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Protectionism rising

(China Daily)
Updated: 2009-01-12 07:56

The Ministry of Commerce recently warned the threat of worldwide trade protectionism is rising and domestic exporters will likely to encounter more trade friction in 2009, says an online Guangming Daily story. The following is an excerpt:

Officials from the ministry's import and export department and representatives from the central bank said at a recent meeting that they will take measures to help the Chinese export industry ride out the storm.

China faced more than 70 anti-dumping cases from January to October last year. The EU passed a bill to impose punitive tariffs on Chinese-made screw nails and bolts last December. In the same month China lost an imported auto parts dispute and the US and Mexico requested anti-subsidy consultations with Beijing.

The US may shift toward protectionism after Obama takes office in January. The new government might advocate for the interests of workers and make narrowing the income gap and creating more jobs a policy priority over free trade, meaning tougher times for Chinese exports.

Analysts suggest three ways to settle China-US trade disputes. One is to reduce China's exports. The second is large-scale Chinese investment in the US and the last is the appreciation of yuan. But all three would be painful to implement. The first solution goes against WTO principle and even if China reduced its exports, other emerging economies would quickly fill the gap.

The measures taken by the US and European countries against the Chinese commodities to protect their own industries are potentially discriminative. They still do not recognize China as a market economy and insist on using a third country's standards to assess the production cost of Chinese exports, creating a great deal of arbitrariness and injustice. The US and the Europe are erecting trade barriers because of their suspicion of China and fear of market competition.

Chinese manufacturers have asked the government to appeal the case to the WTO and filed a lawsuit against the EU's unfair anti-dumping investigation in the case of Europe's punitive tariff on Chinese-made screw nails and bolts.

The government and the export industry have joined hands to deal with the situation, a manifestation of national capability to settle trade disputes.

(China Daily 01/12/2009 page2)