WTO Criticizes China's Lack of Transparency in Industrial Support

The World Trade Organization (WTO) expressed concerns over China's opacity in financial support to key industrial sectors, such as electric vehicles and steel production. The WTO report emphasized the lack of detailed information on government funds and noted potential issues of overcapacity in various sectors due to insufficient transparency.

The World Trade Organization (WTO) voiced concerns on Wednesday regarding China's unclear financial support for crucial industrial sectors, including electric vehicles and aluminium and steel production, attributing it to an 'overall lack of transparency.'

The WTO highlighted that China's economy, the world's second-largest, provided financial support and other incentives from 2021 to 2024, but failed to offer enough information for a clear understanding of these programmes. This lack of transparency could fuel debates about perceived overcapacity in certain sectors, such as semiconductors and shipbuilding.

Specifically, the WTO noted its inability to determine the scale of Chinese government funds used for equity investments in key industries. These incentives were generally not communicated to the WTO. The assessment is part of China's periodic trade policy review, which occurs every few years, the last being in 2021.

The comprehensive 173-page review has prompted responses from other countries, reflecting on China's significant role in the global economy and trade. While China adheres to market principles and denies using prohibited subsidies for electric vehicles, it expressed openness to discussions on industrial subsidies, insisting these be narrowly defined.

The United States and Australia have previously criticized China's 'non-market' practices, urging progress on these issues within the WTO. All members must comply with the Anti-Subsidy and Countervailing Measures agreement, which bans government subsidies that damage other members' trade or intend to distort global commerce.

(With inputs from agencies.)