MKsport blue book is launched at Sun Yat-sen University in Guangzhou, East China's Guangdong Province, on December 14, 2024. Photo: Courtesy of the WTO Law Research Society of China Law Society and Center for WTO Legal Studies, China University of Political Science and Law" src="https://www.globaltimes.cn/Portals/0/attachment/2024/2024-12-14/d12266e2-5f4d-476b-84ae-27fb62a93f2c.jpeg" />The blue book is launched at Sun Yat-sen University in Guangzhou, East China's Guangdong Province, on December 14, 2024. Photo: Courtesy of the WTO Law Research Society of China Law Society and Center for WTO Legal Studies, China University of Political Science and Law
A blue book published by a Chinese think tank on Saturday highlights the impacts of EU subsidies for lithium batteries, photovoltaic (PV) products, and electric vehicles (EVs) revealing the EU's double-standard protectionism in subsidies.
The blue book, titled "The EU's Industrial Subsidy Policy for Lithium Batteries, PV Products and Electric Vehicles in the Name of Green Transition," produced by the WTO Law Research Society of China Law Society and Center for WTO Legal Studies, China University of Political Science and Law, aims to provide a comprehensive analysis of the evolution, implementation mechanisms, subsidy channels, and scale of the corresponding industrial policies of the bloc under the pretext of a green transition, according to the blue book.
The blue book offers a detailed overview of the EU's subsidy policies, detailing how the bloc utilizes EU budgets, national funds, and other financial mechanisms to subsidize the three core industries.
The report gives examples the EU implementing industrial subsidies through a dual-channel mechanisms involving direct EU grants, including grants, preferential loans and the loan guarantees facilitated through EU financial institutions as well as the subsidies granted by member states, which utilize domestic funds for grants, tax incentives, preferential loans and other forms of support.
To support economic and social development, the EU has established and continuously upgraded numerous subsidy funds. Especially with the introduction of the European Green Deal in 2019 and the New European Industrial Strategy in 2020, as amid the pandemic and Ukraine crisis, the EU subsidy program has been expanding its coverage and scale, the report said.
The report named several subsidy-related measures such as Recovery and Resilience Facility that provides subsidies to areas such as green and digital transformation mainly through grants and preferential loans among many others.
While the EU prohibits market-distorting state aid, it allows the exceptions, the report noted.
The lithium battery, PV product and EV industries have received at least 25.2 billion euros from EU funding programs and 40.3 billion euros from state aid initiatives by member states, according to the data compiled in the report.
The report warned that the EU's industrial subsidy policy harms both its own interests and those of other countries.
The EU's subsidies in the corresponding sectors threaten global industrial and supply chain stability, the report said, noting that these measures exacerbate global subsidy races, hinder the efficient allocation of global resources, distort export pricing, harm the interests of other countries, and trigger 'race-to-the-bottom' competition.
The report suggested that these subsidies represent protectionism and may violate WTO rules.
EU's subsidies for lithium batteries, PV products and EV, and its countervailing policies represent a double standard protectionist approach, according to the report.
The blue book was published as the EC imposed additional tariffs on China-made EVs. This move was prompted by the EC's accusations that China was "flooding" the bloc with cheaper EVs as a result of "overproduction," which the EC attributed to significant state subsidies in China, the Xinhua News Agency reported.
"The accusations from Europe and the US about 'overcapacity' lack merit," Sun Xiaohong, secretary-general of the automotive branch of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, told the Global Times, noting that Chinese EV companies have grown through innovation, robust supply chains, and market competition, not by relying on subsidies to gain a competitive advantage.
On the contrary, it is the EU that has been providing substantial subsidies to boost its EV sector, a practice expected to persist, according to Sun.
Shi Xiaoli, director of the WTO Law Research Center, China University of Political Science and Law,who participated in the drafting of the blue book, told the Global Times that while the EU level subsidies and state aids provided by member states have been expanding, the EU accuses other countries of providing subsidies and, without sufficient evidence, initiates countervailing investigations and imposes countervailing measures on EVs originating from China.
This is a typical double-standard protectionist approach that undermines fair competition under the guise of "fair competition," Shi said, noting that such move is politicizing and weaponizing trade measures.
Numerous European companies have invested in China's lithium batteries, PV products and EV industries sectors, collaborating with Chinese and international partners in research, development, and production, as well as the development of new and renewable energy, and related industries, Shi said.
These efforts have contributed significantly to global emission reductions, Shi said, noting that building upon this foundation to deepen the cooperation between EU and China is the right approach.