Foreign Subsidies Regulation Bashing
Pressuring China will only hurt you, What ideology means for European Studies and what it could mean for Europe
FSR BASHING
On 20 May, the Chinese edition of the Global Times published an article by Wang Li, a researcher at the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce, a high-level government think tank established by the Central Committee in 2015. CAITEC provides policy advisory services in the field of economic diplomacy, among other services, for the CCP Central Committee and central decision-making departments. Wang’s article is titled “EU Protectionism is Impacting the Future of Its Own Development”. The article was republished on MOFCOM’s website.
Wang comments on the Chinese Ministry of Justice’s recent decision to label EU investigations into Nuctech as improper extraterritorial jurisdiction. He argues that the Foreign Subsidies Regulation bypasses WTO frameworks, employs arbitrary definitions of foreign subsidies, and utilizes biased enforcement against strategic Chinese industries like green energy. He predicts that this supply chain disrupting protectionism will eventually damage Europe’s own long-term economic interests.
Abusive long-arm jurisdiction: Wang sets out to criticize the EU by raising the January 2025 Ministry of Commerce determination that EU practices amount to “abusive exercise of long-arm jurisdiction targeting Chinese enterprises”, and that instead of “correcting its course, the EU has gone further down the wrong path”. These “reckless, cross-border demands for extensive and unnecessary domestic information from Chinese entities” are in violation of international law and basic norms of international trade.
Substantive interference in China’s internal affairs: Therefore, the EU is using its laws to interfere directly with China’s domestic economic governance and financial support mechanisms.
Although the FSR grants the EU the power to investigate, evaluate, and penalize investment behaviors and subsidy situations of enterprises from non-EU countries, including China, outside its territory, the EU uniformly views the Chinese government’s normal support for enterprises, such as tax incentives and financing facilitation, as market-distorting foreign subsidies, and uses this as a basis to launch investigations into Chinese enterprises. The EU imposing the efficacy of its regional rules upon China is a substantive interference in China’s internal affairs. Its practice seriously violates the principles of market economy and fair competition, and also damages the healthy and stable development of China-EU economic and trade relations.
Unilateralism and protectionism: The author posits that the EU has intentionally bypassed WTO standards, including the Agreement on Subsidies and Countervailing Measures, to construct an unilateral system that targets investments rather than just goods. This structural shift is depicted as a direct challenge to international trade systems. Wang asserts that the EU’s behavior means that “the EU bypassing the WTO to establish its own set of rules that go beyond WTO standards is in itself an act of unilateralism and protectionism”.
Not about maintaining fair competition: Since, in Wang Li’s view, FSR investigations are primarily targeting Chinese companies, he believes that the regulation is not applied universally or in a way to maintain “genuine fair competition”, but rather serves to “suppress China’s strategic emerging industries that possess competitive advantages, serving the industrial protection and political agenda within the EU”. The double standard and selective enforcement “expose its political motivations.”
From standard economic interaction to punishable offenses: Wang argues that the definition of a subsidy is to broad, thereby transforming standard economic interactions, such as commercial loans from state-owned banks or governmental guidance funds, into punishable offenses.
This indiscriminate, “one-size-fits-all” practice greatly increases the legal risks and compliance costs of foreign enterprises investing and operating in Europe, forcing enterprises to make unnecessary information disclosures and undermining normal commercial trust. The FSR confers immense discretionary power upon the European Commission, which also causes problems such as opaque investigations and a lack of procedural guarantees. The European Commission can choose not to disclose specific evidence of accusations during the investigation process; enterprises’ rights to defense are restricted, and they must even bear de facto sanctions before fault is proven. This presumption-of-guilt style of investigation procedure violates the open and just principles of the rule of law, infringing upon the basic rights of the involved enterprises.
Harming supply chains and EU’s image: The FSR therefore does not only harm Chinese companies, but also the “market-based, mutually beneficial, and win-win supply chain cooperation established between China and Europe”.
The high degree of uncertainty it brings will similarly harm European local enterprises and consumers who rely on stable and open supply chains, and will also cause international investors and enterprises to see the instability of the European market as well as the EU’s double standards in treating foreign enterprises. … the EU should abide by WTO rules and stop abusing the FSR to conduct discriminatory investigations against Chinese enterprises, otherwise it will ultimately backfire on Europe’s own open image and economic interests.
DON’T PUSH CHINA INTO A CORNER, IT WILL ONLY HURT YOU
In response to comments made by Qu Xun, a Minister-Counsellor and Commercial Representative at the Chinese Embassy in Spain, during a panel discussion on 13 May 2026 at the Madrid campus of IESE Business School, in which he expressed the Chinese government’s disappointment regarding the EU’s plans to implement trade-related measures, a popular online commentator posted the following jingoistic commentary, titled “Europe takes tough action against China, China makes an unusually harsh warning: If you force us to close our doors, you will bear the consequences”.
Pushing China into a corner: The author “New Journey of the Times” sets the stage by framing the current situation between the EU and China not as a routine trade dispute, “but rather Europe proactively stirring up trouble and pushing China into a corner step by step”. The author justifies China’s frustration by explaining that Beijing previously viewed Europe as an open-minded and rule-abiding partner, “but Europe’s actions over these past three months have completely chilled the heart of the Chinese side.”
Advancing discrimination while demanding openness: The author details how Europe is utilizing legal frameworks to target China’s competitive advantages and argues that the EU is advancing discriminatory laws while simultaneously hypocritically “complaining about the difficulty of accessing the Chinese market”. The author sighs
You, Europe, weld your own door shut on one hand while demanding China fully open up on the other—how can such logic exist in the world?
The real reason for Europe’s hysteria is fundamentally rooted in fear
China’s industries have risen too quickly—solar power, electric vehicles, new energy equipment—every single one is crushing Europe’s domestic industries. Since they can’t compete fairly, they have no choice but to resort to state power, imposing restrictions and sanctions. This is a classic case of being a sore loser.
But China can’t be bullied anymore
But Europe has forgotten that China is no longer the China of a hundred years ago—the days of being pushed around are gone for good. Faced with Europe’s relentless pressure, China has never just issued verbal warnings; it means what it says, and its toolbox of countermeasures has long been ready.
Chinese reaction will not be soft-handed: The author notes that China has already warned the EU, and states that “if these legislations are implemented and if they harm the interests of Chinese enterprises, the Chinese side will inevitably counterattack and will never be soft-handed!” The author argues that a forced decoupling will ultimately cause catastrophic financial harm to major European economies like Germany (CP: the author casually leaves out the potential damage to China).
It’s the Americans, stupid: The author notes that despite the opposition of some in the EU (he mentions Germany and the Netherlands), who know that “going down this road will only drag down their own economies and weaken their competitiveness”, the EU “driven by populism and anxiety, insists on forging ahead down this dark path”.
At the end of the day, they have simply been tied to the US war chariot, willingly acting as the vanguard to contain China! But today, China’s blunt statement draws a clear red line for Europe: cooperation is welcome, and win-win outcomes are encouraged—but if you want discrimination, encirclement, or to push China into a corner, absolutely not. China never provokes trouble, but it is never afraid of it. If Europe insists on closing the door to dialogue, then we will have no choice but to close the door to cooperation. Neither side will come out unscathed.
WHAT IDEOLOGY MEANS FOR EUROPEAN STUDIES IN CHINA AND ULTIMATELY EUROPE
On 17 May 2016, Xi Jinping gave a speech at the Symposium on Philosophy and Social Sciences, in which he stressed the “irreplaceable role of philosophy and social sciences for building socialism with Chinese characteristics” and urged “Chinese characteristics to be incorporated in their development.” China should therefore develop a “system of philosophy and social sciences with Chinese characteristics that incorporates the country’s socialist practices.”
For the anniversary of this seminal speech, the CCP held another meeting chaired by the head of the CCP Propaganda Department and member of the Politburo Li Shulei “for the social sciences sector to study and implement Xi Jinping Thought”. According to Qiushi, the Central Committees main theory journal, participants called for “accelerating the building of a Chinese intellectual system in philosophy and social sciences.”
On that occasion, the director of the Institute of European Studies at the Chinese Academy of Social Sciences and the president of the Chinese Association for European Studies Feng Zhongping penned an article about what this means for European studies for Chinese Social Sciences Today on 20 May 2026 (titled: “Promoting the High-Quality Development of New-Type Think Tanks”).
Thee Major positionings: This means first the build up of a “research center for an independent European knowledge system”, which should ultimately lead to the formation of “an independent knowledge system for European studies that possesses Chinese characteristics, Chinese style, and Chinese ethos.” Secondly, the creation of a think-tank that serves national strategy, “aligning with national high-end decision-making needs”. Thirdly, the establishment of a “flagship platform for communication with Europe and international exchanges”, which should be accompanied by a “leading role in China-EU academic dialogues, … while continuously enhancing the international influence and discourse power of China’s European studies.”
Three shared consensus: Building on the first layer, are the three consensus. These are: the implementation of decisions of the Central Committee so as to align with strategic needs “while adhering to the correct political direction and research orientation”; Unification of thought and understanding, which means to leverage advantages of organized scientific research to achieve high quality research results; a focus on research efficacy, in order to use “the effectiveness of results and decision-making influence” as a benchmark - to achieve quality research.
Three combinations: The synthesis of the positionings and the consensus is then achieved by the three combinations - first, which means a stronger integration of policy research and academic research, aka “co-development between policy application and disciplinary advancement.” Second, the “deep integration of policy consultation, talent cultivation, and international communication”.
Talent cultivation must be placed in a prominent position, building a growth platform for young researchers to foster a research team that is both politically sound and professionally superb. … Great importance must be attached to international communication work, aligning with the national international communication strategy, smoothing communication channels between China and Europe, converting academic research results into international communication discourse, and enhancing China’s international communication influence in European studies.
Finally, there is what one might call strategic foresight, as well as the ability to analyse unfolding events more quickly.
To serve the decision-making of the Party Central Committee, research findings must be capable of responding instantly and accurately assessing evolving situations. At the same time, forward-looking and strategic stock-piled research are of paramount importance. We must base our efforts on the long term and take precautions in advance, conducting pre-emptive research around major issues such as the long-term development of China-Europe relations and the profound adjustment of the international landscape. By stockpiling academic results and policy options, we can ensure that the think tank consistently provides timely, precise, and long-term intellectual support for national strategy.
CP: This final paragraph should be read carefully. By using language that invokes preparation for potential conflicts (such as “responding instantly,” “strategic stockpiled/reserve research,” and “pre-emptive research”), Feng suggests laying the groundwork for eventual policy responses (“stockpiling policy options”) perhaps to react faster to European actions that conflict with China’s interests. This should be seen in the context of China’s quick reaction to the EU’s Nuctech investigation and the earlier rollouts of economic security related decrees, including the Provisions on Industrial and Supply Chain Security and the Regulations on Countering Improper Extraterritorial Jurisdiction by Foreign States. As EU legislation that addresses areas of concern to the EU, which may conflict with Chinese interests, such as the Cyber Security Act and the Industrial Accelerator Act, is not expected to come into force until 2027, there is certainly enough time for researchers in Beijing to thoroughly prepare “policy options” with Chinese characteristics to deal with any eventuality.
Cross Purposes translates and contextualizes Chinese experts’ views on EU-China relations. Opinions other than those referred to are my own and do not reflect those of any other individual or institution. Content is edited with the help of AI. Mistakes are my own.