Commerce Minister Bo Xilai answers questions at a joint press conference with Zhou Xiaochuan, governor of the People's Bank of China or the central bank, on China's trade and monetary policy in the Great Hall of the People March 12, 2007. [Xinhua]

Punitive measures proposed by some US lawmakers against Chinese exports would be "disastrous" to companies in both countries, Minister of Commerce Bo Xilai said yesterday.

Raising tariffs on Chinese exports or revoking "normal trade relations" will only damage the healthy Sino-US trade relationship, he told a press briefing on the sidelines of the annual session of the National People's Congress.

"Our trade relationship has been mutually beneficial and that's why it can grow," he said.

China registered a $144 billion surplus with the US in 2006, but a large share of it was from goods made by US-invested companies in China and sold in the United States.

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If the US surplus in services trade is factored in, "Chinese and American interests in trade are balanced," Bo said. "We should not underestimate the wisdom of American business people. If they could not make money doing business with China, they would not have been doing it."

With the trade deficit at historic highs, some US lawmakers have renewed efforts to press China to radically revalue its currency and proposed punitive measures should China not meet their requirement on exchange rate adjustment.

Such steps would be completely against the principles of the World Trade Organization, Bo said. "If they adopted such a policy, that would not only be protectionism but also trade hegemonism."

African trade

Bo also defended China's trade and economic cooperation with African countries.

Criticism that China is developing a relationship with Africa only to obtain natural resources is unfair, he said.

"A major criticism is that China takes oil from Africa, but according to statistics, of Africa's total oil exports last year, China took 8.7 percent. Europe took 36 percent and the United States 33 percent.

"If importing 8.7 percent means exploitation, how about 36 percent and 33 percent?" he asked.

He said that in the past, Africa's resources were secured at low prices. But now, China is conducting normal trade with Africa with prices decided by the market.

"What China has done for Africa is out of a sincere feeling, out of friendship from the bottom of the heart forged in past decades," he said.

Doha Round

Responding to questions about the progress of Doha round of global trade talks, Bo said the biggest obstacle is the reluctance by the European Union, US and Japan to make concessions by reducing tariffs or cutting subsidies and support to their domestic agricultural products.

Bo disagreed with the argument that China would be the biggest beneficiary of the Doha Round.

"They (those who aired such view) intend to force China to make more concessions."

Bo said it is still early to tell who would be the biggest beneficiary as the trade talks have not ended. But it has been proved that the developed members were the biggest winners in the Uruguay Round of trade talks.

During the Uruguay Round, all the issues that concern developed nations such as intellectual property rights and services trade were incorporated into the WTO system, but developing members' only concern agriculture was not addressed.

Bo said China has contributed significantly to the multilateral trading system by slashing its general tariff level and tariffs on agricultural products to well below the global average. China's service sector is also much more open than most other developing WTO members, he said.

(China Daily 03/13/2007 page1)