Disputes solved but questions remain

A Sino-EU dispute over photovoltaic products was resolved on July 27 with both sides achieving a win-win solution. This result, achieved through negotiation rather than a trade war, sets a good model for China in dealing with trade conflicts in the future. But some questions still remain unanswered, said an article in the 21st Century Business Herald (excerpts below).

Photovoltaic raw material and manufacturing equipment suppliers in the EU, who strongly oppose the EU's anti-dumping investigation of Chinese photovoltaic products, played important roles in helping to reach the final agreement. In a globalized era, large economies' interests can integrate with each other.

However, the Chinese government must draw lessons from the industry's rise and fall. It was government support, in a bid to develop new energy, that made the photovoltaic industry grow rapidly in some places. Once international demand declined because of trade protectionism during the financial crisis, the excess production capacity of the photovoltaic industry, which highly relied on the demands of international market, became a burden for the government immediately.

Some local officials do not understand the industry well, such as its environmental influences, and tried their best to support the industry to boost local economy and apply for central government subsidies.

The agreement between China and the EU does not mean the difficulties for the Chinese photovoltaic industry have come to an end. Some will be weeded out and the whole industry will undergo a reshuffle.

The government must avoid such farces that cause huge losses for the national economy in the future.