China a major target of trade protectionism: Official

By Ding Qingfen (China Daily)
Updated: 2009-07-31 06:49

China can expect to be a major target of rising trade protectionism - particularly from the United States and India - as the world struggles to recover from the global financial crisis, the Ministry of Commerce (MOFCOM) said Thursday.

The crisis has pushed trade protectionist cases to a historical high.

"The US is abusing trade protectionist tools to help its own industries tide over the economic slowdown. The loss for Chinese businesses is huge," said Zhou Xiaoyan, deputy director of the China Bureau of Fair Trade for Imports & Exports.

As a consequence, China will have an even harder time than it does now, encountering anti-dumping, anti-subsidy and special protection cases, officials said.

From last September to this June, the main World Trade Organization members, including the US and European nations, launched 77 cases worth $9.8 billion against China, increasing the number by 112 percent from a year earlier.

Zhou said, moreover, that due to the sharp competitiveness of Chinese products and to the advantage it has of cheap labor costs, sufficient funds and high-quality technology, the country will be targeted for some time.

The fair trade bureau, which is under MOFCOM, is responsible for dealing with trade protectionist cases.

Cases centering on green barriers, such as a carbon tariff measure that the US might launch against developing nations to protect its businesses, will be another hot trend.

China has especially been facing trade protectionist measures related to labor-intensive categories.

The US and India have been among the most aggressive in the rising wave of protectionism, officials said.

In April, for example, the US launched an anti-dumping and anti-subsidy investigation of oil-well steel tubing worth $3.2 billion, one of the largest ever for China.

And also in April, the US launched a case against Chinese tire makers valued at about $2.2 billion, also the largest such case for China.

The tire case, if approved by President Barack Obama in the fall, could spark a series of such cases by other nations.

"The US has been a leader in launching measures against China," said Wang Rongjun, a professor at the Institute of American Studies of the Chinese Academy of Social Sciences.

"The US," Wang said, "expects to transfer part of its economic slowdown to China, which is believed to be the quickest to recover."

China and the US are each other's second-largest trade partner. The two nations have stressed since late 2008 that they have been fighting trade protectionism, including at the China-US Strategic and Economic Dialogue held in Washington this week.

And in the case of India, it now has the most cases pending against China - from last September to June, it accounted for about 40 percent of the total. The cases cover a wide range of products, including textile, steel and chemicals.

"As newly emerging nations are being brought directly into competing against China, the upward trend will continue," Zhou said.

Despite falling exports, China still holds the largest share of labor-intensive products in the American and European markets, which threatens Indian businesses.

"Compared with the US, India is far from reasonable," said Fu Donghui, managing director of the Beijing Allbright Law Firm, which deals with anti-dumping and anti-subsidy cases.

"The Indians find any opportunity to challenge the Chinese. As long as there is any call from an Indian enterprise, the Indian government will launch an investigation, even without research."

The MOFCOM plans to focus on cases involving the US and India. "We expect to find out the reasons behind that growth and learn how to avoid them in the future," Zhou said.

For years, the Chinese government shied away from appealing to the WTO for help in battling trade protectionist measures.

"The government should have actively appealed to the WTO to prevent foreign nations from abusing its rights," Fu said.

China will now use the WTO tools to prevent its businesses from being hurt by foreign counterparts, but, nonetheless, it will be prudent, Zhou said.