The European Commission has launched an official probe into China’s electric vehicle industry.
It claims to be “in possession of sufficient evidence” that Beijing has provided subsidies that would harm the European Union’s electric vehicle (EV) sector. If member states concur with the Commission’s findings, it might lead to import tariffs on Chinese vehicles.
According to a declaration published in the Official Journal of the European Union, the subsidies “pose an imminent threat of injury to an already vulnerable EU industry” based on available information.
Beijing however has hit-back at the idea, reports the South China Morning Post.
A statement from the Chinese Ministry of Commerce branded the move “naked protectionist behaviour that will seriously disrupt and distort the supply chain of the global automotive industry chain, including the EU”.
The statement continues: “China expresses strong dissatisfaction with this.”
“The European side requested the Chinese side to conduct consultations within a very short period of time and failed to provide effective consultation materials, which seriously jeopardised the rights of the Chinese side.”
The EU says it offered to consult with China before the investigation was opened.
Trade spokesman Olof Gill said: “In essence: a formal meeting took place, the commission took note of China’s views on the matter, there was no mutually agreed solution and therefore the Commission decided to initiate the investigation.
“The government of China and industry representatives in China will have the possibility to intervene and make their case in the following stages of the proceeding.”
The investigation, which is set to last for a year, will look for subsidies including direct transfers of funds, tax breaks and state provisions for both Chinese companies and businesses based in China.