*NEWS*CHINA TRIES TO AVERT CLASH WITH USA

[Anonymous]

China Tries to Avert Export Clash With U.S.

BEIJING (May 05) – China on Friday announced new tariffs
that it hopes will hold down surging textile exports, trying to avert a trade
war with the United States and Europe after Washington imposed import
quotas.

Beijing took the step despite accusing Washington of
treating China unfairly and saying earlier U.S. and European market barriers
were to blame for the surge in Chinese textile imports after a worldwide quota
system expired on Jan. 1.

The new measure takes effect June 1 and will raise tariffs
on 74 types of goods by up to 400 percent, the official Xinhua News Agency said.
It didn’t give details, but said China now charges tariffs of 2 to 4 percent on
148 categories of textile and clothing exports. That would mean the new tariffs
could range from 10 to 20 percent.

French Industry Minister Patrick Devedjian, who was
visiting Beijing, welcomed the move, saying, “there’s no doubt it’s the right
direction.”

In Washington, Commerce Department spokesman Dan Nelson
didn’t offer much insight into U.S. thoughts on China’s action. He said there
will be “an opportunity for discussion” about China’s tariffs announcement when
the two countries consult in late May over recent decisions by the U.S. to
impose limits on certain types of Chinese clothing shipped to America.

The Bush administration was in the process of reviewing
China’s list of textile exports that it will boost tariffs on, a government
official said.

Textiles are one of a series of disputes that have strained
relations between China and its trading partners. The United States, EU and
other governments also are pressing Beijing to raise the state-set value of its
currency and to stamp out rampant product piracy.

Chinese textile producers will have to “make sacrifices,”
said Sun Huaibin, a spokesman for the official China Textile Industry Council,
quoted by the official Xinhua News Agency.

“China is a responsible country, and it is for the purpose
of helping establish a new world textile trade order and ease the trade friction
that the government made the concession,” Sun said.

The American Chamber of Commerce in Beijing welcomed the
move.

“I think this is going to have a real impact,” said Charles
M. Martin, the group’s president.

The tariffs announced Friday are the second Chinese effort
to hold down exports of low-priced textiles that U.S. and European governments
say are threatening their producers with bankruptcy.

China imposed a 1.3 percent export tax on textiles in
December on the eve of the end of global quotas, but American officials said
that was too low to make a difference.

The order by China’s Customs Tariff Commission also cuts
the tax for knitted garment accessories and three varieties of briefs and shorts
will be reduced, Xinhua said.

U.S. imports of low-priced textiles from China this year
are running at a rate 54 percent above the same period of 2004, according to the
U.S. Commerce Department.

Measures imposed Wednesday by the United States limit
growth of Chinese imports to 7.5 percent a year. They apply to men’s and boy’s
cotton and man-made fiber shirts, man-made fiber trousers, man-made fiber knit
shirts and blouses, and combed cotton yarn. On May 13, Washington imposed
similar restrictions on Chinese-made cotton trousers, cotton knit shirts and
underwear.

Chinese Commerce Minister Bo Xilai on Wednesday called
those measures unfair. Bo said the surge in purchases of Chinese textiles was
due in part to the failure of the United States and Europe to carry out promises
to open markets before the worldwide quotas ended.

The EU opened an investigation last month after reporting
that imports of some Chinese textiles have risen by up to 534 percent since Jan.
1. The outcome could mean that the bloc re-imposes some quotas.

EU trade chief Peter Mandelson said this week that European
producers need “a limited but no less important breathing space.” He said
production and employment have plummeted in the T-shirt and flax yarn industries
this year.

China’s Commerce Ministry on Thursday expressed “firm
opposition and strong displeasure” to the new U.S. quotas and said it might
respond by taking action through the World Trade Organization.

[Author]

May 24, 2005 at 12:54 PM