By Jiahui Huang


A Chinese state-owned train maker has pulled out of the bidding for a Bulgarian contract worth about $665 million, six weeks after European officials launched an investigation into whether foreign subsidies helped the company to undercut rivals.

CRRC Qingdao Sifang Locomotive, a unit of railway giant CRRC Corp., has withdrawn its bid to provide the Bulgarian government with 20 electric "push-pull" trains and related maintenance and training, the European Commission said late Tuesday. The estimated value of the contract was about 1.2 billion Bulgarian lev ($664.6 million), it said.

The European Commission last month announced an investigation into the CRRC unit over the tender in Bulgaria, the first under the European Foreign Subsidies Regulation that came into effect last summer. It said that there were sufficient indications that the unit had received a foreign subsidy that "distorts the internal market" and may have allowed the company to submit an "unduly advantageous tender."

The EC said Tuesday that it was dropping its investigation in the wake of CRRC's bid withdrawal.

Neither CRRC nor its unit responded to a request for comment on Wednesday.

The China Chamber of Commerce to the EU said in a statement on its website that the move shows the European Union is using the new regulations as a "new tool to deter foreign companies and exclude them from participating in market competition." It called on the EU to provide a fair business environment for Chinese companies to develop in European markets.

The dropped bid comes amid rising concerns about the role subsidies play in Chinese businesses' competition in Western markets.

In September, the EU launched an antisubsidy investigation into Chinese EV makers, pointing to the impact of low-priced Chinese products on the bloc's domestic industries. China became the world's biggest car exporter last year, surpassing Japan and Germany, while Chinese EV maker BYD overtook Tesla to become the bestselling pure EV maker in the final quarter of 2023.


Write to Jiahui Huang at jiahui.huang@wsj.com


(END) Dow Jones Newswires

03-27-24 0523ET