Geopolitics, Industrial Policy, Supply Chains Chinese Politicians and Companies Sharply Criticize Planned EU Ban

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The planned EU move away from high-risk technology is hitting Chinese suppliers hard. Huawei and the already ailing Chinese solar industry would be particularly hard hit. Politicians and industry in China are therefore talking about discrimination.

Chinese companies have sharply criticized the European Union's plans to ban Chinese technologies from critical infrastructure for cyber security reasons (ELEKTRONIKPRAXIS reported). Politicians and companies see this course as a clear affront and a signal of nationalistic tendencies and the isolation of regional markets for political reasons.

"Chinese companies have been operating in Europe for a long time, abide by laws and regulations and have never endangered Europe's national security," Guo Jiakun, spokesman for the Chinese Foreign Ministry, told Reuters news agency. He called on the EU to "stop following the wrong path of protectionism" and warned against mixing economic issues with security arguments.

The technology group Huawei has been particularly vocal. "A legislative proposal that restricts or excludes non-EU suppliers based on their country of origin rather than on facts and technical standards violates the EU's fundamental legal principles of fairness, non-discrimination and proportionality, as well as its obligations to the WTO (World Trade Organization)," Reuters quotes a spokeswoman for the company as saying. "We will closely monitor further developments in the legislative process and reserve all rights to protect our legitimate interests," she said.

Political Signal With Economic Impact

In China, the EU initiative is seen less as an individual measure and more as part of a larger trend. The closer coordination between Europe and the USA on technology issues is therefore increasing concerns about structural market exclusion.

The US restrictions against Chinese telecommunications equipment suppliers have already hit many companies hard. European steps are now increasing the pressure, as the EU was previously considered a comparatively open market.

For Chinese manufacturers, this means growing planning uncertainty. Investments in European locations, partnerships and supply contracts become less attractive when regulatory risks are almost impossible to calculate. At the same time, there is a growing expectation in China that companies will have to focus more on the domestic market or on politically less critical regions. However, this exacerbates local competition, which has been further intensified in recent years by many Un.

Chinese Solar Industry Hit Particularly Hard

The solar industry is currently showing just how vulnerable China's key industries are. The extreme price war among Chinese manufacturers of solar panels and modules has led to a forecast loss of USD 5 to 5.5 billion for the leading manufacturers in 2025 due to overcapacity and rising raw material prices.

Leading Chinese manufacturers were already struggling with high losses in the previous year. According to stock market reports, TCL Zhonghuan Renewable Energy, Trina Solar, Longi Green Energy Technology, JA Solar Technology and Tongwei are jointly expecting this loss, which will be added to the 4.8 billion dollar loss from 2024.

Tongwei reports the largest forecast loss of 1.3 to 1.4 billion dollars and explains: "The industry's temporary oversupply problem has not yet been alleviated." JA Solar blamed "a concentrated release of production capacity" and "tightened international trade protection measures" for this.

Billion Losses

No Sunshine: China's Solar Market Continues to Fail Due to Its Own Strategy

Strategic Reorientation Under Duress

The US has imposed import tariffs on solar products from Cambodia, Malaysia, Thailand and Vietnam, where Chinese solar companies have set up shop to circumvent previous tariffs. The cost of silver, an important raw material, has risen sharply in the last year. A blanket ban on Chinese manufacturers in this market would further limit the market reach of these suppliers. Accordingly, leading Chinese suppliers are watching the EU plans with concern.

Against this backdrop, many observers see China's reaction to the EU's course as an expression of its own weakness. The scope for offsetting economic pressure with counter-sanctions is shrinking.

Instead, the focus is shifting to greater technological independence. Chinese manufacturers are increasingly investing in domestic supply chains, their own standards and alternative sales markets.(sg)

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