Major response to announced EU anti-price-dumping investigation

The anti-dumping investigation now launched is based on the European Commission’s assumption that Chinese electric vehicle importers are benefiting from excessive state subsidies at home. EU Commission President Ursula von der Leyen put it this way yesterday in the European Parliament in Strasbourg: “Global markets are now flooded with cheaper electric cars. And their price is kept artificially low by huge state subsidies. So I can announce today that the Commission is launching an anti-subsidy investigation into electric vehicles coming from China. Europe is open to competition. Not for a race to the bottom.” In the eyes of the EU Commission, China’s subsidy programme distorts the local European market.

In the meantime, a number of reactions to this initiative have been released. The Chinese Ministry of Commerce, for example, commented on its website. In short, it calls on the EU to create a fair, non-discriminatory and predictable market environment for the joint development of the EV industry in China and Europe and to jointly oppose trade protectionism.

Here are some succinct passages in the statement: According to the Ministry of Commerce, the investigation measures proposed by the EU aim to “protect its own industry under the guise of fair competition”. This, it says, is blatantly protectionist behaviour that will seriously disrupt and distort the global automotive industry chain and suppliers, including the EU. With negative consequences for economic and trade relations between China and the EU.

“In recent years, China’s EV industry has developed rapidly and improved its competitiveness, which is the result of relentless scientific and technological innovation and the establishment of a complete industrial and supply chain,” the ministry said elsewhere. This, it said, is a competitive advantage achieved through hard work and by its own efforts, and is welcomed by global users, including EU consumers, while contributing greatly to the global response to climate change and the green transformation, including the EU.

The ministry also calls for dialogue, as “China and the European Union automotive industry have a wide range of cooperation opportunities and common interests. (…) EU automotive companies have invested and operated in China for many years, and the Chinese market has become the largest overseas market for many EU automotive companies. China has always maintained an open and cooperative attitude and welcomes EU automotive companies to further expand their investments in China, including in the field of electric vehicles.”

It concludes by saying that China will closely follow the protectionist tendencies and follow-up measures of the European side and firmly protect the legitimate rights and interests of Chinese enterprises.

As expected, the Chinese Chamber of Commerce for the EU criticises the measure in a similar tone. Their statement in full: “Chinese electric vehicle manufacturers, together with their upstream and downstream industry partners, have continued to push the boundaries of innovation. These concerted efforts have resulted in a significant industrial lead in both the highly competitive Chinese domestic market and the global market. They are delivering high-quality or low-cost e-vehicles that meet a wide range of consumer needs and are gaining recognition worldwide, including in Europe.”

It is important to stress that this advantage is not due to what the Commission calls “huge state subsidies”, the Chinese Chamber of Commerce continues. And: “[…] We urge the EU to look at the progress of the Chinese electric vehicle industry with objectivity, rather than resorting to unilateral economic and trade measures that could hinder or increase the development and operating costs of Chinese electric vehicle products in the European market. […] Efforts to restrict products solely on the basis of their country of origin would run counter to the EU’s WTO commitments.”