Is China playing by the rules when it comes to its electric auto industry? The European Commission wants to get to the bottom of this, which is why it will launch an investigation into the public subsidies from which Chinese manufacturers benefit.
Ursula von der Leyen, President of the European Commission, announced during her State of the Union speech that Brussels was going to investigate the “ massive public subsidies » from which Chinese electric car manufacturers benefit. She asserted that global – and therefore European – markets were “ flooded » cheap electric cars from China, « whose price is kept artificially low » thanks to government subsidies.
Suspicions of anti-competitive practices
She denounced a “ market distortion », recalling that if Europe was “ open to competition “, she did not want a race to the bottom. It is undeniable that Chinese manufacturers are seeking to establish themselves in Europe with aggressive commercial methods.
Member States are looking for solutions to this rise in power; we recently saw the French government working on the possibility of eliminating the ecological bonus for Chinese models. France, like Germany, very favorably welcomed the opening of this investigation.
Read Emmanuel Macron attacks Chinese electric cars
And this is also the case for European car manufacturers. ACEA welcomes the awareness of the Commission, which “ recognizes the increasingly asymmetrical situation our industry faces “. For the Association of European Automobile Manufacturers, it is very clear that there is a distortion of competition in the sector.
“Global markets are now flooded with cheaper Chinese electric cars.
And their price is kept artificially low by huge state subsidies.
— European Commission (@EU_Commission) September 13, 2023
The EU wants to spare its automobile industry the same fate as the solar panel sector: “ We have not forgotten how much our solar industry has suffered from China’s unfair trade practices “, said Ursula von der Leyen. The European investigation will have to determine whether these subsidies are contrary to the rules of healthy competition in the automobile sector.
However, China does not intend to stand by and do nothing. Beijing thus deplored “ the negative impact » of this investigation into relations between China and the EU, considering in fact that it is a protectionist measure. The country will be able to argue that it has taken a step ahead of Europe, particularly in terms of batteries.
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