China faces trade friction with developing markets

12/16/16

Permalink 10:23:54 am, by dacare, 652 words, 422 views   English (US)
Categories: News of China

China faces trade friction with developing markets

Lack of differentiated competition amid global trade downturn to blame: experts

Trade frictions between China and other developing markets over almost everything from home appliances to chemicals are increasing, a heating up in competition that comes amid a downturn in global trade.

Some of the latest disputes were initiated by Argentina, which opened up five anti-dumping probes against Chinese imports, including on steel pipes, food processing machines and dishwashers, on December 7, according to trade alerts issued by China's Ministry of Commerce (MOFCOM).

Such "intensive" investigations aroused attention in China, Wang Hejun, director of Trade Remedy and Investigation Bureau with the MOFCOM, said in a press release on Wednesday.

According to the press release, China will thoroughly defend the rights of its firms and expects Argentina to strictly follow WTO rules.

So far this year, Argentina has launched 11 anti-dumping probes against imports from China, according to the MOFCOM.

China is Argentina's second-largest trade partner with $11.8 billion worth of goods exported to the Latin American nation in 2015, an increase of 9.7 percent year-on-year, according to media reports.

"Emerging nations including Argentina, India, Brazil and Pakistan are prone to file WTO complaints to guard their homegrown industries against imported peers, as they are suffering from sluggish global demands and economic downturns," said Wang Jun, deputy director of the Department of Information at the China Center for International Economic Exchanges.

Rising probes

In recent years, developing economies have filed more frequent complaints against China's exports.

MOFCOM data showed that, so far this year, Pakistan hit China with eight anti-dumping investigations and India has started some 20.

India initiated a total of 10 anti-dumping and anti-subsidy cases in 2015, according to a statement issued by China Council for the Promotion of International Trade in February.

That year, 49 anti-dumping and anti-subsidy investigations were launched by developing countries, accounting for more than 60 percent of all probes against China, and a 22.5 percent increase from 2014, the statement showed.

China's aggressive push in its going out strategy has made it an easy target for the current trade protectionism fever, Wang, the expert, told the Global Times Thursday.

The first 11 months this year witnessed a surge of 55.3 percent year-on-year in China's outbound investment to $161.7 billion, official data showed.

Premier Li Keqiang predicted in October that China's overseas investment would grow to about $720 billion in the following five years, and that its import volume would reach $8 trillion, according to the Xinhua News Agency.

A long-term challenge

"Most Chinese services and products sold to foreign consumers are the similar as products emerging countries are developing themselves," Chen Fengying, an expert at the Institute of World Economics Studies under the China Institute of Contemporary International Relations.

The lack of differentiation will continue to create heated competition and will spur more complaints from other developing countries and regions, Chen told the Global Times Thursday, signifying long-term challenges Chinese firms will face while going global.

Wang, the expert, suggested that China would see more trade disputes as long as there is no sign of recovery in global trade.

"The U.S. and the EU are expected to start more trade battles with China in the following years, which will drive some developing countries to follow suit," he explained.

President-elect Donald Trump is packing his transition team with veterans of U.S. steel battles with China, likely indicating a more aggressive approach to U.S. complaints against China, Reuters reported on Tuesday.

In order to carry out its "One Belt, One Road" initiative, China may need to make some compromises to settle trade disputes with other developing countries, Wang said.

Still, Chen noted that trade frictions with India, Argentina and other developing countries would not greatly impact Chinese trade volumes which mainly bank on the U.S. and EU markets.

In November, China exported 34.5 billion yuan ($4.98 billion) and 15.2 billion yuan worth of goods to India and Brazil, respectively. In contrast, China exported 247.4 billion yuan worth of products to the U.S. last month.

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