Chinese ambassador calls for dialogue to settle trade disputes

LONDON, May 28 (Xinhua) -- Chinese ambassador to the European Union (EU) Wu Hailong called for talks to settle the current trade disputes between his country and the bloc, warning protectionism may end up harming the EU itself.

The EU's repeated attempts to stir up trade frictions with China are "astonishing and confusing," Wu wrote in an article published in Monday's Financial Times.

He called on the EU to take a sensible approach and honor its commitment to settling disputes through dialogue and consultation for the ultimate benefit of both sides.

Wu noted that in the past year, China-EU trade has been on a downward trajectory, declining 3.7 percent in 2012 and a further 1.9 percent in the first quarter of 2013.

"This is very worrying. The main cause is the sluggish European economy, where demand is weak and competitiveness is declining. But the EU's protectionist measures against China have also had a harmful impact on trade," he said.

He stressed that it is counterproductive for the EU to take any protectionist measures against China, as these will not help resolve the difficulties facing Europe's industries or stem the decline in competitiveness of their products.

"In fact, the EU may end up only harming itself since these measures could cause its economy to lose steam and undermine the confidence of Chinese companies in their business relations in Europe," Wu wrote.

The European Commission, the EU's executive body, backed a proposal this month to impose punitive tariffs averaging 47 percent on imports of Chinese solar panels to prevent alleged dumping in the European market.

Also this month, it proposed opening an anti-dumping and anti-subsidy investigation into mobile telecom equipment imported from China.

Wu said the commission's action has tarnished its image as an advocate of free trade, fuelled the rise of protectionism and run counter to the commitment by the leaders of the Group of 20 leading industrialized and developing economies not to introduce protectionist measures.

"About 40 percent of what countries export is made up of imported inputs. So protectionism does not protect," Wu pointed out in the article, citing recent remarks of Pascal Lamy, director-general of the World Trade Organization.

Wu also said that a large proportion of trade between China and the EU is within the same value chain. Restricting Chinese exports to Europe will hurt both EU consumers and industries.

"In fact, many European entrepreneurs and experts have spoken out against the EU's moves to stir up trade frictions," Wu said.

He noted that recently, more than 1,500 companies that import and install photovoltaic products have written to Karel De Gucht, EU's trade commissioner, opposing the protection of a small number of producers at the expense of the vast majority of businesses and consumers.

Some European studies have warned that restricting Chinese photovoltaic products will lead to job losses running into the tens of thousands and could even trigger a trade war, he added.

Wu also stressed that creating an open trade environment and sending a positive signal would be much more beneficial in boosting the confidence for cooperation and facilitating the EU's economic recovery at a time when the EU economy is still in the doldrums.

http://news.xinhuanet.com/english/china/2013-05/28/c_132414163.htm