China, EU close to deal on solar panels

China and the European Union (EU) are close to an agreement that will resolve a dispute over Chinese solar panel imports and avert a potential trade war, sources said Thursday.

The news came after Reuters reported Wednesday that Chinese negotiators had reached an agreement on key elements of a deal that could avoid hefty EU duties on Chinese solar panels that are set to be imposed in August, citing unnamed Chinese and European sources.

"The two sides have not completely agreed on everything but are close to a solution," a Chinese source who attended the negotiations with the EU and who declined to be named told the Global Times Thursday.

The source declined to give further details.

"Negotiations are ongoing at the highest level toward an amicable solution," EU Trade Spokesman John Clancy said in a statement e-mailed to the Global Times Thursday.

In June, the European Commission, the EU's executive arm, announced an interim anti-dumping duty of 11.8 percent on solar panel imports from China, with the rate set to be raised to more than 47 percent in August if the two sides fail to reach an agreement to resolve the dispute.

Negotiators need to agree a minimum price at which Chinese solar panels can be sold in the EU and also an annual quota for Chinese solar panel imports to the EU.

According to the Reuters report Wednesday, negotiators are close to agreeing a minimum price of 0.55 euros ($0.73) per watt of capacity for Chinese solar panels to be sold in the EU.

"The 0.55 euros level is the ultimate limit that both sides can accept. It's possible the two sides can reach such a deal," Meng Xian'gan, deputy director at the China Renewable Energy Society, told the Global Times Thursday.

According to Meng, Chinese solar panels had been sold in the EU for as little as 0.4 euros a watt, while the lowest price for solar panels made by European manufacturers is about 0.58 euros a watt.