Beijing accuses the EU of unlawfully extending its jurisdiction to Chinese companies and threatens countermeasures.
China on Wednesday determined that the European Union’s extraterritorial actions in its investigation into Chinese e-commerce giant JD.com under the Foreign Subsidies Regulation (FSR) constituted unlawful extraterritorial jurisdiction. Organizations and individuals in China are prohibited from complying with or assisting in the implementation of the EU’s measures. The decision takes effect immediately.
China’s Ministry of Justice (MOJ), together with the Ministry of Commerce (MOFCOM) and other relevant departments, made the decision following an investigation conducted pursuant to China’s rules on countering foreign states’ unlawful extraterritorial jurisdiction measures. The ministry said EU regulators had arbitrarily demanded extensive information located in China from Chinese companies, which Beijing considers a serious violation of the international rule of law.
Beijing urged the EU to stop abusing the FSR as an investigative tool and provide companies investing and operating in Europe with a “fair, just and predictable” market environment. If the EU persists with such actions, China will take resolute countermeasures in accordance with law.
The move was prompted by the European Commission’s investigation into JD.com’s $2.5 billion bid for German electronics retailer Ceconomy. The EU is examining whether JD.com received Chinese subsidies that may have affected the terms of the deal. The decision marks the European Commission’s first in-depth probe of a deal involving a Chinese company under the FSR.
Beijing sees the EU’s actions as part of a broader trend. In February, the European Commission launched an in-depth investigation under the FSR into Chinese wind turbine manufacturer Goldwind. Chinese authorities have previously said that the EU is broadening the concept of “foreign subsidies,” launching investigations with insufficient evidence and applying its procedures with insufficient transparency.
Jian Junbo, a Chinese expert from Fudan University, said the latest decision demonstrates Beijing’s resolve to safeguard the country’s sovereignty and the legitimate rights and interests of Chinese companies.
“China will not accept attempts by any country to use its domestic laws as a basis for exercising unlawful extraterritorial jurisdiction over matters within China, particularly when such actions undermine China’s sovereign rights and interests,”
said Jian.
Experts warn that continued use of the FSR could also have consequences for the EU itself. Tighter regulatory requirements could raise compliance costs for multinational companies, undermine investment confidence in the European market and further strain China-EU economic and trade relations.
At the same time, Chinese experts acknowledge that regulatory frictions are inevitable as cross-border investment between China and the EU deepens. However, they argue that such disputes should be addressed through dialogue and coordination rather than unilateral expansion of extraterritorial jurisdiction.
Under the terms of JD.com’s agreement with Ceconomy, the transaction will automatically lapse if all required approvals have not been obtained by Nov. 10.
Source: Global Times
