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China suffers more trade frictions

By Mo Hong'e (Xinhua)

14:03, March 26, 2012

BEIJING, March 26 (Xinhuanet) -- Chinese exporters are facing more and more trade frictions under the global sluggish economic recovery and surging protectionism sentiment.

The world’s second largest importer has been a country suffering the most trade frictions for 17 consecutive years, said Zhong Shan, vice minister of Commerce of China at a meeting on Friday.

Trade frictions intensified at all levels

The form of trade frictions has been changing and the industries involved have been increasing, said Zhong Shan, adding that more and more countries are joining the team complaining against China.

Trade protection measures against China also take on various forms.

Some countries blocked imports from China through technical barriers such as citing safety and environmental standards, while others imposed complex customs and authentication procedures, an official with the Ministry of Commerce’s Bureau of Fair Trade for Imports and Exports said on the condition of anonymity.

The number of trade frictions increased dramatically recently for China, which has suffered eight so far this year, with a total of 2.28 billion U.S. dollars involved, 80 percent higher than last year, Zhong said.

Statistics of the Global Trade Alert showed that exports of China have suffered 100 trade protection measures in the past 12 months, making the country the biggest victim of trade protectionism.

Statistics also showed that more than 70 percent of global anti-subsidy investigations are against China.

Besides the rising complaints as a whole, industries involved also expanded.

Since the beginning of December 2011, the United States has taken measures to block China’s new energy to enter into the international market so as to defend its hegemony in this field. Meanwhile, it together with the European Union and Japan filed trade complaints to force China to increase rare earth exports.

The United States, once the largest supplier of rare earth metals, allowed its mining industry to decay many years ago because of environmental concerns and market changes. It shut down the Mountain Pass rare earth mine, the largest known deposit outside China, in 2002 and turned to imports to maintain its rare earth supplies.

It is known that of all the unveiled 100 million tons of rare earth reserves globally, the United States owned 13 million tons, the third largest.

Abundant in the resources, it forces other countries to export. It is self-evident that this developed nation wants China to continue reliance on resources export to maintain its growth in the unfair trade frame and advance slowly following the old growth model, experts explained.

On one hand, manufactured products from China found it difficult to sell abroad, while on the other, its resources export was being forced to increase. Behind the seemingly-contradictory phenomenon is the fact that the developed economies aim to maintain their long-time, egoist ruling position under the current international economic order, experts analyzed.

Except for the changes of forms and increased numbers of industries involved, China has also seen more and more developed economies intensify trade protectionism.

The United States, China’s second-largest trade partner, has increased its accusation against China recently.

The Obama administration last month set up an independent unit, the Interagency Trade Enforcement Center, to probe alleged unfair trade practices of its main partners, including China.

U.S. lawmakers also passed a bill imposing anti-subsidy duties on non-market economy goods on March 13.

On March 20, the Obama administration announced that it would impose duties of 2.9 to 4.7 percent on Chinese solar cells and panels.

Along with the United States, trade frictions between China and the EU, China's largest trade partner, have also intensified.

The European Union, Japan and the United States on March 13 teamed up to file trade complaints with the WTO over China’s rare earth export quotas, saying the restriction has limited other countries’ access to those minerals.

Major reasons behind

Experts agreed that slow recovery of the global economy is the major reason behind the trade protection measures.

“The slow recovery of the economy and high unemployment in the U.S. are mainly responsible for the recent surge of trade protection measures against China,” said Zhou Shijian, a senior trade expert from the Center for China-U.S. Relations at the Tsinghua University.

“Amid sluggish economic conditions caused by the financial crisis, the U.S. maintained an unemployment rate above 7 percent (from December 2008 to February 2012). Also, it's easy to target China during a presidential election year,” Zhou said.

As its presidential election approaches, trade protection measures from the U.S. “will be very frequent in the short term,” said Zhang Yongjun, deputy research director at the China Center for International Economic Exchanges, a government think tank on March 21.

“While the eurozone economy is still blurred, China has to be highly alert to the new tendency toward trade protectionism in the region,” said Li Gang, a researcher studying European economic issues at the Chinese Academy of International Trade and Economic Cooperation

“The EU will be more aggressive in protecting its own business interests by targeting China,” Li said.

“Despite the fairly good foundation, economic and trade relations will be twisted and bumpy this year,” Li warned.

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