China has criticized the European Union’s measures designed to shield European businesses from foreign subsidies, labeling them as trade and investment barriers. This development is the latest in the continuing trade tensions between China and the EU.
The Chinese Ministry of Commerce revealed findings from its investigation into the EU’s Foreign Subsidies Regulation, citing concerns over “selective implementation” following an inquiry that began in July last year as the EU examined Chinese subsidies for electric vehicles (EVs).
While Beijing has yet to outline specific actions in response to these findings, it hinted that potential measures could include bilateral talks, initiating a multilateral dispute settlement, or recommending retaliatory measures.
In addition, Ministry spokesman He Yadong mentioned the possibility of requesting formal discussions with the EU but did not elaborate further.
These tensions arise amidst broader trade disputes, including the EU’s imposition of tariffs reaching 45% on Chinese EVs, which it argues are advantaged by unfair state subsidies. China also accused the EU of targeting Chinese firms through rigorous checks and unfavorable treatment in public procurements.
The EU’s regulation aims to mitigate the impact of foreign subsidies and ensure fair competition within its 27-member states. This policy grants Brussels powers to screen subsidies potentially distorting its markets, with penalties that may include fines, tender suspensions, or blocking state takeovers.
An example of the regulation’s application was a probe into a Chinese train manufacturer intended to enter the Bulgarian market last year, leading the company to withdraw. Similarly, the European Commission conducted searches of Chinese security equipment supplier Nuctech’s offices in Poland and the Netherlands.
Meanwhile, a separate survey indicates that European firms in China are facing pressures to localize operations to adhere to regulatory requirements, adversely affecting efficiency and diminishing global competitiveness.
