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On May 13, the European Commission issued a statement saying that it would close its investigation into two Chinese companies. Earlier, the two Chinese companies bid for a solar energy project in Romania, an EU member state, but the European Commission launched an anti-subsidy investigation on the basis of the so-called Foreign Subsidies Regulation, on the grounds that "both companies have received government subsidies that 'distort' the EU market", and eventually forced them to withdraw from the bid. It is the second time in the past three months that a Chinese company has been forced to withdraw from a bid for a project in an EU country because of an anti-subsidy investigation.

Since the entry into force of the EU's Foreign Subsidies Regulation on July 12, 2023, the EU has launched three in-depth investigations under this regulation, three of which all targeted Chinese companies. For the European Union's continued clamor to expand the anti-subsidy investigation of Chinese enterprises, Sun Yanhong, a researcher at the Institute of European Studies of the Chinese Academy of Social Sciences and director of the European Economic Research Office, said in an interview with the Youth Daily · China Youth Network reporter that the so-called China's "overcapacity theory" is simply untenable, and the EU continues to launch anti-subsidy investigations against China is essentially due to the lack of local production capacity and competitiveness. There is obvious protectionism.

One after another provoked a number of "subsidy" investigations

According to Reuters reported on May 16, the European Commission has launched an anti-dumping investigation into imports of tinned steel from China (commonly known as "tinplate") to assess whether products imported from China to the EU are sold at too low prices. The EU said on the same day that the investigation would last 14 months and the EU could impose provisional tariffs in seven to eight months.

In the past four months, the EU has launched a number of investigations into Chinese enterprises under the so-called Foreign Subsidies Regulation. On February 16, the European Commission announced an in-depth investigation into a subsidiary of China Railway Rolling Stock Corporation Limited on the issue of so-called "subsidies". On April 9, the European Union announced an investigation into Chinese wind turbine suppliers in EU5 countries. On April 24, the European Commission issued a statement on its website saying that it had "carried out a surprise inspection of a company engaged in the production and sale of safety equipment in the EU". On May 13, the European Commission concluded an in-depth investigation launched last month after Longi Germany and a consortium of local companies, Shanghai Electric UK and a consortium of Hong Kong companies withdrew their bids to develop a 110 MW solar park in Romania.

Valdis Dombrovskis, the European Commission's executive vice president and trade commissioner, previously suggested that the EU's anti-subsidy investigation into Chinese electric cars was "moving forward" and tariffs could be imposed on Chinese electric cars "before the summer vacation." The European Union is expected to open more anti-subsidy and anti-dumping investigations into Chinese manufacturing this year, which could even extend to Chinese factories overseas, according to analysts' forecasts.

Attitudes towards China are deeply divided within the EU

Although some EU politicians began to talk about "countervailing investigations" since last year, and from time to time clamoring to expand countervailing and anti-dumping investigations against Chinese enterprises, in fact, there are already serious differences within the EU on trade policy towards China.

After the US announced on May 14 that it would raise tariffs on Chinese electric vehicles from 25 per cent to 100 per cent, an EU official said in an interview with the Financial Times on May 16 that the EU was trying to adopt a different trade policy to that of the US.

German Chancellor Scholz made it clear during his visit to China in April that Germany opposes protectionism and supports free trade. As an important member of the EU, Germany is willing to play a positive role in promoting the sound development of EU-China relations. On May 14, Scholz again publicly stressed the importance of trade between China and the West, saying that half of the Western electric vehicles imported from China are produced by Western manufacturers themselves, and that "European and American automakers sell cars in China and have success in the market, we need to remember that." Swedish Prime Minister Christiansen also said on the same day that he opposed the use of punitive tariffs to resolve the trade dispute, saying that "tariffs are a bad idea." In the Augsburg Allgemeine Zeitung on May 15, German Digitalisation and Transport Minister Wiesing warned the EU not to follow the US example. "Starting a trade dispute with punitive tariffs is the wrong approach." Instead, he said, countries should aim for "international trade with fair and uniform rules of competition".

In addition, major German automakers such as BMW and Volkswagen have publicly opposed anti-subsidy investigations into Chinese-made electric vehicles.

Although there are many rational voices in the EU, and the European Commission itself is tight-lipped about whether the United States will impose tariffs on Chinese electric vehicles on the EU, Sun Yanhong reminded that the EU's trade policy is still in the hands of the European Commission, and the results of the game between the European Commission and member states are more complex. There is debate over how many tariffs to impose and where to impose them.

Protectionism will not solve the EU's problems

"Unilateral sanctions must not be used as a tool of foreign policy and economic coercion against China." During his visit to China on May 17, Du Han, Special Rapporteur of the UN Human Rights Council on the negative impact of unilateral coercive measures on human rights, called on relevant countries to lift sanctions against China and take strong actions to curb excessive compliance with sanctions by companies and other actors in their jurisdictions.

According to statistics, in 2023, China-Eu trade will overcome the negative impact of the global trade downturn and reach a total trade volume of US $783 billion, with two-way investment stock exceeding US $250 billion. According to the European Chamber of Commerce in China Business Confidence Survey 2023, more than 90 percent of European companies surveyed plan to use China as an investment destination. According to the EU China Chamber of Commerce's annual report for 2023, more than 80% of Chinese companies surveyed plan to expand their business in Europe.

"China's development and opening-up bring opportunities, not risks, to Europe and the world, and protectionism cannot solve the EU's problems," he said. What we protect is backwardness, and what we lose is the future." China and the EU, each other's second largest trading partner and an important force in building an open world economy, should resolve specific economic and trade issues through dialogue and consultation, Foreign Ministry spokesman Wang Wenbin said on May 22. China hopes that the EU will honor its commitment of supporting free trade and opposing protectionism and work with China to uphold the overall interests of China-Eu economic and trade cooperation.