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Juncker meets with China's vice premier amid trade dispute

LUXEMBOURG--Eurogroup chief and Luxembourg Prime Minister Jean-Claude Juncker met here Saturday with China's vice premier amid a trade dispute between the European Union and the Asian economic powerhouse.

The talks with Vice Premier Hui Liangyu "will focus primarily on bilateral relations as well as relations between the European Union and China," the Luxembourg government said in a short statement Friday, without issuing a follow-up after the meeting.

The trade dispute with China ratcheted up Thursday when the EU announced it had decided to probe claims that Chinese firms were selling solar panel products below cost, a dumping practice banned by the EU and the World Trade Organization.

The EU said it made its decision after EU ProSun, a group of more than 20 European solar panel makers, provided evidence the Chinese products had "substantial averse effects on the financial situation of the Union industry."

The group suspects China of providing its solar product makers with large loans and other subsidies to allow them to sell them below cost.

China immediately hit back saying it deeply regretted the EU's decision and warned of problems that potential penalties might cause.

"The European Commission went ahead to initiate the anti-dumping investigation despite repeated calls by China to solve the trade dispute on photovoltaic products via consultations and cooperation," the Chinese commerce ministry said in the statement.

China is the world's biggest solar panel maker and the bulk of its overall US$35.8 billion worth of solar product exports went to the EU last year, according to Chinese industry figures.

The country imported US$7.5 billion worth of European solar equipment and raw materials in 2011, the figures show.

The solar import dispute has been rumbling along for some time.

In May, Washington imposed hefty anti-dumping duties on Chinese solar cell makers, a move Beijing blasted as "protectionist," and the latest dispute is but one of many to surface in recent years as China has increased its market share.

German Chancellor Angela Merkel raised the issue on a visit to Beijing late last month during which she sought to quell China's concerns over the eurozone crisis and urge it to continue to invest in the region.

She said that "protectionism cannot be the answer for certain difficulties, we have to try to solve existing problems by the way of talks, problems we have in the field of solar energy for instance."

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