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China Auto Industry Firmly Opposes EU Probe on Chinese EV Subsidies, Calls for Objective Investigation

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China Auto Industry Opposes EU Probe on Chinese EV Subsidies, Calls for Objective Assessment

The head of a China automobile industry body has urged the European Union (EU) to objectively consider China's electric vehicle (EV) industry and its highly competitive industrial supply chain. This statement comes in response to the unexpected launch of an "anti-subsidy" investigation by the European Commission into China's EV makers. Cui Dongshu, secretary-general of the China Passenger Car Association, expressed firm opposition to the EU's assessment on China's new energy vehicles. He emphasized the need for an objective evaluation of China's EV industry, rather than the arbitrary use of unilateral economic and trade tools that could hinder its development.

The Competitive Advantage of China's EV Industry

Cui Dongshu highlighted that the strong export volumes of China's new energy vehicles are not solely due to substantial state subsidies. Instead, he attributed their success to the highly competitive industrial supply chain and intense market competition within China. Chinese cars exported to Europe are typically sold at nearly double the prices compared to mainland Chinese markets, indicating the competitiveness of the industry.

Evaluating Europe's Stance on Competition

European Commission President Ursula von der Leyen, while confirming the probe, stated that Europe is open to competition but not to a race to the bottom. This investigation adds another challenge to EU-China relations, following the agreement between the US and Europe in May to reduce dependency on Beijing rather than sever ties completely. Von der Leyen drew parallels between the impact of robust competition from Chinese companies on Europe's solar industry and the potential consequences for the region's automotive sector. In conclusion, the opposition from China's auto industry to the EU's probe on Chinese EV subsidies highlights the need for an objective assessment of the industry's development. The competitive advantage of China's EV industry, driven by a strong domestic market and a highly efficient supply chain, should be considered. As the investigation unfolds, it remains to be seen how this will impact EU-China relations and the future of the automotive industry in both regions.

Conclusion: Implications for Emerging Businesses

The dispute between the China auto industry and the EU over the probe into Chinese EV subsidies offers critical insights for new businesses, particularly those in the EV industry.

Recognizing the Importance of Fair Assessment

The call for an objective evaluation of China's EV industry underscores the importance of fair assessment in international trade relations. New businesses must be aware of the potential for bias and strive for transparency in their operations.

Understanding Competitive Advantages

Cui Dongshu's emphasis on the competitive advantage of China's EV industry, driven by a robust domestic market and efficient supply chain, highlights the importance of recognizing and leveraging competitive advantages. Emerging businesses can learn from this, focusing on building strong supply chains and fostering domestic market competition.

Navigating International Trade Relations

The ongoing investigation and its potential impact on EU-China relations serve as a reminder of the complexities of international trade relations. New businesses must be prepared to navigate these complexities and understand the potential implications of international disputes on their operations. In conclusion, the dispute over the EU's probe into Chinese EV subsidies offers valuable lessons for new businesses. By recognizing the importance of fair assessment, understanding competitive advantages, and navigating international trade relations, emerging businesses can position themselves for success in the global market.
Story First Published at: https://www.cnbc.com/2023/09/14/china-auto-industry-body-says-it-firmly-opposes-eu-probe-on-chinese-ev-subsidies.html
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