The Eu-China Trade War

We have been writing continuously about the global solar trade wars, covering all the countries involved. Europe started the biggest anti dumping case against China. The German solar panel maker Solarworld, complained against super cheap imports of solar modules from China to the EU worth 21 billion euros, under a group called ProSun. The EU-China solar spat is the largest one in the global solar industry since China imports most of its production to Europe, particularly countries like Germany and Italy. In fact, the Chinese solar growth has been largely driven by the solar subsidy policies in the European countries. Until last year, almost 95% of the Chinese solar panel production was exported to Europe. Europe accounted for almost 55% of the world’s demand of solar panels in the last year and has been instrumental in the growth of the Chinese solar industry. Read more here.

Provisional 11.8% Duty

The case was left open, until yesterday when there was news that the European Union has decided to levy anti-dumping duty of 11.8% on the imports from Chinese manufacturers. If the countries do not come out with some sort of agreement in next 2 months, the duties might be raised substantially to a range of 37%-70%, ie almost 3-6 times. The provisional increase came as a big relief for the Chinese manufacturers, who were expecting higher duties. This might increase the imports of solar panels temporarily, till August 2013 when the fate would be decided.

Europe, China Reactions

Europe is relieved to hear the decision of the Commission and strongly opposes the Chinese act of selling modules cheaply in the world. China on the other hand, opposes this move and wants to enter into an agreement that would be mutually beneficial to both the nations. It says that the future of the entire global solar industry is at stake.

The graph above shows four major stocks in China closed below their previous day prices on June 5th, when the news came in. 

Bloomberg

The duties are “an emergency measure to give life-saving oxygen to a business sector in Europe that is suffering badly from this dumping,” European Trade Commissioner Karel De Gucht said yesterday. He said the lower rate is an incentive to bring the Chinese solar industry to the bargaining table.

 “We are relieved that the European Commission finally introduced concrete measures,” EU ProSun, a group that represents European producers including Germany’s biggest panel-maker Solarworld AG (SWV), said in a statement yesterday. “Dumping is fraud and harms the future of solar energy.”

“Punitive tariffs — no matter at what level — will inevitably lead to higher prices for solar products, causing at least the stagnation of the solar industry in Europe,” Miao Liansheng, chief executive officer of Yingli Green Energy Holding Co. (YGE), China’s largest panel maker by shipments, said in a statement today. The company seeks “the prompt resumption of talks between China and the European Commission.”