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Xinhua: EU policy tools should avoid discriminatory impact on foreign firms: Chinese chamber

Xinhua| Updated: Jul 29, 2021

BRUSSELS -- Any policy tools introduced and adopted by the European Union (EU) institutions shall "ensure legal certainty for the business community, and openness and fairness in the market," the China Chamber of Commerce to the EU (CCCEU) has said.

"They should avoid having a discriminatory impact on foreign companies, or leading to new distortions by offering privileges to EU locally owned companies, for instance in acquisition transactions or procurement processes," said Xu Haifeng, Chairman of CCCEU, in a statement. He added the chamber's members "would appreciate that the European market could remain open, competitive and fair."

The chamber released the statement after submitting on Tuesday its feedback to the European Commission's proposal for a Regulation on foreign subsidies that was unveiled in May this year.

In September 2020, the CCCEU already participated in a public consultation on the EU White Paper on distortive foreign subsidies.

"We are now pleased to see that some of the comments we made back then were taken into consideration by the European Commission and are reflected, either fully or partly, in the proposal for the draft Regulation -- in particular those related to the thresholds triggering the investigation, the balancing test, the right of defense, and redressive measures, among others," said the statement.

The CCCEU, speaking on behalf of some 1,000 Chinese companies operating in the EU, said in the statement that some issues remained unsolved.

In Tuesday's feedback, the chamber expressed caution about the "increasing obstacles and barriers" that the draft Regulation will pose to foreign companies.

It said the draft Regulation failed to provide legal certainty to the companies which might be affected by this new legislation, as many "key concepts and legal standards/thresholds remain ambiguous."

It said the Regulation proposal might place foreign companies in competitive disadvantages compared with EU locally owned companies. "We believe that the draft Regulation should extend the existing EU State Aid rules to guarantee non-discrimination between European and foreign companies."

The chamber said it also believed that the current proposal possibly underestimated the administrative burdens that non-EU companies will need to handle, in particular with respect to the notification obligations.

"EU companies are not subject to similar obligations regarding the State aid they received within the EU, at least not at similar scale. Understanding the burden our members will face, we recommend reconsidering the scope of reporting for notification purpose and limiting the burden to the one borne by EU companies," it said.

The European Commission's latest round of public consultation concluded on Thursday, receiving 47 feedbacks from companies, associations and others in the EU and beyond.

The draft Regulation, aiming to tackle foreign subsidies that have a distortive effect on the EU's single market, would give the European Commission the authority to investigate foreign subsidies in mergers and acquisitions, as well as bids in large public procurement procedures.