An economic skirmish is brewing as China fired back fiercely against the European Union’s (EU) subsidy probe into its electric vehicle (EV) makers, warning it will resolutely defend domestic industry interests.
In a blistering counterattack, Beijing denounced the anti-subsidy investigation as naked protectionism designed to hinder China’s economic rise. While Chinese EVs hold marginal EU market share for now, their growth trajectory has set off alarm bells.
The Chinese commerce ministry pledged to “fight to the end” after Brussels targeted homegrown champions like BYD and Geely. The high-stakes standoff seems poised to escalate even as China tries to portray itself as the wronged party.
Beijing argues the probe will distort auto supply chains and undermine Europe’s decarbonization efforts. It pointedly emphasized the decades-long success in China of German automakers, contending domestic EV makers thrive from competitiveness, not subsidies.
With the US already erecting trade barriers, the EU investigation shuts another crucial export door for Chinese brands as they grapple with domestic oversupply woes. But Beijing is signaling it will staunchly resist any constraints on their ascent.
For all its fury, China’s rhetoric cannot mask hard truths the probe may uncover on the secret sauce behind its EV success. With Brussels now aggressively investigating, a messy spat seems imminent. Yet the EU contends this is overdue rebalancing, not protectionism.