In a development that could have significant implications for Sino-European trade relations, the Ministry of Commerce of the People’s Republic of China concluded its investigation into the European Union’s Foreign Subsidies Regulation (FSR). The findings of this investigation suggest that the FSR discriminates against Chinese firms, creating barriers that hinder the entry of their products, services, and investments into the EU market. This investigation was initiated at the behest of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products in July 2024.
The investigation’s report from China’s Ministry of Commerce highlights unequally applied enforcement measures, which it claims add administrative burdens and inflate compliance costs for Chinese companies in comparison to their EU counterparts. The report asserts that these regulatory practices contravene WTO rules that prohibit such discrimination.
Significantly, the investigation revealed that areas where Chinese firms possess substantial global competitiveness—such as renewable energy, infrastructure, and transportation equipment—are disproportionately affected. This has allegedly resulted in financial damages amounting to at least 15 billion yuan (approximately $2 billion). The absence of a formal response from the European Commission, despite being notified of these concerns, further exacerbates the situation, said spokesperson He Yadong in a statement reported by Chinese media.
Looking ahead, China’s Ministry of Commerce is contemplating countermeasures. These might include pursuing arbitration proceedings through the WTO or implementing “other proper measures” as outlined in China’s Investigation Rules of Foreign Trade Barrier. Past actions similar to this have led to Chinese investigations into EU exports—such as dairy and alcohol—occasionally triggering increased tariffs, according to reporting by Euronews.
To explore further information on this matter, you can read the original article published by JURIST here.