Q: Recently, China and Europe held in-depth discussions on the hybrid vehicle and electric vehicle trade under the trade and investment consultation mechanism to avoid escalating the situation. Some foreign media speculated on the number of hybrid vehicle trade arrangements and other related details. What comments does the Chinese side have? A: Continued dialogue between China and Europe under the trade and investment consultation mechanism has reached consensus on a number of outcomes, which is conducive to maintaining a stable and balanced key trade partnership between China and Europe. Based on the principles of mutual respect and equal consultation, the two sides have conducted intensive discussions on trade in hybrid vehicles and electric vehicles to handle economic and trade differences and mutual concerns in a balanced manner. Regarding hybrid vehicles, the two sides emphasized and confirmed three basic principles. The first is to respect the facts. According to Eurostat data, the EU will import 107,000 hybrid vehicles from China in 2024, compared to 302,000 in 2025. The two sides reached an upward arrangement on the basis of 2025 to ensure export space and steady growth for Chinese enterprises, taking into account the legitimate concerns of both industries based on reality. Second, non-discrimination. No measures will specifically target Chinese products, let alone discriminate against Chinese companies. The quota obtained by the Chinese side will not be lower than any other source of imports from the European side. The third is compliance. Both sides confirmed that trade arrangements should comply with WTO rules. China reserves all rights under the WTO framework to resort to dispute resolution, demand trade compensation, etc. These three basic principles have continued throughout and are a solid foundation for protecting the legitimate rights and interests of Chinese enterprises. Regarding electric vehicles, China and Europe achieved a “soft landing” in the countervailing case in January of this year, and the European side issued a general guidance document on price commitments. In this regard, the European side will continue to push forward procedures relating to corporate price commitments in the electric vehicle case, as well as other review procedures. On the basis of reciprocity and mutual benefit, the above consensus has strongly protected the actual interests of Chinese enterprises, avoided the escalation of trade friction between China and Europe, provided a stable, predictable, and sustainable trade and investment environment between China and Europe, and contributed to the stable, balanced and healthy development of bilateral economic and trade relations.

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