Welcome to Red Thread, Euractiv’s weekly newsletter on the EU’s relationship with China and the wider Asia-Pacific.

I’m Christina Zhao in Oceania, joined by Anupriya Datta in Europe.

This week, we look at Beijing’s grip on Europe’s clean energy transition...

The European Commission’s investigation into Chinese wind turbine maker Goldwind looks, at first glance, like a narrow competition case. Officials are assessing whether state backing helped the company undercut rivals in EU tenders under the bloc’s foreign subsidies rules.

Beijing sees something larger at stake. China’s commerce ministry accused Brussels of misusing the regulation and warned against "protectionism” – language it tends to reserve for sectors it considers strategic. Brussels rejects the charge, telling Red Thread the EU remains one of the world’s most open markets, but that openness only works if everyone plays by the same rules.

This is not realy about one turbine maker. It is about China’s tightening grip on the supply chains behind Europe’s energy transition, and how difficult that grip is proving to loosen.

Wind is simply the latest front. Solar shows how these stories tend to end.

Over the past decade, China built near-total control of the solar supply chain, from polysilicon and wafers to finished panels, and is rapidly extending that dominance into batteries and other clean tech components. Cheap finance, political backing and relentless scale drove prices to levels European manufacturers could not match. Installations surged. Domestic production faded.

For years, EU policymakers treated that trade-off as pragmatic. Lower costs meant faster deployment and fewer political fights over climate targets. From Spanish rooftops to German solar parks, much of the hardware arrived by container ship. With weak economic growth and tight public finances, speed mattered more than where the equipment came from.

But that dependence was not accidental. In China, clean technology was industrial strategy as much as environmental policy. As the property sector and consumer confidence faltered at home, clean tech became one of Beijing’s most reliable economic engines – absorbing labour, soaking up credit and exporting the surplus abroad.

Provincial officials were rewarded for expansion. State banks kept credit flowing even as margins thinned. Overcapacity was tolerated because scale and market share – not profit – were the goals. Today, China produces more than 80% of the world’s solar equipment.

That history is what gives the Goldwind probe its weight. Chinese turbine makers have entered Europe with the same playbook: low prices, vast domestic scale and generous state backing. While developers welcome the savings, European manufacturers are struggling to compete. Cheap imports are convenient – until they become a choke point.

Brussels is now trying to draw a line. Under the Foreign Subsidies Regulation, the Commission can demand remedies or block contracts outright, closing what an official described to Euractiv’s Stefano Porciello as a long-standing “regulatory gap”: EU subsidies face strict state aid scrutiny, while foreign ones largely went unchecked.

The message is deterrence. State-backed dominance will not get a free pass this time – even if that means higher prices or slower deployment for the EU.

In Paris, that logic is already taking hold. French President Emmanuel Macron has called for a stronger “European preference” in procurement, warning of a “Chinese tsunami on the trade front.”

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European kids love China, Beijing says

CPC News, the propaganda organ of the Communist Party of China, touted polling data claiming that 82% of European young people hold a favourable view of China, selling the findings at home as evidence of Beijing’s growing diplomatic and economic appeal.

The survey – commissioned by the Institute of European Studies at the Chinese Academy of Social Sciences and the China-Central and Eastern European Institute and conducted by French research firm CSA – reportedly covered 36 European countries and 20,000 respondents. State media noted that 86% of those surveyed had never visited China, but said impressions were shaped online.

At a press conference unveiling the results, officials said trade ties between the EU and China had shown “remarkable resilience” despite “external shocks,” according to Red Thread’s Anupriya Datta.

The framing: as trade tensions rise, Beijing is keen to project an image of enduring goodwill at the societal level, insulating long-term relations from short-term political strain.

Australia pushes mobility in EU trade deal

Australians and EU nationals could gain easier access to each other’s labour markets under the EU-Australia free trade agreement, which negotiators aim to conclude this month, Australia’s Financial Review reports.

Talks are focused on facilitating temporary entry for skilled workers, professionals, investors and researchers, benefiting technology, consulting and knowledge-based sectors. The provisions would stop short of full freedom of movement.

Australian Trade Minister Don Farrell meets EU Trade Commissioner Maroš Šefčovič and Agriculture Commissioner Christophe Hansen in Brussels on Thursday to press for better terms on farm access.

If talks progress, Commission President Ursula von der Leyen could travel to Canberra in mid-March to sign the deal, an EU diplomat told Euractiv’s Sofia Sanchez Manzanaro.

For Canberra: geographic isolation and a culture that treats living abroad as a rite of passage make labour mobility the political sweetener – an easier win than agriculture.

Chinese EVs expand despite tariffs

Chinese electric vehicle exports hit new highs last year, reaching more than 150 markets even as the US and EU raised tariff walls.

Rather than retreat, manufacturers rerouted. Shipments surged into Southeast Asia, Latin America, the Middle East and parts of Africa – markets where price trumps subsidy politics. Backed by state finance, scale and integrated supply chains, Chinese brands are undercutting rivals and locking in early market share.

The takeaway: tariffs slow China’s advance in rich markets, but they don’t stop it – they simply push exports into the rest of the world.

Taiwan looks to Europe for cover

Taiwanese President Lai Ching-te told AFP that Taipei wants closer cooperation with European partners on defence technology, AI and semiconductor investment, arguing that deeper economic and industrial ties would help deter Chinese pressure.

The pitch: With doubts growing over how automatic US backing would be in a crisis, Taipei is trying to turn Europe from a distant trading partner into a strategic stakeholder in its security.

Paris hardens its China stance

A report by France’s government advisory body, Haut-Commissariat à la Stratégie et au Plan, proposes blunt countermeasures, including a blanket 30% tariff on Chinese goods or a currency adjustment, to shield industries from cars to batteries.

The EU last week imposed duties of up to 79% on Chinese ceramic kitchenware, adding to a growing stack of trade remedies.

The direction of travel: Paris wants Brussels to move beyond case-by-case tariffs and treat Chinese overcapacity as a structural threat, not just a pricing issue.

Dairy dispute heads toward WTO

Beijing’s recent decision to impose tariffs of up to 11.7% on EU dairy unsettled several EU capitals, Euractiv’s Harvest team reported. At a closed-door meeting, agricultural delegates urged the Commission to defend the sector and consider a World Trade Organization challenge. In response, the Chinese government said it would reduce duties on certain dairy products just before we published.

The signal: A WTO challenge would show Brussels still prefers rules to retaliation.

Chinese-owned chipmaker Nexperia will face a formal investigation into alleged mismanagement, an Amsterdam courts said on Wednesday. The Netherlands-based firm is owned by Wingtech, a Chinese group partly controlled by state-linked entities.