China repels EU allegations of export subsidies

 Liu Yandong, 2nd from the right, Markus Ederer, Head of the Delegation of the EU in China, 1st from the left, and Androulla Vassiliou, 2nd from the left. Androulla Vassiliou, Member of the EC in charge of Education, Culture, Multilingualism and Youth, embarked on a visit to Beijing. During her visit, Androulla Vassiliou met with Liu Yandong, Chinese State Councillor, to take stock of the results so far of the People-to-People Dialogue launched in April 2012. (EC Audiovisual Services).


Liu Yandong, 2nd from the right, Markus Ederer, Head of the Delegation of the EU in China, 1st from the left, and Androulla Vassiliou, 2nd from the left. Androulla Vassiliou, Member of the EC in charge of Education, Culture, Multilingualism and Youth, embarked on a visit to Beijing. During her visit, Androulla Vassiliou met with Liu Yandong, Chinese State Councillor, to take stock of the results so far of the People-to-People Dialogue launched in April 2012. (EC Audiovisual Services).

A statement by the head of the EU Mission in Beijing, Markus Ederer, that the EU is not looking to start a trade war with China over dumping pricing or illegal subsidies, does not make good sense. His comments are contradictory to the fact that the Commission has launched aggressive investigations on two very important Chinese products sold in the EU, solar panels and steel.

And all that despite the fact that trade between the two parties reached the spectacular level of €460 billion last year. Their commercial exchanges constitute the largest bilateral commercial relation in the world. Cases under investigation by the EU for dumping or illegal subsidies cover only 1% of that trade bonanza. Of course it is not only trade that matters in the EU-China relations. The two sides support huge investment flows and have vested interest in each-other’s soil of paramount importance. But let’s follow the facts over the two cases in question, steel and solar panels.

On 6 September 2012 the European Commission introduced an anti-dumping investigation on imports of solar panels and components originating from China. As if this was not enough to disturb the EU-China relation, the European Union’s executive arm last week said that there are enough preliminary findings about illegal subsidies on Chinese steel export to the EU and the Commission is planning to levy punitive tariffs on those products.

As it was expected, Beijing officials reacted strongly but not out of proportion. The port-parole of the Chinese Ministry of Commerce, Shen Danyang, stressed on Wednesday 16 January that this investigation by the Commission on Chinese steel producers is “unreasonable”. Of course the EU procedures take time and the application of punitive tariffs is not a simple decision by the Commission.

Steel, like solar panels

Until last week the most important EU Commission investigation over possible illegal subsidies or bumping pricing was in reference with the Chinese exports of solar panels. The European Sting had conducted an extensive investigation into the solar panel issue.

The findings of this investigation are exposing that the European Commission uses arbitrary criteria conducting this investigation, while the timing also is absolutely questionable. According to the European Sting’s investigation, the whole affair of Chinese solar panels shows that the Commission’s decision to launch an anti-dumping investigation is quite arbitrary and unfair. It is interesting to follow at this point the Sting. On 30 December 2012 this newspaper wrote:

“All along the years 2000s the installation of solar parks became a flourishing business and the European solar panel production was not enough to supply the exploding needs of the European markets.
Imports from China were the obvious solution; given their competitive selling prices and the good quality…The arrangement worked perfectly for many years…Unfortunately all good things do not last forever. The EU countries, which had been paying extravagant subsidies to electricity production from solar energy, started having problems of fiscal deficits and had to rethink this haemorrhage. Even from late 2011 and early 2012 the Greek and the German governments started discussing deep cuts of those subsidies…

The so abrupt cuts of the subsidies on electricity from solar energy, are expected to completely undermine the sector and create even more distortions…Investments and jobs in the internal solar panel production sector in Europe may collapse because of this sadden change of policy.

Then it seems that the European Commission had this idea to create artificial impediments and if possible, block altogether the EU imports of Chinese solar panels. In this way, what will be left of the business of solar park construction will forcefully turn to the more expensive and uncompetitive home production of panels…”

Same method

It seems however that the conclusions from this story with the Chinese solar panels and the European debt crisis apply also to steel products. All along the first decade of the new Millennium and mainly after the introduction of the euro in its physical form, the European Union had an unseen before long growth period. Even the Greek economy at the time was expanding with GDP rates of 5% to 6% annually.

As in the solar panel case, though, all those good things have an end. The same happened with the EU growth era. All along the good times Europe could not produce the quantities of steel it needed. So the EU found a very good solution with the quality and competitive price of Chinese steel exports. Now, that the EU economy is in recession and the steel products are not in high demand internally, EU producers of steel are incapable of competing with the Chinese firms. The growth times when everybody could sell their products have passed. As a result, the internal EU steel sector is threatened and many jobs are at stake.

Again the European Commission is about to make the Chinese pay for the European recession and the salvation of thousands of jobs in the European steel sector, instead of taking action to enhance internal growth. This is neither fair nor just. And more so at a time when the Chinese leadership, recognising the difficulties of Europe, has repeatedly supported with statements and loans the EU efforts to counter its sovereign debt crisis and recession.
The European Commission has better to rethink those two affairs, solar panels and steel, and reshape its policies towards a just and mutually fair relation with its strategic economic partner, China.

Advertising

Advertising

Advertising

Advertising

Advertising

the European Sting Milestones

Featured Stings

Stopping antimicrobial resistance would cost just USD 2 per person a year

Fail fast, fail better: 3 ways companies can master innovation

Cyprus Parliament says no to blackmail

To tackle climate change, we need city diplomacy

How transparency can help the global economy to grow

UN member states express their will to tackle global migration but specific actions are still missing

Civil society organisations disenchanted with “Youth Guarantee”

Food safety critical to development and ending poverty: FAO deputy chief

Hunger and obesity in Latin America and the Caribbean compounded by inequality: UN report

Long-term EU budget: MEPs lay down funding priorities for post-2020 budget

Eurozone: Despite anemic growth and shaky banks marks record trade surplus

EU confronts environmental threats as global leaders attempt to revive the global sentiment at NYC climate week

The China-US trade deal will be signed on time; the path is set

South Sudan’s foreseen genocide: from “Never Again” to “Again and Again and Again”?

US must abide by humanitarian refugee accords: UN refugee agency

The Catcher in the Rice

New Report Offers Global Outlook on Efforts to Beat Plastic Pollution

How populist and xenophobic movements in the EU tear apart European businesses and startups

Climate Change Revolution: by-laws for the world

EU tells Britain stay in as long as you wish

Here’s how the global financial crisis is still affecting your wages

ECB: A revolutionary idea to revitalize the European economy with cheap loans to SMEs

Who would pay and who is to gain from the EU-US free trade agreement

A Sting Exclusive: why the environment is important to your health, by UNEP’s Head for Europe

Four million Syrian children have only known war since birth: UNICEF

ECB asks for more subsidies to banks

Europe eyes to replace US as China’s prime foreign partner

Youth unemployment: think out of the box

Innovation can transform the way we solve the world’s water challenges

Commission’s spending totally uncontrolled

Could the fourth wave of globalization help to end epidemics?

Security Council urges countries to factor child protection into conflict prevention efforts

Talent is worldwide. Opportunity is not. How can we redistribute it?

EU-China Light Bridge in Brussels signals the bright coming of the Year of The Dog

Greece: Tsipras’ referendum victory does not solve the financial stalemate of the country and its banks

Safer products: stepping up checks and inspections to protect consumers

European Youth Vlog

US-North Korea summit in Singapore ‘a promising development’ says Guterres

World ‘not yet on track’ to ensure children a better future: UN rights chief

ECB should offer more and cheaper liquidity if Eurozone is to avoid recession

Human rights chief calls for international probe on Venezuela, following ‘shocking accounts of extrajudicial killings’

The 28 EU leaders show contempt for the European Elections results

EU Elections: new rules to prevent breaches of data used to influence elections

“Asia-Pacific takes stock of ambitious development targets”, written by the Heads of UNFPA and ESCAP

The importance of pre-departure training for a better understanding of global health issues

Does the West play the Syrian game in Egypt?

Building an Inclusive ICT Innovation Ecosystem

How blockchain can cut the cost of new medicine

SDGs and the historical and economic impact on Brazilian health

Nicaragua must end ‘witch-hunt’ against dissenting voices – UN human rights experts

3 ways to ensure the internet’s future is creative, collaborative and fair

China Unlimited Special Report: at the heart of Beijing

EU will not deliver on promises without democratic accountability

Iraq: UN demining agency rejects desecration accusations, involving historic Mosul churches

Gas pipeline in the European Union. (Copyright: EU, 2012 / Source: EC - Audiovisual Service / Photo: Ferenc Isza)

EU Investment Bank approves € 1.5bn loan for Trans Adriatic Pipeline (TAP)

Will Europe be a different place this Monday?

Easing funding woes for UN agency assisting Palestine refugees a ‘wise investment for today and the future’

EU prepares for the worst case scenario as Turkey seems to be withdrawing from the migration deal

The Irish Presidency bullies the Parliament over EU budget

At last some rules on banks

Humanitarian emergency in Venezuela was central debate of the EuroLat plenary

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s