Sunday

13th Jun 2021

Merkel backs China in EU trade row

  • The new Chinese PM has chosen Germany as the only EU destination on his first foreign trip (Photo: Bundesregierung/Bergmann)

German Chancellor Angela Merkel has pledged to do her utmost to avoid an EU-China trade war over subsidies for solar panels and wireless equipment as she welcomed the new Chinese Prime Minister, Li Keqiang, in Berlin on Sunday (26 May).

"Germany will do what it can so that there are no permanent import duties and we'll try to clear things up as quickly as possible," she said in a press conference after meeting Li.

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The European Commission is considering to impose import duties on Chinese solar panel and wireless device companies for exporting products to the European market that are artificially kept cheap thanks to subsidies from the Chinese government.

Merkel said that the commission has the authority to launch such procedures.

But she noted that the idea of imposing permanent tariffs is not something Germany "believes in." She also said she wishes to see the conflict solved within six months.

Li, who has been in office only since March, said he "emphatically rejects" the =commission's planned sanctions.

"It not only endangers jobs in Germany. It will also endanger the development of the sector in Europe. That will harm the interests of the European consumers and Europe's industry," he said.

Li made a point by not including Brussels on his first trip abroad, with Berlin being the only EU capital he visited after a stop in Switzerland, which became the second European country to sign a free trade agreement with China after Iceland.

Earlier this month, EU trade commissioner Karel De Gucht said the commission had agreed in principle to open a case against China, but would first seek talks with Beijing.

China's vice-minister for commerce Zhong Shan was due to meet De Gucht later on Monday for talks on the matter, the Chinese government said in a press statement on Sunday.

Trade disputes between China and Europe have multiplied over the past years, with 18 out of EU's 31 current trade investigations involving the Asian giant.

As for the German economy, the Chinese visit yielded a series of deals between car manufacturers like Volkswagen and chemical giant Basf.

In a bid to appease criticism from civil rights groups, Merkel also announced the continuation of a human rights dialogue between Berlin and Beijing.

Just days before the official visit, Chinese dissident Ai Weiwei put out a Youtube video decrying China's human rights record.

"In the past 60 years there have been innumerable amounts of people who have been killed or sent away from their homes, even tortured to death," said Ai who was convicted by Chinese authorities in 2011 for alleged tax evasion.

The music video is a parody of his time spent in jail.

China retaliates in EU trade dispute

China has hit back at Europe targeting wine imports in a tit-for-tat move over the EU commission's decision to impose anti-dumping tariffs on Chinese solar panels.

EU settles trade dispute with China, warns member states

The EU has defended a deal with China over solar panel imports amid criticism it has caved into Bejing's demands. Meanwhile its top trade official has said member states should stop undermining Brussels on trade issues.

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