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Europe and China begin talks on state aid

The European Commission has begun discussions with China's National Development and Reform Commission about the control of state aid.06 Jun 2017

The two bodies have signed a memorandum of understanding agreeing to begin dialogue on the subject, the Commission said.

European Commissioner Margrethe Vestager, responsible for competition policy, said: "Decisions by one country to grant a subsidy to a company that operates globally may affect competition elsewhere. The European Commission is pleased to start a discussion with China on how to best handle state intervention in the economy."

The Commission will describe its own experience of enforcing state aid control and learn more about the implementation of China's recently introduced Fair Competition Review which is designed to prevent public policies from distorting and restricting competition.

The dialogue is "part of the Commission's broader strategy to address the distortion that national subsidies policies put on the promotion of a global level playing field where companies can compete on their merits", it said.

Meetings will be held at least once a year, alternating between Brussels and Beijing, the Commission said.

The European Commission has been working with the competition authorities of countries outside the EU for many years, it said. In its Free Trade Agreements negotiations it is also negotiating a competition chapter that provides rules and disciplines on both antitrust, mergers and subsidies.

China is the EU's second trading partner, while the EU is China's biggest, the Commission said.