China rails against EU’s train subsidy probe – will relations be thrown off-track?


by Kandy Wong at

A recently unveiled probe by the European Union into a Chinese state-owned train maker – the first in-depth examination conducted under the EU’s newly implemented Foreign Subsidies Regulation – could inject more uncertainty into relations and signify an intensification of efforts to execute Brussels’ de-risking strategy.

Friday’s move against CRRC Qingdao Sifang Locomotive – a subsidiary owned by CRRC Corporation, the world’s largest rolling stock manufacturer – may bring some “roughness” to the bilateral trade and investment relationship, analysts said, although the multi-decade trade history between China and the bloc is likely to provide some cushion against drastic changes.

But the timing suggests more action may be forthcoming, as the investigation was launched only five months after the EU began a separate inquiry over subsidies received by Chinese electric vehicle producers.
The contract which prompted the EU probe was issued by Bulgaria’s Ministry of Transport and Communications. It covers the purchase of 20 electric “push-pull” trains, as well as maintenance and staff training. The tender had an estimated value of €610 million (US$658.4 million), and CRRC Qingdao Sifang’s bid was €300 million – 46.7 per cent lower than projections from Bulgarian railways and 47.5 per cent lower than the nearest competitor, according to the Financial Times.