McClay apologises over China trade issue

Trade Minister Todd McClay has apologised to Prime Minister John Key for his handling of news reports about potential trade retaliation from China.

McClay said he has asked for a full review of the broader issues around the matter.

McClay and Key answered reporters' questions about it while in Indonesia last week.

"At the time I should have requested a more thorough briefing before I responded to questions on this issues, " he said in a statement today.

"I have apologised to the Prime Minister for not being able to provide more details at the time."

The media inquiries followed suggestions in Fairfax media that China could be preparing for a "trade war" in response to an investigation by New Zealand officials into alleged dumping of steel.

McClay denied any knowledge of retaliatory action, saying his Chinese counterpart did not raise it with him when they spoke in Shanghai the previous week.

But it came to light part-way through last week that McClay had been told by New Zealand embassy staff in Beijing that the possibility of retaliatory action had been raised with a Zespri staffer in Beijing by someone in a related trade association of kiwifruit importers.

That rumour was checked out by New Zealand officials with China's Ministry of Commerce and said to have had no foundation.

China's ambassador to New Zealand, Wang Lutong, has also given similar assurances to the Ministry of Foreign Affairs and Trade in Wellington.

McClay emphasised that again in his statement today: "The Government has sought and received assurances from the Chinese Government that any competition issues [on steel] would not impact on trade between the two countries."

"I would like to reiterate that through our engagement on this issue we have sought and received assurance from the Chinese Government that any concerns around retaliatory actions are unfounded."

The Ministry of Business, Innovation and Employment is thought to be undertaking preliminary inquiries to determine whether a formal inquiry into alleged steel dumping should occur.

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