The EU reaches an eleventh-hour deal on investment with China

European leaders reached a compromise with China on an investment agreement nearly a decade in the making, two days before the new year—the EU’s self-imposed deadline.

Earlier today (Dec. 30), European Council president Charles Michel and European Commission president Ursula von der Leyen spoke via videoconference with Chinese president Xi Jinping. They were later joined by French president Emmanuel Macron and German chancellor Angela Merkel.

In a statement, the EU said both sides “concluded in principle the negotiations for a Comprehensive Agreement on Investment,” or CAI, and highlighted concessions obtained from China on labor rights, market access, and climate change. The deal is not a trade agreement; it covers European investment in China and vice-versa. EU firms in China are locked out of some industries, face regulatory hurdles, and have fewer legal recourses on the ground, while the EU argues its market is open to Chinese investment.

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