Chinese solar firms warn of trade war
September 27, 2012 Category Alternative energy, Environment
Solar cell makers in the European Union have called on the European Commission to probe alleged dumping practices by their Chinese rivals, as Beijing warned an investigation could trigger a trade war. EU ProSun, a group of more than 20 European solar companies, called on Brussels to “investigate unfair trade practices by Chinese manufacturers”. The group suspects China of providing its solar players with large loans and other subsidies that allow them to sell their solar cells at prices below their production cost. “Europe has the world’s most advanced and innovative solar industry, but we’ve fallen on hard times and are faced with bankruptcy filings because of these Chinese products sold at rates that are up to 55% below production cost,” EU ProSun President Milan Nitzschke said. Seven of the world’s leading manufacturers of solar modules are Chinese. China’s manufacturers have called the dumping allegations “groundless”. Four major firms in China warned that a EU anti-dumping investigation could trigger a trade war, adding the country is a big market for European products, including cars, aircraft, machines and luxury goods. “Any additional punitive tax will also contribute to the loss of thousands of jobs in the European solar industry,” Suntech Europe president Jerry Strokes said in July.
China launched a probe into alleged U.S. dumping of solar products and government subsidies for the sector. The Ministry of Commerce (MOFCOM) will investigate whether U.S. companies sold polysilicon used to produce solar batteries at artificially low prices in China. Products made in South Korea will also be included in the probe. In addition, China will look into alleged U.S. state subsidies for the sector, including tax exemptions, supplying land free of charge and granting public funds for job training. The probe, which is expected to last for at least a year, comes after the United States in May slapped hefty anti-dumping duties on Chinese solar cell makers, which Beijing blasted as “protectionist”. The price of U.S. polysilicon imports fell more than 67% year-on-year from January to May, squeezing many Chinese firms out of business, He Weiwen, Researcher at the China Association of International Trade, said. “Only eight out of the 43 polysilicon companies in China can barely sustain production. Others have almost all stopped operations, with one in the process of filing for bankruptcy,” he said. The European Commission launched a formal investigation in early September, which activated the largest trade dispute involving China in terms of trade volume. China’s solar product exports were worth USD35.8 billion in 2011. The EU receives a share of more than 60% of those exports, or USD20.4 billion. In May, the U.S. decided to impose tariffs on more than 31% of solar panels made in China, in addition to the fees ranging from 2.9% to 4.73% imposed in March. Suntech Power Holdings said that in order to cut production costs and operating expenses, it has temporarily shut down a portion of its solar cell production capacity at its Wuxi, Jiangsu province, headquarters. Rival Trina Solar said it will cut about 200 employees at the management level. New York-listed LDK Solar, which has seen losses recently, said it is going to cut 5,554 employees, accounting for 22% of its staff.
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