China says EU probe into Chinese electric vehicle exports and subsidies is protectionist

HONG KONG (AP) — China’s Commerce Ministry protested the European Union’s decision to investigate exports of Chinese electric vehicles, saying Thursday it was a “protectionist” act aimed at distorting the supply chain.

The EU said on Wednesday it would examine government subsidies for Chinese automakers that it said are keeping electric vehicle prices artificially low. China has become the biggest market for electric vehicles after investing billions of dollars in subsidies to get ahead. Automakers like BYD and Geely have quickly gained market share after starting sales of electric vehicles in Japan and Europe.

“What I want to emphasize is that the investigative action the European Union wants to take is to protect its own industry in the name of fair competition,” Commerce Ministry spokesman He Yadong said at a briefing in Beijing.

“It is blatant protectionist behavior that will seriously disrupt and distort the global automotive industry chain and supply chain, including the European Union, and have a negative impact on China-EU economic and trade relations,” he said.

In a statement, the ministry called on the EU to create a “fair, non-discriminatory and predictable” market environment.

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In China, electric vehicle prices start as low as 100,000 yuan ($14,500) for a compact SUV with a range of 400 kilometers (250 miles) on a charge.

On Thursday, Cui Dongshu, chairman of the China Passenger Car Association, also dismissed the investigation in comments on his WeChat social media account.

“I personally strongly oppose the EU’s assessment of China’s new energy vehicle exports, not because the country has received huge government subsidies, but because China’s industrial chain is extremely competitive,” Cui said.

He said China will phase out new energy subsidies in 2022.

Cui called on the EU to take an “objective view of the development of China’s electric vehicle industry” instead of using economic and trade tools to increase the cost of Chinese electric vehicles in Europe.

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