The cold wind of trade protectionism is blowing toward China. With the tire industry still in the shadow of US punitive tariffs, China's solar industry is facing dumping claims from German counterparts. Germany is one of the key markets for China's photo-voltaic manufacturers. If Germany took regulatory action, the impact on China's industry would be devastating.

China's PV industry has confirmed that it is facing anti-dumping actions from Germany. Several weeks ago, two German companies filed a petition to their national government and the EU, claiming that Chinese solar panel and cell makers received improper subsidies. They contend that local power generation firms should not source products manufactured in China. As Europe is one of the main export destinations for China's PV industry, the impact on those companies could be grave.

Liu Yong, Vice President of JA Solar said "If Europe sets up a trade barrier, the impact will be big on all the enterprises. We organized several meetings within the industry to discuss it, with all Chinese major PV companies present. We are inclined to set up an industry alliance, to jointly negotiate with outside world."

PV manufactures would not be the only ones impacted. The up-river industry -- multi-crystalline silicon manufacturing, with its annual production capacity of 80-thousand tons -- is also facing a seismic shock.

Wu Jinhong, GM of Shunda Electronic Materials Tech. said "95 percent of our output is sold to solar companies. If they are impacted, we will naturally be affected."

China has set up a panel of executives from top domestic solar PV companies to help deal with the allegation. Led by the chairman of Suntech, the largest domestic solar-panel maker, the delegation is travelling to Germany to meet with members of the European PV industry.

Xie Xiaonan, Vice President of Suntech Power Holdings said "The senior officials of Chinese major PV companies are in Hamburg to join the European Photovoltaic Solar Industry Conference. They will actively negotiate the issue with German counterparts, in hopes to increase mutual understanding and trust."

China is the world's largest maker of photovoltaic products, and the biggest exporter, with more than 90 percent of manufacturing output shipped overseas to Germany, Spain, Japan, and the US, among other countries.

(CCTV September 28, 2009)