China conveys readiness for consultation with EU on trade frictions

BEIJING: Chinese Commerce Minister Wang Wentao said on Saturday that China is ready for consultation with the European Union (EU) to resolve the ongoing trade frictions.

If the EU has the sincerity to sit at the negotiating table, China is also willing to conduct dialogue and consultation and accommodate each other’s legitimate concerns in a rational and professional manner to prevent trade frictions from escalating, said Wang during a meeting with Robert Habeck, Germany’s vice chancellor and minister for economic affairs and climate action, in Beijing.

However, if the EU is bent on having its own way, China will take the necessary actions, including filing a lawsuit with the dispute settlement mechanism of the World Trade Organization, to firmly defend its legitimate and lawful rights and interests, said Wang.

On June 12, the European Commission unveiled provisional tariffs ranging from 17.4 percent to 38.1 percent for Chinese electric vehicle (EV) makers. It accused China of “unfair subsidization” in its EV value chain but did not explain the factual or legal basis for the tariff plan.

Since the beginning of this year, the EU has imposed 31 restrictive trade and investment measures against China, 25 of which were trade remedies, seriously undermining China-EU economic and trade cooperation, according to the Chinese Ministry of Commerce.

During Saturday’s meeting, the Chinese commerce minister said the moves by the EU are meant to suppress the development of Chinese businesses, which are typical protectionist measures.

Habeck, for his part, said the German government is deeply concerned about the EU’s anti-subsidy investigation into Chinese EVs.

The probe will have a negative impact on Europe’s green transition and consumers, Habeck said. He also expressed concerns that the interests of German automobile companies in China could be jeopardized.

Under the current situation, levying tariffs is the worst resort, which will lead to a vicious circle of escalating trade frictions, he said. The only way out is through dialogue and consultation, he added.

Germany appreciates China’s proposal to solve the problem through dialogue and will convey it to the European Commission, said Habeck, expressing his hope that both sides can adopt a constructive attitude and find a feasible way to solve the problem through consultation and negotiation.

The EU plan to impose additional duties on imports of Chinese EVs will harm both parties, Zheng Shanjie, head of China’s National Development and Reform Commission, said on Saturday.

Refuting claims of “overcapacity” in China’s new energy industry, Zheng called these claims contrary to market principles and common sense.

Speaking at a high-level meeting between China and Germany on climate change and green transition, Zheng said China will take all necessary measures to protect the legitimate rights and interests of Chinese companies.

The development of China’s new energy industry is driven by advantages in technology, the market and industry chains, Zheng said, adding that it is a result of market competition rather than subsidies or unfair practices.

The capacity utilization rate of China’s new energy vehicles (NEVs) remains at a relatively high level, with most products sold domestically and exports making up only 12.5 percent of output, official data showed.

In recent years, as China continues to expand its high-standard opening up, many foreign automakers have increased their investment in the country.

Zheng said that foreign brands establish factories in China not due to subsidies but because China possesses the most comprehensive EV industry chain and skilled automotive industry workers.

The global NEV production capacity currently falls short of market demand, and Chinese NEVs can contribute more to the global green and low-carbon transition, Zheng said.

Protectionism cannot enhance competitiveness; it will only hinder global efforts to combat climate change, Zheng added.

He urged Germany to demonstrate leadership within the EU and take the right actions.

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