EU ProSun suspects China of providing its solar players with large loans and other subsidies
A host of EU solar makers have called on the European Commission to probe alleged dumping practices by its Chinese rivals, as Beijing warned an investigation could trigger a trade war.
EU ProSun, the group of more than 20 European solar companies, called on Brussels to "investigate unfair trade practices by Chinese manufacturers" in a statement Thursday.
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 percent below cost production," EU ProSun President Milan Nitzschke told AFP.
The dumping practice referred to by Nitzschke -- also vice-president of German cell maker SolarWorld AG -- is banned by the European Union and the World Trade Organisation (WTO) and was at the centre of a recent trade decision.
The United States decided in May to slap hefty anti-dumping duties on Chinese solar cell makers, which Beijing blasted as "protectionist".
Now the European solar firms want the EU to follow suit with trade defence measures of its own, as they struggle to keep up with their Asian rivals.
According to an International Energy Agency (IEA) ranking, seven of the world's leading manufacturers of solar modules are Chinese.
Industry pioneer Germany, in particular, has felt the strain, with local solar firms going belly up right up to the industry flagship Q-Cells.
And in France, fellow veteran Photowatt was acquired by a power utility earlier this year after filing for insolvency.
But with EU solar firms sounding the alarm, China's manufacturers have fired back, calling the dumping allegations "groundless".
Four leading firms in China warned Thursday that a possible EU anti-dumping investigation could trigger a trade war and urged Beijing to step in to protect their interests.
They called on the Chinese government to block the case by opening dialogue with the European Union in the Thursday statement.
More than 60 percent of China's $35.8-billion-worth solar shipments were exported to the EU last year while the country imported $7.5 billion of European solar equipments and raw materials, they said.
A probe "would trigger a full scale trade war between China and Europe," they said, adding the country is a big market for European products including cars, aircraft, machines and luxury goods.
They added that any move to restrict market access would disrupt global efforts to achieve the goal of saving energy and cutting emissions in the long term.
The companies also said the growth of Chinese solar companies actually helped create most of the EU's current 300,000 jobs in related industries.
"Any additional punitive tax will also contribute to the loss of thousands of jobs in the European solar industry," Suntech Europe President Jerry Strokes told AFP Wednesday.
Suntech Power Holdings Co., one of the firms spearheading the Chinese offensive, is a global solar leader along with First Solar in the US.
In apparent retaliation to the US duties, China last week started a probe into alleged dumping of solar products by US manufacturers as well as alleged US government subsidies for the sector.
As for the EU probe, a spokesman for the EU Environment Commissioner said Thursday the office had yet to receive the complaint, which Nitzschke confirmed to AFP they had lodged this week.
Once the probe request is recorded, the Commission will have six weeks to make its decision. Germany has already committed to support its solar players in their battle.