EV Photo:VCG

China on Thursday called on the EU to terminate its so-called anti-subsidy investigation into Chinese electric vehicles (EVs) so as to avoid harming overall bilateral cooperation, while vowing to resolutely safeguard Chinese interests if Brussels moves ahead with protectionist measures. 

The comments from the Chinese Ministry of Commerce (MOFCOM) and the Ministry of Foreign Affairs marked an escalated response to EU's apparent crackdown on Chinese EVs. Only cooperation, rather than a trade conflict, is in the interest of the EU, Chinese experts warned on Thursday. 

According to Reuters, the EU will postpone its decision on potential tariffs on Chinese EVs until after the European Parliament election on June 9. The EU was previously expected to announce the provisional tariffs on June 5, but the new deadline has been moved to June 10, Reuters reported on Tuesday, citing an unidentified source. 

Asked to comment on the reported postponement at a press briefing on Thursday, Mao Ning, a Foreign Ministry spokesperson, said that China has stated its position multiple times on the EU's anti-subsidy investigation into the imports of EVs from China.

"Let me just say that the nature of the investigation is protectionist. There are many practices in the investigation that are simply unjustifiable and inconsistent with the rules and the EU's accusation of China's so-called subsidization is untenable," Mao said.

"China urges the EU to stop the investigation as soon as possible so as not to disrupt China-EU economic and trade cooperation and the stability of industrial and supply chains. If the EU insists on continuing with the investigation, China will not sit back and watch. We will take every necessary measure to firmly safeguard our lawful rights and interests," Mao further noted.

Also on Thursday, when asked whether or not China will negotiate with EU members to lift the EU's authority to impose tariffs on Chinese exports, if the European Commission rules that China's EV sector has received unfair subsidies, He Yadong, a spokesperson for the MOFCOM, vowed to take firm measures to defend Chinese firms' legitimate rights and interests.

Noting that some EU members and the bloc's auto industry have strongly urged the EU not to take protectionist trade measures, in order to avoid an impact on overall China-EU economic and trade cooperation, he urged the EU side to take into account the concerns of all parties, properly resolve trade frictions through dialogue and consultation with the Chinese side, and accommodate the legitimate concerns of both sides.

"China will closely follow the progress of the investigation and will resolutely take measures to defend the legitimate rights and interests of Chinese companies," the spokesperson said. 

Bai Ming, a researcher at the Chinese Academy of International Trade and Economic Cooperation, said that the EU's back-and-forth with the deadline for its decision and refusal to end the probe despite opposition from all sides, including EU businesses, laid bare the fact that the so-called probe is nothing but pure protectionism. 

"The opposition from many European businesses to this investigation shows that the so-called countervailing measures are just an excuse and are unpopular. If the EU moves forward with such an unpopular move, it will only harm the interests of all parties," Bai told the Global Times on Thursday. 

EU businesses and industry bodies, including Germany's Association of the Automotive Industry, have opposed the probe, with German car industry experts warning that such a move will risk harming EU's auto industry, instead of protecting it, according to the Xinhua News Agency. 

"The development and growth of the EV industries in both the EU and China only lie in cooperation, rather than conflict," Huo Jianguo, a vice chairman of the China Society for World Trade Organization Studies in Beijing, told the Global Times on Thursday.

Huo noted that Chinese businesses are not treated fairly and objectively during the EU's investigation, which does not comply with WTO rules. 

As reports in some Western media outlets have repeatedly suggested that the EU will highly likely impose provisional tariffs on Chinese EVs, experts said that countermeasures from China are expected, as China moves to protect its own legitimate rights and interests. 

Some Chinese experts have called for raising the temporary tariff rate on imported vehicles with larger engines, though they stressed the difference between such a move and protectionist tariffs imposed by the US.

A Chinese auto industry insider told the Global Times that China should consider raising the temporary tariff rate on imported cars with engines larger than 2.5 liters, in order to reduce imports as part of the country's broader efforts to cut emissions and promote the green development of the auto industry. Such a move would have a major impact on car imports from the EU, as well as those from the US.

The insider said that such a move would be in line with WTO rules and different from protectionist moves by certain countries and regions. 

In another exclusive report, the Global Times learned from a business insider that relevant industries are preparing evidence, as they plan to apply to competent authorities to launch an anti-dumping investigation into imports of certain pork products from the EU.