Special Edition

15 April 2024

Welcome to China-EU Dynamic Special Edition! Over the past months, the EU initiated a large number of investigations targetting at Chinese companies. China is highly concerned over the EU's discriminatory practices. In today's edition, we will focus on the remarks and comments by Chinese leaders, officials and business community on the protectionist acts by the EU side, and China-Europe trade and economic relations at large.

On January 12, during the meeting with Belgian Prime Minister Alexander De Croo, Chinese Prisident Xi Jinping pointed out that in the face of the changing and volatile international situation, China and Europe should cooperate to promote an inclusive economic globalization that benefits all.

On March 27, when meeting with Prime Minister of the Netherlands Mark Rutte, Prisident Xi stressed that economic globalization may encounter headwinds, but the historical trend will not change. There is no way out for "decoupling and breaking the chain," and opening-up and cooperation are the only choice. He said that a genuinely secure world should be one featuring deep integration and interdependence. The Chinese people also have legitimate development rights, and no force can stop the pace of China's scientific and technological progress.

On January 16, when meeting with President of the European Commission Ursula von der Leyen in Davos,  Chinese Premier Li Qiang noted that China stands ready to import more products from the EU that align with market demand, and hopes the EU will relax export restrictions on high-tech products to China. He expressed that the EU upholds justice, compliance and transparency in economic and trade matters, treat Chinese enterprises fairly, and prudently introduce restrictive economic and trade policies and use trade remedy measures. 

On April 1, Chinese FM Wang Yi and French FM Stéphane Séjourné jointly met the press after their talks. Wang said that China and the EU are comprehensive strategic partners. Facts have proved and will continue to prove that China is an opportunity rather than a risk for Europe, and a partner rather than a competitor. Decoupling from China is the real risk. "De-risking" should not target specific countries, should not violate WTO rules, and should not bring negative expectations to the business community. Some people with vision in Europe are also reflecting on the fact that decoupling from China is the real risk. China's position on this issue is clear, that is, openness brings progress while closing the door can only leave one behind. 

On April 7, Minister of Commerce Wang Wentao hosted a roundtable meeting of Chinese-funded electric vehicle enterprises in Europe in Paris, France. Wang said that the rapid development of China's electric vehicle enterprises relies on sustained technological innovation, sound supply chain system and sufficient market competition, rather than relying on subsidies to gain a competitive advantage. The accusation of "overcapacity" by the U.S. and Europe is groundless. 

On April 10, 2024, the official from MOFCOM Trade Remedy and Investigation Bureau met with Martin Lukas, Director for Trade Defence at DG TRADE of the European Commission. The Chinese side pointed out that all FSR investigations initiated by the EU to date have targeted Chinese companies in the renewable energy sector, which not only undermine the confidence of Chinese companies to invest and trade in Europe, interrupt the mutually beneficial industrial cooperation between China and the EU, but also affect global efforts to combat climate change and green transition. In addition, China also expressed its solemn position on the EU’s updated report on “significance distortions” in the economy of China released on April 10. China stated that the EU’s updated report once again distorts China’s policies, market environment, and economic system, making excuses for its subsequent discriminatory anti-dumping practices. China expresses great concern and strong opposition, urges the EU to stop and change course immediately.

Chinese MFA spokesperson's remarks

--Economic globalization is a major trend, protectionism is never a good option. Electric vehicle is a globalized industry. Only division of labor and cooperation can bring mutual benefits, and only fair competition can bring technological progress. The popularity of Chinese electric vehicles relies on our technological innovation and superb quality in the midst of global competition rather than subsidies. Advocating protectionism and establishing trade barriers in the name of “fair competition” and “national security” goes against the principles of market economy and WTO rules. In the short term, some countries will seemingly take advantage of these practices, but what they protect are their underdeveloped industries, what they lose is their future development, and what they reap is lose-lose. In the long term, the interests of their industries and customers will be affected, and the global transition to a green economy and the fight against climate change will be undermined. (March 22, 2024)

--Many in the world are deeply unsettled by the EU’s rising protectionist tendency. China is highly concerned over the EU’s discriminatory actions against Chinese companies and even the entire industries. China’s new energy sectors’ development is a result of our strong technology, robust market and full-fledged industrial chains. China’s exports of related products contributed significantly to the global response to inflation and climate change. We hope the EU will not keep stressing the importance of fighting climate change on the one hand and yet damage the global efforts to deal with the issue on the other. Protectionism does not solve one’s own problems. Protectionism only protects backwardness. It costs the future and results in lose-lose. We urge the EU to observe WTO rules and market principles. China will firmly protect the lawful rights and interests of Chinese companies. (April 10, 2024)

Chinese MOFCOM spokesperson's remarks

--China has noted the announcement of the European Commission to launch an in-depth investigation into the so-called subsidy issue of a Chinese company bidding for a project in Bulgaria. China is gravely concerned about this issue. We hope that the EU can strictly abide by WTO rules, respect market principles, use Foreign Subsidy Regulations with prudence, conduct investigations in an open and transparent manner, and provide a fair, just and non-discriminatory business environment for Chinese companies and jointly contribute to the overall China-EU economic and trade cooperation. (Febuary 22, 2024)

--We have noted that the EU has recently issued regulations requiring customs to register electric vehicles imported from China. China is highly concerned about this development, and the industry has expressed great concern about the possibility of retroactive taxation by the EU. China's electric vehicle exporters believed that China's export volume fluctuate in line with the EU's consumer need. There is no import surge or damage to the EU market. The adoption of import registration measures and possible retroactive taxation by the EU has lengthened the import process and added burden to normal trade exchanges. It will only undermine China-EU cooperation in new energy industries and compromise the interests of EU consumers. China strongly believes that concerns must be addressed through dialogue and consultation to achieve win-win results. We expect the EU to use trade remedy measures with caution to create a more stable and healthy environment for the development of the electric vehicle industry in China and Europe. China will closely watch the next moves of the EU and safeguard the legitimate interests of Chinese enterprises. (March 14, 2024)

Ambassador Fu Cong's Remarks 

On January 22, during an exclusive interview with Bloomberg, Ambassador Fu stressed that the claim of overcapacity in China is shaky. The Chinese EV companies are standing out because of the ingenuity of Chinese scientists and engineers and the hard work and efficiency of Chinese workers, but not the government subsidies. Fu also pointed out that EU’s trade measures to China harms both sides, such as investigation for anti-subsidy or anti-dumping. These measures are protectionist in nature, they will hurt not only Chinese companies but also European companies, as well as Europe’s effort for green transition.

On his farewell reception, Ambassador Fu stressed that the tripartite description of China as a partner, a competitor and a systemic rival is inappropriate and does not correspond to reality. As Chinese FM Wang Yi recently put it, this characterization is like driving to a crossroads and finding the red, yellow and green lights all on at the same time. It can only cause confusion and distraction. China has long proved to be a trustworthy partner with countries around the world. Economic security, on the other hand, will only be strengthened through more cooperation, not less. Protective trade policies or instruments such as the frequent use of anti-subsidy and anti-dumping measures, under the banner of de-risking will not advance the China-EU relationship. Neither will they benefit the long-term interests of EU.

Peng Gang, Minister for Economic and Trade Affairs of the Chinese Mission to the EU published Op-Eds related to the economic and trade issues :

▶️ The Essence of China-EU Trade and Economic Relations is Mutual Benefit and Win-Win

▶️ China’s High-Quality Development Will Bring More Opportunities to the World

Statements by China Chamber of Commerce to the EU(CCCEU) on EU's trade remedy mesures against Chinese companies:

• EC reportedly launching FSR probe 
  The EU side's continuous deployment of the FSR against Chinese enterprises forges an act of economic coercion. While deliberately ignoring the significant subsidies granted by certain countries to their emerging green industries, the European side has imposed obstacles and market barriers against Chinese enterprises operating in the green sector. This not only contravenes the principles of fair market competition but also undermines the EU's commitment to enhancing international cooperation in global emission reduction and low-carbon coordination. This action sends a detrimental signal to the world, suggesting discrimination against Chinese enterprises and endorsing protectionism. 
• EC opens two in-depth investigations into Chinese companies under FSR in solar photovoltaic sector 
  We reiterate our opposition to the excessive discretionary authority granted to the European Commission under the Foreign Subsidies Regulation. The Regulation's overly broad and ambiguous definitions of key concepts, such as foreign financial contribution, not only place undue burdens on enterprises but also potentially discriminate against foreign enterprises, including Chinese ones. This situation is distorting the level playing field for Chinese enterprises operating in the EU.
• EC to close FSR probe into CRRC Qingdao Sifang 

  This episode adds to the evidence suggesting the EU side has wielded the FSR as a new tool to deter foreign companies, coercing them into withdrawal and subsequent business exclusion. We express deep concern regarding the non-market-based exclusion faced by Chinese companies and strongly urge the EU to uphold principles of fairness and transparency, ensuring an equitable business environment for Chinese enterprises in the EU market.

Disclaimer: The views and opinions expressed in the newsletter are those of the authors and do not necessarily reflect the official policy or position of China or our Mission, except those from the official website of the Chinese Foreign Ministry, our Mission and other Chinese governmental websites.

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