China warns of EU trade war

Synopsis

China and the EU are once again on the verge of a trade war, primarily over Chinese-made solar products. The EU's trade commissioner accuses China of selling solar panels below production costs and plans to impose punitive duties on these imports. In response, Beijing firmly states it will protect its national interests. Historically, Europe, particularly Germany and Italy, has been the center of the global solar panel industry, benefiting from generous government subsidies. These subsidies not only aided European companies but also allowed Chinese manufacturers to become competitive, pushing their European counterparts out of the market. Currently, many Chinese solar makers face challenges due to high debt levels and global overcapacity, making the potential loss of access to the European market a significant threat to their sales, which can account for up to 50% of their annual revenue. The ongoing dispute highlights the tension between economic interests and trade policies between China and Europe.