Brussels is escalating its protective measures for local industries by instigating an investigative probe into subsidies of wind turbine firms based in China, which are providing stiff, cheap competition. Margrethe Vestager, the European Union’s head of competition enforcement, explained that an effort will be made to establish whether Beijing’s state support has given Chinese wind farm companies an unfair advantage in Europe.
The inquiry will utilise new capabilities of the European Commission to combat the adverse effects of foreign governments’ market-disrupting grants, as Brussels seeks to safeguard itself from unjust global competition, including that from Beijing. The examination will include the proposed establishment of wind farms in Spain, Greece, France, Bulgaria and Romania, as stated by Vestager.
This is not the first time such an investigation has been launched. A few days earlier, the Commission began probing consortiums who seek to develop a Romanian solar park, including Chinese solar panel production firms. Likewise, in February, the Commission started a similar probe into state-owned company CRRC from China, who had offered to provide trains for Bulgaria at half the European market competitor’s price. CRRC has since withdrawn.
While speaking at Princeton University, Vestager suggested that Brussels should stop dealing with isolated cases, likened to a game of “whack-a-mole”, and instead, fully exercising its powers to combat China’s unjust trade practices. She elaborated on the strategy adopted by China to monopolize the solar panel industry sector, consisting of foreign investments and joint ventures, tech acquisition methods that may be questionable, lavish subsidies to domestic suppliers which at the same time, reduces foreign business access to China’s domestic market, and finally, exportation of overstocked products to global markets at reduced prices.
Vestager expressed concern over these practices which have resulted in less than three percent of solar panels installed within the EU being manufactured in Europe. Numerous manufacturing units have shut down, unable to compete with imported Chinese goods.
The exports of green technology products from China have skyrocketed lately, inspiring the Commission to instigate an anti-subsidy investigation that began last year and may result in tariffs being imposed from July. Nonetheless, Chinese officials maintain that their goods are superior.
Peng Gang, the Chinese embassy’s economic and trade affairs minister in Brussels, suggested on Monday that the partnership between the EU and China could be mutually beneficial. He countered claims by some European parties attributing the prosperity of Chinese firms to subsidies, pointing out that the EU was also providing substantial subsidies to their companies facing competitive challenges. Peng argued that the worldwide recognition of Chinese products wasn’t due to alleged subsidies, but rather to the hard work, creativity, and competitive mindset fostered by consecutive generations of Chinese businesspeople. – Copyright The Financial Times Limited 2024.