Nearly half of the Chinese government’s acquisition of European companies by Chinese companies involves the Chinese government. The EU plans new regulations to restrict foreign subsidised acquisition 
 
Last year there was a research referred to the 650 acquisitions of European companies by Chinese companies since 2010, of which about 40% “involved high or medium state-owned or state-controlled enterprises”. EU announced on local time today (5May), which intended to restrict foreign subsidized companies from acquiring EU companies or participating in public tenders. Those introduction page of the regulations does not mention about China, however many foreign media stated this action is targeting the behaviours of China. One of the members in European Parliament indicated, “EU failed to ensure the principle of neutrality of competition while facing China, so that European industrial policy must now defend its own interests”.  
 
For a long time, the EU has not allowed member states to provide financial support to enterprises under the circumstances of harming fair competition. However, this ban is not limited to foreign subsidized companies. This new regulation aims to plug this loophole. The new regulation stipulates of receiving foreign subsidies acquires a European company with a value of 500 million euros (about 4.66 billion HKD) or more, at least 50 million euros (about 470 million HKD) are from foreign subsidies; or 250 million euros (approximately HKD$2.33 billion) above procurement contracts, the European Commission will investigate.  
 
Source: Stand News #May06

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