EU Accuses China of Subsidy Distortions, Sparks Trade and Green Tech Dispute

In a move criticized by China as protectionist, the European Union has investigated Chinese wind turbine manufacturers over alleged unfair subsidies.

This latest action, which Beijing deems a "reckless distortion" of subsidy definitions, escalates tensions between the global powers, potentially affecting international green tech competition and climate change efforts. The probe targets Chinese companies' competitive edge in Spain, Greece, France, Romania, and Bulgaria, raising questions about the future of fair trade and environmental commitments.

EU's Green Tech Probe Stirs Controversy: China Calls for Fair Play Amid Subsidy Investigation

According to the Commerce Ministry (via Yahoo Finance), a Chinese trade remedies official made "solemn representations" during a meeting in Brussels on April 10 with Martin Lukas, the EU director general for trade defense.

"The European side's reckless distortion of the definition of subsidies, and the lack of openness and transparency in procedural standards during the investigation, is a protectionist act that harms the fair competition environment in the name of fair competition," the statement said

The European Union's investigation, launched on Tuesday, is the latest against Chinese companies announced in the last two months under a new EU regulation.

The investigation will examine whether Chinese subsidies give wind turbine companies an unfair advantage in bidding for projects in five member countries: Spain, Greece, France, Romania, and Bulgaria.

"We're making full use of the tools that we have," the EU commissioner for competition, Margrethe Vestager, said in announcing the move.

A European Chinese business group called the investigations "an act of economic coercion" undermining the EU's pledge to reduce greenhouse gas emissions.

"This action sends a detrimental signal to the world, suggesting discrimination against Chinese enterprises and endorsing protectionism," the China Chamber of Commerce to the EU said in a statement.

Last week, the EU also announced investigations into two Chinese solar panel manufacturers bidding for a 455-megawatt solar park in Romania. An earlier EU investigation into procuring 20 electric trains in Bulgaria was dropped last month after the Chinese bidder pulled out of the competition.

In a speech on technology and politics in the United States, Vestager referred to the approach as "whack-a-mole" and stated that the EU must address the issue more systemically.

"And we need it before it is too late," she said, according to a text of her prepared remarks. "We can't afford to see what happened on solar panels, happening again on electric vehicles, wind or essential chips."

China believes the investigations are "targeting an obvious direction," undermining Chinese companies' confidence to invest and trade in Europe and jeopardizing global efforts to combat climate change. The Commerce Ministry issued a statement.

The EU also investigated Chinese subsidies for electric vehicles last October, as Chinese exports to Europe increased.

The surge in Chinese Vehicle Exports Raises Global Trade Concerns Amid Calls for Fair Market Access

China's vehicle exports, including trucks and buses, increased 33.2% in the first three months of the year to 1.3 million units, according to the China Association of Automobile Manufacturers on Wednesday. Exports of electric vehicles increased 7.3% to 248,000 units. Passenger cars accounted for 1.1 million of the total.

The US Treasury Secretary Janet Yellen expressed similar concerns during a recent visit to China. She advocated for changes to China's industrial strategy, which she claimed has "the potential to flood our markets with exports that make it difficult for American firms to compete."

A German industry representative stated that low-cost Chinese goods contribute to Europe's environmental goals in the short term but "will destroy our industry" in the medium term.

"We have a dilemma here," said Maximillian Butek, the head of the German Chamber of Commerce in East China. "Because now at the moment it's solar, the next could be maybe wind power, etc. So, this is a balance the politicians need to find."

During his visit next week, the Chamber wants German Chancellor Olaf Scholz to raise German companies' concerns about market access in China.

Complaints about unfair trade practices are not new, but they have become important as Chinese companies emerge as domestic and international competitors.

"Especially against the background of increased entry of Chinese providers into the European market, a level playing field must be implemented," the German Chamber said in a survey of member companies released this week.

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