China confirmed on Thursday that it would continue to impose anti-subsidy duties on potato starch imports from the European Union for the next five years, hours after Beijing’s latest protest against the bloc’s planned probe into China’s soaring exports of electric vehicles.
Beijing’s customs tariff commission said that the duties, which will take effect from Saturday, were “upon the suggestion of China’s Ministry of Commerce”.
The tariff was first levied in 2011, at a rate of 7.5 to 12.4 per cent, before being extended in 2017.
A review, which started a year ago, concluded that the termination of the anti-subsidy tariff might put China’s domestic industry at risk, according to the Ministry of Commerce.
Earlier on Thursday, the commerce ministry had said that Brussels’ decision on Wednesday to investigate China’s subsidies for electric vehicles was a “protectionist tendency” and would endanger the global auto industry and supply chains.
“It is nothing but a protectionist move,” the ministry said. “The move will severely disrupt and distort global auto supply chains, including in the EU.”
The ministry urged the EU, which is the second-largest export destination for made-in-China products and also a big investor in China’s auto market, to start immediate negotiations to create a “just, non-discrimination and predictable” business environment.
“We’ll closely monitor the EU’s protectionist tendency and next moves and will defend the legitimate interests and rights of Chinese firms,” the ministry added in its online statement.
European carmakers, including Volkswagen, BMW, Mercedes-Benz, and PSA Peugeot Citroen, long enjoyed a large market share in China through their local partners. Then came the rapid rise of electric vehicle makers Tesla and Chinese brands BYD, Xpeng, Nio and Li Auto.
New-energy vehicles have become one of the bright spots in China’s struggling economy amid rising domestic sales and exports.
Sales of new-energy vehicles in China rose by 39.2 per cent from a year earlier to 5.37 million in the first eight months of the year, according to the Chinese Association of Automobile Manufacturers. That is equivalent to 29.5 per cent of all auto sales in the same period.
European Commission President Ursula von der Leyen announced the investigation would be launched on Wednesday, saying that “global markets are now flooded with cheaper Chinese electric cars, and their prices are kept artificially low by huge state subsidies”.
“It’s crucial to emphasise that this advantage isn’t a product of what the commission side called ‘huge state subsidies’,” the chamber said.
“It is noteworthy that the electric vehicle industry in China enjoys a robust cooperative partnership with the European and global automotive industry networks, and the creation of each electric vehicle involves the collaborative efforts of tens of thousands of suppliers from around the world.”
But Dombrovskis also defended the decision, saying that “we’re open to competition but not to unfair practices”.
“I will travel to China next week to engage on trade and economic opportunities/challenges,” he wrote on X, formerly known as Twitter, after the announcement.
“We want to keep dialogue open; to de-risk, not decouple.”