Poorly timed or according to plan? motivations and interestst of the European Union regarding the new investment agreement with China new iv

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At the end of 2020 the European Union (EU) concluded the Comprehensive Agreement on Investment with China that had been seven years in the making. However, the agreement could not have come at a more conspicuous timing, as the EU’s stance towards China and its economic practices is hardening, and before the newly elected Biden administration was inaugurated. There has been a dearth of theoretically informed political science research regarding the EU’s ten year’s old competency over investment. This thesis aims to fill the gaps by utilizing a contrasting approach of neo-mercantilism and liberal institutionalism in order to explain why the EU decided to conclude the agreement and provide a systematic overview of EU-China investment relations. In order to empirically test the hypotheses deduced from the theories, the research employs process-tracing and document analysis. The thesis concludes that the explanatory narrative grounded in neo-mercantilism provides for a sufficient explanation of the research question and is supported by the empirical record. The EU had to secure its geo-economic interests in the growing Asia Pacific and its most important economy, boost the competitiveness of its top performing businesses in the largest consumer market, and reach parity with the US in order to not be economically disadvantaged and potentially confront China as equals. Neo-mercantilism rightly emphasized dominant business interests, relative power considerations and distrust to explain the choice by the EU to conclude the agreement
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