German Chancellor Angela Merkel said Thursday a dispute between Chinese and European solar panel makers should be solved via dialogue, not trade limits, as she started a visit to strengthen economic ties.

EU ProSun, a group of more than 20 European solar panel makers, has called on the European Commission to impose tariffs to punish its Chinese rivals who it suspects received Beijing's subsidies and sold goods below costs.

However, Merkel, speaking at a joint press conference with Chinese Premier Wen Jiabao, said that the German government was in favour of settling the dispute through dialogue and would try to convince the EU to do so.

"Protectionism cannot be the answer for certain difficulties, we have to try to solve existing problems by the way of talks, problems we have in the field of solar energy for instance," she told reporters.

"We should endeavour to do so because there is still time and we will discuss with our colleagues in the European Union that we should give it a try."

Chinese solar companies as well as the government have denied the dumping accusation and warned that a EU investigation into the case would risk undermining overall trade relations.

The companies have said that such a probe would "trigger a full scale trade war between Europe and China", which is a major market for European products including cars, aircraft, and luxury goods.

More than 60 percent of China's $35.8 billion of solar product exports went to the EU last year, they said, while China imported $7.5 billion-worth of European solar equipment and raw materials.

On the first day of her second visit to Beijing in just seven months, Merkel and Wen witnessed the signing of a $3.5-billion deal for China to buy 50 Airbus jets.