China has agreed to terminate export subsidies under its demonstration bases-common services platform.Subsidies will be scrapped on a range of products from metals to agriculture and textiles.

This means China has ended a program which provided export subsidies of some billion dollars over three years to Chinese companies in seven economic sectors.

Since it joined the WTO in 2001, China has frequently drawn complaints that its exports are being dumped or sold at unfairly cheap prices on foreign markets. These subsidies were seen as inconsistent with the rules of the World Trade Organization and drew complaints from the US that its domestic textile manufacturers were badly hurt.

China still has other forms of support for industry in place, including relatively cheap and easy credit from state banks, state-regulated power prices that have often favored industry, and low prices for other inputs such as water.

In part, the dropping of the subsidies is an effort by China to move away from labor-intensive production and emphasise more sophisticated industries such as semiconductors. In effect China wants to become a high tech country and move up the value chain.