. /.  WORLD TRADE  
ORGANIZATION  G/TRIMS/W/45 
7 October 2005 
 (05-4534) 
Committee on Trade-Related Investment Measures Original:   English 
  
 
COMMUNICATION FROM CHINA 
 
 
 The following communication, dated 6 October 2005, is being circulated at the request of the Delegation of the People's Republic of China. 
 
 
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TRANSITIONAL REVIEW MECHANISM PURSUANT TO PARAGRAPH 18 OF THE 
PROTOCOL ON THE ACCESSION OF THE PEOPLE'S REPUBLIC OF CHINA ("CHINA") 
 
Information notified by China on Annex 1A of the Protocol 
 
on Accession of the People's Republic of China  
 
 
II. ECONOMIC POLICIES 
3. Investment Regime 
 (a) Completed revisions to investment guidelin es in conformity with the WTO Agreement   
 
In line with the WTO Agreemen t, China has revised again the Catalogue for the Guidance of Foreign 
Investment  in the year of 2004, which was put into effect on 1
st January 2005. The revised version and 
its relevant information can be found at the official website: www.english.mofcom.gov.cn . 
 
IV. POLICIES AFFECTING TRADE IN GOODS 
 
8. Trade-Related Investment Measures  (a) Elimination and cessation of enforcement of trade and foreign exchange balancing 
requirements, local content and export performance offsets and technology transfer 
requirements made effective through laws, regulations or other measures 
 
Before accession to the WTO, China had already modifi ed three basic laws in respect of foreign direct 
investment – Law on Sino-Foreign Equity Joint Ventures of the People’s Republic of China , Law on 
Sino-Foreign Cooperative Joint Ventures of the People’s Republic of China  and Law on Foreign-
Invested Enterprises of the People’s Republic of China  – as well as their implementing rules.  The 
revised laws and implementing rules eliminated or ceased the application of provisions on foreign exchange balancing, local content, export performance and mandatory technology transfer 
requirements.   G/TRIMS/W/45 
Page 2  
 
  
(b) Amendments to ensure lifting of all me asures applicable to motor vehicle producers 
 restricting the categories, types or models of vehicles permitted for production (to be  completely removed two years after accession) 
 According to the Policy on Development of Auto Industry  promulgated on 1
st June 2004, under the 
prerequisite of compliance with the national sta ndards, automobile manufacturers are free to choose 
the category, type and model of their products.  M eanwhile, the Policy also s tipulates that one foreign 
investor may establish not more than two joint ventures producing cars of the same category (passenger car, commercial vehicle or motorcycle).  This limit does not apply to foreign investors in 
cases where they acquire other domestic automob ile manufactories together with their Chinese 
partners.   
 
(c) Increased limits within which investment s in motor vehicle manufacturing could be 
approved at the provincial government at the levels outlined in the Report 
 
The new Policy on Development of Auto Industry  has reformed the government approval system on 
investment projects of automobile manufacturers.  Except for a few investment projects in certain 
categories (as specified in Article 43 of the Policy) , which are subject to verification system, all the 
other projects are only required to be put on gover nment record before they are implemented.  
Meanwhile, the administrative authority of the provinci al government is also expanded in the Policy.   
 
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