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| China Aims at Europe’s Wines After Solar Panel Action | |
| (about 4 hours later) | |
| HONG KONG — China’s nouveaux riches millionaires, wealthy princelings and bribing business executives may soon find their wallets a little thinner: The price for French Champagnes and Burgundies, Italian Barolos and pinot grigios and other European wines may soon rise in mainland Chinese stores. | |
| Less than a day after the European Union said it was imposing preliminary import tariffs on Chinese solar panels, China’s Ministry of Commerce announced Wednesday that it had begun a trade investigation of wines imported from the European Union. The investigation could lead to the imposition of steep tariffs by China. | Less than a day after the European Union said it was imposing preliminary import tariffs on Chinese solar panels, China’s Ministry of Commerce announced Wednesday that it had begun a trade investigation of wines imported from the European Union. The investigation could lead to the imposition of steep tariffs by China. |
| The European Union’s trade commissioner, Karel De Gucht, announced Tuesday in Brussels that he was imposing preliminary tariffs of 11.8 percent on solar panels imported from China, saying the panels were being “dumped,” sold for less than they cost to make, in Europe. | The European Union’s trade commissioner, Karel De Gucht, announced Tuesday in Brussels that he was imposing preliminary tariffs of 11.8 percent on solar panels imported from China, saying the panels were being “dumped,” sold for less than they cost to make, in Europe. |
| If China was trying to send a retaliatory signal to Mr. De Gucht personally, wine might be a good target. He owns a 50 percent stake in a wine-producing estate in the Tuscany region of Italy. | If China was trying to send a retaliatory signal to Mr. De Gucht personally, wine might be a good target. He owns a 50 percent stake in a wine-producing estate in the Tuscany region of Italy. |
| The Chinese commerce ministry carefully avoided linking the solar panels to Wednesday’s announcement that it would investigate European wines for improper duties or subsidies, saying instead that it was acting in response to a complaint from Chinese wineries. | The Chinese commerce ministry carefully avoided linking the solar panels to Wednesday’s announcement that it would investigate European wines for improper duties or subsidies, saying instead that it was acting in response to a complaint from Chinese wineries. |
| But the ministry issued a separate statement expressing “resolute opposition” to the decision on solar panels. “We hope the E.U. will further show their sincerity and show flexibility, through consultations to find mutually acceptable solutions,” the statement said. | But the ministry issued a separate statement expressing “resolute opposition” to the decision on solar panels. “We hope the E.U. will further show their sincerity and show flexibility, through consultations to find mutually acceptable solutions,” the statement said. |
| The 27 countries of the European Union exported $980.7 million worth of wine to China last year, most of it from France, according to customs data compiled by Global Trade Information Services in Columbia, S.C. That is much smaller than Chinese exports of solar panels to Europe, which reached $27 billion in 2011 before a combination of trade frictions and cuts in European subsidies to buyers of solar panels started to discourage shipments. | The 27 countries of the European Union exported $980.7 million worth of wine to China last year, most of it from France, according to customs data compiled by Global Trade Information Services in Columbia, S.C. That is much smaller than Chinese exports of solar panels to Europe, which reached $27 billion in 2011 before a combination of trade frictions and cuts in European subsidies to buyers of solar panels started to discourage shipments. |
| Threatening to retaliate against fine wines during a trade dispute with the European Union is time-honored tactic for international trade negotiators. Wine exporters are a powerful political constituency and national figures in some European countries, particularly France. A threat to limit their overseas sales is a way to bypass European leaders and appeal to public sentiment for a reduction in trade tensions. | Threatening to retaliate against fine wines during a trade dispute with the European Union is time-honored tactic for international trade negotiators. Wine exporters are a powerful political constituency and national figures in some European countries, particularly France. A threat to limit their overseas sales is a way to bypass European leaders and appeal to public sentiment for a reduction in trade tensions. |
| Mr. De Gucht was already bucking widespread opposition in Europe by taking on Beijing over solar panels, with a range of national politicians and executives from other industries eager to expand — not curtail — trade relations with China. | Mr. De Gucht was already bucking widespread opposition in Europe by taking on Beijing over solar panels, with a range of national politicians and executives from other industries eager to expand — not curtail — trade relations with China. |
| In November 1992, in a dispute over European farm subsidies, the United States announced that it was imposing a 200 percent tax, to take effect in 30 days, on imports of still white wines from Europe, like Chablis from France and riesling from Germany, and a few red wines. The two sides quickly reached a compromise. | In November 1992, in a dispute over European farm subsidies, the United States announced that it was imposing a 200 percent tax, to take effect in 30 days, on imports of still white wines from Europe, like Chablis from France and riesling from Germany, and a few red wines. The two sides quickly reached a compromise. |
| Until now, China has tended to pursue retaliatory trade actions against industrial products, including imports of polycrystalline silicon, the main material for solar panels. That material is already the subject of a Chinese trade investigation after the United States imposed antidumping and antisubsidy tariffs totaling about 30 percent on Chinese solar panels. | Until now, China has tended to pursue retaliatory trade actions against industrial products, including imports of polycrystalline silicon, the main material for solar panels. That material is already the subject of a Chinese trade investigation after the United States imposed antidumping and antisubsidy tariffs totaling about 30 percent on Chinese solar panels. |
| The Chinese threat against wine imports has the potential to upset consumers in China — at least some of the most affluent ones. The move may also end up impinging on some Chinese investors because growing wine consumption in China has prompted a surge of investment in French vineyards. | The Chinese threat against wine imports has the potential to upset consumers in China — at least some of the most affluent ones. The move may also end up impinging on some Chinese investors because growing wine consumption in China has prompted a surge of investment in French vineyards. |
| In recent years, Chinese companies and business leaders have snapped up more than three dozen chateaus in Bordeaux, the wine region that has drawn the greatest interest from Chinese drinkers. | In recent years, Chinese companies and business leaders have snapped up more than three dozen chateaus in Bordeaux, the wine region that has drawn the greatest interest from Chinese drinkers. |
| The acquisitions involved mostly lesser-known vineyards among the close to 10,000 Bordeaux estates. Many of these properties have struggled in recent years to sell their wine in the traditional markets of Europe. | The acquisitions involved mostly lesser-known vineyards among the close to 10,000 Bordeaux estates. Many of these properties have struggled in recent years to sell their wine in the traditional markets of Europe. |
| Under the new Chinese owners, production in some cases is exported entirely to China, where the wine often is marked up substantially. Low-end Bordeaux that might sell for less than 5 euros, or $6.50, in France, might go for five or 10 times as much in China. | Under the new Chinese owners, production in some cases is exported entirely to China, where the wine often is marked up substantially. Low-end Bordeaux that might sell for less than 5 euros, or $6.50, in France, might go for five or 10 times as much in China. |
| Philippe Castéja, president of the Conseil des Crus Classés en 1855, an organization representing elite chateau owners of Bordeaux, said punitive Chinese tariffs could substantially harm the French economy. About 500,000 people in France are employed in the wine industry. About 20,000 of those jobs, he said, are supported by sales to China, directly or indirectly. | Philippe Castéja, president of the Conseil des Crus Classés en 1855, an organization representing elite chateau owners of Bordeaux, said punitive Chinese tariffs could substantially harm the French economy. About 500,000 people in France are employed in the wine industry. About 20,000 of those jobs, he said, are supported by sales to China, directly or indirectly. |
| “The potential effect is very serious, both in terms of revenue and employment,” Mr. Castéja said. | “The potential effect is very serious, both in terms of revenue and employment,” Mr. Castéja said. |
| As for Mr. De Gucht’s wine holdings, according to the personal financial declaration he filed last July as a European Commission official, the estate, called La Macinaia, is a small vineyard and a destination for agricultural tourism, or vacationing in farmhouse resorts. | As for Mr. De Gucht’s wine holdings, according to the personal financial declaration he filed last July as a European Commission official, the estate, called La Macinaia, is a small vineyard and a destination for agricultural tourism, or vacationing in farmhouse resorts. |
| The business, valued at 1 million euros, lost 145,313 euros in 2011 but still benefited from a small European Union subsidy of 1,500 euros as a “biodynamic winery,” according to the declaration by Mr. De Gucht, who is a Belgian and a former president of the Flemish liberal party. | The business, valued at 1 million euros, lost 145,313 euros in 2011 but still benefited from a small European Union subsidy of 1,500 euros as a “biodynamic winery,” according to the declaration by Mr. De Gucht, who is a Belgian and a former president of the Flemish liberal party. |
| He had a share in the property before taking office as European Union trade chief, said his spokesman, John Clancy. “There are no exports to China,” Mr. Clancy said. | He had a share in the property before taking office as European Union trade chief, said his spokesman, John Clancy. “There are no exports to China,” Mr. Clancy said. |
| While the Chinese trade case was immediate news in Europe on Wednesday, it drew less attention in China, possibly because the Ministry of Commerce did not release a timetable for its investigation. Western governments have long complained that Chinese antidumping and antisubsidy investigations are capricious exercises that seem to follow few of the complex but fairly transparent legal procedures used in the West. | While the Chinese trade case was immediate news in Europe on Wednesday, it drew less attention in China, possibly because the Ministry of Commerce did not release a timetable for its investigation. Western governments have long complained that Chinese antidumping and antisubsidy investigations are capricious exercises that seem to follow few of the complex but fairly transparent legal procedures used in the West. |
| Some in China may be able to avoid the higher prices for wine if they are imposed. Hong Kong eliminated taxes on wine several years ago in a fairly successful bid to become a wine trading hub, and the nearly autonomous territory has become a popular place for many mainlanders to drink and then bring a bottle or two home. | Some in China may be able to avoid the higher prices for wine if they are imposed. Hong Kong eliminated taxes on wine several years ago in a fairly successful bid to become a wine trading hub, and the nearly autonomous territory has become a popular place for many mainlanders to drink and then bring a bottle or two home. |
| Extra taxes could also help another, more dubious Chinese industry: the entrepreneurs who print fake French labels and slap them on bottles of local plonk, some of it almost undrinkable. | Extra taxes could also help another, more dubious Chinese industry: the entrepreneurs who print fake French labels and slap them on bottles of local plonk, some of it almost undrinkable. |
James Kanter contributed reporting from Brussels, Eric Pfanner from Serraval, France, and Hilda Wang from Hong Kong. | James Kanter contributed reporting from Brussels, Eric Pfanner from Serraval, France, and Hilda Wang from Hong Kong. |