Exclusive Interview with China's Commerce Minister Bo Xilai -- Part 1
Thursday, June 02, 2005
|
|
|
|
DARREN GERSH, BUREAU CHIEF, WASHINGTON DC: Minister Bo, I understand that this is your first international television interview. And I want to thank you for appearing on Nightly Business Report. We're very honored to have you. I want to begin with action that China has taken recently to suspend its voluntary restraint of its own exports to the United States. You also said that U.S. action to limit Chinese textiles was unfair. Why did you say that?
COMMERCE MINISTER BO XILAI, PEOPLE'S REPUBLIC OF CHINA (THROUGH TRANSLATOR): Thank you very much for coming to China and interviewing me. And for me I would be very happy to take this opportunity to show you some true stories as well as our thoughts and observations to the American people.
You are right by saying about half a year ago, the Chinese government hopes that we ensure a very smooth transition of the global textile trade after the textile integration at the beginning of this year. And to this end, the Chinese government has adopted a series of positive and detailed efforts and measures. And to be specific, we have adopted ten measures in total. And, most importantly, we have imposed exports duties over those key products that we have been exporting to the EU and US markets. And also, after we made the first decision on January 1st this year, after three months of study and follow up watch, we found that there are still some other products that have enjoyed a relatively faster export growth rate to the above mentioned two products. And therefore, on the second time and on the second occasion, we decided to increase the export duty levels for those products that have been growing faster than others. However, our voluntary efforts have not yet gotten the adequate or sufficient attention and emphasis from the US side, and even while we are increasing our export duty, the US made the unilateral move by imposing quantitative restrictions over seven Chinese textile products.
|
|
|
|
As you must understand when the United States made the unilateral move to impose quantitative restrictions on the seven Chinese textile products, it is impossible for China to impose another export duty over those seven Chinese textile products. Therefore, when any other foreign country imposes quantitative restrictions over any Chinese textile products, we will definitely exempt that product from our voluntary export duty. We cannot put those products under double pressure, or double restrictions.
I also believe it is not scientific for the US government to make the decision of imposing quantitative restrictions over Chinese textiles exports only, based on months collected in nearly four months, which, in our opinion, are not accurate and are short-term numbers.
Of course, I understand that the United States makes the move in pursuant to paragraph 242. And of course, China did sign on that paragraph. However, the employment of that paragraph is subject to certain conditions, rules and procedures. In our opinion, for the US side, their employment of paragraph 242 does not strictly conform to the relevant rules, procedures and conditions.
GERSH: The United States argues that in some categories imports were up ten times and that's a market disruption. Are you saying that's not the case?
BO (THROUGH TRANSLATOR): It is true that we are aware that from January 1, 2005, when we had the textile integration, there were some Chinese textile products that have been growing very fast in terms of the export to the US market. But I would like to say those products were originally restricted by the old quota system. Therefore, I believe it is quite normal and foreseeable to see such a very quick surge in quantity in terms of Chinese textile exports to the US where we are experiencing a transitional period from the old quota system to now, to the new integration system. So that surge is definitely different from the surge of certain quick increase of any categories of product that we experience in normal trading environment.
There is another important detail. As a matter of fact, the textile integration was an important result of the Uruguay round of negotiation 10 years ago, and it was a result agreed by all the WTO members. And this integration actually provided a 10-year transitional period for the developed countries, and those developed countries could use these ten years to adjust their domestic industries and markets in order to cope with the possible new situation arising from textile integration. Unfortunately, both the US and the EU didn't use that transitional period. For the US, most of the quotas for the most sensitive and most wanted textile products did not end until the end of the year 2004, and that's the true reason why today we see such a quite quick and sudden increase of China's textile exports to the US.
GERSH: You are going to be meeting with US Commerce Secretary Gutierrez in the near future. One analyst said that the trade issue between the US and China are hard rocks. Very difficult issues. Are they very difficult issues? And do you believe you will be able to make progress when you meet with US officials?
BO (THROUGH TRANSLATOR): I, of course, very much look forward to meeting with Secretary Gutierrez and also with Ambassador Portman, the new USTR. I believe the key to whether we will be able to make progress over those difficult issues is that whether the two sides can in an objective way understand each other's views and opinions rather than just simply applying double standards on the other side. Let me talk about again the textile issue.
The textile integration is a legitimate right that China is entitled to, based on our commitments made to the WTO by opening greatly our agricultural market and services market to the outside world. Therefore, it is a kind of balance between our rights and our obligations. So, if we cannot have our right of the textile integration, why are we opening our agriculture and services sectors to the outside world? As our obligation that will be an unfair and imbalanced situation.
So, the next point is whether the textile issue is really a very big difficulty between China and the US in terms of bilateral trade relations. We don't think it is a big problem. However, the US side makes its people believe that it is a big problem. As a matter of fact, the bilateral textile trade accounts for only 6 percent of our total bilateral trade. So you see, the proportion is quite small. Last year, the total value of China's textile exports to the US was roughly about ten billion US dollars. However, at the same time, we imported a large amount of US agricultural products with a total value of 7.7 billion US dollars, including cotton and soybeans. Meanwhile, China has been one of the largest buyers of scrap steel materials from the US. Therefore, we don't believe the textile problem is a big difficulty in our bilateral trade relations. Even if the Chinese enterprises or exports withdraw from your domestic market, it will not be the US companies who come up to occupy the left-out market share, it will be other countries' exports coming into the US and taking the market share that originally was taken by Chinese companies. So I really don't understand why, in the United States, people make this small story big.
