U.S. solar panel duties could cost it China market - minister

The U.S. decision to approve steep duties on Chinese-made solar panels could cost American exporters a growing market, Chinese Commerce Minister Chen Deming said on Saturday, adding that he didn't want to see a trade war.

The U.S. International Trade Commission voted last week in favour of duties ranging from 23.75 percent to about 250 percent, ruling that a flood of cheap solar panels from China had hurt U.S.-based manufacturers. Similar cases are under way in Germany.

China has already struck back by launching an investigation into imports of solar-grade polysilicon from both the United States and South Korea, and warned of action against European polysilicon.

"If you say I bought your equipment and raw materials but now that I am shipping my products you want to pop on a 249 percent tariff, fine then, buy why should I buy any more of your raw materials or equipment?" Chen told reporters on the sidelines of the 18th Communist Party Congress that will anoint the next generation of Chinese leaders.

"That's why I say any unilateral trade action will also impact the instigator. China is developing, urbanizing, China has a lot of construction under way and will need solar products, so the U.S. is losing out on a big market in the future."

The United States imported about $3.1 billion worth of solar cells and panels from China in 2011, up from $640 million two years earlier, although both figures contain some products not covered by the ITC investigation.

SolarWorld, the largest U.S. solar-panel manufacturer, accused Chinese competitors such as Suntech Power Holdings and Trina Solar of selling solar cells and panels in the United States at unfairly low prices and receiving government subsidies.

SolarWorld's German parent, SolarWorld AG, is pressing the European Union for similar curbs on Chinese solar products.

Chen valued the solar panel manufacturing equipment bought from the United States at over 40 billion yuan ($6.41 billion), and from Germany at "billions of yuan".

Chinese firms poured into manufacturing solar panels, lured by domestic subsidies meant to encourage high-tech industry and by European and American subsidies for solar energy installation.

Profits have plummeted due to cut-throat competition among over 100 Chinese manufacturers and the drying up of overseas purchasing incentives.

Chinese households often use solar panels in rooftop water heaters but the country has yet to implement any policy to encourage domestic solar energy generation.