Evolving goals of EU State aid policy and possible lessons for China: A law and economics approach

This chapter discusses one of the main areas of EU competition law: State aid. Like other areas of EU competition law, such as abuse of dominance and merger control, there is a clear shift towards a ‘more economic approach’ and a stronger focus on efficiency. However, this stronger focus on efficiency with regard to a politically sensitive area such as State aid is not self-evident, and also raises the question why other jurisdictions do not have a similar control over market intervention by States (US) or provinces (China). It also raises the question whether controlling the efficiency of government spending should be a task of the EU rather than Member States. The aim of this chapter is therefore to critically assess the changing goals of EU State aid policy, from market integration and equity to efficiency and fiscal discipline. Possible implications for China are also discussed.

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