Brussels is tracing its battle lines in the China-U.S. triangle by building defenses against foreign state-subsidized companies from undercutting EU rivals ahead of an EU-China summit on Monday 22 June.
The move comes after years of frustration by the U.S. and Europe of unfair market competition with Chinese state-backed companies buying up European businesses, specifically in the technology sector. It has been further propelled by the coronavirus pandemic wreaking havoc on the global economy.
Chinese President Xi Jinping will take part in a video summit with Council President Charles Michel and Commission chief Ursula von der Leyen on Monday, where trade and the planned investment agreement will be discussed.
Before the summit, EU competition chief Margrethe Vestager said on June 17: “We need the tools to ensure that foreign subsidies do not distort our market- just as we do with national subsidies.”
The proposals, which are being discussed by the EU, will aim to address the gaps in EU law over companies using subsidies from foreign governments to win public contracts. They will also review acquisitions by foreign companies.
But Brussels is avoiding the U.S.’ war-like situation with China. It is being firm rather than confrontational in telling foreign continents if there is a national security technology involved, it has every right not to let them acquire it, especially if purchased with money no commercial player could ever have access to.
“I think the Europeans know they don’t want to be played by the United States or China, it wants to stand up for itself,” said Chase.
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