China criticizes EU duties on solar panels

Announces anti dumping probe of European wine in dumping squabble

EU imposes a tariff on solar panels that will eventually average 47%. Photo: Thinkstock

BEIJING — China’s government criticized European anti-dumping tariffs on Chinese solar panels and announced its own probe of Europe’s wine exports.

The European duties announced June 4 are a blow to financially strapped Chinese solar panel producers that are struggling with excess production capacity and a price-cutting war.

The 27-nation bloc will impose a tariff of about 12% on the import of solar panels, cells and wafers, EU Trade Commissioner Karel De Gucht said. That will increase to an average of 47% in August unless a settlement is reached with China in the next 60 days.

The EU said it would postpone imposing the full 47% duties on solar panels, cells and wafers until August to allow time for negotiation.

“The ball is now in China’s court,” De Gucht said. “This is a one-time offer to the Chinese side to negotiate.”

The Ministry of Commerce said it was in “resolute opposition” to the European duties.

“We hope the European Union will further show sincerity and flexibility and a mutually acceptable solution can be found through consultations,” the ministry said.

In the same statement, the ministry announced it was launching an investigation into whether European wine exports were improperly subsidized. It said Chinese imports of European wine have grown rapidly, causing an impact on China’s producers.

A foreign ministry spokesman, Hong Lei, did not respond when asked at a regular briefing whether the wine investigation was retaliation for the solar panel duties.

Dumping traditionally means selling a product abroad at a lower price than at home but some governments also take action if the price is deemed to be below production cost or unfair in some other way.

Premier Li Keqiang, China’s top economic official, warned during a visit to Switzerland that European anti-dumping cases against Chinese solar power and telecommunications equipment would harm both sides. Li gave no indication how Beijing might respond but his comments fuelled fears Beijing might retaliate against European telecom equipment suppliers.

European imports of Chinese-made solar panels totalled $27 billion in 2011.

According to EU calculations, a fair sale price for Chinese solar panels should be 88% higher than what they are currently being sold for.

EU Trade Commissioner Karel De Gucht said Chinese dumping “has the potential to destroy an important industry” and more than 20,000 European jobs are at stake.

The trade row between the EU and China is the world’s biggest anti-dumping case by sales volume, according to EU officials.

“The Commission is making a gesture in order to avoid an all-out trade war,” said leading conservative European Parliament lawmaker Daniel Caspary, adding that is now China’s turn to show equally responsible behaviour.

“China has to show it is willing to stick to the rules of a globalized economy,” he said.
The global solar panel market is suffering from significant overcapacity, which has led to falling prices throughout the industry and stiff competition that has forced several European manufacturers out of business.

One of China’s largest producers, Suntech, filed for bankruptcy in March, while several other manufacturers there have reported heavy losses.

A coalition of European solar producers, EU ProSun, which was among the complainants that sparked the EU’s investigation nine months ago, welcomed the new levies as a step to counter China’s “flagrant violations of international trade law.”

“Dumping is fraud and harms the future of solar energy and must be relegated to the past,” the group said.

De Gucht added that to reach a settlement, Chinese manufacturers would have to agree to increase their prices and accept a lower market share quota. Chinese solar panels’ share of the EU market has risen to 80% over recent years.

If an agreement can’t be reached, the final anti-dumping tariffs, valid for five years, would require approval by a majority of the EU’s 27 member states six months from now. If the EU governments were to reject the tariffs, the money collected between now and the vote would be returned to China.

Several EU nations, including heavyweight Germany, have spoken out against imposing special duties and urged the Commission to reach a settlement with China.

Germany has the bloc’s biggest solar industry, but Berlin fears imposing special duties could provoke Chinese retaliation on imports of European goods, which would harm German exporters.

De Gucht sought to dispel fears of retaliation measures, rejecting such questions as “hypothetical.”

China also faces complaints by the US that it is improperly subsidizing solar panel producers and hurting US producers.

Washington imposed tariffs of up to nearly 250% on Chinese-made solar panels last year.

US imports of solar panels and cells in 2011 totalled $3.1 billion.