China to Examine European Union's Trade 'Barriers'

China will conduct a review on whether the European Union’s investigations into Chinese businesses amount to trade barriers, its Commerce ministry said on Wednesday.

The six-month review by a Chinese industry group will assess whether Chinese companies lost business in Europe due to various inquiries carried out by Brussels, an application on the launch of the probe indicates.

The Commerce ministry received the China Chamber of Commerce for Import and Export of Machinery and Electronic Products’ request last month, the statement said.

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Brussels’ probes “have caused impediments to the entry of Chinese products or services into the European market .. and damaged the competitiveness of Chinese enterprises, constituting trade barriers, the chamber said in its application.

Trade friction

Trade tensions between Beijing and the 27-nation EU have escalated since European leaders announced last month that they would impose additional tariffs on electric vehicles (EVs) made by Chinese carmakers.

Chinese officials have warned repeatedly that friction with Europe over EV imports could trigger a trade war, with suggestions that tit-for-tat tariffs could be imposed on European food, wine and other exports.

The review will focus on the EU’s practices in its investigations of Chinese companies under the Regulation on Foreign Subsidies Distorting the Internal Market of the European Union, a report by Deutsche Welle said.

It will run from July 10 (today) to January 10, 2025, and could be extended to April 10, 2025 under special conditions, the ministry said.

The ministry listed rail locomotives, photovoltaics, wind power and security equipment goods in the statement, but did not mention the European Commission’s anti-dumping probe into Chinese-made electric vehicles that ended in June.

The news is no surprise, given the trajectory of China-EU ties, with Brussels having said it wants to reduce its dependence on Chinese technology, and measures the EU imposed early this year to prevent rival states such as China from taking over key infrastructure, as well as denying them access to sensitive technology.

China’s inquiry will be conducted via questionnaires, public hearings and field inspections, according to a report by the South China Morning Post, which quoted Natixis senior economist Gary Ng as saying that such a probe “usually marks the beginning of trade retaliations”.

However, other analysts said the inquiry was a normal move in trade disputes, but noted that the outcome was far from clear.