In Davos, the European Union threatens to investigate Chinese subsidies

First modification: 01/17/2023 – 18:04

More unity in the West to counter the external “monopoly”. That was the focus of the speech by the President of the European Commission, Ursula von der Leyen, this Tuesday, January 17, in Davos, Switzerland.

His proposal, called the ‘critical raw materials club’, seeks to strengthen the supply chains of the 27 countries together with the United States, Canada and the United Kingdom and thus be able to distance themselves from single suppliers such as China or Russia.

Along with this project, Von der Leyen unveiled an ambitious industrial plan for clean technologies that aims to create “economies of scale across the Atlantic or by establishing common standards” with countries such as the United Kingdom, Japan and the United States.

The Industrial Green Deal plan will focus on accelerating the raw materials bill, boosting investment for the zero-emissions industry, building skills to make that transition a reality, and sustaining win-win global trade.

“We will introduce a new Net-Zero Industry Act. This will follow the same model as our CHIPS Act. The goal will be to focus investment on strategic projects throughout the entire supply chain. We will especially look at how to simplify and speed up the procurement process of permits for clean technology production sites,” explained Ursula Von der Leyen.

European Union: “We will not hesitate to counter unfair trade practices”

“To maintain the attractiveness of the European industry, it is necessary to be competitive with the offers and incentives that are currently available outside the European Union (EU)”. Under this premise, Von der Leyen explained the strategies that the 27 will use to face it. to trade from China, Russia and the United States.

Since the arrival of the US Inflation Act, which has a scheme of 396,000 million dollars to subsidize green production, the members of the community bloc have not skimped on showing their concern about European trade. And understanding that not all EU countries have the same ability to support their businesses, European leaders have warned of possible unfair competition that could fragment the bloc and damage its single market.

Without giving details of the investment fund, the European leader explained that “as this will take some time, we will look for a temporary solution to provide fast and specific support where it is most needed.”

A direct message to China

Despite the fact that the EU threatened to open investigations to review bloc contracts that “are being distorted by subsidies from China”, Von der Leyen said that the 27 need to continue working and trading with Beijing and that in the short term they do not plan to disassociate themselves from the second largest economy in the world.

The community block is aware that China has promoted clean technology projects and is a leader in sectors such as vehicles and solar panels, but accused the Asian giant of encouraging companies that consume a lot of energy to move to its territory with promises of cheap energy. .

“China has been openly encouraging energy-intensive companies in Europe and elsewhere to relocate all or part of their production. They do so with the promise of cheap energy, low labor costs and a more lenient regulatory environment. At the same time China heavily subsidizes its industry and restricts access to its market for companies from the European Union,” Von der Leyen said in his speech.

China did not immediately respond to the EU accusations and focused its speech on the future of its economy. This Tuesday Beijing reported the second lowest GDP figure in the last 40 years and its officials gave a reassurance stating that the reopening of the country after three years of strict closures will allow them to return to normality.

With Reuters and AP