N°10-31/01/2021 The European Union and China have just signed an agreement on December 30 on reciprocal investments of two of the world's greatest economic powers. This agreement has been under negotiation since 2013.
It is an important act that is part of accelerating the flow of capital around the world. The German Chancellor pushed for this agreement to be finalized before the end of her rotating EU presidency. France and the USA have tried, unsuccessfully, to slow down its fulfillment. So much for the facts, it remains to clarify the reasons and consequences of such an agreement.
The strength of trade between the countries of the EU, and especially Germany, and China, the increase in cross-investment, the takeover of EU companies by Chinese groups, the protection of technological data issues, led the European leaders, in a context of trade war between the USA and China, to find an agreement with the latter to protect the interests of their monopolies. Through this agreement, China is demonstrating its ability to emerge from its isolation and forge an important partnership with the other major player in the Western bloc, Europe. This is nothing new, the emergence in 2013 of the "new silk roads" which today concern a little less than a hundred countries already confirmed the opening of China to national and international capitalism. Today around thirty European cities are connected by rail to China for the transport of goods. It concerns also sea routes, to Asia, Africa and America and projects mainly financed by China: ports, highways, rail links, industrial centers, etc… On the cultural level, more than 500 Confucius Institutes have opened.
According to the American Bank Morgan Stanley, the cumulative Chinese investments in the countries of the "silk roads" will exceed 1.200 billion dollars by 2027. In 2014 the BAII (Asian Infrastructure Investment Bank) was created in competition with the IMF, the World Bank and the ADB (Asian Development Bank).
BAII, this financial institution for developing countries, provides repayable loans to states in multiple forms: repayment over long periods with lower interest than all other institutions and in case of inability to repay, the use of "barter", China supplying itself with raw materials and other commodities as a mode of reimbursement or the "use" of industrial and port infrastructure! Take the example of Sri Lanka, unable to honor its debts, it had to cede to China control of a deep water port for 99 years. In Europe, the ports of Piraeus (Greece), Bilbao and Valencia (Spain) are already controlled by China. Globally, the need is for China and its multinationals to find economic and financial outlets for its enormous monetary masses which cannot find a way to invest in China.
As regards trade with China, Germany is the first interested because its economy is most dependent on trade with it. Thus, among the European countries Germany has the greatest economic advantage in the conclusion of this agreement. Today it is by far the People's Republic's largest trading partner in Europe. According to the newspaper Le Monde: “in 2019, the volume of trade between the two countries amounted to 206 billion euros: 96 billion euros were exported by German companies to China which passed 110 billion euros of goods to Germany. These transactions, which represent around a third of the total volume traded between China and the European Union, are carried out in industries vital to the “made in Germany”: machinery, automotive, electrical engineering and chemicals, whose companies have become extremely dependent on the Chinese market”. In addition, the appetite of Chinese groups for German high-tech companies is great. The gradual takeover of Kuka, pearl of German robotics, from 2016, by the Midea group, was a first shock. Gelly's entry into the Daimler group was another blow. At the beginning of 2019, the German industrial federation published a major position statement, which marks a turning point: the German economy and the European economy must see China not only as a trading partner, but also as a "systemic competitor". It was therefore under pressure from German employers that this treaty was born. It allows them to streamline and frame their relations with China, while it initiates a significant shift in the role of the German state in "regulating" economic factors. This shift is reminiscent of the state's mass intervention in corporate financing during the 2008 crisis and more recently with that linked to the Covid 19 pandemic. It also marks a new stage in Europe’s industrial policies. This is what German bosses’boss Joachim Lang says: “The treaty is an important step towards a Europe that is united on investment issues, and a strong player in adopting global rules. The European Union is the first global player to have brought China to concessions on questions of social standards ".
For its part, China sees in the treaty the possibility of greater clarity in the policy of its monopolies meaning to invest in EU companies. It is also gaining stability in opening up its world trade whereas the US has chosen a trade war against China. Its choice of such a treaty is entirely consistent with its efforts to lay the groundwork for a vast Asia-Pacific free trade area: https://www.sitecommunistes.org/index.php/monde/asie/1152-asie-une-nouvelle-union-de-libre-echange-capitaliste
This treaty therefore marks a further step in capitalist globalization: from the circulation of capital to that of goods.
Unsurprisingly absent from the treaty is the question of peoples, their living conditions and circulation since the only valid question in capitalist competition is that of the freedom of movement of capital for more profits and accumulation.