The US Department of Commerce last Friday announced its preliminary decision to apply US anti-subsidy law to imports of coated paper from China.

"This action of the US side goes against the consensus reached by the leaders of both countries to resolve disputes through dialogue," Wang Xinpei, spokesman for China's Ministry of Commerce, said early Saturday.

"China strongly requires the US side to reconsider the decision and make prompt changes," the spokesman said, adding China will closely watch the development of the issue and protect its own legitimate rights.

In 1984 the United States set the policy of not applying anti-subsidy law to non-market economies. Such a practice had been taken as a judicial precedent and had not been changed, Wang said.

The preliminary decision of the US Commerce Department made a bad instance and it obviously does not conform with the current judicial precedent of US courts and the consistent practice of the US Commerce Department, the spokesman said.

While regarding China as a non-market economy, the US ignored the strong protests from China and decided to apply its anti-subsidy law.

"The decision brings great harm to the interests and feelings of Chinese business people and is not acceptable," Wang said.

From 2005 to 2006, imports of coated free sheet paper products from China increased 177 percent in volume, and were estimated to be worth US$224 million dollars in 2006.

In early February this year, the US government complained to the World Trade Organization (WTO) in Geneva, alleging that China was offering improper subsidies in steel, paper, semi-conductors and other sectors to make its companies more competitive in world markets.

(For more biz stories, please visit Industry Updates)