(Source: China-Singapore Jingwei 2024-6-15)

China-Singapore Jingwei, June 15th. Question: Why is the EU’s anti-subsidy investigation against China met with internal and external opposition?

On June 12, the European Commission released the preliminary results of its anti-subsidy investigation into electric vehicles from China, and plans to impose temporary countervailing duties ranging from 17.4% to 38.1% on imported electric vehicles from China. Three sampled Chinese electric vehicle companies, BYD, Geely Automobile and SAIC Motor, plan to impose additional tariffs of 17.4%, 20% and 38.1% respectively; other manufacturers will be levied a 21% tariff; separate tax rates may apply to Tesla cars imported from China. According to the investigation procedures, the European Commission will issue a preliminary ruling before July 4, 2024, to decide whether to impose temporary countervailing duties on electric vehicles imported from China.

Is the EU countervailing investigation in violation of regulations?

China’s Ministry of Commerce, China Association of Automobile Manufacturers and others have expressed strong opposition to the European Commission’s preliminary ruling. A spokesman for the Ministry of Commerce criticized the European Commission for "disregarding WTO rules", "artificially constructing and exaggerating so-called 'subsidy' projects, and abusing the 'available facts' rule", which is a "naked act of protectionism."

From a procedural point of view, whether the European Commission has initiated a countervailing investigation in violation of regulations mainly depends on whether it has gone through an announcement process, whether it has solicited the opinions of some relevant Chinese companies during the investigation, whether it has fully collected information, etc.

China’s Ministry of Commerce criticized it for abusing the “available facts” rule, mainly because of its insufficient investigation. The European Commission should conduct on-the-spot investigations on Chinese companies to see if they have received subsidies, instead of just collecting some materials and ruling that they have subsidies.

In addition, in fact, China’s new energy vehicle purchase subsidy policy will expire at the end of 2022. Europe is still implementing large purchase subsidies. For example, Germany provides different subsidies for pure electric vehicles based on the selling price, with the highest subsidy being 4,500 euros for models under 40,000 euros. In 2023, the car purchase subsidy for ordinary French consumers will be 5,000 euros, and the electric vehicle subsidy for low-income families will increase to 7,000 euros. On February 1, 2023, the European Commission also proposed increasing state subsidies.

EU countervailing investigation is opposed by member states and companies

Moreover, this investigation was not initiated by the EU industry, but was initiated by the European Commission ex officio based on the threat of damage. Therefore, the European Commission's investigation has many opponents even within the EU member states. Government officials from Germany and Hungary have publicly expressed their opposition and concerns, believing that the EU should support w88 liberalization. Even German car companies such as BMW, Volkswagen, and Mercedes-Benz expressed their opposition immediately.

The reason why they reacted like this just shows that China's new energy vehicle exports have not caused harm to the EU and are mutually beneficial to both parties. From a large perspective, dealing with climate change is an important issue that countries around the world need to face. The EU has proposed to make Europe the first in the world to achieve "carbon neutrality" by 2050. To achieve this goal, replacing fuel vehicles with electric vehicles has become an inevitable choice. At present, the electric vehicles produced by the EU are not only relatively backward in technology, but also costly. This is obviously not conducive to the promotion and replacement of electric vehicles. The electric vehicles produced in China are cheap, high-quality, and well meet the needs of the EU.

Logically speaking, the European Commission’s approach is meaningless and does not benefit both parties. At present, investment and w88 between China and Europe have become closer and closer. Many multinational companies and automobile companies in the EU have huge investments in China. Therefore, companies do not want the economic and w88 relations between China and Europe to deteriorate. Moreover, many of the cars China exports to the EU are produced in China by European companies.

Therefore, it is suggested that both sides should try their best to cooperate, find a convergence of interests, strengthen the mutual flow of products, technology, and capital between China and Europe, and achieve complementary advantages. From the perspective of addressing climate change, the EU should actually expand the market for green products as much as possible, including the market for electric vehicles. Only in this way can the cost of climate governance be reduced more quickly, making green electric vehicles more affordable and affordable for ordinary people, and allowing electric vehicles, a new product, to play a greater role in the process of combating climate change. (China-Singapore Jingwei APP)

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