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China Protests U.S. Tariffs on Paper Imports

Chinese officials have demanded the United States reverse its decision to put new tariffs on Chinese paper exports to the U.S. Washington imposed the duties Friday in response to what it says are unfair government subsidies granted to Chinese producers. Daniel Schearf reports from Beijing.

China's Commerce Ministry spokesman Wang Xinpei has demanded the U.S. reconsider its decision to increase duties on paper, which he said was unacceptable and would harm Chinese business.

China's state media Monday said coated paper products from China increased 177 percent from 2005 to 2006 and were estimated to be worth 224 million dollars.

Wang Guiguo is a professor of Chinese law at Hong Kong's City University and Chairman of the Hong Kong WTO Research Institute. He says the volume of coated paper is not significant to U.S.-China trade, but China's fear is that tariffs could lead to further pressure on Chinese exports.

"China is very concerned that if the United States' imposition of tariffs is not curtailed or is not counter-acted by China some other economies may follow such as Canada, which has already been talking about imposed tariffs on China's alleged subsidies."

Washington says the tariffs, which range from 10 point nine to 20 point three-five percent, are needed to counteract government subsidies that give Chinese paper producers an unfair competitive advantage in world markets.

Chinese officials deny giving Chinese companies any unfair subsidies and say the new tariffs show Washington has gone back on its word to solve trade disputes through dialogue.

The tariffs reverse a more than twenty-year-old U.S. policy of not applying duties to subsidized goods from so-called "non-market" economies such as China's.

Beijing has been seeking market economy status from the U.S. and other countries to better protect itself from accusations of dumping cheap goods to corner markets.

But Washington maintains the government interferes too much to allow China to be called a market economy.

The U.S. complained to the World Trade Organization in February about alleged Chinese government subsidies for several industries including steel and paper.

The U.S.-China trade deficit is a highly sensitive political issue. Critics say Beijing has made it worse by giving unfair advantages to domestic industries, and by refusing to float the Chinese currency, thereby keeping Chinese exports cheap.

The U.S. is running a world record trade deficit with China that Washington says last year passed 232 billion dollars