JD.com and Ceconomy Show How China-EU Economic Rivalry Is Turning Into a New Cold War

The proposed takeover of German retailer Ceconomy, the owner of MediaMarkt and Saturn, by Chinese online retailer JD.com was supposed to be a major corporate deal. Instead, the $2.5 billion transaction has become a focal point in the increasingly tense relationship between China and the European Union. For Brussels, this is no longer simply a question of competition, subsidies or internal market rules. For Beijing, it is another example of European regulation increasingly being used to constrain Chinese business.

The European Commission has launched an in-depth investigation into the deal under the Foreign Subsidies Regulation. Brussels is examining whether JD.com may have received financial support from the Chinese state that could have given the company an advantage in acquiring Ceconomy. In August, JD.com offered regulators a series of measures intended to address their concerns, but these have so far failed to clear the way for the deal.

The problem for JD.com is not only whether the acquisition will ultimately be approved. The investigation itself demonstrates how much more difficult access to the European market has become for Chinese capital. The company is not state-owned, does not dominate the European market and is, at least formally, offering Europe what Brussels normally seeks to encourage: investment, jobs and business development. That makes the Ceconomy case particularly significant. If even such a deal faces such intense scrutiny, Chinese companies can increasingly expect commercial logic to be inseparable from geopolitics.

Beijing Moves From Criticism to Pushback

China has responded to the investigation far more aggressively than might be expected from what is ostensibly a corporate dispute. China’s Ministry of Justice described the EU investigation as an improper exercise of extraterritorial jurisdiction and ordered Chinese entities not to cooperate with the relevant requests. Beijing has also warned of possible countermeasures if Brussels continues to act unilaterally.

This marks an important shift in the nature of the conflict. The EU is using its own regulatory framework to examine whether state subsidies distort competition within the bloc. China, meanwhile, increasingly sees such mechanisms as attempts to restrict its companies beyond China’s borders.

As a result, a corporate transaction is becoming part of a broader diplomatic confrontation. And the more Brussels links economic policy to strategic security, the harder it becomes for Beijing to view European decisions as neutral regulation.

Ceconomy Is Only One Episode

JD.com’s difficulties have not emerged in isolation. In recent years, the EU has tightened scrutiny of Chinese companies across a range of strategic sectors, from electric vehicles and batteries to online retail. Companies including BYD, CATL, Temu and AliExpress have all come under scrutiny from Brussels.

The underlying issue is broader than any individual company. Europe is seeking to reduce its dependence on China in critical supply chains while remaining one of Beijing’s largest trading partners. This creates a contradiction that is becoming increasingly difficult to conceal: the EU wants to preserve economic ties with China while simultaneously controlling the risks associated with Beijing’s industrial policies and state support for business.

For Chinese companies, the signal is equally clear. Even when they are not directly controlled by the state, their investments in Europe can increasingly be viewed through the lens of Beijing’s wider strategic policies.

Europe Still Needs Chinese Capital

The paradox is that tighter scrutiny has not stopped Chinese investment. According to Reuters, Chinese direct investment in Europe has reached a seven-year high despite growing regulatory resistance.

For Europe, this creates a difficult balancing act. Brussels wants the tools to protect its market, but excessive political intervention could make the EU less attractive to foreign capital. For Chinese businesses, the situation is no less complicated: Europe remains a large and wealthy market, but the rules for entering it are becoming increasingly stringent and unpredictable.

This is why the JD.com-Ceconomy deal matters far beyond MediaMarkt and Saturn. If the two sides fail to separate trade regulation from political confrontation, every major Chinese acquisition in Europe could become another test of relations between Beijing and Brussels.