Brussels engineering leverage only undermines mutual trust

China's Ministry of Justice said on Wednesday that the European Union's cross-border investigation into Chinese e-commerce giant JD.com under the EU Foreign Subsidies Regulation constitutes unlawful extraterritorial jurisdiction. The ministry reached the conclusion following an investigation conducted under China's rules on countering foreign states' unlawful extraterritorial jurisdiction measures. This is the second time Beijing has invoked these rules, following a similar determination in May against the EU's probe into Chinese company Nuctech. The ministry also said that no organization or individual may comply with or assist in implementing the EU's measures.

The JD.com probe by the EU, launched in May over the Chinese company's proposed $2.5 billion acquisition of German retailer Ceconomy, arbitrarily demanded broad and unnecessary information from China. The EU practice is a serious violation of the international rule of law.

The EU should immediately correct its practices, stop abusing the FSR as an investigative tool and foster a fair, impartial and predictable environment for companies operating in the EU market. If the EU persists with this wrong course, China will resolutely take countermeasures in accordance with the law, said a spokesperson for the Ministry of Justice.

Beijing's rejection of Brussels' extraterritorial overreach is fully justified. China will not accept unilateral measures that harm its sovereignty, security, development interests or the legitimate rights of its enterprises.

However, China remains willing to manage disputes through dialogue. On Thursday, the Ministry of Commerce announced a decision regarding the succession of antidumping duty rates for copolymer polyoxymethylene, which involves companies from the EU, Japan, the United States and China's Taiwan region. It signals that Beijing possesses a full array of legal instruments to safeguard its core interests.

Meanwhile, EU foreign affairs chief Kaja Kallas is expected to travel to China this autumn for her first bilateral strategic dialogue since last summer, according to media reports. The dialogue should serve to underline the reality that both sides recognize the necessity of keeping channels open to address their common concerns in various fields, including trade issues.

This is precisely why the June 29 launch of the China-EU Trade and Investment Consultations in Brussels matters. EU Trade Commissioner Maros Sefcovic and Chinese Commerce Minister Wang Wentao established four core work streams — trade balancing, export controls, intellectual property protection and World Trade Organization reform — with a joint monitoring mechanism and an October target for tangible progress in addressing their trade concerns. Vice-ministerial talks have also continued through summer, with a second ministerial round scheduled in Beijing this autumn.

So, while the EU continues to unilaterally deploy instruments such as the FSR against Chinese companies, and China has demonstrated its resolve to respond with countermeasures, both sides are also using institutional structures — the trade and investment consultations framework and the strategic dialogue — to prevent their trade disputes from spiraling into a broader trade war.

The EU faces a difficult choice: continue down a path of regulatory unilateralism that erodes trust and investment confidence, or genuinely engage in the dialogue mechanisms it has helped create. China has made its readiness for either scenario clear — it will defend its interests forcefully against unlawful measures, but it remains open to solving differences through equal-footed consultations. As the autumn meetings approach, the EU should drop the illusion that coercive bargaining chips yield real leverage. They don't — they only deepen distrust.

Reports say the EU is preparing new Russia sanctions. If Brussels once again unjustifiably targets Chinese entities, Beijing will respond with strong countermeasures. Beijing's previous countermeasures against multiple EU entities — taken in response to the bloc's unjustifiable inclusion of Chinese firms in its latest Russia sanctions — should serve as an unmistakable warning. Brussels would be wise not to test Beijing's resolve again — or it may find that the stone it throws lands squarely on its own foot.