THE NEW YORK TIMES

INTERNATIONAL MONDAY, NOVEMBER 11, 1996

CHINA ANNOUNCES TRADE PENALTY AS REPLY TO SIMILAR U.S MOVE

SHANGHAI, Nov. 10 - China announced a ban on imports of selected goods from the United States today, stepping up a trade dispute withe the Clinton administration and sending a blunt signal that it will not easily succumb to pressure. With Secretary of State Warren M. Christopher to visit here in less than two weeks, the promise to further restrict China's market from American exporters seemed timed to draw maximum attention. Mr. Christopher plans to leave office soon, and his successor appears likely to face a growing number of trade disputes with China.

American textiles, farm goods and alcoholic drinks will be affected by the ban, effective Dec. 10, according to an announcement by China's Foreign Trade Ministry and customs office.

A specific list of the affected items will be drawn up by then, said the trade authorities, who did not estimate how much trade would be affected or say how long the band would last. "The decision was made in response to the U.S. unilateral cut of import quotas of Chinese textiles," said the announcement, carried by the New China News Agency, referring to a move by Washington in September.

Washington and Beijing have battled for years over how to count Chinese textile exports to the United States, but the problem has grown stickier in recent months as China has emerged as the country with the biggest trading surplus in American markets, expected to exceed $30 billion by the end of the year.

On Sep. 6, Washington levied a $19 million penalty on China, saying Beijing had tried to evade textile quotas by transshipping goods through third countries, where garments are sometimes labeled to disguise their origin. American officials said they had detected repeated violations of a 1994 United States-China trade accord.

Today, Chinese trade officials accused Washington of acting before it had fully consulted them and of acting without clear evidence, itself a violation of the bilateral textile agreement.

"We wish to urge the United States to handle trade disputes in the spirit of advancing bilateral trade and refrain from taking any actions harmful to bilateral trade in the future," the announcement said. It added that China "opposes any practice intended to impose the will of one side on others in trade dealing."

Beijing and Washington narrowly avoided a trade war in June, when a dispute over how to enforce copyright protection of American music, computer software and movies threatened to provoke sanctions in each direction that would have totaled $2 billion.

The dispute over textiles looks minor and symbolic in comparison, with China expected to target America imports worth about the same as the $19 million worth of goods excluded by Washington. Yet an American official said there was a danger that China's reaction would provoke retaliation from Washington.

"We're probably going to have to respond with something else," said the official, who spoke on the condition of anonymity. "You're never sure where it will lead. "The official said the trade dispute would certainly be on Mr. Christopher's agenda when he visited Beijing and Shanghai this month. China's exports are increasing sharply, as it produces toys and footwear and clothing that American consumers want, and are expected to push up China's trade surplus with the United States by more than 10 percent this year.

On top of political differences over Taiwan and human rights, trade disputes make China a popular target in Congress.