Written by by Finbarr Bermingham at scmp.com
A Chinese train maker has withdrawn from a public tender in Bulgaria after the European Union launched an investigation into a bid it said was undercutting local firms.
The inquiry, announced last month, was the first of its kind and marked the maiden use of a foreign subsidies regulation designed to stop state handouts from distorting the EU’s single market.
CRRC Qingdao Sifang Locomotive Co, a division of state-owned rolling stock manufacturer CRRC Corporation, had hoped to provide 20 electric push-pull trains and their maintenance.
Its bid was reported to be around half that of a Spanish competitor, with the European Commission announcing that the Chinese company had withdrawn its bid on Tuesday evening. Brussels had alleged that CRRC had received almost US$2 billion in state subsidies.
“In just a few weeks, our first investigation under the foreign subsidies regulation has already yielded results,” said Thierry Breton, the commissioner for internal market of the European Union.
“Our single market is open for firms that are truly competitive and play fair. We will continue to take all necessary measures to preserve Europe’s economic security and competitiveness – with assertiveness and speed,” the French commissioner added.
The commission believed that CRRC had not declared the state subsidies it had received in its bid, which enabled it to hugely undercut Talgo, a privately owned Spanish rail company, which was the only other bidder.
Brussels has been adding to its commercial weaponry in recent years with a view to countering what it considers unfair competition from China. The wielding of the foreign subsidies regulation against CRRC was the latest in a series of trade defence measures taken with this in mind.