The European Commission and China's defense ministry find themselves in a disagreement regarding the evidence and timeline surrounding Brussels's investigation into Chinese subsidies for battery-electric car makers.
In their official notice of the probe published on Wednesday, the European Union's executive arm states that it possesses sufficient evidence showcasing the rapid proliferation of low-cost, China-subsidized imports in Europe. These imports have resulted in a decline in prices, placing significant pressure on the domestic industry's market share and profits.
The Commission emphasizes that an influx of low-priced imports gaining significant market share in a rapidly expanding industry like electric vehicles, where substantial investment is necessary during the Union market's transition to full electrification, could lead to heavy losses for the Union industry. Such losses may prove unsustainable in a short period.
Citing evidence, the Commission highlights grants, loans, credit lines, and bonds from state-owned and state-supported institutions that were offered with preferential terms. Additionally, the Commission lists preferential export-insurance rates, various tax reductions, exemptions, and rebates as further indications of Chinese subsidies. The Commission also asserts that the Chinese government has supplied raw materials, components, and services at less-than-adequate remuneration.
China's Ministry of Commerce spokesperson issued a statement on Wednesday expressing dissatisfaction with the investigation, claiming there is insufficient evidence to support it and arguing that it is not aligned with relevant rules laid out by the World Trade Organization (WTO). The spokesperson also criticizes the EU's handling of the investigation's timeline, stating that China was required to engage in consultations within a very short period of time without receiving effective consultation materials, thereby infringing upon China's rights.
As per the notice, companies are given seven days from Wednesday to provide an initial response to the probe. The investigation is anticipated to span one year.