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China Needs To Be Open About Industrial Subsidies

U.S. and EU call for a complete accounting.

The U.S. and EU accused China at the World Trade Organization on Oct. 27 of failing to come clean over the subsidies it pays to industry, trade officials said. State subsidies for the industrial sector are prohibited under WTO rules.

The EU said in a statement that China's notification of subsidy payments "still appears to be incomplete as it focuses only on subsidies provided at a federal government level and omits the substantial subsidies that China maintains." China had omitted aid paid by local and regional authorities, it added.

Beijing has committed itself to the elimination of subsidies to industry under the provisions of its agreements with the WTO when it joined in 2001. China told the meeting it was determined to respect the agreement on subsidies, but called on other countries not to exaggerate the situation, trade sources said. It also rejected the EU's assertion that Beijing also gave sales tax refunds to some exporters in the chemicals industry and metals industries saying it was not a subsidy issue, the sources added.

It was the first time that China's subsidies were examined by the committee under the WTO's triennial review process. The 149 members are being given an opportunity to quiz China about its subsidy regime.

Copyright Agence France-Presse, 2006

TAGS: Trade
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