In recent months, the EU has focused more on Chinese companies accused of receiving state subsidies that distort competition.
Europe Tightens Its Control
The European Union is tightening its control over companies that benefit from foreign state aid, suspecting them of unfair competition. Under the EU Regulation on Foreign Subsidies, investigations have been launched against companies like CRRC and certain solar panel manufacturers involved in a photovoltaic project in Romania. These companies are suspected of having state backing that provides them an unfair advantage in the internal market.
China's Response and Its Consequences
The investigations have triggered a strong reaction from Beijing. The Chinese Ministry of Commerce condemned the processes as "excessive" and "discriminatory," criticizing "unjustified inspections." According to Chinese authorities, such measures impose a heavy administrative burden on businesses, causing several companies to reassess or cancel their projects in Europe. The losses are estimated at about 2 billion euros.
China's Possible Actions
China is considering retaliatory measures against European companies. For instance, an anti-dumping investigation into European brandy and cognac imports has been extended. Such measures can be seen as a response to tariffs on Chinese electric vehicles. However, excessive policy tightening could adversely affect China's own interests, especially with a slowdown in domestic demand.
The situation underscores the EU's determination to regulate competition, while China is prepared to take retaliatory actions to protect its interests. However, the prospects for a compromise remain unclear.
