Economy

Electric blankets face stiff US duties

By Wang Xiaotian (China Daily)
Updated: 2010-06-30 10:45

BEIJING - The United States announced preliminary anti-dumping duties on Chinese-made electric blankets on Monday, despite a consensus against trade protectionism being claimed as the Toronto G20 summit's main achievement just the previous day.

Analysts anticipate that such cases will occur more frequently in the next three to five years and said China is unlikely to take any substantial countermeasures in the near future.

The duties would range from 90 to nearly 175 percent, imposed on about $30 million worth of electric blankets from China, said the US Commerce Department.

The US International Trade Commission is expected to make its final judgment in August on the issue.

"This is a signal to China, saying that trade disputes will become more frequent in the next few years," said Zhang Monan, an economist with the State Information Center.

She said the gloomy shadow cast over the US economy by repeated downward revisions in the first quarter GDP growth figure, and the weak performance of the consumer and real estate markets, also accounted for urgent demands in the US to boost exports by all means.

In 2009, the US government set a goal of increasing its exports by 15 percent over the next five years, but Zhang said this is "an astronomical figure" for the US if it only relies on its current level of industrial competitiveness.

Lei Yanhua, a researcher with the Chinese Academy of International Trade and Economic Cooperation affiliated to the Ministry of Commerce, said he expected no substantial countermeasures from the Chinese government to deal with the matter.

"The proportion of electric blankets manufactured in the whole national economy is quite negligible, and exports of such low-tech products and low added value are not supported by the government," he said, adding that an appeal was unlikely given that the manufacturers are too dispersed.

Zhang said China could solve the problem by changing its export-oriented economy to one supported by domestic demand.

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"The global market situation has been changing since the financial crisis with the supply and demand gap continuously growing, and the government has to consider how to act in the new situation," said Lei.

There is no need for the Chinese government to take "tit for tat" measures, Zhang said

She added that China could take advantage of its position as the biggest holder of US national debt to counterbalance trade disputes initiated by the US.

China has increased its stakes in US national debt twice this year, owning more than $900 billion.