RESTRICTED  WORLD TRADE  
ORGANIZATION  S/C/W/265 
14 September 2005 
 (05-4015) 
Council for Trade in Services Original:   English 
  
 
 
COMMUNICATION FROM THE SEPARATE CUSTOMS TERRITORY OF TAIWAN, 
PENGHU, KINMEN AND MATSU 
 
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 12 Septem ber 2005, from the delegation of the Separate 
Customs Territory of Taiwan, Penghu, Kinmen and Ma tsu is being circulated to the Members of the 
Council for Trade in Services.   
 
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It is our understanding that, in accordance w ith the provisions of the WTO Agreement, 
China’s Accession Protocol, the Report of the Wo rking Party on China’s Accession, and China’s 
Schedule of Specific Commitments, upon its accession, China confirmed that it will publish a list of 
all organizations that were responsible for aut horizing, approving or regul ating service activities for 
each service sector, and it would publish in the offici al journal all of China's licensing procedures and 
conditions prior to becoming effective. China was also committed to ensuring that licensing 
procedures and conditions would not act as barriers to market access and would not be more trade 
restrictive than necessary. We re cognize China’s efforts to improve its business environment and its 
implementation of WTO commitments over the past few years, with the aim of further integrating 
with the global economy. In the interests of achievi ng this goal, it would be appreciated if China could 
provide further clarification, in its responses to our questions below, of certain aspects of its 
implementation of market access commitments in the Telecommunications and Tourism and Travel 
Services sectors as contained in its Schedule of Specific Commitments.  
 I. TELECOMMUNICATIONS SERVICES 
1. We note that, since the year 2000, the Chinese government has promulgated and released 
several laws and regulations governing the tel ecommunications industry, including the China 
Telecommunications Regulations, the Administ rative Regulations of Foreign-invested 
Telecommunications Business, the Catalogue  of Telecommunications Services, the 
Administrative Regulations of Licenses for Telecommunications Services, and the 
Administrative Regulations of the Internet Services.  
Apart from the above-mentioned telecommunica tions-related laws and regulations, please 
advise whether are there any others that apply to foreign firms interested in investing in 
telecommunications businesses in China? If so, it would be appreciated if China would kindly 
provide them to us. S/C/W/265 
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 2. In line with their WTO accession commitments, China issued the China Telecommunications 
Regulations in September, 2000. Are there any plans to revise the Regulations in the near 
future? As we understand that China is curre ntly drafting Telecommunication Act. If so, 
could provide a reasonable period for comment  to the appropriate authorities before 
promulgated, and also could we pl ease be provided with a draft copy.  
3. Upon accession to the WTO, China promised to follow the principle of “independent 
regulators”, as outlined in Article 5 of the Basic Telecommunications Reference Paper. According to that article, the regulatory body is separate from, and not accountable to, any supplier of basic telecommunications services, and the decisions of and the procedures used by regulators shall be impartial with respect to all market participants.  
 We would appreciate knowing how the Chinese gove rnment acts to ensure consistency with 
Article 5 of the Basic Telecommunications Refe rence Paper. Please provide a comprehensive 
list of the regulatory authorities and the scope of territories under the Ministry’s charge. In 
particular, what measures have been taken to make sure that the telecommunications 
regulatory authority is organizationally sep arated from State-run telecommunications 
operators and independent  from their operations? 
4. Articles 4 and 6 of the Administrative Regulati ons of Foreign-invested Telecommunications 
Business, state that the Ministry of Inform ation Industry should follow “the relevant 
regulations” to clarify areas open to foreign investment, and the stake ratios of indigenous investors and foreign investors at different time of periods.  
Could China please elaborate on what constitut es “the relevant regulations” and provide 
further information. 
5. Provisions on the qualifications for a telecomm unications operator, namely Articles 10 and 13 
of the China Telecommunications Regulations and Articles 8 through 10 of the Administrative Regulations of Foreign-invested  Telecommunications Business, mention that 
a major foreign investor must have “achie vements and business experience”. We should be 
grateful for a precise definition of the term “achievements and business experience”. 
6. According to the provision on interconnection dispute settlement in Article 2.5 of the WTO 
Telecommunications Reference Paper, an opera tor requesting interconnection with a major 
operator may have recourse, either at any time or after a reasonable period of time which has 
been made known publicly, to an independent  domestic body to resolve disputes regarding 
the terms, conditions and rates for interconnecti on within a reasonable period of time, to the 
extent that these have not been established previously.  
It would be appreciated if China would please: 
(i) Explain and provide the laws and regulations governing interconnection 
dispute settlement and unb undling network elements. 
(ii) Indicate whether fulfilment of the obligation to unbundle network elements is 
limited to predominant telecommunications operators or whether all 
telecommunications operators shall fulf il the obligation to unbundle network 
elements. 
(iii) Advise what length of period must pass after a compromise deadline before a 
competent authority may intervene in interconnection negotiations carried out by telecommunications operators.   S/C/W/265 
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 Information on any further relevant provisi ons covering interconnection would also be 
appreciated. 
7. According to the provision on universal service in Article 3 of the WTO Basic 
Telecommunications Reference Paper, any Memb er has the right to define the kind of 
universal service obligation it wishes to maintain . Such obligations will not be regarded as 
anti-competitive per se , provided that they are administered in a transparent, non-
discriminatory and competitively neutral ma nner, and are not more burdensome than 
necessary for the kind of universal service defined by the Member.  
According to Article 44 of the China Teleco mmunications Regulations , telecommunications 
operators shall fulfil the related telecommunica tions universal service obligation pursuant to 
the “related regulations of the State”. The Administrative Regulations of Telecommunications 
Universal Service Cost Compensation shall be jo intly enacted by the Ministry of Information 
Industry and the Ministry of Finance under the State Council as well as the competent authority in charge of prices control, and then  be forwarded to the State Council for approval 
before its promulgation.  
Could China please explain provide details of the contents of the “related regulations of the 
State”. Furthermore, have the Administrative Regulations of Telecommunications Universal 
Service Cost Compensation been enacted and promulgated? If yes, please provide the relevant data for our reference and, in the absence of any relevant regulations, please advise what is 
the schedule for their legislation? 
 II. TOURISM AND TRAVEL-RELATED SERVICES 
8. According to Part 9.B of China’s Schedule of  Specific Commitment on Services, within six 
years after accession, there are to be no restrictions on the establishment of branches by a joint-venture travel agency/tour operator and the requirement on registered capital of foreign-
invested travel agency/tour operators is to be  the same as that of Ch inese travel agency/tour 
operators.  
In view of the fact that it has been almost f our years since China joined the WTO, could we 
please be advised of when the Regulations on Administration of Travel Agencies will be revised to contain the above commitments. 
9. Could China please elaborate on the expected le ngth of the trial period for the Provisional 
Regulations on the Establishment of Foreign- controlled and Wholly Foreign-owned Travel 
Agencies, and advise whether the relevant regul ations will ultimately be included in the 
Regulations on Administration of Travel Agencies. 
10. Article 30 of China’s Administrative Regulations on Travel Agencies regulates the 
qualification requirements for foreign tour operat ors. In addition to requirements consistent 
with its WTO commitments, there is a require ment that a foreign tour operator to be a 
member of the Chinese Tourism Services Association.  
Could China please explain the details of the requirement, and please indicate, for example, 
whether it contains local residency or citizenship requirements? And also please provide details of qualifications and applica tion procedures for becoming a member.  
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