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.

the sting Milestones

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

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

‘Critical test’ for North Korea’s Government as civilian suffering remains rife, warns UN rights expert

Renewable energy could power the world by 2050. Here’s what that future might look like

Immigrant integration policies have improved but challenges remain

25 years on from genocide against the Tutsi, UN Chief warns of ‘dangerous trends of rising xenophobia, racism and intolerance’

Big impact vs big exit: the social side of the start-up game presented at the WSA Global Congress in Vienna

Half the world’s population is still offline. Here’s why that matters

IMF: European banks do not perform their duty to real economy

The battle for the 2016 EU Budget to shake the Union; Commission and Parliament vs. Germany

European Youth Event 2016 – bridge between youth and policy makers

How we measure stakeholder capitalism will determine our recovery

Energy security: The synchronisation of the Baltic States’ electricity networks – European solidarity in action

Jean-Claude Juncker and Theresa May at last week’s EU Council. Source: EC Audiovisual Services / Copyright: European Union, 2017 / Photo: Etienne Ansotte

EU leaders open “Phase Two” of Brexit talks and warn Theresa May of tougher times

To build a resilient world, we must go circular. Here’s how to do it

‘Favour dialogue’ over violence, UN chief urges all parties following clashes in Mali’s capital

Does the world have strong enough institutions to handle risks like Trump and Brexit?

Statement by the European Commission following the first meeting of the EU-UK Joint Committee

MEPs adopt Technical Support Instrument to speed up post-COVID-19 recovery

COVID-19 lets us see the world through a different lens

5G will drive Industry 4.0 in the Middle East and Africa

Germany and France only care about keeping their borrowing cheap

Security Council imposes arms embargo on South Sudan

‘Open, cordial, and frank discussions’ held over future Somalia-UN relationship

Draghi keeps the euro cheap, helps debt refinancing, recapitalization of banks and growth

Go early, go hard and keep it simple: how Senegal is staying ahead of the COVID-19 pandemic

Will Western Balkans respond positively to EU initiatives?

Bigotry makes politicians ‘complicit in the violence that follows’ : UN independent experts

This is what healthcare leaders see as the future for digital health

Closing VAT loopholes for sales through online platforms

“Our house is on fire.” 16 year-old Greta Thunberg wants action

UN calls for funds to ease ‘deteriorating’ humanitarian situation in Gaza and West Bank

EU and China sign landmark agreement protecting European Geographical Indications

A Californian city gave people $500 a month – no strings attached. Here’s what happened

‘Chance for peace’ in South Sudan finally within reach, declares UN Peacekeeping chief

The succesful cooperation

Hurricane Dorian: Bahamas death toll expected to rise as thousands remain missing

Nigeria: Armed conflict continues to uproot thousands, driving up humanitarian need

Here are three ways organizations can prepare for tomorrow’s world

Mobile technology saving lives: Changing healthcare systems with simple technology solutions

How powering food storage could end hunger

New Syria fighting represents ‘giant powder keg’, warns aid veteran, as he leaves UN stage

What the pandemic has taught us about science communication

These countries have the most nuclear reactors

Halt death sentences on children, UN rights expert urge Saudi authorities

COVID-19: Parliament approves crucial EU support measures

Parliament seals ban on throwaway plastics by 2021

This Dutch butcher makes plants taste just like meat

Upgraded EU visa information database to increase security at external borders

On the first day of 2019, over 395,000 babies to be born worldwide: UNICEF

Parliament sets conditions on EU-China investment deal

The three biggest challenges for India’s future

Lack of basic water facilities risks millions of lives globally: UN health agency

Trump blocks US warmongers from bombing Iran

Insecurity and violence turn Nigeria into a ‘pressure cooker’ that must be addressed, says UN rights expert

How young people can help respond to the coronavirus outbreak

Chart of the day: This is how many animals we eat each year

These are the top countries for travel and tourism in 2019

COVID-19 vaccines: EU must respond with unity and solidarity

NASA has released new photos of the Apollo 11 moon landing

How learning through play as a child can help you succeed as an adult

5G: How a ‘legion of robots’ could help save the rhino

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