European Union officials recently conducted raids on the offices of Nuctech, a Chinese security equipment maker, in Europe as part of an investigation into potential state subsidies. The European Commission expressed concerns that the company may have benefited unduly from foreign subsidies, leading to these unannounced inspections. Nuctech, known for producing baggage security scanners for airports among other equipment, confirmed that its offices in Poland and the Netherlands were being inspected.
In response to the raids, Nuctech emphasized its commitment to defending its reputation as an independent and self-supporting economic operator while cooperating with the European Commission during the investigation. However, the China Chamber of Commerce to the EU, representing Chinese state-owned and private firms, expressed strong dissatisfaction over the raids, criticizing them for being conducted without prior notice or solid evidence. Voicing concerns about the potential weaponization of foreign subsidies regulations to suppress Chinese companies in Europe, the chamber highlighted the tensions between China and the EU in recent trade relations.
The European Commission spokesperson clarified that the raids were based on substantiated indications of potential distortive foreign subsidies benefiting the activities of the company in the EU. As part of the EU's new powers against excessive foreign subsidies, the inspections follow an ongoing probe into China's state support for its wind turbine firms and Chinese companies competing for contracts in Europe. The Foreign Subsidies Regulation, effective from July 2023, aims to address market distortions caused by foreign subsidies and ensure fair competition for EU companies. EU leaders, including Ursula von der Leyen, have expressed concerns about structural overproduction and subsidies affecting global trade, with growing evidence of tensions between China and its major trading partners.