EU protectionism - EU to probe Chinese wind turbine suppliers

RT
Thu, 11 Apr 2024 07:43 UTC

Subsidy investigation aims to help protect bloc's industry from flood of cheap imports, Commissioner Margrethe Vestager has said

The European Union has launched a subsidy investigation into Chinese wind turbine companies, in an effort to shield domestic industry from competition posed by cheaper products.

Comment: Cheaper products from China, but not inferior as in the past.

Margrethe Vestager, the EU's competition chief, said on Tuesday the probe would examine whether Chinese firms participating in wind parks across Europe may have benefited from state support from Beijing. The probe will look into conditions for the development of wind parks in Spain, Greece, France, Romania and Bulgaria.

Vestager's announcement comes just days after the European Commission, the EU's executive arm, opened a separate subsidies probe into two Chinese consortiums bidding for a solar-farm contract in Romania.

"We saw the playbook for how China came to dominate the solar panel industry," Vestager stated during a speech in Princeton, New Jersey, citing "massive subsidies for domestic suppliers."

Comment: The EU lost the competition in the solar panel industry as it suffered the blowback from cutting off cheap Russian gas and closing down the nuclear energy sector. An example is the Swiss solar panel producer who is closing down a solar plant in Freiburg, Germany and moving it to the US where energy costs a lot less and where the US has offered massive tax credits to lure EU industry to resettle there. The US scheme is called "The inflation reduction Act", with the hidden aim to profit from and hasten the de-industrialisation of Europe.

• Germany's last major solar module producer to close in March
• Meyer Burger to shut down plant in Germany and pivot to the U.S.

"The result is that nowadays, less than 3% of the solar panels installed in the EU are produced in Europe," she said, noting that China was deploying the same strategy across other areas of clean technology, including "exporting excess capacity to the rest of the world at low prices."

Comment: Exporting excess capacity is not a new strategy and not unique to China. The US has used dumping of agricultural products for decades to crush competition in other countries and take over markets.

"We can't afford to see what happened on solar panels happening again on electric vehicles, wind or essential chips," Vestager stated.

The wind-power investigation will be held under new EU powers, allowing the Commission to crack down on market-distorting subsidies from foreign governments in order to defend the bloc from unfair competition from abroad, including China.

Comment: The EU gave themselves new powers to shut out other countries with better and cheaper products. The idea of a free market economy is a bitch when your competitors win.

In October, the Commission opened a probe into China's subsidies for electric vehicle makers, which it suspects may be enabling these firms to keep prices super-low, creating unfair competition with European rivals.

Comment: The EU is itself heavily subsidizing the push for electric vehicles but as it isn't competitive enough due to a strangling bureaucracy of pathological deviants and self defeating policies, then it is losing out.

Responding to Vestager's Tuesday announcement, the China Chamber of Commerce representing the country's business interests in Brussels expressed its "profound dissatisfaction" over what it called protectionism and a lack of transparency from the EU.

"This action sends a detrimental signal to the world, suggesting discrimination against Chinese enterprises and endorsing protectionism," the chamber argued.

Peng Gang, minister for economic and trade affairs at the Chinese embassy in Brussels, said that EU-China collaboration was a "win-win," noting that the EU was also offering large subsidies to European companies that were struggling to be competitive.

"The secrets behind Chinese products going global have never been the so-called subsidies, but diligence, innovation and competitive awareness of generations of Chinese entrepreneurs," the Chinese minister was quoted as saying by the Financial Times.

Comment: The EU is following the lead from the US hegemon and is blaming China and/or Russia for all their problems. The EU forgets that China also can play this game which could have severe consequences for EU businesses in China.

The EU does not look inward to see how they can make it more innovative, competitive and support entrepreneurs. Instead it likes to legislate, control and micromanage its citizens and thus has turned into what someone recently coined as a lenocracy.

Beyond Lenocracy

The word I came up with is "lenocracy." The first part of that word comes from leno, the Latin term for a pimp. Yes, what the word means is a government of pimps.

Let's unpack that phrase a little bit. If, as the saying goes, prostitution is the world's oldest profession, then pimping must be up there in the oldest half dozen or so. What makes a pimp economically interesting is that he adds no value to the exchanges from which he profits. He doesn't produce any goods or services himself. His role is wholly parasitic. He inserts himself into the transaction between the sex worker who provides the service and the customer who wants it, and takes a cut of the price in exchange for allowing the transaction to happen.

This kind of parasitic interaction is far from unusual in economics, but it's not always as common as it is now. There are societies and eras in which most economic activity is mediated by pimps of various kinds, and other societies and other eras in which such arrangements are relatively rare (and often harshly penalized). Right now, in the modern industrial world, we live in an economy where nearly all exchanges are subject not just to the exactions of a single pimp but to whole regiments of pimps, each of whom has to be paid in order for the exchange to take place. Furthermore, this orgy of pimping is sponsored, controlled, and mandated by government at all levels and by the holders of political and economic power more generally. Thus, lenocracy.