European Union has sent the note to Chinese ambassador that it confirmed to start the anti-dumping investigation into solar cells and photovoltaic components imported from Chinese companies on August 31st, the 21st Century Business Herald reported, citing a lawyer familiar with the situation.

The Commerce Ministry and China’s ambassador to the EU declined to confirm the news. The European Union’s trade spokesman, John Clancy, also had no comment, only saying the EU commission will have 45 days from the date of filing, or until Sep. 6th, to decide whether to start an investigation.

On 24 July, a group of European solar companies, led by major German firm SolarWorld, filed an official anti-dumping complaint against China with the Commission, accusing Chinese manufactures of selling photovoltaic cells below cost,

However, German Chancellor Angela Merkel put European resolve on the solar issue to the test during her visit to Beijing, on 30-31 August, the Europolitics.info reported.

Alongside Chinese Prime Minister Wen Jiabao, Merkel called on the Commission to negotiate a compromise with China, hinting at Germany’s opposition to an anti-dumping procedure.

“We should try to solve the problems in the solar sector to avoid an anti-dumping case,” said the chancellor. “We have time for that, and it would be better if we could find a solution through talks,” she added with the full support of Wen Jiabao.

Her statement was a direct warning to Trade Commissioner Karel De Gucht, who is supposed to make a decision this week on whether to open an investigation into alleged dumping by Chinese solar panel makers.

China's PV industry has long been suffering from excessive inventories and cash flow shortages. In the face of the current global economic woes, most of the Chinese PV companies have suspended production this year.

With the EU accounting for 70 percent of China's PV export market, if high tariff are imposed after the EU commission's investigation it would become a critical issue for China's PV industry. A large number of Chinese PV companies will face the risk of bankruptcy, while the whole industry, as well as economy and the society will be seriously affected.

China is the world’s biggest maker of solar panels, a $37 billion global market. Relevant data shows that China has imported PV related materials and equipment worth $7.5 billion, and there are 280 thousand to 300 thousand jobs in the PV or related industries in the EU.

New energy was regarded as the core propeller in the third industry revolution. China has been in the onrush of opportunities in new energy industries including wind power industry and PV industry. U.S. and EU have successively launch investigations on China's two industries. These investigations are not only trade dispute, but also means it's time to grasp advantage in the world market of new energy for each country, said Shi Lishan, deputy director of Renewable Energy and New Energy Department of National Energy Administration.