Decoding transatlantic relations with Beijing.
By STUART LAU
with PHELIM KINE
Send tips here | Tweet @StuartKLau or @PhelimKine | Subscribe for free | View in your browser
GOOD TUESDAY MORNING. This is Stuart Lau reporting from Brussels. Phelim Kine will be with you from Washington on Thursday.
CAN EU SAVE THE SOLAR PANELS?
GREEN TRANSITION VS. CRITICAL DEPENDENCY: Make no mistake, this is one of the most consequential dilemmas facing the European Union. Does it want to be green or strategic, if being green and strategic is not an option?
As much as the European Union needs to turn itself carbon-free, it’s increasingly dependent on imports from China, which it labels as an economic competitor and, worse, systemic rival.
By earmarking billions of euros to speed up installation of solar panels across Europe, it’s building up an overwhelming reliance on Chinese products — including those from the region of Xinjiang which is the focus of human rights abuses, as documented by the U.N.
Such a business model is also killing Europe’s last few enterprises that specialize in making solar power panels, going against what France and others hope to be a period of European reindustrialization.
How bad is the solar situation? Very. The EU industry warns that it has only weeks left before the sector implodes.
“The situation is really, really, really troublesome,” Johan Lindahl, secretary general of the European Solar Manufacturing Council (ESMC), which represents local producers, told my colleague Victor Jack.
Quote du jour: “We might lose a majority of the European industry in the next couple of months if there’s no strong political signal,” Lindahl said.
Lukewarm response from Eurocrats: The European Commission has begun early-stage talks to discuss options for helping producers — but it made no concrete commitments during a hotly-anticipated debate in the European Parliament on Monday that many in the industry hoped would show the bloc was taking the issue seriously.
‘Work closely’ blah blah blah: Low prices are “clearly a challenge to EU solar panel producers,” the European Commission’s financial services chief Mairead McGuinness told European lawmakers during a session in Strasbourg.
She added the EU executive would “work closely with the EU industry to deploy every effort at technical and political level” to help manufacturers. Doesn’t sound like a great deal.
LAWMAKERS PUSH BACK: “Our market is being attacked by cheaper imports from third countries fueled by huge subsidies,” said center-right lawmaker Liudas Mažylis. “We have to think about providing immediate support to solar manufacturers.”
“I expect more from the Commission,” added center-left lawmaker Matthias Ecke, “because otherwise, we’re not going to be able to achieve our [industrial policy] objectives.”
TOO LITTLE, TOO LATE: Chinese firms now control over 80 percent of the global supply chain for silicon solar panels. On the other hand, the EU produced 3 percent of the solar panels it installed last year.
Is there a business case? “Unless you absolutely pour money into this … anything you do will just be very, very short term and give breathing space to manufacturers,” said Lara Hayim, head of solar research at BloombergNEF, so “I can’t help but feel that these are all efforts that are a bit in vain.”
Focus on tomorrow’s tech: EU officials say there’s a bigger need to focus investments on those advance technologies where the EU still stands a chance of competing with China in future. But, added a European official, “it all comes down to whether member states see this competition as existential, and whether they’re willing to deploy national security considerations more actively.”
Continue reading: Victor’s full story is available here.
EUROPE-CHINA THIS WEEK
ORBÁN’S WOMAN IN BRUSSELS SPOTTED IN BEIJING: Hungary’s European Parliament lawmaker Kinga Gál, a vice-president of the Fidesz party run by Prime Minister Viktor Orbán, visited China last week.
Drum roll: She met Liu Jianchao, the Communist Party’s international department chief who’s widely tipped to succeed Wang Yi to become China’s next foreign minister.
In the minister’s words: “For China, Hungary is a good friend and good partner in the European Union,” Liu said. “We shall offer each other help on core issues and questions of major concerns.”
In reply: “Fidesz cherishes the friendly relationship with the CCP,” Gál said, according to the Chinese government. Never mind Fidesz was founded as an anti-Soviet resistance movement.
Why does the timing matter? Hungary will take over from Belgium as the next president of the Council of the EU, between July and December this year. It will then have some say over the EU’s agenda, at a crucial time when the new European Commission team begins.
COURTING EU’S CLOSEST NEIGHBOURS: Norway and Switzerland are both sending their foreign ministers to visit China today, underlining Beijing’s efforts to court the non-EU economic powers in Europe. Norway’s FM Espen Barth Eide arrived on Monday — with Washington as his next step — while his Swiss counterpart Ignazio Cassis arrives today.
Oslo’s message: Speaking after his meetings with Chinese top diplomat Wang Yi yesterday, Barth Eide said Norway would “pursue a clear and predictable China policy, based on the breadth of our interests, including our national security.” He also called for “open and rules-based trade,” with an emphasis on human rights and what he called Beijing’s need “to comply with their international obligation.”
Norway deal nowhere to be seen: Initial plans by Norway and China to conclude a free trade agreement have gone nowhere in the past couple of years. Norwegian diplomats say it would be “practically impossible” to pursue the deal, after the European Union froze the ratification for its own investment agreement with China. While Norway isn’t part of the EU, “there’s a need to follow closely the EU’s approach to China.”
From the Alps to the Pacific: The Swiss top envoy, meanwhile, is on a four-country tour, traveling to India, South Korea, China and the Philippines. The Beijing leg will aim to “resume the strategic dialogue between the two countries’ foreign ministers, which has been on hold since 2019 due to the pandemic,” the Swiss statement added.
**Not going to Munich for the Security Conference? Don’t worry, our Pro Defense team has got you covered. Join us online on February 19 as we debrief you on what happened.**
INDO-PACIFIC POWWOW
THE BRUSSELS CHARM’S FADING: Europe planned to get dozens of Indo-Pacific foreign ministers to Brussels for talks on Friday, with the EU eager to prove its relevance in a region increasingly under pressure from an assertive China.
In the end, major countries — from both Europe and Asia — sent junior representatives instead.
Missing in action: France’s new Foreign Minister Stéphane Séjourné and Germany’s Annalena Baerbock were absent from the EU’s third Indo-Pacific ministerial meeting, citing scheduling clashes. Italy’s Antonio Tajani also skipped the Indo-Pacific part, and joined only a smaller afternoon session with Southeast Asian countries.
Où est Stéphane ? The French absence, in particular, upset EU officials. “Too bad France reminds us all the time who is the only EU country with Indo-Pacific territories, but its foreign minister can’t take a train from Paris to Brussels!” one of them wrote to China Watcher to complain.
No long haul flights please: Four of the West’s closest allies in Asia were also unable to send their foreign ministers to Brussels.
Japanese Foreign Minister Yōko Kamikawa, Australia’s Penny Wong, Subrahmanyam Jaishankar of India, and new South Korean minister Cho Tae-yul all skipped the meeting. Lower-level officials took their places.
Still, it was a big event: EU officials stressed the presence of a large number of 70 delegations at the Brussels meeting, with a significant presence of Pacific and ASEAN countries.
Royal feast: Belgium refused to co-organize the forum, unlike previous EU Council presidencies, namely France and Sweden. The Belgians also only sent Princess Astrid to join the Asian guests for a lunch. EU officials blame Belgium for not being interested in spending money on this, while the Belgian foreign ministry said the European External Action Service would be well positioned to host the event by itself, according to EU treaty provisions.
Borrell’s last show: This was the last time the EU’s outgoing foreign policy chief Josep Borrell gets to chair the talks, as he’s widely expected to be replaced after the EU elections this summer. Still, he’s got plans for more security deals with Asia in the remainder of his tenure. “I hope to be able to travel to the region before the end of my mandate to sign agreements with some of these countries on security,” he said.
Knowing the limits: Borrell continued: “Certainly we don’t have a fleet to deploy. But we have a coordinated maritime presence … We Europeans are very much busy with the wars in our neighborhood, but we understand that the South China Sea will be one of the hotspots in the world.”
TRANSLATING WASHINGTON
U.S. OPPOSES PNG-BEIJING SECURITY DEAL: The Biden administration is urging the government of Papua New Guinea to reject a possible security pact with Beijing. Such an agreement would have “a high cost … China has shown that it’s not interested in the modern rules-based order,” Deputy Secretary of State Richard Verma said in an interview in Sydney, Australia per VOA reporting. PNG’s Foreign Minister Justin Tkatchenko said last week that the country was in talks with Beijing on possible support for the country’s “policing and security on the internal security side,” per the Guardian. The Biden administration launched intensive diplomatic outreach to Pacific island countries, including PNG, after the Solomon Islands sealed a controversial security pact with Beijing in 2022.
SENATE SUPPLEMENTAL INCLUDES CHINA DETERRENCE CASH: GOP and Democratic Senators finalized a $118 billion deal on supplemental funding for stricter border and immigration policies that will send billions of dollars to Ukraine, Israel and Taiwan as well as the border, POLITICO’s Daniella Diaz, Burgess Everett and Ursula Perano reported on Sunday. The deal includes specific funding “to bolster U.S. and allied capabilities in the Indo-Pacific and deter China.” That includes $1.9 billion to clear production bottlenecks for U.S. weapon shipments to Taiwan. Taipei may have to wait — House Speaker Mike Johnson said on Sunday that the legislation in its current form was “dead on arrival” when it comes to a vote in the GOP-dominated House. Raytheon Missile Systems won a $68 million contract to supply Taiwan with “50 Joint Standoff Weapon Air-To-Ground Missiles,” for delivery in 2028 the Pentagon said on Friday.
TRUMP CALLS XI “A VERY GOOD FRIEND”: Donald Trump singled out China’s leader Xi Jinping for praise on Sunday by declaring that he liked Xi “a lot,” declaring that Xi “was a very good friend” to him during his presidency and adding that “I want China to do great” in a Fox News interview on Sunday. Trump offset those expressions of affection with a warning that he’ll impose tariffs of at least 60 percent on Chinese imports if elected president in November and by stating that he believes the Chinese Communist Party is directing “military aged men” to unlawfully enter the U.S. over its southern border. Trump has a long history of verbal air kisses for Xi, including his claim in April that the Chinese leader is “a brilliant man”and his assertion in 2020 that the two men “love each other.”
BEIJING BATS BACK BURNS’ SPY SLAM: CIA Director William Burns’ assertion in a Foreign Affairs article last week that that China’s espionage threat has spurred the agency’s hiring spree of Mandarin speakers didn’t go unnoticed in Beijing. “As the head of the largest spy agency in the world, William Burns openly told everyone that U.S. spies are everywhere. Thank him for reminding us. China will take precautions as usual and will not allow the U.S. to get its way through illegal moves,” Chinese Foreign Ministry spokesperson Wang Wenbin said on Friday.
XIE FENG TOUTS U.S. BUSINESS CONFIDENCE: Beijing is talking up what it insists is growing U.S. investor confidence in China despite thin evidence for such optimism. The results of the most recent American Chamber of Commerce in China survey report on the country’s business climate shows that “U.S. businesses in China are increasingly optimistic about China’s business environment and bilateral relations,” Chinese ambassador to the U.S., Xie Feng, said on X on Friday. The actual data reflects a less-rosy assessment due to “several challenges, headed by tensions in the US-China relationship,” said a summary of the AmCham China report. That’s pushing U.S. firms to take a “cautious approach” toward China that includes “opting to limit investment,” the report summary said.
IN HEADLINES
BBC: Yang Hengjun, the Australian writer given suspended death sentence in China.
Bloomberg: Chinese investment into Belt and Road nations hits highest since 2018.
Guardian: Taiwan strives to root out China’s spies.
Variety: Netflix bulks up Southeast Asia originals, Chinese-language production slate.
Wall Street Journal: A U.S. embassy wanted to talk about giraffes. Chinese investors had other ideas.
MANY THANKS: To editor Christian Oliver, reporter Victor Jack and producer Seb Starcevic.
SUBSCRIBE to the POLITICO newsletter family: Brussels Playbook | London Playbook | London Playbook PM | Playbook Paris | EU Election Playbook | Global Playbook | POLITICO Confidential | Sunday Crunch | EU Influence | London Influence | Digital Bridge | China Watcher | Berlin Bulletin | D.C. Playbook | D.C. Influence | All our POLITICO Pro policy morning newsletters
Source link : https://www.politico.eu/newsletter/china-watcher/dead-in-a-few-months-china-wipes-out-eus-solar-industry/
Author :
Publish date : 2024-02-06 03:00:00
Copyright for syndicated content belongs to the linked Source.