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23/07/2016

China calls 47% duty on solar panels ‘a mistake’, calls for dialogue

Trade & Society

China calls 47% duty on solar panels ‘a mistake’, calls for dialogue

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The European Commission agreed to impose punitive import duties on solar panels from China in a move to guard against what it sees as dumping of cheap goods in Europe, prompting a cautious response from Beijing which called for further dialogue.

EU commissioners backed EU Trade Chief Karel De Gucht's proposal to levy the provisional duties by 6 June and make Chinese solar exports less attractive, two officials said.

Shares in German manufacturers SolarWorld, Phoenix Solar and Centrotherm rose sharply, while China's Suntech fell heavily.

The investigation into accusations of dumping is the biggest the Commission has launched, but Brussels is trying to tread a careful path, knowing it needs China, the EU's second largest trading partner, to help the bloc pull out from recession.

China's ambassador to the World Trade Organization, Yi Xiaozhun, called the decision a mistake although he declined to comment on any possible retaliation.

"It will send the wrong message to the world that protectionism is coming," Yi told Reuters in Geneva on 8 May.

China's Commerce Ministry on 9 May called for dialogue. "We don't want to see a trade war between the two sides and we hope the EU can cautiously make the ruling decision on China's solar panel products," spokesman Yao Jian told reporters.

Given that Germany and France are seeking to increase exports to China, De Gucht will try for a negotiated solution with new Chinese Commerce Minister Gao Hucheng before an EU deadline in December to cement the levies for up to five years.

That could mean agreeing a minimum price at which all solar panels makers selling in Europe adhere to, diplomats said.

Duties to average 47%

The EU duties, which will come into effect once the commission publishes the decision in its Official Journal, will be set at an average of 47%, officials said.

Trade specialists from all 27 EU countries will be consulted on 15 May at a meeting in Brussels and are expected to back the decision, although their position is non-binding.

The European Commission declined to comment.

Chinese solar panel production quadrupled between 2009 and 2011 to more than the entire global demand. EU producers say Chinese companies have captured more than 80% of the European market from almost zero a few years ago, exporting €21 billion to the European Union in 2011.

As a result, Chinese-made panels are as much as 45% cheaper than those made in Europe, industry executives say.

Europe accounted for half of the global market in 2012, which was worth $77 billion (€59 billion), according to research firm IHS.

Background

The European Commission recently launched an anti-dumping and anti-subsidy investigation against Chinese solar manufacturers, after European solar manufacturers lodged complaints alleging that Chinese rivals were benefiting from unfair subsidies.

But while European and US solar technology manufacturers would welcome such action, installers and prospective purchasers of solar technology are increasingly concerned that such a move will drive up the cost of solar panels, leading to a slowdown in the deployment of the technology and job losses across the industry.

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