China-EU Photo: VCG

China has urged the European side to abide by the commitment to market openness and the principle of fair competition, adhere to WTO rules, and cease unjustified suppression of and restrictions on Chinese enterprises under various pretexts, Chinese Ministry of Foreign Affairs spokesperson Wang Wenbin said at a regular press conference on Wednesday, as the EU's probes targeting Chinese companies intensified.

The remarks were made in response to the EU's sudden and unexpected probe of the  offices of a Chinese company in Poland and the Netherlands on Tuesday over the so-called subsidies issue. 

The probe led to immediate responses from Chinese authorities, Chinese business groups in the EU and Chinese experts, expressing shock and concerns over the move in what could be an escalation of the EU's protectionism, leading to rising tensions in bilateral economic relations.

In responding to the EU's probe of offices of the Chinese company, an official with the Trade Remedy and Investigation Bureau of the Ministry of Commerce (MOFCOM) said on Wednesday that such a move sends an extremely negative signal to all foreign companies operating in Europe, and China expresses its grave concern and strong opposition to this matter.

China urges the European side to immediately cease and rectify its erroneous practices, and to provide an open, fair, just and non-discriminatory environment for enterprises from all countries to invest and operate in Europe, the MOFCOM official said, noting that China will closely monitor the European side's subsequent actions and take all necessary measures to firmly uphold the legitimate rights and interests of Chinese enterprises.

It signals a worrisome intention by the EU to weaponize the regulation as a political tool to crack down on Chinese companies and disrupt normal business operations in the bloc, industry insiders said, warning it might backfire.

The probe was the first since the EU's Foreign Subsidies Regulation (FSR) - a new tool of economic coercion targeting Chinese companies -- came into effect in July last year.

It is also the fifth subsidy investigation launched by the European side since February 2024, all pointing to Chinese companies, and it was also the first on-site raid, according to MOFCOM. 

During Tuesday's raids, law enforcement agencies seized the company's IT equipment and employees' mobile phones, scrutinized office documents and demanded access to pertinent data, according to a statement that the China Chamber of Commerce to the EU (CCCEU) sent to the Global Times on Wednesday.

The CCCEU said that it is "extremely shocked at and dissatisfied over" the EU conducting unjustifiable raids, or what the chamber called a "dawn raid," on the Chinese company's alleged subsidies in the EU, noting that the "raid was conducted without prior notice and without solid evidence."

Suspicions of subsidies can be followed by reasonable means of investigation; however, the European side manifested its intention to weaponize the FSR as a tool to suppress lawfully operating Chinese companies in Europe, the chamber added.

A Chinese expert called the EU's sudden probe "unexpected and rough."

Probing into a company's offices without prior notice or permission is unprecedented, very surprising and to some extent indicates the rough interference of the European side with Chinese companies, Cui Hongjian, a professor at the Academy of Regional and Global Governance with Beijing Foreign Studies University, told the Global Times on Wednesday, urging the EU to be lawful and transparent in the investigation process.

Measures involving coercion and excessive politicization, if occurring frequently, will have negative effects due to their disruption of normal business activities, Cui noted.

Tuesday's probe came on the sidelines of the European Commission's launch of another investigation into Chinese public procurement of medical devices. The move is intended to determine if European suppliers have been granted fair access, Reuters reported on Wednesday, citing the EU's official journal.

Responding to the EU's move on Chinese medical devices, the Foreign Ministry spokesperson told a regular press conference on Wednesday that recently the EU has frequently used economic and trade tools and trade remedy measures, sending protectionist signals, targeting Chinese companies and damaging the image of the EU.

The EU has always claimed to be the most open market in the world, but what the outside world has seen is that the EU is moving toward protectionism step-by-step, the spokesperson said.

Also on Tuesday, the EU published two summary notices pertaining to the second and third in-depth investigations under the FSR, which involved Chinese businesses.

The EU's moves targeting Chinese businesses are obviously being intensified. During the past two months, the EU has initiated four investigations under the FSR, all targeting Chinese firms, in areas ranging from wind turbines to solar panels and medical devices, sparking concern among Chinese businesses in the EU and affecting normal business cooperation.

Enacted in January 2023, the FSR has become a tool frequently employed by the EU to crack down on Chinese companies. On April 3 alone, the EU launched two probes under the FSR concerning the "potentially market distortive role of foreign subsidies given to bidders in a public procurement procedure."

The investigation focused on a joint venture comprising ENEVO from Romania and a branch of LONGi from China, as well as subsidiaries of Shanghai Electric Group. This consortium submitted a bid for a solar energy project tender in Romania.

On April 9, the EU announced the probe into Chinese wind turbine suppliers to the bloc under the FSR.

At a press conference held by the Chinese Ministry of Commerce (MOFCOM) on April 11, ministry spokesperson He Yadong said that the EU cannot hold high the banner of combating climate change with one hand advocating global green cooperation, while wielding the stick of trade protectionism with the other hand, imposing restrictions on normal green technology trade and investment.

The EU move is typical protectionism and will seriously affect global efforts to combat climate change and the process of green transformation, damage the confidence of companies from various countries to invest in the EU, and weaken China-EU mutual trust, the spokesperson said.

The sudden unannounced raid on the Chinese company will further undermine the business environment for foreign companies within the EU, the CCCEU said on Wednesday.

The chamber urged the European side to stop abusing the FSR and effectively safeguard the legitimate rights and interests of foreign enterprises and provide a genuinely fair, non-discriminatory business environment for all non-EU enterprises.