BEIJING (Reuters) – The European Union’s proposed tariffs on Chinese goods are not “punishment”, German Economy Minister Robert Habeck told Chinese officials in Beijing on Saturday.
Habeck’s visit to China is the first by a senior European official since Brussels proposed massive duties on imports of Chinese-made electric vehicles (EVs) to counter what the EU sees as excessive subsidies.
China warned on Friday ahead of its arrival that friction with the EU over EVs could lead to a trade war.
“It is important to understand that this is not a punitive tariff,” said Habeck in the first plenary session of the climate and transformation dialogue.
Countries such as the US, Brazil and Turkey have used punitive tariffs, but not the EU, the economy minister said. “Europe does things differently.”
Habeck said that for nine months, the European Commission is examining in detail whether Chinese companies are profiting unfairly from subsidies.
Any countervailing duty measures under review from the EU review “are not punishments”, he said, adding that the measures were intended to offset the benefits given to Chinese companies by Beijing.
“The same common standards for market access must be achieved,” Habeck said.
Meeting Zheng Shanjie, chairman of China’s National Development and Reform Commission, Habeck said the proposed EU tariffs were aimed at leveling the playing field with China.
Zheng replied: “We will do everything to protect Chinese companies.”
The EU’s proposed import duty on Chinese-made EVs will harm both sides, Zheng added. He told Habeck that he hoped Germany would show leadership in the EU and “do the right thing”.
He also refuted accusations of unfair subsidies, saying that the development of China’s new energy industry is the result of comprehensive advantages in technology, markets and industrial chains, driven by fierce competition.
Industrial growth “is the result of competition, rather than subsidies, let alone unfair competition,” Zheng said during the meeting.
The EU’s temporary duties are set to take effect on July 4, with an investigation set to run until November 2, when definitive duties, usually five years, can be imposed.
Habeck told Chinese officials the conclusions of the EU report should be discussed.
“Now it is important to take the opportunity that presents the report seriously and talk or negotiate,” said Habeck.
After the meeting with Zheng, Habeck spoke with Chinese Trade Minister Wang Wentao, who said he would discuss the tariffs with EU Commissioner Valdis Dombrovskis on Saturday evening via video conference.
CLIMATE DIALOGUE
Although trade tensions are the main topic to be discussed, the aim of the meeting is to expand cooperation between industrialized countries for a green transition.
This is the first plenary session of the climate and transformation dialogue after Germany and China signed a memorandum of understanding in June last year for cooperation on climate change and the green transition.
These countries recognize that they have a special responsibility to prevent global warming of 1.5 degrees Celsius (2.7 Fahrenheit) above pre-industrial temperatures, a level that scientists believe is essential to avoid the most severe consequences.
China is installing nearly 350 gigawatts (GW) of new renewable capacity by 2023, more than half of the global total, and if the world’s second-largest economy maintains this pace, it could exceed its 2030 target this year, a report published in the month of June. The International Energy Agency (IEA) shows.
While Habeck praised the expansion of renewable energy in China, he noted that it is important not only to look at the expansion of renewable energy, but also overall CO2 emissions.
Coal will still account for nearly 60% of China’s electricity supply in 2023. “China has a coal-based energy mix,” Zheng said.
China, India and Indonesia are responsible for almost 75% of the total global coal burned, as governments tend to prioritize energy security, availability and cost over the amount of carbon emissions.
Zheng said China is building coal-fired power plants as a security measure.
“I still believe that the massive expansion of coal power can be done in a different way if one considers the implications of renewable energy in the system,” replied Habeck.
