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US case against China subsidies politically driven

By Zhao Qian (Global Times)

08:29, September 18, 2012

Chinese experts said Monday that US President Barack Obama's move to initiate a case against China over subsidies for automobile parts is groundless and is part of his efforts to win the election.

Obama, who will start a campaign tour of Ohio Monday, will announce that he is drafting a trade complaint against China at the World Trade Organization (WTO) over China's unfair government backing of its auto industry, a White House official was quoted by Reuters as saying Sunday.

The state of Ohio is highly dependent on the auto industry.

Meanwhile, China filed a complaint at the World Trade Organization Monday to challenge a new US law on "countervailing duties", or tariffs intended to combat export-promoting subsidies, China's commerce ministry announced in a statement Monday.

The ministry made no mention of the US decision to initiate a case against China.

Calls to China's Ministry of Commerce for comments also went unreturned by press time.

"I've never heard that Chinese auto parts companies have received government subsidies," Hao Wei, director of the auto branch of the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, told the Global Times Monday.

"US auto union groups early this year began a campaign urging Obama to clamp down on imports of auto parts from China, which they said are unfairly subsidized and threatened 1.6 million jobs in all 50 states," Reuters reported last week.

"It is groundless to say that China's auto parts exports have threatened US jobs, as rising US auto exports to China have created huge job opportunities in the US," Hao noted.

China's automobile trade deficit with the US reached a total of $17.1 billion during the 2001-2011 period, and in 2011 the deficit hit a record $5.86 billion, according to customs data.

The total amount of US auto parts trade deficit with China only accounted for 17.39 percent of the total US auto parts trade deficit with all countries and regions during 2000-2010 period, according to a report released by the US Department of Commerce in 2011.

"So it is unreasonable for the US to ascribe all its domestic deficit problems to China," Hao noted.

"Contrary to what Obama has complained, US job opportunities have increased driven by the booming auto parts sector, such as auto parts after-sales services," He Weiwen, co-director of the China-US-EU Study Center under the China Association of International Trade, told the Global Times.

The talk of trade complaint comes amid intensifying contest between Obama and his strong opponent Mitt Romney for the US presidential election.

"Obama's move is more like a show of support to win the election rather than comprehensive real action, since the US auto industry is highly reliant on China's middle- and low-end auto parts products," an insider from a domestic auto parts company told the Global Times Monday on condition of anonymity.

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