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After arduous negotiations between China and the EU, representatives of China's photovoltaic industry and the European Commission reached a price commitment on the trade disputes between China and Europe on photovoltaic products. Through this arrangement, the largest trade dispute between China and the EU so far has been able to avoid the flames of war. China's photovoltaic products can continue to be exported to the EU and maintain a certain market share. Industrial uncertainty is greatly reduced. This result is welcomed by Chinese industry organizations and governments.
Despite this, the price commitment is still a serious interference with the free trade and market pricing mechanisms. This dispute and its resolution can be used as the “performance†that the EU Trade Commission and its executives boast, but it does not help solve the EU’s photovoltaic industry. Sick root. Under the environment of descending primary product prices, the price commitment may also create annoyance for the production of Chinese products in the future EU PV market.
The plight of the EU industry is obvious to all. In early July, Germany’s Conergy, Europe’s largest solar energy group, filed for bankruptcy. In 2007 the company's market value exceeded 2.2 billion euros, and today it is only 57 million euros. As for the leader of the German solar energy company that provoked the anti-Chinese PV system, it was also a complete loss. So, does limiting China's PV products contribute to its relief? the answer is negative.
What is the root cause of the EU PV industry? It is inefficient and costly. A large part of its high cost stems from the sky-high salary of corporate executives and employees. The core competitiveness of many key enterprises does not seem to be the efficiency and quality of production, but rather they lobby government departments to absorb huge subsidies and implement trade protection; the EU photovoltaic industry has too Many practitioners did not show their enthusiasm for pursuing their careers, but under strong competitive pressure, they still insisted on asking for high-price compensation when facing huge losses. To treat such a disease-plagued industry, the most effective drug is external competitive pressure. Through trade protection, the EU’s temporary pressure on the industry is greatly reduced, but it can only weaken the pressure and motivation for its transformation.
Moreover, the biggest competitors in the global photovoltaic industry are not overseas counterparts, but traditional fossil fuels. The photovoltaic industry is mainly able to achieve high-speed growth in the context of constant and significant increases in the prices of conventional energy such as oil and natural gas since the beginning of the new century; solar power is at a disadvantage compared to conventional thermal power stations in terms of supply stability and so on. Can not quickly reduce costs, in the primary environment of the market down, the industry will fall into the abyss. The shale gas revolution in the United States has also exerted a strong downward pressure on the prices of international natural gas markets. In the case of alternative fossil fuel prices, it is difficult for oil prices to remain high over the long-term. In this context, artificially maintaining the high price of photovoltaic products in the EU market can only result in the EU market tending to shrink, or even shrink sharply.
The EU Trade Commission and its supervisors should not be complacent about their "political achievements." Recalling the 2005 Sino-European textile dispute and signing the "Memorandum of the People's Republic of China and the European Commission on China's Partial Textile Exports to Europe," after only implementing quota restrictions on the 10 categories of Chinese textile exports to the EU, only a month or so ago, due to the exhaustion of quotas, a large number of Textiles exported from Chinese manufacturers to the European market were seized in the European Union Customs. A large number of clothing categories in the EU apparel industry were “broken†and fell into the “biggest crisis since World War II†(English retail industry experts). China’s EU Trade Commissioner Mandelson, who was content with the signing of the China-European textile memorandum, almost instantly fell into a dilemma from “heroâ€.
Looking back on previous lessons, how should the EU trade department learn? (Mei Xinyu is a well-known financial commentator)
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