Selloff or Market Correction? Either Way, Here's What to Do NextSee Overvalued Stocks

EU probes on Chinese subsidies and imports

Published 05/05/2024, 10:18 AM
Updated 05/05/2024, 10:20 AM
© Reuters. FILE PHOTO: European?Union?flags fly outside the?European?Commission headquarters in Brussels, Belgium, March 1, 2023.REUTERS/Johanna Geron/File Photo

(Reuters) -The European Union launched an investigation into China's procurement of medical devices on Wednesday in a latest effort to protect home-grown manufacturers.

It has also launched several probes into whether Chinese clean tech producers are dumping subsidised goods on its market and whether Chinese-owned companies unfairly benefit from subsidies while operating inside the EU.

The European Commission, which is carrying out the investigations, says its aim is to prevent unfair competition and market distortion.

Here's what you need to know about the investigations:

MEDICAL DEVICES

The European Commission launched a probe into Chinese public procurement of medical devices, the EU's official journal said on April 24.

The investigation is the first under the EU International Procurement Instrument, which aims to prevent countries from unfairly favouring domestic suppliers.

If the Commission finds that European suppliers don't have fair access to the Chinese market, it could place restrictions on Chinese medical device companies bidding in EU public tenders.

The investigation is to be concluded within nine months, although the Commission can extend this period by a further five months.

WIND TURBINES

The EU is investigating subsidies received by Chinese suppliers of wind turbines destined for Europe, the bloc's anti-trust commissioner Margrethe Vestager said on April 9.

It will look into wind park development in Spain, Greece, France, Romania and Bulgaria, Vestager said without naming specific companies.

China said the probe was "discriminatory" against Chinese enterprises and endorsed protectionism.

SOLAR PANELS

The Commission opened two investigations under the EU Foreign Subsidies Regulation (FSR) into whether two Chinese bidders benefited excessively from subsidies in their offers in a public tender for a solar power park in Romania, it said on April 3.

The investigations concern a consortium composed of Romania's ENEVO and a unit of China's LONGi, and subsidiaries of Chinese state-owned Shanghai Electric Group.

The Commission has until Aug. 14 to take a decision on whether to block the contract, accept commitments from the companies to eliminate the distortion of competition, or not to object.

The Commission's first investigation launched under the FSR, concerning a Chinese train maker's participation in a Bulgarian tender for electric trains, ended after CRRC Qingdao Sifang Locomotive withdrew its tender.

ELECTRIC VEHICLES

The Commission said on Sept. 13 it would launch an anti-subsidy investigation into Chinese electric vehicles to determine whether to impose punitive tariffs on them.

It wants to find out if Chinese exports of EVs to the EU market are benefitting from excessive subsidies.

© Reuters. FILE PHOTO: European?Union?flags fly outside the?European?Commission headquarters in Brussels, Belgium, March 1, 2023.REUTERS/Johanna Geron/File Photo

China's commerce minister Wang Wentao said in April that U.S. and European assertions of excess Chinese EV capacity were baseless, while a Chinese industry body said the probe was stacked against Chinese manufacturers.

The investigation, officially launched on Oct. 4, will last up to 13 months. The Commission can impose provisional anti-subsidy duties nine months after the start of the probe.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.