Photo: VCG

China has determined that the European Union's relevant cross-border investigative practices targeting Chinese entities in its probe into Nuctech, a Chinese security inspection equipment company, under the Foreign Subsidies Regulation (FSR) constitute improper extraterritorial jurisdiction measures, the Ministry of Justice (MOJ) said in a notice issued on Friday.

No organization or individual may carry out, or assist in carrying out, such improper extraterritorial jurisdiction measures, the MOJ notice said.

Chinese analysts said this move marks a concrete legal step by China to push back against what it sees as regulatory overreach targeting Chinese entities, coming about a month after China brought into force a new set of rules on countering foreign states' unlawful extraterritorial jurisdiction measures on April 13.

The regulations, consisting of 20 articles, include efforts to establish and improve working mechanisms for countering foreign unjustified extraterritorial jurisdiction, set up a system for the identification, blocking, and countermeasures against foreign unjustified extraterritorial jurisdiction measures, while improving the service and safeguard mechanisms, according to Xinhua.

It is the first real-world application of China's first administrative regulation against unjustified extraterritorial jurisdiction since the rules were issued, said Jian Junbo, director of the Center for China-Europe Relations at Fudan University's Institute of International Studies, noting that the decision demonstrates China's resolve to protect Chinese enterprises' lawful rights and interests in accordance with the law.

The case began in April 2024, when the European Commission (EC) launched an ex officio probe under the FSR by carrying out inspections at Nuctech's premises in Poland and the Netherlands, according to the commission.

The EC claimed on December 11, 2025 that it had opened an in-depth investigation into Nuctech's threat detection systems business in the bloc, saying that a preliminary review found sufficient indications that the company may have received so-called foreign subsidies that "could distort the EU internal market."

Nuctech took the EC to the General Court of the European Union in June 2024 over inspections at its offices in Poland and the Netherlands, saying there was no evidence to support allegations that it had benefited from illegal state support, Reuters reported.

In a later response to a media question on Friday, a spokesperson for MOJ said that the EU, by using the FSR to investigate Nuctech, had arbitrarily demanded that Chinese entities provide a wide range of unnecessary information located within China's territory. Such cross-border requests imposed improper requirements on the relevant entities and clearly violated international law and the basic norms governing international relations, the spokesperson said.

The spokesperson said the decision was made to safeguard China's national sovereignty, security and development interests, and to protect the legitimate rights and interests of Chinese citizens, legal persons and other organizations.

The FSR is a unilateral instrument created by the bloc itself, the spokesperson said. Since the regulation came into force, the EU has repeatedly used it to investigate Chinese companies, showing clear targeting and discriminatory features, the spokesperson added.

The spokesperson said the EU's use of the regulation is a typical example of pursuing protectionism in the name of "fair competition." 

Jian noted that investigations under the FSR require targeted companies to prove that they have not received distortive subsidies, while applying adverse presumptions against state-owned enterprises from non-EU countries. This, he said, represents an obvious "double standard" compared with the rules applied to companies from EU member states under the bloc's own state aid framework.

Since the FSR came into force in 2023, the EU has launched intensive investigations into Chinese companies, with Nuctech, CRRC and Temu among the key targets, which, Jian said, shows clear targeting and discriminatory features.

MOFCOM had already determined in January 2025, in accordance with the law, that the EU's relevant practices constituted trade and investment barriers, the MOJ notice said.

Instead of correcting its approach, the EU has continued moving further down the wrong path, the  MOJ spokesperson said, stressing that China will never accept the abuse of "long-arm jurisdiction" by foreign countries or regions against Chinese citizens and enterprises. 

Friday's notice is a concrete step taken under China's rules on counteracting unjustified extraterritorial application of foreign legislation and other measures, the spokesperson said.

China urges the EU to immediately correct its wrong practices and create a fair, just and predictable market environment for China-EU cooperation, the spokesperson said. "If the EU insists on overstepping boundaries, China will resolutely take countermeasures in accordance with the law," the spokesperson said.

An insider told the Global Times in April that China has a full policy toolkit to counter EU protectionist measures and stands ready to use it when necessary. China could also launch investigations into the impact of foreign subsidies in response to the EU's FSR, the insider said.

"China is neither unfamiliar with nor intimidated by trade wars. If the EU chooses to provoke a trade war, China will respond promptly and resolutely. However, any escalation — let alone a full-scale trade war — would harm both sides, disrupt global industrial and supply chains, and weigh on global growth," the insider noted.