China Calls U.S. Complaint on Subsidies ‘Groundless’?

Commerce Minister Gao Hucheng says China respects the World Trade Organization’s rules

ENLARGE

Chinese Minister of Commerce Gao Hucheng speaking at a news conference on the sidelines of the National People's Congress in Beijing on March 7, 2015. PHOTO: EUROPEAN PRESSPHOTO AGENCY

By 

DINNY MCMAHON

March 7, 2015

BEIJING—A complaint by the U.S. to the World Trade Organization accusing China of unfairly subsidizing a number of industries is “groundless,” China’s minister of commerce said Saturday, suggesting the move was part of a rising tide of protectionism.

Speaking at a news conference on the sidelines of the National People’s Congress, the nation’s parliament, Commerce Minister Gao Hucheng said that “trade and investment protectionism is again rearing its head,” and this reflected a weak global economy.

“China always respects WTO rules…and we will appropriately handle the case through the [WTO] dispute settlement mechanism,” he said, repeating a previous pledge by Beijing.

The U.S. opened a new front in a long string of trade disputes with China last month,challenging a broad program Beijing uses to subsidize export businesses ranging from textiles to seafood.

U.S. officials requested consultations with China over the subsidy program, which it said allows local officials to subsidize smaller exporters through “common service platforms,” giving Chinese companies a small but crucial advantage in exports, contrary to the rules of the World Trade Organization.

The new WTO case emerged as the Obama administration is seeking to negotiate a 12-nation trade bloc among Pacific nations, not including China. President Barack Obama last month said the Pacific agreement would help ensure China doesn’t write the rules of trade in the rapidly growing Asia-Pacific economic zone.

Analysts have said that a successful enforcement of existing trade rules, especially broad subsidies that affect diverse industries and congressional districts, may help the administration make the case for the Pacific deal, known as the Trans-Pacific Partnership, and legislation needed to ease its passage.