China asked importers of caprolactam from the US and the European Union (EU) to pay a security deposit, the Ministry of Commerce (MOC) said Monday.
A statement from the ministry said that caprolactam, a widely used synthetic polymer, imported from the US and the EU, had been dumped in the country.
The dumping caused substantial damage to China's domestic industry, the statement said.
The ministry is expected to announce final ruling later, after conducting further investigations into the matter.
In December 2010, the US dragged China to the World Trade Organization (WTO) alleging that the country was illegally providing subsidies towards manufacture of wind power equipment.
Amid intensifying trade friction between the two countries, the allegation by the US accusing China of breaking the world trade rules is the second in less than four months.
In September last year, the US had filed another two cases against China related to Chinese government’s imposition of duties on US steel exports and discrimination on suppliers of electronic payment services from the U.S.
In April, China imposed duties on American steel and said these were subsidized. But the US contended that Chinese investigation lacked adequate evidence and followed improper procedures.
In case of electronic payment services, the US alleged market access restrictions and discriminatory limitations by China for its suppliers.