The action came as the administration faced increased pressure from the Democratic-controlled Congress to do something about the nation's soaring trade deficits and lost manufacturing jobs, which critics blame in part on unfair trade practices by foreign nations.

The complaint alleges that China uses WTO-illegal tax breaks to encourage Chinese companies to export more to the United States while imposing tax and tariff penalties to limit purchases of US products in China.

"We are seeking to level the playing field to allow US manufacturers to compete fairly with Chinese firms," U.S. Trade Representative Susan Schwab said in announcing the case.

"The United States believes that China uses its basic tax laws and other tools to encourage exports and to discriminate against imports of a variety of American manufactured goods," Schwab said.

The decision to go to the WTO with a trade complaint will trigger a 60-day consultation during which trade negotiators will try to resolve the dispute. If that fails, a WTO hearing panel will be convened and if the US wins the case, it will be allowed to impose economic sanctions on Chinese products.

Schwab's announcement came two days after Treasury Secretary Henry Paulson faced stiff questioning before a congressional panel, where both Democrats and Republicans accused the administration of doing too little to deal with America's record trade deficits including deficits with China which are at all-time highs.

While an official with China's delegation to the WTO in Geneva said the Chinese would have no immediate comment on the case, members of Congress and US business groups praised the action.

"Forcing China to eliminate its illegal subsidies will keep world markets open to US goods, keeping jobs at home," said Senate Finance Committee Chairman Max Baucus.

John Engler, the former Michigan governor who is now head of the National Association of Manufacturers, said he was disappointed that other major trading partners including Japan and the European Union refused administration requests to join in filing the case.

"We hope that other countries will reconsider joining the case, recognizing it is not fair to have the United States do all the heavy lifting," Engler said.