The European Union will Protect Itself from Unfair Competition from China
OREANDA-NEWS. The European Commission (EC) will strengthen the protection of European companies from unfair competition from firms from China and other countries, that receive subsidies from the state. The regulator on Wednesday, May 5, introduced a bill requiring foreign firms to disclose information about such subsidies in the event of their takeover of European companies and in the distribution of tenders. Foreign companies will be required to provide such information in transactions or tenders, the amount of which exceeds the established threshold.
In the event of a merger or acquisition, firms will have to provide data on their receipt of state subsidies if the turnover of one of the partners is at least 500 million euros, and the volume of foreign subsidies is at least 50 million euros. In the distribution of tenders, the bar is set at 250 million euros. In both cases, companies will have to notify the EC in advance of receiving subsidies from non-EU governments. Otherwise, they will face fines.
EU Competition Commissioner Margrethe Vestager, introducing the bill, noted that in 2019, the inflow of foreign investment in the European Union amounted to 9 trillion euros. «The openness of European markets requires fairness, this is especially important to support the EU economy during the recovery period after the crisis caused by the coronavirus pandemic», she said.
Meanwhile, the decision on the deepening of economic relations between the EU and China has been postponed indefinitely. A number of MEPs said on May 4, that they do not expect the ratification of the EU-China investment agreement to resume soon.
Chinese President Xi Jinping made a big mistake by imposing sanctions on EU representatives for criticizing human rights violations in China, said Reinhard Bütikofer, an expert on China from the «Green» faction in the European Parliament. Earlier, the Deputy Chairman of the European Commission, Valdis Dombrovskis, said against the background of diplomatic tensions with China, that the ratification of this document will not be actively promoted. «We cannot ignore the broader context of the EU-China relationship», he explained.