China is dumping (yet) again and distorting global sustainability goals, finds EU investigation

China Chinese environmental pollution

In September 2023, the European Union Parliament decided to investigate the concerns over the EU
market flooding with cheaper Chinese EV vehicles. As per the EU President, the prices of electric
cars from China are kept artificially low, backed by suspected heavy subsidies given by Beijing to the
EV manufacturers. It is yet again a case of dumping by China in the EU markets, accounting for
distortionary trade practices. In the official probe, the EU intends to prove that electric car exporters
received subsidies from the Chinese government, which are often termed “distortive subsidies.”
Though the immediate pressure for the given measure came from France, other members, including
Italy and prominent trade experts, have also raised their concerns over China's dumping practices,
which challenge the survival of the EU's solar industry.

On the contrary, Chinese authorities opposed
the investigation and any accusations of distortionary subsidies. As a matter of fact, China has been
providing huge subsidies for electric vehicles for a decade to establish itself as the biggest EV
producer.
Interestingly, it is not the first case of dumping by China in the EU markets, particularly in the green
technology market. A decade before, Brussels imposed anti-dumping tariffs on Chinese solar panels.
The anti-dumping tariff was the result of a 15-month-long investigation in which it was observed that
EU solar panel producers were losing market share as Chinese markets were selling solar panels at
much lower than market value. The repercussions of Chinese dumping were severe. As per a report,
the unfair competition brought several EU companies to the verge of bankruptcy.

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