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China Doesn’t Provide Sufficient Data on Subsidies, WTO Says

June 12 (Bloomberg) -- China doesn’t provide adequate data about subsidies and other government assistance it gives to its domestic industries, the World Trade Organization said in its biennial review of the Asian nation’s trade policy.

While such forms of aid are “important features” of China’s trade policy and industrial policy making, the government isn’t transparent about the level or sources or assistance, the Geneva-based WTO said today. Members of the trade arbiter will comment about China’s policies today and on June 14, with governments including the U.S. and the European Union set to express criticism, as they have in past years.

“China submitted a new WTO notification of its subsidies in 2011, listing programs providing government assistance at the central government level between 2005 and 2008,” the WTO said. “However, in many cases there are no figures on the magnitude of support provided, and no information is available on subsidies and other government assistance provided at the provincial level, which are believed to be considerable.”

The WTO also said that while the number of state-owned Chinese enterprises declined in 2010 and 2011, they “remain dominant in certain sectors and subsectors that are vital to national economy.”

IPR Crackdown

Chinese Assistant Commerce Minister Yu Jianhua said the euro region’s debt crisis and sluggish external demand, along with an appreciating yuan, have hurt Chinese companies. The government has taken steps to liberalize, boost imports and stimulate domestic demand, he told the WTO’s trade policy review today.

Protection of intellectual property rights, which Yu called a “key concern for foreign investors,” is among the areas in which the government has clamped down, he said in an e-mailed statement. Since the last review in 2010, China has pushed forward software legalization in government agencies and enterprises and cracked down on IPR infringement and the manufacturing and sales of “shoddy and counterfeiting products,” he said.

China hasn’t done enough to protect intellectual property rights, said Angelos Pangratis, the European Union’s ambassador to the WTO. “Serious problems remain and need to be tackled, notably in terms of violations of copyrights, trademarks, patents and trade secrets,” he said at the review, according to an e-mailed copy of his statement.

“Important challenges remain, and China must now take the next step: increase its internal consumption, rely less on exports and open its economy more, especially to services and investment,” Pangratis said. China “shoulders a great responsibility to other countries, particularly developing ones, to comply fully with international rules. With its acquired size and clout, it should lead by example.”

To contact the reporter on this story: Jennifer M. Freedman in Geneva at jfreedman@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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