European foreign investment policy towards China: Is there an EU net contribution?

Abstract

The paper discusses the regulatory influence of the EU on the global investment regime, by focusing on how its regulatory power is represented in its investment treaty negotiations. It assesses the contribution of EU integration in this area by analysing whether its regulatory power over China is greater than that of each of its Member States cumulatively in investment agreement negotiations. Using text-as-data methodology, it concludes that the Comprehensive Agreement on Investment enters into a symbiotic relationship with the pre-existing BIT framework, falling short on substantive provisions while overall advancing the EU's position in soft areas such as market access, SOE regulation or transparency. Additional variables which are accounted for are the possible strengths and limitations of the EU's regulatory power, normative differences, the temporal gap, or China's own domestic and foreign trade policy. In the context of strategic autonomy, the CAI illustrates the shortcomings and advantages of EU regulatory power. Its findings are significant to understand the regulatory influence that the EU has on the governance of the investment regime, and the evolution of its regulatory capacity on investment in international relations, especially vis-à-vis major players.