BYD Auto's booth is seen at the 49th Qilu International Auto Show on April 11, 2024 in Jinan, East China's Shandong Province. On the previous day, the China Association of Automobile Manufacturers released the first-quarter sales and production data. Production totaled 6.606 million vehicles, up 6.4 percent year-on-year, with sales up 4.6 percent to 6.72 million. Photo: VCG

South Korea's so-called possible anti-subsidy investigation into Chinese electric vehicles (EVs) does not stand a ground due to Chinese EVs' relatively small market share in the country, said a Chinese observer, noting that is more equate to a form of "gesture declaration" by the South Korean government under the sway of the trade protectionism of the US and the EU and their wrongdoings of politicizing economic matters.

The South Korean government said it could study the possibility of a plan to impose anti-subsidy tariffs on Chinese electric vehicle (EV) imports, drawing on the experience of the EU, Yonhap News Agency reported. The comments have been made ahead of the planned debut of Chinese EV manufacture BYD's passenger EVs in South Korea in January.

Though it is hard to know whether a real probe will take place, analysts have also warned against the dire consequence of the potential move, urging Seoul to abandon the misguided ideas and take pragmatic actions to consolidate the economic cooperation momentum between the two countries, which has been improving and showing more advancement. 

An official from South Korea's Ministry of Trade, Industry, and Energy was quoted as saying in the Yonhap report that if South Korean enterprises file an application for an anti-subsidy investigation, the ministry would conduct a fair and transparent investigation in accordance with subsidy agreements and the Customs Act. 

While outlining the recent tariff measures such as the US and EU had taken against Chinese EVs, the official also claimed that the South Korean government has "formulated standard procedural guidelines for investigation," the report said. And if relevant companies file an application, relevant South Korean authorities could conduct investigation based on the guidelines.

When asked whether the government is considering imposing tariffs as BYD prepares to enter the South Korean passenger EVs market, the official said that the EU has imposed a final anti-subsidy tariff of over 10 percent on Chinese EVs, and South Korea's Customs Act also includes provisions for imposing anti-subsidy duties, according to the Yonhap report.

BYD has not responded to the interview request of the Global Times as of press time. The company announced in December that it has completed the selection of six dealer partners in South Korea and will launch operation in January next year, according to the Yonhap report.

"What the South Korean government wants to do could be misguided by the reckless unilateral trade restrictions against Chinese imports by the US and Europe, which clearly violates WTO rules and market principles," Lü Chao, an expert on the Korean Peninsula issue at the Liaoning Academy of Social Sciences, told the Global Times on Friday. 

The reported rhetoric of South Korean official is likely to be a "gesture declaration" without substantial impact on Chinese industries, showing that Seoul opts to follow the US and the EU's ill-intended approach to protect domestic auto industry, rather than the correct way of fostering innovation and mutual development through market competition, Wu Shuocheng, a veteran automobile industry analyst, told the Global Times on Friday.

Chinese auto exports to South Korea - a traditional major auto producer - have jumped significantly this year. The share of China's automobile now accounted for 15 percent of the South Korean imports market, said a report by South Korea-based Asia Daily in November. 

The anti-subsidy investigation, even if carried out, is not substantiated by facts, considering that China automakers' market share in South Korea is still small, so that the premise of anti-subsidy investigation - the material injury to the South Korean industries - does not exist, Wu said. Meanwhile, he pointed out that the global competitiveness of Chinese EVs lies in its cost advantage across the whole supply chain, rather than what some countries claimed is built on "government subsidies."

According to the Yonhap report, some also suggest the likelihood of an actual probe into Chinese EVs remains low, as the investigation could only be initiated if any South Korean companies file a complaint. 

Lü stressed that the reported possibility of an anti-subsidy probe against Chinese EVs comes as the bilateral trade and economic relations between China and South Korea show signs of improvement and positive developments. 

"South Korea is an export-oriented market, and China is one of South Korea's largest export markets. If South Korea follows the unilateral trade approach of the US and the EU, it would cloud bilateral economic ties between China and South Korea, while also risking damaging the interests of South Korean companies and residents," Lü warned.