Chinese FDI is the lack of reciprocity
A further key challenge related to Chinese FDI is the lack
of reciprocity. Germany is offering Chinese investors
free market access and has no general protection mech-
anismfor key technologies.
In contrast, the Chinese
government deliberately protects strategic industries
fromforeign access. This means that German businesses
in China encounter numerous barriers, both formal andinformal, and in comparison to domestic businesses
continue to be discriminated against. Since Xi Jinping
came to power this situation has not improved as much
as had been hoped because the reforms announced in
2013 have not kept pace with (Western) expectations.
Even 15 years after China’ s WTO accession in 2001 there
still is no level playing field in German-Chinese eco-
nomic relationships.
In principle, both sides can profit from FDI. Prerequi –
sites for this to happen are open markets and fair com-
petition. If China, as one of the most important global
economic players, systematically contravenes them, a
fundamental solution needs to be found. One possibil –
ity available is the bilateral investment agreement that
the EU and China have been negotiating since 2013.
Another option that makes sense would be to consider
an extension of the existing instruments for FDI control
and, if appropriate, to consider newinstruments at the
EU level. Potential newFDI regulations would however
need to be independent of the country of origin. Afor-
mal or informal “Lex Sinica”, i. E. A distinct treatment of
Chinese investments, would be contrary to the principle
of non-discrimination.
The key lies in finding a path
between a naïve sellout of German and/or European
interests, and protectionist actionism. Germany and the
EU still need to find this path.
EU Forecast
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