China's tariffs on imported car parts will come up for arbitration by the World Trade Organisation (WTO).
The request for a WTO ruling on the legality of the duties on car parts follows the breakdown of negotiations between suppliers from the US, the EU and Canada. These countries had lodged a complaint against China's tariffs to the WTO in March this year.
Auto majors GM, Volkswagen and Renault, among other automakers, who operate in China are required by law to buy a minimum quantity of their components from local suppliers.
On the rest, which are imported in to the country, China levies a 25-per cent import duty, which the North American and EU government says violates China's commitments in 2001 when it joined the WTO.
According to a Western diplomat, such measures discourage car manufacturers in China from using imported parts to assemble their products.
China has been facing increasing pressure from its trade partners to abide by its WTO membership commitments to protect copyrights and open up to foreign investors.
China's ministry of commerce has regreted WTO's investigation into the country's tariffs on auto part imports.
A ministryspokesman reiterated in a statement that the tariffs are intended to stop cars being imported in near-complete form to avoid higher tariff rates for finished cars.
Last year China unveiled the new tariffs on imported auto parts, under whivh imported car parts making up more than 60 per cent of the value of a car would attract a tariff of around 28 per cent, the same as on completed new cars.
Imported components below 60 per cent of the value attract between 10 and 14 per cent.