The EU Challenges China on 5G and Electric Cars

Politics - July 11, 2023

The European Commission is preparing to face Beijing on Two Pillars of the Green Transition so Desired by World in Recent Months.

According to the European Community, the company Huawei and ZTE literally put the safety of users at risk, especially in relation to mobility, on which duties, already hypothesized during the course of last year, are being evaluated. The European Commission, in the strategy adopted to avoid any risks, is preparing to confront China on two elements considered very relevant relating to the green and digital transition such as the 5G network and electric cars with all the consequences related to their production and marketing , especially in the old continent.

The Chinese telecommunications giants, Huawei and ZTE, are at the center of the tug-of-war for domination over 5G and, for the current European executive, pose risks for the security of the European Union, so much so as to probably risk a total ban on their supplies, also with the exclusion of any funding and projects from the European Union. Based on the large amount of information collected and made available in recent weeks, the European Commission believes that Huawei and ZTE actually pose materially higher risks than other 5G providers as evidenced by an official data analysis document. The Commission will therefore take measures to avoid exposure of its corporate communications to mobile networks using Huawei and ZTE as providers.

According to the European Parliament it is no longer possible to maintain critical dependencies that could become counterproductive in the commercial and communication dynamics of all of Europe. It would be too obvious a vulnerability and a decidedly serious risk for all the common security of the Union, as confirmed by the European Commissioner for the Internal Market, Thierry Breton, who also convened a press conference to announce the decisions under consideration about the situation.

In addition to the Commission’s clear stance, under alleged pressure from France, the official launch of an investigation is also being considered which could allow Brussels to impose trade duties on all electric cars produced in China and destined for the European market. According to what was revealed by a french politician, the Paris government is asking for a reaction from the Berlaymont Palace to protect the EU market from Beijing’s subsidies to its zero-emission car sector which, with such productive power, could increase dependence of Europe from the Asian country in terms of clean technologies that are increasingly in demand in view of the ecological transition.

Breton himself, as French commissioner, said he was very much in favor of the opening as soon as possible of an anti-dumping investigation into electric cars from China in the shortest possible time. The fear expressed by the Commission, in addition to unfair competition, is also linked to the possibility that China could take over an important slice of the European car market, as has already happened in the photovoltaic panel market currently monopolized by Beijing’s products.

However, European countries such as Germany fear that the Chinese government may respond to any EU tariffs with countermeasures of similar scope to the detriment of European companies exporting to China. Such a controversial issue could therefore lead to a rift within the alliance between Germany and France at the next European Council. A first guideline presented by the Commission on the age-old matter of Chinese technology exported to Europe should instead arrive next week, when the EU executive will finally unveil its plan for economic security, which has the objective, among other things, to reduce the risk of new dependencies on foreign powers deemed to be against the EU market.