China hit out on Monday at the United States and the European Union for curbing Chinese textile exports, saying the restrictions were justified neither by trade law nor by statistics. Commerce Minister Bo Xilai said Washington and Brussels had failed to prove their domestic markets had been disrupted by an increase in Chinese exports since a 40-year-old system of quotas on developing countries' exports of textiles expired on January 1.
Bo said China was willing to hold talks, but he was scathing about the "double standards" of rich countries that flew the flag of free trade but rushed to throw up barriers when poor nations started to exploit their comparative advantage of cheap labour.
"The EU and the United States should spend more time on the development of high technology - Airbus or Boeing aeroplanes, and advanced modern machinery - rather than spending time quarrelling with us on issues like shirts, socks and trousers."
Bo was speaking hours after China said it would scrap export tariffs on 81 textile products, making good on its threat to roll back the taxes if the West imposed curbs on its goods.
The tit-for-tat move followed a formal request on Friday by the European Union for talks with China over surging shipments of T-shirts and flax yarn, which have fanned fears of widescale bankruptcies and lay-offs in the 25-member bloc.
China now has 15 days to limit this year's increase in exports of the two products to 7.5 percent over 2004 levels, otherwise the EU will enforce the limits itself.
Washington imposed similar quotas on Chinese-made trousers, underwear, shirts and other goods in mid-May.
Bo said the measures violated World Trade Organisation rules and discriminated against China. He also disputed the evidence marshalled by the two governments to justify the curbs.
"The EU and US imposed quotas on Chinese textiles based on primary data obtained in a short period of just three or four months and made a cursory decision. They are groundless and unscientific," Bo said. "In our opinion this move lacks legal grounding and therefore is incorrect."
IMMEDIATE RISK: The EU immediately rejected Beijing's charge.
"We have shown that not only is there a surge in imports from China but also ... that there is an immediate risk for (European) companies," European Commission spokeswoman Claude Veron-Reville said in Brussels.
In Europe, the flood of Chinese imports has crystallised fears that the EU is failing to protect jobs and was a background factor in French voters' rejection on Sunday of a new EU constitution.
But Bo said textiles were more important to China, where 19 million people depended on the industry for their living. Exports of $2.3 billion were at risk due to the US and EU curbs.
Against this background, he said China had no choice but to scale back the export taxes it had voluntarily introduced.
"Since the US and the EU have already decided to take quantitative restrictions against Chinese exports of textiles, how can the Chinese government possibly reimpose export duties on those products?" he asked.
EU figures show imports of Chinese T-shirts rose 187 percent in the first quarter of 2005, while imports of flax yarn, used to make linen cloth, rose 56 percent.
Bo said China's analysis of the market differed sharply.
He said that Chinese textile exports in the first four months of 2005 rose 18.4 percent from a year earlier to $31.2 billion.
Not only was this rise 5 percentage points smaller than the increase recorded in the same period of 2004, but it lagged the 35 percent jump in overall Chinese exports for January to April this year.
The row over textiles has added fuel to a debate over the value of the yuan, which has been pegged near 8.3 per dollar for a decade. Law-makers and manufacturers in the United States, as well as many independent economists, believe the peg undervalues the currency, giving China's exporters an unfair advantage.
Bo gave no clues as to Beijing's thinking on a shift in the currency, saying only that when the government decides it will consider China's needs and the stability of the global economy.
Comments
Comments are closed.