Recently, Reuters and other foreign media reported that EU investigators have arrived in China and will visit BYD, Geely Automobile and SAIC from January to February to conduct anti-subsidy investigations at the locations of these three car companies.
By Laura King
The investigation was launched by European Commission President von der Leyen at the European Parliament on September 13, 2023. She said Chinese cars are capturing the international markets and available at low prices.
The reason why their prices are low is because they have obtained huge amounts of national investment. subsidies, and that’s distorting our market.”
Amid strong opposition from the Ministry of Commerce and relevant industry associations, the EU issued an announcement in October, officially launching a 13-month anti-subsidy investigation, and announced that it had selected three Chinese car companies, BYD, SAIC and Geely, in a “sampling” manner. Launch a countervailing investigation.
It is worth mentioning that according to data from the Passenger Car Association, SAIC and Geely are currently the best-selling Chinese car companies in European markets such as Germany, France, and the Netherlands. As the world’s number one brand in terms of sales of new energy vehicles, BYD is also accelerating its expansion in Europe.
The countervailing investigation will focus on two aspects: first, whether companies that produce electric vehicles in China and export electric vehicles to the EU receive subsidies from the Chinese government; second, whether the import of subsidized electric vehicles originating in China into the EU may have an impact on the EU.
Damage to the economic health of EU producers of electric cars.
Foreign media revealed that France is mainly behind this, because about 40% of France’s electric vehicle purchase subsidies in the first quarter of 2023 will go to Chinese companies. Some German car companies that have been deeply involved in the Chinese market for a long time and have worked closely with Chinese companies have expressed dissatisfaction and concern about the EU’s move.
Brands such as BMW, Volkswagen, and Mercedes-Benz have all spoken out, calling for the creation of a fair competitive market environment and emphasizing that The EU’s move may backfire and create a “boomerang” effect.
It is reported that many car companies have received questionnaires from the EU earlier, covering some joint venture brands and foreign brands produced in China. However, according to insiders, the EU investigators came to China this time to verify the contents of previous questionnaires, but they will not visit foreign companies such as Tesla, BMW and Renault that produce in China.
As the EU’s investigation process started, Chinese companies also began to respond. The Economic Observer pointed out that during the entire response process, Chinese pure electric car companies exporting to the EU will go through the process of responding to sampling questionnaires, submitting comments on investigation products, responding to countervailing questionnaires, conducting legal reviews of the preliminary ruling, and reviewing the final ruling.
Conduct legal review and other procedures. If the enterprise fails to cooperate, it will be regarded as a non-cooperative enterprise by the EU and will be given the highest punitive tax rate. Geely has also previously stated that it will actively cooperate.
“Going Global Think Tank” once analyzed that countervailing investigations are likely to eventually evolve into anti-dumping and countervailing dual investigations and taxation. Once a “double-reverse” investigation is officially launched, the originally normal export business will be under pressure. For some companies with higher tax rates, direct exports may be completely blocked.
At this sensitive moment in China-EU relations, the anti-subsidy investigation against China is an issue that requires careful balancing for both sides.
At present, there is no official response to the arrival of EU investigators.
However, at the Belgian Enterprise Roundtable held by the Ministry of Commerce, China once again reiterated: “We firmly oppose the EU’s launch of countervailing investigations against Chinese electric vehicles and hope that the EU will support China’s high-quality New energy products and contribute to global emissions reduction.
