RESTRICTED  WORLD TRADE  
ORGANIZATION  S/FIN/W/62 
30 October 2007 
 
 (07-4729) 
Committee on Trade in Financial Services Original:   English 
  
 
 
COMMUNICATION FROM CANADA  
 
Transitional Review Mechanism in connection with Paragraph 18 of 
 
the Protocol on the Accession of the People's Republic of China  
 
 
 The following communication, dated 30 Octobe r 2007, from the delegation of Canada, is 
being circulated to the Members of the Committee on Trade in Financial Services. 
  
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1. In accordance with paragraph 18 of China’s accession protocol, and in the interest of 
promoting a constructive dialogue , Canada requests that China provide responses and relevant 
information concerning these questions and comment s before or during the meeting of the Committee 
on Trade in Financial Services to be held on 12 November 2007. 
QUESTIONS AND COMMENTS 
A. I
NSURANCE  
2. In Canada’s 2006 TRM submission (S/FIN/W/56) , Canada outlined its ongoing concern that 
domestic insurance firms continue to receive prefer ential treatment vis-à-vis foreign-invested firms 
with respect to internal branch approvals.  In par ticular, domestic insurance companies appear able to 
obtain multiple branch approvals simultaneously, wher eas foreign insurers are restricted to sequential 
applications for each new branch.   How will Chin a ensure that national treatment will be provided 
with regard to branch approvals going forward, particularly in light of China’s GATS commitment to 
permit branch expansion of insuran ce firms consistent with the phase  out of geographic restrictions? 
3. At the 2006 Transitional Review in the CTFS, Ch ina noted that the qualification requirements 
for insurance companies seeking to set up asset ma nagement companies applied to both domestic and 
foreign-invested firms and were necessary to ensure the safety of assets under management.  
However, it appears that the minimum asset thre shold requirements set out in Article 8 of the 
“Provisional Measures Governing In surance Assets Management Companies”  do not take into 
account the assets of the foreign parent when calcula ting a foreign-invested firm’s asset level.  As 
such, these requirements can, in effect, only be met by large predominantly domestic firms.  Could 
China please clarify how domestic and foreign-invested firms receive equivalent treatment with respect to investment channels given that access to several investment channels is limited in practice 
to insurance asset management companies?  S/FIN/W/62 
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  B. B
ANKING  
4. Canada has highlighted in previous submissions its concerns with the “ Procedures on the 
Administration of Foreign Debts of Fo reign Capital Banks in the Territory”  and related implementing 
rules, which have the effect of artificially lim iting a foreign bank's ability to finance its foreign 
currency lending offshore, and in practice restrict  a foreign bank branch’s foreign currency loan 
business.  The interaction of these rules with China’ s requirement that foreign financial institutions 
have three years of business operation in China prior to applying for a local currency license, appear 
to severely limit market access opportunities for newly established foreign bank branches.  Could 
China please indicate whether it is considering re vising its foreign borrow ing restrictions or 
eliminating the 3 year waiting period for foreign fina ncial institutions to be eligible to apply for a 
local currency license? 
C. SECURITIES  
5. Canada understands that China plans to lift its prohibition on the licensing of securities 
companies, including joint-ventures, prior to the end of 2007.  Could China please indicate whether it still expects to meet this timeframe for r esuming the issuance of new securities licenses? 
D. F
INANCIAL INFORMATION SERVICES  
6. According to the “Measures for the Administration of Release of News and Information in 
China by Foreign News Agencies”  promulgated by Xinhua News Agency on September 10, 2006, 
foreign news agencies are required to have entities designated by Xinhua News Agency act as their 
agents in China.  Canada understands that this requirement applies exclusively to foreign news 
agencies and the only entity designated thus far to act as an agent is the China Economic Information 
Service (CEIS).  Could China please explain how th e requirement for foreign news agencies to act 
through an agent is consistent with China’s national treatment commitments under banking sub-sector 
(k): Provision and transfer of financial informa tion, and financial data processing and related 
software by supplier of other financial services?  
7. Further to the abovementioned measures, it app ears that Xinhua News Agency has regulatory 
oversight for the provision of financial informa tion services by foreign service providers.  Canada 
understands that Xinhua also provides financial info rmation services on a commercial basis in China.  
Could China please clarify how this practice is c onsistent with paragraph 309 of China’s accession 
protocol, which specifies that “…for the services included in China’s Schedule of Specific 
Commitments, relevant regulatory authorities would be separate from, and not accountable to, any 
service suppliers they regulated…”?  
8. As per China’s GATS Schedule of Specific Commitments under banking sub-sector (k), 
providers of financial information services do not appear to face restrictions on their ability to 
establish in China.  Please confirm that foreign providers of financial information services may 
incorporate in China. 
E. PENSIONS  
9. During the 2006 Transitional Review in the CTFS,  China reported on the number of licenses 
granted to companies to offer enterprise annuiti es services.  Could China please provide further 
information on the licensing requirements for prov iding enterprise annuities services, particularly 
those requirements maintained by the relevant sectoral regulatory bodies?  S/FIN/W/62 
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  F. GENERAL  
10. While Canada recognizes that regulatory tr ansparency has improved significantly since 
China’s accession to the WTO, concerns remain  regarding lengthy a pproval procedures for, inter alia , 
new branch locations, and ambiguity in licensing application processes, which can be unclear and 
leave significant room for interpretation.  In particular, improved transparency surrounding 
requirements and timelines for obtaining pre-licensi ng invitations would provide greater clarity and 
predictability for financial sector participants seeking to expand their operations in China.   
 
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