China announced Thursday a trade investigation into European exports of solar-grade polysilicon, escalating a bitter trade row with the EU which has unveiled a similar probe into Chinese products.

The probe into the product, a key material used in the making of solar cells, is the latest in a series of trade disputes between China and its Western trading partners, including autos, steel and rare earth minerals.

The commerce ministry said in a statement that it would examine whether firms from the European Union sold the products at artificially low prices in China.

It will also investigate alleged subsidies received by the EU producers and exporters and probe any damages caused to Chinese companies. The findings will help the ministry "come to a just ruling according to the law".

The probes were launched after complaints by Chinese polysilicon producers that included claims that EU firms received German government subsidies and favourable loans from the European Investment Bank, a separate ministry statement said.

European companies that may be affected must register to respond within the next 20 days and report values and quantities of the products they sold in China between July 1 last year and June 30, it said.

The ministry aims to complete the investigations in one year or a maximum of 18 months if "unusual conditions" come into play, it added.

The row in the solar sector between China and the European Union escalated after Brussels in September launched an investigation into whether Chinese companies were selling panels in Europe at up to 80 percent below actual cost.

EU ProSun, which groups European makers and called for the anti-dumping probe, has also filed an official complaint with the European Commission over alleged illegal subsidies to Chinese firms.

Beijing reacted sharply to the EU investigation, warning that restricting Chinese solar battery products would harm both sides.

More than 60 percent of China's $35.8 billion of solar product exports went to the EU last year, according to Chinese industry figures, while the country imported $7.5 billion-worth of European solar equipment and raw materials.

China has also urged the United States to rescind hefty anti-dumping and anti-subsidy duties on Chinese solar-cell makers.

The US Commerce Department this year announced penalties that include anti-dumping taxes at between 18 percent and 250 percent to offset the impact of alleged unfair competitive edges of Chinese firms.

The measures are still up for confirmation by the US International Trade Commission, which is expected to rule this month.

Beijing on July 20 launched its own investigation into alleged US subsidies for and dumping of solar-grade polysilicon, in an apparent tit-for-tat reaction to the US taxes.

In a significant development, the EU, the US and Japan in June asked the WTO to help resolve a dispute over Beijing's export controls on rare earths, which are used in the making of high-tech products.