In accordance with the report by the Development Research Center of the State Council, China will become the main objective of trade protectionism, and this behavior will make the exporting environment worse in China.

The nation’s export sector saw a rapid growth since China joined WTO in 2001. The surplus trade helped the country gather $1.95 trillion in foreign exchange reserves, which ranked the first in the world. In 2008, the surplus trade reached 295.46 billion Yuan, due to this situation, many foreign countries started to adopt their trade protectionism measures.

A six-month ban on toy imports from China has been carried out by the Indian government on Jan 23. Meanwhile, Chinese government claimed that China would file a case at WTO against the ban to import Chinese fowls.

The Ministry of Commerce reported that China is still one of the countries that are under anti-dumping probes since 1995.

This report also said that US government’s ‘Buy America’ clause caused a rise of trade protectionism all around the world.

A study released on March 17th by the World Bank showed that 17 of the G20 group have launched trade-restricting measures since last November.

At the G20 summit that was held on November 15th, Leaders of G20 group countries agreed to avoid setting trade barriers, but, in contrast, up to 47 measures which restrict trade have been taken in those countries since the end of the meeting.

China’s commerce minister, Chen Deming, said that China would definitely say no to protectionism and would give some useful suggestions in trade talks held in Doha.

The report suggested that China still need to support the labor-intensive export sector because it could provide about 40 million job chances every year.

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It is obvious that trade protection is certain to rise, said Mei Xinyu, a trade expert form the Ministry of Commerce. The current situation will stay for some time, he said, referring to the lasting effects caused by the US stimulus package.

The package was passed late on Friday with the proposal of distributing tens of billion of dollars into public building projects, and tends to impose conditions, for instance, only US-made steel and products can be used.

Mei also said that China could be greatly suffered from the action since it is a major manufacturing exporter that supplied enormous goods to all the other countries.

The trade barrier comes when efforts are needed to fight the devastated economic crisis in more than fifty years.

It is impossible that protectionism will do any good to anyone, said Feng Jun, a Shanghai-based WTO expert,  the package is not feasible in the age of globalization since the world today is not the same as that of the 1930.

He added that the “buy American” plan “is impossible to work”. On the contrary, it would cause trade barriers. At the same time, “short-sighted” governments will constrains foreign products and overseas investments to protect jobs and industries within the country.

Mei doesn’t agree with the move that China will not use protectionism when implementing its $586-billion stimulus package. He urged Chinese government to create an even favorable field for domestic business under the WTO framework. “We should not wait to be a victim,” he said.

It is found that the number of anti-dumping and anti-subsidy investigations into Chinese products has increased. For example, India has made an announcement that it’s 17 “trade remedy” will be made to restrict Chinese products since October 2008.

Over the weekend, Group of Seven (G7) finance ministers promised that they will not use protectionism in the process of making efforts to stimulate their domestic economies to fight the world’s most awful economic crisis.

Italian Finance Minister Giulio Tremonti, the meeting’s host, said the other ministers insisted on offending protectionism. It is a specific dangerous thing not only for economies which is heavily based on exports, he said in Rome.

US Treasury Secretary Timothy Geithner made an assurance to his competitors that the $787-billion package would not break the US’s promise of free trade.

Are you interested in the business opportunities in China?

China is one of the world’s great growth markets and is likely to be for many years to come. Foreign companies often face difficulties in assessing Chinese market demand and enacting effective strategies because of the language barriers, culture differences, and high expense.

BPOVIA is the leading virtual assistant and Knowledge process outsourcing (KPO) service provider in China. BPOVIA is the only virtual assistant company ever been nominated for the prestigious “Red Herring 100 Asia” Awards 2008. Combines international perspective with local know-how, BPOVIA can provide our clients China business development service and help our clients doing successful business in China.

Please visit http://www.BPOVIA.com/ for details about our service.