China-Japan trade row escalates
A two month trade row between China and
Japan has threatened to escalate after Beijing
said that it would impose punitive tariffs on
some Japanese goods.
The Xinhua news agency said late on Monday that China would "soon" introduce prohibitively high tariffs on imports of Japanese cars, mobile telephones and air conditioners.
China's move follows a trade dispute in April when Japan raised tariffs on Chinese goods, including shiitake mushrooms, spring onions and straw for tatami mats.
Japan imposed tariffs of as much as 266% to protect Japanese farmers from the surge in cheap imports.
"The Chinese side demands the Japanese side immediately correct its wrong decision and discriminatory actions against China's export goods," Xinhua quoted Chinese trade ministry spokeswoman Gao Yan as saying.
Being 'constructive'
After initial anger, Tokyo, which was not notified of China's plan prior to the news release, moved to calm the situation.
"It is appropriate for us to listen to their arguments carefully and hold talks to improve the situation in a calm and constructive manner," said Prime Minister Junichiro Koizumi.
"We had better not take the types of steps that could rock the boat."
At first Japanese officials had reacted angrily, hinting that China's retaliatory move could hurt its protracted bid to join the World Trade Organisation.
Japanese Trade Minister Takeo Hiranuma had urged Beijing to reverse its decision and did not rule out further action against China.
Tokyo maintains that it imposed its tariffs as "safeguard" curbs under WTO rules which preclude retaliation.
China estimates the trade value of the three agricultural products to be about $100m a year.
Selective tariffs
China has also made some conciliatory noises, despite the announcement of the new tariffs.
Chinese Foreign Ministry spokeswoman Zhang Qiyue said: "We hope that the Japanese side would realise how important the smooth solution of the trade dispute between China and Japan would have on bilateral relations."
Analysts said that Beijing has been quite careful about which goods it selected for the tariffs.
They estimate that the imports of such goods were worth about $700m last year, showing that Beijing is keen to limit the damage to trade between the two countries.
Trading relationship
Japan is China's largest trading partner. In the first four months of this year, about $28.6bn worth of goods were shipped between the two countries, according to Chinese customs statistics.
Last year, trade between the two was worth $83bn.
Most Japanese electronics products are
manufactured in China through joint ventures,
which means they are exempt from the new
tariffs.
-- Anonymous, June 19, 2001