China hits back in EU subsidy probe dispute

No organization or individual should implement or assist in implementing the European Union's ⁠cross-border anti-subsidy probe into China's Nuctech company, China's Ministry of Justice said on Friday, adding that the announcement took effect on the date of release.

Certain cross-border investigative practices adopted by the EU involving Nuctech, a world-leading supplier of security inspection equipment and solutions, constitute improper extraterritorial jurisdiction, the ministry said in an announcement, adding that China will take firm countermeasures if the EU continues to overstep its bounds.

In the announcement, the ministry said it made the determination after investigating the matter with the Ministry of Commerce and other departments, in accordance with China's regulations on counteracting unjustified extraterritorial application of foreign laws and measures.

The EU's cross-border investigative measures targeting Chinese entities during its probe into Nuctech under the Foreign Subsidies Regulation, or FSR, were found to be improper extraterritorial jurisdiction, the announcement said.

The case dates back to April 2024, when the European Commission carried out its first unannounced inspections, under the FSR, at Nuctech's offices in Poland and the Netherlands. The commission sought access to data stored on servers in China, including employee emails, but Nuctech refused, citing China's data security law and other rules.

Nuctech later challenged the inspections before the General Court of the European Union in August 2024 and appealed to the Court of Justice of the European Union in March 2025, seeking to suspend the investigation. Both courts rejected its requests and upheld decisions allowing the commission's inspections.

In December 2025, the European Commission advanced the case to an in-depth investigation, the first under the FSR, alleging that Nuctech may have received Chinese government subsidies that distorted competition in the EU market.

A Ministry of Justice spokesperson said in a statement that the EU had used its FSR to demand broad and unnecessary information from Chinese entities during the Nuctech probe, calling the move improper and a clear violation of international law and basic norms of international relations.

The spokesperson said the regulation is a unilateral tool that the EU has frequently used against Chinese companies in a targeted and discriminatory way, amounting to protectionism under the pretext of fair competition.

China's Ministry of Commerce determined in January 2025 that the EU's relevant practices constituted trade and investment barriers, the spokesperson said, adding that China will not accept the abuse of long-arm jurisdiction against Chinese citizens and enterprises.

The announcement is a concrete step to implement China's regulations on counteracting unjustified extraterritorial application of foreign laws and measures, the spokesperson said.