The cancellation will affect almost all Chinese exports to the EU, including textiles and apparel, household electronic appliances and optical equipment.

The EU says it will raise tariffs on Chinese commodities from the existing 3.5 percent to 5 percent in October.

It also plans to exclude Chinese commodities completely from the GSP in the first half of next year.

Under the GSP scheme, developed countries grant reduced tariffs to finished and half-finished industrial products from developing countries.

Analysts say the EU's GSP cancellation will not harm China's exports in a long run.

(Xinhua News Agency August 19, 2003)