Germany's powerful machine-tool makers' federation said Monday that China should submit to the same international trade rules as developed countries, rather than enjoy emerging-economy leg-ups.
China - the world's second-largest machine-tool exporter after Germany - has got away with "subsidy distortions and unequal market access" at the World Trade Organization (WTO), the VDMA industry body said. "In many areas China has long since ceased to be a developing country. Therefore, the same international trade rules must apply to China as to Germany or the EU," it added.
Subsidies allow Chinese firms to hide the true costs of production, the VDMA argues. It pointed to areas like the solar panel market, where cut-price surplus product from China flooded international markets and helped drive competitors out of business, notably in Germany.
Since joining the WTO in 2001, China has committed like other member states to inform the organisation of its subsidy schemes. "Practice shows that this is only done to a limited extent," the VDMA charged.
In future, reporting should be "sharpened and every non-notified subsidy must automatically be classified as market-distorting - combined with the possibility of countermeasures," the federation's international trade chief Ulrich Ackermann said.
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