Commentary: a rare call from the West for exports, but unwelcome to China

22:00, November 25, 2009      

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by Xinhua writers Ma Shukun, Liu Jie and Xu Xingtang

You should not restrict exports tous! For China, this is a rare call from the West, and it would be happy to respond positively if the goods are tyres, shoes, oil tubes or textiles. But they are not.

They are raw materials. China's restrictions on exports of raw materials prompted the United States, joined by EU and Mexico, to ask the World Trade Organization to set up a dispute settlement panel to rule on the measure in early November.

The countries and EU claimed the restraints distorted competition and increased global prices, giving Chinese companies an unfair advantage over foreign competitors.

The raw materials included bauxite, coke, fluorspar, magnesium, manganese, silicon metal, silicon carbide, yellow phosphorus and zinc, which are used in steel, aluminum and chemical industries, and their production usually causes heavy pollution.

The Chinese government rejected the request to set up the panel last week, stressing that the constraint aimed at environmental protection and conservation of exhaustible natural resources.

Here we put up two questions, among many others, to ask: how could it be that the West asks China to cut down gas emissions on the one hand while blames it for restricting export of highly polluting products on the other? China is not rich in underground reserves, how come when you close your own mines but ask China to produce?

China has been trying to curb overproduction of raw materials and pollution for years to build an environment-friendly and resource efficient society. According to the 11th five-year plan (2006-2010), the government ordered the control of exports of some materials that feature "high energy consumption, high pollution."

For example, China is the largest coke exporter in the world with exports volume taking up 60 percent of the global coke trade.

But producing coke was very polluting, said Wang Ling, analyst with industry information provider Umetal based in Beijing, citing Linfen, a city in the country's coal-rich Shanxi Province as an example. The city had been among the most polluted cities in the world for years because of coal and coke production, she said.

Being aware of the price it had paid for years of massive coke production and exports, the government decided to levy a 5-percentexport tariff on coke in 2006 and raised to 40 percent in 2008 in an attempt to cut pollution, she said.

Zhang Junsheng, an expert on international trade with the University of International Business and Economics, said pollution in China would become graver if the government didn't take resolute steps to curb exploitation of raw materials. It would also slow the global steps of emission cuts.

President Hu Jintao in September told global leaders at the United Nations climate change summit that China would step up efforts to develop a green economy, a low-carbon economy and a circular economy. He promised that the country would endeavor to cut carbon dioxide emissions per unit of gross domestic product by a "notable margin" by 2020 from the 2005 level.

The government is also pressed to deliver greenhouse gas emission targets at the coming Copenhagen global warming summit in December.

While urging more efforts from China on emission cuts, the United States and EU are filing complaints over China's export policy.

EU Trade Commissioner Catherine Ashton said earlier this month that China's restrictions on raw materials made conditions for companies in EU even more difficult in this economic climate.

Wang Ling said companies in developed countries preferred to import coke from developing countries like China as the cost of production in developed countries is too high for environmental factors. They were shipping their emissions offshore, she said.

The United States and EU were seeking cheaper raw materials for production as the world economy showed signs of recovery, she said.

They have been trying for years to persuade China to scrap tariffs imposed on the raw materials or to expand export quotas to increase cheaper materials to their own interests.

China now deeply concerns about the environment issue. However, the West played a role in boosting China's emissions by using it as a cheap source of goods.

China is not the only country that limits production and exports of polluting materials.

For environmental purposes and their own conservation of materials, developed countries kept their reserves of natural resources barely intact or shut production of raw materials while rely on exports from developing countries to meet its growing needs.

About half of oil consumption in the United States, the world's largest oil consumer, came from exports from other countries because the country constrained domestic oil production for strategic and environmental reasons.

The United States also called a halt to mining at one of the world's largest and richest rare earth deposits at Molycorp Minerals' facility in Mountain Pass, California, in 2001 while craved for rare earth exports from China.

Japan is dependent on coal exports because the country shut down all its coal mines for environmental protection since the 1960s but one in operation in Hokkaido to preserve technologies. Domestic coal output stood at only 600,000 tonnes in 2007, far less from the record 50 million tonnes in the 1950s.

Now nations are developing green economy and China has to take the issue really seriously, Zhang said.

The dispute on China's raw material export is not over yet. But before raising the question to the WTO for the second time, the United States, the EU and Mexico need to make their claims more reasonable and more justified.

Source: Xinhua
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