EU curbs access for subsidized foreign firms; ‘US players should be targeted’
European lawmakers on Thursday approved new rules to curb acquisitions of companies or bids for public contracts by subsidized foreign companies. Although it has not been indicated which country the rules are targeting, it is widely believed they are aimed particularly at fending off competition from China.
Chinese experts said the most potential targets should be companies from the US, as the country provides the most subsidies for its companies.
According to the Foreign Subsidies Regulation, companies will need to let the EU’s executives know about planned mergers and acquisitions if one of the parties involved has an EU turnover of at least 500 million euros ($515 million) and there is a foreign financial contribution of at least 50 million euros. The European Commission will also investigate tenders in public procurements if the value of a procurement is at least 250 million euros.
The current direction of Western public opinion is that no matter what problems Europe is facing, it will lay the blame for its misfortune on China, which could be the result of efforts from the US, said Cui Hongjian, director of the Department of European Studies at the China Institute of International Studies.
“Europe wants to use the rules as a policy tool to maintain European competitiveness. In fact, for Europe, the blame should be directed at the US rather than China,” Cui said.
“The US has engaged in exclusive subsidies for some of its industries and companies, exemplified by its Inflation Reduction Act of 2022, which makes the EU unable to sit still,” Cui said.
“The above-mentioned law is a manifestation of the EU’s turn toward the US to impose restrictions on Chinese investment,” said Huo Jianguo, vice president of the China Institute for World Trade Organization Studies.
He added that this decision by the EU is very unwise, especially when European economic prospects are unclear, and such behavior will ultimately damage European companies.