Beijing�with China's ambassador to the�World Trade Organisation, Yi Xiaozhun, called the import duties on Chinese solar panels a mistake

China calls for dialogue to avert solar 'trade war'

Beijing has called for dialogue to avert a “trade war” over EU import duties imposed on Chinese solar panels.

The European Commission agreed to impose punitive import duties on solar panels from China yesterday in a move to guard against what it sees as dumping of cheap goods in Europe.

The move has prompted a cautious response from Beijing with China's ambassador to the World Trade Organisation, Yi Xiaozhun, calling the decision a mistake although he declined to comment on any possible retaliation.

"It will send the wrong message to the world that protectionism is coming," Yi told Reuters in Geneva yesterday.

China's Commerce Ministry today called for dialogue.

"We don't want to see a trade war between the two sides and we hope the EU can cautiously make the ruling decision on China's solar panel products," spokesman Yao Jian told reporters.

Given that Germany and France are seeking to increase exports to China, EU trade chief Karel De Gucht, who proposed the move, will try for a negotiated solution with new Chinese Commerce Minister Gao Hucheng before an EU deadline in December to cement the levies for up to five years.

That could mean agreeing a minimum price at which all solar panels makers selling in Europe adhere to, diplomats said.

The EU duties, which will come into effect once the commission publishes the decision in its Official Journal, will be set at an average of 47 per cent, officials said.

The move follows an investigation started by the commission last September into Chinese dumping of cheap goods in Europe after complaints by a group of mainly German and Italian companies led by SolarWorld – once Germany's biggest solar group but now struggling with €900m in liabilities. Its smaller rival Q-Cells filed for insolvency last year.

The tariffs would deal a major blow to Chinese solar panel makers, especially smaller ones, if implemented, says Jason Cai, chief analyst at Shanghai-based consultancy Solarzoom.

Cai says he would expect the panel makers to face tariffs of differing levels, but adds: "If the tariff hit 47 per cent, nobody would be willing to export to Europe.”

Europe's stance on solar energy is complicated by the fact that some in the EU solar sector, notably importers and installers, support cheap panel imports from China.

They say EU tariffs would be damaging for efforts to develop clean energy and some fear retaliation by Beijing.

"Protective duties are poisonous for the solar industry," says Udo Mohrstedt, chief executive of Germany's IBC Solar. "These guarding measures will endanger more than 70,000 jobs in medium-sized companies in Germany alone."

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