From AP via The International Herald Tribune:
The World Trade Organization opened a formal investigation Friday into U.S. and Mexican allegations that China is providing illegal subsidies for a range of industries, officials said. The two countries accuse Beijing of using WTO-prohibited tax breaks to encourage Chinese companies to boost exports, while imposing tax and tariff penalties to limit purchases of foreign products in China.
“We are concerned about a series of measures maintained by China that appear to constitute subsidies prohibited under WTO rules,” U.S. trade lawyer Juan Millan told the WTO’s dispute body. “China offers tax refunds, reductions, and exemptions that appear to be contingent on a firm’s use of domestic over imported products or on a firm’s export performance.” [Full Text]