China's Commerce Minister defends electric vehicle industry against subsidy allegations by U.S. and Europe

China's Minister of Commerce Wang Wentao Defends Electric Vehicle Firms

In a roundtable discussion in Paris on Sunday, China's Minister of Commerce, Wang Wentao, emphasized that the rapid growth of the country's electric vehicle (EV) firms is a result of "constant innovations" rather than subsidies. He dismissed the allegations of "overcapacity" by the U.S. and Europe as baseless. Wang attributed China's EV edge to a "well-established supply chain system and market competition."

Roundtable Discussion and China's EV Industry Contribution

During the discussion with representatives from more than 10 Chinese companies, including EV manufacturers Geely and BYD, as well as EV battery manufacturer CATL, Wang highlighted the significant contribution of the Chinese EV industry to the global response to climate change and green, low-carbon transformation. He also assured that the Chinese government will protect the "legitimate rights and interests" of Chinese firms.

EU's Investigation and Response

Wang's remarks came in the midst of the EU's anti-subsidy probe into electric vehicle imports from China. This probe seeks to determine if tariffs should be imposed on battery EV imports from China to offset state subsidies and level the playing field. The investigation was initiated following a substantial increase in imports, as voiced by the European Commission President Ursula von der Leyen.

U.S. Treasury Secretary Janet Yellen's Concerns

U.S. Treasury Secretary Janet Yellen expressed her concerns about the impact of Chinese industrial overcapacity on the U.S. economy. Yellen, who is in China for bilateral meetings, emphasized the need to address macroeconomic imbalances, including the issue of overcapacity, to benefit the American, Chinese, and global economies.

Advocating for a Level Playing Field

Yellen announced her intention to advocate for a level playing field for American workers and firms, emphasizing that a shift away from policies that drive overcapacity would be beneficial for the U.S., China, and the global economy. She aimed to use the ongoing meetings to manage the bilateral economic relationship between the U.S. and China, as well as to advance American interests.