"The opening of the single market is our main asset, but it must be accompanied by a certain fairness", explained the European Commissioner for Competition, Margrethe Vestager, on Wednesday, while Brussels offered to grant itself new powers against unfair competition of Chinese companies.  

Brussels on Wednesday offered to grant itself new powers to limit incursions into the EU by state-backed foreign companies, a European response to China's growing power.

With this proposal, the European Commission intends to give itself the means to block an acquisition or access to a public market if a foreign company is too heavily subsidized.

"A certain fairness" in the opening of the single market

"The opening of the single market is our main asset, but it must be accompanied by a certain fairness", explained the Commissioner for Competition, Margrethe Vestager. The Danish stresses that the legislation in force allows the EU to control aid granted by member states, but not that granted by third countries, which creates distortions of competition.

This text comes within the framework of a hardening of Europe vis-à-vis Beijing, its second trading partner after the United States, with whom it is striving to maintain an economic and diplomatic balance.

On the one hand, Germany wishes to maintain links with this privileged destination for its exports;

on the other hand, some member states are concerned about unfair competition from Chinese companies heavily subsidized by the communist regime.

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The tension between the two blocs is also political: the EU has imposed sanctions against China, accused of human rights violations in the Xinjiang region.

It responded by sanctioning various European parliamentarians, academics and the German think-tank MERICS.

According to the legislation presented on Wednesday, a foreign company seeking to acquire a European company with an annual turnover of more than 500 million euros will have to notify the Commission of "any financial contribution received from a public authority in a third country" .

The criticisms of the employers' organization BusinessEurope

The same would apply for a group applying for a large EU public market, such as rail or telecommunications, worth more than € 250 million. Otherwise, the Commission could impose fines. Brussels also plans to open investigations on its own initiative in other cases. In the event of distortion of competition, the European executive could demand corrective measures, such as divestitures, and even prohibit a concentration or the award of a public contract. Zero-interest loans, preferential tax treatment or simply direct subsidies could be part of the aid considered to distort competition.

The text is not formally intended to counter any particular country, but European sources agree that concerns about China are at the heart of its drafting. The proposal, which now has to be considered by the European Parliament and member states, has been called a "step in the right direction" by the European employers' organization BusinessEurope.