Since its inception in 2013, Perspective on Trade has explored the development of international trade agreements with a special emphasis on government procurement.
The European Commission has initiated an in-depth investigation under the Foreign Subsidies Regulation (FSR) to determine whether a Chinese bidder has an undue advantage in a Portugal procurement as the result of foreign subsidies. This is the fourth FSR investigation that has targeted Chinese companies. In the first three cases, the Chinese firm withdrew from the procurement. This post outlines the latest investigation and its possible consequences.
The FSR, in force since 2023, empowers the Commission to investigate and address distortions caused by financial contributions from non-EU countries that give the recipients an unfair advantage in EU procurement with bids below market prices or below cost. The FSR requires firms participating in large EU public tenders (procurement of at least €250 million) to notify financial contributions that they have received from foreign governments.
The latest investigation was based on a notification by a consortium led by Mota Engil with subcontractors that included Portugal CRRC Tangshan Rolling Stock Unipessoal. The consortium participated in a procurement undertaken by Metropolitano de Lisboa for the design, construction, and maintenance of a new subway line in Lisbon. The procurement was launched in April 2025. According to Reuters, the procurement drew four tenders, ranging from €599 million ($698.55 million) to €716 million. Metropolitano de Lisboa has not yet selected the winner.
After a preliminary assessment, the Commission found “sufficient indications” that the Portuguese subsidiary of CRRC, a Chinese state-owned rolling stock manufacturer, may have benefited from foreign subsidies that distorted the internal market in its participation in the consortium’s bid. That warranted an in-depth investigation, which commenced on November 5, 2025. The Commission will now assess whether such subsidies gave the company an unfair advantage in the procurement for light rail vehicles. Following its in-depth investigation, the Commission could accept remedies from the subsidized bidder, bar it from winning the bid, or decide not to object.
Since FSR implementation began in July 2023, the EU has received more than 1100 notifications in public procurements and has initiated three in-depth investigations—all against Chinese firms, contending that they had benefited from foreign subsidies. In each case, the Chinese firm withdrew from the procurement before the Commission completed its investigation. One of the Chinese firms was another CCRC subsidiary that was participating in a procurement in Bulgaria. The question now is whether the CCRC unit participating in the Lisbon procurement will also withdraw from the procurement.
The Chinese government has pushed back on the EU’s application of the FSR regulation, contending in a report issued in January 2025 that the EU discriminated against Chinese firms in undertaking in-depth FSR investigations.
The European Commission has initiated an in-depth investigation under the Foreign Subsidies Regulation (FSR) to determine whether a Chinese bidder has an undue advantage in a Portugal procurement as the result of foreign subsidies. This is the fourth FSR investigation that has targeted Chinese companies. In the first three cases, the Chinese firm withdrew from the procurement. This post outlines the latest investigation and its possible consequences.
The FSR, in force since 2023, empowers the Commission to investigate and address distortions caused by financial contributions from non-EU countries that give the recipients an unfair advantage in EU procurement with bids below market prices or below cost. The FSR requires firms participating in large EU public tenders (procurement of at least €250 million) to notify financial contributions that they have received from foreign governments.
The latest investigation was based on a notification by a consortium led by Mota Engil with subcontractors that included Portugal CRRC Tangshan Rolling Stock Unipessoal. The consortium participated in a procurement undertaken by Metropolitano de Lisboa for the design, construction, and maintenance of a new subway line in Lisbon. The procurement was launched in April 2025. According to Reuters, the procurement drew four tenders, ranging from €599 million ($698.55 million) to €716 million. Metropolitano de Lisboa has not yet selected the winner.
After a preliminary assessment, the Commission found “sufficient indications” that the Portuguese subsidiary of CRRC, a Chinese state-owned rolling stock manufacturer, may have benefited from foreign subsidies that distorted the internal market in its participation in the consortium’s bid. That warranted an in-depth investigation, which commenced on November 5, 2025. The Commission will now assess whether such subsidies gave the company an unfair advantage in the procurement for light rail vehicles. Following its in-depth investigation, the Commission could accept remedies from the subsidized bidder, bar it from winning the bid, or decide not to object.
Since FSR implementation began in July 2023, the EU has received more than 1100 notifications in public procurements and has initiated three in-depth investigations—all against Chinese firms, contending that they had benefited from foreign subsidies. In each case, the Chinese firm withdrew from the procurement before the Commission completed its investigation. One of the Chinese firms was another CCRC subsidiary that was participating in a procurement in Bulgaria. The question now is whether the CCRC unit participating in the Lisbon procurement will also withdraw from the procurement.
The Chinese government has pushed back on the EU’s application of the FSR regulation, contending in a report issued in January 2025 that the EU discriminated against Chinese firms in undertaking in-depth FSR investigations.
