EU opens China solar industry dumping probe

 EU regulators opened a probe into the solar power panel industry in China, the European Commission said on Friday, in response to accusations that Chinese companies were dodging import duties by exporting via Taiwan and Malaysia.

Following a complaint by European firms, "the Commission has concluded that sufficient evidence exists to justify the initiation of an investigation," the Commission said in the European Union's official journal.

The complaint threatens to spark a new flare-up in a long-running row on a trade issue that Brussels and Beijing only recently managed to damp down.

The investigation will try to establish whether Taiwanese and Malaysian companies are true producers of solar power products or as European manufacturers allege, only fronts for Chinese producers.

If found at fault, the Commission could impose heavy anti-dumping duties on the Chinese products concerned, in a repeat of a bitter dispute between the two giant trading partners

Top lobby EU ProSun argues China exports solar modules and cells via Taiwan and Malaysia and passes them off as locally made to avoid EU levies.

"Such circumvention is customs fraud and must be stopped," said Milan Nitzschke, President of EU ProSun in a statement welcoming the probe.

EU ProSun has been a fierce critic of Chinese manufacturers who it says have largely destroyed Europe's solar panel industry.

After months of tit-for-tat reprisals involving punitive levies on solar panels and a widening range of other goods, the EU and China called it quits in 2013 and agreed a new minimum price regime for solar panel imports from China.

This does not cover all Chinese companies however and there have been repeated complaints by European firms over alleged breaches of the accord which expires at the end of this year.

The Commission, the EU's executive arm which polices competition issues, launched an investigation in December into alleged Chinese dumping of solar glass, a key component of solar panels.