China 'highly optimistic' about solar trade talks with EU
Reuters – Fri, 5 Jul, 2013 2:41 AM EDT
By Charlie Zhu and Samuel Shen
HONG KONG/SHANGHAI (Reuters) - China expects to resolve a muli-billion dollar solar trade spat with the European Union by next month, a senior Chinese industry official said on Friday, after a newspaper reported that Beijing has made a new offer with EU to settle the dispute.
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 (NYS:TSL), Yingli Green Energy (NYS:YGE) and Suntech Power Holdings (NYS:STP).
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.
"We reckon there is a big chance for us to defuse the dispute," said Sun Guangbin, secretary general of the solar department of China's Chamber of Commerce for Import and Export of Machinery and Electronic Products, a government-industry association authorised to represent Chinese solar companies.
"We remain highly optimistic about the direction we are moving in," Sun, who is directly involved in China's talks with EU over the solar trade dispute, told Reuters by phone from Beijing.
He declined to comment on a report in the Shanghai Securities News on Friday that China was making an offer on the volume and price of Chinese solar exports in its negotiations with EU.
China has proposed to cap the annual volume of its solar panel exports to the EU 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 newspaper said.
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 paper quoted Wang Sicheng, a researcher with the National Development and Reform Commission (NDRC), China's top economic planner, as saying.
Any exports exceeding the limit will be subjected to punitive tariffs, Wang was quoted as saying at a solar industry conference on Thursday. In return, the EU should levy no or low taxes on Chinese solar panels.
Wang was not immediately available for comment.
RETALIATION
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 August 6. If no settlement is reached, the average rate will then rise to 47.6 percent - in effect blocking China's market access.
China, whose solar panel production quadrupled between 2009 and 2011 to more than the entire global demand, has said the EU duties would seriously harm trade ties. Beijing is deciding whether to levy its own duties on imported European solar-grade polysilicon, a raw material used in solar panel production.
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.
EU Trade Commissioner Karel De Gucht, in China last month for talks, said he hoped any agreement on solar panels would help to resolve the wine dispute. EU officials deny dumping wine in China or subsidising exports.
China is also scrambling to diversify its exports away from the Europe and boost domestic demand for solar panels in face of slumping exports.
The Shanghai Securities News quoted Wang as saying that the NDRC's energy research institute was now working with relevant government departments to draft a long term development plan for the domestic solar industry.
Under the plan, China aims to boost its solar power generating capacity to 100,000 megawatt (MW) by 2020 from just 800 MW at the end of 2010, Wang said.
(Editing by Jacqueline Wong and Sanjeev Miglani)
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