【By Observer News Network, Wang Yi】Ignoring China's opposition, the European Commission has once again turned its focus on Chinese companies. On February 3, local time, the European Commission announced that it had initiated a deep investigation into China's wind power company Goldwind Technology based on the Foreign Subsidies Regulation (FSR), claiming that it has received "distorting" government subsidies in the EU market. In response, the China Chamber of Commerce in Europe expressed serious concerns and firm opposition, stating that the frequent investigations by the EU have disrupted normal business operations, causing Chinese enterprises to "suffer direct and indirect losses of hundreds of millions of euros".

The European Commission alleged that preliminary investigations found "indications" suggesting that Goldwind Technology "may have received foreign subsidies", including government grants, tax incentives, and preferential loans, and thus decided to formally open an investigation.

The Wall Street Journal pointed out that this is the latest investigation launched by the EU under the Foreign Subsidies Regulation. The regulation came into effect in July 2023, and is a relatively new regulatory tool that gives the European Commission broad powers to review companies it believes have received "external support" from non-EU governments. The European Commission can intervene when companies participate in public procurement or mergers and acquisitions, or it can proactively initiate cases based on market clues, with the Goldwind case falling into the latter category.

Since the Foreign Subsidies Regulation came into effect, the EU has repeatedly used it to investigate Chinese companies, and China has expressed opposition multiple times. The relevant investigations involve fields such as railway equipment, photovoltaics, and security equipment.

According to sources, this tool will be used more widely against Chinese companies this year, and further investigations are expected in areas such as railway equipment.

At a press conference, the European Commission openly stated that it would not rule out investigating other Chinese wind power companies, saying, "We are still monitoring the market."

Goldwind's offshore wind turbines Goldwind Technology

The European side said that the in-depth investigation into Goldwind Technology is expected to be completed by the end of 2027, which may lead to three outcomes: the company makes commitments to address EU concerns, the European Commission imposes so-called "corrective measures," or finally determines that there are no distorting subsidies. Potential penalties include requiring the company to divest assets or businesses in the EU, restricting its participation in EU public procurement, or even designing systems to "favor" European domestic companies.

As of the time of writing, Goldwind Technology has not yet responded to this matter.

On February 3, the China Chamber of Commerce in Europe noticed the EU's initiation of an in-depth investigation into Goldwind Technology. The chamber expressed serious concerns and firm opposition, pointing out that "the EU's frequent investigations have disrupted our companies' normal business operations, bringing uncertainty to their development in the EU market, and Chinese companies have therefore suffered direct and indirect losses of up to hundreds of millions of euros," and "the use of FSR by the EU has a negative impact on Chinese companies' investments in the EU and limits their fair participation in EU public procurement."

The South China Morning Post reported that although some people speculated that tensions between the EU and the US might push the EU closer to China, commercial frictions between the two sides are still intensifying. In addition to the wind power investigation, the European Commission also pushed member states to exclude Chinese telecom giants Huawei and ZTE from mobile communication networks under the proposed cybersecurity law.

Additionally, the upcoming "Industrial Accelerator Act" is expected to include a "Buy European" clause, covering key industries such as steel, cement, wind power, and batteries, aiming to encourage member states to prioritize European suppliers.

The report analyzed that the latest FSR investigation will further escalate bilateral tensions. Unlike traditional trade investigations, this tool, originating from the field of competition law, moves quickly, and companies may be required to submit large amounts of information within strict deadlines, a practice that has previously caused strong dissatisfaction among Chinese enterprises.

China's largest security equipment manufacturer, Tongfang Weishi Technology Co., Ltd., filed a lawsuit with the Court of Justice of the European Union in 2024, claiming that surprise inspections under the FSR framework damaged its reputation and forced it to provide information located outside the EU, which may violate Chinese laws. However, the European Court rejected Tongfang Weishi's request, ruling that companies operating in Europe must comply with local laws and stating that "the European Commission has the right to request information from regions outside the EU."

Last December, the EU's preliminary investigation found that Tongfang Weishi "may have benefited from foreign subsidies" and initiated an in-depth investigation.

China's Ministry of Commerce spokesperson He Yadong responded at the time, saying that China noted that the European Commission has recently conducted a series of investigations on Chinese companies under the Foreign Subsidies Regulation, launching in-depth investigations on China Railway Group and Tongfang Weishi, and even conducting on-site raids on Chinese digital platforms, which are despicable and clearly targeted and discriminatory. China strongly opposes this.

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Original: toutiao.com/article/7602663074939683355/

Statement: This article represents the views of the author.