The head of EU Trade Commissioner Karel De Gucht’s cabinet has told EURACTIV that the bloc has many worries about a clean-tech trade war with China over unfair subsidisation of solar panels, but that its hands are tied.
Last July, the EU launched an anti-dumping inquiry into claims by the German solar panels manufacturer, Solarworld AG, that Beijing had unfairly granted state loans to EU solar panel imports worth some €21 billion.
China responded by filing a suit against Italy and Greece at the World Trade Organisation, claiming that they had unfairly subsidised their own solar panel producers.
“There are plenty of concerns [within the EU],” Marc Vanheukelen told EURACTIV yesterday (26 February) on the sidelines of an EU-China think tank meeting, “but what do you want us to do? We have EU law to respect. When a complaint is submitted we can’t put it in the bin.”
European investigators are currently in China, Vanheukelen said, and in May the Commission will decide whether to impose provisional duties on Chinese solar panels. These could be made permanent later in the year.
“It’s only after the provisional duties have been adopted or put forward that there can be a discussion on undertakings,” he said. “Before that there is no way you can negotiate.”
However, contacts between the EU and Chinese government are ongoing and reports suggest that the leadership transition in China may be complicating matters.
Chinese changing of the guard
Next month, Xi Jinping will assume the Chinese Communist party’s presidency but the identities of other government officials are as yet unknown.
EU sources have complained to Reuters that in the meantime, Beijing is “stonewalling” by directing all messages to the outgoing Commerce Minister Cheng Deming and refusing to clarify trade positions.
“Right now we’re very much in transition,” Vanheukelen conceded. “We used to work a lot with Wang Qishan, who is one of the ‘Top 7’ and that will continue.”
“But we’ve got to meet the next person in charge of Mofcom [the commerce ministry],” he added. “We worked with Chen Deming but he’s definitely not returning.”
Analysts do not expect the incoming Chinese officials to reduce the influence of state-owned enterprises in their industry, despite Western wishes.
"The new leadership inherited the 12th Five Year Plan and were part of its making so you shouldn’t expect major changes,” Isabel Hilton, editor of China Dialogue, told a Greening China conference in Brussels on 13 February. “They’re working to the same plan with just a few adjustments.”
Green leverage points
But contributions from several speakers at the conference pointed to unexpected green leverage points for the EU that could arise in the months ahead.
While most of the environmental targets in Beijing’s 11th Five Year Plan were missed, the scale of the ongoing environmental crisis facing China is enormous, with air and land pollution alone costing over $100 billion annually, or 5.8% of GDP growth.
That was something that Europe might be able to help with, the EU’s chief climate negotiator Artur Runge-Metzger hinted, although not directly in the context of the solar spat.
“We can provide a lot of experience at the local municipality level,” he said. “Many of these problems have been faced by European capitals as well.”
Such knowledge and technology exchanges will require clear lines of communication though, which for the moment simply do not seem to be there.
“Right now, it’s business as usual,” Vanheukelen said at yesterday's Interel event, adding that there was in effect “no-one in town” for the EU to talk to.