China slams European Commission for demanding commercial secrets in EV probe

China's Ministry of Commerce (MOFCOM) on Thursday slammed the European Commission (EC)'s investigation into Chinese electric vehicle (EV) manufacturers, in which the EC demanded a huge amount of information related to the firms' commercial secrets. MOFCOM reiterated its vow to take all necessary measures to defend Chinese firms' rights and interests.

Chinese carmakers have called for strong countermeasures, including considering raising the temporary tariff rate on imported cars with large-displacement engines, while relevant domestic industries have requested or plan to request investigations into certain EU products, including pork and dairy. Chinese officials have vowed to take all necessary measures to defend the rights and interests of Chinese businesses.

Meanwhile, a recent survey showed that Chinese businesses' confidence in the EU market has plunged sharply following the EC's investigation into Chinese EVs and subsequent punitive tariffs. The EC's move has seriously undermined China-EU cooperation and will deal a serious blow to the EU's struggling economy, Chinese experts said.

Asked about a closed-door meeting between major Chinese and European carmakers, where the relevant firms said that the EC demanded trade secrets about the Chinese EV industry, He Yadong, a spokesperson for MOFCOM, said that the EC requested a large amount of information on the production and operation, development plans, technical processes, product formulas and other information from Chinese EV and battery companies.

"The type, scope and quantity of information collected by the EU side is unprecedented and far exceeds what is needed for countervailing investigations," He said at a press conference on Thursday, while also slamming the EC's punitive tariffs based on claims that Chinese firms did not cooperate. "Chinese companies were shocked and very disappointed."

He reiterated that the EC's move lacks any factual and legal basis, violates WTO rules, disrupts fair competition and undermines the global green transition and open cooperation. "China firmly opposes this and will take all necessary measures to resolutely defend the rights and interests of Chinese companies."

On Tuesday, major Chinese and European carmakers held a closed-door meeting, during which Chinese carmakers and industry associations deplored the EC's ruling against Chinese EVs and urged the government to take strong countermeasures, including considering raising the temporary tariff rate on imported cars with large-displacement engines, a source told the Global Times.

European carmakers that attended the meeting also expressed opposition to the EC's move to impose additional tariffs on Chinese EVs, and hoped that China and the EU will start negotiations as soon as possible to avoid escalation in China-EU trade tensions, said the source who attended the meeting.

While MOFCOM did not announce specific countermeasures, the spokesperson also offered updates on Chinese investigations into EU products. China has completed various procedures in its anti-dumping probe into brandy from the EU, and will make rulings based on the investigation, He said.

Asked whether MOFCOM will launch an investigation into dairy products from the EU following its probe into certain pork and pig by-products from the EU, He said that MOFCOM has noted the requests made by relevant industries, which have the right to apply for investigations under Chinese laws and WTO rules. Investigation authorities will review applications filed by domestic industries and launch an investigation when the conditions for a probe is met, the spokesperson said.

MOFCOM on Mondayannounced that at the request of the Chinese domestic industry, it will launch an anti-dumping investigation into certain pork and pig by-products originating from the EU. In addition to the anti-dumping investigation into certain EU pork and pig by-products, the Global Times has also learned from a business insider that relevant Chinese industries are preparing evidence, as they plan to apply to competent authorities to launch an anti-subsidy investigation into imports of certain dairy products from the EU.

Major blow to EU economy

Meanwhile, a survey released by the China Chamber of Commerce to the EU (CCCEU), the main Chinese business group in the bloc, showed that 82 percent of surveyed companies said the EU's anti-subsidy probe has led to a decline in confidence in investing in Europe. More than 70 percent said that the EC's investigation negatively impacted sales in Europe, according to the result of the survey shared with the Global Times on Thursday.

"Since the start of the investigation, there has been a noticeable detriment to the sales and reputation of Chinese new energy vehicle enterprises operating within Europe. This adverse situation has eroded the confidence of Chinese automotive manufacturers in their European ventures, negatively impacting the European commercial environment," the CCCEU said.

Chinese experts said that the EC's move has seriously undermined business confidence in the EU's market and the foundation for China-EU economic and trade cooperation, which will deal a serious blow to the EU's already struggling economy.

Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation, said that if the EU joins the US in its years-long trade disputes against China, it will have a profoundly negative impact on the EU's economy in the long term.

"Due to political considerations, the EC disregarded the consequences for its economy, including jobs, inflation and growth. Essentially, it is picking up a stone to smash its feet," Bai told the Global Times on Thursday, adding that China will take resolute countermeasures if the EC starts a trade dispute.

Some Western media reports said that the EC's protectionist move opens a new front in the West's trade disputes with China, which the US started a few years ago. However, just as the US' trade war failed to contain China, an EU trade dispute with China will wreak further havoc on the EU's economy, which is already struggling from multiple challenges, including the Russia-Ukraine conflict, Chinese experts said.

"The US' tariffs and other measures against China were made out of political, strategic and security considerations, and disregards economic interests. In comparison, the EU should not be impulsive and instead should consider the broad and direct economic benefits brought by its close relationship with China," Cui Hongjian, a professor from the Academy of Regional and Global Governance with Beijing Foreign Studies University, told the Global Times on Thursday.

Cui said that there are major differences between the US and EU economies, and blindly following the US' step of launching a trade dispute with China would make the EU the biggest loser.

While the US has benefited greatly from the Russia-Ukraine conflict and relies on its dollar hegemony to prop up its economy, the European economy is in serious trouble. In 2023, the European economy saw close to zero growth, and some media outlets said that some EU countries face the risk of falling off an economic cliff.