China and the European Union will tie for the world's second largest economy in 2020, Chen estimated.

Chinese President Xi Jinping meets with German Chancellor Angela Merkel, French President Emmanuel Macron, President of the European Council Charles Michel and President of the European Commission Ursula von der Leyen via video link in Beijing, capital of China, Dec. 30, 2020.

The EU said on Wednesday it signed a trade and investment agreement with China, talks for which had started back in 2014, which will give EU companies better access to the Chinese market.

"A strong agreement would be a powerful statement to show that constructive engagement can produce results", Joerg Wuttke, president of the EU Chamber of Commerce in China, said in an emailed statement. "We are open for business, but we are attached to reciprocity, level playing field and values", von der Leyen said on Twitter. In Washington, it will be seen as a snub to the incoming Biden administration, which last week urged the European Union to wait.

In line with standard procedures the text of the political agreement that has been negotiated by the European Commission will now be presented to the EU member countries.

A report in the South China Morning Post said the deal was likely to be clinched this week. Green served as minister counselor for trade affairs at the U.S. Embassy in Beijing as well as in the USTR. In July 2018, amid the trade war between China and the USA, the China-EU summit was seeking for the acceleration of the negotiations of the agreement and put it as the first priority in the bilateral cooperation.

A focal point of their discussions was the protection of workers in China.

Mr Dombrovskis identified overcapacity in steel production, unequal access to public procurement contracts and trade in counterfeit goods as issues in the EU-China trade relationship that the deal could not address.

Joint venture requirements will fall away for the automotive sector, many financial services, private hospitals, advertising, real estate and environmental services, such as sewage.

The negotiations included agreeing on an even playing field in China, including in terms of disciplines for state-owned enterprises, transparency of subsidies and rules against the forced transfer of technologies. It also establishes a mechanism for dispute settlement if one side fails to abide by the agreement.

Under the agreement, China has committed to "work towards" the ratification of outstanding International Labor Organization (ILO) conventions against forced labor.

The deal was reached "in principle" as negotiations drew to a close on the bilateral investment agreement, the negotiators said. The Chinese side had hoped for a trade pact, but Brussels stuck to investment, arguing that a full-fledged trade agreement would take too much time. With the power competition between the USA and China expected to drag on for some time, Beijing is rushing to strike major deals that shut out Washington while expanding its own sphere of influence.

The conclusion of the investment pact is expected to bring substantial economic benefits as well.

"Leaders in both U.S. political parties and across the USA government are perplexed and stunned that the European Union is moving towards a new investment treaty right on the eve of a new United States administration", Matt Pottinger, Trump's deputy national security adviser and a strong China critic, said Wednesday.

The boost is driven largely by Xi's Belt and Road infrastructure-building initiative. EU FDI in China remains relatively modest with respect to the size and the potential of the Chinese economy. "This is true as regards foreign investment in general".

Fifth, Xi urged multilateral cooperation, adding China and Europe should enhance coordination and cooperation within frameworks including the United Nations, the Group of Twenty (G20), the World Trade Organization, and the World Health Organization, facilitate political settlement of worldwide and regional hotspot issues, actively implement the G20 debt service suspension initiative, and support pandemic response and development in Africa, to promote world development and prosperity.