EU initiates inquiry into Chinese wind turbine manufacturers' subsidies

The European Union is currently looking into China's support for its wind turbine companies. This investigation is part of an effort to safeguard Europe's industry from an influx of inexpensive Chinese imports.

On Tuesday, Margrethe Vestager, the EU competition chief, announced that the probe will focus on the establishment of wind farms in countries such as Spain, Greece, France, Romania, and Bulgaria.

China, the world's largest manufacturer, is facing tensions with its major trading partners due to an oversupply of Chinese goods in key industries globally. This has led to a significant increase in the country's global trade surplus in goods, which is now nearing $1 trillion.

The announcement by Vestager in Princeton, New Jersey, comes shortly after the European Commission launched a separate investigation into subsidies given to Chinese companies participating in a bid for a solar farm contract in Romania.

The commission is utilizing new powers granted by the Foreign Subsidies Regulation to tackle market distortions caused by subsidies from foreign governments and to ensure fair competition for EU companies.

Vestager pointed out the significant subsidies given to domestic suppliers as a tactic used by China to dominate the solar panel industry.

This photo shows an aerial view of shipping containers stacked at the Lianyungang Port in Lianyungang, in eastern China's Jiangsu province on March 26, 2024.

This photo shows an aerial view of shipping containers stacked at the Lianyungang Port in Lianyungang, in eastern China's Jiangsu province on March 26, 2024.

STR/AFP/Getty Images

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A large number of inexpensive products from China are overwhelming the global market and causing trade conflicts.

She mentioned that currently, less than 3% of the solar panels used in the EU are made in Europe. China is employing a similar tactic in various clean technology sectors by selling surplus products to other countries at reduced rates.

Vestager emphasized the importance of avoiding a repeat of the issues seen with solar panels on other technologies like electric vehicles, wind, or essential chips.

The European Commission initiated an investigation in October into China's subsidies for electric vehicle manufacturers. The concern is that these subsidies may allow the companies to maintain very low prices, leading to unfair competition with European counterparts.

Beijing is placing a high priority on exports to help boost China's economy, which has been slowing down. They are now concentrating more on exporting higher-value products in industries that are considered strategically important by Europe and the United States. This is part of their efforts to make their economies more environmentally friendly and reduce pollution that contributes to global warming.

Editor's P/S:

The EU's investigation into China's support for its wind turbine companies is a timely and necessary step to protect the European industry from unfair competition. China's practice of subsidizing its domestic suppliers has allowed it to dominate the solar panel industry, and it is now employing a similar tactic in other clean technology sectors, including wind turbines. This is a threat to European companies and jobs, and it could also lead to a repeat of the problems seen with solar panels, where European manufacturers have been driven out of business by cheap Chinese imports.

It is important to note that China's oversupply of goods in key industries is a global problem, and it is not just the EU that is taking action. The United States has also launched investigations into China's subsidies for electric vehicle manufacturers, and other countries are likely to follow suit. This is a clear indication that the international community is becoming increasingly concerned about the impact of China's unfair trade practices.