China on Thursday warned that looking into Chinese state subsidies for electric vehicles would have a "negative impact" on economic and trade ties between the bloc and Beijing.

The Chinese commerce ministry deemed the decision to launch the probe to have been motivated by a desire to protect European markets from competition.

What Beijing has said

"China believes the investigative measures proposed by the European Union are in reality to protect its own industry in the name of 'fair competition'," the Commerce Ministry said in a statement.

"It is a naked protectionist act that will seriously disrupt and distort the global automotive industry and supply chain, including the EU, and will have a negative impact on China-EU economic and trade relations," it added.

China urged the EU "to carry out dialogue and consultation with the Chinese side, create a fair, non-discriminatory and predictable market environment for the joint development of the China-EU electric vehicle industry."

Response to Brussels

European Commission President Ursula von der Leyen had on Wednesday announced the anti-subsidy probe, pledging to protect the 27-member bloc's automakers against unfair competition.

China "will pay close attention to the protectionist tendency and follow-up actions of the European side, and firmly safeguard the legitimate rights and interests of Chinese enterprises".

The investigation could further strain the EU's ties with China which are already tense, in part due to trade and investment imbalances.

Last year, Beijing's exports to the EU rose 8.6% to $562 billion, as per Chinese customs data.

But imports from the EU plummeted 7.9% to $285 billion due to weaker Chinese demand and sharply widened the EU's trade deficit with the Asian giant for the second year.

dvv/rc (AFP, Reuters)