A forthcoming EU probe into Chinese electric cars entering Europe has angered Beijing, with officials and state-run media outlets lambasting the Commission for attacking the country’s interests and engaging in protectionism.
Commission President Ursula von der Leyen announced the probe earlier this week, accusing China of using state-subsidies of “distorting” the EU market by using state subsidies to keep Chinese electric vehicles (EVs) artificially cheap.
Chinese Communist Party officials claimed that the investigation is just a desperate attempt by von der Leyen to save a European automotive industry that has been losing its competitive edge internationally.
“China believes the investigative measures proposed by the European Union are in reality to protect its own industry in the name of ‘fair competition’,” China’s commerce ministry said in a statement.
“It is a naked protectionist act that will seriously disrupt and distort the global automotive industry and supply chain, including the EU, and will have a negative impact on China-EU economic and trade relations.”
CCP mouthpiece the Global Times also attacked the investigation.
“To tell the truth, when Chinese new energy vehicles shone brightly at the recent 2023 International Motor Show in Germany, we heard some envious and even jealous remarks but we didn’t expect Europe’s response to be so ‘excessive’,” the newspaper said in an editorial.
“If Europe lacks the confidence and courage to win the market through fair competition, it will be impossible to establish competitiveness in the EV industry,” it added.
German carmaker Volkwagen is struggling over a collapse in sales of electric vehicles. https://t.co/h0IOUqyHvQ
— Brussels Signal (@brusselssignal) July 17, 2023
The Chinese are not the only ones expressing dismay regarding the EU investigation. Eurasian Group analysts warned that should Brussels ultimately levy duties against subsidised Chinese EVs, Beijing would likely impose countermeasures to hurt European industries.
Germany’s car industry, conscious that a trade war could hit its business in China, was also circumspect.
Mercedes Benz said protectionist measures were counterproductive and Bosch, the world’s largest automotive supplier, said a race for punitive tariffs and trade barriers would only produce losers.
Volker Treier, head of trade at the German Chamber of Commerce and Industry (DIHK), said: “Chinese distortions of competition are a particular problem that Europe should tackle, but if possible not with excessive subsidies or new punitive tariffs at the end of a lengthy process.”
Some analysts said the probe was unlikely to pose a significant risk for Chinese EV makers because they could turn to other growing markets such as South-East Asia.
A number of EU lawmakers have also backed the investigation, with German climate change and economic affairs minister Robert Habeck expressing confidence in von der Leyen’s plans.
President Emmanuel Macron’s French Government has been calling for such a probe for months, with the country keen to see Brussels take a tougher stance on foreign trade.
China’s energy policies are determined by strategic considerations about a potential war with the United States, and not the challenge of climate change as many would like to believe, writes @Raphfel. https://t.co/8cmYG6XYSv
— Brussels Signal (@brusselssignal) August 16, 2023
Reuters contributed to this story