China yesterday rejected the allegations of protectionism and illegal trade subsidies made by a growing list of countries and hit back with its own trade investigation and a complaint to the World Trade Organisation.

Beijing has asked the WTO to investigate US restrictions on imports of Chinese poultry products and has launched its own anti-dumping investigation into methanol imported from Saudi Arabia, Malaysia, Indonesia and New -Zealand, China's commerce ministry said yesterday.

It dismissed claims from the European Union and US that Chinese export quotas and tariffs on raw materials violated WTO rules and expressed "regret" that Australia had launched an investigation into allegations that Chinese producers had dumped aluminium products in Australia at below market prices.

Beijing did not comment on India's decision to impose import duties of between 14 per cent and 30 per cent on its aluminium flat-rolled products and foils. New Delhi said these would be backdated to March 23 this year and continue until March 22 2010.

China is the world's largest aluminium producer and the government has raised tax rebates on some exports of the metal in an attempt to help the industry weather a slump in overseas shipments.

The rash of complaints and investigations from China's trade partners comes just a week after the government announced it would enforce a strict "buy Chinese" policy for its $585bn (€417bn, £354bn) economic stimulus package.

Analysts said that policy was aimed at a domestic audience and reflected political concerns about factory shutdowns and rising unemployment but was likely to stoke global protectionist sentiments.

In a co-ordinated move, the US and EU on Tuesday requested consultation with China through the WTO to discuss export restrictions on key raw materials used in the chemical, steel and metals industries. The US and EU argue that Chinese export quotas and tariffs make these materials cheaper for domestic producers and more expensive for everyone else.

"The main objective of China's relevant export -policies is to protect the environment and natural resources," Yao Jian, China's commerce ministry spokesman, said in a statement. "China believes relevant policies are in accordance with WTO rules."

The restricted exports include bauxite and fluorspar,used to make aluminium products, a possible point of contention for India and Australia, which allege China unfairly subsidises its aluminium producers.

Mr Yao "expressed regret" that this was the third anti-dumping and countervailing investigation into Chinese imports launched by Australia in the past year.

China has increased export tax rebates seven times since August and introduced numerous industrial support measures to boost exports. But exports still fell roughly a quarter in the first five months from the same period a year earlier.

Beijing said yesterday it had asked the WTO to set up a panel of experts to investigate "discriminatory" US restrictions on Chinese poultry products after bilateral discussions proved unsatisfactory.

The US and China banned imports of each other's poultry in 2004 after outbreaks of bird flu.

Barack Obama's administration yesterday stepped up its efforts to persuade the Chinese government to revoke a new regulation that would force computer makers to install internet filtering software.

Ron Kirk, US trade representative, and Gary Locke, commerce secretary, wrote to the China's ministry of industry and information technology to say that the Green Dam software - widely believed to be a -censorship tool - would -disadvantage US exporters and could fall foul of WTO rules.

David Pilling, Page 13 Lex, Page 16

By Jamil Anderlini in Beijing and Tom Braithwaite in,Washington

Published: June 25 2009 03:00 | Last updated: June 25 2009 03:00

Source: www.ft.com