Changes And Responses To EU Foreign Subsidies Regulation

Along with the rapid development of overseas investment by Chinese enterprises,the EU has begun to pay particular attention to the issuing subsidies therefrom.In the three countervailing investigations,typically represented by the Sino-Egyptian Glass Fabrics case,the European Commission identified the financial provision supported by Chinese state-owned enterprises and policy banks to Chinese enterprises abroad as a “subsidy” from the host government(Egypt and other countries)to them.This has effectively transformed the regulation of overseas investment subsidies from a theoretical discussion to a practical litigation,attempting to expand the existing system of anti-subsidy rule to restrain the scope for cross-border subsidies.At the same time,the European Commission has been actively exploring new legislation to try to restrict the financial support provided by non-EU member states to enterprises operating in the EU.In June 2020,the European Commission published a White Paper to address the distortions caused by the foreign subsidies for the EU internal market and to take the financial support directly used for investment promotion and public procurement to be included in the scope of foreign subsidies adjustment.On January 12,2023,FSR came into effect,drawing heavily on the rules under the framework of trade remedies system and EU competition law,while breaking away from the SCM Agreement and the state aid regime under the law to form its own identity at the same time.In the future practice of foreign trade and investment,these growth barriers will be emerged from Chinese international trade and investment adversely,bringing about more risks and compliance costs for enterprises.Based on this,this thesis uses the method of comparative analysis and normative research to explore the legislative motivation behind FSR from its text,compare it with the existing typical trade remedy system and state aid system,point out the impact that the new breakthrough will bring to China,and propose responses on this basis.“Introduction” consists the background and significance.At the first part,this thesis explains the legislative motivation of FSR.At the second part,this thesis compares and analyses the concepts and review tools of FSR.At the third part,this thesis compares and analyses FSR with the State aid regime and the SCM Agreement.At the fourth part,this thesis analyses the possible impact of the Regulation on China.Finally,China’s response is presented in the context of integrating the domestic and foreign rule of law.