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China denies making trade threats

NZ NewswireNZ Newswire 18/07/2016

China has denied threatening to retaliate against New Zealand exporters if an inquiry is launched into allegations that cheap steel is being dumped here.

However, Trade Minister Roger McClay has confirmed the government was told a Chinese industry body had contacted a New Zealand exporter in China "raising some concerns".

But when the embassy in Beijing checked this out with the Ministry of Commerce of China, its equivalent of a trade ministry, the contact was denied.

"They have said they have no knowledge of it and they have denied it, and it has been put down to absolutely unsubstantiated rumour," Mr McClay told reporters on Tuesday.

And Zespri, the exporter reported to have been warned about trade retaliation, has issued a statement saying that two weeks ago its local staff in China received "unsubstantiated information" from an industry body.

This was passed on to the New Zealand embassy.

"Outside of this single communication, Zespri has no further information on this matter and reports that Zespri was called in for a meeting in Beijing or was in some way pressured by the Chinese government are false," it said.

During the weekend Fairfax Media reported Pacific Steel had lodged a confidential application for an investigation into imports of cut-price Chinese steel.

The report said China, believing New Zealand was part of a hostile US-led trade alliance, threatened reprisals against dairy, wool and kiwifruit exports.

Mr McClay, who is in Indonesia with Prime Minister John Key, told his officials in Wellington to talk to the Chinese embassy about the reports.

That discussion took place on Monday.

"The Chinese embassy has also confirmed that they are not aware of any impending trade sanctions from the Chinese government directed towards New Zealand or any specific New Zealand companies," Mr McClay said.

The rules around complaints of dumping - exporting products at below cost price - mean the Ministry of Business, Innovation and Enterprise won't confirm or deny an inquiry application until it makes a decision on it.

Prime Minister John Key has previously denied any knowledge of Chinese discontent.

China's huge steel industry has been relying on export sales as domestic demand slows.

The US has criticised its tactics and a potential trade battle is looming between the two economic giants.

China says it's being blamed for problems caused by a global steel glut.

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