US stance on trade with China likely to remain tough

Experts say latest moves focus on new energy, high-tech, and predict food safety to feature soon

Experts expect the United States to remain tough on trade with China this year, and to continue launching trade investigations into Chinese imports, most likely using the excuse of security concerns or intellectual property protection.

Reacting to this week's announcement that the US may soon impose punitive duties on the import of stainless steel sinks from China, Zhou Shijian, a senior trade expert at Tsinghua University, said trade friction with the US "will remain frequent" this year, as "the country's economy is still not performing very well, despite quantitative easing measures".

"Rising probes into Chinese new energy and high-tech sectors are the latest developments aimed at securing the US a leading position in global industrial competition," he added.

"In addition to launching more anti-dumping and anti-subsidy investigations, the US will intensify its investigations into Chinese exports to protect its core interests of IPR.

"Food safety will also become an emerging area for trade friction as the country uses more technical barriers to trade such as strictly limiting the pesticide residue in tea from China or the lead content in China-made century eggs," Zhou said.

Zhuang Rui, deputy dean of the Institute of International Economy at the University of International Business and Economics in Beijing, added that trade friction will "surely" increase in 2013 owing to different trade structures between the two economies.

"The upgrade and transformation of China's manufacturing sector will pose challenges to the US initiative of reindustrialization, especially in high-tech and emerging sectors," Zhuang said.

On Wednesday, the US Department of Commerce announced its affirmative final determination in duty investigations against Chinese drawn stainless steel sinks, a move which increases the possibility of imposing punitive duties on the products.

The US claimed that Chinese producers and exporters sold sinks in the US market at dumping margins ranging from 27.14 percent to 76.53 percent.

It also alleged that Chinese producers and exporters received subsidies of 4.8 percent to 12.26 percent.

Imports of drawn stainless sinks from China were valued at an estimated $118 million in 2011, according to the US government.

On January 17, the Commerce Department also opened an investigation into frozen warm-water shrimp from China and six other countries, the first probe into Chinese agricultural products, after slapping anti-dumping duty orders on the same Chinese product for eight years.

Chinese Commerce Ministry spokesman Shen Danyang said during a news briefing on Wednesday that the US probes, without recognizing China as a market economy, violated world trade rules and its own federal laws.

Zhou added: "The US is now giving up free trade and practicing trade protectionism. Our exporters must stand up to the increasing US investigations rather than stepping backward."

Jin Baisong, deputy director of the Department of Chinese Trade and Studies at the Chinese Academy of International Trade and Economic Cooperation, a think tank of the Ministry of Commerce, said: "What's more import, the frictions are expanding from bilateral trade to Chinese investment in the US.

"The US government has blocked some Chinese investments due to so-called national security concerns, which is a new but adverse movement.

"We must remain alert to the trend. The Chinese government can also use the same practice against US companies in China."

Zhou added that the investment restrictions are especially obvious in high-tech sectors in the US and called for more exchanges between the two governments to solve the issues.

However, despite the mounting trade friction, experts agreed that bilateral trade is actually developing.

"As bilateral trade keeps expanding, it's natural to see more trade frictions and they still account for a small share of overall trade," said Jin.

He added that he expected China-US trade to grow between 10 and 15 percent in 2013 as both economies improve.

The US was China's second-largest trading partner and top export destination in 2012.

Bilateral trade rose 8.5 percent year-on-year in 2012 to $484.68 billion, about 12.5 percent of China's total trade volume, according to China's General Administration of Customs.