Solar firms in China are warning of a trade war, calling on the Chinese government to respond with all means to an anti-dumping complaint filed by European competitors that they said could be a fatal blow.
Ratcheting up the stakes in ongoing disputes within the industry, companies led by Germany's SolarWorld on Wednesday asked the European Union to investigate claims that Chinese firms had been selling their products below market value in Europe - the world's biggest solar market.
SolarWorld spearheaded a similar initiative in the United States, leading the world's largest economy in May to impose duties of about 31 per cent on solar panel imports from China.
"If the EU were to follow the precedent of the U.S. and launch an anti-dumping investigation on Chinese solar products, the Chinese solar industry would suffer a fatal blow," Yingli Solar's chief strategy officer, Wang Yiyu said.
"The investigation would also trigger a whole-scale trade war between China and the EU, which would cause huge losses to both parties," he said at a briefing by four major Chinese solar firms - Yingli, SunTech, Trina and Canadian Solar.
Western solar companies have been at odds with their Chinese counterparts for years, alleging they receive lavish credit lines to offer modules at cheaper prices, while European players struggle to refinance.
Trade action in Europe could prompt China to return fire by taking similar measures against western solar companies.
"We call on the Chinese government to take all necessary and resolute measures to protect the legitimate interests of the Chinese solar industry," Wang said.
Close to 60 per cent of China's solar exports, worth $35.8 billion, were shipped to the EU in 2011, the four Chinese companies said.
Europe accounted for 74 per cent of global solar installations in 2011, according to industry association EPIA.
The European Commision has 45 days to decide if it will start an investigation.