China's Commerce Minister Chen Deming said legislation recently passed by the U.S. Congress to impose countervailing duties on non-market economies such as China and Vietnam does not follow rules established by the World Trade Organization.

Speaking at a news conference in Beijing on March 7, Chen's remarks came several hours after the bill passed in the U.S. Senate. A similar bill passed the House of Representatives last week. The legislation will now go to President Barack Obama, where it is expected to receive final approval.

"China is always in line with the rules of the WTO," said Chen. "China has no obligations to abide by a certain country's internal laws and rules beyond the rules of international organizations."

If approved by Obama, the new law would overturn a Dec. 2011 US Court of Appeals for the Federal Circuit ruling that made 23 antidumping and countervailing duty orders illegal. The duties, which were mainly applied to nonmarket economies such as China and Vietnam, affected nearly US$4 billion in trade.

According to the World Trade Organization, subsidies are divided into prohibited ones and actionable ones, and a majority WTO members hand down subsidies of various types to certain industries, Chen said.

"Since the outbreak of the economic crisis, quite a few countries, the US in particular, have given out government subsidies to their enterprises," he said. "For instance, the U.S. "Big Three" auto giants were receivers of government subsidies."

In response to appeals from the G20, China did not take any new protectionist measures during the global financial crisis, nor did China invoke anti-subsidy campaigns against other countries, Chen said.

"I hope those countries, departments and law enforcement bodies that accuse other countries of not playing by the rules and subsidizing enterprises can set strict criteria for themselves and correct their own mistakes," Chen said.

In a separate ruling, the US Commerce Department ruled in early February to retroactively impose countervailing duties on Chinese solar panels imported by the US on or after Dec. 3, 2011.

Yu Wanli, an associate professor at Peking University, said he expected additional countervailing duty initiatives from the US and EU would be implemented this year, with profound consequences for Chinese exporters.

"I cannot predict to what extent they will have an impact on Chinese companies, but the severity will definitely be very great, Yu said.

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