China holds consultations with U.S., Mexico over subsidies

China has held consultations with the United States and Mexico over their complaint about so-called Chinese industrial subsidies, according to the Chinese Mission to the World Trade Organization (WTO).

The consultations, held at the WTO headquarters in Geneva on Tuesday, "proved to be helpful and contributed to the better understanding of the concerns of all parties concerned," said the mission in a statement.

In the consultations, the Chinese side "sincerely introduced and clarified" relevant taxation measures that the U.S. and Mexico said constitute unfair trade subsides, according to the statement.

"It is evident from the consultations that the complaining parties have misunderstandings toward Chinese foreign investment and taxation regimes," it said.

As a matter of fact, certain so-called "subsidies" programs do not exist or apply any more in China, it added.

According to the Chinese Mission, in the past years China has been taking active measures to reform its enterprises income taxation regime.

"The new Enterprise Income Law, which was passed last week by the National People's Congress, was just one of the results of this process undertaken by Chinese legislation authorities and government on their own initiative," the mission said.

The statement stressed that China "always respects its commitments of accession to the WTO and all WTO agreements."

It also urged all WTO members, particularly developed ones, to bear the responsibility to eliminate trade-distorting subsidies, especially those in agriculture.

This was the first round of consultations held since the U.S. brought the Chinese subsidies case to the WTO in early February and was later joined by Mexico in the complaint.

The EU, Japan and Australia also participated in Tuesday's consultations as third parties.

The consultation process is the first stage of WTO's dispute settlement procedure. If the consultations fail in the end, the complaining parties can request a WTO panel of experts to investigate and rule on the dispute.