WORLD TRADE ORGANIZATION  
ORGANISATION MONDIALE DU COMMERCE  
ORGANIZACIÓN MUNDIAL DEL COMERCIO  WT/TPR/M/161/Add.3 
16 January 2007 
 (07-0200) 
Trade Policy Review Body 
19 and 21 April 2006 Original:   English/Spanish 
                 anglais/espagnol                  inglés/español 
 
TRADE POLICY REVIEW 
PEOPLE'S REPUBLIC OF CHINA 
Minutes of Meeting
 
Addendum  
Chairperson:  H.E. Mrs. Claudia Uribe (Colombia) 
 This document contains additional responses pr ovided by the People's Republic of China to 
advance written questions by Members.1 
  __________________________________________________________________________________  
Organe d'examen des politiques commerciales 
19 et 21 avril 2006 
 
EXAMEN DES POLITIQUES COMMERCIALES 
RÉPUBLIQUE POPULAIRE DE CHINE 
Compte rendu de la réunion
 
Addendum  
Présidente:  S.E. Mme Claudia Uribe (Colombia) 
 
 Le présent document contient les réponses add itionnelles fournies par la République populaire 
de Chine aux questions écrites communiquées à l'avance par les Membres.1 
__________________________________________________________________________________  
Órgano de Examen de las Políticas Comerciales 
19 y 21 de abril de 2006 
 
EXAMEN DE LAS POLÍTICAS COMERCIALES 
REPÚBLICA POPULAR DE CHINA 
Acta de la reunión
 
Addendum  
Presidenta:  Excma. Sra. Claudia Uribe (Colombia) 
 
 En el presente documento figuran las res puestas adicionales facilitadas por la República 
Popular de China a las preguntas presentadas anticipadamente por escrito por los Miembros.1 
                                                      
1 In English and Spanish only./En anglais et espagnol seulement./En inglés y español solamente.  WT/TPR/M/161/Add.3 
 Page 3 
 
 
ADDITIONAL RESPONSES BY THE REPUBLIC OF CHINA  
TO ADVANCE WRITTEN QUESTIONS BY MEMBERS 
 
Question: 
US I  
39. Paragraph 230 of Chapter III of the report st ates that the Chinese government apparently has 
implemented a measure requiring SOEs to provide at  least 50 percent of all investment in a project, 
with the remaining percentage being available in the form of loans from state-owned banks.  
a. Please identify the measure in question, a nd describe the types of projects are covered 
by it. 
b. Is the portion of the financing provided by the state-owned banks preferential in 
nature?  Please explain. 
Answer: 
This information in the Secretariat report is not  accurate. There are requi rements for companies to 
provide certain percentage of the investment in a project themselves, thus restricting them from 
borrowing from banks. This is to curb irrational investments, particularly in those sectors already 
with excessive production capacity. The percentage vari es from one sector to another, for example in 
the iron and steel industry, a mandatory self-finance ratio of 40% is found in the Development Policy 
on Iron and Steel Industry. All companies are subject to sector-specific self-finance ratio 
requirements. It is not merely targeted at SO Es. Borrowings from banks by SOEs and other 
enterprises are all subject to the same commercial terms and th ere is no special or preferential 
treatment for SOEs. Major policies in this respect include the State Council Circular No. 35 of 1996, 
State Council Circular No. 13 and No. 20 of 2004, among others. 
Question: 
US I  
46. Paragraph 11 of Chapter IV of the report stat es that households have the right to use farmland 
and have the right to transfer farmland usage rights by contract but may not sell land.   
a. To whom may farmers transfer their land use rights?  What restrictions apply? 
b. To whom may farmers rent thei r land? What restrictions apply? 
Answer: 
Please refer to the 2002 Law of the People’s Republic  of China on Land Cont ract in Rural Areas. 
English translation of the Law is available at the WTO Secretariat. WT/TPR/M/161/Add.3 
Page 4  
 
Question:  
US I
 
61. Paragraph 133 of Chapter IV of the report describes China’s automotive industrial policy.  
The United States understands that China plans to impl ement this policy in part by providing financial 
support, including export credits, to certain domestic  auto or auto parts manufacturers.  MOFCOM is 
reportedly in the process of selecting 100 Chinese auto or auto parts manufacturers to be designated as 
"state level" exporters, which w ill be targeted for financial support.  The selected manufacturers are 
required to have domestically owne d intellectual property, efficien t production methods and a large 
amount of existing exports. 
a. Please describe the nature of the financial support being contemplated by MOFCOM. 
b. If one of the eligibility criteria for th e selected manufacturers is having a large 
amount of existing exports, would China c onsider any preferential support provided 
under this contemplated program to be a prohibited export subsidy within the 
meaning of Article 3 of the Subsidies Agreement?  If not, please explain. 
Answer: 
The Chinese government does not have such plan an d therefore is in no position to comment on these 
two questions. 
Question:  US II
 
2. According to paragraph 46 of Chapter II of the report, manufacturing, much of which is 
dominated by foreign-invested enterprises (FIEs) , accounted for 91.4 percent of China’s total 
merchandise exports in 2004.  The report later explai ns that China is trying to encourage domestically 
owned firms to move up the value-added chain as FIEs  appear to account for a greater share of output 
of higher value-added production.  Can China provide  a current estimate of the percentage of content 
that is Chinese in its manufacturing exports?  If so, can China disaggregate this information by 
domestically owned enterprises and FIEs? 
Answer: There is no such estimate available officially. 
Question:  
US II
 
3. Paragraph 52 of Chapter I of the report discusses  statistics on foreign direct investment (FDI) 
in China.  Please explain why China recently announ ced that it would no longer release statistics on 
contracted FDI.  WT/TPR/M/161/Add.3 
 Page 5 
 
 
Answer: 
Statistics on foreign direct investment in China follow the standards of the IMF fifth edition of the 
Balance of Payments Manual. Considering that di sclosing the amount of contractual FDI is not a 
common practice in most countries, and that contractual FDI does not reflect the actual inflow of 
foreign investment and therefore is not indispensable to understanding and analyzing the FDI status 
in China, China decided to disc ontinue the release of these figures. 
Question:  
US II  
4. Paragraph 26 of Chapter II of  the report explains that, according to the authorities, China’s 
current laws and regulations establish judicial re view for administrative actions related to the 
implementation of laws, regulati ons and other measures involving trade in goods and services or 
intellectual property rights, as require d by China’s Protocol of Accession.  
a. Please identify the ministries and agencies w hose administrative actions related to the 
implementation of laws, regulations and other measures involving trade in goods and 
services or intellectual property rights are subject to judicial review. 
b. For each identified ministry or agency, please identify the court that conducts the 
judicial review. 
c. For each identified ministry or agency, please identify the number of times judicial 
review of one of its administra tive actions has been conducted. 
Answer: 
Specific administrative actions by any ministry or government agency are subject to judicial review, 
so long as they fall into the following categories:  
 1. an administrative sanction, such as dete ntion, fine, rescission of a license or permit, 
order to suspend production or business or confiscation of property, which one 
refuses to accept; 
 2. a compulsory administrative measure, su ch as restricting freedom of the person or 
the sealing up, seizing or freezing of pr operty, which one refuses to accept; 
 3. infringement upon one's managerial deci sion-making powers, which is considered to 
have been perpetrated by an administrative organ; 
 4. refusal by an administrative organ to issu e a permit or license, which one considers 
oneself legally qualified to apply for, or its failure to respond to the application; 
 5. refusal by an administrative organ to p erform its statutory duty of protecting one's 
rights of the person and of property, as one has applied for, or its failure to respond to the application; WT/TPR/M/161/Add.3 
Page 6  
 
 6. cases where an administrative organ is c onsidered to have failed to issue a pension 
according to law; 
 7. cases where an administrative organ is considered to have illegally demanded the 
performance of duties; and 
 8. cases where an administrative organ is considered to have infringed upon other 
rights of the person and of property.  
The court that conducts the review is decided by the nature of the case, as stipulated in the 
Administrative Procedure Law of the People’s Republic of China (Article 13 ~ 23 of Section 3). 
English version of the law is available at the WTO Secretariat.  
As for the data on judicial reviews conducted, China does not keep the record but it has taken note of 
the question.  
Question:  Switzerland I
 
Para. 39 seems to suggest that China continues to  encourage the use of local inputs, including by 
foreign investors, to pursue certain trade policy objectives. Could the Chinese authorities explain how 
they intend to ascertain compliance of these measure s with the provisions of the Agreement on Trade-
Related Investment Measures? 
Answer: No Member in the WTO discourages use of local products. But it must live up to the obligation in 
relevant WTO rules at the same time by refraining fr om using "import substitution" or "local content 
requirements". In this regard, China does not see an y inconsistency. There are certain policies in the 
subsidies notification China submitted that seem relevant to the use of locally-made equipment. The 
rationale behind those policies is that the existi ng VAT system in China is still production-oriented 
instead of consumption-based. Fixed assets investme nt by enterprises in China is not subject to 
discounts of VAT payable by the enterprises. Furth ermore, those preferenti al tax policies were 
introduced for domestic products also because ther e were earlier policies which had already granted 
tax and tariff exemption to the same kind of impor ted products.  With the purpose of levying tax 
equally on foreign and domestic products, these policies do not lead  to import substitution or 
discriminate against imported products. As such, Ch ina sees no violation of the TRIMS Agreement. 
Question:  Switzerland I
 
Para 37. For which reason does the tariff Commission designate certain products to be subject to the 
inward duty rate regardless if they meet the criteria of "reasonable amount which suffices personal 
use"?  WT/TPR/M/161/Add.3 
 Page 7 
 
 
Answer: 
Products designated in this category include autom obile and its parts, motorcycle and its parts, and 
products subject to import restrictions under Article XX of GATT. The list of the latter is included in 
the annual QR notification China made to the WTO. 
Question:  
Switzerland I  
Para. 235. Could the Chinese authorities explain why official government statistics reportedly only 
include domestic Chinese enterprises as "private enterprises" and exclude other privately owned 
companies, including foreign-invested ones? What are in particular the economic, legal and financial 
consequences of such different classifications? 
Answer: 
As a matter of fact, the official statistics include not  only domestic "private enterprises" but also other 
privately owned companies including foreign-invested en terprises. In the statis tics the term "private 
enterprises" may be misleading simply because it is a word-by-word translation from Chinese which 
happens to be the name of one type of privately owned companies in China. The corresponding term 
in official Chinese statistics on private enterprise s seems to be "private economy" or "private 
ownership", which includes not only domestic "p rivate enterprises", but also foreign-invested 
enterprises and others.  
Question:  
Switzerland I  
(ii) Electricity  Para. 63. Please give some information about the strategies and instrume nts China can use for 
increasing the energy efficiency of equipments. 
Answer: In 2005, the Chinese government introduced th e Medium and Long-term Development Plan for 
Energy Saving, pledging to improve laws and regul ations, tighten manageme nt, upgrade equipment 
and instruments for energy generation and cons umption on the back of modern technology, 
restructure industry and the extensive economic growth model, and strengthen energy planning to 
increase overall efficiency. Major policies in this area include: 
 1. Promoting the advancement of energy- saving technology, for example, giving support 
to key demonstrative projects for energy  conservancy; amending the China Policy 
Outline on Energy-saving Technology and st udying fast-track promotion of energy-
efficient and saving products. 
 2. Developing energy-saving standards and plans, for example, formulating the 
Administrative Measures on Economica l Use and Substitution of Petroleum, 
amending the Administrative Measures on Economical Power Use, developing WT/TPR/M/161/Add.3 
Page 8  
 
mandatory energy efficiency standards for major industrial equipment, office 
facilities and household appliances, and layi ng down criteria for setting upper limits 
on energy consumption by specific manufac turing processes which are traditionally 
high energy-consuming. 
 3. Adopting fiscal and tax measures to encourage the production and use of energy-
saving products. 
 4. Advancing coal liquefaction and gasific ation and the integrated utilization of 
resources such as coal-bed gas, coal sla ck and coal slime; encouraging clean energy 
generation, combined heat and power generation, zero-emission, and sectoral engagement in extensive research and applic ation of energy-saving technology; 
limiting or banning high energy-consuming industries and products; encouraging the 
use of public transportation, gas-fueled ca rs and cars with low fuel consumption and 
emissions. 
 5. Developing and harnessing renewables.  In February 2005, China enacted the Law 
on Renewables, marking a new stage of renewables development and utilization in 
China. Wind and solar power and marsh gas will be used to complement the 
continued use of hydro power. 
 6. Increasing public education and informa tion dissemination to encourage economical 
utilization, punish squandering, and create  a favorable public opinion and moral 
ambience. 
Question: Switzerland I
 
(ii) Electricity – (e) pricing of electricity 
Para. 76-78. Electricity pricing is in governmental  control. Please inform about the reasons why the 
2002 reform has not permitted to have  better correlations between electricity cost and electricity 
prices. Can you give more information on the implementation of the 2002 reform? 
Answer: In line with electricity pricing regulations, in a reas where the tariff is established through competition 
or, in other words, establishing the electricity  price through competition between power generation 
enterprises, it is a two-part tariff system, nam ely capacity charge for compensating fixed asset 
investment by the supplier and energy charge for compensating the costs of fuels.  Capacity charge is 
determined as a certain proportion of the average investment costs of power-generating enterprises.  
In areas where competition does not prevail, the tariff is constructed using a reasonable 
compensation for costs plus  a reasonable profit margin, taking in to account the payable tax.  Both 
systems factor in the costs of power generation.  WT/TPR/M/161/Add.3 
 Page 9 
 
 
Question: 
Switzerland I  
Para. 98. The report indicates that the MOFCOM initiated "Market Development Project Covering 
Thousand of Villages and Towns" in February 2005  through popularising ch ain-store operations in 
rural areas. What is the kind of measures foreseen  to achieve the objective? We would also like to 
know if the measures in question are based on market mechanisms criteria or if, on the contrary, they 
are rather founded on planning policies and principles? 
Answer: 
In order to promote domestic consumption, MO FCOM initiated the "Market Development Project 
Covering Thousands of Villages and Towns" in Febr uary 2005. It aims at gradually popularizing 
chain-store operation in rural areas; opening sta ndardized farmers’ shops covering 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 fund amental role. There are 1,150 retail and wholesale enterprises which 
have started pilot projects in 777 cities and counties nationwide. 71,000 standar dized farmers’ shops 
have been newly established or renovated the year. 
Question:  
Japan I  
There is no information on the imposition of performance requirements in China in the Report by the 
Secretariat. 
Q7. Please provide information for the kind of  performance requirements imposed on foreign 
companies in China. 
Answer: 
Performance requirements on foreign-invested en terprises such as foreign-exchange balancing and 
trade balancing requirements, local contents re quirements and export performance requirements 
which were deemed to be WTO inconsistent during China’s WTO accession negotiations were 
eliminated upon China’s accession with the revision of  the Law of the People’s Republic of China on 
Chinese-Foreign Equity Joint-Ventures,  Law of  the People’s Republic of China on Chinese-Foreign 
Contractual Joint-Ventures and Law of the Pe ople’s Republic of China on Foreign-Capital 
Enterprises as well as their respective implem enting rules and regulations. Other general 
requirements, if there are, may be found in the above-mentioned laws, regulations and rules. 
Question: 
Japan I  
The Environmental Management Registration System for the Import and Export of Toxic Chemicals, 
stipulated in the "Regulations for Environmental Management on the First Import of Chemicals and 
the Import and Export of Toxic Chemicals", which came into force in May 1994, levies ten thousand WT/TPR/M/161/Add.3 
Page 10  
 
U.S. dollars per contract as a registration fee on fo reign exporters whose expor ts listed chemicals to 
China.    
Q10. Please explain how this system and its enfo rcement are consistent with WTO agreements.  
Answer: 
The 10,000-USD standard is carried out on account of environmental protection cost, domestic 
examination cost and other labor related facto rs. The Chinese government is now considering 
revising the 1994 Regulations.  
Question:  
Japan I
 
Q19. Concerning the openness and transparency  of standardization works in China: 
 (2) How do China’s central government bodies intervene in the process of the 
development of sectoral or local standards th at will become mandatory so that central 
government bodies can fulfill the notification requirements under Article 2.9.2 and 
5.6.2 of the TBT Agreement? 
Answer: The Central Government of China pays high attenti on to implementing the transparency obligation. 
As a new Member of WTO and a developing country,  China has been consistently improving its 
systems and mechanisms to fulfill the transparency oblig ation, especially in making notifications to 
the WTO. Measures taken in this  respect include the following.  
 1. In September 2002, the General Offi ce of the State Council issued a notice 
concerning WTO notification and enquiry ob ligations, and designated the authorities 
responsible for WTO notification and enquiry.  
 2. To strengthen coordination among relevant authorities in the areas of TBT and SPS, 
a national inter-agency coordination mechanism on technical barriers to trade was established in 2003, involving 18 relevant age ncies. It has played an important role 
in facilitating the notificati on of SPS/TBT measures.  
 3. Notification guidelines on SPS and TBT measures were provided and training 
courses and seminars were held to introduce the WTO/SPS and TBT transparency 
obligations, as well as specific requirem ents and procedures for notification to 
relevant government agencies and departm ents. These activities have increased 
knowledge of the SPS/TBT agreements, ra ised the awareness and initiative of 
different agencies in making notifications.  
 4. The SPS/TBT National Notification Authority  as well as the Enquiry Point also urge 
relevant agencies to fulfill their obligations with respect to notification by reminding 
and advising them. The notification of SPS and TBT measures has been steadily 
rising.  WT/TPR/M/161/Add.3 
 Page 11 
 
 
Question:  
Japan I  
Q26. (1) Please indicate the reason why the "reduction of rare earth export quantities to promote the 
protection of domestic resources" of "the notif ication regarding export regulatory measures of 
commodity parts requiring the use high energy cons umption and highly pollutive resources", issued 
on December 9 is conformed with the GATT, incl uding concrete data on the domestic production and 
consumption volumes from 2003 to 2005 and the prospects for 2006 as well as on the recent change 
of presumed reserves of rare earth in China. 
(2) Please indicate the quantity of export of rare earths from 2003 to 2005 , including the 
announcement of planned quantity at the beginning of the year, and the final issued gross result.   
(3) Does the Government of the People’s Republic of China have any plans to increase the export 
quantity to a level that does not exert an adverse effect on world trade, in the situation where the 
issuing quantity becomes insufficient from the point of view of the importing country? 
Answer: 
Article 3 of the notification states that, "while  domestic production and c onsumption be reduced, 
export of these products should also be contro lled". Therefore, it does not  seem to the Chinese 
government that the case of the notification is not consistent with the GATT rules. Data on domestic 
production and consumption of rare earth is not ava ilable because it involves  too much information 
collection work.  
The announced export quantity of rare earth for 2003 to 2005 is respectively 40,000 tons, 46,000 tons 
and 50,000 tons.  
At present, there is no such plan to further expand th e export quantity of rare earth at a faster rate.  
Question:  Japan I
 
Most imitation agricultural chemicals are registered easily through the temporary registration system 
and are not only distributed broadly in China as a test sale but also exported to third-party countries.  The sale of agricultural chemicals in the temporary stage has also problems in  safety aspect, because 
the temporary registration system does not require some toxicity tests for some chemicals.  Japan 
hopes that such temporary registration system and a t est sale based on this system will be abolished.   
Q34. In this regard, please indicate the views of th e Government of the People’s Republic of China. 
Answer: 
China takes note of the comment. However, in view of the fact that there is no WTO inconsistency 
involved, the Chinese governm ent currently has no plan to change the system.  WT/TPR/M/161/Add.3 
Page 12  
 
Question:  
Japan I
 
Q39. (1) As for the regulation system on minimum capital requirements for new entrants of automotive 
manufactures, this regulation seems to be an obstacl e to new entries into automotive industry.  We 
would like to know if China has plans to relax this regulation. 
(2) According to the Report by the Secretariat, in paragraphs 122 and 129, imports of motor 
vehicles could enter only through the ports of Dalian, Tianjin, Shanghai, Huangpu, Manchuria, 
Shenzhen (Huanggang) and Xinjiang Alashankou.  In this regard, please explain the reason why 
China keeps such a restriction and also indicat e the prospects for the further liberalization. 
India II
 
Investment Management Policy of China • Newly-invested projects are required to meet the following conditions: 
(1) New motorcycle manufacturers are required to ha ve R&D capacities - total investment of the 
project should be no less than RMB 200 million. 
(2) For a newly-built auto manufacturing project, total investment should be no less than 
RMB 2 billion, of which self-owned capital should be no less than RMB 800 million; a 
product R&D institution should be establis hed with investment no less than 
RMB 500 million. New passenger vehicle or heavy-duty truck manufacturing projects should 
include corresponding engine production for the complete vehicles. 
(3) Production scale requirements for the newly-built  investment projects are: for heavy duty 
trucks, no less than 10,000 units per year; for passenger vehicles equipped with 4-cylinder 
engines, no less than 50,000 units per year; for passenger vehicles equipped with 6-cylinder 
engines, no less than 30,000 units per year. 
(4) Sino-foreign JVs producing complete vehicles, special purpose vehicles, farming vehicles or 
motorcycles should ensure the st akes held by the Chinese parties are no less than 50% of the 
JVs.  
(5) A foreign investor is allowed to establish no more than two JVs.  
These policies have the effect of restricting Indian  vehicle manufacturers entering into China through 
manufacturing route. Would the Chinese authoriti es indicate whether they would remove these 
restrictions? 
Answer: 
The minimum capital requirement under the current syst em is applicable to both domestic and foreign 
new entrants. The Chinese government does not plan to relax this requirement.  WT/TPR/M/161/Add.3 
 Page 13 
 
 
Currently the fact that automobile can only be im ported through the ports listed above is based on 
consideration of Customs supervision and monitori ng, facility availability and that the Chinese 
government has not in the past received any complaints  from enterprises, either domestic or foreign, 
about this issue. Therefore, there is no plan to change the current system. 
Question:  
Japan I  
Q40. 
(1) The "Automobile Industry Development Policy"  and the "Administrative Rules on Imports of 
Auto Parts with Features of Assembling Whole Vehicle" impose tariff rate for complete vehicles on auto parts, which are higher than those China conced ed for auto parts in its schedule of concessions.  
Please indicate the consistency of these regulations with Article II of GATT. 
(2) Paragraph 203 of the report of the Working Party on the Accession of China committed to 
comply fully with the TRIMs Agreement and elim inate local content requirements relating to 
importation. Despite this commitment, Articles 21 and 22 of the Measures on Importation of Parts for 
Entire Automobiles (Decree 125) make the applica tion of the lower duty for car parts dependent on 
whether imported car parts are assembled with  a significant proportion of domestic components. 
Failure to localize these components results in the application of a discriminatory tariff.  Some 
Japanese companies complain that under the Measures, too much time is needed for administering 
certificates for "assembled cars" and it may affect the manufacturing process.  These rules therefore 
appear to improperly condition tariff treatment on the basis of local content.  Please explain how these 
rules are consistent with the commitments made by  China in its Protocol of Accession and Working 
Party Report, Article III of GATT 1994 and the TRIMs Agreement. 
Answer: 
China imposes tariff on auto parts according to th e Import and Export Tariff of the People’s Republic 
of China of 2006, which China does not see in consistent with Article II of GATT 1994. 
Currently, China has no mandatory requirement t hat car manufacturers should purchase or use 
domestically-produced auto parts, which complies w ith Article III of GATT, China’s Protocol of 
Accession or Working Party Report.  
Question:  
Japan II
 
According to the Report by the People’s Republic of China, Opinions on encouraging, supporting and 
guiding the development of the non-public sectors of  the economy such as the individual and private 
sectors issued by the State Council, states explic itly that all market access barriers affecting non-
public sectors should be removed. 
Q1. In this respect, are there any specific lists fo r the existing barriers?  If so, please provide all of 
the lists. WT/TPR/M/161/Add.3 
Page 14  
 
Answer: 
No, there are no specific lists of existing barriers. 
Question: Japan II
 
The Report by the People’s Republic of China st ates that "support to underdeveloped regions 
increased." 
Q4. In this respect, please indicate specifically what support is provided. 
Answer: 
Illustrations of the support to the underdeveloped regions can be found in the subsidy notification 
China submitted to the WTO Committee on Subsid y and Countervailing Measures in April 2006. 
Question:  
Japan II  
We recognize that there are still many problems with  the enforcement of intellectual property rights.  
Q9. Concerning the improvement of the enforc ement of intellectual property rights, please 
indicate which measures specifically will be taken. 
Answer: 
China has provided huge amount of information wi th regard to enforcement of intellectual property 
rights on many occasions in the WTO including in the annual transitional review at the TRIPS Council. The Chinese Government also published wh ite papers on protection of intellectual property 
rights which sum up the efforts taken in this field . Further actions in this respect will be taken and 
details of such efforts can be found in recent policy documents including China’s Action Plan on 
Intellectual Property Protection 2006, as well as the Outline of Intellectual Property Rights 
Protection Actions (2006-2007), etc. Other informatio n in this respect is also available on the official 
website of the Chinese Government on protection of intellectual property rights http://doc.ipr.gov.cn . 
Question:  
Chile
 
Evolución reciente de la Política de Inversión Extranjera 1. En los párrafos 74 y 88 del informe de S ecretaria se establece que China proporciona un 
número de incentivos para los inversionistas extranje ros que es mejor que el trato nacional, como son 
menores impuestos a las utilidades  y "tax holidays" . ¿Están estos incentivos sujetos al desempeño 
económico, tales como: la exportación de un cierto monto, el uso de componentes nacionales y la 
contratación de nacionales?  WT/TPR/M/161/Add.3 
 Page 15 
 
 
Answer: 
Preferential policies for foreign-in vested enterprises have been included in the subsidy notification 
China submitted in April 2006 to the WTO Co mmittee on Subsidy and Countervailing Measures. It 
should be noted that performance requirements on foreign-invested ente rprises such as foreign-
exchange balancing and trade balancing requiremen ts, local content requirements and export 
performance requirements which were deemed to be WTO inconsistent during China’s WTO 
accession negotiations were eliminated upon China’s accession with the revision in 2000 and 2001 of 
the Law of the People’s Republic of China on Ch inese-Foreign Equity Joint-Ventures, Law of the 
People’s Republic of China on Chinese-Foreign Cont ractual Joint-Ventures and Law of the People’s 
Republic of China on Foreign-Capital Enterprises as  well as their respective implementing rules and 
regulations. Therefore preferential policies for fo reign-invested enterprises are not conditional upon 
economic performances of these enterprises. They ta ke into consideration of such factors as WTO 
consistency, overall economy development and general policy towards FDI etc. 
Question:  
Chile  
2. Se establece en el párrafo 82 del informe que  los inversionistas de las categorías "permitidas" 
que exportan todos sus productos dire ctamente gozan del mismo trato preferencial concedido a los  
"Proyectos Alentados". ¿Cuáles son estos beneficios adicionales? ¿Se pierden éstos beneficios si los 
requisitos no son cumplidos para un año determinado? 
Answer: 
Please refer to the subsidy notification Chin a submitted to WTO Committee on Subsidy and 
Countervailing Measures in April 2006 for details  of these preferential policies. If the foreign-
invested enterprises no longer meet th e criteria as provided in relev ant laws, regulations and rules, 
they will cease to enjoy the preferential policies. 
Question:  
Chile  
Procedimiento de Examen y Aprobación 1. De acuerdo al párrafo 84 del informe, ¿cua ndo los proyectos de inversión presentados para 
aprobación son rechazados, existe alguna manera de solicitar la reconsideración de la decisión?  
¿Pueden los proyectos ser presentados posteriormente, y si es así, cuáles son los requisitos para hacerlo?  
Answer: 
In case the application by a foreign investor for estab lishing a foreign invested enterprise in China is 
rejected, the investor has the right to apply for administrative review to the competent authority 
pursuant to the Law of the People’s Republic of China on Administrative Reconsideration and the 
Law of the People’s Republic of China on Administrative Licensing.  Based on the result of the review, the foreign investor may decide if and when to reapply. WT/TPR/M/161/Add.3 
Page 16  
 
Question:  
Chile
 
Incentivos a la IED 1. El párrafo 91 del informe establece que "Numerosas provincias proporcionan un servicio de 
ventanilla única a los inversores extranjeros, y cada provincia ha establecido un centro de promoción 
de inversiones".  ¿Incluye el trato brindado a las IEDs obtener los permisos necesarios, tanto a nivel local como nacional?  ¿Se pueden obtener benefi cios tributarios por medio de estas agencias? 
Answer: 
In order to create a favorable investment climat e, all levels of the Chin ese government is keenly 
working on simplifying approval procedures for forei gn investors.  Many effective and efficient 
practices have been introduced, for example, one-stop, single-window and over-the-counter service, 
to facilitate the approval process.  However, th is does not mean foreign investors will necessarily 
obtain the approval or tax preference through the above-mentioned service.  Their investment still 
needs to comply with China’s legal and regulat ory requirements before obtaining the approval and 
enjoying the tax incentives. 
Question:  
Australia
 
15. Pursuant to the submission of notificati ons on support for the agricultural sector and 
paragraph 238 of the Working Party Report on China’s Accession to the WTO (WT/MIN(01)/3 of 
10 November 2001), we look forward to an early opportunity for China to clarify issues regarding 
methodology in relation to the classifica tion of its domestic support policies. 
a) When does China consider that such a clarification exercise could commence? 
Answer: 
After submission of the domestic  support notification China received written questions from Members 
including Australia and responses were already provided. 
Question:  
Korea  
Transparency (WT/TPR/S/161, p.37, para.27)  
1. Although the enforcement and amendment of regulations are informed through local media 
and websites, they are done so sporadically. Th ese announcements do not cover the whole content and 
are often informed after the enforcement has alrea dy taken place. Therefore, it is very difficult to 
obtain sufficient information on regulations in a time ly manner. In addition, all legal publications are 
written in Chinese with no English version available.  Therefore, foreigners who are not familiar with 
the local language has very limited  access to legal information.   WT/TPR/M/161/Add.3 
 Page 17 
 
 
y Does the Chinese government have any future plans to improve the practices mentioned 
above?  
2. There are occasions where an investment pl an, which is already approved by the local 
approving office, is refused by the registration o ffice and being required to resubmit such plan with 
modifications.  
y Does the Chinese government have any future  plans to improve the consistency and 
cooperation among administrations?  
Answer: 
The Legislation Law, the Regulations on Proc edures for the Formulation of Administrative 
Regulations and the Regulations on Procedures for th e Formulation of Rules which contain detailed 
promulgation procedures for different types of legisl ation in China all require that standard texts of 
the laws, regulations and rules be promulgated in  the official gazettes of the Standing Committee of 
the National People’s Congress, the State Council and the ministries and commissions which are 
subordinate to it.  
In the meantime, the Chinese government has designated the China Foreign Trade and Economic 
Cooperation Gazette under the Minist ry of Commerce as the official journal to collect and publish all 
trade related laws, regulations and rules, as comm itted in the Accession Protocol. The Gazette is now 
public available on the official website of the Ministry of Commerce. 
The Chinese government also attach es great importance to the transla tion of laws, regulations and 
measures into foreign languages. At present, all th e laws enacted by the National People’s Congress 
and its Standing Committee and all the regulations enacted by the State Council since 1979 are translated into English. 
On the question concerning investment plan, we are not in a position to comment because it is not 
clear to us what the specific case was. However, the question itself does not seem to be a problem of 
coordination between government agencies bec ause investment access approval procedures and 
business registration procedures are indeed two different processes and the documentation 
requirements are different. 
That being said, the Chinese Government is now also  furthering the reform of its administration, with 
emphasis on improving government transparency, streamlining administrative licensing system, 
strengthening the government functio ns and responsibilities in social and public affairs, etc so as to 
form an administrative system featuring standardized  behaviors, coordinated operation, fairness and 
transparency, honesty and high efficiency. Probl ems of too many levels, overlapping functions, 
overstaffing, divorce between powers and responsib ilities and duplicate law enforcement etc will 
continue to be dealt with in the further deep ening reform. Principles to be followed in the 
administrative reform are simplification, uniformity and efficiency, and meeting the requirements of 
coordination in decision-maki ng, execution and supervision. WT/TPR/M/161/Add.3 
Page 18  
 
Question:  
Korea
 
Customs procedure  (WT/TPR/S/161, p.62-63, para.12, para 15)  4. In case of importing medicines, cosmetics and medical instruments, the Chinese Customs 
request excessive samplings for examination purpo ses, thereby detaining the customs procedure.  
y Since China's accession to WTO in 2001, what kind of progress in customs procedure has the 
Chinese Customs made, especially in the field of  medicines, cosmetics and medical instruments 
importation?  
Answer: 
China revised the Rules on Import Medicines Sampling in June 2006. 
Question:  
India
 
Q8. Pharmaceutical imports from India and distribution in China:  
The process of drugs and pharmaceuticals registration in  China is long, and expensive. Both Indian 
exports of drugs and pharmaceuti cals and manufacturing operations of Indian pharma companies in 
China suffer on account of this. Even when the pro duct has been registered, there are administrative 
barriers to the domestic market. Procedures for provi ncial entry and hospital entry are different in 
each province so that for each product exported the company has to separately bid for each province 
separately. Further, the time frame for periodic bi ddings is different in each province. If a company 
has been successfully bidding in any province for, say, the last four years and then is not able to bid 
successfully in the fifth year, it has to start fresh  entry procedures for the province and the hospital 
from the sixth year. It is also understood that Ch ina still requires foreign pharmaceutical companies to 
hire Chinese importers to bring their finished pr oducts into the country. These measures act as NTB’s 
against Indian exports. Would the Chinese author ities like to take necessary remedial measures? 
Answer: 
Drug and pharmaceutical registration is an essentia l method for the government to protect human 
health. The registration process for imported medicin es is clear as stipulated in the Measures on 
Administration of Imported Medicines (State F ood and Drug Administration (SDA) Decree No.4 of 
2003). Moreover, the registration process or the hosp ital entry process for domestic medicines is, de 
facto, the same. Therefore, China does not regard this  as an NTB or a national treatment issue, but 
necessary and effective human health protection measure.   WT/TPR/M/161/Add.3 
 Page 19 
 
 
Question:  
India  
Steel Imports: Q.19 The present customs tariff of 11% imposed by China on the imports of cold rolled products is 
high and restrictive considering the customs tariff in other countries.  Further, in the past few years 
while China has permitted limited quantities of steel products under the quota system on duty free 
basis, a high rate has been maintained for non-quota imports. This is discriminatory and not 
compatible with WTO provisions. Would Chinese au thorities consider withdrawing the quota system 
and bring down the tariff to global levels? 
Answer: 
On 1 January 2005, China abolished its import qu ota administration and thus no steel product is 
subject to quota system any longer. 
Question:  
India
 
Steel Exports: Q.22 The Indian steel exporters are facing difficulties in having their Letter of Credit (LOC) 
honoured by China particularly in situations of dec lining steel prices. Would china like to clarify what 
steps it will take to remove the difficulties faced by Indian steel exporters? 
Answer: 
Commercial banks in China run on a commercial basis  and are responsible for their own profits and 
losses and operational activities. The decision of issu ing or not issuing the letter of credit to a 
company is contingent upon judi cious judgment by the bank based on the company’s track record, 
business performance and other commercial factors.  China has received no complaints from foreign 
companies in this regard and does not consider  there being any barrier  to qualified foreign 
companies in obtaining the letter of credit.  
Question:  
India II
 
Automotive Import Management Policy of China 
The state supports automakers to strengthen their lo calization capabilities of auto products to promote 
technological advancement of the parts manufacturers and the development of the auto manufacturing.  
The automakers, who use imported parts with complete vehicle characteristics are required to report 
to the MOFCOM, Customs and NDRC strictly by the facts and all imported parts for related models 
are required to be declared. WT/TPR/M/161/Add.3 
Page 20  
 
The identification of auto assembly (system) charac teristics includes the imports of KD parts of the 
whole assembly, or in the form of divided key parts of the assembly or system. Imported key parts, if 
reached or exceeded the regulated am ount, will be identified as assembly. 
• Identification of complete vehicl e characteristics consists of:  
¾ engine assembly  
¾ body (including cab) assembly  
¾ transmission assembly  
¾ drive axle assembly  
¾ non-drive axle assembly  
¾ frame assembly  
¾ steering system and braking system 
• The followings are identified as to constitu te complete vehicle characteristics: 
(1) Import of both body (including cab) assembly and engine assembly 
(2) Import of either the engine assembly or body (including cab) assembly, plus no less 
than three of the rest assemblies (or systems); 
(3) Import of no less than 5 of the rest assemblies (or systems), besides engine assembly 
and body (including cab) assembly. 
The state designates the four coastal ports, two land ports as well as the Xinjiang Alashankou port (for 
vehicles imported from the CIS countries and only to be used within the Xinjiang Uygur Autonomous 
Region), as import ports for imported complete vehicles.  
Starting from 2005, all bonded areas will not be a llowed to provide bonded warehousing services for 
vehicles to enter domestic market. 
Would the Chinese authorities clarify the above issues? 
Answer: The current regulation aims at determining if the standard of whole auto characteristics is reached, 
not at determining whether the par ts are to be imported or not.  
Currently the fact that automobile can only be impo rted through the ports listed above is due to 
Customs supervision and monitoring causes, and also  facility availability. For years the Chinese 
government has not received any complaints from  enterprises both domestic and foreign ones about 
this issue. There is no plan to change the present system.  WT/TPR/M/161/Add.3 
 Page 21 
 
 
Question:  
Canada  
Part I. Economic Environment, (1) Overview, paragraph 4: 1. Will increased opportunities for growth, productivi ty gains, and employment in rural areas be 
explored through increased foreign direct investment in the mining sector? 
Answer: According to the current Catalogu e for the Guidance of Foreign In vestment Industries, the Chinese 
government encourages foreign investment in o il exploration and development and the development 
and application of new technologies for improvi ng oil recovery, and the exploration and development 
of coal and associated minerals and of general mineral resources such as iron, manganese, copper, 
alumina, sulfur, phosphor and potassium. The explo ration and development of some of the special 
minerals and rare minerals is listed in the ca tegories where foreign investment is either limited or 
prohibited. The Chinese government c ontinues to welcome foreign investme nt into the field of mineral 
resources development to expand scale, improve productiv ity so as to make further contributions to 
the rapid economic development of China, provided t hat such foreign investment is in line with the 
Catalogue for the Guidance of Foreign Investment Industries. 
Question:  
Canada
 
Part I. Economic Environment, (2) Main De velopments: Policy and Economic Performance, 
paragraph 6: 
2. Foreign Direct Investment has enabled str ong gains in productivity, output, and employment 
in the manufacturing sector.  How will this success be duplicated in the service sector? 
Answer: 
In recent years, China’s fast-growing trade in services has brought in an increasing amount of 
foreign investment.  The Chinese government will c ontinue to take gradual steps to liberalize the 
service sector, improve the investment environmen t and open greater access to foreign investors 
based on China’s economic reality. 
Question:  
Canada  
Part II. Trade Policy Regime: Framework and Obj ectives, (2) Institutional and Legal Framework, 
(ii) Legal structure and the legislative process, paragraph 21: 
4. What is the current legislative plan  related to the commercial environment? WT/TPR/M/161/Add.3 
Page 22  
 
Answer: 
Legislation process related to commercial envi ronment is accelerating in China. Laws and 
administrative regulations in this respect which have been included in legislative plan of formulation 
or revision include Anti-Monopoly Law, Law on Co mmercial Registration, Law against Unfair 
Competition, Regulations on Supervision over Secur ities Companies, Regulations on Risk Disposal of 
Securities Companies, Regulations on Enterprises B onds etc. English translations of the names of 
these laws and regulations are for purpose of reference only. 
Question:  
Canada
 
Part II.  Trade Policy Regime: Framework and Obj ectives, (4) Trade Policy Objectives, paragraph 37: 
9. How does the Chinese government provide guidance and coordination for enterprises 
investing abroad?  Does the approach differ between  state-owned enterprises (SOEs) and non-public 
enterprises? 
Answer: 
The Chinese government encourages co mpetent companies of different ow nership structures to invest 
abroad.  It places a priority on servicing and guiding outgoing Chinese companies and all companies 
making overseas investment are treated equally. 
With a view to boosting the service for outbound investment and intensify guidance and information 
service to outgoing companies, the Chinese governm ent published the country-specific Trade and 
Investment Situation Report and regularly releases pr oject information in host countries and regions.  
Besides being given to local commercial authorities, such information was also made available to 
companies on MOFCOM’s official website.  On top of that, MOFCOM and local commercial 
authorities have organized orientation courses for tho se involved in cross-border business activities. 
Chinese overseas commercial couns ellor's offices and sections as  well as domestic industry 
associations also share the responsibility for providing information, counsel and services to 
companies. 
Question:  Canada
 
Part II. Trade Policy Regime:  Framework and Objectives, (6) Foreign Investment Regime, 
(ii) Legislative framework and procedures, paragraph 78: 
10. What criteria are applied to classify sectors as "encouraged, permitted, restricted, and 
prohibited"?   WT/TPR/M/161/Add.3 
 Page 23 
 
 
Bolivia  
Régimen de Política Comercial: Marco y Objetivos 
Capítulo II, inciso 4), iii) Párrafos 78 y 82  
¿Cuál es el criterio legal que permite pasar un sect or de inversión permitida a inversión "alentada" o 
"restringida" y viceversa? ¿Cuáles son los criterios aplicables para categorizar a las inversiones alentadas, restringidas, permitidas y prohibidas; ¿Cómo afectará esta categorización a las 
negociaciones con los países miembros de la OMC en el marco de las Medidas sobre Inversión 
relacionadas con el Comercio? 
¿Cuáles son las bases fundamentales para que China haya aplicado o aplique una política de 
incentivos fiscales para alentar las inversiones extran jeras principalmente?  ¿Por qué se incrementó el 
umbral de proyectos de categoría alentadas? 
Costa Rica
 
Régimen de Inversión Extranjera y Servicios 
49. ¿Qué elementos distinguen cada una de las clasificaciones de las ramas de producción en 
"alentadas", "restringidas", "prohibidas" y "permitidas? 
Turkey  
II. Trade Policy Regime:  Framework and Objectives/  (6) Foreign Investment Regime (ii) Legislative 
framework and procedures 
It is recognized that, according to the recently  amended Catalogue for the Guidance of Foreign 
Investment Industries, which entered into force on 1 January 2005, four different types of industries 
are listed to take into account for decisions on foreign investment. 
We understand from the Secretariat report that the recent amendment extends the list of industries in 
the "encouraged" category which includes industries w ith improved technology and are less polluting.   
• Could Chinese delegation clarify the dis tinction between the "encouraged" and  
  "permitted" categories?  
• Under which conditions an "encouraged" i ndustry might be permitted for foreign  
 investment? 
• Is there regular review for the Guidance of Foreign Investment Industries in 
compliance with the needs of industry? WT/TPR/M/161/Add.3 
Page 24  
 
Chile
 
Marco y Procedimiento Legislativos  
1. De acuerdo a lo establecido en el párra fo 79 del informe, ¿existe un procedimiento 
establecido para modificar la Guía para las Industr ias con Inversión Extranjera?  ¿Existe una fecha 
fijada para la próxima actualización?  ¿Pue den los inversionistas y/o otros gobiernos hacer 
comentarios a las modificaciones realizad as, antes que éstas entren en efecto?  
Answer: 
Definition of "encouraged, permitted, restricted, and prohibited" foreign investment is found in 
Article 4-7 of the Provisions on Guiding Di rection of Foreign Investment promulgated by 
Decree No. 346 of the State Council on February 11, 2002, as follows: 
Article 4  Foreign invested projects shall be classified into four categories: projects to be 
encouraged, permitted, res tricted or prohibited. 
Foreign invested projects to be encouraged, restricted or prohibited are listed in the 
Catalogue for the Guidance of Industries fo r Foreign Investment. Those other than foreign 
invested projects to be encouraged, restricted or  prohibited shall be foreign invested projects 
to be permitted, which are not listed in the Catalogue for the Guidance of Industries for 
Foreign Investment. 
Article 5  Foreign invested projects under one of  the following circumstances shall be listed 
as encouraged ones: 
(1) projects applying new agricultural t echnology, for comprehensive agricultural 
development, and for development of energy,  communications or industry of key raw 
materials; 
(2) projects employing new high technolog y and advanced practical technology which 
can improve performance of products, increase tech-economic efficiency of 
enterprises, or manufacture new equipmen t or new materials while the domestic 
productivity is deficient; 
(3) projects that can meet the demands of  market, raise the grade of products, open up 
new markets or increase the competitive strengt h of products in international market; 
(4) projects adopting new technology or e quipment that can conserve energy and raw 
materials, utilize resources and renewable resources in a comprehensive way or 
prevent environmental pollution; 
(5) projects that can make full use of the superiority in human and natural resources in 
the Mid-west regions and that are in conf ormity with the industrial policies of the 
State ; or 
(6) other circumstances provided for in  laws and administrative regulations.  WT/TPR/M/161/Add.3 
 Page 25 
 
 
Article 6  Foreign invested projects under one of  the following circumstances shall be listed 
as restricted ones: 
(1) projects with backward teleology; (2) projects without any benefit to the c onservation of resources and the improvement of 
eco-environment; 
(3) projects involving the exploration and exp loitation of any special mineral resource 
the exploitation of which shall, as provided  for by the State, be carried out in a 
protective way; 
(4) projects involving the industry that is bei ng opened up by the State step by step; or 
(5) other circumstances provided for in  laws and administrative regulations. 
Article 7  Foreign invested projects under any of  the following circumstances shall be listed 
as prohibited ones: 
(1) projects endangering State security or damaging social and public interests; 
(2) projects causing pollution or damage to environment, jeopardizing natural resources 
or impairing health of human body; 
(3) projects unfavorable to the protection and development of land resources as a result 
of occupation of large amount of arable lands; 
(4) projects endangering the safety of military installation or the wo rk efficacy thereof; 
(5) projects involving the making of product s by utilizing the unique craftsmanship or 
technology of our country; or 
(6) other circumstances provided for in  laws and administrative regulations. 
The Catalogue for the Guidance of Industries for Foreign Investment is worked out by the National 
Development and Reform Commission, the Ministry of Commerce jointly with other relevant 
departments of the State Council, and be publis hed after being approved by the State Council. 
Revision of the Catalogue is now being studied.  
Categorization of foreign investment into "encour aged, permitted, restricted, and prohibited" is 
basically an investment access issues which does not  have direct linkage with the trade-related 
investment measures as defined in the WTO.  WT/TPR/M/161/Add.3 
Page 26  
 
Question:  
Canada
 
Part II. Trade Policy Regime:  Framework and Objectives, (6) Foreign Investment Regime, 
(iii) Examination and approval procedure, paragraph 83: 
11. What criteria are applied to determine an "i mportant" project and what is the verification 
procedure? 
Answer: 
An "important" project mainly refers to one that in volves a large amount of investment or has a major 
social, economic, security and public welfare impact. It  includes those projects listed in the Catalogue 
of Investment Projects subject to Government A pproval (State Council Circular [2004] No.20). 
Question:  
Canada  
Part II. Trade Policy Regime:  Framework and Objectives, (6) Foreign Investment Regime, 
(iii) Examination and approval procedure, paragraph 84: 
12. What is the decision process applied in the ex amination and verification of foreign investment 
projects?  
13. What are the grounds for not accepting an app lication that is being submitted to the National 
Development and Reform Commission (NDRC)? 
14. What is the difference between the Minist ry of Commerce (MOFCOM) foreign investment 
enterprise (FIE) approval and the NDRC process? 
Answer: For the procedure of reviewing and approving forei gn invested projects, please go to NDRC website 
(www.ndrc.gov.cn) and Invest in China (www.fdi.gov .cn) website. We may give further reply to 
specific questions. 
According to the Provisional Administrative Measures on the Examination and Approval of Foreign 
Invested Projects (NDRC Decree No.22), the proj ect application submitted to the NDRC should 
include name of the project, profiles of the investors,  scale of the project, object and products of the 
project, land, water and energy needs, assessment  of environmental impacts and total project 
investment, etc.  Other document s such as the business licenses of both the Chinese and foreign 
investors, their financial statements, investment agreement, and a financing agreement issued by a 
bank should accompany the application.  If the submission is incomplete with essential documents 
missing, the project application will not be accepted. 
NDRC and MOFCOM are responsible for different a reas of foreign invested projects.  NDRC is 
responsible for approving foreign invested project s from investment project perspective unless 
provided for otherwise (trade in  services or others).  MOFCOM is responsible for approving the  WT/TPR/M/161/Add.3 
 Page 27 
 
 
establishment and change-circumstances of foreign invested enterprises exceeding certain thresholds 
or are in the restricted category.  These two agencies have their own respective set of approval 
procedures.  
Question: 
Canada  
Part II. Trade Policy Regime:  Framework and Objectives, (6) Foreign Investment Regime, 
(iii) Examination and approval procedure, paragraph 86: 
15. How does the NDRC protect commercially c onfidential information provided in project 
descriptions?  
Answer: 
NDRC has a standardized document processing proce dure for protecting commercially confidential 
information. 
Question:  
Canada  
Part III.  Trade Policies and Practices by Measu re, (2) Measures Directly Affecting Imports, 
(ii) Tariffs, (e) Border trade and other preferences, paragraph 35: 
19. How does China control the border trade in w ood products to ensure that the 15-20 kilometer 
range is respected? What is the success of the enforcement of such measures? 
Answer: 
The Circular of the State Council on Issues Conc erning Border Trade issued in 1996 states that 
"bordered citizens can get involved in border trade in authorized or government-designated 
marketplace which is established within 20 kilomet ers to the border". Therefore, it should be noted 
that it is the marketplace but not the people that  is subject to this "20 kilometers" rule. 
Question:  Canada
 
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports, (vii) State 
trading, paragraph 64: 
25. What criteria are applied by state trading ente rprises to determine the grade of goods that are 
required?   
Answer:  There are no special criteria applied by state trading enterprises to determine the grade of goods. The 
criteria utilized by them for the particular produc ts falling in their business scope include commonly-WT/TPR/M/161/Add.3 
Page 28  
 
accepted international and national standards and ot hers, which are well recognized or adopted in 
the related industry or sector. 
Question:  Canada
 
Part IV. Trade Policies by Selected Sectors, (2) Agriculture, (iii) Policy instruments, paragraph 28: 
50. Please explain the prohibition of products referred to in foot note 44 (HSO 2071429, 
HSO410.0010, HSO507.9020 and HS1211.2010).  Why have these four products been singled out? 
Answer: 
It should be noted that these four products are subject to import prohibition only under the 
circumstance of processing trade while not normal trade. Processing trade, as a preferential measure 
of treating goods as bonded, is designed to promot e the facilitation of trade.  The fact that certain 
goods are prohibited from importation in process ing trade does not mean that they are also 
prohibited in normal trade. As it is impossible to  fulfill effective customs monitoring and supervision 
when processing the four products listed above, China does not apply the preferential measure under 
the processing trade to these four products. 
Question:  
Canada  
Part IV. Trade Policies by Selected Sectors, (4) Manufacturing, (ii) Iron and steel, (b) Regulatory 
framework and restructuring, paragraphs 93--95: 
54. Under paragraphs 46 and 172 of the Working Party Report acco mpanying China’s Protocol of 
Accession (WT/ACC/CHN/49), China agreed that the government would not influence, directly or 
indirectly, commercial decisions on the part of state-owned or state-invested enterprises, and 
acknowledged that state-owned enterprises, including banks, should be run on a commercial basis.  In 
light of those commitments: 
c. Which central, provincial, and local agen cies will be responsible for implementation 
of the Steel Policy?  How will conflicts between central, provincial, and/or local 
governments under the Steel Policy be resolved?  
Answer: 
The Steel Industry Development Policy outlined opi nions of the government towards development of 
the sector. It is not a compulsory legislation. There is no government’s interference in commercial 
decisions of enterprises, including steel sector, and no specific government agencies in the provincial 
level has been designated to "implement" the steel policy.  
Under the current legislative framework, the loca l governments can not issue regulations and rules 
conflicting with those of the central government . Therefore, under this Policy it is not to have 
"conflict" between the central and local government.  WT/TPR/M/161/Add.3 
 Page 29 
 
 
Question:  
Canada  
Part IV. Trade Policies by Selected Sectors, (4) Manufacturing, (ii) Iron and steel, (b) Regulatory 
framework and restructuring, paragraph 93: 
55. It is stated that the Steel Policy will not approve new project "in principle". Could China 
further comment on this statement and identify the means by which approvals will be withheld. 
Answer: 
Article 11 of the Development Policy for Steel In dustry further explains un der what circumstance 
steel companies might be established.  
Question: 
Canada  
Part IV. Trade Policies by Selected Sectors, (4) Manufacturing, (ii) Iron and steel, (b) Regulatory 
framework and restructuring, paragraph 94: 
57. Could China explain the justification for th e differences in conditions for domestic as opposed 
to foreign investment in the steel industry and the means by which such criteria will be implemented? 
Answer: 
Since steel industry is a highly resource-consuming sector and after several decades of development, 
the Chinese domestic steel sector is highly compe titive, the Development Policy for Steel Industry 
suggests that some standards are to be met, bot h for domestic and foreign enterprises, to ensure 
efficiency of resource usage and investment.  
Question:  Canada
 
Part IV. Trade Policies by Selected Sectors, (4) Manufacturing, (ii) Iron and steel, (b) Regulatory 
framework and restructuring, paragraph 96: 
59. Could China explain the rationale behind its regulation of imports of iron ore and explain the 
rationale for the difference in treatment between "enterprises satisfying certain requirements" and 
small-scale producers that are, by this measu re, obliged to purchase domestic iron ore? 
Answer: 
There is a misunderstanding in the Secretariat Report. The Chinese government implements 
automatic import licensing on iron ore import, whic h aims at monitoring the import quantity and data 
collecting, not restricting import.  
Under the current steel import system, the Chin ese government does not grant any differential 
treatment to enterprises. WT/TPR/M/161/Add.3 
Page 30  
 
Question:  
Canada
 
Part IV. Trade Policies by Selected Sector s, (4) Manufacturing, (iv) Automotive sector, 
paragraph 129: 
60. Please explain the process by which tariffs on auto parts are applied at the border and how 
any additional charges (or reassessments) are applie d based, for example, on a finding that the final 
assembled motor vehicle of which they form  part is deemed to be an import. 
61. Could China explain the rationale behind its "Administrative Rules on Imports of Auto Parts 
with Features of Assembling Whole Vehicle" and how the choice of thresholds for differentiating 
between imported and domestic vehicles was reached? 
62. Please explain how the requirement that auto motive assemblers complete a self-verification 
procedure under the "Administrative Rules on Impor ts of Auto Parts with Features of Assembling 
Whole Vehicle", in effect imposing an additional administrative burden on assemblers that use 
any imported parts, is not a violation of Artic le III.4's prohibition on introducing regulations 
that provide less favourable treatment to imported products? 
63. Could China explain how a requirement that  the total import of vehicle components (by 
cost) not exceed 60% in order to qualif y for reduced tariff treatment on the 
imported components differs from a local content requirement? 
64. Please provide an explanation of the requi rements for differentiating between components 
which are categorized by Chinese auditors as "aut omotive unit assemblies" and those which are not, 
with reference to the term "etc" in Article four of  the "Administrative Rules on Imports of Auto Parts 
with Features of Assembling Whole Vehicle". 
65. Could China provide definitions of CKD and SKD kits as used in the "Administrative Rules 
on Imports of Auto Parts with Features of Assembling Whole Vehicle"?  
66. Could China explain how the inclusi on of Complete Knock Down (CKD) and 
Semi Knock Down (SKD) kits as being subject to distinct tariff treatment under the "Administrative 
Rules on Imports of Auto Parts with Features of Assembling Whole Vehicle" does not create a separate tariff line with higher tariffs than tho se committed in paragraph 93 of the Working Party 
document to China's WTO accession? 
67. Could China clarify the difference, if any, in the treatment an imported auto part may receive, 
if it is inserted into an assembly meeting th e definition of an import under Paragraph 22 of 
the "Administrative Rules on Imports of Auto  Parts with Features of Assembling Whole 
Vehicle", when such assembly is used in a new ve hicle deemed an import versus one considered a 
domestic vehicle? 
68. Please clarify how the possibility that two id entical imported auto parts which, under the 
"Administrative Rules on Imports of Auto Parts w ith Features of Assembling Whole Vehicle" could 
receive different tariff classification according to the end use of the part, does not violate 
Chinese obligations under GATT article II?  WT/TPR/M/161/Add.3 
 Page 31 
 
 
69. Could China clarify how a set of re gulations which imposes varying charges 
on imported items depending on the amount of local content in a finished product does not create an 
incentive to include domestic content contrary to GATT article III?  
Answer: 
The current regulation aims at determining if the standard of whole auto characteristics is reached, 
not at determining whether the par ts are to be imported or not. 
The regulation does not aim at differentiating be tween imported vehicles and domestic vehicles. 
Products by any of the car manufacturers in China should go through the self- verification procedures, 
no matter whether the auto parts are imported or not. Therefore, China does not see any "additional burden". 
The regulation aims at determining whether the auto parts carry the characteristics of a whole 
vehicle, not setting up local content requirement. 
China does not see much difference be tween the two, as the reference of the "assembly (system)" in 
these Rules shall include the vehicle bodies (incl uding cabins), the engine assemblies, the 
transmission assemblies, the driving axles, the dri ven axles, the frames, the steering systems, and the 
braking systems. 
China interprets CKD and SKD in same way as foreign counterparts commonly do. 
Article II of the Administrative Rules on Imports of Auto Parts with Features of Assembling Whole 
Vehicle stipulates that the Rules should not apply to CKD and SKD. 
Article 22 aims at determining whether the auto part carries the characteristics of an assembly, not at 
determining whether the assembly is imported or not. 
China does not see inconsistency between the articles of the Administrative Rules and GATT 
Article II. 
China does not deem it a local content requirement. The reference of the "assembly (s ystem)" in these Rules shall include the vehicle bodies (including 
cabins), the engine assemblies, the transmission assem blies, the driving axles, the driven axles, the 
frames, the steering systems, and the braking systems. 
Question:  
Canada II
 
Part IV. Trade Policies by Selected Sectors, (2) Agriculture, (iii) Policy instruments, paragraph 29: 
14. Could China confirm whether it continues to maintain state trading requirements for exports 
of grains (i.e. maize, rice and soybeans)? WT/TPR/M/161/Add.3 
Page 32  
 
Answer:  
Agricultural products currently subject to export state trading are rice and maize. Although soybean 
is now in fact no longer subject to export state tr ading, China wishes to maintain the right of state 
trading on it as reflected in the Annex 2b of the Accession Protocol. 
Question:  
Canada II
 
Part I. Macroeconomic Environment, Difficu lties and Challenges Confronting Development, 
paragraph 11: 
17. What definition does China use to assess "food security"?  Does an overall increase in 
agricultural productivity equate to an increase in food security? 
Answer: 
In general, the threshold in China to ensure food security is to guarantee at least the 95% grain self-
sufficiency rate and that net grain import does not  exceed 5% in total domestic consumption.   
Question:  
Canada II  
Part II. Trade Policy Development, Promoting Economic Cooperation with  Developing Members, 
paragraph 91: 
19. What are the forms of encouragement the gove rnment is providing for Chinese enterprises to 
invest and engage in economic a nd trade cooperation abroad? Do these measures vary by country and 
sector? 
Answer: The Chinese government encourages competent enterprises of all ownership structures to invest 
abroad.  The encouragement comes mainly in th e areas of promotion, service, assurances and 
guidance. 
With respect to promotion, the Chinese government is keenly engage d in facilitating the process of 
outbound investment by shortening and simplifying the application procedure.  With respect to 
service, the Chinese government provides orientation tr aining on policies and regulations to those 
engaged in overseas investment activities and prov ide updated information and respond to enquiries 
about overseas investment climate.  With respect to  assurances, the Chinese government is actively 
reaching investment protection agreements and agreem ents to avoid dual taxation with foreign 
governments in order to create a favorable ext ernal environment for outbound investors.  With 
respect to guidance, the Chinese government has fo rmulated and published country-specific Trade 
and Investment Situation Report to gu ide the investment by enterprises. 
These policies and measures are applied uniformly to  all countries and regions, and also to all 
sectors.  WT/TPR/M/161/Add.3 
 Page 33 
 
 
Question:  
Mexico II  
7. RESPECTO A LOS TIEMPOS PARA REALIZAR LA IMPORTACIONES 
AGRADECEREMOS SE NOS INFORME POR QUE SE PIDE TAN ANTELACION EN LA 
INFORMACION COMO LOS COBROS EXCESIVOS POR ERRORES. 
Answer: 
China has difficulty understanding what the question is. Please be specific on which part of the 
Secretariat Report or government report the question is referring to.  
Question:  Mexico II
 
11. ¿QUE PASA SI UN PRODUCTO MONITOREADO EXCEDE LOS NIVELES DE 
IMPORTACION DE AÑOS ANTERIORES? 
Answer: 
Data or statistics collected under the automatic impor t licensing regime is usually used as a reference 
for government policymaking on trade.  No action wi ll necessarily be taken when the import of some 
monitored product exceeds the average level of import in previous years.  
Question:  
Turkey  
II. Trade Policy Regime:  Framework and Object ives/ (6) Foreign Investment Regime (i) Recent 
developments in FDI policy 
As mentioned in the Secretariat Report China is th e largest developing country recipient of Foreign 
Direct Investment. We understand from the report th at the central and some provincial governments 
also encourage firms to invest abroad.  
• Is there any differentiation between the central and provincial governments in 
implementing investment policies both for inflow and outflow of FDI? 
Answer:  
There is no difference between the central and provin cial governments when implementing policies in 
this respect. WT/TPR/M/161/Add.3 
Page 34  
 
Question:  
Turkey
 
III. Trade Policies and Practices by Measure (1) Introduction We note from the Secretariat report that although thei r reform dates back to late 1970’s there have 
been quite a large number of st ate owned enterprises in China. 
• Are there any further challenges to complete  closure of state-owned enterprises other 
than compensation and re-allocation of em ployees and alternative arrangements for 
the social functions including health and education? 
• Could Chinese authorities explain on which sectors are those state owned enterprises 
mostly widely-spread? 
• What is the ratio of subsidized state owned enterprises in overall? 
• When does China plan to end subsidize state-owned enterprises? 
Answer:  
Challenges to the SOE reform are not limited only to compensation and re-allocation of employees 
and alternative arrangements for the social functions  including health and education. The reform is a 
process of redefinition and restructuring of state a ssets with completely new policy and regulatory 
framework being established and improved in lin e with the establishment of the market economy 
system in China. 
State-owned enterprises are mainly in military-relat ed industries, oil and petrol-chemical industry, 
power sector, coal industry, metallurgical indu stries, telecommunications and banking sector. 
Subsidies provided to state-owned enterprises running at a loss were phased out at the time of 
China’s accession to the WTO. Subsidies in existence targeting state-owned enterprises are given out 
for the process of being shut down and ban kruptcy for purposes including compensation and re-
allocation of employees and arrangements for such social functions as health care. Statistics 
concerning ratio are unavailable due to data co verage problems. In the coming years from 2005 to 
2008, a total of another 2116 state-owned ent erprises nation-wide will go bankruptcy with 
arrangement of this kind of one-time subsidy which is  not related to trade. After that, there will be no 
subsidy programs specially designed for state-owne d enterprises. Like other Members, China will 
ensure consistency of its subsidy programs with the WTO SCM Agreement in their implementation. 
Question:  Turkey
 
IV.  Trade Policies by Selected Sectors (4) Manufacturing  (iii) Textiles and clothing 
The Secretariat Report takes note of "several unusual features" of VAT rebates applied by China, 
ranging from differences between the rate of VAT act ually charged and the rate rebated, to several  WT/TPR/M/161/Add.3 
 Page 35 
 
 
fluctuations in the VAT rebate rates done either for the sake of meeting industrial development goals 
or reducing accumulated arrears. 
The Report also mentions that the textiles and apparel exports were among the industries most 
affected by the reductions in the rebate rates. 
• In this context, could Chinese delegati on kindly provide information about the 
amount of rebated VAT to the textiles and clothing industry and its  percentage among 
the total amount of VAT repayments? 
Answer:  
The VAT rate charged for textiles and clothing produc ts is 17%, and the rebate rate of these products 
when exported is 13%. 
Question:  
Turkey  
The Secretariat Report mentions that the Chin a National Textile and Apparel Industry Council 
(CNTAC) questioned the rationale of the tariff rate quota (TRQ) system for cotton applied by China 
as for the past few years TRQs in excess of the quota amount have been awarded for imports of cotton. 
• In this regard, could Chinese delegation please elaborate on the reasoning of this 
practice concerning TRQs?  
• We would also be interested in learning China’s point of view on the effects of VAT 
rebates to the global trade?   
Answer:  The TRQ regime, products subject to TRQ and th e TRQ quantity were negotiated during China’s 
WTO accession negotiations and the results were inco rporated into the Accession Protocol. In the 
case of cotton, China increased the TRQ quantity bey ond its commitment in the past years in view of 
the domestic supply and demand situation. With more cotton imported under the in-quota tariff than 
committed, China believes there was no WTO consistency problem in this regard.  
On VAT rebate, China believes it is in consistency with the WTO rules and also practices of many 
other Members, as the rebate, in respect of the production and distribution of exported products, is not 
in excess of those levied in respect of the production and distribu tion of like products when sold for 
domestic consumption. In view of that, the VAT rebate for exports in China is by no means of subsidizing nature and has no negativ e impact on international trade. WT/TPR/M/161/Add.3 
Page 36  
 
Question:  
Malaysia
 
1. How does China apply its manufacturing licen se?  What are the procedures involved in 
applying for this license?  Are the licenses granted automatically?  If no, what are the criteria that 
need to be fulfilled before the license is granted? 
Answer:  On manufacturing licensing, the State Council in July 2005 promulgated the Regulations  of the 
People’s Republic of China on Administration of Production Licensing for Industrial Products (State 
Council Decree No. 440). If Malaysia would like to have further details of the Regulations, China will provide an English translation of the Regulat ions as soon as it becomes available.  
Question: 
Chinese Taipei
 
(page, 53, paragraph 81) 
The report states that: "Foreign investors in the ‘e ncouraged’ category are pe rmitted to import capital 
equipment duty free."  We would appreciate further details of how this scheme operates, as follows : 
i) Are the said foreign investors allowed to import any capital equipment duty-free, at 
any time, or are there conditions attached, for example, is it only capital equipment 
not produced domestically at the time of initial investment that is eligible.  
Answer: 
Detailed information concerning the scheme can be found in the subsidy notification China submitted 
to the WTO SCM Committee in April 2006. 
Question:  
Chinese Taipei  
(page 84, paragraph 68)  We would appreciate further clarification from Ch ina on the following aspects of its anti-dumping 
regulations: 
(1) As indicated in the report, provisional anti-dumping measures may not exceed four months 
from the effective date set forth in the public notice regarding the decision on provisional anti-
dumping measures and, in special circumstances, may be extended to nine months.  "Special 
circumstances" refers, for example, to cases that involve several categories of products rendering the 
investigation complex.  According to PRC authoriti es, there have been such cases, but no details on 
the number of such extensions were provided to the Secretariat. 
According to Article 7.4 of the Anti-dumping Agreement (Agreement on Implementation of 
Article VI of the GATT 1994), provisional measur es may be extended to a period not exceeding  WT/TPR/M/161/Add.3 
 Page 37 
 
 
nine months in circumstances where it is on request  by exporters representing a significant percentage 
of the trade involved; and when the authorities, in the course of an investigation, examine whether a 
duty lower than the margin of dumping w ould be sufficient to remove injury. 
Could China please explain further and, if possible, provide specific  examples of, the above-
mentioned "special circumstances" in which the provisional anti-dumping measures may be extended 
to nine months, and show how they are consistent  with Article 7.4 of the Anti-dumping Agreement? 
(2) As also indicated in this section of the report, the decision to implement provisional anti-
dumping measures is made by the Tariff Commission of the State Council on the recommendation of 
the Ministry of Commerce.  The WTO Anti-dumping Agreement stipulates that provisional measures of anti-dumping duties may only be implemented when the following three circumstances 
concurrently apply: 1) an anti-dumping investigatio n has been initiated; 2) a preliminary affirmative 
determination has been made of both dumping and injury, and 3) the implementation of anti-dumping 
duties are determined to be necessar y to prevent such inju ry in the course of the investigation.  We 
find that in almost every case a provisional duty was imposed by the Tariff Commission after the 
preliminary determination was made. 
 It would be appreciated if China could please explain how the Trade Commission arrives at 
its determination that a provisiona l duty should be imposed, and how it substantiates the fact that all 
three circumstances exist as specified by the Agreement?  
Answer: 
1. The above-mentioned "Special Circumstances" describe situations where the ability of the 
investigation authority to reach a final determinati on within 4 months is compromised, for example, 
in extremely complex cases involvi ng an excessive variety of products. 
2. MOFCOM will make a recommendation to the Ta riff Commission of the State Council based 
on an affirmative preliminary determination of each anti-dumping case under investigation. The 
Commission will then decide whether to impose a pr ovisional anti-dumping duty on the basis of the 
recommendation.  So the Commission’s decision to take the provisional antidumping measure is 
based on MOFCOM’s affirmative preliminary determination of both the existence of dumping and injury to domestic industry.  This practice is  in line with the WTO Anti-dumping Agreement. 
Question:  
Chinese Taipei
 
(pages 130-131, paragraph 224) 
The performance of SOEs from 2001-2004 is shown in  Table III.14. We would appreciate China’s 
clarification of the following:  
ii) Are the performance figures for 2005 now av ailable?  If so, we would appreciate 
having this information. 
ii) In addition, we are interested in know ing whether China has a plan for future 
privatization of the SOEs and, if so, may we please be informed of the schedule and 
the proposed methods of privatization? WT/TPR/M/161/Add.3 
Page 38  
 
Answer:  
The performance figures for 2005 are not avai lable yet. The reform process of state-owned 
enterprises will be further d eepened in China. However it is not a privatization process. 
Question:  
Chinese Taipei
 
(ii) Electricity (page 183, paragraph 62)  
The report states: "Also, while efforts to unify the market have been made, it remains fragmented, and 
electricity trade between provinces is low."   
Therefore, we would like to ask China which policy t ools are used by its relevant authorities to unify 
the market.  Also, what measures, if any, are bei ng adopted in order to mitigate and handle the current 
fragmented situation in the market? 
Answer: 
An ideal situation of supply and demand on the el ectricity market would be local production and 
consumption, without losing elect ricity on long-distance transmission.  However, quite often hydro-
power and other renewable sources are located in remot e areas and there is a need to moderate the 
distribution of electricity among different areas at di fferent hours given a fixed to tal supply.  As such, 
it is necessary to have an electricity market within a certain geographical region to foster 
competition.  China has made it a clear-cut and fund amental principle in its power sector reform to 
create regional electricity markets.  It is not a bout having a geographically unified national market.  
Having regional electricity markets is essential for breaking down inter-provincial market barriers, 
which is only possible by reforming existing power  regime as well as cultivating and improving 
regional electricity markets.  Once these regional  markets are up and functioning, inter-provincial 
barriers will greatly weaken and dissipate.   
Question:  
Chinese Taipei
 
(page 184, paragraph 67)  This paragraph indicates some of the key measures in the electricity reform plan approved by the 
State Council in April 2002, such as the separa tion of transmission from distribution, and a 
competitive system for grid access and competition at the retail level, have not been introduced.   
i) We would like to know whether the final liberalized framework and exact process of 
the transition to a competitive power market have been modified?   
ii) If this is something that is being planned, then what would be the main 
considerations?  WT/TPR/M/161/Add.3 
 Page 39 
 
 
Answer: 
Reform of China’s power regime is currently moving forward in an orderly fashion on the principles 
laid down in the State Council plan.  The tasks and schedule in this endeavor  have not been modified. 
Question:  
Argentina  
1- En la página 74, párrafo 4, el informe ha ce referencia a que en materia de Obstáculos 
Técnicos al Comercio, China se ha comprometido a adoptar normas internacionales en donde 
corresponda pero que, no obstante, el porcentaje  de normas nacionales equivalentes a normas 
internacionales se ha mantenido inalterado d esde 2000 en torno a un 32 por ciento. 
En la página 110, párrafo 90, el informe hace menc ión a que sólo alrededor del 32 por ciento de las 
normas nacionales, en promedio, eran equivalentes a las normas ISO/CEI durante el período objeto de 
examen.  
¿Prevé el gobierno adoptar medidas para armonizar sus normas y prescripciones técnicas de acuerdo 
los estándares internacionales? 
Answer:  China does plan to further improve the adoption rate of international standards in formulating 
national standards. China considers the adoption of international standards as an important national 
technical and economic policy. 
From 2004 to September 2005, China made an overa ll review of all the existing national standards 
with the view of improving harmonization between  national and international standards. After the 
review, 2513 standards were abolished, accounting for 11.6% of total standards; 9526 standards 
continue to be effective, accounting for 44.2%; 9536 standards continue to be used but need to be 
revised immediately, accounting for 44.2%. With abolition and the revision of the 9536 national 
standards in the coming three years, harmonizatio n between national and international standards 
shall be improved significantly. 
Question:  
Argentina
 
4- En la página 113, párrafo 99, el informe menc iona que China, en el caso de las mercancías 
sujetas a medidas sanitarias y fitosanitarias, aplica tres métodos de inspección en frontera que varían 
en función del momento en que se realiza la inspe cción y el plazo en que tarda en despacharse la 
mercadería. ¿Podrían detallar cuáles son los produc tos para los que se aplican los distintos métodos? WT/TPR/M/161/Add.3 
Page 40  
 
Thailand
 
SPS measures   
Para 99:   Could China  please provide more details on the criteria used to select the method of 
inspection for goods subject to SPS measures, and da ta on the percentage of imports subject to SPS 
requirements that have been cleared under the three methods? 
South Africa  
Paragraph 99 (Page 93):  "According to authorities, there are three methods of inspection carried out 
at the border for goods subject to SPS".  These me thods differ in the number of days needed to 
complete a transaction. 
12. Could China give details of the products covered by each inspection method, and why the 
timeframes differ? 
Answer: The purpose of using different inspection methods at the border is to maximize trade facilitation while 
ensuring the safety of the products. The choice of  method depends on factors such as the risk in 
spreading quarantine pests and diseases, the disease st atus of the origin of the goods, possibility of 
destination inspection, and historical records of  exporternon-compliances, etc. The timeframe differs 
because of difference in procedu res. We don’t have details of the pr oducts covered by each inspection 
method for the time being. 
Question:  
Argentina
 
5- En la página 183, párrafo 285, el informe menci ona que, al no estar previstas en la legislación 
vigente, las importaciones paralelas (cuando un ag ente no autorizado directamente por un productor 
importa bienes fabricados por éste para su reventa) no están prohibidas en China. ¿Tiene previsto el 
gobierno estudiar la implementación de alguna legislación que regule este tema? 
Answer:  
This information in the Secret ariat report is not accurate.  As a matter of fact, there are provisions in 
relevant laws and regulations in China prohibiting par allel import as defined in the question. An 
example would be Article 11 of the Patent Law of the People’s Republic of China, which reads: "After 
the grant of the patent right for an invention or u tility model, except where otherwise provided for in 
this Law, no entity or individual may, without the au thorization of the patentee, exploit the patent, that 
is, make, use, offer to sell, sell or import the pat ented product, or use the patented process, and use, 
offer to sell, sell or import the product directly obtained by the patented process, for production or 
business purposes. After the grant of the patent right fo r a design, no entity or individual may, without 
the authorization of the patentee, exploit the pat ent, that is, make, sell or import the product 
incorporating its or his patented d esign, for production or business purposes."  WT/TPR/M/161/Add.3 
 Page 41 
 
 
Question:  
Argentina  
7- En la página 241, párrafo 109, el inform e menciona que China impone restricciones a la 
importación y exportación de determinados pro ductos textiles, que éstas se están eliminando 
paulatinamente. En este sentido, cita sólo un ejem plo de algunos productos de capullos de seda sujetos 
a contingentes y licencias de exportación. ¿Qué otros productos textiles han sido beneficiados con 
estas eliminaciones? 
Answer:  
With regard to the import and expor t administration concerning textiles and clothing products, China 
now maintains only state trading and TRQ on import of cotton, and on the export front China used to 
have state trading, export quota and export licensing on s ilk products at the time of accession to the 
WTO. Export state trading on all silk products was terminated on 1 January 2005, and export quota 
and licensing on some silk products we re also removed on that date. Currently only ten HS 8-digit silk 
products are still subject to export quota and licensing. 
In addition, China does have some administrative measures on export of textiles and clothing 
products. However, these were taken to facilitat e export of such products in response to the 
unreasonable restrictive measures taken by some  Members against China and they do not constitute 
any restrictive measures. 
Question:  
Argentina  
8- En la página 75, párrafo 8, el informe menc iona que el Gobierno está tratando de estimular el 
desarrollo del sector no público con su asistencia, incluso mediante donaciones y otras medidas para 
facilitar el acceso a la financiación. ¿Podrían exp licar en que consisten estas medidas y sobre que 
bases se aplican? 
Answer: 
We believe that the information referred to by Arge ntina in the Secretariat Report is from the policy 
document named Opinions of the State Council on  Encouraging and Guiding the Development of 
Individual and Private Businesses issued in February 2005 by the State Council of the People’s 
Republic of China. The document was in respons e to the possibly still existing difficulties and 
problems in the current Chinese economic system whic h constrain the further development of the non-
public sector in China after two decades of re form and opening, and aimed at providing general 
guidance and principles of the Central Government with regard to future policy measures concerning 
the development of the non-public sector. A level play ing field for non-public sector in respect of 
market access, incentives and support, social servi ces etc was stressed in the document. As a 
document offering guidance and principles, its provisions are general, including on such supportive 
measures as financing facilitation. The guidance and principles will be followed and implemented 
through specific policies and measures to be issued  by various ministries and agencies under the 
Central Government, as well as by local governme nts at all levels. These specific policies and 
measures when related to a specific WTO agree ment, particularly when meeting the notification 
criteria as contained in these agreements, will be notified to the WTO. The notification China WT/TPR/M/161/Add.3 
Page 42  
 
submitted in April 2006 on existing subsidy program s has already contained specific policies and 
measures concerning non-public sector whic h have relevance to the SCM Agreement. 
Question:  Argentina
 
11- En la página 101, párrafo 64 se menciona que  en virtud de la ley de comercio exterior, 
determinados productos podrán ser objeto de co mercio de Estado. La publicación de listas de 
productos, la forma en que dichos derechos son concedidos a empresas privadas y los criterios que se 
utilizan en la publicación de dichas medidas no resultan del todo adecuadas para un sistema 
transparente y previsible. Está China tomando medid as para que el sistema r esulte más transparente y 
previsible? En su caso cuales? 
Answer: 
The state trading regime in China is transparent and  predictable. Products subject to state-trading 
both for import and export as well as a list of enterp rises given the state trading status are published 
by way of announcement of the Ministry of Co mmerce, MOFCOM (also the former Ministry of 
Foreign Trade and Economic Cooperation, MOFTEC) and are available on the MOFCOM website. 
China has submitted annually its quantitative restrict ion notifications to the WTO since its accession. 
These notifications have contained co mprehensive information regarding the state trading regime in 
China. 
Question:  
Brazil  
Energy WT/TPR/S/161 IV (1) paragraph 03 
According to the Secretariat report, "China plan s to supplement its current source of electricity, 
mainly coal, with others, such as hydro and nucl ear power. At the same time, it intends to reduce 
energy costs per unit of GDP by 20% in the next fi ve years". What are the programs/strategies of the 
Chinese Government to achieve these goals? 
Answer: In line with the 11
th Five-year Plan, the Chinese government aims to reducing energy consumption by 
20% by the end of this period.  To that end, the government is  promoting resource conservation and 
environmental protection as a basic state policy and building a low-input, high-output, low-consumption, low-emission, recyclable and sustai nable national economy and a resource-saving and 
environmental-friendly society.  WT/TPR/M/161/Add.3 
 Page 43 
 
 
Question:  
Brazil  
Agriculture Brazil congratulates China because its agricultural a nd trade policies have become less controlled by 
the Government. In the same way we encourage China to change the approach "support versus 
taxation" in the sector as a matter of efficiency. Neve rtheless, we regret the fact that China is not 
notifying timely its agricultural measures to WTO. Also, Brazil laments the fact that most TRQs are 
generally unfilled. 
Question WT/TPR/S/161 IV (2) (iii) (b) Paragraph 38 
Since the total national government expenditure on ag riculture is available in details on Table IV.2, 
could the Chinese Government explain why notificat ions on this matter have not yet been issued? 
Answer: 
China submitted its 1999-2001 domes tic support notification in January 2006 as required by the WTO 
Agreement on Agriculture. 
Question:  
Brazil
 
Rules of Origin WT/TPR/161 III (2) iv (b) paragraph 41 and 42 
Concerning its preferential rules of origin, could China provide some information on the specific 
rules? Are there special provisions for sectors such as textiles or iron? Do they encompass procedures 
such as roll-up, de minimis and cumulation or a dr awback non-prohibition?  Do  they also address the 
question of insufficient working or processing? Wh ich authority is responsible for issuing the 
preferential certificates of origin? In case there is  a prescribed format for them, could China provide 
it? Could China provide information on non-preferential rules of origin?  
Also on rules of origin, the report indicates (page 74, par. 42, table III.3) that according to the rules 
under the Bangkok Agreement, "the value of non- originating parts or components used in the 
manufacture must be less than 50% of the f.o.b. value of the product". At the same time, it mentions 
that "the country of origin is defined as the c ountry where the last manufacturing operation takes 
place". Taking into account such statements, would China explain what are the criteria applied to 
determine the origin of the product? Could China al so clarify the statement according to which "goods 
under the Bangkok Agreement must enter China direc tly"? What are the transportation rules for the 
least developed countries? WT/TPR/M/161/Add.3 
Page 44  
 
Answer: 
WTO harmonized non-preferential rules of origin ha ven’t been adopted and put into effect. During 
the transitional period, each Memb er still decides the origin of imports and exports goods according 
to its domestic legislation.  
Regulations of the People’s Republic of China on the Origin of Import and Export Goods the 
Regulation provides, when the consignees of im port goods go through the customs declaration 
procedure for import goods, they should claim the orig in in conformity to criteria stipulated by the 
Regulation. After the Customs accepts the declarati on, it should approve the origin of import goods in 
the light of whole acquired, substantial transform ation criteria and other related provisions which 
were listed in the Regulation. The Regulation doesn’t stipulate that the certificat e of origin is needed 
when import goods are declared to the customs. Th e certificate of origin endorsed by governments of 
countries other than the origin of the good cannot be  endorsed by Customs. The certificate of origin 
issued by the exporting country will be examined by Customs according to the Regulation when it is 
necessary, then the origin of im ported goods could be decided. 
Question:  Bolivia
 
Inciso 1), se menciona que "las reformas económica s de China, que abrieron la economía tanto al 
comercio internacional como a la inversión extran jera directa (IED) han pe rmitido que la economía 
crezca en un promedio del 9 por ciento al año,  mientras que el PIB por habitante aumentó de 
148 dólares EE.UU. en 1978 a 1.700 dólares EE.UU. en 2005, además de mencionar que la 
proporción de la población de China que vive por debajo del nivel mínimo vital (2 dólares EE.UU. al día) descendió de casi un 73 por ciento en  1990 a un 32 por ciento en 2003.  
¿Cuál fue el costo social de dichas reformas y cuál es son las medidas estructurales correctivas en las 
cuales se está trabajando, según el párrafo 4 de l mencionado subtitulo? Ex iste alguna relación y 
políticas macroeconómicas que consideren la relaci ón del crecimiento económico de China con su 
crecimiento poblacional? 
¿Cuál será la política monetaria, fiscal, cambiaria y de inversiones del Gobierno de China, tomando 
en cuenta los desafíos que debe hacer frente, en cu anto a desempleo, suministro de energía y  mayor 
capitalización de las empresas estatales, para mantener el ritmo de crecimiento de la economía? 
Answer: Along with fast economic growth and substantial improvement of people’s livelihood in China, a 
number of issues have also cropped up, for example, an unemployed population from SOE reform, 
environmental pollution and degradation due to ec onomic growth and urbanization, and widening 
income gap between the coastal region and central and western regions and between urban and rural 
populations. 
To address those issues, structural  remedies as follows have been and also will be pursured. China 
will continue to develop the service sector to create  more jobs, offer reemployment training to address 
structural unemployment, and establish a functional social security system. China will further its 
endeavour to harmonize economic gr owth with environmental protection, for example, strictly 
controlling high-polluting and high energy-consuming industries, enforcing a stricter accountability  WT/TPR/M/161/Add.3 
 Page 45 
 
 
system for waste treatment, establishing Green  GDP criteria for assessing local government 
efficiency and avoiding environmental destruction in  central and western region development. China 
will continue to narrow development and income gap s among different regions, with introduction of 
strategies to develop the central and western regions, and the launch of the New Countryside 
campaign and removal of agriculture taxes. Ch ina practices family planning and has so far 
successfully maintained its population growth rate at a low level. The family planning policy partly 
contributed to China’s sustained economic growth , particularly the steady increase in per capita 
GDP. 
To carry on the current momentum of growth, China will continue to maintain coherence and stability 
in its macro economic policy.  On the fiscal side , the Chinese government will continue to scale down 
the issuing of long-term state bonds, bring down budgetary deficit and streamline tax revenue 
collection and supervision. When making budgetary spending, both ends will be met, and priorities 
will be kept straight and savings will be maximized. On the monetary side, China’s current policy is to 
curb the overheating credit sca le. It will moderate its growth, optim ize the lending structure, strictly 
control medium to long-term loans and continue  to improve the interest rate regime and its 
transmission mechanism. With regar d to exchange rate policy, the Chinese government will continue 
to take steps to strengthen the managed floating regime to stabilize RMB exchange rate at a 
reasonably equilibrium level.  With regard to inves tment policy, the Chinese  government will keep 
overheating investment at bay, maintain a reasonabl e scale of fixed assets investment and rationalize 
the investment mix. In view of the increasing us e of energy, the Chinese government will control 
investment in high energy-consuming industries and regard lowering energy consumption per unit 
GDP as a long-term objective. 
Question:  
Bolivia  
Jurídico 
Observaciones Recapitulativas, párrafos 7 al 9, Ca pítulo II inciso 2), ii). ¿La aplicación de políticas 
comerciales "experimentales" y de reforma fiscal  termina a menudo en superposición de políticas, 
instituciones y normas jurídicas. ¿Cómo se resuelven los conflictos de leyes en el espacio, en el 
tiempo y en cuanto a materia, si se da una vari ación en las normas que podrían afectar a aquellas 
establecidas en la normativa comercial en general, así como para los contratos de inversión? 
Observaciones Recapitulativas, inciso 5), iv), párrafo  25 ¿Cuál es el nivel de desregulación que quiere 
alcanzar China en su intento de re formar el marco normativo para l ograr una mayor competitividad en 
los servicios de transporte terrestre, considera ndo que actualmente el prin cipal proveedor de los 
mismos es el propio Estado? 
Answer: 
We kindly refer Bolivia to the Legislation Law, Regulations on Procedures for the Formulation of 
Administrative Regulations, Regulations on Procedu res for the Formulation of Rules, and Regulations 
on Submission of Regulations and Rules for the Record. English translation of these laws and 
regulations are available at the WTO Secretaria t. These laws and regulations articulate China’s 
legislative procedures. Formulation and revision of laws, regulations and rules will surely take into 
account possible contradictions including on timing, coverage and content, and will either leave WT/TPR/M/161/Add.3 
Page 46  
 
certain period of time for adjustment for interested par ties, or clarify that the new legislation applies 
to new cases while the old ones remain in effect until they are phased out eventually, or that the new 
legislation will replace the old ones and apply immediately to all cases.  
Regarding the transportation sector, the maritime and inland waterways transport, the air transport 
and the road transport in China shifted to market-b ased operations long time ago and are now fully 
competitive. The government had ceased to play a role  in the service-providers in these sectors long 
time ago. Reform of the railway sector is now moving forward. Although service-providers in the 
sector are still performing certain government functi ons, their operation has to follow market rules. 
As a matter of fact, the fierce competition coming in recent years from other transportation options 
has greatly promoted the development of  the railway sector in China.   
Question:  
Bolivia
 
Entorno Económico. 
Inciso 4), v), párrafo 44. ¿Qué modificaciones se de ben realizar en la legislación actual sobre política 
de competencia, para cubrir t odos los temas relacionados a ella? 
Capítulo I, inciso 5), iv) 
Política de Competencia 
Capitulo III inciso 4), b) párrafos 139 al 151 ¿Qué medidas deben ser tomadas para flexibilizar la 
entrada de nuevas empresas y garanti zar la competencia justa para e llas ante los  monopolios estatales 
existentes? 
¿Qué modificaciones, en materia institucional, se deben realizar para regular adecuadamente la 
competencia y garantizar los derechos de los actores económicos? 
d) párrafo 253 ¿De qué manera se aplicaría la  ley antimonopolio a las empresas estatales? 
Answer: Among existing legislations on competition policy, th e Law of the People’s Republic of China Against 
Unfair Competition passed in September 1993 and e ffective of December 1, 1993 was the first law 
developed by China with the express purpose of mon itoring competition activities. It is a legislation 
attempting to check unfair competition and anti-co mpetitive behaviors and to encourage and protect 
fair competition practices and the legitimate right s and interests of both operators and consumers. 
Outlining 11 illegal practices, the law, together with  other supplementary administrative regulations 
and rules including at local level, forms a legal framework against unfair competition. 
The Price Law of the People’s Republic of China was adopted in December 1997 and put into effect 
on May 1, 1998. This law provides for the pric ing practices of the business operators and the 
government, for overall price modulation and pri ce monitoring. The purposes are to regularize 
pricing practices, use pricing to  rationally allocate resources, stabilize market price index, and 
protect the legitimate rights and interests of consum ers and business operators.  Article 14 of this law 
has provisions on price cartel, predat ory pricing and price discrimination.  WT/TPR/M/161/Add.3 
 Page 47 
 
 
The Bidding and Tendering Law of the People’s Republic of China was passed in August 1999 and it 
came into effect on January 1, 2000.  This law cont ains specific provisions on tendering, bidding, bid-
opening, bid-examination and bid-awarding activities.  It has the purposes of regularizing bidding and 
tendering activities, protecting national and public interests and the interests of concerned parties in 
a bid or tender.  Article 32 of the la w forbids conspiracy bidding and tendering. 
The Product Quality Law of the People’s Republic  of China was adopted in February 1993 and put 
into effect on September 1, 1993.  This la w provides for the responsibilities and obligations of 
producers and sellers on product quality, monitoring of  product quality and damage  claims. It has the 
purposes of strengthening supervision over produc t quality, clarifying product quality-related 
responsibilities, and protecting the legitimate rights and interests of users and consumers. The law 
forbids the unauthorized designation of others’  address, origin and product quality markings. 
The Law of the People’s Republic of China on Consumer Interests Protection was passed in 
October 1993 and became effective on January 1, 1994.  This law provides for the rights of 
consumers, obligations of business operators, consumer organizations, and consumer dispute 
settlement and liabilities.  It has the purposes of protecting the legitimate rights and interests of consumers and maintaining the social-economic order. 
In addition, the State Council and other govern ment agencies also promulgated a number of 
regulations and rules related to competition poli cy, for example, Provisions on Forbidding Regional 
Blockage in Market Economic Activities (2001), Prov isions on Banning Anti-competitive Activities by 
Public Companies, Provisional Rules on Takeovers of Domestic Companies by Foreign Investors 
(2003), and Provisional Rules on Banning Price Monopoly (2003).  
The Standing Committee of the National People’s Congress of China started to review the draft 
Antimonopoly Law in June 2006. It is still possible t hat the draft will be amended during the review 
process, but the law is already envisaged as the central legislation on competition and will apply 
uniformly to all types of enterprises, state- owned and foreign-invested alike, unless exempted 
otherwise. When the Law takes effect, existing laws and regulations will be duly amended and 
harmonized on relevant articles. 
Question:  
Bolivia
 
Entorno Económico. Párrafo 54. ¿Cuáles son los mecanismos que el gobier no chino implementa para evitar que sus propios 
nacionales hagan uso de las preferencias impositivas brindadas a la IED, de acuerdo a las 
características mencionadas en líneas precedentes? 
Answer: 
The establishment of enterprises with foreign invest ment and any change regar ding the investment are 
subject to approval and/or registration. Whether or  not a foreign-invested enterprise is entitled to tax 
preference is also subject to the examination by  the tax authority. It is not likely that Chinese 
nationals would have chances of using such preference. WT/TPR/M/161/Add.3 
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Question:  
Bolivia
 
Transparencia. Capítulo II, inciso iv, párrafo 27 ¿Cuáles son los esf uerzos financieros, legislativos y administrativos 
que el gobierno ha destinado y destinará a fi n de mejorar su nivel de Transparencia? 
Answer: The Chinese government has taken a series of con crete steps since 2000 to increase the transparency 
of the public sector. The Legislation Law, Regulations on Procedures for the Formulation of 
Administrative Regulations, Regulations on Procedu res for the Formulation of Rules and Regulations 
on Submission of Regulations and Rules for the Record have been enacted or revised to 
institutionalize the formulation and promulgation pr ocedures for different types of legislation. 
According to these law and regulations, in draf ting legislation, opinions of relevant organs, 
organizations and citizens shall be extensively solicit ed. Solicitation of opinions may take forms such 
as forums, appraisal meetings and hearings etc. Le gislation drafts are also made public for comments 
when necessary.  
Apart from that, a massive program on legislati on review was launched nationwide around the time 
of China’s accession to the WTO. The State Council had reviewed all the 756 pieces of existing 
administrative regulations promulgated by the end of 2000 and published the result in its 
Decree No. 319 in 2001. Pursuant to a special  circular issued by the State Council in 
September 2001, all local governments also review ed local regulations, rules and administrative 
measures in line with the principles of uniform  application, non-discrimination and transparency. 
In 2002, the former MOFTEC Gazette was given the new name of China Foreign Trade and 
Economic Gazette.  Bringing together laws, regulations and rules which are relevant to or affecting 
trade in goods, trade in services and trade-related intellectual properties, the publication has greatly 
facilitated public access to trade-related la ws, regulations and policy measures.   
On 27 August, 2003, the Administra tive Permit Law was adopted at the 4
th Meeting of the Standing 
Committee of the Tenth National People’s Congress. Th e law provides clear-cut and strict provisions 
with respect to mandate, procedure and qualifications . A nationwide review was also conducted in the 
past few years to sort out existing administrative permissions in order to standardize the behavior of 
administrative departments and further increase transparency. 
Furthermore, the Chinese government has also been promoting th e use of Internet to enhance public 
sector transparency. Official websites of the mini stries, commissions and other departments under the 
State Council as well as those of provincial governments have all been created. Legislative and 
administrative measures of the central governme nt and many of local governments are largely 
available on the Internet. A large number of public  comments on draft legislations were also solicited 
over the Internet.   WT/TPR/M/161/Add.3 
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Question:  
Bolivia  
Jurídica Capitulo II, inciso 2), párrafos 5 y 6 El sistema ec onómico socialista como tal, aparenta entrar en 
contradicción con el reconocimiento de inviolabilidad a la propiedad legal de los ciudadanos, y a la 
protección de sectores no públicos.  Parece ser que con el reconocimiento del imperio de la ley como 
política nacional se encontrará una especie de legitim ación a la propiedad privada. ¿Cuál es el grado 
de cohercitividad de la legislaci ón relacionada con la propiedad privada de los extranjeros si ésta 
entrara en contradicción con la propiedad Pública? 
Capítulo II, inciso 2), iii) párrafos 25 y 26 El sistem a de exigibilidad del cumplimiento de la Ley, no 
parece estar estructurado de una forma clara que dé se guridad jurídica al proceso de tipo judicial, y las 
disposiciones en temas específi cos no hacen más que subsanar algunos de los temas de interés 
comercial en sus procedimientos administrativos, po r lo cual, para los inversores extranjeros podría 
representar cierta complejidad sujetarse a disposiciones de tipo transitorio. 
¿Existe la posibilidad en un futuro de establecer un ordenamiento jurídico que integre de manera 
efectiva y sistemática la solución jurisdiccional a las reclamaciones que se pudieran sustentar en el 
ámbito de su derecho interno? 
Answer: Experiences China has gained in the past two d ecades of reform and opening as well as in the 
establishment of a socialist market economy have de monstrated that the socialist market economy 
system does not contradict with the concepts that th e lawful private property of citizens is inviolable 
and that the non-public sector of the economy should be protected. Amendment to the Constitution of 
the People’s Republic of China in 2004 included such  new items as that lawful private property of 
citizens is inviolable, and that the state protects according to law the right of citizens to own and 
inherit private property, and that the state en courages, supports and guides the development of the 
non-public sectors of the economy. In practi ces these have all be faithfully implemented. 
The Chinese side has difficulty understanding the second question. However, the following responses 
are provided, trying to address the question. In th e judicial system in China, there is a full-fledged 
system of administrative review (administrative reconsideration) and judicial review, which are 
embodied in the Law on Administrative Reconsid eration and the Administrative Procedure Law and a 
series of regulations and judicial interpretations in cluding the Rules on Certain Issues in the Trial of 
International Trade Related Administrative Cases issu ed by the Supreme People’s Court. If a citizen, 
a legal person or any other organiza tion considers that his/her or its lawful rights or interests have 
been infringed upon by a specific administrative act of an administr ative organ or its people, he/she 
or it may apply to administrative organs for admin istrative reconsideration or may bring a law suit 
before a people’s court. The system  is functioning effectively. WT/TPR/M/161/Add.3 
Page 50  
 
Question:  
Bolivia
 
Solución de Controversias. Capítulo II, inciso 6), v) párrafo 93¿Cuando Chin a negocia sus acuerdos de Inversión, tiene alguna 
preferencia por un tribunal arbitral internacional en  especial para la solución de sus controversias 
inversionista – Estado Chino,  o da preeminencia al uso de su jurisdicción interna? 
Answer: 
An investment dispute between the investor and th e host country government is generally settled at a 
domestic court or through international arbitra tion according to China’s existing bilateral 
agreements on investment protection. When the investor uses international arbitration, the 
International Center for the Settlement of Investme nt Disputes (ICSUD) or an ad hoc arbitration 
tribunal may be the arbitrator of choice, prov ided that the investor has already exhausted all 
remedies under the administrative revi ew procedure of the host country. 
Question:  
Bolivia
 
Medidas de Salvaguardia  
Capitulo III, inciso 2), viii) párrafos 77 al 81. 
¿Se ha invocado en estos años el mecanismo de  salvaguardia a productos agropecuarios? ¿a qué 
productos y países se les aplicó? 
Answer: 
Up till now China has not taken any safeguard me asures against agricultu ral products from any 
countries or regions. 
Question:  
Bolivia  
Agrícultura 
Capítulo IV, inciso 2), párrafo 10, ¿Cómo debería estar estructurado el mercado de trabajo urbano- 
rural integrado que llegue a absorber  de una forma estable y ordenada  la migración de los trabajadores 
rurales innecesarios? Además de reducir la brech a de ingresos que existe entre hogares rurales y 
urbanos? 
Answer: The Chinese government has always a ttached great importance to the social and economic disparity 
between the urban and rural areas. In the coming yea rs, the three-fold issue of agriculture, farmers 
and rural development will remain a top priority for the Chinese governme nt. The government has  WT/TPR/M/161/Add.3 
 Page 51 
 
 
envisaged a new socialist countryside to address the urban and rural development imbalance. The 
specific issues of establishing an integrated l abor market and narrowing the income disparity are 
addressed in detail in the "Opinions of the State Council on Addressing Issues Related to Migrant 
Workers" (State Council Circular [2006] No.5), issu ed by the State Council in March 2006. The 
document is available in Chinese at the official we bsite of the central government of the People’s 
Republic of China http://www.gov.cn . 
Question:  
Bolivia  
Agrícultura.  Párrafo 23 ¿Cuáles son las importaciones de product os agropecuarios exentos de IVA y cuáles sus 
criterios de elegibilidad? 
Answer: The subsidy notification China submitted in Ap ril 2006 to the WTO Committee on Subsidy and 
Countervailing Measures outlined existing import VAT exemption for certain agricultural products. 
Please refer to the document for detailed information. 
Question:  
Bolivia
 
Agrícultura  Párrafos 27 y 28. Como se menciona en el informe las importaciones de aceites vegetales por 
empresas del Estado es pequeña, en este sentido, ¿el grueso de las importaciones de estos productos es 
realizada por empresas privadas? En qué porcentaje? Estas empresas acceden a los contingentes arancelarios? Cuáles son las medidas no arancelari as, aparte de contingentes, que restringen la 
importación de productos agropecuarios y cuáles han sido los sectores más afectados por estas 
medidas? 
Answer: 
Vegetable oil was subject to TRQ administra tion until 1 January 2006. Between China’s WTO 
accession and its expiry date, the tariff-rate quota had been increasing at a fast pace while the 
proportion given out to state trading enterprises had b een decreasing. This paved  the way for the final 
phasing-out on 1 January 2006 of the TRQ on these products. Currently China maintains no trade 
restrictive measures against import of agricultural pr oducts. On grain, cotton,  and wool, etc., TRQ 
administration is in place. For detailed inform ation concerning the TRQ regime and its enforcement, 
Members are advised to consult the notificatio n China submitted to the WTO Committee on 
Agriculture as required by th e Agreement on Agriculture.  WT/TPR/M/161/Add.3 
Page 52  
 
Question:  
Bolivia
 
Agrícultura Apoyo a la Agricultura, párrafo 37, ¿Cuáles de lo s productos que reciben subve nciones son destinados 
a la exportación? 
Answer: Subsidies China currently maintains are not con tingent upon whether an export is made. Detailed 
information regarding agricultural subsidies is av ailable in the domestic support notification China 
submitted to the WTO Committee on Agriculture as we ll as the subsidy notification submitted to the 
Committee on Subsidy and Countervailing Measures. 
Question:  
Bolivia
 
Agrícultura 
Párrafos 37 al 42, ¿Si bien no se ha hecho la notif icación a la OMC sobre el apoyo interno al sector 
agropecuario, cómo ha afectado éste al incremen to de la producción y al incremento de las 
exportaciones agropecuarias de Chin a? ¿Qué otro sector y en que medida recibe apoyo interno aparte 
de los  cereales? 
Answer: China submitted its 1999-2001 domes tic support notification in January 2006 as required by the WTO 
Agreement on Agriculture. 
Question:  Bolivia
 
Agrícultura 
Párrafos 43 y 44  ¿Cómo se aplica el sistema de regulación de precios en el sector agropecuario y 
cuáles son los sectores a los que más beneficia? Este sistema afectó a las importaciones 
agropecuarias? 
Answer: China already liberalized food pricing to market s upply and demand in 2004. Only for the purposes of 
maintaining supply in times of abrupt changes in  supply and demand and of protecting farmers’ 
interest will China, if necessary and at the decision  of the State Council, use minimum purchasing 
prices in major food-producing areas for stra tegic food items which are in short supply.  WT/TPR/M/161/Add.3 
 Page 53 
 
 
Question:  
Bolivia  
Agrícultura Apéndice, cuadro AIII.6 Subvenciones notificadas a la OMC. ¿Cómo se aplican estos recursos? ¿Cuál 
es su influencia en el sector agrícola debido a que  los mismos se considerarían como un subsidio a la 
exportación en caso de productos exportables, asimismo, en que condiciones se los otorga, como créditos y si es así están en l as mismas condiciones de mercado? 
Answer: 
Subsidies China currently maintains are not con tingent upon whether an export is made. Detailed 
information regarding agricultural subsidies is av ailable in the domestic support notification China 
submitted to the WTO Committee on Agriculture as we ll as the subsidy notification submitted to the 
Committee on Subsidy and Countervailing Measures. 
Question:  
Bolivia
 
Electricidad. Capítulo IV, inciso 3), ii), párrafo 63 ¿Sustentar, cómo se efectuará la reducción de la demanda de 
electricidad debido a la supresión de la fijación de precios preferenciales para los productos de alto 
consumo energético? 
Answer: 
This question is related to an academic paper quot ed in the Secretariat report. China, having little 
knowledge of the quoted paper, is in no position to comment. 
Question:  
Bolivia
 
Electricidad. Párrafo 64  ¿En base a qué información las autorida des afirman que la tendencia de importaciones de 
electricidad, se ha invertido inclus o superando la oferta a la demanda? 
Answer: We do not believe in the conclusion that electricity  supply in China is greater than demand. Latest 
statistics from 2005-2006 show a rapid increase in installed power generation units, hence, the 
overall power generating capacity. The result was a fa st reversal of electricity undersupply in most 
parts of the country since 2002. But even so, no sta tistics indicate China has electricity oversupply 
across the country at all hours. WT/TPR/M/161/Add.3 
Page 54  
 
Question:  
Bolivia
 
Electricidad Párrafo 75 ¿Cómo se puede compatibilizar lo que est ablece la ley referente a los contingentes de 
distribución de electricidad, con la afirmación de las autoridades respecto a que "la electricidad no se 
asigna mediante un sistema de contingentes"? 
Answer: 
The current Electricity Law of China took effect in 1996.  Article 49 of the law has a provision 
mentioning "meeting the electricity use target for agriculture and rural areas" .  Target is different 
from quota. After many years of reform, electricity distribution is now conducted in China by the grid 
enterprises themselves according to their annual di stribution scheme, instead of being subject to 
government quotas.  The Electricity Law is now being amended, and in this pr ocess it is expected that 
the above-mentioned provision will be rephrased. 
Question:  
Bolivia
 
Electricidad 
Párrafo 76 ¿Con la implementación de  una nueva política de precios,  es posible que se solucione el 
problema de escasez de energía en China? 
Answer: 
In recent years, the Ch inese government has been using a correlated price regime for coal and 
electricity. In other words, the tariff will be duly adjusted to reflect the chan ge in coal prices, which 
are already fully market-based. This policy has addressed the concern of electricity producers about 
increasing costs of fuels for generation, boosted investors’ confidence and bol stered the development 
of the power sector. Therefore, the st rain on electricity supply in most parts of China has been greatly 
relieved over the past couple of years. 
Question:  
Bolivia  
Hierro y Acero 
Capitulo IV inciso 4) ii) párrafo 95 ¿Cuál es el mecanismo y normativa que deben seguir las empresas 
para acceder a la asistencia que presta el Estado a modo de devoluciones fiscales, descuento en los 
tipos de interés, fondos para la investigación y desarrollo? 
Answer: 
Information regarding existing subsidies in the form of interest discount or R&D fund is available in 
the subsidy notification China submitted to the WTO Committee on Subsidy and Countervailing  WT/TPR/M/161/Add.3 
 Page 55 
 
 
Measures. If the questions here are the result of reading the Steel Industry Development Policy, we 
believe it will be useful to have the following clarifications.  
The Policy is a guideline paper outlining the opinion s of the government towards development of the 
sector. It is not a compulsory legislation. Supportin g measures mentioned in Article 16 of the Policy 
are indicative only and will have to wait to be im plemented by the Ministry of Finance and others by 
way of specific ministry rules or announcements. Up  till now no support measures have been taken by 
any government agencies to implement Article 16 of the Steel Industry Development Policy. 
China does have a VAT rebate mechanism, which is fo r goods that have cleared customs procedures 
for export, VAT and excise will be refunded if they have been levied down the production and distribution chain, or exempted. This is in consis tency with the WTO rules and also practices of many 
other WTO Members. The VAT rebate does not specially  target only steel products. It applies to all 
products.  
Question:  
Colombia
 
2.  Marco Jurídico e Institucional A) El literal i), párrafo 11., aclara que China está dividida administrativamente en provincias, 
regiones autónomas, regiones admi nistrativas especiales, y términos municipales directamente 
dependientes del Gobierno Central.  Además de lo s niveles central y provincial, las jurisdicciones 
administrativas también están subdivididas en ciudad es a nivel de prefectura (incluidas las prefecturas 
autónomas), condados (incluidos los condados autónom os), y municipios (incluidos los municipios 
étnicos). Al respecto, nos gustaría saber si los acu erdos de comercio celebr ados con otros Países 
Miembros o Regiones, rigen y deben ser cumplidos en las regiones, prefecturas, condados y 
municipios autónomos?. Además, nos gustaría conocer si estas di visiones administrativas pueden 
expedir reglamentos y regulaciones sobre comercio exterior? 
Answer: 
Trade policies are implemented uniformly across the entire customs territory of China. Trade 
agreements between China and other countries and regi ons therefore are applied to all levels of the 
Chinese government, including governments at the prov incial level, prefecture (city) level, country 
level and township level.    
Domestic legislation in China includes laws, adminis trative regulations, local regulations (including 
autonomous regulations and separat e regulations), and rules. The limits of legislative power and 
legislation procedures are stipulated in the Legi slation Law of the People’s Republic of China, 
Regulations on Procedures for the Formulation of  Administrative Regulations, Regulations on 
Procedures for the Formulation of Rules and Regul ations on Submission of Regulations and Rules for 
the Record. English translations of these laws and reg ulations are available at the WTO Secretariat. 
On local regulations, according to the Legisla tion Law of the People’s Republic of China, the 
people’s congresses or their standing committees  of the provinces, autonomous regions and 
municipalities as well as a few cities possessing legi slative power, may, in light of the specific 
conditions and actual needs of their respective admin istrative areas, formulate local regulations, 
provided that such regulations do not contradict  the Constitution, the laws and the administrative WT/TPR/M/161/Add.3 
Page 56  
 
regulations of the Central government. In this sen se, local regulations do not cover issues directly 
concerning international trade. 
Question:  Colombia
 
2.  Marco Jurídico e Institucional 
F) En el literal v), párrafo 31., se cita que el alejamiento progresivo de China de una economía 
centralmente planificada ha llevado a una "descentr alización" de determinados poderes hacia los 
gobiernos locales.  Antes de 1994, la mayoría de  los impuestos eran recaudados por los gobiernos 
locales.  En algunos casos, ello puede haber provocado el uso de impuestos para regular el comercio 
interno. Quisiéramos saber si ¿Existe la posibilidad  de que algún gobierno lo cal destine fondos locales 
o nacionales a apoyar a personas o empresas exportadoras de bienes? 
Answer: As noted in the answer to the previous questi on, local regulations shall not contradict the 
Constitution, the laws and the administrative regul ations of the Central government. WTO Agreement 
and the Protocol on the Accession of China are not directly implemented in China but through 
domestic legislation instead. Laws, regulations, rules and other administrative measures of the 
Central government relating to or affecting trade  in goods, services and the trade-related aspects of 
intellectual property rights are applied and implemen ted consistently with the WTO Agreement and 
the Accession Protocol, and local regulations and rules should all be in line with those of the Central 
government and should not violate the WTO Agreement and the Accession Protocol. Local 
governments may provide support for enterprises and individuals engaged in international trade, for 
example in the area of trade fac ilitation. However, the measures taken  should be in consistency with 
the WTO rules as well as China’s accession commitments. 
Question:  Colombia
 
ii) Marco y procedimiento legislativo 
A) En el párrafo 76, se dice que: "Desde que accedió a la OMC, China ha relajado las 
restricciones a las empresas con inversión extranje ra;  en 2000 y 2001 se revisaron las tres leyes y se 
redujeron las limitaciones de acceso y las prescripciones de compensación de las exportaciones; 
asimismo, se relajaron las prescripciones en materia de transferencia de tecnología.". 
Queremos conocer si en la actualidad para todo ti po de inversión extranjera se exigen requisitos de 
desempeño tales como compensación de exportaci ones y transferencia de tecnología?  De ser 
aplicable sólo a ciertos sectores, nos gustaría que fueran señalados explícitamente.  Adicionalmente 
nos gustaría conocer cómo estas respuestas se re lacionan con el Acuerdo sobre las Medidas en 
Materia de Inversiones Relacionadas con el Comercio. 
B) Igualmente se indica en el párrafo 77, que "Según las autoridades, los inversores extranjeros 
gozarán del mismo acceso que los inversores nacion ales, y cuando se aprueben o revisen las leyes y  WT/TPR/M/161/Add.3 
 Page 57 
 
 
los reglamentos pertinentes, se permitirá la inversión privada en todo sector que no esté 
explícitamente prohibido por la ley."    
Dado que no especifica en cuáles sectores se permitir á la inversión extranjera y en cuales no, nos 
gustaría conocer cuáles serían los sectores abiertos y si abría algún tipo de requisito específico para la 
inversión en los mismos. 
Answer: With respect to the foreign investment regime, th e legislations for guiding and regulating foreign 
investment in China include the Law on China- Foreign Equity Joint Ventures and its implementing 
rules, Law on China-Foreign Contractual Joint Ve ntures and its implementing rules, Law on Foreign 
Capital Enterprises and its implementing rules, Regulations on Guidance of Foreign Investment 
Direction, Catalogue for the Guidance of Industri es for Foreign Investment, Industrial Catalogue for 
Encouraging Foreign Investment in Central and West ern Regions, and a number other regulations 
and rules for the access of foreign investment in specific sectors. 
Pursuant to the Law on China-Foreign Equity Jo int Ventures, Law on China-Foreign Contractual 
Joint Ventures and Law on Foreign Capital Enterp rises and their implementing rules, foreign 
investors should take up no less than 25% of shares in the total investment.  The Regulations on 
Guidance of Foreign Investment Direction, Catalo gue for the Guidance of Industries for Foreign 
Investment and sector-specific rules and regulations  on foreign investment access provide for foreign 
shareholding limits and the areas accessible to foreign investment both in general terms and in 
details. 
Before and after its accession to the WTO, China revi sed, adjusted and updated its legislations on 
foreign investment to the compliance with WTO rules and the accession commitment.  The foreign 
exchange balance requirement on foreign invested ent erprises and requirements on local contents, 
export performance and the submission of produc tion plans were removed.  The current foreign 
investment regime is in line with the WTO Agreement on Trade-related Investment Measures. 
Question:  
Colombia
 
Medidas que Afectan Directamente a las Exportaciones. 
D) ¿Cuáles son las condiciones para otorgar el de recho de comerciar en frontera? ¿A quienes se 
les otorga éste derecho?  
Answer: 
The provisions concerning border trade are found in the Circular of the State Council on Issues 
Concerning Border Trade. Under current system, citizen s living near borderline can get involved in 
border trade in designated marketplaces which are est ablished within 20 kilometers to the borderline, 
and enterprises registered in designat ed border cities, counties or districts can conduct border trade. WT/TPR/M/161/Add.3 
Page 58  
 
Question:  
Colombia
 
Medidas que Afectan Directamente a las Exportaciones H) El Informe de la Secretaría menciona que el arancel NMF aplicado de China tiene 74 tipos 
arancelarios distintos ad-valorem, comprendidos entr e 0 y 65 por ciento, con una amplia dispersión 
arancelaria y con una progresividad ne gativa en los bienes no elaborados. 
Answer: 
China takes note of the situation. We believe the fo llowing factors should be taken into consideration. 
After accession, China conducted tariff reducti on every year according China’s commitment upon 
accession. However, due to huge administrative burde ns and other factors such as capacity building 
and shortage of staff, China has not been able to refor m effectively its tariff structure. We will further 
our research in this area. For a developing country like China, it is the low cost that counts in 
processing trade. During China’s accession nego tiation, negotiation on tariff bound rate was 
conducted product by produc t. As a result, the final bound rate for products which had no or weak 
competitiveness remained comparatively high, while that for competitive ones was reduced to some 
extent.  
Question:  
Colombia
 
Medidas Comerciales Especiales 
A) Los párrafos 67, 73 y 77 del Examen de Política Comercial de China, mencionan que 
cualquier persona física o jurídica u organización pertinente, puede solicitar ante la autoridad 
competente en nombre de la rama de producción nacional, una investigación por supuesto dumping, 
subvenciones o salvaguardias, respectivamente.  Es posible obtener información sobre la forma por 
medio de la cual se determina que los peticionari os de estas investigaciones representan los intereses 
de la rama de producción nacional?  En China se maneja algún criterio de representatividad mínimo 
necesario para presentar una solicitud e iniciar una investigación? 
Answer: A domestic industry refers to all producers of like products within the customs territory of the 
People’s Republic of China or producers whos e production accounts for over 50% of the total 
domestic production of like products. When the applic ants’ combined production is less than 50% of 
the total domestic production of like products, but  between the domestic producers supporting and 
opposing the application, the supporting group accounts  for over half of the total production of such 
products by both the supporting and opposing gro ups and the output of the supporting group is no 
less than 25% of the total domestic production of such products, then th e application should be 
regarded as representing the domestic industry.  WT/TPR/M/161/Add.3 
 Page 59 
 
 
Question:  
Colombia  
Medidas Comerciales Especiales B) De acuerdo con el párrafo 68, en China se han presentado "circunstancias especiales" 
que han sustentado la prórroga de medidas antidumpi ng provisionales hasta por 9 meses.  Es posible 
profundizar en las "circunstancias especiales" que se han presentado en China, con el fin de conocer 
las dificultades que se han presentado en ese país al adelantar investigaciones antidumping? Es 
posible conocer algunos ejemplos, relacionados con investigaciones que abarcan "varias categorías de 
productos"? 
Answer: 
The above-mentioned "special circumstances" describe a situation where the ability of the 
investigation authority to reach a final determinati on within 4 months is compromised, for example, 
in extremely complex cases involving an excessive variety of products.  
Question:  
Colombia
 
Medidas que Afectan Directamente a las Exportaciones 
C) Se afirma que en el caso de tecnologías que se pueden exportar libremente se exige el registro 
del contrato de exportación. ¿Se manejan criterios serios de confidencialidad sobre la información 
consignada en el contrato de exportación? 
Answer: 
The confidentiality of the informa tion contained in the contract is  well respected by the registration 
authority. 
Question:  
Colombia  
Medidas que Afectan Directamente a las Exportaciones 
D) Existe intención de racionalizar la compleja  estructura en materia de restricciones y de 
impuestos a las exportaciones? 
Answer: 
The export administration regime in China is by no means complicated. The annual QR notification 
China makes to the WTO Secretariat contains detailed information on the regime.  On top of that, the 
Chinese government continues to ratio nalize this regime. As a result, the number of products subject 
to the export administration is  substantially less and the procedures are more streamlined. WT/TPR/M/161/Add.3 
Page 60  
 
The list of products subject to export duty is incl uded in the annual Chinese tariff schedule of import 
and export commodities, which is available at the WT O Secretariat. The tariff schedule issued by the 
Office of the Customs Tariff Commission of the Stat e Council is the legal text implemented by the 
Customs. Products subject to export duty from 2002 to 2004 are consistent with those committed to in 
the Accession Protocol, i.e. 37 pro ducts (84 tariff lines in 2002).  
Question:  Colombia
 
Contratación Pública 
A) El párrafo 115 comenta la existencia de un "Catálogo de contratación centralizada", el cual 
establece ciertas prescripciones para las adquisiciones de bienes, proyectos y servicios. Es de nuestro 
interés conocer: ¿Qué tipo de prescripciones contiene este catálogo para bienes, proyectos y servicios?  
Para el caso de prescripciones relativas a requis itos técnicos, dichas prescripciones están basadas en 
normas internacionales? 
B) Adicionalmente nos gustaría saber si es un re quisito para contratar con las entidades públicas 
la inscripción en algún registro de proveedores? Si  es así, es un registro único o existen registros 
especializados por entidad o sector? Cuáles son los requisitos para la inscripción? 
C) El párrafo 116 menciona que de acuerdo c on el Artículo 10 de la Ley de Contratación 
Pública, "... el Gobierno deberá adquirir bienes, obr as y servicios nacionales." Al respecto tenemos las 
siguientes preguntas:  ¿Esta restricción aplica ta mbién para las empresas de propiedad estatal?  
¿Existe alguna medida que establezca los procedim ientos y requisitos de contratación de tales 
empresas, o estos son establecidos por las mismas  empresas? ¿Existe alguna medida que establezca un 
trato discriminatorio a los bienes y servicios extr anjeros en las adquisiciones de estas empresas? ¿La 
obligación de compra nacional es eliminada para proveedores de ciertos países como medida de 
reciprocidad a un trato no discriminatorio a los proveedores chinos en las compras públicas de esos 
países? 
D) Hay entidades públicas de la República Popular  China que realicen compras importantes de 
productos básicos (commodities) como productos agríco las y de la minería? Pueden participar los 
productores extranjeros en la provisión de  tales bienes? En qué condiciones? 
Answer: 
Under Article 2 of the Government Procurement Law of the People’s Republic of China, Government 
procurement mentioned therein refers to behaviors of state organs at various levels and social 
organizations that procure with fiscal funds go ods, engineering works and related services within the 
catalogue made for centralized procurement accord ing to law or procure them in excess of the 
thresholds. The goods here refer to all forms and varie ties of items, including raw materials, fuels, 
equipment and products. Engineering works refer to c onstruction projects, including new buildings or 
structures, renovation, expansion, decoration, demolition and rehabilitation. Services refer to objects 
under government procurement other than goods and engineering works. Article 7 of the Law 
stipulates, "…The scope of centralized procurement shall be determined on the basis of the catalogue 
for centralized procurement publis hed by the people's government at the provincial level or above.  
For those to be procured under central budget, the ca talogue for such objects shall be determined and 
published by the State Council; for those under lo cal budget, the catalogue shall be determined and  WT/TPR/M/161/Add.3 
 Page 61 
 
 
published by the governments of provinces, autonom ous regions and municipalities or organizations 
designated by them. Items included in the catalogue  for centralized government procurement shall be 
procured in a centralized way." Governments at all levels will update the ca talogues for centralized 
government procurement on an annual  basis and post them on the website for China’s government 
procurement (www.ccgp.gov.cn).  The catalogue has  no technical requirement on the suppliers, nor 
provisions on "producer registration". The goods, engineering works or se rvices for centralized 
government procurement are identifie d in the catalogues prepared by  governments of various levels. 
Pursuant to Article 2 of the Law, the purchaser in government procuremen t does not include state-
owned enterprises.  As such, Article 10 of the Law does not apply to state-owned enterprises. China’s 
current government procurement regime does not  restrict the access of foreign products and 
suppliers. 
Question:  Colombia
 
Agricultura 
A) Podría China proporcionar detalles acerca del régimen de tenencia de tierras? Cuál es el 
beneficio que genera para la pobl ación en general este sistema?   
Answer: 
Please refer to the 2004 Land Administration Law of the People’s Republic of China and the 2002 
Law of the People’s Republic of China on Land Contract in Rural Areas. English translation of both 
Laws is available with the WTO Secretariat. 
Question:  Colombia
 
Agricultura 
B) Existe alguna limitación sobre la superfici e que puede ser sembrada de algún cultivo? 
Answer: 
The question is not clear to China, particularly the concept of planting acreage. This makes responses 
from China very difficult. China would appreciate if the question would be further clarified.  
Question:  
Colombia  
Agricultura C) Recientemente China eliminó el  impuesto agrícola especial (sp ecial agricultural tax) a todos 
los productos, salvo las hojas de tabaco. ¿Cómo opera este impuesto? Para el caso del tabaco, ¿Cual 
es la tarifa?. Del mismo modo, podrían explicarnos  ¿En qué consiste el nuevo impuesto agrícola que 
se aplica a los demás productos? WT/TPR/M/161/Add.3 
Page 62  
 
Answer: 
The Standing Committee of the 10
th National People’s Congress in its 19th session on 
29 December 2005 adopted the decision to abolis h the Regulations on Agricultural Tax. From 
1 January 2006 on agriculture tax and animal husb andry tax were finally phased out. Agriculture 
specialty tax was also phased out  with the decision, except for tobacco leaves, on which the State 
Council promulgated on 28 April 2006 Provisional Re gulations on Tax on Tobacco Leaves in State 
Council Decree No.464. According to the Regulation, the tax rate is 20%. 
Question:  
Colombia  
Agricultura 
D) Podría China explicar ¿Por qué no se han utilizado plenamente los contingentes que ha 
establecido para algunos productos agrícolas? 
Answer: 
Tariff rate quotas for agricultural products are market access opportunities. Whether the quotas will 
be fully used depends on the s upply and demand situation in th e domestic market. When the gap 
between supply and demand is less than the quota volume, it is very likely that the quotas will be 
underused. 
Question:  Colombia
 
Agricultura 
E) ¿Cuál es el método que utiliza ese país pa ra la asignación de contingentes arancelarios? 
Answer: 
Concerning the details of the TRQ administration in China, including the TRQ allocation methods, 
please refer to the Provisional Measures on Admini stration of Tariff Rate Quota for Imports of 
Agricultural Products and Provisional  Measures on Administration of Tariff Rate Quota on Import of 
Chemical Fertilizer. In November 2004, English trans lations of these two instruments were provided 
in China’s notification to the WTO Co mmittee on Import Licensing Procedures.  
Question:  
Colombia  
Agricultura F) Si bien, el Protocolo de Adhesión, facultó  a China para imponer de rechos de exportación a 
algunos productos, con el fin de mantener un equilibr io entre la oferta y la demanda en el mercado 
interno, ¿Qué argumentos sustentan la afirmaci ón realizada por China, que estos derechos no  WT/TPR/M/161/Add.3 
 Page 63 
 
 
ocasionan distorsiones en los precios en el mercado interno de ese país con relación a los precios en le 
mercado mundial?  
Answer: China only levies export duty on a very limited number of  products, which are listed in Annex 6 to the 
Accession Protocol. China’s export duty regime is transparent and predictable.  There is no 
indication that this regime has caused price c onfusion both in domestic and international markets. 
Question:  
Colombia
 
Agricultura G) Teniendo en cuenta que aún continúan fijándose precios mínimos para las compras de arroz y 
trigo, cómo se establecen dichos precios? 
Answer: China already liberalized food pricing to market s upply and demand in 2004. Only for the purposes of 
maintaining supply in times of abrupt changes in  supply and demand and of protecting farmers’ 
interest will China, if necessary and as decided by th e State Council, use minimum purchasing prices 
in major food-producing areas for strategic food items which are in short supply.  
Question:  
Colombia
 
Agricultura 
H) Sírvanse proporcionarnos detalles en torno a lo s programas de ayuda directa a los ingresos de 
los agricultores.  
Answer: 
Since 2004, Chinese government began to grant income  subsidies to farmers who grow crops. The 
concrete conditions and criteria for the subsidy are decided by governments at the provincial level. 
From 2004 to 2006, the total amount of the direct  subsidy reached RMB 39 billion and each year 
around 600 million farmers bene fit from the subsidy.  
Question:  Colombia
 
Agricultura 
I) Podrían proporcionarnos información sobr e ¿Cómo operan los programas que ofrecen 
insumos subsidiados a los agricultores?  WT/TPR/M/161/Add.3 
Page 64  
 
Answer: 
At present, subsidies regarding agriculture inputs fall into following three categories. 
1. Subsidy for promotion of superior grains and crops cultivars Chinese government grants subsidy for promotion of superior soybean, wheat, corn and rice cultivars 
with the total amount of RMB 3.25 billion from 2002  to 2004. The subsidy for superior rice cultivars 
are directly granted to farmers , while the subsid ies for superior soybean, wheat and corn cultivars 
are granted to seed companies chosen by public bi dding and the companies will then provide seeds to 
farmers at preferential prices. Subsidy for promotio n of superior grains and crops cultivars plays an 
important role in ensuring food safety, fighting poverty and promoting rural development. 
2. Subsidy for purchasing agricultural machinery and tools 
Chinese government grants subsidies to individual  farmers or services providers for purchase of 
advanced agricultural machinery and tools. From  2002 to 2004, the total amount of the budget 
arranged is RMB 130 million. Due to the large pop ulation of farmers and limited fiscal resources, 
currently only a small number of farmers are benefiting from this subsidy. 
3. Subsidy for diesel and chemical fertilizer to grain producers  
With the initiation of the reform on oil pricing in  2006, a comprehensive direct subsidy package for 
agricultural production materials of diesel oil and ch emical fertilizer was prov ided with the total 
amount of budget arranged reachi ng RMB 12 billion. The subsidy is  directly granted to grain 
farmers. 
Question:  
Colombia
 
Agricultura 
J) Sírvanse indicarnos los programas de financiami ento apoyados por el Gobierno, a los cuales 
pueden acceder los agricultores. 
Answer: 
Information concerning the programmes as mentione d in the question is available in the subsidy 
notification China submitted to WTO Committee on Subsidy and Countervailing Measures, as well as 
the domestic support notification to the Comm ittee on Agriculture. Plea se refer to these two 
notifications.  WT/TPR/M/161/Add.3 
 Page 65 
 
 
Question:  
Colombia  
Agricultura K) Sería importante que nos informaran si ¿Chi na ha implementado alguna  medida para limitar 
las importaciones de productos agrícolas?  ¿Qué tip o de medida?  ¿Sobre qué productos?  ¿Por qué 
razones? 
Answer: 
China has not taken any measures to restrict the import of agricultural products, except for 
temporary import bans in case of an outbreak of animal or plant disease with the purpose of 
protecting human, animal and plant health. 
Question:  
EC
 
Sustainable development 
The EC welcomes China’s emphasis on sustainable economic growth and sustainable development. 
Looking at the overall policies of  China: 
• In what ways does China think trade polic y can best contribute to sustainable 
development? 
• What plans do China have for adoption of policy strategies in order to enhance 
sustainable development? Does the issue of trade and sustainable development fit into 
China’ overall development strategies? 
• What steps does China take to ensure that  its trade policy does not have any negative 
effects on sustainable development in China and elsewhere? 
Answer: 
The Chinese government has come to  the full realization that economic development is not simply 
GDP growth. It is a complete picture of harm onious social and economic growth and balanced 
development between urban and rural areas and a d evelopment process that delivers tangible benefits 
to the masses and addresses environmental i ssues and resource constraints for sustainable 
development. As such, the Chinese government places a high priority on implementing the strategy of 
sustainable development as an important dimension of  the scientific outlook on development. Guided 
by the Action Plan on Sustainable Development in Early 21st Century, China will bolster sustainable 
development by improving the legal and regulato ry framework, increasing monetary input, designing 
effective economic policies and intensifying capacity building efforts. China has enacted the Law on 
the Promotion of Clean Production and Law on En vironmental Impact Assessment, and focuses also 
include population control, res ource conservancy, environmental protection and eco- recovery. WT/TPR/M/161/Add.3 
Page 66  
 
We have spent two consecutive five-years reversing the traditional development model. The 
government has formulated the 11
th five-year plan, with continued commitments to substantiating the 
scientific outlook on development that centers  upon people and comprehensive, harmonious and 
sustainable development, improving resource use ef ficiency, further build ing a resource-saving and 
environmentally-friendly society, developing th e circular economy, protecting eco-environment and 
creating a harmony between ec onomic development and populatio n, resources and environment. 
Trade and sustainable developmen t is one of the centerpieces of China’s overall development 
strategy. Sustainable development is now perm eated in every economic and social sphere and it 
enables economic growth in concert with the sustainable growth of population, resources and 
environment. To sustain its economic growth, Ch ina currently practices a trade policy that stresses a 
balance between in and out. China is committed to  building an open economy driven primarily by 
domestic demand, harmonizing dom estic development and opening-up , stimulating consumption, 
investment and steady and balanced growth of  exports, and cultivating a resource-saving and 
environmentally-friendly society. China is al so working toward the objective of balance of 
international payments and imports and exports. Chi na intends to increase its imports, implement the 
Going Global strategy to encour age outbound investment while increasing the quality of FDI and to 
create a win-win and commonly prosperous situation. 
Question:  EC
 
FOREIGN INVESTMENT REGIME  
The WTO Secretariat’s Report states (page 52, para 77): "On 25 February 2005, the State Council 
issued "Guidelines on Encouraging and Supporting the Development of the Non-Public Sector 
including Individual and Private Enterprises".  Th e purpose of the guidelines is to improve market 
access by private companies to many industries that we re previously restricted (...).  According to the 
authorities, foreign investors will have the same acc ess as domestic investors and when relevant laws 
and regulations are enacted or revised, private invest ment will be allowed in any sector where it is not 
explicitly forbidden by law".   
• Could China indicate when it will issue such laws and regulations? 
• In view of the challenges identified in para  57 (part I, page 28), in particular the 
"bottlenecks in land, water, and en ergy resources as well as environmental 
protection", will China further liberalise its investment regime by reducing the sectors 
where FDI is restricted or prohibited? Please explain. 
Answer: The Chinese government faithfu lly honors its accession commitments and has gradually relaxed 
market access restriction on foreign companies in line with its economic and social reality. It affords 
equal treatment to both domestic and foreign compani es provided that the policies and regulations on 
foreign investment and specific industri es are met and WTO rules are observed. 
The Chinese government has updated four times the Catalogue for the Guidance of Foreign 
Investment Industries. Many areas which used to be closed for foreign investment have been adjusted 
to the restricted category, for example, telecommunications. Some restricted industries are now in the  WT/TPR/M/161/Add.3 
 Page 67 
 
 
permitted category or even the encouraged ca tegory. The Chinese government abides by its 
commitments and will continue to update the Catal ogue in due course in view of its own economic 
and social development and the trends of FDI attraction. 
Question:  
EC 
FOREIGN INVESTMENT REGIME  
The WTO Secretariat’s Report states (page 53 para 80) states: "Foreign equity limits tend to vary by 
industry and are not necessarily related to the categ ory. Thus, for example, "encouraged" industries 
may have foreign equity restrictions, while "rest ricted" industries may be wholly foreign owned. 
• Is China considering removing some forei gn equity limits so as to put them in 
coherence with the system "encouragement" of investment? Please explain. 
Answer: The encouraged category includes a number of in dustries and sectors where the access of foreign 
investment is encouraged by the Chinese government , taking into account the country’s economic and 
social needs. However, like in  many other countries, based on considerations of China’s own 
economic status, industry strength, future trends and needs, reasonable foreign equity limits still need 
to be identified in certain industries. There is no incoherence here. With regard to these industry-
specific foreign shareholding limits, the Chinese government will follow its commitments and make 
adjustments along with its social and economic development. 
Question:  
EC
 
FOREIGN INVESTMENT REGIME  
WTO Secretariat’s Report (page 56, para 89): FDI incentives:  the report  outlines that export oriented 
Fees enjoy a two year tax exemption and 50% reduction as long as the volume of annual exports 
accounts for more than 70% of the general sales of the enterprise.  
• Can China please explain how this provision is compatible with Article 3 ASCM and 
if there are any plans to abolish this scheme? 
Answer: 
Since its WTO membership, the Chinese government has faithfully  honored its commitments by 
putting in place a unified, transpa rent and WTO-compatible legal system governing foreign trade and 
economic activities. With regard to the specific pol icy in the question, forei gn invested enterprises 
may choose themselves whether to meet the relevant criteria in order to gain the tax preference. In 
other words, they can decide at their own will on whether to export and the quantity of such export, 
free of government intervention. In addition, this policy for promoting foreign investment was 
introduced in early 1990s. The Chin ese government is currently cont emplating adjustments to this WT/TPR/M/161/Add.3 
Page 68  
 
policy in the coming course of tax regime refor m which will unify income taxes on domestic and 
foreign invested enterprises. 
Question:  EC
 
GOVERNMENT PROCUREMENT  
• Paras 107 and 116: could China provide data  (even estimates) on procurement from 
foreign companies, both established in China or not. 
Answer: 
Currently China has no broken-down statistics on government procurement from foreign companies. 
Question:  
EC 
EXPORT RESTRICTIONS   
Imposing export restrictions on rare earths, China ha s put forward the argument that rare earths were a 
non-renewable resource which required protection.  Ho wever, since there exists abundant reserves of 
rare earths (contrary to what their denomination see ms to suggest), and the domestic production is not 
subjected to any restriction, we consider that  this policy is not in line with WTO rules.  
• What is the current state of play regarding rare earth export restrictions?  
Answer: 
Since China’s accession into the WTO, there has be en no change to export administration regime on 
rare earth. The regime is reflected in China’s annual QR notification to the WTO Secretariat.  
Question:  EC
 
EXPORT RESTRICTIONS   
WTO Members should hold consultations be fore introducing export restrictions. 
• Could China clarify whether it hold any consultations on the rise of export taxes on 
unwrought copper and certain copper semi -manufactured products? Could China 
provide a list of all industrial goods aff ected by export taxes, licences and other 
restrictions? Are there any restri ctions on silicon carbide exports? 
Answer: 
WTO Member can raise a point of interest to China and request for consultation. China is ready to 
look into the information and consult with the Member.   WT/TPR/M/161/Add.3 
 Page 69 
 
 
Question:  
EC 
INCENTIVES  
WTO Secretariat’s Report, page 117, para 190: bail out:  it is stated that recently 45Bio US$ had been 
injected to partially bail out two state – owned banks  to prepare them for restructuring and eventual 
listing on the stock exchange.  
Can China please explain this operation in more deta il and give some precisions in regard to non 
performing loans to SOEs in this context? 
Answer: The reorganisation and injection of capital into th e Bank of China and the China Construction Bank 
were one of the major steps taken in the overall reform of the banki ng sector in China.  Compared 
with previous reform measures, the capital inj ection measures of December 2003 were designed and 
implemented with commercial considerations in mind. The State, through the Central Huijin 
Corporation, injected US$ 45 billion into the two banks to increase their cap ital funds, with future 
dividends expected as a return on this investment. With  this capital injection, the Bank of China and 
the Construction Bank of China were reorganised into  shareholding companies and later went public. 
Corporate management mechanisms had been introdu ced, the banks' operati ons and assets had been 
restructured, quality of assets improved, and the capital sufficiency rate increased. These initiatives 
were aimed at fully commercialising the operations  of the two banks and would enable China to 
accumulate further experience for additional  reform of the Chinese banking system.  
According to China’s statistics, at the end of 2005, the total non-performing loans (NPLs) of Chinese 
commercial banks was 1313.3 billion RMB Yuan, or 8.61% of the total, among which the NPLs of 
state-owned commercial banks registered at 1072.5 billion RMB, 10.49% of their total loans. The 
state-owned Chinese commercial banks lend loans in lin e with market rules, to be specific, depending 
on the solvency and creditability of the enterprises.  The specific amount of loan for a particular 
enterprise or sector depends on the profit margin of the loan to th e enterprise or sector. Sectoral 
breakdown of NPLs is currently not available. 
Question:  
EC
 
IRON AND STEEL  
Referring to the WTO Secretariat’s Report, page 191, in para 93, the report refers to China's "Steel 
industry development industry" paper issued by  the NDRC, mentioning as one of the targets 
"reducing pollution". In article 30 of the NDRC polic y, last para, referring to high energy consuming 
and high polluting primary processed products, it is stated " Limits will be imposed on the exports of 
high energy consuming and high polluting primary pr ocessed products such as coke, ferroalloys, pig 
iron, steel scrap, and billets (ingots), and export drawbacks on these products will be reduced or abolished. WT/TPR/M/161/Add.3 
Page 70  
 
• What is meant by "limits will be imposed"? Could China further explain what is 
meant by "export drawbacks"? What are the consequences of their reduction or 
abolishment? 
Answer: 
Reading the paragraph China believes that the Secret ariat is trying to explain that the Chinese 
government does not encourage export of products wi th high energy consumption and high pollution. 
The "export drawbacks" in our view seems to refer  to the tax rebate for export. Not to encourage 
export of these kinds of products is conducive to  environment protection and sustainable development. 
It also helps in reducing trade imbalance. 
Question:  
EC
 
IRON AND STEEL  
In para 90, reference is made to "shortage of ir on ore supply". In article 30 of NDRC policy paper, 
first para, it is stated "The state encourages en terprises to strengthen international cooperation in 
mining industry resources. The state supports large scale backbone enterprises and corporations to 
establish iron, chrome, manganese, nickel, wast e steel and coking supply bases overseas through 
investment, joint ventures, partnerships and purchases. The state encour ages for needs in raw 
materials such as ore and coke, to be r esolved by relying on  the overseas market. 
• How will the state encourage enterprises? How will the st ate support enterprises and 
corporations? What type of measures are envisaged? 
Answer: The Steel Industry Development Policy outlined opi nions of the government towards development of 
the sector. It is not a compulsory legislation. There is no government’s interference in commercial 
decisions of enterprises, including steel sector, and so far no specific support programmed have been implemented.  
Question:  
EC
 
IRON AND STEEL  
In para 95, the report reads "The policy also en courages the use of domestically produced equipment 
or technology, and emphasizes efforts to produce such  equipment locally.  The Government provides 
assistance in the form of tax refunds, discounted  interest rates, and funds for research and 
development, etc. to major iron and steel proj ects using newly develope d domestic equipment.  
Equipment and technology that domestic enterprise s are unable to produce may be imported but need 
to be "modern and practical".  
Actually, article 18 of the NDRC policy paper reads "Policies for imported technologies and 
equipments: use of national equipment and technolog ies is encouraged, and import is to be reduced.  WT/TPR/M/161/Add.3 
 Page 71 
 
 
The equipments and technologies that must be import ed because they can not be  made in China or can 
not meet the requirements must be advanced and practical. The manufacturing of the equipments 
which are largely needed in the future will be  localised. Use of outdated and second hand steel 
production equipments eliminated either  at home or overseas is prohibited. 
• How will imports be reduced? How is "a dvanced and practical" defined? What 
criteria have to be met to be "advanced and practical"? 
Answer: 
Regarding the Development Policy for Steel Industry,  it is desirable for en terprises to use advanced 
technology in new projects and not to develop he avily polluting, resource and energy consuming 
projects. The Development Policy for Steel Industry ta kes this rule and seeks to further clarify it as an 
industry policy. Taking into account the future development of world steel industry and the present 
stage of development in domestic steel industry in China, catalogues of out dated produc tion capacity, 
techniques and products are determined with referen ce to such criteria as energy consumption level, 
resource consumption level, quality of the products  and environment polluting level, etc. Advanced 
and practical equipments refer to those which emb ody the development trend of the steel industry, 
with the characteristics of low level of energy and resource consumption, high product quality and 
low level pollution, etc. 
Question:  Bolivia
 
Textiles y Prendas de Vestir 
Capitulo IV, inciso 4) iii) ¿En qué medida se está cumpliendo el compromiso de ayudar a elevar el 
nivel técnico de la industria textil, dentro de l as ocho medidas que implementó China a la expiración 
del ATV? 
EC 
TEXTILES AND CLOTHING  
WTO Secretariat’s Report, page 193 onwards 
Para 100 refers to the growth rates in the textiles and clothing sector. 
• How does China assess the future growth of the textiles and clothing sector? 
Para 102 mentions that there have been no s ubsidies to the textile industry since 2000.  
• Could China clarify further if this refers to  direct subsidies? Does this also exclude 
non-performing or poorly guaranteed loans from state-owned banks? Does this also 
refer to support from Provincial authorities?  
• Does the same apply at the local authoriti es level? More generally, which kind of 
assistance are the Chinese aut horities (central or local) still providing to the textile WT/TPR/M/161/Add.3 
Page 72  
 
and clothing industry? For example, are lo cal governments still offering FIEs ad hoc 
reductions on land use fees and utility charges?   
Answer: The Chinese textiles and clothing industry had endured a very tough period of structural adjustments 
in the 1990s in the context of market oriented reforms. The industry had to restructure and modernize 
itself by scrapping 10 million outmoded cotton sp indles, 280,000 wool spindles and one million silk 
spindles from 1997 to 2000. Better textile machin eries worth US$30 billion were imported, thus 
improving the technological standar d and productivity. Those uncompetitive enterprises in the sector 
went bankrupt or were forced to merge, causing layo ffs or reallocations of 1.4 million textile workers. 
It is this adjustment that has resulted in the comp etitiveness of this sector now in the international 
market, and China also became the third largest tex tile importer in the world, only next to EU and 
US. China is the biggest importer of raw cotton, and last year we had imported 1.9 million tons of 
cotton. China is among the top importers of wool, im porting 220,000 tons of wo ol in 2004. China is 
the number one importer of textiles machinery and part s, having spent US$ 4.48 billion on them last 
year. Further adjustment of the sector will conti nue in China, with em phasis being put by the 
enterprises on upgrading technologies, equipment an d products, and strengthening the self-motivated 
innovation capabilities, etc.  
Textile and apparel is a fully market-based i ndustry in China. The government has no policy 
whatsoever that provides subsidy specifically to t extile and apparel enterprises. The loans from banks 
to textile and apparel project are operated on market principles. 
Textile and apparel enterprises may enjoy applicable tax preferences or other incentives, for example, 
for foreign invested enterprises and t hose in a special economic zone if they meet such criteria as 
being in the "encouraged" category. However, t hose policies are not exclusively intended for the 
textile industry. For details of these incentives,  please refer to China’s notification to the WTO 
Committee on Subsidies and Countervailing Measures. 
Question: 
EC
 
TEXTILES AND CLOTHING  
Para. 104: China encourages FDI in some sections  of the textiles and clothing industry.  
• Which sections are concerned by such encouragements? Where do the investments 
come from? Which are the biggest foreign countries acting as investors in this regard? 
Answer: 
China’s statistics on industry-specific FDI are not  further broken down by countries and regions.  WT/TPR/M/161/Add.3 
 Page 73 
 
 
Question: 
EC 
TEXTILES AND CLOTHING  
Para. 105 lais down factors that explain the Chinese co mpetitiveness in the textile and clothing sector.  
• Do the Chinese authorities consider that th e social conditions of work, especially 
those applied to the domestic migrant wo rkers, constitute a limitation or, on the 
contrary, a comparative advantage for th e Chinese textile and clothing industry?  
Answer: 
China is the world’s most populous developing coun try. At the current stage of China’s economic 
development, low labor cost is an undisputable fact, no exception in the textile and apparel industry. 
The overall labor conditions and social security cond itions are in tune with China’s current economic 
status. The Chinese government n evertheless attaches great importance to improving working and 
social security conditions for its labor force.  Pa rticularly over the past few years, fast economic 
growth has been coupled by greater efforts to reform the social security system and improve labor 
conditions. Migrant workers as a newly-emerged l abor force in China’s reform and opening and the 
processes of industrialization and urbanization have contributed subs tantially to China’s economic 
growth.  In view of the high mobility of migrant workers and the radical reform of China’s social 
security system in its transition from a planned econo my to a market economy,  the new syst em is still 
in the process of being consolidated and impro ved. Therefore, working and social security conditions 
for migrant workers are still weak, though it has beco me a top priority of the Chinese government. In 
March 2006, the State Council issued the Opinions  on Addressing Issues Related to Migrant Workers, 
aiming at affording more effective protection of the legitimate rights and interests of migrant workers, 
improving their working conditions and guiding the orderly and rational transfer of redundant rural 
labor. No industry is permitted to seek comparati ve advantages at the expense of workers’ legitimate 
rights and interests, including those of migrant workers. 
Question:  
EC 
TEXTILES AND CLOTHING  
Para. 118: China encourages investment abro ad by textile and clothing companies.  
• In which countries are these investments made? On the basis of which criteria are 
decisions to invest in these countries taken?  
Answer: 
With regard to outbound investment, China is cur rently implementing the Going Global strategy 
whereby companies are encouraged to engage in  outbound investment and overseas trade and 
economic cooperation, thus promoting China’s tr ade and economic ties with foreign countries. The 
Chinese government does not target specific industries in this strategy.  Companies make decisions to 
invest abroad entirely on their own. In the textile,  clothing, footwear and headwear industry, the WT/TPR/M/161/Add.3 
Page 74  
 
overseas destinations of Chinese investment are pr imarily Hong Kong China, Russia, Sri Lanka, 
Cambodia, US and UAE etc. 
Question:  EC
 
AUTOMOTIVE SECTOR  
Referring to pages 201-203, paras 123 to 133, of the WTO Secretariat’s Report: The new 
"Automotive Industry Development Policy", was issued on 1 June 2004 by the NDRC. The main 
feature of this new policy is the incorporation of China's WTO commitments.1  
However, according, the "Administrative Rules on Im ports of Auto Parts with Features of Assembling 
Whole Vehicle" which entered into force 1st April 2005, CBU units include assembled parts, which, if 
meeting the requirements specified in the new policy, are subject to the same tariffs as CBU units.  In 
addition, if imports of key pieces reach or surp ass stipulated volume, they are considered as 
assembled parts and may be subject to tariff rates applied to CBU units.  
• Does China intend to bring this legi slation in line with WTO rules? 
Answer: China believes the policies are consistent with WTO requirements. 
Question:  
EC
 
AUTOMOTIVE SECTOR  
The 50% equity limit continues to apply to foreign investment in vehicle manufacturing, including 
completely built up units (CBUs), automobiles for special use, agricultural transport vehicles and 
motorcycles. This means that the share owned by a foreign partner in a Joint Venture cannot exceed 
50% and the JV projects a foreign producer can estab lish in China are limited to a number of two for 
the production of passenger cars and commercial vehicles respectively.  
• This is a strong restriction of foreign equity for companies investing in auto and auto 
components manufacturing in China. When will this restriction be removed? 
Answer: Currently China has no plan to remove the foreign sh areholding requirement in auto manufacturing. 
                                                     
 
 1 According to the authorities, the new polic y abolished requirements on foreign exchange 
balancing, local content and export performan ce (WTO document WT/G/L/708, 8 November 2004).  WT/TPR/M/161/Add.3 
 Page 75 
 
 
Question:  
EC 
CHEMICAL AND PHARMACEUTICAL INDUSTRY  
We are concerned with the absence of prior notifi cation concerning important amendments of Chinese 
legislation on import and export of toxic chemical s with cumbersome and expensive procedures and 
high registration fees (10 000 US$), resulting in the bl ockage of a high number of containers in 
Chinese ports;  
• Please clarify the absence of a TBT notification as concerns the case of a major 
modification of the Law on Import and Export of Toxic Chemicals. Please also clarify the high registration fee, accord ing to international standards.   
Answer: 
The latest modification to the Catalogue of Toxic Chemicals subject Import and Export Restriction 
was to comply with the POPS Convention and PIC Convention and subject toxic chemicals under the 
two conventions to environmental control. 
Notification was made to the WTO/TBT Committee regarding the catalogue of toxic chemicals 
(G/TBT/N/CHN/211). The registration fee stipulated in the Rules on Environmental Control on First 
Import of Chemicals and Import and Export of Toxic Chemicals promulgated in 1994 allows multiple 
imports within two years. 
Toxic chemicals are special goods of high risk and pollution. Companies using such chemicals 
generally enjoy high profits but produce high pollu tion. China has not yet introduced the risk-based 
deposit and accountability insurance systems already  in use in developed countries. The token 
registration fee is only to offset the massive exp enses for damage control and pollution treatment. 
China is now contemplating a system similar to the deposit system in western countries. 
Question:  EC
 
CHEMICAL AND PHARMACEUTICAL INDUSTRY  
We are further concerned with the absence of di fferentiation with regards to the registration 
requirements of low volume specialty chemicals in Chinese legislation (as concerns the registration of 
new chemical substances), which results in very high testing cost (150 000 US$) and impedes 
business in low volume specialities. 
• Could China inform whether it plans to lo wer the registration requirements (lower 
testing requirements resulting in lower co st) for the low volume chemicals by 
introducing three volumes bands with adapte d testing requirements: (a) < 100 kg/yr 
volume, (b) 100-1000 kg/yr and (c) mixtures w ith less than 2% of a new chemical.  WT/TPR/M/161/Add.3 
Page 76  
 
Answer: 
Pursuant to the Provisions on the Environmenta l Administration of New Chemical Substances, new 
chemical substances for scientific research, t echnology development and eco-toxicological test, and 
polymer containing a new chemical substance mono mer less than 2% (w/w ) and low-volume polymers 
may be exempt from declaration and submission of t est results. They simply need to register with the 
competent authority.  
However, manufacture or import of new chemicals,  even low-volume, for commercial purpose is not 
exempt from declaration, because China’s environmen tal administration of new chemicals is only at a 
starting stage and its knowledge, risk assessment,  monitoring and management capabilities with 
regard to new chemical substances are in m any ways still far  behind developed countries. 
Information suggests some developed countries only allow for an annual prod uction quota of 10 kg 
for some high-risk chemicals. Therefore, the 100 or 1000 kg threshold proposed in the EC question is 
difficult for us to accept, taking into account the experience of some  developed countries at their early 
stages of management on new chemical. We are trying best to narrow the gap with developed 
countries by taking in and leveraging their m anagement models and practices, upgrading our 
infrastructure and improving ou r management. We hope before long China will gradually move 
closer to where developed countries currently stand and adopt similar administrative procedures. 
With regard to test results, China accepts results  produced by well-established GLP-certified labs 
from a foreign country or those accredited by the competent authority. It however requires that the 
submission should contain at least two sets of data on plant and animal species eco-toxicological tests 
conducted within the Chinese territory, because und er China’s particular biological and ecological 
conditions, a new chemical substan ce may show degradability and eco-t oxicity different than in other 
countries. This requirement can also be found in other countries. 
Question:  EC
 
CHEMICAL AND PHARMACEUTICAL INDUSTRY  
Discriminatory standards and the high registration fee (2 US$/kg) with respect to Active 
Pharmaceutical Ingredients result in an effective import barrier into China.   
• Does China have any plans to apply onl y the Chinese pharmacopoeia to imported 
APIs which is normal practise for domestic APIs and lower registration fees by relating them only to their administrative costs?  
Answer: 
Under China’s Medicines Law, a marketing licen se is required for an Active Pharmaceutical 
Intermediate (API), as for a preparation. By co mparison, API is subject to DMF administration in 
Europe. This regulatory difference has caused some confusion when European drug-makers are 
trying to understand China’s system. Under the Measures on Administration of Medicines Registration, imported APIs are subject to the sa me requirements regarding submission of documents, 
technical examination and clinical trial re quirements as domestically produced APIs.  WT/TPR/M/161/Add.3 
 Page 77 
 
 
Question:  
Costa Rica  
Valoración en Aduanas y Normas de Origen 12. ¿Existen resoluciones anticipadas para valor y origen? En caso positivo cuáles sus requisitos y 
trámite respectivo? 
Answer: As for the decision by the Customs regarding origin  or valuation, pursuant to the Administrative 
Reconsideration Law of the People's Republic of Ch ina and the Administrative Procedure Law of the 
People's Republic of China, the administrative deci sion by the customs is subject to administrative 
reconsideration. After reconsideration process, if the app licant is still not satisfied with the decision, 
administrative procedure may be applied.   
Please refer to the specific laws for detailed requi rement or procedure. Legal text can be found on 
http://www.gov.cn, and the English translati on is available with the WTO Secretariat. 
Question:  
Costa Rica
 
Contratación pública 
21. El párrafo 105 del Informe de la Secretaría menciona que la Ley de Contratación Pública de 
China favorece de diversas maneras a los proveedores nacionales en los mercados de contratación.  
Por favor sírvanse explicar en detalle en qué cons isten las preferencias establecidas en la Ley de 
Contratación Pública a favor de los proveedores nacionales.  
Answer: China has no provision that restricts the access of foreign products and suppliers to China’s 
government procurement market. 
Question:  Costa Rica
 
Comercio de Estado y comercio por empresas designadas 
22. El mecanismo y los criterios que tiene China para calificar empresas comerciales del Estado a 
empresas que no son propiedad del Estado (incluidas las empresas con inversión extranjera) hace que 
el valor del comercio de Estado sea significativamen te mayor a lo estimado. ¿Qué privilegios tienen 
las empresas dentro de este régimen en relaci ón a aquellas empresas importadoras o exportadoras que 
no se acogen a dicho procedimiento? WT/TPR/M/161/Add.3 
Page 78  
 
Answer: 
Products subject to state trading in China are found in Annex 2 to China’s Accession Protocol. For 
these products, lists of state trading enterprises are published by the Ministry of Commerce. The 
number of state trading enterprises for many  of these products goes beyond dozens and even a 
hundred, with foreign-invested enterprises and other non-state owned enterprises included. Therefore, 
the state trading regime in China is not necessarily linked to whether the en terprises are state-owned 
or not. The regime simply tells the fact that for these products the trading rights are available only to 
enterprises meeting the published criteria. 
Question:  Costa Rica
 
Textiles 
23. Podrían servirse a ampliar y a detallar los ti pos de subvenciones gubernamentales que fueron 
dadas en los últimos 10 años al sector. 
24. ¿Qué tipo de incentivos reciben las empresas dedi cas al sector en la actualidad?  ¿Qué tipo de 
incentivos le da China a las inversiones extranje ras directas que promociona en los segmentos del 
sector de los textiles y las prendas de vestir "alentados"? 
Answer: 
Textile and apparel is a fully market-based i ndustry in China. The government has no policy 
whatsoever that provides subsidy specifically  to textile and apparel enterprises.  
Textile and apparel enterprises may enjoy applicable tax preferences or other incentives, for example, 
for foreign invested enterprises and t hose in a special economic zone if they meet such criteria as 
being in the "encouraged" category. However, t hose policies are not exclusively intended for the 
textile industry. For details of these incentives,  please refer to China’s notification to the WTO 
Committee on Subsidies and Countervailing Measures. 
Question:  
Costa Rica  
25. Podría ampliar en los argumentos expresados  por la CNTAC para cuestionar los fundamentos 
de los contingentes arancelarios para el algodón. ¿Ha logrado este contingente su objetivo de 
equilibrar la oferta y la demanda  del producto, y ha logrado proteg er a los agricultores? ¿Podría 
detallar de qué manera se busca proteger al agricultor y en que aspectos específicos? 
Answer: 
The Chinese government is not very clear about the CNTAC argument mentioned in the question. 
Please directly contact CNTAC for details of the argument. China currenly maintains tariff rate quota 
on cotton and may increase this quota when there is a drastic increase in demand, in order to strike a 
balance between the protection of farmers and harmonizing market demand and supply.  WT/TPR/M/161/Add.3 
 Page 79 
 
 
Question:  
Costa Rica  
26. ¿En qué tipo de regí menes se encuentran instaladas las empresas manufactureras de textiles y 
vestidos? ¿Cuáles son las características y ventaj as de los diferentes regímenes si los hubieran? 
Answer: 
The establishment of enterprises in  the textiles and clothing sector, like in other manufacturing 
sectors, is subject to current Chin ese legislation on establishment of businesses. English translation of 
the legislation is available at the WTO Secretariat. As for preferential treatment, it has already been 
comprehensively covered in th e subsidy notification China submitted to the WTO Committee on 
Subsidies and Countervailing Measures. It is not lin ked to the form of business being established. 
Question:  
Costa Rica  
27. Se apuntó que el Gobierno de China brinda  asistencia para la exportación a determinados 
exportadores de textiles y prendas de vestir. ¿Podría especificar los medios y alcances de los 
programas de asistencia, así como cuales han sido los logros del mismo? 
Answer: 
The export assistances mentioned in the Secretar iat report refer to ex port promotion activities 
including export credit, export credit insurance et c which are commonly available in other WTO 
Members and consistent with WTO rule s. For details of these activiti es, please refer to responses to 
US questions I-30, 32, 62, 63, and questions l) and m) in the part of Medidas Antidumping y 
Compensatorias of list I of Mexico, among others.  These assistances are not specifically for textiles 
and clothing sector. 
Question:  
Costa Rica  
28. ¿Podrían especificar cuáles son los países en los que China efectivamente ha fomentado la 
inversión en el extranjero en compañías del sector textil y de prendas de vestir? ¿Cuántos 
beneficiarios ha tenido este programa y el tipo de los mismos (empresas privadas o empresas nacionales, capital mixto)? ¿En qué condiciones se otorgan los préstamos preferenciales aludidos? 
Answer: 
China encourages its companies to invest in c ountries and regions where such investment is fitting, 
textile and apparel industry included. There is no specific  identification of countries or regions in this 
respect. It is entirely up to Chinese textile and ap parel companies to choose countries and regions of 
their preference to invest. As long as the hos t country and region meets the expectations of the 
investor in terms of investment climate, legal and regulatory environment, infrastructure, location, 
market conditions and raw material and labor profile , it may become the choice of the investor. The WT/TPR/M/161/Add.3 
Page 80  
 
Chinese government provides equal treatment for co mpanies of different ownership structures when 
they make investment abroad. 
Question:  Costa Rica
 
Promoción de exportaciones/ Pequeñas y medianas empresas/ Gestión empresarial/ Incentivos 
29. ¿Los créditos que provee el Banco de Export ación e Importación de China (EXIM) se hacen a 
tasas de mercado o inferiores a ella?  Si el costo de  este crédito de EXIM es inferior al de mercado, 
¿podría esto calificarse como un subsidio a la exportación? 
Answer: Information on the service portfolio of China Export-Import Bank (EximBank) is available at its 
website. The bank’s credit operation takes reference fr om articles in the Arrangement on Officially 
Supported Export Credits of the OECD (Organi zation of Economic Cooperation and Development). 
Its lending interest rate is either a fixed one taking reference from OECD-released CIRRs or a 
floating one, which is a reconciled Lo ndon Inter Bank Offered Rate (LIB OR).  Hence, the interest rate 
policy is in line with international norms on export credit and does not constitute export subsidy. 
Question:  
Costa Rica
 
30. ¿Cuáles son las condiciones generales del seguro de crédito y exportación provisto por 
SINOSURE, incluyendo la prima? 
Answer: 
Please refer to responses to US questions I- 62, 63. Question:  
Costa Rica
 
31. ¿Por qué las tasas de utilización del seguro de crédito y exportación son tan bajas? 
Answer: 
Export credit and insurance has a rather short history in China. Many companies, particularly small 
and medium-sized enterprises are still unfamiliar with its  workings. That is one of the reasons why it 
is currently underused. 
Question:  
Costa Rica  
32. ¿Qué forma toma el apoyo del MOFCOM a la PYME para la exploración de nuevos 
mercados, recursos ec onómicos directos o información logística?  WT/TPR/M/161/Add.3 
 Page 81 
 
 
33. ¿El apoyo económico del MOFCOM a la PYME para la exploración de  nuevos mercados no 
es acaso un subsidio al exportador?  
35. ¿Qué tipo de infraestructura financia el "F ondo de Apoyo a la PYME en Relación con el 
Sistema de Servicios?, ¿Infraestructura pública o privada? 
Answer: 
Details of the support for small and medium sized enterprises are found in the subsidy notification 
China submitted to the WTO Committee on Subsid ies and Countervailing Measures. These support 
programmes are commonplace in many WTO Memb ers and in essence they are trade facilitation 
measures consistent with WTO rules. China do es not see them as cons tituting export subsidy. 
Question:  
Costa Rica  
34. ¿En qué forma la política de expansión de las exportaciones agrícolas (del 18 de octubre del 
2004), apoya la I+D de las empresas ag rícolas? ¿Con recursos directos? 
Answer: 
It is not clear to China which policy the questi on is referring to. Detailed information regarding the 
subsidy and domestic support prov ided to the agriculture sector is available in the subsidy 
notification and domestic support notification Chin a submitted to the WTO Committee on Subsidy and 
Countervailing Measures and Committee on Agriculture respectively. China maintains no export 
subsidies, including on agricultural products. 
Question:  
Costa Rica  
Agricultura 
39. Dentro de la transición del modelo económic o de China, que ha sido reconocido por  los 
Miembros de la OMC durante su proceso de Adhesión, ¿cuáles son los elementos de mayor atención 
por el Gobierno de China en relación a la aplicaci ón de su política agropecuar ia en cumplimiento con 
sus obligaciones en la OMC? 
Answer: 
Agriculture sector in China is comparatively weak as compared  with industry and service at its 
development level. Moreover, compared with oth er WTO Members, level of domestic support on 
agriculture is also quite low. Since accession, China is faithfully implementing its accession 
commitment. However, China is also shoulderi ng much burden on balanci ng fulfilling commitment in 
the agriculture sector and ensuring food security. Chi na is of large population,  and food security is 
always a priority. Ensuring grain self-sufficient  rate, promoting domestic production, raising 
peasants’ living standard and maintaining grain import versus domestic consumption rate at a 
rational level, etc are all of great concerns. Chi na is willing to exchange with other WTO Members on 
this issue.  WT/TPR/M/161/Add.3 
Page 82  
 
Question:  
Costa Rica
 
40. La forma en cómo se aplica el IVA a produc tos importados y de producción nacional parece 
favorecer a la producción doméstica. ¿Se aplican los principios de "Trato Nacional" según el Art. III 
del GATT? 
Answer: VAT in China is applied equally to domestic as well as imported products, which is in line with the 
WTO national treatment principle. As for existing preferential policies in the tax regime, detailed 
information has already been included in the s ubsidy notification China made to the WTO Committee 
on Subsidy and Countervailing Measures. 
Question:  
Costa Rica
 
41. Los volúmenes de importación de productos agropecuarios que realizan las empresas 
comerciales del Estado son significativamente impo rtantes y están sujetos a licencias, contingentes 
arancelarios y prohibiciones. ¿En qué caso se dan las prohibiciones, están las mismas a derecho en 
relación con los Acuerdos de la OMC? 
Answer: 
The list of the products prohibited from import is included in the annual QR notification China 
submitted to the WTO Secretariat. Please refer to th e notifications for detailed information. On top of 
that, China may activate a temporary import ban to  implement decisions by relevant international 
organizations, such as UN resolutions or SPS emer gency measures for the purpose of protection of 
human, plant and animal health, which is all WTO-compatible. 
Question:  
Costa Rica  
42. Dado en incremento de las ayudas internas al  sector agropecuario en el período 2000-2004 y a 
que China no ha presentado ninguna notificación en ma teria de ayuda interna, ¿podría China explicar 
la naturaleza de las medidas y de este incremento?  
Answer: 
China has submitted its 1999-2001 domestic support notification in J anuary 2006 as required by the 
WTO Agreement on Agriculture.  WT/TPR/M/161/Add.3 
 Page 83 
 
 
Question:  
Costa Rica  
Régimen de Inversión Extranjera y Servicios 48. ¿Cuáles son los requisitos que se exigen para  beneficiarse del régimen de vacaciones fiscales? 
Answer: 
The preferential tax policies related to this question are explored in  detail in the subsidy notification 
China made to the WTO Committee on Subsidy and  Countervailing Measures in April this year. 
Please refer to that notification for detailed information. 
Question:  Costa Rica
 
50. ¿En qué consiste el sistema de verificación y registro? ¿Rige el mismo procedimiento y se exigen 
los mismos requisitos ante la Comisión Nacional de Desarrollo y Reforma y ante las comisiones locales de desarrollo y reforma? 
Answer: 
The verification and approval procedures concerni ng foreign investment in the central and local 
governments are the same. 
Question:  
Costa Rica
 
54. ¿Qué avances concretos ha hecho China desd e su incorporación a la OMC para fortalecer y 
uniformar la aplicación de su política impositiva de incen tivos a la inversión extranjera directa en sus 
zonas económicas especiales con relación a las aplicad as en otras partes del territorio aduanera del 
país? 
56. ¿Qué avances ha concretado China en el comp romiso establecido en el Protocolo de Acceso a 
la OMC, en cuanto a la aplicación de todos lo s impuestos, cargas y medidas que afectan a las 
importaciones, incluyendo restricciones a la importa ción y tarifas arancelarias que son aplicadas a las 
importaciones dentro del territorio aduanero de Ch ina, sobre los bienes provenientes de las zonas 
económicas especiales? 
Answer: 
After 1 January 2001, tax preference for imports and exports by Special Economic Zones (SEZs) was 
discontinued. There is no difference in tariff regim e of SEZs and in other regions in China. WT/TPR/M/161/Add.3 
Page 84  
 
Question:  
Costa Rica
 
55. ¿Qué incentivos fiscales, financieros y de cualqui er otro tipo, otorga China a fin de estimular 
la salida de inversión propiedad de nacionales, en el marco de la disposición relativa al examen y 
aprobación de las inversiones destinadas a gestionar em presas en el extranjero, en vigor desde el 1 de 
octubre del 2004? (En particular, en relación con lo establecido en el artículo No. 2 en cuanto a que el 
Estado "Ayudará y alentará a las empresas" a invertir en el extranjero). 
Answer: 
China has no special fiscal and financial incentives for encouraging going global  by domestic capital. 
The encouragement and assistance is mainly ref lected in promotion, services, facilitation and 
guidance. 
Question:  Costa Rica
 
57. ¿Qué compromisos ha adquirido China desde su adhesión a la OMC o espera implementar en 
el futuro, con respecto a la reducción de las po líticas  preferenciales para la atracción de IED 
aplicadas en las zonas para el desarrollo econó mico y tecnológico, ci udades costeras, áreas 
económicas especiales, aplicadas a la zona económica de Pudong y en lo relativo al tratamiento 
preferencial en cuanto al impuesto sobre la renta corporativa preferencial aplicado para las empresas 
catalogadas como de alta tecnología, y contenid o en el anexo 5A del protocolo de adhesión.? 
Answer: 
Annex 5A of the Protocol on China’s Accession was a notification of Ch ina’s subsidies as a 
commitment to transparency. There is however no comm itment in this Annex to reducing or phasing 
out such subsidies. The phasing-out commitment was in Annex 5B. 
China will further its reform of the tax regime in lin e with the requirements of a market economy. It is 
currently considering the consolidation of the Income  Tax Law of the People’s Republic of China for 
Enterprises with Foreign Investment and Foreign Ent erprises and the Interim Regulations on Income 
Tax for Enterprises into a new corpor ate income tax law.  Through th is process, corporate income tax 
rates will be unified and properly lowered. The exi sting incentives with regard to corporate income 
tax, including those mentioned in the question, are also subject to adjustments. 
Question:  Costa Rica
 
64. ¿En qué consisten las tarifas fijadas por el Gobierno, las tarifas orientadas por el Gobierno y 
las tarifas ajustadas en función del mercado? ¿A qué servicios y en qué co ndiciones se aplica cada una 
de estas tarifas?  WT/TPR/M/161/Add.3 
 Page 85 
 
 
Answer: 
The market determines the prices of almost a ll goods and services in China. There is no government 
intervention in the pricing of these goods and services and therefore no "guidance" exists at all in this 
regard. Market-adjusted prices refer to prices of th ese goods and services. It is a literal translation of 
the Chinese word. Only a very small part of th e goods and services in China use government-guided 
prices under the Price Law, which stipulates that a government-guided price is a benchmark price 
plus a floating band as determined by the compet ent authority. The establishment and adjustment of a 
government-guided price must follow the procedu res set forth in relevant laws and regulations, 
including a price and costs review, supply and demand correlation, comments by consumers, 
businesses and other concerned parties, and public notice in the media, etc. For more information, 
please refer to the Price Law of the People’s Republic  of China. The WTO Secretariat has the law in 
English. Lists of goods and services subject to government pricing and go vernment-guided pricing 
are found in Annex 4 to China’s Accession Protocol. 
Question:  
The Philippines  
1. Sanitary and Phytosanitary Standards (SPS)  
The Philippines would like to seek clarification on Ch ina’s notification process in the context of the 
International Plant Protection Convention and the WTO Agreement on Sanitary and Phytosanitary 
Standards. Could China please elaborate on its  procedures in implementing new SPS-related 
requirements, particularly in notifying trading part ners and in providing the opportunity for concerned 
parties to adjust to the new requirements? 
Answer: 
When formulating and introducing an SPS me asure, and if the competent Chinese authority 
determines that WTO notification is necessary, a no tification form will be filled out by the authority 
with the WTO/SPS Notification and Enquiry Center of China which then will file the notification to 
MOFCOM for review and notification to the WTO. The comments by other Members and stakeholders 
will be translated by the WTO/SPS Notification and Enquiry Center and passed on to the competent Chinese authority. The authority will carefully study  the comments and make replies if so requested in 
the comments. 
Question:  The Philippines
 
1. Subsidies and Countervailing Measures 
The Philippines would appreciate it if China can confirm that it provides export tax rebate to its 
finished steel products and some subsidy for certain bolts and nuts. We would further appreciate it if 
China can provide a brief elaboration on these programs, if indeed provided to Chinese 
manufacturers. WT/TPR/M/161/Add.3 
Page 86  
 
Answer: 
In China, tax rebate for export means for goods th at have cleared customs procedures for export, 
VAT and consumption tax be refunded if they have been  levied down the production and circulation 
chain, or exempted. The policy was first introduced in 1985. It continued after the 1994 tax reform. 
The Chinese government may adjust the rebate rate as it sees fit but the rebate will always be less 
than the tax levied. So there is no case for export subsidy. 
Question:  
The Philippines
 
3. Customs Valuation The Philippines would appreciate Ch ina’s clarification on the requirements and supporting documents 
that generally serve as basis for China’s Customs authorities in revaluing the import cost of goods 
entering China’s ports and whether such customs va luation is applied uniformly in all its ports. 
Answer: 
Pursuant to Article 55 of the Customs Law of th e People’s Republic of China and Article 18 of the 
Regulations of the People’s Republic of China on  Import and Export Tariff, the customs value of 
import and export goods is construc ted and determined by the Customs based on transaction value. If 
transaction value is unavailable, customs value will be determined by the Cu stoms with reference to 
identical or like products according to Article 21 and Article 27 of the Regulations of the People’s 
Republic of China on Import and Export Tariff. This  valuation method is applied uniformly across the 
country. The above-mentioned law and regul ations have been notified to the WTO. 
Question:  Thailand
 
Foreign Investment Regime 
Para 77:   Paragraph 77 of the Secretariat report indicates that, according to Chinese authorities,  
foreign investors will have the same access as domestic investors.  Does this mean  that the legislative 
framework and procedures including examination a nd approval procedure for domestic and foreign 
investors are the same?  Does Chin a provide the same treatment to domestic and foreign investors? 
Answer: 
The said indication in the Secretariat report was made in the broader context that the Chinese 
government encourages the development of its n on-public sector including foreign investment. The 
indication points to the future policy direction of the Chinese government.  
Question:  
Thailand  
Standards and technical requirements    WT/TPR/M/161/Add.3 
 Page 87 
 
 
Para 88:   The report lists the 4 kinds of standards used  in China, i.e., national, sectoral, local, and 
enterprise, but it is unclear how such standards ar e applied.  Could China please provide more details 
on the application of these 4 standards, such as the hierarchy of the standards?  The report also indicates that "an enterprise is encouraged  to adopt national, sectoral, and local standards if they are 
available" (emphasis added).  Does this mean th at enterprises need not adopt even mandatory 
standards? 
Indonesia
 
1. On page 60 of the Secretariat Report, we find th at in the area of technical barriers to trade, 
China has four different kinds of Standards, i.e., national, local, sectoral and enterprise and that the 
percentage of national standards equivalent to international standards is only around 32%.  The 
question is that how the Chinese government provi des guarantee so that those standards do not 
constitute unnecessary obstacle to tr ade? Has China already notified t hose kinds of standards to the 
TBT Committee? 
Answer: 
According to China’s existing law, the Standardizatio n Administration of China (SAC) is responsible 
for developing national standards, industry regulat ors for developing sectoral standards and local 
governments developing local standards. Where there a re no national standards or sectoral standards 
in place but standardization is needed in the following  cases at the level of a province, municipality or 
autonomous region, local standards may be develope d.  These cases include industrial goods safety 
and sanitary standards, legal and regulatory requirements on medicines, veterinary drugs, food 
safety, environmental protection, energy c onservation, and seed products and other mandatory 
requirements. In these standards those mandat ory must be adopted by enterprises. 
Enterprise standards fall into the following categor ies: (1) standards developed for products subject 
to no national, sectoral or local standards; (2 ) standards developed for higher product quality or 
technological upgrading which are stricter than national and sectoral st andards.; (3) standards 
which are alternative or supplementary to natio nal and sectoral standar ds; (4) standards on 
processes, assembly, semi-finished products and methodology; (5) managerial and operational 
standards in production and operational activities. Enterprise standards only apply to a particular 
enterprise and have no binding power on other parties.  They create no barriers to international trade. 
All the above-mentioned standards must be registered with SAC, which is in charge of harmonizing 
national, sectoral and local standards.  In reviewing a registration application, SAC will compare it 
against national and sectoral standards for any inc onsistency or against the TBT Agreement for any 
contradiction. If the applicant’s standards contradi ct relevant laws and regulations or compulsory 
standards, SAC and other competent authorities will or der the applicant to ma ke corrections to or 
discontinue the standards. 
All compulsory national standards meeting the notification requirement of the WTO/TBT Agreement 
will be notified by the Chinese government to the WTO/TBT Committee in an accurate and timely 
fashion.  
For more information about China’s standardizati on regime, please log on to www.sac.gov.cn or 
approach China TBT enquiry point. WT/TPR/M/161/Add.3 
Page 88  
 
Question:  
Thailand
 
Other Measures affecting exports  Para 135: Could China please clarify its income tax concessions for FIEs meeting certain export 
requirements in light of SCM and TRIMs principles? 
Answer: Detailed clarification concerning the policies as menti oned in the question is available in the subsidy 
notification China submitted to WTO Committee on Subsidy and Countervailing Measures in April 
this year. Please refer to the notification. 
Question:  
Thailand
 
Measures affecting production and trade  Para 196:  The report provides some information on how VAT liabilities for sma ll scale producers are 
assessed.  Could China please elaborate on its criteria for determining whether a VAT payer is "small-
scale?" 
Answer: 
A small-scale VAT payer is defined in Article 11 of  the Provisional Regulations of the People’s 
Republic of China on Value-added Tax and Article 24 of its Implementing Rules.  Specifically, it 
refers to, 
1. Any taxpayer engaged in the production of g oods or the provision of taxable services, and 
taxpayer engaged principally in the production of goods  or provision of taxable services but also in 
wholesaling or retailing of goods, the annual sales amount of which is subject to VAT (hereinafter 
referred to as "taxable sales amount") is below 1 million RMB; 
2. Any taxpayer engaged in wholesaling or reta iling of goods, the annual taxable sales amount 
of which is below 1.8 million RMB.  
Regardless whether or not the annual taxable sal es amounts exceed the standards for small-scale 
taxpayers, all individuals, non-enterprise units, and enterprises which do not often have taxable 
activities, are chargeable as small-scale taxpayers. 
Question:  
Thailand
 
Agriculture 
Para 23:  The report mentions that agricultural product s produced and sold directly by small-scale 
farmers are exempt from VAT, and that VAT is instead collected from th e primary purchases of  WT/TPR/M/161/Add.3 
 Page 89 
 
 
agricultural products at the point of sale where the tax is calculated on the value of the trader’s margin 
and not on the product’s value.  The report also st ates that agricultural imports are subject to VAT.  
How is VAT calculated for imported products?  Is it, for example, calculated on the trader’s margin or 
on the value of the product, or are imports subject  to a different method of VAT calculation than 
domestic products?  Please elaborate in light of the WTO principle of national treatment. 
Answer: China believes that the practice is a common one and is also found in the taxation systems in other 
Members. There were detailed exchanges with the Secret ariat on this and the issue was well clarified. 
China’s current practice is as fo llows. Where the tax payer sells or imports agricultural products, he 
or she shall pay the VAT at the rate of 13%, ex cept for agricultural producing farmers who sell their 
self-produced agricultural products. These agricultu ral products are exempt from VAT only at the 
particular stage sold by the producing farmer them selves. They are all immediately subject to VAT 
from the next stage on down the VAT chain, and the rate is the same as applied to imported 
agricultural products. 
The reason that the VAT is exempted for the agric ultural producing farmers when selling their self-
produced agricultural products is that with the larg e agricultural population in China, it is virtually 
impossible to collect VAT from th em with the existing VAT collecting method. As far as we know, a 
number of other Members adopting VAT system also ha ve same or similar practice. This exemption in 
these Members would have happened in earlier stages than when imported into China. 
Question:  
Thailand
 
Automotive sector 
Para 129: Could China please provide more details  on the CBU-equivalent tariff rates it collects on 
automotive part imports, particularly in light of SCM and TRIMs principles? 
Answer: 
Please refer to the official website of the General Administration of Customs of the People’s Republic 
of China http://www.customs.gov.cn for de tailed information about the Rules.  
Question:  
South Africa  
Paragraph 12 (Page ix) : "The SPS regime and SPS pr ocedures remain complex and not very clear;  a 
large number of laws and regulations govern implementation in this area." 
1. Could China indicate if they would be revi ewing their SPS regime and procedures to make it 
more predictable and less complex? WT/TPR/M/161/Add.3 
Page 90  
 
Answer: 
In formulation of SPS-related laws, regulations and measures, China pursues the consistent goal of 
protecting human being, animal and plant health, acts on the principles of the WTO SPS Agreement, 
strictly fulfills its notification obligation and solicits  comments from all c oncerned parties. Although 
China has many administrations and laws governi ng SPS issues, but their mandates and jurisdictions 
are clearly defined. With respect to the inspection and quarantine of import and export of food and 
agricultural products, General Administration of  Quality Supervision, Inspection and Quarantine 
(AQSIQ) is the sole compet ent authority, and this has the benefit of facilitating trade. 
China believes that its SPS regime and SPS procedu res are clear and easy to fulfill, though we realize 
there is room for improvement. Minimizing impact on  trade, together with other principles of the SPS 
Agreement, has been an important principle fo r us when we develop our SPS measures. 
Question:  South Africa
 
3. Could China give an estimate of the impact of state trading and price control on prices and 
trade flows? 
Answer: 
The state trading regime in China is transparent an d predictable. All the products subject to state-
trading, import and export included, as well as the li st of enterprises granted the state trading status 
are published by way of an announcement of the Mi nistry of Commerce, MOFCOM (also the former 
Ministry of Foreign Trade and Economic Cooperati on, MOFTEC) and are available on the official 
MOFCOM website. For many products subject to stat e trading in China, the number of state trading 
enterprises is often beyond dozens and even a hund red, with foreign-invested enterprises and other 
non state-owned enterprises included. Therefore, there is no direct causal link between state trading 
and whether the enterprises are state- owned. The regime simply tells the fact that for certain products 
the import and export trading rights are limited to enterprises meeting the published criteria. The 
regime has no significant impact on trade flow. 
Question:  South Africa
 
Sanitary and Phytosanitary measures 
Paragraph 98 (page 92): "It is stated that an import permit is valid for 6 months of calendar year it is 
issued." 
5. In the case of a permit being issued in D ecember, will it still be valid for the remaining 
(5) months of the following year? 
Answer: 
An import SPS permit is valid for 6 months from the date of issui ng. Its remaining validity can carry 
into the next year.    WT/TPR/M/161/Add.3 
 Page 91 
 
 
Question:  
South Africa  
Paragraph 81, Section III(2)(viii):  "It is not clear  whether appeals may be made against safeguard 
decisions taken by the authorities." 
11. Are there provisions in place to enable app eals against safeguard decisions?  If so, which 
parties may appeal, and what are the procedures? 
Answer: 
The Foreign Trade Law and Regulations on Safeguard Me asures of China contai n no provision that 
administrative reconsideration or judicial appeal s can be applied for against a decision to take 
safeguard measures. Up till now, there has been no judicial appeal agains t any safeguard measure 
decision. 
Question:  South Africa
 
Paragraph 103, Section III(2)(ix):  Labelling 
13. What are the labelling requirements with respect to genetically modified organism? 
Answer: 
Legislation on GMO include the Regulations on the Administration of GMO Safety in Agriculture 
(State Council Decree No.204 promulgated on 23 May 2001) and Administrative Measures on 
Agricultural GMO Labeling (Ministry of Agricu lture Decree No.10 of 5 January 2002 and amended 
by MOA Decree No.38 of 1 July 2004) 
Question:  South Africa
 
Paragraph 123, Section III(3)(i):  Restricted exports 
14. Can China please indicate which products exports are restricted? Answer: 
The export administration regime in China is by no means complicated. The annual QR notification 
China makes to the WTO Secretariat contains detailed information on the regime.  On top of that, the 
Chinese government continues to ratio nalize this regime. As a result, the number of products subject 
to the administration is substantially le ss and the procedures are more streamlined. WT/TPR/M/161/Add.3 
Page 92  
 
Question:  
South Africa
 
Paragraph 168 (page 111): "In 2005, exports subject to state trading were rice; maize;  cotton; and 
tobacco" ... among other products. 
15. What impact does the state trading ente rprise have of on product prices?  Does the 
Government provide any subsidi es and/or guarantees to the STEs? 
Answer: 
Export volumes of state trading enterprises are de termined taking into account the demand and 
supply situation in both international and domestic  markets. Export price of state trading enterprises 
is decided by the enterprises themselves. It is usua lly constructed based on such costs as domestic 
procurement prices plus distribution costs (ware housing, transportation, interests, inspection fees 
etc.), with prices of the international markets u sed as reference. The government does not provide 
export subsidies. It should be noted that there is  no direct causal link between state trading and 
whether the enterprises are state-ow ned. The regime simply tells the fact that for certain products the 
import and export trading rights are limited to enterprises meeting the published criteria. 
Question:  
South Africa  
Paragraph 207 (page 126):  "In its protocol of accession China agreed that price controls would not be 
extended to additional goods and services..." 
16. When would China eliminate these price contro ls as undertaken in its Protocol of Accession? 
Answer: Lists of goods and services subject to government and government-guided pricing are found in 
Annex 4 to China’s Accession Protocol. These lists will be duly updated a nd shortened along with 
economic and social development as well as th e consolidation of market economy in China. 
Question:  
South Africa
 
Paragraph 2 (page 161):  the Secretariat reports "...  There remain some distortions, however.  For 
example, domestic prices of some prod ucts are subject to controls ...". 
17. Could China please indicate which products are still subject to government pricing 
(paragraph 43, page 175) and how does the governme nt price differ from the world market price? 
Answer: 
The market determines the prices of almost a ll goods and services in China. There is no government 
intervention in pricing these goods and services. Only  a very small part of the goods and services in 
China use government-guided prices under the Price Law, which stipulates that a government-guided  WT/TPR/M/161/Add.3 
 Page 93 
 
 
price is a benchmark price plus a floating band as determined by the competent authority. The 
establishment and adjustment of a government-guided price must follow the procedures set forth in 
relevant laws and regulations, including a price and costs review, supply and demand correlation, 
comments by consumers, businesses and other concerned parties, and public notice in the media, etc. 
For more information, please refer to the Price Law of the People’s Republic of China. The WTO 
Secretariat has the law in English. Lists of goods and services subject to government pricing and 
government-guided pricing are found in Annex 4 to China’s Accession Protocol. 
Question: 
Thailand  
(4) Trade policy objectives 3. Para 39:  What measures, other than export -related measures, does China use to promote local 
production and encourage the use of local inputs?  Co uld China please clarify its promotion of exports 
in light of its SCM obligations? 
Answer: 
China’s notification of subsidies submitted in April 2006 has included tr ade promotion activities 
which could bear relevance to the WTO SCM Agreement. Other activities not covered by the 
notification include WTO consistent official ex port credit and export credit insurance practices 
elaborated in the answers to the questions (l) and (m ) of the Mexico question list I, and questions 30, 
32 and 63 of the US question list I, among others.  
Question:  
EC
 
Trade and environment 
• What mechanisms does China have in pl ace to ensure adequate coordination of 
environmental policy and trade policy in order to ensure that any environmental 
policies are WTO compatible? 
• What eco-labelling schemes currently opera te in China and how do the authorities 
ensure they are WTO compatible?  
• What steps does China consider necessary in order to ensure a smooth articulation 
between WTO rules and trade measu res under Multilateral Environmental 
Agreements? 
Answer: 1. Years before China’s accession to WTO, mini stries responsible for trade and environment 
policies have initiated research projects on how to improve domestic environmental policies and to 
ensure they are WTO compatible. There are several publications on this topic based on these 
government-supported research projects.  WT/TPR/M/161/Add.3 
Page 94  
 
Ministry of Commerce keeps close and effective working mechanism with State Environmental 
Protection Administration, National Development and Reform Commission and other related 
government agencies when coordination of environm ental policy and trade policy is concerned. There 
are consultations and communications both at working level and higher level. 
New environmental policies bearing relevance to trade will be circulated to MOFCOM, including 
MOFCOM Department for WTO Affairs for advice.  The Department will review the policy based on 
relevant WTO rules. If there is any problem in this  regard, the Department will offer suggestions for 
improvement or correction. 
2. China started to phase in the eco-labe ling (green labeling) schemes across various 
environment related industries and sectors as of the 1990s. China Certification Committee for 
Environmental Labeling Products (CCCEL) consists of experts from various parties including 
government agencies responsible for environmen tal protection, quality supervision and economic 
affairs, academic and research institutions and civil societies. It is the state authorized agency for 
certifying environmental labeling products. Curren tly, there are three major eco-labeling schemes in 
China, namely, China environmental labeling, g reen food labeling and organic food labeling. In 
China’s eco-labeling system, the role of the government  is mainly to provide legal guarantee for the 
implementation of the eco-labeling scheme, to exa mine and review relevant technical standards and 
to monitor and supervise the co mplete certification process.  
Although China’s eco-labeling scheme was only recen tly established, its development has been one 
that incorporates international norms and practices.  China’s eco-labeling scheme has its legal basis 
of a series of basic laws regulations and rules, and is WTO compliant. 
3. China believes that MEAs have been playing an important role in addressing global and 
trans-border environmental issues and in promoti ng the global sustainabl e development. In the 
meanwhile, with the increase of trade measures fo r environmental purpose, the interaction between 
MEAs and WTO rules is increasingly notable. China supports the principl e of "appropriate and 
moderate" to deal with the relationship between MEAs and WTO rules.  
The outcome of the negotiation on paragraph 31(i) in CTE shall help to facilitate the development of 
international trade and global environmental prot ection, especially to realize the sustainable 
development of developing countries and LDCs. With respect to the negotiation steps, China favors 
the analytical and bottom-up approach, starting from defining and reviewing the specific trade 
obligations in the MEAs and moving forward the negotiation step by step in a pragmatic way. 
Discussions on abstract, theoretical or hypothetic issues should be avoided. 
Question: Brazil II
 
Is there any offset practice in the Chinese governme nt procurement system? If so, could China explain 
such practices and the corres pondent regulatory framework? 
Answer: 
We have difficulty in understanding what the "off set practice" in government procurement system 
specifically refers to, and there is also no clue in the question itself which could lead us to a correct 
reading. We would be grateful if this term could be rephrased or explained . Since the Government  WT/TPR/M/161/Add.3 
 Page 95 
 
 
Procurement Law lays the framewor k of the government procurement system in China, we suggest 
Brazil refer to the Law for possible information in this regard. The English translation of the Law is 
available at the WTO Secretariat. 
Question: 
Indonesia  
4. According to paragraph 71 of the Secret ariat Report, from 1 January 2002 to 
31 December 2004, 79 antidumping investigation we re initiated and final me asure were taken in 
52 cases. And the figure in page 85 of the Reports show  that the targeted products are chemicals and 
products thereof.  Since China is  a newly acceded member (2001), Indon esia is of the view that China 
is one of the most active users of antidumping in strument and it seems that China has used this 
instrument to protect its domestic industries inst ead of tariffs. Indonesia seeks clarification of this 
observation. 
Answer: 
Since WTO accession, China has been seriously fu lfilling its commitments, including substantially 
lowering tariffs, phasing out the non- tariff measures and further openi ng up the market. It has made 
major contributions to the development of world trade.  
As the Chinese market furthers its opening up, imported products have grown in its impact on 
domestic industries. In light of this, relevant Chinese domestic industries are resorting to ways and 
means provided by WTO rules to protect their own legitimate rights and interests, which is in line 
with the spirit of relevant WTO agreements and th e prevailing practices in other Members. China’s 
anti-dumping investigations are targeted at unfair competitions, and aimed at providing remedies for 
domestic industries suffering from the blow of dumping, and safeguarding a fair-competition based 
trading environment. It is by no means a trade protectionist activity fo r substituting tariff.  
Question: Costa Rica
 
15. ¿En qué productos aplicó Canadá medidas compensatorias contra China? 
Answer: Up till 12 June 2006, Canada has initiated 4 anti- dumping and countervailing joint investigations 
against Chinese export products, respectively outdo or barbeques, fasteners, laminate flooring and 
copper pipe fittings. Information re garding these investigations is avail able at the websites of both the 
WTO and the government of Canada. WT/TPR/M/161/Add.3 
Page 96  
 
Question: 
Thailand
 
(2)(viii)(b) Safeguards 8. Para 82: During its safeguard investigation on certain steel products in 2002, China imposed 
provisional measures in the form of tariff quotas on the products under investigation, and 
subsequently applied definitive measures only on some  of the investigated products.  Thailand would 
be interested in learning more about China’s treatme nt of imports subjected to tariff quota provisional 
measures which were subsequently found to not
 have caused serious injury.  For example, how did 
China refund the tariff quotas imposed on these imports? 
Answer: 
This is an issue of implementati on, and falls under the mandate of the Customs Authorities. According 
to Announcement 36 issued by the General Administration of Customs of China in 2002, for products subjected to provisional safeguard measures but were subsequently not subjected to definitive 
safeguard measures in the safeguard investigation on certain steel products, the duty payers can file 
an application to the duty collecting customs, with  the original copies of the bill of payment and 
customs declaration attached, for refund of the provisional special duty paid within one year as of the 
date of the bill of payment of the provisional special duty, and applications filed after the one year 
period will not be processed.  
Question: 
Chile
 
2. El informe de Secretaría indica en el párrafo  67 que las autoridades pueden poner término a la 
investigación sobre la  existencia de dumping, entre ot ros, si la investigación  va en contra del interés 
público y/o nacional. ¿En qué consiste ese la inv estigación sea contraria al interés público? ¿En esta 
materia, las partes tienen oportunidad de proporcionar antecedentes al respecto?  ¿El interés público se considera también al momento de decidir la apli cación de una medida y/o su monto? ¿Al momento 
de definir el monto de una medida, esta se rige por la "regla del menor derecho"?  
3. De acuerdo a lo señalado en el párrafo 68 del info rme, para la extensión de la vigencia de un 
derecho provisional antidumping, se requiere la exis tencia de una "circunsta ncia especial" que lo 
justifique, como por ejemplo, la  existencia de casos que abarcan  varias categorías de productos que 
hagan compleja la investigación. ¿Tal ejemplo ha sido establecido por la ley o se trata de una 
explicación dada por la autoridad de acuerdo a la práctica?  
4. El criterio de la existencia de una ‘circunstancia especial’ ¿es igualmente válido para extender 
el plazo de investigación hasta el máximo de 18 meses?  
5. El ejemplo utilizado de las ‘diversas categorías de productos’ pareciera indicar que una 
investigación se conduciría para una amplia gama  de productos. ¿Cómo se concilia esto con  el 
concepto de "producto similar"?  
6. De acuerdo a lo señalado en el párrafo 78 de l informe, en materia de salvaguardias se utiliza 
el mismo criterio de los casos de antidumping en cu anto a las investigaciones a productos agrícolas y,  WT/TPR/M/161/Add.3 
 Page 97 
 
 
por lo tanto, participa el Ministerio de Agricultura  en la determinación del daño. ¿Puede China señalar 
si  esta misma situación ocurre en los casos de  investigación por derechos compensatorios? 
Answer: 2. China promulgated the new Anti-dumping Regul ation in 2004. A provision on public interests 
was added to Article 33 and Article 37 of the new regulation. It is prescribed that the signing of price 
undertaking agreements and the collection of anti- dumping duties should be in line with public 
interests. In the case investigatio n process, investigating authoriti es will make no public interest 
driven adjustment to the dumping margin or  the anti-dumping duty rate, and no anti-dumping 
measures that are not in line with public interests will be applied. In addition, China does not practice 
the "low duty rates principle" in deciding the rate of anti-dumping duty.  
3. & 4. "Special circumstances" refer to circums tances that impede investigation authorities making 
the final determination within four months, fo r example, circumstances featuring an extraordinarily 
large number of product types and cases of extrem e complexity. The interpretation of special 
circumstances is practice-based, and the same st andards also apply to the scenario where the period 
of investigation is extended to 18 months. 
5. Pursuant to WTO rules and China’s Antidum ping Regulations, in the current anti-dumping 
investigation practices of China, one single case involves the investigation on only "one single 
product". In the process of investigation, investigatin g authorities need to identify "like product", i.e. 
to decide whether the product under investigation is  a like product of the product sold domestically in 
the exporting country, and whether the product unde r investigation is a like product of the product 
China produces domestically.  
6. Industry injury investigations of anti-du mping and countervailing cases involving agriculture 
products are conducted by the Ministry of Commerc e together with the Mini stry of Agriculture. The 
role of the Ministry of Agriculture is to coordi nate with the Ministry of Commerce in conducting 
investigation and collecting related evidences, which will not result in  substantial changes to the 
procedure and results of the investigation. 
Question: Chinese Taipei
 
The report states that "anti-dumping complaints may be brought to the relevant ministry [MOFCOM] 
in writing, by any domestic industry, natural or legal person or relevant organiza tion, on behalf of the 
domestic industry."  It would appear, however, that a very high proportion of anti-dumping 
investigations have been filed by Chinese national enterprises or companies that are beneficiaries of 
government subsidies. 
i) Would China please explain how its domestic industries’ pricing and market 
conditions can be validated as being fair in the course of determining that such 
industries have suffered injuries as a result of the dumping of products on the Chinese 
market from abroad? 
ii) Specifically, how does the investigating au thority separate out the pricing effects of 
the subsidies in its determination of causation? WT/TPR/M/161/Add.3 
Page 98  
 
Answer: 
China does not agree with the assertion that "a very high proportion of anti-dumping investigations 
have been filed by Chinese national enterprises or companies that are beneficiaries of government 
subsidies", as said in the question. 
According to China’s Price Law, the Chinese government only practices government-pricing or 
government guidance pricing on a very limited number of products that have great bearings on 
national economic development and people’s livelihood , or that are rare resources or are of the 
nature of natural monopoly, and on important public utilities or services concerning public interest. 
The prices of all other products and services are market  determined. Please refer to Annex 4 to the 
Protocol on the Accession of the People’s Republic  of China for a complete list of products and 
services subject to government-pricing or governme nt guidance pricing. The Chinese government 
does not intervene pricing of products and services not  included in the list. China’s current price 
policies do not affect the market development of do mestic industries, and bear no relations to the 
determination of injury in anti-dumping investig ations. As a matter of fact, Chinese domestic 
industries have already been highly market-oriente d. Enterprises that have applied for anti-dumping 
investigations do not receive any government subsidy.  In addition, anti-dumping investigation as a 
remedy measure is not related to the i ssue of whether there is subsidy or not. 
Question:  EC
 
Shipbuilding  
As indicated, the manufacturing sector has been b ased on investment in export-oriented, capital-
intensive activities, including through government assi stance and public investment.  The result is that 
manufacturing, especially export-oriented manufactur ing, has developed more rapidly than other 
sectors. This is particularly true regarding shipbu ilding where China now has a market share of more 
than 15% world-wide in terms of new orders expressed by CGT.  
China is the third largest shipbuilder in the wo rld with production (completion) of more than 
4 millions CGT in 2005 in comparison with 1.1 milli on CGT in 2000. China has very ambitious plans 
to become the world's largest shipbuilder by 2015.  
• Could China provide information on the shipbuilding development plans both in 
terms of capacities and support measures? 
• Does China intend to use direct or indirect support measures (such as tax breaks, 
exemption from business income taxes, pref erential policies for exports of sea-going 
ships, exemption for new ship-leasing institu tions from paying business taxes for at 
least five years, and reduced business tax rate)? 
Answer: 
In the development of China’s shipbuilding industr y, investors include enterp rises with various forms 
of ownership, such as SOEs, private enterprise s and FIEs, while the government provides guidance 
through laws and regulations. China always believes that the shipbuilding industry, like others, 
should be decided by the market and should involve no direct administrative interference from the  WT/TPR/M/161/Add.3 
 Page 99 
 
 
government. However, it is the responsibility of th e government to require shipbuilding enterprises to 
be qualified for basic and necessary conditions for pr oduction with a view to ensure the quality and 
safety of the ships and meeting environment prot ection requirement. At present China is carrying out 
sift of low-quality ships and shipbuilding ent erprises lacking basic production conditions. It is 
predicted that by 2010 China’s shipbuil ding capacity will reach 23 million CGT. 
Support measures from the Chinese government to th e development of the shipbuilding industry will 
take into full consideration of the di sciplines of the relevant WTO agreements. 
Question: 
Singapore  
III Trade policies and practices by measure 
(4) Measures affecting production and trade – competition policy 
With reference to paragraph 243 of page 139  of the WTO Secretariat Report (WT/TPR/S/161), 
Singapore notes that the China’s proposed compre hensive competition law, the Anti-Monopoly Law, 
is expected to ensure non-discriminatory treatment of private enterprises vs state-owned enterprises 
throughout China; address the challenges posed by  administrative and state monopolies and other 
anti-competitive arrangements; and ensure conti nuing non-discriminatory treatment of foreign 
corporations operating in China.  Would China be ab le to provide a concrete date for the adoption of 
this comprehensive competition law? 
Answer: 
The Anti-Monopoly Law has been put on the legisl ation agenda of the Standing Committee of the 
National People’s Congress for 2006. The review of the draft law in the National People’s Congress 
is proposed to start in August 2006.  
Question: 
South Africa  
Paragraph 98 (page 92):"Plants and their products also  require sanitary health  certificates issued by 
the appropriate authority in the country of origin". 
6. Does this refer to the need fo r a phytosanitary certificate, or to some other certificate issued in 
terms of Codex alimentarius standards?  Do th ese refer to both plant and animal products? (Plant 
Health (phytosanitary) inspectors issue only phytosanitary certificates.) 
7. Do the 20 days for issuance of permits exclude  the timeframes needed for Pest Risk Analysis 
(PRA)? 
8. Could the PROC indicate the approximate timeframe for their PRA process? 
Answer: 6. Regarding certificates, according to the Quar antine Law of the People’s Republic of China 
on the Entry and Exit of Animals and Plants and its implementation regulation, plants and their WT/TPR/M/161/Add.3 
Page 100  
 
products and other products s ubject to quarantine inspection shall be accompanied with 
phytosanitary certificates issued by the sanita ry and phytosanitary inspection authorities of the 
country/  region of origin for entering the territory of China by means of trade, scientific and technical cooperation, exchange, presents or aid.  
7 & 8. The timeframe for the issuance of permits  is 20 days, excluding the timeframes needed for 
inspection by experts and risk analysis. 
Question: 
Argentina
 
12. En la página 107, párrafo 85, China me nciona que actualmente todas sus normas son 
compatibles con las normas OMC. ¿Debemos ente nder acaso que China no posé en absoluto normas 
incompatibles con las normas de los Acuerdos MSF y el OTC? 
13. En la página 107, párrafo 86 China menciona que un gran número de Organismos participan 
en la elaboración de reglamentos técnicos. Lue go menciona a la AQSIQ, la Comisión Nacional de 
Desarrollo y Reforma, la Administración General de  Aduanas, la Administración Estatal de Productos 
Alimenticios y Farmacéuticos y diversos Ministerio s. ¿Para una mejor transparencia, podría China 
enumerar todos los organismos que emitan normas y reglamentos técnicos relacionados con el 
comercio de bienes? 
14. En la página 112, párrafo 97 se menciona que  China mantiene acuerdos bilaterales con países 
sobre su sistema de inspección de exportaciones de carne, que permiten las importaciones de carne de 
proveedores aprobados de estos países. Podría Ch ina informar con cuales países se han firmado 
acuerdos bilaterales de inspección? Asimismo podría  China dar a conocer los criterios y requisitos 
que se tienen en cuanta para la firma de dic hos acuerdos bilaterales?, han sido dicho acuerdos 
notificados a la Secretaría de la OMC? En caso de que no se hayan notificado, cuando cree China que 
podría notificarlos? 
15. La normativa de prohibición al ingreso de pr oductos originados de Argentina debido al brote 
de aftosa se aplica a todos los productos de animal es artiodáctilos, sin especificar productos que no 
conllevan riesgo de transm isión de la enfermedad debido al trat amiento que han sufrido en el proceso 
de elaboración (carne termoprocesada o productos láct eos).  Hasta la fecha no ha habido una respuesta 
oficial sobre los productos lácteos con acceso perm itido.  Qué nivel de riesgo utiliza China para 
determinar el riesgo en el ingreso de productos an imales?  Sigue China los lineamientos de la OIE, 
relacionadas a las enfermedades animales y a los pr oductos derivados o tiene  un nivel de protección 
más estricto? En este último caso, tiene base científic a el nivel más estricto de protección? Es aplicado 
en conformidad con el nivel local de protección o es más estricto que el nivel local de protección? 
16. China ha detenido embarques en los puertos de acceso debido a infracciones a las normas 
sanitarias o estándares de higiene y consecuenteme nte elimina del registro de establecimientos 
aprobados a los establecimientos exportadores.  Sin embargo, no notifica las detenciones en tiempo y 
forma, de manera de poder consta tar, evaluar y/o poder solucionar la causa de la contaminación o 
infracción. China tiene pensado establecer un mecanismo de notificación más previsible y 
transparente que le dé tiempo suficiente al af ectado para que pueda tomar los recaudos del caso? 
17. China ha publicado estándares c on tolerancia 0 para Salmonella sp. y otras bacterias en carnes 
y se han detenido embarques por estas normativas en los puertos de acceso. Tiene China estudios  WT/TPR/M/161/Add.3 
 Page 101 
 
 
científicos que acrediten la necesidad de tener un grad o de tolerancia tan elevado? Aplica China dicha 
tolerancia a su producción y comercialización de productos similares dentro del territorio? . China 
considera posible la eliminación total de la contaminación de determinadas bacterias?  Que 
mecanismos utiliza para determin ar que el producto doméstico cump le con estos requerimientos de 
tolerancia 0? 
18. Para poder exportar productos cárnicos a China,  los establecimientos deben estar registrados 
ante CNCA.  El proceso de registro no es transparen te ya que es difícil determinar si CNCA aprobará 
solamente los establecimientos inspeccionados in  situ o inspeccionará una muestra de los 
establecimientos y de acuerdo al resultado extenderá la aprobación a los establecimientos propuestos.  
Por otro lado, el proceso de registro ha demostrado se r lento (ya que se debe coordinar la visita al país 
con meses de anticipación), caro (se debe pagar la misión de registro sin poder determinar de 
antemano si se aprobaran un número determinado de plantas o el sistema en su conjunto), una vez 
realizada la visita es difícil estimar el tiempo necesario para la elaboración de los informes, y obtener 
la aprobación del número final de establecimien tos aprobados. ¿China debe inspeccionar todos los 
establecimientos in situ previo al registro?  De no ser necesaria la inspección de todas las plantas, que 
requerimientos utiliza para aprobar el sist ema de inspección de el país exportador? 
Answer: 
12. With regard to the compliance of China’ s SPS measures with relevant international 
standards, China implements strenuously the WTO SP S Agreement, including especially its principles 
of harmonization with inte rnational standards and sc ientific basis. China formulates its SPS measures 
on the basis of international standards; and wh ere there are no international standards, China 
formulates relevant measures based on risk analysis.  
13. A full list of government bodies involved in the formulation of technical regulations is 
provided in WTO document G/TBT/2/Add. 65. 
14. The bilateral agreements referr ed to in Paragraph 97 of the Report are bilateral protocols on 
import and export of meat and me at products China has signed with its trading partners. Currently, 
China has concluded such bilateral inspection, qu arantine and sanitary protocols with some dozen 
countries including Argentina. In signing such prot ocols, China mainly takes into consideration the 
following elements: veterinary sanitation and publ ic health related legislation and organizations, 
veterinary service system, quality administration system, product production models, safety and 
health control system, residue monitoring system, animal disease control and monitoring schemes, 
etc. China didn’t notify them to the WTO becaus e we believe that we are not obliged to make 
notifications on this type of protocols under SPS Agreement.  
15. Regarding the quarantine policies on foot and m outh disease, in the wake of the outbreak of 
foot and mouth disease in Argentina in January 2006,  China only closed market to the exports to 
China of artiodactyls and their products originated from the epidemic stricken areas of Argentina 
north to the 40 degrees South Latitude but not produc ts originated from the non-epidemic stricken 
areas of Argentina south to the 40 degrees Sout h Latitude. Therefore, China has applied regionalized 
administrative measures on the foot and mouth epidem ic of Argentina, which is in line with relevant 
provisions of the WTO and OIE on regionalizing th e epidemic-stricken area, and China didn’t ban the 
import of all artiodactyls and th eir products originated from Argentina as being alleged.  WT/TPR/M/161/Add.3 
Page 102  
 
The issue of Argentinean dairy exports such as chee se and milk protein concentrates to China is being 
evaluated by our experts. The outcome of the assessm ent will be provided to  the Argentinean side 
upon completion.  
16. China maintains inspection and quarantine examination on the entry of meat, meat products 
and other animal products pursuant to relevant Ch inese legislation and standards. According to 
relevant laws and regulations, products with a safety  problem shall be requested to be shipped back 
or be destroyed. Those enterprises whose exports to  China have been detected  to have major sanitary 
and quality problems or to have had repetitious viola tions due to management  deficiencies of the 
enterprises shall be suspended from exporting to China and be requested to take effective corrective 
measures so as to ensure the safe ty of their future exports of me at and meat products to China and 
safeguard the health of the people. China inform s the exporters involved in written form at an 
appropriate time (usually via the Embassy in China of  the relevant country). In order to resume their 
exports to China, relevant enterprises must notify  the Chinese side of the measures taken to address 
the found problems. Export will be resume d once relevant requirements are met. 
China is willing and ready to enhance SPS coopera tion with Argentina and other trade partners in a 
bid to improve further information notification and sharing. We would like to urge Argentina to 
strengthen supervision and administration over its ent erprises that export meat and meat products to 
China, and improve inspection on and certification issuance to meat and me at product exports to 
China so as to ensure the safety and quality of such exports to China. 
17. Regarding the issue of zero-tolerance for sa lmonella, Food Hygiene La w of China prohibits 
the production and distribution of food containing pathogenic parasites or microorganism. Chinese 
standards regarding the containment of pathogens such  as salmonella in meat and meat products not 
only have the legal basis of relevant provisions in the Food Hygiene Law of China, but also refer to 
relevant provisions and standards of other countri es. The same standards apply to both domestically 
produced products and imported products. 
18. Regarding the registration of meat and me at products exporting companies, China requires 
companies that export food products to China to register with competent Ch inese authorities, which is 
in line with the SPS agreement and international  practices. China has set up a standardized and 
transparent processing procedure. Following is some  specific information. 1) Import registration 
procedure: Certification and Accreditation Admini stration of China (CNCA) administers import 
registration in accordance with the Measures for Administration of Hygiene Registration of Foreign 
Manufacturers of Imported Food. As a WTO member , China has notified the SPS Committee of WTO 
of this Rule. The Measures prescribes clearly the cr iteria that foreign manufactures have to meet in 
order to register, the procedure of registrati on application and application processing, etc. CNCA 
will first organize experts to review the documents submitted by the applying country or region. If 
relevant criteria are found met after the review, an examination and evaluation team will be sent to make field study on recommended foreign manufacturers and put together a report to CNCA. CNCA 
will then have the report reviewed by experts and info rm the competent authority of the country or 
region in question for feedbacks on the report. Ba sed on the opinions and feedbacks of the relevant 
competent authority of the country of origin, CNCA will then finalize the examination report and 
determine the list of foreign manufacturers that succeed in the registration and notify the relevant 
competent authorities accordingly. 2) Import regis tration approach: evaluation of the food hygiene 
control system of an exporting country is conducte d mainly through the examination of documents 
combined with field visits to randomly selected  manufacturers rather than through individual field 
examinations over each and every manufacturer. Whet her a company can succeed in its registration  WT/TPR/M/161/Add.3 
 Page 103 
 
 
in China depends on whether its safety and hygi ene conditions comply with relevant laws and 
regulations of both China and its own country, wh ether the food hygiene control system of the 
exporting country can secure the trust of the compet ent Chinese authority, and the track record of the 
manufacturer in ensuring the safety of Chinese cons umers using the imported products. 3) Fee: there 
is no fee charged on import registration. In li ght of the potential unpredictability of local 
transportation conditions in the ex porting country, the local transportation for the field study will be 
the responsibility of the government of the exporting country or its designated entity.  
Question:  
Bolivia  
Medidas Sanitarias y Fitosanitarias. 
Capítulo III, inciso 2),  ix),  d)  
Párrafo 96, ¿Cómo se puede manejar un sistema cuar entenario de entrada y salida de productos? En 
cuánto aumenta este requisito el costo? ¿En qué cons iste la Ley sobre salud en frontera y cuál el costo 
que demanda? 
Párrafo 98, menciona que desde el pedido del permiso de introducción del producto transcurren 
20 días ¿Cuando sale el permiso, está obligado el importador a cumplir con el periodo para la 
cuarentena, según el producto? Asimismo, cuánto ti empo requiere la oficina local de la CIQ para 
procesar la solicitud? 
Answer: 
In accordance with the Chinese legislation, imports  and exports subject to mandatory inspection and 
quarantine have to be inspected by the competent inspection and quarantine authorities. Inspection 
and quarantine fees are charged pursuant to Me asures for Charging Entry-Exit Inspection and 
Quarantine Fees.  
Frontier Health and Quarantine Law of the People' s Republic of China is available at the SPS 
Enquiry Point. 
Question:  
Costa Rica  
16. ¿Las competencias de la Administración Esta tal General de Supervisión, Calidad, Inspección 
y Cuarentena (AQSIQ) tienen que ver con otras instituciones de gobierno? ¿Podría explicarse en 
mayor detalle la naturaleza de este modelo institucional? 
17. ¿Acepta China el reconocimiento de "zonas libres o de escasa prevalencia de plagas y 
enfermedades" conforme el Articulo 6 del Acuerdo sobre Medidas Sanitarias y Fitosanitarias o 
maneja únicamente el concepto de "país libre de plagas y enfermedades"? 
18. ¿Aplican los reglamentos técnicos, ya sean n acionales, sectoriales, locales o empresariales, a 
empresas bajo algún régimen de atracción  de Inversión Extranjera Directa? WT/TPR/M/161/Add.3 
Page 104  
 
19. ¿Podrían citarse los países con los que China ha firmado acuerdos bilaterales en materia de 
inspección sanitaria y fitosanitaria para facilitar la s exportaciones de carne de éstos hacia China? 
¿Responden éstos a un acuerdo de e quivalencia o al reconocimient o de determinados sistemas, 
procesos o tratamientos? 
20. ¿Cuáles son los criterios para definir el ti po de inspección sanitaria y fitosanitaria en frontera 
en productos destinados a la importación en Chin a?  ¿Conoce el exportador de previo como será 
inspeccionado su producto cuando vaya a ingresar a China? 
Answer:  
16. AQSIQ is a ministerial-level government agency directly under the State Council mandated 
by law to be in charge of quality supervision, in spection and quarantine. A ccording to law, AQSIQ 
coordinates and consults with other governme nt agencies in fulfilling its law-mandated 
responsibilities. For example, AQSIQ consults and communicates with other relevant government 
bodies when formulating rules so as to ensure the capturing of the concerns of relevant government 
agencies and harmonization with rules formulated by other government agencies. In addition, the 
State Council has agreed to the establishment of  a national TBT and SPS inter-agency coordination 
mechanism for ensuring the harmonization a nd unification of China’s various TBT and SPS 
measures.  
17. As for whether China recognizes the concept of  "pest- or disease-free areas and areas of low 
pest or disease prevalence", China, as a WTO memb er, abides by the provision on pest- or disease-
free areas and areas of low pest or disease prevale nce as contained in Article 6 of the WTO SPS 
agreement, and makes determination of such areas based on the application and the accompanying 
evidence provided by the exporting country, risk analysis as well as field visits. 
18. Regarding the applicability of China’s standards  to foreign invested companies, according to 
the Standardization Law of China, compulsory standard s apply to all enterprises registered within the 
territory of China, thus including  foreign invested enterprises.  
19. Regarding bilateral inspection and quarantin e protocols on meat and meat products China 
has signed with other countries, currently China has  entered into bilateral inspection, quarantine and 
sanitary protocols on import and export of meat a nd meat products with some dozen countries 
including Argentina, Brazil, Chile, Australia, New Zealand etc. In signing such protocols, China 
mainly takes into consideration the following el ements: veterinary sanitation and public health 
related legislation and organizations, veterina ry service system, quality administration system, 
product production models , safety and health control system , residual monitoring system, animal 
disease control and monitoring schemes, etc., whic h is in line with international practices. 
20. China determines the type and level of SPS border measures based on th e assessment of risks 
of related products in spreading plant or animal ep idemics. Major factors to  be considered include 
epidemic situation of the country or region of origin of the product in question, the nature of the imported products (e.g. animals, plants, products thereof, germ pl asm, un-processed animal and plant 
products, processed animal products and processing met hods), the usage of su ch products, packaging 
(bulk cargo or not), transportation means, and tra ck record of compliance with  relevant rules etc.  
The same SPS examination applies to the same imports . Exporters can obtain relevant information via 
China’s SPS Enquiry Point or through its Chinese importers.  WT/TPR/M/161/Add.3 
 Page 105 
 
 
Question: 
Colombia  
POLITICAS Y PRACTICAS COMERCIALES, POR MEDIDAS Introducción  
Se afirma que el porcentaje de normas nacionales que adoptan estándares internacionales se mantiene 
en un 32% desde el año 2000. Así mismo se sostiene que los procedimientos de examen y aprobación 
en frontera no son claros y depende n de un gran número de leyes. ¿Q ué medidas esperan tomarse para 
mejorar los procedimientos en frontera? ¿En que consisten esencialmente los problemas en frontera?  
Answer:  
China implements entry-exit SPS examination bas ed on a series of laws and regulations. For 
example, SPS examination of the entry and exit of food of animal or plant origin is based on the Law 
on the Entry and Exit Animal and Plant Quarant ine and Food Hygiene Law. These laws are not 
overlapping with one another. In terms of impl ementation, China’s entry-exit inspection and 
quarantine authority is the sole competent agen cy, and has established transparent examination and 
approval procedure. In order to speed up the in spection and quarantine process, China has launched 
an electronic application and clearance system. China w ill be ready to provide further information in 
this regard. 
Question: Colombia
 
ix. Normas y otras prescripciones técnica. 
A) En el numeral 84 del literal a), se informa que en China se han promulgado varios 
reglamentos en materia de certificación obligat oria de productos, armonizando así las normas en 
materia de certificación para las mercancías impor tadas y las de producción nacional, incluidos un 
catálogo de productos sujetos a certificación ob ligatoria, reglamentos técnicos, normas y 
procedimientos de evaluación de la conformidad, marcas y derechos. ¿Cuántos reglamentos técnicos 
se han notificado a los miembros de la OMC? ¿Para  qué fecha está previsto que termine el proceso de 
armonización de las normas en materia de certificación para las mercancías importadas y las de producción nacional. 
B) En el numeral 85 del literal a), se afirma que en el Comité MSF los miembros han planteado 
su preocupación por la aparente utilización por China de MSF para prohibir las importaciones de 
productos afectados de determinados países en luga r de limitarse a las regiones afectadas de esos 
países y porque al parecer ese país no ha notificad o algunos reglamentos en materia de MSF desde 
2002. Sobre este último aspecto China ha manife stado que cree que los Miembros no han entendido 
correctamente las notificaciones de China. Al respecto, ¿Es criterio de China prohibir las 
importaciones de productos afectados por país en vez de hacerlo por región? ¿Cómo llegó China a la 
conclusión de que los demás miembros no han entendido correctamente sus notificaciones? ¿Ha 
tenido China en cuenta las observacion es de otros países sobre este asunto? WT/TPR/M/161/Add.3 
Page 106  
 
C) En el numeral 86 del literal b), se in forma que un gran número de organismos 
gubernamentales participan en la formulación de regl amentos técnicos. ¿Es posible que ante el gran 
número de organismos gubernamentales que trabajan  en la formulación de reglamentos técnicos, 
algunos de ellos no se hayan notificado? ¿Si alg unos no se han notificado, habrá posibilidad de 
comentarios por parte de otros países miembros? 
D) En el numeral 88 del literal b), se afirma  que en cada una de las categorías de normas 
nacionales, sectoriales y locales hay normas volunt arias y normas obligatorias. ¿Es política de la 
China contar con normas obligatorias y reglamentos técnicos o se ha pensado en sustituir las normas 
obligatorias por reglamentos técnicos? 
E) En el numeral 90 del literal b), se informa que según la SAC el Gobierno de China ha 
promovido la adopción de normas internacional es desde 1994. Además, que la SAC comenzó un 
proceso de examen de las 21.000 normas nacionales en abril de 2004 para comprobar su pertinencia 
con respecto a los requisitos del mercado y su conformidad con las normas internacionales. Las 
normas que no cumplieran estos criterios serían m odificadas o dejarían de aplicarse. ¿Qué tan 
adelantado va ese proceso? ¿Para cuándo está prevista su terminación? 
F) ¿Cuál es la política de procedimiento de evaluación de la conformidad para productos 
regulados que aplica China? ¿Se basa en normas internacionales de evaluación de la conformidad? 
Answer:  
A) China’s compulsory certification system represen ts an effort made by China to fufill its WTO 
accession commitments, including the commitment on natio nal treatment. This system is in line with 
WTO rules and relevant international practices. The compulsory certification system came into effect 
as of 1 August 2003, applying equally to both im ports and domestic products. China has been making 
strenuous efforts to live up to its WTO commitmen t on transparency, and has notified the WTO of 211 
TBT measures, including the certification system on fi rearms, within less than 5 years after accession. 
B) China has been fulfilling its WTO transparen cy obligation seriously. We notified the WTO of 
140 SPS measures that were already effective prior to  accession. Starting from 2002, we have made 
notifications on another 97 newly  promulgated or amended SPS measures according to relevant 
WTO rules. Therefore, it is not true at all that "China has made almost no new SPS notifications to 
WTO Members since 2002".  
Regarding the issue of regionalization, China abides by relevant provisions of the WTO SPS 
Agreement and relevant international standards. Ch ina welcomes application for area-specific 
treatment pursuant to Article 6 of the WTO SP S Agreement and provision of necessary evidences and 
opportunities for field inspection for China to ma ke evaluation and determination accordingly. 
C) The Chinese government attach es great importance to its SPS related transparency obligation 
and has scored noticeable achievements since WT O accession. With regard to the government 
organizations participating in the formulation of t echnical regulations, our understanding of the WTO 
SPS Agreement is that it provides for no notification obligation in this regard. 
D) According to the Standardization Law of China, China’s national  standards, sectoral 
standards and local standards can all be class ified as either compulsory standards or recommended 
standards. Compulsory standards are requirements that must be met and form an important part of 
technical regulations of China. The compulsory st andards suit well the specific national situations of  WT/TPR/M/161/Add.3 
 Page 107 
 
 
China. China has notified WTO of 210 compulsory na tional standards since accession. China has no 
plan to remove compulsory standards. 
E) From 2004 to September 2005, China reviewed all the national standards in a bid to better 
implement the TBT Agreement and improve harm onization between national standards and 
international standards. We abolished 2513 standards in this process, accounting for 11.6% of the 
total and set up the objective of completing the amendment to 9536 national standards in the coming three years, accounting for 44.2% of the total. China will notify the WTO of the above-mentioned 
amendments if they fall in the notificat ion requirement of the TBT Agreement. 
F) China attaches great importance to and par ticipates actively in the formulation of 
international standards regarding the procedure of  conformity assessment by ISO/IEC and other 
international organizations. While formulating Ch ina’s own conformity assessment procedures, we 
have been referring to and incorporating the guiding principles of ISO/IEC and the conformity assessment standards of IEC on electric appliances and electronics.  
Question:  
India Additional
 
Q.5 The Indian Automotive Parts and Components Industry that has a growing export market in 
China faces constraints in the form of NTBs.  In sp ite of the agreement on technical barriers to trade 
(TBT), additional tests in Chinese laboratories are required for vehicles and parts.  Such tests are 
mandatory even if exporters produce certified test s results supported by certificates of quality from 
reputed international quality management firms.  W ould China take steps to remove this barrier and 
recognize the certificate issued by reputed international quality management firms? 
Answer:  
Auto and auto parts are in the catalogue of produc ts subject to compulsory certification pursuant to 
China’s compulsory certification system. To conduct  compulsory certification is very necessary in 
order to protect the safety and health of consumers,  and is in compliance with the principles of the 
TBT Agreement and established international prac tices. China’s certification and accreditation 
authority is willing to enhance communication and cooperation with its counterparts in other 
countries in the world including India, and to phase in cooperation on the mutual recognition of 
certification.  
Question: Thailand
 
10. (2)(ix)(d) SPS measures   
Para 98:  The report states that the importation of an imals, plants and their products require sanitary 
health certificates issued  by the appropriate authority in the country of origin.  Are certificates 
required for every import permit application?  Regard ing import permits, in the case of simultaneous 
importation of several kinds of products that require import permits, is one im port permit required for 
each product, or is one permit per importation sufficient? WT/TPR/M/161/Add.3 
Page 108  
 
The report also indicates that import permits are valid for 6 months during the calendar year of 
issuance.  We would like to know whether any flexib ility exists for permits that are applied for and 
granted at or near the end of the calendar year.  For example, can/will such permits be automatically 
extended for the remainder of the 6 month period that falls in the new calendar year, or must 
applications be resubmitted at the beginning of the new calendar year for all cases?  We would also be 
interested in knowing whether it is possible for local CIQs to issue import permits directly, instead of sending applications to AQSIQ in Beijing for processing, which normally takes no less than 30 days. 
Answer: 
1. According to the Quarantine Law of the People’s Republic of China on the Entry and Exit of 
Animals and Plants and its implementation regula tion, phytosanitary certificates issued by the 
sanitary and phytosanitary inspection authorities of the country or region of origin are required for 
the entry into the territory of China by means of  trade, scientific and technical cooperation, exchange, 
presents or aid of plants and their products and ot her products subject to quarantine inspection.  
2. Products subject to the requirement for en try-exit quarantine permit for animals and plants 
must obtain the quarantine permit for the entry of animals and plants prior to being imported into China.  
3. Quarantine permit for the entry of animals and plants is valid for six months as of the 
effective date, and may carry over into the next year.  
4. Quarantine permit for the entry of animals and plants is issued by the General Administration 
of Quality Supervision, Inspection and Quarantin e (AQSIQ). As of November 2004, AQSIQ has 
launched the use of an electronic application syst em which allows application, examination and 
approval to be conducted on line and has greatly shortened the processing time.  
Question:  
Indonesia
 
On the import policy, China has some products whic h are subject to import prohibition and have been 
notified under Article XX of the GATT 1994 (General  exceptions), among others , products of animal 
origin, opium, mineral products, rubbers, chemical, ra w hides, skin and leather, clothing, ash of 
precious metals and base metals. As prohibition under Article XX (general exception) could only be 
taken only for specific purposes (public morals; human,  animal and plant health, environment, patent 
and trade marks etc), Indonesia is of the view th at some of those prohibited products could not be 
notified under Article XX of the GATT 1994, such as rubber, clothing, ash of precious metals and 
base metals. We seek clarification on this policy. 
Answer: It is scrap rubber, scrap or used clothes that are under import prohibition for the sake of environment 
protection, human and animal health etc.   WT/TPR/M/161/Add.3 
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Question:  
South Africa  
Paragraph 20 (Page xiii) "nevertheless, state trading is maintained to manage trade for some products, 
as are price controls for some ... and direct s ubsidies has been introdu ced to agriculture." 
Which agricultural products are affected by state tr ading and price controls? We note that China has 
not yet submitted any notifications under the Agreem ent on Agriculture and would like to know when 
these notifications would be forthcoming? 
Answer: 
Agricultural products subject to state trading are rice, wheat, corn, cotton, sugar and soybean.  
Agricultural products subject to state guidance pr ice are rice, wheat, corn, cotton and soybean. 
China submitted its notifications on domestic support, on export subsidies, on TRQ regime as well as 
TQR implementation under the Agreement on Agri culture since accession. The notifications on 
quantitative restrictions China submitted annually  to the Committee on Market Access since 
accession is also relevant and could be referred to  when information on state trading is needed. 
Question:  
South Africa  
Paragraph 23 (page 67):  "In addition, 55 tariff lines are subject to tariff rate quotas, including in HS 
Chapters 10 (wheat and meslin, maize, rice), 11 (cereal flours other than wheat and meslin, cereal groats), 15 (soybean oil, palm oil, rape, and must ard oil); 17 (cane or beet sugar), 31 (mineral 
chemical fertilizers), 51 (wool, carded or combed), and 52 (cotton)".  Paragraph 25 (page 169):  "With 
the exception of cotton, imports under TRQs have, in general, been low during the period under 
review; most TRQs are generally unfilled (Table AIV.1)".  
Could China state reasons for the low fill rate of these TRQ's?  
Answer: During the period under review, TRQ fill rates va ry among different products under the TRQ regime. 
Some were very much high, like cotton as said in  the Secretariat report, while others were low. 
Reasons of the low fill rates were that the pr oduction and market supply were abundant and the 
domestic prices of these TRQ products were lo wer than the world average prices.  
Question:  
South Africa
 
Paragraph 24 (Page 67):  China's applied MFN ta riffs: "...Of the 0.3% (22 tariff lines) that has ad 
valorem  rates of 60-65%, how many are for agricultural products and what products are involved? WT/TPR/M/161/Add.3 
Page 110  
 
Answer: 
Eight 8-digit HS tariff headings are subject to  ad valorem rates. They are 02071200, 02071411, 
02071419, 02071421, 02071422, 02071429, 05040021, 22030000. 
Question:  
South Africa
 
Could China indicate which grains are subsidised, as well as details of the subsidy programs for each 
of these grains? 
Answer: 
As for domestic support for agricultu ral products, China does not maintain any subsidy that should be 
calculated into "total AMS". Only some products  enjoy a small sum of fund which belongs to "de 
minimum". Please refer to China’s domestic s upport notification for detailed information.  
Question:  
Thailand  
Para 26:  Is the process of quota allocation and re-a llocation conducted at the national level, or by 
ADRC and MOFCOM agencies at the provincial/local level?  
Answer: 
Quota allocation and re-allocation are conducted at th e national level, with wheat, maize, rice and 
cotton by NDRC and sugar, wool and wool top by MOFCOM.  
Question:  
Thailand  
Para 27: Under China’s Protocol of Accession, agricultural products ar e subject to import by 
STEs, including maize, rice, wheat, vegetable oil, and sugar. Does China plan to relax the supply and 
price control of those products in the near future?  
Answer: From 1
st Jan. 2006, vegetable oil is no longer subject to state trading nor TRQ system any more. As 
for the rest, China has no intention to abolish the TRQ so far.  
Question:  
Thailand  
Para 28: Which agricultural products are subject to  automatic licenses?  Does China intend to expand 
the provision of automatic licenses to other imports in the near future?   WT/TPR/M/161/Add.3 
 Page 111 
 
 
Answer: 
In 2005, only some chicken products (02071100, 02071200, 02071311, 02071319, 02071321, 
02071329, 02071411, 02071419, 02071421, 02071422, 02071429, 05040021) are subject to automatic import licensing.  
Currently, China has no plan to expand the provisi on of automatic licenses to other agricultural 
imports.  
Question:  
Thailand
 
Para 37: Since becoming a member of the WTO, China has not yet notified  its support for the 
agricultural sector, although its Agricultural Law of  2002 provides for several forms of such support, 
including direct subsidies for grain producers. Could China please explain how these subsidies are 
categorized according to WTO regulations, and wh en China intends to notify these supports to the 
WTO? 
Answer: 
China submitted its domestic suppor t notification in Jan. 2006. Please refer to the notification for 
detailed information. 
Question:  
US 
29. In paragraphs 148 and 149 of Chapter III, the report explains that some export quotas, such as 
the export quota on fluorspar, are allocated through bidding.  The report further explains that exports 
subject to quota bidding are, inter alia,  "those involving large amounts of exhaustible natural 
resources; those having a dominant share in the inte rnational market, and their overall export amounts 
are ‘unlikely to be affected by price fluctuati ons’; those whose supply exceeds demand and thus tend 
to be sold at a low price, which may result in anti-dumping actions in other countries; . . . ." 
b. Please explain how each of the three enumerated  categories is consistent with China’s WTO 
obligations. 
Answer: China maintains export quota system pursuant to Ar ticle XX of GATT 1994. In the Secretariat report, 
situations of the system of export quota allocated by way of bidding is enumerated into categories. 
The fact is not that products falling in these cate gories must be subject to export quota by way of 
bidding, but rather that the general purposes of th e system is to avoid price fluctuation in the 
international market, and to avoid low-price natural  resource export disturbing the markets of other 
WTO members. China believes that it abides by the rules, and it is also in the interests of other 
Members by maintaining a stable supply of these products at stable market prices.  WT/TPR/M/161/Add.3 
Page 112  
 
Question:  
US
 
34. In paragraph 183 of Chapter III, the report explai ns that, in recent years, there has been a shift 
in China toward the use of various indirect policy tools to channel resources into certain activities that 
the Chinese government believes are important for China’s continued growth and development. 
According to the report, these tools include not just measures directly affecting trade, such as tariffs 
and other border tax measures, but also administrative directives to cease certain activities, subsidies, 
price controls, as well as indirect measures, such as "guided" credit and tax incentives or 
disincentives.  Does China agree with this assessment?  If not, please explain. 
Answer: 
The direction of the economic policies of the Ch inese government is to have the market play the 
fundamental role and this has always been observed  ever since the launch of the reform and opening 
up process in China. It will still be followed in the future. In the past two decades the Chinese 
government has implemented numerous reform me asures thanks to which a market economy has 
taken the shape, and now the government is pushing forward the perfection of the system. 
Since WTO accession China has paid particular atten tion to the consistency of its policy tools with 
the rules and practices of other mature market econom ies including the rules embodied by the WTO.  
As to the industrial policies, th e Chinese government believes that they are important for the purpose 
of providing guidance for the development of certai n industries while development of these industries 
is no longer subject to government planning and int erference. The policies feature: 1) encouraging 
innovation, 2) strengthening environmental protection and encouraging energy conservation, 
3) further reducing administrative approval by th e government and narrowing the scope of investment 
projects subject to government approval, 4) pus hing forward reforms of SOEs, especially the 
monopolizing ones, transforming the SOEs into co mpanies with multiple shareholders, and breaking 
down monopoly by increasing competition in secto rs like oil, telecom, power, railway, and civil 
aviation, and 5) enc ouraging development of the private sector.  
Question:    
United States II  
18. Paragraph 21 of Chapter III of the report explains that duty exemptions and reductions may 
apply, inter alia , with regard to goods exported out of designated areas.  Are these duty exemptions 
and reductions addressed in China’s finalized but not yet fully translated subsidies notification?  If 
not, please provide the information described in Ar ticle 25.3 of the Subsidies Agreement for this 
program. 
19. Paragraph 21 of Chapter III of the report refers to a number of other duty exemptions and 
reductions.  Are these duty exemptions and reductions addressed in China’s finalized but not yet fully 
translated subsidies notification?  If not, please prov ide the information described in Article 25.3 of 
the Subsidies Agreement for this program  WT/TPR/M/161/Add.3 
 Page 113 
 
 
Answer: 
What the Secretariat Report describes here, "t ariff reduction and exemption for commodities imported 
from and exported to special regions" refers to Article 57 of the Customs Law.  It is stipulated that 
imports from and exports to special regions or by  special industries (companies) or with special 
purposes may enjoy tariff reduction or exemption. The term "special regions" mainly refer to special 
economic zones, coastal and inland cities whic h were opened up, ec onomic and technological 
development zones, high-tech industrial development zones, etc. Please ref er to China’s recent 
subsidy notification for definition of these regi ons. Nowadays, only internal tax reduction and 
exemptions are still available in these regions as indicated in the subsidy notification. Import duty 
reduction and exemptions for these regions have been phased out. 
Question:  
Switzerland  
Local barriers to inter-provincial trade notes that a number of government measures such as budgetary 
constraints on the provinces and the SOEs, fiscal decentralization and the development of SEZs in 
certain provinces, are all factors that may have led provincial governments to increase the use of 
protectionist measures such as licensing, local ta xes and charges, local standards, investment 
approvals, interest rates charged by local ban cs etc. Which measures does the central government 
foresee to remedy to such provincial compartmentation? 
Thailand  
Centre-subnational relations and local barriers to internal trade  
Para 32: How effective have the central government’s  efforts been in reducing local protectionism?  
For example, have they resulted in reducing th e specific fees levied on non-local goods and services 
entering the local market?  We are also interest ed in learning more about sanctions or similar 
measures used to curb the abuse of power by local  governments affecting trade, which is prohibited 
under Article 7 of the "Law Countering Unfair Competition." 
Answer: 
Chinese laws and regulations concerning internal trade and the national uniform market, such as 
Law Countering Unfair Competition and others, all require the free flow of goods among different 
regions and that local protectionism must be bro ken up. Local policies and measures that impede the 
free flow of goods among different regions are against the national laws and regulations and 
therefore should be deemed as "abuse" of th e administrative power and should be corrected 
immediately. Uniform application of the trade reg ime has been further strengthened since China’s 
WTO accession. The submission for record system  for all local regulations and rules, the 
administrative review system established by the La w on Administrative Reconsideration as well as the 
judicial review system as established by the Admi nistrative Procedure Law are all able to remedy 
local compartmentation and curb local protectionism. WT/TPR/M/161/Add.3 
Page 114  
 
Question:  
Japan
 
Q29.  (2) Japanese industry is concerned that Chinese lo cal authorities usually examine the contents of 
technology import/export contracts when applications for registration are made under Article 17 of the 
Regulation on the Administration of Import and Export Technology. Please confirm that the authorities will not examine the contents of contract s with regard to free import/export technology.   
(3) Regarding Article 24 of the Regulation on the Administration of Import and Export 
Technology, Please clarify whether this provision is mandatory or discretional.  Please also indicate whether the liability of the transferor can be waived  by an agreement between the parties concerned, 
as allowed by the provision of Article 353 of the Contract Law. 
(4) Regarding the provision of "liability for th ird party’s infringement" under Article 24 of the 
Regulation on the Administration of Import and Export Technology, does China has any plans to 
revise this provision according to the international trend. 
Answer The Regulation on the Administration of Import an d Export Technology is compulsory. Contracting 
parties should not include in their contract any artic le that is inconsistent  with the provisions 
stipulated in the Regulation. As for article 252 of  the Contract Law, it should be read together with 
article 355 of the law, which stipulates "when contracts of import and export of technology, of 
copyright or of copyright application are subject to  other specific laws or administrative regulations, 
the authority should refer to the specific law or ad ministrative regulations when dealing with these 
contracts." There is no plan to revise the regulation so far.  
Question: 
Japan II
 
Q13. Does China maintain any import quotas ag ainst exports from LDC’s under the current 
preferential tariffs scheme?  
Answer: On 1 January 2005, China comple ted its implementation of the accession commitment regarding 
phasing out import quantitative restrictions. Theref ore, China currently maintains no import 
quantitative restrictions on products imported  from any WTO member, LDCs included. 
Question: 
Australia
 
Q14. We encourage China to provide its notificati ons on support for the agricultural sector as soon 
as possible (para 37 on page 172, and Table AII.3, of WT/TPR/S/161), if it has not done so already.   WT/TPR/M/161/Add.3 
 Page 115 
 
 
Answer: 
China submits its notification on agricul tural domestic support in January 2006.  
Question: Australia
 
Q16. We refer to the introduction by China of new direct subsidies in the agriculture sector 
(para. 20 on page xiii, para 18 on page 1 66 and para 39 on page 174 of WT/TPR/S/161). 
a) We would welcome a more detailed descrip tion of the new support measures implemented 
over the last two years, and an explanati on of the rationale for these new policies. 
b)  We would also appreciate information on plans for introducing additional measures of this nature 
in the future. 
Answer: 
China made its notification on domestic support on agriculture covering 1999~2001 in January 2006. 
Detailed information of the support measures menti oned in the Secretariat rep ort will be included in 
the future notifications in the agriculture sector . The subsidy notification China submitted in 
April 2006 under the Subsidy Agreement could also be  referred to since the notification include also 
quite a lot of information regarding programs in the agriculture sector. 
Question:  
Korea  
8. China has tried to improve its government pr ocurement system by becoming an observer to 
the GPA since 2002 and participating in the APEC Government Procurement Expert Group meeting.  
• Please explain the measures, if any, the Ch inese government has taken to ensure the 
transparency stipulated in Article XVII of  WTO GPA and provide the information on 
the areas of government procurement allowe d for foreign companies, the procedures 
for foreign companies' participation a nd media of announcement for international 
tendering.  
Answer: 
China is not a party to the WTO GPA Agreement,  and has not entered into any multilateral or 
bilateral agreements with international organizations or other countries on the opening of the GPA 
market. However, the Chinese governmen t attaches great importance to the information publicizing 
and transparency of government procurement. Arti cle 3 of the Government Procurement Law of 
China provides that government procurement must  be conducted in line with the principles of 
openness, transparency, fair competition, equ ity and honesty and creditworthiness. Article 11 
provides that information on government procuremen t, except for business secret s, must be publicized 
on the media designated by the authority supervisi ng and monitoring government procurement. The 
authority supervising and monitoring government procu rement here refers to the Ministry of Finance 
of China. The Ministry of Finance has d esignated China Financial and Economic News, WT/TPR/M/161/Add.3 
Page 116  
 
www.ccgp.gov.cn
 and China Government Procurement j ournal as the media for publicizing 
authorized information on China’s government pr ocurement free of charge. Chinese and foreign 
suppliers can have access to information publici zed by the above mentioned designated media and 
are entitled to make complaints about or report any or ganizations that fail to fulfil its obligations to 
the Ministry of Finance as a means to protect th eir legitimate rights and interests. Besides, the 
Government Procurement Law also gives suppliers th e right to make inquiries and raise questions so 
as to better protect their legitimate rights and int erests. Article 51 provides that the supplier can make 
inquires and raise questions to the buyer regar ding government procurement activities and are 
entitled to timely responses from the buyer. Article  52 provides that the supplier can make challenges 
in written form to the buyer regarding relevant proc urement documents, procedure or results that it 
deems detrimental to its own rights and interests within 7 working days as of the date when the 
supplier is aware of or should be aware of such alleged injury. All the above mentioned provisions 
offer strong safeguard to government procuremen t transparency and the supplier’s right to access 
information of suppliers. 
__________