China will address trade disputes "properly" according to the World Trade Organization's settlement procedure, the Ministry of Commerce said yesterday after Mexico filed a complaint against China on textile product subsidies.
On Monday, Mexico requested consultation with China within the WTO dispute settlement framework on several measures allegedly taken by China to strengthen production and exports of clothing and textile products, the WTO said in a statement.
Measures mentioned by Mexico include income tax exemptions, low-cost loans, extended loan repayment periods, debt forgiveness provided by state-owned banks and cash payments from the Chinese government to companies in certain textile industries encouraged by the country, the statement said.
Mexico claimed these measures are inconsistent with China's obligations under World Trade Organization rules and have a negative effect on the interests of Mexico.
China did launch some supportive measures to aid exporters since the later half of 2008 when external demand dwindled as the global financial crisis hit the country's economy hard.
Last month, China announced another slew of new measures such as wider coverage of export credit insurance, more credit, better services, and less administrative fees to bolster exporters that were still in trouble.