China concerned over Indian trade probes on its exports

10 Feb 2009


China's ministry of commerce said yesterday that that it has "serious concerns" on the intense investigations and trade probes and sanctions applied by India on certain Chinese products and hopes that it will not pose a threat to the $ 51.78 billion Indo-China bilateral trade.

The statement came after commerce ministry deputy minister Zhong Shan held a meeting with Indian ambassador to China Nirupama Rao on several bilateral trade disputes.

According to the Chinese commerce ministry, India has launched investigations into 17 Chinese products since October, which affects $1.5 billion of Chinese exports to India that include tyres, linen fabric, hot-rolled steel, sodium carbonate and sodium nitrate among others.

Apart from the investigations launched by India into these products, India has also restricted the import of steel, chemical products and textile products from China recently.

In a statement on the MOC's website, it said "China hopes that in a period during which the world economy faces grim challenges, India takes cautious and prudent trade remedy measures, otherwise bilateral trade relations could be seriously impacted."

Earlier last year it baned he import of Chinese milk products in the country (See: India bans Chinese milk products as WHO expresses concern) in the aftermath of the Chinese milk scandal has claimed four infant deaths and has hospitalised more than 50,000 after being fed contaminated milk powder that led to a global recall of Chinese milk products. 

Late last month the Indian directorate general of foreign trade (DGFT) imposed a six month ban on the imports of Chinese Toys (See: India bans imports of Chinese toys for six months) without assigning any reason for the ban.

But later, when Chinese media reported that China may go to the WTO regarding the ban, commerce and industries minister Kamal Nath clarified that the ban was applied due to the excessive lead content found in the paint in Chinese toys which is harmful to children.

"India is a responsible country and before we take any action we make sure that it should be WTO-compatible," Nath said.

According to Chinese toy manufacturers, Chinese toys have an 80-per cent market share in India with 1.2 million toys exported to India every week.
The All India Toy Manufacturers Association was reported as saying that Chinese imports account for over half of the retail toy market in India, estimated to be in the range of $500 million in 2007.

India - China trade rose in 2007 with Chinese exports jumping 521 per cent. However, 2008 has put a brake on China's trade with its 10th biggest trading partner; though bilateral trade still rose by an impressive 34 per cent to $51.78 billion, it slowed down by 21.5 per cent compared to 2007. (See: Recession pulls rug under China's exports)

Yao Jian, spokesman for the commerce ministry said that recently both G20 and APEC members have voiced their concerns over trade protectionism and said that they would act against it, but added that both sides needed to keep their communication channels open to solve the issue for mutual benefit.

In his talks with the Indian ambassador, Zhong explained the concerns that his country had over the trade issues and hoped that both countries could hold discussions at both governmental and industry levels to diffuse the trade frictions.

China is currently facing severe trade restrictions from many countries which has affected its exports. Recently the US imposed new tariffs on Chinese goods as it feels that many of Chinese goods are being dumped in the US market like mattress springs and graphite electrodes. The EU has also imposed antid umping tariffs on certain Chinese iron or steel fasteners.

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