Rejection of speedy change may spark more trade disputes
( 2003-09-05 09:56) (China Daily HK Edition)
Beijing's rejection of calls for speedy revaluation of its currency is very likely to trigger more trade disputes with the United States and Japan, forecast trade experts and economic researchers.
They warned that Washington and Tokyo, which have led the pressure for a yuan appreciation, may launch more anti-dumping charges and trade sanctions against Chinese products.
The warning came after the Chinese Government expressed its firm determination to defend the stability of the yuan. The position was made clear to US Treasury Secretary John Snow, who ended his two-day Chinese visit on Wednesday.
China's insistence on a stable yuan is set to kill widespread speculation that Beijing may give in to international pressure to allow the yuan to appreciate. The rumour encouraged an estimated influx of US$30 billion in hot money into the country.
But trade experts cautioned that the US failure to make progress in talks with Beijing may propel it, along with Japan, into resorting to trade measures.
The two countries might attempt to politicize the yuan revaluation issue to launch more anti-dumping investigations against Chinese goods, said Wang Xuehua, an expert on World Trade Organization studies with the China National Association of Lawyers.
"Sometimes, the political factor plays a key role (in trade disputes between countries)," he said.
In an ominous sign of the possibility, US manufacturers have threatened to file a formal trade complaint that could lead to trade sanctions against Chinese goods.
A coalition of major US businesses and labour groups, including the National Association of Manufacturers, expressed disappointment with Snow's talks in Beijing and said it may accelerate efforts to force China to float the yuan.
The coalition has threatened to file a so-called Section 301 complaint calling on the US Trade Representative's Office to investigate whether China's intervention in currency markets amounts to an unfair trade practice.
China has already become the world's biggest victim of anti-dumping and safeguard measures, according to an earlier government report.
It said 33 countries and regions had launched a total of 544 cases of anti-dumping and safeguard-measure investigations against Chinese commodities worth US$16 billion by the end of October last year.
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