China-europe user-side solar container subsidies

How will China's solar subsidies affect the solar industry?

The reduction in subsidies could place additional strain on China’s solar industry, which is already grappling with overcapacity and plummeting panel prices that threaten the viability of smaller manufacturers.

How does the EU deal with China's reliance on solar?

Rather than blocking Chinese products and reshoring manufacturing, the EU instead invests existing resources in wind energy and hydropower. It thereby offsets the risks emanating from the dependency on China in solar by developing greater capacity in sectors where European companies are still more competitive.

Are Chinese wind turbines subsidised by the EU?

Similar discussions have been held regarding subsidies to Chinese producers of wind turbines: in April 2024, EU Commissioner Margrethe Vestager (2024) announced the start of an investigation into Chinese wind turbines under the EU’s foreign subsidies regulation. These allegations must be taken seriously.

Why are Chinese solar panels coming to the EU?

Years of inaction on EU domestic industrial policy — coupled with an open-door policy for green tech — has led to an influx of Chinese solar panels into the EU market, despite concerns over materials sourced from the western province of Xinjiang, where the United Nations has uncovered human rights abuses against the Uyghur community.

Why are Chinese firms excluded from EU subsidies?

Chinese firms are excluded from receiving these subsidies based on joint criteria on trustworthiness and sustainability in supply chains agreed at the G7 level. As a consequence, they cease expanding their investments in the EU.

How many companies in China receive government subsidies in 2022?

The database also shows that in 2022 almost all listed companies in China (more than 99% in the database) have received direct government subsidies (Bruegel, 2024). Sources: Bruegel (2024), National Bureau of Statistics of China (2023) and Deutsche Bundesbank (2024); authors’ own currency conversion, calculation of ratios and illustration.