China probes U.S. rescue plans for auto sector image

China’s Ministry of Commerce said yesterday that it will investigate the U.S. government’s financing and rescue plans for the American auto industry, Shanghai Daily reported.

The move is part of China’s probe into possible dumping and subsidies on U.S.-made vehicles imported to China, the ministry said. Trade officials will be looking for dumping practices — selling items, in this case cars, at lower than cost — and for unfair government subsidies.

Ministry spokesman Yao Jian said China’s probe will look into 24 items which include the U.S. government’s rescue and restructuring plans for the auto industry as well as government subsidies on new-energy vehicles and its “cash-for-clunkers” incentive program.

The concerned U.S. automakers have the right to defend themselves with evidence presented to Chinese investigators by registering within 20 days after China started the probe of U.S. auto imports on November 6, and corrective action must be taken within 60 days after a case is registered.

The investigation applies to sedans and off-road vehicles with engine displacements of 2.0 liters or more, and the whole process of the probe and ruling is expected to be completed within 12 months.

China-U.S. trade tensions are on the rise after Obama imposed tariffs on Chinese tires in September. The U.S. has carried out 13 investigations against Chinese products this year for alleged dumping and illegal subsidies.

Source: Gasgoo