WORLD TRADE ORGANIZATION  
ORGANISATION MONDIALE DU COMMERCE  
ORGANIZACIÓN MUNDIAL DEL COMERCIO 
WT/TPR/M/264/Add.1 
22 August 2012 
 (12-4534) 
Trade Policy Review Body 
12 and 14 June 2012 Original:   English/Spanish 
 anglais/espagnol
 inglés/español 
  
TRADE POLICY REVIEW 
CHINA 
Record of the Meeting 
Addendum 
Chairperson:  H.E. Mr. Eduardo Muñoz Gómez (Colombia) 
 This document contains the advance writte n questions, and replies provided by China.1 
 
__________________________________________________________________________________  
 Organe d'examen des politiques commerciales 12 et 14 juin 2012 
 
EXAMEN DES POLITIQUES COMMERCIALES 
CHINE 
Compte rendu de la réunion 
Addendum 
Président:  S.E. M. Eduardo Muñoz Gómez (Colombie) 
 
 Le présent document contient les questions écrites communiquées à l'avance et les réponses 
fournies par la Chine.1 
 __________________________________________________________________________________ 
 
Órgano de Examen de la s Políticas Comerciales 
12 y 14 de junio de 2012 
 
EXAMEN DE LAS POLÍTICAS COMERCIALES 
CHINA 
Acta de la reunión 
Addendum 
Presidente:  Excmo. Sr. Eduar do Muñoz Gómez (Colombia) 
 
 En el presente documento figuran las pre guntas presentadas anticipadamente por escrito, 
junto con las respuestas facilitadas por China.1 
                                                      
1 In English and Spanish only./En anglais et espagnol seulement./En inglés y español solamente.   
    WT/TPR/M/264/Add.1 
 Page 3 
 
 
  REPLIES PROVIDED BY CHINA TO WRITTEN QUESTIONS 
 
 ARGENTINA 
 
Informe de la Secretaría (doc. WT/TPR/S/264) 
 
I. ENTORNO ECONÓMICO 
1) Principales resultados económicos   
En el párrafo 9 el informe indica que el tipo de cambio del renminbi (RMB) se basa en la oferta y la demanda del mercado y se ajusta en referencia a una cesta de monedas y que, según las autoridades, 
en 2010 se emprendi una reforma del mecanismo con mi ras a lograr una mayor flexibilidad del tipo de 
cambio.   
 
1. Podría el gobierno de China explicar cómo est á compuesta la canasta de monedas y cómo 
funciona el mecanismo de ajuste que se le re aliza al RMB? Cuáles son las reformas que se 
emprendieron en 2010?  
 Answer: China has started to implement manageable fl oating exchange rate policy based on market 
supply and demand, and by reference to currency b asket for adjustment since 21 July 2005.  China 
continued to advance reform on the formation mech anism for RMB exchange rate in June 2010.  In 
order to promote the basic balance of intern ational payments, safeguard the stability of 
macro-economy and financial market, more efforts s hould be devoted to the key tasks of the reform 
ranging from making adjustment on the basis of market supply and demand and by reference to 
currency basket, to carrying out dynamic management on and adjustment to fluctuation of RMB 
exchange rate in light of promul gated exchange floating width in exchange market, and to ensuring 
RMB exchange rate anchored to a reasonable and balanced level.   
 
2) Políticas estructurales 
 
El párrafo 13 indica que China ha puesto en marcha un programa denominado Duodécimo Plan Quinquenal (2011-2015), con el obj etivo de reformar la economía  para transformarla en una 
economía más impulsada por el crecimi ento de la demanda interna. 
 2. Podría el gobierno de China detallar c uáles son específicamente las medidas que se 
establecen en el marco de este plan?    
 
Answer: China is confronted with an outstanding proble m for economic and social development, that 
is too much dependent on investment and export fo r growth and domestic demand.  To this end, the 
12
th Five-year Plan proposes to establish a long-term  domestic expansion mechanism and promote the 
transformation of economic growth driven by consum ption, investment and export.  With regard to 
policy orientation and working priority, the Plan further makes clear that many efforts will be made to establish a long-term domestic expansion mechanis m of consumer demand on one hand and adjust 
and optimize investment structure on the other hand.    II. REGIMEN DE POLTICA COMERCIAL: MARCO Y OBJETIVOS  1) Marco institucional y jurídico 
 
En el párrafo 13, el informe menciona que, todo s los proyectos de reglamentos administrativos y 
normas departamentales relacionados con el come rcio entran en vigor 30 días después de su 
promulgación, pero que no obstante existen excepciones. 
 WT/TPR/M/264/Add.1 
Page 4 
 
 
  3. Podría el gobierno de China especific ar cuáles son estas excepciones?    
 
Answer: According to the Protocol on the accession of  China, those laws, regulations and other 
measures involving national security, specific measures setting foreign exchange rates or monetary 
policy and other measures the publication of wh ich would impede law enforcement are the 
exceptional cases.   
2) Desarrollo y administración de las políticas comerciales  
ii) Objetivos de la política comercial   
En el párrafo 22 el informe indica que el objetivo gl obal de la política comercial de China es acelerar 
su apertura al mundo con miras a introducir tec nología y conocimientos técnicos extranjeros, 
desarrollar el comercio exterior y promover un sóli do desarrollo económico.  En este contexto, las 
autoridades tienen la intención de alcanzar este objetivo mediante medidas de facilitación de la 
importación. 
 
4. Podría el gobierno de China detallar qué tipo de medidas piensa tomar para facilitar las 
importaciones? 
 Answer:  China will make the following efforts to further improve the facilitation of trade: 
1. Strengthen the cooperation with the cu stoms of various countries in mutual 
recognition of supervision, mutual assistance in law-enforcement and mutual information exchange  and reduce unnecessary repeated supervisio n and inspection to 
facilitate enterprises and goods to enter the market of each other; 
2. Further push forward the construction of br oad customs clearance ports, give full play 
to the role of E-ports, deepen the cont act and collaboration with the inspection 
departments of the ports and national go vernmental authorities and improve the 
customs clearance efficiency. 
3. Further establish a closer partnership with the business sector, implement the idea of 
from enterprises to goods, strengthen lega l compliance management and provide 
clearance convenience to enterprises that have good credit standing. 
4. Promote a reform of classified cl earance and non-paper customs clearance, 
implement a 7×24  appointment clearance sy stem at ports and customs of regions 
subject to special supervision, implement a dvance declaration, collective declaration, 
inspection and release by guarantee and other clearance convenience, optimize the 
processing flows of the customs, and simplify the supervision and clearance 
formalities.  
5. Actively facilitate the domestic sale of processing trade products and promote the 
construction of a domestic sale trading platform.  
 
4) Régimen de inversión extranjera 
i) Evolución reciente de la política de inversión extranjera directa  
En el párrafo 40 se menciona que, en la revisión de la  Guía para las industrias con inversión extranjera 
(versión de 2011), que entró en vigor el 30 de enero de 2012, se añadieron 44 subsectores y proyectos a la categoría "alentada", mientras que 41 subsector es y proyectos fueron retirados de dicha categoría. 
También se eliminó el límite máximo a la participación extranjera en el capital con respecto a 
11 subsectores de las categorías "alentada" y "restri ngida".  Asimismo, de acuerdo al párrafo 45 los 
proyectos de inversión extranjera se clasifican en 4 categorías:  alentadas, permitidas, restringidas y 
prohibidas.   
5. Podría el gobierno de China explicar cuáles s on los criterios que se utilizan para clasificar 
un proyecto de inversión en alguna de las 4 categoría s?  Cuáles son los subsectores y proyectos que  WT/TPR/M/264/Add.1 
 Page 5 
 
 
  se agregaron y retiraron de la ca tegoría alentada?  Cuáles son lo s 11 subsectores respecto de los 
cuáles se eliminó el límite máximo a la participación extranjera en el capital? 
 Answer: According to the Provisions on Guiding the Or ientation of Foreign Investment, foreign 
investment projects are classified into four cat egories: encouraged, permitted, restricted and 
prohibited projects.  Foreign investment projects be longing to encouraged, restricted and prohibited 
categories are listed in the Catalogue for the Guidan ce of Foreign Investment Industries.  Those do not 
belong to the above three categories are permitted fo reign investment projects which are not to be 
listed in the Catalogue for the Guidan ce of Foreign Investment Industries. 
 Foreign investment projects under one of following circumstances are listed as encouraged foreign 
investment projects:  projects for new agricu ltural technology and comprehensive agricultural 
development and for industrial cons truction in energy, transportation and key raw materials;  projects 
of new high technology, advanced applicable  technology which can improve performance of 
products, save energy and raw materials, and incr ease tech-economic efficiency of enterprise or 
produce new equipment or new materials that meet  the demands of the market but the domestic 
production capacity is deficient; projects that meet the demands of the market, and can promote the 
quality of products, enter into emerging markets or improve the international competitiveness of the 
products;  projects adopting new technology and e quipment for conservation of energy and raw 
materials, comprehensive utilization of resources and renewable resources, and for prevention of 
environment pollution;  and projects that can make full use of the man power and resource advantages 
in the mid-west regions and are in accord ance with the states industrial policies. 
 Foreign investment projects under one of following  circumstances are listed as restricted foreign 
investment projects:  projects of backward technol ogy;  projects that go against resource conservation 
and improvement in ecological environment;  pr ojects for exploiting or mining resources under 
protective exploitation stipulated by the state;  and projects involving industries to be gradually opened up by the state.   Those foreign investment projects under one of following circumstances are listed as prohibited 
foreign investment projects:  projects that endanger th e safety of the state or damage social and public 
interests; projects that pollute or damage the environment, destroy natural resources or impair the health of human being;  projects that occupy large amounts of land, unfavorable to the protection and development of land resources;  projects that en danger the safety of military facility and its 
performance;  and projects that utilize the unique craf tsmanship or technology of the country to make 
products. 
 En el párrafo 41, el informe indica que, desde 2010,  China ha alentado a las empresas extranjeras que 
forman parte de empresas c onjuntas con compañas chinas o institutos de investigación a que 
participen en proyectos financiados en el marco del "programa nacional de desarrollo tecnológico" y 
el "programa de creación de capacidad de in novación", que son programas de subvenciones 
administrados por la Comisión Nacional de Desa rrollo y Reforma (NDRC) con el objetivo de 
promover la innovación.  
6. Podría el gobierno de China br indar más detalles acerca de los alcances y el funcionamiento 
de estos dos programas? 
 
Answer:  "National technology development progr amme" and the innovation capacity-building 
program in China would belong to general scien ce and technology input and detailed requirements 
may vary among different concrete  projects under the program.  They would be available through 
media and websites including the official website of the Ministry of Science and Technology. 
 WT/TPR/M/264/Add.1 
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  iii) Procedimiento de examen y aprobación  
 
En el párrafo 57 el informe menciona que el Consejo de Estado presta apoyo a las empresas con 
inversión extranjera para su cotización en bolsa y/o para emitir obligaciones de sociedades en el 
mercado chino, y que también sigue "orientando" a las instituciones financieras para que aumenten 
sus créditos a las empresas con inversión extranjera.  
7. Podría el gobierno de China indicar en qué consisten estas medidas de apoyo a las empresas 
con inversión extranjera?    
Answer:  In recent years, the Chinese Government has adopted a series of measures to deepen the 
reform on foreign investment administration syst em and promote investment facilitation.  For 
example, the Chinese Government delegated mo st matters concerning the establishment and 
modification of foreign-invested enterprises to local commercial authorities to greatly improve 
administration efficiency.  The Chinese Governme nt has safeguarded the legitimate rights and 
interests of Chinese and foreign investors and foreig n-invested enterprises, intensified efforts in IPR 
protection, concerned and solved investors complaints  and made great efforts to foster an open and 
transparent legal and policy environment, a hi gh-efficiency and convenient administrative 
environment and a market environment in favor  of fair competition for foreign investors. 
 
III. POLITICAS Y PRACTICAS COMERCIALES POR MEDIDAS.  
1) MEDIDAS QUE AFECTAN DIRECTAMENTE LAS IMPORTACIONES i) Procedimientos aduaneros, valoración en aduana y normas de origen 
a) Procedimientos aduaneros 
 
En el párrafo 1, el informe indica que, antes de realizar una declaración a duanera tanto las personas 
físicas como las personas jurídicas y otras organizaciones tienen que registrarse como "operadores de comercio exterior" en el Ministerio de Comercio  (MOFCOM) y en la Administración de Aduanas. 
 
8. Podría el gobierno de China indicar cuáles son los requisitos que deben cumplir estos 
operadores para registrarse como tales?   
Answer: Rules for Registration of Foreign Trade Op erators (MOFCOM Decree No. 14 of 2004) was 
enacted and came into force on 1 July 2004 as requi red by the revised Foreign Trade Law of the 
People's Republic of China of 2004 to implement the accession commitment to liberalize trading right 
within 3 years after WTO accession.  The registration of foreign trade operators serves the purpose of 
statistics and information collec tion and facilitation of customs procedures, and there involves no 
approval procedures.  For informati on required in the registration process, please refer to the Rules for 
Registration of Foreign Trade Operators, of which a full text English translation was provided to the 
WTO Council for Trade in Goods when the Counc il had its annual China transitional review in 
November 2004. 
 
b) Inspección previa a la expedición 
 
En el párrafo 10, el informe menciona que Ch ina aplica prescripciones en materia de inspección 
previa a la expedición, según el Reglamento de aplicación de la Ley sobre inspección de mercancías 
de importación y de exportación revisado, pero que todavía no se han notificado a la OMC. 
 
9. Podría el gobierno de China informar si se encuentra en proceso de notificar estas 
prescripciones?  
 
Answer:  The Measures for the Inspection, Quarantine , Supervision and Administration of Imported 
Solid Waste That Can Be Used as Raw Materials was notified to WTO/TBT Commission on  WT/TPR/M/264/Add.1 
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  19 June 2009 numbered G/TBR/N/CHN/649.  With rega rd to the pre-shipment inspection involved in 
the topics under discussion proposed by Malaysia, pre-shipment inspection on imported used mechanical and electrical products is carried out in  accordance with Article 22 of the Regulations for 
the Implementation of the Commodity Inspection Law of the People's Republic of China, and 
different used mechanical and electrical products  to be imported are judged in accordance with 
mandatory requirements provided in the re levant Chinese national product standards. 
 d) Normas de origen 
 
En el párrafo 16 se afirma que en 2010, China compr obó en el extranjero 1.229 certificados de origen 
expedidos en el marco de acuerdos de libre co mercio.  Los resultados mostraron que 8 de esos 
certificados eran falsos;  correspondan pr incipalmente a productos de la pesca. 
 
10. Podría el gobierno de China explicar cuál es el procedimiento para comprobar los 
certificados de origen expedidos en el marco  de los acuerdos de libre comercio?   
 
Answer:  China Customs has examined preference certif icate of origin in strict accordance with 
relevant preferential trade agreements.  Accordi ng to the agreements, an importer shall submit to 
China Customs the Preference Certificate of Origin  issued by authorized agencies of relevant 
agreement members when he declares entry of g oods inward.  Where a customs officer deems the 
certificate of origin during the examination is probl ematical, such as the stamp of the authorized 
agency (or signature of visa officer) on the certificate of origin doesn't agree with the filing materials 
provided to China Customs by the agreement member or the format of the certificate of origin is 
inconsistent with the agreements, China Customs wi ll start country of origin inspection procedures in 
accordance with the agreements.  Usually, China Customs sends to the designated contact person of 
the agreement member by email the certificate of or igin to be examined (problematical).  Under 
special circumstances, such as the contact person is unavailable, China Customs posts the relevant 
inspection letter in writing to the commercial counse llors office of the embassy of the agreement 
member in China for delivery.  ii) Aranceles 
b) Tipos arancelarios NMF 
Tipos arancelarios NMF aplicados  En el párrafo 25 se afirma, entre otras cosas que en 2011 se aplicaban tipos no ad valorem  a 52 líneas 
arancelarias:  44 estaban sujet as a tipos específicos;  5 a tipos ad valorem  si el precio era inferior o 
igual a determinada cantidad, o a tipos compuestos si  el precio era superior;  y 3 a tipos alternativos 
(tipos ad valorem  o específicos, si éstos eran inferiores).  
 
11. Podría el gobierno de China detallar cuáles s on las líneas arancelarias a las que aplica tipos 
no ad valorem? Cuál es el criterio para determinar  la aplicación de tipos no ad valorem?   
 
Answer:  Since China's WTO accession, China has always  been adopting the specific duty (equivalent 
to ad valorem  rate) converted in strict accordance with the ad valorem rate committed by China for 
WTO accession and re-calculating the rate of specifi c duty each year so that the actual rate will not 
exceed the bound rate committed by China.  The conv ersion is conducted mainly based on the average 
import price in recent years (the last four years) pr ovided by the Customs, a nd, with respect to some 
categories, the influence of such factors is elimin ated as no import records in a certain year or large 
fluctuation in the import price in a certain year.  WT/TPR/M/264/Add.1 
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  c) Tipos distintos de los tipos NMF 
 En el párrafo 28 el informe indica que China se pr opone eliminar los aranceles del 97 % de sus líneas 
arancelarias (al nivel de 8 dígitos del SA) para las importaciones procedentes de 36 Pases Menos 
Adelantados con los que mantiene relaciones diplomáticas.  
12. Podría el gobierno de China indicar cuáles s on las posiciones arancelarias incluidas dentro 
de ese 97%, los países beneficiarios y el plazo en el que se efectivizar la medida?  
 
Answer:  China plans to offer zero tariff treatment on 97% tariff lines from least developed countries 
(LDC) that have diplomatic ties with China unde r the South-South Cooperation Framework.  Since 
July 2010, China has offered zero tariff treatment  to 60% tariff lines from LDCs and will gradually 
extend to 97%. Right now, Authorities in concern are st udying the list of the 3% that are in exception. 
 
d) Contingentes arancelarios 
 En el párrafo 31 el informe indica que, al año 2011, China aplicaba contingentes arancelarios al trigo, 
maíz, arroz, azúcar, lana, lana pe inada, algodón y abonos químicos. 
 13. Podría el gobierno de China explicar cómo es el  proceso de asignación de los contingentes 
para estos productos? 
 
Answer:  Please refer to Provisional Measures for the Administration of Import Tariff Quotas of 
Agriculture Products for specific procedures of allocation.   
e) Exenciones y reducciones arancelarias 
 En el párrafo 32, nota al pie 24, el inform e indica que China aplica exenciones y reducciones 
arancelarias a las mercancías importadas por empresas seleccionadas, conforme a lo establecido por determinadas políticas.  
 
14. Podría el gobierno de China indicar los cr iterios que se utilizan para aplicar estas 
reducciones o exenciones?  Qué se entiende por em presas seleccionadas y los requisitos que debe 
cumplir una empresa para ser categorizada como tal?  Cuáles son las políticas a las que se refiere la 
nota mencionada?  
 
Answer:  Please refer to our subsidy notification G/SCM/CHN/155 and G/SCM/CHN/186 for detailed 
information, e.g. item 83.  En el párrafo 33 el informe menciona que, con el fi n de reducir el consumo de energía y proteger el 
medio ambiente, el Gobierno de China puede no conceder trato preferencial a determinadas 
mercancías en régimen de tráfico de perfeccionamiento. 
 
15. Podría el gobierno de China explicar cuáles son las mercaderías que pueden excluirse del 
régimen de trato de perfeccionamiento y en qué casos se ha negado el trato preferencial?   
 Answer:  China has started to implement commodity classification management for processing trade 
in 1999.  To this day, MOFCOM has worked w ith the General Administration of Customs to 
successively release 11 Catalogues of Prohib ited Commodities for Processing Trade involving 
1,803 with a 10-digit HS code.  Products listed in  the Catalogues are mainly those with high energy 
consumption, high pollution and high resource cons umption during the production as well as difficult 
customs inspection.  No corresponding processing trade business is allowed for the commodities 
listed in the Catalogues and the prohibition form s include import embar go, export embargo and  WT/TPR/M/264/Add.1 
 Page 9 
 
 
  import and export embargo.  Specific commodities include certain endangere d animals, minerals, 
chemicals, paper products, steel products, etc.  Please refer to the [2009] No. 37 Public Announcement and [2010] No. 63 Public Announc ements of the MOFCOM and the General 
Administration of Customs for the Catalogues.  
 En el párrafo 34 se indica que algunas importacion es, tales como las destinadas a las zonas de 
elaboración para la exportación, pueden ser objeto de reducciones o exenciones del Impuesto al Valor Agregado (IVA). 
  
16. Podría el gobierno de China indicar cuál es son las importaciones que son objeto de 
reducción o exención del IVA?  En qué casos corres ponde la reducción y en qué casos la excepción?  
 
Answer: On one hand, according to Article 15 of th e Provisional Regulations of the People's 
Republic of China on Value-added Tax, following it ems shall be exempt from VAT:  (1) importation 
of instruments and equipment directly used in scientific research, experiment and education;  
(2) importation of materials and equipment from fore ign governments and inte rnational organizations 
as assistance free of charge;  and (3) Articles imported directly by organizations for the disabled for special use by the disabled.  On the other hand, import VAT is exempted for following import commodities entering special custom supervisi on areas from an overseas region:  (1) Necessary 
materials for the basic construction of production pl ants and storage facilities in the areas as well as 
necessary equipment and machine for the construc tion projects of production infrastructures in the 
areas;  (2) Necessary machine, equipment, models and maintenance spare parts for the production of 
enterprises in the areas;  and (3) Office supplies in reasonable quantit y to be used by enterprises and 
administrative organizations in the areas.  v) Comercio de Estado 
 
En el párrafo 46, el informe indica que la mayora  de los productos que son objeto de comercio de 
Estado (cereales azúcar, algodón, abonos químicos,  tabaco y aceite crudo y elaborado de petróleo) 
también están sujetos a contingentes arancelarios.  
 
17. Podría el gobierno de China indicar cuáles son los productos sujetos a contingentes as como 
también la metodología a través de la cual se asignan los mismos?  
 
Answer:  Detailed information can be referred in Provisional Measures for the Administration of 
Import Tariff Quotas of Agriculture Products.  
 
vi) Medidas comerciales especiales 
Medidas compensatorias 
 En el párrafo 70, se indica que el Reglamento sobre medidas compensatorias contempla un "examen 
acelerado" en el caso de un exportador que no haya sido objeto de investigación. 
 
18. Podría el gobierno de China explicar en qué consiste este procedimiento?  
 
Answer: No Quick Review procedure is provided in the Chinese Anti-subsidy Regulations.  With 
regard to some issues not provided in existing an ti-subsidy regulations and rules, China will handle 
these problems in accordance with the actual situation of individual cases and by reference to anti-dumping investigation rules and will ensure the investigation conf orms to the Chinese 
Anti-subsidy Regulations and WT Os Agreements on Subsidies and Countervailing Measures.    
 WT/TPR/M/264/Add.1 
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  viii) Normas y otras prescripciones técnicas 
a) Normas y reglamentos técnicos 
 
En el párrafo 85 se explica que en China, hay cuatro niveles de normas:  normas nacionales, 
comerciales, locales y empresariales.   
19. Podría el gobierno de China explicar el pr ocedimiento para el establecimiento de normas 
comerciales?  Cuál es el procedimiento para dar publicidad a estas normas comerciales? 
 Answer:  Trade standards are formulated mainly in li ne with the formulation procedure of national 
standards.  Sigue el párrafo 85 explicando que a falta de normas nacionales, comerciales o locales para 
determinados productos, las empresas que fabr ican esos productos pueden formular sus propias 
normas como base para organizar la producción.  Cuando existen normas nacionales, comerciales o 
locales, se alienta a las empresas a formular y ap licar normas empresariales que sean más rigurosas 
que las normas correspondientes.  
20. Podría el gobierno de China informar si las normas empresariales son voluntarias u 
obligatorias?    
Answer:   Enterprise standards are voluntary.  
 b) Certificación de productos  
En el párrafo 93 se afirma que la AQSIQ y la CNCA  trabajan con los departamentos competentes del 
Consejo de Estado para elaborar y ajustar el catálogo de productos a los cuales se exige una 
certificación.  Además, la CNCA se ocupa de form ular y publicar reglamentos sobre la aplicación de 
la certificación obligatoria de productos.  21. Podría el gobierno de China exp licar cuáles son los criterios par a determinar la exigencia de 
certificación para un producto? 
 
Answer:  The standards upon which certification is carried  out is stipulated in the implementation 
rules for that particular product. 
 
En el párrafo 94, el informe indica que, de conformidad con el Reglamento sobre certificación y acreditación, los productos enumerados en el Catá logo para la Certificación Obligatoria de productos 
no se pueden vender ni importar en China a menos que tengan la Certificación Obligatoria para China 
(CCC).    22. Podría el gobierno de China proporcionar la lista de produc tos sujetos a la certificación 
CCC o indicar el sitio web en donde esta publicada?   
 
Answer:  The Catalogue for 3C certification is publis hed jointly be AQSIQ and CNCA, and public 
notices can be found at the following websites:  www. aqsiq.gov.cn, and www. caca.gov.cn 
 
c)  Medidas sanitarias y fitosanitarias  En el párrafo 106 se explica que para hacer frent e a los problemas derivados de la falsificación y 
alteración de certificados sanitarios y fitosanitarios  y facilitar el comercio de productos agropecuarios 
y alimenticios, la AQSIQ introdujo en 2010 el sist ema de inspección y cuarentena E-cert de China 
(China E-cert).  En el marco de este sistema, se exige a todos los exportadores que se inscriban en el  WT/TPR/M/264/Add.1 
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  registro en línea de la AQSIQ y que obtengan la autorización de este organismo a través de la 
embajada de su país en China.  Los certificados sanitarios y fitosanitarios de importación para cada 
envío deben quedar registrados en el sistema.   
 
23. Podría el gobierno de China informar cuáles s on los plazos para el otorgamiento de la 
autorización para exportar?  Cómo es el proced imiento para el registro y para obtener la 
autorización? 
 
Answer:  In order to facilitate the health growth of tr ade, especially the trade of agricultural and food 
product, as well as prevent fake inspection and quar antine certificate, China initiated the Inspection 
and Quarantine E-cert System.   Any country's government can access to China' s Inspection and Quarantine E-cert System 
(http://ecert.eciq.cn) and apply for registration.  After that, the country's embassy in China has to 
contact AQSIQ for approval.  Any country's governme nt can has the system to check and review the 
texts of certificates which are signed by China's inspection and quarantine organs within one year 
after AQSIQs approval.  The system is also a platform of certificate info rmation exchange, automatic bilateral exchange and 
online checking connecting Chinese and foreign agenci es.  We have established official inspection 
and quarantine E-cert checking mechanism with the government of New Zealand, Australia, 
Netherlands and many other countries.  ix) Financiación relacionada con las importaciones  
En el párrafo 131 el informe indica que el Banc o de Exportación e Importación de China (Banco 
EXIM), ofrece créditos a la importación a los importadores en China.   
24. Podría el gobierno de China indicar en qué consisten estos créditos (tasas, montos, plazos, 
etc.) as como también los requisitos para acceder a los mismos?    
 
Answer: Any importer approved by and registered at a Chinese industrial and commercial 
administration authority or a competent agency can apply to the Export-Import Bank of China for import credit.  The conditions for import credit are that the applicant has good financial and operational status, are able to pay back principal and interest and can provide corresponding guarantee 
and that the amount of import credit generally exc eeds a certain proportion of the amount of the 
business contract.  The Export-Import Bank of China comprehensively examines and approves the amount and length of 
the loan in accordance with  the cash flow of the import project, the borrowers needs to import goods 
and other factors, and determines loan interest rate  in comprehensive accordance with cost of capital, 
quoted market price, clients credit rating, project risk s and other factors.  The loan interest rate of 
RMB import credit is determined in accordance with  relevant regulations of the Peoples Bank of 
China and the loan interest rate of exchange impor t credit is determined in accordance with LIBOR + 
interest margin.  2) MEDIDAS QUE AFECTAN DIRECTAMENTE A LAS EXPORTACIONES iii) Impuestos a la exportación 
 
En los párrafos 139 y 141 se indica que China aplic a impuestos a la exportación que pueden estar 
sujetos a tipos legales y tipos provisionales, as como también impuestos especiales a las exportaciones.  Además, se indica que los tipos pr ovisionales pueden ser ms elevados que los tipos WT/TPR/M/264/Add.1 
Page 12 
 
 
  legales e incluso un producto puede estar sujeto a ambos tipos de derechos, en cuyo caso se aplican 
los tipos provisionales.  25. Podría el gobierno de China explicar los crit erios que se utilizan para determinar cuando un 
producto está sujeto a derechos legales o provisiona les?  Por qué los derechos provisionales son más 
altos que los legales?  Cuál es el plazo en el  que se aplican? Cada cuanto tiempo se actualizan?  
Podría el gobierno de China explicar en qué cons isten los impuestos especiales a la exportación y a 
qué productos se aplican?   
 
Answer:  Interim tariff rates are more favorable ta riff rates that are implemented upon certain 
imported important raw materials for industrial and agricultural production and key components of 
mechanical and electrical products (but only conf ine to the imported goods from countries and regions 
that have signed reciprocal agreement on tariffs with China) and upon some of exported resource 
products on the basis of the beneficial import tari ff rates and export tariff rates specified in Customs 
Tariff of Import and Export.  These tariff rates are generally set annually, and are subject to 
restoration to statutory tariff rates at any time based on needs.  Interim import tariff rates are the temporary tariff set in order to reduce the cost of  inputs of industrial import, while interim export 
tariff rates are the temporary adjustments to the expor t tariff in order to protect exhaustible resources. 
 iv) Desgravación de impuestos a la exportación  
En el párrafo 143, el informe menciona que es posible  desgravar el IVA respecto de las exportaciones, 
y que China ajusta las tasas de desgravación en el  marco de sus políticas industriales para controlar, 
restringir o "gestionar" de otro modo la exportación de determin ados productos.   
 26. Podría el gobierno de China indicar cómo funciona este mecanismo de desgravación, a qué 
productos se aplican y con qué criterios?  
 
Answer: Export rebate is a common practice of countri es levying VAT and is not aimed at managing 
the export of certain products.  Export rebate is specially operated by tax authorities.  The 
commodities for export rebate and rebate rates ar e made available on the website of the State 
Administration of Taxation.  
vi) Prohibiciones, restricciones y régimen de licencias de exportación  
a) Prohibiciones de exportación  
En el párrafo 146 el informe menciona que Chin a mantiene prohibiciones generales de exportación 
sobre de un total de 45 partidas al nivel de 8 dígitos del SA.  
27. Argentina agradecería conocer el listado de  productos sujetos a esta medida  
 
Answer: Products subject to export prohibitions in China have been notified to the WTO as part of 
China's QR notification submitted to  the market access committee.  
 
viii) Financiación, seguros y ga rantas de las exportaciones 
 En los párrafos 154 a 161 el informe describe en lín eas generales las actividades de financiamiento a 
las exportaciones realizadas por el Banco EXIM, mencionando que existen créditos tanto para los 
vendedores radicados en China como para los co mpradores de otros pases.  Sin embargo no aclara 
más detalles al respecto.   WT/TPR/M/264/Add.1 
 Page 13 
 
 
  28. Podría el gobierno de China indicar específic amente cuáles son los programas de créditos 
otorga este Banco, as como también sectores bene ficiados, tasas, montos y plazos?  Cuáles son los 
requisitos que deben cumplir las emp resas para acceder a estos créditos?  
 
Answer: The Export-Import Bank of China develops annual comprehensive credit plan based on 
financing capability, operation capacity, external fina ncing demand and the spec ific conditions stated 
in the regulation policies instead of setting differe ntiated annual credits for specific industries and 
specific interest rate level, amount and term. 
 
3) MEDIDAS QUE AFECTAN A LA PRODUCCION Y EL COMERCIO 
i)  Tributación e incentivos fiscales 
b)  Tributación indirecta 
Impuesto sobre el consumo  
El párrafo 175 indica que China aplica un "impuest o sobre el consumo", que  grava determinados 
productos de producción nacional as como las importaciones de los mismos.   
29. Podría el gobierno de China detallar cuáles son los productos que están sujetos al impuesto 
al consumo, as como también la alícuota y la base sobre la cual se aplica?     
 
Answer: According to the Provisional Regulations on C onsumption Tax, all entities and individuals 
engaged in the production, subc ontracting for processing or the importation of consumer goods 
prescribed by these Regulations within the territory of the People's Republic of China and other units 
and individuals engaged in the sa le of consumer goods provided by the State Council are taxpayers of 
Consumption Tax and shall pay Consumption Ta x in accordance with these Regulations.  The 
computation of tax payable for Consumption Tax shall follow the rate on value, the amount on 
volume method, or the combination of both.  The formulas for computing the tax payable are as follows:  the tax payable computed under the rate on value method = sales amount x tax rate;  the tax 
payable computed under the amount on volume met hod = sales volume x tax amount per unit;  and 
the tax payable computed under the combination method = sales amount x tax rate + sales volume x 
tax amount per unit.  Please refer to the Taxable Items Scope of Charge Tax Unit Tax Rate/Amount 
attached to the Provisional Regulations on Consumpt ion Tax for the applicable scope of consumption 
tax.  Impuesto sobre las actividades comerciales 
 
El párrafo 177 indica que 1 de enero de 2012 China inició una reforma experimental para recaudar el 
IVA en lugar del impuesto sobre las ventas en algunas ramas de producción en Shanghai.  
30. Podría el gobierno de China especificar en qué  consiste esta reforma y por cuanto tiempo se 
aplicar?  
 
Answer: Please refer to the Measures for the Implementa tion of the Pilot Practice of Levying Value 
Added Tax in Lieu of Business Tax on the Tran sportation Industry and Some Modern Service 
Industries, the Provisions on Relevant Matters con cerning the Pilot Practice of Levying Value Added 
Tax in Lieu of Business Tax on the Transportation Industry and Some Modern Service Industries, the 
Provisions on the Transitional Policies for the Pilot Practice of Levying Value Added Tax in Lieu of 
Business Tax on the Transportation Industry and Some Modern Service Industries and other 
documents for details of the pilot practices.  WT/TPR/M/264/Add.1 
Page 14 
 
 
  c) Tributación directa 
Impuesto sobre la renta de las sociedades  
En el párrafo 179 el informe indica que las empresa s con inversión extranjera  establecidas antes del 
16 de marzo de 2007 (cuando de apro bó la nueva Ley del impuesto sobre la renta de las sociedades) y 
sujetas a un tipo del impuesto sobre la renta del 15% quedaron sujetas a un tipo del 18% en 2008, del 
20% en 2009, del 22% en 2010 y del 24% en 2011, y estarán sujetas al tipo legal del 25% en 2012.  31. Podría el gobierno de China explicar cuál es son las razones por las cuáles se ha 
incrementado este impuesto? 
 
Answer: Unifying tax system for Chinese-funded and fo reign-funded enterprises, applying one tax 
law to enterprises of different natures and types and granting equal tax treatments to different economic entities help foster a tax environment in favor of fair competition among enterprises of all 
types and contribute to improve the quality a nd level of foreign investment utilization. 
 Subvenciones y otras ayudas gubernamentales  a) Características generales     
En el párrafo 190 el informe indica que China ot orga ayuda gubernamental a las empresas a nivel 
central y subcentral y que los principales instrumentos de apoyo son las donaciones directas, los préstamos subvencionados y las bonificaciones fiscales.  
32. Podría el gobierno de China explicar en qué consisten las donaciones, préstamos y 
bonificaciones? 
 
Answer:  Please refer to our subsidy notification G/SCM/CHN/123, G/SCM/CHN/155, 
G/SCM/CHN/186 for detailed information.  En el párrafo 193 el informe indica que, entre 2008 y 2010 China aplicó un conjunto de medidas de 
estímulo de 4 billones de yuan (equiva lente al 12,7% del PIB de 2008). 
 
33. Podría el gobierno de China indicar si estas medidas de estímulo aún se continúan 
aplicando, los montos y sectores beneficiados por las mismas?  
 Answer:  In response to the severe impact  of the international financia l crisis, in the second half of 
2008, China implemented a proactive fiscal polic y and moderately loose monetary policy, and 
promptly launched a package of plans to deal with  the impact of global financial crisis, including the 
4 trillion yuan investment program formed through the social capital driven by the 1.18 trillion yuan 
of central government investment within the two ye ars.  The investment of 4 trillion yuan is focused 
on a total of seven areas including affordable hous ing projects, rural livelihood projects and rural 
infrastructure, critical infrastructure, health care,  education, culture and other social undertakings, 
energy conservation, emission reduction and ecolo gical construction, independent innovation and 
industrial restructuring, as well as post-disaster  restoration and recons truction after Wenchuan 
earthquake.  As of the end of 2010, the investment  plan of 4 trillion yuan has been satisfactorily 
completed and it has made remarkable achievements. 
 
b) Ayuda al sector de la energía y a actividad es encaminadas a la protección del medio ambiente 
 En el párrafo 196 el informe menciona que la fabricación de partes y componentes de equipos de 
generación de energía eólica cuenta con la ayuda  de donaciones, desgravaciones de derechos de 
importación y prescripciones en materia de componentes nacionales.  WT/TPR/M/264/Add.1 
 Page 15 
 
 
  34. Podría el gobierno de China indicar en qué  consisten estas donaci ones, degradaciones y 
prescripciones en materia de componentes nacionales?   Existen programas de incentivos para la 
producción de otras energías renovables?  
 
Answer: Since 1 November 2009, China has cancelled the localization rate requirement on wind 
power equipment and implemente d open, fair and equitable bi dding procurement for wind power 
equipment projects in accordance with relevant na tional standards and technical requirements by the 
project unit. 
 
d) Ayuda a las pequeñas y medianas empresas  En el párrafo 202, el informe menciona que el Fondo de Desarrollo para la s PYME otorga a estas 
empresas donaciones o préstamos subvencionados, de h asta 3 millones de yuan, para proyectos en los 
que inviertan. 
 
35. Podría el gobierno de China explicar cuáles son las bases sobre las cuales se otorga esta 
ayuda?  Qué requisitos debe cumplir una PYME para acceder a la misma?   
 
Answer:  Please refer to our subsidy notification G/SCM/CHN/123, G/SCM/CHN/155, 
G/SCM/CHN/186 for detailed information about the assistance to small and medium sized 
enterprises, such as item 46.47.48.   En el párrafo 204, el informe indica que las empr esas con escasos beneficios reciben un trato fiscal 
preferencial.  36. Podría el gobierno de China explicar eué se entiende por escasos beneficios?  En qué 
consiste el trato fiscal preferencial?  C ualquier empresa puede acceder a este beneficio? 
 
Answer:  From 2010 to 2015, for small and low-profit enterprises with yearly payable tax amounting 
to 60,000 yuan or less, the taxable income is reduc ed to 50% of its income, and the enterprise income 
tax is levied at a reduced tax rate of 20%. 
 
vi) Política de competencia y protección de los consumidores 
c) Fusiones y adquisiciones 
Examen de seguridad nacional 
 
En los párrafos 265 a 272, el informe indica que la adquisición de empresas nacionales por inversores 
extranjeros, si se consideran relacionadas con la  seguridad nacional, están  sujetas a exámenes por 
motivos de seguridad nacional.  Hasta el 2011, han sido sometidos a examen 3 casos.   
37. Podría el gobierno de China indicar en qué c onsiste el examen y qué elementos se tienen en 
cuenta para otorgar o no la autorización?  Qué resultados han tenido los 3 casos bajo examen?    
 
Answer: At present, China can't publish relevant inform ation of review cases for the confidentiality 
of applicant enterprises.  
(1) Impact of the M&A transactions on the na tional security, including the domestic product 
manufacturing capacity, domestic service provi sion capacity, and relevant equipment and 
facilities needed for the national security; 
(2) Impact of the M&A transactions on the stable operation of national economy; 
(3) Impact of the M&A transactions on the basic living of the people; and (4) Impact of the M&A transactions on the R& D capacity for key technologies related to the 
national security. WT/TPR/M/264/Add.1 
Page 16 
 
 
   
The reason for approval or disapproval is whethe r the M&A transactions have impacts on national 
security. 
 
Following contents of the security review system are mainly provided in the Notice on Launching the 
Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors promulgated by the General Office of the State Council in February 2011. 
 IV. POLÍTICAS COMERCIALES POR SECTORES  4) SECTOR MANUFACTURERO i) Evolución reciente 
 
En el párrafo 73 el informe menciona que desde 2011, China ha puesto en marcha varios programas 
de financiación y establecido fondos para las "i ndustrias emergentes estratégicas", las cuales detalla 
en la nota al pie n° 47. 
 
38. Podría el gobierno de China explicar en qué consisten estos pr ogramas y fondos?   
 
Answer: Information on measures supporting the development of the "strategic emerging industries" 
are found in the Decision of the State Council on Accelerating the Cultivation and Development of 
Strategic Emerging Industries (State Council Circular  No. 32 of 2010).  The Circular is available at 
the official website of the Central Government of  China.  The fund for development of strategic 
emerging industries mentioned in the Circular wa s established in 2011 as a measure of the Central 
Government.  China will consider to incorporate this  fund into its future subsidy notification based on 
studies and analyses on the relationship between th e fund and the subsidy as defined in the WTO 
SCM Agreement.   
 
ii) Subsectores seleccionados 
a) Automóviles, partes de automóviles y componentes 
 
En el párrafo 81 el informe indica que China se en cuentra elaborando normas industriales para los 
vehículos propulsados por nuevas energías as como  también está en proceso de redacción un 
programa de Planificación Industr ial para estos vehículos. 
 
39. Indicar en qué consisten estas normas industria les y el Programa de Planificación Industrial, 
as como también los plazos para su puesta en vigencia.  
Answer:  
 
1. With regard to standards on new energy vehicles  
The vehicle standard system needs to be constant ly improved according to technological progresses of 
industry development.  It is necessary to accelerate the formulation of standards on new energy vehicles in order to regulate and guide the developm ent of new energy vehicles.  Up till now, China 
has released more than 60 national and industri al standards on new energy vehicles and will 
constantly improve the standard system of new energy vehicles to promote the technological 
upgrading and industrialized development of new energy vehicles. 
 2. Please refer to the Development Plan for En ergy-saving and New Energy Vehicle Industry 
(2012-2020) adopted on April 2012 for details of industrial planning. 
  WT/TPR/M/264/Add.1 
 Page 17 
 
 
  c) Maquinaria y equipo  
 En el párrafo 87 el informe indica que en 2011, el  Ministerio de Industria y Tecnología de la 
Información (MIIT) anunció las Políticas de desarrollo  de la maquinaria agrícola y que, además, se 
otorgan incentivos fiscales para la fabricación y las actividades de investigación y desarrollo 
relacionadas con este sector.    
40. Podría el gobierno de China explicar en qué consisten estas políticas de desarrollo y qué 
incentivos fiscales se otorgan específicamente?    
Answer:  According to Article 30 of the Law of the People's Republic of China on Enterprise Income 
Tax, the research and development fees incurre d by enterprises in the development of new 
technology, new products and new skills may be de ducted when the taxable income is computed. 
According to Article 95 of the Regulations on the Implementation of the Law of the People's Republic 
of China on Enterprise Income Tax, the term additional deduction of research and development 
expenses refers to an additional 50% deduction of  the research and development expenses incurred 
from the research and development of new tec hnologies, new products, and new techniques on the 
basis of the actual deductions within the enterpri se when no intangible asset  has been formed and 
calculated into the current gains and losses.  If in tangible assets have been formed, they shall be 
amortized at 150% of the cost of the intangible assets. 
 
5) SERVICIOS 
ii) Servicios financieros 
a) Sistema bancario 
 
En el párrafo 102, al describir las obligaciones de lo s bancos comerciales en cuanto al cumplimiento 
del Acuerdo de Basilea, el informe clasifica a los bancos en dos categorías:  bancos con importancia 
sistémica y bancos sin importancia sistémica.  
41. Podría el gobierno de China indicar los cuál es son estos bancos y los criterios utilizados 
para esta clasificación?   
Answer:  At present, the CBRC has not yet identified th e list and criteria for the systematically 
important banks, the regulatory frameworks and a ssessment methods for systematically important 
banks are still in the process of study.  Accord ing to Guiding Opinions on Implementing New 
Regulatory Standards for Chinese Banking sector issued by the CBRC, the assessment of 
systematically import banks will mainly consider th ose factors which might include scale, relevance, 
complexity and substitutability etc.  c) Seguros Marco reglamentario y legislativo 
 
En el párrafo 156 el informe menciona que todas l as compañas de seguros que operan en China, sean 
nacionales o con financiación extranjera, deben pagar gravámenes al Fondo de Protección de los 
Seguros de China.  42. Podría el gobierno de China explicar en qué consisten estos gravámenes?  
 
Answer:  Based on Regulatory Measures on Insurance Gu arantee Fund, the insurance guarantee fund 
is divided into property insurance fund formed  by property insurance company payment and life 
insurance fund formed by life insurance company pa yment.  The detailed conditions can be referred to 
Regulatory Measures on Insurance Guarantee Fund. 
 WT/TPR/M/264/Add.1 
Page 18 
 
 
  iv) Transporte 
a) Servicios de transporte marítimo 
Régimen comercial 
 
En el párrafo 212, el informe menciona que en Chin a hay cuatro niveles de reglamentación comercial 
relativa al transporte marítimo.  
43. Podría el gobierno de China indicar cuáles s on estos cuatro niveles y las diferencias que 
existen entre las mismas?  
 
Answer: We are still in coordination with competent author ities to provide responses to this question.   
  
ASEAN 
 
Report by China 
 We note that China's economic growth is attributed  by the opening up of the economy and as a result, 
a growing number of free trade agreements have be en implemented.  However, China also mentions 
that there are five negotiations currently under way. 
 
Would China be able to share which countries or economic blocs she is negotiating with. 
 
Answer: China is pursuing negotiations on possible RTAs/FTAs with:  Australia;  Norway;  
Switzerland;  Iceland;  the Gulf Co-operation Counc il (GCC);  the Republic of Korea.  For further 
information, please refer to:  http://fta.mofcom.gov.cn/topic/encosta.shtml. 
 Report by Secretariat 
 
Page 17, Paragraph 35:  
 
Could China please provide information on Ch ina's assessment on the potential impact of the 
proposed China-Japan-Repub lic of Korea tripartite agreement on ASEAN?    
 
Answer:  China, Japan and Korea have signed their FTA  agreements with ASEAN respectively.  We 
believe that the establishment of China-Japan-K orea free-trade agreement will help to accelerate 
economic integration process in East Asia.  Currently, the negotiation on China-Korea free-trade zone has been launched successfully;  free-trade 
zone negotiation among China-Japan-Korea is also unde r preparation.  We believe that free-trade 
zone among the three countries will contribut e to accelerating economic integration.   
 
 
AUSTRALIA 
 II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES 
1) I
NSTITUTIONAL AND LEGAL FRAMEWORK  
 
1. We note the Secretariat report has concluded th at China has made no major changes to its 
institutional and legal framework regarding trade since 2010 (Paragr aph 1 on page 11 of 
WT/TPR/S/264).  Can China provide advice on how it in tends to continue to reforming its legal and 
institutional framework for trade, including by  implementing the measures outlined in the 
12th Five-Year Plan.   WT/TPR/M/264/Add.1 
 Page 19 
 
 
  Answer: China plans to keep the foreign trade polici es consistent and enforce the coordination among 
the different authorities in respect of stipulating and implementing foreign tr ade policies and laws and 
regulations based on the Foreign Trade Law of th e People's Republic of China. China plans to 
improve and perfect applicable la ws and regulations on such matters  related to foreign trade as 
investment cooperation, intellectual property rights , environment and climate, trade investigation, 
trade remedies, trade promotion and credit management.   
(i) Transparency 
 
2. We note the Secretariat report has concluded that  China has taken only some small steps to 
improve the transparency of its legal and institutio nal framework related to trade, and that many 
aspects of China’s trade and investment policy reg ime remain complex and opaque, leaving scope for 
administrative discretion (Paragraph  4-5 on page 11 of WT/TPR/S/264).  How does China propose to 
further improve transparency of its legal and  institutional framework through government 
information disclosure and public consultations  for drafting regulations and rules?  
 
Answer: China understands that its transparency commi tment for WTO accession is to give a period 
of time after the promulgation of laws, regulations and rules related to or affecting trade in goods, 
trade in services and trade-related intellectual property right or foreign exchange control prior to their 
enforcement.  It is not mentioned in China's comm itment to solicit public opinions for the drafts of 
laws, regulations or rules to be promulgated.  Nevertheless, in order to advance scientific and 
democratic legislation and improve the quality of legislation, the Chinese Government has always 
made unremitting efforts to improve the transparen cy of legislation, promote solicitation of public 
opinions on legislation drafts and expand public participation.  Sin ce 2008, public opinions have been 
solicited for draft administrative laws a nd regulations which are all published on 
http://www.chinalaw.gov.cn except tho se to be kept secret in line with law.  And public opinions have 
also solicited for draft regulations of various departments on their websites or 
http://www.chinalaw.gov.cn.  All parties including  foreign investors can propose opinions and 
suggestions.  
With regard to the transparency of foreign capita l policies, foreign capital authorities have solicited 
public opinions in accordance with laws, regulations  and rules.  When amending the "Catalogue for 
the Guidance of Foreign Investment Industries 2011"  and promulgating the regulations on 
anti-monopoly review and national security review  concerning foreign capital, foreign capital 
authorities solicited public opinions by publishing the drafts on the website and absorbed reasonable 
suggestions from all parties includi ng foreign-funded enterprises and ch ambers of commerce.  Up till 
now, China has not made provisions in relevant laws and regulations on the written documents and 
records of public opinion so licitations and consultations. 
 Therefore, the statement of "many aspects of Chin a's trade and investment policy regime remain 
complex and opaque, leaving scope for administrative discretion" is lack of evidence and incorrect.  
 
(c) Appeal procedure  
 
3. We encourage China make available info rmation regarding appeals procedures and 
complaints by foreign-invested ent erprises (FIEs) that consider their rights have been impaired by 
authorities, which were not made available to the Secretariat for the purposes of the review 
(Paragraph 15 on page 14 of WT/TPR/S/264).  Has there been an evaluation of the pilot programmes 
to establish "administrative reconsideration co mmissions" independent from other government 
agencies?   
Answer: Obvious achievements have been made th rough the pilot programs of administrative 
reconsideration commissions for more than th ree years:  firstly, the public confidence on WT/TPR/M/264/Add.1 
Page 20 
 
 
  administrative reconsideration has been obviously increased.  China has improved the transparency 
and the justice of administrative reconsideration by involving such social force as experts and scholars 
in case hearing and the parties have more trust on the results of administrative reconsideration.  
Secondly, the correction capability of administrative reconsideration is greatly enhanced.  There are 
more such cases in some pilot regions that are corrected by such methods as cancellation, 
modification and confirmation on violation of laws.  Thirdly, the capability of administrative reconsideration to settle disputes is dramatical ly improved.  There are more administrative 
reconsideration cases accepted in the pilot regions and there are more administrative disputes settled 
through administrative reconsideration. 
 
4) F
OREIGN INVESTMENT REGIME  
 
4. We welcome the Chinese Government's inten tion to increase decentralisation and simplify 
verification procedures for foreign investment (Par agraph 42 on page 19 of WT/TPR/S/264).   
Does China have any plans to further liberalise the sectors or thresholds to which these new 
procedures apply?  
 
Answer: In the "Catalogue of Industries for Guiding Foreign Investment" taking effect on 
30 January 2012, there are 473 sectors, 354 items of which are in the "encouraged" category, 80 items 
in the "restricted", and 39 items in the "prohi bited".  The 2012 Catalogue include three additional 
items in the encouraged category, seven items re moved from the restricted category, and one item 
removed from the prohibited category.  In addition,  restrictions on Chinese shareholder percentages 
for some items have been removed from the 2012 Catalogue.  11 items with the requirement on 
shareholder percentage have been removed from the encouraged category and the restricted category.  
The fact indicates the confidence and the determin ation of the Chinese government on further opening 
up.  In future, China will appropriately amend th e Catalogue and stably promote the opening up of 
some industries based on the Chinese economic development and China's commitment for WTO 
accession.  (ii) Regulatory Framework   
 
5. We note the Secretariat has concluded that the main laws and regulations relating 
specifically to FDI in China have remained un changed during the review  period (Paragraph 44 on 
page 19 of WT/TPR/S/264).  We encourage Ch ina to simplify the large number of laws and 
regulations which apply to foreign investment, incl uding the various foreign investment catalogues.   
What plans does China have to fu rther review the industries c onsidered to be restricted or 
prohibited?  
 
Answer: Refer to the answer of question 4 . 
 (iii) Examination and approval procedure  6. For the purposes of transparency, can China to make available information on the details of 
measures to "guide" financial institutions to e nhance credit supports to FIEs, which was also not 
made available to the Secretariat for the purpo ses of the review (Paragraph 57 on page 23 of 
WT/TPR/S/264).  
 
Answer: All Chinese financial institutions have beco me the market-oriented entities with full 
autonomy and the People's Bank does not directly manage credit scale and structure of financial 
institutions.  Financial institutions make their own decisions on whether to grant loans to enterprises 
based on the market principles and the credit conditions  irrespective of foreign-invested enterprises or 
domestic enterprises. 
  WT/TPR/M/264/Add.1 
 Page 21 
 
 
  (d) Tariff-rate quotas   
 
7. Australia notes that MOFCOM and NDRC issu e product-specific implementing rules each 
year (WT/TPR/264 Page 32 Paragraph 30)     
Australia encourages regular information being made publicly available on TRQ allocation, in 
accordance with the requirements establis hed in the WTO Agreement on Import Licensing 
Procedures.  Could China provide information on  recent TRQ fill rates, for the agricultural products 
identified in paragraph 31, particul arly for wool and wool tops? 
 Answer: In 2011, the fill rate for cotton was 100%, for wheat was 13%, for corn was 24.4%, for rice 
was 11.3%, for wool was 100%. 
 
(iv) Import prohibitions and licensing  
8. Australia refers to paragraph 43, page 36 of WT/TPR/S/264.  Could China please provide 
details of the trends in imports for the 32 tar iff lines which were added in 2010 and 21 lines added in 
2011 to the list of products requiring automatic li censes?  Can China explain how this automatic 
licensing regime complies with Article 2, paragraph 2 (a)(i–iii) of the Agreement on Import Licensing 
Procedures?  
 Answer: According to regulations of WTO and based on the "Measures on the Administration of 
Automatic Import License of Goods" (Decree No. 26 2004 of Ministry of Commerce and General 
Administration of Customs), China applies automati c import administration to products like chicken, 
chemical fertilizer, coal and alike.   If relevant industries ask for supervision on all major products of 
large volume involving market stability, food safety a nd trade order, these products will be put into 
the list of administrated products.  Catalogue of goods will be adjusted  dynamically and by the end of 
each year the Catalogue of automatic import license fo r the next year will be released.  The purpose of 
the administration of automatic import license is to enhance real-time monitoring, master the overall situation of import and provide p ublic information to industries. 
 
(vi) Contingency trade measures 
Anti-dumping measures   9. Australia notes that Paragraph 60, page 38 of WT/TPR/S/264 on Anti-Dumping includes a 
statement that "There are no published rules spec ifying how [public interest] consideration must be 
implemented".  Is there any unpublished information that might assist understanding of China’s 
public interest assessment in anti- dumping cases?  Could China provide general information and/or 
information relating to specific cases indicatin g how it addresses the issue of public interest as a 
consideration underlying the decision wh ether to impose a measure?   
 
Answer: In anti-dumping investigations, the Chinese i nvestigation authorities hold public hearings 
and opinion statement meetings among others to  provide adequate opportunities for all parties, 
including involved producers and exporters, the government of the involved country, upstream and downstream enterprises, relevant trade associations as well as importers, to listen to their opinions, 
and seriously take their relevant appeals into account so as to ensure  objective, impar tial and equitable 
investigations 
 
10. Australia refers to Paragraph 62, page 39.  What is the basis for the imposition of 
"corresponding" trade measures, given that the relev ant agreements contain no provision for such 
measures? 
 
Answer: China has not such practice till now. 
 WT/TPR/M/264/Add.1 
Page 22 
 
 
  (vii) Standards and other technical requirements   
 
11. Australia notes that China's application process for developing or revising national standards 
has not changed over the past few years (WT/TPR/S/ 264 Page 47 paragrap h 88).  This process has a 
heavy reliance on endorsed original documents, which can be expensive and time consuming to 
organise.  Could China advise if they are considering refining th e application process to allow for full electronic 
lodgement and to remove administrative requirements  such as the requirement for paper documents 
to be stamped and certified? 
 
Answer: Applications for standard formulation can be filed by any working unit or person.  After 
review by relevant technical committees and indus try authorities, the applications will be submitted 
formally to SAC.  Detailed requirements will be adju sted and prioritized at any time to reflect market 
demands.  12. Australia notes the roles and responsibilities for the various Chinese Government agencies 
with respect to policy, legislation, re gulations and their implementation.  
Could China advise on the systems in place to r eview the roles and responsibilities of these agencies 
to ensure that assessment procedures are not duplicated? (for example, we note that both MOA and 
AQSIQ have responsibilities for the approval of anima l feed and that there is some replication of 
assessment processes by each agency).  
Answer: In the regard of the import approval of the an imal feed, a close cooperative relationship has 
been established between China's State General Ad ministration of Quality Supervision, Inspection 
and Quarantine and the Australian Ministry of Agricu lture, Forestry and Fisheries.  How the Chinese 
Ministry of Agriculture and the State General Admi nistration of Quality Supervision, Inspection and 
Quarantine would work in cooperation with a due divi sion of duty in the supervision of feed import, 
has for many times been introduced to Australia via b ilateral meetings regarding technology.  It is our 
hope that Australia strengthens the inner sharing of  information and should there be any need for 
more information, please contact your colleague in charge of the feed import and export in the 
Ministry of Agriculture, Forestry and Fisheries or the Office of Agriculture in the Australian Embassy 
in China. 
 
If they would like to prolong the comment period of the notification, others members could apply to 
China via the Chinese enquiry point of SPS notificati on (sps@aqsiq.gov.cn).  This year, China has so 
far approved the application by Australia and th e USA to prolong the comment period of the 
Notification No. CHN511 and that by the USA regarding the comment period of the Notification No. CHN522. 
 
(c) Sanitary and phytosanitary measures 
 
Australia notes that China is a member of the Codex Alimentarius (WT/TPR/S/264 page 51 
paragraph 101).    What proportion of China’s food standards is more restrictive than Codex standards?  
13. Where there is no existing domestic standar d, could China consider adopting Codex 
standards until it develops a domestic standard?  
Answer: The Chinese food safety standard system is basi cally consistent with the standards system 
adopted in Codex Alimentarius.  The Ministry of Health stipulates the Chinese national food safety standards based on the results of food safety risk evaluations, the residents' different food 
consumption and diet structure and the actual pr oduction and operation conditi ons and with reference  WT/TPR/M/264/Add.1 
 Page 23 
 
 
  to the international standards.  The national standard s are not totally the same as CAC but we have the 
scientific basis. Currently, Ministry of Health is  clearing and consolidati ng food standards based on 
the Food Safety Law and tries to speed up the s tipulation and amendment of national food safety 
standards. 
 
14. Australia notes that China is a contracting party to the International Plant Protection 
Convention (WT/TPR/S/264 page 51 paragraph 101).   
What systems does China have in place to en sure compliance with IPPC decisions and 
recommendations (for example in the case where the IPPC recommends no phytosanitary 
requirements for processed products, does China have systems in place to rem ove the requirement for 
a risk assessment)?  
Answer: Please refer to AQSIQ department of Animal and Plant Inspection official website 
http://dzwjyjgs.aqsiq.gov.cn/ and St ate Forestry Administration official website http://www.forestry. 
gov.cn/. 
 
15. Australia notes that a country or region that wishes to export a food product to China for the 
first time must first be assessed by AQSIQ (WT/TPR/S/264 page 51 paragraph 103).   
Does China have procedures in pla ce to ensure that trade commences as soon as possible following 
the examination of factors relevant to the safety of the product concerned?  
o Do these procedures ensure that non- s anitary or phytosanitary concerns do not 
interfere with the commencement of trade? 
o When audits of overseas establishments are required, what systems does China have 
in place to ensure that adequate resources ar e allocated to conduct the audits in a 
timely manner? 
 
Answer:  China has established access procedure of th e inspection and quarantine of import food.  
Members can export food to China after go through th e procedures.  The procedure complies with the 
requirements of the SPS Agreement and it will not disturb trade.  16. Australia notes that other Me mbers have used the WTO SPS Committee to raise concerns 
about SPS measures taken or proposed by Chi na (WT/TPR/S/264 page 51  paragraph 102).    
Will China consider providing trading partners w ith extended comment periods in cases where: 
o SPS notifications include links to large documents without English translations 
which, therefore, require time for accurate translations to be made?  
o SPS notifications require extensive consid eration but are released simultaneously 
with a large number of other notifications  so that appropriate consideration is 
difficult?  
 
Answer: If the other members would like to prolong the comment period of the notification, others 
members could apply to China via the Chinese enqui ry point of SPS notifica tion (sps@aqsiq.gov.cn). 
This year, China has so far approved the appli cation by Australia and the USA to prolong the 
comment period of the Notification No. CHN511 and that by the USA regarding the comment period 
of the Notification No. CHN522.  17. Australia notes that AQSIQ introduced the Ch ina Inspection and Quarantine E-cert System 
(China E-cert) in 2010 (WT/TPR/S/26 4 Page 52 paragraph 106).     
Will China E-cert remove the need for original certific ates to be presented at the point of quarantine 
clearance?  
Answer: In order to facilitate the health growth of tr ade, especially the trade of agricultural and food 
product, as well as prevent fake inspection and quar antine certificate, China initiated the Inspection WT/TPR/M/264/Add.1 
Page 24 
 
 
  and Quarantine E-cert System.  In July 2010, AQSIQ signed the Memorandum of Initiating China-
Australia Inspection and Quarantine E-cert Data an d Information Exchange System with Australian 
Department of Agriculture, Fish and Forestry, whic h officially initiated the exchange of inspection 
and quarantine E-cert information. Now, China’ s inspection and quarantine agencies are examining 
Australian inspection and quarantine E-cert and its corresponding original paper certificate, rather 
than invalidating the original paper certificate. 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
 
18. (WT/TPR/S/264 Paragraph 143, p age 59) states that partial rebates of VAT on exported 
products may constitute assistance to downstream pr ocessing of affected products.  Has China taken, 
or does China intend to take, any steps to ensure that VAT rebate arrangements are consistent with 
WTO rules/requirements?  If so, what are they?     
 
Answer: Tax rebate is an international normal practice.  China keeps the rebate rates generally lower 
than the rates actually paid mainly because of the in sufficient fiscal capacity.  We consider that the 
views on the difference between the rebate rates a nd the actually-paid rates constituting "assistance to 
downstream processing of the products affected" is  wrong and cannot be duly supported by either 
theory or practice.  The products entitled to export re bate and the rebate rates can be obtained from the 
website of the State Administration of Taxation. 
 
19. Please provide the number, location and value of investments for which the Export Import 
Bank of China has provided some of the funding with a stipulation that a level of Chinese content be 
achieved. 
 Answer: The Export Import Bank of China has no such a stipulation on providing funding to offshore 
investment projects that a level of Chinese content be achieved based on the relevant credit policies of 
the Export Import Bank of China. 
 
(ii) Subsidies and other government assistance  
 
20. Australia notes that (WT/TPR/S/264 Paragraph 18 9 et seq, page 68) subsidies information is 
not generally available.  What steps is China ta king to make subsidies provided by all levels of 
government more transparent given that this is  also a requirement for the WTO TPRB trade and 
trade-related measures monitoring reports as well?   
 Answer: Subsidy notification entails huge amount of wo rk on information gathering and analysis and 
this is particularly a challenge for China as a la rge developing country.  To fulfill its notification 
obligation under the SCM Agreement systematically, China since its WTO accession has concentrated 
its efforts on notifying comprehensively central pr ograms as a first step, and would then extend its 
efforts and experiences to cover those at the sub-central  level.  Now that substantial progress has been 
made in fulfilling the transparency obligation of th e subsidies at the central level, China will work 
towards incorporating local subsidies in its future notifications.  Although at this stage it is still 
difficult to propose a timetable, China will accelerate its efforts in this regard.  
 
Intellectual Property Rights (IPR)   
(a) Industrial property 
 21. With reference to (WT/TPR/S/264 Paragraph 282,  page 87), given the recent amendments to 
the Patent Law (and its Implementation Regulations ), could China please explain what are the key 
outcomes from these amendments?  We understand t hat patent disclosure was included as one of 
these reforms, and we would be interested to lear n about this particular reform and any key outcomes 
for patent examination and patent owners.   WT/TPR/M/264/Add.1 
 Page 25 
 
 
    
Answer: the major achievements of this revision incl ude the following:  First, we improved the 
conditions of patent grant, revising the novelty stan dard of invention and utility model into "absolute 
novelty".  Second, we strengthened patent protec tion, including the adding of pretrial evidence 
preservation, the increase of statutory amount of  compensation, and bringing of the reasonable 
expenses paid by the oblige to stop the infringement  into the scope of compensation.  Third, we 
improved the appearance design system. Fourth, we reasonably balanced the interests between the 
patentee and the public and improved the compulsory licensing system.  In addition, the new patent 
law explicitly allows parallel imports , and provides the "Bolar exception". 
 About patent disclosure, the modification of the pa tent law added the second clause in the twenty-first 
article, providing that "the patent administration department under the State Council shall release 
patent information completely, accurately and timely, and regularly publish patent gazettes."  It made 
clear provisions for the release of patent informa tion, which will help improve the starting point of 
innovation, reduce repeated R&D activities, and avoid infringing other patents, and ultimately 
promote technological progress and economic and social development. 
 
Trademarks 
 
22. We note that China's Trademark Law has not  been revised since 2001 (Paragraph 298 on 
page 91 of WT/TPR/S/264).  We therefore welcome the revision of the Law.  23. We very much welcome the announcement that the procedure for trade mark reviews and 
dispute settlement will be shortene d to 20 months and t hat trade marks that have not been used for 
three consecutive years will be revoked (Paragraph 304 on page 92 of WT/TPR/S/264).  The latter 
should assist reduce the level of "abusive reg istration" including trademark "squatting".   
a) Does China have any plans to place a time limit on decisions by the Trademark Review and 
Adjudication Board? b) Does China have any plans to move from a "first re gistration" basis to a "first use" basis for 
the use of trademarks? 
 
Answer:  a) China has always been endeavoring to furthe r shorten the review time, but it is difficult to 
precisely estimate the review time as there are an increasing number of applications for trademark review with the continuous growth in the applica tions for trademark registration.  Currently, China 
has no plan to set up the limits on the review time in terms of legislation. 
b) Currently, China has no plan to change the pr inciple of "first registration and prior use". 
 
Geographical indications 
 
24. Australia notes that Geographical Indicati ons (GIs) Paragraph 308 and 311, page 93  are 
currently regulated by the State Trademark Office (as collective marks or certification marks), the 
General Administration of Quality Supervision Insp ection and Quarantine (AQSIQ), and the Ministry 
of Agriculture.  How is this GI regime working with these three different aut horities? Are there any 
plans to rationalise GI protection in China? How are the boundaries between these authorities defined? Is there the chance for any overlap of pr otection? Is there any coordination mechanism for 
enforcement against violation if GIs are reg istered with only one authority?   
 
Answer:  Currently, SAIC, AQSIQ and MOA are join tly studying how to establish the joint 
Geographical Indications certification system. The three agencies have different focuses in GI protection.  The SAIC protects geographical indications by applying collective trademark and ce rtification trademark registration pursuant to the 
Trademark Law.  Corresponding remedies for geographical indication infringement include 
administrative, civil and criminal ones.  The Mini stry of Agriculture has registration administration WT/TPR/M/264/Add.1 
Page 26 
 
 
  for geographical indications of agricultural prod ucts based on administrative rules formulated in 
accordance with the Law on Quality Se curity of Agricultural Products.  The focus of the protection is 
on geographical indication resources of agricultura l products, product quality and traditional farming 
culture. AQSIQ's protection of geographical indi cation focuses on processing, which is based on 
administrative rules formulated in acco rdance with the Product Quality Law. 
 
25. Australia notes that Geographical Indications  (GIs) are currently regulated by the State 
Trademark Office, the AQSIQ and the Minist ry of Agriculture (WT/TPR/S/264 Page 93, 
Paragraph 308).   
 26. Does China publish its GI registers so that foreign individuals or companies that wish to 
register a GI in China are able to refer to them?  
Answer:  Trademark Office shall compile the Trademark Gazette, and release to the public, on a 
regular basis, all the relevant information about tr ademark registration, transfer, change and others, 
including geographical indications.  The State Ge neral Administration of Quality Supervision, 
Inspection and Quarantine shall publish on its official website www.aqsiq.gov.cn the Protection Provisions for Geographical Indica tion Products and other laws and regulations, and shall regularly 
publish the admissibility announcement and ratifica tion announcement of geographical indication 
product protection, and the announc ement of approving enterprises to use the geographical indication 
product names and special marks.  The above info rmation is available for reference by foreign 
individuals or companies.  
27. Could China provide additional information to demo nstrate that, with regard to GIs, China is 
compliant with Articles 22-24 of the Agreement on Trade-Related Aspects of Intellectual Property 
Rights (the TRIPS Agreement)?  
Answer: Currently China provides protection for geogra phical indications mainly in accordance with 
Trademark Law, Implementing Regulations of Trademark Law, Registration and Management 
Measures of Collective Marks and Certification Marks, Administrative Measures of Geographical 
Indications of Agricultural Products, Protection Regul ations for Geographical Indication Products and 
other laws and regulations.  All of  its relevant provisions are consis tent with the TRIPS Agreement, 
and its level of protection has also reached the level required by the TRIPS Agreement. 
 
Specific campaign 
 
28. With reference to (WT/TPR/S/264, Paragraph 325 and 326, page 96) was the national IPR 
enforcement campaign against infringement (that wa s completed in June 2011) a success? The report 
mentions that from the campaign there were 47 inves tigated cases of trade mark violation on internet 
trading that were transferred to the public security authorities for further criminal investigation. Has 
the campaign resulted in any 'successful' criminal prosecutions?  
 
Answer: China has carried out the enforcement campaigns  against IPR infringement and sale of fake 
and shoddy commodities during the period between  October 2010 to June  2011, preventing IPR 
infringement and sale of fake and shoddy comm odities from happening in some regions and some 
sectors and obviously improving the market  order and the operation environment. 
 
It normally takes about one year for the suspected offence cases investigated by the administrative 
enforcement authorities and transferred to the public security organs to be heard in the courts upon 
criminal case registration, ratifying the arrest and prosecution.  From January to April this year, the 
number of the cases prosecuted, accepted and concl uded by the procuratorate authorities and the court 
system is greatly increased compared with that in th e same period of last year, which indicates that the  WT/TPR/M/264/Add.1 
 Page 27 
 
 
  cases investigated and transferred by the administ rative enforcement author ities during the campaigns 
are entering or have entered the criminal judicial proceedings.  
 
29. Can China provide an English copy of the Pr omotion Plan for National Intellectual Property 
Strategy 2011?   
Answer: http://www.nipso.sap?id=11358  Intellectual Propert y Office:  Please refer to the network of 
National Intellectual-Property Strategy for the full te xt in both Chinese and English of the Promotion 
Plan for the Implementation of the National Intellect ual Property Strategy in 2011, and its domain is 
http://www.nipso.cn/onews.sap?/id=11358. 
 
Agriculture policies   30. According to the Secretariat's report (W T/TPR/S/264 Page 10 2 Paragraph 10).  
Under the 13
th Five-Year Plan China Intends to increa se minimum purchase prices for key grains 
(presumably wheat and rice).  What impact does Ch ina expect this to have on market price support 
measures generally?  From China’s perspective how effective is market price support as a means of 
improving productive capacity and comp etitiveness, which are key objectives of the domestic policy.  
How does China differentiate between the impacts of this support with other forms of support 
provided to producers of the same commodities th rough procurement for pub lic stockholdings and 
direct payments?   
Answer: Currently, China adopts the minimum purchase price policy for key grains (presumably 
wheat and rice) mainly for the purpose of ensuring the supply in the market and protecting the farmers’ interests. The policy has helped China resist the impact of the large fluctuation in the 
international grain market on Chinese grain market, pr omoted the continuous rich harvest of grain and 
kept Chinese grain market and price basically stable.  During "the 12
th Five Year Plan", the Chinese consumpti on demands on grain are growing rigidly and 
the farmers' farming cost is increasing year by year.  China will continue to adopt the minimum 
purchase price policy for wheat and rice and to stab ly raise the minimum purchase price in order to 
protect the farmers' interests, to guarantee the grain supply and keep the grain market and price 
basically stable. 
 
31. Australia notes direct payments and input subs idies have increased sign ificantly  in recent 
years, with new programs being introduced (W T/TPR/S/264 paragraph 23, page 104 and paragraphs 
25 and 27 page 105).  The Secretariat's report notes t hat the "New Variety Extension Payment scheme 
may be operating as a direct payment linked only to planted area."  Could China please confirm 
whether this scheme is linked to planted  
 
Answer: The new variety extension payment for such agricultural products as wheat and maize is 
made based on the planted area.  China has made the new variety extension payment for agricultural 
products as the amber box support measure for specifi c products in the agricultural domestic support 
data notified by China to WTO.  
32. Australia notes that all farmland in China is owned by the State or by collectives, and 
administered by local authorities (WTO TPR Report p. 102).  
 a. When will China's "Decision on Certain Issues Concerning the Advancement of Rural Reform 
and Development", announced in 2008, be translated into law?   And how will this affect land rights? 
 
Answer: It is specified in the Decision on Certai n Issues Concerning the Advancement of Rural 
Reform and Development  adopted by the Third Plenary Session of the 17th CPC Central Committee WT/TPR/M/264/Add.1 
Page 28 
 
 
  in 2008 that, "the current land cont ractual relationship shall remain th e same in order to grant farmers 
with more sufficient and guaranteed land contractua l operation right."  This provision is consistent 
with the relevant provisions in China's current  constitution and laws and can better stabilize the 
farmers' anticipation on land operation and w ill not affect the nature of land ownership. 
 
Import measures   33. The secretariat report notes that the average ta riff for agricultural goo ds is almost double 
that for all other products (Paragraph 15 & 16 on page  103 of WT/TPR/S/264).  As a net importer of 
agricultural products can China provide an explana tion of why tariff protection is so high for 
agricultural products in comparison with other goods?  
 
Answer: Agriculture is the basis of national economy , involving national food security and social 
stability.  Therefore, it is normal that the average tari ff for agricultural goods is higher than that for all 
other products.  China is a deve loping country having the largest population, so agriculture becomes 
more important in China than that in other countri es in terms of such social functions as food security 
and farmers' living.  However, China has made great contribution to the world agricultural trade 
liberalization during China's WTO accession.  China' s tariff for agricultural goods is not high, which 
is only ¼ of the average tariff in the world with sm ooth tariff structure and simple tax system. China 
is also one of the openest agricu ltural goods market in the world. 
 
34. Australia notes that quotas are allocated based  on the volumes requested, previous imports, 
production capacity, or on a first-come, first-served  basis, with State-trading enterprises continuing 
to dominate access to tariff quotas  (WT/TPR/264 Page 103 paragraph 18). 
 
35. Could China provide information to demonstrate that this process allows non-State-trading 
enterprises with sufficient ab ility to increase quotas in response to growing business needs 
 
Answer: Since the accession to the WTO, China has honour ed its commitments of all kinds. Increase 
quotas are not only related to the increase of trad e needs, but also to the amount of applying 
enterprises as well as the total amount of the distribution of that year. 
 
36. What arrangements does China have in place to reallocate unused quota? 
 
Answer: China's unused quota will be reallocated accordi ng to rules of "Interim Measures for the 
Administration of Import Tariff Rate Quotas of Agricultural Products".  
 
37. Australia notes that China’s last notification re garding the administration of tariff quotas was 
made in 2003 (Paragraph 18 on page 103 of WT/TPR/S/264. What are the reasons for the delay in 
notification and when will the subse quent notifications be made?   
 
Answer: China's notification regarding the administra tion of tariff quotas has no change since last 
notification.  
Internal price supports 
 
38. Australia notes that provincial governments set  the purchase prices for sugar cane and that 
this price has risen steadily over the past 6 yea rs (Paragraph 34 on page 106 of WT/TPR/S/264).  Are 
any controls or requirements placed upon pr ovincial governments when setting these prices?  
 
Answer: At present, the purchase price for sugar cane in main producing areas is determined by 
provincial governments based on the actual situat ion, while in non-main producing areas, it is 
determined fully liberalized by the market.  WT/TPR/M/264/Add.1 
 Page 29 
 
 
  Support levels  
 39. Australia notes that the most recent notifica tion on domestic support to the Committee on 
Agriculture was in October 2011 for the ca lendar years 2005-08 (W T/TPR/S/264 Page 107 
Paragraph 38).  When will domestic support no tifications for 2009 onwards be notified?  
 
Answer: China is carefully preparing the national agricultural domestic support data for the years 
after 2008 and will submit the notifications after the relevant data is collected and consolidated. 
 
SERVICES 
Banking  40. Para 98 on page 122 of the Secretariat re port document WT-TPR-S-264-05 refers to the 
market structure of China's banking sector, which is dominated by state-owned banks.  The report 
says the five largest state-owned commercial banks (SOCBs) accounted for about 50% of the total 
assets of all financial institutions during the review  period.  Separately, Australia understands the 
overall market share in China of foreign banks in terms of total assets remains at around 2% (see 
Australian Chambers of Commerce in China – Aust ralian Financial Service s Business in China -
Issues Paper, 2011 Publisher?).  For foreign banks in  China, a significant constraint on their ability 
to grow is the current limit of two investments in  Chinese-funded financial institutions (i.e. those 
financial institutions set up upon approval of China Banking Regulatory Commission (CBRC)) by foreign financial firms.  The Secretariat repor t notes that recent policies encourage private 
investment in city commercial banks (CCBs).  Coul d China indicate whether it is considering relaxing 
the current limit of two investments in Chinese-funded financial institutions?    
Answer:  At present, the opening-up of China's banking in dustry is basically in line with its economic 
development, market growth and financial regula tion competence.  However, Chinese banks are still 
in an initial stage to introduce overseas investors,  there is still a room for deepening mutual 
cooperation, the international fina ncial situations remains turbulen t, and the financial crisis has 
exposed various drawbacks of the global financial system in risk management and business model.  
Therefore, the restrictions on foreign financial in stitutions meet the requirements of prudent banking 
regulation, aim to protect the interests of depositors  and safeguard stable financial order, and comply 
with the principle of prudent regulation provided in the  Annex on Financial Services  of GATS .  
Currently, China is not in the position to relax th e limitation of foreign equity investment. Chinese 
banking regulators will guide Ch inese- and foreign-funded banks to  further expand the scope and 
depth of cooperation and compete on an equal basis based on comparative advantages, in a bid to 
promote mutual progress and common development.   
41. WT/TPR/S/264 (para 100 on page 122 of th e Secretariat report) refers to foreign 
participation in local currency busin ess.  Australia is concerned that current waiting periods for 
Renminbi Business Licences (based on 3 years for operation and 2 years profitability) are impeding 
business scope for foreign banks in China.  Furt her, recent regulatory changes have meant the 
waiting period for Hong Kong, China and Chinese Taipei banks has been reduced to 2 years 
operating history and 1 year profitability, creating po tentially a different starting point among foreign 
banks.  Can China indicate if it is considering st andardising these requirements for all banks?   
 
Answer: According to China's services schedule, qualifie d foreign financial institutions which wish 
to engage in local currency business shall meet specific requirement, namely three years business 
operation in China and being profitabl e for two consecutive years prior to the application.  We believe 
the situation for banks from Hong Kong, China and Chinese Taipei which engage in the local 
currency business is a little bit diffe rent, for the reason that these two regions have signed FTAs with 
mainland China.  Currently, we don't have pl an to change the relevant requirements. 
 WT/TPR/M/264/Add.1 
Page 30 
 
 
  42. Australia understands that China liberalised  relevant regulations on 1 May 2012 allowing 
participation by foreign insurers in the statutory (mandatory) third party motor vehicle insurance 
market subject to approval by the China Insu rance Regulatory Commission (CIRC).  Can China 
indicate what factors CIRC will have regard to in  approving applications by foreign insurers? Will 
equity restrictions remain on foreign-invested insure rs wishing to participate in this business sector, 
effectively limiting a foreign insurer to holding no  more than a 20 per cent interest in a foreign 
invested enterprise engaged in statutory third party motor vehicle insurance business?   
 
Answer: CIRC will fairly and impartially examine th e applications submitted by domestic and 
foreign-invested insurance companies in accordan ce with the Regulation on Compulsory Traffic 
Accident Liability Insurance for Motor Vehicles.  In accordance with China' s commitments made at 
the WTO accession, China will permit foreign non-life in surance companies to set up foreign-invested 
subsidiaries and eliminate the restrictions on the ty pes of enterprises” within two years after China’s 
WTO accession. 
 
Equity market  
 
43. WT/TPR/S/264 (para 136 on page 131 and 132) refers to the introduction of an "International 
Board" on the Shanghai Stock Exchange pursuant to which eligible foreign enterprises (registered 
outside China) are to be allowed to be listed on Shanghai Stock Exchange at an "appropriate time".  
Could China indicate what enterprises are to be  regarded as "eligible" and provide an indicative 
timeframe for introduction of this measure?   
Answer:  The construction of international board in st ock exchange has currently made preliminary 
progress.  And, the related regulatory measures and dr aft rules have been drawn up preliminarily.  To 
be sure, international board cons truction is a very complex systematical project, which involves the 
cooperation of various fields, such as law, accounting,  foreign exchange control, investor protection, 
intermediation management, and cro ss-border supervisory cooperation.  More questions need to be 
further analyzed, researched and resolved.  Curren tly, the timetable of international board has not 
been carried out.  CSRC will continue to negotiate  with related department s and move the system 
design and technical preparation forward steadily.  In  terms of the "appropriate" companies, our initial 
view is that they should be the qualified offshore companies in acco rdance with the listed 
requirements of international board.  As for the "elig ible" enterprises are concerned, we are not in the 
position to identify the specific criteria in this stage sin ce the relevant regulations are not in place yet.   
 Regulatory and legislative framework  44. We note that (WT/TPR/S/264 page, 136, paragraph 159) of the re port mentions an investment 
cap for foreign securities firms.  Does China have any plans to increase this beyond 25% without 
requiring foreign securities firms to lose their status  as a 'domestic' provider of securities?  What 
category of foreign invested securities firms would re main subject to the lower foreign investment cap 
referred to in paragraph 159 in the future?    
 
Answer: paragraph 159 of Chapter IV of the report seems to discuss about the in surance service, so 
we don't understand the Australian question.  Other   45. We also note that there were some recent announcements on securities in the US-China 
Strategic and Economic Dialogue (SED) process  that  "China is to amend relevant regulations to 
allow foreign investors to hold up to a 49% equ ity stake in securities joint ventures, which are 
allowed to engage in underwriting and sponsoring of stocks (includi ng common share denominated in 
RMB and foreign share) and bonds  (including government bonds and corporate bonds) and to allow  WT/TPR/M/264/Add.1 
 Page 31 
 
 
  qualified securities JVs which have been in on-going  operation for no less than two years to acquire 
additional licenses and broaden their business scope.  China commits to allow foreign investors to 
hold up to a 49% equity stake in futures broker join t ventures."  What is the anticipated timeframe for 
implementing this SED commitment? 
 
Answer: We thank Australia for its attention to the achievements of SED, the implementing measures 
for SED achievements is under way, we believe the re levant policies will be introduced in the near 
future. 
 
46. As part of China's strategy of introducing competition into the telecommunications market, 
does China plan to allow resale of basic telecommunications and internet services? 
 
Answer: In the Telecommunications Regulations promulga ted in 2000, there is a category of "resale" 
in the telecommunications business classification.  Ho wever, no enterprise has ever applied for this 
business and no license has ever been issued.  Afte r China's WTO accession, resale were not be listed 
as a separate business but were deemed as way of business operation based on the principles of WTO 
on the classification of telecommunication business and the explanations in the relevant reference 
documents on resale and in the consideration that the basic conditions to carry out the resale business 
are not met.  
 
We must determine whether there is any necessity  to separately set up a business category for resale 
in future based on the studies on such matters as th e type of the resale and the network environment, 
the market environment and the policy environment for various resale businesses. 
 
47. Can China advise what the usual approval period for foreign companies seeking value-added 
services licences is?  Is China undertaking any ac tivities to encourage invest ment in these value-
added telecommunications services, especia lly for internet service provision?  
 
Answer: In accordance with the Provisions on the Administration of Foreign-funded 
Telecommunications Enterprises, where the foreign fund invests in the basic telecom businesses or in 
value-added telecom businesses within the area of more than one province, autonomous region or 
municipality directly under the Central Governme nt, the competent authorities shall examine the 
application on the date when it receives the applicat ion and finish the examination within 180 days in 
case of basic telecom business; or within 90 days in case of value-added telecom business.  If approval is to be granted, an Examination Decisi on of Foreign Investment in the Telecommunications 
shall be issued; if the application is to be disa pproved, the applicant shall be informed in writing 
together with a statement of the reasons.  If the foreign fund invests in provincial-level va lue-added telecomm busine ss, the provincial-level 
telecom administration authority shall sign and issu e the opinions within 60 days from the date when 
it receives the application.  If approval is to be gr anted, the application shall be transferred to the 
competent industrial and information department un der the State Council.  The competent industrial 
and information department under the State Council sh all finish the examination within 30 days from 
the date when it receives the application.   The competent commerce authority under the State Council and the competent commerce authority 
under the provincial-level People's government shall fi nish the examination within 90 days from the 
date when they receive the contract and the ar ticles of association of the proposed foreign-funded 
telecom enterprise.  If approval is to be granted,  a Certificate of Approval for Foreign-invested 
Enterprises shall be issued;  if the application is to  be disapproved, the applicant shall be inform in 
writing together with a statement of the reasons.  The Chinese partner of the proposed foreign-funded 
telecom enterprise shall bring the Certificate of Approval for Foreign-invested Enterprises and apply WT/TPR/M/264/Add.1 
Page 32 
 
 
  for the Telecommunication Business Operation Licen se with the competent commerce authority under 
the State Council.  
In accordance with the Provisions on the Admini stration of Telecommunications Enterprises, the 
competent telecom administration authority shall fi nish the examination on the application for the 
basic telecom business within 180 days from the date when it receives the application;  and finish the 
examination on the application for the value-adde d telecom business within 60 days from the date 
when it receives the application 
 
China encourages the development of value-a dded telecom business, including the provision of 
network service.  Currently, all the other value- added telecom businesses have been open to the 
private capital except the domestic multi-party tel ecommunication business which is on the trial run.  
There are about 25,000 value-added telecom enterp rises in China now, more than 90% of which are 
private enterprises. 
 
Appendices   
 a) China is unbound on national treatment on mode 3 (commercial presence) and has 
limitations on market access requi rement for joint ownership and management of schools.  Could 
China explain what measures it is taking to lib eralise trade in education services, and particularly in 
relation to provision of education servi ces by foreign providers within China? 
 
Answer: After accession to the WTO, China has faith fully implemented the commitments in 
education services sector, the scope of opening up h as been constantly expanded, and the education 
cooperation and communication with other countries is further enhanced.  The National Plan of 
Education Reform and Development in Medium a nd Long Term (2010-2020) sets a separate chapter 
for "Broadening the Opening-up of Education Serv ices", which is a guideline for education reform 
and development in China for the specified decade. 
 Chinese-foreign cooperation in the sector is developi ng rapidly in a variety of forms, and the scope 
thereof has been constantly widened.  At presen t, 1205 institutions and projects of Chinese-foreign 
joint schools have been approved and established by  now, covering 26 provi nces, autonomous regions 
or municipalities directly under the Central Government.  China allows schools and other education institutions to invite or employ qualified foreigners to 
provide education services in China.  The number of  foreign teachers employed by higher education 
schools is steadily increasing.  China doesn't impose any restriction on Chinese citi zens in respect of studying or accepting other 
education services abroad.  In recent years, the number of students studying abroad is increasing 
rapidly and constantly.  China has become one of the largest source countries of international 
students.  
 China has established education exchange and cooperation relationship with 188 countries and 
regions and has signed mutual recognition agreement on academic degrees or certificates with 35 countries and regions, which further promotes the liberalization of the Chinese education market. 
 b) Current regulatory requirements for foreign providers are discriminatory, lack transparency, 
involve lengthy approval periods, and do not prov ide for review.  Could China advise when it 
proposes to review its regulations relating to Si no-Foreign Cooperative Education to address these 
issues?  
Answer: First, please specify in what terms "current regulatory".   WT/TPR/M/264/Add.1 
 Page 33 
 
 
  Second, the Regulations on Sino-Foreign Coopera tive Education and the implementation measures 
thereof are still the main policy basis for Sino-forei gn education projects so far.  The examination and 
approval procedures are explicitly specified in Ar ticles 15, 18 and 19 of the Sino-Foreign Cooperative 
Education and Article 19 of the Implementation Measures for the Sino-Foreign Cooperative 
Education.  The relevant policies and examinati on and approval status are timely announced on the 
official website of the Ministry of Education.  Of course, there will appear some new conditions  and new problems during the development of the 
Sino-foreign cooperative education.  The Chinese Government will also summarize the experience 
learned and improve the work procedures in the daily work in order to guaran tee the interests of the 
Chinese and foreign education in stitutions and the students. 
 
c) China's restrictions on trade in education servi ces extend to a lack of clarity over processes 
for remitting funds overseas and limitations against foreign education agents.  Can China outline 
measures it is taking to address the lack of clarity? 
 
Answer: As prescribed in the Articles 5 and 12 of  the "Regulations on Foreign Exchange 
Administration", the State imposes no restrictions on international payments and transfers of current account transactions for trade in services including education services.  But the foreign exchange 
receipts and payments for current account transac tions shall be based on bona fide and legal 
transactions.  Thus, China has ensured the clar ity over processes for remitting funds overseas and 
doesn't maintain limitations agai nst foreign education agents. 
 
d) Are there other regulations governing educ ation services which have not been identified in 
the Secretariat's report? 
 Answer: The main laws and regulations on education ha ve been specified in the report.  All the 
relevant education laws and regula tions including 6 laws and regula tions have been published on the 
official website of the Ministry of Education.  
 
BRAZIL 
 PART I:  QUESTIONS REGARDING THE SECRETARIAT REPORT 
 
I. ECONOMIC ENVIRONMENT   Page 1 (Paragraph 2)  
 
The Secretariat assesses, as part of various econom ic imbalances, that China maintains its heavy 
dependence on overseas demand for its manufactures ex ports to sustain economic growth.  Could 
China comment on this assertion considering:   
(i) the weight of investments in its GDP growth model; (ii) the rebalancing process of its economy;  and; (iii) the future role of trade in a rebalanced economic model?  
 Answer:  In 2011, the contribution rate of capital formation to GDP was 53.3% which spurred the 
economic growth by 4.9 percentage points;  the contribution rate of final consumption was 50.8% 
which spurred the economic growth by 4.7 percentage points;  while the net export contribution rate 
was -4.1%, with a negative pull of 0.4 percentage  points.  Thus, domestic demand is still the main 
driving force of China's economic growth.  Sin ce its WTO accession, China's exports maintained a 
rapid growth, but of which nearly 50% of exports was processing trade.  China's import growth was 
also fairly fast, providing a broad market space fo r the countries in the worl d, China has become the WT/TPR/M/264/Add.1 
Page 34 
 
 
  largest export market of Japan, South Korea, the ASEAN, Australia and South Africa, the second 
largest export market of the EU, and the third larg est export market of the United States.  On the 
whole, by balancing out the import and export, the net export contribution to China's economic 
growth is limited. 
 The 12
th Five-Year Plan made it clear that China's economic development will take accelerating the 
transformation of the pattern of economic deve lopment as the main thread, which requires a 
consumption, investment and export-led economic growth, taking the expans ion of consumer demand 
as a strategic focus to expand domestic demand, strengt hening the consumption ability of its residents, 
improving consumer expectations, promoting the upgrading of consumption structure, and further 
releasing the consumer potential of urban and rural resi dents.  In addition, we will adjust and optimize 
the investment structure, encourage expansion of  private investment, promote positive interaction 
between investment and consumption, and comb ine expanding investment, increasing employment 
with improving people's livelihood to create the final demand. 
 
Meanwhile, China will continue to implement a more proactive strategy of opening up and take active 
expansion of imports as an importa nt part of the transformation of foreign trade development mode to 
promote the balanced development of foreign trade,  and promote the balanced  development of foreign 
trade to boost the transformation from scale expansion to  the quality and efficiency.  It is expected 
that in the future the development of foreign tr ade will play an important role in boosting China's 
economic development, especially in improving th e quality and efficiency of economic growth. 
 
Page 2 (Paragraph 3)  
 
The Secretariat claims that, under the period und er review, China adopted few measures to liberalize 
its international trade and investment.  Could Chin a comment on that assessment in light of China's 
10 years of WTO accession and in comparison with the liberalization record of other WTO Members?   
 
Answer: We believe that the description in the Secret ariat Report contains some misunderstanding 
about China.  In fact, over the past two years China did not stop its pace of opening up.  On the 
contrary, the Chinese Government adopted a series of substantive initiatives to expand market and 
investment access, and the specific contents have been  described in detail in the Statement of Chinese 
Government Policies.  
Page 9 (Paragraphs 20, 21, 22)  
 
The Secretariat analyses China's role  in Asia's supply and processing c hains, as well as China's trade 
surpluses with the USA and Europe.  How does China assess the impact of trade restrictions in those 
markets on Asia's supply and processing chains as a whole?  
 
Answer: In the context of current divi sion of labour in Asia, China, as a manufacturing base in Asia 
and the world as a whole, imports spare parts and other intermediate products from Chinese Taipei, 
South Korea, Japan and other regions, and exports  finished products after processing and assembling 
to the United States, Europe and other regions, form ing a situation of trade deficit with other Asian 
countries and a surplus with the United States and Europe.  As a processing and manufacturing link of the international and Asian chain of division of la bour, China has objectively promoted the upgrading 
of other Asian countries towards higher technological  content and higher value-added industries, and 
has boosted the deepening of the division of labour a nd improved efficiency of resource allocation in 
Asia.  At present, the impact of international fina ncial crisis has not been completely eliminated, and 
trade restrictions of the United States and European markets are on the rise, this situation has not only 
squeezed China's export space but also affected Chin a's imports of intermediate products from other 
Asian countries, and will further affect the overa ll effectiveness of the Asian supply and processing 
chain.  WT/TPR/M/264/Add.1 
 Page 35 
 
 
   
II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES   
(1) INSTITUTIONAL AND LEGAL FRAMEWORK    
(ii) Central-provincial relationships       
Upon its accession to the WTO, China has pledged t hat trade policies, regulations and measures at 
the local level would also be consistent with Chin a's obligations in the WTO, including the one with 
regard to their transparency.  Nevertheless, me asures adopted by local governments are seldom 
notified to the relevant WTO bodies.  What steps are being taken to ensure local trade legislation will 
be duly notified to the WTO?  
 
Answer:  After China's accession to the WTO, China has sorted out trade-related laws and regulations 
at local level in a comprehensive way in order to make them consistent with WTO rules.  China has 
fulfilled its notification obligation of related laws and regulations in line with its commitment on 
transparency.  With regard to subsidy notifica tion at local level, China is now accelerating its 
domestic coordination.   
(3) TRADE AGREEMENTS AND ARRANGEMENTS 
 
Page 17 (Paragraph 31, 32, 33, 34) 
 
Critics of China's FTAs/RTAs claim that most of them, particularly with ASEAN, constitute FTA-lite 
(e.g. The Economist, Banyan, Trading Strategies, 19 May 2012).  Could China comment on that assessment?   
 
Answer: China's RTAs with its free trade partners are in line with relevant WTO rules. 
 Under the framework of China - ASEAN Free Trade Area, more than 90% of the products between 
China and six old members of ASEAN implemented a zero tariff.  The average tariff of China to 
ASEAN countries has decreased from 9.8% to 1%, and the average tariff rate of the six old members 
of ASEAN to China has decreased from 12.8% to 0.6%.  The four new members of ASEAN will also 
achieve the target of zero tariff for 90% of products by 2015.  The China - ASEAN Free Trade Area was officially established in 2010  and has played a positive role 
in promoting bilateral trade and investment.  In 2011, the volume of trade between China and ASEAN 
countries reached US$362.9 billion, 6.6 times th e trade volume of 2002 when "China - ASEAN 
Comprehensive Economic Cooperati on Framework Agreement was first signed with an average 
annual growth rate of 20%.  At present, China is ASEAN's largest trading partner and ASEAN is 
China's third largest trading partner. Meanwhile, b ilateral investment between China and ASEAN also 
grew rapidly.  By the end of 2011, the Chinese direct investment in ASEAN was US$14.4 billion, 
being the fourth largest source of foreign investme nt of ASEAN;  and ASEAN direct investment in 
China reached US$70 billion, being the third largest  source of foreign investment of China.  In 
addition, considerable progress has been made in b ilateral cooperation in infrastructure, agriculture, 
tourism, economy and technology,  the SPS/TBT and other areas. 
 Page 17 (Paragraph 35)  
 
China, Japan, and the Republic of Korea announced  in Beijing on 13 May 2012 negotiations a the 
tripartite trade agreement.  (i) Could China give some indication of the sc ope of such agreement as envisaged by the 
3 countries?   WT/TPR/M/264/Add.1 
Page 36 
 
 
  Answer: According to the conclusions and recommendations  of the Joint Study Report, China, Japan 
and Korea FTA negotiations will include trade in  goods, trade in services, investment and other 
issues. 
 
(ii) How does the future tripartite ag reement relate to the ASEAN+3 processes? 
 
Answer: The free-trade area of China, Japan and Sout h Korea constitutes an important part of 
economic integration in East Asia. Over a long pe riod of time, relevant countries have put forward 
many choices for regional economic cooperation in E ast Asia, including 10+3, 10+6, RCEP (Regional 
Comprehensive Economic Partnership), etc. the free-tr ade area of China, Japan and South Korea will 
greatly promote the 10+3 process.  
(iii) How does the future negotiations and agreem ent relate to the Trans-Pacific Partnership 
(TPP)?  
 Answer: At present, a variety of economic integration paths co-exist in the Asia-Pacific region.  
China is open to all types of cooperation committ ed to achieving the goal of regional economic 
integration and advocates all economies should ch oose their own paths according to their national 
conditions and deve lopment levels. 
 
We are of the opinion that all types of regional economic cooperation, including TPP, should adhere 
to the principle of non-discrimination, inclusiveness and transparency, and form a useful complement 
to the multilateral trading system instead of replacing it.  The Economic liberalization and integration in the Asia-Pacific region should be "All roads lead to 
Rome", having a variety of channels. TPP might be a choice, 10+3 (ASEAN + China, Japan and 
South Korea) and 10+6 (ASEAN + China, Japan and S outh Korea, India, Australia and New Zealand) 
might be another, which have already had a good  foundation, since ASEAN has already reached a 
free trade agreement with the above-mentioned six countries respectively.  (4) F
OREIGN INVESTMENT REGIME  
 Page 22 (Paragraph 54) 
 
What was the share of loans to  foreign-invested enterprises in th e total credit extended by domestic 
banks from 2008 to 2011?  
 
Answer:  Currently, there are no statistics on the loans provided by financial institutions, which are 
classified by the registered types.  III. TRADE POLICIES AND PRACTICES BY MEASURES    (1) M
EASURES DIRECTLY AFFECTING IMPORTS  
(i) Customs procedures, valuation and rules of origin   Page 24 (Paragraph 5) 
 
Even though advanced written rulings are allowe d by Chinese Customs Law, economic operators 
complain that customs officials refuse to put them in written form .  What is the Chinese government 
planning to do in order to enforce the law on adv anced rulings by local customs officials?  
 
Answer: The administrative rulings are generally bindi ng decisions on Customs affairs related to 
actual import/export activities made by the Genera l Administration of Customs or institutions  WT/TPR/M/264/Add.1 
 Page 37 
 
 
  authorized by the GAC, and announced by the GAC in  a unified manner, being  equally authentic as 
customs regulations.  Local customs has no power to make an administrative ruling. 
 Page 26 (Paragraph 12)   
 
Can you provide data concerning the percentage of u se of transaction value for customs valuation in 
2010 and 2009?  Importers often complain that many  local customs officials tend to use price 
references as a method so it would be useful to verify if the use of transaction value has been 
increasing in the last years.   
 
Answer:  There is no such a problem as price references or the use of price references in direct 
valuation by Chinese Customs.  The Chinese Custom s verifies and determines the duty-paid price in 
strict accordance with the principle of transaction value of the WTO Valuation Agreement.  Over the 
years, the percentage of using transaction valu e for Customs valuation in China is around 99%. 
 
(ii) Tariffs 
 Page 27 (Paragraphs 23 and 24)     
 
In 2012, is the Chinese Government planning to o ffer new interim tariff reductions?  Which products 
will be subjected to such reductions?   
 
Answer: For specific information on interim tariff reductions please refer to the Circular of the Tariff 
Commission of the State Council on the Tariff Execution Plan in 2012 (Shui Wei Hui [2011] No. 27).  Page 27 (Paragraphs 23 and 24)     
 
How are interim tariff reductions decided by th e Chinese Government?  Which Chinese organs are 
entitled to introduce requests for tariff changes?  
 Answer:  The Tariff Commission of the State Council determines the goods, tariff rates and time 
limits for interim tariff s, which are made on the basis of the conditions of national economic 
development, as well as the production, consum ption, import and expor t of related products. 
 
(iv) Import prohibitions and licensing  
 
Page 35 (Paragraph 43)     
 
China has been increasing the list of products which are subjected to automatic licensing.  If the 
application for the license is correct, how much tim e does it take for the relevant Chinese authorities 
to approve the license?  
 
Answer:  according to provisions of Article 10 of th e Measures for the Administration of Automatic 
Import License for Goods (Order No.26 of the Ministry of Commerce and the General Administration of Customs), after receiving correct and complete application for the license, the relevant issuing authorities should issue the Automatic Import License in no more than 10 working days. 
 
Page 35 (Paragraph 43) 
 
How much time in advance to cu stoms clearance can the economic operator apply for the automatic 
license? 
  WT/TPR/M/264/Add.1 
Page 38 
 
 
  Answer: According to provisions of Clause 2 (a)(ii) of Article of the WTO Agreement on Import 
Licensing Procedures, the application for licenses can  be submitted on any day in advance to customs 
clearance.  Article 19 of the Measures for the Admi nistration of Automatic Import License for Goods 
(Order No. 26 of the Ministry of Commerce and the General Administration of Customs [2004]) 
states that the Automatic Import License is valid in  solar calendar year, with a validity period of 
6 months.  Importers can apply for the automatic license based on actual trad e situation according to 
the above-mentioned provisions.  (v) State trading  Page 35 (Paragraph 44)  
 
Important part of the Chinese imports and exports of agriculture products are under the control of 
state trading enterprises.  Is th e Chinese Government preparing a ne w and full notification on its state 
trading system to the Committee on State Trading Enterprises?  
 
Answer:  The state trading regime of China, including  the products covered and the STR enterprises, 
did not have significant changes except that a coup le of products were no longer subject to state 
trading administration.  Besides, for a few products s ubject to state trading, some statistics required in 
the notification are not produced officially in China.  In view of these, China did not submit its state 
trading notification.  That said, if members expect China to submit the notification despite of the few 
changes, China will try to submit the notification as soon as possible.  
Page 35 (Paragraph 45)   
 
Even though MOFCOM publishes on an annual basis the amount of quotas of the products whose 
imports and exports are made throug h state trading, there is no statistical data on the actual trade.  
Can you provide the latest data on the actual imports/ exports of products subject to tariff quotas?     
 
Answer: Please refer to the answer of the above question. 
 
(vi) Contingency trade measures  
 Page 39 (Paragraph 62)   
 
What are the objective criteria used to determine if a trading partner has discriminatorily imposed AD measures on expor ts from China?  
 
Answer: Up to now, China has no practice of applying AD measures according to Article 56 of the 
Anti-dumping Articles.    Page 39 (Paragraph 62)     
 
What would be the corresponding measures to be adopted by the Chinese government if the Chinese 
government considers that a trading partner has discriminatorily imposed AD measures on exports 
from China?  
 
Answer: Up to now, China has no practice of applying AD measures according to Article 56 of the 
Anti-dumping Articles.     WT/TPR/M/264/Add.1 
 Page 39 
 
 
  (vii) Standards and other technical requirements       
 Page 46 (Paragraph 85)     
 
With regard to the trade standards and local st andards, can you please comment on their process of 
elaboration and adoption?  The me ntioned paragraph seems to imply that the State Council is 
responsible only for the national standards.  Does the central government have any influence in their 
development and adoption?   
 
Answer: The formulation plan and proposal of trade standards are issued by relevant executive 
agencies of the State Council.  These standards ar e approved, numbered a nd published in a unified 
way.  Requirements of the formulation procedure are the same as national standards and all trade 
standards shall be submitted to national standardization authorities as records. 
 Page 47 (Paragraph 87)      
 
Is there in place a notification requirement to the Chinese central government of the local standards 
which are adopted at the provincial level?  Why are they seldom notified to the WTO relevant 
Committee?   
 
Answer: Article 6 of the Standardization Law of PRC s tipulates that in case there is no national or 
local standard, where unified standards on safety an d hygiene industrial products are in need, local 
standards can be formulated by local standardization authorities at that province, autonomous region or municipality.  These local standards shall be su bmitted to national standardization authority and 
executive agencies of the State Counc il as records and shall be terminated immediately after national 
standards or trade standards are published.  Chin a will further enhance notification of compulsory 
local standards according to its obligation under the WTO.    
Page 48 (Paragraph 91) 
 
Taking into account that local standards for sa fety and hygiene are in fact mandatory in the 
administrative region in which they are developed, it seems important that the Chinese Government 
keep track of them.  Why the Chinese authorities could not provide data on the number of local 
standards developed in 2010,  as shown on Table III.5?   
 Answer: Currently no data is available for 2010.  
 
Page 48 (Paragraph 92)     
 
According to the figures presented,  the majority of Chinese national standards are not based on 
international standards, as disposed in Article 2.4 of the TBT Agreement.  What are the steps that the 
Chinese Government is taking to ensure it fulfills this obligation?   
 
Answer:  Adopting international standards is one of th e important technical and economic policies of 
China, which will be further promoted to enha nce harmonization between Chinese national standards 
and international standards.  Emphasis is given to standards for general use, human health and safety, 
resource conservation and environment protection, and staple products exported, and more efforts will 
be devoted to adopting internati onals standards.  There are many areas with Chinese characteristics 
and no international standards ex ist, like languages (incl. minority languages), devices for family 
planning, spirits, rare earth, bamboo and cane, GI  products.  For fireworks and Chinese Traditional 
Medicine, corresponding technical committees exist but no  relevant international standards are found.   
 WT/TPR/M/264/Add.1 
Page 40 
 
 
  Page 51 (Paragraph 102)   
 
Since the enactment of the Food Safety Law, in 2009, several new regulations were issued by the 
Chinese Ministry of Health in order to ensure adequa cy of new requirements to the new piece of Law. 
In this context, on 4 December 2009, the Ministry of Health issued Circular No. 108 (Circular on the 
Conduct of Food Packaging Material Clean-up Operati ons) which was not notified to the WTO.  As a 
result, foreign companies did not have the opportunity to provide comments on the food additives that 
should be listed as benign.  Can the Chinese govern ment please explain why this important piece of 
legislation was not notified to the SPS Committee?     
 
Answer: Circular No. 108 of the Ministry of Health is mainly a campaign aimed at cracking down on 
illegal behaviours of producing food packaging and c ontainers using poisonous and harmful materials, 
particularly waste materials.  It is not legislation.  If we intend to modify the safety standards of food 
containers, packaging materials or additives, we will notify the WTO in accordance with relevant 
procedures. 
 
Page 53 (Paragraph 114)     
 
How does the Chinese central governme nt control public expenditure at the local level with regard to 
public procurement?  Is there in place an autom ated system to verify expenditures in public 
procurement by local governments?  
 
Answer: Chinese governments at all levels have thei r own separate budgets, the central government 
cannot control the expenditure on government procur ement at local levels, and there is not an 
automated system to verify expenditure in  public procurement by local governments. 
 
(iv) Tax rebates on exports      
 Page 59 (Paragraph 143)    
 
Can the Chinese government provide a list of the VAT rebate rates for its exports?    
 
Answer: The list of the VAT rebate rates is publicized on the official website of State Administration 
of Taxation.  Please refer to http:// www.chinatax.gov.cn/n8136506/index.html. 
 (3) M
EASURES AFFECTING PRODUCTION AND TRADE  
Taxation and tax incentives       Page 66 (Paragraph 177)   
 
(iii) Industrial Policies       Page 72 (Paragraph 211)  
 
What is the average lending rate of commercial banks to state-owned enterprises, in particular those 
owned by the central government?   
  
Answer: At present, commercial banks in China determine the concrete level of interest rates for 
loans to customers mainly according to the cost of capital, risks and time limits regardless of whether 
they are state-owned enterprises or enterprises owne d by the central government, therefore we cannot 
provide the average lending rate of commercial banks  to state-owned enterprises, in particular those 
owned by the central government. 
  WT/TPR/M/264/Add.1 
 Page 41 
 
 
  (iv) Price controls      
 Pages 72-73 (Paragraphs 212  217)      
 
In light of the extensive price controls stated  in the paragraphs above, how do they fit with the 
concept of market economy?   
 
Answer:  In our opinion, the view of extensive price cont rols is not an objective one.  After years of 
market-oriented reform of prices, at present, the prices of more than 95% of goods and services in 
China are liberalized and formed independently on the market, including the vast majority of the 
means of production such as coal and metal ore.  Th e basic role of market mechanism in allocating 
resources has been brought into full play and a soci alist market economy system has been established.  
In addition, the price control measures of the government have correspondingly turned to the use of economic and legal means which are in line with the requirement of market economy.  Currently, 
prices of just a few commodities and services which are vital to national economic development and 
peoples livelihood are controlled by the governme nt, and the government-controlled prices can 
basically reflect the production costs and the situa tion of supply and demand in domestic market, this 
is the same as practices of other market economies.  (v) State-owned enterprises, private enterprises, and corporate governance   Page 74 (Paragraph 220)  
 
What is the role of SASAC in managing the st ate-owned enterprises, particularly in foreign-
investment and strategic decision-making?  
 
Answer: As a shareholder and contributor to state-owned enterprises, the SASAC exercises 
shareholders rights and enjoys the rights of asset be nefits, participating in important decision making 
and choosing managers in accordance with the Co mpany Law and the Law of the People's Republic 
of China on the State-Owned Assets of Enterpris es.  The introduction of foreign investment by 
state-owned enterprises is carried out on the basi s of the Catalogue for the Guidance of Foreign 
Investment Industries and the Implementing Measures for the Supervision and Administration of the Investment of Enterprises Owned by the Central Government.  
Page 74 (Paragraph 222)       
 
Considering the corporatization of SOEs, how is the process of appointment of the leading executives 
of SOEs?  
 
Answer:  According to the Law of the People's Repub lic of China on the State-Owned Assets of 
Enterprises, the Interim Regulation on the Supervision and Administration of the State-owned Assets 
of Enterprises, the Company Law and other laws  and regulations, chief executives of SOEs are 
selected through market-based recruitment and intern al competition within the company according to 
legal limits of authority and procedures.  
Page 75 (Paragraph 226)      
 
How does the dominance of SOEs in diverse and centr al sectors of the Chinese economy fits with the 
concept of market economy?   
 
Answer:  After more than three decades of reform, the distribution, structure, systems and 
mechanisms of the state sector of the econo my have undergone prof ound changes, and the 
state-owned enterprises have achieved a separation of enterprise from administration and separation WT/TPR/M/264/Add.1 
Page 42 
 
 
  of the functions of the government from those of  enterprises, and SOEs have become independent 
market players and legal entities.  Furthermore, a great many SOEs have become public companies 
with diverse equities through reorganization and listings. 
 
(vi) Competition and consumer protection policy      
 Page 78 (Paragraphs 239 and 243)     
 
What is the effectiveness of the legislative and institutional framework of competition policy in light of 
the concentration of assets and sales in several central sectors of the Chinese economy?      
 
Answer:  The Ministry of Commerce is responsible fo r anti-monopoly investigations for concentration 
behaviour of operators, the NDRC is responsible for investigating and prosecuting price monopolies 
according to law, the General Administration of Industry and Commerce is responsible for 
anti-monopoly law enforcement in such areas as m onopoly agreement, eliminating and restricting 
competition by abusing market dominance and administrative powers (except for price monopoly).  In addition, the State Council established an Anti-monopol y Committee to organize, coordinate and give 
guidance to anti-monopoly work.  
Since the Anti-monopoly Law was put into force in 2008, the Ministry of Commerce, the National 
Development and Reform Commission and the Gene ral Administration of Industry and Commerce 
have constantly enhanced s upportive anti-monopoly legislation and actively carried out law 
enforcement work.  Practice has proved that the Chinese anti-monopoly legislation and law enforcement systems worked well and effectivel y maintained the competition order of Chinese 
market. 
 
How many anti-trust processes have been adopted a nd finalized? How many of them were faced by 
SOEs?  
 
Answer:  Since the enactment of the Anti-monopoly Law in 2008 to 2011, the Ministry of Commerce 
accepted a total of 382 operator concentration cases, of which 12 cases were approved with certain 
conditions, 1 case was prohibited and all of the rest cases were approved unconditionally.  The 
General Administration of Industry and Comme rce actively carried out anti-monopoly law 
enforcement, and to date, 3 cases were handled a nd 1 case was suspended. Besides, the NDRC also 
investigated and punished a number of pri ce monopoly cases.  The implementation of China's 
Anti-monopoly Law does not differentiate the ownership of companies. 
 
(IV) TRADE POLICIES BY SECTOR      
(3) E
NERGY      
 Page 114 (Paragraph 60)    
 
The National Energy Administrati on (NEA), under the NDRC, performs executive functions as the 
regulator, and as the general office of the NEC.  Considering the relevance of the energy sector for th e Chinese development, could China comment on 
the news publicized by China Daily (Super-Minist ry Considered, 01/07/2012) according to which 
there are governmental plans to establish an executive o ffice with status of Ministry in charge of 
energy affairs?  
 
Answer:  We cannot verify the news for we have no idea of the sources.  
  WT/TPR/M/264/Add.1 
 Page 43 
 
 
  Page 115 (Paragraph 69)  
 
Pricing for gas is also under government "guidance". 
 
Could China give some indication of the means by which the exploitation of its shale gas reserves will 
be fostered in order to reach the goals of the recently publicized five-year plan for the development of 
that resource? 
 Answer:  China will adopt the following measures in order to reach the goal for the development of 
shale gas.  First, strengthen the scientific and t echnological research for shale gas exploration and 
development.  Second, develop a new mechan ism by introducing competitive enterprises to 
participate in the exploration and development of  shale gas and promote the diversification of 
investors.  Third, improve the corresponding infrastructure for the development of shale gas.   (4) Manufacturing      (ii) Selected subsectors        Pages 118-119 (Paragraphs 78-82)    
 Is it possible to provide a detailed and updated asse ssment of policies of support to the automotive 
sector?   Answer: We have never done such assessment.  
 
How much local content is actually incorporated in  domestic manufactured aut omobiles, in particular 
from state-owned companies?   
 
Answer: Such statistics are not available at present.  
 
(5) Services      
(ii) Financial Services      
 Page 129 (Paragraph 123)      
 
How does the interest rates benchmarks set by the PBC fit with the concept of market economy?       
 
Answer:  Interest rate is one of the important tools of  monetary policy, even in the most developed 
market economies, their central banks also set and adju st the interest rate benchmarks to regulate and 
control various types of interest rates on the market . In recent years, the market-oriented reform of 
China's interest rates was advanced  steadily, and the interest rates of money market, securities market, 
saving and lending rates of foreign currencies in Chin a have all been set by the market, the lower limit 
of saving rates and the upper limit of lending rates of Renminbi have also opened to the market, and 
the role of market mechanism in the formation of interest rates have been strengthened. The 
successful experiences of countries in the world have  shown that market-based interest rate is a 
gradual process, which need to be promoted and improved step by step according to the actual conditions of different countries and the maturity  of necessary basic conditions, at present, the 
People's Bank of China sets and adjusts the inter est rate benchmarks and financial institutions 
independently decide their own floating levels of sav ing and lending rates, this conforms to the actual 
conditions of China's economic and financial development and genera lly fits with the concept of 
market economy.  
Since China's accession to the WTO,  what has been the relation between deposit rates and consumer 
inflation?   WT/TPR/M/264/Add.1 
Page 44 
 
 
   
Answer: With the continuous deepening of market-based reform of interest rates, at present China 
only administers the upper limit of deposit rates and lower limit of lending rates.  The central bank 
adjusts the benchmarks of deposit rates and lending rates according to macroeconomic and financial 
situation so as to maintain the basic stability of economic and price levels.  Historically speaking, 
there exists a clear cyclical relation between be nchmark deposit rates and price index, i.e., the 
benchmark deposit rates tend to rise when price inde x increases, and vice versa.  On the whole, the 
benchmark deposit rates timely reflect the changes of  prices, which is conducive to stabilizing prices.  
Furthermore, it should be noticed that in th e context of economic gl obalization and an open 
macro-environment, restrictions on the adjustment of  interest rates, in particular restrictions of 
monetary policies of developed economies are on the ri se, therefore, the central bank need to balance 
its policies on both domestic and foreign currencies,  and make decisions on the basis of considering 
all affecting elements.  For these reasons, we should probe into this problem from the perspective of 
overall balance rather than a partial one. 
 
How does this relation affect the broader objectiv e of rebalancing the economy towards a larger 
household consumption share of GDP?  
 
Answer: The relation between deposit rates and expanding consumption is indeterminate.  In essence, 
the economic structure is determined by actual ec onomic variants instead of the amount of money 
supply.  Central banks can adjust nominal intere st rates, however, from a long term perspective 
currency is largely neutral, and central banks can hard ly affect and change the real level of interest 
rates.  Therefore, it is more reasonable to anal yse the problem of economic restructuring from the 
perspective of actual economic variants.  Another thing need to be noticed is that with the 
development of financial market, Chinese citizens have  more diversified channels of investment, such 
as financing, stocks, securities and so on, and th eir dependence on deposits has decreased which may 
also have a certain impact on the relati on between deposit rates and consumption. 
 
PART II:  QUESTIONS REGARDING THE GOVERNMENT REPORT 
 
II. ECONOMIC AND TRADE ENVIRONMENT AND MACROECONOMIC POLICY 
DIRECTION      
 Page 8 (Paragraph 14) 
 
China analyses several challenges in  the international economic environment and gives the indication 
of the broad lines of its 12
th Five-Year Plan.     
 (i) How does China factor a deteriorating inter national economic environment into its strategic 
economic planning?  
 
Answer:  China's economic development is more clo sely connected with the outside world, and 
changes in global economy and international market have a greater impact on China's development.  
The global financial crisis started in 2008 had a tremendous impact on the world, as a result, global 
development is facing unprecedented challenges and the global market has become more uncertain, 
besides, challenges brought by climate change and energy and resource security have become 
increasingly prominent.  Therefore, when we study to put forward the guiding principles, objectives, 
strategic tasks and policies of development, we ha ve to take into consideration the changes of 
domestic and international environment.  The Outline of 12
th Five-Year Plan for the National 
Economic & Social Development of the People's Re public of China (hereinafter referred to as the 
Outline) had given full consideration to this f actor when putting forward the guiding principles, 
objectives, main tasks and key measures for the development during the 12th Five-year Plan period. 
  WT/TPR/M/264/Add.1 
 Page 45 
 
 
  (ii) What role does China envisage for its in ternational trade when a successful transition is 
completed from an economic model based on investme nt to another based on domestic consumption? 
 Answer: Expanding domestic demand, particul arly consumption, is an important content for China to 
accelerate its pattern of economic development.  Expanding domestic consumption can help increase 
imports and maintain a balance in international trade and international payments, thus laying a 
foundation for stabilizing exports.  Expanding domestic consumption can also enhance our advantages 
in foreign trade, since the expansion of consum ption scale will increase competition in the domestic 
market and improve the competitiveness of Chines e industries at home, a nd subsequently enhance 
their competitive edge abroad.  Chinese products w ith high international market shares such as 
textiles, light industry products and home appliances, went to the international market after a full 
competition at home.  With the deepening of China's industrialization and urbanization process, China's consumption potential will be further releas ed to form a huge demand for imports, and China 
is hopeful to be the world's largest import market. 
 
Page 12 (Paragraph 35) 
 
Taking into account that China is the biggest energy consumer, a major producer and that it is not a 
member of the International Energy Agency, coul d China comment on its view of the future energy 
multilateral regime? 
 
Answer:  China is still in coordination with competent au thorities to provide responses to the question.  
 
PART III: OTHER QUESTIONS  
 
CUSTOMS ADMINISTRATION 
 
1. Is the revenue collected by the Chinese Cu stoms administered by Customs itself or is it 
transferred to another central body in the Chinese government?   
 Answer: The revenue collected by the Chinese Customs, including tariffs, import VAT collected by 
Customs and consumption tax, as we ll as revenue from fines and conf iscation, is handed over to the 
national treasury.   
2. Is there any provision on the maximum amount  of time that Customs can take for customs 
clearance, after which the clearance becomes automatic?   
 
Answer:   There is no such provision on the maximum amount.  
 
3. What kind of risk assessment is implemented for customs clearance?   
 Answer:  The Chinese Customs assesses whether there are risks based on an overall consideration of a 
specific company, concrete trade-related compan ies, commodities and shipping lines (high-risk 
countries of shipment, destination or key shipping lines), and decides whether physical inspection is 
necessary based on the degree of risks.  4. Can China E-Port be used by all operato rs or only by economic operators graded AA or A? 
Nowadays, how many users does China E-Port have?   
 
Answer: All companies can apply for the use of China E-Port which is not confined to operators 
graded AA or A. currently, a total of 650,000 comp anies have registered in China E-Port on an 
accumulation basis. 
 WT/TPR/M/264/Add.1 
Page 46 
 
 
  5. How many AA, A, B, C and D economic operators does China have today?   
 
Answer:  As of the end of April 2012, there are 2,174 AA-grade companies, 25,582 A-grade 
companies, 483,944 B-grade companies, 930 C- grade companies and 210 D-grade companies. 
 
6. By means of the China E-Port, what type of  information is shared between Customs and other 
agencies involved with customs procedures?   
 Answer:  The Chinese Customs shares electronic data with other departments by means of China 
E-Port, including among others, the export tax reba te, settlement of exchange, RMB settlement in 
cross-border trade, import and export of toxic chem icals, solid wastes and pesticides, handing in of 
revenue, etc.  
7. How is the relationship between the local e-ports, such as the Shanghai E-Port, and China 
E-Port? Do their functions overlap?   
 
Answer: China E-Port is mainly used for sharing clearance-related information among relevant 
departments of the State Council, and conducting on line inspection, while local e-ports are mainly 
used for sharing clearance-related information in  the region, and providing one-stop services for 
customs clearance and relevant logistical services.  The two levels of e-por ts support and complement 
each other, forming a unified informa tion platform for customs clearance. 
 
8. How many ports of entry are there in China?  Are there any restrictions with regard to the 
nature of the imports and the entry ports which can be used?   
 Answer:  At present, China has a total of 284 different types of ports, of which 82 are water carriage 
ports (seaports).  According to the nature of impor ts and exports, the Chinese Customs administers the 
exports of antimony and antimony products, part of  magnesium sands, liquorices, rare earth and other 
goods by designating ports of exit in accordance with relevant regulations.  EXPORT RELATED FINANCING 
 
Under the framework of the China-US Strate gic and Economic Dialogue, Chinese and US authorities 
have been discussing the eventual development and adoption of new international guidelines on export financing.  What does China envision for these new guidelines?  
 
Answer:  China hopes that the new guidelines could take into consideration the interests and national 
conditions of different countries and refl ect the best international practices. 
 
BRAZIL (SECOND BATCH)      
 II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES  (4) Foreign Investment Regime  (ii) Regulatory framework  Paragraph 48 
 
FIEs in the encouraged category may import cap ital equipment duty free.  All foreign-invested 
enterprises may enlarge their scope of business, subject to approval.  Foreign investment in the 
restricted category may be permitted, subject to ap proval, if export sales are over 70% of total sales 
of the product.   WT/TPR/M/264/Add.1 
 Page 47 
 
 
  Could China please comment on how the required percen tage of export sales would fit in the TRIMs 
Agreement? 
 Answer:  This provision does not mean that foreign inv estment in the restricted category must export 
more than 70% of its product.  Foreign-invested en terprises in the restricted category can decide by 
themselves whether to sell product to the Chinese market  or to export.  Therefore, it complies with the 
TRIMs Agreement.  III. TRADE POLICIES AND PRACTICES BY MEASURE (1) Measures Directly Affecting Imports  (ii) Tariffs        Page 32 (Para 31)    
 
A sliding duty is applied to out-of-quota imports of co tton.  In 2011, this duty was applied so that, for 
cotton valued above a certain threshold, a specific duty  of 0.57/kg applied;  for cotton valued below 
the threshold, the rate was calculated based on an equation, but was no higher than 40%, taking into consideration the c.i.f. price of cotton (in Chinese yuan).  The threshold for 2011 was 11.397/kg.  The 
average applied in-quota rate was 4.8%, while the out-of-quota rate was around 50.4%.   
 
Is the sliding duty applied to out-of-quota imports of cotton in force until now?  If so, could China 
explain how this sliding duty is  consistent with its schedule? 
 
Answer: The sliding duty is still in force until now.  Th e sliding duty is a tentative rate applied to 
out-of-quota imports of cotton.  Its maximum rate is 40% which does not exceed the duty rate limit;  
since the implementation of the sliding duty, no im port duty rate higher than 40% has been adopted.  
The in-quota (894,000 tonnes) import rate is 1%, which is consistent with the rate limit promised by 
China.  The description in the Secretariat's report is inaccurate.  We believe the Secretariat does not 
understand our reality.  Could explain whether both in-quota and out-of- quota duties for cotton are in accordance with  
China's bound tariffs for cotton?  
 
Answer: Please refer to the answer to the above question. 
 (vii) Standards and other technical requirements (c) Sanitary and phytosanitary measures  Page 46 (Para 84) and page 51 (Para 101)  
 
Brazil would like to underline the importance of Ch ina's participation as a member of the Codex 
Alimentarius as well as the World Organisation for Animal Health and as a contracting party to the 
International Plant Protection Convention.  It is  a clear indication of the commitment China should 
have with the scientific principles in its SPS decision framework.    Brazil would also highlight the importance of independent scientific expert advice to the Codex 
Alimentarius Commission - CAC and its specialist Committees given by the JOINT FAO/WHO 
COMMITTEE ON FOOD ADDITIVES JECFA.       In this regard, Brazil would call attention to th e enormous task, carried out three times by JECFA, 
providing scientific advice to the Codex Alimentarius  related to the safety condition of the proposed 
ractopamine MRLs of four pork and bovine tissues seeking their approval within CAC.  
 WT/TPR/M/264/Add.1 
Page 48 
 
 
  Questions:  
1 Could China please inform if it continues against the approval of the proposed MRLs of ractopamine now risk evaluated three times by th e JECFA and recommended for approval in the 
CAC?   
2. If so, could China please explain the relation between its position and Articles 3.4, 5.1, 5.4 and 5.6 of the Agreement on the Application of  Sanitary and Phytosanitary Measures SPS/WTO 
Agreement?  
 Answer to Question 1 & 2: According to SPS Agreement, Member s are encouraged to base their 
SPS measures on international standards, guidelin es or recommendations.  However, China would 
like to point out that Members take risk control m easures based on the CAC standards, risk analysis 
and Members own conditions.  Therefore, if Member s SPS measures are not exactly the same with the 
CAC standards, it doesn't mean that they are viol ating WTO or CAC principles.  Furthermore, MRLs 
of ractopamine is still under discussion in CAC a nd far from becoming an international standard. 
 
According to SPS Agreement, Members shall ensu re their SPS measures are based on scientific 
principles.  That is exactly what China does.  Chin a has made great efforts to conduct risk analysis of 
ractopamine.  The result has shown that its residue  level are high on pigs organs, especially lungs, 
which are Chinese regular food resources.  
 
Thus, China's measure is to protect human  health and based on scientific evidence. 
 
(i) Customs procedures, valuation, and rules of origin  
 
Could China provide further information on the scope and objective of its cooperation with some 
partners in the area of customs data exchange system, referred to by the report by the Secretariat in 
paragraph 7?  
 
Answer:   The details of China's current custom s data exchange system are as follows: 
1. China-EU Smart and Secure Trade Lanes (SSTL) Pilot Project 
Scope: to achieve the sharing of information and supply chain security through customs data 
exchange, authorized management, mutual regul ation of results, common risk rules and the 
application of electronic seals and intelligent containers. Objective: to monitor the whole process of logisti cs, reduce the security risks of goods and facilitate 
international trade by establishing a safe, convenient and smart international trade transport chain. 
 
2. China-Russia Customs Data Exchange of Bilateral Trade Scope: exchange information of cargo and means of transport collected by the Customs if it is trade 
between China and Russia or transit trade.   3. China-Kazakhstan Customs Data  Exchange of Bilateral Trade 
Scope: exchange information of cargo and means of transport collected by the Customs if it is trade 
between China and Kazakhstan or transit trade. Objective: raise the supervision efficiency of the border Customs; speed up the cargo transportation 
between the two countries; protect the interests of the two countries.  (iv)  Import prohibitions and licensing 
 
Between 2010 and 2011, China added 32 tariff lines, in cluding poultry, vegetable oil and tobacco, to 
the list of goods subject to automatic import licen sing.  Could China explain the reason for applying 
import licensing to those goods?  
  WT/TPR/M/264/Add.1 
 Page 49 
 
 
  Answer: According to the rules of WTO and the laws of China and based on the need to supervise 
import, China has applied automatic import licensi ng to certain goods, including vegetable oil and 
tobacco.  The reasons are as follows: due to the dela y of Customs statistics, enterprises have to wait 
till the customs are cleared to know the overall s ituation of the import, which always leads to 
unfavorable situations such as blind import and c oncentration of goods arrivals.  Through automatic 
import licensing, import information can be m onitored and known before hand, which enables 
enterprises to rationalize import and achieve balanced and orderly arrivals of goods. 
 (vii) Standards and other technical requirements       
 
The report by the Secretariat notes that there are four  levels of standards in China (national, trade, 
local and enterprise standards), and that nationa l and trade standards may be compulsory or 
recommendatory.  Although the process for developing a national standard in China is well described 
in the report, it is unclear how trade standards are developed.  
 
Could China provide information on the process of developing trade standards and on the measures 
in place to ensure that those standards meet the TBT transparency obligations?      
 
Answer: The formulation plan and proposal of trade standards are issued by relevant executive 
organs of the State Council.  These standards are approved, numbered and publis hed in a unified way. 
Requirements of the formulation procedure are the same as national standards and all trade standards shall be submitted to national standa rdization authorities as records.  
 
What are the requirements that a foreign certificati on body must meet to be accredited by the CNAS, 
so that it can perform certificati on of products under the CCC system?  
 Answer:  China abide by the Regulations on Certifica tion and Accreditation of PRC, and China is 
actively promoting and allowing mutual recognition in international product testing and factory 
inspection within the framework of multilateral or  bilateral MRAs.  China has signed consignment 
agreements with 19 overseas certifying bodies (lo cated in Europe, America, Japan and other 
economies) for follow-up inspections of 3C certif ication over factories abroad. CNCA accept the 
inspection reports and results of these bodies.  
(2) M
EASURES DIRECTLY AFFECTING EXPORTS  
(i) Procedures 
 
According to the report by the Secretariat, China has recently adopted a classified customs clearance, 
which seems a kind of risk management system for export goods.  Could that system help to curb 
practices such as undervaluation of export goods?  
 
Answer:  China has applied classified customs clearan ce to import and export goods based on risk 
levels and enterprise credibility.  As an effective way of Customs risk management, this system aims 
at facilitating credible enterprises customs clear ance, speeding up customs clearance for export goods 
and promoting international trade development.  China Customs check and determine the duty-paid 
values of import and export goods in strict accordan ce with the Customs Law, the Regulations of the 
People's Republic of China on Import and Export Duties, the Provisions of the Customs of the 
People's Republic of China for Assessment of Du ty on Import and Export Goods, the Regulations on 
Customs Valuation and ot her relevant provisions. 
 WT/TPR/M/264/Add.1 
Page 50 
 
 
  (iv) Tax rebates on exports  
 Paragraph 143 
 
VAT may be rebated on exports, although the rebate rates are, by and large, lower than the VAT rates 
actually paid.  The difference between the two rat es constitutes a levy on exports, which may in turn 
constitute assistance to downstream processing of th e products affected, and could affect China's 
terms of trade.  China adjusts VAT rebate rates as part of  its industrial policies, to control, restrict, or 
otherwise "manage" the export of certain products.  In  particular, on 15 July 2010, China eliminated 
VAT rebates on exports of steel, starch, ethanol , and semi-finished copper products, covering 
406 tariff lines.
2  VAT rebates on exports reached 920.5 billion in 2011, some 7.7% of total 
merchandise exports (up from 648. 7billion and 7.9% in 2009).  
 
Could China please inform what is the average d ifference between the rebate rates and the VAT rates 
actually paid?  
 
Answer: Statistics about the average di fference between the rebate rates and the VAT rates actually 
paid is not available at present.   Could China provide information on which industr ies have most benefitted from adjusted VAT rebate 
rates in the recent years?  
 
Answer: The principle observed by China in adjusting VAT rebate rates for export is that it should 
not exceed statutory tax rate. China does not think the VAT rebate on exports  brings benefits to 
industries. 
 
IV. TRADE POLICIES BY SECTOR 
(1) A
GRICULTURE  
(ii) Agricultural policies (c) Domestic Support 
 
Page 105 (Para 30)       
 
Purchases of agricultural machines are also subsidized at rates between 20% and 30% of the sale 
price.  In 2008, the scheme was extended to co ver the whole country.  The local authorities are 
responsible for running the scheme and deciding wh at machines are covered pursuant to a catalogue 
of agricultural machines issued by the central gove rnment.  The amount provided for the purchase of 
agricultural machines has increased  steadily, from 2 billion in 20 07 to 15.5 billion in 2010. 
 
1. This program seems to be a non-product specific subsidy.  Could China clarify how this 
program was notified in China's last dom estic support notification (G/AG/N/CHN/21)?    
 Answer: In the domestic support notification for 2005- 2008 submitted by China in October 2011, 
subsidies for purchasing agricultural machinery and tools are notified as input subsidy under 
non-product-specific de minimis . 
 
                                                      
2 WTO document WT/TPR/OV/W/5/Rev.1, 7 September 2011;  and WT/TPR/OV/W/5/Rev.1.  WT/TPR/M/264/Add.1 
 Page 51 
 
 
  (3) M EASURES AFFECTING PRODUCTION AND TRADE        
(ii) Subsidies and other government assistance         
Paragraph 194  
During the period under review, programs described in the industrial revitalization plans adopted in 
2009 for ten sectors were implemented (see section (iii) below).  No details on the budget allocated to 
and actually disbursed on these programs was made available to the Secretariat.  
 
Could China please elaborate on the impacts of the revitalization plans on the ten sectors at issue?   
 
Answer: The implementation of Industrial revitalization plans in 2009 for ten sectors has greatly 
boosted the confidence of the market and business, re verse the declining trend of some key industries 
in a short time and consolidate the recovery mome ntum and industrial restructuring process.  These 
plans play a positive role in global economic recovery  against the backdrop of international financial 
crisis.   
(vii) Intellectual property rights 
 
1) The Report by the Secretariat, Section III (Trade Policy and Practices by Measure), 
Paragraph 275, states that the National Intellectual Property Strategy, announced by the State Council in June 2008, established four medium-t erm goals for a five-year period between 2008 and 
2013:  a large-scale increase in "indigenous intell ectual property rights";  a significant increase in 
the share of IP-intensive commodities;  improvem ent in IPR protection;  and an overall increase in 
awareness of intellectual property rights. 
 
Could China elaborate on the measures aimed at a ttaining the medium-term goal of a large-scale 
increase in "indigenous intellectual property rights"?  
 
Answer : China's National Intellectual Property Strategy puts forward the strategic objective of 
significant improvement in level and further incr ease in number of indigenous intellectual property 
rights during the period from 2013 to 2015.  In order to realize this goal, the Strategy proposes the 
following strategic measures:  (1) improving the capability of creating intellectual property rights;  
(2) encouraging the application of intellectual prop erty rights;  (3) accelerating the legal system 
construction of intellectual property rights;  (4 ) improving the law enforcement for intellectual 
property rights;  (5) strengthening the administrati on of intellectual property rights;  (6) developing 
intermediary services of intellectual property rights ;  (7) enhancing team building for talents in 
intellectual property rights;  (8) advancing the cons truction of intellectual property right culture;  and 
(9) expanding external exchanges and coope ration on intellectual property rights. 
 
2) The Report by the Secretariat, Section III (T rade Policy and Practices by Measure), describes 
China's policies regarding registration and adminis tration of trademarks. Paragraph 300 describes 
provisions on the Trademark Law under whic h registration may be rejected.      
 Paragraph 300 states that registration may be rej ected and usage of a relevant mark is forbidden 
under the following circumstances:  if the mark in volves a copy, imitation, or translation of 
well-known brands that have not been registered in China for the same or si milar goods and services, 
and such a copy, imitation, or translation easily creates ambiguity;  and if the mark involves a copy, 
imitation, or translation of we ll-known brands that have been registered in China for goods and 
services that are not deemed identical or similar to  the goods and services in question, and such a 
copy, imitation, or translation may mislead the public and result in possible harm to the interests of 
the right-holders of the well-known brand.     
 WT/TPR/M/264/Add.1 
Page 52 
 
 
  Could China indicate which procedures are in force in order to prevent the misappropriation as 
trademarks of generic terms/names in third countries?  
 Answer: China's relevant laws and regulations stipul ate the provisions on generic terms/names that 
are consistent with those specified in TRIPS and ot her international treaties.  A mark only having the 
generic/term/name of the commodity should not be registered as a trad emark, but can be registered as 
a trademark provided that the mark has obtained di stinctive features and becomes easily identifiable 
after being used. 
 
Whether a mark belongs to generic term is determ ined by such factors as consumers' awareness and 
the use of the mark in that country.  It is very likely that a mark recognized as a mark of generic 
term/name in one country is not identified as a gene ric term/name in another country.  Therefore, the 
registration of a generic term/name of a third c ountry in China depends on the actual conditions of 
such generic term/name.  If the generic term/nam e of the third country is recognized as a generic 
term/name in China, such generic term/name shoul d not be registered as a trademark.  On the 
contrary, if China doesn't consider the mark as  a generic term/name or the mark has obtained 
distinctive features and becomes easily identifiable af ter being used, the mark can be registered as a 
trademark.  3) The Report by the Secretariat, Section III (T rade Policy and Practices by Measure), regarding 
China's policies regarding registration and administr ation of trademarks, Paragraph 307, states that 
parallel imports are not addressed in the legisla tion on trademarks, and it is not clear to the 
Secretariat whether they a re prohibited/allowed.  
 Could China clarify whether parallel imports  are allowed in the applicable regulation?  
 Answer: In respect of trademark, the current Trademark Law does not have provisions concerning 
parallel import.  In respect of copyright and relate d rights, parallel import is prohibited in the current 
Copyright Law.  In respect of patent, Article 69 of the Patent Law stipulated only the patented 
products launched on the Chinese or international mark et by the patentee or the patent licensee can be 
parallel imported to China.  Therefore, parallel imports can increase the s upply of patented products 
on the Chinese market, without leading to such issues as counterfeiting, or aff ecting consumer's health 
and safety.  
4) In the field of copyright, the Report by the Secretariat, Section III (Trade Policy and Practices by 
Measure), Paragraph 313, states that Copyright Law was revised in 2010, as well as its Implementing 
Regulation.      
 Could China elaborate on the perceived effects of  the new legislation? Details concerning 
enforcement activities would be welcome, as well as statistics on copyright protection trends.   
 Answer:  (1) Effects of implementing the Copyright Law revised in 2010: 
On 26 February 2010, China released the revised Co pyright Law of the People's Republic of China.  
The revisions mainly involved Article 4 which concerns the works to be prohibited from being 
published and disseminated in accordance with la w, work registration and copyright pledge 
registration.  NCAC has strictly enforced the revised Copyright Law of the People's Republic of 
China. 
 (2) Details concerning enforcement activities  On 27 October 2010, the State Council issued the Scheme for Special Campaign of Cracking down on 
Infringing Intellectual Property Rights and Manuf acturing and Selling Counterfeit and Substandard 
Commodities (Guo Ban Fa [2010] No. 50), which decide d to intensively carry out a special campaign 
aimed at cracking down on infringing IPRs and ma nufacturing and selling count erfeit and substandard  WT/TPR/M/264/Add.1 
 Page 53 
 
 
  commodities nationwide during a period from October 2010 to March 2011.  The special campaign 
was scheduled to be completed at the end of March 2011, but the State Council extended the 
campaign to the end of June 2011 to achieve more results.   
 
During the campaign, NCAC selected 18 key vide o websites including Sina, Sohu, Youku, Tudou, 
Ku6 and Thunder and identified 300 key works on th ese websites for priority supervision.  On 
15 September 2010, NCAC issued a notice to rele vant websites and required them to carry out 
self-inspection and self-correction on the dissemination and use of these 300 works. 
 
At the same time, NCAC intensified technical m onitoring over the dissemination of the website 
works, and checked and verified the authorizatio n information of the works disseminated by the 
websites in an in-depth manner.  (3) Statistics on copyright protection trends 
According to the statistics, China had carried out special campaigns of cracking down on Internet 
infringements and piracies for seven consecutive years from 2005 to 2011 and investigated and 
handled 3,769 Internet infringe ment and piracy cases in various places.  China closed down 
1,569 illegal websites engaged in infringement and piracy, ordered the suspension of 
2,505 infringements, fined RMB 7.83 million, and c onfiscated 948 servers and computer hardware 
devices.  157 cases suspected to constitute copyright crimes were transferred to relevant judicial 
authorities.    From July 2010 to late June 2011, copyright administration and enforcement authorities, public security organs and industry an d information technology authorities investigated and handled 
1,148 Internet infringement and piracy cases, gave  administrative penalties for 466 cases, handed over 
36 cases to judicial authorities for criminal investigation. 
 
5) The Report by the Secretariat, Section III (Trade Policy and Practices by Measure), 
Paragraph 323, states that Customs is in charge of enforcement of intellectual property rights at the 
border.  The revised Regulations on Customs Protection of Intellectual Property entered into effect on 
1 April 2010.  
 Table III.12, on pages 95-96, presents information on Intellectual property enforcement from 2008 to 
2010.  It shows that cases handled by Customs at the border, in million, were at 294.8 in 2008, 452.3 in 2009 and 277.1 in 2010. 
 
Could China elaborate on the perceived effects and/or trends of the revised regulations in Customs 
enforcement activities?   
Answer: In 2011, to protect intellectual property, Chin a Customs suspended 20,000 batches of import 
and export goods, among which 18,200 batches of  goods suspected of being involved in IPR 
infringements were detained.  103,000,000 right -infringing goods were detained, among which 
100,000,000 right-infringing goods were seized in the export li nk, accounting for 97% of the total 
volume.  China's efforts to strengthening its border  protection of intellectua l property have received 
good reputation from the international community .  In 2011, Global Anti-Counterfeiting Group 
awarded China Customs the only Global An ti-Counterfeiting Awards 2011-Public Sector 
Organization Award of that year.  
 WT/TPR/M/264/Add.1 
Page 54 
 
 
  IV. TRADE POLICIES BY SECTOR  
(3) Energy (i) Policy objectives for the sector       
 
Paragraph 59 
 
China's medium- and long-term objective for its ener gy sector is "to establish a stable, economical, 
clean and secured energy supply system so to  meet the demand from social and economy 
development".  
 On 5 December 2011, the National Energy Administration issued the National 12
th Five-Year Plan for 
Energy Technology, with the aim of supporting the development of "strategic emerging industries" 
and of the energy sector.       
Could China please elaborate on the implementation measures to be adopted within the context of the 
Five-Year Plan?  
 
Answer:  China will adopt the following measures within the context of the National 12
th Five-Year 
Plan for Energy Technology.  First, China w ill actively promote the construction of related 
Demonstration projects and encourage technology innovation and application conversion.  Second, 
China will encourage key energy R&D laboratory and related research institutes, colleges and 
universities to participate in energy technology innovation.   
Will trade in goods and services play a role in fulfilling the objectives of the Five-Year Plan?  
 Answer:  Trade in goods and services will play a role in  fulfilling the objective of the Five-Year Plan. 
 
(ii) Electric utilities  
 Paragraph 63 
 
The revised Law on Renewable Energy entered into  force on 1 April 2010.  The law states that 
development and utilization of renewable energy is th e priority for national energy development, and 
"encourages" all enterprises, including foreign firms , to participate in the development of renewable 
energy.  
 
What is the legal framework under which foreign fir ms could participate for the development of the 
renewable energy sector in China?   
 
Answer: The Law of the People's Republic of China on Chinese-Foreign Equity Joint Ventures, Law 
of the People's Republic of China on Chinese-Foreign Contractual Joint Ventures, Foreign Investment 
Law, Catalogue for the Guidance of Foreign Investme nt Industries and related renewable energy laws 
and regulations.  
Could China elaborate on its main priorities on the renewable energy sector? 
 Answer: Nuclear power, solar power, wind power, biomass, biogas etc.  
  WT/TPR/M/264/Add.1 
 Page 55 
 
 
  (4) Manufacturing 
(ii) Selected subsectors (d) Iron and steel 
 
(Paragraphs 89-93) 
 
The Chinese Steel Industry Revitalization Plan set the goal of eliminating 72 million tonnes of iron 
production capacity and 25 million tonnes of steel pr oduction by the end of 2011.  These included the 
elimination of 25 million tonnes of iron producti on capacity, and 6 million tonnes of steel production 
capacity in 2010.  Could China please elaborate on its future goals for the modernization and revitalization of its iron and steel sectors?  
 Answer: On 24 October 2011, the Ministry of Industr y and Information Technology of the People's 
Republic of China issued the 12
th Five Year Plan for Steel Industry which sets goals for Steel Industry 
Development during the 12th Five Year Plan.  Please re fer to http://www.gov.cn/zwgk/2011-
11/07/content_1987459.htm for details.  II. ECONOMIC AND TRADE ENVIRONMENT IV. TRADE POLICIES BY SECTOR  (Pages 11 and 121) 
 
The Report of the Secretariat highlights China's effo rts to transform its economic development pattern 
and restructure its economy towards a more domestic demand-centered model.  Concurrently, also 
according to the Report, China has been pursu ing a gradual, progressive and managed opening of the 
services sectors in the framework of a broader development strategy.   How does China envisage liberalization of the services sector contributing to both objectives: 
transition to a more consumption-driven pattern of growth and development?  
 Which sectors are deemed strategic in this regard?  
 
Answer: To implement opening-up through developmen t and to develop through opening-up should 
be the general trend and strategic direction of the development of ser vices trade in China.  In this 
principle, we understand that opening- up of the services industry plays an important role in improving 
the competitiveness of services trade.  The Outline of the 12
th Five-Year Plan for Development of 
Trade in Services has clearly proposed that a more actively strategy of opening-up will be 
implemented, and the sectors of financial services, logistics, education, medical care will be progressively opened in the future. 
 
Pages 121-137 (Para 1) 
 
The Secretariat report indicates that the Chinese fi nancial services sector is largely dominated by 
banks, most of which are state owned.  On the oth er hand, there seem to be indications of new market 
access opportunities for foreign providers th rough non-bank financial institutions.  
 Could China expand on its market opening plans for th e financial sector in light of its development 
strategy?  Does the country consider improving access to commercial bankin g services?  Are there 
any plans for increased priv ate capital participation? 
 WT/TPR/M/264/Add.1 
Page 56 
 
 
  Answer: The Chinese Government has always attached great importance to the development of 
financial industries, and continuously promotes its  financial market opening up in accordance with 
domestic market situation.  Recently, China decided to further liberalize its insurance and securities 
sectors, which reflect China's concrete actions to implement its financial development strategy.  As 
for the access of commercial banking services, in a ccordance with Several Opinions of the State 
Council On Encouraging and Guiding the Healthy Development of Private Investment, the CBRC 
recently promulgated the Implementation Opinions on Encouraging and Guiding the Private Capital 
to Enter into the Banking Sector, encourage and guide private capital to participate the banking 
services, and enhance financing support to private investment.   
 
How does China expect to strike a balance betwee n development of the capital market and financial 
stability?  To this effect, what are some of the policy and regulatory tools under consideration?  
 
Answer:  China strives to accelerate the development of  capital market, establish diversified financing 
channels, disperse financial risks and maintain the stability of financial system.  China insists the 
principle of step by step and risk controllable, to  push forward its capital market development.  The 
relevant measures are as follows:  First, enhance the cooperation and coordinatio n among different regulators, and promote the 
supervision and regulation of the capital market.  To  this end, The PBC, the CSRC, the CIRC and the 
CBRC will establish a coordination mechanism for financ ial supervision, to enhance the evaluation of 
cross-sectors and cross-markets risks.  Moreove r, the aforesaid regulators will build a special 
cross-ministry meeting mechanism, to facilitate the development of a standard and uniform bond 
market.   
Second, push forward investor education and improve  the management of investor eligibility.  For 
example, the regulators have set up investor eligib ility management system in the Growth Enterprises 
Board market and financial futures market, which re alize the matching between investor risk tolerance 
and investment products risk characteristics.    
Third, promote the construction of financial infr astructures and advance the healthy development of 
market.  Take the derivatives market for exampl e, China has already est ablished Shanghai Clearing 
Center as the central counterparty, to bear the central clearing function of OTC derivative market.   
Pages 15-16  
 
The Secretariat Report stresses the fact that the Chinese balance of payments and RMB exchange 
rates have been approaching a level of equilibrium as  current account surplu ses in relation to GDP 
have been declining and the RMB has steadily appreciated since 2005, when a managed free-floating 
system was put in place.   
Could China provide details on the next steps it intends to take to ensure RMB exchange rates move 
further towards equilibrium level?       
 
Answer:  Starting from July, 2005, China moved into a managed floating exchange  rate regime based 
on market supply and demand with reference to a basket of currencies.  In June 2010, China 
announced that it would further push forward the reform  of exchange rate formation mechanism.  On 
16 April 2012, the People's Bank of China widen th e exchange rate fluctuating band of RMB yuan 
against USD from 0.5% to 1%, which made the RMB ex change rate more flexible.  According to the 
estimation of BIS, the nominal and real effective exchange rates of RMB had appreciated 19.4% and 
27.4% respectively from July 2005 to April 2012.  Th e RMB exchange rate has approached to an even 
and reasonable level.  In the future, the PBC will further promoting the reform of the RMB exchange 
rate regime in line with the self-initiated, c ontrollable, and gradual approach, accelerate the  WT/TPR/M/264/Add.1 
 Page 57 
 
 
  development of the foreign exchange market, pr omote the innovation of the exchange rate risk 
management tools, continuously improving the ma naged floating exchange rate regime based on 
market supply and demand with reference to a b asket of currencies, and further enhancing the 
flexibility of RMB exchange rate. 
 
BRAZIL (THIRD BATCH) 
 
SECRETARIAT REPORT  
 
III. TRADE POLICIES AND PRACTICES BY MEASURE  Page 36 (Para 51) 
 
MOFCOM may also self-initiate an anti-dumping in vestigation, if it has sufficient evidence of the 
existence of dumping, injury, and causal link; it di d not self-initiate any investigations in 2010 and 
2011. Implementing rules regarding the initiation of anti-dumping investigations are set out in Provisional Rules of the Ministry of Foreign Trade and Economic Co-operation on Initiation of 
Anti-dumping Investigations.  
 
Please explain how the government monitors and collect s sufficient evidence of injury in self-initiated 
AD investigations.  
 
Answer:  In this case, the Ministry of Commerce will m onitor and collect suffici ent evidence of injury 
in strict accordance with provisions 5.6 and 5.2 of Agreement of Implementation of Article VI of the 
General Agreement on Tariffs and Trade 1994. 
 
Page (36) 
(vi) Contingency trade measures 
 
How does China deals with questions regardi ng circumvention?  Does China have any law or 
regulation on this matter currently in force?  
Answer:  Currently, China does not have practices or la ws regarding AD investig ation circumvention. 
 
Page 61 (Para 156)        
 
The Bank's main mandate is to facilitate the ex port and import of Chinese mechanical and electronic 
products, complete sets of equipment, and new a nd high-tech products;  assist Chinese companies 
with comparative advantages in their offshore contract projects and outbound investment;  and 
promote its foreign relationship and international economic and trade cooperation.   
Please provide clarifications regarding the choice of sectors that may benefit from EXIM export 
credit financing operations.  Is there any limitation fo r sectors other than those identified in para 156 
to apply for EXIM export credit financing?   
 
Answer: China EXIM Bank does not formulate credit financing policies targeted at specific 
industries. 
 WT/TPR/M/264/Add.1 
Page 58 
 
 
  TRADE POLICIES AND PRACTICES BY MEASURE  
CUSTOMS PROCEDURES, VALUATION, AND RULES OF ORIGIN      Page 24 (Para 3) 
 
Customs collects the following administrative char ges: handling charges for customs supervision, 
registration fees of customs intellectual prop erty protection, charges for ATA (Admission 
Temporary/Temporary Admission) document adjustm ent, and storage charges for goods and luggage, 
in accordance with relevant regulations.        
 
Regarding the registration fees of customs intellect ual property protection, please explain in which 
situations they are required and what is the extra protection granted.  
 
Answer : According to Article 8 of the Measures of the General Administration of Customs for the 
Implementation of the Regulations on the Customs Pr otection of Intellectual Property Rights, an IPR 
holder shall pay registration fees when he applie s to the General Administration of Customs for 
registration of customs intellectual property protec tion or re-applies for the registration of customs 
intellectual property protection after the original re gistration becomes invalid, and an IPR holder shall 
not pay registration fees when he applies for regi stration renewal or modification.  According to 
Article 1 of the Public Announcement of the General Administration of Customs on Charging 
Registration Fees of Customs Intellectual Property Pr otection, an IPR holder a pplying to the General 
Administration of Customs for the registration of customs intellectual property protection shall pay 
RMB 800 registration fees for each registration application.  Please refer to Chapter 3 of the Regulations of  the People's Republic of China on the Customs 
Protection of Intellectual Property Rights fo r what extra protection will be provided. 
 
Which types of intellectual prop erty protection can be registered?    
 
Answer: Exclusive right to use a trademark, copyright, patent right, exclusive right of the Olympic 
symbols and exclusive right of the World Expo symbols could be registered.  
 
MEASURES AFFECTING PRODUCTION AND TRADE (INTELLECTUAL PROPERTY 
RIGHTS) Page 87 (Para 277) 
 
For 2011, the plan assigned 176 tasks including:  the launch of a national specific campaign on IPR protection, and revisions of the Trademark Law, the Copyright Law, and the Measures for Exercising 
Compulsory License as well as drafting Anti Mono poly Guidelines for Abusive Use of Intellectual 
Property Rights.   With regard to competition policy, please provide information of its interface with Intellectual 
Property Rights.  Has any case of abusive use of in tellectual property rights ever been investigated 
under the competition law?  Are there sentences on this subject?              
 
Answer: Intellectual property rights are exclusive.  Pa tents or trademarks, right holders have a 
monopoly over the intellectual property.  Competition policy is in fact against monopoly and 
exclusiveness.  These two seem to be contradictor y but in fact have the same goal which is to 
stimulate innovation, protect intellectual property while  encouraging fair play in the market and fight 
against the abuse of intellectual property.  According to Article 55 of the Anti-monopoly Law, the undertakings that exercise intellectual property rights according to laws, administrative regulations related to intellectual property rights, 
shall not be applied to this law;  however, the unde rtakings that abuse the intellectual property rights  WT/TPR/M/264/Add.1 
 Page 59 
 
 
  to eliminate or restrict competition, shall be applie d to this law.  Intellectual property rights, as any 
other rights, have a scope of application, and exceeding that scope would be an abuse.  
Anti-monopoly Law applies to the abuse of IPRS, not the legal exercise of them. 
 
PART II:  QUESTIONS REGARDING THE GOVERNMENT REPORT 
Page 11 (Para 32)  
 
From October 2010 to June 2011, the Chinese Govern ment launched a special enforcement campaign 
nationwide aiming at cracking down on infringing  IPRs and manufacturing and selling counterfeit 
commodities.  Does China have preliminary results of this campaign?  Could China share the results?   
 
Answer : China has scored positive achievements in th e special enforcement campaign aiming at 
cracking down on infringing IPRs and manufactu ring and selling counte rfeit and substandard 
commodities during the period between Octobe r 2010 and June 2011.  During the special 
law-enforcement campaign, administrative law en forcement authorities at all levels filed for 
investigation 156,000 cases of infringing IPRs and manufacturing and selling counterfeit and 
substandard commodities which involved RMB 3.43 b illion, destroyed 9,135 hi deouts and intensively 
regulated and improved 329 key areas and key markets.   Public security organs cracked 16,000 cases 
involving RMB 13.11 billion and arrested 29,000 cr iminal suspects.  Procuratorial organs approved 
the arresting of 5,336 criminal suspects in 2,895 cases, and initiated public prosecution on 
2,176 cases.  The Peoples Courts accepted 2, 492 cases and concluded 1,985 cases.  
 
How can right holders from third countries enroll in this campaign?  
 
Answer : The Chinese Government welcomes IPR holders including foreign right holders to actively 
participate in the campaign aiming at cracking down on infringing IPRs and manufacturing and selling counterfeit and substandard commodities.  A foreign right holder may file a report or 
complaint to relevant Chinese law enforcement authorities if he founds that his IPR is infringed upon 
in China.  An IPR infringement involving copyright may be reported or complained to NCAC, an IPR 
infringement involving trademark right may be reported or complained to SAIC, and an IPR infringement involving patent right may be reporte d or complained to SIPO.  Relevant Chinese law 
enforcement authorities will timely investigate a nd handle the case based on the relevant report or 
complaint, and investigate the criminal responsib ility of the relevant r esponsible person through 
judicial means if crime is suspected to be involved in the case. 
 
TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 
Page 23 (Para 58) 
 
China had signed 131 bilateral investment agreemen ts by the end of December 2011.  Between 2010 
and 2011, China concluded bilateral investment ag reements with Chad, Libya, Uzbekistan, and 
Congo (DRC).   Please identify relevant differences in  Investor-State Dispute Settlement provisions in China's recent 
Bilateral Investment Agreements, as compared to BITs signed by China in earlier decades.        
  
Answer: As compared to BITs signed by China in ear lier decades, the rece ntly-signed Bilateral 
Investment Agreements add provisions which requir e the investors to complete the administrative 
reconsideration procedure.  This means if one of th e contracting parties wants to refer the dispute to 
international arbitration, it has to complete the re lated administrative reconsideration procedure first;  
but this provision does not apply to investors who choose on their own will the judicial remedies of 
the host country of investment. WT/TPR/M/264/Add.1 
Page 60 
 
 
   
CANADA 
 
Report by the Secretariat (WT/TPR/S/264) 
 Part II. Trade Policy Regime Framework a nd Objectives; (1) Institutional and Legal 
Framework; (i) Transparency: paragraph 4-5, page 11: 
 The Secretariat's report notes that since China's last Review it has made some small improvements in 
transparency.       
1. Could China elaborate on its plans to systematically increase transparency?        
 
Answer: China did not make commitment to soliciting public opinions for publicizing draft laws, 
regulations and rules.  However, in order to prom ote scientific and democratic  legislation and improve 
the quality of legislation, Chinese government has been trying to increas e the transparency of 
legislation and enlarge public participation.  Since 2008, in addition to the confidentiality required by 
law, all the draft administrative regulations are publ icized on the website of legal affairs information 
of the Chinese government to solicit public opinion.  In July 2011, China's State Council revised the 
"Provisional Method for Soliciting Public Opinions  on the Draft of Laws and Regulations", and 
released the Notice on Soliciting Public Opinions on the Departmental Draft Rules on the Website of 
Legal Affairs Information of the Chinese Government ".  The notice required that, in addition to the 
exceptional conditions, administrative and department al rules that are related to economy and trade 
shall open at least 30 days for soliciting public opinion.  Since then, all administrative and 
departmental rules that are related to economy and trade are publicized on the website of legal affairs 
information of China for public opinions within 30 days, except some urgent and extraordinary 
conditions.  
Part II. Trade Policy Regime; Framework a nd Objectives; (1) Institutional and Legal 
Framework; (i) Transparency: paragraph 8, page 12:  
 
Canada notes throughout the Secretariat's repor t that subnational leve ls of government are 
increasingly being vested with the authority to en act foreign trade-related rules, regulations and 
policies.  The Secretariat Report also notes a numb er of means through which China is making efforts 
to disclose trade related laws, rules, regulations and policies at both central  and provincial levels.  
While Canada notes the steps China has taken to im prove transparency since the last trade policy 
review, we are concerned that the variety of s ources through which laws and regulations are being 
disclosed is making public consultation more cumbersome than necessary.  
2. Could China explain what steps are being taken to pursue a coordinated approach at 
subnational levels for publishing foreign-trade related laws, regulations?        
 Answer: Since 2008, in addition to the confidentiality re quired by law, all the draft administrative 
regulations are publicized on the website of legal affairs information of the Chinese government to 
solicit public opinion. local governments with legisla tion right have solicited public opinions on local 
regulations and rules on their websites. 
 
3. Could China clarify whether, to ensure consis tent and transparent reporting of foreign-trade 
related laws and regulations, it intends fo r MOFCOMs China Foreign Trade and Economic 
Gazette to be a central repository for such publ ications at both the central and sub-national 
levels? 
  WT/TPR/M/264/Add.1 
 Page 61 
 
 
  Answer: In June 2002, the General Office of the State Council issued the Official Reply to the 
Relevant Issues Concerning China's Implementation of  the Transparency Clause of the Protocol of 
China's Accession to the WTO and designated China Foreign Trade and Economic Cooperation 
Gazette (hereinafter referred to as the "Gaze tte") as the official publication for collecting and 
publishing all the laws, regulations and other measures pertaining to or  affecting trade in goods, trade 
in services and trade-related intellectual property ri ghts or foreign exchange control, and also for 
sharing information with WTO and its members and for WTO to review China' s trade policies.  In 
October the same year, the former Ministry of Foreign Trade and Economic Cooperation established a 
liaison officer system for the Gazette together  with the provinces, autonomous regions and 
municipalities directly under the Central Govern ment and relevant departments under the State 
Council.  In March 2006, the Genera l Office of the State Council i ssued the "Circular on Further 
Improving Relevant Work Concerning China's Impl ementation of the Transparency Clause of the 
Protocol of China's Accession to the WTO(Guo Ba n Fa [2006] No. 23) which reiterated that the 
Ministry of Commerce is responsible for editing and publishing the Gaze tte, and required all the 
regions and departments to send a copy to the Mi nistry when promulgating the above-mentioned laws, 
regulation and other measures, or soliciting opinions fro m the public for their drafts so that they can 
be published on the Gazette on time.  With the strong support of all regi ons and departments, the edition and distribution of the Gazette was 
carried out smoothly and as a result, the transpar ency obligations of China's accession to the WTO 
were well fulfilled.  From its first issuance in 2002 to the end of May 2012, 762 issuances and 13 trial 
issues of the Gazette were published, with a total of 4,724 documents, includi ng 1,805 documents of 
the Ministry of Commerce, 2,247 from other depa rtments and 455 local regulations and measures 
(including 140 drafts for soliciting public opinions). 
 
Part II. Trade Policy Regime; Framework a nd Objectives; (1) Institutional and Legal 
Framework; (ii) Central-provincial rel ationships: paragraph 19, page 14: 
 
The Secretariat's report notes that the implemen tation and enforcement of national policies and 
measures is carried out mostly by counterpart agen cies of local governments.  It notes further that 
coordination between the national and local level re mains weak.  On the resolution of conflicts, the 
Report says that according to authorities, higher level agencies tend to use the argument local yields to 
central to solve conflicts.  
4. In cases of conflict, could China explain what  enforcement mechanisms it uses to ensure that 
sub-national level governments comply with national policies? 
 
5. In cases where the local level is not implem enting or enforcing national policies and 
measures, what means of enforcement are available to FIEs? 
 
4-5 Answer: The Legislation Law of the PRC states that  the Standing Committee of the NPR has the 
right to rescind local regulations in contradicti on with the Constitution, laws and administrative 
regulations.  The State Council has the right to change  or rescind inappropriate local rules.  China has 
set up record review system of laws and regula tions, according to the Or dinance on the Archivist 
Filing of Regulations and Government Rules, the legal office of the State Council will review the 
regulations and rules submitted to the State Council fo r filing.  Those that are in contradiction with 
administrative rules will be further submitted to th e standing committee of the NPC for review; the 
legal office of the State Council will also coordina te differentiated regula tions between local and 
department rules on a single item.  The legal o ffice will offer recommendation and submit it to the 
State Council for deliberation if consensus can't be achieved through coordination.  
 WT/TPR/M/264/Add.1 
Page 62 
 
 
  Part II. Trade Policy Regime Framework and Objectives; (3) Trade Agreements and 
Arrangements; (i) Participation in the World Trade Organization: paragraph 27, page 16:  
 Paragraph 27 of the Secretariat Report notes that so me of China's WTO notifications, namely those on 
state-trading enterprises, are cons iderably out-dated or overdue. 
 
6. Could the delegation from China please prov ide an update to WTO Members on its plans to 
provide an updated notification on state trading ent erprises in keeping with its obligations 
under Article XVII of the GATT? 
 
Answer:  The state trading regime of China, including  the products covered and the STR enterprises, 
did not have significant changes except that a coup le of products were no longer subject to state 
trading administration.  Besides, for a few products s ubject to state trading, some statistics required in 
the notification are not produced officially in China.  In view of these, China did not submit its state 
trading notification.  That said, if members expect China to submit the notification despite of the few 
changes, China will try to submit the notification as soon as possible. 
 
Part II. Trade Policy Regime; Framework and Objectives; (4) Foreign Investment Regime; (i) Recent Developments in FDI Po licy: paragraph 40, page 19:  
 
The Secretariat Report notes a revised Catalogue for the Guidance of Foreign Investment Industries 
(2011 version).      
7. To achieve greater clarity, can China provide explanatory notes to defin e sectors listed in the 
Catalogue?  Such definitions would benefit forei gn investors as they determine whether their 
projects are prohibited, restricted, allowed or en couraged.  As an example, it is not evident 
what IPR Service in the Encouraged Category refers to.     
 
Answer: We are coordinating competent agencies to assess the feasibility of providing such 
explanatory notes. 
 
8. Could China please explain what criteria it uses when it removes a sector from the 
encouraged category?  Can China confirm t hat all investments made in the Encouraged 
Category of the 2007 Catalogue will continue to receive preferential t reatment even if these 
sectors were removed from the Encourage d Category in the 2011 Catalogue?  The 
predictability in China's invest ment environment is beneficia l both to investing parties and 
recipient parties.  Once an investment is made  under the encouraged category, a category 
change for that sector should not lead to c hanges in the previously established preferential 
policies for a guaranteed, predictable period of time.      
 
Answer:  An array of macro- and micro economic indi cation and criteria are used to come up with 
Scientific decisions on which sector should be re moved from a particular category by taking into 
account the overall strategy and needs of own national economic development. 
 
Part III. Trade Policies and Practices by Measure;  (1) Measures Directly Affecting Imports; (i) 
Customs Procedures, Valuation, and Rules of Origin; (b) Pre-shipment inspection: 
paragraphs 10-11, page 25:       
 
The Secretariat Report outlines China's pre-shipment  inspection requirement for certain commodities, 
including those related to national security or  with high value or complicated technology. 
 
9. Does China publish guidelines on the pre-shipment inspection process? If yes, where? If no, 
when does China intend to publish these guidelines?  WT/TPR/M/264/Add.1 
 Page 63 
 
 
   
Answer: Pre-shipment inspection procedures for the import of used mechanical and electronic 
products shall be implemented in accordance w ith Administrative Measures for Inspection and 
Supervision of Imported Used Mechanical and Electrical Products (Decree No. 37 of 2002) and 
Procedural Requirements for Inspection and Supervis ion of Imported Used Mechanical and Electronic 
Products (Decree 53 of 2003) released by General Ad ministration of Quality Supervision, Inspection 
and Quarantine of the People's Republic of China.  In accordance with the legal requirements of the 
country stationed and the company's business situa tions, various designated pre-shipment inspection 
agencies shall also draft speci fic processes, and announce them all on their web sites. 
 
10. Could China explain what crit eria are used to determine wh ich commodities are related to 
national security, or which have high value or complicated technology?  
 
Answer : The projects involving users personal and property safety, health, and environmental 
protection are the high-risk imported used mechan ical and electrical products, which need pre-
shipment inspection.  High-value equipment refers  to the equipment of the country's large-scale 
introduction project.  If facts exist that the equipm ent does not meet the mandatory requirements of 
the Chinese national standards, it will cause huge econom ic losses to the enterpri ses.  There is no such 
item of complicated technology in the implementi ng regulations of the Commodity Inspection Law. 
 
11. In the case of pre-shipment inspection of high value or complicated technology, what 
measures are taken to ensure that  sensitive intellectual property rights are not divulged as a 
result of this inspection? 
 
Answer : Various overseas agencies that implement pre-shipment inspection bear the responsibility of 
confidentiality for the information involved in the inspection process, and in the relevant documents 
to the customer from all pre-shipment inspecti on agencies there will be relevant commitment to 
confidentiality.  General Administration of Qua lity Supervision, Inspection and Quarantine will 
investigate and treat any action of information leakag e.  So far, all pre-shipment inspection agencies 
can fulfill their confidentiality obligations properl y, and the General Administration of Quality 
Supervision, Inspection and Quarantine has not r eceived any complaint about leakage of sensitive 
intellectual property caused by the implem entation of pre-shipment inspection. 
 
Part III. Trade Policies and Practices by Measure; (1) Measures Directly Affecting Imports; (ii) Tariffs: paragraph 18, page 27:       
 
It is noted that the Customs Tariff Commission of  the State Council sets interim tariff rates for 
specific products.  
12. Could China please elaborate on the function of these interim tariffs, as well as under what 
conditions interim rates are applied? 
 Answer: Interim tariff rates are more favorable tari ff rates that are implemented upon certain 
imported important raw materials for industrial and agricultural production and key components of 
mechanical and electrical products (but only conf ine to the imported goods from countries and regions 
that have signed reciprocal agreement on tariffs with China) and upon some of exported resource 
products on the basis of the beneficial import tari ff rates and export tariff rates specified in Customs 
Tariff of Import and Export.  These tariff rates are generally set annually, and are subject to restoration to statutory tariff rates at any time based on needs.  Interim import tariff rates are the temporary tariff set in order to reduce the cost of  inputs of industrial import, while interim export 
tariff rates are the temporary adjustments to the expor t tariff in order to protect exhaustible resources. 
 
13. Could China indicate where a list of these interim rates is published?  WT/TPR/M/264/Add.1 
Page 64 
 
 
   
Answer: Office of Customs Tariff Commission of the State Council and Department of Tariff of 
Ministry of Finance of the People's Republic of China compile and release on a regular basis each 
year Import and Export Tariff of the People's Republic  of China, which is published and distributed 
by China Financial and Economic Publishing House.  
Part III. Trade Policies and Practices by Measure; (1) Measures Directly Affecting Imports; (ii) 
Tariffs; (d) Tariff-rate quotas: paragraph 31, page 32:  
 
It is noted that the process of quota allocation and re-allocation of China's MFN tariff-rate quotas is 
managed by the National Development and Refo rm Commission (NDRC) and the Ministry of 
Commerce (MOFCOM).  
14. Could China please elaborate on the processes of quota allocation and re-allocation, 
especially as it pertains to state-traded goods?       
 
Answer:  Since China joined the WTO, Chinese G overnment has implemented management of 
agricultural tariff quotas and of state trading strict ly in accordance with its commitments to WTO and 
relevant laws and regulations , has announced on schedule annual amounts of import tariff quotas of 
related agricultural products, its time of distribu tion and redistribution, its application conditions, 
handling procedures and others, has improved the u tilization ratio of the quotas, and has timely 
notified relevant information to the WTO.  The dist ribution and redistribution process of import tariff 
quotas of agricultural products (including state trad ing) is established in accordance with Interim 
Measures for the Administration of Import Tariff Quotas of Agricultural Products.  Part III. Trade Policies and Practices by Measure; (1) Measures Directly Affecting Imports; (iv) Import prohibitions and licensing: paragraph 43, page 35:       
 
Paragraph 43 states that China applies automatic  import licenses to monitor certain imports for 
statistical purposes. 
 
15. Could China please provide greater clarity as to  what is meant by for statistical purposes? 
How does China intend to use that information?       
 
Answer: the purpose for China to implement the automatic import license administration is to 
strengthen the real-time monitoring of imports, to grasp the overall situation of imports and provide 
public information services for industries, which is  in line with relevant WTO provisions.  By 
counting the automatic import licenses applied fo r by companies, we can understand the overall 
situation of relevant imported goods  earlier than customs statistics so that companies can make 
reasonable arrangements for imports and the impor ted goods can be delivered in a balanced and 
orderly manner and therefore avoid over-concentr ated arrival of goods resulted from haphazard 
imports, as well as other unfavorable situation.  When there is abnormal situation in importing of 
certain commodities, or when companies or govern ment departments need to understand the import 
situation of certain goods earlier than customs statis tics, we will consider the implementation of the 
automatic import license administration for the goods in question, or we will consider abolishment of 
the automatic import license administration. 
 
Part III. Trade Policies and Practices by Measure; (1) Measures Directly Affecting Imports; 
(v) State Trading: paragraphs 44-45, page 35:      
 
The Secretariat Report stat es that certain products (including sugar,  grain, cotton, chemical fertilizer 
and crude oil) are subject to state-trading on imports into China to protect, among other things, a 
stable domestic supply.   WT/TPR/M/264/Add.1 
 Page 65 
 
 
   
16. Could China please clarify the requirements that must be met by non-State Trading 
Enterprises in order to import products subject to state trading?  
 Answer : As long as the products are consistent with Interim Measures for the Administration of 
Import Tariff Quotas of Agricultural Products and they  meet the requirements of the detailed rules and 
regulations for application establishe d in accordance with the Measures. 
 
Part III. Trade Policies and Practices by Measure; (1) Measures Directly Affecting Imports; (vi) Contingency trade measures: paragraph 62, page 39:      
 
It is noted that China has not yet applied Article 56 of the AD Regulations. Canada notes that questions have been raised in the WTO Committe e on Anti-Dumping practices concerning Article 56. 
  
17. Could China comment on the conformity of th is provision with the Anti-dumping Agreement? 
 
Answer:  According to WTO Protocol, China has formul ated and promulgated domestic law regarding 
trade remedies, established and optimized trade remedy legal system.  China's trade remedy rules follow the material and procedural requirements stated  in WTO Protocol to facilitate interested parties 
to participate in investigation procedure. 
 
Part III. Trade Policies and Practices by Measure; (1) Measures Directly Affecting Imports; (vi) 
Contingency trade measures: pa ragraph 70, page 42:     
 
The differences in China's anti-dumping and countervailing investigation procedures are noted.    
 
18. As transparent, predictable rules are an impor tant element of the multilateral trading system, 
would China indicate if there are any pl ans to more fully develop the countervailing 
procedures so that they are as developed as th e anti-dumping investigation procedures, i.e. 
provide for new shipper reviews, interim reviews, price undertakings and judicial reviews?     
 
Answer:  China will amend and optimize relevant laws, regulations and department rules, and timely 
launch new countervailing investiga tion procedural provisions, as situation needs according to the 
requirements of countervailing investigation practices. 
 
Part III. Trade Policies and Practices by Measure; (1) Measures Directly Affecting Imports; (vii) Standards and Other Technical Requirements: paragraphs 82 and 101-108, pages 45, 51:     
 
Page 45, paragraph 82 of the Secretariat Report indi cates that 387 notifications were sent out between 
1 January 2009 and 31 October 2011, while on pa ge 51, paragraph 102, China indicates that 
376 notifications were sent out between  1 January 2009 and 31 October 2011. 
 
19. Given the number and complex nature of China's SPS notifications, would China consider 
submitting all of its SPS notifications in Englis h, and with English versions of all supporting 
documentation (e.g., copies of relevant legi slation, information on relevant testing 
methodologies, etc...) to facilitate the provis ion of timely and fulsome comments?      
 Answer : China's SPS notification involves many departme nts, and a lot of information collection, 
analysis and collation.  After the accession to the WTO, China establishe d an inter-departmental 
working mechanism of SPS notification, and bega n a more effective operation.  China, as a 
developing member, overcomes the constraints of ca pacity ,resources and language to conscientiously 
fulfill the obligation of transparency.  At this  stage now the huge language barrier remains by 
submitting all of its SPS notifications with English versions of all supporting documentation, but we WT/TPR/M/264/Add.1 
Page 66 
 
 
  will continue our efforts to consta ntly improve our SPS notification, to fulfill our commitments in the 
WTO. 
 
Part III. Trade Policies and Practices by Measure; (1) Measures Directly Affecting Imports; (vii) Standards and other Technical Requirement s; (a) Standards and Technical Regulations: 
paragraph 84, page 46:       
The Secretariat Report outlines that trade, local a nd enterprise standards become null and void once a 
national standard enters into effect. 
 
20. Could China please explain: 
a. How those lower-levels of standards are repealed once the national standard comes 
into effect? 
b.  How national standards are enforced  over those at a lower level? 
 A-B Answer: Once nationals standards come into effect, re levant trade and local standards shall be 
annulled after notices are published. 
 
Canada notes that there are many standards in China at numerous levels (i.e. central government, 
sub-central, industry etc.) yet there does not seem to be one central portal to which industries can 
consult which contains all levels of standards.  Canada has concer ns that this practice makes it 
difficult for enterprises to know which standards must be followed.  Further, many standards can only 
be obtained by hard copy while some cannot be obtain ed at all (particularly those related to security). 
 
21. Does China have plans to create one electronic por tal that lists all standards that industries 
and companies must adhere to and that makes elect ronic copies of those standards available? 
 
Answer: The whole texts of all the security-related com pulsory national standards can be found at the 
official website of SAC.  Part III. Trade Policies and Practices by Measure; (1) Measures Directly Affecting Imports; (vii) Standards and other Technical Requirement s; (a) Standards and Technical Regulations: 
paragraph 85, page 46:       
 
The secretariat report outlines the levels of standard s in China.  The report explains that if, for 
example, a national standard is not available, trad e standards may be formulated.  However, the trade 
standards will become null and void automatically after corresponding national standards enter into 
effect.  The report goes on to state that where ther e are already national, trade or local standards, 
enterprises are encouraged to formulate and apply enterprise standards that are stricter than the 
corresponding standards.  
22. Could China please explain what is the basis for encouraging enterprises to formulate new, 
stricter standards if there are standards that already exist?  
 
Answer: Encouraging enterprises to formulate stricter standards aims at promoting technological 
advancement, improving product quality a nd achieving innovative development. 
 
Part III. Trade Policies and Practices by Measure; (1) Measures Directly Affecting Imports; 
(vii) Standards and other Technical Requirement s; (a) Standards and Technical Regulations: 
paragraph 86, page 46-47:   
 
There are many categories for which standa rds are mandatory in China.      
  WT/TPR/M/264/Add.1 
 Page 67 
 
 
  23. Could China specify which products are important products that need to be controlled by the 
State? 
 
Answer: Details can be found in the Implemen tation Rules of Standardization. 
 
Part III. Trade Policies and Practices by Measure; (1) Measures Directly Affecting Imports; 
(vii) Standards and other Technical Requirement s; (a) Standards and Technical Regulations: 
paragraph 88, page 47:  
 
The Secretariat Report outlines the process by whic h standards are developed in China. Once a 
standard is drafted, it is circulated to so licit comments and posted on the SAC website.     
 
24. Could China please explain:    
c. At what stage are the drafts circulated? Fo r example, are the drafts circulated when 
the standard is almost finalized or as the standard is being developed?     
d. To whom is the draft circulated?      
e. For those drafts posted on the SAC website, how long is the comment period?    
 
c-d-e Answer: This stage is harmonized with the formula tion procedure of international standards, 
which belongs to Stage CD, mainly referring to so liciting opinions from relevant working units in 
production, marketing, application, R&D, and testing.  The normal period is two months. 
 
In the same bullet, the report notes that for standa rds of public concern or ot her important standards, 
the drafts are posted on the SAC website for comment .  Could China please explain what constitutes a 
standard of public concern or an important standard ?  Canada notes that posting all draft standards as 
they are being developed creates transparency th at can better prepare industry to abide by Chinese 
standards.       
25. Does China have plans to post all standards and not just those it deems to be important or of 
public concern?       
 Answer: SAC shall solicit opinions from relevant wo rking units in production, marketing, 
application, R&D, and testing, but to put standard s online before publication shall be decided by that 
particular industry involved.  
The Secretariat Report explains that of the 489 technical committees in China, only 15% included 
representatives of foreign companies.      
26. Could China confirm that FIEs are welcom e to participate in technical committees?  
 
Answer: SAC, in the spirit of openness and transpar ency, provides equal opportunities for Foreign 
Investment Enterprises (FIEs) to participate in form atting and revising standard s.  FIEs can apply to 
join in relevant standardization technical committees  (TCs) in line, following related rules.  Except 
TCs on national security and information security, etc. all legally registered FIEs can participate in 
relevant as members.  
27. Could China explain then why foreign participat ion on technical committees is so low?  
Canada believes that the highest quality of standards can be developed through the 
collaboration of experts, both domestic and international.  
 
Answer: The figure Canada mentioned is the ratio of FIEs as P members (formal members) in TCs.  
However, in fact, the ratio of FIEs as P members in TCs, SCs and SWGs is about 25%, and lots of 
FIE representative have participated via O membership (observers) and consultancy.  WT/TPR/M/264/Add.1 
Page 68 
 
 
   
The ratio cited is the objective figure and no limita tion is imposed by any government agency.  FIEs 
participation relies on the development of that indus try, the requirement and review by that TC, the 
willingness of FIE to join, and the conformity of appl ication to become P member or other members.  
In a word, the ratio of 25% has proved that many FIEs have been participating substantively in 
China's standardization, though the participation vari es because of differentiation in TCs, industries, 
FIE qualities.  No single ratio can be cited to inte rpret that FIEs particip ation is low or high. 
 
Part III. Trade Policies and Practices by Measure; (1) Measures Directly Affecting Imports; 
(vii) Standards and other Technical Requirements;  (b) Product certification: paragraphs 93-98, 
pages 48-49:  
 
Under the CCC system, only products tested, in spected and certified by Conformity Assessment 
Bodies (CAB) recognized by the Certification a nd Accreditation Administration of the People's 
Republic of China (CNCA) can be sold in China. 
 The process companies must follow in  order to test and certify their products under the CCC system is 
lengthy, complicated and costly.  Th is process can also lead to the duplication of work, since often the 
same product is already certified for sale in Cana da by a Canadian certification body.  China 
committed that it would not maintain multiple or dup licative conformity assessment procedures in its 
Protocol of Accession (paragraph 192).  
28. Could China explain why it does not accredit foreign Conformity Assessment Bodies (CAB), 
as is common international practice?     
 
Answer: According to the Regulations on Certification and Accreditation of PRC, products listed in 
the 3C Catalogue cannot be marketed, imported or  used in other business activities if without 3C 
certificates.  The Rules on Management of Compulsory Certification stipulate that, generally speaking, CCC Certification is issued within 90 days since acceptance.  
 
29. Would the CNCA accredit foreign CABs to i ssue certificates of conformity for products 
subject to its Compulsory Product Certification System (CCC)? 
 
f. If yes, what would be the process for a foreign lab to be accredited under the CNCA? 
 
Answer: China abide by WTO/TBT Agreement and Regul ations on Certification and Accreditation 
of PRC, and China is actively promoting and a llowing mutual recognition in international product 
testing within the framework of multilateral or bilateral MRAs.  As an IECEE-CB member, China 
recognizes CB testing certificate issued by other IECEE-CB members.  There are also concerns that submitting equipm ent to the CNCA for testing and certification 
constitutes a risk to the protection of intellectual pr operty.  This concern reflects the experience of 
foreign companies who allege confidentiality breach es in the Chinese agencies which hold intellectual 
property information.   
30. Could China explain the steps used by certifiers to ensure intellectual property 
rights/proprietary information is safeguarded?     / 
 
Answer: Please refer to the website: www.sipo.gov.cn/ 
  WT/TPR/M/264/Add.1 
 Page 69 
 
 
  Part III. Trade Policies and Practices by Measure; (1) Measures Directly Affecting Imports; 
(vii) Standards and other Technical Requirement s; (b) Product certification: paragraph 97, 
page 49: 
 The Secretariat Report notes that the China Qual ity Certification Centre (CQC) has more than 
200 designated laboratories in China and abroad.      
31. Could China please indicate where the CQCs abroad are located and what functions they 
carry out? 
 
Answer: Please refer to the website: www.aqsiq.gov.cn/ 
 
Part III. Trade Policies and Practices by Measure; (1) Measures Directly Affecting Imports; 
(vii) Standards and Other Tec hnical Requirements Section; (c ) Sanitary and Phytosanitary 
Measures: paragraphs 99-110, pages 49-53: 
 
32. With respect to AQSIQ's "Provisions on the Ad ministration of the Registration of Foreign 
Manufactures of Imported Foods", what are the PRC 's intentions for implementation of these 
regulations?  Will they be introduced one commod ity at a time?  If so, can the PRC share a 
schedule of which commodities will be affected and in what order? 
 
Answer: See below.  
 
Part III. Trade Policies and Practices by Measure; (1) Measures Directly Affecting Imports; 
(vii) Standards and Other Technical Requirement s: paragraphs 80, 93, 99, and 100, pages 45, 
48-50:  
 
33. Given China's ongoing focus on enhancing the qua lity and safety of its domestic agricultural 
production and improving the laws and regul ations on import product quality and safety, 
what measures is China taking to ensure that  the measures and requirements to register 
foreign exporting manufacturers/facilities will be done in a timely and least trade-disruptive 
manner?  Could China's regulatory bodies please provide a procedural document highlighting the steps required by CNCA in order for foreign food producers and manufacturers to register for export to China?   
 
32-33Answer: In order to protect health and safety of Chinese consumers, China regulates overseas 
manufacturers of imported food listed in The Catal ogue of Administrative Measures for Registration 
of overseas Manufacturers of imported Food whic h has been issued by the Announcement No. 73 
2012 of AQSIQ.  China takes full consideration of the principles of trade facilitation, the current 
regulations of other countries and regions. Its implementation will have a sufficient transitional 
period.  According to the Admi nistrative Measures for Registration of Overseas Manufacturers of 
Imported Food, CNCA is responsible for implemen ting and supervising the registration of overseas 
manufacturers of imported food.  For more information about the registration procedure please refer to http://www.aqsiq.gov.cn/ 
zwgk/jlgg/zjl/2011_1/201203/t20120330_212967.htm.  Part III. Trade Policies and Practices by Measure; (1) Measures Directly Affecting Imports; (viii) Government Procurement:  paragraph 111, page 53: 
 
Paragraph 111 notes that China objectives in procurem ent include the promotion of better governance.  
 WT/TPR/M/264/Add.1 
Page 70 
 
 
  34. Has China considered, or does China invoke any procurement measures to support 
sustainable procurement, particularly en vironmental sustainable procurement? 
 
Answer : According to the Government Procurement Law of PRC, government procurement should 
be conducive to the accomplishment of environmen tal protection and other goals set by national 
economic and social development policies.  Chinese government has come up with a series of policies which stipulate preferential or mandatory procur ement of energy-saving and environment-friendly 
products. 
 
Part III. Trade Policies and Practices by Measure; (1) Measures Directly Affecting Imports; 
(viii) Government Procurement:  paragraph 113, page 53:  
 
The Secretariat Report notes that government pr ocurement data covers only procurement by 
government departments, institutions, and public  organizations using fiscal funds for goods, 
construction and services listed in the Centralized Pr ocurement Catalogue.  However, this appears to 
only cover a very small amount of government procurement.   
35. Would China confirm whether projects regulated by the Bidding and Tendering Law such as 
transportation, construction, telecommunicati ons, etc. are excluded from the Central 
Procurement Catalog?  Can China provide any clarification on the value of procurement of 
goods and services that is not included in the Central Procurement Catalog? 
 
Answer: China confirms that, projects such as transportation, construction, telecommunications etc. 
are excluded from the Central Procurement Catalog.  In 2010, the value of government procurement 
projects excluded from the Central Procurement Catalog reached RMB 110 billion. 
 
Part III. Trade Policies and Practices by Measure; (1) Measures Directly Affecting Imports; 
(viii) Government Procurement:  paragraph 114, page 54: 
 
The Secretariat report notes that local governments account for 93% of the total value of government 
procurement. 
 
36. Could China clarify how 93% was calculated? Does China have any data available on the 
breakdown of procurement by local governments, for example by province, municipality or by 
goods, services, and construction services?     
 
Answer: 
 2008 2009 2010 
Total 599.09 741.32 842.2 
Goods 255.92 301.06 317.63 
Central government 32.36 30.23 30.82 
Local governments 223.56 270.83 286.81 
Construction, engineering services 297.84 385.84 453.66 
Central government 19.25 23.41 17.59 
Local governments 278.58 362.43 436.07 
Other services 45.33 54.42 70.91 
Central government 7.36 8.42 8.28 
Local governments 37.97 46 62.63 
 
37. Given that the majority of government proc urement occurs at sub-central levels of 
government, and recognizing that an essential element of transparency is notification of 
procurement opportunities, can China con firm whether it maintains a catalogue of 
procurement portals at provincial and local government levels?         WT/TPR/M/264/Add.1 
 Page 71 
 
 
   
Answer: The Ministry of Finance has designated www.ccgp.gov.cn to release government 
procurement information.  The provincial areas a ll have established local government procurement 
portal websites, which realize interconnecti on and intercommunication with www.ccgp.gov.cn. 
 
38. Does China have any plans to create a central portal for government procurement contracts 
at all levels of government? 
 
Answer: Please refer to the same answer above. 
 
Part III. Trade Policies and Practices by Measure; (1) Measures Directly Affecting Imports; 
(viii) Government Procurement: paragraph 116, page 54:    
 
Paragraph 116 notes that China does not consider procurement by SOEs as government procurement. 
However, footnote 191 on page 73, indicates that SOEs include wholly state-owned enterprises or 
state-controlled enterprises.  Canada understands  that if an SOE procures a good or service with a 
view to commercial resale or with a view for the use in the production of goods for commercial resale 
that such procurement would not be considered government procurement.  
39. Do Chinese SOEs engage in procurement for pur poses other than commercial use or use in 
the production of goods for commercial resale? Are there any circumstances in which an 
SOE would be engaged in procuremen t for a government purpose?    
 
Answer: Chinese SOEs are independently operated market  entities, and their procurements are of 
commercial purpose. 
 
40. Are there any laws, regulations or requiremen ts imposed by the government on procurement 
of goods and service by SOEs? 
 
Answer: Chinese SOEs are governed by civil, and commerc ial legal systems, and their procurements, 
as those of other private enterprises, shall be govern ed by the Contract Law of the People's Republic 
of China.  
Part III. Trade Policies and Practices by Measure; (1) Measures Directly Affecting Imports; 
(viii) Government Procurement: paragra phs 118-119, pages 54-55:        
 
According to Article 10 of China's Government Pr ocurement Law, the Government is required to 
procure domestic goods, projects and services.  However, the Secretariat Report states that there are no provisions pertaining to local content or rules of origin to determine if a product is produced domestically.   
41. Could China please explain how it determin es if a product is produced domestically 
 
Answer: Relevant authorities of the Chinese Governme nt are, in accordance with Government 
Procurement Law of the People's Republic of Chin a, formulating Administrative Measures for the 
Government Procurement of Domestic Products, to make provisions for the identification criteria of 
domestic products. 
 
42. What criteria are used?    
 
Answer: The public opinions have been solicited on the Administrative Measures for the Government 
Procurement of Domestic Products in May 2010, including the identification criteria of domestic WT/TPR/M/264/Add.1 
Page 72 
 
 
  products.  Currently, relevant authorities are maki ng further amendments on such measures according 
to feedback opinions from all related parties. 
 
43. Paragraph 118 notes that exceptions to the domes tic requirement are routinely made when 
the goods, products or services required a re unavailable or unavailable on reasonable 
commercial terms.  How does the government of China determine that goods, products or services are unavailable on reasonable commercial t erms?  What is the process for procuring 
entities who seek an exemption to this requirem ent?  When processing an exemption, do 
authorities take into account the origin of goods to be procured? 
 
Answer: In accordance with relevant prevailing provi sions, when the goods, products or services to 
be procured are unavailable or unavailable on r easonable commercial terms, experts shall be 
organized to demonstrate, and the demonstrati on opinions shall be reported to the financial 
department for approval.  Public bidding is mos tly applied when the government buys products from 
abroad, without distinction of origin. 
 
Part III. Trade Policies and Practices by Measure; (2) Measures Directly Affecting Exports; (iii) 
Export Taxes:  paragraph 139, page 58:  
 It is noted that China applies both statutory and in terim export taxes, and th at interim rates may be 
higher than statutory rates.  
44. Could China please explain under what condition the interim rate would be higher than the 
statutory rate? 
 Footnote 133 notes that in Annex 6 of China's Pr otocol of Accession, the statutory export tax rates 
would be the maximum export tax levels.  
45. Could China please explain how applying an interim rate which is higher than the statutory 
export tax rate is consistent with Annex 6 of China's Protocol of Accession?    
 44-45 Answer : The interim rate is formulated in accordan ce with Article 4 of the Regulations of the 
People's Republic of China on Import and Export Du ties.  Currently, considering resources, energy 
consumption and pollution, pig iron, among export pr oducts being taxed, has an interim rate higher 
than the statutory export tax rate.  We believe  this is in line with the rules of WTO.  
 
Part III. Trade Policies and Practices by Measure;  (2) Measures Directly Affecting Exports (vi) 
Export Prohibitions, Restrictions, and Li censing; (b) Export Quotas and Licensing: 
paragraph 150, page 60:  
 
"For the remaining tariff lines (covering mainly substances depleting ozone, and some metals and 
their products), exporters must obtain a permit prio r to applying for a licence.  Export permits are 
granted by the Ministry of Environmental Prot ection (for ozone-depleting substances) and MOFCOM 
(for others). After the exporter obtains the permit, an  export licence should be issued automatically by 
MOFCOM or its authorized agencies."  
46. Could China explain the export permit allocatio n process?  Is it a matter of fulfilling paper 
work which, if adequately fulfilled by the demand er leads automatically to the allocation of 
the permit, or is there is a quota of export permits that are alloca ted through a specific 
process? 
 
Answer:  In accordance with the relevant requirements of the Montreal Protocol on Substances that 
Deplete the Ozone Layer, in order to better fulf ill the Protocol, the Chinese government established in  WT/TPR/M/264/Add.1 
 Page 73 
 
 
  2000 the licensing system where the import and e xport of ozone-depleting substances are managed, 
and Ministry of Environmental Protection, Ministry of Commerce and General Administration of Customs jointly established State Management Office of Import and Export of Ozone-Depleting 
Substances to conduct management of import and export of ozone deple ting substances.  The 
Administrative Measures on Import and Export of Ozone-Depleting Substances promulgated by the 
Chinese government provides for the application procedures and requirements for export of ozone-depleting substances.  In accordance with the requirements of the Measures, the units engaged 
in export of ozone-depleting substances are require d to submit written application materials to the 
Management Office of Import and Export, including  application form, contract, relevant supporting 
materials and others.  The application form incl udes the exporting country, importer, manufacturer (or 
user) of ozone-depleting substances, name of the su bstance, code number, qua ntity, purpose and other 
information. In receipt of the written application submitted by the applicant as required, the Import 
and Export Office shall examine and verify the written application in accordance with the requirements of the Protocol and of China's releva nt provisions.  When necessary, it may also take 
other measures to contact the country of the other si de and obtain confirmatio n.  Take advance notice 
procedures as an example, approval documents will no t be issued before their national accreditation is 
got.  Only under the circumstances that the contract is true, the requirements of the Protocol are met, 
the requirements of the country of the other side  are met and others, can approval documents be 
issued.  Upon receipt of the approval documents, th e exporter shall exchange them at authorities of 
commerce into a license for which the author ities of commerce will no longer conduct an 
examination. 
 
47. How does this process apply specifically to nat ural resources (i.e. raw materials which 
include minerals)? 
 
Answer:  There are many types of ozone-depleting substances. Same as the United States, the 
European Union, and other countries or regions, Ch ina will conduct adjustments for its export policy 
according to the requirements of the Protocol and the implementation progress of various countries, 
banning some substances, conducting license ma nagement to other substances, and quota 
management to still others.  For example, since 2000, China has implemented quota license 
management to CFCs (chlorofluorocarbon substances). 
 
Part III. Trade Policies and Practices by Meas ure; (3) Measures Affecting Production and 
Trade; (ii) Subsidies and other government assistance: paragraph 193, page 69:   
48. Given the large economic stimulus package th at was implemented between 2008 and 2010, 
would China please elaborate on which secto rs of the economy received support through 
these measures? 
 
Answer : In response to the severe impact of the intern ational financial crisis, in the second half of 
2008, China implemented a proactive fiscal polic y and moderately loose monetary policy, and 
promptly launched a package of plans to deal with  the impact of global financial crisis, including the 
4 trillion yuan investment program formed through the social capital driven by the 1.18 trillion yuan 
of central government investment within the two ye ars.  The investment of 4 trillion yuan is focused 
on a total of seven areas including affordable hous ing projects, rural livelihood projects and rural 
infrastructure, critical infrastructure, health care,  education, culture and other social undertakings, 
energy conservation, emission reduction and ecolo gical construction, independent innovation and 
industrial restructuring, as well as post-disaster  restoration and recons truction after Wenchuan 
earthquake.  As of the end of 2010, the investment  plan of 4 trillion yuan has been satisfactorily 
completed and it has made remarkable achievements.  WT/TPR/M/264/Add.1 
Page 74 
 
 
  Part III. Trade Policies and Practices by Meas ure; (3) Measures Affecting Production and 
Trade; (ii) Subsidies and other government assistance: paragraph 191, page 69: 
 It is noted that China issues circulars describi ng government support available in line with China's 
medium- and long-term plans, often with respect to sector-specific industrial policies.  Canada 
expresses concern at the lack of transparency with  respect to these circulars and the support programs 
therein, particularly when the financial s upport is offered at the sub-central level.  
 
49. What measures is China taking to enhance tr ansparency with respect to these circulars?   
 
Answer : To boost the development of emerging industr ies and high-tech industries, the Chinese 
government have formulated and implemented rele vant policies, which have all been published, 
including Resolution on The Cultivation and Deve lopment of Strategic Emerging Industries and 
Notice on Policies for Further Encouragement for the Development of Software Industry and IC 
Industry, etc.  So far relevant departments ar e studying specific policies and measures to be 
promulgated successively.  And in accordance with  the Chinese government, they will improve the 
releasing of policies, planning and projects to enhance transparency of the information of the government.  Part III. Trade Policies and Practices by Meas ure; (3) Measures Affecting Production and 
Trade; (ii) Subsidies and other government assistance: paragraph 192, page 69:      
 
Canada notes that China's last WTO subsidy notif ication was made in 2 009 and covered programs 
from 2005-2008.  Canada also notes that China has not notified any programs at the sub-central level.  
50. What steps is China taking to ensure that all subsidies are notified to the WTO as per China's 
obligations? 
 
Answer:  Subsidy notification entails huge amount of wo rk on information gathering and analysis and 
this is particularly a challenge for China as a la rge developing country.  To fulfill its notification 
obligation under the SCM Agreement systematically, China since its WTO accession has concentrated 
its efforts on notifying comprehensively central pr ograms as a first step, and would then extend its 
efforts and experiences to cover those at the sub-central  level.  Now that substantial progress has been 
made in fulfilling the transparency obligation of th e subsidies at the central level, China will work 
towards incorporating local subsidies in its future notifications.  Although at this stage it is still 
difficult to propose a timetable, China will accel erate its efforts in this regard.   
 
Part III. Trade Policies and Practices by Meas ure; (3) Measures Affecting Production and 
Trade; (ii) Subsidies and Other Government A ssistance; (c) Assistance to the Automotive 
Sector: paragraph 200, page 71:  
 The Secretariat Report notes that China has started to provide lump sum grants to consumers 
purchasing certain energy-saving cars.   
51. Could China please confirm whether the promotio n catalogue used to identify eligible new 
energy-saving or new-energy cars includes foreign as well as domestic models of cars? 
 Answer: Drawing on the promotion experience and practices of other countries, China has begun 
new-energy cars promotion in the public service sector s of 25 pilot cities and private sectors of 6 pilot 
cities.  This promotion includes energy-sav ing cars under the Energy-saving Product People 
Benefiting Project Energy-saving Vehicles (PVs wi th a capacity lower than 1.6 liters) Promotion 
Catalogue and new-energy cars under the Recommende d Models Catalogue for the Energy-saving 
and New-energy Vehicles Promotion Pilot Project. Currently, no imported models are listed in the  WT/TPR/M/264/Add.1 
 Page 75 
 
 
  two catalogues due to the following reasons.  First, most imported cars are with capacities larger than 
1.6 liters, and foreign automobile enterprises have not applied to enter the catalogues; second, the 
technology of new-energy cars is not mature enough and the performance of such cars need to be 
improved during the pilot project.  Imported new-energy cars are not included in the catalogues for 
now to ensure safety and reliability.  
Part III. Trade Policies and Practices by Meas ure; (3) Measures Affecting Production and 
Trade; (ii) Subsidies and other government assi stance; (d) Assistance to small and medium-
sized enterprises: paragraph 204, 71:   
The report notes that enterprises making low profits receive preferential tax treatment.   
52. Could China please explain why enterprises making low profits receive preferential tax 
treatment? 
 
Answer: Small low-profits enterprises play an irre placeable role in promoting economic growth, 
boosting employment, and improving scientific a nd technological innovation ability.  Providing 
support for small and weak economic entities is ge nerally adopted by countries across the world.  
 
Part III. Trade Policies and Practices by Meas ure; (3) Measures Affecting Production and 
Trade; (iv) Price controls: paragraphs 212-217, pages 72-73: 
 
It is noted that China uses price controls to regulate the cost of certain goods and services. 
 
53. Would China indicate what steps, if any, are being taken to reduce the influence of the central 
government in setting prices? 
 
Answer:  Only some special commodities prices are currently set by the government, mainly 
including few key goods closely related to economic growth and peoples life, few scarce 
commodities, naturally monopolized products, ke y public utilities and pub lic-welfare services. 
Generally the prices can indicate product costs and th e supply and demand in the market.  What China 
is doing is much the same as other countries and do es not violate the requirement of market economy.  
Meanwhile, the Chinese government is making efforts to accelerate pricing reform and environmental 
charging reform of natural resources including petroleu m, power and natural gas, in the hope that a 
pricing mechanism can be set up to well indi cate the markets supply and demand, resources 
scarceness and the damage costs of s to nature. 
 
Part III. Trade Policies and Practices by Meas ure; (3) Measures Affecting Production and 
Trade; (v) State-owned enterprises, private enterprises, and corporate governance; Table III.8 Number of enterprises, 2008-2010, page 74:  
 The Report includes data on the number of enterprises, including the number of Foreign Invested 
Enterprises (FIEs), in the years 2008, 2009 and 2010.  
54. Taken together, the number of Chinese enterprises (SOEs, coll ectively-owned enterprises and 
domestic private enterprises) increased by 20 % to 9.56 million between 2008 and 2010.  
During the same period, the total number of FI Es (equity joint ventures, contractual joint 
ventures and wholly foreign-owned enterprises)  was effectively unchanged, rising from 
288,069 to 288,088. How does China account for the stagnation in FIE growth at a time when China's real GPD was expanding at  an annual rate of over 9%? 
 
Answer: It's normal that some FIEs withdraw from Chinese market in light of market situation and 
their corporate strategies. According to MOFCOM  data, newly established FIEs amounted to over WT/TPR/M/264/Add.1 
Page 76 
 
 
  20,000 annually for 2008-2011.  For 2011 it numbered 27,700.  The value of FDI also grew during the 
period, up to 23.6%, 17.4% and 9.7% respectively fo r 2008, 2010, 2011.  According to the World FDI 
report 2011 published by UNCTAD, China s till remains as prime destination of FDI. 
 
55. The data also show a drop in the number of equity joint venture FIEs and contractual joint 
venture FIEs with corresponding increases in  the number of wholly foreign-owned 
enterprises. Can China explain why foreign companies are turning away from equity and contractual joint ventures as a business model? 
 Answer:  Over the past 3 decades, FDI forms diversified  from equity and contractual JV to wholly 
owned foreign FIEs, with the  Improvement of China's investment climate and administration 
procedures, as a result, joint ventures is no longe r the only choice when foreign investors are looking 
for business opportunities in China.  Part III. Trade Policies and Practices by Meas ure; (3) Measures Affecting Production and 
Trade; (v) State-owned enterprises, private enterprises, and corporate governance: paragraph 224, page 75:  
China recently committed to steadil y increase the dividend payout ratio of SOEs and to increase the 
number of both central and provincial SOEs that pay dividends to the government.  Canada notes that 
dividends paid by SOEs have been increased for a number of industries, but that financial services and 
telecommunications SOEs been excluded from the list of SOEs paying dividends. 
 
56. Could China please explain why? 
 
Answer:  First, telecommunication SOEs are in the list of SOEs paying dividends.  In fact, 
telecommunication SOEs have been included sin ce 2007 when a pilot project of central SOEs 
operating budget was launched.  Second, financial service SOEs in China carry out management 
procedures, determine the dividend payout ratio and pay the dividends according to the provisions of 
the Company Law of the PRC and other related laws  and regulations.  Therefore, financial service 
SOEs pay dividends to their stockholders, includi ng the government.  The statement preceding the 
question is not correct.  
57. Are there future plans to increase further and how are the percentages determined? 
 
Answer:  According to the Circular of the Ministry of Finance on Relevant Issues Concerning the 
Operating Budget for State-Owned Capital of Ce ntral Enterprises (Cai Qi [2010] No. 392), the 
collection ratios of the income from state-owned capital of central enterprises shall be increased 
appropriately since 2011, and the specific collection ratios shall be implemented on the basis of the 
following four categories.  Category 1 includes SOEs  of resource-based industries and its ratio has 
been raised from 10% to 15%;  category 2 includ es SOEs of regular competitive industries and its 
ratio from 5% to 10%;  category 3 includes defens e enterprises, transformed research institutes and 
other enterprises newly put in the category, and its ratio is 5%;  category 4 refers to policy-based 
enterprises which are exempt from paying dividends to the government.  The percentage shall be 
increased gradually with differentiation among cat egories so as to reach a reasonable level. 
 Part III. Trade Policies and Practices by Meas ure; (3) Measures Affecting Production and 
Trade; (v) State-owned enterprises, Private Enterprises, and Corporate Governance; (a) Reform of State-owned Enterprises: paragraph 226, page 75: 
 
The secretariat's report notes that a joint report of the World Bank and the Development Research 
Center of China's State Council argues that the industries and sectors that must maintain SOE 
dominance in China are too broadly defined, and s uggests limiting the range of industries and sectors.   WT/TPR/M/264/Add.1 
 Page 77 
 
 
  The report also suggests that China define a clearer  state-ownership policy regarding the disposal of 
SOEs non-tradeable shares, and private particip ation through SOE equity diversification. 
 
58. Does China intend to implement the suggestions  of the World Bank and the Development 
Research Centre of China's State Council?  If  so, what are China's implementation plans? 
 
Answer: Since the reform and open-up, a basic multi-o wnership economic system has been founded, 
with public ownership as its main body and other owne rships developing all together.  To guide the 
healthy development of private investment, the Stat e Council released in 2010 Several Opinions of the 
State Council on Encouraging and Guiding the Hea lthy Development of Private Investment (Guofa 
[2010] No. 13), which expanded the scope of private investment.  In May 2012, Guiding Opinions on Actively Introducing Private Investment into the Reorganizing of State-Owned Enterprises 
(Guozifachanquan [2012]No. 80) was released, requiri ng central enterprises and local state-owned 
assets commissions to introduce private investment in to the reorganizing of state-owned enterprises, 
develop mixed-ownership economy, set up modern property system, boost operation mechanism shift 
of state-owned enterprises and development mode, and gradually lower the proportion of state-owned 
assets in general competitive domains.  Statistics indicate that by the end of 2011 state-owned shareholders average shareholding ratio in listed companies controlled by central enterprises dropped 
to 43%.  From 2007 to 2011, there were 4,147 public  transfer transactions of national property right 
conducted in property right market by central ente rprises, with 69% sold to private or foreign 
transferees.  
Part III. Trade Policies and Practices by Meas ure; (3) Measures Affecting Production and 
Trade; (v) State-owned enterprises, private en terprises, and corporate governance; (b) Non-
public enterprises, page 76: 
 
The Report notes that in 2010 gross exports by Chinese private enterprises exceeded US$450 billion 
and accounted for more than 30% of China's total exports.  
59. Can China provide data on the value of exports in each of the following enterprise 
categories:  SOEs, collectively-owned enterpri ses, FIEs:  equity joint ventures, FIEs:  
contractual joint ventures, FIEs:  wholly foreign-owned enterprises and domestic private 
enterprises annually for 2008, 2009 and 2010?  
 Answer: 
Year Categories Export value (US$ million)  
2008 Total 1,430,693.07 
 SOEs 257,479.24 
 contractual joint ventures 18,337.82 
 equity joint ventures 226,744.11 
 wholly foreign-owned enterprises 545,410.78 
 collectively-owned enterprises 54,663.81 
 private enterprises 325,725.72 
2009 Total 1,201,611.81 
 SOEs 190,997.40 
 Contractual joint ventures 14,585.24 
 equity joint ventures 182,329.43 
 wholly foreign-owned enterprises 475,159.43 
 collectively-owned enterprises 40,520.70 
 private enterprises 296,358.71 
2010 Total 1,577,754.32 
 SOEs 234,302.18 
 Contractual joint ventures 16,470.20 
 equity joint ventures 237,581.60 
 wholly foreign-owned enterprises 608,177.02 
 collectively-owned enterprises 49,847.76 
 private enterprises 429,774.65 WT/TPR/M/264/Add.1 
Page 78 
 
 
   
Part III. Trade Policies and Practices by Meas ure; (3) Measures Affecting Production and 
Trade; (v) State-owned enterprises, private en terprises, and corporate governance; (b) Non-
public sector enterprises: paragraph 231, page 76:  
 
The State Councils 36-clauses includes measures to  promote market access of private sectors, 
however the Secretariat Report does not have any details on these measures.   
60. Could China elaborate on these measures and how they will affect FIEs?  
 
Answer:  In 2010, the State Council promulgated Se veral Opinions of the State Council on 
Encouraging and Guiding the Healthy Development of  Private Investment (Guofa[2010] No. 13, i.e. 
new 36 articles).  It applies to private investme nt excluding foreign investment.  The investment 
access for foreign companies and foreign investors is subject to Catalogue of the Guidance for 
Foreign Investment Industr ies and other regulations. 
 
Part III. Trade Policies and Practices by Meas ure; (3) Measures Affecting Production and 
Trade; (v) State-owned Enterprises, Privat e Enterprises, and Corporate Governance, 
(a) Reform of State-owned Enterprises: paragraphs 225-226, pages 75-76: 
 
61. Are there plans to narrow the scope of areas where SOE dominance is to be maintained? 
 
Answer: In 2010, the State Council promulgated Se veral Opinions of the State Council on 
Encouraging and Guiding the Healthy Developmen t of Private Investment (Guofa [2010] No. 13), 
further expanded the scope of private investment. Under the requirements in the regulation above and 
the Notice on the State Councils Approval and Distribution of National Development and Reform 
Commissions Opinions on Furthering Key Task s in Economic System Reform 2012 (Guofa [2012] 
No. 12), relevant departments will study and formulate supportive measures and implementing 
regulations to encourage and guide private investment.  
62. With respect to maintaining SOE dominance in certain areas, could China explain what is 
meant by pillar industries and what constitutes general competitive sectors? 
 
Answer:  State-owned capital concentrate on key i ndustries and domains that involve national 
security, key infrastructures and supply of important public products and services. 
 
63. Aside from better access to capital, could Ch ina outline the means used to promote national 
champions and the tools given to such SOEs. 
 
Answer:  China is devoted to creating a fair and competitive market for enterprises of different 
ownership.  Enterprises are treated without discrim ination by Chinese law.  State-owned enterprises 
do not enjoy preferential treatment in loan, tax and supervision. 
 
Report Part III. Trade Policies and Practices by  Measure; (3) Measures  Affecting Production 
and Trade; (v) State-owned enterprises, private enterprises, and corporate governance: paragraphs 220-227, pages 74-76:        
 Paragraphs 220 to 227 of the Secretariat report address China's state-owned enterprises. 
 
64. Could China indicate how the Intellectual Property (IP) framework apply to state-owned 
enterprises (SOEs), whether IP la ws apply in the same manner to SOEs as they do to private 
domestic and foreign enterprises, and whether there are any special rules governing how IP 
laws are applied to SOEs?  WT/TPR/M/264/Add.1 
 Page 79 
 
 
   
Answer : Yes, the IP framework equally applies to SO Es and private domestic and foreign firms.  
There are no special rules governing the IP laws apply to SOEs.  Report Part III.  Trade Policies and Practices by Measure; (3) Measures Affecting Production 
and Trade; (vii) Intellectual Property Rights: paragraph 278, page 87:  
 
The Secretariat report provides that "For 2011, the plan assigned 176 tasks including: the launch of a 
national specific campaign on intellectual property rights (IPR) protection, and revisions of the 
Trademark Law, the Copyright Law, and the Measu res for Exercising Compulsory Licence as well as 
drafting Anti-Monopoly Guidelines for Abusive Use of Intellectual Property Rights."  
65. Could China indicate the outcome of the 176 tasks? 
 
Answer: 176 specific measures in seven aspects are sp ecified in the Promotion Plan for the 
Implementation of the National Intellectual Property Strategy in 2011.  According to the statistics, 
28 joint conference members formulated and re vised 38 IPR laws, regulations and regulatory 
documents, promulgated 101 relevant policy measur es, carried out 43 IPR law enforcement actions 
and established 16 service platforms in 2011. 
 
66. We understand that China published revisions regarding the Measures Exercising 
compulsory licensing in March 2012.  Could China indicate whether further revisions can be 
expected to be issued?  
 
Answer:  China has just promulgated the Implementation Measures for Compulsory License of 
Patents on 15 March 2012.  We do not have a plan to further revise the Measures at present. 
 
Report Part III. Trade Policies and Practices by  Measure; (3) Measures  Affecting Production 
and Trade; (vii) Intellectual Property Rights: paragraph 278, page 87: 
 The Secretariat report indicates that a number of re gulations and departmental rules on IPRs have 
been amended since China's previous Review.   
67. Could China confirm the latest status of the value and volume thresholds that must be met in 
order for commercial scale intellectual property rights violations to be subject to criminal 
procedures and penalties?  
 
Answer : Please refer to the Interpretations of the Supreme People's Court and the Supreme People's 
Procuratorate for Several Issues C oncerning the Specific Applicati on of Laws on Handling Criminal 
Cases of Intellectual Property Right Infringement, th e Interpretations of the Supreme People's Court 
and the Supreme People's Procurat orate for Several Issues Concerning the Specific Application of 
Laws on Handling Criminal Cases of Intellectual Prop erty Right Infringement (II) and the Opinions of 
the Supreme People's Court, the Supreme People's Proc uratorate and the Ministry of Public Security 
on Several Issues Concerning Application of Laws  in Handling Criminal Cases of Intellectual 
Property Right Infringement.  Report Part III. Trade Policies and Practices by  Measure; (3) Measures  Affecting Production 
and Trade; (vii) Intellectual Property Rights: paragraph 279, page 87:     
 
The Secretariat report indicates that political accountab ility for IPR violations is to be increased at the 
provincial level.  A footnote further clarifies that Enforcement of IP rights in their regions will be 
taken into account for provincial officials performance.  
 WT/TPR/M/264/Add.1 
Page 80 
 
 
  68. Can China provide further clarifications on w hat measures are in place or are being 
contemplated relating accountability of loca l and provincial IP offices and officials? 
 
Answer : In November 2011, the State Council issued the Opinions on Further Cracking Down on 
Infringements of Intellectual Property Rights  and the Production and Sale of Counterfeit 
Commodities, explicitly specifying that a restra int and incentive mechanism for crackdown on IPR 
infringement and counterfeit products and a superv ision and evaluation system should be established 
and improved.  Crackdown on IPR infringement and counterfeit products is included in the 
governments performance evaluation system, which is s upervised and inspected level by level.  Areas 
where have outstanding infringement  and counterfeit products cases shoul d be urged to strengthen law 
enforcement and be ordered to rectify within a spec ified time limit.  Heads of local government and 
responsible administrative authorities will be held accountable and punished for regional and 
systematic IPR infringement situations in the ar ea.  Up till now, China has not formulated special 
measures relating to accountability of local IPR offices and officials. 
 
Report Part III. Trade Policies and Practices by  Measure; (3) Measures  Affecting Production 
and Trade; (vii) Intellectual Property Rights: paragraph 281, page 87: 
 
The Secretariat report indicates that local IPR ad ministrative offices are responsible for patent 
disputes. 
 
69. Can China indicate whether all local IPR o ffices have adopted a standardized set of rules, 
regulations and procedures for handling patent disputes? 
 
Answer : To regulate patent enforcement work and protect  the legitimate rights and interests of patent 
right holders and the public, SIPO promulgated the Measures for Administrative Enforcement of 
Patents in December 2010. 
 
70. Can China clarify the role of local IPR offices in  a given province relative to the role of the 
national and provincial IPR office?  Is there a hierarchical relationship? 
 Answer:   Local IPR offices are established by local peoples governments to take charge of patent 
administration work in the region and there is no a hierarchical relationship between local IPR offices 
and SIPO.  SIPO provides business guidance to all local IPR offices on handling patent infringement 
disputes, investigating and punishing patent co unterfeits and mediating patent disputes, while 
provincial IRP offices provides business guidance fo r local IPR offices within the administrative 
region.  
Report Part III. Trade Policies and Practices by  Measure; (3) Measures  Affecting Production 
and Trade; (vii) Intellectual Property Rights: paragraph 282, page 87: 
 The Secretariat Report indicates that the Patent laws Implementing Regula tions (last amended in 
2010) elaborates details on compulsory licenses.  
71. Could China elaborate on how its implementing regulations, which include a definition of 
insufficient exploitation as a basis for iss uance of compulsory licenses, complies with 
Article 28, 30 and 31 of the TRIPS Agreement,  particularly subparagr aph (c) of Article 31? 
 
Answer:  China's amendments to the provisions c oncerning compulsory licenses (including the 
definition of insufficient exploitation) of the Pa tent Law and its implementing regulations comply 
with the Paris Convention and the TRIPS Agreement.     WT/TPR/M/264/Add.1 
 Page 81 
 
 
  As specified in Paragraph (4) of Article 5 A of the Paris Convention, a compulsory license may not be 
applied for on the ground of failure to work or in sufficient working before the expiration of a period 
of four years from the date of filing of the patent application or three years from the date of the grant 
of the patent.  Article 48 of the Chinese Patent Law conforms to the above provision in the Paris 
Convention.  As provided in Paragraph (c) of Article 31 of the TRIPS Agreement,  the scope and duration of such 
use shall be limited to the purpose for which it was authorized, and in the case of semi-conductor 
technology shall only be for public  non-commercial use or to reme dy a practice determined after 
judicial or administrative process to be anti-co mpetitive.  Article 52 of the Chinese Patent Law 
provides where a compulsory license involves semiconductor technology, the use of such semiconductor technology shall be limited to the purpose of public interests and circumstances 
specified in Paragraph (2) of Article 48 hereof.  This provision accords with Article 31 of the TRIPS 
Agreement. 
 
Part III. Trade Policies and Practices by Meas ure; (3) Measures Directly Affecting Exports; 
(vii) Intellectual property rights: paragraph 292, page 90:   
 
The Secretariat report states that Guidelines for Competition against Abusing Intellectual Property 
Rights are being drafted. 
 
72. Could China please confirm when it expects its draft Guidelines for Competition against 
Abusing Intellectual Property Rights to be completed?    
 
Answer:  The State Administration for Industry and Commerce is leading the research and drafting of 
the Guidelines on the Enforcement of Anti-Monopoly La w in the Field of Intellectual Property Rights 
which is currently being further perfected. 
 
73. Can China confirm whether the draft Guidelin es will be provided for public consultations? 
 Answer:  In the course of studying and drafting the Guidelines, the State Administration for Industry 
and Commerce studied and drew lessons from law enforcement practices and related guidelines and 
regulations published by foreign competition agen cies, carried out research activities at home, and 
solicited opinions and suggestions from companies, la w courts and government departments related to 
intellectual property for several times.  In the c ourse of further improvement, we will continue to 
solicit opinions from the relevant parties and we welcome your comments and suggestions in this 
regard.  
74. Can China specify the scope of the concept of "abuse of intellectual property rights and 
describe what conditions would be required for a finding of abuse of an intellectual property 
right and under what circumstances a compulsory license would be granted? 
 Answer : From a practical sense, competition eliminati on or restriction by abuse of intellectual 
property right, based on its nature and manifesta tion, may constitute one or more of the monopoly 
agreement, abuse of market dominance and con centration of business operators defined in the 
Antimonopoly Law.  During the actual law enforcement, the analysis and ascertainment of 
competition elimination or restriction by abuse of  intellectual property right shall be based upon a 
consideration of the nature of intellectual prope rty right and basically follow the analysing and 
establishing method of monopoly agreement, abuse of market dominance and concentration of 
business operators. Business operators will not be directly established as to bear special obligations or 
presumed as to have a dominant position in relevant market just because of his possession of intellectual property right.  Therefore, we have to  not only take into consideration the behavior WT/TPR/M/264/Add.1 
Page 82 
 
 
  characteristics but also do a comprehensive analysis  of the effect this behavior has produced in 
eliminating or restricting competition.    
 
75. Have there been any complaints or cases s ubmitted to the Anti-Monopoly and Anti-Unfair 
Competition Enforcement Bureau of the State Administration for Industry and Commerce (SAIC) or other competition authority alleging abuse of an intellectual property right? If so, could China indicate what were the circumstances and what was the outcome?    
 
Answer:  after the enactment of the "Anti-monopoly La w," the State Administration for Industry and 
Commerce carefully sorted out and analysed compla ints and reports received, and guided the timely 
rectification of operators with monopolistic sympto ms or tendencies, and conducted investigations, 
verifications and punishmen t of monopolistic cases in accordance with the law. 
 
Part III. Trade Policies and Practices by Meas ure; (2) Measures Directly Affecting Exports; 
(vii) Intellectual Property Rights: paragraph 292, page 90:  
 
76. Could China please confirm when it expects its draft Guidelines for Competition against 
Abusing Intellectual Property Rights to be completed? 
 
Answer:  It seems to China that here Canada is reproducing question 72. 
 
77. Can China confirm whether the draft Guidelin es will be provided for public consultations? 
 
Answer : It seems to China that here Canada is reproducing question 73. 
 Part III. Trade Policies and Practices by Meas ure; (2) Measures Directly Affecting Exports; 
(vii) Intellectual Property Rights: paragraph 294, page 91: 
 
Canada notes China's affirmation that no compulso ry licenses have been granted under the patent law. 
 
78. Could China please confirm whether compulso ry licenses have been issued under different 
legislation?  If so, which ones? 
 
Answer : No compulsory license has been issued unde r Trademark Law and Anti-Unfair Competition 
Law.  
 
Part III. Trade Policies and Practices by Meas ure; (3) Measures Directly Affecting Exports; 
(vii) Intellectual property rights: paragraph 294, page 91:         
 
The Secretariat report outlines situations where compulsory licenses may be issued.  Canada notes 
China's affirmation that no compulsory licen ses have been granted under the patent law.  
 
79. Could China please clarify whether compulso ry licenses have been issued under different 
legislation? If so, which ones?       
 
Answer: It seems to China that here Ca nada is reproducing question 78. 
 
Part III. Trade Policies and Practices by Meas ure; (3) Measures Affecting Production and 
Trade; (vii) Intellectual Property Rights: paragraph 296, page 91:  
 
The Secretariat report indicates that [l]ocal enforc ement authorities are responsible for administration 
of trade marks at the local level.  
  WT/TPR/M/264/Add.1 
 Page 83 
 
 
  80. Can China explain what measures have been taken to harmonize the administration of 
trademarks across loca l trademark offices? 
 
Answer:  The Trademark Office of SAIC harmonizes the administration of trademarks by 
promulgating regulatory documents, giving case rep lies and organizing law enforcement trainings as 
well as enhancing business guidance and informat ion sharing through SAIC integrated business 
system.  
Besides, local industrial and commercial authoriti es have actively strengthened horizontal exchanges 
and established seven regional networks for trad emark administrative law enforcement cooperation 
covering 31 provinces.  The operation of regiona l law enforcement cooperation networks are of 
significance in strengthening cross-region law en forcement information sharing, unifying law 
enforcement standards and promoting law enforcement exchanges and cooperation. 
 
81. Can China indicate whether local trademark offices issue or otherwise administer sub-
national rules, regulations and procedures in  addition to administering national laws and 
regulations, and whether these sub-na tional regulations are made public? 
 
Answer : Yes, and these regulations are also made public. 
 
82. Can China indicate whether all local trademark offices have adopted a standardized set of 
rules, regulations and procedures for regis tration of trademarks and handling trademark 
disputes, with similarly standardized contents from one local trademark office to the other? 
 
Answer : The SAIC Trademark Office and Trademark Appeal Board have established a complete set 
of procedure and system in respect of application acceptance and review concerning trademark 
registration and trademark disputes.  Local ad ministrations for industry and commerce do not 
formulate their own rules, but enforce re levant trademark laws and regulation. 
 
Part III. Trade Policies and Practices by Meas ure; (2) Measures Directly Affecting Exports; 
(vii) Intellectual Property Rights: paragraph 298, page 91: 
 
83. Could China please clarify when it expects the revision to the Trademark law to be complete?       
 
Answer: The draft amendment of Trademark Law is unde r review by SCLAO.  There is no specific 
time table for the promulgation of the amended law. 
 
84. Can China explain how, if at all, the revised Trademark law will address the issue of bad 
faith trademark filings?  
 
Answer   When reviewing the draft revision of the Tr ademark Law, the Chinese Legislative Affairs 
Office of the State Council studied how to address the issue of bad faith trademark filings and 
considered the following preliminary countermeasures:  (1) adding the provision that trademark filing 
and use shall follow the principle of good faith, and regarding violation of good faith principle as a reason for proposing a trademark opposition and applyi ng for trademark invalidity;  (2) adding the 
provision that an application by a person for the registration of a trademark used by others, with 
whom the applicant has contractual, business or other relations and knows the existence of the 
trademark, shall be denied.  These measures will pl ay a positive role in addressing the issue of bad 
faith trademark filings.  WT/TPR/M/264/Add.1 
Page 84 
 
 
  Report Part III. Trade Policies and Practices by  Measure; (3) Measures Directly Affecting 
Production and Trade; (vii) Intellectual property rights: paragraph 298, page 91: 
 The secretariat report states that China's trademark law is being revised. 
 
85. Could China please confirm the status of its  trade-mark reform, next expected steps and 
timeline for those steps? 
 Answer : The question is not clear, please clarify. 
 
86. Can China explain how, if at all, the revised Trademark law will address the issue of bad 
faith trademark filings? 
 
Answer : It seems to China that here Canada is reproducing question 84. 
 
Report Part III. Trade Policies and Practices by  Measure; (3) Measures  Affecting Production 
and Trade; (vii) Intellectual Property Rights: paragraph 301, page 92:          
 
The Secretariat report notes that the 2003 "Rul es on Recognition of and Protection over Well-Known 
Brands" defines well-known brands as  trademarks that are widely known and enjoy a high reputation 
among the relevant public in Chin a;  Canada notes that a sim ilar definition is found in the 
"Interpretations of the Supreme People's Court on  Several Issues Concerning the Application of Law 
to the Trial of Cases of Civil Disputes over the Protection of Famous Trademarks".  
87. Can China indicate what the threshold is for a br and to be deemed widely known and to enjoy 
a high reputation?  Can China indicate how this relates to what is provided for in the TRIPS 
Agreement and the Paris Convention?        
 
Answer: Article 14 of the current Chinese Trademark Law explicitly provides factors to be taken into 
account when recognizing well-known trademarks.  The Provisions for the Determination and 
Protection of Well-known Trademarks issued by SAIC  give detailed provisions on the above factors 
and standards and specify the eviden ce materials for proving a well-known trademark.  Please refer to 
relevant regulations for details.  The Paris C onvention stipulates recognition and protection of 
well-known trademarks, but does not mention rec ognition standards or elements of well-known 
trademarks.  Article 16 of the TRIPS Agreement provi des that in determining whether a trademark is 
well-known, Members shall take account of the knowle dge of the trademark in the relevant sector of 
the public, including knowledge in the Member con cerned which has been obtained as a result of the 
promotion of the trademark.  Relevant provisions specified in the Chinese Trademark Law and the Provisions for the Determination and Protecti on of Well-known Trademarks embody principles 
provided in the Paris Convention and the TRIPS Agreement.  
88. Can well-known brand or well-know n mark status be attained in China if the relevant goods 
and services are not sold in China?   
 
Answer : Chinese Trademark Law provides factors to be  taken into account for the protection and 
recognition of well-known trademarks.  One important  factor to consider a trademark is well-known 
or not is the use of the trademark on relevant goods and services.  As provided in Implementing 
Regulations of the Trademark Law, the use of tr ademarks include the use of trademarks on goods, 
packages or containers thereof and commodity tr ading instruments, or use of trademarks in 
advertisements, exhibitions and other commercial activities.  
  WT/TPR/M/264/Add.1 
 Page 85 
 
 
  Report Part III. Trade Policies and Practices by  Measure; (3) Measures  Affecting Production 
and Trade; (vii) Intellectual property rights: paragraph 303, page 92.  
 The Secretariat Report notes that there is no tim e limit within which the Trademark Review and 
Adjudication Board must make its decision.  
89. Does China intend to institute a time limit for Trademark Review and Adjudication Board 
appeals?  If not, could China please provide a rationale for not doing so? 
 Answer:  The current time period for trademark review and dispute settlement is around 20 months in 
China.  In recent years, in order to reach this goal, the Trademark Review and Adjudication Board has adopted a series of measures to optimize case hearing procedures, improve automation level, expand 
the team of trademark reviews, scientifically qua ntize target tasks and reasonably allocate existing 
human resources so as to increase the number of case reviews and completions.  China will be 
devoted to consolidating and furt her shortening review time.  Ho wever, the number of trademark 
review applications keeps increasing year by year along with the increase of trademark applications, so it is difficult to set a time limit for trademark review.    
Part III. Trade Policies and Practices by Meas ure; (2) Measures Directly Affecting Exports; 
(vii) Intellectual Property Rights: paragraph 303, page 92:   
The Secretariat Report notes that there is no tim e limit within which the Trademark Review and 
Adjudication Board must make its decision.  Th is can cause uncertainty for companies whose 
trademarks are in jeopardy.  
90. Does China intend to institute a time limit for Trademark Review and Adjudication Board 
appeals? 
 
Answer : Again, is Canada reproducing question 89? 
 
91. If not, could China please provide a rationale for not doing so? 
 
Answer: Here Canada is repr oducing question 89.  
 
Report Part III. Trade Policies and Practices by  Measure; (3) Measures  Affecting Production 
and Trade; (vii) Intellectual Property Rights: Copyright paragraph 312, page 93:  
The Secretariat report indicates that copyri ght is administered by local offices. 
 
92. Can China indicate whether local copyri ght offices issue or otherwise administer 
sub-national rules, regulations and procedures in addition to administering national laws and 
regulations, and whether these regulations are made public? 
 
Answer: The peoples governments of provinces, aut onomous regions, municipalities directly under 
central government, and relatively large municipa lities may formulate local  government rules in 
accordance with laws, administrative regulations and local regulations of provinces, autonomous 
regions and municipalities directly under the centr al government.  Local copyright offices may not 
issue sub-national rules, but shall enforce local regulations and rul es. All local government rules are 
made public.  
93. Can China indicate whether all local copyri ght offices have adopted a standardized set of 
rules, regulations and procedures, with sim ilarly standardized contents from one local 
copyright office to the other? WT/TPR/M/264/Add.1 
Page 86 
 
 
   
Answer: Besides observing Copyright Law and relevant administrative regulations and departmental 
rules, local copyright offices should also observe lo cal regulations and local government rules in their 
copyright administration and enforcement work.  
 
Part III. Trade Policies and Practices by Meas ure, (3) Measures Affecting Production and 
Trade, (vii) Intellectual Property Rights, paragraph 315, page 94:  
 The Secretariat report indicates that a verifica tion campaign on genuine software for government 
agencies was launched in 2010 to consolidate th e achievement from the software legalization 
programme for government agencies between 2001 and 2005.  
94. Can China please provide more detail about what is involved with the verification campaign, 
and what actions will be taken as a conseque nce to ensure government agencies are using 
genuine software? 
 
Answer: Since 2010, the Chinese Government has advanced a verification campaign on genuine 
software for government agencies and scored positiv e achievements. 135 central and state agencies 
finished verification campaign on genuine software before the end of May 2011 as scheduled and 
purchased 91,800 sets (licenses) of operating system s, office software and antivirus software 
involving an amount of RMB 77.23 million.  As of 30 April 2012, 11 provinces (autonomous regions and municipalities directly under the Central Gove rnment), namely Beijing, Shanghai, Chongqing, 
Shanxi, Jiangsu, Zhejiang, Anhui, Jiangxi, Guangxi, Shaanxi and Xinjiang, already finished tasks of 
the verification campaign on genuine software for gove rnment agencies.  In January 2012, the State 
Council approved the establishment of an inter-mini sterial joint conference system for advancing 
genuine software use.  With 15 members, the system  aims to advance the use of genuine software by 
government agencies and enterprises in an all-round manner.  
Part III. Trade Policies and Practices by Measu re; (3) Measures Directly Affecting Production 
and Trade; (vii) Intellectual property rights: paragraph 320, page 95:   
 
The Secretariat report indicates that undisclosed in formation and trade secrets are protected by, 
inter alia , the Criminal Law, the Anti-Unfair Compe tition Law, the Labour Law, and regulations 
issued in accordance with these laws.  
95. Can China indicate whether there are authorities involved in the enforcement of trade secret 
rules other than the SAIC? 
 
Answer: According to Article 3 and 10 of the Anti-Unfa ir Competition Law, local administrations for 
industry and commerce of county leve l and above also have authorit y to supervise and investigate 
trade secret cases. 
 
96. Can China indicate whether it has legislation to criminalize economic espionage?  
 
Answer:  Article 219 of the Criminal Law of the Peopl e's Republic of China and Article 7 of the 
Interpretations of the Supreme People's Court an d the Supreme People's Procuratorate for Several 
Issues Concerning the Specific Application of La ws on Handling Criminal Cases of Intellectual 
Property Right Infringement stipulate explicit provisions on punishments against trade secret infringements.   
 
97. Can China indicate what type of informati on is protected under trade secrets law and what is 
the nature of the protection for undisclosed in formation provided for under each of the 
criminal law and the unfair competition law?  WT/TPR/M/264/Add.1 
 Page 87 
 
 
   
Answer: According to Article 10 of the Law of the Pe ople's Republic of China on Countering Unfair 
Competition, trade secrets refer to technical in formation and business information with practical 
applicability which may bring economic benefits to the right holder and is unknown to the public and 
kept secret by the right holder with protective meas ures.  Therefore, two types of information are 
protected by trade secret laws in China, na mely technical information and business operation 
information.  
TRIPS Agreement identifies undisclosed informat ion as an independent category of IPRs and 
provides three conditions for the protection of undiscl osed information.  Trade secrets rather than 
undisclosed information are adopted in the Anti-Unfa ir Competition Law.  Provisions on trade secrets 
in Chinese laws are consistent with relevant provisions in the TRIPS Agreement in essence.  
Article 217 of the Criminal Law adopted the same  provision on trade secret as the Anti-Unfair 
Competition Law.  
 
98. Can China clarify how trade secrets and undi sclosed information rights are enforced and 
have there been any cases either before an adminis trative body, a court or other adjudicative 
body regarding alleged violations of the protections for undisclosed information?  If so, could 
China indicate how many cases there have been under each law, what were the issues raised 
and what was the outcome?  
 
Answer:  China protects trade secrets and undisclo sed information according to Anti-Unfair 
Competition Law and Criminal Law. In 2011,  Chinese courts accepted 50 new criminal cases 
involving trade secret, concluded 49 cases and convicted 63 criminals. 
 
Part III. Trade Policies and Practices by Meas ure, (3) Measures Affecting Production and 
Trade, (vii) Intellectual Property Rights, paragraph 323, page 96: 
 
The Secretariat report states that Customs is in char ge of enforcement of intellectual property rights at 
the border and that revised Regulations on Customs Protection of Intellectual Property entered into 
effect on 1 April 2010. 
 
99. Can China indicate whether goods imported and exp orted to free trade zones are covered by 
customs enforcement?      
 Answer: If the goods in the free trade zones are importe d or exported goods, they are covered by 
customs enforcement according to Article 2 of the Regulations on Customs Protection of Intellectual 
Property Rights.  
100. Can China indicate whether Cu stoms enforcement is applicable to intellectual property rights 
other than copyright, trademark and patents?      
 
Answer: The Olympic symbols and World Expo symbols are also protected by Chinese customs. 
 
Part III.  Trade Policies and Practices by Measure: (3) Measures Affecting Production and 
Trade; (vii) Intellectual Property Rights: paragraph 324, page 96:  
 
It is noted from the Secretariat's report that intell ectual property right-holders may register their rights 
in Customs records for border protection and that subject to approval, each registration is valid for 
ten years and renewable.  
101. Could China explain the process to approve such a registration?     
 WT/TPR/M/264/Add.1 
Page 88 
 
 
  Answer: Please refer to Chapter II of the Regulations on Customs Protection of Intellectual Property 
Rights. 
 
102. Could China explain the criteria applied to determ ine whether such registration is approved?   
 
Answer: Please refer to Chapter II of the Regulations on Customs Protection of Intellectual Property 
Rights. 
 
Part III. Trade Policies and Practices by Meas ure: (3) Measures Affecting Production and 
Trade; (vii) Intellectual Property Rights: paragraph 324, page 96: 
 
103. It is noted from the Secretariat's report that  counterfeit goods seized by Customs may not 
enter commercial channels by simple removal of trade marks from the counterfeit goods, and 
that Customs must destroy the goods if the in fringing features cannot be removed.     
 Answer: Please refer to Chapter II of the Regulations on Customs Protection of Intellectual Property 
Rights.  
104. Could China explain what happens to counterfe it goods where the infringing features can and 
are removed? 
 
Answer : Please refer to Item 1 of Article 27 of the Re gulations on Customs Protection of Intellectual 
Property Rights.  
105. Could China explain, in cases  where suspected counterfeit goods are detained, whether 
simple removal of a mark can lead to the exportation of those goods?   
 
Answer: Please refer to Chapter II of the Regulations on Customs Protection of Intellectual Property 
Rights. 
 
Part III. Trade Policies and Practices by Meas ure; (2) Measures Directly Affecting Exports; 
(vii) Intellectual Property Rights: paragraph 329, page 97: 
 
Canada notes that China has recently committed to  making the Special Campaign on IPR enforcement 
permanent and be overseen by the State Council.  
 
106. Can China explain whether the Special Cam paign on IPR includes measures to ensure 
coordination of enforcement efforts at the national and provincial levels?  If so, what specific 
actions has the national government taken  in order to ensure coordination and 
implementation at the sub-national level? 
 Answer : In October 2010, the State Council issued and distributed the Scheme for Special Campaign 
of Cracking down on Infringing Intellectual Pr operty Rights and Manufacturing and Selling 
Counterfeit Commodities.  A nationwide special campaign aimed at cracking down on infringing 
IPRs and manufacturing and selling counterfeit comm odities was carried out from October 2010 to 
June 2011.  The national leading group office of the special campaign established with relevant 
authorities a communication and coordination mechanis m for law enforcement cooperation.  The local 
peoples governments developed specific implementati on schemes to carry out special campaigns for 
IPR protection.  Besides, the leading group offi ce also provides guidance to local authorities by 
prompt sharing of statistics and information.   WT/TPR/M/264/Add.1 
 Page 89 
 
 
  Part III. Trade Policies and Practices by Measu re; (3) Measures Directly Affecting Production 
and Trade; (vii) Intellectual property rights: paragraph 329, page 97:        
 Canada notes that China has recently committed to  making the Special Campaign on IPR enforcement 
permanent and be overseen by the State Council.  
107. Can China explain what concrete actions will be  taken to ensure coor dination of enforcement 
efforts at the national and provincial levels?       
 Answer:  How does question 107 relate to question 106?  It seems to China that question 106 is 
reproduced here.  
108. Does China have results from border enforcem ent (by import/export, type of IPR and 
foreign/domestic ownership)? 
 Answer: In 2011, Chinese customs detained 103 milli on pieces of commodities in 18,200 batches 
suspected of IPR infringement, in which 100 million pieces are export commodities, accounting for 97% of all detained goods infringing IPR.  The r esults were highly recognized by the international 
community.  Global Anti-Counterfeiting Group awarded Chinese customs the Global 
Anti-Counterfeiting Awards 2011-Public Sector Orga nization Award, the only award of its kind in 
2011.   
109. Could China provide the current outcomes of the "Vice-Premier's role of overseeing IPR 
enforcement"?  
 Answer : China has scored positive achievements in th e special enforcement campaign aiming at 
cracking down on infringing IPRs and manufactu ring and selling counte rfeit and substandard 
commodities during the period between Octobe r 2010 and June 2011.  During the special 
law-enforcement campaign, administrative law en forcement authorities at all levels filed for 
investigation 156,000 cases of infringing IPRs and manufacturing and selling counterfeit and 
substandard commodities which involved RMB 3.43 b illion, destroyed 9,135 hi deouts and intensively 
regulated and improved 329 key areas and key mark ets. Public security organs cracked 16,000 cases 
involving RMB 13.11 billion and arrested 29,000 crim inal suspects.  Procuratorates approved the 
arresting of 5,336 criminal suspects in 2,895 cases,  and initiated public prosecution on 2,176 cases.  
The Peoples Courts accepted 2,492 cases and conclude d 1,985 cases.  After the special campaign, 
market orders and operational e nvironment have been significantly improved.  According to 
preliminary statistics, during January-April 2012,  the administrative law enforcement authorities 
nationwide investigated 78,773 cases of IPR in fringement and manufacturing and selling of 
counterfeit commodities, concluded 44,371 cases and transferred 1,016 suspected criminal cases to 
public security organs.  Public security organs cracked 7,140 cases of IPR infringement and manufacturing and selling of counterfeit commodities and arrested 9,305 criminal suspects.  
Procuratorial organs approved a rresting 3,289 criminal suspects in 1743 cases, and filed lawsuit 
against 2,516 cases and 4,870 suspects.  Courts accepted 2,586 new cases of IPR infringement and 
manufacturing and selling of counterfeit commoditi es, concluded 2,021 cases and gave an effective 
judgment for 3,170 suspects.  Part III. Trade Policies and Practices by Meas ure, (3) Measures Affecting Production and 
Trade, (vii) Intellectual Property Rights, paragraph 330, page 97:      
 
The Secretariat report states that… In January 2011, the Supreme People's Court, the Supreme People's Procuratorate, the Ministry of Public Secur ity, and the Ministry of Justice jointly issued the 
Circular of Opinions on Some Issues Concerning th e Application of Law in the Trial of Criminal 
Cases Involving IPRs Infringement. WT/TPR/M/264/Add.1 
Page 90 
 
 
   
110. Could China clarify what is the threshold of criminal enforcement and what is the frequency 
of domestic versus foreign IP rights being enforced? 
 
Answer: Please refer to the Interpretations of the Supreme People's Court and the Supreme People's 
Procuratorate for Several Issues C oncerning the Specific Applicati on of Laws on Handling Criminal 
Cases of Intellectual Property Right Infringement, th e Interpretations of the Supreme People's Court 
and the Supreme People's Procurat orate for Several Issues Concerning the Specific Application of 
Laws on Handling Criminal Cases of Intellectual Prop erty Right Infringement (II) and the Opinions of 
the Supreme People's Court, the Supreme People's Proc uratorate and the Ministry of Public Security 
on Several Issues Concerning Application of Laws  in Handling Criminal Cases of Intellectual 
Property Right Infringement.  
Part IV. Trade Policies by Sector; (1) Agricult ure; (ii) Agriculture Policies; paragraph 13, 
page 102-103: 
 
Canada understands that land rights were reformed in China in 2007 under the Property Rights Law.  
Property rights under the law are similar to rights under private ownership however land may not be 
sold, or sublet, or used as collateral for loans.  In October 2008, the 17
th Party Congress approved the 
Decision on Certain Issues Concerning the Advanc ement of Rural Reform and Development which 
indicated that land policy would change, giving greater ri ghts to holders to transfer, rent or trade land.  
Such reforms would give greater autonomy to farmer s, reduce regulatory burdens, and foster a more 
competitive agricultural sector.  
111. Can China please give an update on the status of these land policy reforms? 
 Answer: Since 2009, the Chinese government continues to stabilize and improve the basic 
management systems in rural areas, to implement a nd maintain the farmers' in terests of land contract 
according to law, to establish and improve the transf er market for the right of rural land contractual 
management, to develop various forms of business of  moderate scale.  On 1 January 2010 Law on 
Mediation and Arbitration of Disputes concerning Land Contract in Rural Areas was implemented.  In 
2010, China's relevant government departments pr omulgated Rules on Arbitration of Disputes 
concerning Land Contract in Rural Areas, Model Bylaws for Rural Land Contracting Arbitral 
Commissions and other complementary regulations.  At the moment, the legal system of rural land 
contracting with Law on Land Contract in Rural Ar eas, Law on Mediation and Ar bitration of Disputes 
concerning Land Contract in Rural Areas as the mainstay has basically taken shape. 
 
Part IV. Trade Policies by Sector; (1) Agricult ure; (ii) Agriculture Policies; (a) Import 
Measures; paragraph 18, page 103:  
 
The Secretariat Report indicates that quotas are a llocated based on the volumes requested, previous 
imports, production capacity, or on a first-come, first-serve basis. State-trading enterprises dominate 
access to tariff quota allocations through:  90% of th e wheat quota;  60% of the maize quota;  50% of 
the rice quota;  70% of the sugar quota and, 33% of the cotton quota.   
112. How does China allocate the quota for wheat? 
 Answer: Wheat quota is allocated in accordance with th e Interim Measures of Import Tariff Quotas 
of Agricultural Products.  
113. Does China have plans to reform the allocation system in order to a llow more access to quota 
for private-owned enterprises?  
  WT/TPR/M/264/Add.1 
 Page 91 
 
 
  Answer:  Ever since its accession to the WTO, China has formulated or modified its laws and 
regulations including Foreign Trade Law of the People's Republic of China, Regulation of the 
People's Republic of China on the Administration of the Import and Export of Goods, and Interim 
Measures for the Administration of Import Tariff Quot as of Agricultural Products, etc.  The policies 
are open and transparent.  China's import and export regime on agricultural produc ts is consistent with 
its accession commitment and in line with the releva nt laws and regulations.  China has notified in a 
timely manner the relevant information on state- trading enterprises and required the enterprises 
operate in accordance with laws and regulations.  The outcome proves that the laws and regulations 
are implemented effectively.  Therefore China has no plan to reform the system at present. 
 
Part IV. Trade Policies by Sector; (1) Agricult ure; (ii) Agriculture Policies; (a) Import 
Measures: paragraph 19, page 103-104: 
 
China's most recent notification for in-quota impor ts for rice, wheat, and maize have been low 
compared to the quota quantity.  In response to  questions in the Committee on Agriculture, China 
indicated that it did not intend to review its me thods for allocating quotas, and the low level of 
imports relative to the size of the tariff quota was due to high levels of do mestic production coupled 
with high international prices.  Canada regrets China's decision to not review its methods for 
allocating quota.  
 
114. Will China reconsider the method for allocating quot a, specifically with regard to wheat?  
 
Answer:  China has no plan to change its method for allocating quotas. 
 
Part IV. Trade Policies by Sectors: (1) Agricu lture; (ii) Agriculture policies; (a) Import 
measures; paragraphs 18-19, page 103:   
It is noted that China's tariff rate quotas are mostly being allocated to state-trading enterprises and that 
they tend to be significantly under-filled. It is furt her noted that China attributes quota underutilization 
to market conditions, and that it does not in tend to review methods for allocating quotas. 
 
115. Could China describe the measures it has put in place as part of the administration regimes 
of its TRQs to ensure their maximum possible utilization? 
 
Answer:   There are specific provisions in the Interim Measures for the Administration of Import 
Tariff Quotas of Agricultural Products to ensure the maximum possible utilization of TRQs.  Please 
refer to the Interim Measures for details.  
Part IV. Trade Policies by Sector; (1) Agricult ure; (ii) Agriculture Policies; (c) Domestic 
Support: paragraph 23, page 104:      
 The Secretariat Report notes that China's direct paym ents are based on the area of land contracted by 
the farm household, and are decoupl ed from production and prices according to the notification to the 
WTO Committee on Agriculture.  
116. Could China provide information on the defined and fixed period that is used to form the 
payment basis for the contracted area of land?  
 
117. Could China confirm whether pr oducers who do not have contracted area of land in the base 
period, but currently are farming, have received direct payments?  
118. Could China provide details on specific crite ria that local authorities would base their 
decision on which areas under their jurisdicti on may receive payments?  Would such criteria 
exclude any producers who are currently farming? WT/TPR/M/264/Add.1 
Page 92 
 
 
   
119. Could China provide details on specific criteria that local authorities would use to base their 
decision on varying subsidy level from one loca lity to another?  Would such criteria depend 
on factors of production such as land? 
 
116-119 Answer : Approved by the State Council, each province decides its own cashing format of 
direct grain subsidy and comprehensive subsidy for means of agricultural production.  Both subsidies 
are targeted at grain producers.  Currently, the ma jor criterion that local authorities use is land size, 
including the size of land that is taxed, the size of  land that is actually used to produce grain and the 
land size of the second round contract.  Other crite ria such as time period and subsidy recipient are 
related to the cashing format and also decide d by provinces themselves.  When the central 
government considers the subsidy scale of each pr ovince, it shows policy preference for granary 
provinces.  Part IV. Trade Policies by Sector; (1) Agricult ure; (ii) Agriculture Policies; (c) Domestic 
Support: paragraph 24, page 104:  
 
The Secretariat Report notes that China's pilot in surance scheme was introduced in 2007 and it had 
expanded to 28 provinces by end of 2010. 
 
120. Does China intend to expand the insurance sch eme nation-wide and to other products? 
 
Answer: Since 2007, China's total accumulated premiu m income from agricultural insurance in 
five years has been over 60 billion yuan, an averag e annual growth rate of 85%.  In 2011, China's 
premium income from agricultural insurance reach ed 17.38 billion yuan, an increase of 28.1% on 
year-on-year basis, covering 652.3 billion yuan for agricultural risk. 
 Since 2011, China's agriculture insurance coverage  continues to expand.  In 2012, the central 
government incorporated the sugar crop into the pr emium subsidies range, up to 15 varieties financed 
by the central budget. 
 
121. Could China indicate what the cu rrent program participation rate is? 
 
Answer: Since 2011, China's agriculture insurance cove rage continues to expand.  In 2012, the 
central government incorporated the sugar crop into the premium subsidies range, up to 15 varieties 
financed by the central budget, coveri ng 168,600,300 farming households. 
 
Part IV. Trade Policies by Sector; (1) Agricult ure; (ii) Agriculture Policies; (c) Domestic 
Support: paragraph 27, page 105: 
 
This paragraph states Although the support is provide d through lower priced inputs in some areas, it 
has been reported that there is a growing tendenc y to pay subsidies directly to farmers without 
monitoring.   
122. Could China explain precisely what is or is not being monitored?  In addition, what is the 
share of support provided through lower price inputs versus the share of support paid directly 
to farmers? 
 
Answer: It is not being monitored whether farmers sp end the direct payment from the government 
buying seeds or not.  At present, most seeds s ubsidy funds are granted to farmers directly. 
  WT/TPR/M/264/Add.1 
 Page 93 
 
 
  Part IV. Trade Policies by Sector; (1) Agricult ure; (ii) Agriculture Policies; (c) Domestic 
Support: paragraph 31, page 106:  
 This paragraph states that… Although the prices have  been rising each year, the purchase price for 
rice has usually been below the world market pri ce.  According to the authorities, under ordinary 
circumstances, farmers sell grains at market prices;  it is only when the prices of rice and wheat in the 
principal growing areas fall below the minimum purchase prices that farmers may sell grains at the minimum purchase prices to enterprises designated by the State.    
 
123. Historically, what has been the relationshi p between this market price and the minimum 
purchase price?  
 
Answer:  In May 2004, the Chinese Government prom ulgated the Administrative Regulation on 
Cereal Circulation which specifies th at… To ensure market supply and to  protect the interests of grain 
farmers, the State Council can decide to apply the minimum purchase prices to key grain varieties in 
shortage in the principal growing areas when major changes occur in the grain supply.  
 The purchase price is usually determined by the market.  The Government exercise macroeconomic 
regulation and control in addition to the full fu nction of the market mechanism.  The minimum 
purchase price is carefully worked out on factors of production costs of farmers, the supply and 
demand in the market, the income changes of rural and urban residents, price levels and 
macroeconomic situation.  When the market price is higher than the minimum purchase price, farmers 
sell their grains at the market price.  When it becomes lower than the minimum purchase price, the 
latter will be initiated.  The implementing agency  will buy grains from farmers at the minimum 
purchase price.  Farmers can decide whether to sell th eir grains or not in line with their own needs.  
 
124. What are the principal growing areas that  determine the market price?       
 
Answer: The Administrative Regulation on Cereal Circulation provides that:  grain prices are mainly 
determined by the market supply and demand.  The State will strengthen its administration of cereal 
circulation and improve its macro economic regulation and control capacity.  The market price is not 
determined by the principal growing areas.  It is  based on two factors:  the supply and demand and 
costs of production.  Other natural and social factors that affect cereal grains production may also affect the cereal price.  They include the fluctuat ion of international price, the break of natural 
disasters and the macroeconomic measures on cereal, etc. 
 
125. If the market price falls below the minimum purchase price, may farmers choose to sell to 
buyers other than enterprises designated by the state? 
 
Answer: Farmers could sell their grain directly to al l qualified gain purchasers.  The implementation 
of the minimum purchase policy for grain in some of the main producing areas is mainly to better 
protect the interests of grain farmers. 
 
Part IV. Trade Policies by Sector; (1) Agricult ure; (ii) Agriculture Policies; (c) Domestic 
Support: paragraph 33, page 106:  
This paragraph states that In order to reduce demand and prices for grains, the State decided in 
November 2010 to restrict auctions to flour m illers, feed millers, and livestock producers.   
 
126. Exactly what is sold at weekly  auctions: ad hoc stockholdings, reg ular purchases of grain, or 
both? 
 WT/TPR/M/264/Add.1 
Page 94 
 
 
  Answer: Currently, weekly auction sales of food through the food wholesale market include both 
food sold at the minimum purchase price and food from  national interim storage.  In addition, some 
local governments and enterprises sometimes will resort to wholesale market in taking auctions or 
purchasing some food. 
 
127. How do other buyers other than flour millers, feed millers, and livestock producers purchase 
grain? 
 
Answer: At the moment other buyers can purchase grain by means of direct purchases, trade 
purchases, etc.  They can also participate in commercial aucti on activities between enterprises 
organized by wholesale markets.  
Part IV. Trade Policies by Sector; (1) Agricult ure; (ii) Agriculture Policies; (c) Domestic 
Support: paragraph 31-33, page 106:   
 
The report paints the following picture: each year  the National Development and Reform Commission 
(NDRC) sets a minimum purchase price for wheat.  When the market price is below the minimum 
purchase price, farmers sell wheat to designate d enterprises at the minimum purchase price. 
Purchasing and stockpiling takes place on an ad hoc  basis.  The State Administration of Grain 
purchases wheat for the national grain reserves.  Could China please explain:  
 
128. Are the designated enterprises mentioned in paragraph 31 the same as those listed in 
paragraph 32, i.e., Sinograin, COFCO, and CGLC? 
 
Answer: The designated enterprises carrying out the minimum purchase price mentioned in the 
paragraph 31 include Sinograin and its branches, CO FCO and CGLC and their affiliations entrusted 
by Sinograin. 
 
129. Does the purchasing and stockpiling on an ad hoc bas is apply to wheat? If so, at what prices 
are the purchases made? 
 Answer: Currently, wheat temporary purchasing and storage policy is only executed in Xinjiang 
Uygur Autonomous Region.  Purchasing price is at the same with the minimum purchase price of 
wheat in other main producing areas of that year.  
130. Are the purchases of wheat by the State Admi nistration of Grains for the national grain 
reserves different from or the same as any pu rchasing of wheat on an ad hoc basis?  
 
Answer: State Administration of Grain, as the main ad ministrative body responsible for the nations 
grain circulation, has not conduct purchases of wheat for the State Grain Reserve.  Interim purchasing and storage policy is a temporary policy implemented by the country according to the Xinjiang region 
wheat production and market conditions, and is curr ently implemented only in Xinjiang area.  Such 
policy aims to protect the interests of wheat growers. 
 
131. The operations of the State Administration of Grain seem to potentially distort the market for 
wheat.  Given that farmers can sell wheat to  the designated enterprises at the minimum 
purchase price, what is, at a time when the market price for wheat is below the minimum 
purchase price, the nature of that observed market  price?  What motivates a farmer to sell 
wheat to the State Administration of Grain at anything less than the minimum purchase price he obtains by selling to the designated enterprises? 
 
Answer: The State Administration of Grain is responsible for the administration of cereal circulation 
throughout China.  Working with other relevant  agencies, it works out the minimum purchase policy  WT/TPR/M/264/Add.1 
 Page 95 
 
 
  to protect wheat farmers interests, to protect the legitimate rights of the operators and consumers and 
stabilize the market order.  The State Administra tion of Grain does not engage in any purchase or 
business activities.  When the market price goes lo wer than the minimum purchase price, China Grain 
Reserves Corporation and its entrusted enterpri ses will buy wheat from farmers at the minimum 
purchase price.  This is to protect the interests of farmers and to stabilize the production of wheat.  
Farmers have their rights not to sell their wheat.  Wi th this system, some wheat will be diverted from 
the market circulation and thus help balance the market supply and demand, and stabilize the market 
price at a reasonable level.  When the market price goes higher than the minimum purchase price, 
China Grain Reserves Corporation will cease its purc hase.  The market will then fully function. 
Therefore the minimum purchase price is not a distortion to the market.  
 
Part IV. Trade Policies by Sector; (1) Agricultu re; (ii) Agriculture Policies; (d) Support Levels: 
paragraph 42-42, page 109:  
 Paragraph 42 suggests taking into account different c ountries, different situations, different problems, 
different stages of development, and different po licy objectives to measure s upport levels.  Paragraph 
43 describes two opposing trajectories of total valu e of support:  declining among OECD countries 
(which include some developing countries) and rapidly increasing in China.   
132. Could China please comment on how taking into account the cited differences might reduce 
any trade distortions arising out of the provision of large amounts of certain types of 
agricultural support.  
 
Answer: China is a large populous developing country.  To secure the supply of agricultural goods, 
especially the food, is always the priority of Chinese agriculture industry.  It is of more importance for 
China than for other developing countries.  Differe nt countries are of different conditions and faced 
with different challenges.  Particularly, devel oped countries and developing countries have different 
policy objectives due to their different development stages.  China's support measures are in line with 
its WTO accession commitment and relevant WTO rules.   The fact has shown that these food security 
and small farmers livelihood support measures play ed a positive role in stabilising agriculture 
production and farmers incomes.  They have no trad e-distorting effect.  The protection through tariff 
and tariff rate quotas is also considered by th e OECD when calculating supports to farmers.  
However, tariff and tariff rate quotas are protection measures allowed by the WTO.  Therefore we do 
not need to comment on the OECD calculation.   
 
Part IV. Trade Policies by Sector; (1) Agricultu re; (ii) Agriculture Policies; (d) Support Levels: 
paragraph 45, page 109:      
The Secretariat report points out some apparent conf licts with regard to China's policy objectives, in 
particular the report states On the one hand, protect ion of the natural environment is stressed in the 
12
th Five-Year Plan while subsidies and price-based  measures have contributed to high use of 
fertilizers which has, in turn meant they are one on the principle causes of groundwater pollution.  
Chinese authorities state that th ese mechanisms are meant to in crease production during seasonal 
shortages, but the use of price-based mechanisms to reduce price fluctuations, and maintaining high 
tariffs at widely varying levels may distort price signals for producers which means they may not be 
reacting to real demand. 
 
133. What policy reforms in China are being consid ered to shift from trade distorting price-based 
support towards less trade distorting forms of support like those meeting the green box 
criteria?  
 
Answer:   Having honoured its accession commitment and followed relevant provisions of the 
Agreement on Agriculture, China's AMS is zero and amber box measures are well below de minimis WT/TPR/M/264/Add.1 
Page 96 
 
 
  having little trade distorting effect. China will provide  more green box supports in accordance with its 
accession commitment and the WTO rules   
 
Part IV. Trade Policies by Sector; (2) Fisheries; (iii) Fisheries policy: paragraph 58, page 113: 
 
The report notes that official data on the value of su pport to the fisheries sector were not available.  
 
134. Could China please provide greater de tails on fisheries sector supports?  
 Answer:   China attaches great importance to the prin ciple of transparency and has made our best 
efforts in fulfilling transparency obligation.  Nowadays, members are conducting negotiations to 
strength the fisheries subsidies disciplines, including the notification regulation.  China is willing to 
provide relevant information once such  disciplines agreed upon by members. 
 
Part IV. Trade Policies by Sector; (4) Manufac turing (i) Recent Development: paragraph 73, 
page 116.   
It is noted that China has established a number of funding programs and funds for strategic emerging 
industries since 2011.  
 
135. Would China please provide more information on the funding program and funds available to 
high-end equipment manufacturing (one of its se ven strategic industries targeted in State 
Council Circular 2010/32)?     
 
Answe r: In recent years, to promote energy saving and environmental protection, such 
seven emerging industries as new generation information technology, biotechnology, new energy and 
new materials have become a commonly accepted st rategy, and countries successively take measures 
to accelerate the development of emerging industries.   By reference to these countries experience and 
practices, the Chinese Government issued the Decision on Speeding up the Cultivation and 
Development of Strategic Emer ging Industries in 2010, and set up special-purpose funds for the 
development of strategic emerging industries in  2011, and has adopted such means as equity 
participation and venture fund, high-end equipm ent research and development subsidiaries, 
implementing key application de monstration projects and key innovative development projects to 
break key core technology in the initial period of industrial development, cultivate new business type 
market, and put focus on supporting the research and development of technologies and products as 
well as achievement transformation in new gene ration information technology, biology and new 
materials domains.  Such support is universal, and targets at various types of enterprises. 
 
Part IV. Trade Policies by Sector; (4) Manufacturi ng; (ii) Selected subsectors; (a) Automobiles, 
automotive parts, and components: paragraph 82, page 119:   
It is noted that a review of the current pr icing mechanism for refined oil is planned. 
 
136. Could China please elaborate on when the new policy will be implemented?    
 
Answer: The Chinese Government has released the pric ing mechanism for refined oil on the portal 
website of competent price authority in May 2009 the National Development and Reform 
Commission.  That pricing mechanism is what we currently apply.  It is noted that a revision of the Automobile  Industry Development Policy is being drafted. 
 
137. Could China provide an indication of when  this revised policy will be implemented? 
  WT/TPR/M/264/Add.1 
 Page 97 
 
 
  Answer : The revision of the Development Policy for Au tomobile Industry is soliciting opinions, and 
detailed time of release and implem entation cannot be determined now. 
 
Part IV. Trade Policies by Measure; (4) Manufactu ring; (ii) Selected subsectors: paragraph 91, 
page 120:   
It is noted that China endeavoured to eliminate 25 million tonnes of steel production by the end of 
2011 pursuant to the Steel Industry Revitalization Plan and that the target for 2010 was achieved. 
 
138. Were substantial steel produc tion capacity reductions achieved  in 2011, and was China able 
to meet its overall goal of eliminating 25 million tonnes of production?       
 
Answer :  The Steel Industry Revitalization Plan dur ation from 2009 to 2011 proposes to eliminate 
25 million tonnes of backward steel production capacity.  Statistics indicate that China eliminated 
28.77 million tonnes of backward production capaci ty from 2009 to 2010 and planned to eliminate 
27.94 million tonnes in 2011.  The total eliminat ed production capacity for the three years exceeded 
56 million tonnes, which overfilled the plan.  
139. How much steel production capacity was added in each of 2010 and 2011?  
 Answer:  In 2010 the newly added production capacity of iron making was 68.05 million tonnes, 
newly added production capacity of steel was 72. 58 million tonnes.  In 2011, the newly added 
production capacity of iron making was about 70 mill ion tonnes, while 30 million tonnes of backward 
production capacity eliminated, a nd the net added capacity was 40 million tonnes. (In 2012 ?), the 
newly added production capacity of steel was 80 m illion tonnes, while 20 million tonnes of backward 
production capacity eliminated, and the net added capacity was about 40 million tonnes. 
 
Part IV. Trade Policies by Sector; (5) Services; ( ii) Financial services: paragraph 132, page 138:  
 
It is noted that 16 commercial banks are now allo wed to participate in bond trading on the Shanghai 
and Shenzen stock excha nges on a pilot basis. 
 
140. How many of these 16 commercial banks a re foreign-owned or joint stock banks? 
 
Answer:  according to China Banking Regulatory Commission Notice on Issues Related to the Pilot 
Program Concerning Commercial Banks Participate Bond trade in Stock Exchanges, the approved 
banks which are entitled to participate the bond trade on pilot basis are limited to the domestic listed 
banks.  At present, the above-mentioned 16 co mmercial banks do not include foreign banks. 
 
141. Are foreign-owned commercial banks and joint st ock banks accorded equal treatment as 
domestic Chinese banks in granting pilot scheme participation? 
 Answer: The Chinese authorities will decide the next ope ning up steps based on the result of pilot 
programme.   
 
Part IV. Trade Policies by Sector; (5) S ervices; (ii) Financial services:     
 
The Canadian Embassy has reported that the a pproval process for foreign and domestic insurers 
obtaining branch (as well as sub-branch, etc.) licences differs.   
142. Are foreign and domestic insurers accorded the equal treatment substantively in the branch 
licensing approval process, both in the analysis of  applications and the length of the approval 
process? WT/TPR/M/264/Add.1 
Page 98 
 
 
  143. Why does China maintain separate approval  processes for foreign and domestic insurers? 
 
142-143 Answer:  In accordance with China's WTO accessi on commitments, China accords national 
treatment to foreign insurance co mpanies for the branch establishmen t.  China Insurance Regulatory 
Commission (CIRC) applies the same law, regulations and procedures to the establishment of new branches of domestic and foreign-invested insurance companies.  Rules on Administration of Insurance Companies stipulates specific requi rements for the application and establishment 
procedures of branches, which are transparent, non-discriminatory and consistent with China's 
commitments. 
 
Part IV. Trade Policies by Sector; (5) Services; (iii) Telecommunications; (a) Market Structure: 
paragraph 168 and (b) Regulatory Regime paragraph 171, pages 138-139:     
It is noted that China's telecommunications regul atory authorities have set out licences, regulations 
and tariffs governing the operation of telecommunications providers in China. 
 
144. Could China provide information on: 
a. the procedures of its regulatory authoriti es for applicants to request a licence or 
regulatory decision;  
b. the procedures for affected service provid ers and service users to participate in the 
licensing and regulatory processes;  and 
c. the means for gaining public access to the regulations, tariffs and decisions of the 
telecommunications regulatory authorities in China . 
 
a-b-c Answer: According to Regulation on Telecommunica tions, MIIT issued the Measures for 
Administration of Telecommunication Business Licen se, which stipulates the application conditions, 
requirements on documents and a pproval procedures for telecommunication business license.  The 
above-mentioned regulation and measur es have been published and they are available at the official 
website of MIIT (www.miit.gov.cn).  
MIIT publishes the relevant regulations and measur es at its official website and other authorized 
websites.  
Part IV. Trade Policies by Sector: (5) Services; (iv) Transport (a) Maritime transport services: 
paragraph 209, page 146:  
 
145. Could China list the ports, both coastal and inland, that are open to foreign vessels? 
 
Answer: Currently, there are 284 various types of ports in China, among which, 82 costal ports and 
56 inland ports are opened up to foreign ships.  Since there are over 100 opened up ports, for the detailed list of these ports, Canada  may consult with General Administration of Customs of the 
People's Republic of China. 
 
Part IV. Trade Policies by Sector; (5) Services; (iv) Transport; (a) Maritime transport services: 
paragraph 212, page 147:  
 It was indicated that after following registration formalities a foreign shipping company may transport 
self-owned or leased empty containers between coastal ports in China.  
 
146. Could China clarify what it means by registration formalities? 
 
Answer: At present, international liner transportati on operators engaging in liner transportation 
among Chinese ports could allocate and transport em pty containers among Chinese coastal ports once  WT/TPR/M/264/Add.1 
 Page 99 
 
 
  they submit application to Ministry of Transport of  the People's Republic of China for the record and 
acquire the Empty Container Transport Certification.   But this business is only limited to allocating 
and transporting self-owned or rented empty contai ners by self-employed ships of the international 
liner transportation operators. 
 
147. Could China clarify how many foreign shippi ng companies currently transport self-owned or 
leased empty containers between coastal ports?    
 
Answer: The requirement for international liner tr ansportation operators engaging in referred 
business is to submit application to Ministry of Tr ansport of the People's Republic of China for the 
record and acquire the Empty Container Transport Certification, with no restriction on quantity or 
other aspects.  Currently, an overwhelming majority  of the foreign shipping companies engaging in 
liner transportation among Chinese ports have acqui red Empty Container Transport Certifications 
granted by Ministry of Transport, China. 
 
148. Would China allow the transport of empty c ontainers between a coastal port and an inland 
port if registration formalities have been followed?   
 
Answer:  The international liner transportation operat ors who has finished registration procedures 
could allocate and transport empty contai ners only between Chinese coastal ports. 
 
149. Is China considering allowing a similar regim e for transport between inland waterways? 
 
Answer:  Maritime Code of The People's Republic of Ch ina stipulates that maritime transport of 
foreign ships between the ports of the People's Re public of China is prohibited in principle.  
Therefore, the international liner transportation operators who has finished  registration formalities 
could allocate and transport empty containers only between Chinese coastal ports, with the premise 
that their business is only limited to  allocating and transporting self-ow ned or rented empty containers 
by self-employed ships of the international liner tran sportation operators.  As regard to the internal 
waterways transport, there is no such mechanism. 
 
150. Can China identify the main reasons why no wa ivers have been granted to foreign shipping 
companies?    
 
Answer:  There is explicit description on the scope of prohibited business for foreign ships in 
Maritime Code of The People's Republic of Chin a, please refer to the answer for question 148. 
 
Part IV. Trade Policies by Sector; (5) Services; (iv) Transport; (d) Rail: paragraph 270, page 
159:   
It was noted that the Chinese Ministry of Railway s will be undergoing certain reforms, such as 
separating its functions as both the regulator and ope rator of the national railway network and the rail 
price-setting mechanism.    
151. Could China explain how far they have progressed  with separating the operational function 
of the railways from the regulatory function?    
 
Answer: Since China's opening up and reform, Ministry of Railways of People's Republic of China 
(MOR) has been always actively promoting the reform of railway enterprises and adjusting 
administrative function of MOR to better facilit ate the enterprises in accordance with central 
governments requirement on SOE reform.   WT/TPR/M/264/Add.1 
Page 100 
 
 
  Over the past one year, MOR has issued a series of  reform measures, introduced a series of reform 
measures, and further delegated operational au tonomy to subordinat e railways bureaus. 
 
As the competent authority, MOR concerns more a bout the plans, policies, regulations and other 
system construction related issues for better facilitate  industry development, it also further strengthen 
the system building of railway technical standards.   Especially in the aspects of railway transport secur ity supervision, railway project quality supervision 
and quality improvement of transport services, MO R spares no efforts to strengthen functions to 
improve the efficiency of government administra tion and supervision, and implement enterprises 
responsibility and accountability, with the aim of  meeting the need of economic and social 
development.  
152. Could China explain how far they have moved to  allow pricing to be set by the operating 
body?    
 
Answer: Yes, please refer to http://www.chnrailway .com/news/20120521/05213930 28.html for more 
information.  Part IV.  Trade Policies by Sector; (5) Services:    
 
Certain service professions play an important role in enhancing the two-wa y trade (for both good and 
services trade) among WTO Members.  Such key professionals include engineers, architects, lawyers and accountants.  Yet, Canada noted the absence of a separate section in the Secretariat Report on this 
vital service sector.  
 
153. Could China provide an overview of the professional services sector, for key professions such 
as engineers, architects, lawyers and accountants?   In particular, could information be 
provided on each of them, for examples in  terms of how these professions are regulated 
(through self-regulation, by formal, delegated  authority regulation to an association, or 
through direct government regulation), and whet her any of these professions maintain a 
temporary licensing regime for foreign prov iders and if so, under what conditions?  
 
Answer: We suggest that the WTO Secretariat add a separate section on professional service in the 
Secretariat Report in the future, as suggested by Canada.  And China will offer assistance in providing 
relevant information on Chinese professional service sectors. 
 
Appendix Tables, Table AIII.7, China's membe rship of international intellectual property 
rights conventions, 2011, p. 215:  
With respect to the WIPO Performances and Phon ograms Treaty, the WIPO website indicates that 
China has filed a reservation which provides that "C hina not consider itself bound by Article 15(1) of 
the WPPT Treaty with regard to the right of the performers":     
154. Could China explain what the implications of this reservation are?  Are payments by 
broadcasters for playing music over the radio or television discounted as a result of this 
reservation?  What are the other applicable disc ounts?  What are the bases for remuneration 
rates for the broadcast of sound recordings?  Are there different rates for each rights?  What 
are the rates?  Under which procedure or pr ocess are the rates established by the National 
Copyright Administration (d iscovery process, evidence filed by the parties, valuation 
methodologies, proxies, etc.)?  How are coll ective societies regulated by the National 
Copyright Administration (directions, guidelin es, orders, directives, prescribed criteria, 
etc.)?   WT/TPR/M/264/Add.1 
 Page 101 
 
 
   
Answer : Payments by broadcasters for playing music over the radio or television are not discounted 
as a result of this reservation.  On 6 May 2009, the State Council promulgated the Interim Measures 
for the Payment of Remuneration for Audio Products Played by Radio and TV Stations in accordance 
with Article 44 of the Copyright Law.  The Measures, which stipulates provisions on the calculation and payment of remunerations, has followed st rict formulation procedures including project 
establishment, drafting, review, approval and promulgation.  
The basis for remuneration rates for the broadcast  of sound recordings includes the advertisement 
revenues of various radio stations and TV stations  (subject to the statistical communiques of SARFT 
and provincial radio and television bureaus) and the share of music use in total broadcasting time.  
According to statistics, the Music Copyright Soci ety of China signed contractual license fees of 
RMB 19 million with CCTV in 2010, and signed cont ractual license fees of RMB 20.25 million with 
CCTV, CNR and 10 local radio stations in 2011. 
 
As the only collective administration organization of music copyright jointly initiated and founded by 
NCAC and the Chinese Musicians Association in th e Chinese Mainland, the Mu sic Copyright Society 
of China is specialized in safeguarding the legitimat e rights and interests of music composers, lyricists 
and other music copyright holders and carries out various tasks in accordance with Article 8 of the 
Copyright Law and the Regulations on the Collective Administration of Music Copyright. 
 
Report by the Government  of China (WT/TPR/G/264) 
 
Part II. Economic and Trade Environment a nd Macroeconomic Policy Direction; (2) Improving 
Relevance, Flexibility and Perspectiveness of Ma croeconomic Policy; (i) Macroeconomic Policy 
Objectives: paragraph 14, page 8: 
 
In reference to the 12th Five-Year Plan, the Government repor t notes China's intention to enhance 
incentive and restraining mechan isms for energy conservation and emission reduction.     
 
155. Can China provide additional information on the policy framework that will be used to 
advance this objective?  What are the implicati ons of this objective for China's international 
trade policy? 
 
Answer:  According to the 12th Five-Year Plan, the Ministry of Environmental Protection will 
implement the Comprehensive Work Program for Energy Saving and Emission Reduction during the 
12th Five-Year Period by the State Council.  On one  hand, incentive policies shall be perfected and 
permanent mechanisms shall be improved.  E nvironmental economic policies and market-based 
instruments shall be made full uses of in order to promote pollution reduction.  The reform of levying 
fees for pollutant discharge shall be deepened and th e charge rate shall be moderately elevated.  The 
electricity price for desulphurization shall be st rictly implemented and the policy regarding the 
electricity price for the coal-fired power plant with flue gas denitrification shall be put forward as 
soon as possible.  The compensated gaining and use-ri ght trading system of sewage drainage shall be 
established and perfected while the incentive policy to offer enterprises and regions with financial 
subsidies for emission reduction shall also be estab lished.  At the same time, polices and measures 
encouraging enterprises and the public to participat e in emission reduction shall be actively explored 
and innovated. 
 On the other hand, harden the target and respons ibility while enhancing the accountability.  Relevant 
governments at the provincial level, power comp anies, power grids and large-scaled energy 
enterprises shall be organized to sign responsib ility pledges for emission reduction.  Monitoring, 
assessing, inspecting and accounting methods for the emission reduction of key pollutants shall be 
revised and perfected, and the assessment of local total emission amount reduction and the degree to WT/TPR/M/264/Add.1 
Page 102 
 
 
  which the annual objective of emission is complete d shall be carried out with the assessment results 
reported to the State Council for approval and a nnounced to the public and with rewards and 
punishments strictly implemented.  At the same time, strict measures for EIA approval shall be 
adopted and additional emission sh all be taken under effective cont rol, both of which shall help 
provide a solid guarantee to achieving the emission reduction objective of the 12th Five-Year Plan.  
 The strategic guidance for environmental protection in China is to protect the environment while 
developing the economy and to develop the econom y while protecting the environment, putting an 
emphasis on the role environmental protection has been playing in promoting the transformation of 
economic development mode.  The objective of en ergy saving and emission reduction of China has 
helped to boost the demand for environmental protection industry and to advance its healthy 
development.  All the policies abide by the prin ciple of national treatment. (The Ministry of 
Environmental Protection)  Part II. Economic and Trade Environmen t and Macroeconomic Policy Direction; (3) 
Accelerating the Transformation of Economic De velopment Pattern: paragraph 20, page 9:    
 
The Government report notes that China has realized  the importance and urgency of transforming the 
economic development pattern to the robust  and sustainable economic development. 
 
156. Can China provide additional information on how sustainability is defined within its 
economic and trade policy framework?  How is sustainability being promoted/implemented at 
the policy level in China? 
 
Answer:  To propel the sustainable development of economy, gradually change the high pollution & 
high energy consumption economic growth pattern, which mainly depends on investment and export, 
the Chinese Government more proactively combin es economic growth speed with development mode, 
implements the strategy of domestic demand e xpansion, especially the consumption demand, 
accelerates the development of service industry, st rengths the protection of intellectual property 
rights, propels energy saving, emission reduction and industrial restructuring, and unswervingly 
deepen system and mechanism reform.  Meanwhile , the Chinese Government is committed to the 
balanced development of import a nd export, makes more efforts to expand export, and optimizes trade 
payment structure.  More attention has been tr ansferred from absorbing foreign investment to 
attracting foreign investment and investing in fore ign countries, China aims to create a more open and 
optimized investment environment.  China also addresses itself to develop full-sided economic and 
trade relations, carries out practical cooperation ba sed on full exertion of the advantages to reach 
mutual benefits and win-win.  
Part II: Economic and Trade Environmen t and Macroeconomic Policy Direction; (3) 
Accelerating the Transformation of Economic Development Pattern; (ii) Accelerating the 
Development of the Service Sector: paragraphs 28-29, page 11:     
 
China notes that accelerating the development of the service sector will play an important role in 
China's economic development.  This is also indicated in China's 12
th Five Year Plan;  yet many 
restrictions remain on service sectors open to foreign investment.  
157. Could China provide more inform ation on its plans to further open up the services sector?  If 
so, which sectors and what is the timeline?      
 
Answer: China always attaches great importance to th e development of services industry and takes a 
positive position on the liberalization of trade in services.  On 24 December 2011, the Chinese Government issued the revised Catalogue for Gu idance of Foreign Investment, which has been 
implemented since 30 January 2012.  This revised Catalogue for Guidance of Foreign Investment  WT/TPR/M/264/Add.1 
 Page 103 
 
 
  aims to enlarge the opening-up in services sectors, an d encourages foreign enterprises to invest in the 
modern services industry.  For example, it has m oved the foreign-invested medical institutions and 
financial leasing companies into the permitte d category from the restricted category. 
 
China recognizes that the progressive liberaliza tion of trade in services among WTO Members would 
promote the development of international trade in  services.  Since service industry cover many 
sectors, we don't have specific timetable for the opening up in each sector.   However, further 
liberalization of services trade in China are be discu ssed in the DDA negotiations and we hope that a 
successful conclusion will be reached soon.  
 
158. Could China provide more information on the ar duous efforts it will make to further develop 
China's services sector? 
 
Answer: Please refer to the answer for Question 156. 
 
Part II.  Economic and Trade Environmen t and Macroeconomic Policy Direction; (3) 
Accelerating the Transformation of Economic Development Patterns; (ii) Accelerating the 
Development of the Service Sector: paragraph 28, page 11: 
 It is noted that the Chinese Government has stri ved to establish fair, standardized and transparent 
market access conditions to encourage the particip ation of private capital and non-public economy in 
services sectors, and proposed a series of guidance on  the development of specific services sectors.  
 
159. Could China provide more details on what gui dance might entail, particularly in the sectors 
of professional services and e-commerce?  
 Answer: We are in the process of coordinating domestic  agencies involved to generate proper details 
on this issue.  
Part II. Economic and Trade Environmen t and Macroeconomic Policy Direction; (3) 
Accelerating the Transformation of Economic Development Pattern (iv)  Advancing Energy 
Conservation and Pollution Reduction and Industrial Restructuring, paragraph 37, page 12:      
 
The report notes that for industries seriously dama ging resources and the environment, the access 
standards were further raised.  
 
160. Can China clarify what is meant by the ac cess standards in this section?  Also, what 
methodology does China use to determine wh ether environmental damage is serious?  
 
Answer : The industrial access standards refer to index es and conditions in terms of technology, 
environmental protection and safety that are set in line with the industrial development to develop and 
protect resources and environment and boost the health y development of different industries.  These 
standards include technologies and equipment adopted by enterprises, production scale, energy consumption indexes, comprehensive utilization of  recourses, pollutant emission index and product 
quality standards.  
The Environmental Protection Law a nd related laws and re gulations give standards to judge whether 
an enterprise has caused serious impact on the en vironment, for example, whether it has installed 
anti-pollution equipment, whether the equipment wo rks well, whether it causes damage to farmland 
and vegetation and contaminates unde rground water during its producti on, and whether its pollutant 
emission exceeds limits defined by the central government and local governments.  WT/TPR/M/264/Add.1 
Page 104 
 
 
  Part II. Economic and Trade Environmen t and Macroeconomic Policy Direction: (3) 
Accelerating the Transformation of Economic Development Pattern (iv)  Advancing Energy 
Conservation and Pollution Reduction and Industrial R estructuring, paragraph 37, page 13:       
 
It is noted that stricter policies and environmenta l protection standards have been adopted for certain 
non-renewable resources, including rare earth minerals.  
161. Can China provide further details on these po licy changes?  Other than production caps, 
what measures have been adopted  to promote reasonable and efficient exploitation and 
utilization? 
 
Answer: The measures include:  be strict at project a pproval and environmental protection standards, 
encourage enterprises to conduct technical reform wi th advanced technologies, enhance recovery and 
comprehensive utilization of resources, promote op timization of industrial layout and structural 
adjustment and conduct specific rectifications. 
 
Part III. Trade and Investment Development and Related Policies; (2) Promoting Balanced and 
Sustainable Development of Trade and Investme nt; (i) Striving to Balance the Growth of 
Imports and Exports: paragraph 75, page 20:     
 
The report notes that, starting in July 2009, China exempted certain spare parts of major technical 
equipment from import tariffs and VAT.  It claims that these changes promote industrial restructuring, energy saving, and emission reductions.   
162. Can China provide additional information on the product lines that were granted an 
exemption? 
 
Answer : Equipment granted a taxation exemption is from 16 industries, including large scale power 
generation equipment that is clean a nd highly efficient, and other products. 
 
163. Can China explain how these exemptions result in energy savings and emission reductions?  
What emissions were reduced through these changes?    
 
Answer:  By supporting the research and development of large scale wind turbines, large scale 
environmental protection equipment and other clean and highly efficient generators, this policy will 
promote energy savings and emission reductions in China. 
 
Part III. Trade and Investment Development and Related Policies; (3) Optimizing the 
Utilization of Foreign Investment through Further Opening Up; (i) Foreign Investment Policy Direction: paragraph 91, page 23:     
China notes in paragraph 91 that the April 2010 Op inions on Further Improving the Use of Foreign 
Investment, released by the State Council, Reform of foreign investment regime should be deepened 
to sort out administrative licensing and further improve transparency.    
164. Could China please elaborate on the steps that will be taken in the short and long term to 
achieve the goals of simplifying administrative licensing processes and improving 
transparency?      
 
Answer: Yes, please refer to http://www.fdi.gov.cn/ for more information. 
  WT/TPR/M/264/Add.1 
 Page 105 
 
 
  CHILE 
 
Defensa Comercial   
 
Informe de la Secretaria WT/TPR/S/264, capítu lo III Políticas y Prácticas Comerciales por 
Medida, sección 1.- Medidas que Afectan Dir ectamente a las Importaciones, número iv) 
Medidas Comerciales Especial es, Medidas Antidumping:  
 
En el párrafo 52 se señala que: "el 'centro de lect ura pública' contiene t oda la información pública 
(es decir, no confidencial) relacionada con una investigación;  las partes interesadas en la 
investigación pueden acceder al centro de lectura pa ra buscar, leer y copiar toda la información 
pertinente (no solamente la información relacionada con el daño)".  
 
1. ¿Existe algún requisito y/o procedimiento esp ecial contemplado en la reglamentación para 
acceder a la calificación de 'parte interesada'?    
According to PRC Anti-dumping Regulations, the Interested Parties include the Petitioner, the 
known exporter(s) and import, the government(s) of the country (countries) (region(s)) and other 
interested organizations and individuals.  
2. ¿Existe la posibilidad de acced er de manera virtual o electrónica a la información que se 
encuentra disponible en el "centro de lectura pública"? 
 
The Interested Parties can get the catalogue of th e unclassified information and materials from other 
interested parties through the internet.  
 
Política de Competencia    
 
Informe de la Secretaria WT/TPR/S/264, capítu lo III Políticas y Prácticas Comerciales por 
medida, sección 3.- Medidas que Af ectan a la Producción y el Comercio, número vi) Política de 
Competencia y protección de los consumidores:   
 
En el Párrafo 239, sección a) Marco Legislativ o e Institucional, se señala que entre las leyes y 
disposiciones de China relativas a la competenci a figura la Ley de Represión de la Competencia 
Desleal, cuya revisión se halla en la fa se final del proceso legislativo.  
 
1. ¿Qué motivó la revisión de la ley y cuáles serán los aspectos fundamentales que se modificarían 
(en caso de haber modificaciones)?     
 
Answer: The provisions in the Anti-Monopoly Law are most  principle, and the enforcing authorities 
such as MOFCOM can promote to formulate the regul ations within the limits of their functions and 
powers, in order to elaborate the provisions of  the law and enhance the transparency of the 
enforcement. 
 
En el Párrafo 246, sección c) Fusiones y adquisiciones, se señala que "Entre 2008 y 2011 se 
sometieron al MOFCOM 382 casos para su exa men, de los que 371 casos se aprobaron sin 
condiciones, 10 casos se aprobaron con condiciones y 1 se rechazó."  
 
2. ¿Qué parámetros incluye o considera el examen de fusiones? ¿Qué tipo de condiciones se han 
impuesto?   
 WT/TPR/M/264/Add.1 
Page 106 
 
 
  Answer: According to Article 27 of the Anti-Monopoly La w, the following factors shall be taken into 
consideration in the review of concentration of undertakings:  
 
(1) the market shares of the undertakings involved in concentration in a relevant market and their 
power of control over the market; 
(2) the degree of concentration in relevant market; (3) the impact of their concentration on assess to the market and technological advance; (4) the impact of their concentration on cons umers and the other relevant undertakings 
concerned; 
(5) the impact of their concentration on th e development of the national economy;  and 
(6) other factors which the authority for enforcement of the Anti-monopoly Law under the State 
Council deems to need consideration in terms of its impact on market competition. 
 
Propiedad Intelectual   
 1. ¿En qué consiste la Estrategia Nacional de Propiedad Intelectual anunciada por el Consejo de 
Estado en 2008?  
 
Answer: Please refer to the website at http://www. gov.cn/zwgk/2008-06/10/content_1012269.htm for 
the full text of the Outline. 
 
2. ¿A qué se refiere el concepto de "derechos de propiedad intelectual autóctonos” y cuál es su 
relación actual con la “innovación autóctona" (indigenous innovation)? ¿De qué manera se 
relaciona con la Estrategia Nacional de Propiedad Intelectual?      
Answer: For "indigenous intellectual property", there is no specific legal definition in China now. 
 
3. ¿Qué cambios sustantivos fueron introduci dos por las reformas legales que se han hecho en 
materia de Propiedad Intelectual?     
Answer:  The main revisions of the amended Patent Law include:  enhancing conditions for patent 
rights granting, improving compulsory license system to protect public health and enhancing patent right protection while protecting the legitimate ri ghts and interests of the public.  The amendment 
work of Trademark Law, Copyright Law and Anti-Unfair Competition is still in progress. 
 
4. Respecto de las indicaciones geográficas y c onsiderando las normas del Acuerdo sobre los ADPIC, 
¿cuál es la diferencia entre la protección que otor gan los registros efectuados por las 3 agencias, 
más allá de los plazos de protección que se señalan?    
Answer:  Currently, SAIC, AQSIQ and MOA are join tly studying how to establish the joint 
Geographical Indications certification system.  
 
The three agencies have different focuses in GI protection.  The SAIC protects geographical indications by applying collective trademark and ce rtification trademark registration pursuant to the 
Trademark Law.  Corresponding remedies for geographical indication infringement include 
administrative, civil and criminal ones.  The Mini stry of Agriculture has registration administration 
for geographical indications of agricultural prod ucts based on administrative rules formulated in 
accordance with the Law on Quality Se curity of Agricultural Products.  The focus of the protection is 
on geographical indication resources of agricultura l products, product quality and traditional farming 
culture.  AQSIQ’s protection of geographical i ndication focuses on processing, which is based on 
administrative rules formulated in acco rdance with the Product Quality Law. 
  WT/TPR/M/264/Add.1 
 Page 107 
 
 
  5. El artículo 31 del Acuerdo sobre los ADPIC establece ciertos requisitos para posibilitar "otros 
usos si autorización del titular de  derechos". ¿Cómo se compatibilizan dichas disposiciones con la 
posibilidad en el ordenamiento jurídi co de China de otorgar licenci as obligatorias como una medida 
de remediar o sancionar conductas que atentan contra  el bien jurídico libre competencia, según lo 
señalado en los puntos 290 y siguientes?    
Answer: The provisions of compulsory license in Patent  Law and its implementation regulations are 
consistent with Article 31 of TRIPS.  
 
Subvenciones   
 En el párrafo 189 se señala que el uso de sub venciones y otras ayudas gubernamentales parece ser 
una característica importante de la formulación de  políticas comerciales de China.  Sin embargo, 
debido a la insuficiente información de que dispone la Secretaría, es difícil confirmarlo.  En general, 
se dispone de muy poca información detall ada sobre las subvenciones y otras ayudas 
gubernamentales de China, particularmente a nivel s ubcentral, en lo que respecta a clase y magnitud, 
desembolsos financieros realizados, y objetiv os y resultados de los programas.  
 Pregunta : Agradeceríamos nos clarificaran a que se de be esta falta de información al respecto. 
Asimismo, agradeceríamos que nos clarificaran que es o a que corresponde lo notificado por China a 
OMC.   
 
Answer:  Use of subsidies and other government assistance is an important feature in trade policies of 
many WTO Members.  Subsidy notification entails  huge amount of work on information gathering 
and analysis and this is particularly a challenge fo r China as a large developing country.  To fulfill its 
notification obligation under the SCM Agreement systematically, China since its WTO accession has 
concentrated its efforts on notifying comprehensively central programs as a first step, and would then 
extend its efforts and experiences to cover those at  the sub-central level.  Now that substantial 
progress has been made in fulfilling th e transparency obligation of the subsidies at the central level, 
China will work towards incorporatin g local subsidies in its future notifications.  As to the 2009-2011 
notification, it will not be too difficult if covering only central programs.  However if local programs 
are to be incorporated, it will be a different case.   In any case, China will accelerate its efforts for a 
new notification.  
En el párrafo 192 se señala que en la notificació n más reciente que China ha hecho a la OMC en 
relación con las subvenciones (notificación de 20 09) figura información sobre la ayuda a las 
empresas establecidas en diversos sectores o regi ones (cuadro AIII.6).  En la notificación se 
enumeran los programas que prestar on asistencia a nivel del Gobi erno central entre 2005 y 2008;  
no se ha facilitado información sobre programas de subvenciones otorgados por los gobiernos 
locales.  En muchos casos no hay cifras precisas sobre la magnitud de las subvenciones que concede 
el Gobierno, muchas de las cuales revisten la form a de bonificaciones fiscales.  La notificación de 
2009 de China no ha sido examinada aún por el Comité de Subvenciones y Medidas Compensatorias.  
 Pregunta : ¿Podría China darnos una cifra estimativ a de los montos en subvenciones?  
 
Answer: In China's subsidy notification, the amount of subsidies provided in the form of budget 
allocation has all been provided.  The amount of tax foregone as a result of the implementation of 
preferential tax policies is not available because cu rrently China does not have a statistic system for 
tax expenditure.  
En el párrafo 204 se señala que las empresas con escasos beneficios reciben un trato fiscal 
preferencial.  
 WT/TPR/M/264/Add.1 
Page 108 
 
 
  Pregunta : ¿Cómo determinan los beneficios y a cual es empresas se le ayuda? ¿Se subvenciona, 
entonces, a aquellas empresas que funcionan a perdidas?    
Answer: From 2010 to 2015, for small and low-profit enterprises with yearly payable tax amounting 
to 60,000 Yuan or less, the taxable income is reduced  to 50% of its income, and the enterprise income 
tax is levied at a reduced tax rate of 20%.  
Otras Preguntas 
 
1. Did PRC include in its recent RTA/FTAs with Chin ese Taipei and with Costa-Rica any labour 
cooperation Memorandum of Understanding or other agreement? On what terms?   
 
Answer: The issue of labour is not included in Ch ina-Costa Rica Free Trade Agreement and in 
ECFA. 
 
2. PRC has included labour issues in its FTAs  with Chile, New Zealand and Peru through 
separate Memoranda of Understanding on Labour Cooperation.  How evaluates PRC the experience of these agreements?  
 
Answer: The contracting parties committed to strength ening bilateral exchanges and cooperation in 
labor and social security by implementing the "Memorandum of Understa nding on Labor Cooperation 
between the Governments".   
CHINESE TAIPEI 
 PART I:  REPORT BY THE SECRETARIAT (WT/TPR/S/264) 
 II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES (3) Trade Agreements and Arrangements 
(ii) Regional arrangements  
Pages 16 & 17 (Para 29)  
 As the Report indicates, in its 12
th Five-Year Plan, China intends to accelerate the implementation of 
the Free Trade Area Strategy, strengthen economic li nkages with major trading partners, and deepen 
cooperation with emerging markets and developing countries. 
 
Questions:  1. Could China please elaborate further on the devel opment strategies and objectives of free trade 
agreements or arrangements in the period covered by its 12
th Five-Year Plan?  
 
Answer: In the future, China will adapt to the interna tional situation of accel erated regional economic 
integration and actively work with relevant countri es and regions to advance the construction of free 
trade areas while resolutely upholding multilateral trading system and participating in the Doha 
Development Round in an in-depth manner.  Mo reover, China will impl ement free trade area 
strategies, continue its opening up policy to prom ote reform, development and win-win results, and 
leverage domestic and internati onal markets and resources to expand the room for economic and trade 
development.  To be specific, China will impl ement free trade agreements signed, increase the 
utilization ratio of preferential policies under the fr ee trade agreements and take advantage of free 
trade area agreements in expanding consumption and promoting trade and investments on one hand,  WT/TPR/M/264/Add.1 
 Page 109 
 
 
  and will actively promote breakthroughs in on-goin g free trade area negotiations and endeavour to 
start new negotiations on the other hand.   2. Apart from trade in goods and services, what other items are the subject of China's attention in 
the context of the above? 
 
Answer: Apart from trade in goods and services, China has also paid attention to investment, 
economic and technological cooperation as well as othe r sectors that both parties are interested in.  
 (4) Foreign Investment Regime (iii) Examination and approval procedure 
 
Page 21 (Paras 49 and 50) 
 
As indicated in the Report, FDI in "important or restricted" projects requires verification by the 
authorities in accordance with the relevant regulations.  All other investment projects need to be registered only with the relevant authorities, su ch as the local development and reform commissions 
(DRCs).  Questions: 
 
3. In practice, how many working days on average doe s it take to approve a foreign investment case 
in China?  
 
Answer: To this day, China has not collected the da ta of average time for approving a foreign 
investment case.  
 
4. Are there great differences between the various pr ovinces of China in the number of days it takes 
for the examination proced ures to be completed?  
 
Answer: No. The relevant Chinese laws and regulations on foreign investment explicitly provide the 
time limits for various examination procedures, a nd the government departments at all levels should 
exercise administration in accordance with law a nd complete relevant examination and approval 
procedures within the given time periods.  At the same time, the Chinese Government has also 
attached importance to strengthening training and regulating the administrative behaviours of 
governments at all levels to improve the degr ee of facilitation and endeavour to foster a good 
investment environment for foreign investors.   
5. In the event that a foreign investment application is rejected, are prospective  investors informed 
of the reasons for the rejection?  
 Answer:  Yes.  
 
III. TRADE POLICIES AND PRACTICES BY MEASURE (2) Measures Directly Affecting Exports (v) Tax concessions under processing trade 
 
Page 59 (Para 145) 
 Under the mode of "processing trade", goods are im ported in bond (therefore not subject to import 
tariffs and related taxes) if they are exported within a certain period after processing and assembly. 
 WT/TPR/M/264/Add.1 
Page 110 
 
 
  Questions:  
 6. We would be interested in knowing how many d ifferent types of processing trade in China come 
under bonded Customs supervision and clearance procedures?  
 
Answer: According to existing policies, there are generally two types of bonded management for 
processing trade: first, bonded management for all ma terials and parts of enterprises that enter the 
special Customs supervision areas; and second, bon ded management for all imported materials and 
parts applied by enterprises outside special Cust oms supervision areas for export processing, which 
will be cancelled based on verification after fished goods are exported.  
 
7. We would also appreciate more information on how the rules for domestic companies apply to 
foreign companies in bonded areas. 
 
Answer: According to existing policies, the commer ce authorities have implemented unified 
administrative rules on processing trade for forei gn-funded and Chinese-funded enterprises located in 
bonded areas and other special Customs supervision areas.   
(3)  Measures Affecting Production and Trade  
(vi) Competition and consumer protection policy  
Page 78 (Para 243)   
 
Enforcement of competition legislation in China is  shared by three agencies, and coordinated and 
"guided" by the Anti-Monopoly Commission under the State Council.  The Anti-Monopoly Bureau of 
the MOFCOM is responsible for anti-trust revi ews.  The Price Supervision and Anti-Monopoly 
Bureau of the National Development and Reform Commission is the authority over price-related 
violations of the rules against monopoly agreem ents and abuse of market dominance and of 
administrative power.  The Anti-Monopoly and Anti -Unfair Competition Enforcement Bureau of the 
State Administration for Industry and Commerce (S AIC) enforces the Anti-Unfair Competition Law 
on issues related to monopoly agreements, abuse of market dominance, and abuse of administrative 
powers (excluding price-related monopolies).  
Question:  
 
8. Would China consider establishing a single author ity responsible for the enforcement of all 
competition legislation in the future? 
 
Answer: SAIC, NDRC and MOFCOM have conducted smooth communications, close cooperation 
and good coordination during anti-m onopoly work, and jointly carried out in-depth researches on and 
reached a consensus on some issu es.  These three authorities coordinate with each other to do a good 
job in the enforcement of the Anti-monopoly Law.  According to the Anti-monopoly Law, the State 
Council will establish the Anti-monopoly Commission r esponsible for the organization, coordination 
and guidance of anti-monopoly work.  In July 20 11, the Anti-monopoly Commission Office under the 
State Council was officially established at th e Anti-monopoly Bureau of MOFCOM, which is 
responsible for the routine work of the Commission.  
 
Page 80 (Box III.1)  
 
As indicated in the first paragraph of Box III.1, in the NDRC Provisions on Procedures of Administrative Enforcement of Prohibition of  Price Monopoly (NDRC Decree 2010/8), relevant 
provincial-level authorities (including provincial DRCs), delegated by NDRC, are the anti-price- WT/TPR/M/264/Add.1 
 Page 111 
 
 
  monopoly enforcement within their administrative te rritories.  The provincial DRCs are allowed to 
delegate investigation to local price superv ision departments one level below themselves. 
 Question:  9. Could China please elaborate further on how c onsistency is ensured between the different 
provincial-level authorities in their interpreta tion and enforcement of the Anti-Monopoly Law? 
 
Answer: To assure a strict and uniform implementation of the Anti-Monopoly Law , National 
Development and Reform Commissi on promulgated the Resolution on Authorization of Anti-price-
fixing Enforcement in December 2008, requiring pr ovincial pricing departments to work under the 
guidance, organization and coordination of the National Development and Reform Commission, 
report in a timely manner the latest progress and other related information about anti-price-fixing 
enforcement, and submit duplicates of documents on case acceptance, investigation and punishments 
and so on to the National Development and Reform Commission. 
 On 29 December 2010, the National Developmen t and Reform Commission promulgated the 
Anti-price-fixing Provisions and the Anti-price- fixing Administrative Enforcement Procedural 
Regulation, giving substantial a nd procedural uniform requirements for the anti-price-fixing 
enforcement.  All provincial pricing department s shall abide by these requirements strictly. 
 
(vii) Intellectual property rights 
 
Pages 91 & 92 (Paras 300 & 301) 
 As described in the Report, the SAIC is building up an e-commerce monitoring system. 
 
Questions:  
 10. Has the above-mentioned system already been completed and put into operation?  
 Answer: Chinese industry and commerce administration authorities are building up a national online 
trade supervision information system that centers  on SAIC's online trade supervision information 
platform and is backed up by online trade supe rvision platforms of provincial industrial and 
commercial bureaus. SAIC’s online trade supervision pl atform is expected to be completed in 2012.  
Currently, 1/3 provincial industria l and commercial bureaus have completed the system building and 
it is expected that all provinces will finish  their system building tasks in 2013.  
 
11. Does the US-China joint programme on combati ng online sales of counterfeit physical products 
also pertain to such sales supported by overseas websites?  
 
Answer: Online sales of counterfeit physical products are very complicated, involving the cases 
where the subjects of law violation and crime and website servers located in China or in overseas regions.  For the former case, the Chinese govern ment will timely clamp down relevant illegal 
websites, punish relevant responsible  persons and bring suspected criminals to justice.  The latter case 
involves more than two administration and jurisdic tion subjects including the Chinese Government, so 
the China is willing to jointly combat illegal and criminal acts by strengthening cross-border 
cooperation and exchanges such as information sharing and joint law enforcement, etc.  
 WT/TPR/M/264/Add.1 
Page 112 
 
 
  IV. TRADE POLICIES BY SECTOR 
(5) Services (iii) Telecommunications and (vii)  Postal and courier services 
 
Pages 145 and 168 (Paras 204 and 322) 
 
12. The Report indicates that China has not yet es tablished universal services funds to support the 
provision of either universal telecommunications or postal services. 
 
Questions:  
 Could China please explain the reasons for the de lays in establishing these universal services funds? 
 
Answer: The universal postal service fund is an import ant system set up by the amended Postal Law. 
The establishment of the fund will proceed followi ng certain legal procedures without delay. 
 China has not yet established universal services funds, but it has never stopped the provision of universal telecommunications services.  13. In the absence of these funds , how have residents been pr ovided with the necessary 
telecommunications and postal services? 
 
Answer: As prescribed in the amended Postal Law, th e state protects the universal postal services in 
China, the State Council, local governments at vari ous levels and other re lated departments should 
take measures to support the postal enterprises in the provision of universal postal services, the State 
will provide subsidies to the postal enterpri ses for provision of universal postal services. 
 Universal telecommunications services are increasingly accessed by urban and rural residents, especially those residents in remote rural areas.  Since 2004, the Chinese Government has carried out 
the program of Providing Telephone Access for All V illages in rural areas.  As of the end of 2011, 
telephone access and Internet broadband access had b een made available for 180,000 remote villages 
and 100,000 villages respectively, and informati on service stations had been constructed in 
27,000 villages and towns, realizing the target of "enabling all villages to access to telephone services 
and all towns to access to Internet services" nationwide.   PART II:  REPORT BY GOVERNMENT OF CHINA (WT/TPR/G/264)  I. INTRODUCTION  
 
Page 5 (Para 2)  
 
The Report states that the Chinese government has pr oactively promoted the change of the trade 
development pattern, continued to im plement the strategy of "going globa l" and paid more attention to 
balance and sustainability in the deve lopment of both trade and investment. 
 
Questions:  
 
14. Please elaborate further on recent trade and invest ment measures introduced in response to the 
changing strategy on trade development?  
15. What is the impact of the above on domestic and  foreign environments as far as trade and 
investment is concerned? 
  WT/TPR/M/264/Add.1 
 Page 113 
 
 
  Answer:  (14-15) In February 2012, 10 ministries and commissions including MOFCOM, NDRC and 
Ministry of Finance jointly issued the Guiding Op inions on Accelerating the Shift of Development 
Mode of Foreign Trade (Shang Mao Fa [2012] No. 48.  In April 2012, MOFCOM issued 
12th Five-year Plan for Foreign Trade Developmen t and the State Council distributed the Guiding 
Opinions of the State Council on Strengthening Im port and Promoting the Balanced Development of 
Foreign Trade (Guo Fa [2012] No. 15).   Mainstream media, government we bsites and other emerging media have extensively publicized and 
reported the abovementioned polic ies and measures, causing strong responses in local regions and 
industries.  The in-depth implementation of the policies and measures will play a positive role in 
helping China change its trade development pa ttern, promote trade balance and make more 
contributions to world economic and trade development.  
 
II. ECONOMIC AND TRADE ENVIRONMENT AND MACROECONOMIC POLICY 
DIRECTION 
(2) IMPROVING RELEVANCE, FLEXIBILITY AND PERSPECTIVENESS OF 
MACROECONOMIC POLICY 
(i) Macroeconomic policy objectives 
 Page 8 (Para 14)  
 
The 12th Five-Year Plan proposes that within the five y ears from 2011 to 2015, China will continue to 
maintain steady and rapid economic developmen t on the basis of significantly improving the 
development quality and efficiency.  Questions:   16. Chapter 51 of the 12th Five-Year Plan aims to "advance the foreign trade structure".  Could 
China please provide details of any related laws and practical measures introduced to further this 
objective? 
 Answer: Refer to the answer of questions 14-15. 
 
17. The Ministry of Commerce (MOFCOM) has published the "12th Five-Year Plan for foreign trade 
development", which places emphasis on changing th e structure of foreign trade and improving 
quality and efficiency.  Could China please elabor ate further on any relevant measures and laws 
brought in to this effect?  
 
Answer: Please refer to Part 5 of the 12th Five-year Plan for Foreign Trade Development and Part 4 
of the Guiding Opinions on Accelerating the Shift of Development Mode of Foreign Trade for major 
supporting measures.  Relevant laws, policies and measure issued and to be issued in the future will 
be made available on relevant government websites.  
 
(3) ACCELERATING THE TRANSFORMATION OF ECONOMIC DEVELOPMENT 
PATTERN 
(ii) Accelerating the development of the service sector 
 
Page 11 (Para 29) 
 The tertiary sector accounted for 43.2% of China’ s GDP in 2010 and 43.1% in 2011. As the Report 
states, in general, contribution to GDP from the tertiary sector is still comparatively low, and 
development of the service sector requires more arduous efforts.  WT/TPR/M/264/Add.1 
Page 114 
 
 
  Questions:  
 18. Why has the tertiary sector's contribution to China's GDP decrea sed in recent years? 
 Answer: According to the statistics of National Bureau of Statistics, the tertiary sector accounted for 
43.1% of China's GDP in 2011 and 43.2% in 2010.  In 2009, this figure is 43.4% and in 2008 it is 41.8%.  So we consider that the tertiary sector 's contribution to China's GDP did not decrease 
significantly in recent years. 
 
19. Would China agree that efforts are needed to a ccelerate liberalization of the services market in 
order to encourage greater participati on by both domestic and foreign investors? 
 
Answer: China always attaches great importance to development of services industry and takes a 
positive position on liberalization of trade in services.  On 24 December 2011, the Chinese 
Government issued the revised Catalogue for Gu idance of Foreign Investment, which has been 
implemented since 30 January 2012.  This revised Catalogue for Guidance of Foreign Investment aims to enlarge the opening-up in services sectors, an d encourages foreign enterprises to invest in the 
modern services industry.  For example, it classifi es the foreign-invested medical institutions and 
financial leasing companies into “permitted” category instead of "restricted" category. 
 
China recognizes that the progressive liberaliza tion of trade in services among WTO Members would 
promote development of international trade in services.  We hope that the DDA negotiations will 
come to a successful conclusion soon.  
III. TRADE AND INVESTMENT DEVELOPMENT AND RELATED POLICIES 
(3) OPTIMIZING THE UTILIZATION OF FOREIGN INVESTMENT THROUGH 
FURTHER OPENING UP  
(iv) Caring for and protecting rights and interests of investors 
 
Page 24 (Para 98) 
 The Chinese Government indicates in the Report that since the last review, it has worked on a series 
of issues that were of interest to investors.  
Question:  
 
20. Could China please provide detailed descriptions of  its legal framework covering: a) protection 
of the property rights of foreign investors, and; b) the temporary entry and stay of foreign investors?  
 
Answer: (1) With regard to protection of the property rights of foreign investors, please refer to 
Article 18 of the Constitution of the People's Rep ublic of China as well as relevant provisions 
specified in the Law of the People's Republic of  China on Chinese-foreign Joint Ventures and the Law 
of the People's Republic of China on Foreign-Capital Enterprises.  At the same time, Article 5 of the 
Law of the People’s Republic of China on Protection of Investment by Compatriots for investors from 
Chinese Taipei, the Provisions of the State Council Concerning the Encouragement of Investments by 
Compatriots from Chinese Taipei and the Detailed Rules for the Implementation of the Law of the 
People’s Republic of China on Pr otection of Investment by Compat riots From Chinese Taipei also 
stipulate explicit provisions on the protection of the property rights of compatriots from Chinese 
Taipei.   (2) With regard to the temporary entry and stay of foreign investors, please refer to the terms and 
clauses concerning the entry and stay procedures and provisions specified in the Law of the People's  WT/TPR/M/264/Add.1 
 Page 115 
 
 
  Republic of China on Control of the Entry a nd Exit of Aliens, the Detailed Rules for the 
Implementation of the Law of the People's Republic  of China on Control of the Entry and Exit of 
Aliens and the Regulations of the People's Republic of China on Entry and Exit Frontier Inspection.   
 
 
COLOMBIA 
 RESUMEN     
 
En el párrafo 7 del resumen de la Secretaría  indica que... En el período examinado hubo pocos 
cambios en las políticas de China en materia de impor taciones y de entrada de inversiones extranjeras  
China hace uso de diversas medidas en frontera no  arancelarias, como las licencias de importación y 
exportación y el comercio de Estado, para "ori entar" la asignación de recursos.  El uso de 
procedimientos de aviso y formulación de observ aciones se está haciendo más general en el proceso 
de redacción de leyes, reglamentos y normas departamentales en materia de comercio, pero, al 
parecer, no toda la información relacionada con el  comercio se pone a dis posición del público.  
 
1. El gobierno chino tiene previsto en un futuro  poner a disposición del público todas sus 
normas relacionadas con el comercio, para cont ribuir con la transparencia en la OMC?   
 Answer:  China understands that its transparency commi tment for WTO accession is to give a period 
after the promulgation of laws, regulations and rule s related to or affecting trade in goods, trade in 
services and trade-related intellect ual property right or foreign exchange control prior to their 
enforcement.  It is not mentioned in China's commitm ent to solicit public opinions for the drafts of the 
laws, regulations or rules to be promulgated.  Nevertheless, in order to advance scientific and 
democratic legislation and improve the quality of legislation, the Chinese Government has always 
made unremitting efforts to improve the transparen cy of legislation, promote solicitation of public 
opinions on legislation drafts and expand public participation.  Sin ce 2008, public opinions have been 
solicited for draft administrative laws a nd regulations which are all published on 
http://www.chinalaw.gov.cn except tho se to be kept secret in line with law.  And public opinions have 
also solicited for draft regulations of various departments on their websites or 
http://www.chinalaw.gov.cn.  All parties including  foreign investors can propose opinions and 
suggestions.  En el párrafo 8 del resumen de la Secretaría señal a que Las subvenciones y otras formas de asistencia 
gubernamental son elementos importantes en la formulación de las políticas comercial e industrial 
chinas.  En 2011 China presentó a la OMC una nueva  notificación de sus subvenciones, en la que se 
enumeran los programas que prestaron asistencia gubernamental a nivel del Gobierno central entre 
2005 y 2008.  Sin embargo, en muchos casos no ha y cifras sobre la magnitud del apoyo prestado, y no 
se dispone de información sobre las subvenciones y otras ayudas gubernamentales de nivel provincial, 
que se cree que son considerables.  
 
2. Puede el gobierno chino proveer información relacionada con la magnit ud de los programas 
de asistencia a nivel central que compleme nte la notificación realizada, correspondiente al 
período 2005-2008?  Puede brindar información sobre los programas de apoyo a nivel de las 
provincias?  Ha pensado el gobierno chino actualizar la notificación de subvenciones 
cubriendo un período más reciente?   
 
Answer:  Use of subsidies and other government assistance is an important feature in trade policies of 
many WTO Members.  Subsidy notification entails  huge amount of work on information gathering 
and analysis and this is particularly a challenge fo r China as a large developing country.  To fulfill its 
notification obligation under the SCM Agreement systematically, China since its WTO accession has 
concentrated its efforts on notifying comprehensively central programs as a first step, and would then WT/TPR/M/264/Add.1 
Page 116 
 
 
  extend its efforts and experiences to cover those at  the sub-central level.  Now that substantial 
progress has been made in fulfilling th e transparency obligation of the subsidies at the central level, 
China will work towards incorporatin g local subsidies in its future notifications.  As to the 2009-2011 
notification, it will not be too difficult if covering only central programs.  However if local programs 
are to be incorporated, it will be a different case.  In any case, China will accelerate its efforts for a 
new notification.  
 
III) POLTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS 
A. MEDIDAS QUE AFECTAN DIRECTAMENTE A LAS IMPORTACIONES  
1. Procedimientos aduaneros, valoración en aduana y normas de origen  
a) Procedimientos aduaneros        
 
El párrafo 5 del informe de la Secretaría indica que… Los importadores pueden solicitar a la 
Administración de Aduanas resoluciones anticipadas por escrito, que son vinculantes.  Constituyen el 
fundamento jurídico de esas resoluciones anticipadas  la Ley de Aduanas y las Medidas provisionales 
sobre la administración de las resoluciones administrativas de la Administración de Aduanas   
3. Para qué temas o procedimientos aduaneros puede solicitarse Resoluciones Anticipadas?    
 
Answer: Article III of "the Interim Measures of the People's Republic of China for the Administration 
of the Administrative Rulings of Customs states th at the administrative rulings of customs cover the 
following areas:  classification of the import and expo rt commodities, determination of the origins of 
import and export goods, application of the measures for prohibiting imports and exports and of the 
licenses, as well as other customs affairs that the GAC decides these measures shall apply to.  Price 
evaluation by the Customs is not within the coverage of administrative rulings. 
 
4. A parte del importador, que otros usuario s aduaneros pueden solicitar Resoluciones 
Anticipadas?  
 
Answer: The Applicant for Customs administrative rulings should be an entity that operates goods 
import and export and has registered in the Customs. 
 
5. Cuáles son los requisitos para su expedición?  
 
Answer: There is no connection between importers appli cation for customs administrative rulings and 
shipment. 
 
v) Comercio de Estado  
 
En el párrafo 44 del informe de la Secretaría indi ca que… En virtud de la Ley de Comercio Exterior, 
determinados productos pueden ser objeto de comerc io de Estado, entre otras cosas para asegurar la 
estabilidad del suministro interno, estabilizar los prec ios, salvaguardar la inocuidad de los alimentos, 
y proteger el medio ambiente y los recursos agotable s. (Nota al pie. La última notificación de China a 
la OMC sobre la lista de empresas come rciales del Estado se realizó en 2003) 
 
6. Podría el gobierno chino indicar si tiene aún la obligación de notificar a la OMC en forma 
periódica su listado de empresas comerciales del Estado?  En caso afirmativo el gobierno 
chino podría indicar cuando tiene previsto hacer la próxima notificación del listado de 
empresas comerciales del estado?   
Answer:  The state trading regime of China, including  the products covered and the STR enterprises, 
did not have significant changes except that a coup le of products were no longer subject to state 
trading administration.  Besides, for a few products s ubject to state trading, some statistics required in  WT/TPR/M/264/Add.1 
 Page 117 
 
 
  the notification are not produced officially in China.  In view of these, China did not submit its state 
trading notification.  That said, if members expect China to submit the notification despite of the few 
changes, China will try to submit the notification as soon as possible. 
 
vii) Normas y otras prescripciones técnicas   
- Normas y reglamentos técnicos  
 
En el resumen inicial, párrafo 9, la Secretaría señala que En los Comités de OTC y MSF de la OMC, 
algunos Miembros expresaron su preocupación respecto de medidas OTC adoptadas y/o impuestas 
por China en relación con distintos productos, desde el algodón y los tex tiles hasta los faros y 
dispositivos de señalización luminosa de motocicletas, y respecto de MSF propuestas y/o impuestas, ente ellas normas de higiene para los licores destila dos, restricciones a la importación de determinados 
productos, y pruebas de cuarentena, as como respecto de las prácticas de notificación.  
 
7. Nos gustaría que el Gobierno Chino brindara u na mayor información a la registrada en las 
notificaciones realizadas a la OMC y citada en el  anexo de este documento, con el fin de 
entender mejor el sustento científico para aplicar dichas medidas.  As mismo, el listado de los 
productos a lo que se les aplicaron las restricciones de importación?   
 
Answer:  China notification procedure to WTO is cons istent with the WTO rules, and China will 
make effort to improve its notification work. 
 
B. M
EDIDAS QUE AFECTAN DIRECTAMENTE A LAS EXPORTACIONES      
ii) Subvenciones a la exportación  
En el párrafo 136 del informe de la Secretara indica que Las autoridades afirman que China no 
concede subvenciones a la exportación.  En oct ubre de 2011 China notificó a la OMC sus programas 
de subvenciones correspondientes a 2004-2008.   
8. El gobierno chino tiene previsto en un futuro  poner a disposición del público todas sus 
normas relacionadas con el comercio?  
 
Answer: Refer to the answer of question 1. 
 
9. Es posible que por tratarse de la normativ a comercial, ésta sea publicada en inglés?   
 Answer:  The Legislative Affairs Office of the Stat e Council issues a Chinese-English bilingual Laws 
and Regulations of the People's Republic of China each year, which is also published to the public. 
 
IV. POLÍTICAS COMERCIALES, POR SECTORES     
1) Agricultura 
ii) Políticas agrícolas  
En el párrafo 10 de la página 118, del informe de  la Secretara indica que En el Duodécimo Plan 
Quinquenal (2011-2015) se reafirman los compromisos que figuran en planes anteriores para crear un nuevo campo socialista fortaleciendo el apoyo a los agricultores, dándoles más beneficios y 
promoviendo la modernización, con el  fin de mejorar sus niveles de vi da.  El objetivo principal de la 
política nacional es salvaguardar la seguridad alimen taria mediante el aumento de la capacidad de 
producción y la mejora de la competitividad.  En el  plan se establecen objetivos más específicos, que 
incluyen un aumento de 50 millones de toneladas de  la capacidad de producci ón de granos (definidos 
como arroz, trigo, maíz y habas (porotos, frijoles, fréjoles) de soja (soya)).  Este aumento ha de 
lograrse mediante mayores inversiones y pagos en  las zonas productoras de granos, mejorando al 
mismo tiempo las condiciones de la producción agrícola .  En el plan también se resalta la necesidad WT/TPR/M/264/Add.1 
Page 118 
 
 
  de aumentar la mecanización agrícola y de desarro llar y adoptar biotecnología.  Figuran en el plan 
otras medidas, como el aumento de los precios de  compra mínimos de los principales granos y la 
mejora de la compra y el almacenamiento pr ovisionales de productos agrícolas a granel.  
 
10. Podría China dar una explicación de los facto res y metodología utilizados para determinar el 
aumento de los precios mínimos de compra;  p eríodo en el que se determina el aumento y a 
qué granos aplica?  
 
Answer:  Currently, China adopts the minimum purchase pr ice policy on rice and wheat in the main 
producing areas.  The minimum purchase price of rice and wheat is reasonably determined based on such factors as the farmers farming cost, supply a nd demand relationship with respect to grain, the 
change in the urban and rural residents income, the price of commodities and macro-economic trends. 
The minimum purchase price will rise when the grain production cost is increased. 
 
11. Nos gustaría conocer en forma detallada cómo funciona la directriz del Gobierno Chino para 
mejorar la compra y el almacenamiento provis ional de productos agrícola a granel?  A que 
productos aplica? 
 
Answer:  The temporary purchase and storage policy is an action taken by the designated enforcement 
body (normally Sinograin) to purchase the grain deliv ered and sold by the farmers at the specified 
stabilization price when the market price is lo wer than the temporary purchase and storage price 
prescribed by the State during the centralized supply period of fresh grain in order to protect the farmers interests and promote the stable production of grain.  The temporary purchase and storage 
policy is generally adopted with respect to such  non-grain-ration varieties as maize and such oil 
varieties as soybean and rape seed. 
 
a)  Medidas relativas a las importaciones      
 
En el párrafo 17 de la página 120, la Secretaría  señala que… En consonancia con los compromisos 
asumidos con motivo de su adhesión, desde 2006 China no aplica contingentes arancelarios al aceite 
de soja (soya), al aceite de palma ni al aceite  de colza.  No obstante, sigue aplicando siete 
contingentes arancelarios que abarcan 39 líneas aran celarias correspondientes al trigo, el maíz, el 
arroz, el azúcar, la lana y el algodón.  
12. Podría China proporcionar in formación acerca de la cuanta actual de los contingentes 
para dichos productos y cuál ha sido su utilización?   
 
Answer: The China's WTO Accession Protocol has explic itly specified the name, the annual tariff 
rate quota, the tariff rate and th e similar matters of the agricultu ral products subject to import duty 
quota in China.  Since China's WTO accession, Chin a has been strictly performing the relevant 
commitments and timely notify WTO of the relevant information. 
 
En el párrafo 18 de la página 120, del informe de  la Secretara indica que… Según las autoridades, no 
ha habido cambios en la administración de continge ntes arancelarios desde la última notificación que 
presentó China al Comité de Agricultura en 200 3.  De conformidad con esa notificación, los 
solicitantes deban cumplir determinados criterios básico s, entre ellos registrarse en la Administración 
de Industria y Comercio y superar un examen anual de la empresa llevado a cabo por la 
Administración de Industria y Comercio y las autoridades de inspección y cuarentena.  A continuación, se asignaban los contingentes se gún los volúmenes solicitados, las importaciones 
previas o la capacidad de producción, o por el orden de presentación de las solicitudes.  Las empresas comerciales del Estado siguen teniendo un acceso pre dominante a los contingentes arancelarios, pues 
se les asignó el 90 por ciento del contingente correspondiente al trigo, el 60 por ciento del  WT/TPR/M/264/Add.1 
 Page 119 
 
 
  correspondiente al maíz, el 50 por ciento del co rrespondiente al arroz, el 70 por ciento del 
correspondiente al azúcar y el 33 por ciento del correspondiente al algodón.   
13. Podría China indicar en qué consiste el examen anual realizado por la Administración de 
Industria y Comercio a las empresas solicitantes en la asignación de un cupo y cuál es su 
finalidad?   
 
Answer:  Article 13 of the Measures for the Annual In spection of Enterprises defines the inspection 
content to enterprises. 
 
Annual inspection to enterprises is one of the im portant legal functions of the administrative 
department for industry and commerce.  It is the important method to conduct follow-up supervision 
after administrative permitting and learn the law- abiding and operation condition of enterprises.  
Moreover, it is the basic work for administrative department for industry and commerce to strengthen 
market supervision, maintain fair competition, pr omote economic and social development, and play a 
full functional role. 
 
14. El resultado de este examen cómo se aplica a la s empresas solicitantes diferentes a las del 
Estado?  
 Answer:  No difference.  Both state-owned trad ing enterprises and non-state-owned trading 
enterprises apply for import duty quota based on the pub lished conditions and procedures.  Enterprises 
not passing the annual inspection may not apply for the quota of the next year.  
b) Medidas relativas a las exportaciones 
 
En el párrafo 22 del informe de la Secretaría i ndica que Las exportaciones de arroz, maíz, algodón y 
tabaco se realizan mediante empresas comerciales del Estado y, al igual que las de otros granos, están sujetas a contingentes de exportación.     
15. Agradecemos al Gobierno Chino brindar mayo r información sobre el funcionamiento y 
reglamentación de estas empresas?  
 
Answer: The state trading regime of China, including the products covered and the STR enterprises, 
did not have significant changes except that a coup le of products were no longer subject to state 
trading administration.  Besides, for a few products s ubject to state trading, some statistics required in 
the notification are not produced officially in China.  In view of these, China did not submit its state 
trading notification.  That said, if members expect China to submit the notification despite of the few 
changes, China will try to submit the notification as soon as possible. 
 
16. Cuáles son los otros cereales cobijados por este régimen? 
 Answer:  According to China's WTO Accession Protocol, th e imports of maize, rice, cotton and other 
similar agricultural products is subject to state trading.  Since China's WTO accession, China has 
always been managing the relevant agricultural prod ucts in strict accordance with the commitments 
for WTO accession and the relevant laws and regulations. 
 
c) Ayuda interna    
Pagos directos  
 
En el párrafo 23 de la página 121, el informe de la Secretaría señala que… La política de China en 
materia de pagos directos a los productores agríco las no ha cambiado desde el último examen de sus 
políticas comerciales.  WT/TPR/M/264/Add.1 
Page 120 
 
 
   
Según la notificación presentada al Comité de Agri cultura de la OMC, esta política se basa en la 
superficie de tierra contratada por  la unidad familiar rural y está desconectada de la producción y los 
precios.  
 Actualmente los pagos directos se realizan en casi todo el medio rural, aunque las autoridades locales 
tienen la responsabilidad de decidir qué zonas de su jurisdicción pueden recibir pagos;  el nivel de las 
subvenciones también puede variar según las localidades.   La cuanta total prevista en el marco del 
programa de pagos directos fue de 15.100 millones de yuan anuales para el período 2007-2010.   
 
17. Podría China explicar cómo garantiza que est os pagos basados en la superficie, están 
desconectados de la producción y los precios?  
 
Answer:  Direct payment is made to the farmers mainly  based on the area of the farmers contracted 
lands which is determined at the execution time of the contracting agreement and remains as the same 
within the contractual term (30 years). Direct payment is not subject to the requirements on actual production volume and price. 
 
Programas de seguros      
 
En el párrafo 24 del informe de la Secretaría señala que… En respuesta a la muy escasa cobertura de 
los seguros para la agricultura en China y al riesgo elevado de sequías o inundaciones, en 2007 se 
puso en marcha un programa piloto de seguros con cobertura geográfica limitada a seis provincias.  
Para finales de2010 su ámbito se haba ampliado a 28 provincias.  Las primas de los seguros están 
subvencionadas por el Gobierno central y los gobi ernos locales y las unidades familiares rurales 
pagan la parte restante, que oscila entre el 20 y el 30 por ciento.    
 
18. Qué estrategias o medidas forman de este pr ograma además de la presupuestal para lograr 
su masificación?     
 
Answer:  For the purpose of further improving agricultur al insurance, the Ministry of Finance expand 
the fiscal subsidy for agricultural insurance premium at the central level to the whole country in 2012 
and each region can roll out at its own discretion and apply for the subsidy as s tipulated.  In addition, 
China will also further marketize the agricultural in surance industry, actively guide farmers to procure 
insurance and better promote the development of agri cultural insurance by some methods as studying 
the legislations on agricultural insurance, im proving innovation in products and services and 
enhancing the promotion efficiency. 
 
Sostenimiento de los precios internos 
 
En el párrafo 33 del informe de la Secretaría  indica que… Además del Programa de precios de 
compra mínimos, el Estado adopta otras medidas para  ajustar la oferta y la demanda de determinados 
productos agrícolas, tales como la compra y almacen amiento ad hoc y la liberación de existencias de 
remolacha azucarera, habas (porotos, frijoles, fréjoles) de soja (soya), maíz, colza y algodón.  Los principales distribuidores de granos son las empr esas comerciales del Estado, como Sinograin, que 
compran a los productores y venden a las empresas de  transformación en subastas semanales.  Con el 
fin de reducir la demanda y los precios de los cereales, en noviembre de 2010 el Estado decidió 
restringir la participación en las subastas a los mo lineros, los fabricantes de  piensos y los productores 
de ganado.  Según las autoridades, las compras y l as ventas de las reservas nacionales de granos que 
lleva a cabo la Administración Estatal de Cereales se realizan a precios de mercado.   
19. Podría el Gobierno Chino explicar cómo se l ogra garantiza que esta mecanismo se realice a 
precios de mercado?   WT/TPR/M/264/Add.1 
 Page 121 
 
 
   
Answer:  China is still in coordination with relevant agencies to provide response to this question. 
 d) Niveles de ayuda      
En el párrafo 38 del informe de la Secretaría se ñala que… La notificación más reciente sobre ayuda 
interna fue presentada al Comité de Agricultura en  octubre de 2011 y corresponde a los años civiles 
2005-2008.  Junto con notificaciones anteriores, esta notificación muestra que la ayuda se ha 
incrementado de manera significativa en los últimos  10 años, tanto en el compartimento verde como 
en el ámbar.  En el compartimento verde la ay uda fue de 593.000 millones de yuan en 2008 y en el 
compartimento ámbar, de 89.000 millones de yuan (incluyendo la ayuda de minimis y restando la 
ayuda por productos específicos negativa).  
20. Por lo anterior, el Gobierno Colombiano invita  a las autoridades chinas a actualizar sus 
notificaciones sobre ayuda interna en el menor tie mpo posible.  Es importante, no olvidar que 
el mecanismo de notificaciones es una herrami enta para mejorar la transparencia dado que 
permite conocer los programas y medidas  que aplican los pases Miembros.   
 
Answer: So far, China has notified WTO of the agricu ltural domestic support data by the end of 
2008.  China is carefully preparing the national ag ricultural domestic support data for the years after 
2008 and will submit the notifications after the rele vant data has been collected and consolidated. 
 
C. PESCA
      
i) El sector pesquero en China      
 En el párrafo 49 del informe de la Secretaría señal a que… La FAO no dispone de datos sobre el valor 
de la pesca de captura.  En términos de cantidad, se captura una amplia variedad de especies, entre 
ellas peces sables, peces globo, jureles, camar ones y langostinos, calamares y moluscos.  Según la 
FAO, en 2002 haba en China 220.000 embarcacion es, y estaba previsto reducir su número a 
192.000 para 2010.  Los aparejos de pesca más utiliza dos eran las redes de arrastre, aunque también 
se emplean redes de enmalle, redes estacionarias, sed ales y anzuelos, as como redes cerqueras.  Según 
informes, en 2005 y en 2010 haba en China 90 em presas dedicadas a la pesca de altura, con 
1.700 embarcaciones faenando en todo el mundo.  
21. Agradecemos al Gobierno Chino confirma r si están reduciendo el número de sus 
embarcaciones pesqueras y detallar las mediadas adoptadas para logra tal fin.  
 
Answer: In November 2003, the Ministry of Agriculture laid down the "Opinions on the 
Implementation of Marine Fishing Vessel Re duction System from 2003 to 2010".  There are 
three specific measures.  First, it requires the coastal local governments to make plans on the 
reduction of the number of fishing vessels and the power in accordance with the "dual control" 
indicators issued by the state, to strengthen the administration in fishing vessel building approval, 
inspection, registration, licensing and other aspects, and to implement the "fishing vessel inspection regulations" and fishing vessel decommissioning system  strictly.  Second, it requires the coastal local 
governments to implement the regulations on fishing li cense issuers and is sue fishing licen ses in strict 
accordance with the "regulation on the administration of  fishing license".  Third, it requires the coastal 
local governments to vigorously promote the process of fishermen job transfer.  At present, thanks to 
the efforts of the central government and local govern ments at different levels, the number of Chinese 
marine fishing vessels is reduced gradually.  WT/TPR/M/264/Add.1 
Page 122 
 
 
  COSTA RICA 
 
PARTE I:  PREGUNTAS EN RELACIÓN CON EL INFORME DE LA SECRETARÍA  
 
Página 21 (párrafo 38)  
 
El 1 de enero de 2008, China eliminó el trato preferencial de los proyectos de IED por lo que respecta al impuesto sobre la renta de las sociedades, con la salvedad de que, en ciertos casos, se aplica el 
principio de anterioridad a los incentivos dur ante un período de transición de cinco años. 
 
Pregunta: 
 1. Podría China especificar cuáles son aquellos ca sos en los que se aplica el principio de 
anterioridad, en cuanto a la ap licación del trato preferencial del impuesto de la renta?  
 Answer: The State Council issued the Circular of the State Council on the Implementation of the 
Transitional Preferential Policies on Enterprise Income Tax (Guo Fa [2007] No. 39) upon the implementation of the Enterprise Income Tax La w, according to which enterprises enjoying the 
preferential policies with regard to enterprise in come tax under the former tax laws, administrative 
regulations and documents with the effects of ad ministrative regulations shall be subject to a 
transition under the following measures:  Enterprises which enjoy the preferential policies of low tax rates in the past shall be gradually 
transited to be paying the tax at the statutory rate within 5 years from 1 January 2008.  
Enterprises which enjoy such preferential policies of  tax reduction and exemption with the fixed term 
as 2-year exemption and 3-year half deduction and 5- year exemption and 5-year half deduction in the 
past are entitled to the original preferential polic ies based on the original rules and the original 
preferential years after the implementation of the new tax law on 1 January 2008 except that the 
preferential term shall begin from 2008 if the en terprises have not actually enjoyed the original 
preferential policies due to the failure to make profit. 
 In addition, Guo Fa [2007] No. 39 has also explicitly  specified the enterprise income tax preferential 
policies subject to the transitional period.  Página 22 (párrafo 39) 
 
Desde el 1 de enero de 2011 se "permite" a los invers ores extranjeros invertir en servicios de atención 
de salud en China sobre una base experimental;  anteriormente, estos servicios figuraban en la categoría "restringida".  Preguntas:    2. Podría China explicar con más deta lle qué significa la inversión sobre una base 
experimental?   
Answer: In China, many service sector s has been undergoing gradual liberalization on pilot-project 
basis.  The meaning of pilot-project is that, on th e premise of not violating related national laws and 
regulations, government permits foreign busin esses investment to establish certain kind of 
foreign-invested enterprises within the specifi c regions only, with the aim of accumulating 
experience, etc.  As regard to the issue of forei gn investors qualifications, there already exist explicit 
laws and regulations on the utilization of foreign investment for relevant medical institutions in China.   
  WT/TPR/M/264/Add.1 
 Page 123 
 
 
  According to CEPA and ECFA , since 1 January 2011, service provides from the Hong Kong and 
Macao Special Administrative Regions have been pe rmitted to establish subsidiary hospitals in the 
provinces and municipalities of Shanghai, Fujian,  Guangdong, Hainan and Chongqing.  Service 
provided from Chinese-Taipei also have been perm itted to establish subsidiary hospitals according to 
rules in the provinces and municipalities of Shangh ai, Jiangsu, Fujian, Gu angdong and Hainan on a 
pilot-project basis.  Since 1 April 2012, pilot pr oject of the Hong Kong and Macao SARs to establish 
subsidiary hospitals in mainland China will be extended to all provincial capitals and municipalities. 
 3. Cuáles son las diferencias con respecto a la inversión sobre una base no experimental? 
 
Answer: According to the provisions with regard to service providers from the Hong Kong and 
Macao Special Administrative Regions and Chinese Ta ipei establishing subsidiary hospitals in CEPA 
and ECFA, Ministry of Health and Ministry of Commerce of the People's Republic of China formulated the Provisional Administrative Measu res on Hong Kong and Ma cao Service Providers 
Establishing Subsidiary Hospitals in Mainland China, and Provisional Administrative Measures on 
Chinese Taipei Service Providers Establishing Subsid iary Hospitals in Mainland China, which allows 
services providers from these regions apply to establish subsidiary hospitals accordingly. 
 
4. Qué restricciones contiene par a los inversionistas extranjeros? 
 Answer: Except for the Hong Kong, Macao and Chinese Ta ipei Service Providers who are allowed to 
establish subsidiary hospitals in specific cities in  mainland China on the basis of CEPA and ECFA, 
foreign service suppliers from other countries and re gions of the world are only permitted to establish 
joint venture and cooperative hospitals or clinics wi th Chinese partners proportion of share or equity 
no less than 30%. 
 
Página 22 (párrafo 40)  
 
Las autoridades señalaron que el 30 de enero de 2012 también se eliminó el límite máximo a la 
participación extranjera en el capital con respecto a 11 subsectores de las categorías "alentada" y 
"restringida". 
 
Preguntas: 
 
5. En total, en cuántos sectores y subsectores exi ste aún un límite máximo de participación de 
capital extranjero?  
 6. Qué planes tiene China para eliminar el límite máximo a la participación extranjera en estos 
sectores y subsectores?  
Answer:  (5-6) The Catalog of guidance of foreign inv estment industry enforced on 30 January 2012 
and relevant laws and regul ations have clearly stipulated the restriction to ratio of foreign shares, and 
foreign investors can obtain such information from open channels.  In future, we will timely amend 
the Catalog by connection of the economic devel opment condition of China and China's commitment 
made while entering WTO to steadily pr omote openness of relevant industries. 
 Página 23 (párrafo 43)  
 
Con miras a aclarar el procedimiento y el alcan ce de los exámenes antim onopolio y los exámenes de 
seguridad nacional de las fusiones y adquisiciones con IED, en septiembre de 2011 entraron en vigor 
medidas detalladas para los exámenes de segurid ad nacional de las fusiones y adquisiciones por 
extranjeros, as como una orientación para la eval uación del impacto en lo s exámenes antimonopolio.  
 WT/TPR/M/264/Add.1 
Page 124 
 
 
  Preguntas:   
 7. Podría China explicar qué implicaciones tienen las medidas aplicadas a los exámenes de 
seguridad nacional de las fusiones y adquisiciones por extranjeros?  
 
Answer: In February 2011, the General Office of th e State Council of China has promulgated the 
Circular on Establishment of the State Security Review System Concerning Merger and Acquisition 
of Domestic Enterprise by Foreign Investors, to  formally establish uniform and standard security 
review system for acquisition by foreign investors, and to clearly stipulate the scope, content, work 
mechanism and procedure of the security review .  The Ministry of Commerce of China also 
promulgated detailed implem entation regulations to further expl ain relevant procedural matters on 
state security review for merger and acquisition by foreign investors.  According to relevant 
regulations, a foreign investor is subject to the st ate security review for its merger or acquisition of 
domestic enterprises in the following situations:  i) the target engages in military or military support 
business enterprises which locate near important and sensitive military installations, or other business 
which is related to national defense;  or 2) the ta rgets business is related to the important agricultural 
products, important energy and resources, important infrastructure, important transportation service, 
key technology, or significant equipment manufacturing, and after the merger or acquisition the foreign investor will have the control right of the target. 
 
Establishment of state security review for merger and acquisition by foreign investors perfects China's 
legal system in the fields of foreign investors, meets the objective requirements of further raising the 
level of opening up, and complies with not only intern ational practices but the constant strategy of 
mutual benefit and opening up of China.  8. Existen diferencias con respecto a las fusiones y adquisiciones por nacionales?  
 
Answer:  The state security review for merger and acqui sition by foreign investors does not apply to 
domestic merger and acquisition.  Página 26 (párrafo 52) 
 
Además, las empresas con inversión extranjera (e xcepto las del sector financiero) que deseen 
establecerse en China deben presentar simultá neamente su solicitud al MOFCOM o a los 
departamentos de comercio locales para obten er un certificado de aprobación de empresa con 
inversión extranjera.  Esto permite a las empres as con inversión extranjera llevar a cabo todos los 
demás procedimientos necesarios para desempeñar su s actividades, como el registro de la empresa. 
 
Pregunta:  
 9. Qué criterios emplea China para excluir a la s empresas del sector financiero de obtener un 
certificado de aprobación de em presa con inversión extranjera? 
 
Answer: There is no exception for financial industries setting up from obtaining investing approval in 
China.  When the financial industries set up in China, the approval procedure is implemented by 
specific department, such as CBRC, CSRC and CIRC, but not MOFCOM. 
 
Página 29 (párrafo 7) 
 
La Administración de Aduanas también ha promovi do la cooperación con las autoridades aduaneras 
de los pases con los que China ha concluido acuerdos de libre comercio (ALC), principalmente en el 
establecimiento de una red electrónica en relación co n los certificados de origen preferenciales y de  WT/TPR/M/264/Add.1 
 Page 125 
 
 
  un sistema de intercambio de datos aduaneros con l as aduanas europeas y de la Federación de Rusia, 
respectivamente.   Preguntas:   10. En qué consiste la red electrónica en relac ión con los certificados de origen preferenciales?  
 
Answer: Currently, China Customs exchanges electronic da ta with regard to CEPA certificates of 
origin and ECFA certificate of origin with the Hong Kong and Macao Special Administrative 
Regions, Chinese Taipei, and other relevant departments.   Only the contents of the certificate of origin 
are required to be electronized, the manual or electr onic signature of the exporter is not required.  
 
11. Qué tipo de información se puede compartir por este medio que ayude en la aplicación del 
control aduanero?   
 Answer: We need more time to identify what type of information can be shared in custom 
surveillance.  
Página 31 (párrafo 18) 
 
En virtud del Reglamento sobre aranceles de impor tación y exportación, la Comisión de Aranceles 
Aduaneros del Consejo de Estado está facultada pa ra establecer tipos arancelarios "provisionales", 
que se aplican a ciertos productos durante un pe ríodo determinado (normalmente de un año). 
 
Preguntas: 
 
12. Podría China indicar cuáles son los produc tos sujetos a la aplicación de aranceles 
provisionales?   
 
Answer: The list of the products subject to interim tariff rates in 2012 is specified in the Notice of the 
Customs Tariff Commission of the State Council on the Tariff Execution Plan 2012 (Shui Wei Hui 
[2011] No. 27) which is available on the offi cial website of the Ministry of Finance 
(www.mof.gov.cn).  
13. Qué criterio se utiliza para elegir los producto s sujetos a la aplicación de estos aranceles? 
 Answer: The Customs Tariff Commission of the Stat e Council determines the goods for which 
interim tariff rate applies and the corresponding ta riff rate and duration and the determination is 
mainly based on national economic development as well as production, consumption, import and 
export of relevant goods.  Página 39 (párrafo 37) 
 
La Ley de Comercio Exterior (ar tículo 18) permite a la Autoridad competente de Comercio Exterior 
del Consejo de Estado -que es el MOFCOM de manera independiente o conjuntamente con otros 
organismos competentes del Consejo de Estado-  dictar, previa aprobación de este último, 
prohibiciones o restricciones temporales a las impo rtaciones de determinados productos.  Estas 
prohibiciones temporales parecen obedecer principalm ente a preocupaciones sanitarias y fitosanitarias 
o a decisiones adoptadas por organizaciones internacionales.   WT/TPR/M/264/Add.1 
Page 126 
 
 
  Preguntas:   
 14. Podría China aportar ejemplos de prohibi ciones a la importación adoptadas entre 2009-2011 
que respondan a decisiones adoptadas por organizacion es internacionales y su debida justificación?   
 
Answer: China is still in coordination with relevant ag encies to provide response to this question. 
 
15. En el 2011, cuántos y cu áles productos estuvieron sujetos a prohibiciones o restricciones  
temporales?   
 
Answer: 14-15 
 
Measures of the Ministry of Agriculture Concerning Import Prohibition in Business Scope 
2009 
Import ban of live pigs and pork products from:  Mexico and a number of US states (26 and 29April 2009), and Canada (Alberta) 
(3 May 2009) (A(H1N1) Flu related)  
Import ban of poultry and poultry products (HS0105; 0207) from:  Spain, France (Deux-Sevres), and the United Kingdom (Hampshire )   
Import ban of poultry and poultry products  (Low pathogenic avian influenza) from the United Kingdom (Hampshire) 
Import ban of poultry and poultry products (Newcastle disease) from Spain 
Import ban of poultry and poultry products (Low pathoge nic avian influenza) from France (Deux-Sevres) 
2010 
Import ban on poultry products (HS0207) from Pennsylvania and Texas (USA ) (15January2010), and Bhutan (12 March 2010), due to 
low pathogenic avian influenza  
Import ban of poultry and poultry products (Low pat hogenic avian influenza) from Canada (Manitoba) 
2011 
Import ban on poultry products (HS 0207) from Morbihan - France (12 January 2011), and Gotlands - Sweden (23 February 2011), du e to 
Newcastle disease   
Import ban on artiodactyl and artiodactyl products from Bulgaria (1 February 2011), and the Democr atic People's Republic of Kor ea 
(23 February 2011), due to foot and mouth disease  
Import ban of poultry and poultry products (H1N1 subtype highly pathogenic avian influenza) from Iran (9 November 2011) 
Import ban of small ruminant animals such as sheep and goat and pr oducts (Peste des petits ruminants) from Israel (9 November 2 011) 
Import ban of plant seeds as the main host of rape stem canker pathogen (Rape stem canker pathoge n) from Germany and New Zealan d 
(21 December 2011) 
 
Página 56 (párrafo 94) 
 
De conformidad con el Reglamento sobre certificación  y acreditación, los productos enumerados en el 
Catálogo para la certificación obl igatoria de productos no se pueden vender ni importar en China a 
menos que tengan la Certificación Obligatoria para China (CCC) y lleven la marca CCC.   
 
Preguntas:  
 16. Cuánto dura el proceso par a obtener una certificación CCC? 
 
17. En qué costos monetarios se incurre para la obtención de la certificación CCC? 
 
Answer: (16-17) According to the Regulations on Certif ication and Accreditation of PRC, products 
listed in the CCC Catalogue cannot be marketed, imported or used in other business activities if 
without CCC certificates. 
 
Rules on Management of Compulsory Certification stipulates that generally speaking, CCC Certification is issued within 90 days since acceptance.  In addition, 3C-related fees are much less than that of developed economies.   WT/TPR/M/264/Add.1 
 Page 127 
 
 
   
Página 59 (párrafo 103) 
 Después de que las dos partes hayan firmado un  protocolo de inspección y cuarentena, pueden 
comenzar las exportaciones de los productores de ese país o región inscritos en el registro de la AQSIQ.   
 
Preguntas:   
 
18. En promedio cuánto tiempo requiere la negociación de protocolos para la importación de 
productos de origen animal?  
Answer: It dependents on the risk assessment made and also the cooperation of the exporting country. 
 19. Cuáles son los productos que no requieren del establecimiento de un protocolo sanitario o 
fitosanitario?  Podría brindar Chi na una lista o ejemplos al respecto?   
 
Answer: Please refer to The Catalogue of Entry-Ex it Commodities Inspected and Quarantined by 
Entry-Exit Inspection and Quarantine Organs 
 
Página 60 (párrafo 106) 
 
Para hacer frente a los problemas derivados de la fa lsificación y alteración de certificados sanitarios y 
fitosanitarios y facilitar el comercio de productos agropecuarios y alimenticios, la AQSIQ introdujo 
en 2010 el sistema de inspección y cuarentena E-cert  de China (China E-cert).  En el marco de este 
sistema, se exige a todos los exportadores que se insc riban en el registro en línea de la AQSIQ y que 
obtengan la autorización de este organismo a través de  la embajada de su país en China.  Los 
certificados sanitarios y fitosanitarios de importaci ón para cada envío deben quedar registrados en el 
sistema.  Preguntas:   
 
20. Respecto a las materias primas para la el aboración de alimentos, Requiere China de la 
presentación de un Certificado de Libre Venta ex pedido por la autoridad competente del país 
exportador? 
 Answer: Please refer to AQSIQ official website http://www.aqsiq.gov.cn/ 
 
21. Para productos procesados de origen veget al, Solicita China el certificado fitosanitario?  
Para qué productos?   
 
Answer: Please refer to AQSIQ official website http://www.aqsiq.gov.cn/ 
 
22. Únicamente las empresas requieren del reg istro en la AQSIQ o también el producto a 
importar debe estar registrado?  
Answer: Please refer to AQSIQ official website http://www.aqsiq.gov.cn/ 
 
Página 69 (párrafo 148) 
 
China mantiene tanto contingentes globales como contingentes para destinos específicos.  Los 
contingentes para destinos específi cos se aplican a las exportaciones de animales vivos de las especies WT/TPR/M/264/Add.1 
Page 128 
 
 
  bovina y porcina y aves de corral destinadas a las RAE de Hong Kong y Macao.  Una vez que el 
exportador obtiene un contingente, el MOFC OM expide una licencia de exportación.  
 Pregunta:    23. En el 2011, qué porcentaje de los contingentes de exportación se asignó a empresas estatales 
y qué porcentaje a empresas privadas?  
Answer: Quota management to fresh products for the Hong Kong or Macao Special Administrative 
Region is not against state-owned or private enterpri se.  There is no quota ratio.  The quota is adjusted 
in accordance with the requirements  of the Hong Kong or Macao SAR. 
 
Página 69 (párrafo 148) 
 China mantiene el comercio de Estado en el caso de algunas exportaciones, con miras a:  garantizar 
un suministro nacional estable;  evitar las grandes fluctuaciones de precios de los mercados internacionales;  salvaguardar la inocuidad de los alimentos;  y proteger los recursos naturales no 
renovables o no reciclables y el medio ambiente.   Preguntas:    24. En China, las regulaciones y el monitoreo  sanitario y fitosanitario se diferencian entre 
empresas estatales y empresas privadas?   
Answer: No difference. 
 
25. Qué diferencia existe entre una empresa est atal y una empresa privada para justificar que 
algunas exportaciones se mantienen bajo el Estado para salvaguardar la inocuidad de los alimentos?   
 
Answer: State trading enterprises refer to those enterp rise that have acquired the qualification to 
engage in import and/or export trade of produc ts listed in Annex 2A of China's WTO Accession 
Protocol.  They are not necessarily state-owned ente rprises.  Some of the state-trading enterprises are 
private enterprises or enterprises with foreign investme nt.  China's state-trading regime is the result of 
its WTO accession negotiations, and therefore the lega l basis is China's Accession Protocol, including 
Annex 2 of the Protocol. 
 
Página 122 (párrafo 31) 
 
La Comisión Nacional de Desarrollo y Reforma fija cada año los precios de compra mínimos del arroz y el trigo.  Si bien los precios han ido aumentando cada año, el precio de compra del arroz ha sido generalmente inferior al precio del mercado mundial. 
 
Pregunta:   
 26. Existe algún mecanismo de compensaci ón dirigido a los productores cuando los precios 
fijados a sus productos son inferiores a los precios internacionales? 
 
Answer: The main purpose of the implementation of the minimum purchase price policy for rice and 
wheat is to ensure market supply, and to protect  the interests of farmer s.  The minimum purchase 
price of rice and wheat, is determined in a reasonable way, based mainly on the cost of farmers production, and grain supply and demand relations, changes in urba n and rural incomes, the price 
level and the macroeconomic situa tion and other factors.  When China's rice and wheat prices are  WT/TPR/M/264/Add.1 
 Page 129 
 
 
  lower than that in the international market, ther e is no such thing of compensation mechanism for 
producers.  Página 124 (párrafo 38) 
 
La notificación más reciente sobre ayuda interna fue presentada al Comité de Agricultura en octubre 
de 2011 corresponde a los años civiles 2005-2008.  Pregunta:    27. Se debe notificar al Comité de Agricultura de ntro de los primeros 90 das del año el nivel de 
ayuda aplicado a la agricultura en el año inmedi ato anterior.  Cuándo se notificarán los niveles de 
ayuda para los años 2009 al 2011?  
Answer: We have notified to WTO agricultural domestic  support data up to 2008.  We are making 
careful preparations on agricultural domestic support data after 2008, which will be actively informed 
after the relevant data summary is completed.  
Página 124 (párrafo 40) 
 
La ayuda del compartimento ámbar notificada a la OMC también ha aumentado en años recientes al haberse incrementado los desembolsos presupuest arios para semillas y variedades de cultivos 
mejoradas, subvenciones a los transportes y su bvenciones para mantener reservas nacionales. 
 
Pregunta:  
 
28. Cuál es el valor de la MGA?   29. Se mantiene la ayuda  AMBAR otorgada dentro de los niveles consolidados? 
 
30. Dado que no hay notificación de  ayudas para los años 2009 al 201 1 y los datos de la OECD 
no son comparables con los métodos de cálculo de ayuda de la OMC.  Cómo garantiza China que los 
niveles de ayuda no sobrepasan los consolidados?  
Answer: (28-30) According to China's WTO commitments, China's total AMS is 0.  Amber box 
support are de minimis  within the specific situation.  Please consult the China Agricultural domestic 
support communications for more information.  
Página 132 (párrafo 62)  
 
Las autoridades indican que se está terminando de red actar la Ley de la Ener gía, destinada a abarcar 
todo el sector de la energía. 
 
Pregunta:  
 
31. Podría China indicar si en esta nueva Ley de Energía existen restricciones para la 
producción, distribución o comercialización de energía  por parte de empresas de capital extranjero?  
 
Answer: At present, the Energy Law of China is s till on the process of study and drafting.  The 
Energy Law will comply with WTO regulations, me et China's commitment while entering WTO, and 
coordinate with the industrial policies on foreign investment of China.  WT/TPR/M/264/Add.1 
Page 130 
 
 
  Página 133 (párrafo 67)  
 
Desde el 1 de noviembre de2011 se aplica el impuesto sobre los recursos con tipos ad valorem  que 
oscilan entre el 5 y el 10 por ciento a las ventas de petróleo crudo y gas natural producidos en China, 
y se otorgan privilegios fiscales a la producción de aceite espesado, aceite con un elevado punto de 
fluidez, gas natural de alto contenido en azufre y otros productos del petróleo y del gas, aplicables por 
igual a todas las empresas nacionales (incluidas las empresas conjuntas contractuales).    Pregunta:    32. Podría China confirmar si el impuesto sobre los recursos aplica forma idéntica a las 
empresas nacionales y a las empresas extranjeras, o existe alguna distinción?   
Answer: Article 1 of the Interim Regulations on R esource Tax of People's Republic of China 
enforced on 1 November 2011 stipulates that the policy on resource tax applies to both domestic and 
foreign enterprises, and that there is no policy difference.  
Página 141 (párrafo 95) 
 Los Dictámenes del Consejo de Estado sobre una mayor utilización de inversiones extranjeras 
(abril de 2010) han libe ralizado en mayor medida la inversión en varios sectores o esferas de 
servicios.   
Pregunta:  
 
33. Puede China mencionar cuáles son los secto res o esferas de servicios que ha liberalizado, 
siguiendo los Dictámenes del Consejo de Estado?  
Answer: There are definite regulations in Catalogue  for the Guidance of Foreign Investment 
Industries 2011, which was entered into force in 30  January 2012.  The foreign investors can get the 
information from public channel. 
 
Página 141 (párrafo 95) 
 
Durante el período objeto de examen, los cinco prin cipales bancos comerciales de propiedad estatal 
representaban alrededor del 50 por ciento de los activ os totales de las instituciones financieras.   
 
Preguntas:  
 
34. Los cinco principales bancos comerciales de  propiedad estatal compiten con los demás 
bancos privados tanto nacionales como extranjeros?  
 Answer: As commercial bank, the big five state-owned banks are same as other private banks and 
foreign banks, all of them need to obey the re levant laws and regulati ons, and compete on equal 
footing.    Página 148 (párrafo 117) 
 
En el Reglamento de administración de bancos fina nciados con capital extranjero y las Normas para la 
aplicación del Reglamento de administración de bancos  financiados con capital extranjero se estipulan 
los requisitos (en particular, sobre la cuanta míni ma del capital social y el capital desembolsado y el 
total del capital de explotación) para el establecimi ento de bancos financia dos exclusivamente con 
capital extranjero y sucursales de bancos extranjeros.    WT/TPR/M/264/Add.1 
 Page 131 
 
 
   
Pregunta:  
 
35. Los requisitos de cuanta mínima, capital soci al desembolsado y capital de explotación en este 
Reglamentos son distintos a los requisitos establecidos para los bancos estatales?  
Answer: The minimum registered capital for a wholly foreign-funded bank or a Chinese-foreign joint 
venture bank stipulated in Article 8 of the Regulations of the People's Republic of China on 
Administration of Foreign-Funded Ba nks is consistent with the minimum registered capital for setting 
up a commercial bank stipulated in Article 13 of the Law of the People's Republic of China on Commercial Banks.  As to the registered capita l and the actually paid capital for setting up a 
commercial bank as well as the operational capital for branch institutions, there is no legal difference 
regarding a Chinese bank or a foreign bank.  Artic le 8 of the Regulations on Administration of 
Foreign-Funded Banks also stipulates that, a foreign bank branch shall receive from its parent bank a 
non-callable allocation of no less than 200 million yu an or an equivalent amount in convertible 
currencies as its operating capital.  As a foreign ba nk branch is not an independent legal person and 
carries out operation within Chinese territory mainly  relying on the operating capital obtained from its 
parent bank, the requirements on its operating capita l made by China complies with the principle of 
prudence of WTO General Agreement On Trade and Services. 
 
Página 195 (párrafo 323) 
 
En 2010 los servicios de entrega urgente representa ron el 45 por ciento de los ingresos totales del 
sector postal chino.  Con arreglo a la nueva Le y de Correos, los inversores extranjeros no están 
autorizados a prestar servicios de entrega urgent e de correspondencia a nivel nacional;  este servicio 
figura en la categoría "prohibidas" en la Gua para  las industrias con inversión extranjera de 2011.   
 
Pregunta:  
 
36. Vislumbra China alguna apertura en el sector  de entrega urgente de correspondencia a nivel 
nacional? 
 
Answer: Chinese government will proactively fulfill its WTO commitments, implement opening-up 
in the area of express delivery services, and promote the fair competition and healthy development of 
the postal industry, in line with the Postal  Law and other related laws and regulations. 
 
PARTE II:  PREGUNTAS EN RELACIN CON EL INFORME DEL GOBIERNO 
 
Página 8 (párrafo 16) 
 
The Government continued to increase spending on agriculture, rural areas and farmers, in less 
developed areas, on education, healthcare, social security, low-income housing, and environmental 
protection.  
Preguntas:  
 
37. En qué consiste el aumento en gasto para el sector agrícola? 
 
Answer: In recent years, the Chinese Government has di verted the focus of its infrastructures and 
social undertakings from urbans to countryside.  More investment have been made to improve 
agricultural and rural conditions.  The major invest ments are:  1) to support the production of 
agricultural commodities especially fo odstuff;  2) to strengthen water conservancy construction;  3) to WT/TPR/M/264/Add.1 
Page 132 
 
 
  improve infrastructures in countryside;  4) to strengthen forestry ecological construction;  5) to 
improve social undertaking facilities in the rural areas.  38. Qué implicaciones tiene para  el sector agrícola exportador? 
 
Answer: The policy mentioned above is about the measu res that Chinese government implemented to 
improve the infrastructure construction of rural area, and to promote the social facilities development.  
The policy has no relationship with export agricu lture, and will not bring negative effect to 
international agriculture trade. 
 
Página 10 (párrafo 21) 
 
In 2010, the Chinese Government continued to impl ement consumption stimulus programs such as the 
programs for rural residents to purchase home a ppliances and motor vehicles and motorbikes, for 
people to trade in old motor vehicles and home ap pliances for new ones, and for use of energy-
efficient products.    
Preguntas: 
 
39. Cuáles son las implicaciones del programa de estímulo de cons umo (o demanda interna) en 
el comercio internacional?  
Answer: In recent years, Chinese government has adjusted import duty of some consumer goods, and 
been carrying through the policies of promoting c onsumption of household electricity appliances, 
vehicles and energy-saving products.  Implementation of such policies effectively stimulates import of 
relevant goods.  Meanwhile, during the implementati on of such policies of promoting consumption as 
household electricity appliances going to the country side and new for old of vehicles and household 
electricity appliances, unless otherwisely prescribed by law, there is no restriction to import and 
export of goods.  Página 11 (párrafo 37) 
 
More strict protective exploitation policies and environment protection standards were adopted on 
non-renewable resources such as bauxite, tungsten,  antimony, tin and rare earth, and the total 
exploitation and production volum es were strictly controlled, in order to protect resources and 
ecological environment and promote reasonable a nd efficient exploitation and utilization.  
 
Preguntas:  
 40. Podría China dar ejemplo concreto de la s medidas y estándares de protección ambiental que 
han aplicado para restringir la producción de estos materiales (recursos no renovables)? 
 
41. Cuál es el impacto que estas restricciones han tenido en la industria china relacionada con 
este tipo de materiales?  42. Estas medidas impuestas han afectado el com ercio de estos materiales con terceros pases? Se 
han impuesto restricciones comerciales específicas?  De ser as, podrían señalar qué tipo de 
restricciones se han impuesto?  
Answer: (40-42) China's export administration on unregener ated resources such as rare earth is for 
the purpose of protecting environment and conserving  exhaustible natural resources.  Since the WTO 
dispute cases on this issue are now under way, it is appropriate for us to refrain from making 
comments until the decision of the Panel.  WT/TPR/M/264/Add.1 
 Page 133 
 
 
   
Página 13 (párrafo 38) 
 The Chinese Government will, in accordance with  the requirements on narrowing the gap between 
urban and rural areas and improving the balance betw een urban and rural development, continue the 
implementation of the "pay-back" policies.  
Pregunta:  
 
43. En qué consisten las políticas Pay back y en qué tipo de ayuda son notificadas al Comité de 
Agricultura: Caja Verde o ámbar?  
Answer: China has long been implementing the policy of agriculture supporting industry, supporting 
industrial development with agricultural accumulation.   As China's industrialization and urbanization 
accelerate, the industry has become the leading industries of the national economy.  In order to 
achieve the coordinated development of industry a nd agriculture, China has strengthened agriculture 
support and protection, making it a shift from agriculture supporting industry to industry paying-back to agriculture.  Support measures related to agri cultural production, including the Green Box and 
Amber Box support measures, have been notifie d to the WTO Committee on Agriculture through 
China's agricultural domestic support. 
 
Página 14 (párrafo 47) 
 
Reform of state-owned enterprises (SOEs) in China, after going on for more than 20 years, now enters 
a stage focusing on restructuring of large SOEs.  Th e direction of further deepening the reform is to 
accelerate the introduction of corporate and share-holding systems, realize diversification of investors, 
and push forward entire listing of those qualified large SOEs.  For those not yet ready for entire 
listing, reform on diversification of ownership should speed up.   
 
Pregunta: 
 
44. Podría China explicar si en estos proceso s de reforma de antiguas empresas estatales se 
están eliminando restricciones a la compra de a cciones o cuotas por parte de inversionistas 
extranjeros?   
Answer: There is no special provisions in the current Chinese laws and regulations as to a foreign 
investor engaging in the reform of the state-owne d enterprises.  A foreign investor purchasing shares 
of a Chinese enterprise (including a state-owned ente rprise) shall comply with the relevant provisions 
regarding to equity ratio as stipulated by the Catalogue of Industries Invested by a Foreign Investor.  
Página 20 (párrafo 78) 
 
Export of products consuming too much energy a nd resources and causing serious pollution continues 
to be strictly controlled.  The export admi nistration measures on products of high energy 
consumption, high emission and pollution and produc ts of exhaustible natural resources are an 
integral part of the ecological and environmental protection measures of the Chinese Government to 
achieve sustainable development under intensif ying pressure from resources and environmental 
constraints.  They are simultaneously implem ented with domestic e xploration and production 
restrictions.   WT/TPR/M/264/Add.1 
Page 134 
 
 
  Preguntas:  
 45. Qué tipo de medidas se han tomado para restringir las exportaciones de este tipo de 
productos? 
 
Answer: A series of measures of restriction of export can be applied to these goods, such as 
adjustment of export tax rebate and cease of proces sing trade (i.e. terminating the preferential policy 
of bonded import of materials).  Measures of imposi ng export tariff may also be taken in some cases. 
 
46. Qué tipo de medidas se han tomado a ni vel doméstico para la producción relacionada con 
estos productos?    
 
Answer: China applies strict restrictions to some indus tries with surplus production capacity to avoid 
excessive expansion of production capacity, and stric tly approve projects of high energy consumption 
and high pollution emission.  China will further rai se the access threshold of new projects.  In order to 
protect resource and environment and promote sound  development of these industries, a new project 
can be started only at the premise of elimination of the backward project, non-increase of the total 
output, low consumption of energy and standard pollution emission.  47. Podría China dar ejemplos de las consid eraciones científicas que legitiman la adopción de 
este tipo de medidas?  
Answer: Restriction to production and export of these goods equals to adjustment to supply and 
demand of goods, with the purpose to restrict ex cessive expansion of pr oduction of relevant goods, 
and finally release the pressure of domestic environment and resources. 
 
 
DOMINICAN REPUBLIC 
 Preguntas 
 
De acuerdo con el examen de policías comerciales de China, el párrafo 7 de la página ix del Informe 
de la Secretaría, se menciona que en el periodo examinado hubo muchos cambios en las políticas de 
china en materia de importaciones y de entr ada de inversiones extranjeras.  Los aranceles NMF 
aplicados siguen estando próximos a lo s tipos consolidados en China, y el promedio aritmético de los 
aranceles NMF aplicados, del 9.5%, no ha variado.  China hace uso de diversas medidas en frontera 
no arancelarias, como las licencias de importa ción y exportación y el comercio de estado para 
orientar la asignación de recursos.  El uso de  procedimientos de aviso y formulación de 
observaciones se está haciendo más general en el proceso de redacción de leyes, reglamentos y 
normas departamentales en materias de comerc io, pero, al parecer, no toda la información 
relacionada con el comercio se pone  a disposición del público. 
 
- A qué criterios responde la información relac ionada con el comercio que no está disponible 
al público?   
- De qué forma ha afectado esta situación a la  comunidad comercial china y extranjera, al 
momento de gestionar o partici par en uno de los mecanismos  de comercio que disponen?  
- Ha planificado China eliminar esta práctica, divulgando oportunament e toda la información 
que requieren los agentes de comercio para sus transacciones y aprovechamiento de las oportunidades derivadas del comercio?  
 
Answer: (1-3) It is not mentioned in China's commitmen t to solicit public opinions for the drafts of 
the laws, regulations or rules to be promulgated.  Nevertheless, in order to  advance scientific and 
democratic legislation and improve the quality of legislation, the Chinese Government has always  WT/TPR/M/264/Add.1 
 Page 135 
 
 
  made unremitting efforts to improve the transparen cy of legislation, promote solicitation of public 
opinions on legislation drafts and expand public participation.  Sin ce 2008, public opinions have been 
solicited for draft administrative laws a nd regulations which are all published on 
http://www.chinalaw.gov.cn except tho se to be kept secret in line with  law. And public opinions have 
also solicited for draft regulations of various departments on their websites or 
http://www.chinalaw.gov.cn.  All parties including foreign investors can propose their opinions and 
suggestions  El Régimen de Política Comercial: Marco y Objetivos.     Transparencia      
 En el párrafo 4 y 5, página 13, se hace referencia a que muchos aspectos el régimen de política 
comercial y de inversiones de China siguen siendo co mplejos y opacos, lo cual deja posibilidades de 
discrecionalidad administrativa y de corrupción.  
 
1. Cómo ha repercutido esta falta de transparencia y discrecionalidad en el comercio y la 
inversión de/en China?    
 
Answer: Pursuant to Article 42 of the Legislation Law of the People's Republic of China, the power 
of law interpretation is vested with the Standi ng Committee of the National People's Congress.  As 
further stipulated in Article 47 of the Legisla tion Law, the legal interpretation by the Standing 
Committee of the National People's Congress has equal e ffect with laws.  According to Article 31 of 
the Ordinance Concerning the Procedures for th e Formulation of Administrative Regulations, 
administrative laws and regulations to be further clearly defined or be added with supplementary 
provisions shall be interpreted by the State Council,  and the interpretation of administrative laws and 
regulations shall have equal effect with the admini strative laws and regulations . Pursuant to Article 33 
of the Ordinance, if the legal organs of the peoples governments of provinces, autonomous regions 
and municipalities directly under the Central Govern ment and relevant departments under the State 
Council request the legal organ of the State Council to give interpretations for issues concerning the 
specific application of administrative laws and regul ations during administration work, the legal organ 
of the State Council may research and give reply;  for significant issues, it may propose opinions and 
give reply after the opinions are submitted to an d approved by the State Council.  According the 
above provisions, China has unified interpretation of laws and regulations and the statement of 
leaving scope for administrative discretion and corruption. 
 
Política y Prácticas Comerciales, Por Medidas  
 a) Medidas que afectan directamente a las importaciones     
b) Procedimientos aduaneros, valoración en aduana y normas de origen    
c) Inspección previa a la expedición     
 
Según el párrafo número de 10, pá gina 29 de este Examen, se es tablece que las prescripciones en 
materia de inspección, previa a la expedición no han sufrido cambios desde 2010.  Esas prescripciones, que se establecen en el Reglamento  de aplicación de la Ley sobre Inspección de 
Mercancías de Importación y de Exportación revis ado, están destinadas a proteger la salud pública, 
mejorar la situación fitosanitaria, proteger el me dio ambiente y evitar la entrada en el país de 
mercancías falsificadas.  Todavía no se han notificado a la OMC.  Y que el Reglamento entró en 
vigor el 1 de diciembre de 2005.   
1. Podría China, explicar por qué aun no se han notificado las prescripciones que establecen 
dicho Reglamento?  
2. Cómo favorece este instrument o el acceso flexible de los productos importados?  
 WT/TPR/M/264/Add.1 
Page 136 
 
 
  Answer: In the Implementation Rules of the Inspection Law on Import and Export Commodities, 
inspection and quarantine of safety, sanitation, h ealth, environmental protection and anti-fraud are 
taken as the major work of competent authorities, reflecting people-oriented thought and 
implementation of the Scientific Outlook on Devel opment.  In terms of regulating administrative 
enforcement of laws, the Implementation Rules  requires clearly higher efficiency and better service 
and puts forward specifications on both supervision and management and lega l responsibilities, so as 
to improve inspection efficiency of imported goods.  Normas y Otras Prescripciones Técnicas    
 
 Medidas sanitarias y fitosanitarias     
 
Por lo visto en el párrafo 102, páginas 58 y 59, ot ros Miembros han planteado en varias ocasiones al 
Comité preocupaciones por MSF adoptadas o propuestas  por China, entre ellas, normas de higiene 
para los licores destilados, restricciones a la impor tación de determinados productos y pruebas de 
cuarentena, as como por las prácticas de notificac ión en materia sanitaria y fitosanitaria.  Las 
preocupaciones acerca de las prác ticas de notificación en materia s anitaria y fitosanitaria surgieron 
después de la adopción de la Ley sobre inocuid ad de los alimentos de 2009, cuando se presentaron 
casi 100 notificaciones con un plazo para formular observaciones de 15 das.  
 
1. Cómo valora China la pertinencia de las medidas MFS para que las mismas no se conviertan 
en restricciones encubiertas de l comercio internacional?  
 
Answer: China will make SPS measures that comply with  the SPS Agreement and make sure that 
they do not constitute disguised rest rictions on international trade. 
 
Políticas Industriales 
Empresas Estatales, Empresas Privadas y Gestión Empresarial    
 
 Empresas del sector no público    
 
De acuerdo a lo establecido en párrafo 228, página 88 de este Informe, en China, las empresas del 
sector no público pueden ser empresas  privadas nacionales (incluidas las empresas individuales) y 
empresas con inversión extranjera.  Según las autor idades, las empresas privadas nacionales y las 
empresas con inversión extranjera reciben el mismo tr ato, es decir, se benefician de condiciones 
igualitarias en el acceso a los mercados, el impu esto sobre la renta de las sociedades y demás 
medidas administrativas.  Mas sin embargo, según lo  indicado en párrafo 18 de la página 120, las 
empresas comerciales del Estado siguen tenie ndo un acceso predominante a los contingentes 
arancelarios, pues se les asignó el 90 por ciento de l contingente correspondiente al trigo, el 60 por 
ciento del correspondiente al maíz, el 50 por ciento del correspondiente al arroz, el 70 por ciento del 
correspondiente al azúcar y el 33 por ci ento del correspondiente al algodón.  
 
1. Cómo se explica esta distribución de los conti ngentes arancelarios, dentro de lo que son 
condiciones igualitarias en el acceso a los mercados para las empresas comerciales del 
Estado versus las empresas privadas, individuales nacionales?   
 
Answer: The quota allocation of the commodities subject to quota administration is duly in 
compliance with China's commitments to the WTO,  and abides by the "Interim Measures for the 
Administration of Import tariff Quotas of Agricultural Products".  State trading enterprises refer to those enterprise th at have acquired the qualification to engage in 
import and/or export trade of prod ucts listed in Annex 2A of Chin a's WTO Accession Protocol.  They 
are not necessarily state-owned enterprises.  Some  of the state-trading enterprises are private  WT/TPR/M/264/Add.1 
 Page 137 
 
 
  enterprises or enterprises with foreign investment.  China's state-trading regime is the result of its 
WTO accession negotiations, and therefore the legal basis is China's Accession Protocol, including 
Annex 2 of the Protocol. 
 
2. Cuáles son los criterios establecidos para que la distribución de los contingentes 
arancelarios beneficie ms a las em presas comerciales del Estado?  
 
Answer: The proportion of state-run trade quotas stipulated in China's commitments to the WTO are 
recognized by all members.  The purpose of determin ing the proportion is to enable China to protect 
the interests of its farmers by regulating the mark et through imports and e xports.  In addition, the 
state-run trade enterprises operate independently according to market principles, so there is no 
question of them being allowed to en joy more benefits by the country. 
 
Políticas Agrícolas 
 
Según establece el párrafo 13, página 119, todas la s tierras agrícolas de China son propiedad del 
Estado o de colectivos y son ges tionadas por las autoridades locales de la zona.  No obstante, la 
tierra no se puede vender, subarrendar ni utilizar  como garanta para créditos, lo que es un grave 
impedimento para la inversión y la reestructuración.   En el decimoséptimo Congreso del Partido, 
celebrado en octubre de 2008, se aprobó la Decisión sobre determinadas cuestiones relativas a la 
promoción de la reforma y el desarrollo rurales, en la que se indicaba que la política de tierras poda 
cambiar a fin de conceder a los titulares ms derec hos para transferir, arrendar o intercambiar la 
tierra.  
 
1. Podría China informar, si se aplicar la d ecisión del partido comunista para eliminar las 
disposiciones que limitan la tenencia de tierra? 
 
Answer: The "Decision on Several Major Issues Concer ning the Promotion of Rural Reform and 
Development" adopted at the Third Plenary Session of the Party in 2008 requires us to "strengthen 
administration and services regarding the circulati on of the right to land contractual management, 
establish and improve the circulation market of the right to land contractual management, allow 
farmers to circulate the right to land contractual management by means of subcontract, lease, exchange, transfer, joint-stock cooperation or by  other means according to law and on a voluntary 
basis and with compensation, and promote the de velopment of various fo rms of moderate scale 
businesses."  Meanwhile, it also stresses that "the circulation of the right to land contractual 
management shall not result in any change of the co llective ownership nature of the land or the use of 
the land, and shall not do harm to the farmers'  land contract rights."  These policies have great 
significance in promoting the legal, standardized and orderly development of th e circulation market of 
the right to land contractual management, and pr omoting the development of moderate scale business 
entities like professional big businesses, family farms, and professional farmers cooperatives.  Meanwhile, no mortgage is allowed to be establis hed on the right to land contractual management 
obtained through household contract, according to th e regulations of the "Property Law" and the 
"Guarantee Law".  This is mainly because China's ru ral social security system is still not sound and 
the contracted land is still the most reliable livelihood security of the majority of farmers.  If allowing 
mortgage on the right to land contractual manageme nt, some farmers might lose the contracted land 
and this would endanger their lives and cause social problems. 
 
Según la OCDE, Párrafo 46, página 128, casi t oda la ayuda para los productos principales se otorga 
mediante medidas de sostenimiento de los precios del mercado (con inclusión de los aranceles) y se 
dedica una cuanta importante a las subvenciones a los insumos.  La OCDE ha señalado que estas formas de ayuda a los productores agropecuarios fi guran entre las menos eficaces y las que ms 
distorsionan el comercio y son menos eficaces que las alternativas, como los pagos desconectados o 
basados en la superficie, porque un a gran parte de los beneficios se pierde a causa de los costos ms WT/TPR/M/264/Add.1 
Page 138 
 
 
  elevados de los insumos y los recursos; pueden, pu es, distorsionar el comercio en mayor medida que 
otras alternativas ms eficaces.  
2. Tomando en cuenta las observaciones de señal adas por la OCDE, qué medidas se tienen 
pautadas para evitar las distorsiones en el co mercio y lograr que los productores sean ms 
eficientes y sus producciones ms rentables?    
 
Answer: China is a big developing country.  Taking into account the size of China's population, 
ensuring the effective supply of agricultural pr oducts, especially ensuring the food security, has 
always been the primary task in China's agriculture industry.  The importance and difficulty of the task is more prominent in China compared with other developing countries.  Countries have different 
national conditions and different specific problems.  Developed and developing countries are in 
different stages of development, so they have di fferent policy objectives.  The policies implemented 
in China are consistent with its WTO commitment s and the relevant WTO rules, and the practice 
showed that the implementation of these policie s for safeguarding food security and small-scale 
farmers livelihoods played a positive role on the st ability of agricultural production and farmers' 
income, did not result in trade-distorting.  
3. Cuáles medidas concretas pondrá en marcha el gobi erno chino para orientar el superávit en 
el ahorro nacional hacia la inversión interna?   
 
Answer: The Chinese government constantly improves the so cial security system, effectively lightens 
the burden on residents in education, health care,  housing, etc., and reasonably guides the residents' 
willingness to save.  Meanwhile, it strengthens the c onstruction of multi-level capital market to meet 
the diverse investment needs of residents; further improve the i nvestment environment, reduce the 
corporate tax level, and promote moderate growth in investment. 
 
4. Tras la búsqueda de reducir el superávit com ercial a través del estimulo a las importaciones, 
cual es la posición del gobierno chino en relación a las medidas que restringen las 
exportaciones?  
 
Answer: On the issue of export management measures,  the Chinese Government does not intend to 
restrict and distort trade or to protect domestic industries.  The export management of resource 
products and products whose production causes serious  pollution or consumes large quantities of 
energy is an integral part of the Chinese G overnments ecological and environmental protection 
measures to achieve sustainable development in th e face of intensifying resource and environmental 
pressures. 
 
5. Cuáles nuevas medidas prevé el gobierno chi no para poder controlar la capacidad de 
producción de algunos sectores, como el acero y el hierro, ya que hasta el momento no ha 
podido ser frenadas la producción de los mismos ?  Y cuáles son las implicaciones de este 
exceso de capacidad instalada?   
 
Answer: In the iron and steel industry, China's measures to control the excessive growth of 
production capacity have begun to show initial results, the iron a nd steel production growth has 
clearly slowed down, and the quantity reduction has become the industry consensus.  For the next 
step, China will focus on promoting industrial la yout optimization and structural adjustment, 
improving competitiveness, eliminating backward production capacity throug h market mechanisms, 
and accelerating the pace of industrial restructuring. 
 
6. En cuanto a la Inversión Extranjera, en el Informe se establece que el Gobierno chino sigue 
alentando a las Empresas China's a invertir en el  extranjero, en particular, en los sectores de 
energía, materias primas, agricultura, manufac turas, entre otros; en ese sentido, nos  WT/TPR/M/264/Add.1 
 Page 139 
 
 
  interesara conocer si América Latina, en partic ular, la República Dominicana estarían entre 
de uno de sus principales destinos de su inversión.          
 
Answer: Latin American region has always been an im portant destination for Chinese enterprises to 
make foreign investment and it is our understanding that any host country that is endowed with a 
sound investment environment where there is an investment opportunity meeting the development 
need of Chinese enterprises, is believed to become  an investment destination for Chinese enterprises. 
 
7. En materia de Transparencia, el Informe est ablece que partir de mayo de 2008 entraron en 
vigor disposiciones sobre la información gub ernamental, sin embargo, se establece que aún 
existen dificultades al respecto, sobre todo, fa lta de equilibrio entre la divulgación de 
información y la información confidencial;  en ese tenor, nos interesaría tener conocimiento 
de las medidas que aplicarán c on el objetivo de mejorar estas deficiencias en materia de 
Transparencia Gubernamental.  
 Answer: The "Government Information Disclosure Regula tions of the People's Republic of China" 
put into effect on 1 May 2008 clears the concept of government information and the scope of government information which the body to disclose government information should take the initiative 
to disclose, it also clearly stipulates that citizens, legal persons and other orga nizations have the right 
to apply for access to relevant information with  the departments of the State Council and local 
people's governments above the county level.  In order to implement the regulations, the General 
Office of the State Council has issued supporting documents like "the opinions of the General Office of the State Council on Several Issues Regarding th e implementation of the Government Information 
Disclosure Regulations of the People's Republic of Chin a" and "the Opinions of the General Office of 
the State Council on the Disclosure of Governme nt Information upon Application";  local 
governments at all levels and re levant departments have also made great progress in disclosing 
financial budget and statement, the three official consumptions and other government information in 
accordance with the regulations.  In  2012, the General Office of the State Council issued the "2012 
Work Plan on Focus Points for Government Information Disclosure", giving specific instructions on 
the information disclosure in key areas and th e building of information disclosure system. 
 
Bancos Extranjeros (página 148 del documento WT/TPR/S/264) 
 
1. Existe trato discriminatorio a los capital es extranjeros en relación con los capitales 
nacionales?    
- Hacemos esta pregunta porque entendemos que  el capital mínimo requerido para el 
establecimiento de una sucursal de un banco ext ranjero es de US$20,000 millones de dólares, 
mientras que a la banca local solo se le exi ge 10,000 millones de dólares.  Por lo tanto, 
observamos un trato discriminatorio a favor de los capitales chinos.  
 
Answer: The foreign financial institutions which meet the condition that total assets of more than 
US$20 billion at the end of the year prior to filing the application, are permitted to establish a branch 
of a foreign bank in China.  This different treatme nt is a reservation that China maintains in its 
schedule of specific commitments. 
 
- Otro aspecto que llamó nuestra atención, es que esta medida es doblemente discriminatoria  
porque solo favorece a los bancos de grandes cap itales.  Por lo tanto, ningún banco de la 
región de Centroamérica y el Caribe podrá est ablecerse en china, debido al alto monto que 
su legislación exige.  
 
Answer: The above-mentioned requirements are consis tent with China's WTO commitments, we 
welcome all qualified foreign banking services supp liers including banks from Central America and 
Caribbean region to provide services in China.  WT/TPR/M/264/Add.1 
Page 140 
 
 
   
2. Por qué China no sigue los lineamientos de  los otros países miembros de la OMC 
permitiendo que la IDE sea 100% de capital extranjero? 
 Answer: According to China's service schedule, qualified foreign financial institutions are allowed to 
establish wholly foreign-owned banks, including subs idiaries and branches.  However, China did not 
make any commitments on the acquisition of existing domestic banks by foreign financial institutions.  
Nevertheless, China allows foreign investors to ac quire equities of Chinese-f unded banks up to certain 
level.  According to the Measures on Administration of Equity Investment of Overseas Financial 
Institutions in Chinese-funded Financial Institutions, th e percentage of equity investment of a single 
overseas financial institution in a Chinese-funde d financial institution may not exceed 20%. 
 
- Al hacer la revisión de la lista de los comp romisos horizontales de China en el GATS 
(documento WT/ACC/CHN/49/A), nos hemos percatado de que este país condiciona su 
inversión extranjera a la presencia del capital lo cal a parte del capital extranjero.  En la 
parte in fine del numeral 3) del referido documen to se establece lo siguiente:  La proporción 
de inversión extranjera en una empresa conjunta de capital no debe ser inferior al 25 por 
ciento de su capital social.  
- Hacemos esta pregunta porque países miembros  de la OMC, han permitido que capitales 
chinos controlen el 100% de las acciones de compañas establecidas en estos países, sin 
ningún tipo de restricción. 
 
 
ECUADOR 
 
Report by the Secretariat (WT/TPR/S/264)   
 
The Secretariat report, Chapter II, Section (4) Foreign Investment Regime, (ii) Regulatory 
framework, paragraph 46 and footnote 50:   regarding the "encouraged" industries and the tax 
incentives for FDIs in the central-w estern region, the classification of encouraged industries includes 
those helping to meet domestic and export market demand and important raw material industries.   
 
 Has this type of measure been notified pu rsuant to your export subsidy commitments?  
 
Answer:  The "encouraged" industries and the tax incen tives for FDIs in the central and western 
region have been included in the subsidy notificati on submitted by China. It is important to declare 
that the tax incentives are not on the condition of product export, so they are not export subsidies.   
Secretariat report, Chapter III, Section (1) Meas ures Directly Affecting Imports, (ii) Tariffs, 
paragraph 18 and footnote 13.   With reference to "interim" tariffs:  
  (a) What criteria do the State Council and its Customs Tariff Commission apply in 
setting, adjusting and appr oving interim tariffs?  
 
Answer:  The Customs Tariff Commission of the Stat e Council sets and adjusts import and export 
tariffs mainly in accordance with national economic development as well as the production, 
consumption, import and export of relevant products, including goods applying interim tariffs, tariff 
rate and time limit.   
 (b) If the setting, adjustment and approval of  interim tariffs is done by order of the 
mentioned bodies, and not as a border measure,  and considering that interim tariffs may be 
applied to a variety of products, does the implem entation of interim tariffs not amount to 
granting less favourable treatment to imported products?     WT/TPR/M/264/Add.1 
 Page 141 
 
 
   
Answer:  The setting and implementation of interim traffics accord with the principle of most-
favoured-nation treatment.  
 
Secretariat report, Chapter III, Section (2) Meas ures Directly Affecting Exports, (viii) Export 
finance, insurance and guarantees, paragraph 164.   With reference to insurance premiums:   
 
 What is the method used for payment of the insurance premium?  Does the State provide any 
financing or support for the payment of the net export insurance premium?   
 
Answer:  For export credit business with export credit insu rance, the insurance premium is separately 
collected by Sinosure from the insura nce applicant, the insurant or the designated third party.  During 
the business operation, Sinosure has endeavored to r ealize the business goals of long-term balance of 
profit and loss and break-even operation in the wa y of "commercial opera tion" required in its 
constitution and strictly observed relevant WTO re quirements.  The Chinese Government doesn't 
provide any financing or support for the net export insurance premium.  
 
Secretariat report, Chapter III, Section (3) Measures Affecting Production and Trade, (iv) Price 
controls, paragraphs 214 and 215 and footnote 187  regarding government prices, the purchase at 
market prices of reserve materials by State comp anies, and the claims by State companies to the 
Ministry of Finance for losses owing to government guided prices.     
 How does China ensure that the government pr ices measure does not distort the prices that 
are paid to producers, chiefly when it comes to agr icultural products, and how does this measure fit 
in with China's WTO commitments?    
 
Answer:  Currently, China has applied the government prices to a minor proportion of goods and 
services in the total and even fewer agricultural pr oducts.  The goods and services with government 
prices are not beyond the scope of Annex 4 of China's Protocol of Accession.  
 Secretariat report, Chapter IV, Section (1) Agricu lture, (ii) Agriculture policies, paragraph 33.      
 
 What measures has China taken to ensure that the participation of its trading enterprises in 
the distribution of certain agricultural products, in some cases linked to exports or imports, complies 
with non-discrimination provisions and the requi rement to base activities entirely on "commercial 
considerations"? 
 
Answer:  Pursuant to the Protocol on the Accession of the People's Republic of China, China has 
implemented state trading management for the import of wheat, maize, cotton, sugar and other agricultural products and the export of maize, rice  and other agricultural products.  Since the WTO 
accession, the Chinese Government has implemented st ate trading management in strict accordance 
with its accession commitments and relevant la ws and regulations, time ly notified relevant 
information of state trading enterprises to the WT O and required enterprises to carry out commercial 
activities according to relevant laws and regulati ons.  The state trading enterprises independently 
choose import countries and opportunities based on market conditions, and the Chinese Government 
doesn't intervene into the commercia l operations of the enterprises.  
 
According to the Report by China, Chapter II, Section (3) Accelerating the Transformation of 
Economic Development Pattern, (i) Implementing  the strategy of expanding domestic demand, 
paragraph 21 , the Government of China is interested in expanding domestic demand through 
consumption stimulus programmes, the use of en ergy-efficient products and promoting credit for 
consumption.   
 WT/TPR/M/264/Add.1 
Page 142 
 
 
   Could the Government of China explain how these domestic policies are applied in 
conformity with Articles III.1 and III.4 of the GATT 1994, and provide examples of policies adopted to 
encourage increased domestic consumption of domestic and foreign products?  How does China 
propose to increase consumption through credit?  A re there already domestic regulations in this 
respect?    
 
Answer:  China's strategy of expanding domestic dema nd and consumption stimulus programmes are 
not only limited to purchasing domestic products, but also includes the cons umption incentives for 
foreign products.  So, this type of policies a nd measures doesn't violate the principle of most-
favoured-nation treatment.  The specific measures in clude the policy of home appliances going to 
countryside, and the policy of home appliances trad e-in and so on.  The relevant policies are 
formulated in accordance with the needs in special periods and are time-based.  For example, the 
policy of home appliances trade-in  was abolished in December 2011.  
 The Report by China, Chapter II, Section (3) Accelerating the Transformation of Economic Development Pattern, (ii) Accelerating the de velopment of the service sector, paragraph 28  
states that a series of guidelines have been proposed  to stimulate the development of such specific 
services sectors as medical services, high-tech servi ces, energy-saving services, logistics, accounting 
services, housekeeping services, e-comme rce, inland shipping, etc.   
 
 Could China please provide further details  concerning these guidelines to promote the 
development of the mentioned sectors?     
 
Answer:  Please refer to the Opinions on Accelerating the Development of Water Transportation of 
the Yangtze River and other Inland Rivers (Guo Fa  [2011] No. 2 issued by the State Council, the 
Opinions of the General Office of the State C ouncil on the Policies and Measures for Promoting the 
Sound Development of the Logistics Industry (Guo Ban Fa [2011] No. 38), the Guiding Opinions of 
the General Office of the State Council on Accelerating the Development of the High-tech Service Industry (Guo Ban Fa [2011] No. 58), the Notice of the General Office of the State Council on 
Forwarding the Opinions of the National De velopment and Reform Commission and Other 
Departments on Accelerating the Promotion of En ergy Management Contract and Promoting the 
Development of the Energy Conservation Servi ce Industry (Guo Ban Fa [2011] No. 25) and other 
policy documents for details. All these policy doc uments are made available at www.gov.cn.  
 
 Have foreign investment incentive policies been u sed for non-financial services?  If so, please 
provide details.   
 
Answer:  In December 2011, the Chinese Government pr omulgated the Catalogue for the Guidance of 
Foreign Investment Industries (Revised in 2011) (No. 12 Order of the NDRC and MOFCOM.).  The 
Catalogue was revised to encourage foreign in vestments in modern service industry, support 
expanded foreign investment utilization for the indu stry oriented at people’s livelihood and promote 
the opening process of service industry.  Nine "e ncouraged" clauses were added to service industry, 
including charging stations for motor vehicles, vent ure enterprises, intellectual property right services, 
technical services for offshore oil pollution cleanup , vocational training and so on.  The share of 
clauses of service industry in the "encourage"  category was further increased.  The foreign 
investments in medical institutions and financial leasing companies among others were adjusted from 
the "restricted" category to "allowed" category, and the restriction on equity ratio of foreign 
investment was removed.   
 In addition to stimulation of the development of the mentioned services, could China please 
explain what policies it has adopted to encourage  the liberalization of telecommunications and 
tourism?    
  WT/TPR/M/264/Add.1 
 Page 143 
 
 
  Answer:  With respect to telecommunications industry,  China began to open up offshore call centers 
to foreign investors without restriction on equity ratio of foreign investment on pilot basis in 2010. 
The pilot regions include 21 demonstrative service outsourcing cities include Beijing, Tianjin and 
Shanghai.  
 On 27 June 2012, the Ministry of Industry and Information Technology issued the Implementation 
Opinions on Encouraging and Guiding Private Cap itals to Further Enter the Telecommunications 
Industry (hereinafter referred as "Implementation Opinions").  The Implementation Opinions aim to 
guide private capitals to enter telecommunicati ons industry through multip le ways and actively 
expand the investment channels and particip ation scope of private capitals. Please visit 
www.miit.gov.cn (official website of the Ministry  of Industry and Information Technology) for 
details.   With respect to tourism, currently, China has fully opened up tourism to foreign investors in 
accordance with its WTO commitments.  Therefore, th ere is no issue of liberalization of restrictions 
on tourism.   
Report by China, Chapter II, Section (3) A ccelerating the Transformation of Economic 
Development Pattern (iii) Intensifying effort s for intellectual property rights protection, 
paragraph 31:   the Government of China states that it has carried out enforcement campaigns to 
crack down on infringements and count erfeits.  Paragraph 33 further st resses the 2010 reform of the 
Copyright Law and Regulations on the Customs Protection of Intellectual Property Rights.  
 
 Could China please explain in detail how it reformed the mentioned Law and Regulations 
with a view to attaining the stated objective?    
 
Answer:  With respect to the perfection of the Regulations on the Customs Protection of Intellectual 
Property Rights, in March 2010, the State Council p assed the decision of revising the Regulations on 
Customs Protection of Intellectual Property Rights with following revisions:   
(1) Article 11 is revised as "In case of any change  in respect of an Intellectual Property Right under 
recordation, the holder of the intellectual pr operty right shall go through the procedures of 
modification or cancellation of recordation with the General Administration of Customs within 
30 working days from the date of such change.   
Where the owner of the Intellectual Property Rights fails to go through the procedures of modification 
or cancellation of recordation as required in the pr eceding paragraph, as a result of which the legal 
import or export of others or performance of regulat ory duties in accordance wi th law by the customs, 
the General Administration of Customs may revoke  the relevant recordation pursuant to the 
application by stakeholders concerned or in itiatively revoke the relevant recordation."  
 
(2) The Clause 1 of the Article 23 is revised as "An owner of Intellectual Property Rights may, after 
applying to customs for adoption of protective measur es, apply to the people's court for an order of 
cessation of the infringing act or preservation of  property for the impounded goods suspected of 
infringing upon rights prior to the institution of ac tion in accordance with the Trademark Law of the 
People's Republic of China, the Copyright Law of the People's Republic of China, the Patent Law of 
the People's Republic of China or other relevant laws."  
 (3) Adding Clause 5 to Article 24: "The owne r of Intellectual Property Rights withdraws its 
application for the impounded goods suspected of infringing upon rights before the customs considers 
such impounded goods suspected of infringing upon rights as infringing ones."   WT/TPR/M/264/Add.1 
Page 144 
 
 
  (4) The Clause 3 of Article 27 is revised as "Where  the confiscated goods th at have infringed upon 
Intellectual Property Rights can be used for public welfare, customs shall transfer the goods to the 
relevant public welfare organizations to be used  for public welfare.  Where the owner of the 
Intellectual Property Rights wishes to acquire the goo ds, customs may transfer the goods to the owner 
of the Intellectual Property Rights for compensa tion.  Where confiscated goods that has infringed 
upon Intellectual Property Rights cannot be used for public welfare and the owner of the Intellectual 
Property Rights does not wish to acquire the goods, customs may auction off the goods according to law after removing the infringing characteristics pr ovided that customs shall not allow the imported 
goods with counterfeit trademark to enter commercia l channels only after removing the trademark 
logos on the goods expect under exceptional circumst ances.  Where the in fringing characteristics 
cannot be removed, customs shall destroy the goods."  (5) Article 28 is revised to Article 31 as "Where artic les carried or sent by mail by individuals into or 
out of China exceed the amount for personal use or the reasonable amount and infringe upon the 
Intellectual Property Rights stipulated in Article 2 hereof, the goods shall be disposed of as infringing 
goods."  The revised Regulations of the People’s Republic of  China on the Customs Protection of Intellectual 
Property Rights came into force on 1 April 2010.  
 
With respect to the reform of the Copyright Law,  in 2010, China revised the Copyright Law. As 
provided in the Article 4 of the Copyright Law, "Copyright owners, in exercising their copyright, shall not violate the Constitution or laws or prejudice the public interests. The State exercises supervision 
and administration on the publishi ng and dissemination of the works in accordance with law".  
Meanwhile, the provision on copyright pledge is adde d in Article 26, "In case of  pledge in copyright, 
the pledgor and pledgee shall go through the formalit ies of pledge registration with the administrative 
copyright authorities of the State Council.  The revision further helps China perfect its copyright law system, further improve the level of copyright pr otection and safeguard the economic interests of 
copyright owners.  
 
 In addition to campaigns to crack down on c ounterfeiting and piracy, could China please 
elaborate on the legal and administrative mechanism s introduced to ensure th e effective conduct of 
civil and criminal proceedings involving violations of intellectual property rights within a territory of 
China?     
 Answer:  Currently, China has formulated complete inte llectual property right laws according with the 
obligations provided in the international treaties.   The Patent Law, Copyright Law and Trademark 
Law are three basic intellectual property right laws , the Anti-unfair Competition Law is an important 
supplement, and the Tort Liability Law and th e Anti-Monopoly Law also provide important 
provisions on intellectual property rights.  The Su preme People's Court also issued many judicial 
interpretations to enrich and break down standards on the application of laws .  In addition to above 
mentioned laws passed by the National People's Congress and its Standing Committee, there are some 
administrative laws and regulations issued by the State Council such as the Regulations on the 
Protection of the Right of Communication through Info rmation Network.  With respect to procedural 
law, corresponding provisions of the Civil Procedure Law, Administrative Procedure Law and Criminal Procedure Law are applied to civil, admi nistrative and criminal intellectual property right 
cases respectively.  
 
Report by China, Chapter II, S ection (4) Continuing to Deepen  the Reform Steadfastly (iv) 
Reform of fiscal and taxation system, paragraph 51  refers to the reform of the resource tax system 
and states that the specific resource tax on crude oil and natural gas was "changed to ad valorem  
resource tax."    
  WT/TPR/M/264/Add.1 
 Page 145 
 
 
   Could China please provide further details on the method used to calculate this tax and how 
the reform is consistent with WTO rules?    
 Answer:  The policy statement by the Chinese government, paragraph 51 actually states the 
calculation method of resource tax, namely ad valo rem resource tax is added based on the original 
specific resource tax.  The specific resource tax on crude oil and natural gas was changed to ad 
valorem resource tax, and the resource tax rates a nd amounts of the specific resource tax on rare earth 
and other products were adjusted.  As a universally applicable domestic tax system, China's reform of 
resource tax is consistent with WTO rules and par ticularly the principle of national treatment.   
  
EUROPEAN UNION 
 REPORT BY THE GOVERNMENT 
 
II. ECONOMIC AND TRADE ENVIRONMENT AND MACROECONOMIC POLICY 
DIRECTION    
(3) ACCELERATING THE TRANSFORMATION OF ECONOMIC DEVELOPMENT 
PATTERN   
(i) Implementing the strategy of expanding domestic demand  
 Report by the Government, page 10, para-s 21 and 22  
 
The report by the Government states that "Expa nding domestic demand, particularly consumer 
demand, is essential to long-term steady and robust econom ic development in China.  It is a long-term 
policy that the Chinese Government will adhere to.   //In the meantime, in view of the fact that some 
of the programs introduced in the course of addressi ng the international financial crisis were to be 
phased out, introduction of new policies for promoti on of consumption was unde r study to facilitate 
and benefit people, with the general policy dir ection being green, low carbon, energy saving and 
environment protecting. "      
 
1. Could China inform which new policies for the promotion of consumption were under study and 
which policies did Chinese government choose for introduction?  Could China provide details on 
the permanent mechanism for boosting consumpti on and any specific tools, incentives, programs 
the Chinese government has taken to increase the share of domestic consumption in the Chinese 
GDP?   
 
Answer: The Chinese government attaches great im portance to expanding domestic demand, 
especially consumer demand, and consider it a l ong-term strategy and basic starting point for 
promoting China's economic development.  The Chinese government promotes consumption in the 
following four aspects: enhancing the residents' consuming ability, actively fostering and expanding 
the consumption hot spots, improving consumer expectations, and positively improving consumption 
environment.  The contribution rate of consump tion to economic growth is 51.6% in 2011, 10.1% 
higher over the previous year.  In the future, China will continue improving the policies and measures to promote consumption, 
actively and steadily promote urbanization, implem ent employment priority strategy, deepen the 
income distribution system reform, improve the social security system, create a favourable environment for consumption, so as to enhance cons umption capacity of residents, improve consumer 
expectations of residents, promote the upgrading of  consumption structure, and constantly enhance 
the pulling effect of consum ption to economic growth. 
 WT/TPR/M/264/Add.1 
Page 146 
 
 
  (ii) Accelerating the development of the service sector  
 Report by the Government, page 11, para-s 28-29      
 
The report by the Government acknowledges that th e development of services is a major task in 
China's transformation of the economy and that the development of the services sectors requires more 
arduous efforts.  Under the foreign investment cat alogue some sectors were opened in a number of 
health-related or green sectors. 
 
2. Could China provide an indication as to the inte nded timeline for liberalising services sectors like 
telecommunication, banking, insurance, constructio n, transport, distribution, postal and courier 
services, and professional and legal services?        
 
Answer: China always attaches great importance to development of services industry and takes a 
positive position on liberalization of trade in servic es.  China has made extensive and substantial 
commitments in the sectors of telecommunication, banking, insurance, construction, transport, 
distribution, postal and courier services, and professi onal and legal services.  This year, China further 
opens its insurance market, and pe rmit foreign insurance companies to provide compulsory third party 
liability insurance for motor vehicles.  
China recognizes that the progressive liberaliza tion of trade in services among WTO Members would 
promote development of international trade in servi ces.  However, further liberalization of services 
trade in China, as we understand, is  subject to the DDA negotiations. 
 
(4) CONTINUING TO DEEPEN THE REFORM STEADFASTLY    
(iii) Reform of state-owned enterprises and development of the non-public sector   
 Report by the Government, page 15, para. 48   
 
The report by the Government mentions that beginning  2012 a standard board of Directors has been in 
place in 42 (of the 117) central SOEs.   
 
3. Can China elaborate on initial results that SA SAC has drawn since this reform process was 
started in 2005?  Does China have plans to put in place standard board of Directors in all central 
SOEs, and if so, what is the timing?  Does SASAC intend to put in place external Directors in all 
central SOEs, and if so, what is the timing?  
 
Answer: As of now, the Board of Directors has been in place in 42 pilot central SOEs, the SOE 
scientific decision-making mechanism has been established, the decision-making system and decision-making effectiveness have been standardiz ed and clarified, the decision-making quality has 
improved significantly, and the corporate governance has been further standardized and transparent. It 
is expected that the number of pilot central SOEs will reached 50 by the end of 2012 and most of the 
central enterprises will establish a standardized Board of Directors by the end of 2015.  The 
introduction of external director on Board of Dir ectors should be depended on the enterprises specific 
circumstances, and thus there is no clear timetable on this.   WT/TPR/M/264/Add.1 
 Page 147 
 
 
  III. TRADE AND INVESTMENT DEVELOPMENT AND RELATED POLICIES    
(3) OPTIMISING THE UTILIZATION OF FOREIGN INVESTMENT THROUGH 
FURTHER OPENING UP         
(iv) Caring for and protecting rights and interests of investors      
 Report by the Government, page 24, para. 98        
 
The report by the Government states that all laws and regulations had been amended at the time of 
WTO accession to annul stipulations on compulsory transfer of technology. 
 
4. Can China confirm that no government authority, wh ether central, provincial or local, shall take 
technology transfer as a pre-condition for market access including in the context of examining 
and approving planned investments of foreign operators? 
 
Answer: With regard to the issue of mandatory techno logy transfer, actually, China amended policies 
that are inconsistent with its WTO accession co mmitments and canceled provisions on mandatory 
technology transfer when sorting out laws and re gulations shortly after its WTO accession.  The 
Chinese Government has always clarified that technology cooperation and transfer are voluntary behaviors of enterprises and that it will not take them as preconditions for market access. 
 
REPORT BY THE WTO SECRETARIAT 
 II. TRADE AND INVESTMENT REGIMES  (1) Institutional and legal framework  (i) Transparency 
 
WTO Secretariat's report, pages 11-14 
 
Although significant progress has been made, lack of transparency in implementation of laws and 
regulations by the judiciary and the administrative authorities remains a problem.  Since its last TPR, 
China has taken some steps to improve transparency. 
 
5. Does China consider publishing ex ante or ex post ec onomic evaluations of its introduced policies 
or measures? 
 
Answer:  According to the Government Information Di sclosure Regulations of the People's Republic 
of China and relevant regulations  on audit results announcement issued  by the Audit Office, under the 
premise of not involving national security and secrets, the Audit Office fully discloses the audit results on the implementation of policies or measures.  
WTO Secretariat's report, page 13, para. 13.        
 
The Secretariat's report also states that "All drafts of trade-related administrative regulations and departmental rules that are published for public co mment must provide a comment period of not less 
than 30 days, subject to exceptions.  With some exceptions, regulations and rules enter into force 
30 days after promulgation."       
 
Experience of European operators in  the Chinese market is different:  the average length of time given 
for comment was just 21 days, with the longest being 91 days and the shortest just 8 days.  In contrast, 
within the European Commission, the best practice is to allow 8 weeks for the collection of responses 
to written public consultation.  On occasion, regul ations and circulars issued by the Chinese 
authorities apply retroactively, therefore creating uncertainties on the state of the law at any given 
time.  WT/TPR/M/264/Add.1 
Page 148 
 
 
   
6. Is China considering to further improve the trans parency of its legislative procedures, e.g. by 
expanding the notification period and consultation pro cess with affected parties, as well as 
allowing longer grandfathering periods to adjust to major changes?  
Answer:  China has strictly honoured WTO agreements  and its WTO commitments since its accession 
to WTO, and released all trade-related laws, regul ations and rules at least 30 days prior to their 
enforcement for comments by any individuals, enterprises and other WTO Members.  In addition to 
this commitment, China has also made great effo rts in improving legislation transparency.  Since 
2008, public opinions have been solicited for all dr aft administrative laws and regulations except 
those to be kept secret in accordance with law on the http://www.chinalaw.gov.cn and public opinions 
have also been solicited for all department dr aft regulations on these departments websites or 
http://www.chinalaw.gov.cn.  All parties including foreign enterprises and individuals can propose 
opinions and suggestions.  Since August 2011, ap art from exceptional cases, the drafts of all 
economic and trade-related administ rative regulations and departmental rules have been made public 
at www.chinalaw.gov.cn for comments.  There is more  than 30 days for the public to make comments, 
apart from individual cases of urgency.  Thanks to these two measures, the public has sufficient time 
to understand and become familiar with the cont ents of the laws and regulations and submit 
comments.  (ii) Central-provincial relationships  WTO Secretariat's report, page 15, para. 20   
 
The Secretariat's report describes the division of responsibilities between provinces and central 
government and the impact on SOE mergers:  " //On 28 August 2010, the State Council issued a 
Circular of Opinions on Promotion of Enterpri ses Restructuring through Mergers and Acquisitions 
(State Council Circular 2010/27), requiring local aut horities to abolish local regulations that hinder 
cross-province investment activities, in partic ular cross-provincial mergers and acquisitions. 
 7. Could China provide information on the impact of  the referred measure on the level of mergers 
and acquisitions in China?   
 
Answer: Mergers and acquisitions activities of all Chinese enterprises, including state-owned 
enterprises, are carried out in accordance with Chinese laws and market principles. 
 (3) TRADE AGREEMENTS AND ARRANGEMENTS (iii) Unilateral preferences   WTO Secretariat's report, page 18, para. 37   
 The Secretariat's report informs that "As of 1 Janua ry 2011, unilateral preferential tariffs on 60% of 
products (in terms of national tariff lines) were o ffered to 36 least developed countries (LDCs).  On 
1 January 2012, Niger and Somalia were offered similar treatment. According to the authorities, about 
90% of tariffs (in terms of national tariff lines)  on imports from Lao PDR, Cambodia, and Myanmar 
have been eliminated unilaterally since 1 Janua ry 2010 under the China-ASEAN FTA framework.  
During the Eighth WTO Ministerial Conference, China indicated that it would reduce tariffs to zero 
on 97% of imports (in terms of national tariff lines) from LDCs that have diplomatic ties with China."      
 
8. Does China have any plans to extend its DFQF to all LDCs?  Could China provide information 
on the implementation of its commitment made in November 2010 to extend DFQF to 97% of 
imports to all LDCs?  Can China share the list of products that will not be eligible under China's 
DFQF regime?    WT/TPR/M/264/Add.1 
 Page 149 
 
 
   
Answer: China plans to offer zero tariff treatment on 97% tariff lines from least developed countries 
(LDC) that have diplomatic ties with China unde r the South-South Cooperation Framework.  Since 
July 2010, China has offered zero tariff treatment  to 60% tariff lines from LDCs and will gradually 
extend to 97%.  Right now, relevant authorities are considering the exception list.   
(4) FOREIGN INVESTMENT REGIME  
 
WTO Secretariat's report, pages 18, 23       
 
A New Social Insurance Law was approved in Ch ina on 28 October, 2010 and came into effect on 
1
 July 2011.  It would affect the cost of operation of foreign companies in China.  This new Law is 
generally welcome, however, in the view of the EU , there is a lack of detailed clarification on 
contribution requirements, range of coverage, possi bility of exception and exit from China for foreign 
employees. 
 
9. Does China consider granting adequate interim ex emptions until the effectiveness of mandatory 
insurance in order to enable companies and fo reigners to prepare and countries to negotiate 
bilateral agreements? 
 
Answer: To protect the social security rights and inte rests of foreigners employed in China, 
Article 97 of the Social Insurance Law of the Pe ople's Republic of China provides that foreigners 
employed in China should participate in social insu rance scheme with reference to the provisions of 
the Social Insurance Law.  The law was announced on 28 Octobe r 2010 and became effective on 
1 July 2011.  Before the entry into force of the So cial Insurance Law, we set aside adequate time for 
companies and foreigners employed in China to  prepare for that, and the issue on additional 
temporary exemption will no longer be considered. 
 To solve the problem of double payment of social  insurance premiums, the internationally accepted 
approach is to waive the insurance obligations of  the insured in a country through the signing of a 
bilateral social security agreement.  China and Germany signed the soci al insurance agreement 
between the People's Republic of China and the Fe deral Republic of Germany in 2001 and signed the 
agreement on interim measures for mutual exemption of pension insurance contributions with ROK in 
2003.  Both agreements are implem ented smoothly.  After the introduction of the Social Insurance 
Law, over a dozen countries sent TPNs to the Ch inese government, requesting negotiations on the 
signing of a bilateral social security agreement.  At  present, China has started bilateral social security 
agreement negotiations with Japan, Korea, France and other countries. 
 The EU welcomes a further opening of China toward s foreign investment, however the new catalogue 
for the Guidance of Foreign Investment Industries has not fully met expectations.   
The EU also does not share the vi ew of the Chinese government that there has been no technology-
transfer requirements imposed on foreign investment projects.  The EU considers ownership limits for 
foreign investors and the requireme nt to cooperate with a local partner as a means to enforce 
technology transfer.  The same is true for obliga tions to cooperate with Chinese design institutes.  
Also, regulations in the new-energy car manufacturi ng require technology transfer to a large extent.  
The EU thinks that the requirement for foreign manu facturers of new energy vehicles to master a core 
technology cannot be justified on the grounds of safety but must also be considered as a means to enforce technology transfer.   
10. Could China elaborate on its position on these referred issues and explain why it does not 
consider that these are technology transfer requirements?   
 WT/TPR/M/264/Add.1 
Page 150 
 
 
  Answer: With regard to the issue of mandatory techno logy transfer, actually, China amended policies 
that are inconsistent with its WTO accession commitments and cancelled provisions on mandatory technology transfer when sorting out laws and re gulations shortly after its WTO accession.  The 
Chinese Government has always clarified that technology cooperation and transfer are voluntary 
behaviors of enterprises and that it will not take them as preconditions for market access. 
 With regard to the issue that China requires vendor s concerned to consider core technology in new 
energy vehicles and other aspects, we believe that to master core technology doesn't mean technology 
transfer.  To master core technology is not necessar ily linked to technology transfer from one party to 
the other party of a joint venture.  With regard to the issue of new energy vehicles, China has not 
required the foreign side to transfer technolog y to the Chinese side in the actual practices. 
 
The seed sector is seen by China as strategic, because of food security and food safety considerations.  
Two important measures are 1) the level of required investments (investments by small companies are 
discouraged) and 2) the required majority stake in jo int ventures (JVs).  The latter is a major problem.  
When renewing business licenses, joint ventures shoul d have Chinese majority stake, which gives 
Chinese partners full control over foreign inv estors key asset: the genetic basic material.  
 
11. Could China indicate why it considers these lim itations justified and how it ensures that key 
assets of investors in this sector are protected?         
 
Answer:  The Chinese government has been encouragin g the introduction of foreign advanced 
technology and fine varieties & res ources, and welcoming foreign enterprises to invest in China's seed 
sector.  China imported 19,000 tons of crop seeds in  2010 and this number rose to 22,000 tons in 
2011, an increase of 13.6%. There are 31 foreign- invested crop seed ente rprises in China. 
 
The Chinese government protects the intellectual property by raising the barrier to entry, improving the requirement on the registered capital, and st andardizing enterprise behaviours.  Practice has 
proved that the foreign-invested crop seed enterp rises in China and Chinese enterprises achieve 
mutual benefit, common development and a win-win outcome through cooperation. 
 
The requirements on the size of seed enterprise are in line with the actual needs of the development of 
China's seed sector.  China is a developing coun try.  The domestic seed enterprises are small, 
scattered, weak and at different levels of development, so it is necessary to raise the market access threshold in terms of enterprise size and tech nical resources, so as to promote the healthy 
development of the domestic seed sector and protect farmers' interests. 
 
(i) Recent developments in FDI policy  
 WTO Secretariat's report, page 19, para. 40   
 
The Secretariat's report briefly summarizes the re vised Catalogue for the Guidance of Foreign 
Investment Industries, which entered into force on 30 January 2012.   
12. Could China indicate what other sectors are expecte d to be liberalized (rem oval of joint venture 
requirements, removal of equity caps, lifting secto rs out of the prohibited section etc.) in the 
current Five-Year Plan period? 
 
Answer: China will implement a more proactive strategy  of opening up, and con tinuously open wider 
to the outside world.  We will timely revise the Catalogue for the Guidance of Foreign Investment 
Industries and actively guide the direction of fo reign investment based on the needs of economic 
development and opening up.  Opening wider to the out side world is always one of the key principles 
each time when we revise the Catalogue.  WT/TPR/M/264/Add.1 
 Page 151 
 
 
   
WTO Secretariat's report, page 19, para. 41    
 The Secretariat's report notes that the reclassifica tion of certain sectors as encouraged in accordance 
with the State Councils Guiding Opinions on Cent ral and Western Regions Receipt of Industrial 
Transfers will be reflected in the next revision of  the Catalogue of Advantaged Industries for Foreign 
Investment in Central-Western China.  
13.  Could China indicate when such a revision will be  completed, as well as which other sectors will 
be included?  As was the case with the Ca talogue for the Guidance of Foreign Investment 
Industries, will China open up to a 30-days cons ultation before a final draft is produced?   
 
Answer:  According to the requirements in the Opini ons of the State Council on Further Improving 
the Utilization of Foreign Investment (Guo Fa [ 2010] No. 9), the National Development and Reform 
Commission, the Ministry of Commerce and other re levant departments are revising the Catalogue of 
Advantaged Industries for Foreign Investment in Ce ntral-Western China.  The projects listed in the 
catalog will enjoy the preferential policies for encourag ed foreign investment projects.  The revision 
will be completed this year. It will further refl ect the comparative advant ages of the central and 
western regions, and play an active role in prom oting foreign investment in central and western 
regions. 
 
(ii) Regulatory framework  WTO Secretariat's report, page xi, para. 14 and page 20 para. 45   
 In May 2010 China's State Council set out policies to encourage investment in sectors dominated by 
SOEs but this is not applied to foreign investment .  In addition the report notes that foreign investors 
may also be allowed to own some shares in SOEs in certain sectors.   
14. Could China clarify whether this means that it does not want to encourage foreign direct 
investment into areas dominated by SOEs?  In which ways does China try to encourage private 
(Chinese) investment in SOEs?  Are there financ ial incentives for examp le or other flanking 
measures?  Which sectors does this relate to?  
 
Answer:  Foreign investment in China's industry is main ly directed by the Catalogue for the Guidance 
of Foreign Investment Industries. The areas of foreig n investment and the equity ratio are set based on 
industry type rather than business type in the catalogue, where there is no special provision on the state-owned enterprises.  
III. TRADE POLICIES AND PRACTICES BY MEASURE      
(1) MEASURES DIRECTLY AFFECTING IMPORTS        
(i) Customs procedures, valuation, and rules of origin      
(c) Customs valuation  
 
The Secretariat's report indicated that the customs va lue of 99% of China's imports was determined on 
basis of the transition value.  However in some  cases the Chinese customs authorities seem to be 
using reference prices for instance for the imports of wine, or in new plans regulating the import by 
Chinese individuals importing luxury products.  
15. Can China inform if lists with reference prices will be made public?       
 WT/TPR/M/264/Add.1 
Page 152 
 
 
  Answer: China Customs reviews and determines the cu stoms value of imported goods based on the 
transaction price, in accordance with the provisions of  the WTO Valuation Agreement.  It does not set 
the reference price, and there is no provision requi ring taxing the goods based on the reference price. 
 (d) Rules of origin   WTO Secretariat's report, page 26, para. 13        
 The Secretariat's report describes rules of origin applied by China.    
 
16. Can China confirm that the presentation of a non- preferential certificate of origin is not required 
at importation?  
 
Answer:  According to Article 14 of the Regulation of  the People's Republic of China on Origin of 
Import and Export Goods, the Customs has the right to require the consignee of the imported goods to 
submit the certificate of origin of the imported goods  and review it accordingly.  If necessary, it may 
request the relevant agencies of the exporting country (region) to verify origin of the goods. " 
 
(vii) Standards and other technical requirements 
(a) Standards and technical regulations      
 WTO Secretariat's report, pages 45-48 
 
The EU welcomes the improvements in the transpar ency of China's regulatory process, including the 
increased number of public calls for comments.  Ho wever, as noted during China's last Transitional 
Review Mechanism (TRM), these practices are st ill uneven, and their appl ication depends on the 
regulatory authority in charge.  There are many  instances where mandatory requirements are still 
enforced without prior stakeholder consultation or WT O notification, or even publication of the rules 
in question.  The same situation often occurs when voluntary standards are made mandatory (for 
instance, through their incorporation in a mandatory  conformity assessment scheme such as the CCC).   
A regulatory area where significant concerns in this regard still exist is Information and 
Communication Technology (ICT), under the regulatory authority of the Ministry of Industry and Information Technology (MIIT).   
17. What steps is China taking in order to ensure that all its authorities in  charge of developing 
mandatory requirements (including notably the MIIT) consistently provide adequate public 
consultation opportunities at a sufficiently early stage on all new draft laws and administrative 
measures, and allow a reasonable period for comments?  
 
Answer: Please refer to the answer of Question 6. 
 
18. Could China explain what principles and proced ures govern public consultation of interested 
parties according to existing regulations? Are steps being taken to harmonise the currently 
differing practices of Chinese regulatory authoriti es and provide a common set of rules in this 
regard?     
 
Answer: Article 35 of the Legislation Law of the People's Republic of China stipulates that "with 
regard to a legislative bill placed on the agenda of  a Standing Committee meeting, it may, by decision 
of the Council of Chairmen, be published for solic iting opinions. Opinions gathered from the organs, 
organizations and citizens shall be sent to the working offices of the Standing Committee."  The 
Ordinance concerning the Procedures for the Form ulation of Administrative Regulations and the 
Ordinance concerning the Procedures for the Formulation of Government Rules provide that, except 
those involving national security, foreign exchange ra tes, monetary policy determination, and those of  WT/TPR/M/264/Add.1 
 Page 153 
 
 
  which the implementation will be hindered if they are not put into effect immediately after the 
announcement, the administrative regulations and go vernment rules should be implemented at least 
30 days after the publication and this period of time is for public comments.  The Ordinance 
concerning the Procedures for the Formulation of Administrative Regulations also provides that the 
draft of important administrative regulations for review should be made public for comments upon the 
approval of the State Council.  The "interim me asures for seeking public comments on draft laws and 
regulations" issued by the Legislative Affairs O ffice of the State Council provides that the draft 
administrative regulations should be made public for comments at www.chinalaw.gov.cn in principle, 
and the public comment period should be generally no less than 30 days, except individual cases of 
urgency and other exceptional cases.  The "noti ce on several issues for further increasing public 
participation in government legislative work" a nd the "notice on several issues for making draft 
government rules public for comments at www.chinal aw.gov.cn" issued by the Legislative Affairs 
Office of the State Council State Council include specific provisions on making the draft government rules public for comments.  Since 2008, except tho se kept confidential according to the laws, all the 
draft administrative regulations have been made  public for comments at www.chinalaw.gov.cn and 
the draft government rules have been made pub lic for comments at the websites of government 
departments or www.chinalaw.gov.cn.  
19. Could China explain existing mechanisms through which interested parties can participate in the 
development of technical regulations (including mandatory standards) and c onformity assessment 
procedures? Do domestic and foreign-owned co mpanies established in China enjoy identical 
rights in this respect?  Can non-Chinese nationals participate in expert groups, task forces or the 
like set up by the Chinese authorities to assist the regulatory process?  What opportunities are 
available for foreign stakeholders (i.e. not establ ished in China) to provide input into the 
regulatory process?  
 
Answer: Any working unit and individual can propose to formulate a standard.  The drafting group 
consists of interested parties, and the draft will be  circulated to solicit opinions from working units in 
production, marketing, application, R&D, and tes ting, which will normally last for two months.  A 
technical committee of interested parties will review  the standard. If the standard is a compulsory 
national standard, it will be put online again to  solicit public opinions before it is published. 
Compulsory national standards affecting intern ational trade will be notified to the WTO for 
international comments. 
 
Relevant interested parties can participate in 3C technical committees to formulate rules and 
procedures for conformity assessment.  3C techni cal committees are open to all organization and 
individuals, domestic organizations  and foreign-invested organizations enjoy the same right and 
treatment. Rules of 3C Technical Committees (CNCA No. 50, 2009) can be found at the website of 
CNCA 
 
20. In the EU's experience, providing a single web por tal for all public consultations has significantly 
enhanced the ability of stakeholders, and of information about on-going or planned public 
consultations and stakehold ers' participation thereto?  
 
Answer: The SAC website is such a single web portal on standardisation, and information about 
standard proposal, approval, and publication can be found.  Any working unit or individual can 
comment freely on standard formulation and revision .  SAC has appointed certain persons to collect 
opinions and reply. 
 
21. What steps is China taking in order to ex pand the systematic use of Regulatory Impact 
Assessments (RIAs) by all its regulatory authoritie s? Is there an obligatio n to carry out RIAs for 
measures that may have a significant impact on trade?        
 WT/TPR/M/264/Add.1 
Page 154 
 
 
  Answer: China is still in coordination with competent au thorities to provide responses to the question. 
 
22. Could China provide information on the percen tage of technical regulations or mandatory 
standards that have been subject to a call for pub lic comments and the percentage of those subject 
to a Regulatory Impact Assessment prior to their adoption?    
 
Answer: For compulsory national standards, public comme nts can be made at any stage of the whole 
formulation process.  The standards to be formul ated will be put online for any working unit and 
individual to comment.  And the draft will be circ ulated to solicit opinions from working units in 
production, marketing, application, R&D, and t esting, which will normally last for two months. 
Compulsory national standards affecting intern ational trade will be notified to the WTO for 
international comments. 
 
23. Could China explain what internal policy c oordination mechanisms exist among regulators and 
standardisation bodies to ensure that technical regulations (including mandatory standards) and 
conformity assessment procedures are consiste nt with the WTO TBT Agreement, including its 
transparency requirements, and avoid the existence of  duplicative or overlapping requirements?    
   
Answer: The formulation procedure of compulsory national standards involves large amounts of 
internal coordination mechanisms , like inter-ministerial standa rd proposal joint meetings, 
coordinating meetings between authorities and te chnical committees, standard proposal coordinating 
meetings within authorities, etc. all these mechan isms are to ensure openness, fairness, justice, 
transparency and conformity. 
 
24. Is there any obligation for regulators in China to  review at regular intervals existing regulations 
to assess whether they have actually met their obj ectives and whether they are still justified or 
should be amended or simplified in light of changed circumstances, including technological 
developments? 
 
Answer: National standards must be reviewed five year s after its publication to  determine whether it 
is still effective, or whether it needs revising or annulling. 
 
WTO Secretariat's report, page 47, para-s 83-92        
 
The Secretariat's report describes China's standardiz ation system.  The EU notes in particular (in 
para. 88) that, out of 489 technical committees in charge of developing national standards, 15% 
included representatives of foreign companies.  While the EU is pleased with the significant 
improvements in recent years concerning the partic ipation of foreign companies in standard-setting 
work, we consider that significant efforts still need to be made in this regard.  
 
25. Can China provide more information as to th e areas of standardization covered by the ca. 
70 technical committees which include representa tives of foreign companies?  What steps are 
being taken in order to further increase th e participation of foreign and foreign-invested 
companies in standardization work? 
 
Answer: Statistics show that the ratio of representativ es from foreign and foreign invested companies 
(FFIEs) in TCs has increased to 25%, and these TCs cover more than 120 standardization fields 
including steel, cement, coal, energy, agricultura l machinery, industrial and mining machinery, 
construction materials, electric instrument and  me ter, electronic products, lab equipment and devices, 
medical devices, food and testing methods, biologi cal materials and testing, telecommunications, 
logistics, and sports.  Besides, there are a large nu mber of foreign and foreign investment enterprises 
(FFIEs) participate in China's standardization activ ities via observer membership or seminars, forums, 
comments on drafts.  No restrictions is found in Rules on Management of National Standardization  WT/TPR/M/264/Add.1 
 Page 155 
 
 
  Technical Committees and Administration on Manageme nt of National Standards, and China does not 
see the necessity to adopt measures to increase partic ipation of a particular interested group, which go 
against fairness and the law of standardization.  
For certain sectors, the participation of foreign and foreign-invested companies in standardization 
work is severely restricted, even though the standards in question are for purely commercial 
applications (i.e. not relevant fo r national security).  A worrisome example in this regard is the 
"National Information Security Technology St andardization Committee" (TC260), which does not 
allow any kind of participation of foreign-owned of foreign-invested companies.  As many of these 
standards are later rendered mandatory, foreign compan ies are, in fact, deprived of opportunities to 
provide meaningful input in the regulatory process at the standards drafting stage.        
26.  Can China explain why for some sectors (e.g . ICT), the participation of foreign and foreign-
invested companies is still constrained to observer status, while for others (e.g. information 
security) no involvement is allowed?  What st eps are being taken to increase the level of 
participation of foreign companies in informati on security-related standardization work, including 
TC 260?  
 
Answer: The possibility for FFIEs to participate in certain TCs depends on the actual demand and 
their representativeness.  One the one hand, FFIEs  are only one group among all the enterprises and 
FFIEs represent many economies;  on the other ha nd, the number of P membership is limited. 
Therefore, it is natural for some FFIEs to be de nied P membership.  FFIEs can become members or 
comment on drafts or participate in seminars, forums, and press conferences.  The Secretariat's report describes in detail the activities carried out by the Standardization 
Administration of China (SAC) in charge of de veloping national standa rds, but contains little 
information on the procedures for the development of  other standards (e.g. trade/industrial or local 
standards).  Indeed, while for national standards the process of development is quite transparent, with 
drafts normally posted on the SAC website for pub lic consultation, the de velopment of industrial 
standards is much more opaque, and practices va ry significantly across sectors.  Currently, over 
60 entities appear to have competence to draw up indus trial standards in China, many of which will 
become mandatory.  Furthermore, many of these mandatory standards are subject to very short 
transitional periods.   
27. What are the measures being taken by the Chinese government to enhance the systematic 
transparency of the industrial standard-setting pro cess (e.g. public consultations, taking comments 
received into account, publishing work programmes, etc.)? 
 
Answer: The formulation process of industrial standa rds is mainly based on that of national 
standards, but it is prioritizing and open for public opinions to ensu re transparency and coordination 
 
28. Can China provide statistics on the number of industrial standards adopted in the period under 
review?  How many of these standards have been subj ect to a public consultation at draft stage, 
and what has been the average period allowed for the submission of comments?  What has been, 
on average, the period of time between their adoption and implementation?  
 
Answer:  Currently, SAC is not involved in the subm itting procedure and no statistics is available. 
 
29. Could China clarify how many of the organizatio ns with competence to draw up industrial 
standards have adopted the Code of Good Practice in Annex 3 to the TBT Agreement?    
 
Answer:  Currently, SAC is not involved in the subm itting procedure and no statistics is available. 
 WT/TPR/M/264/Add.1 
Page 156 
 
 
  WTO Secretariat's report, page 48, para. 92 
 
The Secretariat's report states that "As of end 200 6, 46% of the 21,410 national standards had been 
adopted from international standards and advanced foreign standards.  Of these, 5,064 were from the 
ISO, 2,075 from the IEC, 314 from ISO/IEC, 50 from ITU, and 2,428 from other international standard organizations.  There are no data on the numb er of trade or local standards that include the 
contents of the standards formulated by  international standard organizations." 
 
The EU notes that China's 11
th Five Year Plan set a target of 85% alignment to international standards 
by 2010 the subsequent 12th Five Year Plan reinforced this co mmitment.  Nevertheless, many Chinese 
standards still deviate from international standard s without adequate demonstration that those 
standards were inadequate or ineffective for the objectives pursued.  Furthermore, in several sectors, 
numerous home-grown standards have  been developed over the years,  which feature unique Chinese 
technological solutions rather than working within the international standard-setting system.  Again 
here, the ICT and information security sectors are a prime example. 
 
30. Can China provide more recent statistics on the p ercentage of national standards aligned to 
international standards?  How are these statisti cs compiled  for instance, does a partial adoption 
of an international standard, or the addition of Chinese-specific  features to an international 
standard are still considered as 'alignment' to the international standard in question?    
 
Answer: No recent statistics is available. 
 
31. Could China provide an update with  regard to its progress in aligni ng its domestic (national, trade 
and local) standards to international standards?  What measures will the Chinese Government 
take to make progress towards th e 85% target set in the 12th Five Year Plan?      
 
Answer:  No recent statistics is available 
 
32. The Secretariat's report indicates that there is no data on the number of trade standards based on 
international standards.  The EU would therefore like to invite China to make such statistics 
available as soon as possible, and no later than the time of the next WTO TPR.  
 
Answer: Currently, SAC is not involved in the submitti ng procedure and no statistics is available. 
 
33. The EU would like to take this opportunity to remi nd China of the obligations enshrined in Article 
2.4 of the TBT Agreement and Article F of the C ode of Good Practice in Annex 3 of the TBT 
Agreement, and would like to enquire what steps are being taken by China to ensure that the 
organizations in charge of developing industria l standards comply with these obligations?  
 
Answer: Currently, SAC is not involved in the submitti ng procedure and no statistics is available. 
 
34. Can China explain how its policy of systematic ally developing Chinese-specific standards in the 
fields of ICT and information security, even where in ternational standards exist, comply with its 
obligations under the TBT Agreement?  If it is China' s assertion that the international standards in 
questions are inappropriate or ineffective for th e objectives pursued, can China clarify what these 
objectives are, and can it provide scientific and technical evidence to support this assertion? 
 
Answer:  China is still in coordination with competent authorities in order to provide responses to the 
question. 
  WT/TPR/M/264/Add.1 
 Page 157 
 
 
  (b) Product certification      
 WTO Secretariat's report, pages 48-49, para-s 94-97      
 
The Secretariat's report describes the China Compulso ry Certification (CCC) system.  The EU would 
like to take this opportunity to once again stress th e need for a comprehensive review of the CCC, in 
order to replace the current 'one size fits all' a pproach with one based on c onsideration of the actual 
levels of risk to health and safety posed by th e very diverse product groups coming under the CCC.  
At the time of the previous TPR, China explaine d that its current stage of economic and social 
development was still not sufficiently advanced as to  introduce a mechanism of Suppliers Declaration 
of Conformity (SDoC)  however, "relevant research" was being carried out.  
35. Could China provide more detailed information on  the "relevant research" carried out in this 
regard, and any conclusions thereof?  Furthermo re, could China give an update with regard to its 
reflection process on the possibility to introduce less burdensome procedures, including SDoC for 
lower risk products, as an alternative to th e current compulsory third party certification 
combining both product testing with factory inspections?   
 
Answer: Research on risk analysis has been carried  out for products under 3C Catalogue.  As 
different products vary in risks due to design, pr oduction, consumption and the development of that 
particular industry, 3
rd party certification shall vary in control procedures as well.  CNCA is collecting 
the results of risk analysis fro m the research and has initially set up a product risk classification 
system.  A reasonable and effective diversified ce rtification system will be established, based on 
different risk categories and emphasizing confor mity and effectiveness in after-certification 
supervision.  
 
CNCA will simplify the certification modes and improve  efficiency for low-risk products to maintain 
quality management and meet deve lopment demand.  Meanwhile, for the same product, CNCA will 
design different certification modes and procedur es based on the creditability and quality control 
capacity of those enterprises to achieve classified management.  
 
Details will be published and im plemented after completion. 
 The CCC scheme currently combines mandatory product testing and manufacturer's quality 
management system (QMS) verifications, thus co mprising both product type testing and factory 
inspections.  
 
36. In those areas where, due to risk considerations , China considers it necessary to maintain a third-
party conformity assessment pr ocedure, is China considering am ending the CCC scheme in order 
to allow manufacturers to choo se between QMS and product verific ation modules, at least for 
certain categories of products? 
 
Answer:  CNCA will simplify the certification modes and im prove efficiency for low-risk products to 
maintain quality management and meet developm ent demand.  Meanwhile, for the same product, 
CNCA will design different certification modes a nd procedures based on the creditability and quality 
control capacity of those enterprises to achieve cla ssified management.  Details will be published and 
implemented after completion. 
 
37. Obtaining CCC certification is a lengthy and costly process.  Factory inspections in particular are 
the major cost item for foreign m anufacturers located outside China.  In the absence of sufficient 
trade volumes, the costs of CCC certification can not simply be absorbed by manufacturers and de 
facto prevent many companies, especially SMEs, fr om doing business in China.  What steps has 
China taken and / or is considering to reduce the costs associated with CCC certification?  WT/TPR/M/264/Add.1 
Page 158 
 
 
   
Answer: 3C system is a market access system supervised by government agencies and operated by 
3rd party technical organizations that review and ce rtify products.  The main technical procedure 
includes type test, initial factory inspection and after-cer tification supervision.  Type test refers to the 
test to prove that standards and technical requirement s are met, after which a test report will be issued. 
Initial factory inspection refers to site inspections  of how to ensure quality and product conformity 
conducted by certifying bodies.  After-certification supervision is the annual supervision over 
enterprises and products by certifying bodies, in cluding sample tests and follow-up inspections. 
 
CNCA will consider appropriate adjustment for certain products, and for low-risk products and 
credible enterprises, initial factory inspections may involve fewer procedures to reduce costs and 
improve efficiency.   Rules on Management of Compulsory Certifi cation stipulate that, generally speaking, CCC 
Certification is issued within 90 days since acceptance.  In addition, 3C-related fees are much less 
than other similar international certifications.  
 
China abide by WTO/TBT Agreement and Regulati ons on Certification and Accreditation of PRC, 
and China is actively promoting and allowing mutual  recognition in international product testing and 
factory inspection within the framework of multi lateral or bilateral MRAs.  China has signed 
consignment agreements with 19 overseas certifying  bodies (located in Europe, America, Japan and 
other economies) for follow-up inspections over f actories abroad. CNCA accepts the inspection 
reports and results of these bodies, which further saves time and costs. 
 
38. In the 2010 TPR, China stated that ISO 9001-cer tified companies could not be exempted from the 
factory inspection requirements because the sc ope of the factory inspection under the CCC 
concerned additional aspects relating to the conf ormity between the manufactured products and 
the certified products.  Given that ISO 9001 does in deed specify requirements for QMS ensuring 
the manufacturer's ability to consistently provide products that meet certain requirements, in what 
respects does China consider that a manufacturer' s quality management system certified compliant 
with ISO 9001 is not sufficient to guarantee the conformity between the manufactured products 
and the certified products?     
 
Answer:  3C factory inspection focuses on enterprises  quality assurance capacity to consistently 
produce 3C-compliant products and c onformity of the final product (including product structure and 
key components), which is different from ISO 9001 cer tification, as the latter involves no conformity 
with 3C-certified products at all.  Currently, only domestic, state-owned certificati on bodies and laboratories have been approved by 
CNCA to perform testing and initial factory inspec tions under the CCC.  Only a limited number of 
foreign certification bodies can perform follow-up factory inspections abroad based on specific 
arrangements with CNCA.  
 
39. Will China enable foreign commercially indepe ndent testing laboratories and certification bodies 
to engage in testing under CCC and to conduct initia l factory inspections for CCC abroad in order 
to facilitate and expand trade in bot h directions?(See also Question 37) 
 
Answer: At present, China cannot designate overseas labs  as 3C-designated labs by Chinese laws and 
regulations, taking into account of difficulties in tr acing responsibilities and foll owing practices in the 
EU.  EU labs have been widely  participating in 3C certificati on via multilateral/bilateral channels. 
 
The EU notes that the Secretariat's report, while  providing an outline of the CCC scheme, does not 
include information on any other product approval sch emes applicable in China.  In some cases,  WT/TPR/M/264/Add.1 
 Page 159 
 
 
  however, several regulatory authorities exercise c oncurrent regulatory powers over the same product 
and with the same objectives, thereby leading to  a situation where a product already tested and 
certified by one regulatory body needs to obtain a certif ication from another.  Examples in this regard 
can be found in the information security, medical de vices and motor vehicles sectors, among others.     
 
40. What measures has China put in place, or is pl anning to take, in order to avoid duplication of 
conformity assessment procedures for the same products? 
 Answer:  Information security certification is voluntary, not a market access prerequisite.  No 
duplication is involved between information secu rity certification and other certifications.  
 For duplication in medical devices, AQSIQ and SFDA has jointly issued two public notices in 2006 
and 2008, in which commitment of one test, one  factory inspection and one fee for 8 imported 
medical devices is made.  In 2009, CNCA publishe d another notice to designate certain medical-
device labs as 3C labs, through wh ich testing resources in certification and registration can be shared, 
and one test is really achieved.  Dupli cation in medical devices has been resolved. 
 No duplication exists in vehicles and imported vehicles can go for customs clearance directly with 
effective 3C certificate. 
 
As already explained to China bilaterally and in th e TBT Committee, the EU is  concerned that China's 
requirements for conformity assessment bodies (CABs) (see notification G/TBT/N/CHN/798) extend also to foreign CABs approved by foreign re gulators, and performing mandatory conformity 
assessment on the territory of China, at the request  of Chinese exporting manufacturers, to attest the 
compliance of Chinese products with the requirements of the foreign country in question as a 
consequence, a foreign CAB can only undertake such  conformity assessment activities in China if it 
has a subsidiary in China.   
41.  Could China explain why it considers necessary to regulate CABs that perform conformity 
assessment activities required by another country,  and which are already approved by the 
authorities of that country?  
 
Answer:  China is still in coordination with competent authorities in order to provide responses to the 
question.   
42.  What steps is China taking to ensure that product certification pro cedures safeguard IPR and, 
more generally, afford adequate protection to the legitimate commercial interests of the applicant 
companies as required by Article 5.2.4 of the TBT Agreement, particularly in the IT sector?  
 
Answer:  All the information required by certifying bodies and testing labs is only for certification and 
testing, and leaking to a 3
rd party is forbidden. Certifying bodies and testing labs can sign 
confidentiality agreements upon request.  Up to now, China has received no comp laint in disclosure of 
commercial secrets  During the last TPR, China informed that th e Office of State Commercial Cryptography 
Administration (OSCCA) 1999 Regulation on Comme rcial Encryption was still under amendment. 
Furthermore, China provided assurances that its WTO transparency obligations in this regard would 
be honoured in due course.  The EU is grateful fo r China's confirmation in this regard however, it 
would like to stress that a WTO TBT notification has to be submitted at an early appropriate stage, 
while the text is in draft form and can still be  changed to take into account comments of WTO 
Members.  In this context, the mere publication of  a final text by China's State Council Legislative 
Office just before the adoption of the Regulation would not be sufficient.   
 WT/TPR/M/264/Add.1 
Page 160 
 
 
  43.  Could China provide an update on the revision of the OSCCA 1999 Regulation? Furthermore, 
can China commit to ensure that a public cons ultation and TBT notification on the draft revised 
regulation will take place at an early draft stage , while comments made can still be taken into 
account? 
 
Answer:  The Regulation on Commercial Encryption Produc ts has been listed in the 2012 Legislation 
Plan of the State Council.  Currently the Regulati on is being revised in line with Chinese Legislation 
Law and Rules on Formulation of Administrative Laws .  Opinions from various stakeholders will be 
widely solicited and due consideration w ill be given to publicity and transparency. 
 The EU would like to reiterate its strong concerns  with regard to China's Multi Level Protection 
Scheme (MLPS), which is being gradually impl emented and impacts on an increasing number of 
commercial sectors, not sensitive for national security  (e.g. banking, public utilities, transportation).  
In its replies in the previous TPR, China explaine d that the organizations using information systems 
have to determine their level of protection accordin g to the "importance" of the information system. 
Furthermore, the factors for determining the MLPS le vel of an information system were "objective", 
and unrelated with enterprise ownership.    
44.  Could China provide an update on MLPS implem entation? In particular, how many information 
systems have so far been assessed according to MLPS criteria, how many of those have been 
classified as 'critical infrastructure' (level 3 and above), and which sectors they belong to?  
 
Answer:  China is still in coordination with competent authorities in order to provide responses to the 
question.  
 
45.  Could China explain further what is meant with  the "importance" of the information system?  
 
Answer:  China is still in coordination with competent authorities in order to provide responses to the 
question. 
 
46.  If the answer to the above impli es that the classification of the information system depends on its 
importance to national security, can China provid e a detailed outline of the reasons for which 
information systems in sec tors such as banking (e.g. retail banki ng payment systems, debit cards, 
etc.), public utilities (e.g. energy or public transpor t companies, including applications such as 
subscribers' electronic cards), education (e.g. uni versities) or health (e.g. hospitals) would be 
considered as national-security sensitive?  
 
Answer:  China is still in coordination with competent authorities in order to provide responses to the 
question.   
47. In case this does not relate to national security, can China explain how the MLPS requirements for 
systems classified in level 3 and above (notably the requirement for Chinese IPR and product 
development/manufacture by a Chinese entity) are consistent with China's WTO obligations, 
notably GATT Article III and Article 2.1 of the TBT Agreement? 
 
Answer: The core of the Regulation on Classified Protection of Information Security (RCPIS) lies in 
classified protection on information systems, aiming  at safeguarding security of basic information 
network and important information sy stems and maintaining national security and public interests.  In 
China, the security of information systems in banki ng, education, healthcare,  transportation and other 
public utilities concerns direct interests of Chinese citizens in economic income, education rights, life 
and health and safety in transportation.  Therefor e, the importance of information systems is not 
necessarily decided by the sensitivity of that industr y but by the damage caused to national security, 
social order, economic devel opment and public interests.  WT/TPR/M/264/Add.1 
 Page 161 
 
 
   
48.  Could China explain how the exclusion of foreign technology and foreign manufacturers from 
information systems classified as levels 3 and above benefits the objectives of the MLPS?     
 Answer: Article 21 (1) and (2) stipulate requirements for information security products to be used in 
information systems of Level III and above, with the aim of protecting national security and safeguarding security of important information syst ems, which, like relevant measures adopted by 
other members in protecting critical information infrast ructure, conforms with international practice.  
Information systems of Level III and above are critical infrastructure and important assets that 
concern national security, public interests and social  order, and these systems cover a very limited 
portion of all the information systems.  As RCPIS has been implemented for a short time, information 
about the information systems of Le vel III and above is limited.  
 Besides, Article 21 of RCPIS does not forbid foreign information security products from being 
applied in any of the Chinese industries, and as these systems of level III and above cover a very 
limited portion; foreign products will be hardly affected.  China has reiterated for many times that in 
indigenous innovation, intellectua l property and government procurement, all enterprises will receive 
equal treatment.  
China's State Food and Drug Administration (SFDA) requires re-registration of medical devices every 
4 years.  In order to grant the renewal of registra tion, the SFDA requests re-testing of the product as a 
result, the renewal costs are almost as high as th e initial registration costs. SFDA-approved testing 
laboratories may not always have the required capacity to perform the required tests in a timely manner nevertheless, tests from foreign testing la boratories are not accepted.  In addition, an 
increasing amount of detailed documen tation is required by the SFDA in the renewal process these 
additional requests, often unpredictable, lead to an extension of the already very long product 
registration timeline and consequently to the expira tion of licenses, thus hindering the product to be 
sold in China.   Another concern relates to the use of outdate d standards in China, standard IEC 60601-1 2
nd edition is 
currently mandatory;  however, the 3rd edition of this international sta ndard already exists and is used 
by most medical device manufacturers.    Finally, some medical devices require registra tion from both the SFDA and AQSIQ (under the CCC 
scheme), even though they both have similar requirements.  
 
49.  In most other jurisdictions, the re-registrati on of medical devices is only an administrative 
procedure (assuming the regulations, product sp ecifications and market performance did not 
change). What are the reasons for which th e SFDA requires re-testing of the products? 
 
Answer: According to Method on Administration of Me dical Devices Registration, re-registration 
requires registration testing report. Currently, SFDA is revising the Method in line with Regulations 
on Supervision and Management of Medical Devices, which is also being revised.  In this process, 
requirements are reduced in re-registration, whic h emphasizes on review of its application after 
marketing, and Quality System Examination Re port and Quality Tracing Report are needed.  
Re-registration does not require Registration T esting Report if no product change is found. 
 
50.  The SFDA recommends that applications fo r license renewals be filed 6 months in advance 
however, according to EU industry, this timelin e is insufficient, and some companies have had to 
apply as early as 15 months in advance.  What are the steps currently being taken by the SFDA to 
deal with the delays in the re-registration process,  in particular the lack of testing capacity and the 
numerous additional requests for documentation?      
 WT/TPR/M/264/Add.1 
Page 162 
 
 
  Answer: In recent years, SFDA attaches great importance on the time limit of registration approval 
and has devoted more efforts in limiting approval  period and improving revi ew efficiency.  After 
survey and research, SFDA came with the solu tion of Notice of Provisional Regulations on 
Strengthening and Regulating Registration Mana gement of Medical Devices, Announcement on 
Registration Issues of Medical Devices, Second Cata logue of Medical Devices with Clinical Testing 
Materials Exempted (trial version), which laid the foundation to strictly follow approval time limit.  
Currently, most of the approvals of medical devi ces are finished within formulated time limit. 
 
51.  Will the SFDA, as in the past, grant 'en masse' registration extensions to medical devices blocked 
in the re-registration process due to delays of Chinese testing laboratories, or additional documentary requirements? 
 
Answer: SFDA issued the Notice on Delay of Certifica tion of Medical Device Registration (No. 63 
of 2007) to solve delays in collective re-regist ration for medical devices falling to the 3rd domestic 
category and imported category. 
 
According to the Procedure for Handling Delays of Certification of Medical Device Registration (No. 
169 of 2007), application for extension can be filed in the following cases:  
 One, technical review of accepted re-registration exceeds time limit; 
 Two, legitimate testing exceeds normal testing period due to reasons arising from testing 
centres for accepted and unaccepted re-registration; 
 Three, delays caused by examination of relat ed quality management systems for accepted and 
unaccepted re-registrations.   
 
52.  With regard to IEC standard 60601-1, will the SFDA allow the use of the 3
rd edition of the 
standard, in parallel with the 2nd edition, until the relevant Chinese standard is amended to 
replace the 2nd edition with the 3rd edition? Will the SFDA accept test reports in accordance with 
IEC standard 60601-1 3rd edition?         
 
Answer:  SFDA approves medical devices according to cu rrent rules and regula tions, and has no plans 
to accept registration by IEC 60601-1 Version 3.  Ho wever, to convert IEC 60601-1 version 3 into a 
Chinese standard, SFDA has established a working group to compare the differences between IEC 
standard and Chinese ones after translation.  The next step is to formulate conversion plans. 
 
53.  Despite the SFDA and AQSIQ joint announcement in 2008 that medical devices will be required 
"one test, one report, one fee and one factory inspection", some medical devices still have to undergo duplicative registration procedures.  Wh at are the steps being undertaken by these 
Chinese authorities in order to strea mline and unify these requirements?  
 
Answer:  In 2006, SFDA and AQSIQ jointly published Notice on Testing-related Issues for Certain 
Medical Devices (No. 70) to remove duplicative requirements.  The Notice stipulates that for the same testing in registration and 3C, only one test, one f ee will be conducted and no duplicative test and fee 
is allowed. 
 Duplicative test and fee encountered by enterprises can be reported to SFDA and AQSIQ. 
 
54.  According to the SFDA, the revision of the main medical device legislation in China (Order 276) 
will address some, if not most of these issues.  Can the SFDA provide more detailed information as 
to what this upcoming revision will contain, and wh at its timeline for adoption is?  Furthermore, 
will China notify this revised legislation, while s till in draft form, to the TBT Committee, according 
to its obligations under the TBT Agreement? 
  WT/TPR/M/264/Add.1 
 Page 163 
 
 
  Answer: The Revision of Regulations on Supervision a nd Management of Medical Devices is on the 
agenda of this year's legislation plan.  China will notify the WTO according to its obligations under 
the TBT agreement.  
 
In 2010, China's State Food and Drug Authority (SFDA) introduced new requirements for the 
registration of cosmetics, which led to a nearly comp lete standstill of approvals.  Even though, in the 
meantime, the registration of products without new ingredients has improved, the registration of other 
products (e.g. products with new ingredients and baby care products), as well as the registration of 
new ingredients themselves, is still blocked.  
 A further issue is the SFDA's recent announcement of its intention to reclassify a majority of non-special cosmetics into special cosmetics, thus  subjecting them to pre-market registration (as 
opposed to notification) requirements.  This will greatly increase the number of products that need pre-market approval, further straining the SFDA's resources and most likely adding to the significant 
approval delays. 
  
55.  Following the introduction of new registration requirements for cosmetics in 2010, there was a 
complete blockage of product appr ovals.  This was initially due to a lack of relevant guidelines on 
the registration of new ingredients such guide lines were subsequently published by the SFDA in 
2011.  Nevertheless, SFDA reviewers consistently reject product applications.  What steps are 
being taken by the SFDA to correct this situa tion, and allow for the smooth registration of new 
ingredients, and products with new ingredients?  
 
Answer: SFDA has been pushing forward reform in co smetic licensing to regulation and improve 
administrative efficiency, under the principle of  separating acceptance, review and approval.  
Meanwhile, SFDA has organized many trainings to  provide guidance for cosmetic enterprises, 
including members of European Chamber of Comme rce in China in cosmetic safety evaluation. 
Statistics showed that imported products approve d (recorded) increased by 3.05% in 2011 than in 
2010.  Currently, qualified products, including cosme tics from EU, has been approved or recorded 
and administrative approval is going smoothly. 
 
56.  What steps are being taken by the SFDA to allow for the registration of baby care products?        
 
Answer: Based on safety evaluation, Requirements on Materials for Cosmetics Application 
Acceptance stipulates that for cosmetics for women of pregnancy and lactation, children or babies, 
and other groups, safety-based formulation design pr inciples (including overall formulation analysis 
report), raw material choice principles and require ments, working skills, quality controls, and other 
application materials are needed.  
 
SFDA is organizing research, based on which, the dr aft of Guidelines for Application and Review of 
Children (Babycare) Cosmetics is formulated  and SFDA is soliciting public opinions and 
commencing workshops with enterprises and experts. 
 
57.  What is the rationale behind the SFDA's decision to re-classify a majority of non-special 
cosmetics into special cosmetics, thus subjec ting them to pre-market registration requirements? 
Can the SFDA provide safety or toxicological data that would justify that these products pose a 
significantly higher risk? 
 
58.  Given the likely significant trade impacts of this  re-classification, the EU considers that it is very 
important to provide industry with practical im plementation guidelines as soon as possible, and 
sufficiently long transition peri ods and/or grandfathering for existing products. Can the SFDA 
provide more information on the preparatory work being carried out in this regard, and in 
particular the development of any implementation guidelines?  What is the transition period being WT/TPR/M/264/Add.1 
Page 164 
 
 
  foreseen before implementation?  What steps are bei ng taken to ensure that no trade interruptions 
will occur?  
 
Answer to 57&58:  SFDA has formulated the draft of Opinions on Classification Management of 
Non-special Cosmetics, based on risk management.  From Feb. to March of 2012, SFDA has solicited 
public opinions online.  After revision with feedba cks, SFDA is planning to solicit again online and 
all the concerns and advice are welcome. 
 
59.  What is the timetable for harmonising the trea tment of pharmaceutical products which have been 
trialled abroad with those which have been tr ialled in China, with respect to licensing?  
 
Answer:  According to the Drug Control Law, Rules for Implementing Drug Control Law, imported 
and domestic drugs are both subject to unified li censing scheme.  Rules on Registration Management 
of Drugs stipulates that registration application covers application for dom estic and imported drugs, 
and the requirements for application materials, technical regulations, time limit are basically the same.  
There is a little difference due to applicant distinction. 
 
60.  What steps is China taking to shorten the multi-stage licensing and approvals process for 
pharmaceutical imports?        
 
Answer:  Unified review and approval is carried out for marketing license for imported drugs and no 
multi-stage licensing exists.  
 
(c) Sanitary and phytosanitary measures  
WTO Secretariat's report, pages 49-52        
 
The Secretariat's report refers to a Catalogue of  Entry-Exit Commodities Inspected and Quarantined 
by Entry-Exit Inspection and Quarantine Organs.  AQSIQ, China's quarantine authority, has also 
published the Administrative Measures for Regist ration of overseas Manufacturers of imported Food 
effective from 1 May 2012.  
 China notified the WTO of the draft measures on 19 August 2011 to solicit comments from trading 
partners.  The EU sent its comments as it was c oncerned that the measure is not necessary neither 
proportionate that each establishment wishing to expo rt to China should be required to go through the 
registration procedure.  The EU expressed its strong concern that the registration measure has the 
potential of being highly disruptive to trade a nd which does not guarantee increased safety for 
imported products.  In addition, the implementati on for which products and which timelines has not 
been clarified to trading partners.  The EU re quests China to refrain fro m unnecessary administrative 
burden. 
 
61.  How will China make sure that the Administ rative Measures for Registration of Overseas 
Manufacturers of Imported Food does not cons titute an unnecessary trade barrier for 
third countries?   
Answer:  In order to protect health and safety of  Chinese consumers, China regulates overseas 
manufacturers of imported food listed in The Catal ogue of Administrative Measures for Registration 
of overseas Manufacturers of imported Food which has been issued by the Announcement No. 73 
2012 of AQSIQ.  China takes full consideration of the principles of trade facilitation, the current 
regulations of other countries and regions, including  EUs regulation of third-country animal-origin 
food enterprises registration. Its implementati on will have a sufficient transitional period. 
  WT/TPR/M/264/Add.1 
 Page 165 
 
 
  62.  According to the Administrative Measures for Registration of Overseas Manufacturers of 
Imported Food the importing veterinary services systems, plant protection systems and public 
health management systems of the exporting country will be assessed  by China to their 
qualification.  Could China elaborate on who w ill do such assessment?  Does China take into 
account in this assessment international guid elines and recommendations as set in the Codex 
Alimentarius to align with international harm onised inspection/audit systems, so that on-site 
reviews to verify compliance shoul d rather only be audit-based?  
 
Answer: According to the Administrative Measures for Registration of Overseas Manufacturers of 
Imported Food, CNCA is responsible for implemen ting and supervising the registration of overseas 
manufacturers of imported food.  On-site assessment  will be conducted according to CAC guidelines 
about foreign inspection activity.  
 
WTO Secretariat's report, page 51, para. 101       
 
The Secretariat's report indicates that  China is a member of international organizations related to SPS, 
including the World Organisation for Animal H ealth (OIE).  The EU welcomes China's active 
participation in these organisations. However, China does not always follow the international 
standards and recommendations set by these organisa tions nor provide scientific evidence to support 
its measures.       
 
63.  Does China plan to contemplate a process to wards imposing import conditions generally 
accepted by the international standard setting bodies? 
 
Answer:  OIE is the only international animal h ealth standardizing organization which WTO 
recognized.  OIE standards are the basis of Memb ers animal disease prevention and control activity 
and the trade of live animal or animal oriented prod uct.  However, China would like to point out that 
Members take risk management measures based on OIE standards, risk analysis and Members own conditions.  Therefore, if Members SPS measures are not exactly the same with OIE standards, it 
doesn't mean that they are violating OIE principl es. Members, including the U.S. and the EU, are not 
completely implementing OIE standards.  For exam ple, according to OIE Terrestrial Animal Health 
Code, the trade of cooked poultry is safe regardless  of a country's avian influenza or Newcastle 
disease situation.  Nevertheless, the EU only imports Chinese cooked poultry from Shandong 
province, and the ban of Chinese cooked poultry remains in the U.S. 
 
Especially, with regard to China's animal health policy, the European Union is concerned about the 
Chinese interpretation of OIE standards on BSE.  The OIE provides for conditions under which beef 
and other bovine products can be safely traded from all countries.  Most EU countries have now been 
classified by the OIE as countries with "neg ligible risk" or "controlled risk".   
 During its TPR in 2010, China replied to the EU's  question above that China would like to make 
active cooperation and exchanges with the EU in the spirit of scientific, pragmatic and friendly 
cooperation.  The EU has actively given all in formation on EU beef safety measures and BSE 
prevention and control systems.  Despite of those exchanges and technical cooperation, China has not 
started to process the applications for beef a nd bovine products from the EU Member States.  
 64. When would China allow the imports of beef and other products from EU Member States, in line 
with the OIE classification of which China is a Member? Alternatively, could China justify, by 
scientific reasons, any restrictions on the products that under the OIE list can be safely traded? 
Could China indicate when will it fulfil its obli gation in line with the SPS Agreement to start 
processing applications for beef and bovine pr oducts from the EU Member States?   
 WT/TPR/M/264/Add.1 
Page 166 
 
 
  Answer: China is a country free of BSE, and theref ore has taken serious, scientific and prudent 
policies in the prevention and control of BSE. Chin a attaches much importance to the issue of EU 
beef export to China, and has noted the efforts EU has made in controlling the BSE.  China would like 
to make active cooperation and exchanges with the Me mber State concerned in the spirit of scientific, 
pragmatic and friendly cooperation on the premise of safety.  China would seek solution to the 
problem based on full knowledge of EU beef saf ety measures and also BSE prevention and control 
systems. 
 
WTO Secretariat's report, page 51, para. 103       
 
The Secretariat's report indicates that under the various administrative measures for inspection, 
quarantine and supervision of di fferent products, a country or region that wishes to export food 
product to China for the first time must be assessed by AQSIQ.  After both parties have signed a protocol for inspection and quarantine, exports from the country or region by food producers that are 
registered with AQSIQ can start.  
 The EU wishes to express concerns on principles and approaches, already raised in our bilateral SPS 
contact in this respect.  Each Member State has to negotiate specific protocols and certificates with 
China for each type of agricultural product with China despite the fact that the EU has a fully 
harmonised legislation for animal health, plant health and food safety.  The slow progress of 
negotiations of SPS protocols a nd the slow progress for inspections limit market access of EU 
products to China, especially for meat and for fruit and vegetables.  In add ition, import conditions in 
the health certificates negotiated with China vary from one Member State to another Member State 
despite the fact that animal health status or plant h ealth status would be similar.  This actually leads to 
non-harmonised import conditions from the Chinese side  and therefore does not follow the spirit of 
SPS Agreement.   
 
65. Could China elaborate on how it intends to accel erate these bilateral SPS negotiations with 
individual Member States in order to avoid undue procedural delays, as mentioned in Annex C in 
the SPS Agreement?  Could China also elabor ate how it intends to harmonise its import 
conditions for third countries for animal and plant health requirements, to  make the requirements 
more transparent and to ensure that they are consistent?  
 
Answer: China has inspection and quar antine access procedures for meat products.  The inspection 
and quarantine access procedures of meat products are the following: 
 
 Exporting country should submit written applica tion of meat product to AQSIQ.  China 
decides whether to initiate a ccess procedures depends on the exporting country's epidemic 
situation.  If initiate, AQSIQ will give the exporting country The Health Management System 
Evaluation Questionnaire for Countries Exporting Poultry, Pork, Bovine, Mutton, Venison to China; 
 Exporting country should submit relevant technical information; 
 China will conduct risk analysis and assessment of technical information provided by 
exporting country.  If the risk of the animal oriented product is acceptable, China will send 
experts to do on-site inspecti on in the exporting country; 
 The two sides consult the texts of bilateral inspection and quarantine protocol and sign upon 
consensus, as well as conform the text s and sample of sanitary certificate. 
 
Foreign enterprises exporting animal oriented products  should register according to the requirements 
of Administrative Measures for Registration of Ov erseas Manufacturers of Im ported Food.  Exporting 
country should provide information, such as the types of products and annual production capacity, of 
enterprises registered and located in  China to AQSIQ.  Enterprises regi stered and located in China are 
allowed to export to China after they are listed in  The Catalogue of Countries or Regions Allowed to  WT/TPR/M/264/Add.1 
 Page 167 
 
 
  Export Meat Products and The Corresponding Type s and Usages and published on the website of 
AQSIQ.  
Importers in China should have qualification of importing meat products according to Administrative 
Measures for the Inspection, Quarantine and Supe rvision of Entry-Exit Meat Products.  After 
exporting country completes the procedures above, Im porters in China apply to import meat products 
from registered exporting country's enterprises, obtain License of Animal and Plant Quarantine Enter into China, and import product following quarantine requirements.  When products arrive at China's 
port, inspection and quarantine organs at ports will conduct inspection and quarantine.  Besides, meat 
products export to China must comply with international wild animal protection rules.  China needs to point out that we have received applications from dozens of countries and has been 
evaluating them in chronological order.  The two sides should actively cooperate to finish the whole 
procedure.  The progress speed depends on the timin g and completeness of the information provided 
by the exporting country. 
 
(d) Labelling  WTO Secretariat's report, page 52, para. 109      
 
The Secretariat's report states that "Labelling requi rements are maintained under the Standardization 
Law, the Law on Product Quality of 1993 (as amende d), and the Food Safety Law of 2009.  Under 
these laws, all products sold in China must have Chinese language labels.  The label must state, 
inter alia , name, specification, net weight, date of ma nufacture, component or ingredient list of the 
product, the manufacturer's name, address and cont act information, country of origin, quality 
guarantee period, product standa rd code and storage conditions, common name, and production 
licence of food additives."  
66. Will China provide a sufficient transition period for the coordinated implementation of all 
labeling standards being revised and under revision? 
 
67. Will China increase local inspection authorities understanding of the labeling regulatory 
requirements and encourage communication between  different local bodies (AIC, CIQ, TSB) 
when an issue of compliance arises?  
 
Answer to 66 & 67 
 
In 2011, China made and revised 2 food labeling na tional standards, both of which are important 
general labeling standards.  One is National Food Safety Standard Pre-packing Food Labeling General 
Rule (GB7718-2011) issued by the Ministry of Health on 20 April 2011 and implemented on 
20 April 2012.  The other is National Food Safe ty Standard Pre-packing Food Nutrition Labeling 
General Rule (GB28050-2011) issued by the Mini stry of Health on 12 October 2011 and will be 
implemented on 1 January 2013.  China implements the same administrative policy to import and domestic pre-packing food.  For 
example, from 20 April 2012, every import pre- packing food is inspected according to the 
requirements of GB7718-2011. 
 The same paragraph also states that "country of or igin" is a compulsory element of the label on 
imported products.   WT/TPR/M/264/Add.1 
Page 168 
 
 
  68. Can China confirm that the indication of a completed Customs Union, such as "European 
Union"/ "EU" is accepted for the purposes of or igin labelling on imported products?  If not, why 
not?      
 
Answer:  Please refer to the official website of th e Ministry of Health http://www.moh.gov.cn/ 
publicfiles//business/htmlfiles/wsb/index.htm and the TBT/SPS Enquiry Point http://www.tbt-sps.gov.cn/service/Pages/TBT_enquirepoint.aspx.  (viii) Government procurement   WTO Secretariat's report, pages 53-56  69. How does the Government guarantee that domestic  and foreign bidders alike have access to the 
information relating to procurement opportuniti es?  Does China consider setting up information 
portals, covering procurement both at the central and the provincial level and publishing contract 
notices for individual tendering procedures?  
 
Answer:  The Ministry of Finance specifies www.ccgp.gov.cn as the website to publish national 
government procurement information.  The government s at provincial level have also established their 
own local government procurement portals, wh ich have achieved in teroperability with 
www.ccgp.gov.cn.  Government procurement informa tion at these websites is completely open and 
free. 
 
70. When will China adopt the measures for the defin ition of domestic products? In this context, will 
China consider treating equally  goods produced in China by  Chinese-owned companies and 
goods produced in China by foreign invested companies?      
Answer:  The Chinese government will strive to in troduce the Measures for Administration of 
Government Procurement of Domestic Products w ithin 2012.  At present, the Chinese government 
treats products from Chinese-owned enterprises and foreign-invested enterprises equally in the 
procurement process. 
 
71. How does the Chinese Government ensure uniform enforcement of legislation governing public 
procurement nationwide?  
 
Answer:  Government Procurement Law is the main law governing China's government procurement 
activities, applicable to the procurement activities with fiscal funds conducted by state organs, 
institutions and social organizations at all levels. 
 
WTO Secretariat's report, page 53, para. 111        
 Currently, there remains a significant difference be tween China's domestic pr ocurement regulations 
and the provisions of the GPA.  A substantial part of the existing regulatory framework is not in line 
with the overarching GPA principles of competiti on, transparency, integrity, and sufficient 
remediation.  Moreover, some local and sector specifi c regulations dilute or contradict the expected 
application of the BL, which calls fo r open bidding and equal competition.  
 
72. Do the Chinese authorities envisage streamlining th e legal framework for public procurement in 
line with GPA principles and international best  practices and remedying existing inconsistencies 
between the two procurement-related laws 
 
Answer: China drew on the WTO Government Proc urement Agreement (GPA) and the United 
Nations Model Law on Public Procurement in th e process of China's government procurement  WT/TPR/M/264/Add.1 
 Page 169 
 
 
  legislation.  At present, all government procuremen t laws and regulations follow the principles of 
openness, fairness and impartiality, to ensure fair co mpetition, transparency, integrity and full relief in 
the procurement activities.  China's government procurement activities are mainly governed by the 
Government Procurement Law and the Bidding Law.  At present, the relevant departments of the 
Chinese government are revising the regulations on the implementation of Government Procurement 
Law based on the opinions and suggestions of all sides.   From the current draft, the regulations on the 
implementation of Government Pr ocurement Law have achieved conve rgence with the regulations on 
the implementation of Bidding Law to some extent. 
 
Public procurement under both China's Governme nt Procurement Law and the Tender and Bidding 
Law continues to discriminate against foreign ente rprises in China.  The qualification requirements 
imposed by Chinese laws are very difficult to fulf il for foreign companies and constitute important 
barriers to market access.  Although some foreign goods  and services are routinely procured by China, 
non-discriminatory access for foreign bidders , goods and services should be extended. 
 
73. What concrete legislative and administrative me asures does China consider adopting to ensure a 
level playing field and equal treatment for wholly Chinese-owned enterprises and FIEs?  
 
Answer: The requirements on the qualifications of the s uppliers in China's Government Procurement 
Law are basic requirements.  The law does not set ma rket barriers to foreign-invested enterprises.  
The Chinese government treats products from Chin ese-owned enterprises and foreign-invested 
enterprises equally in the procurement process.  
WTO Secretariat's report, page 56, para. 127   
 Despite the commitment that the indigenous inn ovation policy will not be linked to government 
procurement on both central as well as local governme nts, foreign-invested companies continue to 
experience that local governments have implemen ted and compiled their own local catalogues.  
Products of FIEs that are not included in these cat alogues seem likely to be discriminated against in 
government procurement bidding procedures.  So me regions have started issuing procurement 
certificates which would allow or require a company/ bidder to be prequalified prior to entering into 
the actual bidding process itself.   
74. Could China describe how it ensures de-linking i ndigenous innovation policies from government 
procurement at the local level? 
 
Answer:  On 17 November 2011, the General Office of the State Council issued a notice requiring the 
local governments and relevant departments to abo lish the provisions stipulating that innovation 
policy is linked to preferential government pr ocurement in their normative documents since 
1 December 2011.  China's innovati ve products have no longer been linked to preferential government 
procurement. 
 
75. Can China in particular clarify whether loca l authorities are still allowed to draft local 
innovative procurement catalogue  and whether the certificate of prequalification for these 
catalogues authorities are recognized nationwide across China?  
 
Answer:  On 17 November 2011, the General Office of the State Council issued a notice requiring the 
local governments and relevant departments to abo lish the provisions stipulating that innovation 
policy is linked to preferential government pr ocurement in their normative documents since 
1 December 2011.  China's innovati ve products have no longer been linked to preferential government 
procurement. 
 WT/TPR/M/264/Add.1 
Page 170 
 
 
  WTO Secretariat's report, page 56, para-s 128-130       
 
Although there has been progress in the different offe rs (last offer November 2011), the EU notices 
the limited coverage of sub-central entities and services (including construction services) the absence 
of proposed commitments on SOE and exclusion of  several key sectors;  and systemic far-reaching 
carve out and extremely high contract value thresholds.     
76. Does China intend to submit a third revised market access offer in the coming months? If so, what 
are the main improvements considered? 
 
Answer: The Chinese government will submit a new comp rehensive revised offer before the final 
meeting of WTO Government Pr ocurement Committee in 2012. 
 
77. Is China ready to consider including state ow ned companies in its market access offer for GPA 
accession?  
 
Answer: China's state-owned enterprises are inde pendent market players which operate 
independently and assume sole responsibility.  Pr ocurement activities of state-owned enterprises are 
the day-to-day business activities of enterprises, and the government does not interfere with these 
activities.  Therefore, the procurement activities of  state-owned enterprises do not fall into the scope 
of government procurement.  At present, the Chin ese governments offer mainly covers the procuring 
entities within the scope set forth in the Government Procurement Law. 
 
(2) MEASURES DIRECTLY AFFECTING EXPORT        
(viii) Export finance, insurance, and guarantees        
 
WTO Secretariat's report, pages 61-63, paragraphs 154-165       
 
The Secretariat's report provides information on the activities if the Export-Import Bank of China and of SINOSURE. 
 
78. Apart from the EXIM Bank and SINOSURE, does Ch ina have any other agencies or instruments 
providing financing linked to ex ports or similar external economic  activities?  In the affirmative 
case, how do they operate?   
 
Answer: In addition to the Export-Import Bank, other commercial banks can also carry out export 
credit business.  Commercial banks follow the princi ple of market-oriented operation.  The EU has 
taken note with great interest of the announcemen ts by China and the US following Vice-Premier Xi's 
visit to Washington in February 2012 and followi ng the Strategic and Economic Dialogue of 3 and 
4 May 2012 that China and the US intend to create an international group of major export credit providers to work on international guidelines on export credits, with a view of creating a new 
agreement by end 2014. 
 
79. Could China elaborate further on this initiative? 
 
Answer: The intention to create an international group of major export credit providers to work on 
international guidelines on export credits has not yet entered into the negotiations stage.  The Export-
Import Bank of China organized a bilateral technical exchange between Sino-US official export credit 
agencies in February and April this year, respectiv ely.  The participants included the Export-Import 
Bank of China, China Export & Credit Insurance Corporation, the US Export-Import Bank and the US Department of Treasury.  The two sides onl y exchanged views on export credit business at the 
technical level, did not mentioned any issue on export credit policies. 
  WT/TPR/M/264/Add.1 
 Page 171 
 
 
  WTO Secretariat's report, pages 62, paragraph 161       
 
The Secretariat's report states "The authorities have indicated that, although China is not a participant 
in the OECD Arrangement on Officially Supported Export Credits, the EXIM Bank in practice "refers 
to the Arrangement for key conditions of issuing e xport credit and is generally consistent with the 
basic framework of the Arrangement", and that "its lending interest rate is either a fixed one taking 
reference from OECD-released CIRRs or a floating rate which is a reconciled London Inter Bank 
Offered Rate (LIBOR)".  As of the end of 2010,  55.35% of EXIM Bank on-balance lending was in 
renminbi, and the remaining 44.65% in foreign curr encies.  The authorities indicate that financial 
institutions set their own renminbi lending rates subj ect to a lower limit, which is 0.9 times the PBC 
benchmark rate."  
 
80. Which are the OECD Arrangement's "key conditio ns" of issuing export credits to which EXIM 
Bank refers in practice?     
 
Answer:  Although China is not a participant in th e OECD Arrangement on Officially Supported 
Export Credits, the key conditions of issuing export cr edit of the EXIM Bank in practice are similar to 
the key conditions set forth in the Arrangement.  The key conditions on a dvances, financing ratio, 
repayment period, principal and interest payment of  the EXIM Bank refers to the key conditions set 
forth in the Arrangement, and the fixed interest rate  of foreign currency loans of the EXIM Bank also 
refers to the OCED commercial reference rate.  
81. As regards lending at floating interest rates, how does EXIM Bank benchmark the rate it applies 
against the market?  Of which elements is the "reconciled LIBOR" composed?  
 Answer: China Export-Import Bank mainly raises credit funds by issue bonds in the market, so the 
rate is determined on the basis of debt issuance cost s as regards lending at floating interest rates.  The 
reconciled LIBOR is mainly composed of the cost  of capital, loan costs, tax costs, and risk 
compensation. 
 
(3) MEASURES AFFECTING PRODUCTION AND TRADE   
(ii) Subsidies and other government assistance (a) General features  WTO Secretariat's report, pages 68-69, para-s 189-194  
 
82. Has China undertaken any distinction in the design and application of its subsidy and other 
support schemes regarding the beneficiaries and in particular their status as SOEs, FIE or 
foreign enterprises?  What are the eligibility criteri a for the potential beneficiaries?        
 
Answer: At present, China does not undertaken any distin ction in the design and application of its 
subsidy and other support schemes re garding the beneficiaries and in particular their status as SOEs, 
FIE or foreign enterprises.  
 
83. In what manner will FIE and other foreign enterprises established in China obtain access to 
receive support to e.g. subsidies for the stimula tion of technological research and development 
performed in China?  
 
Answer:  Please refer to our subsidy notifi cation G/SCM/CHN/123, G/SCM/CHN/155 and 
G/SCM/CHN/186 for detailed information, such as item 1, 2, 3, 4 etc. of G/SCM/CHN/155 and 
G/SCM/CHN/186.  
 WT/TPR/M/264/Add.1 
Page 172 
 
 
  84. How is coordination undertaken between national and sub-national subsidy schemes?  Is there a 
national approval system for sub-national suppor t schemes and how is it designed and carried 
out?  
 
Answer: Local finance is in responsible for local govern ment.  Schemes at local level do not need the 
approval from the central finance.  
WTO Secretariat's report, pages 68-72, para-s 189-209        
 
The Secretariat's report states that "The use of subs idies and other government assistance appear to be 
an important feature of China's trade policy making.//".        
85. In this context, could China provide overview on:        
a. the subsidy/support/grant/incentive schemes that China has for its industrial production and 
services sectors, including the legal basis, form, am ount or budget and where possible the recipient of 
the subsidy granted by the government or any public body.        
 
Answer: Please refer to China's subsidy notification G/SCM/CHN/123, G/SCM/CHN/155 and 
G/SCM/CHN/186 for detailed information 
 
b. the public authorities that have the authority to  allocate (and the procedures for) budget to 
provide financial support to indus trial production and services sectors as well as an overview over 
the authorities that administer such support schemes (paragraph 191).    
 
Answer: Authorities responsible for finance and other au thorities that are in relation with the budget. 
 
c. the industrial revitalisation plan, including th e budget allocated and actually disbursed 
(paragraph 194).  
 
Answer: Please refer to our government report of last  TPR for detailed information of industrial 
revitalization plan.  Budget allocated to ma jor specific programs under the plan, such as home 
appliances going to the countryside etc, were availabl e in our replies to members, for example US, in 
the last TPR.  You may also refer to report on the implementation of central and local budget 
submitted by Ministry of Finance to our national people's congress these years.   d. the National Medium-and-Long-Term Developmen t Plan for renewable energy, including the 
budget allocated and actually disbursed (paragraph 195). 
 
Answer: China supports the development of renewable energy through the renewable energy fund. 
This fund contained sub-arrangements including for examples the golden sun demonstration project 
and the project for application of solar photoelect ric technology in housing construction etc, and the 
fund involved also transfer payment to provincial governments.  China will work on notification of 
this fund in the course of extending the notification to local subsidy programs.  
e. the complementary assistance programmes fo r renewable energy, including the budget 
allocated and actually di sbursed (paragraph 198).  
 
Answer: China has no idea of what EU mean by complementary assistance.  
 
f. the cars listed in the promotion catalogue (paragraph 200).     
 
Answer: Drawing on the promotion experience and practices of other countries, China has begun 
new-energy cars promotion in the public service sector s of 25 pilot cities and private sectors of 6 pilot  WT/TPR/M/264/Add.1 
 Page 173 
 
 
  cities.  This promotion includes energy-sav ing cars under the Energy-saving Product People 
Benefiting Project Energy-saving Vehicles (PVs wi th a capacity lower than 1.6 liters) Promotion 
Catalogue and new-energy cars under the Recommende d Models Catalogue for the Energy-saving 
and New-energy Vehicles Promotion Pilot Project.  Currently, no imported models are listed in the 
two catalogues due to the following reasons.  First, most imported cars are with capacities larger than 
1.6 liters, and foreign automobile enterprises have not applied to enter the catalogues; second, the 
technology of new-energy cars is not mature enough and the performance of such cars need to be improved during the pilot project.  Imported new-energy cars are not included in the catalogues for 
now to ensure safety and reliability. 
 
g. the remaining measures referred to in 205 to 209.  
 
Answer: Please refer to our subsidy notifica tion G/SCM/CHN/123, G/SCM/CHN/155 and 
G/SCM/CHN/186 and domestic support notification fo r agriculture.  We believe members have not 
really looked into our notification.  
 
WTO Secretariat's report, page 68 and 69, para-s 189 and 192      
 
The Secretariat's report refers to China's lat est notification to the WTO on subsidies (2009 
notification).  In this respect, and also referri ng to 189, the EU remains concerned about China's 
record to date, in notifying its subsidies in the area of trade in goods under the SCM Agreement.  In 
October 2011, the US activated the provisions of Ar ticle 25.10 of the SCM Agreement, whereby they 
brought to the attention of China, the latter's failu re to notify all relevant subsidies to the WTO.  
Following this action on the part of the US, under th e provisions of Article 25.10 of the SCM, China 
should have notified promptly the alle ged subsidies in question.  It is regrettable that to date this has 
not been done in a satisfactory manner.  
 The lack of notification by Members not only undermines the rights of other members but also 
ignores the obligations imposed by the SCM Agreement.  The fact that China, which is a country with 
a very significant share of world trade with many  subsidy programmes at both central and sub-central 
level, has failed to notify fully its s ubsidies is all the more serious.   
 China has, in the SCM Committee, acknowledged the im portance of the notification obligations of the 
SCM Agreement.  However, the EU regrets to see th at this statement is not supported by concrete 
actions on China's part.  In the meeting of the SC M Committee in October 2011, China stated that it 
had produced a complete and comprehensive notifica tion of the programmes at central level and that 
it would work towards incorporating local progra mmes.  While China did make a notification in 
October 2011, this was neither timely nor comp lete and covered only a limited number of 
programmes at central government level and then only for the years 2007 and 2008.  The deadline for the most recent notification exercise under Article 25.1 of the SCM Agreement was 30 June 2011.  
Almost a year has passed since that deadline a nd China still has not filed any notification of its 
subsidy programmes, either central or local, for th e years 2009 and 2010.  The EU is aware that China 
has previously stated in the SCM Committee that th e analysis of the various programmes to determine 
whether or not they are subject to notification is  a time consuming exercise, however the EU does not 
consider this in itself a reason to renege on the notif ication obligations that apply to all Members.  In 
this context the EU would also like to note that the notification of a program does not prejudge the 
status or effects of the measure itself nor does it confirm that it amounts to a specific subsidy.  The EU 
would therefore urge China to avoid any further de lays and to comply with its obligations under the 
SCM Agreement by filing a complete and up- to-date notification as quickly as possible. 
 
86. Can China indicate when it will provide a co mplete notification to the WTO?      
 WT/TPR/M/264/Add.1 
Page 174 
 
 
  Answer: Subsidy notification entails huge amount of wo rk on information gathering and analysis and 
this is particularly a challenge for China as a la rge developing country.  To fulfill its notification 
obligation under the SCM Agreement systematically, China since its WTO accession has concentrated 
its efforts on notifying comprehensively central pr ograms as a first step, and would then extend its 
efforts and experiences to cover those at the sub-central  level.  Now that substantial progress has been 
made in fulfilling the transparency obligation of th e subsidies at the central level, China will work 
towards incorporating local subsidies in its future notifications.  As to the 2009-2011 notification, it 
will not be too difficult if covering only central pr ograms.  However if local programs are to be 
incorporated, it will be a different case. In an y case, China will accelerate its efforts for a new 
notification.  
(d) Assistance to small and medium-sized enterprises        
 WTO Secretariat's report, page 71, para-s 201-203 
 
87. Could China elaborate on whether the aid sch emes referred to in paragraphs 201-203 are 
available to all SME established in China?      
 
Answer:  please refer to items, such as 47. 48. 49 in our subsidy notification G/SCM/N/155/CHN and 
G/SCM/N/186/CHN for detailed information of aid programs for SMEs. 
 
(v) State-owned enterprises, private enterprises and corporate governance         
 WTO Secretariat's report, pages 73, 75 and 76, para-s 219, 225, 227 and 229    
 
The Secretariat's report states that state-owned enterprises and monopolies benefit from lower cost 
and have better access to capital.   
88. Could China provide an overview on the support given  to such entities and in particular what the 
situation is if they make losses?        
 
Answer:  China is committed to creating a fair comp etitive market environment for enterprises of 
various ownership types, and the Chinese laws trea t enterprises of various ownership types equally.  
The state-owned enterprises are market entities a nd legal entities which opera te independently and 
assume sole responsibility, so they do not enjoy preferential credit, tax, and regulatory policies. 
 
WTO Secretariat's report, pages 73, 76 and 77, para-s 219, 229, 232 and 233       
 
The Secretariat's report describes the situation of the private sector.   
89. What measures have been taken or are planned in  the future to support the development of the 
private sector and, in particular, their access to  capital? What measures have been taken or are 
planned in the future to remove other entry ba rriers for private sector companies?     
 
Answer: The Chinese government attaches great importance to supporting the development of the 
private sector and consider it an important measure to uphold and improve the basic socialist 
economic system and improve the socialist economic mechanism.  In recent years, the State Council 
successively promulgated a series of policies and measures to encourage and promote the non-public 
economic development.  Among them, the important ones are the "Opinions of the State Council on Encouraging, Supporting and Guiding the Private and other Non-public Economic Development" 
introduced in 2005 (Guo Fa [2005] No. 3), "Opinion s of the State Council on further Promoting the 
Development of SMEs" introduced in 2009 (Guo Fa  [2009] No. 36), "Opinions of the State Council 
on Encouraging and Guiding the Healthy Developm ent of Private Investment" introduced in May  WT/TPR/M/264/Add.1 
 Page 175 
 
 
  2010 (Guo Fa [2010] No. 13), and "Opinions of th e State Council on further Supporting the Healthy 
Development of Small and Micro Enterprises" introduced in 2012 (Guo Fa [2012] No.14).  The local governments and the relevant departments under the St ate Council promptly formulated rules, policies 
and measures for the implementation of these opinions  according to the requirements of the State 
Council.  These policies and measures played an im portant role in expanding the scope of market 
access of private enterprises and creating a good envir onment for private enterprise development.  For 
the next step, the authorities will promptly implem ent and continue improving the rules, policies and 
measures for the development of private invest ment, and create a favourable policy and public 
opinion environment for the development of private investment. 
 
(a) Reform of state-owned enterprises 
 WTO Secretariat's report, page 75, para. 225  
The Secretariat's report states that "The NDRC, in  line with the SASAC, supports national champions 
and promotes the reform of key industries, such as automobiles and steel, via industrial policies to improve the competitiveness of the dominant SOEs".    
90. Could China describe the referred  measures which are taken to improve the competitiveness of 
the dominant SOEs? 
 
Answer: The State-owned Assets Supervision and Admini stration Commission legally performs the 
duties of a capital contributor, and is in no even t provide economic support jointly with the National 
Reform and Development Commission.  WTO Secretariat's report, page 75, para. 226   
 
The Secretariat's report notes that "SOE dominance is to be maintained in industries related to "vital 
interests of national economy " and national security.//".  
 91. Could China explain its definition of "vital in terests of national economy" and "national security" 
in this context and which sectors that relates to?  
 
Answer:  It relates to the important industries a nd key fields where the state-owned capitals 
concentrate, which mainly refers to industries involving national security, major infrastructure and 
industries that provide important public utilities and services. 
 
Non-public-sector enterprises   WTO Secretariat's report, page 76, para. 231        
 According to Secretariat's report, "//Measures rela ted to the new 36-clauses on private access to the 
sectors in which SOEs are dominant are not app licable to FIEs or foreign investors.".  
 
92. Could China indicate the reasons for not includi ng FIEs or foreign investors in the measures 
related to the new 36-clauses on private access to  the sectors in which SOEs are dominant?  
 
Answer: The investment access of FIEs and foreign i nvestors shall comply with the Guideline 
Catalogue of Foreign Investment Industries and other related provisi ons.  The Some Opinions of the 
State Council on Encouraging and Guiding the Soun d Development of Private Investments (Guo Fa 
[2010] No. 13) promulgated in May 2010 is applicab le to private investme nts.  The Rules on the 
Definition and Statistics Scope of Private Fixed- Assets Investments promulgated by the National 
Bureau of Statistics in January 2012 stipulates that private fixed-asset investments refer to WT/TPR/M/264/Add.1 
Page 176 
 
 
  investments in construction or purchase of fixed as sets by collectively, privately or individually-
owned domestic enterprises and public institutions  as well as their holding enterprises and units 
within the territory of China.  WTO Secretariat's report, page 77, para. 232  
 
The Secretariat's report notes that "Private ente rprises may face less favourable environment than 
SOEs, //". 
 
93. Could China explain the way in which private en terprises face a less favourable environment than 
SOEs and whether it has any intentions in changing this situation?       
 
Answer: During the review, the Chinese government has formulated and implemented a series of 
policies and measures to promote the development of  domestic private enterprises and to constantly 
improve the environment for domestic private ente rprises.  The Some Opinions on Encouraging and 
Guiding the Sound Development of Domestic Inv estments (the Opinions) was promulgated in 
May 2010, specifying that private capital is encouraged  to invest in industries and sectors that are not 
explicitly prohibited by laws and regulations, such  as infrastructure, public utility, national defence 
and science and technology as well as finance, cultu re, education, sports, medical care and other 
service industries.  The Opinions also propose to re gulate and establish investment access thresholds 
and create a market environment for various types of ownership to compete fairly and access the market equally.  Currently, implementing rules for private capital to enter into relevant sectors are 
being formulated without losing any time and will be promulgated in succession in 2012 according to 
the timetable determined by the State Council. 
 
WTO Secretariat's report, page 77, para. 233    
 
According to Secretariat's report state-owned comme rcial banks and joint-st ock commercial banks are 
required to provide financial services to SMEs.  94. Could China provide information on such "system "?  How is this implemented and monitored?  
 
Answer: Please refer to the Some Opinions on Furthe r Doing a Good Job in Providing Financial 
Services to Small- and Medium-sized Enterprises (Yin Fa No. 93 of 2010).  WTO Secretariat's report, page 77, para. 235   
 
The Secretariat's report describes preferential tax treatment granted to SMEs.   
95. Could China explain how preferential tax treatment granted to SMEs compares to the taxation of 
SOEs?  
 
Answer: China treats enterprises of different ownership equally when formulating and implementing 
its tax policies. Preferential tax treatment is av ailable in our subsidy notification G/SCM/CHN/155 
and G/SCM/CHN/186, such as item 29.  
 
(vi) Competition and consumer protection policy        
(a) Legislative and institutional framework        
 WTO Secretariat's report, page 78, para-s 239 and 240     
 
The Secretariat's report describes China's legislation concerning competition.  
  WT/TPR/M/264/Add.1 
 Page 177 
 
 
  96. How does China balance the principl es referred to in paragraph 240 in  view of the fact that the 
AML does not take precedence over comp etition-related legislation?   
 Answer: China has multiple laws and regulations regula ting market economic activities.  Each law or 
regulation has its own application and supplements each other so as to mutually promote the sound 
development of Chinese socialist market economy.  Di fferent laws and regulations are subject to the 
principle that superior law takes precedence over in ferior law and new law takes precedence over old 
law when they are applied. 
 
WTO Secretariat's report, page 78, para. 242  
 
The Secretariat's report states that "Under Article 7 of the AML, the State protects the "legitimate 
business operations" of firms in industries that are vital to the national economy and national security 
where the state-owned economy is dominant, and in the industries of exclusive trading.  It also states 
that the State will supervise and regulate the above -mentioned firms' operations and the prices of the 
goods and services they supply, to protect consumer s' interests and to promote technology progress. 
This is apparently a compromise between in dustrial policies and competition policy. " 
 
97. How does China weigh the policy considerations ref erred to in Article 7 of the AML and what 
measures does it take to protect the "legitimate business operations" of the firms referred to?  
 
Answer:  Article 7 of the AML stipulates that the State protects the legitimate business operations of 
firms in industries that are vital to the national economy and national security where the state-owned 
economy is dominant and in industries that legally  implement exclusive operation and sale, and the 
State legally supervises and controls the business operations of and prices of the goods and services of 
said firms so as to protect consumers rights and interests and promote technology progress.  As 
competition in above-mentioned industries are restricted , there is indeed a nece ssity for the State to 
strengthen supervision and control of the opera tors business operation, such as implementing 
government pricing or government-guided prices in a ccordance with the provisions of the Price Law;  
according to the requirements of deepening the re form of petroleum, telecommunication, civil 
aviation, postal services, tobacco and salt industries and public utilities, pushi ng forward state-owned 
assets restructuring and forming a competitive market situation, guiding and promoting the competition among business operators and promoting t echnology progress in said industries;  legally 
investigating and penalizing abuse of market dominance by operators that impairs consumers 
interests. 
 
WTO Secretariat's report, page 78, para. 243   
 
The Secretariat's report informs about the enforcement of competition legislation.  
 
98. Could China provide a description of the c oordination procedures and mechanisms among the 
bodies involved in the formulation and enforcem ent of China's competition policy?     
 
Answer: Enforcement of competition legislation in Chin a is shared by three agencies, coordinated 
and "guided" by the Anti-Monopoly Commission under the State Council.  The Anti Monopoly Bureau of the MOFCOM is res ponsible for anti-trust reviews.  The Price Supervision and Anti 
Monopoly Bureau of the National Development and Reform Commission is the authority over price-
related violations of the rules against monopoly ag reements and abuse of market dominance and of 
administrative power.  The Anti-Monopoly and Anti -Unfair Competition Enforcement Bureau of the 
State Administration for Industry and Commerce (S AIC) enforces the Anti-Unfair Competition Law 
on issues related to monopoly agreements, abuse of market dominance, and abuse of administrative 
powers (excluding price-related monopolies).  China continued to develop its  capacity on competition 
enforcement during the review period. WT/TPR/M/264/Add.1 
Page 178 
 
 
   
WTO Secretariat's report, page 78, para. 244        
 
The Secretariat's report informs that "In addition to administrative measures, parties injured by 
violations of anti-monopoly provisions may take their cases to the courts." 
 
99. What measures does China take to promote private litigation regarding Anti-Monopoly Law 
issues? What competition advoca cy initiatives is China taking?  
 
Answer: Since the implementation of the AML, the MOFCOM and other AML enforcement bodies 
has attached great importance to the propaga nda and training of the AML to improve the 
anti-monopoly legal sense of governmental depart ments, enterprises and the general public, which 
mainly include organizing AML training classes in various forms each year, publishing AML reading 
materials, actively launching international excha nges, and strengthening law enforcement capacity 
development. 
 
WTO Secretariat's report, page 78, para. 245   
 
China is becoming one of the large competition jurisd ictions in the world, and its authorities will be 
involved in most multinational transactions and enforcement actions.  The European Union is 
therefore very interested in knowing more about  the Chinese enforcement system and building close 
ties with its Enforcement Agencies with a view to build a strong enforcement partnership.  
 
100. Could China provide the following information:       
a. What initiatives could China envisage to take to  further improve efficiency of international 
cooperation on competition policy and enforcement, e.g. in relation to the fight of cartels and the 
designing of compatible remedies in merger review cases?     
 
Answer: China has always endeavouring to strengt hen cooperation and communication with 
international enforcement bodies and has begun to carry out close exchange and cooperation with 
AML enforcement bodies of other countries and regions  immediately after the AM L came into effect.  
The major forms of exchange and cooperation incl ude mutual visits, jointly convening relevant 
seminars, participating in related international conferences, entering into cooperation MOUs, etc.  
Currently, the NDRC, MOFCOM and SAIC have entered into anti-monopoly cooperation MOUs 
respectively with the Department of Justice and the Federation Trade Commission of the U.S., the 
Office of Fair Trading of the U.K. and the Kor ean Fair Trade Commission.  Currently, China is 
discussing with the AML enforcement bodies of the EU, Japan and some other countries and regions 
on the cooperation MOUs.  
b. Ad 260: Under what conditions  can MOFCOM exchange inform ation with other competition 
authorities?  What are the limits and what a re the possibilities in practical terms?      
 Answer: To the extent of the anti-monopoly inform ation exchange and cooperation mechanism 
framework established by MOFCOM and some juri sdictions and on the condition of compliance with 
law and maintenance of confidentiality, MOFCOM ex changed information with related jurisdictions 
on cases of concentration of undertakings jointly revi ewed by them and has achieved great effect.  
Whether exchange of case information is practicable  depends on the specific circumstances of the 
cases, whether there is a bilateral cooperation mechanism, confidentiality requirement, legal 
provisions of the related jurisdictions and their willingness to cooperate, etc.  
c. What mechanisms are China envisaging to apply with a view to actively cooperate and 
consult other competition authorities with a view to  seek to ensure that the timing of interventions 
coincide with interventions in other jurisdictions?  WT/TPR/M/264/Add.1 
 Page 179 
 
 
   
Answer: China has begun to carry out close exchange and cooperation with AML enforcement bodies 
of other countries and regions immediately after the AML came into effect.  The major forms of 
exchange and cooperation include mutu al visits, jointly convening rele vant seminars, participating in 
related international conferences, entering into co operation MOUs, etc.  China has entered into 
anti-monopoly cooperation MOUs with the Office of Fa ir Trading of the U.K. and the Korean Fair 
Trade Commission.  Currently, China is discussi ng with the AML enforcement bodies of the EU, 
Japan and some other countries a nd regions on the cooperation MOUs. 
 d. How does China consider dealing with conflic ting decisions on remedies in merger review 
cases? What type of procedures would China consider appropriate to resolve such issues?  
 
Answer: The impact of the same case of  concentration of undertakings  on competition may not be the 
same in different countries.  Each jurisdiction has the independent right to determine a case, including 
imposing remedial measures in a case.  The remedial  measures are usually proposed by the applying 
party, and the MOFCOM may, following evaluati on, approve with restrictive conditions such 
application if it deems the remedial measures bei ng applied for may reduce the adverse influence of 
concentration of undertakings on competition.  MO FCOM is willing to exchan ge relevant information 
with other jurisdictions on the condition that a ttention to the competition on the Chinese market is 
resolved 
 
e. Is China envisaging to increase transparency in its enforcement actions e.g. in terms of a 
higher level of publication of decisions?  
 
Answer: Article 44 of the AML explicitly stipulates that AML enforcement bodies shall legally 
render decisions and may make public the same to th e society in the event th ey deem the suspected 
monopoly acts constitute real monopoly acts after investig ation and verification.  This is conducive to 
the protection of the publics right to know and conducive to giving play to the oversight role of public opinion.  In 2011, NRDC investigated and penalized a series of cases, such as  the case of abuse of 
market dominance by two medicine enterprises in Shandong province. 
 
f. Could China envisage starting to publicise the reception of merger review notifications as is 
e.g. the practice in the EU? 
 
Answer: MOFCOM has made public to the society the decisions on prohibition of concentration of 
undertakings and the decisions on imposition of restrictive conditions on concentration of 
undertakings in a timely manner in accord ance with the provisions of the AML. 
 
g. Could China explain how its pre-notification consultations structured and implemented in 
practice? 
 Answer:  In accordance with the provisions of the Me asures for Notification of Concentration of 
Undertakings, prior to filing an official notificati on, operators participating in the concentration may 
apply for consultations with the MOFCOM in re lation to issues concerning notification of the 
concentration. Consultations shall be applied in a written form.  Practice shows that pre-notification 
consultations may help the notifying party to pr ovide complete and legally compliant notification 
materials and make good preparations for the registra tion and review of the concentration in a timely 
manner.  
h. A number merger review cases end up in a 2
nd (and 3rd) phase and still be accepted.  Could 
China please provide statistics on this and an indication on the reasons leading to this?     
 WT/TPR/M/264/Add.1 
Page 180 
 
 
  Answer: Since 2008, the number of concentration of undertakings cases accepted by MOFCOM has 
constantly increasing.  MOFCOM strengthens la w enforcement capacity development, actively 
enhance case handling efficiency, and tries and clo ses all cases within the time limit stipulated by 
laws with limited case handling resources.  MOFC OMs enforcement work is highly appraised and 
recognized by all walks of life in and outside of China.  
Administrative monopolies  
 
WTO Secretariat's report, page 82, para. 255     
 
The Secretariat's report states that "In terms of judicial remedies, it was not clear to the Secretariat whether the Anti-Monopoly Law or the Administrative Litigation Law will be applied in the event of 
administrative monopoly.  No case has been register ed in the courts against administrative monopoly 
since promulgation of the AML." 
 
101. Could China elaborate further on its practice for the application of the AML to administrative 
monopolies?  If there have not yet been any ca ses, could China explain the reason for this 
and whether such cases are under way?   
 Answer: When administrative organs and organizations  authorized by laws and administrative 
regulations to manage public affairs exercise ad ministrative power, they shall not abuse their 
administrative power or exclude or restrict competit ion by violation of laws or regulations, nor shall 
they abuse their administrative power to formulate any provisions that exclude or restrict competition.  
Any violator shall be ordered by the superior organ to  make rectification, and the principal directly in 
charge and other directly respons ible persons shall be imposed on sanctions in accordance with the 
laws.  AML enforcement bodies may propose their sugg estions on the handling thereof to the relevant 
superior organs.  
Anti-trust review  
 
WTO Secretariat's report, page 82, para. 256   
 
The Secretariat's report states "Under Chapter 4 of the Anti-Monopoly Law, all merger transactions above a certain threshold
 are subject to prior anti-trust review  coordinated by MOFCOM.  Between 
2008 and 2011, MOFCOM received 382 cases for revi ew, of which 371 were unconditionally cleared, 
10 were cleared subject to conditions, and 1 case was rejected.  Data on cases withdrawn by 
applicants were not made available to the Secretariat."  
102. Could China provide the following information:  
a. statistics regarding nationality of the parties to its merger review cases (approvals, 
prohibitions, remedies imposed?     
 
Answer:  MOFCOM has made public to the society the decisions on prohibition of concentration of 
undertakings and the decisions on imposition of restrictive conditions on concentration of 
undertakings in a timely manner in strict accordance w ith the provisions of the AML.  Please visit the 
MOFCOM website to search case announcements for the details. 
 
b. list of cases in which China has issued prohi bition decisions or imposed remedies? Could 
China include the names of the parties to these cases or as a minimum their nationality?    
 
Answer: From 2008 to 2011, MOFCOM has issued pr ohibition decisions on one case – Coca Colas 
acquisition of Huiyuan, and approv ed with conditions ten cases, i.e., InBevs acquisition of Anheuser-
Busch, Acquisition of Lucite by Mitsubishi Rayon, GMs acquisition of Delphi, Pfizers acquisition of  WT/TPR/M/264/Add.1 
 Page 181 
 
 
  Wyeth, Panasonics acquisition of Sanyo, Novartis ac quisition of Alcon, Uralkalis merger of Silvinit, 
Penelopes acquisition of Savio Textile Machinery,  acquisition of Samsungs HD driving business by 
General Electronic (China), China Shenhua Coal to Liquid and Chemical Co., Ltd. and Seagate 
Technology Company.  Please visit the MOFCOM we bsite to search case announcements for the 
details.  
c. list of cases which China approved and include th e names of the parties to these cases or as a 
minimum their nationality?  
 
Answer: MOFCOM has made public to the society the decisions on prohibition of concentration of 
undertakings and the decisions on c onditional approval of concentrati on of undertakings in a timely 
manner in strict accordance with the provisions of the AML.   
d. a description of its decision-making process in merger  review cases?  E.g. at what level is the 
decision taken?   
Answer:  During the anti-trust review of concentr ation of undertakings, MOFCOM may solicit 
opinions from relevant parties in light of the actua l needs based on review of the written notification 
materials and may hold forums, hearings, give out questionnaires and invite experts to give 
demonstrations, etc. when necessary.  A decision is  made independently and legally by taking into 
account the information given by various parties and in light of the evaluation of the impact of concentration of undertakings on market compe tition.  The major flows of the review are: 
(1) Pre-notification consultation; (2) Decision on case registration;  (3) Preliminary evaluation of the impact on competition; 
(4) Formulation and Implementation of the preliminary investigation plan; 
(5) Finding out the core issue of competition; (6) Decision on implementing further review; (7) Rendering a decision on further review a nd formulation of the further review plan; 
(8) Evaluation on impact on competition; 
(9) Decision on imposition of restrictive conditions; and 
(10) Announcement of the review decision. 
 
(c) Mergers and acquisitions 
National security review  
 
The Secretariat's report states that "Acquisitions of domestic enterprises by foreign investors are regulated by the Provisions on Mergers and Acqui sitions of Domestic Enterprises by Foreign 
Investors, last revised in June2009.  According to Article 31 of the Anti-Monopoly Law, acquisitions 
by foreign investors are subject to national security reviews in addition to anti-trust reviews, if the 
acquisitions are deemed to be related to national security." 
 
103. Could China please provide details on how the national security review measures are 
implemented? 
 
Answer: In order to promote the sound development of acquisition by foreign investors, the Circular 
on Establishing a Security Review System for Me rger and Acquisition of Domestic Enterprises by 
Foreign Investors was promulgated by the general office of the State Council in February 2011 based 
on the deep research and demonstration and in li ght of the internationally accepted practice and 
experience, which explicitly specifies the scope, cont ent, work mechanism a nd procedures of security 
review in foreign merger and acquisition cases, establishes a sound, uniform and standard security review system for foreign mergers and acquisitions, a nd betters the system of foreign investment laws 
and regulations in China. WT/TPR/M/264/Add.1 
Page 182 
 
 
   
WTO Secretariat's report, page 84, para. 266 
 The Secretariat's report notes that activities subject  to national security review are either defence-
related or related to the acquis ition of enterprises related to national security in the sectors of key 
agricultural products, key energy and natural resourc es, key infrastructure, key transportation, and key 
machinery manufacturing.  This definition of nati onal security goes beyond international practice.  
 104. Could China clarify and preferably exemplify ca ses where acquisitions in relation to key 
agricultural products, key energy and natural  resources, key infrastructure, key 
transportation, and key machinery manufacturing could be related to issues of national 
security?  The currently existing list of "key sect ors" is very vague. Could China thus make 
this more concrete? 
 Answer: There is no uniform definition of national secur ity on the international level currently.  
China will focus on the impact of a foreign M&A on the national defense, stable operation of national 
economy, the basic living order of the society, etc. when judging whether it threatens national security.  With respect to the stability of national economy, we mainly take into account the effective 
operation of the economic system.  With respect to the basic living order of the society, we mainly 
consider that the basic public services in  the people's life may not be affected. 
 
105. The review also stipulates that it could be ap plied retroactively if the scope of business of a 
merged entity changes.  Could China clarify whether this could mean that a company may 
face disinvestment after years in business because its business activities are then deemed to 
fall under national security?  How does China inte nd to ensure this provision does not lead to 
legal uncertainty?  
 
Answer:  In accordance with relevant provisions of China on foreign M&A security review, when 
foreign investors merge or acquire domestic enterp rises, which fall into security review scope, the 
investors shall file an application to the MOFCOM .  Foreign investors shall abide by Chinese laws 
and regulations and bear corr esponding legal liabilities when making investment in China. 
 
WTO Secretariat's report, page 85, para. 272        
 
The Secretariat's report notes that three cases have  been taken to national security review since 
March 2011.   
 
106. Could China inform what the sectors were that these reviews took place in, as well as to the 
outcome?   
 
Answer: These three M&A cases have a ll passed the security review.  China will publish relevant 
information in light of the progress of the foreign M&A security review system since its 
establishment. 
 
107. Will China publish annual repor ts on the details and functioning of the national security 
review?  
 
Answer:  Since the foreign M&A security review is still at an early stage, no annual report concerning 
national security review has been published by now. 
  WT/TPR/M/264/Add.1 
 Page 183 
 
 
  (viii) Intellectual property rights  
(a) Industrial property    Patents  
 
WTO Secretariat's report, pages 87-91        
 
The Secretariat's report describes the patent system.   108. Does the Chinese government foresee fines or any  penalty against patentees whose patents 
have been invalidated for lack of quality?  
 
Answer: Currently China has no provision of imposing fi nes or any penalty against patentees whose 
patents have been invalidated. 
 
Trade marks  
 WTO Secretariat's report, pages 91-93   
 
Cancellation actions are rejected most of the tim e because of the relative ease for the defendant in 
proving the he has actually used the registered mark. 
 
109. Does China have any plans to make the review  of evidence submitted by the trademark 
registrant more exhaustive and comprehensive? 
 
Answer: Over the years, SAIC attaches great importa nce to the application for canceling trademark 
registration.  In strict accordance with the rele vant provisions of the La w of Trademark and its 
Implementation Rules, China has been making exhaus tive and strict review of evidence submitted by 
the trademark registrant.  Due to the length of Court proceedings holders of re gistered trademarks are often obliged to co-exist 
with infringers for a long time.  When assessing the lik elihood of confusion, the Courts are taken into 
this period to reject the offense and impose the cohabitation.        
110. What measures does the Chinese Government inte nd to take to ensure a proper protection of 
trademarks and in particular of well-known trademarks? 
 
Answer: Due to the length of Court proceedings holders of  registered trademarks are often obliged to 
co-exist with infringers for a long time."  This  is a problem existing in all the countries. 
 In the future, the industrial and commercial authoriti es will continue to strengthen building a system 
and a mechanism of guarantee for registering, using,  protecting and administering trademarks.  It will 
work hard to combine day-to-day supervisi on with special law-enforcement activities, link 
administrative with criminal law-enforcement activiti es, coordinate registering, using, protecting and 
administering trademarks, and establish a long-term mechanism of protecting trademarks in line with 
law and in a regular and efficient way.  
There are cases reported by companies about "bad faith " application/registration of several trademarks 
in China by Chinese entities.      
111. How does the Chinese Government intend to prevent such cases in the future?  What are the 
legal tools a foreign company ma y use to prevent the bad faith registration of its trademark in 
China?  
 WT/TPR/M/264/Add.1 
Page 184 
 
 
  Answer:  The third amendment to the Law of Trademark,  which is now underway, fully considers the 
problem of trademark preemptive registration a nd makes corresponding provisions.  SAIC will 
continue to closely examine the trademark applicatio n and reject the bad-faith application/registration 
of trademarks in accordance with law, severely deal with cases of bad-faith application/registration 
and expose some of them, and continue to  effectively check the acts of bad-faith 
application/registration of trademarks.   Any foreign company may handle the case of bad-faith  registration of trademark through trademark 
opposition or dispute procedures in accordance with  the Law of Trademark and its Implementation 
Rules, or handle it through judicial proceedings in  accordance with the releva nt provisions in China's 
civil procedural laws.   
112. Can the final judgment that orders the mod ification of a company name that infringed 
previous IPR be enforced 15 days after being notified?    
 Answer:  In accordance with the relevant stipulations  in the current laws and regulations on the 
administration of registering the names of enterp rises, such as Administra tive License Law, Company 
Law, Regulations on Registration Administration of Companies, Provisions on Administration of 
Enterprise Name Registration, where an enterprise intends to alter its name, it shall apply to the 
registration authority for modification of registrati on; neither judicial authority nor administrative 
authority has the right to initiate the procedure of compulsory alteration of an enterprise's name, or 
substitute the relevant enterprise to determine the change of its name, or determine a name for an 
enterprise.   
 
(d) Enforcement  
 
WTO Secretariat's report, page 95, para. 321       
 
The Secretariat's report states that "During the last TPR of China, a number of its trading partners expressed concerns about the lack of effective enfor cement of intellectual property rights, particularly 
at the regional and local levels.  China was urged to step up its efforts in enforcing IPR protection, 
including greater and effective customs control and criminal prosecution."   
113. In the framework of the steps undertaken by China in order to improve the enforcement of 
intellectual property rights, is there any sp ecific measure related to GIs protection? 
 
Answer:  China strictly protects all kinds of intellectual property rights on an equal footing.  There is 
no specific measure with regard to GIs protection  
114. What steps is China taking to ensure that the criminal penalties for IPR infringement are 
punitive (i.e. significantly exceed the value of the products infringed), deterrent (i.e. highly 
likely to be imposed), and swiftly enforced?       
 
Answer: The Chinese laws stipulate severe punishment for IPR-related crimes.  The People's Court 
strictly gives penalty for IPR-related crimes it ha ndles in strict accordance with laws and relevant 
judicial interpretations, including imprisonment penalty  and property penalty, so  as to ensure that the 
accused receive the punishment corresponding to his/its crime.  For relevant stipulation on fines and 
the payment of fines, please refer to Interpreta tion of the Supreme People's Court and the Supreme 
People's Procuratorate Concerning Some Issues on  the Specific Application of Law for Handling 
Criminal Cases of Infringement upon Intellectual Pr operty Rights (II).  In addition, according to the 
Criminal Law, all money and property illegally obt ained by a criminal shall be recovered, or 
compensation shall be ordered, and the possessions of the criminal that are used in the commission of 
the crime shall be confiscated.  WT/TPR/M/264/Add.1 
 Page 185 
 
 
   
115. Can Chinese Government ensure consistency between  local trade fair regulations with state 
trade regulations in order to guarantee that th e lack of effective judicial verdict against an 
exhibitor in a former fair will not prevail th e legitimate IPR holder to go against the same 
exhibitor in a new fair, especially if both fairs are only few months apart?          
 
Answer: Please clarify what lack of effective judicial ve rdict means in the question.  If it refers to the 
situation that a case is in court proceeding and h as not been concluded with an effective judicial 
verdict, according to Article 17 and 20 of Measures for the Protection of Intellectual Property Rights 
in Exhibitions, in the event that a dispute between  a right holder and an exhibitor is under judicial 
proceeding, if the right holder complains and re quests for administrative remedy against the same 
exhibitor in a new exhibition, local IPR office and administration for industry and commerce would not accept the complaint and take actions.  WTO Secretariat's report, Tables III.11 and III.12, page 86 and 95        
 
The Secretariat's report in Tables III.11 and III.12 gi ves an overview about intellectual property rights 
application in 2009-10 and about inte llectual property enforcement 2008-10.  
 116. Could China indicate in which entry of these t ables are included GIs?  Is it possible to have 
specific figures for GIs in relation to these tables? 
 
Answer: According to statistical data, in the speci al campaign cracking down on IPR infringements 
and manufacturing and selling counterfeit and sho ddy goods from October 2010 to June 2011, the 
industrial and commercial authorities nationwide put on file for investigation and dealt with 648 cases 
related to GI infringements. 
 
IV. TRADE POLICIES BY SECTOR        
(5) AGRICULTURE        
(i) Agriculture in China         
 
WTO Secretariat's report, table IV.1, page 99        
 
Note 3 to Table IV.1 in Secretariat's report states th at "In 2009, data for agriculture and forestry were 
adjusted according to the new Products Catalogue for Statistics".      
 
117. Could China provide more information on ho w the adjustments resulting from the new 
Products Catalogue for Statistics affect the data for agricultural products?         
 
Answer: Both in the new Products Catalogue for Statis tics applied since 9 February 2010 and the new 
Industrial Classification for National Economic Ac tivities applied since 1 November 2011, the 
collection of wild plants is diverted from agriculture into forestry.  At the sa me time, the collection of 
nuts including walnut, chestnut, etc. and seasonings like Sichuan pepper and star anise is diverted from forestry into agriculture.  Fo r the sake of comparability, adjust ment was accordingly made on the 
2009 production values for agriculture, forestry, liv estock and fishery respectively.  The value of 
agriculture production 2009 was modified from 3, 061.11 billion yuan to 3,077.75 billion yuan while 
the value of fishery production was modified from 235.94 billion yuan to 219.3 billion yuan.  The 
sum of values of agriculture, forestry, li vestock and fishery remained unchanged. 
 WT/TPR/M/264/Add.1 
Page 186 
 
 
  (ii) Agriculture policies  
 WTO Secretariat's report, page 102, para. 10        
 
The Secretariat's report describes agricultu re policy related objectives in China's 12
th Five-Year Plan 
(2011-2015), including "//Other measures set out in the plan include increased minimum purchase 
prices for key grains, and improving temporary purchase and storage of bulk agricultural commodities." 
 
118. How much are the minimum purc hase prices envisaged to increase and for which products?         
 
Answer:  In order to prevent the excessive price fall and protect farmers interests, the Chinese 
government will continue on the implementation of  minimum grain purchase policy of rice and wheat 
in the main producing areas during the 12
th Five Year Plan.  When setting the annual minimum 
purchase price of rice and wheat, the government will take factors like costs of food production, 
supply and demand condition and market prices into consideration. The price level will increase in 
accordance with the rise of costs.  
WTO Secretariat's report, page 103, para. 14        
 
The Secretariat's report states that apart from mini mum purchase prices for rice and wheat, China also 
uses government temporary purchasing and stockpiling for some other commodities.   
119. Could China explain how the temporary pu rchasing is applied and how it differs from 
purchasing at minimum prices for rice and wh eat?  What commodities are concerned by 
temporary purchasing?  
 
Answer: Interim purchasing and storage policy applies also to cotton and sugar in addition to rice and 
wheat.  
 
120. How are the prices at which products are bought in to temporary stockpiling determined?      
 
Answer: Interim purchasing price is set according to the costs to farmers of growing grain with 
reference to market price.  121. How is government temporary purchasing a ccounted for in China's domestic support 
notifications?       
 
Answer: Issues relating to stockpiling have been addr essed when China prepared its domestic support 
notification.   122. Could China provide information on quantiti es which were bought into temporary stockpiling 
since 2006?   
 
Answer:  Rice, wheat, cotton, sugar were subject to inte rim purchasing and storage.  All relevant data 
are available in China's regular agriculture notifications.    WT/TPR/M/264/Add.1 
 Page 187 
 
 
  (a) Import measures 
Insurance programmes   
WTO Secretariat's report, page 104, para. 24        
 
According to the Secretariat's report, "In response to  the very low insurance coverage for farming in 
China and the high degree of risk of drought or fl ooding, a pilot insurance scheme was introduced in 
2007 with geographical coverage limited to six provinces.  Coverage had been extended to 
28 provinces by end 2010.  Insurance premiums ar e subsidized by the central and local governments 
with farm households paying the balance of about 20-30%."  
 
123. Has the coverage of insurance programmes been further extended since end 2010?  
 
Answer: Since 2007, China's total accumulated premiu m income from agricultural insurance in 
five years has been over 60 billion yuan, an averag e annual growth rate of 85%.  In 2011, China's 
premium income from agricultural insurance reach ed 17.38 billion yuan, an increase of 28.1% on 
year-on-year basis, covering 652.3 billion yuan for agricultural risk.  Since 2011, China's agriculture 
insurance coverage continues to expand.  
 
In 2012, the central government incorporated the su gar crop into the premium subsidies range, up to 
15 varieties financed by the central budget. 
 
124. Could China provide information on detailed criteria under which the insurance payments 
are granted?  
 Answer: According to Methods on the Management of the Insurance Premium of Farming Subsidies 
from Central Finance (Cai Jin [2008] 27), when it co mes to farming, the insurance amount will be the 
direct materialization costs produced during the growing period of the insurance subject matter.  In actual operation, the local insurance amount varies , and will generally be lower than the direct 
materialization costs.  
 
According to Methods on the Management of the Insurance Premium of Aquaculture Subsidies from 
Central Finance (Cai Jin [2008] 27), when it comes to aquaculture, the insurance amount of subsidies 
to insurance will be determined in  accordance with the physiological value of the insured individual 
(normally includes the purchase price and rearing cost s).  When it comes to the approach to assessing 
damages, there are differences at local level.  Many local authorities will compare the insurance 
amount of the insured livestock with the market va lue in the event of the accident in order to 
determine the amount of compensation. 
 
Input subsidies   
WTO Secretariat's report, page 105, para-s 25-30  
The Secretariat's report describes China's input subsidies.  
125. How is the Comprehensive Subs idy on Agricultural Inputs no tified in China's domestic 
support notifications? 
 
Answer: The comprehensive subsidy for agricultural inputs is a support measure under amber box for 
non-product-specific, within the de minimis  limits. 
 
126. Could China explain the important increase in spending for the Comprehensive Subsidy on 
Agricultural Inputs (paragraph 25)?  WT/TPR/M/264/Add.1 
Page 188 
 
 
   
Answer: Comprehensive Subsidy on Agricultural Inputs is provided in order to compensate the 
increasing expenses for farmers caused by the price hi kes of agricultural inputs.  The amount of this 
subsidy is determined by the effect caused by the price hike. Recent years, the price of main 
agricultural inputs is rising significantly.  Therefore, the amount of the Comprehensive Subsidy on Agricultural Inputs has increased accordingly. 
 
127. How is the New Variety Extension Payment scheme notified in China's domestic support 
notifications? 
 
Answer: China has notified crop seed subsidies as product-specific amber box support measures, and 
the support level is within the de minimis  range.  There has already been existing level of each 
product-specific amber box support in China's notification.  128. Could China provide information on the individual amounts of subsidies paid under the 'New 
Variety Extension Payment' for the eligible products since 2006?  
 
Answer:  China has notified crop seed subsidies as product-specific amber box support measures, and 
the support level is within the de minimis  range.  There has already been existing level of each 
product-specific amber box support in Chinese bulletin. 
 
129. Could China provide informa tion on the total spending on the different types of input 
subsidies described in paragraphs 25-30 since 2006?       
 
Answer:  Relevant data is included in the communica tions on domestic support to agriculture that 
China notified to the WTO.  In the communications, th ere has been relevant data in the input subsidies 
of non-product-specific amber box support.  
130. How is the subsidy for purchases of agricu ltural machinery included in China's domestic 
support notifications?  
 
Answer:  China notified the subsidy for purchasing ag ricultural machines as a support measure under 
amber box for non-product-specific, within the de minimis  limits. 
 
Internal price supports  
 
WTO Secretariat's report, page 106, para-s 31-34       
 
The EU notes that, according to the information in the Secretariat's report, Chinese government 
purchases of different commodities are aimed at supporting domestic prices.   131. Could China complement the information in  the report with information on public 
stockholding for food security purposes undertaken by the authorities and notified in domestic support notifications under the relevant par agraph of Annex 2 of the Agreement on 
Agriculture? 
 Answer: The relevant data has been provided to th e WTO during Committee of Agriculture regular 
meeting about the situation,  and there is no new data. 
 
WTO Secretariat's report, page 106, para. 31       
 
The Secretariat's report states that "In addition to border measures that, to some extent, protect the internal market from competition from imports, China has a number of programmes that support  WT/TPR/M/264/Add.1 
 Page 189 
 
 
  domestic prices.  Minimum purchase prices for rice and wheat are set each year by the National 
Development and Reform Commission.  Although the pr ices have been rising each year (Table IV.6), 
the purchase price for rice has usually been belo w the world market price. //".       
 
132. Could China indicate quantities which were bought by the authorities under the minimum 
prices for wheat and rice in the years presented in Table IV.6?  
 
Answer: The relevant data has been provided to th e WTO during regular communications of the 
situation, and there is no new data. 
 
133. Are the minimum purchase prices quoted in Tabl e IV.6 applied in a uniform manner in all 
principal grain producing areas in China?  
 
Answer: Minimum Purchasing Policy applies only to principal growing areas of wheat and rice.  
 
134. Could China confirm that wheat and rice are th e only products subject to minimum purchase 
price?  Has corn ever been included in this system?  
 
Answer: China has introduced the minimum purchase pr ice system on wheat and rice in their 
principal growing areas respectively since 2004.  No other grains have ever been covered by this 
system.  
WTO Secretariat's report, page 106, para. 33   
 
The Secretariat's report states "In addition to the Minimum Purchase Prices Scheme, the State takes 
other measures to adjust the supply and demand of  certain agricultural products, such as purchasing 
and stockpiling on an ad hoc basis, and stock releasing for sugar cane and sugar beet, soybeans, 
maize, rapeseed, and cotton.  The main distributors of grains are state-trading enterprises, such as 
Sinograin, which purchase from producers, and sell to processors through weekly auctions.  In order 
to reduce demand and prices for grains, the State deci ded in November 2010 to restrict auctions to 
flour millers, feed millers, and livestock producers.  According to the authorities, purchases and sales 
from the national grain reserves by the State Administration of Grain take place at market prices."   
135. Could China explain how the "other measures to adjust the supply and demand of certain 
agricultural products" described in the first se ntence of paragraph 33 are accounted for in 
China's domestic support notifications?       
 
Answer: These issues have been addres sed when China prepared its domestic support notification.  
 
136. Could China confirm whether the ad hoc purchas ing and stockpiling referred to in para. 33 is 
the same measure as the tem porary purchase and storage referred to in paragraph 10?  If 
this is not the case, please explain both measures and list products eligible. 
 
Answer: With regard to cotton, the ad hoc purchasing and stockpiling referred to  in para. 33 is the 
same measure as the temporary purchase and storag e referred to in paragraph 10.  However, 
sugarcane and sugar beets are not subject  to ad hoc purchasing and stockpiling. 
 
137. How is the stock releasing for sugar cane and beet operated?  
 
Answer: There are no reserves of sugarcane and sugar beets, so the problem of stock releasing for 
sugar cane and beet does not exist.  WT/TPR/M/264/Add.1 
Page 190 
 
 
  WTO Secretariat's report, page 106, para. 34        
 
According to the Secretariat's report, "For suga r cane, provincial governments administer and set 
purchase prices.  The purchase price varies from one province to another but has increased steadily 
over the past six years and is now about 500 per tonne.  The Government and local authorities hold 
stocks of sugar, with purchases and sales aimed at stabilizing prices based on decisions from the 
National Development and Reform Commission.   For the year ending 30 September 2010, 
1.71 million tonnes were auctioned from State sugar reserves."   
 
138. Could China explain how the purchase pr ices and the auction prices for sugar cane 
mentioned in paragraph 34 relate to market prices? 
 
Answer:  The purchasing prices of main producing areas of sugarcane are set by provincial authorities 
in accordance with actual situations. Issuance of  sugar will adopt the method of competitive bidding 
and its final scale price will still be decided by the market. 
 
139. How is the purchasing and stocking of sugar as described in paragraph 34 accounted for in 
China's domestic support notifications? 
 Answer:  China is still in coordination with competent au thorities to provide responses to the question.  
 
(d) Support levels 
 WTO Secretariat's report, page 107, para. 39     
 The Secretariat's report informs that "Most support no tified as being in the Green Box is provided for 
general services, where infrastructure and other genera l services together represent nearly half of the 
total.  While expenditure under all headings has increased (except for financial assistance to 
low-income households), it has been particularly  rapid for compensation for losses due to natural 
disasters and for direct payments to farmers (whi ch were introduced in 2004) (Chart IV.2(a))."  
 
140. Could China provide more detailed information on  the type of measures which are classified 
under general services? In particular, the EU would be interested to know examples of 
activities supported under infrastructural services, and other general services.    
 
Answer:  The general services provided by the Government includes research, pests and diseases 
control, training services, extension and advisory services, inspection services, marketing and promotion services, infrastructural service and other general services.  The infrastructure service includes flood control projects, drainage and irri gation facilities, roads in rural areas, small-sized 
water conservancy facilities, soil and water conser vation works.  Other general services include 
expenditures on the running and operation of agricu lture-related administrative and service agencies 
and their personnel expenses. 
 
WTO Secretariat's report, page 110, Table IV.7        
 
Table IV.7 gives an overview about Total producer  support estimate and single commodity transfer 
values for selected commodities, 2002-10.   
 
141. Could China explain the reasons behind the sudden increase in product support estimate for 
pig meat between 2007 and 2008?   
  WT/TPR/M/264/Add.1 
 Page 191 
 
 
  Answer: The price of pig meat increased significantly  in 2007.  Therefore, Chinese government 
implemented some support policies in order to stabili ze the price.  These support policies are in line 
with WTO rules.  
 
(5) SERVICES        
(i) Overview         
 WTO Secretariat's report, page 121      
 
With regard to construction services, not specifically  mentioned in the report, China is one of the 
biggest and fastest growing construction market and very competitive in construction services, but 
only allows limited market access fo reign service providers.       
 
142. Does China intend to further open this sector to foreign participation?  
 
Answer: We believe that the opening-up of service industry among WTO Members will benefit the 
further development of trade in services and we ar e willing to participate in competition with the 
broader world.  China is willing to discuss further market liberalization on a reciprocal basis with 
other WTO Members in the market acc ess negotiations under the Doha Agenda. 
 
Also professional services are not specifically mentioned in the Secretariat's report.  
143. With regard to professional services, could China explain: 
a. Is China considering removing restrictions wh ich prevent foreign law firms from advising on 
Chinese law and harmonising the treatment of foreign and domestic law firms with respect to 
operating in China?     
 
Answer: Like in many other WTO Members, foreign law firms are not permitted to practice domestic 
law in China.  China has libera lized the legal service sector according to its accession commitments 
and will continue such liberalization. Foreign la w firms could provide the service that China has 
committed when accessing WTO in the form of representative office. 
 
b. What is the timetable for harmonising the treatment of foreign and domestic holders (and 
issuers) of professional service qualifications, e.g. engineers, accountants, auditors, actuaries, and 
architects? 
 
Answer: First, with respect to the issue of mutual r ecognition of professional technical qualifications:  
Professional technical qualifications are professional qualifications set by the State for special occupations and are also administrative measures commonly adopted by various countries in the world.  Due to the difference in the administra tive system, economic and social development and 
culture, the standards and requirements of the same t ype of qualification also vary greatly, therefore, 
the precondition for harmonising the treatment of fo reign and domestic holders of professional service 
qualifications is the mutual recognition of correspon ding qualifications.  By no w, no government of 
any EU member has proposed to China to launch  research on the mutual recognition of relevant 
professional technical qualifications.  China is willi ng to exchange information with the EU on the 
mutual recognition of professional technical qualifications. 
 
Secondly, with respect to the registered practi ce between China and the EU: on the one hand, since 
there is no professional qualification mutually dete rmined and recognized by bilateral or multiple 
governments, there is no position to consider the issue of harmonising registered professions;  on the other hand, personnel who have ac quired relevant professional qualif ications may start practice only 
after they have gone through registration with the co mpetent authority.  Such registration is mainly 
undertaken by relevant industrial administrative departments under the State Council or the legally WT/TPR/M/264/Add.1 
Page 192 
 
 
  authorized units, for example, the registration of regi stered architects is undertaken by the Ministry of 
Housing and Urban-Rural Development.  
Thirdly, with respect to the issue of professional te chnical titles: in China, professional technical titles 
are the qualifications to undertake corresponding pr ofessional technical positions in enterprises and 
public organizations, which do not  equal to professional access qualifications.  Other countries do not 
have similar professional technical qualifications.  Therefore, it is difficult to discuss the issue of harmonising.  However, foreigne rs who have acquired the Chinese  employment permit may obtain 
relevant qualifications to take corresponding positions through the national uniform professional 
examinations and the employers may select and employ personnel to take professional technical 
positions depending on their needs, such as economist,  accountants, actuaries, auditors, IT software 
engineers, etc. 
 
(ii) Financial services 
(a) Banking 
Licensing requirements and procedures        WTO Secretariat's report, pages 126-127, para-s 111-116      
 As the Secretariat's report points out, the licensing requirements and procedures are very divergent 
and there is no umbrella license or single point of contact in China for financial institutions. 
 
144. In this regard, could China provide information:     
a. Are there any advances in speeding up and maki ng more transparent the approval process 
(CBRC, PBOC, SAFE, CSRC)?  
 
Answer: Pursuant to Administrative Licensing Law, Securities Law, Securities Investment Fund 
Law, the approval process and time limit for processi ng the applications for establishing the securities 
company and fund management company are specifically stipulated.  From March 2010, the CSRC disclosed the status of application acceptance and ve rification on its official website, and the specific 
verification process for establishing fund management  companies are also publicized by the CSRC in 
this April.  In sum, the approval process is already transparent enough. 
 
b. What are the possibilities of increasing coop eration among the different regulatory bodies 
and creating a government authority to coordinate th e different offices, and in particular has China 
considered establishing a single point of contact?      
 
Answer: China attaches great importance to the regulatory cooperation among the different 
regulatory bodies.  After several years efforts, the relevant authorities have already set up a coordination system based on the principle of di vision with individual responsibility and mutual 
coordination, to facilitate the regulatory cooperati on in the financial industry, which can be summed 
up as follows:  
 
First, we have established a regul ation and coordination system at the level of the State Council and 
senior financial supervisors have researched, di scussed, analyzed and demonstrated major urgent, 
important and strategic events and issues in th e macro-economy and finance sectors, effectively 
facilitating the information communication, coor dination and cooperation among various financial 
regulators. 
 
Second, the financial regulators at various le vels have signed memo randum of understanding on 
regulation cooperation.  In June 2003, the Me morandum of Understanding on the Regulatory and 
Supervisory Responsibilities was signed by the CBRC,  the CSRC and the China Insurance Regulatory 
Commission (CIRC), and the Memorandum of Unde rstanding on Strengthening In-depth Cooperation  WT/TPR/M/264/Add.1 
 Page 193 
 
 
  and Inter-industry Regulation C ooperation in Banking and Securities Industries was signed by the 
CBRC and the CIRC in 2008.  
 
Third, we promote information sharing. In 20 05, the CBRC, the CSRC, the CIRC and the People's 
Bank of China jointly set up a system of financial st atistical information and sharing, and formulated 
the Interim Measures of the CBRC, the CSRC, the CIRC and the People's Bank of China for 
Information Sharing which stipulates the contents , ways, working mechanism and the responsibilities 
of all departments concerned of information sharing.   The dispatched organs in various regions under 
the CBRC and the Peoples Bank of China established an information sharing mechanism in 2009. 
 
Nevertheless, we are fully aware that the issue of regulation coordination and cooperation remains a 
worldwide regulatory difficulty.  The Chinese fi nancial regulators will, based on existing 
achievements, further strengthen the building of various coordination mechanisms, boost the 
cooperation among all parties concerne d and facilitate the steady devel opment of financial industries. 
 
c. Has China considered reviewing the Prudentia l Ratios (CBRC) so assets and liabilities can 
be compared with the same tenor?      
 
Answer:  China is still in coordination with compet ent authorities to provide responses to this 
question. 
 
d. Does the Chinese government plan to implem ent any advance in the area of increasing 
foreign debt quota?        
 
Answer: China is still in coordination with competen t authorities to provide responses to this 
question. 
 
e. Can the five-year transition period for the Loan-to -Deposit Ratio Requirements start from the 
date of incorporation for each bank?        
 
Answer: The five-year transition period for the Loan-to-Deposit Ratio Requirements start from 2007. 
 
WTO Secretariat's report, page 127, para. 115     
 
During the last TPR in 2010, China announced that the financial regulatory authorities still needed 
time to evaluate the result of the pilot of allowi ng commercial banks to establish fund management 
companies before deciding on what is the next step  for the further liberalization of this business.  
 
145. Have the Chinese Authorities assessed the situati on and when is China going to allow foreign 
banks to establish fund management companies?      
 Answer: Currently, some commercial banks are allowed to establish fund management companies on 
a pilot basis. The financial regulatory authorities still need time to evaluate the result of the 
experiment and the current market situation before deciding on what is the next step for the further 
liberalization of this business.  Foreign banks   WTO Secretariat's report, page 128, para. 121  
 
According to Art XVI.2 (f) of GATS, quantitative lim itations on foreign ownership need to be listed. 
China has not listed foreign equity caps for financ ial institutions; however, as confirmed during last WT/TPR/M/264/Add.1 
Page 194 
 
 
  TPR by China, no single foreign financial institu tion may own more than 20% of the equity of a 
Chinese financial institution.      146. When is China planning to eliminate the violation of its WTO commitments and permit full 
foreign ownership of Chinese banks?      
 
Answer: According to China's Services Schedule, qualifie d foreign financial institutions are allowed 
to establish wholly foreign-owned banks, including  subsidiaries and branches.  However, China did 
not make commitments on the acquisition of existing domestic banks by foreign financial institutions.  
Nevertheless, China has decided to allow forei gn investors to acquire equities of Chinese-funded 
banks up to a certain level on the voluntary basis.  According to the Measures on Administration of 
Equity Investment of Overseas Financial Institutio ns in Chinese-funded Financial Institutions, the 
percentage of equity investment of a single ove rseas financial institution in a Chinese-funded financial 
institution may not exceed 20%.  This practice is not in violation of China's WTO commitment.  
 
Furthermore, China's banking market is still under-devel oped.  With the international financial crisis 
not being out of the scene, we have to be cautious  in further liberalizing China's banking market.  On 
the other hand, such measure is within the meani ng of the prudential measures provided for in the 
Annex on Financial Services under the GATS, the im plementation of which is for the purpose of the 
protection of investors, depositors and ensuring th e integrity and stability of the financial system. 
 Another important issue not directly mentioned in the report, but raised during the previous TPR is the fact that China has introduced a requirement for IT -onshoring (all data handled by the bank needs to 
be physically kept and processed in China) for commercial banks.  This requirement goes 
considerably beyond the category of "settlement and clearing services for financial assets", which 
China's had not committed and is covered by Ch ina's GATS commitments on data transfer and 
processing.  
147. When is China planning to eliminate the violation of its WTO commitments and allow data 
transfer and processing other than settlement and clearing services for financial assets?  
 
Answer: Pursuant to the Article XIV of GATS, WTO Me mbers shall be entitled to adopt and enforce 
related laws and regulations for the protection of  the privacy of individuals in relation to the 
processing and dissemination of personal data and th e protection of confidentiality of individual 
records and accounts, subject to the consistency w ith the provisions of GATS and the requirement that 
such measures are not applied in a manner which would constitute a means of arbitrary or 
unjustifiable discrimination between countries where lik e conditions prevail, or a disguised restriction 
on trade in services.  This practice is not in relation of China's WTO commitment.  In consideration of individual privacy, data prot ection and financial information security as well as the 
prudential requirements on regulators, China has formulated related policies to attach great 
importance to and stipulate specific requirements on information security, data confidentiality and 
other issues.  For instance, the Electronic Paymen t Guidelines (No. 1) (Announcement of the People's 
Bank of China, [2005] No.23), the Guiding Opinions of the Peoples Bank of China on Further Strengthening Insurance of Information Security of Banking Financial Institutions (Yin Fa [2006] 
No.123), the Notice of China Banking Regulatory Commission on Solely Foreign-funded Banks and 
Sino-foreign Equity Joint Banks to Engage in th e Bank Card Business (Yin Jian Fa [2007] No. 49) 
and other rules and regulations explicitly stipulat e requirements on establishing data systems within 
China by the institutions engaged in domestic bank card business.  Therefore, the policies on 
establishing important financial data processing sy stems within China have been explicit and 
consistent, without any change.  At the same time, the requirements on establishing data systems 
within China have equally applied to Sino-funded  and foreign-funded ins titutions, and there have 
been no discriminatory treatment to foreign-funded banks.  WT/TPR/M/264/Add.1 
 Page 195 
 
 
   
(b) Securities Regulatory and legislative framework 
 
(c) Insurance  Regulatory and legislative framework   WTO Secretariat's report, pages 133 and 136, para-s 146 and 159  
 
During the last TPR, China explained that further assess ment of the market situation of the insurance 
brokerage sector is necessary to further liberalise the market.       
148. Has China carried out this asse ssment and is China considering lifting  the limits for foreign 
invested brokerage and fund management?   
 
Answer: With regard to the elimination of limitations  on the business scope of foreign-invested 
insurance brokerage companies, except for broke rage services for large scale commercial risks, 
international marine, aviation, and transport insurance, and reinsurance, China did not make any other 
commitments on insurance brokerage services.  At th e current stage, China is not in a position to 
make further commitments in this regard. 
 With regard to the elimination of limitations on the foreign equity ownership in fund management 
companies, according to China's WTO commitmen ts, foreign services suppliers are permitted to 
establish joint-ventures with foreign investment up to 33% to conduct domestic fund management 
business.  Within 3 years after China's accession, fo reign equity ownership could be increased to 49%. 
China has fully implemented the aforementioned commitments. 
 In order to realize good corporate governance,  secure the checks and balances among the 
shareholders, avoid the creation of one dominant sh areholder and maintain the independence of the 
companies, it is appropriate for China to limit th e shares held by foreign shareholders in a joint-
venture fund management company to no more than 49% of the total.  Furthermore, according to 
relevant regulations, even though a fund management company is wholly Chinese owned, the largest 
shareholder shall not have more than 49% of the to tal share. In this respect, foreign investors are 
treated equally.  Currently, we have no plan to change the policy. 
 
(iii) Telecommunications 
(a) Market structure  WTO Secretariat's report, page 137, para. 167   149. While the main Chinese telecommunication comp anies are majority state owned, how does 
China ensure regulators to be independent from the operators?  
 
Answer: As early as in 1998 when it was established, the former MII separated itself structurally and 
financially from all the telecommunications operat ors and services suppliers in the Chinese market.  
The newly established MIIT, which is the successor of  the MII, resumes the role of an independent 
regulator. MIIT complies with the requirements of independent regulator as provided for in the 
Reference Paper.  Although the main telecommunication companies are majority state owned the government does not intervene the manage ment and operation of these companies 
 WT/TPR/M/264/Add.1 
Page 196 
 
 
  (b) Regulatory regime  
 WTO Secretariat's report, page 141, para.     
 
The Secretariat's report describes the basic telecommunication market.   
150. Could China provide information whether there is any intention to open the market also for 
foreign investments and service provider in the near future?  
 
Answer: China has liberalized the telecommunica tion services sector in line with its WTO 
commitments. China has made substantial commitm ents in the basic telecommunication sector, and 
the level of commitments is relatively higher in th e developing Members.  It is our position that 
further liberalization of telecommunication services sector is subject to the DDA negotiations. 
 
WTO Secretariat's report, page 141, para. 185       
According to the Secretariat's report, China has issued two new regulations, No. 187, 2009 and 
No. 48, 2011 regarding interconnection.    151. Could China elaborate what type of protective measures of network architecture on the 
interconnection between networks the basic telecom services opera tors are supposed to 
apply? 
 
Answer:  To protect the network architecture, MIIT has adopted many measures.  For example, it 
requires the basic telecommunications services provide rs establish the gateways between networks in 
pairs.  Through protecting the network architectur e, the quality of network communication could be 
enhanced, and all the consumers would be nefit from better quality of communication. 
 
152. Could China elaborate more specifically the aim of the Measures on Supervision and 
Administration of Interconnection Quality between  Internet Backbone Networks - how exactly 
is the processing of interconnection regulated  and smooth interconnection between internet 
backbone networks guaranteed? 
 
Answer:  To enable the Internet users to benefit more from Internet and effectively protect their rights, 
MIIT attempts to secure the quality of Internet communication through various measures. In terms of 
networks interconnection, MIIT monitors the commun ication quality of interconnection and then gets 
the real time information. So MIIT can directs the basic telecommunication enterprises expand their 
capacity in time to satisfy the demands of  Internet users on interconnection visit.  
 
WTO Secretariat's report, page 143, para. 189    
 The Secretariat's report states that "Internet providers are subject to several layers of regulation. //".  
 
153. Could China describe in details  the several layers of regulation In ternet providers are subject 
to (especially with emphasis on foreign funded)?       
 
Answer:  The Chinese government regulates the Internet  in accordance with relevant laws and 
regulations.  Since 2000 China has enacted a seri es of laws and regulations concerning Internet 
regulation, including the Decision of the National People's Congress Standing Committee on Guarding Internet Security, Regulations on Teleco mmunications of the People's Republic of China, 
and Measures on the Administration of Internet In formation Services, which stipulate the legal 
responsibilities of each kind of Internet service providers.  
  WT/TPR/M/264/Add.1 
 Page 197 
 
 
  China always adopts the opening-up policies and is  willing to share with the world the opportunities 
that come along with the development of the inte rnet in China.  The Chinese government has always 
honoured the rules of the WTO and accession commitme nts, protected the legitimate interests of the 
foreign enterprises in China, and provided sound services for the fore ign enterprises to do business in 
China.  However, any foreign companies doing busin ess in China shall comply with the Chinese laws, 
respect China's national conditions and traditional morals, and be subject to the regulation of 
competent authorities in China.  
With regard to foreign companies entry in to China's internet market, Regulations on 
Telecommunications of the People's Republic of Ch ina, Measures on the Administration of Foreign 
Investment in Telecommunication Enterprises, Measures on the Administration of Internet 
Information Services, and Measures on the Administ ration of Internet Press Information Services 
have stipulated the relevant requirements.  Those foreign companies, which comply with the Chinese 
laws and regulations and then obtain the relevant qualifications, may provide Internet services in 
China.  
 
WTO Secretariat's report, page 145, para. 202    
 
With regard to the licensing process for value-added telecommunication services:     
 
154. Could China share the numbers of application at every stage of the procedure?     
 
Answer: According to China's accession commitments , foreign investment in value-added 
telecommunication services shall be no more than 50%.  China progressively liberalizes the telecommunication services market in line with its WTO commitments.  So far 26 foreign enterprises 
have applied for licenses of providing value-adde d telecommunication services and then submitted 
qualified documents.  All of them have obtained the business licenses.  
155. At which step are the most applications deni ed?  Following its experience of the last few 
years, could China elaborate on the main grounds for the refusal of licence for the provision 
of value-added telecommunication services?    
 
Answer:  According to China's accession commitmen ts, foreign investment in value-added 
telecommunication services shall be no more than 50%.  China progressively liberalizes the telecommunication services market in line with its WTO commitments.  So far 26 foreign enterprises 
have applied for licenses of providing value-adde d telecommunication services and then submitted 
qualified documents.  All of them have obtained the business licenses. 
 
(iv) Transport (c) Air transport      
WTO Secretariat's report, page 154, para. 246  
 156. Could China clarify the following questions on  the provision of computer reservation system 
services: 
a. Under the current legal regime do foreign CRS require an approval to provide their cross-
border services (mode 1) to Chinese and forei gn airlines and their sales agents?        
 
Answer: According to China's accession commitment , Foreign CRS could provide cross-border 
service in three ways listed below: 
a. foreign CRS, when having agreements w ith Chinese aviation enterprises and Chinese 
CRS, may provide services to Chinese av iation enterprises and Chinese aviation 
agents by connecting with Chinese CRS,  WT/TPR/M/264/Add.1 
Page 198 
 
 
  b. Foreign CRS may provide services to  representative offices and sales offices 
established in the destination cities in Ch ina by foreign aviation enterprises which 
have the right to engage in business accord ing to the bilateral aviation agreements. 
c. Direct access to and use of foreign CRS by Chinese aviation enterprises and agents of 
foreign aviation enterprises are subject to approval of the General Administration of 
Civil Aviation of China (CAAC). 
 As regard to the issue of direct access to and use of foreign CRS by agents of foreign aviation 
enterprises referred in China's co mmitment, CAAC is in the process of drafting and reviewing the 
Provisional Approval and Administrative Measures on the Direct Access and Usage of Foreign Computer Reservation System by Foreign Aviation Enterprises Sale Agents within China, and the 
draft of this Measure has been subm itted to the CAAC for final approval. 
 
b. Do foreign CRS need a licence to participate in  IATA's Billing and Settlement Plan (BSP)?  
 
Answer: Billing and Settlement Plan (BSP) is the syst em set up by IATA for aviation enterprises and 
sales agents using neutral ticket to realize sales and settlement.  The application of CRS service 
providers to participate China BSP system sh all be processed by Chinese BSP Council according to 
the relevant rules. 
 
c. If a licensing requirement for foreign CRS exists, what are the conditions to be fulfilled?        
 
Answer:  Please refer to the answer for question (a).  China didn't make any commitment for foreign 
enterprises to establish commercial presence in China when acceding WTO, and CAAC hasn't 
received any establishment application from foreign CRS. 
 
d. On what basis (legal reference) were Chinese ai rlines required to ask permission to directly 
use foreign CRS?  When was this requirement abolished?     
 
Answer: In China's accession commitment, direct acce ss to and use of foreign CRS by Chinese 
aviation enterprises are subject to licensing of the General Administration of Civil Aviation of China 
(CAAC), and this licensing requirement was abolished in November 2002. 
 
e. When will the new regulations be enacted? W ill the new regulations be accompanied by 
implementing rules and, if yes, when woul d these enter into force?       
 
Answer: CAAC has begun drafting and reviewing the Provisional Approval and Administrative 
Measures on the Direct Access and Usage of Fo reign Computer Reservation System by Foreign 
Aviation Enterprises Sale Agents in China, and this  Measure has stepped into the phase of legislative 
review since August 2011.  Currently, the draft of  this Measure has been submitted to the CAACs 
board of administration affairs for further review, and after the approval, th e Measure will be finally 
promulgated. 
 In order to facilitate the issue of this Measure a nd increase its operability, CAAC is working hard on 
drafting relevant technical standards and operational requirements, so as to facilitate foreign CRS to 
build systems containing sales agency information related to booking and billing, flight information 
and passenger information. All the above mentioned standards are expected to be accomplished in the 
second half of this year.  
f. Since Chinese airlines can directly access and use foreign CRS, does this mean that foreign 
CRS do not need any further operating license?     
  WT/TPR/M/264/Add.1 
 Page 199 
 
 
  Answer: The providing of CRS service is under the aut hority of several relevant administrations. 
CAAC is the competent authority on CRS service mark et, besides, the relevant electronic information 
affairs are regulated by information department, the relevant information security affairs are regulated 
by public security department, and the relevant regi stration, supervision and tax collection affairs for 
CRS enterprises are respectively regulated by  the SAIC, tax administration and etc. 
 
(v) Tourism     (b) Trade regime     
 
WTO Secretariat's report, page 165, para. 306     
 
With regard to tour operators on outbound travel ser vices, China has become one of the world's fastest 
growing markets in the world.  Currently, the particip ation of the foreign investment in this sector is 
limited to few joint ventures only, which are operating on pilot basis.     
 
157. Is China considering a review of the operation of this sector and more specifically providing 
national treatment for foreign and domestic tour operators engaged in outbound tourism in 
China?  
 
Answer: The three foreign travel agencies licensed by China to provide the outbound tourism 
services for residents of mainland China on a pilot b asis have not started group travel business yet. 
The National Tourism Administration will consider whether to expand pilot range further, basing on 
the evaluation and analysis of the said three agenci es operation status after they provide the outbound 
tourism services. 
 
(vii) Postal and courier services 
 WTO Secretariat's report, pages 167-168   158. As regards postal and courier services, could China explain:    
a. how and in which aspects it plans  further clar ifying the scope of exclusive rights by postal 
enterprises?       
  
Answer:  As prescribed in the Postal Law, the deliv ery services of correspondence within the scope 
provided by the State Council are reserved to the Chinese postal authorities.  
 
The Legislative Affairs Office of the State Council is studying and formulating the Regulation of Business Scope Reserved to Postal Enterprises by the State Council for the time being. 
 
b. In particular, can China confirm that comme rcial documents are not considered to be 
covered under correspondence (letters)?       
 
Answer:  Please clarify the definition of commercial doc uments.  The Postal Law has provided clear 
definition of correspondence, and does not allow fo reign express delivery enterprises to engage in 
domestic express delivery services for correspondence.  As prescribed in the Article 84 of the Postal 
Law, correspondence means letters and post cards.  Le tters mean sealed information carrier delivered 
to particular personnel or organization in sealed fo rm according to name and address, not including 
books, newspapers and journals. 
 
c. Can China clarify the conditions of the Universal Service Fund?    
 
Answer: The universal postal service fund is an important system set up by the Postal Law.  As 
prescribed in the Article 17 of the Postal Law, th e state establishes universal postal service fund.  The WT/TPR/M/264/Add.1 
Page 200 
 
 
  specific measures on the levy, usage, supervision and management of the universal postal service fund 
are formulated by the Department of Finance a nd other related department s of the State Council, 
which will be submitted to and come into force af ter the approval.  The specific measures are still 
under study. 
 
d. Can China explain how it plans to ensure that the measures taken to en sure security and fight 
against counterfeited products, including the rul es on CCTV monitoring and new customs procedures 
do not create unnecessary burden and that business secrec y is ensured to the information gathered by 
the authorities? 
 
Answer: The Postal Law and the Supervisory and Admini strative Measures for the Safety of Postal 
Industry provide the specific measures to guarantee th e safety of the postal industry, which require the 
express delivery enterprises to take technical measures to supervise the pick-up, sorting, transport and 
delivery and so on.  This is the basic requirement  to ensure smooth and safe delivery, which will not 
impose unnecessary burden on the enterprises. 
 
Chinese law will protect the legal right of foreign express delivery enterprises, such as the commercial 
secrets, as long as they engage in the express deli very services legally in China.  The State Post 
Bureau issued the Administrative Measures for the da ta of the Postal Market Regulatory Information 
System in 2011, and thereby put it in force, which further defines the responsibility of postal authority 
at various levels on data management and safety.  
(viii) Distribution services  
 WTO Secretariat's report, pages 168-169    
 
As regards retail services, China continues to impl ement restrictions on number of retail outlets for 
wholly foreign owned companies selling certa in products, including petrochemicals.  
 
159. Is China considering removing this limitation?       
 
Answer: China has already liberalized its retailing market in accordance with the relevant WTO 
accession commitments.  As for further opening up of  the retail outlets for wholly foreign owned 
companies selling certain products, the relevant aut horities will study the feasibility then decide the 
measures of next step. 
 
 
HONG KONG, CHINA 
 Question 1, page 123, para 104 
 Financial Services 
 
We note from the Secretariat report that foreign i nvestors have been allowed to establish wholly 
owned personal consumption finance companies sin ce 12 February 2010.  Foreign investment in 
personal finance was allowed only in the subsector of auto loans previously, through establishment of 
wholly owned or joint-venture auto-finance companies. 
 
How many wholly owned personal  consumption finance companies have been established by foreign 
investors since 2010? Please also share with us th e scope and details of this liberalization.  
 
Answer:  Since 22 July 2009, foreign financial institu tions, with presence in China for more than 
two years, have been allowed to become principa l investors (up to 100% ownership) of a consumer  WT/TPR/M/264/Add.1 
 Page 201 
 
 
  finance company, in accordance with the Administration Measures for the Pilot Programme of 
Consumer Finance Companies (CBRC Decree 2009/3).  As per the Administration Measures for the Pilot Programme of Consumer Finance Companies (CBRC Decree 2009/3), the principal investors of 
a consumer finance company must satisfy the following conditions:  (1) more than 5 years of business 
experience in consumer finance;  (2) gross assets not  less than ¥ 60 billion (o r equivalent value in 
other convertible currencies) at the end of the most recent year;  (3) continuously making profits in the 
most recent 2 consecutive fiscal years;  (4) no record of major violations in the most recent 2 years;  
(5) legal investment capital, i.e. loans or trusted funds are allowed;  (6) guarantee for a 3-year lockup 
period of equities of the consumer finance company in question;  (7) healthy corporate governance, 
and risk management;  and (8) meet other compliance standards.  At the end of 2010, there were four consumer fi nance companies, including one fully foreign-owned 
company and two joint ventures. The four cons umer finance companies are:  Bank of Beijing 
Consumer Finance Co. Ltd (wholly owned by Ba nk of Beijing); Bank of China Consumer Finance 
Co. Ltd (jointly owned by Bank of China, Brilliance Group, and Shanghai Lujiazui Finance & 
Development Co. Ltd);  Sichuan Jincheng Consumer Finance Co. Ltd (joint-owned by Bank of 
Chengdu and Hong Leong Bank, Malays ia);  and PPF Consumer Fina nce Co Ltd (wholly owned by 
PPF Group, Cze). 
 
Question 2, page 154, para 246  Air Transport   
A new draft regulation is being prepared with the ai m to clarify the conditions of authorization by the 
Civil Aviation Administration of China(CAAC) for direct access to and use of foreign Computer 
Reservation Systems by Chinese aviation enterprises and agents of foreign aviation enterprises.  
 
We are interested to know the scope and details of the draft regulation, the latest legislative process, 
and its implementation schedule.  
Answer: Civil Aviation Administration of China(C AAC) has begun drafting and reviewing the 
Provisional Approval and Administrative Measures on the Direct Access and Usage of Foreign Computer Reservation System by Foreign Aviation En terprises' Sale Agents within China, and this 
measure has stepped into the phase of legislative review since August 2011. 
 
During the process of reviewing, CAAC widely so licited opinions from related parties more than 
once.  In August 2011, November 2011 and February  2012, in forms of soliciting writing opinions, 
convening regulation reviewing meeting, and organizing face to face communication, CAAC 
absorbed the views from International Aviation Asso ciation, EU Chamber of Commerce, international 
airlines councils in China, international airlin es, foreign computer reservation system service 
providers and other releva nt domestic organizations. 
 
At present, the draft of this Measure has been submitted to the CAAC for final approval, and the 
Measure will be finally promulgated after the approval. 
 
Question 3, page 177, para 360  
 
Logistics Services 
 
The Chinese Government is promoting the application of uniform logistics-related technical standards 
across the country.  In this connection, unde r the National specific Programme for Logistics 
Standardization, 22 national logistics standards and more than 20 logistics industrial standards have 
been issued in 2010.  WT/TPR/M/264/Add.1 
Page 202 
 
 
   
How are these technical standards implemented in th e industry?  Will these technical standards be one 
of the registration criteria with corresponding authorities? 
 
Answer: Special Plan for National Logistics Standard was drafted under the lead of Standardization 
Administration of the People's Republic of China (SAC), all technical standards in the plan are 
organized and implemented according to the Law of St andard of PRC.  Both of the national logistics 
standards and industry logistics standards sugg ested in the Special Pl an are recommendatory 
standards, which are encouraged to be adopted voluntarily by enterprises in China.  Technical 
standards do not involve registration-related issues.  
  
INDIA 
 
Part I: QUESTIONS REGARDING THE SECRETARIAT REPORT 
 
Page 69 (Para 191)  
 China provides different forms of assistance to qua lified projects under its torch programme at the 
central as well as sub-central level.  The TPR Re port by the Secretariat provides a web-link for the 
details of this project, but the relevant webpage is  in Chinese and the English version does not open.   
 
Question 1    
 Could China provide details of benefits provided by the Centra l government and the supplementary 
financial assistance provided by the authorities at the local level under its torch programme aimed at 
promoting new and high technologies?    
 
Answer: The Torch Program is in nature  general science and technolog y input.  Detailed information 
please refers to the official website of Ministry of Science and Technology.  
 
Could China also provide a list of sectors/indus tries benefitting under the torch programme and the 
criteria for determining the same.   
 
Answer: The list for the programs under the torch program is available on the website 
http://www.most.gov.cn/bszn/new/hj/jg cx/201111/P020111108 366088590198.pdf.  
 Page 69 (Para 195-198)  
 China provides different forms of assistance to its renewable energy sector.   Question 2     
 Could China provide details of the following:   1. Benefits provided under the National Me dium-and-Long-term Development Plan for 
Renewable Energy, 2007 and the Golden Sun Demonstration Project to 
developers/manufacturers/distributors or any other key participant in the renewable energy sector;  
viz grants, rebates, local component requirement, etc. 
 
Answer: Golden Sun Demonstration Project is a program under Renewable Energy Fund, which 
contained sub-arrangements and involved also tr ansfer payment to provincial governments.  
Therefore, it was too complicated to be incorporated  in China's submitted subsidy notification.  China  WT/TPR/M/264/Add.1 
 Page 203 
 
 
  will work on notification of this fund in the c ourse of extending the notification to local subsidy 
programs.  2. Complementary assistance pr ogrammes for renewable energy at  the sub-central government 
level    
 
Answer: Please refer to the answer to the above question. 
 
Page 70 (Para 199-200)  
 
China's central government provides lump sum gran ts to consumers who buy new energy-saving or 
new-energy cars listed in a promotion catalogue.   
Question 3 
 
Could China provide details of assistance provided to  the automotive sector, especially in relation to 
new energy-saving or new-energy cars, both at th e central and sub-central government level?  
 
Answer:  In January 2009, the Ministry of Finance and the Ministry of Science and Technology 
jointly issued the Notice on Carrying out Energy-S aving and New Energy Vehicle Demonstration and 
Promotion Pilot Work (Caijian No.[2009] 6), a nd launched  the energy-saving and new-energy 
vehicle demonstration and promotion project in Be ijing and 13 other cities to financially encourage 
the promotion and use of energy-saving and new en ergy vehicles in public transportation, rental 
service, sanitation and postal and other public service areas. Subsidies will be provided for units that 
will promote and purchase energy-saving and new energy vehicles. 
 
In May 2010, the Ministry of Finance, Ministry of Science and Technology, Ministry of Industry and Information Technology and National Developmen t and Reform Commission jointly issued the 
"Notice on Extending the Promotion of Energy-Savi ng and New Energy Vehicle in Public Services 
(Caijian No. [2010] 227). It stipulated that on the basi s of the existing 13 pilot cities, seven other cities 
will be added including Tianjin. 
 In May 2010, the Ministry of Finance, the Na tional Development and Reform Commission and the 
Ministry of Industry and Information Technology jointly issued the "Promotion and Implementation 
Rules and Regulations for the Fuel-Efficient Cars Ca tegorized in Benefiting People Project of Energy-
Saving Products (1.6 liters and below passenger car s) (Caijian No. [2010] No. 219).  Since June 2010, 
the National Development and Reform Commission,  the Ministry of Industry and Information 
Technology and the Ministry of Finance have pu blicized seven promoting Catalogues of  the 
fuel-efficient cars in the category of the Benef iting People Project (1.6 liters and below passenger 
cars).  The central government will give each  consumer a subsidy of 3000 yuan who buys 
fuel-efficient cars mentioned above.  The payment will be made in the sale to consumers by the 
manufacturers. 
 In May 2010, the Ministry of Finance, the Ministry of Science and Technology, the Ministry of Industry and Information Technology and the Natio nal Development and Reform Commission jointly 
issued the "Notice on the Subsidy Pilot on th e Purchase of New Energy Vehicles by Private 
Consumers (Caijian No. [2010] No. 230).  The pilot subsidy management will be implemented in line 
with the Pilot Financial Assistance Fund Manage ment Tentative Measures for Private Purchase of 
New Energy Automobiles issued alongside the notice. 
 
2. Could China also provide the list of companies that have benefited under this?   
 WT/TPR/M/264/Add.1 
Page 204 
 
 
  Answer:  The list of companies that benefit from Peopl e-benefiting Project of Energy-saving Product 
is publicized in all together seven batches on the website of National Development and Reform 
Commission (NDRC).  Please refer to  http://www.sdpc.gov.cn/zcfb/zcfbgg/default.htm for detailed 
information.  
 Page 15 (Para 22) 
 The 12
th Five-Year Plan (covering 2011-15) places emphasis on exports and inward foreign 
investment but also on imports and outward forei gn investment.  In this context, China aims to 
stabilize exports, expand imports, and thus reduce the trade surplus.  The authorities intend to achieve 
this objective through import facilitation measures, as  well as further preferential trading agreements 
2011-2015.  
Question 4   
 
China's trade policy objectives, as elaborated in Part XII of the 12th Five Year Plan, are to be 
achieved through import facilitation measures and more PTAs.  Could China elaborate on proposed 
import facilitation measures?  Sp ecifically, what are the measures being considered?  What is the 
timeframe for introducing such measures? 
 
Answer:  China will make the following effo rts to promote trade facilitation: 
 (a) to strengthen cooperation with the Customs of other countries in the aspects of mutual 
recognition of supervision, mutual assistan ce of law enforcement and exchange of 
information, so as to reduce unnecessary dupli cation of regulation and inspection, and 
facilitate enterprises and goods to enter each other's markets. 
(b) to further promote the construction of "great Customs clearance" at port, give full play the 
role in electronic port, and deepen the link between the port inspection departments and the 
related domestic government departments to im prove the efficiency of the port clearance. 
(c) to maintain closer partnerships with the business sector, implement the concept of knowing 
the goods by understanding enterprises, strengthe n law-abiding management for enterprises, 
and facilitate Customs clearance for highly creditable enterprises. 
(d) to make reform on classification clearance of Customs and paperless clearance operations, 
implement the 7 x 24 hours in advance clearance system in Customs located in the port and Customs areas under special supervision, impl ement the clearance facilitation measures of 
advance declaration, mass declaration a nd security clearance to optimize the Customs 
processes and simplify regulatory supervision of clearance procedures. 
(e) to actively promote the facilitation of pro cessing trade for domestic market, and to promote 
the construction of trading platform for domestic market. 
 Page 46 (Para 85)  
 There are four levels of standards in China:  na tional, trade, local and enterprise standards.   
 In the absence of national standard s, trade standards or local st andards for certain products, the 
enterprises producing such products may formulate their own standards as the basis for organizing 
production.  Where there are already national, trade or local standards, ente rprises are encouraged to 
formulate and apply enterprise standards that ar e stricter than the corresponding standards.  
 
Question 5  
 
1. What is the rationale for enterprise standards in China?  
  WT/TPR/M/264/Add.1 
 Page 205 
 
 
  Answer: Article 6 of the Standardization Law of PRC s tipulates that in case there is no national or 
trade standard, enterprise standard shall be formulat ed and followed in production.  All enterprises 
registered in China shall formulat e enterprise standards in line with the Standardization Law above.  
 
Enterprise standard is the standard that harmonizes  technical requirements, management requirements 
and working requirements within enterprises.  It also serves as the guideline for production and 
business activities.  Enterprises are en couraged to actively adopt intern ational standards and advanced 
standards abroad.  
 
2. How are such standards (even if formulated by  state-owned or state-controlled enterprises) 
distinct or  different from private standards?   
 
Answer: please give the definition of private standard.  
 3. While enterprises may formulate or apply thei r own standards in the absence of national, 
trade or local standards for the pur pose of organizing production  w hat is the purpose of encouraging 
enterprises to formulate or apply their own standard s that are stricter than pre-existing national, 
trade or local standards?   
Answer: Enterprises are encouraged to formulate enterpri se standards that are stricter and apply these 
standards to enterprises, aiming at promoting technical advance, improving product quality, and 
achieving innovative development.   Page 93 (Para 308-310) 
 
China protects GIs under Trademark law and can be re gistered at various locations. China is also 
known to have used specific geographical names in ge neric sense.  There are certain products that are 
protected as GIs in other countries but are named as ge neric products in China.  E.g. Kanjeevaram silk 
sarees of India are a registered GI in India but the na me is learnt to have been used in producing silk 
textiles in China and exported as well.  
 
Question 6 
 
China is requested to provide details of the proce dure by which foreign GIs can be protected in China 
and right holders be able to enforce their rights.  
 
Answer: SAIC, MOA and AQSIQ are the three government agencies responsible for GI protection in 
China. Foreign right holders may register their GIs with the above agencies fo r protection in China.  
To register GIs with SAIC, pursuant to the Tr ademark Law and its impl ementation regulations, a 
foreign right holder shall authorize a certified trad emark registration agent in China to apply for the 
registration of a collective or certification tradem ark for the corresponding GI.  Once the application 
is approved and the collective or certification tradem ark is registered, the foreign right holder obtains 
the right to the exclusive use of registered trad emark of the GI in China.  The procedures for 
registration with MOA and AQSIQ are in formulation.  Regarding the enforcement of rights, once any infring ement is found, right holders may report it to the 
state or local administration for industry and comm erce and request them to investigate and punish 
wrongful acts.  At the same time, the state and lo cal administrations for industry and commerce would 
also investigate and punish infringements of legitim ate GI rights on their own initiative.  Besides, 
right holders may also protect their rights through judicial proceedings by launching a lawsuit against infringers.  WT/TPR/M/264/Add.1 
Page 206 
 
 
  Page 96 (Para 323-324)  
 
Customs in China is empowered to detain IPR infringing goods on application by rightholders 
irrespective of whether the goods have been registered with the Customs.  
 
Question 7   
 
China may kindly explain the procedure by which ex port of infringing goods can be prevented by the 
Customs at the instance of the right holders, especially when the right holder is not Chinese 
 
Answer: According to The Regulations on Customs Prot ection of Intellectual Property Rights, where 
any imported or exported goods are found suspect of infringing an IPR, the customs shall immediately 
notify the right holder of such suspected infringement  in writing.  In the event that the right holder 
files an application in conformity with the provisi ons of Article 13 of the Regulations and provide a 
security pursuant to Article 14 of the Regulations w ithin 3 working days from the date of service of 
the notification, the Customs shall detain the suspected infringing go ods, notify the right holder of 
such detention in writing and serve a Customs dete ntion receipt on the consignee or consignor.  The 
Customs shall not detain the goods in case the right holder fails to file an application or provide a 
security within the specified period. Please refer to Article 4, 12 and 16 and Chapter II of the 
Regulations for details.  
 Page 5 (Para 14)  
 Item: I. Economic Environment; Structural Policies I.  
Input prices (such as energy, water, and land)  have also been regulated and kept low  
 
Question 8    
 Could China indicate whether each input is made available at the same regulated price to all 
enterprises across the board?   
Answer:   In China, input prices have not been regulat ed and kept low as descried in the Secretariat 
Report.  At present, more than 95% prices of our goods and services have been liberalized and fixed 
by the market, including the vast majority of means of production such as coal and metal ores.  As for 
the very limited number of resource products that implement the government pricing or government 
guidance prices, their prices basically reflect the domestic cost of production and market supply and 
demand situation.  With regard to the input pr oducts that implement the government pricing or 
government guidance pricing, we implement a uni form pricing policy to all enterprises in the 
industry, regardless of their ownership or scale.  
Page 71 (para 206)  
 
Item: Trade Policies and Practices by Measures; Measures affecting Production and Trade; Subsidy 
and Other government Assistance  
Issue stated: China notified a number of measures to  assist research and development; most of them 
involved preferential tax treatment.  
 
Question 9 
 Could China state whether all enterprises across the board are eligible for receiving assistance for 
research and development? If not, could China indica te the criteria for determining eligibility of  WT/TPR/M/264/Add.1 
 Page 207 
 
 
  enterprises for receiving assistan ce for research and development? Is any sector specifically excluded 
from receiving assistance under research and development?   
 Answer: All enterprises in China are eligible for recei ving assistance for research and development. 
Please refer to our subsidy notification G/SC M/N/155/CHN and G/SCM/N/186/CHN for the detailed 
information of assistance and criteria for enterprises.  Page 72 (para 211)  
 Trade Policies and Practices by Measures; Measures affecting Production and Trade; Industrial policies 
 
Issue stated: Under the 2009 programme, sector-specifi c policies were issued to boost development of 
the ten sectors.   
 
Question 10       
 
Could China specify the ten sectors selected und er the 2009 programme for boosting development?  
 
Answer: Please refer to footnote 184 on page 95 of the Secretariat report.  The ten sectors include 
nine manufacturing sectors (iron and steel, automob iles, shipbuilding, petrochemical industry, textiles 
and clothing, light industry, non-ferrous me tals, equipment manufacturing, electronics and 
information industry);  and one services sector (logistics). 
 
Part II:   QUESTIONS REGARDING THE GOVERNMENT REPORT 
 Page 11 (Para 28)  
 
Accelerating the development of the service sector.     Question 11  
 In China the demand for IT and medical services is growing fast. What are the plans to follow an 
open policy for import of services in the IT and medical sector to meet the demands.  
 Answer: China has made substantial commitments in the sectors related to IT services when it 
acceded into the WTO.  It is our position that furthe r liberalization in the field of IT services is subject 
to the DDA negotiations.   On 28 January 2011, the State Council released the Notice on Several Policies on Further Encouraging the Development of Software Industry and Integrated Circuit Industry, 
(Guofa[2011]No.4), stating clearly the favourable policy for IT service, including outsourcing IT 
R&D and application business to specialized compan ies;  currently, China is drafting policies on 
promoting service outsourcing, such as the Guid elines to Increase Import and Promote Balanced 
Foreign Trade, and the Outline on the Developmen t of China's International Service Outsourcing 
Industry (2011-2015).  As an integral part of ser vice outsourcing, IT service is supported by policies 
at both import and export ends.   
 In November 2010, General Office of the State Council issued Advices on Further Encouraging and 
Guiding Social Capital to establish Medical In stitutions.  This Advice explicitly presented the 
guidelines and policy measures to accelerate the deve lopment of private medical institutions, among 
which one important measure is opening up of me dical service market, encouraging and guiding 
foreign capital to establish medical institutions.  Th is Advice also pointed out that, Catalogue for the WT/TPR/M/264/Add.1 
Page 208 
 
 
  Guidance of Foreign-Invested Industries shall clas sify the foreign-invested medical institution in 
forms of joint venture and cooperative enterprise from restrained category to permitted category.  
Currently, all relevant provincial administration have begun to scheme effective implementation of 
this policy, and detailed rules for the implementa tion and supporting documents are expected to unveil 
soon.  According to CEPA and ECFA, since 1 January  2011, service provides from the Hong Kong and 
Macao Special Administrative Regions have been pe rmitted to establish subsidiary hospitals in the 
provinces and municipalities of Shanghai, Fujia n, Guangdong, Hainan and Chongqing. Service 
providers from Chinese-Taipei also have been permit ted to establish subsidiary hospitals according to 
rules in the provinces and municipalities of Shangh ai, Jiangsu, Fujian, Gu angdong and Hainan on a 
pilot-project basis.  Since 1 April 2012, pilot project of the Hong Kong and Macao Special Administrative Regions to establish subsidiary hosp itals in mainland China will be extended to all 
provincial capitals and municipalities. 
 
During the "Twelfth Five-Year" period, China will  further liberalize medical service market, and 
allow the establishment of wholly-fo reign-owned medical institutions. 
 Page 16 (Para 57) 
 Reform of social security and medical healthcare systems    
Question 12     
 
What is the National and state level policy for procuring generic medicine for the hospitals 
particularly in the new rural cooperative medical care system?  
Answer: According to the Working Rules for Cent ralized Procurement of Drug for Medical 
Institution (Weiguicaifa [2010] No. 64), non-prof it medical institutions sponsored by country 
government and SOEs must participate in the co llective procurement of pharmaceuticals.  Other 
institutions are encouraged to participate in the activity.  The Working Rules are intended to achieve 
online government-led collective procurement of phar maceuticals participated by provincial, district 
and city-level medical institutions.  Medical institu tions and pharmaceutical manufacturer must, when 
buying and selling pharmaceuticals, use provincial, dist rict and city-level non-profit platform for the 
procurement, and they are subject to unif ied organization, platform and regulation. 
 
What level of government (central/sub-central, or rel evant private associations) holds the authority to 
import generic medicine for state owned hospitals?  Do the hospitals have the authority to procure 
medicine themselves?  
 
Answer: Article 39 of the Drug Control Law of the People's Republic of China states that 
examination of drugs to be imported shall be orga nized by the drug regulatory department under the 
State Council.  A drug may be imported only upon approval granted after th e confirmation that it 
conforms to the quality specifications and is safe an d effective is affirmed through examination, and 
an import drug license shall be issued.  Article 10 of the Drug Registration Regulation states that in making application for an imported drug registrati on, the legitimate foreign drug manufacturer shall 
use its office in China, or authorized an agent in China to handle the applica tion.  As to small amounts 
of drugs be imported for urgent clinical needs of  medical institutions or for personal medication, 
formalities for import shall be completed in accordance with the relevant regulations of the state.   
  WT/TPR/M/264/Add.1 
 Page 209 
 
 
  Part III:  OTHER QUESTIONS 
 Service related Questions 
 
Question 13   
 
China is requested to provide update on the Joint Circular (Notice No. 618) posted 15 November 2009 to implement an Indigenous Innovation Pr oduct Accreditation system, the 
implementation of which would make it virtually im possible for any foreign supplier to participate in 
the Chinese government procurement market. Does this relate to only the IT/ITeS sector or to other 
service sectors as well?  In addition to the Join t Circular (Notice No. 618) posted 15 November 2009, 
does China have any other policy which bans use of foreign software by the Chinese government?   
 
Answer: on 17 November 2011, the General Office of the State Council issues a document, requiring 
local governments at all levels to stop their lo cal practice regarding innovation policy linked to 
preferential government procurement, starting from 1 December 2011.  The relevant departments of 
the Chinese government also issued notice, announc ing the end of implementation of Accreditation 
and Management Measures on Nati onal Independent Innovation Products (Trial), Notice on Carrying 
out Accreditation of National Independent Innova tion Product in 2009 (Notice 618), Administrative 
Measures on Budgeting for Government Procur ement of Self-innovated Products, Evaluation 
Measures on Indigenous Innovative Products for G overnment Procurement, and Administrative 
Measures on Government Procurement Contracts relating to Self-innovated Products.  Currently, 
China's self-innovative product is no longer linked to  preferential procurement policy.  There are no 
other policies on prohibiting the Chinese government to use foreign software.  Question 14   
 What are the specific types of legal entities p ermitted under China's auto nomous policy regime for 
foreign IT/BPO companies and foreign IT/BPO education/training companies?      
 Answer: According to China's laws and regulations, fo reign IT/BPO companies and foreign IT/BPO 
education/training companies may establish the following types of legal entities in China:  equity joint 
venture enterprises, wholly foreign-owned en terprises, and contractual joint ventures. 
 
Question 15 
 
Is there a law in China that categorises Call Ce nters (which would come under Other Business 
Services CPC 8790) as Value Added Telecom fir ms mandating call centres to require a license 
similar to that required for provision of telecommunication services?  
 
Answer: According to Catalogue of Telecommunicati on Business Classification call center business 
is subject to the second category of value-added telecommunication business.  For those call center 
services suppliers, it is necessary for them to obt ain the license of value-added telecommunication 
business if they intend to do business in China.  
Question 16 
 
With regard to provision of a ccounting and architectural services, is it mandatory to maintain all 
accounts in Chinese language / use only Chinese c haracters in architectural drawings?    
 
Answer: For the language requirement of accounti ng services, Article 22 of Accounting Law 
explicitly stipulated that, in China, accounting reco rds should be recorded in Chinese.  In a national 
minority autonomous region, the commonly used local national minority language may be used WT/TPR/M/264/Add.1 
Page 210 
 
 
  simultaneously.  One additional foreign language ma y be used in the accounting records of foreign 
invested enterprises, foreign enterprises a nd other foreign organizations in China. 
 
For the language requirement of architectural draw ing, according to the requirement of Provisional 
Administrative Rules on the Foreign Enterprises E ngaging in Construction Project Design Activities 
in China, the Chinese-foreign cooperative design do cuments submitted to relevant administrations 
should be recorded in Chinese.  
According to the requirements of the Interim Provi sions on the Administration of Foreign Enterprises 
Engaging in Construction Project Designing Activities within the People's Republic of China (Jianshi 
[2004] No.78), the Chinese-foreign cooperative desi gn documents subject to the review of the 
Chinese government shall be provided in Chinese version.  
Question 17  
 
Is there a law in China banning foreign educational  institutions from offering education services 
through mode 1 (such as vi a satellite networks)?    
 
Answer:  We made no commitment on educational services in mode 1 mainly for the following 
reasons:  the lack of comprehensive evaluation a nd effective supervision at present on the quality of 
remote education services offered by foreign edu cational institutions thro ugh mode 1 (such as via 
satellite networks), and it is also difficult for re levant WTO Members to guarantee or monitor the 
educational quality.  It is hard to protect the consumers' right effectiv ely once any quality problem 
occurs. 
 
Taxation System for Diamond imports in Shanghai Diamond Exchange  
Question 18  
 
Will China explain exactly the way tax involving VAT is calculated in Shanghai Diamond Exchange?    
 
Answer:  Please refer to the Notice of the Ministry of  Finance, General Administration of Customs 
and State Administration of Taxation on Adju sting Taxation Policy of  Diamond and Shanghai 
Diamond Exchange (Caishui [2006] No. 65) fo r detailed information of calculation.  
 Question 19 
 Why is it that the loose diamonds are quarantined in  China for 3 to 4 days before getting released in 
the market?   
 
Answer:  Because Chinese authorities issue license for imported diamond according to the 
requirement of Kimberley Process. 
 
Question 20  
 
It is India understanding that it is beneficial for the diamond traders to import the diamonds into 
China via Hong Kong, China than directly into China and that it is due to certain NTBs.  Will China 
explain its position?   
 
Answer: China has eliminated all the NTBs in comp liance with our WTO accession commitment in 
2005.  Chinese quarantine authorities issue li cense for imported  diamond according to the 
requirement of Kimberley Process 
  WT/TPR/M/264/Add.1 
 Page 211 
 
 
  INDIA - SECOND SET OF QUESTIONS 
 
Part I: QUESTIONS REGARDING THE SECRETARIAT REPORT   
 
Page 59 (Para 142-144) 
 Paragraphs 142-144 of the Secretariat Report describe China's Tax Re bates on exports.  
 
Question 1 
 How the rates for VAT rebate are determined? How the VAT  rebate on exports is practically implemented?   
At what stage the VAT rebate is allowed, what are the documents prescribed for claiming VAT rebate and 
how it is ensured that the VAT rebate is based on actual VAT paid?   
 Answer: Tax rebates for exports are determined as stipulated.  Chinese authorities for tax administration 
are in charge of tax rebates. One can apply for th e rebate once the goods leave our border after customs 
declaration by submission of related documents, such as VAT invoice, export declaration etc.  Tax rebates 
are given to the applicants based on the above-mentioned documents, which ensures that the rebate is 
based on the actual VAT paid.   Page 61-63 (Para 154-165) 
 Paragraphs 154 to 165 describe China's policy and procedures relating to export finance, insurance and guarantees.   Question 2  
 
How are the lending rates to exporters determined by the EXIM Bank?   Answer:  the RMB loan rate offered by the Export-Import Bank of China follows the loan rate regulated by 
the PBOC.  For loans of foreign currencies, based on the interest rate policy of the PBOC, fixed interest 
rate is determined with reference to CIRRs of the OE CD, with additional plus points, while float interest 
rate is determined on the basis of the LIBOR, together with additional plus points.  
Whether the lending rate is different for different class of borrowers, and if so an illustrative list of 
different class of borrowers may be provided?    Answer: the specific interest rate in the Export-Import Ba nk of China is set by incorporating such factors 
as capital cost of foreign currency, market pric e, customer credit rating, country risk level. 
 During the period under review what was the lending rate for export credit finance for exports in general and for different class of borrowers?  
Answer:  The specific interest rate in the Export-Import Bank of China is set by incorporating factors like 
capital cost of foreign currency, market price, cu stomer credit rating and country risk level. 
 Whether the EXIM Bank makes decisions regarding lending rates based on market principles?  Whether 
the EXIM Bank makes profits from its operations relating to export credit finance?    
 Answer: The specific interest rate of the Export-Import Bank of China is set by incorporating factors like 
capital cost of foreign currency, market price, customer credit rating, country risk level.  The Bank follows 
the principle of proper profit with secured capital and achieves sustainable development by relying on its 
own business operation in recent years.   
 WT/TPR/M/264/Add.1 
Page 212 
 
 
  Whether there are commercial banks, other than official export credit agency, which provide export credit 
finance for export purposes?  And if so details of such commercial banks may please be provided.    
Answer:  Other commercial banks can also provide export credit business. 
 Whether the above commercial banks provided export credit finance during the period under review and if so what was the lending rates to exporters?  
 
Answer:  Commercial banks also provide export credit finance during the review period.  The lending 
rates of commercial banks are based on market conditions.  
 
 
INDONESIA 
 I. ECONOMIC ENVIRONMENT   
DEVELOPMENTS IN TRADE AND FOREIGN DIRECT INVESTMENT  
Nevertheless, frictions remain with some of China' s main trading partners over the levels of their 
bilateral trade balances with China.  When measured by traditional trade statistics, which attribute the 
entire commercial value of an exported good to the last country of origin in the global supply chain, 
China continues to have particularly large bilatera l trade deficits with some Asian economies, notably 
Chinese Taipei, Korea, and Japan, from which it imports components for its export processing 
activities, and large bilateral trade surpluses with the United States and the EU, to which it exports 
final products. (Document: WT/TPR/S /264, page 9, para 20)    
 
Question: 
 1). Related to the trade of China government, e ither export or import frequently recorded any 
differences in the trade balance, so it is questionable what methods that are used in the recording of 
export or import data?  
 Answer: Statistics by China Customs has been deri ved by comprehensively implementing the 
concepts and definitions for trade statisti cs of goods by the UN (IMTS2010), taking into the 
calculation of foreign trade the goods entering into or leaving China's customs territory and causing 
an inventory variation of material resources within borders.  Imported goods are taken into statistics 
according to their CIF while exported goods according to FOB.  Import is taken into statistics by 
country of origin while export by country of final destination, with country of departure and country 
of arrival as supplemental information.  China Customs collects, gather s, revises, compiles and 
releases data on a calendar month basis and the released  data may be altered due to data correction.  
Please look for more information in the Customs Statistics Ordinance of the People's Republic of 
China and the Regulations on Customs Statistics of the People's Republic of China.  
China has become an important source of FDI.  In 2010, it ranked fifth in the world, with outward 
FDI of US$68 billion, up 20% from 2009.  The Government continues to encourage Chinese 
companies to invest abroad, in  energy, raw materials, agriculture, manufacturing, services, and 
infrastructure. (Document: WT/TPR/S/264, page 10, para 25)     Question:    2). China sees Indonesia as 3 G namely as a good friend, good neigbour and good partner, in 
this regard what's the commitment of Chi na to increase investment in Indonesia?  
  WT/TPR/M/264/Add.1 
 Page 213 
 
 
  Answer: Relevant departments of Chinese government such as the Ministry of Commerce have made 
a top priority the promotion of investment in Indonesia.  A memorandum to establish a joint investment promotion committee was signed in  2006 between the Minstry of Commerce and 
Indonesian Ministry of Trade and three meetings have  so far convened in order to jointly promote the 
two-way investment.  At the same time, the Mins itry of Commerce with other departments in 2011 
issued the Industrial Guideline fo r Foreign Investment in Various Countries which has carried special 
introductions to the developing goals of major industr ies in Indonesia, prioritized industrial fields and 
key development areas, which h as helped Chinese enterprises to unde rstand the developing needs of 
Indonesian industries and hereby to make inve stment in Indonesia.  Besides, guidebooks for 
investment and cooperation in Indonesia have c ontiguously been released, which has helped the 
enterprises to get a better knowledge of the invest ment environment in Indonesia.  What shall be 
noted is that the foreign investment made by Ch inese enterprises is a market  behaviour and that the 
government is not in the position to make a commitment about whether to increase investment.  However, it is our belief that the enterprises w ill make right decisions as long as the relevant 
departments can make concerted effo rts to build a sound external environment or to provide an ideal 
investment environment for the enterprises. (Department of Outward Investment and Economic Cooperation)  
II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 
TRADE POLICY OBJECTIVES  
According to the Report of the Se cretariat, China aims to stabilize exports, expand imports, and thus 
reduce the trade surplus.   The authorities intend to achieve this objective through import facilitation 
measures, as well as further preferential trading agreements. (Document: WT/TPR/S/264, page 15, 
para 22)    
 
Question: 
 
3). Regarding to China's objectives mentioned above, Indonesia would like to know the 
implementation  in detail since the bilateral tr ade balance is unbalanced in favour of China. 
 
Answer: There is a discrepancy in the bilateral tr ade statistics between China and Indonesia.  
According to the statistics by the Chinese side, the bilateral trade ba lance was unbalanced in favour of 
Indonesia in 2011.  Although there are discrepancies existing in statistics between the two countries, 
China will not deliberately seek a trade surplus and w ill instead be willing to make a concerted effort 
with Indonesia to advance the development of bilate ral trade.  It is our wish that the Indonesian 
government, industrial associations and enterprises c ould actively participate in such large-scaled 
expositions as the China Import and Export Commod ity Fair and the China - ASEAN Expo where the 
publicity of the products shall be  strengthened in orde r to further enlarge the Chinese market and 
expand the export to China. 
 RECENT DEVELOPMENTS IN FDI POLICY  
As Stated in Secretariat's report, China eliminated preferential treatment to FDI projects in regard to 
the enterprise income tax, except for some "grandfathering" of incentives during a five-year transition 
period. (Document WT/TPR/S/264, page 18 para 38)  
 
Question: 
 
4). What are the kinds of some "grandfath ering" businesses fields? and how many incentives 
given by the authority (Government) during a five-year transition period for such some 
"grandfathering"?    
 WT/TPR/M/264/Add.1 
Page 214 
 
 
  Answer: The State Council issued the Circular of the State Council on the Implementation of the 
Transitional Preferential Policies on Enterprise Income Tax (Guo Fa [2007] No. 39) upon the implementation of the Enterprise Income Tax La w, according to which enterprises enjoying the 
preferential policies with regard to enterprise in come tax under the former tax laws, administrative 
regulations and documents with the effects of ad ministrative regulations shall be subject to a 
transition under the following measures: 
 
1. Enterprises which enjoy the preferential policies of  low tax rates in the past shall be gradually 
transited to be paying the tax at the statutory rate within 5 years from 1 January 2008.  To be specific, 
enterprises enjoying an enterprise in come tax rate of 15% will be payi ng the tax at a rate of 18% in 
2008, 20% in 2009, 22% in 2010, 24% in 2011 and 25% in 2012, and enterprises enjoying an enterprise income tax rate of 24% in the past  will be paying the tax at a rate of 25%.  
 2. Enterprises which enjoy such preferential po licies of tax reduction and exemption with the 
fixed term as 2-year exemption and 3-year half  deduction and 5-year exemption and 5-year half 
deduction in the past are entitled to the original pr eferential policies based on the original rules and 
the original preferential years after the implemen tation of the new tax law on 1 January 2008 except 
that the preferential term shall begin from 2008 if  the enterprises have not actually enjoyed the 
original preferential policies due to the failure to make profit. 
 
Since 1 January 2011, foreign investors have been "permitted" to invest in health care services in 
China on a pilot-project basis; previously, they we re listed in the "restricted" category. (Document 
WT/TPR/S/264, page 18 para 39)   
Question: 
 
5). Please explain further why health care service s were listed in the restricted category area 
and philoshopical background to lift it up as an open foreign direct investment? 
 
Answer: In China, many service sectors have been undergoing gradual liberalization, including 
medical service.  In November 2010, General Of fice of the State Council issued Advices on Further 
Encouraging and Guiding Social Capital to Estab lish Medical Institutions.  This Advice explicitly 
presents the guidelines and policy measures to accelerate the development of private medical institutions, which is beneficial for the increase of medical resource and the expansion of medical 
service supply, and finally achieve the goal of satisfying the peoples need for medical service from 
different levels, building industry competitive me chanism, improving efficiency and quality of 
medical service, and improving medical service system.  The Advice clarified that opening up of medical service market, encouraging and guiding foreign capital to hold medical institutions are 
measures of great importance.  Recently, revised Catalogue for the Guidance of Foreign-Invested Industries which formally 
implemented in 30 January 2011 has classified the foreign-invested medical institution in forms of 
joint venture and cooperative enterprise from restrained category to allowed category. 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
CUSTOMS PROCEDURES, VALUATION, AND RULES OF ORIGIN 
 
According to the Report of the Secretariat, Chin a has adopted a "single window" project, which is 
intended to realize data sharing for customs clearance, including data exchange concerning 
cross-border RMB settlement, and on-line audit.  Cu stoms has also promoted cooperation with the 
customs authorities in China's FTA partners, main ly in electronic networking with regard to 
preferential certificates of origin, and customs da ta exchange system, with the European and the 
Russian Customs, respectively. (Document: WT /TPR/S/264,  page 25, para 7)      WT/TPR/M/264/Add.1 
 Page 215 
 
 
   
Question: 
 
6). Indonesia would like to acquire more detailed information on China's single window project.  
Please explain further China's single window proj ect related to realize data sharing for customs 
clearance, including data exchange concerning cross -border RMB settlement, and on-line audit.   
 
Answer:  The Chinese government has set up a China E-Po rt Platform for relevant departments to 
exchange electronic data for customs clearance.  Take the data exchange concerning cross-border 
RMB settlement for example, China Customs exchanges the electronic da ta of customs declaration to 
the Central Bank via China Electronic Port Platform, and the Central bank then compares the electronic data of customs declaration with the da ta regarding the cross-border trade collection and 
payment of enterprises, which helps to examine th e authenticity of the trade with cross-border RMB 
settlement and prevent and control risks.  
 
7). As a reminder, Indonesia proposed bilateral cooperation on the certification and  verification 
of Certificate of Origin Form E under the ACFTA through electronic arrangement (online).  The 
proposal was rejected by China due to the absence of an integrated system in China.  Therefore, with 
regard to the latest development, Indonesia would li ke to request China to reconsider the proposal in 
order to achieve a balanced bilateral trade.  
 
Answer:  In regard of the Internet linked inspection and online verification of the Certificate of Origin 
Form E under the ACFTA proposed by Indonesia, China has not yet received any formal written 
proposal from Indonesia.    STANDARDS AND OTHER TECHNICAL REQUIREMENTS 
 
According to the WTO Secretariat's report, there are four  levels of standards in China:  national, trade, 
local and enterprise standards.  If there are no natio nal standards for technical requirements that need 
to be standardized for certain trades throughout the country, trade standards may be formulated.  
Trade standards become null and void automatically  after the corresponding national standards enter 
into effect.  In the absence of national standards or trade standards, local standards may be formulated 
on safety and sanitation requirements for industrial goods  that need to be unified in the provinces, 
autonomous regions, and municipalities directly und er the Central Government.  Local standards 
become null and void automatically after the corres ponding national standards or trade standards enter 
into effect. (Document: WT/TPR/S/264, page 46, para 85)  
 
Question: 
 
8). China has recently imposed a national standard for nitrate content in Bird Nest products 
(30 ppm).  Please explain further detailed informa tion on the examination method taken by China and 
whether China took into account the international  standard on nitrate content in food products in 
determining the national standard.  
Answer: CAC and other developed countries have so far not imposed a standard for nitrate content in 
Bird Nest products.  In 2011, the incident of Red-blooded Swallow Nest happened in China and in 
order to address the relevant issues regarding the Bird Nest products contaminated by nitrate, our 
ministry, with the experts from the Malaysian Minist ry of Health, imposed a temporary standard for 
limited nitrate content in the edible Bird Nest products after jointly assessing the risk, taking into 
consideration the consumption of Bird Nest products by Chinese residents, their diet structure and the 
processing technique of Bird Nest products and referr ing to as references the relevant data regarding 
nitrate by JECFA.  The examination method is implemented according to the  Determination of Nitrite 
and Nitrate in Food GB5009.33-2010 as a national food safety standard.  WT/TPR/M/264/Add.1 
Page 216 
 
 
   
INTELLECTUAL PROPERTY RIGHTS 
 Regarding to Secretariat's report that Intellectual pr operty rights in China are enforced by two means: 
administrative actions, and judicial measures.  Ad ministrative actions consist of mediation by the 
authorities, involving a large number of agencies.  Judicial actions are taken through the public security authorities, procuratorial organs, and the courts. (Document WT/TPR/S/264, page 95, 
para 322) (WT/TPR/S/264, 95, 322)  Question: 
 
9). China has shown progress in terms of enforcement of intellectual property rights. China has 
issued a number of laws, regulations, and departmental rules on IPRs protection have been promulgated or amended since 2009.  These incl ude the Copyright Law, the Implementation 
Regulation of the Patent Law, and the Regulation on Custom Protection of Intellectual Property.  
China intends to promote its campaign for tackli ng IPR infringement.  According to Secretariat's 
Report, IPRs in China are enforced by two means:  administrative actions and judicial measures.  
Judicial actions are taken through the public security , procuratorial organs an d the courts.  Please 
explain further about the main difference of the pub lic security, procurator ial organs and the courts 
and how these things can be encouraged for IPRs enforcement in China.     
Answer:  In the tackling of IPR infringement and of manufacturing and selling counterfeit and shoddy 
goods, the public security is mainly responsible fo r transferring to the procuratorial organs the 
suspected criminal cases accepted and cracked afte r them being transferred by administrative 
departments, the procuratorial organs on one hand , exert a supervision on the administrative acts by 
administrative departments of transferring cases to the public security and also on the receiving acts 
by the public security of transferred cases by administrative departments, while on the other hand, approve the arrest of and bring in indictments ag ainst the suspects transferred by the public security, 
and the courts are responsible for trying the susp ected criminal cases prosecu ted by the procuratorial 
organs. 
 
In order to mobilize all social forces for them to participate in the IPR protection, the Chinese 
government has adopted a series of measures.  Fi rstly is to ascertain the responsibilities of local 
governments.  Relevant responsibility of the person li able will be called to account upon a proposal of 
IPR infringement or of manufacturing and selling c ounterfeit and shoddy goods.  The combat against 
IPR infringement and manufacturing and selling co unterfeit and shoddy goods will be taken into 
consideration when appraising the achievements of  local governments and the effect of social 
management and comprehensive control.  Secondly is  to intensify the responsibilities of enterprises as 
legal entities.  The building of an honesty and cr edit system shall be enhanced, and the market 
mechanism of upholding integrity which leads to ga in and discarding dishonour which leads to loss 
shall be established.  Thirdly is to encourage the wide participation of public.  The cases reported and 
complaints raised by the public shall be investig ated into and dealt with in a timely manner.  A 
rewarding system for making a report or lodging a complaint has been implemented in some fields, 
and for example, one report of an illegal compact disk production line by the public will result in a 
one-time reward of 300,000 RMB for the reporter by the Chinese government.  
 IV. TRADE POLICIES BY SECTOR AGRICULTURE 
  
According to the Report by Secretariat related to domestic support, purchases of agricultural machines 
are also subsidized at rates between 20% and 30%  of the sale price.  In 2008, the scheme was 
extended to cover the whole country.  The local au thorities are responsible for running the scheme and 
deciding what machines are covered pursuant to a catalogue of agricultural machines issued by the  WT/TPR/M/264/Add.1 
 Page 217 
 
 
  central government.  The amount provided for the purchase of agricultural machines has increased 
steadily, from 2 billion in 2007 to 15.5 billion in 2010. (Document WT/TPR/S/264, page 105, 
para 30)  
 
Question: 
 10). Regarding to China's input subsidies, the data from Secretariat's report shows that there is an 
increase in subsidy provided by Government for pur chasing agricultural machines from 2 billion in 
2007 to 15.5 billion in 2010, in th ree years China has provided a significant number of subsidy of to 
purchase of agricultural machines.  How does China adjust its policy to  be in line with Agreement of 
Agriculture particularly on Article 6 regarding to  Domestic Support Commitments to avoid trade 
distorting effects? 
 
Answer: The subsidy provided by Government for pur chasing agricultural machines is a support 
measure under amber box for no product-specific, inst ead of product-specific. China implements the 
support measure under amber box for no product-specific within the de minimis limits, few distorting 
effects on trade will be produced.  According to the Report by Secretariat related to Dom estic Support, that is internal price supports for 
agricultural inputs.  China has protected the inte rnal market from competition from imports through a 
number of programmes that support domestic pri ces.  Minimum purchase prices for rice and wheat 
are set each year by the National Development a nd Reform Commission.  In addition to the Minimum 
Purchase Prices Scheme, the State takes other meas ures to adjust the supply and demand of certain 
agricultural products, such as purchasing and stockpi ling on an ad hoc basis, and stock releasing for 
sugar cane and sugar beet, soybeans, maize, rapeseed, and cotton. (Document WT/TPR/264, 
page 106, para 31 and 33)  
 
Question: 
 11).  Could China clarify deeper the policy of  minimum purchase prices for certain products?   
 
Answer: The prices of agricultural products have become fully formed by market in China.  In order 
to prevent the price from an excessive drop and to  protect the interests of farmers, the Chinese 
government has implemented the policy of minimum purchase price for the two major grain rations:  rice and wheat, in their main producing regions.  B esides, the purchase price for sugar cane in its main 
producing regions shall be determined by the provinci al governments based on the practical situation.  
 Generally speaking, the farmers will sell the food grai n, whether rice, wheat sugar cane or others, with 
prices fluctuating in response to market conditions  with no interference from the government.  When 
the actual prices of rice, wheat and sugar cane in their main producing regions  drop sharply and below 
the minimum purchase prices, the farmers can sell th e foodgrain to the enterprises designated by the 
government according to the minimum purchase prices in order to reduce the loss brought about by 
price drop.  
MANUFACTURING 
 Related to the policy to develop manufacturing m achineries automatically, in this case MIIT is 
responsible for developing industrial strategies, ma king industry plans and standards, and monitoring 
the operations of the industry. (Document:  WT/TPR/S/264, page 118, para 77).    
 WT/TPR/M/264/Add.1 
Page 218 
 
 
  Question : 
 
12). Please explain what are the products which have fulfilled the industrial standards, and what 
methods or means that are used by Chinese go vernment in implementing the industrial standard?  
 
Answer: The Chinese government has made a top priority the standard making and promotion.  
Firstly is to strengthen the publicity of the sta ndard, encrourage and support the local responsible 
departments of trade, industrial associations, st andardizing bodies and prof essional institutions to 
actively carry out the publicity of the standard and the training of standardization.  Secondly is to 
enhance the benchmarking and standardization of en terprises, guide the enterprises to set up a system 
with the technical standard as the core, industrial standard as the main part and the administrative 
standard as the support, enhance the benchmarking and standardization in such sectors as R&D and 
manufacturing, and promote the or ganic integration of standardi zation and enterprises management. 
Thirdly is to guide the local responsible department s of trade to strengthen their steering and training 
of enterprises according to relevant requirements,  expand the support to enterprises reaching the set 
standard, advance the standardization of  industry and improve the product quality.  
  
INDONESIA - ADDITIONAL QUESTIONS 
 III. TRADE POLICIES AND PRACTICES BY MEASURE 
Customs procedures, valuation, and rules of origin 
 
F. China's main legislation and procedures on customs clearance has remained unchanged since 
its previous Review in 2010.  Customs is in charge of administering and enforcing customs 
legislation.  Consultations with the private sector (domestic or foreign) on matters related to customs 
procedures are conducted through direct communi cations with private enterprises and various 
chambers of commerce, and through public hear ings;  information on customs procedures are 
available through notices, publications, official  websites, and enquiry points. (Document: 
WT/TPR/S/264, page 24, para 1 and 4)     
 
Question:  
 
6). Indonesian exporters up until now still experiencing difficulties in exporting goods to China 
due to the complex import procedures.  This condition is a barrier for Indonesia China trade 
performance. Could China in th is case provide clear and detaile d customs procedures for exporting 
countries?   
 
Answer: Please refer to the official website of General Administration of Customs of China, 
http://www.customs.gov.cn/publish/portal0/.   Import Prohibitions and Licensing  
 
H.  According to the Report of The Secretariat,  China maintains import prohibitions on grounds 
of public interest, environmental protection, or in accordance with interna tional commitments.  The 
Report further explained that imports may also be prohibited on grounds of animal, plant, or human 
health and safety, in accordance with Article 16 of the Foreign Trade Law and Article 4 of the 
Regulations for the Implementation of the Law on the Entry and Exit Animal  and Plant Quarantine 
(Document: WT/TPR/S/264, page 33 and 34, para 36 and 39)  
  WT/TPR/M/264/Add.1 
 Page 219 
 
 
  Question:   
 9). In applying measures regarding an import to China which failed to meet the requirements, 
does MOFCOM or other relevant ministries able to  provide clear information upon the related 
exporters, e.g. company name, address, contac t number, shipping line, batch no, etc?  
 
Answer:  Chinese Ministry of Commerce and related authorities publicizes the Catalogue of 
Commodities Forbidden to Import.  Ministry of Agriculture publicizes import ban when there is 
outbreak of diseases.  General Administration of Qu ality Supervision, Inspec tion and Quarantine also 
publicize the information when imported goods do not  meet the specific inspection and quarantine 
requirements.  These provisions are clear and transparent.  That information is crucial for exporting countries in  order to process the case and to prevent similar 
measures in the future.    
 
10). Could AQSIQ provide notice to the exporti ng countries prior to the above measures, and 
allow sufficient period of time in order to make clarification with interested parties and related 
institution in exporting countries?   
Answer:  Please refer to the answer to the above question.  
 
11). Could China provide a transparent and cl ear guidance regarding the regulation  on import 
prohibition?   
Answer:  Chinese Ministry of Commerce and related authorities publicizes the Catalogue of 
Commodities Forbidden to Import.  Ministry of Agriculture publicizes import ban when there is 
outbreak of diseases.  General Administration of Qu ality Supervision, Inspec tion and Quarantine also 
publicize the information when imported goods do not  meet the specific inspection and quarantine 
requirements.  These provisions are clear and transparent. 
 
Standards And Other Technical Requirements  
I. According to the WTO Secretariat's report, th ere are four levels of standards in China:  
national, trade, local and enterprise standards.  If there are no national standards for technical 
requirements that need to be standardized for certain trades throughout the country, trade standards 
may be formulated.  Trade standards become nu ll and void automatically after the corresponding 
national standards enter into effect .  In the absence of national sta ndards or trade standards, local 
standards may be formulated on safety and sanitation re quirements for industrial goods that need to be 
unified in the provinces, autonomous regions, and municipalities directly under the Central 
Government.  Local standards become null and void automatically after the corresponding national 
standards or trade standards enter into effect. (Document : WT/TPR/S/264, page 46, para 85)   
 
Question:  
 
13). How the exporters might access or find out a bout which standards are applied to  their export 
products to China since the entry point of Indonesia exports to China may vary?  
 
Answer: Basic information on current national standa rds can be found at the website of SAC. 
 
14). For the China's standards that are not notified to the WTO, could China informed them to the 
exporting countries embassy, consulate or mission in China or is it possible to informed it in the 
China's official websites?   
 WT/TPR/M/264/Add.1 
Page 220 
 
 
  Answer: Basic information on current national standa rds can be found at the website of SAC. 
 
 
JAPAN 
 
REPORT BY THE SECRETARIAT (WT/TPR/S/264) 
 II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES 
(1) INSTITUTIONAL AND LEGAL FRAMEWORK  
(i) Transparency   (Question 1: Paragraph 4, page 11)  
 
The government of Japan is informed that enforcemen t of laws at short notice in China very often 
causes confusion for companies and results in co st increases in order to  address compliance with 
laws within a short period. Japan recognizes the necessi ty of appropriate measures to be taken by 
China, such as the introduction of opportunities to let companies know details of a law with sufficient 
time prior to its enforcement.  Japan would like to take this opportunity to ask if China has any plan 
to establish general rules on get-acquainted period pr ior to enforcement of its laws and regulations.  
Japan also would like to learn China's view with respect to this.  
 
Answer: China has strictly honored WTO agreements and its WTO commitments since its accession 
to WTO, and released all trade-related laws, regul ations and rules at least 30 days prior to their 
enforcement for comments by any individuals, enterprises and other WTO Members.  In addition to 
this commitment, China has also made great effo rts in improving legislation transparency.  Since 
2008, public opinions have been solicited for all dr aft administrative laws and regulations except 
those to be kept secret in accordance with law on the http://www.chinalaw.gov.cn and public opinions 
have also been solicited for all department dr aft regulations on these departments websites or 
http://www.chinalaw.gov.cn.  All parties including foreign enterprises and individuals can propose 
opinions and suggestions.  These two major measures have also helped enterprises and individuals 
timely understand and get familiar w ith laws, regulations and rules. 
 
(ii) Central-provincial relationship     (Question 2: Paragraph 18, page 14) 
 
(1) In China, the interpretation of implementation measures of la ws and regulations often varies 
across regions or depending on each official's judgmen t.  In addition, in some cases, detailed rules 
and measures are not made in time when enforcing laws and regulations.  Japan would like to take 
this opportunity to know China's view.    
Pursuant to Article 42 of the Legislation Law of the People's Republic of China, power of law 
interpretation is vested with the Standing Committee of the National People's Congress.  As stipulated 
in Article 47 of the Legislation Law, the legal  interpretation by the Standing Committee of the 
National People's Congress has equal effect with laws. According to Article 31 of the Ordinance 
Concerning the Procedures for th e Formulation of Administrative Regulations, administrative 
regulations to be further clearly defined or be added with supplementa ry provisions shall be 
interpreted by the State Council, and the interpretat ion of administrative regulations shall have equal 
effect with the administrative regulations.  Pursuant to Article 33 of the Ordinance, if the legal organs 
of the peoples governments of provinces, autonomous regions and municipalities directly under the 
Central Government and relevant departments under th e State Council request the legal organ of the 
State Council to give interpretations for issues c oncerning the specific application of and regulations 
during administration work, the legal organ of the State Council may research and give reply;  for  WT/TPR/M/264/Add.1 
 Page 221 
 
 
  significant issues, it may propose opinions and give reply after the opinions are submitted to and 
approved by the State Council.  According these pr ovisions, China has unified interpretation of laws 
and regulations and there are no different interpre tations across regions or depending on each 
officials judgment.  The necessity to make suppor ting detailed rules and measures for a specific law 
or regulation depends on the implementation of su ch law or regulation, so it is unnecessary to 
formulate supporting detailed rules when the law or regulation has deta iled provisions and is 
implemented smoothly.  All relevant departments attach great importance to laws and regulations 
needing detailed implementing rules and demand that  such detailed rules are implemented at the 
same pace with the laws and regulations as far as possible. 
 (2) In China, Japanese enterprise s often receive verbal answers from the authorities to their written 
applications and questions.  To address this issue, re plies in written form from the authorities would 
be desirable so that the relevant authorities and ente rprises can efficiently cope with an issue over 
different interpretations.  Japan would like to know China's view on this.   
 Answer: According to the Legislation Law of the Pe ople's Republic of China and the Ordinance on 
the Archivist Filing of Regulations and Government Rules, when any social organization, enterprise, 
business organization or citizen believes that ad ministrative and local laws and regulations, 
regulations on the exercise of autonomy, separate re gulations or rules conflict with the Constitution or 
national laws, it can propose review suggestions in  writing to authorities responsible for archivist 
filing review.  Currently, filing review authorities at all levels give replies in writing to most written 
review suggestions in accordance with laws, re gulations and relevant official documents. 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE  (1) MEASURES DIRECTLY AFFECTING IMPORTS 
(i) Customs procedures, valuation, and rules of origin 
 (Question 3: Paragraph 1, page 24 )  
 
According to the Secretariat report,  China's main legislations an d procedures on customs clearance 
have remained unchanged since 2010.  However, differen t interpretations of relevant legislations and 
HS codes by each Customs are causing confusions  frequently when impor ting/exporting goods (e.g. 
different HS code to the same product).  Ja pan asks China to make sure that the unified 
administration of the legislations of the customs clearance be secured at all Customs and would like 
to know what kind of measures it can take. 
 Answer: The consistency of commodity classification is a problem obsessing the Customs of all 
countries and many factors can result in incons istency in classification, of which inaccurate 
declaration and incomplete information are the major ones that lead to inconsistent classification.  The 
Chinese Customs has always been committed to improving the accuracy and consistency of the 
commodity classification law enforcement.  The Ch inese Customs determines the classification of 
goods in accordance with the provisions of Cu stoms Import and Export Tariff of the People's 
Republic of China and the Annotations on Commodities and Articles under the Customs Import and Export Tariff, and has adopted many measures such as standardizing declaration, follow-up sample 
verification, information technology support system s as well as pre-classification and other means to 
enhance the consistency of classification law enforcement. 
 
In addition, in recent years the Chinese Customs has done  a vast amount of hard work in legislation to 
promote unified law enforcement:  first, the Chin ese Customs has established a relatively sound basis 
system for law enforcement which is composed of 2 laws, 16 administrative regulations, 117 rules and 
regulations, nearly 1,000 announcements of the Ge neral Administration of Customs, as well as other 
regulatory documents.  Second, we compiled the St andardized Norms of th e Customs Practice which 
has become an important means of enhancing unifie d law enforcement of Customs.  Third, we have WT/TPR/M/264/Add.1 
Page 222 
 
 
  strengthened filing on record for review of the normative documents of Customs directly under the 
General Administration of Customs to guarantee th e unified basis for law enforcement of Customs 
nationwide. 
 
In addition, in the summer of 2010, Customs suddenl y decided that all exports to Japan go through an 
unpacking inspection.  While the inspection no longer takes place, Japan wishes  to ask China for the 
explanation of the criteria of the decision as they were unclear. 
 
According to what we have learned, in 2010 the Ch inese Customs did not require that all exports to 
Japan must go through an unpacking inspection.  
(Question 4: Paragraphs 1-9, page 24-25) 
 
Thanks to the various efforts made by the Chinese  Government, the efficiency and quality of customs 
clearance have largely improved.  Neverthele ss, there are still some problems arising from 
complicated procedures such as taking a long time to identify HS codes when importing products 
even though the company had a license for the e xpedite import system, as well as complicated 
export/import controls on bonded raw materials at Custom s, Japan, therefore, would like to ask China 
whether it has any plan to simplify these procedures.   
 
Answer: First of all, it is recommended that the Japanese side make clear the meaning of the license 
for the expedite import system.  Secondly, compan ies have the obligation to correctly declare the 
tariff codes to Customs; therefore, whatever produc ts they may import companies need to identify the 
tariff codes of imported goods, and to identify HS codes when importing products mentioned in this 
question is a necessary procedure for Customs clear ance.  Thirdly, currently Customs exercises 
bonded management for raw materials of processing trade, and except for prohibited and restricted 
commodities we have no import/export control over other commodities.  
(vi) Contingency trade measures 
 
(Question 5: Paragraphs 48-67, page 36-42)  
1. It has been pointed out by various WTO Members at various opportunities such as TRM at 
the AD committee that China's AD investigations are often not undertaken in a manner consistent 
with the AD agreement in terms of transparency and due process, for example , with respect to the 
initiation and subsequent investigation, dumping ma rgin calculations, and the examination for the 
determination of injury.     2. Relating to these points, Japan would li ke to ask two questions regarding the AD 
investigation on certain high-performance stainl ess steel seamless tubes imported from Japan. 
 
(a) In the application which was the basis for the initiation of this investigation, the applicant did 
not use official Chinese statistical data but u sed that of some unknown third party where the 
interested parties could not check its credibility.  T hat China has initiated the investigation based on 
such an application that did not have sufficient eviden ce is thought to be inconsistent with Articles 5.2 
and 5.3 of the AD agreement.  Could China please explain this?  
 Answer: The preliminary determination of this case w as made on 8 May 2012.  The investigating 
authority decided in the preliminary determination th at the applicant had made their best efforts to 
provide adequate evidence to initiate the inv estigation.  During 20-day comment period the 
investigating authority did nt receive any comment from Japanese government regarding this issue. 
  WT/TPR/M/264/Add.1 
 Page 223 
 
 
  (b) As end user's state, the products imported fr om Japan are clearly different from the domestic 
products in China in terms of qu ality and safety and therefore hardl y compete with each other.  
Nonetheless, that China treats these products as  like products and is conducting injury examination 
could be inconsistent with Artic le 3 of the AD agreement.  Could China please explain this?  
 
Answer: The preliminary determination of this case was made on 8 May 2012.  After conducting 
examination and review, the investigation authorities believe that the scope of investigated products 
should be determined in accordance with the desc riptions of investigated products and relevant 
indicators specified in the Announcement.  Steel t ube products of S304H, HR3C and other types by 
Japanese enterprises are consistent with relevant d escriptions on C, Cr, Ni and Nb contents, tensile 
strength, yield strength and other basic physical a nd chemical characteristics and technical indexes as 
well as major functions stated in the Announcemen t.  The differences among these types are normal 
differences among like different types of the similar product.  There is no essential difference between 
these products by Japanese products and the products of same specifications by Chinese enterprises in 
terms of basic physical and chemical characteristi cs, technical index, external appearance, production 
process, raw material, production equipment, usag e, marketing channel and customer group.  
Therefore, in the preliminary determination, the i nvestigation authorities decided to temporarily deny 
the proposal to exclude the products of S304H, HR 3C and other types from investigated products.  
The investigation authorities didn't receive any comment on the preliminary determination from the 
Japanese Government during 20-day comment period after the verdict was made public. 
 
(vii) Standards and other technical requirements     
(a) Standards and technical regulations     
 (Question 6: Paragraph 80, page 45) 
 
What is the content of Administrative Measur es for Mobile Smart Terminals currently being 
implemented?  What kind of certification has to be obtained when manufacturing and selling smart 
phones under this measure?  Is it going to make public consultation before being published?  Also, 
was there any TBT notification beforehand in terms of  the content of certification?  If so, which 
notification is applied?  If not, what is the reason for that?   
 
Answer: MIIT formulated Notice on Strengthening Netw ork Access Management of Mobile Smart 
Terminals (the Administrative Measures for Mobile Smart Terminals by EU, and thereinafter called Notice) to protect user information and users legiti mate rights, safeguard network information security 
and promote healthy development of the intern et industry, which is commonplace among different 
economies.  The Notice is formulated in line with Telecommuni cations Regulations of PRC and Rules on Network 
Access of Telecommunication Equipment, aiming at  complementing and perfecting current network 
access management of mobile smart terminals and establishing new supervision framework and 
management system.  No new certification and administrative approval is added.  
 In drafting the Notice, opinions from enterprises both home and abroad and relevant organizations are 
taken into account.  MIIT is planning to solicit public opinions online.    
No new certification is added and MIIT is discussing the possibilities of TBT notification. 
 
(Question 7: Paragraph 80, page 45)   
 
1. In December 2009, "Administration of Cosm etics Application Acceptance was published, in 
which requirements for documents necessary fo r a new cosmetic ingredient was outlined. 
 WT/TPR/M/264/Add.1 
Page 224 
 
 
  2. In May 2011, Guidance for new cosmetic i ngredients application (free translation of Chinese 
original title) was published in which an ingredient was stipulated as necessarily having the form of a 
single molecule, and not a complex, nor a mixture. 
 
3. However, this new Guidance contains a lo t of undefined terms, and as a result, the new 
ingredients examination has been delayed for over 2 years, and almost  all applications have been 
returned and rejected.  This policy is considered  to be trade-restrictive rather than having the 
intended effect: to improve public hygiene by  ensuring the safety of new ingredients. 
 
Based on the above, we would like you to clarify the following points:   (a) There are many cosmetic raw materials such as plant extract s which are distributed in the 
form of a mixture or complex containing solvents.  They are formulated as they are supplied. Safety is 
duly evaluated even in the case of extracts including solvents, etc., however in Article 3(2) 2 (2) of the 
guidance it is stipulated that the raw material should not be a mixture or a complex.  While 
technically unavoidable solvents, stabilizers, carrie rs are excluded from this scope which, stated 
simply, should mean that an evaluation of safety is re quired to transport a single molecule in China. If 
these lines are designed to be interp reted as such, we would like to  urge China to explain this 
requirement based on scientific grounds;  why a safety evaluation is necessary with a single (isolated) 
molecule, and to show issues which have resulted from  safety evaluations carried out on non-isolated 
substances.   (b) Japan considers that there is a need to expand u pon and clarify the stipulation in Article 3, 
implementing detailed rules for this article.  We would like to urge China's comments on this matter.   
 
Answer:  As Japan has raised this issue for a third ti me, China suggest experts from Japan could have 
bilateral exchanges with China to better clarify technical details.  
 
The following is the written reply from Chin a to the issues raised  by Japan at the 56
th WTO/TBT 
meeting:  
 
Applicants who provide materials involved with co nfidential IPR information shall make this point 
clear in application.  Whether technical problems on natural ingredients an d formula ingredients will be resolved depends, 
and bilateral technical exchanges are encourages w ith SFDA.  http://123.127.80.6/enterprise/index.jsp 
 According to SFDA regulations, applicants can log ont o the following website to check the status of 
evaluation of applied new ingredients via username s and passwords: http://123.127.80.6/enterprise/ 
index.jsp.  (Question 8: Paragraph 80, page 45)  
It is recognized that 3GPP has approved ZUC as Ch ina's 4G LTE encryption algorithm and China is 
currently preparing an amendment of  relevant laws and re gulations.  We would like China to explain 
what procedure is required when China's authority co nducts a test and a certification.  Also, we would 
like to know the schedule regarding plan ning the relevant laws and regulations.   
 
Answer: The Ministry of Industry and Information Technology has issued the Technical 
Requirements for ZUC-based LTE Terminals and Ne twork Equipment and the project for testing 
methods of communication industry standards, and started the transformation of ZUC algorithm from 
an international standard to a domestic standard .  The China Communications Standards Association 
is responsible for the formulation of  related standards.  In addition, at the request of the domestic and  WT/TPR/M/264/Add.1 
 Page 225 
 
 
  foreign enterprises, ZUC algorithm has been include d in the TD-LTE scale technical test.  Currently, 
relevant organizations can obt ain ZUC related technical documents via the following link 
(www.dacas.cn;  www.ccsa.org.cn;  www.dacas.cn/zuc10).  All organizations are subject to the 
relevant provisions of the State Cryptography Administration when developing, manufacturing and 
selling ZUC-based products. 
 
(Question 9: Paragraph 85, page 46)  
1. In China, there are not only national st andards, but also professional and local standards, 
which are established by each department of st andardization administration under the State Council 
or the local government, respectively.  Regarding to the non-national standards, Japan would like to 
know what kind of measures the central government has taken:      (1) to fulfill the obligation under Article 2 of th e TBT Agreement in respect of the professional 
standards, and   
 (2) to meet the obligation under Article 3 of the TBT Ag reement in respect of the local standards.     
 2. Specifically, in regard to local government s, how has the central government fulfilled its 
obligation under paragraph 1 of Ar ticle 3 of the TBT Agreement, which stipulates that members shall 
take such reasonable measures as may be available to  them to ensure compli ance by such bodies with 
the provisions of Article 2?    
 
Answer: Article 6 of the Standardization Law of the People's Republic of China stipulates that 
Where, in the absence of both national and trade standards, safety and sanitary requirements for 
industrial products need to be unified within a province, an autonomous region or a municipality 
directly under the Central Government, local standa rds may be formulated.  Local standards shall be 
formulated by departments of standardization ad ministration of provinces, autonomous regions and 
municipalities directly under the Central Gove rnment and reported to the department of 
standardization administration and the competent administrative authorities under the State Council 
for the record, and shall be annulled on publication of the national or trade standards.  Based on the 
requirements of WTO/TBT, China will further enhan ce the notification of local mandatory standard. 
 
(Question10: Paragraphs 86-87, page 46) 
 
The government of Japan is informed that the ap plication of mandatory st andards in China often 
causes confusion.  The confusion seems to be due to the different mandatory standards by the central 
and local governments, and non-identical application of the standard at different sites even if the standard is identical.  Japan would like to know how the central government  has taken measures to 
eliminate these standard application gaps between the different sites and to strengthen cooperation 
between central and local government.  
 
Answer: Refer to the answer of question 9. 
 
(Question 11: Paragraph 88, page 47)  
 
Japan welcomes China's continual efforts to fu rther enhance transparency in its standardization 
process and SACs announcement that China allows foreign-owned companies established in China to 
participate as voting members in technical committe es responsible for the promulgation of national 
standards.  In this respect, Japan would like China to provide detailed information on the procedures 
and administrative rules for the participation of foreign-owned companies in technical committees 
and to indicate the way to access the relevant documents. 
 WT/TPR/M/264/Add.1 
Page 226 
 
 
  Answer: Enterprises both home and abroad shall apply fo r membership in line with Regulations on 
National Standardization Technical Committees ([2 009] No. 3).  The detailed procedures are the 
following: 
 
One, experts from enterprises fills in Registra tion on Membership of National Standardization 
Technical Committees.  Two, enterprises send letters, together with th e filled Registration on Membership of National 
Standardization Technical Committees to the t echnical committee to recommend their experts. 
 Three, the secretariat of the technical committee review the quality of the experts and finish the 
internal procedures for approval accordi ng to the rules of that committee. 
 Four, the technical committee submit the applicati on to industry authorities, who will submit to SAC 
for approval after they agree.  For technical commi ttees directly under SAC, the application shall be 
submitted to SAC for approval.  In principle, th e membership of a technical committee is allowed 
change once a year.  Five, for those applications in line with Regist ration on Membership of National Standardization 
Technical Committees and approved by SAC, th e technical committee shall issue Letter of 
Appointment.  Registration on Membership of National Standard ization Technical Committees and Registration on 
Membership of National Standardization Techni cal Committees can be downloaded from the website 
of SAC http://www.sac.gov.cn/bzhgl/gnbzh /zyjswyh/gzzd_634/201012/ t20101220_64623.htm 
 
(b) Product certification  
 (Question 12: Paragraph 96, page 49) 
 
China mentioned that foreign certification b odies could acquire qualification for the CCC system 
through inter-government agreement in the previous Tr ade Policy Review.  As this description still is 
not clear enough, we would like to learn actual examples of foreign-based certification bodies as well 
as laboratories and we also would like to know China's policy regarding the issue.   
 Answer: China has signed consignment agreements with 19 overseas certifying bodies (located in 
Europe, America, Japan and other economies) fo r follow-up inspections of 3C certification over 
factories abroad. CNCA accept the inspec tion reports and results of these bodies. 
 
(viii) Government procurement 
 
(Question 13: Paragraph 116, page 54)  
According to paragraph 116 of the Report by the Secretariat, the Chinese Government explains that it 
does not consider procurement by SOEs as governme nt procurement, because their daily operations 
are not controlled by the Government.  Japan would li ke China to further explain their status of not 
being controlled by the Government, in terms of:  (1) laws, regulations or administrative procedures 
applied to these SOEs;  (2) the SOEs authority vested in them for the purpose of performing functions of a governmental character;  (3) Governments sh are in the SOEs capital and voting rights;  (3) 
Governments involvement in appointment of the SOEs directors and managers;  (4) Governments involvement in the SOEs operations or business d ecisions;  (5) the SOEs accountability to the 
Government in respect of its expenditures or pro fitability;  (6) the SOEs financial dependence on 
Government;  (7) exclusive rights granted by Government to the SOEs.       WT/TPR/M/264/Add.1 
 Page 227 
 
 
   
Answer: China's state-owned enterprises are applied to civil and commercial legal systems, including 
the Law of the People's Republic of China on the State-Owned Assets of Enterprises, the Company 
Law of the People's Republic of China, the Accounting Law of The People's Republic of China and 
the Securities Law of the People's Republic of Ch ina.  (2) The Chinese state-owned enterprises are 
independently operated market players and they  do not perform government functions.  (3) In 
accordance with relevant Chinese laws, the state-f unded enterprises refer to a wholly state-owned 
enterprise or company with the state being the sole  investor, or a company in which the state has a 
stake, whether controlling or non-controlling.  The Chinese state-owned enterprises are independent 
market players with legal personality, and th e Chinese government exerci ses the shareholders 
(contributors) rights over state-owned enterprises  according to law and does not intervene in 
enterprises independent operations.  (4) In accord ance with the Company Law and other relevant 
laws, the Chinese government exercises the share holders (contributors) rights over state-owned 
enterprises through meetings of shareholders or board of directors, and does not intervene in the 
independent operations of SOEs.  (5) In accord ance with the provisions of relevant laws, 
administrative regulations and articles of associati on of companies, the state-owned enterprises pay 
taxes and turn over the profits to the government.  For questions (6) and (7), the Chinese government 
does not provide financial, taxation, credit, exclus ive rights or other policies more favorable than 
other types of companies to SOEs. 
 
To sum up, procurement by China's state-owned ente rprises is an operating behavior of the company 
which is not intervened by the government and therefore it does not fall into the category of 
government procurement.  
(Question 14: Paragraphs 117 and 118, page 54) 
 
(1) Japan would like China to reform or stipulat e its main laws regulating China's government 
procurement procedures, including the Government  Procurement Law, ensuring non-discriminatory 
treatment of foreign suppliers and foreign goods and ser vices in a compatible manner with the GPA. 
Please indicate China's view in regard to its time schedule.   
 Answer: China's government procurement follows the princi ple of being open, fair and impartial, and 
we treat products made by Chinese and foreign companies as equals.  
(2) Japan would like China to establish procuremen t-related laws and regulations as early as 
possible in order to have transparent normative gu idelines on the relevant procedures.  And it 
requests China to ensure a sufficient consultation process prior to their establishment with foreign 
suppliers. When will China enact draft procurement regulations?  
 
Answer: The legislative Affairs Office of the Stat e Council is now working on the draft of the 
regulation with reference to the opinions of  various organizations and individuals. 
 
(Question 15: Paragraph 121, page 55) 
 
As for construction services, Chinese Construc tion Law imposes a minimum professional staff 
requirement and a minimum registered capital requi rement, among others, on foreign enterprises, 
associated with a qualification certificate, which in effect limits the access of foreign contractors into 
the government procurement market in China.  Japan would like to know the number of foreign 
contractors that have a Super Grade certificate.  Ja pan would also like to know the future possibility 
of relaxation of these requirements, i.e. the mini mum registered capital requirement, which China 
mentioned in the past Transitional Review Mechanism.   
 WT/TPR/M/264/Add.1 
Page 228 
 
 
  Answer: The Chinese Construction Law and the Regula tions on the Administration of Foreign-
invested Construction Enterprises explicitly stipulat e that the same qualification standards are equally 
applicable to foreign-invested and domestic-inv ested construction enterprises.  They also impose 
equal requirements on registered capital and register ed professional staffs.  China has always strictly 
abided by the accession co mmitment in this sector. 
 After the re-examination and review on Super Grad e certificates, Up till now, no foreign contractor 
obtains a Super Grade certificate.  
 
China believes that registered capital constitutes the basic conditi on for a company to operate and 
undertake legal responsibilities and is of important significance in maintaining corporate operation 
and development and the stable orde r of construction market.  It doesn't plan to cancel or lower the 
requirement for registered capital.   (Question 16: Paragraph 121, page 55) 
 
The difficulty for foreign personnel to get a construc tor (jian zao shi) license is also an obstacle for 
foreign contractors to enter into  the Chinese government procuremen t market.  Could China show 
how many foreigners have passed an exam and received a constructor license?  Also, could China 
show the number of constructors working for forei gn firms?  Is there a possibility to extend the 
transitional policy on the provisional qualification of  constructor for pers ons who were qualified 
project managers, which is s upposed to end in February 2013?  
 
Answer: According to Article 34 of the  Provisional Rules on Qualification System for Constructors, 
upon the approval by relevant authority under th e State Council, those foreign professionals and 
professionals of Hong Kong, China, Macao, China and Chinese Taipei who are allowed to conduct 
management of construction projects in China ma y participate in the qualification exam for 
constructors and apply for registration.  Up till now, there has been no foreign professional who 
participated in the exam.  
Temporary Practicing Certificate for Class-I Arch itect will be abolished on 27 February 2013 
according to the Supplementary Notice on Rele vant Issues Concerning the Transition from 
Qualification Management System for Project Mana gers of Construction Companies to Qualification 
System for Constructor.  China will decide on th e extension of transitional policy according to the 
market situation by then.  (Question 17: Paragraph 125, page 55) 
 
According to paragraph 125, imports used for procurement purposes require approval from the 
Ministry of Finance, or its corresponding departmen ts at the local level. Please explain the purpose 
and the details of the procedure of the approval.   
 Answer: The purpose of the approval procedure is to st andardize governments behavior of procuring 
imported products rather than restri cting the procurement of imported  products. For more information, 
please refer to the Administrative Measures for the Government Procurement of Imported Products. 
 (Question 18: Paragraph 127, page 56)  (1) According to paragraph 127, the authorities maintain that there is no longer any condition attached to government procurement regarding "i ndigenous innovation".  With regard to this 
statement, please confirm that Article 11 of th e Administrative Measures on the Management of 
Government Procurement Contracts for Innov ative Products and Articles 5 and 15 of the 
Administrative Measures on Governme nt Procurement of Imported Products, which were effective as  WT/TPR/M/264/Add.1 
 Page 229 
 
 
  of September 2008, are no longer effective and no simila r provisions are in eff ect at the national or 
local level.    
 
Answer: Confirmed. 
 
(2) Could China confirm that it will not in troduce preferential government measures for 
indigenous innovation either at national level or  at regional level?  Japan also requests further 
information on the current status.  
 Answer: On 7 November 2011, the General Office of  the State Council issued a document which 
explicitly required that from 1 December 2011 measur es of linking innovation-related policies with 
preferential government procurement policies in  normative documents of the local people's 
governments and other relevant depa rtments will be in valid.  Chin a's indigenous innovation is no 
longer tied to favorable government procurement policies. 
 
(Question 19: Paragraph 120, page 55 and footnote 115, page 53) 
 
Paragraph 120 indicates that the thresholds fo r central government procurement for 2011-12 are 
1.2 million for goods and services and 2 million for cons truction projects.  Meanwhile, footnote 115 
indicates the threshold for procurement under the central budget in 2011 was 500,000 for goods and 
services and 600,000 for construction projects.  Pl ease explain the diff erence between these 
two descriptions.   
Answer: 500,000 and 600,000 refer to the amount of standa rd that must be procured in accordance 
with the Government Procurement Law. And pr ocurement worth 1.2 million for goods and services 
and 2 million for construction projects should be done by public bidding 
 
(2) MEASURES DIRECTORY AFFECTING EXPORTS  
(iii) Export taxes     
(Question 20: Paragraph 138, page 58)  
China has been levying export taxes on fertilizers and their raw materials since 2008 (110% 
maximum including special export tax in 2011).  The Government of Japan has made several 
inquiries regarding China's future plans for elimi nating these export taxes on these items in TRM and 
TPR;  however, the Government of Japan has not received any concrete explanation from China.  
Please explain how this is consistent with the co mmitment to abolish export taxes in accordance with 
Section 3, Article 11 of China's WTO accession protoc ol, since the products are not listed in Annex 6 
of the protocol. 
 
Answer: China's export administration on a few products are for the purpose of protecting 
environment, protecting human, animal or plant life or health, conservi ng exhaustible natural 
resources, or protecting national security.  Such measu res do not constitute arbitrary discrimination, or 
disguised restriction on international trade, and are fully consistent with WTO rules. 
 
(iv) Tax rebates on exports 
 
(Question 21: Paragraph 143, page 59 and Paragraph 174, page 65) 
 
Even under the new Law on Value Added Tax, export companies continue to be obliged to bear the 
cost caused by a low VAT rebate rate for purchase.  As this rebate rate is often changed without prior 
notice, companies face difficulties in handling sub sequent confusion in their budgetary and financial 
management.  How does China plan to improve this situation?   WT/TPR/M/264/Add.1 
Page 230 
 
 
   
Answer: China adjusts its export tax rebate policies acco rding to legal procedures and sets a certain 
period of time for public notice before issuing and implementing such policies. 
 
(vi) Export prohibitions, restrictions, and licensing      
 (Question 22: Paragraph 146, page 59) 
 
(a) In March 2006, the Ministry of Commerce of  China announced the export prohibition rule on 
natural sand.  On 5 January 2007, China declared its  intention to enforce th e rule effective from 
March 2007.  (b) China explains that the purpose of the prohi bition is to conserve natural resources, and that 
the production and consumption of natural sand are also restricted  in parallel with the export 
prohibition.  Has China published the explanation a bout its restrictive measures including legislative 
measures and quantitative restrictions on domestic production and consumpti on of natural sand.  
 
Answer: To control the damages to ri ver channels and marine ecological environment caused by 
exploitation of natural sand resources, since 2002,  relevant Chinese authorities have successively 
adopted a series of measures, such as strictly cont rolling reclamation of land from sea, suspending the 
issuance of natural sand exploitation license, prohib iting sea sand exploitation and strictly control of 
river sand exploitation among others, to strengt hen measures on the exploitation, production and 
administration of natural sand.  In order to coor dinate domestic administration policies for natural 
sand, MOFCOM and the General Administration of Customs jointly issued the [2006] No. 87 Announcement to officially implement the administ rative measures on prohibiting natural sand export 
starting 1 March 2007.  
 
(c) Does China consider that this export restric tion is consistent with the WTO rules?  
 
Answer: Natural sand export restriction is the extens ion of domestic exploitation administration 
measures in the trade link and is consistent with the WTO rules.  In addition, China reported this 
export restriction to the WTO as required.   
(Question 23: Paragraph 148, page 60) 
 
Japan understands that China has been implementi ng an export licensing on coal exports.  While a 
sufficient number of export licenses used to be issu ed in terms of China's export amount of coal, the 
number of issuance has been decrea sing in the last few years, and therefore Japan is concerned that 
this trend might hamper the trade flow of coal .  Please explain how China justifies the export 
licensing on coal under the GATT.   
 
Answer: In recent years, the total amount of coal export quotas has decreased while maintaining a 
stable level.  However, this is not the reason for the reduction of China-Japan coal trade, in fact, in 
recent years China exercised the safe production co ntrol on coal which reduced the coal production 
capacity and as a result, companies resources for export have decreased .  In addition, the sustained 
and stable economic growth in China has made the domestic coal prices higher than the international 
market for a long time, and price factors play ed a role in the decrease of coal export. 
 
In addition, Japan understands that China has rai sed export taxes on coking coal and has newly 
levied taxes on steam coal and anthracite since A ugust this year, while China committed to eliminate 
export taxes for items except for those which are listed on Annex 6 in China's Protocol to the 
Accession.  Please explain how China justifies its export taxes under its commitment upon accession. 
  WT/TPR/M/264/Add.1 
 Page 231 
 
 
  Answer: China's export tax measures is consistent with the WTO rules. 
 
Please describe any plans to review the export licensing measures and imposition of export taxes on 
coal.  
 
Answer: There is no plan about this at present. 
 
(3) MEASURES AFFECTING PRODUCTION AND TRADE     
(iv) Price Control 
 (Question 24: Paragraphs 212-216, pages 72-73)  
 
Please explain whether there are any measures that control prices of goods at the custom houses. If 
so, would China enumerate the goo ds, subject to such measures?   
 Answer: The custom houses in China determine the duty-paid prices of goods on the basis of their 
transaction prices in accordance with the Customs Law of the People's Republic of China, the 
Regulations of the People's Republic of China on Import and Export Duties, the Measures of the Customs of the People's Republic of China for th e Assessment of Dutiable Value of Import and 
Export Goods (hereinafter referred to as Measures)  and other laws and regul ations.  The above laws 
and regulations, especially the Measures, clearly de fined the methods and procedures for customs to 
assess the value of import and export goods, and thei r legislative principles are in line with the 
relevant provisions of the WTO Valuation Agre ement and taking full consideration of actual 
conditions of trade.  In recent years, China's Cu stoms also follows the World Customs Organization 
(WCO) to promote the concept of risk management and assess the price risk of import and export 
goods.  This is no such as thing as control prices of goods. 
 
(vii) Intellectual property rights  
 (Question 25: Paragraph 277, page 86 and Paragraph 292, page 90) 
 
The Secretariat Report notes that  the Guidelines for Competition against Abusing Intellectual 
Property Rights are still being drafted.  Japan is interested in these guid elines, so Japan would 
appreciate the provision of the current version of the guidel ines as they are.   
 
Answer: In line with China IPR Protection Action Pl an, the competent department(s) will draft 
anti-monopoly guidelines regarding the abuse of IPR in accordance with the stipulations of IPR protection.  However, it will take some time to draft such guidelines.  As China's rele vant departments 
are now studying and drafting the guidelines, there is not a specific timetable for the promulgation of such guidelines.   (Question 26: Paragraph 278, page 87 and AII.1, Page 190) 
 
In regard to the amendment to the law dealing with  intellectual property stipulated in paragraph 278, 
Table AII.1 lists the amendment made to the Regul ations on the Administration of Technology Import 
and Export.  Under this amendment, Article 24(3) does not seem to ha ve been amended.  This article 
limits parties from freely negotiating the terms of  the contract because there is no provision 
stipulating except as otherwise agreed upon by th e parties ()as stipulated in Article 353 of the 
Contract Law.  We kindly request China to confir m whether there is any plan to amend Article 24(3) 
to fix the abovementioned discrepancies with the Contra ct Law.  We also request that China confirm 
whether there is any plan to amend Article 27, whic h also differs from Article 354 of the Contract 
Law and limits parties from freely negotiating the terms of the contract.  
 WT/TPR/M/264/Add.1 
Page 232 
 
 
  Answer: According to Article 355 of the Contract Law of the People's Republic of China, where the 
relevant laws or administrative regulations prov ide otherwise in respect of technology import/export 
contracts or in respect of patent contracts or contracts for patent application, such provisions shall 
prevail.  Therefore, there is no conflict between  relevant provisions of the Regulations on the 
Administration of Technology Import and Export and the Contract Law.   
(Question 27: Paragraph 289, page 90)  
 
The Secretariat Report notes that based on the am endment made in December 2010, "if indigenous 
intellectual property rights are tran sferred or licensed to foreign pa rties, the transfer or license is 
subject to the Regulation on the Administration of Technology Import and Export".  Please advise 
what amendments/revisions were made in December 2010.  It is our underst anding that these types 
of requirements, i.e. those imposed on indigenous  intellectual property rights, still exist in the 
Regulations on the Administrati on of Technology Import and Ex port revised in December 2001. 
 
Answer: According to the Decision of the State Council on Abolishing and Amending Some 
Administrative Regulations issued on 8 January 20 11, technologies with one of the circumstances 
stipulated in Articles 16 and 17 of the Foreign Tr ade Law provided in the Articles 8 and 31 of the 
Regulations on the Administration of Technology Import and Export is ame nded into technologies 
with one of the circumstances stipulated in Article 16 of the Foreign Trade Law.  Pursuant to the 
Article 2 of the Regulations on the Administra tion of Technology Import and Export, technology 
import and export refer to technology transfers via trade, investment or economic and technological 
cooperation from overseas countries to China or from China to overseas countri es, including transfer 
of patent right, transfer of patent application right , license for patent exploitation, know-how transfer, 
transfer of technology service and technology transfer s in other forms.  Therefore, the transfer of 
intellectual property rights or license for the implem entation of intellectual property rights from China 
to overseas countries shall be subject to relevant  provisions specified in the Regulations on the 
Administration of Technology Import and Export.   
(Question 28: Paragraph 298, page 91) 
 
According to the draft revision of the Tradema rk Law (Article 32), the proposed amendment 
prescribes that during the examination, when the St ate Trademark Office determines that a trademark 
application contains specific issues for which more explanation or ame ndment/correction may be 
needed, the Office shall send a written document of  examination to the applicant and request the 
applicant to explain or correct the issues within 30 da ys of receipt of the document.  In this regard, 
what types of situation do you envision to determ ine that there are issues for which more explanation 
or amendment/correction is needed for the applica tion?  In addition, is there any plan to provide 
applicants with relevant opportunities for submitting opinions and/ or amendments agai nst reasons for 
refusal by examiners in terms not only of those cases for which explanation or correction is required 
by examiners but also all other cases?  
 
Answer: The written document of examination system sti pulated in Article 32 is designed to make it 
convenient for the State Trademark Office to unders tand the relevant information of the trademark 
application or provide the State Trademark Office with the opportunities to correct some mistakes. 
China is considering making further provisions on the specific applicable procedures in the 
Regulations on the Implementation of the Tradem ark Law after widely soliciting public opinions.  
 
(Question 29: Paragraph 298, page 91) 
 
According to the draft revision of the Trademark La w (Article 37), the proposed amendment suggests 
that a time period for filing an appeal against a decision by the Trademark Office to refuse 
registration to the Trademark Review and Adjudi cation Board should be extended from 15 days to  WT/TPR/M/264/Add.1 
 Page 233 
 
 
  30 days.  However, considering the time taken to conduct a translation process, etc., Japan is 
concerned that the time period of 30 days could be still too short for overseas applicants.  In this 
connection, is there any plan to further extend the time period?   
 Answer: With respect to the time limit for refusing re view application, China needs to consider 
guaranteeing that trademark applicants can better exercise their right of refusing review while guaranteeing the timeliness of trademark registration a pplication.  A too long time period for refusing 
the review application will delay the affirmation of  ownership of trademark registration application 
and cause adverse impacts on the trademark applican t.  The 15-day time period stipulated in the 
existing Trademark Law basically meets the requirement s of most applicants.  In full consideration of 
the situations of overseas applicants, it is appropr iate for the proposed amendment of the Trademark 
Law to suggest a 30-day time period for filing an appeal against a decision by the Trademark Office 
to refuse registration to the Trademark Review and Adjudication Board.  Up till now, China has no 
plan to further extend the time period.  
 
(Question 30: Paragraph 298, page 91) 
 
Is there any plan to protect marks of retailers as service marks in Class 35 of the Nice Classification?     
 
Answer: As what are provided directly by retailers to consumers are tangible commodities instead of 
service, Nice Agreement Concerning the Internati onal Classification of Goods and Services for the 
Purpose of the Registration of Marks (Nice Agreemen t) does not include retail industry into the scope 
of service trademark protection.  Therefore, like other member states where Nice Agreement is applicable, China does not accept the application for registering retail service trademarks for the time 
being.  Whether or not China will accept the app lication for registration is still under research. 
 
(Question 31: Paragraph 301, page 92) 
 
Japan highly appreciates China's efforts to enhance the protection of well-known trademarks outside 
China, for example, the creation of a database of foreign well-known trademarks.  However, it still 
appears that there are many malicious applicat ions and trademarks registered of well-known 
Japanese trademarks or Japanese geographic names of origins and trademarks.  Could China provide Japan with information on further step s which are presently planned to solve the current 
situation?   
Answer: As what Japan mentions, China has attached great importance to the protection of foreign 
well-known trademarks in China and their appellati ons of origin.  First, Chinese Trademark Law 
stipulates explicit provisions on the protection of well-known trademarks and geographical 
indications.  Second, China has strictly prohib ited malicious registrations of others well-known 
trademarks and appellations of origin and adopted corresponding measures, such as implementing 
advance investigation and case-combination inv estigation, properly re ducing the burdens of 
persuasion on the owners of the trad emark or appellation of origin malic iously registered in review of 
adjudication on opposition and dispute cases a nd comprehensively applying legal terms and 
provisions to intensify efforts in crackdown on ma licious registrations.  At the same time, the 
Trademark Review and Adjudication Board will strengthen the research in business theory and empirical study, establish and improve a long-te rm mechanism to address malicious trademark 
registrations under existing legal framework, and protect the legitimate rights and interests of the 
owners of Chinese and foreign well-known trademarks.   
(Question 32: Paragraph 304, page 92) 
 
According to the WTO Secretariat Report, SAIC announced that it had a plan to shorten the time 
required to complete the proce dure for trademark reviews and dispute settlement to 20 months.  We WT/TPR/M/264/Add.1 
Page 234 
 
 
  would appreciate if China could show how it would be implemented?  Also, could China provide us 
with information on plans to further shorten this time frame, if any?   
 Answer: In recent years, in order to shorten the time of trademark reviews and dispute settlement, the 
Trademark Review and Adjudication Board has adopted a series of measures:  firstly, recruiting auxiliary staffs for trademark review to expand th e trademark review team;  secondly, optimizing the 
procedures of case handling and improving automatic ma nagement level;  and thirdly, scientifically 
quantifying the target tasks and reasonably a llocating existing human resources to increase the 
number of cases that can be concluded.  Thanks to these efforts, the trademark review period is 
successfully controlled within 20 months or so.  Due to increasingly growing trademark review 
applications, the Trademark Review and Adjudica tion Board will further enhance these measures to 
ensure not to extend the trademark review period.   
(Question 33: Paragraph 310, page 93) 
 
The Secretariat Report notes that GIs registered w ith the AQSIQ or Ministry of Agriculture are 
protected permanently.  On the other hand, Artic le 22.1 of the TRIPS Agreement defines GIs as 
"indications which specifically iden tify a good as originating in the Members territory, or in a region 
or locality in that Members territory, where a given quality, reputation or other characteristic of the 
good is essentially attributable to its geographical or igin."  This definition suggests that there could 
be cases when GIs, after they have once satisfied th e specific definition, might end up not satisfying 
that definition at a later date.  In such cases, would GIs that have once been registered with the 
AQSIQ or Ministry of Agriculture still be permanently protected?     
Answer: As for the geographic indication of farm produ ce, according to Article 13 of Procedures for 
the Geographic Indication of Farm Produce:  The certif icate of registry of the geographic indication of 
farm produce shall be permanently effective.  Under the following conditions, the holder of the 
certificate of registry shall propose a modificati on application in accordance with the prescribed 
procedures:  (i)  there is an alternation of the hol der of the certificate of registry or of the legal 
representative;  (ii) there is a variation of territorial scope or a transformation of the according natural 
ecological environment.  Article 18 stipulates that  the Ministry of Agriculture shall nullify the 
certificate of registry of the geographic indication and make an announcement to the public if the farm produce with the registered geographic indication or the holder of the certificate of registry cannot be in conformity with Article 7 (about the produce co nditions) or Article 8 (about the conditions on 
applicant) of this Procedures . 
  
Therefore, on the definition and effective dura tion of the geographic indication, between the 
Procedures for the Geographic Indication of Farm Produce and TRIPS agreement exist no 
contradiction.   
(Question 34: Paragraph 312, page 93) 
 
Please indicate any governmental measures to preven t trademark violations by domestic companies.  
 
Answer: The Chinese trademark law system gives equa l protection for both Chinese and foreign 
registered trademarks enjoying exclusive right  of trademark use in China. Neither domestic 
companies nor foreign companies shall infringe upon the exclusive right of trademark use of others.  
According to relevant provisions specified in th e Trademark Law, any person can report or complain 
any infringement upon the exclusive right of trad emark use to local industrial and commercial 
administration and local industrial and commercial administration may also initiatively investigate 
and punish such infringement in line with their responsibilities and authorities.  In addition, a trademark owner may directly file a lawsuit to the peoples court when his right is infringed upon.  
  WT/TPR/M/264/Add.1 
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  (b) Copyright and related rights 
 (Question 35: Paragraph 313, page 93) 
 
The draft amendment of Copyright Law was publicized in last March, and Article 46 of the 
amendment stipulates A record producer other than a copyright holder of a musical work may 
produce a phonogram using the musical work without authorization of the copyright holder after the expiration of a period of three months from the first  date of release of the musical work.  In this 
Article, the exclusivity period of the copyright holder is set at only three months, and the record 
producer is not obliged to consult with the cop yright holder before production.  Please explain the 
consistency between Article 46 and related internatio nal laws, Paragraph 1 of Article 13 of the Berne 
Convention, and Article 9 and 13 of TRIPS.   
 
Answer: Article 13 of the Berne Convention allows the member country to prescribe reservations and 
conditions for the author of the musical work on th e exclusive recording right, but this reservation 
shall not infringe on the authors right to obtain a just  reward prescribed by responsible authorities.  
Article 46 of the draft amendment of Copyright La w allows other record producer to produce other 
phonogram using the musical work of the copyright holder after the expiration of a period of three months from the first date of release of th e musical work;  Article 48 stipulates the Copyright 
Administrative Department of the State Council sha ll be responsible for setting a pay standard and 
request the user to pay the author remuneration base d on the standard within the first month after the 
musical work being produced into other phonogram.  Therefore Article 46 of the draft amendment of 
Copyright Law is completely consistent with Artic le 13 of the Berne Convention, and Article 9 and 
13 of TRIPS.  
In addition, it is our understanding that the scope of  a musical work mentioned under Article 46 of the 
amendment is limited to those recorded on a commercial phonogram and sold in China for the 
first time.  In this regard, Japan requests Chin a to clarify whether our understanding is correct.   
 In the draft amendment of Copyright Law there h as been no stipulation about the conditions on the 
first released phonogram.  
 
(Question 36: Paragraph 322, Table III.12, page 95)  
 
In Table III.12, the number of cases transferred to judicial agencies by the administrative authorities 
still remains at a low level compared to the numb er of administrative actions .  Could China explain 
its own understanding of the rea son regarding this situation?  
 
Answer: The main reasons for the great difference between the number of administrative actions and 
the number of cases transferred to judicial agenci es are as follows:  China has adopted a binary 
punishment model of administrative penalty and criminal penalty against legal violations;  
administrative law enforcement authorities give admini strative sanctions or penalties to the parties of 
minor legal violations in accordance with relevant laws and administrative regulations; serious illegal 
violations meeting the standard of criminal prosecuti on are transferred to the judicial agencies by the 
administrative law enforcement authorities for criminal sanctions or are directly filed and investigated by criminal judicial agencies, resulting in great difference in the number of administrative penalties 
and the number of criminal penalties.  Chinese measures and administrative penalties are equal to the 
penalties for minor offences or police offense by foreign countries, and no criminal prosecution 
doesnt mean appeasement and light punishment for le gal violations.  Chinese criminal legislation and 
judicial agencies have imposed strict penalties against criminal acts.  WT/TPR/M/264/Add.1 
Page 236 
 
 
  (Question 37: Paragraph 322, Table III. 12, page 95) 
 
In Table III.12, there are no data regarding the num ber of criminal prosecutions, while there are data 
regarding administrative actions and civil cases.  Could China provide Japan with the data regarding 
criminal prosecutions?  
 
Answer: China is still in coordination with relevant ag encies to provide response to this question. 
 (Question 38: Paragraph 322, Table III. 12, page 95) 
 
With regard to Table III.12, there are no data regar ding the enforcements based on the Anti-Unfair 
Competition Law made by the administrative author ity.  Could China provide Japan with the data 
regarding such administrative enforcements? 
 Answer: The Chinese industrial and commercial authoriti es investigated and handled 2,750, 2,864 
and 2,391 cases of counterfeiting the specific name, package and decoration of well-known commodities as well as 2,109, 1,760 and 888 cases of using the names of other companies or the 
names of other people in 2008, 2009 and 2010 respectively.   (Question 39: Paragraph 322, Table III. 12, page 95)  
 
We highly appreciate China's effort to encourage rights holders' actions against IPR infringements. 
Could China provide us with information on whether or not the results of administrative enforcements 
are furnished to relevant rights hold ers by each authority in China?  
 Answer: First of all, China's public security has made  a top priority the exchange and cooperation 
with IPR holders and now has established a re gular exchange mechanism with foreign-funded 
enterprises.  Local public security organs have also in succession established such a mechanism. 
 The results of administrative enforcements will al so be furnished to relevant right holders by 
regulators of IPR varieties.  Take trademark for example, the administrative authorities for industry 
and commerce will in accordance with the law info rm the right holder of the result after the case 
being investigated and prosecuted if the right hol der lodges a complaint of trademark infringement.  
The right holder can apply to relevant admini strative authorities for industry and commerce for 
information disclosure according to the Informati on Disclosure Ordinance of the Government of the 
People's Republic of China and ot her relevant stipulations if there is a report or the case is 
investigated and dealt with ex officio by the administrative authorities for industry and commerce on 
their own initiative At the same time, according to  Article 27 of the Regulations of the People's 
Republic of China on the Customs Protection of Intellectual Property Rights, a customhouse shall 
notify the IRP holder about relevant informati on of the goods with IPR infringement after it 
confiscates such goods. 
 
(Question 40: Paragraph 328, page 97) 
 
The WTO Report makes mention of a regular mechani sm to enforce IP protection against Internet 
violation.  Could China provide Japan with more details of this mechanism?  
 Answer: In November 2011, in order to accelerate the establishment of a long-term mechanism, the 
State Council printed and issued the Opinions on Further Intensifying Efforts in Cracking down on 
Infringements of Intellectual Property and Manufact uring and Selling of Forged and Substandard 
Commodities, and normalized crackdown on infringeme nts of intellectual property and manufacturing 
and selling of forged and substandard commodities.   The State Council established a leading group 
headed by Vice Premier Wang Qishan and involvi ng 26 departments for campaigns of cracking down  WT/TPR/M/264/Add.1 
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  on infringements of intellectual property and manuf acturing and selling of forged and substandard 
commodities nationwide, and the office of the le ading group is set up at MOFCOM.  The leading 
group researched and deployed campaigns of cracki ng down on infringements of intellectual property 
rights quarter by quarter and listed network infri ngements as priorities into the key tasks for 
nationwide campaigns of cracking down on infringeme nts of intellectual property and manufacturing 
and selling of forged and substandard commoditi es in 2012, the key work arrangement for the 
first and second quarters of 2012 and the action plan for China's intellectual property protection in 
2012.  
 
(Question 41: Paragraph 331, page 97) 
 
In regard to the judicial interpretations regardi ng the liability of Internet infringement facilitators 
which China had prepared, has the Chinese Supreme C ourt announced the judici al interpretations?  If 
yes, what do the interpretations state?  
 
Answer: The Chinese Supreme Court has not yet announced the judicial interpretations regarding the 
civil wrongs of Internet infringement facilitators, where the relevant stipulations in the General 
Principles of the Civil Law of the People's Repub lic of China and the Tort Liability Law of the 
People's Republic of China are applicable.  
 
In regard to criminal infringement, according to the Views on Several Issues Regarding the 
Application of Laws on Handling Criminal Cases of IPR Infringement publicized in 2011, those who 
know others are committing crimes of IPR infringement but still assist them with Internet access, trust server, network storage space, communication transfer channel, charge collection and disbursement and settlement are considered as committing join t crimes of IPR infringement.  The Views  is a 
regulatory document with a property of judicial interpretation. 
 
IV. TRADE POLICIES BY SECTOR      
(1) AGRICULTURE (ii) Agricultural policies  
(d) Support levels       
(Question 42: Paragraph 39, page 107) 
 
According to Chart IV.2 (a), the amounts of Pub lic stockholding for food security purposes have been 
increasing from 2005 to 2008. Could China show the target stock amount by item?  Please provide 
Japan with the actual stockpile amounts, purchase prices and purchase amounts by the authorities for the past 5 years.     
 
Answer: The relevant data has been notified in China' s domestic support notification on agriculture to 
the WTO.  (Question 43: Paragraph 31, page 107 and Chart IV.2, Page 108)  
 
According to paragraph 31, Minimum purchase pri ces for rice and wheat are set each year by the 
National Development and Reform Commission.  Do es the figure of Public stockholding for food 
security purposes stated in Chart IV.2(a) include th e purchase and storage cost of rice and wheat for 
public stock holds in detail?   
Answer: China is still in coordination with relevant ag encies to provide response to this question. 
 WT/TPR/M/264/Add.1 
Page 238 
 
 
  (4) MANUFACTURING      
(ii) Selected subsectors      
(Question 44: Paragraph 79, page 118)   
Performance requirements on local content or tec hnology transfers still remain as impediments for 
foreign investors in China.  In particular, Japan is concerned that Chin a's requirements imposing 
such technology transfer by the Access Regula tions for New-Energy Vehicle Manufacturers and 
Products violate China's commitment in Paragraph 7.3,  Part I of the China's Protocol of Accession 
and Paragraph 203 of the China's Working Party Re port.  Does China consider these requirements 
are consistent with China's commitm ent in Paragraph 7.3, Part I of the China's Protocol of Accession 
and Paragraph 203 of the China's Working Party Report?   
 
Answer: The development of new-energy vehicles h as been phased at technology R&D and early 
industrialization and such vehicles have to be  technically and economically validated via 
demonstrative operation with relevant technical  standard system established and unceasingly 
perfected.  To grasp core technology is criti cal to ensuring vehicle quality, achieving good 
demonstration effect and protec ting consumers' rights and interests.  The technology of the 
new-energy products is multi-levelled and multi -faceted and China has not imposed a mandatory 
requirement on foreign investors for technology transfer, only requiring the manufacturers in China to 
understand and grasp the fundamental principle, st ructure, function and performance requirement of 
the technology for new-energy vehicles and to make improvements based on the actual running 
conditions.  China has encouraged a fair compe tition in the field of new-energy vehicles and the 
access regulations are applicable to both domestic- and foreign-investment enterprises, with no special restriction on foreign ones.  It is our understanding that the requirement to grasp the core technology 
is consistent with our commitment in China's Protocol of Accession.  
 
(5) SERVICES  
(ii) Financial Services (a) Banking  
 
(Question 45: Paragraph 101, page 122)  
 
According to footnote 80, the operation to clean- up loans to the local government financing platform 
started.  Please provide more details about this.  
 Answer: To prevent fiscal and financial risks and ma intain sustainable economic development and 
social stability, in June, 2010,the State Counc il released The State Councils Notice on Enhancing 
Administration of Local Governments Financing Platform Companies (Guofa [2010] No. 19), an 
overall arrangement was made to intensify the administration of local governments financing 
platforms.  According to this arrangement, the de bts of platform companies in various regions and 
their amount of debts are verified, and results at the current stage have been achieved thanks to 
effective measures taken to regulate and administrate the financing platform companies.  As a result, 
the rapid expansion of these platforms are effectiv ely contained, credit management of banks and 
financial institutions over financing platform co mpanies is intensified, and illegal guarantee and 
commitment of government institutions are basically suppressed.  
 
(Question 46: Paragraph 110, page 125) 
 Please provide more information on the latest  progress as to approximately when the deposit 
insurance scheme is scheduled for introduction.   
  WT/TPR/M/264/Add.1 
 Page 239 
 
 
  Answer:  As for the deposit insurance scheme is concer ned, the relevant regulatory authorities still in 
the process of study, there is no specific timetable for its introduction at this stage.   (Question 47: Paragraph 113, page 126) 
 
Japan understands that the ratio of outstanding lo ans to deposits may not exceed 75%.  Banks in 
China have to lower the loan-deposit ratio within 75% by 2011.  Japan would like China to provide 
details on the progress.  
 Answer: China is still in coordination with relevant ag encies to provide response to this question. 
 
(Question 48: Paragraph 121, page 128) 
 
Regarding paragraph 121 on p age 128 of the Secretariat's Report stating that no single foreign 
financial institution may own more than 20% of the equity of a Chinese financial institution, Japan 
would like to know how this restriction of foreign equity participation can be  justified in light of 
China's schedule of commitments.  
Answer: According to China's services schedule, qualifie d foreign financial institutions are allowed 
to establish wholly foreign-owned banks, including  subsidiaries and branches.  However, China did 
not make any commitments on the acquisition of existing domestic banks by foreign financial 
institutions. Nevertheless, China allows foreign i nvestors to acquire equities of Chinese-funded banks 
up to certain level.  According to Measures on Ad ministration of Equity Investment of Overseas 
Financial Institutions in Chinese-funde d Financial Institutions, the percen tage of equity investment of 
a single overseas financial institution in a Chinese -funded financial institution may not exceed 20%. 
 
China's banking sector is still under-developed. Such  measure is also in line with the prudential 
measures provided for in the Annex on Financial Services under the GATS to protect investors and 
depositors and ensure the integrity a nd stability of the financial system. 
 (Question 49: Paragraph 158, page 135)  
 
Japan understands that foreign insurance companies a re required to have a separate license for every 
province.  It would appear that insurance com panies can provide, other than re-insurance products, 
guarantee insurance and credit insurance without thei r local branch offices.  Japan would like to 
know if there is the possibility for this to be deregulated.   
 
Answer: Provisions and limits on the cross-province bus inesses of insurance companies are stipulated 
in Articles 41 and 42 of the Provisions on the Administration of Insurance Companies.  Up till now, China doesn't plan to adjust such pr ovisions for prudential considerations.  
 (Question 50: Paragraph 158, page 135) 
 
According to explanatory note 143, Exemptions are given to insurance companies engaged in co-
insurance business. Japan would like China to clar ify the meaning of co-insurance business as it is 
used here.  
 Answer: According to the Notice on Relevant I ssues Concerning Large Commercial Insurance 
Business and Master Policy Business (Bao Jian Fa [2002] No. 16, co-insurance refers to insurances 
made by two or more insurance companies and their branches (excluding different branches of one same insurance company) by sharing one same insu rance contract, one same insurance subject, same 
insurance responsibilities, sa me insurance period and same insurance premium.  
 WT/TPR/M/264/Add.1 
Page 240 
 
 
  (iii) Telecommunications 
 (Question 51: Paragraph 178, page 140) 
 
Japan recognizes that the minimum registered cap ital on telecommunications operators is quite 
expensive.  In particular, it is not reasonable to apply the same system without separating between 
equipment-based operators and resale-based opera tors considering the total necessary amount for 
operation.  We had asked the reason for the expen sive minimum registered capital for entering the 
resale-based business, but no specific answers were pr ovided by the Chinese side.  Thus, Japan would 
like China to explain the reason above and the fu ture possibility of abolishing or relaxing this 
provision.  We especially would like to know the reason why there are no plans to change the provision on minimum registered capital in the telecommunications law currently under 
consideration.   
 Answer: For the time being, resale-based business is c onsidered by China as a mode of service 
provision instead of a defined tele-service, therefor e a separate operation licence of tele-service will 
not be issued for it.  China has noticed the concern some WTO Members have had toward the 
resale-based business and is now studying the relevant issues.    
China has seriously studied the request that so me WTO Members would like China to relax the 
provision on minimum registered capital and alread y revised in September of 2008 the Provisions on 
Administration of Foreign-invested Telecommunicati ons Enterprises where the registered capital of 
foreign-invested basic telecommunications  business has been decreased by 50%.   
 With a vast territory and a huge population, China n eeds to enormously financial input in order to 
back up the large-scaled investment in network creation   
 
(Question 52: Paragraph 178, page 140) 
 Expecting the early establishment of the telecomm unications law, Japan would like China to explain 
the planned schedule for the legislative process,  enforcement and draft law outline.  Japan would 
appreciate China's specific explanation regarding the impact of this law enforcement on the content 
of China's schedule in the WTO.  
 
Answer: At present, the Legislative Affairs Office of  the State Council of China is reviewing and 
researching the relevant issues on Telecommunication Law.  There is no time schedule for public 
comment solicitation on the draft.  
(Question 53: Paragraph 182, page 141) 
 
What is the definition of value added telecommuni cation services in 2011 Catalogue for the Guidance 
of Foreign Investment Industries?  In particular, Japan would like to know how call center business 
and data center business are classified in the Catalogue.   
 Also, how is this classification applied in Chin a's schedule in the WTO?   Is there any difference 
between the contents of the schedule and the description of the index?  
 Answer: The definition of value added telecommunication services, classification of specific 
businesses and how this classification is applied in China's schedule in the WTO shall be executed 
according to the Telecommunications Regulati ons of the People's Republic of China. 
 In order to effectively implement the Reply by the General Office of the State Council on 
Encouraging the Service Outsourcing Industry to Sp eed up Its Development (No. 692010 of the State  WT/TPR/M/264/Add.1 
 Page 241 
 
 
  Office) and the Reply by the General Office of the State Council on Agreeing to Simplify the 
Approval Procedure for Business Pilot of Foreign Offshore Call Centre (No. 1272010 of the State 
Office), in 2010, the Ministry of Industry and In formation Technology removed the foreign equity 
limit imposed on offshore call centre pilot projects and made the pilot projects open to foreign 
investment.  The model regions include the 21 dem onstration cities of service outsourcing such as 
Beijing, Tianjin and Shanghai.   
(Question 54: Paragraph 182, page 141)  
 
Japan recognizes that MIIT has announced to make  an overall study and research on how to enhance 
private companies entry into the telecommunicatio ns business.  Within the study and research, is 
MIIT going to examine the issue regarding foreign investment in the telecommunications business?  
Moreover, does China have any plan to deregulate foreign investment regulation of the telecommunications business? If it is the case, pl ease explain the schedule for the deregulation.  
 
Answer: The Ministry of Industry and Information Technology has been actively studying the 
relevant issues so as to better implement the Severa l Opinions of the State Council to Encourage and 
Guide the Healthy Development of Private Investment (No. 13 [2010] of the State Council).  
China has earnestly fulfiled its commitment made when entering into WTO to open the 
telecommunications market to foreign investment, and the further opening of telecommunications 
business will be negotiated in the Doha Round.  
(Question 55: Paragraph 182, page 141) 
 
Please show exhaustively laws and regulation, licenses, qualification and terms and conditions 
required when a foreign company does design, construction or interior work for data centers.   
 
Answer: The business of Internet data centre is to provide a value-added telecommunication service. 
The Telecommunications Regulations stipulat e that an operation license of value-added 
telecommunication business shall be obtained with  the relevant communication management 
department.  Article 8 in the Management Measures of Operation Authorization of Telecommunication Business (No. 5 Ministerial Or der of Industry and Information Technology) 
specifies the application materials for an ope ration licence of value-added telecommunication 
business.  
 
(Question 56: Paragraph 204, page 145) 
 
Japan had received China's answer in the last review t hat the details of the service scope target in 
universal service was under considera tion.  The report says that the planned universal service fund 
has not yet been established.  Please inform us of the progress for the exami nation, especially for the 
scope of service and operators, and the future plan fo r the fund establishment.  Also please explain 
the schedule for the fund establishment.   
Answer: We are still in the process of research the scope and the target of the  universal service fund, 
and there is no timetable on the establishment of the universal service fund. 
 WT/TPR/M/264/Add.1 
Page 242 
 
 
  (iv) Transport      
(a) Maritime transport services      
(Question 57: Paragraph 205 , page 145)  
The Secretariat notes that "In 2010, around 90% in volume of China's international cargo was 
carried by sea." on Page 145.  What is each percen tage of the other transportation modes such as air, 
rail and road transport in total international cargo from/to China?  
 
This report indicates the volume of inland waterw ays, air, rail, and roads, but these figures include 
domestic cargo.    
Answer: In 2010, the volume of international cargo carried by air via Chinese airlines was 
1.926 million tons. 
 
In 2010, the volume of international cargo carried by road between China and its neighbouring countries was 29.63 million tons.  In 2010, the volume of export cargo carried by rail is 55.8 million tons. 
 
(Question 58: Paragraph 208, page 146) 
 
Please inform Japan of the structu res of the Chinese flag-of-convenience ship program such as:      
i) Differences between normal Chinese flagged ships and Chinese flag-of-convenience ships      
 
Answer: Normal Chinese flagged ships refer to tho se ships only under the national flags of PRC 
while Chinese flag-of-convenience ships genera lly refer to those ones possessed by Chinese 
enterprises or natural persons but regi stered overseas and under foreign flags. 
 
ii) Details of tax incentives     
 Answer: Notice on the Implementation of the Duty-F ree Rating Policy for the Special Case of 
Chinese-Funded International Shipping ([2007] No. 18) was publicized in 2007 by The Ministry of Transport, where the duty-free policy for special  cases has been adopted and the Chinese-funded 
foreign international shipping vessel has been en couraged to transform to be with a Chinese 
citizenship status under the national flag of PRC but still engaged in international voyage.  The 
conditions on the vessels applicable to this po licy have been defined and those Chinese-funded 
foreign vessels qualified shall be exempted from tariff and importation value added tax and can 
register to obtain a Chinese citizenship status.   
iii) period of the new five-year plan (ex. 2016-2020)  
 Answer: There is no plan for the period from 2016 to 2020 at present. 
 
iv) Total numbers of both normal Chinese flagge d ships and Chinese flag-of-convenience ships  
 
Answer: Don't have the number. 
 
(Question 59: Paragraph 213, page 147) 
 
Based on the interim provisions on examinati on and approval of wholly-foreign-owned shipping 
companies, some wholly-foreign-owned shippi ng companies (hereinafter referred to as the  WT/TPR/M/264/Add.1 
 Page 243 
 
 
  companies) are permitted to establish in China with  their implementation of limited scope of services 
as follows: 1. Accepting cargo booking     
2. Endorsing BL    
3. Collecting ocean freight   4. Signing contracts of transportation     
 for ships which the parent company owns or operates.     
 
Answer: Japan would like to know China's view regarding possible enlargement of scope of their 
services including husbanding activities, issue of Deli very Orders, etc. in view of smooth services to 
their customers.  China promulgated and implemented in 2000 the In terim Measures for the Examination and Approval 
of Wholly Foreign-owned Shipping Companies.  It  permitted foreign shipping companies registered 
in the countries that had signed bilateral inter governmental maritime agreement with China to 
establish wholly foreign-owned shipping companies in China.  The scope of operation of wholly 
foreign-owned shipping companies is limited to: co llecting cargo, signing and issuing bills of lading, 
settling freight, and signing service contracts for th e vessels owned or operated by their parent 
companies, namely the foreign shipping companies that invested and established such wholly foreign-
owned shipping companies.  As to the administration of wholly foreign-owned shipping companies, 
such matters were listed in the list of exemptions  to the commitments to th e trade in services.  At 
present, China does not have any plan for further opening up in this area.  Based on specific regulations of inter-governmental  bilateral maritime agreement, there is the 
possibility for wholly-foreign-owned shipping comp anies from specific countries/areas to expand the 
operating scope in China. 
 
(c) Air transport 
 (Question 60: Paragraph 243, page 154)  
 
China's GATS commitments on aircraft repair and maintenance require an economic needs test.  
However, in four FTAs (with ASEAN, Chile, New Zealand, and Singapore), the requirement for an 
economic needs test is suppressed. Japan would like to  know the concrete criteria of the test, and 
whether it has actually been  carried out in any case.   
 Answer: When examining and approving the establishment of foreign-invested aircraft repair and 
maintenance enterprises, CAAC will fully consid er the market demand for aircraft repair and 
maintenance.  Since China's accession into WTO, CAAC has not approved any application filed by 
foreign investors to establish an aircraft repair and maintenance enterprise for the reason of economic 
needs. 
 
(d) Rail transport services     
 (Question 61: Paragraph 270, page 159) 
 
The Secretariat notes that the system is to be re formed with a view to separating the regulatory 
functions from the operational functions.  The ra il price-setting mechanism will be further reformed 
as will the mechanisms for investment in and financi ng of rail construction and for the subsidization 
of public rail transport services.  Japan would like to know the time table for these reforms, and whether there are any particular leading policies of foreign countries to be modelled.  
 
Answer: The revolution of China's railway industry is promoted steadily. WT/TPR/M/264/Add.1 
Page 244 
 
 
   
(v) Tourism      
(b) Trade regime    
 
(Question 62: Paragraph 308, page 165) 
 
According to the Report by the Secretariat, the results  of the pilot program which allows Sino-foreign 
joint venture travel agencies to handle the business of outbound tourism for residents of China's 
mainland will be evaluated, and if deemed su ccessful, permission to conduct business for the 
outbound tourism of residents of China's mainland w ill be extended to other foreign travel agencies. 
With regard to this pilot program, Japan would li ke China to explain the following points:     
 (1) What do the results of the pilot program indi cate? And what is the definition of success for the 
results? 
 Answer: China is still in coordination with relevant ag encies to provide response to this question. 
 
(2) In Japan, there is no restriction on foreign tr avel agencies and many of them handle the 
business of outbound tourism for Japanese.  From th e view point of the principle of reciprocity and 
equity, restrictions on foreign-funded travel agencies in China should be relaxed immediately.  Does 
China have any intention to deal with the restrictions?   
 
Answer: China is still in coordination with relevant ag encies to provide response to this question. 
 
(viii) Distribution services  
 
(Question 63: Paragraph 326, page 168) 
 
Please indicate the turnover and employment, the s hare in total GDP and share of total employment 
as well as the 10-year transition from now of  the distribution sector (wholesale/retail).    
 Answer: For the detailed information of distribution sector, please see the following table: 
 
Year Turnover (100 million 
RMB Yuan) Percentage of GDP  
(%) Number of Employment 
(10,000) Percentage of total 
Employment (%) 
2002 27,860 27.2  733.0  6.7  
2003 37,693 32.3  628.1  5.7  
2004 44,840 32.8  586.7  5.3  
2005 56,589 31.0  544.0  4.8  
2006 64,326 30.7  515.7  4.4  
2007 75,040 30.4  506.9  4.2  
2008 91,199 30.3  514.4  4.2  
2009 105,413 31.4  520.8  4.1  
2010 139,350 35.0  535.1  4.1  
2011 163,284 34.6  n.a. n.a. 
  WT/TPR/M/264/Add.1 
 Page 245 
 
 
  (viii) Distribution services     
 (Question 64: Paragraph 328, page 169) 
 
Please indicate whether the sale or purchase of any  goods is subject to exclusive rights for domestic 
companies or to a limitation on the number of distri butors.  If so, please provide information, 
including items, legal basis and any recent modifications.   
 
Answer: Refer to the restricted regulations to forei gn investors in Catalogue for the Guidance of 
Foreign Investment Industries.2011.  The Catal ogue was published in 24 December 2011 and entered 
into force in 30 January 2012.  
(Question 65) 
 
The Regulations on publication administration we re revised in March 2010.  Under the new 
regulations, Japan would like China to confirm that wholly foreign-owned firms  will be able to import 
publications.  Furthermore, Japan would like China to  confirm foreign equity restrictions, if any.  
 
Answer: Article 42 of the Regulations on Publication Administration stipulates the conditions for 
establishing units to be engaged in  importing and exporting publications .  Any unit to be engaged in 
publication import business should meet these conditi ons and file an application in accordance with 
legal procedures.   
The Audiovisual products importation rule was r evised in April 2011.  Under the new rule, Japan 
would like China to confirm that wholly forei gn-owned firms will be abl e to import Audiovisual 
products.  Furthermore, Japan would like China to confirm foreign equity restrictions, if any.  
 
Answer: Article 9 of Audiovisual Products Importation Rule stipulates the conditions for establishing 
units to be engaged in importing audiovisual products.  Any unit to be engaged in import business of 
audiovisual products should meet th ese conditions and file an app lication in accordance with legal 
procedures.  
 
(Question 66) 
 
Regarding the importation of motion pictures fo r theatrical release, only management units 
designated by the State Administration of Radio,  Film and Television are permitted for import, and 
management units without designation are not p ermitted.  Subject to the DSB Recommendations, 
China is requested to amend the Regulations on the Administration of Movies 21 December 2009, and Japan would like to know when China intends to amend the regulation.  Furthermore, Japan would 
like to confirm whether wholly fo reign-owned firms will be allowe d to import motion pictures for 
theatrical release after the amendment.   
 Answer: Since its accession to the WTO, China has stri ctly followed its commitments in the area of 
film.  The channel for overseas films entering into China market is open and smooth.  In accordance 
with its accession commitments, China revised its  Regulations on the Administration of Films in 
2001.  Specific provisions were made on film impo rting.  The business of film importing shall be 
operated by film importing operation entities designate d by the administrative departments of radio, 
film and television of the State Council.  Without such designation, no entity or individual shall operate in the business of film importing.  
 WT/TPR/M/264/Add.1 
Page 246 
 
 
  REPORT BY CHINA (WT/TPR/G/264) 
 II. ECONOMIC AND TRADE ENVIRONMENT AND MACROECONOMIC POLICY 
DIRECTION    
(3) Accelerating the development for intell ectual property rights protection      
(iii) Intensifying efforts for intellectual property rights protection      (Question 67: Paragraph 32, page 11)  
 
Paragraph 32 of the Report by Chinamentions China's nation-wide government campaign in 
intellectual property rights protection.  Could Chin a provide us with information on its measures to 
accelerate the local authorities' administra tive actions or to enhance their capacity? 
 
Answer: In November 2011, the State Council printed and issued the Opinions on Further 
Intensifying Efforts in Cracking down on Infringeme nts of Intellectual Property and Manufacturing 
and Selling of Forged and Substandard Commodities to explicitly propose to establish and improve an 
incentive and restraint mechanism of cracking dow n on infringements of intellectual property and 
manufacturing and selling of forged and substa ndard commodities and establish and improve a 
supervision and assessment system.  China incorporates campaign of cracking down on infringements 
of intellectual property and manufacturing and selling of forged and substandard commodities into the 
government performance assessment  system and then into the scope of assessme nt on social 
administration and comprehensive governance, and gradually carries out supervision and inspection 
step by step.  Regions with prominent issues of infringements of intellectual property and manufacturing and selling of forged and substa ndard commodities are urged to strengthen law 
enforcement and make rectifications within the gi ven period of time.  Moreover, more efforts should 
be made to intensify administrative supervision and accountability and strictly hold the responsible 
persons of local governments and relevant regulat ors accountable for any regional and systematic 
infringement of intellectual property or manufac turing and selling of forged and substandard 
commodities caused by negligence in  the performance of duties.  
 
III. Trade and Investment Development and Related Policies    
(3) Opening the Utilization of Foreign Investment Through Further Opening Up      (ii) Opening up more fields to foreign investment      (Question 68: Paragraph 95, page 23) 
 
Japan understands that the opening up of compulsory third party auto liability insurance to foreign 
funded non-life insurance companies has been m ade possible by the revision of the law on 
1 May 2012.  Japan would like to know the concrete  schedule or procedure of the CIRC approval 
under this law.    
 
Answer: Based on China's WTO commitments, CIRC h as actively advanced the opening up of 
compulsory liability insurance for motor vehicle traffic accidents. With regard to specific 
implementation, CIRC will review the applicati ons filed by Chinese-funded and foreign-funded 
insurance companies in a fair and equal manner in accordance with the releva nt conditions specified 
in the Regulations on Compulsory Traffic Acci dents Liability Insurance for Motor Vehicles. 
 
  WT/TPR/M/264/Add.1 
 Page 247 
 
 
  REPUBLIC OF KOREA 
 
PART I:  Questions Regarding the Secretariat Report 
 
II. Trade Policy Regime: Fr amework and Objectives 
 
Page 11 (Para 4-5)   
 
We welcome China's continued efforts to improve transparency.  The Secretariat report, however, 
notes that many aspects of China's trade and inv estment policy regime remain complex and opaque, 
leaving scope for administrative discretion and corruption.  
Question 1 
 
Does China agree with the Secret ariat's assessment regarding trans parency? What specific plans 
does China have to reduce the scope for administrative discretion and corruption? 
 
Answer:  Having entered into WTO, China has comp lied with WTO rules and abided by its 
commitments.  China has made great efforts to im prove transparency, to which it will continue to 
dedicate itself. 
 Corruption is a universal problem against which c ountries all over the world have been committed to 
fighting, so has the Chinese government which ha s consistently adopted a highhanded policy in 
dealing with corruption and struck it with heavy blows.   We will further rectify, cancel and adjust the 
administrative examination and approval items, perfect and strictly enforce the setting and 
implementation system of such items, and enhance th e supervision on approval right.  We will also 
advance the market-oriented reform of public r esources, improve transparency and promote fair 
competition.  What's more, we will continue to deep en the reform of fiscal management system for 
better public supervision.  Furthermore, we will make it a long-term fundamental work to combat 
corruption and build a clean government in a down-to -earth manner, intensify the fight against some 
outstanding problems to make sure that the leadi ng cadres are clean, honest and self-disciplined and 
strictly examine and deal with corruption cases, taking strong measures against corruption cases and 
corrupt elements.   Page 14 (Para 15) 
 The Complaint Coordination Office for Foreign-in vested Enterprises and the National Complaint 
Centre for Foreign-invested Enterprises under MOFCOM supervise and handle complaints from 
foreign-invested enterprises that consider their ri ghts have been impaired by the authorities.    
 
Question 2  
 
Could China please provide data on actual compla ints which were not made available to the 
Secretariat?  
 
Answer: National Complaint Centre for Foreign-inv ested Enterprises under MOFCOM has, for the 
past two years, received in total 11 compla ints, in a written form or via telephone, from 
foreign-invested enterprises or individuals, all of which have been appropriately dealt with according 
to the relevant provisions in the Interim Measur es for Handling Complaints  from Foreign-invested 
Enterprises.  WT/TPR/M/264/Add.1 
Page 248 
 
 
  Page 14 (Para 16)   
 
According to the Secretariat report, a pilot progr am to establish "administrative reconsideration 
commissions" was launched in 2008 in  several regions including Beijing. 
 
Question 3   
 
Could China please explain the effect of the pilot program to est ablish "administrative 
reconsideration commissions" since 2008?  Are there any plans to extend this program to other 
regions?  
 
Answer: More than 3 years has passed since the p ilot program to establish "administrative 
reconsideration commissions" was launched, and signi ficant effects have been achieved since then.  
Firstly, social forces such as experts and scholars ha ve been introduced into case trials, which have 
improved the transparency and fairness in handli ng the cases of administrative reconsideration.  
Secondly, more efforts have been put into error correction during administrative reconsideration and 
the proportion of corrected cases via repeal, modification and illegitimacy confirmation increased significantly in some of the regions where the progr am has been launched.  Thirdly, administrative 
reconsideration has played a greater role in se ttling disputes and there has been a general number 
increase of the administrative reconsidered cases acce pted in the regions where the program has been 
launched, with more administrative disputes being se ttled via administrative reconsideration.  For the 
moment, the pilot program to establish "adminis trative reconsideration commissions" has been 
launched or is going to be  launched by 19 provincial governments at the provincial level or in some of 
the cities and counties within its jurisdiction area.  
Pages 14-15 (Paras 19-20)   
 
The Secretariat report states that coordination be tween the agency at the central level and its 
counterparts at the local level remains weak, raising issues of policy coherence.  The report also states 
that provincial protectionism may result in barrier s to internal trade and investment.  Provincial 
protectionism may affect foreign-invested enterpri ses and international trade as well as internal trade 
and investment.  Foreign enterprises have had so me difficulties due to regulatory opaqueness and 
inconsistency.  
Question 4  
 
What efforts could be made by the Chinese Gove rnment to ease these difficulties for foreign investors 
in China or foreign export companies? 
 
Answer: In order to ensure a unification of legal syst em, China has established a filing and reviewing 
system of laws and regulations, which has been clearly defined in the Legislation Law made in 2000, 
Record Ordinance of Laws and Regulations made in 2001 and the Decision of the State Council on 
Strengthening the Law-based Administration by Municipal and County Governments publicized in 
2008.  Agencies at all levels responsible for record ing shall seriously perform their duties and review 
and rectify the violation of the provisions of upper laws by laws and re gulations and regulatory 
documents and the incoherence and incoordination be tween different laws.  In order to discard local 
protectionism and to establish and perfect a nationa l-unified, standardized and orderly market system 
of fair competition, the State Council made in 2001 the Provisions of the State Council on the 
Prohibition of Regional Blockade in Market Ec onomic Activities and seven departments with the 
Ministry of Commerce included join tly issued in 2004 the Circular on Clearing up the Regulations of 
Regional Blockage in the Activities of Market Ec onomy, via the latter of which local governments 
have been organized to clear up the provisions hindering the free flow of goods and factors and 
making legal the regional blockade.  In the future, the Chinese government will  intensify publicity to  WT/TPR/M/264/Add.1 
 Page 249 
 
 
  let laws and regulations be wi dely known to the public and strengthen the training to local 
government departments for professional skill improve ment so as to enhance the transparency of 
policies and consistency in policy implementation.  In addition, th e Chinese government will reinforce 
the communication with foreign-funded enterprises  and address in a timely manner their reasonable 
concerns, in a way to provide  more thoughtful and convenient services to investors and 
foreign-funded enterprises.    Page 16 (Para 25)   
 China became a WTO Member on 11 December 2001.  It is not a party to the Pharmaceutical 
Agreement.  Question 5   
 Is China considering acceding to th e Pharmaceutical Agreement?  If so , what is the timeframe that 
China is considering?  Are there any difficulties that are hindering China from joining the 
agreement?  
Answer: China is not yet in the position to consider this issue. 
 
Page 16 (Para 27)  
 China has submitted a number of notifications durin g the period under review, including notifications 
on agriculture, services, technical regulations, re gional trade agreements, and intellectual property 
legislation (Table AII.2).  A total of 482 notific ations were registered during January 2010 to 
February 2012, including a new notification on su bsidies adopted for 2005-2008.  Nonetheless, in 
some areas (e.g. state trading), notifications are considerably out-dated or overdue.      
Question 6   
 
Could China please explain why in some areas no tifications are considerabl y out-dated or overdue? 
 
Answer: The state trading regime of China, including the products covered and the STR enterprises 
did not have significant changes except that a coup le of products were no longer subject to state 
trading administration.  Besides, for a few products s ubject to state trading, some statistics required in 
the notification are not produced officially in China.  In view of these, China did not submit its state 
trading notification.  That said, if members expect China to submit the notification despite of the few 
changes, China will try to submit the notification as soon as possible.  Page 17 (Para 30)   
 
The authorities consider that regional trade agreem ents serve as a complement to the multilateral 
trading system while China pursues its opening-up polic y;  in regard to FTAs/RTAs, China maintains 
that it follows the principle of inclusiveness and openness.  Accord ing to the Secretariat report, 
China's commitments to eliminate tariffs in its RTAs  are based on reciprocity rather than a general 
policy of openness in its RTAs.  Despite China's perspective on the RTAs, there is concern that 
various RTAs at their different levels of openn ess could undermine the multilateral trading system 
aimed at broader economic integration.  
Question 7  
 
Could China please provide its opinion on the a bove assessment in light of its RTA experience? 
 WT/TPR/M/264/Add.1 
Page 250 
 
 
  Answer: China believes that to promote rule-based trad e liberalization, the role of the multilateral 
trading system is dominant, irreplaceable.  Regional trade arrangements, in the form of WTO Plus, help to enhance the intra-regional trade liber alization and economic cooperation between the 
members.  While committing to the multilateral trade system and its rules as the cornerstone of its 
foreign economic and trade relations, China believes as  always that regional trade agreements serve as 
a complement to the multilateral trading system in pursuing its opening-up policy.  Page 18 (Para 39)   
 Since 1 January 2011, foreign investors have been ''permitted" to invest in health care services in 
China on a pilot-project basis; previously, th ey were listed in the ''restricted" category. 
 
Question 8  
 
Could China please elaborate on the details of th is policy change, including a comparison between 
this policy and China's GATS commitments?  Are th ere any plans to expand the pilot projects?  Would 
China consider further FDI liberaliza tion in health care services?  
 
Answer:  In the year of 2011, Ministry of Health of  the People's Republic of China issued the 
Notification about the Adjustment of Approval Authority on Chinese-foreign Joint Venture and 
Cooperative Medical Institutions, to delegate the approval authority for the establishment of Chinese-
foreign joint venture and cooperative medical instituti ons to provincial public health administrations, 
which greatly simplifies the approval procedure intensively.  According to CEPA and ECFA , since 1 January 2011, service provides from the Hong Kong and 
Macao Special Administrative Regions have been pe rmitted to establish subsidiary hospitals in the 
provinces and municipalities of Shanghai, Fujian,  Guangdong, Hainan and Chongqing.  Service 
providers from Chinese-Taipei also have been permit ted to establish subsidiary hospitals according to 
rules in the provinces and municipalities of Shangh ai, Jiangsu, Fujian, Gu angdong and Hainan on a 
pilot-project basis.  Since 1 April 2012, pilot pr oject of the Hong Kong and Macao SARs to establish 
subsidiary hospitals in mainland China will be extended to all provincial capitals and municipalities. 
 In China's accession commitment, foreign service s uppliers are permitted to establish joint venture 
hospitals or clinics with Chinese partners, and forei gn majority ownership is permitted.  In contrast, 
the above-mentioned pilot-project allows wholly -foreign-owned enterprises under specific conditions. 
 
China will consider the possibility of further liber alization in medical service market based on the 
assessment on the operation of the pilot project.  Page 21 (Para 48) 
 
FIEs in the encouraged category may import cap ital equipment duty free. All foreign-invested 
enterprises may enlarge their scope of business, subj ect to approval.  Foreign investment in the 
restricted category may be permitted, subject to approval, if export sales are over 70% of total sales of the product.  Question 9   
 Could China please explain why all the foreign-invested enterprises in  the restricted category have to 
export over 70% of total sales?  What is the basis for the 70% criteria? 
  WT/TPR/M/264/Add.1 
 Page 251 
 
 
  Answer: This provision doesn't mean the foreign-invested  enterprises in the restricted category have 
to export over 70% of total sales.  The foreign-invest ed enterprise shall have the freedom to decide 
whether to sell its products on the Ch inese market or get them exported. 
 
Page 21 (Para 51)   
 Applications for permitted and en couraged industries valued at over US$500 million (US$100 million 
for restricted industries), after examination by th e NDRC, are submitted for verification to the State 
Council. 
 
Question 10 
 
Could China explain why applications are submitte d for verification to the State Council after 
examination by the NDRC?  Does it mean applicati ons are reviewed twice before approval?  Are 
there any cases where applications were rejected duri ng the verification process at the State Council? 
 
Answer:  In order to improve the efficiency of the examination and approval of foreign investment 
projects, the central government and local government  have different authority for the approval of 
foreign investment projects based on the total amount of investment.  Applications for permitted and 
encouraged industries valued at over US$500 million (US$100 million for restricted industries), after 
examination by the NDRC, are submitted for verifi cation to the State Council, which does not mean 
the projects will be reviewed twice before approval.   Page 22 (Para 53)   
 
Foreign investment in China can be made in renm inbi (RMB).  Except for investments valued at 
300 million or more or in industries that requi re approval from MOFCOM, the authorities at the 
provincial level may complete the approval procedur e similar to that for investment in foreign 
currencies.  Foreign investments with RMB are not allowed "directly or indirectly" in equities and 
financial derivatives, except those used for strategic investment in listed companies. 
 
Question 11   
 
Are there any plans to gradually extend Renminbi  Qualified Foreign Institutional Investors (RQFII) 
status to foreign financial institutions, which is currently allowed exclusively for Hong Kong-based 
institutions? 
 
Answer: In 2011, the CSRC issued Measures for Pilot Domestic Securities Investment Made by 
RMB Qualified Foreign Institutional Investors of  Fund Management Companies and Securities, 
which set up a pilot programme for the use of RMB funds raised in Hong Kong, China by the 
subsidiaries of domestic fund management companie s and securities companies in Hong Kong, China 
to invest in the domestic securiti es market.  Currently, the CSRC is still in the process of evaluation 
for this pilot programme, the next steps of opening up will be based on the evaluation result.    Page 22 (Para 55)   
 
FDI in the form of mergers and acquisitions (M&As) of enterprises is subject to anti-trust reviews.  
Also, FDI involving M&A with Chinese domestic ente rprises is subject to national security reviews, 
if the FDI is related to defence,  or is deemed to have influe nce on national security, such as 
controlling firms engaged in key commodities (e.g. agriculture, energy, and natural resources), key 
infrastructures, key transports, and key equipm ent manufacturing with essential technologies.  
However, there is concern that anti-trust reviews can be used as means to protect domestic industries.  
Some argue that the rejection of the applicati on by Coca-Cola to merge with Hui Yuan can be WT/TPR/M/264/Add.1 
Page 252 
 
 
  interpreted as refusal of foreign capitals wh ich intend to merge with representative Chinese 
enterprises.  Question 12   
 Could China please provide its opinion on the above-mentioned concern?  
Answer:  National security reviews of foreign capitals which intend to merge wi th Chinese enterprises 
are implemented in many countries worldwide, which is also a normal practice of review and will not 
affect the opening-up policy that has long been upheld by China.  The review of undertaking concentration and the national security review are two different but parallel review mechanisms, the 
former of which belongs to the category of co mpetition policy while the latter of which is 
implemented for security reasons.  The Ministry of Commerce shall mainly take into consideration the 
competitive factors in its review of undertaking con centration with the FDI related to national security 
being dealt with by the department of nationa l security review in accordance with the law. 
 The Ministry of Commerce rejection of the app lication by Coca-Cola to merge with Huiyuan 
according to the Law on Anti-Monopoly was based on a consideration of market competition in the purpose of maintaining an effective competition in  the fruit-based beverage market of China, 
promoting and safeguarding the deve lopment and growth of juice enterprises in fair competition, and 
advancing the formation of a mechanism for developi ng the superior and weeding out the inferior in 
the juice market and the transformation of economic  growth mode.  The decision for this individual 
case will not influence or change the foreign investment policy of China.   Page 23 (Para 57)   
 The State Council supports FIEs to be listed, and/ or to issue corporate bonds on Chinese market.  It 
also continues to "guide" financial institu tions to enhance credit supports to FIEs. 
 
Question 13  
 
Could China please provide the details of the meas ures in terms of supporting FIEs for financing? 
 
Answer: At present, China's banking sector implements the same treatment to foreign companies and 
domestic companies in terms of financing and ju dges financing conditions according to project 
prospects and risks. There does not exist differentia ted limits in regulators. In general, as for the 
appropriate enterprises with good credit quality, stable management and reasonable capital uses, 
whether foreign or domestic, financial instituti ons will provide financial services to them in 
accordance with commercial principles.  
III. Trade Policies and Practices by Measure 
 
Page 37 (Para 54) 
 A suspended/terminated investigation may be resume d if the exporter violates the price undertaking, 
or if China's MOFCOM considers it necessary for other reasons. 
 
Question 14  
 
Could China please explain what other reasons may lead to the resumption of a suspended/terminated 
anti-dumping investigation?    
  WT/TPR/M/264/Add.1 
 Page 253 
 
 
  Answer:  According to the Interim Rules on Anti-dumping Price Undertakings, if the Ministry of 
Commerce considers it to be against the public inter est of China to continue the implementation of 
price undertakings, it shall repeal the decision to accept the price undertakings and resume the anti-
dumping investigation in accordance with the law. 
 Page 38 (Para 60) 
 China's anti-dumping law requires consideration of pub lic interest in investigations but appears to 
lack clear-cut guidance on this issue.   
 
Question 15  
 
Could China please provide its plan to make the guidance clearer?   
 Answer: In its anti-dumping investigation, the i nvestigating authorities will provide ample 
opportunity for various interested parties with invo lved producers and exporters, the government of 
the involved country, upstream and downstream en terprises and relevant industry associations 
included to air their opinions via public hearings an d statements of opinions and will also take into 
serious consideration their comments so as to ensu re an objective, just a nd fair investigation. 
 
Page 39 (Para 62)  
 Article 56 of the AD regulations pr ovoked questions and concerns from Members in the October 2002 
meeting of the WTO Committee on Anti-Dumping Practices.   Question 16  
 Does China have a plan to remove Article 56 fr om the AD Regulation which authorizes certain 
corresponding measures in retaliation?  
 Answer: For the moment, China hasn't a plan to revise AD Regulations. 
 Page 42 (Para 70)  
 The CV Regulation does not specifically provide for pr oceedings to refund final duties, and there are 
no published rules regarding sampling.  There are no  further details in the CV Regulation regarding 
"new shipper" reviews.    
Question 17 
 
How is China going to address certain issues such  as refunds of final duties, sampling, or new 
shipper reviews not yet regulated in the existing CV rules?   
Answer: China has adopted a very cautious attitude toward investigations into trade remedy, 
especially those into countervailing and there have b een so far 4 cases of countervailing investigation.  
As for certain issues not yet regulat ed in the existing countervailing rules, China will deal with them 
based on the actual conditions of individual cases a nd referring to as references the rules for anti-
dumping investigations and will ensure the investig ation complying with countervailing laws of China 
and the Agreement on Subsidies and Countervailing Measures of WTO.  In its real practice, China will also borrow ideas from WTO Members that have abounded experiences in countervailing 
investigation.  China will revise a nd perfect its relevant laws, regula tions and department rules in due 
course and enact new procedural regulations re garding countervailing inv estigation based on the 
demand of increasing development and in light of the practical need of countervailing investigation.  WT/TPR/M/264/Add.1 
Page 254 
 
 
   
Page 48 (Paras 93-96)  
 
Under the Regulations on Certification and the Measures for the Administration of Compulsory 
Product Certification, the China National Certif ication and Association Commission (CNCA) under 
AQSIQ is responsible for the administration, orga nization, and implementation of compulsory product 
certification in China.  Products listed in the Com pulsory Product Certification Catalogue may not be 
sold or imported into China unless they have China Compulsory Certificates (CCCs) and carry CCC 
marks.  Applications for CCC certification must be made to a designated accredited certification body 
(ACB).   
Question 18  
 
Regarding CCC certification, is China willing to p ermit the participation of conformity assessment 
bodies located in the territories of other countries as stipulated in Article 6.4 of the WTO TBT 
Agreement?     
 
Answer: According to Article 6.4 of the WTO/TBT Agre ement, members are encouraged to permit 
participation of conformity assessment bodies located in the territories of other Members.  China has 
signed entrustment agreements with 19 overseas cert ifying bodies (located in Europe, America, Japan 
and other economies) for follow-up inspections of 3C certification over factories abroad.  CNCA 
accept the inspection reports and results of these bodies.  Page 53 (Para 111) 
 
Related institutional adaptations, including traini ng of central and local government personnel to 
implement the GPA, are also in progress. The lack of experts seems to be one of the challenges in 
China's government procurement.   
Question 19 
 
Could China please explain in detail the traini ng of central and local government personnel to 
implement the GPA?  
 
Answer:  Since the end of 2007 when China initiated th e negotiation to enter into GPA, the Chinese 
government has every year organized the training  of central and local government personnel to 
implement the GPA, and also for many times jointly  offered training courses and held seminars with 
GPA participants such as the USA and EU and the WTO Secretariat.  Page 53 (Para 113)  
 
According to data provided by the authorities, the to tal value of government procurement increased to 
842.2 billion in 2010, up from 599.1 billion in 2008 (T able III.6);  it accounted for 2.1% of GDP (2% 
in 2008).  However, on average, sources indicate that government procur ement in developed and 
developing countries accounts for 10-15% of GDP.  The authorities maintain that this small 
percentage is mainly because the data cover only procurement by government departments, 
institutions, and public organizations using fiscal f unds, for goods, constructi on, and services listed in 
the Centralized Procurement Catalogue.  
Question 20  
 
Could China please define or specify what th e authorities mean?  Could China also provide 
information on the institutional fram ework of governmental procurement?  WT/TPR/M/264/Add.1 
 Page 255 
 
 
   
Answer:  The authorities refer to the Ministry of Finance. According to the government procurement 
law, the financial departments of people's governme nts at various levels are responsible for the 
supervision and regulation of government procurement and shal l perform their bounden duties in 
accordance with the law.   Page 54 (Paras 115-116)  
 
Decentralized purchasing may be carried out by th e procuring agency itself, or through some 
centralized procurement agencies.  The Governme nt does not consider procurement by SOEs as 
government procurement.   
Question 21  
 
Could China please explain the role of the centr al government and its influence on local government 
procurement and SOE procurement?  Please explain  to which extent the central government is 
involved in SOE procurement.  Could China prov ide the statistical data on SOE procurement?  Is 
there any plan to include additional SOEs  as procuring entities to the GPA?  
 Answer: SOEs in China are independently operated market players who assume sole responsibilities 
for their profits or losses.  Procurement by SOEs is their own business practice which the government 
does not interfere.  Therefore, procurement by  SOEs shall not be considered as government 
procurement and China hasn't any statistical data on SOE procurement.  For the time being, China's 
revised offer only covers the entities define d by the government procurement law.  
 
Page 54 (Para 118)  
 
Under the Government Procurement Law, the Gove rnment is, in principle, required to procure 
domestic goods, projects, and services. However,  in some cases exceptions are allowed.  
 Question 22  
 Could China provide cases of procurement from foreign sources?   
Answer:  According to the regulations in the government  procurement regime of China, if a purchaser 
cannot acquire within Chinese territory or cannot  acquire with reasonable commercial terms the 
products he needs to procure or if there is an actua l need as otherwise provided in laws or regulations, 
the purchaser can make procurement from imported products.  As for the departments of central government, part of their high-end instrument and equipment for scientific research, instrument and equipment for an exclusive use of quality insp ection and professional camera equipment has been 
procured from imported produc ts based on actual demands. 
 
Page 55 (Para 123)  
 Procuring entities must announce government proc urement and bidding information in media 
designated by the Ministry of Finance in "a timely and standard manner" to ensure transparency and 
fair competition. Suppliers, if unfairly exclud ed from procurement processes or treated in a 
discriminatory way, may complain to the procuri ng agency, appeal to the Government Procurement 
Division of the Ministry of Finance, or subsequently file a complaint with a court. The authorities state that the Government collects no data regarding the number of complaints.   WT/TPR/M/264/Add.1 
Page 256 
 
 
  Question 23  
 
1) Could China please specify what kinds of me dia are used for these types of announcements 
and how?  
Answer: The central government procurement informati on is published on the media designated by 
the Ministry of Finance, including www.ccgp.gov.cn, China Government Procurement News, China Government Procurement Magazine, and China State Finance.  The local-level government 
procurement information is published on the media designated by provincial governments. 
 Bidding information shall be released by the purc haser or authorized procurement agency in the 
media designated to announce government procuremen t information.  The purchaser or procurement 
agency shall publish the government procurement information in a standard and timely manner 
according to the laws and administrative regul ations regarding government procurement.  
 
2) Could China provide the statistical data regarding announcements of procurement 
information?  
Answer:  More than 770,000 announcements of governme nt procurement information were released 
in 2010.  
 
3) Does the Chinese Government  have any requirements for announcing government 
procurement and bidding information in  official journals or media? 
 4) Could China outline if there are regulations that mandate the revealing of the contents of a 
bid in the Official Journal?  
 
Answer to question 3) and 4): The Ministry of Finance has made  the Administrative Measures for 
Announcement of Government Procurement Info rmation and the Administrative Measures for 
Bidding for Goods and Services via Government Pr ocurement, both of which have made specific 
provisions on the scope and content of the announcem ent of government procurement information.  
(Please look for more detailed information on www.ccgp.gov.cn.)   
Question 24 
 
1) Does China have an organization which handles th e complaints from processing government 
procurement in the provinces?  
 
Answer: According to the Measures for Processing Supplie r Complaint of Government Procurement, 
the financial department of the local people's gove rnment at the county level and above shall be 
responsible for processing the supplier compla int of local government procurement.   
 
2) How long does it usually take for a complaint to be  processed at the procuring agency, at the 
appellate body of the Government Procurement divisi on of the Ministry of Finance, and at the court 
of law?  
 
Answer:  The supplier can query the purchaser in a writte n form within seven working days after he 
knows or should know that his rights and interest s are infringed. The purchaser shall make a reply in 
written form within seven working days once he r eceives the written query from the supplier.    
 The supervision and regulation depa rtment for government procurement shall make a decision within 
thirty working days after receiving the complain t and shall inform the complainant and parties 
concerned in a written form.  WT/TPR/M/264/Add.1 
 Page 257 
 
 
   
If the complainant refuses to accept the decision made by the supervision and regulation department 
for government procurement or the supervisio n and regulation department for government 
procurement doesnt process the complaint within th e time limit, the complaint may apply for an 
administrative reconsideration according to law or lo dge an administrative appeal to court. The court 
will hear the case in line with th e legally prescribed procedures. 
 
3) Can a company file a complaint after th e contract has been awarded?    
 Answer:  Yes. 
 Page 56 (Para 129)  
 Carrying this process forward, toward the end of 2011, China submitted to the GPA Parties its 
"second revised coverage offer". While the offer has not  yet met all of the expectations of the existing 
Parties, it must nonetheless be said that it responde d importantly to requests made to China by the 
Parties by offering, for the first time, significant pr oposed coverage of procuring entities at the sub-
central (provincial/municipal) government level, in  addition to the central government level. Across 
the membership of the GPA, Parties are now pr essing for further movement by China to include 
greater coverage of entities at the central and sub- central government level, coverage, for the first 
time, of state-owned enterprises (SOEs) and other improvements.   
Question 25  
 
Could China please explain what would be the Ch inese Governments next step  for accession to the 
GPA?  What are the issues being discussed regardi ng further movement by Ch ina to include greater 
coverage of entities?    
 
Answer:  The Chinese government will submit a newly revi sed comprehensive offer before the last 
meeting of the Committee on Gove rnment Procurement of WTO to convene in 2012.  For the 
moment, the Chinese government is making an eval uation of the feasibility to improve the offer 
factors, making an effort to create conditions for extending the offer coverage.   Page 60 (Para 147)   
 
Rare earth has been subject to export quota and li cense since 1999.  The authorities believe that these 
export restrictions could help conserve natural res ources or protect the environment.  The Secretariat 
questioned the economic effectiveness of these measures in its report for the last trade policy review 
of China.  
Question 26  
 
Could China please confirm the economic  effectiveness of  these measures? 
 
Answer:  China's export administration on rare earth is for the purpose of protecting environment and 
conserving exhaustible natural resources rather  than pursuit for economic effectiveness. 
  
Page 75 (Para 226)   
 It is understood that China is in the ongoing reform  process regarding SOEs.  There is an argument 
that China needs to limit the range of industries an d sectors which are too broadly defined in terms of 
maintenance of SOE dominance.  There is a sugg estion that China define a more clear state-WT/TPR/M/264/Add.1 
Page 258 
 
 
  ownership policy regarding the disposal of SOEs ' non-tradeable shares, and private participation 
through SOE equity diversification.  Question 27 
 Could China please provide its opinion on the above assessment and suggestion? 
 
Answer:  One of the important contents of the SOEs re form in China is to continue to optimize the 
layout and structure of the state-owned economy.   For the moment, the proportion taken by the 
state-owned capital in the general competitive fields  is gradually decreasing, and more state-owned 
capital is invested into the industry related to na tional security, the field of major infrastructure and 
the industry to offer important public goods and services.  Since 2006 when the reform of equity division of  listed companies was carried out, the non-trading 
shares held by all the institutional shareholders with  government shareholders included have been able 
to be traded, with the market-based circulation not being hindered.  According to the statistics, by the 
end of 2011, the average shareholding ratio of the government shareholders from the listed companies 
held by the central enterprises and their sub-en terprises has decreased to 48%.  During 2007-2011, 
there have been 4,147 cases of open transfer of state-owned property right via property rights 
transaction market by central enterprises, 69% of which have been taken ove r by private capital and 
foreign capital.  The Guidance on Actively Introduci ng Private Investment into the Restructuring of 
State-Owned Enterprises publicized in 2012 emphasi zes that the government shareholders when 
transferring their shareholding of the listed companies via an open call or a block trade or transferring their state-owned property right via a public bid on the property rights market, shall not set additional 
terms with respect to the capital conditions of the potential private investment subject, which fully 
reflects that all kinds of investment subjects will be equally treated.      
 
Pages 93-94 (Paras 307 and 316)   
 Parallel imports are not addressed in the legislation on trademarks, and it is not clear to the Secretariat 
whether they are prohibited/allowed.  The authoriti es state that no case of parallel imports has been 
brought to their attention.  Parallel imports are not covered in the current copyright legislation, and the 
authorities maintain that they are not prohibited.  
Question 28  
 
Are parallel imports allowed under the legislati ons on trademarks and copy rights?  Could China 
please provide its opinion on the view that it shoul d be clarified in the relevant regulations whether 
they are allowed or not?  
Answer: In respect of trademark, the current Trademark Law does not have provisions concerning 
parallel import.  In respect of copyright and relate d rights, parallel import is prohibited in the current 
Copyright Law.  Page 97 (Para 328)    
 
In addition to ad hoc campaigns, clear rules a nd fully implemented procedures will play more 
important roles in protecting IPRs.  A key task under the Promotion Plan for National Intellectual Property Strategy 2011, is the establishment of a long -term mechanism on IP protection, in particular 
a regular mechanism to enforce IP protection against internet violation.    WT/TPR/M/264/Add.1 
 Page 259 
 
 
  Question 29   
 
Could China please explain more specifically a long-t erm mechanism on IP protection, in particular 
a regular mechanism to enforce IP pr otection against internet violation? 
 
Answer:  In November 2011, the State Council issued  the Opinions on Further Cracking Down on 
Infringements of Intellectual Property Rights  and the Production and Sale of Counterfeit 
Commodities.  A leading group was established to  crack down infringements of intellectual property 
rights and manufacturing and selling of counterfeit co mmodities.  The group, headed by Vice Premier 
Wang Qishan, involves 29 government agencies and has an office in the Mi nistry of Commerce. 
Crackdown on infringements of intellectual prope rty rights and manufacturing and selling of 
counterfeit commodities came into a regular stage.  The leading group studies and arranges crackdown of  infringement of IPRs on a quarterly basis. 
Online infringements and violations, as the key part  of crackdown, is listed in the 2012 Elements of 
National Work for the Crackdown on IPR Infringeme nt and Manufacturing a nd Selling of Counterfeit 
Commodities, the key work in quarter one and tw o, and the 2012 China IPR protection scheme.  
 In addition, the Leading Group Office for the Sp ecial Campaign of Combating Online Infringement 
and Piracy has also been establis hed to carry out special actions. 
 Page 97 (Para 329)   
 It is reported that the leadership structure of this  specific campaign will be made permanent, as regular 
IPR enforcement in China.  A vice-Premier will ta ke on the role of overseeing IPR enforcement.  
Officials at the provincial level are also expected  to be more proactive in enforcement as such 
enforcement effort will be taken into account in their performance evaluations. 
 
Question 30   
 
Is there any other specific regulation that forces provincial officers to be more proactive in the 
enforcement of IPRs?  Is there any kind of coop eration mechanism between provinces to enforce 
IPRs?  
Answer:  In November 2011, the State Council issued  the Opinions on Further Cracking Down on 
Infringements of Intellectual Property Rights  and the Production and Sale of Counterfeit 
Commodities, explicitly specifying that a restra int and incentive mechanism for crackdown on IPR 
infringement and counterfeit products and a superv ision and evaluation system should be established 
and improved.  Crackdown on IPR infringement and counterfeit products is included in the 
governments' performance evaluation sy stem, which is supervised and in spected level by level.  Areas 
where have outstanding infringement  and counterfeit products cases shoul d be urged to strengthen law 
enforcement and be ordered to rectify within a spec ified time limit.  Heads of local government and 
responsible administrative authorities will be held accountable and punished for regional and 
systematic IPR infringement situations in the area.  China encourages all local areas to proactively e xplore law enforcement collaboration mechanisms.  
By now, seven regional trademark administrative enforcement collaboration networks have been 
established across the country.  All provinces, au tonomous regions and municipalities directly under 
the Central Government have been included in rele vant trademark protection collaboration networks.  
Meanwhile, the competent patent and copyright authorities of all provinces have proactively 
participated in various campaigns and strengthe ned their cooperation based on their respective 
functions under the coordination of the State Council.  WT/TPR/M/264/Add.1 
Page 260 
 
 
  IV. Trade Policies by Sector 
(1) Agriculture   
 Pages 104 (Paras 21-22)    
 
The VAT rebate rate on exports of most agricultural products is currently 5%.  Exports of rice, maize, 
cotton, and tobacco are through state-trading enterp rises.  Although China has notified the WTO that 
it does not provide export subsidies for agricultura l products, it is engaged in programs such as VAT 
rebates that encourage exports. 
 
Question 31 
 
Isn't there any possibility that this may hinder trade or come under the category of actionable 
subsidies?  Could China please confirm that the Chinese Government has been paying state-trading 
enterprises various subsidies? If so, are they consistent with relevant WTO rules? 
 
Answer: The tax rebate on exports of agricultural pr oducts does not exceed the tax collected, which 
doesn't constitute subsidy and will not hinder trade.  The operations of state-trading enterprises are all 
normal commercial operations based on the market  conditions.  Chinese government does not provide 
subsidies specifically to state-trading enterprises.  
 Pages 104-106 (Paras 23-34)    
 China is enforcing various subsidy policies such as direct payment, input subsidies and minimum 
purchase prices scheme in order to encourage food production and improve producer incomes. 
 
Question 32   
 
Are there any cases in which the subsidies are mutually overlapping?  In addition, is there any 
problem with subsidies for farms that may vary due to differences in policies and systems between the 
central and local governments?  In particular , are there any cases to which the Aggregate 
Measurement of Support (AMS) in the WTO Agreement on Agriculture might be applicable?     
 
Answer: Regarding the relevant support data of all kinds related to enha nce farmers production 
capacity and raise farmers' income, such as dire ct payments, production subsidies and the minimum 
purchase price, we have, in accordan ce with the classification rules of the green box and amber box of 
the WTO Agreement on Agriculture, notified to the WTO.  The data notified is the full aperture 
nationwide, including the support fund from both the central government and local governments.  Pages 106 (Para 31) 
 
In addition to border measures that, to some extent , protect the internal market from competition from 
imports, China has a number of programmes that support domestic prices.  Minimum purchase prices for rice and wheat are set each year by the National Development and Reform Commission.  The Chinese government is involved in grain purchasing to maintain the prices and is raising minimum 
purchase prices year after year.  There is criticism that China's agricultural support measures distort 
trade. 
 
Question 33 
 
What is the Chinese government's  response to such criticism?  
  WT/TPR/M/264/Add.1 
 Page 261 
 
 
  Answer: Since the accession to the WTO, China has ea rnestly fulfilled our commitments.  Related 
border measures are consistent with China's comm itment.  Grain price support measures are also 
within the scope of our commitment, and in terms of practical condition, there have been no trade-
distorting cases.  Since 2004, China's prices of agricu ltural products have been fully liberalized by the 
market.  In order to prevent excessive price decrease  and to protect the interests of farmers, China 
implements the policy of the minimum grain purchase to rice and wheat, in the main producing areas.  
Under normal circumstances, farmers independently  sell their food, following the market, and the 
state does not intervene with the market.  When actual selling prices for rice, wheat and sugar cane in 
main producing areas fell considerately and even lo wer than the minimum purchase price, farmers 
could sell food, at the minimum purchase price, to  the government-designated companies, avoiding 
reducing losses brought about by food prices fell.  Page 107 (Para 38) 
 
The most recent notification on domestic supp ort to the Committee on Agriculture was in 
October 2011 for the calendar years 2005-08.  It is pointed out that China does not disclose its subsidy 
systems in a transparent manner, given the fact that  it has notified the WTO of its subsidies only twice 
in 2006 and 2011, and that the substance of the notifi cations is insufficient.  Also, China has notified 
subsidies by the central government level only. 
 
Question 34    
 
Could China please explain why the Chinese government does not di sclose subsidies provided by 
local governments?  
Answer:  Subsidy notification entails huge amount of wo rk on information gathering and analysis and 
this is particularly a challenge for China as a la rge developing country.  To fulfill its notification 
obligation under the SCM Agreement systematically, China since its WTO accession has concentrated 
its efforts on notifying comprehensively central pr ograms as a first step, and would then extend its 
efforts and experiences to cover those at the sub-central  level.  Now that substantial progress has been 
made in fulfilling the transparency obligation of th e subsidies at the central level, China will work 
towards incorporating local subsidies in its future notifications.  Although at this stage it is still 
difficult to propose a timetable, China will accelerate its efforts in this regard. 
 Page 108 (Chart .2) 
 
(b) Amber Box support in China 
 
Non-product specific support significantly increased in 2008.  It seems that this is probably due to 
increases in input subsidies.  Question 35 
 What is the reason for the increase of the n on-product specific support in 2008 by more than 
five times compared to 2006?  
 Answer: The increase for non-product specific support in 2008 was mainly due to the considerable 
increase of Comprehensive Subsidy on Agricultural Inputs  WT/TPR/M/264/Add.1 
Page 262 
 
 
  (4) Manufacturing    
 
Page 119 (Para 85)   
 The authorities expect the Development Fund for Electronics (IT Fund) to enhance its support to core technology development.  
Question 36  
 
Could China please explain the details of the IT Fund in terms of supporting measures?  Can the 
foreign-invested enterprises (FIEs) also be the beneficiaries of the IT Fund? 
 
Answer:  Please refer to item 87 of our subsidy notification G/SCM/N/186/CHN for the detailed 
information of the IT fund.  
 
(5) Services   
 
Page 139 (Para 173)  
 
For value-added telecommunication services, commercia l presence is allowed in the form of joint 
venture, with foreign investment limited to 50%.   Although most of the world's largest economies 
allow full market access in the value-added teleco mmunication services market, China still maintains 
50% foreign equity limitation in this market.  
Question 37  
 
What is the rationale for maintaining this restri ction?  Are there any plans to ease the restriction?   
 
Answer: According to China's accession commitments , foreign investment in value-added 
telecommunication services shall be no more than 50%.  China progressively liberalizes the 
telecommunication services market in line with its WTO commitments.  So far 26 foreign enterprises 
have applied for licenses of providing value-adde d telecommunication services and then submitted 
qualified documents.  All of them have all obt ained the business licenses without being denied. 
 At present, China has no plan to ease this restriction. 
 
Page 142 (Para 186)  
 China maintains various regulatory measures regard ing internet services. Internet service providers 
(ISP) in China are required to obtain a license, whic h is in itself a serious market access barrier, but 
what is more, such licenses are obtained from separ ate government authorities.  Complex regulations 
and legal hurdles discourage market entry and create uncertainty to service suppliers.   
 
Question 38  
 
Is there any plan to integrate Ch ina's complex regulatory regime and establish or designate a unified 
authority to deal with internet regulations?  
 
Answer: China is of the view that the license requirem ent to Internet services providers is not a 
serious market access barrier since it is necessary for regulatory author ities to effectively regulate the 
Internet industry in China.  
  WT/TPR/M/264/Add.1 
 Page 263 
 
 
  The Chinese government regulates the Internet in acco rdance with relevant laws and regulations.  
Since 2000, China has enacted a series of laws a nd regulations concerning Internet regulation, 
including the Decision of the National People's Congress Standing Committee on Guarding Internet 
Security, Regulations on Telecommunications of the People's Republic of China, and Measures on the 
Administration of Internet Information Services, wh ich stipulate the legal responsibilities of each kind 
of Internet service providers.  Internet regulation is a process of continuous prac tice, and the Chinese government is determined to 
further improve its Internet regulation work. 
 Page 165 (Para 306) 
 The commitments also include a mode 3 national-tr eatment restriction, whereby joint-venture and 
wholly foreign-owned travel agencies are allowed to engage in outbound tourism activities i.e. to 
organize tours or to book trips for Chinese citizens tr avelling abroad.  In China's mode 3 limitations 
on market access restriction of the Travel Agency and Tour Operator Services (CPC 7471) under the 
GATS commitments, there is the provision of a nnual world-wide turnover exceeds US$40 million for 
foreign services suppliers in the form of joint ventur e travel agencies and tour operators in the holiday 
resorts designated by the Chinese government and in  the cities of Beijing, Shanghai, Guangzhou and 
Xi'an.   
 
Question 39  
 
What are the main reasons for putting this limitation on mode 3?      
 Answer:  The said limitation has been removed. 
 
PART II: Questions Regarding the Government Report   
 
II. Economic and Trade Environment and Macroeconomic Policy Direction   
 
Page 11 (Para 32) 
 From October 2010 to June 2011, the Chinese Govern ment launched a special enforcement campaign 
nationwide aiming at cracking down on infringin g IPRs and manufacturing and selling counterfeit 
commodities.  A leading group h eaded by Vice Premier Wang Qishan and involving 26 government 
agencies was established for the campaign, and Pr emier Wen Jiabao convened the national video 
conference on IPRs protection and enforcement to give assignments. Based on the results of the 
campaign, in November 2011, the State Council issu ed the Opinions on Further Cracking Down on 
Infringements of Intellectual Property Rights and Manufacturing and Selling of Counterfeit 
Commodities, and decided to establish a permanent leading group to improve further the long-term 
mechanism for protection of IPRs.  The leading group is headed by Vice Premier Wang Qishan and 
involves 29 government agencies, indicating that the government regards crackdown on infringements 
of intellectual property rights and manufacturi ng and selling of counterfeit commodities as a long-
term task and will never slacken its efforts.    Question 40  
 We welcome that Chinese governmental organizati ons and relevant institutions have been making 
efforts to reinforce IPRs through special campaigns in  China.  However, so far, IPR holders have to 
petition for specific remedies to a range of differen t enforcement organizations according to the right 
in question.  Is the Chinese government planning to establish and manage an institute which could 
cover both patents and trademarks?     WT/TPR/M/264/Add.1 
Page 264 
 
 
   
Answer: China will continue to advance its administrativ e system reform, but could not provide more 
information on this specific issue at present. 
 
Question 41   
 
We appreciate the Chinese government's efforts to  enhance the protection of IPRs. However, the 
number of cases of counterfeited goods and the damag es from these infringements have been on the 
rise. Could China please provide its opinion on this situation?  
 
Answer: From September 2010 to June 2011, the St ate Council launched a nationwide special 
campaign to crack down IPR infringement and manuf acturing and selling of counterfeit products, in 
which a batch of serious criminal cases has been investigated and adjudicated.     
 
After the special campaign, the intensity of crac kdown work remains unchanged.  At the same time, 
the construction of the long-term IPR protection me chanism has been advanced step by step.  The 
feedbacks from IPR holder and surveys by local au thorities as well as statistics from administrative 
enforcement authorities, public security organs, proc uratorates and courts all indicate that there is a 
substantial decrease in the number of cases conc erning manufacturing and selling of counterfeit 
products.  
 It should be noted that IPR protection and cr ackdown on IPR infringement and manufacturing and 
selling of counterfeit products is a tough and complicated task that will last for a long time. It is a task faced by both China and the rest of international co mmunity.  Therefore, global efforts shall be made 
for IPR protection. 
 
Page 12 (Para 33)   
 In 2010 and 2011, China amended a number of laws  and regulations concerning IPRs, including for 
example the Copyright Law and Regulations on th e Customs Protection of Intellectual Property 
Rights.  The Supreme People's Court, the Supreme People's Procuratorate and the Ministry of Public 
Security released the Opinions on Certain Issues  Concerning Application of Law in Handling 
Criminal Cases Related to the Infringement of In tellectual Property Rights, providing more explicit 
guidance for criminal enforcement issues and im proving the connection between administrative 
enforcement and criminal justice.    
 
Question 42  
 
In the Chinese patent law amended in 2008, there is no clause that imposes criminal responsibility on 
a person who has infringed on patent rights.  Is there any plan to amend the law and include a 
criminal responsibility clause?  
 
Answer:  There is no plan to amend Patent Law to in clude a criminal responsibility clause in respect 
of patent infringers.  
Question 43 
 
It is understood that the principal policies related to IPRs in China are established by the central 
Chinese government and implemented by local go vernments.  Does China have any specific 
enforcement plans for IPR protection at the local government level? 
 
Answer:  The central government makes nationwide wo rk arrangement based on the outstanding 
issues of IPR protection in China.  Local govern ments formulate and implement corresponding work  WT/TPR/M/264/Add.1 
 Page 265 
 
 
  plans according to the nationwide arrangement and their actual circumstances.  At present, local 
industrial and commercial administrations have established leading groups for the crackdown on IPR 
infringement and counterfeit produc ts to formulate local implementing schemes and key work 
arrangements in light of their local circumstances. 
 
III. Trade and Investment Development and Related Policies   
 
Page 23 (Para 91)  
 The Opinions also proposed to diversify approach es and means for utilization of foreign capital, and 
encouraged foreign investors to participate in the restructuring, transformation and reorganization of 
domestic enterprises by way of merger and acquisition.   Reform of foreign investment regime should 
be deepened to sort out administrative licensi ng and further improve transparency. Investment 
promotion should be strengthened a nd investment facilitation be enhanced, so as to further improve 
the investment environment.   
 
Question 44 
 
Given the Chinese government's foreign investment poli cy, could China please provide information on 
the specific advantages for foreign investment com panies moving to the western region as well as 
specific policies for these companies?   
 
Answer: The vast western part of China is endowe d with rich resources and a large laboring 
population, with a low labor cost and a certain i ndustrial foundation and being even closer to the 
mainland China market.  The infrastructure in the w estern part has for the past several years been 
greatly improved, the environmental protection has been enhanced and the co mprehensive investment 
environment has been hugely refined.    From 1 January 2011 to 31 December 2020, forei gn-funded enterprises in western regions belonging 
to the category encouraged by the State enjoy a 15% for enterprise income tax. 
 
According to the Provisions on Guiding Foreign Invest ment, any project in line with the Catalog of 
Priority Industry for Foreign Investments in Cent ral and Western Areas shall enjoy the preferential 
policy of the encouraged foreign-invested projects,  the imported self-used equipment within the total 
amount of investment being exempted from  customs duties within the policy scope.  
 
Page 23 (Para 93)  
 The newly amended Catalogue liste d a total of 473 items, among which 354 items belonged to the 
encouraged category, an increase of 3 items from the previous Catalogue;  80 items fell into the 
restricted category, a decrease of 7 items from the previous Catalogue; and 39 items were classified as 
the prohibited category, 1 item less than in the pr evious Catalogue.  At the same time, the new 
Catalogue also cancelled equity restrictions in so me fields.  As a result, equity requirements for 
11items in the encouraged and restricted cat egories disappeared after the amendment.   
 
Question 45 
 
Could China explain why manufacturing of complete  automobiles is removed from the "encouraged" 
category while LCD panels, which is higher than sixt h generation, is included in the category?   
 
Answer:  For the moment, the major foreign automobile  manufacturers have entered into China and 
China has become the largest producing and selli ng country of automobiles worldwide.  The 
production capacity surplus has already showed up in the manufacturing of complete automobiles WT/TPR/M/264/Add.1 
Page 266 
 
 
  while the manufacturing and R&D of key parts (suc h as engines, drive assembly and gear-box) has 
remained to be weak.  Therefore, this movement  of the manufacturing of complete automobiles from 
"encouraged" category to "permitted" one and the in clusion of key parts of new-energy automobiles 
into the "encouraged" category shall show a consiste nt stand of China in promoting energy saving and 
emission reduction and achieving a low-carbon developm ent by properly guiding the orientation of 
foreign investment.  The Korean side may have misunderstood the relevant  statements regarding the flat-panel display in 
the Industrial Catalog Guiding Foreign investment (revised in 2011).  In the Industrial Catalog the 
flat-panel display in the "encouraged" category is  referred to as flat-panel displays such as 
TFT-LCDPDPOLED and the manufacturing of the display materials(except the TFT-LCD glass 
substrate of the 6
th generation and below) with no restricti on on the generation of LCD panel.  The 
main reason for why China has en couraged the foreign investment to be oriented toward the 
TFT-LCD glass substrate of the generation higher than sixth lies in a gross lack of domestic supply of 
the glass substrate of the generation higher than sixth. 
 Page 23 (Para 95)  
 In the financial services sector, investment in China's interbank RMB bond market by overseas 
commercial banks and central banks has been stead ily advanced, and detailed rules are being drafted 
on the opening-up of the compulsory third party au to liability insurance to foreign-funded non-life 
insurance companies.    
Question 46  
 
It is understood that only central banks which ha ve a currency swap arrangement with China and 
RMB clearing banks can invest in China's interbank RMB bond market.  Is  there any plan to ease this 
limitation?  
 
Answer:  In August 2010, the PBC issued Notice on Issu es Related to the Pilot Program of Allowing 
Overseas RMB Clearing Banks and Other Two Types of  Institutions to Make RMB Investments in the 
Inter-bank Bond Market (PBC document [2010], No 217), which allowed over seas central banks or 
monetary authorities, the RMB business clearing banks in Hong Kong, China and Macao, China and 
overseas banks which participate cross border trade of RMB settlement business, to invest interbank 
bond market with the RMB funds raised from mone tary cooperation between central banks, cross 
border trade and RMB business investment.  In December 2011, the CSRC, PBC and the State 
Administration of Foreign Exchange jointly issued Measures for Pilot Domestic  Securities Investment 
Made by RMB Qualified Foreign Institutional Investors of Fund Management Companies and 
Securities, allowed the use of RMB funds raised in  Hong Kong, China by the subsidiaries of domestic 
fund management companies and securities companies in Hong Kong, China to invest in the domestic 
securities market.  By the end of this May, 83 ov erseas institutions were allowed to enter into the 
interbank bond market, and the types of those in stitutions include central banks or monetary 
authorities, international financial institutions, settlement banks from Hong Kong, China and Macao, 
China, overseas participated banks, overseas insura nce companies, funds management companies and 
RQFII securities companies.  PART III:  Other Questions  
 
Question 47 
 
Could the Chinese government outline its e- procurement system if it is established?   
  WT/TPR/M/264/Add.1 
 Page 267 
 
 
  Answer:  China's online government procurement system  has been implemented within a broader 
range and its systematic functions  have been gradually improved after several-years exploration and 
practice.  For the time being, China's e-opera tion has covered the whole process of government 
procurement, helping to realize an effec tive linkage between budge t making, procurement 
implementation, assets management and treasury concen trated payment.  To be more specific, the 
system has included into its coverage the procur ement process of procurement budget, procurement 
plan, procurement procedure, contract signing, fu nd payment and credibility record, the database 
management of suppliers, reviewi ng experts, product information and agencies, and functions such as 
e-auctioning, on-line information enquiry and real-time e-monitor. 
 At the central level, the concentrated release of  nation-wide government pr ocurement information has 
been realized, and the statistical system of a na tion-wide unified governmen t procurement information 
and the administrative and trading system of reviewing experts, agencies, plan management and e-tender for the government procurement of central authorities have been established.  At the local 
level, most local governments have studied a nd built their own online government procurement 
systems with the basic functions of information release, expert selection and bidding document 
downloading realized. Some places have set up the e-systems with more comprehensive functions 
covering government procurement administration and all aspects of transactions. 
 
Question 48   
 With interest in the environment increasing, many  countries have begun to give greater consideration 
to environmental issues in public procurement.    Has China recently introduced new regulations with environmental considerations (e.g. 
environmental performance requirements, environm ental labeling, etc.) for green procurement?  
Does China have green procurement ta rgets at the central and provincial  levels, such as those found 
in the EU? 
 
Answer:  In order to achieve the goal of energy savi ng and environmental protection in government 
procurement set in the Government Procurement Law of the People 's Republic of China, the Ministry 
of Finance established in 2004 and 2006 the nation -applicable government procurement regimes of 
energy-conserving products and environmentally -labeled products respectively, including the 
authenticated energy-conserving products and envir onmentally-labeled products into the government 
procurement list and giving them priorities or to be purchased on a mandatory basis.  At this stage, the 
central level and provincial level have not yet set up specific goals for environmental-friendly 
procurement shares.    
MALAYSIA 
 
GOVERNMENT REPORT  
Page 10 (Para 21)  
 Expanding domestic demand, partic ularly consumer demand, is essential to long-term steady and 
robust economic development in China.  It is a long-term policy that the Chinese Government will 
adhere to.  In 2010, the Chinese Government conti nued to implement consumption stimulus programs 
such as the programs for rural residents to purchase home appliances and motor vehicles and 
motorbikes, for people to trade in old motor vehi cles and home appliances for new ones, and for use 
of energy-efficient products.  The Chinese Governme nt also continued to improve the consumption 
environment and expand consumption in new areas by measures such as upgrading rural and 
community commercial facilities, promoting cons umption facilitation and encouraging credit WT/TPR/M/264/Add.1 
Page 268 
 
 
  consumption.  In the meantime, in view of the fact  that some of the programs introduced in the course 
of addressing the international financ ial crisis were to be phased out, introduction of new policies for 
promotion of consumption was under study to facilit ate and benefit people, with the general policy 
direction being green, low carbon, energy saving and environment protecting.  
 
Questions:  
 1. Could China provide further details on the stimulus program for rural residents to purchase 
home appliances, motor vehicles and motorbikes and fo r people to trade in old motor vehicles and 
home appliances for new ones?  
Answer: The program for rural residents to purch ase the motor vehicles was carried out from 
1 March 2009 to 31 December 2010, and the program for them to purchase motorbikes started on 1 February 2009 and will end on 31 January 2013, both aiming at facilitating the rural residents 
purchase on the minibuses, mini-trucks, light-duty trucks or motorbikes by offering subsidies. 
 The program for the rural residents to purchase home appliances was tried out in 2007.  It had come to 
an end by the end of 2011 in three provinces of Shandong, Henan, and Sichuan, and the city of 
Qingdao.  And it will expire by the end of January  of 2013 in other region s.  The subsidy covers 
12 varieties in 9 categories, subject to adjustment as required. 
 The program for auto replacement was carried out  from 1 June 2009 to 31 December 2011.  The 
medium, light, and mini trucks that meet the servi ce life requirements and some of the medium buses 
declared worthless for replacement in advance as sti pulated, can enjoy the government subsidy.  The 
yellow label cars declared worthless for replaceme nt in advance are also entitled to subsidy. 
 
The home appliances replacement was started in June  2009 in 9 provinces and cities, such as Beijing, 
Shandong, and Fuzhou.  From 2011 on, it was carried out nationwide, and ended on 31 December 2011.  The program aims at stimulatin g consuming demand, promoting the efficiency of 
energy consumption and conservation for sustaina ble development, and reducing environmental 
pollution. 
 
2. How does China ensure the WTO compliance of  the above measure, particularly with respect 
to Article III of GATT?  
Answer:  The above-mentioned measures aim to stimulate consumption, especially in rural areas. The 
subsidies incurred go directly to the consumers.  Therefore, the subsidies do not belong in WTO 
requirements on subsidies.  Still, the products c overed in the program incl ude domestic and overseas 
brands, which do not violate WTO rules concerned as it conforms to GATT Rule 3 on national treatment.  
Page 11, Para 30, 31  
 Strengthening intellectual property rights (IPRs) prot ection has always been an important part of the 
work of the Chinese Government to  accelerate the construction of an innovative country.  China has 
gone through a course of IPRs protection in 30-odd years which took several hundred years in 
developed countries, and has achieved remarkab le accomplishments.  However, due to the 
contemporary conditions of China as a large develo ping country, infringements of IPRs still exist, 
which disturb the order of market economy and di srupt competitiveness and innovation enthusiasm of 
enterprises.   Since the last review, with respect to IPRs pr otection, the Chinese Government on the one hand has 
concentrated efforts on strengthening enforcement to solve prominent problems, carrying out special  WT/TPR/M/264/Add.1 
 Page 269 
 
 
  campaigns of cracking down on infringements and c ounterfeits.  On the other hand, it has advanced 
the construction of long-term mechanism for IPRs protection and actively fostered favourable legal 
environment, market environment and social environment.   Question: 
 
1. Could China provide some information on th e effectiveness of the initiatives undertaken by 
the Government to strengthen intellectual property rights (IPRs) protection.    
 Answer: From October 2010 to June 2011, a campaign w as effectively carried out to crack down the 
infringements of IPRs and producing and selling of fake or inferior quality products. In the period 
156,000 such cases were registered, totaling 3.43 bi llion yuan. 9,135 such manufacturing spots were 
destroyed.  And 329 key areas and markets were rect ified.  29,000 suspects de tained were involved in 
13.11 billion yuan worth of law violation.  Among 2,895 procuratorial arrests involving 5,336 people, 
2,176 were filed a lawsuit.  The law court accepted 2,492 cases, 1,985 of which brought in verdict.  
Through the campaign the infringements of IPR an d selling and manufacturing of fake and inferior 
quality products were contained, with the market order and business environment obviously 
improved.  
 
Page 12 (Para 34) 
 
The Chinese Government also carried out a series of publicity activities concerning IPRs protection, 
including exhibitions on the achievements of the special campaign on cracking down on 
infringements of intellectual property rights and manufacturing and selling of counterfeit commodities 
and the nationwide Intellectual Property Rights Protec tion Week in 2010 and 2011, in a bid to further 
raise the awareness of IPRs protection in the soci ety, to mobilize the general public to support and 
participate in IPRs protection, and to create a s ound public opinion environment and favourable social 
conditions for the building of  an innovative country.  
 
Question: 
 1. It is noted that China is giving priority to effective IPR protection and enforcement.  Could 
China provide some details on its innovation related policies and criteria tied to those policies (technology transfer, must the IPR be developed in Ch ina etc.) as well as China's measures related to 
compulsory licensing of patents? 
 Answer:  China's independent innovation products do not  have to do with the preferential policies of 
government procurement.  In addition, the Chinese government does not stipulate that IPRs development location and ownership be th e precondition for government procurement.  
 Page 13 (Para 37) 
 For industries seriously damaging resources and environment and already having surplus production capacities, the access standards in respect of technology, production scale, ecological protection, 
energy conservation and consump tion reduction and safety production were further raised.  More 
strict protective exploitation policies and envi ronment protection standards were adopted on 
non-renewable resources such as bauxite, tungsten,  antimony, tin and rare earth, and the total 
exploitation and production volum es were strictly controlled, in order to protect resources and 
ecological environment and promote reasonable a nd efficient exploitation and utilization.  
 WT/TPR/M/264/Add.1 
Page 270 
 
 
  Question: 
 
1. Could China give some examples of indus tries that are seriously damaging resources and 
environment?   
 
Answer: According to the Notice of the Ministry of  Environmental Protection on Environmental 
Protection Inspection of IPO Enterprises and Enterp rises Applying for Refinancing issued in 2003, the 
Notice on Further Specifying on Environmental Protection Inspection of Heavy Pollution Industry 
Enterprises Appling for IPO or Refinancing issu ed in 2007, and the Classified Administrative 
Catalogue of Environmental Protection Inspection of the Public Enterprises issued in 2008, 16 industries of thermal power generation, iron and steel, cement, electrolytic aluminium, coal, metallurgy, chemical industry, petrochemical indus try, construction material , brewery, pharmaceutics, 
fermenting, textile, hide processing and mining are li sted as heavy pollution industries.  Some of the 
enterprises in the industries lack necessary pollution treatment facilities, and violate stipulations in 
discharge of wastes, which not only waste our lim ited resources, but also pose threat to the 
environment.  Take rare earth industry for example. Much of energy  is wasted in the production. In order to protect 
the resources and environment, the Chinese government  has taken more rigid protective development 
measures and eco-environmental protection standard s.  In February 2011, the Ministry of 
Environmental Protection issued the Rare Earth I ndustry Waste Discharge Criteria.  It issued the 
Measures on Strengthening Rare Earth Mine Ecological Protection and Recovery on July 2011.  In the 
future the Chinese government will take stricter ecological and environmen tal standards and put 
pollution discharge under sever control to reduce the ecological damage.  
 
Page 13 (Para 38) 
 
The sound development of agriculture and rural areas  is of great significance to the long-term steady 
and sustainable economic and social development in China.  The Chinese Government will, in 
accordance with the requirements on narrowing the gap between urban and rural areas and improving 
the balance between urban and rural development,  continue the implementation of the "pay-back" 
policies and further strengthen the support for agricu lture, rural areas and farmers so as to constantly 
promote agricultural modernization in the course of industrialization and urbanization, improve 
production and living conditions in  rural areas, increase incomes of farmers, consolidate and 
strengthen the foundation for the development of agri culture and rural areas and create conditions for 
sustainable, rapid and coordinated economic and social development.  
 
Questions: 
 
1. Could China provide some clarification on the pay-back policy especially on how it is implemented and its success thus far in achieving its objectives?   
 Answer: With the accelerated industrialization and ur banization in China, more support and 
protection has been delivered to the agriculture to  achieve the coordinated development of industry 
and agriculture, for the shift of policies from agricu lture feeding industry to industrial nursing the 
agriculture. 
 
The central government started the experimental refo rm of rural taxes and administrative charges at of 
2000 in Anhui province, eliminating the rural admini strative charges, capital raising, readjusting the 
agricultural taxation policies, and reforming the regulations on the application of the charges 
withdrawn and retained at the village level.  In  2003, the reform went underway nationwide.  And 
2004 witnessed more vigorous reforms, with tax on ag ricultural specialty products (excluding leaf  WT/TPR/M/264/Add.1 
 Page 271 
 
 
  tobacco) exempted.  The agricultural tax had been gradually lowered and was finally exempted in 
2006.  
The central government has undertaken to reform  the town and township mechanism, rural 
compulsory education, the county and township fina ncial administration system, and collective forest 
ownership, so as to explore a long effect mechanis m to prevent the rebounding of farmers' burden.  At 
the same time, leftover problems concerning the farmers' burden should be duly resolved, by 
reforming national farms taxation a nd charges, relieving the burden of the rural residents around the 
Great Lake region.  The government shall effec tively reduce regional and administrative burden on 
farmers.  The left over debts of the rural compul sory education should be resolved to unravel the 
village debt chains.  Financial bonus and subsidies should go down to the village level for public 
welfare, to find out a new mechanism of rural public  welfare.  All these have contributed to relieving 
the farmers' burden.  
Page 14 (Para 45) 
 
Supporting the development of SMEs, especially small low-profit enterprises, is an important part of 
the work of the Chinese Government to promote the common development of economic entities of diverse forms of ownership.  In addition to the stru ctural tax reductions in favour of small low-profit 
enterprises, the Chinese Government expanded the funds  for promoting the development of SMEs.  It 
will also continue making efforts in broadening fi nancing channels of SMEs , gradually expanding the 
size of issuance of collection notes, collection bon ds and short-term financ ing bills by SMEs, and 
actively and steadily introducing private equity  investments and other financing vehicles.  
 
Question: 
 1. Could China provide some clarification on the tax structure for small low-profit enterprises 
and also the funds and programs to further promote SMEs.  
Answer:  As for the tax structure for small low-pr ofit enterprises: increase the VAT and business tax 
threshold; the policy that small low-profit enterpri ses pay the business income tax by half will be in 
effect until the end of 2015, together with wider coverage.  The pilot projects to replace business tax 
with VAT will be accelerated in order to eliminat e repeated taxation in service field.  Taxation 
reforms will be deepened to improve the structural  tax cuts policies, and taxation systems will be 
probed into to support the developm ent of small and micro businesses.   
 
As for the funds for the small and medium size enterprises:  15 billion yuan allocated from central 
revenues will be in place in 5 years for the establishment of th e development fund for small and 
medium size enterprises;  3 billion will be in pl ace in 2012, coming from central fiscal budget, fund 
profits, donations, etc.  The fund aims to direct the local governments, VC, and other social capital for 
support of SMEs at their early stage.  Donations to  the funds are encouraged.  Enterprises that donate 
no more than 12% of their annual profit and indivi duals who donate less than 30% of their taxable 
income enjoy pre-tax cost deduction.  Page 15 (Para 50) 
 
Reform of the taxation system continued to advance quickly over the past two years.  On 
1 December 2010, the urban construction and mainte nance tax and the education surcharge began to 
be applied equally for Chinese and foreign-invested enterprises and individuals.  The taxation system 
for Chinese and foreign-invested enterprises and indi viduals in China was thus finally unified.  In 
2011, the municipalities of Shanghai and Chongqing launched the pilot program of collecting real 
estate tax on individual properties.  In 2012, ne w vehicle and vessel tax and tonnage tax were 
implemented.  WT/TPR/M/264/Add.1 
Page 272 
 
 
   
Question: 
 
1. Could China provide some details on th e urban construction and maintenance tax, the 
education surcharge and the new vehicle and vessel tax and tonnage tax?   
Answer: For the detailed information, please refer to Law of the Peoples Republic of China on 
Vehicle and Vessel Tax, Provisional Regulations of the People's Republic of China on City 
Maintenance and Construction, Decision of the St ate Council on Amending the Interim Provisions on 
the Collection of Educational Surcharges, and No tice of the State Council on Extending the Urban 
Maintenance and Construction Ta x and Educational Surcharges from Chinese to Foreign-funded 
Enterprises and Citizens. 
 
Page 16 (Para 58)  
 
In the reform of medical and healthcare system, new breakthroughs have also been achieved.  Nearly 
1.3 billion people have subscribed to either the basic medical insurance for urban workers, or the 
basic medical insurance for non-working urban resi dents, or the new rural cooperative medical care 
system, covering more than 95% of all the urban an d rural residents.  The national system for basic 
drugs is largely in place, the primary-level medi cal and healthcare system improved, and progress has 
also been made in providing equal access to basic public health services.  
 
Question:  
 
1. Could China provide further clarification and details on the na tional system of basic drugs?   
 Answer: The essential drugs are those medicines which can  meet the basic need of medical health 
with proper dosage forms and priced at reasonable levels and with theirs supplies safeguarded and 
being able to be fairly acquired by the public.  The grass-roots health-care institutions sponsored by 
the government shall all be equipped with and prescr ibe essential drugs which other types of medical 
institutions shall also prescribe these drugs comp lying with relevant provisions.      
 According to the Guiding Opinion for Establishi ng and Regulating the Procurement Mechanism of 
Essential Drugs by the Government-run Primary Hea lth-care Institutions (Guo Ban Fa [2010] No. 56), 
the procurement of essential drugs sh all be centralized at the provincia l level and handled online, with 
the procurement policy being adopted of syncre tism between bidding inv itation and procurement 
implementation, dosage-based price, double-envelop system, centralized payment and whole-process 
monitor.  The principle of high quality being given a priority to and price being reasonable shall be 
adhered to and the security and effectiveness of esse ntial drugs and also their timely supply shall be 
ensured.  
Page 23 (Para 90) 
 
In April 2010, the State Council issued the Opinions on Further Improving the Use of Foreign Investment.  In light of the requirements to  accelerate the transfor mation of the economic 
development pattern and to realize sustainable, st eady yet robust economic development, the Opinions 
proposed to open up more areas to foreign investment  and to optimize foreign investment structure.  
Foreign investments are encouraged to go to high-end manufacturing, high and new technology 
industries, modern services, new sources of ener gy and energy-saving and environment protecting 
industries.  They are encouraged to move to cen tral and western regions with increased investment 
and to develop in these regions  labour intensive industries meeting environment protecting 
requirements.  
  WT/TPR/M/264/Add.1 
 Page 273 
 
 
  Question: 
 
1. Could China give some examples of high-e nd manufacturing industries and modern services? 
 Answer:  For instance, space craft manufacturing and internet shopping. 
 Page 21 (Para 84) 
 
With respect to investment, China is changing  from focusing primarily on absorbing foreign 
investment to attaching importance to both inwa rd and outbound investment.  China has long been 
one of the major destinations for foreign direct  investment.  In comparison, China's outbound 
investment is still at an inception stage.  However, it has also registered rapid growth.  At the end of 
2009, China's cumulative outward direct investment accounted for 1.3% of the global total.  At the end of 2010 it went up to 1.6%, showing a momentum  of steady growth.  "Going global" of Chinese 
enterprises is the natural result of the developm ent of economic globalization.  It satisfies the 
enterprises' own needs to further develop, and refl ects also the requirement of further reform and 
opening up of the Chinese economy.   
Question: 
 
1. Could China share whether there are any incentives/initiatives provid ed under the Go Out 
Policy to encourage outbound investment?   
Answer: In order to deepen the reform of the manage ment system for foreign investment, boost the 
facilitation of outbound investment and encourage enterprises to go out, the Ministry of Commerce 
issued the Management Methods of Investment Ov erseas in May 2009;  in February 2011, the State 
Development and Reform Commission issued the Notice on Enforcement of Authority Approval of Outbound Investment Programs.  
SECRETARIAT REPORT   
 
II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES  (2) DEVELOPMENT AND ADMINISTRATION OF TRADE POLICIES  (3) TRADE AGREEMENTS AND ARRANGEMENTS   
Page 17, Para 35 
 
China is pursuing negotiations or undertaking join t-studies on possible RTAs/FTAs with:  Australia;  
Norway;  Switzerland;  Iceland;  the Gulf Co- operation Council (GCC);  I ndia;  the Republic of 
Korea;  SACU (individually);  and the Republic of Ko rea and Japan (for a future tripartite agreement).   
 Question:  
 1. Could China provide further explanation on the tripartite agreem ent with Republic of Korea 
and Japan, particularly on its  possible scope and coverage?  
 
Answer:  According to the conclusions and recommendati ons of the Joint Study Report, China, Japan 
and Korea FTA negotiations will include trade in  goods, trade in services, investment and other 
issues.  
 WT/TPR/M/264/Add.1 
Page 274 
 
 
  Page 16 (Para 32)   
 
China has concluded two new FTAs since 2009, i.e. the free-trade agreement with Costa Rica (signed 
April 2010, entered into force August 2011), and th e Cross-Straits Economic Cooperation Framework 
Agreement (ECFA) with Chinese Taipei (signed June  2010, entered into force September 2010).  The 
two agreements were the object of early announcements to the WTO.   
Question:   
 
1. Does China have any plans to expand the conn ectivity of ECFA to other existing regional 
trade arrangements?  
Answer: On 29 June 2010, ARATS and SEF signed th e Cross-strait Economic Cooperation 
Framework Agreement (ECFA), which marks the cross-strait economic relations entered a new 
historical stage of institutionalized cooperation.  Both sides are engaging to promote the ECFA 
follow-up consultations.  The two sides have basica lly agreed on cross-strait investment protection 
and promotion agreement, which is expected to  be signed during the eighth round of talks. 
Negotiations on cross-strait trade in services ar e in full swing and progress has been made. 
Negotiations on trade in goods has been put on the agenda and process will be accelerated.  The 
two sides will promote the signing of the ECFA follo w-up agreements by adhering to the principle of 
first comes, first signed and implemented.  
 
(4) FOREIGN INVESTMENT REGIME   
Page 19, Para 41 
 
Since 6 April 2010, the Government has encouraged  foreign-invested ente rprises (FIEs) in joint 
ventures with Chinese enterprises or  research institutes to participate in government-funded projects 
under the "national technology development pr ogramme" and the "innovation capacity-building 
programme.3  The national technology development pr ogramme and the innovation capacity-building 
programme are subsidy programmes managed by NDRC with the aim of promoting innovation.  The 
programmes are open to enterprises and research ins titutes.  Upon approval of projects put forward by 
enterprises, NDRC grants subsidies that partially  cover the cost of innovation activities.  Since 
31 August 2010, some manufacturing subsectors (e .g. textiles and apparel, toys, and domestic 
appliances) and banking services in the central and western regions have been classified as 
"encouraged", in accordance with the State Counc il's Guiding Opinions on Central and Western 
Regions' Receipt of Industrial Transfers.4  This reclassification will be reflected in the next revision of 
the Catalogue of Advantaged Industries for Fore ign Investment in Central-Western China.  
 
Questions: 
 
1. Could China provide an indication as to wh en China will be announcing the Catalogue of 
Advantaged Industries for Foreign Investme nt in Central-Western China.  
 
Answer:  In light of Several Opinions of the St ate Council on Further Doing a Good Job in the 
Utilization of Foreign Investment, the Ministry of Commerce and National Development and Reform 
Commission have jointly launched the amendment to the Catalogue for the Guidance of Foreign 
Investment Industries.  The draft for new vers ion catalogue has been b asically completed with 
opinions solicited from the public.  About 300 public opinions have been submitted in response to the 
solicitation notice published in the official website of the Legislative Affair Office of the State 
                                                      
3 Certain Opinions on Further Improving the Use of Foreign Capital (State Council's Circular 2010/9).   
4 State Council Circular 2010/28, 31 August 2010.  WT/TPR/M/264/Add.1 
 Page 275 
 
 
  Council on 1 April 2011.  In the next stage, the new version catalogue will be  amended based on the 
public opinions and promulgated upo n approval by the State Council. 
 
2. What are China's plan in promoti ng investment in the Western region? 
 
Answer: In August 2010, the State Council issued certain  guiding opinions on the central and western 
regions receipt of industrial transfers.  The opinions point out that efforts should be made to make use 
of the industrial basis and advantages in labour fo rce and resources in mid-west China to receive, 
transform and develop labour-intensive industries,  to guide the orderly relocation and scientific 
continuation of the industries, and to grant necessary policy supports. 
 
3. Could China provide more information on th e development of strategic industries in the 
Western region (which China will be formula ting), and areas where Malaysia can cooperate?     
 
Answer: At present, China is engaged in making the Cata logs of Advantageous Industries of Foreign 
Capital Investment in the Middle and Western Ar eas of China.  According to the Provisions on 
Guiding the Orientation of Foreign Investment, any foreign capital investemnt project covered in the 
Catalog will enjoy the favorable treatment in the "encouraged category.  Foreign capital investment 
enterprises set up in the Western China will have their business income taxes reduced to 15% from 
1 January 2011 to 31 December 2020. 
 Malaysian investors can find business opportunities in the middle and western areas of China, 
following the two Catalogs. 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE  
 
Page 25, para 10  
 China's preshipment inspection (PSI) requirement s have remained unchanged since 2010.  The 
requirements, which are defined in the revised Implementing Regulations of the Law on Import and 
Export Commodity Inspection, are intended to:  pr otect public health;  improve the phytosanitary 
situation;  protect the environment;  and prevent counterfeit goods from entering the country.  PSI requirements have not been notified to the WTO.   
Question: 
 
1. What are the latest requi rements for China's PSI?  
When does China propose to notify the re quirements to the WTO Secretariat?  
 
Answer: Currently, China is applying PSI only to importe d solid waste and alike that can be used as 
raw materials.  For details please refer to Chapter f our of the Measures for th e Inspection, Quarantine, 
Supervision and Administration of Imported Solid Waste That Can Be Used as Raw Materials 
(Decree No. 119 of the General Administration of Qu ality Supervision, Inspection and Quarantine). 
 
When does China propose to notify the requirements to the WTO Secretariat? 
 
Answer: China already reported its Measures for the Inspection, Quarantine, Supervision and 
Administration of Imported Solid Waste That Can Be Used as Raw Materials to WTO/TBT Commission on 19 June 2009, with G/TBR/N/CHN/649 as the report number. 
 WT/TPR/M/264/Add.1 
Page 276 
 
 
  Page 34, Para 42  
 
In 2010, 87 tariff lines (at the HS 8-digit level) were subject to non-automa tic import licensing (down 
from 95 in 2009);  the lines cover ozone-depleting su bstances (with a view to meeting requirements of 
the Montreal Protocol on Substances that Deplete the Ozone Layer), and specific old mechanical and 
electronic products (aimed at protecting public inter ests, the environment, and consumer health and 
safety).  Second-hand/used mechanical and el ectrical products (HS 84194010 and 84194020) were 
removed from the list on 1 January 2011.  Applican ts must apply for an import permit prior to 
applying for an import licence.  The criteria fo r approving the import permit are contained in 
Measures on Administration of Import License for Goods (MOFCOM Decree No. 27 of 2004, G/LIC/N/1/CHN/5), Administrative Measures for the Import of Key Used Electromechanical Products (MOFCOM, GAC and AQSIQ Decree No. 5 of 2008, G/LIC/N/1/CHN/6), and Working 
Rules on Issuance of Import License (MOFCOM Circ ular Shang Pei Fa 360/2007).  Import permits 
are issued by the Ministry of Environmental Protection or MOFCOM, depending on the product.  
Once the permit is obtained, a licence will be grante d automatically by MOFCOM to the importer.  
The licence is valid throughout the calendar year, an d may be extended once, for a maximum of three 
months.    
Questions: 
 
1. Further to the elimination of non-automatic import licensing on several products in 2010, does China have any plans to further reduce the use of non-automatic licensing restrictions?  
 
Answer: China is still in coordination with relevant ag encies to provide response to this question. 
 2. What steps are being taken by the Govern ment to ensure that China's import licensing 
requirements are simple and transparent in line with the commitments under the Import Licensing 
Agreement of WTO?    
Answer:  China's import licensing procedure is regulated in accordance with the Import Licensing 
Agreement of WTO, so it is consistent with the certain requirements. 
 
1. MEASURES DIRECTLY AFFECTING IMPORTS  (VI) CONTIGENCY TRADE MEASURES  
 Page 36 (Para 49)/ Page 44 (Para74) 
 
When the anti-dumping/ Safeguard investigati on involves agricultural products, the injury 
investigation is conducted jointly by MOFC OM and the Ministry of Agriculture.   
 
Question: 
 
1 Could China clarify the role and function of the Ministry of Agriculture in conducting the investigation?  Is there any authority/pow er given to Ministry of Agriculture?  
 
Answer: According to the PRC Anti-dumping Regulation , Ministry of Commerce is responsible for 
the investigation and confirmation of damages.  As for domestic damages caused by anti-dumping 
cases concerning agricultural products, a joint inves tigation will be co-conducted by the Ministry of 
Commerce and the Ministry of Agriculture. 
  WT/TPR/M/264/Add.1 
 Page 277 
 
 
  Page 36 (Para 52)  
 
China's anti-dumping system includes a range of mech anisms to provide interested parties access to 
information, and rights of participation.    
 
Question: 
 
1. Could China clarify if all public information,  including the official finding reports published 
by MOFCOM, are available in English and the oth er languages in which they are made available?  
 
Answer: Chinese is the working language fo r investigating antidumping in China.  All the official 
documents issued by the Ministry of Commerce, including the findings, are in Chinese, without 
editions of other languages. 
 
Page 37 (Para 54)  
 
During the investigation, the exporter may offer price undertakings to MOFCOM and MOFCOM may 
suggest price undertakings to an exporter.   Question: 
 1. Has MOFCOM implemented any price undertakings in any investigation?  
 
Answer: In quite a few antidumping cases, the Ministry of Commerce accepted the price 
undertakings application from stakeholders, wit hout imposing antidumping duty.  For example, the 
antidumping case involving the cold roll stainless st eel plate made in Japan and South Korea, the 
antidumping cases of PVC imported from USA, S outh Korea, Japan, Russia and Chinese Taipei, 
chloroform imported from EU, South Korea, USA and India, and hydrazine hydrate from France, furan powder from EU and USA, and acetone from Chinese Taipei. 
 
2. If so, could MOFCOM explain how effectiv e are these price undertakings in narrowing the 
effect of dumping to the domestic industry?   
Answer: According to the price undertakings agreement, the interested parities undertake to import to 
China at a price not lower than the negotiated price so as to prevent the underpriced import from 
impairing the domestic industries 
 
Page 38 (Para 55) 
 
MOFCOM will engage in sampling when the number of exporters, producers, types of products or 
transactions is so large that it would be unduly burdensome and prevent timely completion of the 
investigation. In the case of numerous producers, th e authorities will select samples for investigation 
and a reserve list from among the exporters and producer s that have registered to participate in the 
investigation.   
Question: 
 1. Could China explain what are the criteria adopted in selecting registered exporters and 
producers for participation in th e investigation for sampling?  
 
Answer: Please refer to http://gpj.mofcom.gov.cn/ 
 WT/TPR/M/264/Add.1 
Page 278 
 
 
  According to the Interim Regulations of AD inves tigation Sampling, China's investigating authority 
normally adopt two methods to sample. One is to  select several enterprises with largest export 
volume, and the other to adopt st atistically feasible methodology. 
 
Page 44 (Para 77)  
 
Final safeguard measures may not remain in place for more than four years, except under special 
circumstances.   Question: 
 1. Could China explain what is the extension period for application of a safeguard measure 
under special circumstances? How many extension could be considered und er this provision? 
 
Answer:  Article 26 of the PRC Safeguard Measures Regulation stipulates that the safeguard 
measures stay in effect for no more than four y ears. However, they may be extended if following 
requirements are met: 1. the safeguard measures remain necessary in preventing or remedying severe damage; 
2. evidence shows that domestic industri es concerned are under readjustment; 
3. obligations of public notification a nd negotiation have been fulfilled; 
4. The extended measures are no stricter than beforehand. 
 In spite of these, any safeguard measure should st ay in effect within ten years, including the 
extension.  
Page 44 (Para 78)  
 
There is no appeal against decisions taken by the authorities.   
Question: 
 
1. Could China explain how it deals with dis putes raised by other affected countries on 
decisions taken by the Authority if there is no provis ion for appeal? 
 
Answer: Since the last review, China has not launched  safeguard measure investigation. And in 
practice, no interested parties challenge the safegua rd measures. According to Article 32 of the PRC 
Safeguard Measures Regulation, the Ministry of Commerce takes charge of  undertaking negotiations, 
notifications and dispute settlement thus aroused.  Page 46, Para 85  
 
There are four levels of standards in China:  nationa l, trade, local and enterprise standards.  Under the 
Regulations for the Implementation of the Standardi zation Law, in formulating national standards, the 
competent standardization administration depart ment under the State Council is responsible for 
making plans, organizing drafting, examini ng and approving, numberi ng and issuing national 
standards.  If there are no national standards for tec hnical requirements that need to be standardized 
for certain trades throughout the country, trade standa rds may be formulated.  Trade standards become 
null and void automatically after the corresponding na tional standards enter into effect.  In the 
absence of national standards or trade standards, local standards may be formulated on safety and 
sanitation requirements for industrial goods that need  to be unified in the provinces, autonomous 
regions, and municipalities directly under the Centra l Government.  Local standards become null and 
void automatically after the corresponding national standa rds or trade standards enter into effect.  In 
the absence of national standards, trade standard s or local standards for certain products, the  WT/TPR/M/264/Add.1 
 Page 279 
 
 
  enterprises producing such products may formulate their own standards as the basis for organizing 
production.  Where there are already national, trade or local standards, ente rprises are encouraged to 
formulate and apply enterprise standards that ar e stricter than the corresponding standards.  
 
Questions: 
 
1. Could China clarify what is defined as en terprise standards and the role of enterprise 
standards in harmonising duplicat ion of existing standards? 
 Answer: Enterprise standard is the standard that harmonizes technical requirements, management 
requirements and working requirements within enterpri ses.  When no national or local standard exists, 
enterprise standard shall be formulated and followe d in production.  When national, trade or local 
standards already exist, enterprises are encouraged to formulate and apply higher enterprise standards. 
 Page 59 (Para 142  143)  
 (iv) Tax rebates on exports 
 142. Excise tax is fully rebated on exports.  
 
143. VAT may be rebated on exports, although the re bate rates are, by and large, lower than the 
VAT rates actually paid.  The difference between the two rates constitutes a levy on exports, which 
may in turn constitute assistance to downstream pr ocessing of the products affected, and could affect 
China's terms of trade  Question: 
 1. Could China elaborate how its VAT rebates on exports are consistent with the WTO 
Agreement on Subsidies and Countervailing Measures?     
Answer: VAT rebates on exports are intern ationally practiced. China's gene ral rebate leve l is actually 
lower than the export taxation, as China cannot afford higher rebates financially.  We hold that the 
idea that the difference between the rebates and the taxation encourages the downstream processing of 
products concerned is one-sided and lacks strong theo retical and practical support. In the meantime, 
China's VAT rebates on exports do not violate the stipulations of ASCM, WTO. 
 
(3) MEASURES AFFECTING PRODUCTION AND TRADE  
(vii) Intellectual Property Rights  
 
Page 95, para 321 
 
During the last TPR of China, a number of its trading partners expressed concerns about the lack of 
effective enforcement of intellectual property rights , particularly at the regional and local levels.  
China was urged to step up its efforts in enforc ing IPR protection, including greater and effective 
customs control and criminal prosecution.  
 
Questions: 
 
1. How does China ensure the protection of IPR at its regional and local levels?  
 
Answer: The so-called comment on China's poor enforcement of IPRs protection lacks sound 
evidence. 
 WT/TPR/M/264/Add.1 
Page 280 
 
 
  In November 2011, the State Council issued the M easures on Further Fighting against Infringement of 
IPRs and the Production and Sale of Counterfeit a nd Shoddy Commodities, stipulating that executive 
enforcement in regions with serious problems concer ned should be strengthened within required time 
limit for concrete effect. Administrative supervis ion and accountability should also be upgraded.  
Local authorities will be held res ponsible, due to improper execution, systematic infringement of IPRs 
and producing and selling of fake and inferior commodities.  Each year, the member departments of the Nationa l Leading Panel against the Infringement of IPRs 
and Producing and Selling of  Fake and Inferior Products undertake to check on the local governments 
to guarantee the smooth implementation of the tasks assigned by the central government. 
 
2. Could China provide examples of laws, regulations and/or guidelines that have been issued and enforced to coordinate the enfo rcement between the agencies?    
 
Answer: The Chinese government encourages coordinate d law enforcement.  At present, many 
effective trial measures have been carried out by  the executive law enforcement departments, public 
security departments, and procuratorial organs to  crack down violation of IPRs and producing and 
selling of fake and inferior products.  Such regula tions fall into two main categories:  one covering 
specifying and promoting interdepartmental coope ration, such as the regulation on the cooperation 
between the customs and public security departme nts, the other promoting and strengthening the 
linking up of executive enforcement to the penal j udicature, such as the measures co-issued by the 
Supreme People's Procuratorate, Ministry of Public  Security and so on, are aimed at strengthening the 
linking up of executive enforcement and penal judicature. 
 
IV. TRADE POLICIES BY SECTOR  
(5) SERVICES  
Page 144 (Para 195) 
 
1. The activities of internet content providers a re regulated by different regulations issued by 
specialized authorities depending on the nature of the services provided.  
 Question: 
 
1. Could China provide some clarification on the activities of internet contents providers that 
are regulated and the regulation and regulating authority for each of those activities? 
 
Answer:  Internet publications are regulated by GAPP.  The Interim Provisions on the Administration 
of Internet Publication (No.17 by GAPP and MII) have clarified the definition of internet publication, 
stipulated the approval prerequisites for internet  publication business, and the documents and data 
required for submission, rights and obligations of internet publishers, as well as their legal liabilities 
for any unlawful acts. 
 The production, edition, integration and supply to the public of audio and video programs through 
internet, as well as uploading services, are regulated by the competent department of broadcasting, 
film and TV under the State Council, covering such aspects as the industrial development of internet 
audio and video service, the regulation, c ontent provisions and security supervision.  
   WT/TPR/M/264/Add.1 
 Page 281 
 
 
  MEXICO 
 
1. Could China give an update of the current state of implementation of its Authorized Economic 
Operator Program, as well as the relevant pub lications/websites indicating the applicable 
requirements for applicants?   
 
Answer: It would be helpful if Mexico can further explain the meaning of Authorized Economic 
Operator Program.  We cannot understand what it refer to.  
 2. Is China making any additional effort to provide us with figures on the magnitude of support 
provided and also with information on subsidi es and other government assistance provided at a 
provincial level?   
Answer:  Use of subsidies and other government assistance is an important feature in trade policies of 
many WTO Members.  Subsidy notification entails  huge amount of work on information gathering 
and analysis and this is particularly a challenge fo r China as a large developing country.  To fulfill its 
notification obligation under the SCM Agreement systematically, China since its WTO accession has 
concentrated its efforts on notifying comprehensively central programs as a first step, and would then 
extend its efforts and experiences to cover those at  the sub-central level.  Now that substantial 
progress has been made in fulfilling th e transparency obligation of the subsidies at the central level, 
China will work towards incorporatin g local subsidies in its future notifications.  As to the 2009-2011 
notification, it will not be too difficult if covering only central programs.  However if local programs 
are to be incorporated, it will be a different case.   In any case, China will accelerate its efforts for a 
new notification.  I.  ENTORNO ECONÓMICO 2) P
OLÍTICAS ESTRUCTURALES  
 
3. What concrete efforts will China take duri ng the next years in order to accelerate its 
transition into a market economy?   
 
Answer: The 16th National Congress of CPC in 2002 announced that China had put in place an initial 
system of socialist market economy.  In 2003, the Third Plenary Session of the 16th CPC Central 
Committee issued the Decision of the Centra l Committee of the Communist Party on Issues 
Concerning the Perfection of the Socialist Market  Economy System, setting up goals and tasks to 
perfect the socialist market economy system. Sinc e then, China has built up  the framework of the 
socialist market economy system and entere d the new stage of perfecting the system. 
 
II.  RÉGIMEN DE POLITICA COMERCIAL: MARCO Y OBJETIVOS     
1) M ARCO INSTITUCIONAL Y JURÍDICO     
i) Transparencia     
b) Consultas con el sector privado, con inclusió n de los procedimientos de aviso y formulación 
de observaciones     
 
En el párrafo 11  se infiere que de conformidad con la Legi slación relacionada con la transparencia y 
los procedimientos para la formul ación de reglamentos, cuando se el aboran proyectos de reglamentos 
administrativos o de normas de los ministerios del Consejo de Estado y de los gobiernos locales, 
deben recabarse numerosas opiniones de las autoridad es competentes, de otras organizaciones y de los 
ciudadanos, particularmente con respecto a las princi pales cuestiones abordadas en los reglamentos.  
(…) Si el reglamento o las normas están "directamente relacionados con los intereses inmediatos de los ciudadanos, las personas jurídicas u otras organizaciones", (…) la autoridad redactora deber publicar esos reglamentos o normas para que el púb lico pueda formular observaciones sobre ellos;  
también puede celebrar audiencias públicas. WT/TPR/M/264/Add.1 
Page 282 
 
 
    
4. México desea saber si está previsto invitar a la celebración de esas audiencias públicas a los 
inversionistas extranjeros afectados y en su caso que mecanismos se utilizan para transmitir a estos 
inversionistas la fecha, la hora, el lugar y lo s temas propuestos para las audiencias públicas.  
  
Answer:  According to Article 15 of Regulations on Pro cedures of the Rules Formulating, the drafting 
units shall hold the hearings openly and publicize th eir time, location and content 30 days earlier.  If 
foreign investors consider that their interests are related to the administrative regulations, they can 
apply to the organizers of the hearings to particip ate, following the procedures required by the notice 
of the hearings. 
 
En el párrafo 12  las autoridades chinas sealan que se han celebrado "audiencias de expertos" sobre 
todas las leyes y reglamentos relacionados con el comercio en proceso de redacción.  
 5. México está interesado en conocer la par ticipación de los inversionistas extranjeros 
afectados en las consultas, si el público puede cons ultar las actas de las audiencias y cuáles son las 
medidas adoptadas recientemente para mejorar la transparencia respecto a los resultados de estas 
audiencias. 
  
Answer: Regulations for the Disclosure of Governme nt Information of the PRC does not list 
transcripts of hearings as information which administrative organs should release on their own initiative.  According to Article 13 of the Regulati ons, citizens, legal persons  and other organizations 
can go to authorities concerned for government inform ation concerned.  Foreign investors can follow 
the procedures set by the Regulations and apply to authorities concerned for the transcripts of 
hearings.  4) R
ÉGIMEN DE LA INVERSIÓN EXTRANJERA      
i) Evolución reciente de la política de inversión extranjera directa     ii) Marco normativo 
 En el párrafo 44  la Secretaría menciona que las autorida des chinas señalaron que en ciertos sectores 
los inversores extranjeros también pueden tener participación en las empresas controladas por el 
Estado.  México desea saber:    
6. Cuáles son los sectores en los que los inversionistas extranjeros pueden participar?    
7. Cuáles son los requisitos para participar?  
8. Existen límites máximos a la participación ext ranjera? Si la respuesta es afirmativa, cuáles 
son esos límites de participación?  
 
Answer: For questions 6-8, Chinese laws equally treat fo reign-invested enterprises of all ownerships 
and there is no special provision on foreign investment in state-owned enterprises (SOEs).  SASAC 
examines and reviews issues concerning foreign inv estment introduction involved by restructuring 
and reorganization of SOEs mainly in accordance with the Catalogue for the Guidance of Foreign 
Investment Industries promulgated by the NDRC and MOFCOM.  The Catalogue formulates equity 
share restrictions on foreign investors by industry ra ther than enterprises type.  Foreign investors may 
make investments by referring to the above provisions.  
 
El párrafo 45  refiere que la actual Guía para las industr ias con inversión extranjera, que entró en 
vigor el 30 de enero de 2012, recoge en una lista las ramas de producción que clasifican los proyectos 
de inversión extranjera en cuatro categorías.  
9. Podrían las autoridades chinas informar si en el listado de proyectos alentados se incluyen 
reas sectoriales orientadas a la prest ación de servicios medio ambientales?   WT/TPR/M/264/Add.1 
 Page 283 
 
 
   
Answer: According to the Provisions on Guiding the Or ientation of Foreign Investment, foreign 
investment projects under one of following circumstances are listed as encouraged foreign investment 
projects:  projects for new agricultural technolog y and comprehensive agricultural development and 
for industrial construction in energy, transportatio n and key raw materials;  projects of new high 
technology, advanced applicable technology whic h can improve performance of products, save energy 
and raw materials, and increase tech-economic effici ency of enterprise or produce new equipments or 
new materials that meet the demands of the market  but the domestic production capacity is deficient;  
projects that meet the demands of the market, a nd can promote the quality of products, enter into 
emerging markets or improve the international co mpetitiveness of the products;  projects adopting 
new technology and equipments for conservation of energy and raw materials, comprehensive 
utilization of resources and renewable resources, an d for prevention of environment pollution;  and 
projects that can make full use of the man power and resource advantages in the mid-west regions and 
are in accordance with the states industrial policies.  10. Podrían proporcionar el sitio  web oficial donde pueda ser consultado el listado en idioma 
inglés?  
 
Answer: To this day, no official site in English is available.  
 
El párrafo 47  del informe de la Secretaría señala que en general, los proyectos de la categoría 
"alentada" son los que utilizan mejor tecnología y son menos contaminantes, mientras que los 
proyectos "restringidos" y "prohibidos" son los que  utilizan tecnología obsoleta, sobre explotan 
recursos naturales escasos y tienden a dañar el me dio ambiente.  Los límites al capital extranjero 
suelen ser complejos, varían de una rama de producción a otra y no están necesariamente relacionados 
con la categoría. 
 
11. Agradeceremos que China, proporcione deta lles sobre el criterio utilizado para establecer 
los límites al capital extranjero en los secto res de servicios y aclare cuales son las medidas 
adoptadas recientemente para mejorar la clasificac ión de los proyectos de inversión extranjera.  
 Answer: China always attaches great importance to development of services industry and takes a 
positive position on liberalization of trade in services.  
 
On 24 December 2011, the Chinese government issued a revised Catalogue for Guidance of Foreign 
Investment, which has been implemented since 30 January 2012.  This revised Catalogue for 
Guidance of Foreign Investment aims to enlarge the opening-up in services sectors, and encourages 
foreign enterprises to invest in the modern services industry.  For example, it classifies the 
foreign-invested medical institutions and financia l leasing companies into permitted category instead 
of restricted category. 
 
III.  POLITICAS Y PRACTICAS COMERCIALES, POR MEDIDAS      
vi) Medidas comerciales especiales       12. Podría proporcionar una liga donde la legisl ación vigente sobre Antidumping, Salvaguardias 
y medidas compensatorias pue da ser consultada en inglés?  
 Answer: Please refer to http://gpj.mofcom.gov.cn/static/bi/bi.html/1. 
 
13. Cuál es el porcentaje de representatividad mínimo necesario para que se dé inicio a una 
investigación?  WT/TPR/M/264/Add.1 
Page 284 
 
 
  Answer:  About Anti-Dumping and Anti-Subsidy investigati ons, the application shall be considered to 
have been made by or on behalf of the domestic  industry if it is supported by those domestic 
producers whose collective output constitutes more than 50% of the total production of the like 
product produced by that portion of the domestic in dustry expressing either support for or opposition 
to the application.  However, no investigati on shall be initiated when domestic producers expressly 
supporting the application account for less than 25% of total production of the like product produced 
by the domestic industry. 
 
En el párrafo 69 señala que de conformidad con lo s artículos 35 a 37 de las Normas provisionales del 
MOFCOM sobre la iniciación, antes de decidir iniciar una investigación el MOFCOM invitar al 
Gobierno a celebrar consultas para aclarar el asunto y buscar una solución mutuamente aceptable.    
14. Podría proporcionar ejemplos de soluciones acordadas?  
 Answer: Currently, China has launched four anti-subsid y investigations against other countries. 
Before the four investigations were put on file, Chinese investigators invited governments of countries 
concerned to negotiate.  
 
vii) Normas y otras prescripciones técnicas     
a) Normas y reglamentos técnicos     
 15. Podría proporcionar una liga donde la legislación vigente pueda ser consultada en inglés? 
 
Answer: The English version of basic information for national standards can be found at the SAC 
website.  
En el párrafo 85 señala que existen cuatro niveles de normas en China (nacional, comercial, local y 
empresarial)   
16. Los 4 niveles de norma son notificados a la OMC?  
 
Answer: Currently, compulsory national standards are notified to the WTO.  SAC is not involved in 
the submiting procedure of trade, and local standards, thus no data is available.  
 
17. Existe una base de datos en inglés donde puedan consultarse dichas normas?  
 Answer:  The English version of basic information fo r national standards can be found at the SAC 
website.  
 
Párrafo 96. Reconocimie nto de laboratorios  
 
18. Cuenta China con reconocimiento de  laboratorios fuera de su territorio?   
19. Qué se necesita para solicitar dicho reconocimiento?   
 
Answer:  At present, China cannot designate overseas labs as 3C-designated labs by following 
Chinese laws and regulations, taking into account of difficulties in tracing responsibilities and 
practices in EU.  EU labs have been widely partic ipating in 3C certification via multilateral/bilateral 
channels. 
 
20. China reconoce como equivalentes los reglame ntos técnicos de otros pases?  En caso 
afirmativo, favor de dar ejemplos.   
  WT/TPR/M/264/Add.1 
 Page 285 
 
 
  Answer:  At the multilateral level, CNCA, on behalf of  China, joins a multilateral recognition systems 
and commits to recognize testing results that are under the mutual reorganization scheme.  For 
example, China is a formal member of IECEE CB and participates in the recognition plan over 
12 categories (which cover all electric and electr onic products under 3C scheme), and China is among 
the members that joined the most recognition pl ans in IECEE CB.  All IECEE CB testing reports 
issued by foreign labs will be recognized under 3C scheme.  At the bilateral level, the Regulations on Certif ication and Accreditation of PRC stipulates that 
international mutual recognitions  shall be conducted under the frame work signed between CNCA or 
authorized organs of the State Council and forei gn counterparts.  Following the above, CNCA signed 
MOUs with 11 foreign counterparts, and China si gned Mutual Recognition Agreement in Testing and 
Certification with New Zealand.  Foreign testing/ certification bodies can cooperate with domestic 3C 
certifying bodies in line with agreements/MOUs si gned to accept and recognized each other's results.  
 
c) Medidas Sanitarias y Fitosanitarias   
En el párrafo 102 menciona China que en el Co mité de Medidas Sanitarias y Fitosanitarias de la 
OMC, otros Miembros han manifestado preocupaci ones comerciales respecto de medidas adoptadas 
por China.  En relación con la preocupación específica manifestada por México sobre la regulación 
sanitaria GB 2757 XXXX que regula los niveles de Metanol de diversas bebidas alcohólicas entre 
ellas del Tequila mexicano indicar:  
21. Cuándo se adoptó y a través de qué instrume nto la legislación sanitaria de referencia?   
22. Cuál es el nivel de Metanol aplicabl e al Tequila que impone dicha regulación?   
23. Cuáles son los argumentos científicos que se tomaron como base para limitar el nivel de 
Metanol en las bebidas alcohólic as, específicamente del Tequila?   
24. Se ha realizado un análisis de riesgo que apo ye la imposición del límite de niveles de 
Metanol del Tequila en dicha regulación sanitaria?   
25. Prevé dicha regulación otorgar  un periodo de transición para aplicar a los Miembros su 
regulación sanitaria, y en su caso cuál es el periodo?   
 Answer: (21-25) The Ministry of Health has been communicating with Mexi can Embassy in China 
about the Hygiene Standard for Distilled Spirits.  Th e Ministry of Health reiterated many times the 
reason why we set up methanol limit and Mexico has expressed it understanding.  Mexican Embassy 
in China has organized enterprises to apply for the importation of food without national food safety 
standard with National Center for Health Inspection and Supervision.  It will allow the importation of 
the product after the examination of the applica tion.  We are preparing the notification of The 
Hygiene Standard for Distilled Spirits and Integrated  Alcoholic Beverages to the WTO.  There will be 
6-month transitional period. 
 
2) M
EDIDAS QUE AFECTAN DIRECTAMENTE A LAS EXPORTACIONES      
ii) Subvenciones a la exportación      
 26. Does this statement cover any type of financial contribution?   
 
Answer: Please specify what the statement means. 
 
27. How do you make sure that provincial authorities are not granting prohibited export 
subsidies?  
 
Answer: The subsidy policies made by local goverments s hould be consistent with the policies made 
by central goverment.  Chinese goverment is studyi ng the issue of subsidy notification of local 
goverments, and China will accelerate its efforts for it. WT/TPR/M/264/Add.1 
Page 286 
 
 
   
iii) Impuestos a la exportación 
 
28. In light of the Appellate Body findings that  export tariffs are prohibited and not justifiable 
under any exception, will China modify its policies?   
 
Answer: China will evaluate WTO's decision on raw materi al seriously, and continue to administrate 
resource products in accordance with WTO rul es, to realize sustainable development. 
 
vi) Prohibiciones, restricciones y régimen de licencias de exportación      
 29. In light of the AB findings in the raw mat erials case, will China modify its current practices?    
 
Answer:  China has expressed its intention to implement the WTO ruling in DBS meeting.  China will 
evaluate WTO's decision on raw material seriously, a nd continue to administrate resource products in 
accordance with WTO rules, to realize sustainable development.  
ii) Subvenciones y otras ayudas gubernamentales      
 
30. Is China making any additional effort to provide us with more information on subsidies and 
other government assistance?    
 
Answer: Use of subsidies and other government assistance is an important feature in trade policies of 
many WTO Members.  Subsidy notification entails  huge amount of work on information gathering 
and analysis and this is particularly a challenge fo r China as a large developing country.  To fulfill its 
notification obligation under the SCM Agreement systematically, China since its WTO accession has 
concentrated its efforts on notifying comprehensively central programs as a first step, and would then 
extend its efforts and experiences to cover those at  the sub-central level.  Now that substantial 
progress has been made in fulfilling th e transparency obligation of the subsidies at the central level, 
China will work towards incorporatin g local subsidies in its future notifications.  As to the 2009-2011 
notification, it will not be too difficult if covering only central programs.  However, if local programs 
are to be incorporated, it will be a different case.   In any case, China will accelerate its efforts for a 
new notification.  
iv) Controles de precios      
 
31. Se ha estimado si el mecanismo de control de precios descrito en el párrafo 214 distorsiona 
la eficiencia de los mercados mencionados?  
 
Answer: After years of market-oriented reform of price,  the prices of more than 95% of commodities 
and services are now market-regulated in China, which means that the basic role of market 
mechanism in the allocation of resources has b een brought into full play.  The government only 
guides or fixes the prices for the following co mmodities and services:  a very small number of 
commodities that have a vital bearing on the development of the national economy and the well-being of the people;  a small number of commodities for which resources are scarce;  commodities placed 
under natural monopoly;  important public utilities; a nd important public welfare services.  Basically, 
government regulation of prices reflects domestic production cost and market supply and demand.  
This mechanism is similar to that of other mark et economies, combining the requirements of market 
economy and the efficiency of the market.  
v) Empresas estatales, empresas privadas y gestión empresarial      
  WT/TPR/M/264/Add.1 
 Page 287 
 
 
  El párrafo 222  habla de la reforma de las empresas estatales y menciona que algunas empresas 
estatales se constituyeron en sociedad es o pasaron a cotizarse en bolsa.  
 
32. México desea saber cuáles son los requis itos para que la inversión privada, incluida la 
extranjera, pueda participar en el capital de  esas empresas, toda vez que La SASAC se propone 
diversificar la estructura de propiedad de las em presas estatales que no cumplan los requisitos 
necesarios para la cotización en bolsa. 
 Answer: The investment access of FIEs and foreign i nvestors shall comply with the Guideline 
Catalogue of Foreign Investment Industries and other related provisi ons.  The Some Opinions of the 
State Council on Encouraging and Guiding the Soun d Development of Private Investments (Guo Fa 
[2010] No. 13) promulgated in May 2010 is applicab le to private investme nts.  The Rules on the 
Definition and Statistics Scope of Private Fixed- Assets Investments promulgated by the National 
Bureau of Statistics in January 2012 stipulates that private fixed-asset investments refer to 
investments in construction or purchase of fixed as sets by collectively, privately or individually-
owned domestic enterprises and public institutions  as well as their holding enterprises and units 
within the territory of China.  En el párrafo 225 señala que la NDRC, en cola boración con la SASAC, presta su apoyo a las 
empresas líderes nacionales. 
 
33. Se ha estimado el efecto que tiene en los p recios de los bienes o servicios apoyar a firmas 
dominantes?  
 
Answer: The support for the development of SOEs is substantiated with i ndustrial policies which 
guide them to participate actively in the market  competition and raise their competitiveness.  The 
support for SOEs will not bring harm to the market -regulated price mechanism.  Commodity prices 
are formed through full competition in the market. 
 
vi) Política de competencia y protección de los consumidores 
Política de competencia 
 34. Se ha considerado reducir la tasa promedio  arancelaria NMF para incentivar la entrada de 
productos importados que generen mayor competencia en el mercado interno?   
 
Answer: There is no such plan now. 
 
35. Cuáles son los mecanismos de cooperación tr ansfronterizos tienen las agencias que vigilan el 
proceso de competencia en China?   
 
Answer: Since the implementation of the Anti-Monopoly La w, China has started close exchanges and 
cooperation with anti-monopoly law enforcement agencies of other nations and regions in the form of 
exchange visits, holding seminars jointly, participa tion in relevant interna tional meetings and signing 
MOUs.  Currently, National Development and Re form Committee, Ministry of Commerce and 
General Agency of Administration for Industr y and Commerce have signed anti-monopoly MOUs 
with the United States Department of Justice a nd Federal Trade Commission; National Development 
and Reform Commission has signed anti-monopoly MOUs with the Office of Fair Trading of UK and 
South Korea Fair Trade Commission. Negotia tions are under way with anti-monopoly law 
enforcement agencies of EU, Japan and ot her nations and regions to discuss MOUs. 
 
36. Qué limitantes tiene la legislación en mat eria de competencia en China para sancionar 
cárteles internacionales que afecten sus mercados?   
 WT/TPR/M/264/Add.1 
Page 288 
 
 
  Answer: Please refer to http://fldj.mofcom.gov.cn/ 
 
37. Cómo se determina en la práctica que una empresa tiene posición dominante? Qué tipo de 
evidencia puede ser utilizada para demostrarlo?   
Answer: Refer to Article 18 and 19 of Anti-monopoly Law of the People's Republic of China. 
 
38. Tienen las autoridades de competencia atri buciones para implementar visitas de verificación 
sorpresivas?   
 
Answer: For Article 39 of Anti-monopoly Law of the People's Republic of China.  When conducting 
investigations, the antimonopoly execution authorities can  take the following measures, (i) enter the 
premise or other related places of the undertakings being investigated;  (ii) request the undertaking 
concerned, interested parties and ot her relevant organizations or pers ons being investigated to explain 
related circumstances;  (iii) exam, copy rela ted documents and materials of the undertakings, 
interested parties and other releva nt organizations or persons being investigated, such as certificates, 
agreements, accounting books, letters and telegraphs of business, electronic data and so on;  (iv) seal 
up or detain related proofs;  (v) inquire about the bank account information of the undertakings 
concerned.  Taking the measures stipulated above, sha ll be reported in written form to the chef person 
in charge of the antimonopoly execution authorities, and be approved. 
 
39. Se ha considerado introducir  sanciones más severas (inclu yendo sanciones penales) como 
medida para disuadir acuerdos horizontales anticom petitivos (fijar precios, limitar la producción, 
coordinar posturas o abstenerse de participar en licitaciones públicas, y segmentar mercados)?   
 
Answer: In case there exists monopoly agreement and is implemented by the undertakings in 
violation of this law, the antimonopoly execution authorities shall order the undertakings to cease such act, the illegal gains shall be confiscated, and a fine between 1% and 10% of the turnover in the 
preceding year shall be imposed;  If the monopoly agreement is not implemented, a fine below 
500,000 Yuan shall be imposed. 
 
The antimonopoly execution authorities shall consider the nature, degree and time of duration of the 
violation, to decide concrete amount of fine.  
40. Existe un programa de clemencia para age ntes económicos/asociaciones industriales que 
denuncien su participación en cárteles?   
 
Answer:  Refer to Article 45 and 46 of Anti-monopol y Law of the People's Republic of China . 
 
41. Cómo es el proceso de revisión judicial sob re las decisiones de la au toridad de competencia?    
 
Answer: According to the provisions of Law of the People's Republic of China on Administrative 
Penalty, before deciding to impose administrative penalties, administrative organs shall notify the 
parties of the facts, grounds and basis according to which the administrative penalties are to be 
decided on and shall notify the parties of the right s that they enjoy in acco rdance with law.  An 
administrative organ, before making a decision on administrative penalty that involves ordering for 
suspension of production or business, rescission of business permit or license or imposition of a 
comparatively large amount of fine, shall notify the part y that he has the right to request a hearing; if 
the party request a hearing, the administrative organ shall arrange for the hearing.  Before imposing a 
heavier administrative penalty for an illegal act which is of a complicated or grave nature, the leading 
members of an administrative organ shall make a collective decision through discussion 
  WT/TPR/M/264/Add.1 
 Page 289 
 
 
  42. Se ha determinado si los mec anismos de asignación de contrato s públicos previenen colusión 
entre competidores al considerar elementos facilitadores como: ofertas  conjuntas sin restricciones;  
frecuencia y fragmentación de las licitaciones;  publicac ión de posturas;  precios de referencia altos;  
restricción a posturas extranjeras?  
 
Answer: According to Article 2 of Anti-monopoly Law of the People's Republic of China,  the 
monopolistic conducts in economic activities within the Peoples Republic of China, and the conducts 
outside the territory of the Peoples Republic of China if they eliminate or have restrictive effect on 
competition on the domestic market of  the PRC, should be under the  Anti-monopoly Law of the 
People's Republic of China.  
 
En relación a los acuerdos monopolísticos (párrafo 249) 
 
43. Cómo se determina que un intercambio de información entre competidores es legítimo/debe 
ser sancionado?   
 
Answer: According to Article 13 of Anti-monopoly La w of the People's Republic of China, any 
following agreements among the undertakings competed with each other shall be prohibited:  (i) fix, 
or change prices of products;  (ii) limit the outp ut or sales of the products;  (iii) allocate the sales 
markets or the raw material purchasing markets;  (iv) limit the purchase new technology or new 
facilities, or the development of, new products or ne w technology;  (v) jointly boycott transactions;  
(vi) other agreements identified by antimonopoly execution authorities.  Sobre monopolios administrativos descritos en el párrafo 253, 
 
44. Cómo funciona el proceso de revisión judicial  en casos en los que se investiga a autoridades 
gubernamentales?   
 
Answer:  Refer to Article 51 of Anti-monopoly La w of the People's Republic of China.  
 
45. Cuáles son las principales labores de abogada implementadas por las autoridades de 
competencia de China para promover la po lítica de competencia entre sus autoridades 
gubernamentales? 
 
Answer: The State council has set up the Anti-Monopoly Commission which is in charge of 
organizing, coordinating and guiding the anti-monopoly work.  The Ministry of Commerce is in 
charge of the Commissions day-to-day operation.  Each year, the Ministry of Commerce and other anti-monopoly law enforcement agencies organize Anti-Monopoly Law promotion and training activities, i nviting relevant authorities to participate in 
order to raise the law awareness of government agen cies in the field of anti-monopoly.  Currently, 
China's efforts concerning anti-monopoly law enforc ement have been widely recognized in the 
international community and become one of the most important anti-monopoly jurisdictions in the 
world. 
 
Protección al consumidor  
 
46. El apartado (vi Política de competencia y prot ección de los consumidores) del capítulo III no 
desarrolla nada sobre la política pública de protecci ón al consumidor.  Cuál  es la razón de ello?   
 
Answer: China is still in coordination with relevant ag encies to provide response to this question.  
 WT/TPR/M/264/Add.1 
Page 290 
 
 
  47. El reporte se refiere a lo s planes de expandir el consumo in terno a través de estímulos al 
consumo.  En este escenario, qué medidas prevé el gobierno chino para fortalecer a las autoridades 
de protección al consumidor ante la  posibilidad de incrementos en las violaciones a los derechos de 
los consumidores por parte de los proveedores?   
 
Answer: China is still in coordination with relevant ag encies to provide response to this question.  
 
48. China comenzó a instrumentar un programa de  mejora en la calidad de los productos a ser 
exportados.  Este país ha jugado un papel importante en los recientes retiros de productos que no 
eran seguros para el consumidor.  Qué medidas se adoptarán a fin de mejorar sustancialmente la 
seguridad de los productos a fin de salvaguardar la sa lud y la vida de los consumidores chinos y los 
del resto del mundo?   
 
Answer:  China is still in coordination with relevant ag encies to provide response to this question.  
 49. Cuál es el papel que juegan las autoridades de  protección al consumidor en el desarrollo de 
estándares técnicos y obligatorios, as como en el proceso de certificación de los productos? 
  
Answer:  (48-49) According to the Food Safety La w of People's Republic of China and its 
implementation regulations, the competent authoriti es are systematizing food standards, and in the 
process of defining the standards, the competent authorities should take seriously the opinions of consumers and consumer protection agencies and i nvite public comments in standard planning, 
project planning and drafting.  When drafting the 12
th Five Year Plan for National Standards on Food 
Safety, the competent authorities have invited China Consumers Association to participate in drafting 
and issued a written request for comments.  The aforementioned measures have fully ensured the 
consumers right to know, to pa rticipate and to supervise. 
 
vii) Derechos de propiedad intelectual (DPI)      
 
En la estrategia nacional para el combate a la pira tera y la coordinación con las agencias nacionales  
 50. Cuál es el papel que el gobi erno chino considera deben jugar los consumidores en el combate 
a la piratera y las violaciones a los derechos de propiedad intelectual? 
 
Answer:  In cracking down on piracies and other cases related to IPR infringe ments, consumers are 
playing a critical role.  If customers are of str ong IPR awareness and reject piracies and other IPR 
infringing products, the acts of IPR infringements w ill be checked once and for all, otherwise, the 
judicial punishments, no matter how strict they are,  will not stop the risk takers from taking actions. 
China adopts various means to popularize the IPR -related knowledge relate d to consumers, and 
prescribes in the laws that anybody may, in case of discovering infringements on trademarks, report or 
lodge complaint to the industrial and administrative authority. 
 
4) S
ECTOR MANUFACTURERO      
ii) Subsectores seleccionado      
 51. Will China continue with its effort to reduce production capacity?   
 Answer: China's determination to crack down on IP R infringements and the acts of manufacturing 
and selling counterfeit and substanda rd commodities is beyond doubt. 
 
52. If this effort is real, why is th e production capacity in a continuing rise?  
  WT/TPR/M/264/Add.1 
 Page 291 
 
 
  Answer: Seen from the suspected criminal cases of IPR infringements and manufacturing and selling 
counterfeit and shoddy goods investigated and handl ed by the public security authorities from January 
to April 2012, the number of such cases was drasti cally reduced compared with that of the cases 
handled during the special campaign launched fro m October 2010 to June 2011 in terms of the 
number of enterprises reporting the cases and the aver age amount of money involved in the cases.  
This shows that the lawbreakers receive heavy blow  in their capabilities of infringing upon IPR or 
manufacturing and selling counterfe it and shoddy goods and other law- breaking acts.  It must be 
pointed out that, however, with the development of  science and technology, the law-breakers are 
engaged in more diversified and co mplex illegal acts, so we must intensify our efforts to crack down 
on law-breaking acts, and maintain high pressure on fighting against the acts of manufacturing and 
selling counterfeit and shoddy commodities. 
 
5) S ERVICIOS      
i) Panorama general      
 
En el párrafo 95  del Informe de la Secretaría, por ejemplo, señala que el Gobierno chino aplica una 
política general de apertura gradual, progresiva y administrada, con miras a promover el desarrollo 
mediante una estrategia que redunde  en beneficio de los proveedores de servicios tanto nacionales 
como extranjeros.  Sin embargo, observamos que el informe del Gobierno chino menciona que se han 
propuesto una serie de directrices y medidas orientadas al desarrollo de sectores específicos tales 
como los servicios médicos, servicios de alta tecnología, servicios de ahorro de energía, logística, servicios de contabilidad, servicios de limpieza, comerc io electrónico, transporte fluvial, etc. (párrafo 
28, página 11 del reporte  presentado por China).  
 
53. Tomando en cuenta la importancia de los servi cios en la economía de China, qué estrategia 
tiene China para acelerar el desa rrollo y el acceso al mercado de otros sectores de servicios, tales 
como la educación, los servicios jurídicos y los servicios de minera?   
 
Answer: In the year of 2010, China has signed the Agreement of Mutually Recognition of 
Qualifications Diplomas and Degrees for Students Fu rther Study with Mexico and the Agreement of 
Mutually Recognition of Qualifications and Degrees of  Higher Education with Latvia.  So far, China 
has signed mutual recognition of academic degrees agreements with 38 countries or regions, as well 
as the regional conventions with other Asia and Pacific regions on recognizing the qualifications, 
diplomas and degrees of higher education with 19 countries including Australia, Indonesia, South 
Korea and Russia.  These agreements would play an important role in promoting services trade 
liberalization and creating new market access in many services sectors in the future. 
 
ii) Servicios financieros   
a) Sistema bancario/Bancos extranjeros 
 
En el párrafo 120  se hace referencia a que los bancos financiados exclusivamente con capital 
extranjero y los bancos conjuntos chinos y ex tranjeros pueden realizar las mismas operaciones 
comerciales que los bancos comerciales chinos, tanto en moneda nacional como en divisas.  Sin embargo, las sucursales de bancos extranjeros no pu eden emitir tarjetas bancarias;  las autoridades 
sostienen que estas restricciones se han adoptado por motivos cautelare s y consideran que son práctica 
habitual en muchos otros pases.  Las sucursales de bancos extranjeros solamente pueden recibir 
depósitos a plazo no inferiores a 1 millón de yuanes cada uno de ciudadanos chinos dentro de China 
(…). 
 
54. Teniendo en cuenta este tipo de restriccion es para las sucursales de bancos extranjeros, 
México esta interesado en conocer cual es la política de China para alentar a los bancos de capital 
extranjero para establecerse y poner en marcha sus negoc ios en la parte central y occidental de 
China.   WT/TPR/M/264/Add.1 
Page 292 
 
 
   
Answer: In principle, the Chinese Government encourages foreign banks to operate in the central and 
western regions of China, and the specific supporting policies are still under formulation. 
 
vi) Servicios relacionados con el medio ambiente      
a) Estructura del mercado      
 
Párrafo 314 . El reporte de la Secretaría sugiere que debido al crecimiento de este mercado el 
Gobierno realice grandes inversiones en el periodo entre 2011-2015 (…), y que aplique (para los 
servicios ambientales en general) una política destin ada a atraer inversores privados y extranjeros con 
el fin de diversificar el tipo de operador, promove r la conversión en servici os de mercado e importar 
las tecnologías más avanzadas.    
55. En qué subsectores y en qué modalidades se permitir la partic ipación de capital extranjero 
en servicios relacionados con el medio ambiente?   
 
Answer: China has made substantial commitments in ma ny sub-sectors of the environmental services 
sector, only excluding environmental quality monito ring and pollution source inspection services.  
Under Mode 3, foreign services suppliers are pe rmitted to provide services in the form of joint 
ventures, with foreign majority ownership permitted.  
 The revised Catalogue for Guidance of Foreign I nvestment classifies some environmental services 
items into the encouraged category, including the manufacturing of solid waste disposal equipments 
and the manufacturing of water pollution prevention and control equipment, and the construction and 
operation of waste water and solid waste disposal factories.  
Párrafo 319 . De acuerdo con el informe de la Secretar ía, según los compromisos contrados por China 
en la OMC, en el modo 3 (presencia comercial), lo s proveedores extranjeros sólo pueden participar en 
servicios ambientales en forma de empresas conjunt as, aunque el inversor extranjero puede poseer 
una participacin mayoritaria.  En la práctica, ya hay empresas de propiedad exclusivamente extranjera 
que se dedican a los servicios de evaluación del impacto ambiental.  
 
56. México desea saber si dentro de la po lítica general de apertura gradual de China se 
encuentra previsto permitir que empresas de propie dad totalmente extranjera (titularidad exclusiva) 
participen en otros subsectores y en su caso, en qué subsect ores se les permitir participar.   
 Answer: China is in the process of open its environmenta l services gradually.  In fact, in addition to 
environmental impact assessment services, the waste water disposal service is also open to the wholly 
foreign owned enterprises.  Furthermore, in th e FTA between China and ASEAN, China has made 
further commitments in environmental services.  For example, wholly foreign owned enterprises are 
permitted under Mode 3. 
 
With regard to other services sectors, the revised Catalogue for Guidance of Foreign Investment has 
shown the tendency that China will further open up in the services industry.   MEXICO - SECOND SET 
 
Propiedad intelectual:     
 
1. De conformidad con el párrafo 275, podría comentar de que manera serán evaluados los 
resultados de la Estrategia Nacional de Propiedad Intelectual?  
  WT/TPR/M/264/Add.1 
 Page 293 
 
 
  Answer:  The assessment of the implementation results of national IPR strategy mainly focuses on 
whether the results meet the requirements and object ives set in the Outline of the National Intellectual 
Property Strategy.  Please login the webs ite at http://www.gov.cn/zwgk/2008-06/10/ 
content_1012269.htm for the full text of the Outline. 
 
2. De acuerdo con la experiencia de China, p odría enlistar los beneficios obtenidos de la 
utilización de Sistema de Madrid en el registro internacional de marcas. 
 
Answer:  Since 2005, China has been the country with the largest number of applications designating 
that country for territorial extension under the Ma drid International Trademark Registration System.  
Under this system, China has been one of the top countries in terms of the number of applications 
submitted by that country's enterprises, and it is al so the developing country with the largest number 
of applications.  The Madrid international tr ademark registration not only facilitates foreign 
enterprises' entry into China's ma rket, but also greatly facilitat es Chinese enterpri ses' access into 
international markets.  It plays a positive role  in promoting the rapid and sound development of 
China's economy.  
3. De acuerdo con lo señalado en el párrafo 287, cuál es el argumento legal que respalda la 
realización del llamado examen de confidencialidad en  la solicitud de patente y como se determina el 
denominado contenido sustancial?   
 
Answer: The confidentiality examination is conducted according to Article 4 and 20 of the Patent 
Law and Article 7 and 8 of the Implementa tion Regulations of the Patent Law.  
 
4. Qué es lo que debe entenderse por emergencia  nacional, situación extraordinaria o situación 
de interés público, en los casos en que sea concedida una licencia obligatoria.  
 
Answer: Article 31(b) of TRIPS reads ...This requirement may be waived by a Member in the case of 
national emergency or other circumstances of ex treme urgency or in cases of public non-commercial 
use.  The provisions in Article 49 of Patent Law is consistent with TRIPS.   5. Según lo que se menciona en el párrafo 302, cuales son los elementos que la Junta de Apelación considera para determ inar un registro abusivo.  
 
Answer:  In reviewing a case, the trademark review  and adjudication board will, based on the 
evidences provided by the applicant, determine th at a trademark registration constitutes "bad-faith 
registration" if such registration conforms to any situation defined in the Articles 13, 15 and 31 of the 
currently effective Law of Trademark.  Such dete rmination will be based on many elements, such as 
the "degree of being known" of the preemptively registered trademark, the relationship of the 
domicile of the registrant and that of the preemptiv ely registered trademark, the relationship between 
the registrant of the trademark and the right holder  of the preemptively registered trademark, whether 
the trademark applied for registration and the pr eemptively registered trademark constitute the 
consumer confusion, the association between the u se of the product whose trademark is applied for 
registration and the use of the product whose trademark is preemptively registered.  
Compras de gobierno:     
 
1. Respecto al párrafo 115 del Reporte de la Secretaría, podría aclarar si el Catálogo de 
Contratación Centralizada (Centralized Procurem ent Catalogue) es público? De ser as, dónde se 
puede consultar?  
 
Answer:  The content of China's Centralized Procur ement Catalogue is public, please refer to 
www.ccgp.gov.cn.all.  All the provincial govern ments have established local government WT/TPR/M/264/Add.1 
Page 294 
 
 
  procurement website, and have real ized the inter-connection with th e central government procurement 
website.  
2. Podría explicar cuáles son los criterios para  incluir bienes, proyectos y servicios en el 
Catálogo de Contratación Centralizada?  
 
Answer:  In Accordance with the Government Proc urement Law of People's Republic of China.  
 3. Dónde se pueden consultar los umbrales par a las contrataciones descentralizadas referidas 
en el párrafo 115 del Reporte de la Secretaría?   
 
Answer: Please refer to http://www.ggj.gov.cn/ . 
 
4. Podrá mencionar el marco normativo que re gula las contrataciones de las Empresas del 
Estado (SOEs) en China?   
 
Answer:  There are no similar regulations about it. 
 
5. Respecto al párrafo 118 del Reporte de la Secretaría, podría señalar las condiciones bajo las 
cuales los oferentes extranjeros pueden participar en el  sistema de contratación pública de China?   
 
Answer:  China has not been a party of GPA, and there are no related regulations about that. 
 
6. En relación con el párrafo 123 del Reporte de la Secretaría, podría enumerar los medios 
designados por el Ministerio de Finanzas para anunciar convocatorias de contratación pública? 
 
Answer:  The Ministry of Finance specifies www.ccgp.go v.cn as the official website for government 
procurement information publishing.  All the pr ovincial government has established the local 
government procurement website, and to realize the inter-connection with the central government. 
 7. También sobre el párrafo 123, cuáles son las sanciones previstas por el gobierno de China en 
caso de detectar un trato discriminator io contra los oferentes extranjeros?  
 
Answer:  China has not been a party of GPA, and there are no related regulations about that. 
 8. Existe un sistema electrónico de contratación pública en China?  En caso de no haberlo, qué 
planes existen para implementarlo?   
 
Answer:  The electronic system of  Government Procurement in China has realized some functions; 
however, the system is still under establishment.  
 
NEW ZEALAND 
 PART 1: QUESTIONS REGARDING THE SECRETARIAT REPORT 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) Measures Directly Affecting Imports (i) Customs procedures, valuation, and rules of origin 
 
WT/TPR/S/264 Page 25, para 6 
  WT/TPR/M/264/Add.1 
 Page 295 
 
 
  Section III, paragraph 6 of the Secretariat report st ates that in 2010, the average time for customs 
clearance for imports was longer (15.5 hours) than in 2008 (14.1 hours).    Question: 
 1. Can China explain why the clea rance times are increasing and what systems are being put in 
place to increase the efficien cy of customs clearance? 
 
Answer:  China's import facilitation measures include: 
 (a) Strengthen cooperation with the Customs of ot her countries in mutual recognition of Customs 
control, law enforcement mutual aid and exchange  of information, to facilitate enterprises and 
goods entering each other's markets. 
(b) Further promote the large-scale simplification of  Customs clearance procedures, give full play 
to the role of the E-Port, strengthen ties and coordination with the por t inspection departments 
and the relevant domestic govern ment departments, improve the efficiency of the port 
clearance. 
(c) Further deepen partnership with the bus iness community, enhance corporate compliance 
administration, and facilitate Customs clearance of the high credit enterprises. 
(d) Implement the reform regarding classifi cation for imported and exported goods and the 
paperless clearance reform, implement Custom s clearance facilitation measures, optimize 
customs processes, simplify clearance procedures. 
 WT/TPR/S/264 Page 25, para 7    257 
 
Section III, paragraph 7 of the Secretariat report notes that China Customs is promoting cooperation 
with the customs authorities in China's FTA partners , mainly in electronic networking with regard to 
preferential certificates of origin, and customs da ta exchange system, with the European and the 
Russian Customs, respectively.   Question: 
 2. What have been China's experiences in electr onic networking with regard to preferential 
certificates of origin, and customs data exchange system?  
Answer:  Currently, China Customs exchanges electronic da ta with regard to CEPA certificates of 
origin and ECFA certificate of origin with the Hong Kong and Macao Special Administrative 
Regions, Chinese Taipei and other relevant departments.   Only the contents of the certificate of origin 
are required to be electronized, the manual or electroni c signature of the exporter is not required.  No 
such requirement is imposed on the Customs data exchange between China and the European Union 
& Russia either. 
 
(iii)  Indirect taxes affecting imports   
 
WT/TPR/S/264 Page 33, para 34  
 
Section III, paragraph 34 of the Secretariat report states that current VAT rates are 17% or 13% for 
most goods.   
Question: 
 WT/TPR/M/264/Add.1 
Page 296 
 
 
  3. Could China please provide information on why the divergence in VAT rates between 13% 
and 17% exists, and, in particular, the reasons behi nd the divergence of rates for raw and processed 
agricultural products?  
 Answer:  13% VAT falls ultimately on consumers.  Most roughly processed agricultural products 
including fresh agricultural products are consumed by people for their daily life.  As a result, a lower 
VAT rate (13%) for these products will help reduce peoples living burdens.    (vii) Standards and other technical requirements 
 
WT/TPR/S/264 Page 51, para 124 
 Section III, paragraph 104 of the Secretariat re port states that the Catalogue of Entry-Exit 
Commodities Inspected and Quarantined by Entry- Exit Inspection and Quarantine Organs covers 
goods subject to inspection and quarantine, incl uding processed food and beverages as well as 
semi-processed products and raw materials and foods, such as meat and vegetables.  
 
Question: 
 
4. Could China please provide information on what the process is for determining which 
products undergo entry-exit inspection, and provide so me examples of products not in the Catalogue 
that can be subject to spot checks?   
Answer:  A product is corresponding to a single product c ode during inspection.  If the product code 
is listed in The Catalogue of Entry-Exit Commod ities Inspected and Quarantined by Entry-Exit 
Inspection and Quarantine Organs, the corresponding product needs to be inspected and quarantined.  
According to the product code listed in different  categories of inspection and quarantine in the 
Catalogue, a product can be subjected to diffe rent regulatory inspections, such as Commodity 
Inspection, Plant or Animal and Its Oriented Product Inspection, Food Hygiene Supervision and 
Inspection, Sanitary Inspection and Co mmodity Entry Validation Inspection. 
 
According to Article 4.2 of the Regulations fo r the Implementation of the Commodity Inspection 
Law, Entry-Exit Inspection and Quarantine Orga ns perform random inspection to entry-exit 
commodities outside of statutory inspection based on state regulations.  In 2012, Entry-Exit Inspection 
and Quarantine Organs will perform entry-exit inspec tion to 74 product codes within 4 categories.  
For example, we perform random entry inspecti on to product of code 6104 42000 cotton, knitted or 
crocheted dress and 4413000000 lamina ted wood; perform random exit in spection to product of code 
2917320000 dioctylphthalate and 84146010 range hood (re fers to the cover with maximum horizontal 
side length not exceeding 120cm, with a fan).  
(2) Measures Directly Affecting Exports 
(iii) Export Taxes 
 
WT/TPR/S/264 Page 58, para 137-141 
 
Section III, paragraph 136 of the Secretariat repor t notes that China has eliminated export duties on 
17 tariff lines from January 2010, and reduced interi m export duty rates on 21 tariff lines, including 
for some fertilizer products.  New Zealand welcom es both the elimination of export duties by China 
and the reduction of interim rates.   
Question: 
  WT/TPR/M/264/Add.1 
 Page 297 
 
 
  5. Would China be able to provide informati on on the criteria for adjusting special export 
duties, including seasonal duties, from time to time,  and adjusting the list of commodities affected by 
such measures, as mentioned in paragra ph 140 of the of Secretariat report?  
 Answer:  Special export duties are formulated in accordance with Article 4 of the  Regulations of 
Import and Export Duties of PRC.  For its scope of application, please refer to the Notice of the State Councils Commission of Customs Duties on Implementation Plan of Customs Duties 2012.   IV. TRADE POLICIES AND PRACTICES BY SECTOR (2) Fisheries (i) Fisheries in China 
 
WT/TPR/S/264 Page 111, para 49   
Section IV, paragraph 49 of the Secretariat report provides details on a range of fishing data.   
 
Question: 
 6. Can China provide an update on progress toward its plan to reduce the number of vessels?  
What policies does China have in pla ce to move toward this target?   
 
Answer:  In November 2003, the Ministry of Agriculture laid down the "Opinions on the 
Implementation of Marine Fishing Vessel Re duction System from 2003 to 2010".  There are 
three specific measures.  First, it requires the coastal local governments to make plans on the 
reduction of the number of fishing vessels and the power in accordance with the "dual control" 
indicators issued by the state, to strengthen the administration in fishing vessel building approval, 
inspection, registration, licensing and other aspects, and to implement the "fishing vessel inspection regulations" and fishing vessel decommissioning system.  Second, it requires the coastal local 
governments to implement the regulations on fishing li cense issuers and is sue fishing licen ses in strict 
accordance with the "provisions on the administra tion of fishing license".  Third, it requires the 
coastal local governments to vigorously promote the process of fishermen job transfer.  At present, 
thanks to the efforts of the central government a nd local governments at different levels, the number 
of Chinese marine fishing vessels is reduced gradually.  
(ii) Fisheries Policy 
 
WT/TPR/S/264 Page 113, para 56  
 Section IV, paragraph 56 of the Secretariat's re port refers to the 2006 Action Plan to encourage 
oceanic and transoceanic fishing.  Question: 
 7. Can China provide details on measures ta ken under the 2006 Action Plan to speed up the 
development of distant water fishing?  
Answer:  First, China joined all high seas regional fisheries management organizations, participates in 
the assessment of the rational use of high seas fisher ies resources and the development of the quota 
plan of high seas fishery resources, to ensure that the maximum reasonable catch is not exceeded.  Second, to ensure the strict implementation of th e fisheries management regulations of the regional 
fisheries organizations, China has invested a lot of manpower, material and financial resources to 
improve the means of supervision, to strengthen supervision on the operations of China's fishing WT/TPR/M/264/Add.1 
Page 298 
 
 
  vessels on the high seas and their catch, to combat illegal, unregulated and unreported (IUU) fishing 
to the greatest extent, and to effectively fulfill China's obligations as a state member. 
 
WT/TPR/S/264 Page 113, para 58 
 
Section IV, paragraph 58 of the Secretariat report refers to support to the fisheries sector.  
Question: 
 
8. Can China provide a summary of the types of government support available to the fisheries 
sector, including the value of recent expenditure an d an outline of any changes planned under the 
12th Five year plan?    
Answer:  China attaches great importance to the princi ple of transparency and has made our best 
efforts in fulfilling transparency obligation.  Nowadays, members are conducting negotiations to 
strength the fisheries subsidies disciplines, including the notification regulation.  China is willing to 
provide relevant information once such  disciplines agreed upon by members. 
 
III. TRADE POLICIES BY SECTOR 
(1) Energy 
(i) Policy objectives for the sector 
 
WT/TPR/S/264 Page 114, para 61  
 New Zealand welcomes the high priority on renewable energy as part of the 12
th Five-Year Plan for 
Energy Technology, underlined in section IV, paragraph 61 of the Secretariat report.   
 
Question: 
 
9. Will implementation measures for the plan be made  publically available, and when is the new 
Energy Law expected to be completed? 
 
Answer:  The draft of Energy Law is being amended by the Legal Affair Office of the State Council, 
via further survey, argumentation and recommendation co llection.  There is not a specific timetable 
for the promulgation of Energy Law . 
 
 
NORWAY 
 Question 1 (sent May 22nd) - Chapter III.1. (vi) Contingency trade measures: 
 
The secretariat's report, in paragraph 57, points to  the fact that China presently does not examine 
whether an antidumping duty below the dumping margin  would be sufficient to eliminate the material 
injury caused by dumping.   Will China consider applying the lesser duty rule in or der to make sure that an antidumping measure 
introduced by China solely is a measure to counter unfair trade, and not potentially contains a 
protectionist element when the calculated and applied dumping margin exceeds the injury margin? 
 
Answer:  Like most WTO Members, the China's Anti-dumping Law does not have any provision on 
lesser duty rule.  China does not investigate the inju ry margin nor does it apply the lesser duty rule in 
practice, which, however, does not affect the inv estigation authority of China to conduct anti-dumping  WT/TPR/M/264/Add.1 
 Page 299 
 
 
  investigation and take corresponding measures in an objective and fair manner in accordance with 
law.   Question 2 - Report of China: 
 The report by the Government of China states in paragraph 108. Rules nego tiation is an important 
element of the DDA. It should contribute to fu rther clarifying and improving the WTO rules, 
tightening disciplines on investigation in trade remedy, increasing transparency, and preventing and 
reducing the abuse of trade remedy measures, esp ecially the abuse by developed members against 
developing ones.  Please explain why China find a particular need  to preventing and reducing the abuse of trade 
remedy measures, especially the abuse by develope d members against developing ones? Should not 
all abuse be condemned and eliminated , regardless of the source of the abuse? 
 
Answer: According to WTO statistics, developed members were the major users of trade remedy 
measures from 1995 to 2011.  As the most affected me mber of trade remedy measures, China is in the 
position that all members, regardless of developed members or developing members, should restrain 
from using trade remedy measures, especially for trade protectionism purposes.  
 
Question 3 - Report of China: 
 
According to paragraph 83 of the Report of China The Chinese Government has continued its efforts 
to improve facilitation of trade and investment in  terms of procedures and formalities for Customs 
clearance, quarantine and quality inspection.  We acknowledge these efforts, but at the same time 
would point out that there are still certain challeng es to be met regarding a uniform, transparent, 
proportional application of procedures and formalities.   What further efforts are the Ch inese authorities considering in order to further improve the 
facilitation of trade and investment? 
 
Answer: China will make the following efforts to further improve the facilitation of trade: 
 1. Strengthen the cooperation with the customs of  various countries in mutual recognition of 
supervision, mutual assistance in law-enforcemen t and mutual information exchange  and reduce 
unnecessary repeated supervision and inspection to f acilitate enterprises and goods to enter the market 
of each other; 2. Further push forward the construction of broad customs clearance ports, give full play to the 
role of E-ports, deepen the contact and collaborati on with the inspection departments of the ports and 
national governmental authorities and impr ove the customs clearance efficiency. 
3. Further establish a closer partnership with the business sector, implement the idea of from 
enterprises to goods, strengthen legal compliance ma nagement and provide clearance convenience to 
enterprises that have good credit standing. 4. Promote a reform of classified clearance and non-paper customs clearance, implement a 7/24 
appointment clearance system at ports and custom s of regions subject to special supervision, 
implement advance declaration, collective declara tion, inspection and release by guarantee and other 
clearance convenience, optimize the processing flows of the customs, and simplify the supervision 
and clearance formalities.  5. Actively facilitate the domestic sale of  processing trade products and promote the 
construction of a domestic sale trading platform.   
Question 4 - Chapter III.1. Measur es directly affecting imports: 
 WT/TPR/M/264/Add.1 
Page 300 
 
 
  We understand that it is a requirement for importati on in to China that the CR-number (Customer 
Registration Number) is provided on the consignmen t before it departs the country of origin. Usual 
practice in most other countries is that this CR- number may be provided at a later stage for instance 
in a customs warehouse.  
 Is this a mandatory requirement?  If so, what is the legal basis for it, and could China please explain 
the rationale for such a requirement.  
 Answer:  We have no idea of what CR-number here re fers to.  Could Norway please further clarify 
the concept of CR-number?  
Question 5 - Chapter III.1. Measur es directly affecting imports: 
 
A number of our economic operators report cust oms-related problems regarding (expedited) 
shipments of spare parts, servicing equipment etc.  Often it is a case of time critical shipments where 
the spare parts etc are necessary for the smooth op eration of economic operato rs, especially in small 
and medium-sized enterprises.  Is this an issue Chinese authorities is aware of and are there any plans to address these concerns 
among economic operators?   
Answer:  China is not clear about the above-menti oned customs-related problems encountered by 
Norwegian economic operators.  Could Norway please specify the problems or seek help from related 
Chinese authorities through Norw egian Embassy in China.  
 Question 6 - Chapter III.1.(vi) Contingency trade measures:    
 Chart III.4 shows that in certain years, 2006, 2007 and 2010, the final Chinese antidumping measures 
introduced by far exceeds the number of investigations initiated.  
 
Would China please explain the reasons for this development? 
 
Answer: An anti-dumping investigation usually needs twel ve or eighteen months.  The reason why in 
some years the number of final antidumping measures exceed that of investigations initiated is that final rulings of some anti-dumping investigations in itiated before have been made in that year. 
 
Question 7 - Chapter III.1.(vi) Contingency trade measures:  
 
Paragraph 72 states that Most of the RTAs that China has notified to the WTO contain provisions 
regarding the use of anti-dumping and countervailing measures between the parties. However, only 
two (with Hong Kong, China and Ma cao, China) preclude the use of such measures between the 
parties.   
 What made China agree to abstain from applic ation of antidumping and countervailing measures 
only against two of its free trade partners?   
 Answer: The Closer Economic Partnership Arra ngement between the Hong Kong/Macao 
Administrative Region (SAR) and the Mainland (CEPA ) is a free trade agreement between China, as 
a sovereign country, and its separate customs territories the Hong Kong SAR and the Macao SAR, which aims at eliminating the tariff and non-tariff m easures in their trade of goods so as to facilitate 
trade and investments and promote the growth of trade and investments between them.  CEPA adopts 
the one country two systems principle and complie s with relevant provisions of the GATT 1994.  
Considering the nature and characteristics of trade between the Hong Kong/Macao SAR and the  WT/TPR/M/264/Add.1 
 Page 301 
 
 
  Mainland, the parties decided not to adopt any anti-dumping and countervailing measures between 
them.  From 1 January 2006, the Mainland imposed zero tariff on all the goods originated from the Hong Kong and Macao SARs, liberalizing the tr ade in goods between the Hong Kong/Macao SAR 
and the Mainland. 
 
Question 8 - Chapter III.1.vii SPS measures:  
 
Issues related to wood packaging material. We understand despite China being a signatory to the 
FAO IPPC Convention - ISPM 15 (which expressly states that wood packaging material that and 
marked has been treated does not represent an envir onmental risk) there is still requirement for such 
wood packaging material to be accompanied by a phy tosanitary certificate.  This seems to be an 
unnecessary barrier to trade.  Could China please a) confirm that there is indeed  such a requirement for wood packaging material, 
b) explain the reasoning behind it and c) inform us  of any planned change in these requirements in 
order to fully implement the convention, apply the international standard and th ereby facilitate trade?   
 
Answer: Please refer to http://dzwjyjgs.aqsiq.gov.cn/. 
 Question 9 - Chapter III.1.vii SPS measures:   
 In December 2010 China introduced new testing a nd quarantine measures directed specifically at 
fresh, chilled salmon from Norway.  These measures  were further strengthe ned in February 2011 by 
implementation of AQSIQ Order No 9.  As a cons equence, the export of fresh Norwegian salmon to 
China has dropped significantly.  
 
Trade in seafood has developed in close cooperation between AQSIQ and the National Food Safety Authority (NFSA) to the satisfaction of both partie s.  Therefore, the introduction of new control 
measures for fresh salmon were unexpected and surprising.   
Norway has questioned the justification of the new control measures on fresh salmon both bilaterally 
and in the Committee on Sanitary and Phytosanitary  Measures.  We observe discrepancies between 
the results from surveillance programs run by NFSA  and notifications received from China.  This 
issue should be addressed in cooperation between relevant technical experts.  However, such a 
meeting has yet to be agreed upon. In view of the Parties obligations under the WTO agreement, we 
repeat our request to China to participate in such meetings to sort out the problems and to normalise 
trade in salmon.  What steps will China take to cooperate in ord er to find a solution under the SPS-agreement with 
regard to the current challenges to trade in fresh salmon, and to normalise this trade. 
 
Specifically, Norway would like to request that the relevant authorities - the Norwegian Food Safety 
Authority (NFSA) and its Chinese Counterpart, the General Administration of Quality Supervision, 
Inspection and Quarantine (AQSIQ) have a meeti ng to discuss the follow-up of quarantine and 
quality inspection of Norwegian salmon imported to China.  
 Answer:  Since 2010, the entry and exit inspection and quarantine bureaus in China had detected fish 
lice, pathogenic micro-organisms and excess chem ical residues, among other issues, in imported 
salmon.  To protect consumers, public health and the safety of the Chinese fi shing industry, China had 
strengthened the inspection and qua rantine of imported salmon, based on the Administrative Measure 
for Inspection, Quarantine and Supervision on Im port and Export of Feed and Feed additives, its 
revision and amendments relating to aquatic produc ts.  These had been notified to the WTO.  The 
measures taken were covered by these regulations without any new elements and therefore China had WT/TPR/M/264/Add.1 
Page 302 
 
 
  no obligation to further notify.  These import inspect ion and quarantine procedures were not aimed at 
any particular Member, but quarantine issues were detected in numerous shipments of salmon from 
Norway. 
 
Norway is one of China's major salmon importing countries, however, many Norway's salmon failed 
Chinese inspection.  For example, in 2011, 24 ship ments of fishing product from Norway have been 
detected micro-organisms and chemical residues, and 19 shipments out of which are salmon.  Out of all imported salmon that failed Chinese inspection,  the proportion of Norway's salmon was 63% in 
2011.  Therefore, the risk of Norway's salmon is higher so that China still needs to strengthen the 
inspection and quarantine measures.  Concerning Norway's salmon, China believes that our bilateral communication is effective.  China is 
willing to communicate with Norway's relevant  agencies and embassy under the SPS Memorandum 
of Understanding framework.  Besides, China has nu merous ports and a large number and variety of 
products. Incidents occurred on ports at any time,  and Norway's salmon fa iled inspection several 
times.  China is willing to adjust the relevant measures once Norway had addressed the quality issues. 
 
Question 10 - SPS measures: 
 
The regulatory framework for import of food to Ch ina is currently being expanded. According to the 
new Regulation on Registration and Manageme nt of Overseas Producers of Imported Food, 
applicable as of 1 May 2012, overseas producers of food may only export their products to China 
upon being registered.  According to article eight of the above-mentioned regulation, the Certification 
and Accreditation Administration of the People's Repub lic of China organizes relevant experts or 
designated institution to conduct examination on th e information submitted by the relevant authorities 
of the country (region) where the overseas food producing firm is located and dispatches an 
assessment group to conduct on-s ite assessment when necessary.  
 Could China expand on the criteria for when such on-site assessment is deemed necessary and on 
how it is implemented smoothly without the pro cedure itself becoming a hindrance to trade?    
 
Answer:  China will consider the volume of import, the increase of trade, the quality of import 
porducts and the inspection records when making a nd implementing on-site assessment plan.  On-site 
assessment will be conducted according to CAC guide lines on foreign inspection activity. CNCA held 
consultations with Norway's Embassy in Ch ina concerning this issue on 4 June 2012. 
 
Question 11 - Chapter III.3.vii IPR infringements and enforcement: 
 
We note with interest the IPR enforcement campaign described in para 325 of the Secretariat's report. 
Although we appreciate the actions undertaken by  the Chinese authorities, IPR infringements remain 
a concern.  Particularly when copying relates to produc ts that can be vital for the safety of a product. 
The copied product may have flaws and failures that ma y cause this product so fail.  In a critical 
situation the outcome could be fatal to the user as the material quality will not hold the stress. 
 Do the Chinese authorities envisage another IPR enfo rcement campaign targeted specifically at other 
sectors?  And if so, could you please provide us with the detail of such a campaign. 
 
Answer:  We are not sure what Norway indicate by IPR enforcement campaign targeted specifically at 
other sectors.  The Chinese IPR enforcement campaign is a campaign cracking down on IPR infringements in an extensive sectors, including news  and publication, entertainment, software, high-
tech, agriculture and business information protection etc.   WT/TPR/M/264/Add.1 
 Page 303 
 
 
  Question 12 - Chapter IV.5.ii Financial Services: 
 
The laws and regulations in Ch ina's banking sector requires a multit ude of licenses for the operation 
of different banking services as stated in paragraph 114 in the Report of the Secretariat.  This difficult 
regulatory framework is particular challenging  for smaller banks as they have less resources for 
administration.  Many foreign- owned commercial banks operating in China are small, and the market 
share of foreign banks in China is limited.  A ccording to paragraph 90 in China's report Foreign 
Investments are encouraged to go to...modern services....  
 
How does China plan to facilitate forei gn investments in the banking sector? 
 
Answer: In October 2011, the People's Bank of China issued the Measures on Administration of 
Settlement Services of Foreign Direct Investment in RMB.  The rule, bridging the existing administrative regime on foreign direct investment, stated that overseas investors and related banks 
may handle settlement services for foreign direct investment in China in RMB.  Formalities of 
financial services for overseas investors to make inv estment in China were further simplified and 
facilitated.  China will make continuous efforts to facilitate foreign investments in the banking sector. 
  PAKISTAN 
 
1. In para 127 of the Report by the Secretariat, it has been mentioned that  Scheme of Indigenous 
Innovation was not implemented by China for Govern ment Procurement at the national level.  The 
measures introduced in some Regions were also disc ontinued.  China is requested to inform whether 
this policy is continuing in areas other than Government Procurement?  
 Answer:  The Chinese government has announced to discontinue the National Administrative 
Measures of Accreditation of Indigenously Inn ovated Products (for Trial Implementation), the 
Administrative Measures of the Budget for Gove rnment Procurement of  Indigenously Innovated 
Products, the Appraisal Methods of Government Procurement of Indigenou sly Innovated Products 
and the Administrative Measures of the Contract for Government Procurement of Indigenously 
Innovated Products.  Currently, the Chinese indigenous ly innovated products are no longer linked to 
the preferential policies of government procurement.   The above decision will be complied with when 
the procurement issues in the public finance of  Chinese government are handled while China will 
continue the policies in accordance with WTO rules and encouraging innovation.   
 
2. After acceding to GPA, China is likely to get ma rket access in this area  in all the countries 
signatories to this plurilateral agreement.  Is ther e any timeframe to conclude the accession process 
to this plurilateral agreement?   
Answer : The Chinese government is creating conditions for acceding to GPA as soon as possible. 
 
3. Has China eliminated export taxes in their b ilateral/regional Free trade Agreements, if so, 
whether China would like to mu ltilateralize such measures?  
 
Answer : Export taxes have not been touched upon in the bilateral/regional Free trade Agreements 
signed by China. 
 
4. The rise of multi-localization i.e. processing or assembly of imported input for export, 
provides statistics, which are misleading indicators  of trade flows.  What is the average value 
addition of imported inputs used by Chinese export ers on all products?  China is requested to give 
some specific examples of such goods, especially hi gh tech products.  Besides, how can developing 
countries be part of this global change and learn lessons from China's experience?  WT/TPR/M/264/Add.1 
Page 304 
 
 
   
Answer: Processing or assembly of imported input for export mainly takes the shape of processing 
trade in China.  For many years, the processing trade has accounted for almost half of the total foreign 
trade volume in China and played a key role in abso rbing more laborers, attracting foreign investment 
and developing domestic supporting industries.  Due to  the feature of processing trade of import and 
export on a big scale, the foreign trade statistics of China take into calculation quite a few of the raw 
materials and semi-finished products which are re -exported after being imported and processed, which 
would not be able to accurately reflect the actual volum e of China's foreign trade.  For the time being, 
in China's processing trade have th ere been such problems as being s ituated at the lower end of the 
international industrial chain, lack  of independent brand and not be ing equipped with core technology. 
As a developing country, China will continue to vigo rously develop its processing trade, and make an 
effort to promote a high-end extension along the i ndustrial chain and an extension of the domestic 
value-added chain, meeting the requirements of upgr ade and transformation.  At the same time, the 
proportion of general trade in total foreign trade vol ume will be raised, the export of products with 
indigenous IPR, brand an d technology will be increased, core co mpetitiveness of China's foreign trade 
will be enhanced and a sustainabl e development will be achieved. 
 
5. Reference to paragraph 78 of the Secretariat' s Report.  China abolished local content 
requirement for automobile enterprises since August 2009.  What has been the impact of this policy 
change on China's auto sector?      
Answer:  Since September of 2009, China has discon tinued the Administrative Measures of the 
Import of Auto Parts for Complete Vehicles.  Fi rstly, a customs tariff of 25% is imposed on the 
import of complete vehicle in China and 10% on auto  parts.  The Measures had mainly been made up 
for the customs to accurately classify the imported au to parts and to levy cu stoms duties according to 
the actual composition, which shall not be understood  as a local content requirement for automobile 
enterprises.  Secondly, after China has discontinue d the Measures, cases have already appeared where 
a complete vehicle was destructuralized into part s that were then imported at different times in 
different batches and finally assembled back into a complete vehicle, in a way to evade the import 
tariff of complete vehicle.  Therefore it is the next  task to make up relevant provisions to regulate the 
classification of imported auto parts.   
 
6. Reference para 28 of China TPR Report.  Since the last review, China has launched on pilot 
basis the tax reform aiming at boosting the services s ector, would China like to share its experience? 
 
Answer:  China implements a turnover tax system with value-added tax and business tax in parallel.  
Value-added tax is levied on cargo and dutiable ser vice while business tax is levied in the service 
industries closely related to cargo such as transpor tation and communication, storage, delivery and 
technical service, which has resulted in a duplicate taxation and thus effected the development of 
service industry.  Therefore, China launched on pilo t basis the tax reform of business tax into value-
added tax firstly in Shanghai with a focus on coveri ng into the value-added tax range such industries 
as transportation and communication where the business tax was originally levied.  To levy a 
value-added tax can solve the issue of duplicate ta xation with the help of a re-design of taxation 
system.  
7. Consumer price index and (CPI) and Producer Price Index (PPI) experienced a steady 
increase in China in the last two years, also leadi ng to higher minimum wages and labour cost.  What 
will be the impact of these changes on China's international Trade?  
Answer:  with the rapid growth of China economy, the rise of labor cost is an inevitable trend, it also 
reflects the improved living standard of Chinese people.  Given the fact that China's foreign trade 
features an extensive mode, the rising labor cost will, in the short term, give rise to a higher cost for 
export-oriented companies, and reduce the price ad vantage of export goods.  Some small and micro  WT/TPR/M/264/Add.1 
 Page 305 
 
 
  foreign trade companies will be faced with difficu lties.  Some low VAT and uncompetitive orders will 
be gradually transferred to nei ghboring developing countries.  However, in the long term, the rising 
labor cost also makes companies be aware of the fa ct that low-cost expansion won't be sustainable. 
They will be forced to enhance management, improve productivity, optimize structure, encourage 
R&D and design, accelerate transformation and upgrade to keep the momentum.    
PERU 
 
Peru would be grateful if China would provide  answers to the following questions based on the 
information contained in document WT/TPR/S/264 of 8 May 2012.  
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) Measures Directly Affecting Imports 
(i) Customs procedures, valuation, and rules of origin (a) Customs procedures 
 
According to paragraph 3, "Customs collects the following administrative charges:  handling charges 
for customs supervision [and] charges for ATA (Admission Temporaire/Temporary Admission) 
document adjustment".  Peru would like further details as to whether the handling charges for 
customs supervision constitute payment for the Cu stoms Administration's s upervisory functions and 
what the levy concerning ATA document adjustment act ually covers.  Peru would also like to know 
how the temporary admission customs proce dure under the Istanbul Convention (CARNET ATA) 
operates.  
Answer: China is still in coordination with relevant ag encies to provide response to this question. 
 
According to paragraph 7, "China has adopted a 's ingle window' project, which is intended to realize 
data sharing for customs clearance, including data exchange concerning cross-border RMB settlement, and on-line audit".  Peru would like to know how this on-line audit procedure is 
conducted.  
Answer: At present, 12 authorities under the State Council, the Trade and Industry Department of the 
Hong Kong Special Administrative Region, th e Economic Services of the Macao Special 
Administrative Region and also 14 commercial banks participate in exchange and sharing customs 
clearance data.  Projects such as on-line examin ation of export rebates, RMB settlement data 
exchange in cross-border trade etc. have been put  into operation.  The model of "electronic account 
plus on-line examination" effectively improves the capabilities of joint enforcement and consolidated 
supervision of port authorities and strengthens th e supervision and administration of import and 
export activities.  
(b) MFN tariff rates 
 
According to paragraph 23, "China's applied MFN tariff rates consist of 'standard' applied MFN 
rates as well as 'interim' MFN rates for certain products".  Peru would like to know the difference 
between the "standard" applied MFN rates and the "interim" MFN rates, and to which products each 
type of rate applies. 
 
Answer:  In accordance with the Regul ations of the People's Republic of China on Import and Export 
Duties, the temporary tariff rates apply to the im port goods subject to most-favoured-nation rates, 
conventional rates and in-quota duty rates within a ce rtain period; and the temporary tariff rates shall 
apply if both most-favored-nation rates and temporar y tariff rates are available to the import goods.  
The list of the products subject to temporary tariff rates in 2012 is specified in the Notice of the WT/TPR/M/264/Add.1 
Page 306 
 
 
  Customs Tariff Commission of the State Council on the Tariff Execution Plan 2012 (Shui Wei Hui 
[2011] No. 27) which is available on the offi cial website of the Ministry of Finance 
(www.mof.gov.cn). 
 
(2) Measures Directly Affecting Exports 
(iv) Tax rebates on exports 
 
According to paragraph 143, "VAT may be rebated  on exports, although the rebate rates are, by and 
large, lower than the VAT rates actually paid.  Th e difference between the two rates constitutes a levy 
on exports, which may in turn constitute assist ance to downstream processing of the products 
affected, and could affect China's terms of trade".   Peru would like to know how the VAT rebate on 
exports operates and whether there is any mechanism  for the verification of rebate rates and VAT 
rates actually paid.  
Answer: The export enterprises make clearance to custom s. When they affirm departure of the goods, 
they can apply for VAT rebate to tax authorities with related materials.  
(3) M
EASURES AFFECTING PRODUCTION AND TRADE  
(i) Taxation and tax incentives 
(b) Indirect taxes 
 
Paragraph 173 refers to:  "Indirect taxes, including (…) city maintenance tax".  Peru would like to 
know who is subject to this tax as well as the tax base used, and whether it also applies to goods 
import and export transactions. 
 Answer: Urban maintenance and construction taxes are imposed on the units and individuals paying 
value added taxes, excise taxes and business taxes based on the amount of the value added taxes, the 
excise taxes and the business taxes paid by the taxp ayers.  No urban maintenance and construction 
taxes are imposed with respect to the value added taxes and the excise taxes charged by the Customs 
on the import products during the commodities import and export transactions; no urban maintenance 
and construction taxes are refunded in case of any re fund of the value added taxes and the excise taxes 
for export commodities.  (d) Tax incentives  According to paragraph 185, "Preferential tax treatmen t, in terms of lower ra te enterprise income 
tax, previously granted to firms located in sp ecial economic and high-tech development zones, is 
being grandfathered.  After th e transition period, there will no preferential tax treatment for 
enterprises in these zones".  Peru would like to  know more about tax treatment in these special 
economic zones, the high-tech developmen t zones and the export processing zones. 
 
Answer:  The State Council issued the Circular of the State Council on the Implementation of the 
Transitional Preferential Policies on Enterprise Income Tax (Guo Fa [2007] No. 39) upon the implementation of the Enterprise Income Tax La w, according to which enterprises enjoying the 
preferential policies with regard to enterprise in come tax under the former tax laws, administrative 
regulations and documents with the effects of ad ministrative regulations shall be subject to a 
transition under the following measures: 
 Enterprises which enjoy the preferential policies of low tax rates in the past shall be gradually 
transited to be paying the tax at the statutory rate within 5 years from 1 January 2008.  Enterprises which enjoy such preferential policies of  tax reduction and exemption with the fixed term 
as "2-year exemption and 3-year half deduction" and "5-year exemption and 5-year half deduction" in  WT/TPR/M/264/Add.1 
 Page 307 
 
 
  the past are entitled to the original preferential po licies based on the original rules and the original 
preferential years after the implementation of the new tax law on 1 January 2008 except that the 
preferential term shall begin from 2008 if the en terprises have not actually enjoyed the original 
preferential policies due to the failure to make profit.    
 In addition, Guo Fa [2007] No. 39 has also explicitly  specified the enterprise income tax preferential 
policies subject to the transitional period.  PERU - SECOND SET 
 
Normas y otras prescripciones técnicas 
 
China es miembro activo del Comité de la OMC so bre Obstáculos Técnicos al Comercio y sobre 
Medidas sanitarias y Fitosanitarias.  Respecto a la s notificaciones realizadas por China durante el 
periodo 2009-2011 al Comité de OT C fue un total de 350 y 376 notificaciones al Comité de MSF, 
dichas notificaciones se debieron a determinados productos sensibles para ellos y los cuales 
demandaban preocupaciones, con especial énfasis en  la salud humana, animal, vegetal y seguridad 
nacional.  1. Normas y Reglamentos Técnicos  
 
China cuenta con cuatro tipos diferentes de normas:  nacionales, locales, comercial y de empresa. Las 
normas de cumplimento obligatorio para el sector agrícola no generalmente normas ligadas a higiene 
de los alimentos (inoxidad), medicina veterinaria así como normas de seguridad e higiene de los 
productos y la producción, almacenamiento y transpor te, y la utilización de los mismos.  China es 
miembro de la ISO, IEC, UIT, OMS y del Codex Alimentarius, por lo que al establecer una norma 
obligatoria, estas deben basarse en normas internacionales.  Además, existen comités técnicos que se encargan de revisiones periódicas de las normas, estas revisiones se realizan cada 5 años después de la em isión de las normas, a fin de actualizarlas y en caso 
amerite una derogación de la norma. 
 China como parte de su política actual se ha comp rometido a elaborar normas obligatorias basándose 
en normas internacionales cuando corresponda.  Por tal motivo las normas obligatorias (reglamentos 
técnicos) están asumiendo un rol más importante como requisitos para el comercio con China y varios 
países del mundo, por lo tanto se están volviendo más exigentes.  
 
2. China Compulsory Certification (CCC) 
 
La Certificación Obligatoria China, es una medida para el control de calidad, ningún producto puede 
ser importado, ofertado o usado en China si no cuen ta con el sello CCC.  Existe un catalogo donde se 
encuentran publicados todos los productos que deben contar con el sello CCC, lo que no queda claro 
si en este catalogo se aplica a productos relacionados c on la vida y la salud humana, animales plantas 
protección ambiental y seguridad nacional.  3. Etiquetado: todos los productos vendidos en China deben de cumplir con dos Leyes que 
regulan el etiquetado de los productos.  Una de las exigencias, es que el etiquetado deba estar en el 
idioma chino.  A la fecha, la Norma Nacional de  Seguridad Alimentaria sobre las Normas Generales 
para el Etiquetado de los Alimentos, publicado po r el Ministerio de Salud en 2011 se encuentra 
adoptándose en 2012.  
4. Estándares de Inspección y Requerimientos Especiales: la normativa china indica que 
todos los productos que se encuentren dentro de la lista de inspección pública o que estén sujetos a WT/TPR/M/264/Add.1 
Page 308 
 
 
  algún tipo de inspección en virtud de alguna, deberá n ser inspeccionados antes de su importación, 
venta o uso en China.  Para la importación de anim ales, plantas y sus productos, así como los envases 
y los materiales del empaque usados para su transpor te, estos deberán pasar el examen de cuarentena a 
la llegada a China a fin de verificar la ausenci a de enfermedades.  AQSIQ y la Administración 
General de Aduanas mantener un Catálogo de Produc tos Básicos de entrada y salida a analizar y 
puesto en cuarentena por Inspección de Entrada y Salida y Cuarentena de los órganos.  El catálogo 
incluye productos sujetos a inspección y cuarentena. Esto incluye alimentos procesados y bebidas, así 
como los productos semielaborados y materias primas  y alimentos, como carne y verduras.  Desde 
2008, la AQSIQ ha hecho cinco ajustes en el catál ogo de la base de consultas con las autoridades 
aduaneras y comerciales, de conformidad con los re quisitos pertinentes y la calidad de los productos 
básicos de importación y exportación, y emitió los aj ustes de la Administración General de Aduanas 
mediante un anuncio público. 
5. Medidas Sanitarias y Fitosanitarias: China es un miembro de la Comisión del Codex 
Alimentarius y la Organización Mundial de Sanidad Animal y la parte contratante de la Convención 
Internacional de Protección Fitosanitaria.  El punto de contacto es el Ministerio de Agricultura. 
Respecto a las medidas administrativas para la in spección, la cuarentena y el control de las 
importaciones de productos diferentes, un país o re gión que se desea exportar un producto alimenticio 
a China por primera vez, primero debe se r evaluado por la Autoridad Sanitaria.  
 Solicitudes: 
 
China es uno de los socios más importantes de Perú , sus medidas generales, las regulaciones técnicas 
y estándares, las pruebas y certificados de arreglos, las medidas sanitarias y fitosanitarias, cuarentenarias y inspección, además de los requisito s de marcado, etiquetado y envasado, lo reflejan 
como un país con medidas restrictivas al comercio.  A continuación se detallan la siguiente 
información: 
 
 Si bien China se ha comprometido en armonizar sus normas nacionales con las 
internacionales para adoptar sus medidas, es importante que brinde mayor información 
sobre su sistema jurídico en la elaboración y aplicación de normas, reglamentos técnicos y 
procedimientos de evaluaci ón de la conformidad, así como de su marcado CCC y la 
vigilancia pre y post mercado para el cumplimie nto de sus normativas y que deje claro que 
productos se encontrarán sujetos a inspección y que otros tienen que contar con el sello 
CCC.  
 
Answer:  Under the market economy, relevant authorities of WTO Members all establish and 
implement conformity assessment procedures, such as the CE in EU for the protection of national 
security, of deceptive practices, of human, animal or pl ant life or health, of the environment.  China's 
CCC system also establishes and implements for th e same purposes, in conformity with relevant 
Chinese laws and regulations including Produc t quality law", "Import and Export Commodity 
Inspection Law", "Standardization law" and "Regul ations on Certification and Accreditation, and 
follows relevant internationally accepted practice. 
 
 China mantiene un Catálogo de Productos Bási cos de entrada y salida a sujetos a inspección 
y cuarentena.  Esto incluye alimentos pr ocesados y bebidas, as  como los productos 
semielaborados y materias primas y alimentos,  como carne y verduras.  Este Catalogo se 
encuentra disponible en la web?.  
 
Answer:  A product is corresponding to a single product c ode during inspection.  If the product code 
is listed in The Catalogue of Entry-Exit Commod ities Inspected and Quarantined by Entry-Exit 
Inspection and Quarantine Organs, the corresponding product needs to be inspected and quarantined. 
According to the product code listed in different  categories of inspection and quarantine in the  WT/TPR/M/264/Add.1 
 Page 309 
 
 
  Catalogue, a product can be subjected to diffe rent regulatory inspections, such as Commodity 
Inspection, Plant or Animal and Its Oriented Product Inspection, Food Hygiene Supervision and 
Inspection, Sanitary Inspection and Commodity En try Validation Inspection.  For the Catalogue 
please refer to http://d zwjyjgs.aqsiq.gov.cn/ 
 
 Sobre la falsificación y alteración de los C ertificados sanitarios y fitosanitarios que 
mencionan, este registro online que la Autoridad Sanitaria (AQSIQ) introduce bajo la figura de Inspección y Cuarentena de China E-cert del sistema (China E-cert) en 2010, se aplica a todos los productos que se encuentran sujetos al cumplimiento de Protocolos Fitosanitarios?  
 Answer: In order to facilitate the health growth of tr ade, especially the trade of agricultural and food 
product, as well as prevent fake inspection and quar antine certificate, China initiated the Inspection 
and Quarantine E-cert System.    Any country's government can access to China' s Inspection and Quarantine E-cert System 
(http://ecert.eciq.cn) and apply for registration.  After that, the country's embassy in China has to 
contact AQSIQ for approval.  Any country's governme nt can has the system to check and review the 
texts of certificates which are signed by China's inspection and quarantine organs within one year 
after AQSIQs approval.  
The system is also a platform of certificate info rmation exchange, automatic bilateral exchange and 
online checking connecting Chinese and foreign agenci es.  We have established official inspection 
and quarantine E-cert checking mechanism with the government of New Zealand, Australia, 
Netherlands and many other countries.  
For further information, please re fer to http://tgyws.aqsiq.gov.cn/ 
 
Medidas Arancelarias:      
 
En el punto 23, sobre aplicación de medidas aran celarias se menciona que China a parte de los 
aranceles NMF aplicados también aplica aranceles pr ovisionales para ciertos productos.  El arancel 
provisional sustituye el arancel NMF aplicado, si n embargo las tasas provisionales no son superiores 
al tipo arancelario NMF aplicado.   As mismo en el Anexo I, punto III, párrafo 74, se menciona que En los últimos años, el Gobierno 
chino ha aplicado tasas anuales provisionales aran celarias para determina dos productos importados 
que son inferiores a los tipos NMF aplicados.  En 2010 y 2011, más de 600 productos a 8 dígitos del 
SA nivel similar al disfrutado l as tasas más bajas arancelarias provisionales de cada año.  En 2012, 
con el fin de aumentar las importaciones adicio nales, promover la restructuración económica y 
satisfacer las necesidades de consumo de las personas, la aplicación de las tasas arancelarias provisionales de importación se extiende a más de 730 partidas arancelarias, con la tasa arancelaria promedio de pie en el 4,4%, lo que es más de un 50% más bajo que el tipo NMF aplicado.  
 
En ese sentido se solicita aclarar lo siguiente:       
 Bajo que criterios se establecen estos aran celes provisionales y que tipo de productos se 
encuentran contenidos sujetos a su aplicación.  Existe un listado?    
 
Answer: Interim tariff rates are more favorable tariff rates than MFN treatment.  For the detailed 
information please refer to the annual report of customs tariff.  WT/TPR/M/264/Add.1 
Page 310 
 
 
   Que tratamiento ofrece China respecto a los arancel es preferencias suscritos en el marco de 
un acuerdo y los aranceles provisionales, cuando estos últimos se encuentran por debajo del 
primero?  
 
Answer: According to China Import and export regulati ons, Where there are interim tariff rates on 
imported goods subject to agreement tariff rates or special preferential tariff rates, the lower tariff 
rates apply.    
 En ese sentido, la consulta es Qu producto s se encuentran dentro de las 730 partidas 
arancelarias?     
 Answer: The list of the products subject to temporary tari ff rates in 2012 is specified in the Notice of 
the Customs Tariff Commission of the State Council on the Tariff Execution Plan 2012 (Shui Wei Hui [2011] No. 27) which is available on the official website of the Ministry of Finance (www.mof.gov.cn). 
 
Contingentes Arancelarios:  
 
En el punto 31, se menciona que al 2011 los contin gentes arancelarios se aplicaron a 8 categorías de 
productos importados, con 45 líneas arancelarias a 8 dígitos del SA nivel:  trigo (6 líneas), el maíz (5), arroz (14), azúcar (6), lana (6), la lana peinada (3), algodón (2) y fertilizantes químicos (3) (igual que 
en 2009).  Al respecto, se menciona que los arance les aplicados sobre el contingente del algodón está 
sujeto a un gravamen diferenciado respecto al grav amen fuera de este, todo ello calculado sobre la 
base de un umbral que para el año 2011 fue de 11.39 7/kg.  Asimismo se menciona que el promedio de 
la cuota dentro de la tasa fue de l 4,8%, mientras que fuera de la cuota fue de alrededor de 50,4%.  Al 
respecto se hace la siguiente consulta:  
 
Sobre la determinación del umbral, se solicita sabe r si este cálculo forma parte de una norma o 
reglamento que permita brindar transparencia y predic tibilidad para los usuarios del cupo de algodón.    
 
Answer:  Probably due to the translation factor we  could not understand this question well. 
 Entorno Económico y Comercial y Dirección Política Macroeconómica      
En el Anexo I, punto II, párrafo 38, se menciona que  "El buen desarrollo de la agricultura y las zonas 
rurales es de gran importa ncia para el desarrollo a largo plazo, económico y social estable y sostenible 
en China.  El Gobierno de China, de conformida d con los requisitos de reducción de la brecha entre 
las zonas urbanas y rurales y mejorar el equilibrio en tre el desarrollo urbano y rural, continuará con la 
aplicación de la política "pay-back" y fortalecerá aún m ás el apoyo a la agricultura, las zonas rurales y 
los agricultores con el fin de promover constantemen te la modernización agrícola en el curso de la 
industrialización y la urbanización, mejorar las c ondiciones de producción y de vida en las zonas 
rurales, aumentar los ingresos de los agricultores, consolidar y fortalecer las bases para el desarrollo 
de la agricultura y las zonas rurales y crear las condiciones para el desarro llo sostenible, desarrollo 
económico y social rápida y coordinada".  
 Al respecto, la consulta es ¿en qué consiste la  política "pay-back"?, ¿Qué productos incluye? 
 
Answer: With the accelerated industrialization and ur banization in China, more support and 
protection has been delivered to the agriculture to  achieve the coordinated development of industry 
and agriculture, for the shift of policies from agricu lture feeding industry to industrial nursing the 
agriculture.   WT/TPR/M/264/Add.1 
 Page 311 
 
 
  The central government started the experimental refo rm of rural taxes and administrative charges at of 
2000 in Anhui province, eliminating the rural admini strative charges, capital raising, readjusting the 
agricultural taxation policies, and reforming the regulations on the application of the charges 
withdrawn and retained at the village level. In 2003, the reform went underway nationwide.  And 
2004 witnessed more vigorous reforms, with tax on ag ricultural specialty products (excluding leaf 
tobacco) exempted.  The agricultural tax had been gradually lowered and was finally exempted in 
2006.  
 ¿Cuál es el costo económico de esta política, y si se ha venido incrementando ya que se 
menciona que el apoyo a la agric ultura se fortalecerá aun más? 
 
Answer: As mentioned above ,the purpose of this policy is to achieve the coordinated development of 
industry and agriculture, for the shift of policies fro m agriculture feeding industry to industrial nursing 
the agriculture.  
To achieve the purpose, the central government ha s undertaken to reform the town and township 
mechanism, rural compulsory education, the count y and township financial administration system, 
and collective forest ownership, so as to explore a long effect mechanism to prevent the rebounding of 
farmers burden.  At the same time, leftover probl ems concerning the farmers burden should be duly 
resolved, by reforming national farms taxation and ch arges, relieving the burden of the rural residents 
around the Great Lake region.  The government sh all effectively reduce regional and administrative 
burden on farmers.  The left over debts of the ru ral compulsory education should be resolved to 
unravel the village debt chains. Financial bonus and subsidies should go down to the village level for 
public welfare, to find out a new mechanism of rura l public welfare.  All these have contributed to 
relieving the farmers' burden.  PERU - THIRD SET 
 Questions relating to Customs Valuation  
 
1. It would be interesting to know if the Chin ese customs administration has a database of 
import prices and, if so, how this database is used.   
Answer:  The Chinese customs administration has a data base of import prices which is mainly used 
for risk analysis on the declared prices of import and export commodities.   2. It is important to know whether the Chinese cu stoms administration has a simplified valuation 
procedure for postal items, accompani ed baggage or household goods.  
 
Answer:  Currently, the Chinese customs administration exercises the duty-paid value of accompanies 
baggage, postal items and other entr y goods mainly based on the actual selling price of the items.  In 
order to make it convenient for travellers to query and for the customs to conduct on-site duty 
collection operations and in accordance with se lling prices in the overseas, Hong Kong and Macao 
markets, the Chinese customs administration formul ated and implemented the Schedule of Duty-paid 
Value of Entry Goods and adjust the Schedule base d on market price fluctuations.  The duty-paid 
value of goods with a duty-paid value listed in the Schedule is subject to the Schedule, the duty-paid 
value of goods without a duty-paid value listed in the Schedule is determined in accordance with the 
latest major market retail prices of same goods in the place of origin, and the duty-paid value of goods 
whose actual purchase price is more than two times or 1/2 of the duty-paid value listed in the schedule 
is determined by the customs based on the auth entic purchase invoice or receipt provided by the 
owner of the goods.   WT/TPR/M/264/Add.1 
Page 312 
 
 
  3. It would be interesting to know what proce dure the Chinese customs administration uses to 
determine the customs valu e of used goods.    
 Answer:  The Chinese customs administration doesn't u se any special procedure to determine the 
customs value of used goods, but determines the cu stoms value of used goods by using the same 
procedure with ordinary goods.   
Questions relating to Customs Clearance Procedures  
 
Questions relating to the information provided in An nex V: 6.  "In 2010, the average time required for 
customs clearance was 1.7 hours for exports (2 .4 hours in 2008) and 15.5 hours for imports 
(14.1 hours in 2008)":     1. With regard to the average time required fo r import and export clearance, we would like to 
know how this information is obtained:    
- From the arrival of the goods;      
 - the numbering of the customs declaration;      - the presentation of customs documents;     
- in cases where declarations are subject to physical inspection (red channel)?      
 
Answer:  When calculating the average time of import and export clearance, the time of customs 
clearance of normal and release customs declarati ons is the time difference from "handling time of 
declaration review by computer" to the "handling ti me of release of the declaration".  The custom 
declarations with goods needing physical exam ination and verification are excluded from the 
calculation of the average time required for customs clearance.   
 
2. We would also like to know what checks a re carried out to verify customs import and export 
declarations, and what percentage of declarations are subject to such checks.     
 
Answer:  The China Customs verifies customs import and export declarations mainly by computer or 
by manual.  The customs import and export decl arations not needing manual verification are 
automatically verified by computer, and the cust oms import and export declarations needing manual 
verification receive specialized manual verification on  their electronic data.  At present, the ration of 
the declaration need to be manually audited is around 10% or so. 
 
 
SINGAPORE 
 
PART I:  QUESTIONS REGARDING THE SECRETARIAT REPORT 
 
II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES 
 
QUESTIONS:   
 Summary  
 
Page ix (Para 7) 
 
1. We note that China uses various non-tariff bor der measures, such as import and export 
licensing and state trading to "guide" the alloca tion of resources. Notice and-comment procedures 
are becoming more prevalen t in the process of drafting trade la ws, regulations, and departmental 
rules, but it seems that not all trade-related information is made available to the public.    WT/TPR/M/264/Add.1 
 Page 313 
 
 
  We would appreciate if China could share oth er examples of these non-tariff border measures and 
whether these measures have been eff ective in meeting their objectives.  
 
Please identify the types of  th e  non-tariff border measures. 
 Given that not all trade-related laws and regulations are made available to the public, we are also interested to know if there are plans to ensure g reater predictability in trade procedures for the 
importers and exporters of China.    
 
Answer：Article 52 and 62 of the regulation law stipulat es that, all the laws and regulations should 
be published; and the rules of formulating proced ure of administrative regulations also have the 
relevant provisions.  All the Ch inese trade-related laws and regula tions should be published according 
to the above provisions. 
 
Page xi (Para 19)  
 
2. We note that Seven industries have been iden tified as "strategic emerging industries" in 
China and receive tax preferences.  Paragraph 90  of the Government Report also states that the 
Chinese Government encourages foreign investments in high-end manufacturing, high and new 
technology industries, and other green energy industri es in the central and western regions of China. 
 May we have a broad description of the tax preferenc es that foreign-invested en terprises can enjoy in 
the seven industries that are identified, and if there are specific sub-sector(s) in these areas which 
China is keen to encourage investments in.   
 
Answer：The Ministry of Finance and the State Administration of taxation are researching the tax 
preferences policies for strategic industries. Ther e are 24 sub-sectors defined as priorities within the 
seven industries.  
 
Trade and Investment Policies   
 
Pages 49 - 50 (Para 99) 
 
3. China has been recognized as an important source of Active Pharmaceutical Ingredients 
(APIs) that feed into the global pharmaceutical mark et.  The sporadic incident reports of adulteration 
and drug counterfeits is of concern to most countri es.  We wish to seek grea ter clarity on China's 
current and future efforts to strengthen the pharmaceutic al sector to ensure safety and quality of both 
APIs and pharmaceutical products  exported from PRC.    
 
Answer：One, basics about China's pha rmaceutical raw materials 
 
Strict production license, product registration a nd GMP systems are implemented in producing 
pharmaceutical raw materials (PRMs) in China. Ch ina Drug Control Law stipulates that PRMs are 
supervised the same as drugs in registration and production.  PRM producers have to apply to SFDA 
for registration and Drug Production License.  They  have to pass GMP inspection and fully fulfill 
relevant requirements. PRMs used by preparation producers must be registered and change of PRM 
suppliers has to be reported to SFDA.  In 2011, SFDA published its newly revised GMP, including an 
appendix of PRMs.  The newly revised GMP is equivalent to WHO/GMP and all PRM producers 
have to obtain this new GMP before 2015.   WT/TPR/M/264/Add.1 
Page 314 
 
 
  Imported PRMs have to go through the same regi stration procedure as preparations, with Imported 
Drug Registration as a must and every batch bei ng inspected.  Unregistered PRMs, both home and 
abroad, are forbidden and violators will be treated as falsified drug producers. 
 
Two, basics about China's export and supervision  China implements Export License management syst em, and according to Article 45 of the Drug 
Control Law and relevant interna tional conventions, all narcotics a nd psychotropic substances, protein 
anabolic preparations, peptide hormones regulated  have to be exported only with Export License 
issued by SFDA.  The Customs clears the exportation only with the Export License.  
 SFDA formulated Rules on Administration of Drug Sales Certificate, based on international practices and WHO advice.  SFDA and FDAs at provincial level issue Drug Sales Certificate for those drugs (PRMs included) in line with WHO recommendations, to  prove the legitimacy and GMP conformity.   
 
Domestic drug producers that carry out consigne d processing of drugs marketed abroad, following 
Rules of Supervision Management of Drug Pr oduction and Rules on Record Management of 
Consigned Drug Processing, shall be recorded by provincial FDAs, who will ensure requirements on 
processing sites, formula, workmanship, quality, labeling are strictly met and GMP standard is 
fulfilled. 
 In 2008, SFDA issued Notice on Catalogue Manage ment of Certain Exported Drugs and Medical 
Devices, according to which, gentamicin sulfate, at orvastatin, sildenafil and its salts, oseltamivir and 
its salts, cefoperazone and its salts, ceftriaxone, glycer in, heparin and its salts, arteannuin and its salts 
(including dihydroartemisinin, artesunate, artemeth er, etc), 9 Chinese preparations with indication or 
functions of erectile dysfunction or sexual enhancement, glucose t est strips, condoms, and 2 medical 
devices fall into export catalogue management.  An d all the above have to apply for Drug Production 
License, Drug Approval Number and GMP certificate befo re they can be exported.  The issued Notice 
entered into force on 18 October 2010.  
It is international practice for importers to check  the legitimacy and quality of imported PRMs.  For 
unregistered PRMs produced in China but exported, it  is the importers responsibility to supervise and 
record the management control files, to check all th e details in preparation registration, and to certify 
GMP and inspect on spot in China.  
Three, supervision coope ration on exported PRMs 
 The Chinese government attaches great importance to drug quality and safety.  SFDA is willing to exchange information and coope ration in supervision with re levant economies to address the 
problems of falsified and inferior  drugs and illegal drug dealings.  On management of exported PRMs, 
China has always been active to  strengthen cooperation with re levant economies, and China has 
signed framework agreements with USA, EU and other economies.  
 SFDA suggest that importers should contact producer s or dealers supervised by FDAs in China, 
procure those registered as drugs to safeguard drug safety and quality. The namelist of qualified 
producers and dealers and registered PRMs can be found at www.sfda.gov.cn 
 
Page 51 (Para 104) 
 
4. We note that AQSIQ and the General Administration of Customs maintain a Catalogue of 
Entry-Exit Commodities Inspected and Quarantined by  Entry-Exit Inspection and Quarantine Organs.  
We would like to know if this catalogue would provide a full listing of SPS requirements for import 
and export of goods, and also how other WTO Members would be able to access it.   WT/TPR/M/264/Add.1 
 Page 315 
 
 
   
Answer : A product is corresponding to a single product c ode upon inspection.  If the product code is 
listed in The Catalogue of Entry-Exit Commoditi es Inspected and Quaran tined by Entry-Exit 
Inspection and Quarantine Organs, the corresponding product needs to be inspected and quarantined.  
According to the product code listed in different  categories of inspection and quarantine in the 
Catalogue, a product can be subjected to diffe rent regulatory inspections, such as Commodity 
Inspection, Plant or Animal and Its Oriented Product Inspection, Food Hygiene Supervision and 
Inspection, Sanitary Inspection and Co mmodity Entry Validation Inspection. 
 
For more information please refer to http://tgyws.aqsiq.gov.cn/ 
 
PART II:  QUESTIONS REGARDING THE GOVERNMENT REPORT 
 
Economic and Trade Environment and Macroeconomic Policy 
 
Page 9 (Para 17) 
 
5. We understand that the prevailing enterprise inco me tax rate in China is 25%.  Para 17 
mentions that the small and low-profit enterprises will enjoy a reduced tax rate of 20% for 5 years 
from 2010 to 2015.  We note that small and low-pro fit enterprises refer to enterprises with yearly 
payable tax amounting to 60,000 RMB or less.  We are interested to know the experiences of China in 
implementing the 2-tier rate for businesses.  What  are the challenges encountered thus far?  
 
Answer：As for the tax structure for small low-prof it enterprises: increase the VAT and business tax 
threshold;  the policy that small low-profit enterpri ses pay the business income tax by half will be in 
effect until the end of 2015, together with wider coverage.  The pilot projects to replace business tax 
with VAT will be accelerated in order to eliminat e repeated taxation in service field.  Taxation 
reforms will be deepened to improve the structural  tax cuts policies, and taxation systems will be 
probed into to support the devel opment of small and micro businesses. 
 Page 14 (Para 45) 
 
6. We note that China intends to introduce private equity investments and other financing 
vehicles.  May we know what the general featu res of such private equity investments and other 
financing vehicles that China is considering are, and whether there are incen tives to promote such 
investments/vehicles in China?  
 Answer: Private equity investing fund is an important di rect financing vehicle.  It developed rapidly 
in China recent years.  And this fund has the characteristics as follows,  first, numerous types;  second, 
various organizing forms;  third, the areas for its registration and investment are almost well 
developed provinces or cities;  forth, funding scale is  growing, and bring more effect to substantial 
economy and investing market;  fifth, the IPO of th e investment enterprises is the main way for its 
quit, especially, the GEM facilitate the fund to quit.  Private equity investing fund starts late in China, and there is no law to regulate or adjust it currently. 
China's regulation body is promoting the am endment of Security investment fund law,  and the main 
content of amendment is to bring the private fund (including private equity fund)into the adjustment 
scale, identify the supervision authority as well as supervision content, in order to promote the 
transparency and normalization of private fund.  Now the drafting and consulting work of the amendment has been finished.  WT/TPR/M/264/Add.1 
Page 316 
 
 
  Page 14 (Para 46) 
 
7. We appreciate China's intention to standardise investment access thresholds and conditions 
for entry of private capital into certain sectors and fie lds to create a market environment in favour of 
fair competition and equal access of economic entiti es under diverse forms of ownership.  We would 
like to seek clarification on whether the standar disation of investment access thresholds and 
conditions would cover all sectors which do not have explicit legal prohibitions against the entry of 
foreign private capital, and what the standardisations  would entail.  For instance, would this provide 
equal access thresholds and conditions for all foreign investors or both foreign and local investors?  
Answer:  Please refer to the Guideline Catalogue of Foreign Investment Industries and 
http://www.ndrc.gov.cn/ for further information. 
  
SOUTH AFRICA 
 REPORT BY THE SECRETARIAT (WT/TPR/S/264)     
 
Part III. Trade Policies and practices by measure: paragraph 99, page 50  IV. TRADE POLICIES AND PRACTICES BY MEASURE    
(i) Customs procedures, valuation, and rules of origin     
(a) Customs Procedures     
 The Secretariat states on page 25 that in 2010, th e average time required for customs clearance was 
1.7 hours for exports (2.4 hours in 2008) and 15.5 hours for imports (14.1 hours in 2008).      
4. What are the times required for customs clearance of the main entry ports into China?    
The Secretariat further notes that Import (and export) declarations may be made in paper or electronic 
form, and may be made either by consignors a nd consignees of import cargoes who are registered 
with Customs or by customs brokers.  At the time of customs declaration, importers must meet the 
requirements of Customs and the General Administ ration of Quality Supervision, Inspection, and 
Quarantine (AQSIQ).   
Answer : There is no such term as customs liquidation in the China's Customs Law and some foreign 
governments and enterprises are used to naming th e customs clearance by the term of customs 
liquidation.  The customs clearance refers to the s upervisory procedure to be completed on the spot of 
customs passage for cargo import and export.  For the time being, the consignor and consignee of 
imported cargoes only need to make one report to th e Customs in the form of a customs declaration 
and after being examined and verified by the Cust oms, the imported cargoes shall be allowed to pass 
the customs clearance. 
 
5. Are the customs documents for clearing goods required by registered customs brokers or 
AQSIQ in particular standardised or the same?    
Answer: The customs declaration of imported and exported cargoes in China is one written 
confirmation of the actual import and export of car goes.  Article 25 in the China's Customs Law 
stipulates that import and export declarations shall be  made in paper or electronic form and for now, a 
uniformed filling requirement for the customs decl aration has been defined by China Customs and 
specified for each item in the declaration form. 
  WT/TPR/M/264/Add.1 
 Page 317 
 
 
  Tariffs 
- Applied MFN tariff rates      
 
The secretariat report in paragraph 23, page 27 states that China's applied MFN tariff rates consist of 
"standard" applied MFN rates as well as "interim" MFN rates for certain products.  The interim tariff 
effectively replaces the applied MFN tariff; inte rim rates are not higher than the corresponding 
standard applied MFN tariff rates. 
 
6. Could China please explain the difference between standard and interim MFN tariffs and also 
list products affected?  
Answer:  In accordance with the Regul ations of the People's Republic of China on Import and Export 
Duties, the interim tariff rates apply to the im port goods subject to most-favored-nation rates, 
agreement tariff and in-quota duty rates within a sp ecific time limit; and the interim tariff rates shall 
apply if both most-favored-nation rates and interim tariff rates are available to the import goods. The 
list of the products subject to temporary tariff rate s in 2012 is specified in the Notice of the Customs 
Tariff Commission of the State Council on the Tariff Execution Plan 2012 (Shui Wei Hui [2011] No. 27) which is available on the official website of the Ministry of Finance (www.mof.gov.cn).  (b) Licensing 
 
On page 34, paragraph 41 the secretariat again re ports that Based on these rules, MOFCOM together 
with the General Administration of Customs (GAC ) and other relevant authorities issue the annual 
Catalogue of Goods Subject to Automatic Import Licensing Administration, and the Catalogue of 
Goods Subject to Import License Administration in the second half of every year in the form of a MOFCOM Announcement, which is to be implemented the following year.
5  These two catalogues 
list all the products subject to import licensing pr ocedures except for those under Tariff Rate Quota 
(TRQ) administration.  
7. Could China clarify whether the products that are not included in the list are exempt from 
licensing? 
Answer : The products that are not included in the list are exempt from licensing. 
 
(v) State Trading     
 
The secretariat report in paragraph 44 on page 35 i ndicates that Under the Foreign Trade Law, the 
State may subject certain goods to state trading, with a view, inter alia, to ensuring stable domestic 
supply, stabilizing prices, food safety, and prot ecting the environment a nd exhaustible resources.
6  
Products subject to state-trading (on imports) comprise:  grain (including wheat, maize, and rice), sugar, cotton, chemical fertilizer, tobacco,  crude oil, and processed oil (Table AIII.2).  
 
8. How do the STEs ensure that imports are sourced with no discrimination against any 
supplier?  How can a new supplier enter th e list of potential source of a commodity? 
                                                      
5 The latest Catalogue of Goods Subject to Automa tic Import Licensing Administration (for 2012) was 
issued on 10 December 2011.  MOFCOM  online information (in Chinese).  Viewed at:  h ttp://www.mofcom. 
gov.cn/ aarticle/b/e/201112/20111207908966.html.  The latest Catalogue of Goods Subject to Import License 
Administration (for 2012) was issued on 5 January 2012.  MOFCOM online information (in Chinese).  Viewed at: http://www.mofcom.gov.cn/aarticle/b/c/201201/2 0120107914675.html.  201220111210http://www.mofcom. 
gov.cn/aarticle/b/e/201 112/201112079089 66.html2012201215http://w ww.mofcom.gov.cn/aarticle/b/c/201201/2
0120107914675.html. 
6 China's latest notification to the WTO concerning the list of STEs was made in 2003 (WTO document 
G/STR/N/9/CHN/Add.1, 14 July 2003). WT/TPR/M/264/Add.1 
Page 318 
 
 
  Answer:  In accordance with the provisions of Artic le 52 under the Regulation of the People's 
Republic of China on the Administration of the Import and Export of Goods, the state-trading 
enterprises shall carry out their business activiti es under normal commercial conditions, and may not 
choose provider according to non-commercial considera tions, nor may they reject the entrustment of 
other enterprises or organizations on the basis of non-commercial considerations.  State-trading 
enterprises shall carry out commercial activities in accordance with relevant laws and regulations. 
When importing corresponding products, state trading enterprises shall follow the market rules, and 
decide their suppliers on their own w ithout interference by the government. 
 
(e) Sanitary and phytosanitary measures      The WTO report states on page 50 that ...the AQS IQ oversees food imports and exports, including 
legislation, and is responsible for quarantine and is the WTO Enquiry Point for SPS measures in 
China.  
 
9. Are SPS procedures streamlined and applied on a consistent manner in all entry ports into 
China?  
Answer: By law, yes.  In practice, the competen t authorities abide by the law and regulation 
concerned.  10. The SPS measures applicable to oranges are they applied on an MFN basis?     
Answer:  In the regard of the quarantine and mark et access of agricultural products, after the 
exporting country makes an application for expo rt products and provides relevant technical 
documents, China will assess the risk involved in the breaking out and control of epidemic diseases in 
animals and plants and discuss with the official quarantine administration in the exporting country in 
the respect of quarantine measures.  Upon the quara ntine conditions being determined jointly by the 
two sides, a protocol can be signed and import realized  
3) MEASURES AFFECTING PRODUCTION AND TRADE  
(i) Taxation and tax incentives   
The Secretariat report in paragraph 170 on page 65 st ates that since 2011, preferential taxes have been 
granted on energy-management contract project s for eligible energy services companies, in 
accordance with the Ministry of Finance and the State Administration of Taxation on Issues concerning the Value -added Tax, Business Tax a nd Enterprise Income Tax Policies for Promoting 
the Development of Energy Services Sector. En ergy services companies that meet prescribed 
conditions on contract-based energy management projects are exempted from the business tax and the 
value-added tax.  
11. Please explain the criteria that must be met in order to be considered for this tax exemption?  
Answer:  According to Notice on Policy Issues on VAT, Bu siness Tax, and Corporate Income Tax to 
Promote the Development of the Energy Conservation Service Industry (Cai Shui No. 110 [2010]), 
for the products that enjoy the asso ciated value-added tax and business tax policies, to be considered 
refers to the fact that the following conditions are complied with simultaneously: 1.  The correlation 
techniques used by energy service companies in their implementation of contract energy management 
projects shall be consistent with the technical re quirements specified in General Technical Rules for 
Energy Management Contract (GB/T24915-2010) released by the State Administration of Quality 
Supervision, Inspection and Quarantine and the Na tional Standardization Management Committee;  
2. Energy service companies shall sign Energy-S aving Benefit Sharing contracts with energy-
consuming enterprises and the format and content of th e contracts shall be in line with the provisions  WT/TPR/M/264/Add.1 
 Page 319 
 
 
  of Contract Law and those of General Techni cal Rules for Energy Management Contract 
(GB/T24915-2010) released by the State Administration of Quality Supervision, Inspection and Quarantine and the National Standardizati on Management Committee and so forth. 
 
IV. TRADE POLICIES BY SECTOR      
(i) Financial services       
 Part IV. Trade Policies by Sector: (ii) Financ ial services (a) Banking: paragraph 104, page 123      
 
The Secretariat Report notes that since 12 February  2010, foreign investors have been allowed to 
establish wholly owned personal cons umption finance companies;  previously foreign investment in 
personal finance was allowed only in the subsector of auto loans, through establishment of wholly 
owned or joint-venture auto-finance companies.  Personal consumption finance companies are not 
allowed to engage in auto loan business.  
 
12. Can China provide information on the number of wholly-foreign owned personal 
consumption finance companies established since 12 February 2010?  
Answer: By the end of 2010, there were four consumer finance companies, including one fully 
foreign-owned company and two joint ventures. The four consumer finance companies are:  Bank of 
Beijing Consumer Finance Co. Ltd (wholly owned by Bank of Beijing);  Bank of China Consumer 
Finance Co. Ltd (jointly owned by Bank of Ch ina, Brilliance Group, and Shanghai Lujiazui Finance 
& Development Co. Ltd);  Sichuan Jincheng Consum er Finance Co. Ltd (joint-owned by Bank of 
Chengdu and Hong Leong Bank, Malays ia);  and PPF Consumer Fina nce Co Ltd (wholly owned by 
PPF Group, Cze).  
 
Part IV. Trade Policies by Sector: (ii) Financ ial services (a) Banking: paragraph 122, page 128      
 
The Secretariat Report notes that since 2004, lending and deposit taking by banks have been deregulated with a few constraints remaining.   13. Can China elaborate on these remaining constraints?     
Answer: China has deregulated lending and deposit ta king by banks since 2004, the commercial 
banks can make its own decisions based on the ma rket situations.  Nevertheless, the commercial 
banks shall abide by the relevant regulations when  they carry out the lending and deposit taking 
activities.  Pursuant to Commercial Bank Law of the People's Republic of China, a commercial bank 
shall abide by the principle of equality voluntarin ess fairness honesty and good faith in doing business 
with its clients.  A commercial bank shall protect  its depositors' legitimate rights and interests from 
encroachment by any organization or individual .  In doing credit business a commercial bank shall 
strictly examine the credibility of a borrower and pe rsist in extending loans against collateral in order 
to ensure recalling loans on time.  A commercial bank is protected by law to retrieve the principal and 
interests of a loan from the borrower thereof in accordance with the law.  A commercial hank shall 
abide by the relevant provisions of the law and administrative decrees and regulations in doing 
business and shall not impair the interests of the state or the public.  A commercial bank shall abide 
by the principle of fair competition in doing its business and refrain from unfair competition. 
 China believes that the above-mentioned stipulati ons are common regulatory requirements rather than 
restrictions. 
 WT/TPR/M/264/Add.1 
Page 320 
 
 
  Part IV. Trade Policies by Sector: (ii) Fi nancial services (a) Banking: paragraph 126, 
page 129-130     
 The Secretariat Report notes that with regard to n on-interest income, certain services are subject to 
regulated prices.   
14. Could China elaborate what services are refe rred to by certain services?       
Answer: According to Regulatory Measu res on Service Charge of Commercial Bank (which is still in 
the process of soliciting opinions and comments), th e government-guided price, government-set price 
and market-adjusted price will be implemented resp ectively based on the property, characteristic and 
market competition of commercial bank.  For the basic commercial bank services related closely to 
peoples lives, government-guided or government-set price will be carried out.  These services include the bank draft, the promissory note, the cheque, the credit transfer, the entrusted collection of payment 
and other RMB basic settlement services.  For transaction that do not fall into the categories the 
government guided or set price, the market-adjusted price is implemented.  
 
Part IV. Trade Policies by Sector: (ii) Financia l services (b) Securities: paragraph 134, page 131      
 
The Secretariat Report notes that since 4 May 2011 , qualified foreign institutional investors were 
allowed to engage in stock index futures trading. 
 
15. Can China provide details regarding the cr iteria to assess qualified foreign institutional 
investors?  
Answer: According to Measures on Administration of Do mestic Securities Investments of Qualified 
Foreign Institutional Investors, Qualified Foreign Institutional Investors hereinafter referred to as 
QFII are defined as overseas fund management institu tions insurance companies securities companies 
and other assets management institu tions which have been approved by China Securities Regulatory 
Commission to invest in China's securities ma rket and granted investment quota by State 
Administration of Foreign Exchange.   
A QFII applicant should meet the following criteria (1 ) The applicant should be in sound financial and 
credit status should meet the requirements set by CSRC on assets size and other factors and its risk control indicators should meet the requirements set  by laws and securities authorities under its home 
jurisdiction, (2) Employees of the applicant should meet the requirements on professional 
qualifications set by its home country/region, (3) The applicant should have sound management 
structure and internal control system should co nduct business in accordance with the relevant 
regulations and should not have received any substantial penalties by regulators in its home 
country/region over the last three years prior to application, (4) The home country/region of the 
applicant should have sound legal and regulator y system and its securities regulator has signed 
Memorandum of Understanding with CSRC and h as maintained an efficient regulatory and 
co-operative relationship, (5) Other criteria as stipulated by CSRC based on prudent regulatory 
principles. 
 
Part IV. Trade Policies by Sector: (ii) Financia l services (b) Securities: paragraph 141, page 133    
 
The Secretariat Report notes that Securities comp anies may establish subsidiaries to specialize in 
financial products and other investments beyond the range of securities operation with their own 
capital as defined in the regulation, however, sec urities companies may not provide finance or 
guarantees to these subsidiaries.    WT/TPR/M/264/Add.1 
 Page 321 
 
 
  16. Can China explain whether this applies to bot h foreign and domestically owned securities 
companies?        
Answer : Regulations on the Investment Range and ot her Related Issues of Securities Companies' 
Operation on Their Capitals, which entered in forc e on 1 June 2011, is equa lly applied to domestic 
and foreign securities companies . 
 
Part IV. Trade Policies by Sector: (ii) Financia l services (b) Securities: paragraph 145, page 133    
 
The Secretariat Report notes that Securities investme nt consultants must acquire the qualification of 
securities investment consultant, and be registered in the Securities Association of China.     
 
17. Can China elaborate whether foreign qualifications (securities investment) are recognised?       
Answer:  It depends on the specific situations  of mutual qualification recognition.  
 
Part IV. Trade Policies by Sector: (ii) Financia l services (b) Securities: paragraph 148, page 134      
 
The Secretariat Report notes that since 2005, commerc ial banks have been allowed to establish fund 
management companies under a pilot programme.  Currently, eight commercial banks have fund 
management companies as subsidiaries.  The author ities state that the pilot programme is completed 
and under evaluation to determine whet her its scope will be enlarged.  
 
18. Can China indicate how many of th ese eight commercial banks are foreign?  
Answer:  According to our knowledge, the above-menti oned eight commercial banks do not include 
foreign banks.  19. Can China provide further information about th e progress to date of the evaluation process to 
determine whether the scope of the pilot programme will be enlarged?  
Answer: Currently, evaluation of the above-mentioned p ilot programme is still ongoing, the relevant 
authorities will determine whether to enlarge the pilo t programme or not on the base of evaluation.   
 
Part IV. Trade Policies by Sector: (ii) Financia l services (c) Insurance: paragraph 158, page 136  
 
The Secretariat Report notes that insurance compan ies and their branches must operate business 
activities within the territorial boundary of the province/municipality/autonomous region in which 
they are registered.  Insurance co mpanies must establish at least one branch in the territory at the 
provincial level where they intend to operate busin ess.  However, re-insurance companies, including 
branches of foreign re-insurance companies, are allowed to operate nationwide.      
20. Can China explain whether all the regulations mentioned above, apply equally to local and 
foreign companies?  
Answer: Rules on Administration of Insurance Compan ies stipulates specific requirements for the 
application and establishment procedures of branch es, which are equally applied to domestic and 
foreign insurance companies.  
 WT/TPR/M/264/Add.1 
Page 322 
 
 
  Part IV. Trade Policies by Sector: (ii) Financia l services (d) Financial Information: footnote 149, 
page 137      
 
Footnote 149 of the Secretariat Report notes that the decision whether to grant business approval is 
made within 20 working days upon recei pt of application, and each approval is valid for two years.     
 
21. Can China elaborate whether reasons are provided for rejection of applications?  
Answer: According to Article 7 of Administrative Ru les on Foreign Institutions Provide Financial 
Information within Chinese Territory, the State C ouncil Information office of China (SCIO) shall 
make a decision within 20 working days from the date it accepts an application for administrative 
permission.  Where the application of an applican t is in line with the statutory requirements and 
standards SCIO shall make a decision in writing on approving administrative permission, and issue the relevant certification.  Where SCIO makes a decision on refusing to approve the application SCIO 
shall inform the applicant in writing and state its reasons.  Transport   Part IV. Trade Policies by Sector: (iv) Transp ort (a) Maritime transport services: paragraph 
219, page 149  
 
The Secretariat Report notes that a prohibition in principle exists in regards to foreign-funded 
companies and vessels engaging in pushing and towing services.  Moreover, it acknowledges that 
since some foreign ports have foreign shareholders, the implication exists that there is some foreign 
investment in this area.  22. Can China provide details as to the objectives of the prohibition?  
Answer: According to China's laws and regulations, fo reign-funded shipping enterprises and foreign 
vessels are strictly forbidden to engage in pus hing and towing service between Chinese domestic 
ports.  It is also an international common practice for countries to reserve internal waterways transport 
to domestic enterprises and vessels. In addition,  China has no relevant accession commitment in 
internal waterways transport.  This prohibition is based on the position and principle that China 
always holds for reserving cabotage traffic rights.  At present, pushing and towing service giving assist ance to vessels berthing and un-berthing within 
Chinese port zone belongs to the category of port operator services, which is outside the scope of 
cabotage transport services and has no contradicti on with China's principle of reserving cabotage 
traffic rights.  
Tourism 
 Part IV. Trade Policies by Sector: (v) Tourism (b) trade regime: paragraph 306-8, page 165       
 
The Secretariat Report notes that that a pilot program  has been implemented to determine whether to 
open the outbound tourist industry to foreign funded travel agencies.  The Report states that if the results of the program are deemed successful it w ill be extended to other foreign travel agencies 
through a licensing mechanism.  It goes on to stat e that 58 travel agencies have been licensed to 
operate.  
 
23. Can China explain whether the fact that 58 li censes have been issued means that the pilot 
program has in fact become the de jure state of affairs?       WT/TPR/M/264/Add.1 
 Page 323 
 
 
  Answer : By now, three foreign funded travel agencies ha ve been licensed on a pilot basis to operate 
the outbound tourism business for residents of Mainland China.  They are TUI China Travel Co. Ltd., 
CITS American Express Travel Services Ltd, and JTB New Century International Tours Co. Ltd.  
 
24. Can China elaborate on the criteria which determine the issue of a license?       
Answer : As to the license criteria of travel agency operating the outbound tourism business for 
residents of Mainland China on a pilot basis, please  refer to the Tentative Measures for Supervising  
Pilot Operation of Outbound Tourism Businesses by  Sino-foreign Joint Venture Travel Agencies 
jointly issued by the Ministry of Commerce and National Tourism Administration in 2010 (No. 33 of 
the Ministry of Commerce). 
 
Environmental services  Part IV. Trade Policies by Sector: (vi) Envi ronmental services: paragraph 314, page 166     
 
The Secretariat Report notes that China is still designing a policy (for environmental services in general) as environmental facilities were originally  regulated like public utilities, largely municipality 
owned.   25. Can China provide details and/or timelines as to  when this policy will be finalized and/or 
implemented?  
Answer : The 12
th Five-Year Plan for the National Environmental Protection issued in 
December 2011, presented that China will strive to develop environmental protection industry, make 
industry statistical standards and formulate relevant  policies and measures to improve the efficiency 
of project design and operation in environmental prot ection industry.  Currently, some relevant laws 
and regulations have be en promulgated with detailed incentives to some specific environmental 
service sub-sectors, and policies of utilizing forei gn capital in China also encourage foreign investors 
participating in environmental services efficiently.  During the Twelfth Five Plan Period, China will 
continue to actively promote the development of e nvironmental service.  Please log into the website 
of Ministry of Environmental Protection of China to get further information.  Part IV. Trade Policies by Sector: (vi) Enviro nmental services: paragraph 314, page 166   
 
The Secretariat Report notes that the Tianjin Municipal Government allows foreign capital 
participation in franchising activities of municipal utilities such as sewage treatment and waste 
disposal. 
 
26. What are the minimum capital requirements for foreign participation in these franchising 
activities? 
Answer: As regard to the issue of registered capital,  provisions about foreign-invested enterprises 
registered capital and paid-up capital in Rules on the Registration of Companys Registered Capital 
paid-up capital states the minimum amounts for diff erent types of enterprises:  RMB 30,000 for 
limited liability companies, RMB 100,000 for one-person limited liability company, and 
RMB 5 million for incorporated corporation.   Tianjin City government encourages social capital a nd foreign capital participate in the construction 
of environmental protection indus try in according to relevant regulations.  However, for the 
distinctiveness and importance of sewage treatment a nd garbage disposal for municipal works, local 
governments in different provinces may have specific requirement on minimum amount of registered capital for companies participating in the project bidding. WT/TPR/M/264/Add.1 
Page 324 
 
 
   
Part IV. Trade Policies by Sector: (vi) Envi ronmental services: paragraph 316, page 167      
 The Secretariat Report notes that China's environmental services commitments under the GATS 
excludes horizontally, environmental quality monitoring and pollution source inspection. 
 
27. Can China indicate whether these environm ental standards are uniformly applied at a 
national level?  
Answer : According Environment Protection Law of the People's Republic of China, Ministry of 
Environment Protection should establish national standards for the discharge of pollutants under the guidance of the national standards for enviro nment quality and the country's economic and 
technological conditions.  The people's governments of provinces, autonomous  regions and municipalities may establish their 
local standards for the discharge of pollutants for ite ms not specified in the national standards;  with 
regard to items already specified in the national st andards, they may set up local standards which are 
more stringent than the national standards and report the same to the competent department of 
environmental protection administration under the Stat e Council for the record.  Units that discharge 
pollutants in areas where the local st andards for the discharge of pollutants have been established shall 
observe such local standards. 
 The Secretariat Report notes that logistics-related laws, regulations and rules are spread out across 
several Ministries and agencies.   
 
Postal and courier services      
 
Part IV. Trade Policies by Sector: (vii) Postal  and courier services: paragraph 324, page 168      
 
The Secretariat Report notes that the postal aut hority has also strengthened its administration on 
express delivery services as well as the licensing requirements for express delivery.  The Secretariat 
Report also notes that the postal authority had issued 6,891 express delivery licenses and approved 
foreign-invested enterprises to engage in express delivery services.   
28. Can China indicate the number of approved foreign-invested enterpri ses in express delivery 
services?  
Answer : The Chinese postal authority has approved 60 fo reign-invested enterprises to engage in 
express delivery services by July 2011. 
 
29. Can China provide more detail about the minimum capital requirements for a foreign-
invested enterprise to engage  in express delivery services?  
Answer : According to Article 52 of Postal Law, an y enterprise that applies for a express delivery 
services license should meet the registered capital requi rements as (follows):  For operators within the 
province autonomous region or municipality directly  under the Central Government, the registered 
capital shall not be less than RMB 500,000 yuan ;  For operators across the province autonomous 
region or municipality directly under the Central G overnment, the registered capital shall not be less 
than RMB 1,000,000 yuan;  For operators providi ng international express delivery services, the 
registered capital shall not be less than RMB 2,000,000 yuan.  These requirements apply to all the 
express delivery agencies established in China, incl uding both foreign-invested and domestic ones. 
  WT/TPR/M/264/Add.1 
 Page 325 
 
 
  Distribution services      
 Part IV. Trade Policies by Sector: (viii) Distri bution services: (a) Overview paragraph 326-7, 
page 169      
 
The Secretariat Report notes that China has approved the establishment of 748 foreign-invested retail 
enterprises.  The Report further notes that in January 2010, th ere were 604 foreign-invested 
comprehensive retail enterprises.  
 
30. Can China please explain the difference betw een a foreign-invested retail enterprise and a 
foreign-invested comprehensive ret ail enterprise?       
Answer: Comprehensive retail enterprise normally mean s department store, superstore, shopping 
mall etc., and retail enterprise may also include  convenience store and specialty store.   
 
Part IV. Trade Policies by Sector: (viii) Dist ribution services: (a) Overview paragraph 328, 
page 169      
 
The Secretariat Report notes that the Ministry of Commerce has plans to improve relevant rules and 
regulations in order to prevent large retailers from abusing their advantageous position in the market. 
 
31. Can China elaborate on the procedural and subs tantive aspects of the proposed regulatory 
improvements?  
Answer: Domestic coordination is under way to assess to  elaborate on such procedure and substance, 
but it will take more time to get such information.   Logistics services  Part IV. Trade Policies by Sector: (vi) Logistics services: paragraph 345, page 174     
 
The Secretariat Report notes that more than 700,000 logistics enterprises are re gistered in China, but 
less than 1% of them are truly integrated logistics enterprises.   
 
32. Can China elaborate as to whether there a re regulatory barriers that prevent a higher 
incidence of truly integrated logistics enterprises?     
Answer:  Chinese relevant administrations are in the process of understanding more specific condition 
on this issue, and then do further study work in this regard.   
 
Part IV. Trade Policies by Sector: (vi) Logistics services: paragraph 358, page 176     
 
The Secretariat Report notes that logistics-related laws, regulations and rules are spread out across 
several Ministries and agencies.       
 
33. Does China intend to rationalize this process and ma ke it more user-friendly?           
Answer: China insists that rationalize the process of maki ng logistics-related law and regulations is of 
great importance in improving the efficiency of lo gistics service and drivi ng rapid development of 
national economy.  Relevant administrations  including National Development and Reform 
Commission, Ministry of Transport, Ministry of Ra ilways, Ministry of Commerce, State Post Bureau 
and Civil Aviation Administration of China have all participated in the formulating of policies and WT/TPR/M/264/Add.1 
Page 326 
 
 
  measures in promoting the development of logistics service industry.  During the Twelfth Five Plan 
Period, China will continue to actively promote the development of this sector 
 
 
SWITZERLAND 
 REPORT BY THE SECRETARIAT 
 
II. Trade Policy Regime: Fr amework and Objectives 
(1) Institutional and Legal Framework 
(i) Transparency 
 
In Paragraphs 11-14  the Secretariat's report notices that the (degree of) implication of foreign 
investors potentially affected by a new law, rule, or regulation in the solicitation of the public on said 
law, rule, or regulation appears to depend on the regulating authority.  Could China elaborate under 
which conditions and to which degree potentially aff ected foreign investors or  associations thereof 
may participate in these consultations?  Furtherm ore, how are these consultations documented, and 
are these records available to the public? 
 Answer : China understands that its transparency commi tment for WTO accession is to give a period 
after the promulgation of laws, regulations and rule s related to or affecting trade in goods, trade in 
services and trade-related intellect ual property right or foreign exchange control prior to their 
enforcement.  It is not mentioned in China's commitm ent to solicit public opinions for the drafts of the 
laws, regulations or rules to be promulgated.  Neve rtheless, in order to advance scientific legislation 
and democratic legislation and im prove the quality of legislation, the Chinese Government has always 
made unremitting efforts to improve the transparen cy of legislation, promote solicitation of public 
opinions on legislation drafts and expand public participation.  Sin ce 2008, public opinions have been 
solicited for draft administrative laws and regulations which are all published on the 
http://www.chinalaw.gov.cn except tho se to be kept secret in line with law.  And public opinions have 
also solicited for draft regulations of various departments on their websites or 
http://www.chinalaw.gov.cn.  All people includin g foreign investors can propose opinions and 
suggestions.  With regard to the transparency of foreign capita l policies, foreign capital authorities have solicited 
public opinions in accordance with laws, regulations and rules.  When amending the Catalogue for the 
Guidance of Foreign Investment Industries 2011  and promulgating the regulations on anti-monopoly 
review and national security review concerning fo reign capital, foreign capital authorities solicited 
public opinions by publishing the drafts on the webs ite and absorbed reasonable suggestions from all 
parties including foreign-funded enterprises and chambers of commerce.  Up till now, China has not made provisions in relevant laws  and regulations on the written documents and records of public 
opinion solicitations and consultations.  
 
(3) Trade Agreements and Arrangements 
(iii) Unilateral preferences 
 
We commend China for having opened up to impor ts from LDCs in 2011, as mentioned in 
paragraph 37 .  Our questions are as follows: 
 1. What has been the proportion of imports subj ect to these preferences to overall imports in 
2011?   
 
Answer : We are in the process of identifying data that can help determine the exact problem if such 
imports.  WT/TPR/M/264/Add.1 
 Page 327 
 
 
   
2. Does China grant unilateral tariff concessions to other (non LDC) developing countries? 
 
Answer : China has not grant unilateral tariff concessi ons to other (non LDC) developing countries till 
now.  
(4) Foreign Investment Regime 
(ii) Regulatory Framework  
 
In Paragraph 44 , the report states that authorities noted that foreign investors may be allowed to own 
some shares in state-controlled enterprises in cert ain sectors.  In which sectors are foreign investors 
allowed to own shares in state-controlled enterp rises?  What are the foreign ownership caps? 
 
Answer: As explicitly pointed out in the Several Opin ions of the State Council on Better Utilizing 
Foreign Investment issued in 2010, foreign in vestors are encouraged to participate in the 
reconstructing, transformation, acquisition and reor ganization of Chinese enterprises in the forms of 
equity participation and M&A among others.  As a basic policy guiding foreign investors to invest 
specific industries, the Catalogue for the Guid ance of Foreign Investment Industries divides 
encouraged, allowed, restricted and prohibited sect ors for foreign investment and stipulates explicit 
requirements on the investment way and shareholding ratio in certain sectors.  In sectors open to 
foreign investment, China doesn't impose restrictions  on foreign investment based on company nature.  
The specific provisions of the Catalogue for the Guidance of Foreign Investment Industries are 
equally applicable to foreign investors particip ating in state-controlled and non-state-controlled 
enterprises, including requirements on share proportion.   (iv) Bilateral investment treaties  Paragraph 58 mentions that China has c oncluded four new bilateral investment agreements with 
Chad, Libya, Uzbekistan, and Congo (DRC) between 2010 and 2011.  What is the coverage of the new 
bilateral investment agreements:  Is it limited to  the post-establishment phase (investment protection) 
or does it also include the establishmen t of investments (pre-establishment phase)? 
 
Answer:  In these new bilateral investment agreements, the contents concerning national treatment are 
only limited to the post-establishment phase, but the contents concerning most-favored-nation 
treatment includes the pre-establishment phase.  
 
III. Trade Policies and Practices by Measure 
(1) Measures Directly Affecting Imports 
(i) Customs Procedures, valuation and rules of origin 
 Paragraph 1  states that under the Foreign Trade Law and the Rules for the Registration of Foreign 
Trade Operators, individuals as well as legal perso ns and other organizations need to be registered 
as foreign trade operators with the MOFCOM or its authorized bodies as well as with Customs before 
filing customs declarations.  Which are the precise re gistrations or licensing requirements?  Are these 
rules publicly available in English?  
Answer: Rules for Registration of Foreign Trade Op erators (MOFCOM Decree No. 14 of 2004) was 
enacted and came into force on 1 July 2004 as requi red by the revised Foreign Trade Law of the 
People's Republic of China of 2004 to implement the accession commitment to liberalize trading right within 3 years after WTO accession.  The registration of foreign trade operators serves the purpose of statistics and information collec tion and facilitation of customs procedures, and there involves no 
approval procedures.  For informati on required in the registration process, please refer to the Rules for 
Registration of Foreign Trade Operators, of which a full text English translation was provided to the WT/TPR/M/264/Add.1 
Page 328 
 
 
  WTO Council for Trade in Goods when the Counc il had its annual China transitional review in 
November 2004.   In the last sentence of paragraph 10 , it is mentioned that PSI requirements have not been notified to 
the WTO.  In 2008, China answered that Chin a had notified the revised Implementing Rules for 
Import and Export Commodities Inspection to  both TBT and SPS Committees (G/TBT/N/CHN/181 
and G/SPS/N/CHN/96).  However, TBT, SPS and PS I agreements are not the same and have each 
separate notifications requirements.  Does China in tend to comply with article 5 of the PSI 
agreement?  
 
Answer : China is studying and researching on the notif ication of PSI, and will notify to WTO when 
we finish this job. 
 
According to paragraph 11 , the current list of designated forei gn institutions was not made available 
to the Secretariat by China.  Could China provide the current list of designated foreign institutions to 
conduct PSI and to issue certificates?   
 
Answer : Lists of the recognized institutions to conduc t PSI of import of solid waste which could be 
used as raw materials include: 
1. CHINA INSPECTION COMPANY LTD. 
2. CCIC AUSTRALIA PTY. LTD.  
3. CCIC CANADA INC. 
4. CCIC MARRSEILLE SARL 
5. CCIC BREMEN GMBH 
6. JAPAN CHINA COMMODITES INSPECTION LTD. 
7. CHINA CERTIFICATION & INSPEC TION GROUP JAPAN CO.LTD 
8. CHINA CERTIFICATION & INSPEC TION GROUP ALMATY CO.LTD. 
9. CCIC MACAU COMPANY LTD. 
10. CCIC MALAYSIA CO.LTD. 
11. CCIC MN CO.,LTD. 
12. CCIC EUROPE B.V. 
13. CCIC NEW ZEALAND CO. LTD. 
14. CCIC PHILIPINES INC. 
15. CCIC OFFICE IN THE RUSSIAN FEDERATION 
16. CCIC SINGAPORE PTE.LTD. 
17. CCIC SUCURSAL EN ESPANA 
18. CCIC THAILAND CO., LTD. 
19. CCIC DUBAI CO., LTD. 
20. CCIC LONDON LTD. 
21. CCIC NORTH AMERICA INC. 
22. 
CCIC SOUTH AMERICA S.R.L. 
23. CCIC KOREA CO., LTD. 
24. CCIC INDIA LTD. 
 
(ii) Tariffs 
 
According to paragraph 25 , The authorities maintain that applied non-ad valorem duty rates are 
adjusted annually so that their AVEs do not exceed their corresponding bound rates, which are all ad 
valorem rates in accordance with  China's accession commitments.  As bound rates are ad valorem 
and applied rates are non-ad valorem, there is a possibility that AVEs might exceed the bound rates, reflecting fluctuating import prices.  Could China indicate how it controls and ensures that applied 
non-ad valorem rates are not above the bound ad valo rem rates as fluctuations may occur due to the 
origin of the good, the price of the imported good, etc.?  WT/TPR/M/264/Add.1 
 Page 329 
 
 
   
Answer : Since China's WTO accession, China has always  been adopting the specific duty (equivalent 
to ad valorem  rate) converted in strict accordance with the ad valorem  rate committed by China for 
WTO accession and re-calculating the rate of specifi c duty each year so that the actual rate will not 
exceed the bound rate committed by China.  The conv ersion is conducted mainly based on the average 
import price in recent years (the last four years) pr ovided by the Customs, a nd, with respect to some 
categories, the influence of such factors is elimin ated as no import records in a certain year or large 
fluctuation in the import price in a certain year. 
 
(iv) Import prohibitions and licensing 
 Paragraph 38 : In 2011 China applied import prohibitions on inter alia second-hand/used items or 
scraps (e.g. clothes, precious metals, machinery and electronic equipment, aluminum containers for 
compound or liquefied gas, transpor t equipment).  Which criteria does China use to define second-
hand products and how does China distinguish th em from remanufactured goods?  Moreover, could 
China kindly provide us with a detailed explanati on on the reasons for imposing import prohibitions 
on those products? 
 
Answer: Import prohibitions on certain second-hand/used items or scraps are implemented to protect 
human, animal or plant life or health, and environm ent.  To define and distinguish second-hand/used 
items or scraps China has relevant rules in place, for example  Rules on Administration of Inspection 
and Supervision of Import of Used Machinery an d Electrical Products (AQSIQ Decree No. 37) and 
Rules on Inspection and Supervision Procedures for Import of Used Machinery and Electrical 
Products (AQSIQ Decree No. 53).  (v) State trading  Paragraph 44 (as well as IV. Trade Policies by Sector, (1) Agriculture, (ii) Agriculture policies, 
Paragraph 33 ): The Secretariat's report states that for a number of agricultural products such as 
grains or sugar and natural resources such as oi l or fertilizer, state trading enterprises intervene 
upon import. Could China explain what type of in tervention for those products is foreseen?  How does 
China assure that the intervention by state-trading enterprises is of a non-discriminatory nature?  
With regard to agricultural produc ts, what is the relation betwee n intervention upon import and the 
the Minimum Purchase Prices scheme as described in Para 33 of Chapter IV (1)  of the Secretariat's 
report?  How does China assure t hat speculation by the entitled companies, causing negative impact 
on net food importing countries, is excluded? Does China envisage removing those products from 
state trading requirements in the near future?  
 
Answer: State-trading enterprises refer to those enterprise that have acquired the qualification to 
engage in import and/or export trade of produc ts listed in Annex 2A of China's WTO Accession 
Protocol.  Operations of these state trading ente rprises are not interventions upon the market because 
they essentially are all normal commercial operations  free from government intervention.  Decisions 
of these enterprises to import or export and on quantities and timing are independently made by themselves based on market conditions including pri ces in the international market.  The concept of 
state trading stops at the qualification to engage in import and/or export trade of products listed in 
Annex 2A of China's Accession Protocol.  It does no t involve daily operation of the enterprises.  In 
view of this China does not understand the meani ng of the question saying how to assure that the 
speculation by the entitled companie s (state-trading enterprises), causing negative impact on net food 
importing countries, is excluded.  As to the changes of the products listed in Anne x 2A of China's WTO Accession Protocol, vegetable 
oils were no longer subject to state trading (import) since January 2006, tea was no longer subject to 
state trading (export) since May 2006, and silk was no longer subject to state trading (export) since WT/TPR/M/264/Add.1 
Page 330 
 
 
  January 2005.  For soy bean, unbleached silk, co tton yarn and woven fabrics of cotton in the 
Annex 2A, China has not applied state trading on them since its WTO accession.  For rest of the products there have been no changes. 
 
As to the Minimum Purchase Pric es scheme, it is applied to onl y few key agricultural products of 
grains to safeguard food security and to increase th e income of farmers.  It has no relationship with 
import and export trade including state trading.  Furthermore (in reference to paragraph 44 , as well as (2) Measures Directly Affecting Exports, (vii) 
State trading on exports, paragraph 152 ), China's latest notification on state-trading enterprises was 
made in the year 2003 whereas the decision of th e Council for Trade in Goods on 26 November 2003 
demands notifications on a biannual basis.  Could China indicate when it will update its notification 
on state trading enterprises?  What are the developm ents concerning state-trading enterprises since 
China's last no tification in 2003? 
 Answer: The state trading regime of China, including the products covered and the STR enterprises, 
did not have significant changes except that a coup le of products were no longer subject to state 
trading administration.  Besides, for a few products s ubject to state trading, some statistics required in 
the notification are not produced officially in China.  In view of these, China did not submit its state 
trading notification.  That said, if members expect China to submit the notification despite of the few 
changes, China will try to submit the notification as soon as possible.  
(vi) Contingency trade measures 
 
In paragraph 51 , the Secretariat's report indicates that MOFCOM may self-initiate an anti-dumping 
investigation if it has sufficient evidence of the exi stence of dumping, injury and causal link.  In the 
absence of an anti-dumping complaint by a domestic  enterprise, person or organization on behalf of 
the domestic industry, could the Chinese authorities exp lain on the basis of what type of evidence 
MOFCOM would be able to self-in itiate an anti-dumping investigation? 
 
Answer: Under such circumstances, MOFCOM would self-initiate an anti-dumping investigation in 
accordance with the WTOs provisions on implementing paragraph 5.6 and 5.2 agreed in Article 6 of 
GATT 1994.   
In paragraph 60 , the Secretariat's report indicates that Artic le 37 of the AD Regulations provides that 
the imposition and collection of anti-dumping duties s hall be in the public interest.  In the same 
paragraph, the Secretariat also notes that in 20 05 already China had informed the Committee on 
Anti-dumping Practices that it was still studying ho w to address public interest considerations in 
anti-dumping investigations.  To this day, acco rding to the Secretariat, there are still no published 
rules on how the consideration of public interest has  to be taken into account in the context of an 
anti-dumping investigation in Chin a. Given that the Chinese authorities are using the anti-dumping 
trade remedy quite intensively (117 AD measu res taken by China were in effect as of 
December 2010), could the Chinese authorities explain how in practice they do take into account the 
interests of the public at large in the conduct of  anti-dumping investigations and ensure that these 
issues are adequately and equitably taken into a ccount across all anti-dumping investigations?  
 
Answer: In anti-dumping investigations, Chinese inves tigation authorities hold public hearings and 
opinion statement meetings among others to provide adequate opportunities for all parties, including 
involved producers and exporters, government of  the involved country, upstream and downstream 
enterprises, relevant trade associations as well as im porters, to listen to their opinions, and seriously 
take their relevant appeals into account so as to ensure objective, impartial and equitable 
investigations.  
  WT/TPR/M/264/Add.1 
 Page 331 
 
 
  (vii) Standards and other technical requirements 
 
According to paragraph 85 four levels of standards exist in China:  national, trade, local and 
enterprise standards.  When refe rring to Chinese standards in technical regulations, and assuming 
that no relevant international standard exists, woul d only provincial regulators refer to a local or 
trade standard?  Which organizations elaborate local and trade standards and how are these 
organizations affiliated to the Standardization Admi nistration of China (SAC)?  How do those 
organizations take international standards into acco unt?  What are the requirements for companies to 
participate in the elaboration of local and trade st andards?  Does the Code of Good Practice for the 
Preparation, Adoption and Application of Standards as set out in Annex 3 of the WTO-TBT Agreement also apply for local and trade standards?  
Answer : When referring to Chinese standards in technical  regulations, and assuming that no relevant 
international standard exists, provi ncial regulators shall follow national standards, trade standards, and 
local standards.  
 The formulators shall be responsible  to elaborate, and under this principle, trade standards shall be 
elaborated by executive bodies of the State Council th at approved these trade standards, while local 
standards fall into the responsibility of standardization authorizes of corresponding provinces, 
autonomous regions and municipalities.   
 SAC unifies the management of standardizati on across the county, but these authorities are not 
subordinate to SAC, SAC coordina te approval, review, numbering and publishing of all the national 
standards; relevant executive organs of the Stat e Council formulate trade standards;  and local 
standards fall into the responsibility of standardization authorizes of corresponding provinces, 
autonomous regions and municipalities.  
 Adoptions of international standards are encouraged.  
 
(viii) Government procurement 
 
Paragraph 113 : The report identifies a differen ce between the figure of 2 % of GDP provided by the 
authorities and the average for developing countries of 10-15 % of GDP estimated by other sources. 
Could the Authorities of China provide views on the origin of these differenc es in the appreciation to 
the volume of government procurement (GP) in China?  Table III.6 indicates that the volume of GP at 
central level remained stable - or even decreased for c onstructions  over the past years.  What is the 
reason of that stabilization?   
 
Answer : The China Government Procurement Law appli es to a very limited scope only including the 
procurement projects conducted by the various gove rnmental authorities, public institutions and 
organizations from fiscal funds.  Therefore, the sh are of government procurement in GDP is smaller 
than the average level of the developing countries. 
 In recent years, the volume of government procur ement at the central level remains stable and 
accounts for no more than 10% of the total volume of government procurement around the whole country.  The volume of construction works proc urement is small mainly because the government 
construction works procurement is carrying out th rough tendering and bidding and governed by the 
tendering and bidding law not completely taken into account in the statistics of government 
procurement.  
Paragraph 116 : SOEs might be considered as utilities  in  the sense of state monopolies - covered for 
GPA Members by annex 3 of the GPA.  These utilitie s are operating with exclusive rights based on a 
specific law providing them with the status of a m onopoly (water supply, energy, etc.).  In return to WT/TPR/M/264/Add.1 
Page 332 
 
 
  this competitive advantage, the procurement legisl ations are requesting these monopolies to create 
competition among suppliers when they have to pu rchase goods and services in order to run their 
activities.  Could China explain why it does not consider procurements by  SOEs as government 
procurement? What is the scope of the definition of government procurement used by the Authorities 
of China?   
 
Answer : The Chinese state-owned enterprises are differ ent from the utilities entities listed in annex 3 
of the GPA.  In accordance with the Law of the People's Republic of China on State-owned Assets of 
Enterprises, the Chinese state-owned enterprises are th e independent market participants responsible 
for their own operations, profits and loss.  Procur ement by SOEs is an ordinary operation act of 
enterprises, which the government will not interfere.  Chinese government procurement means the procur ement of the goods, the construction and the 
services within the statutory centralized procur ement catalogue or over the statutory procurement 
thresholds by the various governmental authorities,  public institutions and organizations from fiscal 
funds.  
(2) Measures Directly Affecting Exports 
(iv) Tax rebates on exports  
 
In paragraph 143 , the Secretariat's report indicates that VAT may be rebated on exports, although the 
rebate rates are, by and large, lower than the VAT  rates actually paid.  The Secretariat's report 
further notes that the difference between the two rat es constitutes a levy on exports, which may in turn 
constitute assistance to downstream processing of th e products affected and could affect China's 
terms of trade.  Could the Chines authorities provide an exhaustive list of the products affected by this 
levy on exports?  Also, how do the Chinese authoriti es view these rebates favoring the downstream 
processing of the products affected in the context of  China's obligations under Article 3.1(b) of the 
SCM Agreement?  
Answer :  Tax rebate is an international normal practice.   China keeps the rebate rates generally lower 
than the rates actually paid mainly because of the in sufficient fiscal capacity.  We consider that the 
views on the difference between the rebate rates and the actually-paid rates constituting assistance to 
downstream processing of the products affected cannot be  duly supported by either theory or practice.  
We would like to seek the clarifications from the relevant members.  The products entitled to export 
rebate and the rebate rates can be obtained from th e website of the State Administration of Taxation. 
 
(v) Tax concessions under processing trade 
 
In paragraph 145 , the Secretariat's report notes that a large number of materials and parts listed in 
the Catalogue of Goods Subject to Import Prohib ition Under Processing Trade are subject to import 
and/or export prohibitions but that the criteri a for deciding which product are prohibited under 
processing trade were not made available to the Se cretariat.  Could the Chinese authorities indicate 
which criteria they use to establish these export and import prohibitions under processing trade?  
 
Answer: Since 1999, China has begun to implement goods classification management for processing 
trade.  Up till now, MOFCOM has worked with th e General Administration of Customs to issue a 
total of 11 Catalogues of Goods Subject to Im port Prohibition under Processing Trade.  Currently, 
there are 1,803 commodities with a 10-digit customs code.  Commodities listed in the Catalogue of 
Goods Subject to Import Prohibition under Processi ng Trade are mainly products characterized by 
high energy consumption, high pollution and high  consumption of domestic resources during the 
production.    WT/TPR/M/264/Add.1 
 Page 333 
 
 
  (vi) Export prohibitions, restrictions, and licensing 
 
According to paragraph 147 , Rare earth has been subject to export quota and licence since 1999. 
They are also subject to export taxes.  In 2010 already the Secretariat and the Members questioned 
the economic effectiveness of these measures (see Box III.1 of WT/TPR/S/230/rev.1).  In 2010 the 
Secretariat's report mentioned that China is startin g to consider more suitable internal (rather than 
trade) measures to protect the environment and co nserve natural resources.  Could China indicate 
what kind of other measures (than export quotas) has China implemented since 2010?  How do they 
apply?  What has been their effect?  Does China envisage moving export quotas since only a small 
proportion of its productio n is being exported?   
 
Answer: China's export administration on rare earth is for the purpose of protecting environment and 
conserving exhaustible natural resources.  Sin ce the WTO dispute cases on this issue are now under 
way, it is appropriate for us to refrain from making comments until the final resolution. 
 
(vii) State trading on exports 
 Paragraph 152 of the Secretariat's report states that Chi na maintains state trading enterprises for, 
amongst others, some agricultural products and natur al resources.  Could China explain the driving 
forces for the STEs decision on carrying out export activities and how they are contributing to the 
objectives of ensuring stable domestic supply; avoidi ng drastic price fluctuations in international 
markets; safeguarding food safety;  and protec ting exhaustible and non-recyclable natural resources 
and the environment?  How does China assure that the intervention by state-trading enterprises is of 
a non-discriminatory nature?  How does China assure that net importing countries are not negatively affected by activities of those STEs?  Does China envisage removing agricul tural products from its 
STE obligations in the near future? 
 
Answer: With regard to the basic trade information of Chinese state-owned enterprises, please refer 
to answers to the questions under III. Trade Policie s and Practices by Measure (1) Measures Directly 
Affecting Imports (v) State trading.  
 
(viii) Export finance, insurance, and guarantees 
 Paragraphs 161-165 : The Chinese authorities have indicated that China in practice refers for key 
conditions to the Arrangement on Officially Suppor ted Export Credits.  The main purpose of the 
Arrangement is to provide a framework for the or derly use of officially supported export credits and 
to foster a level playing field for official support.   The Arrangement receives administrative support of 
the OECD Secretariat but it is not an OECD Act.  Where and why do the Chinese authorities see obstacles for fully applying the Arrangement and how could these obstacles be overcome from the 
point of view of the Chinese authorities?  If the Chinese authorities see an alternative to the 
Arrangement, could they please explain what such an alternative could look like?   
 Answer: As a developing country, China's Arrange ment on Export Credits has distinctive 
characteristics of developing countries and is different from OECD arrangement.  The OECD 
Arrangement on Officially Supported Export Cred its aims to regulate and address international 
competition issues among developed countries and doesn ’t fully embody the development perspective 
of developing countries.  China now doesn't have c onditions to join in the Arrangement.  Due to these 
reasons, China neither considers it necessary to ma ke export credit arrangeme nts in full accordance 
with the Arrangement nor has conditions  for referring to the Arrangement.  
 In the future, China will learn from the internati onal favorable experience including the Arrangement 
in accordance with our own development leve l of national economy, economic structure and 
enterprise characteristics to constantly in prac tice improve domestic export credit arrangements.  WT/TPR/M/264/Add.1 
Page 334 
 
 
   
(3) Measures Affecting Production and Trade 
(i) Taxation and tax incentives 
 
Paragraph 175 : The excise (or consumption) tax of 20% on some luxury watches, with a unit price 
higher than 10,000 (Table AIII.5 to document WT/ TPR/S/264) was introduced in 2006 and has not 
been reduced or abolished since.   However, the Secretariat's re port is making reference to several 
Chinese and overseas press comments o ver the last 12 months mentioning that the excise tax on some 
watches is being adjusted or abolished.  Could China provide more detailed information on such 
adjustments?   
 
Answer : Currently, the policy has not been adjusted. 
 
(ii) Subsidies and other government assistance 
 
In paragraph 189 , the Secretariat's report indicates that the use of subsidies and other government 
assistance appear to be an important feature of China's trade policy making.  In paragraph 192 , the 
Secretariat's report also notes that China's latest full notification to  the WTO on subsidies is the one 
covering the years 2007 and 2008 (i.e., the 2009 notifica tion).  The notification on subsidies for the 
years 2009 and 2010 which was due on 30 June 2011 has apparently yet  to be submitted by China.  
Given the important role that subsidies seem to  play in the Chinese economy, could the Chinese 
authorities indicate when the 2011 new and full noti fication of subsidies covering the years 2009 and 
2010 will be submitted to the WTO?   
 
Answer:  Use of subsidies and other government assistance is an important feature in trade policies of 
many WTO Members.  Subsidy notification entails  huge amount of work on information gathering 
and analysis and this is particularly a challenge fo r China as a large developing country.  To fulfill its 
notification obligation under the SCM Agreement systematically, China since its WTO accession has 
concentrated its efforts on notifying comprehensively central programs as a first step, and would then 
extend its efforts and experiences to cover those at  the sub-central level.  Now that substantial 
progress has been made in fulfilling th e transparency obligation of the subsidies at the central level, 
China will work towards incorporatin g local subsidies in its future notifications.  As to the 2009-2011 
notification, it will not be too difficult if covering only central programs.  However if local programs 
are to be incorporated, it will be a different case.   In any case, China will accelerate its efforts for a 
new notification.  
 
IV. Trade Policies by Sector 
(1) Agriculture 
(ii) Agriculture policies 
 
According to Paragraph 10 of the Secretariat's report, one of the measures of the 12th Five-Year Plan 
(2011-2015) is described as im proving temporary purchase and storage of bulk agricultural 
commodities.  Could China describe the aim of such  measures?  What could be the potential trade 
impact bearing in mind the potential dimension compared to the total world trade of such bulk products on net food impor ting countries?  How does China assure that negative impacts regarding 
speculation are excluded?      
 Answer : There is no such a description as improving temporary purchase and storage of bulk 
agricultural commodities in the Outline of 12
th Five-Year Plan for the National Economic & Social 
Development of People's Republic of China.  Fo r the purpose of increasing the ways available to 
farmers to increase the revenue and promoting the continuous rapid growth of farmers revenue, the 
Outline of Plan describes as follows:  improving the agricultural products pricing protection system, 
stably raising the minimum purchase price of ke y grain products and perfecting the policy of  WT/TPR/M/264/Add.1 
 Page 335 
 
 
  temporary purchase and storage of bulk agricultu ral commodities.  The purpose of perfecting the 
policy of temporary purchase and storage of bulk agri cultural commodities is to keep farmers active in 
farming and to ensure food security in China. 
 
China has always been adhering to the principle of  basically supporting ourselves, and has guaranteed 
the supply for 20% population in the world through th e cultivated lands accounting for 9% of all the 
cultivated lands in the world, and has made great c ontributions to the international food security.  The 
volume of Chinese grain export is very limited w ith little influence on the international market. 
Therefore, the above-mentioned measures will not a ffect the trade of net food importing countries. 
 
According to Paragraph 22  China maintains export quotas on several grains, cotton and tobacco. 
Can China explain what the legal basis under GATT for those measures is?  Does China intend to 
phase out its export quotas in the future?  How does China ensure that these measures do not have a 
negative impact on net-food importing countries?  
 Answer : We impose export quota on such grains as maize and rice and cotton on the following basis:  
(1) Article XI. 2(a) of GATT 1994: general eliminati on of quantitative restrictions shall not extend to 
export prohibitions or restrictions temporarily app lied to prevent or relieve critical shortages of 
foodstuffs or other products essential to the exporti ng contracting party;  (2) Article 16 of Foreign 
Trade Law of the People's Republic of China:  Th e State may impose restrictions on the import or 
export of goods and technologies where the import or export shall be restricted in order to safeguard 
the national security or public interest;  where th e export shall be restricted on account of domestic 
shortage in supply or effective protection of exhaustible domestic resources;  or for other similar 
reasons.  Currently, China does not plan to cancel export quota on such products as maize, rice and 
cotton.  In addition, China has not adopted export quota on tobacco.   (2) Fisheries (iii) Fisheries Policy 
 
In paragraph 56 , the Secretariat's report i ndicates that under the 11
th Five-year Plan, the State may 
support the development of ocean fishery industry by taking measures in finance, credit and taxation 
(Chapter III, Article 21).  Furthermore, in 2006, the Ministry of Agriculture set out an Action Plan to 
encourage oceanic and transoceani c fishing and to speed-up the development of distant-water fishing 
during the Five-year Plan and beyond.  Given that high seas fishing is likely to be mainly operated by 
industrial fishing fleets, how do the Chinese author ities reconcile this special policy support to 
industrial fisheries with the need for conservation of commercially usable fish stocks at a time when 
international organizations such as the FAO are warning that about 85% of these fish stocks are 
already exhausted or ab out to be exhausted?  
 
Answer : As a responsible large fisheries country, Ch ina has always been developing ocean fishery 
industry within the framework administered by international fisheries and following the principle of 
resources preservation and reasonable use.  On one hand, China has joined al l the regional fisheries 
organizations which are in the area of high seas and re lated to China and participates every year in the 
appraisal on reasonable use of fisheries resources in high seas and the stipulation of the of fisheries resources quota in high seas to ensure that the maximum reasonable fishing volume will not be exceeded;  and on the other hand China has cont ributed more labor, materials and money and 
improved the monitoring measures and the superv ision on Chinese fishing boats operating on high 
seas and their sales in order to attack the illegal fish ing (IUU) acts to the largest extent and validly 
perform our obligations as a member state.  Therefore, irrespective the measures China adopts,  China develops high seas fishing industry within 
the framework stipulated by the international regi onal fisheries organizations and will have no adverse 
impact on fisheries resources in high seas. WT/TPR/M/264/Add.1 
Page 336 
 
 
   
(3) Energy (i) Policy objectives for the sector 
 
Paragraph 62:  Could China elaborate on the new Energy Law?  What are the key points that are 
going to be treated in the Energy Law? As in dicated, the Energy Law is intended to be 
comprehensive.  Does that mean that all forms Energy  (fossil, nuclear, as well as renewables) are 
going to be addressed? Are there plans to set national  targets for the share of renewables in the 
energy mix or the increa se in energy efficiency?    
 
Answer : The draft of Energy Law is being amended by  the Legal Affair Office of the State Council, 
via further survey, argumentation and recommendation collection. 
 
(iii) Oil and Gas 
 
Paragraph 68: Could China already share information about  the new pricing mechanism for refined 
oil?  What will be the major changes compared to the current mechanism?  
 
Answer: In May 2009, the Chinese Government published the pricing mechanism for refined oil on 
the website of the National Development and Refo rm Commission - the competent pricing authority. 
It is the current pricing mechanism for refined oil.   
REPORT BY THE GOVERNMENT OF CHINA 
 
Paragraph 106 : With respect to the Doha negotiations China underlines the importance to address 
developing countries concerns on fo od security, livelihood of rural popul ation and rural development.  
What is China's position with regard to more stri ngent disciplines on export restrictions in order to 
contribute to food security especially of  net-food importing developing countries? 
 
Answer : China's position on the issue is that careful studi es be come out to ascertain what are the key 
elements that impact food security for whom a nd then map out a scientific approach to find the 
solution.   
THAILAND 
 QUESTIONS REGARDING THE SECRETARIAT REPORT 
 III. TRADE POLICIES AND PRACTICES BY MEASURE  Page 24 (paragraph 5)   
 
Importers may request advance written rulings from Customs;  the rulings are binding.  The legal 
basis of the advance written rulings from Customs is the Customs Law and the Interim Measures on 
the Administration of the Administrative Rulings of Customs.
7   
 
Question 
 1. Paragraph 5 of the WTO Secretariat Report indica tes the right of an importer to request for 
advance ruling.  Thailand would appreciate if China could elaborate more on the scope of advance 
                                                      
7 Order of the General Administration of Customs, No. 92.  WT/TPR/M/264/Add.1 
 Page 337 
 
 
  ruling that importers could obtain, i.e. whether th e scope covers all issues of valuation, rules of 
origin, and customs tariff.   
 
Answer: In accordance with the Interim Measures on the Administration of the Administrative 
Rulings of Customs (No. 92 Order of General Admi nistration of Customs), administrative rulings of 
customs apply to classification of import and export goods and determination of  origin of import and 
export goods.  A party applying for administrative ruling of customs shall be a unit registered in customs engaging in operation of import and expor t goods.  Customs valuation does not fall within 
the scope of administrative rulings. 
 
Page 58 (paragraph 138)   
 
China's export taxes, in the form of statutory rat es and interim rates (applied for a specific period), are 
levied on an MFN basis.
8  The customs value of export goods is based on the transaction value of the 
goods, together with its transportation, insurance, an d other relevant costs for the goods to arrive at 
the departing point but before loading.  Interim e xport duty rates may be higher than statutory export 
tax rates;  where there are interim export duties on export goods to which the statutory export taxes 
are applicable, the interim rates apply. 
 
Question    
 
2. Paragraph 138 of the WTO Secretariat Report indicates that China's export taxes are levied 
on an MFN basis.  Thailand would like to know wh ether China has any plan to abolish or exempt 
export taxes in FTAs which China is a pa rty to or involves in negotiations. 
 Answer: Export taxes are not involved in any bilatera l (regional) FTAs which China is a party to or 
involves in negotiations.  
Pages 65-66 (paragraph 174) 
 
China's main indirect tax is its value-added tax ( VAT) (which, excluding tax collected at the border, 
accounted for 29.5% of tax revenue in 2011, down from 31% in 2009);  the revenue is shared 75:25 
between the Central and local governments (except the revenue collected from imports, which is 
received by the Central government).  VAT is levied at a standard rate of 17% and a lower rate of 13% on certain items.  For small-scale tax payers
9, VAT is charged on 3% of their gross sales.  
Farmers selling their produce directly are exempt from VAT provided their operations are small 
scale;  the authorities state that the purpose of the exemption is to ease administration.  Exporters are 
entitled to VAT rebates, but the VAT is often not fu lly rebated (section (2)(iv)).  VAT paid on fixed 
assets (including machines, means of transport, t ools and appliances related to production, and 
operation with a service life of more than 12 months) is credited against VAT on the final product.10 
 
                                                      
8 In Annex 6 of its Protocol of Accession, China listed 84 lines at the HS 8-digit level at statutory 
export tax rates, and confirmed these would be the maximum export tax levels (WTO document 
WT/ACC/CHN/49, 1 October 2001). 
9 Taxpayers with total sales of less than 0.5 million engaged in the production of goods or taxable 
services, or those with total sales of less th an 0.8 million in wholesaling or retailing. 
10 Capital goods such as small passenger vehicles, motorcycles, and yachts are excluded, and are 
subject to consumption tax. WT/TPR/M/264/Add.1 
Page 338 
 
 
  (ii) VAT 
 
Question  
 
3. Thailand understands that China has establishe d the system for levying value added tax 
(VAT) for certain agriculture products by using ref erence prices.  Thailand would appreciate if China 
could provide us with a better understanding on how th e reference prices are constructed.  Is a source 
of import a factor used in determining the reference prices? 
 
Answer: According to the current VAT policies, the output VAT regarding to sales of goods shall be 
calculated by sales amount and applicable tax ra te.  Article 16 of the Detailed Rule for the 
Implementation of the Provisional Regulation on Va lue-added Tax stipulates that, for taxpayers 
whose prices are obviously low and without proper justification as mentioned in Article 7 of the 
Regulations, or have activities of selling goods as listed in Article 4 of these Detailed Rules but 
without invoiced sales amounts, the sales amount sha ll be determined according to the following 
sequence:  (1) Determined accordi ng to the average selling price of the taxpayer on the same goods in 
the recent period;  (2) Determined according to th e average selling price of the other taxpayer on the 
same goods in the recent period;  (3) Determined according to the composite assessable value.  The 
formula of the composite assessable value shall be:  Composite assessable Value = Cost X (1 + cost 
plus margin). For goods subject to Consumption Ta x, the composite assessa ble value shall include 
Consumption Tax payable.  
Page 69 (paragraph 192)    
 
China's latest notification to the WTO on subsidies (2009 notification) contains information on 
assistance to businesses established in vari ous sectors or regions (Table AIII.6).
11  It lists programmes 
providing government assistance at the central  government level between 2005 and 2008;  no 
information regarding subsidy programmes provi ded by local governments has been provided.12  In 
many cases, there are no precise figures on the magn itude of subsidies provi ded by the government, 
many of which are in the form of tax benefits.  China's 2009 notification has not yet been reviewed in 
the Committee on Subsidies and Countervailing Measures. 
 
Question    
 4. Paragraph 192 of the WTO Secretariat Report indicates that there is no information 
regarding subsidy programmes provid ed by local governments available.  Thailand would like to seek 
a clarification whether the Chinese local government s/entities under the contro l of local governments 
have granted subsidies within the meaning of  the WTO Subsidies and Countervailing Measures 
Agreement.  If so, would China have any plan to  notify such subsidy programmes to the WTO? 
 
Answer: Subsidy notification entails huge amount of wo rk on information gathering and analysis and 
this is particularly a challenge for China as a la rge developing country.  To fulfill its notification 
obligation under the SCM Agreement systematically, China since its WTO accession has concentrated 
its efforts on notifying comprehensively central pr ograms as a first step, and would then extend its 
efforts and experiences to cover those at the sub-central  level.  Now that substantial progress has been 
made in fulfilling the transparency obligation of th e subsidies at the central level, China will work 
                                                      
11 WTO document G/SCM/N/155/CHN and G/SCM/N/186/CHN, 20 October 2011.  The document 
notes that the notification is transp arency oriented;  it does not prejudge the legal status of the notified 
programmes under GATT 1994 and the SCM Agreement, the effects under the SCM Agreement, or the nature 
of the programmes themselves.   
12 China's previous subsidy notification was submitted in April 2006, covering the period between 2001 
and 2004.  WT/TPR/M/264/Add.1 
 Page 339 
 
 
  towards incorporating local subsidies in its future notifications.  As to the 2009-2011 notification, it 
will not be too difficult if covering only central pr ograms.  However if local programs are to be 
incorporated, it will be a different case.  In an y case, China will accelerate its efforts for a new 
notification. 
 
IV. TRADE POLICIES BY SECTOR  Page 102 (paragraph 10) 
 
Agriculture policies continue to evolve in the same direction as that seen in the last TPR of China.  
The 12
th Five-Year Plan (2011-2015) reaffirms the commitments in earlier plans to build a Socialist 
New Countryside through strengthened support, more  benefits to farmers, and the promotion of 
modernization in order to improve living standard s for farmers.  The main objective of domestic 
policy is to safeguard food security by increasi ng production capacity and improving competitiveness.  
More specific objectives are set out in the plan and include an increase in production capacity for 
grains (defined as rice, wheat, maize, and soybeans)  by 50 million tonnes.  This increase is to be 
achieved through higher investment in and paym ents to grain producing areas while improving 
agricultural production conditions.    
The plan also emphasizes the need to increase fa rm mechanization as well as the development and 
adoption of biotechnology.  Other measures set out in the plan include in creased minimum purchase 
prices for key grains, and improving temporary purchase and storage of bulk agricultural commodities. 
 
Question  
 
5. Since Thailand has a plan to enhance farm ers well-being like China, we would appreciate 
China's further elaboration about the implemen tation and progress under Socialist New Countryside. 
 
Answer: China's Socialist New Countryside include fi ve general criteria: furthered developed 
production, well-off life, civilized culture, beautiful ru ral scenery and democratic administration.  It is 
a solid step-by-step process resp ecting the wishes of farmers and based on the actual conditions in 
different regions.  Promoting the further developm ent of production is the foundation for construction 
of the New Countryside.  The key goal is to provi de farmers with a better-off life.  The substantial 
requirement is to establish a civilized culture for the rural areas.  The primary task is to maintain the 
natural scenery.  Democratic administration will provi de the institutional assuran ce.  The current work 
is proceeding smoothly and in itial progress has been made. 
 
Page 102 (paragraph 11)  
 
Diversification of the rural economy is also stressed  through the development of tourism, alternative-
fuels, investment in infrastructure, improved to wn and village planning, and better public services 
(including education and training).  
Question 
 
6. Could China provide further information about alternative-fuels? What's the plan for 
alternative-fuels?  
 
Answer: Over the years, the Ministry of Agriculture put emphasis on development of countryside 
energy such as biogas, biomass and solar energy, and has made great contribution to develop alternative fuels and relieve national energy pr essure.  Construction on countryside energy has 
achieved outstanding economic, environmental and soci al effects by improving life quality of farmers, WT/TPR/M/264/Add.1 
Page 340 
 
 
  stimulating cycle development of agriculture, and promoting energy saving and emission reduction of 
countryside.  
The next step is aimed to further improving lif e quality of farmers and reducing consumption of 
commercial energy.  Countryside energy, a system atic project to develop modern agriculture, 
stimulate construction of new countryside, promot e energy saving and emission reduction, improve 
countryside environment and farmers life quality, will be backed up by more financial and policy 
support,  measured by suit of local conditions, em powered by advanced science and technology, and 
safeguarded by powerful supervision and manage ment.  Countryside energy industry will be 
developed better and rapidly by  establishing sound follow-up services, optimizing development 
structure, realizing scaled effects and promoting co mprehensive usage of countryside energy in all-
round way.  
Page 105 (paragraph 26)  
 
The New Variety Extension Payment scheme, which w as introduced in 2006 to improve the quality of 
seeds and livestock, has been extende d from the original wheat, rice, ma ize, and soybeans, to include:  
rapeseed and cotton in 2007;  potatoes in 2009;  and barley in 2010 and, on a trial basis, peanuts.  Livestock covered by the scheme include pigs, dair y cows, beef cattle, and sheep.  In addition to 
increasing the product coverage, the scheme has been extended to cover greater areas, with all land 
sown with rice covered from 2008, and all land sown with wheat, maize, and cotton covered from 2009, and substantial expansion of the eligible area for soybeans in 2008 and 2009.
13  T h e  r a t e  o f  
subsidy varies depending on the crop, from 10 per mu for early rice, to 15 per mu for cotton, and 
middle and late rice.  Question 
 
7. Could China please provide more informa tion on the guidelines of The New Variety 
Extension Payment Scheme?  How does it differ from direct payments?  
Answer:  Seed subsidies of rice, corn and other crops are issued in accordance with the acreage of the 
crops.  Agricultural domestic support data informed  to the WTO have notified crop seed subsidies as 
product-specific amber box support measures. 
 
QUESTIONS REGARDING THE GOVERNMENT REPORT 
 
Page 20 (paragraph 75)  
 
Furthermore, in order to increase the import of key components and spare parts of major technical 
equipment and related raw materials, starting fro m 1 July 2009, the Chinese Government introduced 
tax incentives by exempting import tariffs and import VAT for such products.  This helps to promote 
industrial restructuring, energy saving and em ission reduction and to enhance the capabilities of 
domestic industries for sustainable development.  
Question  
 
8. In order to increase the import as a key co mponent of economy, the Chinese government has 
introduced tax incentives by exempting import ta riffs and import VAT for such products.  Is this 
measure equally apply to both Chinese and foreign industries?  
Answer: Yes.  This measure applies equally to  both Chinese and foreign industries. 
                                                      
13 USDA FAS (2011b).  WT/TPR/M/264/Add.1 
 Page 341 
 
 
   
Page 21 (paragraphs 84-88)    
 
Question    
 
9. As the report has mentioned promoting the growth of outbound invest ment, Thailand would 
appreciate if China could further clarify on the following issues: 
 
-  The outward investment promotion policy of the Government of China; 
 
Answer: In the regard of helping the enterprises to invest  abroad, the major task of the government is 
to create conditions, provide services and build environments.   
-  The types of support provided by Chin ese Government to en courage the Chinese 
investors to invest abroad besides informati on services, such as tax incentives;  and 
  
Answer:  Whether to make a foreign investment is a self-decisive behaviour of an enterprise and 
depends on its developing strategy and competence while  the main task of the government is to create 
conditions, provide services and build  environments.  Therefore, relevant departments of Chinese 
government have formulated relevant policies in  investment promotion, guidance and service, 
coordination and assurance.  First is to strengthen the guidance.  Since 2009 the Ministry of Commerce has issued for three consecutive years the Guidebook for Foreign Investment and Cooperation in Various Countries 
(Regions) and the Industrial Guideline for Foreign Investment in Various Countries. 
 
Second is to promote investment.  The Chinese gove rnment has provided platforms for enterprises to 
make foreign investment and cooperation via a va riety of expositions and trade fairs, such as 
8 September Xiamen Trade Fair, ASEAN Exposition, Harbin Trade Fair and Northeast Asia Expo. 
 
Third is to provide assurance via bilateral mech anism.  The Ministry of Commerce has taken 
advantage of multilateral and bila teral economic and trade mechanisms or investment promotion 
mechanism to enhance the communication with hos t governments and to coordinate the issues or 
solve the problems that Chinese enterprises meet with when maki ng overseas investment.  At the 
same time, the Chinese government has been making bilateral investment protection agreements and 
agreements on avoiding double taxation.   
 The relevant supportive measures don't involve specifi c taxation. (Department of Outward Investment 
and Economic Cooperation)   
 
-  The targeted industries in promoting the outward investment. 
 
Answer:  The industries where the Chinese enterprises w ill make a foreign investment are to be 
determined after taking into consideration both th e developing need of the host country and its own 
international developing need while the Chinese govern ment will not make stipulations regarding the 
specific industries for the enterprises.  
 
 WT/TPR/M/264/Add.1 
Page 342 
 
 
  TRINIDAD AND TOBAGO 
 
PART I: QUESTIONS REGARDING THE SECRETARIAT REPORT (WT/TPR/S/264) 
 
I. ECONOMIC ENVIRONMENT (1)
  MAIN ECONOMIC DEVELOPMENTS  
 
Page 2, paragraph 3  
 The Secretariat's report stated that China resisted a trade-restrictive response overall to the effects of 
the global economic crisis.  However, in a numbe r of instances, China introduced measures that 
restrict or may restrict trade, notably exports.   
1. Could China please clarify the rationale for these restrictive measures and also give specific 
examples? 
 
Answer:  Article XI of the GATT stipulates certain ex ceptions to general elimination of quantitative 
restrictions, Article 20 stipulates general exceptions  and Article 21 stipulates security exceptions.  On 
the condition of in compliance with foregoing ex ceptions, WTO Members may restrict or prohibit 
trading of goods or technologies.  In addition, th e Protocol on the Accession of the People's Republic 
of China to WTO also specifies that China would in troduce measures that may restrict or prohibit the 
import or export of some goods or technologies.  Meanwhile, Articles 16 and 17 of the Foreign Trad e Law of China stipulates the circumstances in 
which China may restrict or prohibit the import or export of goods or technologies, which are 
consistent with relevant provisions of the GATT. 
 Therefore, trade-restrictive measures introduced by China are based on WTO rules and its domestic 
laws.  II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES   (3)
  TRADE AGREEMENTS AND ARRANGEMENTS   
(ii) Regional arrangements 
 
Page 17, paragraph 30 
 According to the Secretariat's report, While in gene ral, the agreements notified by China to the WTO 
especially under Article XXIV of the GATT 1994 have  relatively high tariff line and bilateral import 
coverage, this is not the case for all its agreemen ts.  In its agreements with Chile, Peru, and 
New Zealand, China commits to eliminate duties on  94.6% to 97.2% of its tariffs, corresponding to 
88% to 99.1% of its bilateral imports from these trading partners;  however, duties on only 35.4% of 
its tariffs will be eliminated in the agreemen t with Pakistan, corresponding to 44.4% of China's 
imports from Pakistan.  
2. Does China have any intention in the future to fu rther eliminate or reduce duties contained in 
its agreements which have relatively high tariff lines?  
 Answer: The final provision is included in all FTAs  signed between China and its partners.  
According to the final provision, the Agreement c ould be modified or adde d under mutual agreement 
and such modifications or additions constitute an integral part of the FTA in accordance with the 
agreement.  
  WT/TPR/M/264/Add.1 
 Page 343 
 
 
  (iii) Unilateral preferences  
 
Page 18, paragraph 37 
 Answer:  According to the Secretariat's report, During the Eighth WTO Ministerial Conference, China 
indicated that it would reduce tariffs to zero on 97% of imports (in terms of national tariff lines) from 
LDCs that have diplomatic ties with China.     3. Can China state the chapters and sub-chapters in which the remaining 3% of tariffs would 
not be reduced?  
Answer: The Ministry of Finance is studying the list of  remaining 3% of tariffs with other related 
departments.  (4)
  FOREIGN INVESTMENT REGIME  
(i) Recent developments in FDI policy   
 
Page 19, paragraph 40  
 4. How does China determine which sub-sectors a re added and removed from its Catalogue for 
the Guidance of Foreign Investment Industries?   
 
Answer: China is still in coordination with relevant ag encies to provide response to this question.  
 Page 19, paragraph 41 
 
5. Can China provide more details on its inno vation capacity building programme such as 
eligibility criteria for qualifying enterprises; quantum of subsidy per project; definition of innovation; and management structure of the programme?   
Answer: The "national technology development progr amme" and the "innovation capacity-building 
programme in China belong to general science and technology input, and would be available through 
media and websites including the official website of  the Ministry of Science and Technology.  FIEs 
and JVs interested may follow such channels for information relating to their respective sectors. 
 III. TRADE POLICIES AND PRACTICES BY MEASURE   (1)
  MEASURES DIRECTLY AFFECTING IMPORTS    
(i) Customs procedures, valuation, and rules of origin   
(a) Customs procedures    
 Page 24, paragraph 2  
 
6. What sort of technology architecture does China utilise to facilitate import and export 
electronic declarations?  Is this system managed by th e Customs?  What is the time difference in the 
processing for paper versus electronic declarations?  Is this system connected to the other 
government agencies involved in trade clearance?  
 Answer: The Chinese Customs independently developed an H2000 customs clearance management 
system, which facilitates import and export electroni c declarations through its collective networking 
application to realize cross-region and cross-depart ment data sharing and work collaboration.  The 
system is managed by the Customs.  Except some particular circumstances, such as failure of the 
computer system, the consignors or consignees or agen ts of the import or export trade shall declare to 
the Customs through electronic declarations.  Al so the Customs will institute a non-paper customs WT/TPR/M/264/Add.1 
Page 344 
 
 
  declaration reform this year.  Therefore, there is  no time difference in the processing for paper versus 
electronic declarations.     
The customs clearance system of China is connect ed through the China E-port to such governmental 
departments as the commerce, railway, environmenta l protection, quality inspection, tax and foreign 
exchange that are invol ved in trade clearance. 
 Page 25, paragraph 7 
 According to the Secretariat's re port, China has adopted a "single window" project, which is intended 
to realize data sharing for customs clearance, in cluding data exchange concerning cross-border RMB 
settlement, and on-line audit.  Currently, 13 de partments under the State Council, the Trade and 
Industry Department of the Hong Kong SAR, the Economic Services of the Macao SAR, and 15 commercial banks are connected by an electr onic platform.  Customs has also promoted 
cooperation with the customs authorities in China' s FTA partners, mainly in electronic networking 
with regard to preferential certificates of orig in, and customs data exchange system, with the 
European and the Russian Cu stoms, respectively.   
 
7. Are these electronic certificat es of origin required to carry the manual or electronic 
signatures of exporters?  Can China also elaborate on this data exchange system?  
 
Answer: Currently, Chinese Customs and relevant Hong Kong, Macao and Chinese Taipei authorities 
adopted electronic data online exchange of CEPA certificates of origin an d ECFA certificates of 
origin, which requires no manual or electronic signature of exporters but only involves the 
electronization of relevant certificates of origin.  There is no such requirement on the customs data 
exchange system with the European  and the Russian Customs, either. 
 The customs data exchange system is a safe, reliab le and effective data exchange platform established 
by the Customs of the parties by mutually determin ing the data to be exchanged based on version 2.0 
of the WCO data model, which facilitates the cust oms clearance of law-abiding enterprises to the 
greatest extent by exchanging and sharing customs da ta in advance that realizes risk analysis of 
import or export of goods.   
8. Kindly explain how the single window proj ect will work in conjunction with those 
departments and FTA partners who may not have the required infrastructure to facilitate this 
electronic platform.  
 
Answer: Overseas FTA partners may connect to the single window through exchange of paper 
certificates of origin if they have no required in frastructure;  departments in China that have no 
required infrastructure may connect to the single wi ndow through the Internet- or client-based system 
developed and operated by the China E-port for those in need. 
 
(d) Rules of origin  Page 26, paragraph 16 
 
The Secretariat's report stated… In 2010, China conducted overseas checks on 1,229 certificates of 
origin under free-trade arrangements.  Feedback so fa r showed that 8 of those certificates were false;  
they involved mainly fish products.   
9. What steps has China taken to resolve the issu es with falsified Certificates of Origin and how 
will this be prevented in the future?  
  WT/TPR/M/264/Add.1 
 Page 345 
 
 
  Answer: Firstly, China will strengthen the publicity of policies and laws to import and export 
enterprises to enhance their law-abiding awaren ess so that they would make declaration in 
standardized and correct ways;  
 
Secondly, China will enhance risk analysis and s ubsequent investigation of fraud of certificates of 
origin, establish relevant database, and strengthen contact and collaboration with the visa authority 
and the customs of the exporting party;  
Thirdly, where there is provision in the agreemen t and the conditions permit, the customs of the 
parties or the Chinese Customs and the visa authority  of the exporting party will establish an online 
system of certificates of origin or periodically exchange electronic data of certificates of origin.  China will adopt various measures to effectively prevent and crack down on falsified certificates of 
origin. 
 
(ii) Tariffs  
(b) MFN tariff rates 
Applied MFN tariff rates 
 
Page 29, paragraph 25 
 The Secretariat's report stated As bound rates are ad valorem and applied rates are non-ad valorem, 
there is a possibility that AVEs might exceed the boun d rates, reflecting fluctuating import prices.    
 
10. Can China please indicate if anything has been  done to monitor cases where AVEs do exceed 
the bound rate?  What corrective actions (planned or ot herwise) will be taken if this situation arises?  
 Answer: Since China's WTO accession, China has always been adopting the specific duty (equivalent 
to ad valorem  rate) converted in strict accordance with the ad valorem  rate committed by China for 
WTO accession and re-calculating the rate of specifi c duty each year so that the actual rate will not 
exceed the bound rate committed by China.  Th e conversion is conducted mainly based on the 
avergage import price in recent years (the last four  years) provided by the Customs, and, with respect 
to some categories, the influence of such factors is  eliminated as no import records in a certain year or 
large fluctuation in the import price in a certan year.  (d) Tariff-rate quotas (TRQs)    
 
Page 32, paragraph 30  
 The Secretariat's report stated China's rules rega rding TRQ administration are the Interim Measures 
on the Administration of Tariff Rate Quota for Im portation of Agricultural Products, and the Interim 
Measures on the Administration of Tariff Rate Quot a for Importation of Fertilizers.  Based on these 
rules, MOFCOM and National Development and Re form Commission (NDRC) issue product-specific 
implementing rules each year.      
11. Are any steps being taken to regularise the applic ation of product-specific tariff rate quotas?  
 
Answer: In accordance with the commitm ents made by China upon its accession into the WTO and 
relevant WTO rules, pursuant to the Foreign Trad e Law of the People's Republic of China and the 
Regulations of the People's Republic of China on the Administration of Import and Export of Goods, 
China formulated the Interim Measures on the Admini stration of Tariff Rate Quota for Importation of 
Agricultural Products (Order of the Ministry of Commerce and the National Development and Reform 
Commission [2003] No. 4).  Since its entry into WTO, China has, in st rict accordance with the 
Protocol on the Accession of the People's Republic  of China into WTO and the Interim Measures on  WT/TPR/M/264/Add.1 
Page 346 
 
 
  the Administration of Tariff Rate Quota for Importation of Agricultural Products, periodically 
announced the annual import tariff quota, declar ation time, applicati on conditions, handling 
procedures of wheat, corn, paddy, rice, sugar, cott on, wool, top wool and other agricultural products 
that are subject to import tariff quota administration, and has earnestly performed its obligation of 
notification as required by the WTO.  Since 2002, China has implemented tariff rate quot a administration on import of fertilizers under the 
tariff numbers of carbamide, di ammonium phosphate and compound fe rtilizer.  We now administer 
the tariff rate quota in accordance with the Inte rim Measures on the Administration of Tariff Rate 
Quota for Importation of Fertilizers, and will rele ase announcements in the second half of each year, 
stipulating the time and method to apply for tariff  rate quota for fertilizers in the next year. Our 
current practice complies with the requirements of  the WTO for transparency, predictability, unity, 
fairness and non-discrimination.  (iv) Import prohibitions and licensing    
(b) Licensing   
Non-automatic import licences  
 Page 35, paragraph 42   
 The Secretariat's report stated Applicants must a pply for an import permit prior to applying for an 
import licence.  Import permits are issued by the Ministry of Environmental Protection or MOFCOM, 
depending on the product.  Once the permit is obtained, a licence will be granted automatically by 
MOFCOM to the importer.  12. Please explain the rationale fo r the use of import permits in this regard. Can the same 
criteria for the permit be applied to access the import licence?  
Answer: Pursuant to current provisions, the importer needs to apply relevant authority for import 
license products that are subject to import license ma nagement.  Once an import license is obtained, 
no import permit is required. 
 
(vi) Contingency trade measures   
 
Page 39, paragraph 63 
 
13. Are the duties imposed on a new shipper review te rminated at the same time as the expiration 
of the duties on the original investigation?    
Answer: The initiation of a new shipper review and the adoption of relevant measures are made due 
to the original investigation and relevant measures.  Therefore, if  original investigation measures 
expire, new shipper review measures will be terminated at the same time. 
 Page 40, paragraph 65 
 
14. Are there provisions for the initiation of an investi gation into the circumvention of duties?  If 
so, does the Ministry of Commerce lia ise with Customs?  If not, which organization deals with issues 
relating to the circumvention of anti-dumping duties?  
 
Answer: China has no regulations or practice of inv estigation regarding circumvention of anti-
dumping duties at the current stage.   WT/TPR/M/264/Add.1 
 Page 347 
 
 
  TRINIDAD AND TOBAGO - ADDITIONAL QUESTIONS 
 
PART I:  QUESTIONS REGARDING THE SECRETARIAT REPORT (WT/TPR/S/264) 
 
IV. TRADE POLICIES BY SECTOR (5)
  SERVICES  
(i) Overview 
 Page 121, paragraph 94  
 
1. Despite accounting for over 40% of GDP, th e Chinese services sector remains relatively 
small with services trade accounting for 10.9% of the total value of exports and imports of goods and 
services, slightly less than in 2009.   
Can China expand on its plan for action regarding servi ces liberalisation as an avenue for increasing 
services?  
Answer: Currently, according to WTO classification, China has opened up more than 100 service 
sectors to foreign capital, which is on par with devel oped countries.  Since Ch ina's accession to WTO, 
China has quickened the opening-up of servi ce sector and embraced all-round opening-up. 
Commerce, communication, tourism and logistics have increased year by year in attracting foreign capital.  Many well-known multinational enterprises in service sector have entered into Chinese 
market.   The new Catalogue on foreign investment that ha s been in force since 30 January 2012 further 
enlarges opening up and adds 9 items of encouragem ent in the service sector, including automobile 
charging station, start-up and investment compan y IPR service, offshore petroleum pollution cleaning 
service, occupational training etc.  The proportion of  service item in the encouraging items of the 
Catalogue are increasing; business like foreign-funded  medical institution, financial leasing company, 
auto sale, and pharmaceutical retail have been sh ifted from restricted to permitted categories.  
 
2. Noting the importance of services to China's ec onomy, could China please outline any further 
liberalisation it intends to undertake in its service s economy?  For example, what steps is China 
taking or considering in other ser vices sector, such as education, energy, and professional services. 
 
Answer: China's service sector account for 43% of GDP.  Service sector plays a key role in social and 
economic development.  China based on its co mmitments upon WTO accession, will follow the 
Opinion of the State Council concerning Accelerating the development of Service Sector, Implementation Opinion of the General Office  of the State Council on Policy Measures for 
Accelerating Service Sector, Opinion of the Stat e Council on Further Utilizing Foreign Capital and 
the Catalogue for the Guidance of Foreign Investme nt Industries to utilize foreign capital and steadily 
enlarge the scope of opening-up in the service sector. 
 To be specific, China made commit ment to open up the education service since China's accession to 
WTO. After the Accession, Chinese government is co nsistently opening up this sector.  For example, 
"encouraging all schools to carry out internati onal exchange and coopera tion and setting up pilot 
school under international coopera tion program" has been incorporated in the Outline for Mid and 
Long-term Education Reform and Development Plan  (2010-2020).  In terms of accounting services, 
up its accession to WTO, China has made commitm ent of high level of opening up and faithfully 
fulfilled its commitment.  In terms of legal servic es, representative offices of foreign law firms can 
provide consultation service in local law, third-party country law and international law, or work with 
Chinese law firms on individual case or on entrusted basis through long-term contractual relation, so 
that foreign law firms can adapt to globalization trend and meet the demand for cross-scope legal WT/TPR/M/264/Add.1 
Page 348 
 
 
  services.  Meanwhile, China will continue its ope ning up policy of legal services based on its 
commitments upon WTO accession and enhance exchange  and cooperation with foreign countries.   
 
 
TURKEY 
 Report by the Secretariat  
 
I. ECONOMIC ENVIRONMENT   
(1) Main Economic Developments, para. 6, p. 3  The Secretariat's Report points out that the PBC ra ised its benchmark interest rates on both deposits 
and loans five times and raised the deposit reserve ra tio 12 times.  The rate of increase in money 
supply declined in 2011 and new bank lending also declined. 
 
Could China explain whether it applies Tobin tax or a similar instrument for controlling banking 
transactions?  If no, what kind of measures do es China take in order to prevent carry trade?  
 
Answer: China doesn't apply Tobin tax to control banking transactions.  China is of the view that 
there are some natural arbitrage opportunities in ec onomic activities, and the situation is similar in 
financial market.  We think arbitrage is different from speculation, arbitrage is not only the opportunities for market entities, in some extent, it is also the motivations for market itself going 
rationalization, therefore we don't think it is necess ary to treat arbitrage negatively.  We don't block 
natural arbitrage behaviors existed in foreign exchange market.   
 (3) Developments in Trade and Foreign  Direct Investment, para. 16, p. 6 
 The Secretariat's report points out that processi ng trade recovered in 2010 after a fall in 2009, 
reflecting the difficulties of foreign invested enterpris es (FIEs) after the outbreak of the global crisis 
in 2008.  
 
Could China state the share of FIEs in its tota l exports by the year of 2011?  What measures did 
Chinese government take, both in central and local level , in order to overcome the difficulties of FIEs 
faced in the global financial crisis?    
 
Answer: The share of FIEs in Chinese total expor ts by the year of 2011 was 52.4%.  
 In face of the international financial crisis, Ch inese government has taken a series of measures in 
order to remain steady and sustainable economic  growth, including implementing proactive fiscal 
policy and moderately easy monetary policy, accelerating the transformation of economic development mode and deepening its reform.  De tailed information about the specific measures is 
available in our government report WT/TPR/G/264.  As  one of the important participants of Chinese 
economy, foreign invested enterprises benefited from the measures implemented by our government 
during the financial crisis just as other enterprises.   
II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES  
(1) Institutional and Legal Framework, (i) Transparency, (c) Appeal Procedures, para. 1, 
p. 15  
 The Secretariat's Report mentions that in acco rdance with the Interim Measures Concerning 
Complaints from Foreign-invested Enterpri ses, the Complaint Coordination Office for 
Foreign-Invested Enterprises and the National Compla int Centre for Foreign-Invested Enterprises  WT/TPR/M/264/Add.1 
 Page 349 
 
 
  under MOFCOM supervise and handle complaints fr om foreign invested enterprises that consider 
their rights have been impaired  by the authorities.    
 
Could China share whether it is obligatory fo r the Complaint Coordination Office for Foreign-
Invested Enterprises and/or the National Complaint Centre for Foreign-Invested Enterprises under 
MOFCOM to respond to the complaint of the FIE or  not?  And if yes, what’s the obligatory duration 
for conveying the final decision of the Center to that FIE?  
 Answer: In accordance with the Interim Measures C oncerning Complaints from Foreign-invested 
Enterprises (hereinafter referred to as the Interim Measures), the Complaint agencies must respond to 
cases meeting the conditions of admissibility stipul ated in the Interim Measures.  The complaint 
acceptance agencies shall inform the complainant within 5 business days since receipt of the 
complaint whether the complaint is accepted, and make a final decision within 30 business days.  
Whereas the case cannot be closed within 30 business da ys for complexity, the complainant shall be 
timely noticed. 
 
(4) Foreign Investment Regime, Footnote no. 38, p. 18 
 
The Secretariat Report footnotes that healthcare institutions from the Hong Kong SAR and the Macao 
SAR are allowed to set up wholly foreign owned hospitals in designated provinces such as Shanghai, 
Chongqing, Guangdong, etc.   In that regard, could China explain whether other nationalities having branch companies in the 
Hong Kong SAR are also allowed to set up a wholly -owned hospital in such designated provinces or 
not?  Are healthcare institutions from the Hong Kong and Macao SARs permitted to set up wholly 
foreign owned hospitals in the framewo rk of CEPA between China and those SARs?  
 
Answer: According to Supplemental Agreement 7 of C EPA signed in 2010, service providers from 
the Hong Kong and Macao Special Administrative Regions have been permitted to establish 
subsidiary hospitals in the provinces and munici palities of Shanghai, Chongqing, Guangdong, Fujian 
and Hainan in mainland China.  According to Supplemental Agreement 8 of CEPA signed in 2011, 
service provides from the Hong Kong and Macao SARs  have been permitted to establish subsidiary 
hospitals in all provincial capitals and municipalities in mainland China. 
 Other countries investors, who own medical instituti ons in the Hong Kong SAR, may not act as legal 
entity of other countries to establish wholly-for eign-owned hospitals in China. None but the 
established medical institution is eligible as a qua lified Hong Kong service provider, and meanwhile, 
put the investment directly from the Hong K ong SAR to mainland China, could they establish 
subsidiary medical institutions in mainland China in line with Notification on Issuance of Provisional 
Administrative Measures about Hong Kong and M acao service provider establishing subsidiary 
hospitals in Mainland China. 
 
The Hong Kong and Macao SAR's medical institutions must also be eligible as qualified service providers if they apply to establish subsidia ry medical institutions in mainland China. 
 
(4) Foreign Investment Regime, (i) Recent De velopments in FDI policy, para. 42, p. 19 
 
The Secretariat's Report points out those provinci al authorities have been delegated to approve 
certain FDI projects below US$300 million.   Could China explain that if a project is not approved  by the provincial authorities for some reasons, 
can this company appeal the decision of the local authority to the NDRC?   
 WT/TPR/M/264/Add.1 
Page 350 
 
 
  Answer: In this case, the company may apply for admi nistrative reconsideration in accordance with 
related laws and regulations of China.   (4) Foreign Investment Regime, (ii) Re gulatory Framework, para. 46, p. 20  
 The Secretariat's Report mentions that the authoritie s intend to promote FDI in the central western 
region of China Tax incentives are in place for FDIs investing in the central western region 
Processing trade in central-western region is also encouraged by special customs supervision zones 
or bonded warehousing.  
 Since Turkey plans to establish a Turkish Industrial Zone in the Xinjiang Uighur Autonomous Region 
with the collaboration of both local and Central go vernments, could China specify what kind of tax 
incentives to be provided for the companies investing in the Region?  Do tax incentives differ 
regarding the sector or production level?  Could Ch ina give more information about special customs 
supervision zones and bonded warehousing?  
 
Answer: Recent years, China customs actively support the central western region with mature 
conditions to set up special cust oms supervision zones, and actively promote processing trade to 
centralize towards special customs supervision zone s.  The general preferential policies for special 
customs supervision zones include bonded tari ff for imported goods, free duty for imported 
equipment, rebating tax for domestic goods entering th e zones, taxation for goods leaving the zones, 
and so on.  The basic functions include bonded processing, bonded logistics and other functions 
relating to productive service industries.  The term bonded warehouses refers to the ware houses that are established upon approval of the 
customs for exclusive keeping of bonded goods and other goods that have not gone through customs 
clearance.  The term bonded goods refers to goods entering China that have not gone through taxation 
procedures upon approval of the customs and leavi ng China after domestic storage, processing and 
assembly.  Such goods can be written-off upon approval of the customs if leaving China within the 
prescribed time limit.  If the goods will enter domes tic market, they can leave the warehouses only if 
providing importation license and other documents  in advance and going through importation 
procedures and paying customs duties.  The goods stored in a bonded warehouse may go through simple processing such as packaging grading and classification adding sh ipping marks dismantling 
and assembling etc. but no substantial processing may go  through.  See the Provisions of the Customs 
of the People's Republic of China on the Administ ration of Bonded Warehouses and the Goods Stored 
Therein (No. 105 Order of General Admini stration of Customs) for more details. 
 
(4) Foreign Investment Regime, (iii) Examinat ion and Approval Procedure, para. 54, p. 22  
 The Secretariat Report states that there are no restrictions on lending by domestic banks to foreign invested enterprises.    
 
Could China give more information regarding the lending process?  Do these FIEs need to apply lending for their projects in China?  What's the p ercentage of FIE lending in total lending of domestic 
banks?  
 Answer: In accordance with the Law of the People's Republic of China on Commercial Banks, in 
China, Commercial banks operate with full autonomy  and are fully responsible for their own risks, 
profits and losses and self-restraint.  Commercial banks do business in accordance with laws free from 
any interference by units and individuals.  Curren tly, the Peoples Bank implem ents financial control 
by market-oriented measures rather than directly managing credit scale and structure of such financial 
institutions as commercial banks.  Financial ins titutions, as the market-oriented entities with full 
autonomy, take the initiative in adjusting the overa ll volume and structure of credit lending and keep  WT/TPR/M/264/Add.1 
 Page 351 
 
 
  stable operation taking into account the stable  monetary policies and the macro prudential 
requirements and based on their own capital suffici ency level, risk management capability, 
development needs and strategic arrangement.  With respect to the loans gran ted to foreign invested 
enterprises, financial institutions make their own decisions on whether to grant the loans to the 
qualified clients based on the various factors of the enterprises such as operation conditions, credit 
status, repayment capabilities as well as the prin ciple of revenue covering costs and risks. 
 Currently, there are no statistics on the loans provided by financial institutions, which are classified by 
the registered types.  
 
III. TRADE POLICIES AND PRACTICES BY MEASURE  
(1) Measures Directly Affecting Imports, (v) State Trading, para.44. p. 35  
 The Secretariat Report points out that only the China National Tobacco Import and Export 
Corporation, a state-trading corpora tion, is allowed to import tobacco.  
 Does China National Tobacco Import and Export Corpor ation have the authority to suspend tobacco 
importation unilaterally concerning phytosanitary measures or the AQ SIQ have the full authorization 
regarding the commencement and suspension of tobacco imports from a country?  
 
Answer: China National Tobacco Import and Expor t Corporation conduct importation and 
exportation business on a commercial basis.  AQSI Q has the full authorization regarding the 
inspection and quarantine issues.   
(1) Measures Directly Affecting Imports, (vii)  Standards and other technical requirements, 
(c) Sanitary and phytosanitary  measures, para.103, p. 51 
 The Secretariat Report points out that under the va rious administrative measures for inspection, 
quarantine and supervision of imports of different pr oducts, a country or region that wishes to export 
a food product to China for the first time must  first be assessed by AQSIQ After both parties have 
signed a protocol for inspection and quarantine,  exports from the country or region by food 
producers that are registered with AQSIQ can start.   Turkey and China have signed the Agreement on Coop eration in Animal Health and Quarantine in 
2008.  Yet, despite the existence of this Agreement which is being indicated as a precondition, China 
still applies quarantine measures against the milk  and milk related products and poultry products 
from Turkey despite OIEs (World Organization fo r Animal Health) decision that Turkey is an 
avian-flu free country regarding poultry products trade .  In that regard, could China detail its 
quarantine measures and assessment pro cedure followed by AQSIQ?   
 
Answer: China's inspection and quarantine access pro cedures of high-risk products before their 
first entry comply with international conventions.  The inspection and quarantine access procedures of 
poultry are the following:  Exporting country should submit written application of meat product to AQSIQ.  China decides whether to initiate access procedures depends on the e xporting countries epidemic situation.  If yes, 
AQSIQ will give the exporting country The Health  Management System Evaluation Questionnaire for 
Countries Exporting Poultry, Pork, Bovine, Mutton, and Venison to China;  Exporting country should submit relevant technical information;  China will conduct risk analysis and assessment of technical information provided by exporting 
country.  If the risk of the animal oriented produc t is acceptable, China will send experts to do on-site WT/TPR/M/264/Add.1 
Page 352 
 
 
  inspection in the exporting country;  The two sid es consult the texts of bilateral inspection and 
quarantine protocol and sign upon consensus, as we ll as conform the texts and sample of sanitary 
certificate. 
 
Foreign enterprises exporting animal oriented products  should register according to the requirements 
of Administrative Measures for Registration of Ov erseas Manufacturers of Im ported Food.  Exporting 
country should provide information, such as the types of products and annual production capacity, of 
enterprises registered and located in  China to AQSIQ.  Enterprises regi stered and located in China are 
allowed to export to China after they are listed in  The Catalogue of Countries or Regions Allowed to 
Export Meat Products and The Corresponding Type s and Usages and published on the website of 
AQSIQ.  Importers in China should have qualification of importing meat products according to Administrative 
Measures for the Inspection, Quarantine and Supe rvision of Entry-Exit Meat Products.  After 
exporting country completes the procedures above, Im porters in China apply to import meat products 
from registered exporting countrys enterprises, obtai n License of Animal and Plant Quarantine Enter 
into China, and import product following quarantine requirements.  When products arrive at China's 
port, inspection and quarantine organs at ports will conduct inspection and quarantine.  Besides, meat 
products export to China must comply with international wild animal protection rules. 
 
The inspection and quarantine access procedur es of dairy products are the following: 
 Exporting country should submit written application of dairy product to AQSIQ; 
 AQSIQ will give the exporting country questionnaire; 
 Exporting country should answer the questionnaire; 
 Chinese experts will evaluate the questionnaire; 
 If the risk is acceptable, the two sides consult the texts of sanitary certificate until consensus 
is reached; 
 The exporting countries agency in charge shoul d make the sample of sanitary certificate 
agreed bilaterally, and send it with th e stamp of the agency to China; 
 AQSIQ publishes the sample of sanitary certificate on its website and sends paper certificate 
to local inspection and quarantine organs.  Th e exporting country can export dairy products. 
 (2) Measures Directly Affecting Exports, (viii) Export finance, insurance and guarantees, 
para. 161, p. 62  
 
The Secretariat Report states that although China is  not a participant in the OECD Arrangement on 
Officially Supported Export Credits , the EXIM Bank in practice refers to the Arrangement for key 
conditions of issuing export credit and it is generally  consistent with the basic framework of the 
Arrangement, and that its lending interest rate is either a fixed one taking reference from OECD-released CIRs or a floating rate which is a reconciled London In terbank Offered Rate 
(LIBOR).   
 
Turkish EXIM Bank and China EXIM Bank have an Agreement (dating back to 1998) for providing 
credit, guarantee and insurance for the joint project s to be undertaken by Turkish and Chinese 
companies in overseas.  Yet, accord ing to the data of Turkish EXIM Bank, no company has benefited 
from this scheme due to the different interest ra tes and lending periods provided by Turkish and 
Chinese EXIM Banks. 
 
In that perspective, could China indicate its  average lending costs of Chinese EXIM Bank and 
average interest rate provided by Chinese EXIM Bank  especially for the projects in Africa and the 
Middle East?  
  WT/TPR/M/264/Add.1 
 Page 353 
 
 
  Answer: By view of the cost of capital, the capit al of Chinese EXIM Bank mainly comes from 
governmental investment, issuance of bonds on dom estic and foreign capital markets, short-term 
loans from Peoples Bank of China as well as loans fro m domestic and foreign fi nancial institutions.  
Based on the aforesaid sources, the credit capital cost of EXIM Bank is determined by some 
comprehensive elements such as the market, bilateral negotiation and bid.  As stated in the Secretariat 
Report, the EXIM Bank in practice refers to releva nt international agreemen ts for key conditions of 
issuing export credit, and the lending interest rate is either a fixed one independently determined by 
itself by taking reference from OECD-released CIRs and its capital cost, or a floating rate determined 
based on London Interbank Offered Rate (LIBOR).  The EXIM Bank has never made differentiated 
interest rate regarding to different states or regions.  The specific interest rate standard is comprehensively determined by the capital cost of its  foreign currency, the le vel of market quotations, 
customer credit rating, country risk and other elem ents.  The credit interest rate may be different 
regarding to projects of the same kind in different countries, or different projects from a same country.  (3) Measures Affecting Production and Trade, (vii) Intellectual property rights, 
Trademarks , para. 297, p. 91 and para. 301, p. 92   
 The Secretariat Report states that the TMO exami ned about 1.4 million trademark applications in 
2010 Well-known brands are recognized by the TMO or the Trademark Appeal Board. 
 
Could China elaborate the evaluation of trademark application process of TMO?  Besides well-known 
brands, does TMO search whether the applicant trad emark has already been registered in another 
country or not?  
 
Answer: According to the relevant provisions of China's Trademark Law and its enforcement 
regulations, if a trademark applicant needs to obt ain exclusive trademark right, it should apply for 
trademark registration with the Trademark Office.  Trademark Office shall examine the applications for trademark registration accepted and handled in 
accordance with the relevant provisions of the Tr ademark Law and its implementing regulations, and 
shall give preliminary approval to those that accord  with the regulations and make an announcement; 
those that do not accord with the regulations shall be rejected.  Those who refuse the rejection can 
apply for a reexamination with the Trademark Review  and Adjudication Board.  For the preliminarily 
examined and approved trademarks, anyone can rai se an objection within 3 months from the date of 
the announcement.  Those without objection at the expiry of the announcement shall be approved for 
registration, be issued trademark registration certificate and be publicly announced. 
 After the applicant applies for registration with the Trademark Office, the Trademark Office does not 
take the initiative to examine whether the trademar k has been approved for registration in a foreign 
country.  (3) Measures Affecting Production and Trade, (vii) Intellectual property rights, 
Border Enforcement , para. 324, p. 96 
 The Secretariat Report points out that right holders may apply to Customs for detention of suspected 
infringed goods, regardless of whether they ha ve registered their right s in the record.    
 
In this case, could China explain if a trademark has not been registered in China, but registered in 
another country, does a right holder, nevertheless, ha ve the opportunity to apply to the Customs for 
registration of its rights and detention of infringed goods?  
 WT/TPR/M/264/Add.1 
Page 354 
 
 
  Answer: According to Article 2 of Regulations on Cust oms Protection of Intellectual Property Rights, 
Chinese customs protects trademark rights protected by Chinese laws and administrative regulations. 
Trademarks not registered in China ar e not protected by Chinese customs.  
 
IV. TRADE POLICIES BY SECTOR  
(5) Services, (iv) Transport, (c) Air transport, Trade Regime , para.261, p. 158 
 The Secretariat Report mentions that domestic and o verseas airlines are required to apply for slots to 
the slot management departments of regional admi nistration bureau under the CAAC.  In accordance 
with relevant provisions of the Measures for the Ad ministration of Civil Aviation Flight Schedule, the 
coordination and allocation of slots follows the pr inciples of: openness, impartiality and fairness;  
historical slots priority, and priority of the con tinuation of previous seasons schedules, benefiting the 
promotion of large portal aviation pivot construction, the principle of benefiting the promotion of the 
coordinated development of trunk line and branch  line aviation; benefiting the promotion of the 
normal order of flight;  good faith first;  and coordination of main and auxiliary airports.  
 Turkish Airlines faces some difficulties regarding slot allocation in Beiji ng, Shanghai and Guangzhou 
operations.  In Beijing, CAAC has not allocated hi storical slot to the Turkish Airlines and thereby, 
Turkish Airlines had to negotiate with Air China for benefiting its slots.  In this regard, could China 
explain slot allocation process, if possible, by referring to the Turkish Airlines problem?  
 
Answer: We are still in coordination with competent au thorities in order to answer the question. 
  
TURKEY - ADDITIONAL QUESTIONS 
 Report by China     
 
2. ECONOMIC AND TRADE ENVIRONMENT AND MACROECONOMIC POLICY  
DIRECTION, para. 21, pg. 10 
 
It is pointed out some programs introduced in orde r to promote consumption with the general policy 
direction being green, low carbon, energy sa ving and environment protecting.     
 Could China explain that how does China stri ke balance between environmental protection and 
economic development?  
 
Answer: First, we shall promote energy-saving and emission reduction while optimizing industrial 
structure.  Second, we shall practice economy and pursue environmental protection while increasing 
the efficiency of the enterprises.  Third, we shall develop environmental protection industry as a 
means of boosting domestic demand.  Fourth, we shall arrange the spatial layout of productive forces 
in line with the requirements of ecological and environmental protection.   
 China actively protects its environment in optimiz ing its economic development, works hard to 
promote three shifts in the efforts of envir onmental protection (shift from emphasizing economic 
development more than environmental protection to attaching equal importance to both of them; shift 
from the situation where environmental protec tion lagged behind economic development to the 
situation where environmental protection keeps p ace with economic development;  shift from mainly 
adopting administrative means to adopting legal,  economic, technical and necessary administrative 
means in addressing environmental problems), pays equal attention to environmental protection and 
economic development, keeps environmental protecti on in pace with economic development, so as to 
gradually strengthen the work of protecting e nvironment to optimize economic development. 
  WT/TPR/M/264/Add.1 
 Page 355 
 
 
  Report by the Secretariat      
 
II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES     
(2) Development and Administration of Trad e Policies, (ii) Trade Policy Objectives, 
para. 22, pg. 15     
 
The Secretariat Report states that:  the 12th Five-Year Plan (covering 2011-15) places emphasis on 
exports and inward foreign investment but also on imports and outward foreign investment.  In this 
context, China aims to stabilize exports, expand impo rts, and thus reduce the trade surplus.  The 
authorities intend to achieve this objective through im port facilitation measures, as well as further 
preferential trading agreements.   Could China elaborate on measures under considera tion for achieving the objective of stabilizing 
exports, expanding imports, and thus reducing the trade surplus? Which specific import facilitation 
measures has China put into force?  
 
Answer: Since the beginning of 2012, we have adopt ed the following import facilitation measures: 
first, we have adjusted the import tariff of so me commodities.  Since 1 January 2012, China has 
imposed temporary low tariff rate on the products c overing over 730 tariff lines, with an average tariff 
rate of 4.4%, which is over 50% lower than the tari ff rate of most-favored nations.  Second, we have 
further improved the measures of import admini stration.  We have lifted unreasonable import 
restrictions so as to reduce the transaction cost of import trade.  We actively promote the online application for automatic import license.  We hold forum on import, exchange market information and 
strengthen the publicity on import policy.  We est ablish the platform for promoting import, and 
support countries that have relatively large trade deficit with China to hold commodity exposition, 
trade talks and other promotion activities in Ch ina.  We further improve the convenience for 
importing commodities.  We improve the custom clearance efficiency by improving the custom 
clearance services, facilitate the enterprises having high credit rates in clearing the customs, and 
remove the unreasonable charges imposed on imports .  Third, we have st rengthened and improved 
import financial services.  We encourage commercial banks to conduct import credit business, 
encourage policy banks to support the importing of hi-tech and resource commodities.  We encourage 
commercial insurance companies to  research in and conduct import credit and insurance business to 
lower the risks of enterprises wh en they import commodities.  
 
(3) Trade Agreements and arrangements, Part icipation in the World Trade Organization, 
para.25, pg. 16 
 
It is stated in the Secretariat Report that Chi na is in the process of accession to WTO Government 
Procurement Agreement.  What is the stage related to China's accession to WTO Government Procurement Agreement?    
 
Answer: The Chinese government will submit a newly revi sed comprehensive offer before the last 
meeting of the Committee on Gove rnment Procurement of WTO to convene in 2012.  For the 
moment, the Chinese government is making an eval uation of the feasibility to improve the offer 
factors, making an effort to create cond itions for extending the offer coverage. 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE      
(1) Measures Directly Affecting Imports, (ii)  Tariffs, (c) Non-MFN rates, para 28 pg. 30     
 
The Secretariat Report mentions that: China intends to  eliminate tariffs on 97% of its tariff lines (at 
the HS 8-digit level) on imports from these LDCs;  in  2011, tariffs were eliminated on 60.5% of tariff 
lines.     WT/TPR/M/264/Add.1 
Page 356 
 
 
  Could the Government of China explore their agenda fo r further elimination of tariffs on imports from 
LDCs?      
 Answer: China plans to offer zero tariff treatment on 97% tariff lines from least developed countries 
(LDC) that have diplomatic ties with China unde r the South-South Cooperation Framework.  Since 
July 2010, China has offered zero tariff treatment  to 60% tariff lines from LDCs and will gradually 
extend to 97%.  Right now, Authorities in concern are studying the list of the 3% that are in exception.  (2) Measures Directly Affecting Exports, (v i) Export prohibitions, restrictions, and 
licensing, para. 146, p. 60      
 It is stated in the Secretariat Report that: China maintained general export prohibitions on a total of 
45 items at the HS 8-digit level in 2011 (no c hange since 2009) and footnote 138 mentions that… A 
list of products subject to im port and export prohibitions under processing trade is published online 
(in Chinese).   Could China provide a list of current export prohibitions with the explanation of their WTO 
compatibility in a WTO language?     
 Answer:  Products subject to export prohibitions in Chin a have been notified to the WTO as part of 
China's QR notification submitted to  the market access committee.  
 
(3) Measures Affecting Production and Trade,  (i) Taxation and tax incentives, para 170, 
pg. 65  
 
It is states by the Secretariat that… Since 2011,  preferential taxes have b een granted on energy-
management contract projects for eligible energy services companies, in accordance with the Notice 
of the Ministry of Finance and the State Administ ration of Taxation on Issues Concerning the Value-
added Tax, Business Tax and Enterprise Income Tax Policies for Promoting the Development of the 
Energy Services Sector (CaiShui 110/2010).  Ener gy services companies that meet prescribed 
conditions on contract-based energy management projects are exempted from the business tax and the 
value-added tax.     Regarding aforementioned tax incentive program, Turkey would like to get clarification on the 
eligibility criteria for energy ser vices companies under the program.  Could China provide detailed 
information on company selection process for p referential tax implementation and the nature of 
prescribed conditions on contract-based energy m anagement projects which should be fulfilled in 
order to qualify for business and value-added tax exemption? 
 
Answer:  According to the Notice of the Ministry of Finance and the State Administration of Taxation 
on Issues Concerning the Value-added Tax, Busin ess Tax and Enterprise Income Tax Policies for 
Promoting the Development of the Energy Services Sector  (Caishui [2010]No. 110), where the 
company enjoys the policies related to value-a dded tax and business tax, the expression meet the 
prescribed conditions refers to meeting the followi ng conditions:  1. Technologies adopted by energy 
services companies in contract-based energy manage ment projects shall conform to the technical 
requirements of the General Technical Rules fo r Contract-based Energy Management (GB/T24915-
2010) as promulgated by the State Administration of  Quality Supervision, Inspection and Quarantine 
and the Standardization Administration of China;  an d 2. The format and contents of the Contract on 
the Sharing of Savings from Energy Conserva tion as concluded by and between energy services 
companies and energy-consuming enterprises shall conform to the Contract Law, the General 
Technical Rules for Contract-based Energy Management (GB/T24915-2010) as promulgated by the  WT/TPR/M/264/Add.1 
 Page 357 
 
 
  State Administration of Quality Supervision, Inspection and Quarantine and the Standardization 
Administration of China and other relevant provisions.  (3) Measures Affecting Production and Tr ade, (ii) Subsidies and other government 
assistance, para. 192, pg. 69   
 The Secretariat states that  no information regarding subsidy programmes provided by local 
governments has been provided.  In many cases, there are no precise figures on the magnitude of 
subsidies provided by the government, many of  which are in the form of tax benefits.  
 Turkey takes note that China's last notification di d not include sub-central government subsidy 
programs.  The lack of sub-central government s ubsidy programs in China's notification particularly 
troubling as such programs are essential and complimentary for the central programs. 
 
Within this framework, could China make the di stinction between the cen tral government programs 
and sub-central government subsidy programs and clarify the magnitude of each and every 
sub-central subsidy program?  Could China also explain the forms of the sub-central subsidy 
programs which are other than tax benefits?  
 
Answer:  Subsidy notification entails huge amount of wo rk on information gathering and analysis and 
this is particularly a challenge for China as a la rge developing country.  To fulfill its notification 
obligation under the SCM Agreement systematically, China since its WTO accession has concentrated 
its efforts on notifying comprehensively central pr ograms as a first step, and would then extend its 
efforts and experiences to cover those at the sub-central  level.  Now that substantial progress has been 
made in fulfilling the transparency obligation of th e subsidies at the central level, China will work 
towards incorporating local subsidies in its future notifications.  Although at this stage it is still 
difficult to propose a timetable, China will accel erate its efforts in this regard.   
 
(3) Measures Affecting Production and Tr ade, (ii) Subsidies and other government 
assistance, para. 200, pg. 71  
 
The Secretariat states that…  In 2009, the central government started to provide lump sum grants to 
consumers who bought new energy-saving or new- energy cars listed in a promotion catalogue .     
 The footnote regarding the program explains that th e total amount of grant depends on the model of 
cars.  Turkey would like to get detailed informati on on the scope of the program and the requirements 
to be met for provision of the grant.  Could Chi na please explain which qualifications are sought for 
the determination of the eligibility for the program  and which conditions specify the exact amount of 
the grant?    
 
Answer:  For further details of the above documents a nd catalogues, please refer to the websites of the 
Ministry of Finance, National Development and Reform Commission (NDRC) and the Ministry of 
Industry and Information Technology.   In May 2010, the Ministry of Finance, Nationa l Development and Reform Commission (NDRC) and 
the Ministry of Industry and Information Technology promulgated Detailed Rules for Promoting 
Fuel-efficient Vehicles (Passenger Vehicles under 1. 6 L) under the Project to Promote Energy-
efficient Products for the Benefit of the People (Ca ijian [2010] No. 219).  According to the rules, the 
Central Government allocated a subs idy of RMB 3,000 Yuan for each fuel-efficient vehicle that meets 
the prescribed conditions and is purchased by consum ers, and the subsidy woul d be paid to customers 
by the manufacturing enterprise when it sells the vehi cle.  From June 2010 to May 2011, the Ministry 
of Finance, NDRC and the Ministry of Industr y and Information Technology announced 6 catalogues 
of promoting fuel-efficient vehicles (passenger vehicles under 1.6 L) under the project to promote WT/TPR/M/264/Add.1 
Page 358 
 
 
  energy-efficient products for the benefit of the people.  In 2011, the Ministry of Finance, NDRC and 
the Ministry of Industry and Information Technol ogy promulgated Notice on Adjusting the Policy of 
Subsidizing and Promoting Fuel-efficient Vehicles , adjusting the policies concerning fuel-efficient 
vehicles and announcing the 7th catalogue of fuel-efficient vehicles. 
 
(3) Measures Affecting Production and Tr ade, (ii) Subsidies and other government 
assistance, para. 205, pg. 71 
 
The Secretariat states that… The authorities issued a number of circulars related to China's export 
brands.  It would appear that the measures describe d in those circulars have been abolished; some 
incentives appear to exist at the sub-central level , mainly cash awards, for locally registered 
enterprises to apply for famous brand recognition.  It was not clear to th e Secretariat whether all 
measures at the sub-central level have been abo lished along with the abolition of measures at the 
central level. 
 
Within this context, Turkey would like to receive clarification on the existence of the export brand 
programs such as China's World Top Brand Prod ucts and Chinese Export Famous Brands at the 
sub-central level.  Could China please confir m whether following notices, opinions, directives, 
suggestions and circulars on sub-central support programs for export brands were abolished along 
with central-level circulars?  If the components of the support programs fo r export brand is still in 
force, could China also explain the nature and eligib ility criteria for these programs in detail?    
 
- Notice Concerning the Issuing of Opinions on Promoting the Brand-driven Strategy & Its 
Incentive Measures (FFB [2007] No. 274, August 20, 2007; proposed by Guangdong Provincial 
Government and Guangdong Provincial Committee of CPC)  
- Opinions of the Party Committee and Peoples Government of Jinhua City on Promoting the 
Building of Jinhua Brand8 (SW [2006] No. 21, November 22, 2006) 
- Circular on Printing and Distributing the Method of Nanhai District, Foshan City for 
Supporting and Awarding Independent  Innovation, Brand Drive and Enterprise IPO (NF [2007] No. 
128, July 20, 2007; With the approval of Nanhai District Peoples Government)  
- Circular on Forwarding the Policy Measures for Pushing on the Strategy of Drive with Top 
Brands (SFB [2006] No. 115, October 16, 2006; issued by  Suzhou Municipal Government) 
 - Circular on Printing and Distributing th e Policy Opinions for Accelerating Innovative 
Development of Industrial Economy (CZF [2007] No. 54,  May 18, 2007; issued by Cixi Municipal 
Peoples Government)  
- Directives of the Administrative Office of the Hangzhou Municipal Peoples Government on 
Promoting the Development of Independent Ex port Brands (Hang Zheng Ban (2007) No. 10, 
February 17, 2007; issued by Hangzhou Municipal Peoples Government)  - Notice of the Peoples Government of Quanz hou Fengze District on Issuing Regulations 
Concerning the Support to Key Enterprises (Quanf engzhengzong [2008] No. 22, March 9, 2008; 
issued by Peoples Government of Quanzhou Fengze District)  
 - Circular on Printing and Distributing the Interim Measures of Yangzhou City for 
Administration of the Incentive Fund for Fam ous-brand Export Products (YCQ [2007] No. 23, 
October 17, 2007; issued by Yangzhou Municipal Bureau of Foreign Trade and Economic Cooperation)  
- Suggestions on Accelerating the Implementation of Brand Strategy (ZZF [2007] No. 81, 
August 21, 2007; issued by Zhenjiang Municipal Peoples Government)   
Answer: Problems concerning policies related to export brand programs have already been resolved 
on the basis of consultation with some members.  The above-mentioned policies were terminated if 
they are in relation with export brand programs.    WT/TPR/M/264/Add.1 
 Page 359 
 
 
  (3) Measures Affecting Production and Trade, (iii) Industrial policies , para. 264, pg.72     
 
The Secretariat states that… Financial supports provid ed under the industrial revitalization plans for 
ten sectors are mainly those to promote direct cons umption, including subsidies for home appliances 
going to the countryside, automobiles and motorbi kes to the countryside, and "old for new" household 
appliances.    Could China please provide information regarding the nature of the financial support granted under 
industrial revitalization plans?  Could China also ex plain the scope of the program with its specific 
components detailing in which ways the progr am aims to promote consumption?    
 
Answer: Please refer to our government report of last  TPR for detailed information of industrial 
revitalization plan. Budget allocated to major specific programs under the plan, such as home 
appliances going to the countryside etc., were availabl e in our replies to members, for example US, in 
the last TPR.  You may also refer to report on the implementation of central and local budget 
submitted by Ministry of Finance to our national people’s congress these years. 
 
(3) Measures Affecting Production and Trade,  (vi) Competition and consumer protection 
policy, (b) Monopoly agreements and dominant  market positions para. 249, pg. 81   
 
The Secretariat Report notes that: Article 2 of SA IC Provisions on Monopoly Agreements states that 
monopoly agreements are prohibited whether written or verbal, or by conc erted practice whereby 
several companies essentially coordinate behaviou rs even without explicit written or verbal 
agreement.   
Does the presumption of concerted practice ever ex ercised?  Could the Government of China provide 
details on the implementation of presumption of concerted practice?  
 
Answer:  For the purposes of China's Anti-Monopoly Law,  monopoly agreements include agreements, 
decisions and other concerted conducts designed to e liminate or restrict competition.  The Provisions 
of Industry and Commerce Administrative Organizat ions on the Prohibition of Monopoly Agreement 
issued by SAIC of the People's Republic of China further clarify the definition of concerted conducts, 
namely, the operators have no explicit written or verb al agreements or decisions, but there essentially 
exist concerted conducts.  At present, the monopoly agreement cases investigated and dealt with by 
the China's industry and commerce organizations  have not involved the monopoly cases caused by 
concerted conducts. 
 
(3) Measures Affecting Production and Trade,  (vii) Intellectual property rights, para 325, 
pg. 96      
 
It is stated in the Secretariat Report that: A na tional IPR enforcement campaign against infringement 
started in November 2010, and was completed in June 2011.  The campaign's focus was on cracking 
down IPR violations in the industries of press and publication, entertainment, software, high-tech, 
and agriculture, with special emphasis on products  such as audio-visual products, auto parts, 
handsets, pharmaceuticals, and plant seeds.   
Despite these efforts, both some international  institutions and enterprises report that IPR 
infringement in China including violations of copyrights, trademarks, patents, and trade secrets 
remains a central area of concern.  How does Chin a plan to bring off its I PR infringement problem 
and how shall it increase the effectiveness of its judicial and penalty system to tackle with IPR 
infringements.  How does China plan to bring of f its IPR infringement problem and how shall it 
increase the effectiveness of its judicial and pe nalty system to tackle with IPR infringements?  
 WT/TPR/M/264/Add.1 
Page 360 
 
 
  Answer:  Strengthening of the protection of intellectua l property rights is an important guarantee for 
China to build an innovative country.  In order to  effectively do the work of IPR protection, the 
Chinese government will take the following measures:  First, effectively intensify law enforcement. 
Second, further strengthen criminal justice strike.  Third, strengthen the effective connection between 
administrative law enforcement and criminal justice.   Fourth, improve the re levant legal system.  
Fifth, establish a trans-regional and inter-departm ental law enforcement coordination mechanism.  
Sixth, improve the supervision and evaluation sy stem.  Seventh, increase publicity and education 
efforts.  Eighth, improve law enforcement capabilities.   Ninth, strengthen international exchanges and 
cooperation. 
 In addition, all levels of China's judicial aut horities will continue to make comprehensive use of 
various means of judicial remedies of intellectual property, and continually enhance the effectiveness 
of judicial protection of intellectual property ri ghts. For example, through the judgment of making 
compensation for economic losses and the order of st opping the infringement, eliminating the effects 
and making an apology, providing the obligee with material and spiritual, money and non-monetary 
relief; through final judgment and ad judication of interim measures prior to or during the legal action, 
providing the obligee realistic and temporary judicial  relief; through imposing of a fine, confiscation 
of property and civil sanction measures and others, and depriving the infringer his ability of infringing 
again and eliminating the dange r of his repeat infringement. 
 
IV. TRADE POLICIES BY SECTOR 
(1) Agriculture, (ii) Agriculture Policies, para. 18, pg. 103     
 
It is stated in the Secretariat Report that: Quotas  were then allocated based  on the volumes requested, 
previous imports, production capacity, or on a first-come, first-served basis.  State-trading 
enterprises continue to dominate access to tariff quotas, being allocated 90% of the wheat quota, 60%  
of the maize quota, 50% of the rice quota, 70% of the sugar quota, and 33% of the cotton quota.    What is the legal and economic rationale behind keepi ng the state owned enterprises in the imports of 
certain agricultural products like maize, rice, tobacco, cotton and other grains?  How does the 
dominant presence of the state trading enterprises ensu re fair allocation of the tariff quotas?  Are the 
locally established foreign companies able to import those products?  
 
Answer: According to the Protocol on China's A ccession to the WTO, China implements 
state-trading management on the import of wheat, corn, rice, cotton, sugar and other agricultural 
products.  And the proportions of state-trading for those agricultural products are 90%, 60%, 50%, 
33% and 70% respectively.  The Protocol on Ch ina's Accession to the WTO also identifies the 
measures for the management of import tariff quotas and state trading, import tariff quota application and allocation procedures, etc.   In accordance with the Protocol on China's Acces sion to the WTO, the Foreign Trade Law of the 
People's Republic of China and the Regulations  of the People's Republic of China on the 
Administration of the Import and Export of Goods, China formulated and promulgated the provisions 
of the Interim Measures on the Administration of Tariff Rate Quota for Importation of Agricultural 
Products.  These policies are open and transparent.   
Since China's accession to the WTO, the Chinese gov ernment has strictly followed its WTO accession 
commitments and relevant laws a nd regulations to manage the ta riff quotas for agricultural products 
and state trading, announced as scheduled the app lication conditions and distribution procedures of 
import tariff quotas and so on, informed the WTO of the related situation concerning the state trading enterprises in a timely manner and required that  the enterprises should conduct their commercial 
activities in compliance with related laws and re gulations.  State trading enterprises and non-state 
trading enterprises apply for the import tariff quota in accordance with the published conditions and  WT/TPR/M/264/Add.1 
 Page 361 
 
 
  procedures and execute the unified tax rate.  The enterprises that have obtained the import tariff 
quotas can choose import country and timing accord ing to market conditions.  The competent 
authorities of the Chinese government do not  interfere with enterprise business.  
 
Financial Services, para. 14   
 The authorities state that bankcard interbank clearing services fall in the category of financial settlement and clearing services for financial assets. 
 
Could the Chinese delegation give some informati on about the nature of the bankcard interbank 
clearing services and whether it is relat ed with the Panel on electronic payments system that China is 
the respondent?  
 
Answer: Considering the electronic payment case is still ongoing, currently, we are not in the position 
to provide relevant information in this regard.  
 
APPENDIX TABLES      
 
According to Table AIII.6 of Appendix Tables at pa ge 212 of the Secretariat Report and New and Full 
Notification Pursuant to Article XVI:1 of th e GATT 1994 and Article 25 of the Agreement on 
Subsidies and Countervailing Measures of China, dated 21 October 2011 (G/SCM/N/155/CHN, 
G/SCM/N/186/CHN) at page 23, Preferential tax polici es in the western regions program is in force.  
Under this program, the domestic and the foreign- invested enterprises established in the western 
regions are exempt from the tariff for the imported equipment for self uses within the total amount of the capital invested, except for those listed in Cata logue for the imported products not subject to tax 
exemption in foreign invested projects or in the Ca talogue for the imported products not subject to tax 
exemption in domestic invested projects.      
Question 
 
In this perspective, could China please explain what criteria must be met in order not to be listed in 
the Catalogue for the imported products not subj ect to tax exemption in domestic invested projects 
and Catalogue for the imported products not subject to  tax exemption in foreign invested projects?      
 
Answer: The two catalogues are self-explanatory. 
 
 
UKRAINE 
 Report by the Government (WT/TPR/G/264, 8 May, 2012) 
 
5. C
ONTRIBUTION OF THE TRADE DEVELOPMENT OF CHINA TO THE WORLD ECONOMY   
 
Para 123, page 28: 
 The development of China's forei gn trade has accelerated the modernization of the national economy, 
and improved the standard of living of more than  1.3 billion Chinese people.  It has also helped 
integrate the Chinese economy into the world econo my, and promoted the common prosperity of all 
countries and regions in the world. 
 WT/TPR/M/264/Add.1 
Page 362 
 
 
  Question:  
 
- As we know from the previous TPR that China was and perhaps is the most targeted country of 
various trade remedy measures.  Would You be so kind to point out the main changes in tendencies 
mentioned in p. 61 of TPR 2010 in aspect of reduci ng or increase of the percentage of protectionism 
against China and how it affects on trade developmen t of country and its contribution to the world 
economy?  
Answer: According to the data at the WTO website, in 2011, WTO Members launched 
155 anti-dumping and 8 countervailing duty inves tigations as well as 11 safeguard measure 
investigations, while China only launched 5 anti- dumping investigations w ith no countervailing duty 
and safeguard measure investigations.   
Report by the Secretariat (WT/TPR/S/264, 8 May, 2012) 
 
II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES; (4) Foreign 
Investment Regime; (i) Recent developments in FDI policy 
 
Para 40, page 19:    
 The Secretariat Report notes that a revised Cata logue for the Guidance of  Foreign Investment 
Industries (2011 version), which entered into fo rce on 30 January 2012, added 44 subsectors and 
projects to the "encouraged" category, whereas 41 subsectors and projects were removed from the 
"encouraged" category.   
Para 41, page 19:  
 
In the Secretariat Report it is stated that since 6 April 2010, the Government has encouraged foreign-
invested enterprises in joint vent ures with Chinese enterprises or research institutes to participate in 
government-funded projects under the "national technology developmen t programme" and the 
"innovation capacity-building programme.  
 
Question:   
 
- What are the requirements to be met by FIEs  and JVs in order to participate in these subsidy 
programmes?     
 
Answer: The "national technology development progr amme" and the "innovation capacity-building 
programme in China belong to general science and technology input, and therefore are not likely to 
the subsidies defined in the WTO.  As to the requi rements to be met for the two programs, they may 
vary among different concrete projects under the pr ograms, but would be available through media and 
websites including the official website of the Mini stry of Science and Tec hnology.  FIEs and JVs 
interested may follow such channels for info rmation relating to their respective sectors. 
 
- Does China have any further plans to reduce the number of sectors/projects listed under the 
restricted and/or prohibited cate gories in the Catalogue?   
 Answer: The Catalogue formally implemented as of  30 January 2012 the total lists 473 clauses and 
sub-clauses, including 80 clauses and sub-clauses under restricted category and 39 ones under prohibited category, which are respectively 7 and 1 less than those in the former Catalogue.  
Meanwhile, the revised Catalogue re moves restriction on equity ratio of foreign investment, and the 
number of clauses and sub-clauses listed under the r estricted and prohibited categories, which put 
forward requirements for equity ratio, is 11 less than  that of the former.  In future, we will timely  WT/TPR/M/264/Add.1 
 Page 363 
 
 
  adjust our policy to safely promote the opening-up of relevant industries according to China's 
economic development situation.    II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES; (4) Foreign 
Investment Regime; (ii) Regulatory framework 
 
Para 48, page 21: 
 
The Secretariat Report mentions that foreign invest ment in the restricted category may be permitted, 
subject to approval, if export sales are over 70% of total sales of the product. 
 
Question:  
 - Could China provide more detailed clarific ation on this export sales requirement?  
 Answer: This provision does not mean that export sales must be over 70% of total sales of the 
product for foreign-invested enterprises falling under the restricted category.  Foreign-invested enterprises may decide, at its discretion, whether to  sell products in Chinese market or to export.  
 III. TRADE POLICIES AND PRACTICES BY MEASURES   
Para 70, page 42:   
 
The Secretariat Report notes that there are some differences between AD and CV procedures in China.  For example, the CV Regulation does not sp ecifically provide for proceedings to refund final 
duties, and there are no implementing rules on these matters;  there are no counterparts to AD 
implementing rules regarding, inter alia, interim reviews, price undertakings or judicial review. 
 
Question:   
 - How does China plan to make appropriate amendm ents to domestic legislation (including CV 
Regulation) concerning these matters?    
 
Answer: China will make appropriate amendments and improvements to relevant laws, regulations 
and department rules, and issue new countervailing investigation procedural regulations, according to 
the needs of situation development of  countervailing investigation practices. 
 Para 79, page 44:  
 In the Secretariat Report it is stated that two of China's RTAs (New Zealand and Singapore) allow one party to "exclude" an originating good from anothe r party from the safeguard action "if such imports 
are non-injurious.  Four RTAs (ASEAN, Chile, Pakist an, and Peru) provide that the parties "maintain 
their rights" under Article XIX and the WTO Agre ement on Safeguards, and two (Hong Kong, China 
and Macao, China) do not address the matter. 
 
Question:   
 
- Could China please clarify the meaning of th e term: "non-injurious imports" and provide 
information on the application of the rules of "exclusion"?    
 
Answer: As of now, China does not have the practice of the rules of exclusion.  
 WT/TPR/M/264/Add.1 
Page 364 
 
 
  Para 91, page 48:  
 
The Secretariat Report notes that nearly 600 nationa l standards were mandatory.  The proportion of 
mandatory national standards increased from 10% in 2008 to 18% in 2010. 
 
Question:   
 - Could China please explain the WTO basis for the introduction of mentioned mandatory standards? 
Does China have any further plans to reduce the number of national mandatory standards?   
 
Answer: By the end of 2008, the total number of na tional standards has reached 22,931, among 
which, 3,111 are compulsory, taking 13.56% of the total. By the end of 2011, the total number has reached 28,422, among which, 3,647 are compulsory, taking 12.83% of the total.   
Compulsory national standards are formulated by the Standardization Law of PRC, Regulations for 
the Implementation of the Standardization Law of  PRC, and Administrative Measures on National 
Standards, based on the social and economic development.    Compulsory standards are the technical regulations under WTO/TBT Agreement. 
 
Para 192, page 69:  
 China's latest notification to the WTO on subsidies (2009 notification) contains information on 
assistance to businesses established in various sectors or regions.  It lists programmes providing government assistance at the central government level between 2005 and 2 008; no information 
regarding subsidy programmes provided by local governments has been provided. 
 
Question:  
 
- Could China provide information regarding subs idy programmes at the local government level 
(including sectors, forms of assistance)?   
 
Answer: Subsidy notification entails huge amount of wo rk on information gathering and analysis and 
this is particularly a challenge for China as a la rge developing country.  To fulfill its notification 
obligation under the SCM Agreement systematically, China since its WTO accession has concentrated 
its efforts on notifying comprehensively central pr ograms as a first step, and would then extend its 
efforts and experiences to cover those at the sub-central  level.  Now that substantial progress has been 
made in fulfilling the transparency obligation of th e subsidies at the central level, China will work 
towards incorporating local subsidies in its future notifications.  Although at this stage it is still 
difficult to propose a timetable, China will accelerate its efforts in this regard. 
 
IV. TRADE POLICIES BY SECTOR; (1) Ag riculture; (ii) Agriculture policies 
 
Para 22, page 104:  
 
In the Secretariat Report it is stated that exports  of rice, maize, cotton,  and tobacco are through 
state-trading enterprises and, along with other grains, are subject to export quotas. 
 
Question:   
 
- We would ask China more clarification how expor t quotas are through state-trading enterprises? 
And how this practice conforms to  WTO domestic support obligation?  
  WT/TPR/M/264/Add.1 
 Page 365 
 
 
  Answer: According to the Protocol on China's Accessi on to the World Trade Organization, China's 
exports of rice, maize, and cotton etc. are throug h state-trading enterprises.  China's administration 
over state-trading enterprises will be subject to the provisions stipulated in Article 17 State-trading 
Enterprises under General Agreement on Tariffs a nd Trade 1947 (GATT 1947), and relevant contents 
regarding understanding on the in terpretation of Article XVII of the General Agreement on Tariffs 
and Trade 1994 under General Agreement on Tariffs and Trade 1994 (GATT 1994). 
 In accordance with the provisions of Article 52 under the Regulation of the People's Republic of 
China on the Administration of the Import and Expo rt of Goods, the state-trading enterprises shall 
carry out their business activities under normal commercial conditions, and may not choose provider according to non-commercial considerations, nor may th ey reject the entrustment of other enterprises 
or organizations on the basis of non-commercial considerations.  The Chinese Government shall 
strictly follow its commitments for entry into WTO and relevant laws and re gulations to implement 
administration over the export of agricultural produc ts, require state-trading enterprises to abide by 
relevant laws and regulations to carry out busin ess activities, and do not intervene in any enterprises 
detailed business behaviors.   The prevailing export administration and domestic  supporting policies are consistent with the 
provisions of Article 6 Domestic Support Comm itments and Article 7 General Disciplines on 
Domestic Support under the Agreement on Agriculture.  
 
IV. TRADE POLICIES BY SECTOR; (2) Fisheries; (ii) Fisheries policy 
 
Para 58, page 113:  
 The Secretariat Report notes that official data on the value of support to the fisheries sector were not 
available.  Estimates of the value of these supports vary widely depending on the source and 
methodology used.  One report stated that the tota l value of support by the State to fishing was 
estimated to be US$4.1 billion in 2003, of whic h US$2.2 was for vessel construction, fuel 
infrastructure, and other supports to fishing ac tivities, with fuel accounting for US$1.8 billion.
14  It 
has also been reported that, under a programme introdu ced in 2006, a fuel subsidy is payable when the 
price of petrol exceeds 4,400 per tonne and that of diesel exceeds 3,870 per tonne.  The subsidy 
covers 50% of the price over these thresholds and 100% for prices over 5,480 for petrol and 5,070 for 
diesel.  It was reported that the fuel subsidy covers  fishery enterprises and fi shers that use motorized 
fishing vessels for near-shore and inland fishi ng and aquatic production, as well as state-owned 
forestry and urban public transportation companies.   According to some media reports, in 2006, two 
batches of fuel subsidies at 3.18 billion were allo cated, and the implementation of the policy is to be 
strengthened under the 12thFive-Year Plan (2011-2015).15   
 
Question:   
 
- Could China, please, provide more details of th e support to the fisheries sector noted above?  And 
could China, please, give more details on Estimates of the value of these supports?  
 
Answer：China always attaches importance to the transp arency and has made our best efforts in 
fulfiling transparency obligations with regard to the fishing subsidy, members are conducting 
negotiations to strengthen relevant  discussi on including notification requirements under the 
                                                      
14 Sumaila et al. (2009). 
15 English.xinhuanet.com.  Viewed at:  http://new s.xinhuanet.com/english2010/china/2011-03/07/c_ 
13765575.htm;  and People's Daily  online, "20 mln fishermen benefit from China's subsidy mechanism:  
official" , 7 March.  Viewed at:  http://english.peopledaily.com.cn/90001/90778/90860/7311555.html 
[November 2011].  http://news.xinhuanet.com/english2010/china/2011-03/07/c_13765575.htm. WT/TPR/M/264/Add.1 
Page 366 
 
 
  framework of Doha Round. China is willing to prov ide relevant information once discussions agreed 
upon by members. 
 
IV. TRADE POLICIES BY SECTOR; (3) Energy; (i) Policy objectives for the sector 
 
Para 61, page 114: 
 
According to the Report by the Secret ariat, The NEA issued the National 12th Five-Year Plan for 
Energy Technology on 5 December 2011, with the ai m of supporting the development of "strategic 
emerging industries" and of the energy sector.  Implementation measures for the plan were not available to the Secretariat. 
 
Question:   
 - Could China provide more information on the meas ures in support of the development of "strategic 
emerging industries" and of the energy sector?   
Answer:  Information on measures supporting the development of the "strategic emerging industries" 
are found in the Decision of the State Council on Accelerating the Cultivation and Development of 
Strategic Emerging Industries (State Council Circular  No. 32 of 2010).  The Circular is available at 
the official website of the Central Government of  China.  The fund for development of strategic 
emerging industries mentioned in the Circular wa s established in 2011 as a measure of the Central 
Government.  China will consider to incorporate this  fund into its future subsidy notification based on 
studies and analyses on the relationship between th e fund and the subsidy as defined in the WTO 
SCM Agreement.  Regarding the energy sector, befo re the policy on "strategic emerging industries" 
was initiated, China had in place the fund for develo pment of renewable energy.  However, because 
the fund contained sub-arrangements and the fund involved also transfer payment to provincial 
governments, it was too complicated to be incorpor ated in China's submitted subsidy notification. 
China will work on notification of this fund in the course of extending the notification to local subsidy 
programs. 
 
Para 62, page 114:  
 The authorities indicate that the Energy Law, which is intended to be comprehensive for the energy 
sector, is in the final stages of drafting.  Question:   
 - When does China anticipate the draft publication and its final promulgation?  
 
Answer: The draft of Energy Law is being amended by the Legislative Affair Office of the State 
Council, via further survey, argumentation and consulta tion.  There is not a specific timetable for the 
promulgation of Energy Law.     
IV. TRADE POLICIES BY SECTOR; (5)
 SERVICES  
 
Para 94, page 121:  
 
According to the Report by the Secretariat, th e Chinese Government promoted further services 
liberalization in:  tourism and travel related services,  financial information services, financial services, 
medical services and publishing. 
  WT/TPR/M/264/Add.1 
 Page 367 
 
 
  Question:  
 
- How does China see and plan further services sect ors to be liberalised, fo r instance, construction 
and related engineering services and environmental services? 
 
Answer: On 24 December 2011, the Chinese Government released the Catalogue for the Guidance of 
Foreign Investment Industries.  According to th e Catalogue, China will open wider to the outside 
world, encourage foreign investment in modern service industry, support service industry targeting at 
people's livelihood to enhance the utilization of foreign investment, and promote the opening-up 
process.  This revision added 9 clauses and sub- clauses of "encouraged" category to the service 
industry, including motor vehicle charging station,  venture investment enterprises, intellectual 
property right services, offshore oil pollution cl eaning technology service, and vocational skill 
training etc., and the proportion of service industry clauses and sub-clauses in "encouraged" category further increased.  It also changed foreign inv estment medical establishments, financial lease 
companies, automobile marketing, and drug retail from restricted category to permitted category. In 
future, China will timely adjust  policies to safely promote the opening-up of relevant industries 
according to its economic development situation.   Meanwhile, we believe that the opening-up of servi ce industry among WTO Members is beneficial to 
the further development of service trade, and we are willing to join the world competition within a 
much broader scope; the further opening-up of servi ce trade needs to be fully negotiated among WTO 
members during Doha round negotiations.  
 
Para 110, page 125:  
 Paragraph 110 of the Report by the Secretariat sa ys that China does not have a deposit insurance 
scheme;  the authorities are currently drafting a scheme.   
 
Question:  
 - Could China please provide details on drafting deposit insurance scheme?   
 
Answer: The Chinese Government attaches great importan ce to the issues of protecting the interests 
of depositors and maintaining financial stability.  The relevant authorities have been studying the 
system of deposit insurance since 1993.  In 2007, th e PBC together with other relevant authorities set 
up a special working group to design China deposit in surance scheme.  At present, the PBC together 
with other authorities, are promoting the legisla tion on deposit insurance and studying the relevant 
implementing plans, to push forward the deposit in surance scheme to come into force as early as 
possible.   UNITED STATES 
 
PART I:  QUESTIONS REGARDING THE SECRETARIAT REPORT (WT/TPR/S/264)    
 SUMMARY    
 
1. WT/TPR/S/264-01, page ix, paragraph 7 :  In paragraph 7 of the Summary, the Secretariat's 
report states that [n]otice-and-comment procedures are becoming more prevale nt in the process of 
drafting trade laws, regulations and departmental rul es.  In addition, in paragraph 8 of Part II, the 
Secretariat's report states that, [a]ccording to th e authorities, all draft administrative regulations 
have been published on the website for public comments since 2008.      
 WT/TPR/M/264/Add.1 
Page 368 
 
 
  a. In its Protocol of Accession to the WTO, China committed to provide a reasonable period for 
comment to the appropriate authorities before laws, regulations and other measures are 
implemented, subject to limited exceptions.  In a recent study, the U.S.-China Business 
Council (USCBC) reviewed China's regulatory tr ansparency performance for the period from 
March 2011 to March 2012.  The USCBC first re viewed trade-related laws passed by the 
National Peoples Congress (NPC).  The USCBC found that, out of 9 laws passed by the NPC during the 12-month period covered by the study, drafts of only 3 of them were posted on the 
NPC website for public comment during the dra fting or revision process.  Can China explain 
why the 6 other draft laws were not posted on the NPC website for public comment?  Going 
forward, what is China's plan for ensuring that  all draft trade-related laws are posted on the 
NPC website for public comment, unless one of the limited exceptions applies?  
 
Answer: jointly addressed in the following answer. 
 
The USCBC also studied trade-related regulations and departmental rules.  It noted that, in addition to China's Protocol of Accession commitment, Chi na committed bilaterally in connection with the 
June 2008 meeting of the U.S.-China Strategic Economic Dialogue and the May 2011 meeting of the 
U.S.-China Strategic & Economic Dialogue to publish draft trade-related regulations and 
departmental rules for public comment for at le ast 30 days on the website of the State Council 
Legislative Affairs Office (SCLAO).  The USCBC found that only 49% of draft trade-related 
regulations and departmental rules were publishe d on the SCLAO website for public comment during 
the 12-month period covered by the study.  Looking at the 49% of draft measures that were published 
for public comment on the SCLAO website, the USCBC further found that only 56% of them were 
posted for a full 30-day comment period.  Can China explain why 51% of draft trade-related regulations and departmental rules were not pub lished on the SCLAO website for public comment 
during the 12-month period covered by the study?  What  is China's plan for ensuring that drafts of all 
trade-related regulations and departmental rules in  the future are posted on the NPC website for 
public comment for a period of at least 30 days, un less one of the limited exceptions applies?  Also, 
please explain how China envisions that SCLAOs 27 April 2012 publication of the Interim Measures on Solicitation of Public Comments on Draft Laws  and Regulations and the Notice on Related Issues 
Regarding Solicitation of Public Comments on Draft Department Rules on SCLAO Website will assist 
in the implementation of China's commitments.   
Answer: China did not make commitment to soliciting public opinions for publicizing draft laws, 
regulations and rules.  However, in order to prom ote scientific and democratic  legislation and improve 
the quality of legislation, Chinese government has been trying to increas e the transparency of 
legislation and enlarge public participation.  Since 2008, in addition to the confidentiality required by 
law, all the draft administrative regulations are publ icized on the website of legal affairs information 
of the Chinese government to solicit public opinion.  In July 2011, China's State Council revised the 
Provisional Method for Soliciting Public Opinions on the Draft of Laws and Regulations, and released 
the Notice on Soliciting Public Opinions on the Depa rtmental Draft Rules at the Website of Legal 
Affairs Information of the Chinese Government.  The notice required that , in addition to the 
exceptional conditions, administrative and department al rules that are related to economy and trade 
shall open at least 30 days for soliciting public opinion.  Since then, all administrative and 
departmental rules that are related to economy and trade are publicized on the website of legal affairs 
information of China for public opinions with du ration of 30 days, except some urgent and 
extraordinary conditions.  The transparency out come reached between China and US under the 
framework of S&ED is beyond the jurisdiction of WT O review of China trade policy.  The US never 
fulfills any of the transparency co mmitments made to China.     
 
2. WT/TPR/S/264-01, page ix, paragraph 7 :  In paragraph 7 of the Summary, the Secretariat's 
report states that it seems that not all trade-related information is made availa ble to the public.  The 
United States notes that, in past disputes before th e WTO, such as China Measures Affecting Trading  WT/TPR/M/264/Add.1 
 Page 369 
 
 
  Rights and Distribution Services for Certain Public ations and Audiovisual Entertainment Products 
(DS363), China has used the term internal guidance to describe a category of government documents 
that it considered to be different from regulations  and departmental rules.  Specifically, China argued 
that certain measures challenged by the United St ates were only internal guidance and therefore did 
not constitute measures that could be challenged in  a WTO dispute.  The panel and the Appellate 
Body disagreed with China, finding that they were challengeable measures.    
 
a. Could China explain whether it publishes all in ternal guidance documents?  If it does not 
publish all internal guidance documents, could China explain how it d ecides when to and 
when not to publish internal guidance documents?  
b. The Provisions on Disclosure of Government  Information, which entered into force on 
1 May 2008, require, among other things, that government ministries disclose information.  Does this measure require the disclosure of so-c alled internal guidance?   Please explain why 
this is or is not the case.   
 
a-b Answer: article 2 of the Regulation on Information Disclosure stipulates that government 
information refers to those made or obtained by  administrative agencies in the course of exercising their responsibilities and recorded and stored in a given form.  Article 9 stipulates the scope that 
administrative agencies should disclose on their own initiative government information.  Article 8 
stipulates that the information disclosed by admi nistrative agencies may not endanger state security, 
public security, economic security and social stability .  The disclosure of internal guidance paper 
depends on whether the paper complies with the articles in the Regulation. 
 
3. WT/TPR/S/264-01, page x, paragraph 8 :  In paragraph 8 of the Summary, the Secretariat's 
report notes that in October 2011 China submitted a subsidies notification under Article 25.1 of the 
Agreement on Subsidies and Countervailing Measu res (SCM Agreement), representing only the 
second subsidies notification submitted by China in its 10 years of WTO membership.  The 
Secretariat's report further notes that in many ca ses there are no figures on the magnitude of support 
provided, and no information is available on subsidies and other government assistance provided at 
the provincial level, which are believed to be considerable. 
 
a. Although the Secretariat's report does not me ntion it, the United States filed a counter 
notification under Article 25.10 of the SCM Agreement in September 2011, and the United 
States counter notification listed more than 200 cen tral and sub-central government subsidies 
that had not been notified by China.   In th ese circumstances, Article 25.10 calls on China to 
notify those subsidies promptly.  However, to  date, China has not done so.  In China's 
October 2011 notification, China included only 10 of the 200 subsidies identified in the U.S. 
counter notification.  Could China explain when it will notify the remaining 190 subsidies identified in the U.S. counter notification?        
 
Answer:  Subsidy is a complex issue in the WTO and Members often have different views as to 
whether certain policies and measures should be de emed subsidies defined in the SCM Agreement 
and subject to its notification obligatio n.  In China's view, this is the case with quite some items in the 
US Article 25.10 submission.   Also, US has not been able to figure out the relationship between our notified programs and the 
information it gathered as contained in its Article  25.10 submission.  On a lot of items in the US 
submission, China actually has already notified in its submitted notifications, but it seems to China 
that US has not been able to recognize those notified ones, in particular when they are implemented at 
the sub-central government level.  Rather, US has mistaken such implementations by our sub-central 
governments of the notified central programs as locally-initiated subsidies.   WT/TPR/M/264/Add.1 
Page 370 
 
 
  For the remaining ones which are limited, China will ta ke time to verify in the course of its efforts to 
incorporate local subsidies in its future subsidy notifications.   
 
b. China has now been a WTO Member for more than 10 years, and it is one of the largest 
traders among WTO Members.  When will China no tify its sub-central government subsidies?   
 
Answer:  Subsidy notification entails huge amount of wo rk on information gathering and analysis and 
this is particularly a challenge for China as a la rge developing country.  To fulfill its notification 
obligation under the SCM Agreement systematically, China since its WTO accession has concentrated 
its efforts on notifying comprehensively central pr ograms as a first step, and would then extend its 
efforts and experiences to cover those at the sub-central  level.  Now that substantial progress has been 
made in fulfilling the transparency obligation of th e subsidies at the central level, China will work 
towards incorporating local subsidies in its future notifications.  Although at this stage it is still 
difficult to propose a timetable, China will accel erate its efforts in this regard.   
 
4. WT/TPR/S/264-01, page xi, paragraph 19 :  In paragraph 19 of the Summary, the 
Secretariat's report passes on that, [a]ccording to the authorities, no technology transfer 
requirements are imposed on foreign investment project s.  Similar statements appear in paragraph 56 
of Part II of the Secretariat's report.  Neverthele ss, concerns have arisen in connection with certain 
provisions of China's Regulations on the Ad ministration of Import and Export of Technologies 
(Technology Import-Export Regulati ons) and Regulations for the Implementation of the Law on Joint 
Ventures Using Chinese and Foreign Investment (S ino-Foreign JV Regulations).  First, the 
Technology Import-Export Regulations require s uppliers of imported technology to indemnify 
licensees or assignees for third-party infringement  claims, while the Unified Contract Law permits 
contracting parties to avoid this legal requiremen t in connection with dom estic technology transfer 
contracts.  Second, the Technology Import-Expor t Regulations prescribe that the right over any 
improvement to imported technology shall be vested  with the improving party, while the Unified 
Contract Law permits the contracting parties to decide upon a method of s haring improvements.  
Third, the Sino-Foreign JV Regulations generally lim it the term of a technology transfer agreement to 
no more than ten years, and permit the technology im porting party to continue to use the technology 
after expiration of such agreement.  In contrast, under the Unified C ontract Law, contracts extinguish 
upon the conclusion of the term prescribed by th e parties.  Please explain how China justifies the 
differential treatment described above in light of  its obligations under the Agreement on Trade-
Related Aspects of Intellectual Property Rights (TRIPS Agreement).       
 
Answer: Pursuant to Article 355 of the Contract Law, where the laws and administrative regulations 
provide otherwise in respect of technology import a nd export contracts, patent contracts or contracts 
on application for patents, such provisions shall pr evail.  Therefore, the relevant provisions on 
technology import and export contracts in Regulations  for the Administration of Import and Export of 
Technologies and Regulations for the Implementati on of the Law on Joint Ventures Using Chinese 
and Foreign Investment are cons istent with the Contract Law 
 I. ECONOMIC ENVIRONMENT  (2) STRUCTURAL POLICIES      
 
5. WT/TPR/S/264-01, page 4, paragraph 14:  In paragraph 14 of Part I, th e Secretariat's report 
notes that China's manufacturing, including steel, aluminium, and cement, has continued to tend 
towards over investment and overcapacity.  The priv ileged position of SOEs (e.g. in their access to 
bank lending) has also contributed to over inve stment and overcapacity in the economy.  Please 
comment on this assessment and explain how Chi na intends to deal with over-investment and 
over-capacity in the sectors referenced above.      
  WT/TPR/M/264/Add.1 
 Page 371 
 
 
  Answer:  China's steel, aluminum and cement belong to industries of perfect competition, and central 
enterprises in the three industries get dominant pos ition through market competition.  Credit is the 
self-decisive behaviour of market entities a nd the Chinese government does not interfere. 
 
Affected by the demand changes of such downstr eam industries as construction industry, machinery 
and equipment manufacturing indus try and consumer goods industry,  the excess production capacity 
of steel, aluminum and cement is a surplus at cer tain phases due to the economic cycles.  On the 
premise of assuring the full competition in the ma rket, the surplus should be solved through both 
necessary macroeconomic control and market guidance.  Specific measures:  first, intensify industrial 
administration and guidance for industries;  second,  enhance elimination of backward production;  
third, give into full play the synergistic effect of acquisition and reorganization;  fourth, strengthen 
cooperation between upstream and dow nstream industries and guide the consumption of downstream 
industries.  II.  TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES      (1)  INSTITUTONAL AND LEGAL FRAMEWORK      (i)  Transparency       6. WT/TPR/S/264-03, page 12, paragraph 11 :  Paragraph 11 of Part II of the Secretariat's 
report states that draft trade-related regulations and departmental rules must be published for public 
comment and paragraph 13 of Part II of the Secretaria t's report states that the public comment period 
must be not less than 30 days.  Please clarify whet her the Interim Measures on Solicitation of Public 
Comments on Draft Laws and Regulations and/or the Notice on Related Issues Regarding Solicitation 
of Public Comments on Draft Department Rules on  SCLAO Website, or these measures combined 
with other existing measures, require Chinese minist ries to publish draft trade-related regulations 
and departmental rules or to provide for a public comment period of not less than 30 days.  If other 
existing measures contribute to the establishmen t of these requirements, please identify those 
measures.  If existing measures do not contain these requirements, does the NPC or China's State 
Council have plans to issue a measure that does contain these requirements?  
Answer: In July 2011, China's State Council revised the Provisional Method for Soliciting Public 
Opinions on the Draft of Laws a nd Regulations, and released the Notice on Soliciting Public Opinions 
on the Departmental Draft Rules at the Website of Legal Affairs Information of the Chinese 
Government.  The notice required that, in addition to  the extraordinary conditi ons, administrative and 
departmental rules that are related to economy an d trade shall open at least 30 days for soliciting 
public opinion.    
 
7. WT/TPR/S/264-03, page 14, paragraph 15 :  Paragraph 15 of Part II of the Secretariat's 
report discusses the role of the Ministry of Commerce (MOFCOM) under the Interim Measures 
Concerning Complaints from Foreign-invested Ent erprises in handling complaints from foreign-
invested enterprises that consider that their rights have been impaired by Chinese Government 
authorities.  How many complaints did MOFCOM re ceive from foreign-invested enterprises in 2011?  
What did each of the complaints address?  How were each of th e complaints resolved?   
 
Answer: In accordance with the Interim Measures C oncerning Complaints from Foreign-invested 
Enterprises, the Complaint agencies must respond to cases meeting the conditions of admissibility 
stipulated in the Interim Measures.  The complain t acceptance agencies shall inform the complainant 
within 5 business days since receipt of the compla int whether the complaint is accepted, and make a 
final decision within 30 business days.  Whereas the case cannot be closed within 30 business days for 
complexity, the complainant shall be timely noticed . National Complaint Centre for Foreign-invested 
Enterprises under MOFCOM has, for the past two y ears, received in total 11 complaints, in a written 
form or via telephone, from foreign-invested ente rprises or individuals, all of which have been WT/TPR/M/264/Add.1 
Page 372 
 
 
  appropriately dealt with according to the releva nt provisions in the Interim Measures for Handling 
Complaints from Foreign-invested Enterprises. 
 
II.  TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES      
(2)  DEVELOPMENT AND ADMINISTRATION OF TRADE POLICIES      (i)  Agencies involved in trade policy fo rmulation and implementation      
 
8. WT/TPR/S/264-03, page 16, paragraph 24 :  Paragraph 24 of Part II of the Secretariat's 
report explains that industry associations collect  and share information, identify and deal with 
problems related to industries, discuss trade policy issues that affect their industries, and represent 
the interest of their sectors in relation to the Government.  It is the United States understanding that 
industry associations in China are not independent  of the government.  Please describe fully the 
relationship between industry associations and the government in China.  Are any industry 
association officials appointed or otherwise sel ected by the government?  In what ways are the 
activities of industry associations regulated by th e government?  Are industry associations required 
by law to report to the government?  Please explain.   
 
Answer: Industrial association is a social organization that has been registered at the Ministry of Civil 
Affairs (MCA.  Such association responds to the dema nds of industry and members, serving as bridge 
and link to the communication between  government and industry.  I ndustrial association is a social 
organization independent of govern ment, formulating industrial regul ations to standardize practice 
and setting up self-disciplinary mechanism to provide c onsultation service;  its leadership is elected at 
the membership conference instead of being appointed by the government.  The leadership report to 
membership conference and fulfill its  role according to the charter;  the Administration of Civil 
Organization Management of the MCA regulate indu strial associations according to the Regulations 
on Social Organization Registration and Manage ment.  China has no legal document requiring 
industrial association to report to the government. 
 
II.  TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES      (4)  FOREIGN INVESTMENT REGIME      
(i)  Recent developments in FDI policy       
9. WT/TPR/S/264-03, page 19, paragraph 40 :  Paragraph 40 of Part II of the Secretariat's 
report details revisions to China's Catalogue for the Guidance of Foreign Investment Industries (2011 
version).  Despite the revisions made to the catalogue in 2011, many sectors rema in closed to foreign 
investment.  What plans does China have to furth er revise the catalogue to open more sectors to 
foreign investment, particularly in services sectors, consistent w ith the Twelfth Five-Year Plan?  
Please explain. 
 
Answer: The Catalogue revisions in 2011 closely cente red on overall requirements specified in the 
12
th Five-year Plan and fully embodied active and positive opening policy to be implemented.  We 
will timely revise the Catalogue according to Ch ina's economic developm ent situation and WTO 
accession commitments to safely promote the opening-up of relevant industries.  
 
III.    TRADE POLICIES AND PRACTICES BY MEASURE      
(1)  MEASURES DIRECTLY AFFECTING IMPORTS      
(i)  Customs procedures, valuation, and rules of origin       
10. WT/TPR/S/264-04, page 24, paragraph 3 :  In paragraph 3 of Part III, the Secretariat's 
report states that customs duties must be paid at a designated bank within 15 days of the memorandum of duty payment being issued by the General Administration of Customs (Customs).  
Are companies able to appeal the memorandum of du ty payment, if there is a disagreement about the 
amount of duty owed?  If so, is the duty payment delayed until the appeal process is completed, or  WT/TPR/M/264/Add.1 
 Page 373 
 
 
  must the amount be paid under protest, leaving the company to seek a refund if the amount paid is 
greater than the amount owed after the appeal decision is made? 
 Answer: where there is a disagreement about the amount  of duty payable, the parties concerned may 
apply for administrative reconsideration to the Cu stoms.  If the parties are unconvinced by the 
reconsideration decisions, they can bring an admini strative lawsuit to the c ourt.  The payment of 
disputed customs duty is not suspended during th e course of administrative reconsideration or 
proceedings, however, the duty payment can be delaye d until the reconsideration or appeal process is 
completed when the Customs deemed necessary to  suspend the payment, the parties apply for 
suspension and approved by the customs, or the law requires the suspension of payment.  If the 
amount paid is greater than the amount owed after the appeal decision is made, the customs will refund the excess amount of duty to the company.  
11. WT/TPR/S/264-04, page 24, paragraph 5 :  In paragraph 5 of Part III, the Secretariat's 
report states that Customs provides advance binding written rulings upon request.  On what specific 
topics does Customs provide these rulings?      
 
Answer: Article III of "the Interim Measures of the People's Republic of China for the Administration 
of the Administrative Rulings of Customs states th at the administrative rulings of customs cover the 
following areas:  classification of the import and expo rt commodities, determination of the origins of 
import and export goods, application of the measures for prohibiting imports and exports and of the 
licenses, as well as other customs affairs that the GAC decides these measures shall apply to. 
 
12. WT/TPR/S/264-04, page 25, paragraph 9 :  In paragraph 9 of Part III, the Secretariat's 
report states that the General Administration of Customs (Customs) accepted 289 appeals for 
administrative review of Customs decisions in 2010.  In how many of these appeals was the original 
Customs decision upheld?  In how many of th ese appeals was the original Customs decision 
overturned or modified?  
Answer : In 2010, Customs at all levels received a tota l of 289 applications for administrative review, 
of which 270 were accepted and 19 denied.  In accepted cases, 207 were settled the same year, of 
which 135 cases were affirmed the original judgment  after the administrative review by the Customs, 
70 cases were withdrawn or modified, and 2 we re denied the application for review. 
 
13.  WT/TPR/S/264-04, page 25, paragraph 9 :  In paragraph 9 of Part III, the Secretariat's 
report states that the courts accepted 27 administr ative lawsuits disagreeing with Customs decisions 
in 2010.  In how many of these administrative lawsu its was the original Customs decision upheld?  In 
how many of these administrative lawsuits was the origi nal Customs decision overturned or modified?       
 
Answer : in 2010, there were 30 administrative laws uits against Customs, with 25 cases being 
concluded, of which 14 cases were concluded in favor of Customs (maintained the decision of the 
Customs) and 11 cases were withdrawn by the plai ntiffs.  There were no Customs failed cases . 
 
14. WT/TPR/S/264-04, page 25, paragraph 10 :  In paragraph 10 of Part III, the Secretariat's 
report states that China's preshipment inspection requirements have not been notified to the Customs 
Valuation Committee.  When does China plan to  notify these requirements in accordance with 
Article 5 of the Agreement on Preshipment Inspection?  
 
Answer : China plans to go through the process of veri fying whether it is indeed a valid notification 
requested and then handle it accordingly.  
15. WT/TPR/S/264-04, page 26, paragraph 12 :  Paragraph 12 of Part III of the Secretariat's 
report discusses China's customs va luation regime.  Can China confirm that it applies paragraph 2 of WT/TPR/M/264/Add.1 
Page 374 
 
 
  the Decision on Carrier Media Bearing Software and  therefore values carrier media bearing software 
based on the value of the carrier media as  opposed to the value of the software?   
 
Answer: Article 37 of the Measures of the Customs of the People's Republic of China for the 
Assessment of Dutiable Value of Import and Expor t Goods (the General Administration of Customs 
Decree No. 148) put into effect in 2006 has reflected  the legislative intent of paragraph 2 of the 
Decision on Carrier Media Bearing Software, th e Chinese customs enforces the law in strict 
accordance with the provision of this article.  III. TRADE POLICIES AND PRACTICES BY MEASURE      (1)  MEASURES DIRECTLY AFFECTING IMPORTS      (iii)  Indirect taxes affecting imports     
 
16. WT/TPR/S/264-04, page 33, paragraph 34 :  Note 27 to paragraph 34 of Part III of the 
Secretariat's report explains that [p]rimary agri cultural products sold by farmers directly to 
consumers are exempt from VAT.  According to the authorities, this exemption is implemented on 
grounds of, inter alia, administrative simplicity.  Ho wever, imports of these same products are subject 
to the VAT.  Even if it is accepted that the Chin ese authorities established this exemption for domestic 
farmers in part because of administrative simplicity , please explain on what basis China considers its 
tax treatment to be non-discriminatory within the meaning of Article III of the General Agreement on 
Tariffs and Trade 1994 (GATT 1994).  
 
Answer :  Regarding this policy, China has made explana tion and clarifications for several times.  In 
summary, we have the following points to make.  First of all, China has a huge number of small 
farmers across the country, which makes it impossi ble to conduct accounting a nd tax filing. In other 
words, to levy value-added tax upon them is  infeasible and uneconomical because of the huge 
administrative cost.  This is the fundamental reason behind the policy.  Second, in China the agricultural production is mainly based on household operation.  The sales scale is very small.  The 
VAT exemption is applied only to farmers who sell th eir own products like a kilogram of potatoes in 
an open air market.  This is completely different  from the import of products in bulk.  Their VAT 
policies are not comparable.  Third, as far as we understand, other members with a VAT system also 
seem to exempt VAT from farmer s who sell their own products, wh ile levying tax over imported 
agricultural products.   Fourth, even if we apply VAT over these farmers,  we would adopt a policy that would establish a 
commercially-meaningful threshold like in other countries.  Most farmers would fall below the 
threshold.  The real effect would be the same as th e current policy.  Therefore, China does not believe 
the current policy is not in comp liance with its WTO obligations 
 
III.    TRADE POLICIES AND PRACTICES BY MEASURE      
(1)  MEASURES DIRECTLY AFFECTING IMPORTS      
(iv)  Import prohibitions and licensing       
17. WT/TPR/S/264-04, page 34, paragraph 42 :  Paragraph 42 of Part III of the Secretariat's 
report states that, for certain products, applicants  must apply for an import permit prior to applying 
for an import license.  Could China explain th e difference between an import permit and an import 
license and why there is a need for both an import permit and an import license?       
 
Answer : Under the existing provisions, for mechanical and electrical products administered by import 
licenses, the importers need to make an application to the authorities in advan ce.  For those who have 
obtained the import licenses after examination and appr oval, there is no need for them to apply for an 
import permit.   WT/TPR/M/264/Add.1 
 Page 375 
 
 
  18. WT/TPR/S/264-04, page 35, paragraph 43 :  Paragraph 43 of Part III of the Secretariat's 
report discusses automatic import licenses, which are applied to monitor certain imports for 
statistical purposes, and states that 32 tariff lin es were added to the list on 1 January 2010 and 
21 tariff lines were added to the list on 1 January 2011.  Could China explain th e statistical purposes 
for which it uses automatic import licenses on poultry, vegetable oil, chemical fertilizers, iron ore, 
steel and coal?  Does China use the automatic import licenses for any other purposes?  What criteria 
does China use to add products to or remove products from the list?          
 
Answer : the purpose for China to implement the au tomatic import license administration is to 
strengthen the real-time monitoring of imports, to grasp the overall situation of imports and provide 
public information services for industries, which is  in line with relevant WTO provisions.  By 
counting the automatic import licenses applied fo r by companies, we can understand the overall 
situation of relevant imported goods  earlier than customs statistics so that companies can make 
reasonable arrangements for imports and the impor ted goods can be delivered in a balanced and 
orderly manner and therefore avoid over-concentr ated arrival of goods resulted from haphazard 
imports, as well as other unfavorable situation.  When there is abnormal situation in importing of 
certain commodities, or when companies or govern ment departments need to understand the import 
situation of certain goods earlier than customs statis tics, we will consider the implementation of the 
automatic import license administration for the goods in question, or we will consider abolishment of 
the automatic import license administration. 
 
III.   TRADE POLICIES AND PRACTICES BY MEASURE      
(1)   MEASURES DIRECTLY AFFECTING IMPORTS      (vi)  Contingency trade measures      
 
19. WT/TPR/S/264-04, page 39, paragraph 61 :  Paragraph 61 of Part III of the Secretariat's 
report states that the first judicial review of an anti-dumping measure in China began in October 2010.  What claims have been made by th e complaining party in that litigation?  Have any 
rulings been made by the court?  What is th e current status of the litigation?  Please explain.   
 
Answer:  On 10 April 2010, the Ministry of Commerce ma de a final arbitration after its anti-dumping 
investigation of the import-oriented electrical steel produced in Russia and other countries, that the dumping margin of Russian NLMK was 6.3%.  On 7 June 2010, NLMK did not agree with the arb itration result and applied for an administrative 
review to the Ministry of Commerce.  After the a pplicant added supplementary materials, the Ministry 
of Commerce accepted the application.  On 8 October,  an administrative review was made to affirm 
the original arbitration.  NLMK had objections against the result of admini strative review and initiated an administrative 
lawsuit to Beijing Second Intermed iate Peoples Court.  NLMK belie ved that information disclosure 
was not adequate during the case and the dumping margin was not calculated accurately, so it 
requested that the final anti-dumping arbitrati on be cancelled.  Now the case is under trial. 
 
20. WT/TPR/S/264-04, page 39, paragraph 62:  In paragraph 62 of Part III, the Secretariat's 
report notes that, before the Committee on Anti-Du mping Practices in October 2002, China received 
questions from several WTO Members regarding Ar ticle 56 of China's an ti-dumping regulations, 
which provides that China may take corresponding me asures when a trading partner discriminatorily 
imposes anti-dumping measures on exports from China.  (Similar provisions appe ar in Article 7 of 
China's Foreign Trade Law and Article 55 of China' s countervailing duty regulations.)  At the time, 
China responded before the Committee on Anti-Dumping Practices that it had not applied Article 56 
and that it would resort to the WTO dispute settlement mechanism before taking corresponding 
measures in respect of a WTO Member.      WT/TPR/M/264/Add.1 
Page 376 
 
 
   
a. Has China applied Article 7 of the Foreign Trade Law, Article 56 of the anti-dumping 
regulations or Article 55 of the countervailing duty regulations against a WTO Member since 
October 2002?  If so, please explain.        
 
Answer:  Up to now, China has not applied Article 7 of the Foreign Trade Law, Article 56 of the 
Anti-dumping Regulations or Article 55 of  the Countervailing Duty Regulations. 
 
b. Shortly after President Obama issued his decision on 11 September 2009, to impose a 
safeguard measure against Chinese tire imports purs uant to Section 421 of the Tariff Act of 
1974, as amended, MOFCOM responded to the U.S. safeguard measure on Chinese tire 
imports.  MOFCOM announced that it would initiate anti-dumping and countervailing duty 
investigations of imports of automobiles from  the United States as well as anti-dumping and 
countervailing duty investigations of imports of  chicken from the United States.  About 
20 days later, on 27 September 2009, MOFCOM  initiated anti-dumping and countervailing 
duty investigations of imports of chicken broiler products from the United States;  following the conclusion of those investigations, Ch ina imposed anti-dumping and countervailing 
duties.  On 6 November 2009, MOFCOM in itiated anti-dumping and countervailing duty 
investigations of imports of saloon cars and cross-country cars from the United States;  
following the conclusion of those investigations, China imposed anti-dumping and 
countervailing duties.  Meanwhile, on 14 Sept ember 2009, at about the time that MOFCOM 
began launching the anti-dumping and counterva iling duty investigations described above, 
China also launched a WTO dispute, United St ates Measures Affecting Imports of Certain 
Passenger Vehicle and Light Truck Tyres From China (DS399), in which it directly challenged the safeguard measure imposed by the United States on Chinese tire imports;  a 
WTO panel and the Appellate Body subsequen tly upheld the safeguard measure and rejected 
all of China's claims.  Did MOFCOM rely in whole or in part on Article 7 of the Foreign 
Trade Law, Article 56 of the anti-dumping regul ations or Article 55 of the countervailing duty 
regulations in launching its anti-dumping and c ountervailing duty investigations of imports of 
chicken broiler products from the United St ates or its anti-dumping and countervailing duty 
investigations of imports of saloon cars and cross-country cars from the United States?  If so, 
please explain how China justifies its reliance on th ose provisions in light of its obligations 
under the GATT 1994, the Agreement on Implemen tation of Article VI of the General 
Agreement on Tariffs and Trade 1994 (Anti-Dump ing Agreement) and the SCM Agreement.  
 Answer: According to the Chinese law,  the Chinese industries can apply to the Ministry of 
Commerce for trade remedy investigations in accord ance with relevant laws and regulations.  Such 
cases require companies to apply for anti-dum ping investigations and countervailing duty 
investigations according to law, and the Mini stry of Commerce places the cases on file for 
investigation after examining the qualifications  of applicants, the contents and evidences of 
applications to make sure they are in line with th e law, and it has nothing to do with Article 7 of the 
Foreign Trade Law, Article 56 of the anti-dumping regulations or Article 55 of the countervailing 
duty regulations.  
21. WT/TPR/S/264 -04, page 40, paragraph 63 :  Paragraph 63 of Part III of the Secretariat's 
report notes that [i]n 2009, China made draft rules on new shipper reviews available for public 
comment.  However, it appears that China has not yet notified these rules to the Committee on 
Anti-Dumping Practices.  In addition, it appears that regulations addressing anti-dumping tax rebate 
and price commitments were also made available fo r public comment in 2009, but have not yet been 
notified to the Committee on Anti-Dumping Practices.   When will China finalize and notify these 
measures?   
  WT/TPR/M/264/Add.1 
 Page 377 
 
 
  Answer:  China once solicited public comment on the Pr ovisional Rules on New Shipper Review and 
the Interim Rules on Price Commitments in Antidumping Investigations but has made no 
modifications so far on the above-mentioned Rules, so we did not notify the WTO. 
 
22. WT/TPR/S/264 -04, page 40, paragraph 65 :  Paragraph 65 of Part III of the Secretariat's 
report notes that China's anti-dumping regulations al low for the conduct of expiry reviews.  To date, 
China has not issued any regulations that go vern the conduct of expiry reviews, even though 
MOFCOM has conducted numerous expiry reviews, and virtually all of these expiry reviews have 
resulted in the anti-dumping measures under review be ing extended.  In these circumstances, parties 
having had to undergo expiry reviews proceedings without adequate understanding of the procedures 
and expectations of MOFCOM face a significant lack of  due process, which appears to be contrary to 
the procedural safeguards built into Articles 6 and 11.4 of the Anti-Dumping Agreement.  Could 
China clarify when regulations governing th e conduct of expiry reviews will be issued?   
 
Answer: China conducts fair and reasonable sunset re view investigations with due process in 
accordance with the relevant pr ovisions of the Regulations of the People's Republic of China on 
Anti-dumping and the common practice of WTO Members, and in practice, we strictly follow the principle of appropriate procedures and transparency to  ensure the interests and rights of stakeholders.  
China also noticed that the vast majority of the members of the WTO who carry out sunset review 
investigations did not issue their laws and regula tions on sunset review investigations, and specific 
procedures exist only in their practice. 
 
23. WT/TPR/S/264 -04, page 43, paragraph 70 :  Paragraph 70 of Part III of the Secretariat's 
report notes that there are some differences betw een China's anti-dumping procedures and China's 
countervailing duty procedures and that certain pr ocedures addressed by China's anti-dumping 
regulations are not addressed by China's countervaili ng duty regulations.  Does China have plans to 
issue additional procedural rules for its count ervailing duty proceedings?  Please explain.  
 
Answer:  China's laws and regulations on the counte rvailing duty procedures include:  the Foreign 
Trade Law of the People's Republic of China, th e Countervailing Regulation of the People's Republic 
of China and the Provisional Regulation on Investig ation and Registration of  Anti-subsidy Cases, the 
Provisional Rules on Questionnaire Investigation of  Countervailing Cases, the Interim Rules on the 
Hearing of Countervailing Investigations, the Provisional Rules on the Spot Inspection for 
Countervailing Investigations  and other departmental rules.  Chin a will, according to the needs of the 
development of the situation and requirements of countervailing duty investigation practice, revise 
and improve the relevant laws and regulations and departmental  rules, and will introduce new 
procedural rules for its counterva iling duty proceedings in good time. 
 
III.   TRADE POLICIES AND PRACTICES BY MEASURE  
(1)   MEASURES DIRECTLY AFFECTING IMPORTS    (vii)  Standards and other technical requirements      
 
24. WT/TPR/S/264-04, page 47, paragraph 88 :  Paragraph 88 of Part III of the Secretariat's 
report describes the process for developing standards and  technical regulations in China.  The United 
States believes that foreign enterprises should be  permitted and even encouraged to participate in 
Chinese standards-development efforts on an equa l and non-discriminatory basis with Chinese 
enterprises.  In North America, the development of  standards has been an open, interactive process, 
in which enterprises from around the world have pa rticipated.  The openness of these processes helps 
account for their undeniable commercial effectiven ess and helps ensure that any national standard is 
not more trade restrictive than necessary.  Does China agree that fair, open and equal access to 
participation, including the right to vote, in  standards development efforts by Chinese and 
non-Chinese enterprises alike would result in s uperior Chinese standards and superior Chinese 
proposals for consideration by international standards bodies?  If not, why not?  WT/TPR/M/264/Add.1 
Page 378 
 
 
   
Answer: SAC has been attaching great importance on Foreign Investment Enterprises (FIEs)s 
participation in national standard ization and has repeatedly welcom ed FIEs involvement on various 
occasions.  Legally registered FIEs could particip ate in standardization seminars, forums, press 
conferences, and activities in formulating and revisi ng voluntary national standards.  In principle, 
FIEs are allowed to become full members of various  standardization committees, except those related 
to national security and information security, et c.  In fact, American companies like GM, INTEL, 
SHELL, MOTOROLA are already members of many standardization committees.  Besides, the whole 
formulation process is transparent, and all enterprises, including FIEs, could submit their opinions at 
different stages.  
25. WT/TPR/S/264-04, pages 47-48, paragraphs 88 and 91 :  Paragraphs 86 and 91 of Part III of 
the Secretariat's report reference voluntary standards  (also identified as recommendatory standards).  
When a voluntary standard is made a requirement of one of China's various mandatory certification 
regimes (e.g. CCC mark registration and telecommuni cations type approval), does China notify it to 
the Committee on Technical Barriers to Trade (TBT  Committee)?  Please provide information on 
what voluntary standards are required as a c ondition of compliance with China's mandatory 
certification regimes (e.g., CCC mark registrati on and telecommunications type approval).   
 
Answer:  competent authorities in China are in the pr ocess of coordinating domestic responses among 
the relevant agencies.  
26. WT/TPR/S/264-04, page 48, paragraphs 91-92 :  Paragraphs 91 and 92 of Part III of the 
Secretariat's report distinguish between volunta ry and mandatory standards.  The United States notes 
that China rarely notifies its mandatory standards to the Committee on Sanitary and Phytosanitary 
Measures (SPS Committee) or the Committee on T echnical Barriers to Trade (TBT Committee) for 
comment and that many of China's so-called voluntary standards are enforced against imported 
products, even though they are voluntary for the pr oducts of Chinese producers.  Please explain what 
steps China will take to provide its WTO trading partners with the opportunity to review and comment 
on mandatory standards and to ensure that any c oncerns raised by WTO Members will be considered 
prior to enforcement.  Please al so explain the legal basis on  which China enforces voluntary 
standards against imported products.  
 
Answer : After accession to the WTO, Ch ina has been fulfilling its obligation in notifying compulsory 
national standards and answering comments and i nquiries.  Since 2002, all compulsory national 
standards have to go through the procedure of re views by the standing co mmittee of committee of 
SAC to decide whether they should be notified.  For those without international standards, not in 
accordance with international standa rds, not based on international standards, or initially based on 
international standards but revised, and affecting trade of other members, those on food, consumer 
goods, energy, environmental protection, mechanical and electrical products in particular, they are 
notified to the WTO in a timely manner.  By the end of May 2012, China has notified 879 compulsory 
national standards, with 808 TBT notifications a nd 71 SPS notifications.  In answering comments and 
inquiries, China attaches importance to every comment from any WTO Member, and has seriously 
replied to all the comments, including those falling out of the comment period.  For compulsory national standards that are so much concerned by  some WTO Members, China has organized experts 
to analyze and adopt the comments involving technical index changes of the standards. 
 
27. WT/TPR/S/264-04, page 48, paragraph 94 :  Paragraph 94 of Part III of the Secretariat's 
report discusses the compulsory certification requirem ent for 22 groups and 163 categories of 
products, including medical devices and various mec hanical apparatuses.  This certification process 
seems overly complex and time consuming.  What is th e average length of time from application to the 
manufacturers receipt of the CCC mark label?  Please provide information on how many CCC  WT/TPR/M/264/Add.1 
 Page 379 
 
 
  certificates are issued on an annual basis, and what percentage of CCC certificates is issued to non-
Chinese entities.   
Answer : Article 16 of the Rules on Management of Compulsory Certification (AQSIQ No. 117) 
stipulates that for those qualified, 90 days is  the normal period from acceptance to issuance.  
3C certification is carried out strictly by law and, upon request, the average period is less than 90 days.   
The total annual number of certificates depends as a pplications differ.  In the past 10 years of 
3C certification, a total number of 634,000 certificat es are issued for 98,000 enterprises.  Currently, 
more than 288,000 are still effective for 46,000 en terprises, among which, over 4,000 enterprises with 
25,000 certificates are from abroad .  
28. WT/TPR/S/264-04, page 49, paragraph 98 :  Paragraph 98 of Part III of the Secretariat's 
report explains that the China Na tional Accreditation Service for Conformity Assessment (CNAS) is 
responsible for issuing accreditations to certifying b odies, laboratories, and inspection centers.  The 
paragraph provides statistics on the number of accred itations issued.  Please provide information on 
how many non-Chinese entities have been accredite d by CNAS as approved certifiers, laboratories 
and inspection bodies. 
 Answer : China has signed entrustment agreements with 19 overseas certifying bodies (located in 
Europe, America, Japan and other economies) fo r follow-up inspections of 3C certification over 
factories abroad.  CNCA accept the insp ection reports and results of these bodies. 
 
29. WT/TPR/S/264-04, pages 49-52, paragraphs 99-108 :  In paragraphs 99 through 108 of 
Part III, the Secretariat's repor t discusses China's regime for sanitary and phytosanitary (SPS) 
measures, but it does not mention China's Food Safety Commission, which was created under China's 
2009 Food Safety Law.  Could China explain this commissions roles in food policy and trade policy and how those roles relate to the roles of the Mi nistry of Health, the General Administration of 
Quality Supervision, Inspection and Quarantine (A QSIQ), the Ministry of  Agriculture (MOA), 
MOFCOM, the National Development and Refo rm Commission (NDRC) , the Ministry of 
Environmental Protection and the State Food and Drug Administration (SFDA)?  
Answer: In order to implement The Food Safety Law a nd enhance the lead of food safety work, in 
February 2010, The State Council set up the National Food Safety Commission as the top-level 
authority to deliberate and coordinate affairs concer ning food safety.  It is responsible for analyzing 
food safety situation, studying, planning and guidi ng the overall food safety work, putting forth major 
policies on food safety regulation, and supervisin g the implementation of food safety regulation 
responsibilities.  However, it is not responsible fo r making food trade policies.  The chair of the 
Commission is vice premier Li Keqiang, with vice premier Hui Liangyu and vice premier Wang 
Qishan as the Commissions deputy chairs.  NDRC, Ministry of Environment protection, Ministry of 
Agriculture, Ministry of Commerce, Ministry of  Health, AQSIQ, State Administration for Industry 
and Commerce and State Food and Drug Administra tion and other agencies are members of the 
Commission.  The Commission has set up an office to undertake its daily work. State Food and Drug 
Administration is responsible for policy making, implementing and supervising of catering service 
industry and health food industry. 
 
30. WT/TPR/S/264-04, page 51, paragraph 102 :  In paragraph 102 of Part III, the Secretariat's 
report discusses China's SPS notification practices.  The United States notes that, in 2010, 2011 and 
2012, China's ministries introduced a plethora of measures regarding feed, feed additives, aquatic products and food additives that China did not notify to the SPS Committee.  These measures include:  
the Regulation on the Administration of Feed an d Feed Additives, MOA Decree 609;  the Measures 
for Administration of New Food Additives, MOH Or der No. 73;  MOHs Administrative Measures on WT/TPR/M/264/Add.1 
Page 380 
 
 
  New Food Additive Varieties;  MOHs General Standard for Blended Food Additives;  AQSIQs 
Hygiene and Quarantine Requirements for Imports of Fish Oil, Fish Meal, and Other Aquatic Animal 
Proteins;  MOHs Nutrition Labeling for Prepacka ged Foods;  Banned Substances in Animal Feed 
and Drinking Water, MOA Announcement No. 1519 (2011);  the Notice on Strengthening Inspection 
and Quarantine on Imported Salmon, AQSIQ No. 9 of  2011;  the National Standard for Labeling, 
SAC 2011 revision;  the Specification for Import and Ex port Food Additives, AQSIQ No. 52 of 2011;  
MOAs Administrative Measures of Production Licen se for Animal Feed and Feed Additives;  MOAs 
Administrative Measures of New Feed and New Feed Additives; MOAs Regulation on Product 
Approval Numbers for Feed Additive and Premix Feed;  and the Regulation on Feed and Feed 
Additive Import Registration, MOA 2012 amendment.  What steps will China ta ke to ensure that these 
measures and similar measures in the future will be notified to the SPS Committee for review and 
comment and that any concerns raised by WTO Members will be considered prior to enforcement?         
 
Answer:  China's SPS notification involves many departme nts, and a lot of information collection, 
analysis and collation.  After the accession to the WTO, China establishe d an inter-departmental 
working mechanism of SPS notification, and bega n a more effective operation.  China, as a 
developing member, overcomes the constraints of cap acity and resources to conscientiously fulfill the 
obligation of transparency.  For these measures mentioned above we believes that:  there are indeed 
some omissions of notification;  for some regul ations and measures that do not have significant 
impact on trade, so there is no necessarily need of no tification; for some regulations and measures that 
involve recommended standards or adopted interna tional standards, therefore no notification is 
required.  Regarding different unde rstanding of "significant impact on trade, we are willing to frankly 
exchange views with other members.  We will also continue our efforts to constantly improve our SPS 
notification, to fulfill our commitments in the WTO.  31. WT/TPR/S/264-04, page 51, paragraph 102 :  In paragraph 102 of Part III, the Secretariat's 
report states that China notified numerous measures to the SPS Co mmittee after the adoption of the 
2009 Food Safety Law, but only provided a 15-day co mment period.  What steps will China take to 
ensure that it provides a 60-day comment period for future SPS measures as required by the 
Agreement on Sanitary and Phytosanitary Measures (SPS Agreement)?  
 
Answer: From the time the 2009 Food Safety Law was adopted to 30 May 2012, China had notified 
219 revised or new SPS measures to other members th rough the WTO secretariat, ranking the third in 
2010 and the second in 2011.  5 out of these 219 notif ications are emergent ones.  Among the rest 
214 conventional notifications, 211 had provided 60-d ay comment period after distribution by the 
Secretariat, taking up over 98%, far above the WTO average level.  
 Since the promulgation of the Food Safety Law, th e draft regulations reviewed by the Laws and 
Regulations Department of AQSIQ  and notified to the WTO accordingly include the following:  
Measures on the Administration of Imported and Exported Food Safety, Measures on the Administration of Imported and Exported Diary Pr oducts Supervision, Inspection and Quarantine, 
Measures on the Administration of Imported and Exported Meat Products Supervision, Inspection and 
Quarantine, Measures on the Administration of Impor ted and Exported Aquatic  Products Supervision, 
Inspection and Quarantine, and Measures on the Administration of Registration of Overseas Producers of Imported Food.  All these drafts have  provided 60-day comment period.  The problems 
raised in the questionnaire do not exist. 
 
In addition, China has noticed that the U.S. has failed to provide ample time for comment in 
numerous SPS notifications.  Take the recent two years for example, in 2010, only 11 SPS notifications by the U.S. offered 60 day comment period, accounting for only 7% of the conventional 
notifications of the whole year.  In 2011, the num ber of notifications with 60-day comment period 
was 16 and the proportion only 9%, far below the averag e level.  We hope that the U.S. could give  WT/TPR/M/264/Add.1 
 Page 381 
 
 
  more attention to honoring its own transparency obligations, so as to give other members real 
opportunities to engage in the formula tion and revision of its SPS measures. 
 
32. WT/TPR/S/264-04, pages 51-52, paragraph 104 :  In paragraph 104 of Part III, the 
Secretariat's report notes that AQSIQ has made fi ve adjustments to the Catalogue of Entry-Exit 
Commodities Inspected and Quarantined by En try-Exit Inspection and Quarantine Organs in 
accordance with the relevant requirements and the quality of import and export commodities.  Could 
China explain the criteria that it uses to  make adjustments to this catalogue?  
 
Answer : According to Article 3 of the Implementation regulation of Commodity Inspection Law, 
AQSIQ should formulate, adjust and publish the Catalogue of Entry-Exit Commodities Inspected and 
Quarantined by Entry-Exit Inspec tion and Quarantine Organs.  The adjustments are made for several 
reasons, including the newly published laws or regul ations, which authorizes duties to the Entry-Exit 
Inspection and Quarantine Organs, for example cer tain commodities including dangerous chemicals 
are added to the Catalogue according to the Regula tions on the Control over Safety of Dangerous 
Chemicals;  certain commodities containing food ad ditives are added to the Catalogue according to 
the Notification of strengthening the administration of food additives by General office of the State Council; the adjustments are made based on some ri sk assessment results or inspection results by 
Entry-Exit Inspection and Quarantine Organs. 
 
33. WT/TPR/S/264-04, page 52, paragraph 106 :  Paragraph 106 of Part III of the Secretariat's 
report refers to the China Inspection and Quarantin e E-cert System, or China E-cert.  Please provide 
additional details on the operation of China E-cert and indicate which commodities are covered by 
this system.   
Answer: In order to facilitate the health growth of tr ade, especially the trade of agricultural and food 
product, as well as prevent fake inspection and quar antine certificate, China initiated the Inspection 
and Quarantine E-cert System.   Any country's government can access to China' s Inspection and Quarantine E-cert System 
(http://ecert.eciq.cn) and apply for registration.  After that, the country's embassy in China has to 
contact AQSIQ for approval.  Any countries governme nt can has the system to check and review the 
texts of certificates which are signed by China's inspection and quarantine organs within one year 
after AQSIQs approval.  
The system is also a platform of certificate info rmation exchange, automatic bilateral exchange and 
online checking connecting Chinese and foreign agenci es.  We have established official inspection 
and quarantine E-cert checking mechanism with the government of New Zealand, Australia, 
Netherlands and many other countries. 
 
III.   TRADE POLICIES AND PRACTICES BY MEASURE      
(1)   MEASURES DIRECTLY AFFECTING IMPORTS      
(viii)  Government procurement      
 
34. WT/TPR/S/264-04, page 53, paragraph 114 :  In paragraph 114 of Part III, the Secretariat's 
report states that [l]ocal governments account for a major part of government procurement in China;  
they accounted for about 93% of the total value of  government procurement in 2010.  Given the 
enormous amount of government pr ocurement conducted at the local government level in China, why 
has China so far included only a small number of sub- central governments in its offers of coverage in 
its GPA accession negotiations?   
 WT/TPR/M/264/Add.1 
Page 382 
 
 
  Answer : The local-level government procurements fall  within the administration of sub-central 
governments in China.  Whether sub-central governme nts will be included in the offer of coverage 
will be decided by themselves. 
 
35. WT/TPR/S/264-04, page 54, paragraph 116 :  In paragraph 116 of Part III, the Secretariat's 
report states that China does not consider procurem ent by SOEs as government procurement.  The 
revised Agreement on Government Procurement (GPA), which was adopted by the Committee on 
Government Procurement in March 2012, provides in  Article II:2 that covered procurement means 
procurement for government purposes [that is] not pr ocured with a view to commercial sale or 
resale.  Does China have any state-owned enterprises to which that description would apply?  If so, 
please identify them.       
 
Answer: No 
 36. WT/TPR/S/264-04, pages 53-54, paragraphs 111 and 117 :  In paragraph 117 of Part III, the 
Secretariat's report notes that the main laws govern ing China's government procurement are the 2002 
Government Procurement Law (GPL) and the 1999 La w on Bid Invitation and Bidding or Tendering 
(TBL).  Paragraph 111 of Part III further notes t hat preparatory work is under way on eventual 
changes to [China's] legislative framework to bring it in conformity with the GPA.  Based on Article 4 
of the GPL, most construction projects are subject to the TBL, not the GPL.  What steps is China 
taking to provide for compliance of construction projects with the GPA? 
 
Answer:  Basically, the principles in the Tendering and Biding Law are in line with those of GPA. 
The Tendering and Biding Implementation Rules, wh ich came into effect on 1 February 2012, gives 
more clear and detailed prov isions on project biding. 
 
37. WT/TPR/S/264-04, page 56, paragraph 130:  In paragraph 130 of Part III, the Secretariat's 
report states that China's accession to the GPA, wh en it is completed, is likely to be a win-win 
outcome for all concerned.  The United States notes, however, that it has been more than 10 years 
since China acceded to the WTO and that China committed in its Protocol of Accession to begin its 
GPA accession negotiations as soon as possible.  At this point, while China has begun its GPA 
accession negotiations, it appears that those negot iations may take longer than the vastly more 
complex and comprehensive negotiations between China and members of the Working Party on China 
that enabled China to accede to the WTO in 2001.   Please explain why China's GPA accession has 
been so delayed.  
 Answer:  China is the largest developing country in the world.  The governments procurement reform 
is still at the initial stage.  However, China's sta ndpoint to accede to GPA is never changed.  So far 
China is trying to create conditions to expanding its offer list.  To a great extent, Chinese accession 
process is decided by whether GPA participants would adopt a reasonable attitude and request the 
offer suitable to Chinese current development. 
 
III.  TRADE POLICIES AND PRACTICES BY MEASURES     
(2)  MEASURES DIRECTLY AFFECTING EXPORTS      (ii) Export subsidies     
 
38. WT/TPR/S/264-04, page 58, paragraph 136 :  In paragraph 136 of Part III, the Secretariat's 
report makes the following statement:  The authori ties state that China does not provide any export 
subsidies.  However, numerous WTO Members, including the United States, both in the counter notification that it filed in 2011 under Article 25. 10 of the SCM Agreement and in other WTO 
submissions, have previously identified and raised  questions about a wide  range of unreported 
subsidy programs, and many of th ese subsidy programs have appeared to be contingent upon export 
performance.  Indeed, to date, the United St ates has brought three WTO cases (DS358, DS387 and  WT/TPR/M/264/Add.1 
 Page 383 
 
 
  DS419) in which it has challenged numerous Chin ese subsides as prohibited export subsidies or 
prohibited import substitution subsidies.  In each case, China subsequently repealed the challenged 
subsidies or modified them to remove either an expor t contingency or a local content requirement.   
 
a. The United States understands that China main tains national export bases and provincial 
export bases for products in numerous industrial sectors.  For each sector, please identify the 
measures providing for the export bases, descri be the support provided to manufacturers of 
products in the sector in connection with th e export bases over the past 3 years, and explain 
this support in light of China's obligations under Article 3 of the SCM Agreement.  
 
Answer: The policies regarding export base construction is  in full compliance with WTO rules, with 
focus on creating equal and standardized competiti on environment and changing the mode of export 
growth.  There is a shift from simply seeking quantity expansion to emphasizing quality and 
efficiency improvement.  Specific policies covers  developing public service platform, standardizing 
export order, enhancing IPR protection, promoti ng trade and improving public service, etc.   
 
b. In a notice issued on 28 April 2011 and available on the Ministry of Finance (MOF) website, 
the MOF provides that the government will prov ide interest rate subsidies to technology 
exports in 2011 for the purposes of maintain ing foreign trade growth, optimizing export 
structure, spurring fast technology export growth  and promoting shifts in the pattern of trade 
growth.  Such exports include patent right and patent application right transfers, patent 
licensing, proprietary technology transfer or licensing, technical services, software technology and related information service ex ports.  To qualify, a company must have 
registered with MOFCOM and in 2010 recorded  at least $100,000 in technology export 
foreign exchange earnings.  Could China confirm th e details of this program?  Do any of the 
subsidy recipients manufacture, produce or sell goods in addition to supplying services?  
Could China explain this program in light of China's obligations under Article 3 of the SCM Agreement?        
 
Answer:  According to the Notice of the Ministry of Finance and the Ministry of Commerce on 
Discount Funds for Technology Export in 2011 (Caiqi [2011] No.55), we support to patent right and 
patent transfer, application right transfer, patent implementing license, proprietary technology transfer 
or licensing, technical services, software technol ogy and related information service export.  For 
technology exportation, the income amount in USD is taken as the principal when discount is calculated.  For discount clearing, discount rate should be no higher than the latest RMB one-year 
lending rate released by People's Bank of China. 
 
III.  TRADE POLICIES AND PRACTICES BY MEASURES      
(2)  MEASURES DIRECTLY AFFECTING EXPORTS      (iv)  Tax rebates on exports      
 
39. WT/TPR/S/264-04, page 59, paragraph 143 :  Paragraph 143 of Part III of the Secretariat's 
report explains that in China the value-added tax (V AT) may be rebated on exports, but exporters are 
generally entitled to VAT rebates lower than the VA T actually paid.  The Secretariat's report notes 
that [t]he difference between the two rates constitute s a levy on exports, which may in turn constitute 
assistance to downstream processing of the products a ffected, and could affect China's terms of trade.  
It adds that China adjusts VAT rebate rates as part of its industrial policies, to control, restrict, or 
otherwise manage the export of certain products.  Th e United States is also concerned that China's 
use of VAT rebate rates that vary between and amon g exported products severely distorts trade.    
 
a. Does China consider its VAT rebate policies n ecessary in part because it has not yet 
developed a fully functioning market economy?  Please explain.   
 WT/TPR/M/264/Add.1 
Page 384 
 
 
  Answer:  Export rebate policy is a general system a rrangement of countries that carries out VAT 
system in international trade.  It is an interna tional practice, and cannot be linked with whether the 
market economy is sound or not. 
 
b. While China has reduced or eliminated th e VAT rebate on many products, it has continued 
high VAT rebates on other, closely-related downst ream products.  As the Secretariat's report 
indicates, the amount of VAT rebated on total expor ts has continued to increase over the past 
two years.  Does China view its VAT rebate po licies as contributing to China's goal of 
rebalancing its growth by promoting domestic led growth over export led growth?  If so, 
please explain.   
 
Answer: Export is one of the important measures to drive economic growth, while export rebate 
policy is only a practice generally adopted by countr ies that carries out VAT system in international 
trade.  This is no direct correlation between export rebate policy and applying which mode to 
rebalance economic growth. 
 
c. Does China agree with the assessment that its  VAT rebate policies act as assistance to 
downstream processors that could affect China's terms of trade?  Does China also agree that 
its VAT rebate policies have the affect of decreasing costs for downstream processing 
industries?  Please explain.  
 
Answer: The adoption of rebate rate generally lower than levy rate is mainly because of scarce 
capacity of China's fiscal burden.  The viewpoint th at the difference between le vy rate and rebate rate 
constitutes an encouragement for dow nstream processing of relevant pr oducts is unilateral, and lack 
of sound theoretical and empirical support.  
 
d. The Secretariat's report notes that China chan ges the varying rates of VAT rebates from time 
to time.  The United States is concerned that  China's changes to the VAT rebates have often 
been arbitrary and disruptive to market pla yers, with little or no opportunity for public 
comment.  Does China plan to fully vet any future changes to its VAT rebate policies by 
allowing public comment on proposed changes?  Please explain.      
 
Answer: Our adjustments for export rebate rate are all made according to legal proceedings, and 
opinions will be solicited from releva nt industries (market players) befo re adjusting expor t rebate rate, 
and such situation of arbitrarily changing VAT re bates or little or no opportunity for public comment 
does not exist. 
 
e. China has indicated that it is studying the po ssibility of adopting a uniform VAT rebate policy 
consistent with the policies prevailing in ot her WTO Members with a VAT system.  When does 
China anticipate that it will be able to adopt a uniform VAT rebate policy?  Please explain.  
 
Answer: Please explain the accurate meaning of a unifo rm VAT rebate policy consistent with the 
policies prevailing in other WTO Members with a VAT sy stem.  If it refers to that the VAT rebates of 
all export goods shall follow statutory levy rate, we explain as follows:  China is a developing 
country, and the percentage of turnover tax is much  higher than those of developed countries, so the 
impact of export rebate on China's finance is much higher than those of developed countries. 
Therefore, in a period of time, China is unable to follow statutory levy rate for all goods like Western 
developed countries.  
40. WT/TPR/S/264-04, page 59, paragraph 143
:  China actively uses variable VAT rebate rates 
on numerous steelmaking raw materials and primary, semi-finished and finished products in the steel 
sector.  What objectives is China seeking to ac hieve through these practices?  Has China considered 
other less trade-distorting means for achieving its ob jectives?  In the period since China began using  WT/TPR/M/264/Add.1 
 Page 385 
 
 
  these variable VAT rebate rates in the steel sector , China's steelmaking capacity has grown from 
424 million metric tons (MT) in  2005 to 815 million MT in 2011, and China has become a large net 
exporter.  Please explain how China's VAT rebate policies contribute to rationalization and market-
orientation of the steel industry in China.  
 
Answer: The adjustment of export rebate rate is not  beyond the levy rate, and does not constitute 
subsidiaries for export goods.  The rebate rate for primary products in the steel sector is much lower 
than the levy rate, and such pro ducts join in international market  competition under a climate of cost 
increase.  Under such a situation, China becomes a large net exporter of steel, and this shows the 
impact of supply demand relations on product export is  much larger than the change of export rebate 
policy.  
41. WT/TPR/S/264-04, page 59, paragraph 143 :  Aluminum foil and other finished aluminum 
products are other energy-intensive products who se exports are impacted by China's system of 
variable VAT rebate rates.  What objectives is China seeking to achieve through these practices?  Has 
China considered other means for achieving its objectives?  Please explain.   
 
Answer: The adjustment of aluminum export rebate ra te is not beyond the levy rate, and does not 
constitute subsidiaries for export goods.  The re bates of aluminum products and other energy-
intensive products do not follow the levy rates, and that is mainly because of our scarce fiscal support 
capacity a.  
42. WT/TPR/S/264-04, page 59, paragraph 143 :  Soda ash is one of the products whose export 
has been managed by China through the changes to  VAT rebate rates discussed in paragraph 143 of 
Part III of the Secretariat's report.  Soda ash is an  inorganic chemical that is used in the production 
of glass and detergents.  China's soda ash pr oduction capacity has grow n dramatically in recent 
years, even though 95% of China's soda ash is prod uced through synthetic pr ocesses, rather than the 
less energy-intensive natural process using mined tr ona ore (as in the United States, for example).  
Synthetic production of soda ash is  about one-half as energy efficient as soda ash produced from 
trona and results in much higher emission of pollutants.  In 2007, China eliminated the VAT rebate on 
soda ash in a stated attempt to address over-capacity problems in the soda ash sector.  In July 2009, 
China changed the VAT rebate rate from zero to  9%, apparently to make Chinese soda ash more 
competitive in export markets.  What objectives  is China seeking to achieve through these practices?  
Has China considered other less trade-distortive me ans for achieving its objectives?  Please explain. 
 Answer: The adjustment of soda ash export rebate ra te is not beyond the levy rate, and does not 
constitute subsidiaries for export goods.  Due to no n-full-amount rebate, the cost for exporting soda 
ash is increasing.  Under such a situation, if su perior global competitiveness can be achieved, we can 
say that the impact of export rebate on trade is much smaller than that of other factors.  
III.  TRADE POLICIES AND PRACTICES BY MEASURES      
(2)  MEASURES DIRECTLY AFFECTING EXPORTS      
(iv)  Export prohibitions, restrictions, and licensing  
 
43. WT/TPR/S/264-04, pages 59-60, paragraphs 146-150 :  In paragraph 7 of the Summary, the 
Secretariat's report states that China uses various  non-tariff border measures, such as import and 
export licensing and state trading to guide the allo cation of resources.  Subsequently, in paragraphs 
146-150 of Part III, the Secretariat's report discu sses in more detail various export prohibitions, 
export quotas and export licensing employed by China,  particularly with regard to natural resources.  
It also references the report prepared by the S ecretariat in connection with China's Trade Policy 
Review in 2010, where it stated:  [W]hether inte nded or not, export restraints for whatever reason 
tend to reduce export volumes of the targeted products and divert supplies to the domestic market, 
leading to a downward pressure on the domestic pri ces of these products.  The resulting gap between WT/TPR/M/264/Add.1 
Page 386 
 
 
  domestic prices and world prices constitutes implic it assistance to domestic  downstream processors 
of the targeted products and thus  provides them a competitive advantage.  Insofar as China is a major 
supplier of such a product, export restraints may al so shift the terms of trade in China's favour.  
Although the Secretariat's report does not mention it, the Appellate Body and a WTO panel recently 
found in China  Measures Related to the Exportation of Various Raw Materials (DS394, DS395 and DS398) (China  Raw Materials), that China's use of various export quotas and export duties on several industrial raw materials violated WTO rules, and China has committed to come into 
compliance with those findings.  At the same time, China continues to maintain export restrictions on 
numerous other raw materials.  
a. Please explain China's plans for the export quot as that it maintains on raw materials that 
were not among those challenged in China Raw Materials.  
 
Answer: In recent years, faced with increasingly sever e resource and environmental pressures, the 
Chinese government continues to strengthen and im prove the integrated management of some 
resource products, especially those high-pollution, high energy consumption products, this not only 
meets the needs of China's own scientific developmen t but also is an important effort for promoting 
the global sustainable development.  China pursues a synchronized management of the export of raw 
material products and their expl oration and production at home, a nd reasonably determines the annual 
volume of exports to meet the basic needs of  the international markets based on an overall 
consideration of the domestic and foreign markets,  resources and environment carrying capacity.  This 
also shows China is a responsible member of the WT O.  China has no intention to limit the free trade, 
nor does it intend to protect the domestic industries by distorting trade, and our policy goals are in line with WTO rules.  
In the future, China will, based on careful asse ssment of the WTO rulings on the cases of raw 
materials, continue to implement scientific ma nagement for resource products in accordance with 
WTO rules to achieve sustainable development. At the same time, we urge the relevant countries to 
abide by the WTO rules in export restrictions.  b. Given the sweeping nature of the panel and Appellate Body findings on export duties in China 
Raw Materials, please explain China's plans re garding elimination of all of the export duties 
that it maintains on products that are not listed in Annex 6 to China's Protocol of Accession.  
 
Answer:  According to the practices WTO has in disput e settlement, the rulings made by the Panel 
and Appealing Body only applies to 9 products includ ing coke.  China will take measures conforms to 
WTOs discipline in regard of export admi nistration on products beyond the 9 products. 
 
III.  TRADE POLICIES AND PRACTICES BY MEASURES      (2)  MEASURES DIRECTLY AFFECTING EXPORTS       (viii) Export finance, insurance, and guarantees       
 
44. WT/TPR/S/264-04, page 61, paragraph 154 :  Paragraph 154 of Part III of the Secretariat's 
report notes that there is no local content requiremen t to obtain export finance.  Is this statement 
intended to suggest that China's export credit financing is tied to local content requirements in China, 
or is the statement referring to local content requirements in the buyer country?  
 
Answer : China's export credit financing has nothing to do with the buyer country's local content 
requirement and China's local content requirement. 
  WT/TPR/M/264/Add.1 
 Page 387 
 
 
  III. TRADE POLICIES AND PRACTICES BY MEASURE       
(3) MEASURES AFFECTING PRODUCTION AND TRADE      (i) Taxation and tax incentives      
 
45. WT/TPR/S/264-04, page 66, paragraph 175 :  Paragraph 175 of Part III of the Secretariat's 
report states that [c]onsumption tax is rebated  fully on exports, except where the product is not 
eligible for rebate.  Please identify the products fo r which the consumption tax is rebated fully upon 
export.  Please also identify the products for which the consumption tax is rebated partially or not at 
all, along with the applicable rebate rate.     
 
Answer:  The products eliminated from export rebates include both those eliminated from VAT 
rebates and those eliminated from consumption tax (i f the products fall under the taxable scope).  The 
consumption tax of products  eliminated from export rebates will not be rebated. 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE      (3) MEASURES AFFECTING PRODUCTION AND TRADE      (ii) Subsides and other government assistance      
 
46. WT/TPR/S/264 -04, page 69, paragraph 190 :  The Secretariat's report states that the main 
instruments of government assistance to business pr ovided at the central and sub-central government 
levels are direct grants, subsidized loans and tax benefits.  The 2011 IMF Article IV Report for China 
also explains that the selective use of low-cost fa ctor prices, such as low prices for land, offers 
Chinese firms a competitive edge and creates incenti ves for capital intensive means of production.  
(See 2011 IMF Article IV Report for China, page 20.)   Please explain what steps China is taking to 
correct the price distortions created by it s selective use of low prices for land.   
 
Answer:   The Property Law publicized in 2007 stipul ates in a legal way that… The commercial land 
for industry, commerce, tourism and commercial residential bu ildings shall be sold via public bidding 
invitation and auction.  Therefore, except the special land for military use and indemnificatory 
housing, any organization or individual who would like to obtain the land-use right from governments 
at all levels has to compete in the domestic open ma rket.  What was mentioned in the IMF report is a 
misconception that doesn't fit reality.    
47. WT/TPR/S/264-04, page 69, paragraph 193 :  Paragraph 193 of Part III of the Secretariat's 
report states that a large part of China's November 2008 fiscal stimulus package was to be 
implemented through increased bank lending.  Please identify the banks that were involved in this 
stimulus package.  How much of the aggregate loan volume was attributable to state-owned commercial banks (SOCBs) versus China's policy banks?  
Answer: Fiscal stimulus plan is not designated to any specific financial institution for 
implementation.  On the basis of national policies and under the market-oriented principle, banking 
financial institutions can decide by themselves whethe r to provide related financial services.  There is 
no proportion requirement for total loan amount.  At the end of 2011, the loan balances of state-owned 
commercial banks and China's policy bank s are respectively RMB 23.05 trillion and 
RMB 6.63 trillion.  48. WT/TPR/S/264-04, page 69, paragraph 194 :  Paragraph 194 of Part III of the Secretariat's 
report explains that programmes described in th e industrial revitalization plans adopted in 2009 for 
ten sectors were implemented over the past three years.   The ten sectors include the automotive, steel, 
ship building, petrochemical, textile, light  manufacturing, non-ferrous metal, equipment 
manufacturing, electronics and IT, and logistics sectors.  Please provide detailed information 
regarding the budget allocated to the programs described  in the industrial revitalization plan for each WT/TPR/M/264/Add.1 
Page 388 
 
 
  sector.  Please also provide detailed information on the monies actually disbursed and loans provided 
pursuant to these programs. 
 Answer: As of the end of 2011, the RMB and foreign cu rrency medium and long-term loan balances 
put to the ten sectors with industrial revitalization plans are respectively:  RMB 72.8 billion for automobile, RMB 266.5 billion for steel, RMB 693.6 billion for petrochemical, RMB 65.1 billion for textile, RMB 887.4 billion for light manufacturi ng, RMB 167.4 billion for non-ferrous metal, 
RMB 398.5 billion for equipment manufacturing, and RMB 144.7 billion for electronics and IT, and 
for ship building and logistics sector s, no statistics are available yet. 
 
49. WT/TPR/S/264-04, page 69, paragraph 195 :  Paragraph 195 of Part III of the Secretariat's 
report refers to a Special Fund for Development of Renewable Energy, which was established in 2007 
to provide grants to energy conservation projects.  How much money is contained in this fund?  How 
many grants have been disbursed out of this fund?   What are the criteria that an enterprise must 
satisfy to receive a grant from this fund?   
Answer: Special Fund for Development of Renewable Ener gies refer to all funds offered by relevant 
departments for different renewable energies.  These departments formul ate correspondent supportive 
policies to different renewable energies on the basi s of their development stage and characteristics, 
and there is no uniform fund application guidance or annual report.  To get special fund, enterprises 
should meet the requirements of the policies and re gulations on renewable energies formulated by 
relevant departments.  
50.   WT/TPR/S/264-04, page 71, paragraph 204 :  Paragraph 204 of Part III of the Secretariat's 
report states that, in China, enterprises making lo w profits receive preferential tax treatment.  Please 
explain why the Chinese Governme nt does not allow the market to dictate outcomes.  
 
Answer:  Small low-profits enterprises play an irre placeable role in promoting economic growth, 
boosting employment, and improving scientific and technological innovation ability. Providing 
support for small and weak economic  entities is generally adopted by countries across the world. 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE      
(3) MEASURES AFFECTING PRODUCTION AND TRADE      (iii) Industrial policies      
 
51. WT/TPR/S/264-04, page 72, paragraph 210 :  One of the ten sectors identified in note 184 to 
paragraph 210 of Part III of the Secretariat's repor t for boosted development beginning in 2009 is the 
automotive sector.  The United States understands that the sector-specific plan for the automotive sector issued in 2009 discusses support for export bas es for autos and auto parts, as do a number of 
other measures, such as the Policies for Autom obile Trade, issued by MOFCOM on 10 August 2005 
[Order No. 26].  Please identify any other measur es providing for these export bases.  Please also 
describe the support provided to manufacturers of autos and auto parts in  connection with these 
export bases over the past 3 years, and explain this  support in light of Ch ina's obligations under 
Article 3 of the SCM Agreement.   
 
Answer:  In 2006 and 2007, the Ministry of Commer ce and the National Development and Reform 
Commission have identified 12 areas such as Changc hun as the national automobile and auto parts 
export bases.  The identification of such bases aims  to improve the degree of concentration of auto 
sector, promote international cooperation and excha nges, strengthen the protection of intellectual 
property, accelerate the transformation of the de velopment pattern of foreign trade, develop 
demonstration bases for orderly expor t and protection of intellectual property, as well as an important 
carrier for transfer of the world auto industry and international exchanges and cooperation.  For  WT/TPR/M/264/Add.1 
 Page 389 
 
 
  specific policy measures over the past three y ears please refer to the Plan on Adjusting and 
Revitalizing the Auto Industry (GuoFa [2009] No. 5).  III. TRADE POLICIES AND PRACTICES BY MEASURE      (3) MEASURES AFFECTING PRODUCTION AND TRADE      (v) State-owned enterprises, private enterprises, and corporate governance      
 
52. WT/TPR/S/264 -04, page 73, paragraph 219 :  Paragraph 219 of Part III of the Secretariat's 
report states that SOEs have traditionally benefite d from better access to capital than domestic 
private enterprises, although the authorities emphasize that this is due, inter alia, to historical 
reasons and the size of enterprises, and that the Government has always supported the development of 
enterprises of all ownership st ructures equally.  The United States notes that, in 2004, the China 
Banking Regulatory Commission (CBRC) issued the Regulation Governing Capital Adequacy of 
Commercial Banks, which assigned central SOEs a lower risk rating than private enterprises (i.e. 
50% as opposed to 100%).  According to the OE CDs 2010 Economic Survey, this action reinforces 
Chinese banks traditional propensity for banks to lend to large SOEs.  Is the 2004 regulation still in 
effect?  If not, please explain the weightings th at the CBRC currently assigns to various types of 
enterprises.  
 Answer: According to Commercial Bank Law of People' s Republic of China, a commercial bank 
operates independently takes up responsibility for a ll risks it may encounter and for its own profits 
and losses it may bear and exercises self-regulating mechanism on the management principle of economic efficiency safety and liquidity.  A comme rcial bank shall conduct its business in accordance 
with the law free from interference by any department  or individual.  No organization or individual 
may force a commercial bank to extend a loan or provide guarantee for a loan.  A commercial bank 
shall have the right to refuse any organization's or  individual's demand for a loan or guarantee.  To 
sum up, lending decisions by State owned Commercial Banks are based entirely on commercial consideration.   
53. WT/TPR/S/264 -04, page 75, paragraph 225 :  Paragraph 225 of Part III of the Secretariat's 
report states that [t]he NDRC, in line with [the State-Owned Assets Supervision and Administration 
Commission (SASAC)], supports national champions and promotes the reform of key industries, such 
as automobiles and steel, via industrial policies to im prove the competitiveness of the dominant SOEs.  
Please explain why China promotes national champion s in sectors already dominated by SOEs.  How 
is this policy goal regarding SOEs consistent with the statement in paragraph 219 of Part III of the 
Secretariat's report, which expla ins that the Government has always supported the development of 
enterprises of all own ership structures equally? 
 
Answer:  The State-Owned Assets Supervision and Administration Commission is a special 
organization directly under the State Council, and it  performs the contributors duties pursuant to law. 
The so-called the National Development and Refo rm Commission in line with the State-Owned 
Assets Supervision and Administration Commission provides economic support does not exist.  The 
automobile and steel enterprises among national ente rprises mainly depend on independent operation 
behaviors such as market competition and scientific  & technological progress to achieve development. 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(3) MEASURES AFFECTING PRODUCTION AND TRADE    
(vi)  Competition and consumer protection policy   
 
54. WT/TPR/S/264 -04, page 78, paragraphs 239-245 :  Paragraphs 239-245 of Part III of the 
Secretariat's report discuss the Anti-Monopoly Law.   Please explain the relationship between 
provisions of the Anti-Monopoly Law such as Ar ticle 55 on Abuse of Intellectual Property and the 
2004 Judicial Interpretation Concerning Some Issues on Application of Law for the Trial of Cases on WT/TPR/M/264/Add.1 
Page 390 
 
 
  Disputes over Technology Contracts, especially Ar ticle 10 thereof, which deals with monopolization 
of technology.  
Answer : Article 55 of Anti-trust Law of China states th at, this law is not applicable to undertakings 
who exercise their intellectual property rights in accordance with the laws and administrative 
regulations on intellectual property rights;  however this law shall be applicable to the undertakings 
who eliminate or restrict market competition by abus ing their intellectual property rights.  This shows 
that China's anti-trust law clearly make legitima te IPR practice an exception but strongly opposes 
abusing IPR to eliminate and restrict market competit ion.  With respect to the nature of the Anti-trust 
Law in penalizing IPR abuse in eliminating and restricting market competition, the State Administration for Industry and Commerce (SAIC) is leading an effort to draft the Guideline on the 
Anti-trust Enforcement in IPR. Article 329 of th e Contract Law states that illegally molopolies 
technologies and impedes technological progress;  in ar ticle 10 of judicial interpretation of technology 
contract states that it only adjust the practice that abuse IPR license, including certain monopoly 
cases.  Therefore, specific IPR abuse doesn't constitute monopoly, they are subject to article 329 of 
contract law and article 10 of judicial  interpretation of technology contract 
 
55. WT/TPR/S/264 -04, page 78, paragraph 243 :  Paragraph 243 of Part III of the Secretariat's 
report discusses the enforcement of competition law in  China, which is shared by three agencies, 
coordinated and guided by the Anti-Monopoly Commi ssion under the State Council.  Given that the 
Anti-Monopoly Commission includes SASAC, which ow ns China's largest SOEs, how does China deal 
with conflicts of interest that arise between SASAC's role as SOE owner and SASAC's role as 
regulator, in that it is a member of the An ti-Monopoly Commission, which oversees Anti-Monopoly 
Law enforcement?   
 
Answer: The Anti-Monopoly Commission under the State Council is a coordinator instead of an 
entity.  It doesn't directly engage in enforcement.  As a member of the Anti-Monopoly Commission, the State Assets Supervision and Administration Commission (SASAC) is able to supervise the 
competition of State-owned Enterprises, and prom ote implementation of legislation among central 
SOEs.  The MOC, NDRC and SAIC are responsible for anti-trust enforcement.  SASAC is not an 
enforcement body, thus there is no conflict of interest.  
 Meanwhile, Anti-Monopoly Law is equally applicable to foreign and domestic enterprises of various 
ownerships.  First, SOE shall declare when operation concentration reaches the standard of 
declaration;  second, the MOC will review the SO E with operator concentration according to law, 
without any differentiated preference;  finally, any enterprises whatever their ownership, the operators 
will bear corresponding legal responsibility if they  fail to declare according to law.  The 
Anti-Monopoly Law has clear statement on this.  In  December 2011, the MOC issued the Provisional 
Measures on the Investigation and Handling of C oncentrations between Business Operators not 
Notified in Compliance with the La w, which is effective as of 1
 February 2012.  The Measures give 
requirement for the procedure, investigation measu re and penalization for failing to report operator 
concentration according to law. 
 
56. WT/TPR/S/264 -04, page 81, paragraph 250 :  Paragraph 250 of Part III of the Secretariat's 
report explains that [i]ndustrial associations are prohibited from organizing or facilitating monopoly 
agreements among their members.  Have the Anti- Monopoly Law enforcement agencies enforced the 
Anti-Monopoly Law against any industrial asso ciations for organizing or facilitating monopoly 
agreements by their members?  If so, please provid e a short summary of each instance of enforcement 
and any penalty imposed.  
Answer:  the Anti-trust Law of China clearly states that industrial association shall not organize the 
operator in eliminating and restricting market comp etition.  The SAIC conduc ts anti-trust enforcement 
by law in an active and sound way.  In 2010, the SAIC entrusted the Administration for Industry and  WT/TPR/M/264/Add.1 
 Page 391 
 
 
  Commerce of Jiangsu Province to investigate the case of the Concrete Committee of the Concrete 
Material and Mechanical Society of Lianyungang organizing monopoly activity.  According to the 
provisions of Anti-trust Law, the party concerned was ordered to stop illegal practice and the society 
was penalized RMB 200,000.00, and the core member  companies were confiscated with all illegal 
earning and penalized RMB 900,000.00.  
57. WT/TPR/S/264 -04, page 82, paragraph 256 :  Paragraph 256 of Part III of the Secretariat's 
report states that [b]etween 2008 and 2011, MO FCOM received 382 cases for review, of which 
371 were unconditionally cleared, 10 were cleared subj ect to conditions, and 1 case was rejected.  
How many of the 382 reviewed cases involved (1) SOEs merging with other SOEs, (2) mergers 
between SOEs and private enterprises and (3) pr ivate enterprises merging with other private 
enterprises?   
 
Answer: The MOFCOM treat companies with equality when reviewing cases of high-concentrating 
operators, regardless of different ow nership.  Given the fact that many companies have complicated 
shareholding structure, the MOC has no statistics in this field.  
III.   TRADE POLICIES AND PRACTICES BY MEASURE     
(3)   MEASURES AFFECTING PRODUCTION AND TRADE     
(vii)  Intellectual property rights     
58. WT/TPR/S/264 -04, page 86, paragraph 277 :  In paragraph 277 of Part III, the Secretariat's 
report discusses the Inter-Ministerial Joint Conferen ce for the Implementation of National Intellectual 
Property Strategys drafting of Anti-Monopoly Guid elines for Abusive Use of Intellectual Property 
Rights.  Can China confirm that the Joint C onference will circulate draft guidelines for public 
comment?  What is the Joint Conferences timeline for issuing draft and final guidelines?   
 
Answer : Article 55 of the Anti-Monopoly Law reads… This Law is not applicable to the 
undertakings which exercise their intellectual propert y rights in accordance with relevant laws and 
regulations on intellectual property rights.  However,  this Law shall be appli cable to the undertakings 
which eliminate or restrict market competition by abusing their intellectual property rights.  This 
indicates that Chinese Anti-Monopoly Law is against the abusive use of intellectual property rights 
which eliminates or restricts market competition.  To enforce the relevant provisions of the Law, 
SAIC is leading the drafting of Anti-Monopoly Guide lines for the Use of Intellectual Property Rights.  
During the drafting process, besides referring to relevant guidelines and rules and enforcement 
practices of other countries, we made extensive do mestic investigations and researches and invites 
opinions from enterprises, courts and government ag encies for several times in China.  In moving 
forward the drafting work, we will continue to in vite opinions from relevant parties and welcome 
comments or suggestions from the US or other countries.  
59. WT/TPR/S/264 -04, page 86, paragraph 277 :  In paragraph 277 of Part III, the Secretariat's 
report refers to revisions of various IPR-related laws.  The United States understands that the 
Trademark Law revision is with the State Council Legi slative Affairs Office (SCLAO), an Anti-Unfair 
Competition Law draft may also be with the SC LAO, and a Copyright Law revision is with the 
National Copyright Administration.  What is the timeline for issuing draft revisions to these laws and 
seeking public comment?  What is the timeline for fin al revisions?  Are any related regulations being 
drafted?  Will they be available in draft form fo r at least 30 days public comment?  Please explain.  
 
Answer: For the amendment of Trademark Law, SCLAO is reviewing the draft amendment for 
review prepared by SAIC.  In January 2010, SC LAO invited opinions for this draft from various 
organizations including WIPO and trademark agenci es of US, EU and Japan.  In September 2011, the 
Trademark Law (Draft Amendment) (Draft for Solicitation of Opinions) was published on 
www.chinalaw.gov.cn and provided a 30-day period for public comments.  WT/TPR/M/264/Add.1 
Page 392 
 
 
   
For the amendment of Anti-Unfair Competition La w, the draft amendment for review has been 
prepared by SAIC and submitted to SCLAO for review. 
 
For the amendment of Copyright Law, the Nati onal Copyright Administration published the draft 
amendment on its official website on 31 Marc h 2012 to solicit public opinions till 30 April 2012.  
During the period, the National Copyright Admini stration received comments and suggestions from 
US State Patent and Trademark Office, US Copy right Office and relevant US associations and 
enterprises.  Currently, there is no specific time line for the final revision and promulgation of the 
amendment.  The National Copyright Administration and SAIC is now drafting the Copyright Law (draft amendment for review) and releva nt implementation regulations. 
 60. WT/TPR/S/264 -04, page 87, paragraph 278 :  In paragraph 278 of Part III, in noting a 
number of new IPR-related rules and regulations since China's last Trade Policy Review, the 
Secretariat's report states:  China also promulgated  the Interim Measures on Payment by Radio and 
TV Stations for Broadcasting Audio Products.  The Un ited States notes that the implementation of this 
compulsory license for the public performance of mu sical works affects China's obligations under the 
Berne Convention, which is incorporated into the TRIPS Agreement by Article 9.1 of the TRIPS 
Agreement.  Please provide information regarding the implementation of this measure, including 
details on the collection and distribution of moni es (i.e., tariffs) received under this measure.  
 
Answer: According to Interim Measures on Payment by  Radio and TV Stations for Broadcasting 
Audio Products promulgated in November 2009, Chin ese radio and TV stations negotiated the fee for 
broadcasting audio products with Music Copyright Society of China (MCSC), the only certified 
collective music copyright management organization in China.  In 2010 and 2011, CCTV and China National Radio signed agreement with MCSC resp ectively on the package license of all musical 
works managed by MCSC.  By far, 12 radio sta tions and 33 TV stations in China have signed 
agreement with MCSC for the use of musical wo rks. The license fee for 2010 between MCSC and 
CCTV is RMB 19 million.  The total license fee for 2011 between MCSC and CCTV, China National 
Radio and 10 local TV stations is RMB 20.25 million.  
61. WT/TPR/S/264 -04, page 89, paragraph 286 :  In paragraph 278 of Part III, the Secretariat's 
report discusses the activities of the Patent Re-exa mination Board (PRB).  Please describe the types 
of patents reviewed by the PRB (e.g. invention, u tility and design), the extent to which these patents 
are service or non-service patents, and the numbers of cases where a foreigner is a party (as 
petitioner or respondent).  Please also identify th e number of appeals of grant/validity decisions 
heard by the Beijing Number 1 Intermediate Court and provide data on the types of patents involved, 
the rates of reversal or change on appeal, and th e number of cases involving a foreign party (as 
appellant or appellee). 
 
Answer: (1) Cases concerning patent review requests.   In 2011, the PRB accepted 12,946 review 
requests, including 12,850 requests involving inve ntion patent right, 66 requests involving utility 
patent right and 30 requests involving design patent right.  In 2011, the PRB concluded 10,116 review 
request cases, including 10,056 cases involving inventi on patent application, 20 cases involving utility 
patent application and 40 cases involving desi gn patent application.  The PRB has accepted 
56,903 review request cases and concluded 44,230 cases from the implementation of Chinese Patent 
Law in 1985 to the end of 2011.   (2) Cases concerning requests for invalidation.  In 2011, the PRB accepted 2,749 requests for 
invalidation, including 566 cases involving invention patent right, 1,323 requests involving utility 
patent right and 860 requests involving design patent right.  In 2011, the PRB concluded  WT/TPR/M/264/Add.1 
 Page 393 
 
 
  2,567 requests for invalidation, including 555 request s involving invention patent right, 1,245 requests 
involving utility patent right and 767 requests involving design patent right.  The PRB has accepted 28,494 requests for invalidation and concluded 26,231 requests from the implementation of Chinese 
Patent Law in 1985 to the end of 2011.  
 (3) Administrative patent lawsuits.  In 2011,  Beijing Number 1 Intermediate Court accepted 
128 administrative cases against the review de cisions of the PRB and 487 cases against the 
invalidation decisions of the PRB.  Up till now, Ch ina has not collected statistics of review and 
invalidation cases where the invention involved is a service or non-service invention, or where a party 
is a foreigner or Chinese.  
62. WT/TPR/S/264-04, page 92, paragraph 304 :  Paragraph 304 of Part III of the Secretariat's 
report states that the State Administration for I ndustry and Commerce (SAIC) announced in July 2011 
that trademarks that have not been used for three consecutive years will be revoked.  Will the SAIC 
cancel the trademark registration if evidence of use is  not submitted, or must a third party bring an 
action before the SAIC?  
 
Answer: According to the Trademark Law and its implementation regulations, where a registered 
trademark is not in use for three consecutive years,  any person may apply to the Trademark Office for 
cancelling the said registered trademark and expl ain circumstances.  The Trademark Office shall 
notify the trademark registrant and require him to fu rnish, within two months from the date of receipt 
of the notification, proof of use of the trademark be fore the date on which the cancellation application 
is filed, or a justifiable reason for its non-use.  If no proof of use is furnished at the expiration of the 
period or the proof provided is invalid without a ju stifiable reason, the Trademark Office shall cancel 
the registered trademark. 
 
63. WT/TPR/S/264-04, page 93, paragraph 306 :  Paragraph 306 of Part III of the Secretariat's 
report indicates that the operator of an internet trading platform must take necessary actions against 
trademark infringement, and is liable for any damage caused by misuse of the platform.  Please 
clarify what actions are required to be taken by online service providers (OSPs), and whether OSPs 
are subject to a constructive knowledge standard.   
 
Answer:  According to Article 23 of the Interim Measures for the Trading of Commodities and 
Services through the Internet, the operators of Inte rnet trading platform services should establish an 
inspection and supervision system for providers of  goods or services through online trading platforms 
as well as goods and service information published by  such providers, and should report any goods or 
service provider violating laws, regulations and ru les on industrial and commercial administration to 
local industrial and commercial authorities, timely adopt measures to stop the violation, and suspend 
providing online trading platform services to such goods  or service provider.  According to Article 24 
of the abovementioned Interim Measures, the operators  of Internet trading platform services should 
adopt necessary measures to protect the right of ex clusive use of registered trademarks and take 
necessary measures in acco rdance with the Tort Liability Law wh ere the right owner has evidences to 
prove that his right of exclusive use of a registered trademark is infringed upon by an operator in the Internet trading platform.  
64. WT/TPR/S/264-04, page 93, paragraph 310 :  Paragraph 310 of Part III of the Secretariat's 
report states that geographical indicators (GIs) registered with AQSIQ and the Ministry of 
Agriculture are protected permanently.  Is it possibl e for a third party to file a cancellation claim 
against these GIs, and if so, on what grounds? 
 
Answer:  According to Article 21 of the Measures for the Administration of Geographical Indications 
of Agricultural Products, China encourages organizati ons and individuals to ma ke social supervision 
on GIs of agricultural products, a third party may proceed against a registered GI of agricultural WT/TPR/M/264/Add.1 
Page 394 
 
 
  products and cancel the GI in accordance with Ar ticle 18 of the Measures, which provides Where a 
registered GI of agricultural products or a holder of certificate of registration doesnt meet provisions 
specified in the Articles 7 and 8 of the Measures, the Ministry of Agriculture shall cancel the 
certificate of the GI registration and make a public announcement of such a cancellation. 
 
65. WT/TPR/S/264-04, page 93, paragraphs 308-311 :  Paragraphs 308-311 of Part III of the 
Secretariat's report describe the th ree different systems used to prot ect GIs in China, and paragraph 
311 states that it is unclear whether there is any coordination mechanism when it comes to 
enforcement.  The United States understands that Ch ina is contemplating revising these three systems 
in order to achieve better coordination among th em.  Please identify Chin a's timeline for these 
revisions, and explain whether China will seek public comment on its proposed revisions.  
 
Answer:  Currently, agricultural authorities, indus trial and commercial authorities and quality 
supervision authorities jointly protect GIs in China in accordance with relevant laws and regulations 
as well as functional division.  In order to furt her improve the GI protection and administration 
mechanism and system, China will fo rmulate special laws and regulations on GI protection.  The 
Ministry of Agriculture, MOFCOM, SAIC and AQ SIQ will, based on existing functional divisions, 
collaborate to integrate business procedures and unify relevant policy standards for GI protection in 
China.  To advance this work, SAIC will wo rk with relevant authorities to establish an 
inter-ministerial joint coordinati on mechanism for GI protection.  
 
66. WT/TPR/S/264-04, page 93, paragraph 313 :  Paragraph 313 of Part III of the Secretariat's 
report addresses in general terms the protection grante d by China's Copyright Law.  Please provide 
information on the scope of protection for applie d art in China under the Copyright Law and its 
implementing regulations, and describe any diff erences in protection affo rded to Chinese entities 
versus foreign entities.  Please also identify any civi l, administrative or criminal cases involving the 
protection of applied art in 2010 and 2011.  
Answer:  The applied arts of foreign entities are protect ed in China according to the Regulations for 
the Implementation of International Copyright Trea ties.  The current Copyright Law does not specify 
the protection of applied arts. 
 
67. WT/TPR/S/264-04, page 93, paragraph 313 :  Paragraph 313 of Part III of the Secretariat's 
report addresses in general terms the protection grante d by China's Copyright Law.  Please explain 
the scope of protection for spor ts broadcasting under the Copyright Law as well as under related 
laws, such as the Anti-Unfair Competition Law. 
 
Answer : Sports event is not an object of copyright in the current international copyright treaties.  The 
Chinese Copyright Law and Anti-Unfair Competition Law do not have specific provisions on sports 
broadcasting.  However, a sports broadcasting pr ogram may be protected by Copyright Law if it 
constitutes a work under the Copyright Law. 
 
68. WT/TPR/S/264-04, page 93, paragraph 313 :  Paragraph 313 of Part III of the Secretariat's 
report addresses in general terms the protection grante d by China's Copyright Law.  Please explain 
the scope of protection afforded to graphical u ser interfaces (or GUIs) under China's Copyright Law, 
Anti-Unfair Competition Law, Patent Law (to the ext ent that its provisions afford protection for 
designs) or any other Chinese laws.  Have any cas es been brought under any of these laws?  If so, 
please provide information regarding the number and type of cases, the parties involved and the 
disposition of the cases.   
Answer:  At present, China's Copyright Law, Regulati ons on the Protection of Computer Software 
and Anti-Unfair Competition Law have not stipulat ed specific provisions on GUIs.  Paragraph 3 under 
the Article 2 of the Patent Law provides protecti on of appearance designs.  However, according to  WT/TPR/M/264/Add.1 
 Page 395 
 
 
  Section 7.4, Chapter 3, Part 1 of the Patent Revi ew Guidance, design patent will not be granted to 
graphic patterns shown after a product is powered on, including patterns shown on the dial of an 
electronic watch, patterns shown on the mobile phone screen and software interfaces.  Therefore, the 
mentioned graphic designs are not an object of a ppearance design protection under the Patent Law.  A 
GUI may enjoy copyright protection if it c onstitutes a work under the Copyright Law. 
 
69. WT/TPR/S/264-04, page 95, paragraph 322 :  In paragraph 322 and Table III.12 of Part III, 
the Secretariat's report addresses administrative and judicial IPR enforcement.  For 2010 and 2011, 
please provide the following data:  
a. The numbers of civil trade secret cases under Ar ticle 10 of the Anti-Unfair Competition Law, 
the percentage of these cases in which a foreign er was a plaintiff or defendant, the location of 
the courts that heard the most trade secret cases, and the numbers of appeals;   
 
Answer: In 2011, Chinese courts accepted 247 trade se cret cases and concluded 223 cases in which 
4 cases involved foreign elements.  Courts in Gu angdong Province and Jiangsu Province accepted the 
most trade secret cases in 2011, i.e.  36 trade secret cases each.  No appeal statistic is available at 
present. 
 
b. The number of administrative trade secret cases under Article 10 of the Anti-Unfair 
Competition Law, the percentage of these ca ses in which a foreigner was a plaintiff or 
defendant, the location of the agencies that heard the most trade secret cases;  and  
 
Answer : In 2011, Chinese administrations for industry and commerce investigated and concluded 
109 trade secret cases, in which one case involved a foreign-funded enterprise as infringer.  No 
statistic of trade secret cases by location is available at present. 
 
c. The number of criminal trade secret cases under Article 219 of the Criminal Law investigated 
by the Ministry of Public Security, the number of prosecutions brought by the Procuratorate, 
the numbers of cases decided by the courts , and the number of convictions;  and   
 Answer: In 2011, Chinese courts accepted 50 new crimin al cases involving trade secret, concluded 
49 cases and convicted 63 criminals.  
d. The amounts of administrative fines and crimi nal penalties imposed for cases involving 
unauthorized disclosures of undisclosed inform ation and trade secrets of foreign parties by 
province for enforcements undert aken under the Anti-Unfair Competition Law, the Criminal 
Law or their implementing regulations.  
 
Answer: With regard to administrative fines, in 2011,  industry and commerce authorities at all levels 
imposed fines of RMB 2.03 million for cases of infri ngements upon trade secrets.  Up till now, China 
has not collected relevant statistics for cases where a right owner is a foreigner party.  
 With regard to criminal fines,  China has not collected specific statistics on the amounts of fines. 
According Article 4 of the Interpretations of th e Supreme Peoples Court and the Supreme People's 
Procuratorate for Several Issues Concerning the Sp ecific Applicable Laws on Handling Criminal 
Cases of Infringement upon Intellectual Propert y Rights (Fa Shi [2007] No. 6), the amounts of 
criminal fines are generally decided based on 1-5 times of the illegal incomes or 50%-100% of the 
amounts involved in illegal operations.  
70. WT/TPR/S/264-04, page 95, paragraph 322 :  Paragraph 322 of Part III of the Secretariat's 
report addresses judicial IPR enforcement.  The United States understands that China has been 
considering various reforms in the pre-trial exc hange of information and punitive damages in civil WT/TPR/M/264/Add.1 
Page 396 
 
 
  IPR infringement cases.  Please provide an update on these and other developments that could affect 
the conduct of IPR-related trials.   
Answer : Several Provisions on the Evidence for Civ il Actions promulgate d by Supreme People's 
Court in 2001 made specific provisions on pre-tria l exchange of evidence, which are applied well in 
the trial of IPR cases, especially the first in stance cases. Punitive damage, pre-trial evidence 
preservation and pre-trial injunction have been discussed during the amendment process of Civil 
Procedural Law and Trademark Law.  The result of  relevant reforms depends  on the promulgation of 
future amendments. 
 
71. WT/TPR/S/264-04, page 95, paragraph 322 :  With regard to judicial IPR enforcement, 
which the Secretariat's report addresses in paragraph 3 22 of Part III, the United States notes that 
Article 42 of the TRIPS Agreement permits parties to be represented by independent legal counsel in 
civil and administrative proceedings.  Please explain what provisions of Chinese law establish what 
constitutes an independent legal counsel, as that t erm is used in the TRIPS Agreement and in China's 
WTO accession protocol commitments.  Similarly, what are the professional obligations of lawyers appearing before courts and administrative agenci es that require them to preserve confidences as 
required by the TRIPS Agreement?  
 
Answer: Independent legal counsel is not a term in Chin a's relevant laws and regulations as well as 
its Protocol on WTO Accession.  According to Artic le 38 of the Law of the People's Republic of 
China on Lawyers, lawyers shall keep national secr ets and business secrets they learn during their 
practice activities and shall not disclose the privacy of  the parties.  Lawyers shall keep secret the 
situations and information that they learn during th eir practice activities and that the client and others 
do not want to disclose, except for the facts and in formation concerning the c lient or others who are 
preparing to commit or are committing crimes that  endanger national security and public security or 
seriously damage the personal or property safety of others.  
72. WT/TPR/S/264-04, page 95, paragraph 322 :  In 2010 and 2011, were there any civil or 
administrative cases brought in China involving obli gations arising under Article 39.3 of the TRIPS 
Agreement relating to data exclusivity, including cases that may have been brought against SFDA, 
MOA, the State Forestry Administration or other age ncies or against an enterprise that allegedly 
misappropriated clinical data?  If so, please prov ide information regarding the number and type of 
cases, the parties involved and the disposition of the cases. 
 
Answer:  No such case has been filed yet. 
 
IV. TRADE POLICIES BY SECTOR      
(1) AGRICULTURE      (ii)  Agriculture policies      
  
73. WT/TPR/S/264-05, page 102, paragraph 10 :  Paragraph 10 of Part IV of the Secretariat's 
report states that China aims to increase gr ain production by, among other things, increasing 
payments to grain producing areas.  It also states that other measures set out in the plan include 
increased minimum purchase prices for key grains , and improving temporary purchase and storage of 
bulk agricultural commodities.  These types of meas ures generally appear to be amber box programs.  
How does China plan on ensuring that payments made  pursuant to these measures are consistent with 
its domestic support obligations un der the Agreement on Agriculture?      
 
Answer:  Since its accession to the WTO, China has been earnestly fulfilling its commitments.  
China's agricultural domestic support measures are taken in line with WTO commitments. 
  WT/TPR/M/264/Add.1 
 Page 397 
 
 
  74. WT/TPR/S/264-05, page 103, paragraph 19 :  Paragraph 19 of Part IV of the Secretariat's 
report discusses tariff-rate quotas and explains that in-quota imports for rice, wheat, and maize have 
been low compared to the quota quantity.  It adds  that, according to the Chinese Government, the low 
level of imports relative to the size of the tariff quota was due to high levels of domestic production 
coupled with high international prices. 
 
a. With rising domestic maize prices, and more comp etitive international corn prices, will China 
re-evaluate its tariff-rate quota for maize?   
 
Answer:  Since the accession of WTO, China has been  working in accordance with the commitment 
to develop and improve the Foreign Trade Law of Peoples Republic of China, People's Republic of 
China Import and Export Goods Re gulations and Interim Measures on the Import Tariff Quotas of 
Agricultural Products.  Such policies are open and tr ansparent.  Working strictly in accordance with 
its WTO commitments and the relevant laws and regulations, the Chinese government implemented 
import and export management, notifying the WTO of state trading enterprises in time, while at the 
same time requiring enterprises compliance with relevant laws and regul ations to carry out 
commercial activities.  In reality, the implementati on of relevant laws and regulations has brought 
about good effect. China has yet to consider ad justing the corn import management policies. 
 b. It is the United States understanding that the grains quotas designated for private entities 
have been filling, while those designated for State Trading Enterprises (STEs) have not.  
Please explain how high levels of domestic production coupled with high international prices have impacted the fill levels of quotas designated for STEs but did not similarly affect those designated for private entities.  
 
Answer: Since the accession of WTO, China has been  working in accordance with the commitment 
to develop and improve the Foreign Trade Law of People's Republic of China, People's Republic of 
China Import and Export Goods Re gulations and Interim Measures on the Import Tariff Quotas of 
Agricultural Products.  Such policies are open and tr ansparent.  Working strictly in accordance with 
its WTO commitments and the relevant laws and regulations, the Chinese government implemented 
import and export management, notifying the WTO of state trading enterprises in time, while at the 
same time requiring enterprises compliance with relevant laws and regul ations to carry out 
commercial activities.  In reality, the implementati on of relevant laws and regulations has brought 
about good effect.  According to Article 52 of the Peoples Republic of China Goods Import and 
Export Ordinance, state trading enterprises and trading enterprises engaged in business activities 
should act on normal commercial terms, may not be the choice of suppliers of non-commercial 
factors, and may not refuse commissions from othe r enterprises or organizations for non-commercial 
reasons.  
c. How is China ensuring transparency in the allo cation and utilization of  quotas reserved for 
STEs? 
 Answer: According to the accession commitments, the Chinese government issued the Measures for 
the Administration of Import Tariff Rate Quotas of  Agriculture Products in 2003, which embodied the 
unified, fair, impartial, transparent, predic table and non-discriminatory principles for quota 
administration.  TRQs are allocated in strict acco rdance with the above mentioned rule, and there are 
no differences on TRQ eligibility criteria, allocati on and adjustment administration between state 
trading enterprises and non-state trading enterprises. 
 
75. WT/TPR/S/264-05, page 104, paragraph 20 :  Paragraph 20 of Part IV of the Secretariat's 
report states that, based on China's notifications to the Committee on Agriculture, China does not 
provide export subsidies for agr icultural products.  The United States understands that China 
maintains export bases for agricultural products.  Pl ease identify the measu res providing for these WT/TPR/M/264/Add.1 
Page 398 
 
 
  export bases, describe the support provided to produ cers of agricultural products in connection with 
these export bases over the past 3 years, and explain th is support in light of China's obligations under 
Article 3 of the SCM Agreement.  
 
Answer: According to verified information, we didn 't provide fix-assets support to development of 
argo-production export bases in past 3 years.  
76. WT/TPR/S/264-05, page 104, paragraph 23 :  Paragraph 23 of Part IV of the Secretariat's 
report states that China provides direct payment s to agricultural producers and, according to a 
notification that China made to the Committee on Agriculture, payments are based on area and are 
decoupled from production and prices.  However, th e areas that receive these payments and the level 
of subsidy are decided by local government authorities.  In addition, recent Organization for 
Economic Cooperation and Development reports referen ced in paragraphs 41-46 of Part IV of the 
Secretariat's report and other sources indicate that some provinces make direct payments according 
to current production or current area planted.  
a. Please explain how direct payments are administ ered in the various eligible provinces to 
ensure that the payments are truly decoupled.  Could China also provide data on total direct 
payments on a province-by-province basis?          
 
Answer:  we are in the process of verifying the nature and accuracy of OECD statistics abbreviation 
facilitation from WTO and OECD members are welcome.  
b. Please explain how subsidy levels are determin ed, given that the Secretariat Report states 
that the levels differ by province. 
 Answer: Approved by the state council, China's direct subsidies to grain farmers and comprehensive 
agricultural subsidies payment methods are determin ed by provincial authorities.  Currently the 
payments are decided according to areas.  Specifically  there are measures in accordance with tax area, 
the actual area that grows grain, the second contr acted area and so on.  When it comes to the 
differences on the level of subsidy standards, the central government will grant certain advantages to 
main areas of food production when determining the scale of grain subsidies.  
77. WT/TPR/S/264-05, page 105, paragraph 25 :  Paragraph 25 of Part IV of the Secretariat's 
report states that the Comprehensive Subsidy on  Agricultural Inputs is not contingent upon 
consumption of inputs and is made on the basis of taxable arable area.  Please explain further how 
this subsidy is disbursed, including how taxable arabl e area is determined.  Please also provide data 
on taxable arable area on a province-by-province basis.  
Answer: Approved by the state council, China's direct subsidies to grain farmers and comprehensive 
agricultural subsidies payment methods are determin ed by provincial authorities.  Currently the 
payments are decided according to areas.  Specifically  there are measures in accordance with tax area, 
the actual area that grows grain, the second contracted area and so on.  
78. WT/TPR/S/264-05, page 105, paragraph 26 :  Paragraph 26 of Part IV of the Secretariat's 
report states that the New Variety Extension Paymen t Scheme uses subsidy rates that vary depending 
on the crop and that various livestock are covered by  this program.  Under th is program, how is the 
subsidy level determined?  Is there a limit on the number of acres planted or the number of animals 
that can receive the subsidies?  Is the s ubsidy for livestock paid on a per head basis?      
 
Answer: In the domestic support notification submitted by  China, subsidies for using superior seed 
varieties including rice, corn, etc., are notifie d as amber box support under product-specific.  The 
amount of subsidy per mu is 10-15 RMB.  WT/TPR/M/264/Add.1 
 Page 399 
 
 
   
Subsidies for using superior livestock varieties is  the money set up to promote superior livestock 
varieties, to encourage farmers to use frozen semen of superior livestock varieties in order to improve 
varieties.  It belongs to the payment for promoti on of agricultural technology of the green box, not the 
amber box support, according to which payment is in accordance with animal numbers. 
 
79. WT/TPR/S/264-05, page 105, paragraph 29 :  Paragraph 29 of Part IV of the Secretariat's 
report states that fertilizer exports are subject to export taxes, which stood at 75% in October 2011.  
Given the sweeping nature of the panel and Appellate Body findings on export duties in China Raw 
Materials, please explain China's plans regarding el imination of the export taxes on fertilizer exports.   
 
Answer : According to the practices WTO has in dispute settlement, the rulings made by the Panel and 
Appealing Body only applies to 9 products incl uding coke.  China will take measures conforms to 
WTOs discipline in regard of export admi nistration on products beyond the 9 products. 
 
80. WT/TPR/S/264-05, page 106, paragraph 31 :  Paragraph 31 of Part IV of the Secretariat's 
report states that China has a number of progr ams that support domestic prices and specifically 
mentions minimum purchase prices for rice and whea t.  Please identify all of the programs that 
support domestic prices.  Can China confirm that  all commodities under these programs, with the 
exception of rice and wheat, are bought and sold only at market prices?  
 
Answer: China's prices of agricultural products have been fully liberalized by the market.  In order to 
prevent excessive price decrease and to protect the interests of farmers, China implements the policy 
of the minimum grain purchase to two major varieti es, namely rice and wheat, in the main producing 
areas.  In addition, the purchase price for suga r cane in main producing areas is determined by 
provincial governments based on the actual situation. 
 Under normal circumstances, farmers independently sell their food, following the market, whether it 
is rice, wheat, sugar cane or other agricultural pr oducts.  When actual selling prices for rice, wheat 
and sugar cane in main producing areas fell consider ately and even lower than the minimum purchase 
price, farmers could sell food, at the minimum purchase price, to the government-designated 
companies, avoiding reducing losses brought about by food prices fell.  
81. WT/TPR/S/264-05, page 106, paragraph 31-34 :  According to paragraphs 31-34 of the 
Secretariat's report, China uses va rious instruments, including minimum purchase prices, government 
stock purchases, stock releases and restrictive auctions , to control domestic prices for grains, sugar, 
cotton and oilseeds.  All of these instruments appe ar to constitute market price support within the 
meaning of the Agreement on Agriculture.  Please exp lain the impact of these instruments on domestic 
commodity prices.  Please also  explain why China has not notified to the Committee on Agriculture 
the instruments controlling domestic prices for co tton, oilseeds, sugar and other grains as market 
price support when they appear to operate in a ma nner similar to and have objectives that are similar 
to the instruments controlling domestic prices for rice and wheat, which have been notified.  
 
Answer: W e have notified those above mentioned meas ures in our 2005-2008 notification last  
October 2011. 
 
82.  WT/TPR/S/264-05, page 107, paragraph 38:  The United States notes that China only 
recently and belatedly provided required notifications  of agriculture support through 2008.  When 
does China expect to provide no tifications for more recent years?  
 
Answer: We have notified to WTO agricultural domestic  support data up to 2008.  We are making 
careful preparations on agricultural domestic support data after 2008, which will be actively informed 
after the relevant data summary is completed. WT/TPR/M/264/Add.1 
Page 400 
 
 
   
83. WT/TPR/S/264-05, page 109, paragraph 44 :  There were recent press reports indicating that 
China has increased its supports considerably fo r the cotton sector subsequent to 2008, and it 
appears that some of this information is captured  in Table IV.7. on page 110 of the Secretariat's 
report.  Could China identify what programs are in volved and the level of support granted under each 
of the programs?  
Answer: To protect cotton supply and reduce market volatility, China has set up a national reserve 
system of cotton which organizes purchasing and storage in order to achieve the goal of market 
regulation.  The specific amount of the tempor ary cotton purchasing and storage policies will be 
decided according to the storage amount and price of that year.  Relevant cotton reserve costs 
subsidies have been informed in the cotton product-specific amber box support. 
 
IV. TRADE POLICIES BY SECTOR     
(1) FISHERIES       
(ii)  Fisheries policy      
 
84. WT/TPR/S/264-05, page 113, paragraph 58 :  Paragraph 58 of Part IV of the Secretariat's 
report states that, according to one report on Chine se Government financial support to the fisheries 
sector, the total value of support by the State to fis hing was estimated to be US$4.1 billion in 2003, of 
which US$2.2 billion was for vessel construction, fu el infrastructure, and ot her supports to fishing 
activities, with fuel accounting for US$1.8 billion.  Please provide informa tion about each subsidy 
program benefiting the fisheries sector, including a detailed description of the program, the policy 
objectives of the program, the amount budgeted for the program, the form of the subsidies provided 
pursuant to the program, the criteria for eligibility  for the subsidies and the amounts disbursed to 
subsidy recipients pursuant to the program.       
 
Answer: China attaches great importance to the principl e of transparency and has made our best 
efforts in fulfilling transparency obligation.  Nowadays, members are conducting negotiations to 
strength the fisheries subsidies disciplines, including the notification regulation.  China is willing to 
provide relevant information once such  disciplines agreed upon by members. 
 
IV.  TRADE POLICIES BY SECTOR      
(3)  ENERGY      (ii)  Electric utilities      
 
85. WT/TPR/S/264-05, page 114, paragraph 65 :  Paragraph 65 of Part IV of the Secretariat's 
report explains that China is encouraging investment  in the renewable energy sector.  It cites the 
Catalogue for the Guidance of Foreign Investment I ndustries, but does not seem to address many of 
the other industrial policy measures put in pla ce to encourage the development of the renewable 
energy sector.  For example, Chin a's Twelfth Five-Year Plan for th e Solar Photovoltaic Industry 
explains as follows:  China has su ccessively introduced policies such as  the Interim Measures for the 
Administration of Financial Subsidies for Application of Solar Building-Integrated Photovoltaics and 
the Notice on Implementing the Golden Sun Demonstr ation Project, both of which appear to provide 
subsidies to the solar industry; support will be prov ided to major enterpris es in the solar sector to 
grow stronger;  policies in the areas of industry,  taxation, and finance will be developed to promote 
the development of China's photovoltaic industry; the expansion of the photovoltaic market will be 
achieved through reasonable tariffs, moderate fi nancial subsidies, and ac tive financial support.  
Please provide detailed information on how China has implemented the above-cited and above-
described support measures.  Please also provide de tailed information on the support measures that 
China has implemented pursuant to the Special  Twelfth Five-Year Plan for the Science and 
Technology Development of Solar Power Generation.  
  WT/TPR/M/264/Add.1 
 Page 401 
 
 
  Answer:  The Chinese Government attaches great importance to addressing climate change, and is 
committed to taking feasible measures to reduce greenhouse gas emissions.  The application of solar energy photovoltaic power generation in buildings is  an important path to reduce the application of 
fossil energy to buildings.  In accordance with th e Twelfth Five-Year Plan for the Science and 
Technology Development of Solar Po wer Generation, China will offer certain funds for the research 
and development of fundamental science, advanced technologies a nd generic technologies in solar 
energy generation domain.  The contents supported are precompetitive technologies, and such support 
is a measure generally adopted by countries across the world and is consiste nt with international 
practice.  Our policies and measures to encourage solar power generation are aimed at application 
market rather than photovoltaic cell manufacturing enterprises.  This is a prevailing international 
practice. 
 
IV.  TRADE POLICIES BY SECTOR      (4)  MANUFACTURING      
(ii)  Selected subsectors       
86. WT/TPR/S/264-05, page 116, paragraph 73 :  Paragraph 73 of Part IV of the Secretariat's 
report notes that a number of funding programm es and funds have been established since 2011 for 
seven strategic emerging industries in China.  The United States understands that aerospace and the 
development of commercial civil aircraft are includ ed in the high-end equipment manufacturing 
industry, which is one of the seven emerging indus tries.  Please describe the funding programmes and 
funds that have been established since 2011 for the development of commercial civil aircraft.  Please 
also describe any other funding programmes and funds  that have been established since 2011 for the 
high-end equipment manufacturing industry as we ll as the funding programmes and funds that have 
been established since 2011 for th e six other emerging industries.   
 Answer: No funding projects and funds has been specially set up for commercial civil aircrafts. In 
recent years, to promote energy saving and envir onmental protection, such seven emerging industries 
as new generation information technology, biot echnology, new energy and new materials have 
become a commonly accepted strategy, and countri es successively take measures to accelerate the 
development of emerging industries.  By refere nce to these countries experience and practices, the 
Chinese Government issued the Decision on Speeding up the Cultivation and Development of Strategic Emerging Industries in 2010, and set up special-purpose funds for the development of 
strategic emerging industries in 2011, and has adopte d such means as equity participation and venture 
fund, high-end equipment research and developm ent subsidiaries, implementing key application 
demonstration projects and key innovative developmen t projects to break key core technology in the 
initial period of industrial deve lopment, cultivate new business type market, and put focus on 
supporting the research and development of te chnologies and products as well as achievement 
transformation in new generation information technol ogy, biology and new materials domains.  Such 
support is universal, and targets at various types of enterprises.  87. WT/TPR/S/264-05, page 119, paragraph 84 :  While paragraph 84 of Part IV of the 
Secretariat's report notes the incentives provided und er the Circular on Certain Policies for Further 
Encouragement to Development of Software Industry and Integrated Circuit Industry, issued by the 
State Council on 28 January 2011, it does not address any incentives provided by sub-central government authorities, which appear to have pla yed an active role in the development of the 
integrated circuit industry in China.  For example, the 2011 Annual Report for Semiconductor 
Manufacturing International Corporation (at page 107) states that [c]ertain local governments provided subsidies to encourage the Company to participate and manage new plants related to the 
integrated circuit industry.  In 2011, 2010 and 2009 the Company received local government 
subsidies of $2.0 million, $26.9 million and $54.1 milli on, respectively.  Given that China has never 
notified any subsidies provided by sub-central  government authorities in its 10 years of WTO WT/TPR/M/264/Add.1 
Page 402 
 
 
  membership, please describe in deta il the various subsidies provided by sub-central governments to 
the integrated circuit industry.  
 
Answer: To propel the development of integrated circuit industry, China issued the Circular on 
Certain Policies for Further Encouragement to De velopment of Software Industry and Integrated 
Circuit Industry, and the clauses of such policy do not conflict with WTO rules.  Besides from tax 
preferences pursuant to relevant legal provisions, cu rrently, China does not have special subsidiary for 
integrated circuit industry.  It is known that, th e subsidies provided by local governments mentioned 
in the annual report for Semiconductor Manufacturing International Corporation are actually factory 
building project funds, and the property rights of assets formed are owned by local governments.  
88. WT/TPR/S/264-05, page 120, paragraphs 90-91:  The Secretariat's report states that China 
set certain steel capacity elimination goals in 2009 and met them in 2010.  Meanwhile, according to 
OECD data, China's total steelmaking capacity in creased from 665 million metric tons in 2008 to 
815 million metric tons in 2011, a net increase of over 20%.  The increase in Chinese steelmaking 
capacity from 2009 to 2011 was roughly equivalent  to the total steelmaking capacity in North 
America during the same period.  Moreover, China' s steelmaking capacity has continued to grow, and 
steel production in China has hit record levels in th e first quarter of 2012, despite clear indications 
that demand for steel in China has stagnated.  Plea se explain the goals of Chin a's efforts to eliminate 
certain steel capacity and whether these efforts ha ve succeeded in increasing the market orientation 
of Chinese steel mills, controlling capacity, reduci ng total emissions from the steel sector and 
reducing energy consumption by the steel sector ?  Please also explain how China will respond to 
declining demand for steel in the construction, manufacturing and other sectors.     
 
Answer: The implementation of outdated capacity elimination is for the purpose of propelling energy 
saving and emission reduction, accelerating steel indus try restructuring, promoting industry upgrade 
and moderating the contradiction of excess steel  capacity.  Since the launching of the 11
th five-year 
plan, China has totally eliminated 123 million tons of  outdated iron capacity and 72.24 million tons of 
outdated steel capacity, which greatly drives energy saving and emission reduction.  In 2010, various 
energy saving and emission reduction indicators of  key steel enterprises in China were fully 
improved, and the overall energy consumption, fresh water consumption and sulfur dioxide discharge 
per ton of steel respectively dropped 12.8%, 52.3% and 42.4%.   During the period from January to April of this year , the market demand for steel in the construction, 
manufacturing and other downstream sectors declines, impacted by the slowing down economic 
growth in China and the world.  To guide the h ealthy development of the sectors, we will enhance 
upstream & downstream cooperation to guide downstr eam industry consumpti on, vigorously advance 
reduced steel rolling, meet the development re quirements of downstream industries for high 
strengthening and light weight steels, a nd expand the application of steel market. 
 
IV.  TRADE POLICIES BY SECTOR      
(5)  SERVICES       
(i) Overview      
 
89. WT/TPR/S/264-05, page 121, paragraph 95 :  Paragraph 95 of Part IV of the Secretariat's 
report explains that, [a]ccording to the authorities,  China's general policy is of gradual, progressive, 
and managed opening, with a view to promoting development through a win-win strategy for both 
domestic and foreign services suppliers.  Could Ch ina explain its plans for opening particular 
services sectors pursuant to this po licy over the next two years? 
 
Answer : China always attaches great importance to the development of services industry and takes a 
positive position on the liberalization of trade in services.  On 24 December 2011, the Chinese 
government issued the revised Catalogue for Gu idance of Foreign Investment, which has been  WT/TPR/M/264/Add.1 
 Page 403 
 
 
  implemented since 30 January 2012.  This revised Catalogue for Guidance of Foreign Investment 
aims to enlarge the opening-up in services sectors, an d encourages foreign enterprises to invest in the 
modern services industry.  For example, it has m oved the foreign-invested medical institutions and 
financial leasing companies into the permitted category from the restricted category.  China 
recognizes that the progressive liberalization of trade in services among WTO Members would promote the development of international trade in services.  We hope that the DDA negotiations will 
reach a successful conclusion soon. 
 
IV.  TRADE POLICIES BY SECTOR      
(5)  SERVICES       (i) Financial services      
 
90. WT/TPR/S/264-05, page 122, paragraph 99 :  Paragraph 99 of Part IV of the Secretariat's 
report explains that, [a]ccording to the authorities, lending decisions by SOCBs are based entirely on 
commercial consideration.  However, the United St ates notes that, in paragraph 101 of Part IV, the 
Secretariat's report further explains:  The authoriti es maintain that the five largest SOCBs did not 
transfer any [non-performing loans (NPLs)] to asset  management companies in 2009 and/or 2010.  At 
end 2010, the five largest SOCBs had total NPLs of 3 12.52 billion, and their NPL ratio was 1.3.  The 
rapid accumulation of debts of local governments in recent years, together with loose credits to 
infrastructure through the 2009 stimulate package, raised  concerns of another surge of NPLs.  Please 
explain why there are concerns about China's SOCBs accumulating larg e amounts of NPLs if they are 
basing their lending decisions entirely on commercial considerations.  
 
Answer: According to Commercial Bank Law of Peoples Republic of China, a commercial bank 
operates independently takes up responsibility for a ll risks it may encounter and responsible for its 
own profits and losses it may bear and exercises self-regulation on the principle of economic 
efficiency safety and liquidity.  A commercial ba nk shall conduct its business in accordance with the 
law free from interference by any department or indi vidual.  No organization or individual may force 
a commercial bank to extend a loan or provide guar antee for a loan.  A commercial bank shall have 
the right to refuse any organization's or individual's demand for a loan or guarantee.  To sum up, 
lending decisions by State owned Commercial Banks are based entirely on commercial consideration.  
 As for the closely attention paid by the regul atory authorities to potential non-performing loans 
(NPLs) is concerned, its merely for the need of pr udential regulation, which is essential to assure the 
stable and sustainable development of financial system. 
 
91. WT/TPR/S/264-05, page 122, paragraph 98 :  Please provide more detail regarding recent 
policies that encourage more private investment in city commercial banks and rural commercial 
banks.  Do those policies also encourage foreign investment as part of such private investment? 
 
Answer: To encourage and guide the private capital to enter into the banking sector, the CBRC 
recently promulgated the Implementation Opinions on Encouraging and Guiding the Private Capital 
to Enter into the Banking Sector (hereina fter referred to as the Opinions).  
 The Opinions stipulate that the private capital s hould abide by the same ac cess requirements as other 
categories of capital when entering into the banking  sector.  For those private enterprises that are 
conforming to the banking administrative licensing rules, with complete corporate governance 
structure, fine social reputation, creditwor thiness and tax paying record, strong operation and 
management ability and fina ncial status, true and legitimate stake capital resources, their investment 
in banking sector are welcome.  The Opinions underline that favorable environment should be created for private capital entering into 
the banking sector.  Banking regulatory authorities at a ll levels should encourage investors to invest in WT/TPR/M/264/Add.1 
Page 404 
 
 
  banking sector;  no restrictive or auxiliary requirements should be imposed specially on private capital 
in its entrance.  
Regarding the relevant policies on the opening up of banking sector to foreign capital, please refer to 
Regulations of the People's Republic of China on  Administration of Foreign-funded Banks and its 
implementing rule, Administration of Equity Inv estment of Overseas Financial Institutions in 
Chinese-funded Financial Institutions Procedures.  92. WT/TPR/S/264-05, page 128, paragraph 121 :  What in practice does it mean to regulate as 
foreign-funded institutions, and how does it differ from being regulated as a Chinese financial 
institution?  In how many instances have the level s of foreign investment in a non-listed Chinese bank 
exceeded the 20% or 25% thresholds so that a Ch inese bank is regulated as a foreign-funded bank?  
In how many circumstances have the levels of foreign investment in a listed Chinese bank exceeded 
the 20% or 25% thresholds?  If there are no instances of such investment, do the 20% and 25% 
thresholds serve as de facto limits on foreign in vestment in Chinese banks?  Do Chinese authorities 
permit foreign banks to surpass the 20% or 25% thr esholds so that a Chinese bank becomes regulated 
as a foreign-funded bank?  Please explain.   
 
Answer:  Regulate as foreign-funded institutions, means the institutions in question shall be regulated 
as foreign banks, and its registrati ons and regulations thereafter w ill be subject to foreign banks 
related regulations, such as Regulations of the People's Republic of China on Administration of 
Foreign-funded Banks and its implementing rules.  Pursuant to the provisions of Measures on 
Administration of Equity Investment of Overseas Financial Institutions in  Chinese-funded Financial 
Institutions, the percentage of equity investment of a single overseas financial institution in a Chinese-
funded financial institution may not exceed 20%, for th is reason, the foreign investment in a listed 
Chinese bank cant exceeded the 20% or 25% thresholds.   
 According to China's Services Schedule, qualified foreign financial institu tions are allowed to 
establish wholly foreign-owned banks, including subs idiaries with legal person status and branches.  
However, China did not make commitments on the ac quisition of domestic banks by foreign financial 
institutions.  Nevertheless, China has decided to allow foreign investors to acquire equities of 
domestic banks up to a certain level.  Accordi ng to the Measures on Administration of Equity 
Investment of Overseas Financial Institutions in Ch inese-funded Financial Institutions, the percentage 
of equity investment of a single overseas financia l institution in a Chinese-funded financial institution 
may not exceed 20%.  As for the requirement that if the aggregate percentage of equity investment of 
multiple overseas financial institutions in a non-lis ted Chinese-funded financial institutions reaches or 
exceeds 25%, such non-listed Chinese-funded financia l institutions shall be regulated as a foreign-
funded financial institution, it is in accordance with  Article 4 of the Law on Chinese-Foreign Equity 
Joint Ventures.  
93. WT/TPR/S/264-05, page 128, paragraph 122 :  Note 104 to paragraph 122 of Part IV of the 
Secretariat's report states:  The Law on Commercial  Banks requires commercial banks to take into 
consideration the needs of national economic and so cial development, and follow the guidance of the 
industrial policies of the State.  Please explain how China's SOCBs can base their lending decisions 
entirely on commercial considerations when they must  take into consideration the needs of national 
economic and social development and the guidance provided by the Chinese Governments industrial 
policies.  
 
Answer : Pursuant to Article 4 of Co mmercial Bank Law of People's Republic of China, a commercial 
bank operates independently takes up responsibility fo r all risks it may encounter and responsible for 
its own profits and losses it may bear and exerci ses self-regulating mechanism on the management 
principle of economic efficiency safety and liqui dity.  A commercial bank shall conduct its business 
in accordance with the law free from interference by any department or individual.  Meanwhile,  WT/TPR/M/264/Add.1 
 Page 405 
 
 
  Article 34 of the aforesaid law also stipulates that  a commercial bank should conduct its loan business 
in accordance with the need for the development of the national economy and social progress and 
under the guidance of the state industrial policy.  We  believe these two articles are not contradictory 
with each other, for the reason that the state indus trial policy mentioned in Article 34 is a general 
guideline in nature, and there is no statutory bindly obligation for the commercial banks.  The 
commercial banks can make their own decisions on lending and deposit taking based on the market 
situation.    94. WT/TPR/S/264-05, page 134, paragraph 150 :  Paragraph 150 of Part IV of the Secretariat's 
report notes that state-owned insurers dominate Chi na's insurance market.  The United States also 
understands that the foreign insurers share of China's insurance market is very small, with foreign 
life insurers at 5% and foreign non-life insurers at only 1%.  What policies does China plan to redress this suboptimal concentration in its insurance market and ensure great er solvency and opportunities 
for consumer choice?      
 
Answer: The time of foreign insurance companies partic ipation in Chinese market is short, for the 
foreign companies, we believe that the process of local market adaption and development is gradual 
process.  China has liberalized its insurance market in acco rdance with its WTO accession 
commitments, all insurance services suppliers incl uding foreign insurance companies are allowed to 
provide insurance services to the Chinese consumers, the CIRC will continue its efforts to ensure the 
level playing field in the manner of fair ness, impartiality and transparency.   
 
95.  WT/TPR/S/264-05, page 136, paragraph 161 :  Does China have any plans to review its 
current policy of limiting foreign equity sha re of a life insurance company to 50%?   
 
Answer: China will progressively take active and steady steps to further liberalize its insurance 
market. Since the equity cap of Sino-foreign joint venture life insurance companies is very sensitive issue, we have no plan to review our current policy at this stage.   
 
IV.   TRADE POLICIES BY SECTOR      
(5)    SERVICES      
(iii)    Telecommunications        
 
96. WT/TPR/S/264-05, page 138, paragraph 168 :  Several press organizations reported in 2011 
that the NDRC began an antitrust investigation of China Telecom and China Netcom.  Please provide 
an update on the status of this investigation.           
 
Answer   It is a fact that the NDRC undertook an antitr ust investigation of China Telecom and China 
Netcom in 2011.  Now this investigation is s till underway. The NDRC will make final decision 
according to the Antitrust Law.  97. WT/TPR/S/264-05, page 139, paragraph 171 :  What structural mechanisms within the 
Ministry of Industry and Information Technology (MIIT) ensure that MIITs role in industrial promotion (e.g., for TD-SCDMA) does not conflict w ith its obligation to be impartial?  How does 
China reconcile an obligation of its regulator to be impartial with a measure providing advantages 
for deploying TD-SCDMA, such as loans, more r apid approval of a standard, preferential test 
licenses, policy support, etc.?  
Answer: The Chinese government strictly complies with th e WTO principle of technical neutrality in 
the process of developing 3G market, and has not provided preferential treatment based on the 
standards or technology applied by operators.  The regulatory authority has not adopted any 
preferential measures for the deploying of TD-SCDMA .  In terms of approving industry standards, WT/TPR/M/264/Add.1 
Page 406 
 
 
  test licenses and other regulatory aspects, the regulat ory authority strictly complies with the principle 
of technical neutrality.  98. WT/TPR/S/264-05, page 140, paragraph 178 :  Paragraph 178 of Part IV of the Secretariat's 
report indicates that a draft Telecommunications La w, whose first draft dates back to July 2004, is 
still being drafted and reviewed.     
 
a. When will a draft of the Telecommunications  Law be circulated for public comment?  
 
Answer:  At present, the Legislative Affairs Office of  the State Council of China is reviewing and 
researching the relevant issues on Telecommunication Law.  There is no timeline for public comment 
solicitation on the draft. 
 
b. Does the current draft of the Telecommunica tions Law either make MIIT structurally and 
financially separate from all the telecomm unications operators and providers or move the 
regulation of this sector outside of MIIT?  
 
Answer: Yes, the current draft of the Telecommunication Law makes MIIT, which regulate this 
sector, structurally and financially independent  from all the telecommunications operators and 
providers. 
 
c. Does the current draft of the Telecommunications Law provide that foreign service suppliers 
required to form joint ventures with Chinese entities to operate in China are free to choose 
their joint venture partner, and that they may choose a partner from a sector outside the 
sector of operation of the joint venture, consiste nt with the commitment that China made in 
paragraph 314 of the Working Party Report accompanying its Protocol of Accession?   
 
Answer:  The Telecommunications Law is still in the pr ocess of formulation.  Like other laws and 
regulations, it will be consistent with China' s WTO commitments and ob ligations under the GATS. 
 99. WT/TPR/S/264-05, page 140, paragraph 178 :  Paragraph 178 of Part IV of the Secretariat's 
report notes that China has no plans to lift or ease the provisions on minimum registered capital, 
which China previously reduced in Septemb er 2008 from RMB 2 billion to RMB 1 billion for 
foreign-invested telecommunications  enterprises engaging in basi c telecommunications services.  
Previously, the United States has suggested a c apitalization requirement of no more than $5 million 
(RMB 31.6 million), in line with global norms.  B ecause it appears that few if any additional basic 
telecommunications operators entered the market s ubsequent to the September 2008 reduction, why 
has China not considered further reduction to the registered capital requirement, more in line with 
global norms? 
 
Answe r: We note that some WTO Members require China to reduce the registered capital 
requirement, and have examined this issue care fully.  In September 2008, the State Council 
promulgated the Decision on Amending Regulati on on the Administration of Foreign-Invested 
Telecommunications Enterprises (State Council D ecree No. 534), which halves the minimum capital 
requirement on the basic telecom operation of the foreign-invested telecommunication enterprises. 
Currently, China has no further plan to  revise the relevant requirements. 
 
China is of the view that the registered capita l requirement should be determined based on each 
Members national conditions and there is no so called international standard in this regard.  China 
needs more capitals than many other countries to  build national telecommunication networks due to 
the vast territory and the enormous population of the country.   WT/TPR/M/264/Add.1 
 Page 407 
 
 
  The minimum registered capital requirement for the fo reign-invested telecom enterprises stipulated by 
the Regulation on the Administration of Foreign-Inv ested Telecommunications Enterprises is at the 
same level for domestic services suppliers in Chin a, which complies with the WTO national treatment 
principle.  The telecom sector is a capital-intensive industry featuring economy of scale.  An 
inadequately low level of registered capital would no t be able to effectively safeguard the interests of 
investors and consumers.  As a matter of fact, the WTO Members all have their own minimum registered capital requirements based on their own national conditions.  100. WT/TPR/S/264-05, page 141, paragraph 184 :  Decree 291 from 2000 appears to prohibit 
majority private-sector entry, whether foreign or domestic, into the basic telecommunications sector. 
Is this still true with regard to private Chinese cap ital?  Is it still true that there are no majority-
private basic telecommunications services providers in China and that applicat ions by such suppliers 
would be denied under Decree 291?  In light of the State Council decision to expand the role of private capital, what are China's plans to address this restriction?  
 Answer : Currently, the Chinese government regulat es some basic telecommunications services 
business with the same approach as regulating value-added telecommunications services business.  It is reported that around 400 enterprises obtained li censes to provide such basic telecommunications 
service, and 90% of them are Chinese private enterprises. 
 
In order to implement the Several Opinions of  the State Council on Encouraging and Directing 
Healthy Development of Private Investment, M IIT is positively reviewing and researching the 
relevant issues.  
101. WT/TPR/S/264-05, page 144, paragraph 196 :  Please provide information on the specific 
reasons used by the Chinese Govern ment to filter services and content provided via the Internet.  How 
does China provide notice to these providers that thei r ability to provide service  into China has been 
blocked by the Chinese Government? 
 
Answer:  The Chinese government regulates the Internet  in accordance with relevant laws and 
regulations.  The Decision of the National Pe ople's Congress Standing Committee on Guarding 
Internet Security, Regulations on Telecommunicati ons of the People's Republic of China, Measures 
on the Administration of Internet Information Serv ices, Measures on the Administration of Security 
Protection of the International Networking of Com puter Information Networ ks, and other laws and 
regulations clearly prohibit the spread of informa tion that contains contents subverting state power, 
undermining national unity, infringin g upon national honor and interest s, inciting ethnic hatred and 
secession, advocating heresy, pornography, violence, terror and other information that infringes upon 
the legitimate rights and interests of others.  According to the above-mentioned decision and 
regulations, Chinese basic telecom operators a nd Internet information service providers are 
responsible for preventing the dissemination of all t ypes of illegal information within the territory of 
China in accordance with the law. 
 
China proposes the application of technical means, in line with relevant laws and regulations and with 
reference to common international practices, to prevent and curb the harmful effects of illegal 
information on state security, public interests and minors.  
China honors its commitments in the WTO, and en courages foreign companies to legally provide 
services in China, and protect their legitimate in terest.  When providing products and services to 
Chinese customers through the Internet, foreign co mpanies shall respect China's specific conditions 
and Chinese traditional morals.  They are prohi bited from producing, duplicating, publishing or 
disseminating the information of endangering nationa l security, instigating ethnic hatred, obscenity, 
pornography, gambling, violence, and etc. which are not favored by the Chinese people.  Foreign 
companies may consult the Chinese telecom operators  if their websites are inaccessible in China. WT/TPR/M/264/Add.1 
Page 408 
 
 
   
102. WT/TPR/S/264-05, page 144, paragraph 196 :  Paragraph 196 of Part IV of the Secretariat's 
report states that [t]he activities of internet cont ent providers are regulated by different regulations 
issued by specialized authorities depending on the nature of the services provided.  Please provide 
information on how a provider of services via the In ternet can determine whic h regulations and which 
specialized authorities are applicable to its service.  In the situation where the regulations of different 
specialized authorities are in conflict, which age ncy of the Chinese Govern ment will resolve the 
conflict?  
 
Answer: The main responsibilities of the State Internet Information Office include:  1) to guide, 
coordinate and supervise the releva nt government agencies to strengthen the regulation of the content 
of online information;  2) to approve and superv ise online news services and other related services;  
3) to investigate and discipline websites that violat e laws and regulations;  4) to guide the work of 
Internet information offices at local levels. 
 
Ministry of Industry and Information Industry of Chin a is responsible to regulate the Internet industry, 
for example to regulate the basic resources such as the Internet doma in names and IP address in the 
territory of China.  
The authorities in charge of press, publication,  education, public health, supervision and 
administration of pharmaceuticals, administrati on of industry and commerce, public security and 
national security are entitled to adopt license requi rements on Internet information services regarding 
press, publication, education, medical and health work, medicine and medical equipments according 
to Measures on the Administration of Internet Information Services.   
The authorities in charge of public security are res ponsible to supervise the security of Internet 
information, and investigate and prosecute the various Internet illegal and criminal activities 
according to the laws.  
103. WT/TPR/S/264-05, page 145, paragraphs 202-203 :  Foreign participation in the Chinese 
telecommunications services sector remains very limited.  What is the basis for the very low level of 
foreign participation in China's telecommunicati ons value-added sector, where only 25 licenses have 
been issued?  What is China doing to remove the pl ethora of informal and formal restrictions that it 
maintains in the basic telecommunications sector, including requirements to partner with state-owned 
enterprises,  informal bans on approval, and high  minimum capital requirem ents, which have blocked 
foreign enterprises from submitting applications to set  up new joint ventures in this sector?            
 
Answer : According to China's accession commitmen ts, foreign investment in value-added 
telecommunication services shall be no more than 50%.  China progressively liberalizes the telecommunication services market in line with its WTO commitments.  So far 26 foreign enterprises 
have applied for licenses of providing value-adde d telecommunication services and then submitted 
qualified documents.  All of them have all obt ained the business licenses without being denied. 
 China processes application for establishing foreig n-invested telecom enterprises according to its 
WTO commitments and relevant regulations such as Regulations on Telecommunications, 
Regulations on the Administration of Foreign Inv ested Telecommunication Enterprises, and Measures 
on the Administration of Telecommunication Busin ess Operation License.  The licensing procedures 
are open and transparent.  The application will be  approved as soon as it is  consistent with the 
prescribed requirements.  So we do not think ther e are informal and formal restrictions as this 
question mentions.   WT/TPR/M/264/Add.1 
 Page 409 
 
 
  IV. TRADE POLICIES BY SECTOR    
(5) SERVICES    (iv)  Transport      
 
104. WT/TPR/S/264-05, page 154, paragraph 246 :  Paragraph 246 of Part IV of the Secretariat's 
report states that [a] new draft regulation is being prepared with the aim of clarifying the conditions 
of authorization by the [Civil Aviation Administration of China (CAAC)] for direct access to and use of foreign [computer reservation systems (CRSs)] by Chinese aviation enterprises and agents of 
foreign aviation enterprises.  When will a draft of the CRS regulation be circulated for public 
comment?  When does China plan to issue the CRS regulation in final form?      
 
Answer : Civil Aviation Administration of China(CAAC) has begun drafting and reviewing the 
Provisional Approval and Administrative Measures on the Direct Access and Usage of Foreign Computer Reservation System by Foreign Aviation En terprises Sale Agents within China, and this 
Measure has stepped into the phase of le gislative review since August 2011. 
 During the process of reviewing, CAAC solicited written and oral opinions from related parties 
several times.  In August 2011, November 2011 and February 2012, CAAC absorbed some opinions 
from International Aviation Association, EU Chambe r of Commerce, international airlines councils in 
China, international airlines, foreign computer r eservation system service providers and other relevant 
domestic organizations.  At present, the draft of this Measure has been submitted to the CAAC for final approval, and the 
Measure will be finally promulgated after the approval.  105. WT/TPR/S/264-05, pages 159-160, paragraphs 274-275 :   Paragraph 274 of Part IV of the 
Secretariat's report states that, [f]or freight trans portation, China's [General Agreement on Trade in 
Services (GATS)] commitments consist of a none  for modes 1 and 2, and allow commercial presence 
in the form of wholly foreign-owned subsidiaries.  Paragraph 275 notes, however, that [r]ailway 
freight transport companies are still classified in th e [foreign investment] catalogue as restricted.  
What types of restrictions does China apply to the rail freight transport sector?  How does these 
restrictions relate to China's GATS obligation to  allow commercial presence in the form of wholly 
foreign-owned subsidiaries for freight transportation?   
Answer : Foreign Service providers are welcome to invest in railway freight transport service in 
China. According to the rules provided in the Catalogue for the Guidance of Foreign-Invested 
Industries (2011 revised edition), railway freight servi ce is classified under the restrained category.  
Therefore, investment of more than 50 million do llars should be approved by National Development 
and Reform Commission, and investment of less than 50 million dollars should be approved by 
provincial development and reform commissions.  This rule has no limitation on foreign equity 
participation in both joint venture and wholly-foreig n-owned, therefore it doesn't conflict with China's 
accession commitment. 
 
IV. TRADE POLICIES BY SECTOR     (5) SERVICES    (vii)  Postal and courier services      
 
106. WT/TPR/S/264-05, page 168, paragraph 322 :  Paragraph 322 of Part IV of the Secretariat's 
report discusses China's Postal Law.  It notes that  the Postal Law provides scope for compulsory 
payments to subsidize universal postal services and that a universal postal service fund will be set up 
to support the provision of universal postal services .  Concerns have been expressed by both Chinese 
and foreign express companies that the express sector should not be subject to any such levies relating 
to the delivery of regular, first class mail.  What are China's plans in this regard?  WT/TPR/M/264/Add.1 
Page 410 
 
 
   
Answer : The universal postal service fund is an important system set up by the amended Postal Law. 
As prescribed in the Article 17 of the Postal Law, the State establis hes universal postal service fund.  
The specific measures of the levy, usage, supervisi on and management of the universal postal service 
fund are formulated by the Department of Finance and other related departments of the State Council, 
which will be submitted to and come into force afte r the approval.  Such specific measures are still 
under study.  107.  WT/TPR/S/264-05, page 168, paragraph 323 :  Paragraph 323 of Part IV of the Secretariat's 
report also discusses China's Postal Law.  It not es that the Postal Law does not allow foreign express 
delivery enterprises to engage in domestic express delivery service for correspondence.  Although the 
Postal Law does allow foreign exp ress delivery enterprises to engage  in domestic express delivery 
service for parcels, the United States understands that the postal authority in China has suggested 
placing geographic limitations on foreign express de livery enterprises supply of domestic express 
delivery service for packages.  Is the United Stat es understanding correct?  If so, how would China 
justify these limitations in light of China's GATS commitments?   
 
Answer:  The understanding is not correct.  According to our WTO commitments, we don't place any 
geographic limitations on foreign express delivery en terprises supply of domestic express delivery for 
packages.  China's Postal Law established the li cense system for express delivery business, thereby 
the postal authorities in China examine and approve the applications for license of express delivery 
business according to the law, which is cons istent with China's WTO commitments. 
 
108. WT/TPR/S/264-05, page 168, paragraph 324 :  Has China issued permits or licenses to any 
foreign companies to provide domestic express de livery service for packages throughout China?  
Please explain. 
 
Answer:  China's Postal Law and the Administra tive Measures of Licensing Express Delivery 
Business clearly define the conditions and pro cedures of applying for license of express delivery 
business, and provide that the enterprises a pplying for express delivery business shall have 
appropriate expertise and capacity within the re levant geographic area.  The License of Express 
Delivery Business issued by the postal authority cl early defines the geographic area and so on, which 
applies to both foreign-invested and domestic ente rprises.  Enterprises shall provide express delivery 
services within the licensed geographic area.  As to the specific licenses issued by Chinese 
government to enterprises to provide express delivery services, please refer to the websites of the 
State Post Bureau (http://www.spb.gov.cn). 
 
IV. TRADE POLICIES BY SECTOR     
(5) SERVICES     (viii)  Distribution services        
 
109. WT/TPR/S/264-05, page 169, paragraph 331 :  Why does China believe that it is necessary to 
require an internet content provider license for an in ternet company engaging in retail sales?  How 
do retail sales qualify as the provision of internet content?   
Answer:  Under Chinese law, this is necessary and justifiable. for more information please refer to 
www.miit.gov.cn. 
  WT/TPR/M/264/Add.1 
 Page 411 
 
 
  Part II:  QUESTIONS REGARDING THE GOVERNMENT REPORT         
 
I.  ECONOMIC AND TRADE ENVIRONMENT AND POLICY DIRECTION      
(1)  ECONOMIC AND TRADE ENVIRONMENT      
(ii)  Domestic situation      
 
1. WT/TPR/G/264, page 6, paragraph 11 :  In paragraph 11 of Part I, the Chinese 
Government's report states that numerous provin ces and municipalities have adjusted their minimum 
wages upward in 2010 and 2011, an important m echanism for boosting domestic demand.  What 
measures is China taking to improve enforcement of  the minimum wage system to ensure that these 
adjustments are broadly implemented?    
Answer:  According to the Regulations on Minimum Wage issued in 2004, all regions shall adjust 
their minimum wage standard according to real c onditions.  The minimum wage standard shall be 
adjusted at least every two years. 
 In recent years, local governments timely adjust minimum wage standard according to local economic development, average wage and consumer price i ndex (CPI).  In 2010, 30 regions adjusted the 
minimum wage standard, with average increase by 22.8%;  in 2011, 25 regions adjusted minimum 
wage standard, with average increase by 22%.  Th e increase range of minimum wage is higher than 
that of price increase, which ensures the basic living standard for the laborer and their family 
members.  In order to ensure gradual increase on low-income employees wages, China will guide all regions to 
timely and reasonably adjust minimum wage stan dard according to local economic development, 
productivity, CPI, and average wage increase. China will try to raise the aver age wage by 13% each 
year during the 12
th five-year plan period.  Most regions w ill have a minimum wage standard that is 
more than 40% of the average wage of local urban employees.  Meanwhile, China will strengthen 
enforcement of the minimum wage standard and penali ze malpractice that is against the regulation, so 
as to ensure full implementation of the minimum wa ge system and safeguard the legitimate right and 
interest of low-income laborers. 
 
2. WT/TPR/G/264, page 6, paragraph 11 :  In paragraph 11 of Part I, the Chinese 
Government's report discusses labor as a cost.  The United States notes that enforcement of labor 
laws generally, including laws governing inter nationally recognized core labor standards, such as 
child labor and forced labor, as well as laws go verning acceptable conditions of work, creates the 
institutional environment for sustaining domestic  demand and growth.  What role have workers and 
workers organizations been asked to play, or will th ey be asked to play, in developing strategies to 
improve enforcement of labor laws in each of those areas?       
 
Answer: As the representative of Chinese workers, Ch inese trade unions take the protection of 
workers rights as its sacred responsibility, have been always active in the labour legislation and 
inspection of labour laws so as to translate the le gitimate demands of work ers for decent work into 
effective social policies.    At national and local levels, through tripartite  committee, joint meeting between unions and 
government as well as other social dialogue form s, Chinese trade unions have been actively 
participated in the formulation and revision of laws, regulations and policies affecting workers 
immediate interest in terms of employment, remune ration, holidays and rest, OSH, education, training 
and social security.  Unions take this role as the protection of workers rights at source from macro-perspective.  In the past 5 years, Chinese tr ade unions have been invo lved in over 100 pieces of 
national legislation, including the drafting and amen dment of dozens of administrative regulations and 
rules supplementing Labour Law of People's Republic  of China, such as labour contract law, WT/TPR/M/264/Add.1 
Page 412 
 
 
  employment promotion law, labour disputes media tion and arbitration law.  In addition, over 
1,200 local regulations and policies concerning work ers immediate interests have been promulgated 
with the participation of tr ade unions at various levels. 
 
Meanwhile, Chinese trade unions place great emph asis on inspection of labour law enforcement, 
aiming to better safeguard worker s legitimate rights and interests, thus ensuring harmonious labour 
relations.  At present, Chinese trade unions, in clo se collaboration with labour inspection authorities, 
have already put in place a labour law inspection network, comprising up to 500,000 labour law 
inspection organizations nationwide run by unions, w ith more than 1 million union inspectors on duty 
daily.  Over the past 5 years, over 400,000 complaints  have been dealt with by trade unions labour law 
inspection organizations.  Unions inspection organiza tion have right to rectify the unlawful practices 
at workplace, and request the labour authority for penalty on enterprises which violate the relevant laws.   
Chinese trade unions welcome the National Five Y ear Development Plan from 2011-2015, which has 
committed to promote collective bargaining and incr ease the minimum wage, as well as put into place 
mechanism to reduce the income gap, and achieve social justice.  Therefore, Chinese trade unions 
have been fully engaged in the income policy ma king and minimum wage setting at all levels.  At 
national level, All-China Federation of Trade Uni ons (ACFTU) has launched a 2 paramount priorities 
campaign, their slogan is to get all enterprises unionized, and to get all enterprises engaged in the 
collective bargaining.  This campai gn has been incorporated in the da ily work of the unions at local 
levels now.  With the high importance on wage negotiation for fair share objective, Chinese trade 
unions call for cherishing the value of labour, as la bour shapes the world, builds the society.  All 
workers should work in dignity and fairness, and deserve decent work.  II. ECONOMIC AND TRADE ENVIRONMENT AND MACROECONOMIC POLICY 
DIRECTION       
(3) ACCELERATING THE TRANSFORMATION OF ECONOMIC DEVELOPMENT 
PATTERN      
(iv) Advancing energy conservation and pollution reduction and industrial restructuring      
 
3. WT/TPR/G/264, page 12, paragraph 35:  Para graph 35 of the Chinese Governments report 
explains that the Chinese Government has alwa ys considered pushing forward energy conservation 
and pollution reduction and accelerating industrial rest ructuring as important tasks in promoting the 
transformation of the pattern of economic developmen t.  However, the United States notes that China 
limits the production of remanufactured goods to a sm all number of products in the heavy equipment 
and motor vehicle sectors and only allows the re manufacturing to be undertaken by certain 
enterprises, designated by the Chinese Government.  China also rest ricts the importation of cores 
(i.e., vital non-new inputs for remanufacturing) an d remanufactured products.  In light of the goals 
described in paragraph 35 of the Chinese Government s report, please explain whether China has any 
plans to allow remanufacturing to take place for more products or in sectors that are currently 
restricted, such as the medical, office and info rmation and communications  technology equipment 
sectors.  Does China have any plans to allow the importation of cores and remanufactured products?   
 
Answer: (1) Scope of remanufactured goods.  China is  not limiting remanufactured goods to products 
in the heavy equipment and motor vehicle sectors.  So far the development of remanufacturing is at its 
pilot stage. Some pilot fields have been built, with products covering auto parts, engineering 
machinery, agricultural machiner y, machine tools, mining equipment, office supplies, etc. 
 (2) Remanufacturing designation. China does not d esignate specific enterprises to remanufacture. 
Therefore, remanufacturing pilot fields are open to both domestic and foreign companies without 
discrimination, and many foreign companies are par ticipating in these fields.  For instant, Cummins 
and Caterpillar are remanufacturing pilot companies in China. Other large companies like IBM are  WT/TPR/M/264/Add.1 
 Page 413 
 
 
  paying attention to China's remanufacturing indus tries and have set up their computer server 
remanufacturing plants in China.  
(3) Importation of old products for remanufacturing.  To allow legal and free trade of remanufactured 
products is conducive to the growth of this industry and is also a tendency of international trade.  
However, before relevant technologies get ma ture, free importation of remanufactured products 
should not be allowed hurriedly, because on one hand necessary measures for this industry are not 
complete, technical standards and policies have not  been formulated and supervision system not 
established, immediate opening to importation may im pact remanufacturing market and consumption 
safety, and on the other there exist legal barriers to  import and export products for remanufacturing. 
 
II. ECONOMIC AND TRADE ENVIRONMENT AND MACROECONOMIC POLICY 
DIRECTION       
(3) ACCELERATING THE TRANSFORMATION OF ECONOMIC DEVELOPMENT 
PATTERN      
(v) Strengthening further the foundation for th e development of agriculture and rural areas  
 
4. WT/TPR/G/264, page 13, paragraph 38:  Para graph 38 of the Chinese Governments report 
notes that China will continue the implementation of the pay-back policies and further strengthen the 
support for agriculture.  Has China notified any of these policies to the Committee on Agriculture? 
 
Answer:  The pay-back policy has been a working a pproach for the Chinese government in recent 
years.  Its goal is to develop the rural econom y, increase farmers income, and improve production and 
living conditions in rural areas.  The main conten t includes adjusting the distribution of national 
income, increasing inputs to agriculture and rural ar eas, strengthening the agricultural infrastructure, 
introducing measures strengthening  and benefiting farmers like improved varieties subsidies, 
strengthening the regulation of markets for agricu ltural products, and mobilizing the enthusiasm of 
farmers to develop production;  giving emphasis to  rural areas for the development of infrastructure 
and social undertakings, improving rural water and gas room, and conditions for education, health 
care and cultural facilities; improving the rural soci al security system, and vigorously promoting to 
establish three security systems: the system of new rural cooperative medical care, the system of rural 
minimum living allowance and the system of new rural social pension insurance.  We have notified to 
the WTO regarding measures related to  the WTO Agreement on Agriculture. 
 
II. ECONOMIC AND TRADE ENVIRONMENT AND MACROECONOMIC POLICY 
DIRECTION       
(4) CONTINUING TO DEEPEN THE REFORM STEADFASTLY       (iii) Reform of state-owned enterprises and development of the non-public sector       
 
5. WT/TPR/G/264, page 15, paragraph 48 :  Paragraph 48 of the Chinese Governments report 
states that the number of central SOEs decreased fr om 128 at the time of China's 2010 Trade Policy 
Review to 117 by the end of 2011.  However, a ccording to paragraph 122 of Part III of the 
Secretariat's report for China's 2010 Trade Policy Review, SASAC had planned to reduce the number 
of central SOEs subject to its management to 80-100  by the end of 2010.  What factors led China to 
fail to meet SASACs SOE reduction goal?  Does Chi na intend to continue the process of further 
reducing the number of central SOEs?  Please explain.  
 
Answer:  The Guiding Opinions on Promoting the Adjustment of State-owned Assets and SOE 
Restructuring issued in 2006, requires that, by 2010, 80 to 100 enterprises promoted by the SASAC 
will be adjusted and restructured.  However, this  is only an expected obj ective. Enterprises are the 
main body of adjustment and restructuring.  Th e government shall respect companies willingness to 
encourage and guide them based on market-oriented resource distribution.  From now on, China will WT/TPR/M/264/Add.1 
Page 414 
 
 
  continue to stick to the principle of market-o riented resource distribution, enhance government 
guidance and promote optimization of company structure.   
  WT/TPR/M/264/Add.1 
 Page 415 
 
 
  REPLIES TO FOLLOW-UP QUESTIONS AND  
ADDITIONAL REPLIES PROVIDED BY CHINA 
 
 
CANADA 
 FOLLOW-UP QUESTIONS FROM THE GOVERNMENT OF CANADA 
 
Part II. Trade Policy Regime; Framework a nd Objectives; (1) Institutional and Legal 
Framework; (ii) Central-provincial rel ationships: paragraph 19, page 14:  
 
The Secretariat's report notes that the implemen tation and enforcement of national policies and 
measures is carried out mostly by counterpart agen cies of local governments.  It notes further that 
coordination between the national a nd local level remains weak. On the resolution of conflicts, the 
Report says that according to authorities, higher leve l agencies tend to use the argument "local yields 
to central" to solve conflicts.     
4. In cases of conflict, could China explain w hat enforcement mechanisms it uses to ensure that 
sub-national level governments comply with national policies?    
 
5. In cases where the local level is not impl ementing or enforcing national policies and 
measures, what means of enforcement are available to FIEs?   
 
4-5 Answer: The Legislation Law of the PRC states that  the Standing Committee of the NPC has the 
right to repeal local regulations in contradic tion with the Constitution, laws and administrative 
regulations.  The State Council has the right to change  or rescind inappropriate local rules.  China has 
set up record review system of regulations and rules, according to the Ordinance on the Archivist 
Filing of Regulations and Government Rules, the legal office of the State Council will review the 
regulations and rules submitted to the State Council fo r filing.  Those local regulations that are in 
contradiction with administrative rules will be fu rther submitted to the standing committee of the NPC 
for review;  the legal office of the State Council will also coordinate differentiated regulations 
between local and department rules on a single ite m.  The legal office will offer recommendation and 
submit it to the State Council for deliberation if co nsensus can’t be achieved through coordination.  
 
Follow-up question:   
 
China has responded that it has set up record review s ystem of laws and regulations, according to the 
Ordinance on the Archivist Filing of Regulations a nd Government Rules, the legal office of the State 
Council will review the regulations and rules subm itted to the State Council for filing.  Can China 
please confirm whether there is a legal requirement for sub-national levels of government to notify 
their regulations and rules to the State Council for filing?  Further, is there a record of these filings 
available for public review via the internet or another tool?  
 Finally, China's response outlines a mechanism to address non-compliance at the sub-national level 
where rules and regulations do not comply with national-level policies and laws.  Canada wishes to know what enforcement mechanisms China uses wh en sub-national level non-compliance relates to 
shortcomings in implementation or enforcement of national policies rather than the enactment 
conflicting rules and regulations?  Canada also wi shes to know and what recourse mechanisms are 
available to FIEs when sub-national level non-comp liance relates to shortcomings in implementation 
or enforcement of national policies rather than conflicting rules and regulations?  
 
Answer:  In accordance with the Ordina nce on the Archivist Filing of Regulations and Government 
Rules, the regulations and rules that should be submitted to the State Council for filing are: WT/TPR/M/264/Add.1 
Page 416 
 
 
  sub-national regulations formulated by the people's congresses or the standing committees thereof of 
the provinces, autonomous regions, municipalities di rectly under the Central Government and the 
comparatively large cities according to their statut ory functions and duties as well as legal procedures 
and the regulations of the special economic zone s formulated by the people's congresses or the 
standing committees thereof of the provinces or mu nicipalities where the special economic zones are 
situated according to their respective functions an d legal procedures, as well as the regulations for 
autonomy and specific regulations formulated  by the people's congresses of the autonomous 
prefectures and counties according to their respectiv e functions and legal procedures;  rules and 
regulations formulated by the ministries, commi ssions under the State Council, the People's Bank of 
China, the National Audit Office and the organs di rectly under the State Council that have certain 
administrative powers within their respective functions and duties on the basis of the provisions of laws, administrative rules, decisions or orders of the State Council and according to the Ordinance on 
the Procedures for the Enactment of Government Rul es;  rules and regulations enacted by the people's 
governments of the provinces, autonomous regions , municipalities directly under the Central 
Government and the comparatively large cities on th e basis of the provisions of laws, administrative 
regulations and sub-natio nal regulations of their respective provinces, autonomous regions or 
municipalities directly under the Central Govern ment and according to the provisions of the 
Ordinance on the Procedures for the Enactment of  Government Rules.  The Ordinance on the 
Archivist Filing of Regulations and Government Ru les also states that, the people's governments of 
provinces, autonomous regions, and municipalities di rectly under the Central Government should 
enhance the supervision over the rules and re gulations and normative documents issued by 
lower-level administrative bodies pursuant to law, and set up relevant record review system.  
According to this stipulation, 31 Chinese provinces, cities and regions have established record review 
system for rules and regulations and normative documents issued by high administrative bodies to 
lower-level administrative bodies. In addition, acco rding to the provisions of Law of the People's 
Republic of China on the Supervision of Standi ng Committees of People's Congresses at Various 
Levels, the standing committees of people's congresses at or above the county level also set up record 
review system over the decisions and orders issued by  government at the same level.  The public may 
inquire sub-national regulations and rules submitted to the State Council for filing via 
http://www.chinalaw.gov.cn/.  The Legislative Affairs Office of the State Council compiles and 
publishes a volume of New Compilations of Laws in  the People's Republic of China, which publishes 
full texts of departmental rules and regulations s ubmitted to the State Council for filing and catalogues 
of sub-national regulations  and rules of current month.  In accordance with the provisions of 
Administrative Reconsideration Law of the People' s Republic of China and Administrative Procedure 
Law of the People's Republic of China, any citizen , juridical person and other organization including 
foreign direct invested company, which considers that any specific administrative behaviour of an 
administrative body in the implementation or en forcement of national policies infringes upon its 
lawful rights and interests, may apply for administ rative reconsideration or lodge an administrative 
procedure pursuant to law.  
 
Part II. Trade Policy Regime; Framework and Objectives; (4) Foreign Investment Regime; (i) 
Recent Developments in FDI Policy: paragraph 40, page 19:   
8. Could China please explain what criteria it uses when it removes a sector from the 
encouraged category?  Can China confirm that a ll investments made in the Encouraged Category of 
the 2007 Catalogue will continue to receive preferen tial treatment even if th ese sectors were removed 
from the Encouraged Category in the 2011 Catalo gue?  The predictability in China's investment 
environment is beneficial both to investing parties and recipient parties.  Once an investment is made 
under the encouraged category, a category change fo r that sector should not lead to changes in the 
previously established preferential policies for a guaranteed, predictable period of time.  
  WT/TPR/M/264/Add.1 
 Page 417 
 
 
  Answer:  An array of macro-and micro economic indica tion and criteria are used to come up with 
Scientific decisions on which sector should be re moved from a particular category by taking into 
account the overall strategy and needs of own national economic development. 
 Follow-up Question:     
 
Could China please explain the criteria it uses to remove a sector from the encouraged category?  
Can China confirm that all investments made in the Encouraged Category of the 2007 Catalogue will 
continue to receive preferential treatment even if  these sectors were removed from the Encouraged 
Category in the 2011 Catalogue? 
 
Answer:  The Provisions on Guiding the Orientation of  Foreign Investment (State Council Order 
No. 346) has made definitive provisions about projec t classification and criteria in the Catalogue of 
Industries for Guiding Foreign Investment (hereinaft er referred to as the "Cat alogue").  The Catalogue 
(2011 Revision) was executed on 30 January 2012, and foreign invested projects approved after 
30 January 2012 shall be enforced pursuant to the new Catalogue, and foreign invested projects 
approved before 30 January 2012 shall be enforced pursuant to the former Catalogue.  For projects 
that add restrictive conditions (including prohibiti on) in the new Catalogue, such as foreign invested 
enterprises that has already existed and been opera ting prior to 30 January 2012, the policies at the 
time of project approval shall apply, however, the ca pital increase, equity transfer or overseas listing 
of domestic companies of former old enterprises mu st apply the provisions of the new Catalogue.  
 
Part III. Trade Policies and Practices by Measure; (1) Measures Directly Affecting Imports; 
(vii) Standards and other Technical Requirement s; (a) Standards and Technical Regulations: 
paragraph 84, page 46: 
 
Canada notes that there are many standards in Ch ina at numerous levels (i .e. central government, sub-
central, industry etc.) yet there does not seem to be one central portal to which industries can consult which contains all levels of sta ndards. Canada has concerns that this practice makes it difficult for 
enterprises to know which standards must be followe d. Further, many standards can only be obtained 
by hard copy while some cannot be obtained at all (particularly those related to security).  
 
21. Does China have plans to create one electronic portal that lists all standards that industries 
and companies must adhere to and that makes elect ronic copies of those standards available?  
 
Answer: The whole texts of all the safety-related compul sory national standards can be found at the 
official website of SAC. 
 
Follow-up Question:     
 
Canada thanks China for its answers on sta ndards and certification issues and recognizes that 
national standards can be found on central governme nt websites.  However, standards formed at the 
sub-national or enterprise level are much more difficult to find, as there do not seem be a central 
portal or website tailored for standards notification at  these levels.  As a result, the process to which 
foreign companies must adhere if they wish to do bus iness in China is often very time-consuming and 
confusing.  Taking into account China's conti nued efforts to ensure transparency, does China have 
any plans to create a centralized electronic portal that includes or provides links to sub-national and 
industry standards?    
Answer:  The website of the Standardization Admini stration of the People's Republic of China 
(www.sac.gov.cn) provides not only information re garding the formulation and revision of Chinese 
national standards, announcements on the issue of national standards, inquiries about full texts of 
compulsory national standards, but also indus try standard archivist filing announcements, WT/TPR/M/264/Add.1 
Page 418 
 
 
  sub-national standard archivist filing announcemen ts, including standard numbers, names of the 
standards, substitution standards, da te of approval, date of implementation, and competent authorities 
of standards etc.  For standards of such fiel ds as electronics, agriculture, public health and 
environmental protection, this website also offers lin kage to standard columns of relevant ministries 
and commissions.  For sub-national standards, websit es of all local standardization institutes provides 
inquiries and full text reading services of sub-national standards.  
 
Part III. Trade Policies and Practices by Measure; (1) Measures Directly Affecting Imports; 
(viii) Government Procurement:  paragraph 111, page 53: 
 
Paragraph 111 notes that China objectives in procurement include the promotion of better 
governance.   34. Has China considered, or does China invo ke any procurement measures to support 
sustainable procurement, particularly envi ronmental sustainable procurement?   
 
Answer : According to the Government Procurement Law of PRC, government procurement should 
be conducive to the accomplishment of environm ental protection and other policy objectives of 
national economic and social development. Chinese government has come up with a series of policies 
which stipulate preferential or mandatory procur ement of energy-saving and environment-friendly 
products. 
 
Follow-up question:  
 
Canada would appreciate further information on the "series of policies which stipulates preferential 
or mandatory procurement of energy saving and en vironment-friendly products".  Would China be 
able to provide copies of these policies or point to websites where these are available? Has China 
conducted assessment of the results, the bene fits or the success of these policies?   
 
Answer:  In order to fulfill policy targets regarding government procurement of energy saving and 
environmental-friendly products stipulated in th e Government Procurement Law of The People's 
Republic of China, the Ministry of Finance h as respectively established government procurement 
system of energy saving and environmental-friendl y products in 2004 and 20 06, listed energy saving 
and environmental-friendly products that passed st ate certification into government procurement list 
to carry out preferential or mandatory procurement.   In 2011, the scales of mandatory and preferential 
procurement of energy saving a nd environmental-friendl y products respectively reached RMB 91.06 
billion and RMB 73.98 billion, accoun ting for 82.21% and 59.59% of products of the same kind 
respectively, which plays a significant role in driv ing, demonstrating and guiding energy saving and 
environmental protection. Please log on www.ccgp.gov.cn for more details.  
 
Part III. Trade Policies and Practices by Measure; (1) Measures Directly Affecting Imports; 
(viii) Government Procurement:  paragraph 116, page 54: 
 
Paragraph 116 notes that China does not consider procurement by SOEs as government procurement. 
However, footnote 191 on page 73, indicates that SOEs include wholly state-owned enterprises or 
state-controlled enterprises.  Canada understands  that if an SOE procures a good or service with a 
view to commercial resale or with a view for the use in the production of goods for commercial resale 
that such procurement would not be considered government procurement.      
39. Do Chinese SOEs engage in procurement for purposes other than commercial use or use in 
the production of goods for commercial resale?  Ar e there any circumstances in which an SOE would 
be engaged in procurement for a government purpose?   
  WT/TPR/M/264/Add.1 
 Page 419 
 
 
  Answer: Chinese SOEs are independently operated market  entities, and their procurements are of 
commercial purpose. 
 
Follow-up question:      
Although China's response indicates that "SOEs a re independently operated market entities, and their 
procurements are of commercial purpose", in Chi na's response to question #62 it notes that SOEs are 
involved in national security, key infrastructu res and supply of import ant public products and 
services.  Based on questions asked by other members,  it would appear that SOEs are involved in 
public utilities and government construction works and procurement.  In that respect:   
 
a. Can China clarify the rela tionship between SOEs performing these functions and the Chinese 
government?  
 Answer:  The large infrastructure and public utilities projects engaged by SOEs are of commercial 
operation, and shall be governed by  the provisions of the Tendering a nd Bidding Law of the PRC, and 
the government does not intervene in such bidding activities.   
b. To what extent do government departments or institutions exercise authority or responsibility 
over these types of projects?     
 
Answer:  Chinese SOEs are independently operated market entities with corporate capacity, and the 
Chinese Government exercises shareholder's (investor 's) rights over SOEs pursuant to law, and does 
not intervene in their independent business operati ons.  The relevant administrative supervision 
authorities conduct supervision over bidding activities and investigate and prosecute relevant illegal 
acts pursuant to law.  
 
c. As SOEs are independently operated market entities, how are they assigned the responsibility 
for these important public functions? (iv) Do government departments, institutions or 
organizations delegate their authority or provides funds to an SOE for these projects?     
 
Answer:  Chinese SOEs undertake relevant building projects as suppliers, and do not perform 
government functions.  The Chinese Government do es not provide SOEs with more preferential 
policies in finance, taxation, credit, exclusive ri ght and others than any other enterprises.    
 d. Can China clarify why it views "national security" as not a governmental function?    
 
Answer:  China's former response is "public security", which is the responsibility of all enterprises 
and citizens, not only the government.   
PART III.  Trade Policies and Practices by Me asure; (3) Measures Affecting Production and 
Trade; (vii) Intellectual Property Rights: paragraph 281, page 87:  
The Secretariat report indicates that "local IPR administrative offices are responsible for patent 
disputes".  69. Can China indicate whether all local IPR offices have adopted a standardized set of rules, 
regulations and procedures for handling patent disputes? 
 
Answer : To regulate patent enforcement work and protect  the legitimate rights and interests of patent 
right holders and the public, SIPO promulgated the Measures for Administrative Enforcement of 
Patents in December 2010.  WT/TPR/M/264/Add.1 
Page 420 
 
 
  Follow up question:      
 
Could China please confirm its response to Question 69 to the effect that the local IPR offices are not 
in a hierarchical relationship with SIPO, but are rather subordinate to the local people's governments 
that establish them?  If this is the case, could China please clarify what mechanisms SIPO uses to 
ensure these local IPRs and their supervising lo cal governments consistently follow SIPOs business 
guidance on how to handle patent infringement disputes, investigating patent counterfeits and 
mediating patent disputes since these are areas that  fall under SIPO's jurisdiction?  Lastly, could 
China please confirm whether there is a hierarchic al relationship between SIPO and the provincial 
IPR offices?     
 
Answer:  Local IPR offices are the institutions estab lished by local people's governments to be 
responsible for patent administration within thei r regions of administration, and are not in a 
hierarchical relationship with SIPO.  According to  Article 80 of Rules for the Implementation of the 
Patent law of PRC, the patent administration department under the State Council shall provide 
professional guidance to the administrative authorities for patent affairs in handling patent infringement disputes, investigating and punishing acts of passing off a patent and mediating patent 
disputes.  According to the provisions, SIPO provi de professional guidance to local IPRs on the above 
patent affairs.  Handling patent infringement dis putes, investigating and punishing acts of passing off 
a patent and mediating patent disputes ar e duties granted by law to local IPRs.  
 
Part III. Trade Policies and Practices by Meas ure; (2) Measures Directly Affecting Exports; 
(vii) Intellectual property rights: paragraph 292, page 90: 
 
The Secretariat report states that "Guidelines for Competition against Abusing Intellectual Property 
Rights are being drafted". 
 73. Can China confirm whether the draft Guide lines will be provided for public consultations? 
 
Answer:  In the course of studying and drafting the Guidelines, the State Administration for Industry 
and Commerce studied and drew lessons from law enforcement practices and related guidelines and 
regulations published by foreign competition agen cies, carried out research activities at home, and 
solicited opinions and suggestions from companies, la w courts and government departments related to 
intellectual property for several times.  In the c ourse of further improvement, we will continue to 
solicit opinions from the relevant parties and we welcome your comments and suggestions in this 
regard. 
 
Follow-up question:  
 
Canada appreciates China's openness in welcoming foreign parties' comments and suggestions on the 
draft "Guidelines on the Enforcement of Anti-Mono poly Law in the Field of Intellectual Property 
Rights".  Can China therefore confirm that it will make the draft available for such a purpose in 
advance of their implementation?      
 
Answer:  When the Guide (draft) attains to maturity, it will be published to ta ke advice from various 
circles of society with foreign compe titive law enforcement agencies included.  
 Part IV. Trade Policies by Sector; (5 ) Services; (ii) Financial services:  
 
143. Why does China maintain separate approv al processes for foreign and domestic insurers? 
 
Answer:  In accordance with China's WTO accession commitments, China accords national treatment 
to foreign insurance compani es for the branch establishment.   China Insurance Regulatory  WT/TPR/M/264/Add.1 
 Page 421 
 
 
  Commission (CIRC) applies the same law, regulations and procedures to the establishment of new 
branches of domestic and foreign-invested insurance companies.  Rules on Administration of Insurance Companies stipulates specific requi rements for the application and establishment 
procedures of branches, which are transparent, non-discriminatory and consistent with China's 
commitments. 
 
Follow-up question:    
 
It is reported that approval of ne w provincial branches is restricted  to one new branch approval per 
single application for foreign joint venture (JV) insurance companies, while  for domestic insurers, 
there is no such requirement and China Insur ance Regulatory Commission (CIRC) may approve 
multiple new provincial branches for domestic in surers in a single application.  The foreign JV 
insurer can only apply for a second branch upon CIRC approval of commencement of business for the 
first branch, thus limiting the numb er of new branches per year for foreign JVs.  Could China confirm 
whether this is still the case and if yes, whether th ere are plans to accord identical treatment to 
foreign JVs and domestic insurers in the future? C anada would appreciate it if China could provide 
references to any specific supporting documents (law s, regulations, guidelines or information guide) 
on the approval of domestic and foreign insurance branches.  
Answer:  The establishment of branches by Chinese and foreign insurance companies apply to the 
same examination and approval procedure, without di scrimination.  National treatment is not simply 
equal to same quantity.  China does not have any in surance law or regulation that prohibits insurance 
companies from applying for establishment of branch es according to their own development strategies 
and business operations.  For documents on the appr oval of branches, please log on the website of 
China Insurance Regulatory Commission  www.circ.gov.cn for inquiries.  
 
 
EUROPEAN UNION 
 I. Follow-up questions 
 Questions 21, 34, 41, 44, 45, 46, 139, 144.c, 144.d:  China has indicated that replies to these questions 
will be submitted after coordination with competent authorities.  The EU looks forward to study such 
replies latest one month after the TPR meeting.     21. What steps is China taking in order to  expand the systematic use of Regulatory Impact 
Assessments (RIAs) by all its regulatory authorities?   Is there an obligation to carry out RIAs for 
measures that may have a significant impact on trade?   
 
Answer:  Administrative system reform is one of the important elements for China to continue to 
deepen its reform.  China will consider the question raised by EU in the course of its administrative 
system reform. 
 
34. Can China explain how its policy of system atically developing Chinese-specific standards in 
the fields of ICT and information security, even wher e international standards exist, comply with its 
obligations under the TBT Agreement?  If it is Chin a's assertion that the international standards in 
questions are inappropriate or ineffective for th e objectives pursued, can China clarify what these 
objectives are, and can it provide scientific and techni cal evidence to support this assertion?       
 
Answer:  China has consistent and clear policies for international standards and actively adopts the 
standards formulated by acknowledge d international organizations for standardization such as ITU, 
ISO, IEC and so on.  However, currently quite a few regional standardization organizations or even 
certain countries are promoting their own standards in the name of "international standards".  We WT/TPR/M/264/Add.1 
Page 422 
 
 
  don't think this kind of standards belongs to interna tional ones and would just ta ke them for reference. 
What we do conforms to international rules.  So , there is no so called "systematically developing 
Chinese-specific standards in the fields of ICT and information security". 
 
41. Could China explain why it considers necessary  to regulate CABs that perform conformity 
assessment activities required by another country, and which are already appr oved by the authorities 
of that country? 
 Answer:  The purpose of China's supervision and regul ation of certification bodies operating in the 
Chinese territory is to regulate certification activ ities and enhance effectiveness of certification. 
China's Measures for the Administration of Certification Bodies is developed on the basis of the relevant international standards and applies e qually to domestic and foreign certification bodies. 
Therefore, it is fully WTO/TBT-compliant.  44. Could China provide an update on MLPS im plementation?  In particular, how many 
information systems have so far been assessed accord ing to MLPS criteria, how many of those have 
been classified as 'critical infrastructure' (level 3 and above), and which sectors they belong to?      
 
Answer:  After research and practices for several years, China has gradually improved its policies on 
graded protection of information security.  In 2007, the Ministry of Public Security, the State Secrecy 
Bureau, the State Cipher Code Administration and th e Information Office of the State Council jointly 
issued the Administrative Measures for the Graded Protection of Information Security (Gong Tong Zi 
[2007] No. 43 ，hereinafter referred to as the "Administrative Measures").  The Administrative 
Measures serve as a standard document for China to  implement the graded protection system of 
information security.  The key of the graded protectio n system of information security is to implement 
graded protection and graded superv ision and to highlight the key po ints in relation to information 
system.  The aim for China to implement the graded  protection system of information security is to 
keep China's fundamental information network and im portant information system  safe and secure and 
to maintain national security and public interests.  45. Could China explain further what is meant with  the "importance" of the information system?    
 
Answer:  The aim for China to implement the graded pr otection system of information security is to 
keep China's fundamental information network and im portant information system  safe and secure and 
to maintain national security and public interests. 
 
46. If the answer to the above implies that the cl assification of the information system depends on 
its importance to national security, can China prov ide a detailed outline of the reasons for which 
information systems in sec tors such as banking (e.g. retail bank ing payment systems, debit cards, 
etc.), public utilities (e.g. energy or public transpo rt companies, including applications such as 
subscribers' electronic cards), education (e.g. un iversities) or health (e.g. hospitals) would be 
considered as national-security sensitive?     
Answer:  The key for China to implement the graded pr otection system of information security is to 
adopt graded protection for information system.  In China, the security of banking, education, 
medical, transportation and other public industry is di rectly related to the citizens' interests such as 
economic income, right to education, living and hea lth, and transportation security.  The security issue 
in such information systems, if any, will directly affect public rights and inte rests and social stability.  
Therefore, China determines the "importance" of  information system based on the extent of 
impairment such information systems may bring to national security, social order, economic 
construction and public interests if such information systems are interrupted rather than the sensitivity 
of the industry. 
  WT/TPR/M/264/Add.1 
 Page 423 
 
 
  139. How is the purchasing and stocking of sugar  as described in paragraph 34 accounted for in 
China's domestic support notifications?     
 Answer:  We have placed this issue under green box notification. 
 
144. c. Has China considered reviewing the Prudentia l Ratios (CBRC) so assets and liabilities can be 
compared with the same tenor?      
Answer:   Could EU please further clarify this question,  for the relevant authorities in China could not 
understand it clearly.    
d. Does the Chinese government plan to implement an y advance in the area of increasing foreign debt 
quota? 
 Answer:  The Measures for the Administration on Foreign Debts of Foreign-funded Banks in China 
stipulate that, according to the need of national economy and social development, the status of 
international balance of payments and the capability for bearing the foreign debts, as well as the status 
of assets and liabilities of foreign-funded banks in  China and the demand for working capital, etc., 
properly determine the total amount of foreign debts of foreign-funde d banks in China and the target 
for the structural adjustment and control of medium -term and long-term and s hort-term foreign debts. 
 
Follow-up to question 4 (report by the Government, page 24, para. 98):  the EU is pleased with 
China's clarification given in reply to questi on 4 that "technology coop eration and transfer are 
voluntary behaviours of enterprises and that it w ill not take technology transfer as a precondition for 
market access".  However, the EU often hears co mplaints from its industry about being obliged to 
accept conditions imposed upon them that require a de gree of forced technology transfer to the local 
joint venture partner for instance.  Does there exist an entity or comp laints office at central level 
where companies can speak up if instances occur wh ere technology transfer conditions would be 
imposed upon them at local level?    
 Answer:  The Chinese government has made it clear in the answer that technology cooperation and 
transfer are voluntary behaviours of enterprises and that it will not take technology transfer as a precondition for market access.  Fo reign enterprises and Chinese partners may reach agreements at 
their own discretion based on their negotiations and their respective comparative advantages. 
Generally speaking, the reason why foreign enterpri ses introduce technologies into China is that they 
believe in the potential of the Chinese market and hope they may occupy an advantageous position in 
the market rather than governme nt's compulsory requirements. 
 The Chinese government has not set up any complaint office or entity where companies may speak up 
if instances occur where technology transfer conditio ns would be imposed up on them.  In accordance 
with the Administrative Reconsideration Law of the People's Republic of China and the 
Administrative Procedure Law of the People's Republic  of China, where citizens, legal persons and 
other organizations including enterprises directly invest ed by foreigners consider that their legitimate 
rights and interests have been impaired by admini strative acts taken by administrative organs during 
the implementation or enforcement of state polic ies, they may legally apply for administrative 
reconsideration or institute administrative procedures. 
 
EU's initial question 4: Can China confirm that no government authority, whether central, provincial 
or local, shall take technology transfer as a pre-c ondition for market access – including in the context 
of examining and approving planned investments of foreign operators?       
Reply by China: With regard to the issue of ma ndatory technology transfer, actually, China amended 
policies that are inconsistent with its WTO acc ession commitments and cancelled provisions on WT/TPR/M/264/Add.1 
Page 424 
 
 
  mandatory technology transfer when sorting out laws  and regulations shortly after its WTO accession.  
The Chinese Government has always clarified that technology cooperation and transfer are voluntary 
behaviors of enterprises and that it will not take them as preconditions for market access.   Follow-up to question 37 (WTO Secretariat's report, pages 48-49) : Could China please provide 
the names and the country of the 19 overseas ce rtifying bodies with which China has signed 
consignment agreements?   
 Answer:  So far, China has signed consignment agreemen ts in relation to certification and attestation 
with 19 institutions from 13 countries and regions,  namely, UK's ASTA-BEAB, Norway's NEMKO, 
Holland's KEMA, Sweden's INTERTEK SEMKO AB , Germany's TUV Rhine, TUV Southern 
Germany and VDE, Italy's IMQ SpA, France's UTAC ，Japan's JET and JQA, Chinese Taipei's 
ETC，Singapore's PSB Group, Malaysia's SIRIM-QAS, Hong Kong, China's CIC, STC, US's UL, 
Canada's CSA and Belgium's CEBEC. 
 
EU's initial question 37: Obtainin g CCC certification is a lengthy and costly process.  Factory 
inspections in particular are the major cost item for foreign manufacturers located outside China.  In 
the absence of sufficient trade volu mes, the costs of CCC certification cannot simply be absorbed by 
manufacturers and de facto prevent many companies, esp ecially SMEs, from doing business in China. 
What steps has China taken and / or is consid ering to reduce the costs associated with CCC 
certification?  
Reply by China: 3C system is a market access system supervised by government agencies and 
operated by 3rd party technical organizations that review  and certify products.  The main technical 
procedure includes type test, initial factory inspectio n and after-certification supervision.  Type test 
refers to the test to prove that standards and tec hnical requirements are met, after which a test report 
will be issued.  Initial factory inspection refers to site inspections of how to  ensure quality and product 
conformity conducted by certifying bodies.  After-cer tification supervision is  the annual supervision 
over enterprises and products by certifying bodies, in cluding sample tests and follow-up inspections.   
 
CNCA will consider appropriate adjustment for certain products, and for low-risk products and 
credible enterprises, initial factory inspections may involve fewer procedures to reduce costs and 
improve efficiency.  Rules on Management of Compulsory Certifi cation stipulate that, generally speaking, CCC 
Certification is issued within 90 days since acceptance.  In addition, 3C-related fees are much less 
than other similar international certifications.       China abide by WTO/TBT Agreement and Regulati ons on Certification and Accreditation of PRC, 
and China is actively promoting and allowing mutual  recognition in international product testing and 
factory inspection within the framework of multi lateral or bilateral MRAs.  China has signed 
consignment agreements with 19 overseas certifying  bodies (located in Europe, America, Japan and 
other economies) for follow-up inspections over f actories abroad.  CNCA  accepts the inspection 
reports and results of these bodies, which further saves time and costs.      
 
Follow-up to question 48 (WTO Secretariat’s report, pages 48-49):  China in its reply states that 
"systems of level III and above cover a very limited portion; foreign products will be hardly affected". 
Could China please provide a clear explanation of what systems are covered by level III, and provide 
an assessment of the market share of  the systems covered by level III – as compared to the share of 
services covered by levels I and II?    
 Answer:  In accordance with the Administrative Measur es for the Graded Protection of Information 
Security, there are five levels of protection of information security.  Systems of level 3 and above  WT/TPR/M/264/Add.1 
 Page 425 
 
 
  related to such State key infrastructures and impor tant assets as may be related to China's national 
security, public interests and social order, whic h account for a very small proportion in China's 
national information systems a nd have a very limited scope. 
 EU's initial question 48: Could China explain how  the exclusion of foreign technology and foreign 
manufacturers from information systems classified as  levels 3 and above benefits the objectives of the 
MLPS?   
Reply by China: Article 21 (1) and (2) stipulate re quirements for information security products to be 
used in information systems of Level III and above , with the aim of protecting national security and 
safeguarding security of important information syst ems, which, like relevant measures adopted by 
other members in protecting critical information infrast ructure, conforms with international practice.  
Information systems of Level III and above are critical infrastructure and important assets that concern national security, public interests and social  order, and these systems cover a very limited 
portion of all the information systems.  As RCPIS has been implemented for a short time, information 
about the information systems of Leve l III and above is limited.     
 Besides, Article 21 of RCPIS does not forbid foreign information security products from being 
applied in any of the Chinese industries, and as these systems of level III and above cover a very 
limited portion; foreign products will be hardly affected.  China has reiterated for many times that in 
indigenous innovation, intellectua l property and government procurement, all enterprises will receive 
equal treatment. 
 
Follow-up to question 68 (WTO Secret ariat’s report, page 52, para. 109) : Can China complete 
the answer to question 68 with a full text in Englis h, as the webpages to which reference is made are 
in Chinese?  
 
Answer: According to Article 4.1.6.3 of the General Standards for the Labelling of Pre-packed Food  
(GB7718-2011):  in case of imported pre-packed food, the name of the country of origin or the region 
of origin (e.g. Hong Kong, Chin a, Macao, China and Chinese Taipei ) shall be specified.  In case of 
pre-packed food imported from EU countries, the label must identify the name of the exact country 
rather than only "EU".  Chin a has notified WTO of the General Standards for the Labelling of 
Pre-packed Food (GB7718-2011) during the formula tion of these standards (with the notification 
number of G/SPS/N/CHN/206). 
 
EU's initial question 68: Can China confirm that th e indication of a completed Customs Union, such 
as "European Union"/ "EU" is accepted for the pur poses of origin labelling on  imported products? If 
not, why not?  
Reply by China: Please refer to the offici al website of the Ministry of Health 
http://www.moh.gov.cn/publicfiles//business/htmlfi les/wsb/index.htm and the TBT/SPS Enquiry 
Point http://www.tbt-sps.gov.cn/service/Pages/TBT_enquirepoint.aspx.     
 
Follow-up to question 78 (WTO S ecretariat's report, pages 61-63): China Development Bank 
(CDB) is one of the China's policy banks which o ffers export credits to the Chinese suppliers and to 
the buyer's of Chinese products and services. What is th e legal basis for overseas operations of CDB?  
Does China consider CDB an export credit agency given  that the bank can issue bonds with sovereign 
guarantees to finance its overseas operations? Do es CDB follow OECD Arrangement's "key 
conditions" in its expor t credit transactions?   
 
Answer:  China Development Bank is a commercial bank rather than a policy bank.  China 
Development Bank Corporation was officially listed in December 2008 and has explicitly stipulated 
in its articles of association that China Devel opment Bank is a commercia l bank and will operate WT/TPR/M/264/Add.1 
Page 426 
 
 
  independently and solely undertake its own prof its and losses.  As a commercial Bank, China 
Development Bank shall carry out its business in accordance with the Company Law of the People's 
Republic of China, the Law of the Peopl e's Republic of China on Commercial Banks  and other 
applicable laws and regulations as well as its artic les of association.  The Chinese government did not 
provide sovereign guarantee to China Developmen t Bank on its issue of bonds.  China Development 
Bank is a commercial bank rather than an official  export credit institution.  China Development Bank 
carries out its business as per the principles of commer cialization and stipulates at its own discretion 
the applicable loan conditions as pe r the market-oriented principles. 
 EU's initial question 78: Apart from the EXIM Bank and SINOSURE, does China have any other 
agencies or instruments providing financing linked to  exports or similar external economic activities? 
In the affirmative case, how do they operate?     
Reply by China: In addition to the Export-Import Bank, other commercial banks can also carry out 
export credit business. Commercial banks follow the principle of market-oriented operation.   
 
Follow-up to questions 80-81 (WTO Secretariat's report, pages 61-63): Does China Exim Bank 
apply the OECD Arrangement's CIRR rate also to the preferential buyer's ex port credits?  If not, how 
is the interest rate established for this particular instrument?    
 
Answer:  The conditions of preferential buyer's export cr edits adopted by China Exim Bank are jointly 
determined by the Chinese government and the government of the borrowing country through 
negotiations and the grant components comply with  the international requirements on official 
development assistance.  EU's initial questions 80-81: The Secretariat's re port states "The authorities have indicated that, 
although China is not a participant in the OECD Arrangement on Officially Supported Export 
Credits, the EXIM Bank in practice "refers to the Arrangement for key conditions of issuing export 
credit and is generally consistent w ith the basic framework of the Arrangement", and that "its lending 
interest rate is either a fixed one taking reference  from OECD-released CIRRs or a floating rate 
which is a reconciled London Inter Ba nk Offered Rate (LIBOR)".  As of the end of 2010, 55.35% of 
EXIM Bank on-balance lending was in renminbi, and the remaining 44.65% in foreign currencies.  The authorities indicate that financial institutions  set their own renminbi lending rates subject to a 
lower limit, which is 0.9 times the PBC benchmark rate." Which are the OECD Arrangement's "key 
conditions" of issuing export credits to which EXIM Bank refers in practice?      
 
As regards lending at floating interest rates, how does EXIM Bank benchmark the rate it applies 
against the market? Of which elements is the "reconciled LIBOR" composed?        
Replies by China: Although China is not a par ticipant in the OECD Arrangement on Officially 
Supported Export Credits, the key conditions of issu ing export credit of the EXIM Bank in practice 
are similar to the key conditions set forth in the Arrangement.  The key conditions on advances, 
financing ratio, repayment period, principal and inte rest payment of the EXIM Bank refers to the key 
conditions set forth in the Arrangement, and the fixe d interest rate of foreign currency loans of the 
EXIM Bank also refers to the OC ED commercial reference rate.   
 
China Export-Import Bank mainly raises credit funds by issue bonds in the market, so the rate is 
determined on the basis of debt issuance costs as re gards lending at floating interest rates.  The 
reconciled LIBOR is mainly composed of the cost  of capital, loan costs, tax costs, and risk 
compensation.   
 
Follow-up to question 115 (WTO Secretar iat’s report, page 95, para. 321):  China has asked for 
clarification of the following wording "lack of effec tive judicial verdict" in question 115.  The EU  WT/TPR/M/264/Add.1 
 Page 427 
 
 
  would hereby like to clarify that we were referri ng to the lack of consistency and recognition between 
judicial decisions taken by different courts.  Could China clarify the policy it intends to implement to 
give consistent effect between Court decisions?  
 
Answer:  China is a country with a uniform law syst em and adopts the following measures to ensure 
the consistency in law application:  1) to stipul ate several judicial interpretations and to summarize 
judgement experience in order to regulate law applic ation;  2) to promulgate typical cases and annual 
reports on cases heard by the Supreme People's Court and to guide the law application in lower 
courts;  3) to examine and hear judgment and superv ise the cases and to ensure  that retrial of cases 
related to disputes on intellectual property rights is ca rried out at least by the Higher People's courts as 
per applicable rules and regulations of the current  Chinese law on civil procedures in order to keep 
consistency in judgement;  and 4) To hold such ac tivities of different types as trainings and seminars 
in order to promote the consiste ncy in the understanding of laws. 
 
EU’s initial question 115: Can Chinese Government  ensure consistency between local trade fair 
regulations with state trade regula tions in order to guarantee that th e lack of effective judicial verdict 
against an exhibitor in a former fair will not prevail the legitimate IPR holder to go against the same 
exhibitor in a new fair, especially if both fairs are only few months apart?       
Reply by China: Please clarify what "lack of effectiv e judicial verdict" means in the question.  If it 
refers to the situation that a case is in court pro ceeding and has not been concluded with an effective 
judicial verdict, according to Article 17 and 20 of  Measures for the Protection of Intellectual Property 
Rights in Exhibitions, in the event that a disput e between a right holder and an exhibitor is under 
judicial proceeding, if the right holder complains and requests for administrative remedy against the same exhibitor in a new exhibition, local IPR o ffice and administration for industry and commerce 
would not accept the complaint and take actions. 
 
Follow-up to question 120 (WTO Secretariat’s report, page 103, para. 14):  The EU would 
appreciate additional explanations from China regardi ng the interim purchasing price:  would the 
interim purchasing price equal the market price or does it take into account production costs?     
 
Answer:  The interim purchasing price is set according to the costs to farmers of growing grain with 
reference to market price. 
 
EU's initial question 120: The Secretariat's report st ates that apart from minimum purchase prices for 
rice and wheat, China also uses government tempor ary purchasing and stockpiling for some other 
commodities. How are the prices at which pr oducts are bought into temporary stockpiling 
determined?      
Reply by China: Interim purchasing price is set a ccording to the costs to farmers of growing grain 
with reference to market price.    
 Follow-up to question 144. a (WTO Secretari at's report, pages 126-127, para-s 111-116):  China 
has provided a reply on the approval process fo r processing the applications for establishing 
securities companies and fund management companies.  Is there a similar process established for 
other banking operations? Could China please clarify? 
 
Answer:  Because of the exogenous risk borne by fi nancial institutions, their business failure will 
produce great impact on the public.  Therefore, a professional regulation shall be implemented on these institutions and different restrictions from t hose on industrial and comm ercial enterprises shall 
be given when the financial license is issued.  Acc ess conditions shall be reasonably set for investors 
of financial institutions in order to have powe rful and experienced investors take part in the 
establishment of financial institutions, which is a prerequisite for maintain ing financial order and WT/TPR/M/264/Add.1 
Page 428 
 
 
  safeguarding public interests, helps to establish a sound internal control and risk management system 
right after a new institution is founded.  This is of  great benefit to institution’s customer cultivation, 
business development and risk control as well as market stabilization.  
 
Administrative License Law which came into for ce on 1 July 2004 stipulates that administrative 
organs shall implement administrative permission in accordance with the principles of openness, 
fairness and impartiality.  Administrative organs shall enact and implement administrative permission on the basis of statutory limits of authority, scope, conditions and procedures.  China Banking 
Regulatory Commission will, in a fair and transparen t way, examine and approve the application for 
license submitted by the regulated institution in  accordance with the Ma nagement Measures for 
Administrative Licensing and will reply the applying institution within the time stipulated in the Measures . 
 Continue to optimize the mechanism and method for administrative examination and approval, adhere 
to a combination of prudence and efficiency and provide service while implementing regulation.  To 
solve various problems in the existing mechanism, key issues to be checked on and responsibilities to 
be assumed shall be clearly defined in different pr ocedures of market access, and the requirements for 
procedure and time limit shall be strictly abided  by in order to ensure a clear division of 
responsibilities, a smooth procedure implementation, a timely manner and high efficiency.  
 
EU's initial question 144. a: As the Secretariat' s report points out, the licensing requirements and 
procedures are very divergent and there is no umbrella license or single point of contact in China for 
financial institutions.  In this regard, could China provide information:  a) Are there any advances in 
speeding up and making more transparent the approv al process (CBRC, PBOC, SAFE, CSRC)?    
 
Reply by China: Pursuant to Administrative Licen se Law, Securities Law, Se curities Investment Fund 
Law, the approval process and time limit for processi ng the applications for establishing the securities 
company and fund management company are specifically stipulated.  From March 2010, the CSRC disclosed the status of application acceptance and ve rification on its official website, and the specific 
verification process for establishing fund management  companies are also publicized by the CSRC in 
this April. In sum, the approval process is already transparent.  
 
Follow-up to question 144. b (WTO Secretariat's report, pages 126-127, para-s 111-116):  As 
regards possibilities of increasing cooperation am ong the different regulatory authorities, could 
China clarify whether it intends establishing a single point of contact?    
 
Answer:  In recent years, China has conducted active e xplorations in establishing and improving the 
financial and regulatory coordination system.  Since 2008, the State Council has established the 
system of financial periodic meetings which is presided over by the Vice President of the State 
Council in charge of financial business, attended by the persons in charge of such authorities as the 
People’s Bank, CBRC, CSRC, CIRC and SAFE.  The meetings deal with such matters related to the 
significant issues in the financial sector as in formation communication, situation analysis, 
countermeasure study and coordina tion among different departments.  Under the uniform arrangement 
by the State Council, such macro-control author ities as the People's Bank, SDRC and MOF and the 
financial regulatory agencies strengthen their coordi nation in relation to such aspects as formulating 
and implementing currency policies and credit polici es, promoting financial reforms, maintaining 
financial stability and sorting out and sharing fina ncial information.  The People's Bank has, as a 
leader, established the information sharing system among PBC, CBRC, CSRC and CIRS.  According to the "12
th Five-Year Plan", the People's Bank, the fina ncial regulatory agencies and other competent 
departments will further improve the system of financial regulatory coor dination and information 
sharing and constantly increase th e efficiency of regulation.  WT/TPR/M/264/Add.1 
 Page 429 
 
 
  EU's initial question 144. b: What are the possi bilities of increasing cooperation among the different 
regulatory bodies and creating a government authority to coordinate the different offices, and in 
particular has China considered establishi ng a single point of contact?     
 Reply by China: China attaches great importance to the regulatory cooperation among the different 
regulatory bodies.  After several years’ efforts,  the relevant authorities have already set up a 
coordination system based on the principle of di vision with individual responsibility and mutual 
coordination, to facilitate the regulatory cooperati on in the financial industry, which can be summed 
up as follows:    
 First, we have established a regul ation and coordination system at the level of the State Council and 
senior financial supervisors have researched, di scussed, analysed and demonstrated major urgent, 
important and strategic events and issues in th e macro-economy and finance sectors, effectively 
facilitating the information communication, coor dination and cooperation among various financial 
regulators.  
 Second, the financial regulators at various le vels have signed memo randum of understanding on 
regulation cooperation.  In June 2003, the Me morandum of Understanding on the Regulatory and 
Supervisory Responsibilities was signed by the CBRC,  the CSRC and the China Insurance Regulatory 
Commission (CIRC), and the Memorandum of Unde rstanding on Strengthening In-depth Cooperation 
and Inter-industry Regulation C ooperation in Banking and Securities Industries was signed by the 
CBRC and the CIRC in 2008.   Third, we promote information sharing.  In 2005, the CBRC, the CSRC, the CIRC and the People's 
Bank of China jointly set up a system of financial st atistical information and sharing, and formulated 
the Interim Measures of the CBRC, the CSRC, the CIRC and the People's Bank of China for 
Information Sharing which stipulates the contents , ways, working mechanism and the responsibilities 
of all departments concerned of information sharing.   The dispatched organs in various regions under 
the CBRC and the People’s Bank of China established an information sharing mechanism in 2009.  
 
Nevertheless, we are fully aware that the issue of regulation coordination and cooperation remains a 
worldwide regulatory difficulty.  The Chinese fi nancial regulators will, based on existing 
achievements, further strengthen the building of various coordination mechanisms, boost the 
cooperation among all parties concerne d and facilitate the steady developm ent of financial industries.   
 
Follow-up to question 145 (WTO Secretar iat's report, page 127, para. 115):  China informs that 
its financial regulatory authorities still need time to evaluate the result of the experiment allowing 
commercial banks to establish fund management com panies before deciding on what is the next step 
for the further liberalization of this business.  Is there a time framework envisaged for this 
evaluation?  
 Answer:  Currently, some commercial banks are perm itted to establish fund management companies 
on a trial basis.  The People's Bank and the financia l regulatory authorities still need time to evaluate 
the result of the pilot projects allowing commercia l banks to establish fund management companies 
before they can decide on what next step to be taken for the further liberalization of this business. 
 EU's initial question 145: During the last TPR in 2010, China announced that the financial 
regulatory authorities still needed time to evaluat e the result of the pilot of allowing commercial 
banks to establish fund management companies before deciding on what is the next step for the further liberalization of this busin ess.  Have the Chinese Authorities as sessed the situation and when 
is China going to allow foreign banks to establish fund management companies?     WT/TPR/M/264/Add.1 
Page 430 
 
 
  Reply by China: Currently, some commercial ba nks are allowed to establish fund management 
companies on a pilot basis.  The financial regulatory authorities still need time to  evaluate the result of 
the experiment and the current market  situation before deciding on what is the next step for the further 
liberalization of this business.  
 
Follow-up to question 146 (WTO Secretariat's report, page 128, para. 121):  China noted that its 
banking sector is still under-developed.  The EU does not understand how market access limitations 
like equity caps in the banking sector will help this sector to develop.  Could China elaborate on this 
point?  Please explain how China sees the role of equity caps as a prudential measure to protect 
investors, depositors and the integrity and stability of the financial system.   
 
Answer:  GATS annex on the financial services clearly st ate that members shall have the right to 
adopt measures in order to protect investors and depositors or to ensure a complete and stable 
financial system due to prudential reasons.  China ma de a special explanation on this issue during the 
previous reviews and we are willing to explain ag ain the issue of stockholding limit in the banking 
industry.  China has adopted this measure mainly due to the following two reasons: one is that the 
Chinese-funded banks are still in their initial stage of  introducing foreign investors and it will take 
time for both Chinese and foreign parties to achieve sound cooperation.  The other reason is that the 
international financial situation rema ins in unrest, and that the financial crisis reveals the drawbacks in 
global financial system in terms of risk manage ment and operation mode.  The necessary supervision 
is implemented with the aim of protecting the inte rests of depositors and guaranteeing the stability of 
financial order.  Of course, the supervision department of the banki ng industry in China will continue 
to guide banks both foreign- and Chinese- funded to  extend the breadth and depth of their cooperation 
so as to promote mutual development.  
 
EU's initial question 146: According to Art XVI.2  (f) of GATS, quantitative limitations on foreign 
ownership need to be listed.  China has not lis ted foreign equity caps for financial institutions; 
however, as confirmed during last TPR by China, no single fore ign financial institution may own 
more than 20% of the equity of a Chinese financial in stitution.  When is China planning to eliminate 
the violation of its WTO commitments and permit full foreign ownership of Chinese banks?     
 Reply by China: According to Ch ina's Services Schedule, qualified fo reign financial institutions are 
allowed to establish wholly foreign-owned banks, including subsidiaries and branches.  However, 
China did not make commitments on the acquisition of existing domestic bank s by foreign financial 
institutions.  Nevertheless, China has decided to allow foreign investors to acquire equities of 
Chinese-funded banks up to a certain level on the vol untary basis.  According to the Measures on 
Administration of Equity Investment of Overseas Financial Institutions in  Chinese-funded Financial 
Institutions, the percentage of equity investment of a single overseas financial institution in a Chinese-
funded financial institution may not exceed 20%.  This practice is not in violation of China’s WTO 
commitment.   
Furthermore, China's banking market is still under-devel oped.  With the international financial crisis 
not being out of the scene, we have to be cautious  in further liberalizing China's banking market.  On 
the other hand, such measure is within the meani ng of the "prudential measures" provided for in the 
Annex on Financial Services under the GATS, the im plementation of which is for the purpose of the 
protection of investors, depositors and ensuring the in tegrity and stability of the financial system.     
 Follow-up to question 147:  The current policy with respect to data processing in China implies that 
only IT-onshoring of data ensures individual privacy, data protection and financial information security without taking into account on whether conditions in other countries ensure similar 
objectives.  Could China provide a rationale for this policy?     
  WT/TPR/M/264/Add.1 
 Page 431 
 
 
  Answer:  China has given explicit answer on Question 147 .  The issue mentioned in Question 14 that 
"without taking into account on whether conditions in other countries ensure similar objectives" may 
be considered and settled throug h negotiations by the regulatory in stitutions of the countries under the 
coordination mechanism among countries. 
 In addition, according to the pr ovision of "General Exceptions" in Article XIV of GATS, member 
states may implement the laws and regulations no t in conflict with GATS, including the laws and 
regulations on anti-fraud and counterfeiting acts or disposal of breaching service contracts, protection 
of personal privacy and disposal a nd expansion of personal materials and security questions related to 
the protection of personal records and accounts.  Currently, China has not signed any memorandum 
with foreign countries and regions in  relation to data protection and cr oss-border data transfer and has 
no legal basis for the requirements on ensuring info rmation security and privacy security.  Apart from 
these, China has no regulatory requirements on such  aspects as information security, protection of 
personal data and materials and da ta outsourcing.  Where the RMB bank card system of any foreign-
invested banks is established outside China, ther e are legal risks involved in the supervision and 
inspection conducted by Chinese regulatory authorit y on such bank card system and the cross-border 
access of trading data, which is not good for the effective supervision on such system. 
 
EU's initial question 147: Another important issue not  directly mentioned in the report, but raised 
during the previous TPR is the fact that China has  introduced a requirement for IT-onshoring (all 
data handled by the bank needs to be physically kep t and processed in China) for commercial banks. 
This requirement goes considerably beyond the ca tegory of "settlement and clearing services for 
financial assets", which China's had not committed and is covered by China's GATS commitments on 
data transfer and processing.  When is China planning to eliminate the violation of its WTO commitments and allow data transfer and processing other than settlement and clearing services for 
financial assets?     
 
Reply by China: Pursuant to the Article XIV of  GATS, WTO members shall be entitled to adopt and 
enforce related laws and regulations for the protecti on of the privacy of individuals in relation to the 
processing and dissemination of personal data and th e protection of confidentiality of individual 
records and accounts, subject to the consistency w ith the provisions of GATS and the requirement that 
such measures are not applied in a manner which would constitute a means of arbitrary or 
unjustifiable discrimination between countries where lik e conditions prevail, or a disguised restriction 
on trade in services.  This practice is not in relation of China's WTO commitment.    
In consideration of individual privacy, data prot ection and financial information security as well as the 
prudential requirements on regulators, China has formulated related policies to attach great 
importance to and stipulate specific requirements on information security, data confidentiality and 
other issues.  For instance, the Electronic Paymen t Guidelines (No. 1) (Announcement of the People's 
Bank of China, [2005] No.23), the Guiding Opinions of the People's Bank of China on Further Strengthening Insurance of Information Security of Banking Financial Institutions (Yin Fa [2006] 
No. 123), the Notice of China Banking Regulatory Commission on Solely Foreign-funded Banks and 
Sino-foreign Equity Joint Banks to Engage in th e Bank Card Business (Yin Jian Fa [2007] No. 49) 
and other rules and regulations explicitly stipulat e requirements on establishing data systems within 
China by the institutions engaged in domestic bank card business.  Therefore, the policies on 
establishing important financial data processing sy stems within China have been explicit and 
consistent, without any change.  At the same time, the requirements on establishing data systems 
within China have equally applied to Sino-funded  and foreign-funded ins titutions, and there have 
been no discriminatory treatment to foreign-funded banks. 
 
Follow-up to question 156.a (WTO Secretariat's report, page 154, para. 246):  The EU 
understands that under the new "Administrative Measures on the Direct Access and usage of Foreign 
Computer Reservation System by Foreign Aviation En terprises' Sale Agents within China" foreign WT/TPR/M/264/Add.1 
Page 432 
 
 
  CRS do not need an (operating) licence to offer their cross-border services to foreign airlines and 
their sales agents (mode 1).  Is this correct? 
 Answer:  As per China's accession commitments, forei gn aviation enterprises' sale agents shall not 
directly get access to and use foreign computer reservation system without prior approval of CAAC.  In accordance with the Interim Ad ministrative Measures on the Direct Access and Usage of Foreign 
Computer Reservation System by Foreign Aviation Enterprises' Sale Agents within China (the "Interim Measures"), foreign aviation enterprises shall, as the applicant, submit to CAAC the 
application regarding the direct access and usage of  foreign computer reservation system by their sale 
agents within China, and providers of forei gn computer reservation system shall meet the 
requirements set forth in the Interim Measures on th eir qualifications and comply with the Interim 
Measures. 
 
EU's initial question 156. a: Could China clarify th e following questions on the provision of computer 
reservation system services:  Under the current le gal regime do foreign CRS require an approval to 
provide their cross-border services (mode 1) to Chin ese and foreign airlines and their sales agents?  
 
Reply by China: According to  China's accession commitment, Foreign CRS could provide 
cross-boarder service in three ways listed below:   
a. foreign CRS, when having agreements with Chinese aviation enterprises and Chinese CRS, 
may provide services to Chinese aviation en terprises and Chinese aviation agents by 
connecting with Chinese CRS,    
b. Foreign CRS may provide services to representative offices and sales offices established in 
the destination cities in China by foreign avia tion enterprises which have the right to engage 
in business according to the bilateral aviation agreements.     
c. Direct access to and use of foreign CRS by Chinese aviation enterprises and agents of foreign 
aviation enterprises are subject to approval of the General Administration of Civil Aviation of China (CAAC).  
 As regard to the issue of direct access to and use of foreign CRS by agents of foreign aviation 
enterprises referred in China's co mmitment, CAAC is in the process of drafting and reviewing the 
Provisional Approval and Administrative Measures on the Direct Access and Usage of Foreign Computer Reservation System by Foreign Aviation En terprises' Sale Agents within China, and the 
draft of this Measure has been submitte d to the CAAC for final approval.   
 
Follow-up to question 156.b  (WTO Secretariat's report, page 154, para. 246):   IATA China has so 
far refused foreign CRS to participate in the Chi na BSP on the basis that Chinese law would require 
foreign CRS to obtain an (operating) licence wh en offering cross boarder services (mode 1).  Can 
China confirm that under current Chinese law and und er the future legislation (see above a)) foreign 
CRS do not and will not need an (operating) licence when offering cross-border services (mode 1)?   
a. What does China mean by "relevant rules" in order to process the application of a foreign 
CRS to provide their services?      
 
Answer:  According to the Interim Measures, the designa ted sale agents of foreign aviation enterprises 
within China may directly get access to and use foreign CRS and make reservation or issue tickets 
through the foreign CRS after obtaining license.  Where providers of foreign CRS intend to 
participate in Chinese BSP, the Chinese BSP committee shall pass th e resolution and the resolution 
shall be followed.  
EU's initial question 156.b: Do foreign CRS need a licence to participate in IATA's Billing and 
Settlement Plan (BSP)?  
  WT/TPR/M/264/Add.1 
 Page 433 
 
 
  Reply by China: Billing and Settlement Plan (BSP)  is the system set up by IATA for aviation 
enterprises and sales agents using neutral ticket to realize sales and settlement.  The application of 
CRS service providers to participate China BSP system shall be processed by Chinese BSP Council 
according to the relevant rules.    
 Follow-up to question 156.c (WTO Secreta riat's report, page 154, para. 246):  China's answer 
refers to the "establishment of a commercial pr esence in China" (mode 3).  Could China please 
respond to the question in relation to the provision of "cross-border services" (mode 1) as specified 
under item C) of China's specific accession commitment s ("direct access to and use of foreign CRS")? 
 Answer:  According to Item C of Mode 1, Chin ese aviation enterprises’ and foreign aviation 
enterprises' agents shall not directly get access to  and use foreign CRS without prior approval of 
CAAC.  In 2002, CAAC cancelled the administrative license related to the direct access to and usage 
of foreign CRS by Chinese aviation enterprises.  The direct access to and usage of foreign CRS by 
foreign aviation enterprises' agents shall be govern ed with reference to the Interim Administrative 
Measures on the Usage of Computer Passengers Rese rvation System by Foreign Aviation Enterprises 
and Their Sale Agents within China (Min Hang Y un Fa [1995] No. 51).  The Interim Measures which 
will be promulgated soon will supersede the ad ministrative measures and the normative document 
will be upgraded to be a departmental rule. 
 
EU’s initial question 156c: If a licensing requirement for foreign CRS exists, what are the conditions 
to be fulfilled? 
 
Reply by China: Please refer to the answer for qu estion (a). China didn't make any commitment for 
foreign enterprises to establish commercial presence in China when acceding WTO, and CAAC hasn't 
received any establishment application from foreign CRS.     
 
Follow-up to question 156.e (WTO Secretar iat's report, page 154, para. 246): 
a. Could China please specify the date when th e new Measure will be promulgated? From 
which date on will the new Measure apply?     
b. Could China provide a draft on the additional technical standards and operational 
requirements which are to be accomplished in the second half of this year?     
 
Answer:  The meeting of CAAC has examined and passed the Interim Measures.  The effective date 
of a rule will be stipulated in its supplementar y provisions, which is normally a date after 30 days 
from the promulgation date of the rule.  China is also drafting the technical standards and operation 
requirements on CRS.  
EU's initial question 156.e: When will the new regula tions be enacted?  Will the new regulations be 
accompanied by implementing rules and, if yes, when would these enter into force?     
 
Reply by China: CAAC has begun drafting and reviewing the Provisional Approval and 
Administrative Measures on the Direct Access and Usage of Foreign Computer Reservation System 
by Foreign Aviation Enterprises' Sale Agents in Chin a, and this Measure has stepped into the phase of 
legislative review since August 2011.  Currently, the draft of this Measure has been submitted to the 
CAAC's board of administration affairs for further review, and after the approval, the Measure will be 
finally promulgated.   
 In order to facilitate the issue of this Measure a nd increase its operability, CAAC is working hard on 
drafting relevant technical standards and operational requirements, so as to facilitate foreign CRS to 
build systems containing sales agency information related to booking and billing, flight information 
and passenger information.  All the above mentioned standards are expected to be accomplished in the 
second half of this year.  WT/TPR/M/264/Add.1 
Page 434 
 
 
   
Follow-up to question 156.f (WTO Secretariat's report, page 154, para. 246):  China states that 
"the providing of CRS service is under the author ity of several administrations."  Does the EU 
understand correctly that under neither of these several administrations foreign CRS are required to 
obtain a licence in order to provide their cross-border services to foreign and Chinese airlines and their sales agents?   Answer:  Foreign aviation enterprises shall, as the applicant, submit to CAAC the application 
regarding the direct access and usage of foreign computer reservation system by their sale agents 
within China, and providers of foreign computer reservation system shall meet the requirements set 
forth in the Interim Measures on their qualificati ons and comply with the Interim Measures. In 
addition, providers of online cross-border services shall consult with competent authorities as to 
whether the approvals of other authorities are re quired for foreign CRS to provide cross-border 
services through network. 
 
EU's initial question 156.f: Since Chinese airlines can directly access and use foreign CRS, does this 
mean that foreign CRS do not need any further operating license?    
 
Reply by China: The providing of CRS service is under the authority of several relevant 
administrations.  CAAC is the competent authorit y on CRS service market, besides, the relevant 
electronic information affairs are regulated by in formation department, th e relevant information 
security affairs are regulated by public security depa rtment, and the relevant registration, supervision 
and tax collection affairs for CRS enterprises are respectively regulated by the SAIC, tax 
administration and etc.  
 
II. Additional question   
 
III. TRADE POLICIES AND PRACTICES BY MEASURE     (1) MEASURES DIRECTLY AFFECTING IMPORTS     (iii) Indirect taxes affecting imports      
 
WTO Secretariat's report, page 33, para. 13  
 
The Secretariat's report states that the rates for VAT and excise taxes are generally the same for 
imports and domestically produced goods.  However Circ ular of the Ministry of Finance and the State 
Administration of Taxation on the value-added tax emption for home-made regional aircraft 
[Caishui 2000 n°51] provides for a preferential value added tax regime on domestically produced 
regional aircraft.  The Circular explicitly refers  to "the purpose of promoting the production and 
operation of China made regional aircraft" and states  that "a preferential value added tax shall be 
exempted on regional aircraft for sale".  This seems to be a straightforward case of discrimination against foreign-produced regional aircraft which are subject to 17% VAT.      1. Could China please explain?  The EU would also be pleased to learn when China intends to repeal this discriminatory treatment.      
 
Answer:  We took note of EU's concern on this policy.   We will contact competent authorities to 
verify the allegation made by EU in connection with relevant WTO rules.  
   WT/TPR/M/264/Add.1 
 Page 435 
 
 
  JAPAN 
 
WRITTEN FOLLOW-UP QUESTIONS BY JAPAN 
 
Question 6 (Paragraph 80, page 45) 
 
Japan appreciates China's answer about the "Noti ce on Strengthening Network Access Management 
of Mobile Smart Terminals" ("Notice").  Japan would like to confirm that as the answer which 
mentions the Notice doesn't add any new certificati on or administrative appr oval, this means the 
Notice doesn't require any disclosure of t echnological information of manufacturers. 
 
Answer:  The Notice was proposed in accordance with th e Regulations on Telecommunications of the 
People's Republic of China and the Measures for the Administration of Telecommunication 
Equipments Entering into the Public Telecommuni cation Networks to suppl ement and improve the 
existing administration of mobile smart termin als entering into the public telecommunication 
networks instead of establishing a new supervision and regulation framework and an administration 
system and adding new certification or administrative approval.  Where a manufacturer applies for the network access license of smart terminal, it shall give explanations on the operating system, preset application software and provider as well as other information in the product introduction materials. 
Such information doesn't involve the intellect ual property rights and business secrets of the 
manufacturer.   
Also, Japan understands Article 3 of the "Notice"  prescribes that manufacturers of mobile smart 
terminals shall not offer software under the subparagr aphs of the same Article in a manner of preset 
or other ways.  Japan would like China to explain  the meaning of "preset or other ways" in this 
context. 
 
Answer:  "Preset or other ways" mean that manufacturers shall not pre-install the application software 
in nature provided in the Article hereof in the mobile smart terminals and shall not install the 
application software in nature provided in the Article hereof by containing CD and other storage 
media in the packaging box, providing downloa d link on the website or in other ways.  
 
Question 7 (Paragraph 80, page 45) 
 The SFDA showed its preference for bilateral technical exchanges.  The Government of Japan 
understands that the SFDA prefers a dialogue betw een competent authorities who are responsible for 
safety examination.  We share the importance of su ch a dialogue.  However, this policy is considered 
to be trade-restrictive rather than having the intend ed effect: to improve public hygiene by ensuring 
the safety of new ingredients.  Japan considers the best way to evaluate the safety of  cosmetic ingredients is, based on international 
safety management practices in many economies su ch as Japan, the European Union and the US, to 
carry out testing with the same substance as that used in the finished products.  We would like to 
invite China to thoroughly provide scientific grounds wh y exclusion of solvents, etc., is indispensable 
for safety evaluations and the risk that will occur without the exclusion of solvents, etc., and provide 
us with some specific examples that support the grounds for risk.    
 Answer:  Regarding issues of plant extract ingredients and compound ingredients, the Guide to 
Registration and Evaluation of New I ngredients for Cosmetics stipulates that "ingredients shall not be 
compounded except indispensable solv ents, stabilizers and carriers due to technical reasons".  Japan 
misunderstands this provision.  China advises Japan to have further communications with technical 
experts to get correct understanding and interpre tation instead of discussing professional technical 
issues through trade policy review mechanism or  regular WTO/TBT meeting by non-professionals.  WT/TPR/M/264/Add.1 
Page 436 
 
 
   
Question 16 (Paragraph 121, page 55) 
 
What are the qualifications of approval for forei gn professionals to participate in the constructor 
exam?  
 
Answer:  Pursuant to the provision that "the administrative construction authorities under the State 
Council exercise unified supervision and administra tion on construction activities in China" specified 
in the Construction Law of the People's Republic of China, the Interim Provisions on Professional 
Qualifications of Constructors e xplicitly provides that qualified forei gners approved to be engaged in 
the construction and management of constructio n projects within the territory of China may 
participate in the constructor exam and apply for registration and that the departments of housing and 
urban-rural development are responsible for th e administration of professional registration.  
 Question 16 (Paragraph 121, page 55) 
 
Does the fact that there have been no foreign prof essionals who participated in the exam imply that 
there have been no cases in which they obtaine d approval from the relevant authority?  
 Answer:  Confirmed by relevant competent authorities and according to latest statistics, two foreign 
professionals participated in the constructor exam  and one foreign professional obtained the approval 
from the relevant authority.   
Question 26 (Paragraph 278, page 87, AII.1 China's major trade-related laws and regulations, 
September 2011, page 190) 
 
Could China clarify that Article 355 of the Contra ct Law is not applied to know-how contracts 
between Chinese entities with regard to Chinese indi genous technologies which are not related to 
technology import/export nor related to patent/patent application contracts?  
 Answer:  As stipulated in Article 355 of the Contract Law, where the relevant laws or administrative 
regulations provide otherwise in respect of technol ogy import/export contracts or in respect of patent 
contracts or contracts for patent application, such  provisions shall prevail.  This is a bridging 
provision on the applicability of laws on technol ogy import/export contracts, patent contracts or 
contracts for patent application.  Pursuant to the provision, relevant provisions of the Contract Law 
are applied to technical transfer contracts not belong to technology import/export contracts, patent 
contracts or contracts for patent application, or technical transfer contracts belonging to technology 
import/export contracts, patent contracts or contracts without relevant provisions in relevant laws and 
regulations.  
 
Question 35 (Paragraph 313, page 93) 
 
Article 46 of the draft amendment of Copyright Law stipulates that, after the expiration of a period of 
three months from the date of such first sale, a person can make a sound recording of a musical work 
that has been already recorded on phonograms without the authorization of the copyright owner.  In 
this regard, Japan requests China to clarify whet her such phonograms are limited to those made and 
sold in China, or such phonograms also include ones made and sold in countries other than China 
after an expiration of a period of three months?   Japan also requests China to clarify that the fo llowing understanding is correct:  Where a person 
makes such phonograms using an imported master record which was first sold in a country other than 
China, Article 46 does not apply to such phonograms.   WT/TPR/M/264/Add.1 
 Page 437 
 
 
  Answer:  With respect to the issues of relevant provis ions in the draft of the new Copyright Law, 
considering the draft amendment of Copyright Law is subject to further discussion and opinion 
solicitation, the abolishment of Artic le 46 is not determined, and the specific applicable rules are also 
yet to be determined, China believes it is not pr oper to further discuss relevant details under the 
framework of WTO trade policy review and advises Japan to have communications on this issue 
through other channels.   
Question 42 (Paragraph 39, page 107) 
 
Japan thanks China for its answer to Q42, but the last DS notification by China (G/AG/N/CHI/21) 
does not show the breakdown figures by item on b) Public stockholding for food security purposes 
(ST-DS:1).  Could China provide (a) the target st ock amounts, (b) the actual stockpile amounts, (c) 
purchase prices and (d) purchase amounts by item (whe at, rice, corn, vegetables, oils, sugar)?  Also, 
the ST-DS:5 in the same notification shows the administered price and purchase amounts of wheat 
and rice under the Minimum Procurement Price Scheme.  Are they part of the "Public Stockholding 
for food security purposes" or different programs?  
 
Answer:  Relevant figures in the last DS notification by China (G/AG/N/CHI/21) are consistent with 
relevant WTO rules and requirements.  Meanwhile, the latest DS notification is being prepared.  
 Question remained to be replied (origina l question 13) (Paragraph 116, page 54)  
 
Japan would like China to explain Chinese SOEs' status of 'not being controlled by the 
Government' in terms of government involvement in appointment of the SOE directors and managers.  
 
Answer:  According to the Law of the People's Repub lic of China on the State-Owned Assets of 
Enterprises, the Interim Regulations on Supervis ion and Management of State-owned Assets of 
Enterprises and other laws and regulations, the SASAC performs its duties as a contributor in 
accordance with law and doesn't in tervene into the independent le gal operation by enterprises in 
accordance with the principles of separation of enterprise from administration, separation of 
administration from assets and separation of ownership from operational right.  The SASAC 
dispatches directors to enterprises under its supervis ion and assess the performances of the directors in 
terms of professional ethics, duty performance capabi lity, diligence, work results and clean-fingered 
work.  Directors and managers perform dutie s in accordance with the Company Law and 
independently make commercial judgments by vi rtue of their professional competences and in 
accordance with actual conditi ons of the enterprises.  
 
IV. TRADE POLICIES BY SECTOR     (5) SERVICES (ix) Logistics services 
(g) Regulatory framework 
 Additional question 1 (Paragraph 358, page 176)  
 
Even as logistics service suppliers try to do f reight transportation business directly through the 
Ministry of Railways, on a practical  level, it is necessary that they c ontact designated agents.  Is there 
any example of foreign logistics service suppliers being designated as agents?  Moreover, what are 
the criteria for designated agents?  
 
Answer:  The Ministry of Railways has not designate agents of freight transportation.  
  WT/TPR/M/264/Add.1 
Page 438 
 
 
  MEXICO 
 
1. Could China give an update of the current state of implementation of its Authorized Economic 
Operator Program (the name of the AEO in China is  "AA Class Enterprises"), as well as the relevant 
publications/websites indicating the applicable requirements for applicants?  
 
Answer:  The Measures of the Customs of the Peopl e's Republic of China for the Classified 
Management of Enterprises coming into force on 1 Ap ril 2008 (hereinafter referred as "Classification 
Measures") and supporting regulatory documents include the entity requirements, certification 
procedures and trade facilitation measures of AEO sy stem concerning law compliance, trade security 
and partnership between customs and enterprises and specifically translate AEO system into a 
domestic system.  According to enterprises' observa nce of laws, administrative regulations, customs 
regulations and relevant regulations on clean  governance and their management and operation 
conditions as well as the records of customs superv ision and statistics, AA, A, B, C and D five 
management classes are set in the Classification M easures based on the degree of law compliance and 
credit standing from high to low, and correspon ding differentiated management measures are 
formulated in the Classification Measures for en terprises with different management classes in 
accordance with the principles of law observance a nd convenience.  The applicable standards and 
conditions for AA Class Enterprises are consistent with relevant AEO requirements of the World 
Customs Organization.  AA Class Enterprises are AEO enterprises of the Chinese customs with 
corresponding applicable custom s clearance facilitation measures.   The implementation of the 
Classification Measures  and supporting measures marks the beginning of the execution phase of the 
Chinese customs' AEO system.   The newly-amended Classification Measures (Shu Ling No. 197) were promulgated on 
15 November 2010 and came into force on 1 Janua ry 2011.  The amended Classification Measures 
lower the access scale threshold of  AA Class Enterprises and offer customs clearance facilitation to 
more enterprises with high credit standing. M eanwhile, the Assessment Report on Enterprises' 
Operation and Management Conditions attached to the Classification Measures was also amended to 
supplement and improve contents concerning inte rnal control management and trade security.  
 
Please visit www.customs.gov.cn (portal website of th e China Customs) for details of the amended 
Measures of the Customs of the People's Republic  of China for the Classified Management of 
Enterprises (Shu Ling No. 197).   En el párrafo 102 menciona China que en el Comité  de Medidas Sanitarias y Fitosanitarias de la 
OMC, otros Miembros han manifestado preocupac iones comerciales respecto de medidas adoptadas 
por China. En relación con la preocupación espec ífica manifestada por México sobre la regulación 
sanitaria GB 2757 – XXXX que regula los niveles de Metanol de diversas bebidas alcohólicas entre ellas del Tequila mexicano indicar:       
21. ¿Cuándo se adoptó y a través de  qué instrumento la legislación sanitaria de referencia?     
22. ¿Cuál es el nivel de Metanol aplicable al Tequila que impone dicha regulación?   
23. ¿Cuáles son los argumentos científicos que se tomaron como base para limitar el nivel de 
Metanol en las bebidas alcohólicas, específicamente del Tequila?     
24. ¿Se ha realizado un análisis de riesgo que apo ye la imposición del límite de niveles de 
Metanol del Tequila en dicha regulación sanitaria?     
25. ¿Prevé dicha regulación otorgar un periodo de transición para aplicar a los Miembros su 
regulación sanitaria, y en su caso cuál es el periodo? 
 
Answer:  We have provided detailed inform ation about the above questions in the advance replies.  It 
is suggsted that Mexico could have  negotiations with China in other ocassions if they still have any 
doubt in technical respect.  WT/TPR/M/264/Add.1 
 Page 439 
 
 
   
 
UNITED STATES 
 SECRETARIAT'S REPORT 
 SUMMARY  
 
In U.S. question 1, we had noted that, in its Pr otocol of Accession, China committed to provide a 
reasonable period of comment to the appropriate authorities before laws, regulations and other 
measures are implemented, subject to limited ex ceptions.  We then asked China to comment on a 
study conducted by the U.S.-China Business Council that  found that only 3 out of 9 trade-related laws 
and only 49% of trade-related regulations and de partmental rules had been circulated for public 
comment during the period from March 2011 to Ma rch 2012.  China's response was two-fold.  First, 
China asserted that it had made no commitment to  solicit public comment on trade-related laws, 
regulations and other measures.     Second, it maintained that since July 2011 it h ad published all trade-related regulations and 
departmental rules for public comment.  We find it puzzling that China would claim that it made no 
commitment to solicit public comment, and we would refer China to paragraph 2(C)2 of Part I of its 
Protocol of Accession.  We would also ask China to clarify its statement that it has solicited public 
comment on all trade-related regulations and departm ental rules since July 2011, given that this 
statement is contradicted by the results of th e U.S.-China Business Counc il study as well as an 
independent review conducted by the United States.  In addition, we note that China did not respond 
to the part of our question addressing trade-related  laws, and we would therefore ask that China 
provide a response on that front as well.     
 
Answer:  China made no commitment to promulgate dr afts of laws, regulati ons and departmental 
rules for public comment at the time of access to WTO.   According to paragraph 2(C)2 of Part I of its 
Protocol of Accession, China will provide a reasona ble period between the time of promulgation and 
the time of implementation of all of such laws, re gulations and other measures as may be related to or 
affect goods trade, service trade, TRIPS or foreign ex change control so that any individual, enterprise 
and other WTO member may comment.  Under this provision, there must be a reasonable period 
between the time of promulgation and the time of im plementation of the final versions (other than 
drafts) of relevant laws, regula tions and other measures so that  no laws, regulations and other 
measures may be implemented immediately after promulgated.  After China's access to WTO, China 
has always been strictly complying with the commit ment. In addition to this commitment, China also 
adheres to the principle of scientific and democratic  legislation, constantly enhances transparency of 
legislation and expands the extent of public particip ation to further improve the quality of legislation.  
Since 2008, except those legally required to be ke pt confidential, all drafts of administrative 
regulations have been published on www.chinalaw. gov.cn for public comments and the drafts of 
ministerial rules are also published on the websites of various ministries or www.chinalaw.gov.cn for 
public comments.  The results reached between Chin a and US in relation to transparency under the 
framework of Sino-US strategic economic dialogue  do not fall in the scope of WTO trade policy 
review of China and US has never diligently pe rformed any commitment made by it to China in 
relation to transparency.  Such issues should be settled through the bilatera l mechanism of Sino-US 
strategic economic dialogue. 
 
In U.S. question 3, we had add ressed China's October 2011 subsidi es notification pursuant to Article 
25.1 of the Agreement on Subsidies and Countervaili ng Measures (SCM Agreement).  Among other 
things, we noted that shortly be fore that notification we had submi tted a counter notification pursuant 
to Article 25.10 of the SCM Agreement, and that Ch ina's subsequent subsid ies notification had only 
addressed 10 of the 200 subsidies identified in the U. S. counter notification.  In its response to U.S. WT/TPR/M/264/Add.1 
Page 440 
 
 
  question 3, China asserted that it had included many of the 200 subsidies in its subsequent subsidies 
notification, and China indicated that it had no plans  to notify the remaining subsidies promptly, as 
called for by Article 25.10.  Instead, China stated  that it would include them when it notified its sub-
central government subsidies.  This response is very disappointing. 
 First, at the last meeting of the Committee on Subsidies and Countervaili ng Measures, China only 
identified 4 subsidies that overlapped between the U.S. counter notification and China's subsequent 
subsidies notification.  Second,  China has never notified any of its considerable sub-central 
government subsidies, and in response to another U.S. question China could provide no timetable for 
when it would make its first notification of sub-cen tral government subsidies.  The United States 
therefore urges China to notify all of the outst anding subsidies identified in the U.S. counter 
notification promptly, and the United States further asks that China identify a timetable for its 
notification of its sub-central government subsidies.  In addition, we ask that, with regard to each 
measure identified in the U.S. counter notification that  China claims it has already included in its 
subsidies notification, China provide the name of th e subsidy program that has been notified, identify 
the corresponding measure in the U.S. counter notific ation, and provide an explanation of how the 
relevant measures from the two no tifications functio n together.    
 
Answer: China has to restate that US has a lot of mi sunderstandings on China's subsidy programs and 
failed to understand the interrela tionship between our notified programs and the U.S. counter 
notification.  In fact, substantial parts of the U.S.  counter notification have already been covered by 
the notifications submitted by China to this Co mmittee, including the 4 items that we took as 
examples at the last meeting of the Committee on Subsidies and Countervailing Measures.   China hopes that US could do further study on our subsidy notifications and welcomes opportunities 
to discuss with US on specific programs in a more constructive and effective manner.  
 As for the notification of local subsidies, it is s till difficult to propose a tim etable at this stage. 
However, China will accelerate its efforts to work to wards incorporating local subsidies in its future 
notifications. In this regard, technical capacity  building from US would be most welcome.  
 
In U.S. question 4, we had asked about a different s ubject – technology transfer.  We explained in our 
question that Chinese law treated foreign compani es and imported technology different from domestic 
companies and domestic technology.  We then asked China to explain how it justifies this differential 
treatment in light of its obligations under the Agreement on Trade-Related Aspects of Intellectual 
Property Rights (TRIPS Agreement).  However, China did not answer this question.  Instead, China 
responded that this differential treatment is authorized  by Chinese law.  We would therefore ask again 
that China explain how it justifies this differential treatment in light of its obligations under the TRIPS Agreement.     
 
Answer:  The Agreement on Trade-Related Aspects of In tellectual Property Rights is mainly about the 
protection of intellectual property rights while the Contract Law of the People's Republic of China 
and the Regulations of the People's Republic of China on Administration of Import and Export of 
Technologies are mainly about the liabilities of guarant ee on the defects in technology transfer rather 
than the protection of intellectual property rights.  I. ECONOMIC ENVIRONMENT  
 
We also seek clarification regarding China's respon se to U.S. question 5, in which we had asked 
China to comment on a statement in the Secretaria t's Report asserting that the privileged position of 
state-owned enterprises (SOEs), such as in thei r access to bank lending, had contributed to over 
investment and overcapacity.  In its response, Chi na stated that "[c]redit is the self-decisive 
behaviour of market entities and the Chinese governme nt does not interfere."  The United States is  WT/TPR/M/264/Add.1 
 Page 441 
 
 
  confused by this response.  According to the Chi na 2030 report, jointly authored by the World Bank 
and the State Council's Development Research Center,  SOEs pay much lower average interest rates 
for their debt than other borrowers such as priv ate firms and cooperatives, and SOEs as a class have 
enjoyed access to cheaper capital, land and natura l resources.  At the same time, the China 2030 
report also states that SOEs are consistently l ess profitable and less innovative than non-state-owned 
firms.  We would ask that China explain how "the self-decisive behaviour of market entities" results in 
much cheaper access to credit for chronically weaker SOEs.    
 Answer:  Currently, China's banking industry treats foreign-invested enterprises, state-owned 
enterprises, private enterprises and enterprises of other types equally and the regulatory authority 
imposes no additional restrictions.  In terms of inter est rate of loans, the regulatory authority has only 
stipulated the threshold of the interest rate of  RMB loans of financial institutions.  Financial 
institutions may determine at their own discretion the level of the interest rate of loans granted to 
customers based on various factors including cost and risks and commercial principles, so long as the 
rate is above the threshold.  Pr ofitability is a key guarantee for enterprises to repay loans.  Generally 
speaking, the stronger profitability the enterprise has, th e lower risks the loan of the bank is subject to 
and the lower the interest rate of the loan shoul d be. Stability in operation and credit status of the 
enterprise and other similar elements are also the im portant factors affecting the risk of loans.  Good 
credit records will procure banks to lower the inter est rate of their loans and the creativity capability 
of enterprises is also considered in case of overall judgment on the financial status of the enterprises.  
Generally speaking, enterprises which have good cr edit status, stable operation and reasonable and 
proper usage of funds will get better financial support regardless of foreign-invested enterprises, state-
owned enterprises or private enterprises. 
 
II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 
 
In U.S. questions 12 and 13, we had asked about appeals for administrative review of decision by the 
General Administration of Customs (Customs) and adm inistrative lawsuits disagreeing with Customs 
decisions.  In its responses, Chi na described the resolution of a si gnificant number of these appeals 
and lawsuits as "withdrawn".  Can China explain w hat it means by a case being "withdrawn"?  Also, 
as the United States reads China's responses, it appears that none of th e 289 applications for 
administrative review filed in 201 0 resulted in the original Customs decision being overturned and 
similarly that none of the 30 administrative lawsu its filed in 2010 resulted in the original Customs 
decision being overturned.  Is that correct?      
Answer:  With respect to administrative reconsiderati on, there is difference between the withdrawal 
by the applicant of the reconsideration applicati on and the cancellation or change by the superior 
customs of the original administrative act upon reconsid eration.  The applicant has the right to change 
the mind, accept the original administrative decision made by the customs and cancel the 
reconsideration application during the period fr om the time when the applicant applies for 
administrative reconsideration to the time when th e reconsideration authority makes the decision of 
reconsideration.  In this case, the hearing of the reconsideration case will be terminated if the 
reconsideration authority approves the same.  Wher e the superior customs cancels or changes the 
original administrative act upon reconsideration, th e result of reconsideration overrules the original 
administrative decision.  Among 289 reconsiderati on cases in 2010, 27 are the cases that applicants 
withdraw reconsideration appli cations and 70 are the cases that the superior customs cancels or 
changes the original administrative act upon reconsideration. 
 In case of administrative litigations, "withdrawal of  an action" means that the plaintiff takes the 
initiative to withdraw the litigation.   In 2010, the customs has not failed any cases, that is, there are no 
such cases that results of litigations overruled the original decisions made by the customs. 
 WT/TPR/M/264/Add.1 
Page 442 
 
 
  In U.S. question 14, we had asked about China's p re-shipment inspection requirements.  Could China 
explain how long it will take for it to review these requirements and determined whether they need to 
be notified in accordance with Article 5 of the Agreement on Pre-Shipment Inspection?  Also, could 
China identify the specific products that  are subject to these requirements?   
 
Answer:  The pre-shipment inspection in China is now  implemented only upon imported solid wastes 
that could be used as raw materials and impor ted second-hand electromechanical products.  The 
inspecting procedure of imported solid wastes that could be used as raw materials is implemented 
before shipping in accordance with the Administra tive Measures for the Insp ection, Quarantine and 
Supervision of Imported Solid Wastes as Raw Ma terials (General Administration of Quality 
Supervision, Inspection and Quarantine Decree No. 119 in 2009).  The inspecting procedure of 
imported second-hand electromechanical products is implemented before shipping in accordance with 
the Administrative Measures for the Inspecti on and Supervision of Imported second-hand 
Electromechanical Products (General Administration of Quality Supervision, Inspection and 
Quarantine Decree No. 37 in 2002) and the Procedur e Stipulation for the Inspection and Supervision 
of Imported second-hand Electromechanical Produc ts (General Administration of Quality 
Supervision, Inspection and Quarantine Decree No . 53 in 2003).  The above mentioned provisions 
have so far not been revised yet and the specific date for revision is to be decided on the basis of the 
actual situation of the General Administration, it will be reported to WTO in  case of any revision. 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE  
 In U.S. question 17, we had asked about products  that required both an import permit and an import 
license.  In response, China explained that m echanical and electrical products only need an import 
license.  Could China identify the products that need both an import permit and an import license?  
Also, could China explain why these products need both an import permit and an import license?    
 
Answer:  The products requiring both an import permit a nd an import license mainly refer to ozone 
depleting substances. According to the relevant amen dments to the Montreal Protocol on Substances 
that Deplete the Ozone Layer and for the purpo se of better performing the Agreement, China 
established the license system on the administra tion of importing and expo rting ozone depleting 
substances which is administered by the "Nationa l Office of Import and Export Administration of 
Ozone-Depleting Substances" jointly set up by MO E, MOFCOM and the General Administration of 
Customs.  The Administrative Measures on Import and Export of Ozone-Depleting Substances issued 
by Chinese government stipulates the application procedures and requirements for importing ozone 
depleting substances.  The National Office of Im port and Export Administration of Ozone-Depleting 
Substances will examine the written application subm itted by the applicant and will issue the import 
permit document in case of compliance with applicable  rules.  Importers may apply for import license 
with MOFCOM after obtaining the permit document.  
In U.S. question 22, we had asked China to exp lain when it would issue regulations governing 
anti-dumping expiry reviews.  China responded that it "strictly follow[s] the principle of appropriate 
procedures and transparency to ensure the inte rests and rights of stakeholders" and "specific 
procedures exist" in its practice.  Can China exp lain whether these proce dures are set forth in a 
written document?  If so, can China publish that docu ment so that interested parties are aware of the 
applicable procedures?  
 
Answer:  China conducts sunset review that goes th rough complete proce dures and is fair and 
reasonable in accordance with the Regulations of the People's Republic of China on Anti- dumping 
and with reference to the practice of the Members of WTO.  Currently, China has not determined the 
exact time to promulgate the rules on sunset review. 
  WT/TPR/M/264/Add.1 
 Page 443 
 
 
  In U.S. question 26, we had asked a question with  two parts, and China responded to the first part of 
the question but not the second part, which dealt w ith China's enforcement of voluntary standards.  
Can China explain the legal basis on whic h it enforces voluntary standards against imported 
products?  
Answer:  According to the Interpretation of the Provisi ons of the Standardization Law of the People's 
Republic of China (State Administration of Technol ogy Supervision Decree No. 12), once referenced 
to in a directive document, the recommended standa rd shall have relevant administrative binding 
effect.  According to this Interpretation, implem entation of the recommended standard on the relevant 
goods is based on the laws, regulations, rule s and directive documents concerning their 
administration.   
In U.S. question 39, the United States asked several questions about China's VAT rebate policies, 
which the Secretariat's Report equated with a "levy on exports".  In its response, China seemed to 
suggest that countries other than China used similar VAT rebate policies, where VAT rebate rates for 
exports vary between and among expor ted products.  The United States is not aware of any other 
country that uses these policies.  Can China tell us who they are referring to?  Also, in its response, 
China explained that it used variable VAT rebate rates not as a means to encourage certain exports and discourage certain other exports, but rather as a fiscal tool to raise additional revenue for the 
government.  China added that it needs this additi onal revenue because it is a developing country.  If 
that is correct, can China explain why its VAT rebat e rates vary from product to product and are not 
uniform across all products?      
 
Answer:  Export tax rebate is a common practice in the world. New Zealand, Korea, France, Germany 
and other relevant countries adopt  rebate policies for exported pr oducts.  China adopts the measure 
that the rebate rate is well lower than the levy ing rate mainly because that  China has no adequate 
financial capability; and the rebate rate is de termined as per the legal procedures and does not 
constitute the "additional revenue for the government".   China adopts lower re bate rate for products 
consuming much energy, generating much pollution or attributable to resources for the purpose of 
controlling energy consumption and protecting environment. 
 
In U.S. question 43, we had referenced the panel and Appellate body decisions in the China – Raw 
Materials dispute, which addressed export restrictions  on nine industrial raw materials.  Among other 
things, we had asked whether China planned to elimi nate all of its export duties that are not listed in 
Annex 6 to its Protocol of Accession, not just th e export duties on the nine industrial raw materials 
involved in this dispute, given the sweeping natu re of the findings on export duties.  In response, 
China stated:  "China will take measures conforms [sic] to WTO's discipline in regard of export 
administration on products beyond the 9 products."  Can China cl arify what it means by this 
statement?  Is China stating that it will eliminate all of its export duties that are not listed in Annex 6 to its Protocol of Accession, not just the export du ties on the nine industrial raw materials involved in 
the China – Raw Materials dispute?  
 
Answer:  According to the practices WTO has in disput e settlement, the rulings made by the Panel 
and Appellate Body only applies to  9 products including coke.  China will take measures conforms to 
WTO's discipline in regard of export administration on products beyond the 9 products.  In U.S. question 45, we had asked about the rebat e of consumption taxes upo n export.  Specifically, 
we had asked China to identify the products for which the consumption tax is rebated fully upon 
export.  We had also asked China to identify the products for which the consumption tax is rebated 
partially or not at all, along with the applicable re bate rate.  We have reviewed China's response, but 
do not understand it.  We would appreciate it if China could clarify its response.  WT/TPR/M/264/Add.1 
Page 444 
 
 
  Answer:  For the exported products subject to the rebat es of consumption tax, the consumption tax is 
rebated at the rate of the consumption tax collect ed in China in accordance with the consumption tax 
schedule of tax item and tax rate. 
 
In U.S. question 51, we had asked  China to identify all measures relating to China's "export bases" 
for autos and auto parts.  We also had asked China to describe the support pr ovided to manufacturers 
of autos and auto parts in connection with these exp ort bases over the past 3 years, and to explain this 
support in light of China's obligations under Artic le 3 of the SCM Agreement.  In response, China 
only cited to its 2009 auto plan.  Can China iden tify all measures relating to these export bases, 
including all measures providing support to manuf acturers of autos and auto parts in connection with 
these export bases?  Can China also describe the support provided to these manufacturers and 
explain this support in light of China’s obligat ions under Article 3 of the SCM Agreement?   
 
Answer: The "Plan on Adjusting and Revitalizing the Auto  Industry" (GuoFa [2009] No. 5) is for the 
period from 2009-2011,which has expired now.  The po licy for national automobile and auto parts 
export bases is of public policy rather than specifica lly for certain manufactures.  The identification of 
such bases aims to facilitate concentration of auto sector, promote international cooperation and 
exchanges, strengthen the protection of intellectual property, accelerate the transformation of the development pattern of foreign trade, develop de monstration bases for orderly export and protection 
of intellectual property, as well as an important car rier for transfer of the world auto industry and 
international exchanges and cooperation.  
 
IV. TRADE POLICIES BY SECTOR 
 In U.S. question 73, we had asked China to expla in how it ensures that certain agricultural support 
measures referenced in the Secretaria t's Report are consistent with its domestic support obligations 
under the Agreement on Agriculture.  In response, China only stated that it has fulfilled its WTO 
commitments.  The United States remains concerned by  the objective that China has articulated for 
these measures, namely, to "increase grain production" , when that objective is viewed in relation to 
the fundamental requirement that support exempted fr om the "amber box" shall "have no, or minimal, 
effects on production" as set forth in paragraph 1 of  Annex 2 of the Agreement on Agriculture.  Can 
China explain how it ensures that it is fulfilling its WTO commitments in this area?    
 
Answer:  China clearly knows our obligations in WTO and currently our relevant support measures 
are consistent with WTO rules and China's accession commitments.  
 
In U.S. question 76, we had asked about direct pa yments to China's agri cultural producers.  In 
response, China stated that "the payments are deci ded according to areas.   Specifically there are 
measures in accordance with tax a rea, the actual area that grows grain, the second contracted area 
and so on."  Can China how each type of area described above is determined?  Can China also 
explain how using "the actual area that grows gr ains" is consistent with  paragraphs 5 and 6 of 
Annex 2 of the Agreement on Agriculture?  In additio n, we would ask that China provide data for the 
past 3 years showing payments for each type of area described above and also showing total 
payments on a province-by-province basis.     
Answer:  After approved by the State Council, the paym ent method of farmer's direct subsidies and 
comprehensive agricultural subsidies are to be dete rmined by the provinces at their own discretion.  
Currently, the providers pay such subsidies main ly based on the contracted areas of second round. 
 
In U.S. question 80, we had asked China to id entify any commodities other than rice and wheat for 
which China maintained programs supporting domestic  prices.  In response, China identified sugar 
cane.  Can China explain why it has only included rice and wheat but not sugar cane in its 
notification of domestic price supports?      WT/TPR/M/264/Add.1 
 Page 445 
 
 
   
Answer:  China's grain market and price have been  opened up completely.  For the purpose of 
preventing price from extremely falling down and protecting farmers' interests, the central 
government only adopts the minimum purchase price policy for rice and wheat in the main production 
areas and adopts no similar policy for sugar cane .  Currently, for the purpose of promoting the 
continuous and healthy development of the sugar industry and protecting sugar cane farmers' interests, 
policies of connecting the sugar cane purchase price a nd the sugar market price have been stipulated 
with reference to the actual local situations in Ch ina's main sugar cane production areas.  We have not 
included sugar cane in our notification of domestic price supports mainly because the 
above-mentioned sugar price policies are stipulated by  some local governments rather than the central 
government and the sugar cane price has been c onnected with the sugar price which has been 
completely opened up.  The connection between s ugar cane price and sugar price means that sugar 
cane price has actually already realized the goals of market orientation.  In U.S. question 84, we had asked China to pr ovide information about s ubsidy programs benefiting 
the fisheries sector, which exceeded more than US$4 b illion in 2003 according to one report.  In its 
response, China stated that it would only prov ide information about these subsidies after WTO 
Members agreed to disciplines on fisheries subsidies.  The United States notes that existing SCM Agreement rules already obligate Members to notify a ll subsidies, including fisheries subsidies, and 
that this obligation is not in any way contingent  on Members first agreeing to fisheries disciplines.  
The United States would therefore ask again that Ch ina provide the information on its fisheries 
subsidies requested by U.S. question 84.      
 
Answer:  Although subsidy notification is stipul ated in the Agreement on Subsidies and 
Countervailing Measures, the provisions are related to the principles and as such China begins the 
negotiations related to the disciplines of fisheries subsidies as per the special nature of the marine 
fishing industry to detail the standards and strengt hen the enforceability.  However, no agreement has 
been reached.  Therefore, it is difficult from the technical aspects for the members to provide the 
detailed data without the uniform standards on fi sheries subsidies and the data provided by the 
members are not comparable and may raise confusion and impose adverse impact on future 
negotiations.  China is willing to discuss with the US  and other members in order to jointly promote 
the works related to this aspect.  
In U.S. question 86, we had asked about the f unding programmes and funds established since 2011 
for China’s civil aircraft industry.  China responded that no funding programmes or funds "had been 
specially set up for commercial civil aircrafts."  Although China did not limit its response to the 
period since 2011, the United States assumes that Ch ina is referring to the period since 2011, given 
that the United States, in submissions before the Subsidies Committee, has identified the following 
financial support for China's civil aircraft industry:   "In 2008, the State approved the creation of 
Commercial Aircraft Corporation of China Ltd. (COM AC), a state-owned enterprise responsible for 
developing China's first large commercial aircraft.  In 2009, COMCAC received US$2 billion in 
government funding for the development of the ARJ21 -700 regional jet.  Further, the Industrial and 
Commercial Bank of China (ICBC) has stated that pa rt of its mandate is to  help indigenous passenger 
aircraft programs like the ARJ21, in particular by providing helping airlines in other countries to 
lease the aircraft.  Moreover, also in 2009, th e state-owned China Aviation Industry Corporation 
(AVIC) secured a pledge of up to RMB 176 b illion (US$25.7 billion) in  domestic bank loans, 
including loans from state-owned commercial banks, which will be used to finance the development of 
helicopters, engines, cargo planes and the buildin g of passenger aircraft."  Is the United States' 
understanding correct?  Also, can China explain wh ether funding programmes or funds have been 
established since 2011 that benefit China's civil aircraft industry, even if those funding programmes 
or funds do not specially or solely be nefit China’s civil aircraft industry?   
 WT/TPR/M/264/Add.1 
Page 446 
 
 
  Answer:  China has no funding programme for China's civ il aircraft industry.  Commercial Aircraft 
Corporation of China Ltd. ("COMAC") solely unde rtakes its own profits and loss completely as per 
the market mechanism in the cour se of researching, producing and selli ng.  As mentioned by the US, 
the Industrial and Commercial Bank of China (ICBC) has stated that part of its mandate is to help 
domestic passenger aircraft programs like the AR J21 and the state-owned China Aviation Industry 
Corporation secured a pledge of up to RMB 176 b illion (US$25.7 billion) in domestic bank loans in 
2009. Such issues are mainly the market-oriented actions taken by commercial banks during their 
self-administered operation.  According to the Law of the People's Republic of China on Commercial 
Banks, commercial banks shall make their own deci sions regarding their business operations, take 
responsibility for their own risks, assume sole res ponsibility for their profits and losses and exercise 
self-restriction.  Commercial banks are permitted to  provide funding supports  to enterprises based on 
the principles of market orientation, making thei r own decisions on credits and taking responsibility 
for their own risks in case that they meet the conditio ns stipulated in applicable rules and regulations 
on financial administration. 
 
In U.S. question 93, we had asked China to explain how China's state-owned commercial banks 
(SOCBs) can base their lending decisions entirely on commercial considerations when they must take 
into consideration the needs of national economic  and social development and the guidance provided 
by the Chinese Government's  industrial policies.  In its response, China nevertheless insisted that 
SOCBs make their lending decisions entirely on commercial considerations.  China noted that 
Article 34 of the Commercial Bank Law of the People's Republic of China provides that SOCBs 
should take into consideration the needs of national economic and social development and the guidance provided by the Chinese Government's indus trial policies, but it is only a general guideline 
and not a statutorily binding obligation.  Can Chi na explain why Article 34 uses the mandatory term 
"shall" instead of permissive terms like "may" or "should"?  
 
Answer:  China is prepared to discuss w ith US experts on the linguistic implications of "shall", "may" 
and "should" in the process of translation.  
In U.S. question 100, we had asked about investment by private enterprises in China's basic 
telecommunications sector.  In its response, China stat ed that 90 per cent or 360 of the 400 licensed 
enterprises in China's basic telecommunications sect or were private Chinese enterprises.  It appears 
that China divides basic telecommunications servic es into various license categories.  Can China 
identify each of these license cate gories?  Can China also identify  the license categories in which 
private Chinese enterprises ha ve been licensed and the number of licensed private Chinese 
enterprises in each license catego ry?  Also, please explain whether private enterprises are prohibited 
from obtaining licenses in particular license categories.     
 
Answer:  According to the current telecommunicati on business classification catalogue, analog 
trunking communication, wireless paging, very sma ll aperture terminal (VSAT) telecommunication, 
Class II data telecommunication (including fixed domestic data transmission and wireless data 
transmission), user premises network and networ k hosting belong to the basic telecommunication 
business that is managed with reference to the rul es on value-added telecommunication business.  No 
restrictions exist on private enterprises to apply for the above-mentioned business.  By the end of this May, 10 enterprises hold th e licenses for analog trunking communication business, 
35 enterprises hold the licenses for analog trunki ng communication business, 39 enterprises hold the 
licenses for very small aperture terminal (VSAT)  telecommunication business, 5 enterprises hold the 
licenses for fixed domestic data transmission business,  3 enterprises hold the licenses for wireless data 
transmission business, 39 enterprises hold the li censes for user premises network business and 
277 enterprises hold the licenses for network hosting business.  Currently, private capital has entered 
the above-mentioned telecommunication business.  
  WT/TPR/M/264/Add.1 
 Page 447 
 
 
  In U.S. question 104, we had asked when Chi na will circulate draft computer reservation systems 
regulations for public comment.  In its respon se, China explained t hat the Civil Aviation 
Administration of China (CAAC) had solicited the opi nions of select parties on a draft measure and 
that the CAAC would next be promulgating the final  measure.  Based on this response, it appears that 
CAAC does not intend to publish the draft meas ure for public comment, despite China’s response to 
U.S. question 2, in which China asserted that it published all draft trade- related regulations and 
departmental rules for public comm ent, except in "some urgent and extraordinary conditions."  Is the 
United States' understanding correct?     
 
Answer:  According to the Provisions on the Procedures for Making the Administrative Rules of the 
General Administration of Civil Aviation of China, CAAC has solicited comments from various sectors for several times in the course of examini ng rules.  In addition to soliciting comments in 
writing and holding rule examination meetings, CA AC published the Interim Regulation on Approval 
and Management of Designated Agencies in China by Foreign Aircraft Transport Enterprises Entering 
and Using Foreign Computer Reserve System (the "Interim Regulation") on its website in January 
2011 and July 2011 for public comments. CAAC  has amended the Interim Regulation after 
considering the comments from various sectors and passed this regulation. 
 
In U.S. question 107, we had asked China to clar ify whether it places any geographic limitations on 
foreign suppliers engaging in domestic express deli very services for packages.  The United States 
welcomes China’s clear statement that it does not impose geographic limitations.     
 
Answer:  According to China's accession commitment, China sets up no geographic limitations on the 
foreign service providers who provide express delivery services in China.  Acco rding to China's Post 
Law and the Measures for the Administration of E xpress Delivery Business Permits, an enterprise 
applying for the approval on operating express deli very services must have the service capability 
corresponding to the geographic scope of operation under the application.  The Operation License for 
Express Delivery Business issued by the post admi nistration department explicitly stipulates such 
matters as "Operation Regions", which is applicable to both Chinese and foreign invested enterprises. 
Enterprises must carry out express delivery opera tion activities within the scope permitted under the 
Operation License for Express Delivery Business. 
 
In U.S. question 109, we had asked why China re quires an internet content provider license for an 
internet company engaging in retail sales.  In its response, China referred us to the home page of the 
Ministry of Industry and Information Technology’s we bsite.  We cannot discern from that website why 
China requires an internet content provider license fo r an internet company engaging in retail sales.  
Can China explain how retail sales qualify as the provision of internet content? 
 
Answer:  According to Article 4 of the Measures on the Administration of Internet Information 
Services (State Council Decree No. 292), China adop ts the licensing system on commercial Internet 
information services and adopts the filing system  on non-commercial Internet information services. 
 
Where an enterprise establishes its own online trad ing platform and provides information free of 
charge and sells its own products to clients directly on Internet through this platform, the enterprise is 
not required to apply for the license of value-added telecommunication service but to file this business 
as per applicable laws and regulations.  Where an en terprise establishes an online trading platform and 
provides such commercial services as information exch ange and information disposal for the parties 
to the transaction through this platform and charges corresponding service fees for the same, the 
enterprise must apply for the license of on line data processing and transaction processing. 
 WT/TPR/M/264/Add.1 
Page 448 
 
 
  FOLLOW-UP QUESTIONS TO QUESTIONS POSED BY OTHER MEMBERS 
 
Based on China's responses to the European Union's questions a bout export credit financing (EU 
questions 78-80), it appears that China EXIM Bank  and SINOSURE are not the only Chinese entities 
that provide export credit financing.  Can China c onfirm whether the China Development Bank also 
provides export credit financing?  Also, does China Development Bank follow the OECD 
Arrangement on Officially Supported Export Credits in the same way as China EXIM Bank and 
SINOSURE? 
 
Answer:  China Development Bank is a commercial ba nk which operates based on the principles of 
commercialization and market orient ation and may participate in e xport credit financing activities. 
China is not a member sate of OECD and as such the participation by China Development Bank in 
export credit financing activities does not involve the issue as to whether China has complied with the 
OECD Arrangement on Officially Supported Export Credits. 
 
EU questions 78-80 also addressed the fees charge d by China's export credit financing entities.  Can 
China explain whether China EXIM Bank, SINO SURE and China Developmen t Bank charge an 
exposure fee/risk premia and, if so, how the exposure fee/risk premia are charged (e.g., separate fee, 
part of interest spread, etc.)?  Can China also expla in what costs are targeted by the exposure fee/risk 
premia in order to arrive at an appropriate f ee to compensate for th e risks involved?     
 
Answer:  With respect to the export credit business c overed by export credit insurance, SINOSURE 
charges insurance premium separatel y from the applicant, the insured or the third party designated by 
them. SINOSURE sets up the price of the premium to be charged by it mainly based on the risk 
exposure the business may face and the amounts charged by it are to be used to cover risk cost, 
operation cost and other similar costs of the company. 
 China Development Bank charges risk premium and includes risk premium into the calculated price 
of the loan in the course of export credit business.  Ri sk premium is to be used to cover probability of 
default by borrowers, specific debt- default loss, debt default exposure, tim e limit of debts and other 
risk factors. 
  
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