[120513.EN.BIZ] EU Solar Panel Duties Against China Risks New Protectionist Round

THE European Union trade regulator's decision to impose import duties on solar panels from China following an anti-dumping investigation has give China the unexpected status as the bloc's second largest trading partner.

China's ambassador to WTO, Yi Xiaozhun is alarmed by the decision which "will send the wrong message to the world that protectionism is coming" in an average duty of 47 per cent, Reuters reports.

Germany's IBC Solar head Udo Mohrstedt agrees that "protective duties are poisonous for the solar industry," and only cause to put jobs on line for medium-sized companies in Germany estimated at more than 70,000 jobs.

It is unknown what Beijing's reaction will be given its recent warning in retaliation considering its own duties on EU exports of polysilicon used in making solar-energy devices.

The decision by the EC led to a rise in share prices of as much as seven per cent for German manufacturers SolarWorld, Phoenix Solar and Centrotherm against a drop of four per cent for Suntech, based in Wuxi on China's east coast which is already declared insolvent.

The EU has set a December deadline to agree upon levies for the coming five years and it is likely that the EU will negotiate with China before they are imposed, leading to a possible minimum price to all solar panels sold in Europe, say insiders.

The solar panel industry has been hit hard by rapid expansion over the last four years driving prices down by as much as 75 per cent. European producers accuse the Chinese of flooding the market with below-cost panels, but Chinese manufacturers have said before there costs are low because they produce at such a large scale the unit cost can be lower.

Europe took half of the global market in 2012 at $77 billion with Germany installing the most solar panels at 7.6 gigawatts of newly connected systems against China at second highest with five gigawatts.

Source : HKSG.