Chinese officials urge EU: “Avoid protectionist actions”

Workers complete assembling an electric vehicle (EV) at China's EV start-up Leapmotor in Jinhua, East China's Zhejiang Province on April 1, 2024. The smart EV factory delivered 14,567 new vehicles in March, a yearly increase of 136 percent.
Photo: VCG

Chinese officials and experts also highlighted the deeper repercussions from any EU protectionist actions, given the massive amount of trade between China and the EU in the auto industry. While there is competition, mutual interests are much greater, they stressed, calling on the EU to return to the right path of cooperation, writes ‘The Global Times’.

Chinese Commerce Minister Wang Wentao chaired a roundtable meeting of Chinese-funded enterprises in Spain in Barcelona. While commending Spain's rationality, pragmatism and friendliness toward China, Wang also criticized the EU's recent move of citing various false claims such as "overcapacity" and discriminatorily using various tools such as trade remedies to launch probes into a slew of Chinese products, including EVs, locomotives and solar panels.

"This has led to the continuous rise in the risk of China-EU economic and trade frictions," Wang said, according to a statement from the Ministry of Commerce (MOFCOM). "We hope to properly handle economic and trade frictions through dialogue and consultation, accommodate the legitimate concerns of both sides, and avoid an out-of-control escalation of trade frictions."

The Chinese side has noticed that French, German and European Union officials have repeatedly stated their intention to avoid a "trade war" and support a multilateral trading system based on rules and a fair competitive environment, Wang said.

Wang further warned that if the EU's actions fail to match its leaders' words and if EU continues to suppress Chinese companies, China will take all necessary measures to firmly safeguard the legitimate interests of Chinese companies.

On Sunday, Wang visited a factory of the joint venture between Chinese manufacturer Chery Automobile and Spain's Ebro-EV Motors, where he stressed that while there is competition between China and the EU in the EV sector, cooperation is even greater. "We hope that the EU will abandon protectionism and return to the right path of dialogue and cooperation."

Also Ling Ji, a vice minister of MOFCOM, chaired a symposium on Chinese-funded enterprises in the Greek capital Athens. Ling urged Chinese firms to fully recognize the damage of the EU's protectionist actions and said that China will not allow the EU to undermine China-Greece cooperation.

"We hope that the EU side will match its words and deeds and will not do anything that may cause trade frictions to escalate out of control. If the EU side insists on going its own way and continues to suppress Chinese companies, China has the right and sufficient ability to take measures to defend the legitimate interests of Chinese companies," Ling said.

As the EU is reportedly mulling potential actions against Chinese EVs, including tariff measures, the clear warnings from the Chinese officials are imperative for letting Brussels know the profound repercussions of its protectionist moves, Chinese experts said.

While it remains to be seen what actions the EU will announce and when, Chinese experts said that given some EU politicians' growing protectionism and hostility toward China, as well as pressure from the US, Brussels could take some sort of protectionist actions against Chinese EVs, including possible provision tariffs. And given the massive interests at stake, China will resolutely take countermeasures to protect its own interests, they noted.

China must be prepared in advance. If the EU takes protectionist actions, China will definitely take countermeasures, Gao said.

Experts also emphasized that the EU's move would have much greater repercussions than the US' previously announced tariff hikes on Chinese EVs, as China exports a much larger quantity of EVs to the EU, compared to the very small number of exports to the US.

If the EU imposes a 20-percent tariff on Chinese EVs, it could cost China nearly $4 billion in trade with the bloc, with the number of Chinese EVs imported to the EU expected to drop by a quarter, or some 125,000 cars, Bloomberg reported on Friday, citing an analysis from Germany's Kiel Institute for the World Economy.

The Chinese and EU auto industries are closely intertwined, with many EU automakers also investing heavily in the Chinese market, and any potential Chinese countermeasures could also have a great impact on the EU, experts noted.

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