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China growls at US over textiles

China's Vice Premier Wu Yi (吳儀) stoked a swirling trade row with the US yesterday, attacking American limits on Chinese textile exports for impairing the rights of Chinese enterprises.

Wu said Beijing was "resolutely" opposed to such politicizing of trade issues and called for a negotiated settlement.

The vice premier's comments in Hong Kong came amid US and EU concerns over a huge jump in Chinese garment exports following the end of a global textile quota system on Jan. 1.

Although the EU last week struck a deal with China to ease the surge, the US has slapped sanctions on certain types of imports from China.

Wu said this was unfair as China had imposed export duties on textile exports as well as other measures to stem the flood since the quota system ended.

"Recently the United States has limited some of China's textile exports. This impaired the rights and interests of Chinese enterprises who enjoy the fruits of textile trade integration," she told international delegates at an economic forum in Hong Kong.

Although trade friction was "natural," Wu said she was strongly opposed to making political capital from it.

"The key is how to handle these frictions. We are resolutely opposed to easily applying restrictions or sanctions, let alone politicizing economic and trade issues," she said.

Wu said the agreement signed last week between the EU and China showed such conflicts could be dealt with through dialogue, consultation and "mutual respect."

After a decades-old global quota system was abolished on Jan. 1, China imposed duties of between 2 percent and 4 percent on 148 types of textile goods to limit the impact on its global trading partners.

But they appear to have had little impact. China's textile exports jumped 29 percent overall in the first three months of the year, and pressure has been steadily building on Beijing to do more to stem the flood.

While Washington has already set limits on seven types of Chinese textile shipments, that dispute has also been fueled by concerns in the US that China's currency is undervalued, giving it an unfair advantage on the global market.

Although the European Commission had taken action only against T-shirts and flax yarn, it was seeking a blanket agreement covering other categories of textiles still being investigated.
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