World and Nation

Chinese government retaliates in trade dispute with Europe

HONG KONG — The Chinese government announced Monday that it had filed a case with the World Trade Organization accusing some European Union member countries of violating free trade rules with policies that favor the purchase of solar energy equipment produced in Europe.

The WTO case is the latest in a series of retaliatory moves by China in response to efforts by the European Union and the United States to limit imports of solar panels from China. European and U.S. officials accuse China of dumping solar panels in foreign markets below the cost of manufacturing them and of subsidizing their manufacture — accusations that China has denied.

In a statement posted late Monday on its website, the Chinese Commerce Ministry did not identify the countries or the specific equipment covered by its trade complaint. But the ministry alleged that the countries’ policies violated WTO rules requiring that goods from all WTO member countries be treated equally, without discrimination in favor of locally produced goods.

The ministry also contended that the policies violated a free trade rule that countries not impose policies that have the effect of subsidizing domestic production as a substitution for imports.

The United States and the European Union acted after about a dozen solar panel manufacturers went bankrupt or cut back production on both sides of the Atlantic. But Chinese manufacturers are also struggling after state-owned banks financed a burst of construction over the past four years that left the country with more than two-thirds of the world’s solar manufacturing capacity. The industry is now struggling with overcapacity.

The European Union announced Sept. 6 that it had opened the largest anti-dumping investigation ever, into imports of Chinese solar panels worth $26.5 billion last year. China’s Commerce Ministry had tried for months to persuade European officials not to proceed.

In an initial retaliatory move, the Commerce Ministry said Thursday that it had begun its own anti-dumping investigation of imports from Europe of polysilicon, the main raw material for making solar panels. China had previously begun an anti-dumping investigation of polysilicon imports from the United States after the Commerce Department began an investigation a year ago that has led to anti-dumping and anti-subsidy tariffs on solar panels from China.

The Commerce Ministry officially asked the European Union on Monday for consultations under the auspices of the WTO in Geneva. This is the first step in WTO dispute resolution procedures that can lead, in a year and a half or so, to a decision by a panel of trade judges on whether the accused countries must rewrite the offending regulations.