EU foreign subsidy investigations ramp up

The EU has escalated its anti-foreign subsidy crackdown.

The latest: On Wednesday, EU competition investigators raided the Warsaw and Rotterdam offices of Nuctech, a partially state-owned Chinese security equipment company.

• It was the first raid under the authority of the EU's Foreign Subsidies Regulation (FSR), which took effect in July 2023.

Some context: The FSR was also previously invoked for the April 9 investigation into Chinese wind turbines.

• The EU now maintains dozens of active probes into alleged anti-competitive behaviors.

Among suspected recipients of noncompliant subsidies, Nuctech stands out as a purveyor of sensitive equipment, including airport body and baggage scanners.

• The US blacklisted the company in 2020 on security grounds.
• Various European airports and ports use Nuctech scanners – which has caused political consternation in the EU.

Beijing condemned the investigation, with the Ministry of Commerce warning:

• "[China will] take all necessary measures to resolutely safeguard the legitimate rights and interests of Chinese enterprises."

Get smart: Where the EU sees Chinese anticompetitive behavior, China sees EU protectionism.

• The raid is part of an intensifying battle over whether Chinese companies are unfairly supported or simply more competitive – a question to which there is no simple answer.

Get smarter: Expect further tit-for-tat measures from Beijing as EU investigations continue.