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China Sees Itself Subject To Increasing Trade Friction

by Mary Swire,, Hong Kong

11 April 2013

In response to the increasing trade friction that Chinese products are encountering in foreign markets, the Ministry of Commerce (MOF) has pointed out, during a recent special press conference, the extent of that friction in 2012 and how it intends to respond as it develops further in the future.

Many of the growing problems experienced by China since its accession to the World Trade Organization (WTO) in December 2001 have been put down to the extremely rapid growth in its economy and foreign trade volumes.

The MOC noted that, in the ten years from 2002 to 2012, China has faced 842 cases filed by foreign countries, involving exports totaling USD73.6bn. China was also subjected to 77 trade remedy probes started by 21 countries last year and in the first three months of 2013, involving exports totaling USD27.7bn. China's Permanent Representative at the WTO, Yi Xiaozhun, has calculated that over half of the world's anti-subsidy countervailing duties are currently directed at Chinese products.

Early last month, Yi advised the Chinese Government that there is a likelihood that it will be involved in trade disputes, particularly with the United States and the European Union (EU), which will increase in both number and intensity in the future. He added that the Government should be aware of the Chinese industries that will come under attack.

As has already been noted by the MOF, US and EU action has evolved from imposing single measures against Chinese imports to, in many cases, adopting both anti-dumping and countervailing duties, which it believes to be in violation of WTO rules against a non-market economy, such as China.

The MOC has said that it sees itself as fighting a tendency, led by the US, towards global trade protectionism following the global financial and economic crisis, and this view was repeated at the special press conference. It was confirmed that China will support the WTO in any action taken to inhibit the proliferation of countries that are abusing the use of trade remedy tariffs in a form of trade protectionism.

It is also ready to defend the legitimate rights and interests of Chinese exporters in the WTO against the harsher measures that are expected to be taken against their products in the future. The MOC, it was said, stands for the proper settlement of trade disputes through dialogue and consultation, and countries should exercise caution and restraint before using trade remedy measures.

In the meantime, the MOC confirmed that it would continue to promote trade and investment liberalization through trade treaties, at the same time as deepening domestic reforms to enhance the competitiveness of China's export enterprises and products and promote the balanced development of both its import and export trade.

TAGS: tax | business | tariffs | anti-dumping | World Trade Organisation (WTO) | trade treaty | China | agreements | trade disputes | United States | import duty | trade | European Union (EU) | Europe

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