China launches investigation into EU wine exports China has launched a trade investigation into European wine exports, in apparent retaliation for Europe's proposed tariffs on Chinese solar panels, sharply escalating the dispute between two of the world's largest trading partners. The investigation comes just one day after the EU offered an olive branch to Chinese solar-panel makers, announcing a temporary lowering of tariffs on Chinese panels while the two sides try to negotiate a solution to their long-running trade dispute. The Chinese Ministry of Commerce said it welcomed negotiations over the solar market, but in the same statement added it was investigating anti-dumping measures and countervailing duties for European wine exports. The imposition of duties on European wines by Beijing would be a blow to the continent's producers. China is the fastest growing wine market in the world, and already the fifth-largest globally, according to a recent study by the IWSR, a wine consultancy. Although red and white wines have not traditionally been part of Chinese cuisine, demand has been soaring as newly affluent consumers develop a taste for imported wines. "Such a step will be widely regarded as retaliation [for the solar duties]," said Davide Cucino, president of the EU Chamber of Commerce in China. Such escalation of cases is not beneficial to either side. Moreover, retaliation represents a missed opportunity for China to engage in friendly negotiations with the European Union to try to find an amicable solution to the solar panel case that could supersede the provisional measures. The European Commission's agricultural department said: "We believe there is not dumping of European wine on the Chinese market." Of the €763m of European wine exports to China in 2012, €546m was from France, €89m from Spain and €77m from Italy. Unlike Germany, France fully supported the move for Brussels to bring 47 per cent tariffs on imports of Chinese solar panels. François Hollande, the French president, called for all 27 EU members to meet to resolve their differences over trade relations with China. "The president wants the European Commission to convene a meeting and for the 27 to reach a common point of view," Najat Vallaud-Belkacem, spokesperson for the minister for women's affairs and official government, said after the weekly cabinet meeting. The dispute between China and the EU over solar panels has grown increasingly acrimonious since the beginning of May when EU trade Commissioner Karel De Gucht proposed to impose duties averaging 47 per cent on Chinese panel imports. After high-level lobbying from Chinese leaders as well as from within EU member states - many of whom oppose solar panel tariffs - the European Commission on Tuesday set tariffs for Chinese panels at 11.8 per cent until August, allowing time for negotiations. The tariffs will rise to an average 47.6 per cent after that if no settlement is reached. Shen Danyang, spokesman for China's commerce ministry, warned on Wednesday: "China doesn't want to see the trade dispute in the solar industry affect the bigger picture of China-Europe relations." Beijing said it started the investigation in response to complaints from Chinese winemakers, and noted that the country's imports of European wine had been increasing rapidly. Share prices of domestic Chinese wine companies such as Yantai Changyu rose sharply on Wednesday after the announcement. China is the third-largest market for French wine exports. Louis Fabrice Latour, chairman of the French Federation of Wine and Spirits Exporters, which represents 85% of the country's wines and spirits exports, said on Wednesday that the industry had been "taken hostage" in the trade negotiations between China and the EU. "Given the global economic slowdown, it's particularly regrettable that our sector is being used as a tool in a commercial dispute," he said. The wine sector is a good example of a sector whose dynamism lies in exports, including to China. We really hope that the EU and China can overcome commercial tensions through dialogue and negotiation and we are certain that France can encourage them to do so. Stéphane Le Foll, France's agriculture minister, said that European wine exports did not benefit from any government subsidies. I understand the worries of the winegrowers because they reflect the importance of China, where we have an extremely strong presence. China is the largest export market for wines produced in France's southern Bordeaux region, whose vineyards have been of growing interest to Chinese buyers. Only last week, Michel Rolland, the celebrated French oenophile, sold a majority stake in one of his Bordeaux estates to Goldin Group of Hong Kong. However, Alexander Hall, director of Vineyard Intelligence, a consulting firm based in the region, said that Chinese buyers had acquired a maximum of 40 estates since 2008 - representing 0.5 per cent of the 7,500 estates in the area. Some Chinese wine merchants believe that additional tariffs will do little to quell consumers" thirst for foreign wines, which are already taxed at a rate of about 50 per cent when they enter the country. A salesman at Golden Chateau, a Beijing-based importer of French wine, said he expected demand to remain robust even if prices rise because of tariffs. "We've been doubling sales every year," said the salesman, who gave his name as Mr Wang. Demand is still strong. France is the biggest exporter of wine to China by volume, and saw its sales to China jump sixfold between 2007 and 2011, according to the IWSR. One out of 10 bottles of wine consumed in China comes from France. Additional reporting by Li Wan in Beijing and Peter Spiegel in Brussels