Beijing Takes Aim At EU Plans Over Foreign Subsidies

Beijing's ambassador to the EU on Thursday rapped Brussels over plans for tougher rules for heavily-subsidised foreign companies, which would particularly target Chinese firms.

Zhang Ming said the EU was taking a "worrying" path away from open trade, warning that the moves were already making Chinese investors wary.

Ahead of a video summit between EU institution chiefs and Chinese leaders on Monday, Zhang took aim at the EU branding China a "systemic rival".

"Our interaction should be a positive cycle that enables mutual success, not a knock-out match which allows only one winner," Zhang said at an online seminar hosted by the Centre for European Policy Studies think tank.

His comments come after the European Commission, the bloc's executive arm, announced plans for new legislation aimed at ensuring foreign firms backed by heavy state subsidies do not distort competition in Europe.

There is particular concern about Chinese companies swooping in to buy European companies weakened by the coronavirus-triggered recession.

Zhang said China was concerned to see the EU showing "hesitation" about open markets after preaching about them for so long, insisting that Beijing was moving consistently to allow more access to its economy.

"Maybe you can say the speed is not fast enough but the direction is very clear," he said. "Looking at the recent developments on the EU's part, the most worrying thing is the direction."

The commission plans include giving European regulators the power to demand compensation or other measures if a foreign company is determined to be excessively subsidised.

The commission also wants to prevent these same companies from buying up fragile European companies or acquiring a significant stake in their capital. (AFP)