• Commentary
  • Research
  • Experts
  • Events
Carnegie China logoCarnegie lettermark logo
{
  "authors": [
    "Antoine Bondaz"
  ],
  "type": "legacyinthemedia",
  "centerAffiliationAll": "",
  "centers": [
    "Carnegie Endowment for International Peace",
    "Carnegie China"
  ],
  "collections": [
    "China’s Foreign Relations"
  ],
  "englishNewsletterAll": "",
  "nonEnglishNewsletterAll": "",
  "primaryCenter": "Carnegie Endowment for International Peace",
  "programAffiliation": "",
  "programs": [],
  "projects": [],
  "regions": [
    "East Asia",
    "China"
  ],
  "topics": [
    "Economy",
    "Climate Change"
  ]
}

Source: Getty

In The Media

Caution Can Avert Downward Spiral in Sino-EU Trade Ties

China’s strategic turn to moving upmarket and pursuing sustainability has presented a significant challenge to Europe’s renewable energy market dominance.

Link Copied
By Antoine Bondaz
Published on Jun 13, 2013

Source: Global Times

Europe has led a paradigm shift toward sustainable development, and renewable energy has been at the very core of the new European growth model. Consequently, European companies have for some years enjoyed an unhindered global dominance in the niche renewable energy market.

China's strategic turn to moving upmarket and pursuing sustainability has presented a significant challenge to Europe's renewable energy market dominance. In less than six years, Chinese solar companies have captured more than 80 percent of the European solar technology market share.

The fact that some European solar companies have been driven into bankruptcy by Chinese competition has been a great shock to Europe. Not only has Europe become reliant on China as a provider of renewable energy related goods, but China has further demonstrated its ability to compete with European companies on high-end energy products as well.

The European Commission, the sole institution capable of unilaterally deciding the EU's trade policy, has decided to take emergency action, imposing levies of 11.8 percent on Chinese solar panel imports into Europe. The commission had initiated an investigation of Chinese solar panels at the insistence of German solar panel companies. However, the German government has since distanced itself from Brussels' decision to impose levies on Chinese solar panels and warned the commission that it had committed a "grave mistake."

China has now retaliated, targeting Europe's wine exports into China with an anti-dumping probe. These tit-for-tat measures have fostered a fear of a brewing Sino-European trade war. We can however extract some lessons from these recent developments.

It may be prudent for Europe to avoid alienating Beijing by pursuing lost causes. Since German solar panel producers have already lost their edge, Berlin has opted not to seek protectionist measures that might further alienate Beijing. German Chancellor Angela Merkel has opted to pursue pragmatic options that can better serve Germany's long-term national interests. By not pursuing punitive trade measures against China, German automobile, chemical, and heavy industry firms will not risk suffering from Chinese retaliatory trade policies.

China is an astute manipulator of internal EU dynamics and is adept at driving wedges between EU member states in order to further defend its national interests. Beijing targeted European wine exporters concentrated in South European states, particularly France and Italy, two countries that have argued for "fair play" measures and have been highly vocal supporters of the commission's policies targeting China.

The manner in which the trade dispute has played out suggests that the unilateral measures pursued by the commission may not have been the optimal means of addressing trade concerns. Rather than utilizing emergency mechanisms in a game of brinkmanship with the world's second largest economic power, Brussels would have been better served by bringing the current trade issue before the WTO, thereby allowing a principles-driven multilateral institution to resolve a possibly contentious issue.

Aggressive trade measures have a tendency to compel hard rather than conciliatory positions. Because Chinese Premier Li Keqiang has been highly vocal about the solar panel issue during his travels in Europe last month, China must now assume a hard stance vis-à-vis Europe, or risk its credibility in dealing with its many other trade disputes.

A cycle of trade-oriented retaliatory measures risks setting off an unfavorable downward spiral that could compromise any attempt at achieving win-win Sino-European cooperation. Competition is normal in international relations. However, competition does not inevitably preclude cooperation.

Fortunately, it is not yet too late to escape this vicious circle. France appears to be reacting to China fearfully, while Germany appears to be responding to China pragmatically. What the EU needs is a united voice and a common agenda in its dealings with China.

This article was originally published in Global Times.

Antoine Bondaz is a visiting scholar at the Carnegie-Tsinghua Center for Global Policy. Vasilis Trigkas, a non-resident WSD-Handa fellow at the Pacific forum CSIS, contributed research.

About the Author

Antoine Bondaz

Antoine Bondaz
EconomyClimate ChangeEast AsiaChina

Carnegie does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.

More Work from Carnegie China

  • Commentary
    China Financial Markets
    Who Paid for China’s Last Debt Cleanup, and Who Will Pay for the Next?

    China’s banking crisis in the 2000s was resolved by transferring the costs to households through financial repression—a decision that recapitalized the banks while exacerbating the structural imbalances that continue to shape the Chinese economy today.

      Michael Pettis

  • Robot arm with disposable test tube virus sampling in laboratory
    Commentary
    Caught in the Middle: Chinese Biotech Firms’ Divergent Responses to U.S. Sanctions

    Chinese biotech companies have been on the receiving end of U.S. economic coercion. Yet their responses have differed significantly because firm and state interests are not uniformly aligned. For Washington, treating all Chinese tech firms the same, irrespective of their actual interests, risks pushing them farther into Beijing’s corner.

      Xue Gong

  • An aerial drone photo taken on June 4, 2026 shows a wind-photovoltaic power storage station of Huadian Inner Mongolia New Energy Co., Ltd. as part of the Horinger data center cluster green energy supply demonstration project, in Hohhot, north China's Inner Mongolia Autonomous Region.
    Commentary
    Are Data Centers the Solution to China’s Renewables Excess Capacity?

    China’s latest energy plan explicitly calls for integrating data centers into the electricity system, particularly connecting them to green energy. It appears Beijing wants to use compute as a source of domestic demand to absorb renewables excess capacity.

      • Damien Ma

      Damien Ma

  • Commentary
    Emissary
    Trump and Xi Are Angling for Three Years of Stability

    But their "principal to principal" model will only be as effective as the political strength of each leader back home.

      • Damien Ma

      Damien Ma

  • Commentary
    China Sells Stability Amid American Volatility

    U.S. unpredictability has allowed China to capitalize on its positioning as the “responsible great power”. Paradoxically, the more China wins the perception game, the more likely expectations will rise for Beijing to deliver not just words but to demonstrate with its deeds.

      Chong Ja Ian

Get more news and analysis from
Carnegie China
Carnegie China logo, white
Keck Seng Tower133 Cecil Street #10-01ASingapore, 069535Phone: +65 9650 7648
  • Research
  • About
  • Experts
  • Events
  • Contact
  • Careers
  • Privacy
  • For Media
Get more news and analysis from
Carnegie China
© 2026 Carnegie Endowment for International Peace. All rights reserved.