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The complaints this week to the World Trade Organization by the United States and the European Union about Chinese restrictions on exports of raw materials are important actions, because they take on the China's subsidization of its manufactured exports, which is a major cause of imbalances in the world economy.

The prices of various raw materials for which China is a leading source – including bauxite, zinc and coke (a coal extract that is a major manufacturing fuel) – are kept down inside China, depressing demand by imposing export duties on some materials and export quotas on others, as well as by various pricing and licensing policies. These measures reduce the costs of Chinese manufacturers, especially in the aluminum, chemical and steel industries, which amounts to a major export subsidy.

China's essentially mercantilist strategy of relying on the exporting of manufactured goods for rapid growth has undoubtedly been highly successful, but the resulting international economic disequilibria have rebounded on China, in the course of the world's first truly global recession.

This strategy includes the Chinese government's massive buying of U.S.-dollar-denominated securities, which keeps down the exchange rate of the Chinese renminbi, raises that of the U.S. dollar and thus makes Chinese goods cheaper, all of which adds up to an enormous export subsidy.

Because of the recession, the powers that be in China now have misgivings about some of these policies, but they are spending some of their huge foreign-exchange reserves on importing and building up stockpiles of raw materials (such as minerals from Canada), to reduce their dependence on the dollar.

Both the retaining and the importing of raw materials amount to subsidies of manufactured exports.

The White House has said that Barack Obama is working on an important speech about international trade, but it is as yet unscheduled. In the meantime, these complaints to the WTO loom all the larger, though as yet they are strictly speaking only requests for “dispute settlement consultations.”

The Chinese government, which used to be quite yielding on WTO disputes, is defending the policies as being for the sake of the environment and the conservation of natural resources, but is hardly denying their consequences.

The WTO will not resolve these complaints quickly, but the U.S. and the EU have rightly put this whole complex of issues more squarely on the agenda.