In 2 May 2011, European Commission launched a public consultation on the future investment relationship between European Union and China, proposing three options: a comprehensive investment agreement; a standalone investment protection agreement; and continue with the current framework.[1] On 14 July 2011, the EU’s Trade Commissioner Karel De Gucht met China’s Commerce Minister Chen Deming, in Beijing. They agreed to start negotiations centred on China-EU investment agreements soon.[2] In September, EU’s Trade Commissioner Karel De Gucht has told EU executives and officials at a seminar on challenges facing EU businesses in China that he hopes to launch these negotiations at the EU-China Summit in Tianjin, on 26 October 2011.[3] But the EU-China Summit has been postponed due to the European Council’s meetings on eurozone crisis. This paper examines how the European Union should design and negotiate an investment agreement with China. Firstly, we analyse several aspects of the bilateral economic relations, such as the High Level Economic and Trade Dialogue, the Partnership and Cooperation Agreement, the bilateral concerns regarding trade and investments, the interactions at the World Trade Organisation, and the growing importance of the G 20, in order to identify the challenges that European Union should respond. Secondly, the paper proposes recommendations regarding: the pillars of a new European Union-China strategy, the measures needed to restart the economic relationship, the type and the content of the investment agreement we should choose. (the most feasible - the standalone investment protection agreement)
