BEIJING - China denounced as protectionist new U.S. anti-dumping duties on steel pipes and launched its own investigation into imports of U.S.-made automobiles on Friday, a week before a visit by President Barack Obama.

It also called for Washington's swift recognition that China is a market economy, which would make it harder for the United States to declare Chinese products are dumped.

China's calibrated response may be an attempt to avoid a tense atmosphere in the hope of concessions during Obama's visit.

China does not want bickering to spoil the visit. That's a priority, said Wang Yong, a professor at Peking University who specializes in China-U.S. economic ties.

Obama may, say, announce progress on recognizing China as a market economy during the visit, and so before that he needs to show people at home that China must play by the rules.

The United States on Thursday slapped preliminary anti-dumping duties on $2.63 billion in Chinese-made pipes used in the oil and gas industry, in the biggest U.S. trade action against China to date. That follows countervailing duties on the pipes, announced in September.

China resolutely opposes the abuse of protectionist measures, China's Commerce Ministry said on its website.

Obama will visit China for several days from November 15 and trade disputes are likely to feature prominently.

China's investigation would target sedans with engine capacity of 2 liters and above, as well as sports utility vehicles, the Commerce Ministry said, issuing a long list of incentives and tax breaks granted by the U.S. federal government and the state of Michigan.

We hope that the U.S. will set aside its biases and as quickly as possible recognize China's market economic status, thoroughly overcoming its double standards and giving equal and fair treatment to Chinese firms, it added.


In trade meetings with U.S. officials last week in the city of Hangzhou, the Chinese side pressed for recognition as a market economy, before the 2016 deadline negotiated when it entered the World Trade Organisation.

We hope that the U.S. will abide by the principles of free trade and non-discrimination in trade under WTO rules in handling this issue, said vice minister of commerce Yi Xiaozhun.

Washington promised to set up a panel to consider the issue.

The U.S. should give objective consideration to the fact that the fundamental problem of the concerned U.S. industries is the fall in consumption demand brought on by the financial crisis, and thereby make a just, fair and reasonable final determination on the steel pipe duties, the ministry said.

SUVs and other imported luxury cars have become more common on the streets of Beijing in the past year, while Chinese car stimulus measures have helped boost domestic sales of the family cars made in China by Chinese and foreign manufacturers.


As long as China has no recognition as a market economy, trade partners can compare its products with those of other nations with different cost structures for labor or transport, when assessing whether products have been dumped.

Export-dependent Chinese industries are dominated by private firms, which cut margins to the bone by competing with each other at home and for export markets. Entrepreneurs pile into any promising industry, creating overcapacity that destroys profits.

Pipes that can carry highly corrosive oil and natural gas presented a new opportunity for Chinese steel processors moving up the value chain. Exports to the United States, their biggest market, tripled to $2.63 billion in 2008 compared with 2007.

These duties have a big effect, and we no longer export to the U.S. The measure has been threatened for a while, and clients don't dare order from Chinese producers any more, said Zhang Kemin, of producer Changzhou Darun, which now targets the Ukrainian market.

Similar trade disputes have piled up as the global economic crisis increased competition with American manufacturers.

China is particularly upset by the first U.S. safeguard duties, against tires, because these only have to show a surge in exports, without proving dumping or subsidies.

This has set a very bad example. China must keep cool-headed and make long-term preparations, Wei Jianguo, a former vice minister of commerce, wrote of the safeguard duties in Southern Breeze, a Chinese current affairs magazine.

China must be decisive and not at all polite.

The U.S. International Trade Commission votes on Friday on whether to approve three more probes covering coated paper, certain standard steel fasteners and sodium and potassium phosphate salts from China.

At the moment, most of our firms who export are private firms. They get really hurt by any obstacles to exports, said Yang Junfeng, who runs an information portal for fastener producers. He said the threat of duties against Chinese fasteners had benefited Taiwanese exporters over their mainland rivals.

China on Thursday said it would study policies in the states of Arkansas, Alabama and Texas as part of its anti-subsidy investigation into chicken parts imported from the United States.

(Editing by Dean Yates and Alex Richardson)