FirstFT: Beijing attacks EU’s anti-subsidies investigation into electric cars

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In its first official comments on the probe, Beijing has warned that the EU’s anti-subsidies investigation into China’s electric car industry will have a negative impact on relations, describing it as “a naked protectionist act”.

The Chinese commerce ministry vowed to protect the “legitimate rights” of its companies, saying the investigation, which was announced on Wednesday by Ursula von der Leyen, “will seriously disrupt and distort the global automotive industry supply chain, including in the EU”.

Chinese electric vehicles still represent only a small share of the bloc’s market, but they are rising fast and could hit 15 per cent within two years. This has worried the EU, which had its solar panel market dominated by Chinese producers more than a decade ago.

For China, the EV industry is a bright spot in an economy that is struggling to emerge from the pandemic. Beijing is looking to advanced technology industries and the green transition to help China’s economy reduce its dependence on the property sector.

Exports to the EU were one of the great hopes for China’s EV makers, who are suffering from oversupply problems, after the US limited access by levying heavy tariffs on Chinese car imports while offering subsidies for domestically produced electric vehicles.

“China will pay close attention to the EU’s protectionist tendencies and follow-up actions, and firmly safeguard the legitimate rights and interests of Chinese enterprises,” the ministry said. Read the full story here.

• More EVs: More than half the electric vehicles sold by Vietnam’s VinFast this year have been to a related party, underscoring limited demand at the start-up whose valuation briefly eclipsed that of Ford and General Motors.

Here’s what else I’m keeping tabs on today:

• ECB interest rates: European Central Bank governors are split over whether to raise or hold rates today, with potential pitfalls in either direction.

• UK-China: The British government is expected to formally respond to a damning report from parliament that found the UK’s approach to China’s “increasingly sophisticated” espionage was “completely inadequate”.

• Results: Adobe, UK retailer John Lewis and advertising group M&C Saatchi report.

Five more top stories

1. Joe Biden campaign looks to revive poll numbers, coupling new attacks on Republican policies with a massive advertising blitz more than a year before election day. Today the president will travel to Maryland to deliver what his top officials have dubbed a major speech on the economy. Read more on this here.

2. Arm has been valued at $52bn ahead of public listing as shares in the UK chip designer have been priced at $51 apiece before trading begins today. The price is at the top end of a range of $47-$51 a share due to high demand that resulted in its stock being more than five times oversubscribed. Here’s more from our report.

3. Private funds are set to spend billions of dollars to comply with US disclosure rules imposed by the Securities and Exchange Commission last month. Hedge fund, venture capital and private equity groups are looking to recruit more staff and hire different kinds of lawyers. Here’s how else the industry is coping with the biggest regulatory changes since 2008.

4. The allegations that prompted Bernard Looney to resign from BP were made as recently as last week. The board responded by opening a second probe in 18 months into Looney’s past personal relationships with colleagues before the chief executive quit on Tuesday. Here are more details on the allegations and the board’s investigation.

5. Falling house sales and prices have left British estate agents at their gloomiest in 14 years, according to the Royal Institution of Chartered Surveyors’ monthly survey. New buyer inquiries, a measure of housing demand, and new sale instructions declined, while house price balance, which measures the difference between the percentage of surveyors seeing rises and falls in home prices, came in below economists’ expectations. Here’s more from the report published today.

News in-depth

Gloom is spreading through Germany’s manufacturing sector. German industry has gone from being the powerhouse of Europe’s economy to one of the region’s worst performers after a series of shocks, including the pandemic’s disruption of global supply chains and the power crisis unleashed by Russia’s full-scale invasion of Ukraine.

We’re also reading and watching . . . 

Chart of the day

Driven by a post-pandemic rebound, economic uncertainty and the cost of living crisis, the volume of cash payments rose in the UK by 7 per cent last year to 6.4bn — the first increase in a decade.

Take a break from the news

Why do we collect clothes? Mark C O’Flaherty’s new book, Narrative Thread, presents an intimate portrait of the many reasons we hold on to certain items of clothing. “Where families and lovers are involved, some items were incredibly emotional,” O’Flaherty told the Financial Times.

Additional contributions from Benjamin Wilhelm and Tee Zhuo