China criticizes the U.S. over'protectionism', yuan demands

The comments from a Chinese commerce ministry spokesman earned a quick rebuttal from senior U.S. officials speaking in Beijing, who said a trade war was in neither country's best interests.

“We used to see that the United States was an innovation-driven U.S. But what we are seeing now is an increasingly protective U.S.,” commerce ministry spokesman Yao Jian told reporters at a regular monthly briefing.

“It is necessary to create for enterprises a stable and predictable environment, including (stable) economic and foreign exchange policies, to help the global economy grow steadily and China's exports recover,” he said.

Yao added that the United States had “continued” to let the dollar drop “to improve its competitiveness” while pressing for the yuan's appreciation.

“It is detrimental to the global recovery and is unfair for (the U.S.) to require other (currencies) to rise while allowing the dollar to keep slumping,” Yao told reporters.

But U.S. Commerce Secretary Gary Locke said Washington was not at fault.

“The United States is not engaged in increased protectionism,” Locke told a luncheon in Beijing.

“President Obama has indicated many times that we can not engage in protectionism — protectionism invites retaliation which then results in a trade war ... and in a trade war everyone loses.”

Washington has angered China in recent months by imposing tariffs on Chinese tires and preliminary duties on some steel products — moves which Beijing has repeatedly slammed as protectionist and as impeding the global recovery.

But Locke said the recent action against Chinese tires was “part of the natural order of business” and was not a sign of protectionism.

“China initiates dumping cases against many U.S. companies just as the United States initiates dumping cases against companies from Europe,” Locke said.

Yao had earlier lashed out at Washington's restrictions on high-tech exports to China, attributing the yawning U.S. trade deficit with the world's number three economy to its own “faulty” policy.

“The United States should seriously review its exports control policy, not create various trade barriers to protect domestic industry,” he said.

“The United States and other Western countries were active advocates for free trade... but we now suddenly find a protective U.S.”

Commerce Minister Chen Deming was to meet Locke on Monday to discuss, among other things, U.S. export controls against China and the protection of intellectual property rights, Yao said.

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