Solar panel manufacturers in the European Union on Tuesday lodged a complaint against China over allegations it illegally subsidises its solar industry.
"Most Chinese solar companies would have gone bankrupt a long time ago if not for endless government subsidies," said Milan Nitzschke, the head of industry association EU ProSun.
The EU is China's main export market. Its exports of solar panels and components to the bloc in 2011 was valued at about 21 billion euros (26 billion dollars).
Nitzschke argued that Chinese subsidies and state intervention had driven the country's production of solar panels to over 20 times more than domestic consumption, and almost double the total global demand.
"Irrational overproduction on this scale cannot generate profits," Nitzschke added.
China is the world's largest producer of solar panels, at 65 per cent, according to the European Commission.
By contrast, the European solar panel market has struggled in recent years, with more than 20 insolvencies in 2012, according to EU ProSun.
The commission was unable to confirm that the complaint had been lodged but a spokesman said that, in such cases, it had 45 days to decide whether to launch an investigation.
Earlier this month, the commission began investigating whether Chinese solar panel producers were illegally undercutting prices on the European market - also at the behest of EU ProSun - in its largest ever anti-dumping case in terms of import value.
The issue of trade disputes came up during an EU-China summit in Brussels last week, when Chinese Prime Minister Wen Jiabao called on the EU to "exercise restraint" in resorting to applying duties to Chinese imports.
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