Xi Jinping's Representative Slams EU For 'Unfair' Probe Into EV Subsidies: 'Mostly Targeted At China'

In a recent development, China has criticized the European Union’s (EU) investigation into Chinese electric vehicle (EV) manufacturers over state subsidies, warning that the probe could strain trade relations.

What Happened: Xi Jinping‘s representative to the EU, Fu Cong, has labeled the EU’s investigation into Chinese EV manufacturers as “unfair,” Bloomberg reported. He cautioned that the EU’s actions could lead to further trade investigations into European products.

Fu Cong highlighted the EU’s subsidies to its own companies and suggested that if China adopted a similar approach, it could trigger numerous investigations. Despite this, China is cooperating with the EU’s probe to avoid resorting to trade measures against each other.

Fu said the measures are "mostly targeted at China."

"Everything seems to be harming the EU's security."

"But the question is, where do you draw the line and where are the boundaries and how do you strike a proper balance between economy and the security?" he said.

Trade tensions have been escalating since the EU initiated its EV investigation, and China, in response, launched an anti-dumping probe into brandy sales. The EU is set to unveil a series of proposals aimed at safeguarding itself against coercive economic measures by countries like China and Russia.

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Why It Matters: The EU’s investigation into Chinese EV manufacturers began in October and is expected to last 13 months. The probe, which includes companies such as BYD Co Ltd BYDDY, Geely Automobile Holdings Ltd GELYY, and Science Applications International Corp SAIC, aims to assess whether Chinese-made EVs are benefiting unfairly from state subsidies.

China’s criticism of the EU’s probe comes at a time when the country is making significant strides in the EV market. BYD, a Chinese EV manufacturer, recently announced its entry into the luxury car market with a series of high-end EVs, including a Lamborghini-style supercar and an SUV with unique features.

Meanwhile, the EU was considering imposing tariffs on cheaper Chinese EV imports, a move that could benefit European automakers such as Stellantis NV STLA and Renault SA RNLSY. At the same time, European automakers are forging partnerships with Chinese counterparts to drive innovation and EV dominance in the Chinese market.

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