The EU's white paper clamping down on foreign subsidies in order to fend off Chinese investment is itself highly controversial. It ignores the complexities behind many of the investment cases. Take the case of Geely's purchase of Volvo a decade ago (thread on a whim)

it's no secret that Li Shufu took money from the local govts moments before pay day. Chinese private companies like Geely face a particularly difficult situation when it comes to foreign acquisitions, and are often questioned about their lack of financial strength.

The Volvo case was challenged by the leader of a Chinese bank and the credit was cancelled. Failed to get loans from the banks, Li asked Zhejiang merchant friends to lend money, but no one did. It was only at the last minute that the local govts, including Daqing, Shanghai and

Chengdu, helped to finance the buyout. For local govts, providing disguised debt to Geely can attract the opening of factories or R&D centres that will boost the regional economy. Daqing in the northeast rust belt, for example, traded 3 billion yuan for a Geely factory to help

transform this oil city into an auto city. Regardless of whether this Chinese industrial policy model will be counted as a state subsidy by the EU standards, Geely's success in acquiring Volvo is unlikely to be replicated in the present. If we look at this case in a

results-oriented way, Volvo’s value has risen tenfold after the acquisition. Even during the pandemic, Volvo’s sales have held up compared with the dismal results of rivals. If the rescue of Volvo is blocked, who will bail out European companies that need investment?