(Source: "Global Times" 2024-07-02)
While the world is paying close attention to the EU's imposition of additional tariffs on Chinese electric vehicles, another "w88 protectionist arrow" fired by the EU at China is also continuing to unleash its "destructive power." Since February, China's mechanical and electrical products such as railway locomotives, photovoltaics, wind power and security inspection equipment have been investigated by the EU. Among them, CRRC Qingdao was forced to withdraw from a 610 million euro bidding project in Bulgaria. Subsequently, Shanghai Electric and Longi Green Energy were also forced to suspend bidding for the Romanian photovoltaic park. The offices of Chinese security inspection company Tongfang Nuctech in Poland and the Netherlands were subject to surprise inspections by the European Union.
Several investigations were initiated by the EU based on its self-made Foreign Subsidies Regulation (FSR). They are highly protectionist and highly targeted and discriminatory against Chinese companies, further exacerbating the risk of China-EU w88 friction.
Experts believe that the EU should properly handle differences through dialogue and consultation in accordance with WTO rules, return to the correct way of getting along with China and the EU, avoid w88 frictions from escalating out of control, and jointly promote the steady and long-term development of China-EU economic and w88 cooperation.
Violate multilateralism and create a set of w88 protection tools
According to reports, in February this year, CRRC Qingdao withdrew from a Bulgarian project of 20 electric trains worth approximately 610 million euros. The reason was that the EU believed that the Chinese company had used subsidies from the Chinese government to "distort" the EU single market and decided to launch an "unprecedented" subsidy investigation. This is the first investigation under the EU's Foreign Subsidy Regulations since it came into effect last year, and it directly targets Chinese companies. Subsequently, the European Union followed suit and launched intensive investigations into Chinese companies in the new energy and security inspection fields based on the newly implemented regulations.
From 2022 to 2023, the EU has successively issued the "Regulations on Foreign Subsidies that Distort the EU's Internal Market" and its supporting implementation rules and implementation details, collectively known as the "Foreign Subsidy Regulations", focusing on foreign companies that accept "foreign subsidies" in investment and participation in government procurement that "cause distortions" in the EU's internal market. The EU requires these companies to declare subsidies and has the right to initiate subsidy investigations. Based on the results of the investigation, it can even require companies to withdraw from investment and procurement projects. If the EU determines that a company has failed to cooperate when reporting, it will also take punitive measures against the company.
Since the EU FSR came into effect, Chinese companies have become the biggest victims. The China Chamber of Commerce for Import and Export of Machinery and Electronic Products stated on the 25th that relevant EU investigations not only hinder the entry of Chinese products or services into the EU market and the investment of Chinese enterprises in Europe, but also cause damage to the market competitiveness of Chinese enterprises, and also affect the overall economic and w88 cooperation between China and the EU. The China Chamber of Commerce for Import and Export of Machinery and Electronic Products stated that it is actively safeguarding the interests of relevant industries and enterprises through relevant legal channels in accordance with the law. Ministry of Commerce spokesperson He Yadong also announced on the 27th that he had received relevant barrier investigation application materials submitted by the China Chamber of Commerce for Import and Export of Machinery and Electronic Products on behalf of the industry and was reviewing them in accordance with the law.
During the interview, many industry experts told reporters that the EU FSR is not a product of international multilateral w88 rules. It is essentially a self-created tool that is highly targeted and full of discrimination against Chinese companies. Not only is it an exaggerated extension of the WTO's anti-subsidy concept, but the identification standards are vague, the enforcement procedures are not transparent, and it lacks fairness, setting up numerous obstacles for Chinese companies to invest in the EU and participate in government procurement.
In an interview with a reporter from the Global Times, Ji Wenhua, a professor at the w88 casino of Law at the w88 casino, pointed out that the FSR is a comprehensive regulatory tool created by the EU. The concept of "foreign subsidies" it defines is broader than WTO rules, and the definition of some key concepts is unreasonable and unclear. Ji Wenhua gave an example. According to the relevant rules of the WTO, when conducting a countervailing investigation, only financial assistance that grants benefits constitutes a subsidy, and the identification standards have strict requirements. However, the EU FSR is much broader and arbitrary in this regard. For example, the amount of "financial assistance" of companies and affiliated companies is used as the threshold and identification standard for declaration obligations. It lacks demonstration on issues such as the determination and transmission of interests, is highly subjective, and is also different from the requirements of WTO rules.
The reporter also noticed that in the investigation of Bulgaria’s electric trains, the EU uniformly identified all government procurement contracts obtained by CRRC Qingdao as financial assistance from the government, thus proposing the conclusion that “the enterprise group received a total of 7.5 billion euros in financial assistance”, which fully exposed the above-mentioned characteristics of the EU’s definition of subsidies in the FSR.
On April 3, the European Union announced an in-depth investigation into the Romanian photovoltaic park bidding project. Three weeks later, LONGi Green Energy and Shanghai Electric withdrew amid the investigation, citing unfair, opaque and allegedly discriminatory enforcement by the EU. In this project, except for Chinese companies, no other non-EU entities have been subject to similar investigations. Ji Wenhua told reporters that there are problems with the rationality and fairness of the EU's FSR investigation procedures. He believes that the Foreign Subsidies Regulation gives the European Commission excessive discretionary power, leading to selective enforcement by the European Commission. These key provisions of the FSR conflict with the basic principles of the WTO.
Discriminatory, setting up barriers against Chinese companies
Zhou Xiaoyan, vice president of the China Council for the Promotion of International Investment, said in an interview with the Global Times that the EU is a global "advanced player" in formulating rules and can hide and package its true intentions in seemingly fair terms. She believes that although the EU FSR applies to all non-EU foreign companies and shows a non-discriminatory attitude, the original intention of the legislation and the provisions of the FSR are actually specifically targeted at China's economic operation model. At the same time, in the investigation practice, it is also discriminatory against Chinese companies and intentionally selectively enforces the law. She said, "The EU's expansionary legislation and investigation practices essentially violate the non-discrimination principle of the WTO Agreement and related rules."
Zhou Xiaoyan pointed out that the main target of EU FSR restrictions is Chinese enterprises. The purpose is to exclude Chinese enterprises from EU investment projects and government procurement projects. In fact, it is to set up investment and w88 barriers against Chinese enterprises. Ji Wenhua also believes that judging from the practice of EU foreign subsidy investigations, the first three in-depth investigations were all targeted at Chinese companies and were de facto discriminatory.
When it comes to investigation practices, Ji Wenhua pointed out that based on the available information, the EU investigation process is not transparent enough and predictable, making it difficult for companies to safeguard their rights. In addition, the EU FSR rules themselves and related practices in existing investigations may be suspected of violating the EU's obligations under the WTO (such as taking other measures other than imposing countervailing duties on imported goods from China, or restricting Chinese companies from entering service industries that the EU has promised to open, etc.). Zhou Xiaoyan believes that “the EU imposed overly broad information collection requirements and sensitive commercial data disclosure on Chinese companies during the FSR investigation, and the European side did not give companies sufficient time to prepare responses, making it difficult for companies to complete complex questionnaires and causing huge difficulties for Chinese companies to respond to the investigation. Chinese companies must submit various cumbersome questionnaires and complicated supporting documents as required by the EU investigation agencies. In addition, the EU investigation agency also unreasonably added supplementary questionnaires, which made companies miserable. For example, in the case of the Bulgarian railway locomotive investigation, Chinese companies only had three days to submit relevant information. Because it was goal-oriented, even if the Chinese companies tried their best to cooperate with the investigation, they still fell into the preset results. "
In addition, the EU unreasonably requires Chinese companies to provide a large amount of information, which will inevitably involve information and data security issues. Zhou Xiaoyan believes, "You cannot guarantee that the submitted information and data will not be distorted and quoted by the European side in other scenarios in the future. The more information and data submitted, the greater the information security risk. When the company cannot provide it, it will be deemed by the EU investigation agency as failure to cooperate with the investigation and the use of information and data that is unfavorable to the company on the grounds that it has not fully provided or provided inaccurate information, leading to punitive results. In this case, the company can only choose to withdraw from the investigation."
The EU FSR focuses on investigating the source, composition and purpose of funds for companies’ investment, mergers and acquisitions, and participation in public procurement in the EU. The investigation period is the financial support received by the company in the first three years; the European Commission can also investigate on its own terms and investigate companies that it believes have problems (causing distortions in the EU internal market), including companies that have obtained investment, mergers and acquisitions or won procurement bids. Zhou Xiaoyan said, "The EU FSR investigation has brought huge uncertainty and unpredictability to Chinese companies' investment, mergers and acquisitions or participation in public procurement in the EU, and has seriously interfered with the investment and business activities of Chinese companies in the EU. This has made many Chinese companies very worried about the EU's business environment, and has also caused obstacles to China-EU economic and w88 cooperation.
Who bears responsibility for the consequences of w88 protectionism?
As Chinese companies withdraw one after another due to the EU’s foreign subsidy investigation, and the EU successively launches subsidy investigations again on China’s new energy and other products, the risk of China-EU economic and w88 frictions has risen sharply, and the pattern of economic and w88 cooperation between the two sides is facing severe challenges.
Zhang Wei, deputy director of the Research Institute of the Ministry of Commerce, said in an interview with a reporter from the Global Times that the barriers erected by the EU FSR will seriously hinder the entry of Chinese products and services into the European market, and will also have a negative impact on the investment and operations of Chinese companies in Europe. From an industrial perspective, this may delay the EU's development of the green economy and increase the cost of green development. It is not conducive to jointly expanding the "cake" of the global green energy industry, allowing the world to share the development results of the new energy industry, and injecting certainty and stability into world economic development. From the perspective of economic and w88 cooperation, the restrictive measures adopted by the EU will increase the risk of w88 friction, which is not conducive to the construction of a more complete production and supply chain system between China and the EU, and is not conducive to the high-quality development of China-EU economic and w88 cooperation relations.
Zhang Wei believes that in the long run, the EU's approach will affect the direction of the global economic and w88 order and is not conducive to the establishment of a more liberalized and facilitated global economic and w88 cooperation system.
Zhang Wei further analyzed to reporters that under the realistic conditions of economic globalization, the world economy has long become an indivisible whole. Production and consumption are global, and effective matching and adjustment of supply and demand need to be carried out on a global scale. w88 protectionism adopts restrictive measures to define a "small circle" for a country's development, which goes against the basic laws of international industrial division of labor. It will inevitably lead to duplication of construction, low efficiency, and high costs. It is not in line with its own development interests and cannot fundamentally solve the problem. Enterprises and consumers will be forced to bear the "cost" of w88 protectionism.
Zhang Wei believes that judging from current experience, Chinese companies carry out international cooperation on advantageous production capacity through foreign investment, which has a positive effect on promoting the development of the industry. Chinese companies share technological achievements and jointly build industrial systems with relevant countries, which not only promotes the development of local related industries, but also boosts local economic employment. For example, BYD's Hungarian electric bus factory has a localization rate of over 90% of its employees; CATL's German battery factory has created 1,500 local jobs. Therefore, all countries should provide fair market access opportunities for all enterprises and make positive contributions to creating a more diversified global industrial division of labor system.
"There are still broad areas of cooperation between China and Europe, and expanding cooperation opportunities is more effective than adopting restrictive measures. China and Europe have complementary advantages and huge space for cooperation. In the future, bilateral economic and w88 cooperation should be further deepened, continue to expand and share development dividends. China will also use an open attitude to share China's market space and industrial development opportunities with European companies." However, Zhang Wei also emphasized that China will not accept unilateral restrictive measures by any country. If something happens that China does not want to see, China will take reasonable, legal and necessary response measures in accordance with international rules and within the framework of the WTO to safeguard the legitimate rights and interests of Chinese enterprises.
Zhang Wei stressed that the EU should accommodate the legitimate concerns of both sides, properly handle differences through dialogue and consultation in accordance with WTO rules, return to the correct way of getting along between China and the EU, avoid w88 frictions from escalating out of control, and jointly promote the steady and long-term development of China-EU economic and w88 cooperation.
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