China said Thursday it "deeply regrets" a European Union decision to probe claims that solar panel products were being sold by Chinese firms below cost and warned of problems potential penalties may cause.
EU ProSun, a group of more than 20 European solar panel makers, in July called on the European Commission to impose tariffs to punish its Chinese rivals who it suspects "dumped" goods and received subsidies from Beijing.
The European Union said Thursday it has decided to start an anti-dumping investigation after evidence provided by EU ProSun showed the Chinese products have had "substantial adverse effects on the financial situation of the Union industry."
The EU, in its Official Journal, said that if the investigation finds Chinese makers were dumping and caused injury to the EU solar industry, it will decide whether penalties should be imposed.
China's Ministry of Commerce quickly issued a statement saying: "The European Commission went ahead to initiate the anti-dumping investigation despite repeated calls by China to solve the trade dispute on photovoltaic products via consultations and cooperation.
"China expresses deep regret about this."
Ministry spokesman Shen Danyang added in that restricting Chinese photovoltaic battery products would harm both sides and "damage the healthy development" of the global photovoltaic industry and clean energy."
Chinese solar companies also voiced concerns over any potential tariffs the investigation might lead to as well as prospects for a trade war between the two economic heavyweights.
"The solar industry is based on a global and complex value chain, and will be therefore substantially and negatively affected by trade protectionism," said Darren Thompson, managing director of the European arm of Yingli Green Energy.
"There would be no winners but rather immeasurable damage and regression from our fundamental goal of making solar a cost-effective energy source available to everyone," he said in a company statement.
Yingli Green Energy said it would cooperate with the European Commission to prove that there was no basis for the imposition of punitive tariffs.
"A misguided trade war could undermine years of solar industry progress, investment and innovation," the company added.
Suntech Power Holdings, meanwhile, emphasized the potential for harm to the European solar industry.
"Protectionist measures would increase the cost of solar energy in Europe, and adversely affect European jobs in the solar industry," Shi Zhengrong, the company's executive chairman and chief strategy officer, said in a statement.
More than 60% of China's $35.8 billion of solar product exports went to the EU last year, according to Chinese industry figures, while the country imported $7.5 billion-worth of European solar equipment and raw materials.
Trina Solar, another Chinese company, flatly denied the claims. "Trina Solar products are neither dumped nor subsidized. They are produced, and sold competitively on the European market," chairman and CEO Gao Jifan said.
"We believe the trade investigation will reveal that Trina Solar competes fairly with its competitors in the European Union."
--Fran Wang, AFP
Copyright Agence France-Presse, 2012