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China brands US ‘protectionist’
Friday, 06 November 2009 00:00

China on Friday accused the US of protectionist and biased trade policies less than a week before President Barack Obama’s first visit to Beijing.

In a stinging rebuke to Washington, China’s commerce ministry promised to take measures to protect its domestic industry after the US slapped anti-dumping duties on $2.6bn of Chinese steel pipe imports. The duties are part of a growing roster of trade conflicts between the two countries, despite a high-level meeting last week in China aimed at reducing tensions.

“China resolutely opposes such protectionist practices and will take steps to protect the interests of our domestic industries,” Yao Jian, ministry spokesman, said on its website.

“The US should give objective consideration to the fact that the fundamental problem of the US industries in question is the fall of demand brought about by the financial crisis.”

The decision by the US Commerce Department, which imposed tariffs of up to 99 per cent on some Chinese steel pipes, follows a move earlier in the week by the US, European Union and Mexico to file a formal complaint at the World Trade Organization against Beijing’s restrictions on exports of specialized raw materials. Last month the Obama administration levied 35 per cent tariffs on tires made in China.

In response, the Chinese have opened probes into US exports of poultry on grounds of safety and into cars and car parts because of the state aid those industries have received.

Lawyers in Beijing say that the government has raised the issue of state aid to push its case for China to be awarded market economy status, which would make it harder for the US to bring anti-dumping cases against Chinese products and has long been a sore issue in Beijing. “They are trying to show that every country’s markets have imperfections,” said a US trade lawyer in Beijing.

In its statement on Friday, the Chinese commerce ministry said: “We hope that the US will set aside its biases and act as quickly as possible to recognize China as a market economy.” At the US-China meeting in Hangzhou last week, Gary Locke, the US Commerce secretary, promised to set up a panel to consider the issue.

“We should be aware of this kind of trend of western countries using the WTO and free trade as an excuse to challenge us,” said Mei Xinyu, a researcher at a think tank connected to China’s commerce ministry. “Western countries adjust their own trade policies depending on the market needs of their own interest group.”

At the meeting last week, China agreed to allow US imports of pork and to relax restrictions on importing wind power components. However, Paulo Soares, head of the Chinese operations of Suzlon, the Indian wind power group, said the new rules would make little difference. “The big companies already have installed manufacturing operations and established supply chains, so it is not going to change anything,” he said.

FT.com (Financial Times), 11/6/2009