Be it for the show of belligerence in the south china sea or the inhumanity committed in Xinjiang, Europe’s relationship with China has been trudging a downwards slope for the past few years. The Russian war on Ukraine gave credible reason for the EU to further strain its relationship with Beijing following the latter’s stoic support for the invasion mastered by Kremlin.
EU delivers a shock to china
Joining the list of diplomatic decline is the latest decision from the EU to curb acquisitions or bids from subsidized foreign companies, a move targeted to put an end to the unfair advantage enjoyed by the foreign players at the cost of the internal players within the EU. The milestone behind the law is to provide a level playing field for the EU member states and tackle the leeway enjoyed by the foreign companies.
But it will be too naïve to posit the new law as something that simply falls within the purview of the development of Europe. Behind the façade of the new law stands the EU move to stall the Chinese monopoly over the European market by large. This move went diluted within the tall talk of Europe’s development. China at present is sailing through turbulent waters and is frazzled out with the impact inflicted by the fourth covid wave. The megalopolis and the business bastion of shanghai seem to crumble thus pulling down the Chinese economy to its nadir. Never minding a battered China, the EU wasted no time to add more salt to Beijing’s woes with a change in policy matter that China seriously values.
As reported by Reuters, the EU executive Commission, which oversees competition policy in the 27-nation European Union, will be able to insist on commitments, such as divestment of assets, and even block a takeover or award of a public procurement contract.
The EU executive Commission has proposed that an acquirer would be bound to notify it if the EU target company has a turnover of at least 500 million euros ($536.2 million) and foreign subsidies amount to 50 million Euros or more.
Greater global challenges for China
The redressive measures to revamp the European market are bound to create headaches within the Chinese power circles. In an earlier proposed move, the EU introduced regulation tools to investigate the bids in public procurement by a non-EU government.
Early 2020 saw the tipping in the trade deal between the US and EU that offered an olio of options for China which they put into use prudently. China busied itself with exploring the EU market surpassing the US in trade but the fine joys were not there to stay. The Ukraine war and Beijing’s stand on the issue provoked both the EU and the Macron who banked on the issue to widen his global clout.
It’s too early to come to conclusions but the resounding victory of Macron back in France will make it difficult for China to slither past the web they are stuck in. Beijing’s political backing for Moscow and the ongoing tensions in the South China Sea will loosen China’s grip over the European market. The European Parliament still needs to agree with the EU governments over the new laws but as things move the changing economic levers in Europe are all at odds with the interest that China stands for.