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China launches European wine probe

China has announced a trade investigation of European wine after the European Union hit Chinese exporters of solar panels with anti-dumping duties.

The Ministry of Commerce's announcement of the wine probe came in the same statement that expressed "resolute opposition" to punitive European tariffs on Chinese solar products. The European duties are a blow to financially strapped manufacturers that are struggling with excess production capacity and a price-cutting war.

A foreign ministry spokesman, Hong Lei, did not respond when asked later at a regular briefing whether the wine investigation was retaliation for the solar duties. Concern about possible retaliation rose after Chinese Premier Li Keqiang warned last month that European anti-dumping action over solar panels would harm both sides.

The ministry said it would conduct an anti-subsidy and anti-dumping investigation of European wine but gave no details of how Beijing believed exports were being subsidised. "We hope the European Union will further show sincerity and flexibility and a mutually acceptable solution can be found through consultations," said the Chinese statement.

Most of China's imports of European wine come from France, Spain, Italy and Germany, according to the Ministry of Commerce. That means that with the exception of Germany, any commercial impact would fall on countries whose governments supported the anti-dumping tariffs.

"We believe there is not dumping of European wines on the Chinese market," said a spokesman for the European Commission, Roger Waite.

Dumping means selling a product abroad at a lower price than at home but some governments also take action if the price is deemed to be below production cost or unfair in some other way.

In Paris, the French agriculture minister, Stephane Le Foll, denied his government subsidises exports. "France doesn't export at a loss or with subsidies. There is not one export subsidy," he said.

The head of a French wine exporters group expressed alarm that the industry was caught in the dispute. "The use of our sector as leverage in a trade dispute is particularly regrettable," said Louis Fabrice Latour, president of the Federation of Wine and Spirits Exporters of France. "We fervently hope that the European Union and China will be able to defuse these trade tensions by dialogue."

The EU has announced duties averaging 47% on Chinese-made solar panels, cells and wafers but said it would postpone imposing the full tariffs until August to allow time for negotiation.

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