China auto tariff policy not violating WTO rules
Leading industry experts have defended China's auto imports tariff policy in the wake of a ruling by the World Trade Organization (WTO) which says the policy breaks its rules.
Zhao Yumin, a research fellow with the Trade and Economic Cooperation Institute of the Ministry of Commerce (MOC), told Xinhua News Agency on Friday that the tax measure is aimed to prevent tax evasion by companies who import whole cars as spare parts to avoid higher tariff rates.
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Mei Xinyu, an analyst with the Institute echoed Zhao's sentiment, adding that "leveling the tariff gap is to publicly encourage auto smuggling."
The WTO panel, however, largely upheld the complaints filed by the
They argued that the Chinese tax measure, which defied its WTO obligations, deterred auto-makers from using imported parts to build cars in the country and cost jobs abroad.
It was the first time that
After informed of the interim result, the Chinese mission to the world trade body said in a statement issued late Thursday that "
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Mei said
"The root of disputes is high-grade auto parts imports, as the domestic low-grade auto parts manufacturers can serve the market," Zhao said.
Many foreign manufacturers pressured their governments to influence the WTO to clear the obstacle; the Shanghai-based China Business News quoted an anonymous MOC official as saying Friday.
According to the latest customs figures,
Meanwhile, the country's auto parts manufacture industry marked an industrial output of 670 billion yuan (about US$93.1 billion), statistics from China Association of Automobile Manufacturers showed.
Market analysts believe that even if the panel's final decision, which is expected next month, backs up the interim decision, not much influence would be felt by the domestic auto industry in the long term.
"Only those foreign high-grade auto manufacturers will benefit," said Jia Xinguang, a senior analyst with China Auto Consultation Co. Ltd..