After seven years of negotiations, the European Union and China on Wednesday approved a major investment deal that is being seen as a boost for investment flows for both sides amid a pandemic-hit economy. The pact is also a major win for China ahead of US President-elect Joe Biden’s arrival in office. 

The agreement between the EU and China aims to open the market of Beijing, eliminate discriminatory laws and practices preventing European companies from competing on an equal footing, according to the European Commission.

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Before Southeast Asia’s ASEAN bloc took over, China was the EU’s largest trading partner. According to AFP, the sums at stake are considerable: EU foreign direct investment in China since 2000 — excluding Britain — amounted to $181 billion. The corresponding sum from China is $138 billion.

The pact will “help rebalance the trade and investment relationship between the EU and China,” said Brussels, adding that it will provide an “unprecedented level of market access” for European investors.

China, which is fighting diplomatic battles on several fronts, became the EU’s largest partner also in the third quarter of 2020, overtaking the United States.   

The deal with the EU is a diplomatic win for Beijing and it potentially draws the Europeans into its camp before Biden takes office, AFP report said. 

The China-EU pact aims to protect European companies’ intellectual property, ban forced technology transfers and enhance transparency on subsidies paid to Chinese public companies. 

According to AFP, the deal also eliminates in some sectors the obligation for European firms to have a Chinese partner when entering the country’s vast market.