BEIJING, July 1 (UPI) -- China announced a formal anti-dumping probe into wine imports from the European Union as trade tensions between the two sides rise.
The Chinese Ministry of Commerce said Monday the investigation will determine whether European wine makers are dumping their products into China and receiving illegal government subsidies.
The anti-dumping and countervailing duty probe was launched at the request of China Alcoholic Drinks Association, China's Global Times reported.
The 28-member EU currently is China's largest trading partner, with Chinese exports totaling about $377 billion last year. However, trade disputes between the two have been growing.
In June, the EU, after a nine-month anti-dumping investigation, announced duties on Chinese solar panels. The EU duties would be imposed in two stages -- 11.8 percent in the first two months followed by 47.6 percent in the next four months.
The action came despite strenuous Chinese objections. Chinese solar panel exports are worth about $27 billion.
In announcing its decision on the EU wine imports, Chinese Commerce Ministry officials said it would be a fair-trade investigation and not a tit-for-tat response to the EU's ruling on Chinese solar panels, the Global Times reported.
Official Chinese data show China imported 257,000 kiloliters of wine from the EU in 2012, worth $1.04 billion. The EU accounted for more than two-thirds of Chinese imports, with France being the biggest exporter from the bloc.
"Wine imports from the EU accounted for 65.16 percent of the total wine imports in China in 2012. The majority of the imports cost less than 3 euros ($3.91) per bottle," Wang Dehui, a wine marketing specialist at China Wine Union, told the Global Times Monday.
"Among the low-cost wine imports from the EU, those costing below 1.5 euros per bottle make up a large proportion. The low cost of wine from the EU poses a great challenge to domestic wine," Wang said.
Major Chinese wine makers say they have seen a sharp fall in revenue and profits in the last two years.
The wine investigations are expected to go on for a year and could be extended to January 1, 2015, the ministry said.
China had mounted a major official effort to convince the EU against going ahead with its decision on the solar panels. During his visit to Germany in May, Chinese Premier Li Keqiang expressed strong opposition not only to any punitive duties on Chinese solar panels but also to the EU conducting a trade probe into Chinese mobile telecommunications products.