Access the Editor’s Digest for free
Get a weekly selection of favorite stories from Roula Khalaf, Editor of the FT, in this exclusive newsletter.
The EU is set to launch more investigations into subsidies provided to foreign companies investing in the bloc, as part of its efforts to address what it views as unfair competition, according to the EU’s antitrust chief.
While the measures are not specifically targeted at China, the EU’s foreign subsidies regulation, which was implemented in 2023, has been utilized to scrutinize numerous Chinese companies amid concerns that the oversupply from the world’s largest manufacturer is posing a threat to European industries.
Teresa Ribera, EU executive vice-president for a clean, just, and competitive transition, confirmed that there will be further probes under the regulation, particularly focusing on sectors attracting increasing foreign investment interest. She highlighted industries such as basic and modern industries, chemicals, pharmaceuticals, automotive, and battery sectors as potential areas for scrutiny.
The foreign subsidy regulation enables Brussels to restrict companies subsidized by foreign governments from engaging in public procurement, mergers and acquisitions, and selling goods and services within the single market.
Chinese companies have been subject to investigations under the FSR for bidding on public tenders in Europe, including companies like BYD, a state-owned train manufacturer, a solar panel company, and others. Additionally, ex officio investigations have been launched into a Chinese security scanner maker and Chinese wind turbine sales.
Ribera’s visit to Beijing for high-level environmental and climate discussions comes ahead of a summit between European Commission President Ursula von der Leyen and Chinese President Xi Jinping. The meeting is scheduled to commemorate 50 years of diplomatic relations but takes place amidst trade tensions and EU concerns over China’s support for Russia following the Ukraine conflict.
The foreign subsidies regulation aims to ensure that companies investing in the EU contribute value, talent, and innovation to the bloc. Ribera emphasized the importance of learning from China’s approach of requiring technology transfer and joint ventures from companies investing in their market.
Moreover, Brussels is enhancing “Buy European” provisions in its legislation to bolster the EU market. Ribera also stressed the significance of renewing commitments to the Paris climate accord and multilateralism in light of the US withdrawal from the agreement.
The EU is pushing back against Chinese calls for a joint declaration on climate action unless Beijing commits to significant greenhouse gas emission reductions. Despite these challenges, Ribera remains optimistic about the potential for continued dialogue between the EU and China, particularly in the context of the Paris Agreement and shared commitments to multilateralism.