China Programme • Volume 13 • Number 8 • 4th March 2009
China Renews Calls to Avoid Protectionism, Proposes WTO Oversight
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The international community should resist protectionism during the economic crisis and the WTO should take an active role in ensuring that national stimulus packages are not used to promote solely domestic interests, China’s commerce minister said last week.
Speaking in London on Friday, Chinese Minister of Commerce Chen Deming proposed that the global trade body could oversee the stimulus packages that many governments have enacted in recent months and play a role in coordinating the international response to the crisis.
“Some countries are working away to protect their own national interests,” Chen said, as reported by Reuters. “I think perhaps the WTO can do some kind of evaluation or review of these stimulus packages and then as a result the WTO can share some recommendations with these economies.”
Chen’s message echoes statements he made in an opinion piece in the Wall Street Journal a week earlier. In that article, he noted that “the fundamental interest of every country is to step up consultation and cooperation and keep international trade smoothly flowing. Healthy international trade can help revive the world economy.”
“In the heat of the crisis, it’s critical that all countries refrain from pointing fingers at each other or pursuing their own interests at the expense of others,” Chen wrote.
For several months, Beijing has openly criticised national stimulus measures such as the ’Buy American’ provisions in Washington’s US$ 787 billion recovery package that was signed into law last month (see BRIDGES Weekly, 18 February 2009, http://ictsd.net/i/news/bridgesweekly/41050/).
However, a WTO report released last November estimated Beijing’s global surplus at US$ 262 billion in 2007, (see BRIDGES Weekly, 12 November 2008, http://ictsd.net/i/news/bridgesweekly/33313/), a figure that has caused some critics to view China’s call for anti-protectionism with scepticism.
“Major economies should be working together to rebalance the system, and if China is flooding the world with its goods while not buying any in return, why should politicians in the US or Europe, or in South East Asia, keep their trade barriers open and watch their own workers lose their jobs?” said Malcolm Moore, Shanghai Correspondent for The Telegraph.
But Beijing is not blind to such criticism.
“We see clearly that we shall make our import and export trade more balanced and we shall strike a balance in our international payments,” Chen said in London last week.
Speaking to reporters from Britain, the minister was in Europe last week as part of a 200-member delegation promoting free trade. During the trip, China unveiled US $10 billion in trade deals with Germany, and another US $2 billion with the UK, covering goods such as airplane engines, Jaguar and Land Rover cars, and railway equipment.
According to trade specialist Matthew McConkey of law firm Mayer Brown JSM, such visits are “sending the message, ‘we’re being a good international player.’”
“This is how the wheels of commerce turn,” McConkey said.
ICTSD Reporting; “China urges WTO overview of global stimulus packages,” REUTERS, 27 February 2009; “Protectionism Doesn’t Pay,” WALL STREET JOURNAL, 20 February 2009; “China Leads the Way in Protectionism,” THE TELEGRAPH, 2 March 2009; “Europe to get $15 Billion in China Trade,” THE WALL STREET JOURNAL, 25 February 2009.
4 responses to “China Renews Calls to Avoid Protectionism, Proposes WTO Oversight”
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It should come as no surprise that China chooses to recognise the role of supranational economic bodies like the WTO only when its economic interests are threatened
china’s imports should be encouraged. but to my surprise, the purchase list highlighted they buy Jaguar (!!!) and Land Rover cars,in addition to air plane engine and railway equipment.
it would be great if they can buy low carbon, clean technologies as they argued in climate change negotiations that they need technology. is this because lack of inter ministry coordination? china does not need import low carbon technology? unwillingness to sell technology in European countries?
It is clearly indicated in the World Bank’s report for East Asia and Pacific , figure no.9 the China ’s importation from the foresaid region has declined sharply starting in the third quarter 2008.Despites the fact that most of currencies in the region has been weakening, but not the RMB.It must be a strict control on importation to maintain its current account intact, it is a form of a non tarrief barier/ disguised protectionism. We have to admire the Asean and Cer decission in establishing a new FTA.The north east Asia countries , it is most appropiately if they join this FTA. Protectionism for the East Asian countries is an ugly undertaking.
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