Possible EU Punitive Solar Duties Opposed

Chinese photovoltaic panel manufacturers face import tariff s of up to 67.9 percent in Europe.

China is firmly opposed to any punitive duties set by the European Union targeting Chinese solar companies, and the government will defend the rights of domestic companies, a senior Chinese official said on May 09, 2013.

"China expects the EU to be cautious in taking any sort of measures," said Yao Jian, a spokesman for the Ministry of Commerce , during a news conference. "We don't want to see a trade war."

As major trade partners, China and the EU should resort to dialogue and consultations to resolve frictions, he said.

Chinese photovoltaic solar panel manufacturers face import tariffs of up to 67.9 percent at EU borders under a plan from the 27-nation bloc's executive body.

The tariffs could range from 37.3 percent to 67.9 percent, and could be 47 percent on average, the European Commission draft proposes.

"The proposed tariffs are much higher than the forecasts by Chinese industrial insiders," said Gao Hongling, deputy secretary-general of the China Photovoltaic Industry Alliance.

She told China Daily that most Chinese solar panel manufacturers have heard about the plan, but that she hasn't received any official announcement yet.

Meanwhile, industry insiders have suggested that Chinese companies will jointly protest against the planned tariffs along with their German counterparts who believe that the proposed move would hurt the European solar industry, she said.

However, nothing has been finalized, she added.

Following the US decision to impose punitive tariffs on PV solar products from China of up to 249.96 percent in November, the EU started an investigation into alleged government subsidies for Chinese solar panel makers.

The EU is due to issue a preliminary anti-dumping ruling in coming weeks and an anti-subsidy ruling in August.

The case is the largest-ever trade conflict between the two sides, involving more than $20 billion in terms of total volume, according to Sun Yongfu, directo r general of the department of European affairs of the ministry.

"Although Europe has lost its title as the largest destination for Chinese exports, it's still our largest trade partner," Sun said. "Cases like this damage the overall reputation of Europe among the Chinese public."

"This case is huge in terms of value and has the potential to hurt the local industrial chain," Yao said.

Chinese companies said they hope that the government can help to solve the dispute through dialogue.

"Many PV solar panel producers couldn't pay back their loans to banks and went bankrupt because of the investigations from the US and EU," said a general manager at a solar company in Shandong province, who declined to be named.

He said that his company's profits have dropped 80 percent in the last three years and that it will definitely be at loss this year.

Even so, he said the company is doing better than most in China since hundreds of medium- and small-scale solar panel makers have shut down their factories, while his company is still producing, albeit with a very small output.

"Some companies moved their factories to Taiwan or to foreign countries such as Indonesia and Thailand to avoid the ruling, but I don't want to," he said. "I'm counting on the Chinese government to solve this with the EU."

China's trade with the European Union decreased 1.9 percent year-on-year to $124.41 billion in the first quarter, the General Administration of Customs said on May 08, 2013.