Solar protective measures to hurt Sino-EU ties
The European Union is reportedly planning emergency support measures, including an antidumping probe, for Europe’s solar panel manufacturing industry to counter what it considers a flood of cheap Chinese imports.
Four European factories have shut down or announced plans to do so in recent weeks mainly due to increasing Chinese competition, prompting calls from the sector to “deal with the Chinese threat”. The European Solar Manufacturing Council warned that the bulk of Europe’s manufacturers — which were already “on the brink” — could be shut within three months if no emergency actions are taken.
It is not uncommon for some European policymakers to blame China for the industrial woes that Europe faces during the energy transition process. Should any safeguard measures be put into place against Chinese solar power companies, it would be the second time that Europe resorted to trade protectionism after the EU initiated an anti-subsidy investigation last October into imports of Chinese electric vehicles.
The latest move bodes ill not only for smooth development of Sino-EU economic and trade relations, but also for Europe’s ambitious goal of having 45 percent of energy generated by renewables by 2030. History shows that trade barriers would create a “lose-lose situation” and they would leave the realization of the bloc’s climate goals in question.
China now holds a pivotal position in the global solar energy supply chain, producing more than 90 percent of the silicon wafers that go into solar panels and more than three-quarters of the world’s solar panels, mainly thanks to innovative efforts by Chinese high-tech enterprises and economies of scale.
In comparison, Europe produces fewer than 3 percent of the solar panels needed to meet the bloc’s 2030 solar power targets. Implementing any trade protectionist measures targeting Chinese producers would surely disrupt the market. “Today the Chinese are not only the most competitive on price, but also on quality”, as Henning Rath, chief supply chain officer at German solar installer Enpal, which sources solar panels from China, said.
Actually, the EU initiated antidumping measures against Chinese solar cells, wafers and panels in 2013, only to lift them five years later to increase the supply and boost renewable energy installation.
China and the EU, as the world’s two major markets, should conduct negotiations to try to resolve their solar panel dispute in the spirit of maintaining an open, fair, just and nondiscriminatory business environment in compliance with the World Trade Organization rules. Any move aimed at erecting trade barriers goes against the trend of the times and risks hampering their joint efforts to address climate change, which is at the core of China-EU strategic partnership.