China criticizes the European Union's investigation into Beijing's support for electric cars

September 17, 2023 (Euronews) China has criticized the European Union over its planned investigation into subsidies provided to Chinese electric car manufacturers, calling it an act of protectionism.

The EU's "protectionist behavior" would "seriously disrupt and distort the global auto manufacturing chain," Ministry of Commerce spokesperson He Yadong said at a press conference Thursday afternoon.

Beijing warned that the investigation would have a "negative impact" on trade relations between the EU and Beijing.

A statement from the Chinese Ministry of Commerce said, "The Chinese side believes that the investigation measures proposed by the European Union aim to protect its industry under the banner of 'fair competition'... and will have a negative impact on economic and trade relations between China and the European Union."

In its statement, the ministry considered the investigation to be "an explicit protectionist measure that will severely disrupt the global supply chain for the automotive industry, including in the European Union."

The European Union's chief executive said on Wednesday that the EU will launch an investigation into Chinese subsidies to electric vehicle manufacturers, amid growing concerns that the aid is harming European companies.

"Global markets are now flooded with cheap Chinese electric cars, their prices kept artificially low by massive government subsidies... This is distorting our market," European Commission President Ursula von der Leyen told members of the European Parliament in Strasbourg, France. Von der Leyen did not provide details about the investigation.

China's leaders have helped make the country the world's largest electric vehicle market by investing billions of dollars in subsidies to gain an early lead in what is seen as a promising industry.

Global automakers face increasing competition in their home markets from Chinese brands that are gaining market share.

Electric vehicle manufacturers, including BYD Auto and Geely Group's Zeekr unit, began marketing their vehicles this year in Japan and Europe. Geely Group also owns Swedish carmaker Volvo Cars and its all-electric luxury brand, Polestar.

"China will pay close attention to protectionism in Europe and will resolutely protect the legitimate rights and interests of Chinese companies," said He Yadong, a spokesperson for the Ministry of Commerce. "What I want to emphasize is that the investigation the EU intends to take is to protect its own industry in the name of fair competition."

This is blatant protectionist behavior, and it will seriously disrupt and distort the global automotive manufacturing and supply chain, including the European Union. It will have a negative impact on economic and trade relations between China and the European Union.