A deeper look at state subsidies raises concerns about unfair advantage. The European Union has opened an inquiry into Wind Turbines supplied by Chinese vendors due to concerns that state subsidies from Beijing are harming domestic manufacturers on the continent.
The European Commission has opened an investigation into Chinese companies that produce wind turbines for usage in Bulgaria, Greece, Romania, Spain, and France. This will investigate if state subsidies have unfairly benefited Chinese suppliers, enabling them to undercut competitors and offer cheaper turbines. Half of the world’s supply of wind turbines comes from China, which is the largest producer in the world.
The inquiry intensifies EU scrutiny of Chinese subsidies because of concerns that large payouts are undermining fair competition for infrastructure contracts in Europe. China was criticized by Brussels’ competition commissioner, Margrethe Vestager, who ordered the probe, for oversupplying the market with low-cost knock-off technology.
She said: “When you go back to do business in Europe, what follows you are very cheap products which are produced with what seems to be a production capacity that is heavily subsidised, which makes it impossible to compete against it.”
According to Ms. Vestager, China has employed this strategy in the development of solar panels by giving local suppliers “massive subsidies” before saturating Europe with cheaper technology.
Approximately 40% of solar panels were supposed to be produced by European companies under the EU’s “Green Deal Industrial Plan,” but currently only 3% are, with the remainder coming from China.
Ms Vestager said: “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 US, is reacting.”
Chinese wind turbines are being sold in Europe for up to 50% less than European-made turbines, according to campaign group WindEurope, based in Brussels.
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