The European Union and China: In Search of Positioning and Exercising Normative Power in the Comprehensive Agreement on Investment

The EU and China, two of the most externally integrated global economies, have much in common in the context of international economic governance. However, these two partners have developed different models according to their interpretations and prioritisations of international principles and values. The EU focuses more on its own internal problems, and China expands its reach around the world after its accession to the WTO (the World Trade Organisation) in 2001. Both the EU and China have emerged as ambitious leaders or even normative powers in international economic governance. The EU-China strategic partnership has reached a new equilibrium based on which they manage their contending normative self-understanding. Their four-decade-long bilateral and by now strategic partnership has progressed to a level of complexity whereby their impacts on each other are mutual and inevitable. The principal conclusion of the CAI has advanced in bringing these two major economic powers together. This chapter identifies opportunities that the EU and China have in the negotiation of the CAI despite challenges from current global, regional, and bilateral political issues. Nevertheless, considering EU and China’s individual limits as normative powers and the necessity to cooperate in re-constructing the economy after the pandemic, this “frenemy” situation could last for years with the concluded and eventually enforced CAI serving as a legal foundation and guidance for EU-China policy implementation.