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China bristles at new US import quotas on textiles

China said yesterday it firmly opposed a US move to slap new import quotas on Chinese clothing and hinted it could take the issue up with the WTO.

"The Chinese government expresses deep regret and firmly opposes this decision," the Commerce Ministry said on its Web site.

Beijing reserved the right to protect its interests through the world trade body it joined in late 2001, it said. It did not elaborate.

The Bush administration said on Tuesday it would impose new import quotas on Chinese clothing, opening a new line of attack against Beijing's trade policies.

Fears Washington might be shifting toward more protectionist policies pushed the dollar to record lows against the euro overnight.

China's shares staged a moderate technical rebound yesterday morning, with the quotas having no immediate impact, brokers said.

US manufacturers have accused China of pumping up its trade surplus with the US -- over US$100 billion -- by keeping the yuan unfairly low, leading to job losses in US factories.

The Commerce Ministry made no mention of possible retaliation despite calls for action by local business groups.

Chinese businesses still trying to work out likely damage to their bottom line said the government should do something.

"I think we should react somehow and call on the government to do something," Shi Jianwei, executive vice president of the China Cotton Association, said.

"This will reduce our exports," said Shi, who is also director of China's Cotton and Jute Bureau.

Next year's presidential elections in the US appeared to be the main motivation behind Tuesday's announcement, he said.

Another association representing textile exporters, the China Chamber of Commerce for Import and Export of Textiles, said the move would "ruin the fundamental interest of Chinese textile exporters, as well as the American consumers and traders."

It did not give estimates for likely economic losses to China's textile industry, which it said employed more than 15 million people directly and over 100 million indirectly.

Highlighting China's growing imports from countries like the US to keep its economy booming, it said that, from January to September, imports of US fabric and textile raw materials and products had risen 148 percent over the previous year to US$787 million.
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