China Machinery and Electrical Chamber of Commerce: Many EU countries intend to attract Chinese auto companies to invest there, and those who support taxation will lose investment
2024-08-17
한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina
According to the World Trade Organization (WTO) on August 14, China has requested the WTO to hold dispute consultations with the European Union regarding the EU's anti-subsidy investigation into Chinese imports of battery electric vehicles and the subsequent imposition of provisional anti-subsidy duties on the target vehicles. The request was circulated to WTO members on August 14.
On August 16, the China Chamber of Commerce for Import and Export of Machinery and Electronic Products (hereinafter referred to as "China Chamber of Commerce for Machinery and Electronic Products") held a media briefing in Beijing. China Chamber of Commerce for Machinery and Electronic Products was authorized by 12 major Chinese electric vehicle companies, including three Chinese sampled companies, to participate in the damage investigation procedure as an interested party.
The chamber of commerce believes that the unreasonable determination made by the European Commission in the preliminary ruling of the anti-subsidy investigation seriously violated the relevant rules of the WTO and the EU on anti-subsidy, and artificially manipulated Chinese companies to label them with the so-called "subsidy label". The so-called "subsidy label" has caused great concerns among companies about being investigated under the EU's Foreign Subsidies Regulation.
The chamber of commerce said that the EU, on the one hand, is forcing Chinese companies to invest in Europe by imposing trade restrictions such as countervailing duties, and on the other hand, it has formulated the Foreign Subsidies Regulation to hang a sword over the investment and operation of non-EU companies in Europe. This approach is contradictory and illogical. The chamber of commerce said that supporting the tax will actually lead to a loss of investment.
Taking to the WTO
On October 4, 2023, the European Commission launched an anti-subsidy investigation against Chinese electric vehicles. On July 4, 2024, the European Commission announced a preliminary ruling to impose a temporary anti-subsidy tax of 17.4% to 37.6% on Chinese electric vehicles. It is expected that the European Commission will disclose the final ruling before the end of August 2024 and make a final ruling before November 4.
According to the Ministry of Commerce website, in order to safeguard the development rights and interests of the electric vehicle industry and global green transformation cooperation, on August 9, China brought the EU's temporary anti-subsidy measures on electric vehicles to the WTO dispute settlement mechanism.
The spokesperson of the Ministry of Commerce said that the EU's preliminary ruling lacks factual and legal basis, seriously violates WTO rules, and undermines the overall situation of global cooperation in addressing climate change. China urges the EU to immediately correct its wrong practices and jointly maintain the stability of China-EU economic and trade cooperation and the electric vehicle industry chain and supply chain.
On August 14, the WTO published a consultation request submitted by China regarding the EU's temporary countervailing duties on electric vehicles exported from China. According to the document, China believes that the EU's investigation and measures violate multiple provisions of the Agreement on Subsidies and Countervailing Measures (SCM) and the General Agreement on Tariffs and Trade.
China said that the EU had problems at both the procedural and substantive levels. For example, in terms of procedure, the European Commission failed to prove the existence of special circumstances and sufficient evidence to prove the existence of the alleged subsidies, damages and causal relationship, so as to provide a legitimate reason for initiating an investigation on its own. The European Commission also failed to notify the Chinese government and relevant parties and failed to give China sufficient opportunity to submit all evidence they considered relevant. In addition, the European Commission also wrongly ignored the verifiable evidence provided by the Chinese government and relevant parties in a timely manner, and used adverse available facts as an excuse for non-cooperation.
In addition, He Yongqian, spokesperson of the Ministry of Commerce, stated at a regular press conference in July that at the request of the China Chamber of Machinery and Electrical Commerce, the Ministry of Commerce has decided to conduct a trade and investment barrier investigation on the relevant practices of the EU Foreign Subsidies Regulation from July 10, 2024, in accordance with the relevant provisions of the Foreign Trade Law and the Foreign Trade Barriers Investigation Rules.
The EU Foreign Aids Regulation came into effect on July 12, 2023. The regulation gives the European Commission the power to review the financial assistance provided by non-EU member governments to companies engaged in economic activities in the EU. The European Commission will take relevant measures such as prohibiting investment, divesting assets, and terminating concentration based on the results of the review.
The China Chamber of Mechanical and Electrical Engineering said that since the beginning of this year, the European Union has frequently launched investigations into the Foreign Subsidies Regulation against Chinese companies. So far, it has launched three in-depth investigations, one proactive investigation and one surprise inspection against Chinese companies. Three of the in-depth investigations forced Chinese companies to withdraw from bidding projects.
Claus Zimmermann, partner of the multinational law firm Ashurst, previously told a reporter from China Business Network that on the one hand, this trade barrier investigation needs to assess whether the Foreign Subsidies Regulations are inconsistent with WTO law in certain aspects, and on the other hand, it is necessary to examine the EU's specific methods, such as whether the EU's specific methods of in-depth investigation are in line with the EU's obligations under the WTO agreement.
"For example, the General Agreement on Tariffs and Trade requires that regulations be administered uniformly, fairly and reasonably. Any failure to meet these requirements may violate key principles governing trade in goods," Zimmermann said.
The EU's approach backfired
The China Chamber of Mechanical and Electrical Engineering believes that the EU has launched multiple investigations on the EU Foreign Subsidies Regulation against Chinese companies, which are clearly targeted and discriminatory in nature. They are suspected of violating relevant rules such as the WTO's most-favored-nation treatment and national treatment, and have seriously distorted the fair competition environment, bringing great risks and uncertainties to Chinese companies operating in and investing in Europe. The "subsidy label" identified by the EU in the anti-subsidy investigation is likely to become an excuse for the EU to conduct investigations on the EU Foreign Subsidies Regulation against Chinese companies investing in Europe in the future, which has aroused deep concern and worry among companies.
The China Chamber of Mechanical and Electrical Engineering said that many EU countries have always hoped that Chinese electric vehicle companies would invest and set up factories in Europe. Some analysts believe that the European Commission's imposition of anti-subsidy duties on Chinese electric vehicles has hindered the export of Chinese electric vehicle products to Europe in the hope of promoting Chinese companies to invest in Europe, driving the development of the EU's automotive industry, increasing local employment opportunities in the EU, and achieving green and sustainable development goals.But judging from the reactions of Chinese companies, the EU's approach has backfired.
"Before the EU launched an anti-subsidy investigation into electric vehicles, many Chinese automakers had already started or planned to invest or operate in Europe. However, since the European Commission decided to impose temporary anti-subsidy duties, the Chinese electric vehicle industry has repeatedly expressed strong opposition to the EU's approach. Many Chinese electric vehicle companies have expressed to our association their concerns about the results of the investigation and their great concerns about the risks of investing in Europe, such as possible investigations under the EU Foreign Subsidies Regulation," the chamber said.
The China Chamber of Mechanical and Electrical Engineering believes that the most important thing to attract global investors, including Chinese ones, to invest in Europe is that the EU can provide a friendly and stable business environment. Frequently launching various unfair and unjust investigations against companies will obviously increase companies' concerns about the business environment and investment risks. EU countries that intend to attract Chinese auto companies to invest need to see this clearly.Supporting taxation will lead to loss of investment, while an open and fair EU market will be more attractive to Chinese companies.Chinese electric vehicle companies are closely following the progress and results of the EU's anti-subsidy investigation, and will assess the risks of investing in Europe and make investment decisions accordingly.
The chamber of commerce said that the China-Europe automotive industry chains are interdependent and have broad prospects for cooperation. The China Machinery and Electrical Chamber of Commerce hopes that the EU will maintain an open and cooperative attitude, terminate the investigation as soon as possible, support comprehensive cooperation between the China-Europe automotive industries, and work together to promote the healthy development of the global electric vehicle industry chain, respond to global climate change, and achieve carbon neutrality goals.
(This article comes from China Business Network)
