China Accused of Free-Riding in Global Trade
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The European Commission on Monday said China cannot be a free-rider in global trade and had to take responsibility for its conduct in global trade systems.
Speaking to the BBC, the European Union’s top trade official Karel De Gucht said China is expected to follow international trade rules with respect to dumping, subsidies and cheap capital.
The European Commission on Monday said China cannot be a free-rider in global trade and had to take responsibility for its conduct in global trade systems.
Speaking to the BBC, the European Union’s top trade official Karel De Gucht said China is expected to follow international trade rules with respect to dumping, subsidies and cheap capital.
“China has become a very big economy and they have to take responsibility, just as we do for the global trading system … You cannot be one of the biggest economies in the world and a free-rider at the same time,” he said.
De Gucht’s comments come as the European Union is holding 18 trade investigations into China.
The largest inquiry to date is whether Chinese solar panel manufacturers benefitted from illegal subsidies from Beijing and then sold their products below cost in the EU, a practice known as dumping.
Investigations into the alleged dumping began in September, after the Commission took up a complaint that accused China of providing its local solar panel manufacturers with easy credit to push output to more than 20 times the level of Chinese consumption.
Earlier this month, sources close to the investigation said the EU is considering punitive duties of up to 68 percent on solar panel imports from China.
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China is the world’s second largest economy and the EU is its biggest trading partner, with total two-way trade reaching $546 billion last year according to data from the Chinese customs, making it a key global business relationship.
In the latest development, De Gucht said last Wednesday the Commission would open an anti-dumping and anti-subsidy investigation into mobile telecommunications network equipment and components from China if bilateral negotiations fail.
Although not mentioned in official EU documents, trade officials told Reuters the primary targets of the investigation are the world’s second largest telecoms maker Huawei, as well as a smaller Chinese firm ZTE.
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Beijing has repeatedly said it will retaliate if the EU decides to impose anti-dumping taxes.
“We hope the EU will not take actions that will do no good to either side,” said Shen Danyang, spokesman for the Chinese commerce ministry.
Beijing will take “assertive” measures to “defend our lawful interests and rights” according to World Trade Organisation guidelines and Chinese laws, Shen added, if EU opens the telecoms case.
“Any consequences caused must be borne by the party who provoked the friction,” Shen warned.
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