New Developments in the European Union Carbon Border Adjustment Mechanism and Its Impact on China's Foreign Investment and Trade, and Corresponding Countermeasures
The current EU Carbon Border Adjustment Mechanism (CBAM), which has been legislated and entered a transitional period, encompasses major global issues such as climate change, international trade rules, and geopolitics. China-EU bilateral trade and direct investment are critical components of China's international econom-ic cycle. Identifying the strategic intersection between the EU CBAM and China's "dual circulation" strategy is sig-nificant for enhancing political and economic cooperation between China and Europe, achieving the "3060" dual-carbon targets, and advancing comprehensive green economic and social transformation in China.This paper prima-rily analyzes the legislative content, latest developments, and influencing factors of the EU CBAM. It explores the potential opportunities and challenges that the EU CBAM might pose to China's foreign trade and investment, against the backdrop of the new era of trade and climate governance, and investigates the underlying reasons.The analysisshows that, in the short term, the EU CBAM is not expected to significantly impact the scale and layout of China's foreign trade and investment. However, in the medium to long term, its spillover will effects may lead to heightened domestic market competition and increased risks related to reverse investments in relevant supply chains and industries.Therefore, China should aligning the development of the carbon market with industrial green trans-formation, promoting Sino-European dialogue and multilateral cooperation, to facilitate the construction of a new development pattern and support the high-quality development of China's foreign economy.