Chinese cars defend themselves against Europe's accusations

Thanks to innovation and not subsidies: this is how Chinese Minister Wang Wentao responded to suspicions of state subsidies from Beijing

Fabbrica auto

By: Massimo Grassi

Published by: Brian Potter

Apr 9, 2024 at 6:59am ET

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Innovation, industrial efficiency, supply chain and market competition - these are the strengths of Chinese carmakers on which their commercial successes of recent times are based, according to Trade Minister Wang Wentao, speaking in Paris at a meeting with various representatives of eastern manufacturers such as Geely, Saic, BYD and Catl.

A not too veiled response to the European Commission, according to which there are state subsidies behind the invasion of Chinese cars in the Old Continent, in violation of the European article regulating the "defence against subsidised imports from non-EU countries".

The facts

Let us review what has happened in recent months. In September, the European Commission launched an investigation to shed light on possible unfair practices on the part of Beijing, which was accused of unfairly subsidising its manufacturers to keep the prices of its electric cars low so that it could compete with European rivals.

Investigation whose results arrived relatively quickly, with a clear answer (at least according to the Commission's words): on electric cars, China is violating the rules. Three main pieces of evidence are cited in the document:

potential direct transfer of funds or bonds
waiver by the government of revenue otherwise due or in the non-collection thereof
provision by the government of goods or services for less than the amount that would be appropriate

A tax support that would drown the market and that would lead Europe to introduce customs duties against Chinese cars, so as to increase export costs and consequently prices.

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Accusations that, as mentioned, Minister Wang Wentao categorically denies, branding them as 'protectionist'. In order to clarify the situation and reach an agreement, according to Reuters, Wentao has already met Luca De Meo (on this occasion in his capacity as number one of Acea, the association of European car manufacturers, and not as CEO of Renault) and during his European tour he will hold talks with politicians from the Old Continent, including the French economy minister Bruno Le Maire and the Italian foreign minister Antonio Tajani on the occasion of the 'Italy-China Business and Dialogue Forum', scheduled for 12 April.

Meanwhile, Chinese manufacturers seem increasingly interested in opening factories in Europe: BYD will do so in Hungary within three years, another brand could arrive in Italy and, according to rumours, Leapmotor T03 could take the place of Fiat 500 in Tychy.

About Chinese cars:

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