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EU nations back off from punitive solar panel duties

Fear of Beijing's retaliation sparks opposition to plan for 50 per cent tariff on Chinese products

PUBLISHED : Wednesday, 29 May, 2013, 12:00am
UPDATED : Wednesday, 29 May, 2013, 5:08am

Shares in Chinese solar panels and parts makers rose after a survey showed that most European Union nations were opposed to Brussels's plan to impose punitive import duties averaging almost 50 per cent on mainland solar power products.

Reuters quoted diplomats as saying that fears over reprisals from Beijing and a potential loss of business have led Germany, Britain, and the Netherlands and at least 12 others among the EU's 27 member nations to oppose the duties.

Industry people expect Beijing to roll out preferential tariffs for solar power generators to boost domestic demand to support panel makers if Brussels agrees to the duties, a decision expected on June 6.

Liu Hongwei, chairman of the solar farms installer China Singyes Solar Technologies, said: "Beijing will surely protect the domestic industry, where 200 billion yuan [HK$251 billion] has been invested."

Frank Haugwitz, founder of the Hong Kong-based industry consulting firm Asia Europe Clean Energy (Solar) Advisory, said he expected Beijing to unveil preferential tariffs for domestic solar power production after June 6, to fine-tune its policy depending on the level of the duties.

Shares of Hong Kong-listed solar products makers rose between 0.6 per cent and 2.5 per cent yesterday. Last September the European Commission launched an investigation into alleged "dumping" of solar panels and parts by China's producers at below-market prices and in quantities that have purportedly hurt the European industry.

The 27 EU nations had until last Friday to submit responses to EC trade chief Karel De Gucht's proposal to impose the duties. He has the authority to impose them, but it would be politically difficult to do so.

De Gucht claimed that Beijing has been putting pressure on some EU members to oppose the duties.

A Ministry of Commerce statement yesterday quoted Zhong as warning the proposed duties would harm China's industries and jobs and "severely affect" China-EU trade, adding: "This kind of trade protectionism is unacceptable to China."

China's solar panel output quadrupled between 2009 and 2011 to exceed global demand, resulting in price falls and industry-wide losses.

EU producers said China's firms have captured more than 80 per cent of the European market from almost zero a few years ago, exporting solar panels and parts worth €21 billion (HK$211 billion) to the EU in 2011.

Haugwitz said if the duties come at the expected levels, solar panel and parts makers from China will have to consider shifting production to the EU, or to unaffected nations such as Turkey and Thailand.



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