The China Chamber of Commerce to the EU (CCCEU) convened a forum on March 18, 2025, focusing on the implications of the European Union's Foreign Subsidies Regulation (FSR) for Chinese enterprises.

This meeting, attended by industry leaders from finance, healthcare, renewable energy, and related sectors, aimed to assess the challenges posed by the FSR and consider countermeasures to ensure competitiveness within the EU’s regulatory framework.

Since the FSR was implemented in July 2023, Chinese companies have encountered increased scrutiny regarding state-linked subsidies, leading to significant compliance costs.

In early January 2025, Chinese authorities asserted that the EU's investigation practices under the FSR represent substantial trade and investment barriers for Chinese businesses.

Participants of the forum expressed concerns regarding the expansive and vague definitions within the FSR, criticizing the regulation for providing the European Commission (EC) with what they described as excessive discretionary power.

This has resulted in contentious enforcement measures and has impeded the ability of companies to engage in regular business operations and expansion plans in the EU, particularly affecting potential greenfield investments.

The CCCEU has pledged to monitor the implementation of the FSR actively and support its member businesses while advocating for the development of China-EU economic and trade relations.

Under the FSR's purview, the EC is authorized to examine foreign government subsidies impacting firms in all economic activities across the EU. By late November 2024, the EC had initiated several investigations, focusing specifically on Chinese companies and their affiliates, a move that has drawn scrutiny from China's Ministry of Commerce.

The ministry’s recent statements have pointed out issues linked to selective enforcement and a lack of transparency in the EC's investigations, cautioning that such practices could disturb the economic progress of the EU, diminish foreign companies' confidence in the European marketplace, and jeopardize the stability of China-EU economic relations.

The CCCEU's forum occurs amid evolving sentiments regarding China-EU relations, particularly as this year commemorates the 50th anniversary of diplomatic ties between China and the EU. Notably, Chinese Foreign Minister Wang Yi emphasized during a recent press conference that cooperation between China and Europe holds significant strategic value and benefits both parties in an interconnected world.

Additionally, in early March 2025, the European Parliament lifted prior restrictions on lawmakers' interactions with Chinese officials, suggesting a potential thawing in relations following a period of tension over human rights allegations.

The increasing pressures from U.S. trade policies are compelling Europe to reassess its stance towards China, with experts noting that stringent regulations against Chinese firms could backfire, leading to economic underperformance and heightened skepticism among businesses.

EC President Ursula von der Leyen has also underscored the importance of China as a critical trading partner, advocating for a more balanced and constructive engagement.

Over the past five decades, bilateral trade between China and the EU has expanded significantly, from $2.4 billion to $780 billion, alongside substantial increases in investment, highlighting the depth of the economic relationship.

In light of growing global uncertainties, industry representatives have called for collaborative efforts aimed at opposing unilateral protectionism and fostering an open global economy through constructive dialogue and cooperation.