Workers make solar cells that are to be exported at an energy company in Lianyungang, Jiangsu province. [File photo]

Chinese photovoltaic (PV) solar companies are well-prepared for the preliminary ruling by a U.S. trade panel that imports of Chinese solar panels are harming its domestic industry.

"Now, it is just the beginning of the investigation," said Li Lei of Sidley Austin LLP, who is representing the China-based solar industry.

The US International Trade Commission (ITC) on Dec. 2 took the first step toward imposing added tariffs on Chinese solar imports, voting unanimously in Washington on a petition by Bonn- based SolarWorld AG (SWV) that called for antidumping and countervailing duties.

Such protectionism measures would hurt bilateral trade and jeopardise mutual cooperation on new energy issues, the Ministry of Commerce said on its website on December 3.

The Ministry of Commerce said the decision was made without sufficient evidence showing the US industry had been harmed and did not take into account Chinese companies' arguments or opposition from US industries and other affected groups.

"China is deeply concerned about the decision, which does not tally with facts and highlights the United States' strong tendency for trade protectionism," it said.

The commerce ministry said in the statement that China hopes the US will objectively analyze why some US solar panel companies lack competitiveness.

Li said the ministry's statement shows that the Chinese government is making an effort to protect domestic solar companies and the industry, which is a positive sign for the Chinese companies.

According to Li, as the requirements for being found to be "harming the industry" are low under US law, Chinese solar companies had expected this preliminary ruling from the very beginning.

SolarWorld AG, along with six other U.S. solar panel manufacturers, filed a petition with the U.S. Department of Commerce and the International Trade Commission alleging that Chinese companies have been dumping products on the U.S. market at prices below the cost of production.

The companies also accuse the Chinese government of providing illegal subsidies, cash grants and tax breaks to its solar-power manufacturing industry, thereby injuring U.S. manufacturers.

The proposed punishment is duties of more than 100 percent on the price of imported solar panels from China.

"For the Chinese companies, they don't need to change their planned schedule of defending the case," he said. "To keep on collecting the evidence and getting prepared for the field investigation in China by the Department of Commerce is what the companies are going to focus on next."

As international players in the global market, the domestic solar companies will adjust their business strategies and market expansion plans accordingly to reduce losses caused by the investigation, he said.

Fourteen Chinese solar panel producers, including Suntech Power Holdings Co and Yingli Green Energy Holdings Co, have decided to jointly raise a plea in response to the US probe.

The companies have said that their success in the US lies in having more advanced manufacturing technologies, efficient management and larger production scales.

Li Junfeng, secretary-general of the Chinese Renewable Energy Industries Association, said Chinese solar companies are part of the global solar production chain and have greatly contributed to its development, including creating thousands of jobs in US when many China-based companies have established factories there.

"If any tariffs are imposed on Chinese PV solar cell products, regardless of the amount, that would inflict huge damage on the industry because the Chinese solar panel industry heavily depends on the overseas market and profits are not high," he said.

Ministry of Commerce spokesman Shen Danyang warned last month that the anti-dumping and anti-subsidy investigation in the US could damage bilateral energy cooperation and impede the progress of global efforts to deal with climate change.

The ITC voted unanimously on Friday that there was a "reasonable indication" that Chinese solar cell imports have harmed or threatened to harm the US solar industry.

The Department of Commerce will make a final ruling on the anti-subsidy issue by November 2012 and an anti-dumping ruling no later than next July, according to Li.

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