China’s state capitalism poses considerable challenges for the global economic system. Initially, the public debate centred on its massive domestic subsidies. In the meantime, however, China’s transnational cooperation and subsidy programmes, which are closely linked to the Chinese ‘Belt and Road Initiative’ (BRI), have come more into focus. For the first time, the European Commission has now made this cooperation with other third-countries the subject of anti-subsidy proceedings on the basis of a cross-country subsidy analysis and subsequently imposed countervailing duties on imports from the Chinese partner countries Egypt and Indonesia. Lawyers have criticized this approach, arguing that it lacks a legal basis and is contrary to WTO law. However, the General Court and, more recently, Advocate General Ćapeta have confirmed the Commission’s practice. This article argues that the cases decided so far prove to be manifestations of a domestic subsidy, which can be covered by EU anti-subsidy law, at least against the background of the effective protection against unfair trade practices intended by trade defence and the objective of a strategic autonomy of the EU. At the same time, WTO law does not formulate any clear limitations with regard to this kind of attribution of foreign subsidies and therefore does not prohibit the Commission’s current practice. WTO law is also more open with regard to other forms of a cross-country subsidy analysis than is sometimes portrayed.
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