13th Apr 2024

Chinese train firm subject to first EU probe for foreign subsidies

  • Details shared by the commission show that the deal with the Chinese manufacturer concerns a public tender to the Bulgarian transport ministry for 20 electric trains and a 15-year maintenance deal worth €610m (Photo: EC - Audiovisual Service)
Listen to article

The EU Commission has launched its first in-depth investigation into foreign subsidies deemed potentially market distortive.

The company under investigation is a Chinese train manufacturer called CRRC Qingdao Sifang Locomotive, a subsidiary of CRRC Corporation, a Chinese state-owned company.

Read and decide

Join EUobserver today

Get the EU news that really matters

Instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

The investigation was announced on Friday afternoon (16 February) after a preliminary review justified an official probe under the so-called EU foreign subsidies rules.

"This shows the commission's determination to preserve the internal market," said a commission announcement shared with the press on Friday.

Under the so-called Foreign Subsidies Regulation, companies are obliged to notify their public procurement tenders in the EU when the estimated value of the contract exceeds €250m and when the company was granted at least €4m in foreign aid within three years before the notification.

Details shared by the commission show that the deal with the Chinese manufacturer concerns a public tender to the Bulgarian transport ministry for 20 electric trains and a 15-year maintenance deal worth €610m.

The investigators aim to determine whether financial aid given to the company allowed Qingdao Sifang an unfair advantage over other companies. If foul play is discovered, the commission could block the deal or allow it to proceed if the "distortion is remedied."

The agreement could also be blocked.

EU officials wanting to protect Europe's open economy have been reluctant to tighten economic controls.

But against the backdrop of increasing geopolitical concerns, the EU commission has become convinced more controls are needed.

Last month, the commission also tabled a proposal to strengthen the EU's economic security. The plan consists of a wide range of measures, including stricter checks on foreign direct investments and more rigorous controls on exports, to prevent "undesirable leakage" of technologies and know-how to other countries, which, although not said explicitly, is understood to be targeted primarily at China.

"The simple observation is that there is fierce competition worldwide for the technologies that we need the most," competition commissioner Margrethe Vestager told the press in January. "Europe cannot be the playground for bigger players. We need to be able to play ourselves."


A look to the past and the future of China-EU relations

2023 marks the 20th anniversary of China and the EU's comprehensive strategic partnership, established in 2003. This occasion provides an opportunity to review the past and look into the future, and discuss how to further develop a sound China-EU relationship.

EU reveals 10 'critical tech' in bid to de-risk from China

The EU Commission published a list of 10 technologies with the potential to: undermine peace and security, violate human rights, or harm the EU's interests. The next step is to assess the risks, and then focus on mitigation measures.


Why a Chinese car battery plant in Hungary is not a good idea

Like many other Chinese-owned companies, electric car company Build Your Dreams is subject to the PRC's National Intelligence Law, which mandates that companies provide information to Chinese intelligence agencies, writes Megan Khoo of London-based NGO Hong Kong Watch.

UK-EU deal on Gibraltar only 'weeks away'

EU and UK negotiators said that a new post-Brexit settlement for Gibraltar was just weeks away from completion following four-way talks in Brussels on Friday (12 April).


Calling time on Amazon's monopolism and exploitation

As Amazon's founder Jeff Bezos just reclaimed the title of the richest person on Earth, its workers cannot even take a bathroom break under the pressure of meeting inhumane performance targets.


The Bolsonaro-Orbán far-right nexus

Defeated far-right Brazilian president Jair Bolsonaro has given various reasons for sheltering at the Hungarian embassy in Brasilia — none of them make sense.

Latest News

  1. UK-EU deal on Gibraltar only 'weeks away'
  2. Belgium declares war on MEPs who took Russian 'cash'
  3. Brussels Dispatches: Foreign interference in the spotlight
  4. Calling time on Amazon's monopolism and exploitation
  5. Resist backlash on deforestation law, green groups tell EU
  6. China's high-quality development brings opportunities to the world
  7. Ukraine tops aid list again, but EU spending slumps
  8. Who did Russia pay? MEPs urge spies to give names

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic Food Systems Takeover at COP28
  2. Nordic Council of MinistersHow women and men are affected differently by climate policy
  3. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  4. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  5. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  6. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?

Join EUobserver

EU news that matters

Join us