US welcomes China steps to cut export subsidies

Washington, Mar 10: China has taken a welcome step by announcing the elimination of one of several government subsidy programmes challenged by the United States at the World Trade Organisation, US trade officials said today.

The programme, which offered discounted loans to big Chinese exporters, was one of nine the Bush administration was fighting.

''This is a welcome move by China,'' US Trade Representative Susan Schwab said in statement.

''We are encouraged that the calls for reform from the United States and other trading partners appear to have prompted Chinese officials to announce the end of a policy that created an unfair advantage for companies exporting into the international market place from China,'' Schwab said.

The Bush administration, under pressure from Congress to get tougher on trade, filed a WTO complaint last month against nine separate Chinese government subsidy programmes.

US manufacturers say China's government subsidies have fed the US trade deficit with China, which hit a record 233 billion dollars in 2006.

According to a Chinese government document dated February 28 and published yesterday, China is terminating the programme that allowed large exporters to obtain discounted loans, the US Trade Representative's office said.

''China recognizes its own long-term economic interests will be advanced by adhering to global trade rules,'' Schwab said.

''We hope the termination of these discounted loans signals China's willingness to withdraw other subsidy programmes identified in our recent WTO action that harm US companies and workers.'' The United States will continue to pursue its WTO complaint against the eight other subsidy programmes, while also pressing Chinese officials for more details on the termination of the exporter loan discount program, the USTR statement said.

Reuters