China challenges EU wine prices after solar panel row

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A yesterday launched a formal investigation into whether the European Union is subsidising and dumping wine in the Chinese market, sparking claims of a tit-for-tat row over solar panel pricing.

Hours after the European Commission, the EU’s executive body, levied punitive tariffs on Chinese solar panels last month, the Chinese government challenged the cheap local sales of European wines.

The EU accuses Chinese manufacturers of dumping billions of euros worth of panels at below-production cost. It levied an 11.8 per cent tariff on solar panels and warned that figure could rise to 47 per cent unless a solution is reached by next month.

China’s Commerce Ministry then announced it was starting its investigation based on a complaint by domestic wine producers.

“China’s investigation department will strictly abide by China’s relevant laws and regulations and meet the demands of relevant World Trade Organization rules,” said a statement on the ministry’s website.

European officials have claimed the wine dispute is simply retaliation for the solar panel levy. EU Trade Commissioner Karel De Gucht, in China last month for talks, said he hoped any agreement on solar panels would help resolve the wine dispute. The EU denies the allegations.

China has become an increasingly important market, as its growing middle-class have developed a thirst for European – and especially French – wines. China is the biggest importer of Bordeaux wines, with consumption soaring 110 per cent in 2011 alone.

Trade disputes between China and Europe have multiplied as commercial ties have grown.

Stone used for counter tops and mobile telecoms equipment have both been at the centre of recent allegations of anti-competitive behaviour by the Chinese.