What China calls “natural competitive advantage” many of its trade partners refer to as outright protectionism. In recent weeks, these trade partners have become blunt in expressing their dissatisfaction with China’s “edge” in a number of sectors.
Unveiling the European Union Chamber of Commerce in China’s annual position paper, Joerg Wuttke, the chamber president, warned of growing economic nationalism in China. He noted that a lack of transparency was tainting chamber member companies’ otherwise optimistic outlook.
The Ministry of Commerce’s response was simple: China has a fair advantage in low-end manufacturing and labor-intensive sectors, so EU nations should focus on areas in which they excel, such as high tech.
Still, the EU has taken 12 anti-dumping actions against China in the last 12 months. It was suggested in September that the organization will extend tariffs on shoes from China and Vietnam into next year.
Meanwhile, the US is reportedly preparing a WTO complaint against China’s export restrictions on raw materials used in steel-making. The case would be that China artificially reduces domestic steel prices by imposing export quotas and taxes on raw materials.
The US also questioned the legality of China’s tax, subsidy and export rules for farm products. In a letter posted on the WTO website in late August, the US argued that loopholes in China’s business law exempted pork processors from taxes. The letter suggested China was doling out US$2.2 billion each year in premiums for Chinese pork producers.