China Angered by EU Electric Vehicle Subsidy Investigation: "Violation of WTO Rules"

Half of China's Electric Vehicle Exports Are to the EU
Expansion Efforts Face Obstacles

The European Union (EU) has launched an investigation into subsidies for Chinese electric vehicles, prompting the Chinese government to strongly express its dissatisfaction, stating that this violates World Trade Organization (WTO) regulations. If the EU market, which accounts for about half of new energy vehicle exports, is blocked, the rapidly growing Chinese electric vehicle market, which has seen fast growth over the years, is expected to experience some stagnation.

According to the Ministry of Commerce of China’s website on the 4th, a spokesperson for the ministry expressed "strong dissatisfaction" when asked about the EU Commission's decision to initiate an anti-subsidy investigation into Chinese electric vehicles. The spokesperson stated, "The EU initiated this anti-subsidy investigation based solely on subjective assumptions of so-called subsidy items and threats of harm, without sufficient supporting evidence, which does not comply with the relevant rules of the World Trade Organization (WTO)."

The spokesperson continued, "The EU demanded China to conduct negotiations within a very short period and did not provide valid negotiation materials," emphasizing that "China’s rights have been severely infringed."

The spokesperson for the Ministry of Commerce of China stressed, "At the recently held 10th China-EU High-Level Economic and Trade Dialogue, China clearly stated that the EU’s planned investigation measures are blatant protectionist actions aimed at protecting its own industries under the name of 'fair trade,' seriously disrupting and distorting the global automotive industry and supply chains, and negatively impacting China-EU economic and trade relations."

The spokesperson urged, "China calls on the EU to start from the grand national perspective of 'safeguarding the stability of global industrial and supply chains' and 'a comprehensive and strategic partnership between China and the EU,' and to use trade remedy measures cautiously," adding, "We urge the creation of a fair, non-discriminatory, and predictable market environment." Furthermore, "China will closely monitor the EU’s follow-up investigation procedures and firmly protect the legitimate rights and interests of Chinese companies," the spokesperson added.

The industry also pushed back. The China Association of Automobile Manufacturers (CAAM) issued a statement on the same day, saying, "It is a clear fact that the Chinese electric vehicle market is a fiercely competitive market, not one supported or protected by subsidies," criticizing, "Despite this fact, the EU’s insistence on the investigation constitutes blatant protectionist behavior." They further argued, "This will hinder the global development of the electric vehicle industry and threaten global carbon neutrality."

[Image source=AFP Yonhap News]

In recent years, Chinese electric vehicles have rapidly penetrated the European market, increasing their market share. According to automotive consulting firm Innoveb, as of September, Chinese-made electric vehicles accounted for 8% of new electric vehicle sales in Europe, doubling from 4% in 2021. According to the China Passenger Car Association, last year Chinese automakers exported 545,244 new energy vehicles to Europe, accounting for 48.66% of total new energy vehicle exports.

This content was produced with the assistance of AI translation services.