TRADE

EU to raise tariffs on cheap goods from China

The European Union is considering raising tariffs on cheap goods from China， according to a warning issued by the Economic and Commercial Counselor’s Office of the Embassy of China in Italy， Economic Information reported on August 11.

The warning is based on a five-year strategic blueprint， published by the EU in November last year， which emphasizes global trade competitiveness， The policies hope to promote economic growth in European countries and decrease the high unemployment rate.

According to the Counselor’s Office， although the economy of the EU has been driven down by the debt crisis， trade between China and the EU has continued to develop at a fast pace. China， with its competitive advantage in labor costs， has increased its goods exported to the EU， but boycotts from the EU have also increased accordingly.

“A series of actions adopted by the EU this year suggests that tougher trade policies adopted towards China may increase the possibility of trade protectionism，” said Bai Ming， an analyst at the Chinese Academy of International Trade and Economic Cooperation， in an interview with the newspaper. (chinadaily.com.cn)

EU extends import duties on Chinese bicycles

The European Union is set to extend import duties on Chinese-made bicycles and parts until 2014， according to a document seen by Reuters， in a move that may anger Chinese exporters and worsen EU-China trade ties.

EU trade officials proposed a three-year extension to the duties， less than the five years requested by European producers just days after World Trade Organization rulings raised the prospect of new legal wrangling with China over export practices and EU methods for taxing imports.

European bicycle makers had asked the EU authorities to extend the anti-dumping duties of up to 48.5 percent until 2016， to counteract what the EU has said is illegal export pricing by Chinese producers.

Zhang Peisheng， senior commissioner for the China Chamber of Commerce for Import and Export of Machinery and Electronic Products， criticized plans to keep duties in place.

“The proposal of the European Commission to extend the duties for another three years is totally unwarranted... It simply defies the basic laws of economics，” Zhang said on a Brussels visit aimed at changing EU minds on the duties.

Representatives of EU governments are due to discuss the extension proposal and are expected to approve it during a closed-door meeting in Brussels next week. If approved， the extension must begin by mid-October.

China exported nearly 700，000 bicycles and had total bicycle-related exports to the EU worth 430 million euros(US$610 million) in 2009， despite the EU anti-dumping duty.

The duties， first imposed in 1993， have frustrated Chinese attempts to gain greater market share in Europe， where sales of bicycles and parts total about 5 billion euros a year. Duties have gradually increased over 18 years.

The European Bicycle Manufacturers’ Association(EBMA)， which represents an industry employing around 20，000 people， mostly in Germany and Italy， had asked the EU to extend the duties for a further five years.

In its complaint， registered with the Commission in early 2010， EBMA said allowing duties on Chinese imports to expire would result in more “dumping” of bicycles and bicycle parts by Chinese exporters， damaging Europe's industry.

Europe produced more than 13 million bikes and 1.6 billion euros of bike parts in 2008， according to industry group Colibi. The average price of bicycles ranges from 680 euros in the Netherlands to 100 euros in Europe’s eastern member states. (China Daily)

Fastener makers may still face strife in EU

The European Union may launch a “re-examination” of fasteners imported from China even though the World Trade Organization ruled that the bloc’s high duties on Chinese goods are against the law.

Yang Fengdan， deputy secretary-general of the Jiaxing Chamber of Commerce for Import Export， also says the Chinese government is concerned that the EU may not remove the anti-dumping duties on Chinese imports as soon as possible， and it is considering drafting documents to urge the bloc to do so.

As a high-level official of the Jiaxing Association of Fasteners Import and Export Companies， Yang was among representatives of the industry who attended a meeting held by the Ministry of Commerce recently.

In July， the WTO rejected the EU’s appeal， which claimed China was dumping fasteners on the European market.

It ruled that the EU’s high anti-dumping duties arbitrarily contravene global trade law.

In January 2009 the EU imposed anti-dumping duties of 26.5 to 85 percent on China’s fasteners for five years.

On July 31， 2009， China brought the case to the WTO’s dispute settlement mechanism， the country’s first such case against the EU.

China is the world’s biggest producer of screws， nuts， bolts and washers， and the EU is a major destination for its fasteners. Its annual exports of fasteners to the EU reached US$600 million (419 million euros) last year.

While companies in the fastener industry have welcomed the WTO ruling， believing exports to the EU can be resumed， Yang says that things may not go as smoothly as expected. (China Daily)

Russian natural gas deal edges toward conclusion

Long-stalled negotiations between China and Russia on pipeline gas are expected to conclude before the end of this year， as the price gap has narrowed after several rounds of talks， industry experts said on August 17.

“Both sides are very upbeat on the natural gas cooperation， even though the price differences are still there，” said Pang Changwei， director of the Institute for International Oil Politics at the China University of Petroleum in Beijing.

He said that an agreement would be reached before the end of this year， after Russia’s parliamentary election in December.

“The latest information shows that the wide price gap has narrowed， which will push forward the negotiations，” he said， without giving specific figures.

China and Russia reached an initial agreement as early as 2006 during then-Russian president Vladimir Putin’s state visit to China， under which Russia promised to supply 68 billion cu m of natural gas annually for 30 years from eastern and western Siberia through two pipelines.

The price disparity has held up talks for years， however， and even President Hu Jintao’s state visit to Russia in June， during which an agreement was widely expected， didn’t result in a final deal.

“The final decision may be made during the Russian prime minister’s visit to China in late October. He is the key figure to propel the deal from the Russian side，” a source close to the situation told China Daily on condition of anonymity.

There has been no official confirmation from the Ministry of Foreign Affairs that Putin will visit China at that time.

But Cheng Guoping， assistant foreign minister， said in July that he was optimistic that the natural gas deal could be finalized ahead of Putin’s state visit to China， scheduled for the fourth quarter of this year， according to Xinhua News Agency reports.

The latest round of natural gas talks finished in late July between the Russian gas giant Gazprom and China National Petroleum Corp (CNPC)， China’s biggest energy company. No official information about the negotiations has been revealed so far.

Gazprom in early July demanded a US$40 billion advance payment from CNPC for the natural gas deal， which was deemed by the Chinese side to be an unreasonable demand that doesn’t meet international practices.

“Natural gas cooperation has huge risks from cross-border infrastructure construction to domestic pipeline network development. We’re even not sure where is th eastern Siberia，” Pang said.

However， the Russian side questioned the natural gas market in China， where gas prices are much lower than international levels， a situation that has led to huge losses for domestic importers.

China’s natural gas market is far from mature， said Igor Tomberg， head of the Center for Energy and Transport Research of the Russian Academy of Sciences’ Institute of

Oriental Studies， speaking in Russian through an interpreter.

“The era of cheap natural gas has gone，” said Tatiana Mitrova， expert of the Institute for Energy Studies of the Russian Academy of Sciences， also via an interpreter.

She added that natural gas buyers， such as China， should evaluate domestic market demand and global price trends.

It’s necessary for China to have natural gas pricing reform to make better use of the less-polluting fossil fuel， Pang said， adding that this would be a long procedure， particularly when domestic inflation remains high. (China Daily)

China welcomes second bailout deal for Greece

China’s central bank governor Zhou Xiaochuan said on July 23 that China welcomes a second European bailout deal for Greece， stating that the move will help settle sovereign debt problems in the eurozone.

“Eurozone leaders and institutions reached a consensus on a second rescue package for Greece and measures to resolve the euro crisis at a summit on July 21. We welcome the move，” Zhou said in a statement posted on the website of the People’s Bank of China.

The bailout will protect financial stability in the eurozone， boost market confidence and promote the European Union’s economic recovery， he said.

Under the bailout deal， the eurozone and the International Monetary Fund will shell out 109 billion euros (US$157 billion)， with private bondholders contributing another 50 billion euros.

“We support the efforts made by the European Union and the eurozone in combating the global financial crisis and improving their fiscal regulations，” he said.

“China has always been confident regarding the eurozone and the euro and will continue to play an active and stable role in the international financial market，” he said.

China will strengthen its cooperation with the European Union， the European Central Bank and the European Financial Stability Facility， he said.

The European financial market was， is and will continue to be one of China’s biggest investment markets， he added. (Xinhua)

Brief on China’s import and export in July 2011 with EU countries