EU targets China with new powers over state-backed companies, World News


Brussels is seeking to strengthen its ability to control China’s forays into the European economy, with new powers proposed to probe foreign state-backed companies seeking to smash European businesses.

The settlement, which will be announced on Wednesday by European competition supremacy Margrethe Vestager, is part of Europe’s hardening of stance against Beijing, as China remains the continent’s second largest trading partner after the United States.

Brussels is trying to maintain a cautious balance in its relations with the Asian superpower, Germany eager to maintain links with a country which remains a destination of choice for its exports.

But other member states point to China’s growing authoritarianism, especially in the plight of the Uyghur minority and in the political repression in Hong Kong.

According to an official document seen by AFP on Tuesday, the proposal would give Brussels new powers to investigate non-European companies seeking to buy European companies with turnover of 500 million euros or more.

State aid investigations could also be launched in companies bidding for large public contracts in Europe – such as trains or telecommunications equipment – worth € 250 million or more.

In addition, the commission could open surveys on its own initiative, without a transaction necessarily reaching these thresholds.

Illegal subsidies could include companies with zero-interest loans, preferential tax treatment or more traditional direct subsidies, the document said.

The proposal makes no mention of China and is not formally aimed at countering any particular country, but sources agreed that long-standing concerns about China were at the heart of the idea.

The settlement comes shortly after the commission, which manages the EU-27’s trade policy, surprised many by sealing an investment deal with Beijing after negotiations had stalled for years.

The investment pact faces a brutal ratification process, and Vestager’s anti-subsidy proposal could reassure skeptics that the deal does not mean closer scrutiny from Beijing.

The anti-subsidy regulation, after being announced by the committee, faces potential changes from the European Parliament and Member States before entering into force.


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