China took a tough line on Saturday in trade talks with US officials on its surging textile exports, signalling no quick breakthrough in a row that threatens to spill over into the diplomatic arena. Vice Premier Wu Yi, who oversees trade, said emergency import curbs the Bush administration had slapped on trousers, shirts, underwear and cotton yarn from China were hurting an industry that employs 19 million people.
"The restrictions implemented by the US have severely impacted China's textile production," the official Xinhua news agency quoted Wu as saying.
"If this cannot be handled well it will severely affect the course of bilateral economic relations and trade," she said.
US Commerce Secretary Carlos Gutierrez said he held a "good meeting" with his Chinese counterpart Bo Xilai, but added that China had to understand the heat he was feeling at home.
"I don't believe there is a full appreciation in China for the level of political pressure that we face with respect to our relationship," he told reporters.
Gutierrez, near the end of a three-day visit, was later joined by US Trade Representative Rob Portman for his meeting with Wu, who hinted the onus was on Washington to resolve the problem.
"The US side should fully understand the seriousness of this issue and help promote a proper resolution," she said.
US imports of clothing from China have surged since a global quota regime ended on January 1, prompting Washington to impose the emergency curbs.
China says the move, along with similar actions by the European Union, is unjustified and violates World Trade Organisation rules.
Despite Wu's tough remarks, Bo indicated Beijing was keen to resolve the issue without a trade war.
"Sino-US trade witnessed such great progress in the last 26 or 27 years and we two countries should have the capability to properly deal with the textile trade issue and other questions," Xinhua quoted Bo as saying after the 45-minute meeting.
"China has become the third-largest trade partner of the United States and it's natural for some problems to emerge ... We exchanged our points on the textile issue frankly," he said.
Nyka Alexander of Scotiabank Group in Toronto said Washington would be wary of pushing too hard because it needed China's help on other issues, such as North Korea. But Beijing also stood to lose by taking too hard a line.
"The level of tensions in the present situation seems to suggest that China may have to make a conciliatory approach ... in order to improve relations with its major trading partners," Alexander said in a note to clients.
Gutierrez has signalled Washington is willing to negotiate with Beijing on the issue, and said the curbs were to give US textile makers time to adjust to the end of the quota system.
China exported $10 billion worth of clothing to the United States in 2004, a figure Washington says will rise this year.
The flood of cheap clothes has bolstered critics who say China is keeping the value of its currency, pegged near 8.28 yuan to the dollar, too low, giving its exports an unfair advantage.
Textiles are not the only bone of contention in US-Chinese trade relations. Gutierrez said earlier this week it was the global trade in fake and pirated goods, which the US Chamber of Commerce says costs the American economy $250 billion each year, that was the top issue bedevilling trade ties.
"Intellectual property rights violations are a crime and we don't believe we should be negotiating crimes with our trading partners," he told business officials in Beijing.
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