Hello and welcome to another MLEX podcast. I'm Sam Wilkin, Brussels Bureau Chief, and today we're going to talk about the EU's relationship with China. The two sides are holding a summit on the 9th of April and there's

plenty to think about, from industrial policy to trade defence to data privacy. We're going to look now

that the issues arising from China's model of state capitalism. And here's a talk us through it,

Poppy Carnel and Natalie McNellis, who cover trade and competition respectively here in Brussels. Hello, Poppy and Natalie.

Hi.

Natalie, just start us off by setting the scene, please. What exactly is the problem with China?

Well, I think things have reached a fever to pitch in Europe right now, and it's really been spurred by

the blocking of a big merger, the merger of Alstom and

Siemens railway companies.

And the reason that it's relevant to China is because Alstom and Siemens said they needed

to merge in order to combat Chinese competition.

And China has an enormous rail giant called CRRC, and it was created by the merger

of its railway companies. And so the European railway companies said, hey, if China can do this,

and we can't, you're handicapping us in the global competitive world.

But underlying this, I think there's the sense that China is somehow competing unfairly on the

global stage in a way that other giant economies like the US don't. What's the basis of that?

Is that based in?

Well, it's a feeling. I think that it's a real concern that the Chinese companies are state-owned, or at least state-sponsored,

and therefore they have very deep pockets and the ability to perhaps do things that companies that run under market economy principles can't really do.

And there's a feeling that it means that there's an unlevel playing field and that in order to level it,

the European authorities need to loosen up.

Okay, and that obviously impacts in, I mean, the Siemens Ellsom case was about the threat of this giant Chinese company

...