WORLD China to battle protectionism - Global Times

WORLD

China to battle protectionism - Global Times

Global Times | Global Times

19:07, January 22, 2018

The Port of Rizhao, in East China's Shandong Province Photo: VCG

China should have two strings to its bow - both strengthening negotiations as well as preparing to fight back - when faced with rising protectionism in global trade, experts told the Global Times on Sunday.
In 2017, China became the country that faced the most anti-dumping and anti-subsidy investigations, according to a statement published by the Ministry of Commerce (MOFCOM) on Friday.
Last year, China encountered 75 trade remedy investigations involving trade worth a total of $11 billion from 21 countries and regions, the MOFCOM statement noted.
Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation, said that China has been the target of anti-dumping investigations for more than 20 years.
"With the current global environment of rising protectionism, I suspect that the situation will continue in the future," Bai told the Global Times on Sunday.
In a report on January 15, US media outlet CNBC quoted Tu Guangshao, vice chairman and president of China Investment Corporation (CIC), as saying that China is facing "more difficulties and challenges" related to global protectionism, as some countries and regions are making protectionist moves, some specifically targeting China.
Sang Baichuan, director of the Institute of International Business at the University of International Business and Economics, said that the US has "led" the countries that advocate as well as practice anti-globalization.
In 2017, the US launched 24 investigations aimed at China, involving trade worth $2.5 billion, the MOFCOM statement showed. The US government has also repeatedly complained about Sino-US trade relations in recent months, such as refusing to recognize China as a market economy and threatening to announce further trade remedy measures.
According to the MOFCOM statement, the investigations from overseas countries have targeted China's exports of steel, aluminum, tires and household electrical appliances.
Many exports, more complaints
According to Sang, China's gigantic trade scale will lead to more friction and complaints compared with countries that don't export or import that much.
China's trade surged by 11.4 percent on a yearly basis to $4.1 trillion in 2017, customs data showed on January 12.
"The application of the surrogate country approach in World Trade Organization (WTO) disputes - meaning using the costs of production in a third country, normally a more developed country, to calculate the value of products from China - has also resulted in false accusations of dumping of Chinese exports," Sang noted.
According to Sang, investigations do not always lead to sanctions, but they do increase the risk of a decline in trade of the products involved. China's trade of photovoltaic products with the US has declined since the US levied an anti-subsidy tax on China's photovoltaic product exports in mid-2017, Sang noted.
"On the other hand, it puts rising pressure on Chinese companies to upgrade and export products that are more expensive but with more added value. [This can] avoid anti-dumping investigations, because such investigations are usually targeted at low-cost products. So there's also a bright side of the issue," Sang told the Global Times.
Hard-line approach
Bai said that China should work to strengthen negotiations with its trade partners. "Communication should be the first option," Bai noted.
MOFCOM said in its statement that it has been actively searching for methods to ease the friction, such as government negotiations, industrial talks, legal defense and PR lobbying. Such methods have been effective in some cases, leading some overseas countries to take no further action after launching investigations.
MOFCOM has also taken measures such as expanding international communication and cooperation to cope with the rising protectionism, according to the statement.
But Bai said that the government should also consider a more hard-line approach. "If the atmosphere for cooperation is destroyed, we might be forced to fight back. For example, China has levied some anti-dumping and anti-subsidy taxes on US cars in the past. We should prepare to use such measures in the future," he said.

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