprocal encouragement, promotion and protection of investments in each others territories by companies based in either country. These tend to be of particular importance for understanding the rights of companies investing from or into emerging markets. China has established Bilateral Investment Treaty Agreements with 30 countries in Europe: For the report “An Introduction to China Bilateral Investment Treaties throughout Europe” available upon request, contact with DCCC, or mail to info@dccchina.org