More US, China trade friction predicted

Beijing (China Daily/ANN) - China and the United States will experience more trade friction in the high-end manufacturing sector, as Washington protects its domestic industries, officials said yesterday.

Friction will "surely increase" as China and the US both focus on high-end and emerging industries, including new energy and materials, Zhang Xiangchen, director for trade policy research at the Ministry of Commerce, said.

Another official from the ministry also said that a developing trend sees US protectionism shifting from traditional sectors to emerging ones.

"We can forecast that the US will intensify trade investigations against Chinese new-energy exports," said Yu Benlin, deputy director of the ministry's bureau of fair trade for imports and exports.

Both officials made the remarks on Sunday at a forum marking the opening of the Canton Fair in Guangzhou. The fair, also known as the China Import and Export Fair, is a barometer of the trade sector.

The US used to accuse China of giving unfair support to traditional exports such as steel and chemical products. But in the past two years Washington has launched a slew of trade investigations targeting China's new-energy products.

The US launched an investigation against China's new-energy policies in 2010 and then started anti-dumping and countervailing investigations against Chinese solar panels and wind towers over the following 16 months, Yu said. This affected exports worth about US$3 billion.

US protectionism hurts Chinese exporters and industries, Yu said.

The US, China's second-largest trade partner, has launched 73 trade investigations against China since 2007. This represents about 16 per cent of investigations brought against China by other countries, Yu said. Cases launched by the US covered a combined export value of about $10.3 billion.

In a fresh sign of rising trade protectionism, the US set up the Interagency Trade Enforcement Center in February to investigate what it called "unfair trade practices" from its major trading partners, including China, Yu said.

Trade investigations from the US sometimes prompted other nations to follow suit, Yu said. For example, when the US imposed anti-dumping duties on Chinese- coated paper in 2006, Brazil, Argentina and Thailand launched similar investigations, which "severely hurt Chinese exporters".

Disputes targeting China will become more frequent, Yu said.

William Zarit, minister counselor for commercial affairs at the US embassy in Beijing, said that the world's top two economies "need to build trust" to resolve friction, especially in high-end manufacturing.

Rising trade protectionism in China's major exporting destinations has dealt a hard blow to exporters already suffering from slowing global demand.

China reported GDP growth of 8.1 per cent in the first quarter, the slowest in almost three years as exports and domestic demand cooled, according to data issued on Friday by the National Bureau of Statistics. The government set a goal of 10 per cent growth in foreign trade this year.

Zhong Shan, deputy minister of commerce, called for supporting policies on Thursday to increase foreign trade while reducing exporters' burdens and improving the business environment.

COPYRIGHT: ASIA NEWS NETWORK

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