2009-02-13

Protectionism in the East

It appeared that the U.S. and China could be headed for a confrontation over trade rules, but it's India and China that are scrapping first. Caijing reports:
China is “seriously concerned about India initiating so many investigations and imposing so many restrictions against Chinese goods in such a short period of time,” said spokesman for the Ministry of Commerce Yao Jian in a statement on the ministry's Web site.

China, wrote Yao, "hopes India will show care and restraint in using trade measures during this period of severe challenges in the world economy."

Liu Xiaoxue, a scholar of India’s economy at the Chinese Academy of Social Sciences, said India's recent actions appear to be protectionism, as most of the restrictions were imposed on products from industries suffering decline in India.

While China may ask the WTO to investigate the cases, Liu said it might not win the appeal since “India’s actions are legal.” He suggested the Chinese government instead solve the dispute through direct negotiations.


As with the adjusted "Buy American" clause, the moves are legal, but the trend is not our friend.

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