China on Wednesday blasted a US decision to cut import quotas on Chinese textiles, raising the specter of a trade war between the two economic giants.
The Chinese reaction came one day after the United States announced it would reduce the amount of textiles China can sell on US markets under this year's quota by 10 million dollars.
"We strongly demand that the US government reconsider its decision," said an unnamed spokesman for China's ministry of foreign trade. "The Chinese government reserves the right to take further actions if the US government insists on its decision."
US officials said the reduction in the 2000 import quota was decided after it turned out Chinese exporters had tried to cheat by charging their shipments to other countries' quotas, including Hong Kong and Malaysia.
It was unclear if the products had been physically transshipped via the third countries.
There have been several allegations in the past that Chinese textiles have been relabeled in third countries before being sent to the United States.
The US government settled on a 10 million dollar cut as this represented the amount of textile products which according to "clear evidence" had been wrongfully charged to other countries' quotas, the US officials said.
The Chinese foreign trade ministry spokesman denied this, saying the US decision was not based on any clear evidence, "seriously violating the Sino-US agreement on textile products."
Since US data indicate China is allowed to export about six billion dollars' worth of textile products to the United States this year, the cut could be a drop in the ocean, representing less than 0.2 percent of total shipments.
Chinese textile exports to the United States increased by 32 percent in the first half of this year to 2.6 billion dollars, according to Chinese customs figures.
Chinese officials said as early as August they did not expect the growth to continue in the second half of the year because of quota restrictions.
"China will have difficulties getting enough quotas from the United States for its competitive textile products in the second half of this year," Gu Qiang, an official with the State Textile Industry Bureau, told the China Daily at the time.
The United States has promised to end its quota limitations on imports of Chinese textiles by the middle of this decade, according to its agreement with Beijing on Chinese entry into the World Trade Organization -- BEIJING (AFP)
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