EU ‘dawn raids’ on surveillance kit firm

The European Union has targeted another Chinese company under its foreign subsidies regulation, the Post can reveal.

On Tuesday morning, EU officials entered the premises of the Dutch and Polish subsidiaries of a Chinese firm involved in making surveillance equipment, sources familiar with events said.

There, they accessed the ICT system and staff phones in a dramatic utilisation of an economic tool that has struck fear into Chinese businesses in Europe.

The European Commission said it was “carrying out u nannounced inspections at the premises of a company active in the production and sale of security equipment in the EU”.

The company has not been officially named, but sources confirmed it was Nuctech, a maker of airport scanning equipment and other surveillance machines.

The commission said it had “indications that the inspected company may have received foreign subsidies that could distort the internal market pursuant to the foreign subsidies regulation”.

The China Chamber of Commerce to the EU said authorities seized documents and demanded access to pertinent data. It voiced “serious concern” over the “unjustifiable dawn raids”.

The EU has already used the foreign-subsidies regulation to investigate state handouts in the solar, wind-turbine and rolling-stock industries.

In Bulgaria, a Chinese train maker withdrew from a public tender after being targeted for investigation over a bid the commission said undercut local firms. The inquiry, announced in February, was the first of its kind and marked the maiden use of the tool. CRRC Qingdao Sifang Locomotive Co, a division of stateowned rolling-stock manufacturer CRRC Corporation, had hoped to provide 20 electric trains and their maintenance.

Its bid was reported to be about half that of a Spanish competitor. Brussels had alleged that CRRC had received almost US$2 billion in state subsidies.

Investigations were also launched into whether two Chinese-linked firms used state subsidies to undercut rival bids in a Romanian solar project, while Brussels is looking into subsidies in China’s wind-turbine sector.

Beijing and lobbyists for Chinese businesses in Europe have railed against the regulation, which has fast become the commission’s tool of choice as it attempts to crack down on economic grievances with Beijing.