EU starts trade investigation into China over solar glass

BRUSSELS (REUTERS) - The European Commission launched an investigation on Thursday into industry claims that Chinese solar glass producers are dumping their products in the European Union at below market value, opening a new front in the trade battle with China.

The Commission said there was sufficient evidence to show possible dumping by Chinese exporters that may be injuring EU industry.

The product accounts for a tiny fraction of the EU's imports of goods from China, which totalled 293 billion euros (S$475 billion) in 2011, but the complaint marks a new challenge from the EU to Chinese exporters and the Beijing government.

Last year, the Commission launched its largest investigation to date, into alleged dumping of, and subsidies for, an annual 21 billion euros of solar panels and components China exports to the EU.

The EU ProSun Glass group, led by EU sector leader GMB of Germany, filed a complaint last month in response to a fourfold increase of Chinese exports to the EU in four years. China's share of the EU market is now 25-30 per cent, it said.

EU ProSun Glass said Chinese peers had a manufacturing capacity of 400 million square metres, double total global demand, and had to smash some of the glass they produced.

The group says the Chinese government is covering losses of the industry, which is also benefiting from cheap credit and subsidies.

The group, whose members say they represent more than half of EU solar glass production, said duties of more than 100 per cent were required to bring Chinese prices of below 4 euros per square metre to a breakeven level of 7 to 9 euros.

EU anti-dumping investigations last up to 15 months. The Commission can impose provisional import duties within the first nine months. EU member states vote on whether to set definitive duties, which typically last five years.