Michael Martina and Tom Miles
11 December 2015
China is sowing the seeds of a global trade war as its smelters, refiners and manufacturers increasingly export goods they can't sell into a slowing domestic economy, prompting accusations of dumping and unfair subsidies from its trading partners.
With China's exporters already gaining a competitive edge from its weakening currency, global metals producers are crying foul over Beijing's plans to cut export taxes, and the United States is complaining that a raft of government subsidy programmes disadvantage rival producers.
Beijing hopes to gain market economy status under World Trade Organization rules a year from now, which would force trading partners to use China's domestic prices instead of a third party's to assess if it is exporting below market value, and it has warned that it will fight back if countries continue to resort to anti-dumping duties.
Chin Leng Lim, a trade expert and professor of law at the University of Hong Kong, said a combination of factors could stoke trade tensions to a pitch not seen since the global financial crisis.
"You've got a slowing economy in China, a huge push on exports, a pushback on the part of producers in the United States and an election looming, while there is a question hanging around some of the rules of the game. It's going to be exciting," Lim said.
Growth in the world's second-largest economy has slowed to a 25-year low, hitting demand for industrial raw materials like steel and copper, so domestic producers are looking to sell their surplus on a saturated global market... Click here to read the full article.
Post a Comment