The Sino-European photovoltaic (PV) trade dispute, which has been ongoing for nearly two years, is finally showing signs of resolution. In a bid to ease tensions, EU Trade Commissioner Cecilia Malmström and Chinese Commerce Minister Gao Hucheng recently attended the annual China-EU Economic and Trade Mixed Commission. Gao emphasized that both China and the EU are committed to resolving the PV dispute through price commitment negotiations, demonstrating a mutual willingness to find a solution.
Commissioner Malmström also expressed the European side's desire for a friendly resolution. She stated that an agreement on the PV framework had been reached, although technical issues still require further discussion. Both sides remain confident that a final agreement can be reached in the coming weeks.
This development has brought a glimmer of hope to the Chinese PV industry, which has endured a long period of hardship. For companies struggling with declining demand and export restrictions, this potential breakthrough could signal a much-needed turning point.
But can this new direction truly help the domestic PV sector? The concept of a price commitment involves exporters agreeing to raise prices or limit exports to avoid anti-dumping duties. This approach has been used before by the EU in cases involving color TVs and magnesia bricks.
In the current PV case, China would commit to not exporting products below a certain minimum price and limiting annual exports within a specific range. In return, the EU would refrain from imposing anti-dumping measures. This marks a major shift after the EU’s “double anti-dumping†measures on June 4th, which saw initial tariffs at 11.8% and potentially rising to 47%.
Industry insiders believe that if a reasonable price threshold is set, this agreement could help restore some level of exports to Europe. However, concerns remain about whether the proposed terms will be too restrictive for Chinese companies.
Zhejiang Dazhan Photovoltaic’s General Manager Xu Hui said, “We don’t want to give up the European market and hope the negotiations succeed.†While the European market has shown strong interest in Chinese PV products, anti-dumping measures have forced many companies to withdraw. If the price commitment is acceptable, it could help revive exports, but the final terms will be crucial.
Another insider revealed that while China submitted a price commitment plan, the EU has not fully accepted it. If the minimum price is set too high, Chinese PV products may lose their competitiveness in Europe.
“Even if we lose the European market, we’d rather not accept such conditions,†the source added.
For many Chinese PV companies, keeping the European market is essential for survival. Zhou Dewen, deputy director of the Democratic Progressive Committee and chairman of the Wenzhou SME Development Promotion Association, emphasized that having a market means having a chance to compete and survive.
He noted that price commitments involve significant concessions, potentially reducing profits by around 30%. But for the industry, survival is the top priority. Zhou believes that even though the price advantage may be lost, maintaining market presence is crucial for future growth.
Europe and the U.S. remain key export markets for Chinese PV products. Despite economic challenges, European consumers continue to value the quality and affordability of Chinese solar panels. This confidence gives companies hope that a fair agreement can be reached.
Zhou also warned of potential risks, such as losing the right to retaliate if the agreement is too one-sided. He stressed that while negotiations must be sincere, they should not lead to unfair losses for Chinese companies.
With the government showing support and Prime Minister Li Keqiang expressing confidence in the process, there is optimism that the next two months of talks could bring positive results.
Despite the difficulties, companies like Dazhan PV are trying to adapt. Xu Hui described the current situation as “painful†and “difficult,†citing excessive investment and financial strain. She admitted that the pressure is immense, but she remains determined to keep the company afloat.
Zhou Dewen highlighted the broader challenges facing the industry, including tight financing, debt issues, and legal battles. He called for more government support and a more patient approach from banks to allow companies time to recover.
Looking ahead, exploring new markets and focusing on cost reduction are seen as vital strategies. The upcoming Renewable Energy Heating Implementation Plan also offers a potential lifeline for the industry, with ambitious targets for solar thermal energy use.
In the face of adversity, the PV industry continues to search for ways to survive and thrive. With careful negotiation and strategic planning, there may yet be a path forward.
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