China says ‘continuous innovation’, not subsidies, behind its EV lead

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The newly launched BYD seal was showcased during the launch of the Chinese-made BYD brand in Jakarta on January 18, 2024, and also introduced 2 other types of battery-powered vehicles (EV, electric vehicles) that will be sold. Indonesia, with an investment of US$1.3 billion. (Photo by Bay Ismoyo/AFP) (Photo by Bay Ismoyo/AFP via Getty Images)

Be ismoyo | AFP | getty images

China’s Commerce Minister Wang Wentao said the rapid growth of the country’s electric vehicle companies is not due to subsidies, but to “continuous innovations.”

China’s Commerce Ministry said on Monday that allegations of “overcapacity” made by the US and Europe are baseless. Wang also attributed China’s EV lead to its “well-established supply chain system and market competition.”

Wang made the remarks during a roundtable discussion in Paris on Sunday with representatives of more than 10 Chinese companies, including EV makers Geely and BYD as well as EV battery maker CATL, according to a commerce ministry statement.

According to the statement, the roundtable discussion focused on the EU’s anti-subsidy investigation into electric vehicle imports from China, among other topics.

Wang said the Chinese EV industry has “made important contributions to the global response to climate change as well as the green and low-carbon transition.” He also said that the Chinese government would protect the “legitimate rights and interests” of Chinese companies.

The EU launched an investigation in October to determine whether it should impose tariffs on imports of battery EVs from China “to offset state subsidies and level the playing field” after a substantial increase in imports.

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European Commission President Ursula von der Leyen said in September that “the global market is flooded with cheap electric vehicles” and that prices have been “kept artificially low” due to “huge state subsidies”.

US Treasury Secretary Janet Yellen said on Saturday she was “particularly concerned” about the impact of Chinese industrial overcapacity on the US economy.

Yellen is currently in China for meetings on matters including managing bilateral economic relations between the US and China and advancing US interests.

Washington and Beijing will have “in-depth exchanges” that will “facilitate discussion on macroeconomic imbalances, including with respect to overcapacity,” Yellen said Saturday after a meeting with Chinese Vice Premier He Lifeng.

“I want to use this opportunity to advocate for a level playing field for American workers and firms,” ​​she said. “Moving away from policies that promote overcapacity would benefit the U.S., Chinese and global economies,” he said.

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