From The New York Times:
The Bush administration’s efforts to ease economic strains with China suffered two setbacks Friday with the resignation of a top official in charge of the China dialogue and an announcement that talks on a critical trade dispute had failed to resolve differences.
The United States trade representative, Susan C. Schwab, said Friday that “our efforts at dialogue failed” to resolve disputes over the American charge that China had illegally subsidized several industries to promote exports. She said Washington would bring the issue to the World Trade Organization, a major escalation in American pressure.
“We would have preferred to work this out,” Ms. Schwab said. “We regret that was not possible.” [Full Text]