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Brussels has raided a Chinese security equipment supplier and introduced a new foreign subsidy regime in a move that further escalates tensions between the trading powers ahead of President Xi Jinping’s visit to Europe.
The raids by the European Commission and local police on the offices of unnamed companies in Poland and the Netherlands come as Brussels takes a firm stand against what it sees as China’s unfair trade practices. The move comes as the company launches a separate investigation into China’s medical device market. .
The Chinese Chamber of Commerce in the EU on Tuesday morning condemned what it called a “dawn raid” on security equipment companies, accusing Brussels of unfairly “weaponizing” its regulatory powers against Chinese companies.
This is the first time the city of Brussels has used new foreign subsidy regulations to justify raids on companies. In February, it used its authority to launch an investigation into Chinese railway manufacturers.
“The sudden surprise inspection on April 23rd harms the business environment for foreign companies in the EU under the guise of foreign subsidies,” the Chinese Chamber of Commerce and Industry said. Neither the chamber nor the EU has identified the company.
The EU is China’s second largest trading partner and one of its most important sources of foreign investment. However, tensions between Beijing and Brussels are rising, with the latter launching multiple anti-subsidy investigations in recent months.
The European Union has accused China of fueling industrial overcapacity, especially in electric vehicles and renewable energy, which compete directly with European companies, increasing the risk of dumping in the EU market.
The escalating friction could make it difficult for Xi to visit Paris, where he is scheduled to meet with French President Emmanuel Macron next month.
The commission said in a statement that the raids were carried out after “indications that the inspected companies may have received foreign subsidies that could distort the domestic market.” .
“The surprise inspection is part of a preliminary investigation into allegations of distortion in foreign subsidies,” the ministry said.
The chamber said enforcement agencies “authorized by the European Commission” had seized IT equipment and mobile phones, reviewed documents and requested access to “relevant data”.
The statement accused the EU of using anti-subsidy investigations as a “weapon” to “repress” Chinese companies and carry out “unwarranted ‘dawn raids'”.
“We call on Chinese companies to provide a truly fair and non-discriminatory business environment.”
The EU also announced on Wednesday that it had launched an investigation into China’s medical equipment market, saying European manufacturers were being unfairly blocked from supplying doctors and hospitals.
The committee said Chinese laws, including the “Buy China” policy, “give preferential treatment to the procurement of domestic medical equipment and services.”
This study marks the first use of the new international procurement instrument. If the EU determines that there is discrimination, it could take measures to prevent China from accessing its own market.
Raids and anti-subsidy activities create fear of retaliation. China has countered Western accusations of oversupply, saying the United States and its allies are trying to suppress and contain its industry. An anti-dumping investigation into French brandy has been launched.
During a meeting with German Chancellor Olaf Scholz in Beijing last week, President Xi said China’s exports were contributing to easing global inflation and supporting the transition to clean energy.
Chinese authorities have also carried out a series of raids on the offices of foreign consultancies over the past year, many without official explanation or approval, usually in the name of national security. considered to be related.
