China's industrial policies raising US concern

Washington, Oct 21: The United States is concerned that China is pursuing policies aimed at giving its own firms an unfair advantage over foreign competitors, a top US trade official said.

''It's frankly looming large in our thinking about China right now,'' Deputy US Trade Representative Karan Bhatia said yesterday before a trip to South Korea and China next week.

''We are concerned that we're seeing signs that China, either through subsidies or through policies that favor domestic industries, (is) distorting the playing field in China'' to the detriment of US companies and China's own development, Bhatia said.

He told reporters he would press China to follow a more ''rational'' economic policy in meetings next week in Dalian, Shenyang and Beijing.

A recent case brought before the World Trade Organization by the United States, the European Union and Canada against China's tariffs on auto parts is ''to some extent symptomatic'' of a broader Chinese effort to shield its companies from foreign competition, he said.

The WTO will likely soon establish a panel to rule in the auto parts case.

''We've had no indication from the Chinese that they're prepared to address this area to our satisfaction so I fully do expect the panel will be formed,'' Bhatia said.

With China approaching the fifth anniversary of its entry in the WTO in December, Bhatia said the main purpose of next week's trip is to take stock of how well Beijing is meeting its trade commitments.

''We're looking for resolutions and frankly speedy resolutions in areas where they've made clearly defined commitments,'' Bhatia said.

China has made some progress in protecting US intellectual property such as computer software, but still needs to do much more to stop piracy, he said. But one big frustration for the United States is China's failure to lower its threshold for bringing criminal cases against companies or individuals who violate copyright and patent laws, he noted.

Bhatia said he expected to press China on its WTO commitment to open its financial services market to more foreign firms beginning in December.

REUTERS