China officials signal concern about flagging global trade

A container ship sits in the port of Qingdao, in China's Shandong province, on Nov 9, 2015.
A container ship sits in the port of Qingdao, in China's Shandong province, on Nov 9, 2015.PHOTO: EPA

BEIJING - High-ranking Chinese officials signaled concern about flagging global trade on Tuesday, highlighting worries about rising protectionism among the country's trading partners.

They also expressed concern about increasing geopolitical risks at a briefing in Beijing ahead of a Group of 20 summit of the leading economies in Turkey.

"G20 members have cut one-third of their restrictive trade measures. This is important progress. But the remaining restrictive measures are still growing," said Vice Commerce Minister Wang Shouwen.

Wang called on other G20 members to reduce their use of protective measures in order to reinvigorate global growth.

Vice Finance Minister Zhu Guangyao, along with regulators from the Commerce and Finance Ministry, reaffirmed commitments to strengthening multilateral institutions' ability to support global trade and to fight protectionist policies.

China has warned the European Union to abide by World Trade Organization rules and not to resort to what it would consider protectionism - "anti-dumping" tariffs on Chinese-made goods.

China itself has come under fire from critics who have charged that the government is using a 2008 anti-monopoly law to unfairly target foreign multinationals, including US companies Qualcomm and Microsoft, raising protectionism concerns, as well as implementing technology transfer requirements in exchange for allowing market access.

While reform and opening has continued in the financial realm, liberalisations to trade - in particular opening protected sectors to foreign imports - have been slower.

Chinese conservatives, in particular those from the National Development and Reform Commission, have moved to suppress foreign brands in China through regulations on security and crackdowns on pricing.

China's trade, both exports and particularly imports have been under heavy pressure in recent months, with net trade shrinking for eight consecutive months ending in October.

However, imports have been by far the weakest performer, increasingly hampering China's contribution to creating growth in other economies.

Alicia Garcia-Herrero, economist at Natixis bank in Hong Kong, argued in a research report that the extreme character of the import slide can be blamed on protectionist import substitution policies that have artificially suppressed Chinese demand for foreign products.

"The Latin America experience shows that import-substitution policy is only a quick-term fix that ultimately quickens a country's decline in export competitiveness," she wrote.

REUTERS