(Bloomberg) -- The European Union should guard against Chinese attempts to dominate the bloc’s clean-tech market and make sure its exports aren’t destroying local rivals, the bloc’s new competition chief warned.
In her first interview since becoming the EU’s antitrust commissioner, Teresa Ribera told Bloomberg that Europe and the US failed in recent years to anticipate the threat of China’s ambitions for global dominance in those industries and the bloc needs to urgently pay more attention.
“It’s the cheap materials and cheap equipment arriving in this market, then investing to produce them in Europe” with markets then closing to European rivals, Ribera said. She added that it was necessary to probe “how this may have an impact in terms of killing competitors within the same market and then controlling the market.”
Spanish socialist Ribera, who assumed the reins of the EU’s powerful antitrust portfolio on Monday, also suggested the bloc needs to consider issuing joint debt to help bolster its clean-tech transition. In the new European Commission, she has an expanded role that also includes helping to chart the clean-tech transition while defending the EU’s competitiveness against China and the US.
The former Spanish climate minister takes over the competition job from Denmark’s Margrethe Vestager as industries at the center of the next phase of the clean-tech transition, particularly car and battery manufacturers, are struggling.
“Something which was not sufficiently noticed by western industries and western governments 15 years ago is when China said, ‘We want to be the first producer of green equipments in the world,’” according to Ribera. “The question is not how good this equipment may be. The question is to what extent they respect the level playing field.”
Fighting Subsidies
Ribera, 55, now wields one of the EU’s newest tools to protect the bloc’s core industries: the Foreign Subsidies Regulation. That process allows vetting of potentially anticompetitive sovereign-state subsidies into the bloc, where regulators can issue fines or outright vetoes of state takeovers.
She said she wants to use the FSR to target China’s strategic investments in the EU, which she believes can also pose risks to environmental standards, particularly in clean tech.
Clothing and retailing markets face similar challenges as the likes of Shein and Temu flood the EU with goods that may not align with its green standards. She suggested the bloc needs to see “how we can raise the bar of the standards in other parts of the world through access to a very attractive market.”
The EU has been taking an increasingly assertive approach to China, including the recent move to impose new tariffs of up to 35% on Chinese electric vehicles, which has sparked retaliation from Beijing and stoked concerns about a larger trade war — something Ribera said she is keen to avoid.
Averting a full-blown collapse in Europe’s auto industry will be one of Ribera’s key priorities as it battles to meet the EU’s strict climate targets and stiff competition from cheap Chinese electric vehicles. The scale of that challenge was made clear this week as roughly 66,000 Volkswagen AG workers across Germany abandoned their posts amid fears of the first factory closures in the auto giant’s history.
Ribera said that she is against any deferral of the bloc’s plan to effectively phase out the combustion engine in new cars by 2035, but added that it was “quite important’ that EU carmakers maintain the same share of the market they’ve held in recent decades.
“We need to do it with a European understanding, not just, ‘What about if my local plant will stop?’” she added.
Joint Debt
Ribera also made clear that trade measures and enforcement alone won’t be enough to ensure the EU remains a leader in the clean-tech sector. She said it will take significant extra investment to build successful new green champions and meet the bloc’s ambitious climate targets.
To pay for it, she added, the bloc needs to consider options for additional public spending, possibly including a fresh round of joint borrowing, which remains controversial in some European capitals.
Former European Central Bank President Mario Draghi was “crystal clear” in his landmark report, she said, when he called for the region to invest an extra €800 billion ($842 billion) per year to meet all its targets. She said there was an urgent need for the bloc to invest “right now.”
One of Ribera’s first tasks in her new role will be to present a Clean Industrial Deal to support some of the most carbon-intensive sectors of the economy to adopt new technologies and prevent them from leaving to other corners of the world, like the US and China.
Ribera said the costs of the transition means the private sector wouldn’t be able to shoulder the burden alone. The EU should work on identifying additional resources to help fund clean technologies, while also working with existing funds and finance from the European Investment Bank.
“There could be a need to strengthen these elements through a much more powerful set of tools,” she said. “This is not going to be solved this month, but it has to be clarified.”
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