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Published: Friday March 21, 2014 MYT 6:03:38 PM
Updated: Friday March 21, 2014 MYT 6:04:29 PM

China says deal reached to end probe into European wine

BEIJING (Reuters) - China's commerce minister said the Chinese and European wine industries had reached a deal to end an anti-dumping and anti-subsidy probe into European wine imports, ahead of a trip to Europe by China's president next week.

Beijing opened the inquiry last year into whether Europe was selling wine in China at unfairly low prices, a move widely seen in Europe as retaliation over EU efforts to hit Chinese solar panels with punitive import duties.

The solar panels dispute was resolved, but China had pressed ahead with the wine probe, saying it was a separate issue.

However, EU officials had said that they had received reassurances the wine inquiry would also be dropped.

Chinese Commerce Minister Gao Hucheng said on Friday that he was happy to see the dispute had been resolved via cooperation.

"Since the resolution last year of the China-EU solar panel dispute via dialogue and consultation, China and Europe had been on the correct track to dealing with trade friction," Gao said.

He gave no details on the deal, but said it also involved technical and marketing cooperation as well as worker training.

France, the world's biggest wine producer by value, has in the past called China's decision to consider duties on French wine to be "inappropriate and reprehensible".

Paris was therefore especially eager to see the probe called off, as it remained a thorn in trade relations between the two countries ahead of this month's visit by Chinese President Xi Jinping to the French capital as part of a European tour.

EU wine exports to China excluding Hong Kong, which EU officials say was not covered by the investigation, reached 257 million litres in 2012 for a value of nearly $1 billion. More than half came from France.

China and Europe also resolved another dispute this week, when Germany's Wacker Chemie said Chinese authorities had agreed to refrain from charging the company anti-dumping tariffs on polysilicon.

The EU is China's most important trading partner and China is second only to the United States for Europe in terms of trade. But growing Chinese export volumes have raised concerns in the EU, which is struggling to overcome a debt crisis, about the impact on its industries.

The European Commission has also threatened to open an investigation into possibly unfair pricing by China's Huawei, the world's number two telecoms equipment manufacturer, and ZTE, the world's fifth largest.

Both companies are active in Europe, and have denied breaking any rules.

Minister Gao said this dispute was also "on track" to be resolved via dialogue, though he did not elaborate.

(Reporting by Ben Blanchard; Editing by Himani Sarkar)

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