BEIJING — China said Friday it would slap stiff penalties on a variety of US chicken meat it says is being sold at an unfairly low price, in the latest move likely to up the pressure on strained Sino-US relations.

The commerce ministry, in a preliminary ruling, said importers of US broiler chicken in China would have to pay deposits based on the difference -- up to 105.4 percent -- between the meat's normal value and the alleged cut price.

"Broiler products imported from the United States were dumped (in China) and the domestic broiler sector has suffered material damages" as a result, the ministry said in a statement on its website.

The measure is to take effect on February 13. The ministry did not say when a final ruling would be made on the issue.

Dumping occurs when a foreign company sells a product in another market at less than its normal value -- generally taken to mean either the price in the domestic market or the production cost.

China formally launched an anti-dumping and anti-subsidy investigation into US chicken meat imports in September after receiving complaints from domestic producers.

That move came a day after the US slapped steep tariffs on imported Chinese tyres.

The US has imposed duties on a number of other Chinese imports, from electric blankets to steel tubes and wire decking.

Li Wei, an analyst at the government-linked Chinese Academy of International Trade and Economic Cooperation, said the impact of the disputes that have emerged so far were limited given the immense volume of bilateral trade.

But he warned there would be "terrible" consequences if the rows were to escalate further.

"Trade relations are mutually dependent -- one is almost sure to take corresponding measures if the other turns (aggressive)," he said. "The overall trade will definitely suffer in that case."

Ties between the two nations are badly strained over a number of issues -- from the value of the Chinese yuan and trade disputes to US arms sales to Taiwan and US President Barack Obama's plans to meet the Dalai Lama.

On Wednesday, Obama again piqued China's ire by saying his administration had decided to get "much tougher" about enforcement of existing trade rules.

Beijing hit back, saying "wrongful accusations and pressure" would not help resolve Sino-US disagreements.

The United States and China are also at odds over Internet freedom, after Google threatened to pull out of the communist nation following what it says were cyberattacks on the email accounts of Chinese human rights activists.

(AFP) – February 04, 2010

Source: afp.com