China Says EU Trade Probes Should Consider Impact on Relations

The European Union should consider the impact that trade investigations have on its relations with China, the Chinese ambassador to the EU said.

The EU last week opened a probe into allegations that European producers of solar panels, including Solarworld AG (SWV), are harmed by Chinese rivals selling below cost. The inquiry covers 21 billion euros ($27 billion) of imports of crystalline silicon photovoltaic modules or panels and cells and wafers used in them. EU regulators have nine months to decide whether to impose anti-dumping duties on solar-panel products from China.

The European Commission, the EU regulator in Brussels, “should give sufficient attention to the impact this would bring to our relations” when it starts a trade investigation, China’s envoy to the EU, Wu Hailong, told reporters in Brussels today. Such probes are “not constructive” and can be a “double-edged sword” for European businesses that supply Chinese manufacturers, he said.

German Chancellor Angela Merkel said last month that she was seeking talks between the commission and Chinese authorities to prevent the EU investigation. She told reporters in Beijing that “it would be better to solve” the dispute with negotiations.

Hailong said Merkel’s comments showed “a very wise position,” adding that China also favored talks to resolve trade disputes.

Anti-Dumping Duties

The EU probe will determine whether Chinese producers violate World Trade Organization rules by selling solar panels below cost. The commission could impose provisional anti-dumping duties for half a year and EU governments have 15 months to decide whether to apply “definitive” levies for five years.

The case highlights EU concerns about the expansion of Chinese solar companies, which have grabbed market share from European rivals that were once dominant, and follows a U.S. decision earlier this year to hit the Chinese industry with anti-dumping duties as high as 250 percent.

Chinese companies have gained more than 80 percent of the market in Europe for solar goods compared with almost zero in 2004, according to EU ProSun, a group that represents European producers including Solarworld and that requested the dumping investigation in late July.

China produces about 65 percent of solar panels worldwide, the commission said in a separate statement. The EU is China’s main export market, accounting for around 80 percent of Chinese sales abroad, according to the commission.

-- -With assistance from Jonathan Stearns in Strasbourg, France. Editor: Jones Hayden, Patrick Henry

To contact the reporter on this story: Aoife White in Brussels at awhite62@bloomberg.net.

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net.

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