China to rebuff U.S. chip protests to WTO

SHANGHAI: China stands ready to rebuff a potential U.S. complaint to the World Trade Organization over alleged protectionist policies in its nascent semiconductor sector, a senior government official said.

The United States is said to be considering lodging its first complaint to the WTO against China over value-added tax breaks, enjoyed by chip manufacturers based on the mainland, that Washington says blocks imports of U.S. semiconductors.

But Zhang Qi, a director-general at the Ministry of Information Industry, scoffed at such suggestions.

"We've known about their intent for some time. If they want to lodge a complaint, let them go ahead," she told Reuters on the sidelines of a chip conference in China's financial stronghold.

"Last year, we imported more than 80 percent of our semiconductors and I don't see how much more open our market could be."

U.S. semiconductor companies complain China's practice of rebating more than 80 percent of the VAT tax to domestic chip firms, but not to foreign suppliers, puts them at a huge disadvantage in the Chinese market.

© Reuters