The Chinese government said yesterday that it is studying an interim report issued by the World Trade Organization on complaints by the European Union, United States and Canada about China's tax measures on auto parts imports.

China is carefully studying the report and is preparing to submit its opinions to the WTO panel, said a government statement issued by the Chinese mission to WTO.

China respects the dispute settlement procedures of the WTO and will not make comments on the case until the final ruling is made, it said. A WTO panel ruled on Wednesday that China improperly taxes imported auto parts at the same rate as finished autos. The US, EU, and Canada said that deters auto makers from making cars in China using imported parts.

The decision is officially only an "interim ruling," with a final decision to be released later this year, but no panel has ever changed its findings between an interim and final decision.

Zhou Shijian, an official with China's WTO research body, told the Global Times that China's practice of levying the same tariffs on the imported auto parts that account for at least 60 percent of the car cost as whole cars to prevent the importers dodging taxes falls in line with the WTO rules.

The tariffs are meant to stop auto makers from importing cars in sections and then assembling them.

(Shanghai Daily, February 15, 2008)