Video. Tighter EU investment rules targeting China are ‘fair’, says expert

Alicia García-Herrero, an economist at the Bruegel think tank, says new EU legislation to limit the subsidies foreign companies investing in Europe can receive is “fair”, despite facing criticism.

The European Parliament is proposing to close the EU market to Chinese investment in sectors where Beijing is dominant, going further than the European Commission’s proposal. García-Herrero warns that if the Chinese government wants to compete through subsidies, European companies “won’t have a chance” against Chinese firms.

A few months ago, the European Commission unveiled a proposal allowing EU public authorities to favour European companies in public procurement for key public services such as energy, water, railways, ports, airports and postal services.

The move clearly targets Chinese companies in a market valued at €2 billion annually. It comes as European policymakers seek to shield the bloc’s market from China amid heated trade negotiations, with the EU facing a trade deficit with Beijing of roughly €1 billion a day.