China opens anti-dumping probe into EU chemical ahead of trade talks

China has opened an anti-dumping investigation into a chemical imported from the European Union, less than a week before the bloc's trade commissioner arrives in Beijing for talks meant to stop a dispute from escalating.

The commerce ministry in China said on Saturday it would examine whether low-priced p-nitrotoluene from the EU was flooding the Chinese market. A spokesperson said domestic producers had asked for the probe, complaining of "damage to production and operations".

The chemical is used to make dyes, pharmaceuticals and pesticides and the investigation is due to conclude within 12 months, with a possible six-month extension.

It follows an investigation by the EU, opened in September, into polyvinyl chloride imports from countries including China. Beijing denies that its manufacturers owe their competitiveness to state support and has threatened countermeasures against EU moves to block its firms.

"China has repeatedly reiterated that the EU needs to face its own economic and trade problems directly and resolve mutual concerns through dialogue and consultation," the spokesperson said.

What is dumping?

Dumping is when a company exports a product for less than it charges at home, or for less than it costs to make. World Trade Organization rules allow the importing country to respond with extra tariffs, known as anti-dumping duties, if an investigation finds that the cheap imports have injured its own producers.

Brussels is reaching for the tool far more often. Commission President Ursula von der Leyen said in August that the EU had opened 30 trade defence investigations in a year, nearly triple the usual rate, as Chinese imports rose 45% in five years.

Sefčovič heads to Beijing

EU Trade Commissioner Maroš Sefčovič will be in Beijing on 8–9 October to co-chair a session of the EU-China Trade and Investment Council and meet Commerce Minister Wang Wentao. The visit marks the deadline Brussels set in June for the first tangible results from its dialogue with Beijing.

Brussels wants assurances that China will curb exports to the EU and extend a truce on rare earth exports, with the bloc's trade deficit running at €1 billion a day. Beijing has already warned it would respond firmly to any new EU restrictions on Chinese companies or products.

In an exclusive interview with Euronews last month, Sefčovič described the talks as highly political and said negotiations had to produce concrete results. Without them, he warned, there would be "a strong political movement to push for, I would say, harsher measures".

He also told Euronews that if he had nothing to show EU leaders, "the political interest would be to look for the solution through other instruments". Those leaders meet in Brussels on 15–16 October, a week after his trip.