FDI Screening In The EU And Its Impact On The Sino-EU Economic And Trade Relations

In the era of globalization,the importance of economic and trade relations is increasingly significant in the interaction of international relations.While the EU is China's largest trading partner and China is the EU's second largest trading partner,both sides are crucial to each other in this bilateral trade relation.The cooperation and interaction of Sino-EU economic and trade relations reflect from the ancient Silk Road in history,the informal diplomatic exchanges in the early days of the founding of People's Republic of China,as well as the ever-increasing development of bilateral or multilateral relations since the new century.However,it is undeniable that the Sino-EU economic and trade relations are having a certain degree of competition,and there are various problems and frictions,for which both sides have corresponding measures.The most striking one is the Regulation(EU)2019/452 "establishing a framework for the screening of foreign direct investment into the Union" issued by the EU on March 21,2019(hereinafter referred to as the "Regulation").Since the Regulation have just come into force,most researches so far have analyzed the development,content,characteristics and trend of EU FDI screening system from the legal aspect;analyzed the risks and provided suggestions from the perspective of investors in Europe;compared the EU and other countries' FDI screening systems,but rarely studied in the perspective of impacts by the Regulation on Sino-EU economic and trade relations.Based on the text of the Regulation,this paper aims to,by using historical and textual analysis,taking the development of Sino-EU economic and trade relations as a surface and the evolution of EU FDI screening system as a line,explore the background and characteristics of the Regulation,and seek the impacts of the Regulation on Sino-EU economic and trade relations with related data from the perspective of innovation,so as to deepen relevant researches and make contributions.This paper finds that the introduction of the Regulation is not a whim but deliberation deeply influenced by the economic situation inside and outside the EU,such as international economic crisis,EU economic predicament,security threat caused by FDI,as well as the promotion of other developed economies and the Member States.The Regulation specifies the laws and policies for its formulation and promulgation,as well as the reasons and purposes,explains the factors and scope taken into consideration,and lists the specific requirements and precautions for its implementation.Meanwhile,the Regulation establishes a mechanism between the EU and its Member States or among the Member States with dual review,information exchange,cooperation and coordination,so as to provide legislative reference and means for the Member States and the European Commission to solve security or public order risks.After data analysis,it is found that the Regulation so far has little impact on Sino-EU trade and investment.Firstly,the growth rate of Sino-EU trade scale is declining and has is a downward trend.China remains a trade surplus in terms of trade balance,but major commodities whether China exported or imported to the EU are slightly impacted.The overall import and export trade volume between China and the EU is still on the rise.Secondly,although the growth rate of China's direct investment in the EU continues to decline,the EU receives greater attention from China.The number of Chinese enterprises in the EU has increased significantly,and the main industries of China's direct investment in the EU,such as manufacturing,finance,mining,leasingand business services,as well as wholesale and retail industries,fluctuate unobviously as a whole whether from flow analysis or stock analysis.The trend of Sino-EU economic and trade relations is positive,which may be blocked in the short term but still rising in the long term.In the short run,the most uncertain factor in the development of Sino-EU economic and trade relations is the Regulation.FDI screening is expanded in scope,and politicized in content.In the long run,China and the EU have complementary economic needs and advantages,and their governments and enterprises are actively promoting cooperation.To some extent,the Regulations slows down the speed of EU technology outflow,but as long as the EU has a leading edge in technology,business-driven investors will be interested in continuing to make acquisitions within the EU.Due to complementary economic advantages,the biggest challenge for the EU is not to prevent their technology transferred abroad,but to ensure that it remains an open place to attract investment,research and innovation,if it wants to maintain its competitiveness and edge in industry and technology.In sum,for China and the EU,cooperation is more momentous than competition,and consensuses are far more than differences.