Chinese power manufacturers struggle against trade barrier

The International Photovoltaic exhibition kicked off on Tuesday in Shanghai. It's only one day before the European Union will unveil details of a proposed "anti-dumping" tariff of 47 percent on Chinese made solar panels. Chinese exhibitors are expressing their concerns over the trade dispute.

1500 exhibitors are showcasing their latest photovoltaic technology. Most of them are deeply concerned about the EU's looming 'anti-dumping' tariff.

"70% of our sales go to Europe market. The import duty will be very destructive for us," said Justin Ding, vice president of Beyondsun Group.

They fear the European Union's tariff plans, could have a bigger impact on Chinese businesses than that imposed by the US tariffs.

"The tariffs to US only apply to cells. Now the dispute in Europe is potential more serious. US market is around 4 giga watts this year, European market maybe 20 giga watts, so it's 5 times larger. And the tariffs are not just to cells, but related to wafers, cells and module manufacture in China," said Jonathan Pickering, VP of global marketing of Chinasunergy.

Overseas demand for solar panels has been increasing. Even so, average prices have dropped 70% in the past two years. For Chinese manufacturers, surviving has become extremely difficult.

"Our gross profit margin is below 10% since later half of 2012. We have stopped export to the US because of the 125 percent tariff," said Justin Ding, vice president of Beyondsun Group.

In order to cope with the potential EU tariff, solar panel makers are looking at solutions to lower their cost or switch to emerging market.

"We have factories in Hungary, we will start to produce in Europe if EU starts charging tariffs on Chinese PV products," Jiang Zhan-Feng, GM PVS, division 2 of BYD.

"We are expecting this year probably more balanced portfolio, there are Japanese market, Asian markets strengthening to be around 60% of our sales too, for a balance to Europe US and Asia," said Jonathan Pickering, VP of global marketing of Chinasunergy.