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Sarah Collins

The EU is to be given extensive new powers to regulate companies that receive financial backing from governments outside the Union and that make large acquisitions or offers for public contracts.

The move aims at Chinese dominance in the energy, raw materials and pharmaceutical sectors as well as the growing influence on technology.

Large companies must notify the EU when they have received government subsidies and can be excluded from public tenders or excluded from entering into a merger

“So far, companies have been free to use foreign subsidies to buy up companies here in Europe,” said Margrethe Vestager, European Commission’s Competition Director.

“This is not fair for companies that receive these subsidies not received. It is not fair to European workers and consumers when subsidies drive the best companies out of the market. And it has to stop. “

The reporting requirement applies to mergers in which one party has a worldwide turnover of at least EUR 500 million and to public contracts worth EUR 250 million or more.

However, the EU can conduct competitive investigations initiate smaller transactions if it believes they have been supported by significant subsidies.

A Commission investigation found that the EU is “heavily dependent” on 137 products, mainly raw materials and pharmaceuticals, on which the Half of it comes from China.

In Ireland, Chinese companies, including media giants Huawei and TikTok, have seen strong investment growth.

TikTok will set up its first European data center in Ireland. An investment of EUR 420 million is expected to create up to 200 new jobs.

The Commission is also trying to loosen the US influence on cloud services and computer chips.

In a separate report published on Wednesday Commission staff highlight “possible internal dependencies on a limited number of companies” in the single market.

Although Ireland is not mentioned by name, it is home to all major US technology companies, and EU countries have repeated Ireland’s data protection record criticized.

The new foreign subsidy scheme, which must be approved by MPs and EU governments, comes after the EU proposed to suspend efforts to ratify the investment agreement with China from last December.

The EU trade chief Valdis Dombrovskis tried, however, to include his comments in an interview with the French AFP Newswire r week, insisting that the bloc’s approach to approving the deal “has not changed”.

MPs refused to ratify it because China has its Muslim Uighur community and democracy activists in Hong Kong and recently launched a round of Chinese countermeasures against EU institutions and politicians.

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“The technical work to prepare for ratification is ongoing,” he told reporters on Wednesday. “However, I would like to reiterate that the ratification process cannot be separated from the evolving dynamic of the wider EU-China relationship.” German MEP Reinhard Bütikofer, one of those affected by the Chinese sanctions, said , The Commission should focus on the subsidy regime “instead of continuing to dream about the Chinese investment deal”.

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