Chinese business group slams EU probe into trainmaker

2024-02-18 09:05:24Global Times Editor : Li Yan ECNS App Download

The main Chinese business group in the EU on Saturday slammed the EU's so-called anti-trust investigation into a Chinese trainmaker, saying it is disappointed and has deep concerns over the EU move, while warning the bloc against discriminatory actions against Chinese companies. 

The EU's latest move against Chinese firms demonstrated the growing trend of protectionism against Chinese and other foreign businesses operating within the bloc, a double-edged sword that will hurt both the businesses involved and the EU's economy, Chinese experts said, noting any EU sanctions would draw countermeasures from China.  

On Friday, the EU's antitrust regulators launched an investigation into Chinese trainmaker CRRC Qingdao Sifang Locomotive, a subsidiary of CRRC Corp, the world's biggest producer of rolling stock, as the firm notified EU authorities about its plan to take part in a Bulgarian tender for electric trains, Reuters reported.

Following a preliminary review, the EU said that it would launch a full-scale investigation, citing "sufficient indications that the company has been granted a foreign subsidy that distorts the internal market," according to Reuters. 

In a statement shared with the Global Times on Saturday, the China Chamber of Commerce to the EU (CCCEU) sharply criticized the EU move. "The CCCEU expresses its great disappointment and deep concerns with this investigation," the statement read. 

The business group noted that this is the "first in-depth investigation" into foreign subsidies in the public procurement sector since the EU's promulgation of the Foreign Subsidies Regulation, and it is also the first such probe into a Chinese company.

The EU's so-called Foreign Subsidies Regulation came into effect in July 2023, a move that EU authorities claimed would stop "distortive subsidies." The regulation sparked widespread concerns among Chinese firms, which have been increasingly targeted in protectionist moves by the EU. 

"The CCCEU consistently advocates for EU institutions to adhere to the principles of market openness and fair competition when adopting or applying any policy tools," the Chinese business group said, urging the EU to avoid having a discriminatory impact on foreign companies, or leading to new distortions by offering privileges to the EU's locally owned companies.

The CCCEU, which represents more than 1,000 Chinese-funded companies in the EU, pointed out that the EU's so-called antitrust investigation into CRRC Qingdao Sifang Locomotive has sent a "discouraging message" to Chinese investors and hit their confidence in continuing to expand in Europe. 

The investigation came after the EU took other steps targeting Chinese companies. In October, the EU launched an anti-subsidy investigation into Chinese electric vehicles, which has been criticized by Chinese officials, who said the move is not transparent, unfair and could be in violation of WTO rules and the EU's own laws. 

In January, the European Commission released the so-called European Economic Security Package, which called for tighter scrutiny of foreign investment and more coordinated controls on exports and technological outflows. The move reportedly was aimed at China and was criticized by Chinese officials as protectionism and unilateralism. 

Zhao Junjie, a research fellow at the Chinese Academy of Social Sciences' Institute of European Studies, said that the EU's growing protectionism reflects its internal economic woes and is influenced by the protectionism of the US. 

"Affected by the Russia-Ukraine conflict, Europe's economic situation is dire in recent years. Under such circumstances, it is more willing to raise the banner of trade protectionism. I think this latest investigation is another manifestation of Europe's trade protectionist measures," Zhao told the Global Times on Saturday.

Zhao said that the EU's so-called antitrust investigations will be a double-edged sword because any EU sanctions or other moves will draw countermeasures by China. As the Chinese and EU economies are closely intertwined, "the EU's sanctions and crackdowns against Chinese firms will produce bad impact," he said.

As for the EU's rising trend of protectionism, Zhao suggested that China should respond in a compartmentalized way, in which "we should also look toward to cooperation despite the tensions, while looking with clear eyes at the long-term disputes. We shouldn't lose sight of the development prospects of China-EU economic and trade ties because of such incidents."

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