EU steps up solar power battle with China

The EU’s executive body is already studying Chinese dumping of solar panels, or deliberately selling products for less abroad than at home or at less than cost. It is the largest import sector it has ever targeted for such investigation.

The latest subsidy case followed a complaint by the EU ProSun group of 25 European solar panel companies led by Germany's Solar World, the same group that had complained of dumping. EU Prosun says subsidies from Beijing made available only to local firms have stimulated production there to more than 20 times Chinese consumption and close to double the global demand, and averted local bankruptcies.

Over the past week, China has lodged a complaint with the World Trade Organisation alleging Italy and Greece have illegally promoted domestic panel producers and warned it could put tariffs on EU exports of the raw material polysilicon.

The EU is China’s biggest trade partner. For the bloc, China is second only to the United States. However, relations have been tense, with EU Trade Commissioner Karel De Gucht complaining China subsidises nearly everything.

EU ProSun says Chinese panel makers have benefited from very low interest rates thanks to government policy, and if loans can’t be paid back they might be written off, extended indefinitely or paid off by government-controlled entities.

Chinese companies sold about 21 billion euros ($26.8

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