Chinese coke enterprises are giving a strong reaction to the European Union's threatened World Trade Organization (WTO) legal action against China in the dispute over coal, and appealing the government to conduct continuous export policy.

Just this week, two meetings for countermeasures against the EU's threat were held by the China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters (CCCMC), which is engaged in research on the international economic and trade situation and putting forward policy proposals to the government.

Dozens of delegates from both producers and exporters of coke insisted that the government should not suddenly terminate the long-term restriction measure on coke export, otherwise, the coke industry will encounter "catastrophe" and a new trade conflict will easily occur.

According to the CCCMC, China actually exported 14.72 million tons (with the left quota from 2002 calculated) of coke, a key raw material for steel makers, to more than 51 countries and regions across the world last year, making up 60 percent of the total trade volume.

This year, China cut down its coal export quota by 26 percent from 12 million tons for 2003 to current nine million tons to meet the rising demand from its booming steel and power industries, which mainly hit exports to Europe and Japan.

China totally exported 1.45 million tons of coke in first two months of this year, declining by 49 percent over the same time of last year, especially the export to the European countries falling by 66 percent, which aroused some panic among its steel giants.

The coke question, believed a serious one for the European steel industry by the EU, then was discussed during a visit to Brussels by Chinese Prime Minister Wen Jiabao and Trade Minister Bo Xilai in early May, but no solution was found.

The EU then threatened to launch its first action against China at the WTO, saying China has broken trade law by restricting exports of coke and thereby reducing global supplies and forcing up world prices to "dizzying" heights.

However, the Chinese coke enterprises emphasized that China has the same right as other countries do to reasonably protect its strategic resources, including coal and coke.

They also gave an example as saying that Australia is planning to set a ceiling to its coke export.

Meanwhile, China conducts restriction measures on coke export to all the importers, not just to the European steel makers, and how much and at what price to export are independently decided by the domestic exporters according to the international market.

They also believed that the lack of supply was led by a temporary unbalance of coke and steel markets, and the so-called "dizzying" price will fall sharply soon as the supply and demand situation changes.

On the contrary, they argued, canceling the limit on coke export at once can easily lead to domestic production in chaos and put the competition out of order, jointly resulting in higher pressure on environment protection of the country.

In fact, the developed countries gradually reduced coke output and even stopped producing coke just because the coke industry is highly contaminated even if its production is under strict environmentally-friendly conditions.

The attendees to the meetings also pointed out that discontinuous policy on coke export will trigger new trade conflict for heavily tightening quota can lead to steep price and on the contrary, slump of price after canceling the limit suddenly will easily bring on a new anti-dumping suit over the product.

The EU launched anti-dumping legal action on China's founding coke and imposed a relative tariff of 32.6 euros per ton since 2000. The measure was suspended not long ago but not terminated for ever.

The delegates suggested at the meetings that the government should keep stable coke export quantity under the ongoing quota administration system, which can not only help maintain a balance between the domestic and overseas markets, but also maintain a sound order for its whole foreign trade.

The talks on the dispute over coke between China and the EU is still underway.

The 25-nation EU gave extra two weeks to May 28 as the deadline for its WTO complaint after its formerly-set deadline expired last Friday.

During the period, the EU was quoted as saying it privileged trying to find a solution without having to go to the WTO.

(Xinhua News Agency May 23, 2004)