Brussels, 01/03/2011 (Agence Europe) - The EU wants to take action against Chinese state aid but the European Commission wants to develop a more solid case on the issue. European companies operating in China are also hesitant about providing proof of massive support from the Chinese government because they fear reprisals.
During a visit to Finland on Friday 25 February, Karel De Gucht declared: “We have come to the conclusion in the European Commission that the real problem with China is subsidisation”. The EU trade commissioner also stated that “we are taking more and more action in that respect”. The commissioner explained that his staff are counting on European companies to provide proof of aid and financing programmes set up by the Chinese government, which benefit their Chinese competitors. Many European firms operating in China are rather unforthcoming in this respect because of fear of reprisals. De Gucht explained: “The big problem with subsidisation is that we need proof. We cannot start a case against the country… if we have (insufficient) proof. And that proof has to come from the companies.”
The legality of Chinese state subsidies is coming under increased investigation by the EU, particularly as Chinese production encroaches on sectors in which the EU has traditionally been strong, such as cars and telecoms networks. That focus has heightened tensions between the EU and China. China denies its industrial programmes are illegal and is fighting at the World Trade Organisation for its right to continue them. Although the Commission recently made a public denunciation of “massive” Chinese government state aid to national telecoms companies, De Gucht affirmed that “subsidies are not limited to that sector… Chinese subsidies pose a problem to…all sectors”. The EU has also proposed its first anti-subsidy tariff against China over support for glossy paper manufacturers. If approved by EU states next month, the duties could set a precedent for similar cases, EU diplomats quoted by Reuters point out. The commissioner for trade said that “China is rather upset about it, but we are going to continue with that”. (E.H./transl.fl)