German coalition parties seek tougher EU action against China, paper shows

By Andreas Rinke

BERLIN, Aug 28 (Reuters) - Germany's ruling conservative and Social Democrat parliamentary groups called on Friday for stronger European protection against unfair competition along with specific measures to support automakers.

Parliamentary sources said the proposals were aimed primarily at Chinese overcapacity, though the document seen by Reuters did not mention China specifically.

• The paper called for a "robust" response to "market-distorting practices and unfair competition," including faster and wider use of anti-dumping and anti-subsidy measures at EU level.

• This comes as German industry is increasing pressure on Chancellor Friedrich Merz to take a tougher line with Beijing, marking a shift in a country that long resisted trade barriers for fear of Chinese retaliation.

• Once the German government has developed local-content criteria that comply with EU law and can be harmonised across the bloc, these should be incorporated into Germany's existing electric-vehicle subsidy programme, addressing concerns that taxpayer-funded German incentives are also supporting imported Chinese electric cars.

• To support the country's auto industry, the parliamentary groups urged the European Commission to permit plug-in hybrids, range-extender electric vehicles and highly efficient combustion-engine cars alongside battery-electric cars after 2035.

• The parties also urged Brussels to suspend a planned tightening from early 2027 of the so-called utility factor used to calculate plug-in hybrid emissions. Under current plans, carmakers would have to sell significantly more electric vehicles from 2027 in order to meet mandatory fleet CO2 targets.

(Reporting by Andreas Rinke, writing by Maria Martinez;Editing by Elaine Hardcastle)