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Brussels has launched an investigation into financial support for Chinese wind turbine companies as it steps up efforts to protect its domestic industry from cheap competition.
Margrethe Vestager, the EU's top competition enforcer, said the investigation would examine whether Chinese companies involved in wind parks across Europe may have benefited from state support from Beijing.
The investigation will use the European Commission's new powers designed to clamp down on market-distorting subsidies from foreign governments as Brussels seeks to defend itself from unfair competition from abroad, including Beijing.
Vestager said investigators would study “the conditions for the development of wind parks in Spain, Greece, France, Romania and Bulgaria.”
The investigation comes days after the Commission launched investigations into two consortia bidding to develop a solar energy park in Romania, including Chinese solar panel manufacturers.
In February, the Commission launched a similar investigation into Chinese state-owned company CRRC's offer to supply trains in Bulgaria, at half the price of a European competitor. The CRRC later withdrew from the process.
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In a speech at Princeton University, Vestager said Brussels should move away from the practice of “punch-in-the-mole” in individual cases and instead use its full powers to defend its interests against unfair trade practices by China.
“We've seen the rules of the game for how China dominates the solar panel industry,” she said. “First, attract foreign investment to its large domestic market, which usually requires joint ventures.”
“Secondly, access to technology, not always above par,” she added. “Third, grant huge subsidies to local suppliers, while simultaneously and gradually closing the domestic market to foreign companies. Fourth, export surplus energy to the rest of the world at low prices.
As a result, less than 3 percent of solar panels installed in the EU were produced on the continent, Vestager said. Many factories have closed their doors in recent months, saying they cannot compete with Chinese imports.
China's exports of green technology have swelled in recent months with the opening of factories. The increase in electric car imports prompted the Commission to open an anti-subsidy investigation last year, which is supposed to end in July and could lead to tariffs.
Chinese officials claim that their products are simply better.
Ping Gang, Minister of Economic and Trade Affairs at the Chinese Embassy in Brussels, wrote on Monday that EU-China cooperation was a “win-win.”
He noted that some in Europe attributed the success of Chinese companies to subsidies – while at the same time the European Union was providing significant subsidies to companies that were struggling to compete.
He added: “The secrets behind the spread of Chinese products at the global level have never been so-called subsidies, but rather the diligence, innovation and competitive awareness of generations of Chinese entrepreneurs.”
