TMTPost -- China is calling on the European Union to recognize the advantage in Chinese electric vehicle (EV) sector as a new probe into the bloc’s anti-subsidy practices intensifies risks of Beijing’s retaliation.

Credit：Xinhua News Agency

"It is hoped that the European side will face up to the facts that China's competitive advantage in EVs does not come from subsidies, China-EU auto industry cooperation is conducive to shared development, and the EU industry opposes trade protectionist measures," said He Yongqian, a spokesperson at the Ministry of Commerce of China (MOFCOM) , at a press conference on Thursday.

He urged the EU to make reasonable and objective decisions based on facts and rules. He said facts and rules are the two major "pillars" for ongoing consultations between China and the EU regarding the latter's anti-subsidy probe into Chinese EVs. "The facts should be objective and mutually recognized by both parties, rather than unilaterally determined," He said.

He’s urging came on heels of his ministry’s latest move targeting the EU’s tariffs. The European Commission announced last Thursday it imposed provisional countervailing duties of up to 37.6% , on top of the ordinary BEV import duty of 10%, on imports of battery electric vehicles (BEVs) from China from Friday. The executive arm of the EU concluded through an anti-subsidy investigation that the BEV value chain in China benefits from unfair subsidization, which is causing a threat of economic injury to EU BEV producers.

China's Ministry of Commerce said on Wednesday that it launched a trade and investment barrier investigation into the relevant practices adopted by the EU in the bloc's foreign subsidy investigations. The investigation was initiated at the request of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, whose qualifications and request documents have been verified, according to a statement of the ministry.

Under its foreign subsidies regulation, the EU has conducted preliminary, in-depth and raid investigations into Chinese companies involved in sectors such as locomotives, photovoltaics, wind power and security check equipment. The EU's practices in such investigations will be examined, said the MOFCOM.

In order to gather information from all stakeholders, the MOFCOM will conduct surveys, hearings and on-site activities during its investigation. While the probe is set to conclude by January 10, 2025, it could be extended to April 10 under special circumstances, the ministry said. According to rules of the probe, Chinese authorties could conduct bilateral talks, start a multilateral dispute settlement and take other appropriate measures if they determine an EU measure to be illegal. And steps they could take include a recommendation to introduce retaliatory measure.

The recent probe is the latest sign that China is accelerating preparation of possible countermeasure on heels of the European Union’s decision to impose new tariffs on Chinese-made. China signaled last month it can slap with additional tariffs on cars and brandy import duties, anti-dumping measures against EU pork and dairy imports amid EV tariff threat.

MOFCOM said last Friday that it will hold an anti-dumping hearing on brandy imported from the EU on July 18, 2024.The hearing will be about industrial damage, cause and effect, and public interest in the anti-dumping probe of related brandy products.

China started an anti-dumping investigation into brandy imported from the EU on Jan. 5, 2024. The probe would look at EU-produced brandy in containers holding less than 200 liters imported from Oct. 1, 2022 to Sept. 30, 2023, MOFCOM has said. It would also investigate any damage done to the Chinese brandy industry from Jan. 1, 2019 to Sept. 30, 2023. The probe is expected to end before Jan. 5, 2025, but may be extended for half a year under special circumstances, according to the ministry.