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May 12, 2022
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The European Union overturns the old rules of behavior in the world market

“Competition, – written on the website of the US Chamber of Commerce, – builds our country, makes it exceptional and moves it forward… When our society allows the free exchange of ideas, innovation and trade, we can use the best of human imagination and ingenuity to achieve a better future. Competition makes this possible because it is a process of challenge, refinement, improvement and progress.”

These pompous words are empty words at the same time. If such principles guided the actions of the United States and the European Union in relation to the PRC or Russia today, then the only thing that might interfere with their peaceful coexistence would be state support for state-owned enterprises. Everything else, like freedom of speech, human rights, and the representation of the people in the institutions of state administration, has long turned into a fiction that is obvious to everyone in the West, covering up tight control over dissent.

And if state support for enterprises from the point of view of Western ideology is evil (protectionism), which should be punished by sanctions, then how to understand the latest maneuvers of the European Union?

Last week, the European Parliament and EU governments reached an agreement “on a proposal aimed at leveling the playing field for European companies facing competition from foreign companies that receive financial support in their countries”. Simply put, European lawmakers have begun crafting regulations aimed at foreign (primarily Chinese) state-backed buyers who want to acquire European companies or take part in public procurement. Europe felt threatened, as the European economy would be easy prey for Beijing-backed Chinese firms as shares of even large European companies slide down.

How to eliminate the “unfair advantage” of the Chinese, destroying the foundations of the “free and competitive market for goods and services”? It’s very simple: the Chinese should be banned from buying companies in Europe. Specifically, it will look like this: if a foreign company has received state support in the amount of at least 50 billion euros in the last three years and intends to merge with a company in Europe, it will not be able to do this without the permission of the European Commission.

The contradiction immediately strikes the eye: European companies can receive state support, but Chinese companies cannot. However, this is only the tip of the iceberg, against which any initiative of Chinese competitors in the European market of goods and services will now have to break. “Competition that builds our country” – this postulate is now subject to a ban in Europe. European Commission “strengthens toolkit against disruptive foreign subsidies”. Now companies subsidized by foreign governments will have to earn the favor of the EU authorities in order to be allowed to acquire European firms or participate in public procurement. The European Parliament supported this bill with an overwhelming majority of 627 to 8.

There is no dispute about the essence of the problem in Europe. The discrepancies concern only the amounts of turnover of companies subjected to an investigation for loyalty to Brussels: should the threshold for the investigation be 600 or 400 million euros. The lower the threshold, the more companies will queue up for permits in Brussels, and the more power the European Commissioners will have to prevent competitors from entering the European market.

By avoiding the “unfair” advantages of state subsidies to competitors while “fair” subsidizing its own companies, Europe overturns all previous rules of behavior in the world market.

“Under the current circumstances, the EU economy is doing quite well. However, this success depends on how freely the EU circumvents its own rules.” – writes Euractive. Of course, this is also seen in China. And if it is convenient for the West to introduce “fair” rules to the accompaniment of aircraft carriers, then why might this be inconvenient for Beijing?

Last week, a Chinese squadron led by the Liaoning aircraft carrier began a combat mission in the Western Pacific. “The squadron consists of eight warships and is the largest to have gone on a long voyage in recent times, which indicates a significant increase in the combat capability of the fleet in preparation for missions that include a potential military conflict in the Taiwan Strait”– notes the American edition Global Security. In addition, according to the US Department of Defense, China has the largest naval force in the world, with 355 warships. According to forecasts, in the next four years this number will increase to 420 ships, and by 2030 – to 460. With their help, it will not be difficult to drown Western democracy with its new order in the South China Sea. Europe doesn’t understand this yet…

Photo: REUTERS/POOL New

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