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U.S., China swap more tariffs

0 CommentsPrint E-mail Global Times, February 8, 2010
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China and the United States cranked up the tension Friday as they exchanged new tariffs, underscoring the increasing sensitivity and fragility of the world's most significant bilateral relations, which have been strained in recent weeks.

China's ministry of commerce announced duties on imports of US chicken products Beijing believes are sold at unfairly low prices. In its preliminary ruling, the ministry asked importers of US chicken parts in China to pay deposits at customs – of up to 105.4 percent – starting Saturday, according to an online statement.

"Investigations showed that the US producers had dumped chicken products on the Chinese market, causing substantial damage to China's domestic industry," the ministry said.

Later Friday, the US unveiled its countermeasure by slapping initial anti-dumping duties of up to 231.4 percent on gift boxes and ribbons from China that it said were unfairly priced, Reuters reported, adding that the US slapped much lower duties of up to 4.54 percent on Taiwan.

China formally launched anti-subsidy investigations into US chicken products and auto parts in late September. That move came as the US imposed stiff tariffs on imported Chinese tires, adding to a growing list of Chinese exports that face US duties, including electric blankets and steel tubes.

As much as $7 billion worth of Chinese exports last year were made subject to Washington's trade protectionist measures, Yao Jian, a spokesman with China's ministry of commerce, said in January, with the steel and tire industries said to be among the most affected.

A government-linked think tank in China said over the weekend that foreign trade is to observe a "marked" recovery as overseas demand rises due to the global economic recovery.

Foreign trade will see a 17.6 percent year-on-year growth, with exports up 16.6 percent and imports up 18.9 percent, the Center for Forecasting Science of the Chinese Academy of Sciences said in a report issued Saturday.

China accounted for 19 percent of US imports in the first half of 2009, up from 16 percent in 2008, according to US Census Bureau figures, the Wall Street Journal reported Friday.

The US trade deficit with China in the first 11 months of last year, however, was $209 billion, a 16 percent drop from a year earlier, which was $248 billion, according to statistics from the US Census Bureau.

US President Barack Obama made an ambitious pledge to double US exports over the next five years in his recent State story of the Union address.

Goldman Sachs estimates that such a scenario might require a 4.5 percent average annual global GDP growth accompanied by a 30 percent US dollar depreciation, Reuters said Friday in a commentary.

The US has been a complainant in 93 out of the 400 or so disputes registered with the World Trade Organization in its 15-year history, the most of any nation, Reuters said Friday. Through the end of 2009, only India had more active antidumping and countervailing-duty measures than the US, it said.

Tensions seem to have mounted between Beijing and Washington due to wrangling over issues including the value of the yuan, US arms sales to Taiwan and a scheduled meeting between President Obama and the Dalai Lama, who is viewed by Beijing as a Tibetan separatist.

The Obama administration drew Beijing's ire last week by threatening a "much tougher" enforcement of existing trade rules.

The US and China were also in dispute over the latter's Internet policy, after Google threatened to pull out of the country, accusing Beijing of backing official cyber attacks on the e-mail accounts of Chinese activists.

Wang Fan, an international affairs expert with the China Foreign Affairs University, said Sino-US relations are one of the most important bilateral relations in the world.

"The relation is so complicated that new conflicts continue to emerge while the existing ones are yet to be solved," Wang said.

However, with their expanding common ground, the two countries wouldn't fall into a "cold war," Wang said.

"Relationship between China and the US will always be somewhere between perfect and the worst. That is to say not as good as in the so-called scenario of the Group of 2, nor as bad as any sort of new cold war," Wang said.

Niu Xinchun, a researcher at the China Institutes of Contemporary International Relations, said China and the US should avoid a showdown despite the non-stop frictions.

"Conflicts will be accompanied by cooperation," Niu said. "The Obama administration would balance its attempts to contain China and its willingness to cooperate with it."

At the Munich Security Conference Friday, Chinese Foreign Minister Yang Jiechi said a more developed China is an opportunity rather than a threat to the world.

"The argument that a strong nation is bound to seek hegemony finds no supporting case in China's history and goes against the will of the Chinese people," he said.

The WSJ called "a cheap currency, regulated interest rates and low energy prices" part of China's strategy, and that it is "stoking discontent in fellow developing countries, not just in Western capitals."

The export resurgence has reached into new markets, the WSJ said. A majority of China's exports now go to other developing countries, with exports to India, Brazil, Indonesia and Mexico growing by 30 to 50 percent in recent months, the WSJ reported, citing figures from China International Capital Corp.

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