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INDIA TO SET UP EXPORT HUB NETWORK
 
NEW DELHI - The Indian government is proposing to set up around 20 export-centric hubs, which it expects will help the country attract more foreign direct investment.
 
"We are looking at around 20 Special Economic Zones and the legislative process facilitating their creation should be in by next year," Jagdish Shettigar, a member of Prime Minister's Economic Advisory Council, told the Dow Jones News Wire.
 
"Our intention is to ensure that these are projected as model industrial zones where labor policies are flexible enough to attract foreign investment," he said, adding he doesn't expect a "very robust opposition" from political parties as the flexible labor laws, including hiring of contract labor, "will be restricted only to these zones."

India's Export-Import Policy, or Exim Policy, for 2002-2007 defines Special Economic Zones, or SEZs, as a "specifically delineated duty-free enclave and shall be deemed to be foreign territory for the purposes of trade operations and duties and tariffs."

Shettigar said the SEZ proposal is part of India's "liberalization drive that includes flexibility in investment norms, labor laws and wealth aggregation."

But he didn't acknowledge that the SEZs are modeled on the lines of the Chinese export zones that offer concessions to investors.

"It's wrong to draw parallels. China has a head-start in this," said Shettigar, adding India may need a decade before it catches up with its eastern neighbor on the success of duty-free economic zones and foreign cash inflows.
 
"In China, there is time-bound clearance of major projects and it takes around 40 days for approvals," said Shettigar. "We have recommended a 60-day clearance for some projects, but it's still not implemented in many cases."

Shettigar also said labor law reforms need to extend to factories located outside the SEZs to attract large foreign investment.

"If we are returned to power in the general election, we may move on some labor law reforms," Shettigar said. He didn't elaborate.
 
At present, the government is considering a proposal allowing 13 industries, including those located in SEZs, to hire labor on fixed-term contracts.
 
CHINA SLAMS WASHINGTON ON PROPOSED TARIFFS

SHANGHAI - China has sharply criticized the Bush Administration's decision to consider imposing protective tariffs on imports of Chinese bedroom furniture, assailing the investigation as a new front in an escalating trade dispute between the two countries.
 
"We strongly protest the US's decision to proceed with the probe," said Chong Quan, a spokesman for China's Ministry of Commerce, in a written statement, asserting that the US action breaks the rules of the World Trade Organization.
 
China's admonition came in reaction to the US Commerce Department's decision to open an investigation into the sales of about $1 billion worth of Chinese bedroom sets in the US, following complaints from American producers that the goods are being "dumped" on the US market at below fair market prices.
 
Beijing argues that it is being unfairly accused, noting that its trade with the rest of the world is largely balanced. It has in recent weeks announced a series of high-profile purchases of American goods, including airplanes and agricultural products, in a bid to trim its trade surplus with the US.
 
The trade battle took shape earlier this year as the Bush administration demanded that China allow its now-fixed yuan to trade freely, asserting that cheap Chinese money gives its exports an unfair price advantage.

That talk has mostly cooled after Beijing's rebuff of a series of high-level US envoys. Since then, dumping complaints have emerged as the primary battleground between the two countries.

Last month, the Commerce Department imposed protective tariffs against about $450 million of Chinese textiles and garments, then announced provisional protections against Chinese-made televisions.
 
The Chinese Ministry of Commerce spokesman called the bedroom furniture probe "the biggest anti-dumping case China has faced so far."
 
Bush administration officials have argued that China subsidizes the production of low-cost products to keep its workers employed, resulting in a glut of low-priced Chinese goods reaching American shelves.
 
But some trade experts argue that the process by which dumping claims are investigated is unfairly tilted toward domestic producers. In this case, the Chinese manufacturers must now persuade the Commerce Department that they are not dumping or face protective measures.
 
Commerce Secretary Donald L. Evans defended the dumping regime during an interview this fall.

"It is a very effective law for us to have as we try to have a level playing field for the benefit of Americans," Evans said.

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