BEIJING — Times are tense in Sino-American trade relations, but a full-blown trade war is not on the near horizon.
That’s the consensus of government authorities and business leaders, who say increasing friction between China and the U.S. is a part of the natural, if often uncomfortable, progression in growing economic relations between the two trading giants. As their bilateral ties grow — two-way trade volume soared 180 percent from 2001 to 2006 — so have festering disagreements over issues like market access, intellectual property rights and protectionism.
Earlier this spring, the tension escalated when the U.S. took two unprecedented steps. First, officials announced preliminary countervailing duties on imports of some China-made paper products, arguing they were needed to balance Chinese government subsidies. The move was a departure from 20-year-old U.S. policy against imposing such duties on developing countries. Chinese officials reacted indignantly, calling the tariffs “unfair” and unwarranted.
Shortly after, the office of the U.S. Trade Representative filed two simultaneous dispute cases against China with the World Trade Organization. One charged widespread failure to protect international intellectual property rights and the other asserted that through censorship, China creates a media market ripe for and open to the mass piracy of entertainment products. Chinese officials, most notably Vice Premier Wu Yi, said the move would damage the bilateral trade relationship.
Wu was widely quoted in Chinese media as saying China would argue its case before the global trade body.
“We will not cower away,” she said.
The Chinese government has not launched any formal counter attacks against the U.S., and domestic manufacturers and exporters here have no pending plans to do so. Instead, they have stuck to their message that China’s global trade is a work in progress and negotiations are the best way to proceed.
In a prime example, however, American business leaders argue that negotiations had failed on IPR, leaving the U.S. government with little choice.
“We are not moving in the direction of a trade war, but in the direction of holding China accountable as a responsible stakeholder in the international trading system,” said James Zimmerman, chairman of the American Chamber of Commerce in Beijing. “The WTO cases are a natural outcome of China’s membership to the WTO and do not represent a departure from the strategy of engaging China’
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While an all-out trade war is not imminent, neither is smooth sailing. In a May 8 report, a Chinese government think tank predicted another massive gain in the country’s trade surplus this year. China’s trade surplus will surge 42.8 percent this year, to a record $254 billion, the China Academy of Social Sciences projected.
The yawning trade gap is expected to be a key topic of discussion when Chinese and American trade leaders meet in Washington later this month for the next round of talks in the U.S.-China Strategic Economic Dialogue.
David Spooner, assistant commerce secretary for import administration, said during a recent visit to Beijing that he believed these developments were to be expected. Considering the speedy pace of China’s economic development and its relatively recent entry to global trade, Spooner said, U.S.-China trade is on a positive path.
Still, he cautioned, “That’s not to say we won’t have our disagreements’