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China Says U.S. Shipbuilding Claims “Lacks Factual Basis”

Chinese spokesperson
China says claims of so-called subsidy to shipbuilding lack factual basis and the U.S. is blaming China for its industrial development problems (Ministry of Commerce)

Published Mar 14, 2024 6:47 PM by The Maritime Executive

 

During the daily news briefing at China’s Ministry of Commerce, a spokesperson responded to the trade complaint filed against its shipbuilding industry calling it another example of U.S. trade protectionism violating World Trade Organization rules. Chinese media called the action of filing a trade complaint about “so-called subsidies” by the U.S. steelworkers and other unions “totally untenable.”

Spokesperson He Yadong was asked by a reporter from Bloomberg to respond to the action and the social media posting by President Joe Biden. The president’s account on X wrote, “We’ll always stand against China’s unfair practices — and as long as I am president, I’ll fight for U.S. workers and jobs. The U.S. Trade Representative will take a hard look at this petition in accordance with the law.”

“The accusations made by relevant U.S. organizations against China are completely unfounded,” the spokesperson said in response to the question. “The United States blames China for its own industrial development problems, which lacks factual basis.”

A collation of five unions filed the complaint accusing China of “unreasonable and discriminatory acts, policies, and practices” to dominate the maritime, logistics, and shipbuilding sectors. The petition they contend shows that China has “funneled hundreds of billions of dollars and adopted numerous supporting policies,” for the shipbuilding and the maritime sector. They said the actions include loans from state-owned banks, equity infusions, provisioning steel at below-market prices, tax preferences, and tens of billions of dollars in loans to support construction of thousands of vessels in China for foreign export. They also highlight that China has become a leader in ship financing and leasing.

The unions are calling for the U.S. to impose a fee on all Chinese-built ships making stops in American ports. U.S. Trade Representative, Ambassador Katherine Tai, responded by saying “I look forward to reviewing this petition in detail.”

The Ministry of Commerce is citing reports that they said “have pointed out that the main reason for the decline of the U.S. shipbuilding industry is over-protection.” Media reports quoted the Financial Times that said the U.S. built 10 ocean-going vessels to China’s more than 1,000 last year.

They said the Chinese shipbuilding industry has flourished by strengthening technological innovation and accelerating high-end, intelligence, and green development. The Ministry of Industry and Information Technology had previously highlighted that the country’s shipbuilding volume grew nearly 12 percent last year. China produced more than 42 million dwt, which accounted for just over half the total for all ships building 2023 according to their data.

The trade complaint was filed into a highly political environment where many in Washington call China the enemy. China and its policies are gaining new attention as the U.S. enters its 2024 election cycle. The U.S. House of Representatives this week also moved to order the Chinese company ByteDance to divest of the popular app TikTok or face a total ban in the United States.

Asked about the ongoing trade issues between the United States and China, spokesperson He said “We hope that the United States will make prudent decisions and not make the same mistakes again,” referring to U.S. trade sanctions which he called “unilateralist measures that violate basic principles of the WTO and blatantly ignores and undermines multilateral rules.” China broke off trade talks with the United States in 2018 as then President Trump piled on new sanctions against China.