EU's Foreign Subsidies Regulation Faces Chinese Resistance

• •The EU's Foreign Subsidies Regulation enables investigations into foreign subsidies affecting the internal market.
• •Nuctech's resistance to EU inspections has sparked a legal conflict over data security and compliance.
• •China's response includes new regulations to counter foreign extraterritorial jurisdiction claims.

The EU's Foreign Subsidies Regulation (FSR), effective since July 2023, allows the European Commission to investigate foreign subsidies that distort the internal market. This regulation has led to tensions with China, particularly regarding the case of Nuctech, which resisted EU inspections citing Chinese data security laws. The EU's investigation into Nuctech began in December 2025, focusing on potential foreign subsidies that could distort competition. In response, China's Ministry of Commerce declared the EU's practices as trade barriers, and in April 2026, China enacted a regulation to counter perceived unjustified foreign extraterritorial jurisdiction. This situation highlights the conflict between EU regulatory authority and Chinese national laws, raising concerns over compliance and international trade relations.