China has accepted Japan's request to participate as an observer in negotiations between China and the United States over Beijing's semiconductor taxes, which Washington is protesting, Japanese officials said Tuesday.
Beijing has informed Tokyo of its acceptance of the Japanese request, which was made after the U.S. filed a formal complaint against China with the World Trade Organization in March over the issue, the officials said.
A schedule for the bilateral negotiations has yet to be decided, they added.
The complaint, the first against China since it joined the WTO in 2001, concerns a Chinese semiconductor tax rebate rule the U.S. believes favors Chinese manufacturers and discriminates against foreign companies.
At issue is a 17 percent value-added tax that the Chinese government applies to semiconductors. China is offering tax rebates of 11 percent to 14 percent for domestically produced semiconductors, prompting the U.S. chip industry to complain that the practice is disadvantageous to U.S. and other foreign suppliers.