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China has warned the United States that trade between the two countries will suffer if Washington goes ahead with plans to cap imports of Chinese textile products, RFA's Mandarin service reports.

U.S. Ambassador Clark Randt was called in by the Chinese vice minister of commerce, Ma Xiuhong, for an emergency meeting Thursday, a day after his meeting with vice foreign minister Zhou Wenzhong, official media said.

Trade tensions flared after the United States said it would cap imports of Chinese bras, knit fabrics, and dressing gowns, in an attempt to protect U.S. jobs ahead of a presidential election campaign.

The row comes just a few weeks ahead of a state visit to Washington by Chinese Premier Wen Jiabao.

Ma told Randt the U.S. decision would negatively impact China-U.S. trade and harm the United States' domestic interests. She called on Washington to withdraw "its wrong decision."

Sino-U.S. trade experts said the dispute was fairly small in the wider context of bilateral trade ties. "I don't think this is one of the more serious issues that threatens our relationship with China," Edward F. Hartfield of the U.S.-based National Dispute Center told RFA. "It may well be the case that this is simply a bargaining chip to exercise some leverage."

However, others said the move could do damage indirectly, by altering perceptions of the stability of the trading relationship.

"There could be a negative impact on the Chinese textile industry in other ways, if the United States starts to use these sorts of measures, even though the amount of trade affected is comparatively small," Zeng Ka, a China-U.S. trade dispute expert at the University of Arkansas, told RFA's Mandarin service.

Zeng said the possibility of future restrictions by Washington could affect some buyers' perception of the reliability of using Chinese suppliers. "Some overseas companies may become reluctant to send purchase orders to China," she said.

China says the U.S. decision fails to conform to the U.S. Committee for the Implementation of Textile Agreements procedures on special safeguards against Chinese textile products and garments.

"The U.S. administration's decision to request negotiations regardless of the facts runs against the WTO principles on free trade, transparency and non-discrimination," Ma was quoted in official media as saying.

China has warned it could retaliate, although it said last week it was studying plans to impose duties on some U.S. manufacturing products.

The State Department has responded neutrally to Beijing's concerns.

"We value a dialogue on trade matters, including the issue of textiles," State Department deputy spokesman Adam Ereli said.

"We are aware of Chinese concerns regarding our decision to request consultations with China regarding the imports of knit fabric, dressing gowns, and brassieres," he said. "Once we formally request consultations, we will engage in a dialogue with Chinese officials as to what the final level of the quota will be."

As the dispute rumbled on, U.S. Federal Reserve Chairman Alan Greenspan called for action to counter "creeping protectionism" in the United States and elsewhere that threaten the global economy.#####


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