China Escalates Trade Fight with U.S. on Subsidies. By Michael Wines, NYTimes, 10/18/10. “A dispute between China and the United States over Beijing’s subsidies to clean energy industries escalated on Sunday [10/17/10] when a senior Chinese economic official warned that Washington ‘cannot win this trade fight.’ In an abruptly scheduled news briefing in Beijing, the official, Zhang Guobao, sharply rebuked the Obama administration for opening an inquiry on Friday into the subsidies. Mr. Zhang accused American trade officials of repeatedly delaying talks over the same issues that the White House now wanted to investigate and suggested the administration was playing election season politics…

“Mr. Zhang was reacting to an announcement on Friday that the United States Trade Representative’s office would investigate Chinese government support for manufacturers of wind turbines, solar energy products, energy-efficient vehicles and technologically advanced batteries… The United Steelworkers trade union filed a complaint on Sept. 9 accusing China of ignoring W.T.O. rules prohibiting excessive subsidies of those markets. The trade representative’s inquiry, in reaction to the Steelworkers’ complaint, is potentially a first step toward filing formal charges against China with the W.T.O…

”With campaigning for the November midterm elections defined in large part by bleak economic and employment statistics, candidates in both parties have increasingly blamed Chinese trade policies for slowing the American recovery from the 2008 economic collapse. The White House has increased criticism of China in recent weeks, even as it dispatched senior officials to China to try to defuse trade tensions. Mr. Zhang’s comments signaled that tensions were rising not only over trade issues but also over longstanding claims that the Chinese have artificially depressed the value of their currency. He is widely seen in the West as China’s top policy maker on energy because he heads the country’s National Energy Administration.”

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