Shi Yonghong, vice-president of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, told China Daily in an exclusive interview that under the new Foreign Subsidies Regulation, the European Union will conduct in-depth investigations into local investments in industries that it suspects of receiving foreign subsidies. These investigations can be followed by a range of measures, including forbidding investments or divesting assets. Such measures are more stringent and involve a wider scope compared to merely imposing tariffs, causing considerable concern for companies.

The battery electric vehicle companies will be very cautious and adopt a wait-and-see attitude towards investment in Europe, as they are unable to determine the severe impact of the new EU Foreign Subsidies Regulation currently, and such uncertainty means significant risk, he said.

He also said the EU Foreign Subsidies Regulation is entirely formulated by the EU based on its own needs.

The procedures concerned and contents subjected to the subsidy investigations are all self-determined by the EU, without adherence to multilateral rules, Shi said, adding that actually, the investigation contents greatly exceed the concept of “subsidies” as defined by the World Trade Organization, while the investigation process is not transparent.

He pointed out that the next step in the development of China’s automotive industry is definitely to carry out an international layout and globalized production.