China increased the stakes in its efforts to roll back the threat of European Union tariffs on its solar equipment exports Wednesday by announcing an investigation into what it called unfair EU wine-trade subsidies.
China increased the stakes in its efforts to roll back the threat of
European Union tariffs on its solar equipment exports Wednesday by announcing
an investigation into what it called unfair EU wine-trade subsidies.
In a two-pronged response to what is becoming one of the biggest China-EU trade
disputes, Beijing's commerce ministry said it hoped to find solutions to the
solar dispute acceptable to both sides as soon as possible and reiterated its
strong opposition to the tariffs.
The moves came hours after EU officials said they would delay for two months the
full impact of import tariffs they plan to apply on Chinese solar-power
equipment to allow Chinese manufacturers to negotiate a settlement.
"Trade relations are an important foundation for the China-Europe
relationship," commerce ministry spokesman Shen Danyang said. "
China
is
unwilling to see the trade friction in the solar sector have an impact on the
overall China-Europe relationship."
His remarks were diluted by the simultaneous announcement that the ministry has
opened antidumping and antisubsidy investigations into wine from the EU.
"Wine imports from the EU enter our market via dumping, subsidies and
other unfair trade practices, and have hit our wine production," the
ministry said.
The China Chamber of Commerce for Import and Export of Machinery and Electronic
Products, which represents
China
's
solar companies, said in a statement Wednesday that the EU had made
"serious flaws during investigations" into Chinese practices. It
warned that tariffs on
China
solar
products would damage EU industries.
"Imposing tariffs will artificially push solar product prices higher and
damage interests of EU and global consumers," the group said.
The EU's decision Tuesday came after a campaign of intense lobbying by the
Chinese government that appeared to help swing the tide of opinion among some
of the 27 EU national governments against the tariffs.
China
is
the EU's second-largest trading partner, though that relationship has been
marred by a series of spats, including in the telecommunication sector.
The solar tariffs will come into force Thursday at 11.8%, a quarter of the
average level seen in a European Commission plan circulated last month. The
tariffs were supposed to average around 47%. They will cover solar panels and
their main components-solar cells and silicon wafers-which the commission says
Chinese companies are dumping at below fair-market prices.
EU trade chief Karel De Gucht said Tuesday that he is giving Chinese
solar-panel manufacturers until Aug. 6 to propose an acceptable alternative to
the tariff plan. All manufacturers will face the same 11.8% tariff for the
two-month period. If an agreement isn't reached by then, the tariffs will come
into force at the originally planned level.
Solar panels and related equipment make up a large chunk of
China
's
exports, accounting at their peak in 2011 for 7% of all Chinese sales to the
EU.
Chinese solar-panel producers are already facing tough economic conditions, as
a cyclical downturn has hammered demand and pushed
China
's
Suntech Power Holdings Co. (STP) into bankruptcy proceedings.
Suntech, the largest supplier of solar panels in 2011, has blamed part of its
financial losses, facility closures and layoffs on antidumping and antisubsidy
tariffs that went into effect last year in the
U.S.
,
which levied tariffs on Chinese-made solar cells, the devices in panels that
convert sunlight into electricity.
Meanwhile,
China
's
wine market has exploded in recent years, with Europe-France in particular-its
main trading partner.
China
imported 430 million liters of wine last year valued at $2.6 billion, up 8.9%
from a year earlier; more than two-thirds of that came from the EU, according
to local wine consultancy Ease Scent Wine & Culture Co., citing government
customs data.
Wine imports from
France
alone
totaled 170 million liters last year, up 11% on year and accounting for 40% of
China
's
total wine imports.
Chinese investors have also sought out investments in
Europe
's
wine industry. Among other examples, Cofco Group,
China
's
largest state-owned food-trading firm, purchased Château de Viaud, a winery in
the
Bordeaux
region in 2011.
Per-capita wine consumption in
China
is
still a fraction of that in other countries. Chinese drinkers consumed only 1.4
liters of wine per person in 2011, far below the French average of 53.2 liters
per person, according to research company International Wine & Spirit
Research. It predicts
China
's
per-capita consumption will increase to 2.1 liters per person over the next
three years.
Shares of Chinese winemakers soared in response to Wednesday's developments. Yantai
Changyu Pioneer Wine Co. (000869.SZ),
China
's
largest listed grape winemaker in terms of market capitalization, was 10%
higher at 44.44 yuan ($7.25) Wednesday afternoon.
Gansu Mogao Industrial Development Co. (600543.SH) 9.33% shares rose 9.3%,
while Tonghua Grape Wine Co. (600365.SH) was 7.5% higher and Citic Guoan Wine
Co. (60084.SH) rose 7.8%.
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