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China's export policy obeys rules - Ministry

CHINA'S export policy is in line with the World Trade Organization rules, the Ministry of Commerce said today in response to a complaint from the United States and the European Union over China's export restrictions on some raw materials.

"Export restrictions on some industrial materials aim to protect the environment and natural resources. It is in accordance with WTO rules," said the ministry, according to Xinhua news agency.

The ministry said it will stay in contact with the US and the EU, enhancing communications in between to appropriately deal with the issue. Acknowledging receipt of the complaint, China will go along with the consultation procedures required under WTO rules.

The US and EU filed a case against China to WTO yesterday, saying the country should reduce its export tariffs and raise quotas on key materials including bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, silicon metal, zinc and yellow phosphorus.

The materials are used in production of steel, cars, microchips, planes and other products. The US and EU said China's export restrictions kept material costs lower for domestic manufacturers and created unfair advantages for them, hurting foreign competitors.

Media reports quoted US Trade Representative Ron Kirk, who said they have been urging China to lift these restriction for two years with no result.

But in the opinion of some industry observers, the charges from Washington and Brussels are not reasonable.

"It is groundless to ask China to reduce tariffs or raise quotas as the WTO rules only say that countries can't restrict imports. The rules do not apply to exports and nobody can ask others to sell natural resources cheaply," said Zhou Shijian, an official at the China Society for World Trade Organization Studies.

China has done its bit to boost overseas sales of some chemicals. The country announced on Monday that it will reduce the export tax on nearly 100 categories of goods, including yellow phosphorous.

Xue Jun, a trade analyst at Changjiang Securities Co, said disputes like this can batter the already falling global trade.

"Countries should be very careful to take such action as world trade will deteriorate due to the tension," said Xue.

The World Bank has estimated that global trade volume will plunge 9.7 percent this year.

China's exports fell 26.4 percent from a year earlier to US$88.8 billion in May, a record low for 14 years. The country's trade volume decreased 25.9 percent on an annual basis last month and registered a seventh consecutive fall.

In May, the European Union remained China's largest trading partner by lodging bilateral sales of US$26.8 billion. The growth contracted 22.1 percent from a year ago. It was followed by the United States with trade value retreating 17.1 percent to US$22.4 billion.


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