GENEVA — The U.S., backed by the European Union and Japan, was highly critical of China in a World Trade Organization forum for resorting to unfair trade policies — from distorting subsidies to tax rebates on exports — to give domestic enterprises an unfair advantage over international competitors.
“We see several examples of Chinese government policies that attempt to skew the level playing field in favor of domestic enterprises,” Chris Wilson, deputy chief of the U.S. mission to the WTO, said during a two-day review of China’s trade regime that ended Friday.
Wilson said these included “the manipulation of value-added tax rebates” on exports of steel and a variety of other manufactured products.
A WTO secretariat report prepared for the review notes, for example, that in 2014 “the rebate rates were increased for some high-value added products, processed maize products and textiles and garments.”
“The state continues to pursue industrial policies guiding, supporting and favoring domestic industries,” said Wilson, adding that since growth in China has slowed, “the U.S. has sensed an increasing reluctance by China’s economic planners” to push ahead with further reforms.
He took China to task over an array of other concerns, such as inadequate intellectual property rights protection and enforcement, massive subsidization, trade remedy abuses and restrictions on service market access.
Marc Vanheukelen, the EU’s WTO ambassador, said new laws and measures on foreign investment “contain elements that go against market opening and principles of transparency.”
Japan queried the transparency of China’s antidumping investigation procedures and urged Beijing to implement measures to counter international counterfeiting of goods and well-known trademarks.
Wang Shouwen, China’s deputy minister of commerce, said the country has fulfilled its obligations as a WTO member. He said enforcement in intellectual property protection has been strengthened and the government is committed to comprehensively deepening reforms and “proactively pressing ahead with a new round of opening up.”
In 2015, China’s goods imports contracted 14.2 percent to $1.68 trillion, according to WTO data. The WTO report shows that the average applied tariff in 2015 was 9.5 percent, with the average for agricultural products higher at 14.8 percent than for industrial goods, at 8.6 percent.
However, apparel and cotton were subject to high or “peak” tariffs. The average tariff for apparel was 16 percent or nearly twice the average for industrial goods, and averaged 22 percent for cotton, also above the average for agricultural tariffs.
In 2015, manufactured products, the WTO report said, remained the dominant component of China’s goods exports, were worth $2.2 trillion, making China the world’s top exporter, with office machines, telecommunications equipment and textiles and apparel among the main exports.
Last year, textiles accounted for 4.8 percent share of China’s total goods exports, and apparel for a 7.7 percent share, with jerseys, pullovers and cardigans, and suits, jackets and dresses among the big-ticket exports.
Overall, Wang said China’s economy grew 6.9 percent last year, with 13.9 million jobs were created, while inflation rose 1.4 percent year-over-year.
He said retail sales of consumer goods amounted to 30.09 trillion yuan, or $4.85 trillion at current exchange, and contributed 66.4 percent of the economic growth.
“China’s growth has turned from investment and export to service and consumption,” he told WTO delegates, and also pointed out that last year, the share of China’s economy in global economic growth topped 25 percent.
Wang said in the next five years, China will try to maintain the growth rate above 6.5 percent and projected the value of imported goods to exceed $10 trillion.