Below is an excerpt from a USTR press release addressing a U.S-China trade dispute regarding the Special Fund for Wind Power Manufacturing, a Chinese program that is seemingly illegal under WTO regulations:

U.S. Trade Representative Ron Kirk announced today that the United States has requested consultations with the People's Republic of China under the dispute settlement provisions of the World Trade Organization (WTO) concerning a program known as the Special Fund for Wind Power Manufacturing.  Under this program, China appear to be provide subsidies that are prohibited under WTO rules because the grants awarded under the program seem to be contingent on Chinese wind power equipment manufacturers using parts and components made in China rather than foreign-made parts and components. 

"Import substitution subsidies are particularly harmful and inherently trade distorting, which is why they are expressly prohibited under WTO rules," said Ambassador Kirk.  "These subsidies effectively operate as a barrier to U.S. exports to China.  Opening markets by removing barriers to our exports is a core element of the President's trade strategy.  Our decision today, along with the two other WTO cases that we recently filed against China, underscores our commitment to ensuring a level playing field with China for American workers and businesses."

USTR is also including in its consultations request transparency-related claims, which address China's failure to compy with its obligation to notify the subsidies at issue under the WTO's Agreement on Subsidies and Countervailing Measures (SCM Agreement) and China's failure to translate the underlying measure into one or more of the official languages of the WTO.

Read more here.