China’s CRRC drops bid for Lisbon metro deal as EU finds ‘billions’ in subsidies Polish firm to replace state-backed Chinese giant as Brussels uses regulatory powers to curb what it says is market-distorting foreign aid.

Story: China’s CRRC drops bid for Lisbon metro deal as EU finds ‘billions’ in subsidies probe

www.scmp.com/economy/glob...

🇪🇺🏳️‍🌈⚖️🇭🇺 A legal earthquake - CJEU finds Hungary to have violated EU law on multiple counts with its anti-LGBT+ legislation (as expected) but also for the first time in history, in an EU law-reshaping precedent, finds Hungary to violate Art 2 TEU in a self-standing manner.

you could call it... systemic rivalry!

EU subsidy raids on Chinese company Nuctech were legal: court Landmark decision rejects firm’s assertion that complying with bloc’s regulation put it on collision course with mainland criminal laws.

They have also complained that they are being asked to share state secrets - a charge that was dismissed by the EU's General Court in 2024 when raised by airport scanning maker Nuctech

Rather than comply with FSR, Chinese companies have frequently withdrawn from bids.

The reg requires copious amounts of info to be handed over at short notice. Chinese companies, some with state links, complain that it puts them in breach of China's data export laws

Interestingly - in a first, the commission continued its probe even after CRRC withdrew, because they worried that it might re-enter the tender "via the backdoor".

Commission says it found a vast range of subsidies "in the order of billions" relating to CRRC Group

Breaking:

Chinese rail giant CRRC's Portuguese subsidiary withdrew from a consortium to provide trams to metro project in Lisbon after EU foreign subsidies regulation probe - replaced by a Polish company

Story to follow with Xiaofei Xu

No, but I think his point is that we're not taken seriously even on the diplomatic side because we're not considered a power in either regard

On the surviving order:

"I suspect many of them want to maintain a rules-based order that allows them to work with all the big players and prevent being sucked against their will into the orbit of just one of them"

But most want the order to survive

"There are 193 countries in the UN and probably about 190 of them are not waiting to be assigned to someone’s sphere of influence...."

Fracture changes the game:

"Everyone thought US & Europe, when push came to shove, would be on the same side. You had to be careful which lines you crossed because you'd face a strong transatlantic bloc. Trump put an end to that... that makes the game look very different"

On the balance of power:

"First, we have the rise of China. Then we can see that Russia is actually a weak player, although that’s hidden by their war-making, but on most counts, it’s becoming weaker and weaker. The big novelty is the US and the breaking of transatlantic unity"

But still - Biscop insists this is not yet a new world order, even though it is changing fast.

For the moment, the system still holds – but it’s under tremendous pressure. What has changed is the balance of power and relations between the great powers within that order."

Biscop:

"It's so massively counterproductive that we have to spend all this time worrying about the US, which should be on our side, but which isn’t under Trump. So that detracts massively from our capacity to think about Russia, China, the Gulf and all the rest."

Trump hits Europe's capacity on other fronts:

We in Europe begin to worry more about US than anybody else. We talk more about Trump than Xi & even Putin. That’s partially because they’re allies. You expect more from allies than adversaries. Nobody expects Putin to be nice to us

At the same time, the US is changing the equation. Everything EU held true about the transatlanticism is dead.

"The guy claims our territory – what is that if not rivalry? The Greenland crisis was the tipping point where we realised you have to draw red lines and enforce them"

Biscop:

"If you show you have the will and the courage to retaliate when you must, then your offer of cooperation will be taken seriously. But if you never really do that – or you say it but then you don’t do it – then the offer of cooperation will be seen more as a weakness"

He also points to Europe's credibility deficit

"My motto for EU remains: we cooperate whenever we can with who we can, but we must push back and retaliate when we must. And the second bit is a precondition for the first bit..."

Isolated Europe = weaker

"It will greatly reduce our capacity to negotiate with China & make us less attractive to other potential partners. Already we look weak as we made concession after concession to Trump. If we're more isolated, we become even less attractive as a partner"

The risk is that Europe ends up isolated between major powers.

"I can imagine a scenario where Trump normalises relations with Russia, manages to make some sort of bigger deal with China. China and Russia get along well, even if there are frictions. Then we're the odd one out."

This could be a problem if US-China make a broader deal

"I can see China being even less motivated to make a balanced deal with us. If we concede everything, sure, otherwise if they have a good deal with US, why would they care about Europe? The status quo is to their advantage"

That lack of strategy has consequences, Biscop says:

“The Chinese seem to consciously treat us as a quantité négligeable [something insignificant enough to be ignored] as a tactic… we don’t really have a clear strategy and so that… leads to a failure to reach an agreement.”

Useful framework, not a strategy - "it's an analysis of the problem"

"Apply that framework to every player. That’s a big lesson with US. We never thought it would be a rival, now under Trump, it is... but that’s analysis. Then, what do we do? We don’t know – not for US or China"

On China, the critique is similar.

"Do we have even a China strategy? I don’t actually think so. We have the 'partner, competitor, rival' approach, which I still subscribe to. It’s a good framework for looking at any relationship, but doesn’t tell you what you want from China"

Biscop:

."..Or if someone picks up our offer, somebody else might even punish them for it, then you have to come to the partner’s assistance"

That leads to a fundamental gap

“What are we really trying to do here? Does we have a view… of what the Middle East should look like?”

Biscop:

"The problem is all the areas we used to do this are now theatres of geopolitical rivalry, it’s no longer just a technical matter. If you offer an association agreement or any kind of cooperation to a state, somebody else is going to make an alternative offer..."

Zoom out and the critique becomes structural.

Europe was built for long-term, technical engagement

"The system is not good at dealing with over one crisis at a time. It's better at rolling out long-term structural policies across different regions, that is what we used to do"

He is sceptical of Europe playing a role in Hormuz:

"You’re only going to end the problem in the strait by ending the war, not by joining the war. If you send ships, it will be difficult to draw the line between defensive & offensive... there’s a real risk of getting sucked in"

His view on the war itself is clear.

“The US and Israel started a war and they no longer control the ramifications... expanding the war will not solve any problems. The only thing to expand is the number of powers involved in the diplomatic negotiations…"

Europe often compensates by thinking of itself as a diplomatic power. But in this crisis, even that fell short:

“We could have tried and failed… but we never even tried”

“And if the EU were to take some big diplomatic initiative now, who would care?”