Chinese auto sector accuses European Commission of ‘distorting reality’

The China Association of Automobile Manufacturers accused the European Commission on Wednesday of “distorting the reality” of the Chinese auto sector after the European body adjusted its proposal to raise taxes on electric vehicles from the country.

The agency, quoted by state television CCTV, said the punitive customs duties imposed by the European Commission pose a “significant risk to the operations and investments of Chinese companies” in the European market.

The same organisation expressed “strong dissatisfaction”, warning that the decision could “undermine the confidence” of Chinese companies in their activities in Europe, as well as in “future investments” in the region.

The European Commission has cut punitive duties on Chinese electric vehicle imports to 36.3% from a maximum of 37.6% proposed in July. However, it has slightly increased fees for companies not included in the Brussels investigation but cooperating with it.

The China Association of Automobile Manufacturers said the taxes could “negatively affect” the development of the European automobile sector as well as “employment opportunities” in the region. The agency also said the measure jeopardized efforts to achieve “green and sustainable development.”

Chinese manufacturers have called on the European bloc to focus on “maintaining a fair trading environment” and “ensuring the security of the global supply chain” of the auto industry.

Last July, Brussels proposed introducing these taxes on electric cars from China, after a months-long investigation concluded that their penetration into the European market was harming EU manufacturers.

According to the President of the European Commission, Ursula von der Leyenwhich announced the investigation eleven months ago, global markets are flooded with “Chinese electric vehicles that are kept artificially low by huge government subsidies.”

An additional maximum tax of 36.3% to combat this commercial practice, which Brussels considers “unfair”, which will be added to the usual 10% tax on Chinese electric vehicles, will be applied to the Chinese company SAIC and all companies that did not cooperate with the investigation.

Other companies included in the investigation include BYD and Giliwill be subject to penalty rates of 17% and 19.3% respectively. These figures are slightly lower than those proposed in July (17.4% and 19.9%) after adjustments to the calculations at the stage of consultations with companies.

Chinese manufacturers that cooperated with the investigation but were not included in it would be subject to a rate of 21.3%, slightly higher than the 20.8% proposed in the first proposal.

China filed a complaint with the World Trade Organization (WTO) this month against the European measures and has responded in recent weeks with “anti-dumping” investigations into European pork.