Europe’s China problem: investment screening and state aid

As the Chinese share of global GDP grows, so have concerns about its use of subsidies to facilitate acquisitions. These concerns relate to the use of investment as a political tool, through the acquisition of strategically relevant companies and technologies, and the use of state aid to gain competitive advantages in European markets. Since World Trade Organisation (WTO) rules have failed to provide protection against foreign state aid, the EU is developing its own unilateral tools. This is the context behind the European Commission White Paper on levelling the playing field with regard to state aid that the European Commission published 17 June. The paper does not mention China explicitly, concerns over Chinese subsidies and state-owned enterprises (SOEs) are evident when reading in between the lines.
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