Vestager: China-EU competition talks ‘high on substance'

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Europe

The European Commissioner for Competition Margrethe Vestager held a press conference in Beijing on Wednesday, offering a "warm welcome" to Chinese businesses looking to invest in the European Union, as well as a wider warning that Europe is "open for business, but not for tax evasion."

Vestager arrived in Beijing on Wednesday for a two-day visit, and described how she held "fruitful discussions" with her Chinese counterparts and representatives of EU businesses in China, while looking to impress that new EU trade defense mechanisms would work "faster and more efficiently" when it came to protecting Europe’s interests.

Vestager is in Beijing to open the 10th EU-China Competition Policy Dialogue with Chinese Minister of Commerce Zhong Shan, and also held talks on Wednesday with Zhang Mao, minister of the State Administration of Industry and Commerce.

A Memorandum of Understanding (MoU) to start talks on state aid control was signed in June this year by Vestager and He Lifeng, minister of the National Development and Reform Commission. At the time, Vestager said "the European Commission is pleased to start a discussion with China on how to best handle state intervention in the economy."

The EU this year slapped anti-dumping duties on Chinese steel to counter what it regards as state aid, or preferential lending to mills by state banks./ VCG Photo

Despite moves to initiate dialogue on competition, the EU and China have previously clashed over Chinese imports of steel. Various "anti-dumping" duties have been levied against Chinese imports, moves which the Chinese Ministry of Commerce in July called "unfair and unreasonable."

Vestager, who has been European Commissioner for Competition since 2014, met with representatives of European businesses in China earlier on Wednesday, and described how they gave a "very nuanced picture" of working in the country, as well as an "insightful view on how China is progressing and has progressed."

One aspect raised by the business representatives that Vestager said was central to the European Commission’s way of thinking was "reciprocity."

According to the commissioner, the way that European businesses are seeking "the same rights and responsibilities as Chinese businesses" reflected the "mature nature of the EU-China relationship."

Vestager was previously Denmark’s deputy prime minister and minister of the economy and interior. The 49-year-old’s tenure in the European Commission has seen her push US tech giants like Apple and Alphabet on tax and antitrust rules, delivering a 2.42 billion euro fine to Google and earning a reputation that has seen her aligned with French President Emmanuel Macron.

In Beijing on Wednesday, Vestager suggested that there would be more cases to come against Alphabet's Google in the near future.

VCG Photo

In light of US tech giants having their tax contributions put under close scrutiny, Vestager said that similar Chinese tech unicorns like ofo and Mobike were warmly welcomed in Europe, as long as they played by the rules and were "good corporate citizens."

Vestager approved ChemChina’s 44 billion US dollar takeover of Swiss agricultural giant Syngenta in April this year, saying the Chinese state-owned giant had "offered significant remedies, which fully address our competition concerns." The takeover is China’s largest overseas acquisition.

Chinese direct investment into Europe increased by 90 percent in 2016, according to Baker McKenzie, and Vestager and the European Commission have come under pressure from countries like France, Germany and Italy to exercise greater control over granting approval to mergers and acquisitions from China.

During Wednesday's press conference, Vestager said the European Commission had the tools to protect its interests regarding concerns over Chinese M&As. However, she insisted that scrutiny of deals involving China were not protectionist, but a result of European being so open, forcing the bloc to "protect what is really precious."

Looking ahead to the future of China-EU cooperation on trade and competition, Vestager praised the dialogue channels and working relationship that Europe enjoys with the Chinese government, describing the outcome of the 2015 MoU as "low on protocol, and high on substance."