EU raids offices of Chinese security equipment maker

The European Commission said it conducted "unannounced inspections" at the premises of security equipment maker in Europe which it suspects might have benefited unduly from state subsidies. However, it did not mention the name of the firm.

In a statement released on its website, the EU's executive body said, "The commission has indications that the inspected company may have received foreign subsidies that could distort the (EU's) internal market."

On Wednesday, Nuctech told CNN that its offices in Poland and the Netherlands were being inspected. The company makes baggage security scanners for airports and other equipment.

Earlier in 2020, the US included Nuctech in the list of entities subject to stricter license requirements "for its involvement in activities that are contrary to the national security interests of the United States."

In a statement, Nuctech said, "Nuctech is cooperating with the European Commission and is committed to defending its reputation of a fully independent and self-supporting economic operator."

The China Chamber of Commerce to the EU, whose members include Chinese state-owned and private firms, expressed its "strong dissatisfaction" about the raids. It further said that raids had been conducted "without prior notice and without solid evidence."

China Chamber of Commerce to the EU said, "The European side manifested its intention to weaponize the Foreign Subsidies Regulation as a tool to suppress lawfully operating Chinese companies in Europe."

Speaking to CNN, a European Commission spokesperson said that officials conduct unannounced inspections based on "substantiated indications" that the company in question might have received "distortive foreign subsidies benefitting its activities in the EU."

The spokesperson further said, "An inspection is an investigative step which never pre-judges the outcome of the commission's investigation."

The raids carried out by the EU under its new powers against excessive foreign subsidies follow a probe launched by the bloc into China's state support for its wind turbine firms and Chinese companies bidding for a solar farm contract in Romania.

The Foreign Subsidies Regulation came into effect in July 2023. The regulation is aimed to address market distortions caused by subsidies from foreign governments and ensuring that EU companies are competing on a level playing field.

The raids were conducted on the same day when the European Commission President Ursula von der Leyen said that G7 developed economies was starting work to tackle imports that have been caused by "structural overproduction" elsewhere, "an overproduction that is achieved to a large extent by subsidies, massive subsidies," CNN reported.

In a speech, Leyen said, "We have to be very vigilant that our producers are not at risk to be forced out of the market." Although she did not mention China, however, there is growing evidence of tensions between China and its major trading partners, including the EU and the United States, relating to an oversupply of cheap Chinese goods in foreign markets.

In recent years, China's global trade surplus in goods has increased and is now approaching USD 1 trillion, CNN reported. During her visit to China in March, US Treasury Secretary Janet Yellen warned of the risk to jobs and businesses in the US and elsewhere posed by overproduction of certain goods in China.

US Secretary of State Antony Blinken, who is currently on a visit to China, voiced concerns on Thursday about China's trade policies and "non-market economic practices." He expressed concerns about China's trade policies during his meeting with Shanghai's Party Secretary Chen Jining, according to a US government spokesperson. (ANI)