The trade dispute between China and the United States is
unlikely to lead to trade war as the two countries share
overlapping interests, said Li Xiangyang, the Deputy Director of
the Institute of World Economics and Politics (IWEP) of Chinese
Academy of Social Sciences.
The US government Friday filed a complaint with the World Trade
Organization (WTO) in Geneva, alleging that China is providing
companies with improper subsidies to help its companies compete in
world markets.
US Trade Representative Susan Schwab said China's government
support for steel, wood, information technology and other
industries hurt US firms and prevent them from competing fairly but
did not elaborate.
This is the fourth time that Washington complained to the WTO
about China's trade policies. The previous three related to China's
auto parts import regulation, brown paper and semi-conductor
sectors.
"There is no new or strong evidence that could prove China has
launched improper trade policies", said Li. "We hope both sides
could settle the dispute through a consultation."
The United States tried to team up with other powers including
Japan and the European Union in filing a WTO complaint against
China over its industrial subsidies before, but invitations were
not accepted.
The United States has asked to open a consultation process which
is the first stage of the dispute settlement procedure of the world
trade body at WTO over China's industrial subsidies.
The consultation will usually last two months. If it fails, a
WTO panel of experts will be formed to handle the dispute.
"The government should brace for the upcoming consultation with
US and figure out how to settle trade disputes under WTO
multilateral regulations", said Jin Bosheng, an expert from the
Chinese Academy of International trade and Economic
Cooperation.
"As the world's third largest trader, China needs to understand
how to win the battle under the multilateral rules", said Jin.
"My judgment is that the complaint is probably a reflection of
the power struggle inside the US government," said Li
Xiangyang.
The Bush administration might use this complaint to cater to the
trade protectionists of Congress in exchange for the renewal of his
fast-track trade promotion authority which was set to expire on
July 1, in an attempt to rekindle the stalled Doha Round of trade
liberalization talks, he said.
America's free trade agreements negotiations with Malaysia,
Thailand and the Republic of Korea may also count on the extension
of the trade promotion authority, Li added.
Wang Yong, director of the Political and Economic Research
Center of the Beijing University, said that China should caution
against aggravated trade protectionist force in the United
States.
"A worry is that Bush administration might choose to sacrifice
its trade relationship with China," he said.
While China's trade surplus surged to record high US$177.5
billion, the country was subject to 86 anti-dumping and trade
protection probes in 2006, a year-on-year increase of 37
percent.
The investigations were launched by 25 countries and regions,
involving a combined value of US$2.05 billion, and 48 cases reached
adjudication in 2006, of which 21 ended without taking
measures.
(Xinhua News Agency February 7, 2007)
