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US hails China's abolishment of perk for exporters

The US on Friday welcomed China's decision to scrap a perk for exporters that formed part of a landmark WTO case filed by Washington against Beijing.

China said it was abolishing an allowance that provided key export companies with a discount of up to 10 percent on bank loan rates, effective immediately.

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

"We hope the termination of these discounted loans signals China's willingness to withdraw other subsidy programs identified in our recent WTO action that harm US companies and workers," Schwab said.

Early last month, the US hauled the fast-growing Asian giant to the WTO over a raft of "illegal" industrial subsidies in steel, paper, information technology and other sectors.

The two nations are to hold consultations over the dispute at WTO headquarters in Geneva towards the end of this month.

Officials have said the US government could next sue China at the WTO over rampant piracy of US goods, while exerting continued pressure for reform of its tightly managed exchange rate system.

"The United States will continue to encourage China to meet all of its WTO and bilateral trade obligations, using both dialogue and enforcement tools, as needed," Schwab said.

China pledged earlier this year to take new steps to rein in exports, fearing that fresh spikes in its huge trade surplus could roil already tense relations with its major trading partners.

Also on Friday, US officials announced that the politically sensitive deficit with China shot up by 12 percent to US$21.3 billion in January.
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