China to discuss trade disputes with European Commission

European Union accuses China of pricing solar panels and mobile telecom devices too cheaply

German chancellor Angela Merkel welcomes Chinese prime minister Li Keqiang upon his arrival at the Chancellery in Berlin yesterday. Photograph: Sean Gallup/Getty Images

German chancellor Angela Merkel welcomes Chinese prime minister Li Keqiang upon his arrival at the Chancellery in Berlin yesterday. Photograph: Sean Gallup/Getty Images

 

China will hold informal talks with the European Commission tomorrow to try to defuse a trade row over solar panels and wireless equipment.

The European Union accuses China of pricing its solar panels and mobile telecom devices too cheaply and “dumping” them in Europe to corner the market. It plans to impose duties on Chinese panel makers .

China denies the allegations and premier Li Keqiang, who is touring Europe this week, said the EU plans would “harm others without benefiting oneself”.

China’s vice-commerce minister Zhong Shan will meet EU trade commissioner Karel De Gucht in Brussels tomorrow, China’s ministry of commerce said. An EU spokesman confirmed the talks, but stressed they were informal.

Trade disputes between China and Europe have multiplied as commercial ties have deepened. Eighteen of 31 trade investigations conducted by the European Union involves China.

The fallout over solar panels, which came to a head this month when the European Commission announced plans to impose import duties averaging 47 per cent on Chinese panel makers, is the largest to date.

The duties are expected to become EU law in early June. Formal discussions between China and the European Union towards reaching a negotiated settlement can only begin after that, the commission spokesman said.

Duties would affect €21 billion worth of Chinese solar panels sold in Europe – sales that account for 60 per cent of China’s total solar panel exports and 7 per cent of the country’s total exports to the European Union .

Both sides have negotiated in the past but with no success. Beijing has condemned the proposed EU duties and urged dialogue while tacitly threatening retaliation.

This is not the first time Chinese solar panel makers have clashed with foreign regulations. The United States imposed five-year duties as high as 36 per cent on China solar products in November.

China’s manufacturers are also battling a glut in capacity and falling demand.

Beijing is set to decide in June whether it wishes to levy its own duties on European, US and South Korean imports of solar-grade poly silicon, a raw material used in making solar panels.