EU’s anti-subsidy probe into Chinese EVs should be subject to oversight
Published: Oct 30, 2023 09:06 PM
Illustration: Chen Xia/Global Times

Illustration: Chen Xia/Global Times

Despite the EU's unjustified and regrettable anti-subsidy investigation into Chinese electric vehicle (EV) companies, which has sparked strong opposition from the vehicle industry in both China and the EU, Chinese EV brands have maintained a high level of openness and cooperation toward the investigation.

The European Commission recently announced that it had selected BYD, SAIC Motor and Geely as the target companies for its anti-subsidy investigation. Geely responded on Saturday that it will actively cooperate with the EU's investigation. BYD has previously stated that it is not concerned about the European investigation and will share the necessary information with the EU to eliminate any misunderstandings.

The cooperative approach by Chinese companies in response to the EU's abrupt and unreasonable action is rooted in their commitment to honest and lawful operations, which give them confidence in the face of supervision and competition.

Chinese companies should also take decisive actions to safeguard their legitimate rights and interests in the European market against the unfounded investigation. They should be organized by industry associations to collect strong evidence to refute the unfounded allegations from the EU's anti-subsidy investigation. Chinese companies should also strengthen communication and contact with relevant EU companies, jointly responding to the EU's investigation.

Since the European Commission officially launched its investigation, many European auto companies have expressed concerns. German carmaker Porsche executives have hit out at Brussels' probe into Chinese EVs, according to the Financial Times. Lutz Meschke, Porsche's chief financial officer, has stated concerns about a potential tariff war due to the EU's probe, according to the report.

The opposition by the European auto industry to the investigation clearly shows that the investigation is not in line with the European business community's demands. The politicizing of economic and trade issues driven by geopolitical calculations of some European politicians has led to a severe disruption of China-EU economic and trade cooperation for mutual benefit.

The EU's investigation clearly reflects the agenda of politicians who advocate "de-risking" and "decoupling." However, businesses in Europe still hope to promote global economic cooperation and win-win outcomes through market mechanisms, enterprises, local initiatives and civil society, fostering interdependence among industry, supply and value chains.

The EU's investigation is based solely on assumptions regarding alleged subsidy programs. The investigation lacks sufficient evidence and does not comply with relevant WTO rules, therefore its process cannot be fair. China and the international community should closely monitor the progress of the investigation. 

During this process, it is not permissible for the EU to engage in "black box operations" or use the term "anti-subsidy investigations" to collect commercial information from Chinese companies and suppress them.

If the investigation is totally manipulated by European politicians advocating "de-risking" and "decoupling," the consequences could be unimaginably dangerous. If the investigation spirals out of control and politicians who advocate "decoupling" gain the upper hand, the unjust investigation will inevitably lead to corresponding measures from the Chinese side.

The questionnaire sent by the EU includes questions about the supply chain, including the names of suppliers for lithium, cobalt, nickel, battery cells and other products, according to media reports, raising worries about whether the so-called anti-subsidy probe is only focused on subsidies.

If Europe allows this politicized approach to spread from the EV sector to other industries in broader China-Europe trade, the consequences are unpredictable and will cause severe damage to both sides' economic and trade relations. Ultimately, it is not European politicians but the European business community and ordinary consumers who will bear the cost.

The author is a reporter with the Global Times.