China on Thursday said that an investigation had found the EU imposed unfair “trade and investment barriers” on Beijing, marking the latest salvo in long-running commercial tensions between the two economic powers.
Officials announced the probe in July last year after Brussels began looking into whether Chinese government subsidies were undermining European competition.
Beijing has consistently denied its industrial policies are unfair and has threatened to take action against the EU to protect Chinese companies’ legal rights and interests.
Photo: AFP
The Chinese Ministry of Commerce said the implementation of the EU’s Foreign Subsidies Regulation (FSR) discriminated against Chinese firms and “constitutes trade and investment barriers.”
It did not mention whether Beijing planned to take action in response.
The two are major trade partners, but are locked in a wide-ranging standoff, notably over Beijing’s support for its renewables and electric vehicle sectors.
EU actions against Chinese firms have come as the 27-nation bloc seeks to expand renewable energy use to meet its target of net zero greenhouse gas emissions by 2050.
However, Brussels also wants to pivot away from what it views as an overreliance on Chinese technology at a time when many Western governments increasingly consider Beijing a potential national security threat.
When announcing the probe, the Chinese ministry said its national chamber of commerce for importing and exporting machinery and electronics had filed a complaint over the FSR measures.
The 20-page document detailing the ministry’s conclusions said their “selective enforcement” resulted in “Chinese products being treated more unfavorably during the process of export to the EU than products from third countries.”
The FSR had “vague” criteria for investigating foreign subsidies, placed a “severe burden” on the targeted companies, and had opaque procedures that created “huge uncertainty,” it added.
EU measures such as surprise inspections “clearly exceeded the necessary limits,” while investigators were “subjective and arbitrary” on issues such as market distortion, the ministry said.
Companies deemed not to have complied with probes also faced “severe penalties,” which placed “huge pressure” on Chinese firms, it added.
The European Commission on Thursday defended the FSR, saying it was “fully compliant with all applicable EU and World Trade Organization rules.”
“All companies, regardless of their seat or nationality, are subject to the rules,” a commission spokesperson said in a statement. “This is also the case when applying State aid or antitrust rules.”
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