China launches investigation in response to EU reviews of solar, wind and other products

BEIJING – China on Wednesday announced an investigation into whether the European Union used unfair trade practices in its probes of Chinese companies bidding for projects in the 27-nation bloc, the latest in a burgeoning trade war between the two economic giants.

The investigation will focus on wind power, photovoltaics, safety equipment and electric trains, the Chinese Ministry of Commerce said.

The EU has introduced a new regulation to investigate companies bidding for projects within the European Union. This includes an investigation into whether Chinese subsidies give wind power companies an unfair advantage when competing for projects in Spain, Greece, France, Romania and Bulgaria.

In response to the investigation, China accused the European Union of protectionism and a “reckless distortion” of the definition of subsidies. The EU has also investigated Chinese companies that bid for a 455-megawatt solar park in Romania and for the procurement of 20 electric trains in Bulgaria.

The Chinese investigation is expected to be completed before January 10, but may be extended by three months until April. It was requested by the China Chamber of Commerce for Import and Export of Machinery and Electronic Products.

Last week, the EU imposed provisional tariffs on electric cars made in China. The subsidies are said to give Chinese car manufacturers an unfair advantage. In response, China has launched an investigation into European pork exports.

Both the EU and the US are concerned that cheap Chinese cars could overwhelm their domestic manufacturers and lead to layoffs. Chinese car exports rose by around 30 percent in the first six months of this year.