The Chinese reaction to the trade complaints was slightly stronger than China’s statement on March 31 regarding American duties on imported paper. That statement expressed “strong dissatisfaction,” but did not mention “deep regret.”  The Bush administration announced on March 30 that it would impose duties on imports of coated paper from China to counteract what it said were government subsidies to the Chinese paper industry.  An editorial in the official China Daily newspaper on Wednesday took the toughest Chinese position yet, warning that, “In fact, actions against China could trigger an outbreak of massive protectionism that could seriously undermine global economic growth.”  The editorial described the United States as engaging “in a series of protectionist actions,” and added that, “While such protectionist moves may appeal to some U.S. industries or interest groups for a while, they do nothing to promote the restructuring the U.S. economy needs to reduce its budget and trade deficits.”  China’s customs agency released statistics Tuesday showing that Chinese exports to the rest of the world grew last month at the slowest pace in five years, rising just 6.9 percent from a year earlier. Correspondingly, the country’s trade surplus narrowed to $6.9 billion in March, from $23.8 billion in February.  But the surplus for the entire first quarter doubled from a year earlier, to $46.4 billion. And economists predicted that the surplus would continue to rise and dismissed the importance of the slowdown in March.  “So, in our view, this number will do nothing, zilch, nada, to address political concerns in the U.S. about China’s overall trade surplus,” Stephen Green, an economist in the Shanghai offices of Standard Chartered Bank, wrote in a research note.  The deceleration followed a slowdown of exports from the major Southeast Asian economies: Indonesia, Malaysia, the Philippines, Singapore and Thailand. That has prompted some in Asia to worry whether industrialized countries were losing some of their appetite for Asian goods.  But economists said that last month’s slowing of exports from China was probably temporary, a result of short-term events.  Many exporters made extra shipments in February before a threatened phase-out of certain tax rebates in China. Exporters had expected the phase-out to be broadened at the start of March to cover more products, but this has not yet happened.  The Chinese New Year also fell unusually late in February, so many factories that closed then may have had fewer goods ready for shipment in March, said Liang Hong, an economist in the Hong Kong offices of Goldman Sachs. The Chinese New Year started nearly three weeks earlier last year, so exports were stronger in March 2006.  The slowing of exports was not a result of any sudden move in the value of China’s currency. The currency, the yuan, was virtually unchanged against the dollar in March, after rising steadily through January and February.  The statistics released on Tuesday were a “flash” estimate of overall exports, imports and the trade balance that the government provides on a schedule set months in advance. It did not include figures for trade with individual countries.  Ma Jun, an economist in the Hong Kong office of Deutsche Bank, said that the bank’s monthly survey of Chinese purchasing managers had found that their incoming orders for future exports had increased faster in March than in any month since the survey began in early 2005.  Facing criticism from Congress that more should be done to address the widening United States trade deficit with China, the Bush administration announced Monday that it would file complaints with the W.T.O. The complaints, which were lodged at the organization’s headquarters in Geneva on Tuesday, accuse China of tolerating widespread violations of trademarks and copyrights and of unfairly limiting the importation of books, journals, movies, videos and music to state-owned companies.  The Commerce Ministry in China posted its response on its Web site at midday Tuesday, an unusually quick move by the Chinese government’s standards.  Mr. Wang denied the American allegations, saying that “the Chinese government has always been firm in protecting intellectual property.” He added that until now, China and the United States had been “in good communication and consultation with each other over access to the Chinese publication market.”  The statement and the one on March 31 regarding coated-paper duties were both notable for citing Mr. Wang by name, instead of a more senior official. Chinese government ministries cite spokesmen and spokeswomen in most pronouncements, but sometimes cite more senior officials on issues considered to be of grave importance.  China is far more dependent on exports for economic growth than any other large country, and it has shown reluctance to be drawn into a broad dispute with the United States.  The Chinese government faces domestic pressures to not be seen as caving in to American pressure.  A steep rise in China’s currency would make Chinese exports less competitive in foreign markets and would make imports more competitive in China, so the Bush administration and many members of Congress have made this a top priority. Complaints to the world body and duties on narrow categories of American imports like coated paper tend to have a limited effect on monthly trade figures.  But senior Chinese officials are worried that a steep rise in the currency could result in job losses at factories and on farms as imports become more competitive, and that unemployed workers could become a threat to social stability.
The American decision to complain to the World Trade Organization will “seriously undermine” relations on trade, the Chinese government said.