With the globalized use of subsidies, the regulation of foreign subsidies or cross-border subsidies is gradually becoming an important trend. In order to maintain fair competition in the internal market, the EU has taken the lead in exemplifying this by proposing new tools to address distortive foreign subsidies in the White Paper on Levelling the Playing Field as Regards Foreign Subsidies and Regulation on Foreign Subsidies Distorting the Internal Market. However, EU’s regulation of foreign subsidies may not only be inconsistent with the WTO legal system, but also runs counter to its commitment to non-discriminatory treatment of foreign investment. Giving the European Commission excessive discretionary powers makes the EU investment climate much less predictable. EU’s regulation of foreign subsidies is clearly intended to target China and Chinese companies. In this regard, China should take the initiative to participate in plurilateral negotiations on the global regulation of cross-border subsidies, demanding recognition of the developmental role of subsidies and negotiating new rules based on adequate information, economic assessment and analyses.