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EU should think twice before imposing tariffs on Chinese EVs: commentary




EU should think twice before imposing tariffs on Chinese EVs: commentary

2024-06-14 20:12 Last Updated At:06-15 00:17

The European Union (EU) should think twice before imposing tariffs on Chinese electric vehicles (EVs) as China has various trade tools that can be used as countermeasures to hit back against its move, and the EU still has time to choose between a win-win situation and vice versa, a commentary from the China Media Group (CMG) said on Thursday.

The European Commission (EC) announced on Wednesday its decision to impose provisional extra duties up to 38.1 percent on Chinese EVs following a so-called anti-subsidy probe. The move has met with strong opposition from Chinese auto manufacturers who are calling for countermeasures from the Chinese government.

The "firm opposition" from Chinese car-makers has clear and ample legal basis. Reviewing the so-called probe by the European side, from its initiation and the investigation process to the announcement of the preliminary ruling, every link is characterized by one and the same word: unreasonable.

The anti-subsidy investigation was initiated by the EC, not by the European auto industry itself.

Such investigations are usually initiated by the industry itself because it may directly feel the threat posed by other countries' highly competitive products, thus requesting for a probe for its own sake and launching the investigation with substantive reasons, said Sun Xiaohong, an official with the China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME), who is familiar with the situation as she participated in the defense of Chinese companies in this case.

But the EC initiated it based on its subjective judgment that China's EV industry is "threatening".

The subsequent investigation process was also fraught with unreasonableness.

The CCCME described this probe as a lack of fairness, objectivity and transparency.

The sampling was unfair. The three companies selected by the EC are SAIC, Geely and BYD, for which the EC has failed to give a convincing reason.

Data shows that the share of Chinese brands in the European EV market is about 8 percent, and the proportion of these three companies is even less. Under these circumstances, How can they pose a threat? Where does the threat come from?

In addition, Chinese companies said they were required by the European side to provide the formula of their batteries during the investigation. This and much other information requested by the EU side are related to corporate privacy, commercial secrets and core technologies, according to Sun.

What makes the investigation even more unreasonable is that the EU also used data collected by themselves to supplement unavailable data. The objectivity and authenticity of these data are not in their consideration, Sun said.

During rounds of investigations and hearings, China's position and concerns were ignored and never cared about by the EC, she said.

Faced with such "protectionist" and "unfair" practices in the name of "upholding fair competition", China will certainly take countermeasures.

According to industry insiders, China is internally pressing forward with the procedure for raising provisional tariffs on imported gasoline vehicles with large-displacement engines.

Large-displacement engines are those with a displacement above 2.5 liters.

European countries export 18 billion U.S. dollars' worth of passenger cars with large-displacement engines to China annually, higher than the value of Chinese EVs exported to Europe in 2023, according to the China Passenger Car Association.

If China raises the tariffs, the European brands such as BMW and Mercedes-Benz will be the first to bear the brunt, which also means that the European auto export to China will take a hit.

The Chinese auto industry has called on the authorities to increase the tariff to 25 percent, which is within the scope of China's commitment to the World Trade Organization and fully in line with WTO rules, said Professor Cui Fan with the University of International Business and Economics.

Apart from the auto industry, China is expected to unveil the preliminary ruling on the anti-dumping investigation into brandy products exported from the EU at the end of August.

Customs data show that the Chinese market has become the key to supporting the European brandy industry as its sales in other oversea markets have dropped significantly. From January to September of last year, the EU brandy exports to China jumped by more than 20 percent year on year.

Noting that both China and the EU are WTO members and participants in the multi-party interim appeal arrangement (MPIA), Cui said the two sides can also settle the disputes within the WTO framework.

During the interval between the EU announcement of the preliminary ruling and the final ruling, China still has many tools in hand to employ. There is still time before the ruling is finalized, and the European side still has a chance to get back on the right track.

The EC's decision of imposing additional import duties on Chinese EVs has also sparked opposition and concerns from governments and businesses across Europe. Senior officials of Germany, Hungary, and Sweden are among the first to voice their opposition. These countries have been at the forefront of cooperation with China on new energy vehicles.

Oliver Zipse, CEO of German automaker BMW, criticized the EC's plan as "the wrong way to go", saying that it would damage European companies and their interests. "Protectionism risks starting a spiral: Tariffs lead to new tariffs, to isolation rather than cooperation," he said.

The European car manufacturers' skepticism about the tariff hikes comes for a reason.

Over the past few years, EU companies including BMW, Volkswagen, and Faurecia have scaled up their EV business in China and obtained key technologies such as batteries and intelligent driving. Chinese companies such as CATL, NIO, and BYD have also built factories in Germany and Hungary to help improve the competitiveness of their EV industry, said Wei Qijia, a researcher with the National Information Center of the National Development and Reform Commission (NDRC), China's top economic planner.

Cooperation with China in the EV sector also contributes to Europe's response to climate change and the green transformation of its economy.

Both sides stand to gain from cooperation and lose from confrontation. The Chinese and European automotive industries are highly complementary, with a foundation, much space and prospects for cooperation. China actively supports fair competition among countries in the automotive industry to ensure stable industrial and supply chains, said an NDRC official.

However, if the EU turns a blind eye to the appeals of its own industry, basic market principles and WTO rules, and persists on imposing tariffs on Chinese EVs, it will definitely undermine the foundation for China-EU auto cooperation, and China will firmly take all measures necessary to safeguard the legitimate rights of its firms, the official warned.

Whether to embrace a win-win situation or to hurt others without benefiting itself, the EU still has time to ponder.

EU should think twice before imposing tariffs on Chinese EVs: commentary

EU should think twice before imposing tariffs on Chinese EVs: commentary

EU should think twice before imposing tariffs on Chinese EVs: commentary

EU should think twice before imposing tariffs on Chinese EVs: commentary

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China ranks high in global electricity index by tech innovation

2024-07-13 08:04 Last Updated At:11:07

Technological innovation propels China to rank high in electricity development, with power supply and consumption services also leading globally, according to a report issued Friday on the sideline of a high-level conference held in Beijing.

At a sub-forum of the second high-level conference of the Forum on Global Action for Shared Development, the Global Energy Interconnection Development and Cooperation Organization (GEIDCO) issued the Research on Global Electricity Development Index (GEDI).

The report selected 100 countries on six continents for index measurement and assessment. The composite score of China's power development index is 90.8, ranking first among 34 Asian countries and seventh in the world.

The report said that global power development has made significant progress over the past decade, especially in the field of renewable energy.

By the end of 2023, the proportion of global renewable energy generation in total power generation had reached 30 percent, of which wind and solar power generation was growing fastest, with an average annual growth rate of more than 12 percent.

On the power side, the current global electrification is entering a new stage of accelerated development characterized by greening and decarbonization, the report showed, adding that it is expected that in the next three years, the average annual growth rate of global electricity demand will exceed 3.3 percent, significantly higher than the growth rate of energy consumption.

"It is expected that by 2030, eight technologies such as autonomous driving, green fuel vehicles, and green fuel ships will mature rapidly and be applied widely under increased research and development investment and favorable policies," said Zhou Yuanbing, director of the Economic and Technology Research Institute under the GEIDCO.

China ranks high in global electricity index by tech innovation

China ranks high in global electricity index by tech innovation

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