The European Commission this Wednesday formally opened an investigation into China for alleged illegal aid, such as direct aid and credits, in the sensitive and strategically important electric car sector, and Brussels stressed that it has sufficient evidence against Beijing.
The information was published this Wednesday in the Official Journal of the European Union (EU), about three weeks after the institution’s announcement, indicating that the European Commission, “on its own initiative”, is launching an investigation “based on the fact that imports of “New battery electric vehicles, designed for passenger transport, originating in the People’s Republic of China are being subsidized, thereby causing injury to the Union industry.”
“Following an in-depth analysis of recent market developments and taking into account the sensitive nature of the electric vehicle sector and its strategic importance for the EU economy in terms of innovation, added value and employment, the Commission obtained information on the market from several independent sources”, which “indicate the existence of illegal subsidy practices”, Brussels adds in the argument.
The Community Executive also guarantees that it has “sufficient evidence that imports of the product under investigation, originating in the People’s Republic of China, benefited from subsidies subject to countervailing measures granted by the Government”, which led to the rapid growth of Chinese brands in the market. the European market.
Specifically, the European Commission states in the Official Journal of the EU that it is aware of various direct aid, loans, export credits and lines of credit granted by state banks or even tax benefits.
The investigation covers alleged illegal practices between October 1, 2022 and September 30, 2023.
Brussels also warns Beijing that “if an interested party denies access to the necessary information, does not provide it within the established period or significantly hinders the development of the investigation, provisional or definitive conclusions, positive or negative, may be drawn based on the available data.”
According to data from the European Commission, Chinese electric cars, which recently entered the EU, already represent 8% of the total market, being 20% cheaper compared to the European competition.
China, which has emerged as an economic power, has promoted a strong state investment strategy, which the EU questions because it affects competition.
What is at stake are large subsidies for Chinese companies that invest abroad, mainly in strategic sectors.
The size of the Chinese market and strong state support have led to the rise of local brands, including BYD, NIO and Xpeng.
Source: TSF
