After six weeks of intense negotiations, China and the EU reached a price commitment agreement to resolve the ongoing photovoltaic trade dispute. This development is expected to ease the tensions that had escalated into an unprecedented Sino-European trade conflict. On July 27, European Commission Trade Commissioner Karel De Gucht announced that a "friendly" solution had been reached between the two sides, which will soon be submitted for approval by the European Commission.
The details of the agreement were not disclosed publicly at the time, and officials emphasized that the plan still requires final approval from the member states within the next 10 days. Once approved, the specifics will be made public. The agreement is seen as a major step in avoiding high anti-dumping duties that the EU had previously planned to impose on Chinese photovoltaic products.
Industry insiders believe this deal could prevent the so-called "double anti-dumping" measures that China had threatened against EU wines and potentially even imported cars. However, a source close to China's Ministry of Commerce remained cautious, stating that the true impact of the agreement would depend on the official documents released after the negotiations.
Meanwhile, the European Solar Industry Association (ESIA) expressed concerns over the agreement, claiming it fails to protect European manufacturers and has vowed to challenge the decision in the European Court of Justice. The group had previously supported the EU’s investigation into Chinese solar imports.
On June 4, the EU had imposed a temporary anti-dumping duty of 11.8% on Chinese photovoltaic products, with the possibility of increasing it to 47.6% if no compromise was reached by August 6. In response, China initiated an anti-dumping and countervailing investigation into EU wines, raising fears of a full-blown trade war. Although the wine issue was relatively small in volume, it carried significant political weight, especially for countries like France, Spain, and Italy, which are major wine exporters to China.
Following the PV agreement, concerns about a broader trade conflict have eased. The final text of the China-EU PV negotiation agreement has now been formally submitted to EU member states for approval. If passed, the details will be announced shortly.
Regarding the wine case, industry representatives confirmed that there will be no further action. According to Wu Jianhua, Secretary General of the Shanghai Brewing Industry Association, the "double anti-dumping" investigation into EU wines will remain just that — an investigation, with no real consequences expected.
One key element of the agreement is the agreed-upon price of 0.56 euros per watt, which is close to the current spot price of Chinese panels in the European market. While this represents an 8% increase compared to previous prices, some EU producers argue that it still constitutes dumping and accuse the European Commission of failing to protect local industries.
Analysts suggest that while the agreement benefits China, it also allows the EU to maintain control over the market. Wang Haisheng, a senior analyst at Minsheng Securities, noted that the 0.56 euro/watt price is competitive compared to Japanese and South Korean markets but may limit large-scale projects in Europe. He also warned that the European market might see reduced activity in the second half of the year, mainly driven by rooftop installations.
Looking ahead, industry experts warn that next year could be more challenging for Chinese PV companies exporting to Europe. Lu Jinbiao, deputy general manager of Jiangsu Zhongneng Silicon Industry Technology Development Co., Ltd., explained that while the price commitment may not affect domestic companies significantly now, future competition from Taiwan-based firms could become more intense due to their lower production costs and faster scalability.
Another critical issue is the allocation of quotas under the agreement. According to reports, China will be allowed to supply around 7 billion watts of photovoltaic panels to the EU without tariffs, based on 2012 levels. However, how these quotas are distributed among Chinese companies remains a hot topic, with concerns about rent-seeking and potential black-market activities.
In addition to supporting domestic manufacturers through international aid projects, the Chinese government is also working to address loopholes in the polysilicon trade, particularly in processing trade, which currently avoids anti-dumping duties. Officials are considering ways to plug these gaps, including on-site inspections to verify data and ensure fair enforcement.
Meanwhile, the U.S.-South Korea polysilicon case continues to raise questions. A preliminary ruling set a very low tariff rate for Korean company OCI, sparking concerns that it may not provide adequate protection to the domestic industry. The Ministry of Commerce is now seeking feedback and planning inspections to ensure transparency and fairness in the process.
Overall, the China-EU PV agreement marks a significant step toward resolving one of the most contentious trade disputes in recent years, but challenges remain in ensuring its long-term effectiveness and fairness for all stakeholders.
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