Energy: China threatens trade war over solar panels

By Ian Traynor in Brussels

The European commission upped the ante in a potential trade war with China yesterday, announcing an investigation into allegedly unfair exports of solar panels worth more than euros 20bn (pounds 15.85bn) a year.

Leading European solar panel manufacturers complained in July that China was demolishing competition by exporting the panels at a loss. "In terms of import value, this is the most significant anti-dumping complaint the European commission has received," the commission said. Last year China exported solar panels worth euros 21bn to the EU. In a few years, China has become the world's biggest solar panel producer, while the EU is by far the biggest market for the Chinese products.

Beijing's official English-language newspaper, China Daily, warned on Wednesday that China would retaliate with trade curbs on the EU if the investigation went ahead. The German government, enjoying a trade and exports-based "special relationship" with China, is wary of incurring Beijing's wrath, but the complaint has been spearheaded by German firms. The US authorities have already slapped tariffs on Chinese solar panel exports. The commission said it would deliver a provisional verdict on the dispute by June next year.

 (c) 2012 Guardian Newspapers Limited.