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China says U.S. protectionism jeopardizes trade ties

BEIJING (Reuters) - China has accused the United States of straining their vast economic relationship through a slew of anti-dumping measures, adding to growing tensions between the two global powers.

The spokesman for China's Ministry of Commerce, Yao Jian, made the comments on Monday, responding to a U.S. trade panel's recent decisions to set preliminary anti-dumping duties on electric blankets and wire decking from China.

Yao's warning came while Beijing is also at loggerheads with Washington over U.S. arms sales to Taiwan, the self-ruled island that China deems a breakaway province.

His strong words suggested trade friction could stoke broader tensions between the world's biggest and third-biggest economies.

"Since the outbreak of the financial crisis, American trade protectionism has clearly raised its head, and China has become the biggest victim of U.S. abuse of trade relief measures," Yao said in a Chinese-language statement posted on his ministry's website (www.mofcom.gov.cn).

"Currently, trade protectionism is seriously affecting the stable development of Sino-U.S. trade and economic relations, and the U.S. should fully grasp the severity of this problem."

The warning reflected the increasingly testy trade relations between China and the United States.

Washington has said Beijing is unfairly keeping its exports cheap by holding down the value of its yuan currency, and is frustrating U.S. companies seeking to expand business in China.

Last week, U.S. Commerce Secretary Gary Locke said Chinese policies that promote domestic firms and create barriers against foreign ones could cause American companies to lose interest in China.

In what appeared to be an oblique swipe at Locke, Yao said recent comments of an unidentified senior U.S. commercial official were "totally contrary to the facts."

"Now some countries engage in trade protectionism, and then turn around and accuse others, and this is totally unreasonable," said Yao.

Annual Chinese exports to the United States could approach $300 billion in 2009 when final statistics are in, down from $338 billion in 2008, but a much smaller drop than for many other countries that export products to the U.S.

U.S. steel makers, other industry groups and unions have filed dozens of cases in recent years accusing Chinese competitors of receiving government subsidies and selling goods in the United States at unfairly low prices.

With a few exceptions, the trade panel in Washington has approved substantial tariffs under anti-dumping and countervailing duty orders renewable every five years.

(Reporting by Chris Buckley; Editing by Paul Tait)