China has found some US-made passenger cars benefited from unfair subsidies, damaging its carmakers, but decided not to hit them with duties.

"After an investigation, the Commerce Ministry's final decision is that US firms that make sedans and sports utility vehicles of 2.5 liters and bigger engaged in dumping and were given subsidies," the ministry said in a statement.

"China's domestic car industry ... has suffered substantial damage. There's a causal link between the dumping and subsidies and the material damage."

But the Customs Tariff Commission of the State Council has agreed "not to impose anti-dumping duties and countervailing duties for now on the products that are being investigated," the ministry said. The investigation was launched in November 2009.

US officials reacted frostily to news. "We are very disappointed (with those determinations), even though it appears that such duties will not be imposed immediately," said Carol Guthrie, a spokeswoman for the US Trade Representative's office.

"The United States is closely reviewing the final determinations in these investigations, in particular their compliance with WTO rules," Guthrie said.

China's announcement came just days before the once-a-year Strategic and Economic Dialogue, which covers various economic and diplomatic issues between the United States and China. Trade disputes are likely to feature prominently.

China is an increasingly important export market for the US whose exports of new and used passenger cars to China tripled to $3.4 billion in 2010 over 2009's figures.