China has strongly protested the European Union (EU) measure that restricts the use of Chinese-made inverters (power conversion devices). It is already the sixth time this year that the Ministry of Commerce has publicly criticized EU measures aimed at China.

On the 7th, a spokesperson for the Ministry of Commerce stated on its website that “the EU, without any substantive evidence, has designated China as a so-called ‘high-risk country’ and prohibited funding for projects that use Chinese-made inverters, which amounts to stigmatization of China and unfair, discriminatory treatment of Chinese products”.

On the 4th, the EU announced that, citing risks to the European power grid, it would ban the use of inverters manufactured in high-risk countries such as China in energy projects financed with EU funds. Inverters are key components that connect renewable energy sources to the power grid.

The possibility of retaliation was also raised. The spokesperson went on to warn that “designating China as a ‘high-risk country’ undermines China·EU mutual trust and harms bilateral economic and trade cooperation, and could also create risks of ‘decoupling·supply chain disruption’”. The spokesperson added that “we will closely assess the impact of EU policies on the interests of Chinese companies and on the China·EU industrial and supply chains,” and that “we will take steps to safeguard the legitimate and lawful rights and interests of Chinese enterprises”.

This was the sixth time this year that the Ministry of Commerce publicly criticized an EU measure. On January 1, regarding the Carbon Border Adjustment Mechanism (CBAM), which imposes costs based on emissions when exporting high-emissions products such as steel·aluminum to the EU, it criticized it as “protectionism in the name of green, and a double standard that contradicts the EU policy easing the ban on internal-combustion engine cars”.

On March 6, it expressed concern about the so-called Industrial Acceleration Act ((IAA·Made in Europe bill), which specifies ‘EU-made first’ in public procurement, saying it “could violate the most-favored-nation principle and increases investment uncertainty for Chinese companies”.

On April 24, after submitting an official opinion to the European Commission on the Industrial Acceleration Act, the ministry issued another statement formally warning that “if the EU ignores our views and pushes the bill through, harming the interests of Chinese companies, we will have no choice but to take countermeasures”.

On April 20, the ministry also protested measures related to the EU Cybersecurity Act to phase out equipment from Chinese companies in key infrastructure sectors, and on April 25, it publicly criticized the inclusion of Chinese companies on the EU sanctions list against Russia.

One analysis suggests that, as the trade deficit with China has increased, hardliners within the EU executive have gained influence. As European countries become more dependent on China, hardliners arguing for checks on that dependence gain strength, and they in turn introduce restrictions on China, intensifying the backlash from China.

Euronews on the 28th of last month assessed that “the EU has pursued a balance strategy for years, but recently the influence of hardliners within the Commission has been growing”. It added, “Europe also relies heavily on imports from China, just as China depends on Europe,” and reported that “member states are divided in their views (on the hardliners)”.