Hiranuma warns of China trade war damage

Chinese shoppers look at Japanese mobile phones on display in Beijing

By staff and wire reports

TOKYO, Japan -- Japanese Trade Minister Takeo Hiranuma warned Tuesday of substantial damage from punitive Chinese tariffs on Japanese exports to China.

Hiranuma also said China had failed to respond to a request for talks in Beijing aimed at resolving the trade row between the two Asian neighbors.

Last Friday China imposed tariffs of 100 percent on imports of Japanese motor vehicles, mobile phones and air conditioners.

It said this was in response to what it called Japan's discriminatory imposition in April of emergency tariffs on imported Chinese onions, shiitake mushrooms and tatami mat rushes.

China-Japan trade has grown rapidly in recent years and now represents one of the world's key bilateral economic relationships. Two-way trade grew almost 26 percent last year to $83 billion.

Key trading partners

Japan is China's largest trade partner, while China is Japan's second biggest partner after the United States.

Hiranuma said he wanted to send a high-level mission to Beijing to ask China to abandon the duties it imposed last Friday.

He estimated that Japanese manufacturers would lose 67 billion yen ($541 million) a year if China maintains its punitive duties.

"I don't think this is a small figure," he told reporters.

"These products have high growth potential so the damage could be quite substantial if the problem is prolonged."

The dispute comes at a crucial time on the world trade scene. Chinese trade officials begin talks in Geneva on Thursday on procedural questions over its membership of the World Trade Organization.

China wants to wrap up the talks before a WTO ministerial meeting in Qatar in November. There are still some outstanding issues it has to resolve with WTO members before it can be admitted.

Talks to focus on import curbs

Hiranuma said he hoped Japan's trade dispute with China would be resolved as soon as possible.

Talks between top officials from the two countries scheduled for next week in Tokyo will focus on Japan's curbs on imports of three Chinese farm products rather than the Chinese duties, Hiranuma said.

The Japanese action in April was widely seen a move to protect Japan's politically important farm sector ahead of elections next month.

According to the China Daily, Long Yongtu, vice-minister of China's Ministry of Foreign Trade and Economic Cooperation, said recently the time and place of solving the dispute depended entirely on Japan.

Reuters contributed to this report.