PARIS/SHANGHAI: China‘s commerce minister will travel to Europe in April for discussions about the European Commission‘s investigation into whether China’s electric vehicle industry has benefited from unfair subsidies, four people briefed on the plan told Reuters.
Wang Wentao will visit France, a French government source and two other people with knowledge of the trip told Reuters. France’s trade ministry did not immediately respond to requests for comment.
The Commission has begun an investigation to determine whether to impose tariffs on exports to protect European car makers. It is due to conclude by November, although the EU executive could impose provisional duties earlier.
China’s Ministry of Commerce did not immediately respond to a request for comment from Reuters.
A spokesperson for the Commission said it did not comment on bilateral engagements between EU Member States and third countries.
The Commission has said China’s share of EVs sold in Europe could reach 15% of the market in 2025, based on their price discount compared with battery-powered cars made in Europe.
China has contested the claim that its EV industry has boomed because of subsidies and called the EU inquiry “protectionist”. Analysts say factors, including China’s dominance of the battery supply chain, innovation and cut-throat competition in a crowded domestic market have also reduced prices.
European Commission investigators inspected Chinese automakers earlier this year as part of their inquiries, Reuters has reported. Those inspections targeted market-leader BYD, Geely and SAIC, people involved in the process said in January.
FRANCE, ITALY AND PRESIDENT XI Wang will visit France starting April 7 and will be accompanied on the trip by representatives of BYD, SAIC and Geely, the companies that have already hosted Commission investigators, one of the people with knowledge of the trip said. The four people Reuters spoke to declined to be identified as details of the trip are confidential. Further details about the trip were not known. BYD, SAIC and Geely did not immediately respond to requests for comment.
Wang will also attend a China-Italy business forum in Verona, Italy, on April 12, alongside the country’s Foreign Minister Antonio Tajani, the Italian government said.
EU-China trade tensions more broadly are also expected to be debated when Chinese President Xi Jinping is scheduled to visit his French counterpart in May.
France has backed the Commission investigation, part of a years-long campaign by President Emmanuel Macron for the EU to get tougher on trade and insist on a level playing field.
In response, China launched in January an anti-dumping investigation into brandy, which was considered as particularly aimed at France as it accounts for almost all EU brandy exports to China, Chinese customs data shows.
France’s cognac industry association said in January it would fully cooperate with Chinese authorities, but that it believed the inquiry was linked to a broader trade row rather than aimed at the liquor market. OVERTAKING JAPAN China became the largest exporter of cars last year, surpassing Japan, a trend analysts have said reflects the massive overcapacity of production within China given the size of its domestic market. Popular Chinese models exported to Europe include SAIC’s MG and Geely’s Volvo. Tesla is also a major EV exporter to Europe from its factory in Shanghai, the U.S. company’s largest and most productive plant. Including gasoline-powered cars, China had the capacity to produce 43 million vehicles annually as of end 2022, but its plant utilisation rate – a measure that correlates to profitability – was just under 55%, data from the China Passenger Car Association shows. Executives at Chinese automakers, suppliers and analysts have privately discussed and modelled the risk of some additional tariffs on China-made EVs exported to Europe for months. Chinese EVs already face a standard tariff of 10% in the European Union. In the United States, Chinese-made EVs have been kept out by tariffs of 27.5% and a package of federal consumer incentives under the Biden Administration that they do not qualify for as imports. Some U.S. lawmakers have pushed for higher tariffs.
Chinese automakers have been rolling out plans for more production in overseas markets, in part in response to the backlash over exports. Carmakers Stellantis and Renault and French cognac companies Remy, Pernod Ricard and LVMH did not immediately respond to requests for comment on the trip. The French car and brandy associations were also not immediately available.
(Reporting by Leigh Thomas in Paris, Zhang Yan in Shanghai and Anne Marie Roantree in Hong Kong; Additional reporting by Gilles Guillaume, Mimosa Spencer and Michel Rose in Paris, Emma Rumney in London, Julia Payne in Brussels, Giulio Piovaccari in Milan and Guiseppe Fonte in Rome; writing by Kevin Krolicki; editing by Josephine Mason and Barbara Lewis)
