The United States government has been taking a closer look at Chinese subsidies and bankrolls (financial support/funding) recently. In a yearlong American inquiry, we filed complaints to the World Trade Organization (WTO) that the Chinese government’s subsidies go against free trade rules. As a member of the WTO, the Chinese government is expected to give a detailed report of subsidies given out at the national, state, and municipal level every two years. These reports allow other members of the WTO to make sure that no one is going against the rules of the organization, using government money to help companies buy share in other countries or to discourage imports. However, since China became a member of the WTO in 2001 they have filed one report in 2006 which only declared subsidies at the national level. Last year the Obama administration filed a complaint involving a subsidy in Beijing that jumped from $6.7 million to $22.5 million for each wind turbine manufacturer. Through this kind of support from the Chinese government China’s wind turbine and solar power industries have been able to become the world’s dominant producers within 5 years while American companies are sent crashing to the floors. The Senate is currently considering a bill that is challenging the Chinese government’s manipulation of it’s currency as a trade tool. America used to be one of the worlds largest producers of goods. However in the past decade China has crept to the top of the list. How did they do so in such a short time? Under the Obama administration, the government has been looking at subsidies that the Chinese government allots to their major producers as well as their currency. “Persuasive and all-encompassing Chinese subsidies are decimating our industry”, said Ben Santarris from SolarWorld. Because the Chinese Juan is so low compared to the US dollar, it is almost always too expensive to produce in the United States and persuades us to go China for goods. The Senate is considering a bill that challenges China’s manipulation of its currency as a trade tool. The Chinese government has also been caught giving subsidies to major producers, particularly their wind turbine and solar power industries. These industries have become the top producers in clean energy in the past 5 years and put many of the United States’ clean energy companies out of business. Through the World Trade Organization and the bill from Senate the United States hopes to reclaim some of its world power from China.
Link to the Article >> http://www.nytimes.com/2011/10/07/business/us-says-some-chinese-subsidies-violate-trade-rules.html?ref=china
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