Unnamed insiders close to the situation said the complaint also pointed to China's preferential corporate income tax for foreign investors.

According to WTO regulations, the Chinese government has five days to accept the consultation appeal and Washington and Beijing should enter into formal consultations at the WTO.

If they fail to resolve the matter within 60 days, the US can appeal to a WTO dispute settlement panel for a decision. No third party has asked to be part of the consultation.

It is the third time the United States has brought China before the WTO since it joined the organization in 2001.

"The US complaint this time covers a vast range of areas," said Li Xiangyang, a researcher with the Chinese Academy of Social Sciences.

The tense trade relationship between the two economies is largely the result of China's yawning trade surplus with the US. The US government has not only initiated an increasing number of anti-dumping charges against Chinese products, but has also adopted other measures such as WTO complaints and countervailing measures to protect its industries.

Li said the US had not provided reasonable evidence on China's industry subsidies.

(China Daily 02/06/2007 page14)

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