RESTRICTED  
  
WT/TPR/G/300  
27 May  2014 
(14-3141) Page: 1/26 
Trade Policy R eview Body  Original: English  
 
 TRADE POLICY REVIEW  
REPORT BY  
CHINA 
Pursuant to the Agreement Establishing the Trade Policy Review Mechanism (Annex 3 of the 
Marrakesh Agreement Establishing the World Trade Organization), the policy statement by China  is 
attached.  
 
 
Note: This report is subject to restricted circulation and press embargo until the end of the first 
session of the meeting of the Trade Policy Review Body on China . WT/TPR/G/300 • China  
 
- 2 - 
 
  CONTENTS  
1   INTRODUCTION  ................................ ................................ ................................ ..........  4 
2   ECONOMIC AND TRADE E NVIRONMENT AND MACRO ECONOMIC POLICY 
DIRECTION  ................................ ................................ ................................ ......................  4 
2.1   Economic and Trade Environment  ................................ ................................ ..................  4 
2.1.1    International economic environment  ................................ ................................ ...........  4 
2.1.2    Domestic economic situation  ................................ ................................ ......................  4 
2.2   Macroeconomic Policy  ................................ ................................ ................................ .. 5 
2.2.1    New thinking on macroeconomic policy  ................................ ................................ ........  5 
2.2.2    Fiscal policy  ................................ ................................ ................................ .............  6 
2.2.3    Monetary policy  ................................ ................................ ................................ ........  6 
2.3   Adjusting Economic Structure and Transforming Development Pattern  ...............................  7 
2.3.1    Adhering to expanding domestic demand  ................................ ................................ ..... 7 
2.3.2    Accelerating the development of the service sector  ................................ .......................  8 
2.3.3    Pursuin g innovation -driven development and protecting intellectual property 
rights  ................................ ................................ ................................ ................................  8 
2.3.4    Advancing energy conservation, pollution reduction and industrial restructuring  ...............  9 
2.3.5    Consolidating and strengthening the foundation for the development of agriculture 
and rural areas  ................................ ................................ ................................ .................. 10 
2.4   Continuing to Deepen the Reform Stead fastly  ................................ ................................ 10 
2.4.1    Reform of the administrative system  ................................ ................................ .......... 10 
2.4.2    Reform of the business registration system  ................................ ................................ .11 
2.4.3    Reform of state -owned enterprises and development of the non -public sector  ................. 11 
2.4.4    Reform of fiscal and taxation systems  ................................ ................................ ........ 12 
2.4.5    Reform of the financial system  ................................ ................................ .................. 13 
2.4.6    Other reform measures  ................................ ................................ ............................ 14 
3   TRADE AND INVESTMENT  DEVELOPMENT AND RELA TED POLICIES  ...........................  15 
3.1   Trade and Investment Development  ................................ ................................ ............. 15 
3.1.1    Trade developmen t ................................ ................................ ................................ ..15 
3.1.2    Inward and outbound direct investment  ................................ ................................ ......16 
3.2   Promoting Balanced and Sustainable Development of Trade and Investme nt ...................... 17 
3.2.1    Striving to balance growth of imports and exports  ................................ ....................... 17 
3.2.2    Accelerating the transformation of foreign -trade deve lopment patterns  .......................... 18 
3.2.3    Improving trade facilitation  ................................ ................................ ....................... 19 
3.3   Increasing Utilization of Foreign Investment and Outbound Fore ign Investment  ................. 20 
3.3.1    Optimizing the utilization of foreign investment through further opening -up .................... 20 
3.3.2    Improving compe titiveness through "going global"  ................................ ....................... 21 
3.4   Constructing Economic and Trade Partnerships Based on Mutually Beneficial and 
Win-Win Principle  ................................ ................................ ................................ ............... 22 
3.4.1    Committed to advancing the Doha Development Agenda  ................................ .............. 22 
3.4.2    Safeguarding the multilateral trading system with concrete actions  ................................ 23 WT/TPR/G/300 • China  
 
- 3 - 
 
  3.4.3    Promoting bilateral and regional cooperation  ................................ ............................... 24 
3.4.4    Enhancing South -South cooperation  ................................ ................................ ........... 24 
4   THE WAY FORWARD  ................................ ................................ ................................ .. 25 
 
CHARTS  
 
Chart 2.1 China's year -on-year GDP growths by quarter, 2012 -13 ................................ ............  5 
Chart 3 .1 Import and export value in China's goods trade, 2009 -13 ................................ ......... 15 
 
 
 WT/TPR/G/300 • China  
 
- 4 - 
 
  1  INTRODUCTION  
1.1.  Since the last trade policy review in 2012, China has been facing complex and volatile 
external environment, as well as new circumstances and dev elopments in domestic economy. The 
Chinese Government has adhered to its general work guideline  of making progress while 
maintaining stability. It has taken pains to bring forth new approaches in the adjustment of its 
macro economy, and accelerated the tra nsformation of economic development pattern. China has 
also made great efforts to adjust its economic structure, deepen the reform in a comprehensive 
fashion, and pushed forward proactively a new round of opening up. While taking all the 
challenging factor s of stabilizing growth, restructuring industries, promoting reform and benefiting 
the people's livelihood into its policy making consideration, China has managed to accomplish the 
huge task of securing a stable development of national economy during the p ast years, and 
accordingly made important contributions to the recovery and development of world economy.  
1.2.  The Chinese Government has driven and expanded its opening up to new degree of depth, 
while comprehensively deepening its domestic reform. It has comm itted itself to building a new 
type of open economy and starts to accelerate its step s in building new advantages in international 
competition. It promotes the balanced development of trade and investment from a strategic 
perspective, and actively explores  the feasibility of a new system of rules and regulation patterns 
for cross -border trade and investment through establishing the China (Shanghai) Pilot Free Trade 
Zone. While continuing to implement the strategy of "Going Global", China proposed the vision  of 
"Silk Road Economic Belt" and "Maritime Silk Road" and opened inland and border areas wider to 
the outside world with a view to forming a new pattern of all -round opening up.  
1.3.  The Chinese Government continued to develop its foreign economic and trade r elations in an 
all-round way. China insists that multilateral trade system should play the central role in trade and 
investment liberalization, and supports the mutually enforced development and cooperation 
through bilateral, regional, sub -regional and mul tilateral channels. China together with other WTO 
members reached the "early harvest" of the Doha Round in 2013, which restored  the creditability 
of the multilateral trade system and injected impetus for the comprehensive conclusion of the 
Doha Round. Chin a will continue to be a staunch player in promoting economic globalization, 
undertaking trade and investment liberalization and facilitation, formulating international rules, 
safeguarding common interests  of the international communities , and building a ha rmonious 
world. It will continue to play a positive role in responding to various challenges to global economy 
and trade, and promoting common  development across the world.  
2  ECONOMIC AND TRADE E NVIRONMENT AND MACRO ECONOMIC POLICY DIRE CTION  
2.1  Economic and Tra de Environment   
2.1.1   International economic environment  
2.1.  Since the last review in 2012, China's economic and trade development ha s faced 
complicated external economic environment. The world economy still lingers in the in -depth 
adjustment period after the finan cial crisis. Vulnerability  and uncertainty have become the key 
features in the development of world economy. Globally, industrial production and trade we re 
weak, price level dropped , and international financial market kept on fluctuating.  
2.2.  Major developed economies have modest ly strengthened growth momentum while t he 
growth of emerging and developing economies slowed  down. The complexity and relevance 
between various economies intensi fied. With insufficient aggregate demand, developed countries 
reduced rema rkably their import from developing countries, which caused significant impact on the 
latter's economy. The adjustments in the "quantitative easing" of some major countries brought 
about uncertainty  to the world economy.  
2.1.2   Domestic economic situation  
2.3.  In the  past two years, China's economic development has progressed and improved steadily. 
There were successive bumper harvests, industrial production grew steadily, fixed assets 
investment increased at a faster pace, market sales rose steadily, and import and e xport growth 
saw certain recovery. Consumer prices were basically stable, personal income continued to WT/TPR/G/300 • China  
 
- 5 - 
 
  increase, the supply of money and credit grew steadily, employment stayed at a generally stable 
level, and the balance of payment in current account has maintained basic equilibrium.  
2.4.  China's economy still confronts many difficulties and problems, while maintaining a generally 
stable development trend. Economic growth was under downward pressure, overcapacity 
remaining a prominent problem, and enterprises,  particularly small - and medium -sized enterprises 
facing difficulty in business operation. China's economy has come to a key period of transformation 
and upgrading. Deep -seated problems that have been  accumulated over time, are being  relieved , 
and the foun dation for economy turnaround is being consolidated.  
2.5.  During 2012 and 2013, China's gross domestic product (GDP) achieved stable growth while 
its growth rate slowed down. Its GDP in 2012 was RMB 51,947.0 billion  yuan. Calculated at 
comparable prices, it sho wed a growth of 7.7% in comparison with the previous  year. The year -
on-year increase of GDP in 2012 by quarter was respectively 7.9%, 7.4%, 7.3% and  7.8%. Its 
GDP in 2013 were RMB 56,884.5 billion  yuan, calculated at comparable prices, showing another 
7.7%  growth in comparison with last year. The year -on-year increase of GDP in 2013 by quarter 
was respectively 7.7%, 7.5%, 7.8% and 7.7%.  
Chart 2.1 China 's year-on-year GDP growth s by quarter, 2012 -13 
7.9%
7.4%
7.3%7.8%
7.7%
7.5%7.8%
7.7%
7.0%7.1%7.2%7.3%7.4%7.5%7.6%7.7%7.8%7.9%8.0%
GDP year-on-year
growth quarterlyChina GDP Year -on-Year Growth Quarterly
2012 -13
 
Source:  National Bureau of Statistics of China . 
2.6.  China 's consumer price index (CPI) dropped steadily in the first half of 2012. Although 
experiencing slight rise from the second half of 2012 to 2013, CPI stayed within a stable range. 
The overall level of consumer p rices increased by 2.6% in both 2012 and 2013 on the year -on-
year basis. The CPI rate of 2012 was 2.8 percentage points lower than that of 2011.  
2.7.  In terms of labor cost, there were altogether 25 provincial authorities nationwide that 
adjusted their minimum  wage standards in 2012. The average increase of minimum monthly wage 
was 20.2%. In 2013, 27 provincial authorities adjusted minimum wage standards with an average 
increase in the monthly minimum wages by 17%. Thanks to the adjustment, the minimum wage in 
Shanghai City was the highest nationwide, at RMB 1,620 yuan in 2013. The highest minimum 
hourly wage was RMB 15.2  yuan in Beijing City and Xinjiang Uygur Autonomous Region. The 
average monthly income of migrant workers was RMB 2,290 and 2,609 yuan respecti vely in 2012 
and 2013, showing a year -on-year increase respectively of 11.8% and 13.9%.  
2.2  Macroeconomic Policy  
2.2.1   New thinking  on macro economic  policy  
2.8.  The newly -elected Chinese Government was fully aware that, in face of the complex internal 
and external enviro nments, and the dilemma in macroeconomic adjustment, although it might be WT/TPR/G/300 • China  
 
- 6 - 
 
  possible to drive up economic growth with short -term stimulation policy, it would not help resolve 
issues at the deeper level. Therefore, the government took comprehensively in -depth  reform and 
opening up as the fundamental development policy. It implemented reform across all spectrum of 
the economic and social development, with an aim to promote development, transformation and to 
improve people 's livelihood with reform, and according ly to advance healthy and sustainable 
economic and social development.  
2.9.  The Chinese Government proposed new thinking on and ways of conducting macro -control 
and clearly defined a proper range within which the economy is expected to perform. When growth 
and employment do not fall below the prescribed minimum level and the inflation does not rise 
above the projected ceiling, the government will concentrate its efforts on improving the growth 
model and making structural adjustments. In the same vein, the Government would shun short -
term stimulation measures, deficit expansion or over issue of currency. It would adhere to the 
general keynote of seeking progress in stability and carry out centralized planning to stabilize 
growth, adjust structure, promote reform,  and benefit the people 's livelihood. It would implement 
proactive fiscal policy and prudent monetary policy, increase effective supply, release potential 
demand, calmly respond to short -term market fluctuation, and ensure that the running of 
economy would  not slip out of its reasonable range.  
2.2.2   Fiscal policy  
2.10.   The Chinese Government continued to implement a proactive fiscal policy and retain the 
continuity and consistency of its fiscal policy. In 2012 and 2013, financial deficits accounted for 
1.5% and 2.1% o f the GDP respectively. The outstanding balance on government debts in the 
central budget amounted to RMB 7,756.57 billion yuan at the end  of 2012, and 
RMB 8,675.046  billion yuan at the end of 2013, which accounted for 14.9% and 15.3% of the GDP 
respective ly. In 2012 and 2013, the government deficit and national debt were increasing along 
with the growth in the whole economy, but fiscal deficit rate remained at less than 2.1%.  
2.11.   Fiscal expenditure continued to favor weakly funded areas that would help promot e people 's 
livelihood, energy conservation, emission reduction, and ecological environment and so forth. In 
2013, the central government spent RMB 657.175 billion yuan in social security and employment, 
an increase of 14.2% than 2012 ; RMB 258.812 billion yuan in medicine and health, a surge of 
26.4%; RMB 388.391 billion yuan in education, a rise of 2.7%; RMB 53.155 billion yuan in culture, 
sports and media, a leap of 7.5%. Structural reduction of tax was improved together with the 
implementation of taxatio n system reform. The pilot program me of replacing business tax with 
value -added tax has been rolled out. Furthermore, tax incentives have also been introduced for 
small enterprises with low profits.  
2.2.3   Monetary policy  
2.12.   In 2012 and 2013, the Chinese Government  continued to adhere to a prudent, stable and 
consistent monetary policy. It also endeavored to make the policy more targeted, flexible and 
forward -looking. As China carried out timely and moderate pre -emptive adjustments and fine 
tuning of its monetary po licy, its financial reform was broadened along new horizons and provided 
the structural adjustment, economic transformation and upgrading with a stable monetary and 
financial environment. It also helped drive the Chinese economy onto a more sustainable pat h of 
development.  
2.13.   In 2012, the People 's Bank of China strengthened pre -emptive adjustment and fine tuning 
in a prospective manner, in response to changes of economic situation. It employed 
comprehensively monetary policy instruments, and prudential macro policy instruments such as 
open market operation, interest rate adjustment, and deposit reserve ratio to exercise two -way 
and flexible regulation over the liquidity in the banking system. These measures have promoted 
the reasonable and appropriate growth o f credit and loan as well. Since 2013, given the complex 
and volatile internal and external economic and financial situation, the People 's Bank of China has 
endeavored to explore new thinking on and fresh pattern of governance, retained administrative 
calmness and took decisive action with accuracy. For instance, the central bank does not ease or 
tighten up monetary policy. Furthermore, while continuing to apply traditional monetary policy 
instruments and prudential macro -control instruments, it has newly c reated and established 
liquidity management instruments, such as standing lending facility and short -term liquidity WT/TPR/G/300 • China  
 
- 7 - 
 
  regulation operations, so as to properly control the master safety valve of liquidity, and duly retain 
the reasonable and moderate growth of  both monetary loan and public financing.  
2.3  Adjusting  Economic Structure  and Transforming Development Pattern  
2.14.   China is now at such a crucial stage that without transformation and upgrading, we will not 
be able to achieve a sustained economic growth.  The Chi nese Government will continue to follow 
the path of transformation of the development pattern, focusing on adjusting and optimizing 
economic structures. In this regard, what is essential is to advance reform and innovation, tap into 
the potentials of domes tic demand, and unleash innovation and reform dividends in order to 
invigorate the market, form internal driving force for growth and upgrade Chinese economy.  
2.3.1   Adhering  to expanding domestic demand  
2.15.   Expanding domestic demand represents the major driving forc e for China 's economic 
growth, which is also the most important aspect in structural adjustment. The Chinese 
Government continues to bring into play the fundamental role of domestic consumption and the 
crucial role of investment and has committed itself to  building a long -term mechanism for 
expanding domestic demand.  
2.16.   The Chinese Government takes promoting consumption, particularly the household 
consumption, as the focal point in expanding domestic dem and. From March 2009 to 
January  2013, it implemented dir ect consumption stimulus program mes nationwide such as 
program mes for rural residents to purchase home appliances and motor vehicles and motorbikes, 
for people to trade in old motor vehicles and home appliances for new ones  (Among them, the 
program mes for rural residents to purchase motor vehicles and motorbikes were implemented 
from March 2009 to December 2010, and the program me for people to trade in old motor vehicles 
for new ones was implemented from 2009 to December 2010, and the program me for people t o 
trade in old home appliances for new ones was implemented from 2009 to December 2011). The 
Chinese Government continues to make efforts to increase the income of urban and rural residents 
and improve their capacities for consumption, by the means of incr easing spending on agriculture, 
rural areas and farmers, implementing structural taxation reduction and expanding employment.  
2.17.   The Chinese Government continues to push forward the construction of social security 
network in an all -round way. Basic pension i nsurance and basic medical insurance now fully cover 
both urban and rural residents in general. The standards of urban and rural subsistence allowances 
were raised respectively by 13.1% and 17.7% in 2013. The standards of basic pension for 
enterprise retir ees were raised by 10% on 1 January 2013 and 2014 respectively, benefiting more 
than 74 million enterprise retirees. In 2013, construction of 6.6 million government -subsidized 
housing units was started and 5.44 million such housing units were basically com pleted. Thanks to 
these efforts, over ten million people with housing difficulties moved to new homes.  
2.18.   China 's domestic consumer market continued to grow rapidly over the past two years. Its 
total retail sales of consumer goods reached RMB 21.03 trillion yuan and RMB 23.78 trillion yuan 
respectively in 2012 and 2013, showing nominal year -on-year growths of 14.3% and 13.1%. After 
adjustment for price changes, the increases in real terms were 12.1% and 11.5% respectively. 
The pattern of consumption of Chinese  residents also accelerated its upgrading. By the end of 
2012, the average per capita housing area in urban and rural areas were 32.9 m2 and 37.1 m2 
respectively, showing increases of 2.8 m2 and 5.5 m2 in comparison with 2007 respectively. Every 
one hundre d households of urban residents possessed 21.5 automobiles, representing an increase 
of 15.5 automobiles in comparison with 2007. A number of new forms and areas of consumption 
were very vigorous, the trade volume on the market of e -commerce exceeded RMB 1 0 trillion yuan 
with an increase of over 25% in 2013. Significant improvement is also shown in the consumption 
of service areas such as tourism, information and culture.  
2.19.   Consumption is both the key difficulty and the potential to the expansion of domestic  
demand. In the current stage, it cannot be underestimated that the role of investment plays in 
promoting economic growth. China has both investment capability and investment demand, but 
the key is to invest in the proper sectors, optimize the investment s tructure, and improve its 
performance and returns. Investment growth is conducive to promoting the economic restructuring 
and the transformation of development patterns, to boosting domestic demand and expanding WT/TPR/G/300 • China  
 
- 8 - 
 
  employment, and to strengthening the basis f or the economic and social development in the long 
term.  
2.20.   At present, priorities of public investment arranged in the central budget of China include 
low-income housing, infrastructure in the areas of agriculture, water conservancy, and railway, 
people 's livelihood projects such as those in social services, and also energy conservation, 
emission reduction, and ecological environment. In 2012, China 's total social fixed assets 
investment amounted to RMB 37.47 trillion yuan with an increase of 20.3%. Private investment, 
excluding rural households, increased by 24.8% and its proportion to total investment grew to 
61.4% with an increase of 2 percentage points in comparison with last year. In 2013, total fixed 
assets investment reached RMB 44.71 trillion yuan with a year -on-year increase of 19.3%. Private 
investment (excluding rural households) increased by 23.1% and its proportion to total investment 
grew to 63%.  
2.21.   In 2012 and 2013, China 's GDP both showed a growth of 7.7% on a year -on-year basis. 
Final consumptio n contributed 55% and 50% to the growth, capital formation contributed 47.1% 
and 54.4%, and net export contributed minus 2.1% and minus 4.4%.  
2.3.2   Accelerating the development of the service sector  
2.22.   Accelerating the development of the service sector is a major t ask for China to promote the 
adjustment of economic structure and the optimization and upgrading of industrial structure. It 
serves as not only an effective approach to strengthen comprehensive national power under the 
new situation in reform and opening u p and to but also an inherent requirement in expanding 
channels of employment and satisfying the growing demand of the people in their material and 
cultural life. Since the last review, the Chinese Government has continued to encourage non -
government inves tors to increase their investment in the service sector, taken various actions to 
deepen the reforms, and released the guiding opinions on promoting the development of 
information services, culture, elderly care, health and other service industries. The Ch inese 
Government has focused on promoting the development of emerging industries such as energy 
conservation and environment protection, and endeavored to strengthen a policy and institutional 
environment conducive to the development of the service sector.   
2.23.   Since the "Twelfth Five Year Plan", China 's trade in service has grown at a fast pace. In 
2012 and 2013, the total volume of import and export in service increased by respective 12.3% 
and 14.7% on a year -on-year basis. However, compared with trade in goo ds, service in trade 
develops at a relatively slow pace, with an imbalanced structure in import and export. In 2012 and 
2013, service trade accounted respectively for 10.8% and 11.5% in China 's total foreign trade 
volume, the figures being about half of th e world 's average standard. Service trade  deficits were 
respectively USD 89.7 bill ion and USD 118.46 billion.  
2.24.   In December 2012, the Chinese Government formulated the "Twelfth Five Year Plan" on the 
development of the service sector and proposed the goals of increasing the proportion of the 
service sector, improving the standard of the service sector, pushing forward the reform and 
opening up in the sector, and enhancing its capacity of creating jobs and attracting employment. 
The Chinese government strives  to increase another 4 percentage points on the proportion of the 
added value of the service sector in GDP by 2015 on top of the 43.2% in 2010, making it the 
largest contributor to GDP, and to promote the formation of an industrial structure mainly 
compose d of service economy in mega -cities. The proportion of employed population in the service 
sector to the total employed population will also be increased by 4 percentage points at the time in 
comparison with 34.6% in 2010.  
2.3.3   Pursuing innovation -driven develop ment and protecting intellectual property 
rights  
2.25.   China has been pursuing a long -term development strategy that pivots to innovation. 
Constant innovation is deemed as a genuine power for adjusting and upgrading economic 
structure. It is of great significanc e for China to highlight the importance of innovation at this 
epochal period of reform and transformation. The Chinese Government is committed to further 
promoting synergy between scientific innovation and economic development, expediting the 
establishment  of a new technological innovation system that is business -centered, market -oriented WT/TPR/G/300 • China  
 
- 9 - 
 
  and facilitates the combination of industry, academia and R&D institutions. China will continue to 
relentlessly promote the protection of intellectual property rights and make great efforts to foster a 
favorable market environment and an effective system that drives China 's innovation.  
2.26.   Since its last review, the Chinese Government has continued to strengthen its law 
enforcement in the IPR protection and the construction of  a long -term mechanism. China 's newly -
elected government retained the National Leading Group on the Fight Against IPR Infringement 
and Counterfeiting headed by a vice premier of the State Council. The government is also pushing 
forward the initiative to in corporate the outcomes of IPR protection against infringements and 
counterfeits into government performance evaluation system at different administrative levels. 
Thanks to China 's constant and highly aggressive law enforcement, IPR infringements and the 
manufacturing or selling of counterfeiting commodities have been effectively suppressed.  
2.27.   On 1 January 2013, the Regulations on Several Issues Concerning the Laws Applicable to 
the Trial of Civil Cases of Dispute on the Infringement of the Right of Communica tion through 
Information Network  promulgated by the Supreme People's Court took effect. China also amended 
a series of laws, regulations and rules concerning intellectual property rights such as the 
Trademark Law , the Regulations on the Protection of Compu ter Software , the Regulations on the 
Implementation of the Copyright Law , the Regulations on the Protection on the Right of 
Communication through Information Network , and the Regulations on the Protection of New Plant 
Varieties . The amount of compensation for IPR infringements has been raised, which is to the 
benefit of strengthening the administrative sanction and criminal punishment against IPR 
infringements.  
2.28.   In addition, the Chinese Government continues to proactively carry out the public legal 
educatio n on IPR across community and society. It organizes publicity and educational activities on 
special observance days such as the World Intellectual Property Day and the National Law System 
Publicity Day. News media is encouraged to cover typical cases on IP R infringement and 
counterfeiting activities in order to be responsive to concerns of the general public. The court trials 
of IPR cases are broadcast online, and the relevant information on those cases are publicized in 
accordance with legal requirements a nd procedures. These efforts will effectively involve the entire 
society to participate in IPR protection, meanwhile, law enforcement and judicial actions will be 
subject to public scrutiny. Thus, those proactive efforts are conducive to help maintain a fa ir and 
competitive market order.  
2.3.4   Advancing energy conservation, pollution reduction and industrial restructuring  
2.29.   The Chinese Government attaches great importance to conserving resources, protecting 
environment and addressing climate change. China is vigoro usly promoting energy conservation, 
emission reduction, and pollution prevention and control, through proactively curbing excess and 
outdated production capacity in certain industries. All these tasks are important component of 
China 's efforts in adjusting  industrial structure and transforming its economic development 
pattern. In particular, tackling severe production overcapacity is our priority in pushing forward the 
industrial restructuring now and in the years to come.  
2.30.   Since the last review, the Chines e Government continues to carry out the work to close 
down excess and outdated production capacity in the industries of high consumption and high 
emission such as steel, cement and electrolytic aluminium . It has further strengthened the 
comprehensive treat ment and control of air pollution caused by industrial enterprises, and 
accelerated the implementation of the transformation projects using clean production technologies. 
China raised market access criteria for certain industries, and strengthened complian ce 
enforcement with regard to industrial standards for admittance into technology, energy 
consumption, environment protection and safety. The Government also carried out clean 
production reviews in key industries such as steel, cement, chemistry, and nonfe rrous metal 
metallurgy.  
2.31.   From 2008 to 2012, China accumulatively closed down backward production capacities of 
117 million ton nes in iron -making, 78 million ton nes in steel production, and 775 million ton nes in 
cement. Accordingly, China 's energy consumptio n per GDP unit lowered by 17.2% and chemical 
oxygen demand and total sulfur dioxide emission respectively dropped by 15.7% and 17.5% 
respectively. In 2013, the energy consumption per GDP unit dropped by another 3.7%. Chemical WT/TPR/G/300 • China  
 
- 10 - 
 
  oxygen demand and emissions of  sulfur dioxide, ammonia nitrogen, nitrogen oxides dropped 
respectively by 2.9%, 3.5%, 3.1% and 4.7% respectively.  
2.3.5   Consolidating and strengthening the foundation for the development of 
agriculture and  rural areas  
2.32.   Agriculture is a key industry in terms of e xpanding domestic demand and adjusting 
economic structure. It is of great significance for the long -term stability and sustainable 
development of China 's economy and society. The Chinese Government unswervingly considers 
the issues of agricultural and rura l development as well as the farmers ' wellbeing as the top 
priority, in bid to safeguard food security, to increase farmers ' income, to promote agricultural 
modernization and to move forward rural development.  
2.33.   Since the last review, the Chinese Government has further increased investment for the 
development of agriculture, rural areas and farmers ' wellbeing. It has accelerated technical 
innovation and extension on agriculture, vigorously advanced agricultural mechanization, and 
intensified infrastructure co nstruction including high -standard farmland, irrigation systems, power 
grids, highways, and saf e drinking water projects. The G overnment has also moved forwarded the 
rural reform by guiding the orderly transfer of rural land contracted land -user rights, de veloping 
large-scale agricultural businesses of various types and meticulously launching rural poverty 
alleviation and development. The Chinese Government has also actively and steadily pressed 
ahead with the integrated development of urban and rural areas  and orderly granted urban 
residency to rural people who have moved to cities.  
2.34.   In 2012 and 2013, the per capita net income of rural residents in China saw continuous and 
fast increase and reached RMB 7,917 and RMB 8,896 yuan respectively, showing the year -on-year 
growth in real terms of 10.7% and 9.3%, which had been higher than the growth rate of per 
capita disposable income of urban residents for four consecutive years. The gap between the 
income of urban and rural residents continued to narrow. From 2010  and 2012, impoverished rural 
population reduced by nearly 67 million nationwide, rural poverty incidence dropped from 17.2% 
to 10.2%. On 31 October 2013, the Tibetan Medog County Highway, 117.3 k ilometers long in 
total, with a total investment of RMB 1.6 billion yuan was officially completed and opened to traffic 
after four and half years of construction. Medog County was no longer the only administrative 
county in China with no highway connection.  
2.4  Continuing to Deepen t he Reform Steadfastly  
2.35.   Reform is a b asic state policy that the Chinese Government adheres to over the long run. 
After China 's newly -elected government assumed their positions collectively, they made decisions 
on comprehensively deepening reform that they would set the reform of economic syst em as 
priority, collaboratively pushed forward the reform in other areas, and formed a joint force with 
the reforms in various areas. The core of economic system reform is to handle well the relationship 
between government and market and to let the market play the decisive role in the allocation of 
resources and bring the role of the Government into better play. At present, various specific work 
items of reform have already been carried out comprehensively.  
2.4.1   Reform of the administrative system  
2.36.   Speeding up the transformation of government functions and streamlining administration 
and delegating powers to lower levels are among the top priorities of the newly -elected Chinese 
Government. The institutional reform of the State Council, which took place in March 2013, 
centered round transforming functions and rationalizing the relationship between duties and 
responsibilities. In the reform, China has steadily pushed forward the super -ministry reform, 
separated the government functions from enterprise management in  the railway system, and 
integrated the administrative authorities responsible for affairs concerning health and family 
planning, food & drugs, press & publication, radio, film & television, ocean and energy. After the 
reform, the State Council further reduced four  subordinate ministerial authorities , two of which 
were ministries or commissions directly under the State Counci l. The State Council now has 
25 ministries and commissions apart from the General Office after the reshuffle.  WT/TPR/G/300 • China  
 
- 11 - 
 
  2.37.   The Chinese Government h as made a great stride in the reform of the administrative 
approval system, as it cut down investment items requiring administrative approval, slashed 
approval requirements in production and operating activities, and reduced qualification 
requirements as w ell as administrative and institutional fees and charges. During its first year in 
office, the newly -elected Chinese government has abolished or delegated to lower level 
governments 416 items previously subject to State Council 's examination and approval i n batches.  
2.38.   The State Council in December 2013 released the Catalogue of Investment Projects Subject 
to Government Verification (2013 Edition)  as an important part of the reform in the administrative 
approval system and investment regime . An enterprise is required to report to relevant authorities 
for verification only when it invests in fixed assets projects listed in the Catalogue . All the other 
investment projects not listed in the Catalogue  will be subject to filing procedures. The new 
Catalogue  revised  the original edition in July 2004, slashing items requiring administrative 
verification, and delegating verification power to lower levels. The new Catalogue  abolished, 
delegated or transferred totalling  49 verification  powers, including repealing 19  verification 
requirements and changing them into by fil ing requirements, delegating 20  verification powers to 
local governments, and transferring 10 verification powers from the National Development and 
Reform Commission to the competent industrial authorities  under the State Council. After the 
revision, the number of projects subject to the central -level verification decreased by about 60%.  
2.4.2   Reform of  the business r egistration system  
2.39.   On 28 December 2013, the Sixth Session of the Standing Committee of the Twel fth National 
People 's Congress adopted the resolution on the Amendment of the Corporate Law . The 
Amendment, which came into force on 1 March 2014, revised the registered capital requirements 
and other business registration issues. After that, the State Cou ncil promulgated in February 2014 
the Notice on Printing and Distributing the Plan on the Reform of Registered Capital Registration 
System and correspondingly abolished or revised the administrative regulations and rules related 
to the company registered c apital registration system. This reform significantly lowered the 
registered capital threshold for enterprises. With a few exceptions, the minimum registered capital 
requirements, which was RMB 30,000 yuan for a limited liability company, RMB 100,000 yuan for a 
one-person limited liability company and RMB 5,000,000 yuan for a joint stock limited company 
have been removed; no more minimum first installment of capital injection is required and no cash 
is required to be paid as capital contribution upon the in corporation of a company, and the system 
of paid -in capital is replaced by a subscribed capital system. A series of other specific measures 
are also adopted to facilitate the registration of enterprises so as to provide optimized business 
environment for t heir development.  
2.40.   Encouraged by the favorable news of the reform of business registration system, the 
number of newly -registered private enterprises reached 2,327,300 in 2013, showing a year -on-
year increase of 30% and accounting for 93.0% of all the newl y-registered enterprises. By the end 
of December 2013, there were in total 15.278 million enterprises  nationwide, among which 
12.539  million were private. The total number of private enterprises showed a year -on-year 
growth of 15.5%, and its proportion ros e from 79.4% in the end of 2012 to 82.1% in the end of 
2013.  
2.4.3   Reform of state -owned enterprises and development of the non -public sector  
2.41.   In order to promote the joint development of economic entities regardless of their forms of 
ownership, the Chinese Gove rnment has constantly enhanced its support to SMEs, particularly 
small enterprises with low profits. Effective from 1 August 2013, for the enterprises or non -
enterprise entities which are small -scale taxpayers of Value -Added Tax ("VAT") with monthly sales 
not more than RMB 20,000 yuan, the VAT shall be temporarily exempted; and for the enterprises 
or non -enterprise entities which are taxpayers of Business Tax ("BT") with a monthly turnover not 
more than RMB 20,000 yuan, the BT shall be temporarily exempted.  The government sweetened 
further its preferential fiscal policy on small enterprises with low pr ofits, effective from 
1 January  2014 to 31 December 2016. As long as the annual taxable income of small enterprises 
with low profits is not more than RMB 100,0 00 yuan, its income shall be accrued as taxable 
income with a 50% deduction, and its enterprise income tax shall be paid with a reduced tax rate 
of 20%.  WT/TPR/G/300 • China  
 
- 12 - 
 
  2.42.   In May 2010, the State Council promulgated Several Opinions on Encouraging and Guiding 
the Healthy Dev elopment of Private Investment  and specifically proposed that private capital 
would be encouraged to enter industries and sectors that were not explicitly prohibited by laws, 
regulations and rules. By the end of June 2012, the formulation of 42 specific im plementing rules 
has completed and thus enabled private capital to enter into relevant sectors in a legal and 
feasible fashion.  
2.43.   Thanks to years of reform, China 's state -owned enterprises have integrated themselves into  
market economy. The steps  in the nex t phase  of reform  will include optimizing the distribution and 
structure of state -owned economy and ensuring the state -owned capital increases its input into 
public -welfare enterprises. In natural monopoly industries in which state -owned capital continues 
to be the control ling shareholder, China will carry out reform focusing on separation of government 
administration from enterprise management, separation of government administration from state 
assets management, franchise operation, and government oversig ht, and will separate networks 
from operations and decontrol competitive businesses based on the characteristics of different 
industries . China will also accelerate the development of mixed -ownership economic entities, 
allowing non-state capital to partici pate in a number of projects in the areas such as banking, 
petroleum, electric power, railway, telecommunication, resource exploitation and public utilities. 
Corporate governance structure that features coordinated operation and effective check and 
balance  will be further established and improved. Professional manager system will be established 
and the role of entrepreneurs will be brought into better play. China will continue to improve 
budgeting for state capital operation and raise the percentage of earn ings from state capital turned 
over to public finance by central government -owned enterprises.  
2.44.   As of 2013, the number of state -owned enterprises for which the State -Owned Assets 
Supervision and Administration Commission of the State Council (SASAC) perfor med the 
responsibilities of an investor was 113,  further decreased from 117  since the last review . By the 
end of June 2013, there were altogether 353 listed companies controlled by central enterprises 
and their subsidiaries. 55.8% of the total assets of ce ntral enterprises, 59.1% of their net assets 
and 60.8% of their operating revenue came from listed companies. From the publishing of Several 
Opinions on Encouraging and Guiding the Healthy Development of Private Investment  in 2010 to 
the end of 2012, there  were 4,473 cases of the transaction of the state -owned property right of 
various kinds of enterprises in which private investment participated as transferee, accounting for 
81% of the total of the transactions. The value of such cases totalled RMB 174.9 b illion yuan, 
accounting for 66% of the total value of the transactions. Since the last review, the reform of 
operating budget of state -owned capital also continued to be pushed forward. From the year of  
2014, the proportion of the state -owned capital earnings, those central government -owned 
enterprises should turn over to public financial authorities , will be raised by another five 
percentage points on the basis of the present level.  
2.4.4   Reform of fiscal and taxation system s  
2.45.   In recent years, the Chinese Gover nment vigorously pushed forward fiscal system reform. 
A framework of a government budget system was formulated, consisting of public finance budget, 
government fund budget, budget for state capital operations and budget for social security fund. 
Fiscal tra nsparency has also been constantly improved. In the area of taxation system, the 
taxation systems previously applied separately to the Chinese and foreign -invested enterprises are 
unified into a single system, the transformation of value -added tax was real ized, the pilot 
program me of levying value -added tax in lieu of business tax was implemented, and resources tax 
system was improved. The reform of fiscal and taxation system continuously contributed to 
accelerating the transformation of the pattern of econ omic development.  
2.46.   Since the last review, the Chinese Government focused on pushing forward the pilot 
program me of levying value -added tax in lieu of business tax, gradually expanding the scope of 
coverage of the pilot program me. The pilot program me was fi rstly implemented in Shanghai on 
1 January 2012 in six service sectors, including transportation (excluding railway transportatio n), 
R&D and technology, information technology, cultural and creative industry, logistics and auxiliary 
industries, tangible mo vable property leasing, and authe ntication and consultancy. 
On 1 September 2012, Beijing, Jiangsu, Anhui, Fujian, Xiamen, Guangdong, Shenzhen, Tianjin, 
Zhejiang, Ningbo and Hubei were included into the pilot program me. On 1 August 2013, the pilot 
program me was rolled out nationwide and the production, publishing and broadcasting of radio WT/TPR/G/300 • China  
 
- 13 - 
 
  and television works were also included. From 1 January 2014, railway transportation and postal 
service were included into the pilot sectors.  
2.47.   The reform of levying value -added tax in lieu of business tax is a priority in China 's 
deepening reform of the financial and taxation system. By the end of 2013, about 2.7 million 
enterprises were covered by the pilot program me with an increase of 1.67 million in comparison 
with the la st year, or an increase by 1.6 times. Enterprises applicable to the pilot program me 
enjoyed tax reductions and, at the same time, their downstream enterprises had also benefited 
from tax reductions in general because of the increase of creditable VAT. In 2 013, the overall size 
of tax reduction exceeded RMB 140 billion yuan. In the next step, the Chinese Government will 
further expand the pilot program me to cover other service industries such as telecommunications, 
life services, construction, real estate an d finance. To a certain extent, this reform resolves the 
issue of double taxation, alleviated the tax burdens of the enterprises, and optimized taxation 
system. The reform also accelerated the development of the service industries, boosted innovation 
and t ransformation in the manufacturing industries, and increased enterprises ' competitiveness in 
the export sector.  
2.4.5   Reform of the financial system  
2.48.   At the time of the last review in June 2012, the People 's Bank of China maintained only an 
upper limit on deposi t rates and a lower limit on loan rates for the RMB business of financial 
institutions, while interest rates in monetary market and bond market as well as those of foreign 
currency deposits and loans had already been liberalized. On 20 July 2013, the Peopl e's Bank of 
China further lifted the limit on loan rates of financial institutions. On 25 October 2013, the Loan 
Prime Rate Centralized Quote and Publish Mechanism was in full operation. On 9 December 2013, 
the Interim Measures on the Administration of Int erbank Negotiable Certificates of Deposit  was 
implemented. The interest rates liberalization reform has made new steps forward and is 
advancing in a steadily and orderly manner.  
2.49.   Market -based RMB exchange rate formation mechanism was further improved. The weight 
of market force in determining exchange rate was increased, the RMB's elasticity to exchange rate 
fluctuation was enhanced and the basic stability of RMB 's exchange rate was retained at a 
reasonable and balanced level. By the end of 2013, the centra l parity rate of RMB against US D 
reached RMB 6.0969 yuan and appreciated by 3.09% in comparison with the exchange rate at the 
end of the last year. From the reform of the RMB exchange rate formation mechanism in 2005 to 
the end of 2013, the exchange rate o f RMB against US D accumulatively appreciated by 35.75%. 
According to the calculation of the Bank for International Settlements, the nominal effective 
exchange rate of RMB appreciated by 32.05% and its real effective exchange rate appreciated by 
42.15%, bot h on a year -on-year basis. On 15 March 2014, the People 's Bank of China declared 
that, since 17 March, the range of fluctuation of the exchange rate of RMB against US D on 
interbank foreign exchange spot market would be expanded to 2%. This is the third exp ansion of 
the range of fluctuation of RMB exchange rate after 2007 and 2012, which indicates that the 
marketization reform of the RMB exchange rate formation mechanism is moving forward.  
2.50.   The process of RMB convertibility under capital account advanced ste adily. On 19 November 
2012, the State Administration of Foreign Exchange published the  Notice on Further Improving and 
Adjusting the Policy on the Administration of Foreign Exchange in Foreign Direct Investment and 
announced that the administration of fore ign exchange in foreign direct investment would be 
greatly simplified from 17 December 2012. Among 50 items subject to administrative examination 
and approval, 35 were removed and 14 were simplified and combined. The foreign exchange in 
foreign direct inve stment was generally convertible. The Chinese Government further improved the 
system for the administration of qualified foreign institutional investor (QFII), accelerated the 
examination of the QFII investment quota, and positively pushed forward and impr oved the 
administration of RMB qualified foreign institutional investor (RQFII). In March, 2013, the Chinese 
Government published the revised Measures for the Pilot Projects on the Investment in Domestic 
Securities by RMB Qualified Foreign Institutional In vestor  and further expanded the range of RQFII 
institutions and the scope of investment. By the end of March 2014, altogether USD 53.578 billion 
domestic securities investment quota was approved to 241 QFII institutions and accumulatively 
RMB 200.5 billion  yuan investment quota was approved to 62 RQFII institutions. In the beginning 
of May 2013, the State Administration of Foreign Exchange published the  Measures for the 
Administration of the Registration of Foreign Debts to further simplify the administrati on of foreign WT/TPR/G/300 • China  
 
- 14 - 
 
  debts and establish the framework for the administration of foreign debts, of which foreign debts 
registration system is the core.  
2.51.   The reform of financial institutions advanced further. In December 2012, the People's 
Insurance Company (Group)  of China Limited was listed in Hong Kong. In December 2013, the 
China Cinda Asset Management Co., Ltd. was also listed in Hong Kong and became the first listed 
national financial assets management company. In the same month, China Everbright Bank was 
also listed in Hong Kong. The pilot project on the first batch of five private banks would also be 
carried out in Tianjin, Shanghai, Zhejiang and Guangdong.  
2.4.6   Other reform measures  
2.52.   Since the last review, breakthrough was achieved in China 's reform of the railwa y system 
and the separation of administrative functions from enterprise operations was realized. In the 
institutional reform of the State Council in 2013, the administrative functions and duties of the 
original Ministry of Railway in drawing up plans and p olicies on development of railway were 
reassigned to the Ministry of Transport. Other administrative functions and duties of the original 
Ministry of Railway were undertaken by the newly -established National Railway Administration, 
which was under the Mini stry of Transport. China Railway Corporation was established to take over 
the enterprise functions of the original Ministry of Railway. In August 2013, the State Council 
promulgated the Opinions on the Reform of the Railway Investment and Financing System and the 
Acceleration of Railway Construction  to fully open up the market of railway construction, to 
encourage social capital to invest in building railways, to push ahead the market -oriented reform 
of railway transport pricing, and to require China Railwa y Corporation to stick to market -oriented 
business operations as an enterprise and accelerate the construction of modern corporate system. 
In 2013, the mileage of railways in operation in China exceeded 100,000 kilometers, in which 
high-speed railways reac hed 11,000 kilometers, ranking the first place in the world.  
2.53.   The Chinese Government continued to push forward comprehensively the construction of 
social security system. In 2012, the new rural pension insurance program me and the pension 
insurance program me for urban residents, which were launched successively in 2009 and 2011, 
were implemented nationwide. This indicated the establishment of a basic pension insurance 
system that covered all the people in China. Up to the end of 2013, the total population wh o 
participated in the new rural pension insurance and the urban resident pension insurance reached 
498 million. Among them, 138 million urban and rural senior citizens received pension benefits by 
month. Under these two program mes and the basic old -age ins urance system for urban workers, 
the total population participating in pension insurance nationwide ha s reached 820 million, with 
218 million people among them receiving the benefits of basic  pension insurance. 
In February  2014, the State Council issued th e Opinions on Establishing a Unified Basic Pension 
Insurance System for Urban and Rural Residents and decided that the new rural pension insurance 
and the urban resident pension insurance be merged in implementation and that a unified basic 
pension insuran ce system for both urban and rural residents be established nationwide.  
2.54.   The reform of medical and healthcare system continued to be deepened. The Chinese 
Government is promoting proactively the construction of basic medical insurance systems for the 
whole population. On top of stabilizing the participation percentage of the basic medical insurance 
schemes for non -working urban residents, urban workers and the new rural cooperative medical 
care system as well as improving the insurance benefits, it is vigoro usly promoting the 
establishment of social security mechanisms against major and critical diseases and also 
assistance mechanisms for medical care. The national system for essential drugs and the 
mechanism for its functioning at grassroots levels are being  consolidated. A comprehensive reform 
of public hospitals is being advanced. The Chinese Government has also sped up the opening -up of 
the medical services market and promoted participation of social resources in medical facilities. 
Since the last review, coverage of the three basic medical insurance schemes has been stably over 
95%, the essential drug system has covered over 80% of village clinics, 28 provincial authorities 
have put in place pilot projects providing urban and rural residents with insurance  against major 
and critical diseases, and the standard for financing urban and rural residents for their basic 
medical insurances has been further raised. The breakthroughs that China has achieved in medical 
and healthcare and social security systems have played a positive role in improving people 's 
livelihood and taking up the challenge of population aging and are of great significance in 
expanding domestic demand and accelerating the transformation of the economic development 
pattern.  WT/TPR/G/300 • China  
 
- 15 - 
 
  3  TRADE AND INVESTMEN T DEVELOPMENT AND RE LATED POLICIES  
3.1.  In views of China, opening up and reform have been launched as integral parts of the same 
initiative as they are mutually reinforcing. China 's new leadership put forward that one of the key 
tasks in deepening economic sy stem reform by centering on the decisive role of the market in 
allocating resources is to speed up improving an open economic system. To adapt to the new trend 
of economic globalization, China continuously promotes domestic openness together with the 
outside world, better integrate the "bring in" and "go global" strategies, facilitates the orderly and 
free flowing of international and domestic factors of production, highly efficient resource allocation 
and in -depth market integration, and fosters new advant ages in participating in and leading 
international economic cooperation and competition at a faster pace so as to promote reform 
through opening up.  
3.1  Trade a nd Investment Development  
3.1.1   Trade d evelopment  
3.2.  In 2012 and 2013, China 's total merchandise imports an d exports reached 
USD 3,867.1  billion and USD 4,160 billion, up 6.2% and 7.6% year -on-year respectively, of which, 
export values were respectiv ely USD 2,048.7 billion and USD 2,209.6 billion, both showing year -
on-year growth of 7.9%, and import values w ere USD 1,818.4 billion and USD 1,950.4 billion, up 
4.3% and 7.3% year -on-year respectively.  
3.3.  China 's merchandise trade continues to grow and its global market share has been further 
increased. In 2012, under the circumstance that global merchandise trade vol ume only grew by 
0.2%, China 's merchandise  trade volume still ranked the second place in the world and its share 
on the global market was further increased. Of these figures, China 's export accounted for 11.2% 
of the global total, showing an increase of 0. 8% in comparison with last year, and ranked the first 
place in the world for four consecutive years. China 's import amounted to 9.8% of the global total, 
showing a rise of 0.3% in comparison with the last year, and ranked the second place in the world 
for four consecutive years. In 2013, China became the world 's largest trading power in goods. In 
this area, its export retained its top place on the globe and took up 11.8% of the global total, 
showing an increase of 0.6% in comparison with last year. Its impo rt was still the second place on 
the globe and amounted to 10.3% of the global total, showing an increase of 0.5% in comparison 
with last year.  
Chart 3.1 Import and export value in China's goods  trade , 2009 -13 
FY2009 FY2010 FY2011 FY2012 FY2013
Import 10055 13962 17435 18184 19504
Export 12017 15777 18985 20487 2209605,00010,00015,00020,00025,00030,00035,00040,00045,000FY 2009 -2013 Import and Export Value
in China's Goods Trade
Unit: 100 million (USD)
Source:  Statistics of the China Customs.
 
Source:  Statistics of the China Customs.  
3.4.  In the past two years, China 's merchandise trade has shown following characteristics: First of 
all, imports grew continually and China 's surplus in trade in goods stayed within a reasonable 
range. In 2012 and 20 13, China 's surpl uses in trade in goods were USD 230.3 billion and WT/TPR/G/300 • China  
 
- 16 - 
 
  USD 259.2  billion, showing year -on-year increases of 48.7% and 12.6% respectively and 
accounting for 5.96% and 6.23% of its total imports and exports.  
3.5.  Second, the growth speed of processin g trade dropped and its share in total exports and 
imports showed an obvious trend of decline. In 2012 and 2013, the total imports and exports 
under processing trade were respect ively USD 1,344 billion and USD 1,357.8 billion, respectively 
showing year -on-year increases of 3% and 1%, and accounted for 34.8% and 32.6% of total 
imports and e xports, down 1 percentage point  and 2.2 percentage points year -on-year 
respectively.  
3.6.  At the same time, general trade achieved steady growth. In 2012 and 2013, the total i mport 
and export value under general trade reached USD 2,009.8 billion and USD 2,197.3 billion, 
showing year -on-year growths of 4.4% and 9.3%, and accounted for 52.0% and 52.8% of total 
imports and exports respectively. Of these figures, the exports under general trade accounted for 
48.2% and 49.2% respectively of the total exports, and the imports under general trade 
accounted for 56.2% and 56.9% respectively of the total imports.  
3.7.  In addition, China 's trade partners became more diversified. The imports an d exports with its 
three traditional major trade partners including the United States, the European Union and Japan 
retained growth but their shares has been falling. The trade with the ASEAN and other emerging 
markets maintained fairly faster growth trend . In 2012 and 2013, the total bilateral import and 
export values between China and the United States, and the trade value between China and the 
European Union together with that between China and Japan, are respectively USD 1,360.2 billion 
and USD 1,392.6 billion, showing year -on-year increases of 0.3% and 2.3% respectively, and 
accounted for 35.2% and 33.5% of total import and export value. During the same period, the 
total import and export value between China and ASEAN reached USD 400 billion and 
USD 443.6 billion respectively, showing year -on-year increases of 10.2% and 10.9%, and its 
proportion to total import and export value rose from 10.3% to 10.7%.  
3.8.  Private enterprises saw a trade growth rate significantly faster than the overall level. In 
2012, the  private enterprises exported USD 769.9 billion, an increase of 21% and 13.1 percentage 
points higher than overall exports growth, and  their import value reached USD 451.1 billion, an 
increase of 17.1% and 12.8 percentage points higher than overall imports  growth. In 2013, the 
private enterprises exported USD 916.7 billion, an increase by 19.1% and 11.2 percentages points 
higher than overall export growth, and their import value USD reached 576.3 billion, an increa se of 
27.8% and 20.5 percentage  points high er than overall import growth.  
3.9.  Trade in services developed rapidly but services trade deficit continued to expand. In 2012 
and 2013, China 's total imports and exports of services reached USD 470.6 billion and 
USD 539.6  billion respectively, showing a year -on-year growth of 12.3% and 14.7%. The total 
values of service export  were USD 190.4 billion and USD 210.6 billion in 2012 and 2013 
respectively, showing a year -on-year growth of 4.6% and 10.6%, which indicated a quickened 
growth in serviced trade. The to tal values of service imports were respect ively USD 280.1 billion 
and USD 329.1 billion respectively, showing a year -on-year growth of 18.2% and 17.5%, which 
was notably higher than that of service exports, and thus leading to the expansion of deficit in 
services trade. In 2013, services trade deficit expanded from USD 89.7 bill ion (2012) to 
USD 118.46 billion, mainly attributing to the increases in the sectors such as tourism, 
transportation, royalties for using proprietary rights and franchise royalties, and etc.  
3.10.   The export of high value -added services showed fairly significant growth and became an 
important driving force for restructuring China 's trade in services. In 2012, the export of 
consultancy, computer and information services, advertising, financ ial service, and royalties for 
using proprietary rights and franchise royalties grew by 17.8%, 18.6%, 18.2%, 122.5% and 
40.1% respectively in comparison with last year. In 2013, the export of consultancy, computer 
and information service, financial service  and insurance service grew by 6.8%, 21.2%, 54.2% and 
20% respectively in comparison with last year.  
3.1.2   Inward and outbound direct investment  
3.11.   The foreign direct investment in China rose steadily. In 2012, the foreign investment around 
the globe dropped by 1 8%. The foreign investment in China only dropped slightly and China WT/TPR/G/300 • China  
 
- 17 - 
 
  remained the second largest country in terms of attracting global foreign investment. In 2012, 
China saw the incorporation of 24,925 new foreign -invested enterprises, with a year -on-year d rop 
of 10.1%. The total realized value of foreign investment reached USD 111.72 billion, showing a 
year-on-year drop of 3.7%. In 2013, the foreign investment in China showed steady recovery and 
China retained the second place in the world. In 2013, the n umber of newly approved 
foreign -invested enterprises was 22,773 in China, with a year -on-year drop of 8.63%. On the 
other hand, the realized amount of  foreign investment reached USD 117.586 billion yuan, showing 
a year -on-year growth of 5.25%.  
3.12.   The sectorial  distribution of foreign investment was further optimized, and the proportion of 
the service sector FDI continued to exceed that of the manufacturing sector. In 2012, the realized 
value of foreign investment in  the service sector reached USD 53.84 billion,  showing a year -on-
year drop of 2.6%. Accounting for 48.2% of China 's total foreign direct investment, the services 
sector 's share was 4.5 percentage points higher than that of manufacturing sector. In 2013, the 
realized value of foreign investment in  the service sector reached USD 61.451 billion, showing a 
year-on-year increase of 14.2%, and accounted for 52.3% of the total foreign direct investment in 
China, 5.6 percentage points higher than that of the manufacturing sector.  
3.13.   The proportion of foreign inve stment in the central and western regions in China expanded 
steadily. In 2012, the realized values of foreign investment in the eastern regions and that in the 
central and western r egions reached respectively USD 92.51 billion and USD 19.21 billion, 
respec tively accounting for 82.8% and 17.2% of the total foreign investment in China. In 2013, 
the realized values of foreign investment in the eastern regions and that in the central and western 
regions, reached respecti vely USD 96.878 billion and USD 20.7 bill ion, respectively accounting for 
82.4% and 17.6% of the total foreign investment in China.  
3.14.   China 's outbound direct investment showed expansion of scope and strong trend of growth. 
In 2012, the non -financial direct investment made by investors from mainland  China went to 
4,425 enterprises located in 141 countries and regions. Accumulatively, non -financial direct 
investme nt with the total amount of USD 77.73 billion was realized, showing a year -on-year 
increase of 13.3%. In 2013, investors from mainland China  made non -financial overseas direct 
investment in 5,090 enterprises in a total of 156 countries and regions. Accumulatively, non -
financial direct investme nt with the total amount of USD 90.2 billion was realized, showing a year -
on-year increase of 16.8%. G uangdong, Shandong, and Jiangsu ranked the top three places of 
overseas foreign direct investment.  
3.15.   China 's outbound direct investment involves various sectors in national economy. In 2012 
and 2013, the top four sectors attracting investment included lea sing and business services 
(USD 26.74 billion, ac counting for 30.4% in 2012; USD 29.54 billion, accounting for 32.7% in 
2013), mining (USD  13.54 billion, ac counting for 15.4% in 2012; USD 20.16 billion, accounting for 
22.4% in 2 013), wholesale and retail (US D 13.05 billion, acc ounting for 14.8% in 2012; 
USD 13.67 billion, accounting for 15.2% in 2013 ), and manufacture ( USD 8.67 billion, a ccounting 
for 9.9% in 2012; USD 8.68 billion, accounting for 9.6% in 2013).  
3.2  Promoting Balanced and Sustainable Development  of Trade a nd Investment  
3.16.   Developing foreign trade and participating in international division of labor played an 
irreplaceable role in China 's economic development. Since 2012, global trade continues to be in 
the doldrums and China faced multiple challenge s, such as the rising costs of business operation 
and the slowdown of growth in external demand. Confronted with new situation, the Chinese 
Government has continued the efforts to enhance coordination and sustainability of foreign trade 
development. It has  proactively endeavors to transform the development pattern of foreign trade, 
to restructure the foreign trade and to strengthen pragmatic cooperation with its trading partners, 
in order to achieve mutual benefit, and common development.  
3.2.1   Striving to balan ce growth of import s and export s 
3.17.   The Chinese Government adheres to coordinated development of import and export and 
strives for trade balance. Since 2012, the Chinese Government continues to integrate import with 
domestic demand expansion, improve import p romotion policies, broaden import channels, 
optimize the structure of trade balance, and keep trade surplus within a proper range.  WT/TPR/G/300 • China  
 
- 18 - 
 
  3.18.   The Chinese Government continues to implement interim tariff rates on certain imported 
products which were lower than the ap plied MFN rates. In 2013, the commodities with lower 
annual interim import tariff increased from over 730 products at HS 8 -digit level in 2012 to over 
780 products at HS 8 -digit level. The average tariff rate was about 4.4% and, in comparison with 
the appl ied MFN rate, the margin of preference reached 56%. In 2014, the number of imported 
goods with lower interim tariff rates was lowered to over 760 HS items, but the average margin of 
preference rose to 60%. Thus import was further increased to satisfy peopl e's consumption needs 
and to meet the needs required in the agriculture and husbandry production and in the domestic 
adjustment of industrial structure.  
3.19.   The Chinese Government continued to implement the policy of exempting import tariffs and 
import VAT fo r key components and spare parts of major technical equipment and products and 
related raw materials so as to expand import and enhance the adjustment and upgrading of 
industrial structure. On 1 March 2014, the newly adjusted catalogue concerning major tec hnical 
equipment and products, and their imported key components, spare parts and raw materials took 
effect.  
3.20.   The Chinese Government further simplified import administration procedure. In July 2012 
and September 2013, the Ministry of Commerce respectively removed the automatic import 
licensing administration of 27 products and 130 products at HS 10 -digit level. The online license 
application is now moving forward smoothly.  
3.21.   In addition, the Chinese Government has actively carried out trade promotion activit ies, 
made efforts to enhance multilateral and bilateral communication and cooperation, and to improve 
the public service. It has entrusted trade promotion institutions to organize import procurement 
and support various industries and enterprises to carry o ut trade promotion activities abroad. It 
has also encouraged those well -known exhibitions and fairs to expand their functions into import 
field, and to attract trading partners to China for holding exhibitions and carrying out business 
negotiations. The Ch inese government has built public service platforms for foreign trade 
promotion and strengthened information disclosure, trade policy introduction, information 
consultation, trade barrier complaint and intellectual property right protection. At the end of 2013, 
the Chinese import promotion website  www.import.org.cn  started its trial operation.  
3.2.2   Acceleratin g the transformation of foreign -trade development pattern s 
3.22.   In order to adapt to the change of international economic  situation and the pattern of 
domestic economic development, the Chinese Government has continued to promote the 
adjustment of the pattern of foreign trade, centering around the goals of stabilizing trade growth, 
adjusting the foreign trade, and promoting trade balance. It also has endeavored to promote the 
shift of foreign trade from relying on the advantages  of cost and price to utilizing overall 
competitive advantages. It guided the transformation and upgrading of processing trade and 
moved "Made in Chin a" up towards the high end of global value chain, expanded the pilot projects 
in cross -border e -commerce, accelerated the development of trade in service and service 
outsourcing, and adhered to the coordinated development of trade in goods and trade in ser vices.  
3.23.   The Chinese Government has accelerated promoting the transformation and upgrading of 
processing trade, and encouraged processing trade enterprises to extend industry chain and value -
added chain, and increased the added value of products. Since the l ast review, the Chinese 
Government has revised several department rules regarding processing trade, respectively 
concerning the domestic distribution of bonded goods, the supervision and administration on 
processing trade goods, and the third place process ing trade, etc. It also streamlined the 
regulatory policies regarding processing trade in the special customs supervision area s. 
In October, 2012, the State Council issued the Guiding Opinions on Promoting the Scientific 
Development in the Special Customs Supervision Areas . The existing Special Customs Supervision 
Areas in various forms including export processing zone, bonded logistics park, cross -boundary 
industrial zone, bonded port and qualified bonded zones will be gradually integrated into 
comprehensi ve bonded zones so as to improve the diversified function of such areas including 
bonded processing, logistics and service, and to guide processing trade to concentrate in such 
areas.  WT/TPR/G/300 • China  
 
- 19 - 
 
  3.24.   China explored policies and measures on accelerating the development of  cross-border e -
commerce and made endeavors to push forward the construction of the supporting systems of 
logistics, payment, supervision and administration, and credit. In May, 2012, the General 
Administration of Customs led in implementing the pilot prog rammes of cross -border e -commerce 
business service in the cities of Shanghai, Chongqing, Hangzhou, Ningbo and Zhengzhou. On such 
basis, the State Council circulated in August 2013 the Opinions on Implementing Relevant Policies 
on Supporting Cross -Border E -Commerce Retail Export formulated by the Ministry of Commerce 
with other departments, proposed supportive policies on the construction of relevant system in the 
areas of customs regulation and control, export inspection, foreign exchange collection and 
settlement, cross -border payment service, taxation and credit system, which was implemented in 
the regions with proper conditions on 1 October 2013. The cross -border e -commerce business is 
vital to expand foreign trade increments, transform the pattern of eco nomic development, reduce 
the trading cost and strengthen the international competitiveness of the enterprises, and bring 
new opportunities to more enterprises, particularly SMEs and small enterprises with low profit.  
3.25.   China advanced the strategy of "win b y good quality" and further imposed more 
requirements on quality and safety of exported goods. The Chinese Government actively carried 
out relevant activities such as the "Year of Enhancing Goods Quality in Foreign Trade" and the 
special campaigns to crack  down on the counterfeit and fake goods and products with infringement 
of intellectual property rights exported to Africa so as to enable the enterprises to focus on the 
quality of their products, and thus improve the quality of goods.  
3.26.   China vigorously de veloped service outsourcing and promoted the rapid development of 
service trade. Since 2012, the Chinese Government has released guiding documents concerning 
trade in services, such as The Outline for the Development and Planning of China 's International 
Service Outsourcing Industry (2011 -2015)  and The Opinions on Accelerating the Development of 
Foreign Culture Trade , and has implemented relevant policies on the pilot program me of levying 
Value -Added Tax on certain service sectors in lieu of Business Tax, a nd has established and 
improved supporting system to enhance service trade development in order to help the enterprises 
for trade in service to explore new market and prevent market risks.  
3.2.3   Improving trade facilitation  
3.27.   Since the last review, the RMB settl ement business for cross -border trade and investment 
retained stable and orderly growth. In June 2012, the RMB settlement business for cross -border 
trade was implemented for all kinds of transactions. All import and export enterprises could select 
RMB for quotation, settlement and payment. In July 2013, the procedure of cross -border RMB 
business settlement was further simplified and the efficiency was further improved. In 2013, the 
RMB settlement amount for cross -border trade reached RMB 4.63 trillion yuan accumulatively and 
grew by 57% in comparison with the figure of 2.94 trillion yuan last year. The RMB settlement 
business for direct investment amounted to 533.7 billion and grew by 90% compared with the 
figure of 280.2 billion last year.  
3.28.   The People 's Ban k of China continued to sign bilateral local currency swap agreements with 
the central banks or currency authorities in certain countries and regions. Up to October 2013, the 
People 's Bank of China has established currency swaps with 23 central banks or cu rrency 
authorities with the total size of the swap facility exceeding RMB 2.5 trillion  yuan. 
3.29.   The facilitation of border procedures such as customs and quality inspection saw further 
improvement. The General Administration of Quality Supervision, Inspection  and Quarantine and 
the General Administration of Customs adjusted the catalogue on the entry and exit commodities 
subject to entry–exit inspection and quarantine. Effective from 15 August 2013, 1,507 general 
manufactured industrial goods at HS 10 -digit le vel are no longer subject to export commodity 
inspection. Among which, 1,420 commodities at HS 10 -digit level are removed from the  Catalogue 
of the Entry -exit Commodities Subject to the Inspection and Quarantine by Entry -exit Inspection 
and Quarantine Ins titution.   
3.30.   Reform on cross -region clearance was further streng thened. Started from 
1 November  2013, China has deepened the reform on the cross -region clearance among the 
customs nationwide. The clearance model of "declaration and release in registered cust om" would 
be applied to AA -grade enterprises, which means such enterprises may choose to the local WT/TPR/G/300 • China  
 
- 20 - 
 
  customs authorities where they are registered, for export/import declaration and release.  For 
B-grade manufacturers that meet certain conditions, the clearan ce model of "declaration in 
registered custom and release at port" will gradually be applied. At the same time, China has 
accelerated the implementation of paperless customs clearance. These measures will further 
improve the efficiency of customs clearance  and enhance trade facilitation.  
3.3  Increasing Utilization of Foreign Investment a nd Outbound Foreign Investment  
3.31.   Active utilization of foreign investment has always been an important part of China 's basic 
state policy of opening up to the outside world. Boom in outbound foreign investment represents a 
new significant feature in China 's development of an open economy in recent years. Under the new 
circumstances, standing at a height of building an open economic system, the Chinese 
Government will promote the re form of the administration system regarding the utilization of 
foreign investment and outbound foreign investment on a full scale, maintain the steadiness, 
transparency and predictability of foreign investment policies, as well as liberalize the market 
access for foreign investment in an orderly way and give further play to the comprehensive effects 
of the utilization of foreign investment. Meanwhile, China will fundamentally recognize enterprises 
and individuals as players in outbound foreign investment, a nd permit them to carry out 
cooperative investment projects overseas by exerting their own strengths and assuming risks 
themselves and enhance their capabilities of participating in the integration of the global value 
chain and carrying out internationaliz ed operation.  
3.3.1   Optimizing the utilization of foreign investment through further opening -up 
3.32.   On 10 June 2013, the Catalogue for the Guidance of the Advantageous Industries in Central 
and Western Regions for Foreign Investment  (2013 Amendment) （hereinafter "the  Verification 
Catalogue" ）came into force, which was the third amendment since its first promulgation in 2000. 
The Catalogue consists of 500 items, 173 more than those included in the original version. The 
foreign investment projects listed in the Catalogue  are entitled to the same preferential policies as 
encouraged foreign investment projects. The new Catalogue encourages foreign investors to invest 
in labor -intensive industries complying with environmental protection requirements in central and 
western Ch ina, and to promote the initiatives of saving and comprehensive utilization of resources 
and improve the development of the service sector.  
3.33.   Under the Catalogue of Investment Projects Subject to Governmental Verification (2013)  
promulgated in December 2013,  the universal requirement that all foreign investment projects 
shall be subject to verification is changed to the requirement that foreign investment projects are 
subject to either verification or filing based on different circumstances. That means only f oreign 
investment projects in the restricted category, or foreign investment projects in the encouraged 
category requiring Chinese party as the major shareholder (including comparatively controlling 
shareholders) shall be still subject to verification. Oth er foreign investment projects, as domestic 
investment projects, shall be subject to either verification or filing in accordance with the general 
provisions.  
3.34.   Since June 2012, China has further opened up its service sector and manufacturing sector. 
In July 2012, the Ministry of Commerce promulgated the Notice on the Pilot Program of 
Commercial Factoring , permitting foreign investors to set up commercial factoring companies in 
Binhai New District in Tianjin and Pudong New District in Shanghai; and thereafter the pilot 
program me was gradually extended to some regions in Chongqing Municipality, Jiangsu Province 
and Guangdong Province. In October 2012, the Chinese Government raised the cap on the 
permissible foreign stake in joint -venture securities companies fro m 33% to 49% and shortened 
the minimum operating years necessary for joint -venture securities companies to apply for 
expanding of business scope from 5 years to 2 years. China has devoted to promote the opening -
up of finance, education, culture, medical an d other similar service sectors in an orderly manner, 
and to ease the market access restrictions for foreign investment in such service fields as child 
care, care for the elderly, architecture design, accounting and a uditing, trade and logistics, 
e-commerc e, etc. Further liberalization has been achieved in general manufacturing industries.  
3.35.   In September 2013, the State Council issued the Framework Plan for China (Shanghai) Pilot 
Free Trade Zone . The establishment of China (Shanghai) Pilot Free Trade Zone is a significant 
measure to advance China 's reform and opening up under the new circumstances, with a view to WT/TPR/G/300 • China  
 
- 21 - 
 
  promoting reform and development by opening up. Through pilot tasks, China would like to 
accelerate the transformation of government function, active ly explore the feasibility of a new 
management model, facilitate trade and investment, as well as create a regulatory system for 
cross border investment and trading in line with international practices and the rule of law, and 
explore new approaches and ac cumulate new experience for deepening all -round reform and 
expanding opening up. China (Shanghai) Pilot Free Trade Zone is comprised of four Special 
Customs Supervision Areas, namely Shanghai Waigaoqiao Bonded Zone, Waigaoqiao Bonded 
Logistics Park, Yangsh an Bonded Port and Shanghai Pudong Airport Comprehensive Bonded Zone.  
3.36.   Then, the People 's Government of Shanghai Municipality promulgated the Special 
Administrative Measures of China (Shanghai) Pilot Free Trade Zone for Admittance of Foreign 
Investments (Ne gative List) (2013)  and temporarily adjusted 11 administrative examination and 
approval items regulated by three laws including the Law of the People 's Republic of China on 
Wholly Foreign -owned Enterprise , and 32 administrative examination and approval ite ms or special 
administrative measures for admittance of foreign investment regulated by 15 administrative 
regulations and three administrative measures issued by the State Council within the free trade 
zone. China carried out reforms in current approach of  approval and examination for foreign 
investment projects and explored the management model of "Pre -establishment National 
Treatment (PENT) with a Negative List was introduced" as authorized by the 4th Session of the 
Standing Committee of the 12th National  People 's Congress and determined by the State Council. 
The foreign investment projects which are not covered in the Negative List will, according to the 
principle of treating domestic and foreign investors on an equal basis, be subject to the f iling 
instead of verification (e xcept verifications retained for domestically invested projects as stipulated 
by the State Council), and the contracts and articles of association of foreign invested enterprises 
are subject to filing instead of examination and approva l. By March 2014, newly established and 
changed foreign investment subject to filing administration ，which are not covered in the negative 
list amounted to 93% of all applications for foreign investment, thus a filing -based foreign 
investment administration system has taken shape initially.  
3.3.2   Improving competitiveness through  "going global " 
3.37.   For the purpose  of facilitating enterprises in outbound foreign investment, the National 
Development and Reform Commission promulgated the  Administrative Measures on Approval and 
Filing of Overseas Investment Projects  in April 2014 in accordance with the Catalogue of 
Investment Projects Subject to Governmental Verification (2013) promulgated by the State Council 
in December 2013. Projects are subject to filing rather than verification, except those under the 
following circumstances: i) projects involving the states withou t diplomatic relations with China or 
subject to international sanctions, or the states and regions sufferin g from wars or civil strife; 
ii) the projects related to basic telecommunications operation, cross -border water resources 
exploitation and utilizatio n, large -scale land exploitation, main grid of power transmission, and 
news and media; iii) the projects in which  Chinese investment exceeds USD 1 billion. In addition, 
the Ministry of Commerce is amending the Administrative Measures on Overseas Investment  
Projects promulgated in 2009.  
3.38.   For the purpose of regulating foreign labor cooperation, protecting legitimate rights and 
interests of contracted workers and promoting healthy development of foreign labor cooperation, 
the State Council promulgated the Regul ation on the Administration of Foreign Labor Cooperation 
in August 2012. China is engaged in labor cooperation with relevant states and regions under the 
framework of bilateral economic and trade cooperation. It also dispatches labors overseas where 
the de mand on local labor fails to be satisfied in an orderly manner, in accordance with the 
principle of "mutual benefit and win -win result" to realize mutual cooperation and complementary 
advantage. China does not seek exporting labor overseas. Upon the expiry  of their service term 
overseas, foreign labor cooperation enterprises will organize the Chinese labors to return to China.  
3.39.   In 2013, the Chinese Government proposed the vision of establishing  a "Silk Road Economic 
Belt" and a "Maritime Silk Road" as well a s the initiative of developing the Bangladesh -China -India-
Burma Economic Corridor and the China -Pakistan Economic Corridor. This helps China implement a 
new round of opening up and building a new system of an open economy, advance the growth of 
inland and border areas and the coordinated development of relevant regions, create a favorable 
surrounding environment and usher in a new phase of mutually beneficial and win -win opening up.  WT/TPR/G/300 • China  
 
- 22 - 
 
  3.40.   Currently, the Chinese Government is working on such issues from following four aspects: 
firstly, China pushes forward trade and investment facilitation and enhances the cooperation in the 
areas of investment, economy and technology so as to boost bilateral trade; secondly, China 
strengthens inward -outward investment and upgrades  the level of bilateral economic and 
technological cooperation through setting up cross -border economic cooperation zones and 
overseas economic and trade cooperation zones; thirdly, China proactively speeds up 
infrastructure connectivity, accelerates its l ogistics and transportation cooperation with the 
countries along the "Silk Road Economic Belt" and the "Maritime Silk Road"; and fourthly, China 
supports the economic and trade cooperation between western regions in China and the regions in 
Central Asia wi th a view to promoting westward  opening -up. 
3.4  Cons tructing Economic a nd Trade Partnerships Based on Mutually Beneficial a nd 
Win-Win Principle  
3.41.   China has been committed to developing all -round foreign economic and trade relations and 
promoting the global econo mic and trading system that is open, cooperative and mutually 
beneficial. China has always been upholding the WTO -based multilateralism system as the main 
channel, actively exploring regional trade arrangements in various forms and resolutely opposing 
trade and investment protectionism.  
3.4.1   Committed to advancing the Doha Development Agenda  
3.42.   China firmly believes that in the context of uncertainties encountered by the global 
economy, the early conclusion of the DDA will bring more trade, investment and employmen t 
opportunities, foster a more stable and open external environment, further enhance the role of the 
multilateral trading system in global governance and promote the global economic recovery and 
steady growth.  
3.43.   The Chinese Government attaches high importanc e to the DDA negotiation. In accordance 
with the consensuses at the Eighth WTO Ministerial Conference, in the past two years, China work 
together with other Members, in accordance with the Doha mandate and based on the progress 
already made, to explore fea sible approaches and making breakthrough in areas that are politically 
less controversial and technically more mature such as trade facilitation, certain agricultural issues 
and development issues.  
3.44.   President Xi Jinping called on all WTO members to show ne cessary flexibilities, narrow 
differences and reach a positive and balanced outcome at the Ninth WTO Ministerial Conference  
(MC9) to lay the foundation for the completion of the DDA negotiation  on various occasions 
including the Group of Twenty (G20) Summi t, Asia -Pacific Economic Cooperation (APEC) Economic 
Leaders ' Meeting and the BRICS Summit. Premier Li Keqiang has also explicitly expressed on 
occasions including East Asia Summit that China would render its support to achieve an "early 
harvest" at MC9 an d restore the parties ' confidence in the multilateral trading system.  
3.45.   China has actively participated in the "early harvest" negotiation on various areas with a 
constructive role of "facilitate the discussions, bridging the gaps and advancing the deal", an d has 
been always showing flexibilities in the course of reaching agreements. In the negotiations on 
trade facilitation, China takes the lead in expressing that it will refrain from requesting for aid, 
leave resources to other developing members and provid e supports to fellow developing members 
through "South -South Cooperation" within its capacity. On agriculture, China proposes the "peace 
clause" as the middle ground of the interim solution of food security, which was ultimately 
accepted by all Members, pa ving the way for achieving the "early harvest". On development 
issues, China has adopted substantial measures to address the concerns of LDCs, in particular on 
the issues of "DFQF" and cotton. During the MC9, China announced to provide further assistance 
to "Cotton Four" countries from Africa. China has played an active and constructive role in 
ensuring the success of MC9 held in Bali, Indonesia, at the end of 2013.  
3.46.   After MC9, the important tasks lay before the WTO Members to implement the "Bali 
package" an d prepare the "Post -Bali" work program me. China will advance the implementation of 
"Bali Package", especially the Trade Facilitation Agreement  in accordance with the timetable set 
out in the Bali Ministerial Declaration . Along with other WTO members, China  will spare no efforts WT/TPR/G/300 • China  
 
- 23 - 
 
  in developing the "Post -Bali" work program me and continue to advance the discussions on other 
issues in the Doha Round as mandated by the Bali Ministerial Declaration . 
3.47.   China believes that the "Post -Bali" work program me shall be desig ned for the complete 
conclusion of the Doha round, with a focus on the development dimension and due respect on 
Doha mandate and the results achieved so far. The work program me should be pragmatic, 
balanced, feasible and beneficial to all Members, which sh ould bring the developing members and 
the LDCs in particular more development opportunities. The discussions on "post -Bali" work 
program me should be member -driven, transparent and inclusive to ensure the effective 
participation of all the parties.  
3.4.2   Safeguar ding the multilateral trading system  with concrete actions  
3.48.   China is an active participant, firm supporter and important contributor to the multilateral 
trading system. Since its accession to WTO, China has fully honored its extensive commitments of 
the WTO  accession and made important contributions to safeguarding the multilateral trading 
system. China has earnestly and actively participated in the daily operation of the WTO and 
respected the decisions of the Dispute Settlement Body concerning the trade dis putes between 
China and its trading partners. Since the outbreak of the international financial crisis, China has 
supported the WTO in launching the monitoring and surveillance of trade measures, playing a 
crucial role in curbing protectionism.  
3.49.   In the cour se of developing and implementing economic and trade policies and measures, 
China has attached great importance to their consistency with the rules and its obligations in the 
multilateral trading system. China has endeavored to make reference to practices of other WTO 
members and take into account possible impacts on the external world to formulate steady, 
transparent and predictable trade policies.  
3.50.   China has actively responded to the Aid for Trade initiative of the WTO. China continues to 
provide assistanc es bilaterally to the best of its ability to other developing members, and has 
begun to make contributions to the Aid for Trade initiative under the multilateral framework of 
WTO since 2008. In 2011, China established "China 's LDCs and Accessions Program" (China 
Program) to help LDCs effectively participate in and benefit from the multilateral trading system 
and to help accelerate the accession process of those LDCs applying for WTO membership. In 2012 
and 20 13, China contributed USD 800,000 to "China Progr am" and held a LDCs round -table on 
WTO accession in Beijing, laying a basis for the Guidelines for Accessions of Least -Developed 
Countries  reached by the Members later. During the MC9, China 's Minister of Commerce Gao 
Hucheng and WTO Director -General Azevê do concluded the third memorandum on "China 's LDCs 
and Accessions Program" an d China contributed another USD 400,000 to the program me.  
3.51.   China has actively responded to the WTO 's "Made in the World" Initiative, proactively 
boosted the adjustment, transforma tion and upgrading of foreign trade structure based on the 
concept of a global value chain, actively participated in accounting of global value chain and value -
added trade, combined theoretical research and policy application and promoted the concepts and 
practice of global value chain to better support the multilateral system. China has made a great 
quantity of researches, developed an accounting database of global value chain and Chinese value -
added trade and thoroughly improved relevant research methods.  In October 2013, China 
submitted the Research Report on Accounting of Global Value Chain and Chinese Value -Added 
Trade  to the secretarial of WTO.  
3.52.   China has also actively participated in other negotiations within the WTO framework on rules 
making and marke t access. China has been engaging in the negotiation on the product expansion 
of the Information Technology Agreement (ITA) . Currently the negotiation is at a stalemate, China 
is willing to jointly work with other parties to push the negotiation towards th e right direction, with 
a view to finding a solution and reaching an agreement at an earlier date.  
3.53.   China has always been an active participant and has played constructive role in the Trade 
and Environment negotiation under WTO framework. In January 2014, China joined the initiative 
on environment goods negotiation with other 13 WTO Members in Davos, Switzerland, with a view 
to further discussion on reduction of tariffs of environment goods. China believes that trade and WT/TPR/G/300 • China  
 
- 24 - 
 
  environment negotiation should aim t o realize triple -win among trade, environment and 
development, and contribute to the multilateral trading system.  
3.54.   China has been continuously pushing forward its accession negotiation to the Agreement on 
Government Procurement (GPA) . Since last review, Chi na has submitted its fourth and fifth revised 
offers which included certain sub -central entities. Meanwhile China conducted in -depth 
consultations with GPA parties. China will endeavour to achieve an earlier accession to the GPA 
and commit to submit anothe r revised offer by 2014 . 
3.4.3   Promoting bilateral and regional cooperation  
3.55.   While committing to the multilateral trade system and rules as the cornerstone of its foreign 
economic and trade relations, China continues to promote trade and investment liberalization  and 
facilitation through regional, sub -regional and bilateral opening up and cooperation, strives to 
expand the interest convergence with various states and regions with a view to achieving a mutual 
benefits and win -win situation. China is of the view tha t in the global trade development, the 
major role of the multilateral trade system and the complementary role of bilateral and regional 
liberalization could stay in parallel and help each other forward.  
3.56.   China is accelerating its steps in negotiating free t rade agreements. By the end of 2013, 
China has entered into 12 free trade agreements or closer economic partnership arrangements 
with 20 countries and areas ，with 10 of them implemented. Free trade agreements with Iceland 
and Switzerland are under domestic legislative procedures. Curre ntly, China is negotiating on 
6 free trade agreements with 22 countries and regions.  
3.57.   China continues to be an active participant in the Asia -Pacific Economic Cooperation, the 
Association of Southeast Asian Nations (ASEAN) meeti ngs with China, Japan and the Republic of 
Korea, the East Asia Summit, Forum on China -Africa Cooperation, Greater Mekong Sub -region 
Economic Cooperation Committee, Central Asia Regional Economic Cooperation Committee, 
Greater Tumen Initiative, and other re gional and sub -regional economic cooperation mechanisms.  
3.58.   In 2014, China will be the host of the APEC meetings. The theme of this APEC Chinese year 
has been determined as "Shaping the Future through Asia -Pacific Partnership". The three topics 
around this th eme are as follows: Advancing Regional Economic Integration, Promoting Innovative 
Development, Economic Reform and Growth, and Strengthening Comprehensive Development in 
Connectivity and Infrastructure. In the area of economy and trade, China will focus on  following 
four aspects: supporting the multilateral trading system and opposing protectionism; advancing 
the work towards Asia Pacific free trade zone; boosting cooperation on global value chains and 
supply chains; and strengthening economic and technical  cooperation.  
3.4.4   Enhancing South -South cooperation  
3.59.   China is still a developing country with numerous and heavy development tasks to address. 
However, China is striving to shoulder development responsibilities in line with its national 
situation and developmen t phrase while achieving its development goals. China is actively 
advocating and participating in international development cooperation, rendering economic and 
technical assistance to the best of its capability to other developing countries, especially the  LDCs, 
under the framework of "South -South Cooperation", and helping them better participate in global 
value chain,  integrate themselves into the process of globalization, improve the people 's livelihood 
and promote their economic and social development by  means of enhancing infrastructure 
construction, upraising the level of capability building and granting zero -tariff treatment.  
3.60.   China is one of the developing countries granting the biggest market access to LDCs . Since 
1 January 2014, China had granted zer o-tariff to 95% of tariff items (according to China 's tariff 
items) from 35 LDCs which had diplomatic ties with China. In March 2013, President XI Jinping 
announced at the BRICS Leaders -Africa Dialogue Forum that China would accomplish its goal by 
2015 of granting zero -tariff treatment to 97% of the tariff items of exports to China from the LDCs 
which have diplomatic ties with China . 
3.61.   The phased implementation of the zero -tariff arrangements has greatly boosted the exports 
of the LDCs to China since 1 July 2 010. Thanks to zero -tariff arrangements for the LDCs, WT/TPR/G/300 • China  
 
- 25 - 
 
  26 benefici ary countries have exported US D 2.25 billion worth of goods, resulting in tariff 
exemption worth of RMB 1.34 billion yuan by April 2013. For five consecutive years, China has 
become the large st export market for the LDCs and export to China from the LDCs account for 
approximately one -quarter of the total export of such countries. By honouring its commitment, 
China expects other developing countries and developed countries to join hands to impr ove the 
market access treatment to the LDCs.  
4  THE WAY FORWARD  
4.1.  Since 2014, China 's economy has witnessed  a stable and good start. Urban employment 
continues to increase, resident 's income, c orporate profits and fiscal revenue register steady 
growth. The over all consumer prices remain at a stable level, and structural adjustment shows 
positive dynamics. Although China has to face the emergence of profound challenges due to the 
complex global economic environment a s well as  the changes in respect of  the product ive factors 
that have been bolstering China 's development for decades , it is widely recognized that China will 
continue to enjoy a development period full of opportunities. China will accelerate its  progress in 
advancing its new -type industrialization, IT application, urbanization and agricultural 
modernization. There is considerable potential for  regional development in China as well as the 
outlook of the Chinese market . China is well -endowed with favorable conditions and solid base to 
ensure its sustained  and stable growth in the long run. In the years to come, China will endeavor 
to keep its economy growing within a proper range, which is both a target of China's macro 
policies at the current stage, but also a policy orientation in a medium  and long -term. 
4.2.  The Chinese Government has launched a new round of reform in a most profound and 
comprehensive fashion. It has made public its explicit goals and concrete tasks. The economic 
system is the priority subject of China 's deepened and comprehensive reform. The  core issue is to 
better address the relationship between government and market, namely, to allow market to play 
a decisive role in allocating resources, while leaving the government better play its due role at the 
same time. The Chinese Government will pr omote market -oriented reform of great width and 
depth, i n an active and orderly manner, further push ahead the transformation of government 
functions, and promot e resources allocation by respecting market rules, market  prices and market 
competition to maxi mize the benefits and optimize the efficiency. The main responsibility and role 
of the G overnment is to maintain the stability of the macro -economy, improve public services, 
safeguard fair competition, strengthen oversight of the market, maintain market or der, promote 
sustainable development and common prosperity, and intervene in situations where market failure 
occurs.  
4.3.  Continuing to promote opening up is an important task of China 's new round of reform. The 
Chinese Government will push forward a new round of high standard opening -up, particularly in 
areas o f services sector , which include  capital market liberalization. China will also focus on 
unifying laws and regulations on domestic and foreign investments, exploring a regulatory model 
based on negative l ist approach, and creating a fair and competitive business environment for both 
domestic and foreign investors. China will further open up inland and border areas, seize the 
opportunity presented by global industry restructuring, promote coordinated develo pment of trade, 
investment and technological innovation in inland and border areas, accelerate the construction of 
infrastructure connecting China with neighboring countries and regions, and work hard to build a 
Silk Road Economic Belt and a Maritime Silk Road, so as to form a new pattern of all -round 
opening. The Chinese Government will accumulate useful experiences through the development of 
the China (Shanghai) Pilot Free Trade Zone and roll it out to other areas.  
4.4.  Since its accession to the WTO, China ha s largely established an economic and trading 
system both in line with its national conditions and in conformity with international rules. China 's 
continuous reforms and opening up have contributed greatly to the achievements of building an 
open economy, a nd the eventual integration of China 's economy into the world economy. 
Currently, China is the largest trading partner of more than 120 countries and regions, and has 
become one of the major driving forces  of world economic growth. It is expe cted that Chin a will 
realize USD 10 trillion worth of imports and USD 500 billion outbound investments, and more than 
500 million person -times outbound tourism in the next 5 years. Meanwhile, China is still a 
developing country with relatively low level of per capita pe rsonal income. By the end of 2012, 
China had yet nearly100 million persons living under the poverty line. The Chinese Government is 
fully aware that the basic national conditions of China, as a large developing country, have not WT/TPR/G/300 • China  
 
- 26 - 
 
  change d fundamentally, thou gh great achievements have been made in economic development. 
China will be subject to the great challenges of onerous development tasks for a long run.  
4.5.  Being a large developing country, China develops and upholds its own positions in 
international economi c and trade affairs, and will also shoulder the responsibilities in line with the 
level of its development. The Chinese Government is of the view that economies at different 
development levels and phases should embrace the spirit of solidarity in difficult  times, discard 
zero-sum practices, work together to tackle common challenges and open up a new prospect of 
economic globalization featuring win -win cooperation. Developed and emerging economies should 
bring out their respective strengths to drive global e conomic growth by acting as the "double 
engines" of the global economy, reinforcing and benefiting each other. In this way, we will open up 
a new prospect of economic globalization featuring win -win cooperation. China will continue to 
develop its economic and trade relations with various countries and regions based on the principles 
of mutual benefits and win -win; and proactively participate in global economic  governance and 
exert its influence as a major developing trading power. China suggests giving full play to the 
leading role of the WTO -based multilateral trading system, supports Doha Round negotiation, 
promotes the development of a "balanced, general pre ferential and win -win" multilateral trading 
system, explores regional trade arrangements of various forms, further raises the level of trade 
and investment liberalization and facilitation, and firmly opposes trade and investment 
protectionism.  
__________