Nan Cunhui, chairman of Chinese solar panel manufacturer Chint said in an interview with China.org.cn that a US decision over whether to impose punitive tariffs on the Chinese solar panel products would, if approved, wreak havoc on the industry.

An alliance of seven American companies filed a case against China last October alleging that Chinese manufacturers obtained improper subsidies from the Chinese government and dumped solar panels in the US market at prices below the cost of manufacturing and shipping them.

Commenting on the upcoming ruling, Nan said: "The impact of the ruling will be very severe, if not devastating. Those small domestic producers who are manufacturing products under another company's brand are more vulnerable to the impact [of the ruling]."

The decision now scheduled for March 20 will slap as much as 100 percent punitive tariffs on Chinese solar panel products if the allegations of product dumping and receipt of unfair government subsidies are upheld.

Nan added that the situation would be exacerbated by the European debt crisis.

He added that the case stemmed in part from the anti-China sentiment that has started to seep into the U.S. Presidential campaign.

"The U.S. Presidential election will give rise to something irrational this year," he said without elaborating any further.

Li Hejun, chairman of Hanergy Holding Group, a new energy conglomerate based in Beijing, also believes the move will damage China's solar industry, but he commented that it could also have a positive industry-wide effect. "The higher tariffs will lead to a restructuring in China's solar industry which is already facing overcapacity," he said. "In this regard, it has positive potential."

Commenting in a separate interview with the New York Times, Nan said that the silver lining for Chint is the fact that the trade complaint did not include the thin-film panels that Chint is planning to start making in the U.S. Rather, the complaint is targeted at conventional polysilicon solar panels, which Chint exports under its Astronergy brand.

According to statistics provided by the China Renewable Energy Society, China exports more than 95 percent of its solar power production, with much of it going to the U.S. Including installation, the U.S. market is worth about US$6 billion a year.

The case is especially serious, as a ruling against Chinese solar panel producers would prompt other countries to follow suit. The EU and India, which are among China's main markets, will emulate the U.S., as weakened economies act as an incentive to introduce new protectionist measures. Coinciding with the case is a bill recently passed by the U.S. Congress to impose anti-subsidies duties on non-market economies such as China and Vietnam.

To cope with the anticipated tariffs to be set by the U.S., Chint has considered moving partial production from China to other countries and regions as a way to dodge possible trade disputes.

"We are already in the process of assessing overseas investment conditions," said Nan. "We will take into consideration the local production cost, production conditions and capabilities. The results [of our assessments] will be announced this year."

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