Nuctech’s Global Expansion and Controversy

Nuctech’s rise from a state-backed start-up in China to a major global supplier of border-security equipment has sparked controversy in trade and subsidy disputes.

On a chilly April morning in 2024, European officials raided Nuctech’s offices in two locations. These investigators from the European Union seized laptops, phones, and documents. They were looking for evidence that Nuctech, formerly led by the son of China’s ex-president Hu Jintao, acquired unfair advantages in competitive bids. The company aimed to install X-ray scanners and explosive detection systems across over two dozen European nations.

Nuctech’s reach is broad, with installations in airports and seaports of more than 170 countries. It has faced scrutiny before. The firm has appeared in corruption investigations in Namibia and the Philippines. In Canada, there have been data security concerns. The U.S. has also placed Nuctech on a national security blacklist.

In Europe, unease about Chinese firms dominating various industries is rising. Nuctech has become a focal point for politicians eager to safeguard local businesses and jobs. Concerns over potential vulnerabilities to espionage or hacking are increasing.

The European Commission is examining whether governmental support has inadequately boosted Chinese businesses. A fresh legal framework will analyze public bids by Nuctech and other Chinese producers of electric vehicles, solar panels, and wind turbines.

In contrast, China has condemned the probes, describing them as “illegal” and “unjustified suppression of Chinese enterprises.” The raids prompted the European Commission to initiate a thorough investigation that might result in divestments and prohibitions. China’s Ministry of Justice has countered by directing Nuctech to resist cooperation.