Brussels is increasing pressure against alleged unfair Chinese competition

With a series of striking actions, the European Union is stepping up the fight this week against what it sees as unfair Chinese competition. On Wednesday it became clear that the European Commission had raids on Tuesday at, among other things, a Rotterdam branch of a Chinese security equipment company. Earlier in the day, Brussels announced that it would also conduct an in-depth investigation to determine whether China is wrong to keep its market closed to European medical equipment companies.

The two studies are separate, but both address the question: how fairly does China compete? They join a large number of investigations that the European Union launched last year into possible unfair Chinese competition. Brussels previously announced that it would also look at possible disruptions in the market for electric cars, wind turbines and solar panels, among other things.

Not a raid before

With the raid on the Dutch branch of the Chinese company Nuctech, Brussels wants to find out whether Chinese state aid has been secretly provided, which would give the company an advantage over European competitors. It is the first time that the European Commission has actually conducted an investigation into unfair foreign state aid.

The raids took place on Tuesday at branches in Poland and the Netherlands of Nuctech, a Chinese state-owned baggage security scanner company. In recent years, there has been growing discomfort in the EU about the company’s growing market share and the risks of espionage that this would entail. Nuctech equipment is used in crucial places where highly sensitive data is passed by.

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MEPs previously raised the alarm about the very central role of Nuctech scanners in the security of European borders, ports and airports. In Belgium, among others, the Chinese company has already been banned in recent years due to national security considerations. The VVD recently asked parliamentary questions to urge the Netherlands to take action against Nuctech.

The raids launched on Tuesday do not appear to be related to suspicions of espionage. In a statement, the Commission said the action follows “indications about possible foreign subsidies that could distort the internal market.” While the investigation is ongoing, Brussels does not want to make any further statements.

In a statement, the Chinese Chamber of Commerce (CCC) condemned the “unwarranted attacks” that it said were launched “without prior notice and without solid evidence.” According to the CCC, “the company’s IT equipment and employees’ mobile phones” were seized, among other things.

Medical instruments

News of the raids came on the day the European Commission also announced it would investigate the Chinese medical device market. There are concerns that China is unfairly favoring domestic suppliers of these resources. The investigation must show whether these concerns are correct.

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With the investigation, the EU wants to guarantee “a level playing field”, Trade Commissioner Valdis Dombrovskis said in a statement on Wednesday. “Unfortunately, our repeated discussions with China regarding this trade irritant have been fruitless.”

The EU suspects that China imposes stricter rules on foreign companies than on its own medical device manufacturers. It is not clear how great the effects would have been on European companies. If the investigation indeed reveals unfair competition, the Union could restrict China’s access to tenders in Member States. The investigation will take about nine months.

There was an immediate strong response from China on Wednesday to the new research. “The EU has always prided itself on being the most open market in the world, but what the outside world sees of course is that the EU is moving step by step towards protectionism,” Chinese Foreign Ministry spokesman Wang Wenbin told reporters. news agencies.

The growing list of investigations is fueling fears in Europe of Chinese retaliation against European companies. For example, if the Commission decides next year to introduce tariffs on electric cars from China, this will almost certainly not be without consequences – which will further increase trade tensions.

Relationships on edge

The investigations come in a week in which the relationship between the EU and China has already become tense. On Monday, Germany announced that it had arrested three Germans on suspicion of spying for China. On Tuesday, there was also the arrest of an employee of a prominent German MEP who is suspected of having passed on information from the European Parliament to the Chinese intelligence services.

Arrests also took place in the United Kingdom on Monday on suspicion of espionage for China. In its annual report, the AIVD emphasized on Tuesday that the threat of cyber attacks by China, in addition to Russia, has increased significantly last year.

Amid these tensions, Chinese President Xi Jinping is scheduled to visit France in early May. It is his first visit to Europe since the corona pandemic.

Mmv Sezen Moeliker

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