November 21, 2003
Analysts Say Soybean Trade Likely To Be Hurt By Sino-US Textile Row
The Bush administration's move to impose quotas on imports of some Chinese textile goods will likely hurt agricultural trade between the two economic giants, particularly soybean trade, a senior Chinese analyst said late Thursday.
"I don't think it's good for the two countries. It's not a win-win solution," Jikun Huang, a professor and director of the Center for Chinese Agricultural Policy at the Chinese Academy of Sciences said.
Tuesday, the U.S. imposed safeguard measures on bras, bathrobes and knit wear from China that will cap for one year the import value of these products at 7.5% above the value of shipments over the past year.
Following that decision, China delayed a delegation scheduled to leave for the U.S. this week on a buying trip for a range of U.S. agricultural products such as wheat, soybeans and cotton.
A Chinese trade delegation to the U.S. last week signed deals to buy U.S. automobiles, jet engines and commercial aircraft.
U.S. officials had been counting on these shopping trips to help narrow a ballooning U.S. trade deficit with China, expected to widen to more than US$120 billion this year.
China also said this week it would slap higher tariffs on U.S. imports if Washington doesn't lift sanctions on steel imports.
"China is a large trading partner of the U.S. and imports a lot of U.S. soybeans. Any kind of trade conflict definitely will (spill over and) have some impact (on soybean trade)," said Huang who is in Singapore attending an economic and environment workshop.
Although China produces soybeans, it is also the world's largest importer of the commodity. Chinese traders and analysts have estimated the country could import a total of 25 million metric tons of soybeans in the October 2003- September 2004 marketing year, to cater to its burgeoning crushing industry. Imports in 2002-03 totaled 21.42 million tons, coming from the U.S., Brazil and Argentina.
Huang said the trade row will hurt both China and the U.S., "but will benefit" the other suppliers of soybeans to China, namely Brazil and Argentina.
So far, China has committed to buy about 7 million tons of U.S. soybeans in 2003-04, and total imports from the U.S. could reach 10 million tons by the end of the marketing year, said traders.
In 2002-03, China imported 7.68 million tons of U.S. soybeans valued at US$1.5 billion at least.
For wheat, Chinese officials indicated weeks ago that China could buy up to 1 million tons from the U.S. Now, that intention has been put on hold with the delayed buying trip.