BEIJING, Oct. 14 (Xinhua) -- The consensus reached between China and the European Union (EU) on hybrid and electric vehicle trade will help stabilize industry expectations on both sides and ensure the smooth operation of automotive industrial and supply chains, the China Association of Automobile Manufacturers (CAAM) said on Wednesday.

The consensus follows intensive bilateral talks under the China-EU trade and investment consultation mechanism, guided by the principles of mutual respect and equal consultation, the CAAM said in a statement.

As major global economies and automotive markets, China and the EU have strong industrial complementarity and broad scope for cooperation, the association said.

Managing differences and properly addressing trade frictions through institutionalized consultations, replacing confrontation with dialogue and resolving disputes through cooperation, are a rational choice that serves the fundamental interests of both sides, the CAAM noted.

Escalating trade tensions would raise business costs, disrupt normal market order and harm consumers, while hindering the automotive industry's transformation and upgrading, the CAAM said.

Regarding hybrid vehicles, the two sides emphasized and confirmed three basic principles: respect for facts, non-discrimination and compliance with World Trade Organization rules.

On electric vehicles, China and the EU achieved a "soft landing" in the EU's anti-subsidy case in January this year, with the bloc issuing a general guidance document on price undertakings. The EU will continue to advance relevant procedures concerning price undertakings by companies involved in the case, as well as other review procedures.

The consensus will provide a more predictable environment for automotive companies to pursue trade and investment cooperation and help safeguard the shared interests of industry players and consumers on both sides, the CAAM said.

The association said it would continue to promote industry dialogue and coordination, support China and the EU in working together under their trade and investment consultation mechanism to implement the consensus and properly resolve differences, and jointly uphold a fair, open and non-discriminatory international trading environment.