Brussels in Beijing’s crosshairs: clash over anti-subsidy investigations shaking the European market

The Chinese government and its companies denounce a “targeted and disproportionate” use of the EU regulation on foreign subsidies. Tensions rise as Europe steps up checks on firms accused of receiving state aid.

The European Union and China are once again facing off on the terrain of international trade. This time, the dispute centers on the European regulation on foreign subsidies (FSR), the tool introduced in 2023 to counter the distortive effects of public subsidies granted outside the EU. According to Beijing, however, Brussels is applying it in a “discriminatory” manner against Chinese companies.

The most recent spark is the launch of an in-depth investigation into Nuctech, a Chinese giant specializing in security equipment. The move comes just days after the search - also under the FSR - of Temu’s European headquarters in Dublin. For the Chinese Chamber of Commerce to the EU (CCCEU), these actions are not isolated cases but part of a “targeted and excessive” strategy that appears to be hitting almost exclusively Chinese or Chinese-funded firms.

According to data cited by the Chamber, more than 60% of Chinese companies operating in the bloc have already suffered direct or indirect impacts from the application of the FSR: operational disruptions, commercial delays, lost opportunities, and a general deterioration of their reputation in local markets. Beijing openly speaks of trade and investment barriers, estimating the losses suffered by its companies at €2.1 billion.

Brussels, for its part, justifies the tightening of controls with the need to protect European industry from what it considers increasingly aggressive competition. In strategic sectors such as telecommunications, clean energy, and security, the Commission fears that the generous public support provided by Beijing may distort the competitive playing field. These concerns are shared by some European leaders: Emmanuel Macron has warned that European industry finds itself at a “life-or-death” crossroads.

Nuctech has pledged full cooperation, while reserving the right to defend its interests. But the sense is that this case is only the latest chapter in a growing tension where trade, geopolitics, and industrial security increasingly intertwine in a fragile equilibrium.