China Expresses Strong Dissatisfaction with EU’s Electric Vehicle Investigation

China’s industrial regulatory body, the Ministry of Industry and Information Technology, has expressed strong dissatisfaction with the European Union’s investigation into Chinese electric vehicles, according to a report by China Daily on November 15, 2023. The body argued that such actions would severely disrupt and distort the global automotive industry chain and supply network.

Emphasis on the Long History of Cooperation Between China and Europe

The agency particularly emphasized the long history and broad mutual benefits of cooperation between China and Europe in the automotive industry. Major European car companies have factories in China, and China is the largest overseas market for many European car companies.

The car industry is a typical global industry that relies on labor division and efficient cooperation between companies from various countries. The rapid development of China’s new energy vehicle industry benefits from global cooperation in technological innovation and international cooperation in supply chains and injects strong momentum into the green and low-carbon transition of the global automotive industry, China Daily reported.

Chinese Government’s Critique of the EU Investigation

The Chinese government has criticized the EU’s investigation, stating it does not comply with the World Trade Organization’s international trade rules and lacks sufficient factual evidence. The argument says that under the guise of fair trade, the investigation aims to protect domestic industries. This approach will severely disrupt and distort the global automotive industry’s supply chain, including that of the European Union, and harm European consumers.

Meanwhile, the European Commission, the executive body of the European Union, announced on October 4 that it had officially begun investigating whether subsidies related to Chinese electric cars unfairly hinder competition. If the investigation finds issues, it will consider imposing punitive tariffs.

EU’s Concerns About Chinese Electric Car Dominance

Countries in the European Union, including France, have raised concerns about the influx of affordable Chinese electric cars. In September, the European Commission president announced the launch of an investigation. There is a strong sense of crisis in Europe that Chinese electric cars are dominating the market, threatening the sales of European electric cars and potentially leading to job losses.

The European Commission emphasized that it would take decisive action if it found evidence. The European Union’s rule allows it to impose tariffs if it recognizes that imported goods that have received subsidies outside the EU are unfairly cheap and causing harm to the domestic industry. The investigation is expected to conclude within 13 months. China strongly opposes this, and there is a deep-rooted cautious view within the European Union due to fear of economic retaliation.

China’s Response to the EU Investigation

In response, the Ministry of Commerce (MOC) of China expressed strong dissatisfaction with the decision of the European Commission to start an anti-subsidy investigation on Chinese electric cars on the same day. The MOC spokesperson stated that Europe’s current countervailing duty investigation is based solely on subjective assumptions about the so-called subsidies and threat of damage. They lack sufficient evidence, do not comply with relevant WTO regulations, and China is strongly dissatisfied.

Moreover, the European side demanded that China conduct consultations quickly but failed to provide effective consultation materials, which damaged China’s rights and interests. China urged the European side to proceed from the big picture of maintaining the stability of the global industry and supply chain and the China-EU comprehensive strategic partnership and use trade remedy measures cautiously.

Furthermore, China emphasized that it encourages establishing a fair, non-discriminatory, and predictable market environment for the joint development of the China-EU electric vehicle industry. It also deepens cooperation with Europe in the new energy industry represented by electric vehicles. China will pay close attention to Europe’s follow-up investigation procedures and firmly safeguard the legitimate rights and interests of Chinese enterprises.