Beijing on Tuesday warned the European Union that EU firms would suffer if it decides to take action against companies in China’s solar and telecommunications sectors due to trade rows.
EU firms have long accused Beijing of giving Chinese solar cell makers and telecoms firms an unfair competitive advantage through state subsidies, and have called for Brussels to restrict imports of their products.
The European Union is reportedly preparing to launch an anti-dumping investigation into leading Chinese telecoms firms Huawei and ZTE.
Commerce ministry spokesman Shen Danyang rejected allegations that the two companies received subsidies as “groundless”, adding they have been growing through “complete market competition”.
He pointed out that many European telecoms companies have operated in China for many years, benefiting both Beijing and Brussels.
“China does not want such a win-win situation being undermined or damaged,” he said.
“Facing the grave world economic situation, we think China and the EU should enhance policy coordination… and refrain from using trade protection measures.”
The US Commerce Department last month imposed levies of between 31 and 250 percent on Chinese producers and exporters, saying it had found they sold solar cells in the United States at artificially low prices, a practice known as dumping.
The European Union may also follow suit and impose sanctions against China soon, according to previous media reports.
However, Shen warned that any sanctions on the Chinese solar cell industry would be detrimental to EU firms because China is a big buyer of European raw materials used to make photovoltaic products.
“If the EU restricts Chinese photovoltaic products, it will harm the development of the upstream and downstream companies of the EU’s own photovoltaic industry,” he said.
He said China has so far imported a total of 40 billion yuan ($6.3 billion) worth of equipment to produce solar batteries — and 45 percent of this was purchased from European nations including Germany and Switzerland.
“We hope the EU will be prudent (in taking any action),” he said.
China warns EU against potential trade sanctions
