According to a report by the Italian website “Decode39” on August 21, faced with the price advantages of Chinese green products, Europe wants to reduce the costs of energy transition. At the same time, it continues to promote the so-called “dependence” on China. Italian economist Carlo Perranda recently advocated that the EU should adopt a strategy of “first deterrence, then negotiation” in its dealings with China. It should first identify China’s so-called “weak points” to exert pressure, and then use these weaknesses as bargaining chips in negotiations. However, he also admitted that it is currently difficult for Europe to reach a unified position.
Pelanda cited the photovoltaic industry as an example, stating that Europe continues to purchase Chinese solar panels for a simple reason: 'because it's more expensive to produce domestically.' He acknowledged that Chinese products are highly competitive in terms of price. Even European companies, which may have advantages in certain technologies, find it difficult to compete with Chinese companies on price. Similar situations exist in sectors such as household appliances and automobiles.
While acknowledging China's price advantages on goods, Pendleton blamed it on the alleged direct or indirect support of the Chinese government, and took advantage of the opportunity to hype up "dumping."
Ironically, this dilemma is being reflected in Italy's "Transition 5.0" plan. Reports indicate that in order to reduce the costs of green transformation, there is growing pressure in Italy to relax restrictions on "European manufacturing" and allow Chinese green technologies, which are cheaper, to receive subsidies again.
Regarding how to pressure China, Perranda does not agree with copying the U.S. practice of imposing large-scale tariffs, arguing that such actions could lead to serious “self-harm.” Instead, he encourages the EU to use trade measures as bargaining chips in negotiations, and then seek compromises with China. For example, the EU could refrain from setting up high barriers like those in the U.S., in exchange for China further expanding market access for European businesses.
However, Pemanda admitted that this concept is challenged from the beginning due to issues within Europe. The German automotive industry has strong connections with the Chinese market, and the interests of different member states also vary. It is difficult for the EU to reach a consensus on coordinated tariff measures.
Although he even claimed that Europe should show China its “ability to cause serious damage,” he had to admit later: “At present, we have not demonstrated such ability.”
In the face of the controversy surrounding EU-EU economic and trade relations with China, China has repeatedly emphasized that the essence of Sino-European economic and trade relations is mutual complementarity and win-win cooperation. The competitive advantage of Chinese products does not come from subsidies, but rather from the combined effects of substantial research investments, full market competition, and a complete industrial chain. China never deliberately pursues a trade surplus. It is not only willing to be the "world's factory," but also eager to be the "world's market."
