The Chinese government warned on Thursday of the “negative impact” on relations between China and the European Union caused by the investigation launched into subsidies granted to Chinese electric vehicle manufacturers, which authorities say are causing unfair competition in Europe.
This measure, “taken in the name of ‘fair competition’”, is “overtly protectionist” and “will have a negative impact on economic and trade relations between China and the European Union”, a Chinese Foreign Ministry spokesperson warned . , at a press conference.
The President of the European Commission, Ursula von der Leyen, announced on Wednesday the opening of an investigation into the subsidies that China provides to its electric vehicle manufacturers, whose prices are “artificially low” because of this public support, which causes losses. to European companies.
“Global markets are flooded with cheaper Chinese electric vehicles and their prices are kept artificially low thanks to huge state subsidies,” Von der Leyen said in a State of the Union address.
European Commission Vice President Valdis Dombrovskis, responsible for trade, announced on the same day that he will travel to China next week to discuss the issue of subsidies for electric vehicles.
In recent months, France in particular has defended a more assertive Europe against Chinese practices.
Other European Union member states, including Germany, whose auto industry has its main market in China, are concerned about damaging relations with Beijing.
European companies “are often beaten on price by competitors who benefit from huge government subsidies. We cannot forget how much our solar panel industry has suffered from China’s unfair trade practices,” the European Commission president said.
Chinese diplomats emphasized that the country’s competitive advantage was “achieved through hard work” and “is the result of continuous technological innovation.”
China’s electric vehicle exports more than doubled (+110%) between January and August, according to data from the China Association of Automobile Manufacturers (CAAM) released on Wednesday.
Nearly six million electric cars were sold in China last year – more than all other countries in the world combined.
The size of the Chinese market has led to the rise of local brands, including BYD, NIO or Xpeng, which now threaten the ‘status quo’ of a sector dominated for decades by German, Japanese and North American construction companies.
Five of the ten best-selling electric vehicle brands in the world are now Chinese. The largest is BYD, which is only behind the North American Tesla. Chinese dominance also extends to the battery industry. China’s CATL and BYD are the largest manufacturers in the world. Beijing still maintains strong control over access to essential raw materials, including rare earth elements.
Still unknown to the majority of the European public, Chinese brands were present in large numbers at the Munich Motor Show in Germany at the beginning of this month.
Chinese carmakers have been waging a price war in recent months, at a time when the Chinese are cutting back on spending due to the slowdown in the country’s economy, adding to the pressure on European brands.
Source: DN
