TAKEAWAY: A level playing field

Beijing has ordered any entities associated Chinese retail giant JD.com to refuse cooperation with an EU probe into whether the company has unfairly benefited from subsidies ahead of its planned acquisition of German electronics retailer Ceconomy. This comes as the bloc is increasing scrutiny of Chinese companies operating within the European market.

China-EU tensions have been intensifying over the past couple of years, with Brussels taking particular aim at the EV and e-commerce markets. Shein, Alibaba and Temu have all faced huge fines in the tens and even hundreds of millions of Euros over various issues relating to their products and environmental impact. Chinese EVs are also being hit with tariffs due to allegations of flooding the market. In the majority of cases, the EU is under the impression that Chinese businesses operating in Europe are unfairly benefiting from subsidies that enable them to undercut local competition. 

Regulatory frameworks governing things such as trade and international law have been developed over long periods of time to ensure there is a level playing for all parties involved, but such a framework only works when all sides agree to the rules laid out. The fact that Beijing is ordering companies not to cooperate with investigations could tend to strengthen the assumption of problems. The EU has to a large extent turned a blind eye for the past two decades, and as a result it faces a choice: whether or not to get tough in terms of China and its exports and investments.