China worries about trade friction

China's Commerce Ministry said it is worried that Europe's debt crisis could spill over into trade friction and hurt the country's exports.

China's Commerce Ministry said it is worried that Europe's debt crisis could spill over into trade friction and hurt the country's exports.

The comments from ministry spokesman Shen Danyang come as European countries struggling with a growing debt crisis are fighting Beijing over trade barriers.

China is also pressing the European Union to grant China market economy status under world trading rules that would relax remaining trade obstacles.

"As the crisis within the EU intensifies ... bilateral trade friction may be increased, which is detrimental to China-EU economic and trade relations," Mr Shen told a regular news briefing.

"Of course, we believe there's opportunity in the crisis. Everyone can work hard together to turn the crisis into an opportunity."

Beijing is also under pressure from Washington and other trading partners to ease currency controls that they complain keep the country's currency, the yuan, undervalued and swell China's trade surplus. The communist government has allowed the currency to rise but not as fast as critics want.

US Trade Representative Ron Kirk is set to announce a "major trade enforcement" action against China later today, according to a statement on the USTR website.

Mr Shen said China is disappointed that it has not been recognised as a market economy by the European Union, despite its rapid economic transformations.

"After 30 years of reform and opening up, China has completed the transformation from a planned economy to a market economy, but the EU still does not recognise China's full market economy status. China is very disappointed," Mr Shen said.

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