Trade dispute with Beijing: China investigates EU actions in subsidy investigations

The trade dispute between Beijing and Brussels is entering the next round. After the EU tariffs on electric cars, China is responding with its own investigation. This concerns completely different areas.

China is investigating EU practices that Brussels used in its investigations into foreign subsidies. Beijing wants to determine whether the EU’s recent measures represent an obstacle to free trade. The Ministry of Commerce announced an investigation. The Chinese Chamber of Commerce for the Import and Export of Machinery and Electrical Products had previously submitted a corresponding application, it said.

According to the ministry, railways, solar and wind power, and safety equipment are affected. The investigation must be completed by January 10, 2025, with an extension possible until April 10.

The EU Commission had previously launched investigations in these areas. For example, it investigated Chinese wind turbine manufacturers who were said to have gained an unfair competitive advantage through subsidies. Brussels also investigated the bid of a state-owned Chinese train manufacturer for a public tender by the Bulgarian Ministry of Transport due to competition concerns.

Long-running dispute

Brussels and Beijing have been arguing for some time about what Brussels sees as unfair trade practices in China, such as creating excess capacity in its own market through state subsidies, which then flow abroad. One example of this is the photovoltaics industry. China is accused of putting pressure on foreign markets with cheap solar cells due to low domestic demand.

Another point of contention is electric cars made in China, which the EU has been imposing provisional punitive tariffs on since last week. In an initial counter-reaction, Beijing had already announced an investigation into pork and its byproducts from the EU. The People’s Republic is also investigating spirits from the countries of the union.

Announcement from the Ministry of Commerce, Chinese

Source: Stern

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