China will overtake Japan as the country with the largest share of the United States trade deficit next year, a move that could become a concern to 'protectionists' in the US. But according to Stern Group president Paula Stern, China should not take US competition concerns as a signal to retaliate. Ms Stern, a former US International Trade Commission chairman and senior presidential adviser on trade and international economic policy, was addressing American Chamber of Commerce members on foreign and economic policy implications of a new US government. She said China's accession to the World Trade Organisation - expected this year - was not just about becoming a member of a club, it should be seen as the key to embracing competition. 'China is likely to overtake Japan as the country with the largest share of the US trade deficit,' Ms Stern said. 'If the US economy really slows down and we get significant unemployment . . . that will fuel a kind of protectionist criticism of China and what it does to our trade deficit.' She said China had a tendency to see itself as a victim of developed countries, particularly when the latter used safeguards to protect their domestic industries. An example was the anti-dumping duty imposed by South Korea against Chinese garlic last year, a move which prompted China into retaliatory tariffs against Korean mobile phones. This forced Seoul to back down. 'China has threatened to do the same with the US,' Ms Stern said. But this would only show China was not playing by WTO rules. 'Taking a defensive stance can complicate China's credibility as an economy that both accepts and is willing to play by the rules of the international system,' she said.