The European Commission is investigating whether or not two Chinese-linked corporations used state subsidies to undercut rival bids in a Romanian photo voltaic challenge.

Two probes have been launched beneath the European Union’s new overseas subsidies regulation, with the fee stating that it has “sufficient indications” that the corporations bidding for procurement contracts “have been granted foreign subsidies that distort the internal market”.

The first investigation issues a consortium involving a German subsidiary of Longi Green Energy Technology Co. Hong Kong-listed Longi is the world’s largest producer of photo voltaic panels and is headquartered within the Chinese metropolis of Xian. The second investigation issues two subsidiaries of Shanghai Electric Group Co, a Chinese state-owned firm.

It’s the second use of the EU’s overseas subsidies regulation to probe Chinese corporations since February. Photo: Shutterstock
Solar panels have become strategically important for Europe: for our clean energy production, jobs in Europe, and security of supply,” mentioned EU trade boss Thierry Breton.

“The two new in-depth investigations on foreign subsidies in the solar panel sector aim to preserve Europe’s economic security and competitiveness by ensuring that companies in our single market are truly competitive and play fair,” he added.

It marks the second use of the EU’s overseas subsidies regulation to probe Chinese corporations since February, and demonstrates Brussels’ willingness to make use of the business weaponry at its disposal to counter what it sees as unfair competitors from Beijing.

The inquiry, introduced in February, was the primary of its variety and marked the maiden use of the overseas subsidies regulation designed to cease state handouts from distorting the EU’s single market.

EU ‘absolutely willing’ to use trade tools against China: top official

CRRC Qingdao Sifang Locomotive Co, a division of state-owned rolling inventory producer CRRC Corporation, had hoped to offer 20 electrical push-pull trains and their upkeep.

After CRRC withdrew from proceedings, Breton mentioned that “in just a few weeks, our first investigation under the foreign subsidies regulation has already yielded results”.

The overseas subsidies regulation, which took impact final July, obliges corporations bidding for EU public procurement contracts value over €250 million (US$268.7 million) to be open in regards to the stage of state subsidies they acquired within the continuing three years, offered that was greater than €4 million (US$4.3 million).

While the EU avoids saying its commerce weapons are aimed toward China to keep away from breaching international buying and selling guidelines, it was lengthy anticipated that this regulation would hit Chinese corporations, given the widespread suspicions in regards to the ranges of presidency subsidies there.

Europe and China have tangled on photo voltaic earlier than: a commerce warfare flared within the sector 10 years in the past, and has threatened to rear its head in latest months after producers complained they had been being pummelled by low cost imports from the world’s second largest economic system.

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So far, Brussels has declined to slap new import tariffs or market entry restrictions on Chinese provides, regardless of the calls for of some producers.

In February, European photo voltaic panel producers known as for pressing curbs on Chinese entry to the EU photovoltaic (PV) market, which they mentioned was required in the event that they had been to save lots of their trade.

In a letter despatched to the European Commission, a bunch representing “nearly the entire European PV manufacturing industry” known as for “emergency measures” to safeguard the EU provide chain amid “significant oversupply” from China.

It claimed that oversupply of PV modules from China late in 2022 and thru 2023 had “triggered a drastic reduction in prices”, forcing European producers to scale back manufacturing and leaving shares “languishing” in warehouses.

The EU’s highly effective division of commerce determined in opposition to commerce measures, nevertheless, after noting the trade’s divisions on whether or not they can be useful.

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