RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/TPR/G/161 
17 March 2006  
 
(06-1212) 
Trade Policy Review Body  
   
 
  
 
TRADE POLICY REVIEW 
 
Report by the  
 
PEOPLE'S REPUBLIC OF CHINA 
 
  
 
Pursuant to the Agreement Establishi ng the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), the policy statement by  the People's Republic of China is 
attached. 
 
 
Note: This report is subject to restricted circ ulation and press embargo until the end of the first 
 session of the meeting of the Trade Policy Revi ew Body on the People's Republic of China.People's Republic of China WT/TPR/G/161 
 Page 3 
 
 
CONTENTS 
 
  Page 
I. MACROECONOMIC ENVIRONMENT 5 
Robust Growth and Enormous Opportunities 5 
The Ever Deepening Reform and Opening up 6 
Supportive Macroeconomic Policy 8 Difficulties and Challenges Confronting Development 10 
II. TRADE POLICY DEVELOPMENT 11 
Support and Defend the Multilateral Trading System 11 Faithfully Implement the WTO Accession Commitments 12 
Active Participation in the “Doha Round” Negotiations 15 
Regional Trade Liberalisation 17 Proper Handling of Trade Disputes 17 
Promoting Economic Cooperation with Developing Members 18 
III. OUTLOOK  19 
Build a Harmonious Society and a Harmonious World 19 
Deepen the Reform and Raise Further the Level of Opening 20 
 People's Republic of China WT/TPR/G/161 
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I. MACROECONOMIC ENVIRONMENT 
Robust Growth and Enormous Opportunities  
1. Since WTO Accession in 2001, the Chinese Gove rnment has constantly persisted in the 
reform and opening-up policy adopted in 1979.  As  a result, the systemic environment for China’s 
economic performance has substantiall y improved along with the deepening of reform.   At the same 
time the adoption of prudent and effective macro economic policy enabled China to maintain the 
momentum of stable and robust economic growth over the past four years. 
2. According the latest statistics, China’ s gross domestic products (GDP) rose from 
10,965.5 billion Yuan (US$ 1,324.8 billion) in 2001 to 18,232.1 billion Yuan (US$ 2,225.7 billion) 
in 2005, scoring an annual average growth rate of 9.5% for five consecutive years.  The per capita 
GDP during this period has surpassed US$ 1,000 to  reach US$ 1,702 in 2005 converted at current 
annual average exchange rate. 
3. There have been rapid expansion of import a nd export trade and inflow of foreign direct 
investment.  Total value of import and export rose from US$ 509.6 billion in 2001 to US$ 1,422.1 billion in 2005.  For the period from 20 01 to 2005, average annual actual inflow of FDI 
was some US$ 55 billion. 
4. By the end of 2005, China has all together approved the establishment of 552,942 foreign 
invested enterprises, with a total contract ual value of USD 1,285,673 million, of which 
USD 622,426 million was actually utilized.  The utili zation of foreign investment is a significant 
component of China’s cardinal state policy of opening  up.  Since China’s adoption of the reform and 
opening up policy, through absorption of FDI, China has sped up the establishment and improvement 
of the socialist market economy system, pushed forward the development of an open economy, introduced a large amount of foreign capital a nd advanced and applicable technological and 
managerial experience, educated a large group of technological and managerial  personnel, raised the 
level of domestic technological innovation, brou ght along the optimization and upgrading of domestic 
industrial structure, created many job opportunities,  increased the financial revenue of the state and 
improved china’s overall international competitive edge. 
5. The rapid growth of the Chinese economy laid a solid foundation for alleviating poverty and 
raising the living standard of the people.  The annua l per capita disposable income of urban residents 
reached 10,493 RMB Yuan in 2005, registering a 58.3% growth from that in 2000 in real terms with an annual increase rate of 9.6%.  The annual per cap ita disposable income of rural residents in 2005 
was 3,255 RMB Yuan, increased by 29.2% in real terms from 2000 with an annual growth rate of 
5.3%.  
6. The growth also provides the rest of the world with a large and expanding market.  It brings 
enormous investment opportunities for investors a nd high quality consumer goods at attractive price 
for consumers.  It is a powerful stimulating fo rce spurring world economic growth.  From 2001 to 
2005, China imported goods of a cumulative value of US$ 2,172.8 billion, and the transfer of profit 
out of China by foreign invested  enterprises totalled US$ 57.94 billions.  Over the past few years, 
China has always been a net importer of commercia l services with great attraction to foreign services 
providers.  According to WTO statistics, China’ s total import of commercial services in 2004 was 
US$ 71.6 billion with a deficit of US$ 9.6 billion.   World Bank statistical data shows that from 2000 
to 2004 Chinese economic growth contributed on average 13% of world economic growth. WT/TPR/G/161 Trade Policy Review 
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The Ever Deepening Reform and Opening up 
7. Reform and opening up is China’s established na tional policy.  The market-oriented reform 
started in 1979 brought about dramatic changes in China’s economic system.  In October 1992, China 
officially set the objective of establishing  a socialist market economy system.  Subsequently an 
overall economic system reform was unfolded an d major breakthrough was made in the fiscal, 
taxation, financial, investment, foreign exchange, fo reign trade and pricing system, which laid a solid 
foundation for a socialist market economy system.  Up to 2000, a socialist market economy system had already taken shape and China entered a new stage of improving the system. 
8. For the four years following the WTO accession , the acceleration of economic structural 
reform remained the central issue on the work agenda of the Chinese Government.  The most 
important measures of reform adopted by the Ch inese Government during th is period include the 
following: 
9. In respect of the non-public sector development, the Constitution of the People’s Republic of 
China  as amended in March 1999 and March 2004 provides in Article 11 that the non-public sectors 
of the economy such as the individual and private se ctors of the economy, operating within the limits 
prescribed by law, constitute an important compone nt of the socialist market economy; the state 
protects the lawful rights and interests of the non-p ublic sectors of the economy such as the individual 
and private sectors.  In February 2005, the State Council issued Opinions on encouraging, supporting 
and guiding the development of the non-public secto rs of the economy such as the individual and 
private sectors .  It states explicitly that all market access barriers affecting non-public sectors should 
be removed; non-public sectors are encouraged to pa rticipate in the reorganisation, restructuring and 
transformation of state-owned enterprises through merger and acquisition,  share holding and 
controlling; their status as full market players s hould be consolidated and they should be entitled to 
fully equal treatment. 
10. In China today, the non-public sector consists of foreign invested enterprises, self-employed 
individual industrial and commercia l households and private enterprises.  As of 2004, there were 
approximately 280,000 registered foreign invested en terprises.  By end of September 2005, there were 
24,662,000 registered self-employed individual  and household business, and 4,191,000 private 
enterprises.  From 1992 to 2004, the number of priv ate enterprises each year increased on average by 
31.9%.  They have become the largest enterp rises group both in number and in proportion.  
11. In respect of administration of state-owned assets and the reform of state-owned enterprises, 
the state-owned assets supervision and administrati on bodies were established in 2003 to assume the 
function of state asset investors.  State-owned enterp rises in a state of default without hope to regain 
profitability are required to declare bankruptcy a nd go out of business.  Others are accelerating the 
process of corporate transformation with investors be ing diversified.  Joint stock system is propelled 
to be the main vehicle of public ownership.  At  the meantime, corporate governance structure of the 
enterprises has been further improved to strengthen the governance. 
12. During the past four years, the number of state-owned enterprises substantially declined.  
There were 174,000 state-owned enterprises thr oughout China in 2001 and the number dropped by 
26% to 138,000 in 2004.  Half of  the 2,903 large state-owned enterprises which account for 66.9% of 
the total net assets of all state-owned enterprises (i ncluding majority state holding enterprises) were 
transformed into corporations with multiple share holders.  80% of small and medium state-owned 
enterprises nation-wide were restructured  and had their owne rship diversified. People's Republic of China WT/TPR/G/161 
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13. In respect of fiscal and taxation system, an e xperiment was launched in North East China in 
2004 to transform the value added tax from a producti on based to a consumption based system.  In 
order to support the reform of the financial syst em, business tax rate for financial and insurance 
business was reduced by one percentage point each  year from 2001 to 2003.  A major reform took 
place in the budget management system introduci ng departmental budget, centralized treasury 
collection and payment and government procurement w ith a view to enhancing the efficiency in the 
utilisation of financial resources.  The reform on appropriate shar ing of income tax revenues by 
central and local governments was implemented in 2002.  Fiscal transfer payment structure was 
optimized.  Support to underdeveloped regions incr eased.  Reform of the fiscal management system 
below the level of provincial governments was also  advanced.  Interregional development became 
more balanced and basic pub lic services more equalized. 
14. In respect of financial system, the monetary  policy function and banking regulatory function 
were separated.  The establishment in 2003 of the China Banking Regulatory Commission strengthened the unified regulation and supervision of banks, financia l asset management companies, 
trust and investment companies and other non-bank  depository financial institutions.  A financial 
regulatory system consisting of four institutions namely the People’s Bank of China (the Central 
Bank), China Banking Regulatory Commission, China Securities Regulatory Commission and China Insurance Regulatory Commission was established, each with separate  responsibility working in close 
cooperation. 
15. The joint stock reform of the state-owned commercial banks was put on track and initial 
success has been made.  Bank of China and China Construction Bank basically completed the joint 
stock transformation and the latter has gone public in Hong Kong.  Financial restructuring of the 
Industrial and Commercial Bank of China was implemented and the ba nk has been transformed into a 
joint stock limited company.  The reform aims to establishing a modern financial enterprise system, 
improving corporate governance structure, transfor ming operation mechanism, achieving sustainable 
development and enhancing the in ternational competitiveness of the state-owned commercial banks. 
16. The reform of RMB exchange rate regime wa s implemented on 21 July 2005, putting in place 
a managed floating exchange rate regime based on market supply and demand with reference to a 
basket of currencies.  In deciding on modality, c ontents and timing of the exchange rate regime 
reform, the Chinese Government took full account of the impact on macro economy and financial 
stability, economic growth and employment as well as the impact on our neighbouring countries and 
regions, the world economy and finance.  Since th e operation of the new exch ange rate regime, RMB 
exchange rate has attained greater flexibility and has remained basically st able at an adaptive and 
equilibrium level. 
17. The long term objective of the reform of China’ s foreign exchange management system is full 
convertibility of RMB under both the current and the capital account.  The RMB became convertible 
under the current account in 1996.  China has been  steadily advancing capital account convertibility.  
The RMB convertibility under the capital account h as been increasing gradually.  The Chinese 
Government will steadily push forward market-based  interest rate reform, improve the managed 
floating exchange rate regime, endeavour to gr adually achieve capital account convertibility and 
preserve financial stability and security.
  
18. The agricultural tax system has undergone fundame ntal reform.  Up to the end of 2005, 28 out 
of the 31 provinces, municipalities and autonomous regions have abolished agriculture tax.  On 
29 December 2005, the Standing Committee of the Tenth National People’s Congress adopted at its 
19th session a decision to the effect that the Regulations on Agricultural Tax in force for 48 years WT/TPR/G/161 Trade Policy Review 
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would be abolished on 1 January 2006.  As of 2006, the Agricultural Tax has been abolished 
throughout the country two years ahead of the original objective of a 5-year phase out. 
19. In the reform of investment administration, the system of investment project approval by 
investment administration authorities in different le vels of the Government according to investment 
scale has been changed.  With exception of tho se on the published catalogue requiring verification 
procedures, all investment projects including fore ign investment projects involving no government 
funds need only to file for record with the inv estment administration authorities.  The procedure of 
required market access approval of foreign investment projects were also simplified with enhanced efficiency. 
20. Since 1979, the opening up policy has been implemented progressively from the coastal area 
to the interior, from the east to the west.  The establishment of sp ecial economic zones in Shenzhen, 
Zhuhai, Shantou and Xiamen in 1980 marked the la unching of opening up.  In the mid and late 1980s, 
the opening up gradually stretched beyond the special  economic zones to the coastal areas, Hainan 
Province, and the Pudong area of Shanghai as well as the Changjiang River (the Yangtze River) Delta 
cities and a series of frontier and interior citi es.  With the launching of the Western Region 
Development Strategy in 2000, the opening up further expanded to the vast western regions. 
21. China’s accession to the WTO in December 2001 ma rked a new era of China’s opening up.  
After WTO accession, the regional opening up approach  was replaced by a nation-wide open policy; 
the coverage extended from the traditional trade in goods to trade in services; the level of market 
access further advanced, access conditions codified  into laws and regulations with greater 
transparency and rule-based.  The WTO fundamental  principles such as MFN and national treatment 
as well as China’s WTO accession commitments have b ecome the norms followed by China in the 
opening process. 
22. Foreign direct investments have most obvious favourable impact on the development of the 
Chinese economy in the opening up process.  In 20 04, industrial added value by foreign invested 
enterprises accounted for 28% of national industrial added value.  Their exports accounted for 57% of 
national total exports.  Foreign invested ente rprises employed 24 million people accounting for 10% 
of the non-rural work force. 
23. With the implementation of the accession commitments, China’s foreign investment policy 
became more open and predictable.  The Ch inese Government will further improve foreign 
investment laws, regulations and policy measures to encourage and guide foreign investments in high 
technology, modern services and modern agricultu re.  The Chinese Government will continue its 
efforts to attract multinational enterprises to m ove the manufacturing process of high technology and 
high value-added products and thei r research and development to China.  The Government will also 
promote cooperation between domestic and fo reign enterprises on technology research and 
development, resource procurement and market deve lopment; attach more importance to environment 
protection, resources conservation and sustainable de velopment, thus enhanc ing the quality and raise 
the level of foreign investment. 
Supportive Macroeconomic Policy 
24. The overall objective of the Chinese Government’s  macroeconomic policy is to ensure stable 
and fast economic growth.  From 2001 to 2004, the Chinese Government managed to maintain 
consistency and stability in its macr oeconomic policy, persisted in th e policy adopted in the wake of 
the 1998 Asian financial crisis aimed at expanding domestic de mand and spurring economic growth, 
and continued to apply th e proactive fiscal policy and sound monetary policy. People's Republic of China WT/TPR/G/161 
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25. During the four years, the Chinese Government carried on the practice of issuing long-term 
Construction Treasury Bonds, which was introduced in the wake of the Asian financial crisis, and the 
scale of issuance each year amounted to 150 billion  Yuan for 2001 and 2002.  The Treasury Bonds 
targeted at the central and western regions developm ent, the rural infrastructure, urban environmental 
facilities, education and sanitation and health infrastructures. 
26. In the year 2001 to 2005, 350,000 kilometers of highway had been constructed in China, 
24000 kilometers among which are freeways which ex ceeded the total length of all freeways built by 
the year 2000.  There are 7063 kilometers of rail way has been build and put into operation.  The 
Qinghai-Tibet railway was also completely construc ted.  China launched a large scale of construction 
and renovation of the electricity networks of rura l areas, increased the total areas of farmland which 
are irrigated in a water-saving way, speeded up the construction of the projects, such as medium and 
small water conservancy facilities, drinking water supplies for human and livestock, and highways in 
the rural areas, as well as to consolidate the dikes of major rivers and lakes.   
27. China also launches a comprehensive administ ration on environmental protection in certain 
stressed areas, the protection of virgin forest and natural grassland resources, the pilot projects in 
returning hillside farmland to forests and gr assland in the Central and Western Regions, water 
pollution control projects in the basins of the Huai Ri ver, Hai River, Liao River, Tai Lake, Chao Lake 
and Dian Lake, and projects on urban water supply,  road, household refuse and sewage disposal.  
28. Taking the establishment of a national disease prevention and control system and a medical 
care mechanism for sanitary emergency as the prio rity, the Chinese government fastens the paces to 
establish a set of public health-care system.  As a result, a number of disease prevention and control 
center, emergency aid center and medical institutions  for contagious disease have been established on 
the provincial, municipal and county level.  The Chinese government invests more funds in education 
infrastructure and gives more education subsidies to rural and western hinterland, thus much improving the teaching, experiment  and school-life facilities of various schools and mid-schools of 
the area. 
29.  The proactive fiscal policy has effectively s purred investments by enterprises and by the 
society at large, stimulated effective demand, created employments, and therefore played an important role in maintaining the momentum of stable and robust economic growth.  Under the combined 
cumulative impact of the proactive fiscal polic y and sound monetary policy, the Chinese economy 
began in 2003 to enter a new cycle of upward trend.Fr om the latter half of 2003, there were signals of 
overheat in certain sectors and regions including excess growth of capital investment, rising prices of 
raw materials and energy.  The Chinese Government  while continuing maintaining the stability and 
continuity of the macroeconomic policy, adopted  a series of targeted macroeconomic measures 
including adjustment to optimize the fiscal expe nditure structure, increasing input on support to 
agriculture, rural areas and farmers, and public services such as education, sciences and technology 
and public health.  Adjustment measures were also targeted at rationalisation of fiscal investment 
particularly on the direction, scope and intensity of the long-term Construction Treasury Bonds.  The 
measures also include raising the ratio of de posit reserves of commercial banks, expanding the 
floating range of loan interest rates by financial institutions, setti ng strict industrial standards to 
prevent projects of high energy consumption, high pollu tion and high emission.  These measures have 
effectively arrested the trend of excess growth  of capital investment and excess expansion of 
production capacity of some industries, facilitated th e economic structural adjustment and stopped the 
partial overheat from evolving into a nation-wide problem. 
30. In 2005 the Chinese Government modified its  macroeconomic policy in light of the new 
situation of economic development.  The expansionary proactive fiscal policy adopted in the wake of WT/TPR/G/161 Trade Policy Review 
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the 1998 Asian Financial Crisis bega n to return to a neutral and prudent fiscal policy.  The scale of the 
long-term Construction Treasury Bonds was adjusted downward and the central government’s fiscal deficits moderately reduced to an appropriate level.  The emphasis is to give a guiding signal that it is 
necessary to prevent the signs of possible inflatio n from looming larger, but also to avoid the re-
emergence of deflation.  Attention was paid to th e adjustment of fiscal expenditure structure and the 
investment direction of the Treasury Bond projects,  to strengthen the weak links in economic and 
social development, to expand consumption dema nd and to promote harmony in economic and social 
development.  Measures will continue to optimize the taxation system, to support the institutional reform of income distribution, education, social security, public health and the financial system.  
Efforts will be made to increase revenues and eco nomise expenditures, and enhance fiscal strength 
and expenditure efficiency. 
31. China has implemented a sound monetary policy since 2002, and has flexibly adjusted the 
strength and stance of monetary policy in different  stages of the economic cycle.  More market-
oriented measures including a mix of price-based and quantity-based monetary policy instruments 
have been used to achieve appropr iate growth of money and credit.  Attention was also given to the 
coordination of the monetary policy with other ma croeconomic policies, and they in combination 
have been instrumental in maintaining the favourable momentum of high growth, low price of the national economy.  
32. Against the background of persistently low C onsumer Price Index (CPI) and weak domestic 
demand following the Asian financial crisis, the Pe ople’s Bank of China (the Central Bank) further 
reduced the RMB deposit and lending interest rates in 2002.  This was the eighth rate cut since 1996.  
After 2003, the Chinese economy began to pick up with faster growth and increased dynamics, but at the same time there were also signs of partial ove rheating and build-up of inflationary pressure.  The 
People’s Bank of China promptly ad justed the operation of monetary policy, raised required reserve 
ratio twice, increased benchmark rates for deposit and lending, and adopted differentiated structural 
credit policy to control overheated sectors such as the real estate sector.  In view of considerable 
increase of RMB equivalent of foreign exchange  holdings and base money in recent years, the 
People’s Bank of China continuously intensified ope n market operation to absorb the excess liquidity 
and to control the excess expansion of money and credits. 
33. In 2005, the People’s Bank of China continue d to implement a sound monetary policy, 
slightly lowered the interest rate of the exces s reserve, liberalized inter-bank deposit rates, and 
strengthened the coordination betw een domestic and foreign currency interest rate policies.  The 
People’s Bank of China also increased the intensity  of open market operations and adjusted the 
liquidity in the banking system.  The money market operated in a stable manner. 
Difficulties and Challenges Confronting Development 
34. China has made significant progress in its economic development over the past 20 years.  As 
a developing country with a population of 1.3 billion, however, it still faces great challenges and 
arduous tasks in its development. 
35. According to World Bank statistical data and its computing methodology, the aggregate 
volume of the Chinese economy in 2004 was equivalent  to 16.6% of that of the United States.  
China’s per capita GDP was equivale nt to 3.6% of the United States, 4% of Japan and only one fifth 
of the global average, and ranked 129
th of the world. 
36. By the end of 2005, there was still a population of 23.65 million in the rural areas of China 
living below the absolute poverty line of 683 RMB Yuan, and the low-income poor population living People's Republic of China WT/TPR/G/161 
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between the lines of 684 and 944 RMB Yuan was 40.67 million.  In China nearly 200 million people 
are living below the standard of one dollar per day.  Every year China has to find jobs for 24 million people in the urban area.  More than 100 million of surplus rural work force needs to 
migrate for other jobs. 
37. In economic and social development there is  a widening east-west regional disparity, as well 
as rural-urban disparity.  In 1980 the per capita  GDP in the eastern region was 1.53 times and 
1.89 times that of the central and western regions respectively.  The gap rose to 1.64 and 1.92 respectively in 1990, increased by 7.2% and 1.6% , and in 2002 further widened to 2.03 and 2.57, 
increased further by 23.8% and 33.9% as compared  to 1990.  The ratio be tween per capita personal 
disposable income of urban citizens and per capita ne t income of rural citizens in 2005 was 3.2:1.  In 
2003 and 2004 the figure was 3.23:1 and 3.209:1 respectively.  The issue of resolving regional and urban-rural disparity has been taken as the most  important element of the Eleventh 5-year 
Development Programme (2006 to 2010),  and requires long term hard work. 
38. China is a large agricultural country with a larg e rural population.  Income for the farmers is 
very low, and the basis for agricultural developm ent is vulnerable and weak.  There is downward 
pressure on grain prices and upward pressure on the pr ices of agricultural supplies, making it difficult 
for farmers to further increase grain production and their earnings, and discouraging them from 
growing grains.  Moreover, the total area of useab le farmland continues to decrease, and the overall 
agricultural production capacity is weak.  This po ses a threat to the nation's food security.  The 
development of the rural area remains an arduous t ask for China.  China is also under tremendous 
population, resource and environmental pressure  in the course of its development.  
39. There is an urgent need to rai se the average education level of its citizens, and to enhance the 
quality and skill of the labour force.  Currently the economic growth depends largely on method of 
high input and high consumption, and there has been no fundamental change in this crude and inefficient manner of growth, which is leading to  the increasingly serious constraints of resource 
supply and eco-balance sustainability.  Meanwhile, th e long term trend of rising prices for oils and 
mineral resources in the international market  has an adverse impact on China’s economic 
development that can not be overlooked.  The Chin ese Government will therefore intensify its efforts 
to save resources and protect the environment and build a resource-saving and environment-friendly 
society. 
40. The acceleration of globalisation is an objective international environment for China’s 
development.  In recent years, protectionist pressure  builds up.  Restrictive and protective measures of 
non-tariff barriers, standards, anti-dumping and saf eguards taken by some countries and economies 
against Chinese products constitute an obstacle to China’s development.  For 2005 alone, 18 countries 
took antidumping, special safeguard measures and textile restrictive measures affecting Chinese 
export of US$ 12 billion. 
II. TRADE POLICY DEVELOPMENT  
41. Opening up is China’s long term basic nationa l policy.  The Chinese Government adheres to 
the “mutually beneficial win-for-all” opening strate gy, and takes the pursuance of national interests 
and promotion of common development as the b asic principles in handling economic and trade 
relations with all countries and economies. 
Support and Defend the Multilateral Trading System 
42. China has always been supporting the stre ngthening of the multilateral trading system 
represented by the WTO and advocate the preserva tion and dissemination of the WTO sponsored WT/TPR/G/161 Trade Policy Review 
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fundamental principles guiding international trading relations.  Not withstanding WTO’s inadequacy 
in balancing the trading interests of different countri es and different regions, its lack of attention to the 
interests of developing countries, the fair, open and non-discrimination principles sponsored by WTO 
are conducive to the stability of international trade orders and the predictability of international trade 
development.  It embodies the spirit of multilateralism in favour of joint partic ipation in international 
affairs. 
43. China’s objective in building a socialist market economy system and its fundamental policies 
of reform and opening-up match w ith the basic principles of the multilateral trading system based on 
market economy.  China needs a fair, more open and dynamic multilateral trading system.  This is an 
imperative external condition for China’s economic development. 
Faithfully Implement the WTO Accession Commitments 
44. Ever since WTO accession China has abided by WTO rules, lived up to the extensive 
commitments made in the accession and made comprehensive adjustment of its trade regime and trade policy. 
Rule of Law and Transparency 
45. Before and after the accession, China systema tically overhauled existing laws, administrative 
regulations and department rules to comply with WTO rules and accession commitments.  From the end of 1999 to end of 2005, the Central Govern ment adopted, revised or abolished more than 
2,000 pieces of laws, administrative regulations and department rules.  They cover trade in goods, 
trade in services, trade-related intellectual prope rty rights protection, tr ansparency and uniform 
application of trade measures.  The adoption, revision and abolishment of laws, administrative 
regulations and department rules in this overhaul en sure the consistency of China’s trade regime with 
the WTO rules and the accession commitments.  All the principles, rules and requirements embodied in the WTO Agreement and the Protocol on the Accession of the People’s Republic of China are 
implemented in a comprehensive and effective manner. 
46. Since its WTO accession, China has significantl y enhanced government transparency.  The 
new Legislation Law  and Regulations on Procedures for the Formulation of Administrative 
Regulations  etc. institutionalized legislation transparen cy and establish it as a basic principle to be 
observed in China’s legislation formulation process .  The laws and regulations specifically require 
that in the formulation of legislation, public opi nions must be sought and the general public and 
stakeholders must be given full opportunities to comment in the forms of forums, seminars, public 
hearings and written communications or through INTERNET and news media.  There are also 
specific provisions on procedures concerning publishing of legislation.  The new Administrative 
Permission Law  adopted in 2003 set more strict and explicit transparency requirement concerning 
Government behaviour.  The Central Government has also in recent years intensified the efforts to 
promote publicity of the administrative informati on in governments at all levels.  To provide 
technology guarantee for this end, 96% of Centra l Government institutions and most of the local 
governments have launched their respective official  websites.  The Central Government website 
www.gov.cn went online on 1 January 2006.  Legisla tion transparency is now a general practice in 
China.  Administrative information publication is also implemented throughout the governments at all 
levels. 
47. The Chinese Government has also established China WTO Notification and Enquiry Centre  in 
the Ministry of Commerce in accordance with th e accession commitments to provide information 
concerning China’s trade policy, and to fulfil the ob ligation of notification of China’s trade policies People's Republic of China WT/TPR/G/161 
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and measures as specifically required by the WTO Agre ement.  The general public has free access to 
information concerning trade-related laws, regulation and rules through China Foreign Trade and 
Economic Cooperation Gazette , which is also available at the website of the Ministry of Commerce 
(www.mofcom.gov.cn). 
Trade in Goods  
48. In accordance with the WTO acc ession commitments, the average tariff level has been 
slashed from 15.3% at the time of accession to 9.9%  in 2005.  The average tariff rate of 14.8% for 
industrial goods prior to WTO accession was reduced to  9.0% in 2005.  The average rate of 23.2% at 
the time of accession for agricultural products was redu ced to 15.3% in 2005.  Up to 1 January 2005, 
China had, in accordance with the Information Technology Agreement (ITA), eliminated tariffs for all 
ITA products.  It should be particularly pointed ou t that 100% of China’s tariffs are bound.  Applied 
rates and bound rates are exactly the same. 
49. With regard to the commitments under Annex 3 to the Protocol of Accession concerning the 
elimination of non-tariff measures including import quota, import license and import tendering, all 
these measures had been eliminated on schedule by 1 January 2005.  The administration of the tariff 
rate quota system has been further improved and quota level gradually increased in line with the 
commitments made.  Tariff rate quota admini stration for vegetable oils was abolished on 
1 January 2006, as committed. 
50. In line with the Foreign Trade Law  as amended in April 2004, the Chinese Government 
implemented the commitment on liberalisation of trading right on 1 July 2004, six months ahead of 
schedule.  On 1 January 2005, state trading for silk was abolished.  Designate trading was also 
eliminated on schedule.  
Trade in Services 
51. All the market access commitments in the fiel d of trade in services have been implemented 
through the revision and adoption of sector-specific laws, administrative regulations and department 
rules.  The level of market access for foreign ser vices suppliers has been significantly increased.  Of 
the 160 services sectors and sub-sectors under the WTO classification, China has opened more than 
100, accounting for 62.5%, close to the level of  commitments made by developed Members. 
52. Take banking services for example, up to end of 2005, 72 foreign banks from 21 countries 
and regions have established 254 ope rational institutions in China,  and 177 foreign banks from 
40 countries and regions have est ablished 240 representative offices.  Total assets of foreign banks 
increased from US$ 11.84 billion by end of 1994 to US$ 87.657 billion by the end of 2005, 
representing a 7.4-fold increase within 11 years. 
53. In insurance services, there were 82 insurance companies in China by the end of 2005, 40 of 
them are foreign invested insuran ce companies.  The premium revenu es of foreign invested insurance 
companies have experienced a rapid expansion, 29 times faster than domestic insurance companies.  
For the first ten months of 2005, premium reve nues of foreign property insurance companies 
increased by 27.8% over the correspondent period of the previous year while that of foreign life 
insurance companies increased by 356.1%. 
54. In distribution services, the Chinese government has implemented a market opening for 
foreign invested enterprises by eliminating th e restrictions on the number of business units, 
geographical location and the foreign ownership.   Since 1992, China has cumulatively approved 
1,341 foreign invested distribution enterprises, wh ich have opened a total nu mber of 5,657 retail WT/TPR/G/161 Trade Policy Review 
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shops.  In 2005 alone, newly established foreign in vested distribution ente rprises outnumber the total 
approvals from 1992 to 2004.  Market share of larg e foreign invested supermarket chains in the 
Chinese market continued to expand.  By 2005, th ey have accounted for more than a quarter, even 
over 50% in a few cities. 
55. China has also faithfully implemented the commitments in telecom services, accounting 
services, education services and others, thus havi ng offered enormous market access opportunities. 
Intellectual Property Rights 
56. The Chinese Government attaches great importan ce to the protection of intellectual property 
rights (IPRs).  Before and after its WTO accession, China took actions to amend almost all IPR-
related laws, regulations and ju dicial interpretations to ensu re consistency with the WTO Agreement 
on Trade-related Aspects of Intellectual Property Rights  and other international rules on protection of 
intellectual property rights. 
57. In the meantime, the Chinese Government set as its priority work to strengthen enforcement 
of laws to combat IPR infringements.  In recent year s, patent administration departments at all levels 
have strengthened administrative enforcement of the law in this respect.  In particular, they have 
launched special enforcement actions on infringements of patent rights of food and medicines, which 
are closely connected with people’s h ealth and lives.  Great efforts have  also been paid to investigate 
and deal with cases that infringe upon the patent  rights of key technologies and cases that had 
widespread repercussions.  4,767 cases in total have  been investigated and dealt with in 2005. 
58. Administrative organs of industry and commer ce at all levels across China have fully 
exploited their advantages in trademark administra tive law enforcement –complete networks, simple 
procedures and high efficiency.  Focusing on the protec tion of the right to exclusive use of registered 
trademarks, and dutifully carrying out their responsib ilities, they have investigated and dealt with a 
large number of trademark infringement and counterfe iting cases.  7 concentrated special actions have 
been launched with 49,412 trademark violation cases being investigated and tacked with across the 
country through the year of 2005.  Among all th e cases, 39,107 are trademark infringement and 
counterfeit cases and 6,607 ar e foreigner-related cases. 
59. China’s copyright administrative management de partments at all levels have strengthened 
their administrative enforcement of the copyright la w.  They have increased cooperation with other 
government departments, such as the department s of public security, industry and commerce, the 
Customs, press and publications and cultural depa rtments.  As a result, a mechanism of law 
enforcement whereby different departments are coor dinated in combating copyright infringement and 
piracy has gradually taken shape.  They have la unched a series of campaigns to crack down pirated 
discs, textbooks, reference books, software, illegal duplication and selling of audio-video products, 
selling of smuggled audio-video pro ducts and internet infringement pr actices.  A total of 8,060 cases 
have been investigated and dealt with in 2005. 
60. At present, the Customs has established a comple te system of IPR-related laws enforcement 
measures.  It has established a cen tral filing system for IPR Custom s protection.  As long as the IPR 
proprietors have filed their IPR with the General Administration of Customs, the port Customs have 
the power to detain imported and exported goods th at infringe on the filed IPR.  Law enforcement 
organization have also been founded and improve d.  Besides detaining import or export goods 
suspected of IPR infringement, the Customs can al so investigate and deal with illegal import and 
export of right-infringing goods with in the scope of its power and dut y.  In 2005, 1,208 cases have 
been dealt with.  In addition, the Chinese Customs have signed agre ements of mutual assistance in People's Republic of China WT/TPR/G/161 
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administrative law enforcement with the Customs of the European Union member countries, the 
United States and etc. 
61. The Chinese public security organs have adopted a series of measures to crack down on all 
kinds of criminal IPR infringement.  They also  attach great importance to international law 
enforcement cooperation in the fight against IPR in fringements and have c onducted cooperation with 
law enforcement organizations of other member s.  As of December, 2005, the public security 
authorities have investigated and dealt with, under the Campaign named “ShanYing” or “Mountain 
Eagle”, a total of 3,534 IPR infringement cases and resolved 3,149, which are respectively 198.5% 
and 213.6% rise to that of 2004. 
62. The procuratorial organs have earnestly exercised their duties of examination of arrests and 
prosecutions in cases of criminal IPR infringement, as  well as legal supervision over relevant criminal 
lawsuits in accordance with law, handled a large nu mber of cases of suspected IPR infringement.  In 
2005, 4,143 IPR criminal cases (increased by 15 .86%) have been accepted upon applications for 
arrest, while 4645 cases (increased by 24.63%) acce pted upon prosecution initiatives transferred by 
public security organs. 
63. The Chinese people’s courts at all levels have continuously strengthened work in IPR-related 
civil and criminal trials under the principle of “justice and efficiency.” The Supreme People’s Court 
of China has formulated a series of relevant judici al interpretations in accordance with the law, and 
improved a series of important IPR-related law appli cation principles.  Throughout the year of 2005, 
3,567 (increased by 27.9%) criminal cases of IPR infringement have been accepted, while 13,424 
(increased by 44.1%) first instance civil cases being accepted. 
64.  With regular oversight and specific cases resolution combined, the intensity of IPR 
protection has been substantially enhanced on both administrative and judicial fronts.  In 2004, a 
National Working Group on IPR Protection headed by Vice Premier was established to assume the responsibility of overseeing and coordinating nationa l work on IPR protection.  Between September 
2004 and end of 2005, the Chinese Government la unched a nation wide special campaign on IPR 
protection. 
65. The Chinese Government also attaches great atte ntion to the education of intellectual property 
rights protection with the aim of raising awarene ss of the whole society.  In 2004, the Chinese 
Government set the week of 20 to 26 April each year as “IPR Protection Education Week” to enhance regular public education throughout the country on IPR protection, to create a favourable social 
environment which respects other people’s work, respects knowledge and talents, respects creation 
and innovation, and in a nutshell to  raise the general public awareness and consciousness of the issues 
of intellectual property right and its protection. 
66. China has made significant progress in IPR protec tion particularly in building the IPR-related 
legal system and raising the consciousness of the general public for IPR protection.  However, the 
Chinese Government is fully aware that like in all other countries the protection of intellectual 
property rights is constrained by the level of econo mic development and other conditions in reality.  
IPR protection in China cannot be perfected overni ght.  The Chinese Government is determined to 
continue its persistent and strenuous  efforts to achieve that goal. 
Active Participation in the “Doha Round” Negotiations 
67. The Doha Round negotiation has a strong bearing on the future development of international 
trade, the possibility of balanced and orderly de velopment of the world economy and the immediate 
interests of the people of the world.  The early co nclusion of the Doha Round with balanced results WT/TPR/G/161 Trade Policy Review 
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upholds the multilateral trading system, and will prom ote further the liberalisation of international 
trade.  Generally this will be in the interests of  all WTO Members including China.  Up to now, China 
has submitted more than 30 proposals and position pa pers in the negotiations, which had played a 
positive and constructive role in advancing th e negotiations, bridging understanding among WTO 
Members and narrowing differences.   
68. The Chinese Government is of the view that the Doha Round is a development round.  The 
round should effectively ensure that developi ng Members benefit from the outcome of the 
negotiations.  The negotiations on each and every speci fic subject should take full account of the level 
of development and capacity of de veloping embers; should put special and differential treatment into 
effect to allow them to implement development stra tegy that suits their own conditions within their 
territories.  China supports the outcome of the Hong Kong Ministerial Conference on cotton and duty-free, quota-free market access in favour of the leas t-developed countries (LDCs) and other relevant 
developing Members. 
69. On agriculture, China is of the view that th ere is a fundamental difference in the pressure 
faced by developed and developing Members.  Bein g a developing Member with a rural population of 
740 million, China maintains low tariffs for agricult ural products, has eliminated export subsidy and 
provides domestic support only at de minimis  level.  China supports the elimination of all kinds of 
export subsidies provided by developed Members, s ubstantial reduction of tr ade-distorting domestic 
support, and significant reduction of tariff peaks and tariff escalation in developed Members.  
Meanwhile, there should be effective solution of  the specific concerns of developing Members 
relating to special products and special safeguard mechanism. 
70. In respect of non-agricultural market access (NAMA), the Chinese Government supports the 
consensus reached at the Hong Kong Ministerial C onference on the Swiss Formula with coefficients, 
which will serve to reduce high tariffs.  In the mean time, there should be sufficient difference in the 
coefficients applied to developing and developed Me mbers to reflect the difference in the level of 
development and the tariff structures. 
71. In trade in services, China hopes that the negotia tions will reflect more the export interests of 
developing Members, and will strengthen their capac ity to participate in world trade in services. 
72. The negotiations on rules should contribute to further clarify and improve WTO rules, 
promote trade facilitation and reduce the abuse of trade remedy measures, particularly antidumping measures against developing Members. 
73. In this new round of negotiations, special c oncerns of newly acceded Members including 
China should be recognized and respected.  The tr ansition period for these Members has generally not 
expired.  The market opening pressures from the accessi on remain to be absorbed.  Quite a number of 
industries are under heavy adjustment pressure when the extensive acc ession commitments are 
implemented.  Therefore, there should be effec tive solutions for the special concerns of newly 
acceded Members in accordance with the Doha Declaration, the July Framework of 2004 and the 
relevant provisions of the Hong Kong Ministerial Declaration. 
74. The multilateral trading system is in a critical stage.  In spite of the tough negotiation task 
before us, the Chinese Government aspires to work ha rd with all other Members in order to conclude 
the Round before the end of 2006. People's Republic of China WT/TPR/G/161 
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Regional Trade Liberalisation 
75. Regional economic and trade coope ration is an objective trend in world economy and trade as 
well as a natural choice for countries and regions th roughout the world to adapt to the accelerating 
process of globalisation of the world economy.  Regional trade liberalisation helps bring down 
barriers to intra-region trade and investment.  It could become a useful supplement to the multilateral 
trading system and help push forward the global trade liberalisation and investment facilitation. 
76. At the same time, regional trade liberalisati on should not be done at the expense of the 
multilateral trading system.  WTO Members partic ipating in regional trade liberalisation have 
obligations to pursue proper balance between the policy objectives of regional trade liberalisation and 
the defence of the basic disciplines  of the multilateral trading system. 
77. China steadily participates in regional trade liber alisation on the basis of the above mentioned 
principles.  Currently China has concluded or in  the process of negotiating nine free trade area 
agreements involving 27 countries and regions.  Fo r 2005, China’s trade volume with these countries 
and regions was US$ 344.5 billion accounting for one forth of China’s total trade for that year. 
78. The China-ASEAN Framework Agreement on Comprehensive Economic Cooperation  signed 
in November 2002 marked the entry into force of the China-ASEAN Free Trade Area.  This is the 
first free trade area agreement China joined.  In November 2004, China and ASEAN concluded 
China-ASEAN Framework Agreement on Comprehensive Economic Cooperation -  Agreement on 
Trade in Goods .  In line with the agreement, China and ASEAN started full impl ementation of tariff 
concessions as from 20 July 2005.  Currently the ne gotiations on trade in service and investment are 
accelerating. 
79. The mainland of China concluded the Closer Economic Partnership Arrangement  (CEPA) 
with Hong Kong, China and Macao, China in J une and October 2003 respectively.  Both 
arrangements entered into force on 1 January 2004.  Subsequently supplementary agreements were 
signed in 2004 and 2005 respectively expanding the coverage of CEPA.  The implementation of 
CEPA and their supplements spurred the libera lisation of trade in goods and services and the 
facilitation of trade and investment between the mainland and Hong Kong, China and Macao, China.  
It also promotes the economic integration of th e two Special Administrative Regions with the 
mainland. 
80. The Chinese Government and the Chilean Government signed China-Chile Free Trade 
Agreement  on 18 November 2005.  This is the first fre e trade area agreement China signed with a 
Latin American country.  The two countries will set  in motion the full-fledged tariff reduction process 
for trade in goods in the latter half of 2006. 
81. In April 2005, the Governments of China and Pakistan launched the free trade area 
negotiations and signed the Agreement on the Early Harvest Programme for the Free Trade 
Agreement , which entered into force on 1 January, 2006. 
82. Currently, China is negotiating on free trade area agreements with the Gulf Cooperation 
Council, New Zealand, Australia and etc. 
Proper Handling of Trade Disputes 
83. With the rapid growth of global trade, the emergence of trade disputes among trading partners 
is a normal phenomenon.  China has constantly sought to resolve trade disputes properly in WT/TPR/G/161 Trade Policy Review 
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accordance with WTO principles and rules, through dialogues and consultations  on equal footing and 
in the spirit of reaching compromise acceptable to both parties. 
84. China is a responsible member of the interna tional trade community.  In the formulation and 
implementation of domestic economic and trade polic y, China always gives due consideration to 
international factors and the impacts on other WTO Me mbers.  This constant attitude of the Chinese 
Government has been manifested in maintaining the stability of the RMB during the Asian Financial 
Crisis, the reform of RMB exchange  rate regime, the restraints exercised over the issue of textiles 
exports, the reinforced efforts to strengthen the protection of intellectual property rights and etc. 
85. China attaches great importance to bilateral c onsultations and exchange of views with all 
countries and regions on economic and trade i ssues.  China has established institutionalised 
mechanism of Mixed (Joint) Economic and Trad e Committee with 146 countries and regions to 
conduct regular consultations, review the state of  bilateral trade and ec onomic relations, resolve 
disputes and outstanding issues and ultimately pr omote the harmonious and healthy development of 
economic and trade  relations. 
86. China applies an open trade policy.  China has no intention to pursue trade surplus and wish 
to maintain a general balance of imports a nd exports.  Countries and regions are mutually 
complementary with each other in their economy and trade.  Such complementary relationship should 
not be subject to undue harsh interference with trade policies such as export restrictions of 
technology.   
87. Currently, China has been subject to the greatest number of anti-dumping actions among all 
WTO Members.  According to WTO statistics,  there were 2,743 anti-dumping measures reported 
during the period from 1995 to first half of 2005 , of which 434 were against Chinese products, 
accounting for 16%.  Chinese enterprises and exporter s also have grave concern over all kinds of 
technical barriers and their adverse impact on trade.  Interests of a lot of them were also seriously damaged by the restrictive measures against Chinese textiles and clothing.   
88. The Chinese Government holds the view that discriminatory measures against a particular 
member is contrary to the spirit of free trade and the principle of non-discrimination enshrined in the 
multilateral trading system.  The abuse of such me asures damages the creditability of the multilateral 
trading system and is harmful for its further development. 
Promoting Economic Cooperation with Developing Members 
89. The Chinese economy is to a high degree mutually complementary with other developing 
countries, and there are huge potentials for coopera tion.  Therefore the Chinese Government attaches 
great importance to promoting South-South cooperation. 
90. China has granted preferential tariff treatment to more than 30 least developed countries.  
President HU Jintao announced at the Meeting on Financing for Development of the United Nations 
Summit in September 2005 that China would furthe r open its market to the LDCs and accord zero 
tariffs for most China-bound exports from the 39 LDCs having diplomatic relations with China.  From 
2002 to 2005, import from the 39 LDCs, which China offered special treatment on tariff and market 
access, is almost quintupled from USD 3.336 billion to USD 15.523 billion. 
91. In respect of investment, China is currently applying the “Go abroad” strategy, encouraging 
Chinese enterprises to invest and engage in ec onomic and trade cooperation abroad.  Developing 
countries are the primary destinations in this drive.   The “Go abroad” strategy has promoted economic People's Republic of China WT/TPR/G/161 
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cooperation and trade exchange between China and de veloping countries.  It is also conducive to job 
creation, tax revenue increase and economic  development in the host countries. 
92. China is making greatest efforts to provide development assistance to fellow developing 
countries.  Up to now China has provided assistance to more than 110 countries and regional 
organisations for more than 2,000 projects, writte n off 198 batches of debts of a total amount of 
16.6 billion Yuan owed to it by 44 developing c ountries.  President HU Jintao announced in 
September 2005 that China would further expand the aid programme for the heavily-indebted poor 
countries and LDCs and, working through bilateral channels, write off or give up in other ways, 
within the next two years, all the overdue part s as of the end of 2004 of the interest-free and low-
interest governmental loans owed by the HIPCs ha ving diplomatic relations with China.  In the 
coming 3 years, China will provide US$ 10 billion  in concessionary loans and preferential export 
buyer's credit to developing countries, increase me dical aid to them, particularly African countries, 
and help train for them 30,000 qualifie d personnel of various professions. 
93. On 12 January 2006, the Chinese Government issued the African Policy Paper , setting the 
direction and priority areas for strengthening Chin a-Africa friendship and cooperation.  In the 
economic related field, the paper expressed China’s in tent for cooperation in 10 areas including trade, 
investment, finance, agriculture, infrastructure, na tural resources, tourism, debt release, economic 
assistance and multilateral cooperation. 
III. OUTLOOK 
Build a Harmonious Society and a Harmonious World  
94. China’s development goal for the first two decad es of this century is to build a well-off 
society of a higher standard in an all-round way to  the benefit of the whole population of 1.3 billion 
people.  China will further develop the economy, im prove democracy, advance science and education, 
enrich culture, foster social harmony and upgrade the texture of life for the people. 
95. In order to achieve this goal, the Chinese Government will guide the overall economic and 
social development with a people-oriented and scien tific approach of comprehensive, coordinated and 
sustainable development.  GDP for the next five years is expected to reach at an annual average 
growth of 7.5 percent in the Eleventh 5-year De velopment Programme.  The priority work is to 
maintain steady and rapid economic  growth free from erratic ups and downs.  High priority will be 
given to the issues of “agriculture, rural areas and fa rmers”, to steadfastly advancing the building of 
new socialist rural areas, and resolving the dual structure of rural-urban economy.   
96. China needs to increase overall agricultural capacity, promote agricultural restructuring, 
intensify development of rural infrastructure, and increase farmers' incomes.  China will focus on 
implementing key projects to establish large prod uction bases for grain, cotton and edible oil, 
industrialize production of superior quality grain varieties, build wa ter conservancy facilities and safe 
drinking water supplies, build roads and methane production facilities, and deve lop education, culture 
and health in rural areas.  China must also comprehensively promote overall rural reform and 
basically complete reform of town and township government bodies, rural compulsory education, and 
fiscal management in counties and townships.  Chin a needs to create a new type of farmer who has a 
good basic education and unders tands both agricultural techniques and business operations.   
97. Over the next two years, China will completely  eliminate tuition and miscellaneous fees for 
all rural students receiving compulsory education.  Expenditure for rural compulsory education will 
be fully incorporated into the central and local government budgets.  China will improve the system of 
rural credit cooperatives, carry out reform of th e Agricultural Bank of China and the Agricultural WT/TPR/G/161 Trade Policy Review 
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Development Bank of China and increase the pace of innovation in banking and finance in rural areas 
to improve the banking system and financial services there.  China will continue to follow the policy 
of expanding employment and do everything possible to create more jobs for rural laborers coming to cities to find jobs.  China will work out social secu rity measures suitable for rural migrant workers.  
China will improve the system for providing f ood, clothing, medical ca re, housing and burial 
expenses for childless and infirm rural residents, the system for providing assistance to families in 
extreme poverty and the system for providing relief to  disaster victims by increasing financial support 
and appropriately raising the level of assistance .  Governments in localities where conditions permit 
need to look for ways to set up a system of subsis tence allowances for rural residents.  China will 
launch the Program for Establishing and Developing a Rural Health Care Service System to improve 
the system and network of medical and health care th at spans the three levels of county, township and 
village.  China will speed up the establishment of a new type of rural cooperative medical care 
system.  By 2008, this new system and a rural medical assistance system should be basically in place in all rural areas. 
98. In order to promote domestic consumption,  the MOFCOM initiated “Market Development 
Project Covering Thousands of Villages and Towns” in February, 2005.  It aims at gradually 
popularizing chain-store operations in rural areas; making standardized farmer shops cover 50% of 
villages and 70% of towns across the country within  3 years; building a modern retail distribution 
network in rural areas thus making shops in urban areas play a leading role, shops in towns play a 
major role and shops in villages play a fundame ntal role.  There are 1,150 retail and wholesale 
enterprises which have started pilot project s in 777 cities and counties nationwide.  
71,000 standardized farmer shops have been newly established and renovated within the year. 
99. New model of industrialisation will be followed.   Different regions will be categorized as 
suitable for optimal development, or priority develo pment, or restricted development or development 
prohibition according to their respective resources and environmental constrains and local potential advantages with the aim of promoting coordinated re gional development.  The basic national policy of 
resource-saving and environmental protection will be implemented more effectively to facilitate the 
building of a resources-efficient and environment-friendly society and to ensure the harmony of 
economic development, resource avai lability and environment sustainability.  Efforts will also be 
made to strengthen scientific and technological in novation capability and enhance the quality of the 
labour force . 
100. The Chinese Government will persist in the “mut ually beneficial win-for-all” open strategy, 
and is of the view that all countries of the wo rld should join hands to build a harmonious world 
embracing all civilisations.  Countries should aim to create a healthy and orderly trading environment 
and a stable and efficient financial environm ent conducive to world economic growth through 
establishing and improving an open, fair and non- discriminatory multilateral trading system and 
perfecting the international financial regime.  Countries should step up worldwide energy dialogues 
and co-operation and make joint efforts to maintain energy security and energy market stability.  Joint 
efforts should be made to push the economic globali sation in the direction of balanced, universally 
beneficial and win-for-all development.  Th e developed countries should undertake more 
responsibility to further open their market, transfer  technology, increase assistances and release debts 
in favour of developing countries, particularly the HIPCs and the LDCs. 
Deepen the Reform and Raise Further the Level of Opening 
101. All the achievements that have been made in  China’s economic and social development are 
closely linked with the reform and open policy.  In  the process of future development, the Chinese People's Republic of China WT/TPR/G/161 
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Government will persist in the reform and open policy, continue  to improve the market economy 
system and further raise the level of opening up. 
102. The Chinese Government will push forward the reform of the administrative system to 
strengthen the government’s function of social governance and public service; accelerate the 
transformation of state-owned enterprises into joint stock companies, promote the joint stock system 
to be the main vehicle of public ownership, and push forcefully the development of the non-public 
sectors.  Efforts will be made to further the reform  of the fiscal and taxation system to accelerate the 
construction of the public finance system, accompli sh the transformation of value-added tax system 
from production-oriented to consumption-oriented, and unify the taxation system to be applied 
uniformly to all enterprises.  The Government will also accelerate the reform of the financial system 
to complete the restructuring of state-owned financ ial enterprises into joint stock companies, and to 
gradually develop small and medium  financial enterprises of multiple ownerships.  The Government 
will further the development of the nation-wide unifi ed market, continue to develop land, technology 
and labour markets and let the market to play the f undamental role in resources allocation.  Building 
of a credibility and trust system in China will also be accelerated. 
103. The Chinese Government will combine as a whol e the domestic development and the opening 
up, with a view to achieving fast and favourable  economic development unde r more open conditions.  
China will continue to develop foreign trade, make  effort to achieve import and export balance and 
optimise the structure of import and export products.  China will continue to pursue active utilisation 
of foreign capital while strengthening the guidance on industrial and regional priority for foreign 
investment, to improve the quality of utilising foreig n capital.  Chinese enterprises will continue to be 
encouraged to invest and open up business in foreig n countries in accordance with the principles of 
mutual benefits, win-for-all and mutual comple mentarity, to improve their understanding and 
knowledge of international economic , trade and investment environment and abide by international 
practices in doing business.  China will also conti nue to pursue at multilateral, regional and bilateral 
level liberalisation of global trade and investment , make effort to stabilise international trade 
environment, and join in the concerted efforts with  all trading partners to achieve the goal of a win-
for-all situation. 
__________