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European Commission building in Brussels, photographed in August 2019.
London
CNN
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European Union officials raided the offices of Chinese security equipment maker Nuktec as part of a subsidy investigation, exposing growing tensions between the bloc and one of its biggest trading partners.
The European Commission announced on Tuesday that it had carried out “surprise inspections” on the premises of companies that manufacture and sell security equipment in Europe. It is suspected that the person may have obtained an unfair advantage. from state subsidies. The company name was not disclosed.
“The Commission has indications that the inspected companies may have received foreign subsidies that could distort the (EU) internal market,” the EU executive body said in a statement on its website. said.
Late Wednesday, Nuctech confirmed to CNN that its offices in Poland and the Netherlands are undergoing inspections. The company makes baggage security scanners for airports and other equipment. In 2020, the U.S. government added Nuctech to the list of entities subject to stricter licensing requirements for “engaging in activities contrary to the national security interests of the United States.”
“Nuktech is cooperating with the European Commission and is fully committed to upholding its reputation as a fully independent and self-reliant economic operator,” Nuktech said in a statement.
The Chinese Chamber of Commerce in the EU, whose members include Chinese state-owned and private companies, expressed “strong dissatisfaction” with the raid. It was carried out “without prior notice and without any hard evidence.”
“The European side has expressed its intention to weaponize foreign subsidy regulations as a means to suppress Chinese companies operating legally in Europe,” the lobby group said in a statement.
In response, a spokesperson for the European Commission told CNN there were “corroborated indications” that the companies in question may have received “distortive foreign subsidies that benefit their activities in the EU.” Based on this, authorities are conducting unannounced inspections.
The spokesperson added, “The inspection is at an investigative stage and is in no way a pre-judgment of the commission’s findings.”
The raids are the first under the EU’s new powers against excessive foreign subsidies, and include the EU’s recently launched state-of-the-art measures against Chinese wind turbine companies and Chinese companies bidding for solar power contracts in Romania. This follows an investigation into support.
The foreign subsidies regulation, which came into force in July last year, aims to address market distortions caused by subsidies from foreign governments and ensure that EU companies can compete on a level playing field.
Tuesday’s raid also comes as the European Commission president said the Group of Seven industrialized countries are struggling with “structural overproduction” in other regions, or “overproduction that is largely achieved through subsidies and large subsidies.” This came on the same day the company said it was launching efforts to address the imports caused. ”
Ursula von der Leyen said: “We have to be extremely vigilant so that producers do not run the risk of being forced out of the market.” speech.
She did not mention China, but there is growing evidence of tensions between the world’s largest manufacturers and major trading partners including the European Union and the United States. Oversupply of cheap Chinese products in overseas markets.
“We are consulting with our G7 partners on this issue as it is a matter of common concern,” an EU official told CNN on Wednesday. It added that it would be discussed at the meeting.
China’s global trade surplus in goods has rapidly increased in recent years and is now approaching $1 trillion.
During a visit to China earlier this month, U.S. Treasury Secretary Janet Yellen warned of the risks that overproduction of certain goods in the world’s second-largest economy poses to jobs and businesses in the United States and elsewhere. Her message was clear. It is necessary to curb the rapid increase in China’s exports of electric vehicles, solar panels, and batteries.
U.S. Secretary of State Antony Blinken, who is currently on a visit to the country, expressed concerns about China’s trade policies and “non-market economic practices” in a meeting with Party Secretary Chen Jining in Shanghai on Thursday, according to a U.S. government spokesperson.
those worries G7 foreign ministers expressed similar views at a meeting in Italy last week. “We are concerned that China’s non-market policies and practices are leading to harmful overcapacity and undermining the resilience of our nation’s workers, industry and economy,” the officials said in a statement.
The Chinese government sees exports as an important tool to revive China’s slowing economy. Europe and the United States are increasingly focusing on high-value exports in industries they see as strategically important in greening their economies.
Jennifer Hansler in Beijing contributed reporting.
This article has been updated with additional information.
