Chinese photovoltaic companies face uncertainties

The European Commission will soon decide whether to start an investigation into Chinese photovoltaic (PV) companies after some European solar enterprises filed an anti-dumping complaint in July.

In the face of the current global economic woes, most of the Chinese PV companies have suspended production this year. On July 24, Germany's SolarWorld and some European enterprises filed an anti-dumping complaint with the European Commission.

Some industry insiders believe that once the EU accepts the complaints, and decides to initiate an investigation, a large number of Chinese PV companies will face the risk of bankruptcy, while the whole industry, as well as economy and the society will be seriously affected.

Worries and risks

Zeng Shaojun, secretary general of China New Energy Chamber of Commerce (CNECC) under All-China Federation of Industry and Commerce (ACFIC) said the investigation will include all homemade PV products, totaling nearly 1,000 billion yuan (158 billion U.S. dollars), which equates to the volume of imported vehicles from Europe to China in 2011.

Therefore,if the EU rules whether dumping behaviors exist and begin to raise tariffs, the trade, policy, economy and society of both China and European countries will be affected, Zeng added.

In addition, China's solar product exports were valued at 35.8 billion U.S. dollars in 2011, with the EU receiving a share of more than 60 percent, reaching 20.4 billion U.S. dollars.

If an investigation begins, this will be the largest trade dispute involving China in terms of trade volume.

Miao Liansheng, chairman of the board of Yingli Green Energy, one of the most advanced solar PV enterprises in the world, said if the anti-dumping case is verified, Chinese PV companies will be forced to transfer their industry to other countries, which will cause a loss to the real economy in China, and this newly leading industry will also lose its development opportunities.

Some enterprises in Hebei, Jiangsu and Jiangxi have started to explore new markets in Japan, Republic of Korea, Africa, South America and Southeast Asia.

To encourage the development of the industry, Chinese governments and banks have issued some preferential policies for the companies, such as issuing credits to build up plants and expand production.

If the companies shut down, the equipment and plants will depreciate, so the huge loan cannot be redeemed, and the stability of economy and society will also be affected. And the Chinese PV industry will face a devastating blow, said an official of Yingli, who refused to give the name.

Millions of umemployment 

Statistics show that China has more than 300,000 practitioners directly working for the PV industry. Adding other relevant enterprises, the number of workers involved in this industry reaches more than one million.

Liu Hanyuan, another senior official of CNECC, said that the case may force 80 percent of workers to lose their jobs or retain their roles but have their salary suspended.

"If the situation goes bad, we will allow some of the staff to have paid vacation, but we will consider job cuts if it gets worse," said Ji Youqiang, an official of Lightway Solar, located in north China's Hebei Province with more than 1,800 workers.

Based in Hebei Province, Jinglong Industry and Commerce Group Co. Ltd has nearly 30,000 staff, and most of them were born in the 1980s and 1990s. The deputy general manager An Zengxian told Xinhua that unemployment among young people will be on the rise, which may result in demonstrations, protests and other extreme actions.

Elsewhere, in east China's Jiangsu Province, the Yongyiyuan PV Technology Company has reduced staff by two-thirds.

"We only receive orders so that we can keep the major technical workers at the company," said Pian Yong, chairman of the company.

Call for dialogues

Chinese industry insiders said that price advantages, outstanding management modes and forward-looking strategies in the field have made Chinese PV companies competitively stronger in the world market.

Liu said some of the EU competitors filing an anti-dumping complaint about Chinese PV companies are attempting to transfer their own risks caused by backward management and production.

So far, the ACFIC is negotiating with relevant organizations from the EU. Trade war cannot solve the problem, but negotiation will be the only way, or the two sides will be affected, Zeng said.x On August 30, after co-chairing the second round of Chinese-German inter-governmental consultations, the German Chancellor, Angela Merkel suggested that the European Commission and China should try to resolve the issue through communication, rather than by resorting to anti-dumping proceedings.

Premier Wen echoed Merkel's stance, and said consultations are an effective tool for working out trade disputes.

On Sept. 1, Shen Danyang, the spokesman with the Ministry of Commerce urged China and Germany work together to promote negotiations for a proper solution.

Shen said the EU should listen to opinions from all parties and carry out the promise of avoiding any new form of protectionism at the G20 Los Cabos summit, and that the EU should not implement any trade protectionist measures against Chinese products.

However, Chinese PV companies are still worried about the uncertain situation as no concrete measures have been taken from the European side.