China targets EU pork “overcapacity” with anti-dumping investigation after Brussels action against electric cars

The investigation period for import dumping runs from January 1 to December 31 last year, while the period for assessing industrial damage covers four years, from the first day of 2020 to the last day of 2023, the ministry said.

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Electric vehicles manufactured in China face additional EU import tariffs of up to 38%

Electric vehicles manufactured in China face additional EU import tariffs of up to 38%

The investigation, which began on Monday, is unlikely to last longer than a year but could be extended by another six months, Mofcom added.

According to official customs data, Spain was China’s largest supplier of pork products under investigation in 2023, with shipments valued at over $1.5 billion. It was followed by the United States and Brazil.

The Netherlands, Denmark and France took fourth, fifth and seventh place respectively.

The investigation was launched in response to a formal request from the China Animal Agriculture Association (CAAA), which represents the Chinese pork industry and requested an anti-dumping investigation against imported pork from the EU on June 6.

“After receiving the application, the investigative authority examined it in accordance with relevant Chinese laws and regulations and in compliance with the rules of the World Trade Organization,” a Mofcom spokesman said on Monday.

“It considered that the complaint met the conditions for initiating an anti-dumping investigation and decided to initiate an investigation.

“The investigative authority will conduct the investigation in accordance with the law, fully protect the rights of all interested parties and make objective and fair decisions based on the investigation results.”

China is the world’s largest consumer of pork. The country of 1.4 billion people consumes around 700 million pigs every year – more than half of the world’s pork production.

Pork is a staple food in China, accounting for about 60 percent of the country’s total meat consumption. In 2023, China’s domestic pork production reached 57.94 million tons, and the country imported 1.55 million tons of pork, official figures show.

The EU is China’s largest importer of pork and pork products and will account for around 54 percent of total imports between 2020 and 2023, according to the CAAA application submitted by the Chinese Ministry of Customs, which cites Chinese customs data.

“Given that the EU has sold pork and pork products to China at low prices in recent years, this has had a (negative) impact on the Chinese pork industry, the related livestock industry and the interests of farmers,” the motion states.

The report cited the bloc’s consumption habits – such as avoiding the consumption of pork offal – and “massive” subsidies as reasons for the strong pork exports from the EU to China in recent years.

It went on to say that there is “huge overcapacity” in pork production in the EU – which is in line with allegations by Western politicians who blame China’s renewable energy industry for strangling their domestic manufacturing sector.

“As the world’s largest pork consumption market, China is extremely attractive for the EU. It is the EU’s largest pork export market and has naturally become the best destination for relocating excess production capacity,” the report says.

In its attacks on the pork trade, what is particularly important for Beijing is whether the growth in sales of this product on the Chinese market gives rise to an anti-dumping investigation under WTO rules, says Cui Hongjian, a professor at the Academy of Regional and Global Governance at Beijing Foreign Studies University.

And China could also have taken into account the fact that countries like Spain and France, which are major pork exporters to China, are also major supporters of increasing tariffs on electric vehicles, he said.

“But this may not be such a big factor because the problem is currently concentrated at the EU level and the bloc’s internal divergences are not what China should be most concerned about,” Cui said.

While Beijing may not be interested in escalating trade tensions or the “possibility of a trade war” “because that would hurt both sides,” Cui said, “China must at the same time remind the EU that it must take into account the extensive trade interdependence between us.”.

For months, mass protests have been taking place across Europe against the continent’s climate policy, as new regulations on greenhouse gas emissions could lead to a significant increase in production costs.

“So if Europe now does not properly manage its economic and trade relations with China – and that could ultimately damage Europe’s agricultural sector again – then I think Europe must seriously consider the consequences,” Cui said.

The European Union Chamber of Commerce in China said in a statement that China’s announcement was not surprising as it was not the first time that an investigation announced in one jurisdiction triggered another in return.

“The European Chamber of Commerce expects a fact-based investigation to ensure these principles for all market participants,” it said. “The Chamber encourages both sides to take action to depoliticize the business environment and find ways to address the underlying causes.”