The accusation was made by the European association of fine paper manufacturers, Cepifine, at the start of the year.
A formal investigation was then launched on 18 February to determine whether the product is being dumped in Europe and whether this has caused "material injury" to the European industry.
Frank Leerkotte, Cepifine managing director, said Chinese producers have been "very aggressive" and undercut prices by a "fantastically high amount".
He said: "Based on the information and evidence we have provided, the Commission has taken the difficult decision to launch an investigation.
"We are not looking for protection, but demand a level playing field. It is very obvious they are selling below cost price."
However, Asia Pulp and Paper (APP), the parent company of Chinese manufacturer Gold East China, strongly denied the accusations.
APP European spokesman Stuart Andrews said: "Dumping duties artificially increases costs for print businesses through distorting the market price and driving up costs unnecessarily. At a time when costs in the European printing industry need to be reduced, the anti-dumping investigation could do just the opposite."
APP said it had never engaged in practices capable of causing the alleged injury to the EU industry.
EU investigates alleged Chinese paper dumping
The European Commission has launched an investigation after Chinese paper manufacturers were accused of selling coated fine paper into the European market at prices "below normal levels".
