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Spokesperson of Chinese Mission to the EU Speaks on a Question Concerning EU White Paper on Foreign Subsidies
2020/06/18

Q: The European Union today released a white paper on foreign subsidies which is now open for public consultation. According to the paper, measures will be taken to address the distortive effects of foreign subsidies on the EU single market. Measures include investigations on companies that receive foreign subsidies of more than 200,000 euros in three years, requiring companies to notify their acquisitions of EU companies and go through reviews, and conducting review and even restriction on bidders in the EU public procurement procedures. Some analysts pointed out that the white paper mainly targets Chinese companies' M&A activities in Europe and deals with China's unfair competition. What is your comment?

A: We have noticed the white paper on foreign subsidies published by the Commission today, and will study it carefully. It is hoped that the relevant EU measures will comply with the basic principles of the WTO, keep clear of protectionist moves, and refrain from creating new trade barriers under the pretext of subsidies, with a view to fostering a good business environment for the operation and development of foreign-invested enterprises. At this special moment when nations are joining forces in the fight against COVID-19, the EU needs to avoid sending negative signals to the outside world.

Subsidy is a commonly used policy instrument. Developed countries such as those in Europe and the United States are the primary users of subsidy policies. China's approach to subsidies is crystal clear, namely, following the WTO rules and China's commitments made on its accession to the WTO. China's subsidy measures are primarily designed to encourage environmental protection and energy conservation, support R&D activities and innovation, and promote optimization of corporate structure, which is in compliance with WTO rules. China strictly observes the WTO transparency principle on subsidies by making regular notification of the revision, adjustment and implementation of the relevant laws, regulations and measures. China's level of notification is already higher than that of most of other developing members and close to that of developed members.

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