Workers check solar panels in Lianyungang, Jiangsu province. The share of China's solar-panel exports in the European market dropped to 30 percent last year from 70 percent in 2012. SI WEI/CHINA DAILY

Companies fear punitive action will hurt exports from China

Chinese solar companies may face a new round of investigations in the European Union regarding claims that panel manufacturers are circumventing import duties, and experts said such a move would be a heavy blow for debt-ridden photovoltaic producers.

"It will be like rubbing salt into the wound, if EU authorities decide to launch an action, although it's still at the documentation stage," said an anonymous source from a solar panel producer in China.

"Compared with anti-dumping measures, anti-circumvention actions target a wider group of solar companies, prohibiting crystalline silicon photovoltaic products made in the Chinese mainland and Taiwan."

Solarworld AG, one of Germany's largest solar-panel producers, has asked the EU to launch an anti-circumvention probe, saying that it faces unfair competition from Chinese companies. The move was reported by MLex, a news organization that covers regulatory developments in the United States and Europe.

The German company said many Chinese mainland companies tried to avoid import duties by assembling panels from solar cells produced elsewhere, especially Taiwan.

Experts said anti-circumvention investigations would be an extension of anti-dumping probes.

Solarworld has claimed that the companies are using this loophole to avoid anti-dumping tariffs that have been in force since 2012.

The experts said that if an investigation were launched, Chinese companies could be shut out of the European market.

The share of China's solar-panel exports in the European market dropped to 30 percent last year from 70 percent in 2012, according to the China Chamber of Commerce of Machinery and Electronic Products.

Officials at solar companies said it is unlikely that the EU will conduct such a probe, because it attaches more importance to mutual benefit than the US.

Dennis She, chief executive officer of Jiangsu-based ET Solar Group Ltd, said he is personally "optimistic" about the outcome.

"The EU's trade authority has just finished a pre-investigation into eight Chinese solar companies including ET Solar, based on the allegations of Solarworld. And the result is that only some occasional, small problems were found at some companies," said She.

He noted that it is less likely that the European authorities will impose fresh trade barriers on Chinese companies.

A solar panel consensus reached between China and the EU last year substantially restricted the volume and price of solar products exported from China. The EU has achieved its goal of "providing space" for local solar companies in Europe, She said.

Exports to the EU account for 25 percent of ET Solar's total exports now, compared with 50 percent before the EU solar trade dispute.

As emerging markets such as Japan and Australia, and the domestic market, take more solar products, most Chinese manufacturers are becoming less dependent on European buyers, he said.