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Experts: China-EU investment treaty just a beginning

2021-01-06 08:49:47 CGTN

The China-EU Investment Treaty has been reached, but the main question lies in the immediate and long-term impacts of the deal.

The China-EU Investment Treaty has been reached, but the main question lies in the immediate and long-term impacts of the deal.

"The EU's agriculture sector, food sector and new energy industry will benefit directly," said Wang Dan, chief economist at Hang Seng Bank (China), adding that the taxes for agricultural products and new energy-related products will be lowered or even waived.

Meanwhile, services and technologies related to sustainable growth will also see more China-EU cross-border deals.

"Other industries that would benefit from this (treaty) would include green economy, artificial intelligence, legal and financial services," said Wang.

She said that both countries are complementary in those elements, and China and the EU both value long-term sustainable development, meaning there is a lot of room for collaboration in carbon emission reduction, health care and education.

For actual cross-border transactions, the treaty will further bring down taxation costs, an additional development upon an already existing solid China-EU taxation framework.

"The Ministry of Finance and the State Administration of Taxation have played an active role in international tax reform. China has established a treaty network with all 27 EU countries," said Nancy Li, a partner from International Tax and Transaction Services at Ernst & Young.

She also said that the treaty will reduce tax burden when it comes to dividend distribution and related payments, giving European investors more confidence and certainty when doing business in China or increasing their stakes in China.

The investment treaty is just a beginning, as reflected by multiple comments from economists and analysts gathered by CGTN.

Next, China will try to keep up with the EU in market transparency and openness and labor protection to secure long-term healthy business relations, a priority pointed out by all of those market experts.

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