China proposes export caps to solve solar dispute with EU - paper

SHANGHAI/HONG KONG (Reuters) – China has proposed to cap the annual volume of its solar panel exports to the European Union and set a minimum price of its products sold there in an effort to resolve a potentially costly trade dispute between the two parties, the Shanghai Securities News reported on Friday.

Under the proposal, China will export no more than 10 gigawatt (GW) of photovoltaic modules to the EU a year at a minimum price of 0.5 euro per watt, the newspaper quoted Wang Sicheng, researcher with the National Development and Reform Commission, China's top economic planner, as saying.

In return, the EU should levy no or low taxes on Chinese solar panels, Wang was quoted as saying at a solar industry conference on Thursday.

Wang was not immediately available for comment.

EU regulators accused Chinese solar panel makers of selling their products below costs and began to impose duties on imports of Chinese solar panels last month.

The initial duty was set at 11.8 percent and would apply until Aug. 6. If no settlement is reached, the average rate will then rise to 47.6 percent - in effect blocking China's market access.

In an apparent response to the solar dispute, China formally began an investigation this month into whether Europe is selling wine in China below cost.

The solar dispute has the potential to affect 21 billion euros ($27.1 billion) worth of imported Chinese solar panels, cells and wafers from manufacturers such as Trina Solar, Yingli Green Energy and Suntech Power Holdings.

The EU accounts for about half of China's solar exports, which have already been hit hard by the euro zone debt crisis that had forced major European countries such as Germany to slash subsidies for renewable power.

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