China’s commerce ministry on Thursday strongly condemned the anti-subsidy investigation that the European Union has launched against Chinese electric vehicles, Kallanish reports.

A spokesperson for the ministry said in a press that China is highly concerned and dissatisfied with the matter, which it calls protectionism.

“China believes that the investigative measures proposed by the EU are indeed to protect its own industry in the name of ‘fair competition.’ It is an obvious protectionist act that will seriously disrupt and distort the global automotive industry chain and supply chain, including those of the EU,” the spokesperson says. “It will have a negative impact on China-EU economic and trade relations. 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 adds China has made a great contribution to global electrification and acts as an important partner to the EU. It notes that after years of development, Chinese and European auto industries have established extensive cooperation and “common interests.”

“EU automobile companies have invested and operated in China for several years, and the Chinese market has become the largest overseas market for many EU automobile companies. China has always been open and welcomes EU automobile companies to further expand investment in China, including investment in electric vehicles. In recent years, the EV business in China has developed rapidly. It is a result of continuous innovation and industrial chain construction... The EVs from China are popular among users around the world, including EU consumers, and have made great contributions to the global green transformation,” the spokesperson states.

The China Chamber of Commerce to the EU has also expressed opposition to Ursula von der Leyen’s decision. It defends that the quality and cost-effectiveness advantages of Chinese EVs are not based on huge subsidies, contrary to what the European Commission president claims.

Some industry experts in Shanghai estimate the investigation could potentially impact 20-40% of China’s total EV export volume, based on previous China-EU trade.

Von der Leyen said on Wednesday that the global market is “flooded” with cheaper Chinese electric cars with artificially low prices thanks to huge subsidies. “We do not accept this from the inside, we do not accept this from the outside,” she added, noting however that de plan is to de-risk, not decouple from China. (See related story)