EU moves to curtail subsidised firms in veiled swipe at China

Some non-EU firms have ‘undercut their competitors in public tenders … because they get financial support from foreign countries’, competition chief says

Brussels also upgrades its industrial policy after finding that more than half of vulnerable supply chains are dependent on China

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The EU is reassessing its relationship with China, which overtook the US last year to become its biggest trading partner. Photo: Reuters

Published: 11:30pm, 5 May 2021Updated: 10:44pm, 6 May 2021

In a move seen as targeting China, the European Union has proposed new rules to prevent subsidised firms from hoovering up strategic European assets.

The plan was announced on Wednesday alongside an updated industrial policy that was also partly aimed at countering China’s influence on the European economy.

The draft proposals on subsidies, which require approval by the EU’s 27 member states, would make it more difficult for Chinese and other foreign firms to buy EU businesses or assets or bid for public contracts should they be in receipt of state subsidies.

They come as the EU reassesses its relationship with the world’s second-largest economy, which overtook the US last year to become its biggest trading partner.

Less than five months ago, Brussels’ leaders signed an investment agreement with Chinese President Xi Jinping, but since then relations have taken a nosedive.

The draft proposals on subsidies would make it more difficult for foreign firms to buy EU businesses or assets. Photo: Reuters

The coronavirus pandemic has helped pique suspicion over Europe’s reliance on Chinese products, while concerns are swelling about Beijing’s human rights record and its efforts to court influence on Europe’s periphery.