China said EU probes on wind, solar, and EV industries harm cooperation between the two economies. But Brussels has no other choice.
EU probes into China’s subsidies interfere with the cooperation between the two economies, the chief of the Trade Remedies Bureau, part of the Chinese Commerce Ministry, said. The remark came in a meeting with the EU’s head of trade defence Martin Lukas.
The European Commission launched this week a probe into Chinese subsidies on the manufacturing of wind turbines. The Commission launched a similar investigation into the Chinese electric car industry last year.
The European Union worries China’s government subsidies and subsequent overproduction flood the EU market with cheap products. In turn, this makes European products and work lose competitiveness.
Margrethe Vestager, the EU’s competition chief, compared the wind turbine industry with that of solar panels. “We saw the playbook for how China came to dominate the solar panel industry,” Vestager said. “The result is that nowadays, less than 3% of the solar panels installed in the EU are produced in Europe.”
In the early 2010s, the EU was the world’s largest producer of solar panels.
Vestager announced an investigation into the development of wind turbines in Spain, France, Greece, Bulgaria, and Romania. She did not specify the reason why those countries specifically.
“We can’t afford to see what happened on solar panels happening again on electric vehicles, wind or essential chips,” Vestager added.
The return of Chinese exports
In 2023, China disappointed international observers with low exports and weak internal demand, strangely dimming down the country’s post-COVID recovery.
However, data from early 2024 showed a strong comeback in Chinese exports. It also showed China became the leading producer of electric cars in the world, overcoming Japan and Germany.
At the annual “Two Sessions” conference, Chinese officials outlined plans for the future economic recovery. To replace the crippling real estate market, China will focus on three new products: solar panels, lithium-ion batteries, and electric cars.
Succeeding in these industries inevitably entails a clash with the European car industry, currently the biggest in the world. For this reason, the Commission is taking protectionist steps for EU industries.
The same official who said these probes interfere with EU-China cooperation also stated the EU "wantonly distorted the definition of subsidies, and the procedural standards were not open and transparent, which is a protectionist act that harms the level playing field in the name of fair competition."
The clash between two of the world’s largest economies will be fierce. The EU faces increasing competition from China but learned important lessons from the past.
