EV Photo:VCG

China's Ministry of Commerce (MOFCOM) on Tuesday criticized the European Commission (EC)'s draft definitive findings of its so-called anti-subsidy investigation into Chinese electric vehicles (EVs), saying that China firmly opposes the EU's wrong move and vowing to take all necessary measures to safeguard Chinese businesses' legitimate rights and interests.

Also, China's main business group in the EU on Tuesday harshly criticized the European Commission's draft definitive findings of its so-called anti-subsidy investigation into Chinese electric vehicles, saying the protectionist move lacks sufficient evidence and urging Brussels to cancel the so-called countervailing duties. 

Coming as Chinese and EU officials have launched consultations over the EC's planned additional tariffs against Chinese EVs, the disclosure of the definitive findings further highlighted the EU's clear discrimination against Chinese EVs, and further complicated the ongoing talks, Chinese experts said.  

In a statement on Tuesday, a spokesperson for the MOFCOM said that the EU's investigation violated the principles of objectivity, fairness, non-discrimination and transparency, and did not conform to WTO rules.

"The definitive findings disclosure released by the EU side this time did not fully absorb China's opinions, but still insisted on wrong practices, ruled for high tariff rates, and also used samples to treat different types of enterprises in China, distorting the results of the investigation. 

"The final disclosure is based on the 'facts' unilaterally determined by the EU side, rather than the facts recognized by both parties, which China firmly opposes and is highly concerned about," the spokesperson said.

The official also said that since the end of June, the two sides have held more than 10 rounds of technical consultations, during which the Chinese side showed utmost sincerity.

Chinese officials have repeatedly urged the EU side to address the dispute through consultations, and pledged to take all necessary measures to safeguard the legitimate rights and interests of Chinese companies. 

"It is hoped that the EU will meet China halfway, accelerate the exploration of appropriate solutions in a rational and pragmatic manner, and take practical actions to avoid the escalation of trade friction. China will take all necessary measures to resolutely defend the legitimate rights and interests of Chinese enterprises," the spokesperson said.

In a press release on Tuesday, the EC said that it has disclosed to interested parties, including Chinese companies and EU member countries, its definitive findings in the anti-subsidy investigation. 

Notably, the EC adjusted certain tariff rates for companies. Among the biggest adjustments was a significant reduction of the rate for US-based Tesla - from the 20.8 percent it indicated in July to the current rate of 9 percent, according to Reuters. 

Overall, the EC reaffirmed its previous findings that Chinese EV production had benefited from extensive subsidies and proposed final duties of up to 36.3 percent, compared with the previous maximum provisional tariff of 37.6 percent, Reuters reported. The EC also slightly lowered tariffs on Chinese firms, including BYD, Geely and SAIC. 

The EC's so-called definitive findings immediately drew criticism from the China Chamber of Commerce to the EU (CCCEU) on Tuesday.

"The chamber expresses strong dissatisfaction and firm opposition to the EC's protectionist approach," the CCCEU said in a statement sent to the Global Times on Tuesday. 

The chamber further stressed that development of the European EV industry, along with the EC's own report, shows that there is not sufficient evidence to demonstrate that China's EVs cause substantial material injury in the EU market. The finding of the threat of injury was based merely on allegations, conjecture and remote possibilities, the CCCEU said. 

The chamber said that the unfair, protectionist move by the EU will ultimately weaken the resilience of the European EV industry, disrupt the level playing field, and undermine the EU's own green transition. 

"Moreover, it will exacerbate trade tensions between China and the EU, sending a profoundly negative signal to global cooperation and green development," it said.

Chinese experts said that the EC's move is clearly discriminatory against Chinese EV companies, as they are facing the highest tariff rates.

"I think the EU definitely adopted a relatively different standard for global automakers and Chinese ones," Cui Dongshu, secretary-general of the China Passenger Car Association, told the Global Times on Tuesday. 

Cui also said that the EU has taken "overly protectionist" measures against Chinese EVs that have gained a competitive edge. "The EU took unreasonable measures against Chinese EVs, mainly to inhibit the development of Chinese EVs in the EU and protect its backward industry. This is unfair treatment for Chinese EVs and completely wrong."

Chinese officials have repeatedly stated that the EU's so-called anti-subsidy investigation into Chinese EVs was flawed and discriminatory, in what appears to be a deliberate attempt to start a bruising trade row with China. Among the long list of flaws were the lack of any legal basis for such a probe, and unfair and opaque practices during the investigation process, including seeking sensitive trade information from Chinese companies, according to industry insiders. 

In comparison, China has shown the utmost sincerity in pursuing dialogue with the EU to properly resolve the dispute. However, experts noted that if the EU continues with its wrong and protectionist approach, China will have to take all necessary measures to protect the rights and interests of Chinese firms, as officials have pledged.

In one of the latest actions, China on August 10 announced that it initiated dispute settlement proceedings against the EU's provisional anti-subsidy measures against Chinese EVs at the WTO. In announcing the move, the Chinese Ministry of Commerce said that the findings of the EU's preliminary ruling lack a factual and legal basis and seriously violate WTO rules.

Cui said that the EC's so-called anti-subsidy investigation against Chinese EVs is in itself a distortion of the facts, pointing to the market-oriented operations of the Chinese EV industry. 

"The CCCEU calls on EU institutions and EU member states to listen to the voices of the automotive sectors in both regions and to objectively and rationally assess the development of the manufacturing of electric vehicles in China," the CCCEU said on Tuesday, calling on the EC to cancel the countervailing duties on Chinese EVs.