China’s solar, wind innovations amid rapid green power buildout

European Union and Chinese officials have been holding talks in Beijing ahead of the bloc’s October deadline for seeing “tangible results” in efforts to curb a trade deficit running at €1 billion-plus (US$1.2 billion) per day.Denis Redonnet, the EU’s top trade enforcer, has led the European delegation, the South China Morning Post reported on Wednesday. The official has recently become the bloc’s point person for China trade, reflecting growing trade tensions and the possibility of a trade war.Redonnet’s boss, Director-General for Trade Ditte Juul Jorgensen, will also visit the Chinese capital later this month ahead of October talks between Trade Commissioner Maros Sefcovic and Chinese Commerce Minister Wang Wentao. Officials may also present new trade defences to EU leaders on October 15, as the bloc tries to press China into curbing a flood of low-cost exports that has hammered European manufacturers (see SCMP Plus Factsheet).“These ongoing talks are not just talks – they have to give a proof of concept by October,” Jorgensen told European lawmakers on Wednesday. “We have been very clear that these global imbalances that exist cannot continue and there has to be a rebalancing.”European Commission President Ursula von der Leyen may outline potential China step on September 16, when she makes her annual state of the EU address. She has previously used the occasion to announce China-focused measures, such as investigations into electric-vehicles subsidies and a ban on products linked to forced labour.Related news: China never deliberately pursues a trade surplus, People’s Bank of China Governor Pan Gongsheng told a G20 meeting in North Carolina. The country also won’t devalue the yuan to gain an export advantage and it remains committed to expanding domestic demand, he said. Global trade imbalances were the result of protectionism, countries mixing national security with trade, and unpredictable policies, Pan said, according to a statement from the Chinese central bank. China blocked a joint communique from the G20 gathering of finance ministers which implicitly criticised its trade surplus. The country also called for at another G20 event. The China-European Union trade gap widened by 25 per cent in the first seven months of the year, with a 16.7 per cent surge in Chinese exports outpacing a 7 per cent increase in imports, according to Chinese customs data. China’s shipments of electric vehicles to Europe were 82.8 per cent higher in July than a year earlier, even with extra EU tariffs in place. Shipments of plug-in hybrids, which don’t yet have extra tariffs, more than doubled. Across all sectors, China’s July trade surplus with Germany surged by 86.5 per cent. Final preparations are under way for the opening of the 72.7 billion yuan (US$11 billion) Pinglu Canal megaproject, which is designed to support booming trade between China and Southeast Asia. The first of a fleet of command vessels was delivered on Monday ahead of the canal’s potential opening later this month. The 134 km (83-mile) waterway connects Nanning, the capital of southeastern Guangxi Zhuang autonomous region, to the South China Sea. Its opening will slash shipment times for Chinese companies that have shifted production to Vietnam and other Southeast Asian nations. How others reported it Don’t tarry: The longer the EU continues to delay, the stronger China’s economic defences will become, and the more industrial capacity Europe will lose to the “China Shock 2.0”. … If more nationalistic and Eurosceptic politicians take power in member states, as is currently widely expected in Brussels, the EU will find agreeing on shared measures and collective actions even harder than it already is. (Mercator Institute for China Studies, opinion) China dependent: Pursuing a policy that Beijing perceives as offensive carries real risks, given that Europe’s dependence on China is a structural reality. EY-Parthenon estimates that replacing the [Chinese] infrastructure, research, software, manufacturing capacity and supply chains on which the euro zone currently relies would cost around US$9.1 trillion by 2050 – requiring annual investment equivalent to almost double the EU’s current annual budget. (EU Observer) Inflation risks: Limiting Chinese imports, and indirectly raising prices for domestic producers, could have unintended consequences. Inflation in the euro zone reached 2.9 per cent in July, well above the European Central Bank’s 2 per cent target, due to the Iran war. Measures that make Chinese imports more expensive could fuel further price increases, creating more headaches for European governments. (Politico) Structural issue: What Europe interprets as a trade distortion, Beijing may interpret as strategic industrial capacity. … If Brussels were to ask China to … reduce its productive capacity in strategic sectors because that capacity contributes to the European trade surplus … [i]t would no longer be a matter of discussing Chinese trade. It would be a matter of discussing what the structure of the Chinese economy should be. And it is difficult to imagine Beijing granting the [EU] such a negotiating right. (Trieste All News) Hang together: An all-out trade war with China is becoming a real possibility. Europe is now the only major market with high purchasing power that is wide open to Chinese products. With Chinese domestic demand weak and many firms struggling to make a profit, Beijing desperately needs the European market. As a consequence, Beijing is likely to do everything possible to keep it open. If Brussels wants to have a fighting chance in the looming trade war, it will need to ensure maximum unity of its members, as well as wide-ranging cooperation with like-minded partners. Neither will be easy. But both will be necessary if Europe is to preserve the industrial base that is vital to its prosperity and security. (Foreign Affairs, opinion) The SCMP Plus takeawayIs the European Union really ready to start a trade war with China? That’s the question hanging over talks in Beijing, and the answer may be tilting towards “yes”.More European leaders are speaking up about the surging trade gap, most notably German Chancellor Friedrich Merz. He had been seen as a dove amid concerns that German companies would suffer if a trade war prompted China to curb imports of European goods and reduce supplies of critical minerals needed by European manufacturers.The growing resolve among EU leaders reflects what Europeans increasingly see as an existential threat to core industries. Carmaking is emblematic of the crisis, not least because of the political and symbolic importance that the sector carries in the region, especially in Germany.China’s threat to German carmakers has been made evident by Volkswagen head Oliver Blume’s push to cut as many as 100,000 jobs and shut domestic plants. His plan reflects increasing Chinese competition in Europe’s car market – Chinese carmakers took an 11 per cent share in July, according to Dataforce, as low-cost plug-in hybrids won over local drivers. At the same time, European carmakers have lost share in China, a market they used to dominate.Job losses at German car factories have been replicated in plants across Europe making machinery, chemicals and other products, fuelling complaints in the region and elsewhere about Chinese industrial overcapacity and unfair competition.Chinese auto giant BYD makes the “the best US$70,000 car that US$35,000 can buy”, US Treasury Secretary Scott Bessent said this week in a dig at alleged Chinese subsidies.China rejects such accusations, arguing that surging exports are due to its technological edge, high-efficiency manufacturing and lessons learned in a huge and highly competitive domestic market. Officials also argue that the US and Europe are adding to the trade gap by preventing exports of goods that China wants to buy. High-end computer chips and chipmaking equipment are key examples.China has also seemingly tried to weaken European resolve on trade by going over the heads of EU officials and talking directly to national leaders. Chinese President Xi Jinping has hosted a number of EU leaders in the past year, including French President Emmanuel Macron and Germany’s Merz. Other visitors have included leaders from Ireland, Finland, Spain and Slovakia.Still, the growing wave of Chinese imports and rising number of European job losses is prompting greater EU action. The bloc has accelerated the pace of trade defence investigations this year, even after conducting more than 30 in 2025, which was triple the historic average, European Commission President Ursula von der Leyen told a forum of entrepreneurs in France last week. She also signalled that further steps may follow if the Beijing talks fail.“Dialogue with China remains necessary. But it must produce results,” she said. “And when dialogue is not enough, we must be ready to make full use of our instruments.”Officials are working to expand the EU’s trade defence arsenal with measures that would support European industries or pare reliance on China so as to weaken its hand in any trade war.They include the Industrial Accelerator Act, which boosts key industries through public procurement, foreign ownership limits, technology transfer and local employment requirements. An overcapacity tool would allow tariffs in response to “unfair trade practices”. Another measure would tighten foreign direct investment rules with a bloc-wide screening mechanism for sensitive sectors.Efforts to pare reliance on China start with the supplier diversification tool, which effectively seeks to break the country’s grip on rare earths and other critical minerals. A revised cybersecurity act would also bar equipment from high-risk suppliers in 18 sectors.Passing all these instruments – and then actually using them – still requires a majority of European leaders to support a trade war. That means agreeing to deprive local consumers of low-cost goods and risking a sudden wave of job losses when China fights back. Still, the leaders may consider that the risks of not acting are economic decline and even more job losses in the long term.Which way they will fall will soon be clear. The October deadline for “tangible results” is a line in the sand that will force action or a climbdown.