Pre-Entry National Treatment in EU-China Comprehensive Agreement on Investment: An Open Sesame to the Chinese Market?

Since its inception, the EU-China Comprehensive Agreement on Investment (CAI) has prioritised the goal of market liberalisation. To this purpose, the EU has proposed that the CAI should include, among other market liberalisation disciplines, a pre-establishment national treatment requirement with a narrow list of exemptions. However, China’s 2019 legislative overhaul in the sphere of foreign investment regulation, which introduced pre-establishment national treatment for foreign investment and repealed its long-standing case-by-case clearance procedure, casts doubt on the value of the EU’s proposal. At the same time, despite the new regulations, market access difficulties for foreign investors have not been eliminated entirely, and new issues have emerged from China’s reforms and increasingly politicised investment settings. This chapter examines the effects and limitations of the pre-establishment national treatment discipline alongside the negative list approach in the CAI, in light of persistent and emerging concerns with market access in China.