China's Ministry of Commerce (MOFCOM) slammed the EU's planned probe into Chinese wind turbines, saying it distorts the definition of subsidies, lacks transparency, and is protectionist behavior that harms fair competition. The EU announced it would launch a subsidy investigation into Chinese wind turbine suppliers in several EU countries. The move drew deep concerns from Chinese officials, business groups and experts. They said that it showed the rising tendency of protectionism in the EU. They urged the bloc to abandon protectionist practices and return to the path of win-win cooperation. The probe would be the fourth investigation conducted by the EU under its Foreign Subsidies Regulation within two months, with a clear aim to target China's new-energy companies. It will damage mutually beneficial cooperation between China and Europe, said a MOFCOM official in a meeting in Brussels with Martin Lukas, Director General of the Trade Department of the European Commission. China urges the EU to immediately end its protectionist action and rectify the incorrect move, the Chinese official said.
MOFCOM Spokesperson He Yadong also denounced the investigation. He said that it clearly violates the principles of free trade. He emphasized that it is seriously disrupting normal cooperation between Chinese and European industries and is a typical example of protectionism. MOFCOM also hit back at an updated report by the EU that distorts China's policies, market environment and economic system. The EU report covers various industries in China, including telecoms, semiconductors, railways, renewable energy and new-energy vehicles (NEVs). It is in line with the EU's recent investigations into Chinese NEVs and the latest anti-subsidy probe into Chinese wind turbines.
Protectionist moves by the EU have raised strong concerns in the business world. “We strongly oppose any increase in tariffs on electric vehicles in China, and we look forward to continuing production and maintaining our market presence in China,” Maximilian Butek, Executive Director at the German Chamber of Commerce in China (Shanghai), told a press conference. Butek noted that Chinese NEVs account for only about 1.5% of the market in Europe, which is much less than the market share of German NEVs in China.
Chinese analysts said that the real aim of Western politicians and media outlets that hype the subsidies and “overcapacity” narrative seems to be the protection of their own clean-energy industries. “Accusations of subsidies and overcapacity in China's new-energy products by Europe carry a strong protectionist tone,” Cui Hongjian, Professor at the Academy of Regional and Global Governance at Beijing Foreign Studies University, told the Global Times. The notion of “overcapacity” should be determined by market data, rather than used as an excuse for trade protectionism. Europe's long-term competitiveness needs to be built on innovation, and excluding Chinese products does not benefit anyone, Cui said.
Helga Zepp-LaRouche, Founder of Germany-based political and economic think tank the Schiller Institute, told the Global Times that the claim of “overcapacity” is just the latest attempt to find a justification for prioritizing speculative gains over basic research and development. “Since China has given top priority to innovation as the motor of the rejuvenation of the economy, it has a competitive advantage. It is a deplorable fact that Europe has lost its way,” she said.
MOFCOM's He told a press conference that the EU cannot claim to care about climate change while simultaneously promoting protectionism and restricting international green trade and investment. This double standards approach will hinder the global green transition, disrupt China-EU investment cooperation, and damage mutual trust in economic cooperationand trade. Achieving an energy transition to address climate change is also a goal of Europe, and implementing trade protectionism in certain industries would undermine Europe's open and free market image, Cui said. China hopes that Europe will abandon protectionist practices and return to the path of win-win cooperation, providing a stable, fair, transparent and predictable competitive environment for green cooperation, He noted. There is huge potential demand for new-energy products in the global market. Taking NEVs as an example. According to an estimate by the International Energy Agency, global demand for NEVs will reach 45 million in 2030, 4.5 times the 2022 figure, and global demand for new photovoltaic capacity will reach 820 gigawatts, about four times that of 2022, the Global Times reports.
In related news, Chinese Commerce Minister Wang Wentao said in France that China's anti-dumping investigation into brandy imported from the EU does not target any specific EU country nor carry predefined findings. The anti-dumping investigation was prompted by a complaint submitted by China's brandy industry, Wang said when meeting with three French brandy trade associations and five French brandy producers in Paris. China will conduct the investigation openly and transparently in accordance with Chinese law and WTO rules, while fully safeguarding the rights of all stakeholders, Minister Wang said. According to Western media, the Chinese investigation into brandy was a tit-for-tat countermeasure to the EU's anti-subsidy investigation into Chinese EVs.
China-EU trade in goods dropped 7.1% year-on-year to reach USD783 billion in 2023, according to China's General Administration of Customs (GAC), the Global Times reports. Chinese Commerce Minister Wang Wentao criticized the EU's accusations of overcapacity in China's EV industry, saying that China's advantage is built on innovation, not subsidies. According to Ducker Carlisle, a global consulting and M&A advisory company, Chinese manufacturers claim 8.2% of the European electric car market, selling 86,000 battery electric cars. In comparison, European automakers have a notable presence in the Chinese light vehicle market, accounting for about 20% of market share.
