Commentary: The EU's economic and trade "chain tactics" towards China have miscalculated

On May 15th, the Chinese Ministry of Justice determined that the EU's use of its Foreign Subsidies Regulation (FSR) to conduct cross-border investigations into China constitutes an "inappropriate extraterritorial jurisdiction measure", which explicitly states that "no organization or individual shall execute or assist in execution". This is the first time that China has used the "Regulations of the People's Republic of China on Combating Improper Extraterritorial Jurisdiction over Foreign Countries" to say no to the EU's actions. The weight is significant and the EU must not be careless. For a period of time, the EU has been intensively implementing and intensifying economic and trade restrictions on China, with a set of "policy tools" pouring down, targeting Chinese enterprises and industries. Although these practices have their own "names", they are actually practicing "protectionism" in the name of "fair competition" and "de Sinicization" in the name of "risk reduction". As warned by the spokesperson of the Chinese Ministry of Commerce on the 16th, the EU is "going further and further down the wrong path".

As early as January 2025, the Chinese Ministry of Commerce legally determined that the EU FSR investigation constituted a "trade and investment barrier". But afterwards, the European side not only failed to restrain itself, but also intensified and expanded the scope and depth of the investigation. From railway equipment, wind power companies, security inspection equipment to cross-border e-commerce, the frequency and scope of the EU FSR survey targeting China far exceed the normal range. Moreover, in the relevant investigation, the EU has requested a large amount of non essential information within China from Chinese entities, which is a clear cross-border behavior. The Ministry of Justice's announcement to implement countermeasures through legal means is a powerful safeguard for the legitimate rights and interests of Chinese enterprises and a firm defense of fairness and justice.

In the legislative process of the Industrial Accelerator Act, the EU plans to set many restrictive requirements on the four emerging strategic industries of batteries, electric vehicles, photovoltaics, and key raw materials, which are mainly targeted at Chinese enterprises; Simultaneously setting exclusive clauses such as "EU origin" and "EU manufacturing priority" in public procurement and public support policies constitutes serious investment barriers and institutional discrimination, suspected of violating WTO basic principles such as most favored nation treatment and national treatment. This will unfairly increase the cost of local compliance for foreign investors and also go against the important consensus of Chinese and European leaders on resolving friction differences.

In the revised draft of the EU Cybersecurity Law and the ban on inverter financing, the EU has taken more "pan security" measures. For example, excluding Chinese companies based on subjective and arbitrary "non-technical risk" standards, and even designating China as a "high-risk country" without any actual evidence. This is not a 'security consideration', but a typical practice of politicizing economic and trade issues and securitizing technological cooperation. The EU claims to be the "most open market in the world", but at the same time, it is gradually setting limits and increasing pressure in key areas; While setting ambitious emission reduction targets in the European Climate Law, China's high-quality green production capacity is being shut out. These contradictory behaviors not only harm the interests of Chinese companies, but also raise the cost of Europe's green transformation, damaging the EU's international reputation and business environment.

The EU has miscalculated its economic and trade strategy towards China. Especially in the current era of high international energy prices, it is clearly not a wise choice to build higher barriers against Chinese made products that can help Europe alleviate energy and supply chain crises. Interdependence is not a risk, and the integration of interests is not a threat. The real risk of China Europe economic and trade cooperation is to use the name of "risk reduction" to achieve the reality of "cooperation reduction". China's position on China EU economic and trade relations is consistent and clear: we always advocate for managing differences through dialogue and consultation, but dialogue requires sincerity, cooperation requires equality, and actions need to be taken in the same direction. China will never sit idly by as the EU unreasonably suppresses Chinese companies with unilateral tools. The Chinese Ministry of Commerce has made clear its stance on the EU's abuse of FSR and its unilateral actions, and the Ministry of Justice's ban has drawn a red line. If the EU insists on crossing the line, China will resolutely respond in accordance with the law.

A healthy and stable China Europe relationship will not only benefit each other, but also illuminate the world. The key is that Europe must first establish a correct understanding of China. China and Europe are important economic and trade partners, with a total economic output exceeding one-third of the global total. The bilateral trade volume between China and Europe has soared from 2.4 billion US dollars in the early days of diplomatic relations to 828.1 billion US dollars by 2025. The deep integration of the two sides' industrial chains has made China's new energy equipment and electromechanical products a timely rain for Europe's green transformation and manufacturing upgrading; The high-end manufacturing and precision instruments in Europe are the "boosters" for China to move towards the high-end of the industrial chain. As two major forces driving multipolarity, two major markets supporting globalization, and two civilizations advocating diversity, China and Europe should move towards each other and work together to inject more certainty and positive energy into the world.

I hope the European side can be more rational and pragmatic, and less political manipulation; More open cooperation and less protectionism. Replacing 'building walls and barriers' with open cooperation and resolving friction and differences through dialogue and negotiation are the only correct choices for both China and Europe. I hope that the EU and China can move towards each other and resolve issues through friendly consultations. This is a responsible attitude towards Chinese and European enterprises and the global economy, and the only wise way out.