After months of low-level tensions, Beijing and Washington stepped up the the rhetoric last week, just ahead of a high-profile visit starting Sunday by US President Barack Obama, signalling that trade could be high on the agenda.

"They recognise it would be harmful if it got out of hand," said David Cohen, director of Asian forecasting at analysis group Action Economics.

Ren Xianfang, a Beijing-based economist at IHS Global Insight, agreed, saying: "The breakout of an all-out trade war between the United States and China is very unlikely."

But she warned in a note of the risk of an "escalation in trade conflicts between China and other countries, as China resorts to tit-for-tat measures."

On November 5, the United States announced it would impose tariffs on imports of some Chinese steel products used in the oil industry. The next day, Beijing launched its own probe into American car imports.

Cohen described the timing of the latest spat, just ahead of Obama's visit, as "interesting", adding: "I assume it was more than just a coincidence."

Analysts say the trigger for tensions came in September when Washington said it would slap duties on Chinese tyres -- the first time it had used a US legal protection clause against Chinese imports on the books for several years.

At that time, China had already raised the prospect of launching a probe into US cars.

"(Beijing) is telling the US that they should not resort to taking discriminatory trade protectionist measures against China," said Sun Zhongtao, international strategy professor at the Central Party School in Beijing.

"It's more of a stance, indicating that China hopes the United States can take it seriously."

The Chinese car probe is largely symbolic, as it involves only tens of thousands of autos in the world's largest car market, where 12 million vehicles are expected to be sold this year.

In contrast, the US tyre measures could affect 100,000 jobs in China and cost the industry one billion dollars, according to experts quoted by state media.

As a result, China did not hesitate to launch a formal complaint to the World Trade Organisation (WTO), denouncing the US tyre tariffs as "protectionism."

Beijing has lodged a total of six complaints and is the target of 17 others at the WTO since it joined the Geneva-based body at the end of 2001.

Authorities in Beijing are concerned that China will be the victim of protectionist actions launched by countries weakened by the global financial crisis, despite its trade partners' repeated assurances to the contrary.

"The trend shows that trade frictions are developing, and have been spreading to a more diverse range of sectors since 2008," said Ren.

Disagreements between China and the United States, the European Union and other developing countries such as India involve a range of products, from Chicken and sodium gluconate to steel products and strategic raw materials.

In 2009, the European Union launched five new anti-dumping investigations on Chinese products, and China initiated two aimed at EU goods.

But the cases that have attracted worldwide attention only represent a small share of overall global trade, according to the EU's ambassador to China, Serge Abou.

"More than 99 percent of China's trade flows with the rest of the world are not subject to any trade defence measures," he told AFP.

Still, the global recession did trigger more protectionist measures than before, Cohen says, but "leaders pledged they were not going to launch a wave of protectionism -- (they will just) bend the rules on the margin."

China -- the world's third largest economy, which stole the title of global top exporter from Germany in the first semester -- is thus now faced with conflicts that match its growing clout.

earlier related report
Taiwan hopes to speed trade pact talks with China: official
Singapore (AFP) Nov 12, 2009 - Taiwan wants to enter into formal negotiations on a bilateral trade agreement with China soon, the island's economic minister said here Thursday.

Speaking on the sidelines of the Asia-Pacific Economic Cooperation forum meeting, Shih Yen-shiang said discussions on the trade pact were still only in the informal stages.

"We hope to start to have formal consultations with the other side of the Taiwan Strait and I believe that ECFA (the Economic Cooperation Framework Agreement) will benefit both sides of the Taiwan Strait," Shih said through an interpreter.

"Of course we want to accelerate the pace of the negotiations," he added.

"However it's related to many, many details, therefore I am not sure that I can give you any timetable on that."

The trade pact is likely to be discussed when delegates from the two sides meet in Taiwan for talks from December 21-23, Taiwan media reported on Thursday.

The talks will be the fourth since the two sides -- who were Cold War arch-enemies for six decades -- began a thaw in relations in mid-2008 after the election of Taiwan's China-friendly President Ma Ying-jeou.

Shih also declined to say if Taiwan's envoy to the Asia-Pacific Economic Cooperation (APEC) summit, Lien Chan, would meet Chinese President Hu Jintao on the sidelines of the meeting.

"We need to wait for (Lien) to arrive to brief you about that," he said.

China's foreign ministry spokesman Ma Zhaoxu also declined on Thursday to comment on a possible meeting.

APEC is one of the few international organisations where both China and Taiwan, which is designated as "Chinese Taipei", are full members, along with Hong Kong.

This is made possible by referring to APEC members as "economies" rather than countries.

Taiwanese presidents are barred from APEC summits due to objections from China, which regards the island as part of its territory, and are usually represented by senior economic advisers or business leaders.

The two sides separated in 1949 after a civil war.

Share This Article With Planet Earth

del.icio.us	Digg	Reddit
YahooMyWeb	Google	Facebook

Related Links
Global Trade News

Memory Foam Mattress Review

SPACE MEDIA NETWORK PROMOTIONS Solar Energy Solutions Tempur-Pedic Mattress Comparison ... Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News