SOURCE / ECONOMY
Chinese EV firms submit defense against EC’s anti-subsidy preliminary ruling
Divided stances within bloc persist
Published: Jul 25, 2024 07:47 PM
NEV Photo:VCG

NEV Photo:VCG


Three Chinese automakers singled out by the European Commission (EC) in its anti-subsidy probe have sought and received additional hearings, Bloomberg reported on Wednesday, becoming part of the ongoing negotiations between China and the EU on the bloc's decision to impose extra tariffs on China-made electric vehicles (EVs).

Industry insiders and experts said on Thursday that the reported hearings are an important way to safeguard the legitimate rights and interests of Chinese enterprises, as well as an important platform to strengthen communication and exchanges between China and Europe.

As divided stances within the bloc persist, the EU is being urged to listen to multiple views and not to politicize normal economic and trade relations, and it is reminded that healthy competition with China can push European carmakers to continuously improve their technology and product quality.

According to Bloomberg, Zhejiang Geely Holding Group was granted a hearing with the EU in recent days, and BYD is likely to have also had a hearing, as the EC held a hearing on July 19 with SAIC Motor, which was hit with the highest duty among the three, at 37.6 percent.

"Essentially, Chinese original equipment manufacturers made their position heard on supporting the EU Green Transition and commitment to free trade, and they went over some of the details of the investigation, and explained why the brands are unhappy and frustrated with the process and the outcome," a source with knowledge of the matter told the Global Times on Thursday, requesting anonymity as the matter is sensitive.

In a statement it sent to the Global Times on Monday, SAIC said that it had submitted its defense against the anti-subsidy preliminary ruling during the hearing in Brussels, noting that it reserves the right to take further legal measures in response to the EC's unfair preliminary ruling.

The company noted that the EC's investigation involves commercially sensitive information, such as the request for cooperation in providing chemical formulas related to batteries, which is beyond the normal scope of the investigation.

The China Chamber of Commerce for Import and Export of Machinery and Electronic Products pointed out at the hearing that the EC had violated WTO rules during the preliminary ruling, and the subsidy margin calculated in the current preliminary ruling did not reflect the real situation of the sampled enterprises in China.

"The hearings can help Chinese car companies use legal means to protect their rights and interests, as they can directly present their positions and views to the EC, providing detailed evidence and justifications to refute the allegations," Zhang Xiang, secretary general of the International Intelligent Vehicle Engineering Association, told the Global Times on Thursday.

Hearings are also an important platform for strengthening communication and exchanges between China and the EU through in-depth discussions. This will help promote the proper resolution of the EV issue and avoid further escalation of trade disputes, Wang Peng, an associate research fellow at the Beijing Academy of Social Sciences, said on Thursday.

Since the EC decided to impose additional tariffs on Chinese EVs, divided stances within the bloc continue, with Triinu Prits, an official at the Ministry of Foreign Affairs of Estonia, saying on Tuesday in an interview that Estonia is not convinced that raising tariffs is the optimal solution, according to a report by the Xinhua News Agency.

Estonia does not have an automotive industry like Germany, but this does not mean that tariffs would not affect Estonia, Prits noted. "We, too, have subcontractors, importers, car maintenance providers and consumers. All these stakeholders are connected to the EU's single market. Any political and economic measures, or lack thereof, and potential countermeasures, can lead to very unpredictable consequences."

Zhang said that the EU's decision to raise Chinese EV tariffs is a political consideration, a policy to follow the US to suppress China's economy. Opposition comes mainly from EU companies, which have long-established good cooperative relations with China, and the tariff policy will hurt their revenue and their position in international trade.

In the face of internal and external pressure, the EU should adopt an objective, fair and rational attitude to properly handle the relationship between competition and cooperation with China. 

"Healthy competition can promote European car companies to continuously improve their own technical levels and product quality, and cooperation can promote joint research and development and innovation by China and Europe in the field of EVs and other areas," Wang said.

As Italian Prime Minister Giorgia Meloni will pay an official visit to China from July 27 to 31, Wang also urged the European country to play a positive role in consultations between China and the EU.