The European Union has initiated an investigation into China’s state support for its wind turbine companies in order to protect Europe’s industry from an influx of cheap Chinese imports. Margrethe Vestager, the EU’s competition chief, announced that the probe would focus on the development of wind farms in several European countries, including Spain, Greece, France, Romania, and Bulgaria. This move highlights the ongoing tensions between China, a major global manufacturer, and its trading partners due to the oversupply of Chinese goods in various industries worldwide, with China’s trade surplus in goods approaching $1 trillion.
Vestager made the announcement as part of a speech given in Princeton, New Jersey, shortly after the European Commission launched a separate investigation into the subsidies provided by Chinese companies bidding for a solar farm contract in Romania. These investigations are being carried out using new powers under the Foreign Subsidies Regulation, which aims to address market distortions caused by subsidies from foreign governments and ensure fair competition for EU companies. Vestager referenced China’s domination of the solar panel industry due to massive subsidies for domestic suppliers, which has led to the majority of solar panels installed in the EU being produced outside of Europe.
The EU is concerned about China’s strategy of exporting excess capacity to the rest of the world at low prices to gain market dominance in areas like clean technology, including electric vehicles, wind turbines, and essential components like chips. Vestager emphasized the importance of avoiding a repeat of what occurred in the solar panel industry in other sectors, stating that less than 3% of solar panels installed in Europe are produced domestically. The European Commission has also started an investigation into China’s subsidies for electric vehicle makers, suspecting that these subsidies may be contributing to unfair competition by enabling firms to keep prices artificially low.
China is increasingly focusing on higher-value exports as a way to boost its economy, particularly in industries that Europe and the United States consider strategically important as they work to transition to greener economies and reduce pollution. Beijing sees exports as a key factor in reviving its slowing economy, leading to increased competition with European rivals in industries like electric vehicles and wind turbines. The EU’s investigations into Chinese state support for wind turbine and solar panel companies reflect its commitment to ensuring fair competition within the market and protecting its own industries from the impact of cheap imports.
