Cooperation between China, Europe called key for future of electric vehicle industry

Workers operate at a production line of SAIC-GM-Wuling in Liuzhou, Guangxi Zhuang autonomous region, in May. (Photo/Xinhua)

China has vowed to continue negotiations until the very last moment in response to the European Union's anti-subsidy probe into battery electric vehicles produced in China, Minister of Commerce Wang Wentao said on Wednesday.

The future success of the automotive industry in both China and Europe hinges on cooperation between the two economic powerhouses, Wang said at a roundtable in Brussels at which some 30 executives from the Chinese and European EV sectors met to discuss the EU's anti-subsidy case.

The legitimacy, compliance, and fairness of the EU's investigation into Chinese EV subsidies have faced widespread doubt, Wang said.

Wang was scheduled to meet with European Commission Trade Commissioner Valdis Dombrovskis on Thursday to discuss the escalating trade tensions over EVs and to seek a compromise that could avert the duties.

The European Commission, the EU's executive arm, is poised to propose imposing final tariffs of up to 35.3 percent on battery EVs manufactured in China, on top of the standard 10 percent import duty levied on car imports.

A vote by the 27 EU member states on the proposed final duties is scheduled for Sept 25. The duties, if approved, could be implemented by the end of October. However, the timeline could be altered if a qualified majority of 15 EU member states, representing 65 percent of the EU population, were to vote against the proposed levies.

German Vice-Chancellor Robert Habeck said on Tuesday during a meeting with Wang in Berlin that Germany has come out in strong support of free trade and against tariff hikes proposed by Brussels on EVs made in China. Habeck expressed enthusiasm for Chinese investment in Europe's automotive sector.

Germany, the most populous country in the EU, is home to 84.4 million residents, constituting about 19 percent of the total EU population, according to data from the European Commission.

Habeck said that the comprehensive solution proposed by the Chinese industry is an "important step forward" that lays the groundwork for productive negotiations. He called for the EU to take a more constructive approach as well.

Germany will do everything in its power to help the EU and China find a mutually acceptable resolution, as escalating this into a full-blown trade conflict would serve no one's interests, Habeck added.

European companies represented at the meeting in Brussels on Wednesday emphasized that they are not afraid of competition and do not require tariff protection. They also voiced opposition to trade protectionism and support for free trade, open markets, and fair competition.

In recent days, some other EU countries, including Spain, have also voiced their opposition to the tariffs, which were initially viewed as a near certainty.

Spanish Prime Minister Pedro Sanchez said earlier this month during a visit to China that the EU should reconsider proposed import tariffs on EVs made in China, and he urged Brussels and Beijing to find a compromise that would avoid a trade war.

Tu Xinquan, dean of the China Institute for WTO Studies at the University of International Business and Economics in Beijing, said that Spain, which accounts for about 11 percent of the EU's total population, is poised to play a vital role in the vote on the proposed tariffs.

The shift in sentiment among these key member states suggests the policy may have a more uncertain path forward, Tu said.

In the past four decades, Europe has reaped immense benefits from its investment and trade cooperation with China, Tu added, saying that European policymakers should resist resorting to a trade war, which would harm the interests of European consumers and businesses.