Germany told the European Commission yesterday that it rejected a proposal to slap tariffs on Chinese solar panel imports.
Chancellor Dr Angela Merkel had pledged earlier during a visit by Premier Li Keqiang to take steps to avoid a brewing trade war between China and the European Union.
"There is, from our point of view, no longer a need for penalties and therefore Germany today after the expiry of the deadline … voted 'no'," Economy Minister Philipp Roesler said in a speech in Berlin attended by Li on the final day of his visit to Germany. "We are against protectionist measures, for open markets and fair competition."
Li welcomed the German move to gain more time, saying it was because Berlin "wanted to hear" China's stance. "This position, that is what binds China with Germany and earns my appreciation," he said.
At a press conference with Li on Sunday, Merkel said she would work over the next six months to solve the dispute.
"I will, as head of the government, advocate that we, at the European level, as quickly as possible have intensive discussions with the Chinese side on the questions at issue," she said.
The European Commission, the 27-nation bloc's executive arm, accused China of pricing its solar panels and some mobile telecoms devices too cheaply, prompting Brussels to propose imposing an average 47 per cent special duty on Chinese solar panels by June 5. Brussels is also looking into the telecoms sector.
Li criticised the EU's approach, saying the move was "a measure that does not serve the particular interests and also damages others", he said. "Therefore we hope that through joint efforts and through dialogue and consultations, the trade disputes between China and the EU can be settled."
Some diplomats said Germany, Britain and the Netherlands were among at least 15 member states - a majority - who opposed the sanctions for fear of losing business in China.
Germany is by far China's biggest European trading partner, with exports to China worth €66.6 billion (HK$669 billion) last year, mostly cars, car parts, machinery and electrical goods.
Hans Kundnani, of the European Council on Foreign Relations, said: "Germany does not want to start a trade dispute with China that will lead to punitive measures against German companies in other sectors when they are still competitive."
Cui Hongjian , director of European Studies at the China Institute of International Studies, said Germany could liaise with EU states to exert more influence.
European leaders will spend the coming weeks working on plans to bolster economic growth, and Li said China would rely on Germany to lead the euro zone out of its crisis. "We earnestly hope that the EU resolves these temporary difficulties," he said.
Bloomberg, Reuters, Agence France-Presse