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Beijing hits back at WTO with metals export quota

July 9, 2011 (Source: South China Morning Post) — China has announced new export controls on coke and non-ferrous metals in defiance of a recent World Trade Organisation ruling that it was breaching global trade rules on raw materials shipments.

The Ministry of Commerce yesterday said new export quota  arrangements applied to coke – burned to produce steel – and to non-ferrous metals such as molybdenum, antimony, tungsten and silver. These are widely used to produce hi-tech products, catalysts and military weapons.

The controls come three days after the WTO ruled against Beijing’s decision in 2009 to impose export duties and quotas on 20 types of raw materials, including coke, saying it had broken a promise to the body to cut tariffs and trade barriers.

The Ministry of Commerce will have to determine whether to appeal against the WTO ruling but market watchers expect an appeal to be made.

“It is not a surprise,” said Johnson Chan, vice-chairman of the Hong Kong Energy and Minerals United Associations, of China’s latest quota arrangement. “China puts priority on feeding its own needs so that it will meet its objective to be a hi-tech manufacturing hub.”

Chan said China could curb exports by restricting upstream exploration and production of natural resources as well as by imposing export levies and quotas.

China imposed a quota and a 40 per cent export tax on coke in 2009, which saw its exports decline by one-third to 8 million tonnes last year. In the first six months of this year, coke exports stood at 4.6 million tonnes.

Bauxite, the most important ore used in the production of aluminium, is subject to a 15 per cent export tax.

Raw materials including minerals, minor metals and rare earths are in global demand as China, a key exporter, seeks to jump up the manufacturing value chain.

China’s export duties and quotas on the 20 types of raw materials in dispute is a prime example, with the United States, European Union and Mexico claiming initial victory in their complaint following the WTO verdict this week.

They claimed that China was choking off the world’s supplies of these raw materials, which would  result in higher global prices.

The raw materials in question include bauxite, coke, fluorspar, magnesium, manganese, silicon carbide, silicon metal, yellow phosphorus and zinc, which are used to produce everything from electronic goods and aircraft to technology products and detergents.

How is China Responding to the Backlash Over Its Metal Export Quotas?

China’s restrictions on metal exports have triggered a strong backlash. In response, China has defended its policies, stating that they are in line with international trade rules. However, other countries argue that these restrictions have disrupted global supply chains and are seeking recourse through the World Trade Organization.

How Does China’s Increase in Export Quota Impact Beijing’s Response to the WTO?

China’s increased export quota has sparked discussions about Beijing’s compliance with the WTO. Many are watching closely to see how the country’s response will impact international trade relations. As China continues to expand its export capabilities, it will be interesting to observe how the WTO handles this development.

Does China’s export quota on metals impact the concept of ‘Chinopoly’?

China’s export quota on metals is a clear example of Chinese influence in monopolistic industries. By controlling the export of metals, China has the power to impact global supply and demand, potentially reinforcing the concept of “Chinopoly” in the global market for these resources.

How Does Beijing’s Export Quota Affect the Rare Earth Projects of Tantalus & Rhodia?

Beijing’s export quota has a significant impact on the rare earth projects of Tantalus & Rhodia. The restrictions on exports have limited access to critical materials, creating challenges for these companies. However, the increasing demand and limited supply can ultimately set stage for growth in the rare earth market.

How Does Beijing’s Export Quota on Metals Impact the WTO Process?

Beijing’s export quota on metals has raised concerns about potential violations of WTO rules. This move could impact the wto process in action, as it may violate the principles of non-discrimination and be deemed as a barrier to free trade. It will be interesting to see how the WTO addresses this issue.

How is Beijing Responding to the WTO’s ruling on export quotas?

Beijing is facing the WTO’s ruling on export quotas complaint. The city has expressed disappointment and is evaluating the decision’s implications. Beijing is committed to complying with international trade rules but is also focused on safeguarding its domestic industries. This ruling will likely impact China’s export policies.

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