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In July - twenty of the leading solar manufacturers in the EU filed a complaint with the European Commission that China was selling its solar panels in the EU market at a loss, and thereby demolishing all competition.
The EU is by far the largest solar market in the world, and in just a few years China has managed to become the largest producer of solar panels. Last year it supplied 80% of exported panels to the EU; a business that is worth more than €20bn (£15.85bn) a year.
The EC now risks a trade war with China after they announced that they will launch an investigation into the Chinese exports on Thursday.
“EU Pro Sun, an industry association, claimed in its complaint lodged on 25 July 2012 that solar panels and their key components imported from China enter the European market at prices below market value,” the commission said. “The commission is legally obliged to open an anti-dumping investigation if it receives a valid complaint from a Union industry which provides evidence that exporting producers from one or more countries are dumping a particular product into the EU and causing injury to the Union industry.”
The US has already imposed tariffs on Chinese solar panels, and China will seriously contend any action taken by the EU as it starts to watch its potential solar markets turn hostile. The China Daily, the official English language newspaper in Beijing, wrote that retaliation would be taken against the EU by the way of curbs on trade.
Germany, whose solar firms led the complaint, suffers to lose the most if Beijing becomes upset, as they currently enjoy a special relationship with China based on trade and exports.
By. Charles Kennedy of Oilprice.com
Charles is a writer for Oilprice.com