SHANGHAI — The Chinese authorities criticized the launch of a probe by the European Commission into China’s electrical automobile subsidies as protectionist and warned it might negatively influence financial and commerce relations.
The investigation “is a naked protectionist act that will seriously disrupt and distort the global automotive industry and supply chain, including the EU, and will have a negative impact on China-EU economic and trade relations,” China’s Ministry of Commerce stated in a press release on Thursday.
“China will pay close attention to the EU’s protectionist tendencies and follow-up actions, and firmly safeguard the legitimate rights and interests of Chinese companies,” it added.
European Commission President Ursula von der Leyen introduced the investigation on Wednesday, accusing China of flooding international markets with electrical vehicles that had artificially low costs due to enormous state subsidies.
The probe, which may take as much as 9 months, could result in tariffs near the 27.5 % degree already imposed by the U.S. on Chinese EVs, an individual accustomed to the matter instructed Bloomberg.
The investigation prompted analyst warnings of retaliatory motion from Beijing in addition to pushback from Chinese business executives who say the sector’s aggressive benefit shouldn’t be as a consequence of subsidies.
Eurasian Group analysts warned that ought to Brussels finally levy duties towards backed Chinese EVs, Beijing would seemingly impose countermeasures to harm European industries.
Other analysts stated the probe may gradual capability growth by China’s battery suppliers, though the transfer mustn’t pose an enormous draw back danger for Chinese EV makers as a result of they may flip to different rising markets resembling Southeast Asia.
Still, it may harm perceptions of Chinese EV makers as they increase overseas, Bernstein analysts stated in a consumer be aware. The producers have been accelerating export efforts as slowing client demand in China exacerbates manufacturing overcapacity.