European Commission (EC) Vice-President Valdis Dombrovskis stressed in Beijing on Tuesday the importance of conducting an in-depth investigation to ensure “fair” and “free from distortion” trade with China in the vehicle sector. electrical engineering sector.
At a press conference following a four-day visit to the Asian country, Dombrovskis stressed the need to address the issue of Chinese subsidies for the production of electric vehicles, an issue that the European representative raised in several meetings with Chinese officials, including the vice president. Chinese Prime Minister He Lifeng, who co-chaired the tenth EU-China High-Level Economic and Trade Dialogue with the European Commissioner.
Dombrovskis said the investigation will focus on subsidies given to electric vehicle production in China to ensure they comply with World Trade Organization (WTO) rules and European Union (EU) rules.
The EC Vice-President also emphasized that the public bloc is committed to promoting the electrification of the vehicle fleet and provides subsidies for the purchase of electric vehicles.
However, unlike that provided by China, EU support is “available to all manufacturers”, regardless of their origin, and is not subject to requirements such as sourcing components from local producers.
Dombrovskis noted that the rapid growth of Chinese EV brands’ market share in the EU from 1% to 8% would likely “damage European industry.”
The possibility of providing consumer subsidies only for electric vehicles made in Europe, forcing Chinese brands to localize production, may be questionable from the perspective of the WTO and bilateral trade agreements, Dombrovskis said.
He mentioned that subsidies favoring the purchase of components from local manufacturers and local assembly are “a concern” in the United States and that the EU has no plans to follow such an approach.
European Commission President Ursula von der Leyen this month announced an investigation into the subsidies China provides to its electric vehicle manufacturers.
“Global markets are flooded with cheaper Chinese electric vehicles, their prices kept artificially low by massive government subsidies,” he explained in his State of the Union address.
China then expressed “great concern and strong dissatisfaction” with the EU statement and accused Brussels of “blatant protectionism”.
China’s electric vehicle exports more than doubled (+110%) between January and August, according to the China Association of Automobile Manufacturers.
Almost six million electric vehicles were sold in China last year, more than all other countries in the world combined. The size of the Chinese market and strong government support have led to the rise in popularity of local brands including BYD, NIO or Xpeng.
Chinese dominance extends to the battery industry. Chinese CATL and BYD are the largest manufacturers in the world. Beijing still maintains strict controls over access to vital raw materials, including rare earth elements.
Author: Lusa
Source: CM Jornal
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