On 30 December 2020, the EU and China reached an agreement “in principle” for a new EU-China Comprehensive Agreement on Investment (“CAI“) (see our previous update here). The CAI concludes seven years of investment negotiations, that begun in October 2013, and is expected to come into force later this year. In its press release (see here), the EU stated that the CAI was the “most ambitious agreement that China has ever concluded with a third country”.

The CAI will provide EU investors with greater access to key markets in China including electrical vehicles, telecommunications services, and aviation and maritime transport activities. EU investors will also benefit from the removal of barriers on joint-venture agreements and caps on levels of investment in sectors including automotive, environmental services and private healthcare. The CAI will also put the EU on an equal footing with the US (see here for the US-China “Phase One” trade deal) when it comes to operating in China’s financial services.

For China, the CAI is set to provide it with greater market access rights in the EU’s manufacturing and renewable energy markets.

Along with market access, the CAI will also be underpinned by commitments on (i) an improved level playing field; (ii) sustainable development; and (iii) the effective implementation of a state-to-state dispute settlement mechanism. The CAI also includes a commitment by both sides to try to complete negotiations on investment protection and investment dispute settlement within 2 years of the signing of the CAI.   

The text of the agreement is currently being finalised and further information will be provided here once it becomes available.


Sunny Mann is a Partner and leads the EMEA and UK International Trade team, ranked Tier 1 by Legal 500. His practice includes a focus on national security, foreign investment, export controls and trade sanctions matters. He has worked on a number of foreign investment review cases, including obtaining clearance for a high profile acquisition triggering potential defence and national security concerns, one of the very few cases to go through a full UK statutory review. In the Legal 500, Sunny is ranked as a "Leading Practitioner".


Zeyang Gao is an associate in Baker McKenzie's Competition, Trade and Foreign Investment Department in London. Zeyang advises on all aspects of competition law including merger control, foreign investment and national security reviews, competition investigations, state aid, information exchange, abuse of dominance and general competition compliance. Zeyang is experienced in advising on high value and complex multi-jurisdictional transactions, and advises and represents clients in the tech, telecoms and healthcare industries. He has also represented clients on a broad range of matters before the UK Competition and Markets Authority, the European Commission, and the UK Investment Security Unit.