Dialogue only solution to trade disputes

Experts say both sides need to make concessions

China has maintained its position of resolving trade disputes with the European Union through dialogue and communication, senior officials said on Sunday.

"China and the EU have close cooperation in the solar sector and telecom equipment, and the escalation of trade frictions will hurt enterprises in both sides," Commerce Minister Gao Hucheng said in an interview in Bern, Switzerland, according to a statement on the ministry's website on Sunday.

"Competition and friction in some products and sectors are no strangers for big economies like China and the EU. And China has maintained an attitude of active consultation until now and is not willing to see an expansion and worsening of trade frictions," Gao added.

China-EU economic ties have recently been clouded by trade investigations. The European Commission, the executive body of the EU, is reported to be planning punitive duties ranging from 37.3 to 67.9 percent on China-made solar panels. The commission's decision on whether to impose duties will be published by June 6.

China has repeatedly opposed the EU's anti-dumping and anti-subsidy investigations into Chinese solar panels, which affect the country's exports worth more than $20 billion and endanger more than 400,000 jobs at home.

Instead of stepping away from trade protectionism, the commission in Brussels opened a new front in trade remedy measures and agreed "in principle" on May 15 to start an anti-dumping and anti-subsidy investigation against the Chinese producers of mobile telecom equipment, who sell about 1 billion euros ($1.29 billion) of the product to the EU each year and occupy about a quarter of the EU market.

Premier Li Keqiang started his visit to Berlin on Sunday, which is part of his first foreign visit after taking office. Li said in an article, published in Germany's Die Zeit newspaper on May 23, that the global economy still faces uncertainties and growing protectionism, and there are latent risks in the international monetary and financial system. China and Germany, as two major, responsible countries, should unequivocally support free trade, oppose protectionism and step up international cooperation, he said.

Li said in a speech in Zurich, Switzerland, on Friday that China "resolutely" opposes the EU's anti-dumping and anti-subsidy investigations and punitive duties against Chinese companies making PV products and mobile telecom equipment because the measures will damage related industries, enterprises and employment in China and at the same time harm the interests of European users and consumers.

"On the whole, China and the EU are economic partners rather than rivals. Trade frictions are normal in view of their close economic ties," said Feng Zhongping, vice-president of the China Institutes of Contemporary International Relations. "But the solar case has aroused great concern in China, and both sides should make some necessary concessions to avoid a trade war."

The EU is China's largest trading partner, and China is the second-largest trading partner of the EU. Bilateral trade in the first four months of this year declined 1.3 percent from a year earlier to $168.16 billion.

"Trade protectionism measures from the debt-hit bloc will keep growing in the future, and the Chinese government should deepen its communications and consultations with the European Commission while thriving to resolve trade disputes under legal frameworks and keep them from being politicized," said Xiong Wei, an associate professor at the China Foreign Affairs University.

Vice-Minister of Commerce Zhong Shan will discuss issues related to solar panels and wireless telecom equipment with EU Trade Commissioner Karel De Gucht during the talks on China-EU trade and investment on Monday, co-chaired by Zhong and Jean-Luc Demarty, the European Commission's director-general for trade, the Ministry of Commerce said on its website on Sunday.