China warned ‘not to hide export incentives’

ALAN PEAT
CHINA WILL have to play the same game if it expects freedom to export into Europe. In a joint statement to the International Herald Tribune, European Union (EU) external affairs commissioner Benita Ferrero-Waldner and trade commissioner Peter Mandelson said: “We will only be able to maintain the case for openness in Europe if China shares reciprocal openness and readiness to play by the rules of trade.” The hidden warning in this statement was aimed at China’s trade policy, where government tends to hide all sorts of export incentives and rebates in various loopholes in its corporate tax system, for example. According to the report, released to FTW by the Southern African Trade Law Centre (tralac), the EU has suggested that China must redouble market reform efforts and its commitment to economic openness. If not, it hinted, China could face “a protectionist backlash”.