On Thursday, President of the European Commission Ursula von der Leyen reiterated the need for the European Union to investigate China’s state subsidies for the production of electric cars, POLITICO reports.
Von der Leyen believes that China’s economic slowdown will lead to an increase in overcapacity.
Speaking three weeks before her visit to Beijing for the EU-China summit, the European Commission President urged China not to have a “race to the bottom” in green technology. Von der Leyen said:
Europe is open to competition, but it is not open to a race to the bottom. We will go to China in good faith. We will never shy away in raising our concerns. There is a clear overcapacity in China, and this overcapacity will be exported for sure, especially if overcapacity is driven by direct and indirect subsidies. This will worsen as China’s economy slows down — and as its domestic demand does not pick up. This in the very end affects and distorts our market.
The summit will take place on 7-8 December. European Council President Charles Michel and Chinese President Xi Jinping are also expected to attend the summit. China has expressed concern over the Commission’s investigation, saying it will disrupt the global supply chain.
Von der Leyen’s speech at the event, jointly organised by the European Council on Foreign Relations and Beijing-sanctioned Berlin-based think tank MERICS, came a day after Xi met US President Joe Biden in San Francisco, where the two China and the US agreed to restore direct military contacts. On Beijing’s military posture, von der Leyen said:
China’s assertive posture in Taiwan, the South and East China Seas, if you look at that, this affects not only our partners, for example, the Philippines … But that has also an effect on our posture and our global economies, our own supply chains.
Von der Leyen also emphasised the need for Xi to discuss his relationship with Russian leader Vladimir Putin.
She said she would push China to keep its support for Russia “as limited as possible” and “make it clear that China’s stance on Russia will shape our mutual relations in the years to come.”
