“Levelling the Playing Field”

Abstract

In only 20 years, China has risen to become the EU’s main trading partner. However, trade relations between Europe and China have come under stress, and political tensions have increased as well. China is not only perceived as a partner, but it has also become a “systemic rival”. Indeed, while Chinese firms have gained access to the European Single Market and its benefits, the same is not entirely true for European firms. In addition, European competition law does not take into account third-country state interference with the economy via state owned enterprises and subsidies although such state interference may distort competition in European markets. The European Commission has presented a proposal to deal with foreign state subsidies. Many open questions remain at this stage. However, whatever the final instrument will be, ensuring competition between companies on non-discriminatory terms, and thereby providing incentives for companies to engage in competition, is in the mutual interest of the EU and its external partners.