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EU ProSun, led by SolarWorld, has filed a complaint with the European Commission to investigate what it describes as illegal subsidies provided by the Chinese government to its solar manufacturers. According to the consortium, these subsidies have "fed massive overcapacity."

This request for an investigation of Chinese government support is separate from the recently initiated investigation into possible dumping by solar manufacturers. That investigation commenced earlier this month, based on an earlier complaint by EU ProSun.

"Chinese government subsidies are only available to Chinese companies," notes Milan Nitzschke, president of EU ProSun. "Massive subsidies and state intervention have stimulated overcapacity more than 20 times total Chinese consumption and close to double total global demand.

"Hence, more than 90 percent of Chinese production had to be exported," he adds. "Irrational overproduction on this scale cannot generate profits."

According to EU ProSun, Chinese banks are offering a range of subsidies to Chinese manufacturers, including low-interest rates, loans that are written off if the borrower is unable to pay, credit lines from state banks, and regional and local subsidies.



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