China's industrial support programmes lack transparency, says WTO

China undergoes first WTO review since 2021

The World Trade Organization said on Wednesday that it was unable to get a clear picture of China's financial support for key industrial sectors, such as electric vehicles or aluminium and steel production due to an "overall lack of transparency".

The WTO noted that the world's second-largest economy gave financial support and other incentives to industries over the 2021-2024 review period but said that Beijing did not provide enough information for the WTO to have a clear picture of the programmes.

"The overall lack of transparency on China's government support may also contribute to debates on what is perceived by some as overcapacity in certain sectors," the WTO report said, naming a range of sectors from semiconductors to shipbuilding.

 

The WTO noted in particular that it could not determine the size of Chinese government funds that it said were using public resources to make equity investments in key industries.

The WTO's 173-page assessment was published as part of China's trade policy review - a process that all of the organisation's 166 members undergo every few years.

Several Western countries including the United States, Australia, Britain and the European Union used the occasion to criticise China's industrial policies.

In a scathing speech, Washington accused Beijing of "predatory" industrial practices that harm other countries, saying the "full weight of the PRC state is deployed in support of this goal of domination".

"The PRC has doubled down on its state-led, nonmarket approach to the economy, to the detriment of workers and businesses in the United States and other countries, including emerging and developing economies," said David Bisbee, deputy permanent representative of the United States.

China says it operates according to market principles and Beijing has previously said it never makes use of prohibited subsidies for electric vehicles.

In a document submitted to the WTO as part of the review process, Beijing said that it complied with both WTO rules and the commitments it agreed to when it joined the body in 2001.

It added that it was open to talks on industrial subsidies and promoting development but that such talks "should be clearly defined to prevent generalised and macro discussions of state intervention or industrial policies".

All WTO members must abide by the organisation's Anti-Subsidy and Countervailing Measures agreement, which prohibits government subsidies that can be shown to have harmed other members' trade or whose purpose is to distort global trade.

China's last review was in 2021. Since then, the WTO report said its importance in the global economy and in trade has been further accentuated.

EU Ambassador Aguiar Machado said China should refrain from using its WTO status as a "developing" country to get preferential treatment intended for poorer states, citing its growing wealth. China sometimes foregoes such benefits voluntarily.

Some Western countries also praised China's participation in the 30-year-old organisation, with Britain's ambassador Simon Manley saying it had made a "positive difference" in ongoing negotiations.