China says US duties 'obstruct renewable energy development'

China accused the US of “inciting trade friction” and “obstructing the development of renewable energy” after Washington maintained anti-dumping and anti-subsidy duties of up to 249% on Chinese solar cell imports.

In a statement, Shen Danyang, spokesman for the Ministry of Commerce, expressed China’s “strong dissatisfaction” with the US Department of Commerce ruling, saying that the US has “sent a negative signal of trade protectionism to the whole world”.

“We hope the US will correct its erroneous practice with early termination of the trade remedy measures,” he adds.

The US decision is another blow to Chinese solar companies already struggling to generate cashflow amid ongoing price declines driven by a huge glut in capacity.

While the final decision by the US International Trade Commission (ITC) is still pending, analysts expect the agency to approve the DOC measures.

The tariffs could further depress demand at a time when there is already too much production capacity, says Eric Cheng, analyst at Deutsche Bank in Hong Kong.

Chinese companies are, however, expected to seek ways around the US tariffs, assembling solar cells made in other countries into modules destined for the US – as they have been doing since the trade investigation was launched late last year.

Suntech, the largest of the Chinese firms, has a manufacturing plant in Arizona and claims it will continue to sell “hundreds of megawatts” of solar products to US customers that will not be subject to tariffs.

Most major exporters are outsourcing cell production to Taiwan or other countries, and in some cases that course of action can be more cost-effective, adds Cheng.

Taiwan has almost 10GW of cell capacity, says Ray Lian, analyst at Solarbuzz, more than enough to serve the US market.

Outsourcing only adds a few cents to production costs.

In the future, the top panel makers may set up their own production facilities outside China to serve the US and other markets such as Europe, which could also introduce anti-dumping duties on Chinese solar products.

JA Solar is looking at production in the US while Trina has been recruiting staff in Malaysia.

But the US tariffs also threaten to trigger further problems for the industry, with Beijing expected to retaliate by imposing its own measures on imports of polysilicon.

The government has begun investigating imports from both US and European producers after its own manufacturers alleged dumping by foreign competitors.