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Chinese PM meets German chancellor amid trade row

Juergen Baetz, Associated Press

German Chancellor Angela Merkel, left, welcomes the Prime Minister of China Li Keqiang for a meeting at the chancellery in Berlin, Sunday, May 26, 2013. (AP Photo/Markus Schreiber)

BERLIN (AP) -- Chinese Premier Li Keqiang met with German Chancellor Angela Merkel on Sunday amid a looming trade spat between Asia's economic giant and the European Union.

The leaders were expected to discuss economic issues and human rights but also international topics such as Iran's nuclear program and the civil war in Syria, German officials said before the meeting in Berlin.

During a visit to Switzerland on Saturday, Li criticized the EU for pursuing anti-dumping cases against Chinese solar power and telecommunications equipment manufacturers that he warned will hurt both sides.

"The cases over these two types of products will hurt Chinese industries, business and jobs, and also damage the vital interests of European users and consumers," China's official Xinhua News Agency quoted him as saying. "We express firm opposition."

The EU Commission, the 27-nation bloc's executive arm, accuses China of pricing its solar panels and mobile telecom devices too cheaply, thereby flooding the European market, distorting competition and hurting European manufacturers. Brussels has therefore proposed imposing an average 47 percent special duty on Chinese solar panels, and it is continuing to look into the telecommunication sector.

Germany, Europe's biggest economy, has indicated that it hopes for a negotiated solution in those cases rather than having the EU impose anti-dumping duties, which could provoke China to impose retaliatory tariffs.

Merkel's spokesman, Steffen Seibert, said Friday the trade issue will certainly be part of the Chancellor's talks with Li.

"Between Europe and China, we must try to find amicable and fair agreements and joint approaches that both sides can live with," Seibert said.

Germany's powerful industrial lobby groups also oppose the discussed EU anti-dumping measures against China, fearing an escalating trade war that would dent the countries' buoying business ties.

China is the world's largest producer of solar panels, and more than half of its output is exported to Europe, totaling 21 billion euros in 2011.

The global solar panel market is suffering from overcapacity, which has led to stiff competition that has forced several European manufacturers out of business.

China rejects the EU's price-dumping allegations, but the problem is no novelty for Beijing. The U.S. last year imposed punitive tariffs on solar panel imports after finding that China's government was subsidizing companies that were flooding the U.S. market.

The EU, the world's largest economy, is China's second-biggest business partner after the U.S., with a trade volume of about 430 billion euros in 2012.

Following Li's arrival at Berlin's Chancellery, Merkel and her Chinese counterpart met with students from both countries before holding closed-door talks. Later Sunday, they were set to have a dinner at a government guest house outside the capital.

Li, who took office in March, visited Switzerland on Friday. In Zurich, he signed China's first free-trade agreement with a major Western economy that had been negotiated over the past years.

Germany is the only EU member nation on Li's trip.

On Monday, he will meet other officials and business leaders. He also is scheduled to meet Merkel's challenger in September's national elections, the Social Democrats' candidate Peer Steinbrueck.


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