Response from the Chinese Ministry of Commerce to the EU's subsidy investigations.

The Chinese Ministry of Commerce stated that the European Union's practices in foreign subsidy investigations targeting Chinese businesses hinder trade and investment. The ministry's statement on Thursday came after the completion of an investigation initiated six months ago at the request of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products.

INVESTIGATION INTO TRADE AND INVESTMENT BARRIERS

Last month, the ministry launched an investigation into trade and investment barriers, noting that the EU has conducted preliminary, in-depth, and dominant investigations into Chinese companies operating in sectors such as locomotives, photovoltaics, wind energy, and security control equipment under its own foreign subsidy regulations.

VIOLATION OF WORLD TRADE ORGANIZATION PRINCIPLES

The ministry expressed that, according to stakeholders involved in the investigation, the EU's investigations contain unreasonable practices that violate fundamental principles of the World Trade Organization, such as the prohibition of discrimination. According to the ministry, stakeholders believe that the EU investigations involve inappropriate penalties and unreasonable time constraints, and that the procedures followed are neither transparent nor legitimate.

SELECTIVE PRACTICES AND AMBIGUOUS CRITERIA

The ministry's investigation found that during the EU's investigations, regulations were "selectively applied" and the criteria used to identify foreign subsidies were ambiguous. The ministry noted that the scope of the EU investigations is excessively broad, imposes "enormous burdens" on companies, and that key concepts such as market distortion are defined "subjectively and arbitrarily."

DAMAGE TO CHINA-EU TRADE AND INVESTMENT

The ministry stated that the investigations in question restrict the entry of Chinese companies' products, services, and investments into the EU market, undermine the competitiveness of the relevant Chinese companies and products, and harm trade and investment between China and the EU.

ASSESSMENT OF DAMAGES

At the end of the investigation, it was determined that Chinese businesses suffered significant direct and indirect losses due to the EU's investigations, including 7.6 billion yuan (approximately 1.06 billion USD) in abandoned tender projects and over 8 billion yuan in losses from other affected projects.

INCREASE IN BUSINESS OPERATION COSTS IN THE EU

The ministry also noted that these practices could lead to an increase in business operation costs within the EU, rising consumer prices, and job losses, thereby hindering the stable economic and social development of EU member states.

MEASURES TOWARDS THE EUROPEAN COMMISSION

Ministry spokesperson He Yadong stated at a press conference that the European Commission did not fill out the response paper sent by the ministry during the investigation and did not provide any comments. He mentioned that the European side would take some measures to guide the correction or modification of these practices to provide a clear, equal, fair, non-discriminatory, and predictable environment for Chinese businesses to invest and operate in Europe, and that they would continue bilateral consultations.