China has accused the European Union of creating unfair “trade and investment barriers,” issuing the statement shortly after the EU launched a new, in-depth investigation last Thursday under the Foreign Subsidies Regulation (FSR) into Nuctech, a Chinese manufacturer of security equipment. This move came just days after a raid on Temu’s Dublin office, also carried out under the same regulation.
The China Chamber of Commerce to the EU (CCCEU) voiced “strong opposition” to what it described as the European Commission’s “targeted and excessive” investigations aimed at determining whether Chinese state subsidies were distorting competition in the European market.
According to the chamber, the FSR is being applied unfairly: so far, most investigations have focused exclusively on Chinese companies or businesses backed by Chinese capital.
A survey conducted this year by the CCCEU, covering 205 Chinese companies and organizations, found that more than 60% of Chinese firms operating within the EU have been directly affected by the implementation of the FSR. Many companies reported business disruptions, lost commercial opportunities, and increased operational risks. Over half of respondents said the FSR had harmed their reputation and the way they are perceived in the market. Beijing further claimed that some firms were forced to scale back or halt projects as a result of these investigations, leading to losses exceeding $2.05 billion.
A report published in May by the U.S. law firm Arnold & Porter noted that Brussels has launched investigations largely based on political and economic priorities, focusing mainly on strategic sectors such as telecommunications, clean energy, infrastructure, and security equipment.
The EU’s heightened scrutiny of Chinese subsidies comes amid growing worries within the bloc that European industry cannot compete with the surge of Chinese imports. French President Emmanuel Macron has described the situation as a “life or death moment” for Europe’s industrial base.
As a result, despite being major trading partners, tensions between China and the EU are rising, especially over Beijing’s support for renewable energy and electric-vehicle sectors. At the same time, the EU’s tougher approach reflects its broader goals: reaching net-zero emissions by 2050 and reducing technological dependence on China, a shift that signals Europe’s increased focus on security and strategic resilience.
Author: Sesili Adamia
