Beijing launches probe in response to EU investigation into Chinese subsidies

Beijing says it is kicking off a formal probe into EU practices after the bloc launched an anti-subsidy investigation of a range of Chinese transport and green energy firms.

Issued on: 07/14/2024 – 11:40

2 min

Trade tensions between Beijing and Brussels have spiralled in recent months, with the European Union taking aim at China’s support for its renewable and electric vehicle sectors in particular.

China has denied that its industrial policies are unfair and has repeatedly threatened retaliation to safeguard its companies’ legal rights and interests.

Its commerce ministry said in a lengthy statement on Wednesday it would “conduct a trade and investment barrier investigation into the relevant practices adopted by the EU in its investigation of Chinese enterprises” starting on 10 July.

The Chinese investigation will be completed by January 10, with a possible extension of three months to April. It was requested by China’s Chamber of Commerce for Import and Export of Machinery and Electronic Products.

The complaint mainly deals with “products such as railway locomotives, photovoltaics, wind power and security inspection equipment,” it said.

The ministry added that the probe would examine the EU’s “preliminary reviews, in-depth investigations and surprise inspections of Chinese enterprises”.

Electric cars for export waiting to be loaded onto a cargo ship at Yantai port, in eastern China, on January 10, 2024. AFP – STR

Protectionism

In June, an EU Commission investigation concluded that electric vehicle value chains in China benefit from unfair subsidies, and Brussels has used a new regulation to investigate companies bidding for projects within the Union.

These include a probe into whether Chinese subsidies give wind turbine companies an unfair advantage in the competition for projects in France, Spain, Greece, Romania and Bulgaria.

China accused the European Union of protectionism and “reckless distortion” of the definition of subsidies in response to this investigation.

The EU imposed provisional tariffs on China-made electric vehicles last week over subsidies that it alleges gives an unfair advantage to automakers exporting from China. In response, China has launched an investigation into European pork exports.

Both the EU and the United States are worried that inexpensive Chinese automobiles could overwhelm their domestic producers and lead to factory layoffs.

Chinese auto exports rose about 30 percent in the first six months of this year.

(with newswires)