Mainland firms pull out of solar projects in EU amid Brussels subsidy inquiry
Two mainland companies have withdrawn from solar projects in Europe after being investigated by Brussels authorities for alleged receipt of foreign subsidies.
Subsidiaries of Longi Solar and Shanghai Electric were bidding for contracts as part of a photovoltaic park construction in Romania.
The European Commission, however, opened two investigations last month under its foreign subsidies regulation following suspicions that the firms had used state subsidies to undercut rival bids.
On Monday, the commission announced it had closed the investigations after the companies withdrew their bids.
“We are massively investing in the installation of solar panels to decrease our carbon emissions and energy bills, but this should not come at the expense of our energy security, our industrial competitiveness and European jobs,” European Union industry chief Thierry Breton said.
The first solar entity that came under official scrutiny was a consortium involving a German subsidiary of Longi Green Energy Technology. Hong Kong-listed Longi is the world’s biggest manufacturer of solar panels and is headquartered in Xian.
The second investigation concerned two subsidiaries of Shanghai Electric Group, a stateowned company.
The subsidies regulation became part of the EU economic defence arsenal last year. Its first four deployments, all this year, have targeted mainland firms.
The first inquiry was into CRRC Qingdao Sifang Locomotive, which had hoped to provide 20 electric push-pull trains and their maintenance to the government in Bulgaria. However, the firm pulled its bid weeks after EU regulators launched their investigation.
Separately, preliminary investigations are targeting unnamed mainland companies in the wind turbine sector amid suspicion that components used in finished turbines received marketdistorting state subsidies.
The regulation’s most dramatic moment came last month when commission officials and local governments raided the Polish and Dutch premises of Nuctech, a maker of airport and cargo-scanning machines, which authorities in Europe had flagged as a security risk.
The raids, which mainland business groups said went on for four consecutive days, were carefully calibrated to send a political message to Beijing.
Going after Nuctech, which has deep links to the Communist Party, was seen as showing EU concern over a growing conflation of party and corporate interests.
The inquiries were discussed last week during President Xi Jinping’s state visit to France.
The foreign subsidies regulation has added a layer of drama to the EU’s push to level the business playing field with Chinese competitors. It does not focus on whether state subsidies distort exports or imports, but rather their impact on firms that operate within the EU market.
Local subsidiaries of Chinese firms can be investigated for subsidies received by a parent company on the mainland if they are found to have given them an upper hand in competing in Europe.