WASHINGTON, Oct 22 - The United States will press China this week to stop government subsidies, tax breaks and other "heavy-handed industrial policies" that are distorting the steel market, a spokeswoman for the U.S. Trade Representative's office said on Wednesday.

The two countries are holding their fourth meeting of the U.S.-China steel dialogue on Thursday and Friday in Beijing at a time when a downturn in the world economy is having severe impact on steel demand in both countries.

U.S. steel producers blame Chinese government subsidies and unfair trade practices for a more than doubling of Chinese steel production between between 2004 and 2007 to 489 million metric tons, or about five times, U.S. steel output.

"We will continue to raise concerns about Chinese subsidies and other market distorting practices that affect U.S. steelmakers and urge China to adopt market mechanisms in the largely state-owned steel industry," USTR spokeswoman Gretchen Hamel said.

The U.S. team, led by Assistant U.S. Trade Representative for China Tim Stratford and Commerce Assistant Secretary for Import Administration David Spooner, will also press China on tax practices that appear to channel "steel production and exports into specific product areas, causing serious concerns in segments of the U.S. industry," Hamel said.

"We hope to get China to steer away from these heavy-handed industrial policies to move towards a more market-driven steel sector," Hamel added.

U.S. steel producers have pushed the Bush administration to bring a World Trade Organization case against Chinese export restrictions that they say distort world prices for coke and other steelmaking inputs.

Stratford told reporters earlier this month he would raise the issue again at this week's dialogue and hoped it could be resolved through talks rather than litigation.

Meanwhile, the United States has been using its anti-dumping and countervailing duty laws to curtail steel imports from China.

In May, the Commerce Department imposed a combined import duty of around 700 percent on a major Chinese steel pipe producer to offset what it said were government subsidies and unfair pricing practices.

The department also set a preliminary duty of 206 percent on steel threaded rod from China this month.

U.S. specialty steel producers have sent USTR a new report on Chinese government subsidies, which could set the stage for further U.S. action against Chinese steel.