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US blames Chinese firms for its own failures

By Zhou Xiaoyuan (People's Daily Overseas Edition)

16:11, May 24, 2012

Edited and translated by People's Daily Online

The U.S. Department of Commerce (DOC) recently issued a preliminary ruling, in its review of four countervailing investigations into laminated woven sacks and other products imported from China, to deem most of China’s state-owned enterprises (SOEs) as public bodies. The ruling means that the United States will consider Chinese SOEs’ sales as subsidies from public bodies to downstream companies, and thus impose countervailing duties on imports of the products of these downstream companies.

Most Chinese companies are market-oriented

In its preliminary ruling, the DOC divided Chinese SOEs into three categories: enterprises wholly owned or controlled by the government, enterprises in which the government holds a relatively large stake and that are subject to governmental plans, and enterprises in which the government has little or no stake but enjoys de facto control. The first category of enterprises is deemed public bodies, and the third category is presumed as public bodies unless there is sufficient counter-evidence. Enterprises that are not involved in trade cases fall under the second category.

“It is undoubtedly untenable for the United States to deem all Chinese SOEs as government offshoots,” said He Maochun, director of the Research Center for Economic Diplomacy Studies at Tsinghua University, adding that the nature and structure of Chinese companies have changed profoundly in recent years, especially since the country’s accession to the World Trade Organization 10 years ago. When conducting investigations into Chinese companies, the United States failed to realize that the reform and opening-up policy has turned most Chinese companies into market-oriented joint-stock companies.

US blames China for its own failures

“The logic of the United States is based on an assumption that the American-style private economy is most reasonable and efficient. Other countries would go against the natural law if they let the public sector play a dominant role,” said Mei Xinyu, a researcher at the Chinese Academy of International Trade and Economic Cooperation.

“During the subprime crisis, almost all key financial institutions and carmakers in the United States were found to be state-owned businesses. Should they also receive the same discriminatory treatments as their Chinese counterparts? ”

The United States has deliberately intensified trade friction with China since the beginning of the year.

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Leave your comment1 comments

  1. Name

wende at 2012-05-2571.251.44.*
The problem is China never fight back knowing well that these companies have become de-facto joint ventures with the US govt. When China does not fight back, it will in effect give everyone the impression that charges against China are correct and that US companies are all pure private. Keep quiet and not fight back will not gain China anything. If US can play the game, China can play better. What"s holding back China"s retaliation or, better yet, call it playing US games with US own rules.

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