EU launches subsidy probe into Chinese wind turbine maker Goldwind

The European Commission has launched an in-depth investigation into Chinese wind turbine maker Goldwind Science & Technology under the foreign subsidies regulation, a tool that has previously irked Beijing. The investigation will assess whether subsidies from the Chinese state illegally boosted the company’s position in the European market. The commission said a preliminary investigation found “indications” that Goldwind “may have been granted foreign subsidies that distort the internal market”. The foreign subsidies regulation (FSR) was adopted in July 2023 and since then has been used frequently against Chinese companies in sectors such as railway rolling stock, solar energy and security scanning. An early-stage probe into electric vehicle giant BYD’s Hungarian manufacturing base is also under way. Sources said that the tool would be widely used against Chinese operators this year as the commission cracks down on what it sees as market distortions caused by Beijing’s economic policies. The South China Morning Post understands that further probes into the rolling stock sector can be expected. The China Chamber of Commerce to the EU expressed “serious concern and strong opposition to the repeated and disproportionate use of the FSR to scrutinise Chinese-invested companies”. “The ongoing pattern of scrutiny is deterring Chinese investment and limiting fair access to EU public procurement,” it said. At a press conference in Brussels, the commission confirmed that other Chinese wind turbine companies could be investigated. “We remain looking at that market,” said Ricardo Cardoso, the EU’s competition spokesman, when asked about Chinese providers such as Mingyang Smart Energy and Envision. Cardoso said Brussels aimed to complete the investigation by autumn next year and there were three potential outcomes. These are that Goldwind makes commitments to address the EU’s concerns, the commission imposes “redressive measures”, or the probe ultimately finds no distortive subsidies. Penalties the commission could impose include divestment from assets or business units in the European Union, preferential treatment for Goldwind’s EU rivals, or curbs on the company’s access to tenders or market sectors within the single market. The foreign subsidies regulation grants the commission broad powers to investigate companies suspected of receiving undeclared state subsidies that enable them to undercut EU competitors. It can be used when non-EU firms bid for procurement contracts or attempt mergers or acquisitions. The commission can also launch an investigation of its own volition, when – as in the case of Goldwind – it has received a tip that market operators had benefited from subsidies that disadvantaged local rivals. While the probe was described as “ex officio”, meaning it was launched independently by the commission, European wind turbine manufacturers have been asking for protection for several years. They fear that hyper-competitive Chinese firms could lead to a hollowing out of the industry in Europe, a fate the solar power sector suffered a decade ago. Some have also flagged security concerns. Last year, the German asset manager Luxcara pulled out of an agreement to use turbines from Mingyang in a North Sea offshore wind farm, signing on with Siemens Gamesa instead. The firm cited “operational reasons” for the change, but – according to a Reuters report – it also said improved security was “a positive side effect”. While many have speculated that the crisis in the EU’s relations with the United States could nudge the bloc closer to China, commercial tensions between the sides are still running high. As well as the wind turbines probe, this year the commission has also moved to force member states to ban the Chinese telecoms giants Huawei Technologies and ZTE from their mobile networks under a proposed cybersecurity act. The legislation could also see firms deemed a security risk eventually kicked out of the EU’s energy, water and semiconductor sectors. Later this month, an Industrial Accelerator Act is set to include a “buy Europe” provision in key sectors ranging from steel and cement to wind turbines and batteries, with the aim of getting the authorities to prioritise European vendors over cheaper Chinese rivals. The FSR probe will add further strain to bilateral ties. Unlike traditional trade investigations, this tool, which comes from the competition world, moves quickly. Firms can be forced to hand over reams of information and comply with tight deadlines, a dynamic that has previously drawn loud complaints from Chinese firms. Nuctech, a Chinese manufacturer of airport scanning machines, sued the commission at the EU General Court in 2024, insisting that dawn raids launched under the FSR caused reputational damage. It also claimed that the raids forced it to unlawfully provide information located outside the EU and that complying with the FSR probe would force it to violate Chinese criminal laws. But the General Court, the EU’s second-highest court, dismissed the case on all grounds. It found that the commission must “be entitled to request information” held outside the EU to assess whether “their conduct infringes EU law and is likely to produce a substantial effect on the internal market”.

EU launches subsidy probe into Chinese wind turbine maker Goldwind

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Investigation is being carried out under the bloc’s foreign subsidies regulation, a tool that is expected to be widely used this year

Investigation is being carried out under the bloc’s foreign subsidies regulation, a tool that is expected to be widely used this year