China hits back at EU over solar panel duties

China launched an anti-dumping and anti-subsidy probe in European wine on Wednesday in response to the European Union's decision to impose duties on imports of Chinese solar panels, as tensions increased between two of the world's biggest trading blocs.

The EU will impose duties on imports of Chinese solar panels from Thursday, but announced a dramatically reduced initial rate after pressure from some large member states in the hope of reaching a negotiated settlement with Beijing.

China's Commerce Ministry said the EU's duties were imposed despite China making great efforts and showing enormous sincerity in trying to resolve the matter through talks.

"The European side still obstinately imposed unfair duties on Chinese imports of solar panels," the ministry said in a statement on its website (www.mofcom.gov.cn).

The ministry said the Chinese government had begun an anti-dumping and anti-subsidy probe into EU wines at the request of Chinese wine manufacturers.

"The Commerce Ministry has already received an application from the domestic wine industry, which accuses wines imported from Europe of entering China's market by use of unfair trade tactics such as dumping and subsidies," it said in a separate statement.

"This is impacted upon our wine industry, and (they have) asked the Commerce Ministry to begin anti-dumping and anti-subsidy probe," the ministry added.

"We have noted the quick rise in wine imports from the EU in recent years, and we will handle the investigation in accordance with the law."

China imported 430 million liters of wine last year, of which more than two-thirds came from the EU, according to Chinese customs figures.

Imports from France alone came to 170 million liters.

The European Union is one of?China's most important trading partners, while for the EU, China is second only to the United States. Chinese exports of goods to the 27-member bloc totaled 290 billion euros ($376 billion) last year, with 144 billion euros going the other way.

The EU now has 31 ongoing trade investigations, 18 of them involving China. The largest to date is that into 21 billion euros of imports from China of solar panels, cells and wafers.

The EU says it has evidence that Chinese firms are selling solar panels below cost - a practice known as dumping. But the initial duty of 11.8 percent announced on Tuesday by European Trade Commissioner Karel De Gucht was far below the average 47 percent that had been planned.

China's Commerce Ministry said it noted the lower initial rate, but called on the EU to "show more sincerity and flexibility to find a resolution both sides can accept through consultations".

China does not want to see this spat affect the overall state of trade ties with Europe, it said.