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Europe launches subsidies probe into Chinese wind turbine suppliers

<i>Yves Herman/Reuters via CNN Newsource</i><br/>Margrethe Vestager
Yves Herman/Reuters via CNN Newsource
Margrethe Vestager

By Hanna Ziady, CNN

London (CNN) — The European Union has launched an investigation into China’s state support for its wind turbine companies, intensifying a push to protect Europe’s industry from a flood of cheap Chinese imports.

Margrethe Vestager, the EU’s competition chief, said Tuesday that the probe would look into the development of wind farms in Spain, Greece, France, Romania and Bulgaria.

The move provides further evidence of tensions between China, the world’s biggest manufacturer, and its major trading partners resulting from the oversupply of Chinese goods in key industries around the world. The country’s global trade surplus in goods has soared in recent years and is now approaching $1 trillion.

On Thursday, a Chinese commerce ministry official responded that Beijing “firmly opposes” the investigation. The probe not only “seriously damages” the confidence of Chinese enterprises operating in Europe, but also interferes with mutually beneficial industrial cooperation between the two sides, the official said in a statement.

“It will also affect global efforts to address climate change and the process of green transformation.”

Vestager’s announcement as part of a speech in Princeton, New Jersey, came just days after the European Commission, the EU’s executive arm, opened a separate subsidies probe into Chinese companies bidding for a solar farm contract in Romania.

The commission is making use of new powers under its Foreign Subsidies Regulation, aimed at addressing market distortions caused by subsidies from foreign governments and ensuring that EU companies are competing on a level playing field.

“We saw the playbook for how China came to dominate the solar panel industry,” Vestager said, citing “massive subsidies for domestic suppliers.”

“The result is that nowadays, less than 3% of the solar panels installed in the EU are produced in Europe,” she added, noting that China was deploying the same strategy across other areas of clean technology, including “exporting excess capacity to the rest of the world at low prices.”

“We can’t afford to see what happened on solar panels happening again on electric vehicles, wind or essential chips,” Vestager said.

In October, the European Commission launched an investigation into China’s subsidies for electric vehicle makers, which it suspects may be enabling these firms to keep prices super-low, creating unfair competition with European rivals.

Beijing sees exports as a key measure to revive China’s slowing economy and is increasingly focusing on higher-value exports in industries that Europe and the United States see as strategically important as they seek to green their economies and reduce planet-heating pollution.

CNN’s Wayne Chang contributed reporting.

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