It is not easy to inject the wow factor into often obscure bilateral trade and investment negotiations between politicians and their bureaucrats. The European Union went close in the dying days of 2020 by pulling off a double that seemed highly unlikely – a last-minute trade deal to avoid a calamitous British exit and an investment pact with China . The in principle China-Europe deal, announced by EU leaders after a video call with President Xi Jinping, is the one that can ultimately make a real difference, not only to the economies of the two great trading partners but also global growth. In wake of EU pact, Biden urges ‘coordinated approach’ to deal with Beijing Seven years in the making, the Comprehensive Agreement on Investment (CAI) is the most ambitious deal China has completed with another major economy. Though some areas of the mainland economy remain off-limits to foreign investors, it further opens up China’s economy, including banking and finance and several major industries, making it more integrated with the global economic system. Generally, CAI is a big step forward. To get it over the line, Beijing has had to address some sensitive issues that were key to European consensus. According to EU sources, this includes working towards ratification of International Labour Organization conventions including two on forced labour. Others include the protection of intellectual property rights and, importantly, the transparency of state-owned enterprises. This reflects an incentive for the EU to reach a deal that also opens up Europe’s economy to Chinese investment – a view that it can be a way to influence China’s behaviour. Strategically the CAI is in a sense the revival of an engagement policy with China rather than a containment policy. The latter is fundamentally flawed. Engagement will make a difference in reconciling and compromising over sensitive issues. The EU will increasingly become a source of technical know-how and new markets for China as well as more investment openings. The mainland is not only emerging as the world’s biggest consumer market, but also its economy is growing again. After the pandemic the EU will need trading partners with open-ended growth potential, such as China, to rebuild its own economy, which is in much worse shape than China’s. United States president-elect Joe Biden has responded to the CAI by calling for a “coordinated approach” with the EU to China’s “unfair economic practices”. The EU says the CAI does not mean it cannot work with Washington or screen Chinese investment in sensitive areas. This deal remains to be completed. Ultimately compromise on both sides will be key to that. The devil will be in the detail of self-interest – a reminder that China’s accession to the World Trade Organization took 15 years and the EU is an economic and political union of 27 countries that are not always like-minded.