Europe Resists China’s Economic Inroads
Political resistance is hardening to China’s commercial presence in Europe. Two recent events make this evident. The latest of these is a review by the European Union (EU) Commission of the proposed merger between France’s EGF and China General Nuclear Power (CGN), a state-owned enterprise (SOE). By suggesting that the CGN was not independent of the State-Owned Assets Supervision and Administration Commission (SASAC) – the overseer of major Chinese SOEs – and that its assets were a part of the cumulative assets of Chinese energy SOEs, the threshold limit for the acquiring entity in the merger went above 250 million Euros, making the deal subject to greater clearance scrutiny. This is by far the clearest indication of the European regulatory authorities getting wary of the conspicuous trend of Chinese investors buying large-scale corporate assets in the Continent. There appear to be similar apprehensions on part of European lawmakers. On May 12, 2016, the European Parliament voted against granting China “market economy” status in the EU. According to the terms of China’s WTO accession, fifteen years after becoming a member, China would be considered “market economy,” with the effective date being December 2016. But the European lawmakers pre-empted a proposal by the EU Commission, which could have come later this year, for changing China’s status. ME status is important because non-market economy status makes it easier for other WTO members to initiate anti-dumping and remedial trade measures against China. The political pressure within Europe is high on keeping away Chinese imports at a time when the European steel industry is struggling for revival and considers cheap Chinese steel imports a huge threat. With European lawmakers and executives getting apprehensive over Chinese investments and imports, there could be adverse implications for Chinese investments in continental connectivity projects such as One Belt, One Road (OBOR).