The consensus reached between China and the European Union on hybrid vehicle trade delivers benefits to both sides, said Shi Xiaoli, a professor at the School of International Law, China University of Political Science and Law (CUPL), on Tuesday.
China and the EU has reached an understanding on trade in hybrid vehicles in a manner consistent with the World Trade Organization (WTO) rules. One key outcome is that any potential tariff-rate quota would be set above the EU's 2025 import level, rather than being based on a much lower historical average.
Under standard practices, a tariff-rate quota could be based on average imports over three representative years in which there was no import surge. For Chinese hybrid vehicles, that would amount to around 70,000 vehicles annually, based on EU imports from 2022 to 2024.
Under the understanding, however, the baseline would be at least the 302,000 vehicles imported in 2025, with a fixed annual increase. This would give Chinese manufacturers considerably more room to export to the bloc.
"This outcome is not only good news for Chinese car exporters. It also gives European businesses and consumers greater certainty and helps avoid sudden supply shortages. This reflects the first principle China has upheld in the negotiations on hybrid cars: starting from the facts and respecting the actual trade situation between China and the EU, as well as consumers' real needs," said Shi.
The understanding also sets out a non-discrimination principle: any measures must apply equally to imports from all countries and regions, and China's quota cannot be lower than those allocated to other suppliers.
"Both China and the EU want a stable and predictable environment for trade and investment cooperation, and both want to create favorable conditions for their businesses and consumers. Reaching this understanding shows that China has made every effort to safeguard the legitimate interests of its enterprises and secure better export conditions. It also benefits the European side, making this a win-win outcome," said Shi.
China-EU deal on hybrid vehicle trade benefits both sides: expert
