Metals News
China Doesn't Subsidize Export of 'Famous Brands'
data analysis
Dec 7,2009

BEIJING, Dec. 24 -- China doesn't subsidize the export of "famous brands," an official responsible for the selection of "famous brands" said Tuesday.

    Every country encourages its enterprises to produce better goods, improve product quality and raise brand value, and that's why China has "famous brand" selection, said Hui Boyang, deputy director of the quality management department of the General Administration of Quality Supervision, Inspection and Quarantine.

    "In fact, 'famous brand' is just an honorary title," Hui told Xinhua.

    "Some local governments do give rewards to those selected enterprises, but these rewards are small, symbolic and one-off, not a long-term preferential policy," he said.

    "In short, China gives no subsidies to help the export of 'famous brands,'" he said. "While policies like export tax rebate are based on all eligible products instead of certain brands."

    Hui's comment came days after the United States and Mexico filed a complaint against China at the World Trade Organization (WTO), claiming China was using subsidies to promote export of its "famous brands."

    "We were disturbed to find that China still appears to be using WTO-illegal measures to promote exports, ranging from textiles and refrigerator to beer and peanuts," US Trade Representative Susan Schwab said in a statement.

    "We are going to the WTO today ... to fight industrial policies that aim to unfairly promote Chinese branded products," it said.

    The US Trade Representative's office alleged that the subsidies to help promote Chinese "famous brands" include cash grant rewards for exporting, preferential loans for exporters, research and development funding to develop new products for export and payments to lower the cost of export credit insurance.

    On Monday, the Chinese Ministry of Commerce said in a statement that China would work under WTO rules to settle disputes with the United States and Mexico over the dispute.

    "On the US and Mexican request of dispute settlement consultations through the WTO, the Chinese side will deal with it according to WTO rules," it said.

    Under WTO procedures, if the dispute settlement consultations do not lead to a resolution in 60 days, the countries can request a WTO dispute settlement panel.

    The US and Mexico had filed a similar case early last year, alleging that China was using tax breaks and other incentives to subsidize its exports, which violated WTO regulations.

    Following failed consultations between the three sides, a WTO panel was established last August to investigate.

    Three months later, the three countries reached an understanding through continued discussions, sparing a WTO panel ruling.

    (Source: Xinhua)

China economy macroeconomy
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