Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
The European Union is exploring the imposition of pre-conditions for Chinese companies investing within the bloc, specifically focusing on technology and know-how transfers. This initiative was discussed by EU trade ministers during a meeting hosted by Denmark in Horsens on Tuesday, ahead of a comprehensive paper on economic security from the European Commission later this year. The move comes as the EU seeks to ensure reciprocal benefits from foreign investment, mirroring technology transfers European firms have made in China.
EU’s Strategic Re-evaluation
Danish Foreign Minister Lars Rasmussen indicated that Europe should draw inspiration from the United States and China in establishing investment conditions. He explicitly stated that Chinese investments in Europe should be contingent on some form of technology transfer. Rasmussen acknowledged that this discussion is ongoing, reflecting evolving circumstances for the bloc.
The EU’s stance is informed by its experience, where it contends China has benefited from significant technology transfers from European businesses. These transfers often occurred as a prerequisite for market access or through mandates for joint ventures with Chinese entities.
European Trade Commissioner Maros Sefcovic affirmed the EU’s welcome for foreign investment, provided it constitutes “real investments.” He specified that such investments should generate new jobs within the bloc and involve the transfer of technology and intellectual property rights, consistent with practices European companies have observed while investing in China. Sefcovic noted that many EU ministers raised these concerns, tasking the Commission with developing concrete principles and proposals.
China’s Reaction and Future Outlook
A Chinese foreign ministry spokesperson, Lin Jian, responded to the discussions on Wednesday, asserting China’s opposition to forced technology transfer. He also condemned what he termed “protectionist and discriminatory practices” undertaken under the guise of enhancing competitiveness.
The ongoing deliberations highlight the EU’s strategic re-evaluation of its economic engagement with China, seeking to balance open investment policies with safeguarding its technological interests and promoting reciprocity in market access. The upcoming Commission paper is anticipated to outline the specific framework for these proposed pre-conditions.
