Chinese commerce minister will be on a visit to France in April for discussions about the European Commission’s investigation into whether China’s electric vehicle industry has benefited from unfair subsidies, Reuters reported. The Commission has begun an investigation to determine whether to impose tariffs on exports from China to protect European car makers, which is due to conclude by November. However, provisional duties could be imposed earlier by the EU executive.
The Commission has said China’s share of EVs sold in Europe could reach 15% of the market in 2025, mostly due to the price discounts provided by them when compared with battery-powered cars made in Europe. However, this claim has been contested by China, which does not agree that its EV industry has boomed because of subsidies. It has called the EU inquiry “protectionist”.
As per analysts, factors such as China’s dominance of the battery supply chain, innovation and cut-throat competition in a crowded domestic market have also reduced prices of its models. This has posed a threat to models from local makers in their home countries. European Commission investigators also inspected Chinese automakers earlier this year as part of their inquiries. As per Reuters, those inspections targeted Chinese market leaders BYD and SAIC.
Chinese minister Wang Wentao will visit France starting April 7 and will be accompanied on the trip by representatives of BYD, SAIC and Geely, the companies that have already hosted Commission investigators. The minister will also attend a China-Italy business forum in Verona, Italy, on April 12, alongside the country’s Foreign Minister Antonio Tajani.
Chinese President Xi Jinping is also scheduled to visit his French counterpart in May. The EU-China trade tensions are more broadly expected to be debated then as well. President Emmanuel Macron has backed the EU Commission’s investigation as he has been in favour of EU getting tougher on trade and insist on a level playing field for its local carmakers.
China became the largest exporter of cars last year, surpassing Japan, a trend analysts have said reflects the massive overcapacity of production within China given the size of its domestic market.