CRRC’s withdrawal from Bulgaria bid shows rising EU protectionism: CCCEU

This aerial photo taken on Jan. 4, 2023 shows bullets trains at a garage of CRRC Qingdao Sifang Co., Ltd. in Qingdao, east China's Shandong Province. As a major manufacturer of high-speed trains in China, CRRC Qingdao Sifang Co., Ltd. overhauled the trains that will serve the upcoming Spring Festival travel rush to ensure their smooth operation.(Photo: Xinhua)

This aerial photo taken on Jan. 4, 2023 shows bullets trains at a garage of CRRC Qingdao Sifang Co., Ltd. in Qingdao, East China’s Shandong Province. Photo: Xinhua

Chinese train maker CRRC’s withdrawal from a Bulgarian train tender adds to the evidence suggesting the EU side has wielded the Foreign Subsidies Regulation (FSR) as a new tool to deter foreign companies, coercing them into withdrawal and subsequent business exclusion, the China Chamber of Commerce to the European Union (CCCEU) said on Tuesday.

Following CRRC’s withdrawal, the European Union (EU) announced on Tuesday that it would close its subsidies probe into CRRC Qingdao Sifang Locomotive, a subsidiary of CRRC Corp, the world’s biggest producer of rolling stock.

The CCCEU expressed deep concern about non-market-based exclusion of Chinese companies and strongly urged the EU to uphold principles of fairness and transparency, and to ensure an equitable business environment for Chinese enterprises in the EU market.

CRRC has withdrawn from a €610 million ($660 million) public train tender in Bulgaria after the EU launched a probe into foreign subsidies, the European Commission said on Tuesday.

In recent years, the EU has stepped up trade protectionism against China. In February, the EU’s antitrust regulator launched an investigation into CRRC, alleging that it had not declared state subsidies it received that enabled its bid to hugely undercut a rival bid from Talgo, a privately owned Spanish rail company, which was the only other bidder.

The move marks the EU’s first in-depth investigation under the Foreign Subsidies Regulation (FSR) since the FSR was released in July last year. The FSR is one of a series of measures passed by the EU in recent years to bolster the bloc’s economic security, with China seen as a key focus.

CRRC is the world’s largest train manufacturer, and CRRC Qingdao Sifang is its core subsidiary, specializing in high-speed train development and urban rail vehicle manufacturing. It is also a key exporter of national rail equipment.

The subsidiary offered its bid in the Bulgarian tender last December at about half the price of Spain’s Talgo, making it highly competitive. The European Commission attributed CRRC’s lower bid to subsidies from the Chinese government.

Amid the growing protectionist climate, the EU has been adding to its commercial weaponry. The highest-profile case has been the ongoing probe into China’s electric vehicle exports, which is expected to result in duties starting in July, according to the South China Morning Post.

China’s Ministry of Commerce in February urged the EU to adhere to WTO rules, respect the principles of the market economy, and use the foreign subsidies regulation prudently, in response to its probe into CRRC.

Global Times