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Chinese train maker pulls out of Bulgarian bid after EU investigation

CRRC’s CR400AF Fuxing locomotive has a maximum speed of 420km/h (N509FZ/CC BY-SA 4.0)
A Chinese train-making company has withdrawn from a €610m Bulgarian tender after the European Commission opened a first-of-its-kind investigation into the company. 

CRRC Qingdao Sifan, a subsidiary of the world’s largest rolling stock maker, had put in a bid to deliver and maintain 20 electric trains, the European Commission said in a statement, citing Bulgarian officials.

Last month, the Commission said it would investigate the Chinese company under the recently introduced Foreign Subsidies Regulation.

This gives the Commission the power to investigate financial contributions granted by non-EU governments to companies active in the EU, and the effect is to deter some Chinese companies from competing in the EU’s single market.

Thierry Breton, the internal market commissioner, said: “Our first investigation under the regulation has already yielded results. We will continue to take all necessary measures to preserve Europe’s economic security and competitiveness – with assertiveness and speed.”

The EU had a $208bn trade deficit with China in 2021, a figure that rose to $277bn in 2022.

This case involved the Bulgarian transport ministry’s tender for 20 electric “push-pull” trains and their maintenance over 15 years.

The regulation requires companies to notify the EU if they are bidding for a government contract in the EU worth more than €250m, and they were granted €4m or more from a third country in the three years before their bid.

CRRC Qingdao Sifang submitted such a notification on 22 January, prompting the commission’s probe.

After reviewing the notification, the commission said it considered it “justified to open an in-depth investigation, since there are sufficient indications that this company has been granted a foreign subsidy that distorts the internal market”.

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