Talks urged in solar panel dispute

PUBLISHED : Friday, 25 May, 2012, 12:00am
UPDATED : Friday, 25 May, 2012, 12:00am


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Major Chinese solar panel makers, facing punitive tariffs imposed by the United States, appealed for a 'peaceful solution' as the Sino-US trade spat on renewable energy seemed to be escalating.

The Ministry of Commerce yesterday announced it found the US government provided renewable-energy companies with unfair grants prohibited under the World Trade Organisation rules.

Beijing will extend an investigation of the subsidy for three months, in what market watchers described as a 'retaliatory move' to Washington's introduction of a 31 per cent anti-dumping tariff on Chinese solar panels last week.

However, bosses of Chinese solar companies, fearing a severe blow to the photovoltaic (PV) industry as a result of the spiralling political tension, urged Beijing to avoid a trade war and iron out the festering trade spat through talks.

'The government should not close the door [for the development of renewable-energy industry],' said Miao Liansheng, chief executive of Yingli Green Energy, one of the mainland's largest solar equipment makers. 'The US government will eventually realise that it is also taking a hit from the anti-dumping duties.'

Yingli and Suntech Power, the world's largest producer of solar panels, are among the 14 companies that formed an alliance in Shanghai yesterday to protect the embattled PV sector on the mainland.

Suntech chief executive Shi Zhengrong told a press conference that he was confident the US Department of Commerce would scrap the punitive measure against Chinese firms.

'We will actively participate in the ongoing anti-dumping investigation by the US,' he said. 'We want to convince them of our competitive advantage, which will benefit the PV industry worldwide.' To make the finished product, Chinese solar companies import materials and purchase US technologies worth a combined US$5 billion a year.

The bosses at the Chinese solar companies said it would be better to 'take a long view and keep developing solar energy to slash the overall costs'.

The alliance will also step up efforts to lobby the central government to roll out incentives to develop the domestic solar power market.

The country's solar companies are largely dependent on US and European markets.

The State Council is reportedly considering liberalising the power generation and distribution sectors to bolster solar companies.

The State Grid Corporation and the China Southern Power Grid are now the only intermediaries between power generators and end-users. The country's residential solar-panel owners are barred from selling the power they generate in excess of their own consumption to the grids.

Suntech's Shi said Europe could follow the US in introducing anti-dumping duties on Chinese companies, which could deal a heavier blow to them. Europe accounts for about 70 per cent of sales for many Chinese solar companies, Shi added.