China has reiterated that export controls its imposes on some raw material are within the world trade rules. Earlier this week in a briefing paper prepared for its biennial review of China’s trade practices the WTO took aim at China’s export curbs, a mix of license requirements, quotas, tax rebates and outright prohibitions that Beijing says have been put in place for environmental reasons and to reduce the country’s huge trade deficit.
A side effect of exports curbs is to divert supplies of the targeted goods or particularly in China’s case raw materials to the domestic market, thus pushing down prices there. “The resulting gap between domestic prices and world prices, the WTO said, “constitutes implicit assistance to domestic downstream processors of the targeted products.”
Which is what Beijing U.S. and E.U. critics have claimed has been the underlying aim of China’s export curbs all along. China is unlikely to changes its practices unless its loses WTO complaints brought against it over its bauxite and other raw material exports.