China and E.U. in Spat Over Wine Trade

(Image source: Bloomberg)

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BY ELIZABETH HAGEDORN

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China and the European Union are playing a game of tit-for-tat ? with the Far East nation claiming French wines are entering the market unfairly.

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Less than 24 hours after the E.U. announced it would impose punitive tariffs on Chinese solar panels, China announced it was launching an investigation over what?s known as ?dumping.? (Via CBS)?

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? that is, selling a product abroad for less than at home. The probe comes at the request of Chinese wine makers who allege the wines dumped into China from Europe make it hard for them to compete. ?(Via NBC)?

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The move is seen by many analysts as retaliation on China?s part ? though mostly symbolic. But there is some speculation China could follow up with some steep tariffs against European-made wines. (Via CNN)?

The E.U. has denied any predatory pricing, calling China?s actions misleading and flat-out-wrong. ?

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The E.U.?s 27 member countries exported nearly $1 billion worth of wine to China last year ? with France of course leading the pack. According to France 24, Paris has slammed the Chinese investigation as ?inappropriate and reprehensible.?

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But what do the numbers say? A writer for The Wall Street Journal?says the amount of wine France exports to China keeps going up, but prices stay the same. With that in mind, it doesn?t really make a whole lot of sense for the French to sell their wine at a lower cost.

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?More plausibly, sales of European wine have followed the trend of other luxury goods in China: The country?s burgeoning middle class and nouveau riche want to spend more of their new-found wealth on French wine, German cars and other brand-name Western goods.?

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This follows a series of previous disputes between the two trading partners involving products like pipes and chemicals. China is currently caught up in 18 of the E.U.?s 31 ongoing trade investigations.

Source: http://www.newsy.com/videos/china-and-e-u-in-spat-over-wine-trading

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