EU is 'not interested' in trade war with China
By Robin Emmott and Sebastian Moffett, Reuters
October 22, 2012, 12:58 pm TWN
BRUSSELS -- The European Union will not back down from protecting its industries against Chinese competition it sees as unfair, but mutual self-interest will prevent a damaging trade war, the EU's trade chief Karel De Gucht said.
Disputes with Beijing have taken on a bigger scale in recent months and Brussels brought its biggest ever trade case against Beijing in September after European companies accused China of dumping solar panels in Europe.
The EU is also gathering evidence to see whether Chinese telecoms companies Huawei Technologies and ZTE are dumping or receiving illegal subsidies.
"We are not going to shy away from what we have to do," De Gucht told Reuters in an interview.
"But we are not interested in escalating tensions. I believe that the Chinese also realize that this has to be kept within limits," he said from his office in the European Commission.
The growing trade spats come at a dangerous time. Europe's economy is hardly growing and the continent is suffering from record unemployment, while China's much-faster growth is cooling. Both downturns raise the specter of social instability.
De Gucht, who first got to know China during his term as Belgium's foreign minister between 2004 and 2007, sees the tensions persisting precisely because China is seeking to produce sophisticated products that will compete with Europe.
"China is facing a tremendous challenge: how to get a larger share of the value-added pie, as it otherwise can't possibly take the next step in economic development, which Japan, Taiwan, South Korea, Singapore and Hong Kong have already taken," De Gucht wrote in a book published this month called "Freedom: Liberalism In A Time of Cholera."
There he cites a Chinese curse: "May you live in interesting times."
Trade between China and the European Union has doubled since 2003, rising to 428 billion euros (US$558 billion) in 2011, making the EU China's biggest trading partner. China is the second biggest destination for European goods after the United States.
But ongoing disputes range from metal tubes to China's restrictions of exports of rare earth metals.