WORLD TRADE ORGANIZATION  
ORGANISATION MONDIALE DU COMMERCE  
ORGANIZACIÓN MUNDIAL DEL COMERCIO  WT/TPR/M/199/Add.1 
28 August 2008 
 (08-4018) 
Trade Policy Review Body 
21 and 23 May 2008 Original: English/Spanish 
 anglais/espagnol  inglés/español 
 
TRADE POLICY REVIEW 
CHINA 
Minutes of Meeting
 
Addendum  
Chairperson:  H.E. Mr. Yonov Frederick Agah (Nigeria) 
 This document contains the advance writte n questions, and replies provided by China.1 
 __________________________________________________________________________________ 
Organe d'examen des politiques commerciales 
21 et 23 mai 2008 
 
EXAMEN DES POLITIQUES COMMERCIALES 
CHINE 
Compte rendu de la réunion
 
Addendum  
Président:  H.E. M. Yonov Frederick Agah (Nigeria) 
 
 Le présent document contient les questions écrites communiquées à l'avance et les réponses 
fournies par la Chine.1 
  __________________________________________________________________________________ 
Órgano de Examen de las Políticas Comerciales 
21 y 23 de mayo de 2008 
 
EXAMEN DE LAS POLÍTICAS COMERCIALES 
CHINA 
Acta de la reunión
 
Addendum  
Presidente:  Excmo. Sr. Yonov Frederick Agah (Nigeria) 
 
 En el presente documento figuran las pre guntas presentadas anticipadamente por escrito, 
junto con las respuestas facilitadas por China.1 
 
                                                      
1 In English and Spanish only./En anglais et espagnol seulement./En inglés y español 
solamente.  
 
    WT/TPR/M/199/Add.1 
 Page 3 
 
  WRITTEN QUESTIONS BY MEMBERS 
 BRAZIL
 
 
1. Please explain the rationale for the levying of export taxes for primary products such as iron, 
copper, nickel and aluminum ores with a view to  reducing exports of highly energy consuming and 
polluting as indicated in paragraph 112 of the Secr etariat’s report (doc WT/TPR/199)? Is there any 
policy relationship between export taxes and domestic supply for industries in China? 
 2. Please explain the 50% foreign-ownership r estriction in vehicle manufacturing, including 
completely built-up units, automobiles for spec ial use, agricultural transport vehicles, and 
motorcycles, as indicated in paragraph 100 of the Secretariat’s report (doc WT/TPR/199)?  
 3. Please provide a definition for "completely bu ilt-up units" and, if available, the corresponding 
HS code. Are "completely built-up units" to be  understood as ready-for-sale automobiles? Are 
"completely built-up units" to be understood as CKD (Completely-Knocked-Down) or SKD (Semi-
Knocked-Down) units? 
 4. Is there a definition for "environmentally friendly" auto manufacturers, as mentioned in paragraph 102 of the Secretariat’s report (doc WT/TPR/199)? If yes, please provide the corresponding 
definition.  
5. Please explain any geographical limitation for the "establishment of new factories in another 
location" being apparently linked to a performance threshold, as mentioned in paragraph 103 of the 
Secretariat’s report (doc WT/TPR/199)?  
BRAZIL - ADDITION
 
 
6. Paragraph 62 of Chapter III of the Report by the Secretariat (WT/TPR/S/199) refers to 
MOFCOM's Provisions on Responding to Anti-dumpi ng Cases Relating to Export Products entered 
into force in August 2006. According to these provi sions, MOFCOM must promptly publish relevant 
information relating to investigations of or res ponses to anti-dumping cases, and the local counterparts 
of MOFCOM must immediately inform relevant enterprises of such information. Could China provide 
an English translation of these Provisions or a summary of its contents?   
 7. Why do agricultural products sold by farmer s directly to consumers are exempt from VAT 
while imports of like products are not? (W T/TPR/S/199 Chapter III.2.iv, Para. 40 and 
Chapter IV.2.iii, para. 20). 
 
8. Regarding Chapter III, paragraph 42, of the Report by the Secretariat (WT/TPR/S/199), could 
China provide a list of the products (in terms of the Harmonised System) that are subject to import 
prohibitions as well as the rules that support such prohibitions?   9. According to Chapter III, paragraph 47, of the Report by the Secretariat (WT/TPR/S/199), 
China may refuse applications for import licenses wh en the justification fo r importation provided on 
the request is "unconvincing". Could China inform what are the requirements that should be fulfilled 
for the request to be considered "convincing"?   10. According to Chapter III, paragraph 131, of  the Report by the Secretariat (WT/TPR/S/199), 
the General Administration of Quality Superv ision, Inspection and Quarantine (AQSIQ) is 
responsible for authorizing agencies to issue certificat es of origin regarding exports of textile products 
enlisted on the Catalogue of Textile  Products Subject to Interim Export Administration. Could China 
inform which entities are authorized  to issue these certificates of origin and also inform what WT/TPR/M/199/Add.1 
Page 4  
 
  authorities are certified to issue certificates of origin for other products when these documents are 
required by importing countries?  
 
MEXICO
 
 Se solicita a China responder a las siguientes pre guntas formuladas con base en lo señalado en el 
documento WT/TPR/S/199  del 16 de abril de 2007 
 
IV. POLÍTICAS COMERCIALES POR SECTORES 
(5) S
ERVICIOS  
(iii) Servicios financieros 
(a) Visión general 
 
- En el párrafo 127 se indica que otra característic a destacable del sector financiero en China es 
la elevada proporción de propiedad y control estatal. Mé xico desearía saber si está prevista una mayor 
apertura para la participaci ón de bancos extranjeros. 
(b) Sistema bancario 
- En el párrafo 150 se señala que sólo pueden solic itar el establecimiento de un banco de capital 
totalmente extranjero (filial) los bancos comercia les extranjeros que hayan mantenido una oficina de 
representación en China durante un mínimo de do s años antes de presentar la solicitud, y cuyos 
activos totales sean como mínimo de 10.000 millones de dólares EE.UU. al final del año anterior a la 
solicitud.  México está interesado en conocer cuáles  son los requisitos para establecer una oficina de 
representación.  
- En el mismo párrafo se hace referencia a que un banco extranjero que desee establecer una 
sucursal deberá tener unos activos totales de 20.000 millones de dólares EE.UU. como mínimo al 
final del año anterior a la solicitud y debe habe r mantenido una oficina de representación en China 
durante dos años como mínimo en la zona en que solicita el establecimiento de su primera sucursal.  
México desearía conocer la razón de que el mínimo  de activos exigido para el establecimiento de 
sucursales sea superior al exigid o para entidades constituidas localment e, teniendo en cuenta que no 
se permite a las sucursales realizar ac tividades comerciales minoristas.   
- En el párrafo 151 se señala que el capital soci al desembolsado exigido como mínimo para el 
establecimiento de un banco financiado exclusivam ente con capital extranjero o un banco conjunto 
chino y extranjero es de 1.000 millones de yuan.  Las sucursales abiertas por bancos financiados 
exclusivamente con capital extranje ro o por bancos conjuntos chinos  y extranjeros deberán tener una 
asignación de 100 millones de yuan como capital de  explotación. México considera que el capital 
mínimo exigido es más elevado que el que se exige en  otros países, y limita el acceso de los bancos 
extranjeros a los mercados. ¿Podría China indicarnos  si tienen previsto reducir los requisitos de 
capital mínimo?  
- En el párrafo 152 se indica que los bancos fi nanciados exclusivamente con capital extranjero 
y los bancos conjuntos chinos y extranjeros podrán  realizar las mismas operaciones comerciales que 
los bancos comerciales chinos, tanto en moneda  nacional como en divisas.  Sin embargo, las 
sucursales de bancos extranjeros no pueden emitir ta rjetas bancarias y sólo pueden recibir depósitos a 
plazo no inferiores a 1 millón de yuan.  Los banc os operacionales de capital extranjero que deseen 
participar en operaciones comerciales en moneda  local deberán llevar en China tres años como 
mínimo y haber sido rentables durante dos años co nsecutivos antes de la solicitud. México desearía 
saber si está previsto flexibilizar  estas restricciones para los bancos financiados con capital extranjero.   WT/TPR/M/199/Add.1 
 Page 5 
 
 
  - En el párrafo 153 se establece que la particip ación extranjera en el capital social de 
instituciones financieras nacionales está sometida a restricciones. De conformidad con las normas 
administrativas sobre la inversión en acciones de in stituciones financieras extranjeras en instituciones 
financieras chinas ninguna institución financiera ex tranjera puede poseer por sí misma más del 20 por 
ciento del capital social de una institución financiera  china.  México está interesado en saber si está 
previsto a corto plazo aumentar la participaci ón del capital social de instituciones financieras 
extranjeras en instituciones financieras chinas. 
- En el párrafo 164 se indica que en noviembre de 2006, el Consejo de Estado promulgó el 
Reglamento sobre la administración de bancos c on financiación extranjera, al que siguieron las 
Normas de la Comisión de Reglamentación Banc aria de China (CBRC) para la aplicación del 
Reglamento sobre la administración de bancos con financiación extranjera. México desearía saber si 
existe un sitio en Internet en donde se puedan  consultar dichas reglamentaciones en inglés.  
(iv) Telecomunicaciones 
(a) Estructura del mercado 
- En el párrafo 221 se hace referencia a que Chin a no tiene aún una ley de telecomunicaciones, 
aunque el Gobierno ha indicado que  los órganos competentes la están redactando. A México le 
interesaría saber si existe alguna fech a para la publicación de dicha ley. 
- En el mismo párrafo se indica que otras reglas básicas para la regulación del sector son el 
Reglamento sobre la administración de empresas de telecomunicaciones con inversión extranjera y las 
Medidas administrativas para la concesión de licencias a empresas de telecomunicaciones, que 
entraron en vigor en 2002. México desearía saber si  existe algún sitio en Internet en donde se puedan 
consultar dichas reglas en inglés. 
- En el párrafo 222 se indica que desde 2005 se han promulgado varias reglamentaciones 
nuevas en relación con el sector.  Entre ellas figura el "Criterio sobre los servicios de 
telecomunicaciones (2005)", que establece normas técn icas y de calidad del servicio, así como los 
criterios que deben cumplir los proveedores de servicios . Al respecto, se indica el sitio de Internet en 
donde se puede consultar dichas reglamentaciones en  chino. México desea saber si existe la 
posibilidad de conocerlas en inglés. 
- En el mismo párrafo se señala que en julio de  2006, el Ministerio de la Industria de la 
Información (MII) publicó también el Aviso sobre el  fortalecimiento de la administración de la 
inversión extranjera en los servicios de telecomuni caciones de valor añadido, en el que se aclara que 
no está permitido a los proveedores de servicios extr anjeros prestar en China servicios de valor 
añadido respecto de los que no se haya concedido licen cia. A México le interesaría conocer cuáles son 
los requisitos para establecer en China una empresa  de telecomunicaciones con inversión extranjera y 
para obtener una licencia para prestar servicios de valor añadido.  
- En el párrafo 226 se menciona que de conf ormidad con los compromisos contraídos por 
China en el marco del Acuerdo General sobre el  Comercio de Servicios (AGCS), se aplican 
restricciones a la participación extranjera (actualmen te, el 49 por ciento en los servicios de línea fija y 
de telefonía móvil).  En la práctica, con la excep ción de los servicios de valor añadido, en los que 
alrededor del 95 por ciento de las empresas son empresas "privadas nacionales" o empresas de propiedad extranjera, la inversión extranjera en serv icios de línea fija o en ser vicios de telefonía móvil 
queda por debajo de esos límites. México desearía saber cuáles son los porcentajes reales de inversión 
extranjera y si existen planes para incrementar la participación extranjera en éstos servicios. WT/TPR/M/199/Add.1 
Page 6  
 
  (vi) Servicios de distribución 
(a) Panorama general del mercado 
- En el párrafo 273 se menciona que el sector de distribución aún está cambiando, dado que las 
cadenas nacionales e internacionales se están expandi endo, si bien la presencia extranjera sigue 
limitada a las grandes ciudades. México esta inter esado en conocer si esta limitación se flexibilizaría 
en el corto plazo y habría un mayor acceso para los extranjeros en este mercado. 
 
(b) Marco Normativo 
- En el párrafo 279, el proceso de liberalizaci ón en este sector de distribución comenzó por 
primera vez en 1992, en donde se preveía un au mento gradual del acceso a los proveedores 
extranjeros, en particular en el marco del modo 3 (presencia comercial).  En la actualidad se permiten 
empresas cien por ciento extranjeras.  La gama  de productos que las empresas extranjeras pueden 
vender también ha aumentado con el tiempo, así co mo el ámbito geográfico de sus operaciones (para 
el comercio minorista).  A pesar de lo anteri or, China aún mantiene algunas restricciones, por 
ejemplo, los proveedores que posean más de 30 ti endas no pueden vender dete rminados productos.  
México desea conocer si se contempl a la eliminación de estas restricciones. 
 
(ix) Servicios de contabilidad 
(b) Marco normativo y reformas recientes Alcance de las actividades autorizadas de empresas de contabilidad extranjeras 
- En el párrafo 325, con el permiso del Mini sterio de Hacienda, las empresas públicas de 
contabilidad extranjeras pueden establecer oficin as de representación residentes y proporcionar 
servicios profesionales temporalmente en China, pe ro no pueden proporcionar servicios de auditorías 
reglamentarias de contadores públic os titulados.  Al respecto, México desea conocer si se contempla 
una mayor liberalización en este sector. 
 
(x) Turismo 
(b) Marco normativo y reformas recientes Guías turísticos  
 
- En el párrafo 334, se menciona que no se han introducido cambios en los reglamentos por los 
que se rigen los guías turísticos desde la adhesión de  China a la OMC.  Sólo los ciudadanos chinos 
podrán trabajar, previa autorización, como guías turí sticos.  Los solicitantes deben aprobar un examen 
para obtener el título de guía turístico. Al resp ecto, México está interesado en saber si se tiene 
contemplado hacer cambios en el reglamento para que los extranjeros puedan participar en este sector. 
 
MEXICO – ADDITION 1
 
 
Industria siderúrgica 
 
1. En cuanto a la estructura del mercado del hierro y del acero, China menciona que se ha 
implementado un "control del volum en de la producción total".  Al ser una acción ligada con la 
estructura del mercado del hierro y del acero, ¿debemos entender que son acciones orientadas a 
reducir el volumen de producción que puede destinarse al mercado interno chino? En todo caso, ¿en 
qué consiste ese control?  2. ¿Cuáles son los criterios para considerar que  una instalación de producción de hierro/acero es 
obsoleta? ¿Qué acciones específicas se han emprendi do para promover el cierre de instalaciones 
obsoletas? 
   WT/TPR/M/199/Add.1 
 Page 7 
 
 
  3. China menciona que su política de desarrollo de la industria siderúrgica implica alcanzar 
niveles de producción "razonables". ¿Qué significa eso? ¿Un nivel "razonable" puede ser mayor que 
el que actualmente tiene? ¿Qué parámetros se utili zan para determinar si un nivel de producción es 
"razonable" o no? ¿De qué forma se piensan alcanzar esos niveles?   
4. China señala que su política de desarrollo de la  industria siderúrgica apoya la ampliación de 
las actividades de los productores de acero existent es, dado que "en principio"  no se aprobarán nuevos 
proyectos y algunos pequeños producto res dejarán de operar definitivamente o serán adquiridos por 
empresas de mayor capacidad. ¿Eso significa que co mo política de Estado, China pretende estimular 
la producción de los productores existentes a través de consolidaciones? Es decir, ¿la meta final es 
aumentar la producción? Si no es así, por favor e xplique. Por otra parte, ¿qué mecanismos se 
utilizarían para ello?   5. El documento menciona que la política tamb ién fomenta el uso de equipo y tecnología 
nacionales, y que se hacen devoluciones fiscales, descu ento en los tipos de interés y fondos para la 
investigación y desarrollo para proyectos importantes relativos al hierro y el acero, en los que se 
utilicen equipos nacionales recién desarrollados.  De  igual forma, se menci ona que de conformidad 
con el artículo 18 de la Política de desarrollo de la  industria siderúrgica, se alienta a las empresas a 
que utilicen equipo y tecnología nacionales y reduzca n las importaciones y que se presta ayuda a los 
fabricantes nacionales de equipo para exportar t ecnología y equipo metalúrgico, por ejemplo, en 
forma de créditos a la exportación. ¿Podría explicar  de qué forma es todo ello compatible con las 
obligaciones de China contenidas en el Acuerdo s obre Subvenciones y Medidas Compensatorias de la 
OMC?  6. Las empresas que tengan licencias de importación "automáticas" de minera l de hierro ¿tienen 
beneficios adicionales al derecho de im portar el mineral? ¿en qué consisten? 
 
7. Entendemos que China ha emprendido algunas acciones para desalentar sus exportaciones, y 
entre esas acciones se menciona que "en septiembre de 2006, los descuentos del IVA aplicables a 
determinados productos de acero acabados se redujeron del 11 al 8 por ciento;  y, en julio de 2007, las 
desgravaciones se suprimieron respecto de 553 produc tos (entre ellos los productos del hierro y el 
acero considerados de alto consum o energético, muy contaminantes, y de gran consumo de materias 
primas); y se redujeron sobre 2.268 productos que las autoridades consideraban vulnerables a las 
fricciones del mercado (entre ellos algunos producto s del acero)". No obstante, no se menciona cuál 
es la tasa del IVA que se pagaba y cuál es la que se paga ahora, así como la forma de cálculo (entendemos que el IVA no se calcula sobre el consumo, sino sobre la producción). Es importante 
señalar que aun cuando los descuentos al IVA se hayan reducido, si la tasa aplicable no es lo 
suficientemente alta, se corre el riesgo de que la exportación no se desincentive en lo absoluto. 
Agradeceríamos explicaciones al respecto de las ta sas aplicables y la forma en la que China espera 
que esas acciones desestimulen de fo rma efectiva sus exportaciones.  
 
MEXICO – ADDITION 2
 
 
Normas técnicas  viii) Normas y otras prescripciones técnicas a) Normas, certificación y acreditación 
Normas 
 
67. En este párrafo se menciona la promoción de l ajuste internacional y la celebración  de 
acuerdos sobre cooperación en materia de normas.  WT/TPR/M/199/Add.1 
Page 8  
 
  ¿ Podría explicar a que se refiere esa promoción y en que consisten esos acuerdos? 
 68. Informa sobre la revisión de las normas nacionales de China y se refiere la eliminación de una cantidad de normas.  
¿En su legislación existen disposiciones que permitan revisiones periódicas de las normas o 
reglamentos técnicos, con el propósito de modificarlas o eliminarlas?  70. Se menciona que además de las normas naciona les, hay también normas sectoriales, locales y 
empresariales.  
¿Podría explicar en que consisten y cuál es la difere ncia entre éstas y si existe diferencia entre la 
aplicación de unas y otras?  71. Menciona sobre el proceso de elaboración de  las normas, así como de documentos técnicos 
nacionales de asesoramiento. 
 
 a) ¿Podrá explicar a que se refiere con documentos técnicos nacionales de 
asesoramiento? 
 b) ¿Los documentos técnicos nacionales son notificados en la OMC?  c) ¿Podría explicar en breve cómo es su proceso de elaboración de normas y 
reglamentos técnicos? 
 72. Informa que China no aplica directamente las normas CEPE, sino parte de su contenido técnico se incorpora a las normas de certificación obligatorias. 
 
¿a que se refiere con normas de certificación obligatorias? 
 73. Menciona que es necesario mejorar la apli cación de normas, en especial sobre infracciones 
DPI.  Como no se siguen las reglamentaciones técni cas, los productos falsificados y de baja calidad 
pueden tener un importante efecto sobre los objetivos legítimos. 
 
 a) ¿A que se refiere con DPI? 
 b) ¿Qué tipo de normas o reglamentos técnicos son?  c) ¿Si representan un riesgo para alcanzar un objetivo legítimo?   d) ¿Por qué no son de cumplimiento obligatorio?  
74, 75, 76. Señala las diferentes instituciones que se encargan de la inspección y elaboración de 
normas en el sector alimentario. 
 
 a) ¿Existen normas o regulaciones técnicas  para el etiquetado alimentario? 
 b) ¿Cuantas y a qué tipo de alimentos las aplican?  
77 a 82. Informa que la dependencia AQSIQ es la dependencia  encargada de administrar el sistema de 
certificación y acreditación de China.  
 
 a) ¿Cuándo un producto contie ne las letras CCC, se puede interpretar que cumple con 
una norma o reglamento técnico, inde pendientemente del producto y norma o 
reglamento técnico que se trate,, est as siglas son de utilización general? 
 b) ¿Las letras CCC se utilizan solo para productos sujetos a un reglamento técnico? 
 c) ¿Existen organismos privados de certificación?   d) ¿Es la misma dependencia la que acredita, es juez y parte?  e) ¿Existen procedimientos y políticas para aplicar la evaluación de la conformidad?   WT/TPR/M/199/Add.1 
 Page 9 
 
 
   f) Los procedimientos para obtener la cert ificación de un producto son los mismos para 
un producto de fabricación nacional? 
 83. ¿Podría informar si existe un centro de in formación capaz de responder cualquier consulta 
sobre normas y reglamentos técnicos o cualquier información en materia de normas técnicas al 
comercio?  
 84. ¿Podrá informar sobre sus procedimientos de notificación ante la OMC?  
SWITZERLAND
 
 
Report by the Secretariat 
 
I. ECONOMIC ENVIRONMENT 
(2) R ECENT ECONOMIC DEVELOPMENTS  
Para. 5:  The Secretariat’s report mentions that inflation as measured by the consumer price index 
(CPI) has been rising, reaching 4.8% in 2007. Could the Chinese authorities provide the latest available figures as well as their inflation projections  and explain how monetary policy reacts to these 
price developments? 
(4) M
AIN STRUCTURAL REFORM ISSUES  
Para. 33:  Labor mobility is essential to reduce in come inequality and to increase labor productivity. 
The agriculture sector (11.7% of GDP) still represen ts 39.9% of total employment (Table I.1). 
According to the Secretariat's report, the system, which distinguishes between urban, rural, temporary 
and permanent workers, is a major impediment to labor mobility. Do the Chinese authorities intend to 
abolish restrictions on settlement? 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(2) M EASURES DIRECTLY AFFECTING IMPORTS  
(i) Procedures 
(b) Preshipment inspection  
According to para. 13 of the Secretariat's report, a revised version of the Implementing Regulation of 
the Law on Import and Export Commodity Inspectio n entered into force on 1 December 2005. Until 
now China has not provided the revised version to  the WTO Secretariat despite the obligation to 
notify any changes to the Secretariat immediat ely after their publication. Could the Chinese 
authorities indicate when China intends to comply w ith its obligation according to article 5 of the PSI 
agreement ? In addition, could China specify whet her China sent people or institutions abroad to 
conduct PSI inspections ? If yes, to which countri es, for which products, and when did it occur? 
 
(iii) Tariffs 
(a) MFN tariffs - Applied tariff rates  
Paras. 20:  According to the Secretariat's repor t in para. 20, China has provided the ad valorem 
equivalents (AVEs) for 40 lines out of 44 lines subj ect to specific rates. Could China indicate for 
which reasons the AVE for 4 tariff lines have not  been provided ? Coul d the Chinese authorities 
provide the exhaustive list of the 44 lines subject  to the specific duties as well as the AVEs and HS 
Code and product description?  In paragraph 22, footnote 22  of the Secretariat's report, tariff rates have been increased for a number 
of products and sometimes quite significantly. Could China indicate for which reasons the tariff rates WT/TPR/M/199/Add.1 
Page 10  
 
  have been increased as well as the HS Code, produc t description, bound rates and applied rates for the 
products mentioned in footnote 22?  
(v) Import prohibitions, restrictions, and licensing  
 
According to para. 42, China prohibits the impor t of second-hand precision equipment. Could China 
specify which are the criteria used to determine th at these products are sec ond-hand products ? As 
second-hand products are not waste products, could Ch ina explain for which reasons it prohibits the 
import of these products and which are the rele vant international commitments in that case? 
 
(vii) Contingency measures  
(a) Anti-dumping and countervailing measures 
Anti-dumping measures 
 
In para. 55, the Secretariat's report suggests that MOFCOM can decide to self-initiate an anti-dumping 
investigation, if it has sufficient evidence of the existence of dumping, injury, and the causal link.  
Could the Chinese authorities indicate on the basis of what specific criteria MOFCOM could decide to 
initiate an investigation in the absence of a comp laint by the domestic industry ? Also, how can the 
Chinese authorities determine a possible causal link be tween dumping and injury before the launching 
of an investigation to justify an ex-officio  investigation ? Since China h as not used in recent years the 
instrument of self-initiated anti-dumping investigations , are there any plans to fully renounce to such 
an option?  (ix) Government procurement 
 
Para. 98  of the Secretariat's report: As observed in ot her countries and especially within Members of 
the Government procurement agreement of the WT O (GPA), local government entities in China are 
accounting for about 80% of the total value of government procurement in China. Would it be 
possible to the Government of China to elabor ate on the legal framework which is governing the 
procurement made on local levels (provinces, m unicipalities, etc.) ? Does the Procurement Law 
mentioned in article 97 apply to all local levels of  government ? Or do the local governments have the 
legal authority to elaborate and apply specific laws tailored to the needs of each province or 
municipality ? If not, are the competences of the local authorities limited to the implementation of the Procurement Law?   
 
Para. 101  of the Secretariat's report: The Government  Procurement Law is said to apply to 
procurement of goods, projects, and services listed in  a Centralized Procurement Catalogue issued by 
the Ministry of Finance ? This suggests that so me goods – and services – are not covered by the 
Procurement Law. What are, in the view of Chin a, the main goods and services not covered ? What 
are the respective functions of the Ministry of Fi nance and the Provincial bureau of Finance in the 
implementation of the Law?   Para. 108  of the Secretariat's report:  For the procurement of goods and services, the Chinese 
Authorities use public tendering, invited bidding, competitive negotiation, single-source procurement, 
request for quotations, and other methods. In co mparison, Members of the GPA, mainly use open 
tendering – which seems to be equivalent to public tendering in China and which apparently 
represents in China about 68 per cent of the proc urements made – selective tendering and limited 
tendering. Could China explain the main differences between the three basic methods proposed in the 
GPA and the various methods mentioned in the report of the Secretariat?   WT/TPR/M/199/Add.1 
 Page 11 
 
 
  (3) M EASURES DIRECTLY AFFECTING EXPORTS  
(ii) Export taxes 
 
Para. 112 and footnote 111: Para. 112 of the Secretar iat's report indicates that in 2007, China applied 
statutory export taxes to 88 tariff lines at the HS  8-digit level whereas according to footnote 111, 
China listed 84 tariff lines at the HS 8-digit level at statutory export taxes rates in the Annex 6 of its 
Protocol of Accession. Could the Chinese authoriti es explain why, for which products (HS 8-digit 
level), and at which rate, export ta xes were applied in 2007 to more tariff lines than what is foreseen 
in its Protocol of Accession, and which are the WTO justifications for this? 
In addition, though the main objective of these expor t taxes may be to improve the environment by 
reducing exports of products considered to be highl y energy consuming or polluting, such taxes tend 
to increase the domestic supply of the products con cerned and can serve as indirect subsidization of 
processing industries and influence international trad ing conditions of these products. Given that in 
paragraph 16 of the DDA mandate Members have agr eed to reduce or, as appropriate, to eliminate 
tariffs, including the reduction or elimination of tariff  peaks, high tariffs and tariff escalation, as well 
as non-tariff barriers, in particular on products of expo rt interests to developing countries, what would 
the Chinese authorities consider to do to help de veloping countries to have  a better access to raw 
materials to develop their industrial sector?  
(v) Export prohibitions, restrictions and licensing 
(a) Export prohibitions  
 
Para. 120 of the Secretariat's report indicates that China has increased the lis t of items subject to 
export prohition. Could China provide an exhaustive  list of the items currently subject to export 
prohition (HS number at 8-digit le vel and product description) as well as the WTO justification? 
 (4) M
EASURES AFFECTING PRODUCTION AND TRADE  
(i) Taxation and tax incentives 
(d) Tax incentives  
In para. 148, the Secretariat's report indicates that consumption (or excise) tax is levied on certain 
domestic and imported goods, among ot hers on some luxury items, such  as golf balls and equipment, 
luxury watches, yachts, etc. At the same time, para. 159 of the Secretariat's report suggests that 
China's latest notification to the WTO Comm ittee on Subsidies and Countervailing Measures 
(April 2006) listed that 78 tax incentive programs were  in force at the Central level between 2001 and 
2004. Do some of these incentive programs also c oncern the domestic production of luxury goods ? If 
yes, are they equally available to domestic and foreign owned enterprises?  
(iii) Other industrial policies and measures 
Para. 168: According to the Secretariat’s Report, di rect intervention in the economy remains the main 
approach of industrial policy. Could the Chinese au thorities provide an overview of the activities that 
are restricted / prohibited or "guided"? How ofte n are these "catalogues" modified? Based on which 
criteria? 
 
(a) Catalogues and "guidance" 
 
In para. 170, the Secretariat's report suggests that  the Catalogue of Guidance Regarding Industrial 
Structural Adjustment covers more than 20 i ndustries, including 539 encouraged categories, 
190 restricted categories, and 300 prohibited categories (which are said to be eliminated gradually or 
within a specific time frame). Could the Chinese authorities indicate which are the main industries 
where investment is falling into the prohibited category?  WT/TPR/M/199/Add.1 
Page 12  
 
  (vi) Intellectual property rights 
(e) Other IPRs 
 
As mentioned by the Secretariat in para. 239 of its  report, the coexistence of two systems caused some 
confusion among producers and consum ers and raises several questions with regard to the coherence 
of the legal framework for the protection of geogra phical indications (GIs) in China. The Secretariat 
further mentions that a new law on GIs is to be  issued before 2010. Could the Chinese authorities 
indicate how this law is going to fit in the existing systems of protection of geographical indications in 
their country? Shall the new law create a new categor y of protected geographical indications ? If yes, 
could the Chinese authorities indicate what measur es shall be taken in or der to avoid possible 
conflicts between GI registrations? 
 
(f) Enforcement 
 
In para. 242 of its report, the Secretariat stresses the difficulty to enforce ad ministrative and judicial 
decisions due to the lack of appropriate infrast ructure and sufficient manpower. Could the Chinese 
authorities indicate which measures China intends to ta ke in order to fully comply with the general 
obligation under Article 41 of the TRIPS Agreement. 
 
IV. TRADE POLICIES BY SECTOR 
(4) M
ANUFACTURING  
(iv) Electronics and information industry 
(c) Import and export measures Page 135, para. 116 
 
According to para. 116  of the Secretariat's report, the simple average applied MFN tariff rate rose 
from 9.1% in 2005 to 9.7% in 2007, due to China's ch anges in HS nomenclature.  China indicated that 
the average rose because, under the HS 2007, some non-zero items were further classified into more 
specific ones, resulting in a rise of the number of non-zero-rate tariff items. Could the Chinese 
authorities provide an exhaustive list of the items at HS 8-digit level together with the product 
description and old and new tariff for which the tariff rate has increased? 
 COLOMBIA
 
 
OBSERVACIONES RECAPITULATIVAS 
1) ENTORNO ECONÓMICO  
 "4. Desde el anterior Examen de  las Políticas Comerciales de China, la política monetaria del país 
ha obedecido en gran medida a la necesidad de abso rber el exceso de liquidez, reducir el aumento de 
los créditos y la inversión y, por consiguiente, "e nfriar" el crecimiento económico.  Además de la 
"esterilización" de las entradas de capital y la pers uasión (la "orientación administrativa"), el Banco 
Popular de China (PBC) ha aplicado durante el período objeto de examen otros instrumentos de 
política monetaria, como el incremento de los tipos de interés y el aumento de coeficiente de liquidez 
de los bancos."   
  - ¿Qué otros instrumentos de política mone taria adicional a los mencionados en este 
párrafo ha adoptado China en el marco de  la "esterilización" de las entradas de 
capital? 
 
 - ¿El gobierno de China ha hecho evaluaciones sobre la efectividad de las medidas 
adoptadas en el marco de la "esterilización"  de las entradas de capital? ¿Cuál ha sido 
el resultado de las mismas? 
  WT/TPR/M/199/Add.1 
 Page 13 
 
 
  III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS 
2) M EDIDAS QUE AFECTAN DIRECTAMENTE A LAS IMPORTACIONES   
ix) Contratación pública 
 
 - Si un productor colombiano de bienes agropecuarios está interesado en venderle sus 
productos a una entidad pública del Gobier no Chino, ¿habría alguna limitación para 
su participación?. Si la respuesta es positiv a, por favor explicar ¿Cuáles son las 
limitaciones y si éstas son subsanables?.  
 "99. El marco de contratación pública de Chin a está diseñado para una "economía cerrada", 
destinado fundamentalmente a facilitar la consecuci ón de los objetivos de desarrollo económico y 
social, entre ellos la protección del medio ambiente, la asistencia a las regiones minoritarias subdesarrolladas o étnicas, y la promoción de las PY ME (pie de página 100.  Por consiguiente, en 
principio, cuando los bienes producidos en el país están disponibles, la compra a proveedores extranjeros es ilegal y está sujeta a sanción.)…." 
 
 - ¿Podría el Gobierno de China describir las medidas específicas aplicadas en cada una 
de las áreas mencionadas anteriormente,  y su razón para que estas medidas no 
permitan la participación de proveedores,  productos y servicios extranjeros? 
  - En relación con el propósito de hacer part e del Acuerdo de Contratación Pública de la 
OMC, ¿el Gobierno de China planea cambiar su ley de contratación para ser 
compatible con los nuevos compromisos? 
 
COLOMBIA - ADDITION
 
 
III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS 2) M
EDIDAS QUE AFECTAN DIRECTAMENTE A LAS IMPORTACIONES  
i) Procedimientos b) Inspección previa a la expedición 
 
"13. China introdujo una prescripción en materia de  inspección previa a la expedición mediante la 
revisión del Reglamento de aplicación de la Ley sobre inspección de mercancías de importación y de 
exportación…….. (pie de página No. 8…Las autoridad es consideran que la prescripción en materia de 
inspección previa a la expedición pude funciona r como una medida preventiva contra la 
falsificación.)…"    
Se menciona en este párrafo que desde el 1º de diciembre de 2005, entro en vigencia la Ley sobre 
inspección de mercancías de importación y exportación.   - ¿Podría China compartir su experiencia en relación a la inspección sobre mercancías 
de exportación?  
 
 - ¿El establecimiento de la medida ha gene rado sobrecostos a los usuarios aduaneros?  
  - ¿Cuándo se tiene pensado notificar ésta medida a la OMC?   - En el pie de página 8 se menciona que la medida puede funcionar como una medida 
preventiva contra la falsificación. ¿Podría China compartir su experiencia y 
estadísticas que demuestren que efectivamen te se ha reducido la importación y 
exportación de mercancías falsificadas?  
 WT/TPR/M/199/Add.1 
Page 14  
 
  iii) Aranceles 
d) Derechos por la entrada de artículos. 
 
"39. Algunos productos importados, independientemen te de su cantidad, están sujetos a derechos 
de entrada.  El ámbito de esos artículos lo determina la Comisión Arancelaria del Consejo de 
Estado…." 
  - ¿Cuáles elementos de juicio tiene en cuenta la Comisión Arancelaria del Consejo de 
Estado para determinar que tipo de produc tos importados, independientemente de su 
cantidad, están sujetos al pago de derechos de entrada?  
 
vii) Medidas comerciales especiales 
 
"56. El 3 de septiembre de 2006 entraron en vigor las Normas sobre acceso y divulgación de 
información en investigaciones de daño a ramas de producción.  Según el Reglamento, debe 
notificarse a todas las partes interesadas la informac ión relativa a la investigación de daño a una rama 
de producción nacional, exceptuada la información clasificada.  Por lo general el MOFCOM notifica 
la información pertinente a las partes interesadas 30 días antes de adoptar su decisión definitiva."   
  - Dice que "por lo general" el MOFCOM notifica la información pertinente….., en qué 
casos no lo notifica? 
 
 - ¿En que momento las autoridades chinas, notifican al Gobierno del Miembro 
exportador interesado, de acuerdo con lo di spuesto en el Artículo 5.5 del Acuerdo 
Antidumping? 
 
 - ¿Como da aplicación a las disposiciones del Ar tículo 6, sobre el aviso del inicio de la 
investigación y garantías del derecho de defe nsa a las partes interesadas durante la 
investigación? 
 "58. "Durante el período de investigación, el e xportador puede ofrecer compromisos de precios al 
MOFCOM y éste puede sugerir compromisos de pr ecios al exportador: si el precio revisado es 
aceptable, el MOFCOM puede suspender o dar por concluida la investigación antidumping en interés 
del público…."   - ¿Como determina el interés del público?  Medidas compensatorias 
 
"63. Pueden adoptarse medidas compensatorias al  amparo de las disposiciones de la Ley de 
Comercio exterior y el Reglamento sobre Medidas compensatorias.  El marco institucional y procedimental en relación con las medidas compensator ias se ha mantenido en gran medida inalterado 
desde el anterior examen de China. China no ha adoptado medidas compensatorias desde su adhesión 
a la OMC.". 
 Aunque no hay observaciones sobre este párrafo, sería importante preguntar:   - ¿A partir de su Adhesión a OMC qué tip o de subsidios ha im plementado la República 
Popular China para incentivar pr ogramas de desarrollo económico? 
  WT/TPR/M/199/Add.1 
 Page 15 
 
 
  b) Salvaguardias 
 
"64. Pueden adoptarse medidas de salvaguardia al amparo de la Ley de Comercio Exterior y el 
Reglamento sobre Salvaguardias… Las medidas de salvaguardia se aplican a las importaciones 
cualquiera que sea su procedencia.  China no ha  adoptado ninguna medida  de salvaguardia desde 
2005.  No se pueden recurrir las decisiones en materia de salvaguardias adoptadas por las 
autoridades."   - ¿Cuáles son las razones o fundamentos le gales que impiden recurrir las decisiones?  
 
 - ¿Cuál es el foro de revisión administrativa o judicial para este tipo de medidas?  
 
viii) Normas y otras prescripciones técnicas. 
 
 - ¿Es posible que el gobierno chino suminist re los criterios bajo los cuales establece la 
prioridad de los productos cuyas normas de berán ajustarse a normas internacionales? 
  - ¿China ha notificado todas las normas obligatorias a la OMC? ¿Entre las normas 
notificadas se encuentran l as sectoriales y las locales? 
  - ¿China ha firmado acuerdos de r econocimiento mutuo? ¿En qué sectores? 
 
 - ¿China realiza estudios de impacto en el comercio cuando elabora sus reglamentos 
técnicos? 
  - ¿China publica sus proyectos de normas ob ligatorias para recibir observaciones de los 
interesados y en caso afirmativo, las tiene  en cuenta para la norma definitiva? 
 
b) Medidas sanitarias y fitosanitarias 
 
"69. Determinadas importaciones y exportaciones pue den estar exentas de determinados requisitos 
de cuarentena según lo previsto en las medidas de exención de la inspección de productos básicos 
importados y exportados.  Si lo aprueba la AQSIQ , los productos básicos enumerados en el catálogo 
de entradas y salidas de productos básicos sujetos a inspección y cuar entena pueden estar exentos de 
determinados requisitos de cuarentena.  Pued en presentar las solicitudes los importadores, los 
exportadores o los fabricantes.  Los productos han de satisfacer determin ados requisitos,  por ejemplo, 
tener su propia marca comercial y gozar de una posici ón destacada en la industria de su país o región 
de origen como producto de calidad y grado superior ,  ha de tener "buena reputación" en el mercado 
internacional, sin defectos de calidad ni reclamacione s y el coeficiente de aprobación de la inspección 
ha de ser del 100 por ciento en los tres años consecu tivos anteriores.  No pueden gozar de la exención 
los alimentos, animales y vegetales y sus producto s,  las mercancías peligrosas y su embalaje,  los 
productos cuya calidad es muy variable,  ni los productos a granel (como los minerales).".  
Colombia desea conocer: 
  - ¿Cual es el alcance de la calificación de "buena reputación" en el mercado 
internacional, en el sentido de la demostr ación del cumplimiento de dicho requisito? 
 
 - Dado que no pueden gozar de la exención lo s alimentos, animales y vegetales y sus 
productos, las mercancías peligrosas y su embalaje, los productos cuya calidad es 
muy variable, ni los productos a granel (como los minerales),  Colombia desea saber  si en tales condiciones existe una clasif icación oficial que determine concretamente 
los productos cobijados por este beneficio. WT/TPR/M/199/Add.1 
Page 16  
 
  4) M
EDIDAS QUE AFECTAN A LA PRODUCCIÓN Y AL COMERCIO . 
 
 - ¿Existen incentivos tributarios a la invers ión en Pymes? ¿Hay exenciones tributarias? 
  - ¿Existe un Sistema General de incentivos y/o apoyos a las Pymes en temas como 
mejoramiento de productividad, capacitacion es empresariales, asistencia técnica,etc.? 
  - ¿Hay esquemas de apoyo en reducción de im puesto de renta para los emprendedores?  
  - ¿Existen esquemas de pago de parafiscales?   
 
 - ¿Hay subsidios o apoyos en menor es tarifas para los emprendedores? 
  - ¿Existen fondos con recursos del Esta do para el apoyo al mejoramiento competitivo 
de la Pyme, y no sólo de carácter de rescate o de subvención como lo presenta el 
documento? 
  - ¿Existen esquemas de Capital Semill a y Capital de Riesgo, como esquemas 
complementarios de financiación para las Pymes? 
  - ¿Hay un Órgano Estatal especiali zado en la promoción de Pymes? 
 
IV. POLÍTICAS COMERCIALES POR SECTORES 
3) E
NERGÍA  
i) Introducción 
 "45. No hay ninguna ley genera l ni ningún marco normativo adecuado para el sector.  El marco 
legislativo sigue basándose en los reglamentos y los documentos administrativos, más que en las 
leyes.   Sin embargo, a fin de promover el mayor desarrollo del sector y fomentar la inversión privada y la competencia, sería necesario que un marco jurídico adecuado abarcase todas las esferas del sector de la energía y definiese las funciones, los derec hos y las obligaciones de los diferentes actores.  En 
2006, las autoridades emprendieron la redacción de una ley de energía destinada a reglamentar los 
subsectores del petróleo, la electricidad, el carbón y el gas natural. 
  - ¿Qué tipo de controversias jurídicas se presen tan generalmente por la falta de una ley 
general o marco normativo adecuado que regule el sector de la energía? 
 T
EMAS AGRÍCOLAS  
 
 1. Podría China proporcionar detalles acerca de la política de subvención a la 
agricultura? 
 2. En el párrafo 23 de la página 130 del Informe de la secret aría, se señala que en 
algunos productos el Gobierno conserva ci erta influencia sobre el comercio 
(importaciones y exportaciones), a través de l sistema de comercio de Estado, que 
permite asegurar la estabilidad de la ofer ta y los precios de productos específicos. 
Puede China explicar en qué consiste este sistema? 
 3. Podría China explicar si su sistema de licencias de importación es compatible con el 
Acuerdo Sobre Licencias de Importación de la OMC?. Cómo opera el sistema de 
administración de los contingentes?  
 4. El Informe de la Secretaría en el pá rrafo 27 de la página 131, señala que algunos 
productos no pueden ser exportados si se elaboran "en régimen de tráfico de 
perfeccionamiento". ¿Puede China, proporcionar mas detalles sobre este régimen? ¿A 
qué productos aplica el mismo?  WT/TPR/M/199/Add.1 
 Page 17 
 
 
   5. Sírvanse proporcionar detalles en torno a los programas de ayuda directa a los 
ingresos de los agricultores?  
 
INVERSIÓN 
 
iv) Inversión extranjera 
 
44. Las salidas de inversión extranjera directa de China han experimentado un extraordinario 
aumento, de 1.800 millones de dólares EE.UU. en 2 004 a 17.300 millones en 2006.  Una gran parte de 
las salidas obedecen a los esfuerzos de China por ase gurarse el suministro de recursos naturales y 
combustibles con el fin de poder mantener su fuer te ritmo de crecimiento.  Dado que China cuenta 
con más de 1,5 billones de dólares EE.UU. en reservas de divisas (a fecha de diciembre de 2007), es probable que el crecimiento de las salidas de IED continúe.   - ¿En qué países se ha enfocado la invers ión de China? ¿Cuáles de Latinoamérica? 
 
 - ¿En qué sectores se ha concentrado la i nversión de China en el mundo? ¿Cuáles son 
las principales empresas chinas en el extranjero? 
 6) R
ÉGIMEN DE INVERSIÓN EXTRANJERA  
i) Evolución reciente de la política de inversión extranjera directa 
 
69. En 2006, China fue el tercer receptor de IE D a escala mundial, tras lo s Estados Unidos y el 
Reino Unido.   China ha segui do proporcionando un entorno empresarial favorable a las IED, …. 
 
 - ¿En qué áreas de la economía se concentra la inversión extranjera? 
 72. China también fomenta la salida de IED, en  gran medida para mejorar los conocimientos 
técnicos y para asegurarse el suministro de materias primas clave, como el petróleo y el mineral de hierro.  En virtud del Reglamento sobre aspectos suje tos a aprobación de la inversión en el extranjero 
destinada al establecimiento de empresas (Decreto Nº 16 del Ministerio de Comercio, de 2004) y del 
Reglamento sobre examen y aprobación de empres as de China Continental que establecen empresas 
en las regiones administrativas especiales de H ong Kong y Macao, se delega en las autoridades 
comerciales locales en diversas provincias, regiones autónomas y municipios que dependen directamente del Gobierno Central y a las ciudade s con presupuesto independiente autoridad para 
examinar y aprobar las inversiones en el extranjero .  China eliminó las restricciones a la compra de 
divisas para realizar inversiones en el extranjero en julio de 2006, de conf ormidad con la Circular 
sobre el ajuste de la política de administración de divisas en relación con las inversiones en el extranjero, emitida por la Administración Estatal de  Divisas.  En octubre de 2007 se estableció China 
Investment Corporation, nuevo fondo patrimonial  soberano cuyo objetivo es invertir parte de las 
cuantiosas reservas en divisas del país;  al parecer, los activos de explotación rondan los 
200.000 millones de dólares EE.UU. 
  - Podrían describir el procedimiento utiliza do por "China Investment  Corporation" para 
efectos de la inversión de las reservas? 
 
75. En general, parece que los proyectos de la  categoría alentada son los que utilizan mejor 
tecnología y son menos contaminantes , mientras que los proyectos restringidos y prohibidos son los que utilizan tecnología obsoleta, sobreexplotan recu rsos naturales escasos y tienden a dañar el medio 
ambiente.  Los límites al capital extranjero varían  de una rama de producción a otra y no están 
necesariamente relacionados con la categoría.  WT/TPR/M/199/Add.1 
Page 18  
 
   - ¿Cuál es el promedio de los límites de participación de los extranjeros en las 
empresas? ¿De qué depende? ¿Cuáles son las áreas prohibidas? 
 82. La Ley del impuesto sobre la renta de las soci edades, que entró en vigor el 1º de enero de 
2008, alteró la estructura de los incentivos fiscales ot orgados a las empresas con inversión extranjera.  
Ahora, se aplica un tipo fiscal uniforme del 25 por ci ento a todas las empresas, incluidas las empresas 
con inversión extranjera, a excepción de las que están sujetas al principio de la "anterioridad".    
  - ¿Aún se mantienes Zonas Económicas Especiales con tratamientos especiales? 
¿Existen otras áreas favorecidas o todas entraron el nuevo régimen de renta de 
sociedades? 
 
SERVICIOS 
 
5) S
ERVICIOS  
iii) Servicios financieros 
b) Sistema bancario Marco normativo 
 
140. De acuerdo con la Ley del Banco Popular de  China, el PBC es responsable no sólo de 
formular y aplicar la política monetaria, tal como se  describe en el capítulo I 3) i), sino también de 
mantener la estabilidad financiera .   El PBC ha conservado también algunas facultades de supervisión, 
aparte del control normal del sector fina nciero en términos macroprudenciales. 
  - ¿Concede China a las instituciones financier as extranjeras establecidas en su territorio 
acceso a los sistemas de pago y compens ación administrados por entidades públicas y 
a los medios oficiales de financiamiento y re financiamiento disponibles en el curso de 
operaciones comerciales normales? 
  - ¿El PBC otorga a las instituciones financieras extranjeras acceso a las facilidades de 
prestamista de última instancia? 
 
141. La Ley sobre bancos comerciales y la No rmas de la CBRC sobre el procedimiento de 
aplicación de las prescripciones para la obtención de  licencias (de 12 de enero de 2006) definen el 
ámbito empresarial y establecen requisitos para la  obtención de licencias y otros requisitos que deben 
cumplir los bancos comerciales de capital nacional.   Al parecer, las prescripciones y procedimientos 
en materia de licencias no han variado desde 2006.   El establecimiento de un banco comercial 
requiere la aprobación de la CBRC y la expedición de una licencia para realizar actividades.   El procedimiento para la obtención de una licencia consta  de dos partes:  el solicitante ha de presentar 
una solicitud por escrito, junto con un estudio de viab ilidad y "otros documentos" que especifique la 
CBRC;  a continuación, se convocará al solicitante para que complete la solicitud mediante la 
presentación de la información exigida.  Si se ap rueba el establecimiento, la CBRC expide un permiso 
para la realización de actividades bancarias.  A co ntinuación, el solicitante ha de inscribirse en la 
Administración Estatal de Industria y Comercio (SAIC) y obtener un certificado comercial.  Los 
bancos han de obtener la aprobación de la CBRC para cada nueva sucursal en el país o en el 
extranjero y una licencia comercial de la SAIC.  
 - ¿Cuánto tiempo tarda la autoridad regul adora de China para tomar una decisión 
administrativa sobre una solicitud completa de un inversionista en una institución 
financiera relacionada con la pr estación de un servicio financiero? 
148. En general, se prohíbe a los bancos comercia les de China hacer inversiones en el interior, 
aparte de instrumentos crediticios emitidos por el Estado y por instituciones financieras, valores  WT/TPR/M/199/Add.1 
 Page 19 
 
 
  comerciales y bonos empresariales emitidos por ins tituciones no financieras habilitadas para ello, y 
ciertos productos derivados.  A menos que así lo  decida expresamente el Consejo de Estado, se 
prohíbe a los bancos comerciales de China particip ar en inversiones en so ciedades de gestión, en 
operaciones con valores de renta variable, en invers iones de propiedad inmobiliaria, excepto para su 
propio uso, y hacer inversiones de capital social en instituciones financieras no bancarias.  Los bancos 
comerciales no pueden prestar directamente servicios  de leasing, sino que tienen que hacerlo mediante 
el establecimiento de una filial separada.   - ¿Se exige a los bancos comerciales es tablecidos en China realizar algún tipo de 
inversión forzosa? 
 
c) Seguros 
Visión general del mercado 
 
179. La principal legislación por la que se rigen los servicios de seguros es la Ley de Seguros, 
promulgada en junio de 1995 y actualizada en octubre de 2002.  Regula todas las actividades 
comerciales relacionadas con los seguros en China (exc luida la seguridad social).   Además, la CIRC 
ha promulgado varios reglamentos y normas por lo s que se rige la realización de actividades de 
seguros.  En virtud de la Ley de Seguros (artículo 7), todas las compañías de seguros que suministran 
servicios de seguros en China han de estar registradas, y todas las personas (físicas o jurídicas) u organizaciones que necesiten cobertura de seguro en China deben contratar los correspondientes 
servicios con una compañía de seguros registrada y establecida en China. 
  - ¿A partir de lo anterior, puede entonces concluirse que el comercio transfronterizo de 
seguros está prohibido en China? 
 d) Valores Marco normativo y legislativo 
 
214. Las Medidas sobre la administración de socied ades gestoras de fondos de inversión mobiliaria 
regulan el establecimiento de sociedades conjunt as de gestión de activos chinas y extranjeras y 
sociedades de gestión de activos de capital naciona l.  Los accionistas extranjeros de estas sociedades 
deben cumplir los siguientes requisitos:  a) ser una  institución financiera es tablecida de conformidad 
con la legislación de su país de origen;  b) estar  radicados en un país que tenga "una legislación y un 
sistema de reglamentación perfectos en materia de valores" y cuya institución de reglamentación haya 
firmado un memorándum de entendimi ento con la CSRC sobre cooperación en materia de valores y 
haya mantenido una relación de c ooperación eficaz en esa esfera;  y c) contar un capital desembolsado 
en moneda convertible equivalente a 300 millones de yuan como mínimo, aunque no sean accionistas 
principales.  La participación extranjera no puede ser  superior al 49 por ciento, según lo estipulado en 
la Lista de compromisos de China anexa al AGCS.      - ¿Qué se entiende por el requisito que deben cumplir los accionistas extranjeros de 
tener "una legislación y un sistema de re glamentación perfectos en materia de 
valores" en el país en que estén radicados? 
 
iv) Telecomunicaciones 
b) Estructura y políticas de reglamentación Inversión extranjera y régimen de licencias 
 
226. La inversión extranjera en el sector se rige por las Disposiciones sobre la administración de 
empresas de telecomunicaciones con inversión ex tranjera (Decreto Nº 333 del Consejo de Estado, 
promulgado en diciembre de 2001 y en vigor desde el 1º de enero de 2002), que permiten que la 
participación extranjera alcance el 49 por ciento en  los servicios de telecomunicaciones básicas y el WT/TPR/M/199/Add.1 
Page 20  
 
  50 por ciento en los servicios de telecomunicacione s con valor añadido;  hay también requisitos de 
capital mínimo.  De conformidad con los compromiso s contraídos por China en el marco del AGCS, 
se aplican restricciones a la participación extranjera (actualmente, el 49 por ciento en los servicios de 
línea fija y de telefonía móvil).  En la práctica, c on la excepción de los servicios con valor añadido, en 
los que alrededor del 95 por ciento de las empre sas son empresas "privadas nacionales" o empresas de 
propiedad extranjera, la inversión extranjera en serv icios de línea fija o en ser vicios de telefonía móvil 
queda por debajo de esos límites.  Al fina l de 2007, China había recibido 34 solicitudes de 
establecimiento de empresas de telecomunicaciones con capital extranjero para prestar servicios de telecomunicaciones con valor añadido.  El MII ha aprobado 19 de esos proyectos, respecto de los que ha emitido las respectivas Opiniones resultantes del examen de la inversión extranjera en el 
suministro de servicios de telecomunicaciones, que facultan a los promotores de los proyectos para 
solicitar un certificado de aprobación de empresa c on inversión extranjera, una licencia de operador 
de servicios de telecomunicaciones, y finalizar el pr oceso de registro de la inversión extranjera en 
empresas de telecomunicaciones.  Además, 14 em presas con inversión extranjera han solicitado 
oficialmente la Licencia de operador de servicios de telecomunicaciones de valor añadido, que se ha 
concedido a 11 de ellas, mientras que las solic itudes de las tres restantes están pendientes de 
aprobación.    227. Para que una empresa con inve rsión extranjera obtenga una licencia para prestar servicios de 
telecomunicaciones, el principal inversor chino (y  no el inversor extranjero) ha de presentar una 
propuesta al MII.   Según las autoridades, no es n ecesario que los inversores extranjeros presenten la 
solicitud.  El proceso de examen deberá llevarse a cabo en un plazo de 180 días a partir de la fecha en 
que se reciba la solicitud de licencia para prestar servicios de telecomunicaciones básicas, o de 90 días para los servicios con valor añadido.  En el caso  de las solicitudes para prestar servicios de 
telecomunicaciones con valor añadido en las provi ncias, regiones autónomas o los municipios que 
dependen del Gobierno Central, la autoridad examinadora competente (en la primera etapa) es el 
departamento local de administración de telecomunicaciones.  El departamento local debe remitir al 
MII sus observaciones sobre la solicitud en un plazo de  60 días a partir de la fecha de recepción.  El 
MII debe tomar la decisión de aprobar o rechazar la solicitud en un plazo de 30 días a contar desde la 
fecha en que haya recibido esas observaciones.  Cuando un proyecto es aprobado, se emite una Opinión resultante del examen de la inversión extranjera en el suministro de servicios de telecomunicaciones.  Si el proyecto es rechazado, el solicitante también debe recibir una notificación 
por escrito.  Cuando una empresa de telecomunicaci ones con inversión extranjera necesita la 
aprobación de las autoridades del Consejo de Estado,  el MII transmite la solicitud a esas autoridades 
antes de conceder las Opiniones resultantes de l examen.   En algunos casos no especificados, la 
Comisión Nacional de Desarrollo y Reforma puede solicitar un nuevo examen, en cuyo caso se prevé 
una prórroga de 30 días para la aprobación. 
 
 - Los párrafos 226 y 227 describen los regimen es de inversión extranjera y de licencias 
para prestar servicios de telecomunicaciones. Así mismo, los párrafos 224 y 225 exponen el régimen de interconexión. Si n embargo, no se exponen las condiciones 
bajo las cuáles empresas extranjeras pueden  acceder a las redes y servicios públicos 
de telecomunicaciones de China. Teniendo en cuenta que este país ingresó a la OMC 
una vez finalizada la Ronda Uruguay, la pregunta que surge es si China adquirió 
compromisos para dar acceso a las redes y servicios públicos de transporte de 
telecomunicaciones de conformidad con el Artículo V del Anexo  sobre Servicios de 
Telecomunicaciones del AGCS. 
  WT/TPR/M/199/Add.1 
 Page 21 
 
 
  vii) Servicios postales 
a) Panorama general del mercado 
 
292. La Oficina Postal Estatal de China funcionó como autorida d administrativa postal y operador 
comercial hasta el 29 de enero de 2007 cuando fue dividida en dos entidades:  una nueva Oficina 
Postal Estatal y China Post Group Corporation. 
 294. China Post Group Corporation es una empresa de propiedad totalmente estatal que ofrece 
servicios postales y de otro tipo, con inclusión de ser vicios de correo de cartas, servicios de envío de 
paquetes, sellos, Servicio de Correo Urgente, distribución de diarios y publicaciones periódicas, 
logística, servicios de comisionistas y de información, y ahorro postal. 
  - ¿China Post Group Corporation suministra el  servicio postal univer sal? Si es así, ¿qué 
tipo de autoridad regula a dicha empresa, es decir, una autoridad independiente o de qué tipo? 
 
viii) Servicios jurídicos 
b) Marco normativo 
 
307. Con la eliminación de las limitaciones geogr áficas y cuantitativas un año después de la 
adhesión de China a la OMC, las empresas jurídicas  extranjeras están autorizadas a poseer una o más 
oficinas de representación en todas las provincias.  Los abogados extranjeros que trabajan en oficinas 
de representación deben ser abogados que ejerzan su  profesión como miembros de la asociación de 
abogados o sociedad jurídica de un Miembro de la OMC y la hayan desempeñado durante un mínimo 
de dos años fuera de China.  Deben residir en Chin a durante al menos seis meses al año.  Para que un 
abogado extranjero empleado por oficinas de represen tación tenga la condición de "representante", la 
empresa jurídica extranjera debe solicitar y obtener  la autorización de las autoridades competentes.  
Los abogados extranjeros pueden ser  contratados por oficinas de re presentación como "personal de 
apoyo", que no debe suministrar servicios jurídicos a los clientes.  El jefe de la representación debe 
tener la condición de socio u otra  equivalente (por ejemplo, miem bro de la empresa de servicios 
jurídicos de una sociedad de responsabilidad limitada ) de una empresa de servicios jurídicos de un 
Miembro de la OMC, y haber ejercido su profesión durante un mínimo de tres años.  La oficina de 
representación no empleará a abogados chinos inscritos en el registro nacional.   
  - ¿El requisito de haber ejercido la prof esión durante un mínimo de tres años debe 
cumplirse habiendo ejercido en el territorio de China? 
 PROPIEDAD INTELECTUAL 
 
223. Si el solicitante de una patente no está de acu erdo con la decisión de la  SIPO, puede solicitar 
un nuevo examen a la Junta de Reexamen de Patentes.   Si la Junta constata que la decisión adoptada 
por la SIPO no se ajusta a las disposiciones de la Ley de Patentes y su reglamento y normas de 
acompañamiento, puede revocar la decisión y pedir a la SIPO que siga examinando la patente.   En 
2006, la Junta aceptó 2.894 solicitudes de reexamen y completó 2.667 casos.  Si el solicitante de la 
patente sigue sin estar de acuerdo con la decisión de  la Junta, podrá recurrirla ante un tribunal del 
pueblo.   ¿La decisión que adopte el Tribunal del pueblo es definitiva? ¿Hay alguna instancia superior? 
 
229. Actualmente, China utiliza el método del "primer solicitante":  si se presentan dos o más solicitudes de registro de la misma marca de fábric a o de comercio o de una marca similar para el 
mismo producto o un producto similar, la Oficina de Marcas de Fábrica o de Comercio lleva a cabo 
un examen preliminar antes de aprobar y anunciar la marca del primer solicitante.  Ahora bien, WT/TPR/M/199/Add.1 
Page 22  
 
  cualquier persona puede oponerse al registro de una marca de fábrica o de comercio que se haya 
sometido a un examen preliminar y haya sido aproba da, siempre que el procedimiento de oposición 
sea entablado en un plazo de tres meses a partir de la fecha en que se anuncie la marca del primer 
solicitante.  En particular, en el caso de las marcas de fábrica o de comercio que ya se han empleado en otros países pero que no están registradas en China,  si se trata de "marcas de fábrica o de comercio 
notoriamente conocidas", no podrá regi strarse una imitación o traducción de esa marca de fábrica o de 
comercio notoriamente conocida, y su uso debe pr ohibirse.  Una marca de fábrica o de comercio 
puede ser revocada incluso una vez concedida.   - ¿Aproximadamente, cuánto tiempo demora  el registro de una marca cuando se ha 
presentado oposición al mismo? 
  - ¿El procedimiento de oposición es un procedimiento de naturaleza administrativa? 
¿Judicial? 
 
242. En China, los derechos de propiedad inte lectual pueden hacerse observar por dos vías:  
medidas administrativas, y medidas judiciales.  Las medidas administrativas consisten en la 
mediación de las autoridades, con la participación de  numerosos organismos.   Las medidas judiciales 
se adoptan por conducto de las autoridades de segur idad pública, los órganos de la fiscalía y los 
tribunales.  El número de casos resueltos por la vía administrativa sigue siendo elevado 
(cuadro III.14).  También han aumentado los casos su stanciados por los tribunales:  los tribunales 
entendieron en primera instancia de 14.219 casos civ iles de DPI y se concluyeron 14.056 en 2006 (un 
aumento del 5,92 y del 4,95 por ciento, respectivam ente, respecto de 2005) (cuadro AIII.9).  En 2006, 
se publicaron cuatro reglamentos para facilitar el  traslado de casos por resolver de la vía 
administrativa a la judicial.   A pesar de estas medidas, resulta difícil aplicar las decisiones 
administrativas y judiciales debido a la falta de una infraestructura apropiada y de recursos humanos 
suficientes.   Por otra parte, los casos relaci onados con DPI deben satisfa cer valores de umbral 
mínimos para que pueda considerarse su enjuiciami ento.   Estos umbrales pueden adoptar la forma, 
entre otras cosas, del valor de las mercancías, los be neficios ilegales o la cantidad de copias ilícitas.  
Si bien estos umbrales son rebajados en algunos caso s, las autoridades señalan que no tienen intención 
de eliminarlos.   Además, existe cierta duda de que las multas y demás sanciones sean suficientes para 
prevenir las infracciones de DPI. 
  - Si para el enjuiciamiento de infracciones a DPI se consideran los mencionados 
umbrales, ¿qué pasa frente a casos en los que la infracción no tiene repercusiones económicas directas como cuando alguien se atribuye ilegítimamente la autoria de 
una obra?  
 
PREGUNTAS GENERALES 
 
 - ¿Existe en China una política nacional en materia de Propiedad Intelectual?  
 
 - ¿Existe en China un régimen legal aplicable  para el acceso a los recursos genéticos? 
Si existe, ¿se relaciona el mismo con el sistema de propiedad intelectual? 
  WT/TPR/M/199/Add.1 
 Page 23 
 
 
  REPUBLIC OF KOREA  
 
TRADE POLICIES AND PRACTICES BY MEASURE 
MEASURES DIRECTLY AFFECTING IMPORTS  
Government Procurement  
 
1. The Secretariat Report (paragraph 97) notes th at the Government Procurement Law of China 
does not apply to SOEs, or state-owned enterprises.  
  A. Which laws/regulations gove rn SOEs' procurement activities?  
 
 B. What are the major differences between th e procurement procedures prescribed in the 
Government Procurement Law a nd those that apply to SOEs? 
  C. Are foreign suppliers able to particip ate in the tenders conducted by Chinese SOEs? 
 
2. The Secretariat Report (paragraph 98) notes th at China's local government entities account for 
more than 80% of the total value of government procurement in China. China's initial offer of 
coverage for the GPA entry negotiation, submitte d on December 28, 2007, however, does not contain 
local government entities. 
 
Please elaborate the Chinese Government's plan s for the opening of the local government 
procurement market.  
3. The Secretariat Report (paragraph 99) notes th at the Government Procurement Law of China 
does not specify measures to be taken to promot e the development of SMEs in the government 
procurement framework. 
 
 A. Which laws/regulations provide for me asures to promote the development of SMEs? 
 
 B. Please provide data on the scale of government procurement associated with the 
assistance programs for SMEs, underdeveloped areas and ethnic minority areas, respectively. 
 
4. The Secretariat Report (paragraph 101) not es that procurement of goods, projects, and 
services listed in the Centralized Procurement Ca talogue must be carried out by centralized 
procurement agencies, which are non-profit legal pe rsons.  By what measures and legal instruments 
does the Chinese government ensure the fairness and transparency in the procurements conducted by 
the aforementioned non-profit agencies? 
 
TRADE POLICIES BY SECTOR  
S
ERVICES  
Telecommunications 
 5. The Secretariat Report (paragraph 221) notes th at China does not have a telecommunications 
law. For foreign investors this adds un certainty to their investment decisions. 
 Please provide up-to-date information regarding the enactment of a telecommunications law. 
 
6. The Secretariat Report (paragraphs 224-225) pr ovides an overview of China's interconnection 
regime. 
 WT/TPR/M/199/Add.1 
Page 24  
 
   A. Please provide the details of China' s interconnection regime, such as the 
interconnection rates, Reference Interc onnection Offer (RIO), and so on. 
 
 B. How many interconnection disputes among telecom operators were mediated by the 
Ministry of Information Industry for the last four years? 
 
 C. Are the information on such disputes and the results of the authorities' mediation 
publicly available? 
 
7. The Secretariat Report (paragraph 226) notes that China maintains minimum capital 
requirements for applicants to both basic a nd value added telecom services license. These 
requirements can act as a market access barrier for foreign investors who want to enter the Chinese 
market. 
 Please elaborate the Chinese Government's  plans to relax these requirements. 
 
8. The Secretariat Report (paragraph 226) not es that 11 foreign-invested enterprises were 
granted licenses for value added telecom operation. However, it is commonly believed that China 
rarely issues licenses for value-added telecom services to foreign service providers. 
  A. Please provide the details of the 11 valu e added service providers that were granted 
the licenses. 
 
 B. Please elaborate the Chinese Government's pl ans to make it easier for foreign service 
providers to acquire the licensee. 
 
KOREA - ADDITION
 
 
TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES  
INSTITUTIONAL AND LEGAL FRAMEWORK  
Transparency  
 
9. The Secretariat Report (paragraph 21) notes th at some aspects of China's trade policy regime 
remain complex and opaque. Although China is rapi dly enacting many laws that may greatly impact 
the business of foreign invested companies, English translations have not been sufficiently provided. 
Also, ordinances issued by local governments are rarely  translated into English. Furthermore, in many 
cases, China only allows a relatively short period of time between promulgation of a law and its 
implementation, which makes it difficult for companies to be prepared for new laws. 
 
Please elaborate the Chinese Government's plans to  improve transparency in implementing laws, 
regulations and administrative guidelines. 
 
TRADE POLICIES AND PRACTICES BY MEASURE  
MEASURES DIRECTLY AFFECTING IMPORTS  
Procedures  
 10. The Secretariat Report (paragraph 11) notes th at pilot projects to reform China's regional 
customs transit system have been implemented since October 2005. 
 Please provide the Chinese Government's plans to  fully implement the customs transit system. 
  WT/TPR/M/199/Add.1 
 Page 25 
 
 
  Import prohibitions, restrictions, and licensing  
 11. The Secretariat Report (paragraph 42) notes that around 6.5% of tariff lines were subject to 
import prohibitions in 2007. Currently, 410 items  such as second hand buses and motorcycles are 
included in the prohibition list of used machinery and electric goods.  
Korea would like to request that China clarify whether the prohibition is in accordance with 
international laws.  
12. The Secretariat Report (paragraph 49) notes th at 604 tariff lines were fully and partially 
subject to automatic import licences in 2007. The license system was implemented to monitor such 
items as refined oil, edible oil, coal, natural rubber, steel and waste paper. However, businesses are 
required to disclose sensitive information when applying for the license. 
 The licence system, beyond merely monitoring im ports for statistical purposes, seems to play a 
function to control imports. Please provide the Chin ese Government's plans to improve the system. 
 Standards and other technical requirements  
 
13. The Secretariat Report (paragraph 70) notes that  there are standards at the national, sectoral, 
local, and enterprise levels in China. In each of th e national, sectoral, and local categories, there are 
voluntary and mandatory standards. 
  A. According to Table III.4, the alignment ra te of national standard s with international 
standards and with ISO/IEC standards is  46.4% and 34.8%, respectively. Korea 
kindly requests China to clarify what international standards, apart from ISO/IEC standards, are recognized nationally, an d the rationale for their recognition. 
 
 B. According to Table III.4, 15.2% of sector al standards and 19.7% of local standards 
are mandatory standards.  Korea kindly requests China to clarify whether China 
notifies  other Members of this arrangemen t in accordance with Article 2.9 of the 
WTO/TBT Agreement. 
 
M
EASURES AFFECTING PRODUCTION AND TRADE  
Intellectual property rights  
 
14. The Secretariat Report (paragraph 242) notes that IPR-related cases must meet minimum 
value thresholds to be considered for criminal pro secution. It also notes that there is some doubt as to 
whether fines and other penalties are su fficient to deter IPR violations. 
 
Please provide the Chinese Government's plans to strengthen penalties and ease conditions for filing 
complaints regarding infringement of intellectual property rights. 
 
TRADE  POLICIES  BY SECTOR 
MANUFACTURING  
Iron and steel  
 15. The Secretariat Report (paragraph 86) notes that the Chinese Government provides assistance 
in the form of tax refunds, discounted interest rat es, and funds for research and development to major 
iron and steel projects that use newly developed domestic equipment. E quipment may be imported 
only when the equipment is technically advanced and not already produced in China. Furthermore, WT/TPR/M/199/Add.1 
Page 26  
 
  investment by foreign steel companies is bound by various restrictions such as minimum production 
conditions, technology transfer plans, distribut ion channel conditions and M&A of Chinese steel 
companies. 
 
Please provide the Chinese Government's plans to lower the market access barrier to Chinese steel 
market. 
 
Automotive sector  
 
16. The Secretariat Report (paragraph 101) notes that the minimum capital requirement for new 
entrants is Y 2 billion. It (paragraph 104) also notes that imports of vehicles are permitted only 
through a few customs clearance points. Consequent ly, this measure has indirectly controlled the 
import of automobiles by increasing logistics costs. 
 
Please provide the Chinese Government's plans to lower the market access barrier to the Chinese 
automotive sector. 
 
AUSTRALIA
 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(2) M EASURES DIRECTLY AFFECTING IMPORTS  
(ii) Customs valuation and rules of origin 
1. The experience of Australian exporters is that the entry processing of goods (valuation and 
tariff classification) is not uniform at all points of entry of goods into China (Paragraphs 14-16 on 
page 46 of WT/TPR/S/199). 
a) Can China assure WTO Members that the processing of goods at all entry points 
across China will be uniform? 
(iii) Tariffs 
2. We welcome recent steps by China to increas e transparency of its wool tariff rate quota 
(TRQ), including in the Implementation Rules of 2008 TRQ Allocation for Wool and Wool Tops 
(Paragraphs 25-28 on page 52 of WT/TPR/S/199).  Au stralia would be interested in regular (e.g. 
monthly or quarterly) information being made pub licly available on TRQ allocation and fill rates. 
a) Could China advise how it calculates its w ool imports for the purposes of the wool 
TRQ?   
b) Does China include wool trade into bonded areas or free trade zones for the purposes 
of the TRQ? 
c) What additional improvements is China consid ering with regard to its administration 
of the wool TRQs?  
(viii) Standards and other technical requirements  
3. We note that China’s standards for electrical  equipment for medical use is only 30 per cent 
aligned with international standards (Par agraph 69 on page 63-64 of WT/TPR/S/199).  
 a) What is the reason for this, and do es China intend to align these standards as a 
priority?   WT/TPR/M/199/Add.1 
 Page 27 
 
 
  4. Australia notes that China has been gra dually increasing the alignment of its national 
standards with international standards (Paragra ph 67 on page 63 of WT/TPR/S/199), however, many 
of these are voluntary rather than mandatory (Tab le III on page 64 of WT/TPR/S/199). Australia also 
notes China’s increasing attention to implementi ng food standards (Paragraphs 74-76 on page 65 of 
WT/TPR/S/199). 
a) What proportion of China’s food standards is  more restrictive than internationally 
accepted standards (such as Codex Alimentarius)? 
i. What proportion of these are mandatory standards? 
 ii. What is the justification for maki ng these standards more restrictive than 
internationally accepted standards? 
b) Which quarantine and food safety import requirements exceed the domestic 
standards? 
i. What is the justification for making these requirements more restrictive than 
those applied domestically? 
 ii. What measures has China taken to en sure consistency between its import and 
domestic requirements? 
 iii. What is China doing to ensure quarantine and food safety import 
requirements do not exceed those applied domestically? 
 iv. Where import requirements have been found to exceed those applied 
domestically, what action has China unde rtaken to remedy the situation? 
5. We note the assessment that China’s sanitary  and phytosanitary (SPS) regime remains 
complex (Paragraph 4 on page 43 and paragraphs  85-92 on pages 67-69 of WT/TPR/S/199).   
a) Has China considered adoptin g measures that would simplify its SPS regime?  If so, 
does China have a projected timetable for implementing those measures?   
b) Could China indicate if any reforms are planned to ensure food hygiene import 
requirements do not exceed those applied to domestic product? 
6. We welcome China’s efforts towards estab lishing standards for maximum residue limits for 
pesticides and contaminants in food (Paragraphs 74-76 on page 65 of WT/TPR/S/199).  However, we 
are concerned by the lack of transparency with re gard to the implementation and enforcement of these 
standards. 
a) Have the maximum residue limits notif ied to the WTO been implemented? 
b) If these standards have been implemented, what enforcement mechanisms apply in 
the event of detection of residue a bove these standards in imported food? 
c) Could China advise of any differences betw een the central government and provincial 
governments in the enforcement of residue standards? 
d) Where a maximum residue limit has not been established for a pesticide or 
contaminant, what standard will apply? WT/TPR/M/199/Add.1 
Page 28  
 
  e) Where the standards notified to the WTO ha ve not been implemented and enforced, 
we would be grateful for advice of the current standard for maximum residue limits of pesticides and contaminants in food that applies. 
f) What are the domestic regulations in place for residues in domestic foods and how 
are those regulations enforced? 
7. In relation to the implementation of mandator y ISO/IEU or international equivalent standards 
(Paragraphs 83 and 84 on page 67 of WT/TPR/S/199):  
a) Could China provide a list of the releva nt standards relating to consumer goods, 
particularly children’s toys, which are unde r consideration for mandatory inclusion? 
b) Could China provide a timeline for the implementation of such standards as they 
relate to consumer goods, in particular children’s toys? 
(3) M
EASURES DIRECTLY AFFECTING EXPORTS  
(ii) Export taxes 
8. Australia notes that in 2007, statutory export taxes applied to 88 tariff lines.  As at 
1 January 2008, a total of 334 lines at the HS 8 digi t level were subject to interim export duties, and 
that in addition to these products, exports of grain,  rice, maize and soybeans are subject to interim 
export duties, to discourage their export (paragraph 112 of the Secretariat’s report). 
a) Article 11.3 of China’s Protocol on Accessi on to the WTO provides that "China shall 
eliminate all taxes and charges applied to e xports unless specifically provided for in 
Annex 6 of this Protocol or applied in conformity with th e provisions of Article VIII 
of the GATT 1994."  In Annex 6, China listed 84 lines at the HS 8-digit level at 
statutory export tax rates.  
b) Australia would therefore appreciate clarifi cation of the WTO basis for the imposition 
of interim export duties on more than 334 tariff lines, given the constraints contained 
in Article 11.3 of China’s Protocol on Accession. 
(4) M EASURES AFFECTING PRODUCTION AND TRADE  
(v) Competition and consumer protection policy  
9. We welcome China’s introduction of the Anti- Monopoly law (scheduled to take effect from 
1 August 2008).  We note, however , that foreign acquisitions of Chinese companies will have to go 
through "national security reviews" (Paragra ph 214 on page 102 of  WT/TPR/S/199).   
 a) Could China advise how and by whom "national security" tests will be conducted? 
IV. TRADE POLICIES BY SECTOR 
(2) AGRICULTURE  
(iii) Policy instruments 
10. Could China provide information regarding an y changes to its agriculture export tariffs, or 
measures aimed at limiting exports (Paragra phs 25-30 on page 115 of WT/TPR/S/199)? 
11. Australia notes that China continues to operate  a minimum procurement price scheme for rice 
and wheat in major producing areas (Paragraph 39 on page 117 of WT/TPR/S/199) and that the  WT/TPR/M/199/Add.1 
 Page 29 
 
 
  Government can intervene in grain markets when prices are rising rapidly (Paragraph 41 on page 118 
of WT/TPR/S/199). 
a) What were China’s procurement prices fo r rice and wheat in 2007 (preferably in 
US$/tonne)?  
b) Have internal grain prices in China been rising rapidly and has the government 
intervened? If so, what were the measures introduced and what is the length of time 
these measures are expected to be in place? 
c) What measures does China implement to c ontrol grain exports? Have these been 
introduced and for what length of time are the measures expected to be in place? 
12. Australia notes that imports of corn, rice, wh eat, sugar and cotton are subject to both state 
trading and TRQs (Paragraph 23 on page 114 of WT/TPR/S/199).  
a) What were the fill rates for that part of  the tariff quota allocated to state trading 
enterprises and also for that part of the quota allocated to private enterprises?  
b) What arrangements does China have in place to reallocate unused quota? 
13. Australia notes that "China has made no no tifications to the WTO Agriculture Committee 
regarding the support given to the agriculture sector  during the period under review" (Paragraph 35 on 
page 116 of WT/TPR/S/199).  
a) What are the reasons for the delay in not ification and when will the domestic support 
notifications for 2002 onwards be made? 
(4) MANUFACTURING  
(i) Iron and steel 
14. Australia remains concerned about aspects of China’s iron ore import licensing system 
(Paragraph 88 on page 129 of WT/TPR/S/199).   
a) Could China provide details of its iron ore import licensing system, including industry 
involvement and any limitations on importers? 
b) We encourage China to notify the WTO of the full details of its import licensing 
system, including involvement of industry groups and any limitations on importers. 
c) Has China notified the WTO of the China Iron and Steel Association’s registration 
system for iron ore imports? 
d) What is the link between the registration system and the import license system? 
e) Could China provide details of its imports  rules for declaring iron ore shipments? 
15. What policy tools does China use at the nati onal, provincial and local government level, to 
channel resources into, or encourage the development of its steel industry?  (e.g. tax incentives; non-
tax subsidies; loans from SOEs at non-market rates; price controls or subsidies for raw materials and 
inputs; sector-specific industrial policies; land gran ts; exemptions from local, regional or national 
requirements that a foreigner might be subject to; subsidised utility charges, government procurement 
procedures favouring domestically owned companies; or other forms of "guidance"). WT/TPR/M/199/Add.1 
Page 30  
 
  16. The steel industry is closed to foreign investment through investment approval control via 
NDRC. 
a) When is the steel sector expected to  be opened up to foreign investment? 
17. Australia notes China has reduced VAT rebate rates for iron and steel exports (Paragraph 89 
on page 129 of WT/TPR/S/199).  
a) Does China plan to further reduce the va lue added tax (VAT) rebate for steel 
exports?  If so, within what time frame?   
b) What is the situation in regard to VAT  rebates on exports of other products?   
c) What export restraints (if any) has China implemented, or is planning to 
implement, (e.g. "heavy lift charges") in relation to flat steel product exports?  
(iii) Automotive sector 
(b) Regulatory framework 
18. China's policy in the automo tive sector seems to be largel y unchanged since its previous 
Review.  Australia notes from the previous WTO S ecretariat report (Paragraph 87 on page 189 of 
WT/TPR/S/161) that, apart from the import tariffs , China uses an array of non-tariff measures to 
restrict imports of manufactured goods.  
a) What measures have been taken (or have b een planned), since the last review, to 
enhance market access in the automotive sector?  
(c) Import and export measures 
19. In 2006, 3.2 per cent of vehicles sold in China were imported (3.4 per cent in 2004).  The 
simple average applied tariff (including interi m duties) for motor vehicles (ISIC3843) was 13.5 per 
cent (14.8 per cent in 2005) (Paragraphs 99-104 on pages 132-133 of WT/TPR/S/199).  Australia 
understands (as per tariff data available throu gh the WTO website) that the applied tariffs for 
passenger motor vehicles can range from 25 per cent -30 per cent and the applied tariffs for 
automotive components can range from 10 per cent -22 per cent.  
a) Does China have any plans to reduce its im port tariffs on automotive products in the 
near future? 
(5) S
ERVICES  
(iii) Financial services 
20. We note that foreign equity participation in  Chinese financial instituti ons is limited and that 
no single foreign institution may own more than 20 per cent of the equity in a Chinese financial 
institution (Paragraph 153 on page 146 of WT/TPR /S/199).  Given China’s GATS commitments 
related to banking, and in particular the commit ment that China would eliminate any existing non-
prudential measures restricting ownership, opera tion and juridical form of foreign financial 
institutions in respect of licen sing, could China please outline: 
a) Whether China maintains foreign equity lim its on financial institutions as a matter of 
prudential policy?  WT/TPR/M/199/Add.1 
 Page 31 
 
 
  b) If so, how limiting foreign ow nership in Chinese financial institutions is intended to 
meet prudential policy goals? 
c) Whether China has any plans to eliminate or  relax foreign equity restrictions on 
financial institutions in the foreseeable future? 
d) In addition to the 20 per cent ownership cap  noted in the Secretariat Report, does 
China apply any other type/s of measu re, such as numerical limits on foreign 
participation, that restrict the ownershi p, operation and juridical form of foreign 
financial institutions in the Chinese banking sector? 
21. We note that foreign commercial banks seeki ng to establish a Chinese foreign joint bank must 
have total assets of not less than US$10 billion wh ile foreign banks wishing to establish branches 
must have total assets of not less than US$20 b illion (Paragraph 150 on page 146 of WT/TPR/S/199). 
a) Given that branches are already significan tly limited in their scope of business in 
comparison to subsidiaries, could Chin a please explain the prudential purposes 
behind these differential capital requirements? 
22. We note that China continues to apply r estrictions to the provision of credit card and 
electronic payment services (Paragraph 7 on page 111 of WT/TPR/S/199). 
a) Could China please outline these restrictions? 
b) Could China please outline how these restri ctions comply with China’s specific 
GATS commitments to allow foreign financ ial institutions to provide payment and 
money transmission services, including credit, charge, and debit cards? 
c) Does China plan to allow foreign financia l institutions to issue single brand credit 
cards and provide domestic credit cards to Chinese consumers? 
(iv) Telecommunications 
23. The Secretariat Report highlights the regulatory structure and policies of the 
telecommunications sector (Paragraphs 220-223 on pages 164-165 of WT/TPR/S/199).  The Reference Paper on Basic Telecommunications provid es that "the regulatory body is separate from, 
and not accountable to, any supplier of basic telecommunications services."  
a) Does the creation of the new Ministry of Industry and Information change the 
relationship between the state's shareholding in China's telecommunications carriers and its telecommunications regulatory functions?  
b) What measures are now in place to ensure that the telecommunications regulatory 
authorities are separate from, and not accountable to, telecommunications suppliers? 
Education 
24. The Secretariat Report notes that, while the G overnment's intention is to open the services 
sector further to private and foreign participa tion as a means of boosti ng growth and providing 
alternative employment to agriculture, the pace of  liberalization has been slower than that for 
manufacturing.  As a result, most services sectors are still subject to a high degree of state control and, 
therefore, lack of competition (Paragraph 26 of WT/TPR/S/199). WT/TPR/M/199/Add.1 
Page 32  
 
   a) Given these comments, could China explai n what measures it is taking to liberalise 
trade in education services, and particular ly in relation to provision of education 
services by foreign providers within China. 
 
ARGENTINA
 
 
WT/TPR/S/199, INFORME DE LA SECRETARIA 
 I. EL ENTORNO ECONOMICO  
3) P
OLÍTICAS MACROECONÓMICAS  
i) Política monetaria 
Párrafo 13, página 11  
Con respecto al sistema cambiario de China, este pá rrafo menciona un régimen de "flotación dirigida" 
o "paridad móvil". ¿Podría China informar si tiene  previsto flexibilizar su régimen cambiario? 
4) P
RINCIPALES CUESTIONES DE REFORMA ESTRUCTURAL  
iii) Reforma del sector financiero Párrafo 29, página 18  
Este párrafo hace mención a que las autoridades chin as han emprendido iniciativas para ofrecer a las 
pequeñas y medianas empresas privadas nacionales (PYME) un mayor acceso al mercado de 
capitales; por ejemplo, la creación en 2004 de un sector de mercado específico para las PYME en el 
mercado de valores de Shenzen ¿Podría Chin a detallar cuáles fueron, –además del ejemplo 
mencionado- las iniciativas emprendidas por las autoridades para ofrecer a las PYME un mayor 
acceso al mercado de capitales? 
5) A
CONTECIMIENTOS EN MATERIA DE COMERCIO  
iv) Inversión extranjera 
Párrafo 42, página 23  
Este párrafo hace referencia a la actividad come rcial de las empresas con inversión extranjera 
radicadas en China. ¿Podría China detallar cuáles son los criterios para otorgar la condición de 
empresa con inversión extranjera?  
Párrafo 43, página 23 
 
Este párrafo hace referencia al tratamiento impos itivo preferencial que ofrece China a las empresas 
extranjeras ¿Podría China explicar cuáles son l as características de dicho tratamiento impositivo 
preferencial en lo que respecta a la Inversión Extranjera Directa? 
II. RÉGIMEN DE LA POLÍTICA COMERCIAL:  MARCO Y OBJETIVOS 
6) R
ÉGIMEN DE INVERSIÓN EXTRANJERA  
ii) Marco y procedimientos legislativos Párrafo 75, página 45  
Este párrafo se refiere a que los límites al capital ex tranjero varían de una rama de producción a otra. 
¿Podría China explicar cuáles son los límites al capit al extranjero en las distintas ramas de producción 
nacional?  WT/TPR/M/199/Add.1 
 Page 33 
 
 
  III. POLÍTICAS Y PRÁCTICAS COMERCIALES POR MEDIDAS 
2) M EDIDAS QUE AFECTAN DIRECTAMENTE A LAS IMPORTACIONES  
i) Procedimientos a) Procedimientos aduaneros Párrafo 10, página 51 
 El Informe de la Secretaría indica en este párrafo que en el momento de realizar la declaración en 
aduana, los importadores deben cumplir los requisito s de la Administración de Aduanas y de la 
Administración Estatal General de Supervisión de  la Calidad, Inspección y Cuarentena de China. 
¿Podría China informar cuáles son los principales re quisitos a los que se refiere aquí el Informe?   
Párrafo 11, página 51 
 
En este párrafo el Informe de la Secretaría se re fiere a los proyectos piloto que la Administración 
General de Aduanas ha venido ejecutando desde octubr e de 2005 para reformar el sistema de tránsito 
aduanero regional de China. ¿Podría China describir  con mayor detalle los rasgos más salientes de los 
mencionados proyectos?  
 
b) Inspección previa a la expedición  
Párrafo 13, página 52  
En el párrafo 13, el informe menciona que Ch ina ha introducido una prescripción en materia de 
inspección previa a la expedición mediante la revi sión del Reglamento de aplicación de la Ley sobre 
Inspección de Mercancías de Importación y de Exportación,  la cual entró en vigor el 1º de diciembre 
de 2005. ¿Podría China explicar por qué aún no ha notificado esta prescripción a la OMC? 
 Asimismo, el Informe de la Secretaría indica en este párrafo que China ha designado 23 instituciones 
extranjeras para realizar la inspección previa a la expedición y expedir los certificados 
correspondientes. ¿Podría China info rmar cuál es el mecanismo para designar a esas instituciones y si 
ha enviado personas al extranjero para que realicen esa tarea? 
ii) Valoración en aduana y normas de origen 
b) Normas de origen  Párrafo 15, página 53 
 En este párrafo se hace referencia a que china aplica normas de origen no preferenciales de 
conformidad con el Reglamento sobre normas de origen de los productos de importación y exportación (Decreto N° 416 del Consejo de Estado en 2004). ¿Podría China indicar si todas las 
disposiciones comerciales sobre normas de origen se encuentran disponibles en internet?  Si es así, 
¿se encuentran estas disposiciones en alguno de  los idiomas oficiales de la OMC?  
 
iii) Aranceles 
a) Tipos arancelarios NMF Párrafo 21, página 57  
Este párrafo indica que los aranceles NMF aplicados  "provisionales" (aranceles provisionales) pueden 
ser introducidos o modificados por la comisión ar ancelaria siempre que lo considere necesario. 
¿podría china informar a qué clase de bienes y paí ses se aplican los tipos arancelarios provisionales? 
 WT/TPR/M/199/Add.1 
Page 34  
 
  c) Exenciones y reducciones arancelarias 
Comercio fronterizo Párrafo 36, página 63  
En este párrafo, el informe establece que Chin a aplica trato preferencial, incluso mediante 
preferencias arancelarias, a al gunas actividades comerciales fronter izas. ¿Podría China especificar 
cuál es el fundamento de estas preferencias aran celarias y en qué consisten; y cuáles son las 
actividades comerciales que pueden beneficiarse de las mismas y por qué? 
 
Tráfico de perfeccionamiento 
Párrafo 38, página 64 
 
En este párrafo, el informe indica que, con el fin de reducir el consumo de ener gía y proteger el medio 
ambiente, el gobierno puede no conceder trato preferencial a ciertos productos en régimen de tráfico de perfeccionamiento, pero que no obstante podrían ingresar si pagara n todos los derechos aduaneros 
correspondientes. ¿Podría China explicar cuáles son l as razones para permitir el ingreso de esta clase 
de productos en los casos en que paguen  los derechos aduaneros correspondientes? 
 
iv) Impuestos indirectos que afectan las importaciones 
a) Prohibiciones de importación Párrafo 41, página 65 
 En este párrafo el informe menciona que, además del derecho de importación y del impuesto al valor 
agregado (iva), se aplica en frontera un impuesto es pecial de consumo a ciertos artículos. ¿Podría 
China detallar a qué impuesto se refiere este párrafo, y cuáles son sus características? 
 
Párrafo 43, página 65 
 
En este párrafo el informe se refiere a que, de co nformidad con la Ley de Comercio Exterior, el 
MOFCOM puede dictar prohibiciones o restricciones temporales a las importaciones, que están relacionadas principalmente con restricciones en el marco de convenios internacionales. ¿Podría 
China mencionar cuáles son los productos, además de los diamantes de liberia, que potencialmente 
podrían ser objeto de estas prohibiciones o restricci ones, y podría informar cuáles son los productos a 
los cuáles se han aplicado prohibiciones o restriccion es desde la puesta en vigencia de esta ley? 
 
v) Prohibiciones, restricciones y régimen de licencias de importación 
b) Restricciones y régimen de licencias 
Párrafo 45, página 66  
De acuerdo con este párrafo, los productos sujetos a licencias de importación se publican anualmente 
por el Ministerio de Comercio. ¿Podría China in formar si es posible tener acceso a este listado de 
productos en alguna página Web? ¿Podría el gob ierno Chino especificar qué criterio utiliza el 
Ministerio de Comercio para determinar cuáles son los productos que estarán sujetos a licencias de 
importación? 
 
Licencias no automáticas de importación Párrafo 47, página 66 
 En este párrafo, el informe menciona que pue de rechazarse una solicitud para una licencia no 
automática de importación si la justificación para la  importación "no es convincente" para la autoridad 
de aplicación. ¿Podría China explicar las razones que  se encuentran contempladas en la expresión "no 
convincente"? ¿Podría China brindar información acer ca de la cantidad de solicitudes de licencias que 
han sido rechazadas en el periodo bajo examen?  WT/TPR/M/199/Add.1 
 Page 35 
 
 
  vi) Comercio de Estado 
Párrafo 52, páginas 68  
Este párrafo hace mención a que el mofcom publi ca y ajusta anualmente las listas de productos 
sujetos al comercio de estado, así como de las em presas autorizadas de comercio de estado. ¿Podrían 
las autoridades chinas facilitar un lis tado completo de los productos que  están sujetos a comercio de 
estado o la página web en donde se encuentra publi cado el mismo? ¿Podrían explicar cuáles son los 
criterios que utiliza el MOFCOM para ag regar o retirar productos de esta lista?  
 
vii) Medidas comerciales especiales 
a) Medidas antidumping y compensatorias 
Medidas antidumping Párrafo 55, página 68  
Este párrafo se refiere a que cualquier rama de  producción nacional, persona física o jurídica u 
organización pertinente, en nombre de la rama de producción nacional, puede formular por escrito una 
reclamación antidumping ante el MOFCOM. ¿Podría China detallar cuál es el porcentaje que los solicitantes deben reunir para considerar que act úan en representación de la producción nacional? 
 
viii) Normas y otras prescripciones técnicas a) Normas, certificación y acreditación 
Normas 
Párrafo 70, página 73  
En este párrafo, el informe indica que en China ex isten normas técnicas nacionales, así como también 
sectoriales, locales y empresariales, y que las mismas pueden ser voluntarias u obligatorias. ¿Podía 
China informar si existe un sitio web donde esté di sponible la totalidad de la reglamentación técnica 
de china en materia de importaciones y exportaciones? 
 
3) M
EDIDAS QUE AFECTAN DIRECTAMENTE A LAS EXPORTACIONES  
viii) Financiación y seguro de las exportaciones Banco de Exportación e Importación de China 
Párrafo 139, página 91 
 
En este párrafo, el informe indica que el Banc o de Exportación e Importación de China (Banco 
EXIM), tiene como actividad la prestación de ayud a financiera para fomentar las exportaciones de 
productos mecánicos y electrónicos, y de productos de  alta y nueva tecnología. ¿Podría el gobierno 
chino explicar cuáles son los requisitos que debe cumplir una empresa para acceder a esta ayuda 
financiera?  
4) M
EDIDAS QUE AFECTAN A LA PRODUCCIÓN Y AL COMERCIO  
i) Tributación e incentivos fiscales b) Tributación indirecta 
Impuesto sobre el consumo  
Párrafo 148, página 94  
En este párrafo, el informe hace referencia a una modificación realizada en 2006 sobre el impuesto al 
consumo en virtud de la cual se agregaron alguno s artículos de lujo y productos "que consumen 
recursos". ¿Podrían las autoridades chinas informar  cuál es el fundamento por el cuál se agregaron 
estos productos; y a qué tipo de recursos se refier en? ¿Podrían también especificar cómo se determina 
que un producto "consume menos recursos"?   WT/TPR/M/199/Add.1 
Page 36  
 
  Párrafo 161, página 99 
 
Este párrafo hace mención a que, desde que China in ició su proceso de reforma económica y apertura 
al mundo exterior, se han establecido zonas económicas  especiales y otras zonas para atraer IED. 
Además, se refiere a que las empresas situadas en esas zonas económicas especiales y otras zonas 
recibían trato fiscal preferencial.  ¿Podría China e xplicar qué avances concretos ha hecho China desde 
su incorporación a la OMC para su política impositiva de incentivos a la inversión extranjera directa 
en sus zonas económicas especiales con relación a las aplicadas en otras partes del territorio aduanero 
del país? 
iii) Otras políticas  y medidas en materia de industria 
Párrafo 168, página 102 
 
En este párrafo, el informe menciona que, ad emás de los aranceles, incentivos fiscales y 
subvenciones, se han introducido otros instrumentos pa ra canalizar recursos hacia la industria como el 
crédito "orientado" y diversos "catálogos" en  los que se identifican los sectores que pueden 
beneficiarse de los incentivos. ¿Podría China informar en qué consiste el "créd ito orientado" y cuáles 
son los requisitos que debe cumplir una empresa pa ra acceder a este beneficio? ¿Sobre que bases se 
identifican los sectores incluidos en los "catálogos " mencionados y cuáles son los incentivos de los 
que pueden beneficiarse dichos sectores? 
 
v) Política de competencia y protección de los consumidores 
a) Política de competencia 
Párrafo 208, página 114  
En este párrafo el informe menciona que China se encuentra en un proceso de reforma de la Ley de 
Represión de la Competencia Desleal, el principal instrumento de política de competencia. ¿Podría 
China detallar en qué consiste la reforma? 
 
vi) Derechos de propiedad intelectual 
c) Marcas de fábrica o de comercio Párrafo 229, página 119 
En este párrafo el Informe indica que cualquier pers ona puede oponerse al registro de una marca de 
fábrica o de comercio que se haya sometido a un ex amen preliminar y haya sido aprobada. ¿Podría 
China informar si se han registrado oposiciones por parte de ciudadanos o empresas extranjeras? 
Asimismo, para el caso de las marcas de fábric a o de comercio que ya se han empleado en otros 
países pero que no están registradas en China, se indica que no podrá registrarse una imitación o traducción de la misma si se trata de una marca not oriamente conocida.  ¿Podría China informar cuál 
es el criterio para determinar qué marcas son consideradas "notoriamente conocidas"?   
e) Otros derechos de propiedad intelectual 
Párrafos 238 y 239, página 121  
En estos párrafos se indica que las indicaciones geográficas se registran en la Oficina Estatal de 
Marcas de Fábrica o de Comercio y que también est án reglamentadas por la AQSIQ que, en junio de 
2005, publicó el Reglamento sobre la protección de productos de indicaciones geográficas. ¿Podría 
China informar cómo interactúan ambos sistemas de  registro y cuáles son las competencias de cada 
uno de ellos?   WT/TPR/M/199/Add.1 
 Page 37 
 
 
  IV. POLÍTICAS COMERCIALES POR SECTORES 
1) A GRICULTURA  
i) Características y evolución del mercado Párrafo 13, página 127  
En este párrafo se hace referencia a que, "aún cuando los cereales siguen siendo el cultivo más 
importante de China, se ha pasado de producir alim entos tradicionales de primera necesidad (arroz y 
trigo) a producir maíz y otros cultivos más re ntables como frutas y hortalizas". ¿Podría China 
especificar si, entre esos cultivos, se ha aumentado la superficie sembrada de soja? 
 
3) E
NERGÍA  
ii) Subsectores fundamentales c) Electricidad Medidas de protección del medio ambiente Párrafo 74, página 144 
 Este párrafo establece que, "si bien el carbón seguirá  siendo el soporte principal del suministro de 
energía de china, la diversificación de la comb inación de formas, fuentes y proveedores de energía 
puede producir importantes beneficios para el medio ambiente y la seguridad". ¿Podría China 
informar cuál es su punto de vista con relación al  desarrollo de los biocombustibles como fuente 
alternativa de energía? 
 
4) 
SECTOR MANUFACTURERO  
i) Hierro y el acero b) Marco normativo y reestructuración Párrafo 86, página 147 
 En este párrafo el informe indica que China aplica un a política tendiente a fomentar el uso de equipo 
y tecnología nacionales, haciendo hincapié en la necesidad de producir ese tipo de equipo en el país. 
En este sentido, el Gobierno presta asistencia a modo  de devoluciones fiscales, descuento en los tipos 
de interés y fondos para la investigación y desarrollo  para proyectos importantes relativos al hierro y 
el acero en los que se utilicen equipos nacionales.  ¿Podría China explicar cómo se instrumenta la 
mencionada asistencia? 
 
HONG KONG, CHINA
 
 
Anti-dumping (AD) measures 
(WT/TPR/S/199, page 60, Paras. 55 & 57) 
1. We note from the Secretariat Report that the d ecision to levy AD duties is made by the Tariff 
Commission of the State Council, based on suggestions made by MOFCOM.  We are 
interested in knowing whether the decision ma king of the Tariff Commission of the State 
Council is one of formality or substantive. If th e latter, what are the considerations of the 
Commission, apart from the suggestions of MOFCOM, in taking a decision?  
Competition 
(WT/TPR/S/199, page 100, Para. 211) 
2. We note from the Secretariat Report that im plementing regulations for the new Anti-
Monopoly Law had not been formulated at the tim e of the Report.  According to the Report, 
the Anti-Monopoly Law will enter into force in August 2008.  We would appreciate an update 
from China regarding progress in respect of the implementing regulations. WT/TPR/M/199/Add.1 
Page 38  
 
  Telecommunication services 
(WT/TPR/S/199, page 164, Para. 221) 
 3. We note from the Secretariat's report that China is drafting a telecommunications law.  We 
would like to know the latest development on the law drafting and the expected timeframe 
for implementation of the telecommunications la w for replacement of the existing regulations 
in the telecommunications sector. 
 
Tourism services 
(WT/TPR/S/199, page 187, Para. 329) 
 
4. As reflected in the Secretariat's report, Ch ina has initiated fundamental reforms in the hotel 
industry so as to prepare domestic hotels, particularly state-owned ones, for global competition.  We are interested to know more details of these fundamental reforms in enhancing domestic hotel industr y in facing global challenges. 
 
UNITED STATES
 
 
The United States welcomes this opportunity to part icipate in the second Trade Policy Review of the 
People’s Republic of China (Chi na) since China acced ed to the WTO on December 11, 2001, by 
submitting questions related to the Secretariat’s report (report).  The purpose of the Trade Policy 
Review Mechanism is "to contribute to improved adherence by all Members to rules, disciplines and 
commitments .  and hence to the smoother functioning of the multilateral trading system, by achieving greater transparency in, and understanding of, the trad e policies of Members."  In the case of China, 
Members recognized the overriding importance of tr ansparency through a host of provisions in 
China’s Protocol of Accession and accompanying Working Party Report.  Since China’s accession to 
the WTO, China has made notable improvements in th e transparency of its trade regime, particularly 
through the many notifications that it has made  to the WTO’s councils and committees as well as 
through its increased use of official journals, othe r publications and the Internet to publicize new or 
modified trade-related laws, regulations and other m easures.  Nevertheless, there remains much to be 
done to further improve transparency in China.  This is a critically important area, both from a governmental perspective and from a business perspective.    I. ECONOMIC ENVIRONMENT (3) M
ACROECONOMIC POLICIES  
(i) Monetary policy 
 1. In paragraphs 11 through 15 of Part I, the re port describes China’s exchange rate regime, 
which has been classified by the International Mone tary Fund as a "crawling peg" since August 2006.   
Among other things, the report explains that "[a] mo re flexible exchange rate regime could enable 
China to operate a more independe nt monetary policy, which would be better suited to achieving a 
low and stable rate of inflation in both product and asset markets and allow market forces to assume a 
greater role in determining interest rates."  The report also explains that "[a]n appreciation of the 
exchange rate could increase domestic consumpti on insofar as it reduces import prices and thereby 
stimulates consumption of imported goods . . . ."     
a. Please describe China’s current plans for moving toward a more flexible exchange 
rate regime. 
 
b. It is unlikely that a completely freely fl oating exchange rate can be achieved with the 
current set of regulations and controls in  place in China.  In China’s view, what 
reforms are still needed for China to be in a position to adopt a completely freely 
floating exchange rate?  WT/TPR/M/199/Add.1 
 Page 39 
 
 
  (ii) Fiscal policy 
 
2. Paragraph 17 of Part I of the report st ates that the State Council announced in 
September 2007 that a special budget to utilize stat e-owned enterprise (SOE) dividends for social 
expenditures and SOE reform would be set up in 2008. 
a. What is the timeframe for the implem entation of the SOE dividend payment 
requirement?  
 b. What percentage of profits will SOEs be  required to return to the Government under 
this program, and how much does the G overnment expect SOE dividends to 
contribute as a percentage of total Government revenues in the coming 5-10 years? 
 
3. Paragraph 20 of Part I states that China has unde rtaken reforms to improve fiscal transparency 
including the "Golden Fiscal Project," which aims to computerize the budgeting and public 
expenditure processes in five years;  and a new budget classification system introduced in 2006.  It 
also states that the budget committee of the National People's Congress (NPC) is formulating a new 
law on inter-government fiscal transfers, and is revising the Budget Law .   Please provide us with an 
update on the Golden Fiscal Project.  Will this pr oject apply to provincial and local governments as 
well as the central government?  How does the NPC pl an to address transparen cy concerns regarding 
the inter-government fiscal transfer payments process? 
 
(4)  M
AIN STRUCTURAL REFORM ISSUES  
(ii)  Tax reforms 
 
4. In paragraph 22 of Part I, the report states that China is trying to move from a production-
based value-added tax (VAT) system to a consumption-based VAT system.   
 
a. Please explain how the VAT is calculated under the pilot projects that use a 
consumption-based VAT system and how this calculation differs from the VAT calculation under China’s current production-based VAT system.    
b. In China’s view, what would be the likely effects of changing from a production-
based VAT system to a consumption-based VAT system throughout the country? 
 
(iii) Financial sector reform 
 
5. In paragraph 28 of Part I, the report states th at reform of the bond market is ongoing.   
 
a. Please explain whether policy banks still account  for the majority of bonds issued in 
China, and whether state-owned commercia l banks still account for the majority of 
purchases of bonds issued by policy banks .  Please also describe the terms and 
conditions under which bonds issued by policy banks are purchased by state-owned 
commercial banks. 
 b. Please identify the criteria that qualify a company to issue bonds.  Please also 
describe any restrictions or limitations on the types of bonds that a company can issue 
and any restrictions or limitations on the terms and conditions under which those 
bonds can be issued. 
 WT/TPR/M/199/Add.1 
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  (iv)  Labour market 
 
6. In paragraph 33 of Part I, the report states th at "[c]ertain employment restrictions under the 
‘Hukou’ (worker registration) system have been re laxed to promote the development of rural areas 
and address income inequality."  The accompanying footnote 81, however, only provides one example 
to support this statement, i.e., overseas graduat es returning to China are exempt from the worker 
registration requirements.  Because these graduate s are typically sought after by urban employers 
offering high salaries and good benefits packag es, the relaxation on the worker registration 
requirements for this particular population of job seekers would not seem to address the issues of rural 
development and rural-urban income inequality.  In deed, it would seem to intensify the urban-rural 
income inequality.  Please explain what other steps China has taken to relax the Hukou system.  Does 
China have plans to further reform the Hukou system and relax restrictions on ru ral worker migration?  
What is China’s timetable?  Please explain.  
7. In paragraph 34 of Part I, the report states that  "[t]he All China Federation of Trade Unions 
(ACFTU) and the Central Government have made improved working conditions for migrant workers 
an important policy goal."  The report notes that the Ministry of Labour and Social Security issued regulations that provided specific rules for the cons ultation process for collective contract bargaining 
in January 2004.  However, it is the United Stat es’ understanding that these regulations became 
obsolete when the new Labour Contract Law  went into effect on 1 January 2008.  To date, China has 
not issued any implementing regulations for the Labour Contract Law .  Please explain how the 
absence of implementing regulations for the Labour Contract Law  is affecting the consultation 
process for collective contract bargaining.  Please also  explain how China is attempting to address this 
situation. 
 
II.  TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 
(2)  I
NSTITUTIONAL AND LEGAL FRAMEWORK  
(iii)  Transparency  
 
8. In paragraphs 21-29 of Part II, the report examin es the transparency of China’s trade regime.  
Transparency is one of the fundamental principl es of the WTO Agreement, and it is reinforced 
throughout China’s Protocol of Accession.  Overall,  the report concludes that  China’s trade regime 
remains "complex and opaque," leaving "scope for ad ministrative discretion and thus corruption."  In 
the United States’ view, systemic opacity also fru strates the efforts of foreign – and domestic – 
businesses to achieve all of the potential benefits of  China’s WTO accession.   Transparency, unlike 
opacity, permits markets to function effectively a nd reduces opportunities for officials to engage in 
trade-distorting practices behind closed doors.  China’ s transparency obligations in many ways require 
a profound historical shift.  While China has made important strides to improve transparency across a 
wide range of national a nd provincial authorities, much work remains.   
 
a. The United States welcomed the step China took in 2006 to adopt a single official 
journal for laws, regulations and other meas ures pertaining to or affecting trade in 
goods, services, trade-related intellectual property rights or the control of foreign exchange in 2006.  Since then, however, it appears that China has encountered difficulties in ensuring full participation by  all relevant government entities, in part 
because of the discretion afforded each agen cy as to whether or not a particular 
measure was trade-related.  In order to address this problem, has China considered 
adopting a single official journal for all laws  and regulations, regardless of whether or 
not they fall into the trade-related category? 
 b. The United States notes that China has not  yet implemented a mandatory practice of 
providing advance notice and an opportuni ty for comment on proposed measures 
before they are finalized.  To date, noti ce-and-comment remains an optional practice  WT/TPR/M/199/Add.1 
 Page 41 
 
 
  in China.  When will China implement a re liable and predictable regime of notice and 
comment for all new or revised measures?  
 
(5) T RADE AGREEMENTS AND ARRANGEMENTS  
(iii) Bilateral agreements 
 
9. Paragraph 59 of Part II of the report discusses the China-Pakistan Free Trade Agreement 
(FTA), which entered into force on 1 July 2007.  A pr eliminary analysis of this FTA indicates that, for 
both China and Pakistan, nearly 20% of their tota l tariff lines are excluded from any commitments.  In 
addition, for China, only 36% of its total tariff lines and 30% of its imports from Pakistan become 
duty-free after full implementation.  Please explain wh y this FTA appears to eliminate tariffs on so 
few tariff lines and such a limited amount of trade.  10. Paragraphs 60-65 of Part II of the report refe r to a series of ongoing FTA negotiations that 
China is pursuing with Australia, New Zealand, the Gulf Cooperation Council, Iceland and the 
Southern African Customs Union as well as with othe r potential bilateral agreement partners.  Please 
provide updates on the status of each of these negotiations. 
 
III. TRADE POLICIES BY MEASURE 
(2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(i) Procedures 
 
11. Paragraph 13 of Part III of the report notes th at China introduced a preshipment inspection 
(PSI) requirement through its revision of the Implementing Regulation of the Law on Import and 
Export Commodity Inspection, which came into fo rce on 1 December 2005, but has not yet notified 
this requirement to the WTO. When does China in tend to notify this requirement to the WTO, as 
required by the Agreement on Preshipment Inspection?   Can China also clarify whether it has sent 
people or institutions abroad to conduct PSI inspections?  
(iii)  Tariffs 
 
12. Paragraph 35 of Part III of the report explains  that "[d]uty exemptions and reductions may 
apply to goods imported into or exported from desi gnated areas, by designated enterprises, or for 
designated uses, ‘in accordance with the provisions set  out in the relevant regulations by the State 
Council.’"  Footnote 35 further explains that "desi gnated enterprises" refers to enterprises for which 
certain policies are designed and implemented on the basis of type of enterprise, such as foreign-
invested enterprises (FIEs).  Other than FIEs, what types of enterprises are included in the category of 
"designated enterprises" for purposes of receiving duty exemptions or reductions?  Please also 
describe the duty exemptions or reductions receive d by "designated enterprises" other than FIEs.  
 
(v)  Import prohibitions, restrictions, and licensing  
 
13. Paragraph 42 of Part III of the report notes that China prohibits the importation of second-
hand precision equipment and used articles of HS  sections 16 and 17 (machinery and transport 
equipment).  Do these import prohibitions include previously used products that have been 
refurbished or remanufactured?   If so, please explai n China’s justification for maintaining an import 
prohibition on refurbished and remanuf actured machinery and equipment. 
 
14. Paragraph 42 of Part III of the report indicates that quantitative restrictions on import licenses 
were eliminated in January 2005 and that China notified its import regime in October 2006.  Can 
China explain whether quantitative values are still cap tured or recorded on import licenses?  If so, 
what is China’s rationale for mandating that importe rs report the volume of their intended purchases if WT/TPR/M/199/Add.1 
Page 42  
 
  no restrictions are in place?  If it is for sta tistical purposes, would China agree that the same 
information could be obtained when the shipments clear customs?  15. The United States appreciates the information pr ovided in paragraph 50 of Part III of the 
report on the issuance of import licenses, including the explanation that import licenses are normally 
issued immediately or, in special circumstances, within 10 days.  The United States notes that U.S. 
exporters of recycled scrap have expressed c oncerns about the import license renewal process 
applicable to them, particularly with regard to the amount of time it takes for them to receive a license 
renewal from China’s General Administration of Quality Supervision, Inspection and Quarantine 
(AQSIQ).  This process has reportedly taken up to 3 months.  What plans does China have for 
expediting the renewal process before AQSIQ? 
 16. Paragraph 50 of Part III of the report notes that automatic import licenses are valid for 
180 days.  What is China’s rationale for imposing a time limit on the validity of an automatic import 
license? 
 
(vi)  State trading  
 
17. Paragraph 52 of Part III of the report discusses th e list of goods subject to state trading, but 
notes that the Chinese authorities did not identify the cr iteria used to adjust th at list.  Please identify 
those criteria. 
 
(vii)  Contingency measures 
 
18. Paragraph 56 of Part III of the report states:  "Acco rding to the rules, information related to an 
industry-injury investigation, apart from classified information, must be notified to all interested 
parties."  Please explain what steps China’s Mini stry of Commerce (MOFCOM ) has taken since 2006 
to ensure all interested parties have timely access to adequately detailed, non- confidential versions of 
all submissions by other interested parti es and all documents ge nerated by MOFCOM. 
 19. Paragraph 57 of Part III of the report states that "provisional measures can . . . include 
imposition of provisional anti-dumping duties, or provision of deposits, bonds, or other forms of 
guarantees."  Please explain what steps MOFCOM takes to confirm that China’s General 
Administration of Customs collects the correct amount of anti-dumping duty and that other charges, such as the VAT, are not assessed on the anti-dumping duty.  
(viii)  Standards and other technical requirements 
 
20. In paragraphs 67 to 69 of Part III, the report d escribes China’s efforts to increasingly align its 
national standards with international ones.  R ecently, however, China an nounced new mandatory 
requirements covering a broad range of informati on technology products (suc h as routers, firewalls, 
operating systems, smart cards, anti-spam products , etc).  By May 2009, these products must comply 
with mandatory third-party testing and certificat ion to determine their conformity with new 
information security regulations.  While most WTO Members (including the United States) may share 
the goal of maximizing the security of networks, th e United States is aware of no other WTO Member 
that has instituted mandatory testing and certific ation requirements for comme rcial products in order 
to achieve information security goals.  Given the burdensome and trade-restrictive effects of these 
requirements, how does China justify its extreme a pproach, considering that no other WTO Member 
appears to have instituted any comparable requirements? 
 
21. In paragraph 69 of Part III, the report notes th at the Standardization Administration of China 
(SAC) "publishes a catalogue that prioritizes the produc ts for which standards are to be aligned with 
international ones."  Please describe the criteri a used by SAC in prioritizing these products.  WT/TPR/M/199/Add.1 
 Page 43 
 
 
  22. Paragraph 74 of Part III of the report refe rences a number of different government bodies 
within China that have overlapping responsibilities fo r developing and enforcing food standards.   
 a. Can China clarify the process for veri fying that national standards are being 
uniformly applied to domestic and imported food products?  For example, can China 
verify that the national standards being used to test the food safety of imported 
products are also being used to test the food safety of the like domestic products sold at wholesale, wet and retail markets?   
b. Does China have data on the quantities of  disqualified imported food products versus 
disqualified like domestic  products?  If so, what does the data show? 
 
c. What steps is China taking to ensure and demonstrate food safety standards are based 
on science and an appropriate level of protection? 
 23. Paragraph 76 of Part III of the report describes China’s efforts in the area of food safety.  
What steps is China taking to ensure that good agricultural practices, good aquacultural practices and 
good manufacturing practices are taken into account?   24. Paragraph 82 of Part III of the report discusses China’s certification of animal feed, a process 
that is burdensome and time-consuming.  
 
a. What steps is China taking to ensure that the facilities approval process is completed 
in a manner that will avoid unnecessary di sruptions to trade and still provide the 
appropriate level of protection?    
 b. China requires that product registration requests be processed by the Ministry of 
Agriculture (MOA), and this process can take longer than one year.  What steps is 
China taking to shorten the processing time? 
 c. China’s product registration process requir es that companies provide the formula for 
their products, which involves their intellectual property.  Can China explain why it requires this level of detail to ensure the saf ety and quality of anim al feed?  Is China 
considering alternative, less trade-distorti ng requirements for registering animal feed 
that will still provide the appropriate level of protection?  Please explain. 
 d. China prohibits the presence of  any ruminant materials in pet food.  To confirm that 
products are ruminant-free, China conducts Polymerase Chain Reaction (PCR) tests, 
instead of the more reliable enzyme-linked immunosorbent assay (ELISA) tests.  
False positives with the PCR tests are a r ecurring problem due to unreliable sampling 
methods.  What steps is China taking to begin using the ELISA tests?   
 
25. Paragraph 85 of Part III of the report identif ies the various laws and agencies involved in 
China’s sanitary and phytosanitary (SPS) regime.  The United States notes that publication and 
adoption of food safety and quality standards without  proper notification to the WTO is still occurring 
on a frequent basis.  What steps is China taking to remedy this problem?  26. Paragraph 91 of Part III of the report notes Chin a’s membership in international standards 
developing organizations such as the World Orga nization for Animal Health and CODEX.  As a 
member of these organizations, can China clarify when  it intends to align its import policies related to 
(a) bovine spongiform encephalopathy (BSE) and (b) Av ian Influenza with the international standards 
developed by the World Organization for Animal He alth?  If China does not plan to do so, will China 
instead identify the risk assessment data  that supports its import policies? WT/TPR/M/199/Add.1 
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  27. Paragraphs 93, 94 and 95 of Part III of the re port outline China’s food labelling requirements.  
The United States understands that in November 2007 China notified its Administrative Measures on 
Food Nutrition Labelling  to the WTO.  
 a. In reply to comments submitted by the Unite d States, China indicated that a transition 
period for the nutrition labelling requirement s would be established.  China also 
indicated that it was consulting with stake holders regarding the appropriate length of 
time for this transition period and was consid ering a transition period of not less than 
two years from the official adoption date of  its measure.  Has China determined the 
length of the transition period? 
 
b. Could China explain how it derived the methodologies proposed for calculating the 
various nutrient amounts required to be listed on nutrition labelling panels? What 
scientific data or other bases did China use to develop the nutrient reference values? 
 
28. Paragraph 94 of Part III of the report states that "certificates for sale and prior approval by the 
AQSIQ are no longer required."  Can China confirm that this statement is correct? 
 
(ix)  Government procurement 
 
29. In paragraph 97 of Part III, the report explains that the Government Procurement Law  does 
not apply to SOEs.  Please identify the laws, regulat ions, rules, policies, directives and/or guidance 
that apply to procurement by SOEs.  30. Paragraphs 100 and 101 of Part III of the re port describe the goods, projects and services 
subject to procurement pursuant to China’s Government Procurement Law  and explain that the 
Chinese authorities use both "centralized" a nd "decentralized" procurement methods.   
 a.  What is the process for adding goods,  projects and services to the Centralized 
Procurement Catalogue?  To what extent is  the increase in "centralized" procurement 
in Table III.6 the result of the addition of goods, projects and services to the Centralized Procurement Catalogue? 
 
b.  Please describe when and by whom "decen tralized" procurement may be undertaken.  
Also, what is the process for approving th e use of "decentralized" procurement? 
 
31. Paragraph 105 of Part III of the report discusses th e rights of suppliers who believe that they 
have been or are being unfairly excluded from procurement processes or treated in a discriminatory 
way. 
 a.  If a procuring agency, the Ministry of Finance or a court finds that a supplier has been 
unfairly excluded from the procurement process or treated in a discriminatory way, how does that finding affect the procurement?  For example, is the procurement 
suspended?  What types of remedies can be ordered? 
 b.  How many lawsuits were filed by supplie rs in 2006?  Which courts have jurisdiction 
to hear these lawsuits? 
 
(3)  M
EASURES DIRECTLY AFFECTING EXPORTS  
(ii)  Export taxes 
 
32. Paragraph 112 of Part III of the report discusses the export duties that China has imposed on a 
large number of products.  Currently, China applies export duties to more than 334 tariff lines (at the  WT/TPR/M/199/Add.1 
 Page 45 
 
 
  8-digit level).  The report explains that these expor t duties "tend to increase the domestic supply of the 
products concerned.  As a consequence, their domes tic prices tend to be lower than would otherwise 
be the case," and therefore the export duties "may implicitly assist domestic downstream processing of the products concerned."  The report adds that  "[n]ot fully rebating VAT on exports of certain 
products has a similar outcome."  The United States notes that, in Section 11.3 of Part I of China’s 
Protocol of Accession, China committed not to impose export duties on any goods not appearing on 
the list of goods subject to export duty in Annex 6 of  its Protocol of Accession.  Annex 6 only lists a 
total of 84 products at the 8-digit level.  For each  of the tariff lines not listed in Annex 6, please 
explain how China considers the export duty to  be compatible with its WTO commitments. 
 (iii)  Tax rebates on exports  
 
33. Paragraphs 115 and 116 of Part III of the report explain that e xporters are generally entitled to 
VAT rebates, except that the VAT rebate for partic ular products has periodically been reduced or 
eliminated in order to discourage exports and meet  industrial development goa ls.  The report describes 
this practice of periodically reducing or eliminati ng VAT rebates as "a levy on exports, which may, in 
turn, constitute an assistance to downstream proce ssing of the products affected."  The Chinese 
authorities reportedly disagree with this characteriza tion, as in the past.  In the United States’ view, 
China resorts to this practice in part because it has not yet developed a fu lly functioning market 
economy and therefore cannot simply leave it to the ma rket to bring about the necessary adjustments.  
The United States continues to urge China to und ertake the economic reforms necessary for it to 
complete its transition to a market economy.  Does China have any plans to phase out its practice of 
periodically reducing or eliminating VAT rebates?  Please explain. 
 
(v)  Export prohibitions, restrictions and licensing 
 
34. In paragraphs 121-124 of Part III, the report discusses the export quotas that China maintains 
on numerous products.  The report notes that ma ny of these export quotas involve base metals and 
other important raw materials.  The United States remains seriously concerned, in particular, about 
China’s export quotas (and related export licensi ng requirements) on anti mony, bauxite, coke, 
fluorspar, indium, magnesite, molybdenum, rare earths , silicon carbide, talc, tin, tungsten and zinc.  
China maintains these export quotas despite  the fact that it is the world's leading producers of most of 
these raw materials, and despite the fact that China appears to mainta in no comparable restrictions on 
domestic production or consumption of these raw materials.  China’s export quotas on these raw 
materials can significantly disadvantage U.S. a nd other foreign producers, which use these raw 
material inputs to make a wide  range of downstream products, such as steel, chemicals, ceramics, 
semiconductor chips, refrigerants, medical imagery,  aircraft, refined petroleum products, fiber optic 
cables and catalytic converters , among numerous others.  Export quotas create disadvantages for 
foreign producers by artificially increasing export pri ces for these raw materials, which also drives up 
the world prices.  At the same time, export quot as artificially lower domestic prices for these raw 
materials due to domestic oversupply, enabling domestic downstream producers to produce lower-
priced products from these raw materials and thereby creating significant advantages for domestic downstream producers when competing against fore ign downstream producers both in the domestic 
market and in export markets.  Moreover, in Chin a, the export quotas are part of an export regime, 
which also includes export duties, export VAT re bates and other measures – a regime that "has 
become considerably more restrictive" since Ch ina’s Trade Policy Review in 2006, according to the 
report.  
a. For each of the raw materials identified above, please separately explain how China 
justifies its use of the export quotas under Article XI of the General Agreement on 
Tariffs and Trade 1994 and identify any measur es relevant to China’s justification. 
 WT/TPR/M/199/Add.1 
Page 46  
 
  b. Please separately describe China’s plans for eliminating the export quotas on each of 
the raw materials identified above.  If Chin a does not have any such plans, please 
explain why it does not. 
 c.  The United States understands that Chin a has not notified to the WTO any of the 
export quotas on the 12 raw materials iden tified above, despite China’s commitment 
in paragraph 8.1(b) of Part I of China’ s Protocol of Accession to notify all export 
quotas "listed separately by HS tariff line a nd with the quantities associated with the 
restriction... and the justification for mainta ining the restriction or its scheduled date 
of termination."  If the United States’ understanding is correct, please indicate when 
China will submit the required notifications. 
 
(viii)  Export promotion and marketing assistance 
 
35. In paragraph 137 of Part III, the report stat es:  "The authorities state that China does not 
provide export subsidies."  However, the United St ates has previously submitted questions before the 
Committee on Subsidies and Countervailing Measu res identifying and requesting additional 
information on a number of subsidy programs admi nistered by sub-national governments in China 
that appear to provide financial incentives th at are contingent upon exportation.  See 
G/SCM/Q2/CHN/28 and G/SCM/Q2/CHN/33.  To date , in response to these questions, China has 
stated only that it could not yet confirm the details  provided by the United States.  Has China been 
able to confirm those details and determine whet her the sub-national governments are maintaining 
export subsidies?  When will China be prepared to  notify all subsidies maintained by sub-national 
governments?  36. Paragraph 141 of Part III of the report explains  that the functions of the Export-Import Bank 
of China (EXIM Bank) include financial support to  promote exports of me chanical and electrical 
products and high and new technol ogy products, including through export credit and export buyer’s 
credit.  Paragraph 139 explains that the EXIM Bank granted US$102.8 billion in export credits in 
2006, an increase of 25% over the previous year.  Given that mechanical and electrical products account for the largest share of Ch ina’s exports, and given the rece nt rapid growth in the export 
volume and value of these products, please explain why EXIM Bank financing is still necessary for 
these products.   
 37. Paragraph 141 of Part III of the report st ates that the China Export & Credit Insurance 
Company (SINOSURE) promotes exports, in partic ular high value-added and high-tech capital goods 
by implementing government policy on export credit insurance and providing credit insurance to 
exporters.  Please identify the criteria used for sel ecting "high value-added" and "high-tech" capital 
goods exports.  Are the terms and conditions for the export credit insurance provided to exporters of 
"high value-added" and "high-tech" capital goods  more favourable than those provided by 
SINOSURE to other exporters?  Please explain.  (4)  M
EASURES AFFECTING PRODUCTION AND TRADE  
(i)  Taxation and tax incentives 
 
38. Paragraph 151 of Part III of the report states that, in 2006, VAT rebates were increased from 
13% to 17% on IT and high-tech products with a view to removing the potential impediment to the 
export of the products concerned.  Under the Policies for Encouraging the Development of Software 
Industry and Integrated Circuits Industry , issued on 14 July 2000 by the State Council, manufacturers 
of integrated circuits (or semiconductors) are aut horized to import raw materials without having to 
pay VAT on these imports.  Please explain the administra tive controls that are in place to ensure that 
exporters are not provided with VAT rebates for integr ated circuits and products containing integrated 
circuits to the extent that those products incor porate raw materials that were imported VAT-free.  WT/TPR/M/199/Add.1 
 Page 47 
 
 
  39. Paragraph 155 of Part III of the report describes China’s new Enterprise Income Tax Law , 
which went into effect on 1 January 2008.  Para graph 156 states that incentives for investors in "less-
developed regions" such as western China and act ivities the Government of China designates as 
"encouraged" remain in place.   
 
a. Are the above-referenced tax incentives that  remain in place only available to FIEs, 
or are they available to all enterprises in China?   
 
b. Is the northeastern region of China consid ered to be a "less-developed region" for 
purposes of the Enterprise Income Tax Law ?  Are enterprises located in this region 
eligible for the tax incentives?  
 c. Are the "encouraged" activities the on es set forth in catalogues such as the Catalogue 
for the Guidance of Foreign Investment Industries , issued by the State Council on 
7 November 2007?  If so, please identify all of those catalogues.  If not, please explain how China decides which industri es to designate as "encouraged" and how 
often it adds to or subtracts from this list. 
 40. Paragraph 160 of Part III of the report explains that the Enterprise Income Tax Law  will 
gradually phase out tax incentives provided to FIEs ov er a five-year transition period.  Please explain 
how these tax incentives are being phased out, includi ng whether the phasing-out will be the same for 
all industries and companies or different for certain industries or companies.  41. Paragraph 161 of Part III of the report explains  that certain tax incentives provided to FIEs 
located in special economic zones are being "gra ndfathered" after the entry into force of the 
Enterprise Income Tax Law . 
 a. Please describe the tax incentives that con tinue to be provided to FIEs located in 
special economic zones. 
 b. Are these tax incentives available in othe r types of zones as well?  If so, please 
explain. 
 c. What are the eligibility criteria for enterprises to receive these tax incentives?  
 
d. Please describe the steps that the Nationa l Development and Reform Commission, the 
Ministry of Land and Resources and the Ministry of Construction take when 
reviewing and assessing the qualifications of special economic zones and other 
development zones.  Please also explain the criteria that a local government needs to satisfy in order to establish a nd maintain a development zone. 
 
(ii)  Direct transfers and non-tax subsidies 
 
42. Paragraph 165 of Part III of the report states that the EXIM Bank continues to provide 
subsidized loans.  It explains that the EXIM Ba nk "provides financial support to promote exports of 
mechanical and electronic products, and high and new technology products . . . ."  Please explain in 
what way these loans are subsidi zed.  Does China consider these loans to be prohibited export 
subsidies under Article 3 of the Subsidies Agreement?   If not, why not?  If so, please describe China’s 
plans for withdrawing these subsidies.  
 
43. Paragraph 165 of Part III of the report explai ns that the China Development Bank provides 
long-term financial support for industries of "key importance."   
 WT/TPR/M/199/Add.1 
Page 48  
 
  a.  Please explain the criteria that must be met in order to be considered an industry of 
"key importance," and identify the industries that are currently considered to be of 
"key importance."   
 b. Please describe the long-term financial support provided to these industries. 
 
c. Please also explain the reasons for the planned injection of $20 billion into the China 
Development Bank, as noted in paragra ph 159 of Part IV of the report. 
 44. Paragraph 167 of Part III of the report refers to  China’s "Rise of Central China" strategy.  
Please describe the objectives of this strategy an d the nature of any financial support provided 
pursuant to it.    
(iv)  State-owned enterprises, privatization, and corporate governance 
 
45. Paragraph 181 of Part III of the report explai ns that SOEs may be registered under the Law on 
Industrial Enterprises Owned by the Whole People  or under the Company Law .  It also explains that 
Communist Party of China (CPC) committees play an important management role in companies that 
are registered under the Law on Industrial Enterprises Owned by the Whole People .   
 a. How many SOEs are still registered under the Law on Industrial Enterprises Owned 
by the Whole People ?  In which industries do these SOEs operate? 
 
b. Do CPC committees play any role in SOEs registered under the Company Law ?  If 
so, please explain. 
 
46. Paragraph 187 of Part III of the report explai ns that 51% of shares in SOEs in "resource-
based" industries must be reserved for the State, 51% of shares in SOEs in "high-tech" industries must 
be reserved for the State and 35% of shares in SOEs  in "manufacturing" industries must be reserved 
for the State.  Please specify the industries that qualify as (a) "resource-based" industries, (b) "high-
tech" industries and (c) "manufacturing" industries. 
 
47. Paragraph 189 of Part III of the report states th at the profitability of SOEs varies by region 
and the size of the SOEs.  Please describe how the profitability of SOEs varies (a) by region and 
(b) the size of the SOEs.  Please also expl ain the factors that cause these variations. 
 (v)  Competition and consumer protection policy 
 
48. In paragraphs 211 through 214 of Part III, the report discusses several important aspects of 
China’s new Anti-Monopoly Law (AML), which becomes effective 1 August 2008.   
 
a. What are China’s plans for implementation of the AML given the very tight 
timeframe between now and August 2008, the AML's scheduled effective date?  
 b. Does China expect to publish additional draf t regulations, either in advance of the 
August 2008 effective date of the AML, or after?  If so, what will these regulations 
cover or address?  For these and other AML implementing regulations, whether 
prepared before or after August 2008, will tr ansition rules be adopted that will ensure 
that business operators have sufficient time to  adjust to new AML rules as they come 
into effect?       WT/TPR/M/199/Add.1 
 Page 49 
 
 
  (vi)  Intellectual Property Rights 
 
49. In paragraph 218 of Part III, the report states in a footnote that China made a reservation on 
paragraph 1 of Article 14 of the WIPO Perfo rmances and Phonograms Treaty, which addresses the 
right of making available of phonograms.  What ar e China’s reasons for making this reservation?  
Does China have any plans to remove the reservation?  Please explain. 
 50. Paragraph 220 of Part III of the report no tes that China is currently revising its Patent Law .   
 
a. What is China’s timetable for completing its revisions to the Patent Law ?  The United 
States understands that the State Council has selectively circulated different iterations 
of draft revisions to the Patent Law .  Does China intend to circulate a draft of the 
revisions to the Patent Law  for public comment before it is finalized, as required by 
Section 2(C)(2) of Part I of China’s Protocol of Accession? 
 
b. The report explains that one of China’s purposes in revising the Patent Law  is to 
prevent the "abuse of patents."  Please expl ain what China means by the "abuse of 
patents" and provide examples of situations  in which the "abuse of patents" takes 
place. 
 51. Paragraph 226 of Part III of the report notes that China is currently revising its Trademark 
Law.  What is China’s timetable fo r completing its revisions to the Trademark Law ?  The United 
States understands that the State Council has selectiv ely circulated different iterations of draft 
revisions to the Trademark Law .  Does China intend to circulate a draft of the revisions to the 
Trademark Law  for public comment before it is finalized, as required by Section 2(C)(2) of Part I of 
China’s Protocol of Accession? 
 
52. In paragraph 228 of Part III, after explaining that trademark registration in China currently 
takes about 24 months, the report states in a footnot e that China intends to "shorten the time of the 
registration procedure to 18 months, by reinforc ing management and promoting the accuracy and 
speed of trade mark examination through comput er examination system."   What changes are 
contemplated by "reinforcing management"?  What  is the nature of the "computer examination 
system," and how will it be designed to promote "accuracy" and "speed" of examination? 
 53. Does China have any plans for reducing the back log of proceedings currently pending before 
the Trademark Review and Adjudication Board described  in paragraph 230 of Part III of the report?  
Please explain. 
 
54. Paragraph 233 of Part III of the report discusses the role of the National Copyright 
Administration of China (NCAC) as the nationa l copyright regulator and describes protections 
afforded by China’s Copyright law.  
a. The report notes that "local copyright  administration offices (under the local 
governments of provinces, autonomous regions , and municipalities directly under the 
Central Government) are in charge of local copyright registration . . . ."  Can a right holder file an application for registration in any of these local offices?  Is a registration at a local office effective throughout China? 
 
b. The report states that that "typographical designs" are protected for ten years.  What 
types of "typographical designs" are protected? 
 
55. Paragraphs 238 and 239 of Part III of the re port refer to recent confusion among producers 
and consumers arising from the fact that both the State Trademark Office and AQSIQ approve WT/TPR/M/199/Add.1 
Page 50  
 
  geographical indications (GIs).  Please describe how these two agencies divide up their jurisdiction 
over GIs.  What steps have been taken to a ddress the confusion among producers and consumers? 
 56. The United States understands that MOA has re cently issued its own measures for the 
administration of GIs for agricultural products.  Please clarify the relationship between the State 
Trademark Office, AQSIQ and MOA with regard to the registration of GIs for agricultural products.  
In the event that there are conflicting GIs register ed at the State Trademark Office, AQSIQ and MOA, 
how does China resolve the problem of conflicting regi strations?  Is there a publ ic database for GIs at 
the AQSIQ and the MOA, such as the one that exists for trademarks at the State Trademark Office, or 
is there some other type of mechanism that allows th e three agencies to share records in order to avoid 
issuing conflicting registrations?   
 57. Paragraph 244 of Part III of the report explains that "50 IPR service centres had been set up 
all over the country" by the end of August, 2006.  What are the objectives of the service centres?  How does China assess the effectiv eness of the service centres in  meeting those objectives? 
 
IV.  TRADE POLICIES BY SECTOR (1)  I
NTRODUCTION  
 
58. In paragraph 4 of Part IV, the report discusses Ch ina’s energy policies and their effects.  It 
states:  "While China’s high energy intensity may be  partly explained by the share of industry (which 
tends to be relatively energy intensive) in GDP ... , it is also undoubtedly due to the insufficiently 
market-oriented price mechanism for oil, coal, elect ricity, and natural gas, which sets artificially low 
prices and, as a consequence, leads to a waste of energy, to the detriment of the environment."  The 
report adds that China "regards energy as a strate gic commodity and has therefore adopted a gradual 
approach to reforming the sector.  As a result, trade restrictions and regulatory barriers protect 
domestic producers from international competition.  However, it remains to be seen whether such a 
gradual approach to reform will be sufficient to address the challenges the sector faces, especially the 
compatibility of China’s large and rapidly growing en ergy needs with protection of the environment."  
What is China’s response to these statements? 
 
(2)  A GRICULTURE  
(i)  Features and market development  
59. Paragraph 12 of Part IV of the report explains that the majority of Chinese peasants hold 
long-term land tenure certificates guaranteeing them the right to exploit the land.  Can these land tenure certificates be traded from the farmer to anyo ne else of the farmer’s choosing?  Can these land 
tenure certificates be offered as collateral for acqui ring bank loans to purchase agriculture equipment, 
livestock, residence improvements, etc.?  60. Paragraph 14 of Part IV of the report highlight s some of China’s principal import suppliers 
and export destinations for agricultural commod ities.  The United States notes that China’s own 
customs data indicates that many of China’s imports  originate from within China.  Can China clarify 
whether these imports are international products  entering from Chinese bonded trade zones with 
added value?  Are they Chinese products that were rejected from overseas markets and returned to 
China?  Please explain.  (iv)  Policy instruments 
 
61. According to paragraph 20 of Part IV of the report, imports of agricultural commodities such 
as wheat, cotton and corn are subjected to a 13% VAT in China, while lik e agricultural commodities 
produced and sold by small-scale fa rmers are exempt from the VAT.  
  WT/TPR/M/199/Add.1 
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  a. How does China define a small-scale farmer? 
 b. Will China consider eliminating the 13% VAT on all agricultural commodities so that 
imported and domestically produced agri cultural commodities receive the same 
treatment in accordance with China’s nati onal treatment obligation under Article III 
of the General Agreement on Tariffs and Trade 1994? 
 
62. According to paragraph 28 of Part IV of th e report, China imposes a variety of product and 
destination-specific export quotas on agricultural products.  These export quotas effectively create a situation in which domestic product prices could be below world average prices, thereby creating an 
advantageous situation for Chinese domestic agri-businesses processing these domestic goods and 
discourages them from procuring imports from other or igins.  In addition, these export quotas and the 
resulting lower domestic product prices would app ear to discourage entrepreneurship by rural 
producers who may want to shift production in line with world price signals.  Furthermore, export 
quotas are generally prohibited under Article XI of the General Agreement on Tariffs and Trade 1994.  
For each of the products identified in paragraph 28, please describe China’s justification under WTO 
rules for maintaining an export quota.  Can China pr ovide a timeline for when it will eliminate each of 
the export quotas?  63. According to paragraphs 37 and 38 of Part IV of the report, China provides subsidies 
designed to provide agricultural producers with th e opportunity to purchase improved crop strains and 
seeds.  How does China define an improved crop strain or seed for purposes of these subsidies?  
Which agency decides whether that definition is sa tisfied in a particular case?  Are imported crop 
strains and seeds eligible for the subsidies?  64. Paragraph 39 of Part IV of the report discu sses certain price controls still maintained by 
China.  Could China explain the minimum procurem ent price schemes currently in place for rice and 
wheat.  For example, how are the minimum prices de termined?  How often are they changed?  What 
areas of China do the schemes cover?  Which agency  is responsible for administering the schemes? 
 65. Paragraph 41 of Part IV of the report states th at China has a functioning grain reserve system 
that is coordinated by the central and local governme nts.  Can China explain the methods that it uses 
to determine what grain reserve levels are suitable?    Do these grain reserve levels take into account 
grain held by agricultural producers? 
 
(3)  E
NERGY  
(i)  Introduction  
 
66. In paragraph 45 of Part IV, the report states th at China does not have a comprehensive law or 
regulatory framework for the energy sector.  It also notes that China is drafting a law that will regulate 
certain energy sub-sectors.  Will this law regul ate biofuels?  Can producers of biofuels use 
commodities that compete with food or feed crops?  Is foreign investment in the biofuels sub-sector 
restricted or prohibited?    
 
(5)  S ERVICES  
(iii)  Financial services 
 67. Paragraph 120 of Part IV of the report describes China’s services sector as "characterized by 
state involvement through SOEs," with "significant rest rictions on foreign investment."   It also notes 
that in some sectors China "has al so maintained or erected entry requirements that are high or 
cumbersome, discouraging foreign suppliers from gaining market access."  The United States would 
add that China has altogether refused to grant market access to foreign suppliers of electronic 
payments and related services despite having made commitments to open up this sector to foreign WT/TPR/M/199/Add.1 
Page 52  
 
  suppliers.  Specifically, in its GATS Schedule, Chin a committed to allow unrestricted market access 
and national treatment for "payments and money transmission services, including credit, charge, and debit cards," with this commitment becoming effe ctive with regard to the RMB business of retail 
clients no later than 11 December 2006.  China al so committed to allow unr estricted market access 
and national treatment for "advisory, intermediation,  and other auxiliary financial services" for other 
financial services listed in its schedule, including payments.  China’s GATS Schedule further provides 
for open market access for the "provision and transfer  of financial informatio n, and financial data 
processing by supplier[s] of other financial services."   When will China take the steps necessary to 
implement these overdue commitments?    
68. In paragraph 150 of Part IV, the report comments:  "It was not clear to the Secretariat why the 
minimum asset requirements are higher for the establis hment of branches than for locally incorporated 
entities, taking into account that branches are not a llowed to conduct retail business."  Please explain 
the rationale for these differential asset requirements.  
69. Have there been any transfers of non-performi ng loans to asset management companies other 
than the transfers in 1999 and 2000 and the transf ers in 2004 and 2005 as identified in paragraph 160 
of Part IV of the report?  If so, please explain.  70. Paragraphs 180 and 192 of Part IV of the report discuss China’s Insurance Law  and, in 
particular, reinsurance.  Could China expl ain how it implements Article 103 of the Insurance Law  
with regard to the sourcing of reinsurance?  Pleas e also explain what "give priority of offering 
reinsurance contracts" means in Article 13.  How does it relate to the comm itments that China made 
in its GATS Schedule not to impose reinsurance mandatory cessions and not restrict the cross-border supply of reinsurance?  
71. According to paragraph 186 of Part IV of the report, "there have been no significant changes 
to requirements concerning the establishment and ope rations of foreign insurance companies" since 
China’s Trade Policy Review in 2006.  The Unite d States is concerned about a draft regulation 
circulated by the China Insurance Regulatory Commission ("CIRC") on 31 March 2008, entitled 
Administrative Methods on Equity Interest in Insurance Companies .  The United States appreciates 
CIRC’s provision of advance notice and the opportunity to comment on this draft regulation.  
However, the draft regulation raises serious concer ns, and the United States hopes that CIRC will not 
finalize the draft regulation until these concerns ca n be properly considered  and addressed.  Most 
notably, the draft regulation appears to impose signi ficant new limitations on foreign participation as 
well as new discriminatory requirements in the insu rance sector, including with regard to insurance 
holding companies and insurance asset management companies.  In particular, Article 13 of the draft 
regulation appears to prohibit foreign financial in stitutions (including insurance companies) that 
already have one investment in China (either in  a domestic insurance company or in a foreign-
invested insurance company, whethe r in the form of a joint venture or a subsidiary) from establishing 
additional investments in a domestic insu rance company in the "same" sector.   
 a.  What is China’s justification for the discriminatory treatment of foreign financial 
institutions in the draft regulation?   
 b.  Please explain how the limitations in th e draft regulation are in line with China’s 
efforts to promote the development of Chin a’s insurance and financial services sector 
and the goal of achieving consiste nt and sound regulation.   
 
c.  The United States understands that the draf t regulation would also apply to insurance 
holding companies and insurance asset management companies.  Please explain 
China’s justification for applying the lim itations in the draft regulation to these  WT/TPR/M/199/Add.1 
 Page 53 
 
 
  entities.  How does CIRC envision the draft regulation will operate in the market with 
regard to these entities?   
 72. Paragraph 187 of Part IV of the report di scusses insurance licensing, but some of the 
procedures and substantive requirements remain unclear.   
 
a. Please describe more fully the procedures that CIRC follows regarding applications 
from foreign life and non-life insurers to expand internally (through branches) in 
China, including both at the central level and the provincial level. Does China apply 
the same timeframes for applications by foreign companies as it does for Chinese 
domestic companies?  What are these timeframes, and where are they set out? 
 b. What are the main substantive requirements that have to be met in order to receive 
approval for an additional internal expansi on (through a branch), and where are they 
set out?  Does China apply the same substantive requirements for review and 
approval of applications by foreign insurers  seeking to expand internally as it does for 
domestic companies?   
 c. Are the timeframes and substantive requi rements the same for foreign and domestic 
companies when they submit an applicati on for approval of multiple branches?  Are 
either foreign companies or domestic co mpanies or both discouraged from submitting 
an application for approval of multiple  branches?  How many applications for 
approval of multiple branches has CIRC approved since 2006? 
 73. In paragraph 193 of Part IV, the report discusses the Provisional Regulations on the 
Administration of Insurance Asset Management Companies .  What is China’s rationale for requiring 
the establishment of separate "insurance asset ma nagement companies"?  Why doesn’t China allow 
life and non-life companies to manage their assets dir ectly?  What is the prudential basis for requiring 
companies to have a certain level of total assets or  certain number of years of experience in China?  
Has China considered taking into account global  asset base and experience to meet such 
requirements? 
  
74. In paragraph 196 of Part IV, th e report refers to a "lock-up period" for non-tradable shares 
that have been converted to tradable shares, i.e ., a period of time in which the converted shares cannot 
be sold.  This lock-up period is also discussed in pa ragraph 27 of Part I of the report.  Recently, it was 
reported that China is considering extending the lock- up period.  Is that correct?  If so, please explain 
China’s rationale for doing so. 
 
(iv)  Telecommunications 
 
75. Paragraph 219 of Part IV of the report me ntions 6 nationwide basic telecommunications 
service providers existing in China today.  In additio n, the State remains the majority owner of all the 
basic telecommunication service providers.  Can an enterprise that is not owned by the State hold a basic telecommunications service license in China?   If not, can China explain how such a policy is 
consistent with its General Agreement on Trade in Services (GATS) commitments for basic 
telecommunications services, where no such limitation is scheduled?  76. Table IV-9 is based on information provided by the Chinese authorities and lists only one 
satellite service provider, China Satellite.  The Un ited States understands that two satellite service 
providers based in Hong Kong, China, are also author ized to directly serve customers in China.  Can 
China explain its policy rationale for allowing two satellite service providers from a customs territory 
separate from China to offer services in China, and how  such a policy is consistent with China’s most-
favoured-nation obligation? WT/TPR/M/199/Add.1 
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  77. Paragraph 221 of Part IV of the report states that a draft of a new Telecommunications Law  is 
currently being revised.   
 a. What is China’s timetable for completing the revision of the Telecommunications 
Law?  Does China intend to circulate a draft of the Telecommunications Law  for 
public comment before it is finalized, as required by Section 2(C)(2) of Part I of 
China’s Protocol of Accession?   
 b. Does the current draft of the Telecommunications Law  either make the Ministry of 
Industry and Informationization (MII) struct urally and financially separate from all 
the telecommunications operators and providers  or move the regulation of this sector 
outside of MII? 
 c. Does the current draft of the Telecommunications Law  provide that foreign service 
suppliers required to form joint ventures with Chinese entities to operate in China are 
free to chose their joint venture partner, and that they may choose a partner from a 
sector outside the sector of operation of the joint venture, consistent with the commitment that China made in paragraph 314 of the Working Party Report accompanying its Protocol of Accession? 
 d.  Does the current draft of the Telecommunications Law  lower the capital requirements 
for telecommunications FIEs engaged in  national or cross-provincial basic 
telecommunications services?  Please explain. 
 78. Paragraph 223 of Part IV of the report indicates that no new entrants have entered the mobile 
telecommunications services market and that licen ses for 3G services have not been issued.   
However, as of 1 April 2008, China Mobile is offering 3G services in new spectrum bands.  Does 
China Mobile have a license to offer this service?   If so, was the license tender made public?  What 
were the licensing criteria?  Because none of this in formation appears to have been made public, and 
several operators are interested in offering 3G ser vices, how is China Mobile’s commercial offering of 
these services consistent with China’s GATS Refere nce Paper commitments to allocate spectrum in a 
"objective, timely, transparent, and non-discriminatory manner"? 
 
79. Paragraph 226 of Part IV of the report describes China’s capital requirements for 
telecommunications FIEs engaged in national or cr oss provincial basic telecommunications services.  
It notes that registered capital must not be less than RMB 2 billion (US$270 million).  In the United States’ view, this capital requirement is excessively high, both when viewed in relation to the norms 
in other economies and in the specific context of China’s telecommunications market.  To date, MII 
has provided no compelling rationale for such a require ment, and the fact that there has been little or 
no new entry in the basic telecommunications serv ices sector suggests that this requirement is 
functioning as a market entry deterrent, for both Ch inese and foreign operators.  Does China consider 
the capital requirements imposed by MII for teleco mmunications FIEs engaged in national or cross-
provincial basic telecommunications services to be comparable to those found in other WTO 
Members?  Please explain. 
 
80. Paragraph 226 of Part IV of the report men tions that there are a significant number of 
suppliers providing (or applying to provide) value-added services that have "domestic private" or 
foreign ownership.  Can China confirm that the treatment of value-added services via Very Small 
Aperture Terminals (VSATs) is the same for supp liers regardless of whether they are "domestic 
private" or foreign?  If not, can China explain w hy foreign value-added servi ces suppliers that use 
VSATs are treated differently from "domestic priv ate" value-added services suppliers using VSATs? 
  WT/TPR/M/199/Add.1 
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  81. Paragraph 227 of Part IV of the report describes how an FIE obtains a telecommunications 
service license.  If an FIE receives a license fo r value-added services, can the FIE choose the 
technology or means of delivery of its services to its subscribers?   For example, can the FIE deliver 
its services by fiber optic cable, or via a wireless or satellite network, or through a combination of 
such technologies?  If not, please explain why not. 
 
(v)  Transport services 
 
82. Paragraphs 240-242 of Part IV of the report di scuss the regulatory regime administered by the 
Civil Aviation Administration of China (CAAC).  The United States understands that CAAC imposes 
certain restrictions related to Air Sales Licenses that limit the ability of foreign suppliers to engage in 
freight forwarding.  In particular, CAAC does not seem willing to license foreign suppliers to load 
cargo directly on behalf of other companies on dom estic or international flights, requiring them 
instead to work through licensed dom estic companies.  Has this situation changed?  If not, what is 
China’s rationale for this limitation?  Given the contribution of foreign suppliers of logistics and 
express delivery services to China’s economy, does China have any plans to eliminate this limitation? 
 83. In paragraphs 244-46 of Part IV, the report d escribes several types of enterprises in the air 
transport services sector in which foreign investment is permitted.  The United States notes that China 
has made no commitment to open up its market to fo reign suppliers of computer reservation system 
services, and has continued to maintain a closed mark et in this area, not allowing foreign investment 
while promoting a domestic enterprise, TravelSky.  In the United States’ view, fostering competition 
among suppliers of computer reservation system se rvices, including through the participation of 
foreign suppliers, would support China’s objectives to  enhance the competitiveness and efficiency of 
not only its air transport services sector, but also its tourism services sector, as hotels and other suppliers of tourism services also rely on com puter reservation systems.  Please describe China’s 
plans for opening up its market to foreign suppliers of computer reservation system services. 
 
84. In paragraphs 248 through 251 of Part IV, the report provides various data on China’s market 
structure for maritime transport services.  
a. The report notes that 90% of China's expor ts and imports are transported by sea.  
What percentage of this 90% wa s carried by China flag vessels? 
 b. The report notes that, by the end of 2006, the ocean fleet capacity was 45.5 million 
deadweight tonnage (DWT), of which 23.2 million belonged to  the 1,920 ocean-
going vessels flying the national flag.  Of these 1,920 ocean-going vessels flying the 
national flag, how many of them were foreign built? 
 c. The report notes that over 1,700 domestic and foreign companies have been qualified 
as non-vessel-operating common carriers (NVOCC), of which 790 are FIEs and offshore companies.  Of the 790 FIEs and offshore companies, how many are wholly 
foreign-owned companies? 
 d. The report notes that seven "offshore navigation companies" have set up new wholly 
foreign-owned companies related to shi pping and container transportation services, 
and added 54 branches, while more than  300 "offshore port navigation companies" 
have set up representative offices in China.  Please explain the terms "offshore 
navigation companies" and "offshore port navigation companies" and how these two 
types of companies are differentiated in terms of their operations. 
 
85. In paragraph 255 of Part IV, the report explai ns that, under the Maritime Code, shipping and 
towing between domestic ports cabotage must be unde rtaken by ships flying the national flag, unless WT/TPR/M/199/Add.1 
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  otherwise stipulated by laws or administrativ e rules and regulations.  How many vessels operating 
under the Maritime Code, shipping and towing between domestic ports cabotage and flying the 
national flag were foreign built?  86. Paragraph 267 of Part IV of the report explai ns:  "Port charges are decided by the MOC and 
the NDRC, taking into consideration cost and the level of competition in the market."  It also explains 
that port charges are applied uniformly across th e country.  Why does China not allow these charges 
to be determined by individual port operators? 
 
(vi)  Distribution services 
 
87. In paragraph 283 of Part IV, the report discusses some of the regulations affecting suppliers 
of retail services.    
a. Foreign retailers maintain that they face extra burdens, when compared with domestic 
retailers, in expanding thei r operations.  For example, the MOCOM-led licensing 
process for foreign retailers seeking to establish a new outlet is multi-layered and 
slow-moving, requiring approvals at the lo cal, provincial and central government 
levels.  In contrast, domestic retailers can quickly obtain licenses for new outlets 
directly from the State Administration of Industry and Commerce.  How does China 
justify this practice in light of its nati onal treatment obligations under the GATS?  
What steps is China taking to streamline  MOFCOM’s review of foreign retailers’ 
applications for new outlets? 
 b. The report observes that the Chinese authorities may deny retailing licenses if urban 
commercial network plans have not been finali zed.  However, this restriction, at least 
in practice, applies only to foreign reta ilers and not domestic retailers.  How does 
China justify this practice in light of its  national treatment obligations under the 
GATS?  What plans does China have to  begin applying the same substantive 
licensing requirements to domes tic and foreign retailers? 
 
88. Paragraph 288 of Part IV of the report describ es the 30% cap on compensation for direct sales 
representatives and the prohibition on compensation b ased on team sales, i.e., "multi-level selling."  
Although the Report describes these restrictions as consumer-protection provisions, the compensation practices being restricted are common around the world in this industry.  Will China consider revising 
these restrictions in line with internationally  accepted practices for regulating direct selling? 
 
89. Paragraph 288 of Part IV of the report discusse s the commercial presence of foreign suppliers 
of direct selling services in China.  The United States understands that very few direct selling companies have been able to obtain licenses that w ould enable them to conduct direct selling in more 
than one province in China, which significantly r estricts their ability to expand their businesses in 
China.  Could China explain why it imposes this limitation on the geographic scope of licenses, 
whether it does so by law or as a matter of practice? 
 90. Paragraph 290 of Part IV of the report observes that foreign direct sellers must have three 
years of overseas experience to be allowed to opera te in China, but that this requirement does not 
apply to domestic companies.  Now that direct se lling has been authorized in China since 2005, will 
domestic companies be subject to an equivalent rule?  If not, why not?  
 
(vii)  Postal services 
 
91. Paragraph 300 of Part IV of the report describes the regulatory responsibilities of the new 
State Post Bureau.  Please explain how the State Post Bureau’s regulatory responsibilities relate to  WT/TPR/M/199/Add.1 
 Page 57 
 
 
  MOFCOM’s responsibilities in relation to the li censing and regulation of express delivery service 
providers.  92. Paragraph 301 of Part IV of the report explains  that the State Post Bureau’s first Express 
Delivery Service Standards became effective on 1 January 2008 and "apply to all express delivery 
operators in the market, regardless of their legal na ture."  It further explains that, according to the 
State Post Bureau, these standards are recommendato ry rather than compulsory.  Please explain how 
these standards apply to all express delivery operator s in the China market, but at the same time are 
not compulsory.  Does the State Post Bureau have an y authority to enforce these standards?  Do any 
sub-national authorities or non-govern mental industry associations have any authority to enforce these 
standards?  Please explain.  
 93. Paragraph 303 of Part IV of the report notes th at, according to China, "draft [Postal Law] 
amendments are being prepared after soliciting opinions from domestic and foreign companies."  
What is China’s timetable for completing its revi sions to the Postal Law?  The United States 
understands that the State Council has selectively circul ated different iterations of draft revisions to 
the Postal Law.  Does China intend to circulate a dr aft of the revisions to the Postal Law for public 
comment before it is finalized, as required by Sec tion 2(C)(2) of Part I of China’s Protocol of 
Accession?   
 
(viii)  Legal services 
 
94. Paragraph 309 of Part IV of the report notes that the Chinese authorities must make a 
determination of "practical need" before granting a license for a foreign legal firms’ representative 
office.  Could China explain how this limitation is consistent with China’s GATS commitments, 
which do not identify any such lim itation on market access?  Does the same limitation exist for 
domestic firms?  If not, could China explain how th is limitation is consistent with China’s national 
treatment obligation under the GATS?  95. Paragraph 314 of Part IV of the report describ es some of China’s restrictions on foreign law 
firms. 
 
a. The United States notes that the prohibition on foreign law firms employing licensed 
Chinese lawyers is a major impediment on businesses seeking to get efficient and comprehensive legal services in China.  Is China considering allowing Chinese 
lawyers employed by foreign law firms to maintain their professional practice license 
and practice Chinese law? 
 
b.  Are individuals who are not Chinese nationals able to qualify to practice Chinese 
law? For example, can they graduate fro m a Chinese law school and then take the 
qualifying examinations?  If not, why not? 
 
(ix)  Accountancy services 
 
Paragraph 320 of Part IV of the report describ es the qualification requirements for accountants in 
China.  It mentions ethical and knowledge criteria for eligibility.  Are there any other requirements, 
such as education?  Can foreign nationals take China’s Certified Public Accountant examination? 
 WT/TPR/M/199/Add.1 
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  PHILIPPINES
 
 
1) The Philippines understands that China will a dopt its first comprehensive food safety law in 
response to the spate of safety-related incident s in China as well as overseas involving Chinese-made 
products.   
 
 a) Can China provide information on the food safety law, presenting if possible its 
salient features?   
 b) How will China ensure that the law w ill comply with its WTO commitments on non-
discrimination and transparency? Will it be accessible to the public? 
 c) Will the law be available in an official WTO language? 
 2) In the Secretariat’s report, it is noted that the revised rules in China’s General Administration 
of Customs, Decree No. 148, 2006 which came into  force on 1 May 2006 were mainly intended to 
achieve further clarification of the relevant inte rnational agreements such as the Agreement on the 
Implementation of Article VII of GATT 199 4 (the Customs Valuation Agreement). 
  a) Has China adopted measures that will furt her improve transparency and predictability 
and ensure the consistent and uniform a pplication of rules particularly in the 
determination of customs value of importe d goods in its multiple ports and local 
governments?   
 b) How will these revised rules affect Ph ilippine exports of ba nana chips, whose 
declared/transaction values have not been accepted, without the benefit of sufficient explanation, by Customs authorities?   
 c) Will these revised rules require that th e transaction value of banana chips from the 
Philippines will be accepted by Customs aut horities, in accordance with Article 1 of 
the Customs Valuation Agreement? 
 3) In March this year, the Philippine Embassy (PE) in Beijing received an advice from China’s General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) that ice cream 
from the Philippines have been found to contain Tartr azine that exceeded food additive standards.  In 
same notice, AQSIQ requested the Philippines to take  effective measures to control Tartrazine and to 
ensure that food products exported to China are secure and hygienic. 
  a) The Philippines seeks clarification with respect to food standards in China.  What 
levels of Tartrazine are considered excessive? 
 b) What does China consider as "effective measures" to ensure that food products 
exported to it are "secure and hygienic"?  
 4) The Philippines has received reports that e xports of fresh young coconuts (FYC) has been 
banned entry into China; Customs authorities in Xi amen have refused to process import documents of 
Chinese importers.  The Philippines has repeatedly inquired with the AQSIQ for clarification on the 
ban but has so far received no response. 
 
 a) Would China be able to confirm that th ere is indeed a ban on the import of FYC from 
the Philippines? 
 b) If so, what is the basis for the ban?    c) What quarantine requirements are imposed on FYC? 
 d) What is the status of the pertinent information on coconut risk analysis that the 
Philippines submitted to AQSIQ last March 2008? 
 5) In the Secretariat’s report, China levies export taxes at stat utory rates in relation to FOB 
values and on an MFN basis.  In addition, lower interim rates may be applied and also on an MFN  WT/TPR/M/199/Add.1 
 Page 59 
 
 
  basis.  The Tariff Commission under the State Council sets and publishes the statutory rates annually 
and revises the list of items subject to interim duty together with the rates of duty.  On 
1 January 2008, the coverage of interim export duties increased.  Though the main objective of these 
export taxes may be to improve the environment by reducing exports of produc ts considered to be 
highly energy consuming or polluting, such measur es tends to increase the domestic supply of the 
products concerned.  As a consequence, their domes tic prices tend to be lower than would otherwise 
be the case.  Furthermore, when export taxes ar e levied more heavily on upstream products, such 
measures may implicitly assist domestic downstr eam processing of the products concerned. 
 This situation can be seen in the manufacture of yellow phosphorus (P4) and phosphoric acid which 
are major raw materials in sodium tripolyphosphat es (STPP).  It is gathered that China has increased 
the export taxes on these two raw materials, while imposing zero rates on STPP.  If so, the measure has caused a huge disparity between the prices of  these raw materials and that of STPP.  The 
manufacture of STPP could thus be effectively subsidized. 
 
 a) What are China’s objectives in its use of export taxes? 
 b) How can China ensure that these are cons istent with China’s obligations in WTO, 
including under Article XI:2 of GATT 1994, and the Agreement on Subsidies and Countervailing Measures? 
 6) It has been gathered that foreign films are s ubject to a certain quota in China and that for the 
period 2000-2004, China imported 4,332 films of wh ich 40-50% came from the US (according to 
statistics from the Ministry of Culture).   a) What is China’s import policy on foreign films?   b) Are the rules and regulations on the importa tion of foreign films publicly available in 
any of the official WTO languages? 
 7) In its report, the Secretariat indicated that MOFCOM instituted interim measures on complaints from foreign-invested enterprises.  These measures entered into force on 1 October 2006. 
  a) Has China adopted new measures desi gned to expeditiously and better address 
complaints of foreign-invested enterprises and foreign investors who consider that 
their rights have been impaired by the authorities? 
 b) What are these measures?  
JAPAN
 
 
Report by the Secretariat (WT/TPR/S/199) 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(2) M EASURES DIRECTLY AFFECTING IＭPORTS  
(iii) Tariffs 
Question 1: page 48, paragraph 21, footnote 20  
Regarding the interim tariff which China adopted, th e Secretariat report says that where a particular 
tariff line has an interim tariff rate, the lower of th e interim tariff and the standard applied MFN tariff 
is adopted. On the other hand, it also says that in terim rates are usually lower than the standard 
applied MFN tariff rates.   (1) Are there any cases where the interim tariff rate  is higher than the MFN rate? If yes, why is 
the interim tariff set?  WT/TPR/M/199/Add.1 
Page 60  
 
  (2) Is the higher interim tariff rate applied? 
Question 2: page 48, paragraph 21, footnote 20 
 
Tariff lines subject to interim tariffs are increased from 149 in 2007 to 624 in 2008.  
 
Why are tariff lines subject to interim tariffs in creased rapidly? Will this trend continue? 
 
Question 3: page 50, paragraph 22, footnote 22 
 
Some tariff rates were increased by over 10%. Please show us the reasons for increase of tariff rates.  
Question 4: page 52, paragraph 26, footnote 26 
 
China adopts sliding duty. The secretariat report shows that a 6%-40% tariff rate is applied, based on 
the cotton value calculated by the interim tariff rate , c.i.f. price of cotton and the exchange rate.  
 
How is the rate on sliding duty calculated speci fically? Is the calculation method published?  
 
Question 5: page 52, paragraph 26, footnote 26 
 
The threshold that whether or not a 6% tariff is applied was Y11.397 per kg in 2007. What is this threshold set based on? 
 
Question 6: page 55, paragraph 33 
 
China offers special pref erence tariffs to imports of some goods  from some LDCs. Please show us 
more detail of preference tariffs, such as examples of covered products, the number of covered tariff 
lines, and how the coverage is determined.  
(v) Import prohibitions, restrictions, and licensing 
Question 7: page 59, paragraph 50  
The Secretariat report states that "under special circ umstances, it may take up to ten days to issue a 
licence." Please enumerate concretely the cases in which "special circumstances" exist. 
 
(viii) Standards and other technical requirements 
Question 8: page 64, paragraph 70, footnote 70 
 Footnote 70 mentions that "Sectoral standards ar e developed when there are no national standards 
available, but unified technical requirements are ne eded in a certain professional field at the national 
level."  However, in general, almost all standard s, including national standards, have to do with 
unified technical requirements in a certain professional field. Thus, it is difficult for us to understand the difference between national sta ndards and sectoral standards.   
 
Please explain the exact criteria which SAC and relevant ministries use to determine whether a new standard should be introduced as a na tional standard or a sectoral standard. 
 
Question 9: page 64, paragraph 70, footnote 70 
 National standards and sectoral standards can each  be subdivided into mandatory standards and 
voluntary standards. We understand that both types of mandatory standards observe the obligations 
under Article 2 of the TBT Agreement. Japan al so understands that voluntary national standards  WT/TPR/M/199/Add.1 
 Page 61 
 
 
  observe the obligations under Annex 3 of the TB T Agreement, as SAC has accepted the Code of 
Good Practice. However, according to China, volun tary sectoral standards currently do not fall under 
the TBT Agreement, since the individual govern ment agencies (e.g., Ministry of Information 
Industry) that create sectoral standards have not accepted the Code of Good Practice.  
Why have these government agencies not accepted the Code of Good Practice?  Article 4.1 of the 
TBT Agreement clearly states that "Members shall en sure that their central government standardizing 
bodies accept and comply with the Code of Good Practice."  It is evident that the Ministry of Information Industry and many other agencies respons ible for the creation of sectoral standards are 
indeed "central government standardizing bodies"  which must accept the Code of Good Practice. 
 
Question 10: page 67, paragraph 85 
 
The Government of Japan has information that th e Food Hygiene Law in China will be amended in 
2008.  
 
If this is correct, please provide the information c oncerning the summary of the amendment of the law 
and, in particular, the effect of the amendment on the import of foreign foods and alcoholic beverages 
into China.  
(3) M
EASURES DIRECTLY AFFECTING EXPORTS  
(ii) Export taxes 
Question 11: page 74, paragraphs 111-112  
China imposes export duties on various non-ferrous me tals such as indium, molybdenum, rare earths, 
silicon etc.. However, in Section 11.3 of Part 1 of its Protocol of Accession, China committed not to 
impose export duties on any goods not appearing on th e list of goods subject to export duty in Annex 
6 of its Protocol of Accession.  Indium, molybde num, rare earths and silicon do not appear on the 
Annex 6 list.   Japan would like to confirm how China justifies its imposition of export duties on these raw materials in light of the commitment that China made in S ection 11.3 of Part1 of its Protocol of Accession. 
 
(iii) Tax rebates on exports 
Question 12: page 74-75, paragraphs 115-118  
Recently, the return of VAT has been reduced or abolished when nonferrous metals such as rare 
earths and magnesium are exported.  
 (1) Japan would like to confirm the purpose of this  together with the present return ratio of VAT 
of all commodities in every HS classification when they are exported.  (2) Japan would like to confirm the reason or the ju stification for the difference of the return ratio 
on every item when VAT is returned. 
 
(iv) Tax concessions under processing trade 
Question 13: page 75, paragraph 119  
In china, system changes of trade regulations wit hout sufficient well-known pe riods (e.g. expansion of 
exports of products "prohibited under processing trade", a reduction of the VAT rebate rate, and an 
implementation of export tax etc.) have given a la rge adverse effect to the business environment. 
 WT/TPR/M/199/Add.1 
Page 62  
 
  Please explain, on the basis of GATT Article 10, what China measures or considers to secure 
transparency in system changes of trade regul ations (e.g. implementing of public comment and 
securing of well-known periods before system chang es or securing of the moratorium after system 
changes etc).  (v) Export prohibitions, restrictions, and licensing Question 14 : pages 76-78, paragraphs 120-129  
Japan understands that China implements export li censing system on various kinds of non-ferrous 
metals: rare-earths, tungsten, an timony, tin, silver, bauxite, indi um, zinc, silicon and molybdenum. 
Indium and molybdenum of these non- ferrous metals became subject to quantita tive trade restrictions 
in June 2007, and the amount of export licences on most of the other non- ferrous metals has been declining.   (1) Japan would like to ask China to clarify th e policy objective of quantitative restrictions by 
way of its export licensing system on various kinds  of non-ferrous metals: rare-earths, tungsten, 
antimony, tin, silver, magnesium, bauxite, indium, and molybdenum. Also, we would like to ask clarification of the legal basis of the restriction under the GATT.  China has explained that resource protection, envi ronmental conservation, and trade surplus reduction 
are the reasons for its quantitative trade restrictions.  
 
(2) In terms of resource protection, Japan would like to ask clarification if there is a restriction in China for the domestic production or consumption of these metals, with some additional specific data 
on their domestic production, consumption, and restriction.   
(3) In terms of environmental conservation and trade surplus reduction, Japan would like to ask 
clarification of the legal basis of the quantitative trade restriction under GATT. 
 
Question 15: page 76, paragraph 120 
 
Why are mineral products (HS Chapter 25) and so me chemicals (HS Chapter 29) added to the 
products subject to export prohibitions? 
 
Question 16: page 76, paragraph 121 
Page 115, paragraph 28  
Please explain in more details the scheme of "destination-specific export quotas". 
 
Question 17: pages 76, 78 paragraphs 123,129 
 
There is an increase of 447 tariff lines at HS 8-di git level which are subject to export quotas and 
licensing administration in 2007 (especially au tomatic export licences) compared to 2005.  
 
(1) What is the reason for such increase?   (2) What criteria must be met for applications to be approved?   WT/TPR/M/199/Add.1 
 Page 63 
 
 
  (4) M EASURES AFFECTING PRODUCTION AND TRADE  
(v) Competition and consumer protection policy Question 18: page 100, paragraph 208  
After the new Anti-Monopoly Law is to be effectiv e in August 2008, Japan unde rstands that the scope 
of application of the new Anti-Monopoly Law and the other competition-related law such as the Law 
Countering Unfair Competiti on could be overlapped.  
 Please explain relationship in the applic ation of these laws after August 2008. 
 Question 19 : pages 100, 101, paragraphs 209, 214  
(1) Regarding the sentence "In addition, regula tions for certain sectors, such as aviation, 
electricity, postal and telecommunications services,  include provisions to introduce and encourage 
market competition" (page 99) and "All sector of the economy, apart from certain activities related to 
agriculture, are covered by this law" (page 101), pl ease explain the relationship in the application of 
the new Anti-Monopoly Law and the existent regulations for above certain sectors.   (2) Is the Anti-Monopoly Law applied prior to the regulations for certain sectors?  
(3) In addition, when the Anti-Monopoly applies to these sectors, what will be the enforcement 
body on them? 
 
Question 20: page 100, paragraph 211 
 
Japan understands that China is currently prepari ng various guidelines to allow the operation of the 
Anti-Monopoly Law by 1 August 2008.  
 
(1) Could China let us know what the guidelines are about?   (2) What is the schedule of the formulation?   
Question 21: page 101, paragraph 213 
 Regarding the sentence "Whether the Government is  able to overcome these difficulties remains to be 
seen; it would depend not only on the efficiency  of the to-be-established Anti-Monopoly Law 
Enforcement Authority, but also on enforcement at  the local level." please explain the details about 
the enforcement system of the Anti-Monopoly Law in local level. 
 
(vi) Intellectual property rights 
Question 22: page 103, paragraphs 218-219  
Please provide the information described bellow re lated with the "China's Action Plan on IPR 
Protection 2008". 
 
 - The schedule for the revisions and the main point of the revisions of the "Trademark 
Law", the "Law against Unfair Competition" , the "Copyright Law", the "Measures for 
the Implementation of Copyright Administrative Punishments", the "Rules for Implementation of the Patent Law" a nd the "Rules for Implementation of the 
Regulations on Customs IPR Protection". ( I. Legislation (I)1,2(II)1,7(III)2,(IV)3) 
 - The main point of the research on the second amendment to the "Copyright Law". 
(I. Legislation (II)1) WT/TPR/M/199/Add.1 
Page 64  
 
   - The outline of the "Measures on Remuneration by Radio and Television Stations for 
Broadcasting Statutory Licensed Phonograms". (I. Legislation (II)2) 
 - The outline of the "Regulations on Copy right Protection for Folk Literature and 
Artistic Works". (I. Legislation (II)3) 
 - The outline of the "Measures for the Administration of Karaoke Program". 
(I. Legislation (II)4) 
 - The outline of the "Measures for the Ad ministration of State-Owned Copyright". 
(I. Legislation (II)5) 
 - The schedule for the revision and the main point of the "Measures for Works 
Registration" and the schedule for the formulation and the main point of the 
"Measures on Copyright Contract Documentation". (I. Legislation (II)6) 
 - The schedule for the revision and the main point of the revision of the "Measures for 
the Implementation of Copyright Administrative Punishments". (I. Legislation (II)7) 
 - The schedule for the formulation and the main point of the "Measures for the 
Examination, Approval and Supervision of Copyright Collective Management". 
(I. Legislation (II)8) 
 - The outline of the "Measures on Remuneration of Textbook Statutory Licensing". 
(I. Legislation (II)9) 
 - The outlines of the "Judicial Interpretations on Issues Concerning the Application of 
Law in Dealing with Criminal Cases of Infringing Trade Secret Issued by the 
Supreme People's Court" and the "Judicial Interpretations on Issues in Dealing with 
Administrative IPR Cases issued by Supreme People's Court". ( I. Legislation (v)1,4) 
 - The details of the "special campaigns to  fight cyber IPR infringement", "dedicated 
campaign targeting the tourist market", "Fight Piracy Every Day campaign", "rectification activities over audio-visual market, Internet bars, online music and 
cyber games". (II. Enforcement (I) 1,2,3,5,11,12,13) 
 - The outlines of the "campaign on Fi ghting Counterfeiting to Protect Well-Known 
Brands and Quality Brands ". ( II. Enforcement (I)8) 
 - The outlines of the "Special Operation Thunderstorm on patent protection" and the 
"Special Operation Sky Net on patent protection". ( II. Enforcement (I)15.16) 
 - The details of the "Pamphlet on IPR Protection Supervision" ( II. Enforcement (II)2) 
and the "IPR Enforcement Information". ( II. Enforcement (II)10) 
 - The details of the sorting out the rela tions between copyright administrative law 
enforcement and cultural law enfo rcement. (II. Enforcement (II)5) 
 - The outlines of the "cross-regional IP R protection mechanism" (IV. Institution 
Building (I)2) and the "regional coordinati ng mechanism for patent administrative 
enforcement". (IV. Institution Building (I)9) 
 -  outline of the "Outline on Implementing an IPR Strategy for the Information 
Industry". (IV. Institution Building (II)1) 
 - The main issues and the study themes of th e "study into such issues as standards and 
evidence in suspected IPR in fringing criminal cases". (IV. Institution Building (III)4) 
 - The timing for organizing a press conference on the achievements and typical cases 
of the special campaign on combating on line infringement and piracy in 2007. 
(V. Publicity (III)4) 
 - The timing for organizing a press confer ence on the establishment of the Copyright 
Collective Management Organization. (V. Publicity (III)5) 
 - The timing for co-organizing and the ou tline of the International Copyright Forum 
2008 with the WIPO. (V.Publicity (IV)3) 
 - The timing for organizing the "China IPR Enforcement Forum 2008".(V. Publicity 
(IV)5) 
 - The main issues and the study themes of  the "research on "rules of evidence in IPR 
civil litigation""(X. Plan for Special Research  (I)6) and the "theoretical research on 
IPR criminal protection". (X. Pl an for Special Research (I)9).  WT/TPR/M/199/Add.1 
 Page 65 
 
 
   - The main issues and the study themes of the "general situation of IPR cases of 
criminal private prosecution". (X. Plan for Special Research (I)8) and the statistical 
data of the IPR cases of criminal private prosecution. 
 - The main issues and the study themes of the "research on IPR protection situation in 
OEM" (X. Plan for Special Research (II)1) 
 
Question 23: page 103, paragraphs 218-219 
 
Japan understands that the guidelines for the antimon opoly law, which comes into force this August, 
are under the process of the formulation.   
 
Please provide the information related to the situa tion of the formulation and the outline of the 
guidelines related to the enforcement of the intellectual property right. 
 
Question 24: page 103, paragraph 218 
 Please provide the information related to provisions which cover Article8 (Right of Communication to 
the Public), Article11 (Obligations concerning T echnological Measures) and Article12 (Obligations 
concerning Rights Management Information) of WI PO Copyright Treaty and Article10 and 14 (Right 
of Making Available), Article18 (Obligations c oncerning Technological Measures) and Article19 
(Obligations concerning Rights Management Info rmation) of WIPO Pe rformances and Phonograms 
Treaty. 
 
Question 25: page 104-105, paragraphs 228-230 
 
Please provide the length of time from the filing of a pplications to the initiation of the examination 
and the final decision regarding examination, oppos ition by the CTMO and appeal examination by the 
TRAB.  
Question 26: page 106, paragraph 239 
 
(1) Please provide the detail information with regard  to the protection system of GIs through the 
Regulations on Protection of Products of Geographical  Indications. In particular, please provide the 
information regarding the coverage  of products (limited to wines and spirits, or not), level of 
protection (the level of general protection stipulat ed on the article 22.2 of the TRIPS Agreement or 
that of additional protection stipulated on th e article 23.1 of the TRIPS Agreement) and the 
requirements for the approval by the AQSIQ to be protected on the respective regulation. 
 
(2) In addition, please provide an answer whet her the foreign GIs are protected through the 
regulation or not. If protected, please provide how many foreign GIs have been protected.  
Question 27: page 106, paragraph 241 
 
(1) Is there any system for disclosing information of the sender (alleged infringer of copyright) to 
Internet Service Providers regarding co pyright infringement on the Internet?  
 (2) If yes, please provide the information about the system, such as the law or regulation which 
stipulates it and procedures for disclosing information? 
 
Question 28: pages 106-108, paragraphs 241-244 
 
Please describe any efforts made or planned to prom ote IPR protection in provincial and local areas, 
and to educate provincial and local authorities in China. WT/TPR/M/199/Add.1 
Page 66  
 
  Question 29: pages 106-108, paragraphs 241-244 
 
Please provide information concerning the requir ements that need to be met to punish both 
manufacturers and distributors or those preparing to distribute products in cases where products are manufactured without trademarks and are later attach ed illegal trademarks at the distribution stage or 
at the stage for preparation for distribution by other distributors. 
 
Question 30: pages 106-108, paragraphs 241-244 
 
In terms of the aforementioned provision on "liability  for third party’s infringement" stipulated in 
Article 24 of the Regulation on the Administration of Import and Export Technology, China explained 
that the laws on transfer of technology in many  countries had similar provisions, and that such 
provisions conformed to international usage.  Ho wever, Japan understands that many countries have 
already abolished such "liability for th ird party’s infringement" provisions.  
 
Please inform us of any plans to revise the provi sion in light of this international trend. 
 
Question 31: pages 107-108, paragraph 244 
 
Please provide the information of the undertakings of future for enhancing the function of the Service 
Centers for IPR Protection. 
 
IV. TRADE POLICIES BY SECTOR 
(4) M
ANUFACTURING  
(i) Iron and steel 
 
Question 32: pages 128-129, paragraphs 83, 85  
The Chinese Government has decide d not to largely expand steel production facilities in total, by 
carrying out approval of new facilities and elimination of old-fashioned facilities at the same time, in 
accordance with the Steel Industry Development Polic y determined in July, 2005. Nevertheless, the 
volume of crude steel production has increased gr eatly, from 350 million tons in 2005 to 490 million 
tons in 2007.  
 Japan would like to ask how the Chinese Governme nt will maintain a balance between approval of 
new facilities and elimination of old-fashioned facilities.  Question 33: page 129, paragraphs 89-90  
The Chinese government has implemented a reduction of  the VAT rebate rate and the introduction of 
an export license for iron and steel products, for the purpose of reducing exports.   Japan would like to ask what kind of steps China inte nds to carry out in the future if steel exports 
increase again. 
 
(5) S
ERVICES  
(iii) Financial services Question 34 : pages 142-143, paragraph 14 
Pages 153-154, paragraph 181 
 
Are all the requirements for application incl uding "other documents" publicly available? 
  WT/TPR/M/199/Add.1 
 Page 67 
 
 
  Question 35: page 146, paragraph 152 
 
China requires foreign banks to be locally incorporat ed if they are to engage in the local currency 
retail business.   
Please explain the rationale of the requirement a nd inform us as to whether or not China is 
considering introducing flexibility to the requirements for newly established branches to engage in the 
local currency business.  
Question 36: page 146, paragraph 153 
 Please explain why China limits foreign equity participation to a maximum of 20 percent for a single 
foreign investor at existing Chinese domestic banks. This limitation appears to be in conflict with 
China’s schedule of commitments where no limita tion on the foreign equity participation is 
scheduled. 
 
Question 37: page 146, paragraph 153 
 
While the listed Chinese financial institution is re gulated as a Chinese financial institution although 
the combined equity investment of all foreign fi nancial institutions in the listed Chinese financial 
institution exceeds 25%, the non-listed Chinese financia l institution is regulated as a foreign-funded 
financial institution when the combined equity invest ment of all foreign financial institutions in the 
non-listed Chinese financial institution exceeds 25%.   Please provide the rationale for the different treatme nt between listed and non-listed Chinese financial 
institutions and explain why a financial instituti on is considered as a foreign-funded financial 
institution with only 25% low foreign equity. 
 
Question 38: pages 150-151, paragraph 167 
 
With respect to the establishment of China Postal  Savings Banks (CPSB), pl ease explain how national 
treatment obligation is ensured between CPSB  and foreign-funded fi nancial institutions.  
 
Question 39: page 151, paragraph 170 
 
Please explain how China plans to implement Basel II for "other commercial banks" including foreign 
banks. 
Question 40: page 152, paragraph 173 
 
Please explain the implementation plan of a deposit insurance system. 
 
Question 41: page 153, paragraph 180 
 
Article 11 of the Administration of Reinsurance Business Regulations requires direct insurance 
companies to solicit, from at least two reinsurance companies in China, rein surance offers amounting 
to more than 50 percent of the reinsurance to be ced ed. This is, in practice, considered as compulsory.  
 In light of Article 28 of GATS which stipulates that "supply of service" includes the marketing of a 
service, please explain how this limitation can be ju stified, given that no limitations regarding cross-
border trade in reinsurance is scheduled.  WT/TPR/M/199/Add.1 
Page 68  
 
  Question 42: page 153, paragraph 180  
 
Article 22 of the Administration of Reinsurance Bu siness Regulations prohibits foreign insurers from 
engaging in the reinsurance business with their aff iliates. Please explain how this limitation can be 
justified when no limitation is scheduled rega rding cross-border trade in reinsurance. 
 
Question 43: page 153, paragraph 181 
 
The report says "the decision on this application mu st be made within six months of submission."  
 
Please explain China’s efforts to improve transparency in licensing procedures. 
 
Question 44: page 154, paragraph186 
  
(1) Please explain why foreign insurance instituti ons are not allowed to engage in statutory 
insurance business.  
 A large part of the non-life insurance market is carved out by this restriction.   (2) Does China have any policy objectives with respect to this restriction? Japan would like 
China to indicate if China has pl ans to abolish the restriction. 
 
Question 45: pages 154-155, paragraph 187 
 
The minimum capital requirement for foreign insurers is  high in the light of international standards.  
 
Please indicate whether China plans to relax mini mum capital requirements for foreign insurance 
companies.  
Question 46: pages 154-155, paragraph 187 
 
While wholly foreign owned non-life insurance companies are allowed, please explain the rationale why foreign equity cap is set at 50% for life insurance companies. 
 
Question 47: page 155, paragraph 188 
 
China made "Administrative Methods on Equity Inte rest in Insurance Companies" available for the 
public comment until 20 April. 
 (1) Please explain why a financial institution is  considered as a foreign-funded insurance 
company with only 25% low foreign equity.  Paragraph 5 of Article 13 of the Methods says that  "a foreign financial institution that has been 
permitted to invest in China’s insurance market sh all not invest and hold equity in an insurance 
company of the same kind."   (2) Please explain how this new restriction can be  justified in light of  the national treatment 
obligation and horizontal commitments  (The conditions… will not be made more restrictive than they 
exist as of the date of China's accessi on to the WTO.) under the Chinese schedule. 
  WT/TPR/M/199/Add.1 
 Page 69 
 
 
  Question 48: pages 161-162, paragraph 213 
 
Foreign equity is limited to 33% for securities co mpanies. Does China have plans to relax this 
limitation?  (iv) Telecommunications Question 49: page 164, paragraph 221 
 
The "Telecommunications Law" which is a basic law on operating telecommunications business has 
not been enacted yet.  
 
(1) In order to facilitate the entry of teleco mmunication operators to the Chinese market, to 
ensure that they can expand their business and to simplify the required procedures to develop their 
businesses in the market, Japan urges China to enact a "Telecommunications Law" which is consistent 
with WTO rules and commitments as soon as possible.  
 
(2) Furthermore, Japan would appreciate more in formation on the general outline of the law, 
details of the present situation, future procedur es and schedule set out for establishment of the 
"Telecommunication Law".  
Question 50: pages 164-165, paragraph 222 
 Report by the Secretariat indicates that "The MII also issued the Notice Strengthening the 
Administration of Foreign Investment in Value- added Telecommunications Services in July 2006, 
which clarifies that the provision of unlicensed value-added services in China by foreign services 
suppliers is not allowed (pp.164-165)". However, according to the WTO commitment of China, there 
are reservations only for joint venture requirements,  area limitation and foreign capital restrictions in 
Market Access and no reservation in National Treatment in value-added services. This "Notice" appears to be contrary to the WTO schedule of commitment of China.   Therefore, Japan would appreciate more information on this restriction and China’s view on 
consistency with China’s WTO commitments. 
 
Question 51: page 165, paragraph 223 
 
As for the third generation of mobile phone st andards, China has performed demonstration 
experiments on TD-SCDMA in recent years. Therefore, Japan presumes that TD-SCDMA services will be approved sooner th an W-CDMA and CDMA2000. 
 Japan would appreciate more information concerni ng the time schedule for approval of these three 
international standards; TD -SCDMA, W-CDMA and CDMA2000. 
 
Question 52: page 165, paragraph 224 
 
At the WTO/TRM (Transitional Review Mechan ism under Section 18 of the Protocol on the 
Accession), China agreed that the Chinese domestic law, "Regulati on on the Interconnections between 
Public Telecommunication Networks (Decree 9 of the Ministry of Information Industry)", does 
include Leased circuits, Frame relays and IP-VP. Ho wever, Leased circuits, Frame relays and IP-VPN 
are not clearly stipulated in the law.   (1) Therefore, Japan would like to clarify whethe r or not these Leased circuits, Frame relays and 
IP-VPN are included in "Other networks that the Mi nistry of Information Industry defines" stipulated WT/TPR/M/199/Add.1 
Page 70  
 
  under paragraph 8 of Article 2 of "Regula tion on the Interconnections between Public 
Telecommunication Networks (Decree 9 of the Ministry of Information Industry)".   (2) Moreover, it would be much appreciated if China could furnish us with the legal document 
that "the Ministry of Information Industry defines" as is stipulated under paragraph 8 of Article 2 of 
this regulation. 
 
Question 53: pages 165-166, paragraph 226 
 
The "Regulation on Telecommunications" stipulates the amount of Y 2 billion is the minimum capitalization requirements for basic telecom servic es operator to provide services across the country 
or across different provinces, autonomous regions , and municipalities directly under the Central 
Government. Japan understands that China intr oduced the minimum capitalization requirements to 
protect consumers and investors in a case wher e a huge amount of investment is required for 
installation of telecom facilities. Meanwhile, in  the TRM (Transitional Review Mechanism under 
Section 18 of the Protocol on the Accession) of the People’s Republic of China, Japan received an 
answer that it is possible to provide basic teleco m services on a re-sale basis without installation of 
facilities. However, since the amount of investment  differs between the case where an enormous 
amount of investment is needed to install the fac ilities and where not so much money is required on a 
re-sale basis, Japan has difficulty in understandi ng whether or not the requirement for the same 
amount of the minimum capitalization is indispensable.  
 
Japan would appreciate an explanation and the reason to this.  
Question 54: page 166, paragraph 227 
 
Japan has some concern about the fact that condi tions that are not stipulated in law, such as 
requirement for establishing multiple subsidiary comp anies, were required in obtaining a license of 
"Information services", which are defined as Se cond value-added telecommunication services in 
"Classification List for Telecommunication Services". It appears that this condition is lack of transparency.   
Japan would be obliged if China could provide us w ith the legal or official documents, such as notice 
or transmittal, which stipulate the detailed conditions necessary to obtain a licence for "Information services".  
Question 55: page 166, paragraph 227 
 Internet data center services are defined as First value-added telecommunicati on services and internet 
connection services are defined as Second value-ad ded telecommunication services in "Classification 
List for Telecommunication Services" which was am ended in February 2003. However, Japan is 
aware of the fact that it is impossible for fore ign enterprises to provide these services in China.  
 
(1) Therefore, Japan would appreciate more information on why foreign companies cannot 
provide these services, what differences are ther e between the services that foreign enterprises are 
approved to undertake and the services that  they are not allowed to undertake.  
(2) Moreover, could China please explain which services foreign enterprises are able to undertake 
and which services they are not able to undertake?  WT/TPR/M/199/Add.1 
 Page 71 
 
 
  (vi) Distribution services 
 
Question 56: page 177, paragraph 279 
 
Please provide the details of the products prohibited to be sold by the suppliers which have more than 
30 outlets and the reason for the regulation for each product. 
 
Question 57: page 178, paragraph 283 
 
(1) Please discuss the new regulations on the larg e stores. Please describe the political intention 
and the course of discussion on the regulations, the expected time of the promulgation and 
enforcement, the measures to ensure proper operation,  the measures to ensure predictability for local 
residents and store openers, the measures to ensure accountability in regard to public hearings, and the 
possibility of an administrative protest.   
The Secretariat report says that some local governments have already held public hearings.  
 (2) Please describe the details of the plans for est ablishing the large stores, and the record of the 
local governments’ decisions.  
Question 58: page 178, paragraph 284 
 (1) Please describe the types of stores which have the incentive. If there are restrictions in the 
scale, the business category, or the ratio of foreign capital, please provide the details.   (2) Please describe the details of the applicati on and the regions where the incentives are higher 
than other areas. 
 
Question 59: page 178, paragraph 286 
 
The Secretariat report says that the franchisee can rescind the contract.  
 
(1) How does the fact-finding take place and how is the judgment done?  
 (2) Please describe details of "relevant information".  
JAPAN – ADDITION 1
 
 
Report by the Government (WT/TPR/G/199)  III. DOMESTIC POLICY DEVELOPMENT AND REFORM (G) P
ROTECTION OF INTELLECTUAL PROPERTY RIGHTS  
 
Question 1: page 13, paragraph 51 
 Please provide a list describing the names and the main occupations of the respective "32 IPR 
education and research institutions". 
 
Question 2: page 13, paragraph 52 
 
Please provide detailed information re garding the position and the func tion of the "collegiate Panels 
specializing in IPR issues" compared with the "IPR courts".  WT/TPR/M/199/Add.1 
Page 72  
 
  IV. TRADE POLICY DEVELOPMENTS 
(A) T
RADE EXPANSION AND PROBLEMS CONFRONTED  
(iii) Problems confronting China’s foreign trade development 
Question 3: page 14, paragraph 60 
 
It is important to maintain the quality of the build ing products by using good construction materials at 
a proper price.  
 
Is there any case of low price bidding in construction business in China? 
 
(E) C HINA AND THE MULTILATERAL TRADING SYSTEM REPRESENTED BY WTO 
(i) Fulfillment of the WTO accession commitments 
Question 4: page 18, paragraph 82  
(1) Although the Government of Japan appreciates  China’s efforts on amending laws concerning 
construction, such revision leads to reduce the bus iness opportunity for foreign capital companies.  
 
What is the policy principle of the Ministry of House and Urban-Rural Development of the People's 
Republic of China on foreign construction companies?  
(2) The Government of Japan considers the bond fi nance is effective for establishing a stable 
construction market.   
Based on this understanding, to what level is the "Model Guarantee Contracts for Construction 
Projects (2005, No. 74)" adopted in May 2005 implemented? 
 
(F) C
HINA ’S AND REGIONAL TRADE ARRANGEMENTS  
(i) China’s Participation in Regional Trade Arrangements 
Question 5: page 19, paragraph 92 
 
China-Chile Free Trade Agreement signed in April 2008 is said to include distinctive items in 
construction and architectural services.  
 
Please explain in detail regarding the conten ts of this agreement in these services. 
 
JAPAN – FOLLOW-UP  
 
Page 77, the answer to Japan’s Question No. 49 
 
According to the answer from China, China w ould welcome any comments from the Members on the 
draft Telecom Law. Therefore, Japan would like to  have more information on how to access the draft 
(such as URL), on the deadline and to which authority the opinions should be submitted. 
 
Page 82, the answer to Japan’s Question No. 52 
 
Japan appreciates China’s clear answer on the regulatory scope of "Regulation on the 
Interconnections between Public Telecommunica tion Networks (Decree 9 of the Ministry of 
Information Industry)", which does include Leased ci rcuits, Frame relays a nd IP-VPN. However, we 
would very much appreciate if China could provide us  with the legal document that "the Ministry of 
Information Industry defines" as is stipulated unde r paragraph 8 of Article 2 of this regulation. 
  WT/TPR/M/199/Add.1 
 Page 73 
 
 
  Page 83, the answer to Japan’s Question No. 54 
 
Japan is aware that conditions such as the obliga tion of establishing multiple  subsidiary companies 
were required when companies applied for a li cense of "Information services". Therefore, Japan 
would like to clarify whether or not there are offi cially such regulations when acquiring a license of 
"Information services" in China. Moreover, Japan we would like to ask China to provide us with the 
legal or official documents, such as notice or transmittal, which stipulate the detail conditions 
necessary to obtain a license for "Information services". On the other hand, if there is no such regulation, Japan appreciates China’s efforts in fu lly executing fair and transparent administrative 
management. 
 
Page 83, the answer to Japan’s Question No. 55 
 
Japan welcomes China’s detailed an swer. However, what Japan would like to know is not only the 
current condition of China’s regulation but also the reason and background of and the difficulties 
behind these regulations. As Japan has described in the previous question (Japan Question 55), Japan 
is aware of the fact that it is impossible for forei gn enterprises to provide Internet data center services 
and internet connection services in China.   Japan would like to have more explanation on "why foreign companies cannot provide these services", and "what differences there are between ser vices that foreign enterprises are allowed to 
undertake and those they are not". 
 
CANADA
 
 
Report by the Secretariat (WT/TPR/S/199 ) 
 
SUMMARY OBSERVATIONS 
(3) T RADE POLICIES AND MEASURES BY PRACTICE  
Page xi, paragraph 15 
 
1. The Secretariat Report notes that China has a dopted measures to increase the alignment of its 
national standards with Internati onal Norms, and provides specific examples with respect to SPS 
measures. Would China provide similar examples fo r how it is working towards aligning TBT related 
standards with International Norms?  
 
II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 
(1) I NTRODUCTION  
Page 24, paragraph 6  
"Several regulations and rules have been introduced  or amended with a view  to further liberalizing 
foreign direct investment and establishing a more  rules-based and predictable business environment 
for foreign investors."  
 
2. What specific steps have been taken by Ch ina to liberalize and promote foreign direct 
investment in China?   WT/TPR/M/199/Add.1 
Page 74  
 
  (2) I
NSTITUTIONAL AND LEGAL FRAMEWORK  
(ii) Legal structure and the legislative process Page 28, paragraph 20 
 
Paragraph 20 notes that provinces, autonomous re gions, municipalities directly under the Central 
Government, and certain large cities may formulate local regulations and rules that fit the specific 
conditions and characters in the respective areas.  3. How far does the Central Government’s power extend vis-à-vis local governments in 
provinces, autonomous regions, and municipalities in ensuring observance of obligations set out in 
international agreements, such as bilateral investment agreements? 
 4. How does the Central Government ensure obser vance of obligations, including those related 
to dispute settlement, that are set out in such international treaties? 
 (iii) Transparency Page 29, paragraph 21 
 
The Secretariat Report notes that some aspects of China's trade policy regime remain complex and opaque. It also notes that China has recently adopted  various measures to enhance transparency in its 
public sector. 
 
5. We would appreciate China advising us on the details of the recent measures taken and what, 
if any, further measures are pl anned to improve transparency. 
 
Page 30, paragraph 27 
 6. Could China advise if there is a requiremen t for pre-publication of trade-related laws and 
regulations in the China Foreign Trade and Economic  Gazette or another publication? If there is no 
requirement, could China explain what mechanisms are used to disseminate draft proposed rules for 
consultation with interested parties?  Page 31, paragraph 29 
 
7. Would China advise what measures it is taki ng to integrate a more rigorous cost-benefit 
analysis and risk analysis into the development of new rules and regulations? Could China explain 
what central, coordinating mechanisms or institu tions are equipped to make this practice more 
widespread? 
 
(iv) Centre-subnational relations a nd local barriers to internal trade 
Page 31, paragraph 30 
 
8. Could China advise how it is working to im prove coordination betw een central and local 
governments in the design of new rules and policies? Is consultation with local authorities systematic, 
or does it proceed on an ad hoc basis? Would Chin a explain what measures are in place to ensure sub-
national regulations meet WTO requirements?   WT/TPR/M/199/Add.1 
 Page 75 
 
 
  (3) F ORMULATION , ADMINISTRATION , AND IMPLEMENTATION OF TRADE POLICY  
(i) Main trade laws Page 31, paragraph 32 
 
Paragraph 32 lists some of the tr ade-related laws and regulations th at have been adopted or amended 
during the review period, including the Company Law and the Regulations on the Administration of 
Company Registration.  9. Do these laws apply to the admission and ope ration of foreign investments in China? If so, 
what do they cover? 
 
(ii) Agencies involved in trade policy implementation 
Page 32, paragraph 35 
 
It is noted that one of the central government agen cies which has an influence on trade policy is the 
National Development and Reform Commission (NDRC). 
 10. We understand the NDRC has recently undergone so me important internal changes. How will 
these changes impact the way in which NDRC views its future role in the mining sector, the steel 
sector and in regard to foreign investment?  (6) F
OREIGN INVESTMENT REGIME  
(ii) Legislative framework and procedures & (iii) Examination and approval procedure 
Pages 39 and 40, paragraphs 74 and 78 
 
Paragraph 74 notes that the "Provisions on Guiding Fo reign Investment Direction" sets out the basic 
regulations concerning FDI in China and classifi es such projects into categories: encouraged, 
permitted, restricted, and prohibited.  Paragraph 78 states that the "Interim Measures for the Administration of Examining and Verifying Foreign Investment Projects based on the Decision and on the Administrative Permission Law is the 
main regulation stipulating exam ination and approval procedures for FDI in China; the Interim 
Measures entered into force on 9 October 2004." 
 11. What are the criteria for the admissi on and establishment of FDI in China?  
 12. Are these criteria, policies, and regulations  publicly available to foreign investors? 
 
 a) If so, where can they be found?  13. Are the criteria- both for the admission of investments and the classification of the projects- applied equally to domestic investors as to foreign? If not, what are the key differences? 
 (ii) Legislative framework and procedures Page 40, paragraphs 75 and 76 
 
Paragraphs 75 and 76 outline some criteria and re quirements with respect to each category, for 
example, that "foreign investment in the restrict ed category may be regarded as permitted, if export 
sales are over 70% of total sales of the product".  
 14. What other performance requirements are impo sed on foreign companies in China? Are there 
local content requirements in order to qualify for a "permitted or encouraged" classification? 
 WT/TPR/M/199/Add.1 
Page 76  
 
  III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) I
NTRODUCTION  
Page 44, paragraph 8 
 
The Secretariat Report indicates that the Anti-Mono poly Law will enter into force on August 1, 2008, 
but that implementing details of the law have not yet been formulated. 
 15. What is the status of the draft implementing regulations for China’s Anti-Monopoly law? What consultation process will be undertaken on th e implementing regulations and when are they 
expected to be finalized and adopted?  
 
(2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(vi) Import prohibitions, controls, and licensing Page 57, paragraph 42 
 16. Can China please provide information on the grounds for its import prohibitions on mineral 
products, ash of precious me tals and base metals? 
 
Page 58, paragraph 49 
 
17. Can China please provide information on the wa ys in which it uses the statistics generated 
through the imposition of automatic import licenses on copper, copper ores and concentrates, coal, 
aluminium and scrap steel?  
(vii) Contingency measures 
(a) Anti-dumping and countervailing measures 
Page 60, paragraph 57  
Reference is made to "special circumstances" whereby anti-dumping duties may be lowered if a lower duty would be sufficient to remedy th e injury caused by dumped import. 
 18. Which bureau of MOFCOM undertakes such a review and what is the procedure for 
launching and conducting such an investigation? 
 
Page 61, paragraph 58 
 
According to the Secretariat Report, price unde rtakings cannot be sought or accepted unless 
MOFCOM has made a preliminary determina tion on the causal link between dumping and the 
industry injury.  19. Is there a prescribed time period in whic h exporters can offer price undertakings to 
MOFCOM? If so, what is it?  
20. Is the same prescribed time period also applicable to MOFCOM for suggesting price 
undertakings to exporters?  21. Under what circumstances does MOFCOM suggest price undertakings in anti-dumping duty proceedings? Are such suggestions  accorded greater weight than proposals which emanate from 
exporters? 
 The Secretariat Report also states  that, in the case of price undertakings, MOFCOM can resume a 
suspended/terminated investigation if the expor ter violates the price undertaking or if MOFCOM 
considers it necessary for other reasons.  WT/TPR/M/199/Add.1 
 Page 77 
 
 
  22. Can China clarify on what grounds would MOFC OM resume an investigation if there has not 
been a breach of price undertaking arrangement?  
Page 61, paragraph 59 
 
Paragraph 59 states that final measures are for fi ve years and may be extended following a review. 
 23. What are the procedures for initiating a sunset review?  According to the Secretariat Report, the decision to  levy anti-dumping duties is made by the Tariff 
Commission of the State Council, based on the suggestions made by MOFCOM. 
 24. Can China clarify whether the Tariff Commission of the State Council has any latitude to diverge from MOFCOM’s suggestions, and, if so on what basis?   Page 61, paragraph 60 
 
The Secretariat Report indicates that Parties may appeal MOFCOM decisions under the Administrative Reconsideration Law or to the Supreme People’s Court.  25. Please explain the differences between these two procedures, if any, and the circumstances 
under which appeals may be brought. 
 
Page 61, paragraph 62 
 
26. Please expand on MOFCOM’s pr ovisions on responding to An ti-Dumping Cases Relating to 
Export Products. What assistance, if any, is o ffered by MOFCOM to exporters engaged in anti-
dumping duty proceedings by other countries? How do es this assistance differ when the investigation 
involves a countervailing measure?  
(viii) Standards and other technical requirements 
 
Page 63, paragraphs 68 and 69  
27. The Secretariat notes that China has been gr adually increasing the alignment of its national 
standards with International Norms. Could China explain how it decides which national standards are 
revised and which are abolished? 
 
28. The Secretariat notes that China has decided that 9,536 (44.2%) of national standards would be revised by 2008. Could China advise if the 9, 536 national standards have been revised? If so, is 
there a summary of the revisions available?  29. Could China provide additi onal information on the criteria it uses when assessing which 
products are a priority for alignmen t with international standards? 
 30. The Secretariat notes that the alignment rate for the products listed were much higher than 
those that are not. Would China explain this finding? Could China advise if the alignment rate is the 
criteria used for prioritizing the products? 
 
Page 63 
 
31. Could China provide further elaboration on the difference between mandatory and voluntary 
standards? What are the differences in the pro cess of development of the two types of standards? WT/TPR/M/199/Add.1 
Page 78  
 
  Have all the mandatory standards been notified to the WTO TBT Committee as mandatory technical 
regulations?  No mention is made in the section "viii) Standards and other technical requirements" of China’s TBT 
Notification Authority or Enquiry Point.  
 
32. Could China explain how authorities (e.g. WTO Notification Authority/Enquiry Point) 
monitor the creation or modification of TBT measures in its country in order to determine whether a 
WTO notification is required under the transparency obligations of the TBT Agreement? 
33. Could China provide the mechanism, includi ng applicable interagency/inter-ministerial 
collaboration, for the preparation of China’s TBT notifications? 
 
(a) Standards, certification, and accreditation 
 
Page 64, paragraph 70 
 
34. Could China advise who is responsible for the development of the local, sectoral and industrial standards? Could China explain what step s are taken by the Standardization Administration 
of China (SAC) to ensure th at mandatory local and sectoral standards meet China’s WTO 
commitments under the TBT Agreement. Would Chin a advise where information about local, sectoral 
or enterprise standards that might affect im ports is available? Would the SAC provide such 
information to interested parties? 
 35. The Secretariat notes that an enterprise is encouraged to adopt national, sectoral, or local 
standards if they are available. Could China advise whether or not an enterprise is required to adopt 
(available) national standards? Would China advise what course of action the SAC might take if an 
enterprise/local municipality develops its own sta ndard when a national standard is available? 
 36. In its previous TPR, China noted that th e implementation of the Standardization Law 
eliminates the inconsistencies between the various t ypes of Standards. Could China advise what steps 
are being taken, pursuant to this law,  to eliminate these inconsistencies? 
 Page 64, paragraph 71 
 
37. The Secretariat notes that the review period fo r national advisory technical documents is three 
years, where the review period for developing new standards is five years. Would China provide further clarity as to why the review period for the national advisory technical documents is two years 
shorter than the review period for the actual standards? 
 
Page 65 
 
38. Could China advise if foreign based confor mity assessment bodies can obtain accreditation by 
the Certification and Accreditation Administrati on of China (CNCA) to operate in China as 
designated certification bodies? 
 39. China is a participant in a number of accr editation based MLA. To what extent does China 
recognize test and certification results from conf ormity assessment bodies which are accredited by 
other MLA participants? 
 
40. Could China explain how it is implementing the Cross Frontier Accreditation policy of ILAC 
and IAF?   WT/TPR/M/199/Add.1 
 Page 79 
 
 
  Page 66, paragraphs 79 and 80 
 
Although China has participated in the devel opment of the APEC TEL Mutual Recognition 
Arrangement (MRA) for conformity assessment of telecommunications equipment, China has not 
implemented this MRA yet. This means that supp liers of telecommunications equipment must send 
samples to China for testing. 
 41. When will China implement the APEC TEL MRA?  42. The Secretariat notes that the CNCA accepts certification, test and examination results of 
foreign certification and testing bodies. Would China confirm that this is the case for all sectors? Are 
there any sectors where China would not accept test  results from accredited foreign certification and 
testing bodies? Could China confirm if that is  the case for the Information Technology (security 
hardware and software) sector?  
43. Would China explain under what circumstanc es the CNCA might not accept test results from 
accredited foreign certification and testing bodies from certain sectors?  
Page 66, paragraph 82 
 
44. Could China advise if the formulation of the food certification and accreditation system has 
progressed into implementation? If so, would China advise how far has it been implemented and 
whether there is any documentation that is availa ble? If not, would China advise when it expects to 
start implementing the various components?  
Page 67, paragraph 83 
 
All medical devices imported into China must obtain a registration certificate from the Chinese State Food and Drug Administration (SFDA). A number of Canadian medical device manufacturers that 
have filed data with the SFDA have been waiting more than two years for SFDA regulatory approval 
and registration of products previ ously approved for sale in Canada. Th is delay is considerably longer 
than for products that have a CE mark or US Food and Drug Administration (FDA) approval, despite 
the fact that Canada's medical device regulatory system is recognized as world-class and Canada, like 
the US and Europe, is a member of the Global Harmonization Task Force established to promote 
international harmonization of  medical device regulations. 
 45. Why does the Chinese SFDA not treat medica l devices approved by Health Canada in the 
same manner as medical devices that have been approved in Europe or the United States?  
 46. Is there a difference in the SFDA's percepti on of Canada's medical device regulatory system 
or quality standards vis-à-vis the system and standards in these other jurisdictions? 
 
(ix) Government Procurement 
 
Page 70, paragraph 98 
 
In this report, the Secretariat notes that the total value of government procurement reached 
Y 368.2 billion in 2006.  In China’s first Trade Po licy Review, the Secretariat indicated that the 
government procurement total did not include pr ocurement by state-owned enterprises, public 
utilities, and defence-related organs.  WT/TPR/M/199/Add.1 
Page 80  
 
  47. What procurements are included in the Y 368.2 billion total for 2006? Does it include all 
goods, services and construction services at all leve ls of government (central and local)? Does it 
include procurement by state-owned enterprises,  public utilities, and defe nce-related organs?  
 
Page 71, paragraph 100 
 
The Secretariat notes that China’s Government Proc urement Law provides that the Government shall 
procure domestic goods, projects and services, with  limited provision for purchasing from foreign 
suppliers on an exceptional basis.  
48. Please explain the steps China intends to take to open its government procurement market to 
foreign suppliers.  
Page 71, paragraph 101 
 The Secretariat notes that for items listed in the Centralized Procurement Catalogue, purchases must 
be carried out by centralized procurement agencies,  which are "non-profit legal persons" that may be 
at any level of government.  49. Please list the names of all of the centralized procurement agencies and describe their role and 
functions in greater detail. 
 
50. What does the status of "non-profit legal persons" mean?  51. Are these centralized procurement agen cies government agencies? Please explain. 
 Page 72, paragraph 104 
 
The Secretariat notes that Article 11 of the Government Procurement Law and the Rules on Information Openness require that procuring entities must announce government procurement and 
bidding information in media in a timely and standard manner.  
52. Does the Law or the Rules set out minimum c ontent requirements for the published notices or 
tender documents? If so, what are t hose minimum content requirements? 
 53. What are the rules in terms of publication period? Is the notice published for the full bid solicitation period?  
 
(3) M
EASURES DIRECTLY AFFECTING EXPORTS  
(ii) Export taxes 
 
Page 74, paragraph 112 
 We note China's significant use of export taxes, both statutory and interim, on a variety of metals and 
some mineral products and that the use of interim import taxes appears to be on the rise (174 tariff 
lines in 2007 and 334 lines in January 2008). It is fu rther noted that use of such taxes results in an 
increase in domestic supply of the products concer ned and a tendency to lower domestic prices to 
levels lower than would otherwise be the case a nd that export taxes may implicitly assist domestic 
downstream processing of the products concerned. 
 54. In the case of minerals and metals, what other policy measures has China considered to 
achieve its main objective of improving the environm ent by reducing exports of products considered  WT/TPR/M/199/Add.1 
 Page 81 
 
 
  to be highly energy consuming or polluting, and wh ich do not result in an increase in domestic supply 
of the products concerned?  
(iii) Tax rebates on exports 
 
Page 74-75, paragraph 115 
 
The example given in footnote 116 is of a rebate ra te on primary aluminium which, in 2004 starts out 
as 15%, and then is reduced to 8%.  The latter is then removed in 2005. In 2006, a 5% export tax on 
primary aluminium with a purity of 99.5% and above is removed, while the ex port tax on purity levels 
below 99.5% stands. Then, on November 1, 2006,  the 5% export tax on the latter products is 
increased to 15%. It is also noted that the VA T rebate on exports of aluminium foil (primary 
aluminium is a major input) is 13%. It also states  that Chinese authorities do not believe the difference 
between the VAT rates and rebates constitutes a levy on exports.  
55. Can China please explain the reasons for its imposition, reduction and removal of VAT 
rebates (and export taxes) in this example and the reasons why China does not believe the difference 
between the VAT rates and rebat es constitutes a levy on exports? 
 
(4) M
EASURES AFFECTING PRODUCTION AND TRADE  
(i) Taxation and tax incentives 
(b) Indirect taxation 
Value added tax  Page 85, paragraph 151 
 56. Can China please advise why it has chosen to apply a VAT at a level of 13% on mining of 
metals and minerals?  
(iii) Other industrial policies and measures 
(a) Catalogues and "guidance" 
 
Page 91, paragraph 170 
 
57. Since a listing on the "prohibited categories"  portion of the NDRC's Catalogue of Guidance 
Regarding Industrial Structural Adjustments essentially ends all investment in that sector, as well as 
the import, transfer, production, marketing and use of production processes, technologies, equipment, 
and products in the prohibited category, can China please provide information on the criteria 
established to evaluate whether a particular sector is included on the "prohibited" portion of the 
Catalogue?  
Page 91, paragraph 171 
 The Secretariat Report notes in footnote 174 that in 2006 and 2007 the NDRC issued entry criteria 
for, inter alia, lead and zinc; tungsten; tin; antim ony; electrolytic manganese metal and steel and that 
opinions were issued during the same years to restru cture, inter alia, the lead and zinc; cement, coal, 
ferroalloy and coke industries.  
58. What considerations does the NDRC take into  account when it makes a determination to issue 
entry criteria and to issue an opinion for restructuring?  WT/TPR/M/199/Add.1 
Page 82  
 
  (iv) State-owned enterprises, privatization, and corporate governance 
(a) State-owned enterprises and privatization 
 
Page 95, paragraph 189 
 The Secretariat Report indicates that, as of 2008, unspecified state-owned enterprises (SOEs) are to 
start paying dividends to the Government. It is understood that there will be three dividend rates 
depending on the enterprise category. Canada wo uld like additional information concerning this 
program.  
59. Could China indicate which classes of SOEs in China are subject to this program (e.g. only 
SOEs which are wholly-owned or controlled by the central government)?   60. Does this program extend to any SOEs that are owned or controlled by any other level of 
government in China and, if so, please explain. 
 
61. Does this program extend to any SOEs that  have some degree of foreign investment? 
 62. Is this program applicable to SOEs in the service sector, pa rticularly financial institutions? 
 63. Could China indicate how many SOEs, in total, are in each of the three enterprise categories? 
 
64. Will the requirement to pay dividends extend to every SOE within each of  the three enterprise 
categories?   a) If the answer is in the negative, c ould China indicate how many SOEs in each 
enterprise category will be required to pay dividends and how was the decision made 
as to which SOEs would be exempted fr om the requirements to pay dividends? 
 
(vi) Intellectual property rights 
 
Page 105, paragraph 229 
 
According to the Secretariat Report, "A trade mark can be revoked even after being granted". 
 65. Canada would be grateful if China could elaborate under what circumstances a registered 
trade mark can be revoked. 
 
Page 105, paragraph 233 
 
The Secretariat Report states that, "local copyright administration offices (under the local governments of provinces, autonomous regions, a nd municipalities directly under the Central 
Government) are in charge of local copyright registration and administration". 
 
66. Canada would appreciate further informa tion on what is meant by "local copyright 
registration". Do local copyright administration o ffices act as facilitators by handling administration 
of local applications and distributing them to th e National Copyright Administration, or are their 
responsibilities broader? 
  WT/TPR/M/199/Add.1 
 Page 83 
 
 
  Page 106, paragraph 239 
 
According to the Secretariat Report, "GIs are also regulated by the AQSIQ, which issued the 
Regulations on Protection of Products of Geographi cal Indications in June 2005. Apparently, this 
resulted in some confusion am ong producers and consumers". 
 
67. Canada would be grateful fo r details regarding the nature of the confusion created in this 
context.  
Page 107, paragraph 243 
 
The Secretariat Report indicates, "[c]ustoms stre ngthened efforts in IPR protection at the border 
through a five-month campaign from October 2007, ai med at IPR-infringing exports to the EC, Hong 
Kong, China, the United Arab Emirates, and the United States".  
68. Canada appreciates China’s efforts in IPR en forcement and would be grateful for details on 
the results of this campaign.  
Page 108, paragraph 244 
 
According to the Secretariat Report, "SIPO has been publishing annual Action Plans on IPR 
Protection since 2006, to provide guidance on IPR enforcement. By end-August 2006, 50 IPR service 
centres had been set up all over the country".  69. Canada would be grateful for further inform ation on the objectives of the IPR service centres 
and how they function. 
 
IV. TRADE POLICIES BY SECTOR 
(4) M
ANUFACTURING  
(iii) Automotive sector (b) Regulatory framework  
Page 132, paragraphs 100 – 103  
70. Would China please provide details on its ma ndatory technical regulations for importing a 
new vehicle/auto parts into China?  IV. TRADE POLICIES BY SECTOR (5) S
ERVICES  
(iii) Financial services (b) Banking 
 
Page 145, paragraph 146 
 
Paragraph 146 of the Secretariat Report notes that commercial banks in China are not permitted to 
underwrite insurance policies, but may act  as agents to sell insurance products. 
 71. Could China confirm whether either domes tic or foreign commercial banks may establish 
insurance subsidiaries in order to  underwrite insurance policies? 
 72. If yes, could China indicate whether the same  regulations govern both domestic and foreign 
commercial banks seeking to estab lish an insurance subsidiary? 
 WT/TPR/M/199/Add.1 
Page 84  
 
  Page 146, paragraph 153 
 
Paragraph 153 indicates that when calculating foreign financial institutions’ equity interest in China’s 
commercial banks, foreign entities will be counted as  one financial institution if the China Banking 
Regulatory Commission (CBRC) deems them to be related parties. 
 
73. Could China clarify what criteria are used to  evaluate whether foreign financial institutions 
should be considered related parties?  
Page 148, paragraph 159 
 
Paragraph 159 suggests that consideration is being given to the recapitalization of the Agricultural 
Bank of China through a capital injection by the Central Huijin Investment Corporation Limited. 
 74. Can China provide an update on the status of the reform program for the Agricultural Bank of 
China, including any information on plans to introduce strategic foreign investors or move forward 
with a public listing for the bank?  
(c) Insurance 
 Page 152, paragraph 174 
 
According to paragraph 174, at end-2006 there we re 113 insurance companies in China, including 
6 insurance holding companies.  75. Could China indicate whether it is possible for foreign insurance companies to establish 
holding companies in China? 
 76. If yes, could China identify the releva nt regulations or guidelines governing such 
establishments?  
(d) Securities 
 
Pages 161-162, paragraph 213 
 
Paragraph 213 of the Secretariat’s report identifies several limitations to the business powers of joint 
venture securities companies, including restrictions  on the ability of such companies to engage in 
brokerage business other than in B-shares and H-shares. 
 77. Could China confirm whether joint venture secu rities companies are also currently permitted 
to engage in the trading of A-shares?  
(v) Transport service 
(b) Maritime Transport Services  
Page 172, paragraph 257 
 
Paragraph 257 says: "The Government encourag es enterprises to expand multi-modal transport, 
including by: investing in deep-water containe r-dock construction and im proving the road, railway, 
coastal, and freshwater transport system;  establishi ng an internationally competitive container fleet; 
developing container transport information techno logy, including electronic data interchange (EDI) 
and other electronic business systems; and improving the legal structure for multi-modal transport." 
  WT/TPR/M/199/Add.1 
 Page 85 
 
 
  78. Which policy, legislative or economic in struments does the Chinese government use to 
encourage private investment into multi-modal tran sportation options including inland waterways?  
 
Page 172, paragraph 258 
 The Secretariat Report states that: "Ports are the conduit for around 90% of China's rapidly growing 
trade, their efficiency is essentia l. There were 1,430 ports in China in 2003, of which 132 could deal 
with international trade. In 2006, merchandise th roughput in Chinese ports was 970 million tonnes, up 
18% over 2005; container throug hput at key ports amounted to 47.4 million TEUs, up 30.9% over 
2002." 
 
79. How has China been able to ensure port effici ency at a time of such tremendous growth? Is 
performance of the port and the overall trans portation system being tracked over time?  
 
Page 174, paragraph 269 and footnote 257 
 
Paragraph 269 and footnote  257 appear to contain conflicting statements since the former says: 
"According to the authorities, China does not have any cargo reservation or preference measures; all 
commercial cargo is accessed freely, unless covered by cargo-sharing arrangements. China has bilateral cargo-sharing arrangements with Algeri a, Bangladesh, Brazil, and Zaire." and the latter 
states: "... cargo-sharing arrangements with th ese countries have not been implemented." 
 
80. Please explain the discrepancy.  
(iv) Telecommunications 
 
Pages 163-164, paragraph 219  
Paragraph 219 states that the assets of the state-ow ned basic telecommunications providers are held 
by the State-owned Assets Supervision and Ad ministration Commission (SASAC). Footnote 215 
notes that the Regulations on Telecommunications (2000) stipulate the separation of the Government from the business of providing telecommunications services. 
 
81. Could China provide information on the SA SAC’s role in the operations of the basic 
telecommunications providers?  82. Could China describe the measures in place to ensure the separation of the state-owned basic 
telecommunication providers from the telecommunications regulator, as committed to in the 
Telecommunications Reference Paper?  83. Does China have plans to pr ivatize the basic telecommunications providers in the future? 
 
Page 164, paragraph 221 
 
Paragraph 221 notes that China does not yet have a telecommunications law but is in the process of 
drafting one.   84. Could China provide an update on the progress made in the drafting of the 
telecommunications law and provide any projected timelines on when it will be implemented? 
 WT/TPR/M/199/Add.1 
Page 86  
 
  Page 165, paragraph 225 
 
Paragraph 225 comments that the Ministry of Inform ation Industry (MII) is considering how to define 
"dominant carrier" for the purposes of interconnec tion with a telecommunications service provider, 
but has not yet established one. However, footnote 221 states that "dominant" is defined under the 
Regulations on the Interconnection betw een Public Telecommunication Networks. 
 85. Could China clarify if a definition, or standa rd, has been established for the determination of a 
dominant carrier as applied to interconnection?  Pages 166-167, paragraph 228 
 
Paragraph 228 indicates that MII sets tariff caps for telecommunications services.  86. Could China indicate if MII makes publicly available its decisions establishing tariffs 
including its reasons and the supporting info rmation relied upon for its determinations? 
 
Page 167, paragraph 229 
 
Paragraph 229 describes recent changes to tariffs and price caps, and refers to MII tariff procedures.  
 
87. Could China provide additional description of the extent to which the information used to 
establish price caps (such as number of users, volume of traffic, capacity of facilities, cost of facilities) is available to interested parties who participate in its public tariff processes? 
 
(ix) Accountancy services 
 
Pages 185-186, paragraphs 321, 322, and 325 
 
Paragraph 321 notes that foreigners are accorded  national treatment based on the principle of 
reciprocity.  
88. Could China explain how this requirem ent is operationalized given the additional 
commitments that China has made in its GATS schedul e which state that foreigners who have passed 
the Chinese national certified public accountants (C PA) examination shall be accorded national 
treatment?  
Paragraph 322 states that any Chinese certified public accountant (including Chinese and foreign 
citizens with Chinese CPA certification) may apply to establish a partnership accounting firm with 
two or more partners.  89. Do both partners have to hold a Chinese CPA certification?  
Paragraph 325 notes that foreign public accounting firms can establish resident representative offices 
in China with permission from the Ministry of Finance.  90. What are the requirements that a foreign firm must meet in order to receive permission?   
91. If a partner or shareholder of a foreign p ublic accounting firm has obtained the Chinese CPA 
certification, is the requirement to obtain permission from the Minister of Finance waived?    WT/TPR/M/199/Add.1 
 Page 87 
 
 
  (x) Tourism 
 Page 188, paragraphs 330 and 331 
 
The Secretariat Report confirms the selected improve ments in China's market for travel agencies and 
tour operators, as reflected in its schedule of commi tments/offer in the GATS. In particular, they 
pertain to the lifting of joint venture requirement s and geographical restrictions. Meanwhile, China's 
restrictions on operations and revenue requirements remain. 
 92. With the lifting of joint venture requirements and geographical restrictions, is our 
understanding correct that China will maintain its annual revenue requirement of more than 
US$40 million? We understand that the registered capital requirement will remain, but will be the 
same as that of the Chinese travel ag ency/tour operator. Please re-confirm. 
 93. As to the gross tourism turnover requiremen ts, we note that in respect of your Closer 
Economic Partnerships Arrangement s with Hong Kong and Macao that these are set at no less than 
US$15 million for Hong Kong and Macao providers est ablishing wholly-owned travel agencies in 
Mainland China and not less than US$8 million for t hose establishing joint-venture travel agencies in 
Mainland China. Is China intending to lower the gr oss tourism turnover requirements in respect of its 
GATS commitments? If yes, when? If no, why not?  
94. We also note that requirements on business scope remain. What is the rationale for these 
requirements and when does China intend to lift them? 
Page 188, paragraph 332 
 
In paragraph 332, the report indicates that approved destination status (ADS) is granted upon 
application.  
 95. What are the steps required to be adde d to China's list of approved destinations? 
 96. China provides access to group tourism expor ts for countries with Approved Destination 
Status. Without Approved Destination Status, ser vice suppliers are denied access to group tourism 
from China. How do such service suppliers differ fro m service suppliers of WTO member countries 
with Approved Destination Status?  97. For how many countries does China have a wr itten bilateral ADS agreement? For countries 
with a bilateral ADS agreement, when will Ch ina make the information publicly available? 
 
98. What is the role of the Ministry of Foreign Affairs and the Ministry of Public Security in granting Approved Destination Status?   99. What criteria are applied by the Ministry of Foreign Affairs and the Ministry of Public Security in allowing the China National Tourism Ad ministration (CNTA) to enter into negotiations 
for Approved Destination Status? 
 WT/TPR/M/199/Add.1 
Page 88  
 
  CANADA – ADDITION
 
 
Report by the Secretariat (WT/TPR/S/199) 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(2) M EASURES DIRECTLY AFFECTING IMPORTS  
(iii) Tariffs Pages 48-50, paragraphs 19, 21, and 22 
 
Canada notes in the report that Chin a’s applied MFN tariff has 65 different ad valorem  rates, ranging 
from 0% to 65%, and that there has been no overall reduction in the simple average applied MFN duty 
rate between 2005 and 2007.    1. Can China explain if it has plans to reduce the number of different ad valorem  rates, and to 
reduce the top rates, particularly those on agricu ltural products, where the simple average applied 
MFN duty rate is 15.3%? 
 
(a) MFN tariff rates 
Applied tariff rates Page 48, paragraph 21  
 
Paragraph 21 states that "interim " applied MFN tariffs may be intr oduced or amended by the Tariff 
Commission whenever it considers it necessary for a sp ecified period, and that the interim tariff rates 
are usually lower than the standard applied MF N rates. Additionally, in China’s WTO Accession 
Agreement Annex 8, Schedule CLII, Part I, Section 1-A Tariffs, Paragraph 2 (b) it states that "China 
undertakes in principle to apply its tariff, both bo und and applied rates, as well as other duties and 
charges, in such a way as to not cause distorti ons in the terms of competition between substitute 
products or competing suppliers. In  this regard, there was particular interest in ensuring fair 
competition between rape (canola) seeds and soybean s, rape (canola) oil and soybean oil […]" 
 2. How does China intend to ensure the application of an "interim MFN" tariff for a product is 
done in a way that is consistent with the spirit of  its WTO Accession undertakings in regards to not 
causing distortions in the terms of competition be tween substitute products or competing suppliers, 
particularly between substitute oilseeds? 
 
Page 55, paragraph 34  
Canada is pleased to note in the report that China has extended, unilaterally, special preference tariffs 
to 37 least developed countries, and Canada congrat ulates China on this.  Canada notes, however, that 
a number of UN-designated least developed countries are not included in China’s special preference tariffs.   3. Canada would like to ask if China plans to ex tend these special preference tariffs to the other 
12 least developed countries?  In particular, Cana da would like to know if China is considering 
extending these special preference tariffs to Afghanistan?  
(vi) State trading 
Page 59, paragraph 53 
 
Canada notes in the report that, under the terms of  China WTO accession Protocol, annual reviews of 
the growth in volume of trade in processed oil (p etroleum) traded by Ch ina’s non-state-trading 
enterprises were to be conducted with interested Me mbers, but that no such reviews have taken place. 
  WT/TPR/M/199/Add.1 
 Page 89 
 
 
  4. Canada would like to ask China when it expects to begin these annual reviews? 
 
(viii) Standards and other technical requirements 
Page 63, paragraphs 68 and 69  
 The examples given in the Trade Policy Review  refer to consumer and industrial electronic 
components.   5. Could China please identify the steps it has take n and is taking to ali gn its national standards 
with international sta ndards for food products? 
 (b) Sanitary and phytosanitary measures (SPS) Page 67, paragraph 85 
 
The Secretariat Report notes that "MOFCOM is in charge of submitting notifications regarding SPS 
measures to the WTO, and the AQSIQ is the Enquiry  Point under paragraph 3 of Annex B of the SPS 
Agreement."  3. Could China provide further explanation on the current process, including applicable 
interagency /inter-ministerial co llaboration, to review SPS measures to determine those to notify to 
the WTO?  
 
4. Could China provide the mechanism, including applicable interagency / inter-ministerial 
collaboration, for the preparation of China's SPS notifications? 
 5. Canada appreciates that China is in the pro cess of updating its legislative framework for food 
safety. Will measures under the proposed new food saf ety legislation now under consultation be based 
on international standards and guidelines? 
 
(3) M
EASURES DIRECTLY AFFECTING EXPORTS  
(ii) Export taxes Page 74, paragraph 112  (iii) Tax rebates on exports 
Page 75, paragraph 116  
Canada notes in the report that China, in an effo rt to reduce energy consumption and protect the 
environment, levies interim export duties on 334 tariff lines,  all dealing with goods deemed 
administratively to be particularly energy intens ive or environmentally damaging.  These measures 
apply only to exports of these goods, not to their sales  domestically.  While Canada applauds China’s 
environmental efforts, using administrative efforts such as export tariffs rather than market forces is 
inefficient and leads to further waste and inefficien cy in resource allocation. The measures taken also 
tend to lower the cost of these energy-intensive products on the Chinese domestic market, thereby 
encouraging wasteful use of them. 
 
6. Can China indicate whether it is planning to move towards implementing an environmental 
regime of pollution taxes and market prices for ener gy that will allow price signals to guide Chinese 
industry to lower energy use and ensure the most efficient use of resources?  Such a market-driven 
regime would make administrative meas ures such as export tariffs unnecessary. 
 
Canada notes in the report that China levies interi m export duties on grain, rice, maize and soybeans, 
in an effort to reduce the domestic inflation ra te. These actions lower the domestic price of these WT/TPR/M/199/Add.1 
Page 90  
 
  staple foods, thereby reducing the incentive for Ch inese farmers to produce more of these foods to 
meet growing demand in China and other countries.   7. Can China indicate whether it is planning to move towards eliminating these interim export 
duties? Such action would help to allevi ate the current global food prices crisis. 
 
(v) Export prohibitions, restrictions and licensing 
Page 77, paragraph 124 
 
Canada notes in the report that as of January 1, 200 8, China has not only maintained but has expanded 
its global export quota system to cover not only rice,  maize, wheat, cotton and coal but also flours of 
some grain products. These actions tend to reduce th e domestic price of these products, distorting the 
market mechanism, and discouraging additional production of these agricultural products. Under 
Article XI of the GATT, WTO members are discour aged from maintaining export quotas, except in 
cases of critical shortages or for the application of st andards or regulations. No critical shortage of the 
covered foodstuffs appears to exist in China, and no new standards or regulations have been 
promulgated. 
 
11. Can China indicate when it will move to eliminate these global export quotas? 
 
IV. TRADE POLICIES BY SECTOR 
(1) A
GRICULTURE  
(iii) Policy instruments 
(b) Internal measures 
Support to Agriculture Page 117, paragraph 36  
 
Paragraph 36 states that direct subsidies for grai n producers are being applied in different ways in 
different provinces.  This would seem to make it a challenge to properly report such support in 
China’s anticipated domestic support notifications.  
 
12. What steps is China taking now in order to have at hand the information needed to notify the 
direct subsidies for grain producers in accordance wi th the rules of the Agre ement on Agriculture and 
the requirement and formats of document G/AG /2 ("Notification Requirements and Formats"; 
30 June 1995)? 
 
Report by the Government (WT/TPR/G/199) 
 
II. DOMESTIC POLICY DEVELOPMENT AND REFORM 
(C) E
STABLISHMENT OF THE SOCIAL SECURITY SYSTEM  
Page 9, paragraph 30  
Paragraph 30 notes that the Ministry of Labor and Social Security (MOLSS) would be restructured as the Ministry of Human Resources and Social Security in 2008. 
 1. Does China expect that the new Ministry w ill have the same mandate as MOLSS with respect 
to the approval of foreign and domestic compan ies to provide enterprise annuities services? If so, 
could China indicate whether the application and licensing processes for the provision of enterprise 
annuities services have been streamlined since its last  trade policy review?  If that is the case, could 
China explain what changes have been made, incl uding any revisions to processes maintained by the 
functional regulators (CBRC, CSRC, and CIRC)? 
  WT/TPR/M/199/Add.1 
 Page 91 
 
 
  III. DOMESTIC POLICY DEVELOPMENT AND REFORM 
(G) P ROTECTION OF INTELLECTUAL PROPERTY RIGHTS  
Page 12, paragraph 48 
According to the Chinese Government’s Report, "D uring the past two years, China has enacted a 
number of rules and regulations, further improving the legal system for IPR protection." The same 
paragraph (para. 48) goes on to lis t various regulations and decisions  promulgated by State Council, 
the Supreme People’s Court, and other Chinese Government agencies. Canada appreciates China’s efforts to improve its legal system for IPR prot ection. Canada also notes that the aforementioned 
regulations are specific to copyright issues over co mputer network and counterfeiting and piracy of 
audio-visual products.   
 
2. Canada would be interested to learn whethe r regulations affecting information products such 
as software applications and source codes were also promulgated during the two year period. 
 
Page 12, paragraph 50 
 
The Chinese Government Report notes at paragra ph 50, "In order to furt her strengthen the law 
enforcement of IPR protection, various Chinese la w enforcement agencies and authorities carried out 
in the past 2 years a series of special nationwide campaigns to crackdown on all kinds of infringement 
activities." Canada notes China’s efforts to st rengthen the enforcement of IPR protection. 
 
3. Canada would be interested for details regarding the outcome of the campaigns (i.e. number 
of campaigns, charges laid, convictions, type of infringement, category of goods, etc.). 
 
Page 13, paragraph 51 
 At paragraph 51 of the Government Report, Chin a reports the following, "The Chinese Government 
adopted various means to extend education and trai ning programmes to enhance the public awareness 
on IPR protection.  Every year, activities of various forms are organized, such as IPR Week to commemorate the "World Intellectual Property Day (April 26)".  Special training courses on IPR have been conducted by the Chinese Government tailored fo r senior officials including ministers, director-
generals and provincial and muni cipal governors, as well as law enforcement officials and judicial 
personnel.  Meanwhile, the Central Government has also set up 32 IPR education and research 
institutions and has incorporated IPR courses into primary and secondary school curricula." 
 4. Canada encourages China to continue effort s to raise public awareness on IPR protection.  
Canada would also ask if China could elaborate on the location, jurisdiction and mandate of the 
32 IPR education and research institutions and pr ovide details on the IPR related educational 
cirricula?  
IV. TRADE POLICY DEVELOPMENTS 
(A) T
RADE EXPANSION AND PROBLEMS CONFRONTED  
(i) Rapid growth of merchandise trade 
Page 14, paragraph 61 
 
China outlines the results of a survey conducted by  the Ministry of Commerce, which suggests that 
China has suffered major financial losses in comply ing with foreign regulatory requirements. Among 
the various costs cited are lost trading opportu nities amounting to US$143.7 billion representing some 
15 % of total exports. 
 1. Could China provide further information on the survey, including how the data were collected 
and quantified?  WT/TPR/M/199/Add.1 
Page 92  
 
  (D) T
RADE FACILITATION MEASURES  
Page 16, paragraph 77 
 
At paragraph 77 of the Government Report, Chin a reports the following, "To further improve the 
national standardization system, the Chinese Govern ment has committed to reforming the relevant 
working mechanism, keeping existing standards and technical regulations up to date, encouraging 
enterprises to participate more actively in the de velopment and revision of standards and technical 
regulations" 
 
2. Could China elaborate on the specific measures that will be used to review and update 
technical regulations?  How will enterprises be enc ouraged to participate mo re actively in these and 
other regulatory processes?  Which governmental  body/organization(s) w ill be responsible for 
overseeing this process?  
Page 16, paragraph 78 
 
At paragraph 78 of the Government Report, China reports the following, "Certification and 
Accreditation. The Chinese Government has establi shed a unified and standard certification and 
accreditation system which applied equally to domes tic and foreign enterprises, and has effectively 
implemented the compulsory certification system, thus virtually eliminating the double authentication existed prior to China’s accession to the WTO. With  a view to reducing obstacles to and facilitating 
the conduct of international trade, the Chinese Govern ment has always been actively participating in 
the activities of international and regional certifi cation and accreditation organizations, and has been 
actively carrying out international mutual  recognition of product certification." 
 Canada understands that telecommunications pr oducts in China must meet two certification 
requirements before they can be deployed in th e Chinese market: a type approval issued by the 
Ministry of Information Industry (MII), known as the Network Access License (NAL), together with a separate approval under China’s Compulsory Prod uct Certification Scheme, also known as the CCC 
Mark.    3. China notes that the government has establishe d a unified and standard certification and 
accreditation system.  Could China clarify whet her this is the case for telecommunications 
equipment?  Could China explain whether the requirements for the two marks ((NAL and CCC) 
previously required for telecommunications equi pment has changed?  If so, how have the 
requirements for telecommunications equipment have changed?   
4. Could China indicate what plans it has to facilita te the recognition of foreign certification labs 
to ensure that speed to market will not be co mpromised for telecom/IT product suppliers if the 
Security Certification regime is to come into effect in May 2009? 
 
(E) C
HINA AND THE MULTILATERAL TRADING SYSTEM REPRESENTED BY WTO 
(i) Fulfillment of the WTO Accession Commitments 
Page 18, paragraphs 82 and 83  
 
According to the Report, trade-related laws  and regulations are made public in the China Foreign 
Economic and Trade Gazette.  
 
5. To what extent are the  rules and regulation listed in para graph 82, which aim at further 
opening up China's service sectors, made available in the Gazette?  Are there other sources that make 
the rules and regulations publicly available?  
  WT/TPR/M/199/Add.1 
 Page 93 
 
 
  (F) C HINA AND REGIONAL TRADE ARRANGEMENTS  
(i) China's Participation in Regional Trade Arrangements Pages 19 and 20, paragraphs 95-99  
 
The Report cites the various bilateral and regional tr ade free trade agreements that China currently has 
underway.  
 
Please advise if the FTAs under negotiation with the Gulf Cooperation Council, Australia, Singapore, 
Iceland, and Peru include commitments regarding services.  CANADA, MEXICO AND THE UNITED STATES
 
 
Report by the Secretariat (WT/TPR/S/199) 
 
IV. TRADE POLICIES BY SECTOR 
(4) M ANUFACTURING  
(i) Iron and steel Pages 128-129, paragraphs 82-90 
 
It is recalled that Canada, Mexico and the Unite d States, initially raised concerns with steel 
developments in China when they posed a series of questions regarding the China Iron and Steel 
Industry Development Policy (Steel Policy), draf ted by the National Development and Reform 
Commission (NDRC) and released at the July 20, 2005 executive meeting of the State Council. At the 
time, all three North American Governments expressed  their views that while they agreed with the 
goal of an efficient, competitive, and rational steel  industry envisaged by China's Steel Policy, they 
had misgivings regarding the implementation of the initiative to the extent that it dictated industry 
outcomes and involved the government making decisions that should be made by the marketplace. 
While there have been a number of developments in both the global and Chinese steel sectors since 
China's steel policy was issued, Canada, Mexico an d the United States continue to have fundamental 
concerns with government objectives and actions that direct or seriously influence development in the 
marketplace. In this regard, Cana da, Mexico and the United States re fer to the continued identification 
of steel as requiring a national policy, the provision of significant subsidies to steel and related 
industrial sectors, many of which have been incl uded in recent countervailing duty investigations 
conducted in North America, the allocation of resour ces into and out of China's steel industry, and the 
manipulation of border measures to encourage, if not direct the export of higher value goods. Again, 
the use by government of policies, practices a nd programs to influence, if not manage, market 
outcomes is at the root of the three governments' concerns with China's steel policy regime. 
 
In this context, Canada, Mexico and the United States would initially like to refer to the Trade 
Policies by Sector in the Manufacturing of the Iron and Steel and other sections of the Trade Policy 
Review of China as produced by the Secretariat of  the Trade Policy Review Body of the World Trade 
Organization (WT/TPR/S/199) of April 16, 2008.  
1. The Secretariat's report states in paragraph 82 of Part IV that in 2006 state-owned enterprises 
(SOEs) accounted for 43 percent of total steel output. Please clarify China's definition of an SOE. 
  a. Does this definition include all enterp rises owned and controlled by government at 
the central or sub-central level?  
 b. Has the proportion of total output accounted for by SOEs changed, and what role, if 
any, does the government have in influencing any changes?  
 c. Has China issued any directives or established any policies or plans for the 
privatization of state-owned steel enterprises? If so, please describe them.  
 WT/TPR/M/199/Add.1 
Page 94  
 
  2. It has often been observed that the Chinese st eel sector is highly fragmented, with few large, 
advanced steel producers and a mass of small and medium-sized steelmakers. These circumstances have been identified as one of the main causes of  the unprecedented expansion of China's steel 
production over the past several years. Consolidation,  elimination of the most inefficient and polluting 
mills, and the reduction of the number of steel make rs are among the chief stated objectives of China's 
Steel Policy of 2005.  
  a. What progress has China made in me eting these objectives, and what support does 
the Government provide in furtherance of these goals?  
 b. Please provide any updates to the 2005 Steel Policy and detail what closures have 
occurred under NDRC's plans to eliminate obsolete mills. Please also explain whether 
any of this information is readily available on the Internet.  
 3. The report states in paragraph 83 of Part IV  that there is an "over-investment" in China=s 
steel industry and that the Government has adopted a number of measures to curb investment in the 
sector, including closing down obsolete production, adjusting VAT rebates and export taxes on steel, 
and setting differential rates for electricity.   a. Please describe the results of these efforts and the current situation in regard to "over-
investment" in the steel industry, particular ly in light of the continued rapid growth 
both in China's steel production and e xports since 2005. Please address in your 
response the success and efforts of FA GAI Gong Ye (2006) No. 1084 regarding the 
Notice on Total Output Control, Elimination of Backwardness, Structural Adjustment 
of Iron and Steel Industry issued by the NDRC.  
 b. The report states that in principle new steel projects will not be approved and smaller 
producers are to be closed down or acquired. Please explain the approval process and 
describe its effectiveness in lo wering industry capacity.   
 c. Please provide the NDRC's listing and specific details with respect to the steel 
projects approved by the Government of China since the National Steel Policy was put in place in 2005. 
 d. Please provide full details of capacity allotments as a result of closed-down 
enterprises and how the capacity allotments are awarded or assigned.  
 e. Please provide details on contract obligations process with respect to steel enterprises. 
 f. The report refers to the fact that sin ce June 2004, iron and steel manufacturers have 
been classified by the Government of China in to three categories: to be eliminated, to 
be restricted, and to be encouraged.  Please indicate on what criteria these classifications are based. Please indicate wh ich facilities fall into these categories. 
 
4. The report indicates in paragraph 86 of Part IV that the use of domestic produced equipment 
and technology is encouraged by the Steel Policy an d that the government provides assistance to steel 
firms that use newly developed domestic equipment and to exporte rs of steelmaking equipment. 
Chinese authorities say no specific measures have been  adopted to implement this policy; the policy 
however remains in place.  
 
 a. Please detail how China facilitates the a doption of domestically produced equipment 
in the steel sector and explain how this aspect of the steel policy is affected. 
 5. The report in several places refers to impo rt duties, export taxes and quotas, import and export 
licenses, and VAT rebates on steel products. 
  a. Please explain the current import and export measures for steel and their purposes.  b. Please indicate the reasons and rationa les for changes that were made in product 
coverage of these measures since 2006.  WT/TPR/M/199/Add.1 
 Page 95 
 
 
   c. Can the Chinese authorities comment on r ecent allegations that export measures are 
being used by China to influence, if not ensure, the export of higher value steel products? 
 6. Please identify and explain all quotas, duties, tax es or other restrictions imposed by China on 
exports of steelmaking raw material inputs to st eel production since 2005. In addition, specifically 
with regard to export quotas, please explain China's justification for maintaining them in light of China's obligations under Article XI of the General Agreement on Tariffs and Trade 1994.  
 7. Are there any internal restrictions on the sal es and distribution of steel or steelmaking raw 
materials within China? If so, please describe them. 
 8. China continues to restrict foreign investment in the steel sector as detailed in the Steel Policy 
of 2005.   
 a. Please explain the basis for this restriction.  
 b. Please detail why some proposed steel inv estments by foreign steel enterprises have 
been approved by the NDRC and others have been rejected since 2006. 
 9. The report indicates in paragraph 84 of Part  IV that the Chinese Iron and Steel Industry 
Association (CISA) functions as a bridge between  its members and the Government of China. 
 
 a. Please explain what portion of China's steel production is accounted for by CISA 
members and what proportion of CISA members are SOEs.  
 b. What role has CISA played in negotiations for iron ore price contracts in the past 
two years?  
 c. What role has CISA played in developing the NDRC list of steelmaking facilities to 
be closed?  
 d. Please explain why only enterprises with  a production capacity of one million tons 
are eligible to be part of CISA? Also, please confirm that enterprises with foreign investment can join CISA if they are otherwise eligible and wish to do so. 
 
10. Please describe the steps taken by the Chin ese Government to improve the environmental 
performance of the Chinese steel industry, includ ing plans or efforts to reduce greenhouse gas 
emissions.  
CANADA – ADDITION
 
 
Report by the Secretariat (WT/TPR/S/199)  III. TRADE POLICIES AND PRACTICES BY MEASURE (2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(iii) Tariffs 
 
Pages 48-50, paragraphs 19, 21, and 22 
 
Canada notes in the report that China’s applied MF N tariff has 65 different ad valorem rates, ranging 
from 0% to 65%, and that there has been no overall reduction in the simple average applied MFN duty 
rate between 2005 and 2007. 
 1. Can China explain if it has plans to reduce th e number of different ad valorem rates, and to 
reduce the top rates, particularly those on agricu ltural products, where the simple average applied 
MFN duty rate is 15.3%? WT/TPR/M/199/Add.1 
Page 96  
 
  (a) MFN tariff rates 
Applied tariff rates  Page 48, paragraph 21  
 
Paragraph 21 states that "interim " applied MFN tariffs may be intr oduced or amended by the Tariff 
Commission whenever it considers it necessary for a sp ecified period, and that the interim tariff rates 
are usually lower than the standard applied MF N rates. Additionally, in China’s WTO Accession 
Agreement Annex 8, Schedule CLII, Part I, Section 1-A Tariffs, Paragraph 2 (b) it states that "China 
undertakes in principle to apply its tariff, both bo und and applied rates, as well as other duties and 
charges, in such a way as to not cause distorti ons in the terms of competition between substitute 
products or competing suppliers. In  this regard, there was particular interest in ensuring fair 
competition between rape (canola) seeds and soybean s, rape (canola) oil and soybean oil […]" 
 2. How does China intend to ensure the applicati on of an "interim MFN" tariff for a product is 
done in a way that is consistent with the spirit of  its WTO Accession undertakings in regards to not 
causing distortions in the terms of competition be tween substitute products or competing suppliers, 
particularly between substitute oilseeds? 
 
Page 55, paragraph 34  
Canada is pleased to note in the report that China has extended, unilaterally, special preference tariffs 
to 37 least developed countries, and Canada congrat ulates China on this.  Canada notes, however, that 
a number of UN-designated least developed countries are not included in China’s special preference tariffs.   
3. Canada would like to ask if China plans to ex tend these special preference tariffs to the other 
12 least developed countries?  In particular, Cana da would like to know if China is considering 
extending these special preference tariffs to Afghanistan?  
(vi) State trading 
 
Page 59, paragraph 53  
Canada notes in the report that, under the terms of  China WTO accession Protocol, annual reviews of 
the growth in volume of trade in processed oil (p etroleum) traded by Ch ina’s non-state-trading 
enterprises were to be conducted with interested Me mbers, but that no such reviews have taken place. 
 
4. Canada would like to ask China when it expects to begin these annual reviews? 
 
(viii) Standards and other technical requirements 
 Page 63, paragraphs 68 and 69  
 
The examples given in the Trade Policy Review  refer to consumer and industrial electronic 
components.   5. Could China please identify the steps it has take n and is taking to ali gn its national standards 
with international sta ndards for food products? 
  WT/TPR/M/199/Add.1 
 Page 97 
 
 
  (b) Sanitary and phytosanitary measures (SPS) 
 Page 67, paragraph 85 
 
The Secretariat Report notes that "MOFCOM is in charge of submitting notifications regarding SPS 
measures to the WTO, and the AQSIQ is the Enquiry  Point under paragraph 3 of Annex B of the SPS 
Agreement."  6. Could China provide further explanation on the current process, including applicable 
interagency /inter-ministerial co llaboration, to review SPS measures to determine those to notify to 
the WTO?  
7. Could China provide the mechanism, includi ng applicable interagency / inter-ministerial 
collaboration, for the preparation of China's SPS notifications? 
8. Canada appreciates that China is in the pro cess of updating its legislative framework for food 
safety. Will measures under the proposed new food saf ety legislation now under consultation be based 
on international standards and guidelines? 
 
(3) M
EASURES DIRECTLY AFFECTING EXPORTS  
(ii) Export taxes Page 74, paragraph 112  
(iii) Tax rebates on exports 
Page 75, paragraph 116 
 
Canada notes in the report that China, in an effo rt to reduce energy consumption and protect the 
environment, levies interim export duties on 334 tariff lines, all dealing with goods deemed 
administratively to be particularly energy intens ive or environmentally damaging.  These measures 
apply only to exports of these goods, not to their sales  domestically.  While Canada applauds China’s 
environmental efforts, using administrative efforts such as export tariffs rather than market forces is 
inefficient and leads to further waste and inefficien cy in resource allocation.  The measures taken also 
tend to lower the cost of these energy-intensive products on the Chinese domestic market, thereby 
encouraging wasteful use of them. 
 
9. Can China indicate whether it is planning to move towards implementing an environmental 
regime of pollution taxes and market prices for ener gy that will allow price signals to guide Chinese 
industry to lower energy use and ensure the most efficient use of resources?  Such a market-driven 
regime would make administrative meas ures such as export tariffs unnecessary. 
 
Canada notes in the report that China levies interi m export duties on grain, rice, maize and soybeans, 
in an effort to reduce the domestic inflation ra te. These actions lower the domestic price of these 
staple foods, thereby reducing the incentive for Ch inese farmers to produce more of these foods to 
meet growing demand in China and other countries.   
10. Can China indicate whether it is planning to move towards eliminating these interim export 
duties? Such action would help to allevi ate the current global food prices crisis. 
 
(v) Export prohibitions, restrictions and licensing 
Page 77, paragraph 124 
 
Canada notes in the report that as of January 1, 200 8, China has not only maintained but has expanded 
its global export quota system to cover not only rice,  maize, wheat, cotton and coal but also flours of WT/TPR/M/199/Add.1 
Page 98  
 
  some grain products. These actions tend to reduce th e domestic price of these products, distorting the 
market mechanism, and discouraging additional production of these agricultural products. Under 
Article XI of the GATT, WTO members are discour aged from maintaining export quotas, except in 
cases of critical shortages or for the application of st andards or regulations. No critical shortage of the 
covered foodstuffs appears to exist in China, and no new standards or regulations have been 
promulgated. 
 11. China indicate when it will move to eliminate these global export quotas?  
IV. TRADE POLICIES BY SECTOR 
(1) A
GRICULTURE  
(iii) Policy instruments (b) Internal measures, support to agriculture Page 117, paragraph 36  
 Paragraph 36 states that direct subsidies for grai n producers are being applied in different ways in 
different provinces. This would seem to make it a cha llenge to properly report such support in China’s 
anticipated domestic support notifications.   12. What steps is China taking now in order to have at hand the information needed to notify the 
direct subsidies for grain producers in accordance wi th the rules of the Agre ement on Agriculture and 
the requirement and formats of document G/AG /2 ("Notification Requirements and Formats"; 
30 June 1995)?  
Report by the Government (WT/TPR/G/199) 
 
III. DOMESTIC
 POLICY  DEVELOPMENT  AND  REFORM 
(C) E STABLISHMENT OF THE SOCIAL SECURITY SYSTEM  
Page 9, paragraph 30 
Paragraph 30 notes that the Ministry of Labor and So cial Security (MOLSS) would be restructured as 
the Ministry of Human Resources and Social Security in 2008. 
1. Does China expect that the new Ministry w ill have the same mandate as MOLSS with respect 
to the approval of foreign and domestic compan ies to provide enterprise annuities services? If so, 
could China indicate whether the application and licensing processes for the provision of enterprise 
annuities services have been streamlined since its last  trade policy review?  If that is the case, could 
China explain what changes have been made, incl uding any revisions to processes maintained by the 
functional regulators (CBRC, CSRC, and CIRC)? 
III. DOMESTIC POLICY DEVELOPMENT AND REFORM 
(G) P ROTECTION OF INTELLECTUAL PROPERTY RIGHTS  
Page 12, paragraph 48 
According to the Chinese Government’s Report, "D uring the past two years, China has enacted a 
number of rules and regulations, further improving the legal system for IPR protection." The same 
paragraph (para. 48) goes on to lis t various regulations and decisions  promulgated by State Council, 
the Supreme People’s Court, and other Chinese Government agencies. Canada appreciates China’s 
efforts to improve its legal system for IPR prot ection. Canada also notes that the aforementioned 
regulations are specific to copyright issues over co mputer network and counterfeiting and piracy of 
audio-visual products.  WT/TPR/M/199/Add.1 
 Page 99 
 
 
  2. Canada would be interested to learn whethe r regulations affecting information products such 
as software applications and source codes were also promulgated during the two year period. 
Page 12, paragraph 50 
The Chinese Government Report notes at paragra ph 50, "In order to furt her strengthen the law 
enforcement of IPR protection, various Chinese la w enforcement agencies and authorities carried out 
in the past 2 years a series of special nationwide campaigns to crackdown on all kinds of infringement 
activities." Canada notes China’s efforts to stre ngthen the enforcement of IPR protection.   
3. Canada would be interested for details regarding the outcome of the campaigns (i.e. number 
of campaigns, charges laid, convictions, type of infringement, category of goods, etc.). 
Page 13, paragraph 51 
At paragraph 51 of the Government Report, Chin a reports the following, "The Chinese Government 
adopted various means to extend education and trai ning programmes to enhance the public awareness 
on IPR protection.  Every year, activities of various forms are organized, such as IPR Week to commemorate the "World Intellectual Property Day (April 26)".  Special training courses on IPR have been conducted by the Chinese Government tailored fo r senior officials including ministers, director-
generals and provincial and muni cipal governors, as well as law enforcement officials and judicial 
personnel.  Meanwhile, the Central Government has also set up 32 IPR education and research 
institutions and has incorporated IPR courses in to primary and secondary school curricula."   
4. Canada encourages China to continue effort s to raise public awareness on IPR protection.  
Canada would also ask if China could elaborate on the location, jurisdiction and mandate of the 
32 IPR education and research institutions and pr ovide details on the IPR related educational 
cirricula? 
IV. TRADE POLICY DEVELOPMENTS 
(A) T
RADE EXPANSION AND PROBLEMS CONFRONTED  
(i) Rapid growth of merchandise trade Page 14, paragraph 61 
China outlines the results of a survey conducted by  the Ministry of Commerce, which suggests that 
China has suffered major financial losses in comply ing with foreign regulatory requirements. Among 
the various costs cited are lost trading opportu nities amounting to US$143.7 billion representing some 
15 % of total exports.   
5. Could China provide further information on the survey, including how the data were collected 
and quantified?  
(D) T
RADE FACILITATION MEASURES  
Page 16, paragraph 77 
At paragraph 77 of the Government Report, Chin a reports the following, "To further improve the 
national standardization system, the Chinese Govern ment has committed to reforming the relevant 
working mechanism, keeping existing standards and technical regulations up to date, encouraging 
enterprises to participate more actively in the de velopment and revision of standards and technical 
regulations" 
6. Could China elaborate on the specific measures that will be used to review and update 
technical regulations?  How will enterprises be enc ouraged to participate mo re actively in these and WT/TPR/M/199/Add.1 
Page 100  
 
  other regulatory processes?  Which governmental  body/organization(s) w ill be responsible for 
overseeing this process? 
Page 16, paragraph 78 
At paragraph 78 of the Government Report, China reports the following, "Certification and 
Accreditation. The Chinese Government has establi shed a unified and standard certification and 
accreditation system which applied equally to domes tic and foreign enterprises, and has effectively 
implemented the compulsory certification system, thus virtually eliminating the double authentication existed prior to China’s accession to the WTO. With  a view to reducing obstacles to and facilitating 
the conduct of international trade, the Chinese Govern ment has always been actively participating in 
the activities of international and regional certifi cation and accreditation organizations, and has been 
actively carrying out international mutual  recognition of product certification." 
Canada understands that telecommunications pr oducts in China must meet two certification 
requirements before they can be deployed in th e Chinese market: a type approval issued by the 
Ministry of Information Industry (MII), known as the Network Access License (NAL), together with a separate approval under China’s Compulsory Prod uct Certification Scheme, also known as the CCC 
Mark. 
7. China notes that the government has establishe d a unified and standard certification and 
accreditation system.  Could China clarify whet her this is the case for telecommunications 
equipment?  Could China explain whether the requirements for the two marks ((NAL and CCC) 
previously required for telecommunications equi pment has changed?  If so, how have the 
requirements for telecommunications equipment have changed?  
8. Could China indicate what plans it has to facilita te the recognition of foreign certification labs 
to ensure that speed to market will not be co mpromised for telecom/IT product suppliers if the 
Security Certification regime is to come into effect in May 2009? 
(E) C
HINA AND THE MULTILATERAL TRADING SYSTEM REPRESENTED BY WTO 
(i) Fulfillment of the WTO Accession Commitments 
Page 18, paragraphs 82 and 83  
According to the Report, trade-related laws  and regulations are made public in the China Foreign 
Economic and Trade Gazette.  
9. To what extent are the rules and regulation listed in paragraph 82, which aim at further 
opening up China's service sectors, made available in the Gazette?  Are there other sources that make 
the rules and regulations publicly available?  
(F) C HINA AND REGIONAL TRADE ARRANGEMENTS  
(i) China's Participation in Regional Trade Arrangements Pages 19 and 20, paragraphs 95-99  
The Report cites the various bilateral and regional tr ade free trade agreements that China currently has 
underway.  
10. Please advise if the FTAs under negotiation w ith the Gulf Cooperation Council, Australia, 
Singapore, Iceland, and Peru incl ude commitments regarding services.  WT/TPR/M/199/Add.1 
 Page 101 
 
 
  CANADA – FOLLOW-UP  
Report by the Secretariat (WT/TPR/S/199) III. TRADE POLICIES AND PRACTICES BY MEASURE 
(3) M
EASURES DIRECTLY AFFECTING EXPORTS  
(ii) Export taxes 
Pages 207-208 of China’s Replies, Japan Question 14 
1. Several of China's answers, including "Canad a Question: 54", clearly state the 2007 absolute 
production figures on coal-based power, including the re duction of coal mines and reduction in coal-
based power plant output.  Canada would be inte rested to know what the net figures are on coal 
production and capacity in China as a whole (as opposed  to how much capacity has been shut down).  
How does this net figure relate to the reduced le vel of domestic production an d consumption which is 
needed to justify reduced exports of energy intensive and polluting goods?  
IV. TRADE POLICIES BY SECTOR 
(5) S ERVICES  
(x) Tourism 
Pages 282-283 of China's replies 2. We understand that China is now worki ng on the amendment of the Regulation on the 
Administration of Travel Agencies.  When will the new Regulation on the Administration of Travel Agencies be made available, and from where w ill Members be able to access the new regulation 
CHILE
 
Antidumping 
• En el párrafo 56 se indica que la información "clasificada" no se notifica a las Partes 
interesadas. ¿Se requiere entonces un resumen público de dicha información, como lo señala el artículo 6.5.1 del Acuerdo Relativo a la Aplicación del Artículo VI del GATT 94? 
• En el párrafo 57 se señala que "en ci rcunstancias especiales" las medidas 
provisionales podrán prorrogarse hasta 9 meses. ¿Se hace explícito que para que ello ocurra, debe ser a petición del exportador y cuando la autoridad aplica un derecho 
inferior al margen de dumpi ng? Artículo 7.4 del Acuerdo). 
Política de competencia 
• Tal como lo dice el Informe, la ley está siendo modificada, por lo que aparece 
prematuro hacer comentarios. No obstante lo anterior, ¿se contempla la unificación de las leyes/reglamentos y autoridades compet entes en una Autoridad Central que tenga 
potestad sobre todos los sectores y regiones? ¿Se contempla incorporar la totalidad de 
las empresas estatales a la ley de Compet encia y Antimonopolios? ¿Existe un vínculo 
formal entre la ley/autoridades de Política Competencia y de Protección a los consumidores? WT/TPR/M/199/Add.1 
Page 102  
 
  Sección energía   
• Respecto del párrafo 45; ¿Cuando se espera que esté lista esta propuesta de 
legislación? ¿China se ha planteado una f echa límite para tener e implementar la 
legislación a crear? ¿Se tiene idea de cómo se va a orientar este marco legal, las prioridades y otros?  
Sección telecomunicaciones  
• En relación con el párrafo 221: ¿Cuando esperan tener lista esta propuesta de 
legislación? ¿Hay algún plazo determinado? ¿Q ue criterios se van ha utilizar para la 
redacción e implementación de la ley? ¿Estos criterios estarán basados en sus propias directivas preexistentes (Ej. Nº 291)?  
• Respecto del párrafo 225, el texto señala: "MII está estudiando el modo de definir el 
concepto de "empresa dominante"": ¿Que  definición están considerando utilizar?  
Sección servicios de distribución  
• ¿Porqué China excluye de la distribución el tabaco? ¿ Piensan en algún momento 
levantar esta restricción? 
EUROPEAN COMMUNITIES
 
I. ECONOMIC ENVIRONMENT 
WTO Secretariat's Report, pages 1-4, paras. 2-3 
 Chinese economy is characterized by a number of economic imbalances, several of which are 
interrelated (notably extreme high level of savings , account surplus, environmental problems etc). 
 1.  Could China explain if and which measures are taken or will be taken to redress these 
imbalances, how some have worked out and wh ich further new policy initiatives will be taken? 
 
WTO Secretariat's Report, pages 4-7, paras. 4-7 
 
Chinese government promotes investment in manufact uring, which has grown much faster than 
services and agriculture.  Labour productivity in agricultu re is only one-fifth of that in the rest in the 
economy.  
 
2. Could China provide information on whether enha nced investment in agriculture (through 
technology, know-how) is a realistic option in enhancing its agricultura l output this in view of rising 
food prices and related inflationary tendencies?  (iii) Financial sector reform WTO Secretariat's Report, page 14, para. 25  
The Report states that bank loans account 82% of  total financing from the financial sector. 
 3.  What is the percentage of credit return, or the in debt percentage of non-performing loans? 
 
4. What types of enterprises are in debt with ba nks? What is the percentage of being in debt 
according to different types of enterprises (SOE, private, FIE)?  WT/TPR/M/199/Add.1 
 Page 103 
 
 
  (5) T RADE AGREEMENTS AND ARRANGEMENTS  
WTO Secretariat, pages 34-35, para. 48  
Regarding ACFTA, Chinese authorities indicate that si nce the tariff reduction began, there has been a 
boom in imports and exports between China a nd ASEAN, and a narrowing trade imbalance. 
5. Could China provide figures for this increase in  imports and exports under the framework of 
ACFTA? 
 
6. Could China describe the current level of liberalization under ACFTA, in both imports and 
tariff lines? Has China made any modification to its sensitive list and high-sensitive list of products 
under ACFTA? If so, which? 
 
WTO Secretariat's report, page 35, para. 53  
7. Could China elaborate on the objectives of  its regional and bilateral trade policy? 
 
8. How many FTAs is China currently negotiating,  and when are they e nvisaged to enter into 
force?  Could China confirm whether it aims at c oncluding comprehensive FTAs with all partners?  
 
The EC notes that China has concluded a significant number of partial scope agreements. 
 
9. Could China elaborate on the rationale behind maintaining these partial scope agreements?   
10. Does China agree with the assumption that fully-fledged and comprehensive FTAs are a 
preferable option in terms of ec onomic gains and trade liberalisati on benefits rather than limited 
shallow preferential trade agreements?  
WTO Secretariat's report, page 37, para. 59 
 
China-Pakistan FTA entered into force on 1 January  2006.  The Report indicates that "bilateral tariffs 
on certain products were to be elim inated gradually by 1 January 2008". 
 11. Could China specify the coverage and scope of the Agreement, in both tariff lines and trade 
value figures? Over how many years w ill this Agreement be implemented? 
 
12. Are liberalization commitments symmetric for both Parties? 
 
13. When does China plan to notif y this Agreement to the WTO? 
 WTO Secretariat's report, page 37, paras 60-61  
The Report indicates that China is currently  negotiating an FTA with Australia.  
 14. In light of the several rounds of negotiations already held, could China spell out main objectives pursued under the FTA with Australia?  
 
China recently signed an FTAs with New Zealand.   15. Could China specify the coverage and scope of the Agreement, in both tariff lines and trade 
value figures? Over how many years will this Agreement be implemented  
 
16. Are liberalization commitments symmetric for both Parties? WT/TPR/M/199/Add.1 
Page 104  
 
  WTO Secretariat's report, page 37, para. 62 
 
17. Could China confirm whether it aims at ne gotiating an ambitious and comprehensive FTA 
with the GCC? If so, what is the e nvisaged scope of this Agreement? 
 WTO Secretaria's report, page 38, para. 68  
The Secretariat's report states that "as of March 2008,  unilateral preferential tariffs on certain products 
were offered to 39 least developed countries".  
18. Could China furnish further information re garding the scope and application of these 
unilateral preferential tariffs?  
 
19. How many tariff lines are covered under those preferences, and for how many years? 
 
20. How many countries have been granted DFQF treatment? Does this DFQF treatment cover all 
bilateral trade? 
 
21. Do countries need to comply with any partic ular requirement in order to be granted those 
preferences?   III. TRADE POLICIES AND PRACTICES BY MEASURE  (2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(ii) Customs valuations and rules of origin (a) Customs valuation  WTO Secretariat’s Report, page 46, para. 14 
The Report outlines that the Rules Regarding Dete rmination of Customs Value of Imported and 
Exported Goods is the legal basis fo r customs valuation in China.   
22. What policies is China following or will follo w in order to ensure uniformity in customs 
decisions across the country in relation to customs va luation, training of custom officials, disclosing 
internal procedures to companies, r espect of schedules and written queries? 
(iv) Indirect taxes affecting imports 
WTO Secretariat’s Report, page 56, para. 40 
The Report states that agricultural products sold by  farmers directly to consumers are exempt from 
VAT, while imports of like products are subject to VAT. 
23. Could China provide information whether and when will China eliminate this discriminatory 
treatment? 
(vi) State trading 
WTO Secretariat’s Report, page 59, paras 51-53 
According to the Secretariat's report, "since its previous Review, while China has not made any 
notification to the WTO regarding its state trading activities, the number of products subject to state 
trading has apparently  been reduced. The Repor t also indicates that "MOFCOM issues and adjusts 
annually the lists of goods subject to state trading and of authorized state trading enterprises".  
24. Which are the criteria used to adjust th e list of goods subject to state trading?   WT/TPR/M/199/Add.1 
 Page 105 
 
 
  (vii) Contingency measures 
(a) Antidumping and countervailing measures WTO Secretariat’s Report, page 61, para. 61 
According to the Report, from 1 January 2005 un til end December 2006 China initiated a total of 
35 AD investigations 24 of which in the year 200 5 and 11 in the year 2006. As at 30 June 2007, 
among the 24 investigations initiated in 2005, fi nal measures had been adopted in 13 cases; and 
among the 11 investigations initiate d in 2006, final measures had been adopted in 3 cases. We urge 
China to note that initiating an AD investigation can have a significant impact (the so-called ‘trade-
chilling’ effect) on both the product and the compan y under investigation. In this respect we 
encourage China to be more cautious in initia ting investigations and to do so only if the AD 
authorities have thoroughly examined the evidence.  
 25. Could China please indicate how many among th e 11 investigations in itiated in 2006 have 
been terminated as yet? 
 
(viii) Standards and other technical requirements 
(a) Standards, certification, accreditation WTO Secretariat’s Report, page 63, para. 66 
26. On what conditions are non-domestic stakehol ders active or established in China invited to 
give comments on proposals that may aff ect their trade with or in China?  
27. At what stage are non-domestic stakeholders invited to give comments on proposals that may 
effect their operation with, or in, China? 
The Standard Administration of China (under AQSIQ) issued an update of its rules applicable for 
Technical Committees responsible for the promulgati on of National Standards in China: The updated 
regulation was published on the SAC website Jan 28, 2008 and includes following new sentence: 
"Regarding market opening, it is allowed that fo reign enterprises participate in the activities of 
Technical Committees as observer , the details will be decided by re levant agency and organization ". 
 "Observer" status means that this entity has no active voting rights in this Technical Committee. 
However, it remains unclear what defines a "foreign enterprise". As per experience, the term "foreign" 
addresses ownership and management a nd not the legal seat of the entity. 
 
In the EC's view, this new rule seems not to be fully compatible with the principle of "National 
Treatment". It is a reversal of the previous prin ciple where it was up to the Technical Committee (TC) 
to set up rules of participation and to decide how to deal with the participation of foreign owned 
enterprises. In most TC's full partic ipation for foreigners was possible. 
28. Could China comment and expl ain this recent modification? 
 
WTO Secretariat’s Report, page 63, para. 67 
If we interpret table III.4 correctly, since year 200 2 the ratio of standards based on international 
standards has increased from 44.2 to 46.4 in 20 06 (about 0.5/year) (see Table III.4). The authorities 
state that they aim to align 85% by 2010.  
29. Could China confirm whether the figure of 85% alignment in 2010 is achievable and remains 
a firm objective?  WT/TPR/M/199/Add.1 
Page 106  
 
  30. In the report of 2006 it was said that the total number of national standards would be reduced 
by 23%. From table III.4 we can see that on the contrary the number of national standards is 
increasing again. Could China explain this contradiction, if any? 
The EC has seen on several occasions that Chin a has adopted standards based on international 
standards but with some differences that create diffi culties for importers in complying. We would like 
to recall that China should make such changes onl y when they are essential to fulfil a legitimate 
objective. There are also cases where China has adopte d international standard but the basis of an out-
dated version of the international standard.  
31. Could China explain why such cases occur and what China intends to do to remedy this? 
32. Could China provide updated information re garding which standards will be aligned with 
international standards? 
33. Could China confirm if products in the ICT sector are included in the exercise of aligning 
national standards with the respective intern ational standards and give details on this? 
The EC has seen on several occasions that China h as integrated European (EN) standards in the 
Chinese standardization system with some differen ces that may create difficulties for importers in 
complying. It is difficult to identify the link betw een Chinese and European st andards since they are 
not always properly referenced and the modifications are not listed. 
34. Could China explain how the adoption of  EN standards is regulated in China? 
35. Could China provide updated information regarding which Chinese standards are aligned with 
which EN standards? 
WTO Secretariat’s Report, page 64, para. 70 
In addition to national standards there are sectoral, local and enterprise standards. These can be either 
voluntary or mandatory. The EC is aware that on sev eral occasions a voluntary standard can become 
de facto mandatory by a mandatory conformity procedure before placing a good on the market.  
36. Could China in detail explain how the Chinese notifying authority ensure that the 
transparency obligations laid down in the TBT agreement are comprehensively respected, covering 
proposed technical regulations and conformity ass essment procedures elaborated by the different 
government agencies?  
37. Could China confirm whether in some c ases Chinese National Standards or Chinese Industry 
Standards, which are declared as "voluntary", can be made de facto mandatory through compulsory 
certification or licensing procedures? 
38. How is the notification procedure laid dow n in the TBT Agreement complied with in these 
cases? 
WTO Secretariat’s Report, page 65, para. 73 
Paragraph 73 of the Secretariat's report indicates that "Enforcement of standards needs to be 
improved, particularly when this also involves IPR infringement. As technical regulations are not 
followed, counterfeit products, linked with inferior quality, could have a significant negative effect on 
the health of human, animals and plants, and the environment."  WT/TPR/M/199/Add.1 
 Page 107 
 
 
  The EC would like to register its disagreement with  the phrasing of this paragraph. The EC considers 
that the incentive to develop new products and processes on which to b ase future standardisation will 
be lost if the standard-making process is carried out without due regard for IPR. When standards 
contain any IPR, they can be used by market operators on fair, reasonable and non-discriminatory 
conditions. As regards counterfeit pr oducts the issue at stake is not the enforcement of the standard 
but rather the surveillance of the market. 
 
WTO Secretariat’s Report, page 66, para. 77 
The EC has on many occasions and in many fo ra raised concerns about the CCC system.  
39. Are there any plans to reduce the number of products which falls under the CCC system? 
China should treat products differently depending on a risk assessment. Less strict procedures should 
be applied for products which are of low risk to the consumers. 
40. In this regard, are there any plans in China to introduce a simpler procedure for declaration of 
conformity e.g. Supplier Declaration of Conformity? 
The EC is concerned that China requires, for importe d cosmetics, a registration with the Ministry of 
Health while domestic products ar e subject to a simpler regime. 
41. Is China currently looking at simplifying and harmonising the importation of cosmetic 
products?  
For Active Pharmaceutical Ingredients (API), testi ng and standards are more stringent and costly for 
imported goods compared to domestic products. In the EC's view, this is a discriminatory procedure. 
42. Could China indicate when it does intend to apply the same rules to both imported and locally 
produced Active pharmaceutical ingredients? 
Medicinal products registration timelines are extr emely long for innovative drugs produced outside 
China.  For example, it typically takes 6 to 12 months  to obtain clinical trial approval in China, as 
clinical trial approval can usually be obtaine d within 3 months in other major markets. 
 
43. Does China have any plans to reduce medicinal products registration timelines? 
There is a lack of transparency and recogniti on of innovation in Chinese Drug pricing policies and 
rules. For example, in China, the price of the orig inator medicine ties to the cost-basis of its generic 
version plus a small premium.  This approach is c ontrary to international practices where the price of 
generics is linked to the originator medicine.  In addition, the National Reimbursement Drug List 
(NRDL) is not updated annually and therefore,  most innovative products are not included. 
 44. Does China inform whether it plans to regul arly up-date the NDRL and whether it plans to 
transparently recognize innovation in drug pricing policy? 
 The EC remains concerned about the high costs of registration of toxic chemicals. The EC 
understands that China was contemplating the idea of revising the regulati on of import and export 
registration of dangerous chemicals and/or introducing a deposit system, as already in place in other 
countries. 
 
45. Could China inform on the status of a potential registration legislation review and introduction of a risk-based deposit and accountability  insurance systems as well as on the related WT/TPR/M/199/Add.1 
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  consultation process of foreign authorities and indus try, and clarify on when registration fees will be 
brought in line with levels co mmonly applied internationally? 
 The EC remains highly concerned about redundanci es in registration processes regarding medical 
devices. Two types of mandatory registration with the same scope of requirements are required from 
SFDA and AQSIQ offering no additional safety be nefit for patients and users. Additionally 
registration validities are limited in time and do not correspond between both requirements.  
 46. Could China inform on whether the redundancies above will be abolished,  which would be in 
line with Global Harmonisation Task Force ( GHTF) guidelines, and inform on how Decree 276 
possibly contributes to resolving this problematic issue? 
 47. Could China inform on when Decree 276 will be notified to the WTO TBT Committee, 
considering it contains significant t echnical regulation affecting trade?  
 
The Chinese authorities contemplated a regulatory fra mework for refurbished medical devices which 
would allow placing them on the Chinese market  under the same conditions required for new 
products. Such ban on refurbished pr oducts is not justified according to the EU as in refurbished 
medical devices are subject to the same requirements as new medical devices. 
48. Could china inform on the status of im plementing a new framework and on when it is 
expected to enter into force? 
WTO Secretariat’s Report, page 66, para. 78 
It is stated that the exemption of CCC does not mean exemption from import inspection.  
 49. Could China explain what such import inspection entails? 
 
50. Could China also explain what procedure a pplies when products or components are imported 
together with another product in which they should be incorporated ?  
WTO Secretariat’s Report, page 66, para. 79 
51. Could China explain what means "wholly fo reign-invested" and foreign-invested joint-
ventures?   
 
52. Could China confirm whether foreign-owned certification bodies and laboratories established 
in China can undertake certification, tes ting and inspection work under the CCC? 
 
53. Could China indicate whether foreign-based certification bodies may be accepted to 
undertake testing work or inspection on behalf of Chinese certification bodies? 
 
(b) Sanitary and phytosanitary measures  
WTO Secretariat’s Report, page 67, para. 85 
The Report outlines China's current legislation relate d to its SPS regime but there is no indication on 
which body is in charge of issuing those acts.  
 
54. Is it AQSIQ or the Ministry of Health? If both, on which basis it is decided who takes the lead?   WT/TPR/M/199/Add.1 
 Page 109 
 
 
  WTO Secretariat’s Report, page 68, para. 88 
55. With regard to the duration of the validity of  the import permit, the EC would like to know if 
after six months, the renewal is automatic or if the importer has to undergo again the full issuing 
procedure. If the latter, while understanding the in terest of the Chinese authorities to protect the 
consumers, in our opinion this complicate procedur e could block the trade flow. Could China indicate 
whether it is possible or already foreseen for the im porter to continue working during the process of 
renewal of the permit? 
 The EC would like to note that clarifications of similar nature have been already requested through 
EC comments provided to notification G/SPS/N/CH N/104 of 10 January 2008 on "Administrative 
measures on supervision, inspection and quarantine for import an d export food. Establishment of the 
rules and requirements regarding inspection and quarantine measures for import and export food". The 
EC expects that China will be able to provide r esponses to EC concerns by using the appropriate 
WTO channels.  
WTO Secretariat's Report, page 67, para. 86 
The Report states that China's quarantine system ha s remained largely unchanged during the review 
period. 
56. Does China consider extending the already existing protocols for one country to other 
countries with similar sanitary conditions? 
57. Does China consider entitling National Authoriti es to approve the lists of companies allowed 
to export to China? 
58. Will China take measures to eliminate the duplicity of measures for one same purpose on the 
Protocols? 
(c) Labelling 
WTO Secretariat’s Report, page 69, paras 93-96 
As regards labelling, the EC has on several oc casions raised concern with Chinese labelling 
requirement, in various sectors, about lengthy registration procedures and frequent changes in 
requirements.  
59. Does China have any current or upcoming work  to assess its labelling requirements, with the 
aim of streamlining procedures and simplifying requirements?  
(3) M
EASURES DIRECTLY AFFECTING EXPORTS  
WTO Secretariat's report, page 74, para. 112 
 
The Report states that although the main objective of  some export taxes is the improvement of the 
environment by reducing exports of products considered to be highly energy consuming or polluting, 
such taxes tend to increase the domestic supply of the products concerned.  
60. Has the extraction of raw materials and prod uction of goods subject to export taxes on the 
grounds of environmental or energy consump tion concerns been reduced in China?   
61. Are domestic prices of such products be low international ones? If so, do lower prices 
stimulate demand and therefore lead to furthe r environmental and ener gy-related problems?  WT/TPR/M/199/Add.1 
Page 110  
 
  62. Has the government taken accompanying measures to tackle the environmental or energy-
related concerns specific to these products apar t from adopting and applying export taxes?  
WTO Secretariat's report, page 76, para. 122 
 
China currently applies export quotas on silk, bauxite, light (dead) burned magnesium, talc lump (powder), fluorspar lump (powder), rare earth, co al, coke, crude oil, processed oil, paraffin wax, 
tungsten, indium, molybdenum, silicon carbide, sawn ti mber, silver, platinum, zinc and zinc alloy, tin 
and tin alloy, antimony. Export quotas are genera lly prohibited under Article XI of the General 
Agreement on Tariffs and Trade 1994.  
 
In addition, China applies export tariffs to more than  334 tariff lines (at 8 digit level). Section 11.3 of 
Part I of China's Protocol of Accession clearly sets out a commitment incumbent upon China not to 
impose export tariffs on any goods not appearing on th e list of goods subject to export duty in Annex 
6 of its Protocol of Accession. Annex 6 only lists  a total of 84 products at 8 digit level.   
 
63. For each of the tariff lines on which export quotas are applied, please indicate the legal basis 
and possible justification for such quotas. 
 
64. For each of the tariff lines not listed in  Annex 6, please indicate how China consider
s this to 
be compatible with its WTO commitments. 
 
(viii) Export promotion and marketing assistance 
(b) Export finance and insurance 
 
WTO Secretariat's report, page 80, paras 139-141 
 
The products offered from China Eximbank (CE) are described in the same terms as that of other 
large Export Credit Institutions. However, there is no t clear information in its website regarding the 
terms CE accepts.   
 65. Could China explain the rules for individual products and buyer countries regarding credit 
length – apart from the commonly applied 15-year ma ximum period? Do these rules fully follow the 
(OECD) Arrangement's rules or are there any deviations? 
 
66. Could China furnish Members with the rules on how the interest rates are determined for 
individual currencies / credit terms in relation to market rates?  It is known that the rates for Renminbi (RMB) are determined by People's Bank of China and are set as the upper limit of savings interest rates. However,  the relation of these rates to market rates is not 
clear since they are determined at a political level. 
 67. Could China provide information in this regard and the background for the infrequency of 
updating of the rate(s) for RMB as compared with other currencies?  
The EC understands that other banks can reduce inte rest rates to 0,9 times the benchmark rates.  
 68. Could China provide information regarding wh ich public banks are allowed to do that? When 
is the lower rate offered?  Further to normal interest rates, the EC understa nds that there also exist preferential /concessional 
interest rates which are used in special cases.   
  WT/TPR/M/199/Add.1 
 Page 111 
 
 
  69. Could China explain how the preferential ra tes are determined and in which situations 
preferential rates are offered?  The EC is aware of the fact that rates actually a pplied are often lower than the PBC benchmark rates. 
This is the case for technology products, high tech nology products, and ships. As to the latter, rates 
are close to half of the official benchmark rates. Therefore, it can be argued that these rates cannot all 
represent market rates.   70. Could China justify this policy?   
71. Could China provide information regarding how interest rates for foreign currencies are 
determined? Is it always the CIRR, and in that case,  when is the rate lock ed in (before commercial 
contract, at the commercial contract, or at the time of the signature of the loan contract? 
 
72. Could China provide information regarding ho w the credit risk premia is determined in 
particular regarding 1) sovereign risk in different  rating categories, 2) commercial risk in different 
rating categories and 3) for ships?   73. Could China explain what environmental guidelines apply for projects supported by China 
EXIM bank? Do they follow guidelines from the World Bank Group? 
 
74. Could China provide information regard ing to what extent losses on policy banking 
transactions are covered by the Ministry of Fina nce rather than income from risk premia and 
recoveries from earlier transactions?  75. Could China explain how development aid is defined (distinguishing it from commercial 
contracts)? Is there a minimum concessionality level?  Are there special limitations on what kind of 
projects may have development aid financing?  China seems to favour economically viable projects that should be able to attract normal commercial 
finance or export credit rather than reserving aid for the projects that are beneficial for the developing 
country but do not yield an income that allow repayment of a commercial credit. 
 
76. How does China justify such policy? 
 
77. Could China provide information on whet her development aid is sometimes given in 
conjunction with commercial credits in order to fina nce different parts of the same project? Would in 
that case a minimum concessionality level for the whole package always apply? 
78. Could China explain what rules apply in re lation to countries where the IMF has prescribed 
that only concessional lending should be used? 
 
79. Could China provide information regarding how interest rate and risk premia differ between 
China EXIM bank and China Development bank? 
 
80. Could China explain why SINOSURE has a monopoly on export credit insurance which is not part of a direct lending operation? (Other insurers can in principle enter but not get a licence).  
 WT/TPR/M/199/Add.1 
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  (4) M
EASURES AFFECTING PRODUCTION AND TRADE  
(iii) Other industrial policies and measures WTO Secretariat's report, page 90, para. 170   
The Report states that the government aims to ac hieve certain objectives by promoting or reducing 
investment in certain sectors iden tified in the Catalogue of Guidance Regarding Industrial Structural 
Adjustment, issued by the NDRC in December 2005, together with  Major Measures to Promote the 
Adjustment of Industrial Structure. 
 
81. Does China consider that there may be a perceived risk of regulatory uncertainty by 
companies working in Chin a because of shifting particular sector from one category to other?    
 
(iv) State-owned enterprises, privatization, and corporate governance
 
WTO Secretariat's report, page 96, para. 190 
The Report states that despite the reform, con cerns remain over a continued misallocation of 
resources:  although SOEs accounted for some 35% of GDP, their borrowing from domestic banks 
accounted for more than half of total lending by  these banks. Private and foreign firms operating in 
China are able to achieve the same output as SOEs, by using less capital. 
82. What are China's plans for addressing this situation? 
 
WTO Secretariat's report, page 93, para. 180 
 
The Report states that the Government intends to retain state ownership in seven "strategically 
important" sectors, including power generation and distribution, oil and petrochemicals, 
telecommunications, coal, aviation, and shipping, would remain under state control.  
83. Could China provide information on which gro unds it considers a sector to be strategic, in 
particular, taking into account  international experiences? 
 
(v) Competition and consumer protection policy  
WTO Secretariat's report, page 44, para. 8 and page 101, para. 214 
 
The Report states that the implementing details of  the new Anti-Monopoly Law have not yet been 
formulated. 
84. Could China provide information when will the implementing details of the Anti-Monopoly 
Law be adopted and enter into force? 
WTO Secretariat's report, page 100, para. 211 
 
The Report indicates that, under the Anti-Monopoly Law, the Enforcement Authority is to be set up under the State Council and that it remains to be se en how the new Authority will coordinate with 
SAIC, MOFCOM, and the NDRC on the enforcement of the Anti-Monopoly Law. 
85. Could China provide further details on the envisaged coordination between the Anti-
Monopoly Law Enforcement Authority and SAIC , MOFCOM and NDRC in relation with the 
enforcement of the Anti-Monopoly Law? 
  WT/TPR/M/199/Add.1 
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  (vi) Intellectual property rights 
(b) Patents WTO Secretariat's report, page 103, para. 220  
The Report outlines that the Patent Law is curren tly being revised and that the Chinese authorities 
state that the purpose of the revision is to further enhance protection by: improving ‘patent agent’ 
system and the management of patent rights; cl arifying the criteria for granting patents; and 
preventing the abuse of patents. 
86. How do the Chinese authorities intend to improve  ‘patent agent’ system and the management 
of patent rights? 
87. How do the Chinese authorities intend to clar ify the criteria for granting patents?   
 88. How do the Chinese authorities intend to prevent the abuse of patents? Can China specify the 
scope of the concept of "abuse of patents" ? When does China anticipate finalising this 
revision process? 
The Secretariat's report refers to the length of patent  protection (20 years). As it was asked by the EC 
in the previous Trade Policy Review of China in  2006, some specific products  require long additional 
periods for their development in order to obtain ma rketing authorisations. A number of countries have 
decided to compensate for these periods during which the patent cannot be exploited by an additional 
protection mechanism (in the EU: Supplementary Pr otection Certificate for pharmaceutical products). 
89. Does China plan to grant additional protection – in the form of patent term restoration or 
supplementary protection certificates – to produc ts that cannot be marketed before a specific 
authorisation has been given (such as pharmaceutical products)?  As regards the pharmaceutical industry, the EC  notes that under current Chinese legislation, a 
registration would be granted to a company that has not generated the complete regulatory data 
package, to the detriment of the or iginator. Besides, it appears that there is no mechanism in place to 
prevent the registration of a generic drug that would infringe a patent.  
90. Does China have any plans to provide a st rong data protection to innovative drugs producers 
and a greater clarity on the implementation and en forcement of patent protection mechanisms in 
China? For instance, information provided on the SFDA website on generic applications should be 
kept up to date and with sufficient details necessar y for originators to ensu re enforcement of their 
intellectual property rights. 
WTO Secretariat's report, page 103, para. 222 
 
The Report states that the procedures regarding patent  applications and granting of patents have not 
been changed since the previous TPR exercise. Neve rtheless, the number of patent applications has 
increased: in 2006, there were 210,490 applications  for inventions, an increase of 21.4% over the 
previous year (137, 327). In the same year, 57,786 patents of invention were approved, an increase of 
8.4% over the previous year (53,305). 
91. Does China plan to revise the procedures rega rding patent applications and the granting of 
patents in order to assure the ability of the Pa tent Office in processing an increasing number of 
applications? 
 WT/TPR/M/199/Add.1 
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  WTO Secretariat's report, page 104, para. 224 
 
According to the Report, Article 49 of the Patent Law provides that the Government can grant a 
compulsory license in the event of a national emerge ncy, or if "any extraordinary state of affairs 
occurs", or in the "public interest". 
 92. Could China explain the scope of this le gal provision, in particular the concept of 
"extraordinary state of affairs", and assess the comp liance of Article 49 of Patent Law with Article 31 
of the TRIPS Agreement. 
 
WTO Secretariat's report, page 104, para. 225  
The Report states that the Chinese authorities are considering including parallel imports in the 
revision of the Patent Law. 
93. Have the Chinese authorities assessed the pot ential impact parallel imports may have on 
certain products such as pharmaceuticals in terms of  counterfeiting, and thus for health and safety of 
consumers, product recall, lack of quality c ontrol in an extended supply chain, etc.? 
 
(c) Trademarks 
WTO Secretariat's report, page 104, para. 228 
 
The Report states that trademark registration takes approximately 24 months, from submission of the 
application to the first action by the trademark administration. In 2006 the number of trademark applications increased of 15.4% over the previous  year while the number of trademarks approved 
increased of 6.6%. 
 94. Which measures have the Chinese authorities take n - or do they plan to take - to face the 
dramatic increase in trademark applications? 
 
WTO Secretariat's report, pages 104-105, para. 229 
 According to the Report, China uses a "first-to -file" approach to trademark registration. For 
trademarks that have already been used in other co untries, but have not registered in China, provided 
that they are "well-known trademarks", a copy, im itation or translation of that well-known trademark 
cannot be registered and must be prohibited from use. 
 
95. Could China describe the scope of the con cept of "well-known trademark" in the Chinese 
Trademark Law?   96. Could China assess the compliance of Trademar k Law with Paragraphs 2 and 3 of Article 16 
of the TRIPS Agreement? 
 
WTO Secretariat's report, page 105, para. 230 
 According to the Report in 2006 14 ,960 review applications were received by the Trademark Review 
and Adjudication Board, and 4,219 were reviewed (10,144 and 6,305 in 2004). 
 97. Does China plan to adopt measures regardi ng the Trademark Review and Adjudication Board 
in order to enable this body to face the increase in review applications?  WT/TPR/M/199/Add.1 
 Page 115 
 
 
  (d) Copyrights and related rights 
WTO Secretariat's report, page 103, para. 218  
According to the Report China made reservati on on Article 14 of the WIPO Performances and 
Phonograms Treaty (WPPT). The EC is concerned rega rding this reservation. We would like to note 
that broadcasting and public performance rights are in deed crucial to the reco rding industry as sales of 
hard copies are no longer the only form  of revenue for record companies. 
 98. Does China plan to propose amendments to the Copyright Law, where sound recording 
producers should be accorded rights of communica tion to the public including broadcasting and 
public performance rights? If not, can China explai n the reasons for the reluctance to grant these 
rights to sound producers? 
(e) Other IPRs 
WTO Secretariat's report, page 106, para. 237 
 
The Report states that a "non-voluntary" license can be issued to exploit a layout design to remedy 
unfair competition practices. 
 
99. Could China explain what the " unfair competition practices " are, as foreseen in the positive 
legislation, and assess the compliance of this measure with Article 40 of the TRIPS Agreement? 
 
WTO Secretariat's report, page 106, paras 238-239 
 
According to the Report, the State Trademark Office and the AQSIQ are engaged in the management 
of GIs. The EC is aware of the fact that a third GI protection system, managed by the Ministry of Agriculture, would be operational as from 1 Februa ry 2008 specifically for agricultural products. 
 
100. Could China detail the respective competences of the State Trademark Office and the AQSIQ 
with regard to GIs? Could China confirm that a third GI protection system has been set up? If so, 
could China explain the relationship between these thr ee systems? For example, how is an application 
filed before one – or a registration granted by one – of the three entities (AQSIQ, State Trademark 
Office, Ministry of Agriculture) taken into account by the other two? 
 
WTO Secretariat's report, page 106, para. 239 
 
The Report says that the Chinese aut horities have stated that a law on geographical indication is to be 
issued before 2010. 
 
101. Could China elaborate on the scope of prot ection, process of registration, enforcement 
scheme and transfer system from the administrative to the criminal authorities which China plans to 
establish by the means of this new legislation?  
WTO Secretariat's report, page 106, para. 240 
 The Report states that no changes have been made regarding undisclosed information or trade secrets. 
 102. Could China explain how Article 39 of the TR IPS Agreement, especially Paragraph 3, is 
implemented by Chinese legislation (data protecti on against unfair commercial use and disclosure)?  
 WT/TPR/M/199/Add.1 
Page 116  
 
  (f) Enforcement 
 WTO Secretariat's report, page 106, para. 241  
According to the Secretariat's report, Chinese aut horities state that China has established a relatively 
complete legal framework on IPR protection, and has made great achievements and progress on IPR 
enforcement. Furthermore, the Report outlines that  realising the importanc e of IPR protection in 
facilitating innovation in the economy, China has shif ted the focus from formulating legislation to 
enhancing law enforcement. The EC welcomes this approach, since we consider it to be the most 
appropriate one for ensuring sustainable foreign in vestment and promoting innovation. In order to 
enhance the enforcement of IPR, the commitment of  all administration bodies, a high degree of co-
ordination by the central authorities at a national level and the concurrence of both private stakeholders and the public opinion are required. 
103. Could China explain which specific measures the Chinese authorities have taken during the 
last two years (or intend to take) for channelling the above approach and achieving successful results 
in IPR enforcement? 
 
WTO Secretariat's report, pages 106-107, para. 242  
The Report indicates that administrative actions consist of mediation by the authorities, involving a 
large number of agencies. 
 
104. Could China provide a comprehensive scheme of the different administrative bodies engaged 
in the administrative enforcement of intellect ual property rights, including their respective 
competences? Could China provide statistical data on the ex officio  actions against IPR violations 
undertaken by the different administrative bodies engaged in the enforcement, classified by 
administration?  
 
In 2006, four regulations were issued to fac ilitate the transfer of cases to be settled from 
administrative actions to judicial measures. 
 
105. Could China explain the mechanism of transfer  provided for in each of the four regulations? 
Please provide statistical data on the transfers fro m the administrative to the criminal authorities 
carried out since the last TPR review in 2006.  
 
According to the Report administrative and judicial de cisions are difficult to enforce owing to the lack 
of appropriate infrastructure and sufficient manpower . The EC considers that a sufficient provision of 
resources is the touchstone of an effective enforcement of IPR.  
106. Does China plan to adopt measures to remedy  the situation described in the Report? If so, 
please specify and indicate the milestones of this process.  
 
The Report notes that IPR-related cases must meet minimum value thresholds to be considered for 
criminal prosecution. It is also mentioned that the value thresholds "may take the form of, inter alia, 
value of the goods, illegal gain  or amount of illegal copies ". 
 
107. Could China explain in which cases the differe nt criteria apply? In doing so, could China 
provide some practical examples of value assessment?  
  WT/TPR/M/199/Add.1 
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  The Report states that Criteria on minimum threshol ds are specified under the Judicial Interpretation 
of the SPC on Issues Concerning Application of Law in Dealing with Criminal IPR Cases, issued by the Supreme People’s Court (SPC) and the Supreme People's Procuratorate (SPP). 
 
108. Is there any stable set of criteria used for establishing the quantitative thresholds for criminal 
prosecution? Please assess the deterrent effect ment ioned in Article 61 TRIPS with regard to the 
aforementioned system of determination of thresholds for criminal prosecution. 
 
WTO Secretariat's report, page 107, para. 243  
The Report states that customs is in charge of en forcing intellectual property rights at the border. 
According to the Report, customs authorities have  been increasingly invo lved in seizures and 
investigations of infringing goods. 
 109. Could China provide data on how many custom s actions have been undertaken on request / ex 
officio  against IPR infringing imports / exports? Are Customs authorities empowered to intercept 
infringing goods in transit / transhipment? 
WTO Secretariat's report, pages 107-108, para. 244 
According to the Report, China has tried to increa se public awareness of IPR protection, and various 
authorities launched a series of campaigns. 
110. Could China assess the result of such campaigns  and provide data regarding their evaluation 
on the ground? 
Regarding civil procedures and remedies, Article 47 of the TRIPS Agreement establishes that 
"Members may provide that the judicial authorities sh all have the authority, unless this would be out 
of proportion to the seriousness of the infringement, to  order the infringer to inform the right holder of 
the identity of third persons involved in the prod uction and distribution of the infringing goods or 
services and of their channels of distribution". 
111. Could China indicate whether Chinese legi slation has implemented the provision of 
Article 47 TRIPS? If not, does China inte nd to introduce it in its legislation? 
Provisional measures are a basic element in IPR enforcement. 
 112. Could China explain how Article 50 TRIPS is  implemented in Chinese legislation? Could 
China provide relevant provisions of Law? Could Ch ina furnish statistical data regarding provisional 
measures adopted by the judicial authorities over the last two years? 
 
By its WTO accession in 2001 China committed itself to adapting its investment policies to be 
compliant with the Agreement on TRIMs. Furtherm ore the representative of China in the working 
group of China’s WTO accession confirmed that "China  would only impose, apply or enforce laws, 
regulations or measures relating to the transfer  of technology, production processes or other 
proprietary knowledge to an individual or enterprise in  its territory that were not inconsistent with the 
WTO Agreement on Trade-Related Aspects of Intell ectual Property Rights. He confirmed that the 
terms and conditions of technology transfer, pr oduction processes or other proprietary knowledge, 
particularly in the context of an investment, woul d only require agreement between the parties to the 
investment".  WT/TPR/M/199/Add.1 
Page 118  
 
  On Non-tariff Measures, the protocol to the accessi on of China to the WTO spells out that the issuing 
of import licenses, quotas, tariff-rate quotas or any other means of approval for information, the right of importation or investment is not conditioned on  performance requirements of any kind, such as 
local content, offsets, the transfer of technology , export performance or the conduct of research and 
development in China.  
113. How the Chinese authorities intend to ensure that  the conditions  of a contract to transfer 
technology are in conformity with the Accession protocol of China to the WTO  
114. Could China please confirm whether it agre es that any transfer of technology depends 
exclusively on the free will of the contractors in volved, and the approval for investments is not 
conditional to fulfilling local conten t requirements, setting-up of resear ch institutions in China or the 
transfer of technology?  
IV. TRADE POLICIES BY SECTOR  
(2) A
GRICULTURE  
WTO Secretariat’s Report, pages xii-xiii, para. 23 
The Report states that China's agri cultural policy has traditionally been  aimed at ensuring an adequate 
supply of food at stable prices.  115. Could China elaborate on how it plans to address the high increase of the price of rice? 
 
(3) E
NERGY  
WTO Secretariat’s Report, page 118, para. 43 
The amendment to the Energy Conservation Law (1998) was approved on 28 October 2007 and took 
effect on 1 April 2008.  After the institutional restructuring in March, the NELG has been integrated 
into the National Bureau of Energy and Nati onal Energy Commission, both under the NDRC. 
 
116. Could China explain how policy-making and regulation in the energy sector has been 
organised and its foreseen consequences? 
 
WTO Secretariat’s Report, page 119, para. 45 
The Report states that there is no comprehensive la w and no real regulatory framework for the energy 
sector and that the legislative framework continues to be provided by regulations and administrative 
documents rather than by laws.   In 2006, the Aut horities started drafting an energy law, to regulate 
the oil, electricity, coal, and natural gas sub sectors.  
117. Which are the government regulatory goals as for markets access, pr ivate investment and 
private initiative in such law? 
118. Does China foresee a tendering system that will improve competitiveness among Chinese and 
foreign operators and spur foreign investment? 
  WT/TPR/M/199/Add.1 
 Page 119 
 
 
  (4) M ANUFACTURING  
(ii) Textiles and clothing WTO Secretariat’s Report, page 130, para. 91 
No data were made available to the Secretariat on the shares of SOEs, FIEs and domestic private 
enterprises in total output (for firms with annual turnover above Y 5 million). 
119. Could China make such information available? 
120. Does China intend to increase the related share of domestic production (SOEs and private 
enterprises)? If so, how? 
WTO Secretariat’s Report, pages 130-131, para. 93 
Reference is made to the Development Guidelin es of the Textile Industry which proposes upgrading 
technology and increasing the production of hi gh-quality products, developing energy-saving 
techniques, and promoting the development of the industry in central and western China. 
121. What progress was made in the last year in the implementation of these Guidelines in each of 
these objectives?  Could concrete data be shared on this progress? 
(iii) Automotive sector 
WTO Secretariat’s Report, page 132, para. 10 
 
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. 
 122. Could China indicate when this restriction will be removed? 
  
WTO Secretariat’s Report, page 133, para. 103 
 
Substantial investment in the automotive sector in recent years has apparently created excess capacity. 
Thus, in December 2006, the Notice on Opinions to  Restructure the Auto Industry was issued to, inter 
alia, curb investment in the automotive sector a nd develop more "environmentally friendly" auto 
manufacturers. 
 
123. Has the 2006 Notice succeeded  to curb capacity increases in  the sector? Has there been a 
change in pattern of new capacity creation, in te rms of proportion of FIEs vs Chinese-owned vehicle 
manufacturers, as compared to previous years?  
 
WTO Secretariat’s Report, page 133, para. 106  
Under the "Regulation of Certification and Accr editation" and "Regulation of Certification for 
Automotive Products", automotive products must obta in a China Compulsory Certificate (CCC) mark 
and are subject to random inspection at the border.   Each vehicle will then be issued with an 
"Inspection and Quarantine Certificate for Enteri ng Commodities" and a "Car Attaching Inspection 
Certificate". 
 124. Do the Chinese authorities intend to  facilitate the homologation process?  WT/TPR/M/199/Add.1 
Page 120  
 
  125. Provided that there are a limited number of Chinese certification enterp rises, do the Chinese 
authorities intend to enlarge the number a nd nationality of certifying enterprises? 
 Automotive regulations in China are national a nd not consistent with those of the UNECE 1958 
Agreement concerning Uniform Technical Prescriptions and WP.29. A Chinese standard may be a 
mix of a UNECE Regulation and a National Standard . The adoption of "mixed standards" makes it 
difficult for importers to meet that unique mix of requirements.   126. Does China have any plans to adopt and acc ept UNECE Regulations without changes unique 
to China? Does China have plans to  accede to the UNECE 1958 Agreement? 
WTO Secretariat’s Report, pages 133-134, para. 107 
 
According to the Secretariat's report, Article 39 of  the Automobile Trade Policy prohibits unfair trade 
with regard to imports of automobiles and parts;   the competent authorities under the State Council 
may implement anti-dumping, countervailing, and saf eguard measures, establish a warning system, 
and conduct investigations into the comp etitiveness of the automobile industry. 
 127. Have the Chinese authorities implemented any such action in the automotive sector in the 
course of the last 2 years? 
 
Wood and paper 
 
Rising duties have not slowed down Chinese imports of rough timber.  
128. What are the essential lines of China's policy in the wood and paper sector? 
 129. Which rules govern investments in the sector? 
 
130. What is the amount of subsidies (including tax measures) granted to this industry in the last 
two years?  Shipbuilding 
 
Regarding shipbuilding, China has currently a market share of more than 28 % world-wide in terms of 
new orders expressed by CGT. China is the third largest shipbuilder in the world with production 
(completion) of more than -6 millions CGT in  2007 in comparison with 1.1 million CGT in 2000. 
China has very ambitious plans to become the world's largest shipbuilder by 2015.  
 In this context, and at the occasion of last TRM,  the EC raised the following question: "Does China 
intend to use direct or indirect support measures (such as tax breaks, exemption from business income 
taxes, preferential policies for exports of sea-going ships, exemption for new ship-leasing institutions 
from paying business taxes for at least five years, and reduced business tax rate)?"  China replied: 
"Support measures from the Chinese government to th e development of the shipbuilding industry will 
take into full consideration of the disci plines of the relevant WTO agreements". 
 
131. Could China provide more precise inform ation on support measures allocated to local 
shipbuilding industries?   WT/TPR/M/199/Add.1 
 Page 121 
 
 
  (5) S ERVICES  
(iii) Financial services  WTO Secretariat’s Report, pages 145-146, paras 149-153 
 According to the Secretariat report, no single forei gn financial institution may own more than 20% of 
the equity of a Chinese financial institution.  132. Considering that China has not scheduled lim itations on foreign ownership, when is China 
planning to fully implement its WTO commitment s and permit full foreign ownership of Chinese 
banks? 
 
133. Regarding the implementation of the Regul ation on the Administration of Foreign-Funded 
Banks, could China please clarify  
 (a) whether it permits foreign-funded banks to use the same structure of "second-tier" 
branches and sub-branches that is used by  state-owned commercial banks, or if there 
are any differences e.g. in the geographical coverage? 
  (b) why is does not permit foreign-funded ba nks to take the 30% capital deposits from 
other banks on an equal basis with Chinese banks? 
 
 (c) its justification for the additional fi ve-year waiting period for the conduct of local 
currency business? 
 
Minimum working capital requirements for direct br anches of foreign banks also remain extremely 
high, amounting to RMB 300 million per branch depending on the business scope.  These 
requirements are much higher than minimum cap ital requirements in most other countries and 
effectively limit market access for foreign banks.  Fu rthermore, banks that incorporate locally are only 
allowed to retain one branch, under very strict conditions. 
 134. Could China please indicate (1) why minimum capital requirements for branches are set at 
such high levels, and (2) what exactly is the "p rudential" justification for the one-branch cap? 
 According to the Secretariat Report, paragraph 150 i ndicates that "it was not clear to the Secretariat 
why the minimum asset requirements are higher for the establishment of branches than for locally 
incorporated entities, taking into account that br anches are not allowed to conduct retail business". 
 
135. Could China please clarify this issue?  
WTO Secretariat’s Report, page 154, para. 182 
 
The geographical expansion of foreign insurers  is still hampered significantly by slow and 
unpredictable regional-level licensing processes. Acco rding to the Secretariat's report, China also 
gives priority to branch license applications in cer tain areas and sectors, in effect applying economic 
needs tests (ENTs).  136. When will China take steps to ensure equal treatment between domestic and foreign insurers 
with regard to branch/sub-branch licensing and geographic expansion? Could China please clarify 
why it has not scheduled the Economic Needs Tests?  WT/TPR/M/199/Add.1 
Page 122  
 
  WTO Secretariat’s Report, page 156, para. 192 
 
According to the Secretariat's Report, direct insura nce companies established in China must provide a 
right of first refusal for 50% of their reinsuran ce programmes with domestically admitted reinsurance 
companies. 
 
137. Could China please clarify why it has not scheduled these priority cessions?  China recently published for comments a draft regulati on on administrative methods on equity interest 
in insurance companies, which raises a number of important questions in terms of compatibility with 
China's WTO commitment. 
 138. Has China taken all necessary steps to en sure that the new regulation will be WTO-
compatible? 
 
(iv) Telecommunications WTO Secretariat’s Report, pages 163-164, para. 219 
 
According to the Report there are at present 22, 000 providers of value added services (VAS) 
operating in China. We are informed that only 6 out of the 22,000 service providers are actually foreign companies (The Report suggests that this number is 11 (p.166, para. 226)).  
 
139. China is invited to provide its views on the ex istence of this gap between the local and foreign 
licence holders for VAS given that there is a lot of interest on the side of the foreigners to provide 
VAS in China.  
The Reports states that there are two basic service providers in the fixed market and another two in 
the mobile market. This means that at present ther e is a de facto duopoly situation in each of these two 
markets.  140. Could China express its level of satisfaction on the present development of competition in the 
basic services markets and if not satisfied whethe r is consider of undertaking a thorough market 
analysis to identify the reasons for th e lack of competition in these markets? 
 
141. Could China explain the reasons for not granti ng so far new licences to provide basic telecom 
services?  WTO Secretariat’s Report, page 164, para. 221 
 
The Regulations on Telecommunicati ons of 2000 provide for the separation of the Government from 
business in the telecoms sector.   142. Would China consider that the transfer of high level employees (e.g. managers) of the state 
owned basic telecoms service providers to the re gulatory body and vice versa contributes to such 
separation?  
 The Report notes that the Regulations for the Admini stration of Foreign Invested Telecom Enterprises 
and the Administrative Measures for Telecommunica tions Business Operating Permits entered into 
force in 2002. 
 143. Could China provide with clarification on th e nature of the company (telecoms versus non-
telecoms) with which a foreign company can create a joint venture to provide any type of telecoms  WT/TPR/M/199/Add.1 
 Page 123 
 
 
  service in China on the basis of the above mentione d Regulations and any other piece of legislation 
applying in this case?  
 
WTO Secretariat’s Report, page 165, para. 223 
 
The Report states that since 2006, there have been no new entrants in the mobile services sector, 
including 3G services, for which licences have not b een issued. In fact, the reasoning for this lack of 
3G licence holders refers to the absence of setti ng the authorisation procedures for granting such 
licences.  
144. Could China provide with information on when such authorisation procedures will be 
launched?   145. Is there any service provider that will provide 3G services during the Olympic Games?  WTO Secretariat’s Report, pages 165-166, para. 226 
 
The Report states that foreign investment in the sector is regulated by the Provisions on 
Administration of Foreign Invested Telecommunicat ions Enterprises. Under these provisions, foreign 
participation is subject to minimum capital requi rements applicable also to domestic suppliers. 
 
146. Which is the purpose of maintaining these high level capital requirements?  
 147. Does China consider that these requiremen ts have an impact on the absence of the 
development of competition in the basic telecoms services? 
 
WTO Secretariat’s Report, page 166, para. 227 
 
The Report notes that for an FIE to obtain a t elec om services licence, the Chinese major investor 
(rather than the foreign investor) must submit an ap plication to the MII. Foreign investors do not need 
to submit the application.  
148. Could China further elaborate on this suggesti on and in particular cite the exact legislative 
provisions not requiring a licence by a foreign investor?   149. Could one assume on the basis of the above st atement that the steps that a foreign operator 
who wishes to provide telecoms serv ices in China will need to take refer to (a) the foreign operator 
will select a Chinese company (not necessarily a teleco ms provider but any type of company), (b) the 
Chinese company applies for a licence and (c) when the licence to the Chinese operator is granted 
then the joint venture can be formed.   150. Could alternatively, the foreign company ch oose any type of company established in China -
not necessarily a telecoms operator- and instead of the Chinese company, the foreign operator applies 
for a licence? 
 
The Report notes that for applications for the prov ision of VAS, the time limits include a processing 
phase by local administration of 60 days and an approval period of 30 days of receipt.  
151. Could China provide with data on how these time  limits have been implemented in practice? 
 WT/TPR/M/199/Add.1 
Page 124  
 
  Satellite services 
 
152. Could China provide with information on the steps to take in order to provide satellite 
services in China?   
153. In addition, could China elaborate on state of competition in the satellite services market?  
 
Computer reservation systems  
 
In relation to China’s commitments under the GATS for the provision of Computer Reservation 
Systems (CRS) services, and with reference to info rmation provided by China at the meeting of the 
Council for Trade in Services on 16 November 2007, the EC notes that the drafting of an Interim Regulation on Approval and Administration of the Direct Access and Usage of Foreign Computer 
(Passenger) Reservation System by Sales Agents of Civil Air Transport Enterprises has been 
completed by the China General Administration of Civil Aviation. CRS providers need certainty 
concerning the legal environment for operating in  China and a guarantee that non-discriminatory 
principles will be applied. 
154. Please could you provide detailed information as to the content and timing for entry into force 
of this regulation? 
 
EUROPEAN COMMUNITY (ADDITION
) 
 
I. ECONOMIC ENVIRONMENT 4. M
AIN STRUCTURAL REFORM ISSUE  
(ii) Tax reforms 
 
Government Report, page 11, para. 42  
1. Could China provide further information w ith regard to the implementation of the new 
Enterprise Income Tax Law, and in particular, how it operates with respect to the unification of the 
tax treatment, tax rates, ta x incentives and tax deductions? 
 
Government Report, page 11, para. 43 
 2. Could China indicate the timeline for exte nding the VAT reform pilot programme to the 
whole Chinese territory? In addition, what is Chin a's assessment of the functioning of the pilot 
programme? 
 3. Could China furnish further details on the technical arrangements they intend to adopt in 
order to convert the current VAT from a production- based tax into a consumption-based tax, and on 
the foreseen effects of these measures on imports?  (iv) Labour market WTO Secretariat's report, page 17, para. 34 
 The Secretariat report outlines that 'the Labour Contract Law, which entered into force on 
1 January 2008, aims to strengthen the role of uni ons with regard to termination of employment; the 
Law requires the use of labour contracts, and a ddresses collective contracts and part-time workers 
through separate clauses.  Furthermore, in January 20 04, the Ministry of Labour and Social Security 
(MLSS) issued regulations that provided specific rules for the consultation process for collective 
contract bargaining"  WT/TPR/M/199/Add.1 
 Page 125 
 
 
  4. Could China provide further information on th e implications of the Labour Contract Law on 
the way collective bargaining would be protected in  China? In particular, what are what are the 
measures taken to improve the creation of safe workplaces?  
 
The Secretariat's report outlines that "Certain employment restrictions under the "Hukou" (worker 
registration) system have been relaxed to promote the development of rural areas and address income 
inequality. Nonetheless, the system still distinguish es between urban, rural, temporary, and permanent 
workers. This puts workers register ed in rural areas seeking jobs in urban areas (migrant workers) at a 
disadvantage, as their entitlements to health care, housing, and education for their children, are not 
sufficiently provided for by the employers or local authorities".  
5. Could China indicate whether it has plans to  undertake further actions to address income 
inequality, and if so, in which sectors?  
6. Could China inform of its intention of ratifying the ILO Conventions on freedom of 
association and the effective recognition of the right to collective bargaining (ILO Conventions 
No. 87 and No. 98)? 
WTO Secretariat's report, page 22, para. 45 
 
The Secretariat report outlines that "China needs to continue to address a number of important social 
and economic challenges, including various ec onomic imbalances, which could jeopardize the 
economy's stability and thus the achievement of a 'harmonious society'"   
7. Could China provide further information on the specific actions that the Government has 
already taken or plans to take in order to alleviat e the social challenges related to the rights of women 
and children? 
 
5. T
RADE AGREEMENTS AND ARRANGEMENTS  
(iv) Unilateral preferences  
WTO Secretariat's report, page 38, para. 68 and Government's report, page 20, para. 103 
 
The EC invites China to provide more substantial replies to the questions concerning Africa's DFQF 
treatment to some African countries. It is in the in terest of all LDCs, and for the sake of transparency, 
that China discloses the details of its current regime and informs about its plans towards full 
liberalisation for all potential LDC imports.  
8. Could China please indicate on how many and on  which tariff lines LDCs currently enjoy full 
DFQF?  
9. Is this treatment similar for all 41 LDCs that are diplomatic relations with China or are there 
differences (in coverage and tariff reduction) fo r African LDCs compared to Asian LDCs for 
instance? 
 
According to the same information provided by th e WTO Secretariat, in 2005 79% of Asian imports 
from LDCs related to fuels and minerals.  
 10. What is the value of Chinese agricultural and manufacturing imports from LDCs, and what 
percentage of these imports currently enjoy DFQF? WT/TPR/M/199/Add.1 
Page 126  
 
  6. F
OREIGN INVESTMENT REGIME  
Government's report, page 11, para. 41 
 It is stated that "On the capital account management , in 2007, in order to meet the legitimate demand 
of Chinese individuals and institutions for overseas financial investment and assets management, the 
Chinese residents are entitled to invest in foreign security markets via qualif ied domestic institutional 
investors. Meanwhile, the upper limit was also elevated fo r qualified foreign institutional investors to 
invest in the Chinese domestic security market".  
 
11. Could China provide further information regard ing the restrictions to investment operations, 
which can be only through qualified domestic institutional investors and qualified foreign institutional 
investors?  
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
2. M
EASURES DIRECTLY AFFECTING IMPORTS  
(iv) Indirect taxes affecting imports  
WTO Secretariat's report, page 56, para. 40 
 
EC question 23 and Brazil question 7 (as included in pages 18 and 60) relate to VAT treatment for 
non-processed agricultural products. However, the replies to both questi ons appear to be 
contradictory.  
China claims that the imported goods benefit fro m VAT exemption in the exporting countries and 
would therefore have to be subject to VAT upo n importation. Despite this being the general 
procedure, it appears that for domestic non-pr ocessed agricultural products no VAT is imposed 
whereas this is not the case for similar imported products. Therefore, this entails discrimination 
against such imported goods. 
 
12. Could China please clarify?   
13. In addition, could China be more specific re garding the Interim Regulations on value added 
tax, in particular whether it will be replaced and when?  WTO Secretariat's report, page 56, para. 41  
14. Could China confirm whether indirect taxes a pplied to imports comply with the provisions set 
out in GATT Article III.2? 
 
(viii) Standards and other technical requirements 
 While we are awaiting to receive answers to the va rious outstanding questions in this section, the EC 
would like to add the following question: 
 
15. Could China clarify whether or not, at levels below that of a national standard, a standard can 
be either mandatory or voluntary? In the case th at a standard at these levels becomes mandatory, 
could China confirm whether they fully comply w ith provisions laid down on Article 3 of the WTO 
TBT Agreement? 
  WT/TPR/M/199/Add.1 
 Page 127 
 
 
  (4) M EASURES AFFECTING PRODUCTION AND TRADE  
(d) Tax incentives 
 
WTO Secretariat's report, page 87, para. 159  
The report states that "Despite the large number of programmes notified, a breakdown of estimated 
annual revenue foregone as a result of individual tax incentives is not available: nor has China 
provided the Secretariat with an evaluation of  the cost-effectiveness of these tax incentives". 
 
16. Could China provide information on the co st-effectiveness of these tax incentives? Could 
China confirm whether the intended objectives have been met? 
 
(vi) Intellectual property rights 
(b) Patents 
 
At the Ninth EU-China Summit, on 9 September 2006,  the EC and China adopted a Joint Statement 
by which they expressed the willingness to strengt hen exchanges and co-operation on IPR protection 
in the area of technology and support the contract ual freedom between enterprises in the field of 
technology transfers under the condition of fairness, reason and non-discrimination.  
17. How does China envisage to follow-up on this issue and en courage Chinese companies to 
respect intellectual property rights and enter into negotiation for licensing agre ements for the use of 
patented foreign technologies? 
 
In the Chinese Government's report there is no explic it reference to the remuneration of patents in the 
ICT sector. 
 18. Does China plan to undertake specific measure s for this particular sector in order to 
strengthen the protection of ICT patents and guarantee the effective payment of royalties? 
 
WTO Secretariat's report, page 103, para. 220 
 
It is mentioned that the Patent Law is curren tly being revised. Quoting from the Report, "the 
(Chinese) Authorities state that the purpose of th e revision is to further enhance protection by: 
improving ‘patent agent’ system and the management of patent rights; clarifying the criteria for 
granting patents; and preventing the abuse of patents".  
19. How do the Chinese authorities intend to improve  ‘patent agent’ system; the management of 
patent rights; clarify the criteria for granting patent s; and how is it intended to prevent the abuse of 
patents? Could China specify the scope of the concept of "abuse of patents"? When does China 
foresee the finalisation of the revisions of this process? 
 
(c) Trademarks 
 
As well as straightforward counterfeiting, an in creasing problem is the circulation of lookalike 
products on the Chinese market. These are goods that ar e not exact copies of the originals but display 
key characteristics designed to make consumers believ e that the products are the same as the original. 
Examples of techniques used can be the use of th e same colours or marks similar to registered 
trademarks. This form of IPR violation is no less serious than counterfeiting and should be effectively 
dealt with.  
20. How do the Chinese authorities intend to tackle the issue of lookalike products? 
 WT/TPR/M/199/Add.1 
Page 128  
 
  WTO Secretariat's report, page 104, para. 228 
 
It is noted that trademark registration takes approximately 24 months, from submission of the 
application to the first action by the trademark administration. In 2006 the number of trademark 
applications increased of 15.4% over the previous  year while the number of trademarks approved 
increased of 6.6%. 
 
21. Which measures have the Chinese authorities take n - or do they plan to take – to face the 
dramatic increase in trademark applications? 
 
WTO Secretariat's report, page 104, para. 229 
 
According to paragraph 229 of the Report China uses a "first-to-file" approach to trademark 
registration. For trademarks that have already been used in other countries, but have not registered in 
China, provided that they are "well-known trademarks ", a copy, imitation or translation of that well-
known trademark cannot be registered and must be prohibited from use. 
 
22. Could China describe the scope of the con cept of "well-known trademark" in the Chinese 
Trademark Law? Could China assess the compliance of Trademark Law with Paragraphs 2 and 3 of Article 16 of the TRIPs Agreements? 
 
WTO Secretariat's report, page 105, para. 230 
 According to Paragraph 230 of the Report, in 2006 14,960 review a pplications were received by the 
Trademark Review and Adjudication Board, and 4, 219 were reviewed (10,144 and 6,305 in 2004). 
 
23. Does China plan to adopt measures regardi ng the Trademark Review and Adjudication Board 
in order to enable this body to face the increase in review applications? 
 
(d) Copyright and related rights 
WTO Secretariat's report, page 103, para. 218 
 
According to Paragraph 218 of the Secretariat's report China made reservation on Article 14 of the 
WIPO Performances and Phonograms Treaty (WPP T). The Commission is concerned about this 
reservation. Broadcasting and public performance right s are indeed crucial to the recording industry 
as sales of hard copies are no longer the only form of revenue for record companies.  
24. Does China plan to propose amendments to the Copyright Law, where sound recording 
producers should be accorded rights of communica tion to the public including broadcasting and 
public performance rights? If not, can China explai n the reasons for the reluctance to grant these 
rights to sound producers? 
 
(e) Other IPRs 
 
WTO Secretariat's report, page 106, paras 238-239 
 
The State Trademark Office and the AQSIQ are engaged in the management of GIs. The Commission has heard that a third GI protection system, managed by the Ministry of Agriculture, would be 
operational as from 1 February 2008 specifically for agricultural products. 
 25. Could China provide detailed information con cerning the respective competences of the State 
Trademark Office and the AQSIQ with regard to GIs?  Could China confirm that a third GI protection 
system has been set up? If so, could China explain the relationship between these three systems? For   WT/TPR/M/199/Add.1 
 Page 129 
 
 
  example, how is an application filed before one – or a registration granted by one – of the three 
entities (AQSIQ, State Trademark Office, Ministry of Agriculture) taken into account by the other two? 
 
Chinese authorities have stated that a law on geograp hical indication is to be issued before 2010. 
 
26. Which scope of protection; process of registra tion; enforcement scheme; and transfer system 
from the administrative to the criminal authorities do es China plan to establish by the means of this 
new legislation?  
 
WTO Secretariat's report, page 106, para. 240 
 
The report indicates that no changes have been ma de regarding undisclosed information or trade 
secrets. 
 
27. Could China explain how Article 39 of the TRI PS Agreement, in particular with regard to 
Paragraph 3, is implemented by Chinese legislati on (data protection against unfair commercial use 
and disclosure? 
 
(f) Enforcement 
Government's report, page 12, para. 47  
Chinese authorities note that "the National Worki ng Group on IPR protection issued the annual action 
plans for China's IPR protection in March 2006 an d March 2007 respectively, which gave detailed  
instructions on 438 specific tasks and supporting me asures in areas such as la w enforcement, special 
targeted actions, international cooperation,  consultancy, education and so on". 
 28. Could China assess the result of such annual action plans and provide data regarding their 
evaluation on the ground?  
 
Government's report, page 12, para. 48 
 
It is stated that "in 2006, the State Council promul gated the Regulations on the Protection of the Right 
of Communication through Inform ation Network (among others)". 
 
29. Could China explain how the aforementioned regulations tackle the distribution of IPR- 
infringing contents?  
 
30. Could China provide information on how many  administrative actions have been undertaken 
and how many civil and criminal liabilities ha ve been imposed under the aforementioned 
Regulations? 
 
WTO Secretariat's report, page 107, para. 242 
 
According to the Secretariat's report, administrativ e actions consist of "mediation by the authorities, 
involving a large number of agencies". 
 31. Could China provide statistical data on th e ex officio actions against IPR violations 
undertaken by the different administrative bodies engaged in the enforcement, classified by 
administration?   
32. Could China explain how the different admini strative bodies mentioned in the answer to EC 
questions 104 are coordinated?  WT/TPR/M/199/Add.1 
Page 130  
 
  In addition, it is stated that "In 2006, four regulati ons were issued to facilitate the transfer of cases to 
be settled from administrative actions to judicial measures".   
33. Could China explain the mechanism of transfer  provided for in each of the four regulations? 
Please provide statistical data on the transfers fro m the administrative to the criminal authorities 
carried out since the last TPR exercise?  
 
Protection of IPR is a difficult field to be monito red as regards the concre te implementation of new 
regulations and new bodies established.  
 34. Could China provide further information on the number of proceedings initiated in 2007, 
number of condemning decisions and origin of Judges in the Chinese arbitration commissions? 
 Furthermore, the report indicates that "administrativ e and judicial decisions are difficult to enforce 
owing to the lack of appropriate infrastructure and sufficient manpower". The EC considers that a 
sufficient provision of resources is the touchstone of an effective enforcement of IPR.   
35.  Does China plan to adopt measures to remedy  the situation described in the report? If so, 
please specify and indicate the milestones of this process?  
Regarding civil procedures and remedies, Article 47 of the TRIPS Agreement establishes that 
"Members may provide that the judicial authorities sh all have the authority, unless this would be out 
of proportion to the seriousness of the infringement, to  order the infringer to inform the right holder of 
the identity of third persons involved in the prod uction and distribution of the infringing goods or 
services and of their channels of distribution". 
 
36. Could China indicate if its legislation has implemented the provision of Article 47 TRIPS. If 
not, does China intend to introduce it in its legislation?  
 
WTO Secretariat's report, page 107, para. 243 
 
Customs is in charge of enforcing intellectual prope rty rights at the border. According to the Report, 
customs authorities have been increasingly involve d in seizures and investigations of infringing 
goods. 
 
37. Could China provide data on how many customs actions have been undertaken on request / ex 
officio against IPR infringing imports / exports. Are Customs authorities empowered to intercept 
infringing goods in transit / transhipment? 
 
IV. TRADE POLICIES BY SECTOR 
(3) E
NERGY  
 
WTO Secretariat's report, page 118, paras 43-45 
 
Foreign companies in the energy sector face num erous pre-conditions, which are only imposed to 
foreign investors, and which result in difficulties to enter the Chinese wholesale fuel market. These 
preconditions include the need to already possess majority ownership of at last 30 retail petrol stations and to won a certain amount of storage capacity.  
 
38. Could China explain the rationale for imposi ng those pre-conditions to foreign companies?  WT/TPR/M/199/Add.1 
 Page 131 
 
 
  (5) SERVICES 
(iii) Financial services 
 Restrictions persist in securities, where foreign fi rms are obliged to enter JVs. Foreign equity caps 
apply in fund management at 49% and in securities tr ading at 33%. Overseas firms are limited to trade 
in certain firms classes of shares and are particularly  restricted in trading A-shares. We are aware of 
the recent reforms, however we consider that it is  in the interest of Chinese economy to develop a 
better functioning financial services market and allo wing more foreign companies with experience to 
enter may help the cause. 
 39. Does China intend to lift or ease these restrictions? 
 
(vii) Postal services 
WTO Secretariat's report, page 182, para. 303 
 
With regard to the draft Postal Law, the repor t notes that "amendments are being prepared after 
soliciting opinions from domestic and foreign compan ies". However, the EC would like to underline 
that the last 3 drafts have not been fully disclosed for stakeholders' opinion.  
 40. Could China confirm that the reform will not entail an extension of the monopoly of China 
Post beyond the areas currently covered?  In partic ular, we would like to stress that express delivery 
of letters and other items must remain outside th e scope of the monopoly, in line with China’s GATS 
commitments.  
 
As it was discussed and agreed in December 2002, a nd in conformity with its GATS obligations, the 
scope of previously existing licenses to cour ier operators should not be restricted.  
 41. Could China confirm this?  
 
The EC continues to have strong concerns relati ng to an eventual imposition of licensing fees for 
express operators. In addition, recent drafts of th e Postal Law would appe ar to prohibit foreign 
invested firms from carrying domestic documents. 
  42. Could China please clarify these concerns?  
 
The powers to establish the conditions for carrying out postal and courier activities and monitor the 
correct functioning of the market should be entrus ted to a regulator which is independent from the 
interests of the operators. Although the current draft refers to the need for an independent regulator 
and Chinese officials in the past ha ve stated that such a role will be created, no such independence is 
included in the draft. Without an independent re gulator, many provisions in the Draft Postal Law 
could remain ineffective. 
 43. What are China's plans to address these concerns? 
 
(viii) Legal services 
 
WTO Secretariat's report, page 182, para. 304 
 
In legal services there are economic needs tests that must be fulfilled to permit the establishment of 
local offices, which may violate China's WTO co mmitments.  Secondly, no authorisation for an 
additional office is possible until the previous repr esentative office of the fi rm has been established 
for at least 3 years.  Thirdly, companies are also prevented from practising a number of legal WT/TPR/M/199/Add.1 
Page 132  
 
  activities, in addition to what Chinese lawyers lose th eir qualification when they are hired by foreign 
companies.  
44. Could China justify this? Why a registered Ch inese lawyer can work for a domestic firm and 
not for a foreign owned legal office?    (x) Tourism WTO Secretariat's report, page 187, para. 327 
 
In its WTO Accession Agreement, and in particul ar as set out in the Annex corresponding to GATS 
commitments, it is said that any agency except from joint ventures or wholly domestic owned 
companies will be entitled to intermediate in travels overseas of Chinese tourists. 
 45. Has China any plans to waive the restrictions of servicing Chinese tourists travelling overseas 
to 100% foreign owned travel agents, even if such  restriction fully complies with China's accession 
commitments?   Computer reservation systems 
 
As referred in EC question 154, the EC is interest ed to learn more about the drafting of an Interim 
Regulation on Approval and Administration of the Direct Access and Usage of Foreign Computer 
(Passenger) Reservation System by Sales Agents for Civil Air Transport.   
46. Could China provide detailed information on th e current stage of the legislative process and 
how long this review process will take?  How does China intend to consult stakeholders concerning 
this Regulation? 
 
TURKEY
 
 
WT/TPR/S/199  Question 1 I. ECONOMIC ENVIRONMENT 
(5) D
EVELOPMENTS IN TRADE  
(i) Composition of trade, para. 37  
What kind of system or procedure does the Government of China apply to confirm the inputs 
consumed in the production of the exported products and their amounts? 
Question 2 
III. TRADE POLICIES AND PRACTICES BY MEASURE (3) M
EASURES  DIRECTLY AFFECTING EXPORTS  
(viii) Export promotion and marketing assistance (b) Export finance and insurance, para. 139 
Could China please explain what are the requirements to benefit from the export finance and 
insurance program implemented by Export-Import (EXIM) Bank of China?  
Does the EXIM Bank provide more favourable expor t financing terms to certain enterprises?  
Could China provide the percentages of the export finance provided by EXIM Bank in last 5 years in 
terms of maturity (For instance; short- term, medium-term, long-term credits)?  WT/TPR/M/199/Add.1 
 Page 133 
 
 
  Question 3 
(c) Other export assistance, para. 143 
Could China please explain the criteria for receiving benefits from the International Market 
Exploration Fund for SME’s? 
INDIA  
Questions by India on the Trade Policy Review of China  
 Q1. Would China indicate as to when the activation of the Joint Working Group for expeditious implementation of bilateral MoU on Ap plication of SPS would be done?   
 
Q2. It may be recalled, during India-China discussions on China’s accession to WTO, both 
countries had agreed to work on expeditious entry of  17 fruits and vegetables into the Chinese market.  
So far only 3 items have been allowed (mangoes, grapes and bitter gourd) into the Chinese market 
despite the fact that technical details have been provided for all the 17 fruits and vegetables to the 
Chinese side.  Would China to indicate time lines as  to when the remaining 14 fruits and vegetables 
would be allowed for imports from India into China?   
 Q3. A Protocol was signed on the issue of Basmati rice in November 2006 but this has not become operational because a visit by Chinese rice expe rts to India is pending.  We request China to 
expedite the visit of the experts and co nvey their likely dates of travel?   
 
Q4. Indian exporters of dairy and meat products are keen to expand trade with Chinese partners, 
but their efforts are impeded by lack of clarity in terms of technical standards.  For example, bovine 
meat and meat products from India are not allowed entry into the Chinese market on grounds of concern surrounding FMD in India, even though the disease management of FMD in India is 
scientific and as per internationally accepted standard s.   There are areas which are DMB free in India 
from where such imports should be permitted as is done by many countries importing Indian bovine 
meat and meat products.  Would China remove the restriction on import of bovine meat and meat 
products from India?  Would China expedite visit of  its experts to India for inspection of the meat 
production units which is pending for long time?  Q5. In case of dairy products, it has been informed  by the exporters in India that China gives 
approval for individual Indian companies and even  there separate approvals are required for each 
product.   What steps are being taken by China to simplify the procedure of granting approvals?  Q6. In the India-China Joint Statement issued during Premier Wen’s visit to India, "the two sides agreed to constitute a Joint Working Group to im plement expeditiously the MOU on Application of 
SPS between the Chinese General Administration of Quality Supervision, Inspection and Quarantine 
and the Indian Ministry of Agriculture." The two si des agreed to activate th is JWG during the 7th JEG 
Meeting in 2006. This JWG is yet to materialise.  Would China indicate the likely date by which the 
JWG would be implemented?  Q7. The quarantine authorities in China insist on taking only one item at a time for pest risk 
analysis and further insist on a separate protocol to be signed for each individual item progressively. 
Even though understandings in this area were reached during the JEG me eting of March 2006, 
Chinese side has been reluctant to take a proactive approach toward s Indian concerns.  Would China 
clarify on this approach?  
Q8. Indian importers of met coke have reporte d that they face problems in importing met coke 
from China.  China has canalized export of met co ke and is restricting exports through quotas for WT/TPR/M/199/Add.1 
Page 134  
 
  local exporters.  Indian importers of met coke are further constraine d by being limited to source only 
from 7 Met Coke exporters.  Would China provide reas ons for the control by the Govt. over met coke 
exports and the quotas for exports?  Does the Chinese G ovt. plan to withdraw its control in the near 
future and is there a move to do away with the quota system? 
 
CHINESE TAIPEI
 
WTO Secretariat Repo rt (WT/TPR/S/199) 
I. ECONOMIC ENVIRONMENT 
(4) M AIN STRUCTURAL REFORM ISSUES  
(iv) Labour market 
Page 16, paragraph 31 
It would be appreciated if China could please provi de details of its policy, rules and regulations 
regarding natural persons seeking to work in China. 
(5) D EVELOPMENT IN TRADE  
(ii) Direction of merchandise trade Pages 19-20, paragraph 39 
a) Figure 1.2 on page 20 shows that 9.3% of China’s total imports were from free zones in 
2007.  
  Could China please clarify its definition of a free zone, and describe how it decides that 
imports are from free zones? 
 b) Figure 1.2 (b) shows that the share of China’s total imports accounted for by imports 
from free zones increased  by 2.4% between 2004 and 2007. This was a  faster growth 
rate than for imports from the Middle East (1.2%) and Africa (1%), which are 
important sources of energy and raw materials. In terms of value, China’s trade deficit 
with free zones also increased dramatically over the same period, from 
US$ 38.8 billion in 2004 to US$ 85.7 billion in 2007, to become its largest source of trade deficit.  
  Could China please describe the factors that  have caused such significant growth in 
free-zone imports? 
II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 
(2)  I
NSTITUTIONAL AND LEGAL FRAMEWORK  
(iii)  Transparency Page 30, paragraphs 27-29 
In its Protocol on the Accession of the People’s Republic of China, China committed to providing a 
reasonable period for comments to the appropriate au thorities prior to the implementation of all laws, 
regulations and other measures pertaining to trade in goods, services. In 2007, China issued numerous 
trade-related measures in close succession that, in our view, could have a significant influence on its 
investment and trade environment. These measure s include: "Catalogues of Restricted Commodities 
in Processing Trade", "Catalogues of Prohibited Commodities in Processing Trade", and "Catalogue 
for the Guidance of Foreign Investment Industries". 
We wonder whether a reasonable period for comment w as provided to interested parties prior to such 
measures being issued? If not, would that not be contradictory to China’s commitment?  WT/TPR/M/199/Add.1 
 Page 135 
 
 
  (5) T RADE AGREEMENTS AND ARRANGEMENTS  
(ii) Regional agreements (c) ASEAN-China free-trade area (ACFTA) 
Pages 34-35, paragraphs 46-49 
We note that China and Singapore have conducted four rounds of bilateral negotiations since 
August 2006, and they are scheduled to sign the resultant FTA at the end of 2008.  
As Singapore is a fellow member of ASEAN, coul d China please indicate the differences between the 
two FTAs? 
(iii) Bilateral agreements 
(h) China-Southern African Customs Union (SACU) 
Page 37, paragraph 64 
Could China please update us on progress in  its FTA negotiations with SACU?  
(6) F
OREIGN INVESTMENT REGIME  
(i) Recent developments in FDI policy Page 38, paragraph 69 
The "Law of The People´s Republic of China on Employment Contracts" implemented in 2008 has 
had a significant impact on the operations of foreign businesses.  
Does China intend to review this  law in the foreseeable future? 
(ii) Legislative framework and procedures 
Page 39, paragraph 74 
The provisions in the "Catalogue of Encouraged Foreign Investment Industries", which entered into 
force on 1 December 2007, classify foreign investment projects into four categories - encouraged, permitted, restricted and prohibited.  
 a) Does China have a plan to review the re stricted and prohibited categories and, if so, 
what is the timetable?  
 b) Does it also plan to review its "Catalogue of Advantaged Industries for Foreign 
Investment in Central-Western Chin a", which went into effect on 1
st September 2004 
and, if so, what is the planned schedule?   
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(2) M EASURES DIRECTLY AFFECTING IMPORTS  
(ii) Customs valuation and rules of origin 
(a) Customs valuation 
Page 46, footnote 10 to paragraph 14 
The Report mentions that the insurance costs are calculated by China’s Customs as 0.3% of the sum 
of cost and freight, for goods impor ted by land, air or sea, and as 1% if they are imported by rail or 
road. 
 a) For transactions that do not involve an  insurance fee, would the above-mentioned 
amounts be included in the Customs’ calculation of import prices? WT/TPR/M/199/Add.1 
Page 136  
 
   b) Could China please clarify how the incl usion of this assumed insurance cost is 
consistent with the principle that the tr ansaction value should be based on the price 
that is actually paid, or is payable? 
(iii) Tariffs 
(a) MFN tariff rates Page 48, footnote 20 to paragraph 21 
The Report mentions that there are 624 tariff lines subject to interim tariffs in China’s 2008 tariff 
schedule, effective from 1 January to 31 March 20 08. In addition, according to an "Announcement of 
the General Administration of Customs of th e People’s Republic of China" (No.\16 on 
12 March, 2008), the expiry date of 1% interi m tariffs for yellow soybeans was extended from 
31 March to 30 September, 2008.  
Could China please provide details regarding the stat us of the tariff rates of the remaining 623 tariff 
lines?  
(vii) Contingency measures 
(a) Anti-dumping and countervailing measures 
Page 60, paragraph 55 
According to the Report, anti-dumping complaints may be brought to MOFCOM in writing by any 
domestic industry, or by natural or legal persons, or by a releva nt organization on behalf of the 
domestic industry.  
Could an investigation be initiated based on a written application by the authority  in charge of a 
domestic industry, e.g. the Ministry of Industry and Information, or the Ministry of Agriculture? 
(viii) Standards and other technical requirements 
(a) Standards, certification , and accreditation 
Page 64, paragraph 70 
Table III.4 shows the status of China’s standards from 2002 to 2006.  
Could China please provide updated information to the end of 2007. Page 68, paragraphs 88-90 
a) To facilitate trade, would AQSIQ consider shortening the timeframe for the issuing of 
a quarantine permit?  
  Furthermore, where it is a case of the same products from the same manufacturer, 
would it be necessary to apply for such a permit for each import, or is it planned for some "fast-track" procedure to be made available?  
b) Regarding the exports of animals, pl ants and their products, could China kindly 
provide a copy of its "Catalogue of En try-Exit Commodities Subject to Inspection 
and Quarantine" for our reference?  
  Moreover, since China has indicated that "Exports must apply to CIQs at the port of 
export for quarantine approval…" and "G oods failing to meet the quarantine 
requirements are not allowed to leave the country", could China kindly provide  WT/TPR/M/199/Add.1 
 Page 137 
 
 
  details of the investigation and preventi on measures undertaken in order to achieve 
this goal? 
(3) MEASURES DIRECTLY AFFECTING EXPORTS  
(iv) Tax concessions under processing trade 
Page 75, paragraph 119 
By increasing the number of goods subject to export prohibition under "processing trade", China 
discourages the export of products using large amount s of raw materials for processing, products with 
low value-added, and products the manufacture of  which consume large amounts of energy or is 
highly polluting.  
a) Could China please indicate whether it intends to amend or modify its processing trade 
policies in the future? 
b) If so, what would be the possible direction and content of such modification?   
(4) MEASURES AFFECTING PRODUCTION AND TRADE  
(iv) State-owned enterprises, privatization, and corporate governance (b) "Domestic private" enterprises 
Page 97 
According to the Report, some foreign-invested  enterprises (FIEs) may also be state-owned 
enterprises (SOEs).  
Does this mean that the FIEs can invest in SOEs? If this is the case, for which industries would it be 
permissible, and what are the restrictions, if any? 
(v) Competition and consumer protection policy 
(a) Competition policy Page 100, paragraph 208 
China is currently amending the "Law Countering Unfair Competition".  Could it please elaborate further on the following: 
a) What are the main reasons for amending the law, and what might be included in the 
amendment? 
b) Would the enforcement of this law conflict with the new "Anti-monopoly Law", 
which will enter into force on 1 August, 2008 ?  Is there any coordination echanism in 
place between the new competition authority established under the Anti-monopoly 
Law and the SAIC, should conflict arise? 
IV. TRADE POLICIES BY SECTOR 
(1) I NTRODUCTION  
Page 109, paragraph 3 
Could China please elaborate further on its measures relating to domestic price control and 
procurement by the State? WT/TPR/M/199/Add.1 
Page 138  
 
  Page 113, Box IV.1 and paragraph 18 
We note that, in 2004, entering a new era, the Chinese government introduced direct subsidies to 
farmers, began to phase out agricultural taxes, and started subsidizing seed and machinery purchases.  
Could China please provide further information on its  measure relating to direct subsidies, as 
mentioned in paragraph 18? 
(3) E
NERGY  
(i) Introduction 
Page 119, paragraph 44 
As indicated in the Report, policy-making and the regulation of the energy sector in China is scattered 
between several institutions, and thus, policy-making,  implementation, supervision and regulation in 
this sector are uncoordinated and weak.  Although th e NELG was created in May 2005 to deal with 
the institutional weaknesses, it seems to have  had no impact on policy formulation and 
implementation.  
Could China kindly inform us of any measure th at has been taken to tackle this problem? 
(ii) Key sub-sectors 
Page 120, paragraph 50  
As indicated in the Report, despite attempts to promote competitiveness, four State-owned companies 
continue to dominate the Chinese oil market.   
We would be interested in knowing how the Ch inese government is dealing with the stifling 
competition in the oil sector, which may be caused by state-owned monopolies.  
Page 120, paragraph 51  
The Report mentions that in 2005 the State Counc il issued guidelines allowing private companies to 
invest in previously restricted sectors dominat ed by SOEs, like the oil industry. Moreover, the 
"Catalogue of Encouraged Foreign Investment Indu stries of 2007" allows for foreign investment in 
this area.  It seems, however, that oil explor ation continues to be dominated by SOEs.   
Has China’s government adopted any methods or does it provide any incentives aimed at increasing 
private or foreign investments?  
Pages 120 and 122, paragraphs 51 and 58 
It appears that the procedures for obtaining approval,  licensing and permission to explore for oil have 
not been provided to the Secretariat of the WTO.  Nor has any information been provided regarding 
the requirements and procedures for obtaining permits and licences to explore coal.  
As the field of energy exploration in China app eals to many foreign investors, could China please 
provide further information on the procedur es and/or requirements for exploration?   WT/TPR/M/199/Add.1 
 Page 139 
 
 
  Page 121, paragraph 54 
The Report indicates that processed oil products are pr iced based on the average price of international 
crude, plus "adequate" profit for re fineries as determined by the NDRC, import tariffs and cost of 
transportation.   
How does the NDRC determine the "adequate" profit?  Are there any specific procedures and criteria 
for setting the prices?  
Page 125, paragraph 72 
Transmission and distribution tariffs continue to be  fixed by the NDRC and take into consideration 
factors such as reasonable compensation of cost, reasonable determination of returns, and fair sharing 
of the burden.   
When the Government formulates the tariffs, is there any public mechan ism involved, and what  is the 
actual procedure?  
Page 126, paragraph 73 
End user tariffs are determined taking into account th e cost of electricity generation, the electricity 
loss during transmission, electricity transmission prices, and the "cost of government fund".   
Could China please explain for us the "cost of government fund"?  
(5) SERVICES 
(ii) Commitments under the General Agreement on Trade in Services 
Page 137, paragraph 123  
We note that, with regard to national treatment , China has scheduled a horizontal limitation under 
mode 3 that covers all existing subsidies to domes tic service suppliers in audiovisual, aviation, and 
medical services.  
Would China be able to share with us more de tailed information on the subsidies in audiovisual, 
aviation, and medical services? 
(iii) Financial services 
(b) Banking – foreign banks Page 146, paragraph 150 
As indicated in the Report, foreign commercial banks that have total assets of not less than 
US$10 billion at the end of the year preceding the application can apply for the establishment of a 
wholly foreign-funded bank (subsidiary), but a fore ign bank wishing to establish a branch must have 
total assets of not less than US$20 billion at the end of the year preceding the application. The 
minimum asset requirements are hi gher for establishment of branches than for locally incorporated 
entities, taking into account that branches ar e not allowed to conduct retail business. 
 
Could China please explain the necessity for imposing such high restrictions on the establishment of 
branches of foreign banks, and inform us as to wh ether or not it plans to lift such restrictions? WT/TPR/M/199/Add.1 
Page 140  
 
  Page 146, paragraph 152 
As indicated in the Report, wholly foreign-f unded and Chinese-foreign joint-venture banks may 
engage in the same business operations as domestic  commercial banks, both in local and foreign 
currency. Nonetheless, branches of foreign banks cannot supply bank cards; they may only receive 
time deposits of not less than Y 1 million each from Chinese citizens within China.  
According to Article 31 of the Regulation on the Administration of Foreign-funded Banks, 
promulgated by China on 11 November, 2006, a bran ch of a foreign bank in China may not provide 
RMB business to Chinese citizens with in China, with the exception of taking time deposits of not less 
than Y 1 million each from Chin ese citizens within China.  
However, according to China’s Services Schedule acco mpanying its Protocol of Accession, foreign 
financial institutions will be permitted to provide services to all Chinese clients within five years after 
China’s accession to the WTO. 
Would China remove the above-mentioned restric tions on foreign banks in accordance with the 
commitment in its Services Schedule accompanying the Protocol of Accession? 
(viii) Legal services 
Page 183, paragraph 307 
a) Is it possible for China to inform us of  the timing of when foreign lawyers will be 
allowed to employ, or become partners of, Chinese national registered lawyers?  
b) When will the restriction on foreign lawyer s working in representative offices that they 
must reside in China for at least 6 months per year, be lifted? 
(x) Tourism  
Page 188, paragraph 331 
Foreign-invested travel agencies are not a llowed to conduct outbound travel business.  
Would China consider removing this restriction in the foreseeable future? 
COSTA RICA
 
I. EL ENTORNO ECONÓMICO 
4) P RINCIPALES CUESTIONES DE REFORMA ESTRUCTURAL  
i) Políticas ambientales 
En el informe se indica que las autoridades  han tomado diversas medidas para frenar el deterioro 
ambiental, como la reducción de las desgravaci ones del IVA aplicado a las mercancías exportadas 
cuya producción se considera que consume gran cantid ad de energía. (Párrafo 21) Al respecto podrían 
aclararnos lo siguiente:  
1. ¿Cómo se aplica qué la política de desgravación del IVA? 
 2. ¿Cómo se determina cuando una mercancía exporta da se elabora a partir de una producción 
que consume gran cantidad de energía? 
 
3. ¿Cuáles son los parámetros de medición para determinar el consumo de gran cantidad de 
energía?  WT/TPR/M/199/Add.1 
 Page 141 
 
 
  4. ¿Se realiza alguna diferenciación a nivel de par tida arancelaria para incluir las mercancías 
exportadas que proviene de una producción que consume gran cantidad de energía?  5. ¿Aclarar los efectos de esta medida en el co mercio y como combinan su fijación arancelaria 
en relación con los compromisos asumidos en la OMC y su normativa?  
 
6. ¿Existe algún otro motivo o criterio  ambiental ap arte del consumo de energía, por el cual se 
excluye la desgravación de un bien?  El informe establece como una de las medidas para  frenar el deterioro ambiental, las políticas de 
concesión de créditos a proyectos ecológicos ("créd itos verdes") que ofrecen créditos en condiciones 
preferentes a las iniciativas respetuosas con el medio ambiente.   7. ¿Cuáles son los criterios utilizados para el  otorgamiento de este tipo de créditos? 
 
8. ¿Qué tipo de beneficios ofrecen a quienes estén  interesados en utilizar estos créditos como 
financiamiento?  
iv) Mercado laboral 
 
Se menciona en el informe la existencia de  un registro de trabajadores ("hukou") que sigue 
diferenciando entre trabajadores urbanos, rurales, temporales y permanentes. Se indica que los 
trabajadores registrados en zonas rurales están en situación de desventaja en relación a los de zona 
urbana, ya que sus empleadores no cubren los der echos de los trabajadores relacionados con la 
atención sanitaria, vivienda y educación de sus hijos.  (Párrafo 33) Al respecto podrían aclararnos lo 
siguiente: 
 
9. ¿Los derechos laborales de los trabajadores se diferencian, dependiendo de  la forma en que se 
encuentren registrados?  
 10. Si existe diferenciación en sus derechos, ¿cuáles son las razones de realizar esa diferenciación 
en el otorgamiento de derechos laborales? 
 
5) CONTECIMIENTOS EN MATERIA DE COMERCIO 
 iv) Inversión extranjera 
 11. ¿En qué consiste el tratamiento impositivo preferencial que ofrece China a las empresas 
extranjeras? (Párrafo 43)  
III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS 
2) M
EDIDAS QUE AFECTAN DIRECTAMENTE A LAS IMPORTACIONES  
vii) Medidas comerciales especiales 
 
12. ¿Podrían explicarnos en qué consisten las normas sobre acceso y divulgación de información 
en investigaciones de daño a la rama de pr oducción? ¿Aplican dichas normas únicamente a las 
investigaciones sobre daño realizadas por la Oficina de Investigaciones sobre la Existencia de Daño? 
Si es así, ¿qué normas de protección de la informaci ón clasificada aplicaría a las investigaciones sobre 
dumping realizadas por la Oficina de Comercio  Leal de Importación y Exportación (BOFT)? 
 13. En el informe se menciona que en el período de estudio, China inició 39 nuevas 
investigaciones antidumping. ¿Podrían citarnos si en alguno de esos ca sos se aplicaron medidas 
provisionales con un plazo de aplicación superior a cuatro meses con el fin de determinar si un WT/TPR/M/199/Add.1 
Page 142  
 
  derecho inferior al margen de dumping sería suficiente para compensar el daño a la rama de 
producción nacional? (Párrafo 61)  14. En el informe se menciona que las decisiones de las autoridades en materia de salvaguardias 
no pueden recurridas. ¿Podrían explicarnos porqué l as decisiones de las autoridades en materia de 
medidas de salvaguardia no pueden ser recurridas mi entras que las decisiones en materia de medidas 
antidumping y compensatorias si se pueden recurrir? (Párrafo 62)  
viii) Normas y otras prescripciones técnicas 
a) Normas, certificación y acreditación 
 15. China menciona que la Administración de  Normalización de China, es el organismo 
encargado de la normalización. Como tal, ha acepta do y aplica el Código de buena conducta para la 
elaboración, adopción y aplicación de normas, conten ido en el anexo 3 del Acuerdo sobre Obstáculos 
Técnicos al Comercio de la OMC? (Párrafo 66). 
 
16. De acuerdo al sistema regulatorio de Chin a, existen normas voluntarias y normas obligatorias 
(entendidas como reglamentos técnicos). De estas normas obligatorias que porcentaje ha sido 
notificado al Comité de Obstáculos Té cnicos de la OMC? (Párrafo 70) 
 17. ¿Cómo se da la aplicación de las normas obligatorias nacionales, sectoriales y locales en caso 
que el contenido de las mismas esté referido a un mismo producto o gru po de productos? ¿Cuál 
prevalece para efectos de los productos que son importados de terceros países? (Párrafo 70) 
 18. ¿Dónde se pueden encontrar las regulaciones que  deben cumplir los productos de terceros 
países para poder ser importados y comercializados  en China? ¿Existe alguna institución que se 
encargue de dar dicha información? (Párrafo 70) 
 19. China menciona que aplica el "Plan de Acci ón de Alimentos Seguros" como medio de velar 
por la seguridad de los alimentos, siendo necesario  que los productores de alimentos soliciten permiso 
a las autoridades competentes de inspección de la  calidad para poder comercializar sus productos, 
incluida la inspección de las instalaciones. ¿Cómo ap lica este procedimiento para el caso de productos 
alimenticios importados de ter ceros países? (Párrafo 75) 
 20. ¿Cómo aplica China el requisito de la ma rca de certificación obligatoria (CCC) en los 
productos importados? ¿Se verifica en frontera? ¿Qué sucede si el producto no cuenta con dicha marca? (Párrafo 77) 
 
21. La Administración de Certificación y Acreditación (CNCA) encargada de certificación y acreditación reconoce las certificaciones, pruebas y exámenes realizados por organismos extranjeros mediante el sistema de reconoc imiento multilateral. ¿Quiere decir esto que China reconoce los 
acuerdos de reconocimiento mutuo (MLA) por ejemplo, en el marco de la Cooperación Internacional 
de Acreditación de Laboratorios (ILAC)? (Párrafo 79) 
 
22. ¿Utiliza China el sistema de evaluación de la conformidad de primera parte, conocido 
también como Declaración de Conformidad del Prov eedor? Si es así, ¿en qué productos se permite el 
uso de la misma? (Párrafo 80)  4) M
EDIDAS QUE AFECTAN A LA PRODUCCIÓN Y AL COMERCIO  
v) Política de competencia y protección de los consumidores 
 
23. ¿Podrían indicarnos si la nueva ley antimonopolio que entrará a regir en agosto de este año, será de aplicación nacional a todos los agentes económic os que operan en China, es decir, tanto a las  WT/TPR/M/199/Add.1 
 Page 143 
 
 
  empresas del sector público como privado? ¿Se encu entran cubiertos bajo esta ley los monopolios y 
las empresas estatales con derechos excl usivos otorgados por el Gobierno? 
 24. Según se menciona en el informe, las fusion es y adquisiciones por encima de cierta escala 
requerirán una aprobación ex-ante por parte del Co nsejo de Estado, no obstante esta escala no se 
especifica en la ley. Al respecto, ¿se prevé el establecimiento de una escala determinada para la 
aprobación de las fusiones y adquisiciones o quedará  a criterio de la Autoridad competente la 
determinación de la misma? (Párrafo 213)  25. En el informe se establece que la inclusión de los monopolios administrativos dentro de la 
nueva ley antimonopolio podría aumentar las dificult ades para aplicar dicha ley, ¿podrían explicarnos 
qué se entiende por monopolios administrativos?, ¿exi ste normativa específica para regular este tipo 
de monopolios a nivel local que pueda ir más allá de lo contenido en la nueva ley antimonopolio? 
(Párrafo 213)  
26. De acuerdo con el informe, algunas actividades relacionadas con la agricultura se encuentran 
fuera del alcance de la nueva ley antimonopolio, ¿p odrían indicarnos cuáles s ectores específicos no se 
encuentran cubiertos dentro de dicha ley? (Párrafo 214)  
IV. POLÍTICAS COMERCIALES POR SECTORES  
5) S
ERVICIOS  
i) Visión general  
27. ¿Cuáles servicios continúan en manos de empresas de propiedad estatal? ¿Existe algún 
programa para liberalizar esos servicios? (Párrafo 121)  ii) Compromisos en el marco del Acuerdo General sobre el Comercio de Servicios 
 
28. ¿Existen límites máximos a la participación extranjera en el capital social de empresas de servicios?, si la respuesta es afirmativa, ¿Cuáles son esos límites y en cuales sectores? (Párrafo 123)  
iii) Servicios financieros 
a) Sistema bancario  
29. ¿Cuáles son las principales diferencias norm ativas que aplican para los bancos nacionales y 
los bancos privados extranjeros? (Párrafo 138)  
30. ¿Existen limitaciones a las operaciones comerciales que puedan realizar los bancos 
comerciales extranjeros? (Párrafo 142)  31. ¿Cuál es la razón de que el mínimo de activos  exigido para el establecimiento de sucursales 
de bancos extranjeros sea superior al exigido pa ra entidades constituidas localmente? (Párrafo 151) 
THAILAND
 
General questions 
 
Customs procedures 
 
1. Fruits are seasonal products the prices of which tend to fluctuate from ti me to time. However, 
under China’s current customs practices, steady pri ces used in valuation are steady. We would like 
China to elaborate why the accepted customs value of fruits are steady. What is the current method of 
customs valuation for importing seasonal products?  WT/TPR/M/199/Add.1 
Page 144  
 
  2. Imports of Thai fruits which transit via La os and Vietnam cannot obtain import permits. We 
would like China to clarify policy or criteria for the issuance of import permits for goods in transit 
through a third country.  
Services:  Mode 4 
 3. What is China’s policy on the recognition of  certification of skills such as spa services 
provider issued by competent authorities of other countries?  
WTO Secretariat Report (WT/TPR/S/199) 
 
III. TRADE POLICIES AND PRACTICES BY MEASURES 
(2)(iv) Indirect taxes affecting imports 
VAT on agricultural products 
Paragraph 40 on page 56 and paragraph 20 on page 114 
 
4. The Secretariat Report states that "Agricu ltural products sold by farmers directly to 
consumers are exempt from VAT, while imports of like products are subject to VAT."  Could China 
please elaborate on this practice?  
 
IV. TRADE POLICIES BY SELECTED SECTORS 
(2)(iii) Agriculture policy instruments  
State trading enterprises 
Paragraph 23 on page 114 
 
5. According to the Report, "The Government still has some influence on imports (and exports) 
through the state trading system, which remains in  place to ensure the stable supply and prices of 
specific products" such as grains, sugar, tobacco, co tton and chemical fertilizers.  In this regard, 
Thailand appreciate if China could: 
 
5.1 Explain in detail how state trading enterprises (STEs) administer imports of these 
products; 
5.2 Provide import level data for these products for the most recent 3 years and; 5.3 Explicate STE price intervention practices in light of China’s WTO domestic support 
obligations. 
 
VAT rebate for the exportation of agricul ture products (paragraph 30 on page 115) 
 
6. Paragraph 30 states:  "Exporters of agricultura l products are entitled to VAT rebate at the time 
of exportation; rebates vary according to commodity and are often lower than the statutory VAT rate, 
which results on a levy on exports.  The VAT on agricultural goods is 13%, but the "usual" export rebate rate for agricultural goods is 5%.  Export rebates for products containing agricultural inputs 
were increased in 2007 from 5% or 11% to 13% as to promote the use of agricultural products." 
 
6.1 Could China please indicate whether it h as a mechanism to monitor and control the 
level of VAT rebate to ensure that the expor t rebate is in line with China’s bound level 
of export subsidies?  If the mechanism is already in place, could China please explain 
how this mechanism is operated? 
6.2 We would also appreciate it if China could clarify these VAT rebates in relation to 
SCM obligations. 
  WT/TPR/M/199/Add.1 
 Page 145 
 
 
  III. TRADE POLICIES AND PRACTICES BY MEASURES 
(2)(viii)  Standards and other technical requirements 
Standards Paragraph 72 on page 64 
 
7. We note from the Secretariat Report that Ch ina is a Member of the UNECE 1998 Agreement, 
which is a Global Agreement.  As such, members s hould be under an obligation to comply with the 
Agreement’s regulations on technical inspection.  However, UNECE standards have not yet been 
directly implemented for China’s standards for automobiles.  We would appreciate details on why 
China has incorporated only some technical co ntents of the UNECE standards into its own 
compulsory certification standards.  Could Chin a elaborate on which parts of the UNECE technical 
content are not included in China’s certification standards, and whether the implemented technical 
content is enforced any more strictly than UNECE standards?  And if so, how?  
Food standards 
Paragraph 74 on page 65 
 
8. According to the Report, "China has prom ulgated over 1,800 national standards concerning 
food safety, and more than 2,900 sectoral standards for the food industry."  We would appreciate it if 
China could clarify and ensure that national sta ndards and sectoral standards are not more trade-
restrictive than necessary. 
 
Certification and accreditation Paragraphs 77-81 on page 66 
 9. According to the Report, Chin a has administered two different product certification systems – 
the Compulsory Product Certification System and the China Compulsory Certification (CCC) mark, and the China Quality Certification Centre (CQC) Voluntary Product Certification System (the CQC 
mark).  These two systems cover 22 groups consisti ng of 159 subcategories of products for which the 
CCC mark is required, and around 500 subcategories of  products that are not covered by CCC.  We 
understand this to mean that over 600 subcategories of products to be exported to China from third 
countries must be granted at least one of the tw o certification marks before entering the Chinese 
market.  We would appreciate it if China could clar ify and ensure that these two certification systems 
do not act as unnecessary impediments to trade.  We would further like to k now whether products 
which fail to conform to the CQC voluntary pro duct certification system would be treated less 
favourably than those that do conform. 
 
Labeling 
Paragraph 93 on page 69 
 
10. With regard to the labeling requirements stipulating that labe ls must be written in Chinese and 
state all information related to the product and the manufacturer, we would like China to clarify 
whether the labels can be written in more than one language, i.e. Chinese and English.  Requiring 
labels not to be written in more than one language may not be cons istent with Article 2.2 of the 
TBT/WTO Agreement which stipulates that technical regulations shall not be more trade-restrictive 
than necessary to fulfill a legitimate objective.  WT/TPR/M/199/Add.1 
Page 146  
 
  II. TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVE 
(6) F
OREIGN INVESTMENT REGIME  
(i) Recent developments in FDI policy Paragraph 71 on page 38 
 
11. Regarding MOFCOM's "Interim Measures c oncerning Complaints from Foreign-invested 
Enterprises" that provides a channel for FIEs and fore ign investors to file complaints when their rights 
have been impaired by relevant authorities, it woul d be very useful if China could explain step-by-
step how the measure is implemented, including the ti meline of each procedural step). Is this measure 
applied by both the central and local governments?  Legislative framework and procedures Paragraph 76 on page 40 
 
12. We understand paragraph 76 of the Secretariat Report to mean that foreign investment in the 
restricted category may be permitted to import cap ital equipment duty-free, if export sales are over 
70% of total sales of the product.  Is our understa nding correct?  If so, Thailand would appreciate it if 
China could provide the number and types of the pr ojects in the restricted category that currently 
benefit from the duty-free imports of capital equi pment. Does China cons ider the export sales 
requirement to be consistent w ith its obligations under the WTO SCM agreement?  Does China have 
any plans to abolish this requirement? 
III. TRADE POLICIES AND PRACTICES BY MEASURES 
(3)(viii)  Export promotion and marketing assistance  
Tax and non-tax measures 
Paragraph 138 on pages 79–80 
 
13. The Secretariat Report indicates that after the income tax holiday period has expired, if in any 
given year an FIE exports over 70% of the year's  production value, it would be eligible for an 
enterprise income tax at half the rate specified in the Income Tax Law for Enterprises with Foreign 
Investment and Foreign Enterprises. Thailand woul d like to know how long the income tax reduction 
benefit for an FIE exporting over 70% of the y ear’s production value would last.  Does China 
consider the export sales requirement to be cons istent with its obligations under the WTO SCM 
agreement?  Does China have any pl ans to abolish this requirement? 
 
PAKISTAN
 
 
1. As per Para 13 (page 62) of the Secretariat Report, the insurance costs are calculated as 0.3% 
of the sum of cost and freight, for good imported by land, air or sea; and as 1% of the price for goods 
imported by rail or road'.  Would China like to clarify: 
 
 a) The difference between goods imported by 'l and' and goods imported by 'rail or road'? 
 
 b) The justification and methodology to reach at two different rates for different modes 
of transportation of imports? 
 
 c)  The expression used is 'cost and freig ht' for goods imported by land, air or sea 
whereas the terms used for goods imported by rail or road is 'price for the goods'. Are 
these two different concepts or are being used interchangeably? 
 
2. China has recently taken some measures to  deregulate the grains market starting from 
June 2004.  Could China share the experience so fa r and the tools used to liberalize grain market? 
  WT/TPR/M/199/Add.1 
 Page 147 
 
 
  HONDURAS  
 Párrafo 10 
 
 1. ¿Cuanto tiempo tarda el regi stro de importadores y exportadores? 
 2. ¿Es dicho registro automatizado o manual?  3. ¿Que instituciones están involucradas en el  registro y si están interconectadas entre 
si? 
 4. ¿Debe ser presentada toda la document ación mencionada para todos los regimenes 
aduaneros? 
 5. ¿Cómo parte del procedim iento aduanero, en que casos se exige el certificado de 
origen? 
  6. En que consiste el manual sobre trafico de perfeccionamiento? 
 7. Es el procesamiento de declaraciones de importaciones, exportaciones o tránsito 
totalmente electrónico o existen todavía procesos manuales? 
 8. Existe un costo para el procesamiento  electrónico o manual de la declaración? 
 
Párrafo 11 
  8. A que se refiere cuando se menciona que las mercancías pueden ser transportadas 
como mercancías en deposito? 
 9. Cual fue la metodología para determinar  el tiempo de despacho en aduana de las 
mercancías en transito y si es publicado en Internet? 
 10. Cual es el tiempo promedio de levante de mercancías en regimenes de importación y 
exportación? 
 
Párrafo 12 
 
 11. A que otra instancia se puede recurrir un a vez agotadas el examen administrativo y el 
recurso al Tribunal del Pueblo? 
 12. Cuando expira el Reglamento provisional s obre el trámite de recursos en apelación en 
materia aduanera y cuando se tendrá un reglamento permanente? 
 13. Que elementos se toman en consideración para autorizar la prorroga de 30 días? 
 WT/TPR/M/199/Add.1 
Page 148  
 
  REPLIES PROVIDED BY CHINA
 
 
I. ECONOMIC ENVIRONMENT 1 
(1) I NTRODUCTION  1 
(2) R ECENT ECONOMIC DEVELOPMENTS  4 
EC Question 2 Chinese government promotes investment in manufact uring, which has grown much faster than 
services and agriculture. Labour productivity in agricultu re is only one-fifth of that in the rest in the 
economy. Could China provide information on whethe r enhanced investment in agriculture (through 
technology, know-how) is a realistic option in enhancing its agricultura l output this in view of rising 
food prices and related inflationary tendencies? 
Answer
 
As a large developing country with a population of  1.3 billion, China has been facing an extremely 
formidable challenge to raise 22% of the world population with only 7% of the world arable land. The rising food price further rang an alarm bell for China about the need to give more emphasis 
on agricultural production, which requires increa se in investment, improvement in productivity 
and growth in grain output, in order to miti gate the negative impact brought about by the world 
food price fluctuations on domestic market.  
To increase the unit production level through scien ce and technology is one of the options to 
develop food production in China. Under the speci al circumstance when China’s arable land is 
diminishing, it is of vital importance to increa se food production through enhanced investment in 
science and technology.  
The extensive application of technology in agricul tural production has improved the efficiency of 
grain production and increased the yields (output). Take rice as an example, the yield of ordinary 
rice is only 370 kilos per mu (15 mu=1 hectare) and yield of the hybrid rice is 460 kilos per mu, 
while the yield of super rice can be as high as 600 kilos per mu. Since 2001, China began to promote super rice growing covering an area of over 60 million mu. According to our estimate, the 
total yields are expected to increase by at least 30 billion kilos if the actual yield per mu.is increased 
by 60 kilos. 
A project called to promote harvest through techno logy was initiated and implemented since 2004, 
which covers 11 major crop prod ucing provinces, and includes the establishment of 10,000 mu 
designated as the core experimental fields, 1 m illion mu production demonstration areas, and the 
10 million mu technology outreach areas, coveri ng a total of 125 million mu nation wide. The 
implementation of this project will significan tly increase the food production capacity. In addition, 
the wider application of machinery in agricultu ral production and the technologies such as 
"proper use of fertilizer based on soil tests" are also helpful to increase food production. 
It should be noted that the rate of technical contribution to agricultural production still remains 
low, and the potential to increase th e contribution is great. It is  estimated that the rate of 
contribution of technology to production is only 45% in China, 20-30 percentage lower than that in 
developed countries. And the ratio of agricultural t echnicians to farmers is only 0.15%, less than 
1/7 of the ratio of Japan. Besides, the promotion of  technology is also weak, and the rate of results 
from scientific research converted into productivity is only 30%. The Chinese government will continue to increase support to agriculture in line with the disciplines defined in the WTO 
Agreement on Agriculture and enhance food pr oduction through science and technological 
advancement.  WT/TPR/M/199/Add.1 
 Page 149 
 
 
  (3) M ACROECONOMIC POLICIES  9 
(i) Monetary policy 9 
United States Question 1 
In paragraphs 11 through 15 of Part I, the report describes China’s exchange rate regime, which has 
been classified by the International Monetary Fund as a "crawling peg"  since August 2006. Among 
other things, the report explains that "[a] more flex ible exchange rate regime could enable China to 
operate a more independent monetary policy, wh ich would be better suited to achieving a low and 
stable rate of inflation in both product and asset markets and allow market forces to assume a greater 
role in determining interest rates."  The report also  explains that "[a]n appreciation of the exchange 
rate could increase domestic consumption insofar as it reduces import prices and thereby stimulates 
consumption of imported goods . . . ."  
 a. Please describe China’s current plans fo r moving toward a more flexible exchange 
rate regime. 
 b. It is unlikely that a completely freely fl oating exchange rate can be achieved with the 
current set of regulations and controls in  place in China.  In China’s view, what 
reforms are still needed for China to be in  a position to adopt a completely freely 
floating exchange rate?  
Argentina Question 2 
With respect to China’s exchange rate system, this paragraph refers to a "man aged floating" exchange 
rate or a "crawling peg". Could China inform if it  plans to make more flexible the exchange rate 
regime? 
Answer  
1. China and the IMF have conducted many ro unds of consultations on the RMB exchange 
rate with no conclusions reached so far. The IMF did not fully solicit China’s opinions before 
issuing the 2007 Annual Report on Exchange Arra ngements and Exchange  Restrictions. We 
believe that as national conditions defer from country to country it is inherently rational for 
countries to adopt different exchange rate regimes.  The IMF’s methodology in analyzing exchange 
rate regimes lacks scientific ground and its conclu sions are open to doubts. China’s exchange rate 
regime has undergone a gradual process of evolu tion. Before 1994, China implemented a dual-
track system. In 1994, China merged its dual tr ack system and adopted a unified regime of 
managed floating exchange rate. Since the reform in July 2005, a managed floating exchange rate 
regime has been implemented based upon market supply and demand and adjusted in reference to 
a basket of currencies.  Presently, China’s exchange rate regime is based on several factors: market 
supply and demand is the primary consideration, th e reference to a basket of currencies comes to 
the second followed by an emphasis that the fl oating exchange rate has to be managed. China 
holds that without a proper understanding of the actual decision making process but to make a 
judgment by simply looking at the aftermath mo vement of the exchange rate of RMB, is not 
scientifically viable to classify China’s exch ange rate regime into certain categories.  
2. After years’ of reform, the exchange ra te of RMB has floated in both directions: 
appreciation and depreciation. With enhanced flex ibility, its linkage with the exchange rates of 
major international curren cies is quite obvious. In July 2005 China introduced the managed 
floating exchange rate system and from then on to  the end of April, 2008, RMB had accumulatively 
appreciated by 18.2% against USD, and 9.3% against YEN. As of April, 2008, Bank for 
International Settlements (BIS) estimated that nominal effective exchange rate of RMB has WT/TPR/M/199/Add.1 
Page 150  
 
  appreciated by 6.5%, while the real effective exchan ge rate has appreciated by 12.2%. The range of 
RMB appreciation is higher than most currencies in cluding USD, Euro, YEN, Pound sterling and 
Singapore Yuan.  
China will continue to follow the principle to  pursue a proactive, manageable and progressive 
approach to steadily push forward the reform of the RMB exchange rate formation mechanism, 
give more play to the basic role of market su pply and demand in exchange rate formation and 
further enhance exchange rate flexibility so that the RMB exchange rate can maintain its stability 
at rational and balanced levels. 
Switzerland Question Para. 5 
The Secretariat’s report mentions that inflation as measured by the consumer price index (CPI) has 
been rising, reaching 4.8% in 2007. Could the Ch inese authorities provide the latest available figures 
as well as their inflation projections and expl ain how monetary policy reacts to these price 
developments? 
Answer
 
According to figure published by National Sta tistics Bureau, CPI in April 2008 was increased by 
8.5% comparing with the same period last year.  
With the mounting pressure of consumer price increase, the Chinese government adjusted the 
"Prudent Monetary Policy" of last 10 years to "Tightened Monetary Poli cy", in order to prevent 
rapid economic growth from turning into overh eating and keep structural price increases from 
turning into significant inflation. The People’s Bank of China took a moderate tight and tightened monetary policy, further strengthened liquidity management, increased the intensity of open 
market operations, and took the special treasu ry bond repurchase operation, raised RMB deposit 
reserve ratio 10 times successively, raised foreign  exchange deposit reserve ratio a second time, 
raised saving and loan’s interest rate of the financial institutions for 6 times, strengthened the 
credit risk notice and correct guidance to over-hea ting industries like estate industry. In 2008, the 
PBC again raised RMB deposit reserve ratio 4 times, at the current level of 16.5%.  
(ii) Fiscal policy  11 
(4) M
AIN STRUCTURAL REFORM ISSUES  13 
(i) Environmental policies 13 (ii) Tax reforms  13 
 
United States Question 5 
In paragraph 22 of Part I, the report states that Ch ina is trying to move from a production-based value-
added tax (VAT) system to a consumption-based VAT system.   
a. Please explain how the VAT is calculated under the pilot projects that use a 
consumption-based VAT system and how this calculation differs from the VAT calculation under China’s current production-based VAT system.   
Answer
 
The common method of calculation for VAT is: dutiable VAT=output VAT tax- input VAT tax. The main difference between production-based VA T and consumption-based VAT is that for 
production-base VAT, purchase of fixed assets by en terprises cannot be included in purchase tax,  WT/TPR/M/199/Add.1 
 Page 151 
 
 
  which will be deducted from input VAT tax while  for consumption-based VAT, purchase of fixed 
assets is included in input tax.  
(iii) Financial sector reform 14 
(iv) Labour market 16 
United States Question 6 
In paragraph 33 of Part I, the report states that "[c]ertain employment restrictions under the ‘Hukou’ 
(worker registration) system have been relaxed to  promote the development of rural areas and address 
income inequality."  The accompanying footnote 81, however, only provides one example to support 
this statement, i.e., overseas graduates returning to China are exempt from the worker registration 
requirements.  Because these graduates are typically sought after by urban employers offering high salaries and good benefits packages, the relaxation on the worker registration requirements for this 
particular population of job seekers would not seem to address the issues of rural development and 
rural-urban income inequality.  Indeed, it would seem to intensify the urban-rural income inequality.  
Please explain what other steps China has taken to re lax the Hukou system.  Does China have plans to 
further reform the Hukou system and relax restrictio ns on rural worker migrat ion?  What is China’s 
timetable?  Please explain. 
Answer
 
The local governments in different parts of China are reforming the household registration system 
commensurate with the level of economic developments in their respective localities. For example, 
Shenzhen City and Jiangsu Province have abolished rural household registration requirement and 
implemented a unified resident household regis tration system. However, due to  significant 
regional differences, there is no uniform timetable across China.     
United States Question 7 In paragraph 34 of Part I, the report states that "[ t]he All China Federation of Trade Unions (ACFTU) 
and the Central Government have made improv ed working conditions for migrant workers an 
important policy goal."  The report notes that the Ministry of Labour and Social Security issued 
regulations that provided specific rules for the cons ultation process for collective contract bargaining 
in January 2004.  However, it is the United Stat es’ understanding that these regulations became 
obsolete when the new Labour Contract Law went into  effect on 1 January 2008.  To date, China has 
not issued any implementing regulations for the Labour Contract Law.  Please explain how the absence of implementing regulations for the Labour  Contract Law is affecting the consultation 
process for collective contract bargaining.  Please also  explain how China is attempting to address this 
situation. 
Answer
 
1. Rules and regulations promulgated by the former Ministry of Labor and Social Security 
spells out the consultation process for collective contract bargaining include: (1) Trial Measures on 
Collective Wage Consultation promulgated in 2000; (2)Collective Contract Provisions promulgated 
in May 2004; (3) Circular of Further Promotion of Collective Wage Consultation issued in 
February 2005 jointly with the All China Federation of Trade Unions (ACFTU) and China Enterprise Confederation/China Enterprise Direct ors Association; (4) Opinions on Conducting 
Regional and Sectoral Collective Consultations issued in 2006. The implementation of these rules 
and regulations has made significant headway , with expanded scope of collective wage 
consultation and increasing number of enterprises engaged in such consultation. According to the WT/TPR/M/199/Add.1 
Page 152  
 
  statistics of ACFTU, by the end of 2007, 343,000  wage-specific collective contracts had been 
signed, involving 626,000 enterprises and covering 39.686 million workers.  
2. As contained in the Labor Contract Law that came into force on 1
st January 2008, 
Section 1 of Chapter V titled "Collective Contract" a ffirms the provisions on collective consultation 
topics, representatives election and consultation process in the aforementioned regulations and 
normative documents. These legal instruments remain  effective after the Law’s entry into force. 
Switzerland Question Labor mobility is essential to reduce income in equality and to increase labor productivity. The 
agriculture sector (11.7% of GDP) still represents 39.9% of total employment (Table I.1). According 
to the Secretariat's report, the system, which di stinguishes between urban, rural, temporary and 
permanent workers, is a major impediment to la bor mobility. Do the Chinese authorities intend to 
abolish restrictions on settlement? 
Answer
 
Currently, many local governments in China have provided support to the migrant population 
including the rural migrant workers in terms of  employment, compulsory education for their 
children, social security, health care, as well as license and certificate issuance to promote their 
active integration into the local community.   
With regard to the reform of household registr ation system, please refer to the reply to US 
Question 6.  
Chinese Taipei Question 
It would be appreciated if China could please provi de details of its policy, rules and regulations 
regarding natural persons seeking to work in China. 
Answer  
Natural persons seeking to work in China shou ld follow the Rules for the Administration of 
Employment of Foreigners in China. According to the Rules, foreigners are subject to employment 
licensing system if they want to be employed in  China. Foreigners seeking employment in China 
must have approval from the Chinese government and obtain the People's Republic of China 
Employment License for Foreigners before they can be employed.  According to Article 6 of the 
Rules, the post to be filled by the foreigner recru ited by the employer "shall be the post of special 
need, a post that cannot be filled by any domestic candidates for the time being but violates no 
government regulations". 
(5) D EVELOPMENTS IN TRADE  17 
(i) Composition of merchandise trade 17 (ii) Direction of merchandise trade 19 
(iii) Composition of trade in services 19 
(iv) Foreign investment 19 (6) O
UTLOOK   22 
 
II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 24 
(1) I NTRODUCTION  24 
(2) I NSTITUTIONAL AND LEGAL FRAMEWORK  24 
(i) Institutional structure 25  WT/TPR/M/199/Add.1 
 Page 153 
 
 
  (ii) Legal structure and the legislative process 27 
(iii) Transparency 29 
United States Question 8 
In paragraphs 21-29 of Part II, the report examines the transparency of China’s trade regime.  
Transparency is one of the fundamental principl es of the WTO Agreement, and it is reinforced 
throughout China’s Protocol of Accession.  Overall,  the report concludes that  China’s trade regime 
remains "complex and opaque," leaving "scope for ad ministrative discretion and thus corruption."  In 
the United States’ view, systemic opacity also fru strates the efforts of foreign – and domestic – 
businesses to achieve all of the potential benefits of China’s WTO accession.  Transparency, unlike 
opacity, permits markets to function effectively a nd reduces opportunities for officials to engage in 
trade-distorting practices behind closed doors.  China’ s transparency obligations in many ways require 
a profound historical shift.  While China has made important strides to improve transparency across a 
wide range of national a nd provincial authorities, much work remains.   
 a. The United States welcomed the step China took in 2006 to adopt a single official 
journal for laws, regulations and other meas ures pertaining to or affecting trade in 
goods, services, trade-related intellectual property rights or the control of foreign 
exchange in 2006.  Since then, however, it appears that China has encountered difficulties in ensuring full participation by  all relevant government entities, in part 
because of the discretion afforded each agen cy as to whether or not a particular 
measure was trade-related.  In order to address this problem, has China considered 
adopting a single official journal for all laws  and regulations, regardless of whether or 
not they fall into the trade-related category?  
Answer
 
Pursuant to China’s accession commitment, China designated a journal, China’s Foreign 
Economics and Trade Gazette not in 2006, but ri ght after accession to publish all the laws, 
regulations, rules and other measures pertaining  to or affecting trade in goods, services, trade-
related aspects of intellectual property rights or  the control of foreign exchange. By May, 5th 2008, 
the Gazette had published over thousands such laws, regulations, rules and other measures.  
However, China didn’t commit to designate a single  journal to publish all the law, regulations and 
rules and China has no plan to designate such a journal.  
United States Question 8.b. 
The United States notes that China has not yet implemented a mandatory practice of providing 
advance notice and an opportunity for comment on proposed measures before they are finalized.  To 
date, notice-and-comment remains an optional prac tice in China.  When will China implement a 
reliable and predictable regime of notice a nd comment for all new or revised measures? 
Japan Question  13 
In China, system changes of trade regulations without sufficient well-known periods (e.g. expansion 
of exports of products "prohibite d under processing trade", a reduction of the VAT rebate rate, and an 
implementation of export tax etc.) have given a la rge adverse effect to the business environment. 
Please explain, on the basis of GATT Article 10,  what China measures or considers securing 
transparency in system changes of trade regul ations (e.g. implementing of public comment and 
securing of well-known periods before system chang es or securing of the moratorium after system 
changes etc) WT/TPR/M/199/Add.1 
Page 154  
 
  Canada Question 6 
Could China advise if there is a requirement for pr e-publication of trade-rela ted laws and regulations 
in the China Foreign Trade and Economic Gazette or  another publication? If there is no requirement, 
could China explain what mechanisms are used to  disseminate draft proposed rules for consultation 
with interested parties? 
Answer
 
There are some misunderstandings among memb ers with regard to China’s commitment and 
obligation on transparency. China commits in it s Accession Protocol that "China shall make 
available to WTO Members, upon request all Laws , regulations and other measures pertaining to 
or affecting trade in goods, services, TRIPS or the control of foreign exchange before such 
measures are implemented or enforced, and provide a reasonable timeframe for interested parts to 
raise suggestions to the authorities." At the same time, China did not make any commitment 
specifically on ways to solicit public opinions. Pr omulgating drafts of laws, regulations for public 
comments before implementation is not a necessary process according to China’s WTO 
Commitments or domestic regulations.  
The Law on Legislation, the Regulation on Procedures for Formulation of Administrative 
Regulation and the Regulation on Procedures fo r Formulation of Rules all include detailed 
provisions for ways and methods of public opini on solicitation before laws, regulations, rules and 
measures are published. For example, article 12 of the Regulation on Procedures for Formulation 
of Administrative Regulation stipulates that "the drafting of administrative regulations shall be 
based on in-depth investigation and study, learni ng from practices and experiences, and extensive 
consultations with agencies, organizations and c itizens. Public opinions ma y be collected through 
various means including symposia, presentations an d hearings." Article 15 of Regulation on 
Procedures for Formulation of Rules stipulates th at if government agencies, associations or 
citizens differ on draft rules or regulation that ha ve direct bearings on the interest of citizens and 
legal persons as well as other organizations, the dr aft should be made open to public and opinions 
from all aspects should be further solicited ". It  also stipulates that "hearings should be open to 
public, the competent authority for the drafting of the rules shall publish the time, place and content of the hearing in advance (30 days before the hearing)", "authorities, associations or 
citizens who participate in the hearing have the right to raise questions and express their own 
opinions in the hearing", "note in writing on the hearing should be taken, including the main point and rationale provided by the speaker" and "the competent authority for the drafting of the 
rule shall take into consideration of the opinions solicited in the hearing and should attach an 
introductory note to its handling and the rational of the handling of the solicited opinions when the draft rule is submitted for approval". 
Canada Question 7 
Would China advise what measures it is taking to in tegrate a more rigorous cost-benefit analysis and 
risk analysis into the development of new rules and regulations? Could China explain what central, 
coordinating mechanisms or institutions are equi pped to make this practice more widespread? 
Answer
 
In 2004, the State Council published the Compendium on Implementation of Strengthening 
Administering according to Law, which required the government to conduct cost-benefit analysis 
on new legislations, especially those economic laws . From 2006 to 2007, the legislative office of the 
State Council further defined the basic content, standards, methods and procedures of post-
legislation valuation, and conducted valuatio n on 12 regulations and 2 laws. Moreover, the  WT/TPR/M/199/Add.1 
 Page 155 
 
 
  legislative office of the State Council also instruct ed the local legislative agencies to conduct post-
legislation valuation on local government rules. The  Rule on Work of the State Council, published 
in 2008 by the State Council stipulates that valuatio n on regulations is required to be conducted 
after entry into force, and that whatever probl em is found, the regulation is to be revised. 
Therefore, post-legislation valuation report will  be recognized as an important basis for 
establishing and revising the related regulations.  
Canada Question 5 
The Secretariat Report notes that some aspects of China's trade policy regime remain complex and 
opaque. It also notes that China has recently adopted  various measures to enhance transparency in its 
public sector. We would appreciate China advising us on the details of the recent measures taken and 
what, if any, further measures are planned to improve transparency. 
Answer  
The Chinese government deems enhancing government tr ansparency to be one of the top priorities. 
In recent years, China has taken the following measures: 
1. China faithfully honored its accession comm itment. A 30-day period for comment between 
promulgation and entry into force of all laws, regula tions and rules is provided to any individual, 
enterprise and other WTO member. As the only o fficial journal designated by Chinese government 
to publish all the trade-related laws and regula tions, China’s Foreign Economic and Trade Gazette 
publishes 80 periodicals each year. As of May 5, 2008, 426 periodicals have been published. Digital 
version of the Gazette is published on MOFCOM’s website and is e-mailed to domestic and foreign 
users free of charge. The Chinese government has also established enquiry point and enquiry 
website at MOFCOM and AQSIQ to provide comprehe nsive and convenient inquiry service to any 
individual, enterprise and WTO members, and to honor notification obligation to WTO. Further 
more, the Legal Affairs Office of the State Counc il annually publishes Chinese-English version of 
collection of laws and regulations. Many local governments and ministries under the State Council 
also translate their rules and measures into English.  
2. China improves legislative procedures and en hances legislative transparency. In 2000, the 
Legislation Law came into effect, and thus trans parency was regarded as a basic principle for all 
legislative activities. In 2001, pursuant to the Legislation Law, the State Council promulgated the Regulation on Procedures for Formulation of Administrative Regulation and the Regulation on 
Procedures for Formulation of Rules, which contained detailed provisions for enhancing 
legislative transparency of the government. All th e ministries or agencies under the State Council 
have to conduct public opinion solicitation in wr iting or by way of symposium and international 
workshop to provide an opportunity for interested parties to offer their comments and opinions in 
drafting and reviewing of laws and regulations. In recent years, drafting of more than 30 laws and regulations undergo public opinion solicitatio n via media such as website, newspaper and 
television. It provides the public with many opportunities to offer comments and opinions, and 
legislative transparency is improved.  
3. China promotes information disclosure on th e work of the government and legal system of 
government information disclosure has been improved . According to the provisions by the central 
government regarding information disclosure on the work of the government, governments at all 
levels have been pushing forward information discl osure on the work of the government through a 
bulleton board, government communiqué, informatio n disclosure guidelines, public hearing, press 
conference and expert consultation. Governments at all levels establish their own websites and 
website of central government was established on Jan 1 2006. In May 1 2008, Regulation on WT/TPR/M/199/Add.1 
Page 156  
 
  Government Information Disclosure came into  force, which further enhanced government 
transparency. 
In addition, from Jan.1 2008, the standing committee of the NPC and the State Council further 
made their efforts in public opinion solicitation of drafting laws and regulations, which involved 
drafting of 2 laws and 15 regulations.  
Canada Question 8 Could China advise how it is working to improve c oordination between central and local governments 
in the design of new rules and policies? Is consu ltation with local authorities systematic or does it 
proceed on an ad hoc basis? Would China explain wh at measures are in place to ensure sub-national 
regulations meet WTO requirements? 
Answer
 
China committed in the first paragraph of its Accession Protocol in regard to the uniform 
administration of its trade regime that the .pro visions of the WTO Agreement and this Protocol 
shall apply to the entire customs territory of China, ……and the central government will ensure that the national laws, regulations, rules and other measures including those various regulatory 
documents issued by local governments are in li ne with the commitment specified in China’s 
Accession Protocol as well as its Working Party Report.  
According to the provisions concerning the legal st atus and application of domestic legislation as 
contained in the Legislation Law, the legal status of the Constitution is the highest, and the status of laws, regulations of the Central Government are higher than that of local regulations and rules. 
When laws of the State and regulations of the Ce ntral Government come into effect, contradictory 
provisions in local regulations and rules become nullified and void and shall be revised or phased 
out through legislative procedures in time by the promulgating authorities. 
According to the Regulations on Submission of Regulations and Rules for Record, all the 
regulations and rules shall be submitted to the St ate Council (the Legislative Affairs Office of the 
State Council) for filing and review within 30 days of promulgation. Inconsistencies identified in 
the filing and review process in time of the local regulations and rules that contradict laws and 
regulations of the Central Government as well as China’s WTO commitment and have them addressed through legislative procedures. Governme nt authorities, associations, enterprises or 
citizens can file a review application to the State Council when they think any rule contradicts laws 
or regulations. The Legislative Affairs Office of the State Council will process the application according to the related regulation. 
In addition, China has also intensified administra tive review (administrative reconsideration) and 
judicial review, which are embodied in the Law on Administrative Reconsideration and the 
Administrative Procedure Law and a series of judicial interpretations including the Rules on Certain Issues in the Trial of International Trade Related Administrative Cases in the trade area issued by the Supreme People’s Court. If a citizen, a legal person or any other organization feels 
that his/her or its lawful rights or interests ha ve been infringed upon by a specific administrative 
act of an administrative organ or its personnel, he/she or it may apply to administrative organs for 
administrative reconsideration or may bring a la w suit before court. Through these mechanisms, 
effective supervision are exercised over all administrative bodies and their staff to ensure that they strictly observe relevant laws, rule and regulations  in their work and achieve uniform application of 
the legislation   WT/TPR/M/199/Add.1 
 Page 157 
 
 
  (iv) Centre–subnational relations,local barriers to internal trade 31 
(3) F ORMULATION , ADMINISTRATION , IMPLEMENTATION OF TRADE POLICY  31 
(i) Main trade laws 31 (ii) Agencies involved in trade policy implementation 32 (4) T
RADE POLICY OBJECTIVES  32 
(5) T RADE AGREEMENTS AND ARRANGEMENTS  33 
 
EC Questions  5, 6 
Regarding ACFTA, Chinese authorities indicate that si nce the tariff reduction began, there has been a 
boom in imports and exports between China and ASEAN, and a narrowing trade imbalance. Could 
China provide figures for this increase in imports  and exports under the framework of ACFTA?  Could 
China describe the current level of liberalization under ACFTA, in both imports and tariff lines? Has 
China made any modification to its sensitive list and high-sensitive list of products under ACFTA? If 
so, which? 
Answer  
In July 2005, China and ASEAN Free Trade Agreem ent on Trade in Goods was implemented and 
reduction has been made progressively on all the ag reed tariff lines since then. Bilateral trade in 
goods between China and ASEAN reached US 160.8 billion in 2006 and 202.51 billion in 2007, a 
yearly increase of 23.4% and 25.9% respectively.  
According to the Agreement, China cut the tariff rate of 3408 tariff lines imported from ASEAN in 
July 2005 and the number of tariff lines on wh ich cuts have been made reached 5375 on 
July 1,2007. The tariff level to ASEAN has been red uced to 5.8%. By 2010, the tariff rate of around 
7000 products which account for 93% of the tota l imports from ASEAN will be reduced to zero. 
Meanwhile, ASEAN has made corresponding arra ngements. By 2010, over 90% of the imports 
from China will be given zero tariff by ASEAN.  
Neither China nor ASEAN has made any modification to its sensitive list and high-sensitive list of 
products under ACFTA by now.   
EC Question 7 
Could China elaborate on the objectives of its regional and bilateral trade policy? 
EC Question 8 
How many FTAs is China currently negotiating, and when are they envisaged to enter into force?  
Could China confirm whether it aims at concl uding comprehensive FTAs with all partners?  
Answer  
Please refer to the Government Statement of China (W/TPR/G/199). While giving priority to observing the basic purposes and principles of multilateral trading system 
and promoting world trade and investment libera lization together with other Members, China 
believes that regional trade arrangements established on the basis of openness and non-
discrimination can play a supplementary role to the multilateral trading system. Guided by this 
principle, China has conducted bilateral and re gional trade arrangement negotiations with a 
number of trading partners.  WT/TPR/M/199/Add.1 
Page 158  
 
  To date, a total of 12 regional trade arrangemen ts involving 29 countries and regions have been 
either signed by China or still in the process of  negotiations. China is committed to reaching 
comprehensive, balanced and open agreements with all the negotiating partners, with an aim to 
push forward the bilateral trade relationship and contribute to the sound development of the world 
economy. 
EC Question 
The EC notes that China has concluded a significant number of partial scope agreements. 
9 
Could China elaborate on the rationale behind ma intaining these partial scope agreements?   
10 
Does China agree with the assumpti on that fully-fledged and comprehensive FTAs are a preferable 
option in terms of economic gains and trade libera lisation benefits rather than limited shallow 
preferential trade agreements?  
Answer
 
China noted that the EC maintains the largest number of preferential trade agreements among all 
WTO Members. The preferential trade agreements and free trade agreements apply to different 
partners, therefore can not be compared in a si ngle simplistic manner. The preferential trade 
arrangements that China has made with some d eveloping countries especially the LDCs are of high 
necessity to promote trade development of these partners. These arrangements have also achieved 
positive results.    
EC Questions 11, 12, 13 
China-Pakistan FTA entered into force on 1 January  2006. The Report indicates that "bilateral tariffs 
on certain products were to be el iminated gradually by 1 January 2008". Could China specify the 
coverage and scope of the Agreem ent, in both tariff lines and trade value figures? Over how many 
years will this Agreement be implemented? 
Are liberalization commitments symmetric for both Parties? When does China plan to notify this 
Agreement to the WTO? 
United States Question 9 
Paragraph 59 of Part II of the report discusses th e China-Pakistan Free Trade Agreement (FTA), 
which entered into force on 1 July 2007.  A prelim inary analysis of this FTA indicates that, for both 
China and Pakistan, nearly 20% of their total ta riff lines are excluded from any commitments.  In 
addition, for China, only 36% of its total tariff lines and 30% of its imports from Pakistan become 
duty-free after full implementation.  Please explain why this FTA appears to eliminate tariffs on so 
few tariff lines and such a limited amount of trade. 
Answer  
The China-Pakistan trade agreement which ent ered into force on 1 January 2006 is an early-
harvest agreement. The China-Pakistan FTA formally  came into effect on 1 July 2007. According 
to this agreement, China and Pakistan will elimin ate or reduce tariffs on goods in two phases. The  WT/TPR/M/199/Add.1 
 Page 159 
 
 
  first phase is within 5 year after the agreement ca me into force. Each party will reduce tariff rates 
at different level on 85% products of its total tariff lines, among which, 36% products will be treated duty-free within 3 years. The second phase will start from the 6
th year after the agreement 
came into force. The parties will eliminate tariffs further based on the review of the liberalization 
achieved, with a view to eventually achieve duty-free  for 90% of the tariff lines and trade volume of 
both parties within the expected timeframe.  
Both parties fulfilled substantial liberalization to each other under the China-Pakistan FTA in a 
balanced manner.  
China and Pakistan provided notification to the WTO on January 18, 2008 (document number: 
WT/REG237/N/1). .  
EC Question 14 
The Report indicates that China is currently negotiating an FTA with Australia. In light of the several 
rounds of negotiations already held, could Chin a spell out main objectives pursued under the FTA 
with Australia?  
Answer  
Since the launch of China-Australia FTA negotiati on in April 2005, there have been 10 rounds of 
talks concluded and the 11th round will be held in Beijing in June 2008. The two parties conducted 
broad and in-depth discussions on services, agriculture, industrial products, investment and IPR issues, etc. The two parties are committed to rea ching a "comprehensive, high-quality, balanced 
and mutually acceptable" trade agreement. 
EC Question 17 
Could China confirm whether it aims at negotiatin g an ambitious and comprehensive FTA with the 
GCC? If so, what is the envisaged scope of this Agreement? 
Answer
 
The China-Gulf Cooperation Council FTA negotiatio n is underway. We believe that the final 
agreement will be a high-quality, comprehensive, bal anced and mutually beneficial one. It will 
cover substantially all trade between the parties.  
EC Questions 18, 19, 20, 21 
The Secretariat's report states that "as of March 2008,  unilateral preferential tariffs on certain products 
were offered to 39 least developed countries". Could China furnish further information regarding the 
scope and application of these unilateral preferentia l tariffs? How many tariff lines are covered under 
those preferences, and for how many years? How ma ny countries have been granted DFQF treatment? 
Does this DFQF treatment cover all bilateral trade? Do countries need to comply with any particular 
requirement in order to be granted those preferences?  
Answer  
To facilitate the LDCs to better participate in world trade and help promote their economic and 
social development, China has provided duty-free quota-free treatment to products of 41 LDCs 
having diplomatic relations with China in 2008, covering the vast majority of their exports to 
China. According to the information provided by  the WTO Secretariat, China has been the third WT/TPR/M/199/Add.1 
Page 160  
 
  largest destination for LDC exports, absorbing 18 percent of their total exports and 92.5 percent of 
LDC exports to China in value terms in 2005 enjo yed the DFQF treatment. The import of products 
from LDCs is basically in conformity with th eir export structure. More importantly, there are no 
preconditions attached to these preferential treatments. Further information could be found in 
2008 Customs Tariffs of China. 
US Question 9 
Paragraphs 60-65 of Part II of the report refer to  a series of ongoing FTA negotiations that China is 
pursuing with Australia, New Zealand, the Gulf  Cooperation Council, Iceland and the Southern 
African Customs Union as well as with other potentia l bilateral agreement partners.  Please provide 
updates on the status of each of these negotiations. 
Answer
 
China-Gulf Cooperation Council FTA: To date, China and the Gulf Cooperation Council have 
reached consensus on most of the issues on trade in goods. 
China-Australia FTA: There have been 10 rounds of  talks concluded since the launch of China-
Australia FTA negotiation in April 2005. The tw o parties conducted comprehensive and in-depth 
discussions on trade in services, agriculture, industrial products, investment and IPR issues etc. The negotiation has made some progress. 
China-Singapore FTA: From August 2006 to the end of 2007, China and Singapore had held 
5 rounds of negotiations. The two parties exchanged views in a thorough and in-depth way on topics including trade in goods, trade in services, investment and economic cooperation, etc. At 
current stage, the negotiation is moving forward steadily. 
China-Iceland FTA: The first round of negotiation was held on April 11
th-12th 2007 in Beijing. The 
two parties exchanged views on issues including tariff reduction modality, rules of origin, 
SPS/TBT, trade in services, etc. and reached broad consensus. The first round of negotiation has 
made positive progress. 
(6) F OREIGN INVESTMENT REGIME  38 
 
Switzerland Question 
Para. 168.  According to the Secretariat’s Report, di rect intervention in the economy remains the main 
approach of industrial policy. Could the Chinese au thorities provide an overview of the activities that 
are restricted / prohibited or "guided"? How ofte n are these "catalogues" modified? Based on which 
criteria? 
Answer  
Pursuant to Regulation on Guidance of Foreign In vestment Direction, the followings projects fall 
into the restricted section of the catalogue for foreign investment: 
 1. project of obsolete technology, 
 2. project not conducive to resource co nservation and environment improvement, 
 3. project engaged in mining of natural resources which fall into the protective 
category stipulated by the State, 
 4. project in industries which will gradually open up,  5. other projects that are stipulated in other laws or regulations.  WT/TPR/M/199/Add.1 
 Page 161 
 
 
  The followings projects fall into the proh ibited catalogue for foreign investment: 
  1. project which compromises national security or public interest,  2. project which pollutes the environm ent, damages natural resources or human 
health, 
 3. project which occupies large area of ar able land and is not good for land resource 
preservation or exploitation, 
 4. project which compro mises the security and function of military facilities, 
 5. project which uses China’s unique technology or technique for production,  6. other projects that are stipulated in other laws or regulations. 
In the latest version of Catalogue of Guidance of Foreign Investment Industries (2007), there are 
87 items that fall into catalogue of restriction and 40 items that fall into the catalogue of prohibition. 
Switzerland Question 
In para. 170, the Secretariat's report suggests that  the Catalogue of Guidance Regarding Industrial 
Structural Adjustment covers more than 20 industries, including 539 encouraged categories, 190 
restricted categories, and 300 prohibited categories (w hich are said to be eliminated gradually or 
within a specific time frame). Could the Chinese authorities indicate which are the main industries 
where investment is falling into the prohibited category? 
Answer
 
In the latest version of Catalogue of Guidance of Foreign Investment Industries (2007), there are 
40 items that fall into the prohibited catalogue. The 40 items mainly covers 11 industries, such as 
agriculture/forestry/animal husbandry/fishing, mining, manufacturing, transportation, storage and postal service. For more information, Members of interest can visit NDRC’s website for details: 
www.ndrc.gov.cn. 
Argentina Question: Paragraph 42, page 19 This paragraph refers to commercial activity by foreign-
invested enterprises in China.  Wh at are the criteria for granting the status of foreign-invested 
enterprise? 
Answer
 
The Law on Chinese-Foreign Equity Joint-Ventu res, the Law on Chinese-Foreign Contractual 
Joint-Ventures and the Law on Foreign-Capital En terprise contains clear legal text on the 
establishment of foreign invested enterprises. In terest members can refer to these three laws for 
more details.  
Argentina Question 
Paragraph 75, page 40  It is stated in this paragraph that foreign equity limits tend to vary by industry.  
What are the foreign equity limits in the different domestic industries?  
Answer  
Foreign equity limits on different domestic industries are clearly stipulated in the latest version of 
Catalogue of Guidance of Foreign Investment Industries (2007). Member of interest can visit the official website of NDRC for the legal text of the catalogue: www.ndrc.gov.cn. WT/TPR/M/199/Add.1 
Page 162  
 
   (i) Recent developments in FDI policy 38 
 (ii) Legislative framework and procedures 39  (iii) Examination and approval procedure 40 
 (iv) FDI incentives 41  (v) Bilateral investment and tax agreements 42 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 43 
 (1) I NTRODUCTION  43 
 (2) M EASURES DIRECTLY AFFECTING IMPORTS  44 
 (i) Procedures 44 
 
Switzerland Question 
According to para. 13 of the Secretariat's report, a revised version of the Implementing Regulation of 
the Law on Import and Export Commodity Inspectio n entered into force on 1 December 2005. Until 
now China has not provided the revised version to  the WTO Secretariat despite the obligation to 
notify any changes to the Secretariat immediat ely after their publication. Could the Chinese 
authorities indicate when China intends to comply w ith its obligation according to article 5 of the PSI 
agreement? In addition, could Ch ina specify whether China sent pe ople or institutions abroad to 
conduct PSI inspections? If yes, to which countri es, for which products, and when did it occur?  
Argentina Question 
Paragraph 13, page 45 It is stated  in this paragraph that China h as introduced a preshipment inspection 
requirement through revision of the Implemen ting Regulation of the Law on Import and Export 
Commodity Inspection, which entered into force on 1 December 2005.  Could China explain why it 
has not yet notified this requirement to the WTO? Mo reover, it is stated in this paragraph that China 
has designated 23 foreign institutions to conduct pr eshipment inspection and to issue certificates.  
What is the mechanism for designati ng such institutions and have people been sent abroad to carry out 
that task? 
United States Question 11 
Paragraph 13 of Part III of the report notes that China introduced a preshipment inspection (PSI) 
requirement through its revision of the Implementing Regulation of the Law on Import and Export 
Commodity Inspection , which came into force on 1 December 2005, but has not yet notified this 
requirement to the WTO. When does China intend to  notify this requirement to the WTO, as required 
by the Agreement on Preshipment Inspection?  Can China also clarify whether it has sent people or 
institutions abroad to conduct PSI inspections?  
Answer  
China had notified the revised Implementing Ru les for Import and Export Commodities Inspection 
to both TBT and SPS Committees (G/TBT/N/CHN/ 181 and G/SPS/N/CHN/96). According to this 
Regulation, China requires initial inspection or initi al supervision before the importation of certain 
goods such as solid waste used as raw materials an d used mechanical and electrical products which 
are deemed to affect public health and environmen t. This is to ensure that all such importations are 
in line with the Chinese inspection and quarantin e requirement. The result of the initial inspection 
will not be used for the purpose of customs valuation.  
China does not dispatch experts or institut es abroad for inspection. Initial inspections for 
mechanical and electrical products with high ri sks will be carried out by overseas institutions, 
which may invite experts from China to provide on-spot instruction if necessary.  WT/TPR/M/199/Add.1 
 Page 163 
 
 
  (ii) Customs valuation and rules of origin 46 
 
Australia Question 1 
The experience of Australian exporters is that the entry processing of goods (valuation and tariff 
classification) is not uniform at all points of entr y of goods into China (Paragraphs 14-16 on page 46 
of WT/TPR/S/199). 
a) Can China assure WTO Members that the processing of goods at all entry points 
across China will be uniform? 
Answer  
Laws and regulations enacted by the central govern ment are uniformly implemented nation-wide in 
China, including customs regulations and rules.  
Prior to the import and export of goods: 1. importing and exporting enterprises should consult the 
related departments of the Customs. 2. Initial classification ：Enterprises could apply to the 
Customs for initial classification and the Custom s shall provide their feedbacks within the 
timeframe. 3. The Customs frequently publis hes the notices concerning the decisions on 
classification by WCO or in accordance with  Import and Export Tariff of the China. 
At the time of import and export ：the Customs shall examine the classification on spot. If the 
Customs have different classification from that  given by enterprises, the Customs will give 
explanation to the enterprises. If the enterprises then agree with the Customs, they will change the classification. If the enterprise insists on diff erent classifications and the Customs could not 
explain to their satisfaction, the on-spot Customs shall ask in writing their superior Customs for 
guidance.  
The international practice is that countries share the same first 6 digits for goods and are entitled to 
sub-divide the 6-digit codes. If the first 6 digits provided by the declaring enterprises and the Customs are the same, the codes of the importing country will prevail. If the first 6 digits are not the same, declaring enterprises could lodge the compla ints to the Customs, which will reply according 
to related decisions or interpretations by the WCO. If the Customs makes a mistake, the mistake 
shall be corrected. Further more if the classification is in line with the WTO provisions, the 
classification shall apply. 
EC Question: 22 
The Report outlines that the Rules Regarding Dete rmination of Customs Value of Imported and 
Exported Goods is the legal basis for customs valuati on in China.  What policies is China following or 
will follow in order to ensure uniformity in cust oms decisions across the country in relation to 
customs valuation, training of custom officials, disclosing internal procedures to companies, respect 
of schedules and written queries? 
Answer
 
All Trade policy measures, including custom valu ation, are administered in a uniform manner in 
China. The Administrative Measures of the Customs of the People’s Republic of China for the 
Assessment and Determination of Dutiable Value of Import and Export Goods, promulgated by the 
General Administration of Customs of China in 2006 , lays out strict rules on custom valuation, 
which are in compliance with the Agreement on Implementation of Article VII of the General 
Agreement on Tariffs and Trade 1994 (Custom Valuation Agreement). In case where import and WT/TPR/M/199/Add.1 
Page 164  
 
  export goods involve high risks of valuation frau d, the customs authoriti es would determine the 
true value according to WCO practises, which is  also in compliance with the WTO decision 
regarding cases where Customs Administrations have reasons to doubt the truth or accuracy of the 
declared value.  
Six customs valuation centers have been estab lished nationwide to address problems regarding 
valuation in a timely manner. In the meantime, Chin a has been training border customs officials to 
enhance their valuation skills. The Chinese governme nt would make unremitting efforts to promote 
trade facilitation, maintain normal trade ord er and ensure impartial and fair enforcement of 
customs laws and regulations. 
Argentina Question 
Paragraph 11, page 45  Th is paragraph refers to the pilot proj ects which the General Administration of 
Customs has been implementing since October 2 005 to reform China's regional customs transit 
system.  Could China describe in greater detail the most salient features of the projects in question?  
Answer
 
In July, 2006, the General Customs Administrati on decided to popularize the pilot project for 
regional customs transit reform on a larger scale , including regions alongside Yangtze River, the 
pan-pearl river-delta, around the Bohai Sea, economic zone on the west coast of the Taiwan Straits, 
as well as the regions of the north-east China,  alongside Longhai railway and the new Eurasia 
Bridge. The local customs authorities in the rest of parts of China, which are not included in the 
July list, can apply to join this reform, if necessa ry and feasible. The reform is aimed to be finally 
implemented throughout China.  
Regional customs transit reform refers to a cu stoms transit facilitation measure where customs 
authorities will depend more on information techno logy to integrate the customs information and 
customs administrative resources of port-custom s and in-land customs. The customs transit 
procedures are simplified to a great extent that af ter the reform, a "declaration at the customs in 
the region where the enterprise is  registered, clearance at port customs where import or export 
substantially takes place", is in place and, fo r customs located at Guangdong, Hong Kong and 
Macao, the reform is known as "swift cross-border clearance".  
Legislations and rules related to this reform are as follows:  1. Circulation of GCA on Publication of "Operating Procedure for Transportation in 
Regional Customs Transiting Reform" (GCA Jianfa No. 460 of 2005),  
 2. GCA Announcement No. 43 of 2006 (http://www.legaldaily.com.cn/misc/2006-
08/29/content_397420.htm) 
 3. Circulation of GCA on Publication of "Operating Procedures for Cross-customs 
‘declaration at the customs in the reg ion where the enterprise is registered, 
clearance at port customs where import or export substantially happens’" (GCA 
Jianfa No. 379 of 2006).  
(iii) Tariffs   47 
 Switzerland Question 
Para. 20:  According to the Secretariat's report in para. 20, China has provided the ad valorem 
equivalents (AVEs) for 40 lines out of 44 lines subj ect to specific rates. Could China indicate for 
which reasons the AVE for 4 tariff lines have not been provided? Coul d the Chinese authorities  WT/TPR/M/199/Add.1 
 Page 165 
 
 
  provide the exhaustive list of the 44 lines subject  to the specific duties as well as the AVEs and HS 
Code and product description?  
02071200 frozen whole chickens, not cut in pieces 
02071411 frozen chicken cuts, breasts, legs, with bone in 
02071419 frozen boneless chicken cuts, breasts, legs 
02071421 frozen wing of chicken(other than wingtips) 
02071422 frozen claw of chicken  
02071429 frozen offal of chicken, nes 
05040021 cold, frozen broiler gizzard 
22030000 beer made from malt 
27090000 petroleum oils and oils obtained from bituminous minerals 
37013021 laser phototypesetting film, unexposed, of any material other than paper, paperboard or textiles, any side exceeding 
255mm 
37013022 unexposed P.S phototypesetti ng plates, any side exceeding 255mm 
37013023 unexposed CTP phototypesetti ng plates, any side exceeding 255mm 
37013029 other photographic plates and film, for pr eparing printing plates or cylinders, in  the flat, sensitized, unexposed, of any 
material other than paper, paperboard or textiles, any side exceeding 255mm 
37023190 other photographic film rolls, unexposed, w ithout perforations, for colour photogr aphy, of any material other than 
paper, paperboard or textiles, width<=105mm 
37023220 photographic film roll, unexposed, without pe rforations, with silver halide emulsi on, for preparing printing plates or 
cylinders, of any material other than pape r, paperboard or textiles, width<=105mm 
37023290 photographic film rolls, unexposed, w ithout perforations, with silver halide emul sion, of any material other than paper, 
paperboard or textile, width<=105mm, nes 
37023920 photographic film rolls, unexposed, without pe rforations, and silver halide emulsion,  of any material other than paper, 
paperboard or textiles, width<=105mm, fo r preparing printing plates or cylinders 
37023990 photographic film rolls, unexposed, without pe rforations, and silver halide emulsion,  of any material other than paper, 
paperboard or textiles, width<=105mm, nes 
37024100 film rolls ,for colour photography, unexposed, without perfora tions, of any material other than paper, paperboard or 
textiles, width> 610mm, length>200mm 
37024221 wide anticorrosive photographic plate for printed circuit pro cessing, unexposed, without perforations, of any material 
other than paper, paperboard or textiles, width> 610mm, length>200mm 
37024229 film rolls for preparing printing plates or cylinders, unexposed, without  perforations, of any material other than paper, 
paperboard or textiles, widt h> 610mm, length>200mm, excl. wide anticorro sive photographic plate for printed circuit 
processing 
37024291 infrared or helium-neon laser film  
37024299 unexposed monochrome photographic film in rolls , without perforations, wi dth> 610mm, length>200m 
37024321 laser phototypesetting film, unexposed, without perforations, wi dth> 610mm, length<=200m, of any material other than 
paper, paperboard or textiles 
37024329 Film rolls for preparing printing plates or cylinders, un exposed, without perforations, width> 610mm, length<=200mm, 
of any material other than paper, paperboard  or textile, exclude. Laser phototypesetting film 
37024390 film rolls, unexposed, without perfora tions, width>610mm, length <=200m, of any material other than paper, 
paperboard or textiles, nes 
37024421 laser phototypesetting film, unexposed, wit hout perforations, 105mm<width<610mm, of  any material other than paper, 
paperboard or textiles 
37024422 narrow anticorrosive photographic plate for printed ci rcuit processing , unexposed, without, perorations, 
105mm<width<=610mm, of any material othe r than paper, paperboard or textiles 
37024429 film rolls for preparing printing plates or cylinders, une xposed, without perforations, 105mm<width<=610mm, of any 
material other than paper, paperboard or textiles 
37024490 film rolls, unexposed, without perforati ons, 105mm<width<=610mm, of any material  other than paper, paperboard or 
textiles, nes 
37025100 film rolls for colour photography, unexposed, width<=16m m, length<=14mm, of any material other than paper, 
paperboard or textiles, nes 
37025200 film rolls for colour photography, unexposed, width<=16mm,  length>14mm, of any mate rial other than paper, 
paperboard or textiles 
37025300 slide film rolls for colour photography, unexposed, 16mm<w idth<=35mm, length<30m, of any material other than 
paper, paperboard or textiles 
37025410 film roll for colour photography other than for slides, une xposed, width=35mm and length<=2 m, of any material other 
than paper, paperboard or textiles 
37025490 film rolls for colour photography other than for slid es, unexposed, 16mm<width<35mm, 2m<length<=30m, of any 
material other than paper, paperboard or textiles 
(Cont'd) WT/TPR/M/199/Add.1 
Page 166  
 
  37025520 colour cinematographic film rolls, une xposed, 16mm<width<=35mm, length>30m, of  any material other than paper, 
paperboard or textiles 
37025590 colour cinematographic film ro lls, unexposed, 16mm<width<=35mm, leng th>30m,excl. cinematographic film 
37025620 colour cinematographic film rolls, unexposed, width>35mm, of any material other than paper, paperboard or textiles 
37025690 film in rolls for colour photography, unexposed, width>35mm, of  any material other than pape r, paperboard or textiles, 
excl. cinematographic film 
37029100 film rolls of neutral colour, unexposed, width<=16mm, length<=14m, of any materi al other than paper, paperboard or 
textiles 
37029310 film rolls of neutral colour, unexposed, width=35mm, length<=2 m, of any material other than paper, paperboard or 
textiles 
37029390 film rolls of neutral colour, unexposed, 16mm<width<35mm,  2m<length<=30m, of any material other than paper, 
paperboard or textiles 
37029420 cinematographic film rolls of neutral colour, unexposed, 16mm<width<=35mm, lengt h>30m, of any material other than 
paper, paperboard or textiles 
37029490 film rolls of neutral colour, unexposed, 16mm<width<=35 mm, length>30m, of any material other than paper, 
paperboard or textiles 
37029520 film rolls of neutral colour, une xposed, width>35mm, of any material othe r than paper, paperboard or textiles 
37029590 film rolls of neutral colour, unexposed, width>35mm, of any ma terial other than paper, pa perboard or textiles, excl. 
cinematographic film 
 
Answer  
On the basis of the formula used by the Chin ese government to calculate AVE, import volume and 
import value of one tariff line of product in th e previous three years are crucial information. 
However, since there has been very little import for the above referenced 4 tariff lines of 8 digits 
products, it is technically impossible to conduct the AVE of the 4 products.  
In 2008, China has 46 tariff headings of product subject to specific duty:  
02071200 frozen whole chickens, not cut in pieces 
02071411 frozen chicken cuts, br easts, legs, with bone in 
02071419 frozen boneless chicken cuts, breasts, legs 
02071421 frozen wing of chicken(other than wingtips) 
02071422 frozen claw of chicken  
02071429 frozen offal of chicken, nes 
05040021 cold, frozen broiler gizzard 
22030000 beer made from malt 
27090000 petroleum oils and oils obtained from bituminous minerals 
37013021 laser phototypesetting film, unexposed, of any material other than paper, paperboard or 
textiles, any side exceeding 255mm 
37013022 unexposed P.S phototypesettin g plates, any side  exceeding 255mm 
37013023 unexposed CTP phototypesetting plates, any side exceeding 255mm 
37013029 other photographic plates and film, for preparing printing plates or cylinders, in the flat, 
sensitized, unexposed, of any material other th an paper, paperboard or textiles, any side 
exceeding 255mm 
37023190 other photographic film rolls, unexposed, without perforations, for colour photography, of any 
material other than paper, paperboard or textiles, width<=105mm 
37023220 photographic film roll, unexposed, without pe rforations, with silver halide emulsion, for 
preparing printing plates or cylinders, of any mate rial other than paper, paperboard or textiles, 
width<=105mm 
37023290 photographic film rolls, unexposed, without perf orations, with silver halide emulsion, of any 
material other than paper, paperboard or textile, width<=105mm, nes 
(Cont'd)  WT/TPR/M/199/Add.1 
 Page 167 
 
 
  37023920 photographic film rolls, unexposed, without perf orations, and silver halide emulsion, of any 
material other than paper, paperboard or textiles, width<=105mm, for preparing printing 
plates or cylinders 
37023990 photographic film rolls, unexposed, without perf orations, and silver halide emulsion, of any 
material other than paper, paperboard or textiles, width<=105mm, nes 
37024100 film rolls ,for colour photography, unexposed, without perforations, of any material other than 
paper, paperboard or textiles, width> 610mm, length>200mm 
37024221 wide anticorrosive photographic plate for printed circuit processing, unexposed, without 
perforations, of any material other than pap er, paperboard or textiles, width> 610mm, 
length>200mm 
37024229 film rolls for preparing printing plates or cylinders, unexposed, without perforations, of any 
material other than paper, paperboard or textiles, width> 610mm, length>200mm, excl. wide 
anticorrosive photographic plate for printed circuit processing 
37024291 infrared or helium-neon laser film  
37024299 unexposed monochrome photographic film in rolls, without perforations, width> 610mm, 
length>200m 
37024321 laser phototypesetting film, unexposed, without pe rforations, width> 610mm, length<=200m, of 
any material other than paper, paperboard or textiles 
37024329 film rolls for preparing printing plates or cylinders, unexposed, without perforations, width> 
610mm, length<=200mm, of any material other th an paper, paperboard or textile, exclude. 
Laser phototypesetting film 
37024390 film rolls, unexposed, without perforations, width>610mm, length <=200m, of any material 
other than paper, paperboard or textiles, nes 
37024421 laser phototypesetting film, unexposed, withou t perforations, 105mm<width<610mm, of any 
material other than paper, paperboard or textiles 
37024422 narrow anticorrosive photographic plate for printed circuit processing , unexposed, without, 
perorations, 105mm<width<=610mm, of any materi al other than paper, paperboard or textiles 
37024429 film rolls for preparing printing plates or cylinders, unexposed, without perforations, 
105mm<width<=610mm, of any material other than paper, paperboard or textiles 
37024490 film rolls, unexposed, without perforations, 105mm<width<=610mm, of any material other 
than paper, paperboard or textiles, nes 
37025100 film rolls for colour photography, unexposed, width<=16mm, length<=14mm, of any material 
other than paper, paperboard or textiles, nes 
37025200 film rolls for colour photography, unexposed, width<=16mm, length>14mm, of any material 
other than paper, paperboard or textiles 
37025300 slide film rolls for colour photography, une xposed, 16mm<width<=35mm, length<30m, of any 
material other than paper, paperboard or textiles 
37025410 film roll for colour photography other than for slides, unexposed, width=35mm and 
length<=2m, of any material other than paper, paperboard or textiles 
37025490 film rolls for colour photography other than for slides, unexposed, 16mm<width<35mm, 
2m<length<=30m, of any material other than paper, paperboard or textiles 
37025520 colour cinematographic film rolls, unexposed, 16mm<width<=35mm, length>30m, of any 
material other than paper, paperboard or textiles 
37025590 colour cinematographic film rolls, unexpos ed, 16mm<width<=35mm, length>30m,excl. 
cinematographic film 
37025620 colour cinematographic film rolls, unexposed, width>35mm, of any material other than paper, 
paperboard or textiles 
37025690 film in rolls for colour photography, unexposed, width>35mm, of any material other than 
paper, paperboard or textiles, excl. cinematographic film 
37029100 film rolls of neutral colour, unexposed, widt h<=16mm, length<=14m, of any material other 
than paper, paperboard or textiles 
(Cont'd) WT/TPR/M/199/Add.1 
Page 168  
 
  37029310 film rolls of neutral colour, unexposed, width= 35mm, length<=2m, of any material other than 
paper, paperboard or textiles 
37029390 film rolls of neutral colour, unexposed, 16mm<width<35mm, 2m<length<=30m, of any 
material other than paper, paperboard or textiles 
37029420 cinematographic film rolls of neutral colour, unexposed, 16mm<width<=35mm, length>30m, 
of any material other than paper, paperboard or textiles 
37029490 film rolls of neutral colour, unexposed, 16mm< width<=35mm, length>30m, of any material 
other than paper, paperboard or textiles 
37029520 film rolls of neutral colour, unexposed, width>35mm, of any material other than paper, 
paperboard or textiles 
37029590 film rolls of neutral colour, unexposed, width>35mm, of any material other than paper, 
paperboard or textiles, excl. cinematographic film 
China has provided specific data on AVE to the WTO Secretariat, and Members can refer to the 
Secretariat for the data   
Switzerland Question 
In paragraph 22, footnote 22  of the Secretariat's report, tariff rates have been increased for a number 
of products and sometimes quite significantly. Could China indicate for which reasons the tariff rates 
have been increased as well as the HS Code, produc t description, bound rates and applied rates for the 
products mentioned in footnote 22? 
Japan Question 3 
Some tariff rates were increased by over 10%. Please show us the reasons for increase of tariff rates.  
Answer  
The change in tariff rate of some dairy products,  belt and bandolier as well as electro-thermal 
water dispensers is due to the change from HS  2002 to HS 2007, which leads to creation of some 
new tariff lines and consolidation of some existing tariffs lines. For detailed  information, please 
refer to Import and Export Tariff of the P.R.C 2007. 
Australia Question 2 we welcome recent steps by China to increase transparency of its wool tariff rate quota (TRQ), 
including in the Implementation Rules of 2008 TRQ Allocation fo r Wool and Wool Tops 
(Paragraphs 25-28 on page 52 of WT/TPR/S/199).  Au stralia would be interested in regular (e.g. 
monthly or quarterly) information being made pub licly available on TRQ allocation and fill rates.  
 a) Could China advise how it calculates its w ool imports for the purposes of the wool 
TRQ?   
Answer
 
TRQ of wool is allocated according to the princi ple of "first come, first served". MOFCOM would 
cease to accept application when the allocated qu antity reaches the published wool TRQ quantity of 
the year.   WT/TPR/M/199/Add.1 
 Page 169 
 
 
  Australia Question 2 
 b) Does China include wool trade into bonded areas or free trade zones for the purposes 
of the TRQ? 
Answer  
All wool imports by all means of trade, including normal trade and processing trade, are subject to 
wool TRQ administration.  
United States Question 12 
Paragraph 35 of Part III of the report explains th at "[d]uty exemptions and reductions may apply to 
goods imported into or exported from designated areas,  by designated enterprises, or for designated 
uses, ‘in accordance with the provisions set out in th e relevant regulations by the State Council.’"  
Footnote 35 further explains that "designated ente rprises" refers to enterprises for which certain 
policies are designed and implemented on the basis of type of enterprise, such as foreign-invested 
enterprises (FIEs).  Other than FIEs, what typ es of enterprises are included in the category of 
"designated enterprises" for purposes of receiving duty exemptions or reductions?  Please also 
describe the duty exemptions or reductions recei ved by "designated enterprises" other than FIEs. 
Answer  
Other than FIEs, pursuant to the Customs Law and Regulation on Import and Export Tariff, 
designated enterprises also incl uded enterprises for re-employment  of laid-off workers, enterprises 
for ex-soldiers who seek employment, scientific re search institutions, colleges and universities for 
scientific research and teaching, entities that prov ide logistic service to universities, scientific 
research institutions undergoing reforms, service centers to ministries or agencies of the State 
Council, enterprises whose products fall into th e Catalogue of Environment Friendly Products 
Encouraged by the State and enterprises for production and assembly of products for the disabled are entitled to such preference. The preference mainly refers to exemption of import tariff and 
exemption or implementation of 50% of import VAT.  
However, it should be noted that pursuant to the Customs Law and Regulation on Import and 
Export Tariff, which stipulates "customs duties fo r import or export goods in special designated 
areas, for special enterprises and for special pu rposes may be reduced or exempted. The State 
Council shall formulate detailed regulations about the scope and method of reduction or exemption. The above law and regulation also stipul ates that when the designated enterprise import 
products which are entitled to preference, "the use of  the said imports will be restricted  only in 
specified areas and enterprises or for specific pur poses. They shall not be utilized otherwise unless 
Customs approval is obtained and duties duly paid." 
Japan Question 1 
Regarding the interim tariff which China adopted, th e Secretariat report says that where a particular 
tariff line has an interim tariff rate, the lower of th e interim tariff and the standard applied MFN tariff 
is adopted. On the other hand, it also says that in terim rates are usually lower than the standard 
applied MFN tariff rates.  
 (1) Are there any cases where the interim tariff rate  is higher than the MFN rate? If yes, 
why is the interim tariff set?  
 (2) Is the higher interim tariff rate applied? WT/TPR/M/199/Add.1 
Page 170  
 
  Answer
 
There is no such case where interim rate is high er than MFN rate in the Import and Export Tariff 
of China. 
Japan Question 2 
Tariff lines subject to interim tariffs are incr eased from 149 in 2007 to 624 in 2008. Why are tariff 
lines subject to interim tariffs increased  rapidly? Will this trend continue? 
Answer  
China increased the number of products subject to interim tariff in 2008 to encourage the 
importation of these products to achieve the po licy objective to maintain trade balance. 
Japan Question 4 
How is the rate on sliding duty calculated speci fically? Is the calculation method published?  
Answer  
The calculating method is published in Annex 1 to Import and Export Tariff of the P.R.C. 2008.  
In 2008, the calculating method is as follows:  1. When duty-paying value of import cotton equals or exceeds 11.397 Yuan/kg, 
specific duty at rate of 0.570 Yuan/kg is applied. 
 2. When duty-paying value of import cotto n is lower than 11.397 Yuan/kg, interim 
tariff is calculated with the following formula:  
Ri=8.686/Pi +2.526%×Pi -1 (three digits to  the right of the decimal point is reserved) 
Ri refers to interim tariff rate and when the result of calculation with the above formula is higher 
than 40%, Ri is fixed at 40%.  
Pi refers to duty-paying value (unit: Yuan/kg). 
Japan Question 6 
China offers special pref erence tariffs to imports of some goods  from some LDCs. Please show us 
more detail of preference tariffs, such as examples of covered products, the number of covered tariff 
lines, and how the coverage is determined. 
Answer
 
At present, products that qualifies the preference of  zero tariff rate as provided by China to LDCs 
mainly include 10 categories: aqua-products,  unprocessed or primary processed agricultural 
products, medicinal materials, rock and stone materi als, mineral products, leather, textile, finished 
clothing products, light industrial products, mechanical and electronic products and wood furniture.  These categories substan tially cover all products of export interest by LDCs to China. 
Detailed tariff headings and rate can be found in Import and Export Tariff of China 2008.   WT/TPR/M/199/Add.1 
 Page 171 
 
 
  (iv) Indirect taxes affecting imports 56 
 
EC Question 23 
The Report states that agricultural products sold by  farmers directly to consumers are exempt from 
VAT, while imports of like products are subject to VAT. Could China provide information whether 
and when will China eliminate this discriminatory treatment? 
Answer  
China is a developing country with a much disb ursed agricultural production, low level of 
modernization, huge rural population and less than optimal production capacities. It is extremely 
difficult to levy VAT from farmers. Therefore, China has adopted a VAT exemption policy for 
agricultural products. Nonetheless, such a prefe rential policy is limited only to agricultural 
products produced by those units and individual s engaged directly in crop growing, harvesting, 
animal husbandry as well as fishery. Those purcha sed and sold after being processed products are 
subject to VAT taxation according relevant rules. Th is is to say that China’s VAT exemption policy 
is designed only for the phase of direct pr oduction of primary agricultural commodities and 
exemptions are granted according to specific pha ses and for specific people. The VAT will still be 
collected in accordance with relevant rules du ring the phases of whole sale and retail of 
agricultural products. The imported goods have al ready enjoyed the VAT rebate from the exporting 
countries at the time of exportation and the pri ce of import therefore does not include VAT. Such 
importation will be treated as whole sale or reta il and so would be required to pay VAT. China’s 
VAT policy is aimed for better taxation and ma nagement rather than a barrier to trade of 
agricultural products to the Chinese market. 
Switzerland Question 
In para. 148, the Secretariat's report indicates that consumption (or excise) tax is levied on certain 
domestic and imported goods, among ot hers on some luxury items, such  as golf balls and equipment, 
luxury watches, yachts, etc. At the same time, para. 159 of the Secretariat's report suggests that 
China's latest notification to the WTO Committe e on Subsidies and Countervailing Measures (April 
2006) listed that 78 tax incentive programs were in force at the Central level between 2001 and 2004. 
Do some of these incentive programs also concern the domestic production of luxury goods ? If yes, 
are they equally available to dom estic and foreign owned enterprises 
Answer  
Consumption tax on domestic an d imported goods does not constitute subsidy or assistance and 
there are no content regarding consumptio n tax in China’s subsidy notification. 
(v) Import prohibitions, restrictions, and licensing 57 
 
Switzerland Question 
According to para. 42, China prohibits the impor t of second-hand precision equipment. Could China 
specify which are the criteria used to determin e that these products are second-hand products? As 
second-hand products are not waste products, could Ch ina explain for which reasons it prohibits the 
import of these products and which are the rele vant international commitments in that case?  WT/TPR/M/199/Add.1 
Page 172  
 
  United States question 13 
Paragraph 42 of Part III of the report notes th at China prohibits the importation of second-hand 
precision equipment and used articles of HS secti ons 16 and 17 (machinery and transport equipment).  
Do these import prohibitions include previously used products that have been refurbished or 
remanufactured?   If so, please explain China’s jus tification for maintaini ng an import prohibition on 
refurbished and remanufactured machinery and equipment. 
Answer
 
Measures of import prohibition adopted by China on the import of used or wasted goods are 
consistent with Paragraph 121 of China’s Work ing Party Report and Article 2 of The Agreement 
on the Application of Sanitary and Phytosan itary Measures of WTO which stipulates that 
"Members have the right to take sanitary and phytosanitary measures necessary for the protection 
of human, animal or plant life" 
In accordance with the provisions in the Annex 1 and Annex 2 of the Basel Convention on the 
Control of Trans-boundary Movement of Hazardou s Wastes and Their Disposal, "the clinical 
wastes produced during the medical treatment s ervices of the hospitals, medical centers, and 
clinics" belong to the category of wastes for which control is n eeded, and "the wastes collected 
from households" belong to the category of wastes for which special consider ations are needed. In 
accordance with the provisions of the Article 1 and Article 4 of the Convention, every signatory 
country has the right to ban the import of the hazardous wastes listed in the Annex 1 and Annex 2 of the Convention. China has adopted the Basel Convention and also stipulates that the import of hazardous wastes is banned in the Law on Preven tion and Control of the Environmental Pollution 
Caused by Solid Wastes (Solid Waste Law). Therefo re, the ban on the used clothing identified as 
hazardous wastes by the competent Chinese administr ative departments is in full compliance with 
the applicable international environmental conventions. 
China does not deem second-hand equipment as waste product, and does not completely prohibit 
the importation of second-hand precision equipment.  
Pursuant to Regulation on Administration of Import and Export of Goods
，China published 
6 batches of Catalogues of Goods subject to Import Prohibition, which stipulates the used and 
wasted products subject to import prohibition are u sed mechanical and electronic products as well 
as used clothes. The importation of these two kinds of products may carry germ and bacteria as 
well as product of fatal safety flaw to market, thus causing harm to human health and safety. 
Before the Regulation and the Catalogues were pub lished, there had been quite some cases where 
imported used mechanical and electric products and clothes caused harm to people’s heath, life and property. These cases raised  serious concerns about these products among Chinese people. For 
example, it was reported both in newspaper and on TV that imported second hand endoscope 
caused serious medical accidents.  
With respect to used mechanical and electronic products, the State General Administration of 
Quality Supervision, Inspection and Quarantine,  issued Measures for the Inspection and 
Supervision Management of the Imported Used Mechanical and Electrical Products (the No. 37 order) on December 31, 2002. As regulated in th e said Measures, used mechanical and electronic 
products, which meet the conditions prescribed in the Article 2 of the Measures and China’s 
compulsory requirements in the applicable nationa l technical specifications about the sanitation 
and environmental protection, can be imported aft er being inspected and granted with Certificate 
on the Inspection and Quarantine of Imported Goods.  WT/TPR/M/199/Add.1 
 Page 173 
 
 
  United States question 14 
Paragraph 42 of Part III of the report indicates that quantitative restrictions on import licenses were 
eliminated in January 2005 and that China notif ied its import regime in October 2006.  Can China 
explain whether quantitative values are still captured or recorded on import licenses?  If so, what is 
China’s rationale for mandating that importers report the volume of their intended purchases if no 
restrictions are in place?  If it is for statistical purposes, would China agree that the same information 
could be obtained when the shipments clear customs?  
Answer  
There are only 10 HS 8-digit level tariff lines of pr oducts subject to import licence administration. 
These products are ozone-depleting materials and importers should identify the import quantity and 
import value as specified in contract when importers apply for import licences.  
For product subject to automatic import licensi ng, importers should also identify the import 
quantity and import value as specified in co ntract when they submit their applications.  
Statistical information indicated on an automatic  import licence will facilitate customs to verify and 
collect import statistics. Automatic import licensing adopted by China is only for statistics purpose, 
and does not constitute any quantitative restriction on  import. Since product subject to automatic 
import licensing are mainly imported in form of  bulk cargo, there were frequent cases where 
importers deliberately imported more goods than th e amount that they applied to import in excuse 
of over-shipment or short-shipment. Therefore, as  the basis of determining the margin of over-
shipment or short-shipment, import quantity indica ted on an automatic import licence is essential 
for the Customs to verify and collect import statis tics. Currently, short-shipment or over-shipment 
within the margin of ±5% is permitted by the Customs and can be declared at the Customs. 
However, for crude oil, processed oil, chemical  fertilizer and steel, permitted margin of over-
shipment or short-shipment is ±3% 
Canada Questions 16 
Can China please provide information on the grounds  for its import prohibitions on mineral products, 
ash of precious metals and base metals? 
Answer  
Under normal trade, China does not prohibit import ation of mineral products, precious metal or 
base metal. Prohibition on import of mineral slag, metal scrap and metal powder aims at 
environmental protection. 
Canada Questions 17 
Can China please provide information on the ways in  which it uses the statistics generated through the 
imposition of automatic import licenses on copper, co pper ores and concentrates, coal, aluminium and 
scrap steel? 
Answer  
China adopts automatic import licensing for statisti cs purpose. Data collected will both be used by 
research bodies of the government for analysis of macro-economics and macro trade environment 
and be provided to import enterprises and indivi duals for reference to comprehend the price trend 
and supply-demand situation. WT/TPR/M/199/Add.1 
Page 174  
 
  Brazil Question 8 
Regarding Chapter III, paragraph 42, of the Repor t by the Secretariat (WT/TPR/S/199), could China 
provide a list of the products (in terms of the Harmonised System) that are subject to import prohibitions as well as the rules that support such prohibitions?  
Answer
 
Please refer to the URL links indicted in footnote 45 of the paragraph. 
Brazil Question 9 
According to Chapter III, paragraph 47, of the Re port by the Secretariat (WT/TPR/S/199), China may 
refuse applications for import licenses when the ju stification for importation provided on the request 
is "unconvincing". Could China inform what are the requirements that should be fulfilled for the 
request to be considered "convincing"?  
Answer  
Please refer to the specific requirements for applica tion of import licenses set out in the relevant 
regulations. 
(vi) State trading  59 
 
United States question 17 
Paragraph 52 of Part III of the report discusses the li st of goods subject to state trading, but notes that 
the Chinese authorities did not identify the criteria u sed to adjust that list.  Please identify those 
criteria.  
Answer  
China does not annually adjust the catalogue of pr oducts subject to state trading, nor the criteria 
for adjustment. China gradually eliminated state tr ading or designated trading on natural rubber, 
wood, plywood, wool, acrylic, steel and vegetable oil after accession. China has honoured all the commitment regarding abolishment of state trading  and designated trading, and the catalogue of 
products subject to state trading is consistent with  Annex 2ª1 and 2ª2 to China Accession Protocol.  
(vii) Contingency measures 60 
 
Switzerland Question 
In para. 55, the Secretariat's report suggests that MOFCOM can decide to self-initiate an anti-dumping 
investigation, if it has sufficient evidence of the existence of dumping, injury, and the causal link.  
Could the Chinese authorities indicate on the basis of what specific criteria MOFCOM could decide to 
initiate an investigation in the absence of a comp laint by the domestic industry? Also, how can the 
Chinese authorities determine a possible causal link be tween dumping and injury before the launching 
of an investigation to justify an ex-officio  investigation? Since China h as not used in recent years the 
instrument of self-initiated anti-dumping investigations , are there any plans to fully renounce to such 
an option?  WT/TPR/M/199/Add.1 
 Page 175 
 
 
  Answer  
China does not have any plan to forgo the self-investigate an antidumping investigation initiated by 
the relevant authorities.   
According to article 4 of Interim Rules on Plac ing Cases on File for An tidumping Investigations, 
the domestic industry or the natural persons, legal  persons or other relevant organizations that 
represent the domestic industry may file an application for antidumping investigations. 
According to article 5.6 of Agreement on Implemen tation of Article VI of GATT 1994, if, in special 
circumstances, the authorities concerned decide to  initiate an investigation without having received 
a written application by or on beha lf of a domestic industry for the initiation of such investigation, 
they shall proceed only if they have sufficient evidence of dumping, injury and a causal link, as 
described in paragraph 2, to justify the initiation of an investigation. 
Brazil Question 6 
Paragraph 62 of Chapter III of the Report by the Secretariat (WT/TPR/S/199) refers to MOFCOM's 
Provisions on Responding to Anti-dumping Cases Relating to Export Products entered into force in August 2006. According to these provisions, MOFCOM  must promptly publish relevant information 
relating to investigations of or responses to anti-dumping cases, and the local counterparts of 
MOFCOM must immediately inform relevant enterp rises of such information. Could China provide 
an English translation of these Provisions or a summary of its contents?   
Answer
 
The main contents of the Provisions on Res ponding to Antidumping Cases concerning Export 
Products include the following: enterprises are encouraged to actively participate in responding 
anti-dumping cases against them; the trade and in dustrial associations should also provide 
assistance to the relevant enterprises; MOFCOM should promptly publish relevant information 
relating to anti-dumping cases against Chinese enterpri ses, including information on initiation of 
investigations, review, anti-absorption or anti-circ umvention investigations, etc. The Provisions 
also provide guidance on lawyer selectio n, information submission, etc.  
United States Question 18 Paragraph 56 of Part III of the report states:  "A ccording to the rules, information related to an 
industry-injury investigation, apart from classified information, must be notified to all interested parties."  Please explain what steps China’s Mini stry of Commerce (MOFCOM ) has taken since 2006 
to ensure all interested parties have timely access to adequately detailed, non- confidential versions of 
all submissions by other interested parti es and all documents ge nerated by MOFCOM. 
Answer
 
According to Article 14 of the Provisions on the Access to and Disclosure of Information on 
Industrial Damage Investigation, the investigatin g authorities would make all the public versions 
of the submissions and the non-confidential summery of such materials available at the 
information query office, within 7 days of receipt of materials by interested parties. The documents 
generated by investing authorities will be made av ailable at the information query office within 
10 days after the documents have been generated.  The above mentioned procedures make sure that 
interested parties could have timel y access to relevant information. WT/TPR/M/199/Add.1 
Page 176  
 
  United States Question 19 
Paragraph 57 of Part III of the report states th at "provisional measures can ... include imposition of 
provisional anti-dumping duties, or provision of de posits, bonds, or other forms of guarantees."  
Please explain what steps MOFCOM takes to conf irm that China’s General Administration of 
Customs collects the correct amount of anti-dumping duty and that other charges, such as the VAT, 
are not assessed on the anti-dumping duty. 
Answer
 
The anti-dumping duties are collected by customs of  China in accordance with the Customs Law of 
the People's Republic of China, Anti-dumping Regulation of The People's Republic of China and Regulations of the People's Republic of China on Import and Export Duties. Please refer to these 
three legal documents for the detailed procedure on the collection of anti-dumping duties. In case 
of any disagreement with the procedure or the resu lt of duty-collection, enterprise could apply for 
administrative reconsideration. Where the enterprise refuses to a ccept the result of administrative 
reconsideration, it could appeal to court in accordance with law. 
Canada Question 18 
Reference is made to "special circumstances" whereby anti-dumping duties may be lowered if a lower 
duty would be sufficient to remedy the injury caused by dumped import. Which bureau of MOFCOM undertakes such a review and what is the pr ocedure for launching and conducting such an 
investigation? 
Answer
 
Bureau of Industry Injury Investigation and Bureau of Fair Trade in MOFCOM are responsible 
for such investigations. 
Canada Question 19 
According to the Secretariat Report, price unde rtakings cannot be sought or accepted unless 
MOFCOM has made a preliminary determina tion on the causal link between dumping and the 
industry injury. Is there a prescribed time period in  which exporters can offer price undertakings to 
MOFCOM? If so, what is it?  
Answer  
According to Article 6 of the Interim Rules on Price Undertakings in Antidumping Investigations, 
offer of price undertakings shall be made no lat er than 45 days after the initial determination has 
been announced. 
Canada Question 20 
Is the same prescribed time period also applicable  to MOFCOM for suggesting price undertakings to 
exporters? 
Answer  
According to Article 7 of the Interim Rules on Price Undertakings in Antidumping Investigations, 
MOFCOM shall not suggest price undertakings or  accept offer of price undertakings by the 
exporters, before the affirmative initial determina tion on anti-dumping and injury has been made.  WT/TPR/M/199/Add.1 
 Page 177 
 
 
  Canada Question 21 
Under what circumstances does MOFCOM suggest price undertakings in anti-dumping duty 
proceedings? Are such suggestions  accorded greater weight than proposals which emanate from 
exporters? 
Answer  
Interim Rules on Price Undertakings in Antid umping Investigations doesn’t specify the 
circumstances under which MOFCOM could suggest  price undertakings to exporter. MOFCOM 
would consider possibility of such an option a ccording to the particularity of the case. 
According to Article 5 of Interim Rules on Pr ice Undertakings in Antid umping Investigations, 
MOFCOM shall not force exporters to offer price und ertakings. Refusal to offer or accept price 
undertakings shall negatively influence the determ ination of anti-dumping margins. As a result 
there aren’t any greater weight of government  proposals than proposals which emanate from 
exporters. MOFCOM would decide whether to accept price undertakings according to the rules of Interim Rules on Price Undertakings in Antidumpi ng Investigations as well as the particular 
situation of each case. 
Canada Question 22 The Secretariat Report also states  that, in the case of price undertakings, MOFCOM can resume a 
suspended/terminated investigation if the expor ter violates the price undertaking or if MOFCOM 
considers it necessary for other reasons. Can China clarify on what grounds would MOFCOM resume 
an investigation if there has not been a breach of price undertaking arrangement? 
Answer
 
According to Article 5 of Interim Rules on Pr ice Undertakings in Antid umping Investigations, 
MOFCOM and exporters could withdraw price und ertaking commitment in consistence with the 
price undertaking agreement. In accordance with Article 23 of the Interim Rules on Price 
Undertakings in Antidumping Investigations ，if the price undertakings contradict with public 
interest, the investigating authorities could withdraw the decision on the acceptance of price 
undertakings. 
In case where MOFCOM or exporters withdraw  price undertaking agreement, MOFCOM would 
resume investigation after proper pr ocedures have been gone through. 
Canada Question 23 Paragraph 59 states that final measures are for fi ve years and may be extended following a review. 
What are the procedures for initiating a sunset review? 
Answer
 
Usually the investigating authorities issue an en d-of-term notification, which informs domestic 
industries on their rights for application for sunset review six months before the date of 
termination of an anti-dumping measure and then initiate sunset review pursuant to the 
application of interested parties. The Investiga ting authorities usually notify the embassies in 
China of the exporters 7 days before the registratio n of a case and issue an announcement on the 
date of registration to inform known producers and exporters and at the same time transfer the application letter to the embassies in China of the exporters  WT/TPR/M/199/Add.1 
Page 178  
 
  In addition, the investigating authority could self-i nitiate sun-set review, but so far there have been 
no such cases. 
Canada Question 24 
According to the Secretariat Report, the decision to  levy anti-dumping duties is made by the Tariff 
Commission of the State Council, based on the su ggestions made by MOFCOM. Can China clarify 
whether the Tariff Commission of the State Council has any latitude to diverge from MOFCOM’s 
suggestions, and, if so on what basis?  
Answer
 
According to Article 38 of China’s Anti-dumping  Regulation, MOFCOM is responsible for giving 
suggestions on levying anti-dumping duties. The  State Tariff Committee under the State Council 
makes decisions on the basis of MOFCOM’s sugg estions. So far the State Tariff Committee has 
never made negative decisions on MOFCOM suggestions. 
Canada Question 25 
The Secretariat Report indicates that Parties may appeal MOFCOM decisions under the 
Administrative Reconsideration Law or to the Supreme People’s Court.  
Please explain the differences between these two procedures, if any, and the circumstances under 
which appeals may be brought 
Answer  
In accordance with Article 53 of Anti-dumping reg ulation, in case of any disagreement with the 
determination of MOFCOM, enterprises could appl y for administrative reconsideration or file a 
case in court. The two procedures are guided by different laws. Administrative reconsideration is 
subject to Law of the People's Republic of  China on Administrative Reconsideration. 
Administrative lawsuit is subject to Administra tive Procedure Law of China. Interested parties 
could choose either administrative reconsideration or  administrative lawsuit in accordance with the 
law. 
Canada Question 26 
Please expand on MOFCOM’s provisions on respondi ng to Anti-Dumping Cases Relating to Export 
Products. What assistance, if any, is offered by MOFCOM to exporters engaged in anti-dumping duty 
proceedings by other countries? How does this as sistance differ when the investigation involves a 
countervailing measure? 
Answer  
MOFCOM is responsible for public services an d does not provide any financial support to 
enterprises in their responses to anti-dumpi ng cases abroad. In countervailing investigations 
initiated by foreign authorities against China, MO FCOM is responsible for submitting answers to 
government questionnaires to the investigating au thorities on behalf of China. MOFCOM also 
participates in the field investigations makes co mments and consultations with regard to the 
practices of investigating authorities that are inconsis tent with WO rules or their domestic laws and 
regulations. The abovementioned Provisions has no thing to do with measures directly affecting 
imports.  WT/TPR/M/199/Add.1 
 Page 179 
 
 
  EC Question 25 
According to the Report, from 1 January 2005 un til end December 2006 China initiated a total of 
35 AD investigations 24 of which in the year 200 5 and 11 in the year 2006. As at 30 June 2007, 
among the 24 investigations initiated in 2005, fi nal measures had been adopted in 13 cases; and 
among the 11 investigations initiate d in 2006, final measures had been adopted in 3 cases. We urge 
China to note that initiating an AD investigation can have a significant impact (the so-called ‘trade-
chilling’ effect) on both the product and the compan y under investigation. In this respect we 
encourage China to be more cautious in initia ting investigations and to do so only if the AD 
authorities have thoroughly examined the eviden ce. Could China please indicate how many among 
the 11 investigations initiated in 20 06 have been terminated as yet? 
Answer  
In 2006 China initiated 10 anti-dumping investigations, all of which have been finished and final 
measures adopted. 
Argentina Question 
Paragraph 55, page 60  This pa ragraph states that anti-dumping complaints may be submitted to 
MOFCOM in writing by any domestic industry, or  by natural or legal persons or relevant 
organizations on behalf of dom estic industry.  What proporti on of domestic production must 
applicants represent in order to be considered to  be acting on behalf of the domestic industry? 
Answer  
According to Article 5 of Interim Rules on Plac ing Cases on File for Antidumping Investigations, 
domestic industry refers to all producers of like products in People’s Republic of China, or 
producers the accumulated output of which account for over 50% of total production of like 
products in China. 
According to Article 6 of Interim Rules on Plac ing Cases on File for Antidumping Investigations, 
where the output of the applicant is less than 50% of  the total output of the like products of China 
but the total numbers of those who support an a pplication occupies 50% or more of the total 
amount of those who support or opp ose an application, and if the output of the domestic producers 
who support an application occupies not less than 25% of the total output of the like products, such 
application shall be deemed to be representing the domestic industry. When determining the output 
of those who support the application as mentioned above, the output of the applicant shall be included. 
Chinese Taipei Question 
According to the Report, anti-dumping complaints may be brought to MOFCOM in writing by any 
domestic industry, or by natural or legal persons, or by a releva nt organization on behalf of the 
domestic industry. Could an inves tigation be initiated based on a written application by the authority 
in charge of a domestic industry, e.g. the Ministry  of Industry and Information, or the Ministry of 
Agriculture? 
Answer
 
According to article 4 of Interim Rules on Plac ing Cases on File for An tidumping Investigations, 
the domestic industry or the natural persons, legal  persons or other relevant organizations that 
represent the domestic industry may file an application for antidumping investigations. WT/TPR/M/199/Add.1 
Page 180  
 
  According to article 5.6 of Agreement on Implementa tion of Article VI of GATT 1994, If, in special 
circumstances, the authorities concerned decide to  initiate an investigation without having received 
a written application by or on beha lf of a domestic industry for the initiation of such investigation, 
they shall proceed only if they have sufficient evidence of dumping, injury and a causal link, as described in paragraph 2, to justify the initiation of an investigation. 
(viii) Standards and other technical requirements 63 
 
Costa Rica Question 17 
¿Cómo se da la aplicación de las normas obligatorias nacionales, sectoriales y locales en caso que el 
contenido de las mismas esté referido a un mismo producto o grupo de productos? ¿Cuál prevalece 
para efectos de los productos que son impor tados de terceros países? (Párrafo 70) 
Mexico Question Add.2 
70  This paragraph states that in addition to na tional standards, there are also sectoral, local, and 
enterprise standards. Please explain what these standa rds consist of, how they differ from each other, 
and whether there are differences in terms of their application.  
Answer
 
There are 4 types of standards: national standards , professional standards, local standards and 
enterprise standards. 
National standards: the technical requirements that  need to be uniformly applied nationwide.  
Sectoral standards: Wherein the absence of national standards, technical requirements for a 
certain sectoral need to be unified; the sectoral standards are formulated and shall be phased out 
uponce the publication of national standards. 
Local standards: Where, in the absence of both nati onal and sectoral standards, safety and sanitary 
requirements for industrial products need to be unified within a province, an autonomous region or a municipality directly under the Central Government , local standards are formulated, and shall be 
phased out upon publication of th e national or sectoral standards. 
Enterprise standards: Where, in the absence of both national and sectoral standards for products 
manufactured by an enterprise, standards for the en terprise a formulated to serve as the criteria for 
the production. 
Mexico Question Add.2 
68  This paragraph refers to the review of China's national standards and to the fact that a number of 
standards would be abolished. Does China's legislat ion include provisions for the periodic review of 
standards or technical regulations for the purposes of amendment or elimination? 
Answer
 
Yes. The Standardization Law stipulates that "aft er the standards come into force, the department 
that formulated them shall, …, make timely revi ews of the current standards to determine if they 
are to remain effective or are to be revised or phased out.". 
Mexico Question Add.2  WT/TPR/M/199/Add.1 
 Page 181 
 
 
  70  This paragraph states that in addition to natio nal standards, there are also sectoral, local, and 
enterprise standards. Please explain what these standa rds consist of, how they differ from each other, 
and whether there are differences in terms of their application. 
Answer  
According to relevant Chinese legi slation, local standards can be  formulated where there is no 
national or sector standards but there is need to have the uniform requirements in provinces, 
autonomous regions or municipalities directly un der central administration. Enterprise must 
organize its production based on a standard which must not be lower than a mandatory standard available. When the former is not available,  enterprise formulates its own standards.   
Mexico Question Add.2 
72  This paragraph states that China does not directly implement UNECE standards, but that some of 
the latter's technical content is incorporated in co mpulsory certification standards. What is meant by 
compulsory certification standards?  
Answer
 
Standards serve the purpose of compulsory certification. 
Philippines Question 3)a, 3)b In March this year, the Philippine Embassy (PE) in Beijing received an advice from China’s General 
Administration of Quality Supervision, Inspecti on and Quarantine (AQSIQ) that ice cream from the 
Philippines have been found to contain Tartrazine  that exceeded food additive standards.  In same 
notice, AQSIQ requested the Philippines to take effec tive measures to control Tartrazine and to ensure 
that food products exported to China are secure a nd hygienic.The Philippines seeks clarification with 
respect to food standards in China.  What levels  of Tartrazine are considered excessive? What does 
China consider as "effective measu res" to ensure that food produc ts exported to it are "secure and 
hygienic"? 
Answer
 
Pursuant to Sanitation Standard on Food Additives (GB2760-2007), limit to Tart razine is 0.05g/kg, 
while Tartrazine within the ice cream imported from Philippines is 0.062-0.15g/kg. Therefore, 
Chinese inspection and quarantine author ities deem it as unqualified product.  
The "effective measures" that China hopes Philippine  to take is that Philippine can notify those 
export enterprises in Philippine to China and strengthen inspection and quarantine on food export to China to ensure food products to meet with China’s standards.  
Philippines Question 4)a, 4)b, 4)c, 4)d 
 The Philippines has received reports that exports of fresh young coconuts (FYC) has been banned 
entry into China; Customs authorities in Xiamen  have refused to process import documents of 
Chinese importers.  The Philippines has repeatedly inquired with the AQSIQ for clarification on the 
ban but has so far received no response.  Would China be able to confirm that there is indeed a ban on 
the import of FYC from the Philippines? If so, what  is the basis for the ban? What quarantine 
requirements are imposed on FYC?  What is the status of the pertinent information on coconut risk 
analysis that the Philippines subm itted to AQSIQ last March 2008? WT/TPR/M/199/Add.1 
Page 182  
 
  Answer
 
AQSIQ has not received any application regarding FY C from Philippine so far. China would like 
to ask Philippine to provide more information about  the issue, such as when and to whom the 
application is submited. Philippine can also directly contact AQSIQ for solution.  
India Question Q1 
Would China indicates as to when the activati on of the Joint Working Group for expeditious 
implementation of bilateral MoU on Ap plication of SPS would be done?   
Answer  
China welcomes the proposal from India to establish a Joint Working Group. China would like to 
discuss with India in full details about this issue. 
India Question Q2 It may be recalled, during India-China discussi ons on China’s accession to WTO, both countries had 
agreed to work on expeditious entry of 17 fruits a nd vegetables into the Chinese market.  So far only 3 
items have been allowed (mangoes, grapes and bitte r gourd) into the Chinese market despite the fact 
that technical details have been provided for a ll the 17 fruits and vegetables to the Chinese side.  
Would China to indicate time lines as to when th e remaining 14 fruits and vegetables would be 
allowed for imports from India into China?   
Answer
 
China welcomes the access of 17 fruits and vegetabl es into Chinese market. In accordance with the 
principles set in the WTO SPS Agreement and for the purpose of protection of China’s agricultural 
and biological safety, China conducts pest risk  analysis on these products to see if they meet the 
quarantine requirements. So far, 4 products (mango es, grapes, bitter gourd and tobacco leaves) are 
allowed to enter into the Chinese market. For th e access of other fruits and vegetables, we need 
active cooperation from the Indian side by prov iding as soon as possible requested technical 
documents to facilitate our risk analysis. 
India Question Q3 
A Protocol was signed on the issue of Basmati ri ce in November 2006 but this has not become 
operational because a visit by Chinese rice experts to I ndia is pending.  We request China to expedite 
the visit of the experts and convey their likely dates of travel?   
Answer  
On March 26, 2008, AQSIQ wrote to the Indian side making specific proposals for the quarantine 
investigation and relevant activities for Chinese rice experts. China is waiting for a feedback. 
China wishes that the Indian side provide the program proposal for the rice expert visit at their 
earliest convenience so as to exped ite the visit of the Chinese experts. 
India Question Q4 
Indian exporters of dairy and meat products are keen  to expand trade with Chinese partners, but their 
efforts are impeded by lack of clarity in terms of technical standards.  For example, bovine meat and 
meat products from India are not allowed entry into the Chinese market on grounds of concern  WT/TPR/M/199/Add.1 
 Page 183 
 
 
  surrounding FMD in India, even though the disease mana gement of FMD in India is scientific and as 
per internationally accepted standards.   There are areas which are DMB free in India from where 
such imports should be permitted as is done by ma ny countries importing Indian bovine meat and 
meat products. Would China remove the restriction on import of bovine meat and meat products from 
India?  Would China expedite visit of its experts to India for inspection of the meat production units 
which is pending for long time? 
Answer  
There is a complete set of rules and procedures for market access of imported meat products in 
China. These rules and procedures are consistent with rules of WTO and Organization for Animal 
Health, as well as other international practice. China welcomes the timely application from India 
and China will initiate the access process whenev er appropriate. If more detailed information is 
needed, competent authority in India can contact AQSIQ.  
Regarding the approval of dairy exporters in India, China has never adopted an approval system on 
any foreign dairy companies which export their products to China, but only on their dairy products to China. However, since India is still plagued with FMD and DMB, China has to adopt risk 
analysis on dairy products imported from India to ensure the sanitary safety of dairy products. So 
long as the processing technique is consistent with  OIE’s requirement and the risk is tolerable, the 
product can be imported.  
To facilitate and streamline importation of dai ry products, China demanded the competent 
authorities from all countries which export dairy pr oducts to China to submit sanitation certificate 
in a format required by China as early as in  2006. However, India did not respond to this 
requirement while more than 10 countries such  G.B., France, Germany, Australia and New 
Zealand all did.  
China would like to ask India to give positive response to this certificate issue and submit necessary 
risk analysis documents to facilitate the risk assess ment process in China. So long as the risk is 
tolerable, dairy products from India will be imported.  
India Question Q6 In the India-China Joint Statement issued during Prem ier Wen’s visit to India, "the two sides agreed 
to constitute a Joint Working Group to implemen t expeditiously the MOU on Application of SPS 
between the Chinese General Administration of Qua lity Supervision, Inspec tion and Quarantine and 
the Indian Ministry of Agriculture." The two sid es agreed to activate this JWG during the 7th JEG 
Meeting in 2006. This JWG is yet to materialise.  Would China indicate the likely date by which the 
JWG would be implemented?  
Answer
 
China welcomes proposals and suggestio ns from India to initiate the JWG. We would like to enter 
into bilateral discussion. 
India Question Q7 
The quarantine authorities in China in sist on taking only one item at a time for pest risk analysis and 
further insist on a separate protocol to be signe d for each individual item progressively. Even though 
understandings in this area were reached during th e JEG meeting of March 2006, Chinese side has 
been reluctant to take a proactive approach towa rds Indian concerns.  Would China clarify on this 
approach? WT/TPR/M/199/Add.1 
Page 184  
 
  Answer
 
Due to the difference of pest species and risks born by different types of plants and plant products, 
different measures on planting, processing and managi ng exist, which makes the necessity for risk 
analysis for individual products. This is also a common practice among other Members. The Chinese side attaches great importan ce to Indian concerns, and will take active measures to solve 
them. We welcome the cooperation from the Indian side. 
Chinese Taipei Question 
Table Ⅲ.4 shows the status of China’s standards from 2002 to 2006. Could China please provide 
updated information to the end of 2007. 
Answer
 
Updated information to the end of 2007w ill be provided at an appropriate time. 
Chinese Taipei Question 
 
To facilitate trade, would AQSIQ consider shorteni ng the timeframe for the issuing of a quarantine 
permit? Furthermore, where it is a case of the sa me products from the same manufacturer, would it be 
necessary to apply for such a permit for each import, or is it planned for some "fast-track" procedure 
to be made available? Regarding the exports of an imals, plants and their products, could China kindly 
provide a copy of its "Catalogue of Entry-Exit Commodities Subject to Inspection and Quarantine" 
for our reference? Moreover, since China has indicated that "Exports must apply to CIQs at the port of 
export for quarantine approval…" and "Goods failing to meet the quarantine requirements are not 
allowed to leave the country", could China kindly pr ovide details of the investigation and prevention 
measures undertaken in order to achieve this goal? 
Answer  
We could provide a copy of the "Catalogue of Entry-Exit Commodities Subject to Inspection and 
Quarantine", though the Catalogue is up to revision from time to time. 
Exporting products covered by the above-mentioned Ca talogue must be inspected by the local CIQ 
before leaving for their destination. 
Thailand Question 7 
We note from the Secretariat Report that China is  a Member of the UNECE 1998 Agreement, which 
is a Global Agreement.  As such, members shoul d be under an obligation to comply with the 
Agreement’s regulations on technical inspection.  However, UNECE standards have not yet been 
directly implemented for China’s standards for automobiles.  We would appreciate details on why China has incorporated only some technical co ntents of the UNECE standards into its own 
compulsory certification standards.  Could Chin a elaborate on which parts of the UNECE technical 
content are not included in China’s certification standards, and whether the implemented technical 
content is enforced any more strictly than UNECE standards? And if so, how? 
Answer
 
China is a member of the UNECE 1998 Agreement, and is considering joining the 1958 Agreement 
in future. According to our legislative system, China does not directly implement UNECE  WT/TPR/M/199/Add.1 
 Page 185 
 
 
  standards but transfer them into China’s standar d for implementation. Please refer to the website 
of CNCA (www.cnca.gov.cn)for detailed information. 
Thailand Question 8 
According to the Report, "China has promulga ted over 1,800 national standards concerning food 
safety, and more than 2,900 sectoral standards for th e food industry."  We would appreciate it if China 
could clarify and ensure that nati onal standards and sectoral standards are not more trade-restrictive 
than necessary. 
Answer  
In China, mandatory and voluntary standards are all developed and implemented in accordance 
with the principles of relevant WTO Agreements. On e major principle we observe is the principle of 
least trade-restrictiveness. 
Thailand Question 9 
According to the Report, China has administered two different product certification systems – the 
Compulsory Product Certification System and the China Compulsory Certification (CCC) mark, and 
the China Quality Certification Centre (CQC) Voluntary Product Certification System (the CQC 
mark).  These two systems cover 22 groups consisti ng of 159 subcategories of products for which the 
CCC mark is required, and around 500 subcategories of  products that are not covered by CCC.  We 
understand this to mean that over 600 subcategories of products to be exported to China from third 
countries must be granted at least one of the tw o certification marks before entering the Chinese 
market.  We would appreciate it if China could clar ify and ensure that these two certification systems 
do not act as unnecessary impediments to trade.  We would further like to k now whether products 
which fail to conform to the CQC voluntary pro duct certification system would be treated less 
favourably than those that do conform. 
Answer  
The Compulsory Product Certification (CCC) Syst em is developed and im plemented equally to 
domestic and imported products. The purpose of th is system is to ensure safety and security of 
covered products to human beings and the environm ent. The best effort has been made by the 
Chinese Government to reduce its negative effect on trade to the least. As the Thai delegation 
indicated, the CQC certification is totally volunta ry; therefore CQC certification has no effect on 
market access. 
Thailand Question 10 
With regard to the labeling requirements stipulati ng that labels must be written in Chinese and state 
all information related to the product and the manuf acturer, we would like China to clarify whether 
the labels can be written in more than one language, i.e. Chinese and En glish.  Requiring labels not to 
be written in more than one language may not be  consistent with Article 2.2 of the TBT/WTO 
Agreement which stipulates that technical regulati ons shall not be more trade-restrictive than 
necessary to fulfill a legitimate objective.    
Answer  
While the Chinese regulation requests products sold on  the Chinese market be attached with labels 
in Chinese, it does not prohibit the appearance of other language on the label. WT/TPR/M/199/Add.1 
Page 186  
 
  United States Question 20 
In paragraphs 67 to 69 of Part III, the report descr ibes China’s efforts to increasingly align its national 
standards with international ones.  Recently, how ever, China announced new mandatory requirements 
covering a broad range of inform ation technology products (such as routers, firewalls, operating 
systems, smart cards, anti-spam products, etc).  By May 2009, these products must comply with 
mandatory third-party testing and certification to determine their conformity with new information 
security regulations.  While most WTO Members (i ncluding the United States) may share the goal of 
maximizing the security of networks, the United States is aware of no other WTO Member that has instituted mandatory testing and certification requi rements for commercial products in order to 
achieve information security goals.  Given the burdensome and trade-restrictive effects of these 
requirements, how does China justify its extreme a pproach, considering that no other WTO Member 
appears to have instituted any comparable requirements? 
Answer
 
With the development of information society, the information security has become a great concern 
for the whole society. Many Members have promulgated  rules and regulations in this regard. China 
plans to adopt compulsory licensing policies neces sary for the protection of information security. 
China has, in line with the transparency requirem ent of WTO, made notifications to the WTO and 
provided sufficient time for comments. Regulati on on information security is a new issue 
challenging all Members. We are currently commun icating with concerned Member on this issue 
and would like to continue this communication so as to enhance information security in the 
process of development of information society. 
United States Question 22.a, 22.b Paragraph 74 of Part III of the report referenc es a number of different government bodies within 
China that have overlapping responsibilities for de veloping and enforcing food standards. Can China 
clarify the process for verifying that national standa rds are being uniformly applied to domestic and 
imported food products?  For example, can China verify  that the national standards being used to test 
the food safety of imported products are also being used to test the food saf ety of the like domestic 
products sold at wholesale, wet and retail mark ets? Does China have data on the quantities of 
disqualified imported food products versus disqualified like domes tic products?  If so, what does the 
data show? 
Answer
 
Mandatory standards for food, like all other mandatory standards, apply equally to both domestic 
and imported products. There is no addi tional requirement for imported food.  
AQSIQ exercises regularly random sampling an d surveillance on products in the field of 
circulation. The standards used for this activity are exactly the same as those used for import 
inspection.   
Relevant data on the quantities of disqualified imported food products and disqualified domestic 
products can be found in the White Paper on Food Quality and Safety issued by the State Council 
Information Office in August 2007. 
United States Question 22.c 
What steps is China taking to ensure and demons trate food safety standards are based on science and 
an appropriate level of protection?  WT/TPR/M/199/Add.1 
 Page 187 
 
 
  Answer  
China has taken the following steps to ensue and demonstrate that food safety standards are based 
on science and are appropriate: 
 1. To actively adopt international standards, especially the CAC standards. 
 2. Development of standards has been based on risk assessment. 
 3. The process of standards development is open, transparent and participatory.   
 4. Where there is deviation between Chin ese technical regulations and international 
standards, we would notify to WTO as required.  
 5. To modify the standards in a timely manner according to the feedback during 
implantation and the new development of international standards. 
United States Question 23 Paragraph 76 of Part III of the report describes China’s efforts in the area of food safety.  What steps 
is China taking to ensure that good agricu ltural practices, good aquacultural practices and good 
manufacturing practices are taken into account?  
Answer
 
CACN has formulated a system on Good Agricultura l Practices (GAP) standards and certification, 
which includes Good Aquacultural Practices. This ha s contributed positively to the promotion of 
food safety level. For detailed efforts in this regar d, please refer to the Report of Secretariat Part III 
para.82.  
United States Question 24.a 
Paragraph 82 of Part III of the report discusses China’ s certification of animal feed, a process that is 
burdensome and time-consuming. What steps is Ch ina taking to ensure that the facilities approval 
process is completed in a manner that will avoid un necessary disruptions to trade and still provide the 
appropriate level of protection? 
Answer  
Currently, certification of animal feed is voluntary.  Related fee charge and time requirements must 
comply with requirements set in the Regulations on Certification and Accreditation. China is now 
working on a management rule, under which feed  exporting enterprises must be recommended by 
competent authorities in exporting Members,  and China will conduct random check. 
United States Question 24.b , 24.c, 24.d 
China requires that product registration requests be processed by the Ministry of Agriculture (MOA), 
and this process can take longer than one year.  Wh at steps is China taking to shorten the processing 
time? China’s product registration process requires that companies provide the formula for their 
products, which involves their intellectual property.  Can China explain why it requires this level of 
detail to ensure the safety and quality of animal f eed?  Is China considering alternative, less trade-
distorting requirements for registering animal feed  that will still provide the appropriate level of 
protection?  Please explain. China prohibits the presen ce of any ruminant materials in pet food.  To WT/TPR/M/199/Add.1 
Page 188  
 
  confirm that products are ruminant-free, China conducts Polymerase Chain Reaction (PCR) tests, 
instead of the more reliable enzyme-linked immunos orbent assay (ELISA) tests.  False positives with 
the PCR tests are a recurring problem due to unrel iable sampling methods.  What steps is China 
taking to begin using the ELISA tests?   
Answer
 
As to the test method on pet food, bilateral discussions have been conducted between technical 
experts of US and China. Currently, ELISA test method is still at a pre liminary stage, and takes 
time for further development and improvement. Efficient PCR tests are the only choice at present. China is open to further technical discussions, an d will be ready for technical exchanges with the 
U.S. side if they have mature ELISA tests. 
Costa Rica Question 16 De acuerdo al sistema regulatorio de China,  existen normas voluntarias y normas obligatorias 
(entendidas como reglamentos técnicos). De estas normas obligatorias que porcentaje ha sido 
notificado al Comité de Obstáculos Té cnicos de la OMC? (Párrafo 70) 
United States Question 25 
Paragraph 85 of Part III of the report identifies th e various laws and agencies involved in China’s 
sanitary and phytosanitary (SPS) regime.  The Un ited States notes that publication and adoption of 
food safety and quality standards without proper notification to the WTO is still occurring on a 
frequent basis.  What steps is China taking to remedy this problem? 
EC Question 36 
Could China in detail explain how the Chinese notif ying authority ensure that the transparency 
obligations laid down in the TBT agreement ar e comprehensively respected, covering proposed 
technical regulations and conformity assessment pr ocedures elaborated by the different government 
agencies? 
Answer
 
The Chinese government specifically issued a St ate Council document (the 50th in 2002) requiring 
relevant government agencies to fulfil the tr ansparency obligation under the WTO agreements, 
including the obligations of making notific ations and answering enquiries under the TBT 
Agreement. Relevant government agencies have  been working together to enhance their 
understanding of these obligations and the way of ha ndling notifications. In this regard, intensive 
training has been organized. Aside from that , the Ministry of Commerce alerts other relevant 
government agencies to comply with transparen cy obligations under TBT agreement when drafting 
regulations. The experience of China’s notificatio n in recent years has shown that this mechanism 
has worked well. At the 5th special meeting of information exchange of WTO/TBT committee, the 
Chinese expert shared China’s experience with other Members.  
The Chinese government attaches great importance to  the issue of notification and transparency 
obligation under TBT and SPS agreement. We ha ve established TBT notification and Enquiry 
points in AQSIQ. A great deal of human and fina ncial resources have been devoted to deal with 
information distribution, internal coordination, te chnical formatting of notification and translation 
related to TBT/SPS notification and enquiry obligatio ns. Still, this is a great challenge to all 
Members. China as a developing country has made  great efforts in fulfilling its transparency 
obligations following China’s accession to WTO. Till now, we have made 426 TBT notifications to  WT/TPR/M/199/Add.1 
 Page 189 
 
 
  the WTO. China will continue its efforts in fulfilli ng its obligation of transparency in accordance 
with the rules and requirements under the TBT Agreement. 
EC Question 45 
The EC remains concerned about the high costs of registration of toxic chemicals. The EC 
understands that China was contemplating the idea of revising the regulati on of import and export 
registration of dangerous chemicals and/or introducing a deposit system, as already in place in other 
countries. Could China inform on the status of a potential registration legislation review and 
introduction of a risk-based deposit and accountability  insurance systems as well as on the related 
consultation process of foreign authorities and indus try, and clarify on when registration fees will be 
brought in line with levels co mmonly applied internationally? 
Answer  
China is in the process of revising the Safety Re gulations on Hazardous Chemicals, Environmental 
Administrative Measures on the Import and Export of Prohibited and Highly Restricted Hazardous 
Chemicals and will revise the registration method and adjust the registration fees for hazardous 
chemcals, new chemicals and toxic chemicals in ac cordance with the newly revised regulations and 
relevant international practises. 
EC Question 48 
The Chinese authorities contemplated a regulatory fra mework for refurbished medical devices which 
would allow placing them on the Chinese market  under the same conditions required for new 
products. Such ban on refurbished pr oducts is not justified according to the EU as in refurbished 
medical devices are subject to the same requirement s as new medical devices. Could china inform on 
the status of implementing a new framework and on  when it is expected to enter into force? 
Answer  
Government agencies, including AQSIQ and Mini stry of Health, are currently undertaking a 
comprehensive assessment on the impact of remanuf actured health equipments on human safety, 
environmental protection, economic cost, quality inspection and mark et surveillance. So far there 
is no timetable for the introduction of a new legal framework. 
EC Question 26 
On what conditions are non-domestic stakeholders active or established in China invited to give 
comments on proposals that may affect their trade with or in China? 
Answer  
Development of standards in China is open for comments from all people. 
EC Question 27 At what stage are non-domestic stakeholders invite d to give comments on proposals that may effect 
their operation with, or in, China? WT/TPR/M/199/Add.1 
Page 190  
 
  Answer
 
Comments could be forwarded at the stages of  standard planning, comment period and standard 
implementation. 
Costa Rica Question 15 
China menciona que la Administración de Normaliz ación de China, es el organismo encargado de la 
normalización. Como tal, ha aceptado y aplica el Código de buena conducta para la elaboración, 
adopción y aplicación de normas, contenido en el an exo 3 del Acuerdo sobre Obstáculos Técnicos al 
Comercio de la OMC? (Párrafo 66) 
EC Question 28 
The Standard Administration of China (under AQSIQ) issued an update of its rules applicable for 
Technical Committees responsible for the promulgati on of National Standards in China: The updated 
regulation was published on the SAC website on Jan  28, 2008 and includes following new sentence: 
"Regarding market opening, it is allowed that fo reign enterprises participate in the activities of 
Technical Committees as observer , the details will be decided by relevant agency and organization 
"."Observer" status means that this entity has no active voting rights in this Technical Committee. 
However, it remains unclear what defines a "foreign enterprise". As per experience, the term "foreign" 
addresses ownership and management and not the legal seat of the entity. In the EC's view, this new 
rule seems not to be fully compatible  with the principle of "National Tr eatment". It is a reversal of the 
previous principle where it was up to the Technical Committee (TC) to set up rules of participation and to decide how to deal with the participation of foreign owned enterprises. In most TC's full 
participation for foreigners was possible. Could Ch ina comment and explain this recent modification? 
Answer
 
Foreign enterprises are welcome to participate in China’s standardization activities. In this regard, 
China has notified its decision of accepting WTO "Code of Good Practice for the Preparation, Adoption and Application of Standards" (G/TBT/CS/N/143) to the WTO and ISO/IEC according to WTO/TBT Agreement. We would like to confir m that China will carry out its standardization 
activities under the "Code of Good Practice". 
EC Question 29 
If we interpret table III.4 correctly, since year 200 2 the ratio of standards based on international 
standards has increased from 44.2 to 46.4 in 20 06 (about 0.5/year) (see Table III.4). The authorities 
state that they aim to align 85% by 2010. Could China confirm whether the figure of 85% alignment in 2010 is achievable and remains a firm objective? 
Answer
 
China is confident that the target of 85% alignment in 2010 is achievable and we confirm that this 
remains a firm objective 
EC Question 30 
In the report of 2006 it was said that the total numbe r of national standards would be reduced by 23%. 
From table III.4 we can see that on the contrary the number of national standards is increasing again. 
Could China explain this contradiction, if any?  WT/TPR/M/199/Add.1 
 Page 191 
 
 
  Answer  
With the development of Chinese economy, the demand for standards increase and therefore the 
number of standards will be on the rise. 
EC Question 31 
The EC has seen on several occasions that Chin a has adopted standards based on international 
standards but with some differences that create diffi culties for importers in complying. We would like 
to recall that China should make such changes onl y when they are essential to fulfil a legitimate 
objective. There are also cases where China has adopte d international standard but the basis of an out-
dated version of the international standard. C ould China explain why such cases occur and what 
China intends to do to remedy this? 
Answer  
With regard to China’s adoption of so-called out-dated version of international standards, China 
would like to receive more specific information w ith concrete examples from EC in order to make 
concrete studies of the cases.. 
EC Question 32 
Could China provide updated information rega rding which standards will be aligned with 
international standards?  
Answer  
Relevant information is availabl e at SAC’s website: www.sac.gov.cn. 
EC Question 33 
Could China confirm if products in the ICT sector are included in the exercise of aligning national 
standards with the respective internatio nal standards and give details on this? 
Answer  
Relevant information is availabl e at SAC’s website: www.sac.gov.cn. 
EC Questions 34-35 
The EC has seen on several occasions that China h as integrated European (EN) standards in the 
Chinese standardization system with some differen ces that may create difficulties for importers in 
complying. It is difficult to identify the link betw een Chinese and European st andards since they are 
not always properly referenced and the modificati ons are not listed. Could China explain how the 
adoption of EN standards is regulated in China?  Could China provide updated information regarding 
which Chinese standards are aligned with which EN standards? 
Answer  
Whereas national standards are actually the adoptio n of European standards, there will be relevant 
records readily availabl e for easy reference. WT/TPR/M/199/Add.1 
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  EC Questions 37-38 
Could China confirm whether in some cases Chinese National Standards or Chinese Industry 
Standards, which are declared as "voluntary", can be made de facto mandatory through compulsory 
certification or licensing procedures? How is th e notification procedure laid down in the TBT 
Agreement complied with in these cases? We note that  China’s standards for electrical equipment for 
medical use is only 30 per cent aligned with intern ational standards (Paragraph 69 on page 63-64 of 
WT/TPR/S/199).What is the reason for this, and does China intend to align these standards as a 
priority? 
Answer
 
Recommended standards could be referred in comp ulsory certification system when it is necessary. 
In this case, "voluntary" standards become de facto "mandatory" standards. This practice, 
common among Members such as the EC, could fa cilitate the combined effort of both market 
economy and government regulation. Once such a ca se takes place, China notifies it to the WTO as 
a technical regulation, or confor mity assessment procedure.    
EC Question 
Paragraph 73 of the Secretariat's report indicates that "Enforcement of standards needs to be 
improved, particularly when this also involves IPR infringement. As technical regulations are not 
followed, counterfeit products, linked with inferior quality, could have a significant negative effect on 
the health of human, animals and plants, and the e nvironment." The EC would like to register its 
disagreement with the phrasing of this paragraph. Th e EC considers that the incentive to develop new 
products and processes on which to base future sta ndardisation will be lost if the standard-making 
process is carried out without due regard for IPR. Wh en standards contain any IPR, they can be used 
by market operators on fair, reasonable and non- discriminatory conditions. As regards counterfeit 
products the issue at stake is not the enforcement of  the standard but rather the surveillance of the 
market.   
Answer  
Just as EC points out, the main  reason for counterfeited products has much to do with the 
enforcement of intellectual property rights, rather than the failed implementation of standards. 
The background for China to raise the issue of IPRs in standardization is as follows: the 
combination of standard and intellectual property ri ght is inevitable. However, in this process, 
improper combinations do sometimes take place,  such as the failure of timely and complete 
disclosure of information about intellectual prop erty rights to the standard-setting bodies as 
required by the patent policies of standardization  bodies; too strict IPR licensing terms and 
exorbitant IPR royalty and so on. All these are de trimental to the sound development of standards 
which has inevitably exerted negative impact on the implementation of TBT agreement. Therefore, 
this issue should be taken into due consideration by the international communities including WTO.  
China has submitted to WTO the communication  "Intellectual Property Rights Issues in 
standardization" （G/TBT/W/251, G/TBT/W/251/Add.1 ）. Our position on this issue is: IPRs in 
standards should be fully protected by law. At the same time, the improp er combinations of IPRs 
and standards will hinder the dissemination and ap plication of new technologies and constitutes a 
barrier to international trade. All these are detr imental to the world economic development. The 
negative impact is especially severe on developing Members. It will seriously obstruct their future 
participation in globalization and will also wi den the gap between the developing and developed 
countries and further aggravate the imbalances in the world economy.   WT/TPR/M/199/Add.1 
 Page 193 
 
 
  The international communities have all along attach ed great importance to the issue of IPRs in 
standardization. Currently many countries and in ternational organizations are carrying out 
researches on this issue, in an attempt to form ulate relevant policies to clarify the rights and 
obligations of the holders of IPRs and the manuf acturers implementing the standards. Intellectual 
property rights should be fully protected while standards should also be smoothly developed and 
applied. The international standard organizations, such as ISO, IEC and ITU, have already 
formulated fundamental principles concerning the information disclosure of IPRs and IPR licensing. These principles have been recognized and applied widely by other standard organizations.  
The purpose of standardization is to enhance productive efficiency and facilitate international 
trade. Members in WTO are encouraged to adopt international standards. To ensure the smooth 
implementation of the TBT Agreement, the efficien cy and quality of international standards should 
be enhanced and full consideration should be given to the difficulties that each Member, especially 
developing Members may encounter during implemen tation. The issue of IPRs in standardization 
is a problem that figures prominently. WTO should ac tively explore the solutions to this issue based 
on the achievements already made by the interna tional standardization organizations. To this end, 
the Chinese government will continue to push forw ard the discussion of this issue in WTO/TBT 
committee, and stands ready to communicate  with other members on this topic. 
EC Questions 39-40 
The EC has on many occasions and in many fora ra ised concerns about the CCC system. Are there 
any plans to reduce the number of products which falls under the CCC system? China should treat 
products differently depending on a risk assessment . Less strict procedures should be applied for 
products which are of low risk to the consumers. In this regard, are there any plans in China to 
introduce a simpler procedure for declaration of conf ormity e.g. Supplier Declaration of Conformity? 
Answer
 
Adoption of Supplier Declaration of Conformity (S DOC) requires a series of work on legislation 
and system to guarantee, which China needs curr ently. Conditions are not matured for China to 
use SDoC. 
EC Question 54 
The Report outlines China's current legislation relate d to its SPS regime but there is no indication on 
which body is in charge of issuing those acts. Is  it AQSIQ or the Ministry of Health? If both, on 
which basis it is decided who takes the lead? 
Answer  
Currently the Chinese government is undertaking modifications of government functions. The 
functions of the Ministry of Health and General Administration of Quality and Technical Supervision will be defined soon. 
EC Question 55 
With regard to the duration of the validity of the import permit, the EC would like to know if after six 
months, the renewal is automatic or if the importer has to undergo again the full issuing procedure. If 
the latter, while understanding the interest of the Ch inese authorities to protect the consumers, in our 
opinion this complicate procedure could block the trade flow. Could China indicate whether it is WT/TPR/M/199/Add.1 
Page 194  
 
  possible or already foreseen for the importer to con tinue working during the process of renewal of the 
permit? 
Answer
 
Import permit must be reapplied af ter it is expired. To facilitate the application, an on-line 
management system has been set up. Till now, co mpanies have given their positive feedback. Trade 
flow has not been affected. 
EC Question 
The EC would like to note that clarifications of similar nature have been already requested through 
EC comments provided to notification G/SPS/N/CH N/104 of 10 January 2008 on "Administrative 
measures on supervision, inspection and quarantine for import an d export food. Establishment of the 
rules and requirements regarding inspection and quarantine measures for import and export food". The 
EC expects that China will be able to provide r esponses to EC concerns by using the appropriate 
WTO channels? 
Answer  
As for Members’ comment on Chinese notifica tion G/SPS/CHN/104, China is considering those 
comments seriously and will provide res ponses through appropriate WTO channels. 
Canada Question 27 
The Secretariat notes that China has been graduall y increasing the alignment of its national standards 
with International Norms. Could China explain how  it decides which national standards are revised 
and which are abolished? 
Answer  
China undertakes standards review to decide whether a national standard is revised or abolished. 
Canada Question 28 
The Secretariat notes that China has decided that  9,536 (44.2%) of national standards would be 
revised by 2008. Could China advise if the 9,536 nati onal standards have been revised? If so, is there 
a summary of the revisions available? 
Answer  
China is in the process of revising those 9536 national standards. It is expected to finish before the 
end of 2008. 
Canada Question 30 
The Secretariat notes that the alignment rate for th e products listed were much higher than those that 
are not. Would China explain this finding? Could Ch ina advise if the alignment rate is the criteria 
used for prioritizing the products?  WT/TPR/M/199/Add.1 
 Page 195 
 
 
  Answer  
When developing its standards development plans, in cluding the plan on adoption of international 
standards, China takes into account many factors, such as its obligations under the WTO rules, the 
industrial development needs and others. 
Canada Question 34 
Could China advise who is responsible for the de velopment of the local, sectoral and industrial 
standards? Could China explain what steps are take n by the Standardization Administration of China 
(SAC) to ensure that mandatory local and sector al standards meet China’s WTO commitments under 
the TBT Agreement. Would China advise where in formation about local, sectoral or enterprise 
standards that might affect imports is availabl e? Would the SAC provide such information to 
interested parties? 
Answer  
As specified in the Standardization Law of the Pe ople’s Republic of China, the following agencies 
and entities are entitled to develop standards. These a re the competent departments in charge of 
standardization under the State Council, other relevant competent departments under the State 
Council, the administrative departments for stan dardization in the people's governments in the 
provinces, autonomous region and municipaliti es directly under the Central Government, the 
division of the duties of the administrative de partments in charge of standardization and the 
relevant competent administrative authorities in municipalities and counties and companies. All 
sector and local standards should be registered with SAC so as to ensure all those standards are developed in accordance with WTO rules. 
Canada Question 36 In its previous TPR, China noted that the implem entation of the Standardization Law eliminates the 
inconsistencies among various types of Standards. Could China advi se what steps are being taken, 
pursuant to this law, to eliminate these inconsistencies?  
Answer
 
According to Chinese Standardization Law, sect or, local and company standards should be 
registered with SAC so as to avoid inconsistencies. 
Canada Question 37 
The Secretariat notes that the review period for national advisory technical documents is three years, 
where the review period for developing new standa rds is five years. Would China provide further 
clarity as to why the review period for the national advisory technical documents is two years shorter 
than the review period for the actual standards? 
Answer  
This is mainly due to the needs that arise fr om technological development. Advisory technical 
documents will be developed under two circumstances: 
1. The technology is still at its prelim inary development stage, therefore requires 
technical instructions to guide its devel opment or the technology has certain value WT/TPR/M/199/Add.1 
Page 196  
 
  of standardization but has yet to become mature and be further developed into 
standards.  
2. To make reference to technical report of  ISO, IEC and other international/regional 
standardization bodies. 
Canada Question 44 
Could China advise if the formulation of the food certification and accreditation system has 
progressed into implementation? If so, would China advise how far has it been implemented and whether there is any documentation that is availa ble? If not, would China advise when it expects to 
start implementing the various components? 
Answer
 
China has established its food certification mechanis m, which includes animal feed certification, 
good agriculture practice certification, organic produc t certification, HACCP certification, and etc. 
For related regulations, standards and informa tion on products and companies that have received 
certificates, please contact CACN for details. 
Australia Question 3 
We note that China’s standards for electrical equi pment for medical use is only 30 per cent aligned 
with international standards (Paragraph 69 on page  63-64 of WT/TPR/S/199).What is the reason for 
this, and does China intend to a lign these standards as a priority? 
Answer  
Up to now, China has adopted around 60% of IEC standards in electrical equipment for medical 
use as national or sectoral standards. China will further promote the alignment in this field. 
Currently, 17 more standards are scheduled to be aligned with international standards. 
Australia Question 4.a, 4.b 
Australia notes that China has been gradually incr easing the alignment of its national standards with 
international standards (Parag raph 67 on page 63 of WT/TPR/S/199), however, many of these are 
voluntary rather than mandatory (Table III on pa ge 64 of WT/TPR/S/199). Australia also notes 
China’s increasing attention to implementing fo od standards (Paragraphs 74-76 on page 65 of 
WT/TPR/S/199). What proportion of China’s food standa rds is more restrictive than internationally 
accepted standards (such as Codex Alimentarius)? Wh at proportion of these are mandatory standards? 
What is the justification for making these standard s more restrictive than internationally accepted 
standards? Which quarantine and food safety impor t requirements exceed the domestic standards? 
What is the justification for making these requi rements more restrictive than those applied 
domestically? What measures has China taken to en sure consistency between  its import and domestic 
requirements? What is China doing to ensure qua rantine and food safety import requirements do not 
exceed those applied domestically? Where import requirements have been found to exceed those 
applied domestically, what action has Chin a undertaken to remedy the situation? 
Answer  
China has been developing mandatory food standards in line with TBT Agreement. Mandatory 
standards apply to both domestic and imported pr oducts. There is no additional requirement for 
imported food.  WT/TPR/M/199/Add.1 
 Page 197 
 
 
  China has been making endeavour to base its food standards on international standards, especially 
CAC standards. Currently, most of pesticide residue,  tolerant level indicators are based on CAC 
standards. There are only a few cases which are no t applicable due to differences in dieting habits, 
geographical and climate difference and so specifi c standards have been developed after adequate 
risk assessment and evaluation. In those cases,  the standards are notified to WTO in accordance 
with SPS Agreements. 
Australia Question 7 
In relation to the implementation of mandatory ISO/IEU or international equivalent standards 
(Paragraphs 83 and 84 on page 67 of WT/TPR/S/ 199): Could China provide a list of the relevant 
standards relating to consumer goods , particularly children’s toys, which are under consideration for 
mandatory inclusion? Could China provide a timelin e for the implementation of such standards as 
they relate to consumer goods, in particular children’s toys? 
Answer  
All mandatory standards, including those covering  consumer products, particularly children’s toys, 
are available at the website of China Standardi zation Administration (www.sac.gov.cn). Timelines 
for implementation are also available. 
Australia Question 5.a, 5.b 
We note the assessment that China’s sanitary and phytosanitary (SPS) regime remains complex 
(Paragraph 4 on page 43 and pa ragraphs 85-92 on pages 67-69 of WT/TPR/S/199). Has China 
considered adopting measures that would simplify its  SPS regime?  If so, does China have a projected 
timetable for implementing those measures? Could China indicate if any reforms are planned to 
ensure food hygiene import requirements do not exceed those applied to domestic product? 
Answer  
The current SPS regime in China is consistent with WTO SPS Agreement. As for administrative 
structure of the SPS regime, there has been no uniform international mode and modes by different 
Members are different from each other. Like many other Members, the administration of SPS 
measures in China covers different government agencies, where function of each agency is clear.  
Domestic and imported food products are all required to meet the stipulation of laws, regulations 
and the compulsory technical standards. The requi rements for domestic and imported products are 
the same, and no excessive requirement for imported products is in place.  
Australia Question 6.a, 6.b, 6.c, 6.d, 6.e, 6.f 
We welcome China’s efforts towards establishing sta ndards for maximum residue limits for pesticides 
and contaminants in food (Paragraphs 74-76 on page 65 of WT/TPR/S/199).  However, we are 
concerned by the lack of transparency with regard  to the implementation and enforcement of these 
standards. Have the maximum residue limits notified to the WTO been implemented? If these 
standards have been implemented, what enforcemen t mechanisms apply in the event of detection of 
residue above these standards in imported food? Co uld China advise of any differences between the 
central government and provincial governments in the enforcement of residue standards? Where a 
maximum residue limit has not been established for a pesticide or contaminant, what standard will 
apply? Where the standards notified to the WTO ha ve not been implemented and enforced, we would 
be grateful for advice of the current standard  for maximum residue limits of pesticides and WT/TPR/M/199/Add.1 
Page 198  
 
  contaminants in food that applies. What are the do mestic regulations in place for residues in domestic 
foods and how are those regulations enforced? 
Answer
 
Compulsory national standards such as Maximum Residue for Pesticide in Food and Limits for 
Pollutant in Food (GB2763-2005 and GB2762-2005) were published in Jan. 25, 2005 and came 
into force in Oct. 1 2005. Pursuant to Standardization Law, compulsory standards must be 
implemented and those fail to meet the compulso ry standard shall be banned from production, 
sales and importation. Food standards for domestic  and imported products are the same.  Pursuant 
to Article 19 of Implementing Rules for Impor t and Export Commodities Inspection, imported 
products shall be returned to export origin or dest royed if residue in products exceeds the standard.  
(ix) Government procurement 70 
 
Korea Question 1 
The Secretariat Report (paragraph 97) notes that th e Government Procurement Law of China does not 
apply to SOEs, or state-owned enterprises.  
 A. Which laws/regulations govern SOEs' procurement activities?  
United States Question 29 
In paragraph 97 of Part III, the report explains that the Governme nt Procurement Law does not apply 
to SOEs.  Please identify the laws, regulations, rules,  policies, directives and/or guidance that apply to 
procurement by SOEs. 
Answer  
Law of the People's Republic of China on Tend ers and Bids is the major law that governs SOE’s 
procurement activities.  
Korea Question 1.B 
What are the major differences between the procur ement procedures prescribed in the Government 
Procurement Law and those that apply to SOEs?  
Answer  
Procurement by SOEs is mainly co nducted in the following ways:  
 1. Establishing a division for group proc urement to be in charge of centralized 
procurement within the Group Company..  
 2. Establishing a subsidiary company an d conducting procurement via affiliated 
transaction.  
 3. Entrust an independent procurement company to conduct procurement for the 
Group Company. 
Government procurement is mainly co nducted in the following ways:  
 1. Public tendering;  
 2. Invited bidding;   WT/TPR/M/199/Add.1 
 Page 199 
 
 
   3. Competitive negotiation;  
 4. Single-source procurement;   5. Request for quotations;   6. Other methods permitted by the PRA of the State Council. 
Public tendering should be taken as the main method of government procurement. 
Korea Question 1.C Are foreign suppliers able to participate in the tenders conducted by Chinese SOEs?  
Answer
 
Yes.  
Korea Question 2 
The Secretariat Report (paragraph 98 ) notes that China's local government entities account for more 
than 80% of the total value of government procuremen t in China. China's initial offer of coverage for 
the GPA entry negotiation, submitted on Decemb er 28, 2007, however, does not contain local 
government entities. Please elaborate the Chinese G overnment's plans for the opening of the local 
government procurement market. 
Answer  
Public tendering is the main method of government  procurement, and foreign suppliers are allowed 
to take part in the tendering. As for China’s off er coverage in its GPA accession neogiation, it is 
perhaps too early to judge the result based on the initial offer. So fa r, China has yet to consider the 
opening of its local government procument markets. 
Korea Question 3 
The Secretariat Report (paragraph 99 ) notes that the Government Procurement Law of China does not 
specify measures to be taken to promote the deve lopment of SMEs in the government procurement 
framework.  
 A . Which laws/regulations provi de for measures to promote the development of SMEs?  
Answer  
Article 34 of Law of the People's Republic of China on Promotion of Small and Medium-sized 
Enterprises stipulates that commodities and serv ices from SMEs should be prioritized in 
government procurement.  
Korea Question 3.B 
Please provide data on the scale of government pr ocurement associated with the assistance programs 
for SMEs, underdeveloped areas and ethnic minority areas, respectively.  
Answer  
There is no such statistical information coll ected by Chinese government. Currently no such 
statistics are available.  Lawsuits from the su ppliers with regard to government procurement are WT/TPR/M/199/Add.1 
Page 200  
 
  subject to the application of the Administrative Pr ocedure Law of the People’s Republic of China. 
According to Chapter III of the Law and Article 6 of the Interpretation on Several Issues in 
Implementing the LAW by the Supreme People’s Court, the people’s courts at all levels shall have jurisdiction as courts of first instance o ver administrative cases at each own level. More 
information is available on the website. 
Korea Question 4 The Secretariat Report (paragraph 101) notes that pr ocurement of goods, projects, and services listed 
in the Centralized Procurement Catalogue must be carried out by centralized procurement agencies, 
which are non-profit legal persons.  By what measures and legal instruments does the Chinese 
government ensure the fairness and transparen cy in the procurements conducted by the 
aforementioned non-profit agencies?  
Answer
 
Pursuant to the Law of the P.R.C. on Government Pr ocurement, the ministry of finance issued the 
Notice on Implementing Methods on Centralized Procurement by Institutions on Central Level, 
which contains detailed provisions that ensu re the transparency and fairness in centralized 
procurement.  
Switzerland Question Para. 98 of the Secretariat's report: As observed in  other countries and especially within Members of 
the Government procurement agreement of the WT O (GPA), local government entities in China are 
accounting for about 80% of the total value of government procurement in China. Would it be 
possible to the Government of China to elabor ate on the legal framework which is governing the 
procurement made on local levels (provinces, mu nicipalities, etc.)? Does the Procurement Law 
mentioned in article 97 apply to all local levels of  government? Or do the local governments have the 
legal authority to elaborate and apply specific laws tailored to the needs of each province or 
municipality? If not, are the competences of the local  authorities limited to the implementation of the 
Procurement Law? 
Answer
 
According to the Government Procurement La w, the government procurement refers to the 
purchasing activities conducted with fiscal funds by state organs, institutions and public 
organizations at all levels both central and lo cal, where the goods, construction and services 
concerned are in the Centralized Procurement Ca talogue (CPC) complied in accordance with law 
or the value of goods, construction or services exceeds the respective Prescribed Procurement Thresholds (PPT).  
The National People’s Congress is the sole body to develop and amend the Government 
Procurement Law. The Constitution designates the People’s Congress at provincial level the 
authority to develop the local procurement regulations. 
Switzerland Question 
Para. 101 of the Secretariat's report: The Govern ment Procurement Law is said to apply to 
procurement of goods, projects, and services listed in  a Centralized Procurement Catalogue issued by 
the Ministry of Finance? This suggests that some goods – and services – are not covered by the 
Procurement Law. What are, in the view of China,  the main goods and services not covered? What are  WT/TPR/M/199/Add.1 
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  the respective functions of the Ministry of Finance and the Provincial bureau of Finance in the 
implementation of the Law? 
Answer  
According to the Government Procurement Law,  the centralized procurement catalogue for 
government procurement items that come under the central budget shall be determined and 
published by the State Council; the centra lized procurement catalogue for government 
procurement items that come under the local budg ets shall be determined and published by the 
people's governments of provinces, autonomous regions or municipalities directly under the 
Central Government or the departments authorized by them. 
Product items listed in the centralized procurem ent catalogue are mainly goods for general use 
with relative high unit value for cross-depar tment use, such as office equipments and 
products/stationary. Goods with relative small valu e such as staplers and pencils are not included 
in the centralized procurement catalogue. Service  items listed in the centralized procurement 
catalogue are mainly those generally needed by  multi-sectoral departments, such as conference 
services and gasoline filling. Items for the special  need of individual entities such as the 
development of information system are conducted by the procurement entities. The centralized 
procurement does not cover engineering projects. 
According to the Government Procurement Law, go vernment finance departments at all levels are 
departments for supervision and administration over government procurement, performing the 
duty of supervision and administration over government procurement activities in accordance with 
law. The Ministry of Finance is in charge of the supervision and administration over government 
procurement at the national level while the loca l finance departments are in charge of the 
supervision and administration over government procurement at their respective levels. 
Switzerland Question 
Para. 108 of the Secretariat's report: For the pr ocurement of goods and services, the Chinese 
Authorities use public tendering, Invited bidding, competitive negotiation, single-source procurement, request for quotations, and other methods. In co mparison, Members of the GPA, mainly use open 
tendering – which seems to be equivalent to public tendering in China and which apparently 
represents in China about 68 per cent of the pr ocurements made – selective tendering and limited 
tendering. Could China explain the main differences between the three basic methods proposed in the 
GPA and the various methods mentioned in the report of the Secretariat ? 
Answer
 
China’s Government Procurement Law sets out five procurement methods including public 
tendering, invited bidding, comp etitive negotiation, single-sourc e procurement and request for 
quotations, among which, public tendering is the main way of procurement. In 2006, public 
tendering accounts for over 60% of the tota l government procurements nation-wide. The 
Government Procurement Law provides strict requi rements on the condition of other procurement 
methods, which are subject to the examinatio n and approval by the finance departments. 
Procurements through the other methods account  for a relatively small share of the total 
government procurement. 
In terms of application and procedures, the public  tendering adopted by the Chinese government is 
basically the same as that of the GPA. The invited bidding is similar to the selective tendering in the 
GPA. The competitive negotiation, request for quot ation and single-source procurement are similar WT/TPR/M/199/Add.1 
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  to the limited tendering in the GPA. Please refer to the Government Procurement Law of China for 
detailed description of application and procedures for the five methods. 
United States Question 30 
Paragraphs 100 and 101 of Part III of the report de scribe the goods, projects and services subject to 
procurement pursuant to China’s Government Pr ocurement Law and explain that the Chinese 
authorities use both "centralized" and "decentralized" procurement methods.   
 a. What is the process for adding goods, projects and services to the Centralized 
Procurement Catalogue?  To what extent is  the increase in "centralized" procurement 
in Table III.6 the result of the addition of goods, projects and services to the Centralized Procurement Catalogue? 
Answer
 
The Centralized Procurement Catalogue of the central government is developed by the Ministry of 
Finance and published by the State Council. For the expansion of the Catalogue, the Ministry of Finance shall conduct extensive consultation and if  necessary, hold hearings, and can only report 
to the State Council after a consensus is reach ed among parties concerned. To date, there have 
been only limited changes to the Centralized  Procurement Catalogue since the Government 
Procurement Law was implemented.  
In recent years, the increase of the government proc urement scale has been ma inly attributed to the 
large increase of departmental centralized proc urement scale. The procurement scale of the 
governmental institutions for centralized proc urement has also been increased considerably 
because of the staff increase, improvement of procurement methods and acting as agents for 
decentralized procurement, etc.  
United States Question 30.b 
Please describe when and by whom "decentralized" pr ocurement may be undertaken.  Also, what is 
the process for approving the use of  "decentralized" procurement? 
Answer
 
According to the Government Procurement Law, decentralized procurements are conducted for 
items not included in the centralized procu rement catalogue and below the thresholds. Such 
procurements are not subject to approval. The pr ocuring entities may do it themselves or entrust an 
institution for centralized procurement to do it on their behalf. 
United States Question 31 
Paragraph 105 of Part III of the report discusses the rights of suppliers who believe that they have 
been or are being unfairly excluded from procurement processes or treated in a discriminatory way. 
 a. If a procuring agency, the Ministry of Finance or a court finds that a supplier has been 
unfairly excluded from the procurement process or treated in a discriminatory way, how does that finding affect the procurement?  For example, is the procurement suspended?  What types of remedies can be ordered?  WT/TPR/M/199/Add.1 
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  Answer  
Chapter VI of The Government Procurement Law stipulates the right of suppliers when they are 
treated unfairly or discriminated. 
Article 51 states that where suppliers have queries about matters regarding government 
procurement activities, they may direct their inquiries to the procuring entity. 
Article 52 states that where a supplier believes that the procurement documents, procurement 
proceeding or the results regarding the winner of the bid has impinged upon its own rights and interests, it may, within 7 working days from the date it knows or should know that its rights and interests are impinged, raise queries to the procuring entity in writing.  
Article 54 states that where a procuring agency is  entrusted by the procuring entity with the 
procurement, the suppliers may address inquiries or  queries to the agency, which shall, pursuant to 
Articles 51 and 53 of this Law, make a reply regardi ng matters within its given authorization by the 
procuring entity. 
Article 55 states that where the supplier that raises  queries is not satisfied with the reply made by 
the procuring entity or the procuring agency, or the latter fails to make a reply within the specified 
time limit, the supplier may, within 15 working days following the expiry date, lodge a complaint 
with the department for supervision over government procurement at the same level. 
Article 57 states that depending on the specific ci rcumstances, the department for supervision over 
government procurement may, during the period in wh ich it is dealing with the complaint, notify in 
writing the procuring entity to suspend its procu rement activities, provided that the period of 
suspension does not exceed a maximum of 30 days. 
Article 58 states that where the complaint is not sa tisfied with the decision made by the department 
for supervision over government procurement, or th e latter fails to make a decision within the 
specified time limit, the complain ant may, in accordance with law, apply for administrative 
reconsideration or initiate administrati ve proceedings in a People's Court. 
United States Question: 31.b 
How many lawsuits were filed by suppliers in 2006?   Which courts have jurisdiction to hear these 
lawsuits? 
Answer
 
Currently no such statistics are available. Courts at all levels have the jurisdiction to hear these 
lawsuits.  
(x) Import-related financing 73 
(3) M EASURES DIRECTLY AFFECTING EXPORTS  73 
(i) Procedures  73 (ii) Export taxes  74 
 
EC Question 60 
The Report states that although the main objective of  some export taxes is the improvement of the 
environment by reducing exports of products considered to be highly energy consuming or polluting, 
such taxes tend to increase the domestic supply of the products concerned. Has the extraction of raw WT/TPR/M/199/Add.1 
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  materials and production of goods subject to export taxes on the grounds of environmental or energy 
consumption concerns been reduced in China? 
EC Question 62 
Has the government taken accompanying measures to tackle the environmental or energy-related 
concerns specific to these products apart from adopting and applying export taxes? 
Answer
 
To restrict the extraction and production of reso urce-intensive commodities or products involving 
high pollution and high energy consumption,  China has taken measures including raising 
standard and qualification requirement for market  access, increasing resource tax and enhancing 
surveillance for environment prot ection, which has already produced positive results. In 2007, 
China has eliminated 46.59 million tons of iron-m aking capacity and 37.47 million tons of steeling-
making capacity reduced the consumption of stan dard coal and emission of sulphur dioxide by 
17 million tons and 90,000 tons respectively. In addition, approval of investment projects are 
subject to strict environment assessment and the policy of "regional invest ment restriction" for 
purpose of environment protection is implemente d. All these measures have worked together to 
curb the growth of investment in these industries. So far 12 projects have been shut down 
permanently and 47 projects, which were built w ithout approval, have been either stopped or 
suspended from production. 
EC Question 61 
Are domestic prices of such products below inte rnational ones? If so, do lower prices stimulate 
demand and therefore lead to further environmental and energy-related problems? 
Answer  
These products are prone to global market influence.  For instance, the domestic price of steel and 
iron products is constantly rising due to price ri ses of iron ore. In the meantime, the intensified 
effort of the government in terms of environment pr otection, protection of labors’ rights as well as 
rising costs of raw material extraction all contri bute to the pace of increase in domestic prices of 
such products. 
Switzerland Question 
Para. 112 and footnote 111: Para. 112 of the Secretar iat's report indicates that in 2007, China applied 
statutory export taxes to 88 tariff lines at the HS  8-digit level whereas according to footnote 111, 
China listed 84 tariff lines at the HS 8-digit level at statutory export taxes rates in the Annex 6 of its 
Protocol of Accession. Could the Chinese authoriti es explain why, for which products (HS 8-digit 
level), and at which rate, export ta xes were applied in 2007 to more tariff lines than what is foreseen 
in its Protocol of Accession, and which are the WTO justifications for this? 
Japan Question 11 
China imposes export duties on various non-ferrous me tals such as indium, molybdenum, rare earths, 
silicon etc. However, in Section 11.3 of Part 1 of its Protocol of Accession, China committed not to 
impose export duties on any goods not appearing on the list of goods subject to export duty in 
Annex 6 of its Protocol of Accession.  Indium, mo lybdenum, rare earths and silicon do not appear on 
the Annex 6 list. Japan would like to confirm how  China justifies its imposition of export duties on  WT/TPR/M/199/Add.1 
 Page 205 
 
 
  these raw materials in light of the commitment that  China made in Section 11.3 of Part1 of its 
Protocol of Accession. 
Answer  
Pursuant to China’s accession commitment, the applied rates of 84 tariff lines of numbers subject 
to export tariff will not be higher than the maximum level as committed in Annex 6 of China’s 
Accession Protocol. China has faithfully honored this commitment. However, it should be noted 
that, like other WTO members, China has the right to invoke Article 20 of GATT 1994 to implement necessary export restriction measures on exhaustib le natural resources. Therefore, China adopted 
export tariff on 174 HS tariff lines of 8-digits in 2007: 
03019210, 05069090, 25085000, 2508600 0, 25101010, 25101090, 25102010, 
25102090, 25292100, 25292200, 2530902 0, 26011110, 26011120, 26011190, 
26011200, 26012000, 26020000, 2603000 0, 26040000, 26050000, 26060000, 
26080000, 26090000, 26100000, 2612100 0, 26122000, 26131000, 26139000, 
26140000, 26151000, 26161000, 2616900 0, 26171090, 26179010, 26179090, 
26180010, 26180090, 26190000, 2620110 0, 26201900, 26202100, 26202900, 
26203000, 26204000, 26206000, 2620910 0, 26209910, 26209990, 27011210, 
27040010, 27060000, 27090000, 2804709 0, 28111100, 28259012, 28418010, 
28461010, 28461020, 28461030, 2846109 0, 28469011, 28469012, 28469013, 
28469014, 28469019, 28469028, 2846902 9, 28469030, 28469048, 28469049, 
28469090, 28499020, 29022000, 3102100 0, 44012100, 44012200, 44091010, 
44092910, 44190031, 44219021, 7202110 0, 72021900, 72022100, 72022900, 
72023000, 72024100, 72024900, 7202500 0, 72026000, 72027000, 72028010, 
72028020, 72029100, 72029210, 7202929 0, 72029300, 72031000, 72039000, 
72051000, 72052900, 72061000, 7206900 0, 72071100, 72071200, 72071900, 
72072000, 72181000, 72189100, 7218990 0, 72241000, 72249010, 72249090, 
74010000, 74020000, 74031100, 7403120 0, 74031300, 74031900, 74032100, 
74032200, 74032900, 74040000, 7407100 0, 74072100, 74072900, 74081100, 
74081900, 74082100, 74082200, 7408290 0, 74091100, 74091900, 74092100, 
74092900, 74093100, 74093900, 7409400 0, 74099000, 75021000, 75022000, 
75089010, 76011010, 76011090, 7601200 0, 76020000, 76041000, 76042100, 
76042900, 76051100, 76051900, 7605210 0, 76052900, 76061120, 76061190, 
76061220, 76061230, 76061240, 7606910 0, 76069200, 79011110, 79011190, 
79011200, 79012000, 81011000, 8101940 0, 81019700, 81021000, 81029400, 
81029700, 81101010, 81110010, 81122100, 81122200, 81129230. 
Philippines Question 5)a, 5)b 
In the Secretariat’s report, China levies export taxes at statutory rates in relation to FOB values and on 
an MFN basis.  In addition, lowe r interim rates may be applied and also on an MFN basis.  The Tariff 
Commission under the State Council sets and publishes the statutory rates annually and revises the list of items subject to interim duty together with the ra tes of duty.  On 1 January 2008, the coverage of 
interim export duties increased.  Though the main obj ective of these export taxes may be to improve 
the environment by reducing expor ts of products considered to be highly energy consuming or 
polluting, such measures tends to increase the domest ic supply of the products concerned.  As a 
consequence, their domestic prices tend to be lowe r than would otherwise be the case.  Furthermore, 
when export taxes are levied more heavily on upst ream products, such measures may implicitly assist 
domestic downstream processing of the products con cerned.  This situation can be seen in the 
manufacture of yellow phosphorus (P4) and phosphoric acid which are major raw materials in sodium tripolyphosphates (STPP).  It is gathered that Ch ina has increased the export taxes on these two raw 
materials, while imposing zero rates on STPP.  If so, the measure has caused a huge disparity between 
the prices of these raw materials and that of STPP.  The manufacture of STPP could thus be effectively subsidized. What are Ch ina’s objectives in its use of e xport taxes? How can China ensure WT/TPR/M/199/Add.1 
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  that these are consistent with China’s obligati ons in WTO, including under Article XI:2 of GATT 
1994, and the Agreement on Subsidies and Countervailing Measures? 
Switzerland Question 
In addition, though the main objective of these expor t taxes may be to improve the environment by 
reducing exports of products considered to be highl y energy consuming or polluting, such taxes tend 
to increase the domestic supply of the products con cerned and can serve as indirect subsidization of 
processing industries and influence international trad ing conditions of these products. Given that in 
paragraph 16 of the DDA mandate Members have agr eed to reduce or, as appropriate, to eliminate 
tariffs, including the reduction or elimination of tariff  peaks, high tariffs and tariff escalation, as well 
as non-tariff barriers, in particular on products of expo rt interests to developing countries, what would 
the Chinese authorities consider to do to help de veloping countries to have  a better access to raw 
materials to develop their industrial sector?  
Australia Question 8 
Australia notes that in 2007, statutory export taxes a pplied to 88 tariff lines. As at 1 January 2008, a 
total of 334 lines at the HS 8 digit level were subjec t to interim export duties, and that in addition to 
these products, exports of grain, rice, maize and soybeans are subject to interim export duties, to 
discourage their export (paragraph 112 of the Secretariat’s report). 
a) Article 11.3 of China’s Protocol on Accession to the WTO provides that "China shall 
eliminate all taxes and charges applied to  exports unless specifically provided for in 
Annex 6 of this Protocol or applied in c onformity with the provisions of Article VIII 
of the GATT 1994."  In Annex 6, China listed 84 lines at the HS 8-digit level at 
statutory export tax rates.  
b) Australia would therefore appreciate clarification of the WTO basis for the imposition 
of interim export duties on more than 334 tariff lines, given the constraints contained in Article 11.3 of China’s Protocol on Accession. 
United States Question 32 
Paragraph 112 of Part III of the report discusses th e export duties that China has imposed on a large 
number of products.  Currently, China applies export du ties to more than 334 tariff lines (at the 8-digit 
level).   The report explains that these export duties "tend to increase the domestic supply of the 
products concerned.  As a consequence, their domes tic prices tend to be lower than would otherwise 
be the case," and therefore the export duties "may implicitly assist domestic downstream processing of the products concerned."  The report adds that  "[n]ot fully rebating VAT on exports of certain 
products has a similar outcome."  The United States notes that, in Section 11.3 of Part I of China’s 
Protocol of Accession, China committed not to impose export duties on any goods not appearing on the list of goods subject to export duty in Annex 6 of its Protocol of Accession. Annex 6 only lists a 
total of 84 products at the 8-digit level.  For each  of the tariff lines not listed in Annex 6, please 
explain how China considers the export duty to  be compatible with its WTO commitments. 
Canada Question 54 
We note China's significant use of export taxes, both statutory and interim, on a variety of metals and 
some mineral products and that the use of interim import taxes appears to be on the rise (174 tariff 
lines in 2007 and 334 lines in January 2008). It is fu rther noted that use of such taxes results in an 
increase in domestic supply of the products concer ned and a tendency to lower domestic prices to 
levels lower than would otherwise be the case a nd that export taxes may implicitly assist domestic  WT/TPR/M/199/Add.1 
 Page 207 
 
 
  downstream processing of the products concerned. In  the case of minerals and metals, what other 
policy measures has China considered to achieve its  main objective of improving the environment by 
reducing exports of products considered to be high ly energy consuming or polluting, and which do 
not result in an increase in domestic supply of the products concerned? 
Answer  
As China not only adopts necessary export restrictio ns on products of high energy consumption 
and high pollution, but also adopts even more strict restrictions on domestic production and consumption, there is no such case of increased domestic supply of the above mentioned products, 
leading to implicit subsidy on downstream processi ng industry. In fact, as a result of stringent 
restrictions on domestic supply, many enterprises of high pollution and high energy consumption 
have been shut down. For example, in 2007, produ ction capacity of 21.57 million Kw of small coal-
base power plants was eliminated, 11200 small coal mines were shut down, 46.59 million tons of 
obsolete iron production capacity , 37.47 million tons of obsolete steel production and 87 million 
tons of cement production were eliminated.  
It is one of China’s top considerations to adopt  export restrictions that not only stable domestic 
supply but also ensure supply to developing countries.  
Costa Rica Questions 1-6 
En el informe se indica que las autoridades han tomado diversas me didas para frenar el deterioro 
ambiental, como la reducción de las desgravaci ones del IVA aplicado a las mercancías exportadas 
cuya producción se considera que consume gran canti dad de energía. (Párrafo 21) Al respecto podrían 
aclararnos lo siguiente:  
1. ¿Cómo se aplica qué la política de desgravación del IVA? 
2. ¿Cómo se determina cuando una mercancí a exportada se elabora a partir de una 
producción que consume gran cantidad de energía? 
3. ¿Cuáles son los parámetros de medición para determinar el  consumo de gran cantidad 
de energía? 
4. ¿Se realiza alguna diferenciación a nivel de partida arancelaria para incluir las 
mercancías exportadas que proviene de una producción que consume gran cantidad 
de energía? 
5. ¿Aclarar los efectos de esta medida en el comercio y como combinan su fijación 
arancelaria en relación con los compromisos asumidos en la OMC y su normativa?  
6. ¿Existe algún otro motivo o criterio  ambiental aparte del consumo de energía, por el 
cual se excluye la desgravación de un bien? 
Brazil Question 1 
Please explain the rationale for the levying of export taxes for primary products such as iron, copper, 
nickel and aluminum ores with a view to reducing exports of highly energy consuming and polluting 
as indicated in paragraph 112 of the Secretariat’ s report (doc WT/TPR/199)? Is there any policy 
relationship between export taxes and dom estic supply for industries in China? 
Japan Question 14 
Japan understands that China implements export li censing system on various kinds of non-ferrous 
metals: rare-earths, tungsten, an timony, tin, silver, bauxite, indi um, zinc, silicon and molybdenum. 
Indium and molybdenum of these non- ferrous metals became subject to quantita tive trade restrictions WT/TPR/M/199/Add.1 
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  in June 2007, and the amount of export licences on most of the other non- ferrous metals has been 
declining.  
 (1) Japan would like to ask China to clar ify the policy objective of quantitative 
restrictions by way of its export licensing system on various kinds of non-ferrous metals: rare-earths, tungsten, antimony, tin , silver, magnesium, bauxite, indium, and 
molybdenum. Also, we would like to ask clarification of the legal basis of the 
restriction under the GATT. 
Answer
 
In order to reduce the production and export of energy-intensive and high pollution, China has 
gradually implemented restrictive measures on domestic production, cons umption and export of 
13 kinds of resource based products since 2005. These measures are in line with Article 162 of 
China’s Working Party Report, which stipulates th at China can adopt export restriction measures 
in line with WTO rules, i.e. to restrict export while stringently restrict domestic production and 
consumption.  
At the current stage of development, China is now faced with tremendous pressure for resource 
saving and environmental protec tion. The Chinese government has m ade tremendous effort to cope 
with these problems. For example, the governme nt promulgated the Notice from State Council 
regarding Issuing the Comprehensive Work Sc heme on Energy Reservation and Emission 
Reduction, which stipulates: 
1. in the process of implementing the various restrictive policies on the export of 
products of energy intensive and high pollution, the proposal to newly-establish 
projects of high energy consumption and high pollution will be reviewed in 
conjunction with the local government’s undert aking in meeting the target of energy 
saving, emission reduction and outdated production elimination, 
2. straighten out policy incentives of the lo cal governments such as price incentives on 
electricity, land use and taxation, for indu stries of high energy consumption and high 
pollution, 
3. obsolete production capacity in industries of electricity, steel, construction input, 
electrolyte aluminium, iron alloy, calcium carbide, coke, coal, tabulate glass will be 
abolished. Local government must by la w close down enterprises falling into the 
above categories. 
Besides, the Chinese government ra ised the resource tax rate significantly on zinc, lead, copper, 
tungsten, by 400% to 500%. 
India Question Q8 
Indian importers of met coke have reported that  they face problems in importing met coke from 
China.  China has canalized export of met coke and is restricting exports through quotas for local exporters.   Indian importers of met coke are fu rther constrained by being limited to source only from 
7 Met Coke exporters.  Would China provide reas ons for the control by the Govt. over met coke 
exports and the quotas for exports?  Does the Chinese G ovt. plan to withdraw its control in the near 
future and is there a move to do away with the quota system?  WT/TPR/M/199/Add.1 
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  United States Question 34 
In paragraphs 121-124 of Part III, the report di scusses the export quotas that China maintains on 
numerous products.  The report notes that many of  these export quotas involve base metals and other 
important raw materials.  The United States remains seriously concerned, in particular, about China’s 
export quotas (and related export licensing requirements) on antim ony, bauxite, coke, fluorspar, 
indium, magnetite, molybdenum, rare earths, silic on carbide, talc, tin, tungsten and zinc.  China 
maintains these export quotas despite the fact that it is the world's leading producer of all of these raw 
materials (except for molybdenum, for which Chin a is the world’s second leading producer), and 
despite the fact that China appear s to maintain no comparable restri ctions on domestic production or 
consumption of these raw materials.  China’s export quotas on these raw materials can significantly 
disadvantage U.S. and other foreign producers, whic h use these raw material inputs to make a wide 
range of downstream products, such as steel, chemical s, ceramics, semiconducto r chips, refrigerants, 
medical imagery, aircraft, refined petroleum produc ts, fibre optic cables and catalytic converters, 
among numerous others.  Export quotas create disa dvantages for foreign producers by artificially 
increasing export prices for these raw materials, which also drive up the world prices.  At the same 
time, export quotas artificially lower domestic pr ices for these raw materials due to domestic 
oversupply, enabling domestic downstream producer s to produce lower-priced products from these 
raw materials and thereby creating significant a dvantages for domestic downstream producers when 
competing against foreign downstream producers both in  the domestic market and in export markets.  
Moreover, in China, the export quotas are part of an  export regime, which also includes export duties, 
export VAT rebates and other measures – a regime th at "has become considerab ly more restrictive" 
since China’s Trade Policy Review in 2006, according to the report. 
 a. For each of the raw materials identified above, please separately explain how China 
justifies its use of the export quotas under Article XI of the General Agreement on 
Tariffs and Trade 1994 and identify any measur es relevant to China’s justification.  
Japan Question 14 
China has explained that resource protection, envi ronmental conservation, and trade surplus reduction 
are the reasons for its quantitative trade restrictions.  
 (2) In terms of resource protection, Japan would like to ask clarification if there is a 
restriction in China for the domestic produc tion or consumption of these metals, with 
some additional specific data on their domestic production, consumption, and 
restriction.  
(3) In terms of environmental conservation and trade surplus reduction, Japan would like 
to ask clarification of the legal basis of the quantitative trade restriction under GATT. 
Answer  
China adopts necessary export restriction on reso urce-intensive products in consistent with 
Article 20 "General Exception" of GATT 1994, that  is to say, China implements stringent 
restriction on domestic production and consump tion of resource-intensive products while the 
export restriction is in place.  
In May 2007, the State Council issued the No tice from State Council regarding Issuing the 
Comprehensive Work Scheme on Energy Reservatio n and Emission Reduction, which stipulates: WT/TPR/M/199/Add.1 
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  1. newly-established projects of high ener gy consumption and high pollution will be 
computed as counter factor to review local government’s undertaking of energy 
saving, emission reduction and outdated production elimination, 
2. local governments must abolish preferential po licies, such as electricity, land usage 
and taxation, for industries of high energy consumption and high pollution, 
3. outdated production capacity in industri es of electricity, steel, construction input, 
electrolyte alumina, iron alloy, calcium ca rbide, coke, coal, tabulate glass will be 
abolished. Local government must close dow n enterprises falling into the categories 
above.  
Besides, Chinese government raised the resource tax rate to a large extent on zinc, lead, copper, 
tungsten, by 400% to 500%.  
These measures are indeed effective. In 2007, pr oduction capacity of 21.57 million Kw. in small 
coal-base power plant was eliminated, 11200 small coal mines were shut down, 46.59 million tons 
of outdated iron production, 37.47 million tons of  outdated steel production and 87 million tons of 
cement production were eliminated.China has gr adually implemented restrictive measures on 
domestic production, consumption and export on 13 kinds of resource products from 2005. These 
measures are in consistent with Article 162 of Ch ina’s Working Party Report, which stipulates that 
China can adopt export restriction measures in line with WTO rules, i.e. to restrict export while 
stringently restrict domestic production and consumption.  
At the current stage of development, China is no w faced up with tremendous pressure on resource 
preservation and environment protection. 
United States Question 34.b Please separately describe China’s plans for elim inating the export quotas on each of the raw 
materials identified above.  If China does not have  any such plans, please explain why it does not. 
Answer
 
China has no plan to abolish export quota admi nistration on these products. Please refer to the 
above answer for the rationale.  
United States Question 34.c 
The United States understands that China has not notified to the WTO any of the export quotas on the 
12 raw materials identified above, d espite China’s commitment in pa ragraph 8.1(b) of Part I of 
China’s Protocol of Accession to notify all export qu otas "listed separately by HS tariff line and with 
the quantities associated with the restri ction... and the justification for maintaining the restriction or its 
scheduled date of termination."  If the United St ates’ understanding is correct, please indicate when 
China will submit the required notifications. 
Answer  
China submitted quantitative restriction notifica tion for 2006~2007 to WTO secretariat in 2007.  
However, in order to meet th e technical requirement by the secretariat to "add production 
description to each tariff line", China is now modifying the notification and will notify it soon.  WT/TPR/M/199/Add.1 
 Page 211 
 
 
  Japan Question 15 
Why are mineral products (HS Chapter 25) and so me chemicals (HS Chapter 29) added to the 
products subject to export prohibitions? 
Answer  
Chemical products refer to 13 HS 8-digit tariff lines in the 3rd batch of Catalogue of Products 
subject to Export Prohibition. Export prohibition on  these products aims at protection of human 
health, ensuring environment safety, eliminatin g out-dated products and implementing Convention 
on International Prior Informed  Consent Procedure for Certain Trade Hazardous Chemicals and 
Pesticides in International Trade Rotterdam an d the Stockholm Convention on Implementing 
International Action on Certain Persistent Organic Pollutants. 
Mineral products refer to 2 HS 8-digit tariff lines in  the 4th batch of Catalogue of Products subject 
to Export Prohibition. Export prohibition on these pr oducts aim at environment protection, as it is 
known that mining of natural sand causes severe da mage to river bed and water quality. For silica 
sand, since the processing technology of polycrystallin e silicon is not advanced in China, purity of 
refined silicon is quite low and most silicon is  wasted in the processing  which causes not only 
pollution but wasting of natural resources. Curren tly, China eliminates most domestic natural sand 
mining and silic sand refinery and most of these products are imported. 
Argentina Question 
Paragraph 21, page 48 This paragraph indicates that "interim" applied MFN tariffs (interim tariffs) 
may be introduced or amended by the Tariff Commi ssion whenever it considers it necessary.  To what 
class of goods and which countries are interim tariff rates applied?  
Answer  
Please refer to Import and Export Tariff of  the P.R.C for detailed information.  
(iii) Tax rebates on exports 74 
 
Japan Question 12 
 (1) Recently, the return of VAT has been redu ced or abolished when nonferrous metals 
such as rare earths and magnesium are exported.  
Japan would like to confirm the purpose of this toge ther with the present return ratio of VAT of all 
commodities in every HS classification when they are exported. 
Answer  
There are 5 categories of VAT rebate rate for expo rt: 17%, 13%, 11%, 9% and 5%. The list of 
corresponding products subject to each category of re bate rate can be found on official website of 
General Administration of Taxation: www.chinatax.gov.cn. 
Japan Question 12 
 (2) Japan would like to confirm the reason or th e justification for the difference of the 
return ratio on every ite m when VAT is returned. WT/TPR/M/199/Add.1 
Page 212  
 
  Answer
 
Under the condition that so long as it does not go beyond the rate of VAT, to grant differenciated 
rates of VAT rebate on different export products, and selectively increase the cost of export of 
certain products is one of the important means to optimize the export structure, reduce trade 
surplus as well as other macro level adjustment th rough taxation policies is in line with the WTO 
provisions. 
Canada Question 55 
The example given in footnote 116 is of a rebate ra te on primary aluminium which, in 2004 starts out 
as 15%, and then is reduced to 8%. The latter is then removed in 2005. In 2006, a 5% export tax on primary aluminium with a purity of 99.5% and above is removed, while the ex port tax on purity levels 
below 99.5% stands. Then, on November 1, 2006,  the 5% export tax on the latter products is 
increased to 15%. It is also noted that the VA T rebate on exports of aluminium foil (primary 
aluminium is a major input) is 13%. It also states  that Chinese authorities do not believe the difference 
between the VAT rates and rebates constitutes a levy on exports. Can China please explain the 
reasons for its imposition, reduction and removal of VAT rebates (and export taxes) in this example 
and the reasons why China does not believe the difference between the VAT rates and rebates 
constitutes a levy on exports? 
Answer
 
Article 6 of GATT 1994 stipulates that "No produc t of the territory of any contracting party 
imported into the territory of any other contract ing party shall be subject to antidumping or 
countervailing duty by reason of the exemption of su ch product from duties or taxes borne by the 
like product when destined for consumption in the co untry of origin or exportation, or by reason of 
the refund of such duties or taxes." Therefore, it can be concluded that WTO only stipulates the cap of tax rebate, while the case where "more co llected, less rebated" or no rebate are not 
stipulated in the WTO rules and are deemed as  domestic sovereign issues of each Member.  
At present, the highest level of VAT rate is 17% wh ile the highest rebate rate is also 17%. Since the 
VAT rate and rebate rate are the same, China’s re bate measure is consistent with WTO rules.  
VAT and rebate are domestic circulation tax while e xport tariff is a kind of circulation tax which is 
collected only at borders. Since scope of tax coll ection is different, how much VAT is rebated has 
nothing to do with whether it constitutes export tariff.  
(iv) Tax concessions under processing trade 75 
(v) Export prohibitions, restrictions and licensing 76 
 
Switzerland Question 
Para. 120 of the Secretariat's report indicates that China has increased the lis t of items subject to 
export prohibition. Could China provide an exhaustiv e list of the items currently subject to export 
prohibition (HS number at 8-digit level and produc t description) as well as the WTO justification?  WT/TPR/M/199/Add.1 
 Page 213 
 
 
  Answer  
Tariff 
Heading Product description WTO consistency 
05069090 Bones and horn-cores,unworked, defatted,simply prepared, not 
cut to shape, nes Article XX, GATT 1994 
05071000 Ivory, its powder & waste, unworked Article XX, GATT 1994 
05100010 Bezoar Article XX, GATT 1994 
05100030 Musk Article XX, GATT 1994 
12119039 plants and parts of plants, used in pharmacy, nes Article XX, GATT 1994 
12119050 plants and parts of plants, used in perfumery Article XX, GATT 1994 
12119099 plants or their parts, use for insecticides, nes Article XX, GATT 1994 
12122020 Black moss,fresh chilled frozen or dried Article XX, GATT 1994 
29031400 Carbon tetrachloride Article XX, GATT 1994 
29031910 1,1,1-Trichloroethane (methyl chloroform) Article XX, GATT 1994 
29034300 Trichlorotrifluoroethanes Article XX, GATT 1994 
44029000 wood charcoal of other than bamboo Article XX, GATT 1994 
44031000 Wood in the rough, whether or not stripped of bark or 
sapwood, or roughly squared, treated with paint, stains, 
creosote or other preservatives Article XX, GATT 1994 
44034100 Dark Red Meranti, Light Re d Meranti and Meranti Bakau 
wood in the rough, whether or not stripped of bark or sapwood, 
or roughly squared, excl. treated with preservatives Article XX, GATT 1994 
44034910 Teak wood in the rough, whether or not stripped of bark or 
sapwood, or roughly squared, excl. treated with preservatives Article XX, GATT 1994 
44034990 Specified tropical wood in the rough, nes, whether or not 
stripped of bark or sapwood, or roughly squared, excl. treated 
with preservatives Article XX, GATT 1994 
44039100 Oak (Quercus spp.) wood in the rough, whether or not stripped 
of bark or sapwood, or roughly squared, excl. treated with 
preservatives Article XX, GATT 1994 
44039200 Beech (Fagus spp.) wood in the rough, whether or not stripped 
of bark or sapwood, or roughly squared, excl. treated with 
preservatives Article XX, GATT 1994 
44039910 Nan mu (phoebe) wood in the rough, whether or not stripped 
of bark or sapwood, or roughly squared, excl. treated with 
preservatives Article XX, GATT 1994 
44039920 Camphor wood in the rough, whether or not stripped of bark 
or sapwood, or roughly squared, excl. treated with preservatives Article XX, GATT 1994 
44039930 Rosewood in the rough, whether or not stripped of bark or 
sapwood, or roughly squared, excl. treated with preservatives Article XX, GATT 1994 
44039940 Kiri (paulownia) wood in the roug h, whether or not stripped of 
bark or sapwood, or roughly squared, excl. treated with 
preservatives Article XX, GATT 1994 
44039990 Wood, nes, in the rough, whether or not stripped of bark or 
sapwood, or roughly squared, excl. treated with preservatives Article XX, GATT 1994 
71101100 platinum unwrought or in powder form Article XX, GATT 1994 
71101910 platinum plates and sheets Article XX, GATT 1994 
05069090 Bones and horn-cores,unworked, defatted,simply prepared, not 
cut to shape, nes Article XX, GATT 1994 
(Cont'd) WT/TPR/M/199/Add.1 
Page 214  
 
  Tariff 
Heading Product description WTO consistency 
05071000 Ivory, its powder & waste, unworked Article XX, GATT 1994 
05100010 Bezoar Article XX, GATT 1994 
05100030 Musk Article XX, GATT 1994 
12119039 plants and parts of plants, used in pharmacy, nes Article XX, GATT 1994 
12119050 plants and parts of plants, used in perfumery Article XX, GATT 1994 
12119099 plants or their parts, use for insecticides, nes Article XX, GATT 1994 
12122020 Black moss,fresh chilled frozen or dried Article XX, GATT 1994 
29031400 Carbon tetrachloride Article XX, GATT 1994 
29031910 1,1,1-Trichloroethane (methyl chloroform) Article XX, GATT 1994 
29034300 Trichlorotrifluoroethanes Article XX, GATT 1994 
44029000 wood charcoal of other than bamboo Article XX, GATT 1994 
44031000 Wood in the rough, whether or not stripped of bark or 
sapwood, or roughly squared, treated with paint, stains, 
creosote or other preservatives Article XX, GATT 1994 
44034100 Dark Red Meranti, Light Re d Meranti and Meranti Bakau 
wood in the rough, whether or not stripped of bark or sapwood, 
or roughly squared, excl. treated with preservatives Article XX, GATT 1994 
44034910 Teak wood in the rough, whether or not stripped of bark or 
sapwood, or roughly squared, excl. treated with preservatives Article XX, GATT 1994 
44034990 Specified tropical wood in the rough, nes, whether or not 
stripped of bark or sapwood, or roughly squared, excl. treated 
with preservatives Article XX, GATT 1994 
44039100 Oak (Quercus spp.) wood in the rough, whether or not stripped 
of bark or sapwood, or roughly squared, excl. treated with 
preservatives Article XX, GATT 1994 
 
 (vi) Measures maintained by importing countries 79  (vii) State trading 79 
 (viii) Export promotion and marketing assistance 79 
 (4) M
EASURES AFFECTING PRODUCTION AND TRADE  81 
 (i) Taxation and tax incentives 81 
 
Canada Question 56 
Can China please advise why it has chosen to apply a VAT at a level of 13% on mining of metals and 
minerals? 
Answer  
Since China’s reform of taxation regime in 1994, a 17% rate of VAT has been leveied on iron ore 
products. However, in view of the historical burden due to social undertakings borne by the enterprises of mining industry, and sluggish bu siness performance of th ese enterprises due to 
depressed pricies of their products, the rate of VAT has been adjusted downward to 13% for metal 
and non-metal mineral products.   WT/TPR/M/199/Add.1 
 Page 215 
 
 
  (ii) Direct transfers and non-tax subsidies 88 
(iii) Other industrial policies and measures 89 
 
Canada Question 57 
Since a listing on the "prohibited categories" portion of the NDRC's Catalogue of Guidance 
Regarding Industrial Structural Adjustments essentially ends all investment in that sector, as well as 
the import, transfer, production, marketing and use of production processes, technologies, equipment, 
and products in the prohibited category, can China please provide information on the criteria 
established to evaluate whether a particular sector is included on the "prohibited" portion of the 
Catalogue? 
Answer  
Investment in project that falls into the category as  "to be eliminated" in the Guiding Catalogue for 
Restructuring Industries is prohibited. This measur e applies to both domestic and foreign investors.  
339 kinds of projects in the elimination category of the Guiding Catalogue of Industrial Structure 
all share the same feature, that is, high reso urce and energy consumption as well as heavy 
pollution and damage to environment. For example, small size coal mines, regular thermal power 
generating sets with stand-alone generating capacity lower than 50000 kw. blast furnace smaller than 100 cubic meters and self-Roasting Aluminium El ectrolysis Cell are all included in the 
elimination category. 
Canada Question 58 
The Secretariat Report notes in footnote 174 that in 2006 and 2007 the NDRC issued entry criteria 
for, inter alia , lead and zinc; tungsten; tin; antimony; electrolytic manganese metal and steel and that 
opinions were issued during the same years to restructure, inter alia , the lead and zinc; cement, coal, 
ferroalloy and coke industries. What considerati ons does the NDRC take into account when it makes a 
determination to issue entry criteria and to issue an opinion for restructuring? 
Answer
 
Overall policy objectives for industri al restructuring are as follows: 
 1. Pushing forward optimization and upgrading of industry structure.  2. Pushing forward sound development of manufacturing, agriculture and service 
industry. 
  3. Creating an industrial pattern taking agriculture as its basis, high-tech and new 
technology as its lead, basic industry and manufacturing as its support and with 
service industry in full development.  
 
4. Insist economical development, clean development and safe development to achieve 
sustainable development.  
Energy consumption is the foremost standard to  be considered when industry market access 
standard is formulated. Market access standards  for non-resource and energy saving as well as 
non-environment friendly projects in restricted  catalogue are much higher than those in 
encouraging catalogue. For those projects featur ing high resource and energy consumption as well 
as heavy pollution and damage to environm ent are not to enter into production. WT/TPR/M/199/Add.1 
Page 216  
 
   (iv) State-owned enterprises, privatization, corporate governance 92 
 (v) Competition and consumer protection policy 100 
 
Australia Questions 9 
we welcome China’s introduction of the Anti-M onopoly law (scheduled to take effect from 
1 August 2008).  We note, however, that foreign acquisitions of Chinese companies will have to go 
through "national security reviews" (Paragra ph 214 on page 102 of  WT/TPR/S/199).   
 a) Could China advise how and by whom "national security" tests will be conducted? 
Answer
 
According to Article 31 of China’s Anti-Monopoly Law, "in case of foreign acquisitions of Chinese 
companies, and or foreign investment in concentr ation of business operators that concern national 
security, foreign investors are subject to nation al security review according to regulations 
contained in this Law in addition to examinatio n of the concentration of business operators 
following relevant regulations of the State." Specific examination au thority and methods are yet to 
be set forth by supporting laws and regulations. 
United States Question 48 In paragraphs 211 through 214 of  Part III, the report discusses several important aspects of China’s 
new Anti-Monopoly Law (AML), which becomes effective 1 August 2008: 
 a. What are China’s plans for implementation of the AML given the very tight 
timeframe between now and August 2008, the AML's scheduled effective date? 
 EC Question 84 
The Report states that the implementing details of  the new Anti-Monopoly Law have not yet been 
formulated. Could China provide information when will the implementing details of the Anti-Monopoly Law be adopted and enter into force? 
Answer
 
The law enforcement authority of China’s Anti-Monopoly Law and its mandate will be further 
designated before Aug. 1st, 2008. Currently, th e State Council is working on the draft of 
Regulations on Declaring Concentration of Business Operators in preparation for the 
implementation of the Anti-Monopoly Law.  
Hong Kong, China Question 2 
We note from the Secretariat Report that implem enting regulations for the new Anti-Monopoly Law 
had not been formulated at the time of the Report.   According to the Report, the Anti-Monopoly Law 
will enter into force in August 2008.  We would appreciate an update from China regarding progress 
in respect of the implementing regulations. 
United States Question 48.b 
Does China expects to publish additional draft re gulations, either in advance of the August 2008 
effective date of the AML, or after?  If so, what  will these regulations cover or address?  For these and 
other AML implementing regulations, whether prepar ed before or after August 2008, will transition  WT/TPR/M/199/Add.1 
 Page 217 
 
 
  rules be adopted that will ensure that business opera tors have sufficient time to adjust to new AML 
rules as they come into effect?   
EC Question 85 
The Report indicates that, under the Anti-Monopoly Law, the Enforcement Authority is to be set up 
under the State Council and that it remains to be se en how the new Authority will coordinate with 
SAIC, MOFCOM, and the NDRC on the enforcement of the Anti Monopoly Law. Could China 
provide further details on the envisaged coordi nation between the Anti-Monopoly Law Enforcement 
Authority and SAIC, MOFCOM and NDRC in relati on with the enforcement of the Anti-Monopoly 
Law? 
Answer  
To ensure the timely and effective implementation of the Anti-Monopoly Law, China will formulate 
supporting legal documents such as relevant admin istrative regulations, sectoral regulations and 
guidelines. The State Council is working on the dr aft of Regulations on Declaring Concentration 
of Business Operators to ensure th e implementation of relevant articles in the law. Once the 
structural reform of the government under the sup ervision of the State Council is completed, the 
law enforcement authority of the Anti-Monopoly  Law will be designated, which will formulate 
regulations for sectors accordin g to its own mandate. Once the Anti-Monopoly Committee of the 
State Council is put in place, it will take full charge of the drafting of the implementing guidelines of this Law. At present, the Legislative Affai rs Office of the State Council has already completed 
the Draft for Comments of the State Council Regu lations on Declaration of Concentration of 
Business Operators (draft for comm ents). Comments are being solicited from all walks of life and 
the Regulations will be issued after revision and improvement. The Draft mainly includes 
stipulations in the following aspects: 1. definitio n of relevant concepts related to concentration of 
business operators; 2. specific requirements and mechanism of adjustment of declaration for 
concentration of business operators; 3. designa tion of the party obligatory for declaration of 
concentration of business operators; 4. estab lishment of the pre-consulting mechanism; 
5. requirements for declaration documents and relevant  materials; 6. establishment of the fast track 
mechanism of initial review; 7. confidential treatment of sensitive information.   
Japan Question 18 
After the new Anti-Monopoly Law is to be effectiv e in August 2008, Japan unde rstands that the scope 
of application of the new Anti-Monopoly Law and the other competition-related law such as the Law 
Countering Unfair Competition could be overlapped. Please explain relationship in the application of 
these laws after August 2008. Is the Anti-Monopoly La w applied prior to the regulations for certain 
sectors? 
Answer
 
The relationship between the Anti-Monopoly Law an d the supervisory laws of sectors is that the 
former is a jus commune (general law) while the la tter are jus singular (special laws). Therefore, 
where there are relevant stipulations in the special laws, the special laws shall apply. Otherwise, the 
general law shall apply.  
Costa Rica Question 26 
De acuerdo con el informe, algunas actividades relaci onadas con la agricultura se encuentran fuera del 
alcance de la nueva ley antimonopolio, ¿podrían indicarnos cuáles sectores específicos no se encuentran cubiertos dentro de dicha ley? (Párrafo 214) WT/TPR/M/199/Add.1 
Page 218  
 
  Japan Question 19 
Regarding the sentence "In addition, regulations for certain sectors, such  as aviation, electricity, postal 
and telecommunications services, include provisions to introduce and encourage market competition" (page 99) and "All sector of the economy, apart fr om certain activities related to agriculture, are 
covered by this law" (page 101), please explain the relationship in the application of the new Anti-
Monopoly Law and the existent regulations for above certain sectors.  
Answer
 
According to Article 7 of China’s Anti-Monopoly Law,  for industries that have significant bearings 
on the lifeline of national econo my and on national security, the State shall protect their lawful 
undertakings, and shall supervise and control th ese business conduct and the prices of commodities 
and services provided by these business operators, so  as to protect the consumer interests and 
facilitate technological advancements. Howev er, the business operators mentioned above shall 
engage in operations according to law, and should be honest, faithful and strictly self-disciplined, and accept public supervision, and shall not harm the consumer interests by taking advantage of their dominant position or exclusive rights to monopolize business and sales. 
Japan Question When the Anti-Monopoly applies to these sectors,  what will be the enforcement body on them? 
Answer
 
The Anti-Monopoly Law aims to safeguard the ord er of market competition while supervisory laws 
for sectors seek to promote ma rket competition. Therefore, th e Anti-Monopoly Law Enforcement 
Authority and the supervisory bodies for sectors sha ll perform their responsibilities according to 
relevant laws to safeguard the order of mark et competition and promote market competition 
respectively. 
Japan Question 20 
Japan understands that China is currently prepari ng various guidelines to allow the operation of the 
Anti-Monopoly Law by 1 August 2008.  
 (1) Could China let us know what the guidelines are about?  
  (2) What is the schedule of the formulation?  
Answer  
In view that the Anti-Monopoly Committee is yet to be established, China currently has neither 
begun the legislative process to formulate the im plementation guidelines of the Anti-Monopoly Law 
nor set up specific timetable to star t the process for such guidelines. 
Japan Question 21 Regarding the sentence "Whether the Government is  able to overcome these difficulties remains to be 
seen; it would depend not only on the efficiency  of the to-be-established Anti-Monopoly Law 
Enforcement Authority, but also on enforcement at  the local level." please explain the details about 
the enforcement system of the Anti-Monopoly Law in local level.   WT/TPR/M/199/Add.1 
 Page 219 
 
 
  Answer  
The enforcement system of the Anti-Monopoly Law at local levels will not be established until the 
Anti-Monopoly Law Enforcement Authority is in place and its mandate spelt out 
(vi) Intellectual property rights 103 
 
United States Question 50 
Paragraph 220 of Part III of the report notes that  China is currently revising its Patent Law.  
 a. What is China’s timetable for completing its revisions to the Patent Law?  The United 
States understands that the State Council has selectively circulated different iterations of draft revisions to the Patent Law.  Does China intend to circulate a draft of the 
revisions to the Patent Law for public co mment before it is finalized, as required by 
Section 2(C)(2) of Part I of China’s Protocol of Accession? 
Answer
 
The draft of the amendment to the patent law is in the process of review by the State Council and 
there is no specific timetable for the completion. Ch ina has published the draft of the revisions to 
the Patent Law on No.55 of China Foreign Tr ade and Economic Gazette in 2006 for public 
comments. 
The legislative process of Intellectual Property (IP) in China has been open and transparent, 
offering ample opportunities for the general public to voice their opinions and suggestions. For the 
third amendment to the Patent Law, China solicite d, on a broad basis, opinions from relevant 
government bodies, organizations, enterprises and in dividuals and received extensive comments. In 
addition, the Legislative Affairs Office of the Stat e Council held an international seminar between 
October 10 and 11, 2007 on the amendment to the Patent Law. Experts, scholars, business representatives from China, WIPO, US, EU, Japan, Brazil, and India etc. carried out comprehensive and in-depth discussions o ver issues related to the amendment. 
United States Question 51 
Paragraph 226 of Part III of the report notes that Chin a is currently revising its Trademark Law. What 
is China’s timetable for completing its revisions  to the Trademark Law?  The United States 
understands that the State Council has selectively circul ated different iterations of draft revisions to 
the Trademark Law.  Does China intend to circulat e a draft of the revisions to the Trademark Law for 
public comment before it is finalized, as required by S ection 2(C)(2) of Part I of China’s Protocol of 
Accession? 
Answer
 
The State Trademark Office of China (STO) began to solicit public opinions on the Trademark 
Law (amended draft) through mails and seminars since April, 2006. By the end of 2006, STO had 
received 48 correspondents with 1,012 pieces of sugg estions from 47 organiz ations, groups and 
individuals, including foreign organizations such as USPTO, JPO, IJNTA and AIPLA. In regard 
to the latest developments, STO submitted the Tr ademark Law (amended draft) to the Department 
of Law under the State Administration for In dustry and Commerce (SAIC) and launched a new 
round of outreach on September 24, 2007, invitin g comments from organizations and individuals at 
home and abroad. WT/TPR/M/199/Add.1 
Page 220  
 
  The legislative process of intellectual propert y has been featured by adequate openness and 
transparency. According to China’s WTO commitments, a certain period of time shall be set aside for public comments prior to the implementation of relevant laws, regulations and other measures. 
China has faithfully fulfilled its commitments during its legislation process 
United States Question 52 
In paragraph 228 of Part III, after explaining that tr ademark registration in China currently takes about 
24 months, the report states in a footnote that China intends to "shorten the time of the registration 
procedure to 18 months, by reinforcing management  and promoting the accuracy and speed of trade 
mark examination through computer examination system."  What changes are contemplated by 
"reinforcing management"?  What is the nature of the "computer examination system," and how will it 
be designed to promote "accuracy" and "speed" of examination? 
Answer
 
The number of trademark application in China has continuously risen for years and reached a new 
high of 766,000 cases in 2006. Accordingly, tr ademark review and retrieval have become 
increasingly difficult and complex, which resulted in huge amount of backlog of trademark 
registration applications. To improve the situa tion, the State Trademark Office has further 
reinforced management as well as safeguard mechanism to ensure smooth operation of the 
computer examination system. All staff of various key links of the registration process spared no 
effort to enhance efficiency. As a result, a tota l of over 310,000 trademark registration applications 
were processed and approved each year for 4 consecutive years. The annul registration per 
examiner is much higher than that of other countries. 
United States Question 55 Paragraphs 238 and 239 of Part III of the report refer to recent confusion among producers and 
consumers arising from the fact that both the State Trademark Office and AQSIQ approve geographical indications (GIs).  Please describe how these two agencies divide up their jurisdiction over GIs.  What steps have been taken to a ddress the confusion among producers and consumers?  
Switzerland Question 
As mentioned by the Secretariat in para. 239 of its  report, the coexistence of two systems caused some 
confusion among producers and consum ers and raises several questions with regard to the coherence 
of the legal framework for the protection of geogra phical indications (GIs) in China. The Secretariat 
further mentions that a new law on GIs is to be  issued before 2010. Could the Chinese authorities 
indicate how this law is going to fit in the existing systems of protection of geographical indications in 
their country? Shall the new law create a new categor y of protected geographical indications? If yes, 
could the Chinese authorities indicate what measur es shall be taken in or der to avoid possible 
conflicts between GI registrations 
Answer
 
The State Trademark Office of China protects the Collective Marks and Certification Marks 
pursuant to the Trademark Law. At the same time, the General Administration of Quality 
Supervision, Inspection, and Quarantine (AQSIQ) also provides protection in observance to the 
Provisions on the Protection of GI Products.  The above two documents clearly define the 
parameters and procedures of application, which proves to be not so difficult for producers and 
consumers to follow.  WT/TPR/M/199/Add.1 
 Page 221 
 
 
  United States Question 57 
Paragraph 244 of Part III of the report explains th at "50 IPR service centres had been set up all over 
the country" by the end of August, 2006.  What are the objectives of the service centres?  How does 
China assess the effectiveness of the ser vice centres in meeting those objectives?  
Answer  
IPR service centres (the Centers) are establishe d to serve as a nationwide e-platform for IPR 
protection. By setting up a complete working pr ocedure for complaints acceptance, referral, 
handling, tracking, feedback and compilation, th e Centres will definitely  improve the working 
mechanism for IPR protection in China. 
Since establishment so far, the 50 centers have received 3500 reports and complaints on IPR 
infringement and provided counseling services to th e general public and business enterprises close 
to 120,000 persons/times.  
United States Question 50.b The report explains that one of China’s purposes in re vising the Patent Law is to prevent the "abuse of 
patents."  Please explain what China means by the "abuse of patents" and provide examples of 
situations in which the "abuse of patents" takes place.  
EC Question 86 
The Report outlines that the Patent Law is curren tly being revised and that the Chinese authorities 
state that the purpose of the revision is to further enhance protection by: improving ‘patent agent’ 
system and the management of patent rights; cl arifying the criteria for granting patents; and 
preventing the abuse of patents. How do the Chin ese authorities intend to improve ‘patent agent’ 
system and the management of patent rights?  
EC Question 87 
How do the Chinese authorities intend to clar ify the criteria for granting patents? 
EC Question 88 
How do the Chinese authorities intend to  prevent the abuse of patents? Can China specify the scope of 
the concept of "abuse of patents"? When does Ch ina anticipate finalising this revision process? 
Answer
 
Article 8.2 of the TRIPs Agreement provides that  "Appropriate measures, provided that they are 
consistent with the provisions of this Agreement,  may be needed to preven t the abuse of intellectual 
property rights by right holders or the resort to  practices which unreasonably restrain trade or 
adversely affect the international transfer of te chnology." As the implementation of the Anti-
Monopoly Law of China, certain measures aiming at preventing the abuse of patents should be 
included in the patent system. 
Since the revision of the Patent Law is still goi ng on, a more specific definition on "abuse of 
patents" will be available once the new Patent Law gets promulgated. Nonetheless in reality, 
examples of "abuse of patents" could be easy to co me by, such as extreme conditions on licensing, 
or exorbitant licensing fees. For those Members that  are interested in this issue and want to learn WT/TPR/M/199/Add.1 
Page 222  
 
  more details, a submission from China on Intellect ual property rights issues in Standardization is 
also suggested to be referred. 
United States Question 54 
Paragraph 233 of Part III of the report discusses the role of the National Copyright Administration of 
China (NCAC) as the national copyright regulator and describes protections afforded by China’s 
Copyright law.  
 a) The report notes that "local copyri ght administration offices (under the local 
governments of provinces, autonomous regions , and municipalities directly under the 
Central Government) are in charge of local copyright registration . . . ."  Can a right holder file an application for registration in any of these local offices?  Is a 
registration at a local office effective throughout China? 
 b) The report states that that "typographical designs" are protected for ten years.  What 
types of "typographical designs" are protected? 
Answer
 
According to Article 3 of the existing Tentative Measures on the Voluntary Registration of Works, 
which was staged in 1994, "the copyright burea us of provinces, municipalities and autonomous 
regions are in charge of the registration of wo rks by authors and other copyright holders within 
their jurisdiction while the Nationa l Copyright Administration takes on  the registration of works by 
authors and other copyright holders of foreign countries and regions including Chinese Taibei, 
Hong Kong China and Macao China. Registrations  compliant with relevant rules and regulations 
are valid throughout the country.    
According to Article 35 of China’s Copyright Law, a publisher has the right to give permission to 
license or prohibit any other person to use the typo graphical design of books or periodicals that has 
been published. The term for the copyright pr otection provided for in the preceding paragraph 
shall be ten years, and expires on 3l December of the tenth year after the first publication of the 
books or periodicals using the typographical design. 
United States Question 49 
In paragraph 218 of Part III, the report states in a footnote that China made a reservation on 
paragraph 1 of Article 14 of the WIPO Perform ances and Phonograms Treaty, which addresses the 
right of making available of phonograms.  What ar e China’s reasons for making this reservation?  
Does China have any plans to remove the reservation?  Please explain.  
Answer  
Since this question goes beyond the framework of the TRIPS Agreement, it is better to be discussed 
in WIPO. 
United States Question 53 
Does China have any plans for reducing the backl og of proceedings currently pending before the 
Trademark Review and Adjudication Board described  in paragraph 230 of Part III of the report?  
Please explain.   WT/TPR/M/199/Add.1 
 Page 223 
 
 
  Answer  
The Trademark Office and the Trademark Review and Adjudication Board are taking effective 
measures to shorten the review period, inter a lia, recruiting 400 auxiliary staffs for trademark 
review and adjudication, and upgrading the comput ers and network to further expedite the review 
process. 
EC Question 111 
Provisional measures are a basic element in IPR en forcement. Could China explain how Article 50 
TRIPS is implemented in Chinese legislation? Co uld China provide relevant provisions of Law? 
Could China furnish statistical data regarding provi sional measures adopted by the judicial authorities 
over the last two years?  
Answer  
Articles related to provisional measures in China’ s existing effective laws include: Articles 74, 92-
96 and 99 of the Civil Procedure Law, Articles 49 and 50 of the Copyright Law, Articles 57 and 58 
of the Trademark Law, Article 61 of the Patent Law, Article 30 of Interpretations of the Supreme 
People’s Court Concerning the Application of Laws in the Trial of Civil Disputes over Copyright, 
Interpretations of the Supreme People’s Cour t Concerning Application of Law to Pre-trial 
Suspension of Acts of Infringement of Excl usive Right to Use Trademark and to Evidence 
Preservation, Interpretations of the Supreme People's Court Concerning People's Courts 
Subjecting Rights in Registered Trademarks to Property Preservation and Article 13 of Several 
Provisions of the Supreme People’s Court on Issu es Concerning Applicable Laws to the Trial of 
Patent Controversies.  
According to preliminary statistics, in 2007, local courts nationwide heard 134 and gave court 
ruling to 131 IPR-related cases of p re-trial suspension of infringement acts respectively. The actual 
rate of final court ruling in favour of the claim was 76.92%.  
EC Question 89 The Secretariat's report refers to the length of patent  protection (20 years). As it was asked by the EC 
in the previous Trade Policy Revi ew of China in 2006, some specif ic products require long additional 
periods for their development in order to obtain ma rketing authorisations. A number of countries have 
decided to compensate for these periods during which the patent cannot be exploited by an additional 
protection mechanism (in the EU: Supplementary Pr otection Certificate for pharmaceutical products). 
Does China plan to grant additional protection – in the form of patent term restoration or 
supplementary protection certificates – to produc ts that cannot be marketed before a specific 
authorisation has been given (such as pharmaceutical products)?  
Answer
 
Currently there are no such plans. EC Question 91 
The Report states that the procedures regarding patent  applications and granting of patents have not 
been changed since the previous TPR exercise. Neve rtheless, the number of patent applications has 
increased: in 2006, there were 210,490 applications  for inventions, an increase of 21.4% over the 
previous year (137, 327). In the same year, 57,786 patents of invention were approved, an increase of 
8.4% over the previous year (53,305). Does China plan to revise the procedures regarding patent WT/TPR/M/199/Add.1 
Page 224  
 
  applications and the granting of patents in order to  assure the ability of the Patent Office in processing 
an increasing number of applications?  
Answer
 
Although there has been a significant increase in  patent applications in recent years, China’s 
patent review has been expedited with remarkably enhanced ability in handling patent applications. 
According to statistics, in 2007, 100,275 invention patent applications were reviewed and processed 
in China, a yearly increase of 23.5%. The actual  review period was reduced by 27 months, from 
53 months in 2001 to 26 months in 2007. 
EC Question 92 According to the Report, Article 49 of the Patent  Law provides that the Government can grant a 
compulsory license in the event of a national emerge ncy, or if "any extraordinary state of affairs 
occurs", or in the "public interest". Could China expl ain the scope of this legal provision, in particular 
the concept of "extraordinary state of affairs", and assess the compliance of Article 49 of Patent Law 
with Article 31 of the TRIPS Agreement.  
Answer
 
The Chinese side confirms that the meaning of "e mergency or any extraordinary state of affairs" 
and "public interest" in Article49 of China’s Patent Law is in line with the meaning of "emergency 
or other circumstances of extreme urgency" and "public non-commercial use" in Article 31(b) of 
the TRIPS Agreement.  
EC Question 93 
The Report states that the Chinese authorities are considering including parallel imports in the 
revision of the Patent Law. Have the Chinese aut horities assessed the potential impact parallel imports 
may have on certain products such as  pharmaceuticals in terms of c ounterfeiting, and thus for health 
and safety of consumers, product recall, lack of quality control in an extended supply chain, etc.?  
Answer  
The revision of the Patent Law has not completed yet. In the process of revising the Patent Law, 
China mainly takes into consideration the fact  that the WTO Protocol amending the TRIPS 
Agreement has yet to be implemented. The Chines e side attaches great im portance to the quality 
control and supervision of drugs. 
EC Question 99 
The Report states that a "non-voluntary" license can be issued to exploit a layout design to remedy 
unfair competition practices.  
Could China explain what the "unfair competition practices" are, as foreseen in the positive 
legislation, and assess the compliance of this measure with Article 40 of the TRIPS Agreement?  WT/TPR/M/199/Add.1 
 Page 225 
 
 
  Answer  
The Chinese side confirms that China’s "non-voluntary" license with regard to the integrated 
circuit layout design complies with Article37 of the TRIPS Agreement. 
EC Question 107 The Report notes that IPR-related cases must meet minimum value thresholds to be considered for 
criminal prosecution. It is also mentioned that the value thresholds "may take the form of, inter alia, 
value of the goods, illegal gain or amount of illega l copies". Could China explain in which cases the 
different criteria apply? In doing so, could Ch ina provide some practical examples of value 
assessment?  
Answer
 
Section7, Chapter III of the Specific Provisions of China’s Criminal Law sets forth seven crimes 
infringing upon intellectual property rights. IPR- related crimes as prescribed by the articles of the 
Criminal Law are held for criminal responsibility du e to their "serious nature", or "thresholds" in 
terms of "sales volume" and "illicit income".   The Supreme People’s Court and the Supreme People’s Procuratorate issued judicial interp retations on handling IPR-related crimes in 
December 2004 and April 2007 respectively, further clarifying the "serious nature", "sales 
volume" and "illicit income" in the Criminal Law.  As for the value thresholds mentioned in the 
question that "may take the form of, inter alia , "value of the goods, illegal gain or amount of 
illegal copies", it is a general statement. In case of  each IPR-related crime, the provisions of the 
Criminal Law will be followed strictly and the evidence of the case drawn upon to determine the 
specific threshold.  
EC Question 108 
The Report states that Criteria on minimum thresh olds are specified under issued by the Supreme 
People’s Court (SPC) and the Supreme People's Procuratorate (SPP). Is there any stable set of criteria 
used for establishing the quantitative thresholds for criminal prosecution? Please assess the deterrent 
effect mentioned in Article 61 TRIPS with regard to the aforementioned system of determination of 
thresholds for criminal prosecution.  
Answer
 
The Supreme People’s Court and the Supreme People’s Procuratorate issued judicial 
interpretations on handling IPR-related crime s in December 2004 and April 2007 respectively, 
prescribing for the thresholds of IPR-related crime s. The aforementioned thresholds shall apply in 
determining whether the violators should be held  criminally responsible and be applied as well in 
the process of investigation and prosecution in such cases.  
EC Question 103 
According to the Secretariat's report, Chinese aut horities state that China has established a relatively 
complete legal framework on IPR protection, an d has made great achievements and progress on IPR 
enforcement. Furthermore, the Report outlines that  realising the importance of IPR protection in 
facilitating innovation in the economy, China has shif ted the focus from formulating legislation to 
enhancing law enforcement. The EC welcomes this approach, since we consider it to be the most 
appropriate one for ensuring sustainable foreign in vestment and promoting innovation. In order to 
enhance the enforcement of IPR, the commitment of  all administration bodies, a high degree of co-
ordination by the central authorities at a national level and the concurrence of both private WT/TPR/M/199/Add.1 
Page 226  
 
  stakeholders and the public opinion are required. Could China explain which specific measures the 
Chinese authorities have taken during the last two y ears (or intend to take) for channelling the above 
approach and achieving successful  results in IPR enforcement?  
Answer
 
Please refer to the section on IPR in the Government Statement of China. EC Question 104 
The Report indicates that administrative actions consist of mediation by the authorities, involving a 
large number of agencies. Could China provide a comprehensive scheme of the different administrative bodies engaged in the administrative  enforcement of intellectual property rights, 
including their respective competences? Could China pr ovide statistical data on the ex officio actions 
against IPR violations undertaken by the different  administrative bodies engaged in the enforcement, 
classified by administration?  
Answer
 
China’s IPR-related administration and law enfo rcement authorities mainly include the following: 
 1. Industrial and commercial administrative authorities: investigating and punishing 
infringements upon trademarks, geogr aphical indications, trade secrets and 
business names according to the Tradem ark Law and the Anti-Unfair Competition 
Law. 
 
 2. Copyright and cultural administration authorities: investigating and punishing 
violations related to copyright (inc luding software copyright and network 
copyright) and adjourning right of copyright according to the Copyright Law.  
 3. Patent authorities: investigating and p unishing violations related to patent and 
integrated circuit layout design accordin g to the Patent Law and the Regulations 
on Protection of Integrated Circuit Layout Design. 
 
 4. Quality inspection authorities: invest igating and punishing factories engaged in 
manufacturing fake, counterfeit and inf erior products according to the Product 
Quality Law; investigating and punishing violations related to geographical 
indications according to the Provisio ns on the Protection of Geographical 
Indication Products.      
 
 5. Agriculture and forestry authorities: inves tigating and punishing violations related 
to plant variety administration accordin g to the Regulations for Plant Variety 
Protection.    
 
 6. Customs: investigating and punishing IPR infringements in border entry and exit 
according to Customs Protection of Inte llectual Property Rights Regulations.  
EC Question 110 According to the Report, China has tried to increa se public awareness of IPR protection, and various 
authorities launched a series of campaigns.Could China assess the result of such campaigns and 
provide data regarding their evaluation on the ground?  WT/TPR/M/199/Add.1 
 Page 227 
 
 
  Answer  
 According to a survey conducted by "Intellectual Property Protectionin China" 
(http://www.ipr.gov.cn) at the end of 2007, 84% of  the surveyed acquired the full knowledge of the 
concept of intellectual property rights;  84 % believe that IPR protection is an inherent 
requir4ement for China's economic deve lopment and scientific innovation. 
IV. TRADE POLICIES BY SECTOR 109 
(1) I NTRODUCTION  109 
(2) A GRICULTURE   111 
(i) Features and market developments 111 (ii) Policy objective and administration 112 
 
United States Question 59 
Paragraph 12 of Part IV of the report explains th at the majority of Chinese peasants hold long-term 
land tenure certificates guaranteeing them the right to exploit the land.  Can these land tenure certificates be traded from the farmer  to anyone else of the farmer’s  choosing?  Can these land tenure 
certificates be offered as collateral for acquiri ng bank loans to purchase agriculture equipment, 
livestock, residence improvements, etc.?  
Answer
 
The holder of the land tenure right can circulate th e right in accordance with the provisions of Law 
of the P.R.C. on Land Contract in Rural Areas, which include, among others, the nature of tenure 
right as well as the purpose of the land use shall not be changed during circulation, and the transferee shall have the capability for agricultura l operation. The land tenure certificates shall not 
be used as mortgage for acquiring bank loans. 
United States Question 60 
Paragraph 14 of Part IV of the report highlights so me of China’s principal import suppliers and export 
destinations for agricultural comm odities.  The United States notes that China’s own customs data 
indicates that many of China’s imports originate fro m within China.  Can Ch ina clarify whether these 
imports are international products entering from Ch inese bonded trade zones with added value?  Are 
they Chinese products that were rejected from ov erseas markets and return ed to China? Please 
explain.  
Answer
 
China confirms that these products are from bonded areas with added value. EC Question 115 
The Report states that China's agri cultural policy has traditionally been  aimed at ensuring an adequate 
supply of food at stable prices. Could China ela borate on how it plans to address the high increase of 
the price of rice? 
Answer
 
In order to address the problems triggered by the worldwide rising price of rice, the Chinese 
government has taken a number of measures includin g: providing direct payment to grain growers, 
raising minimum procurement prices to stabilize gr ain production and increase total supply; taking WT/TPR/M/199/Add.1 
Page 228  
 
  interim restrictive measures on export of stable food; helping the transportation of rice from the 
north to the south of China to secure market su pply in these regions; and providing aid through 
fiscal disbursements to low-income groups to satisfy their basic needs for subsistence and 
livelihood.  
As a large country with a population of 1.3 billion people, China has always maintained and will 
continue to maintain its stance to achieve food sec urity through self-sufficiency. In order to realize 
this goal, the Chinese government has continued to  increase support to agricultural production so 
as to stabilize and increase food production capacity . In 2008, the budget allocation to agriculture 
is estimated to be 580 billion Yuan, an increase of 150 billion Yuan compared with the previous 
year, all of which are in line with the "green-box"  provisions. In addition, China will continue to 
implement and improve the food reserve scheme.  
(iii) Policy instruments 114 
 
Australia Question 10 
Could China provide information regarding any chang es to its agriculture export tariffs, or measures 
aimed at limiting exports (Paragraphs  25-30 on page 115 of WT/TPR/S/199)? 
Answer
 
Under normal trade, the changes in non-tariff measures for exportation of agricultural products 
since 2006 are as follows: 
 1. China adopted interim export tariff on wheat, maize, paddy, rice and soybean on 
Jan. 1, 2008.  The tariff rate varies from 5% to 25%, effective for year 2008.  
 
 2. China eliminated export VAT rebate for wheat, maize, paddy, rice and soybean on 
Dec. 20, 2007.  
  3. China adopted interim export quota license administration on wheat powder, maize 
powder and rice powder on Jan.1, 2008.  
 Australia Question 11 
 
Australia notes that China continues to operate a minimum procurement price scheme for rice and 
wheat in major producing areas (Paragraph 39 on page 117 of WT/TPR/S/199) and that the 
Government can intervene in grain markets when prices are rising rapidly (Paragraph 41 on page 118 
of WT/TPR/S/199).   a) What were China’s procurement prices fo r rice and wheat in 2007 (preferably in 
US$/tonne)?  
 
Answer
 
The minimum procurement price is 1.40 Yuan/Kg for (early-harvested) long -grain rice (harvested 
in summer), 1.44 Yuan/Kg for (mid or late-harve sted) long-grain rice, 1.50 Yuan/Kg for short-
grain rice; 1.44 Yuan/Kg for white wheat, and 1.38 Yuan/Kg for both red wheat and mixed blend wheat.  WT/TPR/M/199/Add.1 
 Page 229 
 
 
  Australia Question 11.b 
Have internal grain prices in China been rising rapi dly and has the government intervened? If so, what 
were the measures introduced and what is the lengt h of time these measures are expected to be in 
place? 
Answer  
The grain prices have soared since 2007, and the internal grain price in China also risen as a 
consequence. According to the statistics by MOFCOM, the country’s food price has gone up to 
4.22 Yuan/Kg in May 2008, compared with 3.98 Yuan/Kg in May 2007. In order to stabilize the internal price, and prevent the shortage of food supply and ensure food security, the Chinese government took interim measures to control ex port, including the elimination of export VAT 
rebate, the imposition of interim export tax and the export quota. The duration of the measure shall 
be determined according to the int ernal and external market conditions. 
Australia Question 11.c 
What measures does China implement to control gr ain exports? Have these been introduced and for 
what length of time are the measures expected to be in place? 
Answer
 
Please refer to answers to Question 11.a. and 11.b.  
United States Question 61 According to paragraph 20 of Part IV of the report,  imports of agricultural 
commodities such as wheat, cotton and corn are s ubjected to a 13% VAT in China, while like 
agricultural commodities produced and sold by sm all-scale farmers are exempt from the VAT.  
 a. How does China define a small-scale farmer?  
Answer  
China’s Taxation Law does not include a concep t for "small scale farmers". China understood the 
question from the US to refer to those produ cers and processors of primary agricultural 
commodities. In this respect, China’s Taxa tion Law has the following provisions:  
 1. According to Article 16 of the Interim Provisions on VAT of the People’s Republic 
of China, sales of farmers of their own products is exempted from VAT;   
 2. Article 31 of the Implementation Procedures of the Interim Provisions on VAT of 
the People’s Republic of China and item 1 of Article 16 of the Interim Provisions on VAT of the People’s Republic of China define that agriculture refers to 
plantation, livestock farming, forest ry, animal husbandry, aquaculture, 
agricultural producers are those including units and individuals engaged in agricultural production. Agricultural produ cts are those primary commodities, the 
specific range of which will be defined by the subordinate bureaus of China’s 
National Tax Bureau. 
 3. The explanatory note on the range of  VAT for agricultural products (CAI SHUI 
ZI[1995]52 stipulates that agricultural pr oducts refer to varies crops and primary 
commodities for animals. WT/TPR/M/199/Add.1 
Page 230  
 
  According to the Notice of the Ministry of Fi nance and the National Tax Bureau on Issuance of 
<Explanatory Note on the Range of VAT on Agricultu ral Products> as well as item 1 of Article 16 
of the Interim Provision on VAT of the People’s Republic of China, "agricultural products sold by 
agricultural producers are those produced by them",  refer to those products produced by those 
directly engaged in crop growing, harvesting, anim al husbandry, and fishery and defined in the 
Explanatory Note. And those agricultural product s purchased by the above referenced units and 
individuals and are defined in the explanatory note for the purpose of production and sale after 
processing, these products do not fall into the ra nge of exemption and are still subject to VAT 
follow the rate specified in relevant rules and regulations. 
United States Question 61.b 
Will China consider eliminating the 13% VAT on a ll agricultural commodities so that imported and 
domestically produced agricultural commodities r eceive the same treatment in accordance with 
China’s national treatment obligatio n under Article III of the Genera l Agreement on Tariffs and Trade 
1994?  
Brazil Question 7 
Why do agricultural products sold by farmers di rectly to consumers are exempt from VAT while 
imports of like products are not? (WT/TPR/S/199 Ch apter III.2.iv, Para. 40 and Chapter IV.2.iii, 
para. 20) 
Answer
 
According to the Interim Regulations of the P.R.C. on Value Added Tax, entities engaged in 
agricultural trade shall pay the VAT of 13% irresp ective of whether the agricultural products they 
sell are domestically produced or im ported. This is in full conformity with Article III of GATT 
1994. China has no plan to eliminate the VAT on agricultural products. 
United States Question 62 
According to paragraph 28 of Part IV of th e report, China imposes a variety of product and 
destination-specific export quotas on agricultural products.  These export quotas effectively create a situation in which domestic product prices could be below world average prices, thereby creating an 
advantageous situation for Chinese domestic agri-businesses processing these domestic goods and 
discourages them from procuring imports from other or igins.  In addition, these export quotas and the 
resulting lower domestic product prices would app ear to discourage entrepreneurship by rural 
producers who may want to shift production in line with world price signals.  Furthermore, export 
quotas are generally prohibited under Article XI of the General Agreement on Tariffs and Trade 1994.  
For each of the products identified in paragraph 28, please describe China’s justification under WTO 
rules for maintaining an export quota.  Can China pr ovide a timeline for when it will eliminate each of 
the export quotas?  
Answer
 
China does maintain export quota system on certa in agricultural products, however, the policy 
objective is not to provide competitive advantages for domestic agricultural processing industries, 
but simply to relieve the shortage of domestic  supply, and the pressure brought about by huge 
population. A stable supply of food contributes to the stablility of Chinese society and therefore 
complies with the provision of Article XI: 2(a) of  GATT 1994. As a matter of fact that, even with the 
measure in place domestic prices for cotton is often higher than that in international markets. The 
duration of such measures shall be determined  according to the dom estic market conditions.  WT/TPR/M/199/Add.1 
 Page 231 
 
 
  United States Question 63 
According to paragraphs 37 and 38 of Part IV of the report, China provides subsidies designed to 
provide agricultural producers with the opportun ity to purchase improved crop strains and seeds.  
How does China define an improved crop strain or  seed for purposes of these subsidies?  Which 
agency decides whether that defin ition is satisfied in a particular case?  Are imported crop strains and 
seeds eligible for the subsidies? 
Answer  
The seeds that can be defined as "improved stains or seeds" thus eligible for subsidy shall satisfy 
the following five criteria: 
 (1) The seed has been approved or certified by  the national or provincial crop variety 
approval committee. 
 (2) The seed has the characteristics of high breed and stable yields, resistant to disease, 
and is adaptive to weather or plantation conditions. 
 (3) The potential for quality of the seed meets the criteria of the relevant national 
standards or standards set by Ministry of Agriculture. 
 (4) The seed caters for the demand of the market, and is accepted by relevant parties, 
including the departments of scientific  research, (technology) promotion, 
agricultural enterprises and farmers.  
 (5) The seed has accustomed  to the local climates.  
The provincial agricultural admin istrations/authorities are responsible for the approval of the 
"improved stains or seeds". 
Imported crop strains or seeds are also eligible for su ch subsidy, if they can meet the criteria above. 
United States Question 64 
Paragraph 39 of Part IV of the report discusses certain price controls still maintained by China.  Could 
China explain the minimum procurement price schemes currently in place for rice and wheat.  For example, how are the minimum prices determined?  How often are they changed?  What areas of 
China do the schemes cover?  Which agency is  responsible for administering the schemes? 
Answer
 
The minimum procurement price is determined on the basis of a variety of factors, including crop 
production cost, and the food prices in domestic and international markets. The minimum procurement prices usually remain stable and may be  adjusted according to market conditions. The 
minimum procurement scheme is applied across the whole county and administered by the 
departments in charge of development and reform in  coordination with departments of finance, 
and agriculture under the State Council, which entrust entities engaged in crop trade for implementation. WT/TPR/M/199/Add.1 
Page 232  
 
  United States Question 65 
Paragraph 41 of Part IV of the report states that Ch ina has a functioning grain reserve system that is 
coordinated by the central and local governments.   Can China explain the methods that it uses to 
determine what grain reserve levels are suitable?   Do these grain reserve levels take into account 
grain held by agricultural producers?  
Answer
 
The grain reserve level is determined on the basis of a variety of factors, including production 
capacity, possible changes in consumption as well as the demand and supply of international 
market. Currently, the grain reserve is  maintained at a level of 150- 200 million tons, which is more 
than 35% of the annual national consumption or one fold higher than the food security threshold 
of 17-18% proposed by FAO. The grain reserve doesn’t include the grain stocked by farmers.  
(3) E NERGY   118 
(i) Introduction  118 
 
United States Question 66 
 In paragraph 45 of Part IV, the report states th at China does not have a comprehensive law or 
regulatory framework for the energy sector.  It also notes that China is drafting a law that will regulate 
certain energy sub-sectors.  Will this law regul ate bio-fuels?  Can producers of bio-fuels use 
commodities that compete with food or feed crops?  Is foreign investment in the bio-fuels sub-sector restricted or prohibited?  
Chile Question 
Energy Paragraph 45 When is this draft law due to  be finalized? Has China set itself a deadline for 
adopting and implementing this legislation?  Can China provide any indication of the main lines of 
this legal framework, the priorities and other relevant issues? 
Answer
 
Public opinion solicitation of draft of Law of the P.R.C on Energy was concluded on Feb. 1, 2008. 
the Chinese government will further modify the draft with regard to the solicited opinions. The draft can be viewed at official website of NDRC: http://www.ndrc.gov.cn/yjzq/W020071227339 
111610738.pdf. 
In China, there is huge potential for development of biogas which is mainly in form of marsh gas. 
At present, there are 27 million bio gas pools in China and annual bio gas consumption reaches 
11 billion cubic meters. Pursuant to China’s Na tional Climate Change Programme, development 
biomass energy is deemed as one of the measures to cope with climate change and green-house gas 
emission. In December, 2007, the Chinese governm ent published the White Paper on China's 
Energy Conditions and Policies. In the white pap er, China deemed development of reproducible 
biomass energy as part of China’s national stra tegy for energy. To preven t the competition between 
biomass energy crop with food supply, China restri cts the number and scale of bio-fuel projects. 
The restriction applies to both domestic and fo reign investors. Foreign investment in biomass 
energy still falls into the restricted category in the Catalogue of Foreign Investment Industries.  WT/TPR/M/199/Add.1 
 Page 233 
 
 
  EC Question 116 
The amendment to the Energy Conservation Law (1998) was approved on 28 October 2007 and took 
effect on 1 April 2008. After the institutional restru cturing in March, the NELG has been integrated 
into the National Bureau of Energy and Nationa l Energy Commission, both under the NDRC. Could 
China explain how policy-making and regulation in the energy sector has been organised and its 
foreseen consequences? 
Answer  
The new agency responsible for energy policy is  still in the process of reorganization and 
adjustment. Its functions will be announced soon. 
EC Question: 117  The Report states that there is no comprehensive law and no real regulatory 
framework for the energy sector and that the legi slative framework continues to be provided by 
regulations and administrative documents rather th an by laws.   In 2006, the Authorities started 
drafting an energy law, to regulate the oil, electri city, coal, and natural gas sub sectors. Which are the 
government regulatory goals as for markets access, pr ivate investment and private initiative in such 
law? 
Answer  
The basic goal of market access provisions containe d in the draft Energy Law is to build a stable, 
economic, clean and safe system of energy suppl y and service, ensure sustainable development of 
energy, promote the construction of a resource-sa ving and environmental -friendly society and 
advance the harmonized development of energy, economy and society. From such a standpoint, the Chinese government encourages all types of entities to engage in exploration and utilization of 
energy based on rule of law and believes that ma rket force should play a fundamental role in 
resource allocation in the energy field. 
EC Question 118 
Does China foresee a tendering system that will improve competitiveness among Chinese and foreign 
operators and spur foreign investment? 
Answer
 
The Chinese government is committed to building a stable, economic, clean and save system of 
energy supply and service. We do not rule out any a lternative that could help to realize such an 
objective. 
(ii) Key sub-sectors 119 
(4) M ANUFACTURING  128 
(i) Iron and steel  128 
 Mexico Question Add.1: 2 
What are the criteria for determining whether a stee l/iron production unit is obsolete?  What practical 
measures have been taken to move ahead with the closure of obsolete units? WT/TPR/M/199/Add.1 
Page 234  
 
  Answer
 
All the obsolete technology and equipments have b een listed in the first batch of Catalogue of 
Prohibition of Repetitive Project Investment in In dustrial and Commercial Area, the Second Batch 
of Catalogue of Outdated Production Capacity, Techniques and Products and Guiding Catalogue for Restructuring Industries. 
To restrict the extraction and production of reso urce-intensive commodities or products of high 
pollution and high energy consumption, China has taken measures including raising standard and 
qualification requirement for market access, increasing resource tax and enhancing surveillance 
for environment protection, and all these effort s have already produced positive results. In 2007, 
China has eliminated 46.59 million tons of iron-m aking capacity and 37.47 million tons of steeling-
making capacity reduced the consumption of stan dard coal and emission of sulphur dioxide by 
17 million tons and 90,000 tons respectively. Mo reover, production capacity of 21.57 million Kw of 
small coal-base power plants was eliminated , 11200 small coal mines were shut down and 
87 million tons of cement produc tion were eliminated. In addition, approval of investment projects 
are subject to strict environment assessment and the policy of "regional investment restriction" for 
purpose of environment protection has been impl emented. All these measures have worked together 
to contain the growth of investment in these industries. So far 12 projects have been shut down permanently and 47 projects, which were built w ithout approval, have been either stopped or 
suspended from production. 
Mexico Question Add.1: 4 
China further states that its steel industry developm ent policy supports the expansion of existing steel 
makers, as "in principle" new projects will not be ap proved, and some small scale producers are to be 
closed down or acquired by large ones.  Does this m ean that China's State policy will be to stimulate 
output by existing producers through consolidations a nd that, in other words, the ultimate goal is to 
increase production?  If not, please explain.  Additiona lly, what mechanisms would be used for that 
purpose? 
Answer
 
The Steel Industry Development Policy does not incl ude any provision to encourage the production 
capacity of existing producers or to clo se down small scale steel/iron plants.  
To restrict the extraction and production of reso urce-intensive commodities or products of high 
pollution and high energy consumption, China has taken measures in recent years including 
raising standard and qualification requirement fo r market access, increasing resource tax and 
enhancing surveillance for environment protection,  which result in closing down of small-scale 
steel/iron plants involving high pollution, energy consumption and usage of backward and obsolete 
technology.  
Mexico Question Add.1: 5 
The document indicates that this policy also enc ourages the use of domestically produced equipment 
or technology, and provides tax refunds, discounted interest rat es, and funds for research and 
development to major iron and steel projects using newly developed domestic equipment.  Likewise, 
it goes on to mention that under Article 18 of the Steel Industry Development Policy, enterprises are 
encouraged to use domestic equipment and tec hnology and to reduce imports, while assistance is 
provided to domestic equipment manufacturers to export technology and metallurgy equipment, for 
example, in the form of export credit.  Please expl ain how all of the foregoi ng is consistent with 
China's obligations under the WTO Agreemen t on Subsidies and Countervailing Measures.  WT/TPR/M/199/Add.1 
 Page 235 
 
 
  Answer  
The Steel Industry Development Policy embodies ma cro guidance from the government in steel 
industry. The document is not compulsory and do es not include any provision to provide to 
domestic equipment manufacturers to export technology and metallurgy equipment, 
Mexico Question Add.1: 6 
Are enterprises with "automatic" licenses to import ir on ore eligible for benefits in addition to the 
right to import the ore, and if so, what are these benefits? 
Answer  
China adopts automatic import licensing in line with Agreement on Import Licensing Procedures. 
License holders do not have any other benefit in holding the licensing.  
Mexico Question Add.1: 7 As far as we understand, China has adopted a number  of measures to discourage exports.  In this 
connection, the report mentions that "in September 2006, VAT rebates applicable to certain finished 
steel products were reduced from 11% to 8%;  and in July 2007, rebates were eliminated for 
553 items (including iron and steel pr oducts regarded as highly energ y consuming, highly polluting, 
and consuming large amounts of raw materials);  and were reduced for 2,268 items that the authorities considered prone to trade fr iction (including some steel products)" .  However, no mention 
is made of either the former or the current rate  of VAT, or of the way in which VAT is calculated 
(according to our understanding, the tax is assessed on  production rather than on consumption).  It is 
important to emphasize that alt hough VAT rebates have been reduced, if the applicable rate is not 
sufficiently high, the risk is that this will not discourage exports at all.  We would appreciate 
clarification regarding the applicable rates and how China expects such measures to effectively 
discourage its exports 
Answer
 
Since policy of reduction and abolition of VAT rebate on  some iron/steel products came into effect, 
there has been a noticeable decrease in iron/steel export. In January and February, steel product 
and steel billet export amounted to 7.25 million and 80000 tons, with a 17.2% and 92.6% decrease 
respectively as comparing with the same period la st year. For February alone, export of steel 
product hit the lowest point since May, 2006 while there was no export of steel billet.  
Australia Question 14 
Australia remains concerned about aspects of Chin a’s iron ore import licensing system (Paragraph 88 
on page 129 of WT/TPR/S/199).   
a) Could China provide details of its iron ore import licensing system, including 
industry involvement and any limitations on importers? 
Answer  
China adopts automatic import licensing on iron o re in consistency with WTO rules. Automatic 
import licensing is in place for statistics purpo se. For application for automatic import license by 
importers in consistency with domestic laws an d regulations, China does not exercise any other 
restrictions.  WT/TPR/M/199/Add.1 
Page 236  
 
  Australia Question 14.b) 
We encourage China to notify the WTO of the full details of its import licensing system, including 
involvement of industry groups a nd any limitations on importers. 
Answer
 
China notified the revised Administ rative Measures on Automatic Im port Licensing of Goods to the 
WTO in 2006. Moreover, China has already m ade known the newly added products to the 
catalogue of products subject to automatic impor t licensing to all WTO Members in many sessions 
of LIC committee. China honoured its trans parency obligation. At present, application for 
automatic import licence is in consistency with the provisions in Administrative Measures on Automatic Import Licensing of Good, and there is no new information to be notified. 
Australia Question 14.c) Has China notified the WTO of the China Iron and St eel Association’s registration system for iron ore 
imports? 
Answer
 
Qualification requirement by indu strial associations are self-di sciplinary rules for enterprises 
registered with the industrial associations. MOFCOM does not have any qualification requirement 
on iron ore importers and China does not undertak e notification obligation in this regard.  
Australia Question: 14.d) 
What is the link between the registration system and the import license system? 
Answer  
Please refer to the answer to Australia Question 14.c) and 14.d) 
Australia Question 17 Australia notes China has reduced VAT rebate ra tes for iron and steel exports (Paragraph 89 on 
page 129 of WT/TPR/S/199).  
a) Does China plan to further reduce the va lue added tax (VAT) rebate for steel 
exports?  If so, within what time frame?   
Answer
 
China has no plan to further reduce VAT rebate rate on iron and steel product at present.  Australia Question 17.b) 
What is the situation in regard to VAT rebates on exports of other products? 
Answer
 
There are 5 categories of VAT rebate rate for expo rt: 17%, 13%, 11%, 9% and 5%. The list of 
corresponding products subject to each category of re bate rate can be viewed on official website of 
General Administration of Taxation: www.chinatax.gov.cn.  WT/TPR/M/199/Add.1 
 Page 237 
 
 
  Australia Question 17.c) 
What export restraints (if any) has China implemente d, or is planning to implement, (e.g. "heavy lift 
charges") in relation to flat steel product exports? 
Answer  
Since the adjustment of VAT rebate policy on 2831 products on July 1, 2007, China has not 
planned to further restrict export of flat steel.  
Australia Question 15 
What policy tools does China use at the national, provincial and local government level, to channel 
resources into, or encourage the development of its steel industry?  (e.g. tax incentives; non-tax 
subsidies; loans from SOEs at non-market rates; pr ice controls or subsidies for raw materials and 
inputs; sector-specific industrial policies; land gran ts; exemptions from local, regional or national 
requirements that a foreigner might be subject to; subsidised utility charges, government procurement 
procedures favouring domestically owned companies; or other forms of "guidance"). 
Answer  
China does not encourage the expansion of production capacity in steel industry and the objective 
of development in China’s steel industry is to satisfy the need in domestic market.  
(ii) Textiles and clothing 130 
 
EC Question 119 
No data were made available to the Secretariat on the shares of SOEs, FIEs and domestic private 
enterprises in total output (for firms with annua l turnover above Y 5 million) .Could China make such 
information available?  
Answer  
According to statistics, in 2006 the total numb er of enterprises with annual turnover above 
5 million RMB in the textile industry was approximatedly 39,000 and their total output reached 2501.69 billion RMB. There were around 1200 SOEs, co vering 3.2% of the total number and 4% of 
the total output. The rest were private and foreign enterprises. 
EC Question 120 
Does China intend to increase the related sh are of domestic production (SOEs and private 
enterprises)? If so, how? 
Answer
 
The textile industry in China is a highly compe titive industry. With many years of development and 
through competition, the level of concentration an d technology has been enhanced considerably. 
By 2006, the accumulative FDI in textile indust ry exceeded 24.4 billion USD and the market share 
of foreign enterprises was more than 30%. With  further brand name promotion and innovation 
through science and technological advancement, both domestic and foreign enterprises will keep a momentum of steady growth in the future. WT/TPR/M/199/Add.1 
Page 238  
 
  EC Question 121 
Reference is made to the Development Guidelin es of the Textile Industry which proposes upgrading 
technology and increasing the production of hi gh-quality products, developing energy-saving 
techniques, and promoting the development of th e industry in central and western China. What 
progress was made in the last year in the impl ementation of these Guide lines in each of these 
objectives?  Could concrete data  be shared on this progress? 
Answer
 
The textile industry adjusts itself according mark et conditions. In the past year, as a result of 
increasing exchange rate of RMB and rising cost s of labour and raw materials, some enterprises 
chose to move from costal areas to the central  and west parts of China in pursuit of cost 
advantages. Some leading enterprises, however, chose to stay in the east and enhance their 
competitiveness through improving product mix and focusing on R&D and brand name marketing. All these are necessary courses of restructuring th at the textile industry has to go through.  
(iii) Automotive sector 132 
 
Brazil Question 2 
Please explain the 50% foreign-ownership restricti on in vehicle manufacturing, including completely 
built-up units, automobiles for special use, agricu ltural transport vehicles, and motorcycles, as 
indicated in paragraph 100 of the Secretariat’s report (doc WT/TPR/199)?  
Answer
 
In China’s Working Party Report, China made co mmitments only on phasing out limitation on 
foreign equity of not more than 50% in engine manufacturing through joint ventures. Except this, 
China has made no commitment on limitation on fo reign equity in car manufacturing, nor does the 
WTO TRIMs Agreement have any articles regardi ng caps on foreign shareholding.  
Pursuant to Article 48 of Automobile Industry Development Policy, "for manufacturer of CBU, 
specialized automobiles, agro-u se transportation automobiles and motorcycles, domestic investment 
should not be lower than 50% in joint venture  enterprises." The current investment measures 
applied to automobile manufacturing industry fu lly embodies the current status-quo of Chinese 
automobile industry, and the measures are consistent with China’s accession commitment and WTO rules. 
Brazil Question 3 
Please provide a definition for "completely built-up units" and, if available, the corresponding HS 
code. Are "completely built-up units" to be understood as ready-for-sale automobiles? Are 
"completely built-up units" to be understood as CKD (Completely-Knocked-Down) or SKD (Semi-
Knocked-Down) units? 
Answer
 
The document referred to in Secretariat report is the Notice on Regulating Exportation of 
Automobiles.   WT/TPR/M/199/Add.1 
 Page 239 
 
 
  Pursuant to Annex 1(the Catalogue of Automobil es subject to Export License) to the Notice on 
Regulating Exportation of Automobiles, China does not give the definition on CBU, Annex 1 lists 54 HS 8-digit-level tariff lines:  
87012000 ，87021091 ，87021092 ，87021093 ，87029010 ，87029020 ，87029030 ，87032130 ，87032190 ，
87032230 ，87032240 ，87032250 ，87032290 ，87032314 ，87032315 ，87032316 ，87032319 ，87032334 ，
87032335 ，87032336 ，87032339 ，87032430 ，87032440 ，87032450 ，87032490 ，87033130 ，87033140 ，
87033150 ，87033190 ，87033230 ，87033240 ，87033250 ，87033290 ，87033330 ，87033330 ，87033340 ，
87033350 ，87033390 ，87039000 ，87041030 ，87041090 ，87042100 ，87042230 ，87042240 ，87042300 ，
87043100 ，87043230 ，87043240 ，87049000 ，87060010 ，87060021 ，87060022 ，87060030 ，87060090. 
China would like to note that the original version of all the Chinese laws, regulations and rules are 
only in Chinese, so is the Notice on Regulatin g Exportation of Automobile. Therefore, China 
would suggest members clarify the above-mentione d 54 tariff lines according to their numbers. 
Brazil Question 4 
Is there a definition for "environmentally friendly" auto manufacturers, as mentioned in paragraph 102 
of the Secretariat’s report (doc WT/TPR/199)? If yes, please provide the corresponding definition. 
Answer  
The document referred to in the Secretariat report is the Notice on Opinions from NDRC regarding 
Structural Adjustment in Automobile Industry (FA GAI GONG YE [2006] 2882), published by 
NDRC on December 20, 2006.  
Original wording in Chinese of the article in the Notice regarding "environmentally friendly 
automobiles" can be translated in full as "Automobile manufacturing enterprises that take 
structural optimization as their first priority so  as to promote and strengthen R&D and production 
of energy-saving, environmental friendly and neo energy automobiles." The Chinese government 
has not further specific definitions for standards  on "energy-saving, environmental friendly and 
neo energy" 
Brazil Question 5 
Please explain any geographical limitation for the "estab lishment of new factories in another location" 
being apparently linked to a performance thre shold, as mentioned in paragraph 103 of the 
Secretariat’s report (doc WT/TPR/199)? 
Answer  
The document referred to in the Secretariat report is the Notice on Opinions from NDRC regarding 
Structural Adjustment in Automobile Industry (FA GAI GONG YE [2006] 2882), published by 
NDRC on December 20, 2006.  
Original wording in Chinese of the article in the Notice regarding "establishment of new CBU 
factories in another location" can be translated in  full as "besides the requirements in Automobile 
Industry Development Policy, current CBU manufactu rer, which needs to establish another factory 
in another location", has to m eet the following requirements:  
1. auto sales in the previous year shall account for more than 80% of the approved 
production capacity, WT/TPR/M/199/Add.1 
Page 240  
 
  2. for the manufacturer whose production capacity has not been approved or 
registered by competent Chinese authorities, its previous auto sales should not be 
fewer than: 
a. 100000 sedan cars, 50000 SUVs, 50000 MPVs, 80000 other kinds of 
personal-use passenger cars,  or 
b. 10000 heavy trucks, 50000 medium-s ized trucks, 100000 light trucks, 
100000 mini trucks, or  
c. 5000 heavy and medium-sized comm ercial-use passenger cars, 50000 light 
commercial-use passenger cars. 
Australia Question 19 
In 2006, 3.2 per cent of vehicles sold in China we re imported (3.4 per cent in 2004).  The simple 
average applied tariff (including interim duties) for motor vehicles (ISIC3843) was 13.5 per cent (14.8 per cent in 2005) (Paragraphs 99-104 on pages 132-133 of WT/TPR/S/199).  Australia 
understands (as per tariff data available throu gh the WTO website) that the applied tariffs for 
passenger motor vehicles can range from 25 per cent -30 per cent and the applied tariffs for 
automotive components can range from 10 per cent -22 per cent.  
a) Does China have any plans to reduce its import tariffs on automotive products in the 
near future? 
After China’s accession into WTO, China has implemen ted most of its commitments regarding tariff 
concession. China has no plan to further lower bound ra te or applied rate of imported cars and parts. 
EC Question 122 
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. Could 
China indicate when this restriction will be removed? 
Answer
 
China didn’t commit itself to remove the 50% shareholding limit on foreign investment in 
automobile enterprises and has no plans to elimin ate such limitation either. Nonetheless, with the 
implementation of automobile industry policy,  both foreign and domestic enterprises enjoy 
opportunities to develop. 
EC Question 123 
Substantial investment in the automotive sector in recent years has apparently created excess capacity. 
Thus, in December 2006, the Notice on Opinions to  Restructure the Auto Industry was issued to, inter 
alia, curb investment in the automotive sector a nd develop more "environmentally friendly" auto 
manufacturers. Has the 2006 Notice succeeded to cu rb capacity increases in the sector? Has there 
been a change in pattern of new capacity creation,  in terms of proportion of FIEs vs. Chinese-owned 
vehicle manufacturers, as compared to previous years?  WT/TPR/M/199/Add.1 
 Page 241 
 
 
  Answer  
The accumulated production capacity of the auto mobile industry is being slowly absorbed even 
though the momentum of growth is expected to  continue for a while. But with mounting pressure 
on input cost ，competition and environmental protection, the pace of production capacity 
expansion is likely to further slow down. Currentl y the pattern of production stays much the same 
as before. In the passenger car sector, which acco unts for more than 70% of the total output of 
China’s automobile industry, more than 75% were produced by joint-ventures. 
EC Question 126 Automotive regulations in China are national a nd not consistent with those of the UNECE 1958 
Agreement concerning Uniform Technical Prescriptions and WP.29. A Chinese standard may be a mix of a UNECE Regulation and a National Standard . The adoption of "mixed standards" makes it 
difficult for importers to meet that unique mix of requirements. Does China have any plans to adopt 
and accept UNECE Regulations without changes unique  to China? Does China have plans to accede 
to the UNECE 1958 Agreement? 
Answer
 
The compulsory national standards on automobiles are established on the basis of the framework 
provided by the UNECE 1958 Agreement and have been followed to a greater extent and even 
adopted quite a number of technical regulations contained therein. The Chinese government is 
currently analyzing the feasibility of joining the 1958 Agreement. However, at the present stage due 
to some major difference in regulatory regime, le gal framework and technical regulation system, it 
is still premature for China to join the 1958 Agreement. 
EC Question 127 
According to the Secretariat's report, Article 39 of  the Automobile Trade Policy prohibits unfair trade 
with regard to imports of automobiles and parts;   the competent authorities under the State Council 
may implement anti-dumping, countervailing, and saf eguard measures, establish a warning system, 
and conduct investigations into the competitiveness of the automob ile industry. Have the Chinese 
authorities implemented any such action in the auto motive sector in the course of the last 2 years? 
Answer  
No such cases in the past 2 years. 
EC Question 130 Rising duties have not slowed down Chinese imports of rough timber. What is the amount of 
subsidies (including tax measures) granted to  this industry in the last two years? 
Answer
 
In 2006, China made an adjustment to its taxation policy and levied consumption tax and reduced 
export tax rebate on some wood products with a view to achieving the goals of saving forest 
resources and encouraging comprehensive utilizatio n of timber. The policies have taken positive 
effects. For example, the production and export of hard wood flooring decreased while export of 
laminate flooring increased. WT/TPR/M/199/Add.1 
Page 242  
 
  EC Question 131 
Regarding shipbuilding, China enjoys currently a 28 % world-market share in terms of new orders 
expressed by CGT. China is the third largest shipbuild er in the world with production (completion) of 
more than -6 millions CGT in 2007 in comparis on with 1.1 million CGT in 2000. China has very 
ambitious plans to become the world's largest shipbui lder by 2015. In this context, and at the occasion 
of last TRM, the EC raised the following question:  "Does China intend to use direct or indirect 
support measures (such as tax breaks, exemption from business income taxes, preferential policies for 
exports of sea-going ships, exemption for new sh ip-leasing institutions from paying business taxes for 
at least five years, and reduced business tax ra te)?" China replied: "Support measures from the 
Chinese government to the development of the shipbu ilding industry will take into full consideration 
of the disciplines of the relevant WTO agreements". 
Answer
 
As far as we know, EC is one of the WTO Memb ers that have provided the biggest amount of 
subsidies to shipbuilding industry. China takes g reat interest in learning about the dispute cases 
between EC and other Members. The main cons ideration of the Chinese government to develop 
industry development plans is to guide enterprises, such as the 11th Five-year Plan for Ship 
Technology and gives appropriate support in training and technological innovation. 
Canada Question 70 
Would China please provide details on its mandato ry technical regulationsns for importing a new 
vehicle/auto parts into China? 
Answer  
Before China publishes its implementation ru le for compulsory certification for car/car 
components, we will make notification to WTO as  required by TBT Agreement. Comments from all 
Members will be collected and taken into considerati on in the modification of the rules. Aside from 
that, China has been holding annual technical mee tings with foreign car associations and issues 
concerning compulsory certification are discussed at those meetings. 
Australia Question 18 China's policy in the automotive sector seems to be  largely unchanged since its previous Review.  
Australia notes from the previous WTO Secretariat report (Paragraph 87 on page 189 of WT/TPR/S/161) that, apart from the import tariffs , China uses an array of non-tariff measures to 
restrict imports of manufactured goods. What measur es have been taken (or have been planned), since 
the last review, to enhance market  access in the automotive sector?  
Answer
 
Other than import tariff, China does not maintain  any non-tariff measures to restrict quantity of 
automobile import. The number of automobile im port has been on the rise in recent years. For 
example, in 2007, the number of automobile and automobile chassis import was increased by 38% 
compared with last year.   WT/TPR/M/199/Add.1 
 Page 243 
 
 
  (iv) Electronics and information industry 134 
(5) S ERVICES   135 
(i) Overview  135 (ii) Commitments under the General Ag reement on Trade in Services 137 
(iii) Financial Services 137 
 
United States Question 67 
Paragraph 120 of Part IV of th e report describes China’s services sector as "characterized by state 
involvement through SOEs," with "significant restric tions on foreign investment."   It also notes that 
in some sectors China "has also maintained or  erected entry requirements that are high or 
cumbersome, discouraging foreign suppliers from gaining market access."  The United States would 
add that China has altogether refused to grant market access to foreign suppliers of electronic 
payments and related services despite having made commitments to open up this sector to foreign suppliers.  Specifically, in its GATS Schedule, Chin a committed to allow unrestricted market access 
and national treatment for "payments and money transmission services, including credit, charge, and 
debit cards," with this commitment becoming effe ctive with regard to the RMB business of retail 
clients no later than 11 December 2006.  China al so committed to allow unr estricted market access 
and national treatment for "advisory, intermediation,  and other auxiliary financial services" for other 
financial services listed in its schedule, including payments.  China’s GATS Schedule further provides 
for open market access for the "provision and transfer  of financial informatio n, and financial data 
processing by supplier[s] of other financial services ." When will China take the steps necessary to 
implement these overdue commitments?  
Australia Question 22 
We note that China continues to apply restrictions to the provision of credit card and electronic 
payment services (Paragraph 7 on page 111 of WT/TPR/S/199).  
a) Could China please outline these restrictions? 
b) Could China please outline how these restri ctions comply with China’s specific 
GATS commitments to allow foreign financ ial institutions to provide payment and 
money transmission services, including credit, charge, and debit cards? 
c) Does China plan to allow foreign financia l institutions to issue single brand credit 
cards and provide domestic credit cards to Chinese consumers? 
Answer
 
(1) On issuance of bank card  
Foreign institutions shall comply with laws an d regulations related to service trades on which 
members had made commitments. China made commi tments on "Item d: All payment and money 
transmission services". Foreign banking institu tions can issue bank cards in China while 
complying with related laws and regulations. 
(2) On clearing services for bank card payments 
China made no commitment on "Item j: Settlement  and clearing services for financial assets". 
That means, clearing services for card payments are not included in the scope of its service 
schedule. Clearing services for fi nancial assets include "provisi on and transfer of financial WT/TPR/M/199/Add.1 
Page 244  
 
  information"; this does not mean suppliers of such  kind of services can provide clearing services 
for financial services. 
According to China’s laws and regulations, forei gn banking institutions can provide intra-bank 
clearing and settlement services for their customers’ payment transactions with regard to the 
payment services that have been approved. Wherea s, inter-bank clearing and settlement services 
resulted from such payment transactions conduc ted by foreign banking institutions shall be 
provided by PBC. Non-financial institutions auth orized by PBC can provid e clearing services for 
banking institutions in an approved scope.  
Costa Rica Question 31 
¿Cuál es la razón de que el mínimo de activos exigid o para el establecimiento de sucursales de bancos 
extranjeros sea superior al exigido para entidades constituidas local mente? (Párrafo 151)  
EC Question  34 
Minimum working capital requirements for direct br anches of foreign banks also remain extremely 
high, amounting to RMB 300 million per branch depending on the business scope.  These requirements are much higher than minimum cap ital requirements in most other countries and 
effectively limit market access for foreign banks.  Fu rthermore, banks that incorporate locally are only 
allowed to retain one branch, under very strict conditions.  
Could China please indicate (1) why minimum capital re quirements for branches are set at such high 
levels, and (2) what exactly is the "prude ntial" justification for the one-branch cap? 
EC Question 35 
According to the Secretariat Report, paragraph 150 i ndicates that "it was not clear to the Secretariat 
why the minimum asset requirements are higher for the establishment of branches than for locally 
incorporated entities, taking into account that br anches are not allowed to conduct retail business". 
Could China please clarify this issue? 
United States Question 68 
In paragraph 150 of Part IV, the report comment s: "It was not clear to the Secretariat why the 
minimum asset requirements are higher for the establis hment of branches than for locally incorporated 
entities, taking into account that branches are not  allowed to conduct retail business."  Please explain 
the rationale for these differential asset requirements. 
Mexico Question 
Paragraph 150 further states that a foreign bank wishi ng to establish a branch must have total assets of 
not less than US$20 billion at the end of the year pre ceding the application, and must have maintained 
a representative office in China for at least two year s in the area where it applies to establish its first 
branch.  Mexico wonders why the minimum asset requirements are higher for the establishment of 
branches than for locally incorpor ated entities, taking into account that branches are not allowed to 
conduct retail business. 
Chinese Taipei Question 
As indicated in the Report, foreign commercial banks that have total assets of not less than 
US$10 billion at the end of the year preceding the application can apply for the establishment of a  WT/TPR/M/199/Add.1 
 Page 245 
 
 
  wholly foreign-funded bank (subsidiary), but a fore ign bank wishing to establish a branch must have 
total assets of not less than US$20 billion at the end of the year preceding the application. The minimum asset requirements are higher for establishm ent of branches than for locally incorporated 
entities, taking into account that branches are not  allowed to conduct retail business. Could China 
please explain the necessity for imposing such high r estrictions on the establishment of branches of 
foreign banks, and inform us as to whether or not it plans to lift such restrictions? 
Australia Question 21 
We note that foreign commercial banks seeking to establish a Chinese foreign joint bank must have 
total assets of not less than US$10 billion while foreign banks wishing to establish branches must have total assets of not less than US$20 billion (Paragraph 150 on page 146 of WT/TPR/S/199).   
 a) Given that branches are already signifi cantly limited in their scope of business in 
comparison to subsidiaries, could Chin a please explain the prudential purposes 
behind these differential capital requirements? 
Answer
 
The CBRC does not grant differential treatment fo r foreign-invested legal entities and foreign 
bank’s branches with regard to business scope. Fo reign bank’s braches are also permitted to do 
retail business in China. The requirement on mi nimum operating capital of foreign bank branches 
is determined by taking into account the special  organizational structure and the risks associated 
with business scope of branches and China’s existing regulatory capacity. Since 2003, CBRC has 
lowered twice the operating capital requirements  for branches of the foreign banks. The new 
Regulation and its Implementation Rules furthe r streamlined the requirements to only two 
categories. For the branches conducting foreign cu rrency business, the operating capital shall be 
no less than RMB 200 million or equivalent conv ertible currencies; for the branches conducting 
both foreign and local currency businesses, th e operating capital shall be no less than 
RMB 300 million. CBRC believes that the new regulatio n can meet the diversified needs of foreign 
banks and meanwhile maintain the necessity fo r prudential supervision and regulation.  
With regard to the statement that "China’s mini mum working capital requirements are higher than 
in most other countries", China’s view is that every country designs and adjusts its own regulatory 
requirements according to the va rious conditions at different times. China is different from other 
Members in terms of the structure of its financ ial sector, risk allocation, market conditions and 
regulatory regime. Therefore, it is not appropriate to impose other Members’ standards on China. 
When a foreign bank transforms its branches into locally incorporated subsidiaries, it can retain a 
branch to conduct wholesale business. This policy is  intended to facilitate the operation of foreign 
branches who wish to transform into subsidiari es, by taking full consideration of their past 
operations. When a branch is transformed into  a subsidiary, the bank still has the option of 
retaining the original branch. It is not necessary  to establish new branches. This requirement is in 
line with the principle of prudential supervision and regulation. 
EC Question 138 China recently published for comments a draft regulati on on administrative methods on equity interest 
in insurance companies, which raises a number of important questions in terms of compatibility with 
China's WTO commitment.  
Has China taken all necessary step s to ensure that the new regulation will be WTO-compatible? WT/TPR/M/199/Add.1 
Page 246  
 
  United States Question 71 
According to paragraph 186 of Part IV of the re port, "there have been no significant changes to 
requirements concerning the establishment and opera tions of foreign insurance companies" since 
China’s Trade Policy Review in 2006.  The Unite d States is concerned about a draft regulation 
circulated by the China Insurance Regulatory Commission ("CIRC") on 31 March 2008, entitled 
Administrative Methods on Equity Interest in Insurance Companies .  The United States appreciates 
CIRC’s provision of advance notice and the opportunity to comment on this draft regulation.  However, the draft regulation raises serious concer ns, and the United States hopes that CIRC will not 
finalize the draft regulation until these concerns ca n be properly considered  and addressed.  Most 
notably, the draft regulation appears to impose signi ficant new limitations on foreign participation as 
well as new discriminatory requirements in the insu rance sector, including with regard to insurance 
holding companies and insurance asset management companies.  In particular, Article 13 of the draft regulation appears to prohibit foreign financial in stitutions (including insurance companies) that 
already have one investment in China (either in  a domestic insurance company or in a foreign-
invested insurance company, whethe r in the form of a joint venture or a subsidiary) from establishing 
additional investments in a domestic insu rance company in the "same" sector.   
a. What is China’s justification for the di scriminatory treatment of foreign financial 
institutions in the draft regulation?   
b. Please explain how the limitations in the draf t regulation are in line with China’s efforts 
to promote the development of China’s insurance and financial services sector and the goal of achieving consistent and sound regulation.   
c. The United States understands that the draf t regulation would also apply to insurance 
holding companies and insurance asset management companies.  Please explain 
China’s justification for applyi ng the limitations in the draft regulation to these entities.  
How does CIRC envision the draft regulation will operate in the market with regard to 
these entities?   
Japan Question 47 
China made "Administrative Methods on Equity Inte rest in Insurance Companies" available for the 
public comment until 20 April. 
 (1) Please explain why a financial institution is considered as a foreign-funded insurance 
company with only 25% low foreign equity. 
Paragraph 5 of Article 13 of the Methods says that  "a foreign financial institution that has been 
permitted to invest in China’s insurance market sh all not invest and hold equity in an insurance 
company of the same kind."  
 (2) Please explain how this new restriction can be justified in light of the national 
treatment obligation and horizontal commitments (The conditions… will not be made more restrictive than they exist as of the date of China's accession to the WTO.) under 
the Chinese schedule. 
Answer
 
The draft Administrative Methods on Equity Intere st in Insurance Companies (for review only) was 
published to solicit public comments on March 11th, 2008. It is still in the legislative process. China 
welcomes Members to raise comments and sugg estions to the competent Chinese authority.  WT/TPR/M/199/Add.1 
 Page 247 
 
 
  Japan Question 38 
With respect to the establishment of China Postal Savings Banks (CPSB) please explain how national 
treatment obligation is ensured between CPSB  and foreign-funded fi nancial institutions.  
Answer  
China has fully implemented its National Treatm ent commitment in the banking sector. Foreign-
invested banks have been allowed to conduct loca l currency business. The establishment of China 
Postal Savings Banks （CPSB）will not lead to any change in the policy.  
United States Question72 
Paragraph 187 of Part IV of the report discusses in surance licensing, but some of the procedures and 
substantive requirements remain unclear.   
a. Please describe more fully the procedures that CIRC follows regarding applications 
from foreign life and non-life insurers to expand internally (through branches) in 
China, including both at the central level and the provincial level. Does China apply 
the same timeframes for applications by  foreign companies as it does for Chinese 
domestic companies?  What are these timeframes, and where are they set out? 
b. What are the main substantive requirements that have to be met in order to receive 
approval for an additional internal expansi on (through a branch), and where are they 
set out?  Does China apply the same substa ntive requirements for review and approval 
of applications by foreign insurers seeking to expand internally as it does for domestic 
companies?   
c. Are the timeframes and substantive requi rements the same for foreign and domestic 
companies when they submit an applicati on for approval of multiple branches?  Are 
either foreign companies or domestic co mpanies or both discouraged from submitting 
an application for approval of multiple bran ches?  How many applications for approval 
of multiple branches has CIRC approved since 2006? 
EC Question 136 
The geographical expansion of foreign insurers  is still hampered significantly by slow and 
unpredictable regional-level licensing processes. Acco rding to the Secretariat's report, China also 
gives priority to branch license applications in cer tain areas and sectors, in effect applying economic 
needs tests (ENTs).  
When will China take steps to ensure equal treat ment between domestic and foreign insurers with 
regard to branch/sub-branch licensing and geograp hic expansion? Could China please clarify why it 
has not scheduled the Economic Needs Tests? 
Answer  
 a) With regard to regulation on foreign -invested insurers expanding internally 
(through branches) in China, please ref er to Detailed Rules for the Implementation 
of the Administrative Regulation of the People’s Republic of China on Foreign-funded Insurance Companies. CIRC acco rds equal treatment to domestic and 
foreign-invested companies. WT/TPR/M/199/Add.1 
Page 248  
 
   b) Article 29 of Detailed Rules for the Implementation of the Administrative 
Regulation of the People’s Republic of China on Foreign-funded Insurance Companies stipulates that in order to establish a branch, a foreign insurance 
company shall meet the following requirements:  
 
  (i) Its solvency margin shall comply with relevant regulations specified by 
CIRC. 
  (ii) With a sound internal cont rol system and no record of punishment
；where 
the operating period has exceeded 2 years ，there is no record of 
punishment in the most recent 2 years ； 
  (iii) It has senior managerial perso nnel who are qualified according to the 
standards stipulated by CIRC. 
 
These requirements are exactly the same with  the requirements for Chinese companies as 
stipulated in Article 15 of Administrati ve Provisions on Insurance Companies. 
  c) CIRC sets the same requirements and procedures on establishing new branches for 
domestic and foreign-invested insurance companies.  
 
United States Question 73 
In paragraph 193 of Part IV, the report discusses the Provisional Regulations on the Administration of 
Insurance Asset Management Companies .  What is China’s rationale for requiring the establishment 
of separate "insurance asset mana gement companies"?  Why doesn’t China allow life and non-life 
companies to manage their assets directly?  What is  the prudential basis for requiring companies to 
have a certain level of total assets or certain number of years of experience in China?  Has China 
considered taking into account global asset base  and experience to meet such requirements?  
Answer
 
Firstly, the establishment of insurance assets management companies will enable insurance 
companies to concentrate on specialized assets management, realize scale-economy and improve 
efficiency.  
Secondly, the above-mentioned regulations do not prohibit insurance companies from managing 
their assets directly. Both life and non-life insurers can manage their assets directly. 
Thirdly, the requirements, including the requirement s on capital and experiences, are designed to 
ensure the safety and the stable operation of the trusted assets, and apply to both foreign-invested 
and domestic insurance companies. 
Fourthly, the above mentioned regulations apply to the insurance companies established in China, 
the foreign shareholders residing outside China are beyond China’s jurisdiction and not subject to 
these regulations. 
U.S Question 74 
In paragraph 196 of Part IV, the report refers to a "lock-up period" for non-tradable shares that have 
been converted to tradable shares, i.e., a period of time in which the converted shares cannot be sold.  
This lock-up period is also discussed in paragraph 27 of Part I of the report.  Recently, it was reported 
that China is considering extending the lock-up peri od.  Is that correct?  If so, please explain China’s 
rationale for doing so.  WT/TPR/M/199/Add.1 
 Page 249 
 
 
  Answer  
China does not have the plan to extend the "lock-up period". EC Question 132 
According to the Secretariat report, no single forei gn financial institution may own more than 20% of 
the equity of a Chinese financial institution.  
Considering that China has not scheduled limitations on foreign ownership, when is China planning to 
fully implement its WTO commitments and pe rmit full foreign ownership of Chinese banks? 
Mexico Question 
Paragraph 153 notes that foreign equi ty participation in domestic fina ncial institutions is subject to 
restrictions.  Under the administrative measures on equity investments of overseas financial 
institutions in Chinese financial institutions, no singl e foreign financial institution may own more than 
20 per cent of the equity of a Chinese financial ins titution.  Mexico would be interested to know 
whether any plans have been made to increase equity  participation of overseas financial institutions in 
Chinese financial institutio ns in the short term. 
Japan Question 36 
Please explain why China limits foreign equity participation to a maximum of 20 percent for a single 
foreign investor at existing Chinese domestic banks. This limitation appears to be in conflict with 
China’s schedule of commitments  where no limitation on the foreign equity participation is 
scheduled. 
Australia Question 20 
We note that foreign equity participation in Chinese financial institutions is limited and that no single 
foreign institution may own more than 20 per cent of the equity in a Chinese financial institution 
(Paragraph 153 on page 146 of WT/TPR/S/199).  Given China’s GATS commitments related to 
banking, and in particular the commitment that  China would eliminate any existing non-prudential 
measures restricting ownership, opera tion and juridical form of foreign financial institutions in respect 
of licensing, could China please outline: 
a) Whether China maintains foreign equity limits on financial institutions as a matter of 
prudential policy? 
b) If so, how limiting foreign ownership in Chinese financial institutions is intended to 
meet prudential policy goals? 
c) Whether China has any plan s to eliminate or relax foreign equity restrictions on 
financial institutions in the foreseeable future? 
d) In addition to the 20 per cent ownership cap noted in the Secretariat Report, does 
China apply any other type/s of measu re, such as numerical limits on foreign 
participation, that restrict the ownershi p, operation and juridical form of foreign 
financial institutions in the Chinese banking sector? WT/TPR/M/199/Add.1 
Page 250  
 
  Answer
 
China has fully implemented its WTO commitments  in the banking sector. The Measures for the 
Administration of the Investment and Shareholding  in Chinese-funded Financial Institutions by 
Foreign Financial Institutions is an  autonomous liberalization measure. 
The Regulation of the People’s Republic of China on the Administration of Foreign-Invested 
Banks and Detailed Rules for the Implementation of  the Regulation of the People’s Republic of 
China on the Administration of Foreign-Invest ed Banks allow qualified foreign financial 
institutions to establish wholly foreign-owned banks  or joint venture banks, without any equity cap 
for foreign investment. In the me antime, according to China’s la ws governing foreign investment 
and the horizontal commitment in China’s GATS schedule, "the proportion of foreign investment 
in an equity joint venture shall be no less than 25 % of the registered capital of the joint venture." 
In other words, the criterion of determining whether an enterprise is qualified as a joint venture is that foreign equity participation in it is no less than 25%.  
Regarding foreign equity participation in the Ch inese financial institutions, firstly, the Measures 
for the Administration of the Investment an d Shareholding in Chinese-funded Financial 
Institutions by Foreign Financial Institutions on ly regulates Chinese financial institutions. If the 
aggregate foreign equity participation in a Chin ese financial institution is less than 25%, the 
investment is not subject to the rules of the Admi nistration of Foreign-invested Bank. If the foreign 
investors wish to raise their aggregate share in a Chinese bank to above 25%, it will be regarded as 
an establishment of a new joint venture, and the transaction will be subject to the approval of China Banking Regulatory Commission accordin g to the Administration of Foreign-invested 
Banks, and the Detailed Rules for the implementation of the Regulation. 
Therefore, the Measures for the Administration of  the Investment and Shareholding in Chinese-
funded Financial Institutions by Foreign Financ ial Institutions is an autonomous liberalization 
measure, and is fully consistent with China’s WTO commitments. 
EC Question 133 
Regarding the implementation of the Regulation on  the Administration of Foreign-Funded Banks, 
could China please clarify 
 (a) whether it permits foreign-funded banks to use the same structure of "second-tier" 
branches and sub-branches that is used by  state-owned commercial banks, or if there 
are any differences e.g. in the geographical coverage? 
 (b) why is does not permit foreign-funded ba nks to take the 30% capital deposits from 
other banks on an equal basis with Chinese banks?  
Answer
 
 a) China-foreign joint venture banks and branches of foreign banks can establish 
sub-branches within the same city a ccording to the Administration of the 
Establishment of Same City Service Points by Commercial Banks. In establishing 
such sub-branches, foreign-invested banks are subject to the same requirements as 
the Chinese banks.  
 b) It seems that the EC misunderstood China’s policy. Article 44 of the Regulation on 
the Administration of Foreign-invested Ba nks stipulates that 30% of the operating 
capital of a branch of a foreign bank shall be deposited in no more than three  WT/TPR/M/199/Add.1 
 Page 251 
 
 
  Chinese commercial banks within the territory of China in the form of interest-
generating assets as designated by the banking regulators. Financial regulators 
face more difficulties and uncertainty of risk  supervision with regard to branches 
of foreign banks than locally incorporat ed subsidiaries. Therefore, for prudential 
purposes, China has adopted more string ent requirements for the branches of 
foreign banks. With regard to the locally  incorporated subsidiaries of foreign 
banks, China offers equal treatment as  accorded to domestic banks.  
Japan Question 40 
Please explain the implementation plan of a deposit insurance system.  
Answer  
 
As early as 1997, China started research and studi es on establishing the deposit insurance system. 
In recent years, the Chinese government expedited the process for the establishment of this system. 
At present, relevant government agencies have reached consensus on setting up the deposit 
insurance system as soon as possible, and are wo rking on a framework compatible with the actual 
situation of China. 
 In 2006, the 11th Five-year Program for the Natio nal Economic and Social Development explicitly 
proposed "to regulate the market withdrawal me chanism for financial institutions, set up the 
corresponding deposit insurance, investor protec tion and insurance security systems". China will 
seriously and steadily promote the establishment of the deposit insurance system.  
United States Question 70 Paragraphs 180 and 192 of Part IV of the report discuss China’s Insurance Law  and, in particular, 
reinsurance.  Could China explain how it implements Article 103 of the Insurance Law  with regard to 
the sourcing of reinsurance?  Please also explain what  "give priority of offering reinsurance contracts" 
means in Article 13.  How does it relate to the commitments that China made in its GATS Schedule 
not to impose reinsurance mandatory cessions and not restrict the cross-border supply of reinsurance?  
EC Question 137 
According to the Secretariat's Report, direct insura nce companies established in China must provide a 
right of first refusal for 50% of their reinsuran ce programmes with domestically admitted reinsurance 
companies. Could China please clarify why it has not scheduled these priority cessions? 
Japan Question 41 
Article 11 of the Administration of Reinsurance Business Regulations requires direct insurance 
companies to solicit, from at least two reinsurance companies in China, rein surance offers amounting 
to more than 50 percent of the reinsurance to be ced ed. This is, in practice, considered as compulsory.  
Answer
 
China’s policy is consistent with Article 17 of  GATS concerning National Treatment and in line 
with its commitments in its GATs schedule. 
Article 11 of the Provisions on the Administration of Reinsurance Business elaborates the 
implementation of Article 103 of the Insurance Law: "A direct insurer seeking reinsurance shall 
give priority to reinsurance companies estab lished in China when to provide offers." WT/TPR/M/199/Add.1 
Page 252  
 
  Firstly, "to provide offers" is different from signing the contract. It only requires that reinsurance 
companies in China shall have a ccess to adequate information. 
Secondly, "companies established in China" does no t only refer to Chinese companies. It also 
includes foreign-invested companies as well. 
Finally, the requirements on providing offers do not change the competition conditions in the 
supply of reinsurance service or have any negative effects on foreign reinsurance service providers 
or foreign services including at the marketing stage.  
Japan Question 42 
Article 22 of the Administration of Reinsurance Bu siness Regulations prohibits foreign insurers from 
engaging in the reinsurance business with their aff iliates. Please explain how this limitation can be 
justified when no limitation is scheduled re garding cross-border trade in reinsurance.  
Answer
 
Article 22 of the Provisions on the Administrati on of Reinsurance Business is designed as a 
precaution. Furthermore, the stipulation does no t prohibit all business between related parties and 
instead it only requires that the CIRC shall examine and approve such related transactions. 
Japan Question 43 The report says "the decision on this application mu st be made within six months of submission." 
Please explain China’s efforts to improve  transparency in licensing procedures.  
Answer
 
CIRC has always followed the National Treatment Principle and treated foreign and domestic 
insurers equally in granting licenses. 
Japan Question 44  (1) Please explain why foreign insurance ins titutions are not allowed to engage in 
statutory insurance business. A large part of the non-life insurance market is carved 
out by this restriction.  
 (2) Does China have any policy objectives with  respect to this restriction? Japan would 
like China to indicate if China has plans to abolish the restriction. 
Answer
 
It is specified in China’s services schedule that foreign insurance institutions are not permitted to 
engage in statutory insurance business. The specific  categories of statutory insurance are listed in 
the Working Party Report on China’s accession, whic h includes auto insurance.  Specifically on 
auto insurance, this insurance was introduced in late 2006 and the relevant regulation needs to be 
improved. China believes it more appropriate to open this sector to foreign companies when such 
improvement has been made based on the assess ment of the actual implementation of the 
regulation.  WT/TPR/M/199/Add.1 
 Page 253 
 
 
  Japan Question 45 
The minimum capital requirement for foreign insurers is high in the light of international standards. 
Please indicate whether China plans to relax mini mum capital requirements for foreign insurance 
companies.  
Answer  
There is no universal standard regarding the registered  capital of insurance companies. Since the 
actual conditions vary in different members, it is inappropriate to compare and judge China’s 
capital requirements by simply using the yardstic ks of other members. China applies the same 
registered capital requirements to both foreign and domestic insurers. The registered capital 
requirement is a measure for prudential purpose. As  an important principle of financial regulation, 
prudential supervision has been given great importa nce by financial regulators around the world. 
The existing level of registered capital matches w ith the actual development of China’s insurance 
industry. 
Japan Question 46 
While wholly foreign owned non-life insurance companies are allowed, please explain the rationale 
why foreign equity cap is set at 50% for life insurance companies.  
Answer  
This restriction is listed in China’s GATS schedule. Japan Question 48 
Foreign equity is limited to 33% for securities co mpanies. Does China have plans to relax this 
limitation?  
Answer
 
China does not have a plan to remove this limitation Canada Questions 71 and 72 
Paragraph 146 of the Secretariat Report notes that commercial banks in China are not permitted to 
underwrite insurance policies, but may act  as agents to sell insurance products.  Could China confirm 
whether either domestic or forei gn commercial banks may establish insu rance subsidiaries in order to 
underwrite insurance policies?  If yes, could China indicate whether the same regulations govern both 
domestic and foreign commercial banks seeki ng to establish an insurance subsidiary?  
Answer
 
China’s regulatory framework in the financial serv ice industry is featured by "separate operation 
and separate supervision". Law on Commercial Bank s stipulates that commercial banks shall not 
invest in enterprises and non-banking financial institutions, except otherwise stipulated by the 
State. According to our GATS Schedule in insu rance sector and Regulation on the Administration 
of Foreign-invested Insurance Companies, only  foreign insurance comp anies are allowed to 
establish insurance subsidiaries, not foreign banks. China is studying the possibility of allowing 
cross-investment between banks and insurance companies on a trial basis. Relevant regulations are 
still under consideration.  WT/TPR/M/199/Add.1 
Page 254  
 
  Canada Question 77 
Paragraph 213 of the Secretariat’s report identifies several limitations to the business powers of joint 
venture securities companies, including restrictions  on the ability of such companies to engage in 
brokerage business other than in B-shares and H-shares.  
Could China confirm whether joint venture secur ities companies are also currently permitted to 
engage in the trading of A-shares? 
Answer
 
According to China’s WTO commitments on secur ities services, joint ven ture securities companies 
are allowed to engage in underwriting A shares and in underwriting and trading of B and H shares 
as well as government and corporate debts, launching of funds. 
Mexico Question According to paragraph 1 50, only foreign commercial banks that have maintained a representative 
office in China for at least two y ears prior to the application, and have total assets of not less than 
US$10 billion at the end of the year preceding the a pplication, may apply for the establishment of a 
wholly foreign-funded bank (subsidiary).  What are the requirements for establishing a representative 
office?  
Answer
 
Please refer to Article 20, 21 and 22 of the Regulation on the Administration of Foreign-invested 
Banks. 
Mexico Question 
According to paragraph 151, the minimum register ed and paid-in capital for the establishment of a 
wholly foreign-funded bank or a Chinese-foreign jo int-venture bank is Y 1 billion.  Branches opened 
by wholly foreign-funded banks or Chinese-foreign joint-venture banks in China must be allocated 
Y 100 million as operating capital.  In Mexico's vi ew, the minimum capital requirements are much 
higher than in other countries, and limit market  access for foreign banks.  Could China indicate 
whether it plans to reduce these minimum capital requirements?  
Answer  
At present, China does not have any plan to chan ge the minimum capital requirements that are 
based on prudential consideration and applied eq ually to foreign and domestic companies. 
Mexico Question 
Paragraph 152 states that wholly foreign-funded an d Chinese-foreign joint-ve nture banks may engage 
in the same business operations as domestic commercia l banks, in both local a nd foreign currency.  
Nonetheless, branches of foreign banks cannot supply  bank cards and may only receive time deposits 
of not less than Y 1 million.  Operational foreign -funded banks wishing to en gage in local-currency 
business must have had their business in China for at least three years, and have been profitable for 
two consecutive years, prior to the application.  Me xico would like to know whether there are plans to 
ease these restrictions on foreign-funded banks.   WT/TPR/M/199/Add.1 
 Page 255 
 
 
  Chinese Taipei Question 
As indicated in the Report, wholly foreign-f unded and Chinese-foreign joint-venture banks may 
engage in the same business operations as domestic  commercial banks, both in local and foreign 
currency. Nonetheless, branches of foreign banks cannot supply bank cards; they may only receive 
time deposits of not less than Y 1 million each fro m Chinese citizens within China. According to 
Article 31 of the Regulation on the Administration of Foreign-funded Banks, promulgated by China 
on 11 November, 2006, a branch of a foreign bank in China may not provide RMB business to Chinese citizens within China, with  the exception of taking time deposits of not less than Y 1 million 
each from Chinese citizens within China. Howe ver, according to China’s Services Schedule 
accompanying its Protocol of Accession, foreign fi nancial institutions will be permitted to provide 
services to all Chinese clients within five years after China’s accession to the WTO. Would China 
remove the above-mentioned restrictions on forei gn banks in accordance with the commitment in its 
Services Schedule accompanying the Protocol of Accession? 
Japan Question 35 
China requires foreign banks to be locally incorporat ed if they are to engage in the local currency 
retail business. Please explain the rationale of the requirement and inform us as to whether or not 
China is considering introducing flexibility to the requirements for newly established branches to 
engage in the local currency business. 
Answer
 
Relevant requirements on foreign bank branches are prudent measures taken by China. Firstly, it’s 
more difficult to supervise over the transnational financial risks of  commercial presence that is not 
locally incorporated. Secondly, when the parent company of foreign bank branches goes bankrupt, 
the sequence of liquidation is not favourable to inv estors in the host country. Thirdly, international 
coordination of bankruptcy liquidation has been pr oven to be a tough process. Bearing in mind 
these three factors, financial reg ulators across the world have intensified prudential supervision 
over branches of foreign banks. 
For prudential considerations, China also req uires foreign-invested banks to meet certain 
requirements before conducting local currency busi ness. These requirements have been listed in 
China’s GATS Schedule and China does not have a plan to change. 
Mexico Question 
According to paragraph 164, the State Council prom ulgated the Regulations on the Administration of 
Foreign-funded Banks in November 2006, followed by the Rules of the China Banking Regulatory 
Commission (CBRC) for Implementing the Regulati ons on the Administration of Foreign-funded 
Banks.  Is there a website where these regulator y instruments can be consulted in English?  
Answer  
Please refer to www.cbrc.gov.cn for relevant information. (iv) Telecommunications 163 
 
United States Question 75 
 
Paragraph 219 of Part IV of the report menti ons 6 nationwide basic telecommunications service 
providers existing in China today.  In addition, th e State remains the majority owner of all the basic WT/TPR/M/199/Add.1 
Page 256  
 
  telecommunication service providers.  Can an enterpri se that is not owned by the State hold a basic 
telecommunications service license in China?  If not, can China explain how such a policy is 
consistent with its General Agreement on Trade in Services (GATS) commitments for basic telecommunications services, where no such limitation is scheduled?  
Answer
 
In China, so long as investors abide by the Regulation on Telecommunications of the People's 
Republic of China, Regulation on the Admini stration of Foreign Invested Telecommunications 
Enterprises and related rules, non-State-owned companies including foreign-funded enterprises 
and Chinese private enterprises are allowed to invest in basic telecom services. 
EC Questions 152, 153 
Could China provide with information on the steps to  take in order to provide satellite services in 
China? In addition, could China elaborate on st ate of competition in the satellite services market?  
United States Question 76 
Table IV-9 is based on information provided by the Chinese authorities and lists only one satellite 
service provider, China Satellite.  The United States  understands that two satellite service providers 
based in Hong Kong, China, are al so authorized to directly serve customers in China.  Can China 
explain its policy rationale for allowing two sate llite service providers from a customs territory 
separate from China to offer services in China, and how  such a policy is consistent with China’s most-
favoured-nation obligation? 
Answer  
In terms of providing different satellite-related services, besides China Satellite, China also has 
some 40 companies providing VSAT services. With respect to the satellite se rvice providers in Hong 
Kong, China referred to by the US, China would lik e to clarify that the companies in Hong Kong, 
China serving as satellite transponder service provid ers had been approved before China acceded to 
the WTO. 
United States Question 77 
Paragraph 221 of Part IV of the report states that a draft of a new Telecommunications Law  is 
currently being revised.   
 a . What is China’s timetable for completing the revision of the Telecommunications 
Law?  Does China intend to circulate a draft of the Telecommunications Law  for 
public comment before it is finalized, as required by Section 2(C)(2) of Part I of China’s Protocol of Accession?   
b. Does the current draft of the Telecommunications Law  either make the Ministry of 
Industry and Informationization (MII) struct urally and financially separate from all 
the telecommunications operators and providers  or move the regulation of this sector 
outside of MII? 
 c. Does the current draft of the Telecommunications Law  provide that foreign service 
suppliers required to form joint ventures with Chinese entities to operate in China are 
free to chose their joint venture partner, and that they may choose a partner from a sector outside the sector of operation of the joint venture, consistent with the  WT/TPR/M/199/Add.1 
 Page 257 
 
 
  commitment that China made in paragraph 314 of the Working Party Report 
accompanying its Protocol of Accession? 
 d.  Does the current draft of the Telecommunications Law  lower the capital requirements 
for telecommunications FIEs engaged in  national or cross-provincial basic 
telecommunications services?  Please explain 
Japan Question 49 
The "Telecommunications Law" which is a basic law on operating telecommunications business has 
not been enacted yet.  
 (1) In order to facilitate the entry of te lecommunication operators to the Chinese market, 
to ensure that they can ex pand their business and to simplify the required procedures 
to develop their businesses in the mark et, Japan urges China to enact a 
"Telecommunications Law" which is consis tent with WTO rules and commitments as 
soon as possible.  
(2) Furthermore, Japan would appreciate more  information on the general outline of the 
law, details of the present situation, fu ture procedures and schedule set out for 
establishment of the "Telecommunication Law". 
Korea Question 5 
The Secretariat Report (paragraph 221) notes that Ch ina does not have a telecommunications law. For 
foreign investors this adds uncer tainty to their investment decisions. Please provide up-to-date 
information regarding the enactment of a telecommunications law.  
Hong Kong, China Question 3 
We note from the Secretariat's report that China is drafting a telecommunications law.  We would like 
to know the latest development on the law drafting and the expected timeframe for implementation of 
the telecommunications law for replacement of th e existing regulations in the telecommunications 
sector.  
Mexico Question 
Paragraph 221 notes that China does not yet have a telecommunications law, although the 
Government has indicated that the relevant bodies ar e working on drafting one.  Has any date been set 
for publication of this law? 
Answer  
About the Telecom Law, the Ministry of Indu stry and Information (the former Ministry of 
Information Industry) submitted to the State Council the draft version. It is still in the legislative process. China has widely solicited opinions from the society and met its WTO commitments. 
As early as 1998 when it was established, the Ministry of Information Industry separated itself 
structurally and financially from all the teleco mmunications operators and providers. The Ministry 
of Industry and Information newly created in March 2008 will continue to serve as the independent regulator of China’s telecom services. Therefore,  since 1998, China has fully complied with the 
requirements of "independent regulator" as provided in the Reference Paper. WT/TPR/M/199/Add.1 
Page 258  
 
  As stated above, the Telecom Law is still in the legislative process. Like other laws, the Telecom 
Law will be consistent with China’s WTO commitments. 
The non-discriminated capital requirements are not subject to the commitments on 
telecommunication. If members have opinions and suggestions on the draft Telecom Law, they are 
welcome to raise those comments to  the competent Chinese authorities. 
United States Question 78 Paragraph 223 of Part IV of the report indicates that no new entrants have entered the mobile 
telecommunications services market and that licenses for 3G services have not been issued.  However, 
as of 1 April 2008, China Mobile is offering 3G services in new spectrum bands.  Does China Mobile 
have a license to offer this service?  If so, w as the license tender made public?  What were the 
licensing criteria?  Because none of this informati on appears to have been made public, and several 
operators are interested in offering 3G services, how  is China Mobile’s commercial offering of these 
services consistent with China’s GATS Reference Paper commitments to allocate spectrum in a 
"objective, timely, transparent, and non-discriminatory manner"?  
Answer
 
The Chinese government has not yet issued a 3G  service license to any enterprise. A distinction 
must be made between corporate R&D initiatives on 3G and government decision to license 3G providers as these are clearly two different issues. It is reported that China Mobile is carrying out feasibility test of commercial applications of 3G  in some cities, which is purely a R&D business 
decision made by that company independently.  
Korea Question 7 
The Secretariat Report (paragraph 226) notes that Ch ina maintains minimum capital requirements for 
applicants to both basic and value added teleco m services license. These requirements can act as a 
market access barrier for foreign investors who want  to enter the Chinese market. Please elaborate the 
Chinese Government's plans to relax these requirements.  
United States Question 79 
Paragraph 226 of Part IV of the report describes China’s capital requirements for telecommunications 
FIEs engaged in national or cross provincial basic telecommunications services.  It notes that registered capital must not be less than RMB 2 billion (US$270 million).  In the United States’ view, this capital requirement is excessively high, both when viewed in relation to the norms in other 
economies and in the specific context of China’s telecommunications market.  To date, MII has 
provided no compelling rationale for such a requireme nt, and the fact that there has been little or no 
new entry in the basic telecommunications ser vices sector suggests that this requirement is 
functioning as a market entry deterrent, for both Ch inese and foreign operators.  Does China consider 
the capital requirements imposed by MII for teleco mmunications FIEs engaged in national or cross-
provincial basic telecommunications services to be comparable to those found in other WTO Members?  Please explain.  
Japan Question 53 
The "Regulation on Telecommunications" stipulates the amount of Y 2 billion is the minimum 
capitalization requirements for basic telecom servic es operator to provide services across the country 
or across different provinces, autonomous regions , and municipalities directly under the Central 
Government. Japan understands that China intr oduced the minimum capitalization requirements to  WT/TPR/M/199/Add.1 
 Page 259 
 
 
  protect consumers and investors in a case wher e a huge amount of investment is required for 
installation of telecom facilities. Meanwhile, in  the TRM (Transitional Review Mechanism under 
Section 18 of the Protocol on the Accession) of the People’s Republic of China, Japan received an 
answer that it is possible to provide basic teleco m services on a re-sale basis without installation of 
facilities. However, since the amount of investment  differs between the case where an enormous 
amount of investment is needed to install the fac ilities and where not so much money is required on a 
re-sale basis, Japan has difficulty in understandi ng whether or not the requirement for the same 
amount of the minimum capitalization is indispensable.  
Japan would appreciate an explanation and the reason to this. 
Answer  
China applies the same capital requirements eq ually to domestic and foreign telecom service 
suppliers, which is consistent with national treatment principle. 
There is not a unified or identical internatio nal standard on the level of telecom capital 
requirements. Various countries determine such level  according to their respective circumstances. 
China is a vast country with enormous popu lation, which requires heavy and front-loaded 
investment in telecom infrastructure. The telecom sector is a capital-intensive industry featuring 
economy of scale. If the registered capital of tel ecom companies was low, it  would be inadequate 
for companies to run business and insufficient to  protect the interest of investors and may even 
abruptly withdraw from the sector due to variou s reasons, leaving their consumers unattended and 
their interest ruined. At present, China is setting up credit system and improving consumer 
protection legislation. Keeping the registered c apital of telecom services at a certain level is 
important to protect the legitimate rights and interests of consumers.  
United States Question 80  
Paragraph 226 of Part IV of the report mentions  that there are a significant number of suppliers 
providing (or applying to provide) value-added services that have "domestic private" or foreign 
ownership.  Can China confirm that the treatment of value-added services via Very Small Aperture 
Terminals (VSATs) is the same for suppliers regard less of whether they are "domestic private" or 
foreign?  If not, can China explain why foreign value-added services suppliers that use VSATs are 
treated differently from "domestic private"  value-added services suppliers using VSATs?  
Answer  
The US has confused two kinds of telecom services.  According to China’s Classification List for 
Telecommunication Services, the Very Small Aperture Terminals (VSATs) is one type of the basic 
telecom services instead of a value added teleco m service. Therefore, there does not exist the 
problem of "value-added services via Very Small Ap erture Terminals (VSATs)"  as alleged by the 
US. 
United States Question 81 
Paragraph 227 of Part IV of the report describes how an FIE obtains a telecommunications service 
license.  If an FIE receives a license for value-adde d services, can the FIE choose the technology or 
means of delivery of its services to its subscribers?   For example, can the FIE deliver its services by 
fibre optic cable, or via a wireless or satellite  network, or through a combination of such 
technologies?  If not, please explain why not.  WT/TPR/M/199/Add.1 
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  Answer
 
Under the precondition of rationally  using resources such as freque ncies, telecom enterprises that 
have received licenses can freely choose technologies co nsistent with China’s national standards in 
order to provide services.  
EC Question 139 
According to the Report there are at present 22, 000 providers of value added services (VAS) 
operating in China. We are informed that only 6 out of the 22,000 service providers are actually foreign companies (The Report suggests that this numbe r is 11 (p.166, para. 226)). China is invited to 
provide its views on the existence of this gap be tween the local and foreign licence holders for VAS 
given that there is a lot of interest on the side of the foreigners to provide VAS in China. 
Answer
 
China’s telecom regulator pro cesses applications for establis hing foreign-invested telecom 
enterprises according to relevant  regulations such as the Regulation on Telecommunications of the 
People's Republic of China, Regulation on  the Administration of Foreign Invested 
Telecommunications Enterprises. The licensing pro cedure is open and transparent.  Up to now, 
altogether 13 foreign-invested telecom enterprise s have filed applications on telecom business 
operation license. All of them have been approved.  
EC Questions 140, 141 
The Reports states that there are two basic service providers in the fixed market and another two in 
the mobile market. This means that at present ther e is a de facto duopoly situation in each of these two 
markets.  Could China express its level of satisfaction on the present development of competition in 
the basic services markets and if not satisfied whethe r is consider of undertaking a thorough market 
analysis to identify the reasons for th e lack of competition in these markets?  Could China explain the 
reasons for not granting so far new licenses to provide basic telecom services?  
Answer  
Table IV.9 on page 164 of the Secretariat Re port clearly describes the basic telecom service 
providers in China. As shown in the table, China has altogether 6 basic telecom operators. 
Therefore, this market is not "dual monopoly" as suggested by the EC. For instance, in the fixed-
line services, four companies namely China Te lecom, China Netcom, China Unicom, China 
TieTong are competing with one another. 
China has opened up its telecom market to foreign participation according to its WTO 
commitments. As to whether China will consider gr anting new license to domestic enterprises, it is 
an issue that has nothing to do with China’s WTO commitments. China will make the decision in 
line with the development of domestic telecom market. 
Australia Question 23 The Secretariat Report highlights the re gulatory structure and policies of the 
telecommunications sector (Paragraphs 220-223 on pages 164-165 of WT/TPR/S/199).  The Reference Paper on Basic Telecommunications provid es that "the regulatory body is separate from, 
and not accountable to, any supplier of basic telecommunications services."  
 a) Does the creation of the new Ministry of Industry and Information change the 
relationship between the state's shareholdi ng in China's telecommunications carriers 
and its telecommunications regulatory functions?   WT/TPR/M/199/Add.1 
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   b) What measures are now in place to ensu re that the telecommunications regulatory 
authorities are separate from, and not accountable to, telecommunications suppliers? 
EC Question 142 
The Regulations on Telecommunicati ons of 2000 provide for the separation of the Government from 
business in the telecoms sector.  
Would China consider that the transfer of high level employees (e.g. managers) of the state owned 
basic telecoms service providers to the regulatory body and vice versa contributes to such separation? 
Answer  
As early as 1998 when it was established, the Ministry of Information Industry was structurally and 
financially separated from all the telecommuni cations operators and providers. The Ministry of 
Industry and Information which are newly establis hed in March 2008 will continue to serve as the 
independent regulator of China’s telecom services.  Therefore, China has fully complied with the 
requirements of "independent regulator" as provided in the Reference Paper. 
EC Question 143 
The Report notes that the Regulations for the Admini stration of Foreign Invested Telecom Enterprises 
and the Administrative Measures for Telecommunica tions Business Operating Permits entered into 
force in 2002. Could China provide with clarifica tion on the nature of the company (telecoms versus 
non-telecoms) with which a foreign company can cr eate a joint venture to provide any type of 
telecoms service in China on the basis of the a bove mentioned Regulations and any other piece of 
legislation applying in this case? 
Answer  
To clarify this question, besides the above two legal instruments, the EC may refer itself to the 
Regulation on Telecommunications and its supporting documents.  
EC Questions 144, 145 
The Report states that since 2006, there have been no new entrants in the mobile services sector, 
including 3G services, for which licences have not b een issued. In fact, the reasoning for this lack of 
3G licence holders refers to the absence of setti ng the authorisation procedures for granting such 
licences.  Could China provide with information on when  such authorisation procedures will be 
launched? Is there any service provider that will provide 3G services during the Olympic Games?  
Answer  
The Chinese government has not determined th e time and way to issue 3G license. Main 
considerations include the maturity of 3G system (including technology and business), optimization 
of market competition and protection of intellectual property rights.  
EC Questions 146, 147 
The Report states that foreign investment in the sector is regulated by the Provisions on 
Administration of Foreign Invested Telecommunicat ions Enterprises. Under these provisions, foreign 
participation is subject to minimum capital requireme nts applicable also to domestic suppliers. Which 
is the purpose of maintaining these high level capita l requirements? Does China consider that these WT/TPR/M/199/Add.1 
Page 262  
 
  requirements have an impact on the absence of the development of competition in the basic telecoms 
services? 
Answer
 
China applies the same capital requirements eq ually to domestic and foreign telecom service 
suppliers, which is consistent with national treatment principle. 
There is not a unified or identical internatio nal standard on the level of telecom capital 
requirements. Countries determine such level accord ing to their respective circumstances. China is 
a vast country with enormous population, which requires heavy investment in telecom 
infrastructure. The telecom sector is a capital-in tensive industry operating on economy of scale. If 
the registered capital of telecom companies was lo w, it would be inadequate for companies to run 
business and insufficient to protect the interest of investors and if they abruptly withdraw from the 
sector due to various reasons, it would leav e consumers unattended and their interests 
compromised. At present, China is setting up credit system and improvin g consumer protection 
legislation. Keeping the registered capital of telecom services at a certain level is important to 
protect the legitimate rights and interests of consumers.  
Given that six suppliers of basic telecom servic es have been competing with one another on the 
Chinese market, China does not consider this as "a bsence of the development of competition in the 
basic telecoms services" as alleged by the EC. 
EC Questions 148-150 
The Report notes that for an FIE to obtain a te lecom services licence, the Chinese major investor 
(rather than the foreign investor) must submit an ap plication to the MII. Foreign investors do not need 
to submit the application.  Could China further elaborate on this suggestion and in particular cite the 
exact legislative provisions not requiring a licen ce by a foreign investor? Could one assume on the 
basis of the above statement that the steps that a foreign operator who wishes to provide telecoms 
services in China will need to take refer to (a) th e foreign operator will select a Chinese company (not 
necessarily a telecoms provider but any type of company), (b) the Chinese company applies for a 
licence and (c) when the licence to the Chinese operator is granted then the joint venture can be 
formed. Could alternatively, the foreign company choose any type of company established in China -
not necessarily a telecoms operator- and instead of the Chinese company, the foreign operator applies 
for a licence?  
Answer  
Considering that foreign investors are unfamiliar w ith local legislation an d review procedures, 
China asks the Chinese partner of the proposed join t ventures to submit to regulators applications 
for establishing foreign-invested telecom enterp rises. This arrangement greatly expedites the 
process and makes things much easier for fore ign applicants. Such licensing procedure is 
consistent with WTO rules and China’s WTO commitments.  
EC Question 151 
The Report notes that for applications for the prov ision of VAS, the time limits include a processing 
phase by local administration of 60 days and an approval period of 30 days of receipt.  Could China 
provide with data on how these time lim its have been implemented in practice?   WT/TPR/M/199/Add.1 
 Page 263 
 
 
  Answer  
China’s telecom regulatory authority has processed  applications for providing value added telecom 
services within the timeframe provided for in rel evant laws. Such timeframe has been equally 
applied to both domestic and foreign companies acco rding to the national treatment principle. So 
far, the telecom regulator has issued operation li censes to all foreign capital telecom enterprises 
within the statutory timeframe.  
Japan Question 50 
Report by the Secretariat indicates that "The MII also issued the Notice Strengthening the 
Administration of Foreign Investment in Value- added Telecommunications Services in July 2006, 
which clarifies that the provision of unlicensed value-added services in China by foreign services 
suppliers is not allowed (pp.164-165)". However, according to the WTO commitment of China, there 
are reservations only for joint venture requirements,  area limitation and foreign capital restrictions in 
Market Access and no reservation in National Treatment in value-added services. This "Notice" appears to be contrary to the WTO schedule of  commitment of China. Therefore, Japan would 
appreciate more information on this restriction and China’s view on consistency with China’s WTO 
commitments.  
Answer 
As emphasized by the Secretariat Report, this No tice aimed to regulate "unlicensed", illegal value-
added service suppliers. We hope and believe that Japanese companies would not be affected by this Notice. Since the issuance and enforcement of the Regulation on the Administration of Foreign Invested Telecommunications Ent erprises, most foreign investors have strictly abided by legal 
requirements, have gone through application form alities, and have lawfully supplied value added 
telecom services in China. However, some forei gn investors circumvented the Regulation under the 
pretexts of domain name authorization, registered trademark authorization and other disguised forms. 
Their illegal practice seriously infringed on the ri ghts and interests of foreign-invested and Chinese 
companies that were operating legally in China. In order to safeguard the credibility of the legal 
instruments and maintain a fair level playing field , China issued a Notice urging both domestic and 
foreign companies to apply for approval and operate lawfully, which is consistent with the WTO 
national treatment principle. 
Japan Question 51 
As for the third generation of mobile phone st andards, China has performed demonstration 
experiments on TD-SCDMA in recent years. Therefore, Japan presumes that TD-SCDMA services 
will be approved sooner than W-CDMA and CDMA 2000. Japan would appreciate more information 
concerning the time schedule for approval of these  three international standards; TD-SCDMA, W-
CDMA and CDMA2000.  
Answer
 
China has announced that TD-SCDMA, W-CDMA and CDMA2000 are all communication 
industry standards within its territory. This means th at all the three 3G standards determined by the 
International Telecommunicatio n Union have become China’s industry standards and enjoy the 
opportunity to develop in China. 3G technologies have become more mature as  compared to several 
years ago. As for which 3G standards will be eventua lly used by companies, it will be decided by 
telecom operators according to their own demand in  line with the principle of market competition. WT/TPR/M/199/Add.1 
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  Japan Question 52 
At the WTO/TRM (Transitional Review Mechan ism under Section 18 of the Protocol on the 
Accession), China agreed that the Chinese domestic law, "Regulati on on the Interconnections between 
Public Telecommunication Networks (Decree 9 of the Ministry of Information Industry)", does 
include Leased circuits, Frame relays and IP-VP. Ho wever, Leased circuits, Frame relays and IP-VPN 
are not clearly stipulated in the law.  
 (1) Therefore, Japan would like to clarify whether or not these Leased circuits, Frame 
relays and IP-VPN are included in "Other ne tworks that the Ministry of Information 
Industry defines" stipulated under paragra ph 8 of Article 2 of "Regulation on the 
Interconnections between Public Teleco mmunication Networks (Decree 9 of the 
Ministry of Information Industry)".  
(2) Moreover, it would be much appreciated if  China could furnish us with the legal 
document that "the Ministry of Informati on Industry defines" as is stipulated under 
paragraph 8 of Article 2 of this regulation. 
Answer
 
Article 2 of the Regulation on the Interconnec tions between Public Telecommunication Networks 
defines the regulatory scope of interconnection an d applies to all interconnections of telecom 
networks among basic telecom operators. Therefo re, interconnection issues related to leased 
circuits, frame relays and IP-VPN among bas ic telecom operators are guaranteed.  
Japan Question 54 
Japan has some concern about the fact that condi tions that are not stipulated in law, such as 
requirement for establishing multiple subsidiary comp anies, were required in obtaining a license of 
"Information services", which are defined as Se cond value-added telecommunication services in 
"Classification List for Telecommunication Services". It appears that this condition is lack of transparency. Japan would be obliged  if China could provide us with the legal or official documents, 
such as notice or transmittal, which stipulate the detailed conditions necessary to obtain a license for 
"Information services".  
Answer
 
Japan indicated that some applicants met conditions not stipulated in law. However, we would like 
to know problems applicants encountered are whet her related to establishing multiple subsidiary 
companies or related to obtaining a license of "Information services". Since the existing question 
from Japan does not provide sufficient information,  China hopes that Japan could provide more 
detailed information to enable Chinese regulat ors to study and respond accordingly.  
Japan Question 55 
Internet data center services are defined as First value-added telecommunicati on services and internet 
connection services are defined as Second value-ad ded telecommunication services in "Classification 
List for Telecommunication Services" which was am ended in February 2003. However, Japan is 
aware of the fact that it is impossible for fore ign enterprises to provide these services in China. 
Therefore, Japan would appreciate more informa tion on why foreign companies cannot provide these 
services, what differences are there between the services that foreign enterprises are approved to 
undertake and the services that they are not allo wed to undertake. Moreover, could China please  WT/TPR/M/199/Add.1 
 Page 265 
 
 
  explain which services foreign enterprises are able to undertake and which services they are not able 
to undertake?  
Answer  
Foreign investors are allowed to provide the teleco m services listed in China’s Schedule of Specific 
Commitments on Trade in Services. For those te lecom services that are not listed in China’s 
Schedule, foreign investors are not given the permission. Since both "internet data center services" 
and "internet connection services" are not listed in  China’s Schedule, foreign enterprises are not 
allowed to engage in these services.  
Canada Questions 81-83 Paragraph 219 states that the assets of the state-owned basic 
telecommunications providers are held by the St ate-owned Assets Supervision and Administration 
Commission (SASAC). Footnote 215 notes that the Regulations on Telecommunications (2000) 
stipulate the separation of the Government fro m the business of providing telecommunications 
services. Could China provide information on the SA SAC’s role in the operations of the basic 
telecommunications providers?  Could China describe the measures in  place to ensure the separation 
of the state-owned basic telecommunication providers from the telecommunications regulator, as 
committed to in the Telecommunications Reference Paper?  Does China have plans to privatize the 
basic telecommunications providers in the future?  
Answer  
Between 1998 and 2008, the telecom regulator in China was the former Ministry of Information 
Industry. Starting from March 2008, the newly established Ministry of Industry and Information has become China’s telecom regulator. 
As early as 1998 when it was established, the Ministry of Information Industry separated itself 
structurally and financially from all the teleco mmunications operators and providers. The Ministry 
of Industry and Informationwill continue to serve as  the independent regulator of China’s telecom 
services. Therefore, since 1998, China has fully comp lied with the requirements of "independent 
regulator" as provided in the Reference Paper. That is to say, the regulatory body in China has 
been separated from, and not accountable to, any supplier of basic telecom services since 1998. On 
1 July 1998, the General Office of State Council issued a Notice on the Functions, Organization 
and Staff of Ministry of Information Industry that  specifically required the separation of telecom 
providers from the telecom regulator. 
The State-owned Assets Supervision and Administration Commission (SASAC) only performs the 
duties of investor on behalf of the State. Like all other investors, SASAC exercises rights, enjoy 
benefits and undertake risks. It does not interf ere with the daily operations of basic telecom 
operators.  
China has opened up its teleco m market according to the WTO accession commitments. Whether 
new licenses will be issued to domestic companies in the future has nothing to do with China’s 
commitments in the WTO. China will make such decision in line with the actual development of its 
telecom market.   
Canada Question 84 
Paragraph 221 notes that China does not yet have a telecommunications law but is in the process of 
drafting one. Could China provide an update on the progress made in the drafting of the telecommunications law and provide any projected timelines on when it will be implemented?  WT/TPR/M/199/Add.1 
Page 266  
 
  Answer
 
About the Telecom Law, the Ministry of Indu stry and Information (the former Ministry of 
Information Industry) has submitted to the Stat e Council the draft version. It is still in the 
legislative process. Like other laws, the Tel ecom Law will be consistent with China’s WTO 
commitments. China has widely solicited opinions fr om the society. If members have comments and 
suggestions on the draft Telecom Law, they ar e welcome to provide those comments to the 
competent Chinese authorities. 
Canada Question 85 
Paragraph 225 comments that the Ministry of Inform ation Industry (MII) is considering how to define 
"dominant carrier" for the purposes of interconnec tion with a telecommunications service provider, 
but has not yet established one. However, footnote 221 states that "dominant" is defined under the 
Regulations on the Interconnection between Pub lic Telecommunication Networks. Could China 
clarify if a definition, or standard, has been establis hed for the determination of  a dominant carrier as 
applied to interconnection?  
Answer  
According to the Regulations on the Interc onnection between Public Telecommunication 
Networks, dominant carriers refer to those that po ssess necessary basic tele com facilities, operate 
fixed local telephone business representing over 50% of the market share in the local networks, and 
are able to have substantive impact on the market access of other telecom operators. 
Canada Question 87 
Paragraph 229 describes recent changes to tariffs and price caps, and refers to MII tariff procedures. 
Could China provide additional description of the exte nt to which the information used to establish 
price caps (such as number of users, volume of traffic, capacity of facilities, cost of facilities) is available to interested parties who pa rticipate in its public tariff processes?  
Answer
 
The Ministry of Industry and Information (the fo rmer Ministry of Information Industry) has been 
making public on its official website all inform ation related to telecom service charges such as 
government policy instruments, progress reports, and assessment results. The Ministry will also 
extensive solicit public comments and suggestions of all walks of life through expert meetings, 
public hearings. People can refer to the official website of the Ministry.  
Mexico Question 
Paragraph 221 also specifies that other basic rules governing the sector include the Regulations for the 
Administration of Foreign-invested Telecom Enterprises and the Administrative Measures for 
Telecommunications Business Operating Permits, whic h entered into force in 2002.  Is there a web 
site where these rules can be consulted in English?  
Paragraph 222 states that several new regulations re lating to the sector have been issued since 2005.  
These include the "Criterion on Telecommunication Services (2005)", which lays out technical and 
quality-of-service standards, and the criteria that ser vice providers must meet.  There is a reference to 
the website where the regulations can be consulted in Chinese.  Is it at all possible to view these 
regulations in English?  WT/TPR/M/199/Add.1 
 Page 267 
 
 
  Answer  
According to our knowledge, some professional websites provide English version of these 
documents on the Internet. Mexico could sea rch relevant information if it is interested. 
Mexico Question 
Paragraph 222 further states that the Ministry of Information Industry (MII) also issued the Notice 
Strengthening the Administration of Foreign In vestment in Value-added Telecommunications 
Services in July 2006, which clarifies that the pr ovision of unlicensed value-added services in China 
by foreign service providers is not allowed.  Mexico  would be interested to know the requirements for 
establishing a foreign-funded telecommunications enterprise in China and obtaining a licence to 
provide value-added services in the country.  
Answer  
Please refer to the Regulation on Telecommunica tions, Regulations for the Administration of 
Foreign Invested Telecom Enterprises and the Ad ministrative Measures for Telecommunications 
Business Operating Permits.  
Mexico Question 
According to paragraph 226, there are foreign equity restrictions (currently 49 per cent for fixed-line 
and mobile services) pursuant to China's commi tments under the General Agreement on Trade in 
Services (GATS).  In practice, other than for value-added services, where around 95 per cent of enterprises have "domestic private" or foreign owners hip, foreign investment in fixed-line or mobile 
services is below these limits.  Mexico would like to know what are the real foreign investment percentages and whether there are plans to increase foreign participation in these services?  
Answer
 
The actual proportion of foreign ownership in Ch ina’s telecom industry has not exceeded the 
equity cap in its WTO accession commitments. Ch ina does not have plan to increase the equity cap 
of foreign participation in the telecom services. 
Korea Question 6 
The Secretariat Report (paragraph 224-225) provides an overview of China's interconnection regime. 
Please provide the details of China's interconnec tion regime, such as the interconnection rates, 
Reference Interconnection Offer (RIO), and so  on. How many interconnection disputes among 
telecom operators were mediated by the Ministry of  Information Industry for the last four years? Are 
the information on such disputes and the results of the authorities' mediation publicly available?  
Answer  
Inter-connection between the public telecommunica tion networks should be realized according to 
the principles of technical feasibility, economic rationality, fairness and justice, and mutual 
support. 
Relevant information on inter-connection ca n be found in the regulations including 
Administration of the Interconnection of Pu blic Telecommunication Networks Provisions 
(Decree 9 of MII) and Measures on the Settleme nt of Disputes over Interconnection between 
Telecommunication Networks (D ecree 15 of MII), Measures for Settlement of Interconnection WT/TPR/M/199/Add.1 
Page 268  
 
  Charges and Sharing of Relay Expenses between  Public Telecommunication Networks, Measures 
for Settlement of Internet Exchange Cent ers, Rules on Regulation and Supervision of 
Communication Quality of Inter-Network Public  Telecommunications, Provisional Rules on 
Regulation and Supervision of Communication Qua lity of Inter-Network Communication between 
the Internet Backbone Networks. The abovementione d regulations are publicly available and can 
be found on MII’s website (www.mii.gov.cn) . 
MII has coordinated one dispute on interconn ection (not including interconnection dispute 
settlement coordinated by provincial telecom regulators) . 
All the related information can be made public unless laws and regulations stipulate otherwise.  
Korea Question 8 
The Secretariat Report (paragraph 226) notes that  11 foreign-invested enterprises were granted 
licenses for value added telecom opera tion. However, it is commonly believed that China rarely issues 
licenses for value-added telecom services to foreign service providers. Please provide the details of the 11 value added service providers that were granted the licenses. Please elaborate the Chinese Government's plans to make it easier for foreign service providers to acquire the licensee. 
Answer
 
As of 9th May 2008, 13 foreign invested telecom enterprises have obtained licenses for 
telecommunication business. The detailed information of the licenses is as follows (Chinese license is 
the only authentic text. English translati on of the licenses is for reference only):  
1. UNISK (Beijing) Information Technology Co. Ltd 
 License Number: B2-20040001 
 Type of Business: Information service (not including fixed network telephone information 
service)  
 Scope of Business: National (Internet inform ation service, not including news, publishing, 
education, healthcare, pharmaceuticals, medi cal apparatus and instruments, electronic 
bulletin services and etc. )  
 Legal Representative: Mr. Zhengmao LI 
 Date of issue: Jan. 30, 2004  Valid Until: Jan. 30, 2009 
 
2. Beijing Honglian 95 Informatio n Information Industry Co. Ltd 
 License Number:  B2-20040002 
 Type of Business: Internet data center, call center, internet access, information service.  
 Scope of Business: National (Internet inform ation service, not including news, publishing, 
education, healthcare, pharmaceuticals, medi cal apparatus and instruments, electronic 
bulletin services and etc. ) 
 Legal Representative: Ms. Xiaoying CHEN 
Date of issue: Mar. 30, 2004  
 Valid Until: Mar. 11, 2009  
3. Shanghai MSN Network Telecom Technology Co. Ltd 
 License Number: B2-20050001  Type of Business: Information service (not including fixed network telephone information 
service) 
 Scope of Business: National (Internet inform ation service, not including news, publishing,  WT/TPR/M/199/Add.1 
 Page 269 
 
 
  education, healthcare, pharmaceuticals, medi cal apparatus and instruments, electronic 
bulletin services and etc. ) 
 Legal Representative: Mr. Yeshun DONG 
 Date of issue: Mar. 30, 2005  
 Valid Until: Mar. 30, 2010  
4. ESPN Star Sports Beijing Wuzhou Zong heng Sports Course Development Co. Ltd 
 
 License Number: B2-20050002 
 Type of Business: Information service (not including fixed network telephone information 
service) 
 Scope of Business: Beijing (Internet inform ation service, not including news, publishing, 
education, healthcare, pharmaceuticals, medi cal apparatus and instruments, electronic 
bulletin services and etc.) 
 Legal Representative: Mr. Weida GAN 
 Date of issue: Jun. 9, 2005   Valid Until: Jun. 9, 2010 
 
5. East Port Technology Co. Ltd 
 License Number: B1.B2-20050003 
 Type of Business: Internet data center, call center, internet access, information service (not 
including fixed network telephone information service) 
 Scope of Business: National (Internet inform ation service, not including news, publishing, 
education, healthcare, pharmaceuticals, medi cal apparatus and instruments, electronic 
bulletin services and etc. ) 
 Legal Representative: Mr. Xiaoding WANG 
 Date of issue: Oct. 9, 2005   Valid Until: Jan. 30, 2009 
6. Zhongyou Hehuang Information Technology Co. Ltd 
 License Number: B2-20070001  Type of Business: Information service (onl y limited to internet information service)  
 Scope of Business: Beijing (Internet inform ation service, not including news, publishing, 
education, healthcare, pharmaceuticals, medi cal apparatus and instruments, electronic 
bulletin services and etc.) 
 Legal Representative: Mr. Fuchen WANG  
 Date of issue: Jan. 4, 2007  Valid Until: Jan. 4, 2012 
7. China Netcom Broadband Co. Ltd 
 License Number: B2-20070002  Type of Business: Internet access, informa tion service (only limited to internet information 
service)  
 Scope of Business: National (Internet inform ation service, not including news, publishing, 
education, healthcare, pharmaceuticals, medi cal apparatus and instruments, electronic 
bulletin services and etc. ) 
 Legal Representative: Mr. Fushen LI 
 Date of issue: Apr. 4, 2007  
 Valid Until: Apr. 4, 2012  
8. Beijing Faxun Network Technology Co. Ltd 
 License Number: B2-20070003  Type of Business: Information service (onl y limited to internet information service) 
 Scope of Business: National (Internet inform ation service, not including news, publishing, 
education, healthcare, pharmaceuticals, medi cal apparatus and instruments, electronic WT/TPR/M/199/Add.1 
Page 270  
 
  bulletin services and etc. ) 
 Legal Representative: Mr. Shan LV  Date of issue: May 24, 2007  
 Valid Until: May 24, 2012 
9. Beijing Guxiang information Technology Co. Ltd 
 License Number: B2-20070004 
 Type of Business: Information service (onl y limited to internet information service) 
 Scope of Business:  Beijing (Internet inform ation service, not including news, publishing, 
education, healthcare, pharmaceuticals, medi cal apparatus and instruments, electronic 
bulletin services and etc.) 
 Legal Representative: Mr. Haoyong YANG 
 Date of issue: Jun. 5, 2007  
 Valid Until: Jun. 5, 2012  
10. Pacific Telecom Co. Ltd 
 License Number: B2-20070005  Type of Business: Internet data center, fax storage and forwarding service, internet access  
 Scope of Business: Internet data centers: Beijing, Shanghai, Shenzhen, Chengdu, Xi’an; 
Fax storage and forwarding: Beijing, Shanghai, Nanjing, Hangzhou, Xiamen, Qingdao, Guangzhou, Shenzhen, Chengdu, Xi’an; Int ernet access: Beijing, Shanghai, Tianjin, 
Dalian, Hangzhou, Xiamen, Qingdao, Guangzhou, Shenzhen, Dongguan 
 Legal Representative: Mr. Dongbao ZHANG 
 Date of issue: Jul. 20, 2007  
 Valid Until: Jul. 20, 2012 
11. Shanghai Baosight Software Co. Ltd 
 License Number: B2-20070006 
 Type of Business: Information service (not including fixed network telephone information 
 service)  Scope of Business: Shanghai (Internet inform ation service, not including news, publishing, 
education, healthcare, pharmaceuticals, medi cal apparatus and instruments, electronic 
bulletin services and etc.) 
 Legal Representative: Mr. Wenhai WANG 
 Date of issue: Sept. 25, 2007  
 Valid Until: Sept. 25, 2012 
 
12. (BNTE) Beijing Telecom NTT Engineering Co. Ltd 
 License Number: B2-20080001 
 Type of Business: Information service (not including fixed network telephone information 
 service)  Scope of Business: National 
 Legal Representative: Mr. Guangsheng ZHANG 
 Date of issue: Jan. 21, 2008   Valid Until: Jan. 21, 2013 
13. Shanghai Wanshitong Internet Technology Co. Ltd 
 License Number: B2-20080002  Type of Business: Information service (onl y limited to internet information service) 
 Scope of Business: Shanghai (Internet inform ation service, not including news, publishing, 
education, healthcare, pharmaceuticals, medi cal apparatus and instruments, electronic 
bulletin services and etc. ) 
 Legal Representative: Ms. Jinglan LI 
 Date of issue: Apr. 17, 2008  
 Valid Until: Apr. 17, 2013  
  WT/TPR/M/199/Add.1 
 Page 271 
 
 
  China’s telecom regulator pro cesses applications for establis hing foreign-invested telecom 
enterprises according to WTO a ccession commitments and relevant regulations such as the 
Regulation on Telecommunications of the People's Republic of China, Regulation on the Administration of Foreign Invested Telecommunica tions Enterprises. The licensing procedure is 
open and transparent.  Up to now, altogether 13 foreign-invested telecom enterprises have filed 
applications on telecom business operation license. A ll of them have been approved. As for whether 
foreign enterprises are willing to hand in applications, it is up to the enterpri ses to decide based on 
their own commercial interests. 
(v) Transport services 168 
 
United States Question 82 
Paragraphs 240-242 of Part IV of the report discuss  the regulatory regime administered by the Civil 
Aviation Administration of China (CAAC).  Th e United States understands that CAAC imposes 
certain restrictions related to Air Sales Licenses that limit the ability of foreign suppliers to engage in 
freight forwarding.  In particular, CAAC does not seem willing to license foreign suppliers to load 
cargo directly on behalf of other companies on dom estic or international flights, requiring them 
instead to work through licensed dom estic companies.  Has this situation changed?  If not, what is 
China’s rationale for this limitation?  Given the contribution of foreign suppliers of logistics and 
express delivery services to China’s economy, does Chin a have any plans to eliminate this limitation?  
Answer
 
China allows the establishment of wholly foreign -owned subsidiaries. Th ere are no restrictions 
with respect to foreign freight forwarding enterprise directly l oading cargo onto domestic or 
international flight on behalf of other companies. 
United States Question 83 
In paragraphs 244-46 of Part IV, the report describes several types of enterprises in the air transport 
services sector in which foreign investment is perm itted.  The United States notes that China has made 
no commitment to open up its market to foreign s uppliers of computer reservation system services, 
and has continued to maintain a closed market in  this area, not allowing foreign investment while 
promoting a domestic enterprise, TravelSky.  In the United States’ view, fostering competition among 
suppliers of computer reservation system servic es, including through the participation of foreign 
suppliers, would support China’s objectives to enhanc e the competitiveness and efficiency of not only 
its air transport services sector, but also its tourism services sector, as hotels and other suppliers of 
tourism services also rely on computer reservatio n systems.  Please descr ibe China’s plans for 
opening up its market to foreign suppliers of computer reservation system services.  
Answer  
As U.S. has pointed out, China has not made liberalization commitments regarding mode 3 of the 
CRS services. China has only made commitments in mode 1 and 2, and has fully honored its 
commitments by allowing foreign CRS service suppliers to provide services to Chinese aviation 
enterprises and Chinese aviation agents, by connecting with Chinese CRS System. In the 
meantime, there are no restrictions on foreign av iation companies using their own CRS system to 
distribute tickets in China through their own rep resentative offices. Like other Members, on the 
issue of making further liberalization commitments in this sector, China needs to take into account 
the development needs of the industry and the Doha  services negotiations. At present, there are no 
plans for further liberalization in this sector. WT/TPR/M/199/Add.1 
Page 272  
 
  United States Question 84 
In paragraphs 248 through 251 of Part IV, the report provides various data on China’s market 
structure for maritime transport services.  
 a. The report notes that 90% of China's e xports and imports are transported by sea.  
What percentage of this 90% wa s carried by China flag vessels? 
 b. The report notes that, by the end of 20 06, the ocean fleet capacity was 45.5 million 
deadweight tonnage (DWT), of which 23.2 million belonged to  the 1,920 ocean-
going vessels flying the national flag. Of th ese 1,920 ocean-going vessels flying the 
national flag, how many of them were foreign built? 
 c. The report notes that over 1,700 domestic and foreign companies have been qualified 
as non-vessel-operating common carriers (N VOCC), of which 790 are FIEs and 
offshore companies.  Of the 790 FIEs and offshore companies, how many are wholly 
foreign-owned companies? 
 d. The report notes that seven "offshore navigation companies" have set up new wholly 
foreign-owned companies related to shi pping and container transportation services, 
and added 54 branches, while more than  300 "offshore port navigation companies" 
have set up representative offices in China.  Please explain the terms "offshore 
navigation companies" and "offshore port navigation companies" and how these two 
types of companies are differentiated in terms of their operations. 
Answer
 
China maintains no statistics on the share of foreign trade transported by Chinese flag vessels or 
the number of Chinese flag vessels built abroad. Of the 790 foreign invested and offshore 
NVOCCs, 393 are wholly foreign owned enterprises. 
United States Question 85 In paragraph 255 of Part IV, the report explains that, under the Maritime Code, shipping and towing 
between domestic ports cabotage must be undertaken by ships flying the national flag, unless 
otherwise stipulated by laws or administrativ e rules and regulations.  How many vessels operating 
under the Maritime Code, shipping and towing between domestic ports cabotage and flying the 
national flag were foreign built?  
Answer
 
China has no such statistical data. United States Question 86 
Paragraph 267 of Part IV of the report explains:  "Port charges are decided by the MOC and the 
NDRC, taking into consideration cost and the level of  competition in the market."It also explains that 
port charges are applied uniformly across the country .  Why does China not allo w these charges to be 
determined by individual port operators?   WT/TPR/M/199/Add.1 
 Page 273 
 
 
  Answer  
The reason for China not to allow the port charges to  be determined by the port operators is that 
ports are of limited resource, and port operators a re usually in an advantageous position compared 
with the cargo owners and shippers. Therefore, if the port charges are determined by port 
operators, it would be unfair to  the market competition.  
EC Question 154 
In relation to China’s commitments under the GATS for the provision of Computer Reservation 
Systems (CRS) services, and with reference to info rmation provided by China at the meeting of the 
Council for Trade in Services on 16 November 2007, the EC notes that the drafting of an Interim Regulation on Approval and Administration of the Direct Access and Usage of Foreign Computer 
(Passenger) Reservation System by Sales Agents of Civil Air Transport Enterprises has been completed by the China General Administration of Civil Aviation. CRS providers need certainty 
concerning the legal environment for operating in  China and a guarantee that non-discriminatory 
principles will be applied.  
Please could you provide detailed information as to the content and timing for entry into force of this 
regulation? 
Answer
 
The draft is still under review according to China’ s legislative process. So far, there’s no specific 
timetable for the entry into force of the regulation. 
Canada Question 79 
The Secretariat Report states that: "Ports are the conduit for around 90% of China's rapidly growing 
trade, their efficiency is essentia l. There were 1,430 ports in China in 2003, of which 132 could deal 
with international trade. In 2006, merchandise th roughput in Chinese ports was 970 million tonnes, up 
18% over 2005; container throug hput at key ports amounted to 47.4 million TEUs, up 30.9% over 
2002." How has China been able to ensure port efficiency at a time  of such tremendous growth? Is 
performance of the port and the overall trans portation system being tracked over time?  
Answer  
Since the 1990s, China has made continuous efforts in promoting reform of the port services, 
enhancing port infrastructure, importing advan ced port operation technologies and experiences, 
promoting the development of container trans portation, increasing the port efficiency and 
expanding port throughput. In the meanwhile, Chin a has also speeded up the construction of ports, 
and by now has developed a port system that is rationally distributed, and multi-functional with distinctive features and mutual advantages. 
Canada Question 80 Paragraph 269 and footnote  257 appear to contain conflicting statements since the former says: 
"According to the authorities, China does not have any cargo reservation or preference measures; all 
commercial cargo is accessed freely, unless covered by cargo-sharing arrangements. China has 
bilateral cargo-sharing arrangements with Algeri a, Bangladesh, Brazil, and Zaire." and the latter 
states: "... cargo-sharing arrangements with th ese countries have not been implemented." Please 
explain the discrepancy.  WT/TPR/M/199/Add.1 
Page 274  
 
  Answer
 
This reflects the current practice with regard to China’s cargo reservation arrangements. To 
accommodate China’s bilateral cargo-sharing arra ngements, China has made a reservation in its 
GATS Schedule. However, since China’s intern ational maritime market is already highly 
liberalized, China has not in reality implemente d its bilateral cargo-sharing arrangements. 
(vi) Distribution services 175 
 
United States Question 87 
In paragraph 283 of Part IV, the report discusses some of the regulations affecting suppliers of retail 
services. Foreign retailers maintain that they face extra burdens, when compared with domestic 
retailers, in expanding their operations.  For ex ample, the MOCOM-led licensing process for foreign 
retailers seeking to establish a new outlet is multi-la yered and slow-moving, requ iring approvals at the 
local, provincial and central government levels.  In  contrast, domestic retailers can quickly obtain 
licenses for new outlets directly from the State Ad ministration of Industry and Commerce.  How does 
China justify this practice in light of its national treatment obligations under the GATS?  What steps is 
China taking to streamline MOFCOM’s review of fo reign retailers’ applicati ons for new outlets? The 
report observes that the Chinese authorities may deny retailing licenses if urban commercial network 
plans have not been finalized.  However, this restri ction, at least in practice, applies only to foreign 
retailers and not domestic retailers.  How does Chin a justify this practice in light of its national 
treatment obligations under the GATS?  What plan s does China have to begin applying the same 
substantive licensing requirements to  domestic and foreign retailers? 
Answer  
There appears to be a misunderstanding with respect  to the urban commercial network planning. 
The planning applies equally to all investors, regardless whether they are domestic or foreign.  
With respect to license approval, the requirements fo r FIEs to establish retail outlets are the same 
as those for the domestic enterprises. China has fully honoured its national treatment 
commitments.  
United States Question 88 
Paragraph 288 of Part IV of the report describes the 30% cap on compensation for direct sales 
representatives and the prohibition on compensation b ased on team sales, i.e., "multi-level selling". 
Although the Report describes these restrictions as consumer-protection provisions, the compensation practices being restricted are common around the world in this industry.  Will China consider revising 
these restrictions in line with internationa lly accepted practices for regulating direct selling?  
Answer
 
China has fully implemented its accession comm itments regarding sales away from a fixed 
location. The government has promulgated the Ad ministration of Direct Selling Regulations in 
2005 and opened its market to foreign investment . The Regulation and its implementation rules 
offer national treatment fo r the foreign investors. 
In the 1990s, illegal pyramid schemes in China ca used damages to China’s social and economic 
order. To curb the pyramid schemes, the government has undertaken necessary measures to 
regulate the direct selling market.  WT/TPR/M/199/Add.1 
 Page 275 
 
 
  "Multi-level selling" is susceptible to traders as  a cover for pyramid schem es. To prevent those 
driven by thirst for huge profits, China has set a limit in the Regulation on the renumeration for 
people engaged in direct selling. The purpose of th is measure is to maintain social and economic 
order and to safeguard the interests of both consumers and direct sellers.  
United States Question 89 
Paragraph 288 of Part IV of the report discusses the commercial presence of foreign suppliers of 
direct selling services in China.  The United States understands that very few direct selling companies 
have been able to obtain licenses that would enable them to conduct direct selling in more than one 
province in China, which significantly restricts th eir ability to expand their businesses in China.  
Could China explain why it imposes this limitati on on the geographic scope of licenses, whether it 
does so by law or as a matter of practice?  
Answer  
This understanding does not accord with the actual situation. As of present, China has approved a 
total of 20 direct selling enterprises, of which 16 are foreign invested companies. Major 
international direct selling giants, such as Avon , Amway and Mary Kay have all been approved to 
operate in China. We also learned that all of them have enjoyed their business opportunities in 
China. 
According to Article 10 of the Administration of  Direct Selling Regulations, the applying direct 
selling enterprises must identify the branches and ou tlets in the provinces, autonomous regions and 
municipalities where it plans to carry out such acti vities. This is a necessary precaution to protect 
the interests of the consumers. 
United States Question 90 Paragraph 290 of Part IV of the report observes that foreign direct sellers must have three years of 
overseas experience to be allowed to operate in Chin a, but that this requirement does not apply to 
domestic companies.  Now that direct selling has been authorized in China since 2005, will domestic 
companies be subject to an equivalent rule?  If not, why not?  
Answer
 
The Administration of Direct Selling Regulations was promulgated in 2005. The three years 
experience requirement for FIEs is adopted taki ng into account that direct selling has been 
practiced for a long time abroad and is an establishe d form of distribution. Allowing experienced 
direct selling enterprises to operate in China is  beneficial for the healthy development of the 
industry and is nonetheless essentia l for ensuring quality of the servi ces provided and safeguarding 
the interests of the consumers. Meanwhile, Chinese domestic companies were not allowed to 
practice direct selling before the Regulation was promulgated and therefore, a requirement for 
direct selling experience is not relevant for them. This is an objective discrepancy (differentiation) 
derived from the historical differences in the path of development of the industry in China and abroad and should be recognized as such.  
Japan Question 59 Please provide the details of the products prohibited to be sold by the suppliers which have more than 
30 outlets and the reason for the regulation for each product.  WT/TPR/M/199/Add.1 
Page 276  
 
  Answer
 
According to China’s WTO accession commitments, foreign retail enterprises are not allowed to 
engage in the distribution of tobacco. 
In China’s accession commitments, the limitation w ith respect to the foreign chain stores with 
more than 30 outlets is a restriction on equity, no t a prohibition of distribution of certain products 
by these chain stores. According to China’s co mmitment, if the above-mentioned chain stores 
distribute certain products, such as books newspapers and magazines, pharmaceutical products, pesticides, processed oil and products listed in the Annex 2a of the Protocol of China's WTO 
Accession, and these products are of different types and brands from multiple suppliers, foreign majority ownership are not permitted. 
Japan Question 57  (1) Please discuss the new regulations on th e large stores. Please describe the political 
intention and the course of discussion on the regulations, the expected time of the 
promulgation and enforcement, the measures to ensure proper operation, the measures to ensure predicta bility for local residents and store openers, the measures 
to ensure accountability in regard to pub lic hearings, and the possibility of an 
administrative protest.  
The Secretariat report says that some local governments have already held public hearings.   (2) Please describe the details of the plans fo r establishing the large stores, and the record 
of the local governments’ decisions. 
Answer
 
The Administration for Urban Commercial Networks  (draft) is still under review according to 
China’s legislative procedures. The draft text can be found in the internet. 
The Administration is not aimed at restrictin g foreign retailers. The requirements of the 
Administration apply equally to both  domestic and foreign enterprises.  
Japan Question 58 
 (1) Please describe the types of stores which have  the incentive. If there are restrictions in 
the scale, the business category, or the ratio of foreign capital, please provide the details.  
(2) Please describe the details of the applicati on and the regions where the incentives are 
higher than other areas. 
Answer
 
To promote the development of distribution services in rural areas, the Ministry of Commerce has 
launched the "Project of Markets of Thousands of Villages and Townships" in 2005. The Project 
grants a special earmarked allowance of 2000- 3000 RMB (approximately USD 280-420) to each 
newly established or rebuilt Village Store in villages and townships. The grant for the village stores 
in mid-west China is increased by 800 RMB (approximately 110 USD) per store. As of 
May 10, 2008, 251094 village stores have been appr oved. The Project played an active role in 
promoting consumption in rural areas.  WT/TPR/M/199/Add.1 
 Page 277 
 
 
  As of present, there have no foreign investments in these village stores. China welcomes foreign 
investment to enter China’s distribu tion market in the rural areas.  
Japan Question  59 
The Secretariat report says that the franchisee can rescind the contract.  
 (1) How does the fact-finding take place and how is the judgment done?  
(2) Please describe details of "relevant information".  
Answer  
The Measures for the Administration of Reco rd Filings in Connection with Commercial 
Franchising does not cover the issue of the unilatera l rescission of the (franchising) contract by a 
franchisee. What Article 11 of the Measure stipul ates is that when a franchisor who has filed a 
record is found to have concealed relevant information, the authority  for the records can revoke the 
registered record. The "relevant in formation" refers to the inform ation that has to be submitted 
when filing a record, e.g. basic information about the commercial franchise,  the information about 
the distribution of all of the fr anchisor’s stores within China, market plan of the franchisor, 
information on the trademark rights, patents and other business inputs relating to the franchised 
business operations. 
Mexico Question 
Paragraph 273 mentions that the distribution sector is still changing as both dom estic and international 
chains are expanding, although foreign presence remain s limited to big cities.  Mexico would be 
interested to know whether there is a chance of gr eater flexibility in the short-term, giving broader 
access to foreigners in this market.  
Answer  
China has made broad commitments on distribution upon accession into the WTO, and has 
earnestly fulfilled these commitments. 
There are no legal or practical barriers for foreign participation in the distribution in the small and 
medium size cities as well as in rural areas. The  fact that foreign distribution enterprises are 
concentrated in big cities is the result of the autonomous decisions taken by the enterprises 
according to the market demands,  because big cities have higher le vels of consumption, larger 
markets and higher profits. In fact, China welcomes foreign participation in the distribution market in rural areas and in centrual and western  regions to promote consumption in the rural 
market. 
Mexico Question 
Paragraph 279 states that liberalization of the dist ribution sector first started in 1992, providing for a 
step-by-step increase in access to foreign suppliers, in particul ar under mode 3 (commercial presence).  
Today, wholly foreign-owned enterprises are allowed.  The range of products that foreign enterprises 
may sell has also increased over time, as has the ge ographical scope of their operations (for retailing).  
China nonetheless still maintains certain restrictions, fo r example, suppliers with more than 30 outlets 
may not sell certain products.  Is the elimina tion of these restrictions under consideration?  WT/TPR/M/199/Add.1 
Page 278  
 
  Japan Question 56 
Please provide the details of the products prohibited to be sold by the suppliers which have more than 
30 outlets and the reason for the regulation for each product.  
Answer
 
According to China’s WTO accession commitments, foreign retail enterprises are not allowed to 
engage in the distribution of tobacco.  
In China’s accession commitments, the limitation w ith respect to the foreign chain stores with 
more than 30 outlets is a cap on equity, not a prohibition of distribution of certain products by these chain stores. According to China’s comm itment, if the above-mentioned chain stores 
distribute books newspapers and magazines, pharma ceutical products, pesticides, processed oil 
mulching films, chemical fertilizers, and products lis ted in the Annex 2a of the Protocol of China's 
WTO Accession, and these products are of differe nt types and brands from multiple suppliers, 
foreign majority ownership are ruled out. 
(vii) Postal services  179 
 
United States Question 91 
Paragraph 300 of Part IV of the report describes the regulatory responsibilities of the new State Post 
Bureau.  Please explain how the State Post Bureau ’s regulatory responsibilities relate to MOFCOM’s 
responsibilities in relation to the licensing and regulation of express delivery service providers.  
Answer
 
In March 2008, the first plenary session of the 11th National People's Congress approved the 
overall plan on institutional reform led by the St ate Council. The functions of all organizations 
under the State Council, including the State Post Bureau and Ministry of Commerce, are expected 
to be defined by the end of J une 2008. Once the drafting process co mpletes, China will make public 
the specific functions in details of these two government agencies. 
United States Question 92 
Paragraph 301 of Part IV of the report explains th at the State Post Bureau’s first Express Delivery 
Service Standards became effective on 1 January 2 008 and "apply to all expr ess delivery operators in 
the market, regardless of their legal nature."  It further explains that, according to the State Post 
Bureau, these standards are recommendatory rath er than compulsory.  Please explain how these 
standards apply to all express deliv ery operators in the China market, but at the same time are not 
compulsory.  Does the State Post Bureau have any authority to enforce these standards?  Do any sub-
national authorities or non-governmental industry asso ciations have any authority to enforce these 
standards?  Please explain.  
Answer  
Express Delivery Service Standards are recommended standards. China encourages all enterprises 
engaged in express delivery services within its t erritory to adopt and use these standards. In the 
process of drafting these standards, China has solicited opinions from all registered foreign-
invested express delivery enterprises. The formul ation, promulgation and implementation of these 
standards have fully accorded with the WTO prin ciples of transparency and national treatment.  WT/TPR/M/199/Add.1 
 Page 279 
 
 
  United States Question 93 
Paragraph 303 of Part IV of the report notes that, according to China, "draft [ Postal Law ] amendments 
are being prepared after soliciting opinions from dom estic and foreign companies."  What is China’s 
timetable for completing its revisions to the Postal Law ?  The United States understands that the State 
Council has selectively circulated different  iterations of draft revisions to the Postal Law .  Does China 
intend to circulate a draft of the revisions to the Postal Law  for public comment before it is finalized, 
as required by Section 2(C)(2) of Part I of China’s Protocol of Accession? 
Answer  
While amending the Postal Law,  the competen t government agencies have solicited opinions of 
domestic and foreign-funded enterprises for several times. Before this law is implemented, China 
will once again provide opportunity for public comm ents to fulfill its transparency obligations. The 
Chinese government attaches great importance to the comments and suggestions made by all 
interested parties and will study them carefully to ensure that the Postal Law as amended is 
consistent with China’s WTO commitments 
(viii) Legal services  182 
 
United States Question 94 
Paragraph 309 of Part IV of the report notes that the Chinese authorities must make a determination of 
"practical need" before granting a license for a fore ign legal firms’ representative office.  Could China 
explain how this limitation is c onsistent with China’s GATS comm itments, which do not identify any 
such limitation on market access?  Does the same limitation exist for domestic firms?  If not, could 
China explain how this limitation is consistent with China’s nati onal treatment obligation under the 
GATS?  
Answer  
The Regulations on the Administration of Forei gn Law Firms’ Representative Offices in China 
requires that the foreign law firms’ representative offices in China "shall have a practical need of 
establishing a representative office in China to carry out legal services" and the US side has 
mistaken this requirement as a form of economic needs assessment that restricts market access. 
China is a developing country where imbalances exist in terms of level of economic development and development of legal services among different regions. To ensure that the needs for legal 
services are met in all regions acro ss China the authorities must take into account the "practical 
needs" of the legal services when  processing applications by the foreign law firms to establish 
representative offices in China, and encourage them to provide services in areas where legal 
services are in short supply. This does not constitute an economic needs assessment that limits the 
total number of the service providers. So far,  no application has been rejected due to this 
requirement. As of present, law firms from  20 countries and regions have established 202 
representative offices in China. 
United States Question 95 Paragraph 314 of Part IV of the report describes some  of China’s restrictions on foreign law firms.   
 a. The United States notes that the prohibition on foreign law firms employing licensed 
Chinese lawyers is a major impediment on businesses seeking to get efficient and comprehensive legal services in China.  Is China considering allowing Chinese WT/TPR/M/199/Add.1 
Page 280  
 
  lawyers employed by foreign law firms to maintain their professional practice license 
and practice Chinese law? 
 b. Are individuals who are not Chinese nationals able to qualify to practice Chinese 
law? For example, can they graduate fro m a Chinese law school and then take the 
qualifying examinations?  If not, why not? 
Chinese Taipei Question 
Is it possible for China to inform us of the timing of when foreign lawyers will be allowed to employ, 
or become partners of, Chinese national registered  lawyers? When will the restriction on foreign 
lawyers working in representative offi ces that they must reside in Chin a for at least 6 months per year, 
be lifted? 
Answer
 
China has fully implemented its WTO accession commitments and allows foreign law firms to 
establish representative offices to engage in prof it-making activities. Like many other WTO 
Members, China does not allow foreign law firms to practice domestic law. Therefore, foreign law 
firms can not employ Chinese registered lawyers. Ne vertheless, this restriction does not affects 
business of the foreign law firms in China with in the scope as defined in China’s accession 
commitment, because China allows foreign law fi rms to establish long-term entrustment relations 
with Chinese law firms to provide related legal services.  
China has not made commitments on non-Ch inese nationals practicing Chinese law in its 
accession negotiations. China implements a uniform State Judicial Examination system. The participants of the examination not only include lawyers, but also first-time judges and 
procurators. Therefore, according to the Law yer’s Law and related regulations, only Chinese 
nationals are eligible to take the State Judicial Examination. 
(ix) Accountancy services 185 
 
United States Question 96 
Paragraph 320 of Part IV of the report describ es the qualification requirements for accountants in 
China.  It specifies ethical and knowledge criteria for eligibility. Are there any other requirements, 
such as education qualification?  Can foreign natio nals take China’s Certified Public Accountant 
examination?  
Answer
 
With respect to the requirement for education qualification of the Chinese Certified Public 
Accountant, according to Article 8 of the Law of  the People's Republic of China on Certified 
Public Accountants, the applicants who "have grad uated from colleges or universities or who have 
earned the professional title of accountant or an  intermediate or higher professional title in a 
relevant field of study may apply for attendance at a unified national examination for certified 
public accountants". With regard to other requi rements, to ensure the quality of the services 
supplied, Measures for the Registration of Certif ied Public Accountants stipulates that applicant 
for the certified public accountants should not be more than 70 years old. 
According to Article 44 of the Law of the Pe ople's Republic of China on Certified Public 
Accountants, "foreigners who apply for participa tion in the unified national examination for  WT/TPR/M/199/Add.1 
 Page 281 
 
 
  Chinese certified public accountants and for regis tration as certified public accountants, the matter 
shall be dealt with on a reciprocal basis." 
Canada Question 88 
Paragraph 321 notes that foreigners are accorded  national treatment based on the principle of 
reciprocity. Could China explain how this requi rement is operationalized  given the additional 
commitments that China has made in its GATS sched ule which state that foreigners who have passed 
the Chinese national certified public accountants (C PA) examination shall be accorded national 
treatment? 
Answer  
For accounting services, China has committed that  "upon accession to the WTO, issuance of 
licenses to those foreigners wh o have passed the Chinese nationa l CPA examination shall be 
accorded national treatment. " This commitment is applied to foreigners who have passed the 
Chinese national CPA examination, and agrees to grant them national treatment when issuing 
practicing licenses. China has fully implemented this commitment.  
Canada Question 89 
Paragraph 322 states that any Chinese certified public accountant (including Chinese and foreign 
citizens with Chinese CPA certification) may apply to establish a partnership accounting firm with 
two or more partners. Do both partners  have to hold a Chinese CPA certification?  
Answer  
Article 9 of the Interim Measures for the Examination, Approval and Supervision of Accounting 
Firms specifies that a partner or shareholder of an accounting firm shall meet certain 
requirements, including holding a Chinese CPA C ertificate, being a full-time practitioner in an 
accounting firm and etc. 
Canada Questions 90-91 
Paragraph 325 notes that foreign public accounting firms can establish resident representative offices 
in China with permission from the Ministry of Fina nce. What are the requirements that a foreign firm 
must meet in order to receive permission? If a pa rtner or shareholder of a foreign public accounting 
firm has obtained the Chinese CPA certification, is the requirement to obtain permission from the Minister of Finance waived?  
Answer
 
Requirements for foreign public accounting fi rms establishing resident representative offices in 
China are stipulated in the Provisional Rules on  Management of Resident Offices of Overseas 
Public Accountants Firms. 
Article 1 of the Rules stipulates that "The establishment of resident offices in China by overseas 
public accountants firms shall be approved by the Chinese Ministry of Finance." This requirement 
also applies to the partners or shareholders of foreign public accounting firms who have already 
obtained the Chinese CPA certification. WT/TPR/M/199/Add.1 
Page 282  
 
  Mexico Question 
As specified in paragraph 325, with permission from the Ministry of Finance, foreign public 
accounting firms may establish resident representative offices and undertake professional services temporarily in China, but they may not undertake statutory audit services of certified public accountants.  Mexico wonders whether further lib eralization of the sector is being envisaged.  
Answer
 
At present, China has no plans to make  further liberalization in this area. 
(x) Tourism  187 
 
Canada Questions 92-94 
The Secretariat Report confirms the selected improve ments in China's market for travel agencies and 
tour operators, as reflected in its schedule of commi tments/offer in the GATS. In particular, they 
pertain to the lifting of joint venture require ments and geographical restrictions. Meanwhile, 
China's restrictions on operations  and revenue requirements remain.  With the lifting of joint venture 
requirements and geographical restrictions, is our  understanding correct that China will maintain 
its annual revenue requireme nt of more than US$40 million? We understand that the registered capital 
requirement will remain, but will be the same as that of the Chinese travel agency/tour operator. 
Please re-confirm. As to the gross tourism turnover requirements, we note that in respect of your 
Closer Economic Partnerships Arrangements with Hong Kong and Macao that these are set at no less 
than US$15 million for Hong Kong and Macao providers  establishing wholly-owned travel agencies 
in Mainland China and not less than US$8 million for those establishing joint-venture travel agencies 
in Mainland China. Is China intending to lower the gross tourism turnover requirements in respect of 
its GATS commitments? If yes, when? If no, why not?  We also note that requirements on business 
scope remain. What is the rationale for these requi rements and when does China intend to lift them?  
Chinese Taipei Question 
Foreign-invested travel agencies are not allowed to conduct outbound travel business. Would China 
consider removing this restriction in the foreseeable future? 
Answer  
China is now working on the amendment of the Regulation on the Administration of Travel 
Agencies and other domestic tourism-related  regulations in accordance with its WTO 
commitments. During the legislative process, Chin a has conducted broad public consultations. Like 
other laws and regulations, the new Regulation on the Administration of Travel Agencies will 
strictly adhere to China’s WTO commitments, incl uding in the aspect of business turnover and 
registered capital. China welcomes commen ts and suggestions from WTO Members. 
With respect to the business scope, China’s schedul e of specific commitments maintains a national 
treatment limitation which stipulates that "None ex cept that joint ventures or wholly-owned travel 
agencies and tour operators are not permitted to  engage in the activities of Chinese travelling 
abroad and to Hong Kong China, Macao China and Chinese Taipei." China’s current practice is 
in line with its WTO commitments. There are many  reasons for adopting this measure, but the 
main concern is to protect the interests of the consumers.  WT/TPR/M/199/Add.1 
 Page 283 
 
 
  Canada Questions 95-99 
In paragraph 332, the report indicates that approved destination status (ADS) is granted upon 
application. What are the steps required to be adde d to China's list of approved destinations? China 
provides access to group tourism exports for countri es with Approved Destination Status. Without 
Approved Destination Status, service suppliers are denied access to group tourism from China. How 
do such service suppliers differ from service supp liers of WTO member countries with Approved 
Destination Status? For how many countries does Ch ina have a written bilateral ADS agreement? For 
countries with a bilateral ADS agreement, when will China make the informati on publicly available? 
What is the role of the Ministry of Foreign Affairs and the Ministry of Public Security in granting Approved Destination Status? What criteria are applied by the Ministry of Foreign Affairs and the 
Ministry of Public Security in allowing the China National Tourism Administration (CNTA) to enter 
into negotiations for Appr oved Destination Status? 
Answer
 
The idea of signing Approved Destination Status  (ADS) agreements was originally proposed by 
some other Members. The purpose for the Approved  Destination Status (ADS) regime is to promote 
more Chinese to travel abroad in a more convenient  way, and to provide visa facilitation for group 
tours of Chinese nationals organized by the travel agencies. This regime is consistent with China’s 
WTO commitments. To conclude bilateral AD S agreements, tourism authorities and visa and 
boarder control authorities of both parties need to reach agreement through consultations together.  
The ADS policy is not a measure restricting co nsumption abroad. Rather, it is a facilitating 
measure to promote and help Chinese natio nals travel abroad in group tours.  
Even if a country has no bilateral ADS agree ment with China, it does not prevent Chinese 
nationals to travel to and consume in that count ry as individual travelers, because apart from 
group tours, Chinese nationals can travel abroad on their own. 
In negotiating and concluding bilateral ADS agreements, China has not discriminated against any 
country. Any Member can request consultations w ith China. Bilateral ADS agreements requests 
that both sides reach consensus on the fac ilitation measures, particularly those facilitation 
measures to be adopted by the destination country.  For example, the ADS agreement often requires 
streamlined procedures for pr ocessing visa applications of the Chinese nationals.  
Hong Kong Question 4 
As reflected in the Secretariat's report, China has initiated fundamental reforms in the hotel industry 
so as to prepare domestic hotels, particularly st ate-owned ones, for global competition.  We are 
interested to know more details of these fundament al reforms in enhancing domestic hotel industry in 
facing global challenges.  
Answer  
The Chinese government has no plan to initiate "f undamental reforms" in the hotel industry. The 
Secretariat has obtained this information from an  academic report by two scholars in 2005, which 
represents only their personal views. If the Member s are interested in this report, please refer to the 
indexed reference in the Secretariat report. WT/TPR/M/199/Add.1 
Page 284  
 
  Australia Question 24 
The Secretariat Report notes that, while the Government's intention is to open the services sector 
further to private and foreign participation as a means of boosting growth and providing alternative 
employment to agriculture, the pace of liberalization has been slower than that for manufacturing.  As 
a result, most services sectors are still subject to a hi gh degree of state control and, therefore, lack of 
competition (Paragraph 26 of WT/TPR/S/199).  
Given these comments, could China explain what measu res it is taking to liberalise trade in education 
services, and particularly in relation to provision of education services by foreign providers within 
China. 
Answer
 
China does not have plans to modify its GA TS Schedule in education services under the WTO 
framework. With regard to the liberalization un der the framework of FTA, according to the 
recently signed Agreement between China and New Ze aland, the two sides have decided to establish 
a reciprocal PhD scholarship program for 10 new students per annum to pursue three-year study 
in each other’s territory.  WT/TPR/M/199/Add.1 
 Page 285 
 
 
  REPLIES TO OUTSTANDING AND FOLLOW-UP QUESTIONS  
Brazil Question 10 
 
According to Chapter III, paragraph 131, of th e Report by the Secretariat (WT/TPR/S/199), the 
General Administration of Quality Supervision, In spection and Quarantine (AQSIQ) is responsible for 
authorizing agencies to issue certificates of origin regarding exports of tex tile products enlisted on the 
Catalogue of Textile Products Subject to Interim Export Administration. Could China inform which 
entities are authorized to issue these certificates of or igin and also inform what authorities are certified 
to issue certificates of origin for other produc ts when these documents are required by importing 
countries? 
 
Answer  
 The local Import-Export Inspection and Quar antine Bureaus are responsible for issuing 
certificates of origin. The China Council for the Pr omotion of International Trade is also certified 
to issue certificates of origin. 
 Mexico Question  
Regarding the structure of its iron and steel mark et, China indicates that a monitoring of total 
production volume has been introduced.  If such a step  is linked to the structure of the iron and steel 
market, is it to be understood as a measure aime d at reducing the volume of production potentially 
destined for the domestic market?  In any event, what does the monitoring involve? 
 
Answer
 
 
The monitoring system is not inte nded to reduce the volume of pr oduction potentially destined for 
the domestic market. It is a means to follow and analyse market trends. 
 
Mexico Question 
 
China states that the aim of its development policy for the steel industry is to achieve "reasonable" 
production levels.  What does this mean?  Can a "reas onable" level be higher than the current level?  
What are the parameters used to determine whethe r or not a given production level is "reasonable"?  
How does China plan to reach such levels?  
Answer
 
 
Production level of steel should meet the need s of economic growth and be able to sustain a 
healthy, enviroment-friendly and energy-efficient development. 
 
Mexico Question 67 
 
This paragraph refers to promo tion of international alignment and the signing of agreements on 
standards cooperation.Please explain what is meant by  promotion here and what the agreements on 
standards cooperation involve. 
 
Answer  
 
Promotion is meant to increase the international alignment rate of Chinese standards. The main 
contents of the relevant agreement include in formation exchange and sharing, standards 
exchange, and personal exchange visits etc.  WT/TPR/M/199/Add.1 
Page 286  
 
  Mexico Question 71 
 
This paragraph concerns the process of devel oping standards and national advisory technical 
documents. Please explain what is meant by  national advisory technical documents.  Are national 
advisory technical documents notified to the WTO?  Please provide a brief explanation of China's 
standards and technical regula tions development process. 
 
Answer
 
 National advisory technical documents fulfilling the WTO notificaion criteria will be notified to the 
WTO. 
 In China, there are some standardization bodies to develop standards and the Chinese governemnt 
develops technical regulations when there is a need  to regulate. For more information, please visit 
SAC’s website: www.sac.gov.cn 
 
Mexico Question 73 
 
This paragraph mentions that enforcement of standa rds needs to be improved, particularly when this 
involves IPR infringement.  As technical regulations are not followed, counterfeit products of inferior 
quality may have a major impact on legitimate objectives. What does IPR refer to? What types of 
standard or technical regulation are involved? Do these present a risk in terms of achieving a 
legitimate objective? Why is their application not mandatory?  
Answer
 
 
While standard enforcement is important to protect  the health of human, animals and plants, and 
the environment, this paragraph also indicat es the relationship of IPRs and standardization. 
 The background for China to raise the issue of IPRs in standardization is as follows: the 
combination of standard and intellectual property ri ght is inevitable. However, in this process, 
improper combinations do sometimes take place,  such as the failure of timely and complete 
disclosure of information about intellectual prop erty rights to the standard-setting bodies as 
required by the patent policies of standardization  bodies; too strict IPR licensing terms and 
exorbitant IPR royalty and so on. All these are de trimental to the sound development of standards 
which have inevitably exerted negative impac t on the implementation of TBT agreement. 
Therefore, this issue should be taken into du e consideration by the in ternational communities 
including WTO.  
 China has submitted to WTO the communication  "Intellectual Property Rights Issues in 
standardization" (G/TBT/W/251, G/TBT/W/251/Add.1). Our position on this issue is: IPRs in standards should be fully protected by law. At the same time, the improp er combinations of IPRs 
and standards will hinder the dissemination and ap plication of new technologies and constitutes a 
barrier to international trade. All these are detr imental to the world economic development. The 
negative impact is especially severe on developing Members. It will seriously obstruct their future 
participation in globalization and will also wi den the gap between the developing and developed 
countries and further aggravate the imbalances in the world economy.  
 
The international communities have all along attached great importa nce on the issue of IPRs in 
standardization. Currently many countries and in ternational organizations are carrying out 
researches on this issue, in an attempt to form ulate relevant policies to clarify the rights and 
obligations of the holders of IPRs and the manuf acturers implementing the standards. Intellectual 
property rights should be fully protected while standards should also be smoothly developed and  WT/TPR/M/199/Add.1 
 Page 287 
 
 
  applied. The international standard organizations, such as ISO, IEC and ITU, have already 
formulated fundamental principles concerning the information disclosure of IPRs and IPR licensing. These principles have been recognized and applied widely by other standard organizations.   
The purpose of standardization is to enhance productive efficiency and facilitate international 
trade. WTO Members are encouraged to adopt in ternational standards. To ensure the smooth 
implementation of the TBT Agreement, the efficien cy and quality of international standards should 
be enhanced and full consideration should be given to the difficulties that each Member, especially 
developing Members may encounter during implemen tation. The issue of IPRs in standardization 
is a problem that figures prominently. WTO should ac tively explore the solutions to this issue based 
on the achievements already made by the interna tional standardization organizations. To this end, 
the Chinese government will continue to push forwar d the discussion of this issue in the WTO TBT 
Committee, and stands ready to communicate  with other members on this topic.  
 
Mexico Questions 74, 75, 76 
 
These paragraphs deal with the various bodies in charge of inspection and the development of 
standards in the food sector. Are there food labellin g standards or technical regulations? How many 
such standards or technical regulations are there and to what types of food product do they apply? 
 Answer  Various standards and technical regulations in food sector are developed in China to fulfill the 
legitimate objectives such as prot ecting human health and safety. 
 
Mexico Questions 77 to 82  
These paragraphs state that the AQSIQ is in charge of administering China's certification and 
accreditation system. Can a product marked with the le tters CCC be taken to comply with a standard 
or technical regulation, regardless of the product or  the standard or technical regulation concerned, 
and is the mark generally used?  Are the letters CCC used solely fo r products subject to a technical 
regulation?  Are there private certification bodies?  Does the same body handle accreditation and act as 
both judge and party?  Are there conformity assessment procedures and policies?  Are product 
certification procedures the same for domestic products? 
 
Answer
 
 
The Compulsory Product Certification (CCC) Syst em is developed and im plemented equally to 
domestic and imported products. The purpose of th is system is to ensure safety and security of 
covered products to human beings and the environm ent. The best effort has been made by the 
Chinese Government to reduce its negative effect on trade to the minimum. The CQC certification 
is totally voluntary; therefore CQC certific ation has no effect on market access. 
 
Mexico Question 83 
 
Is there an enquiry point to respond to questions concerning standards and technical regulations or 
information about technical standards pertaining to trade (" normas técnicas al comercio ")? Please 
provide details on China's procedures for notification to the WTO. 
 WT/TPR/M/199/Add.1 
Page 288  
 
  Answer
 
 
China established its Notification and Enquiry Po int following its accession to the WTO and China 
makes notifications to the WTO through this Poin t under its WTO obligation. Please visit the website: 
www.wto-tbt.gov.cn for detailed information. 
 
Switzerland Question 
 
According to para. 116 of the Secretariat's report, the simple average applied MFN tariff rate rose 
from 9.1% in 2005 to 9.7% in 2007, due to China's ch anges in HS nomenclature.  China indicated that 
the average rise because, under the HS 2007, some non- zero items were further classified into more 
specific ones, resulting in a rise of the number of non-zero-rate tariff items. Could the Chinese 
authorities provide an exhaustive list of the items at HS 8-digit level together with the product 
description and old and new tariff for which the tariff rate has increased? 
 Answer
 
 Please check the website of General Administratio n of Customs for the detailed concordance table 
of HS 2007 transposition. 
 
Republic of Korea Question 9 
 The Secretariat Report (paragraph 21) notes that some  aspects of China's trade policy regime remain 
complex and opaque. Although China is rapidly enac ting many laws that may greatly impact the 
business of foreign invested companies, English tr anslations have not been sufficiently provided. 
Also, ordinances issued by local governments are rarely  translated into English. Furthermore, in many 
cases, China only allows a relatively short period of time between promulgation of a law and its 
implementation, which makes it difficult for compani es to be prepared for new laws. Please elaborate 
the Chinese Government's plans to improve transp arency in implementing laws, regulations and 
administrative guidelines.  Answer
 
 China has implemented its accession commitment regarding transparency. We will continue our 
efforts to make our legal system more transparent.  
Republic of Korea Question 10  
The Secretariat Report (paragraph 11) notes that p ilot projects to reform China's regional customs 
transit system have been implemented since Oc tober 2005. Please provide the Chinese Government's 
plans to fully implement the customs transit system.  Answer
 
 
Please refer to China’s reply to the same question by Argentina.   
Republic of Korea Question 11 
 
The Secretariat Report (paragraph 42) notes that ar ound 6.5% of tariff lines were subject to import 
prohibitions in 2007. Currently, 410 items such as  second hand buses and motorcycles are included in 
the prohibition list of used machinery and elect ric goods. Korea would like to request that China 
clarify whether the prohibition is in  accordance with international laws. 
  WT/TPR/M/199/Add.1 
 Page 289 
 
 
  Answer  
 Measures of import prohibition adopted by Chin a on the import of used or wasted goods are 
consistent with Paragraph 121 of China’s Work ing Party Report and Article 2 of The Agreement 
on the Application of Sanitary and Phytosan itary Measures of WTO which stipulates that 
"Members have the right to take sanitary and ph ytosanitary measures necessary for the protection 
of human, animal or plant life"  In accordance with the provisions in the Annex 1 and Annex 2 of the Basel Convention on the Control of Trans-boundary Movement of Hazar dous Wastes and Their Disposal, "the clinical 
wastes produced during the medical treatment s ervices of the hospitals, medical centers, and 
clinics" belong to the category of wastes for whic h control is needed, and "the wastes collected 
from households" belong to the category of wast es for which special consid erations are needed. In 
accordance with the provisions of the Article 1 and Article 4 of the Convention, every signatory country has the right to ban the import of the ha zardous wastes listed in the Annex 1 and Annex 2 
of the Convention. China has adopted the Basel Convention and also stipulates that the import of 
hazardous wastes is banned in the Law on Preventi on and Control of the Environmental Pollution 
Caused by Solid Wastes (Solid Waste Law). Therefo re, the ban on the used clothing identified as 
hazardous wastes by the competent Chinese administr ative departments is in full compliance with 
the applicable international environmental conventions.  
China does not deem second-hand equipment as waste product, and does not completely prohibit 
the importation of second-hand precision equipment.   Pursuant to Regulation on Administration of Import and Export of Goods, China published 
6 batches of Catalogues of Goods subject to Im port Prohibition, which stipulates the used and 
wasted products subject to import prohibition are u sed mechanical and electronic products as well 
as used clothes. The importatio n of these two kinds of products may carry germ and bacteria as 
well as product of fatal safety flaw to market, thus causing harm to human health and safety. 
Before the Regulation and the Catalogues were pu blished, there had been quite some cases where 
imported used mechanical and electric products and clothes caused harm to people’s heath, life and property. These cases raised serious concerns about these products among Chinese people. For 
example, it was reported both in newspaper and on  TV that imported second hand endoscope 
caused serious medical accidents.   With respect to used mechanical and electronic products, the State General Administration of 
Quality Supervision, Inspection and Quarantine,  issued Measures for the Inspection and 
Supervision Management of the Imported Used M echanical and Electrical Products (the No. 37 
order) on December 31, 2002. As regulated in the said Measures, used mechanical and electronic 
products, which meet the conditions prescribed in  the Article 2 of the Measures and China’s 
compulsory requirements in the applicable nationa l technical specifications about the sanitation 
and environmental protection, can be imported aft er being inspected and granted with Certificate 
on the Inspection and Quarantine of Imported Goods. 
 
Republic of Korea Question 12 
 
The Secretariat Report (paragraph 49) notes that 604 tariff lines were fully and partially subject to 
automatic import licences in 2007. The license syst em was implemented to monitor such items as 
refined oil, edible oil, coal, natural rubber, steel  and waste paper. However, businesses are required to 
disclose sensitive information when applying for th e license. The licence system, beyond merely 
monitoring imports for statistical purposes, seems to play a function to control imports. Please provide the Chinese Government's plans to improve the system.  
 WT/TPR/M/199/Add.1 
Page 290  
 
  Answer
 
 The automatic import licence system is intended to monitor import flows. It doesn’t play a function 
of controling imports.   
Republic of Korea Question 13 
 The Secretariat Report (paragraph 70) notes that ther e are standards at the national, sectoral, local, and 
enterprise levels in China. In each of the national,  sectoral, and local categories, there are voluntary 
and mandatory standards. According to Table III.4,  the alignment rate of national standards with 
international standards and with ISO/IEC standard s is 46.4% and 34.8%, respectively. Korea kindly 
requests China to clarify what international standa rds, apart from ISO/IEC standards, are recognized 
nationally, and the rationale for their recognitio n.According to Table III.4, 15.2% of sectoral 
standards and 19.7% of local standards are mandato ry standards.  Korea kindly requests China to 
clarify whether China notifies  other Members of th is arrangement in accordance with Article 2.9 of 
the WTO/TBT Agreement. 
 
Answer
 
 In addition to ISO/IEC standar ds, standards develope d by other international standardization 
bodies fulfilling the 6 principles agreed by the TBT Committee are also recogni zed as international 
standards. China does notify all its technical regul ations in accordance with Article 2.9 of the 
WTO/TBT Agreement.  
Republic of Korea Question 15 
 
The Secretariat Report (paragraph 86
) notes that the Chinese Governme nt provides assistance in the 
form of tax refunds, discounted interest rates, a nd funds for research and development to major iron 
and steel projects that use newly developed domest ic equipment. Equipment may be imported only 
when the equipment is technically advanced an d not already produced in China. Furthermore, 
investment by foreign steel companies is bound by various restrictions such as minimum production 
conditions, technology transfer plans, distribut ion channel conditions and M&A of Chinese steel 
companies. Please provide the Chinese Government's  plans to lower the market access barrier to 
Chinese steel market. 
 
Answer  
 
China’s iron and steel industry policy is fully in  compliance with WTO rules and China’s accession 
commitments. 
 
Republic of Korea Question 16  
The Secretariat Report (paragraph 101) notes that th e minimum capital requirement for new entrants 
is Y 2 billion. It (paragraph 104) also notes that imports of vehicles are permitted only through a few 
customs clearance points. Consequently, this m easure has indirectly controlled the import of 
automobiles by increasing logistics costs. Please provi de the Chinese Government's plans to lower the 
market access barrier to the Chinese automotive sector. 
 
Answer
 
 China has no plan to lower the capita l requirement for automobile project. 
  WT/TPR/M/199/Add.1 
 Page 291 
 
 
  Australia Question 2.c 
 
What additional improvements is China considering with regard to its administration of the wool 
TRQs?  
 
Answer  
 China has no plan to change the administration of wool TRQs.  
 
Australia Question 12.a, 12.b  
Australia notes that imports of corn, rice, wheat, sugar and cotton are subject to both state trading and 
TRQs (Paragraph 23 on page 114 of WT/TPR/S/199). What  were the fill rates for that part of the tariff 
quota allocated to state trading enterprises and also for that part of the quota allocated to private 
enterprises? What arrangements does China have in place to reallocate unused quota? 
 
Answer
 
 The allocation and reallocation of TRQs are conduc ted in accordance with the Interim Measures 
on the Administration of Import Tariff Rate Quota for Agricultural Products. China will provide 
notifications on state trading enterpri ses and TRQ as required by the WTO. 
 
Australia Question 13 
 
Australia notes that "China has made no notifica tions to the WTO Agriculture Committee regarding 
the support given to the agriculture sector duri ng the period under review" (Paragraph 35 on page 116 
of WT/TPR/S/199). What are the reasons for the delay in notification and when will the domestic 
support notifications for 2002 onwards be made?  
Answer
 
 
The domestic support notifications for 2002 onwards are under preparation. 
 
Australia Question 14.e 
 
Could China provide details of its imports  rules for declaring iron ore shipments? 
 
Answer  
 Other than the usual paper for customs decl aration, China does not have other specific 
requirements for importer to declare iron ore import.  
 
Australia Question 16 
 
The steel industry is closed to foreign invest ment through investment approval control via 
NDRC. When is the steel sector expected to be opened up to foreign investment? 
 
Answer
 
 China has not ceased approval of foreign investment in steel industry.   WT/TPR/M/199/Add.1 
Page 292  
 
  Argentina Question 
 
Paragraph 10, page 44  This paragraph of the S ecretariat report states that, at the time of customs 
declaration, importers must meet the requirement s of Customs and the General Administration of 
Quality Supervision, Inspection and Quarantine (AQSIQ ).  Please explain what the main requirements 
are. 
 
Answer
 
 Please check the relavant laws and regulations on import requirements. 
 
Argentina Question  
Paragraph 15, page 46  It is stated  in this paragraph that China appl ies non-preferential rules of origin 
in accordance with the Regulations on Rules of Origin of Import and Export Commodities (State 
Council Decree No. 416 in 2004).  Could China i ndicate whether all the commercial provisions 
concerning rules of origin are available on the Intern et?  If so, are these provisions available in any of 
the WTO's official languages?  
Answer
 
 
All the mentioned laws and regulations can be fo und online, and there are english versions to most 
of them.  
 
Argentina Question 
 
Paragraph 36, page 55 Here, it is stated that  preferential treatment, including through tariff 
preferences, is applied to some border trade activities.   Please specify what is the basis of these tariff 
preferences and what they consist of.  What commercial activities for these preferences and why? 
 
Answer  
 
China’s border trade policy is in compliance with WTO rules. Tariff preferences are provided to 
people living along the border with an aim to fa cilitiate frontier traffic and improve livilihood and 
promote develoment.   Argentina Question 
 Paragraph 38, page 56  It is stated in this paragraph that, to reduce energy consumption and protect 
the environment, the Government may not grant preferential treatment under processing trade on certain goods, but that these goods can be imported if  all relevant customs duties are paid.  Could 
China explain what are the reasons for allowing the entry of this class of goods in cases where the 
relevant customs duties are paid?  
 
Answer
 
 To reduce energy consumption an d protect the environment, China decided to prohibit certain 
types of processing trade. However, in order to implement its WTO commitment, China still allows 
the imports of such goods so long as they have paid their import duties.  
Argentina Question 
 
Paragraph 41, page 56   It is stated in this paragraph that, in  addition to import ta riffs and value-added  WT/TPR/M/199/Add.1 
 Page 293 
 
 
  tax (VAT), an excise tax (consumption tax) is also  levied at the border on certain items.  What tax 
does this paragraph refer to, and what are its characteristics?  
Answer
 
 
Please check the website of the Ministry of Finance for the detailed lists of goods subject to excise 
tax. It is a tax on luxuries and natural resouce product, which is an international practise.  
 Argentina Question  
Paragraph 43, page 57  Th is paragraph of the report states that, in accordance with the Foreign Trade 
Law, MOFCOM may issue temporary import prohibitions  or restrictions, which are mainly related to 
restrictions under international conventions.  Could China indicate what products, other than 
diamonds from Liberia, could potentially be subject to these prohibitions or restrictions and what 
products have had prohibitions or rest rictions applied to them since the entry into force of this law? 
 
Answer
 
 Other than temporary import prohibition on di amonds from Liberia, China adopts temporary 
import prohibition meausres on high-risk agricultura l products originated from epidemic area, 
which are all notified to WTO SPS committee. 
  
Argentina Question  
Paragraph 45, page 57  According to this para graph, details of commodities subject to import 
licensing are published annually by the Ministry of Commerce.  Can this list of products be accessed 
on any particular web page?  Could the Chinese Government specify what criterion is used by the 
Ministry of Commerce to determine what pr oducts will be subject to import licences? 
 
Answer
 
 For example, harzardous chemicals listed in the Rotterdam Convention. Please check the website 
of Ministry of Environmental Protec tion for the detailed information. 
 
Argentina Question 
 
Paragraph 47, page 58  It is stat ed in this paragraph that an a pplication for a non-automatic import 
licence may be refused if justification for importation is "unconvincing" to the application authority.  
What grounds are covered by the term "unconvinc ing"?  Could China provide information on the 
number of applications for licences that have been refused during the period under review? 
 
Answer
 
 
The list can be accessed on the website of MOFCOM. Please check the relavent laws and 
regulations for the criterion of import lincencing administration. 
 
Argentina Question 
 
Paragraph 52, page 59  This para graph states that MOFCOM issues and adjusts annually the lists of 
goods subject to State trading, and of authori zed State trading enterprises.  Could the Chinese 
authorities provide a full list of the goods that are s ubject to State trading or the web page on which 
the list is published?  What criteria are used by  MOFCOM to add products or withdraw them from 
this list? WT/TPR/M/199/Add.1 
Page 294  
 
  Answer
 
 China does not annually adjust the catalogue of pr oducts subject to state trading, nor the criteria 
for adjustment. China gradually eliminated state tr ading or designated trading on natural rubber, 
wood, plywood, wool, acrylic, steel and vegetable oil after accession. China has honoured all the 
commitments in this area, and the catalogue of produ cts subject to state trading is consistent with 
Annex 2ª1 and 2ª2 to China Accession Protocol.  
 
Argentina Question 
 
Paragraph 70, page 64  This para graph indicates that, in addition to national technical standards, 
China also has sectoral, local and enterprise standard s, and that these may be voluntary or mandatory.  
Is there a web site providing information on the full range of China's technical regulations on imports 
and exports?  Answer
 
 
Yes. Please go to the website of China’s Nati onal TBT Notification and Enquiry Point: www.wto-
tbt.gov.cn.and also SAC’s website: www.sac.gov.cn 
 
Argentina Question 
 Paragraph 139, page 80  In this paragraph of the report, it is stated that the Export-Import Bank of 
China (EXIM Bank) engages in providing financial support to promote exports of mechanical and electronic products and high and new technology products.  Could the Chinese Government explain 
what requirements must be met by an enterprise to qualify for such financial support? 
 
Answer
 
 The EXIM Bank grants financial support to ent erprises on the basis of commercial terms and 
conditions, which is consisitent with WTO rules and China’s accession commitment. http://www.eximbank.gov.cn/ 
 
Argentina Question  
Paragraph 148, page 82  This paragraph refers to a 2006 adju stment of the consumption tax under 
which coverage was extended to some luxury ite ms and "resource-consumi ng" products.  Could the 
Chinese authorities explain the grounds for adding these products and what type of resources are 
referred to?  Could they also explain how a  pr oduct is determined to be   "resource-consuming"? 
 
Answer
 
 Please check the website of the Ministry of Finance for the detailed lists of goods subject to excise 
tax. It is a tax on luxuries and natural resouce- consuming product, such as  wood chopsticks, which 
is an international practise.  
 
Argentina Question 
 
Paragraph 161, page 87  This paragraph states th at, since China commenced its economic reform and 
opening up to the outside world, special economic and other zones have been set up to attract FDI.  It 
also states that enterprises locat ed in special economic and other zones receive preferential tax 
treatment.  Could China explain what concrete pr ogress it has made, since joining the WTO, in its 
policy of tax incentives for foreign direct investment  in special economic zones, in relation to the  WT/TPR/M/199/Add.1 
 Page 295 
 
 
  policies applied in other parts of  the country's customs territory? 
 
Answer  
 The new Tax Law, which came into effect in Ja nuaray 1, 2008, has unified the income tax for 
foreign enterprises and doemstic enterprises ac ross the country. According to the new law, 
enterprise, no matter foreign or domestic, are entitled to preferentia l tax treatment as long as they 
meet specific requirments set out in the ne w Tax Law and its implementation regulations. 
 Argentina Question 
 Paragraph 168, page 89  This  paragraph states that, in addition to  tariffs, tax incentives and subsidies, 
other tools have been introduced to channel res ources into industry, such as "guided" credit and 
various "catalogues" identifying sectors eligible for incentives.  Could China explain what is meant by 
"guided credit" and what requirements must be met by an enterprise in order to qualify for this 
benefit.  On what basis are the sectors included in the "catalogues"  identified and what incentives are 
available to those sectors?  
Answer
 
 The industial policy of China is consistent w ith WTO rules and China’s accession commitments. 
The industry catalogue is developed according to  the development plan of the country. Investment 
facilitation and tax incentives may be granted if certian standards are met.  Argentina Question: Paragraph 13, page 112  
It is stated in this paragraph that "even though grain continues to be China's most important crop, 
there has been a shift in production from the traditi onal staples (i.e. rice and wheat) to corn and to 
other more profitable crops such as fruits and vegetables".  Among those crops, has there been an increase in the area sown with soya?  
Answer
 
 
In recent years, the plantation acreage of soybean decreased significantly. 
 
Argentina Question 
 
Paragraph 74, page 126  This  paragraph states that "although coal will remain the mainstay of China's 
energy supply ... diversification of the mix of en ergy forms, sources, and suppliers can generate 
important environmental and security benefits".  What are China's views concerning the development 
of biofuels as an alternative energy source?  
Answer
 
 
Public opinion solicitation of draft of Law of the P.R.C on Energy was concluded on Feb. 1, 2008. the Chinese government will further modify the draft with regard to the solicited opinions. The draft can be viewed at official website of NDRC: http://www.ndrc.gov .cn/yjzq/W0200 712273391116 
10738.pdf. 
 
In China, there is huge potential for development of biogas which is mainly in form of marsh gas.  
At present, there are 27 million bio gas pools in China and annual bio gas consumption reaches 
11 billion cubic meters. Pursuant to China’s Na tional Climate Change Programme, development 
biomass energy is deemed as one of the measures to cope with climate change and green-house gas WT/TPR/M/199/Add.1 
Page 296  
 
  emission. In December, 2007, the Chinese governm ent published the White Paper on China's 
Energy Conditions and Policies. In the white pap er, China deemed development of reproducible 
biomass energy as part of China’s national stra tegy for energy. To preven t the competition between 
biomass energy crop with food supply, China restri cts the number and scale of bio-fuel projects. 
The restriction applies to both domestic and fo reign investors. Foreign investment in biomass 
energy still falls into the restricted category in the Catalogue of Foreign Investment Industries.  
 
Argentina Question 
 
Paragraph 86, page 129  It is stated in this para graph that China's policy is to encourage the use of 
domestically produced equipment or technology,  emphasizing efforts to produce such equipment 
locally.  Accordingly, the Government provides ass istance in the form of tax refunds, discounted 
interest rates and funds for research and developm ent to major iron and steel projects using newly 
developed domestic equipment.  Could Chin a explain how such assistance is organized? 
 Answer
 
 China’s indutrial policy is consistent with WTO rules and China’s commitment to the WTO. 
Imports and domestic-made  equipments are granted equal treatment. 
 
Hong Kong, China Question 1 
 We note from the Secretariat Report that the deci sion to levy AD duties is made by the Tariff 
Commission of the State Council, based on suggestions made by MOFCOM.  We are interested in knowing whether the decision making of the Tariff Commission of the State Council is one of formality or substantive. If the latter, what are th e considerations of the Commission, apart from the 
suggestions of MOFCOM, in taking a decision?  
 
Answer
 
 The tariff commission has so far not turn ed down any suggestion made by MOFCOM. 
 
United States Question 15 
 
The United States appreciates the information provided in  paragraph 50 of Part III of the report on the 
issuance of import licenses, including the expl anation that import licenses are normally issued 
immediately or, in special circumst ances, within 10 days.  The Unit ed States notes that U.S. exporters 
of recycled scrap have expressed concerns about  the import license renewal process applicable to 
them, particularly with regard to the amount of time it takes for them to  receive a license renewal 
from China’s General Administration of Quality S upervision, Inspection and Quarantine (AQSIQ).  
This process has reportedly taken up to 3 months.  What plans does China have for expediting the 
renewal process before AQSIQ? 
 
Answer
 
 There are no such plans  
 
United States Question 16 
 Paragraph 50 of Part III of the report notes that automatic import licenses are valid for 180 days.  
What is China’s rationale for imposing a time lim it on the validity of an automatic import license? 
  WT/TPR/M/199/Add.1 
 Page 297 
 
 
  Answer  
 The aim is to keep the import statistics valid and accurate for the purpose of monitoring.  
 United States Question 21 
 In paragraph 69 of Part III, the report notes that the Standardization Administration of China (SAC) 
"publishes a catalogue that prioritizes the products  for which standards are to be aligned with 
international ones."  Please describe the criteri a used by SAC in prioritizing these products. 
 Answer
 
 When developing its standards development plans, in cluding the plan on adoption of international 
standards, China takes into account many factors, such as its obligations under the WTO, the industrial development needs and others. 
 
United States Question 26 
 
Paragraph 91 of Part III of the report notes China’s membership in international standards developing 
organizations such as the World Organization for Anim al Health and CODEX.  As a member of these 
organizations, can China clarify when it intends to  align its import polici es related to (a) bovine 
spongiform encephalopathy (BSE) and (b) Avian Influe nza with the international standards developed 
by the World Organization for Animal Health?  If China does not plan to do so, will China instead 
identify the risk assessment data th at supports its import policies? 
 
Answer
 
 
China adopts or enforces measures necessary to pr otect human, animal or plant life or health, 
taking account of the circumstances and relevant risks. 
 
United States Question 27.a), 27.b) 
 
Paragraphs 93, 94 and 95 of Part III of the repor t outline China’s food labelling requirements.  The 
United States understands that in November 2007 China notified its Administrative Measures on Food 
Nutrition Labelling  to the WTO. In reply to comments submitted by the United States, China 
indicated that a transition period for the nutrition la belling requirements would be established.  China 
also indicated that it was consulting with stakeholde rs regarding the appropriate  length of time for this 
transition period and was considering a transition pe riod of not less than two years from the official 
adoption date of its measure.  Has China determined  the length of the transition period? Could China 
explain how it derived the methodologies proposed  for calculating the various nutrient amounts 
required to be listed on nutrition la belling panels? What scientific data or other bases did China use to 
develop the nutrient reference values?  Answer
 
 China’s decision on the length of time for th e transition period depends on factors such as 
consultation with stakeholders and the need to re gulate. For more detailed information, please 
contact SAC. 
 
United States Question 28 
 
Paragraph 94 of Part III of the report states that "certificates for sale and prior approval by the AQSIQ 
are no longer required."  Can China confirm that this statement is correct? WT/TPR/M/199/Add.1 
Page 298  
 
   
Answer
 
 The Secretariat Report has made a sufficient clarification in Paragraph 94. United States Question 33 
 Paragraphs 115 and 116 of Part III  of the report explain that expor ters are generally entitled to VAT 
rebates, except that the VAT rebate for partic ular products has periodically been reduced or 
eliminated in order to discourage exports and meet  industrial development goa ls.  The report describes 
this practice of periodically reducing or eliminati ng VAT rebates as "a levy on exports, which may, in 
turn, constitute an assistance to downstream proce ssing of the products affected."  The Chinese 
authorities reportedly disagree with this characteriza tion, as in the past.  In the United States’ view, 
China resorts to this practice in part because it has not yet developed a fu lly functioning market 
economy and therefore cannot simply leave it to the ma rket to bring about the necessary adjustments.  
The United States continues to urge China to und ertake the economic reforms necessary for it to 
complete its transition to a market economy.  Does China have any plans to phase out its practice of 
periodically reducing or eliminating VAT rebates?  Please explain. 
 
Answer
 
 There are no such plans  
 
United States Question 
 
In paragraph 4 of Part IV, the report discusses China’ s energy policies and their effects.  It states:  
"While China’s high energy intensity may be partly explained by the share of industry (which tends to 
be relatively energy intensive) in GDP . . . , it is  also undoubtedly due to the insufficiently market-
oriented price mechanism for oil, coal, electricity, and natural gas, which sets artificially low prices 
and, as a consequence, leads to a waste of energy, to the detriment of the environment."  The report 
adds that China "regards energy as a strategi c commodity and has therefore adopted a gradual 
approach to reforming the sector.  As a result, trade restrictions and regulatory barriers protect domestic producers from international competition.  However, it remains to be seen whether such a 
gradual approach to reform will be sufficient to address the challenges the sector faces, especially the 
compatibility of China’s large and rapidly growing en ergy needs with protection of the environment."  
what is China’s response to these statements?  
Answer
 
 
Governent pricing of energy is consistent with China’s WTO commitment. The reform of energy 
sector and the deregulation on the price of energy is a gradual process, taking into consideration 
the national and world economic situation.  
 
Philippines Question 1.a), 1.b), 1.c) 
 The Philippines understands that China will adopt its  first comprehensive food safety law in response 
to the spate of safety-related incidents in China as well as overseas involving Chinese-made products.  
Can China provide information on the food safety law, presenting if possible its salient features?  How will China ensure that the law will comply with its WTO commitments on non-discrimination 
and transparency? Will it be accessible to the public ? Will the law be availabl e in an official WTO 
language?   WT/TPR/M/199/Add.1 
 Page 299 
 
 
  Answer  
 China would like to make it clear that this food safety law aims to improve food safety of both domestic and import food and it complies with China’s obligations under the WTO, both on 
procedure and on substance.  
 
Philippines Question 2.a), 2.b), 2.c) 
 
In the Secretariat’s report, it is noted that the revised rules in China’s General Administration of 
Customs, Decree No. 148, 2006 which came into force on 1 May 2006 were mainly intended to 
achieve further clarification of the relevant inte rnational agreements such as the Agreement on the 
Implementation of Article VII of GATT 1994 (the  Customs Valuation Agreement). Has China 
adopted measures that will further improve transpar ency and predictability an d ensure the consistent 
and uniform application of rules particularly in th e determination of customs value of imported goods 
in its multiple ports and local governments? How w ill these revised rules affect Philippine exports of 
banana chips, whose declared/transaction values ha ve not been accepted, without the benefit of 
sufficient explanation, by Customs authorities? Wi ll these revised rules require that the transaction 
value of banana chips from the Philippines will be accepted by Customs authorities, in accordance 
with Article 1 of the Customs Valuation Agreement?  
Answer
 
 
China’s customs valuation system is consistent with  WTO rules. For the issue of specific products, 
please contact the valuation office of the loca l custom authorities for the relavant reference. 
 
Philippines Question 7 
 In its report, the Secretariat indicated that MO FCOM instituted interim measures on complaints from 
foreign-invested enterprises.  These measures en tered into force on 1 October 2006. Has China 
adopted new measures designed to expeditiously a nd better address complaints of foreign-invested 
enterprises and foreign investors who consider that th eir rights have been impaired by the authorities? 
What are these measures? 
 
Answer
 
 China’s investment policies are in consistent with WTO rules and do not compromise investors’ 
interests.  
 
Japan Question 7  
The Secretariat report states that "under special circ umstances, it may take up to ten days to issue a 
licence." Please enumerate concretely the cases in which "special circumstances" exist. 
 Answer
 
 Special circumstances are at the discretion of the administraing officer and might vary between 
different type of products. 
 
Japan Question 8  
Footnote 70 mentions that "Sectoral standards ar e developed when there are no national standards 
available, but unified technical requirements are ne eded in a certain professional field at the national 
level."  However, in general, almost all standard s, including national standards, have to do with WT/TPR/M/199/Add.1 
Page 300  
 
  unified technical requirements in a certain professional field. Thus, it is difficult for us to understand 
the difference between national standards and sectoral  standards.  Please explain the exact criteria 
which SAC and relevant ministries use to determine whether a new standard should be introduced as a 
national standard or a sectoral standard.  Answer
 
 National standards are the technical requirements that need to be uniformly applied nationwide. 
Sectoral standards are, in the absence of natio nal standards, technical requirements for a certain 
sectoral need to be unified; the sectoral standards are formulated and shall be phased out upon the 
publication of national standards.  
Japan Question 9 
 
National standards and sectoral standards can each  be subdivided into mandatory standards and 
voluntary standards. We understand that both types of mandatory standards observe the obligations 
under Article 2 of the TBT Agreement. Japan al so understands that voluntary national standards 
observe the obligations under Annex 3 of the TB T Agreement, as SAC has accepted the Code of 
Good Practice. However, according to China, volun tary sectoral standards currently do not fall under 
the TBT Agreement, since the individual govern ment agencies (e.g., Ministry of Information 
Industry) that create sectoral standards have not  accepted the Code of Good Practice.Why have these 
government agencies not accepted the Code of Good Practice?  Article 4.1 of the TBT Agreement 
clearly states that "Members shall ensure that their central government standardizing bodies accept 
and comply with the Code of Good Practice."  It is  evident that the Ministry of Information Industry 
and many other agencies responsible for the crea tion of sectoral standards are indeed "central 
government standardizing bodies" which mu st accept the Code of Good Practice. 
 
Answer
 
 As the administrative agency for national standardi zation, Standardization Administration of PRC 
(SAC) accepts Code of Good Practice. SAC would welcome any specific comments. 
 
Japan Question 10  
The Government of Japan has information that th e Food Hygiene Law in China will be amended in 
2008. If this is correct, please provide the inform ation concerning the summary of the amendment of 
the law and, in particular, the effect of the amen dment on the import of foreign foods and alcoholic 
beverages into China. 
 
Answer
 
 The amendment of Food Hygiene Law is proc eeding and China will make the amendment 
according to its WTO obligations. 
 
Japan Question 16 
 
Please explain in more details the scheme of "destination-specific export quotas". 
 Answer
 
 "Destination-specific export quotas" specifically re fer to the livestock exported to Hong Kong, 
China, Maocao, China.  
  WT/TPR/M/199/Add.1 
 Page 301 
 
 
  Japan Question 17 
 
There is an increase of 447 tariff lines at HS 8-di git level which are subject to export quotas and 
licensing administration in 2007 (especially automatic  export licences) compared to 2005. What is the 
reason for such increase? What criteria must be met for applications to be approved? 
Answer  
 Automatic export licences are administored as a me ans to monitor export flows and collect export 
statistics in a timely and accurate manner. Please refer to the specific regulations for the criteria 
contained therein. 
 
Japan Question 32 
 
The Chinese Government has decide d not to largely expand steel production facilities in total, by 
carrying out approval of new facilities and elimination of old-fashioned facilities at the same time, in 
accordance with the Steel Industry Development Polic y determined in July, 2005. Nevertheless, the 
volume of crude steel production has increased gr eatly, from 350 million tons in 2005 to 490 million 
tons in 2007. Japan would like to ask how the Ch inese Government will maintain a balance between 
approval of new facilities and elimination of old-fashioned facilities.  
Answer
 
 
China’s steel industry is developing rapidly. Our ai m is to ensure the sustainable, energy-efficient 
and environmental-friendly development of the steel  industry. There are no specific limit on total 
output. 
 
Japan Question 33  
The Chinese government has implemented a reduction of  the VAT rebate rate and the introduction of 
an export license for iron and steel products, for the purpose of reducing exports. Japan would like to ask what kind of steps China intends to carry ou t in the future if steel exports increase again. 
 Answer
 
 Currently the steel exports are much more stable now.  We will monitor the trade flows carefully  
before we decide to adopt any new measures. 
 
Canada Question 1  
The Secretariat Report notes that China has adopted measures to increase the alignment of its national 
standards with International Norms, and provid es specific examples with respect to SPS measures. 
Would China provide similar examples for how it is  working towards aligning TBT related standards 
with International Norms? 
 
Answer
 
 In TBT area, China uses international standards or  relevant parts of them as a basis for their 
technical regulations to align its TBT relat ed standards with international norms. 
 WT/TPR/M/199/Add.1 
Page 302  
 
  Canada Question 2 
 
"Several regulations and rules have been introduced  or amended with a view  to further liberalizing 
foreign direct investment and establishing a more  rules-based and predictable business environment 
for foreign investors." What specific steps have been  taken by China to liberalize and promote foreign 
direct investment in China?  
 
Answer
 
 China welcomes foreign direct investment both in the form of greenfield investment as well as 
merger and acquisition. Our policies on FDI are tr ansparent and simple. Approval of FDI projects 
is, to a large extent, decentralized.  
 
Canada Question 3 
 
Paragraph 20 notes that provinces, autonomous re gions, municipalities directly under the Central 
Government, and certain large cities may formulate local regulations and rules that fit the specific 
conditions and characters in the respective areas.  How far does the Central Government’s power 
extend vis-à-vis local governments in provinces, autonomous regions, and municipalities in ensuring 
observance of obligations set out in internatio nal agreements, such as bilateral investment 
agreements? 
 
Answer
 
 Trade policies are administered in a uniform ma nner across China. The laws, regulations and 
rules formulated by the central go vernment prevail over local regulations. 
 
Canada Question 4 
 
How does the Central Government ensure observan ce of obligations, including those related to 
dispute settlement, that are set out in such international treaties?   Answer
 
 China is always responsible to its international obligations. 
 
Canada Question 9 
 Paragraph 32 lists some of the tr ade-related laws and regulations th at have been adopted or amended 
during the review period, including the Company Law and the Regulations on the Administration of 
Company Registration. Do these laws apply to the admission and operation of foreign investments in 
China? If so, what do they cover?  Answer
 
 Please refer to the specific law and regulations. 
 
Canada Question 10 
 It is noted that one of the central government ag encies which has an influence on trade policy is the 
National Development and Reform Commission (NDRC). We understand the NDRC has recently 
undergone some important internal changes. How will these changes impact the way in which NDRC 
views its future role in the mining sector, the st eel sector and in regard to foreign investment?    WT/TPR/M/199/Add.1 
 Page 303 
 
 
  Answer  
 The detailed new role of NDRC regarding mining, steel sector and foreign investment will be announced once the government re structuring is completed.  
 
Canada Questions 11, 12, 13  
Paragraph 78 states that the "Interim Measures for the Administration of Examining and Verifying 
Foreign Investment Projects based on the Decision and on the Administrative Permission Law is the 
main regulation stipulating exam ination and approval procedures for FDI in China; the Interim 
Measures entered into force on 9 October 2004. What are the criteria for the admission and 
establishment of FDI in China? Are these criteria, policies, and regulations publicly available to 
foreign investors? If so, where can they be found? Are the criteria- both for the admission of investments and the classification of the projects- a pplied equally to domestic investors as to foreign? 
If not, what are the key differences? 
 
Answer
 
 Please refer to the relevant regulations. 
 
Canada Question 14 
 Paragraphs 75 and 76 outline some criteria and re quirements with respect to each category, for 
example, that "foreign investment in the restrict ed category may be regarded as permitted, if export 
sales are over 70% of total sales of the product". What other performance requirements are imposed on foreign companies in China? Are there local content requirements in order to qualify for a 
"permitted or encouraged" classification? 
 
Answer
 
 The above-mentioned performance re quirement has been eliminated. 
 
Canada Question 31  
Could China provide further elaboration on the difference between mandatory and voluntary 
standards? What are the differences in the pro cess of development of the two types of standards? 
Have all the mandatory standards been notified to the WTO TBT Committee as mandatory technical 
regulations? No mention is made in the section "v iii) Standards and other technical requirements" of 
China’s TBT Notification Authority or Enquiry Point.   
Answer
 
 Mandatory standards must be complied with while voluntary standards are voluntary for 
compliance. China makes its notifications in a manner consistent with its WTO obligations.  
 
Canada Question 32 
 
Could China explain how authorities (e.g. WTO Notification Authority/Enquiry Point) monitor the creation or modification of TBT measures in its country in order to determine whether a WTO 
notification is required under the transparen cy obligations of the TBT Agreement?  
 WT/TPR/M/199/Add.1 
Page 304  
 
  Answer
 
 The Chinese government specifically issued a St ate Council document (the 50th in 2002) requiring 
relevant government agencies to fulfil the tr ansparency obligation under the WTO agreements, 
including the obligations of making notific ations and answering enquiries under the TBT 
Agreement. Relevant government agencies have  been working together to enhance their 
understanding of these obligations and the way of ha ndling notifications. In this regard, intensive 
training has been organized. Aside from that , the Ministry of Commerce alerts other relevant 
government agencies to comply with transparen cy obligations under TBT agreement when drafting 
regulations. The experience of China’s notificatio n in recent years has shown that this mechanism 
has worked well. At the 5th special meeting of information exchange of WTO/TBT committee, the 
Chinese expert shared China’s experience with other Members.   The Chinese government attaches great importa nce to the notification and transparency 
obligations under TBT and SPS agreements. We have established TBT notification and Enquiry 
points in AQSIQ. A great deal of human and fina ncial resources have been devoted to deal with 
information distribution, internal coordination, te chnical formatting of notification and translation 
related to TBT/SPS notification and enquiry obligatio ns. Still, this is a great challenge to all 
Members. China as a developing country has made  great efforts in fulfilling its transparency 
obligations following China’s accession to WT O. Till now, we have made around 400 TBT 
notifications to the WTO. China will continue its efforts in fulfilling its obligation of transparency 
in accordance with the rules and requirements under the TBT Agreement. 
 Canada Question 33  
Could China provide the mechanism, including appli cable interagency/inter-ministerial collaboration, 
for the preparation of China’s TBT notifications?  
 
Answer
 
 The Chinese government specifically issued a St ate Council document (the 50th in 2002) requiring 
relevant government agencies to fulfil the tr ansparency obligation under the WTO agreements, 
including the obligations of making notific ations and answering enquiries under the TBT 
Agreement. Relevant government agencies have  been working together to enhance their 
understanding of these obligations and the way of ha ndling notifications. In this regard, intensive 
training has been organized. Aside from that , the Ministry of Commerce alerts other relevant 
government agencies to comply with transparen cy obligations under TBT agreement when drafting 
regulations. The experience of China’s notificatio n in recent years has shown that this mechanism 
has worked well. At the 5th special meeting of information exchange of WTO/TBT committee, the 
Chinese expert shared China’s experience with other Members.  
 
Canada Question 35 
 
The Secretariat notes that an enterprise is encouraged  to adopt national, sectoral, or local standards if 
they are available. Could China advise whether or not an enterprise is required to adopt (available) 
national standards? Would China advise what course of action the SAC might take if an 
enterprise/local municipality develops its own sta ndard when a national standard is available? 
 
Answer
 
 There are 4 types of standards: national standards , professional standards, local standards and 
enterprise standards.   WT/TPR/M/199/Add.1 
 Page 305 
 
 
  National standards: the technical requirements th at need to be uniformly applied nationwide.  
Sectoral standards:  Where in the absence of na tional standards, techni cal requirements for a 
certain sectoral need to be unified; the sectoral standards are formulated and shall be phased out 
uponce the publication of national standards.  
Local standards: Where, in the absence of both nati onal and sectoral standards, safety and sanitary 
requirements for industrial products need to be unified within a province, an autonomous region or a municipality directly under the Central Government , local standards are formulated, and shall be 
phased out upon publication of th e national or sectoral standards. 
 
Enterprise standards: Where, in the absence of both national and sectoral standards for products 
manufactured by an enterprise, standards for the enterprise are formulated to serve as the criteria 
for production. According to relevant Chinese legi slation, local standards can be  formulated where there is no 
national or sector standards but there is need to have the uniform requirements in provinces, 
autonomous regions or municipalities directly un der central administration. Enterprise must 
organize its production based on a standard which must not be lower than a relevant mandatory standard available. When the former is not ava ilable, enterprise formulates its own standards. 
 Canada Question 38  
Could China advise if foreign based conform ity assessment bodies can obtain accreditation by the 
Certification and Accreditation Administration of China (CNCA) to operat e in China as designated 
certification bodies?  
 
Answer
 
 
For more information, please refer to the releva nt WTO documents on China’s accession to the 
WTO. 
 
Canada Question 39 
 
China is a participant in a number of accreditati on based MLA. To what extent does China recognize 
test and certification results from conformity assessment bodies which are accredited by other MLA participants?   
Answer
 
 
It depends on China’s commitments in relevant MLA. 
 
Canada Question 40 
 
Could China explain how it is implementing the Cross Frontier Accreditation policy of ILAC and IAF? 
 
Answer
 
 China implements the Cross Frontier Accreditation policy of ILAC and IAF in a manner consistent 
with its relevant international obligations.  WT/TPR/M/199/Add.1 
Page 306  
 
  Canada Questions 41, 42, 43 
 
Although China has participated in the devel opment of the APEC TEL Mutual Recognition 
Arrangement (MRA) for conformity assessment of telecommunications equipment, China has not 
implemented this MRA yet. This means that supp liers of telecommunications equipment must send 
samples to China for testing. When will Chin a implement the APEC TEL MRA? The Secretariat 
notes that the CNCA accepts certification, test and examination results of foreign certification and testing bodies. Would China confirm that this is th e case for all sectors? Are there any sectors where 
China would not accept test results from accredite d foreign certification and testing bodies? Could 
China confirm if that is the case for the Inform ation Technology (security hardware and software) 
sector? Would China explain under what circumstances the CNCA might not accept test results from 
accredited foreign certification and testing bodies from certain sectors?  
Answer
 
 
Please refer to relevant legal documents on China’s accession to the WTO. 
Canada Questions 45, 46  
All medical devices imported into China must obtain a registration certificate from the Chinese State 
Food and Drug Administration (SFDA). A number of Canadian medical device manufacturers that 
have filed data with the SFDA have been waiting more than two years for SFDA regulatory approval 
and registration of products previ ously approved for sale in Canada. Th is delay is considerably longer 
than for products that have a CE mark or US Food and Drug Administration (FDA) approval, despite 
the fact that Canada's medical device regulatory system is recognized as world-class and Canada, like the US and Europe, is a member of the Global Harmonization Task Force established to promote 
international harmonization of medical device regulations. Why does the Chinese SFDA not treat 
medical devices approved by Health Canada in the same manner as medical devices that have been 
approved in Europe or the United States? Is there a difference in the SFDA's perception of Canada's 
medical device regulatory system or quality standards vis-à-vis  the system and standards in these 
other jurisdictions?   
Answer
 
 
The registration system imposed by SFDA aims to ensure the quality of medical devices and protect 
human health and safety. SFDA applies the system  equally to all medical devices, regardless of 
their origin.  
Canada Question 47 
 
In this report, the Secretariat notes that the total value of government procurement reached 
Y 368.2 billion in 2006. In China’s first Trade Po licy Review, the Secretariat indicated that the 
government procurement total did not include pr ocurement by state-owned enterprises, public 
utilities, and defence-related organs . What procurements are included in the Y 368.2 billion total for 
2006? Does it include all goods, services and construction services at all levels of government (central 
and local)? Does it include procurement by stat e-owned enterprises, public utilities, and defence-
related organs?  
Answer
 
 
The scope of government procurement is stipul ated in the Government Procurement Law. It 
includes goods, service and construction procured  by central and local government, excluding 
SOEs and defence-related procurement.   WT/TPR/M/199/Add.1 
 Page 307 
 
 
  Canada Question 48 
 
The Secretariat notes that China’s Government Proc urement Law provides that the Government shall 
procure domestic goods, projects and services, with  limited provision for purchasing from foreign 
suppliers on an exceptional basis. Please explain the steps China intends to take to open its 
government procurement market to foreign suppliers. 
 
Answer  
 China has made the commitment to join the GPA in  its Accession working party report. Now China 
is negotiating the terms and conditions for join ing the GPA. China’s government procurement 
market will be more liberalized after it joins the GPA.  Canada Questions 49, 50, 51  
The Secretariat notes that for items listed in the Centralized Procurement Catalogue, purchases must 
be carried out by centralized procurement agencies,  which are "non-profit legal persons" that may be 
at any level of government. Please list the names of  all of the centralized procurement agencies and 
describe their role and functions in greater detail.  What does the status of "non-profit legal persons" 
mean? Are these centralized procurement ag encies government agencies? Please explain. 
 Answer
 
 Non-profit legal person is an agency carrying out government procurement activities on behalf of 
the government.  
Canada Questions 52, 53 
 
The Secretariat notes that Article 11 of the Government Procurement Law and the Rules on 
Information Openness require that procuring entities must announce government procurement and 
bidding information in media in a timely and sta ndard manner. Does the Law or the Rules set out 
minimum content requirements for the published no tices or tender documents? If so, what are those 
minimum content requirements? What are the rules in terms of publication period? Is the notice 
published for the full bid solicitation period?  
Answer
 
 
Please refer to Administrative Measures for government Procurement Information 
announcements. 
 
NAFTA Question 1.a, 1.b, 1.c 
 
The Secretariat’s report states in paragraph 82 of Part IV that in 2006 state-owned enterprises (SOEs) accounted for 43 percent of total steel output. Please cl arify China’s definition of an SOE. Does this 
definition include all enterprises owned and controlle d by government at the central or sub-central 
level? Has the proportion of total output accounted for by SOEs changed, and wh at role, if any, does 
the government have in influencing any changes? Has China issued any directives or established any 
policies or plans for the privatization of state-ow ned steel enterprises? If so, please describe them.  
 WT/TPR/M/199/Add.1 
Page 308  
 
  Answer
 
 Please refer to the State-owned Assets Supervisi on and Administration Commission of the State 
Council for the list of state-owned enterprise and the policies regarding state-owned enterpriese. 
The number of SOEs has been reduced in the past few years.  
 
NAFTA Question 2.a, 2.b: It has often been observed that th e Chinese steel sector is highly 
fragmented, with few large, advanced steel pr oducers and a mass of small and medium-sized 
steelmakers. These circumstances have been identifie d as one of the main causes of the unprecedented 
expansion of China’s steel production over the past several years. Consolidation, elimination of the 
most inefficient and polluting mills, and the reducti on of the number of steel makers are among the 
chief stated objectives of China’s Steel Policy of 2005. What progress has China made in meeting 
these objectives, and what support does the Governme nt provide in furtherance of these goals? Please 
provide any updates to the 2005 Steel Policy and detail what closures have occurred under NDRC’s 
plans to eliminate Aobsolete @ mills. Please also explain whether any of this information is readily 
available on the Internet.  
Answer
 
 
To restrict the extraction and production of reso urce-intensive commodities or products involving 
high pollution and high energy consumption,  China has taken measures including raising 
standard and qualification requirement for market  access, increasing resource tax and enhancing 
surveillance for environment prot ection, which has already produced positive results. In 2007, 
China has eliminated 46.59 million tons of iron-m aking capacity and 37.47 million tons of steeling-
making capacity reduced the consumption of stan dard coal and emission of sulphur dioxide by 
17 million tons and 90,000 tons respectively. In addition, approval of investment projects are 
subject to strict environment assessment and the policy of "regional invest ment restriction" for 
purpose of environment protection is implemented. 
 
NAFTA Question 3  
The report states in paragraph 83 of Part IV that  there is an "over-investment" in China’s steel 
industry and that the Government has adopted a numbe r of measures to curb investment in the sector, 
including closing down obsolete production, adju sting VAT rebates and export taxes on steel, and 
setting differential rates for electricity. Please describe the results of these efforts and the current 
situation in regard to "over-invest ment" in the steel industry, particularly in light of the continued 
rapid growth both in China’s steel production and exports since 2005. Please address in your response 
the success and efforts of FA GAI Gong Ye (2006)  No. 1084 regarding the Notice on Total Output 
Control, Elimination of Backwardness, Structural Ad justment of Iron and Steel Industry issued by the 
NDRC. The report states that in principle new steel projects will not be approved and smaller 
producers are to be closed down or acquired. Please explain the approval process and describe its 
effectiveness in lowering industry capacity.  Pl ease provide the NDRC’s listing and specific details 
with respect to the steel projects Aapproved by the Government of China since the National Steel 
Policy was put in place in 2005.Please provide full details of Acapacity allotments as a result of 
closed-down enterprises and how the capacity allo tments are awarded or assigned. Please provide 
details on Acontract obligations process with respect to st eel enterprises. The report refers to the fact 
that since June 2004, iron and steel manufacturers ha ve been classified by the Government of China 
into three categories: Ato be eliminated, to be restricted, and Ato be encouraged. Please indicate on 
what criteria these classifications are based. Please indicate which facilities fall into these categories.  
 
Answer
 
 Please refer to question 2.   WT/TPR/M/199/Add.1 
 Page 309 
 
 
  NAFTA Question 4 
 
The report indicates in paragraph 86 of Part IV that the use of domestic produced equipment and 
technology is encouraged by the Steel Policy and that the government provides assistance to steel 
firms that use newly developed domestic equipment and to exporte rs of steelmaking equipment. 
Chinese authorities say no specific measures have been  adopted to implement this policy; the policy 
however remains in place. Please detail how China facilitates the adoption of domestically produced 
equipment in the steel sector and explain how this aspect of the steel policy is affected.    
Answer
 
 
The Steel Industry Development Policy provides ma cro guidance from the government in steel 
industry. The document is not compulsory and does grant non-discriminatory treatment to domestic 
and imported equipments. 
 
NAFTA Question 5.a, 5.b, 5.c  
The report in several places refers to import duties, export taxes and quotas, import and export 
licenses, and VAT rebates on steel products. Pleas e explain the current import and export measures 
for steel and their purposes.Please indicate the reasons  and rationales for changes that were made in 
product coverage of these measures since 2006. Can the Chinese authorities comment on recent 
allegations that export measures are being used by China to influence, if not ensure, the export of 
higher value steel products?  
Answer
 
 
Steel exports are now subject to export licensing and export tax. Product co verage are adjusted to 
make our export control more effecitive and oriented  towards the goal of en vironmental protection. 
The measures to curb excess export in some product  might have an influence on export structure of 
steel products. 
 
NAFTA Question 6 
 Please identify and explain all quotas, duties, taxes or  other restrictions imposed by China on exports 
of steelmaking raw material inputs to steel production since 2005. In addition, specifically with regard 
to export quotas, please explain China’s justifica tion for maintaining them in light of China’s 
obligations under Article XI of the Gene ral Agreement on Tariffs and Trade 1994.  
 
Answer
 
 Please refer to China’s notification to the WTO.  China’s export quotas are administroed in a 
manner consistent with China’a foreign trade law and WTO rules. 
 
NAFTA Question 7  
Are there any internal restrictions on the sales and distribution of steel or steelmaking raw materials 
within China? If so, please describe them. 
 
Answer
 
 No. 
 WT/TPR/M/199/Add.1 
Page 310  
 
  NAFTA Question 8.a, 8.b 
 
China continues to restrict foreign investment in  the steel sector as detailed in the Steel Policy of 
2005. Please explain the basis for this restriction. Please detail why some proposed steel investments by foreign steel enterprises have been approved by  the NDRC and others have been rejected since 
2006. 
 
Answer
 
 China’s investment policy in industrial sector are fully in compliance with WTO rules and China’s 
accession commitments. The NDRC grants approval of inverstment project on a case by case basis.  
NAFTA Question 9.a, 9.b, 9c, 9d 
 
The report indicates in paragraph 84 of Part IV th at the Chinese Iron and Steel Industry Association 
(CISA) functions as a bridge between its members and the Government of China.Please explain what 
portion of China’s steel production is accounted for by CISA members and what proportion of CISA members are SOEs. What role has CISA played in ne gotiations for iron ore pric e contracts in the past 
two years? What role has CISA played in developing the NDRC list of steelmaking facilities to be closed? Please explain why only enterprises with a pr oduction capacity of one million tons are eligible 
to be part of CISA? Also, please confirm that ente rprises with foreign investment can join CISA if 
they are otherwise eligible and wish to do so. 
 
Answer
 
 CISA is an industrial association. The ru les are set by its members out of commercial 
consideration. Please contact CISA  for the relevant information. 
 
NAFTA Question 10 
 
Please describe the steps taken by the Chinese Government to improve the environmental 
performance of the Chinese steel industry, includ ing plans or efforts to reduce greenhouse gas 
emissions.  
 
Answer
 
 To restrict the extraction and production of reso urce-intensive commodities or products of high 
pollution and high energy consumption, China has taken measures including raising standard and 
qualification requirement for market access, increasing resource tax and enhancing surveillance 
for environment protection, and all these effort s have already produced positive results. In 2007, 
China has eliminated 46.59 million tons of iron-m aking capacity and 37.47 million tons of steeling-
making capacity reduced the consumption of stan dard coal and emission of sulphur dioxide by 
17 million tons and 90,000 tons respectively. Mo reover, production capacity of 21.57 million Kw of 
small coal-base power plants was eliminated , 11200 small coal mines were shut down and 
87 million tons of cement produc tion were eliminated. In addition, approval of investment projects 
are subject to strict environment assessment and the policy of "regional investment restriction" for 
purpose of environment protection has been impl emented. All these measures have worked together 
to contain the growth of investment in these industries. So far 12 projects have been shut down 
permanently and 47 projects, which were built w ithout approval, have been either stopped or 
suspended from production. 
  WT/TPR/M/199/Add.1 
 Page 311 
 
 
  Canada Question Add. 1 
 
Several of China's answers, including "Canada Qu estion: 54", clearly state the 2007 absolute 
production figures on coal-based power, including the re duction of coal mines and reduction in coal-
based power plant output. Canada would be interested to know what the net figures are on coal 
production and capacity in China as a whole (as opposed  to how much capacity has been shut down).  
How does this net figure relate to the reduced le vel of domestic production a nd consumption which is 
needed to justify reduced exports of energy intensive and polluting goods?   
Answer
 
 
Environmetnal protection is a comprehensive pr ojects, involving domestic and export control. 
Generally, domestic comsumption and export have been reduced after measures have been taken 
on a number of products. Net figures in domes tic products are not availalbe at present. 
 
EC Question 24  
According to the Secretariat's report, "since its previous Review, while China has not made any 
notification to the WTO regarding its state trading activities, the number of products subject to state 
trading has apparently  been reduced. The Repor t also indicates that "MOFCOM issues and adjusts 
annually the lists of goods subject to state trading and of authorized state trading enterprises". Which 
are the criteria used to adjust the lis t of goods subject to state trading? 
Answer
 
 The list of state trading products as contained in Annex 2.1 and 2.2 of China’s accession protocol 
remains unchanged. 
 
EC Question 41 
 
The EC is concerned that China requires, for importe d cosmetics, a registration with the Ministry of 
Health while domestic products are subject to a simpler regime. Is China currently looking at 
simplifying and harmonising the importation of cosmetic products?  
 
Answer
 
 The registration system aims to achieve legitimat e objectives such as protecting human health and 
it will not constitute unnecessary trade barriers to trade.  
 
EC Question 42 
 
For Active Pharmaceutical Ingredients (API), testi ng and standards are more stringent and costly for 
imported goods compared to domestic products. In the EC's view, this is a discriminatory procedure. 
Could China indicate when it does intend to apply the same rules to both imported and locally 
produced Active pharmaceutical ingredients? 
 
Answer
 
 Testing and standards on API are applied non- discriminately to imported and domestic products 
and they serve legitimate objectives and purposes such as protecting human health.   WT/TPR/M/199/Add.1 
Page 312  
 
  EC Question 43 
 
Medicinal products registration timelines are extr emely long for innovative drugs produced outside 
China. For example, it typically takes 6 to 12 mont hs to obtain clinical trial approval in China, as 
clinical trial approval can usually be obtained w ithin 3 months in other major markets. Does China 
have any plans to reduce medicina l products registration timelines? 
 
Answer
 
 The clinical trial approval is necessary to achi eve legitimate objectives such as protecting human 
health and China ensures that the registration system is least trade restrictive.   
EC Question 44 
 
There is a lack of transparency and recogniti on of innovation in Chinese Drug pricing policies and 
rules. For example, in China, the price of the orig inator medicine ties to the cost-basis of its generic 
version plus a small premium. This approach is c ontrary to international practices where the price of 
generics is linked to the originator medicine. In  addition, the National Reimbursement Drug List 
(NRDL) is not updated annua lly and therefore, most innovative products are not included. Does China 
inform whether it plans to regularly up-date the ND RL and whether it plans to transparently recognize 
innovation in drug pricing policy? 
 
Answer
 
 
Drug is subject to state pricing in China, whic h is consistent with China’s accession commitments. 
China is undertaking a reform in the medi-care syst em. The pricing policy of medicine is part of 
that reform.  EC Questions 46, 47 
 The EC remains highly concerned about redundanci es in registration processes regarding medical 
devices. Two types of mandatory registration with the same scope of requirements are required from 
SFDA and AQSIQ offering no additional safety be nefit for patients and users. Additionally 
registration validities are limited in time and do  not correspond between both requirements. Could 
China inform on whether the redundancies above will be abolished, which would be in line with 
Global Harmonisation Task Force (GHTF) guideli nes, and inform on how Decree 276 possibly 
contributes to resolving this problematic issu e?Could China inform on when Decree 276 will be 
notified to the WTO TBT Committee, considering it c ontains significant technical regulation affecting 
trade?   Answer
 
 The Chinese current registration system on medica l devices is consistent with international 
common practice. This system imposes systematic  assessments and reviews on designing, 
manufacturing process, supervision on measurem ent and control of unqualified products. Then 
approval on marketing and using will be decided to en sure users’ safety. In th is process, efforts are 
made to avoid unnecessary obsta cles to international trade. 
 
EC Question 49 
 
It is stated that the exemption of CCC does not m ean exemption from import inspection. Could China 
explain what such import inspection entails? 
  WT/TPR/M/199/Add.1 
 Page 313 
 
 
  Answer  
 The Compulsory Product Certification (CCC) Syst em is developed and im plemented equally to 
domestic and imported products. The purpose of th is system is to ensure safety and security of 
covered products to human beings and the environment. Also, the Secretariat report 
(WT/TPR/S/199) has provided more de tailed information on CCC system. 
 
EC Question 50 
 
Could China also explain what procedure applies when products or components are imported together 
with another product in which they should be incorporated ? 
 
Answer
 
 Please specify the cases so that we can give explanation. 
 
EC Question 51 
 
Could China explain what means "wholly foreign-i nvested" and foreign-invested joint-ventures?  
 
Answer
 
 
Please refer to the Law on foreign-invested join t ventures and the Law on wholly foreign-invested 
enterprises.  
 
EC Question 52 
 Could China confirm whether foreign-owned certi fication bodies and laboratories established in 
China can undertake certification, tes ting and inspection work under the CCC? 
 
Answer
 
 
Please refer to relevant WTO documents on Ch ina’s accession to the WTO or go to CNCA’s 
website: www.cnca.gov.cn 
 
EC Question 53 
 
Could China indicate whether foreign-based certifi cation bodies may be accepted to undertake testing 
work or inspection on behalf of Chinese certification bodies?  
Answer
 
 Please refer to relevant WTO documents on Ch ina’s accession to the WTO or go to CNCA’s 
website for information: www.cnca.gov.cn  
EC Question 56 
 
The Report states that China's quarantine system ha s remained largely unchanged during the review 
period. Does China consider extending the alrea dy existing protocols for one country to other 
countries with similar sanitary conditions?  WT/TPR/M/199/Add.1 
Page 314  
 
  Answer
 
 Due to the difference of disease and risks born by different types of animals and animal products, 
different measures on processing and managing exis t, which makes it necessary for risk analysis 
on individual members. This is also a co mmon practice among other Members. We welcome 
bilateral cooperation with Members.  
EC Question 57 
 
Does China consider entitling National Authorities to  approve the lists of companies allowed to 
export to China? 
 
Answer
 
 Please specify the context of the question. 
 
EC Question 58 
 
Will China take measures to e liminate the duplicity of measures for one same purpose on the 
Protocols?  Answer
 
 China takes measures necessary to achieve its legitimate objectives and minimizes their negative effects on trade. 
 
EC Question 59  
As regards labeling, the EC has on several occasions raised concern with Chinese labeling 
requirement, in various sectors, about lengthy registration procedures and frequent changes in 
requirements. Does China have any current or upc oming work to assess its labelling requirements, 
with the aim of streamlining procedures and simplifying requirements?  Answer
 
 Labeling requirement is formulated to ensure co nsumers and other parties’ awareness to products 
and it is helpful to protect human health and safety. Also, China will assess labeling requirements 
according to the need to  regulate in practice. 
 EC Questions 63, 64  
China currently applies export quotas on silk, bauxite, light (dead) burned magnesium, talc lump 
(powder), fluorspar lump (powder), rare earth, co al, coke, crude oil, processed oil, paraffin wax, 
tungsten, indium, molybdenum, silicon carbide, sawn timb er, silver, platinum, zinc and zinc alloy, tin 
and tin alloy, antimony. Export quotas are genera lly prohibited under Article XI of the General 
Agreement on Tariffs and Trade 1994. In addition, Ch ina applies export tariffs to more than 334 tariff 
lines (at 8 digit level). Section 11 .3 of Part I of China's Protocol of Accession clearly sets out a 
commitment incumbent upon China not to impose export tariffs on any goods not appearing on the 
list of goods subject to export duty in Annex 6 of it s Protocol of Accession. Annex 6 only lists a total 
of 84 products at 8 digit level. For each of the tariff lines on which export quotas are applied, please 
indicate the legal basis and possible justification fo r such quotas. For each of the tariff lines not listed 
in Annex 6, please indicate how China considers this  to be compatible with its WTO commitments. 
  WT/TPR/M/199/Add.1 
 Page 315 
 
 
  Answer  
 China applies the export quotas for the purpose of environmental protection and resource conservation, which is consistent with WTO rules. Export taxes are levied on a temporary basis in a 
manner consistent with WTO rules. 
 
EC Question 81 
 
The Report states that the government aims to ac hieve certain objectives by promoting or reducing 
investment in certain sectors iden tified in the Catalogue of Guidance Regarding Industrial Structural 
Adjustment, issued by the NDRC in December 2005, together with  Major Measures to Promote the 
Adjustment of Industrial Structure. Does China c onsider that there may be a perceived risk of 
regulatory uncertainty by companies working in Chin a because of shifting particular sector from one 
category to other?  Answer
 
 In terms of change in the regulatory system, trans itional measures would apply to business affected 
by the new measures. 
 
EC Question 82 
 The Report states that despite the reform, con cerns remain over a continued misallocation of 
resources:  although SOEs accounted for some 35% of GDP, their borrowing from domestic banks accounted for more than half of total lending by  these banks. Private and foreign firms operating in 
China are able to achieve the same output as SOEs , by using less capital.What  are China's plans for 
addressing this situation? 
 
Answer
 
 China will continue it reform in the SOEs as well as the financial sector. The market access 
conditions for the private sector have been greatly imporoved and will be improved further with the 
deepening of reform. 
 EC Question 83  
The Report states that the Government intends to retain state ownership in seven "strategically 
important" sectors, including power generation and distribution, oil and petrochemicals, 
telecommunications, coal, aviation, and shipping, would remain under state control. Could China provide information on which grounds it considers a sect or to be strategic, in particular, taking into 
account international experiences?  
Answer
 
 
These seven sector plays a fundemental role in Ch ina’s economy and therefore are consisdered to 
be of strategic importance. 
 
EC Questions 124, 125 
 Under the "Regulation of Certification and Accr editation" and "Regulation of Certification for 
Automotive Products", automotive products must obta in a China Compulsory Certificate (CCC) mark 
and are subject to random inspection at the border.   Each vehicle will then be issued with an 
"Inspection and Quarantine Certificate for Enteri ng Commodities" and a "Car Attaching Inspection WT/TPR/M/199/Add.1 
Page 316  
 
  Certificate"; Do the Chinese authorities intend to facilitate the homologation process? Provided that 
there are a limited number of Chinese certification enterprises, do the Chin ese authorities intend to 
enlarge the number and nationa lity of certifying enterprises? 
 
Answer
 
 
the Secretariat report (WT/TPR/S/199) has provid ed abundant information on the CCC system.The 
system is developed and implemented equally to domestic and imported products. The purpose of 
this system is to ensure safety and security of covered products to human beings and the 
environment. The best effort has been made by the Chinese Government to reduce its negative 
effect on trade to the least.  
EC Questions 128, 129 
 
Rising duties have not slowed down Chinese imports of rough timber.  What are the essential lines of China's policy in the wood and paper sector?  Which rules govern investments in the sector? 
 
Answer
 
 In 2006, China made an adjustment to its taxation policy and levied consumption tax and reduced 
export tax rebate on some wood products with a view to achieving the goals of saving forest 
resources and encouraging compreh ensive utilization of timber.  
 
Chile Question 
 
According to paragraph 56, "classified" information is  not notified to interested parties.  Are they 
required to furnish a non-confidential summary of such  information, as stipulated in Article 6.5.1 of 
the Agreement on Implementation of Article VI of the GATT 1994?  
Answer
 
 
Yes.  
Chile Question 
 
Paragraph 57 notes that "in special circumstances"  provisional measures may be extended to nine 
months.  Is it clearly specified that this requires th e request to be made by the exporter and when the 
authority applies a duty lower than the margin of dumping (Article 7.4 of the Agreement)? 
 
Answer
 
 China’s anti-dumping regulations and practices re garding provisional measures are consistent 
with WTO rules.  
Turkey Question 1 
 
What kind of system or procedure does the Government of China apply to confirm the inputs consumed in the production of the exported products and their amounts? 
 
Answer
 
 Please specify the context of the question. 
  WT/TPR/M/199/Add.1 
 Page 317 
 
 
  Turkey Question 2 
 
Could China please explain what are the requirements to benefit from the export finance and 
insurance program implemented by Export-Import (EXIM) Bank of China? Does the EXIM Bank 
provide more favourable export financing terms to  certain enterprises? Could China provide the 
percentages of the export finance provided by EXIM Bank in last 5 years in terms of maturity (For 
instance; short-term, medium -term, long-term credits)? 
 
Answer  
 
The EXIM Bank provide export financing to ent erprises on the basis of commrecial terms and 
conditions. Please contact the EXIM band for the rel evant information regarding its performance. 
 
Turkey Question 3 
 
Could China please explain the criteria for receiving benefits from the International Market 
Exploration Fund for SME’s?  
Answer
 
 Pease refer to the Regulation on Interna tional Market Exploration Fund for SMEs. 
 
Chinese Taipei Question 
 
Figure 1.2 on page 20 shows that 9.3% of Chin a’s total imports were from free zones in 2007. Could 
China please clarify its definition of a free zone, and describe how it decides that imports are from 
free zones? 
 
Answer
 
 To the extent possible, all types of inward and outward movement of goods through a country or territory including movements through customs wa rehouses and free zones. Free zone generally 
refers to processing zone wher e imports and exports could entry without duty. For further 
explanations, please see UN international trade sta tisics, concepts and definitions, Series M,N 52, 
revision 2.  
Chinese Taipei Question 
 
Figure 1.2 (b) shows that the share of China’s tota l imports accounted for by imports from free zones 
increased by 2.4% between 2004 and 2007. This was a  faster growth rate than for imports from the 
Middle East (1.2%) and Africa (1%), which are important sources of energy and raw materials. In 
terms of value, China’s trade deficit with free zon es also increased dramatically over the same period, 
from US$ 38.8 billion in 2004 to US$ 85.7 billion in 2007, to become its largest source of trade 
deficit. Could China please describe the fa ctors that have caused such significant growth in free-zone 
imports? 
 
Answer
 
 
Since goods could enter free-zone duty free, a lot of foreign enterpries would first ship their goods 
to the free-zone and after simple manufactruing process export them into China. 
 WT/TPR/M/199/Add.1 
Page 318  
 
  Chinese Taipei Question 
 
In its Protocol on the Accession of the People’s Republic of China, China committed to providing a 
reasonable period for comments to the appropriate au thorities prior to the implementation of all laws, 
regulations and other measures pertaining to trade in goods, services. In 2007, China issued numerous 
trade-related measures in close succession that, in our view, could have a significant influence on its 
investment and trade environment. These measure s include: "Catalogues of Restricted Commodities 
in Processing Trade", "Catalogues of Prohibited Commodities in Processing Trade", and "Catalogue 
for the Guidance of Foreign Investment Industries". We wonder whether a reasonable period for 
comment was provided to interested parties prior to  such measures being issued? If not, would that 
not be contradictory to China’s commitment?  
Answer
 
 China has given the oppotunity to representative en terpises of the relavant industry and allowed a 
transitional period for enterprises affe cted by the change of policies. 
 
Chinese Taipei Question  
The "Law of The People’s Republic of China on Employment Contracts" implemented in 2008 has 
had a significant impact on the operations of foreign businesses. Does China intend to review this law 
in the foreseeable future?  Answer
 
 
We will carefully follow the situation after the ne w law and listen to the opinions of different 
groups of people affected by it. 
 
Chinese Taipei Question 
 
The provisions in the Catalogue of Encouraged Fo reign Investment Industries , which entered into 
force on 1 December 2007, classify foreign investme nt projects into four categories - encouraged, 
permitted, restricted and prohibited. Does China have a plan to review the restricted and prohibited categories and, if so, what is the timetable? Does it also plan to re view its "Catalogue of Advantaged 
Industries for Foreign Investment in Central-Wester n China", which went into effect on 1st September 
2004 and, if so, what is the planned schedule?   
 
Answer
 
 The Catalogue of Encouraged Foreign Investment In dustries is reviewed periodically to take into 
account change in economic situation and developmen t priority. So far there is no timetable to 
revise the "Catalogue of Advantaged Industries for Foreign Investment in Central-Western 
China". 
 Chinese Taipei Question  
The Report mentions that the insurance costs are calculated by China’s Customs as 0.3% of the sum 
of cost and freight, for goods impor ted by land, air or sea, and as 1% if they are imported by rail or 
road. For transactions that do not involve an insu rance fee, would the above-mentioned amounts be 
included in the Customs’ calculation of import pr ices? Could China please clarify how the inclusion 
of this assumed insurance cost is consistent with the principle that the transaction value should be 
based on the price that is actually paid, or is payable? 
  WT/TPR/M/199/Add.1 
 Page 319 
 
 
  Answer  
 China’s custom valuation is consistent with WTO rules and WCO practises. 
 
Chinese Taipei Question 
 The Report mentions that there are 624 tariff lines subject to interim tariffs in China’s 2008 tariff 
schedule, effective from 1 January to 31 March 20 08. In addition, according to an "Announcement of 
the General Administration of Customs of the Peop le’s Republic of China" (No.\16 on 12 arch, 008), 
the expiry date of 1% interim tariffs fo r yellow soybeans was extended from 31 March to 
30 September, 2008. Could China please provide details regarding the status of the tariff rates of the 
remaining 623 tariff lines?      
Answer
 
 
Please refer to the Website of General Administra tion of Customs for the relevant information. 
 
Chinese Taipei Question 
 
By increasing the number of goods subject to export prohibition under "processing trade", China 
discourages the export of products using large amount s of raw materials for processing, products with 
low value-added, and products the manufacture of  which consume large amounts of energy or is 
highly polluting. Could China please indicate whether it intends to amend or modify its processing 
trade policies in the future? If so, what would be the possible direction and content of such 
modification?    Answer
 
 China would not frequently adjust it process trade policy in the future. 
 
Chinese Taipei Question 
 
According to the Report, some foreign-invested  enterprises (FIEs) may also be state-owned 
enterprises (SOEs). Does this mean that the FIEs can  invest in SOEs? If this is the case, for which 
industries would it be permissible, and what are the restrictions, if any?  
Answer
 
 
For the list of SOEs, please refer to website of the Supervision and Management Commission of the State Council. In practise, SOEs and FIEs could establish joint ventures. 
 
Chinese Taipei Question 
 
Could China please elaborate further on its measures relating to domestic price control and 
procurement by the State? 
 
Answer
 
 
Please refer to Annex 4 of China Accession Protocol. 
 WT/TPR/M/199/Add.1 
Page 320  
 
  Chinese Taipei Question 
 
We note that, in 2004, entering a new era, the Chinese government introduced direct subsidies to 
farmers, began to phase out agricultural taxes, and started subsidizing seed and machinery purchases. 
Could China please provide further information on  its measure relating to direct subsidies, as 
mentioned in paragraph 18? 
 Answer
 
 Please refer to Paragraph 36-38 of the S ecretariat Report, which provide more detailed 
introduction on the direct payment as mentioned in paragraph 18.   
Chinese Taipei Question 
 
As indicated in the Report, policy-making and the regulation of the energy sector in China is scattered 
between several institutions, and thus, policy-making,  implementation, supervision and regulation in 
this sector are uncoordinated and weak.  Although th e NELG was created in May 2005 to deal with 
the institutional weaknesses, it seems to have  had no impact on policy formulation and 
implementation. Could China kindly inform us of any meas ure that has been taken to tackle this 
problem? 
 
Answer
 
 The new Energy Bureau under the National Developm ent and Reform Commission is the main 
government agency responsible for China’s poli cy-making and regulation of energy sector. 
 
Chinese Taipei Question  
As indicated in the Report, despite attempts to promote competitiveness, four State-owned companies 
continue to dominate the Chinese oil market.  We would be interested in knowing how the Chinese 
government is dealing with the stifling competition in  the oil sector, which may be caused by state-
owned monopolies.  
 
Answer
 
 There are 4 major state-owned companies at the country-level and many private-owned oil 
companies in the Chinese oil market. With the liberalization in import and investment in oil 
project, the oil market is beco ming more and more competitive. 
 Chinese Taipei Question  
The Report mentions that in 2005 the State Counc il issued guidelines allowing private companies to 
invest in previously restricted sectors dominat ed by SOEs, like the oil industry. Moreover, the 
"Catalogue of Encouraged Foreign Investment Indu stries of 2007" allows for foreign investment in 
this area.  It seems, however, that oil exploration continues to be dominated by SOEs. Has China’s 
government adopted any methods or does it provide any incentives aimed at increasing private or 
foreign investments?  
 
Answer
 
 Please refer to the previous question.    WT/TPR/M/199/Add.1 
 Page 321 
 
 
  Chinese Taipei Question 
 
The Report indicates that processed oil products are pr iced based on the average price of international 
crude, plus "adequate" profit for re fineries as determined by the NDRC, import tariffs and cost of 
transportation.  How does the NDRC determine the "adequate" profit?  Are there any specific 
procedures and criteria for setting the prices?  
 
Answer  
 Processed oil is subject to state pricing in Ch ina, which is consistent with our accession 
commitments. Prices for oil are set at a level that benefits the oil companies as well as the country 
at large.  
Chinese Taipei Question 
 
End user tariffs are determined taking into account th e cost of electricity generation, the electricity 
loss during transmission, electricity transmission prices, and the "cost of government fund".  Could 
China please explain for us the "cost of government fund"?  
 
Answer
 
 Pricing of electricity is quite complicated. Governme nt fund is a general term which includes fund 
that government raised to build power station and el ectricity transmission grid as well as cost of 
government service in cities and rural areas. 
 
Japan Question 37 
 
Page 146, paragraph 153  While the listed Chinese financial institution is regulated as a Chinese 
financial institution although the comb ined equity investment of all foreign financial institutions in the 
listed Chinese financial institution exceeds 25%, the non-listed Chinese financial institution is 
regulated as a foreign-funded financial institution when  the combined equity investment of all foreign 
financial institutions in the non-listed Chinese fi nancial institution exceeds 25%. Please provide the 
rationale for the different treatment between liste d and non-listed Chinese fi nancial institutions and 
explain why a financial institution is considered as a foreign-funded financial institution with only 
25% low foreign equity. 
 
Answer
 
 The regulation was formulated by China’s ban king regulatory body in accordance with the 
prudential principle.  
 
Japan Question 39 
 
Page 151, paragraph 170  Please explain how Ch ina plans to implement Basel II for "other 
commercial banks" including foreign banks. 
 
Answer
 
 There are plans for implement II for "other comm ercial banks" including foreign banks by CBRC. 
The priciple of adopting Basel II at present stage for commercial banks including subsidiaries of 
foreign banks is voluntory. If a bank does not wa nt to change, it can choose to comply with the 
current stipulations set by the Chinese supervision authorities.  WT/TPR/M/199/Add.1 
Page 322  
 
  If the commercial banks want to adopt Basel II, they can submit applications after 2011. The 
precedure and formalities for approval are the same with the new capital agreement banks, 
Applications must be made 6 months befo re adopting the new capital agreement, and adoption 
could only proceed after the approval is granted. 
 
Japan’s Question 49  
According to the answer from China, China w ould welcome any comments from the Members on the 
draft Telecom Law. Therefore, Japan would like to  have more information on how to access the draft 
(such as URL), on the deadline and to which authority the opinions should  
be submitted.  Answer
 
 The Ministry of Industry and Information newl y created in March 2008 serves as the independent 
regulator of China’s telecom services. Chin a welcomes Japanese service providers to make 
comments or suggestions on the draft Telecom Law to the department in charge of policy and law 
under the Ministry of Industry and Information. 
 
Japan Question 52 
 Japan appreciates China’s clear answer on the regulatory scope of "Regulation on the 
Interconnections between Public Telecommunica tion Networks (Decree 9 of the Ministry of 
Information Industry)", which does include Leased ci rcuits, Frame relays a nd IP-VPN. However, we 
would very much appreciate if China could provide us  with the legal document that "the Ministry of 
Information Industry defines" as is stipulated unde r paragraph 8 of Article 2 of this regulation. 
 Answer
 
 Paragraph 8 of Article 2 of the Regulation on the Interconnections between Public Telecommunication Networks states that "other ne tworks that the Ministry of Information and 
Industry defines". This is a supplementary definition of new types of networks that might emerge in 
the future.   
Japan Question 54 
 
Japan is aware that conditions such as the obliga tion of establishing multiple  subsidiary companies 
were required when companies applied for a li cense of "Information services". Therefore, Japan 
would like to clarify whether or not there are offi cially such regulations when acquiring a license of 
"Information services" in China. Moreover, Japan we would like to ask China to provide us with the 
legal or official documents, such as notice or transmittal, which stipulate the detail conditions 
necessary to obtain a license for "Information services". On the other hand, if there is no such regulation, Japan appreciates China’s efforts in fu lly executing fair and transparent administrative 
management. 
 
Answer
 
 
China is still confused by the question raised by Japan. Please describe specific case(s) where 
Japanese service suppliers encountered difficulty to th e Ministry of Industry and Information so 
that China can carry on further studies on the technical details.  
  WT/TPR/M/199/Add.1 
 Page 323 
 
 
  Japan Question 55 
 
Japan welcomes China’s detailed an swer. However, what Japan would like to know is not only the 
current condition of China’s regulation but also the reason and background of and the difficulties 
behind these regulations. As Japan has described in the previous question (Japan Question 55), Japan 
is aware of the fact that it is impossible for forei gn enterprises to provide Internet data center services 
and internet connection services in China.  
 Japan would like to have more explanation on "why foreign companies cannot provide these services", and "what differences there are between ser vices that foreign enterprises are allowed to 
undertake and those they are not". 
 
Answer
 
 
As for the further opening-up of the telecom services, China will make decisions in accordance 
with its economic development at appropriate time. 
 
Canada Question 
 
Paragraph 153 indicates that when calculating foreign financial institutions’ equity interest in China’s 
commercial banks, foreign entities will be counted as  one financial institution if the China Banking 
Regulatory Commission (CBRC) deems them to be rela ted parties. Could China clarify what criteria 
are used to evaluate whether foreign financial in stitutions should be consid ered related parties?  
 Answer
 
 Criteria are made mainly in accordance with "The Provisions on the implementation of  
procedures related to administrative permissions for the Chinese-funded Commercial banks", "The 
Administrative procedure for related transactio ns between commercial banks and insiders and 
shareholders". When the Chinese authority reviews the share percentage of a foreign participation 
case, the shares of related parties will be counted for as a single party. 
 
Canada Question
 
 
Paragraph 159 suggests that consideration is being given to the recapitalization of the Agricultural 
Bank of China through a capital injection by the Ce ntral Huijin Investment Corporation Limited. Can 
China provide an update on the status of the refo rm program for the Agricultural Bank of China, 
including any information on plans to introduce st rategic foreign investors or move forward with a 
public listing for the bank?  Answer
 
 The program is still in the process of adjustment.  There is no further information available. 
 
Canada Question 
 
According to paragraph 174, at end-2006 there we re 113 insurance companies in China, including 
6 insurance holding companies. Could China indicat e whether it is possible for foreign insurance 
companies to establish holding companies in Chin a? If yes, could China identify the relevant 
regulations or guidelines governing such establishments? WT/TPR/M/199/Add.1 
Page 324  
 
  Answer
 
 China did not make any commitment on insuran ce holding companies when it acceded to the 
WTO.  
Canada Question 
 
Paragraph 257 says: "The Government encourag es enterprises to expand multi-modal transport, 
including by: investing in deep-water containe r-dock construction and im proving the road, railway, 
coastal, and freshwater transport system
1, establishing an internationally competitive container fleet; 
developing container transport information techno logy, including electronic data interchange (EDI) 
and other electronic business systems; and improving  the legal structure for multi-modal transport." 
Which policy, legislative or economic instrume nts does the Chinese government use to encourage 
private investment into multi-modal transpor tation options including inland waterways?  
 
Answer  
 
There are no particular policies for encouraging private investment in the multi-modal transport 
options including inland waterways. The role of  the government is to create a fair and just 
tendering system, through which the enterprise s participate according to their own commercial 
interests.  
 
Canada Question 
 Paragraph 228 indicates that MII sets tariff caps for telecommunications services. Could China 
indicate if MII makes publicly available its decisi ons establishing tariffs including its reasons and the 
supporting information relied upon  for its determinations? 
 Answer
 
 The Ministry of Industry and Information (the fo rmer Ministry of Information Industry) has been 
making public on its official website all inform ation related to telecom service charges such as 
government policy instruments, progress reports, and assessment results. The Ministry will also 
extensively solicit public comments and suggestions  of all walks of life through expert meetings, 
public hearings. Please refer to the official website of the Ministry for details.  
 
Canada Question 
 We understand that China is now working on the amendment of the Regulation on the Administration 
of Travel Agencies .  When will the new Regulation on the Administration of Travel Agencies  be made 
available, and from where will Members be able to access the new regulation? 
 
Answer
 
 
The Regulation on the Administration of Travel Agencies is under review according to China’s 
legislative procedures. Once offici ally promulgated, the text will be available on the website of 
Chinese tourist authority.  
 
                                                      
1 Information provided by the authorities stated that, the average handling capacity of container ports is 
increasing by 25-30% annually, and the proportion of "doo r-to-door" transportation is  also increasing rapidly.  WT/TPR/M/199/Add.1 
 Page 325 
 
 
  EC Questions 
 
Restrictions persist in securities, where foreign fi rms are obliged to enter JVs. Foreign equity caps 
apply in fund management at 49% and in securities tr ading at 33%. Overseas firms are limited to trade 
in certain firms classes of shares and are particularly  restricted in trading A-shares. We are aware of 
the recent reforms, however we consider that it is  in the interest of Chinese economy to develop a 
better functioning financial services market and allowing more foreign companies with experience to 
enter may help the cause.  
Answer
 
 
No such plans in the near future.  EC Questions  
With regard to the draft Postal Law, the repor t notes that "amendments are being prepared after 
soliciting opinions from domestic and foreign compan ies". However, the EC would like to underline 
that the last 3 drafts have not been fully disclosed  for stakeholders' opinion. Could China confirm that 
the reform will not entail an extension of the monopoly of China Post beyond the areas currently 
covered? In particular, we would like to stress th at express delivery of letters and other items must 
remain outside the scope of the monopoly, in line with China’s GATS commitments. 
 
Answer
 
 While amending the Postal Law,  the compet ent government agencies have solicited opinions for 
several rounds from domestic and foreign-funded en terprises for several times. Before this law is 
implemented, China will once again provide oppor tunity for public comments to fulfill its 
transparency obligations. The Chinese government attaches great importance to the comments and 
suggestions made by all interested parties and will study them carefully to ensure that the Postal 
Law as amended is consistent with China’s WTO commitments. 
 
EC Question 
 As it was discussed and agreed in December 2002, a nd in conformity with its GATS obligations, the 
scope of previously existing licenses to courier ope rators should not be restricted. Could China 
confirm this?   Answer
 
 The Chinese government will ensure that the Postal  Law as amended is consistent with China’s 
WTO commitments. 
 
EC Question 
 
The EC continues to have strong concerns relati ng to an eventual imposition of licensing fees for 
express operators. In addition, recent drafts of th e Postal Law would appe ar to prohibit foreign 
invested firms from carrying domestic documen ts. Could China please clarify these concerns?  
 
Answer
 
 
The Chinese government attaches great importance to  the comments and suggestions made by all 
interested parties and will study them carefully to ensure that the Postal Law as amended is 
consistent with China’s WTO commitments. WT/TPR/M/199/Add.1 
Page 326  
 
  EC Question 
 
The powers to establish the conditions for carrying out postal and courier activities and monitor the 
correct functioning of the market should be entrus ted to a regulator which is independent from the 
interests of the operators. Although the current draft refers to the need for an independent regulator 
and Chinese officials in the past ha ve stated that such a role will be created, no such independence is 
included in the draft. Without an independent regu lator, many provisions in the Draft Postal Law 
could remain ineffective.What are Chin a's plans to address these concerns?  
 
Answer
 
 
China clearly confirmed that courier services are exempted from independent regulation obligation 
in Paragraph 309 of the Report of the Working Party on Chinas Accession , which was recognized and accepted by WTO members including the EC. N evertheless, in order to push forward reform 
and opening-up, China has recently launched structural reform in the postal industry by, among 
other things, separating government functions fr om that of the cor porate and introducing 
independent regulation. The reform is still going on.  EC Question  
In legal services there are economic needs tests that must be fulfilled to permit the establishment of 
local offices, which may violate China's WTO commi tments.  Secondly, no authorisation for an 
additional office is possible until the previous repr esentative office of the fi rm has been established 
for at least 3 years.  Thirdly, companies are also prevented from practising a number of legal activities, in addition to what Chinese lawyers lose th eir qualification when they are hired by foreign 
companies. Could China justify this? Why a regist ered Chinese lawyer can work for a domestic firm 
and not for a foreign owned legal office? 
 
Answer
 
 
It is a national treatment reservation in China’s GATS schedule that the representative office shall 
not employ Chinese national regist ered lawyers outside of China. 
 On economic needs test, please refer to question 94 of the U.S. list. 
 
China has fully implemented its WTO accession commitments and allows foreign law firms to 
establish representative offices to engage in prof it-making activities. Like many other WTO 
Members, China does not allow foreign law firms to practice domestic law. Therefore, foreign law 
firms can not employ Chinese registered lawyers. Ne vertheless, this restriction does not affects 
business of the foreign law firms in China within the business scope as defined in China’s accession commitment, because Ch ina allows foreign law firms establish long-term entrustment 
relations with Chinese law firms to provide related legal services. 
 EC Question  
In its WTO Accession Agreement, and in particular as set out in the Annex corresponding to GATS commitments, it is said that any agency except from joint ventures or wholly domestic owned 
companies will be entitled to intermediate in tr avels overseas of Chinese tourists. Has China any 
plans  to waive the restrictions of servicing Chinese tourists travelling overseas to 100% foreign 
owned travel agents, even if such restriction fully complies with China' s accession commitments?  
  WT/TPR/M/199/Add.1 
 Page 327 
 
 
  Answer  
 China will decide whether to further open up tour ism and travel-related services according to its 
domestic development.   
EC Question 
 
As referred in EC question 154, the EC is interest ed to learn more about the drafting of an Interim 
Regulation on Approval and Administration of the Direct Access and Usage of Foreign Computer 
(Passenger) Reservation System by Sales Agents for Civil Air Transport. Could China provide 
detailed information on the current stage of the legi slative process and how long this review process 
will take?  How does China intend to consult stakeholders concerning this Regulation?  
 
Answer
 
 
The draft is under review according to China’s legi slative procedures. So far, there’s no specific 
timetable for the entry into force of the regulatio n. China will consult the parties concerned at 
approporite times according to the legislative procedures.   
Chile Question 
 
Paragraph 221:  When is this draf t legislation due to be finalized?  Is there a specific deadline?  What 
will be the criteria for the drafting and implementati on of the law?  Will these criteria be based on the 
existing regulations (State Counc il Directive 291)? Paragraph 225 states that "MII is considering how 
to define 'dominant carrier'".  What  definition is it considering using? 
 
Answer
 
 
About the Telecom Law, the Ministry of Indu stry and Information (the former Ministry of 
Information Industry) submitted to the State Council the draft version. It is still in the legislative process. 
 
According to the Regulations on the Interc onnection between Public Telecommunication 
Networks, dominant carriers refer to those that po ssess necessary basic tele com facilities, operate 
fixed local telephone business representing over 50% of the market share in the local networks, and 
are able to have substantive impact on the market access of other telecom operators. 
 
Chile Question 
 
Why does China exclude tobacco distribution?  Does it envisage lifting that restriction at some point? 
 
Answer
 
 
Taking into account the negative impact of smoking on people’s health, China maintains state monopoly over tobacco distribution according to the Law on Tobacco Monopoly.  So far, there’s no 
plan to remove this restriction.   WT/TPR/M/199/Add.1 
Page 328  
 
  Chinese Taipei Question 
 
We note that, with regard to national treatment , China has scheduled a horizontal limitation under 
mode 3 that covers all existing subsidies to domes tic service suppliers in audiovisual, aviation, and 
medical services. Would China be able to share with us more detailed information on the subsidies in 
audiovisual, aviation, and medical services? 
 
Answer
 
 According to the mandate under GATS Article 15,  WTO members are conducting negotiations with 
a view to developing multilateral disciplines on subs idies related to trade in services. But, up till 
now, members have not been able to agree upon the de finition or scope of subsidies related to trade 
in service. Therefore, most of the members has not been able to exchange information concerning 
subsidies related to trade in services. 
 
Thailand Question 
 What is China’s policy on the recognition of certifi cation of skills such as spa services provider issued 
by competent authorities of other countries?  
Answer
 
 
China’s policy on the recognition of qualificatio ns of service providers are made by relevant service 
regulators according to the situa tion of specific sector. In some  sectors, recognition of foreign 
qualifications may be realized by  bilateral agreement based on mutu al benefit. If Thailand would 
like to know the policy on the recognition of a specific industry, please identify the industry and 
what kind of qualification is concerned.  Japan Question 22  
The timing for organizing the "China IPR Enforcement Forum 2008".(V. Publicity (IV)5)  
Answer
 
 The Ministry of Public Security cosponsored with  the Ministry of Commerce, the State Office of 
Intellectual Property Protection and Shangha i municipal government the "China IPR 
Enforcement Forum 2008" in Shanghai on April 21 to 22, 2008. About 600 people including 
liaison police officers of the enforcement bodies of the U.S., E.U., Italy, Canada, Japan and Australia or people of the Representative Offices of these countries to China attended the forum. 
 
Japan Question 25 
 
Please provide the length of time from the filing of a pplications to the initiation of the examination 
and the final decision regarding examination, oppos ition by the CTMO and appeal examination by the 
TRAB.  
Answer
 
 
Currently, it takes 30 months on average to examin e the trade mark concerned. Cases of trademark 
disputes filed before the year of 2005 have been inve stigated and settled. For simple appeal cases, it 
generally takes 2 years for the TRAB to make a ju dgment; while for complicated ones, it needs 
about 4-5 years.  
  WT/TPR/M/199/Add.1 
 Page 329 
 
 
  Japan Question 28 
 
Please describe any efforts made or planned to prom ote IPR protection in provincial and local areas, 
and to educate provincial and local authorities in China.  Answer
 
 According to incomplete statistics, since 2003, the provincial people’s congresses and provincial 
governments have formulated about 90 regulations and rules on IPR protection. Besides, more 
than 20 provinces and municipalities have developed the Plan of Action for IPR Protection. Special 
targeted actions have been taken at local l evels to protect intellectual property rights.  
 In terms of education, training and public awareness enhancement, the local governments have 
also done a lot of work. For example, more than 20 provinces and municipalities published 
10 typical cases of IPR infringement every yea r. More than ten provinces and municipalities 
including Liaoning, Zhejiang, Hubei and Gansu provinces issue White Paper on IPR protection 
every year.   
 
Japan Question 29 
 
Please provide information concerning the requir ements that need to be met to punish both 
manufacturers and distributors or those preparing to distribute products in cases where products are 
manufactured without trademarks and are later attach ed illegal trademarks at the distribution stage or 
at the stage for preparation for distribution by other distributors.  
Answer
 
 
In line with Article 52 of the Trademark Law an d Article 50 of the Implementing Regulations of 
the Trademark Law, punishment can only be  made against the person whose actions have 
infringed the exclusive right of a registered trademark. , if proven guilty that the acts of manufacturers and distributors have infringed the ex clusive right of a registered trademark, then 
this would constitute a trademark infringement . The Industrial and Commercial administrative 
authorities shall exercise judicial punishment accordingly.    
Japan Question 31 
 
Please provide the information of the undertakings of future for enhancing the function of the Service 
Centers for IPR Protection. 
 
Answer
 
 In 2006, the Chinese Government established co mprehensive Service Centers for Intellectual 
Property Protection (SCIPP) in 50 large and medium-sized cities and launched the nationwide 
hotline of the number of "12312", set up a national IPR protection e-platform that facilitates the 
right owners’ filing, complaining and counseling.  By the end of April, 2008, the 50 Centres had 
received nearly 3500 reports and complaints of va rious IPR violations and provided counseling 
services for 120,000 person times. 
 
Canada Question  
The Secretariat Report indicates, "[c]ustoms stre ngthened efforts in IPR protection at the border 
through a five-month campaign from October 2007, ai med at IPR-infringing exports to the EC, Hong WT/TPR/M/199/Add.1 
Page 330  
 
  Kong, China, the United Arab Emirates, and the Un ited States". Canada appreciates China’s efforts in 
IPR enforcement and would be grateful for details on the results of this campaign. 
 
Answer
 
 
The campaign is titled as the "Dr agon Boat Action". From Oct.1 to  Dec. 31 of 2007, a total of 
2411 batches involving 7754 pieces of export IPR infr ingement goods with a total value up to 
RMB 94.8 million were seized and dealt with by th e customs offices across China. Compared with 
the same period of 2006, an increase by  226%,251% and 105% respectively. 
 
EC Question  
At the Ninth EU-China Summit, on 9 September 2006,  the EC and China adopted a Joint Statement 
by which they expressed the willingness to strengt hen exchanges and co-operation on IPR protection 
in the area of technology and support the contract ual freedom between enterprises in the field of 
technology transfers under the condition of fairness,  reason and non-discrimination. How does China 
envisage to follow-up on this issue and encourage Chinese companies to respect intellectual property 
rights and enter into negotiation for licensing agreemen ts for the use of patented foreign technologies? 
 
Answer
 
 
Article 12 of China’s Patent Law stipulates that any entity or individual exploiting the patent of 
another must sign a written license contract with the patentee and pay the patentee a fee for the exploitation of the patent. Therefore, in case the licensee fails to pay a fee for the exploitation of 
the patent, the patentee can lodge a complaint to the relevant People’s Court. 
 
EC Question  
Could China describe the scope of the concept of  "well-known trademark" in the Chinese Trademark 
Law? Could China assess the compliance of Trademark Law with Paragraphs 2 and 3 of Article 16 of 
the TRIPs Agreements?  Answer
 
 According to the Trademark Law and the Provisio ns on Recognition and Protection of Well-known 
Trademarks which is established in pursuant with the Implementing Regulations of the Trademark 
Law, the term "well-known trademark" refers to the trademark that is widely known to the relevant 
public and enjoys a relatively high reputation in China. 
 Article 13.2 of the Trademark Law stipulates that  where a trademark in respect of which the 
application for registration is filed for use onto  the non-identical or dissimilar goods is a 
reproduction, imitation or translation of the we ll-known mark of another person that has been 
registered in China, misleads the pub1ic and is li kely to create prejudice against the interests of the 
well-known mark registrant, it shall be rejecte d from registration and prohibited from use. 
 We confirm that Article 13.2 of the Trademark La w is completely consistent with Articles 16.2 and 
16.3 of the TRIPs Agreement. 
 
EC Question  
Could China explain the mechanism of transfer prov ided for in each of the four regulations? Please 
provide statistical data on the transfers from the ad ministrative to the criminal authorities carried out 
since the last TPR review in 2006.  WT/TPR/M/199/Add.1 
 Page 331 
 
 
  Answer  
 In 2006, four provisions have been adopted on transfer of IPR enforcement cases from the 
administrative to the judicial authorities, which has greatly enhanced the overall effectiveness and 
potency of China’s IPR protection law enforcemen t. Currently, China hasn’t maintained the 
statistics on the number of cases transferred sinc e China’s accession to the WTO. Therefore, no 
such data can be provided. Meanwhile, it’s improper to measure the effectiveness of the handover and coordination between the administrative and the judicial authorities solely by the number of cases transferred. 
 
EC Question  
Could China provide data on how many customs actions  have been undertaken on request / ex officio 
against IPR infringing imports / exports? Are Cust oms authorities empowered to intercept infringing 
goods in transit / transhipment? 
 
Answer
 
 In 2007, 67 customs actions on request while 8348 on self-initiatives against IPR infringed imports / exports have been undertaken. Customs at ports  have investigated and seized on ex officio 
330 million pieces of infringed goods with the case value amounting to 420 million RMB, 
accounting for 99% of the total seizures and 97% of the total case value respectively. 
 China has established measures to protect IPR at  borders, which provide legal protection for 
imports and exports. 
 
Argentina Question  
Chinese authorities have taken initiatives to allo w small and medium-sized domestic private 
enterprises (SMEs) better access to the capital market, such as the creation of a separate sub-board for 
SMEs in the Shenzen Stock Exchange in 2004. C ould China detail which were –in addition to the 
mentioned example- the initiatives undertaken by th e authorities to allow SMEs better access to the 
capital market? 
 
Answer
 
 To further improve SMEs, especially hi-tech SMEs  access to the capital market, China has taken 
initiatives to promote the creation of the Second  Board. In March, 2008, the Administrative 
Measures for Initial Public Offering and Listing on the Second Board was published to solicit 
public opinions and will come into effect after being amended in accordance with the opinions from all circles. The listing standards for the Second  Board is lowered significantly compared with 
those for the Main Board in consid eration of the scale of the SMEs.  
 
Argentina Question  
This paragraph of the report refers to the fact that China is in the process of revising the Law 
Countering Unfair Competition, the main competition policy instrument.  Could China give details of 
the revision process? 
 
Answer
 
 The revision of the law is still underway, so we are unable to prejudge the final results. 
 WT/TPR/M/199/Add.1 
Page 332  
 
  United States Question 
 
The reform of the bond market is ongoing. 
  a. Please explain whether policy banks still acc ount for the majority of bonds issued in 
China, and whether state-owned commercia l banks still account for the majority of 
purchases of bonds issued by policy banks .  Please also describe the terms and 
conditions under which bonds issued by policy banks are purchased by state-owned 
commercial banks. 
 Answer
 
 Please refer to the official website of the Peopl e’s Bank of China for relevant information. 
 
United States Question 
 Please identify the criteria that qualify a company to issue bonds.  Please also describe any restrictions 
or limitations on the types of bonds that a company can  issue and any restrictions or limitations on the 
terms and conditions under which those bonds can be issued.  
 
Answer
 
 
Please refer to the Pilot Rules on the Issuance  of Corporate Bonds promulgated and become 
effective in August, 2007. 
 
Canada Question 
 Does China expect that the new Ministry will have  the same mandate as MOLSS with respect to the 
approval of foreign and domestic companies to provide enterprise annuities services? If so, could 
China indicate whether the application and li censing processes for the provision of enterprise 
annuities services have been streamlined since its last  trade policy review?  If that is the case, could 
China explain what changes have been made, incl uding any revisions to processes maintained by the 
functional regulators (CBRC, CSRC, and CIRC)? 
 
Answer
 
 The Chinese government has been improving the enterprise pension system. On Jan. 1st, 2008, 
China raised again the pensions for the enterpri se retirees. The functions of the Ministry of 
Human Resources and Social Security will be made available to the public in the near future. 
 
EC Question 
 
Chinese economy is characterized by a number of economic imbalances, several of which are interrelated (notably extreme high level of savi ngs, account surplus, environmental problems etc). 
Could China explain if and which measures are ta ken or will be taken to redress these imbalances, 
how some have worked out and which furt her new policy initiatives will be taken? 
 
Answer
 
 
Please refer to the relevant conten t of the Chinese Government Policy Statement submitted to the 
WTO. 
  WT/TPR/M/199/Add.1 
 Page 333 
 
 
  EC Question 
 
The Secretariat report outlines that 'the Labour Contract Law, which entered into force on 
1 January 2008, aims to strengthen the role of uni ons with regard to termination of employment; the 
Law requires the use of labour contracts, and a ddresses collective contracts and part-time workers 
through separate clauses.  Furthermore, in January 20 04, the Ministry of Labour and Social Security 
(MLSS) issued regulations that provided specific rules for the consultation process for collective 
contract bargaining. Could China provide furthe r information on the implications of the Labour 
Contract Law on the way collective bargaining would be  protected in China? In particular, what are 
the measures taken to improve the creation of safe workplaces?  
 
Answer  
 Section 1 of Chapter 5 in the newly promulgated Labor Contract Law has provided specific rules 
on how the employee collective bargaining is conducted with the employer. 
 
EC Question 
 
The Secretariat's report outlines that "Certain employment restrictions under the "Hukou" (worker 
registration) system have been relaxed to promote the development of rural areas and address income 
inequality. Nonetheless, the system still distinguishes between urban, rural, temporary, and permanent 
workers. This puts workers register ed in rural areas seeking jobs in urban areas (migrant workers) at a 
disadvantage, as their entitlements to health care, housing, and education for their children, are not 
sufficiently provided for by the employers or local  authorities". Could China indicate whether it has 
plans to undertake further actions to address in come inequality, and if so, in which sectors? 
 Answer
 
 Please refer to the response provided by the head of the Chinese Delegation to the question of the 
Discussant on May, 23.  
 
EC Question 
 Could China inform of its intention of ratifying the ILO Conventions on freedom of association and 
the effective recognition of the right to collectiv e bargaining (ILO Conventions No. 87 and No. 98)? 
 
Answer
 
 
China hasn’t ratified the two above-mentioned Conventions. 
 
EC Question 
 
Could China provide further information on the sp ecific actions that the Government has already 
taken or plans to take in order to alleviate the social challenges related to  the rights of women and 
children?   
Answer
 
 
The Law of the People's Republic of China on th e Protection of Rights and Interests of Women 
and the Law of the People's Republic of China on the Protection of Minors spelled out clearly and comprehensively the provisions on the protectio n of the rights and interests of Women and 
Children. The Chinese government protects the rights and interests of Women and Children in accordance with relevant laws. WT/TPR/M/199/Add.1 
Page 334  
 
  EC Question 
 
What is the percentage of credit return, or th e in debt percentage of non-performing loans?  
 
Answer
 
 
Commercial banks of China operate independently and are responsible for their own profits and losses. The credit return varies among banks an d the Chinese government currently does not 
maintain such statistics. 
 
EC Question  
What types of enterprises are in debt with banks? Wh at is the percentage of being in debt according to 
different types of enterprises (SOE, private, FIE)?  Answer
 
 Situation among commercial banks of China vary as they operate independently and responsible 
for their own profits and losses. The credit return varies among banks and the Chinese government currently does not maintain such statistics. 
 
Chinese Taipei Question  
China is currently amending the "Law Counterin g Unfair Competition". Could it please elaborate 
further on the following: What are the main reasons for amending the law, and what might be included in the amendment?  
 
Answer
 
 Please refer to the answer to Argentin a Question of (a) Competition policy. 
 
Chinese Taipei Question 
 Would the enforcement of this law conflict with the new "Anti-monopoly Law", which will enter into 
force on 1 August, 2008?  Is there any coordina tion mechanism in place be tween the new competition 
authority established under the Anti-monopoly Law and the SAIC, should conflict arise?  
 
Answer
 
 To ensure the timely and effective implementation of the Anti-Monopoly Law, China will formulate 
supporting legal documents such as relevant admin istrative regulations, sectoral regulations and 
guidelines. The State Council is working on the dr aft of Regulations on Declaring Concentration 
of Business Operators to ensure th e implementation of relevant articles in the law. Once the 
structural reform of the government under the sup ervision of the State Council is completed, the 
law enforcement authority of the Anti-Monopoly  Law will be designated, which will formulate 
regulations for sectors accordin g to its own mandate. Once the Anti-Monopoly Committee of the 
State Council is put in place, it will take full charge of the drafting of the implementing guidelines of this Law. At present, the Legislative Affai rs Office of the State Council has already completed 
the Draft for Comments of the State Council Regu lations on Declaration of Concentration of 
Business Operators (draft for comm ents). Comments are being solicited from all walks of life and 
the Regulations will be issued after revision and improvement. The Draft mainly includes 
stipulations in the following aspects: 1. definitio n of relevant concepts related to concentration of 
business operators; 2. specific requirements and mechanism of adjustment of declaration for  WT/TPR/M/199/Add.1 
 Page 335 
 
 
  concentration of business operators; 3. designa tion of the party obligatory for declaration of 
concentration of business operators; 4. estab lishment of the pre-consulting mechanism; 
5. requirements for declaration documents and relevant  materials; 6. establishment of the fast track 
mechanism of initial review; 7. confidentia l treatment of sensitive information. 
Chile Question 
 According to the report, the law is currently bei ng amended, and it might therefore be premature to 
make any comments.  Nonetheless, is there any in tention to unify the laws/regulations and the 
competent authorities under a central authority covering all sectors and regions?  Is there any plan for all State enterprises to be governed by the law re lating to competition and anti-monopoly?  Is there a 
formal link between the laws/authorities regulati ng competition policy and consumer protection?  
 
Answer
 
 Please refer to the answer to Argentina Question of  (a) Competition policy. In addition, please refer 
to the official website of the State Bureau of Industry and Commerce for the relevant information. 
 
Switzerland Question 
 
In para. 242 of its report, the Secretariat stresses the difficulty to enforce ad ministrative and judicial 
decisions due to the lack of appropriate infrast ructure and sufficient manpower. Could the Chinese 
authorities indicate which measures China intends to ta ke in order to fully comply with the general 
obligation under Article 41 of the TRIPS Agreement. 
 
Answer
 
 
With continuous increase in input to infrastr ucture and manpower development, the Chinese 
authorities can ensure a ful compliance with the obligations under the TRIPs Agreement. 
 
Republic of Korea Question 14 
 
The Secretariat Report (paragraph 242) notes that IPR-related cases must meet minimum value thresholds to be considered for criminal prosecuti on. It also notes that there is some doubt as to 
whether fines and other penalties are sufficient to deter IPR violations. Please provide the Chinese Government's plans to strengthen penalties and ease conditions for filing complaints regarding 
infringement of intellectual property rights.  Answer
 
 The Chinese government has steadily intensified th e level of penalties against the infringement of 
IPR in recent years. Please refer to the Chin ese Government Policy Statement and the Speech 
delivered by the head of the Chinese delegation in  the trade policy review session for details. 
 
Argentina Question  
This paragraph states that any person may oppose a trade mark that has been given preliminary 
examination and approval.  Have there been any recorded cases of opposition by citizens or foreign 
companies?Furthermore, with regard to trade marks that have already been u sed in other countries but 
are not registered in China, it is stated that a copy , imitation or translation cannot be registered in the 
case of a well-known trade mark.  What is the criter ion for determining which marks are considered to 
be "well-known"?  WT/TPR/M/199/Add.1 
Page 336  
 
  Answer
 
 Yes, China does maintain such reco rds. Please refer to the official  website of the State Bureau of 
Industry and Commerce for details. Regarding the criterion for determining a well-known 
trademark, please refer to the answer to EC’s Question 95. 
 
Argentina Question 
 
Paragraphs 238 and 239, pa ge 106 It is stated in these paragraphs that geographical indications are 
registered with the State Trademark Office and are also regulated by the AQSIQ which, in June 2005, 
issued the Regulations on protection of Products of Geographical Indications.  Could China explain 
how the two registration systems interact and what powers each of them has?  
Answer
 
 
The State Trademark Office of China protects the Collective Marks and Certification Marks 
pursuant to the Trademark Law. At the same time, the General Administration of Quality 
Supervision, Inspection, and Quarantine (AQSIQ) also provides protection in observance to the 
Provisions on the Protection of GI Products.  The above two documents clearly define the 
parameters and procedures of application, which proves to be not so difficult for producers and 
consumers to follow. 
 
United States Question 
 
The United States understands that MOA has recently  issued its own measures for the administration 
of GIs for agricultural products. Please clarify the relationship between the State Trademark Office, 
AQSIQ and MOA with regard to the registration of GIs for agricultural products. In the event that 
there are conflicting GIs registered at the State Trademark Office, AQSIQ and MOA, how does China 
resolve the problem of conflicting registrations?  Is  there a public database for GIs at the AQSIQ and 
the MOA, such as the one that exists for trademarks  at the State Trademark Office, or is there some 
other type of mechanism that allows the three ag encies to share records in  order to avoid issuing 
conflicting registrations? 
 
Answer  
 Chinese authorities in charge of the administration of GIs provide protection for GIs in pursuant to 
relevant laws and regulations. The three agencies will strengthen coordination among them and 
share relevant records and information.   
Japan Question 22 
 
Please provide the information described bellow re lated with the "China's Action Plan on IPR 
Protection 2008".  
 
 - The schedule for the revisions and the main point of the revisions of the "Trademark 
Law", the "Law against Unfair Competition" , the "Copyright Law", the "Measures for 
the Implementation of Copyright Administrative Punishments", the "Rules for 
Implementation of the Patent Law" a nd the "Rules for Implementation of the 
Regulations on Customs IPR Protection". ( I. Legislation (I)1,2(II)1,7(III)2,(IV)3) 
 - The main point of the research on the second amendment to the "Copyright Law". 
(I. Legislation (II)1)   
 - The outline of the "Measures for the Administration of Karaoke Program". 
(I. Legislation (II)4)  WT/TPR/M/199/Add.1 
 Page 337 
 
 
   -  outline of the "Measures for the Administration of State-Owned Copyright". 
(I. Legislation (II)5) 
 - The outline of the "Measures on Remuneration by Radio and Television Stations for 
Broadcasting Statutory Licensed Phonograms". (I. Legislation (II)2) 
 - The outline of the "Regulations on Copy right Protection for Folk Literature and 
Artistic Works". (I. Legislation (II)3) 
 - The schedule for the revision and the main point of the "Measures for Works 
Registration" and the schedule for the formulation and the main point of the "Measures on Copyright Contract Documentation". (I. Legislation (II)6)  
 - The schedule for the revision and the main point of the revision of the "Measures for 
the Implementation of Copyright Administrative Punishments". (I. Legislation (II)7) 
 - The schedule for the formulation and the main point of the "Measures for the 
Examination, Approval and Supervision of  Copyright Collective Management". (I. 
Legislation (II)8) 
 - The outline of the "Measures on Remuneration of Textbook Statutory Licensing". 
(I. Legislation (II)9) 
 - The outlines of the "Judicial Interpretations on Issues Concerning the Application of 
Law in Dealing with Criminal Cases of Infringing Trade Secret Issued by the 
Supreme People's Court" and the "Judicial Interpretations on Issues in Dealing with 
Administrative IPR Cases issued by Supreme People's Court". (I. Legislation (v)1,4). 
 Answer
 
 Regarding the IPR Laws, Regulations and Measu res in the process of formulation or revision, 
China welcomes Japan to make comments on th em. These comments will then be delivered to 
relevant authorities for consideratio n. For those IPR Laws, Regulations and Measures that have 
been issued, please consult with the rel evant official websites for details.   
 
Japan Question 
 
The details of the "special campaigns to fight cy ber IPR infringement", "dedicated campaign targeting 
the tourist market", "Fight Piracy Every Day campaign", "rectification activities over audio-visual 
market, Internet bars, online music and cyber games". (II. Enforcement (I) 1,2,3,5,11,12,13)  
 
Answer
 
 Please refer to the official websites of the Minist ry of Public Security, the Ministry of Industry and 
information, the Ministry of Culture, the Stat e Bureau of Industry and Commerce, the General 
Administration of Press and Publication, the St ate Bureau of Copyrights, the State Bureau of 
Tourism for details. 
 
Japan Question 
 
The outlines of the "campaign on Fighting Counterfe iting to Protect Well-Known Brands and Quality 
Brands". ( II. Enforcement (I)8)  
Answer
 
 
Please refer to the official website  of the AQSIQ for the outlines. 
 WT/TPR/M/199/Add.1 
Page 338  
 
  Japan Question 
 
The outlines of the "Special Operation Thunderstorm on patent protection" and the "Special Operation 
Sky Net on patent protection" . ( II. Enforcement (I)15.16) 
 Answer
 
 Please refer to the official website of the Stat e Bureau of Intellectual Property Rights for the 
outlines of the two special operations. 
 
Japan Question  
The details of the "Pamphlet on IPR Protection Supervision" ( II. Enforcement (II)2) and the "IPR 
Enforcement Information". ( II. Enforcement (II)10)  Answer
 
 Please refer to the official website of the Stat e Bureau of Intellectual Property Rights for the 
details.  Japan Question 
 The details of the sorting out the relations betw een copyright administrative law enforcement and 
cultural law enforcement. (II. Enforcement (II)5)   
Answer
 
 
Please refer to the official website of the State Bureau of Copyrights for details. 
 
Japan Question 
 
The outlines of the "cross-regional IPR protection me chanism" (IV. Institution Building (I)2) and the 
"regional coordinating mechanism for patent administrative enforcement". (IV. Institution 
Building (I)9).  
Answer
 
 
Please refer to the official websites of the Ministry of Commerce and the State Bureau of 
Intellectual Property Rights for the outlines. 
 
Japan Question 
 
The outline of the "Outline on Implementing an  IPR Strategy for the Information Industry". 
(IV. Institution Building (II)1). 
 
Answer  
 Please consult with the official website of the Ministry of Industry and Information. 
 
Japan Question 
 
The main issues and the study themes of the "st udy into such issues as standards and evidence in 
suspected IPR infringing criminal ca ses". (IV. Institution Building (III)4).  WT/TPR/M/199/Add.1 
 Page 339 
 
 
  Answer  
 The study is still underway. China can provide Ja pan with further information once the results 
come out. 
 
Japan Question  
The timing for organizing a press conference on the achievements and typical cases of the special 
campaign on combating online infringement and piracy in 2007. (V. Publicity (III)4). 
Answer
 
 
Please consult with the official website of th e General Administration of Press and Publication. 
 
Japan Question 
 
The timing for organizing a press conference on the establishment of the Copyright Collective 
Management Organization. (V. Publicity (III)5).  
Answer
 
 Please consult with the official website of th e General Administration of Press and Publication. 
 
Japan Question 
 
The timing for co-organizing and the outline of the International Copyright Forum 2008 with the 
WIPO. (V.Publicity (IV)3). 
 
Answer
 
 Please consult with the official website of th e General Administration of Press and Publication. 
 
Japan Question 
 The main issues and the study themes of the "research on "rules of evidence in IPR civil 
litigation""(X. Plan for Special Research (I)6) a nd the "theoretical research on IPR criminal 
protection". (X. Plan for Special Research (I)9).  Answer
 
 The study is still underway. China can provide the Japanese side with further information once the 
results come out. 
 
Japan Question 
 The main issues and the study themes of the "gen eral situation of IPR cases of criminal private 
prosecution". (X. Plan for Special Research (I)8) and the statistical data of the IPR cases of criminal 
private prosecution.  Answer
 
 The study is still underway. China can provide the Japanese side with further information once the 
results come out. WT/TPR/M/199/Add.1 
Page 340  
 
  Japan Question 
 
The main issues and the study themes of the "resear ch on IPR protection situation in OEM" (X. Plan 
for Special Research (II)1).  Answer
 
 The study is still underway. China can provide the Japanese side with further information once the 
results come out. 
Japan Question 
 Japan understands that the guidelines for the antimon opoly law, which comes into force this August, 
are under the process of the formulation. Please provide the information related to the situation of the 
formulation and the outline of the guidelines related to the enforcement of the intellectual property 
right. 
 
Answer
 
 China will provide Japan with the required info rmation after the guidelines for the Antimonopoly 
Law are published. 
 
Japan Question  
Please provide the information related to provisions which cover Article8 (Right of Communication to 
the Public), Article11 (Obligations concerning T echnological Measures) and Article12 (Obligations 
concerning Rights Management Information) of WI PO Copyright Treaty and Article10 and 14 (Right 
of Making Available), Article18 (Obligations concerning Technol ogical Measures) and Article 19 
(Obligations concerning Rights Management Info rmation) of WIPO Pe rformances and Phonograms 
Treaty.  
Answer
 
 
The required information falls within the jurisd iction of WIPO, it is beyond WTO trade policy 
review regime. 
 
Japan Question 
 
(1) Please provide the detail information with rega rd to the protection system of GIs through the 
Regulations on Protection of Products of Geographical  Indications. In particular, please provide the 
information regarding the coverage  of products (limited to wines and spirits, or not), level of 
protection (the level of general protection stipulat ed on the article 22.2 of the TRIPS Agreement or 
that of additional protection stipulated on th e article 23.1 of the TRIPS Agreement) and the 
requirements for the approval by the AQSIQ to be protected on the respective regulation.  
 
Answer  
 Please refer to the official website of AQSIQ for reference. 
 
Japan Question  
In addition, please provide an answer whether the fo reign GIs are protected through the regulation or 
not. If protected, please provide how many foreign GIs have been protected.  WT/TPR/M/199/Add.1 
 Page 341 
 
 
  Answer  
 Foreign GIs are protected through laws and regulat ions in China. For relevant information please 
refer to the official websites of the SBIC and AQSIQ. 
 
Japan Question  
(1) Is there any system for disclosing informati on of the sender (alleged infringer of copyright) to 
Internet Service Providers regard ing copyright infringement on the Internet? (2) If yes, please provide 
the information about the system, such as the law or regulation which stipulates it and procedures for 
disclosing information? 
 
Answer
 
 Please refer to the specific stipulations of China’s Regulation on the Protection of the Right of 
Communication through Information Network issued in 2006.  
Japan Question 
 
In terms of the aforementioned provision on "liability  for third party’s infringement" stipulated in 
Article 24 of the Regulation on the Administration of Import and Export Technology, China explained 
that the laws on transfer of technology in many  countries had similar provisions, and that such 
provisions conformed to international usage.  Ho wever, Japan understands that many countries have 
already abolished such "liability for third party’ s infringement" provisions. Please inform us of any 
plans to revise the provision in light of this international trend.  Answer
 
 Currently, China has no plan to revise the provisio n of ‘liability for third party’. However, China 
will follow up with studies on foreign laws on transfer of technology. 
 
Japan Question 
 Please provide a list describing the names and th e main occupations of the respective "32 IPR 
education and research institutions".  
Answer
 
 
Please refer to the official website of MOFCOM for details. 
 
Japan Question 
 
Please provide detailed information regarding the pos ition and the function of the "collegiate Panels 
specializing in IPR issues" compared with the "IPR courts". 
 
Answer  
 Please refer to the official website of  the Supreme People’s Court for details. 
 WT/TPR/M/199/Add.1 
Page 342  
 
  Canada Question 
 
According to the Secretariat Report,  "A trade mark can be revoked even  after being granted".  Canada 
would be grateful if China could elaborate under wh at circumstances a registered trade mark can be 
revoked.  
 
Answer
 
 According to Article 46 of the Implementing Regulations of the Trademark Law, where a 
trademark registrant applies for the removal, from the Register, of his regis tered trademark or the 
registration of his trademark in respect of par t of the designated goods, he shall send an 
Application for Trademark Removal and return the original Certificate of Trademark Registration 
to the Trademark Office. 
 
Canada Question 
 Canada would appreciate further information on what is meant by "local copyright registration". Do 
local copyright administration offices act as fa cilitators by handling administration of local 
applications and distributing them to the Na tional Copyright Administration, or are their 
responsibilities broader?  Answer
 
 Please refer to the answer to the U.S. Question 54. 
 
Canada Question 
 According to the Secretariat Report, "GIs are also regulated by the AQSIQ, which issued the 
Regulations on Protection of Products of Geographi cal Indications in June 2005. Apparently, this 
resulted in some confusion among producers and c onsumers".Canada would be grateful for details 
regarding the nature of the confusion created in this context.   Answer
 
 The State Trademark Office of China protects the Collective Marks and Certification Marks 
pursuant to the Trademark Law. At the same time, the General Administration of Quality 
Supervision, Inspection, and Quarantine (AQSIQ) also provides protection in observance to the 
Provisions on the Protection of GI Products.  The above two documents clearly define the 
parameters and procedures of application, which proves to be not so difficult for producers and 
consumers to follow. 
 
Canada Question 
 
According to the Secretariat Report, "SIPO has been publishing annual Action Plans on IPR 
Protection since 2006, to provide guidance on IPR enforcement. By end-August 2006, 50 IPR service 
centres had been set up all over the country". Canada would be grateful for further information on the 
objectives of the IPR service centres and how they function.  Answer
 
 Please refer to the answer to the U.S. Question 57. 
  WT/TPR/M/199/Add.1 
 Page 343 
 
 
  EC Question 
 
As regards the pharmaceutical industry, the EC  notes that under current Chinese legislation, a 
registration would be granted to a company that has not generated the complete regulatory data 
package, to the detriment of the originator. Besides, it appears that  there is no mechanism in place to 
prevent the registration of a generic drug that woul d infringe a patent. Does China have any plans to 
provide a strong data protection to innovative drugs producers and a greater clarity on the 
implementation and enforcement of patent protection mechanisms in China? For instance, information 
provided on the SFDA website on generic applications  should be kept up to date and with sufficient 
details necessary for originators to ensure en forcement of their intellectual property rights. 
 
Answer  
 According to the Measures for the Administratio n of Drug Registration revised in 2007, protection 
of the patent involved in the registration of a gen eric drug and the experimental data is specifically 
prescribed. China appreciates Japan for its suggestion.  China’s relevant authorities, including the 
SFDA will update the information on the websites accordingly. 
 
EC Question 
 
In the Chinese Government's report there is no explic it reference to the remuneration of patents in the 
ICT sector. Does China plan to unde rtake specific measures for this particular sector in order to 
strengthen the protection of ICT patents and gua rantee the effective payment of royalties?  
 
Answer
 
 
China protects patents in all sectors including th e patents in ICT sector in accordance with the 
Patent Law.  
 
EC Question 
 
It is mentioned that the Patent Law is curren tly being revised. Quoting from the Report, "the 
(Chinese) Authorities state that the purpose of th e revision is to further enhance protection by: 
improving ‘patent agent’ system and the management of patent rights; clarifying the criteria for granting patents; and preventing the abuse of patents". How do the Chinese authorities intend to 
improve ‘patent agent’ system; the management of  patent rights; clarify the criteria for granting 
patents; and how is it intended to prevent the abuse of patents? Could China specify the scope of the 
concept of "abuse of patents"? When does China fo resee the finalisation of the revisions of this 
process?  
Answer
 
 Please refer to the answer to the U.S. Question 50 (b). 
 
EC Question 
 
As well as straightforward counterfeiting, an in creasing problem is the circulation of lookalike 
products on the Chinese market. These are goods that ar e not exact copies of the originals but display 
key characteristics designed to make consumers believe that the products  are the same as the original. 
Examples of techniques used can be the use of th e same colours or marks similar to registered 
trademarks. This form of IPR violation is no less serious than counterfeiting and should be effectively 
dealt with. 
 WT/TPR/M/199/Add.1 
Page 344  
 
  Answer
 
 Whether or not a product constitute an IPR violatio n shall be determined in light of the Trademark 
Law and other relevant IPR laws and regulations.  
 
EC Question  
The Report states that trademark registration takes approximately 24 months, from submission of the 
application to the first action by the trademark administration. In 2006 the number of trademark applications increased of 15.4% over the previous  year while the number of trademarks approved 
increased of 6.6%. Which measures have the Chinese au thorities taken - or do they plan to take - to 
face the dramatic increase in trademark applications?   
Answer
 
 
Please refer to the answer to the U.S. Question 53.  
EC Question 
 
According to the Report in 2006 14 ,960 review applications were received by the Trademark Review 
and Adjudication Board, and 4,219 were reviewed (10,144 and 6,305 in 2004)  
 
23. Does China plan to adopt measures regardi ng the Trademark Review and Adjudication Board 
in order to enable this body to face the increase in review applications?  
Answer
 
 
Please refer to the answer to the U.S. Question 52. 
 
EC Question 
 
According to Paragraph 2 18 of the Secretariat's report China made reservation on Article 14 of the 
WIPO Performances and Phonograms Treaty (WPPT) . The Commission is concerned about this 
reservation. Broadcasting and public performance right s are indeed crucial to the recording industry 
as sales of hard copies are no longer the only form of  revenue for record companies. Does China plan 
to propose amendments to the Copyright Law, wh ere sound recording producers should be accorded 
rights of communication to the public including br oadcasting and public performance rights? If not, 
can China explain the reasons for the reluct ance to grant these rights to sound producers? 
  
Answer  
 Please refer to the answer to the U.S. Question 49. 
 
EC Question  
Could China provide detailed information con cerning the respective competences of the State 
Trademark Office and the AQSIQ with regard to GIs?  Could China confirm that a third GI protection 
system has been set up? If so, could China explai n the relationship between these three systems? For 
example, how is an application filed before one – or a registration granted by one – of the three 
entities (AQSIQ, State Trademark Office, Ministry of Agriculture) taken into account by the other two?   WT/TPR/M/199/Add.1 
 Page 345 
 
 
  Answer  
 The State Trademark Office of China protects the Collective Marks and Certification Marks 
pursuant to the Trademark Law. At the same time, the General Administration of Quality 
Supervision, Inspection, and Quarantine (AQSIQ) also provides protection in observance to the 
Provisions on the Protection of GI Products.  The above two documents clearly define the 
parameters and procedures of application, which proves to be not so difficult for producers and 
consumers to follow. 
 
EC Question 
 Chinese authorities have stated that a law on geogra phical indication is to be issued before 2010. 
Could China elaborate on the scope of protection,  process of registration, enforcement scheme and 
transfer system from the administrative to the crim inal authorities which China plans to establish by 
the means of this new legislation?   Answer
 
 Please refer to the official websites of SBIC and AQSIQ for reference.  
 
EC Question 
 The report indicates that no changes have been ma de regarding undisclosed information or trade 
secrets.Could China explain how Article 39 of the TRIPS Agreement, especially Paragraph 3, is 
implemented by Chinese legislation (data protecti on against unfair commercial use and disclosure)?  
 Answer
 
 Please refer to the relevant stipulations of Ch ina’s Measures for the Administration of Drug 
Registration. 
 
EC Question 
 Chinese authorities note that "the National Worki ng Group on IPR protection issued the annual action 
plans for China's IPR protection in March 2006 an d March 2007 respectively, which gave detailed 
instructions on 438 specific tasks and supporting me asures in areas such as la w enforcement, special 
targeted actions, international c ooperation, consultancy, education and so on".Could China assess the 
result of such annual action plans and provide da ta regarding their evaluation on the ground?  
 
Answer
 
 Please refer to Chinese Government Policy Statement and the speech delivered by the head of the 
Chinese Delegation. In addition,  please refer to the official website of MOFCOM for details. 
 
EC Question 
 
Does China plan to adopt measures to remedy the situation described in the Report? If so, please 
specify and indicate the milestones of this process.   Answer
 
 Please refer to the answer to the Swit zerland Question IPR (f) Enforcement. 
 WT/TPR/M/199/Add.1 
Page 346  
 
  EC Question 
 
Could China indicate whether Chinese legislation has implemented the provision of Article 47 
TRIPS? If not, does China intend to introduce it in its legislation?   Answer  China has already incorporated the provision of Ar ticle 47 of TRIPs Agreement into its legislation 
and faithfully implemented the obligation prescribed by it. 
 
EC Question  
By its WTO accession in 2001 China committed itself to adapting its investment policies to be 
compliant with the Agreement on TRIMs. Furtherm ore the representative of China in the working 
group of China’s WTO accession confirmed that "China  would only impose, apply or enforce laws, 
regulations or measures relating to the transfer  of technology, production processes or other 
proprietary knowledge to an individual or enterprise in  its territory that were not inconsistent with the 
WTO Agreement on Trade-Related Aspects of Intell ectual Property Rights. He confirmed that the 
terms and conditions of technology transfer, pr oduction processes or other proprietary knowledge, 
particularly in the context of an investment, woul d only require agreement between the parties to the 
investment". How the Chinese authorities intend to ensure  that the conditions of a contract to transfer 
technology are in conformity with the Accession protocol of China to the WTO. Could China please 
confirm whether it agrees that any transfer of tec hnology depends exclusively on the free will of the 
contractors involved, and the approval for investme nts is not conditional to fulfilling local content 
requirements, setting-up of research institutions in China or the transfer of technology?  
 Answer
 
 The Chinese government does not set  any compulsory requirements fo r transfer of technology and 
local content when approving an investment ag reement. Any transfer of technology in an 
investment is absolutely up to the contracting parties of the negotiation. 
 
EC Question  
It is stated that "in 2006, the State Council promul gated the Regulations on the Protection of the Right 
of Communication through Information Network (among others)". Could China explain how the 
aforementioned regulations tackle the di stribution of IPR- infringing contents? 
 
Answer
 
 Please refer to the relevant stipulations under the Regulation on the Protection of the Right of Communication through Information Network. 
 
EC Question  
Could China provide information on how many admi nistrative actions have been undertaken and how 
many civil and criminal liabilities have been imposed under the aforementioned Regulations?  
 Answer
 
 Please refer to the official websites of the Supreme People’s Court, the Supreme People’s Procuratorate and the General Administra tion of Press and Publication for details. 
  WT/TPR/M/199/Add.1 
 Page 347 
 
 
  EC Question 
 
According to the Secretariat's report, administrativ e actions consist of "med iation by the authorities, 
involving a large number of agencies". Could China provide statistical data on the ex officio actions against IPR violations undertaken by the different  administrative bodies engaged in the enforcement, 
classified by administration?  
 
Answer
 
 Please refer to the official websites of  the authorities concerned for details. 
EC Question 
 
Could China explain how the different administrative bodies mentioned in the answer to EC 
questions 104 are coordinated?   Answer
 
 The State Leading Group of IPR under the State Council coordinates different IPR administrative 
bodies. 
 
EC Question 
 Protection of IPR is a difficult field to be mon itored as regards the concre te implementation of new 
regulations and new bodies established.  Could Chin a provide further information on the number of 
proceedings initiated in 2007, number of condemnin g decisions and origin of Judges in the Chinese 
arbitration commissions?   Answer
 
 Please refer to the official websites of th e Supreme People’s Court and the Supreme People’s 
Procuratorate for details. 
 
Costa Rica Question  
¿Cuáles servicios continúan en manos de empresas de propiedad estatal? ¿Existe algún programa para 
liberalizar esos servicios? (Párrafo 121)  Answer
 
 Upon accession to the WTO, China committed to  liberalize near 100 service sectors according to 
trade in services classification. After accession, China implemented all of its commitments. In 
addition to that, China made two new rounds of o ffers in the DDA negotiations to further liberalize 
a couple of services sectors. In the future, China will also decide whether or not to further 
liberalize trade in services according to the development of services industry and regulatory 
capacity. 
 
Costa Rica Question 
 
¿Existen límites máximos a la participación extranje ra en el capital social de empresas de servicios?, 
si la respuesta es afirmativa, ¿Cuáles son eso s límites y en cuales sectores? (Párrafo 123) 
 WT/TPR/M/199/Add.1 
Page 348  
 
  Answer
 
 China’s service schedule of specifi c commitments laid out detaile d market access conditions for 
various service sectors. In many sectors such as co nstruction, distribution,  banking and tourism, 
wholly foreign-owned enterprises are allowed wh ich means foreign capital participation could be 
100 per cent. For details, please refer to China’s Schedule of Specific Commitments on Trade in 
Services.   
Costa Rica Question 
 
¿Cuáles son las principales diferencias normativas  que aplican para los bancos nacionales y los 
bancos privados extranjeros? (Párrafo 138)  
Answer
 
 
According to the market access conditions specified in China’s schedule of specific commitments, 
China adopted the Regulations on Administratio n of Foreign-funded Banks and the Rules for 
Implementing the Regulations on Administration of Foreign-funded Banks to administrate the 
establishment of foreign-funded banks. China co mmitted to accord full national treatment to 
foreign-funded banks in its schedule of specific commitments. As far as regulations on business 
operation are concerned, the same laws or reg ulations apply to foreign-funded banks as to 
domestic banks. 
 
Costa Rica Question 
 ¿Existen limitaciones a las operaciones comerciales que puedan realizar los bancos comerciales 
extranjeros? (Párrafo 142)  
Answer
 
 
According to the Regulations on Administration of Foreign-funded Banks, wholly foreign-funded 
and Chinese-foreign joint-venture banks may engage in the same business operations as domestic 
commercial banks, both in local and foreign currency. 
 
Costa Rica Question  
Se menciona en el informe la existencia de  un registro de trabajadores ("hukou") que sigue 
diferenciando entre trabajadores urbanos, rurales, temporales y permanentes. Se indica que los 
trabajadores registrados en zonas rurales están en situación de desventaja en relación a los de zona 
urbana, ya que sus empleadores no cubren los der echos de los trabajadores relacionados con la 
atención sanitaria, vivienda y educación de sus hijos.  (Párrafo 33) Al respecto podrían aclararnos lo 
siguiente:  9. ¿Los derechos laborales de los trabajadores se  diferencian, dependiendo de la forma en que se 
encuentren registrados?  
10. Si existe diferenciación en sus derechos, ¿cuáles  son las razones de realizar esa diferenciación 
en el otorgamiento de derechos laborales? 
 
Answer
 
 
Every Chinese citicizen has the equa l right to work. However, it should be noted that different jobs 
have different qualificaion requirements. 
  WT/TPR/M/199/Add.1 
 Page 349 
 
 
  Costa Rica Question 11 
 
En qué consiste el tratamiento impositivo preferencial que ofrece China a las empresas extranjeras? 
(Párrafo 43)  Answer
 
 There is no tax preferenece specially designed for foreign invested enterprises since the new tax law 
came into effect since Januray 1, 2008. 
 
Costa Rica Question  
¿Podrían explicarnos en qué consisten las norm as sobre acceso y divulgación de información en 
investigaciones de daño a la rama de producción? ¿Aplican dichas normas únicamente a las investigaciones sobre daño realizadas por la Oficina de Investigaciones sobre la Existencia de Daño? 
Si es así, ¿qué normas de protección de la informaci ón clasificada aplicaría a las investigaciones sobre 
dumping realizadas por la Oficina de Comercio  Leal de Importación y Exportación (BOFT)? 
 
Answer
 
 Please refere to Regulations on Antidumping 
 
Costa Rica Question  13 
 
En el informe se menciona que en el período de estudio, China inició 39 nuevas investigaciones 
antidumping. ¿Podrían citarnos si en alguno de esos casos se aplicaron medidas provisionales con un 
plazo de aplicación superior a cuatro meses con el fi n de determinar si un derecho inferior al margen 
de dumping sería suficiente para compensar el da ño a la rama de producción nacional? (Párrafo 61.) 
 
Answer
 
 Please refer to China’s notification to the WTO. 
 
Costa Rica Question  14 
 
En el informe se menciona que las decisiones de  las autoridades en materia de salvaguardias no 
pueden recurridas. ¿Podrían explicarnos porqué las decisiones de las autoridades en materia de 
medidas de salvaguardia no pueden ser recurridas mi entras que las decisiones en materia de medidas 
antidumping y compensatorias si se pueden recurrir? (Párrafo 62.)  
Answer
 
 Please refer to the Regulations on Safeguard Measures. China has implemented its safeguard 
measures in compliance with WTO rules.  
Costa Rica Question  18 
 
¿Dónde se pueden encontrar las regulaciones que debe n cumplir los productos de terceros países para 
poder ser importados y comercializados en China? ¿Existe alguna institución que se encargue de dar 
dicha información? (Párrafo 70.)  WT/TPR/M/199/Add.1 
Page 350  
 
  Answer
 
 China established its enquiry points to deal with enquiries from interested parties. For example, for information related to technical regulatons, you can contact Chinese TBT Enquiry Point. The 
website is: www.tbt-sps.gov.cn 
 
Costa Rica Question  19 
 
China menciona que aplica el "Plan de Acción de Alimentos Seguros" como medio de velar por la 
seguridad de los alimentos, siendo necesario que lo s productores de alimentos soliciten permiso a las 
autoridades competentes de inspecci ón de la calidad para poder comerc ializar sus productos, incluida 
la inspección de las instalaciones. ¿Cómo aplica este procedimiento para el caso de productos 
alimenticios importados de ter ceros países?  (Párrafo 75.) 
 
Answer
 
 
China develops and adopts technical regulations and standards on food safety for both domestic 
and imported food products to comply. 
 
Costa Rica Question  20 
 
¿Cómo aplica China el requisito de la marca de  certificación obligatoria (CCC) en los productos 
importados? ¿Se verifica en frontera? ¿Qué sucede si el producto no cuenta con dicha marca? 
(Párrafo 77.)  
Answer
 
 
The Compulsory Product Certification (CCC) Syst em is developed and im plemented equally to 
domestic and imported products. The Secretaria t report has provided abundant and detailed 
information on this system. For better understanding  these inormation, please contact CNCA or go 
to its website: www.cnca.gov.cn. 
 
Costa Rica Question  21 
 
La Administración de Certificación y Acreditación (CNCA) encargada de certificación y acreditación 
reconoce las certificaciones, pruebas y exámenes rea lizados por organismos extranjeros mediante el 
sistema de reconocimiento multilateral. ¿Quiere decir esto que China reconoce los acuerdos de 
reconocimiento mutuo (MLA) por ejemplo, en el marco de la Cooperación Internacional de 
Acreditación de Laboratorios (ILAC)? (Párrafo 79.)  
Answer
 
 China fulfills its internatonal obligations under th ose international agreements to which China is a 
party.  
Costa Rica Question  22 
 
¿Utiliza China el sistema de evaluación de la conf ormidad de primera parte, conocido también como 
Declaración de Conformidad del Proveedor? Si es así , ¿en qué productos se permite el uso de la 
misma? (Párrafo 80)   WT/TPR/M/199/Add.1 
 Page 351 
 
 
  Answer  
 Adoption of Supplier Declaration of Conformity (S DOC) requires a series of work on legislation 
and system to guarantee, which China needs curr ently. Conditions are not matured for China to 
use SDoC. 
 
Costa Rica Question 
 
¿Podrían indicarnos si la nueva ley antimonopolio que entrará a regir en agosto de este año, será de 
aplicación nacional a todos los agentes económicos que operan en China, es decir, tanto a las 
empresas del sector público como privado? ¿Se encu entran cubiertos bajo esta ley los monopolios y 
las empresas estatales con derechos excl usivos otorgados por el Gobierno?  
 
Answer
 
 
Please refer to the definite stipulations of  Articles 2 and 7 under the Antimonopoly Law. 
Costa Rica Question 
 
Según se menciona en el informe, las fusiones y adqu isiciones por encima de cierta escala requerirán 
una aprobación ex-ante por parte del Consejo de Es tado, no obstante esta escala no se especifica en la 
ley. Al respecto, ¿se prevé el establecimiento de  una escala determinada para la aprobación de las 
fusiones y adquisiciones o quedará a criterio de la  Autoridad competente la determinación de la 
misma? (Párrafo 213.)   
Answer
 
 
Article 21 of the Antimonopoly Law stipulates that in case a concentration reached the level under 
the notification criteria set by the State Council; the operator shall notify in advance the antimonopoly enforcement authorities with a report. Without notification the concentration shall not be implemented. Besides, Article 22 stat es that a concentration refers to the following 
situations, shall not notify to the antimonopoly execu tion authorities (for details please refer to this 
Article). 
 
Costa Rica Question 
 
En el informe se establece que la inclusión de lo s monopolios administrativos dentro de la nueva ley 
antimonopolio podría aumentar las dificultades para aplicar dicha ley, ¿podrían explicarnos qué se 
entiende por monopolios administrativos?, ¿existe nor mativa específica para regular este tipo de 
monopolios a nivel local que pueda ir más allá de  lo contenido en la nueva ley antimonopolio? 
(Párrafo 213.)  
Answer
 
 
Article 8 of the Antimonopoly Law stipulates that Administrative bodies organizations mandated by 
laws and regulations to have the authority to admin ister public affairs shall be prohibited to abuse 
administrative power, to eliminate or restrict co mpetition. For details please refer to Chapter 5: 
Abuse of Administrative Power to E liminate or Restrict Competition. 
 WT/TPR/M/199/Add.1 
Page 352  
 
  Costa Rica Question 
 
De acuerdo con el informe, algunas actividades relaci onadas con la agricultura se encuentran fuera del 
alcance de la nueva ley antimonopolio, ¿podrían indicarnos cuáles sectores específicos no se encuentran cubiertos dentro de dicha ley?   Answer
 
 Please refer to the provisions of Articles 15 and 55 under the Antimonopoly Law.  
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