As anti-globalization appears to be sweeping across world economies still struggling with slow recoveries, China is poised to defend its exports against escalating protectionism.
"We do not want trade wars, but we will be well-prepared for and actively respond to any trade remedy measures from other countries and regions to protect the interests of Chinese enterprises," Wang Hejun, head of the trade remedy and investigation bureau under the Ministry of Commerce, told the "Economic Information Daily."
His remarks came in as a response to recent exorbitant tariffs imposed by the United States and European Union on Chinese steel.
The U.S. commerce authority ruled earlier this month that importers of stainless sheets and strips manufactured in China will have to pay anti-subsidy taxes up to 190.71 percent and anti-dumping taxes up to 76.64 percent. The European Commission at the end of January decided to levy heavy duties on another Chinese steel product, with rates ranging between 30.7 percent and 64.9 percent.
For China's steel industry, with its average profit margin of 5 percent to 10 percent, the taxes are more than enough to completely drive Chinese companies out of the overseas markets, analysts said.
The two cases signaled looming trade pressures for the world's second largest economy that had once thrived on exports.
"The global trade [situation] is deteriorating and will become even grimmer in 2017," Wang said, predicting Chinese steel and aluminum products will continue to be main targets of trade investigations.
The world's largest exporter has born the brunt of rising protectionism amid the feeble global economic recovery.
Chinese exporters suffered a record number 119 trade remedy investigations initiated by 27 countries or regions last year, a 36.8 percent increase from 2015. Those cases involved 14.34 billion U.S. dollars of goods, up 76 percent year on year.
Weighed on by trade remedies, China's full-year exports in 2016 dropped 2 percent in yuan-denominated terms, and imports up slightly by 0.6 percent, customs data showed. Its trade surplus dropped 9.1 percent.
"Protectionism is becoming increasingly serious, not only because of surging trade probes, but the disregard for and abuse of established rules of some members of the World Trade Organization (WTO), which have further compounded the international circumstance," Wang said.
To easily impose exorbitant tariffs on Chinese products, the United States and EU still use costs of production in a third country to calculate the value of products from countries on its "non-market economy" list, which includes China.
The unfair and unreasonable practice should have expired at the end of 2016, according to agreements signed when China joined the WTO in 2001. But the United States has refused to grant China equal trade status, and the EU, although mulling abolishment of its "non-market economy" list, has proposed new restrictions to legalize the old practice.
Trade remedies have been politicized and become an expedient for some countries and regions to transfer domestic economic pressure, Wang said.
Under a prolonged economic downturn, protectionism is on the rise around the globe. The monthly average trade investigations launched by WTO members in 2016 reached the highest level since 2009.
