China Launches U.S. Solar Dumping Probe

July 20, 2012
Will investigate whether U.S. companies sold the kind of polysilicon used to produce solar batteries at artificially low prices in China.

In the latest volley in a trade row between the world's top two economies, China on Friday started a probe into alleged U.S. dumping of solar products and government subsidies for the sector.

The Ministry of Commerce will investigate whether U.S. companies sold the kind of polysilicon used to produce solar batteries at artificially low prices in China, it said in a statement.

Products made in South Korea will also be included in the probe.

In addition, China will look into alleged U.S. state subsidies for the sector, including tax exemptions, supplying land free of charge and granting public funds for job training, the ministry said in a separate statement.

"The Ministry of Commerce will investigate the dumping and subsidy situations ... and the harms they caused to the industry in China and come to a ruling according to the law," it said.

The probe, which is expected to last for at least a year, comes after the United States in May slapped hefty anti-dumping duties on Chinese solar cell makers, which Beijing blasted as "protectionist."

The price of U.S. polysilicon imports fell more than 67% year on year from January to May, squeezing many Chinese firms out of business, He Weiwen, a researcher at the ministry-affiliated China Association of International Trade,  said. "Only eight out of the 43 polysilicon companies in China can barely sustain production. Others have almost all stopped operations, with one in the process of filing for bankruptcy," he said.

The move is the latest in a slew of trade rows between China and the United States over a wide range of issues that have on occasion had to be settled by the World Trade Organization. The WTO issued a ruling this week largely backing the United States in a dispute over lucrative electronic payments, in which U.S. companies are global leaders but lag in China.

Washington has also filed WTO complaints over Chinese duties on imported American cars and Beijing's export controls on rare earths -- lucrative minerals widely used in the making of high-tech products including the iPad.

Copyright Agence France-Presse, 2012

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