Chinese companies have been the main target of the European Union’s crackdown on foreign businesses that get subsidies from their home country’s government, McGuireWoods London partner Matthew Hall said in a May 22, 2024, story in Global Competition Review.
A Chinese multinational power company withdrew a bid to build a solar park in Romania after the European Commission said it would launch a probe, under its new Foreign Subsidies Regulation (FSR), into the Chinese government’s support of the company. The China Chamber of Commerce to the EU (CCCEU), a lobby group, argues that foreign subsidies are protected under World Trade Organization Rules and therefore not subject to the FSR.
Hall told GCR that the Chinese government is using the CCCEU to condemn the FSR, and concerns over the burden placed on Chinese companies by the European Commission are “probably valid.” Although the FSR is supposed to be “country-agnostic,” the commission seems to be focusing on China, Hall said.
Hall said it’s not clear how the FSR and WTO rules will interact. The specific WTO provisions at issue relate only to the import of goods, while the FSR applies to a range of activities within the EU.