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China solar executives aim to avoid trade war with U.S.

By Michael Martina

BEIJING (Reuters) - Heads of China's solar industry on Tuesday said they strongly oppose an investigation by the U.S. into Chinese-made solar panels and asserted that competitive advantages alone explained their success on the global market.

However, in a statement from the China Chamber of Commerce for the Import and Export of Machinery and Electronic Products (CCCME), which represents the solar industry, they added that the firms did not intend to start a trade war with the U.S. industry.

"China-based PV (photovoltaic) industries express their strong opposition to the petition for the investigations ... and that any trade restrictive measures that may be imposed will unavoidably cause serious impairment to the sustainable development of the green industries as well as consumers' interests in both China and the U.S."

Earlier this month, the U.S. Commerce Department agreed to look into a complaint by Solarworld Industries Americas Inc, the U.S. arm of Germany-based SolarWorld AG, petitioning the government to slap duties on Chinese solar cells and modules.

China on Friday announced its own investigation into U.S. government policy and subsidy support for renewable energy, including solar equipment.

The tit-for-tat investigations underscore simmering trade tensions between the two countries, as leaders warn of a rising tide of protectionism amid gloomy global economic forecasts.

"Chinese companies hereby avow that their fight in the investigations is directed against a few petitioners led by SolarWorld only, not the entire U.S. PV industry. Chinese PV companies have no intention to initiate a trade war in China against the U.S. PV industry," the Chamber statement said.

Chinese solar firms said that their success was due to "competitive advantages" and the global industry should welcome their efforts to cut production costs.

NO SPECIAL TREATMENT

The Chinese association's statement defended the government support given to Chinese PV industries, saying it is "a much smaller amount" compared with what the United States and the European Union give to their companies.

Heads of major Chinese solar firms -- Yingli Green Energy, Suntech Power Holdings Co Ltd, Trina Solar Ltd, and Canadian Solar Inc, told reporters during a briefing that they had received no special treatment from the Chinese government.

"Interest rates for Chinese firms' domestic bank loans are much higher than those in Europe and the United States," CEO and Chairman of Suntech, Shi Zhengrong said. "Foreign criticism of China's solar industry receiving large government subsidies is immoral."

Canadian Solar CEO and Chairman Qu Xiaohua said he was "very sorry" that SolarWorld, having received millions in European and U.S. subsidies, "applies such a double standard when it talks about subsidies."

China's solar industry association, China Photovoltaic Industry Alliance, had earlier said that Chinese solar companies may ask Beijing to launch an anti-dumping and subsidy probe into imports of U.S. polysilicon, the raw material used to make solar cells.

The alliance said the U.S. polysilicon companies were enjoying "substantial economic benefits" and receiving "hundreds of millions of dollars in government subsidies," on top of perks such as cheap electricity.

While the U.S. probe threatens to deprive Chinese rivals of a large chunk of the solar market, analysts say U.S. solar firms also risk losing some of the business too if the dispute escalates into a major rift.

The U.S. International Trade Commission, which has the final say on whether any duties are imposed against China in the case, will examine the issue and vote December 5 on whether there is enough evidence of injury to U.S. companies to proceed. If it does move ahead, the Commerce Department would make its preliminary decisions on duties in January and March.

U.S. Ambassador to China Gary Locke, leading a business delegation to China's eastern Shandong province to promote U.S. energy exports, told Reuters that dumping by Chinese companies would have to be resolved, but played down the cost of the countries' renewable energy spats.

"The amount of trade that's affected ... really amounts to a just a few percentage points of the total volume of trade between our countries," Locke said.

(Reporting by Michael Martina; Additional reporting by Li Ran and Lucy Hornby; Editing by Ken Wills and Helen Massy-Beresford)

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