China's Ministry of Justice issued a statement on Wednesday, asserting that the European Union (EU), by using the foreign subsidy regulation in its investigation of JD.com, requested extensive and deemed 'unnecessary' information from Chinese entities, crossing borders and located within Chinese territory.
A spokesperson for the government agency, cited by official media outlets, declared that such actions constitute inappropriate demands against the affected companies and represent 'a serious violation of international law.' The Ministry of Justice signaled, together with the Ministry of Commerce and other departments, that these practices are legally classified as acts of 'improper extraterritorial jurisdiction,' as stipulated by Chinese regulations against the unjustified application of foreign laws and measures.
In response, Beijing demanded that any organization or individual refrain from executing or assisting in these measures, and requested the European side to 'immediately correct its erroneous practices' and cease the abuse of the 'foreign subsidy' investigation tool. The ministry warned that 'if the European side insists on proceeding, China will respond firmly in accordance with the law.'
This dispute originated at the end of May when the European Commission launched an investigation to verify whether public support provided by China to Jingdong, the controller of JD.com, conferred competitive advantages upon the Chinese group in the acquisition of Ceconomy, a German retailer of electronics and home appliances.
The initial analysis conducted in Brussels mentioned potential forms of support, such as tax incentives, preferential financing, and subsidies attributable to China, suggesting that these subsidies might have facilitated JD.com in offering more advantageous terms during the purchase.
This dispute adds to months of tensions between Beijing and Brussels, driven by the European trade deficit, allegations of excessive Chinese industrial capacity, mutual investigations, and restrictions in sectors considered strategic. The EU leadership deemed the economic relationship unsustainable due to the annual trade deficit, estimated at approximately 360 billion euros, and the impact of Chinese exports in areas such as electric vehicles, batteries, solar panels, and chemicals.
Beijing refutes the accusations of excessive industrial capacity, denying that this is the result of state subsidies or insufficient domestic demand, and accuses Brussels of politicizing trade differences and implementing measures it considers protectionist. The situation escalated further after the European Commission imposed a fine of 550 million euros on the Chinese platform AliExpress this month for alleged failures in combating the sale of illegal goods, a decision criticized by Beijing.
Ursula von der Leyen, President of the European Commission, warned that Brussels is prepared to introduce new trade measures starting in the autumn if there is no progress in negotiations with China. Nevertheless, in April, He Yadong, spokesperson for the Chinese Ministry of Commerce, stated that an agreement was reached in the first meeting of the China-EU trade and investment consultation mechanism, aiming to define bilateral relations as a 'stable and balanced' trade partnership.