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Chinese Officials Rejected Pressure to Curb China's Textile Exports

  • Leta Fincher

Chinese officials have rejected pressure from the United States and Europe to curb China's textile exports and loosen its currency exchange rate.

The Chinese Commerce Ministry Thursday expressed "firm opposition and strong displeasure" to new U.S. quotas imposed in the last week on exports of several kinds of Chinese clothing.

Chinese Commerce Minister Bo Xilai told U.S. executives in Beijing on Wednesday that U.S. and European positions on Chinese textiles are "unfair." "When you have an absolute advantage, you advocate free trade and make everyone open the door, but when developing countries start to challenge you, you immediately set limits and shut the door."

The dispute over textiles comes just as the U.S. Treasury is warning Beijing to revalue its currency, the yuan, which is pegged to the U.S. dollar. A new Treasury report hinted at retaliation if China is found to be manipulating its currency.

Some U.S. lawmakers are criticizing the Bush administration for not taking an even tougher stand against what they see as China's unfair trade practices.

Democratic party Congressman Tim Ryan spoke with VOA's Mandarin language program, 'Issues and Opinions' and said, "As a member of Congress from Ohio, we've had hundreds of thousands of jobs that we've lost to China. I don't think the administration quite frankly went far enough. I think we've given the Chinese government plenty of time, we've been trying every diplomatic option possible."

Mr. Ryan complains that Chinese exporters enjoy an unfair advantage because their products are much cheaper than they would be if the Yuan were valued by the free market.

But some economists argue that China's trade advantage is not as great as Washington thinks.

Albert Keidel is an economist and China expert at the Carnegie Endowment for International Peace in Washington D.C. Mr. Keidel says China has a large trade surplus with the United States, but it has a small global trade surplus, which is a better test of its exchange-rate fairness.

"If you say who's responsible for the U.S. deficit, you really should say who has large global surpluses, and that turns out to be the Euro zone, Japan, non-China--the rest of Asia, and oil exporters."

Mr. Keidel argues that any adjustment of China's exchange rate would likely have only a marginal effect on the U.S. trade deficit, which reached a record 162 billion dollars in 2004. He and other analysts say that China is unlikely to revalue its currency or limit its exports anytime soon.