EU denies starting trade spat with China

Reuters Beijing

The EU would not be drawn into a trade war with China, the EU’s ambassador to the country said yesterday, a day after trade sources said the European Commission had found that Beijing illegally subsidised Chinese steel producers.

The commission is investigating 37 dumping and subsidy cases, 21 of them involving China, and Tuesday’s preliminary finding asked EU members to back punitive tariffs against Chinese steel firms, a move that angered Beijing.

However, EU ambassador to China Markus Ederer said he “flatly rejects” reports of a trade war between the two economies, which together comprise the world’s largest trade relationship.

“I don’t want this to become a self-fulfilling prophecy… it takes two for a war, and… the EU is not available for a trade war with China,” Ederer said.

China’s Commerce Ministry spokesman, Shen Danyang, called the commission’s inquiry into steel subsidies unreasonable. “Such a conclusion based on unreasonable investigations will seriously hurt Chinese companies’ legal rights and interests,” Shen said yesterday.

European anti-dumping and anti-subsidy duties affected less than 1 percent of Chinese exports to Europe, Ederer said.

“China, as well, has investigations, as you know, into European exports to China. We have no issue with that as long as it is under World Trade Organisation rules,” he said, adding that observers should not “overdramatise” the issue.

The commission’s investigations include a study of the alleged dumping of e21 billion (R245bn) of solar panels and parts by Chinese producers. A preliminary ruling on that case, the commission’s largest probe, is due in the first half of 2013.

The EU is China’s biggest trading partner while for the EU, China is second only to the US.