China shuts polysilicon loophole

The Chinese government made the latest move in the ongoing global solar trade dispute by announcing it will stop tariff-exempt imports of processed polysilicon from next month, with US-based producers tipped as the targets.

The move means Chinese PV manufacturers can no longer import polysilicon and escape Beijing’s previously-imposed anti-dumping tariffs as long as the solar products in question were destined for export markets.

Analysts said the closing of the loophole – know as the ‘Process in Trade’ rule – is primarily aimed at US polysilicon producers such as Hemlock and REC Silicon.

The US authorities in June closed their own tariff-busting loophole, which saw Chinese PV module-makers avoid American punitive duties by using Taiwanese cells.

Despite being home to GCL-Poly, the world's largest producer of solar-grade polysilicon, China still leans heavily on imports to feed its burgeoning solar sector.

The ruling by China’s commerce ministry applies to Korean and EU polysilicon imports, as well as those from the US.

But in practice the EU’s biggest polysilicon player Wacker has reached a quota deal with Beijing that exempts it from duties, while Korea’s producers face only token tariffs.

That leaves China’s move looking like the latest round of a tit-for-tat trade war over solar products that stretches back to 2011.