China attacks 'unfair' US quotas

The US blames Chinese imports for thousands of job losses

China has attacked the US for imposing new restrictions on textile imports, dubbing the move "trade protectionism".

Commerce minister Bo Xilai added that the new limits posed "serious threats" to China's textile industry.

US trade representative Robert Portman dismissed the claims saying America had acted within international trade rules.

The latest spat over imports came as the two held talks on the sidelines of the Asia Pacific Economic Corporation (APEC) forum in South Korea.

US safeguard actions are consistent with the WTO, our rights under the WTO Robert Portman, US trade representative

Mr Portman will travel to Beijing on Saturday after the forum to continue discussions on the issue with Chinese vice-premier Wu Yi.

The US trade representative told reporters the latest talks had been "very helpful and constructive".

'Unfair' measures

However, he defended restrictions imposed on a variety of Chinese imports - including men's and boy's shirts, man-made fibre trousers and combed cotton yarn.

"US safeguard actions are consistent with the World Trade Organisation (WTO), our rights under the WTO," he told reporters.

But China dismissed the claim, with Mr Bo saying: "This move is not fair at all. It is a move of trade protectionism."

The US has imposed restrictions on Chinese imports by invoking a special provision made when China joined the WTO in 2001, while the European Union has threatened to follow suit.

Under the ruling, countries can impose limits on China's textile imports to prevent "market disrupting" surges until the end of 2008.

The US has said that some categories of Chinese imports have surged 1,000% since the 30-year-old Multi Fibre Agreement expired on 1 January, while the US textile industry says that more than 16,000 jobs have been lost since the agreement ended.

But, in what has been seen as a "tit-for-tat" move, China discarded its offer to increase tariffs for textile exports when both the US and EU imposed quotas at the end of last month.

Under pressure

The row over textiles comes as China faces increasing pressure from Washington over its currency, the yuan, which has a fixed-rate of exchange against the dollar.

Many US politicians believe the yuan's true value is artificially depressed, helping it to export goods cheaply.

The US Senate is due to vote on a bill later this year which would impose a 27.5% tariff on all Chinese imports to the US unless China removes the currency peg within six months.

The EU is also concerned about a surge in Chinese textile exports since the end of the global quota system.

However, EU Trade Commissioner Peter Mandelson has said he favours negotiations to reduce the level of Chinese imports, rather than quotas.