Brussels has just granted permission to China manufacture and sell biofuels on European soil with the help of a company based in Cayman Islands. This is indicated in the archives of the European Commission consulted by OKDIARIO. This happens in the middle of a trade war between the two blocs, caused above all by the creation of duty for the Asian giant’s electric car.
In concrete terms, Brussels has approved the creation of a joint venture between Xiamen C&D Productsof China, and HMLYS II Holdings Limited, of the Cayman Islands. “The transaction primarily involves the production and sale of biofuels, including vegetable oil “sustainable hydrogenated aviation fuel,” explains the European Commission.
The Commission considers that the creation of this company “would not raise competition concerns, given that the joint venture has insignificant activities in the sector European Economic Area” currently. “The notified transaction was examined under the simplified merger review procedure,” he explains.
China will thus be able to sell and produce biofuels on European soil in the midst of a trade war. And this will be done by a company from the Cayman Islands.
The Cayman Islands are considered a tax havenwhich means they have a tax system favorable to businesses and individuals looking to minimize their tax liabilities. Specifically, they offer low or no taxes on income, capital gains and corporate profits.
In addition, the country has laws that guarantee a high level of confidentiality regarding the identity of business owners and bank accounts, which attracts international investors and companies looking for avoid paying taxes in their countries of origin.
These types of jurisdictions are also attractive for the creation of companies at seawhich allow companies to operate without a significant physical presence in the country and to benefit from tax advantages.
Trade war between Brussels and China
The trade war between Brussels and China has its origins in mid-2024 and the EU introduced it. 31 trade restrictions and investment measures against China, including 25 trade remedy measures, in addition to the launch of a Foreign Subsidies Regulation (FSR) investigation and an International Government Procurement Instrument (IPI) investigation against China, which have seriously hampered the economic cooperation and trade between China and the EU.
For its part, the government of the Asian giant, at the request of the country’s livestock associations, has begun to study a possible veto to the pork sector.
Chinese breeders denounce possible practices of dumping or unfair competition. Beijing’s investigation “should normally be completed by June 17, 2025,” although it could be extended by six months in special circumstances.
Another sector affected by the trade war is that milkmanIn an official statement, the country’s Ministry of Commerce said its recent decision was prompted by a request submitted in late July by the Chinese Dairy Association and the China Dairy Industry Association. These organizations have expressed concerns about dairy subsidies in the European Union.
In response to this request, the Chinese Ministry of Commerce issued an invitation for consultation to EU Government on August 7, to address issues related to this investigation anti-subsidies. Consultations then took place between Chinese and European authorities on August 14 to discuss relevant details of the ongoing investigation.
China had already warned that it “will take necessary measures to firmly safeguard the legitimate rights and interests” of its country following the customs tariffs imposed by Brussels on its electric cars.
In concrete terms, the tariffs imposed by Europe range from 17.4% to the manufacturer BYDup to 38.1% at SAICpassing through 20% for GeelyLast year, China sold 10 billion euros worth of cars to the European Union, doubling its turnover. market share up to 8%.
