What started as a mere attempt at protecting nascent businesses in the US and abroad, by imposing tax tariffs on Chinese products that were believed to be 'dumped' on the markets, has now become an all out trade war, in which the Chinese government is responding to such measures with a tit for tat.
This time, it is France and the EU wine industry. China has decided to strike back by sending an anti-dumping and anti-subsidy commission to investigate the wine industry in France, although the commission would cover all European Union wine production.
Francois Regis, of the Chateau Saint Jean de Conques in Languedoc-Roussillon has already expressed dismay at the Chinese campaign, saying that it aims to damage the wine industry in Europe.
China's middle class is now more than ever interested in all things European, including wine products.
The Chinese effort then, would call for tariffs that could cripple the wine industry. What Regis is also saying is that the only way for him to survive would be to reduce his wine prices to be competitive with other wine producing countries who are not suffering the same tariffs. His only choice then, if he were to not bow to the imposition, would be to exit the Chinese market altogether.
The Chinese market is very price sensitive. If tariffs are imposed, the price of wine will go up, and the middle class is extremely conscious of price.
Other producers instead believe that demand will remain strong for the wines, whether or not the tariffs are imposed.
It is important however, to find a compromise that will suit both parties, the EU wine producing countries and China, say most wine producers.
Source : Xinhua/ 6.7.13
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