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The tone towards China is getting rougher.
On Wednesday, leading economies agreed on a declaration of war on Beijing's economic policy: They will fight “harmful industrial subsidies” and other market-distorting practices together, according to the G7 declaration, which consists of the USA, Germany, Great Britain, France, Canada and Italy and Japan exist.
China was not mentioned in the document, but Western governments have long been concerned with the often non-transparent state support for companies.
European companies are also complaining about unfair competition with highly flirted Chinese companies, both on the world market and in China and Europe.
In the corona pandemic, the topic had become even more explosive, as there were concerns that companies supported by China and other foreign countries could use the crisis to buy up ailing or undervalued companies in Europe.
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The EU is now serious about creating more equal opportunities: New rules are intended to prevent European companies from being taken over by highly subsidized foreign companies and from foreign companies that have been fed up with government money from snatching public contracts away from European competitors.
Margrethe Vestager, Vice President of the EU Commission responsible for competition, and Industry Commissioner Thierry Breton had already made suggestions last June as to what such rules could look like.
Vestager announced to WELT AM SONNTAG that the authority is now on the verge of submitting the draft law: "We will make a specific legislative proposal in the second quarter."
Europe's companies warn of too much bureaucracy
Business welcomed the Commission's proposals, which were summarized in a so-called White Paper, but also warned that the authority could overshoot its target with some transparency requirements.
Companies that apply for public contracts should not only disclose whether they receive subsidies themselves, but also whether their suppliers are subsidized.
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In some cases, trade associations even interpret the rules as if companies had to prove that even suppliers from suppliers do not receive unfair government support.
Parts of the rules "mean a heavy burden for companies", warned the European employers' association Business Europe.
The measures should be more targeted.
EU adapts procedure
Vestager apparently takes these fears seriously.
“The reaction to our white paper has been very positive and we will maintain the basic thrust of company takeovers.
As far as public procurement is concerned, however, we will adjust our approach, ”said the Commissioner.
She admittedly adhere to the principle: "It cannot be that the European subsidiaries of foreign corporations outperform European companies in awarding contracts because they get state help from home."
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However, European companies have asked the Commission to make the relevant instruments less bureaucratic.
“We understand these concerns and we are working on them.
We do our best to ensure that the implementation of the rules for companies is as easy as possible. "
Vestager, however, seeks understanding for the EU approach.
In addition, the recently concluded investment agreement with China could ensure that in future less information would have to be requested than originally planned.
"The problem is that it is very difficult to get the necessary information about the companies, so we have to ask the companies to provide a lot of information about foreign financiers when applying for public contracts," she said.
"On this point, the investment agreement with China could help because it could ensure that we receive more information about foreign subsidies in the future." The agreement had caused a lot of criticism.
Critics warned that the EU was giving the Chinese leadership a foreign policy success.