Submitted by Group C

Razaul Islam ID-112193040

Shamarat Rahman ID-112191003

Fahmia Sultana ID- 112191036

Iqbal Parvez ID-112191032

After Obama administration filed a lawsuit with the World Trade Organization alleging that
China is illegally subsidizing its auto industry the case came into the light. As per the allegations
of US government they say China provides cheap loans and grants and other incentives to their
car industry, and that these favors go to companies who are already successful exporters.
According to them everybody's got to play by those rules to balance the market. However
according to Gary Hufbauer if the scenario of Chinese govt. is considered as the violation of
WTO regulation then the auto bailout of United States should also be considered as such. But the
auto bailout of United States was not tied to export performance and therefore did not violated
WTO regulation. Additionally, in the auto industry there are 800000 people working and
generating 350 billion in sales. So, for this illegal activity which included subsidizing the auto
exporters by Chinese govt. the local companies were harmed tremendously. So, we can conclude
that it is not good at all for US local company and it will eradicate the market balance. To sum
up we can say that China is subsidizing the auto exporters in a illegal way and destroying market
balance.