After seven years and 35 rounds of negotiations, the EU and China have finally agreed for a Comprehensive Agreement in Investments (CAI). Compared to bilateral investment treaties, the CAI will put in place a single EU-China investment framework. As both the EU and China are economic heavyweights, the economic and strategic significance of the deal cannot be underestimated. The CAI is not an FTA. But it will serve an important tool to open Chinese market for EU companies. Despite all the talk of ‘geopolitical’ EU and a common transatlantic front against assertive China, the deal has once again shown that what matter most to its member states is economics. Some EU countries may also like to project it as a sign of their strategic autonomy from the US. Moreover, CAI linked with recently signed RCEP is such an opportunity, which the EU could not ignore easily. With prospects of liberal investment opportunities in a lucrative Chinese market, ‘decoupling’ from China narrative will become weaker in Europe. The EU not naïve about timing and political significance of the deal. However, despite labelling China as a ‘systemic rival’ and ‘economic competitor’, Brussels does not want to be on the wrong side of a rising power. The CAI deal rather shows that it is ready to take advantage from an emerging geopolitical dynamics in the Indo-Pacific.
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