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Trade Wars: The Chinese Empire Strikes Back
We reported yesterday that Europe, in a surprising escalation of global trade wars, announced it would impose solar-panel duties against China in one week, with the terms rapidly deteriorating over the next three months. It took China less than one day to retaliate. What's worse the retaliation is aimed at Europe's already weakest - the PIIGS - by targeting not hard German machinery exports but something far more prosaic: French, Spanish and Italian wine.
Reuters reports that "in a step targeting southern European states such as France and Italy that back the duties but largely sparing north European opponents such as Germany, Beijing said it launched an anti-dumping and anti-subsidy probe into sales of European wine. The Chinese ministry said the government had begun the probe into EU wines at the request of Chinese wine makers.
"The Commerce Ministry has already received an application from the domestic wine industry, which accuses wines imported from Europe of entering China's market by use of unfair trade tactics such as dumping and subsidies," it said in a statement.
"We have noted the quick rise in wine imports from the EU in recent years, and we will handle the investigation in accordance with the law."
The move appeared largely symbolic and less severe than if China had targeted hi-tech exports such as Airbus aircraft, made by Toulouse-based European aerospace group EADS.
Beijing imported 430 million liters of wine last year, of which more than two-thirds came from the EU, according to Chinese customs figures. Imports from France alone came to 170 million liters.
Short Diageo and Pernod?
China is the third biggest export market for French wines and spirits by value, worth 1 billion euros ($1.31 billion) in 2012 or nine percent of Paris' wine and spirits exports, according to the FEVS producers' federation.
Jim Boyce, who runs the wine blog grapewallofchina.com, said Chinese manufacturers have been upset about alleged dumping for a while.
It appears Spain's recent export stability is about to be monkeyhammered:
"The big issue was all this Spanish wine flowing in here at incredibly low prices," he said.
And should the trade war escalate, things are about to get far, far worse for Europe:
The European Union is China's most important trading partner, while for the EU, China is second only to the United States. Chinese exports of goods to the 27-member bloc totaled 290 billion euros ($376 billion) last year, with 144 billion euros going the other way.
Wine sales are only a fraction of overall exports to the rising Asian economic powerhouse but the move raises the risk of more tit-for-tat trade barriers.
The EU now has 31 ongoing trade investigations, 18 of them involving China. The largest to date is that into 21 billion euros of imports from China of solar panels, cells and wafers.
The EU says it has evidence that Chinese firms are selling solar panels below cost - a practice known as dumping. But the initial duty of 11.8 percent announced on Tuesday by European Trade Commissioner Karel De Gucht was far below the average 47 percent that had been planned.
China's Commerce Ministry said it took note of the lower initial rate, but called on the EU to "show more sincerity and flexibility to find a resolution both sides can accept through consultations".
Then again, in a centrally-planned world where the only "growth" is currency dilution who needs trade: Ben and Mario can just print it, right?
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this one act could collapse the french economy, they don't need much of a push
The Socialists will do that just fine, the Chinese are just giving them a little helpful nudge.
french wine
http://2.bp.blogspot.com/-89v4n0oo6kg/Ua5cFDnKI4I/AAAAAAAAACg/BftQJ8bv78...
Fuck them and their pretentious wines. If you drink alcohol for any other reason that to get shit faced and quiet the voices in your head your a pretentious douche. I get the craft part and flavor subtlety but it is alcohol and I don't know many if any people who don't drink alcohol for any other reason that to get fucked up.
++
I told the same thing (approximately) to a Lt Cmdr psychologist a long time ago and that Aunt Jemimah looking bitch didn't appreciate the truth of it. She wrote up my eval and I had to attend DAPA training with all the drunks at my command because of it. Went to the first meeting and the 1st class in charge of it told me to get the F gone, those boys could smell their own.
A knuckle dragging sloped brow forehead type who can't appreciate the subtle difference between a wet fart and shitting their pants is not going to be able to appreciate that in wine. This unfortunately describes the average individual plugged into the matrix these days. Look if TGIF can pass off rubbing alcohol with caramel color as scotch you think these people are going to be able to tell the difference between jail house hooch and fine wine.
I get it people need to decompress and they drink to do so but self delusion is not productive. I drink myself but I don't make any excuses to justify it as anything but decompression. If anything these days I find working out at the gym or any exercise in general works just as well for decompression purposes.
And then there's people who appreciate fine cooking and realize certain glazes, sauces and dinners need a quality wine, not just booze or we'd all just buy 'shine.
"If you've been playing at the poker table for 30 minutes and don't yet know who the patsy is.....then you're the patsy."
Warren Buffett
Modern equivalent?
"If you look around and don't see zombies everywhere... You are a zombie."
I note that the Chinese attack on EU wine imports will have no harmful effect on itself, whereas the EU import taxes on Chinese solar panels will adversely affect the EU's aim to produce free, clean energy and reduce CO2.
Solar panels that are considerably less robust than claimed to be. How can purchasing that be good for an economy? If the model is to make cheap, low quality, short life span appliances, I think the benefits are all going to go to the manufacturers, not the purchasers.
they cut the electric bill by 75% in areas that get a lot of sun.
Trouble with Europe is that you may not see any sun until you get to Greece, Portugal, Italy, Spain... France, the UK, Germany- forget it.
Unless they want to set up generators in Moracco and emit the energy to the northern half of Europe to provide them with power.
Weak Europe = bullish for...
Dollar
QE
Stox
Cheap wine in US.
Getting a DUI, police job security
EU vacations
PM stacking
Me no drinkee for drinkee, me drinkee for drunkee...............
"dumping" means to sell an import at a cost so low that the domestic goods producer can't match it.
I think the Commerce Ministry desperately needs a screenwriter and a real economist that isn't bought off by Wall Street. I highly doubt that France was dumping it's wine. Esp. if the Euro trades so much higher than the Yuan and the Remnimbi.
"The Commerce Ministry has already received an application from the domestic wine industry, which accuses wines imported from Europe of entering China's market by use of unfair trade tactics such as dumping and subsidies," it said in a statement."
I seriously doubt that a French wine maker would take a hard cut like that.
http://www.reuters.com/article/2013/06/05/us-china-eu-solar-idUSBRE95403...
"Commerce" Ministry = COMEDY Ministry. As psychotigerbeast Amy Chua would say, "GARBAGE!"
Maybe the Commerce Ministry title was mistranslated from Chinese text. They meant "COMEDY" Ministry. Not Commerce Ministry.
Like Francs and Euros can take the cut to dump in China... that's really magic. I'm going to enjoy some fine barbequed sparkly unicorn meat on my flying carpet now.
China must have put a lot of sober thought into this decision
Booyah!! Cheap booze for the rest of Europe!
some facts : China exports 25 Billion $ worth of solar panels to EU. France exports 0.8 billion $ worth of Wine n spirits.
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Somehow the retaliation is aimed to China itself: When gobbling up assets overseas Chinese companies bought - especially in France - some "prestigious vineyards".
http://tinyurl.com/kss6aoc