China’s Auto Industry Should Deepen Ties with Europe to Solve Trade Conflicts

China’s auto industry is being encouraged to strengthen its ties with European counterparts through technology partnerships as a means to address trade conflicts. The suggestion follows the European Commission’s decision to investigate China’s electric vehicle (EV) subsidies.

Dong Yang, vice chairman of China EV100, a leading Chinese EV think tank, emphasized the need for the Chinese government, industrial associations, and companies to mitigate the impact on other markets as Chinese EV exports increase. He proposed establishing mutually beneficial relationships with local companies in order to navigate these trade conflicts successfully.

Furthermore, Dong recommended that Chinese battery suppliers establish closer collaboration with European companies and create a local battery supply chain in Europe. By doing so, both Chinese and European businesses could benefit from this partnership.

On the other hand, European automakers also have an opportunity to leverage China’s EV technologies to accelerate their transition to electrification. By working together and standardizing policies, the path towards technological advancement can be expedited. This sentiment was echoed by industry leaders such as Wan Gang, a policy adviser and known as the ‘father of EVs’ in China, who called for stronger global cooperation and policy standardization at the Munich IAA conference.

The European Commission has accused China of flooding global markets with electric cars at artificially low prices due to extensive state subsidies. This accusation prompted the initiation of a probe that could result in punitive tariffs. However, some Chinese EV makers, such as Xpeng and LeapMotor, are actively seeking partnerships with foreign automakers to license their EV technologies. In addition, Chinese battery manufacturers like CATL and CALB are expanding their presence in Europe by building plants and localizing supply chains.

In conclusion, enhancing collaborations between China’s auto industry and European counterparts through technology partnerships could be a key solution to mitigating trade conflicts. By establishing win-win relationships and promoting technological cooperation, both regions can accelerate their transition to electric mobility and benefit from the growing EV market.

– Zhang Yan, Brenda Goh. “China’s Auto Industry Should Seek Solutions to Trade Conflicts.” Reuters. September 18, 2021.