In mid-2012, Germany's largest solar-panel maker, Solar-world AG, requested that the European Commission investigate whether its Chinese competitors had committed dumping practices by selling solar panels at below-market rates in Europe. The move by Solarworld AG was backed up by the majority of the European solar industry. Chinese producers of solar panels were accused of selling their products below their manufacturing costs despite their own massive losses. The same accusation was made by the United States as the U.S. imports of Chinese solar panels soared from $21.3 million in 2005 to a staggering

$2.65 billion in 2011. Chinese companies led nearly half of the U.S.

market for solar in 2011, while in Europe, they provided 68 percent of solar panels, as compared with 40 percent in 2009. Chinese companies were also accused of receiving export subsidies by the Chinese government. If this allegation were true, the U.S. Commerce Department would impose tariffs on solar panels imported from China, ranging between 2.9 percent and 4.73 percent. Yingli Chief Strategy Officer, Wang Yiyu, claimed that the anti-dumping case is

“unreasonable,” “groundless,” and motivated by Solarworld's commercial interests. He further stated that the European Union enjoyed a trade surplus by selling solar manufacturing equipment and raw materials to China in recent years. How would this anti-dumping case affect trade relationship between China and both the United States and Europe in the long run? In your opinion, what careful steps must be taken as precautions before accusing firms of dumping practices? If Chinese companies were proven to conduct dumping practices, what implications would their actions bring to the solar panel industry around the globe? Analyze the implications from both developed and emerging economies' perspectives.