China blocks firms from aiding EU’s JD.com probe as regulatory clash deepens

Beijing has prohibited Chinese firms from assisting the European Union's investigation into JD.com, a Chinese e-commerce giant, under the EU's foreign subsidies regulation (FSR). The Chinese Ministry of Justice declared the probe as an instance of "undue extraterritorial jurisdiction measures", instructing that "no organisation or individual may execute or assist in the execution".

This comes after the European Commission launched an in-depth investigation in May to assess whether JD.com's proposed acquisition of German retailer Ceconomy would distort the EU internal market due to the Chinese company's alleged receipt of state subsidies. This is the second time Beijing has used a blocking order to prevent compliance with such an investigation; they issued a similar decree in May regarding a case involving airport scanner maker Nuctech.

Chinese companies affected by these probes have expressed dissatisfaction with the information they are required to share. FSR has highlighted the challenges businesses face in complying with evolving regulations in both the EU and China. In a separate development, wind turbine manufacturer Goldwind requested to suspend its FSR case, arguing that the commission's request for information extended beyond the investigation's scope.

The EU's General Court declined Goldwind's request, deeming it too speculative. The Chinese justice ministry, in a joint statement with the Ministry of Commerce, accused the EU of making "arbitrary demands for extensive and unnecessary information from the Chinese entity", calling it a violation of international rule of law and ordering no one to implement or assist in the implementation of such measures.

The proposed $2.5 billion acquisition of Ceconomy by JD.com has been conducted amidst rising EU-China trade tensions, with both sides attempting to ease them.