G/STR/Q1/CHN/8  
 
16 March 2017  
(17-1497) Page: 1/5 
Working Party on State Trading Enterprises  Original: English  
 
 STATE TRADING  
REPLIES TO QUESTION S1 POSED BY THE UNITED STATES  
REGARDING  THE NOTIFICATION OF CHINA2 
 
 
The following communication, dated 13 March 2017 , is being circulated at the request of the 
Delegation of China . 
 
_______________  
 
 
Question 1  
 
In 2003, t he Secretariat circulated a format3 and guidelines for Members to use to notify 
their individual state trading enterprises (STEs).  Following the proper format allows 
Members to fully understand the legal basis and functions of each individual STE being 
notified.  Upon review of China 's notification, it appears that China is the only WTO 
Member that has failed to follow this format.  Could China please explain why it has 
failed to do so?  If this omission was in error, please indicate when China will submit a 
corrected notification.  
 
Reply  
 
China attaches importance to and seriously performs its WTO transparency obligations. China has 
followed the format and guidelines circulated by the Secretariat in 2003, collected and sorted 
available information to prepare i ts notification, which includes such information as the legal basis 
for state trading administration, the tariff lines of state trading products, and the import and 
export volume. China believes that WTO members can be informed by the notification. Some 
information is not available, because statistics of individual enterprises are their internal 
information, and are considered as business secrets.  
 
Question 2  
 
In prior instances when China was pressed by Members to explain why it had not 
provided a notifica tion for prior years, China responded that "China 's STE system had 
not undergone any changes in general except regarding the products subject to STEs. "4 
However, after review of China 's most recent STE notification, this does not appear to be 
the case.  In its 2002 and 2003 notifications, China notified 109 STEs.  In contrast, in the 
2015 version, China only notified 25 STEs.  Some of those STEs were carried over from 
the 2002 -03 notifications, while others were only previously identified through 
alternative m eans like , for example, the U.S. counter -notification.  Please explain this 
discrepancy and, if possible, identify on an STE -individual basis why certain STEs were 
no longer being notified.  If this was done in error, please indicate when China will 
submit a  corrected notification.  
 
                                                
1 G/STR/Q1/CHN/5.   
2 G/STR/N/10/CHN, G/STR/N/11/CHN, G/STR/N/12/CHN, G/STR/N/13/CHN, G/STR/N/14/CHN, 
G/STR/N/15/CHN . 
3 G/STR/3/Rev.1 (dated 14 November 2003).  
4 G/STR/M/28 (dated 26 January 2016).  G/STR/Q1/CHN/8  
 
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  Reply  
 
As indicated by China 's State Trading Enterprises Notification 2003 -2014, since 2003, except for 
the cancellation or suspension of state trading administration for certain products, and the merger, 
division or name change o f certain state trading enterprises, there was generally no big change in 
China 's state trading administration system. Please note that, China did not simply notify 25 STEs 
in its notification. The lists of STEs exporting products such as antimony, tungste n and silver were 
released in MOFCOM 's annual documents, and included a number of enterprises. We have noted 
that many of the enterprises mentioned in the U.S. counter notification were STEs back in 2001, 
and the information is not updated. For the latest information, please refer to China 's State 
Trading Enterprises Notification 2003 -2014.  
 
Question 3  
 
In the listing covering vegetable oil, China has not listed any individual STEs, but merely 
provided a reference to Annex 2A1 of its protocol of accession.  Per the 2003 format and 
guidelines, please identify the specific STEs that are being notified.  If China is unable to 
do so, please explain why.  
 
Reply  
 
According to the Announcement No. 93 of 2005 of MOFCOM, the state trading administration on 
the import o f vegetable oil has been lifted as of 1 January 2006. Since 2006, all enterprises, not 
limited to the STEs, have been able to import vegetable oil.  
 
Question 4 
 
In the listing covering tea, China has not listed any individual STEs, but merely provided 
a re ference to Annex 2A2 of its protocol of accession.  Per the 2003 format and 
guidelines, please identify the specific STEs that are being notified.  If China is unable to 
do so, please explain why.  
 
Reply  
 
According to the document Guo Fa No. 16 of 2004, the state trading administration on the export 
of tea has been lifted as of  19 May 2004. Since then, all enterprises, not limited to the STEs, have 
been able to export tea.  
 
Question 5  
 
In the listing covering soybean, China has not listed any individual STEs,  but merely 
provided a reference to Annex 2A2 of its protocol of accession.  Per the 2003 format and 
guidelines, please identify the specific STEs that are being notified.  If China is unable to 
do so, please explain why.  
 
Reply  
 
Since its accession to the W TO, China has not implemented state trading administration on the 
export of soybean. In practice, all enterprises, not limited to the STEs, can export soybeans.  
 
Question 6  
 
In the listing for antimony and antimony products, and the listing for silver, Chi na has 
not listed any individual STEs, but merely provided references to several 
MOFTEC/MOFCOM announcements and MOFCOM circulars.  Per the 2003 format and 
guidelines, please identify the specific STEs that are being notified.  If China is unable to 
do so, p lease explain why.  
 
Reply  
 
In The lists of STEs exporting products such as antimony, tungsten and silver have been regularly 
released through MOFCOM 's annual documents, which contain the name lists of the STEs. And all G/STR/Q1/CHN/8  
 
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  the document numbers have been reflec ted in China 's notifications. Since statistics of individual 
enterprises are their internal information and are considered as business secrets, detailed 
information is not available.  
 
Question 7  
 
In the listing for tobacco, China has not listed any individ ual STEs, but merely provided a 
reference to a MOFTEC announcement.  Per the 2003 format and guidelines, please 
identify the specific STEs that are being notified.  If China is unable to do so, please 
explain why.  
 
Reply  
 
According to China 's WTO accession c ommitments and the MOFTEC announcement No.44 of 2001, 
the STEs that export tobacco are as follows:  
 
1. CHINA NATIONAL TOBACCO IMPORT & EXPORT CO. (GROUP) (later renamed CHINA 
TOBACCO INTERNATIONAL INC.)  
2. CHINA TOBACCO LIAONING IMP.& EMP. CO.,LTD.  
3. CHINA TOBACCO HEILONGJIANG IMP.& EMP. CO.,LTD.  
4. CHINA TOBACCO SHANGHAI IMP.& EMP. CO.,LTD.  
5. CHINA TOBACCO FUJIAN IMP.& EMP. CO.,LTD.  
6. CHINA TOBACCO SHANDONG IMP.& EMP. CO.,LTD.  
7. CHINA TOBACCO HENAN IMP.& EMP. CO.,LTD.  
8. CHINA TOBACCO HUBEI IMP.& EMP. CO.,LTD.  
9. CHINA TOBACCO HUNAN IMP.& EMP. CO.,LTD.  
10. CHINA TOBACCO GUANGDONG IMP.& EMP. CO.,LTD.  
11. CHINA TOBACCO SICHUAN IMP.& EMP. CO.,LTD.  
12. CHINA TOBACCO GUIZHOU IMP.& EMP. CO.,LTD.  
13. CHINA TOBACCO YUNNAN IMP.& EMP. CO.,LTD.  
14. JILIN TOBACCO I MP. & EXP. CO.,LTD.  
15. ZHEJIANG TOBACCO IMP. & EXP. CO.,LTD.  
16. SHENZHEN TOBACCO IMP. & EXP. CO.,LTD.  
17. SHAANXI TOBACCO IMP. & EXP. CO.,LTD.  
18. XINJIANG TOBACCO IMP. & EXP. CO.,LTD.  
19. YUNNNAN HONGTA IMP. & EXP. CO.,LTD. (later renamed YUNNAN TOBACCO  
INTERNATIONAL CO.,LTD.)  
 
Question 8  
 
In the listing for silk, China has not listed any individual STEs, but merely provided a 
reference to Annex 2A2 of its protocol of accession.  Per the 2003 format and guidelines, 
please identify the specific STEs that a re being notified.  If China is unable to do so, 
please explain why.  
 
Reply  
 
According to MOFCOM and GACC Announcement No. 64 of 2004, the state trading administration 
on the export of silk has been lifted as of January 1, 2005. Since then, all enterprises,  not limited 
to the STEs, have been able to export silk.  
 
Question 9  
 
In the listing for unbleached silk, China has not listed any individual STEs, but merely 
provided a reference to Annex 2A2 of its protocol of accession.  Per the 2003 format and 
guideline s, please identify the specific STEs that are being notified.  If China is unable to 
do so, please explain why.  
 G/STR/Q1/CHN/8  
 
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  Reply  
 
Since its accession to the WTO, China has not implemented state trading administration on the 
export of unbleached silk. In practice, all  enterprises, not limited to the STEs, can export 
unbleached silk.  
 
Question 10  
 
In the listing for cotton yarn, China has not listed any individual STEs, but merely 
provided a reference to Annex 2A2 of its protocol of accession.  Per the 2003 format and 
guidelines, please identify the specific STEs that are being notified.  If China is unable to 
do so, please explain why.  
 
Reply  
 
Since its accession to the WTO, China has not implemented state trading administration on the 
export of cotton yarn. In practice, all enterprises, not limited to the STEs, can export cotton yarn.  
 
Question 11  
 
In the listing for woven fabrics of cotton, China has not listed any individual STEs, but 
merely provided a reference to Annex 2A2 of its protocol of accession.  Per the 2003 
format and guidelines, please identify the specific STEs that are being notified.  If China 
is unable to do so, please explain why.  
 
Reply  
 
Since its accession to the WTO, China has not implemented state trading administration on the 
export of woven fabrics o f cotton. In practice, all enterprises, not limited to the STEs, can export 
woven fabrics of cotton.  
 
Question 12  
 
In Section 4 – Statistical Information, China states that China would not be providing 
data regarding certain products because state trading of those products was suspended 
during the notification period.  Please explain why trading information is not being 
reported for the years prior to the suspension of activities.  If this is in error, please 
indicate when China will submit a corrected notifi cation.  
 
Reply  
 
For the timeliness of the notification, China notified the trade information of products subject to 
state trading administration as of 2014.  
 
Question 13  
 
For the tables containing the statistical information, please explain why the data ha s not 
been provided on a STE -specific basis.  If this is in error, please indicate when China will 
submit a corrected notification.   
 
Reply  
 
Since statistics of individual enterprises are their internal information and are considered as 
business secrets, re lated data are not available.  
 
Question 14  
 
For the same tables, please explain why no data is being reported for the following 
categories:  import quantity of state trading enterprises, average procurement price, 
average representative domestic sales price , and mark -up for most of the products 
covered by the notification.  This level of transparency is important for Members to 
understand whether market considerations are being taken into consideration when the G/STR/Q1/CHN/8  
 
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  STEs establish prices for the identified product s. If this was done in error, please 
indicate when China will submit a corrected notification.   
Also, why are there two columns for average representative domestic sales price for 
grain, sugar, tobacco, crude oil, processed oil, chemical fertilizer, and co tton?  If this was 
done in error, please indicate when China will submit a corrected notification.  
 
Reply  
 
STEs conduct market -based operations without government intervention. When a STE acts as an 
import agency for other enterprises, the resale prices of the imports are their CIF plus a certain 
proportion of agency commission, without any mark -up. When a STE imports goods for itself, it 
decides the selling prices according to domestic market wholesale prices, and is responsible for its 
own profits or losse s. Since statistics of individual enterprises are their internal information and are 
considered as business secrets, related data are not available.  
In Table I: Statistics on Imports under State Trading, the repeated column of "average 
representative domes tic sales price " should be "average import price ". China has corrected this in 
the corrigendum G/STR/N/10/CHN/Corr.1, G/STR/N/11/CHN/Corr.1, G/STR/N/12/CHN/Corr.1, 
G/STR/N/13/CHN/Corr.1, G/STR/N/14/CHN/Corr.1, G/STR/N/15/CHN/Corr.1 . 
 
Question 15  
 
For Table  III – Domestic Activities, please explain why China reported "not available " 
and clarify when the notification will be updated to provide such information to the 
Woking Party.  
 
Reply  
 
STEs conduct market -based operations without government intervention. W hen a STE acts as an 
import agency for other enterprises, the resale prices of the imports are their CIF plus a certain 
proportion of agency commission, without any mark -up. When a STE imports goods to be sold by 
itself, it decides the selling prices accor ding to domestic market wholesale prices, and is 
responsible for its own profits or losses. Since statistics of individual enterprises are their internal 
information and are considered as business secrets, related details are not available.  
 
Question 16  
 
The most recent notification by China provides very little information in terms of a 
response to the status of the entities listed in the U.S. counter -notification.  As stated in 
the counter -notification, of the 153 STEs counter -notified, 44 were ones that h ad been 
explicitly self -identified by China as STEs or otherwise qualify as STEs under paragraph 
1 of the Understanding.  Please explain why China, whether through this notification or 
otherwise, has not provided an update to Members regarding these STEs.  In past 
Working Party meetings5 as well as in bilateral discussions, China stated that it was 
reviewing the counter -notification and reserved the right to make comments or 
clarifications.  If China is unable to provide a response to some or all of the inform ation 
contained in the counter -notification, please explain why.  
 
Reply  
 
As indicated by China 's State Trading Enterprises Notification 2003 -2014, since 2003, except for 
the cancellation or suspension of state trading administration for certain products, a nd the merger, 
division or name change of certain state trading enterprises, there was generally no big change in 
China 's state trading administration system. Please note that, China did not simply notify 25 STEs 
in its notification. The lists of STEs expo rting products such as antimony, tungsten and silver were 
released in MOFCOM 's annual documents, and included a number of enterprises. We have noted 
that many of the enterprises mentioned in the U.S. counter notification were STEs back in 2001, 
and the inf ormation is not updated. For the latest information, please refer to China 's State 
Trading Enterprises Notification 2003 -2014.  
 
__________  
                                                
5 See e.g., G/STR/M/27 (dated 5 October 2015).