China, EU strike deal on trade in polysil­i­con

Move comes ahead of Pres­i­dent Xi’s 4-na­tion trip to Europep this month

China Daily (Canada) - - BUSINESS - By YAOJING yaojing@chi­nadaily.com.cn

China and the Euro­pean Union an­nounced on Thurs­day they have set­tled a trade dis­pute over polysil­i­con prod­ucts just ahead of Pres­i­dent Xi Jin­ping’s four-na­tion trip to Europe.

TheMin­istry of Com­merce and Ger­man polysil­i­con pro­ducer Wacker Chemie AG said that an agree­ment has been reached to set­tle the long-stand­ing dis­pute through a price un­der­tak­ing.

The agree­ment means Euro­pean ex­ports of polysil­i­con will not be sold be­low a spe­cific min­i­mum price in China, while China agrees to re­frain from im­pos­ing an­tidump­ing and anti-sub­sidy du­ties on the im­ports.

China’s anti-dump­ing and anti-sub­sidy in­ves­ti­ga­tions into Euro­pean ex­ports of polysil­i­con to China since Novem­ber 2012 have now come to an end.

“We were ne­go­ti­at­ing with Wacker Chemie for about one month from Feb 12 to March 14. The process has been tough,” said a state­ment from the Bureau of Fair Trade for Im­ports and Ex­ports at the min­istry.

The agree­ment on polysil­i­con, an im­por­tant com­po­nent used in the pro­duc­tion of so­lar pan­els, will push for­ward down­stream and up­stream de­vel­op­ment re­lated to so­lar pan­els for both sides, it said.

“It is a so­lu­tion fore­seen by ap­pli­ca­bleWorld Trade Or­ga­ni­za­tion rules and is pledg­ing a fair com­pe­ti­tion en­vi­ron­ment,” said the state­ment.

“Af­ter both sides set­tled the trade fric­tion on pho­to­voltaic prod­ucts through ne­go­ti­a­tion, the so­lu­tion on polysil­i­con is fur­ther prov­ing thatwe­have the wis­dom and ca­pa­bil­ity to man­age the bi­lat­eral trade fric­tion.”

EU Trade Com­mis­sioner Karel De Gucht said in a state­ment: “With this agree­ment, our in­dus­try will be able to pur­sue its op­er­a­tions in China where there is a sub­stan­tial de­mand for high qual­ity polysil­i­con.”

The re­moval of the trade ir­ri­tant is also re­garded by ex­perts as strength­en­ing China-EU re­la­tions.

“The set­tle­ment will push for­ward the in­vest­ment treaty talks be­tween China and the EU, mean­while, giv­ing im­pe­tus to China’s free trade deal with Europe,” said Song Hong, an econ­o­mist at the In­sti­tute of World Eco­nomic­sandPol­i­tics at theChi­nese Academy of So­cial Sci­ences.

Last year, De Gucht an­nounced he would launch a for­mal in­ves­ti­ga­tion into

The set­tle­ment will push for­ward the in­vest­ment treaty talks be­tween China and the EU, mean­while, giv­ing im­pe­tus to China’s free trade deal with Europe.” SONG HONG ECON­O­MIST, IN­STI­TUTE OF WORLD ECO­NOM­ICS AND POL­I­TICS AT THE CHI­NESE ACADEMY OF SO­CIAL SCI­ENCES

the sales prac­tices of Chi­nese mo­bile telecom­mu­ni­ca­tions equip­ment mak­ers, in­clud­ing Huawei Tech­nolo­gies Co Ltd and ZTE Corp, to try to pro­tect the key tech­nol­ogy sec­tor of Europe’s econ­omy from un­fair com­pe­ti­tion.

Song said the set­tle­ment on polysil­i­con is a fol­low-up ne­go­ti­a­tion af­ter the so­lar panel case and the telecommunication quar­rel.

“It is set­ting a good ex­am­ple for re­solv­ing fu­ture fric­tion and also pre­par­ing for the up­com­ing Euro­pean visit of Chi­nese Pres­i­dent Xi Jin­ping,” said Song.

Xi will pay state vis­its to the Nether­lands, France, Ger­many and Bel­gium from Satur­day to April 1. He will visit the head­quar­ters of the Euro­pean Union.

Wacker Chemie ac­counts for prac­ti­cally all polysil­i­con ex­ports from the EU to China. They had a value of about 700 mil­lion eu­ros ($964 mil­lion) in 2011.

In Jan­uary, China re­leased its pre­lim­i­nary find­ings in this case, claim­ing that EU polysil­i­con prod­ucts were ex­ported at a lower price than sold in Europe, a prac­tice called dump­ing, and sub­si­dized.

The Euro­pean Com­mis­sion has con­sis­tently de­fended the view that the case made by the Chi­nese au­thor­i­ties was un­founded and that the anti-dump­ing and anti-sub­sidy mar­gins pro­vi­sion­ally de­ter­mined by Chi­nese in­ves­ti­ga­tors were in­flated.

The EC and Chi­nese so­lar panel pro­duc­ers reached a sim­i­lar agree­ment in Au­gust 2013 in the con­text of EU’s anti-dump­ing and anti-sub­sidy pro­ceed­ings on Chi­nese so­lar pan­els.

The polysil­i­con probe was widely seen as a re­sponse by the min­istry to the EU’s so­lar panel in­ves­ti­ga­tion, which could en­dan­ger Chi­nese ex­ports val­ued at about $20 bil­lion a year and more than 400,000 jobs in China.

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