At the beginning of the week, European authorities raided the offices of the Chinese company Nuctech in Rotterdam and Warsaw – a raid that could affect relations between the EU and China for a long time.
Computers, mobile phones and documents were seized in a crackdown that was the first of its kind. The aim was to find evidence that a company from China receives subsidies from the Chinese state, which thus puts competition with European companies out of play.
During the last decade, Nuctech has supplied scanners and equipment for security controls to 25 countries in Europe. The equipment is used to search cargo in ports and at border crossings, and to check baggage and people at airports. Arlanda Airport installed its new equipment from the Chinese company as recently as last year.
The US has blacklisted the company and previously pointed to the close links to the ruling Communist Party. And warned of the risk of the company coming across personal information as the security system, which can be linked to databases, has access to the passports and fingerprints of millions of passengers. Information that can then be handed over to Chinese authorities.
Photo: Alexander Mahmoud
But many countries and companies in Europe have continued to buy equipment from Nuctech. A decisive reason has been the company’s prices, which according to European competitors were often between 25 and 50 percent below their own bids.
A new regulation gives the EU greater opportunities to investigate foreign companies suspected of receiving subsidies.
The raid on Nuctech’s office in Europe, say analysts, could be the start of a new phase where the EU places greater emphasis on tangibly dealing with state-subsidized Chinese companies that flood the European market with cheap goods – not least electric cars.
Ursula von der Leyen, in her campaign to be re-elected as president of the European Commission, said: “Competition yes, dumping no – that must be our motto” about the EU’s attitude to Chinese electric cars. The investigation continues, but von der Leyen has hinted that punitive tariffs are likely.
After the raid on Tuesday Nuctech has announced that it is cooperating with the EU and is determined to defend its reputation. And that the information it collects is protected from view, even from the Chinese state.
But experienced officials believe, according to the Financial Times, that the EU has good arguments pointing against Nuctech and that Tuesday’s crackdown was a way to obtain the final evidence.
The signal has also been sent which means that Chinese companies in the EU must prepare for a knock on the door.
