China’s Commerce Ministry announced Wednesday a retaliatory probe into the European Union’s trade practices, including Brussels’ use of anti-subsidy investigations amid escalating trade tensions between the duo, heightened amid a series of EU probes.
The EU has launched a range of investigations into subsidies received by Chinese suppliers of wind and solar energy components, as well as China’s state railways.
China’s Commerce Ministry said that, in an apparent tit-for-tat move, it had launched a formal inquiry to determine whether these EU investigations amounted to the creation of an “investment and trade barrier” against Chinese firms.
Specifically, Beijing’s investigation will focus on EU industrial policies regarding railway locomotives, photovoltaics, wind power and security equipment.
The investigation must be completed by Jan. 10, 2025, the Chinese ministry said, although an extension is possible.
Tensions over Chinese exports on foreign markets have flared, with Washington and Europe accusing Beijing of supporting sectors like green technologies with massive state subsidies.
They allege China is knowingly creating this “overcapacity” and then dumping the goods in their markets at artificially low prices, to the detriment of their home-grown businesses. China denies this.
Another point of contention is electric vehicles manufactured in China, which the EU has been imposing punitive tariffs on since last week. That measure prompted Beijing to launch an anti-dumping investigation into pork and pork by-products from the EU. Beijing has a similar probe underway into whether European liquor producers are dumping their products on its market.
China’s announcement on Wednesday comes in response to EU probes concerning, for example, Chinese manufacturers of wind turbines who are alleged to have gained an unfair competitive advantage through subsidies.
Brussels also investigated the offer of a state-owned Chinese train manufacturer for a public tender by the Bulgarian Transport Ministry due to alleged competition concerns.
