China defends trade policy

Beijing, February 15:

China said today its cheap goods had saved Americans hundreds of billions of dollars as it defended its trade practices amid fresh US charges the Asian giant does not follow global rules.

While there was no official government response to yesterday’s announcement from Washington that it would set up a task force to ensure China abides by trade laws, the state-run press carried articles in the nation’s defence. “The American people have enjoyed the cheap prices of made-in-China products,” Cheng Siwei, a senior official with the National People’s Congress, the parliament, said in comments carried by the Xinhua news agency, “These cheap products have helped save $600 billion for the country over the past 10 years. Products made in China facilitate American lives from when people wake up in the morning and to the time they go to bed at night.”

Cheng’s comments, reportedly made at a public forum in Beijing yesterday, came just ahead of a US announcement that a task force would be set up to deal with China’s alleged non-compliance with global trade rules.

“Despite three consecutive years of growing US exports to China, our bilateral trade relationship with China today lacks equity, durability and balance in the opportunities it provides,” US trade representative Rob Portman said, “The time has come to readjust our trade policy with respect to China.” He warned that Washington was prepared to pursue ‘legal options’ if China did not take steps to address outstanding issues such as ‘inadequate’ protection of intellectual property rights.

The actions from Washington come after the release of figures last week showing the US trade deficit with China jumped by 24.5 per cent to a record $202 billion in 2005. China also released figures on Monday showing its overall trade surplus had jumped by 46.7 per cent year-on-year in January to $9.49 billion. The continued increase in the surplus has put fresh pressure on China to further reform its currency regime.

Washington and other trading partners say the yuan is being kept artificially low so as to give Chinese exports an unfair advantage.