EV Photo:VCG

Chinese officials and industry representatives on Wednesday lashed out at the European Commission(EC) for its newly released draft definitive findings of the probe against Chinese electric vehicles (EVs), warning that the EU's wrong, protectionist action seriously undermines mutual trust and cooperation between China and the EU as it hurts Chinese firms' confidence in the EU market.

The EC's announcement, which still included hefty tariff rates against Chinese EV makers, also created even more hurdles for the ongoing consultations between the two sides aimed at resolving the dispute, experts said. Experts also drew a stark contrast between China's sincerity in resolving the dispute through talks and the EU's intensifying protectionism and crackdown against Chinese firms and products. 

Meanwhile, China's Ministry of Commerce (MOFCOM) on Wednesday launched a countervailing investigation into certain dairy products from the EU at the request of the Chinese domestic industry. Chinese experts said that the relevant investigation, initiated upon the domestic industry's application and launched according to law and WTO rules, is completely different from the EC's protectionist probe that violates WTO rules.

After the EC disclosed its definitive findings of its so-called anti-subsidy investigation and maintained a maximum tariff rate of 36.3 percent against Chinese EV makers, compared to a 9 percent rate from EVs made by Tesla in China on Tuesday, a number of Chinese ministries and industry groups have slammed the move. 

The EC's so-called investigation is typical trade protectionism and politically-motivated action. It ignores the facts, disrespects WTO rules, goes against the trend of history, disrupts the EU's green transition process and global effort to respond to climate change, and will harm the EU itself as well as others, said Chinese Foreign Ministry spokesperson Mao Ning on Wednesday.

Chinese and EU officials have launched talks in a bid to resolve the dispute. Since the end of June, the two sides have held more than 10 rounds of technical consultations, according to the MOFCOM on Tuesday. 

"The EU's protectionist move will harm China-EU economic and trade cooperation, disrupting the existing consultation and negotiation process between the two sides and setting a bad precedent for resolving similar issues," Cui Hongjian, a professor from the Academy of Regional and Global Governance with Beijing Foreign Studies University, told the Global Times on Wednesday.

Profound negative impact

Beyond the ongoing consultations, the EC's protectionist move will also not only hurt the legitimate interests of relevant parties in the short term, but also have profound negative impact on the broad economic and trade cooperation between China and the EU, Chinese industry representatives and experts said. 

In a statement on Wednesday, the China Association of Automobile Manufacturers (CAAM) said the EC's move has brought great risks and uncertainties to Chinese companies in operating and investing in the EU and has damaged their confidence in EU market. "The CAAM expresses strong dissatisfaction and firm opposition on behalf of the Chinese automobile industry."  

In addition to the EV tariffs, the EU has also intensified crackdown measures against a series of Chinese products and companies under its so-called Foreign Subsidies Regulation (FSR), which has already led to some Chinese firms backing out of projects in the EU. China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME) has recently warned that the EU's increasing protectionism under the FSR could lead to the loss of investment from Chinese firms. 

The CCCME vowed that as it is a defendant in the investigation, it will continue to represent the Chinese EV industry to carry out work in response to the EU's move and resolutely defend the legitimate rights and interests of Chinese EV companies through various means.

SAIC, which has been subjected by the EC to a 36.3 percent provisional tariff rate, said it will "take further legal measures based on the development of the situation and safeguard its own rights and interests," in a statement sent to the Global Times on Wednesday.

Zhang Xiang, secretary general of the International Intelligent Vehicle Engineering Association, said that although the EC's tariffs, once imposed, could lead to fluctuations in the exports of related Chinese EVs in the short term, there is still huge overseas market potential for Chinese EVs. Moreover, the EU will unlikely receive growing Chinese EV investments, "because there are other policy risks," Zhang told the Global Times on Wednesday.