European companies accuse Chinese rivals of benefiting from unfair state aid allowing them to dump about 21 billion euros ($28 billion) worth of solar panels at below cost in Europe last year, putting European firms out of business.
A nine-month investigation by the European Commission into China’s solar industry has found Beijing broke World Trade Organization rules by handing out cheap loans, land, interest-free credit lines and tax breaks to companies, people with knowledge of the situation.
“There are clear indications that (Chinese) government policy influences the decision-making of the banks when deciding on the terms of financing to solar companies,” said one person who declined to be named because the findings are not public.
I – Word Understanding
Accuse – claim that (someone) has done something wrong
State aid – financial support extended by a state government to a local institution to engage in economic activities.
Out of business – discontinue carrying on commercial transactions
Interest-free credit lines – any credit source without interest fee extended to a government, business or individual by a bank
Indications – is a valid reason to use a certain test, examination and procedure
II – Have your say
1. The solar dispute, by far the biggest between China and the EU, threatened a wider trade war in goods.Which industries are at big risks?
2. European Commission state aids is used illegaly in Greece.The Greek government has failed to pay back EUR 17.4 million.Which sectors carried the burden of paying back the aid?
3. European Commission maintained its position as the world’s biggest aid donor last year, stumping up ?55.2bn of overseas assistance. There’s risk, but also huge reward. European Commission has rolled funding programmes such as sustainable enregy for all, food safety and infrastructure.