China warns EU against imposing tariffs

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China has told the European Union to expect a fightback if it imposes trade duties on Chinese solar products.

In a transcript published by the Ministry of Commerce of the People’s Republic of China (MOFCOM), Chong Quan the deputy representative of MOFCOM said the Chinese government has advised the EU to show restraint in order to avoid a trade war.

“We have no choice, and will take all measures to safeguard the legitimate rights and interests of enterprises. I hope we can find a solution acceptable to both sides in the negotiation process,” said Quan.

China has already taken retaliatory measures against the EU. Last November MOFCOM filed a complaint with the World Trade Organization (WTO) claiming European Union member states “illegally” subsidised their PV manufacturers.

Quan said preliminary EU investigations have already resulted in a negative effect on its domestic industry with a year-on-year drop in exports to Europe from China of 35%. The Chinese PV export market was worth US$200 billion last year and the EU was its main trading partner responsible for more than 70% of that market.

Furthermore, to illustrate the symbiotic relationship of China and the EU, Quan said China's total PV production equipment imported from overseas, worth nearly CNY40 billion (US$6.4 billion), came predominantly from the European Union.

MOFCOM estimates that the EU anti-dumping case will affect more than 40 million Chinese workers.

“Just a few days ago, China's largest PV company Suntech Power declared bankruptcy. For this reason, the Chinese government attaches great importance to the case,” said Quan. “We do not want to see a trade war with any country, especially between China and the EU.”

In Europe, an independent report released last month predicted job losses of 242,000 and a financial loss of €27.8 billion (US$35.8 billion) during the first year if tariffs were to be imposed by the EU.

Quan also dismissed reports that China have stalled talks with the EU, but instead, insisted that China has left diplomatic channels with the EU open and made every effort to cooperate with the investigation.

Quan asked for the “fair and equitable” treatment of Chinese PV companies to reach a “mutually beneficial” solution to this case, warning that “improper handling” of this case will have a “negative impact” on the EU and China’s economic and trade relations.

The complaint against Chinese solar manufacturers was filed with the European Commission on 25 July last year by a trade group EU ProSun, which claims to represent the majority of the European solar industry.

On 5 March, the European Commission ordered its member states to register imports of Chinese solar panels and their main components, an administrative step underscoring punitive duties to be applied retroactively if China is found to be guilty of dumping modules on the European market in the investigations.

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