China launches probe into EU foreign subsidy investigations

Beijing said Wednesday it is kicking off a formal probe into EU practices after the bloc launched an anti-subsidy investigation of a range of Chinese transport and green energy firms.

Trade tensions between Beijing and Brussels have spiralled in recent months, with the European Union taking aim at China's support for its renewables and electric-vehicle sectors in particular.

China has denied that its industrial policies are unfair and has repeatedly threatened retaliation to safeguard its companies' legal rights and interests.

Its commerce ministry said Wednesday it would "conduct a trade and investment barrier investigation into the relevant practices adopted by the EU in its investigation of Chinese enterprises".

The probe followed a complaint made by the national chamber of commerce for importing and exporting machinery and electronics, the ministry said in a statement.

The complaint mainly dealt with "products such as railway locomotives, photovoltaics, wind power and security inspection equipment", it said.

The ministry added that the probe would examine the EU's "preliminary reviews, in-depth investigations and surprise inspections of Chinese enterprises".

It said the investigation would likely last until January 10, 2025, but may be extended by a further three months under "special circumstances".

- 'Necessary measures' -

The EU has previously launched similar probes into Beijing's support for domestically produced trains, solar panels and electric cars.

They have come as the 27-nation bloc seeks to scale up renewable energy use to meet its target of net-zero greenhouse gas emissions by 2050.

But it also wants to step away from what it sees as excessive reliance on Chinese technology at a time when many Western governments increasingly see Beijing as a national security threat.

Brussels opened its first probe under the Foreign Subsidies Regulation in February, targeting a subsidiary of Chinese rail giant CRRC.

That investigation was closed after the subsidiary withdrew from a tender in Bulgaria to supply electric trains.

A second probe targets Chinese-owned solar panel manufacturers seeking to build and operate a photovoltaic park in Romania, partly financed by European funds.

Under a different set of rules, Brussels last September started a probe into subsidies for Chinese electric cars.

It concluded that Chinese state subsidies for its EV industry were unfairly undermining European rivals.

Last week, the EU slapped extra provisional duties of up to 38 percent on Chinese EV imports, prompting an outcry from manufacturers, Chinese business groups and the Chinese government.

Beijing rejects the probe's findings and has said it will take "necessary measures" to safeguard the rights of its companies.

- Silent treatment? -

The EU's ambassador to China said Sunday that efforts to engage China in dialogue over the EV tariffs had yielded "almost absolutely no progress".

"We have offered consultations to the Chinese government... we sent (them) a letter four months ago," Jorge Toledo said at the World Peace Forum in Beijing.

The bloc did not receive a response until just over a week ago, he said, adding: "It's not because we haven't been trying to talk."

A spokesperson for China's commerce ministry said Monday that Toledo's remarks "were severely inconsistent with the facts".

"China has always expressed its strong opposition through multiple bilateral scenarios... and urges the European side to appropriately manage trade frictions through dialogue and consultation," the spokesperson said, according to state broadcaster CCTV.