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Both the Covid pandemic, and Russia’s brutal war in Ukraine, have shown us our vulnerabilities. Europe and the US, each in their own way, depend on third countries for critical technologies, and the raw materials needed to produce them. And in this area, China has built- up a strong position, not always playing fair.
China is for us simultaneously a partner, an economic competitor, and a systemic rival. And the last two dimensions are increasingly converging.
We saw the playbook for how China came to dominate the solar panel industry. First, attracting foreign investment into its large domestic market, usually requiring joint ventures. Second, acquiring the technology, and not always above board. Third, granting massive subsidies for domestic suppliers, while simultaneously and progressively closing the domestic market to foreign businesses. And fourth, exporting excess capacity to the rest of the world at low prices.
The result is that nowadays, less than 3% of the solar panels installed in the EU are produced in Europe. We see this playbook now deployed across all clean tech areas, legacy semiconductors, and beyond – as China doubles down on a supply side support strategy, to address its economic downturn.
Our economies cannot absorb this. It is not only dangerous for our competitiveness. It also jeopardises our economic security. We have seen how one-sided dependencies can be used against us. And this is why Europe, just as the U.S., is reacting.
In October last year, the European Commission launched an anti-subsidy investigation into the imports of electric vehicles from China. If we determine that those electric cars have been illegally subsidised, we will impose remedies.
In the last few weeks, we have also launched investigations under our Foreign Subsidies Regulation. Every time we suspect that any foreign company has been unduly advantaged in a public tender, we dig further. We have investigated suspicious bids in a public tender for trains, in Bulgaria, resulting in a Chinese state-owned company withdrawing its bid. Just last week, we opened investigations into bids by Chinese companies that may have been unduly advantaged in a public tender for solar panels, in Romania.
Furthermore, I can announce that today, we are launching a new inquiry into Chinese suppliers of wind turbines. We are investigating the conditions for the development of wind parks in Spain, Greece, France, Romania and Bulgaria.
As you can hear, we’re making full use of the tools that we have. But I can’t help feeling that this is also playing whack-a-mole. We need more than a case-by-case approach. We need a systematic approach. And we need it before it is too late. We can’t afford to see what happened on solar panels, happening again on Electric vehicles, wind or essential chips.
Let me be clear: the investments that we put in our supply chains, the investigations that we run, or the new tools we have developed – those are not meant to constrain China’s success. They’re meant to restore fairness in our economic relations. Everyone is welcome to be successful. Everyone is welcome to trade with Europe. But they have to play by the rules.
As we further develop the strategy for clean technologies, we must reflect about the question of trustworthiness. These products become connected. And more and more, they are an essential part of our critical energy and transport infrastructure. So, we must make sure that we can trust them, and we can make sure that they uphold our values.
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Source: European Commission
Speaker: Margrethe Vestager, Executive-Vice President
Format: Speech
China Policy Research 