Mounting trade frictions take heavy toll

The global economic gloom and mounting trade frictions between China and the US are taking a heavy toll on Chinese manufacturers who are seeing a dramatic decline in orders from overseas, traders and officials said yesterday at a trade show in Guangzhou.

"Due to the sluggish demand from the US and European countries and increasing trade frictions, overseas orders, which accounted for 90 percent of our sales previously, have dropped greatly. Sales in the first quarter amounted to just $160,000, almost 40 percent lower than last year," Liao Jinlong, a sales manager at Foshan Andy Electrical Appliance Co, yesterday told the Global Times at the China Import and Export Fair, also known as the Canton Fair.

"Although the preliminary ruling by the US authorities on imposing 3.61 percent countervailing duties on our company's solar panels have limited impact, we are awaiting another ruling on anti-dumping duty, which if levied would have a bigger impact on the sales," said Chen Zhuo, a member of the General Council at Yingli Green Energy, also attending the fair.

Yingli is one of the companies involved in an ongoing case in which Chinese solar panel companies are being investigated for allegedly dumping their products, after the US decided last month to impose countervailing duties on solar panel imports from China.

Trade frictions between China and the US have been on course to intensify in recent months and a new trend sees US protectionism shifting from traditional sectors to emerging ones, officials at the fair said Sunday.

China's foreign trade will face many challenges this year including rising trade frictions, declining demand from Europe and the US and international strategic pressure, said Yu Benlin, deputy director of the bureau of fair trade for imports and exports at the Ministry of Commerce.

The US has moved from countervailing duty probes in the past to investigating unfair pricing and subsidies, effectively doubling its penalties. Trade investigations against Chinese new energy exports were also expected to intensify, he said.

In the latest trade dispute, the US Commerce Department determined Friday the US industry was "materially injured" by imported stainless steel sinks from China. This allowed it to continue its investigations into the imports of these products.

The probes, started on March 22 by the US Commerce Department, intend to impose anti-dumping duties ranging from 22.81 to 76.53 percent and countervailing duties at above 2 percent.

"The decline in foreign orders shows that China's foreign trade is still very sensitive to the international market environment," said Bai Ming, an official with the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce.

"We should further adjust the export market structure and expand trade with other overseas markets to counter the risks from focusing on one particular market," Bai said.

China's imports and exports expanded 7.3 percent from a year ago to reach $859.37 billion in the first quarter, the slowest growth since the fourth quarter of 2009.