China says EU solar duties to "seriously harm" trade ties

BEIJING (REUTERS) - China warned the European Union on Thursday that imposing duties on Chinese solar panels would "seriously harm" bilateral trade ties, upping the tone of its criticism a week after the EU said it would move ahead with hefty penalties in June.

The European Commission has agreed to impose average import duties of 47 per cent on solar panels from China, according to officials, a move they say is to guard against the dumping of cheap goods in Europe.

China's Ministry of Commerce spokesman Shen Danyang said he hoped reports about the duties were unreliable.

"If this information is true, this action by the European Union would seriously harm China-Europe trade relations," Shen told a news conference.

Mr Shen said "provoking trade friction with China" was like"dropping a boulder on one's own foot" and would not help Europe break free from economic crisis.

Trade friction between China and the EU is already high. The EU has 31 trade investigations, 18 of them involving China. The solar case is the largest to date, impacting 21 billion euros (S$33.7 billion) of imported Chinese solar panels, cells and wafers.

The Commission said this week it was prepared to launch another investigation into anti-competitive behaviour by Chinese producers of mobile telecoms equipment.

China is expected to decide in June whether to levy its own duties on imported European, US and South Korean solar-grade polysilicon, a raw material used in solar panel production.

The English-language China Daily newspaper cited an official with the surname Zhang as saying the Ministry of Commerce was likely waiting for an official EU decision before issuing its polysilicon ruling.

The EU solar duties would come into effect once the Commission publishes the decision in its Official Journal.

Beijing has said it will defend against what is calls protectionist behaviour.

On his first overseas trip since taking the office in March, Chinese Premier Li Keqiang at the end of May will stop in Germany, the world's biggest solar market last year.

German officials have called the European Commission's stance on the solar duties "hard" and say they are urging it to reach an amicable solution with China.

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