Brussels will investigate Chinese state subsidies for electric cars, EU chief Ursula von der Leyen said Wednesday, vowing to defend Europe's industry against "artificially low prices".
"Global markets are now flooded with cheaper Chinese electric cars. And their price is kept artificially low by huge state subsidies," von der Leyen said, during the annual State of the Union speech at the European Parliament in Strasbourg.
This could lead the European Union to impose duties on those cars that it believes are unfairly sold at a lower price, thereby undercutting European competitors.
"Europe is open for competition but not for a race to the bottom," the European Commission president said.
France reportedly pushed von der Leyen to launch the investigation, but there are growing concerns in Europe about how much the continent relies on Chinese products.
The European Commission's internal market chief Thierry Breton last week warned about a trend emerging where Europe was "being relegated to net imports of electric vehicles or solar panels".
China could overtake Japan to become the world's largest car manufacturer this year, according to some experts.
France is particularly concerned that Europe will fall behind if it is not more assertive when confronted with China's actions that are more protectionist.
Von der Leyen has called on the EU to define its own approach to Beijing, although some of Europe's larger powers want to be cautious to avoid severing business ties.
Despite her strong comments, von der Leyen said it was "vital" for Europe to maintain "communication and dialogue with China".
"Because there are also topics, where we can and have to cooperate. De-risk, not decouple –- this will be my approach with the Chinese leadership at the EU-China Summit later this year," she added.
The EU's trade commissioner Valdis Dombrovskis will head to China next week, he said in a social media post, "to engage on trade and economic opportunities/challenges".
Fair and just transition to a carbon-neutral future
The EU, the commission president said, aims for a "fair and just transition" to a carbon-neutral future, balancing the climate change fight with the concerns of business and farmers.
She said she was "convinced that agriculture and protection of the natural world can go hand in hand -- we need both".
She also railed against "heavily subsidised Chinese competitors" that were squeezing European companies in the clean-energy sector, emphasising that "fairness in the global economy is so important".
In a fightback, she said Brussels would ensure a "fast-track" of permits for wind power installations.
And she said it would engage farmers in dialogue on the changes in store.
That responds to headwinds from her own conservative political family, the European People's Party (EPP), which has sought to slow von der Leyen's ambitious green transition goals.
The EPP, the biggest grouping in the European Parliament, says those ambitions unfairly burden farmers, who form a key constituency ahead of European elections next year.
Von der Leyen also spoke on how the bloc needs a "new strategic approach" to Africa as Russia makes strides on the continent.
"Think about the Sahel region, one of the poorest yet fastest growing demographically," the European Commission president said in her annual state of the EU address to lawmakers.
"The succession of military coups will make the region more unstable for years ahead. Russia is both influencing and benefiting from the chaos."
Von der Leyen insisted the EU needs "to show the same unity of purpose towards Africa as we have shown for Ukraine".
"We need to focus on cooperation with legitimate governments and regional organisations," she said.
The EU chief said Brussels would now work on drawing up "a new strategic approach" ahead of a future summit with the African Union.
The EU is still reeling from a coup in Niger in July, the latest to unseat a partner of the bloc in the volatile jihadist-hit region.
Moscow had made strides in recent years in strengthening ties with African governments, with Russian mercenaries playing a key role propping up a string of leaders.
The EU has struggled to convince African nations to come out against the Kremlin's war on Ukraine even as Russia's invasion has sent the price of grain higher.
Praise and support for Ukraine
Von der Leyen said that Ukraine has made "great strides" in its quest for EU membership, as Kyiv presses to open accession talks this year.
"The future of Ukraine is in our Union," the European Commission president said.
Ukraine was made an official candidate to join the 27-nation bloc last June in the wake of Russia's all-out invasion.
Kyiv is now urging the EU's member states to agree to move onto the next step of opening formal membership talks this year.
Von der Leyen's commission, the EU's executive arm, is expected to give its opinion next month on whether Ukraine is ready to begin negotiations.
"Accession is merit-based -- and the commission will always defend this principle. It takes hard work and leadership," von der Leyen said.
"But there is already a lot of progress. We have seen the great strides Ukraine has already made since we granted them candidate status."
The commission said in an interim report in June that Kyiv had completed two of seven reform benchmarks it had been set to open talks.
Ukraine, along with neighbouring Moldova, has joined a group of nations from the western Balkans who have been waiting for years to make progress on their bids to join the EU.
Von der Leyen said that the bloc must get ready to accept new members, without waiting to first change its own founding treaties.
The commission head told MEPs the EU should streamline its decision-making but "we cannot -– and we should not –- wait for treaty change to move ahead with enlargement," she said.
"A union fit for enlargement can be achieved faster," she said.
She said the commission would launch a raft of "policy reviews" to see how the EU could adapt in key areas if it expands, and put forward ideas to EU leaders in the first half of next year.
"These are questions we must address today if we want to be ready for tomorrow," she said.
Metsola: Time for EU reform
Addressing journalists before the debate, EP president Roberta Metsola said the State of the Union address marked the final sprint up to the elections next year after a difficult term for the parliament that saw Brexit, the pandemic, the illegal invasion by Russia of Ukraine, the climate emergency and an energy crisis.
She acknowledged that the time had come for the European Union to reform, reboot and to answer the questions citizens ask the institution.
Reflecting on enlargement of the EU, she said the EU that works for 27, will not work for 33 or 35 members.
"I think we can be more agile financially and structurally, and look for the change people expect from us," she added.
When asked if she would support von der Leyen if she were to seek a second term as commission president, Metsola said von der Leyen had done a "fantastic job" during this difficult mandate.