China to deal 'appropriately' with EU steel challenge

BEIJING (AFP) - China said it will deal "appropriately" with the European Union's decision to challenge it at the World Trade Organisation after Beijing slapped duties on some steel products, in the latest salvo in the row between the two sides.

Beijing in November imposed levies of between 9.7 per cent and 11.1 per cent on "high performance" stainless steel seamless tubes from the EU, claiming they were being sold below cost, a practice known as "dumping".

On Thursday the EU asked for a consultation with China at the World Trade Organisation, charging that the duties were "incompatible with WTO law, both on procedural and on substantive grounds".

Later in the day China's Ministry of Commerce said in a brief statement that it had received the request from the EU and added: "We will handle this appropriately in accordance with rules of the WTO's dispute settlement mechanism."

Consultation is the first formal step in the WTO's complaints procedure, which the EU said would give the two sides "the opportunity to find a negotiated solution".

Beijing and the EU are involved in a series of such disputes, which have sparked fears of a trade war between the economic giants.

Last month, China's commerce ministry started a year-long investigation into alleged dumping of other steel pipes by the EU and two other countries.

China has launched an anti-dumping probe into imports of EU wine and chemicals after the EU slapped tariffs on Chinese solar panels and threatened an investigation into the country's key telecom equipment firms.

Beijing warned that the wine probe - announced just after the solar panel decision - "signals that the country will safeguard its major economic interests - and it has ample cards in hand to do so".

China is the EU's second-biggest trading partner, importing US$212 billion (S$265 billion) worth of goods last year and exporting US$334 billion.

Given the huge stakes, the prospect of a stand-off with Beijing has caused deep divisions in the EU, with Germany pushing for a negotiated solution while France wants tough sanctions.

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