China Says U.S. Trade Moves Wrong

Thursday, August 23rd 2007, 7:37 am

By: News On 6

BEIJING (AP) _ China accused the United States on Thursday of being an overly protectionist and uncooperative trading partner and urged it to loosen its high technology export controls if it wants to bring down its trade deficit with Beijing.

The United States reported a trade deficit of $235 billion with China last year, a figure that is expected to grow.

``Recently, the U.S. side has taken a series of measures that betray a strong trade protectionist sentiment,'' said Assistant Commerce Minister Wang Chao at a press briefing.

Most galling, the ministry said, was a recent U.S. policy shift that reversed 23 years of U.S. trade policy by treating China, which is classified as a nonmarket economy, in the same way other U.S. trading partners are treated in disputes involving government subsidies.

U.S. companies always have been allowed to file antidumping cases, seeking penalty tariffs on the grounds that the Chinese products were being sold in the United States below cost.

But since March, they also have been able to seek penalty tariffs, known as countervailing duties, on the basis of improper government subsidies _ everything from favorable loans from state-owned Chinese banks to direct government support.

Since November, the U.S. has launched antidumping investigations against five types of Chinese imports _ glossy paper, pipes and tubes, welded steel pipes, laminated woven sacks and off-the-road tires.

``What the China government opposes the most is the fact that the U.S. ... not only breached its precedents but also abandoned its usual practice of the past 23 years,'' said Vice Commerce Minister Gao Hucheng.

He said the five investigations affected 500 Chinese enterprises and $860 million in exports.

China-U.S. trade has ballooned over the last three decades and China is expected to soon overtake Japan as the United State's third-largest export market. However, the relationship is dogged by a host of disputes, including the pace of Beijing's currency reform, piracy and product safety.

Trade frictions and related political disputes, including human rights and environmental issues, are likely to be exacerbated in the run up to next year's U.S. presidential campaign as candidates seek to prove their mettle by taking a firm stance on Beijing.

Wang complained that the U.S. side had also ``not accommodated some of China's requests for consultations,'' but he did not elaborate. He said more consultations and exchanges were needed to handle the antidumping and other trade disputes.

``It is very natural for frictions to arise, however how we address those frictions is a critical issue,'' he said.

A statement from the ministry cataloguing other ``discordant notes'' in the trade relationship pointed to Washington's alleged exaggeration of safety concerns about Chinese-made products, 28 China-related trade and economic bills brought before Congress, and recently expanded U.S. export controls on high technology equipment.

For its part, Washington complains that Beijing does not do enough to protect the intellectual property rights of American manufacturers and has failed to guarantee the quality of its exports.

The U.S. has recalled and restricted a number of questionable Chinese imports in recent months, including toys, ingredients for pet food, tires and toothpaste, sparking what Beijing says is irrational panic among consumers.

Washington also says a major reason for China's multibillion-dollar trade surplus is that the country's currency, the yuan, is kept undervalued, giving its exporters an unfair advantage.

Wang did not address the currency concerns but said one way to lower the deficit would be to allow China to buy more American-made high technology.

U.S. rules announced in June are meant to deny China's military access to technology that might aid its modernization. The rules impose new end-use controls on goods including lasers, telecommunications equipment and navigation systems.

``One of the reasons for the China-US trade imbalance are the American restrictions of exports,'' Wang said. ``Even when we want to buy products from the United States, we can't buy what we want.''

American officials have rejected Beijing's claim that export controls add to the U.S. deficit. They say goods that China is barred from buying under rules on weapons sales and ``dual use'' goods such as supercomputers with possible military applications would be worth as little as 1 percent of the U.S. trade gap with China.

The commerce ministry also praised the rapid expansion of trade relations between the two sides, noting in its statement that since 1979 bilateral trade grew from $2.5 billion to $262.7 billion last year and that the cooperation had brought tangible benefits to both sides.