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Premier is shocked at US quotas on textiles

Wen Jiabao suggests the two sides hold regular meetings to resolve trade issues

Premier Wen Jiabao says China was 'shocked and wounded' by the 'unilateral' decision of the US to impose quotas on certain mainland textile imports. He called for the two sides to set up a system for regular discussions to avoid similar problems in future.

He described the American sanctions as 'arbitrary' and said they would not help solve the problem. 'I'm not just surprised, I'm shocked and the Chinese people have been surprised and shocked,' Mr Wen told The Washington Post in an interview.

'This unilateral restrictive action, occurring just at the time when the Chinese people were expressing their sincerity, and involving textile products worth only [US]$400-500 million and without any prior discussion with the Chinese government, seriously wounded the feelings of the Chinese people,' Mr Wen said.

Last Monday, a US trade panel called for 'safeguard' relief for American industry on three textile products - bras, knit fabric and dressing gowns and robes - imported from China.

The quota arrangement was announced by the US Commerce Department, and Chinese officials have since threatened retaliation against US goods.

In the interview, Mr Wen called for the two countries to establish a mechanism for equal consultation as a way to handle trade disputes. He said the US and China shared common interests in many fields and should not let trade problems upset the greater 'strategic perspective'.

'This will be one of the proposals I will bring to the United States because I think such a mechanism would play a positive role in solving problems,' he said.

Mr Wen, who is due to visit the US next month, said China was not seeking long-term and excessive trade surpluses and denied the government had deliberately devalued the yuan to gain advantages in its trade with the US.

'Our aim in trade policy is to have a basic balance between imports and exports. We are willing to open up our markets to buy more from the United States and other countries, especially to purchase hi-tech products.'

'I don't think the exchange rate of the renminbi is an important contributor to the trade imbalance ... I think it is the abundant supply of competitive labour in China.'

The premier supported his argument by saying that the central government had earlier sent buying missions to the US with orders to purchase billions of dollars worth of goods. He urged the US government to relax its export restrictions on China to help balance the deficit.

On the issue of North Korea's nuclear programme, Mr Wen stressed that the best way to resolve the crisis was through dialogue. He said he hoped that the positions of the US and North Korea were now 'closer than before'.

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