China, EU to discuss trade disputes on Monday

Sunday, May 26th, 2013 | Finance News

BEIJING (Reuters) - China said it would hold talks with the European Commission on Monday to discuss a trade row over solar panels and wireless equipment, laying the ground for formal negotiations amid concerns of an escalating dispute.

China's Vice Commerce minister Zhong Shan will meet EU Trade Commissioner Karel De Gucht in Brussels to discuss EU investigations into Chinese solar panels and wireless equipment, the Ministry of Commerce said on Sunday.

The EU accuses China of unfairly pricing its solar panels and mobile telecom devices too cheaply and "dumping" them in Europe, and plans to impose duties on Chinese panel makers.

China denies the allegations. China Premier Li Keqiang, who is touring Europe this week, censured the EU's plans for Chinese solar makers late on Friday, saying "they harm others without benefiting oneself".

Trade disputes between China and the EU have risen in recent years as commercial ties between the two deepened. Eighteen of 31 trade investigations conducted by the EU involves China.

The fall-out over solar panels, which climaxed this month after the European Commission agreed to impose import duties averaging 47 percent on Chinese panel makers, is the largest to date.

It could hurt 21 billion euros ($26.9 billion) worth of Chinese solar panels sold in Europe - sales that account for 60 percent of China's total solar panel exports and 7 percent of the country's total exports to the EU.

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

This is not the first time Chinese solar panel makers are running afoul of foreign regulations. The United States imposed five-year duties as high as 36 percent on China solar products in November.

Trade rows over Chinese solar panel prices come as China's manufacturers battle a glut in capacity and falling demand.

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

(Reporting by Aileen Wang and Koh Gui Qing; Editing by Jeremy Laurence)

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