Recently, Chinese Minister of Commerce Wang Wentao visited Spain and criticized the European Union’s labeling of China as having “overcapacity” as a “false narrative,” stating that if Chinese enterprises are further suppressed, necessary measures will be taken to safeguard their rights.
Experts believe that China, in order to alleviate its own economic difficulties by exporting externally, has made a conspicuous move by advocating joint ventures in European countries while the EU plans to impose taxes on Chinese enterprises. However, in reality, the US and EU can counter Chinese exports by raising import standards for electric vehicles.
According to the official website of the Chinese Ministry of Commerce, on June 2, Wang Wentao visited Barcelona, Spain, where he chaired a “Spain-China Equity Enterprise Roundtable” and visited an electric vehicle factory jointly established by China’s Chery Automobile and Spain’s Ebro Automobile.
On June 3, Wang Wentao and Spain’s Minister of Economy, Trade, and Industry Quieruibo jointly presided over an economic conference in Madrid. He mentioned that the EU’s investigation into Chinese electric vehicles for alleged overcapacity is not due to excess production capacity but rather due to anxiety.
Wang Wentao emphasized that he hopes to resolve economic and trade disputes with the EU through dialogue and negotiation. However, if the EU continues to oppress Chinese enterprises, China will take all necessary measures to firmly protect the legitimate interests of Chinese companies.
In recent years, China’s electric vehicle industry has seen rapid development. According to Cui Dongshu, Secretary-General of the China Passenger Car Association, China accounted for 64% of the global new energy vehicle market share in 2023. From January to April 2024, this figure continued to be 64%, with Chinese new energy passenger cars holding a 67% market share in April.
In terms of pure electric vehicles, China held a global market share of 62% last year, which decreased to 59% from January to April this year. In the plug-in hybrid market, China’s global market share was 69% last year and increased to 71% from January to April this year.
Last October, the EU formally initiated an anti-subsidy investigation into Chinese electric vehicles, alleging that they have “sufficient evidence.” The investigation must be completed within 13 months, during which the EU can impose temporary anti-subsidy tariffs within nine months.
This means that by July of this year, the EU can levy temporary anti-subsidy tariffs. This will result in billions of dollars in additional costs for Chinese enterprises.
EU President von der Leyen stated that if unfair competition by Chinese enterprises distorts the market, the EU will “take decisive action.” In early May, the US announced an increase in tariffs on Chinese electric cars from 25% to 100%, with the EU expected to follow suit.
Wang Wentao also criticized the EU’s series of investigations, saying that they raise the risk of economic and trade disputes between China and Europe.
黄大卫 analyzed for the Epoch Times, stating that from Beijing’s perspective, the issue of overcapacity lies in the buyers’ consumption rather than China’s production capacity. This difference in narrative perspective between China and the West creates tensions in trade relations.
For the West, adherence to WTO principles, non-discrimination, reciprocity, trade liberalization, transparency, exceptions, and preferential treatment are crucial. These differences in trade perspectives highlight the complexities of international trade relationships.
The Wall Street Journal questioned the definition of “overcapacity.” Is it based on current growth, global growth, or future growth in China? Western countries tend to favor the first definition, while the Chinese government leans towards the second or third definitions.
Regarding the concept of a “false narrative,” Professor Xie Tian from the University of South Carolina’s Moore School of Business expressed that Beijing had to address the narrative as presented by the EU to defend its position. This ideological discrepancy contributes to the ongoing economic tensions between China and the EU.
Professor Sun Guoxiang from the Department of International Affairs and Business at Nanhua University in Taiwan highlighted the primary goal of Beijing, which is to maintain its economic interests amid economic challenges in various sectors such as real estate, local debt, and exports. By focusing on new energy industries, especially electric vehicles, China aims to protect its economic interests through strategic initiatives.
Additionally, the establishment of joint ventures with European countries allows China to penetrate international markets and utilize local resources and technologies to enhance product competitiveness. The interplay of market competition, overcapacity issues, subsidy policies, and geopolitical factors contributes to the current trade disputes.
Chinese enterprises adopting a strategy of exporting excess capacity through avenues like setting up factories in other countries, such as Spain and Hungary, pose challenges for the EU’s market interests. This approach aims to circumvent anti-dumping and anti-subsidy measures imposed by the EU while infiltrating and expanding into international markets.
These actions by Beijing reflect a broader strategy to influence and diversify trade relations, potentially impacting the balance of power in the international economic landscape.
In conclusion, the multifaceted aspects of the trade dispute between China and the EU are rooted in various factors such as market competition, overcapacity, subsidy policies, protectionism, and the evolving political and economic dynamics between China and the EU. By navigating these complexities through dialogue and negotiation, both parties can work towards a mutually beneficial and sustainable trade relationship.