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BIZCHINA / Center

US's allegations of subsidies are groundless

By Jiang Wei (China Daily)
Updated: 2007-08-01 09:34

Allegations in the United States that China's iron and steel industry is
being subsidized and aided by the government are groundless, according to
an industrial body.

The development of China's steel industry is not a result of so-called
government subsidies, China Chamber of Commerce of Metals Minerals &
Chemicals Importers & Exporters (CCCMC) told China Daily yesterday.

The chamber of commerce made the comments over claims by US steel
manufacturers that it is subsidies and government intervention that have
created China's steel industry - the largest in the world.

"The development of China's market economy injects infinite vigor and
vitality into the steel industry, which is exactly the 'market force'
mentioned by the US side," CCCMC said.

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It argued that the subsidy claim made by US steelmakers is biased because
it denies the achievements of the Chinese steel industry over the past
three decades.

CCCMC pointed out that it is in fact the US government that has provided
"long-term and all-round subsidies" as high as $100 billion to its steel
industry over the past three to four decades.

The Chinese government mainly leverages economic rules and measures such
as taxes in macro-regulation to adjust the market rather than intervening
in individual operation of enterprises, CCCMC said.

"It's contradictory for the United States to accuse, on one hand, the
Chinese government of intervening with the steel industry, and require,
on the other, the Chinese government to adopt other administrative
approaches such as licensing of steel exports," the industry body said.

The US iron and steel sector, led by the American Iron and Steel
Institute, the Steel Manufacturers Association, the Specialty Steel
Industry of North America and the Committee on Pipe and Tube Imports, has
been complaining against "government subsidies and interferences" in
China since last year.

The US industry has also asked the government to launch both anti-dumping
and countervailing investigations against two kinds of steel products
imported from China.

The iron and steel industry's claims partially led to the US complaint at
the World Trade Organization saying China's state subsidies allow it to
export its goods on the cheap and prevent US companies from competing
fairly, both at home and in third markets.

(For more biz stories, please visit Industry Updates)

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