Huang Minghai, director of the press office at the MOFCOM, said on August 20 that the ministry has accepted CADA's petition but has not decided to launch any probe.

Except for the apparent economic reasons, some also view the move as part of a series of responses to the EU's possible probe of China's solar panel exports. The United States and the EU have been aggressive in launching trade probes into Chinese goods amid the global financial crisis but China is learning to fight back, Zhou Shijian, a senior trade expert at Tsinghua University, told China Daily. "China is getting wiser and more mature in protecting its own commercial interests under the WTO framework," he said.

European solar companies recently asked the European Commission to probe Chinese exports to the EU.

China's wine complaint came soon after its four major solar companies, including New York-listed LDK Solar Co., asked the government to start anti-dumping and anti-subsidy probes into polysilicon exports from the EU on August 17.

Despite the tit-for-tat skirmishes between China and its major trade partners, analysts say full-scale trade wars are unlikely as no one will benefit, especially amid a fragile global economy.

Jonathan Holslag, Research Director at the Brussels Institute of Contemporary China Studies, said trade conflicts are inevitable but a spiral of retaliation is in no one's interests.

"It is time for China and the EU to sit down to hold candid and straightforward discussions on where we are and where we need to go," Holslag said.

The future

Whether the appeal is successful, it has a positive significance for China's domestic wine industry. If it is successful, it can ease the severe competition that homegrown brands are facing. If it fails, it will still mark huge progress for the country. China has gradually learned how to protect its legitimate rights by properly using WTO rules. Even if the appeal fails, it will be a warning for EU wine producers, said Jian Aihua, a research fellow for the food industry at CIConsulting, a Shenzhen-based industrial research institute.

"China's wine sector is at a starting stage," said Li Tang, Deputy Secretary General of the Guangdong Alcohol Industry Association (GAIA). "It's globally acknowledged that vines aged from 30 to 50 years old are the best for producing wine. While Chinese homegrown brands often use vines about 5 years old to produce wine because they can barely find any vines from 30 to 50 years old in the country."

Domestic brands are generally sold at a lower price. European low-end wine will devastate China's fledgling wine sector. But high-end wine imports can propel the development of the domestic wine industry. So we should consider giving the green light to high-end EU wine imports to benefit homegrown brands, said Zhu Danpeng, an expert in food marketing.

Some domestic brands import foreign substandard wine at a lower price and sell it in the Chinese market at a higher price by claiming it as foreign brands, said Wu Yong, an expert in the wine industry.

"What really matters is the quality of imported wine and CADA should do relevant investigation into this aspect. The quality of wine in the Chinese market should be guaranteed to enable sustainable development," said Wu.

"Even if we win the WTO complaint and the tariff on wine imports is raised, it's still a question whether domestic brands can win over the lost market territory because of their limited production capacity. Policymakers might as well start from controlling the quality of wine in the Chinese market. By regulating the lowest quality standard for wine imports, a healthier market can be created," said Xia Zhongbang, chief representative of Shanghai CWC Wine Co.

"I totally agree with CADA's petition. China has no subsidy for winemakers and homegrown brands have a high cost and a low profit margin. If the EU offers subsidies to its winemakers, it will be unfair for Chinese winemakers. This must be prohibited," said Chen Yong, secretary general of the wine division of the GAIA.

"However, even if we win the WTO complaint, the development of domestic wine products will still depend on their quality and competitiveness in the market. Domestic winemakers should have a higher standard for themselves to win over consumers' trust," he said.

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