The Study Of U.s Countervailing To China

China has made remarkable achievements in the international trade field as its reform and opening up, especially after its accession to the World Trade Organization in December 2001. China not only maintained a rapid growth in foreign trade with a growth of over 28%, whose status in the world trade rises rapidly. The volume with the major trading partners also increased significantly. In 2006, China's foreign trade volume in both import and export reached 1760.69 billion dollars, up 23.8%, ranking the world's third largest country in the import and export trade. It was also the third largest trade partner of the USA, with a surplus in goods trade of 232.55 billion dollars, and the biggest source of American international balance of payments deficit. The strong momentum of growth also made China the target of the trade protectionism. Especially after the financial crisis of 2008, the developed countries led by the United States made China the target of protectionism, and launched a new round of trade remedies offensive to the "non-market economy" China after anti-dumping. Well, what's the history of the US initiating countervailing to China? What is the deeper motivation hidden behind? What are Chinese governmnent and enterprises supposed to do againest the new round countervailing offensive from US?This paper starts from the background of the US countervailing investigation to China. It excavates all of the historical origin of the countervailing deeply, analysing in both international and domestic points. Getting to the root of the matter, Chinese rapid growth in foreign trade, and recently, especially after the financial crisis, the domestic downturn and protectionism of the US, have all promoted the countervailing.Under the background of both international and domestic, the paper continues to search for the new characteristics of the countervailing. Because of the first countervailing investigation initicated in 2006, during the four years, the new features and trends still reflect on the increase of its amount, caseload, scale, and the involved products'catagories. Meanwhile, comparing to the anti-dumping, it presents more hidden, unfair, and complex, which is also the important reason that US initiated countervailing to "non-market economy" China through amending its domestic law.The paper analyses the reasons that US initicated countervailing investigations to China in detailed, from the situations of both countries. US initiates countervailing investigation to China for the consideration in both economic interests and political motives. US must regard China as its target of protectionism from its global strategic considerations. On the other hand, China has maintained a strong growth in the goods trade surplus to US, which is also the direct reason of the countervailing. In addition, Chinese exports are mainly labor-intensive products, which occupy a great market share of the US for its lower price. While, it also threatens the interests of the US relevant industries, who can pressure the government through some associations. In general, as a developing countries, China focuses more on the growth of the economy, therefore, it does have many imperfections in its subsidy policies. Especially, many local governments attract investment and encourage export through some subsidies, which also give an excuse to the counties like US.Finally, the paper gives some proposals from the point of view of both government and enterprise, combining with the specific analysis of the reasons above. Considering the immeasurable loss that will be brought to the state, enterprises, even an industry, through the passive respondent, it focuses more on the proposals about early warning mechanism. These two countries should increase the exchanges in terms of government strategic talks, through which the trade protectionism will be avoided from the origin.The first thing that Chinese government should do to reduce or even avoid the foreign countervailing investigation radically is to complete Chinese subsidy policy. Making full use of the WTO "SCM agreement", avoiding the actionable subsidies, and making use of the green light subsidy, which needs to focus on the upstream subsidies of products on the research and development stages. Besides, for enterprise or even an industry, it will be the fundamental way to avoid the trade remedy measures, through increasing the inputs on the research and development, focusing on the independent innovation, increasing the added-value of the products, transforming from the labor-intensive to the technology-intensive. In addition, companies should perform actively with the help of the government, for the long-term development in future.