China files solar WTO complaint

Nov. 6, 2012 at 12:30 PM
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BEIJING, Nov. 6 (UPI) -- China has filed a complaint with the World Trade Organization against photovoltaic solar subsidies in the European Union.

The action on Monday represents the latest wrinkle in the trade row over solar products between the two economies as well as the United States.

It follows Beijing's announcement last Thursday that it would begin an anti-dumping and anti-subsidy investigation into imports from the European Union of solar-grade polysilicon, a key ingredient in solar cells.

In September, the European Union launched an investigation into whether Chinese companies were dumping solar panels in Europe. Chinese industry figures show that around 57 percent of China's solar exports -- $20 billion worth -- went to the eurozone last year.

At issue in Beijing's latest complaint are photovoltaic subsidies granted by Italy and Greece.

Italy and Greece issued decrees in 2011 and 2012 granting additional subsidies of 10 percent on electricity generated by solar installations if the main components of those installations were produced within the European Union or the European Economic Area, China Daily newspaper reports.

"China considers that the measures are inconsistent with the WTO rules on national treatment ... and constitute import substitution subsidies that are banned by the WTO," said China's Ministry of Commerce in a statement Monday.

While many countries subsidize solar-generated power to encourage solar operators and related equipment manufacturers, they don't go as far as to give additional subsidies to installations that primarily use domestically manufactured components, ministry official Yang Guohua said in the China Daily report.

"The development of solar and other sustainable energies helps people the world over deal with energy-security issues and the challenges of global warming," Commerce Ministry spokesman Chen Dan said in a statement.

Domestically, solar energy accounts for less than 0.1 percent of China's current power supply, says the China National Energy Administration.

"Every nation should take a long-term view and strengthen cooperation in the industry, be open to the international trade, and avoid protectionism."

China's export-focused solar market has been plagued by excess manufacturing capacity and decreasing foreign demand.

For example, Chinese exports of solar products to Italy -- the third-largest market for China's solar products within the European Union -- fell from $4.8 billion in 2010 to $3.9 billion in 2011, the Commerce Ministry says, and dropped to $760 million in the first three quarters of this year.

But some industry experts say the Beijing's WTO complaint isn't likely to boost the country's ailing photovoltaic industry.

"It won't help China's solar industry by starting a trade war," said Li Junfeng, head of the China Renewable Energy Industry Association.

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