b'REACTION IN BEIJINGThat remains to be seen. In the meantime, the solar truce does not mean theChinese panel makers facing bankruptcycommissioners showdown with China is finished. Mr De Guchts priority, and one thatWhen Brussels and Beijing forged a solar will test his convictions on a larger battlefield,trade deal last weekend, the relief from is an even more sensitive anti-subsidyChinese officials and state media was investigation he has been preparing intoimmense. Chinas leading telecommunications network equipment companies.One breathless headline declared: EU-China solar panel deal averts crisis, benefits world. The telecom industry has greater strategicWang Yi, the foreign minister, described and commercial value than solar panels,the deal as goodfor the global economic which are easily produced, and threatensrecovery. Huawei Technologies, a Chinese national champions.However, for the Chinese solar companies whose panels were at the centre of the spat, The case has an added twist in that it wouldthe deal does little to brighten a gloomy be among the first the commission hasoutlook. filed on its own - and not at the behest of a company or an industry. Mr De Gucht hasSeveral of Chinas largest solar- panel makers advocated such ex officioinvestigations asface bankruptcy or restructuring. The state a way to blunt Chinese threats of retaliationcouncil, Chinas cabinet, identified a number against European companies.of woes plaguing the sector, including serious overcapacity, over-dependenceon That approach has infuriated Beijing, whereforeign markets, and weak technological some officials are said to refer to Mr De Guchtinnovation. as a mad Belgian, and worried the EUs telecom equipment companies, who fearThe deal is vital for these companies because Chinese retaliation. The EU and China haveEurope is the biggest buyer of Chinas solar held high-level discussions on governmentpanels, purchasing 78 percent of all Chinese- subsidies that have mostly yielded frustration.made panels last year, according to IHS Mr De Gucht softened his tone this week,Global Insight. expressing hope that the solar case could act as a model to resolve other disputes. AskedThe new trade deal, which decrees a to reflect on his relations with member statesminimum price for Chinese panels and after the solar case, Mr De Gucht noteda maximum cap on annual shipments to that 28 governments would inevitably haveEurope, is viewed by Chinese companies different opinions, but said: If everybodyas preferable to the prospect of duties stays within his role . . . then we will have aaveraging 47 per cent. Nevertheless, it will strong trade policy.still limit their access to this market; the new In a not-so-subtlewarning to EUquota is roughly half the level of Chinas solar governments, he added: They should notshipments to Europe last year. engage in parallel discussions - be it withTrina Solar, one of Chinas largest China, or anybody else.photovoltaicproducers, summed up the mood when it said the settlement was not perfectbut still in the best interest of both sides.221'