Solar panel makers deny violating settlement with EU

The production line of a solarpanelmaking company in Lianyungang, Jiangsu province. Chinese solarpanel makers said on Thursday that the EU's "violation accusations" are "baseless and smack of trade friction." Si Wei / For China Daily

Chinese solar panel makers have denied charges that they are in "massive violation" of a settlement between China and the European Union that ended a bitter trade feud between the two sides last year. In a statement issued on Thursday, the Chinese companies said that they are being targeted unfairly and the accusations made by the key European lobby are "baseless and smack of trade friction."

"The accusation is groundless and not verified. Spreading such information will damage the implementation of the current minimum price agreement between China and the EU," said a statement released by the China Chamber of Commerce for Import and Export of Machinery and Electronic Products.

On June 5, the European solar industry initiative EU ProSun submitted over 1,000 pages of documentation to the Directorate-General for Trade of the European Commission "containing about 1,500 proposals by Chinese solar companies offering prices below the minimum level agreed by the EU Commission and China," said a statement from the lobby group.

China and the EU were on the brink of major trade war last-year, after the 28-member bloc alleged that Chinese solar companies had received massive government subsidies and were selling products in the European market at prices below fair valu he dispute was settled after both sides agreed to a minimum price up to a certain threshold of imports.

Milan Nitzschke, president of EU ProSun, claimed that the EU trade rules are being "systematically violated" by Chinese manufacturers and called for the review of "the entire minimum price agreement".

The Chinese chamber, in its statement, said that China has been strictly following the agreement which took effect on Aug6,2013.

"We guarantee that all contracts are in line with the agreement. We are also in close communication with the EU Commission to periodically report all the contracts by Chinese manufacturers...The chamber checked with the Chinese companies that were reported to be breaking the agreement, and all stated that they did not violate the agreement and were willing to receive the verification by authorities," the chamber said in the statement.

The Chinese companies also condemned the "groundless reports", the statement said.

"The chamber has communicated with EU officials and agreed to conduct an on-site check soon regarding the implementation of the minimum price agreement. The chamber will support punitive measures if Chinese companies are found to be in violation of the agreement."

Cui Hongjian, director of European studies at the China Institute of International Studies, said the current dispute will not affect the overall agreement on solar products between China and the EU.

"The current dispute is more on a technical level and the Chinese government will not help the companies if they have violated the agreement. Unlike the dispute last year, China and the EU now have an established framework to control the disputes over solar products," Cui said.

"The key is for the EU Commission to maintain communication with its Chinese counterparts and avoid any misunderstanding," he said.

The United States on June 3 decided to levy preliminary duties, ranging from 18.56 percent to 35.21 percent, on Chinese solar equipment imports, claiming they had benefited unfairly from government subsidies.

Following the complaint from Solar World AG's US branch, the US probed solar product exports from China in 2011 and applied duties for the next year.