US sees ‘troubling trend’ of Chinese economic intervention (AFP)

WASHINGTON (AFP) – The top US trade official expressed concern over a “troubling trend” toward Chinese state intervention in the economy, according to an annual report sent to Congress on Thursday.

Amid a swathe of trade disputes between the two economic powers, the US Trade Representative said “significant questions have arisen regarding China’s adherence to ongoing (World Trade Organization) obligations.”

While lauding the “many impressive steps” China has taken to reform its economy in the nine years since it joined the WTO, the report paints a picture of a reform movement that ran aground in the middle of the last decade.

“The overall picture is complex, given a troubling trend toward increased state intervention in the Chinese economy in recent years,” the 100-plus page report stated, listing a string of disputes.

“Problems can be traced to China’s pursuit of industrial policies that rely on excessive, trade-distorting government intervention intended to promote or protect China’s domestic industries and state-owned enterprises.”

“This government intervention, evident in 2010, is a reflection of China?s historic yet unfinished transition from a centrally planned economy to a free-market economy governed by rule of law.

The report also cited differences between China’s central and local governments as a cause of difficulty in implementing reforms.

It comes a day after Washington asking the WTO to examine subsidies to the Chinese wind power sector.

Just weeks before President Hu Jintao’s January visit to the United States, the US government said Wednesday it had asked the WTO to deal with allegedly illegal subsidies that favor Chinese manufacturing firms.

The United States alleges China offers multi-million-dollar grants to only companies making turbines and other equipment with Chinese parts, a violation of trade rules.

This news, US sees ‘troubling trend’ of Chinese economic intervention
extract from US Economy

Short URL: http://www.usnews9.com/?p=5252

Posted by on Dec 27 2010. Filed under Business. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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