WASHINGTON (AP) — The United States is challenging China at the World Trade Organization, alleging that the Chinese government unfairly subsidises exports in seven industries.
The Office of the US Trade Representative said Wednesday that China designates certain export companies as “demonstration bases” that receive free or discounted services from suppliers. The US says China paid the suppliers almost $1 billion over three years to provide those services.
Getting help are textile and clothing makers, advanced materials and metals companies, light industrial firms, specialty chemical manufacturers, medical product makers and agricultural firms.
The US says the subsidies violate WTO rules.
“If you’re a Chinese textile firm designated as a demonstration base, you might get subsidised IT services, subsidised product design services and subsidised training services for their employees, showing them how to use yarn spinning techniques and weaving technologies,” US Trade Rep Michael Froman said. “All of these services, provided for free or at a discount, undermine fair competition.”
The challenge arose from an earlier investigation into Chinese subsidies of auto and auto parts exporters.
The move is the first step toward bringing a formal case against China. The USTR said it will try to reach a settlement with China at the WTO. If that fails, the US can ask the WTO to rule on the dispute.