China Accuses EU of Protectionism in Wind Turbine Subsidy Investigation

China has accused the European Union of protectionism and "reckless distortion" of the definition of subsidies in response to a new EU investigation into Chinese wind turbine makers.

A Chinese trade remedies official made "solemn representations" in a meeting in Brussels with the EU director general for trade defense, expressing concerns about the lack of openness and transparency in procedural standards during the investigation.

The Chinese Commerce Ministry stated, "The European side's reckless distortion of the definition of subsidies and the lack of openness and transparency in procedural standards during the investigation is a protectionist act that harms the fair competition environment in the name of fair competition."

New EU Investigation

The investigation opened by the European Union on Tuesday is the latest against Chinese companies announced in the past two months under a new EU regulation. The investigation will examine whether Chinese subsidies are giving wind turbine companies an unfair advantage in the competition for projects in five member countries: Spain, Greece, France, Romania and Bulgaria.

EU Commissioner's Statement

The EU commissioner for competition, Margrethe Vestager, emphasized, "We're making full use of the tools that we have," in announcing the move.

A Chinese business group in Europe described the investigations as "an act of economic coercion" that undermines the EU’s commitment to reducing greenhouse gas emissions.

The China Chamber of Commerce to the EU stated, "This action sends a detrimental signal to the world, suggesting discrimination against Chinese enterprises and endorsing protectionism."

Previous Investigations

The EU also announced investigations last week into two Chinese solar panel makers bidding for a 455-megawatt solar park in Romania. An earlier EU probe into the procurement of 20 electric trains in Bulgaria was dropped last month after the Chinese bidder withdrew from the competition.

Vestager, delivering a speech in the United States on technology and politics, called for a more systemic EU approach to address the issue. She expressed urgency, stating, "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."

Chinese Perspective

China believes the investigations are "targeting an obvious direction," undermining the confidence of Chinese companies to invest and trade in Europe and affecting global efforts to combat climate change, the Commerce Ministry statement said. The EU also launched an investigation last October into Chinese subsidies for electric vehicles as exports from China to Europe rise.

Vehicle Exports from China

China's vehicle exports, including trucks and buses, rose 33.2% in the first three months of this year to 1.3 million units, as per the China Association of Automobile Manufacturers. Exports of electric vehicles were up 7.3% to 248,000 units. Passenger cars accounted for 1.1 million of the total.

The U.S. treasury secretary, Janet Yellen, raised similar concerns on a recent visit to China, calling for changes in a Chinese industrial strategy that she said has "the potential to flood our markets with exports that make it difficult for American firms to compete."