RESTRICTED  WORLD TRADE ORGANIZATION  
ORGANISATION MONDIALE DU COMMERCE  
ORGANIZACIÓN MUNDIAL DEL COMERCIO  WT/ACC/SPEC/CHN/1/Rev.2 
21 July 2000 
 (00-3023) 
Working Party on the 
Accession of China Original:   English/ 
 anglais/ 
 inglés 
  
DRAFT REPORT OF THE WORKING PARTY 
ON THE ACCESSION OF CHINA TO THE WTO
1 
 
Revision  
 
  
 The following is a further revision of the Draf t Report of the Working Party on the Accession 
of China to the WTO reflecting the submissions by  members and China since the beginning of the 
Tenth Meeting of the Working Party.  
 
 
Groupe de travail de 
l'accession de la Chine 
  
PROJET DE RAPPORT DU GROUPE DE TRAVAIL DE 
L'ACCESSION DE LA CHINE À L'OMC
1 
 
Révision  
  
 Le texte ci-après est une nouvelle révision du projet de rapport du Groupe de travail de 
l'accession de la Chine à l'OMC;  il tient compte des communications adressées par les membres et la 
Chine depuis le début de la dixième réunion du Groupe de travail. 
 
 Grupo de Trabajo sobre la 
Adhesión de China 
 
 
PROYECTO DE INFORME DEL GRUPO DE TRABAJO 
SOBRE LA ADHESIÓN DE CHINA A LA OMC
1 
 
Revisión  
 
  La siguiente es una nueva revisión del proyect o de informe del Grupo de Trabajo sobre la 
Adhesión de China a la OMC, en la que se tiene n en cuenta las comunicaciones formuladas por los 
miembros y China desde el comienzo de la décima reunión del Grupo de Trabajo. 
 
                                                     
 
1 In English only./En anglais seulement./En inglés solamente. WT/ACC/SPEC/CHN/1/Rev.2 
Page 2  
 
 
I. INTRODUCTION 
1. At its meeting on 4 March 1987, the Counc il established a Working Party to examine the 
request of the Government of the People's Republic of China (hereinafter referred to as "China") 
(L/6017, submitted on 10 July 1986) for resumption of its status as a GATT contracting party, and to 
submit to the Council recommendations which may include  a draft Protocol on the Status of China.  
In a communication dated 7 December 1995, the Government of China applied for accession to the 
Agreement Establishing the World Trade Organization (hereinafter referred to as the "WTO Agreement") pursuant to Article XII of the WTO Agreement.  Following China's application and 
pursuant to the decision of the General Council on 31 January 1995, the existing Working Party on 
China's Status as a GATT 1947 Contracting Party was transformed into a WTO Accession Working 
Party, effective from 7 December 1995.  The terms of reference and the membership of the Working 
Party are reproduced in document WT/ACC/CHN/2/Rev.6.   
2. The Working Party on China's Status as a Contracting Party met on 20 occasions between 
1987 and 1995 under the Chairmanship of H.E. Mr. Pierre-Louis Girard (Switzerland).  The Working 
Party on China's accession to the WTO Agreement met on _________________ and 
_________________ under the same Chairman.   
DOCUMENTATION PROVIDED 
3. The Working Party had before it, to serve  as a basis for its discussion, a Memorandum on 
China's Foreign Trade Regime (L/6125) and questions  posed by members of the Working Party on the 
foreign trade regime of China, together with repli es of the Chinese authorities thereto.  In addition, the 
Government of China made available to the Work ing Party a substantial amount of documentation., 
which is listed in document WT/ACC/CHN/23.  
INTRODUCTORY STATEMENTS 
4. In statements to the [GATT 1947 Working Part y and subsequently to the] Working Party [on 
China's accession to the WTO], the representative of China emphasized that [the resumption of 
China's status as a contracting party and] accessi on to the WTO were priorities for the government 
and critically important elements in the process of economic reform towards a more market-oriented 
economy and opening to the outside world.  He noted in this connection that China had been a full 
participant in the Uruguay Round and had signed the Final Act accepting the results of these negotiations.  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 3 
 
 
  5. The representative of China not ed that China had a territory of 9.6 million square kilometres 
and, at the end of 1998 a popul ation of 1.25 billion.  Since 19 79, China had been progressively 
reforming its economic system, with the objective of  establishing and improving the socialist market 
economy.  The reform package introduced in 1 994 covering the banking, finance, taxation, 
investment, foreign exchange and foreign trade sectors, had brought about major breakthroughs in 
China's socialist market economy.  State-owned ente rprises had been reformed by a clear definition of 
property rights and responsibilities,  a separation of government from enterprise, and scientific 
management.  A modern enterprise system had been  created for the state-owned sector, and the latter 
was gradually getting on the track of growth thro ugh independent operation, responsible for its own 
profits and losses.  A nation-wide unified and open ma rket system had been developed.  An improved 
macroeconomic regulatory system used indirect mean s and market forces to play a central role in 
economic management and the allocation of res ources.  A new tax and financial system was 
functioning effectively.  Financial policy had b een separated from commercial operations of the 
central bank, which now focussed on financial regulati on and supervision.   The exchange rate of the 
Chinese currency Renminbi had been unified and re mained stable.  The Renminbi had been made 
convertible on current account.  Furt her liberalization of pricing policy had resulted in the majority of 
consumer and producer produc ts being subject to market prices.  The market now played a much more 
significant role in boosting supply and meeting demand.  
6. He further noted that as a result, in 1999, the Gross Domestic Product (GDP) of China totaled 
RMB 8.2054 trillion yuan (approximately US$990 billi on).  In 1998, the net per capita income for 
rural residents was RMB 2,160 yuan (approximately US$260), and the per capita dispensable income 
for urban dwellers was RMB 5,425 yuan (approximately  US$655).  In recent years, foreign trade had 
grown substantially.  In 1999, total imports and exports of goods reached US$360.65 billion, of which 
exports stood at US$ 194.93 billion, and impor ts, $165.72 billion. Exports from China in 1998 
accounted for 3.4% of the world's total.  
7. The representative of China noted that the Gove rnment of China had always considered that 
rejoining the multilateral trading system would [offer great benefits, placing] [place] China's trade and 
economic relations on a stable and predictable footing, [subject to multilaterally agreed rules and 
disciplines, as well as improving] [and improve] market access for China and its trading partners.  It 
had always been the policy of China's Government  that reform and market-opening should proceed 
simultaneously with the development of the legal sy stem.  High priority had been given to economic 
legislation to guide and safeguard the deve lopment of the socialist market economy.  WT/ACC/SPEC/CHN/1/Rev.2 
Page 4  
 
8. [The representative of China [solemnly] st ated [that although China' s was clearly a special 
case, China expected to avail itself of the deroga tions and special provisions made available to 
developing country members of the WTO] [China should enjoy all rights and the special and 
differential treatment accorded to developing country  members].  In response, some members of the 
Working Party indicated that because of the significa nt size, rapid growth and transitional nature of 
the Chinese economy, China should not automatically receive all the benefits accorded to original 
developing country Members of the WTO.  In particular, some members of the Working Party 
considered that certain transitional arrangement s available to developing country WTO Members 
should not be granted to China.  Some members of  the Working Party considered that notwithstanding 
the fact that many of the features of China's economy were at present those of a developing country economy, China should, as a minimum, undertake to bring certain measures into conformity on a 
more expedited basis than would otherwise be require d of an original developing country Member of 
the WTO. ][Some members of the Working Party  in dicated that because of the significant size, rapid 
growth and transitional nature of the Chinese ec onomy, a pragmatic approach should be taken in 
determining China's need for recourse to transitiona l periods and other special provisions in the WTO 
Agreements available to developing country WTO Me mbers.  Each Agreement and China's situation 
should be carefully considered and specifically addressed.] 
9. Many members of the Working Party expressed th eir interest in carrying out bilateral market 
access negotiations with China with respect to industrial and agricultu ral products, and initial 
commitments in services.  The representative of China stated that China was ke en to undertake such 
negotiations with interested Working Party members.   
10. Some members of the Working Party stated that in addition to undertaking market access 
negotiations in goods and services, close attenti on should also be paid to China's multilateral 
commitments, in particular China's future obliga tions under the Multilateral Ag reements in Trade in 
Goods and the General Agreement on Trade in Serv ices (GATS).  This was of vital importance to 
ensure that China was able to ta ke [full] [relevant] benefit of the WTO Membership as quickly as 
possible, as well as to ensure that the value of  any market access conditions undertaken was not 
adversely affected by inconsistent measures such as some types of non-tariff measures.  [Only after 
enjoying normal rights of the WTO will China be  able to effectively fulfill its obligatins.] 
11. Some members of the Working Party expr essed concern over discrepancies in statistical 
information supplied by the government of Chin a on trade volume/value.  Members and China 
pursued this issue separat ely in an Informal Group of Experts on Export Statistics.  The Group of 
Experts submitted its report to the Chairman of the Working Party on 30 June 1994 (document …).  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 5 
 
 
  12. The Working Party reviewed the foreign tr ade regime of China.  The discussions and 
commitments resulting therefrom are contained in pa ragraphs … below and in the draft Protocol of 
Accession [and China's Schedules a nnexed to the Protocol].   
II. ECONOMIC POLICIES 
1. Non-discrimination (including national treatment)  
13. Some members expressed concern regarding the application of the principle of non-
discrimination in relation to foreign individuals a nd enterprises (whether wholly or partly foreign 
funded).  Those members stated that China shoul d enter a commitment to accord non-discriminatory 
treatment to all foreign individuals and enterpri ses and foreign-funded enterprises in respect of the 
procurement of inputs and goods and services neces sary for production of goods and the conditions 
under which their goods were produced, marketed or so ld, in the domestic market and for export.  In 
addition, China should also enter a commitment to guarantee non-discriminatory treatment in respect 
of the prices and availability of goods and servi ces supplied by national and sub-national authorities 
and public or state enterprises, in areas including transportation, energy, basic telecommunications, other utilities and factors of production. 
14. Some members of the Working Party also  raised concerns over China's practice of 
conditioning or imposing restri ctions upon participation in the Chinese economy based upon the 
nationality of the entity concerned.  Those members in  particular raised concerns over such practices 
in relation to the pricing and pr ocurement of goods and services, a nd the distribution of import and 
export licences.  Members of the Working Party requ ested that China enter into a commitment not to 
condition such practices on the nationa lity of the entity concerned.   
[15. In response, the representative of China emphasized the importance of the commitments 
that the government was undertaking on no n-discrimination. The representative of China 
noted, however, that any commitment to provi de non-discriminatory treatment to Chinese 
enterprises and foreign [and foreign funded]  enterprises and individuals in China would be 
subject to other provisions of the Protocol and, in particular, would not prejudice China's rights 
under the General Agreement on Trade in Services (GATS), China's GATS schedule or commitments undertaken in relation to trade-relat ed investment measures.  The Working Party 
took note of this statement. 
16.  The representative of China further co nfirmed that China would provide the same 
treatment to Chinese enterprises and foreign [and foreign funded]  enterprises and individuals in WT/ACC/SPEC/CHN/1/Rev.2 
Page 6  
 
China.  China would eliminate dual pricing practices as well as differences in treatment 
accorded to goods which are pro duced for sale in China and th ose produced for export.  The 
Working Party  took note of these commitments. ]   
[xx. China emphasized the importance of the co mmitments that the government was undertaking 
on non-discrimination. China confirmed that it wo uld be providing the same treatment to Chinese 
enterprises and the enterprises and individuals of other WTO members in China in respect of the 
requirements of this section of the Protocol. This  would involve the elimination of dual pricing 
practices as well as differences in treatment accorded to goods which are produced for sale in China 
and those produced for export. China noted, however,  that these requirement s are subject to other 
provisions of the Protocol and, in particular, w ould not prejudice China’s rights under the General 
Agreement on Trade in Services (GATS), China’s GATS schedule or commitments undertaken in 
relation to trade-related investment measures. Th e Working Party took note of this statement.] 
[xx. The representative of China confirmed that consistent with China’ s rights and obligations 
under the WTO Agreement and this Protocol, Chin a would provide non-discriminatory treatment to 
other WTO Members, in particular with respect to  any  benefit accorded to Members of the WTO  
that are separate customs territories.  The Work ing Party took note of this commitment.   
[xx. The representative of China confirmed that  all fiscal, financial and budgetary activities 
performed by sub-central governments would be in  compliance with Article III of the GATT 1994.  
The representative of China  confirmed that sub- central entities had no autonomous authority over 
issues of subsidies, taxation, trade policy or any ot her measures covered by WTO  provisions. He also 
confirmed that the provisions of the WTO Agreemen t, including China's Protocol, shall be applied 
uniformly throughout its customs territory, includi ng in  special economi c zones and other areas 
where special regimes for tariffs, taxes and regula tions are established.  The Working Party took note 
of these commitments.] 
[xx. Members expressed concern about certain  provisions of Chinese laws, regulations, 
administrative notices and other requirements whic h could, directly or indirectly, result in 
[prejudicial] [less favourable] treatment of imported products in contravention of Article III of GATT 
1994.  Such requirements include product registrati on and certification, internal taxation, price and 
profit controls and all distinct forms of licensi ng for imports, and distribution or sale of imported 
goods.  Even where such requirements exist in re lation to domestically produced goods, Members re-
iterated that any de facto  or de jure  [difference in the] [less favourable] treatment of imported goods 
must be eliminated in order to ensure full c onformity with the principle of national treatment.  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 7 
 
 
  xx. Members drew China’s attention to the va riety of types of requirements which could 
contravene GATT Article III. Specific reference was made to the procedures, charges and conditions 
for granting of business licences, whether to import, distribute, re-sell or retail goods of non-Chinese 
origin.  Reference was also made to taxes and fi scal provisions whose impact depends, directly or 
indirectly, upon the Chinese or non-Chinese origin of  the good imported or traded.  Members drew 
the attention of China to its obligation to ensure  that product testing and certification requirements, 
including procedures for in situ  inspections, posed no greater burden – whether financial or practical - 
on goods of non-Chinese origin than domestic goods.   Members underlined that technical assessment 
procedures and standards, including safety and ot her compliance requirements, had to respect the 
terms of the WTO Agreement on Technical Barriers to Trade as well as GATT Article III. 
xx. The representative of China confirmed that th e full respect of all laws, regulations and 
administrative requirements with the principle of  non-discrimination between domestically produced 
and imported products would be ensured and enforced  by the date of China’s accession to the WTO. 
China declared that, by accession, it would repeal a nd cease to apply all such existing [provisions and 
restrictions,] [laws, regulations and other measures] whose effect wa s inconsistent with WTO rules on 
national treatment.  This commitment was made in relation to final or interim laws, administrative 
measures, rules and notices, or any other form of  stipulation or guideline. The Working Party took 
note of these commitments.  
xx. In particular, the representative of China c onfirmed that measures would be taken [at national 
and subnational level], incl uding repeal or modification of legisl ation, to provide full GATT national 
treatment in respect of laws, regulations or othe r measures applying to [trade, distribution, sale and 
supply] [internal sale, offer for sale, distribution, purchase and use] of the following: 
- After sales service  (repair, maintenance and assistance), including any conditions applying to 
its provision,  such as the MOFTEC 3rd Decree of 6.9.93, imposing mandatory licensing 
procedures for the supply of after-sal es service on various imported products; 
- Pharmaceutical  products, including regulations, notic es and measures which subject imported 
pharmaceuticals to distinct procedures and formulas for pricing and classification, or which set limits on profit margins attainable [and im ports], or which create any other conditions 
regarding price [inclusion in the National Essential Drug Reimbursement List] or local 
content which may result in [prejudicial] [le ss favourable] treatment of imported products; 
- Cigarettes
, including unification of the licensing requirements so that a single licence 
authorises the sale of all cigarettes, irrespective of their country of origin, and elimination of WT/ACC/SPEC/CHN/1/Rev.2 
Page 8  
 
any other restrictions regarding points of sale for imported products, such as may be imposed 
by the China National Tobacco Corporation (C NTC). It is understood that in the case of 
cigarettes, China may avail itself of a transitiona l period of 2 years to fully unify the licensing 
requirements.  Immediately upon accession, and during the 2 year transitional period, the number of retail outlets selling im ported cigarettes shall be substantially increased throughout 
the territory of China; 
- Spirits
, including requirements applied under Chin a’s "Administrative Measures on Imported 
Spirits in the Domestic Market", and othe r provisions which impose distinct criteria & 
licensing for the distribution and sale of different categories of spirits, including unification of the licensing requirements so that a single licence authorises the sale of all spirits irrespective 
of their country of origin; 
- Chemicals
, including registration procedures applicab le to imported products, such as those 
applied under China’s "Environmental Control Regulations for Initial Imports of Chemical 
Products and Imports a nd Exports of Toxic Chemical Products"; 
- Boilers and pressure vessels , including certification and inspection procedures which must be 
no less favourable than those applied to goods  of Chinese origin, and fees applied by the 
relevant agencies or administrative bodies, which must be equitable in relation to those chargeable for like products of domestic origin. 
[The representative of China stated that in the cases of pharmaceuticals, spirits and chemicals cited 
above China would reserve the right to use a transitional period of one year from the date of accession 
in order to amend or repeal the relevant legisla tion.]  The Working Party took note of these specific 
commitments by China.] 
2. Monetary and Fiscal Policy 
[xx. Through the reform and ope ning up in the last two decades, China has established a fiscal 
management system which is compatible with the requirements of market economy. With respect to 
fiscal revenue, a taxation system with the value-added tax as the main part has been established since 
the taxation reform in 1994. With respect to fiscal expenditure, over recent years the government has, 
in line with the public fiscal requirement generally  exercised by market economies, strengthened its 
adjustment on the structure of expenditure and give n priority to public need s so as to ensure the 
normal operations of the government. 
 xx. In recent years, while pursuing proactive fiscal policy, China has implemented proper 
monetary policy and has taken a series of adjus ting and reform measures which include lowering the  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 9 
 
 
  interest rate for loans of financial institutions, improving the system of required deposit reserves and 
lowering the ratio of required reserves, positively increasing the input of base money and encouraging 
the commercial banks to expand their credit. 
 
xx. In respect of future fiscal policy, the Ch inese government will further improve its taxation 
system and will be continuing to improve the effi ciency of fiscal expenditure through implementing 
reform measures such as sectoral  budget, centralised payment by the national treasury and zero base 
budget as well as improving management on fiscal expe nditure. With respect to future monetary 
policy, the central bank will be continuing to pursue a prudent policy, to maintain the stability of RMB, to promote the interest rate liberaliza tion and to establish a modern commercial banking 
system.] 
3. Foreign Exchange and Payments 
17. Some members of the Working Party raised c oncerns about China's use of foreign exchange 
controls to regulate the level and composition of trade in goods and services.  In response, the 
representative of China stated that its system of  foreign exchange [controls] was undergoing rapid 
change.  Significant moves had been taken to refo rm, rationalize and liberalize the foreign exchange 
market.  The practice of multiple exchange rates in  swap centres had been abolished.  China [was 
moving towards a unified] [has already unified its] foreign exchange market and [had] removed many 
of the restrictions on the use of foreign exchange.  Some members of the Working Party stated that 
China should undertake appropriate commitments on its  reform of foreign exchange [controls].  
18. In response, the representative of China stated  that China was a member of the International 
Monetary Fund (IMF). The purpose of China's fore ign exchange [, (“fore x”)] reform was to 
gradually reduce administrative intervention and incr ease the role of market forces.  From 1979, a 
[foreign exchange, "forex"] retention system wa s applied in China, although [forex] [foreign 
exchange] swap was gradually developed.  In early  1994, official RMB exchange rates were unified 
with the market rates. The banking exchange syst em was adopted and a nation-wide unified inter-
bank forex market was established, with conditi onal convertibility of the Renminbi on current 
account.  Since 1996, foreign investment enterprises (FIEs) were also permitted into the banking 
exchange system, and the remaining exchange rest rictions on current account were eliminated. On 
1 December 1996, China had formally accepted the obliga tions of Article VIII, S ections 2, 3, and 4 of 
the IMF's Articles of Agreement, removing exchange  restrictions on current account transactions.  
Accordingly, since then the Renminbi had been fully convertible on current account. WT/ACC/SPEC/CHN/1/Rev.2 
Page 10  
 
19. The State Administration of Foreign Exch ange (SAFE) was [affiliated with] [under the 
auspices of] the People's Bank of China (PBC), a nd was the administrative organ empowered to 
regulate foreign exchange.  Its main functions we re to monitor and advise on balance-of-payments, 
foreign exchange matters.  SAFE was also require d to draft appropriate regulations and monitor 
compliance.  He further noted that domestic and fo reign banks and financial institutions could engage 
in foreign exchange business, with the approval of the PBC.  
20. In response to requests from members of the Wo rking Party for further information he further 
added that for foreign exchange  payments under current account, domestic entities (including FIEs) 
could purchase forex at market exchange rates from designated banks or debit their forex accounts 
directly upon presentation of valid  documents.  For payments such as pre-payment, commission and 
etc., exceeding the proportion or limit, the entities could also purchase forex from the banks upon 
meeting the bona fide test administered by SAFE. Foreign exchange for personal use by individuals 
could be purchased directly from the banks upon pr esentation of valid documents (within a specified 
limit).  For amounts exceeding the limit, individuals ab le to prove their [legitimate and valid] need for 
additional forex could purchase it from the banks.  He  also noted that current account forex receipts 
owned by domestic [firms] [entities] should be repa triated [promptly] into China and [some of which 
can be retained and some] be sold to the designate d banks at the market rates [(unless the firm was 
permitted to hold a domestic forex account)].  A [cl earance] [verification] system for forex payment 
(imports) and forex receipt (exports) had also been adopted.  
21. Concerning the exchange rate regime in par ticular, the representative of China noted that 
since the unification of exchange rates on 1 Janua ry 1994, China had adopted a single and managed 
floating exchange rate regime based on supply an d demand.  PBC published the reference rates of 
RMB against the US dollar, the HK dollar and Japan ese yen based on the weighted average prices of 
foreign exchange transactions [at the interbank fore x market] during the previous day's trading. The 
buying and selling rates of RMB against the US dollar on the inter-bank forex market could fluctuate 
within 0.3% of the reference rate. For the HK dolla r and Japanese yen, the permitted range was 1%.   
Designated foreign exchange banks could deal with their clients at an agreed rate.  Under such 
contracts the exchange rate of the US dollar was re quired to be within 0.15% of the reference rate, 
whereas for the HK dollar and Japanese yen, the permitted range was 1%.  [Permitted] [The 
exchange] rates for other foreign currencies were ba sed on the rates of RMB against the US dollar and 
cross-exchange rates of other foreign currency on international market . The [permitted margin 
between the] buying and selling rate coul d not exceed 0.5% [of the middle rate]. 
22. The representative of China further noted that  since 1 January 1994, designated forex banks 
had become major participants in foreign exchange  transactions.  On 1 April 1994, a [China] Foreign  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 11 
 
 
  Exchange Trading System was set up in Shanghai a nd branches were opened in [several] [dozens of] 
cities.  That Foreign Exchange Trading System had adopted a system of membership, respective 
quotation, concentrated trading and forex market  settlement.  Designated forex banks dealt on the 
inter-bank market according to the [working] [tur nover] position limit on banki ng exchange stipulated 
by SAFE and covered the position on the market . Depending on its macro economic objectives, the 
PBC could intervene in the forex open market in  order to regulate market supply and demand and 
maintain the stability of the RMB exchange rate.  
23. The representative of China noted that since [1 December 1998] [1 July 1996], forex dealing 
of the FIEs was carried out through the banking exch ange system. He further noted that to encourage 
foreign direct investment, China had granted national treatment to foreign investment enterprises in 
exchange administration.  Accordingly, FIEs were  allowed to open and hold forex settlement accounts 
to retain receipts under the current account, up to  a maximum amount stipulated by SAFE.  Receipts 
in excess of the maximum amount were required to be so ld to designated forex banks.  No restrictions 
were maintained on the payment and transfer of cu rrent transactions by FIEs , and FIEs could purchase 
forex from designated forex banks or debit th eir forex accounts for any payment under current 
transactions, upon the presentation of valid documents to the designated forex banks or SAFE for the 
bona fide test.  FIEs could also open forex accounts to hold foreign-invested capital, and they could 
sell from them upon the approval of SAFE.  FIEs c ould also borrow forex directly from domestic and 
overseas banks, but were required to register [the loan and repayments] with SAFE afterwards, [and 
obtain approval by SAFE for debt repayment and services].  FIEs could [remit foreign exchange 
directly] [make payment] from their forex acc ounts [or in foreign exchange purchased from 
designated foreign exchange banks] after liquidatio n [upon approval by SAFE] according to law.   
 
[xx. The laws and regulations mentioned above in clude:  Law of the People's Republic of China 
on Chinese-Foreign Equity Joint Venture;  Law of  the People's Republic of China on Chinese-Foreign 
Contractual Joint Venture;  Regulations on the Exch ange System of the People's Republic of China; 
and Regulations on the Sale and Purchase of and Payment in Foreign Exchange.] 
 
[xx. China noted the significant steps that had been  taken to reform, rationalize, and liberalize its 
foreign exchange market.  In particular, China had unified its foreign exchange market and achieved 
current account convertibility.  Moreover, China had st ated its acceptance of the obligations of Article 
VIII of the Articles of Agreement of the Internationa l Monetary Fund.  In the light of these advances, 
China would provide complete information on its exch ange controls in the context of the transitional 
review mechanism and such other information as is deemed necessary in  the context of the 
transitional review mechanism.  The Working Party took note of this commitment. 
xx. China  stated  that it would implement its oblig ations with respect to foreign exchange matters 
in accordance with the provisions of the WTO Agre ement and related declarations and decisions that WT/ACC/SPEC/CHN/1/Rev.2 
Page 12  
 
concern the International Monetary Fund.  In par ticular, China confirmed that it would not subject 
individual requests for foreign exchange for the making of payments and transfers  for current 
international transactions, including the issuance of credit or credit guarantees for current international 
transactions (e.g., letters of credit; direct loans; gua rantees of loans by financial institutions or other 
entities; or insurance of financing by financial ins titutions or other entities), to any form of approval 
or restriction (including a requirement for the pr esentation of an invoice), in a manner inconsistent 
with its obligations under the Articles of Agre ement of the International Monetary Fund. The 
Working Party took note of this commitment.] 
4. Balance-of-Payments Measures 
24. Some [members of the Working Party stated, in regard to BOP provisions, that China should 
be accorded fair treatment and equal right as a WTO Member.  But some other] members of the 
Working Party expressed concern that China should  not make indiscriminate use of balance-of-
payments measures pursuant to Article XII or XVIII:B of the GATT 1994 as justification for the 
imposition of quantitative restrictions or [other,]  price-based measures on imports.  Those members 
stated that the provisions of Article XII or XV III:B of the GATT 1994 and the Understanding on the 
Balance-of-Payments Provisions of the GATT 1994 should be strictly respected by China.  Those 
members also stated that measures taken for balan ce-of-payments reasons should have the least trade 
disruptive effect possible and should be limited  to temporary import surcharges, import deposit 
requirements or other equivalent price-based trad e measures, and those measures should not be used 
to provide import protection for specific sectors, industries or products.   
25. Those members further stated that any su ch measures should be notified pursuant to the 
Understanding on the Balance-of-Payments Provisi ons of the GATT 1994 to the General Council not 
later than the imposition of the measures, together with a time schedule for their elimination and a 
programme of external and domestic policy measur es to be used to restore balance-of-payments 
equilibrium.  Those members also stated that fo llowing deposit of such a notification, the Committee 
on Balance-of-Payments should meet to examine the notif ication.  It was noted that paragraph 4 of the 
Understanding on the Balance-of-Payments Provisi ons of the GATT 1994 would be available to 
China in the case of "essential products".   
26. In response, the representative of China stated that China considered that it should have the 
right to make full use of [WTO balance-of-payme nt provisions] [Article XVIII:B] to protect, as 
necessary, its balance-of-payments situation.  Some  members of the Working Party considered that 
China should undertake specific commitments in  connection with the invocation of [such 
measures][Article XVIII:B].  Those members also stated that the Committee on Balance-of-Payments  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 13 
 
 
  should review the operation of any balance-of-payme nts measures taken by China on an annual basis, 
if so requested by China or a WTO Member.   
5. Investment Regime 
[xx. Since the inception of the reform and opening up policy in late 1970's, China has carried out a 
series of reforms of its investment regime. The hi ghly centralised investment administration under the 
planned economy has been progressively transforme d into a new pattern of diversification of 
investors, multi-channel of capital sources and di versification of investment modalities. The 
government encourages foreign investment into th e Chinese market and has uninterruptedly opened 
and expanded the scope for investment. At the sa me time, the Chinese government also encourages 
the development of non-state-ope rated economy and is speeding up the opening of areas for non-state 
investment. With China's program in the establis hment of its market economy, the construction 
projects of various enterprises utilising free capital and financed by the credit of  the enterprise will be 
fully subject to the decision-making of the enterpri se concerned and at their own risk. The commercial 
banks' credit activities to all kinds of investors w ill be based on the evaluation and decision-making of 
their own and be at their own risk. The business activ ities of intermediate investment agencies will be 
fully subject to the market and will provide service at  the instruction of the investors. These agencies 
will break up their administrative relations with  government agencies and the service activities 
financed by the government should also be subject to  the terms and conditions agreed in the contracts 
concerned.]  
6. [State Ownership and Privatization ] [Commercial Operation of State Owned Enterprises] 
[xx. The state-owned enterprises of China have basically operated in accordance with rules of 
market economy. The government will no longer direc tly administer the human, finance and material 
resources and operational activities such as production, supply and marketing. The prices of commodities produced by state-own enterprises are decided by the market and resources in 
operational areas are fundamentally allocated by the market. The state-owned banks have been 
commercialised and the central revenue will no longer used to invest in these enterprises. China is 
furthering its reform of the state-owned enterpri ses and establishing the modern enterprise system.] 
 
[xx. In light of the role that state-owned and st ate-invested enterprises play in China’s economy, 
Members expressed concerns about the continui ng governmental influence and guidance on the 
decisions and activities of such enterprises relati ng to the purchase and sale of goods and services. 
Such purchases and sales should be based solely  on commercial considerations, without any 
governmental influence or application of discrimin atory measures.  In addition, Members indicated 
the need for China to clarify its understanding of th e types of activities that would not come within the 
scope of Article III:8(a) of GATT 1994.  For exampl e, any measure relating to state-owned and state-WT/ACC/SPEC/CHN/1/Rev.2 
Page 14  
 
invested enterprises importing materials and machiner y used in the assembly of goods which are then 
exported or otherwise made available for commerc ial sale or use or for non-governmental purposes 
would not be considered to be [a meas ure relating to] government procurement.  
xx. The representative of China emphasized the [evolving] nature of China’s economy and the 
significant role of foreign-invested enterprises a nd the private sector in the economy.  Given the 
increasing need and desirability of competing with private enterprises in the market, decisions by 
state-owned and state-invested enterprises had to  be based on commercial considerations as provided 
in the WTO.    
xx. The representative of China confirmed that Chin a would ensure that all state-owned and state-
invested enterprises will make purchases and sales based solely on commercial considerations, e.g., 
price, quality, marketability, availability, and that the enterprises of other WTO members will have an 
adequate opportunity to compete for sales to  and purchases from these enterprises on non-
discriminatory terms and conditions.  In addition, Ch ina’s government would not influence, directly 
or indirectly,  commercial decisions on the part of state-owned or state-invested enterprises, including 
the quantity, value or country of origin of any g oods purchased or sold, except in a manner consistent 
with the WTO.  The Working Party took note of these commitments.   
xx. China confirmed that, without prejudice to China’s rights in future negotiations in the 
Government Procurement Agreement, all laws, regul ations and measures relating to the procurement 
by state-owned and state-invested enterprises of goods and services for commercial sale, production 
of goods [or supply of services] for commercial sale, or for non-governmental purposes would not be 
considered to be [laws, regulations and measure s relating to] government procurement. Thus, such 
purchases or sales would be subject to the provisions of Articles II, XVI and XVII of the GATS and Article III of GATT 1994.  The Working Party took note of this commitment.  
xx. Members expressed concern about laws, regul ations and measures in China affecting the 
transfer of technology, in particular in the context of investment decisions.  Moreover, members of the 
Working Party expressed concern about measures conditioning the receipt of benefits, including 
investment approvals, upon technology transfer.  In  their view, the terms and conditions of technology 
transfer,  particularly in the context of an inv estment, should be agreed between the parties to the 
investment without government interference.  Th e government should not, for example, condition 
investment approval upon technology transfer.  
xx. China confirmed that it will only impose, a pply or enforce laws, regulations or measures 
relating to the transfer of technology, production processes, or other proprietary knowledge to an 
individual or enterprise in it’s territory that are not inconsistent with the WTO Agreements on Trade  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 15 
 
 
  Related Aspects of Intellectual Property Rights an d Trade Related Investment Measures.  China 
confirmed that the terms and conditions of t echnology transfer, production processes or other 
proprietary knowledge, particularly in the context of an investment, will be agreed between the parties 
to the investment.  The Working Party took note of these commitments.] 
7. Pricing policies  
27. Some members of the Working Party noted that China had made extensive use of price 
controls, for example in the agricultural sector .  Those members request ed that China undertake 
specific commitments concerning its system of state pr icing.  In particular, those members stated that 
China should allow prices for traded goods and servi ces in every sector to be determined by market 
forces, and multi-tier pricing practices for such goods and services should be eliminated.  Members 
noted, however, that the goods and services listed in A nnex 4 to China's Protocol were expected to 
remain subject to price controls, consistent with the WTO Agreement, in particular Article III of the 
GATT 1994 and Annex 2, paragraphs  3 and 4 of the Agreement on Agriculture.  Those members 
noted that except in exceptional circumstances, and subject to notification to the WTO Secretariat, 
price controls should  not be exte nded to goods or services beyond t hose listed in Annex 4, and China 
should make its best efforts to reduce and eliminat e those controls.  They also asked that China 
publish in the appropriate official journal the list of goods and services subject to state pricing and 
changes thereto.  
[xx. The official journal providing the informati on of price is the Commodity Price Notice of the 
People's Republic of China published in Beijing.  The floating range of guidance pricing referred to in 
paragraph 30 is generally 5% to  15%. The short statement of liberalisation on future government 
policies referred to in paragraph 31 reads as follows :  China will be continui ng to further its price 
reform, adjusting the catalogue subject to state pr icing and further liberalise its pricing policies.] 
 
28. China confirmed that it would publish in the official journal the list of goods and 
services subject to state pricing and changes thereto, together with [cost and] price-setting 
mechanisms and policies.  The Working Party took note of these commitments.  
[xx.     Members expressed the view  that price controls and state pricing in China also encompassed 
“guidance pricing” and  regulation of the range of profits that enterprises could enjoy.  Such policies 
and practices would also be subject to China’s commi tments.  In their view, price controls should be 
adopted only in extraordinary circumstances and should be removed as soon as the circumstances 
justifying their adoption were addressed.] WT/ACC/SPEC/CHN/1/Rev.2 
Page 16  
 
29. The representative of China noted that Chin a currently applied a mechanism of market-based 
pricing under macro-economic adjustment.  He noted that national treatment wa s applied in the areas 
of government pricing for all imported goods.  There were presently three types of prices: government 
price, government guidance price and market-regulated price.  The Government price was set by price administration authorities and could not be chan ged without the approval by these authorities. 
Products and services subject to Government pricing were those having a direct bearing on the 
national economy and the basic needs of the people's livelihood, including those products that were 
scarce in China.   
30. He further added that the Government guidan ce price mechanism was a more flexible form of 
pricing.  The price administration authorities stipulat ed either a basic price or  floating ranges[, guiding 
enterprises to set prices themselves].  [Enterprises could, within the limits of the guidance and taking 
into account the market situation, make their own decisions on prices.]  With market-regulated prices, 
enterprises were free to fix prices in accordance with supply and demand to the extent permitted by 
generally applicable laws, regulations  and policies concerning prices.   
31. In formulating Government prices and Gove rnment guidance prices, the following criteria 
were taken into account: normal production costs, supply and demand situati on, relevant government 
policies and prices of related products. When fi xing prices of consumer goods, consideration was 
given to the limit of consumers' purchasing power.  He noted that due to continued reform of China's 
price system, the share of Government prices had dr opped substantially and that of market-regulated 
prices had increased;  of social retailing products, th e share of Government prices was about 4%, that 
of Government guidance prices 1.2%, and that of market-regulated prices 94 .7%.  For agricultural 
products, the share of Government prices was 9.1% , Government guidance prices 7.1%, and market-
regulated 83.3%.  For production inputs, the share of government prices was 9.6%, that of government guidance prices 4.4%, and market-regulated prices 86%.  The share of directly 
government-controlled prices had been much reduced such  that it was even smaller than that in major 
Western market economies.  The Chinese Government  considered that China's price system was 
becoming increasingly rationalized, creating a rela tively fair marketplace for all enterprises to 
compete on an equal footing. 
32. The representative of China recalled that Annex 4 of the Draft Protocol of Accession contains 
a comprehensive listing of all products and services presently subject to Government guidance pricing 
and Government pricing.  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 17 
 
 
  33. China confirmed that price controls sha ll not be used for purposes of affording 
protection to domestic industries or services provi ders.  The Working Party took note of this 
commitment. 
[xx.  The representative of China confirmed that Chin a  would apply its current  price controls  and 
any other price controls applied from the entry into  force of this Protocol in a WTO-consistent 
fashion, and would take account of the interests of exporting WTO Members as provided for in 
Article III. 9 of the GATT 1994. The Working Party took note of these commitments.] 
8. Competition Policy 
[xx. The Chinese government encourages fair competition and is against unfair competition acts of 
all kinds. The Law of the People's Republic of China on Combating Unfair Competition promulgated 
on September 2, 1992 and impl emented on December 1, 1992 is the b asic law to maintain the order of 
competition in the market. In addition, the Price Law, the Law on Tendering and Bidding, the 
Criminal Law and other relevant laws also c ontains provisions on anti-monopoly and anti unfair 
competition. China is now formulating the Law on Anti-Monopoly.]  
III. FRAMEWORK FOR MAKING AND ENFORCING POLICIES 
1. [Powers of Executive, Legislative and Judicial Branches of Government ] [Uniform 
Administration of Laws and Regulations] 
[xx. The Representative of China stated that  China has been consistently performing its 
international treaty obligations in good faith. According to the Constitution and the Law on the 
Procedure of Conclusion of Treaties, the WTO Ag reement falls into the category of "important 
international agreements" that is subject to the ratification by the Standing Committee of the National 
People's Congress. China shall make its best effort to  keep its laws and regulations pertaining to trade 
or affecting trade in conformity with the WTO Ag reement and with its commitments so as to fully 
perform its international obligations. China's domestic laws and regulations ensure the full 
implementation of the WTO Agreement in China. Fo r this reason, China has commenced a plan to 
systematically revise its relevant domestic laws. Therefore, the WTO Agreement will be implemented 
in an effective and uniform way after China's accession.] 
 WT/ACC/SPEC/CHN/1/Rev.2 
Page 18  
 
34. The representative of China informed members of the Working Party that in accordance with 
the Constitution of the PRC, [the Standing Co mmittee of the National People's Congress had the 
power to annul those regulations and administrative d ecrees issued by both central and local [i.e. sub-
national] government[s] that cont ravened the Constitution and laws . The State Council had the power 
to annul those inappropriate regula tions and administrative decrees i ssued by both central and local 
government[s]] [the Law on Legislation of PRC, the National People’s Congress is the highest organ 
of state power. Its permanent body is its Standi ng Committee. The National People’s Congress and its 
Standing Committee exercise the legislative power of th e State. They have the power to formulate the 
Constitution and laws. The State Council i.e., the Central People’s Government of PRC, is the 
executive body of the highest organ of state pow er. The State Council, in accordance with the 
Constitution and relevant laws, is entrusted with the power to formulate administrative regulations. 
The ministries and commissions of the State C ouncil may issue department rules within the 
jurisdiction of their respective departments and in accordance with the laws and administrative 
regulations. The provincial people’s congresses and their standing committees may adopt local regulations. The provincial governments have the power to make local government rules. The 
National People’s Congress and its standing commi ttee have the power to annul the administrative 
regulations that contradict the Cons titution and laws as well as the local  regulations that contradict the 
Constitution, the laws and the administrative regul ations. The State Council has the power to annul 
the department rules and local government rules that  are inconsistent with the Constitution, the laws 
or administrative regulations.]  The Chinese Government  considered that these features of the Chinese 
legal system would ensure an effective and unifo rm implementation of the obligations resulting from 
China's accession to the WTO Agreement. 
[xx. The Representative of China stated that  China has been consistently performing its 
international treaty obligations in good faith. According to the Constitution and the Law on the 
Procedure of Conclusion of Treaties, the WTO agre ement falls within the category of "important 
international agreements" that is to be ratifie d by the Standing Committee of the National People's 
Congress. China shall make its best effort to keep  its laws and regulations pertaining to trade or 
affecting trade in conformity with the WTO agr eement and with its commitments so as to fully 
perform its international obligations . For this reason, China has comme nced a plan to systematically 
revise its relevant domestic laws. Therefore, the WT O agreement will be implemented in an effective 
and uniform way after China's accession.]  35. Members of the Working Party stated that it sh ould be made clear that China would apply the 
requirements of the WTO Agreement and [its ot her accession commitments throughout China's][any 
additional obligations created by China's Protocol  of Accession to its] entire customs territory,  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 19 
 
 
  including border trade regions, minority autonomous  areas, Special Economic Zones, open coastal 
cities, economic and technical developmen t zones and other special economic areas. 
 
36. Members of the Working Party also stated that China should ensure that the provisions of the WTO Agreement and any additional obligations cr eated by China's Protocol of Accession were 
applied uniformly throughout its entire customs te rritory, including at the sub-national level.  
Members of the Working Party also noted that China should administer in a uniform, impartial and 
reasonable manner all its laws, regulations and othe r measures pertaining to or affecting trade in 
goods, services or TRIPS or the control of foreign exchange. In this connection, members of the 
Working Party requested that Ch ina establish a mechanism under whic h individuals and enterprises 
could bring to the attention of the national author ities cases of non-uniform application of the trade 
regime.  Members of the Working Party also noted that China's laws, regulations and other measures 
of government entities at the sub-national level w ould be required to conform to the obligations 
undertaken in China's Protocol of Accession and the WTO Agreement.    
2. Uniform administration of the trade regime 
[xx. The representative of China  further conf irmed that the mechanism established pursuant to 
Section  2 (A) of the protocol would be operative upon entry into force of China’s protocol.  All individuals and entities coul d bring to the attention of central  government authorities cases of non-
uniform application of China’s trade regime, in cluding its commitments under the WTO and protocol. 
When China’s authorities were in formed of such cases,  relevant government authorities would 
promptly act to remedy the situation without requiri ng affected parties to petition through the courts, 
taking into consideration the need to provide a meaningful remedy. The individual or entity making 
the notification would be informed promptly in  writing of any decision and action taken.  The 
Working Party took note of these commitments.] 
3. Judicial Review 
37. Some members of the Working Party stated that China should designate independent 
tribunals, contact points, and procedures for the prom pt review of all administrative actions relating to 
the implementation of laws, regula tions, judicial decisions and administrative rulings of general 
application referred to in Article X:1 of the GA TT 1994, including administrative actions relating to 
import or export licences, non-tariff measures and an y other measures within the scope of the WTO 
Agreement.  Those members stated that notwithstanding Article X:3(c) of the GATT 1994, the WT/ACC/SPEC/CHN/1/Rev.2 
Page 20  
 
tribunals should be independent of the agenci es entrusted with administrative enforcement of 
provisions contained in the WTO Agreement. 
38. Those members also stated that the administ rative actions subject to review should include 
measures relating to the availability and distributio n of import and export licenses, permits or quotas;  
application of measures for safeguard or balance-of-payments purposes or to protect against unfair trade;  and any other measures within the scope of  the WTO Agreement, in particular any [actions 
required to be reviewed] [reviews required to be ma de available] under the re levant provisions of the 
TRIPS Agreement and the GATS.  Such review pro cedures should include the opportunity for appeal, 
without penalty, by individuals or enterprises affect ed by any administrative action subject to review.  
If an initial right of appeal was to an administrativ e body, there should be an opportunity for a further 
appeal to a judicial body.  Any decision by any appellate body and the reasons therefore would be 
communicated in writing to the appellant, together w ith notification of any right to further appeal. 
39. Some members of the Working Party expressed  concern about the functioning of China's  
institutions and procedures for the prompt review of  disputes over trade-related matters in China.  
Those members requested that the existing syst em be improved to provide speedier and more 
predictable access to those institutions and procedur es.  Members of the Working Party also requested 
that the types of measures subject to independent j udicial or administrative review should be extended 
from those currently covered by Chinese domestic pr ocedures.  In particular they requested that 
measures related to services trade and intellectual property and services be subject to such review 
processes.   
[xx. Members expressed concern that China needed to improve its institutions and procedures for 
the prompt review of disputes over trade-related matte rs in China, in particular with respect to the 
independence of the administrative and judicial authorities responsible for reviewing measures.  
Members also sought to ensure that all measures related to the WTO, including foreign exchange 
measures would be  subject to review under Chinese domestic procedures;  in particular they sought a 
commitment to cover measures related to services trade and intellectual property. Some Members sought explicit confirmation that certain types of m easures, such as decisions relating to statutory 
inspection and chemical registration,  would be subject to judicial review.] 
40. China confirmed that it would [revise its patent and trademark laws so that, upon 
accession, all of its laws and regulations will be  consistent with protocol requirements on 
procedures for judicial review of administrative actions.  The Working Party took note of this 
commitment. ]  [make the best effort to revise its relevant  laws and regulations so that its relevant  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 21 
 
 
  domestic laws and regulations w ill be consistent with the re quirements of all WTO covered 
agreements on procedures for judicial review of specific administrative actions.] 
[xx. The Representative of China also expressed  his concern on the unreasonable expectation of a 
few Members for China to assume even higher oblig ations than those required by the covered 
agreements with regard to judicial review wh ile no Member in WTO has ever undertaken such 
additional obligations. Considering this situation, the Representative of China takes the position that 
such unreasonable requirement on China would sure ly undermine the fundamental principle of non-
discrimination of this Organization.] 
[xx. In response to questions from Members,  the representative of China confirmed that 
administrative actions relating to any measure with in the scope of the WTO, including decisions 
relating to national treatment, conformity assessments, grant or denial of a license to provide a service 
and other matters, would be subject to the pro cedures established for prompt review under Section 
2(D) of the protocol and inform ation on such procedures would be available through the enquiry point 
that China would establish upon accession. The Work ing Party took note of these commitments.] 
41. China confirmed that [measures] [specific administrative actions] subject to review would 
include measures affecting in any way the reg ulation, control, supply or promotion of 
transportation and transportation-related serv ices, insurance and insurance-related services, 
banking and other financial services, teleco mmunications services, distribution services, 
entertainment services, information processing serv ices, construction and maintenance services, 
professional services, and retail sales services.  China undertook to ensure that all such 
measures would be subject to review.  The Work ing Party took note of that commitment.   
4. Authority of Sub-Central Governments 
42. In response to questions, the representative of  China recalled that the central government had 
exclusive constitutional power to overturn all m easures taken at sub-national level that were 
inconsistent with China's international obligations.  
43. Several members of the Working Party rai sed concerns about the continued presence of 
multiple and overlapping trade instruments used by different levels of government within China.  
Those members considered that situation resulted in  a lessening of the security  and predictability of 
access to the Chinese market.  In addition, some members expressed concerns about the limited 
control exercised by the central government over trad e measures introduced at the sub-national level. WT/ACC/SPEC/CHN/1/Rev.2 
Page 22  
 
[44. The representative of China indicated that China intended to apply the WTO Agreement to 
the fullest extent not inconsistent with mandatory legislation in existence on the date of entry into 
force of the Protocol.  Members raised concerns as to what China might consider to be existing 
"mandatory legislation".  China was requested to s ubmit an illustrative list of such legislation.  Some 
members of the Working Party stated that give n the constitutional power of China's central 
government to ensure compliance w ith China's WTO obligations by both its national and sub-national 
authorities, and to override inconsistent measures at the sub-national level, very few, if any, Chinese 
laws could meet the criteria of existing mandatory le gislation.  Some members of the  Working Party 
noted that the GATT 1994, unlike the GATT 1947, did not permit the possibility of exempting existing mandatory legislation.]   
[45. Some members raised concerns about the precise nature and scope of China's customs 
territory and how China's customs territory inter-rela ted with [the] [its] separate customs territories of 
Hong Kong, China, Macau, China and [the separat e Customs Territory of Taiwan, Penghu, Kinmen 
and Matsu ("Chinese Taipei")] [Chinese Taipei].  Members of the Working Party and China agreed 
that [on the basis of one-China, China will be a Member of WTO as a sovereign state. "Hong Kong, 
China", "Macau, China" are and "Chinese Taipei " will be WTO Members as separate customs 
territories of China.]  China [would] [will ], [as a WTO Member,] in accordance with 
GATT Article XXIV:1, maintain [standard] [normal] WTO relations with [those other] [its] separate 
customs territories.] 
46. Some members of the Working Party raised  concerns in relation to the uniformity of 
administration of the foreign trade and economic regi me within China.  In particular, those members 
raised concerns about measures ta ken by sub-national authorities.  In response, the representative of 
China emphasized that the central government had full constitutional authority to ensure compliance 
with WTO obligations by both national and sub-nati onal governmental authorities in China.  Some 
members requested that an appropriate commitmen t be undertaken in this regard by China.  
47. Some members of the Working Party raised concerns about the limited ability of China's 
central government to be sufficiently informed about non-uniform practices and to take necessary 
enforcement actions.  Those memb ers stated that China should establish a mechanism by which any 
concerned person could bring to the attention of the central government cases of non-uniform 
application of the trade regime.  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 23 
 
 
  IV. POLICIES AFFECTING TRADE IN GOODS 
1. Trading Rights 48. Some members noted that few enterprises with in China had full freedom to engage in foreign 
trade, i.e., the right to import and export goods w ithout restriction.  Those members noted that in 
many cases, enterprises wishing to import or export goods had to conduct such trade through a state-
trading enterprise.  Those members stated that China should progressively liberalize the right to trade, 
so that, within three years of accession to the WTO all enterprises in China would have the right to 
import and export as well as to trade in all goods th roughout the customs territory of China.  Such a 
commitment would be without prejudice to China's ri ght to regulate trade in a manner consistent with 
the WTO Agreement and would not include those g oods listed in Annex 2(a) 1 and 2(a)2 of China's 
Protocol of Accession, which would continue to be subject to state-trading in accordance with that 
Protocol.   
49. Those members also stated that enterprises enjo ying the right to trade should also be accorded 
national treatment under Article III of GATT 1994, especi ally paragraph 4 thereof, in respect of  
internal sale, offering for sale, purchase, transporta tion, distribution or use, including their direct 
access to end-users. Those members also stated that  all foreign individuals and enterprises, including 
those not invested or registered in China, shoul d be accorded treatment no less favourable than that 
accorded to enterprises in Ch ina with respect to the right to trad e.  In respect of goods that would 
remain subject to designated trading listed in A nnex 2b of China's Protocol of Accession, China 
should phase out limitations on the grant of trading ri ghts pursuant to the schedule in that Annex.  
They also stated that China should complete all necessary legislative procedures to implement these 
provisions during a transition period. 
[xx. The end user herein refers to the Chinese enterprises without right to import and/or export. At 
present, these enterprises import the products for th eir own use through enterprises with right to 
import and export. Three years after China's acce ssion to the WTO, the right to trade shall be 
liberalised, as a result of which, all enterprises in China will have right to trade, therefore the end 
users at that time will be legal persons of  enterprises which use imported products.] 
 [Designated trading  
xx. China will adjust and expand its list of en terprises under designated trading regime annually 
during the transitional period, until such time as th e full implementation of the commitment contained 
in Annex 2b. The criteria for enterprise under designat ed trading regime include  the registered capital, WT/ACC/SPEC/CHN/1/Rev.2 
Page 24  
 
import and export volume and the import volume of products subject to designated trading in the 
previous year, bank credit rating and profits and losses.] 
50. Some members of the Working Party expressed concern that China's restrictions on the right 
of enterprises to engage in trade operated as signi ficant limitations on secure and predictable access to 
the Chinese market.  Members sought progressive elim ination of all such restrictions and objective 
and generally applicable criteria for the granting of  trading rights pending the elimination of all such 
restrictions.  China noted that it was in the pro cess of liberalizing trading rights but that certain 
products would remain the exclusive domain of d esignated foreign trade corporations.  China also 
noted that criteria for the granting of trading rights were set out in China's Foreign Trade Law.  Some  
members of the Working Party considered that Ch ina should enter a specific commitment in relation 
to trading rights.  
[xx. Some members noted that few enterprises with in China had full freedom to engage in foreign 
trade, i.e., the right to import and export goods.  Those members noted that in many cases, enterprises 
wishing to import or export goods had to conduct such trade through a state-trading enterprise.  Those members expressed concern that China's restrictions on the right of enterprises to engage in trade were 
among the most significant limitations on securing access to the Chinese market.  Members sought 
progressive elimination of all such restrictions  and the application of objective and generally 
applicable criteria for the granting of trading rights pending the total elimination of such restrictions.  
Those members stated that China should progressively liberalize the right to trade, so that, within 
three years of accession to the WTO all enterprises  in China and foreign enterprises and individuals 
would have the right to import and export as well as to trade in all goods throughout the customs territory of China.  Such a commitment would be without prejudice to China's right to regulate trade in a manner consistent with the WTO Agreemen t and would not include those goods listed in 
Annex 2(a)1 and 2(a)2 of China's Protocol of A ccession, except as otherwise specified in China’s 
Protocol.   
xx. Members noted that China was in the process of  liberalizing the availability of the right to 
import and export goods from China, but that such ri ghts were now restricted to enterprises in China.  
Objective criteria for the grant of trading rights needed to be agreed and applied to facilitate 
implementation of the national treatment provisions  in this Section of China’s Protocol. Members 
emphasized that upon accession China would need to a pply the same criteria to foreign enterprises 
and individuals that it applied to  Chinese enterprises in authorizing foreign enterprises and individuals 
to import and export goods, rather than approving the grant of such rights on case-by-case basis.  This  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 25 
 
 
  would ensure that the process of progressive liberalization would proceed more rapidly and 
uniformly. 
xx. Those members noted China’s commitment to accord foreign enterprises and individuals, 
including those not invested or registered in Chin a, national treatment with respect to obtaining the 
right to trade.  Moreover, goods imported or exported by foreign enterprises and individuals must also 
be accorded national treatment under Article III of  GATT 1994, especially paragraph 4 thereof, in 
respect of internal sale, offering for sale, purchase, transportation, distribution or use, including their 
direct access to end-users. In respect of goods that would remain subject to designated trading listed in 
Annex 2b of China's Protocol of Accession, China should phase out limitations on the grant of trading 
rights pursuant to the schedule in that Annex.  Th ey also stated that China should complete all 
necessary legislative procedures to implement th ese commitments during this transition period. 
xx. Members requested that China provide de tailed information regarding the process for 
enterprises and individuals to qualify to import and export goods.   The need for specific, objective 
and automatic criteria for the prompt grant of ri ghts was emphasized.  Existing enterprises should be 
able to engage in importation a nd exportation without need to amend their scope of business or obtain 
a new business license, since the approval process coul d itself delay and form a barrier to obtaining 
these important rights. Members sought assurances that China’s requirements for various licenses, 
such as import business licenses, would not adversely affect the realization of the right to trade.  Nor should enterprises be required to establish in a partic ular form or create separate entities to engage in 
importing or exporting.  
xx. The representative of China confirmed that China would progressively liberalize the scope 
and availability of trading rights in China. Upon accession, China would eliminate export performance and trade and foreign exchange bala ncing requirements as criteria for obtaining or 
maintaining the right to import and export.   China would also immediately upon accession apply an 
automatic registration system for obtaining the ri ght to trade instead of a licensing system. The 
representative of China also confirmed that the ri ght to trade will be granted promptly to any 
enterprise seeking to import or export such goods and an enterprise’s scope of business would 
automatically encompass the right to import and export.  Enterprises would not be required to 
establish in a particular form or as a separate entity  to engage in importing and exporting nor would 
new business licenses be required to engage in these activities.  Except as otherwise specified in its 
Protocol, China would permit Chinese enterprises, in cluding foreign-invested enterprises, and foreign 
enterprises and individuals to import and export all goods into its customs territory according to the 
following schedule.  Upon accession:  All goods except t hose listed in appendix (1a);  within one year WT/ACC/SPEC/CHN/1/Rev.2 
Page 26  
 
after entry into force of China’s Protocol, all goods except those listed in appendix (1b); and two 
years after entry into force of China’s Protocol a ll goods except those listed in appendix (1c).  Three 
years after entry into force of its Protocol, the re presentative of China confirmed that all goods, except 
as otherwise specified in the Protocol, could be imported and exported throughout the customs 
territory of China. The Working Party took note of these commitments. 
xx. The representative of China further confirme d that China would grant to any enterprise 
possessing the right to trade any product pursuant to Section 5 of the Protocol, the right to import 
goods in Annex 2a that are subject to a tariff quota or to an agreed volume of  imports by non-state 
trading enterprises, except for the quantity of such goods specifically  reserved for importation by state 
trading enterprises.  Any firm possessing the right to  trade pursuant to Section 5 would also have the 
right to import that portion of a tariff rate quota r eallocated to non-state trading enterprises pursuant to 
the agreed rules on tariff rate quota administration.  China also confirmed that for goods in Annex 2a 
subject to a tariff rate quota, any enterprise granted the right to trade, pursuant to Section 5 of the Protocol, would be permitted to import such goods at  the out-of-quota tariff rate.  The Working Party 
took note of these commitments.  
xx. Members noted China’s commitment that it w ould phase out the limitation on the grant of 
trading rights for goods specified in Annex 2b (“Pr oducts Subject to Designated Trading”) within 
[three] years of entry into force of its Protocol.  In responding to questions raised by WTO members, 
the representative of China said that China would pr ogressively liberalize the right to trade in such 
goods by increasing the number of designated entities permitted to import goods in each of the three 
years of the transition period specified in Annex 2b .  The representative of China added that China 
would extend the right to register  as designated importing and exporting enterprises for the goods in 
Annex 2b in each of the first, second and third years afte r entry into force of its Protocol to enterprises 
that used such goods in the production of finished goods and enterprises that distributed such goods in 
China.  At the end of three years, all enterprises in China and all foreign enterprises and individuals 
would be permitted to import and export such goods  throughout the customs territory of China. The 
Working Party took note of this commitment.] 
A. IMPORT REGULATION 1. Ordinary customs duties 
51. Members of the Working Party noted the substa ntial unilateral tariff reductions made in many 
sectors by China in recent years.  They also acknowledged the increased breadth of bindings and 
reduction in average tariff levels.  Some member s expressed concern over continued high levels and 
the lack of proposed tariff bindings in some sectors.   WT/ACC/SPEC/CHN/1/Rev.2 
 Page 27 
 
 
  52. The representative of China provided member s of the Working Party with a copy of the 
Customs Tariff and related laws a nd regulations.  He noted that the Customs Tariff of China was a 
charge imposed on imported goods. The purpose of levy ing tariff was twofold:  (a) to regulate imports 
so as to promote and support domestic production, a nd (b) to serve as an important source of revenue 
for the treasury of the Central Government.  China' s tariff policy was to promote economic reform and 
opening of the economy.  [The basic principles fo r establishing duty rates were as follows.  Duty-free 
or low duty rates were applied to imported goods  which were needed for the national economy and 
the people's livelihood but which were not produced sufficiently domestically.  Import duty rates on raw materials were generally lower than those on semi-manufactured or manufactured products.  For 
parts or components of machinery, equipment and instruments which were not produced domestically, 
or at a sufficiently high standard, the import duty was lower than the duty on complete products.  
Higher duty rates were applied to products which were produced  domestically or which were 
considered non-essential for the national economy a nd the people's livelihood.   A higher duty was 
applied to imported products, the equivalent of which were produ ced domestically and the local 
manufacturer of which needed protection.] 
53. The representative of China noted that China had adopted the Harmonized Commodity 
Description and Coding System (HS) as from 1 Janua ry 1992 and joined the International Convention 
on the Harmonized Commodity Description and Coding Sy stem in the same year.  There [were] [are] 
21 sections, 97 chapters and [7066] [7062] tariff head ings in the Customs Import and Export Tariff of 
the PRC.  Tariff rates were fixed by the State Council.  Partial adjustment to the duty rates was subject 
to deliberation and final decision by the State [C ouncil] Tariff Commission.  The [current] simple 
average  of China's import duties [in 1999] [in 2000] was [14.44%] [16.4%].  Among the [7066] [7062] tariff headings[, tariff rates for 709 headi ngs were below 5%, those for 2015 were 5%-9%, 
those for 1356 were 10%-15% and those for 2896 were  above 15%.]  [Tariff rates for 525 headings 
are below 5%, 1488 are between 5% (inclusive) a nd 10% (exclusive), 2022 between 10% (inclusive) 
and 15% (inclusive) and 3027 are above 15%.]  Info rmation on tariff rates for specific products and 
import statistical data for recent years [was] [has been] provided to the Working Party.   
[54. He also noted that there were two columns of import duty rates: general rates and preferential 
rates. The preferential rates applie d to imports originating in countr ies and regions with which China 
had concluded reciprocal tariff agreements, whereas the general rates applied to imports from other 
sources.] WT/ACC/SPEC/CHN/1/Rev.2 
Page 28  
 
[xx.  Members welcomed China’s decision to bind ta riffs for all products in its schedule on market 
access for goods.  This action would increase the certain ty and predictability of this aspect of China’s 
trade regime. 
xx. The representative of China confirmed that  upon accession China will participate in the 
Information Technology Agreement (ITA).  Furt hermore, upon accession, China will eliminate all 
other duties and charges for ITA products.  The Working Party took note of these commitments. 
xx. Some Members, however, expressed concerns over the broad availabilit y and application of 
tariff reductions and exemptions for a wide variet y of enterprises and other entities, including state 
trading enterprises, state-owned enterprises, forei gn-invested enterprises and not-for profit entities.  
Similar concerns also existed for exemptions from application of other duties, taxes and charges.  
Members noted the detrimental effect such reductions or exemptions had on revenues and 
predictability and certainty in ap plication of tariff and other trad e measures.  The representative of 
China recognized that currently many foreign and domestic entities enjoyed exemptions from tariffs 
and other duties and charges assessed at the border.    The representative of China confirmed that upon 
entry into force of this Protocol, China would adopt and apply reductions and exemptions from the 
commitments set forth in China’s market access sch edule so as to ensure MFN and national treatment 
for imported goods.  The Working Party took note of this commitment. 
xx. Members expressed particular concerns about ta riff treatment in the auto sector.  In response 
to questions about the tariff treatment for kits for motor vehicles, China confirmed that it has no tariff 
lines for completely knocked-down kits for moto r vehicles or semi-knocked down kits for motor 
vehicles.  If China creates such ta riff lines, the tariff rates will be no more than 10 percent.  The 
Working Party took note of this commitment. 
xx. With respect to future tari ff liberalization, China stated its support for the ongoing Early 
Voluntary Sectoral Liberalization program initiate d in the Asia Pacific Cooperation Forum (APEC) 
and now under consideration in the WTO.  Without prejudice to its rights to participate in the WTO 
process, China will participate full y in the sectoral tariff liberaliz ation programs that WTO Members 
accept for implementation.  The Working Party took note of this commitment. 
xx. The representative of China further confirme d that tariff rates on pa per and wood products 
will be applied on an MFN basis even  if China enters into  an agreement pursuant to Article XXIV of 
GATT 1994 or cuts tariffs on these goods as part of  a WTO-consistent preference programme.  The 
Working Party took note of this commitment.] 
  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 29 
 
 
  [xx. China will join the Information Techno logy Agreement upon its accession to the WTO and 
the schedule of concessions will be incorporated in its final schedule.] 
55. China undertook bilateral market access negotia tions on goods with members of the Working 
Party.  The results of those negotiations are contained in the Schedule of Concessions and 
Commitments on Goods and forms Annex 10 to China' s Draft Protocol of Accession to the WTO.  
2. Other duties and charges levied on im ports but not on domestic production 
56. Some members of the Working Party stated th at China should ensure that all other duties and 
charges applied to imported products were applied in conformity with the requirements of the WTO 
Agreement, in particular Article VIII of the GATT 1994.   
[xx. The representative of China confirmed that Ch ina had agreed to bind at zero other duties and 
charges in its Schedule of Tariff Concessions pursu ant to Article II:1(b) of the GATT 1994.  The 
Working Party took note of that commitment.] 
3. Rules of Origin 
[xx. China's rules of origin for import and expor t are non-preferential rules of origin. Upon its 
accession to the WTO, China will implement the Ag reement on Rules of Origin of the WTO. Once 
the international harmonisation of non-preferential rules of origin has concluded, China will fully 
adopt the internationally harmonised non-preferential rules of origin. 
 
xx. The criteria for making the determination of s ubstantial transformation is  (a) change in tariff 
classification of a four-digit tariff line in the Cu stoms Import and Export Tariff of the People's 
Republic of China; or (b) the value added component  is 30% or more in the total value of a new 
product. 
 
xx. China will not use the rules of origin as an instrument to pursue trade objective directly or 
indirectly.] 
[xx. Some members of the Working Party requested information about the adoption and 
application of rules of origin in China, whether in  the context of free trade agreements or otherwise, 
and also requested China to confirm that its rules of origin for both preferential and non-preferential 
trade complied fully with the WTO Agreement on Rules of Origin.] 
57. The representative of China noted that when an imported product was processed and 
manufactured in several countries, the country of orig in of the product was determined to be the last WT/ACC/SPEC/CHN/1/Rev.2 
Page 30  
 
country in which the product underwent substantia l transformation. Substantial transformation was 
understood to mean processing which results in a cha nge of the four-digit level tariff classification or 
an added value (including all cost -related expenditures) exceeding 30% of the total value. These rules 
of origin were applicable to a ll imported products. The rules of orig in applied for statistical purposes 
were the same.  However, for statistical purposes, the Customs also records countries of consumption 
and trading countries. 
[xx. The representative of China confirmed that from the date of accession, China’s preferential 
and non-preferential rules of origin would comply fully with the WTO Agreement on Rules of Origin, 
and that a mechanism that meets the requirements of Article 2(h) and Annex II , paragraph 3(d) of the 
Agreement, which require provision upon request of an assessment of the origin of the import and 
outline the terms under which it will be provided, w ould be established in Ch ina's legal framework 
prior to accession. The Working Party took note of this commitment.] 
4. Fees and charges for services rendered 
58. Some members of the Working Party expressed concern over an apparent lack of uniformity 
of customs fees and charges administered by national and sub-national authorities.  Members of the 
Working Party noted that as a condition of accession to the WTO China should undertake a 
commitment to ensure conformity of such fe es and charges with Articles II and VIII of the 
GATT 1994. 
[xx. China commits itself to comply with Artic les II and VIII of GATT 1994 in this regard.] 
5. Application of internal taxes to imports 
59. Some members of the Working Party expressed concern that some internal taxes applied to 
imports, including a Value-added Tax (VAT) were  not administered in conformity with the 
requirements of the GATT 1994, particularly Article III.  Those members of the Working Party noted 
that China appeared to permit the application of di scriminatory internal taxes and charges to imported 
goods and services, including taxes and charges applie d by sub-national authorities.  Those members 
requested that China undertake a commitment to ensure  that all such internal taxes and charges would 
be in conformity with the requirements of the GATT 1994.   
60. In response, the representative of China noted  that there were three major types of taxes 
levied on products and services:  (a.) VAT levi ed on goods and services for processing, maintenance 
and assembling;  (b.) the Consumption Tax on some selected consumer products;  (c.) the Business 
Tax on providing services, transferring intangible assets and selling real estate.   Both the VAT and  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 31 
 
 
  the Consumption Tax were applicable to entiti es importing goods. VAT and the Consumption Tax on 
imported goods were collected by the Customs at the point of entry.  He noted that VAT was  
reimbursed once goods were exported.   Exported goods were exempt ed from the Consumption Tax. 
61. He further noted that the State Council determ ined all policies concerning the levying of VAT 
and the Consumption Tax, adjustment of tax typ es and tax rates (tax value), as well as the tax 
exemption of VAT, the Consumption Tax and the Bu siness Tax.  The laws and regulations were 
interpreted and implemented by the Ministry of Finance and the State Administration of Taxation. 
VAT and the Consumption Tax were levied and admi nistered by the State competent departments of 
taxation, while the Business Tax was collected and administered by the local competent departments 
of taxation.  
6. Tariff rate quotas, tariff exemptions 
62. Some members of the Working Party expressed  concern over the lack of transparency, 
uniformity and security of China's administration of its tariff rate quota and tariff exemptions regime.  
Those members suggested that China enter a co mmitment in relation to those matters.  [The 
representative of China confirmed that administra tion of TRQ will be consistent with the import 
licencing procedure Agreement.] 
[xx. The tariff exemption policy of China is de veloped and implemented in accordance with the 
Customs Law of the People's Republic of China and the Regulations of the People's Republic of 
China on Import and Export Duties. The coverage of specific tariff reduction or exemption is 
provided for by the State Council. All the statut ory tariff reduction and ex emption are applied on a 
m.f.n. basis.] 
[xx. Members expressed concern that Scheduled  tariff quotas should be administered simply, 
effectively, transparently and in a non-trade restric tive manner.  China agreed that it would administer 
the tariff quotas fully in accordance with WTO rules and principles and that the administration would 
be along the following lines and in accord with th e provisions set out in the Schedule. ]  [ Paragraph 
to be added which briefly outlines the arr angements for state-traded commodities and wool. ] 
7. Quantitative import restrictions, including prohibitions and quotas 
63. In response to requests for informati on from members of the Working Party, the 
representative of China noted that China prohib ited [or restricted] the importation of certain 
commodities, including various types of weapons , ammunition and explos ives, narcotic drugs, WT/ACC/SPEC/CHN/1/Rev.2 
Page 32  
 
poisons, obscene materials, and foodstuffs, medicines,  animals and plants [which] were inconsistent 
with China's standards on food, medicines, animals and plants.  
64. Members of the Working Party noted that th ere were a large number of overlapping non-tariff 
measures in existence in China, bo th at the national and sub-national levels, which appeared to have a 
trade restrictive or trade distorting effect.  Those members requested that China undertake a 
commitment to eliminate and not to introduce, re -introduce or apply non-tariff measures other than 
those specifically identified and subject to phased elimination in Annex 3 to China's Protocol of 
Accession.  
65. Some members of the Working Party also ra ised concerns that many non-tariff measures were 
imposed by sub-national authorities in China on a non-transparent, discretionary and discriminatory 
basis.  Those members of the Working Party asked that China undertake a co mmitment to ensure that 
non-tariff measures would only be imposed by the ce ntral government or by sub-national authorities 
with clear authorization from the central governme nt.  [Authorities][Actions] lacking  authorization 
from the national authorities, should not be implemented or enforced. 
66. Some members of the Working Party noted that China had provided a list of non-tariff 
measures in respect of which China was prepared  to commence phased elimination.  That list was 
entered in Annex 3 of China's Protocol of Access ion.  Those members stated that China should 
eliminate the measures listed in acco rdance with the schedule provided in Annex 3, during the periods 
specified in Annex 3.  Those members also noted that the protection afforded by the measures listed 
in Annex 3 shall not be increased or expanded in size, scope, or duration, nor any new measures be 
applied, unless in conformity with the provisions of the WTO Agreement. 
67. Those members of the Working Party also noted that in implementing the provisions of 
Articles III and XI of the GATT 1994 and the Agre ement on Agriculture, China should eliminate and 
not introduce any new nor re-introduce any old non- tariff measures that coul d not be justified under 
the provisions of the WTO Agreement.  Those me mbers also stated that all non-tariff measures 
administered by China, whether or not referred to  in Annex 3 of the Protocol of Accession, which 
were applied after China's accession to the WTO, s hould be allocated and otherwise administered in 
strict conformity with the provisions of the WTO Agreement, including Article XIII of the 
GATT 1994 and the Agreement on Import Licensing Pro cedures, including notification requirements.  
[xx. During the phasing-in period, China will ad minister relevant quotas, licenses and tendering 
requirement in accordance with th e current administrative regulations which has been notified to the 
Secretariat. China has also modified Annex 3 on th e basis of the comments raised during the latest  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 33 
 
 
  session of the Working Party. Annex 3 contains all the products subject to quotas, licenses and 
tendering requirement in China.] 
[xx. The representative of China confirmed that , upon accession, China shall comply with the 
Agreement on Trade-Related investment Measures and shall take the necessary legislative measures 
to eliminate foreign-exchange balancing and trade balancing requirements, lo cal content requirements 
and export performance requirements. Chinese author ities–whether national or sub-national–shall not 
enforce the terms of contracts containing such requ irements. The allocation or permission or rights for 
importation and investment shall not be conditional upon performance re quirements set by national or 
sub-national authorities, or subject to secondary conditions covering, for example, the conduct of 
research, the provision of offsets or other forms of industrial compensation including specified types 
or volumes of business opportunities, the use of local inputs or the transfer of technology.  Permission 
to invest, import licenses, quotas and tariff rate qu otas shall be granted without regard for the 
existence of competing Chinese domestic suppliers. 
xx. In addition to restrictions maintained on exports of silk, some Members expressed concern 
about China’s  restrictions on exports of other go ods, in particular raw materials or intermediate 
products that could be subject to further processing, such as tungsten ore concentrates, rare earths and 
other metals.  Members urged China to ensure that  any such restrictions that were imposed or 
maintained complied with the terms of the WTO an d Protocol.  Some Members also noted that the 
requirements and procedures for obtaining import licenses and export licenses often were not 
transparent, and, when known, proved overly burdensome.  Often, it took a long time to obtain all of 
the required approvals.  
xx. The representative of China confirmed that upon en try into force of this Protocol, restrictions 
on exports would be eliminated unless they could be justified under the WTO and this Protocol.  In 
particular, any export restrictions  on tungsten ore concentrates woul d be eliminated upon accession.  
The Working Party took note of this commitment. 
xx. Some Members requested information on how China would implement the quota and 
licensing requirements for products listed in Annex 3,  in particular the procedures and criteria for 
grant of quota allocations and li censing during the phase-out period for these restrictions.  Members 
expressed concern about complex and burdensome requirements for obtaining a license or quota 
allocation which often required approvals from vari ous authorities within an organization as well as 
approval from both the sub-central and central leve l.  Members sought a transparent, streamlined 
system that would issue quota allocations and licenses through a simple, consolidated approval WT/ACC/SPEC/CHN/1/Rev.2 
Page 34  
 
process that would ensure full use of the quota and its equitable distribution among importers.  
Members also requested information on how China would establish the value of imports for those 
products whose quota is established in terms of value of imports.     
xx. The representative of China confirmed that the products currently covered under the HS 
categories listed in Annex 3 were the only products that would continue to be subject to quotas during 
the agreed phase-out periods and that additional pro ducts would not be added to these HS categories.  
In response to questions from some Members, he confirmed that the quota for autos and certain parts 
did not include CKD kits.  Further, the representative of China stated that for products listed in Annex 
3 as being subject to quota and licensing requirements, any entity possessing the right to trade, including enterprises in the sector importing the products or importing in puts for production purposes, 
will be permitted to apply for and receive a quota al location and license to im port  products listed in 
Annex 3.  China’s system for quota allocation a nd licensing would ensure that those entities with 
quota allocations would also receive any necessary import license.  This system would conform to WTO rules and would be transparent, timely, res ponsive to market conditions and would minimize 
the burden on trade.  All applications for an import license and allocation of the quota would be 
submitted to the organization authorized to grant su ch allocations and licenses. Applicants would be 
required to approach only one organization at one level (central or sub-central) to obtain both an 
allocation and license.  In exceptional cases, an a pplicant may be required to approach up to three 
organizations for approval of an allocation and license.  The releva nt organization, amount of quota, 
including the growth in quota provided for in A nnex 3, and procedures for application for a quota 
allocation and license, including the beginning and e nd date of the application period and any other 
relevant procedures or criteria will be published in the official journal referred to in paragraph 2(C)(2) 
of the Protocol no later than 30 days prior to the beginning of the application period. Such application 
period will be from 1-30 June. Quotas and licenses shall be allocated to applicants  no later than 30 
days after closure of the application period.   
xx. The representative of China stated that Chin a will grant quota allocations on a first-come-first 
served basis, valid for importations on a calendar year  basis.   If after the specified application period 
additional quota remains,  the relevant orga nization will receive and process requests for quota 
allocations and licenses until the full amount of the quot a has been allocated.  Such allocations will be 
made within 10 days after receipt of a request.  If requests for a quota allocation received at the same time exceed the quota level, the relevant organiza tion will ensure that quota is allocated in an 
equitable manner that promotes utilization of the allo cation, including  granting a proportionate share 
of individual requests and giving priority consid eration to unfilled requests in the context of 
reallocated quota.  In all cases, allocations will be established for commercially viable quantities and 
provision will be made for partial shipments against a single allocation. Inquiries regarding quota  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 35 
 
 
  allocation and grant of a license can be made to the relevant organization, with written responses 
provided within 10 working days. 
xx. The representative of China confirmed that all commercial terms of trade, including product 
specifications, product mix, pricing, and packaging,  will be at the sole determination of the quota 
holder. Allocations will be valid fo r any article or mixture of articles subject to the same quota as 
specified in Annex 3.  Allocations will be valid for a period of 12 months from the opening of the 
quota import period.  However, if the holder of a quota allocation has not contracted for import of the 
total quantity allocated to it within 6 months afte r the opening of the import period, the holder shall 
immediately return the unused portion of the allocati on to the relevant authority which shall reallocate 
the quota immediately, if unfilled requests are pending, or otherwise within 10 days after receipt of a 
request for an allocation.  The relevant orga nization will publish notice of the availability of 
additional allocations on a monthly basis. This re allocation shall be valid for the duration of the 
original term.  For quota quantities specified in term s of value, China will determine the value of any 
shipment based on the F.A.S. ship value listed on the bill of lading.   The Working Party took note of 
these commitments.] 
8. Import licensing 
68. In response to requests for information, the re presentative of China stated that the list of all 
entities responsible for the authorization or approva l of imports would be u pdated and republished in 
the official journal within 30 days of any change thereto.  [The Working Party took note of this 
commitment.] 
[xx. MOFTEC Gazette, a weekly magazine publ ished in Beijing under the sponsorship of 
MOFTEC which is available at MOFTEC.] 
[delete paras 69-71]  [69. Concerns were expressed by some members of the Working Party in relation to the use of 
import licensing as restrictive non-ta riff measures.  Some members of  the Working Party asked that 
China undertake a commitment to comply with  the requirements of the Agreement on Import 
Licensing Procedures.  In response, the representati ve of China stated that the number of products 
subject to restrictive licensing was being reduced a nd that China would comply with the requirements 
of the Agreement on Import Licensing Procedures WT/ACC/SPEC/CHN/1/Rev.2 
Page 36  
 
70. Some members of the Working Party stated  that in implementing the WTO Agreement and 
provisions of the Agreement on Import Licensing Procedures, China should undertake the following 
measures to facilitate compliance with those agreem ents.  They stated that China should notify the 
following on a regular basis in the official journal re ferred to in paragraph 2( C)2 of its Protocol of 
Accession:   
(a) a listing by product, of all organizations, including those organizations delegated such 
authority by the national authorities, that were responsible for authorizing or 
approving imports or exports, whether thr ough grant of license or other approval;   
(b) a description of all procedures and criteria for obtaining such import or export 
licenses or other approvals, and the conditi ons for deciding whether they should be 
granted; 
(c) a list of all products, by HS system tari ff number, that were subject to tendering 
requirements, including information on pr oducts subject to such tendering 
requirements and any changes, pursuant to the Agreement on Import Licensing Procedures; 
(d) a list of all goods and technologies who se import or export was restricted or 
prohibited;  this  list should be notified to the Committee on Import Licensing;  and  
(e) any changes to the list of goods and technologies whose import and export were 
restricted or prohibited; 
Those members also stated that within 75 days of each publication, copies of those notifications 
should also be notified to the WTO Secretariat in a WTO official language for circulation to WTO Members and for submission to the Committee on Import Licensing. 
71. Those members of the Working Party also stated that China should notify the WTO 
Secretariat of all licensing and quota requirements remain ing in effect after the date of entry into force 
of this Protocol, listed separately by HS tariff line,  with the quantities covered by the restriction, the 
justification for maintaining the restriction or its sch eduled date of termination.  Those members also 
requested that China submit the notification of its  import licensing procedures to the Committee on 
Import Licensing, as required by Article 5 of the Agreement on Import Licensing Procedures.  
Moreover, those members of the Working Party stated that China should report annually to the 
Committee on Import Licensing, on its automatic import licensing procedures noting the reasons for the import licensing requirement and justifying the n eed for their continuation.  That notification  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 37 
 
 
  would also contain the information listed in Article 3 of the Agreement on Import Licensing 
Procedures.  In addition, those members stated that  China should ensure that import licences remained 
valid for at least six months, except in exceptiona l circumstances.  In such cases, China should 
promptly notify the Committee on Import Licensing of the exceptional circumstances requiring the 
shorter period of licence validity.  Those members also  stated that foreign individuals and enterprises 
and foreign-funded enterprises should be accorded tr eatment no less favourable than that accorded to 
other individuals and enterprises in respect of  the distribution of import licences and quotas.] 
72. In response, the representative of China pr ovided additional information on the system of 
import licensing operating in China. He noted that  the import licensing system was administered 
without discrimination among countries or regions. In 1984, the State Council had promulgated the 
"Interim Regulations on Licensing System for Import Commodities", and MOFTEC and the General 
Customs Administration had issued "Detailed Rules for the Implementation of the Interim 
Regulations on Licensing System for Import Commod ities". The Interim Regulations were uniformly 
implemented throughout China. The import licensing system ensured that limited foreign exchange 
resources were used for imports most needed by  national economic development and that necessary 
assistance could be provided to the domestic indus tries. In 1999, of the total import value of 
US$ 165.7 billion, imports subject to licensing repr esented 8.45%, covering US$ 14 billion.  He noted 
that MOFTEC determined which products should be subject to import licensing according to the 
relevant provisions of the "Foreign Trade Law".   
73. He stated that in 1993, China had applied im port restrictions to 53 product categories.  By 
1999, the number had been reduced to 35.  Products  covered were (1) Processed oil;  (2) Wool;  
(3) Polyester fibre;  (4) Acrylic fibres;  (5) Polyest er fillet;  (6) Natural rubber;  (7) Vehicles tyres;  
(8) Sodium cyanide;  (9) Sugar;  (10) Fertilizer;  (11) Tobacco and its products;  (12) Acetate tow;  
(13) Cotton;  (14) Motor vehicles and their key parts;  (15) Motorcycles and their engines and 
chassises; (16) Colour television sets and TV kinesc ope;  (17) Radios, tape recorders and their main 
parts;  (18) Refrigerators and their compressor;  (19) Washing machines;  (20) Recording equipment and its key parts;  (21) Cameras and their bodi es (without lenses);  (22) Watches;  (23) Air 
conditioners and their compressor;  (24) Audio a nd video tape duplication equipment;  (25) Crane 
lorries and their chassises;  (26) Electronic mi croscopes;  (27) Open-end spinning machines;  
(28) Electronic colour scanners;  (29) Grain;  (30)  Vegetable oil;  (31) Wine;  (32) Colour sensitive 
material;  (33) Chemical under s upervision and control that were  used for chemical weapon;  
(34) Chemicals used to produce narcotics;  and (35) Laser disc production facilities.  He also noted that in 1999, there were 13 commodity categor ies which were imported by the foreign trade 
companies designated by MOFTEC. These categori es were as follows:  (1) Processed oil  WT/ACC/SPEC/CHN/1/Rev.2 
Page 38  
 
(2) Fertilizer (3) Tobacco (4) Vegetable oil (5) Grai n (6) Natural rubber (7) Wool (8) Acrylic fibers 
(9) Sugar (10) Cotton (11) Crude oil (12) Steel and (13) Plywood. 
74. Concerning the grant and administration of import licences, the representative of China noted 
that the examination and approval of the licence t ook two to three working days. Applications for 
import licences could be submitted to the Quota and License Administrative Bureau of MOFTEC, or Special Commissioner Offices in 16 provinces, or Commissions on Foreign Economic Relations and 
Trade of various provinces, autonomous regions , and municipalities directly under the central 
government and those with indepe ndent budgetary status. Licensing ag encies authorized by MOFTEC 
could issue import licences on the basis of import documents submitted by the applicants,  approved 
by the competent departments. A licence could not be bought, sold or transferred, and was valid for 
one year.  Import licences could be extended once.    
[xx.    Working Party Members expressed con cern that China’s Provisional Procedures for the 
Administration of Automatic Registration for the Import of Special Commodities (13 August 1994), in particular the criteria for approval of registration, would act as a restraint on imports.  The representative of China emphasized that the purpose of the registration system was only to gather 
statistical information.  He confirmed that Chin a would bring its automatic licensing system into 
conformity with Article 2 of the Agreement on Import Licensing upon entry into force of the Protocol and would eliminate criterion,  such as the need to establish demand and foreign exchange availability, as conditions for approval.  The Work ing Party took note of this commitment.   
xx.   Working Party Members noted that enterp rises and individuals seeking to import  products 
subject to tariff quota administration requirements ha d to go through extensive procedures to receive a 
quota allocation and that the quota certificate would indicate whether the subject good was to be imported through a state trading enterprise or a non-state trading enterprise and would be valid for a certain period of time.  Moreover, the entity impor ting the good would need trading rights.  In the 
light of these multiple requirements, a quota alloca tion certificate should satisfy any import licensing 
requirement that might apply. 
xx.     China confirmed that it would not requ ire a separate import license approval for goods subject 
to a tariff-quota allocation requirement but would provide any necessary import license in the 
procedure that granted a quota allocation.  If quot a is reallocated pursuant to China’s tariff-quota 
administration commitments, the provisions relating to licensing of such reallocated quantities shall 
apply.  The Working Party took note of this commitment. 
xx. China confirmed that the list of all entities r esponsible for the authorization or approval of 
imports and exports would be updated and republished in the offici al journal within one month of any  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 39 
 
 
  change thereto.  The Working Party took note of this commitment. 
xx.   China confirmed that it would implem ent the provisions of the Agreement on Import 
Licensing with Procedures upon entry into force of this  Protocol without recourse to the provisions of 
footnote 5 of that  Agreement.  The Working Party took note of this commitment.] 
9. Customs Valuation  
[xx. Some members expressed concern regarding the methods used to determine duty-paying 
value of goods, in particular rega rding the practice of using minimum or reference prices for certain 
goods.  Use of such prices woul d be inconsistent with the WT O Agreement on Implementation of 
Article VII.  Other WTO-consistent means were available to Members doubting the veracity of 
declared transaction values.] 
[xx. The China side believes that there will not be  a situation where the "normal transaction value" 
cannot be "ascertained" since the WTO Customs Va luation Agreement provides several methods for 
valuation.] 
75. The representative of China recalled that th e overwhelming majority of China's customs 
duties were ad valorem  duties.  The customs or duty-paying value of imported goods was assessed 
according to the C.I.F. price based on the normal transaction value. If the transaction value of 
imported goods could not be [determined] [ascertain ed], the duty-paying value was determined based 
on the transaction value or the computed value of identical or similar goods.  He also noted that the Customs Law provided for appeal procedures. In th e event of a dispute over calculation of duty paid 
or payable with the Customs, the dissatisfied  importer could apply to the Customs for a 
reconsideration of the case. If the appeal was rejected  the importer could sue at the People's Court.   
[move to section on Tariff rate Quotas/Exemptions ][76. He further noted that in accordance with 
international practices and provisions of China’s Cu stoms Law, import duty reductions or exemptions 
were available for the following goods: 
 (a) A consignment of goods, on which cu stoms duties were estimated below RMB 
10 yuan; 
 (b) advertising articles and samples,  which were of no commercial value; WT/ACC/SPEC/CHN/1/Rev.2 
Page 40  
 
 (c) goods and materials, which were rendered gratis by international organizations or 
foreign governments; 
(d) fuels, stores, beverages and provisions fo r use en route loaded by any means of 
transport, which was in transit across the border; 
 (e) exported goods being replaced;  (f) goods damaged prior to Customs release; 
 (g) goods covered by international treaties providing for tariff reductions and exemptions 
which China had entered into or acceded to; 
 (h) goods temporarily imported;  (i) goods imported under the processing program;  (j) goods imported at zero cost for offset purpose; 
 (k) domestic- or foreign-funded projects encouraged by the country; 
 (l) articles for scientific research, education and the disabled. He noted that goods so imported were required to be put under the Customs supervision and control. 
The Customs duty was required to be recovered if su ch goods were sold, transferred or used for other 
purposes during the time period of supervision and control. ] 
[xx. The representative of China  confirmed that, fro m the entry into force of this Protocol, China 
would apply fully the WTO provisions concerning customs valuation and would not invoke the provisions in Article 20 of the Agreement on Impl ementation of Article VII of the GATT 1994.  In 
addition, China would apply the provisions on the Tr eatment of Interest Charges in Customs Value of 
Imported Goods and for the Valuation of Carrier  Media Bearing Software for Data Processing 
Equipment. In accordance with these latter provisi ons, only the cost of the carrier medium itself 
would be accounted for in the customs value.   The Working Party took note of these commitments.] 
10. Other customs formalities 
[xx. China joined the International Conven tion on the Simplification and Harmonisation of 
Customs System in 1988 and signed the Protocol on the Amendment the International Convention on 
the Simplification and Harmonisation of Customs System. The Customs authorities of China have  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 41 
 
 
  only adopted such customs forma lities as declaration, examination,  levying of duties and release 
which are consistent with international practices.] 
11. Preshipment inspection 
[xx. Currently, there are trade and commerce inspection agencies (including joint venture 
agencies) engaged in preshipment inspection. Chin a commits itself to comply with the Agreement on 
Preshipment Inspection of the WTO, and will re gulate the existing trade and commerce inspection 
agencies and permit the qualified agencies to be enga ged in preshipment inspection in line with the 
government mandate or the terms and conditions of commercial contracts.] 
[xx.  Some members of the Working Party re quested information on wh ether China used the 
services of a private preshipment inspection entity.  The representative of China confirmed that China 
did not use private preshipment inspection entities and stated that China would ensure than any laws 
and regulations relating to preshipment inspection by private entities now or in future would be 
consistent with relevant WTO Ag reements, in particular, the Agreements on Preshipment Inspection 
and Customs Valuation.  Moreover, any fees charge d in connection with such preshipment inspection 
would be commensurate with the service provi ded.  The Working Party took note of these 
commitments.] 
12. Anti-dumping, countervailing duties 
77. The representative of China noted that Ch ina had recently promulgated Anti-dumping and 
Countervailing Regulations.  On saf eguard measures, he noted that at present, China was going 
through the legislative procedure of drafting legi slation regarding safeguard measures in accordance 
with the Article 29 of the Foreign Trade Law and the WTO Agreement on Safeguards.  
[xx.  The representative of China confirmed that, notwithstanding Article 18 of the Agreement on 
Implementation of Article VI of GATT 1994 (“Antidumping Agreement”), 
(a) China shall apply the provisions of the Antidumping Agreement to: 
(1)  proceedings under Article 9.3, including  the calculation of margins of dumping, in 
connection with antidumping measures adopted be fore the entry into force of China’s  
Protocol (“existing measures”) pursuant to request s made on or after the entry into force of 
this Protocol; WT/ACC/SPEC/CHN/1/Rev.2 
Page 42  
 
(2) reviews of existing measures initiated unde r Articles 9.5, 11.2, and 11.3 pursuant to 
requests made on or after the entry into force of this Protocol.  Any review of an existing 
measure under Article 11.3 shall be initiated no later than five years from the date of its 
imposition. 
(b) China shall also provide the type of judi cial review described in Article 13 of the 
Antidumping Agreement with regard to proceedings  under Article 9.3 and reviews under Articles 9.5, 
11.2, and 11.3. 
The Working Party took no te of these commitments.] 
78. Several members of the Working Party not ed that China was continuing the process of 
transition towards a full market economy.  Those members noted that under those circumstances, in 
the case of imports of Chinese origin into a WT O Member, special difficulties could exist in 
determining price comparability in the context of an ti-dumping investigations and countervailing duty 
investigations. Those members stated that in such cases, the importing WTO Member may find it 
necessary to take into account the possibility that a strict comparison with domestic prices in China 
may not always be appropriate.  
[xx. The Representative of China expressed concern w ith regard to past measures taken by certain 
Members which have treated China as a non-mark et economy and imposed antidumping duties on 
Chinese companies without identifying or publis hing the criteria used, without giving Chinese 
companies sufficient opportunity to present evidence a nd defend their interests in a fair manner, and 
without explaining the rationale underlying their de terminations as well as using unreasonable method 
of price comparison in the determinations. The Representative of China thereupon stated the 
following positions with regard to the implementation of paragraph 1(b) of Ar ticle 20 of the Protocol 
on Price Comparability in determining Dumping and Subsidization:   
(a) When determining price comparability in a pa rticular case in a manner not based on a strict 
comparison with domestic prices or costs in China,  the importing WTO Member should ensure that it 
has established and published rules in advance on (1 ) the criteria that it uses for determining whether 
market economy conditions prevail in the in dustry producing the like product and (2) the 
methodology that it uses in determining the price comparability.  The importing WTO Member should 
select the prices or costs of the like product pr oduced in a market economy which has a most 
comparable level of development of that industry with China.   WT/ACC/SPEC/CHN/1/Rev.2 
 Page 43 
 
 
  (b) The importing WTO Member should give notice of the information which it requires and 
provide Chinese producers and exporters ample opportunity to present evidence in writing in a 
particular case; 
 (c) The importing WTO Members should provide Chinese producers and exporters a full opportunity for the defense of their interests in a particular case;  
 
(d) The importing WTO Member should provide  a sufficiently detailed reasoning of its 
determinations in a particular case;  and  (e) The WTO Anti-dumping Agreement shall fully apply in proceedings involving imports of 
Chinese origin except as otherwise provided in the Draft Protocol. 
 The Working Party took note of China’s positions.  
 
xx. The Representative of China stated that in respect of Section 20(4) of the Protocol which 
provides: "Once China has established under the nati onal law of the importing WTO Member, that it 
is a market economy, the provisions of subparag raph (1) shall be terminated provided that the 
importing Member's national law contain market economy criteria as of the date of entry into force of 
China's Protocol…..", China could accept this pr ovision only under the condition that it will be 
applied by Members in good faith and that Members would interpret the criteria of market economies 
in a way consistent with the principles reflected in the WTO agreement and  in international law so as 
to prevent any arbitrary discrimination and other a buse. The acceptance of this mechanism is also 
made on the condition that an earlier termination de facto or de jure, of this mechanism be effected as 
soon as possible. The Working Party took note of China’s positions.] 
 
[xx. The representative of China expressed con cern with regard to the implementation of 
Article 20 on Price Comparability in determining Dumping and Subsidization, and stated the 
following: 
1. The provisions of the Anti-Dumping Agre ement and the SCM Agreement shall apply 
in proceedings involving imports of Chin ese origin except as otherwise provided for 
in the Protocol. WT/ACC/SPEC/CHN/1/Rev.2 
Page 44  
 
2. The provisions of the Dispute Settlement Understanding shall appl y to consultations 
and the settlement of disputes arisi ng under Article 20 of the Protocol. 
3. For the effective application of the a bove-mentioned subparagra ph (1), the importing 
WTO Member shall define clear and reasona ble criteria of the market economy and 
publish them before they are applied. 
4. When invoking the methodology pursuant to subparagraph (1)(b) in the Protocol on 
Price Comparability in determining Dumping and Subsidization, the importing WTO 
Member should select the prices or costs of the like product produced in a market economy which has an equivalent level of ec onomic development with that of China.  
The process of selection should be transparent and provide adequate opportunity for the Chinese producers or exporters to make comments on it or make 
counter-proposals for the purpose of fair treatment.  
The Working Party took note of China's position.] 
 [ Competent Authorities for Anti-dumping a nd Countervailing Duty Investigations and 
Their Corresponding Responsibilities  
 
xx. Pursuant to the stipulations of "Regulati on on Anti-dumping and Anti-subsidy of the People's 
Republic of China", there are four Chinese gove rnment bodies responsible for anti-dumping and 
countervailing duty investigations. Their responsibilities are as follows: 
 
 A. Ministry of Foreign Trade and Economic Cooperation (MOFTEC)  
xx. Receiving anti-dumping and countervailing petitions; Conducting investigation on dumping 
and dumping margin and issuing relevant prel iminary determination decisions and notices; 
Negotiating with foreign interested parties on "Pri ce Undertaking" if necessary; Providing proposal on 
imposition of definitive anti-dumping or countervaili ng duties or proposals on duty refund, etc. There 
is an Anti-dumping Division established under th e Department of Treaties and Law of MOFTEC, 
with responsibility to handle anti-dumping and co untervailing investigati ons on alleged imports. 
 
 B. State Economics and Trade Commission (SETC)  
xx. Responsible for the investigation of injury cau sed by the dumped or subsidised imports to the 
domestic industry, the extent of such injury and make injury findings.  
xx. There is a non-permanent decision and po licy making body in SETC which named as the 
"Injury Investigation and Determination Committee” (IIDC) which is composed of six commissioners  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 45 
 
 
  from the relevant departments of SETC. There is  a permanent executive office in charge of the 
investigation of injury to the industry and submitting its findings to the IIDC for approval. 
 
 C. General Customs Administration (CGA) 
 xx. Coordinating anti-dumping investigations w ith MOFTEC; Enforcing anti-dumping measures 
such as collecting cash deposits, dumping or counte rvailing duties and monitoring its implementation. 
  D. Tariff Commission of State Council(TCSC) 
 
xx. Making final decisions on whether or not to  levy the dumping or countervailing duties and 
refund duties based on the suggestions by MOFTEC  with regard to imposing anti-dumping or 
countervailing duties and reimburse excess amount of duties respectively.] 
 
13. Safeguards  
 [ The status of the draft legislation on safeguards  
 
xx. Upon the accession to WTO, China will impl ement Regulation on Safeguard by which the 
future Safeguard measures will be regulated. The drafti ng work of this regulation is still on the way. It 
can be expected that the contents of this new regulation will be fully co nsistent with Safeguard 
agreement of WTO.] 
B. EXPORT REGULATIONS 
1. Customs tariffs, fees and charges for services  rendered, application of internal taxes to 
exports  
79. Some members of the Working Party noted th at certain taxes and charges appeared to be 
applied exclusively to exports.  Those members of the Working Pa rty stated that those taxes and 
charges should be eliminated unless applied in conform ity with GATT Article VIII[.   In addition, all 
goods subject to export duties should be listed]  in Annex 6 to China's Protocol of Accession [and 
such duties applied in conformity with WTO requirements].  
[xx. Some Members raised concerns over taxes a nd charges applied exclusively to exports.  In 
their view, such taxes and charges should be eliminated unless applied in conformity with 
GATT Article VIII or listed in an Annex to the Protocol.] 
80. The representative of China noted that the majority of products were free of export duty, 
although 36 items, including tungsten ore, ferrosilicon  and some aluminum products were subject to WT/ACC/SPEC/CHN/1/Rev.2 
Page 46  
 
export duties. He noted that the duty-paying valu e of exported goods was the F.O.B. price of the 
goods deducting the export tariff.  
2. Export licensing 
81. The representative of China noted that China' s export licencing system was administered in 
accordance with the "Interim Procedures for the Export Licencing System". In 1992, there were 
143 categories of products subject to export licencing which accounted for 48.3% of the total value of 
the China's exports, but by 1999, the total number of  products subject to export licencing had been 
reduced to 58 categories and 73 items with an e xport value of US$ 18.5 b illion, taking up only 9.5% 
of total exports. Export licences for these products we re issued according to the stipulated commodity 
scope respectively by the Administrative Bur eau of Quota and License (ABQL), the Special 
Commissioner Offices (SCO) located in 16 provinces and the Commissions of Foreign Economic 
Relations and Trade (COFTEC) of various provin ces, autonomous regions, municipalities directly 
under the central government and those with independe nt budgetary status.  The main criteria used in 
determining whether a products was subject to expo rt licencing were set down in the Foreign Trade 
Law:  (1) to maintain national security or public in terests;  (2) shortage of supply in the domestic 
market or for the effective protection of exhaustib le domestic resources;  (3) limited market capacity 
of importing countries or regions;  or (4) obliga tions stipulated by international treaties.  
82. He further noted that an application for an  export licence had to be submitted to the licence 
issuing institutions authorized by MOFTEC, togeth er with documents approving the export by the 
competent departments, and other relevant material s (such as the Export Qualification Certificate for 
the enterprises, export contract and so on). The pr ocedures were the same for all export destinations. 
A decision on the request for an export licence normally took three working days. Licences were valid 
for six months and could be extended once.  FIEs  engaged in exporting products not produced by 
themselves were required to obtain export licences if  the products to be exported were subject to the 
licensing requirement.  If the products were not s ubject to licensing, customs clearance would be 
given after examination by the Customs on the basis of export contracts and ot her relevant documents. 
83. Some members of the Working Party note d that certain export licensing requirements 
appeared to operate as restrictive non-tariff meas ures.  In response, the representative of China 
indicated that the number of products subject to  export licensing was being reduced and that China 
would abide by its WTO obligations concerning expor t formalities and licensing.  In response to this 
statement, members of the Working Party asked  that China undertake such a commitment.  
[xx. China applies its export license system to cer tain agricultural products , resource products and 
chemicals, the underlying purposes of which are to en sure the reasonable and orderly exploitation of  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 47 
 
 
  mineral resources, protect the biological environment and implement its obligations under 
international conventions as well as for statistical purpose.] 
[xx. Some members of the Working Party noted th at China’s export licensing system was conflicting 
with WTO rules, even in those case s where licenses were withheld due to a shortage of supply in the 
domestic market. China confirmed that the number of  products subject to export licensing would be 
gradually and progressively reduced, in such a mann er that by 1.1.200.., such licensing requirements 
would no longer apply on any produc ts, unless justified by WTO provisions.] 
[xx.   Some Members expressed concern that China’s export licensing rules had been used to 
restrict exports in a manner inconsistent with WT O requirements.  They noted that Article XI of 
GATT 1994 applied to both import and export rest rictions and the same need for certainty, 
predictability,  transparency and minimizing the bur den on trade applied with respect to the grant of 
export licenses as pertained to import licenses.   
xx.   The representative of China stated that upon accession, China would apply the same 
procedures to the grant of export licenses as it app lied to automatic and non-automatic import licenses 
depending on the WTO justification for such export license.  The Working Party took note of this 
commitment] 
3. Export restrictions 
84. The representative of China noted that Chin a prohibited export of na rcotic drugs, poisons, 
materials containing State secrets, precious and rare animals and plants. 
4. Export subsidies 
85. Some members of the Working Party noted c oncerns about the extent of China's use of 
prohibited export subsidies.  In response, the repr esentative of China stated that all direct export 
subsidies on industrial and agricultural goods had be en eliminated.  Some members of the Working 
Party stated that China should enter a commitment to  eliminate all export subsidies by a date to be 
agreed.  Those  members of the Working Party stat ed that China should also provide a notification 
pursuant to Article 25 of the WTO Agreement on Subsidies and Countervailing Measures ("SCM 
Agreement") detailing all subsidies within the mean ing of Article 3 of that Agreement.  [Those 
members also noted that the existing practice of granting preferential treatment to imported products 
and to joint venture production enterprises in Ch ina's special economic areas conditional upon export 
or re-export of products manufactured or subject to  additional processing in such areas, appeared to WT/ACC/SPEC/CHN/1/Rev.2 
Page 48  
 
meet the definition of prohibited subsidies pursuan t to Article 3 of the Agreement on Subsidies and 
Countervailing Measures.  Those members also stated  that China should phase out all subsidies falling 
within the scope of Article 3 of the SCM Agreemen t.  Those members noted that China had provided 
a list of subsidies and a timetable for their elimin ation in Annex 5 of the Protocol of Accession of 
China to the WTO.] 
[xx. China has confirmed that all of its industri al subsidies have been notified to the Working 
Party.] 
[xx. China confirmed that it would eliminate a ll export subsidies by accession, including fiscal or 
other financial measures referred to in Article 1 c ontingent upon export performance.  To this end, 
China would , by accession, cease to  maintain all pre-existing expor t subsidy programmes and, upon 
accession, make no further payments or disbursem ents, nor forego revenue or confer any other 
benefit, under such programmes. This commitmen t covers subsidies granted at all levels of 
government, including tax exemptions, reductions, de ferrals or forgiveness to enterprises, which are 
contingent, in law or in fact, upon an obligation to  export.  The Working Party took note of this 
commitment. 
xx. On the same basis, China would eliminat e, upon accession, all subsidies contingent upon the 
use of domestic over imported goods.  The Wo rking Party took note of this commitment.] 
C. INTERNAL POLICIES AFFECTING FOREIGN TRADE IN GOODS 
1. Taxes and Charges Levied on Imports and Exports  
xx. Members expressed particular concern about application of the value-added tax (VAT) and 
additional charges levied by sub-central governments on imports.  In some cases,  producers of domestic goods either did not pay the VAT or failed to  pass the charge along to customers.  The loss 
of revenue from this failure to pass along the VAT  often put such firms into an unprofitable position 
and loans or other measures woul d then be provided to address th e situation. Non-discriminatory 
application of the VAT and other internal taxes w as deemed essential.  Moreover, central-government 
discipline over the practices of sub-central authoriti es to ensure their conformity with the provisions 
of this Protocol and the WTO was essential. 
xx. The representative of China confirmed that from the entry into force of this Protocol China 
would ensure that its laws and re gulations relating to all fees, charges or taxes levied on such rights 
would be in full conformity with its WTO obligati ons, including Articles VIII, XI: I and III:2 and 4 of  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 49 
 
 
  the GATT 1994 and that it would also implement such laws and regulations in full conformity with 
these obligations. The Working Party took note of this commitment.] 
2. Industrial policy, including subsidies 
86. Some members of the Working Party noted th at the situation of differential treatment of 
minority autonomous regions and other areas of economic poverty within China was uncertain and 
could raise problems in relation to the requirements of the Agreement on Subsidies and 
Countervailing Measures.  In response, the representa tive of China stated that the central government 
was required by the Constitution to provide assistan ce to those disadvantaged areas.  Some members 
of the Working Party stated that China should also provide a notification detailing all subsidies within 
the meaning of Article 1 of the SCM Agreement.  
[xx. Members expressed concern about certain  provisions  under Article 27 of the SCM 
Agreement with regard to certain actionable and c ountervailable subsidies.  It was considered that 
[some of] the exemptions provided for under Article  27 would not be appropriate, given the special 
situation which prevails in China. Members point ed to the many manufacturers that are still either 
owned or controlled by the Government, and th at benefit from state support notwithstanding the 
substantial reforms that are underway.  Furthermor e, it was difficult to ascertain the conditions under 
which publicly-owned banks provide finance, as well  as the extent to which state-owned enterprises 
provide goods and services on terms not normally availa ble in a market economy. As a result of these 
uncertain factors, including the conditions of pricing of certain important inputs and the ability to 
price all such inputs and goods or services transp arently and according to market conditions, the 
potential level of actionable subsidies in China could be significant across sectors, and members 
expressed concern over the possible trade distorting and adverse effects this might have. Therefore, members concluded that actionable and countervailabl e subsidies granted by China should be subject 
to available remedies under the SCM Agreement upon accession. 
xx. In particular, members were concerned that China would not invoke the provisions of Articles 
27.8 and 27.9, since this would severly restrict th e scope for dispute settlement action against adverse 
effects caused by actionable subsidies granted by China, notably by removing any remedy for 
subsidies which displace or impede the exports of  another Member in a third country market. The 
Chinese delegate confirmed that the above Articles would not be invoked.  
xx. Members were concerned that, given the price sensitivity of a number of commodities 
exported by China and the ability of a relatively sma ll volume of imports of such products to depress 
prices in the importing country, China should not be nefit from the higher de-minimis thresholds for WT/ACC/SPEC/CHN/1/Rev.2 
Page 50  
 
countervailing duty investigations in Article 27.10.  The Chinese delegate ag reed that China would 
not seek to invoke the application of Article 27.10 in such investigations. 
xx. Members, referring to the special situation with regard to actionable subsidies in China 
described above, were concerned that China should not invoke the provisions of Article 27.11 in 
countervailing duty investigations.  China was not an  Annex VII country, and in addition, a period of 
time would be required after accession before memb ers could be satisfied that China had ceased to 
grant export subsidies in all their forms (including those granted by sub-national levels of government 
and those granted on an ad-hoc basis).  The Chin ese delegate confirmed that China would not make 
any notifications under Article 27.11. 
xx. Members confirmed their support for privatiza tion in China but some considered that the 
types of subsidy described in Article 27.13 had, in th e context of the special situation with regard to 
actionable subsidies prevailing in China, potential to  cause serious adverse effects to other members.  
It was therefore considered that these subsidies s hould not be exempted from Part III disciplines, even 
if granted within and directly linked to a priva tization programme. These Chinese delegate confirmed 
that China would not make any notifications under Article 27.13. 
xx. Members were concerned that the scope of subsidization in China should be adequately 
defined.  In this regard, it was concluded that all activities of state-owned enterprises (including 
banks) which involve a financia l contribution (e.g. provision of goods and services, purchases of 
goods, foregiveness of debt, provision of loans and/ or guarantees) would fall within the scope of 
Article 1.1(a) of the SCM Agreement, since such  enterprises are part of or controlled by the 
Government.  The Chinese delega te confirmed this conclusion.  
xx. Members took note of China’s updated subsid y notification of 31 May 2000, which provided 
information concerning subsidies granted in 1998.  Members did not, however,  consider that this 
notification covered all specific subsidies granted w ithin China’s territory, and it did not contain the 
information required by Article 25 of th e SCM Agreement and Document G/SCM/6. 
xx. Members noted that China had granted, on a discr etionary basis, ad-hoc investment subsidies, 
which included free or preferential provision of  goods and services and tax benefits (e.g. tax 
exemptions, deferral, reductions, fo regiveness). Such subsidies, whet her granted at national or sub-
national level, should be notified.   
xx. Members also noted that the notification di d not cover the main subsidies granted through 
state-owned banks, some of which were only availa ble to exporting firms, nor did it capture all sub-
national or tax subsidies.  It also did not cover all subsidies granted in Special Economic Zones, in  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 51 
 
 
  particular those contingent upon export obligations .  There was also no mention of subsidies to 
compensate for currency changes.  Other specific subsidies were not reported. 
xx. The Chinese delegate agreed that the notif ication was inadequate; China would make the 
necessary improvements to the notification by the time of accession.] 
[xx. In the context of discussions on the government ’s Industrial Policy for the Automotive Sector, 
the representative of China confir med that this Policy will be amended to ensure compatibility with 
WTO rules and principles.  
xx. The representative added that amendments w ould be made to ensure that all measures 
applicable to motor vehicle producers restricting th e categories, types or models of vehicle permitted 
for production will gradually be lifte d. Such measures will be comp letely removed two years after 
accession, thus ensuring that motor vehicle producers will be free to choose the categories, types and 
models they produce. However, it is understood that  category authorisations by the government may 
continue to distinguish between trucks and buses,  light commercial vehicles, and passenger cars 
(including multi-purpose vehicles and sport utility vehicles). 
xx. China also agreed to raise the limit within which investments in motor vehicle manufacturing 
can be approved at provincial gove rnment level only, from the curre nt level of $30 million, to $60 
million one year after accession, $90 million 2 year s after accession, and $150 million 4 years after 
accession. 
xx. With respect to the manufacture of motor vehi cle engines, China agreed to remove the 50% 
foreign equity limit for joint ventures upon accession.] 
3. Technical Barriers to Trade 
[87. In response to requests for informati on from members of the Working Party, the 
representative of China confirmed that internal me chanisms existed in China (e.g. policy guidelines, 
inter-agency committees) to inform and consult w ith, on an ongoing basis, government agencies and 
ministries (at national and sub-national levels), and private sector interests, on the rights and 
obligations under the GATT 1994 and the TBT Agreem ent 1994.  In response to further requests for 
information concerning the opportunity for public  consultation and comment on proposed standards 
and technical regulations, the representative of Chin a noted that China had already established such a 
mechanism.  Currently, China provided a 45 day peri od to allow for comments on proposed standards, 
technical regulations, and conformity assessment pro cedures.  If within that 45 day period a request WT/ACC/SPEC/CHN/1/Rev.2 
Page 52  
 
for extension of the time-limit was received from a WTO Member, the period was extended to 
60 days.  In addition, provision was also made a furt her extension of the time-limit beyond 60 days if 
requested by another Party to the TBT Agreement.] 
88. Members of the Working Party noted that a list of products subject to statutory inspection 
upon importation into China, together with the app licable technical regulations and standards, the 
objectives which they fulfilled and their necessity to  fulfil those objectives was contained in Annex 7 
of China's Protocol of Accession.   
89. Some members of the Working Party stated that pursuant to the requirements of the TBT 
Agreement, China's standards, technical regulati ons and conformity assessment procedures should be 
based, to the maximum extent possible, on relevant international standards, where they existed except 
where use of different standards, technical regula tions and conformity assessment procedures could be 
justified to the TBT Committee, pursuant to Article 2.4 of the TBT Agreement, as necessary to fulfil 
legitimate objectives as defined in Article 2.2 of the TBT Agreement.  Those members also stated that 
any such standards, technical regulations a nd conformity assessment procedures should be 
administered so as not to create unnecessary barriers to trade.   
90. [Those members also stat ed that Government inspection agencies should not apply 
compulsory standards to imported products which re lated solely to fulfilling unspecified criteria of 
quality, quantity or weight, nor require statutory in spection of products solely because of the volume 
of such imports.]  Those members stated that China should publish complete commodity inspection 
criteria, whether formal or informal, in its official  journal.  In this connection those members noted 
that pursuant to Article 15.2 of the TBT Agreement,  China should provide a notification Statement on 
Implementation and Administration of the Agreement consistent with the relevant Decisions adopted 
by the Committee on Technical Barriers to Trad e of the Tokyo Round Agreement on Technical 
Barriers to Trade (TBT/16/Rev.7).   
91. [Some members stated that Government-m andated inspection agencies should not inspect 
imported products to assess compliance with the terms of commercial contracts.]  Those members noted that China could inspect imported products or  require conformity assessment when third-party 
testing or certification was not able to fulfil the legitimate objectives listed in the TBT Agreement.  
[They noted that once Mutual Recognition Agre ements were concluded between China and a 
particular  WTO Member, China should not require inspection nor retesting in respect of any product 
exported from that Member which had been tested or certified to meet relevant  international standards 
by a widely recognized conformity assessment body.]  Concerning foreign and joint-venture  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 53 
 
 
  commodity inspection agencies, members of the Work ing Party stated that China should not maintain 
requirements which had the effect of acting as barriers to their operation. 
[xx. The representative of China st ated that except those statutor y inspection listed in annex 7a 
and 7b, the Chinese Government, in accordance w ith legitimate objectives stipulated by TBT 
Agreement for protection of human, animal and plant health, national security, environmental 
protection, anti-deceptive behaviour and guara nteeing quality of exported goods, carries out 
administration in terms of technical regulations, standards and conformity assessment, to a series of 
subjects such as medicine (including pesticide, vet medicine and organic medicine), air plane, vessels 
and seaworthy installation, nuclear safety facilities, measuring instrument, pressuring vessels, pressuring tunnel and special equipment, fire extinguishing equipment, safety of telecom, wireless equipment and network, mining safety facilities, dangerous chemicals.] 
[92. Members of the Working Party also stated th at in order to be fully consistent with the 
requirements of the TBT Agreement and the GA TT 1994, China should eliminate the two-tiered 
system used for imports and domestic products, and otherwise consolidate the standards, technical 
regulations and conformity assessment procedures (e .g. testing, inspection, certification, quality 
system registration, laboratory accreditation) to ensu re that the same measures applied to domestic 
production were applied to imports and in the same way.] 
93. The representative of China stated that pursu ant to the provisions of the Agreement on TBT, 
China applied compulsory inspection and quarantine [to commodities as well as to animals, plants and 
their processed products] as required in the interest s of national security, life and health of human 
beings, animals and plants, environmental protection, as well as [to prevent] [prevention of] deceptive activities[, as well as to animals, plants and their pr ocessed products].  He also noted that most of 
China's standards were [the same as] [equal] or eq uivalent to the international standards, and that 
China implemented the same standards, technical  regulations and accreditation procedures of 
inspection and quarantine to both imported and dom estic goods. There was no discrimination against 
the imported goods, animals and plants and their processed products.  
94. The representative of China noted that Chin a had set up a TBT enquiry point [of inspection 
and quarantine] which had been notified to the WTO's TBT Committee.  Laws, regulations, rules, 
standards and procedures on entry-exit inspection a nd quarantine had been published in publications 
such as the "MOFTEC Gazette".  Information could al so be gathered from the [State Administration 
of Entry-Exit Inspection and Quarantine,] [MOFTEC] or from China's TBT enquiry point.  WT/ACC/SPEC/CHN/1/Rev.2 
Page 54  
 
[xx. For the information of WTO Members, a co mpilation of technical re gulations and relevant 
standards in force in China was provided in Annex 7 to China’s Protocol of Accession.  The Members 
of the Working Party agreed that Annex 7 does not pr ejudge the legal status, nature or effects of the 
notified standards and technical regul ations under the WTO Agreement.] 
95. Some members of the Working Party expressed concerns about the complexity and lack of 
consistency of China's standards and inspection regi me.  In addition, members of the Working Party 
noted that imported and domestic products were not  inspected by the same governmental entities and 
that this situation could result in less favourable tr eatment for imports.  Some members also criticized 
mandatory government inspection requirements for co mpliance with terms of commercial contracts.  
In response to those concerns, the representative of China stated that [national treatment for imports 
depends on whether same standards, technical regulations and conformity assessment procedures 
applied to domestic products are also applied to  imports. China shall apply full national treatment 
with respect to domestic products and import products . And] China intended to comply fully with its 
WTO obligations concerning its standards, t echnical regulations and inspection regime.  
[Notwithstanding the fact that many of the featur es of China's economy were at present those of a 
developing country economy, China was prepared  to undertake a commitment not to apply the 
provisions in Article 12 of the TBT Agreement.] 
[xx. The representative of China also indicated th at China would ensure the transparency of its 
standard and certification systems by publishing a ll relevant laws and regulations, including the 
regulations concerning domestic products,  which are not currently published. 
xx. Some members of the Working Party raised specific concerns regarding the standards and 
certification systems in China, including such matters  as (a) registration of initial imports of chemical 
products, (b) procedures for the Chinese Commodity Inspection Bureau (CCIB) safety mark and the 
“Great Wall” mark, (c) standards and certification for automobiles, and (d) safety and quality license 
system for boilers and pressure vessels. In respon se to those concerns, the representative of China 
stated that China intended to implement th e following measures. These measures would be 
implemented prior to China’s accession to the WTO, unless otherwise indicated. 
(a) Registration of Initial Imports of Chemical Products 
- Enact and implement, within two years after its accession to the WTO, a new law and 
relevant regulations regarding assessment and c ontrol of chemicals for the protection of the 
environment, in which complete national treat ment and full consistency with international 
practices will be ensured.  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 55 
 
 
  - Ensure that chemicals listed in the “inventor y chemicals” annexed to the above new law and 
its regulations will be exempted from a regist ration obligation and that a unified assessment 
procedure will be established for domestic and imported products unde r the new law and its 
regulations. 
(b) CCIB Safety Mark and the “Great Wall” Mark 
- Promulgate implementation regul ations on the harmonization of the CCIB safety mark and 
the “Great Wall” mark, by introducing into these regulations the principle of “a single 
application, a single inspection and a single fee payment” for obtaining both marks at the same time. This principle will be applied before the promulgation of the regulations. 
- Accept testing reports for products subject to th e CB Scheme to which China is a party, and 
simplify the procedures for obtaining the CCIB safety mark and/or the “Great Wall” mark. 
- Shorten the time period needed for the importe rs to obtain both marks regarding the same 
products, to around 3 months in principle. 
(c) Standards and Certification for Automobiles 
- Unify its laws, regulations and standards app lied to domestic and imported automobiles. 
- Formulate, publish and implement laws and regulations, standards and implementation 
regulations to establish a transparent system unde r which all the laws and regulations will be 
applied so as to accord imported products treat ment no less favourable than that accorded to 
like products of national origin. 
(d) Safety and Quality License System for Boilers and Pressure Vessels 
- Accord imported products treatment no less favour able than that accorded to products of 
national origin, including fees imposed for conformity assessment and the effective period of factory certification. 
- Adopt international standards to the greatest ex tent possible, and exempt imported products 
from inspection where like domestic products are not subject to such inspection. 
Simplify the inspection methods and procedures for factories and products certified by inspection 
agencies having bilateral mutu al recognition arrangement.] WT/ACC/SPEC/CHN/1/Rev.2 
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96. Further to China's application of the provisions of the GATT 1994 and the TBT 
Agreement, China confirmed that:  
(a)  internal mechanisms exist (e.g. policy gu idelines, inter-agency committees) to inform 
and consult with, on an ongoing basis, gov ernment agencies and ministries (at national 
and sub-national levels), and private sector interests, of the rights and obligations under 
the GATT 1994 and the TBT Agreement 1994;  and  
(b)  the recommended time to allow for co mments on proposed standards, technical 
regulations, and conformity assessment procedures  of sixty days (or forty-five days if no 
comments or request for extension of the time-limit have been received from other WTO Members within that time) is observed, and provision is made for giving due consideration to a time-limit beyond sixty days if requested by another Party to the TBT 
Agreement 1994.  
The Working Party took note of these commitments.   
4. Sanitary and phytosanitary measures 
97. Some members of the Working Party considered that China should provide a notification of 
all laws and regulations relating to its sanitary and phytosanitary measures, including all products 
covered by such measures.  In addition, some memb ers of the Working Party raised specific concerns 
in relation to the use of quarantine procedures as non- tariff barriers.  In respon se, the representative of 
China stated that China's quarantin e procedures were not used as non-tariff [measures] [barriers].  The 
Working Party took note of China's notification on SPS in document WT/ACC/CHN/[14] [21] and 
Corr.1. 
98. The representative of China stated that pursu ant to the provisions of the Agreement on SPS, 
China applied compulsory inspection and quarantine as required in the interests of national security, 
life and health of human beings, animals and plan ts, environmental protection, as well as to prevent 
deceptive activities[, as well as to anim als, plants and their processed products].  He also noted that 
most of China's standards were [the same as] [equal]  or equivalent to the international standards, and 
that China implemented the same standards, t echnical regulations and accreditation procedures of 
inspection and quarantine to both imported and dom estic goods. There was no discrimination against 
the imported goods, animals and plants and their processed products.  
99. The representative of China noted that Chin a had set up a SPS enquiry points of inspection 
and quarantine which had been notified to the WTO's SPS Committee.  Laws, regulations, rules,  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 57 
 
 
  standards and procedures on entry-exit inspection a nd quarantine had been published in publications 
such as the "MOFTEC Gazette".  Information could al so be gathered from the [State Administration 
of Entry-Exit Inspection and Quarantine] [MOFTEC], or from China's SPS enquiry point.  
[xx. The notification of laws, regulations and ot her measures relating to sanitary and phytosanitary 
measures referred to in China’s Protocol of Accession was provided in document  WT/ACC/CHN/__. 
Members of the Working Party agreed that this notif ication does not prejudge the legal status, nature 
or effects of the notified laws, regulations  and other measures under the WTO Agreement.] 
5. Trade-Related Investment Measures  
[100. Some members of the Working Party requested  that China enter a commitment to comply in 
full with the requirements of the Agreement on Trade-related Investment Measures (TRIMs 
Agreement) from the date of accession to the WTO.  In response, the repres entative of China stated 
that [notwithstanding the fact that many of the features of China's economy were at present those of a 
developing country economy,] China was prepared  to undertake a commitment to notify [and 
eliminate] by the date of entry into force of the WTO Agreement all trade-related investment measures inconsistent with the provisions of th e TRIMs Agreement [and gradually eliminate those 
measures within the time-limit as required by the TRIMs Agreement].  [Such measures included, but 
were not limited to:  requirements that foreign fi rms balance their foreign exchange for importation 
with foreign exchange receipts;  requirements th at firms meet specified export target levels in 
pursuance of such foreign exchange balancing requi rements, including by contract;  requirements for 
minimum export levels;  local content requirements;   and restrictions on the sale of "non-resultant 
products", i.e., products not produced in China.]  [He further stated that, after the date of expiration of 
that time limit, the Government of China would not  impose any measures that are inconsistent with 
the TRIMs Agreement through domestic laws or regu lations, meanwhile, the principle of freedom of 
contract enjoyed by enterprises and individuals must  be enforced. He emphasized that the universal 
principle of freedom of contract must be strictly  respected and should neve r be jeopardized by any 
international agreement, eith er bilateral or multilateral.] 
[xx. Upon accession, China shall comply with the Agreement on Trade-related Investment 
Measures.  China shall take the necessary legisl ative measures to eliminate foreign-exchange 
balancing and trade balancing requirements, lo cal content requirements and export performance 
requirements.  Chinese authorities – whether national or sub-national - shall not enforce the terms of 
contracts containing such requirements.   WT/ACC/SPEC/CHN/1/Rev.2 
Page 58  
 
xx. The allocation of permission or rights for im portation and investment shall not be conditional 
upon performance requirements set by national or s ub-national authorities, or subject to secondary 
conditions covering, for example, the conduct of research, the provision of offsets or other forms of 
industrial compensation including specified types or volumes of business opportunities, the use of local inputs or the transfer of technology.  Permi ssion to invest, import licenses, quotas and tariff rate 
quotas shall be granted without regard for the ex istence of equivalent Chinese domestic suppliers. 
xx. In accordance with Article 3.1 (a) of th e WTO Agreement on Subsidies and Countervailing 
Measures China shall eliminate all export subsidies by accession, including fiscal or other financial 
measures referred to in Article 1 contingent upon export performance.] 
6. State-trading entities 
101. Some members of the Working Party stated  that the activities of China's state-trading 
enterprises were not sufficiently transparent.  So me members also raised concerns regarding the 
conformity of the activities of those enterprises w ith the requirements of Article XVII of the GATT 
1994, and the Understanding on the Interpre tation of Article XVII of the GATT 1994.  
102. Those members also stated that China shoul d ensure that the import purchasing practices and 
procedures of state-trading enterprises were fu lly transparent, and in compliance with the 
requirements of the WTO Agreement. China should al so refrain from taking any measure to influence 
or direct state-trading enterprises as to the quantity, value, or country of origin of goods purchased or 
sold, except in accordance w ith the requirements of the WTO Agreement.  Those members also stated 
that [in accordance with] [as part of Chin a's notification under] the GATT 1994 and the 
Understanding on the Interpretation of Article  XVII of the GATT 1994, China should notify 
information on the pricing mechanisms of its stat e-trading enterprises for exported goods, including 
domestic procurement prices, contract terms fo r delivery and financing terms and conditions. 
103. In response, the representative of China stat ed that its state-trading enterprises had full 
management autonomy and responsibility for their ow n profits and losses.  However, some members 
of the Working Party again stated that China shoul d undertake a commitment to ensure that all state-
trading enterprises should comply with the requireme nts of the WTO Agreement.  The representative 
of China noted that a list of products subject to state-trading had been provided in Annex 2a of 
China's Protocol of Accession. 
[xx.  Members of the Working Party took note of the specific arrangements that would apply for 
fertilisers and crude and processed oil. A key feat ure of those arrangements related to the annual 
allocation of import quantities. The differences in th e regimes that would apply to those products were  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 59 
 
 
  noted, in particular in regard of the obligation on stat e entreprises trading in fe rtilisers to carry over to 
the next year any unused import quantities.  
xx. Members requested assuran ces that, for oil products, quantities reserved for non-state traders 
would be allocated in such a manner that they woul d be fully utilised. In this respect, China confirmed 
that imports allocated to non-state traders of crude  and processed oil, as specified in Annex …, would 
be carried over to the next year if they were not fully utilised. In addition, China agreed that it would 
publish, on a quarterly basis, the requests for imports that had been made by non-state traders, as well 
as the licenses granted, and to supply information relevant to such traders upon request. The Working 
Party took note of these commitments.]  
[xx. Members expressed concern that the activities of China's state trading enterprises were not 
sufficiently transparent and were not in accordance with WTO obligati ons.  China indicated, however,  
that its state trading enterprises have full mana gement autonomy and responsibility for their own 
profits and losses and that it had undertaken br oad and significant commitments to improve the 
transparency of state trading enterprises’ operati on and the measures relating to such operation.  
xx. Members noted that prior to accession, ente rprises in China were permitted to import goods 
for production purposes, including those goods included in Annex 2a. China confirmed that, 
notwithstanding section 5 paragraph 1 of the Protocol,  non-state trading enterprises, including private 
traders, will still be permitted to import for producti on purposes goods which continue to be subject to 
state trading under the Protocol and WTO and that such enterprises would have direct access to end-
users of these goods including processors.  The Working Party took note of these commitments. 
xx. Members expressed their concerns about suppli es of raw materials in the textiles sector and 
particularly concerning supplies of silk, in the li ght of China’s position as the major world supplier of 
silk, currently subject to state trading rights concerning exports. 
xx. In this regard, the representative of China c onfirmed that China will progressively abolish the 
system of state trading in respect of silk by measures increasing and extending trading rights with the 
result that China will remove completely the silk products set out in numbers 10 and 11 from Annex 
2a-2 to China’s Protocol of Accession (being the list  of products subject to state trading on exports) 
and grant the right to trade in such products to a ll individuals and enterprises no later than 1 January 
2005.  Pending the implementation of this right, China undertook not to introduce any changes of a 
more restrictive nature to the existing structures in  place for the supply of s ilk.  The representative of 
China further confirmed that access to supplies of ra w materials in the textiles sector will remain at 
conditions no less favorable than for domestic user s and gave his assurance that access to supplies of WT/ACC/SPEC/CHN/1/Rev.2 
Page 60  
 
raw materials as enjoyed under exis ting arrangements would not be adversely affected following 
China’s accession to the WTO.  The Worki ng Party took note of these commitments. 
xx. Members raised concerns regarding the cu rrent operation of China’s tariff quota (TRQ) 
system for bulk agricultural commodities and the prac tices of state trading enterprises in relation to 
importing such products.  These concerns included th e current lack of transparent regulations for 
administering TRQs; failure to establish and publis h annual TRQ quantities; trade-restrictive and non-
competitive practices of state-trading enterpri ses; and general uncertain ty, inconsistency and 
discrimination in trade of bulk commodities.  Me mbers requested that China reduce tariffs and 
regulate access for bulk commodities by using TRQs with low  in-quota duties.   
xx. The representative of China confirmed that China would adopt TRQs for certain goods and 
would ensure that these TRQs are administered on a transparent, predictable, and non-discriminatory 
basis using clearly specified time frames, admini strative procedures and requirements that would 
provide effective import opportunities and promote filling each TRQ, including the grant of trading rights and import licenses to non-state trading entiti es to import quota allocations permitted to be 
imported by such entities. China confirmed that for the goods listed in Annex 2 that are subject to a 
tariff quota, China would apply the provisions of its market access schedule relating to TRQ 
administration and related commitments in the Protocol , including those relating to the right to trade.  
The Working Party took no te of these commitments. 
xx.  The representative of China also confirmed that China  would eliminate state trading of 
cottonseed oil, sunflower seed oil, and corn oil upon entry into for ce of the Protocol.  The Working 
Party took note of these commitments. 
xx. Members noted that domestic prices for most  agricultural commodities in China are higher 
than world prices, and this differential allows Chin a’s state trading enterprises to import at low prices 
and then mark up the price when selling the pr oduct to wholesalers and end users.  Members 
expressed concern that this practice could become  more widespread when access opportunities are 
created under TRQs.  Members were pa rticularly concerned that mark- ups could be used to reduce the 
competitiveness of imported products and limit the range  of qualities and grades available to end users 
in China.  China stated that currently state trading enterprises do not mark up imported products, 
instead they only charge a nominal transaction fee.  Consequently, China claimed that its practice is 
consistent with WTO obligations, did not result in any trade-distorting effect, and that limits exist 
under China’s law on the fees charged by state trading enterprises. 
xx. The representative of China stated that furthe r to the requirements of Article II.4 of the GATT 
1994 and Article 4.2 of the Agreem ent on Agriculture, China shall en sure that no price increase in  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 61 
 
 
  respect to imports, in particular by state trading enterprises, will result in protection beyond that 
provided by the tariff in its schedule.  The Working Party took note of this commitment.] 
7. Free zones, special economic areas 
104. Members of the Working Party noted that there was insufficient information available 
concerning special economic areas, in particular their names, geographic boundaries, and relevant 
laws, regulations and other measures relating thereto.   In response, the representative of China stated 
that since 1979 China had established a number of zones and areas where more open policies were 
applied.  They included five Special Economic Zon es (SEZs), 14 coastal open cities, six open cities 
along the Yangtze River, 21 provincial capital citie s and 13 inland boundary cities.  Those areas 
enjoyed greater flexibility in utilizing foreign capita l, introducing foreign t echnology and conducting 
economic cooperation overseas.  At present, foreign investors were entitled to the certain preferential 
treatment.  
105. He further stated that FIEs located in SEZs or the Economic and Technical Development 
Zones of open coastal cities were entitled to a cor porate income tax rate of 15% (the normal income 
tax was 33%).  Profits remitted abroad by foreign investors were exempted from income tax.  The 
preferential income tax rate of 15% was applicab le to technology-intensive or knowledge-intensive 
items or projects with foreign investment of over US$30 million, as well as enterprises that operated 
in the fields of energy, transport and port construction.   
106. The representative of China noted that throughout  the customs territory of China, a socialist 
market economy system was applied.  The sole excep tion to this general principle concerned all FIEs 
across the country and state-owned firms within SEZ s, which operated under a market mechanism. In 
1999, the foreign trade volume of SEZs accounted fo r nearly one fifth of the nation's total. The 
national laws and regulations on ta xation were applicable to SEZs in a uniform manner. Laws and 
regulations on patent, copyright, trade marks and bankruptcy applied to state-owned enterprises in 
SEZs, and the SEZs were required to conform with a ll other laws and regulat ions applied throughout 
the customs territory of China. 
107. In response to further requests for informati on, the representative of China indicated that, 
pursuant to governmental policy, the importance of the special trade regimes continued to expand and 
the differences between these regimes and those of ot her parts of its customs territory continued to 
narrow. He noted, however, that the establishm ent of SEZs and other special economic areas was 
required to be approved by the State Council, a nd there was no current plan to establish any new 
special economic zones.  China noted that the long- term objective was to unify the application of its WT/ACC/SPEC/CHN/1/Rev.2 
Page 62  
 
trade regime throughout the customs territory on pr inciples of a market-oriented economy.  Members 
of the Working Party expressed concern that produc ts introduced from these special economic areas 
into other parts of China's customs territory should be subject to the same treatment in the application 
of all taxes, import restrictions and customs and tari ff charges as that normally applied to imports into 
these other parts of the customs territory.  The representative of China stated that China would 
undertake to ensure such non-discriminatory treatment.  
108. Some members also raised concerns about th e differential treatment within areas of minority 
autonomous regions and other areas of economic pove rty.  In response, the representative of China 
stated that China had a clear commitment to unifor m administration of trade regime within each such 
area and was [also] determined to prevent smuggling. 
109. Some members of the Working Party requested  that China take steps to ensure that all 
products imported into the customs territory of China from special economic areas should be subject 
to the same normal customs duties and charges as  any other product imported into the customs 
territory of China.  In particular, those memb ers requested that China undertake a commitment to 
apply all taxes, charges and measures affecting impor ts, including import restrictions and customs and 
tariff charges, that were normally applied to imports into the other parts of Ch ina's customs territory to 
all imported products, including physically incorporated components, imported into China's customs territory from the special economic areas. 
110. China confirmed that it would strengthen the uniform enforcement of taxes, tariffs and 
non-tariff measures on trade between its special  economic areas and the other parts of China's 
customs territory.  China further confirmed that statistics on trade between China's special economic areas and the other parts of its custom s territory would be maintained and improved, 
and would be notified to the WTO on a regular basis.  The Working Party took note of these commitments.  
111. Some members of the Working Party requested  that China notify to the WTO Secretariat all 
the relevant laws, regulations a nd other measures relating to its sp ecial economic areas or zones.  
They asked that the notification list and identify all those areas or zones.  Those members also 
requested that China notify the WTO Secretariat pr omptly, but in any case within 60 days, of any 
additions or modifications to its special economic areas, including no tification of the laws, regulations 
and other measures relating thereto.   
112. China confirmed that it would provide information in its notifications describing how 
the special trade, tariff, and tax regulations applied are limited to the designated special  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 63 
 
 
  economic areas, including information concerning their enforcement.  The Working Party took 
note of this commitment. 
113. Some members of the Working Party also requested that any preferential arrangements 
provided for enterprises located w ithin the special export areas should be applied on the basis of non-
discrimination.  
8. Government procurement 
[xx. In order to promote China's government procurement, the Ministry of Finance promulgated 
the Interim Regulations on Government Procurem ent in April 1998. The Interim Regulations is 
stipulated in line with the spirit of the Agreem ent on Government Procurement of the WTO and on 
the basis of the relevant provisions of the Un ited Nations Model Law on Procurement of Goods, 
Construction and Services while making reference to the laws and regulations of some WTO 
Members on government procurement. The policy a nd procedure regarding go vernment procurement 
provided for therein are consistent with the interna tional conventions. China sticks to the fundamental 
principles of being open, fair, equitable, efficient and in the public interest when carrying out government procurement. At present, China is formulating the Government Procurement Law.] 
[xx. Some Members stated that China shoul d become a Signatory to the Agreement on 
Government Procurement (GPA) and that prior to  its accession to the GPA, China should conduct all 
government procurement within the meaning of Chin a’s protocol of accession, in a transparent and 
non-discriminatory manner.  Members noted that China’s public entities engaged exclusively in 
commercial activities would not be conducting govern ment procurement and t hus laws, regulations 
and other measures regulating these entities procurem ent practices would be fully subject to WTO 
requirements. 
xx The representative of China stated that upon accession to the WTO, China would seek to 
become an observer to the GPA and would initiate negotiations for membership in the Agreement by 
tabling an Appendix 1 offer within one year of accession with the aim of becoming a signatory of the 
GPA by [200x].  The Working Party took note of these commitments.   
xx. Until such time as China becomes a signatory  to the GPA, all government entities at the 
central and sub-central level would conduct their pr ocurement in a transparent manner and  provide all 
foreign suppliers with equal opportunity  to participate in that procurement pursuant to the  principle of 
most-favoured nation treatment.  Such procuremen ts would be subject onl y to laws, regulations, WT/ACC/SPEC/CHN/1/Rev.2 
Page 64  
 
judicial decisions, administrative rulings of genera l application, and proce dures (including standard 
contract clauses) which have been publis hed and made available to the public.] 
9. Transit 
[xx. The current regulation of transit in China is  the Regulations of the Customs of the People's 
Republic of China on the Supervision and Administra tion of Transit Goods whic h is consistent with 
Article V of GATT 1994.] 
10. Agricultural policies 
[delete this paragraph ][114. Some members raised concerns in relation to China's intention to 
maintain certain quantitative import restrictions  and restrictive licensing requirements in the 
agricultural sector. China indicated that it was willing to convert most quantitative restrictions on agricultural products to their tariff-based equiva lents in conformity with the Agreement on 
Agriculture, but that for a very few products it w as necessary to maintain restrictive licensing over the 
longer term.]   
115. Some members requested further informati on concerning administrative guidance provided at 
the national and sub-national leve l which could have the effect of influencing the quantity and 
composition of agricultural imports.  Those member s requested that China undertake an appropriate 
commitment to eliminate these practices.  
116. China confirmed that it would not maintain, resort to or revert to guidance plans or 
administrative guidance at the national or sub-national level that regulate the quantity of imports, import controls, import substitution  practices, or other non-tariff trade measures 
maintained through state trading enterprises at  the national or sub-national level.  The 
Working Party took note of this commitment.  
117. Some members requested additional informati on about the use of fiscal transfers and other 
forms of domestic subsidies to government-ow ned and government-controlled entities in the 
agricultural sector.  Those members stated that Ch ina's notifications under the Agriculture and other 
Agreements and related commitments  for subsidies should include refe rence to such measures.  Those 
members also stated that the information notifie d should also detail export subsidies within the 
meaning of Article 9 of the Agreement on Agricu lture.  [In response, the representative of China 
noted that China continued to maintain expor t subsidies on certain agricultural products.]  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 65 
 
 
  118. Some members of the Working Party stated that China should undertake a commitment not to 
invoke the provisions in Articles 6:2, 6:4(b), 9: 4, 12:2 and 15, and Annex 5, Section B of the 
Agreement on Agriculture.   
119. China's commitments on agricultural tariffs, on domestic support and export subsidies for 
agricultural products are contained in the Sc hedule of Concessions and Commitments on Goods 
annexed to China's Draft Protocol of Accession to the WTO. 
[xx. Since  China is a country with vast agricultural b ase, as well as a country with vast population, 
agricultural security, food security in particular, is an issue of supreme importance. China will base its 
policies on domestic agricultural supply, especially  on balanced supply and demand of grains. 
Meanwhile, China will actively seek international resources as a necessar y supplement. With its deeds 
the Chinese government has provided its consistent support for the progressive liberalization of 
international trade in agriculture. As a matter of f act, this process has to be  sensitive to development 
realities of different members.] 
11. Trade in civil aircraft 
[xx. China's civil aircraft industry was establishe d in 1980's. With more than ten enterprises and 
over 10,000 employees, the industry has developed,  improved and rebuilt more than ten types of 
aircraft. The industry is characterised by backward production equipment, insufficient investment and 
low technical level. Besides, it has not formed economy of scale. Therefore, China is not in the 
position to commit to joining the Agreement on Tr ade in Civil Aircraft at present stage.] 
[xx. China confirmed that it would not impose any provisions of offsets or other forms of 
industrial compensation when purchasing civil airc raft, including specified types or volumes of 
business opportunities.] 
12. Textiles 
[xx. Some members of the Working Party propo sed and the representative of China accepted that 
the quantitative restrictions maintained by WTO Members on imports of tex tiles and apparel products 
originating in China that are in force on the date prior to the date of the accession of China to the 
WTO shall be notified to the Textiles Monitoring  Body (TMB) as being the base levels for the 
purpose of application of Articles 2 and 3 of the WTO Agreement on Textiles and Clothing. For such 
Members,  the phrase “day prior to the date of en try into force of the WTO Agreement,” contained in 
Article 2.1 of the Agreement on Textiles and Clothing shall be deemed to refer to the day prior to the WT/ACC/SPEC/CHN/1/Rev.2 
Page 66  
 
date of accession of China to the WTO.  To th ese base levels, the increase in growth rates provided 
for in Articles 2.13 and 2.14 of the Agreement on Textiles and Clothing shall be applied, as 
appropriate,  from the date of accession of China to the WTO.  The Working Party took note of these 
commitments.] 
[Move following paragraph to Protocol.] [xx. China agreed that the following provisions would apply to trade in textiles and clothing 
products until 31 December 2008 and be part of the terms and conditions for China's accession to the 
WTO: 
(a) In the event that a WTO Member maintainin g bilateral textile agreements with China and 
notifying restrictions on imports of textiles a nd apparel from China believes that imports of 
Chinese origin of textiles and apparel products  covered by the Agreement on Textiles and 
Clothing as of the date the WTO Agreement entered into force, are, due to market disruption, 
threatening to impede the orderly developmen t of trade in these products, such Member may 
request consultations with China with a view to  easing or avoiding such market disruption.  
The Member requesting consultations shall provide  China, at the time of the request, with a 
detailed factual statement of reasons and justifi cations for its request for consultations with 
current data which, in the view of the requesti ng Member, shows:  (1) the existence or threat 
of market disruptions;  and (2) the role of products of Chinese origin to that disruption; 
(b) Consultations will be held within 30 days of r eceipt of the request.  Every effort will be made 
to reach agreement on a mutually satisfactory solu tion within 90 days of the receipt of such 
request, unless extended by mutual agreement; 
(c) Upon receipt of the request for consultati ons, China agrees to hold its shipments to the 
requesting Member of textile or textile products in the category or categories subject to these 
consultations to a level no greater than 7.5 pe r cent (6 per cent for wool product categories) 
above the amount entered during the first 12 months of the most recent 14 months preceding 
the month in which the request for consultations was made; 
(d) If no mutually satisfactory solution is reached during the 90-day consultation period, 
consultations shall continue and the Member re questing consultations may continue the limits 
for textiles or textile products in the categor y or categories subject to these consultations; 
(e) The term of any restraint limit established under subparagraph (d) will be effective for the 
period beginning on the date of the request fo r consultations and ending on 31 December of  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 67 
 
 
  the year in which consultations were requested, or where three or fewer months remain in the 
year at the time of the request for consultations, for the period ending 12 months after the 
request for consultations; 
(f) No action taken under this provision shall remain in effect beyond one year, without 
reapplication, unless otherwise agreed. 
The Working Party took no te of these commitments.]  
13. Measures Maintained Against China  
120. The representative of China stated that WT O Members should eliminate all discriminatory 
non-tariff measures maintained against Chinese expor ts from the date of China's accession to the 
WTO.  [In response, some members of the Working Pa rty stated that, in their view, such measures did 
not need to be phased out until after China's foreign trade regime fully conformed to WTO 
obligations.]  [In respect to those Members mainta ining inconsistent discriminative measures against 
China, China reserves the right to protect its le gitimate interests against such discrimination in 
response.  The Working Party took note of this statement.] 
14. Transitional Safeguards  
121. Some members of the Working Party stated th at there was a need during a transitional period 
for a special safeguard mechanism to guard agains t imports from China in such increased quantities or 
under such conditions as to cause or threaten inju ry to domestic producers of like or directly 
competitive products.  The representative of China stat ed that China opposed the creation of such a 
discriminatory safeguards provision and considered  that the safeguards provisions of the GATT 
provided sufficient protection to the domestic i ndustries of WTO Members.  Some members of the 
Working Party considered that the provision of a tr ansitional safeguard would have to be carefully 
circumscribed to prevent abuse in its invocation. 
[xx. The Representative of China expressed the following position concerning the implementation 
of Product-Specific Safeguard:  
 (1) The Safeguard Agreement shall apply in  proceedings involving imports of Chinese 
origin except as otherwise provided in the Protocol. 
 WT/ACC/SPEC/CHN/1/Rev.2 
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 (2) The Dispute Settlement Understanding sha ll apply to consultations and the settlement 
of disputes arising under Section 19 of the Protocol. 
 
 (3) "Diversions of trade" mentioned in  paragraph 8 of Product-Specific Safeguard 
Section of the Protocol, exist only when th ere are clear evidences to show: (a) that 
imports of a product, like or directly competitive with a product produced by the 
domestic industry, are increasing significantly and absolutely as a result of the 
imposition of the Product-Specific Safeguard measure by other WTO Member against import from China; and (b) Such in creased imports are a significant cause of 
material injury to domestic industry. Th e affected WTO memb er shall consider 
objective factors including the volume of imports, the effects of imports on prices for 
the like or directly competitive products and the effect of such imports on the 
domestic industry producing like  or directly competitive pr oducts and any such other 
factors. 
 
 (4) If a measure taken as a result of diversions of trade remains in effect more than 
90 days, China has a right to suspend the application of substantially equivalent concessions or obligations under GATT 1994 to the Member applying the measure. 
 
The Working Party took note of China’s position.] 
 [xx. The representative of China expressed concer n with regard to the implementation of the 
Product-Specific Safeguard, and stated the following: 
1. The provisions of the Safeguard Agreem ent shall apply in proceedings involving 
imports of Chinese origin except as otherwise provided for in the Protocol. 
2. The provisions of the Dispute Settlement Understanding shall appl y to consultations 
and the settlement of disputes arisi ng under Article 19 of the Protocol. 
3. "Diversions of trade" mentioned in pa ragraph 8 of the Product-Specific Safeguard 
Section of the Protocol exists only wh en there is clear evidence to show: 
 (a) that imports of an artic le, like or directly compe titive with an article produced 
by the domestic industry, are increasing signi ficantly and absolutely as a result of the 
imposition of the Product-Specific Safeguard measure by other WTO Members against imports from China;  and  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 69 
 
 
   (b) such increased imports to be a signifi cant cause of material injury to domestic 
industry.  The affected WTO Member sha ll consider objective factors including the 
volume of imports, the effect of imports on prices for like or directly competitive 
articles and the effect of such imports on the domestic industry producing like or 
directly competitive products. 
4. If a measure taken as a result of diversions of trade remain s in effect more than two 
years, China has a right to  suspend the application of substantially equivalent 
concessions or obligations under GATT 1994 to the Member applying the measures. 
The Working Party took note of China's position.] 
15. Transitional Review Mechanism  
122. Members of the Working Party stated that following China's accession to the WTO it would 
be necessary to establish a transitional review mech anism constituted by a Working Party to monitor 
China's compliance with its Protocol of Accessi on and the WTO Agreement within the overall 
framework of China's progress in the reform of its economic and foreign trade regimes.  Members 
considered that the review should be held every two years (or more frequently upon request of China 
or another WTO Member), and that a major review should be held, e.g., every six years.  That 
Working Party would have regard to the outline cont ained in Annex 9 to the Protocol of Accession of 
China, and could make recommendations, as appropr iate, to China or to the other WTO Members 
concerned.  Those members stated that that Working Party should al so decide whether and to what 
extent the transitional provisions  provided in paragraphs … of th is Report should no longer apply.  
Those members noted that once the transitional prov isions ceased to apply, the Transitional Review 
Mechanism would be extinguished.   
123. The representative of China stated that hi s government did not in principle oppose such a 
review mechanism but considered that the review could be carried out as part of the regular Trade 
Policy Review to which China would be subject.   In response, members of the Working Party stated 
that they considered that the WTO Agreement' s Trade Policy Review Mechanism was not well 
adapted to the type of specific review of complian ce with conditions of accession that they considered 
to be necessary.  Some members stated that the Trade Policy Revi ew of China in the WTO should 
occur as regularly scheduled, notwithstanding the po ssible creation of a special transitional review 
mechanism for China. WT/ACC/SPEC/CHN/1/Rev.2 
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V. TRADE-RELATED INTELLECTUAL PROPERTY REGIME 
1. General [xx. Members of the Working Party expressed concer n that certain elements of China's laws were 
not yet fully compatible with the provisions of  the Agreement on Trade Related Aspects of 
Intellectual Property Rights. This related, in partic ular, to provisions in the fields of copyright and 
neighbouring rights, trademarks, pa tents, geographical indications a nd layout-designs of integrated 
circuits, and to enforcement of intellectual property rights. Members also expressed concern that there 
was a continued need for additional enforc ement efforts by the Chinese Government. 
xx. The representative of China confirmed that China will apply the provisions of the TRIPS 
Agreement upon accession. To this end, China agreed  to amend existing legislation and, where 
necessary, introduce new legislation to fully implem ent the TRIPS Agreement.  In particular, China 
would amend the following laws: the Copyright Law to provide for a rental right for computer 
programmes and phonograms; the Trad emark Law to provide for protec tion of trade-names, famous 
marks and marks consisting of colours, letters or  numerals; the Patent Law to allow compulsory 
licensing only within the limits prescribed in the TR IPS Agreement, and the Cr iminal Code to provide 
remedies which constitute a deterrent to further in fringements. In addition, China would provide for 
the protection of geographical indications and layout -designs of integrated circuits to implement the 
respective provisions of the TRIPS Agreement.  China confirmed that it would strengthen the 
legislative framework for the enfo rcement of intellectual property rights for all right-holders. In 
particular, national treatment would be fully applie d, so that copyright enforcement action by local 
copyright bureaus involving foreign right-holders, would no longer require cl earance by the National 
Copyright Administration in Beijing. Other procedur al rights would be strengthened as well, so that 
right-holders can obtain information on government enforcement activities and that investigations are 
conducted within reasonable time- limits supported, where necessary, by significant fines that 
constitute an effective deterrent to further infringeme nts. In addition, China would ensure the vigorous 
application by Chinese authorities of the enforcement legislation in order to considerably reduce the 
existing high levels of piracy and counterfeiting. Action would include the closure of manufacturing 
facilities as well as markets and retail shops that ha ve been the object of administrative convictions 
for infringing activities.  The Work ing Party took note of these commitments, and recalled that a full 
review of China's intellectual property laws would take place after accession.]  alternative text  
[xx. Some members of the Working Party  expressed  their concerns over the infringement cases of 
intellectual property rights in China, including the counterfeit of many produc ts orginating in those 
members.  In response, the representative of Ch ina stated that China was fully committed to  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 71 
 
 
  complying with its obligations under the TRIPS Ag reement, including the appropriate enforcement 
for the protection of intellectual property rights.]  
[xx. Noting the advanced state of protection fo r intellectual property rights in China, the 
representative of China confirmed that China will apply the provisions of the Agreement on Trade 
Related Aspects of Intellectual Property, upon accession,  without recourse to the provisions of Article 
65 of that Agreement.  The Working Pa rty took note of this commitment.]   
124. Some members of the Working Party stated  that China should undertake a commitment to 
fully comply with the requirements of the Agreement on TRIPS from ….  
2. Specific aspects of the intellectual property regime 
 [to be completed] 
VI. POLICIES AFFECTING TRADE IN SERVICES 
125. Members of the Working Party expressed concerns  about the lack of transparency in China's 
services regime.  The representative of China stated th at China was prepared to enter a commitment to 
improve this aspect of its trade regime.   
Licensing 
[xx. Some Members expressed concern regarding th e lack of transparency in China’s services 
regime in particular in respect of obtaining, extending and renewing li censes and other approvals 
required to provide services in China’s market .  Members welcomed  the broad ranging and 
comprehensive commitments that China was undertak ing  to increase transparency and to provide 
information to governments and service providers  on any matter relating to the GATS including 
China’s schedule of specific commitment s.   Upon its accession, China will, inter alia , publish a list 
of authorities responsible for authorizing, approving or regulating those service sectors in which China made specific commitments as well as the specific procedures and conditions for obtaining, 
extending,  renewing, denying or terminating licenses or  approvals.  Members also stated the need to 
ensure the independence and impar tiality of regulatory authorities fro m the enterprises and individuals 
that they regulate. 
xx. Members noted that the procedures and conditions for obtaining, extending or renewing  
licenses or approvals for providing services must be consistent with the provisions of the WTO 
Agreement, including the Protocol and China’s sch edule of specific commitments.  Any licensing or WT/ACC/SPEC/CHN/1/Rev.2 
Page 72  
 
approval process must not itself act as a barrier to market access and not be more trade restrictive than 
necessary.  Specific time frames for decision, the op portunity to cure deficiencies in an application 
and to submit additional informati on, and the prompt provision in writing of reasons for denial of an 
application should be provided for in the proce dures. Fees charged for processing of applications 
should be commensurate with the administrative cost  of processing the application.   Conditions for 
filing an application and the time taken to approv e applications are not to have the effect of 
quantitative limitations on service suppliers or de nial of national treatment.  Members expressed 
particular concern regarding the practice of i nviting only certain service providers to apply for 
licenses or approvals and the practice of automatically  terminating the effectiveness of an application 
if the approving authority has not acted within a set period of time.  Moreover, automatically 
terminating the effectiveness of pending applications after a certain period of time without providing 
reasons had the effect of denying a license with no effective right of appeal as required under China’s 
protocol.  Applicants needed to be informed of the reasons for denial of a license and such reasons 
needed to be consistent with China’s WTO commitments.   
xx. The representative of China confirmed that, in the application of its commitments under the 
WTO Agreement, the Protocol and its schedule of  specific commitments, China shall, upon accession, 
ensure that the procedures for obtaining, expandi ng and renewing licenses or approvals for providing 
services will not be more trade restrictive than ne cessary and will be in ac cordance with Article XVII 
of GATS.  All procedures and conditions for pr ocessing applications will be published prior to 
becoming effective.  Such procedur es will include specific time frames for review and decision by all 
relevant authorities.   Decisions will be taken promp tly on all applications and, if denied, reasons for 
such action would be provided in writing to the appl icant, together with the possibility of resubmitting 
the application without delay.  If the application is accepted , the applicant will be informed, without 
delay, of the date of entry into force of the li cense or approval which normally should be immediate.  
All necessary forms and applications would be r eadily available on request and without special 
invitation. Elements such as  the opportunity to cure deficiencies in an application (after promptly informing the applicant about these) and to submit additional information will be included in the 
procedures.  Any fees charged would be commensurat e with the cost of processing an application.  
Relevant regulatory authorities will be separate from, and not accountable to, any service suppliers 
that they regulate.  The decisions and procedures used by regulators shall be impartial with respect to 
all market participants.  Where China requir es an examination to license professionals, such 
examinations will be scheduled at frequent inte rvals.  The Working Party took note of these 
commitments. 
xx. Some Members also expressed concern rega rding China’s current practice of imposing 
conditions on the Chinese companies th at are allowed to partner with foreign service suppliers.  These  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 73 
 
 
  Members indicated that this may amount to a “ de facto ” quota, as the number of potential partners 
meeting those conditions may be very limited.  Th e representative of China confirmed that a foreign 
service supplier will be able to partner with the Chinese entity of its choice, including outside the 
sector of operation of the joint venture, as long as th e Chinese partner is legally established in China.  
The Working Party took note of this commitment. 
xx. With respect to its schedule of specific commitments, China confirmed that, while it had 
limited its market access commitments in some sect ors to permit foreigners to hold only a minority 
equity interest, a minority shareholder can enfor ce, under China’s laws, regulations and measures, 
rights in the investment, Moreover, WTO Members will have recourse to WTO dispute settlement to 
ensure implementation of all commitments in Chin a’s GATS schedule.  The Working Party took note 
of these commitments. 
xx. The representative of China also confirmed that established foreign service suppliers will be 
able to agree with their joint venture partners on the modification of their equity interest and 
implement this.  He further confirmed that such an agreement will be approved if consistent with the 
relevant equity commitments in China’s GATS sche dule.  The Working Party took note of these 
commitments. 
xx. The representative of China submitted an ac tion plan for implementing China’s services and 
related commitments, circulated to the Workin g Party in [WT/ACC/CHN/X].  The action plan 
outlined the steps that Ch ina was taking to ensure full implem entation of its services commitments, in 
particular, focusing on revisions in  its laws, regulations and other measures relating to licensing of 
enterprises to provide services to comply with its obligations.  The representative of China confirmed 
that China would consult with WTO Members regardi ng its revision of relevant  laws, regulations and 
other measures to comply with China’s obligatio ns.   The Working Party took note of this 
commitment. 
xx. Members welcomed China’s commitments in the area of distribution, noting that 
implementation of its commitments in this area w ould modernize China’s infrastructure for supplying 
this essential service.  Moreover, China’s commitm ents were subject to a progressive phase-in of 
rights which would require changes in China’s laws  and regulations concerning distribution activities 
generally.  New regulations on sales away from a fi xed location, for example, were specifically 
referenced in China’s schedule of specific commitm ents.  Some Members noted that the World Code 
of Conduct provided a strong ethical basis for regulating sales away from a fixed location.  Members also sought confirmation that the supply of franchising services was different from the establishment WT/ACC/SPEC/CHN/1/Rev.2 
Page 74  
 
of a “chain store” since franchises with numerous establishments could be envisioned in a country of 
the size and population of China.  
xx. China confirmed that it will consult with WTO Members and develop regulations, consistent 
with the commitments in its services schedule, on  sales away from a fixed location.  The Working 
Party took note of this commitment. 
xx. The representative of China confirmed that franchising services were distinct from the 
establishment of a chain store and that the limita tions on certain chain stores would not apply to 
enterprises established and operati ng under franchising agreements.  The Working Party took note of 
this commitment. 
xx. In response to questions from Members rega rding certain terms in China’s GATS schedule, 
the representative of China confirmed the following:   
(a) A “master policy” is a policy that pr ovides blanket coverage for the same legal 
person’s property and liabilities located in diffe rent places.  A master policy may only be 
issued by the business department of an insure r’s head office or that of its authorized 
province-level branch offices.  Other branch es are not allowed to issue master policies. 
(I) Master policy business with the state key construction projects as it subject-
matter insured.  
  If investors on the state key construction projects (i.e., projects that are so 
listed and annually announced by the Stat e Development and Planning Commission) 
meet either of the following requirement s, they may purchase a master policy from 
insurers that are located in the same place as the investors’ legal persons are located. 
 (1) The investment on the subject-matter insured is all from China (including 
the reinvestment from the foreign-invested  enterprises in China) and the sum of 
investment of the investor accounts for over 15% of the total investment. 
 (2) The investment is partially fr om abroad, and partially from China 
(including the reinvestment from the foreign- invested enterprises in China) and the 
sum of investment of the Chinese investor accounts for over 15% of the total domestic investment. 
 For those projects that draw investment all from abroad, every insurer may provide 
coverage in the form of master policy.  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 75 
 
 
   II.  A Master policy covering different s ubject-matters insured of the same legal 
person. 
 For those subject-matters insured located in different places and owned by the same 
legal person (excluding financia l, railway, and post and tel ecommunications industries and 
enterprises), a master policy may be issued on th e basis of either of the following conditions. 
 (1)  Insurance companies incorporat ed where the legal person or accounting 
unit of the insurance applicant is located ar e allowed to issue a master policy and pay 
the premium tax at that location. 
 (2)  If over 50% of the insurance amount  of the subject-matter insured is from 
a larger or medium sized city, then insurers in that city are allowed to issue a master 
policy, no matter whether the insurance a pplicant’s legal person or accounting unit is 
located in the city. 
(b) Large commercial risk mean s an insurance risk written on any large scale commercial 
enterprise in which the aggregate annual pr emium exceeds $10,000 (RMB), or construction 
projects where the investment amount is greater than $12 million. 
  (c) Statutory insurance products are limited to the following specific categories, and that 
no additional products or categories will be adde d: Mandatory third-party auto insurance, 
driver and operator liability for busses and othe r commercial vehicles; and the reinsurance of 
statutory insurance associated with each of the above-listed categories.  
xx. Members welcomed China’s commitment to pe rmit internal branching for all insurance firms 
consistent with the phase-out of geographic restrict ions.   Members  noted that China had included 
certain qualifications that foreign insurers must meet to obtain authorization to provide services in 
China.  Those qualifications related to a minimu m period of establishment in another WTO member, 
total global assets and maintenance of a representativ e office in China.   Since these qualifications 
related to the general characteristics of the fore ign insurance company seek ing to obtain the initial 
authorization  to enter China’s market, a compan y should only need to meet these qualifications in 
connection with the grant of such authorization and not in connection with  subsequent approvals 
relating to branching or other activities.   
xx. The representative of China confirmed that  China will only require a foreign insurance 
supplier to obtain one authorization to enter Chin a’s market to provide services in the territory of WT/ACC/SPEC/CHN/1/Rev.2 
Page 76  
 
China.  Furthermore, China will permit internal branching for all insurance firms, including those 
currently established in China, consistent with the phase-out of geographic restrictions.  He confirmed 
that a branch, including a sub-branch, is an extensi on of the parent enterprise and not a separate legal 
entity and that China will permit internal branchi ng accordingly on that basis.  The Working Party 
took note of these commitments.] 
[xx. Some members expressed concern regarding the lack of transparen cy in China’s services 
regime in particular in respect of obtaining, extending or renewing licenses and other approvals 
required to provide services in China’s market .  Members welcomed  the broad ranging and 
comprehensive commitments that China was undertak ing  to increase transparency and to provide 
information to governments and service providers  on any matter relating to the GATS including 
China’s schedule of specific commitment s.   Upon its accession, China will, inter alia , publish a list 
of authorities responsible for authorizing, approving or regulating those service sectors in which 
China made specific commitments as well as the specific procedures and conditions for obtaining, 
extending and renewing licenses or approvals.   
xx. Members noted that the procedures and conditions for obtaining, extending or renewing  
licenses or approvals for providing services must be consistent with the provisions of the WTO, 
including the Protocol and China’s schedule of specific commitments.  Any licensing or approval process must not itself act as a barrier to market access and not be more burdensome than necessary.  Specific time frames for decision, the opportunity to cure minor deficiencies in an application and to 
submit additional information, and the prompt pr ovision in writing of reasons for denial of an 
application should be provided for in the proce dures. Fees charged for processing of applications 
should be commensurate with the administrative cost  of processing the application. Conditions for 
filing an application and the time taken to approv e applications are not to have the effect of 
quantitative limitations on service suppliers or de nial of national treatment.  Members expressed 
particular concern regarding the practice of i nviting only certain service providers to apply for 
licenses or approvals and the practice of automatically  terminating the effectiveness of an application 
if the approving authority has not acted within a set period of time.  Moreover, automatically 
terminating the effectiveness of pending applications after a certain period of time without providing 
reasons had the effect of denying a license with no effective right of appeal as required under China’s 
protocol.  Applicants needed to be informed of the reasons for denial of a license and such reasons 
needed to be consistent with China’s WTO commitments.   
xx. The representative of China confirmed that, in  application of its commitments under the WTO 
Agreement, the Protocol and its schedule of specific commitments, China shall, upon accession, 
ensure that the procedures for obtaining, expandi ng and renewing licenses or approvals for providing  WT/ACC/SPEC/CHN/1/Rev.2 
 Page 77 
 
 
  services will not be more burdensome than necess ary and n accordance with Article XVII of GATS. 
All procedures and conditions for processing appli cations will be published prior to becoming 
effective.  Such procedures will include specific ti me frames for review and decision by all relevant 
authorities.   Decisions will be ta ken promptly on all applications and,  if denied or terminated, reasons 
for such action would be provided in writing to the applicant, together with the possibility to resubmit 
the application without delay. If the application is  accepted, the applicant will be informed without 
delay of the date of entry into force of the licen se or approval, which should normally be immediate.  
All necessary forms and applications will be r eadily available on request  and without special 
invitation, and information requested will be directly  relevant to GATS-consistent criteria. Elements 
such as the opportunity to cure deficiencies in an application (after promptly informing the applicant 
about these) and to submit additional information will be included in the procedures. Any fees 
charged will be commensurate with the cost of processing an application. Relevant regulatory 
authorities will be separate from, and not accountable to, any service suppliers that they regulate. The 
decisions of and the procedures used by regulators shall be impartial with respect to all market 
participants. Where China requires an examination to  licence professionals, such examinations will be 
scheduled at frequent intervals. The Work ing Party took note of these commitments. 
 C hoice of partner  
xx.  Some members expressed concern regarding the existing practice of imposing conditions on 
the Chinese companies that are allowed to partne r with foreign service suppliers. These members 
indicated that this may amount to “de facto” quotas, as the number of potential partners meeting those 
conditions may be limited. The representative of Ch ina confirmed that a foreign service supplier will 
able to partner with Chinese entity of their choice,  including outside the sector of operation of the 
joint venture, as long as the Chinese partner is lega lly established in China. The Working Party took 
note of this commitment.  
 Modification of the equity interest  
xx. With respect to its schedule of specific commitments, China confirmed that established 
foreign service suppliers will be able to agree with their joint venture partners on the modification of 
their equity interest and implement this. The representative of China confirmed that such an 
agreement will be approved if cons istent with the relevant equity commitments in China’s GATS 
schedule. The Working Party took note of this commitment. 
 Prior experience requirement for establishment  WT/ACC/SPEC/CHN/1/Rev.2 
Page 78  
 
xx. In response to questions from members, the re presentative of China confirmed that, the merging, 
division, restructuring or other change of legal fo rm of a foreign company will not impact on the prior 
experience requirements included in China’s GATS schedule, as long as the activities of the company, 
for which establishment in China is requested, are maintained in the new or restructured entity. 
 Market research  
xx. Some members expressed concern regarding the recent additional requirements imposed on 
market research activities. In response to questions  from members in this respect, the representative of 
China confirmed that, upon accession to the WTO, it will remove the prior approval requirement for 
market research services, defined as investigati on services designed to secure information on the 
prospects and performance of an organisation’s produ cts in the market, including market analysis (of 
the size and other characteristics of a market) and analysis of consumer attitudes and preferences. 
Market research firms registered in China which are engaged in such serv ices, would only be only 
required to file the survey plan and the questionna ire form on record in the statistical agencies of 
government at or above the provincial level. Th e Working Party took note of these commitments. 
 Legal services  
xx. In response to questions from members, the representative of China confirmed that "Chinese 
national registered lawyers", as indicated in Ch ina’s GATS schedule, are those nationals holding a 
practising licence.] 
126. China's Schedule of Specific Commitments on Se rvices is annexed to its draft Protocol of 
Accession reproduced in the Appendix to this Draft Report.  This Schedule of Specific Commitments 
on Services contains the market access commitm ents of China in respect of services. 
VII. OTHER ISSUES 
1. Notifications 
127. Members of the Working Party requested that China provide to the WTO Secretariat the 
notifications described in paragraphs … of this Draft Report.   
2. Trade Agreements 
128. Some members of the Working Party raised sp ecific concerns in relation to China's special 
trade arrangements, including barter trade arrange ments, with third countries and separate customs 
territories.  Those members requested that China enter a commitment to eliminate or bring such  WT/ACC/SPEC/CHN/1/Rev.2 
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  arrangements into conformity with WTO obligations by no later than the date of its accession to the 
WTO Agreement. 
3. Publication of information on trade 
 [to be completed] 
4. Transparency  
129. Some members of the Working Party request ed that China undertake to ensure that upon 
request, and prior to implementation or enforcem ent, all laws, regulations and other measures 
pertaining to or affecting trade in goods, services, TR IPS or the control of foreign exchange would be 
published and made available to WTO Members.   
130. Those members also requested that China designate an official journal in which all laws, 
regulations and other measures pertaining to or a ffecting the subject-matter of the WTO Agreement 
would be published and that those laws regulations and other meas ures should only become effective 
following a period within which interested pa rties could submit comments to the designated 
authorities.  They asked that China publish that journal on a regular basis and make copies of all 
issues of this journal readily availa ble to individuals and enterprises. 
131. Members of the Working Party also request ed that China set up an enquiry point where 
information relating to all laws, regulations and other measures pertaining to or affecting trade in 
goods, services, TRIPS or the control of foreign exch ange could be obtained.  Those members stated 
that replies to such enquiries should generally be provided within 30 days of a request, though in no 
case take longer than 45 days, and if so delayed a st atement of indicating the reasons therefore should 
be provided in writing to the interested party.  Members noted that replies to enquiries would need to be complete and represent the authorita tive view of the Chinese Government. 
[xx. The Representative of China stated that China would, acco rding to the requirements of all WTO 
covered agreements, make available to WTO members, upon request, relevant laws, regulations and other 
measures when such measures are implemented or enfo rced. He further stated that China would establish 
or designate an enquiry point where, upon request of other WTO members, laws, regulations and other measures pertaining to or affecting the subject-matte rs of the WTO agreement may be obtained and replies 
to relevant inquiries from other WTO members be provided within a reasonable period of time.] 
 WT/ACC/SPEC/CHN/1/Rev.2 
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132. Members of the Working Party further requ ested that China provide the WTO Secretariat 
with statistical data and information describing China's economy and trading system specified in 
Annex 1 of its Protocol of Accession every two years,  and thirty calendar days prior to a meeting of 
the Working Party on Trade with China that would be established by China's Protocol of Accession.  
[xx. Members expressed concern about the lack of  transparency regarding the laws, regulations 
and other measures that applied to  matters covered in the WTO Agre ement and this Protocol.  In 
particular, Members noted the difficulty in finding and obtaining copies of regulations and other 
measures undertaken by various ministries as well as t hose taken by provincial and local authorities.  
Transparency of regulations and other measures, particularly of sub-central authorities was essential 
since these authorities often provided the details on how the more general laws , regulations and other 
measures of the central government would be implemented and often differed among various 
jurisdictions. Members emphasized the need to receive  such information in a timely fashion so that 
governments and traders could be prepared to comp ly with such provisions and could exercise their 
rights in respect of implementation and enforcement of such measures.  Members noted the development of the Internet and other means to en sure that information from all government bodies at 
all levels could be assembled in one place and made readily available.  The creation and maintenance 
of a single, authoritative journal and enquiry po int would greatly facilitate dissemination of 
information and help promote compliance. 
xx. Members also emphasized the importance of a meaningful opportunity to provide comments 
prior to final implementation of laws, regulations and other measur es.  Such an opportunity could 
enhance understanding of the provision and permit Chin a to take such comments into account before 
implementing a measure.] 
133. In response, the representative of China noted  that the Chinese Government regularly issued 
publications providing information on China's foreign trade system, such as the: "Almanac of Foreign 
Economic Relations and Trade" and "The Bulle tin of MOFTEC" published by MOFTEC; "Statistical 
Yearbook of China", published by the State Sta tistical Bureau; "China's Customs Statistics 
(Quarterly)", edited and published by the Customs General Administration.  China's laws and 
administrative rules and regulations of the State C ouncil relating to foreign tr ade were all published, 
as were regulations issued by Ministries and Commis sions. Such laws and regul ations were available 
in the "Bulletin of the State Council", the "Collec tion of the Laws and Regulations of the People's 
Republic of China (PRC)" and "MOFTEC Gazette". Th e administrative regulations and directives 
relating to foreign trade were also published in MOFTEC's official website 
(http://www.moftec.gov.cn) and periodicals.   WT/ACC/SPEC/CHN/1/Rev.2 
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  134. He further noted that information on exch ange controls affecting import and export was 
published by the State Administration of Foreign Ex change.  All the valid laws and regulations of 
foreign exchange control were reproduced on the website of the State Administration of Foreign 
Exchange (http://www.safe.gov.cn) and via the news media.   
135. Concerning administration of import and export, the representative of China noted that 
MOFTEC, together with the releva nt departments, decided the items and specific quantities of 
products subject to import and expor t licensing and made timely adjustments according to the need of 
the current situation.  Such information would be published on "International Business" newspaper 
and "MOFTEC Gazette".  
136. He also noted that information on China's customs laws and regulations, import and export 
duty rates, and customs procedures were published in  the "State Council Bulletin" and in the press 
media, and were available upon request. The procedur es concerning application of duty rates, customs 
value and duty determination, drawback and duty recovery, as well as the procedures concerning duty 
exemptions and reduction, were also published.  Th e State Statistics Bureau also published quarterly 
customs statistics, calculated according to country of origin and consumption. The Customs General 
Administration published trade figures on the basis of eight-digit H.S. headings.    
137. The representative of China noted that any bilateral trade agreemen ts concluded between 
China and its trading partners and protocols on the exchange of goods negotiated under them were 
published in "The Treaty Series of the PRC".  He al so noted that the "Directory of China's Foreign 
Economic Relations and Trade Enterprises" and "China's Foreign Trade Corporations and 
Organizations" were two publications , which identify foreign trade corporations and other enterprises 
in China engaged in foreign trade.  
138. [ China confirmed that it would, to the maximum extent possible, make available to 
WTO Members translations into one or more of the official languages of the WTO all laws, 
regulations and other measures pertaining to or affecting trade in goods, services, TRIPS or the 
control of foreign exchange, [___ calendar days ] before such measures  are implemented or 
enforced.  The Working Party took note of these commitments.]  [The Representative of China 
noted that China would translate, to the maximum ex tent possible, relevant la ws, regulations and other 
measures into English.  Upon request, the English translations may be obtained from the designated 
inquiry point.  He emphasized that those translati ons are for reference and that only the text in 
Chinese is authentic.] WT/ACC/SPEC/CHN/1/Rev.2 
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139. China confirmed that publication of all laws, regulations and other measures pertaining 
to or affecting trade in goods, services, TRIPS or  the control of foreign exchange would include 
[the period for comment,] the effective date of these measures and the products and services 
affected by a particular measure [, identified by appropriate tariff line and CPC classification if 
necessary].  The Working Party took note of these commitments.  
140. China confirmed that it would [apply on a most-favoured-nation basis all transparency 
commitments agreed bilaterally with other countries and separate customs territories] [fulfil the 
requirements of transparency under the WTO Agre ement and apply its transparency commitments] . 
The Working Party took note of this [commitment] [confirmation] . 
141. China confirmed that it would publish in the official journal, by appropriate 
classification and by service where relevant,  a list of all organizations, including those 
organizations delegated such authority from the national authorities, that are responsible for 
authorizing, approving or regulating services activities whether through grant of license or other approval.  Procedures and the conditions fo r obtaining such licenses or approval would 
also be published.  The Working Party took note of these commitments.  
142. China confirmed that none of the informatio n required by the WTO or the Protocol to 
be disclosed shall be withheld as confidential in formation.  The Working Party took note of this 
commitment.  
143. China confirmed that it would establish or designate an enquiry point where all 
information relating to the laws, regulations and ot her measures pertaining to or affecting trade 
in goods, services, TRIPS or the control of foreign exchange, as well as the published texts, could be obtained.  This information would include the names of national or sub-national authorities (including contact points) responsible for implementing a particular measure.  The Working Party took note of these commitments.  
[xx. The representative of China stated that the fu ll listing of official journals was as follows:  
Gazette of the Standing Committee of the National People's Congress of the People's Republic of China;  Gazette of the State Council of the People's Republic of China;  Collection of the Laws of the 
People's Republic of China;  Collection of the Laws and Regulations of the People's Republic of 
China;  Gazette of MOFTEC of the People's Republic  of China;  Proclamation of the People's Bank of 
the People's Republic of China;  Proclamation of the Ministry of Finance of the People's Republic of China.]   WT/ACC/SPEC/CHN/1/Rev.2 
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  VIII. CONCLUSIONS  
144. The Working Party took note of the explana tions and statements of China concerning its 
foreign trade regime, as reflected in this report.   The Working Party took note of the commitments 
given by China in relation to certain specific matters  which are reproduced in paragraphs […] of this 
Draft Report and noted that these commitments are incorporated in paragr aph 1.2 of the Draft 
Protocol of Accession of China. 
145. Having carried out the examination of the forei gn trade regime of China and in the light of the 
explanations, commitments and concessions made by the representative of China, the Working Party 
reached the conclusion that China be invited to accede to the Marrakesh Agreement Establishing the 
WTO under the provisions of Article XII.  For this purpose, the Working Party has prepared the draft 
Decision and Protocol of Accession reproduced in th e Appendix to this Report, and takes note of its 
Schedule of Concessions and Commitments on Goods [(document WT/ACC/SPEC/CHN…)] and 
China's Schedule of Specific Commitments on Services [(document WT/ACC/SPEC/CHN…)] that 
are annexed to the Draft Protocol.  It is proposed  that these texts be adopted by the General Council 
when it adopts the Draft Report.  When the Draft Decision is adopted, the Draft Protocol of Accession 
will be open for acceptance by China which will become  a Member thirty days after it accepts the said 
Draft Protocol.  The Working Party agreed, therefore, that it had completed its work concerning the negotiations for the accession of China to the WTO. 
__________