Beijing launches investigation in response to EU probe…

A worker assembles an electric car at a factory in Qingzhou, China, October 31, 2015. The EU accuses China of unfairly subsidizing its huge electric vehicle industry. © REUTERS/China Daily

Beijing has announced a formal investigation into EU practices after the bloc launched an anti-subsidy probe into a series of Chinese transport and green energy companies.

Trade tensions between Beijing and Brussels have escalated in recent months, with the European Union targeting China’s support for its renewable energy and electric vehicle sectors in particular.

China has denied that its industrial policies are unfair and has repeatedly threatened retaliatory measures to protect the legal rights and interests of its companies.

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

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

The complaint mainly concerns “products such as railway locomotives, photovoltaic panels, wind energy and safety inspection equipment,” it said.

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

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

Protectionism

In June, a European Commission investigation found that China’s electric vehicle value chains benefited from unfair subsidies, and Brussels used a new regulation to investigate companies bidding for projects within the bloc.

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

In response to the investigation, China accused the European Union of protectionism and “recklessly distorting” the definition of subsidies.

Last week, the EU imposed provisional tariffs on Chinese-made electric vehicles over subsidies it says give an unfair advantage to automakers exporting from China. In response, China launched an investigation into European pork exports.

The EU and the US fear that cheap Chinese cars will overwhelm their domestic producers and lead to layoffs at factories.

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

(with dispatches)