G/STR/Q1/CHN/3  
 
10 March 2016  
(16-1341)  Page: 1/2  
Working Party on State Trading Enterprises  Original: English  
 
STATE TRADING 
QUESTIONS POSED BY THE EUROPEAN UNION TO CHINA ON ITS STATE 
TRADING ENTERPRISES NOTIFICATION (G/STR/N/10-15/CHN) 
The following communication, dated 7 March 2016, is being circulated at the request of the 
Delegation of the European Union. 
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Reference is done to China's notification of its STEs circulated on 19 October 2015 (G/STR/N/10 to 
15/CHN), taking also into account the information contained in the US counter-notification submitted in 2014. 
In its notification, China has presented its STEs following the same template of the Protocol of 
Accession. The EU welcomes this approach as a sort of trait-d'union  showing the changes occurred 
as from the Accession. However, in view of th e forthcoming deadline for the submission of the 
STEs notification, the EU would encourage China to present its notification, covering the years 
2015-2016, on the basis of the "Questionnaire on State Trading" (document: G/STR/3/Rev.1), 
thus presenting only the active STEs. Furthermore, as explained in the guidelines of the questionnaire, China should present the requested information separately for each state trading 
enterprise notified. In this manner, it would be easier for the Members to understand the way the 
STEs are actually operating in China and their precise activities. 
Considering that the notification, as it has been presented, does not contain all the information 
necessary to allow Members to assess Chinese STEs, the EU would like to ask China to clarify the 
following aspects:  
1. In the cover page of its notification, China notes that "As for the products listed in 
Annex 2A1 and 2A2 of the Protocol of Accession which are currently not subject to state 
trading administration or the state trading administration of which has been suspended, 
China reserves the right to apply state trading administration". 
Questions: Could China clarify which is the rationale for this disclaimer? In particular, could 
China clarify how this disclaimer complies with China's commitments, that are: i) to 
progressively abolish state trading in respect of silk measures, increasing and extending trading rights, granting the right to trade to all individuals no later than 1 January 2005 as well as ii) to progressive increases in access by non-state trading entities to trade in 
fertilizer and oil and the filling of quantities av ailable for import by non-state trading entities 
(Protocol of Accession p. 9)? 
2. With reference to Part III of the notification (description of the functioning of the STE) China 
should reply to each sub-question for each STE. In particular: 
a. At page 9 of its notification, first pa ragraph of Reply (A-C), China mentions 
"… Enterprises that have obtained trading rights …". 
i. Could China specify which are the " exclusive or special rights " enjoyed by the STEs 
listed in the notifications? G/STR/Q1/CHN/3 
 
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  ii. Could China clarify which types of entities other than STEs are allowed to engage in 
importation/exportation, giving more detailed information on their condition for participation? In particular, could you please clarify which are the conditions for "registration" in order to obtain the TRQ rights?  
iii. China, in its Protocol of accession, committed to progressively increase access by 
non-state entities to trade in oil. According to its notification, it seems that oil is still traded by STEs. Could China clarify whether this understanding is correct and, should 
it be the case, could China clarify what measures they are envisaging in order to 
comply with the Accession's commitments (point 9 (c): "progressive increases in access by non-state trading entities to trad e in fertilizer and oil and the filling of 
quantities available for import by non-state trading entities")?  
iv. With reference to the Statistics, the EU would ask China to submit the statistical 
information for each STE (and per product), in compliance with the notification questionnaire (Tables I, II and III). 
3. In point 4.2 of its notification, China declares that they are not applying STEs on the export 
of cotton yarn and woven fabrics of cotton since China joined the WTO. The US, in their counter notification, enumerate also "Chinatex Cotton Import and Export Co." as one of the 
STEs that still should be notified in accordance with Article XVII of the GATT. Could China 
clarify the legal status of this enterprise and whether it continues to enjoy exclusive or special trading rights? 
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