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ITC to investigate Chinese economy
WASHINGTON (AP) - The U.S International Trade Commission said Friday it will examine the extent of financial support China provides its businesses -- a practice that has been criticized by the West as unfair. U.S. manufacturers, particularly in the steel and paper sectors, have long criticized the Chinese government for subsidizing its domestic firms and enabling them as a result to undercut U.S. companies. Democrats in Congress have echoed the criticisms. The Bush administration, in response, initiated a World Trade Organization dispute with China in February, alleging that tax breaks and other subsidies the government provides to Chinese companies violate WTO rules. The United States also provides tax breaks to oil companies such as ExxonMobil Corp. and large manufacturers such as Boeing Co., but argues that China offers tax breaks targeted to exports, which is barred by the WTO. The scope of the ITC reports was expanded at the request of the House Ways and Means Committee, which oversees U.S. international trade policy. Originally, the agency was to report generally on the U.S.-China trade and investment relationship. But in response to a May 29 letter from Ways and Means, the ITC said it would also explore China's government support for its agricultural, manufacturing and service sectors. The agency also said it would seek to catalogue and quantify China's government interventions in its the economy. The ITC is an independent federal agency that performs economic research on trade agreements and investigates unfair trade practices by foreign countries. Copyright 2007 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.