On September 10, 2024, Chinese President Xi Jinping held separate meetings at the Diaoyutai State Guesthouse in Beijing with Norwegian Prime Minister Jonas Gahr Støre and Spanish Prime Minister Pedro Sánchez.[i] Both countries expressed their support for China’s “One China” policy and emphasized the importance of diplomatic relations as well as commercial cooperation.
China is Spain’s largest trading partner outside the EU. During the 9th China-Spain Forum held in Beijing, both sides agreed to strengthen dialogue in various areas such as trade and investment through the China-Spain Forum and other platforms, promote green development cooperation, deepen cultural and people-to-people exchanges, and encourage the further development of bilateral relations.[ii] Additionally, on the same day, China and Norway agreed to establish a dialogue on green transition aimed at facilitating contacts and cooperation to reduce greenhouse gas emissions, protect and restore biodiversity, and create new green industries and jobs.[iii]
China and the EU are significant partners in trade. In 2023, China became the EU’s second-largest trading partner, after the U.S., with bilateral trade reaching 739 billion euros. Trade between China and the EU is mutually beneficial. For example, China’s imports of machinery, pharmaceuticals, and alcoholic beverages from the EU increased by 15.7%, 13.7%, and 6.1%, respectively. These imports from the EU have improved the health and living standards of Chinese citizens and supported China’s economic development. Meanwhile, China’s exports of new energy products, electronics, and other goods to the EU have accelerated Europe’s green and digital transformation and helped reduce inflation levels within the EU.[iv] Given the role of the Chinese global market and the EU Single Market in each other’s economic development, it can be said that the economies of China and the EU are complementary. Additionally, increasing economic interactions will continue to play a role in the acceleration of a multipolar world order.
However, taxes imposed by the EU on China-made electric vehicles (EVs) have led to some trade disputes. Chinese Foreign Ministry spokesperson Mao Ning called on the EU to work with China to properly resolve trade disputes through dialogue and consultation. Similarly, Sánchez noted that his country is reviewing the EU’s stance on import tariffs imposed on China-made electric vehicles and urged not only member states but also the European Commission to reconsider their positions. The Chinese spokesperson expressed appreciation for Sánchez’s “rational and objective” remarks, emphasizing that the development of the electric vehicle sector is in the interest of both China and the EU. [v]
On the other hand, trade relations between non-EU Norway and China continue to develop based on mutual interests. The Scandinavian countries, including Norway, are regarded as global leaders in renewable energy and green technologies. China’s increased investments in these areas create mutual economic interests. Regarding electric vehicles, Støre stated during his visit to Shanghai that Norway will not impose sanctions on Chinese electric vehicles and aims to further cooperate with China in areas of mutual interest such as maritime, seafood, and green transition.[vi] In this context, it can be said that Norway’s target of ending the sale of gasoline and diesel cars aligns with China’s electric vehicles, and the number of these vehicles is expected to increase in Norway. Furthermore, the introduction of visa-free travel for Norwegian citizens to China indicates deepening diplomatic relations.
Taxes on Chinese electric vehicles were imposed with the belief that selling these exported cars cheaper than their global competitors would harm the EU industry. The customs duties on Chinese electric vehicles aim to prioritize the EU industry and make it more competitive. In this scenario, Chinese automakers may turn to other markets to offset the losses caused by customs duties. Still, given their widely perceived superior price-performance ratio, it seems unlikely that the restrictions will hinder the expansion of Chinese electric vehicles in the EU market.[vii]
Since pure electric vehicles make up only 1% of all Chinese car exports, the initial economic impact is expected to be small for both China and the EU. However, the effect of EU tariffs on China will be significant due to the strong integration between the two economies’ automotive supply chains. If trade barriers in the automotive sector increase between the EU and China, this situation will complicate investment strategies and supply chains, creating problems for both regions.[viii]
In conclusion, while European leaders’ meetings with China send a strong message of determination in addressing global issues such as joint development, cooperation, and climate change, the extra taxes imposed on electric vehicles are causing tension in EU-China relations. During Sánchez’s visit, his aim to reach a compromise on the taxes seeks to prevent any trade dispute with a strong economic and trade partner. In contrast, Norway’s lack of a shared trade policy with the EU will play an important role in strengthening bilateral relations by increasing its imports of electric vehicles from China. The tariffs imposed by the EU will not only lead to a price increase in electric vehicles but also negatively affect areas like energy transition and green energy, due to reduced demand for electric vehicles. Thus, it can be said that the decreased demand will slow the global adoption of electric vehicles.
[i] “Xi meets Norwegian, Spanish PMs, jointly call for free trade” Global Times, https://www.globaltimes.cn/page/202409/1319536.shtml, (Date of Access: 10.09.2024).
[ii] “Ninth meeting of Chian-Spain Forum held in Beijing”, Belt and Road Portal, https://eng.yidaiyilu.gov.cn/p/0QBSOFJL.html, (Date of Access: 13.09.2024).
[iii] “China, Norway aim at green transition”, China Daily, https://www.chinadaily.com.cn/a/202409/11/WS66e0d084a3103711928a73f5.html, (Date of Access: 13.09.2024).
[iv] “The Essence of China-EU Trade and Economic Relations is Mutual Benefit and Win-Win”, Mission of the People’s Republic of China to the European Union, http://eu.china-mission.gov.cn/eng/mh/202404/t20240408_11278074.htm, (Date of Access: 13.09.2024).
[v] “China calls for properly settling trade frictions with EU through dialogue, consultation: FM spokesperson”, Xinhua News, https://english.news.cn/20240912/105804ef666542d7bbf7ab552d48f666/c.html, (Date of Access: 13.09.2024).
[vi] “Norway won’t impose sanctions on Chinese cars: PM”, China Daily, https://global.chinadaily.com.cn/a/202409/13/WS66e39af7a3103711928a7cf1.html, (Date of Access: 14.09.2024).
[vii] “What the EU’ extra tariffs on China’s electric vehicles mean for carmakers in both markets”, South China Morning Post, https://www.scmp.com/business/article/3267373/what-eus-extra-tariffs-chinas-electric-vehicles-mean-carmakers-both-markets, (Date of Access: 13.09.2024).
[viii] Ibid.
