No ray of sunshine in solar panel dispute

Meanwhile, the trade friction also mirrors the splits in the European Union. This trade dispute initiated by a slate of European companies has not won widespread support. German Chancellor Angela Merkel has publicly expressed her disagreement with the move. And about 1,000 European downstream companies have already written to Trade Commissioner Karel De Gucht, asking him to stop penalizing Chinese companies. Sources say petitions on Wednesday may be flooding the trade commissioner, who is reportedly keen to be tough on China's producers.

It is true that legal procedures may allow De Gucht and his colleagues to do this, but their investigative action is not in the interests of the majority, which is a huge flaw in the EU's institutional arrangement. The majority of member states - 8 out of 27, including Germany and United Kingdom - have voted against De Gucht's proposal.

What's more, the proposal flies in the face of China's willingness to continue the constructive momentum in bilateral relations, which have deepened during the eurozone's debt crisis. China's new leadership was intending to further boost bilateral relations to celebrate the 10th anniversary of strategic partnership this year. The visit of Premier Li Keqiang to Germany signaled this intention.

But as Beijing has said, it will not sit idly by, because this case involves more than 20 billion euros ($26 billion) and all frictions in total cover nearly 4-5 percent of China's trade with Europe. This endangers a large number of jobs in China.

So there is a big risk of a trade war between China and Europe. And Beijing will retaliate both in words and actions before two sides sit down to negotiate a solution.

Ideally, a compromise can be reached between two sides prior to their scheduled summit in Beijing later this year. Then the European politicians can decide to end the tariff penalty at their December summit in Brussels and wrap up this drama.

If this is not the case, bilateral relations between China and EU will encounter a new low in the coming months, with Beijing focusing on ties with member states.

The author is chief correspondent of China Daily European Union Bureau and can be reached via fujing@chinadaily.com.cn.

(China Daily 06/05/2013 page8)