Beijing has called the European Union “protectionist” after the EU raided the offices of a Chinese security equipment supplier in Europe and probed into China’s procurement market for medical devices.
The European Commission, the executive arm of the EU, on Tuesday carried out its powers given by the Foreign Subsidies Regulation for the first time by inspecting Nuctech’s branches in Poland and the Netherlands without prior notice on Tuesday morning.
Enforcement agencies authorized by the EC seized the Chinese firm’s IT equipment and employees’ mobile phones, scrutinized office documents and demanded access to pertinent data, according to a statement issued by the China Chamber of Commerce to the EU.
The CCCEU said it and its members are profoundly shocked and dissatisfied with the EU’s actions. It said the EU’s raids sent a detrimental message not only to Chinese enterprises but to all non-EU firms in the region.
It said the sudden unannounced inspection undermined the business environment for foreign companies within the EU in the disguise of foreign subsidies.
“The EU has been frequently using its economic and trade ‘toolkit’ and trade remedies,” Wang Wenbin, a spokesperson of the Chinese Foreign Ministry, said in a regular media briefing on Wednesday. “The EU says it is the most open market in the world, but as the world can see, the EU is clearly inching toward protectionism.”
He urged the EU to honor its commitment to open market and fair competition, observe World Trade Organization rules and stop going after and restraining Chinese companies under various pretexts.
The EC said in a statement that the inspected Chinese company may have received foreign subsidies that could distort the internal market under the Foreign Subsidies Regulation.
Medical device markets
The latest raids of Nuctech’s offices in Poland and the Netherlands marked the fifth investigation launched by the EU against Chinese firms in recent months.
Prior to this, the EU has launched investigations against Chinese suppliers of solar panels, wind turbines and electric trains. It accused China of using its socialist economic system to groom its state-owned-enterprises and win green project contracts in Europe.
Last October, the EU launched an anti-subsidy investigation into Chinese electric vehicles.
Apart from these, the EU on Wednesday announced that it has initiated for the first time an investigation under the International Procurement Instrument against Chinese medical device suppliers.
It said evidence showed that China’s procurement market for medical devices has gradually become more closed to European and foreign firms, as well as to products made in the EU.
It criticized China for unfairly differentiating between local and foreign companies, and between locally-produced and imported medical devices.
The EU said it had already raised its concerns over the matter directly and repeatedly with Chinese authorities but had not received satisfactory replies or actions.
It will now invite the Chinese authorities to submit their views, provide relevant information and open a consultation with an aim to eliminate the discriminatory measures.
The EU’s investigation and consultations will be concluded within a nine-month period, which can be extended by five months if needed.
“In recent probes, the EU has set clear targets, abused its procedures and weaponized its investigation tools,” said an unnamed spokesperson of the Chinese Commerce Ministry’s Trade Remedy and Investigation Bureau. “These protectionist acts have distorted the fair competitive environment in the name of so-called fair competition.”
That spokesperson said China will closely monitor the EU’s subsequent actions and take all necessary measures to resolutely safeguard the legitimate rights and interests of Chinese companies.
According to an industry report published by AskCI Consulting Co Ltd, China’s medical device market grew 10.2% to 1.04 trillion yuan (US$143.5 billion) in 2023 from 940 billion yuan in 2022. The figure is expected to surge 9.1% year-on-year to 1.13 trillion yuan this year.
Europe’s medical device market is set to grow 4.1% to US$151.7 billion this year from US$145.79 billion in 2023, according to Eurostat.
Some research institutions said China may have already surpassed Europe to become the world’s second largest medical device market after the United States last year. Even if it has not, it’s likely that China can achieve this in 2024.
Xi’s visit to Europe
Over the past two years, the EU has repeatedly called on China to help end the Russian-Ukrainian war. However, it has been disappointed by Beijing’s response so far.
In a meeting with Chinese President Xi Jinping in Beijing last December, European Council chief Charles Michel requested that China deal immediately with 13 companies involved in supplying Russia with dual-use goods. European Commission President Ursula von der Leyen said China should prevent any attempts by Russia to undermine the impact of sanctions.
In February this year, the EU said it was adding nearly 200 people and entities, mostly from Russia, to its blacklist as they helped provide Russia with advanced technology and military goods manufactured in Europe. Some of these companies are located in Turkey and Serbia.
Media reports said Chinese President Xi Jinping is going to visit France, Serbia and Hungary in early May. Xi will meet with French President Emmanuel Macron in Paris as this year marks the 60th anniversary of China-France diplomatic relations.
China’s industrial overcapacity and support for Russia will be on top of the agenda in the Xi-Macron meeting, said some commentators.
Serbian President Aleksandar Vucic told CGTN in an interview in February that Taiwan is a part of China. He said Xi will visit Serbia this year.
Read: Chinese firms to assemble EVs in Europe, duck tariffs
Follow Jeff Pao on Twitter: @jeffpao3
The west is still peddling the overcapacity narrative.
Germany produces 3 times more cars than it needs and this is not considered overcapacity. These westerners still think the Chinese don’t see through this hypocrisy.
Chinese know this is just a way of saying: we can’t compete and produce affordable electric cars, batteries and solar panels; we need some time to be able to do that.
Even if China scales back, the west won’t be able to reach their objectives. Their money is spent on wars.