Mobility Portal, Spain
Date: April 9, 2024
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By Mobility Portal

China assures they don’t rely on subsidies “to gain competitive advantage” in the EU’s EV market

Chinese Commerce Minister Wang Wentao dismissed allegations of excess capacity in China's electric vehicle industry during a roundtable meeting with Chinese EV companies in Paris.
Wang Wentao-china EV
Wang Wentao, China's Commerce Minister.

Wang Wentao, China’s Commerce Minister, embarked on a European tour by addressing concerns from top carmakers regarding accusations of excess electric vehicle (EV) capacity.

He met with representatives from 10 Chinese EV firms, including BYD, CATL, and Geely, in Paris, ahead of discussions on a European investigation into alleged unfair subsidies benefiting Chinese EVs.

Wang emphasized that Chinese EV manufacturers have achieved their competitive edge through innovation and efficient supply chains, rather than relying on subsidies.

China‘s electric vehicle companies rely on continuous technological innovation, perfect production and supply chain system and full market competition for rapid development, not relying on subsidies to gain competitive advantage,” Wang said.

He reiterated Beijing’s commitment to supporting firms in protecting their legitimate rights and interests.

The ongoing European Commission investigation, initiated last year, aims to assess whether Chinese EVs have unfairly benefited from subsidies and could result in tariffs on Chinese exports.

Despite China’s lead in developing cost-effective EV models, the investigation is scheduled to conclude by November, with the possibility of provisional duties being imposed earlier.

During his visit, Wang also met with Renault‘s CEO, Luca de Meo, who emphasized the importance of reciprocity and urged Chinese companies to bring more of their supply chain to continental Europe.

De Meo suggested joint research and development projects for future technologies, such as next-generation batteries.

Chinese officials have defended their industries against criticism, highlighting the innovation by their local companies and arguing against trade restrictions that could hinder global efforts to achieve climate goals.

French Finance Minister Bruno Le Maire is expected to engage in discussions with Wang during his visit, while U.S. Treasury Secretary Janet Yellen has warned China against damaging new industries with excessive imports.

French Minister proposes favoring EU producers

Le Maire has suggested that the EU should consider implementing rules that prioritize European producers in public procurement contracts.

This proposal comes in response to competition from China and the United States, where labor and environmental standards are perceived to be lower than in the EU.

During a joint news conference with German and Italian counterparts, Le Maire proposed reserving a portion of public procurement contracts for products made in Europe or including a percentage of European products in contracts, along with imposing stringent quality or environmental standards.

“I wonder whether we should not reserve a share of public procurement contracts for Made-in-Europe products or including shares of European products in the procurement contracts of 40%, 50% or 60%, or impose the strictest quality or environment standards,” Le Maire said.

These measures aim to address rising protectionism and ensure a level playing field for European producers.

While German Economy Minister Robert Habeck and Italy’s Industry Minister Adolfo Urso supported Le Maire’s proposal, Urso emphasized the importance of complying with World Trade Organization rules. Habeck stressed the necessity of creating a fair environment for European producers.

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