EU Updates its Report on China’s Distortions in Economy

Workers wait for transport outside a construction site in Beijing, Tuesday, April 9, 2024. (AP Photo/Ng Han Guan)
Workers wait for transport outside a construction site in Beijing, Tuesday, April 9, 2024. (AP Photo/Ng Han Guan)
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EU Updates its Report on China’s Distortions in Economy

Workers wait for transport outside a construction site in Beijing, Tuesday, April 9, 2024. (AP Photo/Ng Han Guan)
Workers wait for transport outside a construction site in Beijing, Tuesday, April 9, 2024. (AP Photo/Ng Han Guan)

The European Commission has updated its report on state-led distortions in the Chinese economy, adding new sectors and potentially opening the door to anti-dumping complaints from EU chip and clean-tech producers.
The update, published on Wednesday and stretching to 712 pages, adds details of what the EU executive considers to be distortions in sectors of telecom equipment, semiconductors, the rail industry, renewable energy and electric vehicles.
It retains the steel, aluminum, chemicals and ceramics sectors of the initial report in 2017. There is no similar EU report for any other country.
The report is a tool for EU industries to use when filing complaints about dumping practices. If Chinese prices and costs are found to be distorted, they can be replaced with those from another country to calculate normally higher dumping tariffs.
“This could be taken as an invitation to sectors that have not yet brought anti-dumping complaints to explore their use,” said Laurent Ruessmann, partner at trade law firm Ruessmann Beck & Co.
The Commission has typically launched about 10 anti-dumping investigations per year, many concerning steel products.
It is now looking to shield EU firms from cheap clean-tech products, with a review of subsidies received by Chinese wind turbine suppliers and an anti-subsidy investigation into imports of Chinese electric vehicles.
The report, however, will not play a part in these investigations as it only concerns dumping.
The report covers the role of the Chinese state in planning to meet economic objectives, the importance of state-owned enterprises, preferential access to land, labor, raw materials and energy and state support for specific sectors.
In most sectors, including electric vehicles, it refers to Chinese overcapacity.
China's parliament, the National People's Congress, said in March the government would take steps to curb overcapacity. Beijing argues the recent US and EU focus on risks from China's excess capacity is misguided. Its state media has denounced these concerns as part of an effort to limit China's rise.
On Wednesday, China said it was concerned by what it called discriminatory measures by the EU against its firms after the bloc said it would investigate subsidies received by Chinese suppliers of wind turbines destined for its countries.
“The outside world is worried about the rising tendency of protectionism in the EU,” foreign ministry spokesperson Mao Ning said at a regular press briefing on Wednesday.
“China is highly concerned about the discriminatory measures taken by the European Union against Chinese companies and even industries,” Mao said, adding that the bloc should abide by World Trade Organization rules and market principles.
Meanwhile the EU's anti-trust commissioner Margrethe Vestager has said the European Commission will look into conditions for the development of wind parks in Spain, Greece, France, Romania and Bulgaria.
“Today, we are launching a new inquiry into Chinese suppliers of wind turbines,” Vestager said in a speech at Princeton University, in the US state of New Jersey.
“We are investigating the conditions for the development of wind parks in Spain, Greece, France, Romania and Bulgaria,” she added.
For her part, a European Commission spokeswoman told the German News Agency that the EU investigations relate to suspicions that some wind turbine makers may benefit from an unfair competitive advantage as a result of foreign support.
In her speech to the Institute for Advanced Study in Princeton, Vestager said: “China is for us simultaneously a partner in fighting climate change, an economic competitor, a systemic rival. And the last two dimensions are increasingly converging.”
Vestager said China's “playbook” of subsidizing domestic solar panel suppliers and exporting excess capacity at low prices had resulted in fewer than 3% of solar panels installed in the EU being produced in Europe.
Research service BloombergNEF said prices for Chinese turbines are around 20% below rival US and European products.
The EU imported some $1.42 billion in turbines and components from China last year, customs data showed.
In a related development, a survey released by the German Chamber of Commerce in China has found that nearly two-thirds of German firms feel they encounter unfair competition from local firms in China and are outgunned in terms of access to local officials, information and licenses.
The survey came a few days ahead of Chancellor Olaf Scholz’ visit to China for talks with Chinese President Xi and other senior officials.
It showed that 150 companies surveyed from February 22 to March 6 said they face “unfair competition” operating in China, Germany’s largest trading partner.
Over 52% of those surveyed said their primary competitors were private Chinese companies.
Wednesday's survey also showed that 95% of German firms felt that increased competition from Chinese companies was affecting their business, including 70% who felt it was eating into their market share.
Scholz’s trip will be his second to China as chancellor, following his first visit in November 2022.



Iran Lawmakers Move to Sack Country’s Economy Minister as Rial Plunges 

A currency dealer counts Iranian rials as the value of the rial drops, in Tehran, Iran, February 9, 2025. Majid Asgaripour/WANA (West Asia News Agency) via Reuters
A currency dealer counts Iranian rials as the value of the rial drops, in Tehran, Iran, February 9, 2025. Majid Asgaripour/WANA (West Asia News Agency) via Reuters
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Iran Lawmakers Move to Sack Country’s Economy Minister as Rial Plunges 

A currency dealer counts Iranian rials as the value of the rial drops, in Tehran, Iran, February 9, 2025. Majid Asgaripour/WANA (West Asia News Agency) via Reuters
A currency dealer counts Iranian rials as the value of the rial drops, in Tehran, Iran, February 9, 2025. Majid Asgaripour/WANA (West Asia News Agency) via Reuters

Iran’s parliament on Wednesday received a motion from lawmakers seeking to dismiss Economy Minister Abdolnaser Hemmati amid a sharp decline in the national currency, the rial.

Under Iranian law, Hemmati must appear before the legislature within 10 days to defend his record in a session that could result in his removal.

Ahmad Naderi, a Tehran MP and member of the parliament’s presiding board, said 91 lawmakers had signed the motion.

The move follows closed-door talks between President Masoud Pezeshkian and Hemmati with MPs over the plunging rial, which has lost nearly half its value since Pezeshkian took office in July.

On the black market, the rial is now trading at more than 900,000 to the US dollar, compared with less than 600,000 in mid-2024.

The slide has accelerated since the fall of Syrian president Bashar al-Assad, a longtime Iranian ally, on December 8.

Decades of US-led sanctions have battered Iran’s economy, with inflation worsening since Washington pulled out of a landmark 2015 nuclear deal in 2018.

US President Donald Trump, who returned to the White House in January, has revived his policy of “maximum pressure” on Iran, further tightening restrictions on the country.

Pezeshkian has vowed to seek a return to the nuclear accord and the lifting of sanctions, but diplomatic efforts have so far to make any headway.

In April 2023, lawmakers dismissed the industry minister Reza Fatemi Amin over soaring car prices.