WORLD TRADE ORGANIZATION  
ORGANISATION MONDIALE DU COMMERCE  
ORGANIZACIÓN MUNDIAL DEL COMERCIO WT/TPR/M/230/Add.1 
22 February 2011 
 (11-0903) 
Trade Policy Review Body 
31 May and 2 June 2010 Original: English/Spanish 
 anglais/espagnol  inglés/español 
TRADE POLICY REVIEW 
CHINA 
 
Record of the Meeting  
Addendum  
Chairperson:  H.E. Mr. Bozkurt Aran (Turkey) 
 
 This document contains the advance writte n questions, and replies provided by China.1 
__________________________________________________________________________________ 
 
Organe d'examen des politiques commerciales 31 mai et 2 juin 2010 
 
EXAMEN DES POLITIQUES COMMERCIALES 
CHINE 
 
Compte rendu de la réunion
 
Addendum  
Président:  S.E. M. Bozkurt Aran (Turquie) 
 
 Le présent document contient les questions écr ites communiquées à l'avance et les réponses 
fournies par la Chine.1 
__________________________________________________________________________________  
Órgano de Examen de las Políticas Comerciales 
31 de mayo y 2 de junio de 2010  
EXAMEN DE LAS POLÍTICAS COMERCIALES 
CHINA 
 
Acta de la reunión
 
Addendum  
Presidente:  Excmo. Sr. Bozkurt Aran (Turquía) 
 
 En el presente documento figuran las preguntas 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 en español solamente.  WT/TPR/M/230/Add.1 
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  REPLIES PROVIDED BY CHINA 
BRAZIL – Part 1  
Report by the Secretariat 
IV. T RADE POLICIES BY SECTOR  
5) S ERVICES  
ii) Financial services 
Question 1 Paragraph 47 - "The authorities have recently introduced various measures to strengthen 
supervision, and further develop the capital ma rket, including the establishment of a new board 
(ChiNext) for start-up businesses, and conversion of non-tradable shares to tradable shares". 
1. Could China please provide an evaluation of the results of the various measures to 
strengthen supervision in terms of the intended objectives of such measures?  
Answer 
China carries out supervision on securities market a ccording to the Securities Law and other relevant 
regulations. Regulatory measures are in line with do mestic market situation and reflect China's WTO 
commitments. These measures are helpful to promote stable and sustainable development of the 
securities market, and the authority is of the view that  the goal of market supervision in this regard has 
been achieved in general.  
China's recent measures concerni ng the securities market include, inter alia , conversion of non-
tradable shares to tradable shares,  and establishment of the new growth enterprise board (the ChiNext 
as mentioned in the Secretariat Report). Regarding the reform to convert non-tradable shares to 
tradable shares, the number of the listed compani es which has completed or has initiated the reform 
procedures has reached 1,308 by the end of Marc h 2010, which accounted for 99.32% of the total 
market value. The reform has generally fulfilled its intended objectives. Regarding the new growth 
enterprise board, Interim Measures on Administration of Initial Public Offering and Listing on 
Growth Enterprise Board  was promulgated on 31 March 2009, and by the end of April 2010 
altogether 78 companies have been listed on the new board, which has been functioning smoothly. 
Other measures include, for example, further impr ovement of the Agency Share Transfer System 
which has been implemented on a pilot basis. At the end of 2009 there were 59 companies listed in 
the system. 
2. Could China please elaborate on the effects of such measures in the context of global 
financial crises?  
Answer 
Since the outbreak of the global financial crisis, China has followed closely its development. The 
authorities have enhanced monitoring and early wa rning on the systemic risks of the securities and 
futures sector. Effective measures have been taken to  boost market confidence with the exploration of 
means and channels to optimize resources allocation in the capital market. Unfavorable situation in 
the securities market was gradually reversed, which provided important support to the defense against 
the shocks of the global financial crisis and also  the stabilization and development of the national 
economy.  WT/TPR/M/230/Add.1 
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  Question 2 
Paragraph 48 - "Recent reforms include a recapita lization of the Agricultural Bank in late 2008 
and the start of a process of conversion into a shareholding bank in 2009; the reform of the 
Agricultural Bank is still in progress." 
1. Could China please inform whether a deadlin e was established to conclude the reform of 
 the Agricultural Bank? 
Answer 
The Chinese Government approved the program for the joint stock system reform of the Agricultural 
Bank of China (ABC) at the end of 2008. The reform  is carried out in three phases, namely financial 
reorganization, corporate governance reform and IPO in the capital market. So far the first two phases 
are basically completed, and the preparations fo r IPO are underway. No dead line was established for 
the reform of the bank.  
2. What are the main obstacles in the process of reform the Agricultural Bank? 
Answer 
In view of the experience of the past joint stock system reforms of wholly  stated-owned commercial 
banks, after the phase of financial reorganization, key issues of the reform are to improve corporate 
governance mechanism and enhance process banking in novation. Currently the Agricultural Bank of 
China (ABC) is pushing forward the reform  on corporate governance and process banking as 
requested by the regulating authorities in order to as sure the final success of the joint stock system 
reform.  
Paragraph 52 - "China does not have a deposit insurance scheme; the authorities are currently 
considering the possibility of designing such a scheme" 
Could China please provide some information on the guidelines of the deposit insurance 
scheme? 
Answer 
China attaches great importance to the protection of interest of depositors. The authority began 
legislative work in this respect as early as 2006 in order to provide a legal basis for the establishment 
the deposit insurance scheme. In terms of the guide lines for the deposit insurance scheme, preliminary 
considerations are firstly to introduce the schem e in a compulsory manner, which means that the 
scheme will cover all financial institutions in Chin a that absorb deposits, ex cept for branches in China 
of foreign banks; and secondly to appl y differentiated rates in order to contain risk-carrying behaviors 
of institutions with higher risks. 
BRAZIL – Part 2
  
Question 1 According to the Secretariat's Report (Section IV, paragraph 113), "Most tax incentives are in 
the form of enterprise income tax rate reduction s or exemptions, although they may also take 
the form of VAT reductions.  Under the Enterp rise Income Tax Law, incentives are now given 
to enterprises investing in less developed regions, such as western China, and for investment in 
activities encouraged by the Government, such as agriculture, environmental protection,  WT/TPR/M/230/Add.1 
 Page 5 
 
 
  renewable energy, software and integrated circu its industries, and securities investment and 
fund development.  For example, enterprises engaging in high-tech and new technology activities pay a tax rate of 15%; if these enterprises were established in special economic zones (SEZs) or Shanghai Pudong New Area on or aft er 1 January 2008, they are exempt from income 
tax in the first two years from the year durin g which revenue from production and business 
operation is first derived, and then subject to a ra te of 12.5% (i.e. half of the standard statutory 
rate of 25%) in the third to the fifth years.  
Which requirements must an enterprise fulfill in order to be allowed to establish itself in a 
special economic zone?  
Answer Special Economic Zone (SEZ) is now more a geogra phic concept. SEZs refer to the three cities of 
Shenzhen, Shantou and Zhuhai in the Guangdong Provi nce, the city of Xiamen in Fujian Province, 
and also the whole Province of Hainan. Nowadays, access requirements concerning foreign and/or domestic investment are generally applied natio nwide and there are no other requirements for 
enterprises to fulfill if they want to be established in SEZs. 
Question 2 According to the Secretariat's Report (Sectio n V, paragraph 45), "Since China's previous 
Review, the Government has been continuing wi th its direct intervention measures to "guide" 
resources into certain sectors of the economy, pa rticularly manufacturing. China uses industrial 
policies, combined with expansionary fiscal and monetary policies, to boost the development of 
the manufacturing sector.  For example, in earl y 2009, China issued industrial revitalization 
plans for ten sectors.  The only services sector wa s logistics; the manufacturing sectors produced 
nearly 80% of China's total industrial value added and accounted for around one third of 
China's GDP.  These nine sectors had all been affected greatly by reduced external demand 
(Chapter III).  Their regulator, the Ministry of Industry and Information Technology (MIIT), 
along with the NDRC, intends to promote the development of these sectors by adjusting the 
VAT rebate rates on exports, providing prefere ntial loans, supporting their innovation, and 
"guiding" the consolidation of industrial structures.  
Could China elaborate further on specific measures taken to promote the development of the 
mentioned sectors and specify the amount of resources the Government of China made available under these "industrial revitalization plans"?  
Answer Aside from adjustments of the VAT rebate policy on export of certain products, tax policies China 
adopted under the industrial revitalization plans fo r ten sectors are mainly the purchase tax reduction 
by half, or 5%, for passenger cars with displace ment at and below 1.6 liters during the period from 
20 January to 31 December 2009. In 2010, the pur chase tax on these cars is adjusted backward to 
7.5% from 5%, which is still lower than the normal rate of 10% and will be  valid through the year. 
Tax rebate on exports is an internationally prev ailing practice. China adjusted the value-added tax 
rebate rates in the fight against global financia l crisis because enterprises have suffered great 
difficulties with the shock of the crisis and have requested strongly for such adjustments. Brazil may 
refer to our answer to the U.S. Question 30 where such background situation is elaborated with an 
example. China maintains that sin ce the adjustments made to the tax rebate rates on exports strictly 
follow the principle that the rebate rate be no higher than the rate levied, they are not inconsistent with 
WTO rules. WT/TPR/M/230/Add.1 
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  Financial supports provided under th e industrial revitalization plans for ten sectors are mainly those to 
promote direct consumption, including subsidi es for home appliances going to the countryside, 
automobiles and motorbikes to the countryside, and "old for new" of household appliances. Policies 
and measures including those aforesaid which have b een taken by China in the fight against the global 
financial crisis have been notified to the mon itoring mechanism of the WTO Trade Policy Review 
Body (TPRB) for the financial crisis. For more deta ils of the policies and measures, please refer to the 
information contained in the monitoring report dr afted by the WTO Secretariat under the mechanism 
which has been verified by China. 
Regarding preferential loans, China would like to take the opportunity to clarify that, commercial 
banks in China follow market principles when providi ng loans. Whether to provide loans to certain or 
certain types of clients, under what conditions to  provide loans, these are all decided by commercial 
banks themselves based on their individual business development strategy and their studies of the 
credit record of the clients, as well as such f actors as costs, earnings, assets quality and risks etc. 
Question 3 
According to Chapter III, paragraph 4 of th e Report by the Secretariat, the General 
Administration of Quality Supervision, Inspect ion and Quarantine (AQSIQ) has reformed its 
entry-exit inspection procedures and introduced  a direct release system to facilitate trade. 
How does this "direct release system" differ from  former "entry-exit inspection procedures"? 
What are the advantages of this direct release sy stem vis-à-vis preceding procedures? Is there 
any improvement yet to be made in current "entry-exit inspection procedures?"  
Answer According to the provisions of the Notice on Im plementing the Inspection and Quarantine Direct 
Release System of Import and Export Goods  issued by AQSIQ on 18 July 2008 (AQSIQ 
Notice No. 28 of 2008), "direct release" refers to  the convenient and efficient inspection and 
quarantine release methods adopted by inspection and quarantine authorities for those import and 
export goods that meet the specified conditions, and it includes import direct release and export direct 
release. 
Import direct release means that the inspection and quarantine authorities at the ports do not take 
inspection or quarantine measures for the eligible import goods, which will be directly delivered to 
their destinations and will be subject to inspec tion and quarantine measures and released by the 
inspection and quarantine authorities at their destina tions. Export direct release means that enterprises 
can directly handle customs clearance procedures by presenting the customs clearance form issued by 
the inspection and quarantine authorities at the place of origin to the customs authorities at the place 
of customs declaration, which rele ase the eligible export goods that are identified as qualified after the 
inspection and quarantine measures by the inspection and quarantine authorities at the place of origin. 
Ineligible goods according to the provisions of the Notice are still subject to existing "exit-entry 
inspection procedures". The new syst em has facilitated the import and export of the eligible goods. 
However, the existing "exit-entry in spection procedures" remain valid. 
Question 4 
According to Chapter III, paragraph 4 of the Report by the Secretariat, primary agricultural 
products sold by farmers directly to cons umers are exempt from VAT on grounds of, inter alia,  
administrative simplicity, while imports of like products are subject to VAT.   WT/TPR/M/230/Add.1 
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  On which grounds can this VAT tax exemption to  primary agricultural pr oducts be consistent 
with GATT's principle of national treatment on internal taxation and regulation (GATT Article III, 4)? 
Answer 
Regarding this policy, China has made explanation and clarifications for several times. In summary, 
we have the following points to make:  
First of all, China has a huge number of small farmers across the country, which makes it impossible 
to conduct accounting and tax filing. In other words,  to levy value-added tax upon them is infeasible 
and uneconomical because of the huge administrativ e cost. This is the fundamental reason behind the 
policy.  
Second, in China the agricultural production is ma inly based on household operation. The sales scale 
is very small. The VAT exemption is applied only to farmers who sell their own products like a 
kilogram of potatoes in an open air market. This is  completely different from the import of products in 
bulk. Their VAT policies are not comparable.  
Third, as far as we understand, other members with  a VAT system also seem to exempt VAT from 
farmers who sell their own products, while levy ing tax over imported agricultural products.  
Fourth, even if we apply VAT over these farmers,  we would adopt a policy that would establish a 
commercially-meaningful threshold like in other countries. Most farmers would fall below the 
threshold. The real effect would be the same as the current policy.  
Therefore, China does not believe the current policy is not in compliance with its WTO obligations.  
Question 5 
Paragraph 21 of the Report by the Secretariat states that "eight agricultural products are 
currently subject to export prohibitions. Only stat e-trading enterprises are allowed to export for 
cotton, rice, maize, and tobacco. […]". Accord ing to paragraph 24 of the same document, 
"China started to gradually phase out agricultu ral taxes in 2004.  As a result, the remaining 
taxes on agricultural products are the tobacco le af tax (20% of the purchase price for tobacco 
leaves) […]". Paragraph 29 of the report explains that "The price of some commodities remains 
controlled" or "guided" by the Government; these include tobacco, edible salt, and "key 
reserve materials" (Chapter III). According to the authorities, the only remaining price control 
in China concerns tobacco". Paragraph 32 of the document provides further that "China's tobacco industry is subject to a state monopoly, with controls over production, marketing, and 
trade of tobacco products". 
Could China elaborate on the relevant taxation  and regulation measures currently applied to 
the tobacco industry and market? Is there any provision regarding the phasing out of these 
measures? 
Answer 
Laws and administrative regulations currently app lied to tobacco industry in China include Law on 
Tobacco Monopoly, Regulations for the Implem entation of the Law on Tobacco Monopoly and 
Interim Regulations on Tobacco Leaf Tax. WT/TPR/M/230/Add.1 
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  Taxes applicable to the tobacco industry include valu e-added tax, consumption tax, tobacco leaf tax, 
enterprise income tax, tax for urban maintena nce and construction and education surcharge. 
Question 6 
Could China provide a definition of "public interest" that would justify some import 
prohibitions, as mentioned in Chapter IV, paragra ph 3, of the Report by the Secretariat? Could 
China provide some examples of measures taken by  the Government to protect public interest 
in China as per Chapter IV, paragraph 3, of the Report by the Secretariat?  
Answer 
List of products subject to import prohibition ma y be found in the QR notification China submitted 
annually to the WTO. It is not difficult to see that prohibition of import of these products, such as 
narcotic drugs and materials that could be used for narcotic drugs, certain chemical wastes etc that are 
harmful to human life or health or environment is in line with the need to protect public interests. For 
details of the prohibition, please refer to  China's QR notifications submitted. 
Question 7 
According to Chapter IV, paragraph 75, of the Report by the Secretariat, China grants no 
export subsidies. 
Could China explain why tax rebates (paragraphs 79-80) should not be considered as export 
subsidies? 
Answer 
Tax rebate on exports is an in ternationally prevailing practice. WTO Agreement on Subsidies and 
Countervailing Measures in Annex I Illustrative List of  Export Subsidies states clearly that tax rebates 
should not be considered as export subsidies if the rebate rate does not exceed the actual rate paid. 
China's adjustments made to the expor t rebate rates strictly follow the principle that the rebate rate be 
no higher than the rate levied. Therefore they are not inconsistent with WTO rules. 
Question 8 
As mentioned in Chapter V, paragraph 4, as well  as in Chapter IV, paragraphs 118, 119, 122, 
123 and 129, of the Report by the Secretariat, China continues to "guide" the allocation of 
capital and resources in the econo my, including the manufacturing sector. Yet the SOEs (state-
owned and state-controlled enterprises) are e ssential to the Chinese economy, although the 
number of SOEs had fallen in recent years. B esides, China's financial system has been 
dominated by state-owned banks, which have traditionally favoured SOEs over domestic 
private enterprises. 
Please explain why, if so, those policies are no t contrary to China's reform of state-owned 
enterprises and development of non-public sector or, to some extent, to WTO market-oriented 
policies. 
Answer 
The Chinese government is comm itted to following and improving the basic economic system of 
keeping public ownership as the mainstay of the eco nomy and allowing diverse forms of ownership to 
develop side by side. While consolidating and de veloping the public sector of the economy, China  WT/TPR/M/230/Add.1 
 Page 9 
 
 
  encourages and supports the development of non-public  economy, adheres to equal protection of real 
rights so as to establish a new situation in which all economic sectors compete on an equal footing 
and reinforce each other. 
The focus of the next-step reform of state-owned en terprises is to further the strategic adjustment of 
the distribution and structure of the state sect or. China will speed up the reforms to introduce 
corporate and share-holding systems in large state- owned enterprises, diversify their ownership with 
the introduction of social capital and improve thei r corporate governance and the salary system for 
senior executives. China will also continue to improve the budget system for managing state capital, 
accelerate the reform of monopoly industries with fu rther expansion of market access and introduction 
of more competition mechanisms.  
Regarding further growth of the non-public sector, Ch ina will make further efforts to create a market 
environment in favour of fair competition among a ll economic sectors. Key points include ensuring 
equal policy treatment in tendering and bidding and government procurement, guaranteeing fair 
market participation opportunities for non-public en terprises, reviewing laws, regulations and policies 
relating to financing, foreign exchange administ ration, land use and public technical services etc so 
that various production factors and resources are equa lly available to non-public enterprises for their 
development. 
China maintains that these policies ar e not contradictory to each other. 
Question 9 
Paragraph 113 of the Government Report indicates that China-Peru signed a Free Trade 
Agreement (FTA), which has yet to enter into force. 
Could China indicate when it exp ects this FTA to enter into force? 
Answer 
China-Peru FTA Agreement became effective on 1 March 2010. 
Question 10 
Concerning China-Peru trade relation, is it possi ble to indicate the main products exported 
from Peru to China? 
Answer 
The main products exported from Peru to China are aquatic products such as fish meals, and mineral 
products such as copper, lead, zinc and iron. 
Question 11 
Does China have any statistics related  to verification and control of preferential rules of origin? 
Which are the main products or sectors invest igated under the various regional and bilateral 
trade agreements China has concluded?  WT/TPR/M/230/Add.1 
Page 10  
 
  Answer 
In 2009, China conducted overseas check over 2,852 cer tificates of origin under preferential trade 
arrangements. Feedback so far shows that 21 of these  certificates are false, which involve mainly fish 
products. 
Question 12 
Concerning the preferential rules of origin under the various regional and bilateral trade 
agreements, does China have any statistics related to  the utilization of the origin accumulation 
principle? 
Answer 
The accumulation principle of the rules of origin  under preferential trade arrangements signed by 
China only involves bilateral (internal) accumulation.  China currently does not have statistics related 
to the utilization of the origin accumulation principle. 
Question 13 
It is known that Chinese new trade legislation co nsiders propolis as a 'healthcare food' whilst it 
is usually considered merely as 'food' by both the international scientific community and the 
market. Because of this unprecedented Chinese in terpretation, companies exporting the product 
to China are now under the obligation of paying a €30.000-license to China's State Food and Drug Administration (SFDA). 
Since the view of the Chinese authorities on the char acterization of propolis is not shared by the 
international scientific community, should this  measure be considered a technical barrier to 
trade? 
Answer 
Currently propolis does not fall into the scope of  common food (or medicinal and edible product) in 
China. According to the Notice on Further Standardization of Administration of Materials for Healthcare Food issued by the Ministry of Health, propolis is listed as a material for healthcare food 
and can only be used in healthcare food but not in common food. 
According to the Measures on Administration of Healthcare Food Registration (for trial 
implementation), products (excludi ng drugs) intended to be produced or sold within China with 
propolis as a raw material shall file application for healthcare food registration with the State Food 
and Drug Administration (SFDA) and obtain health care food approval certificate. These requirements 
are applicable to both domestic and import propolis. 
Relevant testing in a competent inspection institution is required prior to the application for healthcare 
food registration, and the inspection institution will charge testing fee. No charges or fees are 
collected for examination and approval of health care food by the SFDA. China believes that these 
administrative measures are all procedural requirements and therefore are not technical barriers to trade.  
Question 14 
As mentioned in the document WT/TPR/S/230, page 79, paragraph 46, "the Government has 
placed more emphasis on developing services by way of further liberalization of sectors,  WT/TPR/M/230/Add.1 
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  including financial services, telecommunications, and tourism. While the presence of SOEs is 
considerable in key services sectors, such as ba nking, telecommunications, and civil aviation, 
and there are still significant restrictions on forei gn investment and private-sector activities, 
China has adopted some measures to further liber alize services, particularly financial services, 
telecommunications, and tourism. China's co mmitments under the General Agreement on 
Trade in Services have not changed since its previous Review." 
Since China's GATS commitments have not been  substantially modified, may we understand 
that the mentioned liberalization took place most ly under domestic regulation measures? If so, 
have the Chinese government and private compan ies reckoned, during recent years, additional 
investment flows in the mentioned service sectors? 
Answer 
As a developing country, China has been constantly  promoting the reform and opening up in the 
services sector, although the service s industry in China is still in th e early stage of development. 
China will further raise the devel opment level of the services sector  and its proportion in the national 
economy. In this respect, China will continue to cons ummate its policies for market access of services 
sectors, speed up the establishment of an open, fair , and standardized system for services suppliers 
and encourage the participation of private investment including foreign investment. To be specific, 
China is going to expand the br eadth and depth of opening up in the services sector, encourage 
foreign capital to invest in energy conservati on and environmental protection services, modern 
services such as industrial designing, outsourcing, l ogistics etc, and Chinese and foreign companies 
are also encouraged to strengthen R&D cooperation. To build sound foreign investment environment, 
China will continue to streamline procedures for qua lification and licensing. The State Council issued 
Certain Opinions on Accelerating the Development of Services Sector in 2007 and Certain Opinions 
on Further Improving the Use of Foreign Capital  early this year. The Catalogue for the Guidance of 
Industries for Foreign Investment  will be revised for the fifth times, and Catalogue of Advantaged 
Industries for Foreign Investment in Mid-West China  will also be amended in the near future. These 
latest development will certainly result in furt her market access opportunities for foreign services 
suppliers in China. 
Question 15 
The Secretariat Report, on page 98, paragraph 136, states that "legislation, regulations, and 
rules concerning distribution and accounting services have remained largely unchanged since 
China's previous review". 
Could China provide further information on reg ulatory mandates, market access and national 
treatment limitations, horizontal requirements, as well as on domestic laws on distribution and 
engineering sectors? 
Answer 
China has fully implemented its accession commitmen ts on distribution and engineering services. As 
far as the market access, national treatment and horizontal commitments on distribution and 
engineering sectors are concerned, please refer to China's services schedule. In terms of regulatory 
framework and domestic laws, for engineering services, please refer to Construction Law, Rules on 
Administration of Foreign-Invested Construction En terprises, Rules on Administration of Foreign-
Invested Construction and Engineering Design En terprises and Provisional Rules on Construction 
and Engineering Projects ; for distribution services, please see Rules on Administration of Foreign 
Investment in Commercial Sector. WT/TPR/M/230/Add.1 
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  For further opening-up of the sectors, pl ease refer to our answer to Question 14. 
Question 16 
The Report by the Secretariat, Section Trade Po licy and Practices by Measure, Paragraph 160, 
second sentence, states "For inventions depending upon genetic resources the access or use of which is against law and/or administrative reg ulations, the invention should not be granted 
patent rights."  
Could China further elaborate on the requisites China has implemented through law and/or 
administrative regulations to establish the lega lity of the access or use of genetic resources and 
how China applies those requisites on patent examination?  
Answer Access to or use of genetic resources against law and/or administrative regulations refers to the access 
to or use of genetic resources which fails to follow  the provisions of relevant laws and administrative 
regulations of China requiring obtaining prior ap proval from relevant administrative authority or 
permission of owners.  
For example, according to Article 7 of Measures of  the People's Republic of China for Examination 
and Approval of Entry and Exit and Foreign Coopera tive Research and Utilization of Livestock and 
Poultry Genetic Resources, exit of livestock or poultry ge netic resources included in the protection list 
shall obtain prior approval from the Ministry of Ag riculture. No patent shall be granted to an 
invention if the invention is dependent upon livest ock or poultry genetic resource included in the  
protection list whose exit however has not gone th rough the aforesaid approval procedures. 
Question 17 
With reference to the section Trade Policy and Practices by Measure, paragraph 4 of the Report 
by the Secretariat, how does China deal with issu es related to technological or other standards 
which may encompass intellectual property rights, such as patents? Is there an internal policy covering this relationship? 
Answer The relationship between standards and intellectua l property rights (IPRs) is significant both for 
standards development and for sm ooth implementation of rules concerning IPRs in the WTO. China 
submitted document in TBT Committee in this respect  in 2005, and has also promoted discussions on 
the issue within the APEC frame work. Domestically related work  has been advanced. In 2009 
Standardization Administration of China published the draft of the Regulations for the Administration 
of Formulation and Revision of National Standards Involving Patent (Interim)  for public comments. 
Currently, relevant authorities are making further studies on provisions of the draft Regulations based 
on the feedback. 
Question 18 
The Report by the Secretariat, Section Trade Policy and Practices by Measure, Paragraph 158 
states "The revised Law further enables the grant of compulsory licenses in certain 
circumstances for patented pharmaceutical produc ts. This amendment gives effect to the WTO 
General Council Decision on the Implementation of 'Paragraph 6 of the Doha Declaration on 
the TRIPS Agreement and Public Health (...) 'paragraph 6' mechanism."   WT/TPR/M/230/Add.1 
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  Has China already taken any preliminary steps with regard to the issuance of compulsory 
licenses within the framework of the system established by the "Decision on the Implementation of Paragraph 6 of Doha Declaration on TRIPS Agreement and Public Health? 
(http://www.wto.org/english/tratop _e/trips_e/implem_para6_e.htm). 
Answer China has not issued any compulsory license. 
Question 19 
The Report by the Secretariat, Section Trade Policy and Practices by Measure, 5th paragraph 
of Box III.2 (IPR enforcement), page 63 determines that "Enforcing intellectual property rights at the border is the responsibility of Custom s, which seizes imports and exports of goods 
infringing patents, trade marks, and copyright and related rights (ex officio). The process for 
Customs to protect IPRs at the border depends on  whether the IPR has been filed or recorded 
at Customs (...)."  
Could China further elaborate on how do the Cust oms keep records of IPRs in order to engage 
on ex officio seizures at the border, particular ly with regard to records of patent rights of 
pharmaceutical products?  
Answer 
According to the Regulations on Customs Protecti on of Intellectual Property Rights, intellectual 
property right holder may apply for recordation w ith the General Administration of Customs of 
his/her exclusive right concerning trademark, copyright  and related rights, and patent that is protected 
under laws and administrative regulations of the Pe ople's Republic of China. When applying for the 
recordation, the right holder shall present a writte n application, which shall include the following 
particulars: 
 1. Designation or name of the intellectual property right holder, place of registration or 
nationality, address, name of contact pe rson, phone and fax numbers, e-mail address 
etc. 
 2. Name of registered trademark, classifica tion and name of goods in respect of which 
the use of the trademark has been approved, trademark figure, duration of registration, assignment, change and renewal of registered trademark; name of works, time of completion, classification of works, photos of works, assignment and change of works; name, classification, date of application, assignment and change of patent etc. 
 3. Designation of licensee, goods for which the use of the right is permitted, time limit 
on license. 
 4. Description, origin, Customs at the port of entry or exit, importer or exporter, main 
features and prices, etc. of the goods on which the intellectual property right holder lawfully exercises his right. 
 5. Manufacturers, importers or exporters, Customs at the port of entry or exit, main 
features and prices, etc. of the goods that infringe the intellectual property right, as far 
as it is known. WT/TPR/M/230/Add.1 
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  Where there are evidentiary document s in the contents of the applica tion referred to in the preceding 
paragraphs, the intellectual property right holder sh all attach evidentiary documents. No special 
provisions have been formulated with respect to the recordation of patent rights of pharmaceutical 
products. 
Question 20 
With reference to the Report by the Secretariat,  section Trade Policy and Practices by Measure, 
paragraph 165, could China clarify its parallel impo rt policy, since it is not clear in the Chinese 
trademark legislation whether such procedure is allowed or not, whilst in the copyright 
legislation governmental authorities maintain that they are not prohibited?  
Answer In respect of trademark, the current Trademar k Law does not have provisions concerning parallel 
import. 
In respect of copyright and related rights, parallel import is prohibited in the current Copyright Law. 
In respect of patent, Article 69 of the Patent Law stipulated only the patented products launched on 
the Chinese or international market by the patentee or the patent licensee can be parallel imported to 
China. Therefore, parallel imports can increase th e supply of patented products on the Chinese 
market, without leading to such issues as counterfe iting, or affecting consum ers' health and safety. 
Question 21 
As to Geographical Indications, since China has more than one governmental institution in 
which a geographical indication can be registere d, as it is the case of the State Trademark 
Office, AQSIQ and the Ministry of Agriculture,  could China indicate whether there is an 
Integrated Information System in China for these purposes?  
Answer 
The geographical indication protection is carried ou t by the State Administration for Industry and 
Commerce (SAIC), the Ministry of Agriculture, and General Administration of Quality Supervision, 
Inspection and Quarantine (AQSIQ). They differ from e ach other in respect of legal basis, protection 
means and scope, remedies, division of duties and work focuses. The SAIC protects geographical 
indications by applying collective trademark and ce rtification trademark registration pursuant to the 
Trademark Law. Corresponding remedies for ge ographical indication infringement include 
administrative, civil and criminal ones. The Ministry  of Agriculture has registration administration for 
geographical indications of agricultural products based on administrative rules formulated in accordance with Law on Quality Security of Agricult ural Products. The focus of the protection is on 
geographical indication resources of agricultural products, product quality and traditional farming 
culture. AQSIQ's protection of geographical i ndication focuses on processing, which is based on 
administrative rules formulated in accordance with Product Quality Law. 
Question 22 
Does the direct release system require informat ion on the product's compliance with the 
legislative framework on voluntary and mandatory  standards? (Report by Secretariat IV, 4).   WT/TPR/M/230/Add.1 
 Page 15 
 
 
  Answer 
According to the provisions of the Notice on Im plementing the Inspection and Quarantine Direct 
Release System of Import and Export Goods issued by AQSIQ on 18 July 2008 (AQSIQ Notice No. 82 of 2008), "direct release" refers to the convenient and efficient inspection and quarantine 
release methods adopted by inspection and quaran tine authorities for those import and export goods 
that meet the specified conditions. Convenience or facilitation is offered for those goods eligible for 
direct release only during the inspection and qua rantine release process. These import and export 
goods still have to comply with other relevant la ws and regulations in China concerning inspection 
and quarantine. 
For specific provisions on direct release, please refer to the Notice at http://www.aqsiq.gov.cn/ 
zwgk/jlgg/zjgg/2008/200807/t20080721_82622.htm. 
Question 23 
The Brazilian government would like to know if a ll Chinese national standards are translated 
into English and if they are available to be cons ulted on the Internet? (Report by Secretariat IV, 
45).  
Answer 
Chinese government notifies to the WTO TBT and SPS measures in accordance w ith the transparency 
requirements of the WTO in this respect by subm itting notification form in English. Information 
concerning the notified Chinese national standard s is available at http://www.tbt-sps.gov.cn. 
However, these national standards themsel ves are not translated into English. 
Question 24 
Could China specify which measures were taken with a view to strengthening product testing of 
dairy products? (Report by Secretariat IV, 50).  
Answer 
1. Measures to establish and improve th e testing system for dairy products 
According to the Regulations on Supervision and Administration of Dairy Product Safety (State 
Council Decree No. 536) promulgated on 9 Octo ber 2008, enterprises producing dairy products 
should carry out inspection on dairy products batch by batch before de livery. According to the Notice 
on Strengthening Production Licensing of Dairy Pr oducts (Guo Zhi Jian Shi Jian Han No. 757 of 
2008) issued by AQSIQ, quality safety licensing system should be enforced for dairy products; examination of enterprises' inspection capability should be strengthened for enterprises producing 
dairy products and such enterprises are required to  install relevant testing equipment. Rules on 
examination and licensing of production of dairy products and milk powder for babies and infants 
have been revised to strengthen the on-site exam ination of production and the enforcement of the 
batch-by-batch inspection system of enterprises producing dairy products. 
2. Measures to improve the quality safety standards for dairy products On 27 April 2010 the Ministry of Health issued 66 new national standards on dairy products safety, 
which include 15 new standards for dairy products , 2 production rules and 49 standards for inspection 
methods. These 66 new national standards on dairy pr oducts safety will be implemented successively 
after 1 June 2010. According to the Rules on Supe rvision of Dairy Products Producing Enterprises on WT/TPR/M/230/Add.1 
Page 16  
 
  their Implementation of Quality Safety Responsib ilities (Guo Zhi Jian Shi Jian No. 437 of 2009), 
supervision should be stre ngthened for enterprises producing dairy pr oducts to urge such enterprises 
to implement relevant laws, regul ations and standards concerning food safety. AQSIQ will guide local 
inspection and quarantine authorities to inspect dair y products producing enterprises for report of their 
implementation of the responsibilities related with dair y products safety, for participation in relevant 
training and implementation of new standards.  
3. Measures to adopt risk monitori ng and testing for dairy products 
Measures have been taken to establish risk m onitoring and testing for poisonous and hazardous 
materials of dairy products. Risk monitoring samp ling has been adopted for the dairy industry. 
Testing data analysis, study and judgment have been  carried out for dairy products. Reasons for which 
dairy products producing enterprises fail to fulfil l responsibilities are identified to urge such 
enterprises to improve their management. Purchase in spection and inspection before delivery for dairy 
products are also strengthened. 
Question 25 
The Brazilian government would like to recei ve further information on which concrete 
measures were taken in order to simplify the co mpulsory product certification system (Report 
by Secretariat, IV, 55).  
Answer 
China began to revise the Rules on Administration of Compulsory Product  Certification in 2008. The 
draft of the rules was notified to WTO on 24 June 2008 (G/TBT/N/CHN/339) for comment by members. The rules came into effect on 1 Septem ber 2009. In order to simplify the CCC application 
procedures for enterprises, China has adopted follo wing measures: online application; acceptance of 
CB certificate and testing report issued by IECEE-EB members and authorization of local certification agencies in most cases to do follo w-up inspections after China's certification of foreign manufactures; 
lowering certification fees and avoiding repeated certificating and charges for such equipment in which spare parts and components are already certified; classifying key components to facilitate 
enterprises' application fo r record of changes. 
Question 26 
The increase of domestic consumption is one of the measures regards as necessary to promote 
both global and Chinese macroeconomic balan ce. How does China seek to increase credit for 
consumption? There is mention – in the Chinese report WT/TPR/G/230, page 9 – of a pilot programme consisting of companies extending credi t for consumption in four cities. Which were 
the results? Is there a government assessment of this project? Will there be an expansion of this 
programme?  
Answer 
It is a long-term strategic policy for China to expa nd its domestic demand. China is now striving to 
shift to a growth pattern in which the economi c growth would be driven by both domestic and 
external demands in a balanced and coordinated manner.  
To promote the development of credit for consumption, the authorities have issued a series of policy 
documents and regulations and rules such as Guideline Opinions on Personal Credit Consumption, 
Rules on Administration of Auto Loans  etc.   WT/TPR/M/230/Add.1 
 Page 17 
 
 
  As far as the pilot programme for consumer credit companies is concerned, China Banking 
Regulatory Commission (CBRC) promulgated Provisional Rules on Administration of Consumer 
Finance Company  and chose four cities namely Beijin g, Shanghai, Tianjin and Chengdu for 
establishment of consumer finance companies on a pilot basis. Since no formal assessment of the 
process has been done so far, we now are not in a position to provide information in this respect. 
Question 27 Overinvestment in some sectors is a concern ex pressed by the Chinese Government, as on 
page 8 of WT/TPR/G/230. Such po int may be related with the prevalence of political criteria 
over market mechanisms which may betray signs of  exhaustion in some sector. Which measures 
does the government intend to implement with a view to both reducing investments in known 
overwhelmed sectors and prevent th e recurrence of this event?  
Answer 
China's overall industrial development level is still low, and there is great urgency to address such 
pressing issues as high consumption of resources and energy etc in the industrial development. It is a consistent policy of China to realize stable and healthy development of investment on the basis of 
industrial structure optimization. The two-year 4 tri llion Yuan investment plan staged in response to 
the international financial crisis clearly requires th at government investment be made into the weak 
aspects of China's economic and social developmen t and should not go to general processing industry. 
In accordance with this requirement, the invest ment has been focused on housing projects for low-
income population, rural livelihood projects, key infrastructures including transportation, energy 
saving and emission reduction, ecological construc tion, post-earthquake reconstruction, as well as 
social causes like public hea lth, education and culture. 
Investment structure has been further improved in 2009. The weight of investment in the primary and 
the tertiary industries increased by 0.2 and 1.3 pe rcentage points respectiv ely to 1.7% and 55.9%, 
while that in the secondary industry decreased by 1.5 percentage point to 42.4%. In terms of specific 
areas, the investment in areas directly related to people's livelihood such as education, public health, 
culture and resident services increased by 46.4%,  which was 28.8 percentage points higher than 
in 2008; the investment in infrastructures like tr ansportation and irrigation facilities increased by 
47.7%, 22.1 percentage points higher  than in 2008; that in industrial sectors like manufacturing and 
mining increased by 26.1%, 1.8 percentage points lower than in the previous year, and its weight in 
the total investment decreased by 1.4 percentage points.  
Recently the State Council issued Certain Opinio ns on Containing the Excessive Capacity and 
Repeated Construction of Certain Sectors for Guidance on Healthy Development of Industries (Guo 
Fa No. 38 of 2009). From the perspective of achieving sustainable economic growth, the document proposed further policy considerations in respect of  land supply, environment protection, investment 
administration, information disclosure etc to  curb the overcapacity of those sectors.  
Question 28 
How does the focusing of investments in less produc tive areas impact the credit offer for sectors 
with higher marginal productivity of capital? Is there a mapping of the sectors which both the 
domestic private sector and the foreign financia l institutions are more willing to lend?  
Answer 
Strengthening infrastructure construction for key industries in less productive regions may improve 
production environment and industria l matching and supporting capabilities, reduce cost and give full WT/TPR/M/230/Add.1 
Page 18  
 
  play to the advantages of industries with higher ma rginal productivity of capital, so as to further 
attract capitals and promote the development of the re gions. This is also an experience of China in its 
rapid economic development in recent years.  
Financial institutions are more willing to give lo ans to those emergent industries with mature 
technology, bright prospect and controllable risks. 
Question 29 When confronted with its counterparts in oth er big economies, the Chinese service sector is 
relatively smaller and less advanced. Since fi nance represents a major share of services, 
measures fostering the financial sector would help China in its attempt to accelerate 
development of its service sector. Is there any interest in promoting the internationalization of 
the Chinese banks - as it was the case of the "Go Global" initiative, which was a boost in the 
internationalization of Chinese companies?  
Answer 
China's regulatory authorities support with prudence large banks in their efforts to "Go Global". Large 
banks have recently been active in the establis hment of overseas branches and offices as well as in 
equity investment in overseas financial en terprises. However, along with their gradual 
internationalization and further expansion of sour ce channels of earnings, cross-sector and cross-
border spread of financial risks may also increase.  China's regulatory authorities require banks to 
formulate reasonable strategic planning for overseas development on the basis of careful evaluation of 
country risks and determination of risk preference s so as to facilitate the formation and improvement 
of a sound cross-sector and cross-border risk "firewall" system and thus to promote the expansion of 
overseas business steadily.  
Question 30 
How does China explain the increase in the average MFN tariffs between 2007 and 2009 in the 
following HS sections 17- Transport equipment; 09- Wood and articles (Chart III.1 – WT/TPR/S/230)?  
Answer 
In 2009 reclassification of tariff lines, 5 tariff lines at  8-digit level were adde d in sections 4414, 4415, 
4416, 4417, 4418 which are wood and wood articles. The tariff rates of these tariff lines were between 
7.5% and 20%, which were higher than the aver age tariff rates of wood and articles of wood. 
The tariff rates of whole vehicles in China ar e between 3% and 25%. In 2009, there was a 
reclassification of tariff lines in sections 8702-8703 of motor vehicles. The number of tariff lines with 
tariff rate of 25% increased by 24 after the reclassi fication, which led to a rise in average tariff rate. 
The above changes were only subdivisions of tariff  headings. The increase in the number of tariff 
lines with tariff rates higher than average tariff rate  leads to a rise in the average tariff rate of 
commodities of corresponding sections. However, no ch ange has occurred to the actual tax burden for 
the import of specific commodities included in the two sections.  WT/TPR/M/230/Add.1 
 Page 19 
 
 
  Question 31 
Paragraph 118, page 24 (WT/TPR/G/230) – Duty-free, quota-free for LDCs Brazil is taking steps to implement its DFQF fo r LDCs. In that light, it would be helpful if 
China could answer to a few questions related to  its own scheme, already in place. Within 
China's duty-free, quota-free program granted to LDC countries could you clarify: (i) what is 
the percentage of tariff lines covered by the scheme ? (ii) what is the percentage of value of 
China's imports from LDCs covered by it ? (i ii) what products that are excluded from the 
scheme, if any ? (iv) what are the key criteria of rule of origin being applied (percentage of value addition, among others) ? (iv) is there any safeguard mechanism in place to cope with a possible surge in imports under the scheme ? If so, how do es it work ? (v) what is the procedure for a 
LDC to apply for preferences under the scheme ?  
Answer 
1) China will give all LDCs having diplomatic  relations with China duty-free treatment for 
products covering up to 95% of China's total ta riff lines. In 2010, China will first implement 
the duty-free treatment for 60% of the total tariff lines.  
2) It is estimated that the scheme will c over most goods imported from LDCs by China. 
3) Products that technically are difficult to implement individual tariff cut in view of China's 
WTO accession commitment, plus a small number  of agricultural and industrial products are 
not in the duty free list. 
4) As for rules of origin, the main criteria applied in the duty-free scheme for these LDCs are 
change of tariff heading on HS  4-digit level and 40 percent ad valorem  change. For certain 
products of specific concern, product specific ru les will be applied, details of which are 
subject to discussions between the customs authorities of China and the related LDCs.  
5) After the implementation of the duty-free scheme for LDCs, if according to agreement 
between China and the LDC concerned, in case there is such an increase in the import 
quantity of certain product to cause or threaten to cause serious injury to domestic industry 
producing like or directly competitive products , China is entitled to suspend the duty-free 
treatment for such product and to seek mu tually satisfactory solution with the LDC 
concerned. 
6) China will provide concerned LDCs with the list of products subject to the duty-free 
treatment and it will be confirmed with exch ange of documents between two countries. 
BRAZIL – Part 3
 
Question 1 
The Chinese government affirms that its automatic import licensing system, covering 560 8-digit 
tariff headings, has the sole purpose of monitori ng imports and collecting statistical data, and 
that such products are "free from import res trictions" (G/LIC/N/3/CHN/8). Nevertheless, 
importers claim that licensing procedures are not transparent, and that the amount of licenses 
issued is insufficient to meet the demand, as in the case of poultry.  WT/TPR/M/230/Add.1 
Page 20  
 
  In this context, Brazil would like to know what are the criteria for issuing import licences, and 
how the Chinese government intends to address th e problem of insufficient automatic import 
licences. 
Answer 
The automatic import licensing system of China is for the purpose of monitoring imports and 
collecting statistical data. An applicant will obtain automatic import license when materials prescribed 
in the Measures for the Administration of Auto matic Import License of Goods are provided. For 
details of this administrative rule, please vis it the website of the Ministry of Commerce 
http://www.mofcom.gov.cn/aarticle /b/e/200501/20050100327887.html. 
Question 2 
The Chinese government requires special licenses fo r imports of several products. Imports of jet 
aircraft, for instance, require licenses from th e National Development and Reform Commission 
(NDRC) for every unit purchased. Exporters claim that such requirements create a competitive 
disadvantage vis-à-vis local producers. Braz il would like to know how the Chinese government 
responds to such claims, and how it can ensure a fair treatment for products subject to such 
licensing procedures, consistent with the prin ciple of national treatment (GATT Article III). 
Answer 
In view of the feature in world airplane mark et, the intention of airlines to purchase or import 
airplanes is to be confirmed by the National De velopment and Reform Commission (NDRC). This is 
a different scenario vis-à-vis licenses to be presente d at the customs declarations for import and export 
of goods. Regarding airplanes, local manufacturers are by far not in the position to compete with 
exporters, and therefore it is out of the question that exporters are in competitive disadvantage vis-à-
vis local producers. In future if such a question does rise, China will address it in accordance with the 
relevant WTO rules.  
Question 3  
In November 2009, the Chinese government (MOS T, NDRC, MOF) issued Circular 618, along 
with a set of procedures providing for the estab lishment of a catalogue of Indigenous Innovation 
Products, which should enjoy preferential trea tment in government procurement. To qualify, 
the patents of the products must be owned by an entity based in the country, and the 
corresponding trade-mark must have been regist ered first in China. Bearing in mind concerns 
raised by trade partners and business associ ations, the Chinese government postponed the 
implementation of such measures and invited further comments from stakeholders. Brazil 
welcomes this decision and would like to know whether China still intends to implement this 
policy and how it justifies these measures in light of its WTO obligations. 
Answer 
Encouraging indigenous innovation of enterprises and building an innovative country are important 
strategies that China adopts to promote scientific development and transformation of the pattern of 
economic development. It also provides new fields for cooperation and more development 
opportunities to domestic and international entrepre neurs as well as foreign-invested enterprises in 
China. 
In the recognition of indigenous innovative products, a ll enterprises lawfully established in China are 
treated equally and all manufacturers as legal pers ons are entitled to apply for such accreditation.  WT/TPR/M/230/Add.1 
 Page 21 
 
 
  From April 10 to May 10, 2010, the Chinese co mpetent authorities published online the revised 
conditions for recognizing indige nous innovative products, i.e. th e Notice on National Recognition of 
Indigenous Innovative Products 2010 (Draft) for pub lic comments. The revised Notice clarified those 
provisions in the Notice of the previous year which caused misunderstandings among enterprises, 
including the description of indigenous intellectua l rights, the expression concerning initial trademark 
registration and time of application, etc. Curre ntly, the authorities are studying the comments 
collected. China welcomes foreign-invested enterprise s from all countries and regions to participate in 
the process, to increase their invest ment in research, development and innovation, to bring in high-
quality human resources and advanced technologies, and to enhance their cooperation with Chinese 
partners so as to move up to  a new level of development. 
KOREA – Part 1  
Question 1 Secretariat Report, page 11, paragraph 6 
Secretariat Report, page 21, paragraph 45 
Korea notes that the central government of Ch ina has delegated some responsibilities with 
regards to FDI to local governments. In this regard, 
1. Could China define the term "'encouraged' FIEs" as used in the Secretariat report?  
Answer 
The "encouraged" foreign investment projects are th ose listed in the "encouraged category" in the 
Catalogue for the Guidance of Indu stries for Foreign Investment (2007)  plus all those that are 
included in the Catalogue of Advantaged Industries for Foreign Investment in Mid-West China  
(2008) . Definition of the term is found in Regulations for the Guidance of Foreign Investment (State 
Council Decree No. 346), available at http://www. gov.cn/zwgk/ 2005-06/ 03/content_4004.htm. 
2. In delegating some responsibilities to the local governments, were some common 
criteria/guidelines established that must be  adhered to by the local authorities? 
3. (Follow-up to Q1-2) If the answer is 'yes' , could China elaborate what the criteria/ 
guidelines are? 
Answer (questions 2 and 3) 
The Chinese Government has delegated the authority  of examining and approving foreign direct 
investment to all provinces, municipalities dir ectly under the central government and autonomous 
regions. The competent local commerce authorities ar e authorized to examine and approve foreign 
direct investment projects at a larger scale and in a wider range of industries. However, there is no 
change with respect of the criteria for examining a nd approval of such foreign-investment projects. In 
other words, both central and local governments should comply with the uniform criteria and 
guidelines when examining and approving projects.  These criteria and guidelines refer to those 
provided for in the Law on Chinese-Foreign Equity Joint Ventures , the Law on Chinese-Foreign 
Contractual Joint Ventures , the Law on Foreign-Capital Enterprise , their respective implementing 
regulations and rules, as well as other rules formul ated in accordance with the above-mentioned laws 
and regulations. WT/TPR/M/230/Add.1 
Page 22  
 
  Question 2 
Secretariat Report, page 21, paragraph 46 The Secretariat report states that as of May 1
st, 2009, the authority to examine/approve outward 
FDI has been delegated to "the local commerce authorities of various provinces, autonomous 
regions, and municipalities direct ly under the central government." 
1. Could China clarify whether the authority has been delegated to a selected number of 
provinces, or all provinces?  
Answer 
The Chinese Government has delegated the authority to examine and approve outbound investment to 
all provinces, municipalities directly under th e central government and autonomous regions. 
2. In delegating the authority, were some common criteria/guidelines established that 
should be adhered to by the local authorities?  
3. (Follow-up to Q2-2) If the answer is 'yes' , could China elaborate what the criteria/ 
guidelines are? 
Answer (questions 2 and 3) 
The procedures of examining and approving outbou nd investment as well as situations for non-
approval are explicitly provided for in the Rules on Administration of Outbound Investment  
(MOFCOM Decree No. 5 of 2009) which was prom ulgated on 16 March 2009 a nd entered into force 
on 1 May 2009. The Rules  provides for the uniform principles to be followed by both central and local 
governments when examining and approving outbound investment projects. The Rules  is available at 
http://www.mofcom.gov.cn/aarticle /b/c/200903/ 20090306103210.html. 
Question 3 
Secretariat Report, page 24, paragraph 2 
Secretariat Report, page 29 paragraph 20  
In paragraph 2 of page 24, the Secretariat report states that "China's tariff could be complex, 
as its applied MFN tariff, for example, contains 60 different ad valorem  rates."  
Paragraph 20 of page 29 of the Secretariat repor t further elaborates on this matter by stating 
that "the applied MFN tariff contained 60 different ad valorem  rates, ranging from zero to 
65%." In this regard,  
1. Could China elaborate on the need/rationale to have "60 different ad valorem  rates" in a 
range of zero to 65%?  
Answer 
The 56 different ad valorem rates are consolidated results of th e bilateral tariff negotiations held 
between China and WTO members when China en tered into WTO. Most of the 56 different ad 
valorem rates are the final bound rates committed by China. 
2. Are there plans to converge the applied rates into several 'groupi ngs' in the future?  WT/TPR/M/230/Add.1 
 Page 23 
 
 
  Answer 
There is no such plan at this stage. 
3. What is China's assessment of the Secret ariat's views in paragraph 2 of page 24? 
Answer 
Generally speaking, paragraph 2 on page 24 of th e Secretariat Report is an objective description. 
However, China hopes that the Secretariat and WTO members would understand the historical 
background as to why China is currently applying di fferent MFN rates in such a range. As mentioned 
above, it reflects the outcome of the tariff negotiatio ns between China and other members when China 
entered into WTO. It should particularly be noted that most of the "56 different ad valorem  rates" are 
the final bound rates committed by China. 
KOREA – Part 2  
Question 1 
Secretariat Report, page 37, paragraph 49 
Korea notes that China has recently banned the import of modified milk powder from Korea. 
In connection to this measure,  
1. Could China clarify under which law/regulation this measure was taken? 
2. Could China clarify whether the measure conforms to Article 2 of the SPS agreement? 
3. Could China indicate when the ban could be lifted? Answer 
The measure is adopted in accordance with Article 5 of the Law on the Entry and Exit Animal and 
Plant Quarantine  which stipulated that the State shall pr ohibit from entering the country relevant 
animals and plants, their products and other quarantine objects from countries or regions with prevalent epidemic animal or plant diseases. This is in conformity with the provisions of Article 2 of 
the SPS Agreement. China will lift the ban afte r the epidemic situation comes to an end.  
Question 2 
Secretariat Report, page 38, paragraph 55 
It is the understanding of Korea that the "IT S ecurity China Compulsory product Certification 
(ISCCC)" applies only to IT Products for government procurement.  
1. Could China clarify whether this understanding is accurate? 
Answer 
The understanding is accurate.  
2. If so, could China provide a list of agencies in the central/sub-central/all other entities  
categories that are subject to this guideline? WT/TPR/M/230/Add.1 
Page 24  
 
  Answer 
Chinese governments at all levels should apply this requirement. 
Question 3 
Secretariat Report, page 40, paragraph 66 
As stated in the Secretariat report, China's SOEs are not subject to the Government 
Procurement Law of China. In this context,  
1. Could China explain which law/regulati on regulates procurement activities of the 
SOEs?  
2. Furthermore, could China elaborate on th e major differences between this regulation 
/law and the Government Procurement Law?   
Answer (questions 1 and 2) Law on Bid Invitation and Bidding  is the main la w that govern s SOEs' procurement activities. 
Procurement by SOEs and government  procurement are different in te rms of the methods adopted for 
the procurement. 
Procurement by SOEs is usually conducted in following ways: 1) establishing a division for group 
procurement to be in charge of centralized pr ocurement of the group company; 2) establishing a 
subsidiary company and conducting procurement via affiliated transaction; 3) entrusting an 
independent company to conduct procurement for the group company. 
Government procurement is conducte d in following ways: 1) public invitation; 2) invited bidding; 
3) competitive negotiation; 4) single-source proc urement; 5) inquiry about quotations; 6) other 
methods confirmed by the government procuremen t authorities of the State Council. Among these 
ways, public invitation shall be the prin ciple method of government procurement. 
Question 4 
Secretariat Report, page 41, paragraph 69 
In regards to the China's efforts to join the WTO GPA, Korea notes that the initial offer of 
China does not include local government entities. In this context,  
1. Could China explain when it foresees including local government entities in its GPA 
schedule? 
Answer 
Inclusion of entities of a local government into GPA Appendix I is subject to approval by the 
corresponding local People's Congress. For that purpose, the local government must have a 
comprehensive knowledge on the GPA and conduct an a ppraisal on the pros and cons of joining the 
GPA. With reference to such appr aisal the local People's Congress would be in the position to decide 
whether to approve the inclusion or not.  
2. Is there an available timeframe?  WT/TPR/M/230/Add.1 
 Page 25 
 
 
  Answer 
At present no detailed timetable is available in this respect.  
Question 5 
Secretariat Report, page 59, paragraph 144 
The Secretariat report states that under China's Anti-Monopoly Law, "foreign acquisition of 
Chinese enterprises, if relating to national security, must go through a "national security 
review" in addition to the competition revie w". The Secretariat report further states that 
despite this requirement, there is no definition of   "national security", nor specification of which 
agency is to conduct the "national security review". In this regard,  
1. Could China elaborate whether this requirement in the Anti-Monopoly Law has ever 
been exercised in the past? 
2. If this provision is "for general informatio n" as noted in the report, could China instead 
elaborate under which law and by which age ncy such "national security reviews" are 
conducted? 
Answer (questions 1 and 2) 
China is now drafting regulations on national security review over acquisitions of domestic 
enterprises by foreign investors. The regulations would specify competent authorities, mechanism and 
procedures of the review. No foreign acquisition of  a Chinese company has been subject to national 
security review since 2008. 
Question 6 
Secretariat Report, page 89, paragraph 92 
The Secretariat report states that the State Counc il Legislative Office is currently reviewing the 
draft Telecommunications Law. Korea is of th e view that the entry into force of the new 
Telecommunications Law will re-shape the teleco mmunications sector of China, and assist 
foreign investors in making bold new investme nts in the Chinese  telecommunications market. 
In this context, could China explain the curren t status of the review process, and provide a 
timeline of its expected entry into force? 
Answer The first draft of the Telecommunications Law  has been submitted to the State Council.  Work is still 
underway according to procedures and requirements of the Legislation Law . At present relevant 
authorities are not in a position to identify a specific timetable for its promulgation. 
Question 7 Secretariat Report, page 90, paragraph 95 It is the understanding of Korea that in accord ance to Article 10 of the 'Catalogue for Guidance 
of Foreign Investment Industries, internet news  and internet video/audi o service are classified 
as 'prohibited'.  WT/TPR/M/230/Add.1 
Page 26  
 
  1. Could China clarify whether this understanding is accurate? 
Answer 
The understanding of Korea is correct.   2. Could China explain whether it has any pl ans to reclassify such services and permit 
foreign investment in the sector?  
Answer Liberalization of the services depends on the sp ecific situations of the domestic market. 
Question 8 
Secretariat Report, page 79, paragraph 46 
For the following sectors, could China explain which level of government (central/sub-central, 
or relevant private associations) holds the au thority to issue relevant licenses (and administer 
examinations)? 
Legal services 
Answer In terms of the license for legal services, Departme nt of Justice in provinces, autonomous regions or 
municipalities directly under the central government  is responsible for preliminary examination of 
applications, and Ministry of Justice takes charge  of reviewing and approving the application. For 
detailed information, please refer to Rules on Administration of Re presentative Offices of Foreign 
Law Firms in China.  
Architecture services  
Answer 
The application for and the examination a nd approval of the establishment of foreign-
invested construction enterprises and their qualif ications are administered by a grading and 
categorization system. 
Where an applicant is to apply to establish a ge neral contractor with Super Grade or Grade A 
qualifications or to establish a specialized contract or with Grade A qualifications, the establishment of 
the foreign-invested construction enterprise sha ll be examined and approved by Ministry of 
Commerce and its qualifications shall be examined and approved by Ministry  of Housing and Urban-
Rural Development; where an applicant is to apply to establish a general contractor or a specialized 
contractor with Grade B or lower qualifications  or any of the subcontractor qualifications, 
the establishment of the foreign-invested construc tion enterprise shall be examined and approved by 
the commercial department of the people's government  of the province, the autonomous region or the 
municipality directly under the central government and its qualifications shall be examined and 
approved by the construction admini stration department of the people's government of the province, 
the autonomous region or the municipality directly under the central government.  
For detailed information, please refer to  Regulations on Administration of Foreign-Invested 
Construction Enterprises   WT/TPR/M/230/Add.1 
 Page 27 
 
 
  Engineering services 
Answer 
Please refer to the answer for the above question.  Medical services 
Answer 
As far as the license of medical services is con cerned, department of health of the province, the 
autonomous region or municipality directly under th e central government is responsible for the 
preliminary examination of the qualif ications, and Ministry of Health and Ministry of Commerce take 
charge of reviewing and approving the applicati on. For detailed information, please refer to the  
Interim Measures for Administration of Chinese-Foreign Equity and Contractual Joint Venture 
Medical Institutions. 
Services provided by nurses 
Veterinary services 
Answer China has not liberalized the above mentioned two sectors, so the licensing procedure is out of the 
question. 
KOREA – Part 3
 
Question 1 
Secretariat Report, page 61~65, paragr aph 151~161 
Korea notes that the Secretariat report does not fu lly elaborate on the patent protection  system 
for pharmaceuticals in China. In this context,  
Could China clarify what legislation, other than the Patent Law, China has in place that 
regulates patent rights relating to pharmaceuticals? 
Answer 
Rules on Administration of Drug Registration  (SFDA Decree No. 28) has provisions related to patent 
rights concerning pharmaceuticals (Articles 18 and 19). The Rules  is available at http://www.gov.cn/ 
ziliao/flfg/2007-07/11/content_680384.htm. 
Upon the approval of a new drug, what is the duration of 'data protection', and how is 'data 
protection' administered? 
Answer 
Regulations and rules concerning drug registration in China have detailed pr ovisions on protection of 
undisclosed data.  
Regulations for Implementation of the Drug Administration Law in Article 35  provides that, the State 
protects undisclosed data of drug study and others which   are independently acquired and submitted WT/TPR/M/230/Add.1 
Page 28  
 
  by drug manufacturers or sellers to obtain productio n or marketing approval of the drugs in question 
which contain new chemical entities. No one may make unfair commercial use of the said data. 
Within 6 years from the date a drug manufacturer or seller obtains the approval documents for 
producing or marketing a drug containing new chemical  entities, if any other applicants uses the data 
mentioned in the preceding paragraph to apply for ap proval for production or ma rketing of the drug in 
question without permission of the original appli cant who has obtained the approval, no approval may 
be given to any other applicant by the drug regulat ory department except that the data submitted are 
acquired independently. 
No drug regulatory department may disclose the data  set forth in the first paragraph of this Article 
except 1) for the need of public interests; or 2) where steps are taken to ensure that the data are 
protected against unfair commercial use. 
Rules on Administration of Drug Registration  (SFDA Decree No. 28) mentioned in answer to the 
previous question in Article 20 provided furt her details on protection of undisclosed data. 
Question 2 
Secretariat Report, page 65, paragraph 160 
The Secretariat report states that China's revised Patent Law implements measures in the 
Convention on Biological Diversity, including the obligation for patent applicants to disclose the 
direct and original source of genetic resources.  It is our understanding that the Convention 
stipulates the principles but not the details to this obligation.  
In connection to the above, could China explain in  detail how the disclosure of original source is 
conducted? 
Answer 
The original source of genetic resources set out in Patent Law  refers to  the place where the living 
organisms (to which the genetic resources belong) ar e  collected in the primary environment.  The 
applicant shall provide such information as collec tion time, place and collector when disclosing the 
original source of genetic resources. If the ge netic resources are directly acquired from some 
institution such as a preserving institution, seed ba nk (germ plasm bank) or gene library, which knows 
and is able to provide the original source, the a pplicant shall provide the original source information 
of the genetic resources.  If the applicant is not able to state the original source, reasons shall be stated 
and relevant evidence shall be provided when necessary. 
KOREA - Follow-up
 
Question 1 Secretariat Report, page 65, paragraph 160  
According to the Secretariat Report, China's revi sed patent law requires patent applicants to 
disclose the direct and original source of  genetic resources. In this context, 
Is ABS (Access and Benefit Sharing) or PIC (Pri or Informed Consent) required for patent 
application?  WT/TPR/M/230/Add.1 
 Page 29 
 
 
  Answer 
According to Article 5 of the Patent Law , no patent shall be granted for an invention or creation based 
on genetic resources if the access or utilization of   th e said genetic resources is in violation of any law 
or administrative regulation.  Also, Article 26 of the Patent Law  states that for an invention or 
creation based on genetic resources, the applicant sha ll state the direct source and the original source 
of the genetic resources in the application documents. If the applicant is not able to state the original 
source, it or he/she shall state the reasons.  Therefore, China's Patent Law  does not prescribe that ABS 
(Access and Benefit Sharing) or  PIC (Prior Informed  Consent) is required for patent application in 
China regarding an invention or cr eation based on genetic resources. 
Does the State Intellectual Property Office disclo se the information on the original source of 
genetic resources to the public?  
Answer The original source of genetic resources is provide d by the applicant by filling the registration form 
for disclosure of sources of genetic resources. The form is not open to the general public.  
Question 2 
Secretariat Report, page 67, paragraph 169  
Korea notes that China's Geographical Indicati ons are regulated by three different routes;  
applying to the State Trademark Office, the AQSIQ, or the Ministry of Agriculture. 
Could China explain the purpose of establishing three different channels for GI protection? Could China explain the differences in applying to  each institution, and the legal relationships 
between these three processes? 
Answer (questions 1 and 2) 
The geographical indication protection is carried ou t by the State Administration for Industry and 
Commerce (SAIC), the Ministry of Agriculture, and General Administration of Quality Supervision, 
Inspection and  Quarantine (AQSIQ). They differ from each other in respect of legal basis, protection 
means and scope, remedies, division of duties and work focuses.  The SAIC protects geographical 
indications by applying collective trademark and ce rtification trademark registration pursuant to the 
Trademark Law. Corresponding remedies for ge ographical indication infringement include 
administrative, civil and criminal ones. The Ministry  of Agriculture has registration administration for 
geographical indications of agricultural products based on administrative rules formulated in 
accordance with Law on Quality Security of Agricu ltural Products. The focus of the protection is on 
geographical indication resources of agricultural products, product quality and traditional farming 
culture. AQSIQ's protection of  geographical i ndication focuses on processing, which is based on 
administrative rules formulated in accordance with Product Quality Law. 
Question 3 
Secretariat Report, page 66, paragraph 167  
In the case of difficulties faced in finding the owner of the copyright, issuing a statutory  
(compulsory) license while requiring the placement of  a deposit, could be helpful in solving the 
situation.  WT/TPR/M/230/Add.1 
Page 30  
 
  Does China allow the issuance of such a license? 
If so, how prevalent is such practice? Could Ch ina provide statistical information with regards 
to the track record of implementing such a policy? 
Answer (questions 1 and 2) When acceding to the Berne Convention, China ha d reservations on certain clauses under its appendix 
relating to compulsory licensing. Therefore, there are no provisions on compulsory licensing in China's legislation and nor has it occurred in practice.  
Question 4 Secretariat Report, page 83, paragraph 62  
Korea notes that, at present, China's auto insu rance market is only partially opened, with 
foreign insurance companies only allowed to se ll voluntary auto insurances. In this context, 
could China elaborate on future plans to permit  foreign insurance comp anies access into this 
market (for compulsory auto insurances)? 
Answer 
China does not have such plan at this stage. China will consider further liberalization of the service 
sector in accordance with domestic market circumstance and its development level. 
PAKISTAN
 
Question 1 
Global financial crisis hit every Member of the WTO. The situation in China was further 
complicated by natural disasters such as eart hquake. In this deteriorating global economic 
scenario, GDP of China grew by more than 9% in 2008 and more than 8% in 2009. One of the 
salient features of China's stimulus package was aimed at increasing domestic demand and in 
the year 2009 it increased by more than 15%. Would China intend to continue this policy in the medium term?   
Answer 
Transformation of economic developm ent pattern is a mid and long-term  major strategic task of China 
in its course of building a moderately prosperous so ciety. It requires China to gradually reverse the 
situation that domestic economic growth over-re lies on exports and investment while domestic 
consumer demand is relatively insufficient. Over the past two years, faced with serious challenges of 
the international financial crises, the Chinese G overnment has taken domestic demand expansion as 
the fundamental point to maintain stable and relatively fast economic growth. The stimulus package staged reflects both the short-term target of a ddressing the economic downturn and the long-term goal 
of promoting the transformation of the economic de velopment pattern. The 4 trillion yuan investment 
plan in the package will end at the end of 2010. However, as an important means to transform the 
economic development pattern, domes tic demand expansion, especially  consumer demand expansion, 
will be a mid-term or even long-term policy of China.  WT/TPR/M/230/Add.1 
 Page 31 
 
 
  Question 2 
According to the report, out of all antidumping measures notified to the WTO, 1/3rd are only 
against China. Similarly, 2/3rd of the countervailing measures imposed are only against China. 
How China views such measures in the context of  its trade diplomacy efforts and whether such 
measures are likely to have any impact on China's trade policy in future?  
Answer China has always maintained that trade remedy measures should be used in a rational and restrained 
manner. China opposes the abuse of trade remedy m easures. China hopes that all members maintain 
and strengthen ways of communication to properl y handle and resolve trade frictions through 
dialogues and consultations. 
China will continue to pursue mutually beneficial and win-win strategy in the course of its opening 
up, and will work together with other members to firmly oppose to any form of trade protectionism 
and to promote trade liberalization and facilitation. In the short term, China is committed to advancing 
the Doha Round of negotiations based on the progress to date, so as to achieve  a comprehensive, just 
and balanced outcome as soon as possible. 
Question 3 
China has bound its 100% tariff at ad valorem  basis and its applied tariffs are also close to its 
bound tariff and its simple average tariff is less  than 10%. However, it is noted that China 
maintains approximately 60 different ad valorem  rates. Would China like to share the rationale 
of maintaining such a high number of slabs and whether there are any plans to simplify applied 
tariff regime by reducing the number of slabs?   
Answer 
The 56 different ad valorem  rates are consolidated results of the bilateral tariff negotiations held 
between China and WTO members when China en tered into WTO. Most of the 56 different ad 
valorem  rates are the final bound rates committed by China. China hopes that the Secretariat and 
WTO members would understand the historical backgroun d of this feature in China's tariff schedule. 
Up to now, China has no plan to change the number of the rates. 
Question 4 
In China, presently, GI regime is administered by multiple organizations like State Trade Mark 
offices, AQSIQ and Ministry of Agriculture. Woul d China like to share roles assigned to each 
set up and the manner of inter-agency coordination? Besides, China may also share general features of its new GI law being legislated. 
Answer 
The geographical indication protection is carried ou t by the State Administration for Industry and 
Commerce (SAIC), the Ministry of Agriculture, and General Administration of Quality Supervision, 
Inspection and Quarantine (AQSIQ). They differ from e ach other in respect of legal basis, protection 
means and scope, remedies, division of duties and work focuses. The SAIC protects geographical 
indications by applying collective trademark and ce rtification trademark registration pursuant to the 
Trademark Law. Corresponding remedies for ge ographical indication infringement include 
administrative, civil and criminal ones. The Ministry  of Agriculture has registration administration for 
geographical indications of agricultural products based on administrative rules formulated in WT/TPR/M/230/Add.1 
Page 32  
 
  accordance with Law on Quality Security of Agricult ural Products. The focus of the protection is on 
geographical indication resources of agricultural products, product quality and traditional farming 
culture. AQSIQ's protection of geographical i ndication focuses on processing, which is based on 
administrative rules formulated in accordance with Product Quality Law. 
NORWAY – Part 1
 
Question 1 
China's competitive exports are heavily counteracted by applicat ion of trade remedy measures. 
1/3 of the anti-dumping investigations init iated in 2008 were against China, and 2/3 of the 
countervailing investigations. We note that Chin a states that it opposes protectionism in any 
form. How does China intend to meet the cons iderable challenge contingency measures against 
its exports represent? 
Answer 
China appreciates that Norway notes China's exports suffer serious impediment due to trade remedy 
measures. China has always maintained that trade remedy measures should be used in a rational and 
restrained manner. China opposes the abuse of trad e remedy measures and trade protectionism. China 
hopes that all members maintain and strengthen ways of communication to properly handle and 
resolve trade frictions through dialogues and consultations. 
NORWAY – Part 2  
Question III.(2)(i)(a)  Customs procedures and preshipment inspection According to the Report by the Secretariat, p reshipment inspection is required for imports of: 
certain commodities related to national security, with high value or complicated technology; 
equipment of certain height, length or volume; solid waste used as raw material; and certain used electronic products that are deemed to affect public health and environment. 
How and by whom is the preshipment inspectio n carried out and who is responsible for the 
costs connected to the preshi pment inspection procedures? 
Answer 
According to Article 22 of the Regulations for the Implementation of the Law of the People's 
Republic of China on Import and Export Commodity Inspection, China requires preshipment inspection (PSI) on import of waste raw materials and used machinery and electrical products. The 
PSI is carried out by PSI institutions authorized  or recognized by the General Administration of 
Quality Supervision, Inspection and Quarantine (AQSIQ). 
Foreign suppliers of the solid waste raw material s hould apply for PSI to authorized institutions at the 
place of loading or place of shipment. The legislation applicable is Rules on Administration and Supervision of Inspection and Quarantine on Solid Waste Imported as Usable Raw Materials (AQSIQ 
Decree No. 119). The authorized PSI institutions ca rry out inspection on wast e raw materials from 
foreign suppliers according to Standard on Envi ronmental Protection Control for Solid Wastes 
Imported as Usable Raw Materials (GB/T16487-2005) and issue certificate of qualification to those 
qualified. PSI for used machinery and electrical pr oducts to be imported is carried out according to 
Rules on Administration of  Inspection and Supervis ion of Import of Used Machinery and Electrical  WT/TPR/M/230/Add.1 
 Page 33 
 
 
  Products (AQSIQ Decree No. 37) and Rules on the Inspection and Supervision Procedures for Import 
of Used Machinery and Electrical Products (AQSIQ Decree No. 53). 
The cost of PSI for import of waste raw materials is born by the exporter and the cost of PSI for 
import of used machinery and electrical products is born by the importer. 
Question 
III.(2)(i)(b)  Customs valuation 
Fixed price system at Beijing Airport According to Norwegian exporters, the calculatio n in Beijing airport of import duties on fresh 
Norwegian salmon is based on a fixed price – being systematically higher than the market price. 
Reportedly, this practice is being experienced in  Beijing Airport only, whereas officials in other 
airports in China where fresh Norwegian salmon is arriving seem to calculate import duties on 
the basis of the actual paid price. 
Calculating import duties on the basis of a fixed price may result in duties of an incorrect 
nature, as market prices tend to fluctuate from on e week to another. The fixed price's deviation 
from the actual paid price would be especia lly hurtful for exporters when prices on fresh 
Norwegian salmon are decreasing, as a fixed pri ce with necessity would be defined earlier in 
time, and thus would refer to a higher market price.  
1. Is the Chinese government aware of the described calculation practice? 2. To what extent does the Chinese governme nt consider the described practice to be in 
line with GATT Art. VII?  
3. Will the Chinese government consider altering its practice in Beijing airport with the 
aim of calculating import duties on fresh Norwegian salmon on the basis of actual paid 
price as is apparently the practice in all other Chinese airports where fresh Norwegian 
salmon is arriving?  
4. If the Chinese government will not consider al tering its practice in Beijing airport with 
regard to the matter at hand, what is the reasoning behind such a position? 
Answer (for the four questions) 
Since China's accession to WTO, the Cust oms in China has fully implemented  the WTO Agreement 
on Customs Evaluation, and has translated it into domestic legislation. China Customs respect trade 
practices and in their review base customs valu es of goods on actual transaction prices. There are no 
restrictions imposed by the Customs on import and export prices, nor are there such provisions on "fixed price" in price-related administration. 
During the period from January 2008 to 19 May 2010, a total of 2,417 consignments of fresh 
Norwegian salmon arrived at Beiji ng Airport. Upon review, the Customs regarded the enterprises' 
declared values as in compliance with the provisions concerning transaction prices, and thus accepted the declared values and levied taxes on the basis of the declared values. The Customs neither adjusted 
the declared values, nor levied tax based on a fixed price. The practice is in line with the Agreement 
on Customs Evaluation. WT/TPR/M/230/Add.1 
Page 34  
 
  Question 
III.(2)(viii)  Government procurement Norway would like to take this opportunity to raise a couple of issues related to the 
implementation of its national procurement legislation: 
1. We would kindly ask China to inform about the Implementation of the Rules of Bidding 
Law that have come out in 2010, in particul ar how it ensures equal opportunity and fair 
treatment of domestic suppliers, whether Chinese owned or foreign owned, as well as foreign suppliers, one of the core principles in the GPA. 
Answer 
In September 2009, the Legislative Affairs Office of the State Council solicited public opinions about 
the draft  Regulations for the Implementation of the Law of the People's Republic of China on Bid 
Invitation and Biding . The  Regulations  is auxiliary legislation to  the Law on Bid Invitation and Biding  
to provide further details of the tendering and bidding procedures. It is not a piece of legislation on 
government procurement policies. 
2. Norway is concerned about some of the requirements in Indigenous Innovation 
Initiative in government procurement policies, especially with regard to provisions 
related to local preferences and compulsory  purchasing.  Is the Chinese Government 
reconsidering this policy, to bring it in line with the GPA principles and rules, especially regarding non-discrimination? And if not now, is there a process being set in place to reopen the issue and eliminate discriminatory practice? 
Answer Encouraging indigenous innovation of enterprises and building an innovative country are important 
strategies that China adopts to promote scientific development and transformation of the pattern of 
economic development. It also provides new fields for cooperation and more development 
opportunities to domestic and international entrepre neurs as well as foreign-invested enterprises in 
China. 
In the recognition of indigenous innovative products, a ll enterprises lawfully established in China are 
treated equally and all manufacturers as legal pers ons are entitled to apply for such accreditation. 
From April 10 to May 10, 2010, the Chinese co mpetent authorities published online the revised 
conditions for recognizing indige nous innovative products, i.e. th e Notice on National Recognition of 
Indigenous Innovative Products 2010 (Draft) for pub lic comments. The revised Notice clarified those 
provisions in the Notice of the previous year which caused misunderstandings among enterprises, 
including the description of indigenous intellectua l rights, the expression concerning initial trademark 
registration and time of application, etc. Curre ntly, the authorities are studying the comments 
collected. China welcomes foreign-invested enterprise s from all countries and regions to participate in 
the process, to increase their invest ment in research, development and innovation, to bring in high-
quality human resources and advanced technologies, and to enhance their cooperation with Chinese 
partners so as to move up to  a new level of development.  WT/TPR/M/230/Add.1 
 Page 35 
 
 
  NORWAY – Part 3  
Question In paragraph 117 in the Report by the Secretariat it is stated that the an Ad-hoc Tax-Free 
Registration Policy for Chinese-flagged ocean shipping fleet was extended until 2011. The 
purpose of the policy is to "encourage the deve lopment of the Chinese-flagged ocean shipping 
fleet and to safeguard the legitimate rights of Chinese seafarers". The policy was originally 
scheduled to end in June 2009. What is the reasoning fo r the extension? 
Answer 
Since most flag-of-convenience ships engaging in in ternational shipping are of long shipping lines 
and lease term, some vessels eligible for the ad hoc  tax reduction and exemption policy have difficulty 
in completing procedures for import within the orig inally scheduled period (namely from 1 July 2007 
to 30 June 2009). To facilitate the application of the ad hoc policy to these vessels, adjustment was 
made to the expiration date, i.e. the expiration date was extended from 30 June 2009 to 30 June 2011.  
Question 
In the Report of the Chinese Government, Section 3. iii on "Advancing strategies for scientific 
and technological innovation and property rights", (in para. 36) China states that it welcomes 
and encourages foreign companies to establis h research and development (R&D) centers in 
China. In 2008 the number of patents for inventions owned by foreign-invested enterprises accounted for 29% of the national total, and their expenditure for new product development, 
sales revenue and export was respectively 31%, 41% and 60% of the national total. 
Norway has three questions regarding section 3, iii:   
Firstly, Norway requests that China, if possible, encloses the 2009 and the current 2010 
percentage of patents and patent application resulting from R&D activities owned by foreign-invested enterprises and likewise enclo se the 2009 and the current 2010 percentages for 
expenditure. 
Secondly, what guidelines, principles or requirem ents does China have regarding division of 
intellectual property rights to the results from the R&D centers between the foreign companies 
and participating Chinese institutions and scientists?  
Answer (for the above 2 questions) 
Application for and registration of intellectual prope rty rights can be from enterprises. We therefore 
do the calculation according to whether the intellectua l property rights are filed by foreign-invested 
enterprises (FIEs) or not. We do not distinguish fu rther as to whether the intellectual property rights 
belong to the Chinese or the shareholders in the FIEs . For the latest statistics, we are not able to 
provide at this particular stage because there is  not enough time before we should submit the written 
answers. However, Norway may follow statistics to be officially released at  a later stage in this 
respect. 
Lastly, what laws or regulations does China have regarding employed university and college 
researchers' right to publicize the result s of their academic research works? WT/TPR/M/230/Add.1 
Page 36  
 
  Answer 
According to provisions in the Copyright Law , the research fellows employed by universities and 
colleges enjoy complete copyrights over their pub lished academic works, which comprise of moral 
rights and economic rights. 
Question 
Concerning the report by the Secretariat, Section III, 4.v, "Intellectual Property Rights".  
In para. 154, the Secretariat describes China's rep orting and complaint centers that have been 
set up in 50 large and medium- sized cities, th e "12313"hotline and the online reporting and 
complaints window.  
Norway firstly requests that China encloses further information about the activity of the 
resource centers, the hotline and the online reporti ng and complaints window, more specifically 
do foreign traders currently contact/use the repo rting centers to report IPR infringement, what 
type of IPR infringement is reported by fo reign right holders, which measures may the 
complaint centers use to deal with an alleged in fringement, and what is the function of the 
complaints centers in IPR infringement cases in relation to the double track IPR enforcement 
system consisting of administrative action and judicial measures? 
Answer 
The IPR assistance centres set up by the State Inte llectual Property Office (SIPO) provide services on 
reporting and complaint concerning IPRs. The centr es receive reporting or complaints from any unit 
or individual on IPR infringement or violation, a nd also transferred reporting and complaints, which 
will timely be forwarded to relevant IPR admi nistrative authorities or police authorities for law 
enforcement. Feedback will be provided at a late r stage on how the cases are handled and the final 
outcome. The centres also work on determination of IPR infringements and provision of advisory 
opinions on compensation estimations. 
Question 
Secondly, if applicable, Norway requests information about which measures China has taken to 
inform of, and make available, the reporting and complaint centers, the hotline and the online 
resources to foreign IPR right holders etc.  
Answer Efforts of the Chinese government made for protecti on of intellectual property rights include publicity 
and education activities in order to create a social environment of IPR protection for all and by all. 
These efforts have made it possible that such prot ection means as the reporting and complaint centers, 
the hotlines and the online resources to IPR right  holders are known to th e general public and 
foreigners. Furthermore, information on such repor ting and complaint centers and hotlines etc are also 
easily accessible at a series of IPR related official websites including that of the State Intellectual 
Property Office.  
Question 
In Box III.2. "IPR enforcement" various agencies and authorities such as SIPO, etc. are 
described. It is stated that these authorities may take administrative action against infringers on 
their own initiative. Norway requests information regarding the number of actions that have  WT/TPR/M/230/Add.1 
 Page 37 
 
 
  been taken on the agencies' own initiative and, the number of times such action has involved 
infringements of IPR held by foreign IPR right holders. If no specific numbers or statistics are 
available Norway requests that China provides a general description about the same.  
Answer According to Article 60 of the Patent Law , a local intellectual property office accepts a patent 
infringement case only at the request of the patent ee. This differs from trademark infringement and 
copyright infringement, which can be investigated  and enforced by law-enforcement authorities on 
their own initiative. In 2009, China's local in tellectual property offices totally accepted 937 cases 
related to patent infringement disputes, and local  administrations for industry and commerce handled 
51,044 cases of various trademark violations, whic h included 10,461 foreign-related trademark cases. 
Among all these cases, 37,824 cases were enforced on their own initiative, accounting for 74.1% of 
the total. 
As for copyright administrative enforcement, in 2009, China launched the fifth nationwide campaign 
against internet infringement and piracy, and 541 case s related to internet infringement were closed. 
For IPR border enforcement, please refer to the answer to the following question. 
Question In Box III.2. "IPR enforcement", it is furthermore stated that China has taken measures to 
strengthen and enforce regulations on counterfei t and pirated exports. Norway requests that 
China provide further details, if available, concerning the measures that have been taken.  
Answer In 2009, Customs authorities tracked down and seized IPR-infringing export goods worth of over 
RMB 450 million. Regarding specific measures taken, firstly, Customs authorities carried out enforcement actions on their own initiative to protect  intellectual property rights in accordance with 
their mandate. In 2009, the value of infringing goods detained by China Customs on their own 
initiative reached RMB 430 million, accounting for 94.3% of the total value of infringing goods 
seized. Secondly, China Customs took a series of special actions in key areas and routes against 
border infringements such as the "dragon boat acti on" taken against the export of infringing goods by 
making use of European and American ship or air routes from the end of 2007 to the beginning of 
2008, and the special action for IPR protection in  post and express mail June to December 2009. 
China Customs also attach great importance to la w enforcement cooperation with other countries and 
regions. China has signed documents relating to IP R protection cooperation with the USA, EU and 
also among Japan, South Korea and itself. Effe ctive cooperation is underway in information 
exchange, enforcement experience sharing, a nd data interchange in case statistics etc.  
Question 
Norway will be interested to know whether Chin a has amended the national customs laws and 
regulations to the effect that seized goods no long er may be publicly auctioned for sale provided 
that the infringing mark is removed. 
Answer China has amended Regulations of the People's Republic of China on Customs Protection of 
Intellectual Property Rights , and the new administrative regulation has come into effect on 
1 April 2010. In this amendment Article 27.3 of the prevision regulation was rewritten as follows, WT/TPR/M/230/Add.1 
Page 38  
 
  where confiscated goods that have infringed upon  Intellectual Property Rights cannot be used for 
public welfare and the owner of the Intellectual Pr operty Rights does not wish to acquire the goods, 
the Customs may auction off the goods according to law after removing the infringing features. 
However, in regard to imported counterfeit trad emark goods, the simple removal of the trademark 
unlawfully affixed shall not be sufficient, other th an in exceptional cases, to permit release of the 
goods into the channels of commerce; where the in fringing features cannot be removed, the Customs 
shall destroy the goods.  
Question 
Concerning trademarks, According to para. 163,  trademarks must be registered with the 
Chinese Trade Mark Office in order to be protected under Chinese trademark law. Norway 
would like a clarification as to whether Chinese trade mark law or legislation concerning unfair 
competition provides protection for non- registere d trademarks because of goodwill acquired by 
widespread use (i.e., so-called well-known marks).  If the answer to the latter is yes, does China 
apply a principle of territorial or global goodwill?  
Answer 
The Trademark Law offers protection to all non-registered domestic and foreign trademarks well-
known within the territory of China. According to Article 13.1 of the Trademark Law , where a 
trademark in respect of which the application for re gistration is filed for use for identical or similar 
goods is a reproduction, imitation or translation of a nother person's trademark not registered in China 
and is likely to cause confusion, it shall be re jected for registration and prohibited from use. 
China's protection for unregistered well-known trad emarks follows the principle of territoriality, 
namely the unregistered well-known trademarks under protection shall be well-known within the 
territory of China. The evidential materials to pr ove a trademark to be we ll-known is not limited to 
China. 
AUSTRALIA
 
WTO Secretariat Report 
SUMMARY  
Question 1 Paragraph 15 of the Report by the Secretariat (page viii) notes that there have been concerns 
regarding China's Indigenous Innovation Policy. 
Could China provide an outline of the current status of the policy? 
Answer Encouraging indigenous innovation of enterprises and building an innovative country are important 
strategies that China adopts to promote scientific development and transformation of the pattern of 
economic development. It also provides new fi elds for cooperation and more development 
opportunities to domestic and international entrepre neurs as well as foreign-invested enterprises in 
China. 
In the recognition of indigenous innovative products, a ll enterprises lawfully established in China are 
treated equally and all manufacturers as legal pers ons are entitled to apply for such accreditation.  WT/TPR/M/230/Add.1 
 Page 39 
 
 
  From April 10 to May 10, 2010, the Chinese co mpetent authorities published online the revised 
conditions for recognizing indige nous innovative products, i.e. th e Notice on National Recognition of 
Indigenous Innovative Products 2010 (Draft) for pub lic comments. The revised Notice clarified those 
provisions in the Notice of the previous year which caused misunderstandings among enterprises, 
including the description of indigenous intellectua l rights, the expression concerning initial trademark 
registration and time of application, etc. Curre ntly, the authorities are studying the comments 
collected. China welcomes foreign-invested enterprise s from all countries and regions to participate in 
the process, to increase their invest ment in research, development and innovation, to bring in high-
quality human resources and advanced technologies, and to enhance their cooperation with Chinese 
partners so as to move up to  a new level of development. 
II. T RADE POLICY REGIME - FRAMEWORK AND OBJECTIVES  
(6) F OREIGN INVESTMENT REGIME  
Question 2 Australia is encouraged to note that China has relaxed its foreign direct investment (FDI) 
restriction in certain sectors such as telecommunications and tourism (paragraph 45, page 21 of 
the Report by the Secretariat). More recently, the State Council and the National Development 
and Reform Commission have made policy anno uncements that China will encourage FDI in 
high-tech, energy-efficiency industries and services sectors. At the same time, strict restrictions 
will be applied to energy intensive, high-po lluting and resources sectors and also projects in 
industries that are running at overcapacity. 
How does China ensure that these restrictions achi eve their stated objective of environmental 
protection and are not used as trade barriers? 
Answer The Chinese government imposes strict restrictions on energy intensive, high-polluting and resource 
intensive sectors and those running at excessive capacity  in order to tackle the ever growing pressure 
due to energy and resource shorta ge, protect environment, promote the transformation of the pattern 
of economic growth and achieve sustainable devel opment. All the enterprises in China, including 
foreign-invested enterprises, are subject to the restrictions on energy intensive, high-polluting and 
resource intensive sectors as well as projects running at excessive capacity. With regards to the 
elimination of obsolete production capacities, restric tions on domestic enterprises are even stricter 
than those on foreign-invested enterprises. If these restrictions affect international trade, the Chinese 
government will study the relevant WTO rules so that these measures comply with the multilateral 
rules. The Chinese government will continue to implement the open-up policy. The policies and 
measures for energy intensive, high-polluting and resource intensive sectors and those running at 
excessive capacity will be made coherent with the open-up policy and will not be used as trade 
barriers for protectionism purposes.  
Question 3 
Since China's last review, there has been no offici al change in the Catalogue for the Guidance of 
Foreign Investment Industries, which lists in dustries that are encouraged, restricted, and 
prohibited.  Projects outside these three designated categories are deemed to be permitted. 
Is China considering the possibility of reducin g the number of sectors listed under either the 
restricted or prohibited categories? WT/TPR/M/230/Add.1 
Page 40  
 
  Answer 
China has noted Australia's comments on the Catalogue for the Guidance of Foreign Investment 
Industries . China will make adjustments to the Catalogue  as appropriate and the general principle for 
such adjustments is to expand further the scope of industries available for foreign investment and to 
relax restrictions on foreign investment. Recently, Ch ina has just started a new round of adjustment to 
the Catalogue . 
Question 4 Since its Review in 2008, the Chinese Central G overnment has delegated some of the decision-
making authority in relation to FDI to local government (paragraph 49, page 22 of the Report 
by the Secretariat). 
Can China guarantee that the delegation of authority to local governments will not adversely 
affect the ability of foreign enterprises to obta in approval for their investment proposals? Will 
the Chinese Central Government be monitoring  the delegated foreign investment approval 
decisions of local government?  
Answer 
By delegating the authority of foreign investme nt approvals to local governments, the Chinese 
government improves the efficiency of administrative examination and approval, accelerates the 
approval procedures for foreign investment projects a nd facilitates foreign investment in China. With 
the delegated authority, local competent commerc ial authorities have the right to examine and 
approve projects of larger scales and in more industries. The examination criteria for foreign-invested 
enterprises in these projects, however, remain uncha nged. Both central and local governments should 
comply with the uniform criteria and guidelines when examining and approving projects. These 
criteria and guidelines refer to those provided for in the Law on Chinese-Foreign Equity Joint 
Ventures , the Law on Chinese-Foreign Contractual Joint Ventures , the Law on Foreign-Capital 
Enterprise , their respective implementing regulations and rules, as well as other rules formulated in 
accordance with the above-mentioned laws and regulations 
Question 5 
Australia is encouraged to note that the ND RC has recently lifted the screening threshold for 
FDI. Under China's current foreign investment  approval process, the National Development 
and Reform Commission retains the prerogative to screen and approve projects above certain thresholds (US$300 million for "permitted" and "encouraged" industries, and US$50 million 
for restricted industries) in some industries. Those valued at or below the threshold must be 
approved by the local Development and Reform Commissions (DRCs).   
Does China have any further plans to lift the approval and screening thresholds in the 
foreseeable future?  
Is China considering the possibility of abolis hing the screening and approval process below a 
certain threshold, for example, projects valued below US$300 million?   
Answer 
Given the actual situation of the Chinese economy, it is necessary for local Development and Reform 
Commissions (DRCs) at all levels to verify and ap prove investment projects, including FDI projects 
according to different screening thresholds. Since the reform and opening up, the Chinese government  WT/TPR/M/230/Add.1 
 Page 41 
 
 
  has made great efforts to simplify the approval process and promote investment facilitation and has 
delegated its authority of approval to local governments for several times.  
Recently, the Chinese government has once again delega ted its authority of approval, which involves 
the most significant adjustment to the related thresh olds over the past thirty years. Except for projects 
to be approved by the NDRC as required in the Catalogue of Investment Projects subject to 
Governmental Approval , the encouraged and permitted projects in the Catalogue for the Guidance of 
Foreign Investment Industries , whose total amount of investment (including increased capital 
contribution) is no more than USD 300 million,  are now to be approved by local DRCs.  
III. T RADE POLICIES AND PRACTICES BY MEASURE  
(2) M EASURES DIRECTLY AFFECTING IMPORTS  
(iv) Import prohibitions and licensing 
Question 6 
Australia remains concerned about some aspects of China's iron ore import licensing system 
(paragraph 35, page 34 of the Report by the Secretariat).  
We note that CISA has said that it would like to see a reduction in the number of iron ore 
licences issued.  Is this under consideration?  
What role does CISA play in iron ore import licensing? 
Answer 
The Chinese government notes that Chinese steel ente rprises have reached certain consensus on the 
issue of iron ore import, and have adopted industr y self-discipline measures. These actions epitomize 
the will of the industry, and members may obtain re levant information from the website of China Iron 
and Steel Association at http://www.chinaisa.org.cn. 
(vi) Contingency measures 
Question 7 
We note that China adopted 16 anti-dumping me asures between 2007-2008 and initiated its first 
countervailing duty investigation in June 2009 (paragr aphs 39-40, page 35 of the Report by the 
Secretariat).  
Could China outline the decision-making process behind initiating an anti-dumping or 
countervailing duty investigation, including the organisations involved and what factors are 
considered?   
Is any assistance provided to industries seekin g measures and, if so, what form does the 
assistance take?   
Answer 
In accordance with the Foreign Trade Law , the Ministry of Commerce is the competent authority 
responsible for foreign trade investigations and remedies. In initiating anti-dumping or countervailing 
duty investigations, the Ministry of Commerce will initiate investigations pursuant to the Anti-
dumping Regulations of the People's Republic of China , the  Countervailing Regulations of the WT/TPR/M/230/Add.1 
Page 42  
 
  People's Republic of China , the Provisional Rules for Cases Filing in Anti-dumping Investigations  
and the Provisional Rules for Cases Filing in Countervailing Duty Investigations . 
The procedures for anti-dumping or countervailing duty investigations are specified in Articles 13 to 
19 of the Anti-dumping Regulations and Articles 13 to 19 of the Countervailing Regulations . For 
detailed information with respect to the two Regulations, please see the following websites: 
http://www.gov.cn/zwgk/2005-06/03/content_41 08.htm and http://www.gov. cn/zwgk/2005-06/03/ 
content_4106.htm. 
All the anti-dumping and countervailing cases initiated so far are pursuant to the applications of 
domestic industries. Ministry of Commerce will pr ovide consultancy to industries when requested. 
(3) M
EASURES DIRECTLY AFFECTING EXPORTS  
(iii) Export taxes 
Question 8 
Australia notes that in 2009, statutory export taxes applied to 95 tariff lines at the HS 8 digit 
level (up from 88 tariff lines at the time of the la st Review). Interim export taxes also applied to 
258 tariff lines (down from 334 lines) (paragraph 76, page 43 of the Report by the Secretariat). 
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 conformity with the pr ovisions 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.  
Australia would therefore appreciate clarification of  the WTO basis for the imposition of export 
duties on the additional tariff lines, given the constraints contained in Article 11.3 of China's 
Protocol on Accession. 
Question 9 
Australia understands the Ministry of Land and Resources has stopped accepting applications 
for new rare earths prospecting and exploratio n until 30 June 2010.  We also understand that a 
draft report titled "Rare Earths Industry De velopment Plan 2009-2015" was released in 
August 2009 by the Ministry of Industry and Info rmation Technology.  We note this document 
provided details of China's plans to restrict ex ports of some rare earth elements and ban 
exports of others altogether. 
Australia would be grateful for an explanation of this policy.  Australia would be grateful for clarification of China's policies in relation to the production and 
export of rare earths, including details of any limits on production, and any restrictions which 
apply to the export of rare earths, such as export bans or quotas. 
Answer (questions 8-9) China's export administration on a few products are for the purpose of protecting environment, 
protecting human, animal or plant life or hea lth, conserving exhaustible natural resources, or 
protecting national security. Such measures do not c onstitute arbitrary discrim ination, or disguised 
restriction on international trade, and are fully consis tent with WTO rules. Since issues here are either 
subject to or related to the ongoing WTO disput e cases of DS394, 395 and 398, China will provide 
further comments after the final rulings are made.   WT/TPR/M/230/Add.1 
 Page 43 
 
 
  (viii) State trading 
Question 10 Australia notes that 'State trading is not used to fulfil the [Chinese] Government's contractual 
obligations, except in certain circumstances, such as food aid to foreign countries' 
(paragraph 88, page 46 of the Report by the Secretariat).  
Could China please explain what is meant by 'contractual obligations', and provide further 
details about its food aid programs to foreign countries?   
Are China's exporting state trading enterprises indi rectly involved in donation of stocks to other 
governments, private voluntary organizations etc which are then sold into commercial markets 
(i.e. monetisation of food aid) ? 
Answer The concept of "contractual obligation" derives from WTO document G/STR/N/10, and China 
interprets the term according to the definition of the WTO document.  
Regarding food aid, China's food aid is conducted under the South-South cooperation framework of 
the United Nations. It has no connec tion with state trading. As far as we know, there is no such an 
issue like monetisation of food aid.  
(4) M
EASURES AFFECTING PRODUCTION AND TRADE  
(ii) Direct expenditures, industrial po licies, and price "guidance" measures 
Question 11 We note that China introduced measures in 2009 to support ten sectors most affected by 
reduced external demand due to the global eco nomic crisis.  At the same time, it also 
encouraged consolidation through mergers and acquisitions (paragraph 118, page 53 of the Report by the Secretariat).   
Could China advise what impact the above measur es and policy have had on overcapacity in the 
iron and steel industry?  
Answer 
The adjustment and rejuvenation plan for the stee l industry in 2009 was a policy document issued to 
address the serious situations caused by global financ ial crisis which resulted in a sharp decline in 
external demands. A key objective of the policy was to address the excessive capacity problem. The 
elimination of obsolete capacity is always a precond ition for consolidation and further development of 
the steel industry. In 2009, China eliminated 16. 91 million tons of obsolete steel production capacity 
and 21.13 million tons of obsolete ir on smelting capacity. To intensify the elimination of the obsolete 
capacity is of key importance in addressing the ex cessive capacity issue of the steel industry.  WT/TPR/M/230/Add.1 
Page 44  
 
  IV. T
RADE POLICIES BY SECTOR  
(2) A GRICULTURE  
(ii) Policy objectives and administration 
Question 12 
The Report by the Secretariat highlights ho w agricultural policies emphasise market price 
support and input subsides which are more production and trade distorting than alternative 
policies, and how they may also lead to negativ e environmental effects (paragraphs 12, page 71; 
23-32, pages 73-75).  
What alternative policies are being considered to improve the efficiency of agricultural 
production? 
Answer Besides the market price support and input subs idy measures mentioned in the Report of the 
Secretariat, the Chinese government has also attach ed higher importance to the improvement of rural 
infrastructures, development of modern agriculture  and promotion of technology dissemination for 
agricultural production in order to enhance agricu ltural productivity and increase farmers' incomes.  
To achieve such objectives, the Ch inese government has in creased investment in green box measures 
like the agricultural infrastructure construction, ag ricultural technology promotion, farmers training, 
and disease and pest prevention and treatment. Acco rding to the domestic support notification for 
2002-2004 submitted by China, the green box support  level of the period increased by over 29% of 
that of 1999-2001. The Chinese government will con tinue to strengthen the support in green box 
measures.   
Question 13 
Australia notes that China's PSE has increased from an average 3 per cent of the value of gross 
farm receipts in 1995-97 to 11 per cent in  2006, and 9 per cent in 2007 (paragraphs 11-12, 
page 71 of the Report by the Secretariat).  Moreover, market price support for commodities 
comprised almost one third of the total PSE, with  high levels of support for cotton, sugar and 
maize.  Such policies are highly trade-distorting and adversely impact global agricultural markets and impede trade. 
Australia notes that China has no AMS commitm ents under its accession to the WTO. Hence, 
any amber box support is required to fall within China's de minimis  limits i.e. 8.5 per cent of the 
value of production.  Can China provide specific data to show that these support levels, both 
product-specific and non product-specifi c, are within its WTO commitments? 
Answer 
The Chinese government has notified the WTO its agri cultural domestic support  data for 2002-2004. 
The AMS, both product-specific and non product-specific, are within China's de minimis  limits i.e. 
8.5%. Besides, according to our estimation based on th e data available, the AMS levels in recent years 
did not exceed the above limit.  
Can China advise if it is planning to continue increasing the types of support that are included 
in the PSE calculations, including support levels for key commodities?  WT/TPR/M/230/Add.1 
 Page 45 
 
 
  Answer 
China is a traditional agricultural country with a huge population. The production and marketing of 
key agricultural products relate not only to the liv elihood of 700 million farmer s but also the national 
food security. China would determine its support le vel to key agricultural products based on actual 
conditions. However, one point for sure is that China would adopt agriculture support policies in 
conformity of the WTO Agreement on Agricu lture and China's accession commitments.   
Is China considering support for its farmers th rough less trade-distorting programs, i.e. 
measures not linked to market prices and production?  
Answer 
First of all, according to China's accession comm itments, China does not have total AMS, so any 
amber box support shall be included in China's de minimis  limits. In general, China's agricultural 
support and protection measures have little distorting effect on trade. Secondly, China relies more on 
green box measures to support farmers. Pl ease refer to our reply to Question 12. 
(iii) Policy instruments 
Question 14 
China applies a range of border protection meas ures e.g. high tariffs, tariff rate quotas or 
import licensing to a number of commodities such  as wool, cotton, sugar, wheat, and rice. Many 
of the commodities are input s into further processing. 
Can China explain the rationale for such pr otection measures and any consideration of 
alterative policy measures (paragraphs 14-18, page s 72-73 of the Report by the Secretariat)?   
Answer 
As mentioned above, China is a traditional ag ricultural country with a huge population. The 
production and marketing of key agri cultural products relate not onl y to the livelihood of 700 million 
farmers but also to the national food security. Same  as the situation at China's accession into the 
WTO, there is still the need to have the tari ff rate quota system on these agricultural products.  
According to China's accession co mmitments, China adopts import tariff rate quotas over 8 categories 
of agricultural products including wheat etc. However,  the in-quota tariff rate of most products is 1%, 
and the highest in-quota tariff rate does not exceed 15%,  which is much lower than the tariff level of 
relevant products in other members. Therefore, th e criticism that China main tains a "high tariff rate" 
for these agricultural products is groundless. The current tariff rate  quota system ensures the unified, 
fair, transparent, predictable and non-discriminator y tariff rate quotas administration as well as the 
smooth trade of relevant products. We do not have  a plan to adopt other measures at present.  
Question 15 
The VAT applying to imported agricultural products  e.g. wool is not applied to domestic small-
scale producers (paragraph 14, page 72 of the Repo rt by the Secretariat). This disadvantages 
imported products.  
Can China explain the rationale for the measu re and how this meets China's WTO obligations? WT/TPR/M/230/Add.1 
Page 46  
 
  Answer 
Regarding this policy, China has made explanation and clarifications for several times. In summary, 
we have the following points to make. 
First of all, China has a huge number of small farmers across the country, which makes it impossible 
to conduct accounting and tax filing. In other words,  to levy value-added tax upon them is infeasible 
and uneconomical because of the huge administrative cost. This is the fundamental reason behind the 
policy. 
Second, in China the agricultural production is ma inly based on household operation. The sales scale 
is very small. The VAT exemption is applied only to farmers who sell their own products like a 
kilogram of potatoes in an open air market. This is  completely different from the import of products in 
bulk. Their VAT policies are not comparable.  
Third, as far as we understand, other members with a VAT system also seem to exempt VAT from 
farmers who sell their own products, while levy ing tax over imported agricultural products.  
Fourth, even if we apply VAT over these farmers,  we would adopt a policy that would establish a 
commercially-meaningful threshold like in other countries. Most farmers would fall below the 
threshold. The real effect would be the same as the current policy.  
Therefore, China does not believe the current polic y is not in compliance with its WTO obligations. 
Question 16 There has been a large increase in the funds  provided for the Comprehensive Subsidy on 
Agricultural Inputs (from Y12 billion in 2006 to Y63.8 billion in 2008) (paragraph 26, page 74 of 
the Report by the Secretariat).  
Can China provide more information on how this money is being spent and whether funding is 
expected to continue to grow in future years?   
Answer 
Since the implementation of the comprehensive subsidy on agricultural inputs in 2006, China has 
increased the subsidy from 12 billion Yuan in 2006 to 79.5 billion Yuan in 2009. The subsidy policy 
is mainly for protecting the farmers' interests. In the future, Chinese government will continue to 
allocate a reasonable amount of subsidy on agricult ural inputs according to the dynamic adjustment 
mechanism of the subsidy program.  
Question 17 
Further to the Report by the Secretariat (par agraph 18, pages 72-73), Australia notes that 
China also introduced automatic import licensing  for fresh milk, milk powder and whey as of 
1 August 2009.  
Could China explain the rationale for this licen sing requirement, including what developments 
led to the introduction of import licensing at that time?  WT/TPR/M/230/Add.1 
 Page 47 
 
 
  Answer 
The international prices of milk products have b een fluctuating drastically since 2009, leading to 
greater business risks for Chinese import enterprise s. To better monitor the import volume of milk 
products and provide timely, accurate and complete in formation to the industry, to help enterprises 
have a better view of the overall market situation and to enhance their market analysis and judgement 
capability, Ministry of Commerce adopted automa tic import licensing over milk, milk powder and 
whey according to the Measures for Administration of Automatic Import License of Goods  and 
Measures for Administration of Import Report and Information Release of Staple Agricultural 
Products .  
Question 18 
We note that prices for a range of products, incl uding cotton, grain and su gar, are "guided" by 
the Chinese Government (paragraphs 29-32, page  75 of the Report by the Secretariat).  
What factors does China consider wh en guiding/setting these prices?  
Answer China's grain market has been completely liberali zed with the prices decided by the market demands 
and supplies. The minimum purchase prices for wheat and rice will be triggered only when the market 
prices drop to such a low level that the interests of farmers will be seriously affected. The minimum 
purchase prices for grains are determined on the basis of grain growing cost as well as domestic and 
overseas grain prices. They are kept at a relatively st able level and may be subject to adjustment by 
the State according to actual conditions. The mini mum purchase price system is applied throughout 
the country and is administered by National De velopment and Reform Commission together with 
Ministry of Finance and Ministry of Agriculture.  
What consideration is China giving to reducing government support of these industries in order 
to encourage greater efficien cy and market influence?  
Answer Price support measures to agricultural products are widely adopted by WTO members. The current 
price support policy of China plays an active role in  stabilizing the prices of agricultural products and 
increasing the income of farmers. It is also cons istent with China's obligation in the WTO. The 
Chinese government has no plan to phase out such measures at this stage.  
Question 19 
Australia notes that China has not provided any notifications to the WTO Agriculture 
Committee for support during the Review period though we welcome China's submission of 
domestic support notifications for the 2002-2004 period (paragraph 23, page 73 of the Report by the Secretariat).  
When will China provide members the opportuni ty to review both its outstanding domestic 
support and other outstanding notifications (including STE's)?   
Answer China has recently submitted to the WTO the ag ricultural domestic support notification for 2002-
2004.  WT/TPR/M/230/Add.1 
Page 48  
 
  Regarding the notifications for years after 2005, as Ch ina's current statistic standard is different from 
the standard required by the WTO in the notificatio n and also China reformed its budgetary subjects 
which now are quite different from the previous subj ects, China needs more time to do the conversion 
of statistic standards and prepare the notifications.   
Regarding the STE notifications, Ch ina will soon submit an STE notifica tion for 2004-2008 after this 
TPR. 
Question 20 Australia notes that China's agricultural support programs include ' minimum prices for grains; 
purchases by state trading enterprises; direct payme nts; favourable taxation; input subsidies; and 
preferential loans' (paragraph 23, page 73 of the Report by the Secretariat).   
Can China please clarify whether agricultural entities are eligible for the "preferential tax 
policies for foreign-invested export ent erprises" described in G/SCM/N/123/CHN? 
Could China provide complete details of the agricultural support programs noted above?   
Answer In G/SCM/N/123/CHN notification, China has explai ned what kind of foreign-funded enterprises may 
enjoy "preferential tax policies for foreign-invested  export enterprises". Besides, due to tax reforms 
adopted in recent years in China, many policies ha ve been changed. China would submit its subsidy 
policy notifications for 2005-2008 this summer, which would reflect the changes of tax policies in 
China, including agricultural support measur es in which Australia is interested.  
Question 21 
Australia notes that imports of corn, rice, whea t, sugar and cotton are subject to both tariff 
quotas and state trading import arrangements (paragraph 17, page 72 of the Report by the 
Secretariat). According to China's notifica tion to the Committee on Agriculture on 
12 April 2010 (G/AG/N/CHN/19) in-quota imports fo r wheat, corn, and rice remain significantly 
under-filled, including both State Trading Enterprise (STE) and private sector allocations.  
Australia has also observed that since China's WTO accession in 2001, China has consistently 
failed to fill tariff quotas of the above-noted commodities. This is despite these tariff quotas 
being oversubscribed (based on notifications to the Committee on Market Access). For example 
in 2009, import licences for wheat covering  12,259,400 tonnes were requested, with 
2,623,400 tonnes denied, as the scheduled tari ff quota covers 9,636,000 tonnes. Subsequently, 
G/AG/N/CHN/19 notified that only 904,000 tonnes were imported in 2009.  
Australia also notes China's previous respon ses to questions in the WTO Committee on 
Agriculture on tariff quota under-fill from Canada (p. 26, G/AG/R/54) and Australia (p. 16, G/AG/N/CAN/79). China has consistently responded that the low fill rate is a consequence of 
market fluctuations/conditions and there is no need for changes to existing administration 
arrangements.   
Since all WTO Members are subject to the same ma rket fluctuations and conditions, but do not 
have the same pattern of under-fill, would Chin a please provide specific details on the enduring 
market conditions in China that consistently prev ent it from filling tariff quotas, specifically for 
wheat, corn and rice?   WT/TPR/M/230/Add.1 
 Page 49 
 
 
  Answer 
Since WTO accession, China has been allocating tariff rate quotas of agricultural products according 
to its commitments. Enterprises that have obtaine d quotas may decide whether to import the products 
at their own discretion based on market conditions. In recent years, the filling of tariff rate quotas 
varies from product to product. For cotton, the 894,0 00 tons of quotas have be en filled every year. For 
corn, wheat and rice, due to abundant domestic s upply and stable market price based on the increase 
of grain output for six consecutive years since 2004,  enterprises do not have a strong desire for 
import, leading to limited volume of import.   
Given the consistent disparity between the stro ng demand for import licences and the low level 
of imports for wheat, corn and rice, could Ch ina elaborate on how applicants for import 
licences are consistently misjudging the market?   
Answer 
Obtaining tariff rate quota is the precondition to en gage in the trade business of relevant products. 
When applying for the quotas, enterprises are actually competing for trade opportunities. Besides, 
Chinese government does not charge any fee for the application of the quotas. Therefore, the quota 
users would submit applications actively in every September when the quotas are issued. However, 
the actual use of the tariff rate quotas depends on the market situation at the time of import. In our 
view the final decisions of the applicants who have  acquired quotas reflect their sound analysis of the 
market.    
For the filled portion of the tariff quotas for wheat, corn and rice, can China advise what 
portion was allocated to STEs and what was allocated to private enterprises?  
Answer 
The Interim Measures for the Administration of Im port Tariff Rate Quotas of Agricultural Products 
amended in 2003 adopts the unified, fair, just, transparent, predictable and non-discriminatory 
principle for tariff rate quotas administration. In the application form for tariff rate quotas, there is a 
column requiring enterprises to indicate if they ag ree to disclose relevant information of themselves 
and their quotas obtained. On this question concer ning a specific enterprise, we have to respect 
opinions of the applicant enterprise 
For transparency purposes, can China provi de a breakdown of foreign-owned and 
domestically-owned recipients of import licences?  
Answer Please refer to our answer to the previous question.  
(4) M
ANUFACTURING  
Question 22 
Paragraph 42 of the Report by the Secretariat (p age 78) notes that the average tariff for China's 
automotive sector was 16.2 per cent in 2009 (compared with 15.3 per cent in 2007), due mainly to the change in the number of tariff lines.  Th e tariff on auto parts and components is 10 per 
cent, while most passenger vehicles are subject to a tariff rate of 25 per cent, and motorcycles of 
rates between 30 per cent and 45 per cent. WT/TPR/M/230/Add.1 
Page 50  
 
  Does China have any plans to reduce its import tariffs on automotive products in the near 
future?   
Answer According to China's accession commitments, Chin a has fulfilled its commitments on tariff reductions 
for the automotive industry. We have no plan to fu rther reduce the tariffs of automotive industry at 
present.  
Question 23 Paragraph 42 of the Report by the Secretariat (p age 78) notes that an automatic import licence 
is required from the MOFCOM. 
What measures have been taken (or have been planned), since the last review, to enhance 
market access in the automotive sector by way of addressing non-tariff barriers? 
Answer 
With regard to market access in automobile sect or in China, China has faithfully honoured its 
commitment regarding eliminating non-tariff measures in this area, including import license and 
quota. Besides, overall tariff level of the automobile sector has already been lowered considerably. At 
present, market competition in the automobile sect or is fierce and China does not agree with the 
assertion that there are still NTBs in this sector.  
(5) S
ERVICES  
(i) Overview 
Question 24 
We welcome China's efforts to promote further opening of its services sector.  Paragraph 46 on 
page 79 of the Report by the Secretariat, for example, notes that the Chinese Government has placed more emphasis on deve loping services by undertaking liberalization in certain sectors, 
including financial services.  However, we no te that China's report lists new measures and 
programs only in some financial services, touris m, telecommunications and chemical fertilizer 
distribution services (paragraphs 83-91, pages 20-21 of the Report by China).  Therefore, 
significant restrictions on foreign investment and private sector activities remain. 
Noting the importance of services to China's economy, could China please outline any further 
liberalization it intends to undertake in its services economy?  For example, what steps is China 
taking or considering in other services sector, such as education, legal services, accounting, 
mining services and envi ronmental services? 
Answer 
As a developing country, China has been constantly  promoting the reform and opening up in the 
services sector, although the service s industry in China is still in th e early stage of development. 
China will further raise the devel opment level of the services sector  and its proportion in the national 
economy. In this respect, China will continue to c onsummate its policies for market access of services 
sectors, speed up the establishment of an open, fair , and standardized system for services suppliers 
and encourage the participation of private investme nt including foreign invest ment. To be specific, 
China is going to expand the br eadth and depth of opening up in the services sector, encourage 
foreign capital to invest in energy conservati on and environmental protection services, modern  WT/TPR/M/230/Add.1 
 Page 51 
 
 
  services such as industrial designing, outsourcing, l ogistics etc, and Chinese and foreign companies 
are also encouraged to strengthen R&D cooperation. To build sound foreign investment environment, 
China will continue to streamline procedures for qua lification and licensing. The State Council issued 
Certain Opinions on Accelerating the Development of Services Sector  in 2007 and Certain Opinions 
on Further Improving the Use of Foreign Capital  early this year. The Catalogue for the Guidance of 
Industries for Foreign Investment  will be revised for the fifth times, and Catalogue of Advantaged 
Industries for Foreign Investment in Mid-West China  will also be amended in the near future. These 
latest development will certainly result in furt her market access opportunities for foreign services 
suppliers in China 
(ii) Financial services 
(a) Banking 
Question 25 
Paragraph 54 on page 80 of the Report by the Secretariat notes that the main legislation 
regulating the banking sector has not changed since 2008. 
Does China intend to liberalize any of its foreign direct investment provisions, such as allowing 
for increased FDI (from 20 to 51 per cent) or a llowing for foreign investors to acquire an 
interest in more than two Chinese banks?   
Answer 
China at present does not have such a plan.  
According to China's services schedule, qualified fore ign financial institutions are allowed to establish 
wholly foreign-owned banks, incl uding subsidiaries and branches. However, China did not make any 
commitments on the acquisition of existing dome stic banks by foreign financial institutions. 
Nevertheless, China allows forei gn investors to acquire equities of  Chinese-funded banks up to certain 
level. According to Measures on Administration of Equity Investment of Overseas Financial 
Institutions in Chinese-funded Financial Institutions , the percentage of equity investment of a single 
overseas financial institution in a Chinese-funde d financial institution may not exceed 20%. 
China's banking sector is still under-developed. With the international financial crisis still exerting 
great uncertainties, we have every reason to be cau tious in further liberalizing China's banking sector. 
On the other hand, such measure is also in lin e with the prudential measures provided for in the 
Annex on Financial Services under the GATS to protect investors and depositors and ensure the 
integrity and stability of the financial system. 
(b) Insurance Question 26 Paragraph 62 on page 83 of the Report by the Secretariat notes that the insurance market is 
regulated by the China Insurance Regulatory  Commission (CIRC) which administers the 
Insurance Law. Under the Insurance Law, all in surance companies providi ng insurance services 
in China must be registered, and all legal persons  (including natural persons) or organizations 
in China requiring coverage in China must purchase insurance services from an insurance 
company registered and established in China. 
How does China ensure that foreign insurance pr oviders are afforded transparency and timely 
processing of their applications to prov ide new insurance products in China?   WT/TPR/M/230/Add.1 
Page 52  
 
  Answer 
China Insurance Regulatory Commission (CIRC) has granted national treatment to foreign-invested 
insurance companies following Ch ina's accession commitments. In r eality, since China's accession 
into the WTO, with the implementation of China' s commitments in the insurance sector and the 
further liberalization of the insurance market, the number of foreign-invested insurance companies 
and branches has been dramatically increased. As l ong as the insurance products that foreign-invested 
insurance companies wish to provide are within the scope of the insurance business that China has 
committed to liberalizing in the services schedul e, the CIRC will process the application in a 
transparent and timely manner according to relevant laws and regulations. 
Question 27 
Australia notes that when foreign investors ac quire equal to or more than 25 per cent of a 
Chinese insurance company, the company loses its st atus as a domestic insurer. This means that 
the company is unable to provide compulsory insurance services, which represent a large 
portion of the insurance market.  
Could China please explain the rationale behind this measure? Answer 
According to Article 4 of The Law on Chinese-Foreign Equity Joint Ventures , the proportion of the 
investment contributed by the foreign joint ventur e(s) shall generally not be less than 25% of the 
registered capital of a joint venture. Therefore, when  foreign investors acquire equity equal to or more 
than 25 per cent of a Chinese insurance company, such company will be regarded as a joint-venture 
entity and its business scope shall be in conformity  with the conditions set out in China's services 
schedule, which stipulates that foreign-invested insu rance companies shall not engage in the statutory 
insurance business, namely the compulsory insurance services. 
Question 28 We understand that the China Banking Regulatory Commission has been undertaking a review 
of foreign investment in China's financial inst itutions, including on issues relating to foreign 
equity participation (currently not permitted to exceed 20 per cent) and the "two bank rule" (the policy that no single foreign investor ca n invest in more than two Chinese banks).   
Could China advise on progress in this review?   
Does China have any plans to introduce further liberalisation in its financial sector in the 
foreseeable future, in particular with regard to foreign participation?   
Answer 
Please refer to answer to question 25.  
(iii) Telecommunications  
Question 29 
Paragraph 83 on page 88 of the Report by the Secretariat notes that since China's previous 
review, China has continued to liberalize teleco mmunication services and promote competition 
in the sector; new players and technology have been  introduced and prices have come down.  In  WT/TPR/M/230/Add.1 
 Page 53 
 
 
  that context, Australia welcomes the reduction of the minimum registered capital requirement 
from CNY2 billion to CNY1 billion for foreign-inv ested enterprises engaging in basic telecoms 
across the country (paragraph 84 on page 88 of the Report by the Secretariat).   
However, this requirement remains high.  Is an y thought being given to further reduction?   
Answer 
The State Council promulgated in Se ptember 2008 the Decision amending the Regulations on the 
Administration of Foreign Invested  Telecommunications Enterprises  (State Council Decree No. 53), 
which halves the minimum capital requirement on the basic telecom operation of the foreign invested 
telecommunication enterprises. Current ly, China doesn't have any other plan to change the relevant 
regulations on legislative aspect. 
Regulations on the Administration of Forei gn Invested Telecommunications Enterprises  sets 
minimum registered capital requirement for the fo reign invested telecom enterprises, the domestic 
services suppliers are subject to the same conditions as well. This is consistent with national treatment 
principle . The telecom sector is a capital-intensive industry featuring economy of scale. If the 
registered capital of telecom companies were too lo w, it would be inadequate to protect the investors 
and consumers. As we know, many WTO member s have their own minimum registered capital 
requirement based on their national conditions. The minimum capital requirement is WTO consistent 
as long as they are applied on the national treatment basis. 
How many basic telecoms licences have been provi ded to foreign or joint venture companies?   
Answer 
China opened up its telecom services sector in lin e with the WTO commitments. Qualified domestic 
and foreign companies are entitled to apply for the basic telecom services. Business communities will 
make their own decisions as to whether to enter a pa rticular telecom market based on their analysis of 
such factors as their own capacities, actual market circumstances and development potential etc. In 
terms of granting new license for basic telecom serv ices in China, up till now China has not received 
application from foreign or joint venture compani es for license of basic telecom services. Therefore, 
no license of basic telecom services has been granted to foreign or joint vent ure companies in this 
respect.  
We understand China's draft Basic Telecoms Law was submitted to the State Council in 2004.  
We would be grateful for an update on progress in consideration of this law.  
Answer 
The draft of the law has been submitted to the Stat e Council for review. Currently, the relevant work 
is going on according to the procedures and requirements of the Legislation Law . Currently we do not 
have a specific timetable of its final promulgation.  
In regard to the take up of new technologies, co uld China provide information on any policies it 
may have regarding fostering the provision of fast broadband services via Next Generation 
Networks (NGN)?  
Answer Informationization has been a major development tren d of the world and is an important driving force 
promoting the transformation of our society a nd economy. China attaches great importance to WT/TPR/M/230/Add.1 
Page 54  
 
  informationization work. The national informati onization strategy from 2006 to 2020 highlights that 
China will accelerate networks convergence, implem ent a plan of transition into next generation 
networks. As for detailed measures and po licies, they are still under discussion.   
What are China's forecasts for availability of NGN services in China over the coming years? 
Answer 
Please refer to the answer to the previous question.  
How does China see its current regulatory regime evolving over coming years, under the 
influence of such economic and technological developments? 
Answer 
Like other members, China's regulatory regime has been and will be developed along with the 
changes in the market situation.   
Which elements are likely to remain, or to be rolle d back, or to be rationalised to create a new 
regulatory approach? 
Answer Please refer to the answer to the previous question. 
Question 30 
Which WTO telecommunication commitments does China cons ider will continue to be 
important and what additional WTO telecoms co mmitments does it consider might be desirable 
to pursue in light of these developments? 
Answer As far as new market access and competition are c oncerned, the paces of reform for the telecom 
sector have never been interpreted. China has done a lot and will try its best to promote sustainable development of the telecom sector.   
A
PPENDIX TABLES  
Question 31 
In Table AIII.3 on page 124 of the Report by the Secretariat, Australia observes that grain 
imports have decreased from 140.8 (10,000 t) in 2006 to 42.3 (10,000 t) in 2008. 
Could China explain the underlying rea son/s for the decreased imports?  
Answer 
China has witnessed increase  in grain output for 6 consecutive years. At present, with abundant 
domestic supply and stable domestic market price,  enterprises do not have the initiatives to import 
large amount of grain in view of much higher in ternational grain prices. In 2009, with domestic 
demand growing, grain import began to increase. China believes that this embodies the fact that the underlying reason affecting grain import is market factors.   WT/TPR/M/230/Add.1 
 Page 55 
 
 
  Report by China  
II. G ENERAL ECONOMIC ENVIRONMENT AND POLICY DIRECTION  
(2) S TIMULUS PACKAGE IN RESPONSE TO THE GLOBAL FINANCIAL CRISIS  
(iii) Advanced industrial restructuring 
Question 32 Paragraph 22 on page 8 of the Report by Chin a notes that "backward facilities" with a total 
steelmaking production capacity of 16.91 million tons were eliminated in 2009.   
How much additional capacity was created in 2009? 
Answer 
In 2009, steel output amounted to 567.84 million to ns, a year-on-year increase of 67.53 million tons. 
Please visit the website of Ministry of In dustry and Information Technology (MIIT) at 
http://www.miit.gov.cn/n1129347 2/n11293832/ n112941 32/n12858402/n12858 492/13024951.html 
for more information. 
How much capacity does China anti cipate phasing out in 2010?  
Answer 
China plans to eliminate 25 million tons of outda ted iron production capacity and 6 million tons of 
outdated steel production capacity. Please visit MIIT 's website at http://www.miit.gov.cn/n11293472/ 
n11293877/n13138101/n13138118/13191311.html for more information. 
(v) Effectiveness of the stimulus package  
Question 33 
We note China's report that 2009 retail sales of consumer goods in China totalled 
CNY12.53 trillion, up 15.5 per cent from the previous  year (paragraph 28, page 9 of the Report 
by China).   
What proportion of this was government spending compared with individual/household 
spending?  
Answer 
In view of the short time available for submission of the answers, we are not able to provide such 
statistics. 
SWITZERLAND
 
Question II, 45 The report mentions that there was also FDI lib eralization in the context of the bilateral 
agreements (CEPAs) between Hong Kong, China a nd Macao, China. In Switzerland's reading, 
the CEPA with the SAR of Hong Kong covers - with respect to non-services sectors - only WT/TPR/M/230/Add.1 
Page 56  
 
  cooperation  and promotion  of investment, but not market access liberalization  in the sense of 
GATS Mode 3. Could the Chinese delegation confirm if this reading is correct?  
Answer 
Switzerland's understanding is correct.  
Question 
II, 46 
Could the Chinese delegation share the criteria which MOFCOM or the delegated authorities 
use in approving an overseas FDI project?  
Is it correct that such approval is necessary in dependently of the fact that the investor is 
government or privately owned?  
Does the assessment also depend on the country of destination of the investment? 
Does the assessment also comprise an "economi cal" test, i.e. whether the investment makes 
sense from an economical perspective? 
Answer (to the above 4 questions) 
In 2009, Ministry of Commerce promulgated Measures for Administration on Overseas Investment  
(MOFCOM Decree No. 5 of 2009), which specified pr inciples to be followed in overseas investment, 
norms for overseas investment activities and circ umstances under which overseas investments would 
not be approved. Besides, the destination coun try's political and economic situations are also 
important factors to be considered in the assessment  for approval. However, whether the investment is 
economically or technologically viable shall be  determined by the enterprises themselves.  
Measures for Administration on Overseas Investment  applies to all enterpri ses established in China 
according to Chinese laws, regardless of the investor's  nature, i.e. state-owned or private, domestic or 
foreign.  
To obtain approval from National Development and Reform Commission (NDRC), the following 
conditions shall be met: the overseas investment project is in compliance with Chinese laws, 
regulations and industrial policies and does not impair State sovereignty, national security or public 
interest or violate rules of international law; th e investors of the project shall have a corresponding 
investment capacity etc. Approval of an oversea s investment project is not contingent upon its 
destination. Investors shall judge by themselves on the technological and economic benefits of the 
project and shall bear the risks by themselves. Members may refer to Interim Measures for 
Administration on Examination and Appr oval of Overseas Investment Projects  (NDRC 
Decree No. 21).  
Interim Measures for Administration on Examina tion and Approval of Overseas Investment Projects  
applies to all legal entities in China regard less of their ownerships or investors.  
Measures for Administration on Overseas Investment  and Interim Measures for Administration on 
Examination and Approval of Overseas Investment Projects  are available at following websites, i.e. 
http://www.mofcom.gov.cn/aarticle/b/c/200903/2 0090306103210.html and http://www.sdpc.gov.cn/ 
zcfb/zcfbl/zcfbl2004/t20051010_44801.htm.  WT/TPR/M/230/Add.1 
 Page 57 
 
 
  Question 
II, 52 It is widely recognized that a very large port ion of China's outward FDI leaves via the SAR of 
Hong Kong. At the same time there is no bilat eral investment protection treaty (BIT) with the 
SAR Hong Kong. What is the reason?  
How, if at all, are the competences between the Chinese and the SAR authorities divided for 
matters traditionally covered under a BIT? 
Answer (to the above 2 questions) 
Hong Kong SAR is an integral part of the People's Republic of China. For China BITs are signed with 
sovereign States. Therefore there has been no BIT between the People's Republic of China and its 
Hong Kong SAR.  
However, according to the Basic Law of Hong Kong Special Administrative Region , Hong Kong SAR 
may sign BITs with other States and regions in th e name of "Hong Kong, China". Such BITs shall 
bind Hong Kong SAR only.  
In the Closer Economic Partnership Arrangement (CEPA) concluded between the mainland of China 
and Hong Kong SAR in 2003, trade and investment pr omotion was covered in the section of trade and 
investment facilitation. Based on the work of the Mainland and Hong Kong SAR Joint Commission 
on Commerce and Trade and its investment group,  CEPA expanded the c ooperation between the 
mainland of China and Hong Kong SAR on trad e and investment promotion and specified 
cooperation mechanism, cooperation areas and participation of other entities etc.  
The mainland of China and Hong Kong SAR handl e issues traditionally covered under a BIT in 
accordance with their respective app licable laws and regulations.  
Question 
III, 12 According to the WTO Secretariat "China has desi gnated some foreign institutions to conduct 
PSI and to issue certificates. It is not clear to the Secretariat whether China sends 
people/experts or institutions/ institut es abroad to conduct PSI inspections."  
During the 2008 TPR, China indicated that "China does not dispatch experts or institutes 
abroad for inspection. Initial inspections for mech anical and electrical products with high risks 
will be carried out by overseas institutions, which may invite experts from China to provide on-
spot instruction if necessary". 
Could China indicate whether ex perts from China have been invited since 2008 to provide on-
spot instruction when initial inspections for mech anical and electrical products with high risks 
have been carried out by overseas institutions?  
Could China provide detailed information on the product (for instance HS code, product 
description, etc …) for which such inspection has been carried out, as well as when and where it 
the inspection has taken place? WT/TPR/M/230/Add.1 
Page 58  
 
  Answer 
China does not dispatch experts or  agencies for overseas inspections. Pr e-shipment inspections for the 
import of mechanical and electrical products with high risks and the import of waste raw materials are carried out by overseas authorized institutions, wh ich may invite technical experts from China to 
provide on-spot technical guidan ce and consultancy if necessary. No expert from China has been 
invited to provide on-spot technical guidance and consultancy since 2008.  
Question 
III, 20 According to paragraph 20, "China has provided ad valorem  equivalents (AVEs) for all but two 
non- ad valorem  tariff lines (HS4001.2100 and HS4001.2200). The authorities maintain that as 
China bound all its tariff lines at ad valorem  rates, these AVEs were at or lower than their 
bound rates." 
Could China indicate how it does verify and ensure that the AVEs are not above the bound 
rates? In particular, could China provide more details on the methodology and process used to 
ensure that AVE are at or lower than bound rates? 
Answer 
At present, China levies specific duties for 46 tariff lin es including frozen chicken, film and etc. After 
China's accession into the WTO, th e specific duties (AVEs) levied over the years were all converted 
strictly according to the ad valorem  rates committed in the accession. Th e rates of specific duties were 
re-calculated every year to ensure that the actual rates applied did not exceed the ad valorem  rates 
committed by China in the Goods Schedule. The conversion was primarily based on the average 
import price of the recent (four) years provided by  the Customs authorities. However, for few tariff 
lines, we excluded the years where no import was r ecorded or the prices which had fluctuated too 
drastically. The calculation formula is: Committed ad valorem  rates x Average import price = Specific 
duty  
It should be pointed out that after re-calculation of the rates of specific duties every year, where the 
specific duties (AVEs) were lower than the binding rates, the lower specific duties would apply. At 
present, the specific duties (AVEs) of about 70% of  the tariff lines are lowe r than their corresponding 
binding rates.  
Question 
III, 43 Could the Chinese delegation describe the pr ocess by which voluntary standards become 
mandatory by referencing in conf ormity assessment procedures?  
Answer 
In accordance with the implementing rules for CCC, some testing methods can be based on national 
recommendatory standards. For few new produc ts, it is possible to apply international 
recommendatory standards.  WT/TPR/M/230/Add.1 
 Page 59 
 
 
  Question 
III, 51 The Catalogue of Entry-Exit Commodities Subject  to Inspection and Quarantine could be a 
useful tool for Swiss Exporters. Could the Ch inese delegation indicate where the most current 
version of the Catalogue can be found (if possible on the Internet, in English)? 
http://www.aqsiq.gov.cn/zwgk/jlgg /lhgg/200912/t20091 231_133945.htm. 
Answer 
Please refer to the official website of the Genera l Administration of Quality Supervision, Inspection 
and Quarantine (AQSIQ) at http://www.aqsiq.gov .cn/zwgk/jlgg/lhgg/200912/ t20091231_133945.htm. 
Question 
III, 58 
Could the Chinese delegation elaborate on the re lationship between the CCC mark system and 
the CQC voluntary certification system? Can specif ic products (or parts thereof) fall under both 
systems? Could both marks be necessary? If yes, please indicate the reasons for that. 
Answer CCC (China Compulsory Product Certification) is a compulsory certification system for certain 
products in China. Relevant produc ts covered by CCC must be certif ied before being exported to or 
sold in China. CQC certification is voluntary.  
Question 
III, 61 and 62 China made in the last years huge efforts at cen tral, subterritorial and international levels to 
prepare its future accession to the WTO Gove rnment Procurement Agreement (GPA) and to 
submit progress reports and informations on the move of China's legislative framework to the 
principles and standards of the GPA. Switzerland appreciate these efforts. It is prepared to 
continue to provide support to China in regard to its adaptation to the requirements of the 
GPA. Switzerland can offer added value, especially in the field of the implication of procuring 
entities at subterritorial levels, this in terms of experiences, institutional cooperation and 
legislative frameworks. What are the main proble ms faced by the Authorities of the PRC on the 
way leading to the accession to the GPA and ho w could China's trade partners contribute to 
facilitate the move of the PRC to the GPA ? 
Answer 
China submitted a roadmap to modify its offer fo r the accession to the GPA at the meeting of the 
Committee on Government Procurement held in Octobe r 2009. In the roadmap, China highlighted that 
it is difficult for China to make s ubstantial change to the offer sinc e the government procurement laws 
and systems of China are very different from those of GPA members. First of all, requests from GPA 
members substantially exceed the coverage of China's Government Procurement Law . China faces 
legal limits in expanding its offer. Second, some key articles of the GPA lack of operability. It has no 
definition for government procurement or sub territori al and other entities. Relevant parties in China WT/TPR/M/230/Add.1 
Page 60  
 
  have different understandings towards GPA. Gene rally speaking, China's understanding is that 
government procurement only refers  to procurement by governmental  departments, sub territorial 
entity refers to provincial government, and other entities refer to public in stitutions. Many domestic 
enterprises request that the Chinese government give due consideration to the development of these 
enterprises when revising the offer. It is very ha rd for all relevant parties to come to a unified 
understanding of the GPA within a short period of time. 
Although facing the above difficulties, China's resolv e to accede to the GPA as soon as possible will 
not waver. At present, the Chinese government is making efforts to overcome various difficulties to 
modify the offer according to the roadmap submitte d in October 2009. China will try to submit the 
revised offer prior to the next meeting of the Committee on Government Procurement in July 2010. 
We are grateful to Switzerland for its understanding of the difficulties faced by China in joining the 
GPA and for giving us time to prepare the revision of the offer. To revise th e offer, China needs to 
tackle technical difficulties in terms of both gove rnment procurement and the GPA. We welcome 
technical support from GPA members including Swit zerland. China wishes to have exchanges with 
Switzerland in various forms, including inviting Swi ss officials and experts to explain GPA clauses, 
their implementation requirements and also to in troduce Switzerland's experience on accession and its 
implementation of the GPA.  
Question 
III, 65 While the GPA is operating on the ground of basic principles of non discrimination and 
national treatment, the Government of the PRC is under the procurement law obliged to 
procure domestic goods, projects, and services. In this context, Switzerland is preoccupied by 
the potential implications, in terms of market access and protection of sensitive information in 
the tendering procedure, of the application of  the National Indigenous Innovation Product 
Accreditation Work. According to this preferenti al procurement system, eligible products must 
contain Chinese ownership of its intellectual pr operty and meet severe requirements regarding 
the registration of the product's trademarks. Even if the requirements have in the meantime 
been lightened by the Chinese authorities, Chin a's indigenous innovation product accreditation 
system and the related procurement preferences ba sed on domestic content are in the view of 
Switzerland undermining the standards of the GP A and especially its objectives aiming at 
creating fair, open and effective competition worldwide. What are the measures that the 
Authorities of the PRC are planning to take in order to bring the internal legislations in line 
with the provisions of the GPA ? 
Answer 
The Chinese government has published online the Notice on Carrying out the Work of 2010 National 
Indigenous Innovation Product Accreditation  for public comments. The accreditation standards in the 
Notice  will apply equally to products manufactured by all enterprises set up in China. The government 
procurement support policy for indige nous innovation products is open and transparent. It aims to 
encouraging competition and is in conformity w ith GPA's fair and open principle as well as the 
commitment of China in its Government Procurement Law  to treat products of both domestic and 
foreign-funded enterprises equally.     
China will review its existing laws and regulatio ns according to GPA rules, researching and then 
adopting relevant measures to further ensure a fair, open and competitive government procurement 
system in China.   WT/TPR/M/230/Add.1 
 Page 61 
 
 
  Question 
III, 78 According to para. 78 and Box III.1, "Chinese auth orities believe that export taxes could help 
conserve natural resources or protect the envi ronment." Although Switzerland recognizes the 
importance to protect the environment and to co nserve natural resources and that actions have 
to be taken to limit trade in some highly po lluting or high-energy consuming products, the 
imposition of export taxes is not the most e fficient way to achieve this goal. Switzerland is 
pleased to note that China is starting to cons ider more suitable internal (rather than trade) 
measures to achieve these objectives. 
Could the Chinese delegation provide additional information on the internal measures China 
envisages to take? When does China think that these measures will replace the trade measures 
currently in force? 
Answer 
China's export administration on a few products ar e for the purpose of protecting environment, 
protecting human, animal or plant life or hea lth, conserving exhaustible natural resources, or 
protecting national security. Such measures do not c onstitute arbitrary discrimination, or disguised 
restriction on international trade, and ar e fully consistent with WTO rules.  
For environmental tax, relevant authorities are curre ntly studying on the issue, and we will provide 
relevant information at appropria te time according to the progress. 
Question 
III, 80 
In para. 80, the Secretariat's report suggests that VAT may be rebated on exports although the 
rebate rates are, by and large, lower than the VAT rates actually paid. The Secretariat's report 
concludes from this that the difference between the two rates constitutes a levy on exports which in turn constitutes an assistance to downstrea m domestic producers of the products affected 
(Box III.1). Even though rebate rates were increased  several times, the last time in June 2009, 
could the Chinese authorities indicate if and when  they intend to fully eliminate this difference 
between the two rates which can represent an unfair competitive advantage for domestic producers when the exported good is an input in the manufacturing process?  
Answer 
Less than full VAT rebate on exports is due to fi scal capabilities and etc, and China has no intention 
to give implicit assistance to downstream industr ies in China via VAT rebate policy. Since the 
adjustments made to the VAT rebate rates on exports st rictly follow the principle that the rebate rate 
be no higher than the rate levied, China believes they  are not inconsistent with  WTO rules. In China's 
opinion, adoption of the VAT rebate policy and its ad justment are part of China's taxation sovereignty 
and should not be challenged by other States as long as the policy does not breach WTO rules. At this stage we are not able to give a specific timetable for eliminating the difference between the rebate rate 
and the rate levied.  WT/TPR/M/230/Add.1 
Page 62  
 
  Question 
III, 113 Tax incentives apply in the form of enterprise income tax reductions or exemptions and may 
also take the form of VAT reductions.  Empiri cal evidence suggests that indirect taxes, notably 
those on consumption (VAT) and real estate are le ast damaging to long term economic growth.  
Is the government considering raising the share of indirect taxes in total tax revenues, e.g. by 
further phasing out tax concessions (VAT)? 
Answer:  According to researches and experience in practices , comparing with direct taxes, the role of 
indirect taxes in revenue collection seems to be  more significant than in economic adjustment. A 
complete, neutral and stable indirect tax system is of great significance to the long-term stable 
economic growth. Therefore, "gradually phasing  out tax concessions" is indeed the future 
development direction, and it is also the objective of China's further tax reform. However, "gradually 
phasing out tax concessions" will not be a policy tool to be adopted by China to "raise the share of 
indirect taxes in total tax revenues". In fact, indi rect tax revenues currently have already taken up a 
large proportion in the total tax revenue in China. China is to increase the sh are of direct taxes and 
property taxes in total tax revenues through efforts in optimizing tax structure and strengthening tax 
collection. Besides, in most cases, real estate taxes are regarded as di rect taxes rather than indirect 
taxes.  
Question 
III, 141 Could the Chinese Delegation indicate how many  proposed foreign acquisitions of Chinese 
companies where requested to go through a "n ational security review" since 2008 and with 
what results? 
Answer 
China is now drafting regulations on national security review over acquisitions of domestic 
enterprises by foreign investors. The regulations wo uld specify competent authorities, mechanism and 
procedures of the review. No foreign acquisition of  a Chinese company has been subject to national 
security review since 2008. 
Question 
III, 147 The Report states that China has been making efforts to achieve a balance between protecting 
intellectual property rights and encouraging compet ition. This was reflected in Article 55 of the 
Anti-Monopoly Law, which refers to the "abuse of intellectual property rights". Could the 
Chinese delegation indicate where this concept of "abuse of intellectual property rights" is clarified and defined? If the concept is not defined as  of yet, will this be done in the IP Antitrust 
Guidelines? If so, when and where will they be published? 
Answer Article 55 of the Anti Monopoly Law  of China prescribes that this law shall not apply to the conduct 
of business operators (undertakings) to exercise th eir intellectual property rights under relevant laws  WT/TPR/M/230/Add.1 
 Page 63 
 
 
  and administrative regulations on intellectual propert y rights; however, this law shall apply to the 
conduct of business operators to eliminate or restri ct market competition by abusing their intellectual 
property rights.  
In our opinion, the Anti Monopoly Law  of China has defined the act of abuse of intellectual property 
rights. The abuse of intellectual property rights und er antimonopoly context refers to the improper 
uses of intellectual property rights by business operato rs which result in eliminating or restricting 
competitions and constitute a monopoly agreemen t, abuse of dominant market position or 
concentration of business operators prohibited by the Anti Monopoly Law .  
According to the provisions of the Anti Monopoly Law , Chinese antimonopoly enforcement 
authorities are now conducting in-depth research on i ssues of intellectual property rights in relation to 
antimonopoly.   
Question 
IV, 2 Could the Chinese delegation specify what were the main specific factors that negatively 
affected incomes of China's farming population du ring the financial crisis? What is the reason 
that the rural population was affected stro nger by the financial crisis than the urban 
population? 
Answer 
Global financial crisis has exerted quite serious negative impact on the income of China's farming 
population. First of all, it caused the drop of pri ces of agricultural products and affected the income of 
farmers. In 2009, the price of agricultural products  dropped by 2.4%. Second, farmers were difficult 
to find jobs outside the rural area. Many labou r-intensive enterprises cut the salaries and lay off 
employees due to the shrinking external demands, which negatively affected the employment of rural labour. 
In recent years, the income gained through jobs in  urban areas has become a key income source of 
farmers. The main employers of farmers are export- oriented labour-intensive industries which were 
seriously affected by the international financial cris is. This also caused a serious negative impact on 
the income of the farmers.   
Question 
IV, 19 Could the Chinese delegation explain how the intr oduction of export tariffs on agricultural 
products contributes to conserving natural resourc es and to the protection of the environment?  
Answer 
The interim export tariff levied on certain agricu ltural products was a temporary measure. It was 
adopted against the background in 2007 of a declin e in world grain output and a rise in international 
grain price. It aimed to ensuring a stable domestic grain supply at a stable price by avoiding the price 
hike expectation in the domestic market due to th e sharp rise of international grain price. As the 
demand-supply relation in domestic and overseas mark et changed, China eliminated the interim 
export tariffs on all agricultural products on 1 July 2009. WT/TPR/M/230/Add.1 
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  Question 
Furthermore, the effects of export tariffs seem to be in contradiction to China's aim of minimal 
target revenues for farmers as well as the possibilities of creating additional revenue by exports. 
Could the Chinese delegation give more indications as to the effects of export restrictions on 
agricultural income?  
Answer 
China has the largest population in the world. Ch ina's food security is vital to both China and the 
world. When the international grain price rises, a temporary rise in price may improve the short-term 
income of farmers, however, it may also send a wrong signal to farmers and lead  to overproduction of 
relevant products, which would fina lly harm the interests of farmers. In other words, implementing 
export restrictions under certain necessary conditions c ould help maintain a stable market and a stable 
price and give a right signal to farmers to maintain a stable agricultural production. It benefits farmers 
in the long run. 
EUROPEAN UNION
 
ECONOMIC ENVIRONMENT  
WTO Secretariat's Report, page 3, para. 8 
The report notes the Government's attempts to boost domestic demand.  Question 1 Could China confirm whether it intends to raise the ratio consumption/GDP? What is its 
expected value in the upcoming years? Will the e ffects of the stimulus package contribute to an 
increase of the consumption/GDP ratio? 
Answer 
Domestic demand expansion is not only the fundament al point of China in handling the international 
financial crisis, but also a long-term strategic guideline for promoting sustainable and coordinated 
development of China's economy. At present, China is studying and drafting "the Twelfth Five-Year 
Plan", and indices related to economic growth an d economic structure are under calculation. We 
believe that the consumption would maintain a stable  and relatively fast growth in the future and its 
weight in GDP would increase steadily.  
Consumption expansion takes a key part in the stimulus package of China in response to the 
international financial crisis. The measures, apart from those programs to directly promote 
consumption, also include implementing a more active employment policy, adopting measures to 
increase the incomes of farmers and low-inco me groups in urban areas, and accelerating the 
improvement of urban and rural social security systems etc. They have achieved obvious effects. 
In 2009, China's GDP increased by 8.7%, in which 4. 6% was driven by final consumptions. Besides, 
the retail sales of consumer goods increased by 15. 5%. After deducting the price factor, the actual 
increase was 16.9%.   WT/TPR/M/230/Add.1 
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  WTO Secretariat's Report, page 3, para. 11 
Question 2 Could China indicate whether there are any estimat es on the impact of the stimulus packages on 
the overall value of non-perfor ming loans in the future? 
Answer To address the impact of international financia l crisis, the Chinese Government staged economic 
stimulus plans and implemented a moderately easy monetary policy. The sust ained and rapid growth 
of monetary credit has played a significant role in expanding demand, boosting confidence and promoting economic recovery. In general, direction of loans is in line with the need to promote 
economic restructuring. For instance, a large proportion of loans have been used to support 
infrastructure construction and consumption upgrad ing and urbanization. Meanwhile, China Banking 
Regulatory Commission (CBRC) has been following cl osely risks that may be brought about by 
sustained and rapid credit increase, especially the impact of non-performing loans. In this regard, 
CBRC has timely taken the following measures on the basis of pre-judgment of risks: firstly, 
reminding timely of the risks in key sectors prone to risks, such as sectors with excessive production 
capacity and real estate; secondly, conducting on-spot  inspection over the risks of newly issued loans 
since the beginning of 2009 to timely correct impr oper operations of banks; th irdly, taking prudential 
and counter-cyclical supervisory measures from m acro perspective by raising the requirements on 
bank capital adequacy ratio and requiring banks to increase provisioning coverage ratio to 150% by 
the end of 2009; fourthly, releasing a series of measures and guidelines strengthening administration on fixed assets loans, working capital loans, persona l loans and project financing etc. The aforesaid 
measures have been conducive to the sustainability  of finance in supporting economic growth as well 
as the sound functioning of financial system. Be sides, China's economy is still at a stage of 
urbanization and consumption structure upgrading and is  expected to maintain a relatively fast growth 
rate within quite long period of time in future. Th e risk control capacity of financial institutions has 
improved evidently after their reforms in previ ous years. Generally speaking, credit risks are 
controllable.  
Question 3 
Are there any estimates on the distribution of credits within the stimulus package between state 
owned and private companies? Which is the sha re of the private small and medium enterprises 
on this new bank lending within the stimulus package?  
Answer There is no division of credits within China' s bank lending between State owned and private 
companies, that is to say, the loans are grante d regardless of the nature  of the ownership of a 
company, any company meeting the requirements for loans can apply for and obtain loans. CBRC 
attaches much importance to financing for small en terprises, and has promoted series of mechanisms 
to improve small enterprise financing services, in cluding interest rate risk pricing mechanism, 
independent accounting mechanism, high efficiency  loan examination and approval mechanism, 
incentive and control mechanism, professional staf f training mechanism and default notification 
mechanism etc. 
By the end of 2009, domestic RMB and foreign curr ency loan balance of small and medium-sized 
enterprises (excluding note financing) was RMB 13 ,600 billion, accounting for 55% of the total 
domestic RMB and foreign currency loan balance. At the end of 2009, the loans granted to small and WT/TPR/M/230/Add.1 
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  medium-sized enterprises increased by 32% compared  with that of the beginning of the year, 
4.5 percentage points faster than the aver age growth rate of loans for enterprises. 
Question 4 
Could China share its statistics regarding the number of projects financed under the stimulus 
package that have been awarded to foreign companies? 
Answer 
Implementation of the economic stimulus package do es not distinguish the ownerships of enterprises. 
Enterprises of all different ownerships have be nefited from the economic stimulus package. For 
example, major participants of the home applian ces for rural residents program and home appliances 
trade-in program are non-SOEs including FIEs. Anot her example is infrastructure construction which 
takes a large share in the stimulus plan. While many  general contractors of these construction projects 
may be State-owned enterprises, most sub-contr actors will be non-SOEs, and many suppliers of 
equipments are FIEs and even foreign companies. Ther efore, it is very difficult to tell what percentage 
SOEs or non-SOEs account for in the stimulus plan . China does not have statistics in this respect. 
We note the series of measures that China has ad opted to improve the well-being of its people.  
Question 5 
In this respect, has China adopted any sector sp ecific adjustment measures to assist workers 
displaced by restructuring in the iron and steel industries? 
Answer 
To solve such problems as personnel relocation resulted from closure and elimination of outdated 
production capacity, the Chinese government will gi ve proper financial subsidy to support the 
settlement of relevant relocation problems such as  living assistance to and re-employment training of 
laid-off workers. However, such subsidy is not direct ed only at the steel industry, it is applicable also 
to other industries subject to elim ination of outdated production capacity. 
China's report, page 8, para. 24   
China indicates that "[i]n 2009, the Chinese central government provided 32 billion Yuan for 
implementation of a series of consumption stimulus programs including those for rural 
residents to purchase home appliances and mo tor vehicles and motorbikes, and others for 
people to trade-in old motor vehicl es and home appliances for new ones." 
Question 6 Could the Government of China clarify whether so me (and if yes, what sort of) criteria for 
energy-efficient consumption were included in th e eligibility rules for access to financing under 
the Chinese consumption stimulus programs? 
Answer 
1. Regarding energy cons umption efficiency standards of home appliances for rural residents, 
China applies a five-level energy efficiency system , in which Level 5 is the market access level and 
Level 1 is the most efficient level. The home a ppliances supplied to rural residents are decided  WT/TPR/M/230/Add.1 
 Page 67 
 
 
  through public bidding. Their energy-efficient level shall reach at least Level 3, and that of some 
products like refrigerators and tumble washi ng machines shall reach Level 2 or above.  
2. No special energy consumption efficiency requirement is set for the home appliances under 
the home appliances trade-in program. 
3. The new motor vehicles under the motor vehicles for rural residents program and the trade-in 
program shall meet the requirements of Standards on Limits of Fuel Consumption of Passenger Cars  
(GB1957-2004) and Standards on Limits of Fuel Consumption for Light-duty Commercial Vehicles  
(GB20997-2007). 
WTO Secretariat's Report, page 10, para. 34, China's report, page 13, para. 43 
Question 7 
Noting the Government's statement that 'Ref orm is China's basic state policy', could the 
Government of China kindly elaborate whether it intends to pursue any of the structural 
reforms that the WTO secretariat considers needed to deal with the problem of over-investment and overcapacity – in particular as regards reduc ing the role of the state in allocation of 
resources, liberalising and deregulating the domest ic market for capital and other inputs, and 
ensuring a level playing field between state-owned and private enterprises? 
Answer 
While reiterating that "Reform is China's basic st ate policy", China in its Policy Statement also 
summarized a series of reform measures adopted si nce the previous review, which included price 
system reform, state-owned enterprises reform, pr ivate economy development,  financial and capital 
market reform etc. These measures clearly indicated  the basic reform direction of China to further 
give play to the fundamental function of market mechanism.  
While noting that China shall continue to promote structural reform in its Report, WTO Secretariat 
has also recognized China's unremitting efforts devoted to  this respect. For example, in para. 29 of the 
Report, the Secretariat noted the latest progress of  China in capital market reform. However, the 
Secretariat was not correct in stating that small and medium-sized enterprises (SMEs) are not allowed 
to issue bonds in China. In fact, China started to look into this issu e in 2007. From then on, SMEs in 
China may join together to be a united issuer to  issue bond collectively. China will draw relevant 
experience to expand the financ ing channels of SMEs and promote further the reform and 
development of the capital market.   
II. T
RADE POLICY REGIME :  FRAMEWORK AND OBJECTIVES  
(2) I NSTITUTIONAL AND LEGAL FRAMEWORK  
(i) Transparency 
WTO Secretariat's report, page 12, para. 9  The EU welcomes China's continued efforts to im prove transparency and predictability of its 
regulatory environment, including its increased use for public calls for comments on a number 
of proposed legislative measures. However, as in  the last Review, the Secretariat's report notes 
that "some aspects of China's trade policy regime remain complex and opaque", thus leaving 
scope for administrative discretion.  In this co ntext, the EU would like to once again urge China 
to systematically call for public consultations on all new proposed laws and administrative 
measures that may have an effect on trade, a nd to provide a reasonable comment period to all 
stakeholders, whether foreign or domestic.  WT/TPR/M/230/Add.1 
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  Question 8 
What are China's specific plans to enhance transp arency in the context of public consultations 
procedures on draft laws in terms of both delays and public availability of comments?  
Answer 
The Law of the People's Republic of China on Legislation  promulgated in 2000 has made open 
legislation a basic principle for legisla tive activities in China. The law as well as Regulations on 
Procedures for Formulation of Administrative Regulations and Regulations on Procedures for 
Formulation of Departmental Rules clearly require Chinese legislative bodies to solicit public 
opinions by means of symposiums, workshops, publ ic hearings etc in the legislative process.  
In recent years, the Chinese Government has enhan ced further the transparency in its legislative 
works. Soliciting public opinions has become a common practice in drafting laws and regulations. A 
system for soliciting public opinions on draft regulati ons and rules is set up on the official website of 
the Legislative Affairs Office of the State Counc il. Special columns concerning public opinions 
solicitation may also be found in the official we bsites of many ministries and commissions. In 
April 2008 the Standing Committee of the National Pe ople's Congress made a decision that from then 
on all draft laws under review of the Standing Co mmittee of the National People's Congress would in 
principle be made public for comments and opinio ns. These efforts would continue to enhance the 
transparency in respect of public opinio n solicitation on the draft legislation.   
WTO Secretariat's report, page 12, para. 10  
According to the Secretariat's report, all foreign  trade-related laws, regulations and rules are 
published in the China Foreign Trade and Economic Gazette . However, the Report underlines 
that it is "not clear which regulations are not published or why".  
Question 9 Could China please explain what steps it has taken,  or is planning to take, in order to ensure 
that all government entities in charge of drafting legislation that may have a significant effect on 
trade are aware of the transparency obligatio ns enshrined in the relevant WTO Agreements 
and comply with them in a consistent manner?  
Answer 
First of all, China has fully honored its transpar ency obligations through enactment of a series of 
domestic legislation which involve legislative procedures, system arrangement for uniform 
application of trade regime, administrative recons iderations, administrative litigations, etc. They are 
uniformly enforced nationwide. Legislative agen cies concerning trade should also follow these 
requirements accordingly.  
Secondly, after China's accession into the WTO,  the Central Government has made special 
requirements to all government departments and agencies regarding the WTO transparency obligations, especially those concerning notification,  inquiry and trade policy review. Relevant work 
mechanisms have been establishe d, and extensive trainings on rele vant technical issues conducted. 
These have enabled government departments and agen cies to acquire a comprehensive knowledge of 
the WTO transparency obligations.  
Thirdly, Chinese government also conducts review of  existing laws, regulations and rules on a regular 
basis. The latest review  was just launched in early 2010. The regular review of existing legislation  WT/TPR/M/230/Add.1 
 Page 69 
 
 
  aims to ensuring the uniformity of the legal syst em which includes conformity to the WTO rules. 
These reviews also help government departments and agencies to acquire better understanding of the 
transparency obligation under relevant WTO agreements. 
Question 10 
When does China plan to establish a single official Journal containing all laws and regulations?  
Answer 
In accordance with China's accession commitments, the Chinese government designated China 
Foreign Economic and Trade Gazette  as the official journal to publish all laws, regulations and 
measures concerning trade in goods, trade in servic es, trade-related aspects of intellectual property 
rights, and foreign exchange control right after China's accession into the WTO. By 19 May 2010, 
586 volumes of China Foreign Economic and Trade Gazette  have been published covering several 
thousand laws, regulations, rules and other measures. The China Foreign Economic and Trade 
Gazette could be accessed through the official we bsite of the Ministry of Commerce at 
http://www.mofcom.gov.cn.  
Besides, laws, regulations and most rules promul gated by the Chinese government could be accessed 
through various websites, including but not limited to http://www.gov.cn and 
http://www.chinalaw.gov.cn.  
WTO Secretariat's report, page 14, para. 16  
Question 11 Could China please elaborate on the steps that it has taken, or is planning to take, in order to 
ensure greater coordination and consistenc y of approach between the various government 
ministries and agencies responsible for drafting a nd implementing legislation for a particular 
sector?  
Answer 
When a government department is responsible for drafting laws and administrative regulations, the 
responsible department is requested to discuss with and invite written comments from relevant 
departments if the laws and regulations concern their responsibilities and functions. If their opinions 
are significantly different on key issues, the Legislative Affairs Office of the State Council should coordinate.  
When the Legislative Affairs Office of the State C ouncil is responsible for drafting or reviewing laws 
and administrative regulations, it should invite wr itten comments from relevant departments and carry 
our coordination.  
The Legislative Affairs Office of the State Council a nd that of local government have a special task 
force for coordination to settle disputes and proble ms among different departments occurred in the 
implementation of laws  and regulations.  
In its Triennial Reviews of the TBT Agreement , the TBT Committee has stressed the positive 
contribution that good regulatory practice can make to the improved and effective 
implementation of the substantive obligations under the TBT Agreement.  WT/TPR/M/230/Add.1 
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  Could China please explain the steps it has taken,  or is planning to take, to introduce more 
systematic participation of interested parties in the regulatory process as well as tools to determine the need to regulate or to amend existing regulations and to assess possible 
alternative regulatory approaches such as Regulatory Impact Assessment?  
Answer Good regulatory practice is a part of the administ rative system reform promoted by the Chinese 
government, which is not limited to TBT and SPS  areas. In this respect, the Chinese government 
issued The Outline of Promoting the Implementation of Administration by Law in an All-Round Way 
in 2004 and staged a series of  measures to fulfil it. Regulations on Disclosure of  Government 
Information noted in the Secretariat Report, Chapter 2, para. 11 is an example of specific measures 
taken by the Chinese government.  
Other examples, besides the efforts in solicitation of public opinions in legislation process mentioned 
in the reply to Question 8, include exploration on est ablishment of a system for cost-effect analysis of 
legislations, especially economic legislations. Si nce 2006, the Chinese government has initiated post-
legislation assessment, with the basic content, standards, approaches and procedures of the post-
legislation assessment preliminarily specified. The Central Government has also provided guidance 
on the post-legislation assessment of a large number of local government rules. By far, the results of 
post-legislation assessment have become an important element for the enactment and amendment of relevant laws and admi nistrative regulations. 
(4) T
RADE POLICY OBJECTIVES  
WTO Secretariat's report, page 14, para. 18  
According to the Secretariat's report, China seems to be focused to develop its trade policy at 
the multilateral and bilateral/reg ional level. However, there is no reference to its future plans 
regarding unilateral liberalization.  
Question 12 Does China contemplate the possibility to further unilateral liberalization? 
Answer 
China would continue to offer special preferential ta riff treatment to the least developed countries and 
would further promote its opening-up to foreign direct investment through revision to the Catalogue 
for the Guidance of Indus tries for Foreign Investment  and the  Catalogue of Advantaged Industries for 
Foreign Investment in Mid-West China . 
(5) T
RADE AGREEMENTS AND ARRANGEMENTS  
WTO Secretariat's report, page 16, para. 27  
Regarding ACFTA, Chinese authorities indicate that since the tariff reduction began, there has 
been a boom in imports and exports between  China and ASEAN, and a narrowing trade 
imbalance.   WT/TPR/M/230/Add.1 
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  Question 13 
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 Since 1 January 2010, over 90% of the products imported by China from 10 member countries of 
ASEAN under ACFTA framework have realized duty-fr ee both in terms of import volume and tariff 
lines. At present, China has no plan to modify its  sensitive list and high-sensitive list of products. 
Question 14 
Could China elaborate on its assessment of the functioning of this Agreement? 
Answer 
Since the implementation of ACFTA Agreements  on Trade in Goods, Trade in Services and 
Investment, trade between the two parties has witnessed fast growth , leading to accelerated economic 
integration, enhanced mutual benefit for enterpri ses and peoples and an overall win-win situation.  
WTO Secretariat's report, page 17, para. 29 
Question 15 
Could China describe the main underlying fa ctors determining its current and future RTA 
policy? 
Answer 
While actively promoting the Doha Round negotiati ons, China is also steadily moving forward 
negotiations on free trade agreements and other regi onal trade arrangements. China takes RTAs as a 
means to further international trade liberalizati on. The main determining factor for China's RTA 
policy is whether the RTA would promote mutual benefits and common development of both China 
and the relevant countries. 
Question 16 
How does China guarantee that its RTAs comply with WTO rules, and in particular GATT 
1994 Art. XXIV?  
Answer 
The RTAs negotiated between China and its partners  focus on free trade areas arrangements. They are 
in compliance with WTO rules and particularly GATT 1994 Article 24, as in most of the free trade agreements concluded by far, both trade volume and tariff lines of duty-free products have reached 
over 90% of the totals. Only in very exceptional fr ee trade area agreements, the two parties commit to 
reach the 90% of duty-free products in terms of trad e volume and tariff lines stage by stage through a 
certain transitional period.  WT/TPR/M/230/Add.1 
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  Question 17 
Could China describe how environmental and social aspects are addressed in RTAs 
negotiations? For instance, how China is integrating, if at all, these aspects in its current FTA negotiations?  
Answer Environmental and social issues are key areas in th e work of the Chinese Government. However, in 
terms of trade policy, China believes that a prudentia l attitude shall be adopted to prevent these issues 
becoming hidden barriers to international trade.  Among the FTAs signed by China, only a couple of 
service trade commitments involve environmental services. Others are basically expression of the willingness of the partners concerned to have communication and cooperation in these aspects.  
WTO Secretariat's report, page 18, para. 32 Question 18 When does China intend to notify to WTO its Agreement on Trade in Services of China-
Pakistan FTA? 
Answer China is now in consultation with Pakistan a nd will notify it to the WTO as soon as possible.   
WTO Secretariat's report, page 20, para. 36  
The Report indicates that China is currently negotiating an FTA with Australia.  Question 19 In light of the several rounds of negotiations alrea dy held, could China spell out main objectives 
pursued under the FTA with Australia? When does it intend to resume negotiations? 
Answer 
Regarding the objectives of China-Australia FTA, le aders of the two countries have reached common 
understanding, i.e. to conclude a "comprehensive, high quality, balanced and mutually acceptable" 
agreement through "active, practical, balanced a nd mutually beneficial" negotiations. If the two 
countries can establish a free trade agreement, it would actively promote the regional and global 
liberalization of trade. 
By far, we have conducted 14 ro unds of negotiations since April 2005. We have conducted extensive 
and deep discussions in sectors like agriculture, i ndustry, services and investment and have achieved 
some progress. In the meantime, due to different national conditions and deve lopment stages, we have 
encountered some complicated and sensitive issu es during the negotiation which require the two 
parties to be cautious and prudent. The 15
th round of negotiation would be held in Beijing at the end 
of this June.   WT/TPR/M/230/Add.1 
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  (6) F OREIGN INVESTMENT  
WTO Secretariat's report, page 21, para. 48  The report notes that the main laws and regulatio ns specifically related to FDI remained largely 
unchanged during the review period. This statemen t is correct, however, we  would like to point 
to a significant change in 2010 to the regulation of Representation Offices of foreign companies 
in China. New rules were published by SAIC  (State Administration for Industry and 
Commerce) on 4 January 2010, effective from that  same day, restricting the activities of these 
offices and establishing tougher approval and in spection procedures and restricting the number 
of representatives to only four. This would result in a de facto reduction of the number of foreigners to a maximum of four. 
Question 20 
What is China's assessment of these measures?  Would China agree that this measure could 
result in a further restriction on the activities of foreign companies in China?  
Answer 
China welcomes and encourages foreign-funded en terprises to conduct activities in China in 
compliance with relevant laws and regulations. The change mentioned in the question would not 
affect or restrict the lawful operation of foreign -funded enterprises. However, it must be pointed out 
that China has regretfully found many law-breach ing operational activities by representative offices of 
foreign companies in recent years.  
The representative offices of foreign companies are br anches of foreign companies set up in China to 
conduct liaison work. Different from foreign-funded  enterprises established in China, representative 
offices are not legal persons and may not conduct profit-making activities, unless otherwise permitted. 
They may only involve in business liaisons rela ted to the foreign company. However, some 
representative offices obtained licenses by submitti ng false documents and engage in profit-making 
activities or even frauds in violation of Chinese laws and regulations. Some representative offices do 
not carry out activities at the regi stered address, which makes it im possible for authorities to check 
upon their activities. These law-breaching activities seri ously affected the interests of other law-
abiding representative offices, harmed the reputatio n of representative offices, and damaged the fair 
and just market order and honest operation environm ent. Therefore, Chinese government is obliged to 
adjust its administrative regulations over represen tative offices of foreign companies in China.  
The report also notes that there has been no change in the Catalogue for the Guidance of 
Foreign Investment Industries, which lists in vestment in industries that is encouraged, 
restricted, and prohibited, since December 2007.  
Furthermore, we would like to refer to the publication by the State Council on 14 April 2010 of 
Guofa (2010) Document No. 9 'Several Opinions of the State Council on Further Improving the Use of Foreign Capital', in which a revision of the Catalogue for the Guidance of Foreign 
Investment Industries is announced. 
Question 21 
Could China elaborate on the foreseen timefr ame for the revision of the catalogue?  WT/TPR/M/230/Add.1 
Page 74  
 
  Answer 
According to the Certain Opinions of the State Council on Further Improving the Use of Foreign 
Capital , revision of the Catalogue for the Guidance of Industries for Foreign Investment  has just 
begun, and specific work plan and timetable are still under discussion and to be decided.  
Question 22 
Could China indicate the sectors for which ch anges in the investment regime are being 
considered? In particular, will China take the o pportunity of the revision of the catalogue to 
enable foreign joint venture partners to have majority ownership inter alia  in the automobile, 
petrochemical, steel, chemical, and energy sector? Given the outstanding performance of the Chinese industry in these sectors, such stringent ownership regulations imposed with the aim to 
protect a preliminary stage of deve lopment seem no longer relevant. 
Answer 
In general, China would further ope n up sectors to foreign investment  through this revision taking into 
consideration of the economic development level and also the development needs. However, in 
respect of specific sectors, as the wo rk has just started, it is hard to tell at this stage because each 
sector has its unique situation.  
Although the report states that China has been gradually relaxing some FDI restrictions in 
"some" services sectors, we note that forei gn ownership restrictions actually remain in 
particular for telecommunications but also for financial services.  
Question 23 Could China indicate whether it intends to li ft these remaining restrictions? Would an increased 
level of openness and competition not promote the services industry and bring in the necessary 
expertise to develop the presently "underdevel oped capital market" (page 7, para. 27)?  
Answer 
As a developing country, China has been constantly  promoting the reform and opening up in the 
services sector, although the service s industry in China is still in th e early stage of development. 
China has fulfilled its opening up commitments of the services sectors made at the time of WTO 
accession. China is going to expand further the bread th and depth of opening up in the services sector, 
encourage foreign capital to invest in energy c onservation and environmental protection services, 
modern services such as industrial designing, outso urcing, logistics etc, and Chinese and foreign 
companies are also encouraged to  strengthen R&D cooperation. To build sound foreign investment 
environment, China will also continue to st reamline procedures concerning qualifications and 
licensing. 
The report notes that China adopted an amendment to the Catalogue of Priority Industries for 
Foreign Investment in the Central – Western Re gion, which entered into force in January 2009. 
Question 24 Could China specify the priority industries c overed by the Catalogue for Central – Western 
Region? Is the Catalogue for the Guidance of Fore ign Investment Industries superior above the 
Catalogue for Foreign Investment in the Cent ral – Western Region? Is it possible to have  WT/TPR/M/230/Add.1 
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  "restricted" sectors in the Catalo gue of Priority Industries fo r Foreign Investment in the 
Central – Western Region?   
Answer 
Please refer to http://www.ndrc.gov.cn/zcfb/zcfbl/ 2008ling/ t20081224_253113.htm for advantaged 
industries contained in the  Catalogue of Advantaged Industries for Foreign Investment in Mid-West 
China . This Catalogue has the same legal effect as the  Catalogue for the Gui dance of Industries for 
Foreign Investment . According to the Regulations for the Guidance of Foreign Investment (State 
Council Decree No. 346), all industries listed in the Catalogue of Advantaged Industries for Foreign 
Investment in Mid-West China  shall be regarded as the "encouraged " industries. This means that this 
Catalogue does not have "restricted" industries.  
Question 25  
Could China explain how it will ensure that opera tions of companies operating in China will not 
be harmed by the shifting of particular sector from group "encouraged" to groups "restricted" 
or "prohibited"? 
Answer Classification of the category of the business of a foreign-funded enterprise, as "encouraged", 
"restricted" or "prohibited", is decided according to the Catalogue for the Guidance of Industries for 
Foreign Investment  in effect when the enterprise sets up or alters its operational scope. Preferential 
policies it is entitled to are decided accordingly. Revisions to the  Catalogue for the Guidance of 
Industries for Foreign Investment will not affect the operationa l activities of foreign-funded 
enterprises already established.  
Question 26 Could China specify how will guide the local governments in this regard? Does the central 
government have any leverage on the local governments in this matter? 
Answer 
The Catalogue for the Guidance of Industries for Foreign Investment  and the Catalogue of 
Advantaged Industries for Foreign Investment in Mid-West China are reflection of China's foreign 
investment policy. Both Central Government and local governments shall examine and approve 
foreign investment projects according to the two Catalogues. No special guidance is given by the 
Central Government to local governments. Howe ver, when the Catalogues are revised, local 
governments may give their opinions and suggestions  according to their local development needs.  
WTO Secretariat's report, page 22, para. 51  
The report states that many provinces provide one- stop services to foreign investors. While it 
might be true that there are "one-stop services",  these only provide information and act as an 
enquiry point, and therefore, there is not one-stop  system in terms of actually helping investors 
with administrative formalities. 
Question 27 
Is China intending to expand its one-stop services network in order to provide real assistance to 
investors rather than just information? WT/TPR/M/230/Add.1 
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  Answer 
One-stop service is an administrative service model adopted by local governments to enhance 
administrative efficiency and facilitate business i nvestment according to local conditions. Their 
service approach and content may vary from place to  place as the model is being promoted step by 
step.  
At present, many cities like Tianjin, Shenzhen and Suzhou have established one-step service centers. 
They not only provide information, but also offe r substantive assistance to foreign investors.  
(7) F
OREIGN ASSISTANCE  
(ii) China's assistance to foreign countries 
WTO Secretariat's report, page 23, para. 54-56 and China's report, page 24, para. 117 
The EU would like to highlight the fact that th ere is only scant information contained in the 
Secretariat's report regarding the Aid for Trade init iative. We are also surprised to note that 
there is only one paragraph covering this issue in China's government report. We would like to 
underline Members' commitment under the WTO Aid for Trade Working Programme to use the TPRM as a useful tool to report on do nors and recipients' activities and objectives. 
Question 29 
Could China describe in detail how its Aid for Trade Strategy is articulated? 
Answer 
China's Aid for Trade is integrated in its overall foreign aid policy.  China focuses on helping the recipi ent countries to build infrastructures directly related to the 
enhancement of their trade capability like airp ort, sea port, road, bridge, power plant and 
telecommunication facilities. Besides, we also help  them build manufacturing projects with relevant 
technologies transferred and assist them to formulat e national economic and trade development plans. 
These would enhance their essential trade capac ity, improve products circulation and trade 
environment, promote trade diversification, and advance their sustainable trade development.  
China also helps the recipient countries to reduc e debt burden, expand ex port and improve trade 
administration capability through offering duty-free treatment to and cancelling debts of the least 
developed countries, conducting technical coope ration, and providing personnel training.  
Question 30 
Could China provide figures regarding the amo unts granted per Aid for Trade category and 
region? Is this aid conditional to the fu lfilment of any particular requirement?  
Answer China's foreign aid is a mutual aid between de veloping countries under the South-South Cooperation 
Framework. In providing the aid, China fully resp ects the wills of the recipient country and would 
never interfere with their internal affairs or a ttach any political conditions. The same principle is 
applied to China's activities related to Aid for Trade. As there is no agreed definition of what actually 
constitutes Aid for Trade, China has not distilled fi gures for Aid for Trade from its general statistics 
and therefore at present, China has no specific statistics for Aid for Trade.  WT/TPR/M/230/Add.1 
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  Question 31 
Is Aid for Trade programmed on a pluri-annual or  annual basis? Does China plan to increase 
the amounts currently granted in the upcoming years?  
Answer 
At present, China's Aid for Trade is included in the aid plan of specific countries, including both 
annual plans and multi-year plans. Along with Ch ina's economic development, China will gradually 
expand its foreign aid scale within its capacity.  
Question 32 
Could China explain in detail how it ensures ownership and participation of developing 
countries on Aid for Trade programmes?  
Answer 
The aid projects of China are decided by the two parties through friendly consultations based on the 
needs of the recipient country. Both parties are involved in the full cycle of the project from implementation, supervision, and evaluation and acceptance. This ensures the ownership and direct 
participation of the recipient country.  
Question 33 Is China assisting developing countries to integr ate trade-related issues into poverty reduction 
strategies, and if so, could China provide some  examples? How does China integrate the private 
sector and civil-society stakeholders in this process? Some illustrative examples of their 
participation would be useful. 
Answer China's foreign aid program always combines trad e-related issues with pove rty reduction strategies. 
The aid project to the Laos on trade, investment and international cooperati on development plan for 
its north region served as a good ex ample. In 2007, to accelerate the economic and trade development 
of the north region in the Laos, China undertook th e overall development planning project of the north 
region of the Laos under the grant aid program , which included Trade and Investment and 
International Cooperation Developmen t Plan. The project provided references for the decision-making 
of the government of the Laos in promoting foreign trade and international cooperation. This project 
has been completed and handed over to the Laos. In the whole process of the project including project 
establishment, assessment and implementation, Chin a had extensive communications with relevant 
departments and interested parties of the Laos a nd ensured their full participation in the project. 
Question 34 
How does China promote institutional and financial sustainability in Aid for Trade 
programmes? Some examples would be useful.  
Answer 
Every year, China makes aid plans by countries, which include schedules and budgets, to ensure the 
projects are carried out according to the plan. Ac cording to the actual demands of the recipient 
countries, China consults with these countries to jo intly decide upon projects within China's capacity WT/TPR/M/230/Add.1 
Page 78  
 
  to support which may be of Aid for Trade nature. China integrates aid programs of immediate effect 
on trade capacity, such as tariff exemption, techni cal cooperation and training, with long-term aid 
programs like infrastructure construction and manufact uring project construction in order to ensure 
the sustainability of the effect of these projects. 
Question 35 
How does China integrate social and environmental sustainability in Aid for Trade? With 
regard to environmental sustainability, does Chin a support developing countries' partners to 
develop sustainable production methods? With re gard to social aspects, how does China ensure 
the promotion of decent work and the developm ent of effective labour market and social 
adjustment mechanism? Please provide some examples. 
Answer 
In implementing aid projects, China takes into fu ll consideration of the so cial and environmental 
sustainability of the projects. Take the Complex Sucr ier d'Anie project of Togo for an example, the 
project provides 600 to 1600 employment opportuniti es to local people every year. D'ANIE, where 
the project is located, has developed from a small v illage with several hundred residents to a big town 
accommodating tens of thousand people. This project was regarded an exemplary project of economic 
and technical cooperation between China and Togo.  
Question 36 
Could China confirm whether it uses the Enhanc ed Integrated Framewor k analysis (DTIS) in 
LDCs when programming and delivering Aid for Trade, and if so, provide examples? 
Answer China did not use the Enhanced Integrated Framew ork analysis in programming and delivering aid to 
LDCs.  
Question 37 
Is China coordinating with other donors with a view to supporting regional and trade 
integration and therefore ensure aid effectiveness in regional Aid for Trade? Does China 
cooperate with regional organisations, and if so, how? 
Answer 
In recent years, China has strengthened communica tion and exchange with relevant international 
organizations and other donors and st rengthened cooperation with rele vant international and regional 
organizations. For example, in May 2010, China an d the UN Office of the High Representative for the 
Least Developed Countries, Landlocked Developi ng Countries and Small Island Developing States 
(UN-OHRLLS) jointly sponsored the Workshop on Trade Facilitation for African Countries.  
Question 38 
Does China assess the progress and effectiveness of the implementation of Aid for Trade? What 
are the reporting methods used? Does any public report on Aid for Trade by China contain this assessment?  WT/TPR/M/230/Add.1 
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  Answer 
Chinese government attaches importance to the assessm ent of the implementation and effectiveness of 
various aid programs including those related with Aid for Trade. For example, in a construction 
project, China will send experts to guide and supe rvise project implementation together with the 
representatives of the recipient country; China will also send quality control team to conduct interim 
quality inspection of the project; after the project  is completed, China will check and accept the 
project together with the recipient country; afte rwards, China will conduct follow-up assessment of 
the effectiveness of the project; wh en necessary, China will send expert s to provide instructions and 
training for the recipient country in project mana gement, operation and maintenance to ensure the 
smooth and effective operation of the project. At presen t, the details of the type of assessment are not 
yet contained in the public report on aid projects by China.  
China's report, page 19, para. 74; page 24, para. 119 and 120; WTO Secretariat's report, 
page 20, para. 44; page 31, para. 23 
In its report, China notes that it will "conti nue to grant duty-free treatment to products 
exported to China from LDCs. It will also exem pt LDCs and heavily indebted poor countries 
interest-free loans due. The phased implementation plan will start in 2010 for duty-free 
treatment covering up to 95% products of these countries".  
Question 39 Could China clarify share the intended phase- in schedule for the period up to 2015?  
Answer 
China plans to implement duty-free treatment for LD Cs with diplomatic relations with China in 
respect of 60% of China's total tariff lines by the e nd of 2010, and will expand the treatment to cover 
95% of China's total tariff lines in the next few years.  
Question 40 
With regard to the figure of 95% coverage  (as noted above, please confirm the exact 
timeframe), could China confirm whether it refers to 95% coverage in terms of trade volumes 
(using national tariff lines) or tariff lines, and whether tariff lines are fixed once they are 
decided? 
Answer 
95% refers to the percentage of total tariff lin es. At present, we have no adjustment plans.  
In 2008, China has become the la rgest export market for LDCs 
(WT/COMTD/LDC/W/43/Rev.1). However, accord ing to the same report more than 90% of 
China's imports from LDCs concern oil and mineral products, while only 0.2% of the 
agricultural imports enter the Chinese market duty free.  
Question 41 In this respect, could the Government of China indicate whether it intends to include 
agricultural and textile products under the duty-free  scheme? Could China give an indication of 
which products will be exempt from the duty f ree treatment (and thus constitute the remaining 
5% that would remain dutiable)? WT/TPR/M/230/Add.1 
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  Answer 
China has included most agricultural and textile produc ts that are of export interests to LDCs into the 
95% duty-free tariff lines list, such as sesame and co ffee etc. Only those products whose tariffs could 
not be reduced individually according to China' s Accession Schedule and a few agricultural and 
industrial products have not been included in the zero tariff treatment.  
Question 42 More generally on DFQF, why does the Government  of China not consider itself a developing 
country "in a position to do so" (i.e. to grant LDCs 97% of DFQF treatm ent as stipulated in 
Annex F of the Hong Kong Declaration)? 
Answer According to Annex F of the Hong Kong Minist erial Declaration, only developed countries 
committed to grant DFQF to LDCs for 97% of th eir products. The annex did not set mandatory 
requirement for developing countries. Therefore, the 97% DFDQ is for developed countries like EU 
not developing countries like China. 
As a developing country, China has already b ecome the largest importer of LDCs' products. 
Commensurate with its economic development leve l and capacity, China has committed to grant duty-
free treatment for 95% of all the tariff lines in the ne xt few years to LDCs with diplomatic relations 
with China. This has covered most pr oducts imported by China from them.  
Question 43 
Could China indicate how many and on which tariff lines LDCs currently enjoy full DFQF?  
Answer According to statistics in 2008, China has grante d duty-free treatment to LDCs in respect of 
1,150 tariff lines, covering agricultural products, aq uatic products, minerals, textile products, plastic 
products, and metal products etc.  
Question 44 
Is this treatment similar for all 41 LDCs that h ave diplomatic relations with China or are there 
differences - in coverage and tariff reduction- fo r African LDCs compared to Asian LDCs for 
instance? If the treatment is different, could China indicate the determining factors when 
deciding which treatment will be available for which country? 
Answer 
China will grant duty-free treatment for 95% of all China's tariff lines to all LDCs having diplomatic 
relations with China. The product covera ge is the same for all these LDCs.  
Question 45 Notwithstanding its "Anything But Arms" schem e, the EU is currently assessing its GSP 
scheme and consulting all stakeholders in this ex ercise. Could China inform if any stakeholders 
consultations is taking place in  order to assess the current and fu ture coverage of the unilateral 
preference scheme of China?   WT/TPR/M/230/Add.1 
 Page 81 
 
 
  Answer 
In consultation with relevant LD Cs, China would first put those most concerned products of LDCs 
into the initial 60% duty-free tariff lines list.  
Question 46 
Could China provide figures concerning the import value from LDCs, broken down by 
agricultural, manufacturing and commodity pro ducts, and indicate what percentage of these 
imports currently fall under DFQF treatment? 
Answer 
In view of the limited time for China to respond to all the questions, we are unable to finish the 
procedures and technical work to acquire these fi gures. However, since our trade statistics are 
provided to the WTO annually, we suggest EU to acquire the figures from that channel.  
III. T RADE POLICIES AND PRACTICES BY MEASURE  
(2) M EASURES DIRECTLY AFFECTING IMPORTS  
(ii) Tariffs 
WTO Secretariat's Report, page 26, para. 17; page 32, para. 26; page 14, para. 18 
Comment to the WTO Secretariat  
The report states that "China provides at least MFN treatment for all WTO Members except El 
Salvador and some territories of the EU Member St ates". In page 32, paragraph 26, footnote 15, 
the Secretariat lists a number of territories where China applies general rates. EU would like to ask the Secretariat to correct the related informat ion about EU territories, as it is not correct. 
Please refer to EU's customs territory informatio n, publicly available at: http://ec.europa.eu/ 
taxation_customs/ common/glossary/customs/index_en.htm#c 
WTO Secretariat's Report, page 32, para. 25  
Question 47 Could China explain in detail how it manages ta riff-quota administration for its agricultural 
bound quotas? What is the average fill-in  rate of these bound agricultural quotas? 
Answer 
Please refer to the following notifications of China to the WTO for China's tariff rate quota 
administration and the fill-in rates: G/AG/N/CHN/3, G/AG/N/CHN/5, G/AG/N/CHN/7&7C1, G/AG/N/CHN/9, G/AG/N/CHN/11, G/AG/N/CHN/14 an d G/AG/N/CHN/16. Besides, EU may also 
refer to G/MA/W/39, G/MA/W/52, G/MA/W/64, G/MA/W/74, G/MA/W/83, G/MA/W/92 and G/MA/W/99.  
(iv) Import prohibitions and licensing  WTO Secretariat's Report, p. 33, para. 31  The report notes that China maintains import prohibitions on grounds of public interest, 
environmental protection, or in acco rdance with international commitments. WT/TPR/M/230/Add.1 
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  Question 48 
Could China indicate whether it intends to remove some of these import restrictions in the near 
future? 
Answer 
At present, China has no plan to modify the list of  prohibited products for import under general trade.  
WTO Secretariat's Report, p. 34, para. 33   China maintains import licensing on certain iron a nd steel imports.  China is by far the largest 
importer of iron ore and we are concerned that China has used increasingly restrictive iron ore 
licensing to control imports and direct iron ore to specific steelmaking enterprises.   
Question 49 
What are the criteria for obtaining iron and steel licenses?  What is the purpose of licensing for 
imports of iron ore?   
Answer 
The materials required for application for iron or e automatic import license are prescribed in the 
Measures for the Administration of Automatic Import License of Goods , which is available at 
http://www.mofcom.gov.cn/ aarticle/b/e/200501/  20050100327887.html. The automatic import 
licensing system of iron ore is adopted for statis tic and monitoring purposes. There are no quantity or 
price restrictions.  
Question 50 
What is the fee structure associated with obtaining licenses?  What is the role of CISA and 
CCCMC in administering export and import licensing programs for iron and steel?  
Answer 
No fee is charged in the application for iron ore au tomatic import license except for the certificate cost 
itself. Regarding the iron ore automatic import licensing system, Ministry of Commerce is the issuer according to the Measures for the Administration of Automatic Import License of Goods . 
The Chinese government notes that Chinese steel ente rprises have reached certain consensus on the 
issue of iron ore import, and have adopted industr y self-discipline measures. These actions reflect the 
will of the industry, and members may obtain releva nt information from the website of China Iron and 
Steel Association at http://www.chinaisa.org.cn. 
WTO Secretariat's Report, p. 34, para. 35; p. 72, para. 18 
Question 51 As regards the automatic import licensing syst em for certain agricultural products, which was 
further expanded in 2010, could the Government of China please explain the necessity of this 
system, and provide an explanation why regular  trade statistics would not be sufficient for 
monitoring purposes?  WT/TPR/M/230/Add.1 
 Page 83 
 
 
  Answer 
Automatic import licensing is an import administ rative measure permitted by the WTO and adopted 
by many countries. In the case of China, it is for import monitoring and statistics purpose. China's 
automatic import licensing system only covers a sm all portion of the commodities that have major 
impact on domestic industries and people's liveli hood. Since the results obtained through automatic 
import license are relatively more accurate and ti mely, it is necessary for China to maintain this 
practice.   
(v) State trading  
WTO Secretariat's Report, page 34, para. 36 According to the Secretariat's report, China last  notified the list of STEs to the WTO in 
July 2003 (G/STR/N/9/CHN/Add.1). Since then, the number of products subject to state trading 
has regularly been modified. 
Question 52 Could China indicate when it plans to update and complete its notification obligations 
regarding STEs?  
Question 53 
Could China explain the criteria followed to adjust the list of goods subject to state trading? Question 54 Could China elaborate on the economic and commer cial rationale for maintaining state trading 
enterprises? 
Answer (for questions 52-54) China will submit 2004-2008 State Trade notification in  about a month after this review. Members 
may refer to the notification for details.  
(vii) Standards and other technical requirements 
(a) Standards and technical regulations 
WTO Secretariat's Report, page 35, para. 43 
As stated on several occasions in the past, th e EU remains concerned by the practice whereby 
voluntary industrial standards are later made ma ndatory, typically by referencing them in 
mandatory conformity assessment procedure. During the last TPR, China provided assurances 
that in such cases, the mandatory standard is notified to the WTO as a technical regulation. 
However, according to the EU's assessment, this is not a system atic occurrence. In many cases, 
voluntary standards become mandatory thro ugh referencing in mandatory conformity 
assessment procedures, without any prior wa rning to economic operators, and without 
notification to the WTO TBT Committee. 
One example would be the standard on a Unified Charger for Mobile Telecommunications 
Terminal Equipment  (YD/T 1491-2006), developed initia lly as a "Voluntary Industrial 
Standard" but later rendered mandatory on a ll mobile phones and chargers manufactured in WT/TPR/M/230/Add.1 
Page 84  
 
  China. Another example is the voluntary tyre standards GB/T2977-2008 and GB/T2978-2008 
that were adopted in 2008, and will become ma ndatory as soon as the announced mandatory 
conformity assessment procedures are adopte d (expected in the next few months). 
Question 55 Could China please explain, in detail, the steps it has taken, or is planning to take, in order to 
improve compliance in this regard with its tr ansparency obligations under the TBT Agreement 
concerning the preparation, adoption and applic ation of technical regulations or conformity 
assessment procedures? 
Answer 
Firstly, technical regulations and conformity asse ssment procedures of China are all published on the 
gazettes and official websites of competent author ities; secondly, since entering the WTO, China has 
made more than 740 TBT notifications; thirdly, China's TBT Enquiry Point has answered over 2000 
pieces of enquiries. China will continue to fulfil its due obligations in line with the WTO TBT 
Agreement.  
Question 56 
Could China clarify to what extent the Code of  Good Practice in Annex 3 to the TBT Agreement 
is observed by the organisations deve loping voluntary industrial standards? 
Answer 
After China's accession to WTO, Standardizati on Administration of China (SAC) notified its 
acceptance of Code of Good Practice in Annex 3 to the TBT Agreement (G/TBT/CS/N/143). SAC 
adopted Administrative Rules for National Standardization Technical Committees to ensure the 
fairness in the standardization work in each pr ofessional technical area. The voluntary standards 
developing bodies follow the Rules for National Standardization Technical Committees in their work 
and thereby observe the Code of Good Practice in Annex 3 to the TBT Agreement.  
WTO Secretariat's Report, page 36, para. 46  
Question 57  
Could China please confirm the conditions under wh ich, according to current rules applicable 
to technical committees responsible for the promul gation of national standards as last amended 
by SAC in January 2009 and related implemen tation practices, foreign-owned companies 
established in China can participate in the activities of such technical committees and what their status (voting member or non-voting observer) is?  
Answer In January 2009, the Standardization Administration of China issued the Administrative Rules for 
National Standardization Technical Committees , regulating the participation of foreign invested 
businesses in the work of the technical committee. The Standardization Administration of China has 
always attached importance to the participa tion of foreign invested businesses in national 
standardization activities and has expressed the position on many occasions that foreign invested 
enterprises are welcome to participate in China's national standardization activities. In practice, 
following principles are followed.   WT/TPR/M/230/Add.1 
 Page 85 
 
 
   1. All types of foreign invested enterprise s which are lawfully registered in China are 
entitled to participate in China's nationa l standardization activities, including 
standardization seminars, forums, press conferences and etc. They may also participate in development and revision of recommendatory national standards in 
various ways.  
 2. Foreign invested enterprises can partic ipate in the development and revision of 
recommendatory national standards as observers and provide comments.  
 3. The specific areas and time as to forei gn invested enterprises' participation in 
development and revision of recommendator y national standards should be in line 
with the areas and time the Chinese governme nt has committed to open up while 
entering the WTO. 
 4. The specific areas as to foreign invested enterprises' participation shall be decided by 
professional standardization technical co mmittees and the relevant departments. 
 5. In light of the foregoing principles and the actual situation of their own industry, 
professional standardization technical committees at sectors, industries and national 
levels are responsible for administration of foreign invested enterprises' participation 
in the development and revision of na tional standards of a specific area. 
As regards industry standards, the EU observes th at there is no consistent practice and foreign-
owned companies established in China, may only at times become observers in the relevant technical committees. When fo reign-owned companies are not admitted as observers, they are 
clearly placed at a competitive disadvantage vis-à-vis  their Chinese competitors. The EU 
encourages China to ensure effectiv e access of all companies established in China in its domestic 
standardization work, regardless of nationality of the owners.  
Question 58 In this regard, could China please provide an upda te on further progress in this area, also as 
regards access for foreign-owned companies to development of ot her types of standards (e.g. 
industry standards) applicable in China? Could also China please confirm at what stage in the 
development of national and other types of standards can foreign-owned companies submit 
comments according to current law and practice? 
Answer Statistics show that, so far, foreign invested enterprises have been members in over 15% national 
professional standardization technical committees and ha ve played a significant role in the work of 
these committees. This demonstrates that foreign invest ed enterprises have effectively participated in 
China's national standardization activities. They can submit comments and suggestions at various 
stages such as the launch of new national standard s projects, the public opinion soliciting of national 
standards drafts and other stages of th e formulation of national standards. 
In 2007, 46.5% of national standards were equival ent to international standards. The EU notes 
that this percentage is almost unchanged since the last TPR. Nevertheless, according to the 2008 
Secretariat Report (WT/TPR/S/199/Rev. 1, p. 63, para. 67), China's aim was to align as much as 85% of its standards to international ones by 2010.  WT/TPR/M/230/Add.1 
Page 86  
 
  Question 59 
Could China please provide an update with regar d to its progress in aligning its domestic 
standards to international ones, and the fields in  which such alignment is foreseen in the near 
future?  
Answer By the end of 2009, 68% of our national standard s in relevant areas are international or overseas 
advanced standards. 
It has been a longstanding and important technical policy of China to adopt international standards. 
Given the gap between domestic standards and inte rnational and overseas advanced standards, China 
will strive to revise those domestic standards to a lign them with international and overseas advanced 
ones. In the next five years, the proportion of in ternational and overseas advanced standards adopted 
will be significantly enhanced. 
The EU acknowledges China's commitment with regard to the alignment of its domestic 
standards to international ones.  However, the EU notes that, on several occasions in the recent 
past, China has decided to put in place Chinese-specific domestic standards, even in those 
sectors in which relevant international standard s were readily available, without providing 
sufficient justification as to why the internatio nal standard had been considered ineffective or 
inappropriate for the legitimate objective pursu ed (one example would be the WAPI standard 
for wireless network connection). In other cases, Chinese standards, while based on 
international standards, nevertheless differ fr om them in certain aspects, thus making it 
difficult for economic opera tors to comply with.  
Question 60 
Could China explain its decision to mandate Chin ese-specific domestic standards in such cases, 
and how such deviations from the relevant international standard are compatible with China's own policies to continuously align its dom estic standards to international ones?  
Answer China never intentionally pursues its  unique national standard. On the contrary, China is always active 
in adopting international standards and has participated in international standardization activities in 
ISO, IEC and ITU.  
Regarding WAPI, the initial safety standard WEP adopted by ISO and IEC8802-11 has evident safety 
defects. Industries in various countries including China therefore tried to develop a new safety standard. In 2003, China issued WAPI national standard. In July 2004, it was submitted as an 
international standard proposal to ISO/IEC which is  responsible for this sta ndardization program. This 
standard improved safety for the technical defects of the international standard ISO/IEC8802.11. Two 
months later, UK also submitted its IEEE802.11i intern ational standard proposal to ISO/IEC, which is 
a competitor of China's WAPI standard. On 29 Ja nuary 2010, ISO/IEC approved the establishment of 
the project for WAPI to be international standard.  
It is China's consistent policy to take internati onal standard as the basis of technical regulation and 
actively participate in international standardizati on activities. China is willing to work with other 
countries to ensure an open, transparent and fair in ternational standard formul ation procedure and also 
the broad participation of developing countries.   WT/TPR/M/230/Add.1 
 Page 87 
 
 
  (b) Sanitary and phytosanitary measures (SPS) 
WTO Secretariat's Report, page 37, para. 49  The Secretariat's report indicates that China has put into force the new Food Safety Law, which 
entered into force on 1 June 2009. The EU congra tulates China for its initiative to create new 
framework legislation on food safety in order to assure high level of health protection. However, 
the EU has already expressed its disappointment th at China did not notify this new legislation 
before its implementation.  
Question 61 Could China explain how it will in the future guarantee a reasonable time-period between the 
publication of a SPS regulation and its entry into force in order to allow the trading partners to 
comment and to adapt to the Chinese requirements? 
Question 62 Could China elaborate on how it fulfils the tr ansparency requirements laid down in the SPS 
Agreement in this respect? 
Answer (questions 61 and 62) Since the entry into the WTO, Ch ina has been seriously fulfilling the transparency obligations under 
SPS Agreement, notified a total of 304 SPS measur es, and provided opportunities for members to 
propose their comments during the comment period. At the same time, these comments were given 
serious consideration by China. 
The Food Safety Law  is based on the previous Food Hygiene Law  and there is no technical 
requirement that will have a major impact on intern ational trade, therefore, China had not submitted a 
notification before the Law was passed. However, after the Food Safety Law  entered into force, China 
timely submitted notifications on th e 178 relevant food safety rules and standards based on the Law 
and provided time for comments by the members. 
WTO Secretariat's Report, page 38, para. 54  
The report notes that China participates in international organizations related to SPS; it is a 
member of the World Organization for Animal Health (OIE), the Codex Alimentarius 
Commission and the International Plant Protection Convention. The EU welcomes that China is 
a Member of these organisations. However, th e EU is aware of many examples where China 
does not follow the international standards a nd recommendations set by these organisations. We 
would like to refer to four illustrative examples: 
With reference to China's animal health policy, the EU is concerned about the Chinese 
interpretation of OIE guidelines on BSE.  Th e World Organisation for Animal Health Code 
provides for conditions under which beef and other bovine products can be safely traded from 
all countries. Most EU countries have now been  classified by the OIE as countries with 
"negligible risk" or "controlled risk".   WT/TPR/M/230/Add.1 
Page 88  
 
  Question 63 
When would China allow the imports of beef a nd other products from EU Member states, in 
line with the OIE of which China is a Member or alternatively justify, by scientific reasons, the 
restrictions on the products that under the OIE list can be safely traded? 
Answer China is a country free of BSE, and therefore has ta ken serious, scientific and prudent policies in the 
prevention and control of BSE. China attaches much  importance to the issue of EU beef export to 
China, and has noted the results EU has made in controlling the BSE. China would like to make active 
cooperation and exchanges with the Member State co ncerned in the spirit of scientific, pragmatic and 
friendly cooperation on the premise of safety. Chin a would seek solution to the problem based on full 
knowledge of EU beef safety measures and also BSE prevention and control systems. 
China has recently imposed additional trade requirem ents on pigs and pig products in the form 
of additional certification. For instance, this is requested for live pigs exported to China 
originating from farms within a 50 km radius of the disease free zones of H1N1. These requirements are not in line with the stat ements and recommendations made by the 
international bodies.  
Question 64 In this regard, could China indicate when it intends to revise its impo rt rules to align its 
requirements with the internatio nal standard setting bodies? 
Answer 
In view of the international spread situation of  the new A/H1N1 flu in animals (by April 2010, 
98 cases of new A/H1N1 flu occurred in at least 23 countries/regions, affecting 5 species of animals), 
to guarantee and facilitate the healthy development of the import trade of live pigs from relevant 
countries, China, according to relevant Chin ese laws and regulations, proposed to add two 
requirements in the original agreements with count ries concerned. Firstly, there is no occurrence of 
A/H1N1 flu in the farms of animals for export and their nearby areas; secondly, A/H1N1 flu test is 
carried out. After agreeing to the requirements and submitting health certificates for confirmation by 
China, countries and regions concerned could carry out live pig trade.  
In the principle of being scientific and trade-f acilitating, China will pay close attention to the 
development of the disease and adjust relevant po licies appropriately to protect the production safety 
of animal husbandry and the people's health. At the same time, China also hopes to strengthen 
cooperation in this field with relevant countries and regions to cope with the challenges of the 
A/H1N1 flu.  
China recently notified its Sanitary Certificate Requirements for Milk and Milk products. The 
EU already expressed concerns about the animal health requirements which were partly not in 
line with the recommendation in the OIE Terrest rial Animal Health Code. These requirements 
are disproportionate for certain diseases and the EU reminded China that, where there are 
recommendations from the OIE or the Codex A limentarius Commission, those international 
standards should be applied.   WT/TPR/M/230/Add.1 
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  Question 65 
When will China review the requirements for milk and milk products in order to take into 
account the international recommendations? 
Answer 
China's quarantine requirement for countries/region s exporting milk products to China is uniform 
requirement for all milk products exported to Chin a. It is not specific to individual countries or 
regions. At the same time, China's requirement is made according to risk assessment conclusions by 
experts, and has scientific evidences. From 2006 on when China raised relevant requirements, EU 
member countries including Germany, France, UK, Greece, Poland, Spain, Ireland, Denmark and 
Belgium have submitted milk product health certificat es in line with China's requirements. Currently, 
more than 25 countries have submitted health  certificates meeting China's requirements.   
China is willing to study and discuss technical issu es to facilitate the communications and exchanges 
between experts of both sides. Currently, milk pr oduct certificates of most EU member countries have 
met China's requirements, and trade is going on well. China hopes members can support and maintain 
the healthy development of bilateral trade of milk products. 
EU considers that compliance with the Chinese pl ant regulatory import system is unjustifiably 
difficult due to the fact that many of the im port requirements go beyond the International Plant 
Protection Convention (IPPC) recommendati ons. As an example, China requires the 
phytosanitary certification for products, whic h are not generally considered necessary.  
Question 66 Could China confirm whether information on import requirements for plants and plant 
products (plant quarantine legislation) as well as a list of quarantine pests will be made 
available on the IPPC webpage? 
Answer 
According principles of the WTO SPS Agreement and International Plant Protection Convention 
(IPPC), in order to prevent the entry of pests, import countries can take corresponding prevention and 
control measures against pest risks of imported pl ants and plant products. China's requirement for 
export parties to issue plant quarantine certificates fo r certain plants and plant products is in line with 
international practices and IPPC requirements. For products proven not to carry pests, China will 
consider to cancel the requirement for plant qua rantine certificate according to ISPM No. 32.  
Currently, China's rules and requirements on import pl ants and plant products as well as information 
about plant quarantine pests can be acquired at th e AQSIQ official website. The information is 
publicly available.  
EU would like to underline the slow progress of negotiations of SPS protocols and inspection 
procedures, which result in excessive delays and eventually hinder trade on some products, such 
as meat and fruit and vegetables.   
Question 67 
Could China explain how it intends to accelera te bilateral SPS negotiations with individual 
Members in order to avoid undue procedural de lays, and pursuant to Annex C of the SPS 
Agreement? WT/TPR/M/230/Add.1 
Page 90  
 
  Answer 
China attaches great importance to the safety of meat, fruits and vegetables exported to China. 
According to WTO SPS Agreement, China carries out  risk assessment on meat, fruits, and vegetables 
imported to China, and also take necessary s ite inspections. The progress of negotiation on SPS 
agreements between China and EU depends on the degree of attenti on and cooperation of EU member 
countries, especially on whether they can offer comp lete, accurate and timely  information which is 
essential for risk assessment and site inspections.  
China is willing to further discuss these techni cal issues through China- EU Joint Committee of 
Consumer Goods and Food Safety, as well as thro ugh the bilateral coopera tion mechanism between 
relevant members and China. 
(c) Certification and accreditation  WTO Secretariat's Report, page 38, para. 55-56  The EU has on many occasions in the past rai sed concerns with regard to China's Compulsory 
Certification Scheme. While circular 117/2009 published by AQSIQ provided some useful 
clarifications, the CCC nevertheless remains a major obstacle for foreign companies exporting 
to China due to the complexity, costs and length of the procedure. In particular, the EU notes 
that, according to the Secretariat Report , the 2009 CCC Catalogue comprised 23 product 
groups and 172 subcategories (as compared to 22 product groups and 159 subcategories at the 
time of the last TPR, and 19 product groups and 132 subcategories in 2003, when the CCC was implemented).  
Question 68 
Could China outline the steps taken so far to reduce the administrative burdens linked to the 
CCC procedure? Is China considering undertakin g a substantive review of the CCC scheme, 
with the aim to simplify its structure and adopt a more risk-based approach? If so, could China provide an outline of the expected timeline for such a revision?  
Answer In order to simplify the CCC application proce dures for enterprises, China has adopted following 
measures: online application; acceptance of CB certif icate and testing report issued by IECEE-EB 
members and authorization of local certification agencies in most cases to do follow-up inspections 
after China's certification of foreign manufactures; lowering certification fees and avoiding repeated 
certificating and charges for such equipment in  which spare parts and components are already 
certified; classifying key components to facilitate enterprises' application fo r record of changes. 
At present, the Chinese CCC certif ication procedure is one of inte rnationally recognized certification 
procedures, and is also one of certification pro cedures widely used in IECEE- CB system. If EU 
thinks there are some problems with the proce dures, please submit specific cases and suggestions. 
Question 69 
Has China considered introducing some flexib ility in the CCC scheme reflecting the very 
different degrees of risk posed by the categories of products currently within its scope? For 
instance, has China considered narrowing the scope  of the CCC scheme – for instance, in order 
to allow for alternative, less trade-restric tive approaches for low-risk products?   WT/TPR/M/230/Add.1 
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  Answer 
China has indicated for several times that we will be glad if EU could provide cases for risk 
assessment so that China can study methods for risk  assessment. We will also be happy if EU will 
send experts of risk assessment to carry out joint study on this issue together with Chinese experts.  
At the time of the last TPR, China indicated that conditions were not yet mature for adopting a 
system of Supplier's Declaration of Conformity (SDoC).  
Question 70 Could China provide an update with regard to its reflection process on this issue, and/ or its 
preparations to introduce the possibility for SDoC  as an alternative to compulsory third party 
certification?  
Answer 
At the current stage of economic and social developm ent, it is still not proper for China to establish 
the mechanism of "Supplier's Declaration of Confor mity". However, China is carrying out relevant 
research. 
During its Accession process, China agreed to a ccredit majority foreign-owned joint venture 
conformity assessment bodies to conduct CCC testing two years after accession. 
Question 71 Could China confirm whether foreign-owned join t venture certification bodies and laboratories 
can undertake testing under the CCC? 
Answer 
The content of this question does not conform to  China's commitments wh en joining WTO. China 
requests EU to note the actual commitment made by China. 
Question 72  
Could China please explain what arrangements exist under the CCC to facilitate the acceptance 
of foreign test results? For instance, could Ch ina consider wider acceptance of foreign test 
results via bilateral agreements between Chin ese and foreign laboratories, or greater 
participation in existing multilateral sch emes (such as the IECEE CB scheme)?   
Answer At present, there are multilateral and bilateral le vels in the international mutual recognition 
framework of China. At the multi-lateral level, China is a member of IECEE-CB and ILAC Mutual 
Recognition Agreements. CCC recognizes test reports by foreign testing bodies which conform to the 
requirements of relevant international mutual reco gnition systems. At the bilateral level, China has 
signed 40 bilateral memoranda of c ooperation and agreements with 32 organizations in 23 countries 
and regions, among which 17 memoranda  are related to the international cooperation of CCC. In the 
framework of the memoranda, foreign certifi cation bodies, through cooperation with CCC 
certification bodies of China, may carry out part of  the CCC certification work. Besides, with the 
establishment of intergovernmental agreements fo r mutual recognition, foreign certification bodies 
approved by China can carry out CCC certification.  WT/TPR/M/230/Add.1 
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  Currently, the guideline for bilateral cooperati on is that Certification and Accreditation 
Administration of China signs framework agreemen ts on cooperation with relevant authorities of 
foreign countries, and then the technical bodies of  both countries negotiate concrete cooperation 
agreements according to the framework agreements. 
Question 73  
Could China consider exempting manufacturing  facilities certified in accordance with 
international standards (e.g. ISO 9001) from mandatory factory inspection?  
Answer 
ISO9001 concerns management system. The focus of mandatory factory inspection for product 
certification is to certify the conformity between  the manufactured products  and certified products. 
Therefore, mandatory factory inspection cannot be exempted.  
WTO's Secretariat Report, page 38, para. 56 
Also with regard to the expansion of the CCC scheme to new products, the EU notes with 
disappointment China's decision to move ahead with the implementation of the CCC requirements for a number of Information Technol ogy (IT) products on May 1, 2010, despite 
repeated calls from trade partners for further postponement and continued dialogue with a 
view to minimizing the risk of trade disrupt ions.  The EU remains concerned that these new 
measures are not aligned to international st andards and related conformity assessment 
practices, and will impose excessive requirements on  EU companies, in particular with regard to 
the disclosure of highly confidential information. It  should therefore come as no surprise that, to 
the EU's knowledge, no EU company has so far applied for the CCC for IT products.  
China's comments: 
In August 2007, China notified WTO of the draft rule on the compulsory certification of IT products. 
We invited extensive public opinions  and gave serious considerations. In January 2008, the rule was 
promulgated. To provide more time for enterpri ses to adapt to the new rule, China postponed its 
implementation date from 1 May 2009 to 1 May 2010.  
The certification of IT products takes relevant in ternational standards as the basis. The conforming 
assessment procedure applies equally to China, EU and other members and there is no excessive requirement. China has explained many times to EU in various occasions including in WTO TBT Committee meetings. The scope of the compulsory has been narrowed. The rule has just been 
implemented (on 1 May 2010). China welcomes par ticipation and implementation of EU enterprises 
and is ready to receive technical problems that they may consult.  
Question 74  
How will China ensure that trade in the ICT pro ducts covered by the CCC regulations is not 
disrupted?  
Answer 
To ensure the legal supervision and at the same  time to minimize the impact on trade, Chinese 
government has taken a series of concrete measures,  which include building the certification standard 
on the basis of relevant international standard; fu lfilling transparency obligations according to the 
TBT Agreement and giving consid eration to opinions expressed thr ough various channels; limiting  WT/TPR/M/230/Add.1 
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  the scope to those related to government procur ement; and also postponing the implementation date 
from 1 May 2009 to 1 May 2010 etc.  
In the March 2010 TBT Committee, China has indicated that SOEs would be excluded from the 
scope of application of these regulations. Howe ver, according to information at the EU's 
disposal, it would appear that certain important SOEs have already started to request their 
European suppliers to produce a CCC certificate as a purchasing precondition.  
Question 75 Could China indicate what measures it has taken, or  is planning to take, in order to ensure that 
Chinese SOEs do not unnecessarily request for certification under the CCC system?  
Answer Certification of ICT products belongs to voluntary certification, and is not covered by compulsory 
certification. China clarified in April 2009 that the compulsory certification for ICT products is limited only within the scope of government procurement. 
Question 76  
Is China considering further convergence betw een its standards and related conformity 
assessment procedures in this field with th e Common Criteria for Information Technology 
Security Evaluation enshrined in ISO/IEC standards 15408:2005? 
Answer 
China's certification system for ICT products adop ts national standards wh ich are developed for 
different products based on relevant internati onal standard (ISO/IEC 1540 8 Information Technology 
Security Evaluation Criteria, namely CC). Sin ce CC does not include requirements for specific 
functions and capabilities of the products, the national standards of China raise specific requirements 
for the functions and capabilities of the products, which do not conflict with the international 
standards.  
WTO Secretariat's Report, page 38, para. 56  
The EU notes that the CCC requirements for ICT pr oducts are only one aspect of a complex web of 
measures either introduced or planned by China in th e information security field. As stated in several 
occasions in the TBT Committee, the EU is also concerned, among others, with the continued application of the 1999 Regulation on Commercial Encryption Codes of the Office of State 
Commercial Cryptography Administration (OSCCA) – containing discriminatory elements against 
foreign companies – and also with the full impl ementation of the Multi Level Protection Scheme 
(MLPS). 
Question 77  
Could China provide an expected timeline with regard to the announced revision of the OSCCA 
Regulation? Will foreign stakeholders be allo wed to participate in the revision process? 
Furthermore, could China provide assurances that  such a revision of the OSCCA Regulation 
will be duly notified to the WTO, providing in terested Members with an adequate opportunity 
to comment? WT/TPR/M/230/Add.1 
Page 94  
 
  Answer 
OSCCA regulation is still under amendment. China w ill fulfil its transparency obligations under the 
WTO in due course.  
Question 78  
With regard to the MLPS, could China provide an update with regard to the expected time 
frame for implementation? Can China provide assurances that SOEs are excluded from the 
definition of "critical infrastructure" in the MLPS?  
Answer 
Chinese government initiated the MLPS program in 2007. The organizations  using information 
systems shall determine their level of protecti on according to the importance of the information 
system. The factors for determining levels are objectiv e, and enterprise ownership is not one of them.  
(viii) Government procurement  
WTO Secretariat's Report, page 39, para.61  The report states that there have been no substa ntial changes to China's regulatory regime or 
institutional framework for government procuremen t. However, in addition to the Government 
Procurement Law adopted in 2002, China has adopted in September 2009 a circular relating to 
the accreditation procedure on the proposed ou tline for the "indigenous innovation scheme".  
Question 79 Given that this measure has a significant impa ct on the procurement of a wide range of 
products, could China indicate how this new piece of legislation is to be linked to the overall 
framework of procurement? How should these provisions be combined with the existing 
government procurement law?   
Answer 
According to Article 9 of the Government Procurement Law , government procurement shall give 
priority to domestic products. This is to facilita te the realization of policy objectives concerning 
economic and social development. Encouraging in digenous innovation of enterprises is a significant 
strategy of China to build an innovation-oriented co untry and to achieve scientific development. In the 
course of its implementation, domestic and foreign businesses will be treated equally. All manufacturers with legal person status in China in cluding foreign-invested ones are entitled to apply 
for accreditation. These two policies are not in conf lict and will not lead to discrimination against 
foreign-invested enterprises.   
WTO Secretariat's Report, page 40, para. 65  
The report states that the notion of domestic pr oducts has not been defined yet. However, the 
draft implementing regulation of the Govern ment Procurement Law (see below questions 
related to paragraph 70) includes a definition of  domestic product, projects and services which 
is to be complemented by a decision taken by  the State Council's relevant department and the 
State council fiscal department.   WT/TPR/M/230/Add.1 
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  Question 80 
Could China confirm whether these defi nitions are already implemented?  
Answer 
China has drafted an accreditation standard for domestic products, which is now available on the 
website of Ministry of Finance for public opinions. Please refer to http://www.mof.gov.cn/ 
zhengwuxinxi/bulinggonggao/tongzhitonggao/2 01005/t20100521_318992.html for details.  
Question 81  
Could China clarify the relationship between the principles laid down under article 5 of the 
Government Procurement Law -which provid es for an overall preference for domestic 
products- and the circular issued in December 2007 relating to procurement of imported goods?  
Answer 
Article 5 of the Government Procurement Law  prescribes that no entity or individual may take any 
action to frustrate or restrain free access by the outsi de suppliers to the markets of other regions or 
industrial markets. This article aims to promo ting open, fair and just government procurement 
activities and creating a full competitive environment. It  is neither related to the preference towards 
domestic products nor in connection with the circular on import products procurement.  
The report by the secretariat does not refer to any domestic preferences either added by other 
piece of legislation or imposed by non regulatory me asures.  It is noticeable that, in addition to 
the indigenous procurement scheme referred to in  the questions above relating to paragraph 61, 
a new procurement scheme has been announced  which would create a preference for the 
purchase of Chinese-made cars (to make up for at least 50 % of the government fleets) .  
Question 82  
Could China provide information about the differen t discriminatory regimes put into place at 
central and sub-central level, in complement  and/or in combination with Article 5 of 
Government Procurement Law?  
Answer Both central government and local governments shall comply with the provisions of the Government 
Procurement Law  in conducting government pr ocurement activities. Any act in violation of Article 5 
of the Government Procurement Law  is inappropriate.  
Question 83  
Does China intend to phase out these discriminatory  policies and practices in view of China's 
accession to the GPA?  
Answer 
As soon as China accedes to GPA, it will give due treatment to enterprises  and products of GPA 
members according to the principle of mutual benefit and equality. WT/TPR/M/230/Add.1 
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  The report mentions that, despite Article 5 of the Government Procurement Law, Chinese 
procuring entities still purchase goods originatin g from third countries. However, emphasis is 
put on the recall of domestic preference in the context of the stimulus package.  
Question 84 Could China provide the most recent available data on the volume and the value of non 
domestic goods or services purchased by procuring entities?  
Answer 
China has not yet formally issued definition of dome stic products. Therefore, no relevant statistics is 
available at present.  
Question 85  
If possible, could China provide figures, on th e share of procurement contracts awarded to 
foreign suppliers or the share of imported goods purchased by Chinese procuring entities in the 
context of the stimulus package?  
Answer 
China has not conducted statistics in this respect . Therefore, no relevant data is available. 
WTO Secretariat's Report, page 40, para. 66 The report states that its procurement system  only covers procurement by government 
departments, institutions, and public organisatio ns at all levels, using fiscal funds for goods, 
construction and services listed in a Centralized Procurement Catalogue, or where the value is 
above a prescribed threshold. 
Question 86 
Where a procuring entity purchases goods, services,  or construction that are not listed in the 
catalogue or that are below the thresholds, is  the purchase considered to be government 
procurement? If not, please describe the applicable framework.  
Answer 
The procurement of goods, cons tructions and services which are not listed in the Centralized 
Procurement Catalogue or below the prescribed procur ement thresholds shall be regarded as a part of 
government procurement. However, such procuremen t is not subject to the mandatory provisions of 
the Government Procurement Law .  
Question 87  
Also, could China specify what public organisatio ns are covered? Could China give examples of 
such organisations?  
Answer 
The current government procurement legal framework  of China does not have legal definition for 
public organizations.  WT/TPR/M/230/Add.1 
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  Question 88 
With regard to the Centralized Procurement Catalogue, could China explain how it is 
established? Is the Catalogue regularly reviewed? If  so, when is this done? What are the criteria 
for this review? Also, what is the relationship between the Catalogue and specialized catalogues 
such as the Catalogue of Indigenous Innovat ion products for government procurement?  
Answer 
The Centralized Procurement Catalogue is to de fine the procurement c overage for centralized 
procurement agencies, which mainly covers univers al government procurement items. Article 7 of the 
Government Procurement Law  states that when funds for centralized items to be procured are from 
the Central Government budget, the applicable Cent ralized Procurement Catalogue is the one issued 
by the State Council; when funds are from the lo cal government budget, the governing Centralized 
Procurement Catalogue is the one issued by the cognizant provincial government, or agencies with 
their authorization, as applicable. 
The Centralized Procurement Catal ogue shall be reviewed when necess ary. The items in the catalogue 
may be adjusted according to the implementation capa bility and specialization level of the centralized 
procurement agencies. The Centralized Procuremen t Catalogue of Central Government was first 
enacted in 2003 and has been adjusted for five tim es. The current catalogue covers more items than 
the 2003 catalogue.  
There is no relationship between the Centralized  Procurement Catalogue and the catalogue for 
indigenous innovation products.  
Question 89 
With regard to the Prescribed Procurement Thresh olds, are they subject to change?  If so, 
please explain the process for changing them. 
Answer 
The Prescribed Procurement Thresholds are also s ubject to change when necessary. When funds for 
centralized items to be procured are from the Ce ntral Government budget, the applicable Prescribed 
Procurement Thresholds is the one issued by the State Council; when funds are from the local 
government budget, the governing Prescribed Procurem ent Thresholds is the one issued by the 
cognizant provincial government, or agencies with th eir authorization, as applicable. The Prescribed 
Procurement Thresholds of Central Government wa s first promulgated in 2003 together with the 
Centralized Procurement Catalogue and has been ad justed for five times. The thresholds for goods 
and services have been reduced from the previous  800,000 Yuan to the current 500,000 Yuan.  
Question 90 Are the data provided in paragraph 66 based on estimations or the value of contracts awarded? 
Can China confirm that these data only cover procurement above the prescribed thresholds and 
that they include procurement at the sub-central level?  
Answer The data provided are calculated based on the value of contracts awarded. They cover all procurement 
projects regulated by the Government Procurement Law . The statistics cover local government 
procurements, but do not include procuremen t below the prescribed thresholds.    WT/TPR/M/230/Add.1 
Page 98  
 
  Paragraph 66 indicates that procurement by SO Es is not covered, even if they may be 
performing non-commercial or quasi-governmental functions.  
Paragraph 91 Could China please clarify the nature of these non-commercial or quasi-governmental 
functions, and provide concrete examples of SOEs falling under these categories? Does China 
envisage subjecting these SOEs to procurement rules? If not, what are the reasons? 
Answer 
The Government Procurement Law  is not applicable to the procurement by SOEs. Chinese SOEs are 
independent market players whose daily operation activities are not directed by Chinese government. 
By far, China has not promulgated any laws sp ecifically for SOEs procurements. However, for 
mandatory bidding projects prescribed by the Law on Bid Invitation and Bidding , SOEs shall conduct 
procurement activities according to the Law. 
WTO Secretariat's Report, page 40, para. 67   
The report indicates that goods and services may be  procured following various procedures.  
Question 92 
How does China envisage ensuring GPA complian ce for these procedures? In particular, could 
China please clarify what "the other methods confirmed by the supervising department under the State Council depending on the circumstanc es" are? Do these meth ods correspond to the 
procedures foreseen under the GPA?  
Answer 
Before China's accession into the GPA, the govern ment procurement shall be conducted according to 
the Government Procurement Law. After it joins the GPA, China shall enforce the relevant provisions 
of the GPA regarding the procurement entities and projects listed in its initial GPA offer.  
Regarding such provision of "other methods confir med by the supervising department under the State 
Council depending on the circumstances" in the Government Procurement Law , the main 
consideration is that there may be innovative pr ocurement methods like electronic procurement. 
Under such circumstances, the Law authorizes Minist ry of Finance to decide on the new procurement 
method.   
It further indicates that procurement of construction and engineering projects is regulated by 
both the Government Procurement Law, and the Law on Bid Invitation and Bidding or Tendering.  
Question 93 
Could China explain in concrete terms how procu rement is conducted in these particular areas? 
What are the relevant rules for the publication of  the procurement, the selection of suppliers 
and the award of the contract?   WT/TPR/M/230/Add.1 
 Page 99 
 
 
  Answer 
Article 4 of the Government Procurement Law  stipulates that when bid invitation and bidding 
procedures are required in the procur ement of construction, the existing Law on Bid Invitation and 
Bidding  shall apply. The bid invitation and bidding of  construction projects shall observe relevant 
provisions of the Law on Bid Invitation and Bidding . For detailed provisions  concerning information 
disclosure, supplier selection and contract awarding, please refer to the Government Procurement Law  
and the Law on Bid Invitation and Bidding .   
WTO Secretariat's Report, page 41, para. 68   
Question 94 Is the official government procurement website accessible free of charge? Are summary notices 
available in a foreign language? Does it centraliz e all procurement which should be advertised 
or are procurement opportunities published on other websites? What is the applicable regime for procurement by sub-central entities? 
Answer 
The Chinese government procurement website (www.cc gp.gov.cn) is free for access. But currently we 
do not provide announcements in foreign languag es. All government procurement information of 
China is published on this website.  
The Government Procurement Law  is applicable to local government procurement. Some local 
governments have promulgated local rules fo r government procurement according to the Government 
Procurement Law . 
Question 95 
As regards the remedies regime, do the Gov ernment Procurement Law and the Law on Bid 
Invitation and Bidding or Tendering include any specific provisions on information to the suppliers of all decisions taken by the procur ing entity during the procedure? Do both 
legislations foresee a stand-still period between the award and the signature of a contract? Can 
procurement be cancelled in case of infrin gement to the applicable legislation?  
Answer 
Regarding the provision of information to the suppliers, Article 11 of the Government Procurement 
Law stipulates that information, except for c onfidential commercial information, regarding 
government procurements shall be made available to the public in a timely manner through the media 
designated by the government procuring regulatory au thority. Article 51 stipulates that suppliers may 
submit queries regarding the procurement proceedings  to the procuring entity and the procuring entity 
shall make a timely response but without discl osing suppliers' confidential information. 
As for the stand-still period, Article 46 of the Government Procurement Law  stipulates that the 
procuring entity and its contractor shall enter in to the government procurement contract pursuant to 
the requirements set forth in the procurement documen ts within 30 days from the time of dispatching 
the notice of acceptance to the supplier that was selected as the successful bidder. The stand-still 
period stipulated in the Law on Bid Invitation and Bidding  is also 30 days.  WT/TPR/M/230/Add.1 
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  With regard to the cancellation of a contract, Articles 71-73 of the Government Procurement Law  
specified the conditions for the cancellation of a contract.  
WTO Secretariat's Report, page 41, para. 69   
Question 96 Could China elaborate further on the figures re lated to procurement by  local entities? In 
particular, could China provide the most recent available data on the volume and the value of 
procurement by provinces and municipalities? Also , could China specify the types of goods and 
services purchased in priority by local procuring entities? 
Answer 
Government Procurements of China in 2006- 2008 by Project Types (unit: billion Yuan)  
 2006 2007 2008 
Total  368.2 466.1 599.1 
Goods 164.7 197.3 255.9 
  Central government  22.2 - - 
  Local government 142.5 - - 
Constructions 176.4 233.1 297.8 
  Central government  20.7 - - 
  Local government 155.7 - - 
Other services  27.1 35.7 45.3 
  Central government  4.3 - - 
  Local government 22.8 - - 
At present, no data is available regarding the go ods and services procured by local procuring entities 
under the priority procurement regime. 
WTO Secretariat's Report, page 41, para. 70 
Last February, China submitted for comments the draft Implementing Regulation of the 
Government Procurement Law of the People's Repub lic of China. The EU participated to this 
consultation. It raised a number of concerns as  regards the compliance of the draft with the 
GPA.   
Could China please inform when the final Im plementing Regulation will be adopted?  
Answer 
The Legislative Affairs Office of the State Counc il is now working on the draft according to the 
opinions of various organizations and individuals. No specific timetable is available at present.  
Question 97 
Could China please explain how the Government has improved coordination between the 
Government Procurement Law and the Law on Bi d Invitation and Bidding or Tendering? Also, 
could China explain how competition between government procurement agencies is promoted?  WT/TPR/M/230/Add.1 
 Page 101 
 
 
  Answer 
The Legislative Affairs Office of the State Council is now organizing the drafting of the Regulations 
for the Implementation of the Government Procurement Law and the Regulations for the Implementation of the Law on Bid Invitation and Biddi ng. The drafting work will coordinate relevant 
provisions of the two laws.  
Regarding the second question, we are not sure  what "the competition between government 
procurement agencies" means, please clarify.  
(3) M
EASURES DIRECTLY AFFECTING EXPORTS  
(ii) Export subsidies  
WTO Secretariat's Report, page 42, para.75 
According to the Secretariat's report, the authorities state that China does not provide any 
export subsidies. In this regard, the EU notes that the US and Mexico have initiated formal 
dispute settlement in late 2008 over many dozens of China's "Famous Brands" initiatives at the 
WTO. Following intense discussions in the consulta tion phase, the parties of the dispute reached 
an agreement whereby China confirmed that it has taken steps either to eliminate the measures 
of concern or to modify them to remove any provisions related to export-contingent brand 
designations and financial benefits. 
Consequently, as many prohibited export subs idies were indeed provided by China during the 
reporting period, the EU notes that the above co nclusion of the report does not reflect the real 
facts.  
Question 98 
Could China please comment on this?  Answer 
China has eliminated export subsidies sin ce 1991 and has made commitment upon WTO accession. 
However, due to the technical complexity of subs idy, members often have different understanding on 
what would constitute an export subs idy. This is not surprising. China's position on this issue has been 
clear and consistent, i.e. we will observe th e WTO rules and China's accession commitments.  
Question 99 
Could China also confirm whether all the challeng ed programs identified as prohibited in the 
dispute have meanwhile been eliminated or modified?   
Answer 
Yes, it is confirmed.  
China submitted its last subsidy notification in the year 2006 covering the period 2001 until 
2004. This subsidy notification did not include s ubsidies at all level of governments and did not 
include subsidies of China's "Famous Brands" init iatives. Since then, two subsidy notifications 
were due, one by mid 2007 covering the years 2005 and 2006, and another by mid 2009 covering the years 2007 and 2008.  WT/TPR/M/230/Add.1 
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  Question 100 
Could China indicate when it will submit its outstanding subsidy notifications and whether 
subsidies provided at all levels of governments will be included? 
Answer 
As was stated by China in the meeting of th e WTO Subsidies Committee in October 2009, China 
would soon finish its second subsidy notification. Th e huge workload including the work of this trade 
policy review did have some effect on the timely su bmission of the subsidy notification. China shall 
submit 2005-2008 central government subsidy notification by this summer.  
Question 101  
Could China also indicate what it undertakes to fully comply with notification requirements in 
order to submit a complete and timely  subsidy notification in the future? 
Answer 
China has made great efforts in ensuring the co mpliance of the subsidy notification with the 
requirements of the WTO subsidies agreement. We  have basically established a working mechanism 
for subsidy information collection and study at th e central government level. The first subsidy 
notification submitted by China covers the period from 2001 to 2004, and the second notification to 
be submitted would cover the period from 2005 to 2008. Therefore, the period covered by the 
notifications is uninterrupted and complete, covering all years from China's accession into the WTO 
in 2001. In the next step, China will try to e nhance the timeliness of the subsidy notification and 
gradually make it consistent with the requirements of WTO rules. In the meantime, China will further 
research into issues related to local subsidy notifi cations by drawing experience from the information 
collection and notification of the central government subsidies.  
(iii) Export taxes  
WTO Secretariat's report, page 42, para. 76 The report 
refers to the existence of statutory ex port taxes and interim export taxes.  
Question 102 
Could China explicit the difference betw een these two export taxes systems?  
China's WTO accession protocol of 2001 only a llows for export taxes to be set up on a 
commonly agreed list of 84 lines (HS 8-digit level). As  pointed out in the report, statutory export 
taxes were applied to 95 lines and interim export taxes were applied to 258 lines (HS8 level).  
Question 103 How these divergences concur with China's commitments under its WTO accession protocol, 
both in terms of scope of taxed goods but also in terms of taxes level, as  underlined (for some 
products) in page 43, footnote 58?  WT/TPR/M/230/Add.1 
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  WTO Secretariat's report, page 43, para. 77 
The report mentions various revisions and adjustme nt of export taxes, both in terms of scope 
and in terms of level, which have been undertaken for various reasons.  
Question 104 
How does China intend, in the future, to reconc ile such revisions and the commitment taken 
under Annex 6 of its WTO accession protocol to "consult with affected [WTO] members prior 
to increasing applied tariffs with a view to  finding a mutually acceptable solution"? 
Answer (questions 103-105) 
China's export administration on a few products ar e for the purpose of protecting environment, 
protecting human, animal or plant life or hea lth, conserving exhaustible natural resources, or 
protecting national security. Such measures do not c onstitute arbitrary discrimination, or disguised 
restriction on international trade, and are fully c onsistent with WTO rules. Since the issue concerned 
is subject to the ongoing WTO dispute cases of DS394, 395 and 398, China will provide further 
comments after the final rulings.  
(iv) Tax rebates on export  
WTO Secretariat's report, page 43, para. 80 and para. 118 
The WTO Secretariat notes that China has incl uded the "adjustment" of VAT rebate rates as 
part of its sector-specific stimulus plans, including the plan for steel.  China has stated that as part of its stimulus it would maintain "fle xible" VAT and border tax policies to maintain 
China's share of the international market.  We are concerned that China chose to increase VAT 
rebates on steel at a time of low demand in global markets and that Chinese government and industry leaders continue to describe export ta rgets for steel of about 10% of production 
without regard to market forces. 
Question 105 Could China explain why it continues to apply differential VAT rebates to steel and steelmaking 
inputs and increased VAT rebates to promote exports in 2009?   
Answer First of all, China's tax rebate on export goods do es not exceed the VAT levied on them. This is the 
case even after raising rebate rates on certain products in 2009. 
Secondly, the general direction of the VAT rebate policy of China is to achieve policy stability and 
continuity on the basis of continuously improvi ng tax collection and administration. The rebate 
adjustment in 2009 was in response to requests of businesses and industry associations in order to 
help them overcome enormous difficulties under the sp ecial background of the international financial 
crisis. The product coverage and margin of the rebate raise are determ ined upon comprehensive 
assessment taking into account various factors incl uding the seriousness of the shock and difficulties 
faced by various sectors, employment situation in the sectors, as well as the improvement achieved in terms of pollution and energy consumption of these sectors etc.  WT/TPR/M/230/Add.1 
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  (v) Export prohibitions, restrictions, and licensing  
WTO Secretariat's report, page 44, Box III.1  It is mentioned that China has started consideri ng internal restrictions measures to achieve the 
objectives of environment protection and conservat ion of natural resources that constitute the 
stated aim of export restrictions.  
Question 106 Could China provide WTO members with more deta ils about such measures, such as their 
scope, their nature and the timeline for their implementation?  
WTO Secretariat's report, page 44, Box III.3 The report contains a list of all products subjec t to export quotas and non-automatic licensing 
as of 2009.  
Question 107 Could China explain how the quantitative export rest rictions listed in the Box would be justified 
in light of GATT Article XI, particularly as regards non-food articles? 
WTO Secretariat's report, page 45, para. 85 
The report describes conditions for quota allocation , for goods subject to export quotas. It has 
occurred in previous years that for some pr oducts, quotas were attributed to foreign-funded 
enterprises with a significant delay in comparison with domestic enterprises. 
Question 108 How does China intend to ensure that the attribution of any quotas is done on a non-
discriminatory basis between domestic and fo reign-funded economic operators, in line with 
Article 8.2 of China's WTO accession protocol?  
The announced review of the Rare Earths De velopment plan 2009-2015 will ban the export of 
certain rare earths while allowing its sale on the domestic market.  
On what basis does China justify this measure?  Answer (questions 107-110) 
China's export administration on a few products ar e for the purpose of protecting environment, 
protecting human, animal or plant life or hea lth, conserving exhaustible natural resources, or 
protecting national security. Such measures do not c onstitute arbitrary discrimination, or disguised 
restriction on international trade, and are fully c onsistent with WTO rules. Since the issue concerned 
is subject to the ongoing WTO dispute cases of DS394, 395 and 398, China will provide further 
comments after the final rulings.   WT/TPR/M/230/Add.1 
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  (ix) Export facilitation and marketing assistance  
WTO Secretariat's report, page 47, para. 91-94  As China is aware, Participants to the OECD Ar rangement on Export Credits categorise official 
export credit support into 1) Export credit guar antee or insurance ("pure cover"), 2) Official 
financing support (direct credit/financing and ref inancing or interest rate support) and 3) Any 
forms of combination of the two.   
Question 110 To avoid any risk for misunderstandings on the ba sis of terminology, could China confirm what 
types of "export credit" China Export and Import Bank is exactly mandated to provide? 
Answer At present, Export-Import Bank of China provides export financing (including seller's credit and 
buyer's credit for exports), which is mainly direct financing.  
Question 111 
Does China have a specific regime for Tied Aid? 
Answer: China does not have a regime for Tied Aid.  
Question 112 Does China envision intensifying its cooperation  and information exchange with international 
export credit and export insu rance arrangements (OECD Con sensus, Paris Club)?  Does it 
envision becoming a member of these organizations, or at least an observer? 
Answer 
China is now an OECD observer. Export-Import Bank of China and China Export & Credit Insurance 
Corporation attended a number of conferences of OE CD and Paris Club as observers in recent years.  
In the context of rules for individual produc ts and buyer countries regarding credit length, 
China has noted that as it is not a member to the OECD, "the rules of the OECD are merely a reference, while other international practices are referenced as well".  
Question 113 
Could China specify which "other international practices" are referred to?  Answer 
Export-Import Bank of China takes Arrangement on O fficially Supported Export Credits of OECD as 
its reference for business operations. Other internat ional practices include the practices of official 
export credit institutions of other countries.  
The EU understands that there is a floor for RMB lending rates.  WT/TPR/M/230/Add.1 
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  Question 114 
Is it possible that rates actually applied co uld be lower than PBC benchmark rates?  
Answer 
China adopts the policy of "imposing only lower limits  with ceilings removed" for the lending rates of 
RMB by financial institutions. The lower limit is 0.9 times of the PBC be nchmark rate. Financial 
institutions may determine their lending rates by themselves as long as the rates are above the lower 
limit. Therefore, there is no such a situation that the actual lending rate of financial institutions is 
lower than the PBC's lower limit (0.9  times of the benchmark rate).  
The EU understands that China Export and Impo rt Bank has worked out its own guidelines for 
environmental protection.  
Question 115 
Could China give a general overview on their substance?  
Answer 
In 2007, the Export-Import Bank of China issued the Guidelines for Environmental and Social Impact 
Assessments of the Export-Import Bank of China , which requires the bank to consider social benefits 
and environmental requirements of loan projects in their examination, to conduct environmental and 
social impact assessment for both domestic and overs eas loan projects, and to carry out inspection and 
supervision over the construction and operation of  the projects based on the assessment results. If 
significant environmental or social problem occurs in any loan project, the bank may request the borrower and the project owner to timely eliminate ne gative effect, and may also stop to issue further 
loans or make earlier recall of the issued loan according to the loan contract.   
As regards Chinese financing of official development assistance, Question 116 Could China explain how the procurement system  applied to foreign aid functions? Could 
China confirm whether there is no equivalent to the minimum concessionality level under Chinese foreign aid rules? 
Answer 
China's foreign aid is provided under the South- South cooperation framework. China provides aid to 
other developing countries facing real difficulti es according to its own capacity. The procurement 
under China's foreign aid framework is conducted through public bidding.  
China has noted that China's aids are mostly  provided to help the government of recipient 
countries to construct social welfare projects, infrastructures and civilian facilities.  China 
indicates that these are projects closely related to  the livelihood of the general public that need 
government investments rather than those economic ally viable projects that can attract normal 
commercial finance or export credit.   WT/TPR/M/230/Add.1 
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  Question 117 
By which procedure are "projects closely related  to the livelihood of the general public that 
need government investments" distinguished from "economically viable projects"?   
Answer 
China's foreign aid projects mainly concern pove rty reduction and people's livelihood, for example 
agriculture technology demonstration projects, hos pitals, schools, waste water treatment projects, 
roads and bridges under the request of the government of the recipient country. In providing aid, China gives full respect to the will of the recipien t country and identifies the projects together with 
them through friendly consultations.  
(4) M
EASURES AFFECTING PRODUCTION AND TRADE   
(i) Taxation and tax incentives  
China's report, page 13, para. 45 China notes that with respect to the taxation system," following the reform in 2007 of tax for 
use of land in urban areas and vehicle and vessel tax, and the introduction in 2008 of the new Law on Enterprise Income Tax and Interim Regulations on Tax for Farmland Occupation 
which have been applied uniformly to both domestic and foreign-invested enterprises, the 
Chinese Government further unified the real  estate tax for Chinese and foreign-invested 
enterprises and individuals. Thus, except for th e urban construction and maintenance tax and 
the education surcharge, the taxation system for Chinese and foreign-invested enterprises and 
individuals has been unified in China. In addition, with the implementation in 2009 of the amended Interim Regulations on Value-added Tax, Interim Regulations on Business Tax, and 
Interim Regulations on Consumption Tax, value-added tax has been transformed, and the 
systems of business tax and consumptio n tax have been further improved". 
Question 119 Is China planning to reform Business Tax a nd replace it by a service Value Added Tax? 
Answer Chinese government agrees on the point that an ideal  VAT system shall cover both goods and services 
as this could help maintain the neutrality of the VAT and eliminate repetitive taxation. China has long 
been devoted to the research on th e reform of the VAT scope. Our general policy direction is to solve 
the repetitive taxation problem in the VAT system.  
(iii) State-owned enterprises, privatization, and corporate governance  
WTO Secretariat's report, page 55, para. 122 
Question 120 
The report reads that SASAC intends to reduce th e number of SOEs under its supervision by at 
least 25% by the end of this year. How exactl y will this happen? Will SOEs be floated or 
privatised?  WT/TPR/M/230/Add.1 
Page 108  
 
  Answer 
The measures include promoting the merger and acquisition of large SOEs, pushing forward the 
restructuring between applied technology research institutes and relevant manufacturing enterprises, 
and launching insolvency proceed ings for some enterprises.  
Question 121 
Can the Government of China indicate the share of SOE's output in the country's overall GDP? 
Answer 
According to the 2008 Statistic Communiqué on National Economy and Social Development and 
information on state-owned assets of SOEs in Ch ina in 2008 by National Bureau of Statistics of 
China, the state-owned industrial gross output acc ounts for 45.4% of the GDP and the state-owned 
industrial added value takes up 43.5% of the total in dustrial added value in China at the end of 2008.  
WTO Secretariat's report, page 55, para. 124 
China faces overcapacity in steel, aluminium, cem ent and other sectors and as the Secretariat 
notes in Chapter I, paragraph 32, "[o]vercapaci ty and consequent export pressure could lead 
not only to potential trade frictions but also mo re non-performing loans."  The Secretariat notes 
that China's SOEs are exempt from paying dividends.  We would like to note that, at the same 
time, some other companies are in fact required to  pay dividends. As a fact, China's steel sector 
continues to be dominated by SOEs.   
Question 122 Why is this policy of exempting SOEs from di vidend payments consistent with the goal of 
restructuring the steel industry and reducing excess capacity? 
Answer 
According to the Interim Measures for the Administration of  the Collection of Proceeds from State-
owned Capital of Central Enterprises  issued jointly by SASAC and Ministry of Finance in 2007, steel 
enterprises should also pay proceeds of state-owned capital. Therefore, it is not true that steel 
enterprises are exempted from paying any proceeds.  
WTO Secretariat's report, page 55, para. 126 The reports describe the measures taken by China in order to reduce the weight of SOEs in its 
economy. These measures go in the right direction, but  we should not forget that SOEs do still 
have a dominant position and can make use of  better, and sometimes unfair, instruments in 
comparison to those available for public companies, both Chinese and foreign.  
Question 123 
Could China explain how it intends to further reduce the weight of SOEs in the Chinese 
economy?   WT/TPR/M/230/Add.1 
 Page 109 
 
 
  Answer 
Chinese government has never proposed a specific plan to reduce the weight of SOEs in the Chinese 
economy. 
China adopts the socialist market economy system, in which SOEs and other enterprises are equal 
competitors and players in the market. China woul d consolidate and develop the public sector of the 
economy and at the meantime also unswervingly en courage and support the development of the non-
public sector. 
(iv) Competition and consumer protection policy   
WTO Secretariat's report, page 59, para. 140  The report notes that "[r]egulations for certain se ctors, such as aviation, electricity, postal and 
telecommunications services, and those issued by local governments, also contain provisions on 
market competition.  The Anti-Monopoly Law does not take precedence over other competition-
related legislation."  
Question 124 Is the Anti Monopoly Law (AML) subordinated  to competition rules issued by local 
governments? 
Answer 
Anti Monopoly Law  is a law. Its authority is higher than th at of regulations and rules issued by local 
governments. 
Question 125 
Could China provide an exact map of its "other competition-related legislation" and indicate 
the boundaries for the scope of application of the AML?  
Answer 
Other competition-related legislation refers to Law against Unfair Competition , Pricing Law  and 
related sector-specific laws and regulations.  
According to Article 2 of the Anti Monopoly Law , Anti Monopoly Law  applies to "monopolistic 
conducts in economic activities" within the People' s Republic of China, as long as the monopolistic 
conduct has occurred within the territory of China,  no matter whether the undertaking is a Chinese 
enterprise or a foreign enterprise; Anti Monopoly Law  also applies to monopolistic conducts outside 
the People's Republic of China if such conducts elim inate or have restrictive effect on competition in 
the domestic market of the People's Republic of China. 
Comment to WTO Secretariat  
The EU would like to note that in March 2010, MOFCOM published updated Guidelines on 
Procedures for Merger Review, which is now cons istent with the procedural aspects of the 
Measures on the Notification of Concentration of Undertakings released last November. The revised Guidelines also offer additional certaint y on the timing of the merger review process. WT/TPR/M/230/Add.1 
Page 110  
 
  The EU would suggest the WTO Secretariat to  include this updated information when it 
circulates a revised version of its report. 
China's Comments 
Measures on the Notification of Concentration of Undertakings  (hereinafter referred to as 
"Notification Measures") and Measures on the Examination of Concentration of Undertakings  
(hereinafter referred to as "Examination Measures") were promulgated by Ministry of Commerce on 
21 November 2009 and entered into force on 1 January 2010. "Notification Measures" and 
"Examination Measures" are rules formulated by Ministry of Commerce on the basis of Anti 
Monopoly Law  and Provisions of the State Council on Thresholds for Prior Notification of 
Concentrations of Undertakings , and are important part of  supporting legislation of Anti Monopoly 
Law. The two rules contain specific provisions on  the meaning and the calculation method of 
turnover, obligor of notification, consultation pr ior to notification, requirements for notification 
documents, objections and restrictive conditions, furt her review, implementation and supervision, etc. 
WTO Secretariat's report, pages 59-60, para. 144-145  
How is the AML merger review procedure enforced  with respect to SOEs and purely domestic 
concentrations?  
Answer 
Through the implementation of Anti Monopoly Law , China hopes to prevent monopolistic conducts 
from restricting competition, promote and protect enterprises of various ownership structures to grow through fair competition, and thus promote the form ation of a mechanism for "survival of the fittest" 
and the transformation of economic  growth pattern. Therefore, Anti Monopoly Law  applies equally to 
monopolistic conducts of domestic a nd foreign enterprises of different ownership structures. There 
will be no differential treatment among enterp rises of different ownership structures. 
Could China indicate when companies will be pr ovided with a comprehensive set of guidelines 
covering all aspects of the AML so that co mpliance and legal certainty for the Business 
Operators is enhanced?  
Answer 
Since the implementation of Anti Monopoly Law , the Chinese government has been actively 
promoting the formulation of supporting regulations and rules. For the examination of concentration 
of undertakings, Ministry of Commerce issued one guideline and one departmental rule jointly with 
relevant ministries and commissions, and separately issued two departmental rules and four guiding 
documents in 2009. In addition, National De velopment and Reform Commission and State 
Administration for Industry and Commerce are also drafting relevant supporting rules within their 
duties. These supporting rules and guidelines provide further details and clarifications on important 
aspects of the enforcement of the Anti Monopoly Law  and enhance its operability and certainty. 
Question 126 
Does the Government intend to provide further de tails about the rationale of its merger control 
decisions beyond the authorization or not of a merger?   WT/TPR/M/230/Add.1 
 Page 111 
 
 
  Answer 
China reviews merger applications in accordance with the provisions in the Anti Monopoly Law . 
According to Article 27 of the Anti Monopoly Law , the following factors should be taken into 
consideration in the examination of the concentrat ion of undertakings: (a) the market share of the 
business operators involved in the relevant market a nd the controlling power thereof over that market; 
(b) the degree of market concentration in the relevant  market; (c) the influence of the concentration of 
business operators on the market access and technol ogical progress; (d) the influence of the 
concentration of business operators on the consumer s and other business operators; (e) the influence 
of the concentration of business operators on the national economic developm ent; and (f) other factors 
that may have an effect on the market competition and shall be taken into account as regarded by the 
anti-monopoly authority under the State Council. The Anti Monopoly Law  is available at 
http://www.gov.cn/flfg/ 2007-08/30/content_732591.htm. 
Is China already a member of the International Competition Network (ICN)? If not, does it 
intend to join ICN and in the affirmative, when?   
Answer China is not a member of the International Co mpetition Network. China is studying relevant 
information about International Competition Network,  but there is no specific timetable for accession. 
WTO Secretariat's report, page 60, para. 147  
The report indicates that Article 55 of the AML does not provide detailed description of what 
constitutes "abuse" of intellectual property rights.  
Question 127  
Could China clarify the details of the potential application of this Article?  Answer 
China's anti-monopoly authorities are drafting supporti ng rules related to the abuse of intellectual 
property rights. Such rules will clarify on the de tails of the application of Article 55 of the Anti- 
Monopoly Law . 
The report notes that "[a]ccording to the authoriti es, there have been no such cases so far". The 
EU would like to underline that the Courts ha ve rejected so far every case that has been 
addressed to them, and our understanding is that there have been "no successful cases so far".  
We would like to point out the following ca ses: "Shanda case", "Woehner case", "Palm I chat 
vs Tencent".  
Question 128  
Could China comment on this?  
Answer 
As far as the Chinese government knows, there is i ndeed a "Shanda case", but we are not clear about 
"Woehner case" and "Palm I chat vs Tencent". WT/TPR/M/230/Add.1 
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  (v) Intellectual Property Rights 
WTO Secretariat's Report, page 61, para. 151    The Report refers to the Outline of the National Intellectual Property Strategy (NIPS) issued by 
the State Council in June 2008, which identifies the strategic goal of China becoming, by 2020, "a country with a comparatively high level in terms of the creation, utilization, protection and 
administration of IP rights".   
Question 129  
Almost two years after the issuance of the Ou tline, what is China's assessment of the 
implementation of the NIPS? Has its implementati on so far fulfilled the expected objectives? If 
not, which aspects would d eserve further attention?  
Answer 
After issuing the Outline of the National Intellectual Property Strategy  in June 2008, the Chinese 
government is implementing seriously the Outline  to further strengthen protection of the IPRs. 
The Chinese government establishe d an inter-ministerial coordination mechanism that involves 
28 government agencies and formulated annually plans for implementing the IPRs strategy. In 2009, 
over 200 specific tasks were fulfilled, 54 pieces of regulations, rules and administrative guidelines 
related to IPRs were formulated or revised, 82 major policies and measures were issued, 23 law-
enforcement actions were taken, and 28 public service platforms were set up. At the same time, the 
implementation of the IPR strategy in various sect ors and regions also pressed ahead. Preliminary 
progress has been made in the realiza tion of the stated goals set in the Outline . 
The Chinese government will further advance the impl ementation of the IPRs strategy. On the one 
hand, we will focus on solutions of outstanding issu es of public concern with the launch of special 
operations to deal with major IPR cases. On the ot her hand, we will further the construction of IPR 
system and improve laws and regulations concer ned so as to consolidate the mechanism on IPR 
protection in the long run.    
WTO Secretariat's Report, page 62, para. 152 
The Report states that China is preparing to revise the Anti-Unfair Competition Law. 
Question 130  
Could China explain the main objectives and features of the revision of the Anti-Unfair 
Competition Law? Will a draft be ma de available for public comments?  
Answer 
The revision of the Law against Unfair Competition  aims to stop unfair competitions, and secure fair 
competition order in the establishment of a unified  and open market mechanism featuring orderly 
competition. With the continuous development of China's market economy and intensified market 
competition, the Law against Unfair Competition  formulated in 1993 cannot meet the current 
requirements. 
Revision to the Law against Unfair Competition is to be characterized as follows: firstly, based upon 
the experience drawn from the legisla tion and law-enforcement of the 1993 Law against Unfair  WT/TPR/M/230/Add.1 
 Page 113 
 
 
  Competition and from international legislation of the similar nature, the Law would be revised to meet 
the requirements of current social and economic development; secondly, the content concerning IPR 
protection would be added to strengthen the efforts of IPR protection; thirdly, the provisions about 
imposing a ban on commercial bribery would be id entified and specified and the punishment for 
committing commercial bribery would be strengthened; fourthly, the revision aims to make the Law 
against Unfair Competition  to be in consistency with the  Anti-Monopoly Law .  
WTO Secretariat's Report, page 62, para. 153 
The Report states that China has been intensifyi ng the enforcement of IPR protection, for which 
it has a double-track system:  administrative acti ons (consisting of mediation by the authorities), 
and judicial measures (including civil actions and criminal prosecutions through the courts). 
The legalisation and notarisation requirements wi th regard to Power of Attorney and evidence 
coming from abroad are considered cumbersome and time consuming for foreign right holders 
and constitute an obstacle to any urgent legal action.  
Question 131  
Could China indicate whether it is prepared to  simplify the rules of representation before the 
courts as well as evidentiary requirements? 
Answer 
China does not fully agree to the description in the Secretariat Report concerning the double track 
system in the IPR law-enforcement. For exam ple, according to the Secretariat Report, the 
administrative agencies in practice generally hand over the cases meeting criminal threshold to the 
police after administrative punishment is given. This  does not conform to reality. China would like to 
make a clarification, taking copyright protection as example. 
China has established the IPR protection mode of "two approaches, parallel operation" by both the 
administrative and judicial sectors. This choice of sy stem is based on China's current social conditions 
and economic development level. As far as the copyright protection is concerned, judicial protection, 
as the most essential and most powerful legal remedy , plays a leading role in the settlement of 
copyright violation and piracy as well as of civil disputes. In comparison with judicial protection, 
copyright administrative law-enforcement featur es timeliness, promptness and relatively simple 
procedure, also playing an irreplaceab le role in copyright protection.  
As provided in the Copyright Law , there are two categories of acts of infringement on copyright: 
firstly, the 11 acts identified in Article 47 of the Copyright Law , which can only be settled through 
civil actions, with the infringed bringing an acti on to the People's Court after gathering related 
evidence; secondly, the 8 acts provided in Article 48 of the Copyright Law , which can be settled 
through civil actions, administrative punishments or  criminal litigations, depending on the degree of 
the damage caused by the act of copyright infringe ment. In other words, the infringed may directly 
bring an action to the People's Court after gather ing related evidence, or apply for administrative 
protection to the copyright administrative authoritie s, or initiate criminal procedures when such an 
infringement constitutes a crime.  
With respect to the suspected cr iminal cases to be transferred by the administrative agencies, the 
copyright administrative law-enfo rcement agencies must transfer the cases meeting standards of 
prosecution and suspected of crime to the police in th e process of their investigation and enforcement, 
as stipulated in the Administrative Punishment Law  and Provisions on the Transfer of Suspected 
Criminal Cases by Administra tive Organs for Law Enforcement  issued by the State Council on 
9 July 001. Meanwhile, copyright administrative la w-enforcement constitutes no prerequisite for the WT/TPR/M/230/Add.1 
Page 114  
 
  initiation of criminal procedure, and the police are empowered to file a case for investigation against 
copyright piracy crimes. The copyright administrati ve agencies are not allowed to replace criminal 
punishment with fines.  
The Box III.2 of the Report states that agencies can begin administrative actions on the request 
of the IP right holder, a third party, or on their own initiative. The Table III.7 provides statistics 
on IP enforcement for 2006-2008.  
Question 132  
Could China provide statistical data on the br eakdown of actions on request, and on the own 
initiative of the administrative authorities ( ex officio  actions)?  
Answer According to Article 60 of the Patent Law , a local intellectual property office will accept a patent 
infringement case only at the request of the patent ee. This differs from trademark infringement and 
copyright infringement, which can be investigated  and enforced by law-enforcement authorities on 
their own initiative. In 2009, intellectual prope rty offices in China totally accepted 937 cases related 
to patent infringements and disputes.  
In 2009, local administrations for industry and co mmerce handled 51,044 cases of various trademark 
violations, which included 10,461  foreign-related trademark cases. Among all the cases, 37,824 were 
enforced on their own initiative, accounting for 74.1% of the total. 
For copyright administrative enforcement, in 20 09, China launched the fifth nationwide campaign 
against internet infringement and piracy, and 541 cases related to internet infringement were dealt 
with. Statistical data on copyright enforcem ent are also available at www.ncac.gov.cn/cms/ 
html/205/1973/list-1.htm. 
For IPR border enforcement, in 2009, Customs authorities tracked down an d seized IPR-infringing 
export goods worth of over RMB 450 million. As for specific measures taken, firstly, Customs 
authorities carried out enforcement actions on thei r own initiative to protect intellectual property 
rights in accordance with their mandate. In 2009, th e value of infringing goods detained by China 
Customs on their own initiative reached RMB 430 milli on, accounting for 94.3% of the total value of 
infringing goods seized. Secondly, China Customs t ook a series of special actions in key areas and 
routes against border infringements such as the "dragon boat action" taken against the export of infringing goods by making use of European and Am erican ship or air routes from the end of 2007 to 
the beginning of 2008, and the special action fo r IPR protection in post and express mail June to 
December 2009. China Customs also  attach great importance to law enforcement cooperation with 
other countries and regions. China has signed docum ents relating to IPR protection cooperation with 
the USA, EU and also among Japan, South Korea a nd itself. Effective cooperation is underway in 
information exchange, enforcement experience sharin g, and data interchange in case statistics etc. 
The Box III.2 of the Report states that, if the me diation does not produce satisfactory results, 
the administrative authority may refer the case to the people's court. The transfer of cases 
between the administrative authority and the publ ic security body is often delayed because the 
administrative authority often insists on first ha nding out an administrative sanction, and then 
transferring the case to the public security body.    WT/TPR/M/230/Add.1 
 Page 115 
 
 
  Question 133  
Don't the Chinese Authorities think that the admini strative authority should be instructed not 
to issue an administrative penalty when the criminal threshold has been reached but rather to immediately transfer the case to the public security body?  
Answer Please refer to answer to question 132. 
Moreover, it appears that many  cases are transferred from th e customs to the public security 
body for criminal prosecution but most of th em are not successful without any reasons.  
Question 134  
Don't the Chinese Authorities think that the public  security body should officially accept the 
case to do further investigation le ading to the criminal prosecution?  
Answer 
Please refer to answer to question 132. 
The Box III.2 of the Report states that criminal rem edies include monetary fines based on either 
the value or volume of the counterfeited goods or both. In China, no criminal prosecution for 
IPR infringements is possible unless specific thre sholds are met. The existence of three possible 
calculation methods for the criminal thresholds creates uncertainty and lengthy discussions with 
local authorities. This delays and makes it di fficult to transfer cases from the administrative 
authorities to the police.  
Question 135 Don't the Chinese Authorities think that the J udicial Interpretation on thresholds by the 
Supreme People's Court and the Supreme People's Pr ocuratorate should be revised in order to 
simplify the calculation methods?   
Answer 
Please refer to answer to question 132. 
The Box III.2 of the Report states that enforcing IP rights at the border is the responsibility of 
Customs, which seizes imports and exports of goods infringing patents, trademarks, and 
copyright and related rights ( ex officio ). The process for Customs to protect IPRs at the border 
depends on whether the IPR has been filed or recorded at Customs. The number of cases handled by Customs has grown rapidly, from  2,475 cases in 2006 to 11,135 cases in 2008 
(Table III.7).  
Question 136 
Could China provide statistical data on the breakdown of customs actions on request and ex 
officio  against IPR infringing imports and exports? WT/TPR/M/230/Add.1 
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  Answer 
Please refer to answer to question 133. 
Question 137  
Could China describe how Chinese legislation on trade fairs is implemented? Is there any 
consideration regarding compulsory introduction  of IPR clauses in contractual arrangements 
between trade fair organisers and exhibitors? 
Answer 
Exhibition has always been one of the key areas of  China IPRs protection. For domestic exhibitions, 
in 2006 the Ministry of Commerce (MOFCOM) together with State Intellectual Property Office (SIPO), the State Administration of Industry and Commerce (SAIC) (Trademark Office) and National 
Copyright Administration (NCAC) jointly issued Measures for the Protection of Intellectual Property 
Rights in Exhibitions  and organized enforcement activities sp ecifically concerning the protection of 
IPRs in exhibitions. 
The contracts concluded by and between exhibition orga nisers and exhibitors are civil contracts. It is 
therefore not appropriate for the Government to inte rvene in the content of the contracts concluded. 
To strengthen exhibition IPRs protection, the Measures for the Protection of Intellectual Property 
Rights in Exhibitions  encourages exhibition orga nisers and exhibitors to include IPRs clauses into 
contractual arrangements by stipulating in Artic le 4.2 that exhibition organisers may enhance 
exhibition IPRs protection through concluding exhibition IPR protection clauses or contracts with 
exhibitors. 
(a) Patents  
WTO Secretariat's Report, page 62, para. 156  The Report refers to the length of  invention patent protection (20 ye ars). Certain specific products like 
pharmaceuticals require long additional periods fo r their development and to obtain marketing 
authorisations. A number of countries have decided to compensate for these delays during which the 
patent cannot be exploited by an additional protection mechanism (in the EU: Supplementary 
Protection Certificate).  
Question 138  
Does China plan to grant additional protection – in the form of patent term extension or 
supplementary protection certificate – to produc ts that cannot be marketed before a specific 
authorisation has been given (such as pharmaceutical products)?   
Answer Currently, China has no plans in this regard.  
WTO Secretariat's Report, page 64, Table III.7  
The EU commends China for having provided the detailed data contained in Table III.7, and 
for also having published the recent Supreme Co urt White Paper on IPR. The publication of 
this information does clearly enhance transparen cy and helps to better understand the current 
situation on IPR enforcement. According to the se statistics, it seems that the only indicator  WT/TPR/M/230/Add.1 
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  following a clear trend is the one related to  Customs seizures, which have significantly 
increased. To the extent that this reflects energe tic pursuit of counterfeits, this is to be 
applauded. However, this can equally suggest th at the scale of IPR infringement within the 
country is at best stable, if not rising considerably.   
Question 139 
What plans does the Chinese administration have for effectively addressing this situation?  
Answer 
China believes that these data shows the determina tion of the Chinese Government to crack down on 
IPRs infringement. Given the conti nual expansion of China's economy and trade, such a fact that the 
scale of IPR infringement remains stable is itself a demonstration that the measures adopted by the 
Chinese Government have been effective. The st and of the Chinese Government on IPR protection 
has always been firm and consistent. China believe s that China's IPR protection will be continuously 
improved through its unremitting efforts. As to the m easures taken by the Chine se Government in this 
respect, they have already been detailed in Chin a's annual white papers on IPR protection which are 
publically available. They therefor e are not to be repeated here.  
WTO Secretariat's Report, page 64, para. 157  The Report states that the last revision of the Patent Law was completed in 2008 and the revised 
version entered into effect on 1 October 2009.  The revised Patent Law has introduced the 
requirement of a confidentiality examination (Artic le 20) for inventions made in China, before a 
patent application in a foreign country is allowed. 
Question 140  
Could China clarify the concept of "invention made in China" and the possible grounds for a 
notification of secrecy by the Chinese Authoriti es, in particular the concept of "other vital 
interests of the State" than security, as referred to in Article 4?  
Answer 
As stipulated in Article 8 of the Regulations for Implementation of the Patent Law , inventions made in 
China refer to those inventions which have the substantive content of their technical solutions 
completed within China. 
Moreover, the Report states that the revised Pa tent Law explicitly allows parallel imports 
regarding patents.  
Question 141 Have the Chinese authorities assessed the potential impact parallel imports may have on certain 
products such as pharmaceuticals in terms of co unterfeiting, as well as for health and safety of 
consumers, product recall, lack of quality co ntrol in an extended supply chain, etc.?   
Answer 
As stipulated in Article 69 of the Patent Law , only the patented products launched on the Chinese or 
international market by the patentee or the pa tent licensee can be parallel imported to China. WT/TPR/M/230/Add.1 
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  Therefore, parallel imports can increase the suppl y of patented products on the Chinese market, 
without leading to such issues as counterfeiting, or affecting consumers' health and safety. 
WTO Secretariat's Report, page 65, para. 158  
According to the Report, the revised Patent Law provides that compulsory licenses could be 
granted in the event of, inter alia,  "national emergency", or "any extraordinary state of affairs 
occurs", or "in the public interest".  
Question 142  
Could China explain the scope of this provision, in particular the concept of "extraordinary 
state of affairs", and assess the compliance of th is provision of the revised Patent Law with 
Article 31 of the TRIPS Agreement?  
Answer 
The article is made in accordance with Article 31(b) of the TRIPS Agreement. Its scope of application 
and related concepts such as "extra ordinary state of affairs" are consistent with those in the TRIPS 
Agreement. 
Question 143  
Could China indicate the current status of the draft legislation related to the abuse of IPR and 
compulsory licensing?  
Answer 
China issued the Measures for Compulsory Licensing of Patent in 2003 and the Measures for 
Compulsory Licensing on Patent concerning Public Health Issues  in November 2005. At present, 
revision is underway on the above mentioned two Measures  in accordance with the Patent Law  
(2008) and the Regulations for Implementation of the Patent Law (2010). 
WTO Secretariat's Report, page 65, para. 159  
According to the Report, the revised Patent Law allows for a compulsory  licence if the patent 
owner, without justification, has failed to "suffi ciently" exploit patent rights for three years or 
uses the rights in a manner that eliminates or restricts competition.  
Question 144 
Could China explain the scope of this provision, in particular the concept of "insufficient 
exploitation of patent rights"?  
Answer 
According to Article 73 of the Regulations for Implementation of the Patent Law , insufficient 
exploitation of patent rights mean s that the patent owner or his licensee exploits the patent rights in 
the way or scope that fails to meet the domestic  demand for the patented products or patented 
approaches. 
Article 48 of the Patent Law states that: "[u]nder any of the following circumstances, the patent 
administrative department of the State Council m ay, upon the application of an eligible entity  WT/TPR/M/230/Add.1 
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  or individual, grant it or him a compulsory lic ense to exploit the patent for an invention or 
utility model:… (2) The patentee's act of exercisi ng the patent rights is determined as a 
monopolizing act and it is to eliminate or redu ce the adverse consequences of the said act on 
competition".  
Question 145  
Could China explain under which circumstances the patentee's act of exercising the patent 
rights is determined as a monopolizing act?  
Answer 
China's anti-monopoly authorities are drafting supporti ng rules related to the abuse of intellectual 
property rights. Such rules will clarify on the de tails of the application of Article 55 of the Anti 
Monopoly Law . 
Article 53 of the Patent Law states that: "[b]esides the circumstances as described in Article 48 
(2) and Article 50 of this Law in which a compulso ry license is granted, the exploitation of a 
compulsory license shall be implemented prim arily for supplying the domestic market.  
Question 146  
Could China clarify whether such compulsory license would not be limited to supply the 
domestic market?  
Answer 
Compulsory licensing stipulated in Article 48.2 of the Patent Law  is a remedy against anti-
competition actions. According to Article 31(k) of  the TRIPS Agreement, if compulsory licensing 
remedies anti-competition actions, members are not obliged to limit the implementation of the 
compulsory licensing mainly to the supply of the domestic market. WTO General Council adopted 
Protocol amending the TRIPS Agreement  in December 2005, which provided that a member can issue 
compulsory license that allows manufacture and expo rt of patented pharmaceutical products, in order 
to help other members that are incapable of or poor  at solving public health problems. Article 50 of 
the Patent Law  is to implement the provisions of the Protocol . Therefore, it is not limited to the 
supply to the domestic market. 
WTO Secretariat's Report, page 65, para. 160   
Referring to Article 26 of the revised Patent Law,  the Report states that patent applicants are 
required to disclose the direct and original sou rce of genetic resources when the completion of 
an invention depends upon such genetic resources.  
Question 147 
Could China further explain the relationship be tween the genetic resources and the patented 
invention? What are the criteria to determine that  the completion of an invention depends on a 
genetic resource?  WT/TPR/M/230/Add.1 
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  Answer 
According to Article 26 of the Regulations for Implementation of the Patent Law , the invention that is 
completed by resorting to the genetic resources refers to an invention that is completed by making use 
of the genetic functions of the genetic resources. 
Referring to Article 5 of the revised Patent Law,  the Report states that for inventions depending 
upon genetic resources the access or use of wh ich is against law and/or administrative 
regulations, the invention should not be granted patent rights.  
Question 148 Could China describe the legal consequences in case, after the grant of the patent, it is 
established that the patent applicant had provided an incorrect or incomplete information with 
regard to the source of genetic resources? Do th ese legal consequences include the revocation or 
invalidation of the patent?  
Answer 
According to Article 65 of the Regulations for Implementation of the Patent Law , after the grant of 
the patent, if the patent applicant had provided wro ng or incomplete information with regard to the 
source of genetic resources, it would not necessarily lead  to the invalidation of the patent. But if there 
is enough evidence that proves the genetic resources are obtained or utilized in a way in violation of the Chinese laws and administrative regulations, the pa tent will be declared invalid for this reason.  
WTO Secretariat's Report, page 65, para. 161   
The Report states that, during the period under review, patent applications and grants 
continued to increase rapidly.  
Question 149 
What measures has China taken to enable the State Intellectual Property Office (SIPO) to 
process an increasing number of applications?  
Answer 
China has taken such measures as increasing pate nt examiners, strengthening their training, 
conducting reform on the mechanism and mode of ex amination, and use of information technology 
etc to improve the efficiency and quality of the examination. 
(b) Trademarks  
WTO Secretariat's Report, page 66, para. 163   The Report states that the Trademark Law 1982 is being revised for the third time; the revision 
is to shorten the examination period  and enhance trademark protection.  
Question 150 
With a view to shortening the examination period and reducing delays in the registration 
process, does China envisage moving away from ex officio examination of relative grounds for  WT/TPR/M/230/Add.1 
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  refusal to a system of relative grounds e xamination upon request through opposition 
proceedings?  
Answer 
There is no such plan in the draft of the Trademark Law  being revised. 
Question 151  
Could China clarify what changes, if any, are contemplated as regards geographical indications 
as part of this revision?  
Answer 
Article 6 of the Regulations for the Implementation of the Trademark Law  concerning geographical 
indications is further clarified in the draft revision of the Trademark Law , i.e. where a geographic 
indication is to obtain the exclusive right of trademark, it should apply for registration as a 
certification mark, or a collective mark. 
Question 152  
Will the third revision of the Trademark Law incl ude provisions to improve the enforcement of 
trademark rights at the local level?  
Answer 
In the revision, the following measures against tr ademark right infringements will be taken into 
consideration: increasing the types of acts of tradem ark right infringements; strengthening the efforts 
of investigation and punishment of the administ rative authorities; adding provisions on heavier 
punishment on repeated trademark right infringements; and increasing the amount of statutory civil compensation to the infringed from 500,000 Yuan to 1 million Yuan. 
WTO Secretariat's Report, page 66, para. 164    The Report notes that, in 2008, for the first time, the number of trademarks reviewed was 
higher than the number of applications, reflecting faster registration. 
Question 153 What measures are envisaged by the Trademark Office (TMO) and the Trademark Review and 
Adjudication Board (TRAB) to prevent that a ba cklog of applications for review is created at 
the level of TRAB as a consequence of the high ly welcome reduction of the application backlog 
at TMO level now?  
Answer 
In recent years, the backlog of applications fo r review has been essentially reverted. In 2008 and 
2009, the Trademark Office reviewed 67,316 trad emark applications, and the backlog of re-
examinations for the rejections which accounted for 80 % of the total applications for review, has been 
completely resolved. The review is now in normal track. The period for re-examination on trademark 
disputes, trademark registration disputes, and cancellati ons is also greatly reduced. It is likely that the 
goal will be accomplished ahead of schedule that th e review and examination be completed within 
two years time.  WT/TPR/M/230/Add.1 
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  WTO Secretariat's Report, page 66, para. 165     
The Report states that parallel imports are still not addressed in the legislation on trademarks, 
and it is not clear to the Secretariat wh ether they are prohibited or allowed.  
Question 154 Could Chinese Authorities clarify how they intend to address the issue of parallel imports in the 
revision of the Trademark Law?  
Answer 
Parallel import is not included in the revision. 
(c) Copyrights and related rights  
WTO Secretariat's Report, page 62, para. 152    
The Reports states that China is prep aring to revise the Copyright Law.  
Question 155 Does China plan to introduce in the revis ed Copyright Law broadcasting and public 
performance rights for sound record ings' producers and performers?  
Answer According to the Decision adopted at the 13
th Session of the Standing Committee of the 11th National 
People's Congress on 26 February 2010, the Copyright Law is revised as follows.  
Firstly, Article 4 is revised as that "Copyright owne rs, in exercising their copyright, shall not violate 
the Constitution or laws or infringe upon the public  interests. The publication and dissemination of 
works shall be subject to the administration and supervision of the State."  
Secondly, a provision is added in Article 26 of the revised Copyright Law  that "In case of pledge of 
copyright, the pledger and the pledgee shall register the pledge with the copyright administration 
under the State Council."  
For details, please see http://www.gov.cn/flf g/2010-02/26/content_1544458.htm.  
WTO Secretariat's Report, page 66, para. 166 
According to the Report, the National Copyright Administration of China under the State 
Council administers copyright on a national sca le. When it comes to the enforcement of 
copyright and related rights, including on th e internet, it appears that several different 
ministries and agencies are competent for some  part of the enforcement action (e.g. 
investigation, seizure, power to cut off infringing websites, etc.).  
Question 156 Could China clarify the division of work between these different ministries and agencies?   WT/TPR/M/230/Add.1 
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  Answer 
According to Article 7 of the current Copyright Law , the copyright administration department under 
the State Council shall be responsible for the nationwide administration of copyright. The copyright administration department of the people's gove rnment of each province, autonomous region and 
municipality directly under the Central Government shall be responsible for the administration of 
copyright in its respective administrative area. 
The copyright law-enforcement functions of diffe rent departments mentioned in the question are 
defined in the following laws and re gulations: firstly, Article 48 of the  Copyright Law , see 
http://www.gov.cn/flfg/2010-02/26/content_1544458.htm; secondly, Article 37 of the Rules of 
Implementation of the Copyright Law , see http://www.gov.cn/zwgk/2005-06/02/content_3564.htm; 
thirdly, Article 24 of the Rules on the Protection of Computer Software , see 
http://www.gov.cn/zwgk/2005-06/ 03/content _4038.htm; fourthly, Article 39 of Collective 
Management of Copyright Regulations , see http://www.gov.cn/zwgk/2005-05/23/content_270.htm; 
and fifthly, Article 18 of Regulation on the Protection of the Right to Network Dissemination of 
Information , see http://www.gov.cn/zwgk/2006- 05/29/content_294000.htm. 
WTO Secretariat's Report, page 66, para. 167  The Reports states that protection is granted und er the Copyright Law, its Implementing Rules 
and accompanying regulations. Article 43 of the Copyright Law of 2001 provides that an equitable remuneration has to be paid to the au thors for the broadcasting of their works. Tariff 
rates for such remuneration were published in November 2009.  
Question 157 
Could China confirm that these tariff rates have a retrospective effect with regard to the period 
between 2001 and 2009?  
Answer 
According to the principle of non-retroactivity, the ta riff rates are not applicable to cases prior to the 
entering into force in November 2009 of relevant re muneration payment rule stipulating such rates. 
For remuneration payment provisions stipulated in the Copyright Law , before the entering into force 
in November 2009 of relevant remuneration payment ru le stipulating the tariff rates, regulations and 
rules prevailing at that time shall govern.  
(d) Geographical indications  
WTO Secretariat's Report, page 67, para. 169   The Reports states that, apparently, a law on geographical indication is to be issued in 2010.  
Question 158 
Could China provide more information about the cont ent of such legislation as well as the steps 
to be taken until its adoption?  
Answer 
There is no timetable for legislation on geographical indications. WT/TPR/M/230/Add.1 
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  (e) Other IPRs  
WTO Secretariat's Report, page 68, para. 176  The Report states that, according to the Implem entation of the Law of Drug Control, China 
protects test data and other data that are self-obtained, undisclosed, and submitted by 
manufacturers or sellers to obtain an approval  for manufacturing or selling a drug that 
contains new chemical entities.  
The regulatory framework provides for six mark eting authorisation categories. Depending on 
the marketing authorisation category, the type and extent of information to be submitted to the 
Regulatory Authority varies. Drugs first market ed outside China are normally placed in a 
category which allows generic products to be reg istered with only a limited data set, which can 
include literature instead of test information, i. e. less comprehensive data which are often in the 
public domain, with the public domain often interpreted in a broad way including data 
provided by third parties for market approval.  
Question 159 Does China intend to review the six registratio n categories to ensure non-discrimination and 
create an environment in line with the spirit of the Chinese legal provision on data protection?  
Answer 
Currently, there is no consensus internationally on the definition of new chemical entities, and the 
approaches for protection of undisclosed data vary from country to country. TRIPS Agreement provides for general protection obligations, at the same time it also leaves room for individual 
member in their implementation. The approaches of members are all established on the basis of 
TRIPS Agreement while taking nati onal conditions into full consider ation. China's definition of new 
chemical entities and the approach for protection of u ndisclosed data are in line with the views of the 
World Health Organization (WHO) and consistent w ith the general rules of the TRIPS Agreement. 
At present, relevant Chinese authorities take th e definition of new drugs  and drug registration 
classification as key issues of research so as to fu rther standardize drug registration administration and 
realize scientific supervision. 
The Report, however, does not refer to the regula tory framework with regard to data protection 
for agricultural chemical products.  
Question 160 Could the Chinese Authorities explain how they  comply with Article 39(3) of the TRIPS 
Agreement with regard to data protection for agrochemicals?  
Answer 
China attaches great importance to data pr otection of registered agrochemicals. The Regulations on 
Administration of Agricultural Chemicals  in Article 10  provides for the protection of undisclosed data 
in agrochemicals registration. Also, Article 47 of the Regulations and Article 17 of the Measures for 
Implementation of the Regulations on Ad ministration of Agricultural Chemicals  provide for detailed 
confidentiality requirements for the working staff in the register and other staff related with 
administrative or criminal punishment clarified for disclosure of the protected data. These provisions  WT/TPR/M/230/Add.1 
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  have provided protection to the undisclosed data to  the extent possible and are consistent with 
Article 39(3) of the TRIPS Agreement.  
IV. T RADE POLICIES BY SECTOR  
(3) E NERGY  
WTO Secretariat's report, page 76, para. 36  
The Report states that there is no comprehensi ve law and no real regulatory framework for the 
energy sector and that the legislative framewor k continues to be provided by regulations and 
administrative documents rather than by laws. In 2006, the Authorities started drafting an 
energy law, to regulate the oil, electrici ty, coal, and natural gas sub-sectors.  
Question 164 
Which are the government regulatory goals as for markets access, private investment and 
private initiative in such law?  
Answer 
The objectives of government regulation which ar e under consideration in the drafting of the Energy 
Law are to promote energy development, optimize ener gy structure, enhance energy development and 
utilization level and efficiency, safeguard energy security, and realize all-round, coordinated and 
sustainable development of China's economy and societ y. On the basis of giving full play to market 
mechanism, the government shall improve the m acro adjustment over energy sector, establish and 
improve a unified, open, competitive and orderly energy market system, and guide and regulate 
subjects of various economic owners hips to engage in energy development and utilization activities in 
accordance with laws and regulations. 
Question 165  
Does China foresee a tendering system that will improve competitiveness among Chinese and 
foreign operators and spur foreign investment? 
WTO Secretariat's report, page 76, para. 37-40  As the report states, China has been relaxing  its investment regime in the energy sector, 
although the sector remains state-dominated.  
Question 166 Could China list foreign investors in the energy sector and indicate energy sectors with highest 
concentration of foreign investment?  
Regarding distribution for petrochemicals, while the market officially has been opened to 
foreign participation, however de facto European  players have been unable to obtain wholesale 
licences. The conditions set in the 2006 Measures create a vicious circle making any application 
for licenses dependant on the domestic incumbents , who may have no interest in increasing the 
number of competitors on the market. 
In paragraph 37, the report states that a lack of access to stable crude oil supply remains a 
major problem; however, there is also a proble m regarding the access to refined oil products 
not only crude oil.   WT/TPR/M/230/Add.1 
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  Question 167  
How does China intend to ensure the implementation of GATS Art. 8.2 in the situation where 
wholesalers and retailers are dependant on the incu mbents, in particular as small refineries are 
not allowed to sell to anyone but the incumbents?  
Regarding paragraph 40 which discusses pricing in  the energy sector, it should be pointed out, 
that there seem to be problems with the application of Chinese national legislation in retail of 
petrochemicals, as regards the price by which the incumbent wholesalers sell petrochemicals to non-affiliated retailers creating a situation where wholesale price is higher than the regulated 
retail price can be.  
Question 168 
Will China look into the matter to ensure that the companies with monopolistic powers do not 
abuse their market power in order to  put competitors out of the market? 
China's report, page 12, para. 38 China notes that "pushing forward energy-saving  and emission reduction and promoting clean 
production and green consumption have always b een important elements of work of the Chinese 
Government to accelerate the transformation of the pattern of economic development".  
The EU would like to draw the attention of the government of China to the fact that European 
companies operating in the renewable energy secto r in China have consistently voiced strong 
concerns regarding onshore wind base bidding. Since 2005, none of the foreign brands has won any Chinese concession/wind base projects. Foreig n brands' price for initial turbine costs 
in RMB/kW terms may arguably be higher than the domestic ones, however it is generally 
competitive if considering the Total Cost of Ownership (incl. quality, reliability, cost of 
energy over the project lifetime) as well as its high tech features. 
Question 169 Could China comment on this? 
Answer The five sessions of wind power concession bidding s covered a total capacity of 3.40 million KW, 
which only accounted for 15% of the national total. The failure of foreign-fu nded enterprises to win 
the concession and wind base projects was not because of Chinese government's differentiated 
treatment towards domestic and foreign-funded ente rprises. It was a result of fair competition.  
Firstly, the product price and after-sales servic e of foreign-funded enterprises are obviously 
disadvantageous in the competition. By far, Ch inese domestic wind power equipment manufacturers 
have already acquired a relatively high R&D and ma nufacturing capacity. While their products could 
satisfy the demands of Chinese users in terms of quality and production capacity, their prices are 
generally over 20% lower than those of foreign-fu nded enterprises. Besides,  local enterprises have 
natural advantages in construction of after-sales service system, and their response is quick, and 
maintenance cost is lower than the foreign-funded enterprises.  
Secondly, compared with the latest demand of dom estic users, the single-unit capacity of foreign 
equipment is too small. Based on the demand of domestic wind power investors, domestic manufacturers can arrange mass production of turbines with electrical power output ranging from  WT/TPR/M/230/Add.1 
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  1.5 MW to 3 MW, and 2 MW has become the mainstream model. However, some European 
enterprises are still promoting their small KW-level  turbine units in China. Therefore they cannot 
compete with domestic manufacturers.  
Nevertheless, many wind power bases in China ha ve purchased foreign equipment. Statistics show 
that in 2009, wholly foreign-fu nded enterprises and joint ventures have taken 13.3% of the newly-
added wind power market in China, bringing their accumulative market share up to 26%. 
WTO Secretariat's report, page 76, para. 35  
More generally, the EU is concerned about the cur rent investment climate in China, in the field 
of green energies, inter alia , with respect to the wind turbines ma rket. An illustration of this is 
the new policy on "Entry Standards for Wind Power Equipment Manufacturing Industry" 
prepared by MIIT.  
Question 170 
Could China explicit its position with respect to  foreign investment in the field of renewable 
energies, particularly in link with (i) foreign companies' intellectual property and (ii) their 
access to public procurement at national leve l, regional level or in procurement markets 
launched by State-owned companies?  
The Energy section of the Secretariat's report only  describes elements related to fossil fuels, 
leaving out significant developments in renewab le and nuclear energies which have occurred in 
China.  
Question 171 
Could China develop elements of the policy pursued  in these two fields with regard to trade and 
investment?  
WTO Secretariat's report, page 8, para. 22  
The report notes that "[a]s the shrinking ext ernal demand made China's surplus production 
capacities even prominent, the Chinese Governme nt implemented more strictly policies on 
access of production capacities already in excess to restrict th eir redundant development, and 
made greater efforts to close do wn production capacities with high energy consumption, serious 
environmental pollution or backward technology"  
Although overcapacity is a widely recognised problem, which we agree needs to be addressed, 
recent initiatives to control this problem have caused serious concerns. The draft proposal for 
'Entry standards for wind power equipment manufacturing industry' is a good example of a well intentioned initiative, but which would cau se devastating effects on foreign industry by 
excluding them from the market, irrespective of their competitiveness and advanced technology 
expertise.  
Question 172 
Has China assessed the potential consequences of these initiatives to forei gn companies? If so, 
what was the outcome of such assessment? WT/TPR/M/230/Add.1 
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  Answer 
The Access Criteria of Wind Power Equipment Manufacturing Industry  (the  Access Criteria ) is 
supposed to promote the healthy development of the wind power equipment industry, prevent the 
blind expansion of the manufacturing capacity, and maintain the development order of the industry. 
At present, the draft  Access Criteria  has been published on the website of Ministry of Industry and 
Information Technology for public comments. The Access Criteria  specifies technical requirements 
for the establishment of manufacturing enterprises, t echnical equipment, R&D and testing, technology 
advancement, energy saving and environment protec tion, and safe production, and does not touch up 
such issues as intellectual property rights, government procurement or product market.  
China's report, page 12, para. 39  
According to China, "from 2006 to 2009, China's energy consumption per unit of GDP 
decreased by 14.38%. According to China's 11th five-year plan, China's energy consumption per unit of GDP should decrease by 20% by the end of the 5-year period, i.e. by the end of 2010.   
Question 173 Could China provider any insights regarding existing and planned measures that the 
Government of China intends to deploy in 2010  to reach its energy-intensity objective?   
Answer 
China's energy consumption per unit of GDP h as decreased by 14.38% accumulatively since 2006. 
However, there is still gap to achieve the goal of 20% decrease by the end of "the Eleventh Five-Year 
Plan". At present, China is adopting the following measures to strengthen ener gy saving, consumption 
reduction, emission reduction and pollution treatme nt. The first is to strengthen the work of 
eliminating outdated production capacity. The second is to conduct special inspections over the 
implementation of energy consumption limits. The third is to impose strict control on new projects 
with high energy consumption and high pollution a nd of surplus capacity and strengthen the energy 
saving appraisal and examination of industrial fixe d assets investment projects. The fourth is to 
promote the key industries and key enterprises to meet the set energy efficiency standards. The fifth is 
to strengthen technical reconstruction and inn ovation for energy saving and emission reduction 
purposes. The sixth is to improve policies and me asures favourable for energy saving and emission 
reduction. The seventh is to set up industrial energy saving and emission reduction monitoring and 
alerting system and formulate emergency response plan s. The eighth is to strengthen the publicity on 
industrial energy saving, consumption reducti on, emission reduction and pollution treatment. 
China's report, page 13, para. 44  
China notes that the "administration on energy and environment was strengthened".  
Question 174 Could China describe the actual reforms that underpin this statement, and how these reforms 
constitute a strengthening of the administration on energy compared to the previous situation?  
Answer In the  restructuring of the State Council in 2008, regulation of the energy sector is strengthened by 
creation of the National Bureau of Energy, which in corporated the energy sector regulatory functions 
of the National Development and Reform Commissi on (NDRC), the responsibilities of the Office of 
the National Energy Leading Group and the nuclear  power sector regulatory functions of the 
Commission of Science, Technology and Industr y for National Defence (COSTIND). The National  WT/TPR/M/230/Add.1 
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  Bureau of Energy is under the administration of NDRC. Also, the Ministry of Environmental 
Protection was created with the main responsibiliti es of formulating and implementing environmental 
protection programs, policies and standards, superv ising and administering environmental pollution 
prevention and treatment, and coordinating over the resolution of major environmental issues. The 
former State Administration of Environmental Protection ceased to exist. 
(4) M ANUFACTURING  
WTO Secretariat's Report, page 78, para.45  
Reference is made to the direct intervention  measures undertaken by the Government to 
"guide" resources into certain sectors of the ec onomy, particularly manufacturing. In the 
report by China, China explains that some of the measures put in place to respond to the 
economic crisis have short-term ambitions, wh ereas others are geared for the longer term.  
Question 175 In view of this, how does China foresee the future application of the industrial revitalization 
plans for the ten sectors that were issued in early 2009? Could China further specify which measures are to be considered long- or short-term ? Is China planning any exit strategy for the 
measures put in place for the short term?  
Answer 
Over the past two years, faced with serious challeng es of the international financial crises, the Chinese 
Government has taken domestic de mand expansion as the fundamental point to maintain stable and 
relatively fast economic growth. The stimulus package staged, including the 10 industrial revitalization plans, reflects both the short-term target of addressing the economic downturn and the 
long-term goal of promoting the transforma tion of the economic development pattern. 
Aside from adjustments of the VAT rebate policy on export of certain products, tax policies China 
adopted under the industrial revitalization plans fo r ten sectors are mainly the purchase tax reduction 
by half, or 5%, for passenger cars with displace ment at and below 1.6 liters during the period from 
20 January to 31 December 2009. In 2010, the pur chase tax on these cars is adjusted backward to 
7.5% from 5%, which is still lower than the normal rate of 10% and will be  valid through the year. 
Tax rebate on exports is an internationally prev ailing practice. China adjusted the value-added tax 
rebate rates in the fight against global financia l crisis because enterprises have suffered great 
difficulties with the shock of the crisis and have  requested strongly for su ch adjustments. China 
maintains that since the adjustments made to th e tax rebate rates on exports strictly follow the 
principle that the rebate rate be no higher than th e rate levied, they are not inconsistent with WTO 
rules. The general direction of the VAT rebate po licy of China is to achieve policy stability and 
continuity on the basis of continuously improving tax collection and administration. 
Financial supports provided under th e industrial revitalization plans for ten sectors are mainly those to 
promote direct consumption, including subsidi es for home appliances going to the countryside, 
automobiles and motorbikes to the countryside, a nd "old for new" of household appliances. Whether 
and when these specific programs will terminate has not been decided, however, in general, as an 
important means to transform the economic de velopment pattern, domestic demand expansion, 
especially consumer demand expans ion, will be a mid-term or even long-term policy of China.  
The Secretariat's report briefly refers to suppo rt to industry and to its non-discriminatory 
nature, but it does not provide any details.  WT/TPR/M/230/Add.1 
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  Question 176 
Could China confirm whether detailed informat ion concerning Chinese subsidies is made 
publicly available in a transparent fashion (i.e. subsidies scoreboard)?  
Answer 
China has gradually established an effective wo rking mechanism on notification to WTO of its 
subsidies and its further improvement. The subsidy notifications that China has made and will make 
to WTO and the further improvements to be made in  this respect will facilitate the availability of 
China's subsidies to other WTO members in a more open and transparent manner.  
WTO Secretariat's Report, page 78, para. 42 
Question 177 
Has the Chinese government any intention to gradua lly reduce import tariffs on foreign cars?  
Answer 
China's commitments upon its accession to WTO on reduc tion of automobile tariffs have already been 
fulfilled. There is no plan on further reduction of automobile tariffs in the near future. 
China's report, page 8, para. 21-23  
We applaud China's efforts to close outdated, in efficient and/or polluting steelmaking capacity. 
Given its global influence, China's pursuit of the restructuring of its steel industry could, if successful, have a significant and long-lasting po sitive impact on the effective functioning of 
global steel markets.  In 2009, backward faciliti es with total production capacity of 16.91 million 
tons in steel making industry and 21.13 million to ns in iron-smelting industry were eliminated.  
Question 178 
Could China provide information on the extent to which this has been a net reduction of 
capacities or a modernisation of capacities?  
Answer 
In 2009, 16.91 million tons of outdated steel-maki ng capacity and 21.13 million tons of outdated iron 
smelting capacity were eliminated. Due to unbala nced development of different regions, local 
governments have adopted different practices in th e elimination of outdated capacity. Some regions 
adopt the measures of complete elimination (close down) against outdated capacity incompatible with 
the industrial policy, while others eliminate out dated capacity through technical reconstruction. 
Regarding the elimination of outdated capacity, the central government sticks to the principle of 
equivalent replacement or reduced replaceme nt of outdated capacity with new capacity.  
We note with interest the importance China atta ches to industrial restructuring. It is in this 
context that assistance to small and medium-sized  enterprises, identified as a key element of 
China's stimulus package, stands out. While the difficulties faced by such enterprises are 
acknowledged, such assistance may act to ob viate the more general capacity reductions 
envisaged by the overall iron and steel policy.  WT/TPR/M/230/Add.1 
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  Question 179 
How will China reconcile the potentially competing goals of reducing and/or eliminating 
backward production capacities while at the same  time assisting such enterprises to cushion 
those hardest hit by global developments?  
Answer The relatively fast growth of the steel production cap acity in recent years was primarily the result of 
the boost of the domestic market demand. Since 2004,  total capacity control, elimination of outdated 
production capacity and industrial restructuring have always been the basic principles of the China's steel industry policy. Even against the background of  international financial crisis, the restructuring 
plan of the steel industry adopted by China has taken as its priority total capacity control and 
elimination of outdated production capacity. Re duction and elimination of outdated production 
capacity will bring China's steel industry, including small and medium sized enterprises to an efficient 
and environmentally friendly path, thus meeting the development needs against the background of 
globalization. 
(5) S
ERVICES  
(ii) Financial services  
(a) Banking  
WTO Secretariat's report, pages 81-82, para. 56 and 58  China had a WTO commitment to eliminate, within  five years after accession, any existing non-
prudential measures restricting ownership, operatio n, and juridical form of foreign financial 
institutions, including internal branching and licences. According to the Secretariat report, no 
single foreign financial institution may own more than 20% of the equity of a Chinese financial 
institution. 
Question 180 Considering that China has not scheduled limit ations on foreign ownership, when is China 
planning to fully implement its WTO commitm ents and permit full foreign ownership of 
Chinese banks?  
Answer 
According to China's Services Schedule, qualified foreign financial institu tions are allowed to 
establish wholly foreign-owned banks, including su bsidiaries and branches. However, China did not 
make commitments on the acquisition of existing dom estic banks by foreign financial institutions. 
Nevertheless, China allows foreign investors to acquire equities of Chinese-funded banks up to a 
certain level on the voluntary basis. According to the Measures on Administration of Equity 
Investment of Overseas Financial Instituti ons in Chinese-funded Financial Institutions , the percentage 
of equity investment of a single overseas financia l institution in a Chinese-funded financial institution 
may not exceed 20%. 
Furthermore, China's banking market is still under-de veloped. With the intern ational financial crisis 
not being out of the scene, we have every reason to  be cautious in further liberalizing China's banking 
market. On the other hand, such measure is within  the meaning of the "prudential measures" provided 
for in the Annex on Financial Services under the GATS, the implementation of which is for the 
purpose of the protection of investors, depositors and ensuring the integrity and stability of the 
financial system. WT/TPR/M/230/Add.1 
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  Question 181  
When are Chinese Authorities going to allow foreign banks to establish fund management 
companies? Once major domestic ba nks have been granted licenses? 
Answer 
Currently, some commercial banks are allowed to establish fund management companies on a pilot 
basis. The financial regulatory authorities still need ti me to evaluate the result of the experiment and 
the current market situation before deciding on what is the next step for the further liberalization of 
this business. 
It would theoretically be possible for a foreign bank to buy 100% of a city commercial bank. 
But it is uncertain, whether an acquired bank would be classified as domestic or foreign.  
Question 182 
According to China's foreign investment laws  and regulations, a Chinese bank with over 25% 
foreign investment will be classified as a foreign-invested bank. Why does China still hold separate regulatory regimes for Chinese incorporated    entities subject to the same prudential 
rules? 
Answer 
Many countries, including China, enact separate re gulatory rules for foreign-invested banks. The 
reasons for China to adopt su ch approach are as follows. 
Firstly, under the WTO framework, foreign-invest ed banks must follow the conditions set out in 
China's services schedule in terms of the business  scope, market access limitations and national 
treatment limitations, which differen tiate them from the domestic banks.  
Secondly, we still need to implement different prudential measures to foreign-invested banks, 
especially branches of foreign banks, according to th e particular characteristics of the risks they are 
facing, in order to safeguard the interests of Chinese depositors and maintain the stability of the 
domestic financial system. 
However, even though China's regulatory measures for domestic and foreign-invested banks have 
certain differences, they are regulated on the same legal basis, namely the Law on Regulation of and 
Supervision over the Banking Industry  and the Law on Commercial Banks . The differences lie only in 
a few specific regulatory measures. At the same time, as branches and subsidiaries of foreign banks are different forms of establishment and face di fferent risks, China applies different regulatory 
measures to them according to international prac tices. For branches of foreign banks, China applies 
tailored prudential measures since they are not locally  incorporated juridical persons. For subsidiaries, 
the measures are the same as those applied to domestic banks. 
The report also states that branches of foreign banks are not allowed to issue credit cards. At the same 
time this issue generally relates to the current monopoly on electronic payments.  
Question 183  
Why is China Union Pay allowed to operate as a monopoly on electronic payments processing 
and how does China envisage opening the market to foreign operators in order to comply with 
its GATS commitments?  WT/TPR/M/230/Add.1 
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  Answer 
Regarding the issue of inter-bank clearing services fo r electronic payment, China believes the service 
is covered by "settlement and clearing services for fina ncial assets". This sub-sector is not included in 
China's services schedule. That means China has not made any co mmitment on this specific service. 
When China acceded to the WTO in 2001, there was no inter-bank clearing service for electronic 
payment provided by non-financial institution in China. And inter-bank clearing service for bank card 
payment is statutory responsibility of the People's Bank of China. Chinese government granted a franchise to China UNIONPAY to provide inter-bank clearing service for bank card as a non-financial 
institution. Therefore, at the time of accession, it was impossible for China to make a commitment to 
open up bank card clearing market for non-financial institutions to foreign investors. China will 
decide the next pace of market opening accord ing to the development of domestic market. 
Question 184  
How can this be considered compatible with its GATS commitments on data transfer and 
processing? 
Answer In our view, the above mentioned question only involves "settlement and clearing services for 
financial assets", which is not relevant to Ch ina's GATS commitments on data transfer and 
processing. 
(b) Insurance  
WTO Secretariat's Report, page 84 para. 64 and page 87, para. 80 The geographical expansion of foreign insurers is still hampered significantly by slow and 
unpredictable regional-level licensing processe s As can be seen from publicly available 
approved licences records, there exists an admini strative practice of accepting one application 
for a license for a single branch at a time , whereas Chinese insurers can apply for several 
licences simultaneously.  
Question 185 
As this is an issue that has been ongoing for so me time now, can China to clarify which steps it 
has taken to ensure equal treatment between do mestic and foreign insurers with regards to 
branch/sub-branch licensing and geographic expansion? 
Answer 
China Insurance Regulatory Commission (CIRC) appli es the same law, regulations and procedures to 
the establishment of new branches of domestic and foreign-invested insurance companies. With 
regard to the situation where Ch inese insurers can apply for multip le licences simultaneously, this 
only applies to the case where applications are submitte d to the regulatory body at the city level, in 
which case foreign companies are also entitled to submit multiple  licenses. This ensures equal 
treatment between foreign-invested in surance companies and domestic ones. 
Rules on Administration of Insurance Companies  stipulates specific requirements for the application 
and establishment procedures of branches, which ar e transparent, non-discriminatory and consistent 
with China's commitments. In r eality, since China's accession into the WTO, with the implementation WT/TPR/M/230/Add.1 
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  of China's commitments in the insurance sector and the further liberalization of the insurance market, 
the number of foreign-invested insurance compan ies and branches has been dramatically increased. 
Question 186 
Why are foreign companies only allowed to ente r the life insurance market via joint ventures 
(JVs)? 
Answer 
According to China's Services Schedule, foreign investors are required to set up joint-venture 
enterprises in order to enter into China's life insurance market and fo reign equity ownership shall be 
no more than 50%. This is the result of accession ne gotiation and China's current  policy is consistent 
with our commitments. 
Question 187  
When are the limits for foreign invested brok erage and fund management JVs going to be 
lifted? 
Answer 
1. With regard to the elimina tion of limitations on the business scope of foreign-invested 
insurance brokerage companies 
Except for brokerage services for large scale commerci al risks, international marine, aviation, and 
transport insurance, and reinsurance, China di d not make any other commitments on insurance 
brokerage services. After the end of the transitiona l period, China needs to conduct an assessment of 
the market situation of the insurance brokerage s ector and is not in a position to make further 
commitments at the current stage. 
2. With regard to allowing foreign-invested  securities companies to engage in brokerage 
business 
In China's WTO commitments, qualified foreign secu rities institutions and investment banks are 
allowed to establish joint-venture enterprises with  domestic securities institutions, with foreign 
minority ownership not exceeding 1/3, to engage in underwriting A shares and in underwriting and 
trading of B and H shares as well as government and corporate debts. However, securities brokerage 
service was not included in the above commitments. 
After accession to the WTO, China has fully impl emented the aforementioned commitments. Since 
December 2007, China Securities Regulatory Commission has also implemented a series of 
autonomous liberalization measures, for instance, qu alified joint-venture securities companies could 
progressively engage in new lines of business, such as A-share brokerage business, asset management 
and proprietary business.  
By the end of April 2010, establishment of 10 joint- venture securities institutions have been approved, 
among which 9 are still in operation. Upon approv al in May 2008, CLSA (formerly CESL) was 
allowed to engage in securities investment c onsulting as well as A-share brokerage business in 
Yangtze River delta area. 
China's securities market has the characteristic of an "emerging plus transforming" market. Against 
this background, China liberalizes the securities se ctor in the same way as other newly emerging  WT/TPR/M/230/Add.1 
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  economies opened their markets. Reform and opening- up are the basic strategy for the development of 
China's securities industry. China is willing to di scuss further market liberalization on a reciprocal 
basis with other WTO members in the market  access negotiations under the Doha Agenda. 
3. With regard to the elimination of limita tions on the foreign equity ownership in fund 
management companies 
According to china's WTO commitments, foreign services suppliers are permitted to establish joint-
ventures with foreign investment up to 33 per cent to conduct domestic fund management business. 
Within 3 years after China's accession, foreign e quity ownership could be increased to 49%. China 
has fully implemented the aforementioned commitments. 
By the end of April, 2010, there have been 34 joint-ventures institutions among China's 60 fund 
management institutions, more than half of the total. Moreover, among the 34 companies, 
16 companies' foreign equ ity ownership reached 49%. 
In order to realize good corporate governan ce, secure the checks and balances among the 
shareholders, avoid the creation of one dominant sh areholder and maintain the independence of the 
companies, it is appropriate for China to limit th e shares held by foreign shareholders in a joint-
venture fund management company to no more than  49% of the total. Furthermore, according to 
relevant regulations, even though a fund management company is wholly Chinese owned, the largest 
shareholder shall not have more than 49% of the to tal share. In this respect, foreign investors have 
enjoyed national treatment. We have no intention to change the policy. 
(d) Financial information  
WTO Secretariat's report, page 87, para. 82  
New provisions on the Administration of Provisi on of Financial Information Services in China 
by Foreign Institutions entered into force on  1 June 2009, which eased restrictions on the 
provision of financial information services by foreign institutions.  
Question 188 Could China confirm that financial informatio n service providers are subject to SCIO Decree 
No. 7 of 30 April 2009 and to this extent are not also subject to any additional authorisation 
procedures and registration procedures fo r the provision of the same services? 
Answer 
The State Council Information Office and other government agencies promulgated the Provisions on 
Administration of Provision of Financial Info rmation Services in China by Foreign Institutions  on 
30 April 2009, which applies to foreign institutions providing financial information services in China. 
Besides, as Article 28 of the GATS stipulates that "supply of a service" includes the production, 
distribution, marketing, sale and delivery of a servi ce, the production, distribution, marketing, sale and 
delivery of the financial information services provi ded by foreign institution s established in China, 
when fall under the administrative regime of othe r sectors, shall abide by the relevant laws and 
regulations of China. WT/TPR/M/230/Add.1 
Page 136  
 
  Question 189  
In particular could China confirm that financial information services are not at the same time 
subject to requirements under Article 7 of the Measures for the Administration of Internet 
information services (25.09.2000)? 
Answer Financial information services provided by foreign ins titutions established in China, when provided to 
consumers via internet, shall abide by the releva nt laws and regulations governing the internet. 
Question 190  
Should any additional requirements apply besides SCIO decree No 7, could China specific what 
additional authorisation and registration pro cedures apply to financial information service 
providers? 
Answer 
Foreign institutions provi ding financial information services shall abide by the Provisions on 
Administration of Provision of Financial Info rmation Services in China by Foreign Institutions . 
Besides, as Article 28 of the GATS stipulates that "supply of a service" includes the production, 
distribution, marketing, sale and delivery of a servi ce, the production, distribution, marketing, sale and 
delivery of the financial information services provi ded by foreign institution s established in China, 
when fall under the administrative regime of othe r sectors, shall abide by the relevant laws and 
regulations of China. For example, if a foreign in stitution wants to establish a financial information 
services enterprise in China, it shall follow the la ws and regulations regulating foreign-invested 
companies promulgated by the Ministry of Commerce and regulations and rules concerning enterprise 
registration by the State Administ ration of Industry and Commerce. 
(iii) Telecommunications   
WTO Secretariat's Report, page 88, para. 83  The Secretariat Report refers to China's profess ed objective to promote competition in the 
telecommunications sector. The EU would like to underline that the recent extension of the CCC 
requirements to a wide range of IT security technology products, as explained above, is 
perceived as a serious barrier to competition in this sector. 
Question 191 Could China explain how the new regulatory initia tives in the information security field, which 
de jure or de facto  impede market access for foreign opera tors, can be reconciled with the policy 
objective to promote competition in the telecommunications sector?  
Answer 
The purpose of China's CCC requirements for the 13 kinds of IT security t echnology products is to 
protect the security of information. China's CCC requi rements are equally applied to the domestic and 
imported products. China made a pub lic announcement in April 2009, which clearly defined that the 
scope of CCC requirement is only applied to pro ducts subject to government procurement. The 
standards of China's CCC requirements are based on  relevant internationa l ones. The requirements  WT/TPR/M/230/Add.1 
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  should not have negative impacts on the telecom opera tors, let alone impacts on the competition of the 
telecommunication sector. 
WTO Secretariat's Report, page 88, para. 86 
The EU appreciates that China is engaging "in dialogues (involving meetings for questions and 
answers) on telecommunications with the United States, the European Union, and Japan with a 
view to promoting transparency". 
However, the concrete process of implementi ng measures like CCC for specific IT security 
technology products and the related discussions as well as the Multi-Level Protection Scheme 
(MLPS), the OSCCA regulation or the Chinese Indi genous Innovation Scheme have raised some 
questions as to whether such dialogues always allo w the degree of transparency that is needed to 
meet economic operators' legitimate expectatio ns regarding a stable and predictable legal 
environment in which they can operate. Unanswered  questions such as regarding the scope of a 
regulation, the availability of the relevant legal texts on the operation of a mandatory certification scheme or, more basically, who is th e competent authority in charge have caused 
some uncertainties.  
China's Comments: 
China has been open and transparent in drafting th e CCC compulsory certification for the information 
security products. In 2007, China notified to th e WTO the draft rule on compulsory certification 
requirements for the 13 kinds of IT security t echnology products, provided sufficient time for 
comments and responded to the questions from releva nt stakeholders. Certification and Accreditation 
Administration of China (CNCA) also had di alogues and discussions with stakeholders. In 
April 2009, China made a public announcement to ad just the scope of the compulsory certification to 
be limited only to products subject  to government procurement. China also made clarifications several 
times on the adjustment in the WTO and other bilate ral meetings. If EU has further questions, China 
is willing to have discussions and consultations  through multilateral or bilateral channels. 
Question 192  
Could China please provide an update on prog ress made towards eliminating the redundancies 
between the CCC and the type-approval procedu res (radio license and network access license) 
for radio and telecommunications equipment managed by the MIIT? 
Answer 
The results of type-approval procedures can be directly accepted by CCC requirement. Therefore the 
problem in question no longer exists.  
WTO Secretariat's report, page 88, para. 88  The WTO Secretariat's report indicates that ther e are three basic service providers in the fixed 
and mobile market. The State remains the majority  owner of all basic telecom service providers.  
Question 193 China is invited to express its level of satisfacti on on the present development of competition in 
the basic services markets. WT/TPR/M/230/Add.1 
Page 138  
 
  Answer 
The restructuring of telecommunication service s uppliers in 2008 has effectively promoted the 
development of basic telecommunication market. After the restructuring, although the number of service suppliers was decreased, the competition has not  been reduced since all the three operators can 
provide fixed and mobile telecommunication services. Actually, the competition in the market is 
fiercer than before. Consumers benefit a lot from the decline of fees and charges. China is of the view 
that the present development in the basic telecom services market is going well.  
Question 194  
More particularly, could China share its views on  the reasons why there are no privately-owned 
operators active on the market? Can China explai n the reasoning of not granting to date new 
licenses to provide basic telecom services? 
Answer 
According to Article 10 of the Regulations on Telecommunications , in the case of application for 
providing basic telecom services, the operator shoul d be the company specifically engaged in basic 
telecom services, and the equity or share of the St ate in that company should not be less than 51%. 
Therefore, if one private enterprise intends to pr ovide basic telecom services, it should establish such 
a company with a State-owned company. Meanwhile, the requirement of share control by the State-
owned company should also be met. However, for va lue added telecom services, the market is open to 
private enterprises and there is no restriction in this respect. 
So far China has adopted a series of regulations and rules to promote and secure competition in the 
telecom market including those on market access, pricing, and inter-connection. Whether to issue new 
license for basic telecom services suppliers in the fu ture will depend on following factors such as 
national security, telecom network security, the sustainable use of telecom resources, environmental protection and the competition situation in the telecom market. 
Eight years after WTO accession, few foreign players can be seen to be operating in the telecom 
and information value-added services. There is still no  foreign-invested JV in China, despite the 
legislation introduced in 2001 and despite th e clear interest from foreign operators in 
participating in such JVs.  
Question 195 Could China explain the reasons for this? 
Answer 
China has made quite high level of commitments in  the telecom services sector during its accession to 
the WTO. As far as the government is concerned, the commitments made in the services schedule are 
for the purpose of promoting free trad e. No one can assure the expect ations of the government will be 
exactly in line with the decisions of the business community. China's policies on foreign investment 
are the same as before, so are its commitments on the telecom sector. Whether to invest in the market 
or not, it depends on various factors such as the mark et potential of the country, competition situations 
in the market and the company' s capability. In a word, it is deci ded by companies themselves.   WT/TPR/M/230/Add.1 
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  Comment to the WTO Secretariat  
The report indicates the respective market shar es of telecom service providers. However, it 
seems that the percentages are not correct as wh en summing them up it results in a percentage 
higher than 100.  
Question 196 
Could the Secretariat revise these percentag es and China provide the correct ones?  
Answer 
In October 2009, market shares in the fixed-tel ecom market, in terms of the number of subscribers 
and revenue, respectively, were: 64.5% and 69.9% for China Telecom, 35.5% and 30.1% for China 
Unicom, and the rest for China Mobile.  Similarly, in the mobile telecom market, the respective shares 
were 6.7% and 5.2% for China Telecom, 20.5% and 12.1% for China Unicom, and 72.8% and 82.7% 
for China Mobile.   
WTO Secretariat's report, page 90, para. 95    
The Secretariat's report is not very extensive on  the question of licensing and foreign market 
presence. In the 2008 report it was stated by the end 2007, China had received 34 applications 
for setting up foreign-funded tele com enterprises to provide value -added services.  Out of these 
34, 19 projects had been approved by the MII and granted the Examination Opinions on 
Foreign Investment in Telecommunications Serv ices Provision, with which they can apply for 
an Approval Certificate for Foreign-funded Ente rprises, a Telecom Operation Licence, and 
finish the registration process for foreign inv estment in telecommunication enterprises.  In 
addition, 14 foreign-invested enterprises had fo rmally applied for the Value-added Telecom 
Operation Licence; 11 were granted the licence, while the other three were waiting for 
approval.  
Question 197 Could China provide an updated account of the situation? 
Answer As of the end of 2008, there are 14 trans-provincial foreign invested telecommunication companies in 
China. All of the applications mentione d in the question have been approved.  
While the report regrettably does not go into deta il on the general issue of licensing of value-
added services, foreign participation proves to be  very limited in practice. According to our 
information more than 22.000 Value Added Service (VAS) licenses have been issued to domestic 
operators, but only 12 licenses have been issued  to Foreign Invested Enterprises (FIEs)/JVs.  
Question 198 
Could China explain the reasons why such a limited number of licences were attributed to 
FIEs? WT/TPR/M/230/Add.1 
Page 140  
 
  Answer 
China processes application for establishing foreig n-invested telecom enterprises according to its 
WTO commitments and relevant regulations such as Regulations on Telecommunications , 
Regulations on the Administration of Foreign Invested Telecommunication Enterprises . The licensing 
procedures are open and transparent.  The application will be approved as soon as it is consistent with 
the prescribed requirements.   
Question 199 
China has in the past stated that it has not received many applications for licences from FIEs, 
could China specify how many licences have been received in the meantime? 
Answer Up to now, the authority has granted 22 licenses for foreign-invested telecommunication companies.  
Authorities only permit FIEs to provide services listed in the VAS Catalogue that China agreed 
to within the WTO, rather than on the VAS cla ssification list used by domestic companies. The 
understanding of China's WTO commitment was that the WTO VAS catalogue would not be exhaustive. Further to the above, the reclassificati on of services from VAS to basic services is an 
additional cause for concern as it reduces the sc ope of theoretically permissible market access 
options. Applying for a VAS license is a long and unnecessarily arduous process and obtaining 
licenses has proved extremely challenging for forei gn companies. As a result, even if European 
ICT companies are among the largest investors in China today, foreign-service providers are 
still essentially excluded from China's basic and value-added telecom service markets.  
Question 200 
How do Chinese authorities assess this circumstance?  Answer 
Telecom is a technology-intensive industry featuring complex classifications. Members can make 
classification for their telecom sector based on its actual market situation and regulatory approach. 
China's regulatory authority processes all applica tions for providing value-added telecom services 
within the timeframe stipulated by the relevant regulations. Both domestic and foreign companies are 
subject equally to the same timeframe in line with  the national treatment principle. So far, the 
authority has issued operation licenses to all forei gn-funded enterprises within  the required timeframe. 
Question 201  
Does China plan to streamline the comp licated licensing procedures for VAS? 
Answer The licensing procedures for the value-added tel ecom services are open and transparent. These 
procedures are equally applied to domestic and forei gn companies, which is consistent with the nation 
treatment principal. We have no plan to revise these procedures. 
The EU takes note of the changes in the reg ulation governing foreign investment in the 
telecommunication sector as far as the minimu m registered capital requirement is concerned.  WT/TPR/M/230/Add.1 
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  Although reduced, the minimum capital requireme nt remains high. More problematically, the 
foreign equity restrictions for both basic and value added telecommunications remain in place 
and represent thus a deterrent to investing in this sector.  
Question 202 Could China clarify whether it intends a further reduction in the future and why such high 
capital requirements are being maintained?  
Answer 
The decision promulgated by the Stat e Council on September 2008 on amending Regulations on the 
Administration of Foreign Invested Telecommunications Enterprises  (State Council Decree No. 53) 
halved the minimum capital requirement on the b asic telecom operation of the foreign invested 
telecommunication enterprises. Currently, China does not  have any other plan to change the relevant 
regulations. 
Regulations on the Administration of Forei gn Invested Telecommunications Enterprises  sets 
minimum registered capital requirement for foreign i nvested telecom enterprises. Domestic services 
suppliers are subject to the same conditions as we ll, which is consistent with national treatment 
principle . The telecom sector is a capital-intensive industry featuring economy of scale. If the 
registered capital of telecom companies were too lo w, it would be inadequate to protect the interests 
of both investors and consumers. As we know, many WTO members have their own minimum registered capital requirements based on their natio nal conditions. The minimum capital requirement 
is WTO consistent as long as they are impl emented on the national treatment basis. 
Question 203  
What are China's intentions regarding lowering  the foreign equity participation requirement? 
Answer 
The current 49% and 50% foreign equity particip ation requirements for basic telecommunication and 
value-added telecommunication services respectivel y are the results of China accession negotiations. 
Lowering of these requirements is the subject of DDA services negotiations. There is no plan for 
China to lower the foreign equity participation requirement at present.  
Question 204  
What is the rationale behind the restrictions on VAS foreign ownership? 
Answer 
The requirement of foreign equity limitation on tel ecom sector is clearly defined by China's Service 
Schedule, which is part of China's accession ag reement negotiated between WTO members and China 
during the accession process. 
As regards retailing services via Internet (e-commerce ), China seems to have in the past applied 
a requirement for obtaining an Internet Content Provider license but in the TRM of November 2009, China responded that there was no requirement to have an ICP licence if the services were not a third party platform.  WT/TPR/M/230/Add.1 
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  Question 205 
In this regard, could China clarify whether companies that are setting up their own online 
trading platform and using this platform to  sell their products and services directly to 
customers online, do not need to apply for an ICP/value-added telecommunication services 
license? 
Answer 
According to the Article 4 of the Measures for Administration of In ternet Content Provision Service 
(State Council Decree No. 292), commercial internet information services are subject to licensing system and non-commercial internet information ser vices are subject to a record-filing system. No 
one can provide internet information services without  having obtained permission or fulfilled record-
filing procedures. 
Companies that set up their own online trading platform and use this platform to sell their products 
and services directly to customers online and provide information services without charge, should make record-filing according to the regulations but  do not need to apply for an ICP/value-added 
telecommunication services license. While companies set  up their online trading platform to provide 
commercial services such as information exchange and processing for the trading partners with 
charges, they shall apply the relevant ICP license. 
Question 206  
Could China also clarify that a company applying for the provision of distribution services over 
the internet would not have to establish a fo reign invested telecom enterprise either? 
Answer Please refer to the answer for question 205. 
(iv) Transport services   
(a) Air transport services   
WTO Secretariat's report, page 92, para. 106   The Secretariat's report states in page 100 that the only area currentl y closed to foreign 
participation in air transport is management of air traffic control systems. In page 106, the 
report notes that, according to the authorit ies, there are no examination or approval 
requirements for Chinese airlines to use foreign  computer reservation systems (CRS) and that 
agents of foreign airline companies must obta in approval from the CAAC before connecting to, 
or using foreign CRS to reserve tickets fo r customers, in accordance with the Provisional 
Administrative Measures on the Usage of Comp uter (Passenger) Reservation System by Foreign 
Air Transport Enterprises and their Sale Agents within the Territory of China. 
Question 207 Could China confirm whether CRS services are op en for foreign investment and clarify which 
legislation applies to such investments and services activities, including ticketing?  WT/TPR/M/230/Add.1 
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  Answer 
The CRS services committed in China's Services Sche dule are open to foreign services suppliers, so is 
the case in the existing FTA agreements. At present, Provisional Administrative Measures on the 
Usage of Computer (Passenger) Reservation Syst em by Foreign Air Transport Enterprises and their 
Sale Agents within China  is the rule for the CRS services. 
As regards examination and approval systems for Chinese airlines, EU understands that there 
are no licenses that the airlines need to obtain. 
Question 208 Could China clarify if there are any approvals, including for BSP ticketing that foreign CRS 
service providers need to obtain in order to pr ovide these services to Chinese airlines and the 
agents of Chinese airlines? 
Answer 
Currently, Chinese airlines are a llowed to use foreign CRS without any approval procedures. The 
sales agents of foreign airlines which directly use and connect with foreign CRS system should apply 
for approval from Civil Aviation Administration of  China (CAAC) according to the procedures in the 
Provisional Administrative Measures on the Usage of Computer (Passenger) Reservation System by 
Foreign Air Transport Enterprises and their Sale Agents within China.  
The rules for BSP in China are formulated by the members of China BSP Advisory Committee and 
approved by CAAC. The applications of CRS servi ces suppliers who wish to join China BSP system 
shall be processed according to the re levant rules and decisions of IATA. 
In this regard, we should recall that China is under the obligation according to its Protocol of 
Accession to provide information on licensing applications by both domestic and foreign 
suppliers. This is reflected in the title of secti on e) of the document, which reads "[f]oreign and 
domestic suppliers in sectors where specific comm itments have been undertaken indicating the 
state of play of licensing applications on sector and sub-sector levels (accepted, pending, rejected)". 
Question 209 
As regards agents of foreign airlines,  could China explain why there have  been  no applications 
processed (approved or rejected) in last years by CAAC and how this is compatible with obligations taken by China during its accession, in  particular as referred  to in Article 308 of 
China's Accession Protocol?  
Answer The licensing work on CRS for fo reign services suppliers has been carried out in accordance with 
China's WTO commitments and the Provisional Administrative Measures on the Usage of Computer 
(Passenger) Reservation System by Foreign Air Tr ansport Enterprises and their Sale Agents within 
China . Since 2003, CAAC has not received CRS applications from foreign airlines for their sales 
agents. WT/TPR/M/230/Add.1 
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  Question 210  
Could China clarify why under section e) of document S/C/W/309, circulated by China in 
October 2009 in the context of the TRM under section 18 of China's Protocol of Accession, there is no reference to 19 applications filed by  EU airlines in 2002 under Article 4 of the Provisional 
Administrative Measures on the Usage of Comp uter (Passenger) Reservation System by Chinese 
Air Transport Enterprises and their Sales Agents within the Territory of China , to which CAAC 
has not responded? 
Answer 
The duration of the licensing information about CRS  in S/C/W/309 Section e) is from October 2008 
to August 2009, which is clearly noted in the docum ent.  Scandinavian Airlines applied the licenses of 
using foreign CRS system for its 11 sales agents in  2002, but the application had not been approved 
due to lack of required information. Scandinavi an Airlines did not make further supplementary 
written explanation according to the relevant requireme nts or submit any reapplication for its agents. 
The EU notes that according to the data pr ovided by China in this document, there are 
0 pending applications under either travel agency or CRS services. 
Question 211 
If the reason for the absence of any reference is th at the applications were filed in respect of 
Chinese, and not foreign, travel agents, could China provide this information? 
Answer 
Please refer to the answer for question 209. 
Question 212  
Could China clarify why the agents that were approved according to the Provisional 
Administrative Measures on the Usage of Comp uter (Passenger) Reservation System By Foreign 
Air Transport Enterprises and their Sale Agents within the Territory of China have not been 
allowed to issue tickets to service consumers ev en though the GATS annex on Air Transport 
clearly defines CRS services of consisting of booking and ticketing?  
Answer 
China's commitments regarding CRS in its Serv ices Schedule are as follow. Foreign Computer 
Reservation System, when having agreements with Chinese aviation enterprises and Chinese Computer Reservation System, may provide servi ces to Chinese aviation en terprises and Chinese 
aviation agents by connecting with Chinese computer reservation system. China did not make commitment on direct ticket sale to consumer via CRS. 
Question 213  
Could China clarify whether CRS service provid ers need any specific approval to operate in 
China, in addition to the approval for the Chin ese airlines and airline agents mentioned in the 
Secretariat's report?   WT/TPR/M/230/Add.1 
 Page 145 
 
 
  Answer 
Currently, Chinese airlines are a llowed to use foreign CRS without any approval procedures. The 
sales agents of foreign airlines which directly use and connect with foreign CRS system should apply 
for approval from CAAC. Foreign CRS services suppliers may provide services by Model 1, while services through Model 3 are not allowed at presen t. For detailed information, please refer to the 
Provisional Administrative Measures on the Usage of Computer (Passenger) Reservation System by 
Foreign Air Transport Enterprises and their Sale Agents within China . 
Question 214 
Could China please clarify the legal basis or any other reason preventing foreign CRS service 
providers to issue tickets in China?  
Answer 
Foreign Computer Reservation System, when having  agreements with Chinese aviation enterprises 
and Chinese Computer Reservation System, may pr ovide services to Chinese aviation enterprises and 
Chinese aviation agencies by connecting with Chin ese Computer Reservation System. This is the 
commitment written in China's Service Schedule.   
The EU notes that according to the data provi ded by China in document S/C/W/309, there are 
0 pending applications under CRS services. The EU understands that, if there was a specific 
licensing or approval requirement for foreign CRS suppliers, any application for a license 
would appear in this list.  
Question 215 Could China confirm if this understanding is correct? 
Answer 
Please refer to the answers for questions 209 and 210. 
China has promised in its TRM review for 7 year s to elaborate legislation for CRS services that 
would clarify the conditions for market access for foreign CRS service providers.  
Question 216 
Could China indicate a clear timetable of the elaboration of this legislation? Answer 
The relevant authority has been working on it. We  can not specify a timetable. CAAC believes that 
the amendment possibly would be completed by the end of this year.   
Maritime transport 
WTO Secretariat's report, page 94 para. 115-116   
The report states that there are "no financial s ubsidies […] for domestic shipping companies". 
As part of the Chinese stimulus plan for 2009  – 2011, it is understood that Chinese banks are 
encouraged to provide credit to shipping companies,  especially in order to finance ship building.  WT/TPR/M/230/Add.1 
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  Question 217 
Does the encouragement include any government incen tives to financial institutions or are these 
loans purely given on regular market conditions? 
Question 218  
Are there any distinctions made between domest ic and international shipping companies and 
are loans only provided for foreign compan ies ordering ships at Chinese shipyards? 
Question 219 Could China provide an overview of how mu ch Chinese (government-owned or government-
controlled) banks have increased their lending vis-à-vis  the shipping sector following this 
encouragement including a breakdown of loans granted to domestic companies and foreign 
companies?  
Answer 
The supporting measures under the restructuring and rejuvenation program for shipbuilding industry, 
which is part of the overall stimulus package for the international financial crisis, are those to address 
specific issues brought about by the international fi nancial crises, such as the increasing risk of ship 
delivery. Such measures mainly refer to guiding  comments of Chinese government that it hopes that 
banks will ensure that the working capital loans pr omised under the signed contracts will be put in 
place on schedule, and also that banks will consid er providing loan extension in cases where ship 
owners defer ship delivery. China believes that  such guiding comments do not constitute subsidies 
defined by WTO.  
It is understood that as part of the Chinese govern ment's response to the economic crisis special 
favourable conditions are offered to domestic shipping companies engaged in inland maritime 
transport, for instance through the China EXIM Bank.  
Question 220 Have any measures been taken in order to prev ent cross-subsidies between different parts of a 
company, when it is involved in both inland and international shipping? 
Answer 
China does not provide subsidy fo r domestic shipping companies, no matter whether the company 
provides internal or international shipping. Lo ans provided by Chinese banks to Chinese shipping 
companies are all commercial credits  based upon commercial principles. 
(v) Postal and courier services   
WTO Secretariat's report, pages 96-97, para. 127-130   
The new Postal Law was adopted on 24 April 2009 and entered into force on 1 October 2009. 
This Law regrettably closes the domestic ma rket for express delivery services to foreign 
enterprises that had in fact already been active  in the market for many years. It introduces a 
licensing system for express delivery operations by the State Postal Bureau. To date, it appears 
that while many domestic players have been issu ed with new licenses, foreign express delivery  WT/TPR/M/230/Add.1 
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  operators are experiencing delays in this pro cedure with no clear indication as to the 
requirements.  
Question 221 Could China clarify the requirements for the granting of such licenses? Will China ensure that 
licensing procedures are not unduly burdensome and administered in a transparent manner 
without discriminating against foreign operators? 
Answer 
The amended Post Law  provides that foreign investors shall not  invest in domestic express delivery 
for letters. This is in conformity with China' s accession commitments and will not affect foreign-
invested express delivery companies to provide inte rnational express delivery services of letters other 
than private letters or provide international and dom estic express delivery services of parcels. There is 
no new barrier to investment or trade. Foreign- invested express delivery companies doing business in 
China legally will continue to be protected by  Chinese law. The postal administration is accepting 
applications and issuing licenses for express deliv ery services including those by foreign investors. 
Licensing procedures for express delivery services are equal for both foreign and domestic investors. 
(vi) Tourism WTO Secretariat's report, page 97, para. 132-133  The number of foreign travel agencies working in China is still very low, and their scope of 
work is limited to domestic travel only.  
Question 222 Is there any plan to reduce the current requirements to open foreign travel agencies and 
operational obstacles in order to establish equa l opportunities for local and foreign investment? 
Answer 
The Regulations on Travel Agencies  implemented on 1 May 2009 greatly reduces the access 
thresholds of foreign-invested travel agencies on the minimum register capital, the restrictions on qualification of investors and the setting up of branch es. Except that foreign-invested travel agencies 
are not permitted to engage in the activities of Chinese travelling outbound, there is no other special 
restriction on the foreign-invested travel agencies. 
Question 223  
When will the pilot program for opening outb ound travel be implemen ted and what is the 
timetable to abolish the full monopoly of Ch inese Tour Operators in the outbound sector in 
favour of an equal treatment for foreign to ur operators engaged in outbound tourism? 
Answer 
The relevant measures of the pilot program for the opening of foreign tour operators to engage in 
outbound tourism is under discussion and formulati on and will be released to promote further 
liberalization in this area when market development matures. There is no timetable at present. Except 
for the Closer Economic Partnership Arrangement (CEPA) framework, no foreign tour operator has 
been approved to provide outbound tourism. WT/TPR/M/230/Add.1 
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  (vii) Other services  
WTO Secretariat's report, page 98, para. 135 Question 224 In the current context of amelioration of the legal framework in China, does China foresee any 
future amendments of the legislation for the establishment and practice of foreign firms, 
notably the possibility to hire Chinese-qua lified lawyers to practice Chinese law? 
Answer 
Like many other WTO members, China does not allo w foreign law firms to practice domestic law. 
Therefore, foreign law firms can not employ Chin ese registered lawyers. Ch ina has liberalized the 
legal services sector according to the accession commitments and has no plan for further liberalization 
of this sector at this stage. 
The Secretariat's report does not contain a summary  of the access problems foreign companies 
find when it comes to designing, building and operating transport infrastructures.  
Question 225 Could China elaborate on the restrictions in place?  
Answer 
China has implemented the accession commitments in  those services sectors related to the designing, 
building and operating transport infrastructures such as architectural services, engineering, urban 
planning, construction and related engineering services. Foreign companies can provide these services 
in China as China's committed. If foreign compan ies encounter specific difficulties, members may 
further put forward concrete issues. 
Regarding retail distribution services, curren t registration requirements are costly, as 
companies need to register a loca l entity for every opened shop. 
Question 226 Could China elaborate whether it intends to improve the current rules? 
Answer China does not require registration of a new loca l entity for every shop opened. When foreign 
investors open new shops, they can choose to establish  a branch or an independent subsidiary. There 
are foreign retail companies which have ope ned several shops under only one legal entity. 
China is one of the biggest and fastest growing construction market and very competitive in 
construction services, but almost closed to foreign suppliers. The share of foreign companies in 
the market is around 2% and their situation is worse than at the time of China's WTO 
accession. The problems derive from limited ma rket access and overly burdensome and de facto 
discriminatory qualification requirements. China's commitments under the GATS relating to construction and related engineering services limi t the scope of works that can be undertaken 
by wholly foreign-owned enterpri ses to four types of projects. In addition current high capital  WT/TPR/M/230/Add.1 
 Page 149 
 
 
  requirements put an unnecessary burden on compan ies and could be replaced by more market 
oriented instruments. 
Question 227 Does China intend to further open this sector to foreign participation as regards the types of 
projects open? 
Answer 
With regard to the question that foreign invested  construction companies are only allowed to conduct 
four types of projects, China has listed these reserv ations in the Schedule. Currently, China does not 
have a plan to further expand the types of projects. 
Question 228  
Is China considering relaxing the registered capi tal and net assets requirements and replacing 
them with alternative financial instruments, su ch as letters of guarantees, insurance bonds or 
bank guarantees? 
Answer 
The Chinese construction market is still under devel opment. China is now promoting the reform of 
enterprises and developing guarantee and insurance sy stem fitting the development of the market. The 
Construction Law  sets minimum registered capital requirement, which applies to all the construction 
enterprises established in China, including both fo reign-invested and domestic ones. Under the current 
situation of the Chinese construction market, regist ered capital is still an important guarantee against 
the risk of the projects. As for replacing the regist ered capital requirements with other financial tools 
such as letters of credit, insurance bonds, bank guara ntees, currently there are legislative difficulties, 
as the minimum capital requirement is stipulated in the law. 
EUROPEAN UNION – Follow-up
 
I. E NVIRONMENT  
Follow up to Question 5 To what extent have the adjustment measur es involved a net reduction of capacities which 
contribute to the reduction of the overcapacity i ssue (or has this instead led to a modernisation 
of capacities, keeping the level of capacities unchanged)? 
Answer 
China's overall industrial development level is still low, and there is great urgency to address such 
pressing issues as high consumption of resources and energy etc in the industrial development. 
Therefore, total capacity control, eliminati on of outdated production ca pacity and industrial 
restructuring have always been one of the most important policies of the Chinese government. The 
State Council has issued policy directions in this re spect for several times involving considerations in 
respect of land supply, environment protection, inv estment administration, information disclosure etc. 
By far there have been preliminary results in curb ing the impulse to invest into these sectors. For 
detailed information regarding the shut-down of excessive capacity in specific sectors, please refer to 
paragraph 22 in the Govern ment Report (WT/TPR/G/230). WT/TPR/M/230/Add.1 
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  II. T
RADE POLICY REGIME :  FRAMEWORK AND OBJECTIVES  
(2) I NSTITUTIONAL AND LEGAL FRAMEWORK  
(i) Transparency 
Follow up to Question 8 We consider that the specific elements of our question have remained unanswered. 
Could China confirm whether comments provided fo llowing "solicitation of public opinion" are 
made publicly available, and if so how and where? 
Does China have any plans to introduce minimum time periods for submission of comments 
under such public consultations? 
Answer (for the above 2 questions) According to our understanding, China did not comm it to publish drafts of la ws and regulations for 
public comments, and most of the WTO Agreements  do not have such requirements. However, to 
continuously promote government transparency, China has attached high importance to the solicitation of public opinions for drafts of laws and regulations. Almost all drafts of laws and 
administrative regulations in recent years have be en made public to invite public comments. At 
present, China is exploring the establishment of a feedback mechanism on the adoption of public 
comments. 
(5) T
RADE AGREEMENTS AND ARRANGEMENTS  
Follow up to Question 15 Could China please provide specific figures to demonstrate how the ACFTA has brought about 
growth in trade and mutual benefit to both sides? 
Answer 
Driven by ACFTA agreements, China-ASEAN b ilateral trade increased substantially from 
USD78.2 billion in 2003 to USD213 billion in 20 09. From January to May 2010, bilateral trade 
reached USD111.8 billion, an increase of 57.5% compar ed with the same period of last year. China's 
export to ASEAN during the period totalled USD5 2.7 billion, a 46.2% increase year-on-year, and 
China's import from ASEAN countries totalled USD59.1 billion, a 69.1% increase year-on-year.  
(6) F
OREIGN INVESTMENT  
Follow up to Question 21 Could China please elaborate why the reported law-breaching activities that were found in 
"some representative offices" necessitated a restri ction of the number of foreign representatives 
to maximum four, imposed on all Representation  Offices of foreign companies, regardless 
whether any prior infringements were recorded or not? Are such restrictions not 
disproportionate? 
Answer 
The amended rule for representative offices of forei gn companies apply to new representative offices. 
Offices established before the amendment are not required to reduce the number of representatives,  WT/TPR/M/230/Add.1 
 Page 151 
 
 
  but they are not allowed to increase the num ber of representatives either. When changing 
representatives, offices with over four representati ves are not allowed to increase the number of 
representatives. However, representative offices of certain specific sectors that are permitted to 
conduct profit-making activities are not subject to this restriction of only four representatives. 
(7) F OREIGN ASSISTANCE  
(ii) China's assistance to foreign countries 
Follow up to Question 37 The Enhanced Integrated Framework – a joint effort between LDCs, donors and development 
agencies – is widely considered as the reference coordination mechanism for coordinating Aid for Trade to LDCs.  
Does China have any plans to take into account the reports and analysis provided under the 
Enhanced Integrated Framework in its future programming and aid delivery? 
Answer 
China's foreign aid is a mutual  assistance between developing countries under the South-South 
Cooperation Framework. Specific areas and projec ts of the aid are decided through bilateral 
consultations and the overall aid scale of China is  still limited. Presently China does not use the 
Enhanced Integrated Framework analysis in pr ogramming and delivering aid to LDCs. In future 
China may refer to the reports and analysis under the Enhanced Integrated Framework at 
circumstances appropriate. 
Follow up to Questions 40-47 
Our written questions sought further clarifications on China's plans to implement duty-free 
treatment to imports from LDCs. China stressed during its opening statement, and repeated in 
its written replies, that it represents the largest  export market for LDCs. This is a bold 
assertion, but according to recent informat ion [WT/COMTD/LDC/W/43/Rev.1], 90% of 
China's imports from LDCs concern oil and mineral products, while only 0.2% of the 
agricultural imports enter the Chinese market duty free. 
Does China intend to make sure that the prefe rences granted to LDCs will contribute to the 
export diversification  of their economies? 
Answer 
It is not China's unilateral assertion but th e conclusion in the document WT/COMTD/LDC/ 
W/43/Rev.1 that China is the largest export market for LDCs. Since 1 July 2010, China has implemented duty-free treatment on 4,762 Chinese tariff lines for products originating in LDCs that 
have letters exchanged with Ch ina, which account for 60% of all tariff lines. According to the 
principle of one-time commitment and stage-by-sta ge implementation, China would expand the scope 
of the preferential policies according to the opinions and suggestions of releva nt countries to finally 
fulfil the commitment of implementing duty-free treatme nt to 95% of products originating in LDCs. 
As the duty-free scheme will cover most goods, it would certainly promote the diversity of the 
economy and export of LDCs. 
In this respect we also note from China's reply to a related question from Brazil (BR 
question 31) that China's duty free scheme includes a safeguard clause allowing China to terminate duty-free treatment in case of sharp increases in LDC imports of a certain product.  WT/TPR/M/230/Add.1 
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  Could China elaborate further on this safeguard mechanism? 
Answer 
The safeguard clause is the reservation of China for implementation of the duty-free treatment for 
LDCs concerned. After the special preferential zero tariff treatment is implemented, where one of the 
products on the list is being imported into China in  such increased quantities as to cause or threaten to 
cause serious injury to the domestic industry that  produces like or directly competitive products of 
China, the Government of China shall have the right to suspend the special preferential tariff 
treatment of the product in question and will enter in to consultations with th e LDC concerned with a 
view to seeking mutually satisfactory solution.  
Follow up to Question 46 
The EU welcomes the confirmation given that Ch ina will put "the most concerned products of 
LDCs" into the initial 60% duty-free tariff list.  
Are we correct in assuming that this would mean  that most of the imports of LDCs (including 
non oil products) would be granted duty free treatment by end 2010?   
Could China confirm whether there will be a li near increase or other schedule to reach the 
target of 95% of tariff lines by 2015?  
Answer (for the above two questions) 
Please refer to the answer to follow up question to Questions 40-47. 
III. T
RADE POLICIES AND PRACTICES BY MEASURE  
(2) M EASURES DIRECTLY AFFECTING IMPORTS  
(vii) Standards and other technical requirements 
Follow up to Question 55 
Does China plan to draft rules on procedures for notification of sectoral standards that become 
mandatory through the referen cing in subsequent mandato ry conformity assessment 
procedures? 
Answer If voluntary sectoral standards are incorporated in mandatory conformity assessment procedures, 
China will notify to the WTO according to the requirement of the TBT Agreement. 
Follow up to Question 58 
China notes that statistics show that, so far, fo reign invested enterprises have been members in 
over 15% national professional standardizat ion technical committees and have played a 
significant role in the work of these commit tees. We consider that this participation, 
representing 15% of technical committees, is still insufficient.  
Does China envisage to increase the level of participation of FIEs?  WT/TPR/M/230/Add.1 
 Page 153 
 
 
  Answer 
When acceding into the WTO, China did not have co mmitment on the percentage of participation by 
foreign-funded enterprises in the members of National Professional Standardization Technical 
Committees. The present participation of foreign-fu nded enterprises is an objective reflection of the 
development of various industries and their actual demands. According to the Rules on Administration 
of National Professional Standardization Technical Committees , the technical committees shall be 
composed of representatives from enterprises, re search institutions, testing institutions, higher 
education institutions, government departments, indu strial associations and consumers. Therefore, 
enterprises are just one source of the technical committees, and foreign-funded enterprises are only 
one kind of enterprises. In the future, China w ould strengthen examination on the reasonableness of 
the composition of the technical committees. Regarding the policy of China on the participation of 
foreign-funded enterprises in t echnical committees, China has provi ded replies to EU's previous 
questions. There are no changes. 
Follow up to Question 59 and Question 60 
Could China please specify what is exactl y meant by "overseas advanced standards? 
Answer 
Overseas advanced standards refer to the nationa l standards promulgated by countries with high 
economic development level, advanced technical le vel, high living standard and GDP per capita, and 
high standardization level and that have made great contribution to in ternational standardization work, 
or the industrial standards promul gated by national industrial associations of these countries. They 
also include standards of regional organizations wh ich have relatively great influence on international 
standards or which have been adopted fr equently by Chinese national standards. 
How does China calculate the percentage of sta ndards aligned to international standards e.g. 
are only standards fully identical to internationa l  standards taken into account, or do Chinese 
standards partially based on international st andards, or with some 'top-up' vis-à-vis 
international standards also co unt?  Some member company statistics indicate that the number 
of Chinese national standards that are identica lly adopted (IDT), equally adopted (EQV), or 
adopted with modification (MOD) from inte rnationally established and accepted standards 
might be as low as 30%. 
Answer 
China's rate of adoption is calculated on the basis of  related areas, which refer to areas where China's 
standardization work has its counterpart in inte rnational standardization work. IDT, EQV and MOD 
are all included.  
Even if we appreciate China's work on alignment of its standard to international ones, we would 
nevertheless stress once more the need for China to  ensure that deviations from international 
standards where these exist are avoided, and that such deviations are only allowed where there 
is a clear, science-based justification that the inte rnational standard in question is an ineffective 
or inappropriate way of achieving the legitimate objective pursued.  
General comment on CCC (question 68)  
EU welcomes China's efforts to streamline and clarify certain aspects related to the CCC 
scheme. The EU continues to encourage China to bu ild on these positive steps in order to ensure 
that the CCC system becomes more transpar ent, and less complex and burdensome for WT/TPR/M/230/Add.1 
Page 154  
 
  economic operators. However, d espite these positive achievements, the CCC is still a major 
trade obstacle for foreign operators exporting to China in a variety of sectors. Furthermore, as 
stated in the EU's oral comments and advance written questions, we are also worried that the scope of the CCC scheme is gradually expanding to more product categories, and are now much 
wider than the one initially envisaged by China when initially introducing the CCC scheme. The 
EU would therefore continue to urge China to en gage in a substantial review of its approach to 
conformity assessment procedures as reflected  by the CCC, and move towards a more risk-
based approach - this would entail, for exampl e, narrowing down the scope of mandatory 
conformity assessment for low-risk products, a nd relying on more flexible approaches such as 
Supplier's Declaration of Conformity.  
Follow up to Question 70 
Considering that CCC-I is already in place, could China grant a temporary admission for 
OSCCA compliance for foreign products - currentl y foreign products are not admitted - while 
the revision of the OSCCA regulations are not finalised? 
Answer Work on the amendment to the Regulations on Administration of Commercial Encryption Codes  is 
underway, and at this moment China doe s not have such a consideration.  
Follow up to Question 71 
The TPRM exercise is not limited to assessi ng China's compliance with its accession 
commitments. The EU therefore would like to receive an answer on this question. EU would also 
like to record that China's a ccession commitments do not refrain China from undertaking any 
other initiative to open up its economy. 
Answer 
China's commitment in this respect, under services deliv ery mode 3, is that foreign services suppliers 
which have been engaged in inspection services in their home countries for more than three years are 
permitted to establish joint venture technical testing,  analysis and freight inspection companies with 
no less than US$ 350,000 in registered capital;  w ithin two years after China's accession, foreign 
majority ownership will be permitted and within fo ur years after China's accession, wholly foreign-
owned subsidiaries will be permitted. The services China committed to open in this respect is 
technical testing and analysis services (CPC 8676) and freight inspection covered by CPC 749, 
excluding statutory inspection services for freight inspection services. China does not think that the 
notion of EU in the question that China agreed to accredit majority foreign-owned joint venture 
conformity assessment bodies to conduct CCC testing two years after accession is accurate. 
Follow up to Question 75 
We are concerned that, despite the fact that the CCC regulations for ICT products are limited 
in their scope of application to government  procurement, Chinese SOEs will nevertheless 
request the CCC certificate from their foreign suppliers for the ICT products in the CCC 
catalogue. 
Could China explain what measures has taken, or is planning to take, to ensure and monitor 
that Chinese SOEs do not unnecessarily ask for the CCC certification for ICT products, thereby 
extending its scope in practice beyond that en visaged by the Chinese mandatory legislation?  WT/TPR/M/230/Add.1 
 Page 155 
 
 
  Answer 
SOEs in China are independent market entities w hose operation activities are independent from the 
Chinese government.  Certification of ICT products belongs to voluntary certification, and is not 
covered by compulsory certification of the Chinese g overnment. China clarified in April 2009 that the 
compulsory certification for ICT products is limited only within the scope of government 
procurement. 
Follow up to Question 78 
As already stated on several occasions includi ng in the TBT Committee, the EU is concerned 
about the MLPS, which requires all information t echnology systems in China to be classified 
according to different levels of security from 1 to 5. In particular, levels 3 to 5, classified as 
'critical infrastructure', imply very strict ob ligations for users including, for instance, the 
obligation to use Chinese source code. It is the EU's understanding that this 'critical 
infrastructure' will cover IT systems used by SOEs, as well as banks and public utility 
companies among others.  
Could China  elaborate further on the factors which are used to determine what 'critical 
infrastructure' is, and what this will imply in practical terms for SOEs and other entities in 
China which are not normally covered by the noti on of 'national security' in other countries?  
Could China provide an update on the state of implementation of the MLPS?  
Answer (for the above two questions) 
China began to implement the multi-level protecti on on information system security (MLPS) in 2007. 
On the basis of the importance of an information system and the danger it will cause to national 
security, social order, public interest, legitimat e rights of citizens, legal persons and other 
organizations if it is damaged, information syst em operators define the protection level of their 
systems. Therefore, the establishment of different protection level is based on objective factors. There 
is no new adjustment made to the MLPS. 
(b) Sanitary and phytosanitary measures (SPS)  
Follow up to Question 61 
The EU would like to thank China for the answer  provided to this question. However, the EU 
still has serious concerns over th e transparency issue related to the SPS notifications and 
especially the time-periods given to comment.  
The EU would like to highlight the fact that alth ough the draft standards are in the first place 
national standards for China, they should al so be considered in an international trade 
framework. This is important for international companies importing into China as well as for 
domestic Chinese companies exporting to the in ternational food market. Standardisation and 
harmonisation towards international standard s are the basic principle of the WTO SPS 
Agreement. 
The EU would like to give a recent example of SPS notifications on food additives. The EU 
received 96 SPS notifications on food additives standards dated 5-6 May 2010 with a deadline 
for comments given until 20 May 2010. None of  the notifications had any references where the 
original text could be found, even in Chines e language. The EU requested immediately on 
6 May 2010 an extension of deadline at least to cover the normal 60 day period for comments. WT/TPR/M/230/Add.1 
Page 156  
 
  The EU regrets that China did not agree to exte nd the commenting period, which in this case 
was just 15 days for all the 96 notifications. 
Could China clarify and indicate how it will in the future ensure its SPS notifications practices 
to be in line with WTO practices with regard to transparency and reasonable time-frames for 
trading partners to comment the draft legislation? 
Answer 
Since China's accession into WTO, China has seri ously fulfilled its transparency obligation as 
prescribed in the SPS Agreement. China has totally  notified 304 SPS measures, for which the periods 
of comments have been given to other members to make comments. 
The 96 SPS notifications on food additives standards are a special case arising from the revision if a 
large number of food safety-related standa rds after the implementation of the new  Food Safety Law . 
EU was not correct when it said that none of the no tifications had any references where the original 
text could be found, even in Chinese language. It wa s clearly stated in Column 13 of the notifications 
that the full texts are available from the national SPS Enquiry Point. As a matter of fact, at the request 
of India, Canada and Argentina, China has provi ded the full texts of these notifications to the 
aforesaid members for 129 pieces and times as of 10 May 2010. China will make best efforts to keep 
up with the WTO requirements regarding the provisi on of reasonable period of time for comments in 
the future. In addition, under th e aforesaid special circumstances, even if the periods for comments 
expire, members may also make comments which Chin a will take into consideration to the extent 
possible. 
(viii) Government procurement 
Follow up to Question 80 
The EU notes that Article 15 of this draft me asure imposes to purchase first end products 
manufactured in China before resort to foreign goods when domestic products are not available 
at a reasonable price. 
Could China explain why this new requirement not existing in the Government procurement 
law has been added? 
Answer 
Article 15 of the draft regulation is based on Article 10 of the Government Procurement Law . 
Follow up question to Question 86 
Could China provide more details on the rules to be followed in such a case? Could China give 
the reference of the relevant legal framework? 
Answer 
Presently China does not have a regulatory system for projects in the case mentioned in Question 86.  
Follow up question to Question 87 
Could China inform whether it intends to incl ude a definition of public organisations in 
forthcoming public procurement legislation? If so, when and how?  WT/TPR/M/230/Add.1 
 Page 157 
 
 
  Answer 
The power to amend a law belongs to the Nati onal People's Congress (NPC). The amendment of 
Government Procurement Law  is not listed in the legislation plan of NPC of this year.  
Follow up question to Question 89 
Could China clarify the exact meaning of: "the Prescribed Procurement Thresholds are also 
subject to change when necessary"? 
Answer 
The Prescribed Procurement Thresholds refers to the threshold applicable to items subject to 
government procurement that are not in the Centralized Procurement Catalogues.  The Prescribed 
Procurement Thresholds of Cent ral Government was first promulgated in 2003 in view of the 
implementation capability and specialization level of the procurement agencies. It has been adjusted 
five times with the improvement of the capability  and specialization level of the procurement 
agencies, reduced from the previous 800,000 Yuan to the current 500,000 Yuan.  
Follow up question to Question 91 
Could China provide more details on "the manda tory bidding projects prescribed by the Law 
on Tenders and Bids"? What do they consist in ? Could China give examples of such projects? 
Answer 
As provided in Article 3 of the Law on Bid Invitation and Bidding , the following construction projects 
to be undertaken within China, including the surv eying, design, construction and supervision of such 
projects, as well as the purchase of key equipment and materials for such projects, shall be subject to bid invitation: (1) large infrastructure and public utility projects that concern public interests and 
security; (2) projects invested completely or partly with State funds or financed by the State; and 
(3) projects using loans or aid funds from intern ational organizations or  governments of other 
countries. 
The Provisions on Scope and Scal e Threshold for Bid Invitation of Engineering and Construction 
Projects  (former National Development Planning Co mmission Decree No.3) specified the specific 
scope of the above mentioned engi neering and construction projects in Articles 2 to 6 and stipulated 
in Article 7 that engineering and construction project that meets any of the following threshold shall 
be subject to bid invitation: (1) the estimated va lue of a single contract of construction is above 
2 million Yuan; (2) the estimated value of a single contract for purchasing key equipment or materials is above 1 million Yuan; (3) the estimated value of a single contract for the purchase of surveying, 
design or supervision services is above 500,000 Yuan; a nd (4) the total investment of the project is 
above 30 million Yuan, although the estimated value of an individual single contract is lower than the 
above threshold. Besides, Decree No.3 also au thorizes provincial governments to specify the scope 
and scale thresholds subject to bid invitation in th eir respective regions according to actual conditions, 
which however may not be narrower than those set in Decree No.3. 
Follow up question to Question 94 
EU would like to stress that Question 94 asked whether local governments have to publish 
procurement notices as well as any procurement information on the centralized website, or 
whether they use their own website. WT/TPR/M/230/Add.1 
Page 158  
 
  Could China explain the situation at the local level? 
Answer 
According to Article 7 of the Administrative Measures for Govern ment Procurement Information 
Announcement , the government procurement information shall firstly be publicized through the 
government information release media as designate d by the Ministry of Finance. The local 
government procurement information may simulta neously be publicized through the government 
information release media as designated by  the province-level finance departments.  
(3) M
EASURES DIRECTLY AFFECTING EXPORTS  
(iii) Export taxes 
Follow up to Question 104 
Could China please indicate how the existence of  statutory export taxes on 95 lines and interim 
export taxes on 258 lines (at the HS8 level) are in line with the accession protocol which only 
allows for export taxes to be set up on a co mmonly agreed list of 84 lines (at the HS8 level)? 
Answer 
China's export measures on a few products are for the purpose of protecting environment, protecting 
human, animal or plant life or health, conserving ex haustible natural resources,  or protecting national 
security, which we believed are permitted under WTO rules. The issue concerned in the question is 
subject to the ongoing WTO dispute cases of DS394, 395 and 398. We prefer to comment after the rulings of the cases. 
(ix) Export facilitation and marketing assistance 
Follow up to Question 116 
Could China indicate where we can consult the text of the "Guidelines for Environmental and 
Social Impact Assessments of the China Export and Import Bank"? 
Answer 
The main content of the Guidelines for Environmental and Social Impact Assessments of the Export -
Import Bank of China  is that when examining domestic and overseas loan projects, China Export-
Import Bank shall give due consideration to social  effects and environmental protection requirements 
besides the economic return of the loans.  
The appraisal principle of overseas projects is, to conduct environment impact appraisal during 
pre-loan investigation and in-loan assessment a nd monitor the environment impact during post-
loan management. Overseas projects shall comply wi th laws and regulations of the host country 
and obtain relevant environment approval and license. If the host country lacks relevant 
environment and social impact appraisal polici es and standards due to imperfect environment 
protection mechanism, the appraisal shall be cond ucted with reference to Chinese standards or 
international practices.  Local people's rights to land and resources shall be respected and issues 
concerning relocation of the people shall be handled properly.  WT/TPR/M/230/Add.1 
 Page 159 
 
 
  Follow up to Question 117 
Could China indicate where we can find more deta ils on the procurement system applied under 
China's foreign aid framework?  
Answer 
The procurement under China's foreign aid framework  is conducted through public bidding. Decree 
No. 18 of 2008 and Decree No.5 of 2006 of the Ministry of Commerce concerning foreign aid contain 
specific chapters regarding public bidding procedures. The two Decrees are available at 
http://www.mofcom.gov.cn/aarticle/b/c/200901/ 20090105986557.html and http://www.mofcom. 
gov.cn/aarticle/b/c/200607/ 20060702671822.html.  
Follow up to Question 118 
The reply provided by China is not complete a nd does not fully answer our question. Therefore, 
we would like to raise again this question:  By which procedure are "projects closely related to 
the livelihood of the general public that need government investments" distinguished from "economically viable projects"?  
Answer China has answered this question of EU. China's foreign aid projects to the recipient countries are 
decided through bilateral friendly c onsultations. The will of the recipient country is fully respected.  
(4) M
EASURES AFFECTING PRODUCTION AND TRADE  
(iii) State-owned enterprises, privatization, and corporate governance 
Follow up to Question 121 Given the dominant position of SOEs in China's economy (45.4% of GDP and 43.5% of 
industrial value added), could China explain the rationale behind its dividend policy of 
collecting only a limited percentage of profits (n ot more than 10% according to paragraph 124 
of the Secretariat's report).  
Answer 
The budget system for the use of State capital of central enterprises was introduced in 2007 and is 
now still on a pilot basis. The determination of the percentage of proceeds to be collected from central 
enterprises at this stage takes into account the facts that enterprises of  different industries are affected 
by different historical factors and conditions, that th ey have different reform and transition tasks, and 
that their profit levels vary. Therefore during the p ilot period, to promote SOEs reform and meanwhile 
regulate income distribution of enterprises, such a method of collection by category is adopted in collecting the proceeds of State capital of central en terprises. The reform will be further advanced step 
by step. 
This limit on dividends leads to potentially important revenues foregone for the budget and in 
this way represents an implicit transfer from taxpayers to SOEs.  
Is the Government envisaging any measures to prevent the resulting high levels of retained 
earnings in SOEs from leading to overinvestment and overcapacity?  WT/TPR/M/230/Add.1 
Page 160  
 
  Answer 
First of all, the present collection of SOEs proceeds by percentages does not mean that there exists a 
hidden transfer of fund from taxpayers to SOEs. The reform of Chinese SOEs has been advancing 
step by step. At present, although fundamental brea kthroughs have been achieved, the reform has not 
yet completed. SOEs still have historical problems to resolve and in some cases still shoulder social 
functions that should have been borne by the government. Therefore, the present collection of 
proceeds by percentage is reasonable in view of  the actual situations of the SOEs reform.  
Along with the deepening of the reform, the histori cal problems of SOEs would be digested gradually, 
and the collection percentage of proceeds of State capital shall be adjusted accordingly. 
(iv) Competition and consumer protection policy 
Follow up to Question 125 
The reply provided by China does not duly respond to our questions. The reply did not contain 
any indication regarding the list of other laws in the related industries regulations where competition may be addressed.  
Could China clearly specify the scope of applic ation of the AML and list the "other competition-
related legislation"?  
Answer 
In respect of the scope of application of the Anti Monopoly Law , according to Article 2 of the Law, it 
shall be applicable to monopolistic conducts in eco nomic activities within the territory of the People's 
Republic of China; it shall also apply to monopolis tic conducts outside the territory of the People's 
Republic of China if such conducts eliminate or ha ve restrictive effect on competition in the domestic 
market of China. 
Other competition-related legislation include Law against Unfair Competition , Pricing Law , Law on 
Bid Invitation and Bidding , Law on Regulation of and Supervision over the Banking Industry , Foreign 
Trade Law , Provisions of the State Council on Thresholds for Prior Notification of Concentrations of 
Undertakings , Regulations on Telecommunications , Regulations on International Ocean Shipping , 
etc. 
(v) Intellectual Property Rights 
Follow up to Question 132 The EU has taken note of China's assessment on the observations included in the Secretariat's 
Report but considers that the question remains unanswered. Could China indicate whether it is prepared to simplify the rules of representation before the courts as well as evidentiary 
requirements? 
Answer 
The relevant procedures and the materials required to  be submitted have been relatively simplified in 
practice in intellectual property litigations as compared with before.   WT/TPR/M/230/Add.1 
 Page 161 
 
 
  Follow up to Question 161 
Could China please explain if it aims to enact legislation on geographical indications still this 
year, as mentioned in the Secretariat's report? 
Answer 
There is no timetable for legislation on geographical indications. IV. T
RADE POLICIES BY SECTOR  
(4) M ANUFACTURING  
Follow up to Question 178 How does China plan to address the issue of overca pacities when construction of capacities is 
outnumbering the closure of capacities?  
Answer 
China's overall industrial development level is still low, and there is great urgency to address such 
pressing issues as high consumption of resources and energy etc in the industrial development. 
Therefore it is a consistent policy of China to pus h ahead industrial structure optimization. The two-
year 4 trillion Yuan investment plan staged in resp onse to the international financial crisis clearly 
requires that government investment be made into the weak aspects of China's economic and social 
development and should not go to ge neral industrial expansion. In accordance with this requirement, 
the investment has been focused on housing proj ects for low-income population, rural livelihood 
projects, key infrastructures including transportation, energy saving and emission reduction, ecological construction, post-earthquake reconstruc tion, as well as social causes like public health, 
education and culture. 
Recently the State Council issued Certain Opinio ns on Containing the Excessive Capacity and 
Repeated Construction of Certain Sectors for Guidance on Healthy Development of Industries (Guo Fa No. 38 of 2009). The paper proposed further polic y considerations in respect of land supply, 
environment protection, investment administrati on, information disclosure etc to curb more 
effectively the overcapacity of those sectors and thei r negative impact on the sustainable growth of the 
economy. 
(5) S
ERVICES  
Follow up to Question 183 Could China clarify how this approach could be compliant with its commitment on payment 
and money transmission services? 
Answer China believes that the service of  the China Union Pay belongs to "settlement and clearing services 
for financial assets" on which there was no commitm ent in China's Services Schedule. China may 
therefore take appropriate administrative measur es according to the actual situations in domestic 
market.  WT/TPR/M/230/Add.1 
Page 162  
 
  Follow up to Question 199 
China only specifies the number of licences that have been granted. Could China however specify how many licence applic ations have been received in total to date? 
Answer 
China has altogether received 53 applications fo r foreign investment in the telecom sector. 
Follow up to Question 205 Could China please explain further details on how companies that set up their own online 
trading platform and use this platform to sell their products and services directly to customers 
online, without extra charge, should comply with the stated "record-filing" requirement? 
Answer Detailed requirements may be found in Measures for Administration of Internet Content Provision 
Service  (State Council Decree No. 292), which is  available at http://www.gov.cn/zwgk/2005-
06/06/content_4424.htm, and Measures on Administration of Filing for Record of Non-Commercial 
Internet Content Provision Service (former Ministry of Information Industry Decree No. 33), which is 
available at http://www.miit.gov.cn / n11293472/n1129491 2/n11296542/12095560.  
Follow up to Question 212 Could China clarify what it means when it states it "did not make commitment on direct ticket 
sale to consumer via CRS"? 
Is it possible for consumers in China to directly use a foreign CRS to reserve and issue a ticket?  
Would an agent
 have the right to issue tickets using foreign CRS?  
Answer (for the above 3 questions) The business of CRS service provider is to provide information including airline schedules and ticket 
prices to airline companies and their agents who will then book or issue tickets through the CRS 
system. Usually, CRS service providers would not face passengers directly. 
Foreign CRS service providers may provide services in China through three cross-border transaction 
models: first, to conclude an agreement with  Chinese airline companies and Chinese Computer 
Reservation System, and provide services to Chinese airline companies and their agents through the 
Chinese Computer Reservation System; second, to  provide services to representative offices or 
business offices of foreign airline companies eligib le to operate in China according to bilateral 
aviation agreements; third, to provide services directly  to the agents of foreign airline companies after 
being approved by CAAC. 
Follow up to Question 221 
Could China specify more clearly the kind of requirements needed for granting of a license for 
international express delivery that applies fo r both foreign and domestic companies?   WT/TPR/M/230/Add.1 
 Page 163 
 
 
  Answer 
These requirements are specified in Chapter 6 of the Postal Law. 
General question 
At various instances, and in particular in the section on trade in services, the Chinese 
government seems to indicate that no further liberalisation will take place unilaterally beyond 
what has been committed to at the o ccasion of its WTO accession process.  
Could China please elaborate how this apparent reluctance to further liberalise and open up 
can be justified or explained given the firm ass ertion in the Government's report that constant 
reform and pening up is China's basic policy? 
Answer The commitment of China to continue the reform  and opening up policy has been clearly reiterated 
and strongly evidenced by the measures China has take n since the last review, as elaborated in the 
Government Report. In the meantime, it is our position that as a developing country, China's further 
opening up and liberalization may not be conducted blindly. Instead, it shall be carried out step by 
step with sufficient consideration given to th e objective national conditions  and actual development 
levels of different sectors. As one of the most  developed members of the WTO, EU still retains 
reservations in the opening up and liberalization of quite some sectors. China's approach of gradual 
liberalization as a developing country is fundamenta lly different in nature from the reluctance to 
liberalize of developed members like EU. 
EGYPT
 
Section 3 
Sanitary and Phyto-Sanitary Measures (SPS) 
It was mentioned that the institutional fram ework for implementing China's SPS measures has 
remained largely the same during the review period.   
 - Egypt would like to seek more information on whether there is a specific 
mechanism designated by the government of P.R. China for the supervision of 
food products and processed food products? 
 - If yes, please clarify this mechanism a nd how does it operate in order to ensure 
full compliance with SPS agreement. 
Answer 
The Chinese government has established mechanis m for supervising food and processed food. 
The Food Safety Law of the People's Republic of China  was adopted by the Standing Committee of 
the National People's Congress of China on 28 Februa ry 2009. Executive meeting of the State Council 
deliberated and passed the Regulation on the Implementation of the Food Safety Law  on 8 July 2009. 
With the adoption of these new law and regulati on, and as there were already in place other 
previously promulgated laws and regulations including the  Law on Agricultural Product Quality 
Safety , the Regulations on Supervision and Administrati on of Dairy Product Quality and Safety , the 
Regulations on Safety of Ge netically Modified Plants , the Regulations on Administration of Pig WT/TPR/M/230/Add.1 
Page 164  
 
  Slaughtering , the Edible Salt Monopoly Regulations  etc, the mechanism has been further strengthened 
for supervision of food and processed food. 
According to provisions of the above laws and regul ations, the competent authority for public health 
under the State Council, i.e. the Ministry of Hea lth undertakes integrated coordinating responsibilities 
of food safety, including food safety risk assessment, formulation of food safety standards, food safety information dissemination, determination of qualif ication criteria for food inspection agencies and 
formulation of inspections norms, and investigati on and treatment of major food safety incidents. 
State Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), State 
Administration of Industry and Commerce (SAIC), State Food and Drug Administration (SFDA) 
administer and supervise food processing, circula tion and catering services respectively according to 
the laws and also duties designated by the Stat e Council. Agriculture Administrations of the 
governments at and above the county level deal with administration and supervision of food safety of 
agricultural products, and the agriculture authority under the State Council, i.e. the Ministry of Agriculture is in charge of regulation and superv ision on the safety of farm produce and genetically 
modified plants. The State Council establis hed Food Safety Committee to coordinate 
comprehensively all these related government agencies. 
The food safety supervisory mechanism functions in conformity with the SPS Agreement of the WTO. 
It is also mentioned that there is a "specific supervision" of food products.  - Could P.R. China provide clarification on what is meant by specific supervision, 
and whether it is dealt with by the new Food Safety Law? 
Answer "Specialized supervision" refers to the mechanism prescribed by the  Food Safety Law  where 
competent authorities under the State Council undert ake respectively food safety responsibilities in 
specific links of the entire food safety chain. Currently , the Ministry of Public Health is responsible 
for integrated coordination, including food saf ety risk assessment, formulation of food safety 
standards, food safety information dissemination, determination of qualification criteria for food 
inspection agencies and formulation of inspections norms, and investigation and treatment of major 
food safety incidents. AQSIA is responsible fo r supervising food productio n and food importing and 
exporting. SAIC supervises food circ ulation. SFDA supervises catering services. It is dealt with by the 
new Food Safety Law . 
A number of entities are responsible for food safe ty issues namely the AQSIQ, the State Food 
and Drug Administration, and the Ministries  of Agriculture and Health, and the State 
Administration of Industry and Commerce (SAIC) 
 - Would it be possible if P.R. China could provide a brief description of the role of 
each entity with regard to food safety issues? 
 - Is there a specific flow chart (organizat ional chart) that illustrates the relation 
and/or coordination between different ministries dealing with SPS issues? 
Answer 
Brief description of the role of e ach of the relevant authorities has b een provided in our answers to the 
previous two questions. For more detailed informati on, Egypt may refer to the official websites of 
these authorities, namely Ministry of Health (MOH) at http://www.moh.gov.cn/publicfiles/business/  WT/TPR/M/230/Add.1 
 Page 165 
 
 
  htmlfiles/zwgkzt/pjggk/ 200804/621.htm, Ministry of Agriculture (MOA) at http://www.moa.gov.cn/ 
zwllm /nybgk/201006/t20100618_1583296.htm, State Administration of Industry and Commerce (SAIC) at http://www.saic.gov.cn/zzjg/zyzz/, State Food and Drug Administration (SFDA) at http://www.sda.gov.cn/WS01/CL0003/, and State Admini stration of Quality Supervision, Inspection 
and Quarantine (AQSIQ) at http://www.aqsiq. gov.cn/zwgk/zjjs/#%E5% 87%BA%E5%85%A5%E5% 
A2%83%E5%8A%A8%E6%A4%8D%E7%89%A9%E6%A3%80%E7%96%AB%E7%AE%A1%E7
%90%86. 
New Food Safety Law 
 - How would the new food safety law contri bute to ensuring food safety standards, 
and what will be the private sector's role in this area? 
Answer 
Article 19 of the Food Safety Law stipulates that "food safety standards are compulsory and no other 
compulsory food standards shall be established apart from these standards". This guarantees the 
compulsiveness and uniformity of food safety standards. Article 27 of the Law reiterates that "food 
production and operation must be compliant with food  safety standards" and that "imported food, food 
additives and food related products must comply w ith national food safety standards of China."  
All food producers and operators in China must strictly follow national food safety standards during 
food production and operation. Where no national or local food safety standards exist for a certain 
kind of food produced, the producers must develop their own standards for production. The State 
encourages enterprises to develop their standards that  are stricter than the national compulsory ones. 
These standards must be submitted to provincial le vel public health authorities for filing and are 
applied within the producer itself. 
HONG KONG, CHINA
 
Contingency measures  
(WT/TPR/S/230: p. 35, para. 39; WT/TPR/G/230: p. 17, para. 61; p. 23, para. 99) 
1. We note from the Secretariat and Govern ment Reports that China remains the most 
frequent target of anti-dumping measures and is seeking to tighten the disciplines to prevent 
their abusive use.  Could China share with us the most common problems encountered in the 
course of the anti-dumping investigations?  
Answer 
China has encountered following problems in the course of anti-dumping investigations initiated by 
some other members against Chinese products: 
1. Unjust use of anti-dumping surrogate va lues.  These members ignore the substantial 
achievements of China in its market economy deve lopment, deny China's overall status as a market 
economy or frequently determine that the Chinese industries involved in investigations are non-
market economy based industries, and adopt such  method as surrogate countryin anti-dumping 
investigations with the actual costs of Chinese exports not considered but rather unreasonable 
surrogate values used. 
2. Double remedies (excessive remedies) by wa y of consolidating anti-dumping investigation 
and countervailing duty investigation. The practi ce is to initiate consolidated anti-dumping and 
countervailing duty investigations on Chinese pr oducts. While denying China's market economy WT/TPR/M/230/Add.1 
Page 166  
 
  status without justifiable reason, these member s adopt the method of surrogate country in anti-
dumping investigations and at the same time also apply countervaili ng duties. Adoption of surrogate 
country method has already taken into account th e possible subsidy factor in non-market economy 
countries. Therefore consolidation of anti-dumpi ng duty rate and counterva iling duty rate is double 
remedy for an industry, which is cer tainly unfair for Chinese enterprises. 
3. Ignore factual capacities of enterprises to respond to the litigations, make unreasonable 
requests to enterprises in their responding process, and determine and impose high duty rates on Chinese enterprises by arbitrarily employing adver se facts available. For example, require the 
responsive materials to have consular authentication or  to be in officially certified translation; request 
for evidences beyond the respondents' capabilities; reject materials submitted by Chinese enterprises 
on any possible excuses and without on-spot verification. 
4. Disclosure of key information is not in time, not sufficient or transparent. For example, data 
of alternative countries are not transparent; disclosur e of basic information on calculation of dumping 
margin and determination of injury is not suffi cient; some members even do not disclose facts and 
data for dumping calculation; etc. 
5. Adopt zeroing in the initial investigation and the review. 
6. Refuse to grant respondents separate rate. 7. Refuse to allow relevant Chinese chambers of commerce to participate in the litigation as an 
interested party. 
8. Unreasonably apply punitive duty rates dete rmined through adverse facts available (AFA) 
when calculating others rate, which is cert ainly unfair for the cooperative respondents. 
Financial services  
(WT/TPR/S/230: p. 80, para. 52) 
2. As noted from the Secretariat Report, the Chinese authorities are currently considering 
the possibility of designing a deposit insurance sch eme.  We would like to  know more details on 
the considerations involved in desi gning the scheme and its progress.  
Answer 
China attaches great importance to the protection of interest of depositors. The authority began 
legislative work in this respect as early as 2006 in order to provide a legal basis for the establishment 
the deposit insurance scheme. In terms of the guide lines for the deposit insurance scheme, preliminary 
considerations are firstly to introduce the schem e in a compulsory manner, which means that the 
scheme will cover all financial institutions in Chin a that absorb deposits, ex cept for branches in China 
of foreign banks; and secondly to appl y differentiated rates in order to contain risk-carrying behaviors 
of institutions with higher risks. As for the timing of the system, since the work in still underway, 
there is no timetable that can be specified at this stage. 
Tourism services  
(WT/TPR/S/230: pp. 97-98, para. 133) 
3. As reflected in the Secretariat Report, th e Chinese authorities are accelerating a pilot 
programme to allow foreign companies to provide outbound travel businesses.  We are 
interested to know more details of the progra mme and its timeframe for implementation.   WT/TPR/M/230/Add.1 
 Page 167 
 
 
  Answer 
The relevant measures of the pilot program for the opening of foreign tour operators to engage in 
outbound tourism is under discussion and formulation,  and will be released to promote further 
liberalization in this area when market developm ent matures. There is no timetable at present. 
TURKEY – Part 1  
Report by the Secretariat 
II. T RADE POLICY REGIME  
(5) T RADE AGREEMENTS AND ARRANGEMENTS  
(ii) Regional arrangements 
The Secretariat's report mentions that feasib ility studies were conducted for possible FTAs with 
India, Korea, and Switzerland in various years. 
Could China explain the progress, if any, with regard to these agreements?   
Answer 
At present, China is still conducting the feasibility st udies for FTAs together with the three members. 
III. T RADE POLICIES AND PRACTICES BY MEASURE  
Introduction, para. 1, page 24 
The Secretariat's report points out that "… the Government introduced a direct release system 
into its entry-exit inspection procedures to facilitate trade." 
Could China explain (1) if all importers/expo rters benefit from the new system (2) the 
procedures and conditions, if any, to be nefit from the new direct release system?  
Answer This system applies to enterprises and goods approved by General Administration of Quality 
Supervision, Inspection and Quarantine (AQSIQ) according to the Notice on Implementing the 
Inspection and Quarantine Direct Relea se System of Import and Export Goods  (AQSIQ Notice 
No. 82 of 2008) which was issued on 18 July 2008.  
For details of the direct release system, please re fer to the official website of AQSIQ for the Notice  at 
http://www.aqsiq.gov.cn/zwgk/jlgg/ zjgg/2008/200807/t2008 0721_82622.htm. 
(2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(i) Customs procedures, valuation and rules of origin, para. 12, page 25 
The Secretariat's report that "China has design ated some foreign institutions to conduct PSI 
and to issue certificates." 
Could China provide information on how much of  their trade has been subjected to the PSI 
in 2009? WT/TPR/M/230/Add.1 
Page 168  
 
  Answer 
According to Article 22 of the Regulations for the Implementation of the Law on Import and Export 
Commodity Inspection , China requires PSI on import of waste raw materials and used mechanical and 
electrical products. For the data about the trade, pl ease refer to the Customs'  statistics of China. 
(2) M
EASURES DIRECTLY AFFECTING IMPORTS  
(ii) Tariffs, para. 19, page 29  
Given that interim tariffs are not higher than th e standard applied tariffs, Could Chine explain 
the rationale behind the implementation of the interim rates? 
Answer 
In accordance with the Regulations on Import and Export Duties , interim tariffs may be applied to 
imported goods within a certain period. Please re fer to the 2010 Import and Export Tariffs of the 
People's Republic of China for more  details on interim tariffs. The Customs Tariff Commission of the 
State Council is responsible for making adjustments to the interim tariffs, putting forth adjustment 
suggestions in line with the national economic de velopment and implementi ng such adjustments upon 
approval by the State Council. 
(2) M EASURES DIRECTLY AFFECTING IMPORTS  
(ii) Tariffs, para. 28, page 33 
Could China whether (1) there is any limits on the volume of goods which may be imported by 
those residing in 20 km of the border?  
Could China explain also if there is any procedure or declaration to be fulfilled by such persons 
while importing from the bordering countries. 
Answer (for the above 2 questions) 
Border trade of local inhabitants refers to goods exchange activities within a stated amount or quantity 
by border residents within 20 km of the border line at places or market and fairs appointed or 
approved by the government. Since 1 November 2008, goods for daily use imported by border 
residents in border trade may be exempted from import tariffs and import related taxes where the 
value of the goods is less than 8000 Yuan per pe rson per day, except for goods subject to import 
prohibition or goods that are included in the list of g oods of which the taxes and tariffs are not to be 
exempted in the border trade of border inhabitants. 
(2) M EASURES DIRECTLY AFFECTING IMPORTS  
(v) State trading, para. 38, page 35 
The Secretariat's report mentions that the state tr ading enterprises are also subject to the tariff 
rate quotas. It is also stated that th e STEs are not the only beneficiaried. 
Could China confirm whether the STEs are subj ect to the same conditions and tariffs while 
applied to importation under these TRQs? 
Answer 
Regarding the TRQs, STEs and other enterprises ar e subject to the same conditions and tariffs.  WT/TPR/M/230/Add.1 
 Page 169 
 
 
  (3) M EASURES AFFECTING EXPORTS  
(v) Tax concessions under processing trade, para. 44, page  
Could China confirm whether the companies in th e processing zones benefit from tax incentives 
other than import tariffs exemptions? 
Answer Goods coming into the processing zones from abro ad which meet specified conditions may be 
exempted from taxes or bonded; domestic raw materials purchased by the enterprises in the zones do not contain value-added tax; products manufactured by the enterprises in the zones are exempted from 
value-added tax when exported; trading of goods be tween the enterprises in the zones is exempt from 
value-added tax and consumption tax. 
The Secretariat's Report mentions that in processing zones, "if certain products are not 
prohibited from being exported under normal trade, their export is allowed." 
Could China explain what constitutes "normal trade"? 
Answer 
Normal trade is the normal form of trade compar ed with the processing trade and small-scale border 
trade.  
(3) M
EASURES AFFECTING EXPORTS  
(viii) State trading, para. 90, page 46     
The Secretariat's Report mentions that "some STEs are not state owned enterprises". Could China confirm if there is any criteria (lik e different equity distribution) distinguishing 
the STEs from the SOEs other than their primary area of functioning?   
Answer 
State-owned enterprises refer to enterprises that th e State holds controlling shares or has controlling 
power. State trading enterprises refer to those enterp rise that have acquired state trading qualification 
to engage in the import and/or export trade of pr oducts listed in Annex 2A and 2B of China's WTO 
Accession Protocol.   
(3) M
EASURES AFFECTING EXPORTS  
(ix) Export facilitation, para. 92, page 47     
Could China clarify how the SINOSURE determines the interest rate, if any, charged to the 
companies or other commercial banks for export transactions? 
Answer 
SINOSURE adopts the common practice of ECAs in regard to pricing mechanism. Premium is 
calculated based on a designed premium model. Major factors of the model include country risk and 
commercial risk rating, credit terms, risks covered,  conditions of the insurance policy, operating and 
financial costs and etc. WT/TPR/M/230/Add.1 
Page 170  
 
  (4) M
EASURES AFFECTING TRADE AND PRODUCTION    
(v) IPR S  
(b) Trade Marks, para. 162-165, page 66 
Could China clarify the possible avenues for th e foreign investors in cases of trade mark 
violations? 
Answer 
The IPR assistance centres set up by the State Inte llectual Property Office (SIPO) provide services on 
reporting and complaint concerning IPRs. The centr es receive reporting or complaints from any unit 
or individual on IPR infringement or violation, a nd also transferred reporting and complaints, which 
will timely be forwarded to relevant IPR admi nistrative authorities or police authorities for law 
enforcement. Feedback will be provided at a late r stage on how the cases are handled and the final 
outcome. The centres also work on determination of IPR infringements and provision of advisory opinions on compensation estimations. 
(4) M
EASURES AFFECTING TRADE AND PRODUCTION   
(iii) State owned enterprises, private enterprises and corporate governance  
(b) Domestic Private Enterprises para. 128, page 56 
The Secretariat points out at footnote 94 that "t he SASAC identified seven industries for state 
control…." 
Could China provide the list of the seven industr ies the SASAC identified for state control? 
Answer 
China upholds the system of public ownership as th e mainstay while at the same time encouraging the 
development of multiple forms of ownership. There was no policy issued for so-called State control of 
seven industries. Article 7 of the Law on State-owned Assets of Enterprises  provides that the 
government promotes the concentration of state-owned assets in important sectors that have a vital bearing on the lifelines of national economy and na tional security. Sectors such as national defense 
industry should constitute such sectors as having a vital bearing on the lifelines of the national 
economy and national security. For these sectors, private capital participation by appropriate means is 
also encouraged, so as to promote the diversifi cation of share holders and property ownership. 
TURKEY – Part 2
 
Report by the Secretariat (WT/TPR/S/230) The Secretariat Report states that " the Government has relaxed FDI restrictions on some services 
sectors." 
Could China make a description of the sectors under consideration and the criterion that 
formed the basis for this classification?  
Answer 
As a developing country, China has been constantly  promoting the reform and opening up in the 
services sector, although the service s industry in China is still in th e early stage of development. 
China will further raise the devel opment level of the services sector  and its proportion in the national 
economy. In this respect, China will continue to cons ummate its policies for market access of services  WT/TPR/M/230/Add.1 
 Page 171 
 
 
  sectors, speed up the establishment of an open, fair , and standardized system for services suppliers 
and encourage the participation of private investment including foreign investment. To be specific, 
China is going to expand the br eadth and depth of opening up in the services sector, encourage 
foreign capital to invest in energy conservati on and environmental protection services, modern 
services such as industrial designing, outsourcing, l ogistics etc, and Chinese and foreign companies 
are also encouraged to strengthen R&D cooperation. To build sound foreign investment environment, 
China will continue to streamline procedures for qua lification and licensing. The State Council issued 
Certain Opinions on Accelerating the Development of Services Sector  in 2007 and Certain Opinions 
on Further Improving the Use of Foreign Capital  early this year. The Catalogue for the Guidance of 
Industries for Foreign Investment  will be revised for the fifth times, and Catalogue of Advantaged 
Industries for Foreign Investment in Mid-West China  will also be amended in the near future. These 
latest development will certainly result in furt her market access opportunities for foreign services 
suppliers in China.  
(I) E CONOMIC ENVIRONMENT , pr. 26, pp.7 
With regard to the current stage of economic development and reform, the Secretariat Report 
identifies the " large and persistent surplus of domestic savings over investment; China's heavy 
dependence on overseas demand for its manufactured  exports to sustain economic growth; and 
overcapacity in several of China's core industries" as major imbalances to be addressed.  
As we understand, in order to  overcome these imbalances, China is pursuing a new growth 
policy, through which domestic-consumption driv en economic growth is sought for instead of 
relying predominantly on external demand. Coul d China elaborate more on the reform efforts 
in this area? 
Answer 
As  illustrated in Government Report, increasing cons umer spending is a key element in the efforts of 
the Chinese Government to expand domestic dema nd. In 2008, the Chinese government increased the 
threshold for personal income tax, suspended pers onal income taxes on interest earnings from savings 
and stock account balance, and reduced or exempted taxes related to the purchase or sale of homes for 
residential uses. In 2009, the Chinese centr al government provided 32 billion Yuan for 
implementation of a series of consumption stimulus  programs including those for rural residents to 
purchase home appliances and motor vehicles and moto rbikes, and others for people to trade-in old 
motor vehicles and home appliances for new ones. The purchase tax on small-displacement automobiles was also halved. Thro ughout the year 13.64 million moto r vehicles were sold, which was 
an increase of 46.2% over the previous year; a nd commodity housing sales amounted to 937 million 
square meters, up 42.1%; nearly  90 million home appliances were  delivered by manufacturers 
participating in related programs, with tota l sales for the year exceeding 150 billion Yuan. 
The Chinese Government continued to push forwar d the improvement of commercial facilities in 
countryside and in urban residential communities,  promote construction and improvement of credit 
system, and encourage spending on tourism, cu ltural and recreational activities and sports. In 
July 2009 consumer financing companies were in troduced in four cities including Beijing on pilot 
basis. Many local governments with fiscal capab ilities adopted measures such as issuing admission 
tickets to tourist attractions or other service coupons in their efforts to tackle the economic downturn. 
In the course of addressing the impact of the glob al financial crisis the Chinese Government has 
always given priority to improving the well-being of the people. Measures adopted in this respect 
include those to stabilize and promote employment, in  particular those targe ting university graduates 
and migrant workers; increasing the pension for enterprise retirees; expanding the coverage of 
medical insurance and increasing the funding and the le vel of remuneration; raising the level of basic WT/TPR/M/230/Add.1 
Page 172  
 
  living allowances for low-income groups in both urba n and rural areas; increasing investment on the 
construction of housing for low-income families etc. 
(II) T
RADE POLICY REGIME : FRAMEWORK AND OBJECTIVES , pr. 16, pp. 14  
The Secretariat Report states that " An institutional change in the State Council, conducted in 
2008, affected some agencies responsible fo r China's trade policy implementation."  As is stated, 
with respect to this transformation which resu lted with the establishment and abolition of 
ministries, MOFCOM was the only one, the resp onsibilities of which were kept unchanged.  
In order to avoid any ambiguity at this point, could China elaborate more on the distribution of 
responsibilities among ministries within th e context of this new regulation?  
Answer An institutional reshuffling of the State Council w as conducted in 2008. A summary of the reform is 
as follows. 
1. Strengthening energy sector regulation by  creating National Bureau of Energy, which 
incorporated the energy sector regulatory functi ons of the National Development and Reform 
Commission (NDRC), the responsibilities of the Office of the National Energy Leading Group and the 
nuclear power sector regulatory functions of the Co mmission of Science, Technology and Industry for 
National Defence (COSTIND). The National Bureau of  Energy is under the administration of NDRC. 
2. Creating the Ministry of Industry and Information Technology (MIIT), which incorporated 
the industry regulatory functions of the NDRC, non-nuclear responsibilities of COSTIND as well as the responsibilities of the former Ministry of Info rmation Industry and the State Council Information 
Office. COSTIND, MII and the State Counc il Information Office ceased to exist. 
3. Creating the Ministry of Transport. The former Ministry of Communications, Civil Aviation 
Administration of China (CAAC) and the city-wide passenger transport related responsibilities of the 
Ministry of Construction were consolidated into the new ministry. CAAC is now under the Ministry 
of Transport, so is the State Postal Bureau which used to be under the former Ministry of Information 
Industry. 
4. Creating the Ministry of Environmental Protection with the main responsibilities of 
formulating and implementing environmental protecti on programs, policies and standards, supervising 
and administering environmental pollution preven tion and treatment, and coordinating over the 
resolution of major environmental issues. The former State Administration of Environmental 
Protection ceased to exist. 
(
III) T RADE POLICIES AND PRACTICES BY MEASURE , pr. 6, pp. 24 (also refer to pr. 78, pp. 43, 
and Box III.1, pp. 44)   
The Secretariat Report states that "China's export regime is characterized by various 
restrictions" including  "prohibitions, licensing, quotas, tax es, less than full rebates of VAT on 
exports, the effectiveness of some of which in achieving their objectives might be questioned".  
We understand that China is already in the proces s of considering alternat ive measures to some 
of these export restrictions, like levying an envi ronmental tax on some natural resources instead 
of restricting exports. Are there any other altern atives being sought by the Chinese Government 
to mitigate the inefficiencies resulting from export restrictions?  WT/TPR/M/230/Add.1 
 Page 173 
 
 
  Answer: 
China's export administration on a few products ar e for the purpose of protecting environment, 
protecting human, animal or plant life or hea lth, conserving exhaustible natural resources, or 
protecting national security. Such measures do not c onstitute arbitrary discrimination, or disguised 
restriction on international trade, and are fully c onsistent with WTO rules. Since the issue concerned 
is subject to the ongoing WTO dispute cases of DS394, 395 and 398, China will provide further 
comments after the final rulings.  
For environmental tax, relevant authorities are curre ntly studying on the issue, and we will provide 
relevant information at appropria te time according to the progress. 
(III) T RADE POLICIES AND PRACTICES BY MEASURE , pr. 60, pp. 39 
As to the Secretariat Report, " Labels must be written in Chinese, except for products 
manufactured in China for exports only". 
Could China clarify if other languages are p ermitted on the labels along with Chinese? 
Answer 
For products for sale in the Chinese market, other languages are permitted on th e labels as long as the 
labels at the same time are also written in Chinese. 
(III) T RADE POLICIES AND PRACTICES BY MEASURE , pr. 70, pp. 39 
On 23 October 2009, the ChiNext board, a new "g rowth enterprises board" aiming to attract 
innovative firms and other growing enterprises, was established in the Shenzhen Stock Exchange.  At end-October 2009, 28 companie s were listed in the ChiNext, raising about 
US$2.3 billion.  In accordance with relevant rules by the CSRC, before starting up an account 
and investing in the ChiNext, in vestors must be familiar with th e rules of "growth enterprise 
board", be well aware of the market risk, a nd have the corresponding risk tolerance. 
Could government of China explain the rules of  "growth enterprise board"? Could China give 
detailled information about "growth enterprise board"?  
Answer İn terms of the rules of the new growth enterprises board (the ChiNext as mentioned in the Secretariat 
Report), there are two categories. Firstly, there are the laws and regulations which cover both 
mainboard and the new growth enterprises board, such as the Company Law , the Securities Law , the  
Administrative Measures for the Recommendation Bu siness of the Issuance and Listing of Securities , 
the Administrative Measures for Secu rities Issurance and Underwriting . Secondly, there are rules 
which specifically apply to the new growth enterprises board, such as the   Administrative Measures 
for Initial Public Offerings and Listin g on the Growth Enterprises Board , the  Interim Provisions on 
the Eligibility Management of Investo rs in the Growth Enterprise Board , the Listing Rules of  
Shenzhen Stock Exchange on the Growth Enterprise Board  etc. For detailed information, please refer 
to the official website of China Securities Regulatory Commission at http://www.csrc.gov.cn.  
By 21 May 2010, 88 companies which plan to be lis ted in the new board have completed  their IPOs 
with the total fund raised reaching RMB 64. 76 billion Yuan, and 83 of them have been listed 
successfully. WT/TPR/M/230/Add.1 
Page 174  
 
  (III) T
RADE POLICIES AND PRACTICES BY MEASURE , pr. 77, pp. 43 
As stated in the Secretariat Report, " China removed or lowered export taxes on some products to 
mitigate the negative effects of the global crisis on  its exports;  for example, as of 1 July 2009, 
China removed or lowered export taxes on, inter a lia, wheat, rice, fertilizers, steel, and some non-
ferrous metals."  
With global crisis coming to an end, is China going to apply any shift in these tax policies as a 
result of the positive economic prospects worldwide?   
Answer 
In general, China does not have a timetable yet at th is stage for exit of the p ackage in response to the 
international financial crisis. 
(III) T RADE POLICIES AND PRACTICES BY MEASURE , pr. 94, pp. 47 
The Secretariat Report notes that,  "in an attempt to fight the global crisis, the [Chinese] 
Government launched campaigns to facilitate Ch ina's exports, such as the "421 project" by 
MOFCOM, under which US$42.1 billion in expor t credits was provided for machinery and 
electronics products in 2009".  
Could China provide more information on the terms and conditions of the referred export 
credits and whether the "421 project" is still in effect? 
Answer 
Information on the business portfolio of China Expor t-Import Bank (EximBank) is available at its 
website. The Bank's official export credit opera tion takes reference from provisions in the 
Arrangement on Officially Supported Export Credits of the OECD. Its lending interest rate is either a 
fixed one taking reference from OECD-released CI RRs or a floating one, which is a reconciled 
London Inter Bank Offered Rate (LIBOR). The Banks ' practices and operation are therefore in line 
with international norms on export credit. 
(III) T RADE POLICIES AND PRACTICES BY MEASURE , pr. 128, pp. 56 
The Secretariat Report states that "the 36-Clause in principle removed barriers for domestic 
private firms and FIEs to enter certain sect ors that had been closed to them".  
Could the Government of China identify which sectors are covered by the 36-Clause with 
respect to the removal of entry barriers? 
Answer 
For the "36-Clause" mentioned in the Report by WTO Secretariat, that is, Certain Opinions of the 
State Council on Encouraging, Supporting and Guiding the Developm ent of Individual and Private 
Economy and Other Non-Public Sectors of the Economy which was promulgated on 
19 February 2005, please visit http://www.gov. cn/zwgk/2005-08/12/ content_21691.htm. 
Furthermore, in order to widen the areas for priv ate investment, the Chinese Government promulgated 
Certain Opinions of the State Council on Encour aging and Guiding the Healthy Development of 
Private Investment  on 7 May 2010, which is availa ble at http://www.gov.cn/zwgk/2010-
05/13/content_1605218.htm.   WT/TPR/M/230/Add.1 
 Page 175 
 
 
  (III) T RADE POLICIES AND PRACTICES BY MEASURE , pr. 144, pp. 59 
As to the Secretariat Report, "M&As that lead to change of control or "decisive influence", and 
are above a certain threshold, must be notified to and obtain approval from  the Anti-Monopoly Law 
Enforcement Authority".   
Could China explain what the threshold level is in this regard? What are the consequences of 
failing to notify such M&A activity?   
Answer 
According to Article 21  of the Anti Monopoly Law , where a concentration reaches the threshold of 
notification stipulated by the State Council, a notif ication must be lodged in advance with the anti-
monopoly authority under the State Council, otherwise the concentration shall not be implemented. 
The threshold mentioned in Article 21 is prescribed in the Provisions of the State Council on 
Thresholds for Prior Notification of Concentrations of Undertakings  promulgated on 3 August 2008. 
According to Article 48 of the Anti Monopoly Law , where any business operator (undertaking) 
implements concentration in violation of this  Law without prior notification, the anti-monopoly 
authority shall order it to cease doing so, to dispose of shares or assets, transfer the business or take 
other necessary measures to restore the market situa tion before the concentration within a time limit, 
and may impose a fine of less than 500,000 Yuan.  
In addition the Secretariat Report mentions that, "foreign acquisitions of Chinese companies, if 
relating to national security, must go through a "national security review" in addition to the 
competition review."   
Could China elaborate on the definition of "n ational security" and the procedures followed in 
the "national security reviews"? 
Answer 
China is now drafting regulations on national security review over acquisitions of domestic 
enterprises by foreign investors. The regulations wo uld specify competent authorities, mechanism and 
procedures of the review. 
(III) T RADE POLICIES AND PRACTICES BY MEASURE , pr. 145, pp. 60 
As to the Secretariat Report, "the AML also allows private actions by enterprises and individuals 
when their rights related to competition are violated by monopolistic behaviour".  As we 
understand, such enterprises may raise the issue in people's courts. 
Could China clarify if there is any administrative review mechanism accessible for private 
action on competition breaches, besides people's courts? 
Answer 
According to Article 51 of the Anti Monopoly Law , where any administrative agency or an 
organization empowered by a law or administrative regulation to administer public affairs abuses its administrative power to eliminate or restrict competi tion, the superior authority thereof shall order it 
to make correction and impose punishments on the di rectly liable person(s)-in-charge and other 
directly liable persons. The anti-monopoly author ity may put forward suggestions on handling 
according to law to the relevant superior authority. WT/TPR/M/230/Add.1 
Page 176  
 
  (III) T
RADE POLICIES AND PRACTICES BY MEASURE , pr. 169-172, pp. 67 
With respect to the protection of geographical indications, our understanding is that there are 
alternative registration procedures in China in cluding registering GIs as collective marks or 
certification marks; or registering them with  the AQSIQ or Ministry of Agriculture under 
which permanent protection is provided. 
Could China elaborate further on the registr ation procedures and assessment criteria under 
each system? Could GIs be registered with the State Trademark Office or AQSIQ alternatively depending on the choice of applicants? 
Answer 
The geographical indication protection is carried ou t by the State Administration for Industry and 
Commerce (SAIC), the Ministry of Agriculture, and General Administration of Quality Supervision, 
Inspection and Quarantine (AQSIQ). They differ from e ach other in respect of legal basis, protection 
means and scope, remedies, division of duties and work focuses. The SAIC protects geographical 
indications by applying collective trademark and ce rtification trademark registration pursuant to the 
Trademark Law. Corresponding remedies for ge ographical indication infringement include 
administrative, civil and criminal ones. The Ministry  of Agriculture has registration administration for 
geographical indications of agricultural products based on administrative rules formulated in accordance with Law on Quality Security of Agricult ural Products. The focus of the protection is on 
geographical indication resources of agricultural products, product quality and traditional farming 
culture. AQSIQ's protection of geographical i ndication focuses on processing, which is based on 
administrative rules formulated in accordance with Product Quality Law. 
Applicants can choose to be registered with the Trademark Office of SAIC or AQSIQ or Ministry of 
Agriculture. 
Furthermore, could China explain the main elemen ts of the Law on Geographical Indications to 
be issued in 2010?   
Answer So far China does not have a legislation plan specifically for GIs. 
M
EASURES AFFECTING TRADE AND PRODUCTION , pp. 53  
Footnote 78 78. A foreign shareholder in these companies mus t:  (a) be a financial institution established 
according to the law of its country of origin;  (b) be located in a country that has "perfect 
securities laws and regulatory systems", and the securities regulatory institution must have 
signed an MOU on securities regulatory cooperation with the CSRC, and have kept an effective 
regulatory cooperation relationship;  and (c) must have a minimum paid-up capital in convertible currency equal to Y 300 million, ev en if it is not a major shareholder.  
Could China explain whether China has a list determining the countries that have the "perfect 
securities laws and regulatory systems"? Which co untries are they and what are the criteria of 
"perfect securities laws and regulatory systems"?    WT/TPR/M/230/Add.1 
 Page 177 
 
 
  Answer 
According to Article 9 of the Measures for the Administration of Securities Investment Fund 
Management Companies , a foreign shareholder in Chinese-foreign joint venture fund management 
companies must (a) be a financial institution establishe d according to the law of its country of origin;  
(b) be located in a country that has "perfect securities laws and regulatory systems".    
In practice, the criteria of "perfect securities la ws and regulatory systems" are that the securities 
regulatory institution has signed an MOU on secur ities regulatory cooperation with the CSRC, and 
has kept an effective regulatory cooperation re lationship. By the end of 2009, CSRC has signed 
45 MOUs with 41 countries and regions. For the list of the MOUs, please refer to the official website 
of CSRC at http:\\www. csrc.gov.cn. 
(IV) T RADE POLICIES BY SECTOR , pr. 25, pp. 74  
As stated in the Secretariat Report, " The Central Government has transferred Y 41.9 billion 
annually to compensate for the removal of the agriculture tax and the special agriculture tax." 
Could you provide an explanation on how the Ce ntral Government will finance this transfer?  
Answer Chinese central government arranges general transfer  payments in the central budget to compensate 
the local revenue losses due to the abolishment of th e agricultural tax and taxes on special agricultural 
products. 
Government report (WT/TPR/G/230) 
(ii) Basic characteristics of China's foreign Trade, pr. 59, pp. 16 As stated in the Government Report, "China's main exports are concentrated in middle and lower 
end manufacturing industries with low added value.." 
Does China have any plans to alter the comp osition of exports towards more value added 
products? 
Answer 
While making efforts to stabilize the internationa l trade and investment environment, China has 
remained committed to optimizing and transforming the pattern of foreign trade. Measures restraining 
production and consumption of certa in products have been implemen ted at home aiming to achieve 
energy-saving, emission reduction and the protecti on of ecological environment. As commensurate 
measures, the Chinese Government has continued to r estrict the export of products of high energy 
consumption or high emission a nd products of exhaustible natu ral resources, to advance the 
transformation and upgrading of processing trade, to  enhance the added-value of export products, and 
to promote the development of services trade. 
(i) New Vehicle and new fields for foreign investment  
Measures for Administration of Establishment of Partnership Business in China by Foreign 
Enterprises or Individuals was promulgated on  25 November 2009 and came into effect as of 
1 March 2010. The administrative regulation pr ovides foreign investors with a new form of WT/TPR/M/230/Add.1 
Page 178  
 
  business set-up in addition to wholly foreign -owned enterprise, equity joint venture and 
contractual joint venture.   
Could China inform us about the new form of business set-up? 
Answer 
After the promulgation of Administrative Measures for the Establ ishment of Partnership Enterprises 
within China by Foreign Enterprises or Individuals , foreign enterprises or individuals may establish 
partnership business in China.  
Foreign enterprises or individuals may set up partne rship business in China in one of the following 
two modes: first, more than two foreign compan ies or individuals set up a partnership business in 
China, with all partners being foreign companie s or individuals; second, foreign companies or 
individuals set up a partnership business in China join tly with Chinese individuals, companies or other 
organizations. 
Also, in practice there may be such cases where af ter Chinese natural persons, legal persons or other 
organizations have established partnership businesse s in China, foreign enterprises or individuals 
become partners by entering into the established partnership business or acquiring property shares of 
the partnership businesses. In this case, the fo reign enterprises or individuals shall meet the 
requirements as stipulated in the Administrative Measures  and shall go through procedures for change 
of the business registration at the enterprise registration office. 
The Administrative Measures for the Establishment of Partnership Enterprises within China by 
Foreign Enterprises or Individuals is available at http://www.gov.cn/zwgk/2009-12/02/content_ 
1478238.htm. 
MALAYSIA – Part 1
 
Government report Page 10 (Para. 31)  Since the last review, the Chinese Government has continued pursuing the 'pay-back' policies 
and strengthened further its support for agricul ture, rural areas and farmers in a bid to 
continuously increase the incomes of the farmers.  
Questions Could China please explain how the 'pay-back' policies work?   
Answer 
In recent years, China has further strengthened its  efforts in addressing the problems of rural areas, 
farmers and agriculture ("three agriculture-related" pr oblems) and issued a series of measures. By far, 
China has basically formed an agricultural suppor t policy system for safeguarding grain production, 
enhancing agricultural efficiency, increasing fa rmers' incomes and promoting comprehensive 
development of rural areas, which is consistent w ith the agricultural support rules of the WTO. The 
main supporting measures are direct subsidies for farmers, comprehensive direct subsidies for 
agricultural inputs, subsidies for using superior seed  varieties and subsidies for purchasing agricultural 
machinery and tools. Others include transfer paym ent for big agricultural counties and investment for  WT/TPR/M/230/Add.1 
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  rural infrastructure construction. Besides, China also has the minimum purchase price policy for key 
grain products and the temporary reserve policy for corn, soybean, colza and cotton. 
How does the Government of China ensure th e WTO compliance of the above mentioned 
measure? 
Answer 
China pays great attention to the compliance of WTO rules when designing agricultural policies. 
Although China has strengthened support to agricu lture in recent years, China's domestic support 
level is still much lower than the support le vel specified in China's accession commitments. 
Page 10 (Para. 33) 
Over the past two years, China formulated or amended a series of laws, regulations and rules 
concerning services sectors including insuran ce, securities, consumer credit, financial 
information services, telecommunication, legal servi ces, postal services, tourism, etc. The legal 
framework for further development of the servic es industry continued to be consolidated. On 
many specific services secto rs such as tourism, film industry, cultural industries, etc., guidelines 
on acceleration of their development were also  issued, proposing to lower further the access 
thresholds, to have more participation of private and foreign capital and to encourage the 
development of SMEs. To keep abreast of th e technological and market development, the 
Chinese Government also proposed to phase in th e integration of telecommunications networks, 
cable television networks and the internet for ul timate interconnection and resource sharing.     
Questions Would China please explain efforts relating to the liberalisation of the education and health 
services?   
Answer 
On education services:  
After accession to the WTO, China has seriously im plemented the commitments in education services 
sector, the scope of opening up has constantly broade ned, and cooperation with other countries further 
enhanced.  
As China committed no restriction on studying  or accepting other education services abroad, the 
number of students studying abroad has increased fastly, especially those self-funded students. China 
has become one of the largest source countries of international students.  
Joint schools and education programme s have developed fastly with quality further improved, scope 
broadened and forms more divers ified. There are currently 1,205 approved joint schools and 
programmes in 26 provinces, autonomous regions or municipalities.  
The number of foreign teachers employed by high edu cation institutions is steadily increasing. China 
committed to allow qualified foreign individual education service suppliers to provide education 
service if they are employed by Chinese schools or other education institutions.  
China has established exchanges and cooperation in education sector with 188 countries and regions 
and has signed mutual recognization agreement on ac ademic degrees or certificates with 35 countries 
and regions, which further promoted the liberalizatio n of the education sector, facilitated international WT/TPR/M/230/Add.1 
Page 180  
 
  students exchanges and provided better regulatory frame work for the healthy development of trade in 
education services. 
On medical services: 
China adopted following measures in the opening up of the medical services. 
Firstly, Ministry of Healthy and Ministry of Commerce promulgated the  Interim Measures for 
Administration of Chinese-Foreign Equity and Cont ractual Joint Venture Medical Institutions to 
allow foreign investors to establish joint ventur e and cooperative medical institutions in China.  
Secondly, China allows foreign doctors to prac tice in China for short term. According to the Interim 
Measures for the Administration of Foreign Doctors Practicing in China for Short Terms , foreign 
doctors with qualifications to practice in a foreign co untry may practice in China if they are invited or 
employed by a Chinese medical institution, have ag reement signed with it and have registered and 
acquired the permit for foreign doctors to practice for short term. The effective period for the permit 
for foreign doctors to practice is one year. If the permit needs to be renewed upon expiry, a new 
registration is required according  to the above mentioned rule. 
How does the Government encourage more part icipation of private and foreign capital to 
further develop these services sub-sectors?  
Answer 
The State Council has recently issued the policies to  further encourage and guide private investment 
into services industries, including providing a better legal environment, streamlining licensing 
requirements and procedures and strengthening government services for investors. 
Page 18 (Para. 65) 
In April 2009, the State Council decided to launc h a pilot program to settle the cross-border 
trade in RMB in Shanghai and other four cities  of Guangdong Province, namely Guangzhou, 
Shenzhen, Zhuhai and Dongguan.  The implementati on measures followed up in July that year.  
Settlement in RMB for cross-border trade can facilitate trade and investment, and help 
enterprises avoid the risk of fluctuations in  the exchange rate of major currencies for 
international settlements.  Currentl y, the Chinese Government is taking stock of the pilot work 
through case studies and trying to improve th e supporting policies and measures so as to 
advance the pilot program.   
Questions 
Would China please explain the effectiveness of th e pilot program on settlement of cross-border 
trade in RMB?   
Answer 
To deal with global financial crisis and to prom ote the development of trade between China and its 
neighboring countries and regions, China decided in  April 2009 to launch a pilot programme of 
settlement of cross-border trade in RMB in Shangha i, and the cities of Gua ngzhou, Shenzhen, Zhuhai 
and Dongguan in the Guangdong Province. The programme so far has been going on smoothly. The 
channels of settlement in RMB function well a nd various lines of business are conducted in good 
order, which have simplified procedures of pilot enterprises and facilitated trade and also helped  WT/TPR/M/230/Add.1 
 Page 181 
 
 
  import and export enterprises to avoid effectively exch ange rate risks. By the end of April 2010, the 
total volume of settlement of cross-border trade in RMB has reached over RMB 30 billion. 
How does the Government of China intend to enhance the utility of this settlement program?   
Answer 
China would take the following steps to promote the settlement of cross-border trade in RMB 
according to actual conditions.  
Firstly, to gradually expand the domestic pilot areas , and eliminate the restrictions on countries and 
regions that may involve in the settlement of cross- border trade in RMB to a llow enterprises to do the 
settlement with any countries or regions willing to settle in RMB.  
Secondly, to steadly explore and carry out on pilot basis various cross-border RMB businesses like 
cross-border direct investment in RMB and trade financing in RMB in an orderly manner.  
Thirdly, to look into the request of overseas capital in  RMB to invest in domestic financial market and 
gradually promote the opening up of domestic financia l market provided that the risk is under control. 
On 17 June 2010, China further expanded the pilo t programme of cross-border trade settlement in 
RMB, and the areas in China joining the pilot pr ogramme have been expa nded from Shanghai and the 
four cities in the Guangdong Province to a ltogether 20 provinces, autimonous regions and 
municipalities including Beijing, Tianjin, Inner Mongo lia, Liaoning, Shanghai, Jiangsu, Zhejiang, 
Fujian, Shandong, Hubei, Gua ngdong, Guangxi, Hainan, Chongqing , Sichuan, Yunnan, Jilin, 
Heilongjiang, Tibet, and Xinjiang etc. Meanwhile, there would be no longer restriction on overseas 
areas where cross-border trade settlement in RMB could be done. Enterprises may settle  their cross-
border trade in RMB with business partners in a ll countries and regions that are willing to accept 
RMB for settlement. 
Page 20 (Para. 82) 
The amended Catalogue of Advantaged Industries for Foreign Investment in Mid-West China 
(2008) came into force in 2009.  Foreign inv estment projects listed in the Catalogue are 
regarded as encouraged foreign investment projects as provided in the Catalogue for the 
Guidance of Industries for Foreign Investment.  Central and western regions of China have 
opened up more fields to foreign investment on larger scale.  
Question Would China please explain the fields which are opened to private and foreign capital 
participation in the Central and Western regions  and what are the incentives for investing in 
these areas?   
Answer 
The newly revised Catalogue of Advantaged Industries for Foreign Investment in Mid-West China  is 
the consolidation of advantaged industries in  provinces, municipalities and autonomous regions in 
Mid-West China and in the northeasten old Industria l bases based on their different situations. The 
objective is to guide and encourage foreign invest ment and to promote economic development in the 
Mid-West China. The new Catalogue covers 21 provinces, autonomous regions and municipalities 
and contains 411 specific entries for investment, wh ich is an increase of 126 entries as compared to WT/TPR/M/230/Add.1 
Page 182  
 
  the Catalogue revised in 2004. Another 154 entries in  the previous Catalogue are revised. The revision 
of the Catalogue further expands th e field and scope  for foreign investment in Mid-West  China.  
For specific entries in the Catalogue, please vi sit http://www.ndrc.gov.cn/zcfb/zcfbl/ 2008ling/t2008 
1224_253113.htm.  
Secretariat Report 
II. T
RADE POLICY REGIME :  FRAMEWORK AND OBJECTIVES  
Page 11 (Para. 1) 
China's overall trade policy aim has remained unchanged since its previous Trade Policy 
Review;  it is to accelerate the opening of its eco nomy to the outside world, to introduce foreign 
technology and know-how, develop foreign trade, and promote economic development that is "mutually beneficial" with its trading part ners.  In this context, China has recently 
concentrated more on the opening up of its services sectors.  
Questions 
Does China have any plans to unilat erally liberalise the services sectors? 
If so, could China please elaborate on th ese plans and the anticipated timeframes?  
Answer (for the above 2 questions) China has made extensive and substantial commitme nts when acceding to the WTO. On top of that, 
China has made further autonomous liberalization in  some services sectors after accession. China will 
decide next steps of liberalization according to the development of services sectors and regulatory 
capacity. Currently, there is no detailed plan or timetab le for further liberalization. China is willing to 
discuss with other Members on the further libera lization of services sectors in the DDA negotiations. 
Page 13 (Para. 14) 
The authorities state that the Central govern ment has various programmes to reduce inter-
provincial trade barriers and other barriers to intern al trade, for example, the introduction of: 
Certain Regulations on Prohibiting Anti-Compe titive Practices by Public Enterprises; the 
Interim Regulations on the Prohibition of Comm ercial Bribery; and the Interim Regulations on 
the Prohibition of Collusive Bidding Practices; as well as the Anti-Monopoly Law.   
Questions 
Could China explain how effective are these progr ammes in narrowing regional gaps in income 
and living standard?  
Answer 
The above laws and regulations ar e promulgated to regulate acts that  may damage the fair and just 
market order and infringe the legal rights and inte rests of consumers. They are not targeted at 
addressing problems like narrowing inter-regional income  differences and living standard differences. 
At present, Chinese government has not conducted research on the relationship between the above 
laws and regulations and the narro wing of inter-regional income and living standard differences.     WT/TPR/M/230/Add.1 
 Page 183 
 
 
  Are these regulations also applicable to foreign -invested enterprises (FIEs) operating in the 
Provinces?  
Answer 
Laws and regulations like Anti-monopoly Law are equally applicable to all business operators 
including FIEs that are conducting production and operation activities in China.   
III. T RADE POLICIES AND PRACTICES BY MEASURE  
Page 24 (Para. 1) 
Nonetheless, the Government still uses various means (including tariff and non-tariff barriers, 
export restraints, and state-ownership) to, inter a lia, provide 'guidance' on the allocation of 
resources.  
Questions Could China please elaborate further on what constitute as 'guidance'?  How does the Government of China ensure th e WTO compliance of the above mentioned 
measure?  
Are there any measures implemented to reduce non-tariff barriers?  
Answer (for the above 3 questions) 
China does not agree with this st atement of the Secretariat in its Report. Tariffs and non-tariff 
measures including those concerning exports are normal trade policy tools to the extent that they are 
consistent with the WTO rules and with the comm itments of the member concerned in the WTO. 
Such issue as whether an enterprise is state-ow ned or not in itself also does not have direct 
relationship with the rules of the WTO. Policies and measures of a particular member are based on its 
specific development level and national situation. What matters as a WTO member is whether they are WTO consistent and whether they are in favo ur of the general policy direction of trade and 
investment liberalization. In the case of China, tari ffs and non-tariff measures have all been notified to 
the WTO and are therefore transparent. It is not difficult to see from our notifications that China's 
non-tariff measures have been decreasi ng since its accession into the WTO. 
Page 25 (Para. 8) 
SOEs have been benefitting disproportionate ly from the Government's economic stimulus 
measures to boost the economy, although the authorities maintain that this is not the intention of the Government. SOEs also have much be tter access to capital than private enterprises.    
Question 
Could China please explain how this practice is WTO consistent?  
Answer 
Implementation of the economic stimulus package do es not distinguish the ownerships of enterprises. 
Enterprises of all different ownerships have be nefited from the economic stimulus package. For 
example, major participants of the home applian ces for rural residents program and home appliances WT/TPR/M/230/Add.1 
Page 184  
 
  trade-in program are non-SOEs including FIEs. Anot her example is infrastructure construction which 
takes a large share in the stimulus plan. While many  general contractors of these construction projects 
may be State-owned enterprises, most sub-contr actors will be non-SOEs, and many suppliers of 
equipments are FIEs and even foreign companies.  
Page 25 (Para. 12) 
China's preshipment inspection (PSI) requireme nts, introduced in December 2005, remain 
unchanged. PSI is required for imports of:  cer tain commodities related to national security, 
with high value or complicated technology;  equipment exceeding certain height, length or volume;  solid waste used as raw materials;  and certain used electronic products that are 
deemed to affect public health and environment. China has designated some foreign institutions 
to conduct PSI and to issue certificates.  It is not clear to the Secretariat whether China sends 
people or institutions abroad to conduct PSI inspections.   
Question 
Please provide further information and explanation on the mechanism practised by China in 
relation to the PSI inspection.  
Answer According to Article 22 of the Regulations for the Implementati on of the Law on Import and Export 
Commodity Inspection , China requires PSI on import of waste raw materials and used machinery and 
electrical products. 
The nature of waste raw materials and used mach inery and electrical products determines that they 
pose a relatively high environmental and safety risk . In particular, disordered import of toxic and 
hazardous waste regulated by the Basel Convention may cause environmental pollution in the 
importing country and enda nger people's safety. Several severe  environmental pollution incidents 
caused by imported solid waste occurred in China in  the 1990s. Besides, once disqualified and unsafe 
used machinery and electrical products enter into a country, it will be very difficult to return the 
cargo, which will largely increase the administrative  cost at the ports and difficulty of effective 
disposal. As a result, China decides to carry out PSI for the above two types of products. It is proved that by conducting PSI, the arrival risk of disqua lified products can be reduced, environmental quality 
and safety of imported waste raw materials and used  machinery and electrical products improved and 
risk of environmental pollution and human injury incidents reduced. 
The Regulations for the Implementation of the Law on Import and Export Commodity Inspection  
adopted on 1 December 2005 specified that PSI s hould be carried out on import of waste raw 
materials and used machinery and electrical products. Article 29 of the Rules on Administration and 
Supervision of Inspection and Quarantine on Solid  Waste Imported as Usable Raw Materials  (AQSIQ 
Decree No. 119, G/TBT/CHN/649) also specified that  before the waste raw materials enter China, 
foreign suppliers should apply for PSI to AQSIQ or its authorized bodies. 
Rules on Administration of Inspection and Supervisi on of Import of Used Machinery and Electrical 
Products  (AQSIQ Decree No. 37) and Rules on the Inspection and Supervision Procedures for Import 
of Used Machinery and Electrical Products  (AQSIQ Decree No. 53) also contain similar provisions.  WT/TPR/M/230/Add.1 
 Page 185 
 
 
  Page 34 (Para. 34) 
Non-automatic import licences 
In 2009, 95 tariff lines (at the HS 8-digit level) were subject to non-auto matic import licensing; 
the lines cover ozone-depleting substances, and sp ecific old mechanical and electronic products.  
Applicants must apply for an import permit prio r to applying for an import licence.  Import 
permits are issued by the Ministry of Envi ronmental Protection or MOFCOM, depending on 
the product. Once the permit is obtained, a licen ce is granted automatically by MOFCOM to the 
importer. The licence is valid throughout the calendar year, and can be extended once, for a 
maximum of three months.   
Questions 
Does China have any plans to reduce its use of non-automatic licensing restrictions?  
If so, please elaborate. If not, why not?  
Answer (for the above 2 questions) 
Currently China implements non-automatic import li cense administration mainly on two categories of 
products, i.e., ozone layer deple ting substances and used mechanical and electrical products. The 
import license administration of ozone layer depletin g substances is adopted by China to implement 
The Montreal Protocol on Substan ces That Deplete the Ozone Laye r; while the import license 
administration of used mechanical and electrical products mainly covers those products that may 
endanger social and pubic interests, health and safet y of people and safety and health of animals and 
plants or may pollute the environment. These measur es are not inconsistent with the WTO rules. At 
present, China has no plan to reduce further pr oducts subject to import license administration. 
Are there any activities (production, marketing or  distribution, for example) reserved for 
certain enterprises?  
Answer Except for state trading, there exis ts no such situation. For details on state trading, please refer to the 
part of state trading in Chapter III of the Secretariat Report. 
What steps are taken to ensure that China's im port licensing requirements are transparent and 
easily accessible to the foreign trading community?  
Answer 
On transparency of import licensing system, firstly, China submits notifications related to import 
licensing procedures to WTO Import Licensing Comm ittee and Market Access Committee every year; 
secondly, Chinese government promulgates the list of products subject to import license administration every year, see http://www.mo fcom.gov.cn/aarticle/b /c/201001/ 2010010672 
9522.html. 
Will the "Buy China policy" impose stricter import  requirement to import s such as automobile 
parts.   WT/TPR/M/230/Add.1 
Page 186  
 
  Answer 
Chinese government has no "Buy China policy" othe r than requiring giving priority to domestic 
goods, services and projects in government procurement.  Please inform China of such policies, if 
Malaysia finds any. 
Page 35 (Para. 43) 
China has four types of standards:  national, professional, local, and enterprise standards.  
Within the national, professional, and local standards categories, there are voluntary and 
mandatory standards.  In 2007 (the latest year for which data were available), around 14.5% of 
national standards, 15% of professional st andards, and 19% of local standards were 
mandatory.  Voluntary standards, however, can become mandatory if they are referenced in 
mandatory conformity assessment procedures.  Concerns were raised in the TBT Committee in 
cases where no advance notice was gi ven regarding such changes. 
Questions 
It is stated in the Secretariat report that Chin a has 4  types of standards that are mandatory, 
national, professional and local. We request the following information with regard to professional and local standards:  
Which organisations are responsible for deve loping professional and local standards 
respectively?   
Answer 
As specified in the Standardization Law , the following agencies and entities are entitled to develop 
standards. These are the competent department in charge of standardization under the State Council, 
other relevant competent departments under the St ate council, the administrative departments for 
standardization in the people's governments in th e provinces, autonomous regions and municipalities 
directly under the Central Government, the administ rative agencies in charge of standardization and 
the relevant competent administrative agencies in ci ties and counties. All sectoral and local standards 
should be filed for recording with Standardization Ad ministration of China (SAC) so as to ensure that 
they are in consistency with WTO rules. 
From which organisations are catalogues of pr ofessional and local standards available? Are 
these available on any websites?  
Answer Please refer to SAC's official website for info rmation in this regard at www.sac.gov.cn. 
Where can lists of mandatory professional  and local standards be obtained?  
Answer 
Please refer to SAC's official website for info rmation in this regard at www.sac.gov.cn. 
Malaysia seeks some additional information on the implementation of mandatory standards in 
China.   WT/TPR/M/230/Add.1 
 Page 187 
 
 
  Is the Compulsory Product Certification System that results in the use of the CCC mark the 
sole method of implementing  mandatory standards?   
Answer 
The Compulsory Product Certification System is not the sole method of implementing mandatory 
standards. 
Does China use Type Approval mechanism for implementation of mandatory standards 
currently or any plans to utilise such m echanisms in future in any sectors?  
Answer 
According to provisions in the Standardization Law , products subject to safety requirements such as 
explosion proof electric apparatus should get type  approval before mass production. Where no other 
market access system is involved, type approva l certificate should be enclosed in product sales. 
Does China use the Suppliers Declaration of Conf ormity (SdoC) for mandatory standards or 
have any plans to use this in future for any sectors or products.  
Answer 
Accepting suppliers declaration of conformity as mandatory standard needs the guarantee from a 
series of rules and regulations. At present, conditi ons are not ripe for China to accept suppliers 
declaration of conformity as mandatory standard. 
Which authority(ies) in China determines the need for mandatory certification? Is this 
determination undertaken by AQSIQ?  
Answer 
The General Administration of Quality Supervision,  Inspection and Quarantine (AQSIQ) is in charge 
of the compulsory certification of products. Cer tification and Accreditation Administration of China 
(CNCA) is responsible for the organization and im plementation, supervision and administration and 
comprehensive coordination of the compulsory certif ication of products. The AQSIQ, CNCA together 
with relevant departments under the State Council determine and adjust th e Catalogue of Products 
Subject to Compulsory Certification, which ar e issued jointly by the AQSIQ and CNCA and 
implemented by AQSIQ, CNCA and other relevant departments. 
Page 39 (Para. 61)  Government Procurement There have been no substantial changes to  China's regulatory regime or institutional 
framework for government procurement.  The Gov ernment's objectives of improving efficiency 
in the use of public funds, protecting the rights and interests of the parties participating in 
government procurement, and promoting better governance have not changed. 
Question Does China intend to liberalize its government proc urement policies, with a view to allowing 
greater participation of FIEs?   WT/TPR/M/230/Add.1 
Page 188  
 
  Answer 
China is negotiating with interested parties on the accession to WTO Government Procurement 
Agreement (GPA) for the purpose of opening up gove rnment procurement market and giving national 
treatment to enterprises and products from GPA me mbers in government procurement according to 
the principle of reciprocity. 
Chinese government is solicitating public opinions on Administrative Measures on Government 
Procuring Domestic Product (Draft) , in which the identification st andards and proc urement policies 
are equally applicable to products manufactured  by foreign invested enterprises and domestic 
enterprises in China. 
Page 42 (Para. 75) 
Export subsidies 
The authorities state that China does not provide any export subsidies.  China made 
commitments, when it joined the WTO, not to main tain or introduce any export subsidies to its 
agricultural products.   
Questions China made commitments not to maintain or intr oduce any export subsidies to other products?  
If yes, will China notify export subsidies for its agricultural products. Does China give those 
subsidies in accordance with Article 25 of ASCM  and how are those subsidies consistent with 
Article 3 of ASCM? 
Answer 
China has eliminated export subsidies sin ce 1991 and has made commitment upon WTO accession. 
However, due to the technical complexity of subs idy, members often have different understanding on 
what would constitute an export subs idy. This is not surprising. China's position on this issue has been 
clear and consistent, i.e. we will observe the WTO rules and China's accession commitments.  
Is there any mechanism in place for assessment of new subsidy programmes before it is 
implemented to ensure consistency with relevant WTO Agreements?  Please explain. 
Answer 
Before promulgation, such policies and measures will be submitted to Ministry of Commerce for 
consultation to ensure that they are consistent with WTO rules. 
Page 45 (Para. 82) 
Products listed in the Catalogues of Products s ubject to Export Prohibitions are prohibited 
from being exported under normal trade, mainly  because of China's international obligations 
and domestic considerations regarding enviro nmental and human health protection, and 
preservation of natural resources.  China has rel eased five batches of export prohibition 
catalogues since its accession to the WTO;  the la st took effect on 1 January 2009.  Three tariff 
lines at the HS 8-digit level were added, covering some peat and animal or vegetable fertilizers.  
In total, China maintained general export prohibitio ns on 45 items at the HS 8-digit level in 009.   WT/TPR/M/230/Add.1 
 Page 189 
 
 
  Question 
It is noted that China imposed export restrictions  on nine raw materials, namely bauxite, coke, 
fluorspar, silicon carbide magnesium, manganese,  silicon metal, yellow phosphorus and zinc. 
These raw materials are key inputs for numerous do wnstream products in the steel, aluminium, 
and chemical sectors. These restrictions may di stort competition and increase global prices as 
some of these raw materials are only  available from Chinese producers.  
Can China please explain how these restrictions are in accordance with Article XI:1 of GATT?   
Answer 
China's export administration on a few products are for the purpose of protecting environment, 
protecting human, animal or plant life or hea lth, conserving exhaustible natural resources, or 
protecting national security. Such measures do not c onstitute arbitrary discrim ination, or disguised 
restriction on international trade, and are fully co nsistent with WTO rules. Since the issue concerned 
is subject to the ongoing WTO dispute cases of DS394, 395 and 398, China will provide further 
comments after the final rulings.   
Page 58 - 61(Para. 140 - 148) 
Competition policy 
China has a variety of laws and regulations relat ed to competition policy.  A major addition 
during the period under review is the Anti-Monop oly Law (AML), which entered into force on 
1 August 2008.  Other competition-related legislation includes the Anti-Unfair Competition Law, the Price Law, the Law on Bid Invitation  and Bidding or Tendering, and the Rules on 
Acquisitions of Domestic Enterprises by Foreign  Investors.  Regulations for certain sectors, 
such as aviation, electricity, postal and teleco mmunications services, and those issued by local 
governments, also contain provisions on market competition.  The Anti-Monopoly Law does not 
take precedence over other competition-related legislation.   Questions 
Could China provide a more detailed informatio n on the Anti-Unfair Competition Law and 
whether there exist such overlaps between An ti-Unfair Competition Law and Anti-Monopoly 
Law in the protection of fair competition in China? Following the introduction of Anti-Monopoly law is there still a need to enforce the Anti-Unfair Competition Law? 
Answer The current Law against Unfair Competition  does contain stipulations on certain competition 
restricting behaviors and such behaviors are to  certain degree similar to those regulated by Anti-
Monopoly Law  in terms of the form of expression. However, there are significant differences between 
competition restricting behaviors under Law against Unfair Competition  and those under Anti-
Monopoly Law  in terms of business operator's market power, concentration level etc. Objects 
regulated by the two laws are different. The Anti-Monopoly Law  is not a simple repetition of the Law 
against Unfair Competition . They are rather complementary to each other. 
Could China please clarify the exemption mechanism against anti competitive conduct 
established under the Anti-Monopoly Law and does it  accord special protection to Government 
Linked Companies or State Trading Enterprise. WT/TPR/M/230/Add.1 
Page 190  
 
  Answer 
Article 15 of the Anti-Monopoly Law stipulates that if an agreement among business operators can be 
proven to be in any of the following 7 circumstanc es, it shall have exemption. The circumstances are 
that the agreement is (1) for the purpose of im proving technologies, resear ching and developing new 
products; (2) for the purpose of upgrading produc t quality, reducing cost, improving efficiency, 
unifying product specifications or standards, or carrying out professional labor division; (3) for the 
purpose of enhancing operational efficiency an d reinforcing the competitiveness of small and 
medium-sized business operators; (4) for the purpose of achieving public interests such as conserving 
energy, protecting the environment and relieving the victims of a disaster and so on; (5) for the 
purpose of mitigating serious decrease in sales  volume or obviously excessive production during 
economic recessions; (6) for the purpose of safeguardi ng the justifiable interests in foreign trade or 
foreign economic cooperation; or (7) other circumst ances as stipulated by laws and the State Council. 
Where a monopoly agreement is in any of the circumstances stipulated in items 1 through 5, the business operators must additionally prove that th e agreement can enable consumers to share the 
interests derived from the agreement, and will not sev erely restrict the competition in relevant market. 
Through the implementation of the Anti Monopoly Law , China hopes to prevent monopolistic 
conducts from restricting competition, promote and protect enterprises of various ownership 
structures to grow through fair competition, and thus promote the formation of a mechanism for 
"survival of the fittest" and the transforma tion of economic growth pattern. Therefore, Anti Monopoly 
Law applies equally to monopolistic  conducts of domestic and fore ign enterprises of different 
ownership structures. There will be no differential treatment among enterprises of different ownership 
structures 
Could China please also clarify the treatment of Intellectual Property Rights under the Anti-
Monopoly law and as to whether one is superior to another? Has any guideline been issued on 
this matter?  
Answer 
Article 55 of the Anti Monopoly Law  of China prescribes that this law shall not apply to the conduct 
of business operators (undertakings) to exercise th eir intellectual property rights under relevant laws 
and administrative regulations on in tellectual property rights; however, this law shall apply to the 
conduct of business operators to eliminate or restri ct market competition by abusing their intellectual 
property rights.  
In our opinion, the Anti Monopoly Law  of China has defined the act of abuse of intellectual property 
rights. The abuse of intellectual property rights und er antimonopoly context refers to the improper 
uses of intellectual property rights by business operato rs which result in eliminating or restricting 
competitions and constitute a monopoly agreemen t, abuse of dominant market position or 
concentration of business operators prohibited by the Anti Monopoly Law .  
According to the provisions of the Anti Monopoly Law , Chinese antimonopoly enforcement 
authorities are now conducting in-depth research on i ssues of intellectual property rights in relation to 
antimonopoly.  
Could China clarify further on the quantum of penalty imposed against any infringement of the 
Anti-Monopoly Law and the number of cases undertaken so far?   WT/TPR/M/230/Add.1 
 Page 191 
 
 
  Answer 
After the Anti-Monopoly Law  came into force, the State Administration of Industry and Commerce 
(SAIC) has received some complaints, some of them  are suspected cases in violation of the Anti-
Monopoly Law . Investigations are still going on. 
IV. T RADE POLICIES BY SECTOR  
Page 79 (Para. 46) 
The Government has placed more emphasis on  developing services by way of further 
liberalization of sectors, including financial servi ces, telecommunications, and tourism.  While 
the presence of SOEs is considerable in key services sectors, such as banking, telecommunications, and civil aviation, and th ere are still significant restrictions on foreign 
investment and private-sector activities, China ha s adopted some measures to further liberalize 
services, particularly financial services, te lecommunications, and tourism.  China's 
commitments under the General Agreement on Trad e in Services have not changed since its 
previous Review;  the authorities consider that  China had already implemented some of its 
GATS commitments ahead of the dates envisage d, and recent reforms are part of an ongoing 
liberalization process since its accession to the WTO.  
Question 
It was noted in the Secretariat's Report that  the Government has adopted some measures to 
further liberalise financial, te lecommunications and tourism. Could China please elaborate on 
these measures? 
Answer 
As a developing country, China has been constantly  promoting the reform and opening up in the 
services sector, although the service s industry in China is still in th e early stage of development. 
China will further raise the devel opment level of the services sector  and its proportion in the national 
economy. In this respect, China will continue to c onsummate its policies for market access of services 
sectors, speed up the establishment of an open, fair , and standardized system for services suppliers 
and encourage the participation of private investme nt including foreign invest ment. To be specific, 
China is going to expand the br eadth and depth of opening up in the services sector, encourage 
foreign capital to invest in energy conservati on and environmental protection services, modern 
services such as industrial designing, outsourcing, l ogistics etc, and Chinese and foreign companies 
are also encouraged to strengthen R&D cooperation. To build sound foreign investment environment, 
China will continue to streamline procedures for qua lification and licensing. The State Council issued 
Certain Opinions on Accelerating the Development of Services Sector  in 2007 and Certain Opinions 
on Further Improving the Use of Foreign Capital  early this year. The Catalogue for the Guidance of 
Industries for Foreign Investment  will be revised for the fifth times, and Catalogue of Advantaged 
Industries for Foreign Investment in Mid-West China  will also be amended in the near future. These 
latest development will certainly result in furt her market access opportunities for foreign services 
suppliers in China.  
China has also summarized the latest development in  its further opening of the services sectors since 
last review in the Government Report prepared fo r this review. Malaysia may also refer to that 
document for details. WT/TPR/M/230/Add.1 
Page 192  
 
  Page 98 (Para. 135) 
The Law on Lawyers was amended on 28 October 2007 and entered into force on 1 June 2008;  its 
implementing rules, the Measures for the Administra tion of Law Firms, as well as the Administrative 
Measures for the Practice of Law were issued on 18 July 2008.  The amended law and rules stipulate 
the establishment, practice, and administrative rules of law firms, and licensing requirements and 
practices of lawyers, and provide for the protecti on of occupational rights of lawyers.  They are 
intended to improve the legal framework for a rapi dly changing environment for China's legal service 
sector.  The amendment did not affect the regulatory environment for foreign lawyers and foreign law firms operating in China.   
Question 
It is noted that China does not have a write up on professional services, except for lawyers. 
Could China please indicate the measures taken for liberalisation in professional services, such 
as accountancy, engineering, etc.   
Answer 
For accounting services, China has made relatively high-level commitments in opening its accounting, 
auditing and bookkeeping services at the time when  it acceded to WTO, and has a higher level of 
opening-up than most members in all the 4modes of cross-border supply, consumption abroad, 
commercial presence, presence of natural persons. Re garding the sub-sector CPC862, in respect of 
market access, no special restriction was set except fo r the provision that partnerships or incorporated 
accounting firms are limited to CPAs licensed by th e Chinese authority. Also, foreigners may take 
part in the CPA examination and obtain practice lic ense in China. In respect of national treatment, 
except for the horizontal commitment regarding presence of natural persons, there is no other 
restriction. Besides, China also allows the re presentative offices of foreign accounting firms to 
provide taxation and management advisory services, and these representative offices are not subject to 
the requirements of WTO CPC865 and 8630 on establishment forms. 
Personnel engaging in accounting services in China are subject to the professional qualification 
system. In accordance with Articles 38.1 and 38.3 of the Accounting Law , a person engaging in 
accounting work shall obtain a professional accountant certificate, and measures for the administration of professional qualifications for account ants shall be formulated by the Ministry of 
Finance. On 12 January 2005, Ministry of Finance issued the Administrative Measures for 
Professional Qualifications for Accountants . Article 38 of the rule provides that it is applied to cases 
where citizens of the Hong Kong Special Admi nistrative Region, Macao Special Administrative 
Region and Chinese Taipei and foreign citizens apply for the certificate of professional qualifications 
for accountants. 
To sum up, either compared with other professional sectors or with that of other countries, the 
accounting service sector in China is already quite ope n. China at this stage has no plan of further 
liberalization. 
In respect of engineering services, China has faithfully honored its accession commitments. China 
repealed rules and administrative measures inc onsistent with accession commitments and WTO 
principles, and promulgated new ones to confirm and implement the commitments. China also took 
initiatives to fulfill part of the commitments earlie r that the committed schedule. For example, the 
Rules on Administration of Qualifications fo r Foreign-invested Construction Enterprises  (Decree 
No.113 of Ministry of Construction and the fo rmer Ministry of Foreign Trade and Economic 
Cooperation) was promulgated in 2002, allowing foreign capital construction enterprises to be 
established 2 years earlier than the time set out in the accession commitments and at the same time  WT/TPR/M/230/Add.1 
 Page 193 
 
 
  abolishing the discriminatory requirements on qua lifications for foreign-invested construction 
enterprises. 
China always welcomes enterprises of all members to  invest in the construction sector in China. It 
surely will contribute to technological communicatio ns between China and these members and also to 
the development of the Chinese construction sector . Chinese government will faithfully implement its 
WTO commitments, observe WTO basic rules, and promote a sound market environment for foreign 
enterprises to invest in the construction sector in China. 
MALAYSIA – Part 2  
Government report 
Page 11 (Para. 35)  Scientific and technological innovation is the ke y to China's transformation of the pattern of 
economic development to achieve sustained eco nomic growth. In 2006, the Chinese Government 
promulgated Outline of the National Program  for Long and Medium-Term Scientific and 
Technological Development (2006-2020), striving to create an environment in favour of 
scientific and technological innovation and to speed up the construction of an innovative society. 
As a developing country, China still lags behind in its overall development level of science and 
technology, with quality of scientific research not high enough and funding in the field of science 
and technology still insufficient. In particular, wi th respect to import of high-tech products and 
transfer of technology, China, like other developi ng countries, has long been subject to unfair 
and unreasonable unilateral restrictions impo sed by some developed countries having 
comparative advantages in this regards.   
Questions  
Could China explain in detail the main component of the National Program for Long and 
Medium-Term Scientific and Technological Development (2006-2020) and its achievement to 
date?  
Answer 
The Outline of the National Program for Long a nd Medium-Term Scientific and Technological 
Development (2006-2020)  was promulgated by the State Council in 2006. It is available at 
http://www.gov.cn/jrzg/2006-02/09/content_183787.htm. 
To implement the Outline  and to promote the construction of an innovative society, governments at 
all levels increase spending on science and technology development. Enterprises attach more 
importance to innovation activities. Promotion of th e transition of the economic development pattern 
has been accelerated. 
It is stated in the report that China's "scien tific research not high enough and funding in the 
field of science and technology still insufficient"  and "has long been subject to unfair and 
unreasonable unilateral restrictions  imposed by some developed countries" in importing high-
tech products. Could China share its exp erience on how to address these issues?   
Answer 
China has established such important thinking that science and technology are the primary productive 
force and that China should build itself into an innovative country. China believes that science and WT/TPR/M/230/Add.1 
Page 194  
 
  technology development should contribute to economi c construction, and prior ity should be given to 
key bottleneck issues in the development of scien ce and technology. China persists in pressing 
forward reform in this area, and gives full play to  the fundamental role of market mechanism in the 
allocation of science and technology resources. Ch ina follows the development trend of science and 
technology and plans the projects in basic scien ce and frontier technologies with a forward-looking 
sense so as to improve the sustainable developmen t capability of science and technology. China pays 
great attention to the building of the team of scientif ic and technological talents, and at the same time 
strives to mobilize the initiative of the whole so ciety to make innovation. China adheres to the 
opening-up policy to form an all-dimensional, multi- layered, wide-ranging and high-level situation of 
international scientific and technological cooper ation. China also continually optimizes the 
environment favorable to scientific and technological development and innovation. 
Page 11 (Para. 36)  In the course of advancing the development of science and technology, the Chinese Government 
welcomes and encourages foreign companies to  establish research and development (R&D) 
centres in China. Foreign-invested enterprises h ave already become important participants of 
R&D activities in China. In 2008, the proportion of R&D expenditure of foreign invested 
enterprises (Fees) accounted for 27.2% of the to tal R&D expenditure of large and medium-sized 
industrial enterprises in China, up from 19.7% in  2002, with an average annual growth rate of 
21.2%. The number of patents for inventions ow ned by foreign-invested enterprises accounted 
for 29% of the national total, while their ex penditure for new product developments, sales 
revenue and exports were 31%, 41% and 60% of the national total respectively.  
Questions 
In the report stated that the foreign-invested  enterprises have already become important 
participants of R&D activities in China. Could China list out foreign companies who had established R&D center thus far? 
Answer 
China encourages domestic and foreign enterp rises to strengthen cooperation in research and 
development, and encourages multinational corporati ons to establish R & D centers in China. Given 
that the establishment of R & D centers in China by  foreign-invested enterp rises is an enterprise 
behavior, it is not suitable for the Chinese Governme nt to publish directly the list of the relevant 
enterprises. However, it is not difficult to find the information in this regard from the media report. 
Page 12 (Para. 37)  
Intellectual property rights are of utmost importance for China in its transformation of the 
pattern of economic development. In June 2008, the State Council promulgated Outline of 
National Intellectual Property Rights Strategy.  The paper summarized the intellectual property 
rights system and their protection in China, a nd made the intellectual property rights strategy a 
clear and important national strategy. It al so proposed to enhance comprehensively the 
capabilities of creating, using, protecting and managing intellectual property rights to contribute to the innovation capacity of the nation  and to the building of an innovative society. 
Over the past two years, a number of laws an d regulations concerning intellectual property 
rights were improved with new amendments, in cluding for example the Patent Law and its 
implementation regulations, and the efforts of law enforcement to protect intellectual property 
rights were also further strengthened.  WT/TPR/M/230/Add.1 
 Page 195 
 
 
  Questions 
Could China elaborate how does the National Intellectual Property Rights Strategy works in 
ensuring its consistency with the Agreement on  Trade-Related Aspects of Intellectual Property 
Rights under the WTO?  
Answer China has established a complete system of in tellectual property rights consistent with the Agreement 
on Trade-Related Aspects of Intellectual Property Rights under the WTO. The National Intellectual 
Property Rights Strategy is formulated and implem ented under the Chinese intellectual property rights 
system, and is therefore in conformity with the Agreement on Trade-Related Aspects of Intellectual 
Property Rights  under the WTO. 
Secretariat report Economic environment Page 5 (Para. 17
)  
China's merchandise exports grew by 17% in 2008;  in 2009, they declined by 16% due mainly 
to the drop in external demand.  There is a si gn of recovery, as exports rebounded by 21% year-
on-year in January 2010.  Manufacturing produc ts remain the dominant component of China's 
exports, accounting for 93% of the total (Table AI.2).  In 2009, exports of textiles and clothing declined relatively less than many other pro ducts, partly reflecting the phase-out of export 
restrictions under China's bilateral agreements (with the EU, the United States and South 
Africa). Their share in total ex ports increased, while the share of  machinery products declined 
(Table AI.2).  
Questions
 
Is there any minimum wage determination in th e textiles industry by local labor department?  
Answer 
China has minimum wage system, but there is no sector specific minimun wage for the textile 
industry. Wages for workers in the textile and a ppratus enterprises must follow the local minimum 
wage stipulated at the provincial level.  Fo r example, on 17 March 2010, Department of Human 
Resources and Social Security in Guangdong Province issued Notice on adjusting the minimum wage 
for workers in enterprises loca ted in Guangdong Province , which raised the minimum wage level in 
the province by a 21.1%.  The new rule was  implemented on 1 May 2010. 
Could China provide the local inland transportation costs for this industry?   
Answer 
The inland cargo transportation for the textile i ndustry mainly relies on railways and highways, 
complemented by transportation by water and air. The transportation cost  is directly related with the 
transportation mode chosen and the relevant tariffs.  The latter are fixed  based on  rules on tariff 
calculation method for  cargo transportation. For ex ample, tariff calculation method for railway cargo 
transportation is that carload freight takes ton as unit and containers take per container as unit. The 
tariffs for railways, highways, water and air transportation are all market prices.  WT/TPR/M/230/Add.1 
Page 196  
 
  Should foreign investors in textiles industry follow the regulations issued by local government or 
central government?   
Answer 
China has established a complete foreign investment legal system, which provides a solid foundation 
for legal protection of the lawful rights and inter ests of both Chinese and foreign investors. According 
to Article 82 of the Legislation Law , the effect of the rules of differe nt departments is equal, and the 
effect of the rules of departments and of the rules of  local (provincial) governme nts is also equal, their 
application shall be confined to their respective lim its of authority. To establish a textile enterprise, a 
foreign enterprise shall abide by both laws, administrative regulations and department rules at the 
State level, and local rules of the place where the enterprise is located. In case of any inconsistency 
between department rules and rules of local govern ments on a matter, foreign investors may report to 
relevant authority responsible for legislative affairs which shall either make interpretation of the rules 
or handle the matter. 
How fast is the lead time to install the electrica l & water supply if the factory facilities are in 
place?   
Answer Before a new plant is put into operation, the inst allation and testing of th e equipment should go hand 
in hand with the public utilities (water, electricity an d gas supply). In practice, once the equipment of 
the plant is in place, the water and electricity supp lies should be in place as well, i.e., the lead time to 
install  public utilities should be the time when  the engineering of the plant has passed the 
examination. 
Page 29 (Para. 111)  
The authorities stated that China has not increased any of its applied MFN rates in 2009, 
although apparently China increased the interim tari ffs on fuel oil (to 3%) and jet fuel (to 6%) 
in 2010 to save energy.  In 2009, China unilate rally lowered standard applied MFN rates on 
5 lines at the HS 8-digit level, and implemented lo wer interim MFN rates on 673 tariff lines.  As 
a result, the simple average applied MFN duty rate fe ll from 9.7% in 2007 to 9.5% in 2009.  The 
simple average applied MFN duty rates for agric ultural products (WTO definition) and non-
agricultural products were 15.2% and 8.6%, respectively.   
Questions
 
Malaysia welcomes the unilateral effort undertak en by China in particular to liberalise its 
import tariffs in 2009.  Does China intend to fu rther liberalise its tariff specifically on high 
tariffs or tariff escalations?  
Answer 
In 2010, China has further reduced MFN tariff rates of 5 tariff lines, and has adopted interim tariff 
rates over 600 tariff lines. In light of China's econom ic development, China will continue to make 
adjustments to the import tariff rates of relevant products. 
If yes, what are the affected products?   WT/TPR/M/230/Add.1 
 Page 197 
 
 
  Answer 
For adjustments made in 2010, please refer to 2010 China Customs Tariff Schedule. However, for 
information concerning the specific range of products to be involved in future  possible adjustments, 
we at this stage are not in the position to provide.  
IV. T RADE POLICIES BY SECTOR  
Page 69 (Para. 2) 
China's average MFN tariff on agricultural pr oducts remained largely unchanged during 2007-
09.  Tariff rate quotas are applied to some cere als, sugar, chemical fertilizers, and wool and 
cotton.  China continues to use state trading to manage trade of some products.  The domestic 
prices of some products are subject to "gov ernment-guided prices".  The Government also 
maintains minimum procurement prices on rice  and wheat from majo r production areas, 
mainly to compensate farmers in the event of d eclines in market prices below certain thresholds.  
As long as this protection remains in place, it may prove difficult for the Government to succeed 
in raising total factor productivity in agriculture. 
Questions Does China have any plans to reform the tariff on agricultural products and reduce tariff rate 
quota in the next five years? Can China provide  the list of products covered under the tariff 
rate quotas?  
Answer 
The TRQ regime and the tariffs for agricultural pr oducts are in place according to the commitments 
made during China's accession to the WTO. Therefor e China at this stage does not have a plan of 
reform. For the list of products subject to TRQ,  please refer to China's Accession Protocol or 
notifications China submits annually to the WTO Agriculture Committee, including  G/AG/N/CHN/3, 
G/AG/N/CHN/5, G/AG/N/CHN/7&7C1, G/AG/N/CHN/9, G/AG/N/CHN/11, G/AG/N/CHN/14 and 
G/AG/N/CHN/16.  
Can China please provide details on mechanism u sed by the Government to maintain minimum 
procurement prices on rice and wheat from major production areas to compensate farmers in 
the event of declines in the market prices. What  were the minimum procurement prices were set 
and its corresponding market prices? 
Answer 
China has liberalized its grain market, and the grai n prices are decided by market supply and demand. 
In order to safeguard the interests of farmers in th e event of any sharp decline in the prices of grain, 
the Chinese Government has the policy of minimum procurement prices on rice and wheat in major grain-producing areas. Generally, farmers sell grain at market prices; however, they can sell their 
grain to enterprises designated by the State at mi nimum procurement prices when there is a sharp 
decline in the market prices of rice and wheat in major grain-producing areas to such an extent that 
they are lower than the minimum procurement prices. The minimum procurement prices of grain are 
set by National Development and Reform Commission together with relevant authorities including the 
Ministry of Agriculture, Ministry of Finance, and State Administration of Grain. The principle for setting the minimum procurement prices is to comp ensate the cost of grain production and guarantee 
the farmers appropriate profits in the grain produc tion. The minimum procurement prices of grain are 
set before wheat and rice seeding and published at the NDRC website of www.ndrc.gov.cn each WT/TPR/M/230/Add.1 
Page 198  
 
  year.In the actual situation, the market prices at which farmers sold their rice and wheat have been 
higher than the minimum procurement prices each y ear since the adoption of the policy of minimum 
procurement prices of grain in 2004. 
Para. 8, Page 70 (Chapter 4)  The Government has been implementing agricul tural reform to improve farmers' welfare and 
mitigate rural-urban disparities, and more recentl y to stimulate domestic demand in the face of 
the global economic slowdown since late 2008.   
Question 
Can China elaborate and provide list of pr ogrammes implemented under the agricultural 
reform programme.  
How these programmes contribute to farmers' welf are, mitigate rural-urban disparities and 
stimulate domestic demand?  
Answer (for the above 2 questions) In recent years, China has further strengthened its  efforts in addressing the problems of rural areas, 
farmers and agriculture ("three agriculture-related" pr oblems) and issued a series of measures. By far, 
China has basically formed an agricultural suppor t policy system for safeguarding grain production, 
enhancing agricultural efficiency, increasing fa rmers' incomes and promoting comprehensive 
development of rural areas, which is consistent w ith the agricultural support rules of the WTO. The 
main supporting measures are direct subsidies for farmers, comprehensive direct subsidies for 
agricultural inputs, subsidies for using superior seed  varieties and subsidies for purchasing agricultural 
machinery and tools. Others include transfer paym ent for big agricultural counties and investment for 
rural infrastructure construction. Besides, China also has the minimum purchase price policy for key 
grain products and the temporary reserve policy for corn, soybean, colza and cotton. 
In the Government Report prepared for this review, it was also mentioned that over the past two years, 
investment in infrastructure and social programs in rural areas increased significantly. In the effort to 
increase the employment of the rural labour forces, training programs to improve the skills of rural 
migrant workers were launched on a large scale and policies were implemented to encourage rural 
migrant workers who returned to their home to start up their own businesses. Financial support for 
poverty alleviation purposes was also increased. From 2008 onwards the new poverty line of annual 
per-capita income of 1,196 Yuan was adopted to c over all low-income rural population. According to 
the new standard, 40.07 million people are eligible to receive assistance under poverty-relief 
programs. 
These policies and mesures of the Chinese Government  towards rural areas, farmers and agriculture 
are long term policies and measures and will gradua lly improve farmers' welfare and narrow rural-
urban disparities. 
Page 71 (Para. 9)  
China became a net importer of agricultural products in 2004 and international trade has continued to 
grow.  Exports increased by 8.7% and imports by 32.8% in 2008; however, agricultural products 
accounted for only 2.5% of total goods exports a nd 4.4% of imports.  China's top market for 
agricultural exports continues to be Japan, which accounted for 18.8% of total agricultural exports 
in 2008 (26.3% in 2006).  In 2008, the main imports were soybeans from the United States and palm 
oil from Malaysia.   WT/TPR/M/230/Add.1 
 Page 199 
 
 
  Question 
Does China have any intention to liberalise its vege table oil tariff and quota in particular palm 
oil given that China has become a net importer of agricultural product since 2004?  
Answer China at this stage does not have a pl an to adjust the tariffs of the vegetable oils. Also, palm oil is not 
a TRQ product.  
Page 72 (Para. 22)  
Exporters of agricultural products are entitled to VAT rebates at the time of exportation; 
rebates vary according to commodi ty and are often lower than the statutory VAT rate, which 
results in an effective levy on exports.  The VAT  on agricultural goods is 13%, but the "usual" 
export rebate rate for agricultural goods is 5%.   
Questions What are the affected products under export rebate?   
Does China have any plan to continue reducing export rebates in future which may lead to 
WTO inconsistency?   
Answer (for above 2 questions) 
Tax rebate on exports is an inte rnationally prevailing practice. Current less than full VAT rebate in 
China is mainly due to fiscal capabilities reasons. Chin a's adjustment made to the VAT rebate rates on 
exports always follows the principle that the rebate  rate be no higher than the rate levied. Therefore 
China believes it is not inconsistent with WTO rul es. The general direction of the VAT rebate policy 
of China is to achieve policy stability and con tinuity on the basis of continuously improving tax 
collection and administration.  
Page 77 (Para. 42)  
Nonetheless, the average tariff for China's auto motive sector was 16.2% in 2009 (compared with 
15.3% in 2007), due mainly to the change in the number of tariff lines.  The tariff on auto parts 
and components is 10%, while most passenger vehi cles are subject to a tariff rate of 25%, and 
motorcycles of rates between 30% and 45%.  An automatic import licence is required from the 
MOFCOM.  Also, imports of complete vehicles a re permitted only through four coastal ports, 
two terrestrial ports, and Alataw Pass.  The importation of used vehicles, parts, and components 
are prohibited.  
Question The measure designating certain ports to import complete vehicles seems to be a trade 
distorting measure. Could China clarify why impo rts of complete vehicles are permitted only 
through four costal ports and two terrestrial ports?  
Answer 
Import of vehicles requires the port to have re levant capacities and facilities concerning frontier 
inspection, Customs supervision and control, cargo- handling capacity, logistics, warehousing etc. It WT/TPR/M/230/Add.1 
Page 200  
 
  should also be supported with large trade volume of  vehicle import. In view of the import vehicle 
trade flow, geographical distribution, and port capac ity, China has designated four coastal ports and 
two inland ports plus the Alataw Pass in the Xinjiang Uygur Autonomous Region to be the ports for 
importing complete vehicles. This also helps to ma intain the market order of vehicle importation, 
crack down on vehicle smuggling and improve port servi ces. In practice, these ports have satisfed the 
demands of vehicle importation and have provide d high quality and efficient port services for the 
import trade of vehicles. 
After the establishment of ASEAN-China Free Trade Area, China has added Qinzhou Port in Guangxi 
Zhuang Autonomous Region as a port for importing complete vehicle in view of the demand of 
vehicle trade between China and Southeast Asian count ries. In future, China will study and adjust the 
layout of China's vehicle import ports based on th e demand of vehicle trade, port administration and 
service capacities. 
MALAYSIA – Part 3
 
Government report Page 16 (Para. 59) 
Many Chinese exports contain very limited adde d value during their production in China, 
which to a large extent only reflects the input through labour of the Chinese workers.  
Questions Aluminium sheet and foil (HS Code 7606 & 7607) are examples of low value added exports that 
Malaysia has witnessed from China. The prices  of aluminium traded on the Shanghai Future 
Exchange is typically lower than that traded on the London Metal Exchange after reversal of 
value-added tax. Manufacturers in China make u se of this cheap raw materials to export 
aluminium sheet and foil at prices that are far be low international levels. On some occasions, 
the gap is so huge that products are sold at  negative value-added. This is because Chinese 
smelters can actually sell the raw material at si milar or higher prices on the LME compared to 
prices of downstream product sold by sheet and foil manufacturers. This represents a leakage of 
China's valuable aluminium resources to support  non-value-added exports. Will China be 
implementing any new policies to prevent this, particularly in industries such as aluminium 
where this is very apparent?     
Answer The prices of aluminum traded on the Shanghai Futures Exchange and London Metal Exchange are 
subject to influences of such factors as global alum inum production, consumption and stock, and they 
generally show similar fluctuation tendency. Wher e oversupply, consumption decline or overstock in 
the domestic market happens, the prices of alumin um traded on the Shanghai Futures Exchange may 
be for the time being lower than that traded on the London Metal Exchange. 
The aluminum sheet and foil are also products comp letely subject to market supply and demand, and 
enterprises can decide by themselves the production,  sale, and export of aluminum sheet and foil 
according to the market situations. Aluminum proce ssing is a resource and energy intensive industry. 
To realize the overall objective of energy saving and emission reduction as well as sustainable 
development, the Chinese Government has attached  great importance to the reasonable development 
and effective utilization of aluminum resources, a nd does not support the export of low value-added 
aluminum products.  WT/TPR/M/230/Add.1 
 Page 201 
 
 
  Before the global economic crisis in 2008, China has started reducing the value-added tax rebate 
on aluminium sheet and foil, possibly with the goal of eventually preventing such value leakage. After the crisis, China reversed its direction and increased the VAT rebate to stimulate such 
exports again. Now that the Chinese economy ha s fully recovered from the economic crisis, are 
there plans in the near future to reduce or e liminate the VAT rebate on aluminium sheet and 
foil products?    
Answer 
First of all, China's tax rebate on export goods do es not exceed the VAT levied on them. This is the 
case even after raising rebate rates on certain products in 2009. 
Secondly, the general direction of the VAT rebate policy of China is to achieve policy stability and 
continuity on the basis of continuously improvi ng tax collection and administration. The rebate 
adjustment in 2009 was in response to requests of businesses and industry associations in order to 
help them overcome enormous difficulties under the sp ecial background of the international financial 
crisis. The product coverage and margin of the rebate raise are determ ined upon comprehensive 
assessment taking into account various factors incl uding the seriousness of the shock and difficulties 
faced by various sectors, employment situation in the sectors, as well as the improvement achieved in terms of pollution and energy consumption of these sector s etc. Future adjustment to the rebate policy, 
if made, will be based on the situation of the influe nces of the international financial crisis and take 
into consideration of our obligations in the WTO. 
SINGAPORE
 
Investment  
Question 1 Advancing Strategies for Scientific and Techno logical Innovation and Intellectual Property 
Rights (Pg 11, Para. 36, of China's Report WT/TPR/G/230) - We note that the Chinese 
Government encourages foreign companies to establish R&D centres in China.  
We would be pleased to learn from China on  whether it has any incentive programmes to 
encourage such forms of foreign investments, a nd if there are specific sector(s) in which China 
is keen to encourage R&D.  
Answer 
China supports all enterprises including foreign ente rprises to establish R&D centers in China. The 
State Council recently released Certain Opinions on Better Utilization of Foreign Investment, which 
proposes that foreign-invested R&D centers meeting prescribed conditions will be exempt from import duties, import value-added ta x and consumption tax on import of articles needed for scientific 
and technological development before 31 December 2010.  
Question 2 
Streamlining Procedures to Facilitate Trade and In vestment (Pg 18, Para. 69, of China's Report 
WT/TPR/G/230) and Foreign Investment Regime (P g 21, Para. 46, of the Secretariat's Report 
WT/TPR/S/230) – We appreciate China's intention in facilitating the approval of FDI through, 
inter alia , the delegation of examination and approval authorities from the Central Government 
to the local administration.  WT/TPR/M/230/Add.1 
Page 202  
 
  With such measures in place, we would like to  seek clarification from China on whether a 
foreign investor who seeks to operate in mult iple provinces in China might need to obtain 
authorisation from the various local administration s, or if an alternative arrangement would be 
available. For instance, would the investor be able to obtain authorisation to operate in multiple 
provinces through a one-time application for a single license?  
Answer 
A foreign investor who has set up an enterprise in  any province may operate nationally in China. 
However, if the investor seeks to establish opera ting agencies in a number of provinces, things may 
differ under the following two circumstances: 1. the foreign investor intending to establish multiple 
operating agencies with independent legal entity st atus in a number of provinces need to obtain 
approval from all these local governments; 2. the i nvestor intending to establish one operating agency 
with independent legal entity status in one pr ovince and then establish branches as non-independent 
legal entities in other provinces only needs to obtain  approval from the local government of the place 
where the foreign-invested legal entity registers. Unless otherwise provided for by laws, regulations 
and rules, the investor may directly go for busin ess registration for the establishment of branches of 
non-legal person status.  
Question 3 
Foreign Investment Regime (Pg 21, Para. 48, of  the Secretariat's Report WT/TPR/S/230) - We 
read with interest that the January 2009 Catalogue of Advantaged Industries for Foreign Investment in Central-Western China includ es over 400 subsectors and projects encouraged by 
the Government, and which are eligible for certain preferential measures.  
We would appreciate information on where we could obtain a list of the covered 400 subsectors 
and projects, as well as the relevant preferential  measures, and qualification criteria for foreign 
investors or businesses. 
Answer 
For the Catalogue of Advantaged Industries for Foreign Investment in Mid-West China (2008) , please 
refer to http://www.ndrc.gov.cn/zcfb/ zcfbl/ 2008ling/t 20081224_253113.htm. 
Goods 
Question 4  
The Secretariat's Report (WT/TPR/S/230, page 24)  Chapter III (Trade Policies and Practices by 
Measure) Paragraph 6 states that the China ma intains various export restrictions, notably 
prohibitions, licensing, quotas, taxes, and less th an full rebates of VAT on exports, in achieving 
objectives related to saving energy, protect ing the environment and conserving natural 
resources. The report also states that the China is  considering alternative measures to export 
taxes, such as levying an environmental tax on  some natural resource products to achieve the 
said objectives.  
We would appreciate if China could clarify the effectiveness of the export restrictions in 
achieving the said objectives, and provide more de tails on its plans to impose an environmental 
tax, for e.g. the amount of taxation, the type of products that will be affected and when it 
intends to implement this.  WT/TPR/M/230/Add.1 
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  Answer 
China's export administration on a few products ar e for the purpose of protecting environment, 
protecting human, animal or plant life or hea lth, conserving exhaustible natural resources, or 
protecting national security. Such measures do not c onstitute arbitrary discrimination, or disguised 
restriction on international trade, and are fully c onsistent with WTO rules. Since the issue concerned 
is subject to the ongoing WTO dispute cases of DS394, 395 and 398, China will provide further 
comments after the final rulings.  
For environmental tax, relevant authorities are curre ntly studying on the issue, and we will provide 
relevant information at appropria te time according to the progress. 
UNITED STATES – Part 1  
The United States welcomes this opportunity to pa rticipate in the third Trade Policy Review of 
the People's Republic of China (China) since Ch ina acceded to the WTO on December 11, 2001, 
by submitting questions related to the Secret ariat's report.  The purpose of the Trade Policy 
Review Mechanism is "to contribute to improved a dherence 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 underst anding of, the trade policies of Members."  In 
the case of China, Members recognized the overr iding importance of transparency through a 
host of provisions in China's Protocol of Accession and accompanying Working Party Report.  Since China's accession to the WTO, Chin a has made notable improvements in the 
transparency of its trade regime, particularly through its increased use of official journals, 
other publications and the Internet to publicize ne w or modified trade-related laws, regulations 
and other measures.  China has also taken st eps to improve its adherence to notice-and-
comment procedures for proposed laws, regulatio ns and other measures.  Nevertheless, there 
remains much to be done to further improve tr ansparency in China.  It remains a critically 
important area, both from a governmental pers pective and from a business perspective.   
Before turning to the United States' questions on the Secretariat's 2010 report and the Chinese 
Government's report, the United States notes, as  a preliminary matter, that China has still not 
provided written responses to a number of questions posed by the United States in connection with the second Trade Policy Review of China, held in 2008.  While some of these questions have been overtaken by events, the United States would request that China respond in writing to other outstanding questions reproduced in Annex 1 to this document. 
The United States' questions on the Secretariat's report are set forth immediately below.  These 
questions are followed by questions on  the Chinese Government's report. 
I. E
CONOMIC ENVIRONMENT  
(1) C HINA 'S TRADE AND DEVELOPMENT POLICIES  
1. In Part I, the Secretariat's report notes th at China has benefited for many years from its 
export driven growth, but experienced a sharp reduction in its exports during the global 
economic downturn.  The report not es that, in order to achieve its stated goal of shifting the 
economy toward domestic demand led growth, China is pursuing policies to rebalance its economy by increasing the purchasing power of ho useholds and the labor share of income, and 
by reorienting investment toward non-tradable sectors.  Please describe the main policies that 
the Chinese Government is pursuing to achieve its objectives, particularly to increase the 
purchasing power of households, the labor share of income and re-orient investment toward 
non-tradable sectors.   WT/TPR/M/230/Add.1 
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  Answer 
With regard to the increase of household income  and consumption capacity, the Chinese government 
has attached high importance to the promotion of domestic demand-driven economic growth and is 
making efforts to accelerate its economic structure ad justment and transformation of growth pattern 
by enhancing household purchasing power and labor share of income and by reorienting investment 
toward non-tradable sectors. 
First of all, China continues to increase the income of farmers, the basic pension of enterprise retirees 
and the minimum subsistence level of urban and ru ral residents, thus to enhance the consumption 
power of residents, especially those with medium and low incomes. Second, China takes developing 
social cause and improving livelihood as the key asp ect for enhancing people's incomes, adopting 
more active employment policies, accelerating the im provement of a social security network for both 
urban and rural residents, reforming the income di stribution system, further promoting fair education 
and the reform and development of  medical and healthcare. Third, China has adopted measures to 
directly promote consumption, for example, the programs encouraging rural residents to purchase 
home appliances, motor vehicles and motor bikes, the trade-in programs of motor vehicles and home 
appliances, reduction by half of the vehicle purchase tax for small displacement vehicles and 
reduction and exemption of tax relating to real estat e transaction. China has substantially lifted the 
upper limit of the prices of home appliances eligible  for the programs, increased the varieties and 
models of products, expa nded subsidy scope, and im proved subsidy standard s and methods. Fourth, 
China makes efforts to promote the development of the service industry and accelerate the establishment of an open, equal and regulated service industry entry system to attract more social 
capital. China promotes the development of non-pub lic service enterprises and endeavors to increase 
the share of non-public sector in the service industry.  
With regard to the improvement of investment struct ure, it is a consistent policy of China to realize a 
stable and healthy development of investment on the basis of structural optimization. The 
two-year 4 trillion Yuan investment plan issued in response to the international financial crisis clearly 
requires that the government investment be put into th e most needed areas to ta ckle the crisis and the 
weak aspects of economic and social development an d shall not be allocated to the general processing 
industries. In accordance with this requirement, the investment has mainly been put into housing 
projects for low-income population, rural livelihood and infrastructure projects, key infrastructure projects including transportation facilities, social causes like pubic health, education and culture, and 
critical and weak areas like energy saving and emission reduction, ecological construction, post-
earthquake reconstruction, etc.   
Generally, in 2009 the investment structure has been  further optimized. The weight of investment in 
the primary and the tertiary industries increased by  0.2 percentage points and 1.3 percentage points 
respectively to 1.7% and 55.9%, while that of investment in the secondary industry decreased by 
1.5 percentage points to 42.4%. In terms of specific sectors, the investment in areas directly related to 
people's livelihood like education, public health , culture and resident services increased by 46.4%, 
which was 28.8 percentage points higher than in the previous year; the investment in infrastructures 
like transportation and irrigation facilities increased by  47.7%, 22.1 percentage points higher than in 
the previous year; the investment in industrial sector like manufacturing industry and mining industry 
increased by 26.1%, which was 1.8 percentage points lo wer than in the previous year, and its weight 
in the total investment decreased by 1.4 percentage points.   WT/TPR/M/230/Add.1 
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  I. E CONOMIC ENVIRONMENT  
(3) S TRUCTURAL POLICIES  
2. Paragraph 29 of Part I of the Secretariat's report states that "small and medium-sized 
enterprises are still not allowed to issue co rporate bonds, which obstructs their access to 
capital."  Are there any plans to eliminate this rest riction?  If so, what timeline is envisioned? 
Answer 
China does not prohibit SMEs to issue corporate bonds. On the contrary, the Chinese government has 
been actively exploring effective means to suppor t financing of SMEs through corporate bonds. Due 
to their limited strength, relatively low credit rati ng and low market recognition, the SMEs suffer from 
relatively high financing cost and are facing more  obstacles in issuing bonds. In recent years, the 
Chinese government has successfully facilitated th e issuance of collective bonds by some SMEs 
through the model of "unified organization, unified  guaranty, collective issuance, and separate debt 
and repayment". In 2007, 1 billion Yuan Shenzh en SMEs Collective Bonds (20 enterprises) and 
305 million Yuan Zhongguancun High-tech SMEs Collec tive Bonds (4 enterprises) were issued on a 
pilot basis. Since the outbreak of the internationa l financial crisis, China has adopted a more active 
attitude in promoting the development of SMEs  collective bonds. On 28 April 2010, the 515 million 
Yuan Dalian SMEs Collective Bonds (8 enterprises) was successfully issued. Some other collective 
bonds of SMEs in different areas like Henan Provin ce and Wuhan City are now in the examination 
and approval process.  
3. Paragraph 31 of Part I of the Secretariat's report states that "the Government is taking 
steps to diversify the economy by promoting the development of agriculture and increasing the 
role of the services sector in generating grow th and employment and developing large-scale 
consumer-services industries."  Please provide addi tional detail on what steps are being taken. 
Answer 
Measures taken to promote the development of the service sector include further relaxing the market 
access thresholds of service sectors, promoting ma rket-oriented reforms of public utilities, promoting 
the restructuring of business-oriented public institu tions and also the logistic services of government 
agencies and public institutions, increasing input into  public services, strengthening social security for 
employees in service sectors, cultivating talents for the service sector, and improving standard system 
and social credit system for the service sector. Please refer to the Opinions on the Implementation of 
Certain Policies and Measures for Accelera ting the Development of the Service Sector  for more 
information.    
II. T RADE POLICY REGIME : FRAMEWORK AND OBJECTIVES  
(2) I NSTITUTIONAL AND LEGAL FRAMEWORK  
(i) Transparency 
4. As the Secretariat's report notes in pa ragraph 10 of Part II, China's unpredictable 
practice with regard to notice-and-comment proce dures for proposed regulations, departmental 
rules and other measures remains a significant concern.  The United States notes that China has recently issued regulations directing all government  ministries and agenci es to adhere to notice-
and-comment procedures.  What mechanisms does China have to ensure that notice-and-
comment procedures are being followed, including  mechanisms to monitor the performance of 
each of its ministries and agencies?  Please explain. WT/TPR/M/230/Add.1 
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  Answer 
The Law of the People's Republic of China on Legislation  promulgated in 2000 has made open 
legislation a basic principle for legisla tive activities in China. The law as well as Regulations on 
Procedures for Formulation of Administrative Regulations and Regulations on Procedures for 
Formulation of Departmental Rules clearly require Chinese legislative bodies to solicit public 
opinions by means of symposiums, workshops, publ ic hearings etc in the legislative process.  
In recent years, the Chinese Government has enhan ced further the transparency in its legislative 
works. Soliciting public opinions has become a common practice in drafting laws and regulations. A system for soliciting public opinions on draft regulati ons and rules is set up on the official website of 
the Legislative Affairs Office of the State Counc il. Special columns concerning public opinions 
solicitation may also be found in the official we bsites of many ministries and commissions. In 
April 2008 the Standing Committee of the National Pe ople's Congress made a decision that from then 
on all draft laws under review of the Standing Co mmittee of the National People's Congress would in 
principle be made public for comments and opinio ns. These efforts would continue to enhance the 
transparency in respect of public opin ion solicitation on the draft legislation. 
5. Paragraph 11 of Part II of the Secretaria t's report discusses the Provisions on Disclosure 
Government Information, which entered into force on 1 May 2008 and, among other things, 
requires government ministries and agencies to di sclose information.  Does this measure require 
the disclosure of so-called "internal guidance"?  Please explain why this is or is not the case. 
Answer 
We are not sure what the "internal guidance" menti oned by the US means. However, according to the 
Regulations on Government  Information Release , all information except for those involving State 
secrets, commercial secrets or individual privacy  shall be disclosed by government departments 
voluntarily or upon application of citizens, legal pe rsons or other organizations. Please refer to the 
Regulations on Government Information Release at http://www.gov.cn/zwgk/2007-
04/24/content_592937.htm for more information. 
6. Paragraph 13 of Part II of the Secretariat 's report states:  "It would appear that the 
economic evaluation of policies and measures, including tax and non-tax incentives, is not 
published, indicating that this form of tran sparency is not a major feature of China's 
institutional framework, to the detriment of  public accountability and thus governance."  Does 
China conduct economic evaluations of laws, regulat ions and other measures?  If so, it appears 
that China does not make these economic evalua tions public.  Why does China not publish these 
economic evaluations?  Will China commit to be gin publishing these economic evaluations by a 
date certain? 
Answer 
The Chinese government is explorin g the cost-benefit analysis system for government legislative 
projects, especially economic legislative projects.  Post-legislation assessment has been introduced 
since 2006, with basic content, standards, appro aches and procedures gradually specified. Legislative 
affairs offices of local governments under the gui dance of the central government have conducted 
post-legislation assessment on many local govern ment rules, and presently, post-legislation 
assessment results have become an important basis for enacting and amending relevant laws, administrative regulations and rules. Another aspect which may be relevant to  this question of the 
U.S. is that Ministry of Finance has started on a pilot basis the performance assessment of fiscal 
budget expenditures under certain policies since 2003. Now the pilot scheme is being expanded. In  WT/TPR/M/230/Add.1 
 Page 207 
 
 
  general, China is still at the starting and experience- accumulating stage in this  respect. However, this 
is definitely an area in which China is maki ng efforts to promote government transparency. 
II. T RADE POLICY REGIME :  FRAMEWORK AND OBJECTIVES  
(5) T RADE AGREEMENTS AND ARRANGEMENTS  
(iii) WTO  
7. Paragraph 22 of Part II of the Secretariat' s report refers to the notifications that China 
has made to the WTO, which are detailed in Table AII.2.  The United States considers the 
submission of timely and complete subsidy no tifications under Article 25 of the Agreement on 
Subsidies and Countervailing Measures (Subsidies Agreement) to be a basic obligation of WTO membership.  China's demonstrated inability to provide a timely and complete subsidy 
notification therefore raises serious concerns.  After nearly nine years as a WTO Member, 
China has submitted only one subsidy notifica tion, in 2006, covering the years 2001 through 
2004.  The United States considers China's 2006 subsidy notification to be largely incomplete because, among other things, it failed to id entify any sub-central government subsidies.  
Provincial and local governments in China play a substantial role in implementing China's 
industrial policies, including the provision of subsidies.  Numerous WTO Members, including 
the United States, have identified a wide range of subsidy programs – some of which have appeared to be prohibited – administered by provincial and local governments in China.  Indeed, in a recent WTO dispute, the United States, Mexico and Guatemala identified dozens of sub-central government measures promoting Chinese famous brands of merchandise around the world through a wide range of subsidies th at were contingent upon export performance.  
We welcomed China's subsequent elimination of these subsidies.  However, the United States 
and other WTO Members continue to raise questions about other subsidies provided by provincial and local governments in China, in cluding some subsidies that appear to be 
contingent upon export performance.  In Oc tober 2009, before the Subs idies Committee, China 
stated that a draft of its second subsidy notification covering the years 2005 through 2008 was 
"ready for examination and that work to subm it the notification was at the final stage," 
although it would not include sub-central government  level subsidies.  China noted that it would 
continue to work toward incorporating subsidies at the sub-central government level into future 
notifications.  To date, China has not submi tted its updated notification.  Recognizing that 
providing subsidy notifications under Article 25 of the Subsidies Agreement is a basic and 
critical obligation of WTO membership, will Chin a commit to a date certain for providing its 
subsidy notification covering the years 2005 through 2008, including subsidy programs 
administered by provincial and local governments? 
Answer 
As was stated in the WTO SCM Committee meeting in  October last year, China would soon finish its 
second subsidy notification. The huge workload including the work of this trade policy review did 
have some consequences on the timely submission of  the subsidy notification. China will submit the 
2005-2008 central government subsidy notification this summer. 
II. T
RADE POLICY REGIME :  FRAMEWORK AND OBJECTIVES  
(6) F OREIGN INVESTMENT REGIME  
8. Paragraph 45 of Part II of the Secretariat's report states that China has mainly 
encouraged foreign investment in manufacturing.   
a. What are China's policies for encouraging  foreign investment in agriculture? 
b. What are China's policies for encouraging foreign investment in biotechnology?  WT/TPR/M/230/Add.1 
Page 208  
 
  c. What are China's policies for encouragi ng foreign investment in financial 
services?  
Answer 
Regarding question a and b, foreign investment in  agriculture, biotechnology and financial services 
listed in the  Catalogue for the Guidance of Industries for Foreign Investment  and the  Catalogue of 
Advantaged Industries for Foreign Investment in Mid-West China  may enjoy the preferential policies 
for the "encouraged" projects. The foreign-funde d enterprise may enjoy the exemption of import 
tariffs for equipment imported with in the total investment amount.  
Regarding question c, China has just promulgated the  Certain Opinions from the State Council on 
Better Utilization of Foreign Investment . China would further expand the fields of opening up and 
encourage foreign investment in high-end ma nufacturing industries, high and new technology 
industries, modern services industries as well as  new energy, energy-saving and environment 
protection industries. China would also encour age foreign-funded banks to establish and launch 
business in central and western part of China. At present, concrete measures are under study. 
III. T
RADE POLICIES AND PRACTICES BY MEASURE  
(2) M EASURES DIRECTLY AFFECTING IMPORTS  
(i) Customs procedures, valuation, and rules of origin 
9. Paragraph 12 of Part III of the Secretariat's report discusses China's preshipment 
inspection requirements. 
a. Under what circumstances would a shipment that undergoes a preshipment 
inspection still be subject to additional  inspection once arriving in China?  
b. Does China send people or institut ions abroad to conduct preshipment 
Inspections?  Please explain. 
Answer (a-b) If the imported waste raw materials are provided by  foreign suppliers with record of bad supply 
conduct or on the blacklist of the AQSIQ or the imported waste raw materi als are imported through 
unreasonable transit, even though they have undergon e PSI, upon arrival in China, 100% un-stuffing 
(all products discharged from the containers) insp ection still needs to be conducted by inspection 
authorities at the ports. 
The PSI of imported waste raw materials is carried  out by PSI bodies abroad; most of the PSI of 
imported used mechanical and electronic products is carried out by PSI bodies abroad. For large-scale 
complete sets of equipment with complicated tec hnologies where technical support is required, at the 
request of foreign inspection institutions, th e Chinese inspection and quarantine personnel will go 
abroad and provide technical guidance and consu ltancy as technical experts invited by foreign 
inspection institutions. 
All the PSI institutions are institutions legally regi stered and operating in the host countries and have 
been recognized as qualified by the AQSIQ. 
10. Paragraph 12 of Part III of the Secretariat' s report notes that there have been no major 
changes in China's  customs procedures over the past two years.  The United States understands 
that China has begun the process of revising its Customs Law.  What is the status of these  WT/TPR/M/230/Add.1 
 Page 209 
 
 
  revisions?  Could China provide a preliminary i ndication of what substantive revisions are 
being considered?  
Answer 
China has no plan to revise its Customs Law at present.  
III. T RADE POLICIES AND PRACTICES BY MEASURE  
(2) M EASURES DIRECTLY AFFECTING IMPORTS  
(iii) Indirect taxes affecting imports 
11. Paragraph 29 of Part III of the Secretaria t's report explains that "primary agricultural 
products sold by farmers directly to cons umers are exempt from VAT on grounds of, inter alia , 
administrative simplicity, while imports of like products are subject to VAT."   
 a. Please explain how grounds such as "a dministrative simplicity" can justify an 
exemption from taxes on domestic pr oducts but not imported products. 
 b. Please explain this discriminatory tax treatment in light of Article III of the 
General Agreement on Tariffs and Trade 1994. 
Answer (a-b) Regarding this policy, China has made explanation and clarifications for several times. In summary, 
we have the following points to make. 
First of all, China has a huge number of small farmers across the country, which makes it impossible 
to conduct accounting and tax filing. In other words,  to levy value-added tax upon them is infeasible 
and uneconomical because of the huge administrativ e cost. This is the fundamental reason behind the 
policy.  
Second, in China the agricultural production is ma inly based on household operation. The sales scale 
is very small. The VAT exemption is applied only to farmers who sell their own products like a 
kilogram of potatoes in an open air market. This is  completely different from the import of products in 
bulk. Their VAT policies are not comparable.  
Third, as far as we understand, other members with  a VAT system also seem to exempt VAT from 
farmers who sell their own products, while levy ing tax over imported agricultural products.  
Fourth, even if we apply VAT over these farmers,  we would adopt a policy that would establish a 
commercially-meaningful threshold like in other countries. Most farmers would fall below the 
threshold. The real effect would be the same as the current policy.  
Therefore, China does not believe the current polic y is not in compliance with its WTO obligations. 
III. T
RADE POLICIES AND PRACTICES BY MEASURE  
(2) M EASURES DIRECTLY AFFECTING IMPORTS  
(iii) Import prohibitions and licensing 
12. Paragraph 32 of Part III of the Secretaria t's report explains that "China prohibited 
imports of some meat products from countries with avian flu."  The United States notes that China has frequently banned imports of meat  products from areas affected by low 
pathogenicity notifiable avian influenza (LPNAI), contrary to the guidelines of the World WT/TPR/M/230/Add.1 
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  Organization for Animal Health (OIE), which are based on substantial scientific evidence 
demonstrating that LPNAI presents no serious threat to human health and animal health.  
Please explain China's justification for restricting imports of meat products from areas affected 
by LPNAI. 
13. Paragraph 32 of Part III of the Secretariat's report also explains that China prohibited 
imports of some meat products from countries wi th "other animal diseases."  The United States 
notes that China imposes restrictions related to  bovine spongiform encephalopathy (BSE) on 
imports of beef and beef products from the United States, even though the United States is considered a "controlled risk" country by the OIE, which means that that trade in beef and beef 
products and cattle of all ages is safe, provi ded that certain slaughter and beef processing 
conditions are met, including the removal of a ppropriate specified risk materials in a manner 
that avoids cross-contamination of meat. Please explain China's justification for not opening its market to the full range of U.S. beef and beef products. 
Answer 
China is a BSE-free country. To ensure the safet y of China's stock raising industry and people's 
health, the Chinese government has taken scientific and necessary measures. Ch ina noticed that some 
members have achieved positive progress in BSE cont rol. But there are still problems in quarantine, 
prevention and control and safety monitoring. In the future, under the precondition of safety assurance, China would continue to cooperate a nd exchange with the US side and actively seek 
solutions to the problem on the basis of a full knowledge of the US BSE prevention and control 
system and beef safety measures.   
14. Paragraph 32 of Part III of the Secretariat' s report states that China's automatic import 
licenses are applied to monitor certai n imports for statistical purposes.  
 a. Please clarify how the automatic import  licenses are verified and enforced at the 
customs ports.  
Answer When making import declaration, the enterprise shall submit paper documents for commodities 
subject to automatic import licensing to  the Customs in accordance with the Administrative Measures 
for the Automatic Import Licensing of Goods  for inspection and check by the Customs. 
 b. In what circumstances would China require additional documents for customs 
declaration purposes?  Are the requirements for additional documents standardized and publically available?  
Answer 
Article 27 of the Provisions on Administration of Custom s Declaration for Import and Export of 
Goods  stipulates clearly the documents to be attached  to the Customs declaration forms. There are no 
other documents required for Customs clearance. 
III. 
TRADE POLICIES AND PRACTICES BY MEASURE  
(2) M EASURES DIRECTLY AFFECTING IMPORTS  
(v) State trading 
15. Paragraph 36 of Part III of the Secretariat's report refers to imports subject to state 
trading, which include, among other products, gr ains, soybeans, feed, meal, oilcake, vegetable  WT/TPR/M/230/Add.1 
 Page 211 
 
 
  oil and soybean oil.  Please clarify the status of  marketing rights and import controls for these 
commodities.   
Answer 
We are not sure whether the Secretariat Report mentioned by the US in this question is of the same 
version with the WT/TPR/S/230 report received by Ch ina because we did not find any content related 
to "soybeans, feed oilcake"  in our version. So we are not able to  answer this question with regard to 
these products from the perspective of state trading.  
Regarding "vegetable oil and soybean oil" menti oned by the US, China has revoked state trading and 
import tariff rate quotas on rapeseed oil, soybean o il and palm oil on 1 January  2006. This has been 
clearly indicated in Secretariat Report in Chapter 3 para. 36.  
Regarding "grain" mentioned by the US, China is now applying state trading and import tariff rate 
quotas to rice, corn and wheat.  
III. TRADE POLICIES AND PRACTICES BY MEASURE  
(2) M EASURES DIRECTLY AFFECTING IMPORTS  
(vi) Contingency measures 
16. In paragraph 39 of Part III, the Secretariat's report describes the anti-dumping 
measures that have been put in place by China from a statistical perspective.  Now that China's antidumping system has matured, many of the measures China has put in place are reaching 
the five-year mark, warranting expiry reviews .  Numerous expiry reviews are currently 
underway in China, with more expected to be init iated this year.  To date, however, China has 
not issued proposed or final rules and procedu res specifically governing the conduct of expiry 
reviews, as required by the Anti-Dumping Agreemen t.  Please indicate when regulations setting 
forth these rules and procedures will be issued. 
Answer 
At present, the WTO Anti-Dumping Agreement does not specify any specific "rules and procedures 
for sunset review". Sunset review is also a key issue to be discussed in this round of trade 
negotiations. After a careful research of the rules and procedures of sunset review, the Chinese 
investigation authorities found that since insuffici ent legislative practices of members could be 
referenced at present and no unified opinion has been  reached regarding the sunset review in this 
round of negotiations, it is not the time yet for China to issue rules and regulations of sunset review. 
17. In paragraph 39 of Part III, the Secretariat's report explains that China has not made 
any changes in the institutional and procedural  framework on contingency measures over the 
past two years.  However, as the United States and other Members have stated before the Anti-
Dumping Committee and the Subsidies Committee,  China still needs to make changes to 
improve its anti-dumping and countervailing duty regimes.  For example, while China has been 
incrementally improving its compliance efforts over the years, the United States notes that 
several aspects of China's anti-dumping a nd countervailing duty regimes remain obscure, 
making it difficult for Members to confirm whether China is meeting the standards of 
procedural fairness reflected in the Anti-D umping Agreement and the Subsidies Agreement.  
The principal areas of concern include significant lapses in transparency on the part of China's 
Ministry of Commerce (MOFCOM), characterize d in large part by MOFCOM's failure to 
require petitioning companies to provide rea sonable non-confidential summaries of 
submissions, and MOFCOM's failure to provide sufficient disclosures of essential facts 
underlying MOFCOM decisions, such as the results  of on-site verifications, the calculation of WT/TPR/M/230/Add.1 
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  dumping margins and subsidy rates, and evid ence supporting dumping, subsidy and injury 
determinations.  In addition, the United States has urged China to favorably consider hearing 
requests, provide timely access to investigat ing authority administrators in open and 
transparent settings rather than in private meetin gs with individual parties, allow respondents 
sufficient time to respond to questionnaires and supplemental questionnaires, and treat fairly 
foreign producers and exporters that did not h ave an opportunity to  participate in an 
investigation.  What specific plans does China have to improve these aspects of its antidumping and countervailing duty regimes? 
Answer 
China has always taken transparency and procedur al justice as a key principle for trade remedy 
investigations and has fully implemented such prin ciple in the work, as refl ected in the following 
aspects: 
1. China has established a relatively complete framework of trade remedy legislation, which 
guarantees transparency and justice of trade reme dy measures systemically. Since its accession into 
the WTO, China has always been devoted to th e improvement of its anti-dumping and countervailing 
regime. China not only amended the  Anti-Dumping Regulations , Countervailing Regulations  and 
Regulations on Safeguard Measures  in 2004, but also promulgated over 20 pieces of departmental 
rules to support the above regulations, covering th e full course of trade remedy investigation from 
initiation, sampling, questionnaire, information disclos ure and inquiry and field investigation to price 
commitment. These efforts fulfill th e transparency principle and guarantee the realization of rights 
and interests of interested parties at the procedural level.  
2. In practice, the Chinese investigation authoriti es also protect the rights of interested parties 
through enhancing transparency and pr oper procedures, which includes:  
 (1) Establishing public information inquiry sy stem. The investigation authorities have set 
up the public information inquiry office to provide relevant public information to parties concerned in specific cases.  
 (2) Establishing information disclosure system  to timely disclose data, information and 
comments. The investigation authorities di sclose relevant facts and rulings three 
times in a specific case, i.e. after the prim ary ruling, after the examination, and before 
the final ruling, and give opportunities to interested parties to make sufficient 
comments.  
 (3) Performing notification and announcement oblig ations. Before initiating a case, the 
investigation authorities would notify rele vant information to the government of 
relevant members involved in the case. Af ter the investigation is initiated, the 
investigation authorities would inform relevant government and enterprises of the relevant information of inv estigation initiation. During th e investigation initiation, 
primary ruling and final ruling proceedings, the investigation authorities issue public 
announcements to inform relevant parties of information on the process of 
investigation and ruling, accreditation of re levant facts, application of laws and 
regulations, etc.  
 (4) Listening to the opinions of various pa rties through public hearings and opinion 
statement meetings. During the investiga tion, the investigation authorities would 
organize public hearings and opinion statem ent meetings, initiated either under the 
request of interested parties or by itself, to  give opportunities to interested parties to  WT/TPR/M/230/Add.1 
 Page 213 
 
 
  fully express their opinions and protect the lawful rights and interests of relevant 
parties.   
3. As member having recourse to trade remedy measures and also a major victim of abused trade 
remedy measures, China has been advocating and ca lling for stricter investigation discipline, higher 
transparency and more procedural justice in the new negotiation round for trade remedy measures and 
rules.  
4. As a member of the WTO, China strictly complies with relevant WTO rules in conducing 
investigations. As a new WTO member, China has fu lfilled its obligations for procedural justice and 
achieved great progress. In the trade remedy me asures taken, few doubts have been raised by 
interested parties against Chinese investigation author ities in terms of procedural justice. China's anti-
dumping and countervailing regime is in compliance with the WTO anti-dumping and countervailing 
principles and rules. Its requirements on transparen cy and procedural justice are not lower than the 
relevant requirement of the rules of the WTO and other WTO members.  
18. Paragraph 40 of Part III of the Secretar iat's report notes that, in 2009, China initiated 
its first-ever countervailing duty investigations, in volving grain-oriented flat-rolled electrical 
steel, chicken meat, and saloon and cross-country cars, all originating in the United States.  
China also imposed provisional countervailing meas ures on grain-oriented flat-rolled electrical 
steel in December 2009, followed by provision al countervailing measures on chicken meat 
in April 2010.  In each of these investigations, some of China's actions raise concerns about China's adherence to its obligations under the Subs idies Agreement.  For example, in each of 
these investigations, it appears that China initiate d investigations into alleged subsidies despite 
not having "sufficient evidence" as required by Article 11.2 of the Subsidies Agreement.  
Specifically, China initiated investigations based on allegations of subsidies provided to 
upstream input suppliers, downstream consuming i ndustries, and even final consumers of the 
product under investigation despite the absence of any evidence in the petitions as to how these 
alleged subsidies might benefit the actual producers of the product under investigation.   
 a. Please explain what type of evidence Ch ina considers "sufficient" to initiate an 
investigation of an alleged subsidy provided to upstream suppliers. 
 b. Please explain what type of evidence Ch ina considers "sufficient" to initiate an 
investigation of an alleged subsid y provided to downstream consuming 
industries. 
 c. Please explain what type of evidence Ch ina considers "sufficient" to initiate an 
investigation of an alleged subsidy provided to final consumers.  
Answer (a-c) 
During the initiation of countervailing investigation of broiler originated in the US, the Chinese 
investigation authorities examined  evidences submitted by the applicant strictly according to the 
Chinese laws and regulations and the WTO rules.  
After a prima facie  examination of the accuracy and sufficiency of evidences for subsidy allegations 
in the application, including the evidences suppor ting the allegation of existence of upstream 
subsidies and transfer of the upstream subsidies to the chicken meat industry, the investigation 
authorities found that the subsidies and relevant c onditions alleged in the application were supported 
by prima facie  evidences including relevant reports and data, which satisfied the requirements of 
relevant Chinese laws and regulati ons and relevant WTO agreements on the accuracy and sufficiency WT/TPR/M/230/Add.1 
Page 214  
 
  of evidences for initiating a countervailing investig ation. Therefore, the investigation authorities 
decided to accept the application a nd initiate the investigation.  
The practice of Chinese investigation authorities is in compliance with the WTO Agreement on 
Subsidies and Countervailing Measures and also c onsistent with the practices of other WTO 
members.    
19. Paragraphs 39 and 40 of Part III of  the Secretariat's report do not address 
administrative reconsideration or judicial review of MOFCOM's anti-dumping and countervailing duty final determinations.   
 a. Have any interested parties requested administrative consideration of any anti-
dumping or countervailing duty final determinations?  If so, please identify 
those requests. 
 b. Have any interested parties requested judicial review of any anti-dumping or 
countervailing duty final determinations?  If so, please identify those requests. 
Answer 
Please refer to the table below for administrative reconsiderations.  
No Time Applicant Respondent Reco nsideration request Final results Type of 
remedy 
measures 
1 29 Nov. 2005  The American Forest 
& Paper Association Ministry of 
Commerce  Filed objections to the final 
decision of MOFCOM on 
the anti-dumping 
investigation of unbleached kraft paper originated in US 
and Thailand and applied for 
reconsideration Terminate the 
levying of duties  ADP 
2 7 Jun. 2006  Nippon Yakin 
Kogyo Co., Ltd and 
other four companies Ministry of 
Commerce Filed objections to  the 
decision of the sunset review 
for cold-rolled stainless steel sheet originated in Japan and 
South Korea     Maintain the 
decision  ADP 
sunset 
review 
3 12 Jun. 2007  Nippon Kodoshi 
Corporation Ministry of 
Commerce Requested for withdrawal of 
the review decision of 
Announcement No.30 Maintain the 
decision ADP 
III. T RADE POLICIES AND PRACTICES BY MEASURE  
(2) Measures Directly Affecting Imports (vi) Standards and other technical requirements 
20. In paragraph 43 of Part III, the Secretaria t's report states:  "In 2007 (the latest year for 
which data were available), around 14.5% of national standards, 15% of professional 
standards, and 19% of local standards were ma ndatory.  Voluntary standards, however, can 
become mandatory if they are referenced in mandatory conformity assessment procedures.  
Concerns were raised in the TBT Committee in  cases where no advance notice was given 
regarding such changes."  Frequently, U.S. ex porters are requested to comply with standards 
that have not yet been adopted by the National  People's Congress (the GB/T series) or standards 
for food safety, quality and hygiene that have no t been notified to the WTO for comment prior 
to enforcement.    WT/TPR/M/230/Add.1 
 Page 215 
 
 
   a. Please provide a list of all standa rds that are currently mandatory (the GB 
series) for all foods (processed and semi-pr ocessed), food additives, vitamins, 
contaminants, pesticides, veterinary drug s, and other residues, food packaging 
materials, food contact materials, food  containers, commodity standards, and 
hygiene standards as they relate to products, including live animals and 
aquatics, seed, and similar items pro duced or manufactured under Harmonized 
Systems Code Chapters 1-23, 41 (hides a nd skins), 44 (solid wood products), and 
52 (cotton).   
 b. Please provide a list of all recommended standards for (those that are not yet 
formally approved by the NPC) but are in place (the GB/T series) for the same 
products. 
Answer (a-b) 
Detailed information is available at China Standa rdization Administration's website www.sac.gov.cn. 
Interested parties may also check or enquire through the WTO/TBT-SPS Notification and Enquiry 
Center of China (www.tbt-sps.gov.cn). 
21. Paragraph 49 of Part III of the Secretaria t's report discusses the new Food Safety Law, 
which entered into force on 1 June 2009.   
 a. According to U.S. understanding, this law creates a new Food Safety 
Commission, which, with the guidance of the Ministry of Health, oversees the functioning, policy, and enforcement of food safety related operations in China via twelve different ministries.  Is that correct?  Please explain the regulatory 
role the new Food Safety Commission provides vis-à-vis sanitary and 
phytosanitary (SPS) standards and international trade. 
 b. What role does the State Council have vi s-à-vis food safety under this law?    
Answer (a-b) 
The Food Safety Law , effective on 1 June 2009, stipulates that China practices a food safety 
regulatory system of divided responsibilities in specific links of the entire food safety chain plus 
overall comprehensive coordination. The State C ouncil set up a National Food Safety Commission as 
the top-level authority to deliberate and coordi nate affairs concerning food safety, which is 
responsible for analyzing food safety situation, st udying, planning and guiding the overall food safety 
work, putting forth major policies on food safety re gulation, and supervising the implementation of 
food safety regulation responsibilities. The Commission has set up an office to undertake its daily 
work. Under the lead of the Commission, Ministry  of Agriculture, AQSIQ, State Administration for 
Industry and Commerce and State Food and Drug Administration supervise and administer 
respectively the production of agricultural products , food production, food circulation and catering 
service. Ministry of Health assumes the duty of overall coordination of food safety work, held 
responsible for food safety risk assessment, formulation of food safety standards, food safety 
information dissemination, determination of qualif ication criteria for food inspection agencies and 
formulation of inspections norms, and investigati on and treatment of major food safety incidents. 
22. In paragraph 49 of Part III, the Secretariat's report refers to China's "lack of 
notification of the new Food Safety Law before its implementation."  The new Food Safety Law 
is one of China's main pieces of legislation in  the SPS area.  According to the Secretariat's 
report, it "involves, inter alia , the promulgation of 'unified' national food safety standards."   WT/TPR/M/230/Add.1 
Page 216  
 
   a. Please explain why China did not notify this measure to the SPS Committee 
before its implementation.  What steps has China since taken to improve the 
timeliness of its notifica tions to the SPS Committee? 
 b. How many food safety measures have  been enacted under the new Food Safety 
Law?  How many of them have been notified to the SPS Committee with a 60-
day comment period? 
 c. Please explain how China's food safety , animal and plant health standards take 
into account science and/or the work of the Codex Alimentarius, the OIE and 
the International Plant Protection Convention.  Please provide recent examples from the State Administration of Quality Supervision, Inspection and 
Quarantine (AQSIQ) and the Ministry of Agriculture (MOA).   
Answer (a-c) 
The Food Safety Law  is based on the Food Hygiene Law  and there is no technical requirement that 
will have a major impact on international trade, ther efore, China did not submit notification before the 
Law was passed. However, after the Food Safety Law  entered into force, China timely submitted 
notifications on the 178 relevant food safety regula tions and standards based on the Law and provided 
a common period for the members. 
When drafting SPS measures, China will first consider  whether there are relevant standards, guidance 
and suggestions of the OIE, IPPC or CAC and dr aw up the SPS measures according to the relevant 
standards, guidance and recommendations . For example, China adopted the Entry and Exit Wood 
Packing Material Requirements  in 2009 according to the ISPM15 standard. 
III. T
RADE POLICIES AND PRACTICES BY MEASURE  
(2) M EASURES DIRECTLY AFFECTING IMPORTS  
(viii) Government procurement 
23. In footnote 45 of Part III, the Secretariat's report notes that "some parties have 
expressed concerns in the GPA Committee re garding (i) recently tabled draft Chinese 
procurement regulations that do not, in th eir view, move China decisively toward GPA 
compliance; and (ii) China's indigenous innovatio n initiative, which allegedly contains a number 
of preferential features raising issues vis-à-vis the GPA and other WTO Agreements." 
 a. Please explain why China is implementing a broad new system that seems to 
directly contradict its stated d esire to accede to the GPA.  
 b. Please provide details on how China's "indigenous innovation" initiatives will 
not constitute a market access barrier to foreign companies. 
Answer (a-b) 
Encouraging indigenous innovation of enterprises and building an innovative country are important 
strategies that China adopts to promote scientific development and transformation of the pattern of 
economic development. It also provides new fields for cooperation and more development 
opportunities to domestic and international entrepre neurs as well as foreign-invested enterprises in 
China. 
In the recognition of indigenous innovative products, a ll enterprises lawfully established in China are 
treated equally and all manufacturers as legal pers ons are entitled to apply for such accreditation.  WT/TPR/M/230/Add.1 
 Page 217 
 
 
  From April 10 to May 10, 2010, the Chinese co mpetent authorities published online the revised 
conditions for recognizing indige nous innovative products, i.e. th e Notice on National Recognition of 
Indigenous Innovative Products 2010 (Draft) for pub lic comments. The revised Notice clarified those 
provisions in the Notice of the previous year which caused misunderstandings among enterprises, 
including the description of indigenous intellectua l rights, the expression concerning initial trademark 
registration and time of application, etc. Curre ntly, the authorities are studying the comments 
collected. China welcomes foreign-invested enterprise s from all countries and regions to participate in 
the process, to increase their invest ment in research, development and innovation, to bring in high-
quality human resources and advanced technologies, and to enhance their cooperation with Chinese 
partners so as to move up to  a new level of development. 
24. Paragraph 65 of Part III of the Secretariat 's report states that "there are no provisions 
on local content, or rules of origin, to determin e whether a product is produced domestically."  
When does China plan to issue regulations to de fine "domestic products?"  Will China provide 
an opportunity for public comments on th e regulations before they are finalized? 
Answer Chinese government has drafted the standards for accr editation of domestic products to be procured 
by the government, which is now inviting public opi nions at the website of Ministry of Finance. 
Please refer to http://www.mof.gov.cn/zhengwuxinx i/bulinggonggao/ tong zhitonggao/201005/t2010 
0521_318992.html.  
25. Paragraph 66 of Part III of the Secreta riat's report states:  "In 2008, government 
procurement, valued at Y 599.1 billion, acco unted for 2% of GDP (in many countries, 
government procurement can account for 15-20% of  GDP).  The authorities maintain that this 
small percentage is mainly because China's gov ernment procurement system is new, and the 
coverage is small.  It covers only procuremen t by government departments, institutions, and 
public organizations at all levels, using fiscal funds, for goods, construction, and services listed 
in a Centralized Procurement Catalogue issued by  the Ministry of Finance or provincial bureau 
of finance, or where the value is above a prescribed threshold.  Procurement by SOEs is not 
covered, even when they may be performing no n-commercial or quasi-governmental functions." 
 a. What is the purpose of maintaining a narrow definition and scope of 
government procurement, which results in limited coverage?   
Answer 
Government procurement is a new issue in China. Du ring the legislation process, there were different 
understandings as to the application scope of the Government Procurement Law  and it was finally 
agreed that the Government Procurement Law  shall only apply to procurement by government 
departments, institutions, and pub lic organizations at all levels that use fiscal funds for goods, 
construction, and services listed in the Centralized Procurement Catalogue or where the value is above 
a prescribed threshold. Such a scope is practicable  based on the current conditions of China.    
b. If all government purchases outside of the Centralized Procurement Catalogue and 
below the prescribed threshold were taken into account, what would be the total value of 
government purchases and what portion of GDP would it comprise?  What is the basis for determining the prescribed threshold? WT/TPR/M/230/Add.1 
Page 218  
 
  Answer 
By far, China has not conducted any statistic work in  this respect and therefore no relevant data is 
available.  
The prescribed procurement threshold is set to iden tify the scope of decentralized procurement. The 
basis for the prescribed threshold is the implemen tation capability of relevant departments. Along 
with the enhancement of the implementation capab ility, the prescribed threshold for the procurement 
of goods and services by central government h as been lowered from 800,000 Yuan in 2003 to 
500,000 Yuan at present.   
26. Paragraph 69 of Part III of the Secretari at's report states:  "Partly reflecting its 
intention to join the WTO GPA, in 2007, China made legal provisions for the inclusion of 
imported products under certai n circumstances into its govern ment procurement system."  
How did the 2007 measure reflect China's intention to  join the GPA?  What  has been the effect 
of this measure? 
Answer 
Although the Government Procurement Law  prescribes that domestic products shall be purchased for 
government procurement, it also allows th e purchase of imported products under special 
circumstances. To implement this provision of the Government Procurement Law , China promulgated 
the Administrative Measures for Governme nt Procurement of Imported Products  in 2007. The 
promulgation of the rule is to facilitate the pur chase of imported products by making the procedures 
more operable and better streamlined, rather than to restrict the purchase of imported products.  
27. Paragraph 70 of Part III of the Secretar iat's report states that "the Government has 
been, inter alia :  accelerating the formulation of th e Implementation Regulations of the 
Government Procurement Law, improving coordination between  the Government Procurement 
Law and the Law on Bid Invitation and Bidding or Tendering."  Please describe how China is 
improving the coordination between the Gov ernment Procurement Law and the Law on Bid 
Invitation and Bidding or Tendering? 
Answer 
The Legislative Affairs Office of the State Council is now working on the drafting of the Regulations 
on Implementation of the Law on Government Procurement  and the Regulations on Implementation of 
the Law on Bid Invitation and Bidding . In this course coordination of  relevant provisions of the two 
laws will be considered.  
III. T
RADE POLICIES AND PRACTICES BY MEASURES  
(3) M EASURES DIRECTLY AFFECTING EXPORTS  
(ii) Export subsidies 
28. In paragraph 75 of Part III, the Secretar iat's report makes the following statement:  
"The authorities state that China does not provide  export subsidies."  However, as explained 
above, numerous WTO Members, including the Unit ed States, have previously identified and 
raised questions about a wide range of unreported subsidy programs, some of which have 
appeared to be contingent upon export perfor mance.  Indeed, in a recent WTO dispute, the 
United States, Mexico and Guatemala identified  dozens of sub-central government measures – 
none of which had ever been notified – promoting Chinese famous brands and other 
merchandise around the world through a wide ra nge of subsidies that were contingent upon 
export performance.    WT/TPR/M/230/Add.1 
 Page 219 
 
 
   a. In the Several Opinions of Liaoning Provin ce Encouraging the Expansion of 
Opening-Up in Costal Key Regions  (Liaoningfa No. 2006-3), the Liaoning 
provincial government describes incentiv es which are to be provided to "Five 
Key Regions" within the province.   A stated goal of this measure is to "[g]ive main support to export processing bases es tablished in the Five Key Regions."  
Further, the measure states that "the Foreign Trade Development Fund for 
Northeast Traditional Industrial Base will give priority to the funding of . . . updating exported products etc."  Can Ch ina please confirm the details of this 
program, and explain this program in  light of China's obligations under 
Article 3 of the Subsidies Agreement? 
 b. The Shandong Province Policies on Enco uraging Trade and Exportation 
Expansion  (Lu Cai Qi [2006] No. 5) appears to provide incentives to companies 
in Shandong Province contingent upon expo rt performance.  For example, this 
measure provides for interest discounts on loans to "productive exportation enterprises" that are used for research and development of export products.  
This measure also appears to provide s ubsidies for export credit insurance as 
well as grants to entities that have made "remarkable contributions to the foreign economic cooperation and int ernational trade development of the 
province."  Can China please confirm the details of this program, and explain this program in light of China's obligations under Article 3 of the Subsidies Agreement? 
 c. It appears that, based on publicly ava ilable information, the city of Shouguang 
within Shandong Province provides simila r incentives to companies contingent 
upon export performance.  The goal of this city program is to "increase trade and exportation enterprises" and "develop  key exportation enterprises."  Under 
this program, the city will provide a subsidy to exporting enterprises of 
RMB 0.04 for every US$1.00 in exports.  In  addition, the city of Shouguang will 
provide a 25 percent interest discount to enterprises on export rebate loans.  Can China please confirm the details of this  program, and explain this program in 
light of China's obligations under Article 3 of the Subsidies Agreement? 
 d. A program in Shuyang County in Jiangsu Province dated 18 July 2009 entitled 
"2009 Shuyang County Prize Policy to Promote Foreign Trade, Export and Use 
of Foreign Capital" appears to provide subsidies tied to export levels, in 
amounts which range from RMB 0.01-0.03 per US$1.00 of goods exported.  Products cited for this policy include indigenous innovation products, branded 
products and select textile and light industry, electronics and agricultural 
products, among others.  Can China please confirm the details of this program, 
and explain this program in light of Ch ina's obligations under Article 3 of the 
Subsidies Agreement?  
 e. On 25 December 2009, the Ministry of Industry and Information Technology 
(MIIT), the Ministry of Science and Technology (MOST), the Ministry of Finance (MOF) and the State-Owned Asse ts Supervision and Administration 
Commission (SASAC) issued the Catalogue Guiding Indigenous Innovation in 
Major Technologies.  This catalogue lists 240 equipment types that will be 
eligible to receive tax and other financia l benefits, among other things.  To be 
selected for the catalogue, a product need s to satisfy several criteria, one of 
which is that it generate or have the po tential to generate high foreign exchange 
earnings through exports.  Can China please confirm the details of this program, WT/TPR/M/230/Add.1 
Page 220  
 
  and explain this program in light of Ch ina's obligations under Article 3 of the 
Subsidies Agreement?  
 f. It appears that many sub-central  government level application forms for 
"indigenous innovation" product accreditation also include export criteria in application materials.  Examples include Jiangsu Province, Jinan City and 
Ningbo City.  Can China please confirm the details of these programs, and 
explain these programs in light of China's obligations under Article 3 of the Subsidies Agreement? 
Answer (a-f) 
China eliminated export subsidies as early as in 1991 and has also made commitment upon WTO 
accession. Due to the technical complexity of subs idy, members often have different understanding as 
to under what conditions a subsidy may constitute an export subsidy. This is not surprising. China's 
position towards export subsidy has been clear and c onsistent, i.e. we will observe the WTO rules and 
China's accession commitments. 
III. T
RADE POLICIES AND PRACTICES BY MEASURES  
(3) M EASURES DIRECTLY AFFECTING EXPORTS  
(iv) Tax rebates on exports 
29. Paragraph 80 of Part III of the Secretar iat's report explains that in China the value-
added tax (VAT) may be rebated on exports, but exporters are generally entitled to VAT 
rebates lower than the VAT actually paid.  The Secretariat's report notes that "China adjusts 
VAT rebate rates as part of its industrial policies,  to control, restrict, or otherwise 'manage' the 
export of certain products.  In particular, sinc e the beginning of the global financial crisis, 
China has increased VAT rebate rates several ti mes, the last one in June 2009."  The 
Secretariat's report also describes China's variabl e VAT rebate policies as "a levy on exports, 
which may, in turn, constitute an assistance to downstream processing of the products affected."  In response to questions posed in connection with China's second Trade Policy 
Review in 2008, China stated that it had no plans to phase out its variable VAT rebate policies. 
 a. Does China agree with the Secretariat's report's assessment that its variable 
VAT rebate policies act as an "assistance," or subsidy, to downstream processors?  Please explain. 
 b. The United States understands that China is seeking to rebalance its growth in 
part by promoting domestic demand-led growth.  Does China view its VAT 
rebate policies as consistent with its effort to rebalance its growth?  Please 
explain. 
 c. In the United States' view, China may be choosing to use variable VAT rebates 
in part because it has not yet develope d a fully functioning market economy and 
therefore cannot rely on the market to br ing about necessary adjustments.  Is 
China studying the possibility of adopting a uniform VAT rebate policy 
consistent with the policies prevailing in other WTO Members with a VAT system?  Please explain.   
Answer (a-c) 
China does not agree to the Secretariat Report on the point that VAT rebate for export constitutes 
"assistance" or subsidy to downstream industries. Th e fact that China does not fully rebate the VAT  WT/TPR/M/230/Add.1 
 Page 221 
 
 
  for exported products is due to such reasons as fiscal  capability and etc. It is not meant to give hidden 
support to downstream industries in China. Besides, the principle observed by China in adjusting the 
rate of tax rebate for export is that it should not exceed statutory tax rate. Therefore it does not 
contravene with the WTO rules. Under the current  national conditions, China is unable to give a 
specific time schedule for the ultimate elimination of  the difference between the rebate rate and the 
tax rate. 
30. Soda ash is one of the products whose export has been managed by China through the 
changes to VAT rebate rates discussed in paragr aph 80 of Part III of the Secretariat's report.  
Soda ash is an inorganic chemical that is used  in the production of glass and detergents.  
China's soda ash production capacity has grow n dramatically in recent years, even though 
95 percent of China's soda ash is produced thro ugh synthetic processes, rather than the natural 
process using mined trona ore (as in the United States, for example).  Synthetic production of soda ash is about one-half as energy efficient as  soda ash produced from trona and results in 
much higher emission of pollutants.  In July 2 009, China began to encourage the export of soda 
ash, changing the VAT rebate rate from zero to  9 percent, apparently in an attempt to address 
excess production capacity problems.  Please expl ain China's rationale for dealing with excess 
production capacity problems in an energy-in tensive, pollutant-emitting industry like China's 
soda ash industry by encouraging exports thro ugh VAT rebate rate changes.  Has China 
considered other means for achieving its objectives?  Please explain. 
Answer 
First of all, China's adjustment of tax rebate for export is not aimed at encouraging export. Instead, it 
is a special measure that has to be taken in respon se to market changes at the time of the crisis.  
In the case of soda ash, at present, China and the U.S. are the main exporters of soda ash in the world. 
In 2009, China's soda ash production capacity was 24 million tons and the actual output was 
20.014 million tons. It imported 32,400 tons and expor ted 2.3226 million tons and recorded an 
apparent consumption of 17.723 million tons. The total value of the exports was US$ 410 million 
in 2009. The production, domestic consumption and e xport of soda ash of the U.S. remain relatively 
stable over the years. Its total production capacity of soda ash is around 14.40 million tons, with a 
general capacity utilization rate of 70%-80%. In 2008, the production and export of soda ash by the 
U.S. reached 11.20 million tons and 5.20 million tons respectively.  
In 2009, due to the international financial crisis, the growth rate of major downstream industries of 
soda ash in China like the glass industry droppe d sharply, and the demand of other downstream 
industries like alumina industry also decreased subs tantially. All countries suffered from insufficient 
soda ash demand. China's main market of soda as h export is Southeast Asia. As the world's largest 
exporter of soda ash, the U.S. in the year adopted  measures like price reduction and etc to expand its 
market share, which has greatly affected the soda ash market in Southeast Asia. In response to the 
changes of international market, under the strong re quest of enterprises, China had no choice but to 
adjust the tax rebate for export of soda ash. Desp ite of the measure, the actual volume of export of 
soda ash by China did not witness substantial increase (see the table below). 
Soda ash export in 2009 (unit: tons) 
Month  January February March April  May June 
Export volume 164,187 211,493 279,692 239,698 170,377 215,828 
Month July August September October November December 
Export volume 181,740 170,891 181,724 168,160 169,614 169,213 WT/TPR/M/230/Add.1 
Page 222  
 
  Second, the adjustment of tax rebate rate for expor t is not a measure to address overcapacity problem 
as understood by the U.S. In recent years, China has been making efforts to eliminate obsolete soda 
ash production capacity and enhance energy saving and emission reduction. The Access Criteria for 
Soda Ash Industry  issued by Ministry of Industry and Information Technology specified requirements 
on project scale, energy consumption index, enviro nmental index and product quality in order to 
contain the expansion of the soda ash capacity.  
31. Aluminium foil and other finished aluminium products are other energy-intensive 
products whose exports are currently enco uraged through the VAT rebate rate changes 
discussed in paragraph 80 of Part III of the Secretariat's report.  Specifically, China has 
removed VAT rebates on exports of primary alumin ium products (such as bauxite, alumina and 
primary aluminium), and in many instances al so imposed export duties on them, while 
increasing VAT rebates to 13 to 15 percent on expo rts of finished aluminium products.  China's 
aluminium sector is highly energy-intensive and has been identified by the State Council as a 
sector plagued by overcapacity problems.  Plea se explain China's rationale for dealing with 
excess production capacity problems in a hi ghly energy-intensive industry like China's 
aluminium industry by encouraging exports th rough VAT rebate rate changes.  Has China 
considered other means for achieving its objectives?  Please explain. 
Answer 
The adjustment of tax rebate rate for export of  aluminium products was adopted under a background 
similar to that of the soda ash as mentioned above. The adjustment was made under the strong request 
of enterprises. It was not for the purpose of encouraging export or solving the overcapacity problem.  
III. T
RADE POLICIES AND PRACTICES BY MEASURES  
(3) M EASURES DIRECTLY AFFECTING EXPORTS  
(vi) Export prohibitions, restrictions, and licensing 
32. Paragraphs 82 through 86 and Box III.1 of  Part III of the Secretariat's report describe 
various export restraints maintained by Ch ina.  After discussing the "officially-stated 
rationale" for these export restraints, the repor t states:  "However, whether intended or not, 
export restraints for whatever reason tend to reduce export volumes of the targeted products 
and divert supplies to the domestic market, le ading to a downward pressure on the domestic 
prices of these products.  The resulting gap between domestic prices and world prices constitutes implicit assistance to domestic do wnstream processors of the targeted products and 
thus provides them a competitive advantage. Insofar as China is a major supplier of such a 
product, export restraints may also shift the terms of trade in China's favour."  Among other 
things, China continues to impose export quotas and export duties to restrain exports of rare 
earths, even though China is the world's lead ing producer of rare earths.  In fact, China 
produces more than 95 percent of the world's ra re earths, making China's export restraints 
especially trade-distortive.  Rare earths are an important raw material, used in producing many 
of the new green technology products, as we ll as many other high tech products.   
 a. Please explain the purposes underlying the export quotas that China currently 
imposes on rare earths.  Please also ex plain these export quotas in light of 
China's obligations under Article XI of the General Agreement on Tariffs and Trade 1994. 
 b. The United States understands that China maintains domestic production caps 
on rare earths.  To the extent that th ese caps already operate to conserve rare 
earths by limiting domestic production, what is the purpose of imposing quotas 
on exports of domestically produced rare earths?  Do the export quotas have any  WT/TPR/M/230/Add.1 
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  impact on the conservation of domestic ally produced rare earths?  Please 
explain.   
 c. In Section 11.3 of Part I 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.  Rare earths do not appear 
on the Annex 6 list.  Please explain the imposition of export duties on rare earths 
in light of China's obligations under Section 11.3 of Part I of its Protocol of Accession. 
Answer (a-c) 
China's export administration on a few products ar e for the purpose of protecting environment, 
protecting human, animal or plant life or hea lth, conserving exhaustible natural resources, or 
protecting national security. Such measures do not c onstitute arbitrary discrimination, or disguised 
restriction on international trade, and are fully consistent with WTO rules. Since the question 
concerned is related to the ongoing WTO dispute cases of DS394, 395 and 398, China will provide 
further comments after the final rulings.   
III. T
RADE POLICIES AND PRACTICES BY MEASURES  
(3) M EASURES DIRECTLY AFFECTING EXPORTS  
(ix) Export facilitation and marketing assistance  
33. Paragraphs 93 and 94 of Part III of the Secretariat's report discuss the efforts of the 
Export-Import Bank of China (EXIM Bank) to facilitate exports. 
 a. The United States notes that despite rep eated efforts at dialogue, to date China 
has not meaningfully described the general terms and conditions under which it 
provides export credits and whether such  terms and conditions are consistent 
with WTO rules and international norms.  Could China provide a general description of its export credit policies?   Would China be willing to commit to 
greater transparency with regard to it s export credit agencies' provision of 
export credits? 
Answer 
Information on the service portfolio of China Ex port-Import Bank (EximBank) is transparent and 
publicly available at its website www.eximbank. gov.cn. The bank's credit operation takes reference 
from articles in the Arrangement on Officially  Supported Export Credits of the Organization of 
Economic Cooperation and Development (OECD). Its lendi ng interest rate is either a fixed one taking 
reference from OECD-released CIRRs or a floating one, which is a reconciled London Inter Bank 
Offered Rate (LIBOR).  Hence, the interest rate is in line with international norms on export credit 
and does not constitute export subsidy. 
 b. According to publicly available information, China EXIM Bank provided 
CheryAuto with a loan of RMB 10 billion (US$1.5 billion) in December 2008 to 
help its international expansion.   Reportedly, the loan will primarily be used to 
support CheryAuto in implementing its strategy of "going global."  Please describe the terms of this loan.  Given that  this loan appears to have the purpose 
of promoting exports, please explain this loan in light of China's obligations under Article 3 of the SCM Agreement.   WT/TPR/M/230/Add.1 
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  Answer 
In December 2008, China Export-Import Bank si gned a 10 billion Yuan strategic cooperation 
agreement with the CheryAuto. The agreement is mere ly a framework agreement of intention. It is not 
a direct loan of 10 billion Yuan to the Chery Auto, nor does it constitute a binding loan commitment.  
34. Paragraph 94 of Part III of the Secretaria t's report states that "in an attempt to fight 
the global crisis, the Government launched campaign s to facilitate China's exports, such as the 
'421 project' by MOFCOM, under which US$42.1 b illion in export credits was provided for 
machinery and electronics products in 2009."   Is this  project still in existence?  If so, what plans 
does China have to phase out this project?  
Answer "421 project" refers to the efforts of the Chinese e xport credit insurance institution to support banks to 
provide trade financing to the market in the coming y ears in order to alleviate the constraint of trade 
financing and to promote the development of in ternational trade and economy. The project is 
implemented under the background that, due to the gl obal financial crisis, the trade financing market 
has experienced serious depression with liquidity  shortage, bringing un precedented pressure and 
challenges to international trade. Various intern ational organizations and governments have initiated 
series of measures to promote trade financing. Chin a initiated this project to encourage both policy 
and commercial financial institu tions to expand trade financi ng scale and increase liquidity in 
response to the proposal of the G20 London Summ it under the premise that WTO rules should be 
observed. Presently, this project is still under way. It  will be adjusted according to the situations of 
both the global economic recovery and th e improvement of trade financing. 
III. T
RADE POLICIES AND PRACTICES BY MEASURE  
(4) M EASURES AFFECTING PRODUCTION AND TRADE  
(i) Taxation and tax incentives 
35. Paragraph 116 of Part III of the Secretaria t's report states that "the Government has 
not undertaken any cost-benefit analysis of th ese tax incentives, which raises questions about 
their cost-effectiveness and thus China's fiscal tr ansparency. The authorities maintain that they 
are gradually enhancing evaluation of tax in centives to improve their cost-effectiveness and 
transparency."  Please provide additional detail about what measures authorities are taking to 
do so. 
Answer 
China is making efforts to further enhance polic y transparency by strengthening assessment of tax 
policies. For tax policies issued, tax collection situ ation including tax revenue changes and the effects 
of the policies will be followed. In the meantime, China is doing studies on the establishment of tax 
expenditure budget by referring to international prac tices. Generally speaking, China is still at the 
starting stage in this respect. However, this is defi nitely an area in which China is making efforts to 
promote transparency. 
III. T RADE POLICIES AND PRACTICES BY MEASURE  
(4) M EASURES AFFECTING PRODUCTION AND TRADE  
(ii) Direct expenditures, industrial po licies, and price "guidance" measures 
36. Paragraph 118 of Part III of the Secretariat's report states that the Government 
identified ten sectors (automotive, steel, ship building, petrochemical, textile, light manufacturing, non-ferrous metal, equipment manuf acturing, electronics and IT, and logistics)  WT/TPR/M/230/Add.1 
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  "most affected by the reduced external demand due to the global crisis" and issued sector-
specific industrial policies.  The Secretariat's  report explains that major measures issued 
pursuant to these policies included "lowering the t axes levied on enterprises, by, for example, 
adjusting VAT rebate rates; providing preferential loans or other financial assistance to enterprises in these industries to encourage, inter alia , innovation."  For each of the ten sectors: 
 a. Please identify the VAT rebate chang es and explain the factors analyzed in 
order to decide on the amount of the ch anges.  Is there a plan for phasing out the 
VAT rebate changes? 
Answer 
Tax rebate on exports is an inte rnationally prevailing practice. The VAT rebate rate adjustments made 
by the Chinese government in response to the interna tional financial crisis have been notified to the 
monitoring mechanism of the WTO Trade Policy Revi ew Body on the international financial crisis. 
For details, please refer to the verified informati on in the reports of the WTO Secretariat under the 
above mentioned mechanism. The main reason fo r such adjustments was that enterprises have 
suffered great difficulties with the shock of the crisis and have requested strongly for such 
adjustments. China mainta ins that since the adjust ments made to the tax rebate rates on exports 
strictly follow the principle that the rebate rate  be no higher than the rate levied, they are not 
inconsistent with WTO rules. For industry-speci fic examples, please refer to the answer to 
question 30. 
 b. What other methods, besides adjusting the VAT rebate rates, has China used to 
lower taxes levied on enterprises?  Wh at criteria must enterprises satisfy in 
order to qualify for the lower taxes identi fied?  Is there a plan for phasing out 
the lower taxes? 
Answer 
In addition to the adjustments of tax rebate ra tes on exports, tax policies China adopted under the 
industrial revitalization plans for ten sectors include mainly the purchase tax reduction by half, or 5%, 
for passenger cars with displacement at and belo w 1.6 liters during the period from 20 January to 
31 December 2009. In 2010, the purchase tax on these ca rs is adjusted backward to 7.5% from 5%, 
which is still lower than the normal rate of 10% and will be valid through the year. 
 c. Please describe the preferential loans provided to enterprises.  What criteria 
must enterprises satisfy in order to qua lify for the preferential loans?  Is there a 
plan for phasing out the preferential loans? 
Answer 
Commercial banks in China follow market principles  when providing loans. Whether to provide loans 
to certain or certain types of clients, under what conditions to provide loans, these are all decided by 
commercial banks themselves based on their indi vidual business development strategy and their 
studies of the credit record of the clients, as well as such factors as costs, earnings, assets quality and 
risks etc. 
 d. Please describe the other financial a ssistance provided to enterprises.  What 
criteria must enterprises satisfy in or der to qualify for the other financial 
assistance?  Is there a plan for phasi ng out other financial assistance? WT/TPR/M/230/Add.1 
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  Answer 
Financial supports provided under th e industrial revitalization plans for ten sectors are mainly those to 
promote direct consumption, including subsidi es for home appliances going to the countryside, 
automobiles and motorbikes to the countryside, and "old for new" of household appliances. Policies 
and measures including those aforesaid which have b een taken by China in the fight against the global 
financial crisis have been notified to the mon itoring mechanism of the WTO Trade Policy Review 
Body for the financial crisis. For more details of the policies and measures, please refer to the 
information contained in the monitoring report dr afted by the WTO Secretariat under the mechanism 
which has been verified by China. 
37. One of the sectors identified in paragra ph 118 of Part III of the Secretariat's report for 
boosted development is the automotive sector.  The United States understands that the sector-
specific plan for the automotive sector discusses  support for "export bases" for autos and auto 
parts.  Please describe the support provided, and explain this support in light of China's 
obligations under Article 3 of the Subsidies Agreement. 
Answer Policies under the industrial revitalization plan fo r the automotive sector include reduction of vehicle 
purchase tax rate by 5% for passenger cars with di splacement of or less than 1.6 liters from 
20 January 2009 to 31 December 2009.  In 2010, vehicle purchase tax rate has been adjusted from 5% 
back to 7.5%, which will be valid for 1 year. In addition, subsidies are provided for vehicle purchases 
by farmers, for trade-in of vehicles, and also for the promotion of energy-saving and new energy vehicles on a pilot basis. 
38. One of the sectors identified in paragra ph 118 of Part III of the Secretariat's report for 
boosted development is the shipbuilding sector.  The United States understands that the sector-specific plan for the shipbuilding sector calls for sp ecial credit lines for the purchase of domestic 
ships.  Please describe the special credit lines provided, and explain these special credit lines in 
light of China's obligations under Article 3 of the Subsidies Agreement. 
Answer 
The supports provided under the industrial revitalizati on plan for the shipbuilding industry are mainly 
to address specific issues brought about by the interna tional financial crisis, like the increased risk in 
ship delivery. Such supports mainly refer to comm ents of government that it hoped banks to ensure 
that the working capital loans committed under the c ontracts can be put in place on schedule, and that 
banks may provide appropriate loan extension in cas es where ship owners defer ship delivery. Such 
guiding comments do not constitute subsidies as defined by the WTO. 
39. One of the sectors identified in paragra ph 118 of Part III of the Secretariat's report for 
boosted development is the machinery sector.  The United States understands that the sector-
specific plan for the machinery sector establishes a risk compensation mechanism to encourage 
the first use of domestically-produced machin ery.  Please describe the risk compensation 
mechanism provided, and explain this risk co mpensation mechanism in light of China's 
obligations under Article 3 of the Subsidies Agreement. 
Answer 
The supports provided under the industrial revita lization plan for the equipment manufacturing 
industry mainly refer to the guiding comments of the government to encour age insurance companies 
to actively develop new insurance business, especially those for the first set of equipment, to spread  WT/TPR/M/230/Add.1 
 Page 227 
 
 
  the risk of project owners in their use of the first set of equipment. Insurance companies have 
completely independent discretion on whether to  provide such insurance products. Such guiding 
comments do not constitute subsidies defined by the WTO. 
III. T RADE POLICIES AND PRACTICES BY MEASURE  
(4) M EASURES AFFECTING PRODUCTION AND TRADE  
(iii) State-owned enterprises, private enterprises and corporate governance 
40. Paragraph 122 of Part III of the Secretariat's report states that SASAC intends to 
reduce the number of SOEs subject to its manage ment to 80-100 by the end of 2010.  What 
mechanism will be used to achieve this reduction?  Please explain. 
Answer The measures to be adopted include promoting the merge and acquisition of large SOEs, pushing 
forward the restructuring between applied technolog y research institutes and relevant manufacturing 
enterprises, and launching insolvency proceedings for some enterprises. 
41. Paragraph 122 of Part III of the Secretariat's report explains that China's state-owned 
enterprises include both central-level and local- level enterprises.  It also explains that the 
"State-Owned Asset Supervision and Administrati on Commission (SASAC) at the central level 
is responsible for managing government assets and reform of central-level SOEs; and SASACs 
at local levels are responsible for managing govern ment assets and reform of local-level SOEs."  
The United States understands that China established SASAC purportedly to separate government ownership and regulatory roles with regard to large SOEs and thereby to eliminate 
the conflicts of interest that exist when regul atory ministries carried out both functions.  
However, it appears that SASA C is actively involved in formulating industrial policies that 
directly impact SASAC-owned SOEs and their competitors.  For example, on 25 December 2009, together with the Ministry of Science and Technology, Ministry of Finance 
and MIIT, SASAC jointly issued the Catalogu e Guiding Indigenous Innovation in Major 
Technologies to encourage the development of do mestically produced technology equipment in 
certain industries.  Please explain whether China views SASAC's role in formulating industrial 
policies as creating the same conflicts of int erest that the creation of SASAC was supposed to 
eliminate. 
42. Paragraph 124 of Part III of the Secretariat's report notes that "although SOE 
dividends are paid to the Ministry of Finance,  they are grouped into a 'separate budget item' 
earmarked for SASAC, raising a question on the efficient use of these dividends (i.e., they may 
be used only by other SOEs)."  
 a. Please provide additional detail on how these funds have been used to date.  b. Is the practice of earmarking SOE divi dends for SASAC expected to continue?  
Please explain.  
Answer (a-b) The Secretariat Report is inaccurate in certain statement. According to the Opinions of the State 
Council on the Pilot Implementation of the State Capital Operating Budget , the state capital operating 
budget refers to the income and e xpenditure budget of the State as the owner to legally receive and 
distribute the proceeds from State capital. Income budget refers to the plan of the State to collect the 
proceeds of State capital from enterprises annually at a stipulated percentage; expenditure budget 
refers to the expenditure plan compiled by the St ate according to the scale of income of State capital WT/TPR/M/230/Add.1 
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  operating budget and the requireme nt of national economic growth. Income budget includes profits 
turned over to the State by State-owned ente rprises, bonuses and dividends received from State-
owned shares (equities), income from the transfer  of State-owned property (including State-owned 
shares) of an enterprise and also income from li quidations. Expenditure budge t shall be arranged and 
determined according to the macroeconomic polici es of the State and the tasks of the reform and 
development of State-owned enterprises at differe nt stages. When necessary, some expenditure may 
be used for social security purposes and etc. Therefor e, Secretariat Report is incorrect in stating that a 
certain portion of these dividends will be "earma rked" to be re-directed back to SOEs.  
The State-owned capital operating budget expenditure shall be arranged and de termined according to 
the macroeconomic policies of the State and the task s of the reform and development of State-owned 
enterprises at different stages. According to the  Measures for Compilation of Central State-owned 
Capital Operating Budget (for Trial) ,  the expenditure in the central State capital operating budget 
mainly includes: capital expenditure, which covers th e investment of State capital to new enterprises, 
increase of investment to existing enterprises a nd purchase of equities and shares from companies; 
expense expenditure, which covers the expenses for ma king up the costs for reform of SOEs; and also 
other expenditure such as the social security expenditure. 
43. Paragraph 125 of Part III of the Secretariat' s report indicates that "specified shares of 
SOEs engaged in certain sectors must be reserved fo r the State; i.e. 51% of shares in SOEs in 
resource-based and high-tech industries, and 35%  in agriculture and manufacturing."     
 a. Please provide further details on which specific sectors are bound by this 
regulation.   
 b. What portion of SOEs falls into these sectors?   Answer (a-b) 
China adopts the socialist market economy system, in which SOEs and other enterprises are equal 
competitors in the market. China would develop the public sector of the economy and at the mean 
time encourage and support the development of the non-public sector, so as to form a new pattern of 
fair competition and mutual promotion of various types of enterprises.  
China has never issued such policy fo r the State to control so-called certain industries. Article 7 of the 
Law on State-owned Assets of Enterprises  provides that the government promotes the concentration of 
State capital in important sectors that have a v ital bearing on the lifelines of national economy and 
national security. Sectors such as national defense i ndustry should constitute such sectors as have a 
vital bearing on the lifelines of the national ec onomy and national security. Currently State-owned 
assets account for a comparatively large share (82% ) in these sectors. For these sectors, for example 
petrochemicals and value-added telecom services, non-public owne rship and foreign capital are 
encouraged so as to promote the diversificati on of capital holders and property ownership. 
44. Paragraph 139 of Part III of the Secretar iat's report states that, prior to 2009, "a large 
number of SOEs bankruptcy cases were 'policy- led', through which the Government obliged 
SOEs 'with long-term losses and no possibility of recovery or with debts larger than assets' to 
declare bankruptcy within a certain time frame."  The United States understands that bankruptcy proceedings are now supposed to be based on the Law on Enterprise Bankruptcy, 
enacted in 2009.  
 a. Are there any SOEs that are still usin g "policy-led bankruptcy" proceedings?  If 
so, please indicate how many SOEs  are currently subject to them.  WT/TPR/M/230/Add.1 
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  Answer 
The review of all planned policy- led bankruptcy programs was completed by the end of 2008. Most of 
the programs have been carried out while implemen tation of a few of them had to be postponed to 
2009 and thereafter due to bankruptcy cost and employee settlement issues. 
 b. Please describe the major differences between "policy-led bankruptcy" 
proceedings and the bankruptcy proceedings  set forth in the Law on Enterprise 
Bankruptcy. 
Answer 
There is no other difference between "policy-le d bankruptcy" proceedings and the bankruptcy 
proceedings set forth in the Law on Enterprise Bankruptcy . The only difference is that the income 
from the realization of property of the bankrupt enterprise will first be used for placement for 
employees after payment of liquidation expen ses in the case of "policy-led bankruptcy". 
III. T RADE POLICIES AND PRACTICES BY MEASURE  
(4) M EASURES AFFECTING PRODUCTION AND TRADE  
(iv) Competition and consumer protection policy  
45. Paragraph 140 of Part III of the Secretar iat's report addresses competition in the 
aviation sector.  The United States notes that China's presence in the aerospace industry has increased significantly over the past several years.   Publicly available information indicates that 
the Chinese government has dedicated significant resources for the development of domestically 
designed and produced civil aircraft.  For exam ple, developing a large passenger airplane was 
listed as a priority project in China's 11th Five -Year Plan (2006-2010).  In addition, the State 
Council approved the "Large Aircraft Project" as  one of 16 Key Science & Technology Special 
Projects, as established by the National Me dium- and Long-Term Science and Technology 
Development Plan (2006-2020).  Once the Stat e Council approves a project, special funding 
becomes available from policy banks, such as the National Development Bank, China Export & Import Bank (EX-IM Bank) and China Agriculture Banks.  In May 2009, moreover, Premier 
Wen Jiabao announced that the central government  would arrange funding in the amount of 
RMB 32.8 billion for 2009 and RMB 30 billion for 2010 to support the implementation of 11 of these projects, including the Large Aircraft Project.  In addition, in 2008, the State approved the creation of Commercial Aircraft Corpor ation of China Ltd. (COMAC), a state-owned 
enterprise responsible for developing China' s first large commercial aircraft.  In 2009, 
COMCAC received US$2 billion in government f unding for the development of the ARJ21-700 
regional jet.  Furthermore, the Industrial and Commercial Bank of China (ICBC) has stated 
that part of its mandate is to help indige nous passenger aircraft programs like the ARJ21, in 
particular by helping airlines in other countries to lease the aircraft.   
a. Please identify all of the national an d provincial level documents directed to the 
implementation of industrial policy related to the development of China's 
aerospace industry.  
b. Please provide information on government  funds provided to specific aerospace 
projects such as the ARJ21 and the narrow body C919.  
Answer (a-b) 
Civil aircraft industry is a high-tech and highly capital-intensive industry. Many countries provide 
subsidies at least at the research and development stage as the R&D is a costly, risky and long-term WT/TPR/M/230/Add.1 
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  process. The R&D funds for the two models me ntioned above (ARJ21-700 and narrow-body C919) 
are raised by the enterprise s through multiple channels. 
c. Please provide information on th e terms and conditions under which the 
Government of China, including China's EX-IM Bank and state-owned commercial banks such as ICBC, provide in vestment subsidies, loan interest rate 
subsidies and loan financing for commercial aircraft projects.   
Answer 
After the shareholding reforms, China's state-owne d commercial banks have become market-oriented 
bodies which operate independently and assume sole re sponsibility for its profits and losses. Most of 
these banks are now listed companies. According to the Law on Commercial Banks , commercial 
banks have full and independent discretion on loan issuance. Ba nks have full and independent 
discretion as to whether loans to commercial airc raft projects should be issued and what criteria 
borrowers should satisfy in order to qualify for th e loans. Details about the loans are internal 
information of banks, and disclosure of such info rmation will be in line with the requirements for 
listed companies on information disclosure.  
It is learnt that the Industrial and Commercial Bank of China has not yet provided any loan to the 
Commercial Aircraft Co., Ltd, although the two side s have singed a strategi c cooperation agreement. 
The Export-Import Bank of China has not provided any financial support to ARJ21 or C919 project, 
and therefore there is no investment subsi dy or loan interest rate subsidies.  
In addition, China does not agree with the descri ption in the US question that special funding is 
available from policy banks for special major proj ects. Agricultural Bank of  China is a commercial 
bank, and China Development Bank has also been transformed from a policy bank to a commercial 
bank. Both of them have full and independent discr etion on whether to issue loans to a project based 
on commercial considerations and such loan s are not subsidies defined in the WTO. 
46. Paragraph 145 of Part III of the Secretar iat's report states that "MOFCOM approval is 
required for any acquisition transferring control of a domestic company relating to key 
industries with an actual or potential effect on national economic security, or of a company with 
a famous trade mark or 'venerable' company reg istration."  Please explain what criteria are 
used to determine whether a potential acquisition falls within one of these categories. 
Answer 
China is working on formulation of administrativ e rules on foreign mergers and acquisitions which 
may involve national security  in accordance with the Anti-monopoly Law . Meanwhile, the Interim 
Provisions on Recognition and Admini stration of Well-known Trademarks (revised) and the Rules on 
Recognition of China Time-Honoured Brands  (trial) have provided details on recognition and 
administration of well-known trademarks and China time-honoured brands, and the Interim 
Provisions on Mergers and Acquisition of Domestic Enterprises by Foreign Investors  requires that 
mergers and acquisitions involving such enterprises be declared with Ministry of Commerce for 
approval to ensure consistency of  the provisions in these rules. 
47. In paragraph 145, note 116, of Part III, the Secretariat's report notes that "the 
application of the Anti-Monopoly Law to foreign acquisitions of domestic enterprises has raised 
some concern.  For example, MOFCOM's rulings  with conditional approval and rejection are 
reportedly opaque, and need to be more fully explained."  Does China agree with this assessment?  If so, what plans does China have to improve in this area?    WT/TPR/M/230/Add.1 
 Page 231 
 
 
  Answer 
China does not agree with this assessment. The anti-monopoly examination of concentration of 
undertakings conducted by Ministry of Commerce is strictly in line with the provisions of the Anti-
monopoly Law , the Provisions of the State Council on Thresholds for Prior Notification of 
Concentrations of Undertakings  as well as other relevant regulations and departmental rules. Such 
examination applies to domestic and foreign ente rprises of different ownership structures equally 
without discrimination. Since the entry into force of the Anti-monopoly Law , Ministry of Commerce 
has publicized decisions on prohibition of con centration of undertakings and on imposition of 
additional conditions on concentra tion of undertakings. Such deci sion are understood and accepted by 
relevant enterprises. 
III. T RADE POLICIES AND PRACTICES BY MEASURE  
(4) M EASURES AFFECTING PRODUCTION AND TRADE  
(v) Intellectual property rights 
48. Paragraph 159 of Part III of the Secretar iat's report indicates the Patent Law "allows 
for a compulsory license if the patent owner, wi thout justification, has failed to "sufficiently" 
exploit patent rights for three years or uses th e rights in a manner that eliminates or restricts 
competition.  According to the authorities, this te st of sufficiency of use will be explained in the 
implementing regulation (to-be-promulgated)."  What Chinese government agency or agencies is/are being charged with drafting these regulatio ns?  What is the timetable for completion?  
Will there be an opportunity for interested parti es, including the U.S. government, to provide 
comments?   
Answer 
The amendment to the Rules on Implementation of the Patent Law  has completed. The revised Rules 
on Implementation of the Patent Law  came into force on 1 February 2010. On 12 December 2008, 
State Intellectual Property Office held a forum to li sten to the opinions of the US Embassy and US 
enterprises on the revision of the Rules on Implementation of the Patent Law . 
49. Paragraph 160 of Part III of the Secretar iat's report concerns the requirement in the 
patent law that patent applicants disclose the direct and original source of origin of genetic 
resources when the completion of an invention depends on the genetic resource. Further, the report indicates that for inventions depending upo n genetic resources, the access to use of which 
is against law and/or administrative regulatio ns, the invention should not be granted.  
Answer Access to or use of genetic resources against law and/or administrative regulations refers to the access 
to or use of genetic resources which fails to follow  the provisions of relevant laws and administrative 
regulations of China requiring obtaining prior ap proval from relevant administrative authority or 
permission of owners.  
For example, according to Article 7 of the Measures of the People's Republic of China for 
Examination and Approval of Entry and Exit an d Foreign Cooperative Research and Utilization of 
Livestock and Poultry Genetic Resources , exit of livestock or poultry genetic resources included in the 
protection list shall obtain prior approval from the Mini stry of Agriculture. No patent shall be granted 
to an invention if the invention is dependent upon livestock or poultr y genetic resource included in the 
protection list whose exit however has not gone  through the aforesaid approval procedures. WT/TPR/M/230/Add.1 
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  b. Please explain how a decision not to grant a patent, under such circumstances, 
can be challenged.  
Answer 
In this case, the applicant may request patent re-exa mination board to review the decision not to grant 
a patent. Applicants who are not satisfied with the de cision of the review may bring a suit to the court. 
50. Paragraph 161 of Part III of the Secretaria t's report states that "patent applications and 
grants continued to increase rapidly.  In 2008, there were 828,328 applic ations, up 19.3% from 
2007."  When will the 2009 figures be available?  
Answer 
The 2009 figures are available at the official websit e of State Intellectual Property Office. In 2009, 
China accepted 976,686 patent applications, an incr ease of 17.9% compared with that in 2008. 
51. Paragraph 169 of Part III of the Secretariat's report indicates that a law on 
geographical indications is to be issued in 2010.  What is China's timeline for finalizing this law?  
Answer 
Currently, there is no timetable for the legisla tion plan specifically on geographical indications. 
52. Paragraph 172 of Part III of the Secretariat's report indicates that geographical 
indications are protected permanently once regist ered with MOA.  Is there any opportunity to 
challenge registration before or after it is re gistered with MOA?  How would a party who has 
registered its GI trademark at the State Ad ministration for Indus try and Commerce seek 
cancellation of a conflicting mark at MOA or AQSIQ?   
Answer The geographical indication protection is carried ou t by the State Administration for Industry and 
Commerce (SAIC), the Ministry of Agriculture, and General Administration of Quality Supervision, 
Inspection and Quarantine (AQSIQ). They differ from e ach other in respect of legal basis, protection 
means and scope, remedies, division of duties and work focuses. The SAIC protects geographical 
indications by applying collective trademark and ce rtification trademark registration pursuant to the 
Trademark Law . Corresponding remedies for geographica l indication infringement include 
administrative, civil and criminal ones. The Ministry  of Agriculture has registration administration for 
geographical indications of agricultural products based on administrative rules formulated in accordance with the Law on Quality Security of Agricultural Products . The focus of the protection is 
on geographical indication resources of agricultura l products, product quality and traditional farming 
culture. AQSIQ's protection of geographical i ndication focuses on processing, which is based on 
administrative rules formulat ed in accordance with the Product Quality Law . 
Under such a mechanism, there will be no GI regist ration conflict as the subjects for GI registered 
with different authorities are not the same. Therefor e, there will not be such case that one applicant 
who has registered its GI trademark at SAIC applies for cancellation of a conflicting trademark at MOA or AQSIQ. 
According to Article 12 of the Administrative Measures for Geographical Indications of Agricultural 
Products  and Article 11 of the Registration Procedures of Geographical Indications of Agricultural 
Products , within the public notice period of the geographi cal indications of agricultural products, any  WT/TPR/M/230/Add.1 
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  entity or individual that has any objection to the c ontent of the notice shall, within 30 days from the 
date of the notice, present the objection to the Ag ricultural Food Quality Sa fety Center under the 
Ministry of Agriculture (MOA) in written form, and explain specific content objected against and the 
reasons. The Agricultural Food Quality Safety Ce nter shall then forward the objection to the 
provincial agricultural authorities concerned for comme nts and views, and afterwards organize review 
by the expert committee for the registration of geog raphical indications of agricultural products. In 
case that no objection has been received, the Agricu ltural Food Quality Safety Center will submit the 
GI to MOA for decision of registration. For the GIs decided to be registered, the Certificate on 
Registration of Geographical Indications of Agricultural Products  will be issued and relevant notice 
will be published.  
According to Article 18 of the Administrative Measures for Geographical Indications of Agricultural 
Products , where an agricultural product of which the ge ographical indication has been registered or a 
registration certificate holder fails to satisfy the requir ements specified in Article 7 or Article 8 of the 
rule, MOA shall write off the registration cer tificate and publish an notice thereon.  
53. Box III.2 of Part III of the Secretariat's report states that "Enforcing intellectual 
property rights at the border is the responsib ility of Customs, which seizes imports and exports 
of goods infringing patents, trademarks, and copyright and related rights (ex officio)."   
a. Please provide more detail on what happens to the goods once seized.   
Answer 
In accordance with the Regulations on Customs Protection of Intellectual Property Rights , the 
Customs will investigate the facts of infringement  after detaining the suspected infringing goods. The 
goods found infringing upon the intellectual property ri ghts by the Customs after investigation will be 
confiscated. 
b. When outbound IPR violating goods are interdicted, how a re those goods traced 
back to the Chinese manufacturer and what penalty action then is taken?   
Answer Currently, Chinese Customs imposes administrativ e penalties on consignees and/or consignors of 
infringing goods in accordance with the Regulations on Customs Protec tion of Intellectual Property 
Rights . 
IV. T
RADE POLICIES BY SECTOR  
(1) I NTRODUCTION  
54. Paragraph 7 of Part IV of the Secretariat's report states:  "Limitations on foreign 
participation still exist in telecommunications, maritime and air transport, legal, accounting, 
audiovisual, tourism, and postal services."  This statement implies that limitations do not still 
exist in other services sectors.  In fact, limit ations on foreign participation still exist for 
financial, construction, educational and enviro nmental services.  Does China have any plans to 
ease or remove limitations on foreign participat ion in any of the services sectors listed above?  
Please explain.  
Answer 
As a developing country, China has been constantly  promoting the reform and opening up in the 
services sector, although the service s industry in China is still in th e early stage of development. WT/TPR/M/230/Add.1 
Page 234  
 
  China will further raise the devel opment level of the services sector  and its proportion in the national 
economy. In this respect, China will continue to cons ummate its policies for market access of services 
sectors, speed up the establishment of an open, fair , and standardized system for services suppliers 
and encourage the participation of private investment including foreign investment. To be specific, 
China is going to expand the br eadth and depth of opening up in the services sector, encourage 
foreign capital to invest in energy conservati on and environmental protection services, modern 
services such as industrial designing, outsourcing, l ogistics etc, and Chinese and foreign companies 
are also encouraged to strengthen R&D cooperation. To build sound foreign investment environment, 
China will continue to streamline procedures for qua lification and licensing. The State Council issued 
Certain Opinions on Accelerating the Development of Services Sector  in 2007 and Certain Opinions 
on Further Improving the Use of Foreign Capital  early this year. The Catalogue for the Guidance of 
Industries for Foreign Investment  will be revised for the fifth times, and Catalogue of Advantaged 
Industries for Foreign Investment in Mid-West China  will also be amended in the near future. These 
latest development will certainly result in furt her market access opportunities for foreign services 
suppliers in China.  
As a member in WTO acceded not long ago, China has made extensive commitments in the services 
sectors. 100 services sectors and sub-sectors are liberalized according to China's accession 
commitments. Wholly foreign-owned subsidiaries ar e allowed in 54 sub-sectors and majority foreign 
ownership is allowed in other 23 sub-sectors. More over, national treatment is accorded to foreign 
invested enterprises in more than  80 sub-sectors, and most mode 1 and 2 commitments are "none" for 
foreign services suppliers. Like many other members, China only maintains very few equity 
limitations on some important and sensitive sectors. China will continue to promote liberalization in 
the services sector in accordance with its domestic  market circumstance and its bilateral and 
multilateral trade agreements.  
IV. T
RADE POLICIES BY SECTOR  
(2) A GRICULTURE  
(iii) Policy instruments 
55. Paragraph 17 of Part IV of the Secretaria t's report states that tariff-rate quotas (TRQs) 
are applied to agricultural products, including wh eat, maize, rice, sugar, wool and cotton.  It 
also notes that a substantial amount of TRQs ar e allocated to State Trading Enterprises (STEs).  
How is China ensuring transparency in the a llocation and utilization of quotas reserved for 
STEs?  Is China's quota administration, particular ly at customs, consistent between STEs and 
non-state enterprises?  Please explain. 
Answer 
According to China's Accession Protocol, grain, suga r and cotton are state trading products, therefore, 
it is natural that a substantial amount of TRQs are allocated to the state trad ing enterprises. According 
to the accession commitments, the Chinese government issued the Measures for the Administration of 
Import Tariff Rate Quotas of Agriculture Products  in 2003, which embodied the unified, fair, 
impartial, transparent, predictable and non-discrim inatory principles for quota administration. TRQs 
are allocated in strict accordance with the above mentioned rule, an d there are no differences on TRQ 
eligibility criteria, allocation and adjustment admi nistration between state trading enterprises and non-
state trading enterprises. 
56. Paragraph 18 of Part IV of the Secretaria t's report states that some agricultural imports 
to China remain subject to automatic licensing.  Please identify the complete list of agricultural 
products subject to automatic licensing.    WT/TPR/M/230/Add.1 
 Page 235 
 
 
  Answer 
For the list of agricultural products subject to automatic licensing, please refer to quantitative 
restriction notifications submitted by China to WTO every year. In 2010, agricultural products subject 
to automatic import licensing include chickens, ve getable oil, tobacco, milk, milk powder, whey, 
rapeseed, soybean meal, soybeans, pork and by-produ cts. For tariff lines of such products, please refer 
to http://www.mofcom.gov .cn/aartic le/b/c/200912 / 2009 1206714140.html. 
57. Paragraph 18 of Part IV of the Secretar iat's report states that China has declared a 
policy objective of maintaining a 95 percent self-sufficiency ratio for grain.  Can China provide information regarding how it intends to achieve th is policy objective?  To which grains does the 
self-sufficiency ratio apply?   
Answer: For information about self-sufficien cy ratio for grain, please refer to the Outline of the 
National Program for Long and Medium-Term Food Security (2008-2020) promulgated in 2008 at 
http://www.gov.cn/jrzg/2008-11/13/content_1148414.htm. Se lf-sufficiency ratio is applicable to the 
general concept of "food", incl uding cereals, beans and potatoes.  
58. Paragraph 33 of Part IV of the Secret ariat's report states that, in 2008, "the 
Government decided to relax the constraints on  the transfer of land-use rights and allowed 
exchange markets for trading such rights.  The authorities regard transfer of the rights an important element of land management and en courage these transfers; they have allowed 
farmers to transfer the operation right of the land contract through various forms, including 
subcontracting, leasing swapping."  The United  States understands that the nature of a tenure 
right, as well as the purpose of the land-use rights, may not be changed.   
 a. Please explain the policy justification for not allowing an agricultural land-use 
right owner to apply for a change in land-use purpose, in line with local zoning, which would allow the owner to reap the full price for the eventual, non-agricultural, use of the land-use right.  
Answer In China, land is public-owned. Farmers obtain th e rural land use right in accordance with the law by 
way of the land management right contracting, a nd use such land for agricultural production. During 
the contracting term, the farmers have the right to engage in agricultural production activities at their 
own wish; have the right to transfer the right to land contractual management through various ways on 
a lawful, voluntary and compensable basis, includi ng subcontracting, leasing, swapping and etc. In 
cases where the contracted land is expropriated, requi sitioned or occupied, the farmers have the right 
to obtain resettlement compensation. However, the fa rmers shall not change the agricultural use of the 
contracted farmland.  
To strengthen farmland protection, China implements  a system which controls over the purposes of 
use of land. Agricultural land can be altered to construction land only when it complies with overall 
land use planning, obtains approval based on law a nd regulations and realizes dynamic balance of 
total amount of farmland. The reasons behind the system are as follows. First, from the natural 
properties of the farmland, agricultural land is a scar ce resource which is difficult to regenerate and is 
immovable. Protecting agricultural land resource,  especially farmland resource, is essential to 
safeguarding national food security and ensuring e ffective supply of agricultural products. Second, 
China is a developing country with large populatio n and limited farmland and the per capita farmland 
is less than 0.1 hectare. China has to feed 22% of  the population of the world with 7% of farmland of 
the world. Therefore, protection and rational use of farmland is a fundamental State policy of China. 
Third, from the nature of the right itself, the ope ration right of the land legally obtained by farmers WT/TPR/M/230/Add.1 
Page 236  
 
  through land contracting is a usufructuary right. Fa rmers have no right to ch ange the nature of the 
land ownership or the purpose of the land use.  
Agricultural land can only be transferred to cons truction land in the following two approaches. One 
approach is that the government could expropriate the agricultural land for construction purposes. In 
this case, the government should provide full compen sation in accordance with the law for farmers 
whose land has been expropriated. Moreover, the local government expropriating the land should also 
ensure that landless farmers are eligible to the so cial security system and their livelihood is well 
arranged in the long term with their living standard  unaffected. The other approach is that the rural 
collectives could transfer the farmland in accordance with the law and upon approval for 
establishment of township enterprises, building of ru ral residence, rural public welfare facilities and 
public utilities etc. In this case, the profit from leasi ng or transferring such construction land should 
belong to all members of the rural collectives. In fu ture, China will further deepen rural land system 
reform, improve the property right system of the collective-owned cons truction land, gradually 
establish an urban-rural integrated market of cons truction land and enable farmers to fully enjoy the 
profit from land value addition in accordance with th e requirement for more coordinated urban and 
rural development. 
 b. Where in China are exchange markets fo r trading land-use rights located?  To 
what extent are exchange markets for trading land-use rights utilized?  What laws and regulations govern these exchange markets?  
Answer 
At present, land-use rights in China mainly include the right to use la nd for construction, the right to 
land contractual management (of farmers), and the right  to land for house site in villages (of farmers). 
Land-use right exchanges vary with the different nature of the rights.  
For the right to use land for construction, the righ t to use state-owned land for construction can be 
traded by means of assignment or transfer with compensation, lease, or mortgage etc. There are 
mainly two types of the right to use land for cons truction that are traded through market, namely the 
right to use construction land for commercial pur poses (business, tourism, entertainment, and 
commercial housing etc) and the right to use co nstruction land for industries. Such rights are 
exchanged in the way of open competition includin g bid invitation and bidding, auction or market 
listing for trading. The exchange markets of the ri ght to construction land are mainly those established 
by local governments at the county level and above.  
Laws and regulations governing exchange of th e right to use land for construction include Property 
Law, Land Administration Law , Law on the Administration of the Urban Real Estate , Regulations on 
Implementation of the Land Administration Law , Interim Regulations concerning the Assignment and 
Transfer of the Right to the Use of the State-owned Land in the Urban Areas  and so on.  
For the right to land contractual management, the la w allows farmers to transfer the right to land 
contractual management in different ways includi ng subcontracting, leasing, swapping and etc so as to 
promote the development of their business on proper scale in various forms. At present, the exchange 
market of the right to land contractual management  is generally still at an early stage. Some local 
governments have established exchange markets of the right to land contractual management on a 
pilot basis. In most localities there are organizations  at township and county levels providing farmers 
with services for land-use right transfer like information release, policy consulting, contract signing, right registration, dispute mediation, price assessment and etc.  
Laws and regulations governing exchanges of the right to land contractual management include 
Property Law , Law on Land Contract in Rural Areas , Law on Mediation and Arbitration of Disputes  WT/TPR/M/230/Add.1 
 Page 237 
 
 
  concerning Land Contract in Rural Areas , and Administrative Measures on Transfer of the Right to 
Land Contractual Management in Rural Areas  and so on.  
For the right to land for house site in villages, Chin a implements an allocation system in rural areas. 
Rural land for building houses can only be allocated to  residents living within the village where the 
land is located, with one household possessing one pi ece of land for house site. Farmers have the right 
to possess and use the land for house site and they also  have the right to benefit from the right to the 
land for house site.  
Laws and regulations governing the ri ght to land for house site include Property Law, Land 
Administration Law, and Regulations on Implementation of the Land Administration Law  and so on. 
IV. T RADE POLICIES BY SECTOR  
(3) E NERGY  
(i) Introduction 
59. In paragraph 36 of Part IV, the Secretar iat's report explains that, in 2008, the 
Government restructured the regulatory framework for energy by setting up a National Energy Administration (NEA), with the intention of  building an effective national-level energy 
institution.  The Secretariat's report also states that the NEA appears to lack the authority to 
effectively coordinate the interests of government agencies and SOEs.  The level of autonomy of 
the NEA from NDRC on energy policy is also questioned.    
 a. Please explain whether further reform of China's energy regulatory framework 
is expected in the future. 
 b. Please explain whether the government contemplates a stronger future role for 
the NEA.  
Answer (a-b) 
In March 2008, the State Council conducted the sixt h institutional reform, in which it was decided to 
establish National Energy Administration and later also National Energy Commission, and to cancel 
National Energy Leading Group and its administrative body. 
In August 2008, the National Energy Administrati on formally began to function, directly under 
National Development and Reform Commission (ND RC). Two years after that, National Energy 
Commission as a high-level energy deliberation and coordination authority was formally established 
in January 2010. National Energy Commission is main ly responsible for the overall coordination of 
major energy issues, in which Premier WEN Jiabao holds the post of director, Vice Premier LI Keqiang holds the post of deputy director, and leading officials from 21 central ministries and 
commissions serve as members of the Commission,  including NDRC, Ministry of Science and 
Technology, Ministry of Industry and Information Tec hnology, Ministry of Finance, Ministry of Land 
and Resources, Ministry of Environmental Protecti on, Ministry of Transport, Ministry of Water 
Resources and State Electricity Regulatory Commission (SERC). The National Energy Administration acts as the administrative body of  the Commission. This new framework provides 
guarantee for decision-making, coordination and enforcement on energy issues. The administration 
over the energy industry is more centralized, clearer and further strengthened. WT/TPR/M/230/Add.1 
Page 238  
 
  IV. T
RADE POLICIES BY SECTOR  
(5) S ERVICES  
(ii) Financial services 
60. In paragraph 58, note 59, of Part IV, the Secretariat's report states:  "No single foreign 
financial institution may own more than 20% of the equity of a Chinese financial institution.  In 
addition, if the combined equity investment of all foreign financial institutions in a non-listed 
Chinese financial institution is equal to or  exceeds 25%, the non-listed Chinese financial 
institution will be regulated as a foreign-funded financial institution;  if the combined equity investment of all foreign financial institutions in  a listed Chinese financial institution is equal to 
or exceeds 25%, the listed Chinese financial inst itution will continue to be regulated as a 
Chinese financial institution.  The term 'Chinese financial institutions' referred to in the Rules 
comprise the Chinese commercial banks, urban and rural credit co-operatives, trust and 
investment companies, financial leasing compani es, finance companies affiliated to enterprises, 
and other Chinese financial institutions chartere d by the CBRC that are legally incorporated 
within the territory of the People's Republic of China."   
 a. Could China please clarify this policy?  In particular, please explain how it 
relates to the following statement of the representative from China during the Transitional Review Mechanism m eeting in November 2009 before the 
Committee on Trade in Financial Services:   "[The representative from China] 
said that the 20 per cent cap on equity in vestment by a single foreign financial 
institution in a Chinese-funded financial institution reflected a viable policy 
orientation in light of the level of deve lopment of the Chinese banking industry.  
The introduction of overseas investors in Chinese banks was still at an initial stage.  This requirement afforded both Chinese banks and their foreign stake-holders considerable latitude for furth er cooperation.  Besides, the current 
financial crisis revealed that there were ma ny imperfections in risk management 
and operation modes in the global financ ial system.  She reaffirmed that China 
would not change the 20 per cent equity cap for the time being."  
Answer 
According to China's Services Schedule, qualified foreign financial institu tions are allowed to 
establish wholly foreign-owned banks, including subs idiaries with legal person status and branches. 
However, China did not make commitments on the ac quisition of domestic banks by foreign financial 
institutions. Nevertheless, China allo ws foreign investors to acquire equities of domestic banks up to a 
certain level. According to the Measures on Administration of Equity Investment of Overseas 
Financial Institutions in Chinese-funded Financial Institutions , the percentage of equity investment of 
a single overseas financial institution in a Chinese -funded financial institution may not exceed 20%. 
As for the requirement that "if the aggregate per centage of equity investment of multiple overseas 
financial institutions in a non-lis ted Chinese-funded financial institutions reaches or exceeds 25%, 
such non-listed Chinese-funded financial institutions shall be regulated as a foreign-funded financial 
institution", it is in accordance with Article 4 of the Law on Chinese-Foreign Equity Joint Ventures  
and is in no violation of China's commitment to the WTO. 
China's banking sector is still under-developed. With the international financial cr isis not being out of 
the scene, China has every reason to be cautious in further liberalization of the sector. On the other 
hand, the stipulations are also related to the need  of prudential supervision provided for in the Annex 
on Financial Services under the GATS, the implementa tion of which is for the purpose of protection 
of investors, depositors and ensuring the inte grity and stability of the financial system.  WT/TPR/M/230/Add.1 
 Page 239 
 
 
   b. Can a foreign financial institution alone or in conjunction with other foreign 
financial institutions purchase in full the equity of a Chinese-funded financial 
institution, as provided in the banking services section of China's GATS Schedule accompanying its Protocol of Accession?  In its GATS Schedule, China committed to eliminate, within five yea rs, any existing non-prudential measures 
restricting ownership, operation, and juridical form of foreign financial 
institutions.   
Answer 
As explained above, a foreign fi nancial institution may not purchase in full the equity of a Chinese-
funded financial institution alone or in conjunction wi th other foreign financia l institutions. However, 
it may purchase up to 20% equity of a Chinese-funde d financial institution alone, or purchase up to 
25% equity of a Chinese-funded financial institution in conjunction with other financial institutions. 
61. Paragraph 61 of Part IV of the Secretaria t's report notes the high concentration of 
China's insurance market in both the life and no n-life sectors, where a few domestic companies 
hold a large share of the market.  What considera tion is China giving to the encouragement of 
further competition in these sectors?   What cons ideration is China giving to the encouragement 
of further competition in sectors such as third pa rty auto insurance and political risk insurance, 
which are currently closed to foreign participation? 
Answer 
China made comprehensive commitments in the insurance sector during the accession negotiations. 
Foreign insurers are allowed to establish wholly fo reign-owned non-life insurance companies. For life 
insurance, foreign insurers are allowed to establish joint-venture companies with foreign ownership 
up to 50%. Since China's accession to the WTO, the number of fore ign-invested insurance companies 
has increased steadily. Foreign-invested insura nce companies' business scope and geographical 
coverage have also been on the rise and these co mpanies have become an important component of 
China's insurance sector.  
According to the China Insurance Regulatory Co mmission (CIRC), at the end of 2008, there were 
8 insurance groups and 112 insurance companies in  China, among which 48 were foreign-invested 
insurers. By December 2009, 52 foreign insurers  from 15 countries and regions have established 277 
business entities in China. 
The current market status of China's insurance sector  is both the result of history and the outcome of 
the market competition. The insurance market is an  important component of the financial market, and 
therefore also falls under the prudential supervision of the financial regulators, who are responsible 
for safeguarding the stability of the financial system  and the interests of the policy holders. China will 
decide on future liberalization according to the gene ral development of the financial system and the 
market situation of the insurance sector. 
With regard to the compulsory third party auto  insurance, according to China's WTO commitments, 
foreign non-life insurance companies are not allowed to engage in the statutory insurance business, 
which includes the third party auto liability insurance. As for political risk insurance, given different 
interpretations of this particular service, we are not able to make specific response to the question 
before further information is given on what kind of services the subject insurance will cover. 
62. Paragraph 63 of Part IV of the Secretariat's report discusses the new Rules on 
Administration of Insurance Companies.  Please  explain how these rules work in practice.  Are 
the applications of foreign companies responded to  according to the timeframes set forth in the WT/TPR/M/230/Add.1 
Page 240  
 
  regulations? Are foreign companies welcome to  apply for both concurrent and consecutive 
branch approvals?  How many foreign companies have obtained approvals for new branches or sub-branches since their inception?  How many domestic companies?   
Answer 
Since the promulgation of the Rules on Administration of Insurance Companies , China Insurance 
Regulatory Commission has been examining the a pplications from domestic and foreign-funded 
insurance companies in acco rdance with the Rules and other relevant laws and regulations. Foreign-
funded insurance companies have been granted national treatment in this regard. As to the situation of 
approvals in detail, please refer to the Results of Administrative Licensing under the Administrative 
Licensing column at the official website of CI RC, namely http://www.circ.gov.cn/web/site0/tab230. 
63. Paragraph 65 of Part IV of the Secretariat' s report notes that, in order to provide asset 
management services in China, insurance comp anies must have a minimum of eight years' 
experience in China.  The United States urges China to allow providers of these services to rely 
on their global capital, experience and staffi ng resources to carry out their activities.  The 
United States also understands that China may have issued regulations to relax the 
requirements in this sector.  Can China please clarify?   
Answer 
Insurance asset management service was not part of  China's accession commitments. China's current 
policy is fully consistent with its commitments in the insurance sector. Reform and opening-up are the 
basic strategy for the development of China's ser vices industry; China is willing to discuss further 
market liberalization on a reciprocal basis with other WTO members in the market access negotiations 
under the Doha Agenda. 
64. Paragraph 66 of Part IV of the Secretar iat's report discusses China Post Life Insurance 
Company.  The United States understands that private companies have been invited to distribute their products through China Post Life Insurance Company.  Would China please 
elaborate on the procedures private companies would need to follow to gain approval to 
distribute products through this network?  Have  private domestic or foreign companies applied 
to do so?  If so, how many have been a pproved?  Is the China Insurance Regulatory 
Commission the primary regulator of China Post Life Insurance?  Do other government agencies have regulatory oversight?  Please explain. 
Answer 
China Post Life Insurance Company is a commercial life insurance company. Like other life insurance 
companies in China, it is subject to the Insurance Law  and other relevant laws  and regulations and is 
regulated by the CIRC. With rega rd to the specific questions rela ting to its business operations, please 
contact China Post Life Insurance Company directly for enquiry.  
IV. T
RADE POLICIES BY SECTOR  
(5) S ERVICES  
(iii) Telecommunications   
65. Paragraph 83 of Part IV of the Secretariat's report states that, with regard to 
competition in the telecommunications sector,  "new players and technology have been 
introduced."  Given that the main result of the 2008 restructuring of the basic telecommunications sector was the reduction in main operators from six to three, it would  WT/TPR/M/230/Add.1 
 Page 241 
 
 
  appear that concentration in the market overa ll has likely increased, even  taking into account 
any new value-added suppliers receiving licenses. 
 a. Please describe the purpose of the 2008 restructuring.  Could China also discuss 
further the results of the 2008 restructuring?  In addition, please indicate whether, since the 2008 restructuring and the reduction of capitalization 
requirements from RMB 2 billion to RMB 1 billion for foreign-invested 
enterprises engaging in basic telecommunications services, any additional suppliers of basic telecommunications servic es have entered the market.  If so, 
how many? 
Answer The purpose of market restructuring in 2008 is to  better allocate the existing network resources, 
realize full service operation, shape a moderate an d healthy competition market, promote the service 
capabilities of the telecom industry, strengthen the regulatory system, and better protect the interest of investors and consumers.  
After market restructuring in 2008, China Telecom, as a new mobile market competitor, brought more 
competitions in the basic telecom services ma rket, resulting in the drops of the average 
comprehensive charges by 11.5% and 9% respect ively year on year in 2008 and 2009. Chinese 
consumers benefit from the restructuring.   
Up to now, China has not received application from fo reign or joint venture companies for the license 
of basic telecommunication services. 
 b. If, as it appears, few if any new su ppliers of basic telecommunications services 
have entered China's market, is China ta king any measures to facilitate market 
entry and additional competition?  Or, as a policy matter, has China decided not to issue any new basic licenses, and if so, what is the policy rationale for such an 
approach?   
Answer China has been implementing its obligations of market liberalization in accordance with its WTO 
commitments. As far as the new market access and competition are concerned, the pace of reform for 
the telecom sector has never been halted. China has been making best efforts to promote the stable 
and healthy development of the telecom sector accord ing to its market conditions. The restructuring in 
2008 is a good example for promoting the compe tition and development of the telecom sector. 
The telecom sector in China is still at the stage of digesting its WTO accession commitments.  China 
does not have a plan to further liberalize the telecom sector in the very near future.   
 c. What rules govern the ability of cable TV operators to enter into the basic or 
value-added telecommunications sectors? Can China please explain how recent State Council pronouncements on the importance of telecom and cable convergence will affect prospect s for cable providers to provide 
telecommunications services, and vice versa?  Has MIIT approved any licenses 
for such services, and if not, why not?  What will the role of the State Administration of Radio, Film and Television be in approving licenses for such services? WT/TPR/M/230/Add.1 
Page 242  
 
  Answer 
According to the current regulations, the Radio and TV services suppliers and telecom services 
providers carry out their business separately. On  13 January 2010 the State Council announced the 
decision for network convergence (convergence of th e telecom networks, com puter networks and the 
networks of TV and Ra dio) and approved a  general program for promoting the network convergence. 
In terms of the market access between the telecom services and the Radio and TV services, qualified 
Radio and TV services suppliers will be allowed to  provide value-added telecom services, the basic 
telecom services regulated as value-added services, th e internet access services based on the cable TV 
network, internet data transmission services and domestic IP phone services. Qualified state-owned 
telecom operators are allowed to provide televisi on programs production except for news and current 
event programs, data transmission for the internet audio-visual programs, rebroadcast of the audio-
visual programs of news and current event, pubic online audio-visual programs except for television and broadcast-type programs, IPTV transmission and mobile TV services. In the future when the telecom networks and the Radio and TV networks  realize free inter-access, the relevant operation 
licenses still have to be reviewed and approve d by the relevant authorities separately.  
Currently, the Chinese government is in the proc ess of promoting pilot scheme for the network 
convergence. Relevant rules a nd policies for the licensing are still under discussion, and no such 
license has been granted to the operators. 
66. Paragraph 84 of Part IV of the Secretar iat's report notes that, in September 2008, the 
minimum registered capital requirement was lo wered from RMB 2 billion to RMB 1 billion for 
foreign-invested telecommunications enterprises en gaging in basic telecommunications services.  
This reduction is significantly less than U.S. and other trading partners had requested.  In fact, 
the United States suggested a capitalization requirem ent of no more than $5 million, in line with 
global norms.   
 a. Because it appears that few if any ad ditional basic telecommunications operators 
entered the market subsequent to the September 2008 reduction, has China 
considered further reduction to the registered capital requirement, more in line 
with global norms?   
 b. Because many new services such as VOIP  require minimal capital investment on 
a market-by-market basis (investment be ing in the software, independent of 
specific markets), how will China attrac t such innovative offerings, if it 
maintains such high capital requirements? 
Answer (a-b) 
In September 2008, the State Council promulgated the Decision on Amending Regulation on the 
Administration of Foreign-Invested  Telecommunications Enterprises  (State Council Decree No. 534), 
which halves the minimum capital requirement on the basic telecom operation of the foreign-invested 
telecommunication enterprises. Currently, China has no other plan to revise the relevant requirements. 
The minimum registered capital requirement for the fo reign-invested telecom enterprises stipulated by 
the Regulation on the Administration of Foreign -Invested Telecommunications Enterprises  is at the 
same level for domestic services suppliers, which complies with the WTO national treatment principle . The telecom sector is a capital-intensive industry featuring economy of scale. An 
inadequately low level of registered capital would not  be able to effectively safeguard the interests of 
investors and consumers. As a matter of fact, the WTO members all have their own minimum 
registered capital requirements based on their own national conditions.  WT/TPR/M/230/Add.1 
 Page 243 
 
 
  67. Paragraph 85 of Part IV of the Secret ariat's report discusses the three basic services 
providers in China.  Do all three of the basic se rvices providers provide satellite services?  Based 
on the 2008 restructuring plan, it appears that on ly China Telecom will supply satellite services, 
at least on a facilities-basis.  What is China's policy regarding foreign services suppliers seeking to provide satellites services into China? 
Answer 
In the area of satellite-related services, at the en d of 2008, 5 companies including China Telecom 
were granted the licenses, and 43 companies were providing VSAT services. China will decide on the 
future market liberalization for satellite se rvices according to its market situation. 
68. Paragraph 87 of Part IV of the Secretari at's report states that, "as of 2008, China had 
granted 3 licenses for local-distance service, loca l service, international service, mobile service, 
and leased-line service, respectiv ely, 5 for satellite service, 1,257 for internet service providers, 
253 for data communications, 43 for VSAT (Very  Small Aperture Terminal) service, 13,894 for 
content providers, and 1,090 for call centers."   
 a. For each of these categories, please  indicate how many joint-ventures with 
foreign suppliers received licenses. 
Answer 
So far 22 joint venture companies have obtained the licenses to provide valu e-added telecom services 
in China.  
 b. Please identify which of the licenses in these categories were for basic services 
versus value-added services. 
Answer 
Please refer to the List of Telecommunication Services promulgated on 1 April 2003.  
 c. Has China given thought to the impo rtance that international corporate data 
services (IP-VPN) play in allowing its ow n multinationals to communicate with 
their global affiliates and how to allo w for more competitio n in the Chinese 
market, including allowing foreign value-added telecommunications joint-
ventures to obtain international IP-VPN licenses? 
Answer 
China opened its telecom services sector in line with  the WTO commitments. In terms of the IP-VPN 
services, International Closed User Group Voice and Date Services have been  opened up to foreign 
investors and qualified foreign companies may apply for this service. 
69. Paragraph 88 of Part IV of the Secretariat' s report references China's policy of allowing 
private participation and foreign investment in basic telecom on a "gradual" basis.  Under the 
terms of China's GATS Schedule, China's phase-in  for foreign participation should have been 
completed in 2006, after which foreign participants  should have been able to freely participate 
up to the prescribed foreign equity limits.  Nonetheless, as paragraph 88 indicates, market entry 
remains constrained by a policy of gradualism that has resulted in negligible foreign 
participation.  Please explain this policy of grad ualism in light of China's GATS commitments. WT/TPR/M/230/Add.1 
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  Answer 
China has made quite high level of commitments  in the telecom services during its accession to the 
WTO. As far as the government is concerned, the commitments made in the Services Schedule are for 
the purpose of promoting free trade. Whether a foreign investor decides to invest in the market or not 
will depend on various factors such as the market potential of the country, competition situations in 
the market and the company's strength, etc. In a word, it shall be a commercial decision made by the 
company itself.  
70. Paragraph 89 of Part IV of the Secretariat's report states:  "Internet activities and 
services are regulated, supervised, and administered by several departments, inter alia , the 
ministries and agencies dealing with the pre ss, publications, education, health, drug 
administration, and industry and commerce."   
 a. Is market entry constrained by any of these overlapping regulatory authorities 
through licensing action, e.g., conflicti ng capitalization or foreign equity 
requirements?  
Answer China is of the view that the current regulat ory measures for the activities of online services are 
necessary and pose no restrictions on market access. Governments have the right to regulate online 
services according to the stipulation of the GATS preamble. Regulations for the online services issued 
by the Chinese government are equally applied to  domestic and foreign companies, which is 
consistent with the principle of national treatme nt. These regulations clearly identify the relevant 
rights and obligations of the services suppliers accordin g to the actual circumstances of the market in 
China and are conducive to the protection of the interest of consumers.    
 b. Does MIIT have a role in this regulation? 
Answer 
According to the Regulations on Telecommunications  and the Measures on  Administration of Internet 
Information Services , MIIT is one of the main regulators of the telecommunication and online 
services. 
c. Is any effort being made to streamline what appears to be a very bureaucratic 
approach to Internet-based  information services?   
Answer 
The administrative measures for the online services are transparent, and are in conformity with the 
national situation in China. The government has ri ght to regulate the online services according to the 
stipulation of the GATS preamble. Regulations for the online services is sued by the Chinese 
government are equally applied to domestic and fore ign companies, which is consistent with the 
principle of national treatment. 
 d. How does China's regulatory approach affect Mode 1 services? 
Answer China's regulatory measures regarding online services are consistent with the WTO rules and China's 
commitments.   WT/TPR/M/230/Add.1 
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  71. Paragraphs 89 and 90 of Part IV of the S ecretariat's report discuss MIIT's role as a 
regulator of the telecommunications sector. 
 a. What role does MIIT play in the personnel decisions of telecommunications 
operators?  
Answer MIIT does not intervene in the personnel administ ration and decision-making of telecommunications 
operators. All the three telecom operators are listed co mpanies after the restructuring in 2008. They all 
have their own organizational structures. The personne l decisions are internal affairs which are made 
by the companies themselves acco rding to the company charters. 
b. What role does MIIT play in telecommunications operators' choice of 
technology, e.g., TD-SCDMA versus W-CDMA, WAPI versus Wi-Fi, etc.?  
Answer 
MIIT is responsible for approving and issuing the telecom service licenses. In January 2009, 
according to the applications from China Telecom,  China Mobile and China Unicom, MIIT issued 
three 3G licenses which are based on the tec hnology models of CDMA2000, TD-SCDMA and 
WCDMA to the aforesaid companies respectively. As  far as the 3G standards are concerned, the 
telecom services suppliers make their choices accor ding to the companies' existing 2G network 
models, customer and market orientation, i nvestment scale and technology accumulation, etc. 
 c. How does MIIT reconcile its claim of being an independent regulator with its 
  industrial promotion role? 
Answer As early as in 1998 when it was established, the former MII separated itself structurally and 
financially from all the telecommunications operato rs and services suppliers in the Chinese market. 
The newly established MIIT, which is the successor of  the MII, resumes the role of an independent 
regulator. MIIT complies with the requirements of  "independent regulator" as provided for in the 
Reference Paper.   
72. Paragraph 91 of Part IV of the Secretariat's report states:  "Telecommunications 
services are subject to the Anti-Monopoly Law." 
 a. Was the 2008 restructuring of the basic telecommunications sector, which 
significantly reduced the number of co mpetitors, subject to review under the 
Anti-Monopoly Law?     
 b. If it was subject to review under the Anti-Monopoly Law, what agency or 
agencies were responsible for conducting it?  Are the conclusions public?  If it 
was not subject to review, why not? 
Answer (a-b) 
The restructuring of telecommunication service s uppliers in 2008 has effectively promoted the 
development of basic telecommunication market. After the restructuring, although the number of 
service suppliers was reduced, the degree of market competition has not been decreased since all three 
operators can now provide both fixed and mobile  telecommunication services. As a result, the WT/TPR/M/230/Add.1 
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  competition in the market is further enhanced and consumers have benefited from the gradual drop of 
fees and charges.  
73. Paragraph 92 of Part IV of the Secretariat's report indicates that a draft 
Telecommunications Law is currently being examined by the State Council.   
 a. When will a draft of the Telecommunications Law be circulated for public 
comment? 
Answer 
The draft of the Telecommunications Law  has been submitted to the State Council for review. 
Currently, the relevant legislative work is progr essing according to the procedures and requirements 
set by the Law on Legislation . Public comment solicitation on the draft will be carried out in 
accordance with the requirement of the Law on Legislation .   
 b. Does the current draft of the Teleco mmunications Law either make the Ministry 
of Industry and Information Technology (MIIT) structurally and financially separate from all the telecommunications operators and providers or move the regulation of this sector outside of MIIT? 
 c. Does the current draft of the Telecommunications Law provide that foreign 
service suppliers required to form joint ve ntures 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 Tel ecommunications Law lower the capital 
requirements for telecomm unications foreign-invested  enterprises engaged in 
national or cross-provincial basic teleco mmunications services?  Please explain. 
Answer (b-d) 
China opened up its telecom services market in accordance with its WTO commitments. The 
Telecommunications Law  is still in the process of formulation. Like other laws and regulations, it will 
be consistent with China's WTO Commitments.  
74. Paragraph 92 of Part IV of the Secretaria t's report states:  "The authorities maintain 
that China does not have a specific license for resale of telecommunication service . . . ."  In fact, 
China used to have such a license category, but, in 2001, China eliminated it from its "catalogue" of services.   
 a. Please explain why China eliminated its license for resale of telecommunications 
services. 
 b. Although many countries do not make  the resale/facilities-based distinction in 
their licensing regime, China's mainte nance of significant capitalization 
requirements appears to foreclose resale opportunities.  Are there any resellers 
of basic telecommunications services curren tly operating in China?  If so, how 
many, and in which sectors?  WT/TPR/M/230/Add.1 
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  Answer (a-b) 
The List of Telecommunications Services  revised in 2003 deleted "resale of basic telecommunications 
services". Since then, resale is no longer considered as a telecom service. This practice is in line with 
WTO rules and China's commi tments to WTO. China's Schedule of Specific Commitments on Trade 
Services  does not include any commitment regarding "resale" service. WTO Basic 
Telecommunications Group's Notes for Scheduling Basic Telecom Services Commitments  
(S/GBT/W/2/Rev.1) explains that "unless otherwi se noted in the sector co lumn, any basic telecom 
service listed in the sector column may be provided through facilities or by resale". Therefore, resale is a way of service delivery rather than a speci fic telecom service. Upon obtaining the license for 
providing basic telecom service, the enterprise coul d select the way of provision of services by itself. 
It can provide service through "resale" by building its own infrastructure or renting the infrastructure 
of other telecom companies. 
75. Paragraph 93 of Part IV of the Secretari at's report states that the Chinese authorities 
maintain "technology neutrality" in gr anting 3G telecommunications licenses. 
 a. The United States understands that each of the three licensed providers of 3G 
telecommunications services was assigned a technology rather than allowed to 
select one on its own.  Please explain how this approach can be considered technologically neutral. 
Answer 
In January 2009, according to the applications  from China Telecom, China Mobile and China 
Unicom, MIIT issued three 3G licenses which are based on the technology models of CDMA2000, 
TD-SCDMA and WCDMA to the aforesaid companies respectively. As far as the 3G standards are 
concerned, the telecom services suppliers make thei r choices according to the companies' existing 2G 
network models, customer and market orientation,  investment scale and technology accumulation, etc. 
 b. The United States understands that all mobile handsets in China must be TD-
SCDMA enabled, even if the provider do es not use that technology.  Please 
explain how this requirement can be considered technologically neutral. 
Answer 
There is no such requirement in China on the compatibility between mobile handsets and TD-
SCDMA. The cell-phone manufacturers make decisi ons on their own product compatibility. In fact, 
most of the CDMA mobile handsets in the mark et are not compatible with TD-SCDMA system. 
IV. T
RADE POLICIES BY SECTOR  
(5) S ERVICES  
(v) Postal and courier services 
76. Paragraphs 128 through 130 of Part IV of the Secretariat's report discuss China's new 
Postal Law.  The United States welcomes some of  the positive changes in the new Postal Law, 
such as the establishment of an independent regulator.  However, other aspects of the law raise 
concerns. 
 a. The United States is troubled by th e exclusion of foreign express delivery service 
companies from the large Chinese dom estic express document market.  The 
Secretariat's report indicates that forei gn and Chinese express delivery service 
companies have been providing domestic  express document services for years, WT/TPR/M/230/Add.1 
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  but the new Postal Law expressly proh ibits foreign express delivery service 
companies from continuing operations in this segment of the market.  Why has 
the Chinese government taken this protectionist step, especially given that the domestic express document market is op en to competition for Chinese express 
delivery service companies? 
Answer 
When acceding to the WTO, China committed itsel f to open courier service but expressly excluded 
"service specifically reserved to Chinese postal au thorities by law". In accordance with the then 
Postal Law , China did not commit itself to open the courier service for letters. The amended Postal 
Law is consistent with China's commitments, and the relevant provisions will not affect foreign-
invested courier enterprises engaging in internationa l courier service for any letters other than private 
letters and international and domestic express ser vices for packages or other articles in China. 
Therefore, no new investment and trade barriers ha ve been erected. Lawful courier services provided 
by foreign-invested enterprises will continue to be protected. The postal authority is accepting 
applications and granting approvals for courie r services including those from foreign investors. 
Licensing procedures for courier services are the sa me for both foreign and domestic enterprises. 
 b. Paragraph 129 mentions that the new Postal Law provides scope for compulsory 
payments to subsidize universal postal services.  Concerns have been expressed 
by both Chinese and foreign express comp anies that the express sector should 
not be subject to any such levies relating to the delivery of regular, first class mail.   What are China's plans in this regard? 
Answer 
Chinese authorities related have difficulty understa nding the question. Please explain in more detail 
the specific concerns of the United States. 
 c. Paragraph 129 notes that the State Po stal Bureau has issued administrative 
measures on express delivery licensing based  on the provisions of the new Postal 
Law.  The United States also understands that China continues to develop a 
number of subsidiary regulations and st andards for the express sector.  What 
notice and comment procedures is China fo llowing in regard to those regulations 
and standards? 
Answer 
China attaches great important to the transparency of legislation. In the process of rules-making and 
standards-setting, China follows procedures stipulated  by laws and regulations to solicit in advance 
opinions from various stakeholders including foreig n companies. China will continue to improve the 
ways and channels of opinions solicitation a nd enhance communications with companies. 
IV. T
RADE POLICIES BY SECTOR  
(5) S ERVICES  
(vi) Tourism 
77. Paragraphs 132 and 133 of  Part IV of the Secretariat's report refer to China's 
"liberalized" tourism sector.  The United States notes that China still requires all travel agents and airlines to connect into China's nation ally owned and operated computer reservation 
system when booking airline tickets for domestic flights and outbound international flights.  Are  WT/TPR/M/230/Add.1 
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  there plans to extend the market-opening step s discussed in these paragraphs to computer 
reservations services?  Please explain. 
Answer 
China has implemented its WTO obligations in the CRS services sector. Currently, Chinese airlines 
are allowed to use foreign CRS without any licensi ng requirement. The sales agents of foreign airlines 
which directly use and connect with foreign CRS system should apply for approval from CAAC 
according to the Provisional Administrative Measures on the Usage of Computer (Passenger) 
Reservation System by Foreign Air Transport Ent erprises and their Sales Agents within China. The 
further liberalization of CRS depends on the market  development situation, and is subject to the 
discussion under the framework of DDA.  
78. Paragraph 133 of Part IV of the Secretar iat's report notes that currently the Chinese 
authorities are accelerating a pilot program to allow foreign companies to provide outbound 
travel businesses.  Please describe the pilot progr am.  Can China take steps to make the pilot 
program more transparent? 
Answer Relevant measures on pilot program allowing foreign travel agencies to engage in outbound services 
are under discussion. The measures will be released wh en ready and further liberalization in this area 
will be progressed in line with the development of the market. 
IV. T
RADE POLICIES BY SECTOR  
(5) S ERVICES  
(vii)  Legal services 
79. Paragraph 135 of Part IV of the Secretaria t's report notes that amendments to laws 
after 2008 did not affect China's regulatory en vironment for foreign law firms and foreign 
lawyers, and refers the reader back to the details  on legal services described in the 2008 Trade 
Policy Review report prepared by the Secretariat.  With respect to the restrictions described in 
the 2008 report, the United States notes that all of these restrictions are still in place.  The 
United States further notes that the prohibitio n on foreign law firms employing licensed Chinese 
lawyers is a major impediment to businesses seek ing comprehensive and efficient legal services 
in China.  Is China considering allowing Ch inese lawyers employed by foreign law firms to 
maintain their professional practice license a nd to practice Chinese law? Please explain. 
Answer 
Like in many other WTO Members, foreign law firms are not permitted to practice domestic law in 
China. Therefore, the representative offices of fore ign law firms shall not employ Chinese registered 
lawyers for such practices related to Chinese law.  China has liberalized the legal service sector 
according to its accession commitments and has no plan  for further liberalization at current stage. 
II. G ENERAL ECONOMIC ENVIRONMENT AND POLICY DIRECTION  
(2) S TIMULUS PACKAGE IN RESPONSE TO THE GLOBAL FINANCIAL CRISIS  
(iv) Increasing consumer demand 
1. In paragraphs 24 and 41, the Chinese Gov ernment's report stresses the need to increase 
consumer income and spending in order to ex pand domestic demand and stimulate economic 
growth.  What efforts will China make to enco urage and promote collective bargaining between WT/TPR/M/230/Add.1 
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  employers and trade unions as a means of in creasing consumer income and, therefore, 
consumer demand? 
Answer 
First, Chinese workers and trade unions have been participating in formulation and adjustment of 
minimum wage standards. The labor and social sec urity authorities of the provincial governments 
should discuss with local trade unions when formulating and adjusting local minimum wage standard. 
They should also solicit comments of the National Federation of Trade Union after submitting their 
proposal to the Ministry of Human Resources and So cial Security. Second, Chinese workers and trade 
unions have the right to supervise the implementati on of minimum wage standards. In case where any 
employer violates the minimum wage standards, they  have the right to request the local labor and 
social security authorities to handle the violation case. 
II. G
ENERAL ECONOMIC ENVIRONMENT AND POLICY DIRECTION  
(3) P ROMOTING THE TRANSFORMATION OF THE PATTERN OF ECONOMIC DEVELOPMENT  
(v) Improving the well-being of the people 
2. In paragraph 41, the Chinese Government's  report comments on the need to enhance 
the development levels of social security and so cial programs.  To what extent will workers and 
workers' organizations be asked to participate in  the development and implementation of these 
programs?  
Answer 
Firstly, on the role of trade unions in the implementation of the minimum wage system, trade unions 
will promote further improvement of laws and regulati ons in this regard, in particular the finalization 
of the regulation on wages which is now under form ulation. The regulation will provide details for 
development and implementation of the minimum wage system and w ill include workers with special 
labor relations into the scope of labor security. At  present, minimum monthly wage is roughly 40% to 
60% of average monthly wage in most countries.  Trade unions will promote the increase in the 
minimum wages to more than 40% of average m onthly wage as soon as possible through tripartite 
consultations. Trade unions also will strengthen the supervision over the implementation of the 
minimum wage system to ensure its effective impl ementation, to further enhance the publicity of the 
system as well as the awareness of workers, espec ially low-income workers of safeguarding their 
lawful rights.  
Secondly, on the role of trade unions in the ex pansion of social security coverage and in the 
implementation of policies to improve the welfare of workers, trade unions will participate in the 
formulation of laws and regulations, strengthe n communication and coordination with relevant 
government departments, speak out the aspirations of workers through various channels such as 
tripartite consultation mechanism, the joint comm ittee on migrant workers under the State Council, 
State and local leadership teams for reform of me dical and health system, supervisory commission on 
social security and so on to promote the expansion of  coverage of the social security system and to 
raise the level of social security benefits. M eanwhile, trade unions will make use of tripartite 
consultation mechanism, collective contract syst em, conferences of (representatives of) workers, 
factory affairs disclosure system and so on to urge enterprises to pay social security premiums in full 
and on time for workers and to make every effort to ensure that all workers are granted social security 
benefits. 
3. Paragraph 42 of the Chinese Government's report mentions that China has continued 
its efforts to improve the well-being of its peop le in response to the global financial crisis, 
including by enforcing the minimum wage system .  Please expand on China's efforts to improve  WT/TPR/M/230/Add.1 
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  enforcement of the minimum wage system an d enforcement of labor laws more broadly, 
including laws governing internationally recognized  core labor standards, such as child labor 
and forced labor, as well as laws governing a cceptable conditions of work, such as laws 
governing hours of work and occupational safe ty and health.  What role have workers and 
workers' organizations been asked to play, or will th ey be asked to play, in developing strategies 
to improve enforcement of labor la ws in each of those areas? 
Answer 
In view of the impact of the international fina ncial crises on the rights and interests of Chinese 
workers, Chinese government takes the implementati on of minimum wage system and the elimination 
of wage arrears as the most important tasks. A ne w round of adjustment of minimum wage level has 
already begun, with 15 provinces,  autonomous regions and municipa lities directly under the Central 
Government raising the minimum wage level.  
In recent years, Chinese government gradually impr oved the system of standards for such working 
conditions as working hours, vacation, and special protection for women and minors workers so as to 
better safeguard the rights and interests of workers. The Regulations on Paid Annual Leave for 
Employees  entered into force on 1 January 2008. The Law on Labor Dispute Mediation and 
Arbitration  entered into force on 1 May 2008, the prom ulgation of which contributed a lot to the 
improvement of labor dispute media tion and arbitration mechanism.  
Chinese trade unions have played important role in the formulation of Labor Contract Law , Law on 
Promotion of Employment , Law on Labor Dispute Mediation and Arbitration , Enterprise Bankruptcy 
Law, Regulations for the Implementation of the Labor Contract Law , Regulations on Paid Annual 
Leave for Employees and other laws and regulations which are closely related to the immediate 
interests of workers. Take Labor Contract Law  as an example, at the stage of public opinion 
solicitation, nearly 70% of the total 200,000 opin ions submitted to the Standing Committee of the 
National People's Congress were from workers and tr ade unions at all levels. In the formulation 
process of the Social Security Law , trade unions participated in discussion meetings, seminars, 
coordination meetings held by the legislature, t ook part in the investigations on major legislative 
issues related to social security led by Nationa l People's Congress, organized workers to submit 
opinions on the second draft of the Social Security Law , put forward numerous proposals concerning 
the pooling level of the social security system, so cial security premium collection system, social 
security fund supervision and mana gement and etc. Many proposals have been adopted and included 
in the current draft.  
As for the minimum wage system, the regulati on on enterprise wages has been listed in the 2010 
legislation plan. Trade unions will pay close attenti on to and actively participate in the legislation 
process of the regulation, putting forward proposals on the clarification of wage structure and the 
establishment of minimum wage adjustment mechan ism, promoting minimum wage system to play 
the role of safeguarding the basic livelihood of workers and their supported population. 
II. G ENERAL ECONOMIC ENVIRONMENT AND POLICY DIRECTION  
(4) C ONTINUE TO DEEPEN THE REFORM  
(iv) Reform of state-owned enterprises and development of the non-public sector 
4. Paragraph 48 of the Chinese Government's re port explains that state-owned enterprises 
are undergoing reform and that China is instituting policies to promote the growth of the non-public sector.   WT/TPR/M/230/Add.1 
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   a. Does China plan to decrease the formal  and informal advantages that SOEs in 
China have over non-public companies, including foreign investors, as well as potential entrants?   
Answer 
The Chinese government has never proposed a plan to specifically reduce the weight of SOEs in the 
national economy. 
China adopts the socialist market economy system, in which SOEs and other enterprises are equal 
competitors in the market. China would unwaveringl y consolidate and develop the public sector of the 
economy and at the mean time unswervingly encourage and support the development of the non-public sector, so as to form a new pattern of fair competition and mutual promotion of various types 
of enterprises. 
 b. What additional reforms of SOEs are planned for the next two years? 
Answer 
The focus of reform of state-owned enterprises in the next stage is to continue  promoting the strategic 
restructuring of state-owned economy. Corporate reform of large state-owned enterprises will be 
speeded up. More social capital will be introduced to  achieve diversification of property rights. Legal 
person governance structure and senior management compensation system will be further enhanced. 
The budget system for managing State capital will be further improved. Reform of state-owned 
monopoly sectors will be accelerated to relax market access and introduce competition. 
 c. What additional measures promoting development of the non-public sector are 
planned for the next two years? 
Answer 
Additional measures promoting development of the non-public sector are designed primarily to create 
a market environment for fair competition of economic  sectors of various ownerships. Such measures 
will focus on offering equal policy treatment in bidd ings and government procurement, safeguarding 
the fair participation of non-public enterprises in the market. Regulations and rules concerning 
financing, foreign exchange administration, land use, public services and etc will be reviewed and 
updated to enable non-public enterprises to have  access to various resources necessary for their 
development on an equal footing. 
III. T
RADE DEVELOPMENT AND TRADE POLICIES   
(2) P ROMOTING TRADE AND INVESTMENT  
(iii) Streamlining procedures to facilitate trade and investment 
5. Paragraph 69 of the Chinese Government's  report notes that China has streamlined 
procedures to facilitate trade and investme nt, including delegating more authority for 
examination and approval of foreign investment projects to local administrations, simplification of relevant procedures, a reduction in the numb er of items subject to examination and approval, 
and the availability of online application and administrative licensing concerning foreign 
investment.  However, China still maintains se veral review processes that apply to foreign 
investment, involving several levels of govern ment, based in multiple government agencies, 
appearing to apply several different scopes of rev iew, often making it difficult for foreign 
investors to understand what procedures apply and where in the process they are at any given  WT/TPR/M/230/Add.1 
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  moment.  Does China have plans to simplify and standardize its system of overlapping 
investment review processes?  Please explain. 
Answer 
Chinese central government has delegated more aut hority for examination and approval of foreign 
investment projects to local administrations in order to streamline administrative procedures and 
improve efficiency of examina tion and approval, thereby speedi ng up the examination and approval 
of foreign investment projects and facilitating forei gn investors to invest in China. However, the 
criteria for examination and approval have not ch anged. Local competent authorities must examine 
and approve foreign investment projects accordi ng to the uniform criteria and guidelines as provided 
for in the Law on Chinese-Foreign Equity Joint Ventures , the Law on Chinese-Foreign Contractual 
Joint Ventures , the Law on Foreign-Capital Enterprise , their respective implementing regulations and 
rules, as well as other rules formul ated in accordance with the above- mentioned laws and regulations. 
Local governments are gradually promoting one-stop services depending on their actual situation to 
increase administrative efficiency and facilitate business investment. At present, one-stop service 
centers have been set up in many places, such as Tianjin, Shenzhen and the Suzhou Industrial Park. 
They are responsible for accepting and handling in a unified way the registration-related affairs of 
domestic and foreign enterprises, fulfilling such func tions as coordinating, administering, guiding and 
monitoring examination and approval in a consolidat ed manner. Investors can complete all application 
procedures at one window. Chinese government will further streamline the administrative examination and approval procedures based on such  practical experience of local governments to 
create a good investment environment for investors. 
III. T
RADE DEVELOPMENT AND TRADE POLICIES  
(2) P ROMOTING TRADE AND INVESTMENT  
(v) Continuing to implement the going global strategy 
6. China notes in Paragraph 75 of its report that the Rules on Administration of Overseas 
Investment came into force on 1 May 2009.  
 a. Please explain the Chinese government's  role in regulating foreign investments 
by the private sector proposing to in vest solely private capital?   
 b. Does this policy suggest that privat e Chinese investors are expected to conduct 
their investment activities abroad in a manner that advances the broader policy goals of China, rather than focusing si mply on maximizing their investment 
return? 
Answer 
The Rules on Administration of Overseas Investment  is promulgated for the purpose of promoting 
investment facilitation and safeguarding the decision- making power of enterprises in their investment. 
In accordance with the Rules , in addition to examination and approval of the overseas investment 
projects of enterprises, Ministry of Commerce a nd provincial-level competent commercial authorities 
should focus more on providing guidance and services for enterprises of different ownership, and 
creating external environment favorable for enterp rises to make overseas investment. For example, 
they should help enterprises understand the investme nt environment of host countries, and provide 
enterprises with such information as investme nt opportunities and investment barriers.  
For an enterprise, the essential goal is to maxi mize the investment return. However, the Chinese 
government also requests that an enterprise, when  making overseas investment, should observe laws, WT/TPR/M/230/Add.1 
Page 254  
 
  regulations, customs and habits of the host country , stay in harmony with local people and perform 
necessary social responsibilities. 
III. T
RADE DEVELOPMENT AND TRADE POLICIES  
(3) A DHERING TO FURTHER OPENING UP TO THE OUTSIDE WORLD  
(i) New vehicle and new fields for foreign investment 
7. Paragraph 81 the Chinese Government's report states that the Measures for 
Administration of Establishment of Partnership  Business in China by Foreign Enterprises or 
Individuals came into effect on 1 March 2010 and "provides foreign investors with a new form of business set-up in addition to wholly foreign -owned enterprise, equity joint venture and 
contractual joint venture."  
 a. Please explain the details of this new form of business set up and how it will open 
up the market to foreign investors. 
Answer 
At present, equity joint venture, contractual joint venture and wholly foreign owned enterprise are still 
three major enterprise operation modes fo r foreign investors in China. The Measures for 
Administration of Establishment of Partnership  Business in China by Foreign Enterprises or 
Individuals  which came into effect on 1 March 2010 is a supplementary regulation to the Law on 
Partnership Enterprise . It confirms the legitimacy of pa rtnership business established by foreign 
enterprises or individuals in China. 
Foreign enterprises or individuals may set up partne rship business in China in one of the following 
two modes: first, more than two foreign compan ies or individuals set up a partnership business in 
China, with all partners being foreign companie s or individuals; second, foreign companies or 
individuals set up a partnership business in China join tly with Chinese individuals, companies or other 
organizations. In addition, the following situation ma y also occur in practice: foreign companies or 
individuals become partners in a partnership en terprise by occupation of property shares of the 
partnership business which is set up by Chinese i ndividuals, companies or other organizations in 
China. In this case, foreign companies or individua ls should follow the requirements as stipulated in 
the regulation and go through procedures for change of registration at the enterprise registration 
office. 
 b. In March 2010, China also announced it will establish a national security review 
mechanism that will examine foreign M& A transactions for their impact on 
China's national security.   Is the "new form of business set up" exempt from the 
new form of additional review that is being instituted? 
Answer 
It is an international practice to examine foreign M&A transactions from national security 
perspective. The relevant authorities in China ar e currently studying and discussing on the coverage, 
criteria and procedures of the national security review.  
8. Paragraph 82 the Chinese Government's repor t notes that "[t]he amended Catalogue of 
Advantaged Industries for Foreign Investment in Mid-West China (2008) came into force in 2009."    WT/TPR/M/230/Add.1 
 Page 255 
 
 
   a. Did China provide a formal opportunity for public comment on the proposed 
revisions to this or other foreign inv estment catalogues?  If not, will China 
provide this opportunity for future versions? 
Answer 
The Catalogue for the Guidance of Industries for Foreign Investment  and the Catalogue of 
Advantaged Industries for Foreign Investment in Mid-West China  are formulated according to the  
Provisions on Guiding Direction of Foreign Investment  (State Council Decree No.346), in order to 
ensure that foreign investment is in line with  China's national economic and social development 
needs, to achieve regional balan ce in economic development, and to protect the legitimate rights and 
interests of investors. In the previous revisions  of the two catalogues, Chinese government collected 
opinions from a wide range of stakeholders. In fu ture revision, Chinese government will continue the 
practice of opinion solicitation as required by laws and regulations such as the Law on Legislation . 
 b. What are the criteria that China uses in determining what types of foreign 
investment projects will be restricted or prohibited?  How is this treatment consistent with China's statement in paragraph 102 that "the Chinese 
Government opposes protectionism in any form"? 
Answer 
The Provisions on Guiding Direction of Foreign Investment  classifies foreign investment projects into 
4 categories (encouraged, permitted, restricted a nd prohibited projects) and provides standards for 
identification of the categories. Article VI provide s identification standards for restricted foreign 
investment projects; Article VII provides identifi cation standards for prohib ited foreign investment 
projects. In addition, the  Catalogue for the Guidance of  Industries for Foreign Investment  provides a 
list of specific restricted and prohibited industries.  These regulations and rules are all available on the 
Internet.  
Utilization of foreign investment is an important part of China's opening up policy. China opposes all 
forms of protectionism. The Catalogue for the Guidance of Industries for Foreign Investment and the  
Catalogue of Advantaged Industries for Foreign Investment in Mid-West China are designed to 
facilitate foreign investment, to ensure that Chin a's national economic and social development needs 
are reflected and respected, and to protect the le gitimate rights and interests of investors. The 
prohibition and restriction on foreign investment ar e based on the actual development level of specific 
sectors in China, aiming at achieving sustainable and healthy development. Such restrictions have been gradually relaxed in line with the contin uous development of the Chinese economy. China does 
not think that there is conflict between such polic ies of gradual liberaliza tion and opposition to the 
protectionism. 
III. T
RADE DEVELOPMENT AND TRADE POLICIES  
(5) D EVELOPING REGIONAL AND BILATERAL ECONOMIC AND TRADE RELATIONS  
(i) Free trade agreements  
9. In paragraph 108, the Chinese Government's  report refers to the Free Trade Agreement 
that it concluded with New Zealand in 2008.  Article 177 of that agreement requires the Parties 
to cooperate on labor matters through thei r Memorandum of Understanding on Labour 
Cooperation (MOU).  In the MOU, the parti es announce their intention to improve working 
conditions and living standards in their respective  countries and to protect, enhance and enforce 
basic workers' rights.  Specifically, the parti es reaffirm their obligations as ILO members, 
including their commitments under the ILO Declar ation on Fundamental Principles and Rights WT/TPR/M/230/Add.1 
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  at Work and Its Follow-up.  What steps is Chin a taking to comply with these commitments?  
Please explain. 
Answer 
The Declaration on Fundamental Principles and Rights at Work adopted in International Labor 
Conference in 1998 identified 4 core labor sta ndards and 8 fundamental Conventions. For the 8 
Conventions, China has ratified No. 100, No. 1 11, No. 138 and No. 182 Convention. China will 
proactively fulfill its commitments under the ILO Declaration on Fundamental Principles and Rights 
at Work  and the Conventions ratified, effectively impr ove the working conditions and living standards 
of workers, protect and enhance th e fundamental rights of workers. 
Annex 1
 
III. T RADE POLICIES AND PRACTICES BY MEASURES  
(3) M EASURES DIRECTLY AFFECTING EXPORTS  
(viii) Export Promotion and Marketing Assistance  
36. Paragraph 141 of Part III of the report expl ains that the functions of the Export-Import 
Bank of China (EXIM Bank) include financial su pport to promote exports of mechanical and 
electrical products and high and new technology products, including thro ugh 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 China's exports, and given the recent rapid 
growth in the export volume and value of these products, please explain why EXIM Bank financing is still necessary for these products.  
Answer 
The data in the Secretariat Report is incorrect. In 2006, the Export-Import Bank of China granted 
loans of RMB 131.5 billion instead of US$102.8 billion in export credits, registering an increase of 11% rather than 25% over the previous year. The of ficial export credit is a internationally prevailing 
practice. Like official export credits agencies in other countries, the Export-Import Bank of China is 
China's policy bank, which provides policy-oriented financial support for the development of China's 
open-oriented economy. 
37. Paragraph 141 of Part III of the report states 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 ex port credit insurance and providing credit 
insurance to exporters. Please id entify the criteria used for selecting "high value-added" and 
"high-tech" capital goods exports. Are the term s and conditions for the export credit insurance 
provided to exporters of "high value-added" a nd "high-tech" capital goods more favorable 
than those provided by SINOSURE to other exporters? Please explain.  
Answer 
"High value-added" products usually refer to non-primary products, name ly manufactured goods, 
especially large electromechanical products and complete sets of equipment; "high-tech" products 
refer to those listed in the Catalogue for Reference of High-Tech Products  and Catalogue of 
Encouraged Hi-tech Products for Foreign Investment .  
Export credit insurance is an international comm on practice for governments to promote trade and 
prevent exchange earning risks. It is also a trade facilitation measure permitted by WTO. China  WT/TPR/M/230/Add.1 
 Page 257 
 
 
  Export & Credit Insurance Company is an entity pr oviding policy-based export credit insurance. It 
provides enterprises with export credit insurance ser vices with reference to the requirements of the 
Arrangement on Officially Supported Export Credits of the OECD. 
III. T RADE POLICIES AND PRACTICES BY MEASURES  
(4) M EASURES AFFECTING PRODUCTION AND TRADE 
(i) Taxation and Tax Incentives  
38. Paragraph 151 of Part III of the report st ates 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 co ncerned. 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 ci rcuits (or semiconductors) are authorized to 
import raw materials without having to pa y VAT on these imports. Please explain the 
administrative controls that are in place to ensure that exporters are not provided with VAT 
rebates for integrated circuits and products contai ning integrated circuits to the extent that 
those products incorporate raw materi als that were imported VAT-free.  
Answer 
According to China's current tax rebate practice, th e amount of tax rebate is calculated according to 
the following formula: tax rebate = FOB price of the exported goods × RMB exchange rate × tax 
rebate rate of the exported goods - the purchase pric e of duty-free imported raw materials × tax rebate 
rate of the exported goods. 
From the formula, it is seen that the duty-free imported raw materials are not included in the 
calculation of tax rebate. 
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.  Paragraph 156 states that incentives for investors in "less-developed regions" such as western China and activities the Government of China designates as "encouraged" remain in place. 
a. Are the above-referenced tax incentives th at remain in place only available to 
FIEs, or are they available to all enterprises in China? 
Answer 
Tax incentives in western regions apply to  both domestic and foreign enterprises. 
b. Is the northeastern region of China considered to be a "less-developed region" 
for purposes of the Enterprise Income T ax Law? Are enterprises located in this 
region eligible for the tax incentives?  
Answer 
"Less developed regions" where the tax incentives are applicable include Chongqing Municipality, 
Sichuan Province, Guizhou Province, Yunnan Pr ovince, Tibet Autonomous Region, Shaanxi 
Province, Gansu Province, Ningxia Hui Autonom ous Region, Qinghai Province, Xinjiang Uygur 
Autonomous Region, Inner Mongolia Autonomous Region and Guangxi Zhuang Autonomous Region 
(these regions are collectively called "western regions"). Three autonomous prefectures in provinces other than the above-mentioned, namely Xiangxi Tujia and Miao Autonomous Prefecture in Hunan 
Province, Enshi Tujia and Miao Autonomous Pr efecture in Hubei Province, Yanbian Korean WT/TPR/M/230/Add.1 
Page 258  
 
  Autonomous Prefecture in Jilin Province are also sp ecifically identified to be eligible for these tax 
incentives. 
c. Are the "encouraged" activities the ones set forth in catalogues such as the 
Catalogue for the Guidance of Foreign In vestment Industries, issued by the 
State Council on 7 November 2007? If so, please identify all of those catalogues. 
If not, please explain how China deci des which industries to designate as 
"encouraged" and how often it adds to or subtracts from this list.  
Answer 
Domestic enterprises in encourag ed industries refer to enterpri ses whose main businesses are those 
listed in the Catalogue for the Guidance of Industrial Restructuring . Foreign enterprises in 
encouraged industries refer to enterprises whose main businesses are those listed in the encouraged 
category of the Catalogue for the Guidance of Industries for Foreign Investment  or those in the 
Catalogue of Advantaged Industries for Foreign Investment in Mid-West China . 
40. Paragraph 160 of Part III of the report e xplains that the Enterprise Income Tax Law will 
gradually phase out tax incentives provided to FIEs over 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.  
Answer For foreign-invested enterprises, from 1 January 2008 on, those who used to enjoy low-tax rate 
incentives will be given a transitional period of 5 year s in which the statutory tax rate will be phased 
in step by step after the entry in to force of the new tax law. For details, please refer to the subsidy 
notification to be submitted by China in the near future. 
41. Paragraph 161 of Part III of the report ex plains that certain tax incentives provided to 
FIEs located in special economic zones are being "grandfathered" after the entry into force of the Enterprise Income Tax Law. 
a. Please describe the tax incentives that co ntinue to be provided to FIEs located in 
special economic zones. 
Answer 
High-tech enterprises completing registration procedures on or after 1 January 2008 in the Special 
Economic Zones or Shanghai Pudong Area are exempt  from enterprise income tax for their revenues 
obtained in the Special Economic Zones or Shangha i Pudong Area for the first two years starting from 
the year when such enterprises obtain their first bus iness revenue; from the third year to the fifth year 
their enterprise income tax will be levied at the rate  of half of the statutory rate of 25%. For details, 
please refer to the subsidy notification to be  submitted by China in the near future. 
b. Are these tax incentives available in oth er types of zones as well? If so, please 
explain. 
Answer The above mentioned preferential tax policies onl y apply to Special Economic Zones and Shanghai 
Pudong Area.  WT/TPR/M/230/Add.1 
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  c. What are the eligibility criteria for ent erprises to receive th ese tax incentives?  
Answer 
Enterprises enjoying these policies must satis fy the requirements in Article 93 of the Regulations for 
the Implementation of the Law on Enterprise Income Tax  and must be recognized as high-tech 
enterprises in accordance with the Administrative Measures on Recogn ition of High-tech Enterprises . 
d. Please describe the steps that the National 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 zo nes. Please also explain the criteria 
that a local government needs to satisf y in order to establish and maintain a 
development zone.  
Answer 
Please refer to the Circular of the General Office of the State Council on Regulating Various 
Development Zones and Strengthening the Administration of Construction Land (GuoBanFa [2003] 
No. 70), and the Circular on the Specific Standards and Poli cy Limits of Regulating the Existing 
Various Development Zones (FaGaiWaiZi [2003] No. 2343) issued jointly by National Development 
and Reform Commission, Ministry of Land and Re sources, Ministry of Housing and Urban-Rural 
Development and Ministry of Commerce. 
III. T RADE POLICIES AND PRACTICES BY MEASURES  
(4) M EASURES AFFECTING PRODUCTION AND TRADE 
(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  Bank "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 subsidized. 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.  
Answer 
Providing financial support does not necessarily mean  providing subsidized loans. Financial support 
provided by Export-Import Bank of China on the expo rt of electromechanical products and high-tech 
products is consistent with relevant provisions of the Arrangement on Offic ially Supported Export 
Credits of the OECD and does not constitute prohibited subsidies. 
43. Paragraph 165 of Part III of the report explains that the China Development Bank 
provides long-term financial support fo r industries of "key importance."  
 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 financ ial support provided to these industries. WT/TPR/M/230/Add.1 
Page 260  
 
  Answer (a-b) 
China Development Bank has been transformed to a commercial bank. The statement that "China 
Development Bank provides long-term financial s upport for industries of key importance" is not 
found in its articles of association or business sc ope. For details about the clients of China 
Development Bank, please refer to http:// www.cdb.com.cn/web/ Column.asp?ColumnId=12. 
 c. Please also explain the reasons for the planned injection of $20 billion into the 
China Development Bank, as noted in paragraph 159 of Part IV of the report.  
Answer 
The 20 billion US dollars investment by the Huijin  Company into China Development Bank is to 
promote the commercial transformation of China De velopment Bank and to raise the capital adequacy 
ratio required by the regulatory authorities. 
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 and the nature of any financial support 
provided pursuant to it.  
Answer The objective of China's "Rise of Central China" strategy is to accelerate the development of the 
central regions (the 6 provinces of Shanxi, Anhui, Jiangxi, Henan, Hubei, Hunan) into important 
regions with large population and major industries supporting the development of the whole country, 
where the local advantages are fully explored, urba n and rural areas are full of vitality, people live in 
harmony and society is stable, sound ecological envi ronment is established. For detailed information, 
please see Circular of the General Office of the State Council on the Implementation of the Certain 
Opinions of the CPC Central Committee and the St ate Council on Promoting the Rise of Central 
China , which is available at http://www.gov.cn/ gongbao/ content/2006/ content_327809.htm. 
UNITED STATES – Part 2
 
The United States submits the following additiona l questions, which follow up on various responses 
that China provided in writing on the first day of its Trade Policy Review: 
Secretariat's Report 
II. T RADE POLICY REGIME :  FRAMEWORK AND OBJECTIVES  
(7) F OREIGN ASSISTANCE  
(ii) China's Assistance to Foreign Countries 
1. The United States seeks further informat ion from China in follow-up to China's 
responses to questions 29 to 39 from the European  Union, which deal with paragraphs 54-56 of 
Part II of the Secretariat's Report on China's di sbursement of financing for projects in foreign 
countries.  According to publicly available in formation, the Export-Import Bank of China 
(China Exim Bank) offers loans at low interest rates to foreign companies for the financing of 
manufacturing projects in their countries.  Typically, Chinese state-owned enterprises participate in the installation or construction of  these projects, and the loans are tied to future 
Chinese exports of mechanical and electronic produc ts and equipment.  The loans appear to be 
on advantageous terms and conditions and appear to  lack any risk/exposure fees to compensate 
for future potential losses and the operational cost of the program.  WT/TPR/M/230/Add.1 
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  a. Please describe the terms and conditions of these loans. 
b. Please clarify the definition of "official development assistance" that the China 
Exim Bank uses to classify this program  as official development assistance. 
c. Please explain this program in light of China's obligations under Article 3 of the 
Agreement on Subsidies and Counterva iling Measures (Subsidies Agreement). 
Answer (for the above 3 questions) Information on the business portfolio of China Expor t-Import Bank (EximBank) is available at its 
website. The Bank's official export credit opera tion takes reference from provisions in the 
Arrangement on Officially Supported Export Credits of the OECD. Its lending interest rate is either a 
fixed one taking reference from OECD-released CI RRs or a floating one, which is a reconciled 
London Inter Bank Offered Rate (LIBOR). The Banks ' practices and operation are therefore in line 
with international norms on export credit and ther efore are also consistent with the Subsidies 
Agreement in the WTO. 
It is our understanding that the "official develo pment assistance" mentioned in the U.S. question 
refers to China's foreign aid, which is provide d by the Chinese government to developing countries 
and multilateral agencies for the purpose of prom oting economic development and people's living 
standard of developing countries. Official de velopment assistance is a concept different from 
Officially Supported Export Credit. 
III. T
RADE POLICIES AND PRACTICES BY MEASURE  
(3) M EASURES DIRECTLY AFFECTING EXPORTS  
(ii) Export subsidies 
2. As a follow-up to U.S. question 33 on the Secretariat's Report, the United States seeks 
more detailed information from China about lo ans provided by the China Exim Bank.  In 
particular, in order to support the Chinese gov ernment's "going global" strategy, the China 
Exim Bank provides loans on advantageous term s and conditions to selected Chinese state-
owned enterprises in certain sectors to support their international strategies.  These sectors 
include construction, electronics, mechanical, hi gh and new technology products/capital goods, 
and telecommunications and power equipment.  While the China Exim Bank typically charges a 
competitive interest rate (which the China Exim Bank defines as either a fixed rate based on the 
OECD Commercial Interest Reference Rate for the currency or a floating rate of Libor + 
spread), there appear to be provisions made fo r special cases in which a "preferential" interest 
rate is charged, longer than standard repayment terms are offered and/or certain fees are 
waived.   
a. Please describe the terms and conditions of the loans provided under 
"preferential" circumstances and what criteria are used for determining 
preferential treatment.   
b. Please explain this program in light of China's obligations under Article 3 of the 
Subsidies Agreement. 
Answer (for the above 2 questions) 
As an official export credit provider, the business of  China Exim Bank, by its nature, can be deemed 
"advantageous" compared with that of commercia l banks. We therefore are not clear about the 
"special cases" mentioned in the U.S. questi on. China Exim Bank provides loans for overseas WT/TPR/M/230/Add.1 
Page 262  
 
  operation and investment of Chinese enterprises with  a maximum repayment term of 15 years, which 
is consistent with generally accepted international practices, and the actual repayment term is 
determined based on specific circumstances of the re levant project. China is not a member of OECD. 
However, China Exim Bank conducts its business by taking reference to the practices of OECD and 
other generally accepted international export credit pr actices, which are consistent the WTO Subsidies 
Agreement. 
3. As a further follow-up to U.S. question 33 the Secretariat's Report, the United States 
notes that the China Development Bank has rep ortedly expanded its focus to support sectors 
that are considered to be essential to China's long-term competitiveness and specifically for 
companies engaging in research and developm ent, Chinese "brand name" companies and 
certain companies in their overseas expansion.  In part, this support takes the form of export 
credits.   
a. Please describe the terms and conditi ons of the export credit financing. 
b. Please explain the export credit financing in light of China's obligations under  
Article 3 of the Subsidies Agreement. 
Answer (for the above 2 questions) 
China Development Bank has already accomplished tr ansition from a policy bank engaging in policy 
financing with minor profits into a profit-making commercial bank engaging in mainly medium and 
long-term businesses. The interest rate of the export credit financing of the bank is market based and 
does not constitute export subsidy as defi ned in the WTO Subsidies Agreement. 
III. T
RADE POLICIES AND PRACTICES BY MEASURE  
(4) M EASURES AFFECTING PRODUCTION AND TRADE  
(iii) State-owned enterprises, private enterprises and corporate governance 
4. In its response to U.S. question 40, China noted that it will adopt measures to promote 
mergers and acquisitions involving large state-owne d enterprises.  Will this effort include any 
privatization of state-owned enterprises, or opportunities for foreign investors to purchase 
ownership interests in state-owned enterprises? 
Answer The main polices and measures for promoting restruct uring of large state-owned enterprises include to 
encourage private enterprises to participate in refo rm and restructuring of state-owned enterprises 
through merger, share-holding or equity participa ting, to accelerate the introduction of joint stock 
system into state-owned enterprises and promot e the restructuring and listing of state-owned 
enterprises and improve the quality of listed compani es, and to encourage the introduction of strategic 
investors, including overseas strategic investors. 
III. T
RADE POLICIES AND PRACTICES BY MEASURE  
(4) M EASURES AFFECTING PRODUCTION AND TRADE  
(iv) Competition and consumer protection policy 
5. In its response to U.S. question 46, China stated that it will be issuing management 
regulations on foreign capital mergers and ac quisitions involving national security, in 
accordance with the Anti-Monopoly Law.   
a. When does China anticipate issuing those regulations?  WT/TPR/M/230/Add.1 
 Page 263 
 
 
  b. Does China plan to provide for public  notice and comment on a draft of the 
regulations, before they are finalized? 
c. Will the national security review being implemented by the new regulations 
allow China to limit the applicability of other reviews of foreign direct 
investment, which go beyond nati onal security to broader policy? 
Answer (for the above 3 questions) At present, relevant authorities are studying and dr afting regulations on national security review in 
accordance with a series of applicable  laws and regulations such as the Legislation Law  and Anti-
Monopoly Law . Recently, a discussion meeting on the nationa l security review system was convened, 
and participants of the meeting include foreign in stitutions in China such as American Chamber of 
Commerce in China and some foreign-funded enterprises. 
The review is to be focused on a small number of me rgers and acquisitions that may influence or exert 
potential influence on national security. Such wo rk does not mean to impose new barriers or 
additional administrative licensing procedures for fore ign mergers and acquisitions, or to affect the 
current foreign investment examination and approva l administration system. China will adhere to the 
basic state policy of opening up, and will continue attracting foreign investment. It is aimed to 
preventing risks and safeguarding national secur ity while guiding and streamlining the healthy 
development of  foreign mergers and acquisitions. 
IV. T
RADE POLICIES BY SECTOR  
(5) I NTRODUCTION  
6. In its response to U.S. question 54, China me ntioned its plans to continue to streamline 
its qualification and licensing requirements, a nd to amend its FDI catalogues.  China also 
mentioned plans for targeted liberalizations of its FDI framework.  
a. What types of streamlining reforms does China anticipate making to its 
qualification and licensing requirements? 
b. Does China believe that the benefits of foreign investment are more likely to be 
maximized through a strategy that targets FDI to certain sectors, rather than a generalized open investment commitme nt like the United States has long 
maintained? 
Answer (for the above 2 questions) 
In recent years, China has continuously strengthene d the efforts in the reform of administrative 
licensing system, and has delegated much author ity of examination and approval to the local 
governments. The latest move in respect of fore ign investment is the release by the Ministry of 
Commerce (MOFCOM) of the Circular on Delegating Examination and Approval Authority over 
Foreign Investment (Shang Zi Fa No. 209 of 2010) on 10 June 2010. According to the Circular , 
MOFCOM shall be responsible for examination and approval of the establishment of foreign 
investment enterprises and their alterations for projects of the "encouraged" and "permitted" 
categories with total investment at or above USD 300 millions and also projects of the "restricted" 
category with total investment at or above USD 50 millions  in the Catalogue for the Guidance of 
Industries for Foreign Investment ; the local people's governments at the provincial level shall be 
responsible for examination and approval of the establishment of foreign investment enterprises and 
their alterations for projects falling in the "enc ouraged" and "permitted" categories with total 
investment of less than USD 300 million and also for projects of "restricted" category with total WT/TPR/M/230/Add.1 
Page 264  
 
  investment of less than USD 50 million in the Catalogue for the Guidance of Industries for Foreign 
Investment . For details of the latest development, please refer to the official website of MOFCOM at 
www.mofcom.gov.cn. 
China will, based on its economic and social deve lopment levels, keep pushing forward reform and 
opening up, improving the foreign investment admini stration system, facilitating investment and trade 
and amending polices and measures on foreign investme nt as appropriate. At the current stage, apart 
from further delegating authority over foreign i nvestment to local governments, China will also 
simplify the examination and approval procedures, gradually implement form atted examination and 
approval and on-line administrative licensing to prom ote further administrative transparency and 
efficiency. 
IV. T
RADE POLICIES BY SECTOR  
(5) S ERVICES  
(iii) Telecommunications 
7. The United States seeks a number of clarifications regarding China's response to U.S. 
questions 65.a., 65.b. and 65.c. 
a. In its response to U.S. question 65.a., China stated: "After market restructuring 
in 2008, China Telecom, as a new mobile market competitor, brought more 
competitions in the basic telecom services ma rket . . . ." Is it really accurate to 
call China Telecom a new mobile competitor?   China Telecom acquired the CDMA assets of the former China Unicom, a nd that while the service was new to 
China Telecom, no additional market entry (i.e., an additional market player) 
resulted from this transaction, but rather ownership was changed.  Prior to the restructuring, the mobile players were China Telecom (with 75 million PHS 
subscribers), China Unicom and China Mobile.  Post-restructuring, there 
remain 3 mobile operators (China Netcom, China Telecom, and China Mobile).  
The technology changed (China Telecom now deploys CDMA), but the overall 
number of operators has not changed. Post  restructuring (and post reduction in 
capitalization levels), has there been any ne w entry in the fixed market?  If not, 
is China reconsidering policies to permit or encourage new entry?  
Answer 
Before the telecommunication restructuring in 2008, China Unicom was the only operator licensed to 
engage in full telecommunication services, while af ter the restructuring, the three operators of China 
Unicom, China Mobile and China Telecom have al l become full service operators and the market 
competition became fiercer. Before  the restructuring, China Unicom  and China Mobile were the only 
two licensed to engage in mobile telecommunicatio n business, while after the restructuring, China 
Telecom acquired the CDMA business of China Un icom, and the number of mobile operators 
engaged in mobile telecommunication business incr eased from 2 to 3. It is obvious that the 2008 
restructuring promoted the competition in the telecommunication market. The telecommunication 
restructuring was launched under the guidelines of allocating the existing telecommunication network 
resources on a reasonable basis, realizing full service operation and forming a proper and healthy 
market competition pattern which both prevents monopoly and avoids excessive competition and 
redundant construction. Reform of the telecommuni cation sector will be further deepened based on 
the development status of domestic market. 
b. In its response to U.S. question 65.b., China stated: "China has been implementing its 
obligations of market liberalization in accordance with its WTO commitments. As far as the 
new market access and competition are concerned, the pace of reform for the telecom sector has  WT/TPR/M/230/Add.1 
 Page 265 
 
 
  never been halted, China has done a lot and will try its best to promote sustainable development 
for the telecom sector, the restructuring in 2008 is a good example for promoting the competition and development of the telecom sector ."  Despite these assertions, there has been no 
additional market entry in the basic telecom s ector. Does lack of additional entry (by Chinese 
and/or Chinese-foreign joint ventures) reflect a po licy decision to prohibit additional entry? Or, 
can China clearly state that, as a policy matter, it supports additional market entry, by either 
Chinese and/or Chinese-foreign joint ventures? 
Answer Telecommunication is a strategic industry of the national economy, and telecommunication network is 
the most important infrastructure for information industry. China will, as always, push forward the 
reform of the telecommunication sector so that a more reasonable and effective market competition 
pattern would take shape to promote the hea lthy and coordinated development of the sector. 
c. In its response to U.S. question 65.c., China stated: " Even the telecom networks 
and the Radio and TV networks realize free access in the future, the relevant 
operation licenses still have to be reviewed and approved by the relevant 
authorities separately."   Does China acknowledge that based on the WTO Basic 
Telecommunications Scheduling Guidelines, that foreign firms have the right to 
supply telecommunications services over a cable network, if partnered with a 
Chinese firm? If so, can a foreign firm apply to offer such a service, independently of this pilot program?  If not, why not? 
Answer 
China opens its telecommunication market in accord ance with its accession commitments, and foreign 
services providers wishing to access into the Chinese  telecommunication market shall meet applicable 
Chinese laws, regulations and administrative rules. For details of the market access requirements, 
please refer to the  Regulations on the Administration of Foreign-Invested Telecommunications 
Enterprises  and the  Regulations on Telecommunications . 
d. In its response to U.S. question 65.c., China stated that "relevant regulations for 
the [cable modem] licensing are still under discussion, [and] no such license has 
been granted to the operators."  We understand that many cable operators are 
currently offering cable modem servi ces (Internet access services offered over a 
cable TV infrastructure), and already ha ve millions of subscribers.  Do these 
operators not have licenses to provide In ternet access services?  Why would 
China need to conduct pilot schemes, if there were already millions of 
subscribers? 
Answer 
The network convergence, as an unprecedented systema tical project, has to be implemented step by 
step and cannot be accomplished by one single effort . China should, taking into account its long-term 
development, keep track of the international cutting-edge technologies, determine reasonable, 
advanced and proper technical patterns, and push fo rward steadily such work as network construction, 
services application, industrial development, as well as supervision and administration so as to probe 
into and establish a triple-network convergence mode adapted to the specific ci rcumstances of China. 
8. In its response to U.S. question 66.a., China stated:  "The telecom sector is a capital-
intensive industry featuring economy of scale. If  the registered capital of  telecom companies was 
too low, it would be inadequate to protect the investors and consumers."   WT/TPR/M/230/Add.1 
Page 266  
 
  a. How is this statement accurate when  China's own operators typically operate 
networks in foreign markets at capitalization levels much lower than that required in China?  For example, the level of capitalization of China Netcom 
and China Telecom in the United States is a fraction of what is required in 
China.   This incongruence cannot be explained by the greater size of the 
Chinese domestic market.  Many foreign operators are not seeking to offer full 
nationwide services in China, but rath er, like China Telecom and China Netcom 
in the United States, are seeking to offer specialized services to targeted 
customers, which is a business model that China's capitalization requirement 
significantly hinders. 
b. With regard to China's statement that "telecom sector is a capital-intensive 
industry," the point of the United States is that this statement is not true in areas 
such as VOIP or resale-based services, where companies have established records of offering reliable and efficient services without the type of capital 
outlays of traditional telecommunications networks.  With that in mind, the 
United States would appreciate it if China would clarify its response. 
c. In its response to U.S. question 74.a., China stated:  "As soon as the services 
suppliers receive the licenses for the basic telecom services, they can decide their 
own ways to provide services. They m ay supply services via the networks build 
by themselves or utilize the leased netw orks to provide services in the way of 
resale."  If, as it appears, China recognizes that a service may be provided with 
no infrastructure investment, then what is the purpose of a capitalization requirement of RMB 1 billion, which, as China's answer to question 66.a. 
indicates, was based on the premise that all telecommunications services are 
capital intensive? 
Answer (for the above 3 questions) 
China is different from the U.S. Each country has its own national conditions. China needs to 
determine its own way of administ ration and development based on its specific circumstances. China 
is a developing country with more than half of its people living in rural areas. For people living in the 
vast remote areas with inconvenient traffic, th e Chinese government must fulfill the obligation to 
ensure them the right to gain access to equal telecommunication services. Telecommunication is a 
capital-intensive industry and the building of telecommunication infrastructure requires a large 
amount of investment. The fundamental purpose of th e minimum registered capital requirement set by 
the government is to safeguard the interests of both investors and consumers including the vast 
number of people living in the rural areas. Also, th e minimum capital requirement applies equally to 
domestic and foreign enterprises and thus is consis tent with the principle of national treatment. 
9. In its response to U.S. question 67, China stated:  "In terms of providing satellite-related 
services, including China Telecom, there are 5 companies which are granted the licenses. 
43 companies provided VSAT services as of the end of 2008. As for the next step of market liberalization for satellite services, it depends on  the domestic market conditions."  Are foreign 
firms eligible to supply VSAT services in China, if  they are willing to accept a Chinese partner?  
In the case of VSAT, is it true that the supplier need not be a Chinese state-owned enterprise?  If so, are there any constraints on whom a forei gn company could partner with to supply VSAT 
services?  WT/TPR/M/230/Add.1 
 Page 267 
 
 
  Answer 
For detailed provisions on foreign investment in the telecommunication industry, please refer to the  
Regulations on the Administration of Fore ign-Invested Telecommunications Enterprises . 
10. The United States seeks a number of clarifications regarding China's response to U.S. 
questions 68.a., 68.b. and 68.c. 
a. In its response to U.S. questions 68.a. and 68.b., China stated: "Please refer to 
List for Telecommunication Services  promulgated on April 1st, 2003."  The 
United States is interested in a list of the specific foreign-affiliated licensees, and 
the services for which the joint ventu re was licensed.  Because many licenses 
were issued after 2003, simply referring to a 2003 list does not provide the clarity we are seeking.  Could China provide updated information? 
Answer 
According to the  Regulations on the Administration of  Foreign-Invested Telecommunications 
Enterprises , the Ministry of Industry and Information T echnology is responsible for examination and 
approval of the application for foreign investme nt in specific telecommunication services with the 
issuance of a letter of opinions concerning the fore ign investment in the telecommunication services 
which should define the specific business scope permitted for the joint venture based on the 
application submitted by the applicant. The appli cant may, upon having obtained the letter, apply to 
MOFCOM for the approval certificate for the esta blishment of a foreign-funded enterprise. Upon 
having obtained the approval certificate, the major Chinese partner of the foreign-invested enterprise 
shall, with such certificate, go through the proce dures with Ministry of Industry and Information 
Technology for obtaining the license for operation of telecom business. The major Chinese partner of the foreign-invested enterprise shall then, with the approval certificate and the license, go through the 
registration procedures of foreign-invested tele communication enterprises with the industrial and 
commercial administration authority. 
b. Has China given thought to the import ance that international corporate data 
services (IP-VPN) play in allowing its ow n multinationals to communicate with 
their global affiliates and how to allo w for more competitio n in the Chinese 
market, including allowing foreign value-added telecommunications joint-
ventures to obtain international IP-VPN licenses? 
Answer The decision to make investment or not is a bus iness activity subject to discretion of enterprises. 
China has no specific or special limitation on fo reign investment in IP-VPN business. Foreign 
investors may, subject to accession commitment of Ch ina, apply to competent authorities for engaging 
in such business through establishing joint-ventures. 
c. In its response to U.S. question 68.c., China stated: "China opened up its telecom 
services sector in line with the WTO commitments. In terms of the IP-VPN 
services, International Closed User Gr oup Voice and Date Services has been 
opened up to foreign investors . . . ."  Why does China consider it legitimate to 
categorize the same service (IP-VPN) differently depending on whether it is 
offered internationally or domestically? For example, the regulatory implication 
of being classified as a basic service means a much higher capitalization requirement. Does the fact that a service is being offered internationally rather 
than domestically justify such a distinction?  Please explain. WT/TPR/M/230/Add.1 
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  Answer 
The List of Telecommunication Services serves as the basis for issu ance of operation licenses and 
supervision of the sector by the telecommunication regulatory authorities. It is also the basis for 
streamlining the operational activities of teleco mmunication enterprises. While preparing the List, 
China took reference of the generally accepted in ternational practices regarding the classification on 
telecommunication business and classified the telecommunication business in light of the 
characteristics of the Chinese telecommunication industry. Meanwhile, China also makes proper 
adjustments to the List based on the development of the market. The competent authorities amended 
the List in 2003. 
11. In its response to U.S. question 72, which asked whether the restructuring of the 
telecommunications sector in 2008 was subject to review under China's Anti-Monopoly Law 
applied to the telecom sector, China stated only that "China is of the view that there is no 
monopoly in China's basic telecom market, a nd the present development in the basic telecom 
market is going well."  This statement does not respond to the question that was asked.  Could 
China please explain whether the restructurin g was subject to review under the Anti-Monopoly 
Law?  If it was, who conducted the review?  Are its analysis and conclusions public? 
Answer The Anti-Monopoly Law  has been implemented as from 1 August 2008, and the telecommunication 
restructuring was launched on 23 May 2008. 
Chinese Government's Report 
III.  T
RADE DEVELOPMENT AND TRADE POLICIES  
(3)  A DHERING TO FURTHER OPENING UP TO THE OUTSIDE WORLD  
(i)  New vehicle and new fields for foreign investment 
1.  As a follow-up to U.S. question 7 on the Ch inese Government's Report, the United States 
notes that China has the largest steel industry in the world, but China's steel policy still severely 
restricts foreign investment in the steel industry.   U.S. and other international steel companies 
have successfully participated in investment, modernization and restructuring of steel firms, both in their own markets and in transitional and developing economies, but cannot do the same 
in China.  China's state owned enterprises benefit from the open investment climates of the 
United States and other economies, as witnes sed by recent steel investments by Chinese state-
owned steel enterprises Anshan and Tianjin in U.S. steel enterprises and many iron ore 
investments in Africa, Latin America and other co untries.  China is about to issue its new Five-
Year Plan for the steel industry. What steps will China take to improve openness and reciprocity in its investment regime for the iron and steel sector? 
Answer 
To avoid low-level redundant constr uction and aggravation of conflicts caused by over capacity, the 
Development Polices of the Iron and Steel Industry  imposed strict access criteria concerning scale, 
funds etc on both domestic and foreign-invested steel projects. However, such restrictions do not 
mean to prohibit foreign investme nt in the Chinese steel industry. To name a few examples, in 2001 
the German ThyssenKrupp Steel Company built a ga lvanization production li ne through establishing 
a joint venture with Angang New Steel Company Limited; in 2004 Nippon Steel Corporation, the 
Arcelor and Baoshan Iron & Steel Co., Ltd. est ablished the 1800mm cold rolling project through 
setting up a joint venture; and in 2005 the Mittal Gr oup invested in Hunan Valin Iron & Steel Group.  WT/TPR/M/230/Add.1 
 Page 269 
 
 
  China will study on further opening up of the steel industry based on the development status of the 
industry. 
INDIA – Part 1  
Agriculture 
1. The majority of TRQs in agriculture sector are unfilled by China. The administration of 
the TRQs is also seen to need greater clarity. China is requested to indicate the agricultural 
items on which TRQs have been prescribed as we ll as the procedure for allocation of the same. 
Further, China may also apprise us about the numb er of applications received in the previous 
3 years and in how many of such applications TRQs were issued.  
Answer 
The Interim Measures for the Administration of Im port Tariff Rate Quotas of Agricultural Products 
amended in 2003 adopts the unified, fair, just, transparent, predictable and non-discriminatory 
principle for tariff rate quotas administration. In the application form for tariff rate quotas, there is a 
column requiring enterprises to indicate if they ag ree to disclose relevant information of themselves 
and their quotas obtained. On this question concer ning a specific enterprise, we have to respect 
opinions of the applicant enterprise. 
For China's tariff rate quota administration and the fill- in rates in general, please refer to the following 
notifications of China to the WTO: G/AG/ N/CHN/3, G/AG/N/CHN/5, G/AG/N/CHN/7&7C1, 
G/AG/N/CHN/9, G/AG/N/CHN/11, G/AG/N/CHN/14 and G/AG/N/CHN/16. Besides, India may also 
refer to G/MA/W/39 、G/MA/W/52, G/MA/W/64, G/MA/W/74, G/MA/W/83, G/MA/W/92 and 
G/MA/W/99. 
2. China is requested to provide informatio n on country-wise import quota system for 
importing tobacco, if any, along with details of the system. The details may include how the 
State Tobacco Monopoly Administration (STMA)  imports tobacco into China and also the 
country-wise quota allocation.   
Answer China does not apply import quota for imports of tobacco.  
3. The Chinese and Indian Governments had sign ed a phytosanitary protocol for export of 
Indian tobacco to China during the visit of the Indian Prime Minister to China in January, 2008, providing the market access to the Chinese  market. China is seen not to be importing 
tobacco from India. The reasons for not importin g tobacco from India may be explained.    
Answer 
The phytosanitary protocol for export of Indian tobacco to China helps resolve some phytosanitary 
issues for Indian tobacco and provide market access opportunities. According to some Chinese 
importers, Indian tobacco exporters could improve th e quality and adjust the price of their products so 
as to increase their competi tiveness in Chinese market.  
4. China is requested to specify what is th e import-policy in China for leaf tobacco and 
whether it is imported freely or under TRQ or STE. It may further be clarified how does China 
ensure equal opportunities to foreign suppliers of leaf tobacco vis-à-vis domestic suppliers.   WT/TPR/M/230/Add.1 
Page 270  
 
  Answer 
China does not apply TRQ for imports of tobacco. A ccording to Annex 2A1-Products Subject to State 
Trading (Import) of the Protocol on the Accession of the People's Republic of China , some tobacco 
products are imported under STE. Except for those measures that might be applied according to 
relevant WTO rules such as import tariff duty, im ported and domestic tobacco products are accorded 
equal treatment. 
SPS and TBT  5. Enforcement of SPS and TBT measures at the border requires clarity on the HS 
nomenclature so as to apply the measures impa rtially on imports from all member states. As 
such evidently such information is to be availa ble with the Chinese Customs. However, no HS 
codes are mentioned for nearly all the notifica tions submitted by China to WTO Secretariat 
under the SPS and TBT Agreements. China is requested to clarify as why such notifications do not carry the HS codes even though int erest of transparency is so served.   
Answer 
SPS and TBT Agreements request Members to provi de HS or ICS codes where applicable. China 
would like to draw India's attention to various notif ications that China has made, which contain such 
codes. Recent examples include  G/TBT/N/CHN/735, 736, 737, 738, 739, 740 and 741 of 7 May 2010. 
China shall continue to provide such codes in its future notifications where applicable according to 
SPS and TBT Agreements.  
6. It is noticed that China uses TBT measures on a number agricultural items which may 
be better covered by SPS measures. China is request ed to explain this type of application of 
TBT measures.   
Answer 
China would appreciate it very much if India could share more details with regard to the claimed TBT 
measures so as to allow for a targeted and accurate answer.  
7. It is noticed that the notifications are main ly in Chinese which is not an official language 
of the WTO as per the following position:  
 Total SPS notifications  246 
 Only in Chinese   240 
 Total TBT notifications  817 
 Only in Chinese   723  No language mentioned  92 
China is requested to explain its steps in the di rection of issuing the notifications in official 
languages of the WTO in interests of transparency.  
Answer 
China has made all its TBT and SPS notifications in  a WTO official language in accordance with the 
TBT and SPS Agreements. Only those documents that  are provided with the notifications are in 
Chinese. China would like to draw India's attention to Paragraph 8 of Annex B of the SPS Agreement 
and Article 10.5 of the TBT Agreement, which require only developed Members, not developing  WT/TPR/M/230/Add.1 
 Page 271 
 
 
  ones, to provide such documents or their summari es in WTO working languages. China will continue 
to fully comply with the transparency requiremen ts of the SPS and TBT Agreements in the future.  
8. China's New Food Safety Law came into effect from June 2009 to apply to import of 
food products to China. In this context Ch ina is requested to clarify the following:  
a. What are the obligations for exporte rs from India under the said law and how 
these obligations are different from the earlier obligations for exporters?   
Answer According to Article 62 of the Food Safety Law of China , imported food, food additives and food 
related products must comply with relevant criteria of food safety. For more details about obligations 
of foreign exporters, please refer to the  Food Safety Law and the Regulations on Implementation of 
the Food Safety Law  via www.aqsiq.gov.cn or www.moh.gov.cn.  
b. Under the new law, foreign food manufacturers who export food to China are 
now obliged to register with the Admini stration of Inspection and Quarantine 
(AIQ) for an effective registration term of four years. As such, what is the time frame within which such registration will be completed after application and the 
criteria for such registration of exporter. Further, it may be clarified as to what 
shall be process followed for re-registration after the initial four year period.  
Answer 
Please refer to the  Food Safety Law and the  Regulations on Implementation of the Food Safety Law 
via www.aqsiq.gov.cn or www.moh.gov.cn.  
c. How many areas have the standards b een revised under the new Law, from the 
earlier standards – for example for additi ve, packaging, minimum residue levels 
in pesticides, etc?   
Answer 
Please refer to the  Food Safety Law and the  Regulations on Implementation of the Food Safety Law 
via www.aqsiq.gov.cn or www.moh.gov.cn. 
d. What international Agreements – Codex Alimentarius, International Plant 
Protection, etc – have been followed for developing the new Food Safety Law? 
The extent to which the provisions of  the law are not based on the known 
international agreements may also be stated.   
  (For instance, on the basis of the Food Safety Law, China sets a list of the food 
disinfectant materials (components) which is allowed for use.  This list has not 
been developed based on any international standard. What has been the scientific process of arriving at the list of products on this list? What are the other aspects of the new Law that are not based on international agreements?) 
Answer Please refer to the  Food Safety Law and the  Regulations on Implementation of the Food Safety Law 
via www.aqsiq.gov.cn or www.moh.gov.cn.  WT/TPR/M/230/Add.1 
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  e. What is the appeal process to exporters if their product is rejected for sale in 
China under the new Law?   
Answer 
Please refer to the  Food Safety Law and the  Regulations on Implementation of the Food Safety Law 
via www.aqsiq.gov.cn or www.moh.gov.cn. 
NAMA 
9. China applies export restraints on ba uxite, coke, fluorspar, magnesium, manganese, 
silicon carbide, silicon metal, yellow phosphorus and zinc in the form of export duty rates, 
"temporary" export duty rates, and/or "special " export duty rates of various magnitudes may 
be quantitative restrictions in violation of Article XI of GATT, 1994. This is especially so if these export duties are imposed either on materials that  are not listed in Annex 6 of the Accession 
Protocol, or on materials that are listed in Anne x 6 of the Accession Protocol, but at rates that 
exceed the maximum rates designated in Annex 6. China is requested to explain how such 
restraints are currently being so imposed.   
Answer 
The measures mentioned in India's question are ri ght now under review by panels of DS394, DS395 
and DS398. China suggests that such questions be dealt with in that process including the coming 
hearing in August.  
10. In the case of Pharmaceuticals, the time required for licensing and API registration is 
18-24 months, whereas for Cardio Vascular/anti cancer formulations the registration time is 
36-48 months, which is very long. Further, produc ts specifications in China are seen to be 
neither standardized nor published. This has resu lted in a product being rejected without citing 
any reasons. It has also been experienced that  even after all approvals and license have been 
received, processing through customs is also a majo r problem. China is requested to state what 
steps are being taken to remove these barriers to trade regarding import of pharmaceutical 
products in to China.  
Answer 
Under China's Medicines Law , a marketing license is required for an Active Pharmaceutical 
Intermediate (API), as for a preparation. By compar ison, API may be administered differently in other 
members, for example, it is subject to DMF admini stration in Europe. This regulatory difference may 
cause confusion when drug-producers from other members try to understand China's system. According to the Measures on Administration of Medicines Registration , imported APIs are subject to 
the same requirements regarding submission of docu ments, technical examination and clinical trial 
requirements as domestically produced APIs. Theref ore China does not think there are trade barriers 
in this regard. 
Exchange Rate  
11. The exchange rate of China under its fixe d exchange rate policy is seen to be trade 
distorting and protectionist as it gives undue ad vantage to its exporters and inhibits imports 
into China. This regime may be in violation of Article XV (4) of GATT, 1994 and Article IV, 
Section 1 of the Articles of Agreement of the International Monetary Fund.    WT/TPR/M/230/Add.1 
 Page 273 
 
 
  China may please clarify whether she follows the IMF standards on exchange rate regime? And 
when China will bring the needed reforms to comp letely follow the freely floating exchange rate 
system?  
Answer The issue of exchange rate is about the macro-ec onomic policy of a country while subsidy or "undue 
advantage" as described by India is a relatively narro w definition of the WTO. They fall into totally 
different legal categories. IMF, and the limited provision of the WTO, provide the basic concepts, 
options and to a certain extent rules on exchange rate while countries, by referring to those concepts, 
options and rules, may choose their own exchange mechanism and relevant interpretation. So it is 
only natural that different countries have diffe rent views on the issue of exchange rate. 
Regarding the reform of China on exchange rate, China believes that, against the background of the 
financial and economic crisis, the stability of major currencies including Chinese RMB can help the global economy tide over the crisis. China will con tinue to steadily advance the reform of the 
formation of the RMB exchange rate mechanism unde r the principle of independent decision-making, 
controllability and gradual progress.  
Intellectual Property Rights  12. It has been observed that the textile items from China have carried labels of "Made in 
India" and have been exported to African mark ets in huge quantities to be sold at very low 
rates. This has harmed growth prospects of th e Indian exporters in the African markets and it 
also damages the good image and reputation of Indian textile products. China is requested to apprise what exact measures are being taken by  the Chinese government to prevent any such 
misuse of 'Made in India' brand. 
Answer 
It is not to the knowledge of China that there are such cases as described in India's question. If India 
could provide information in more detail, China w ould be ready to look into the matter and take 
necessary measures in accordance with relevant regulations of China.  
Subsidies  
13. The Chinese government gives direct and indi rect subsidies to its domestic textile and 
garment manufacturers such as tax concessions, interest loan subsidies, debt waivers, 
preferential tax programmes and other grants. Besides, China's adoption of a new textile revitalization plan in April 2009 is also seen to h ave increased various subsidies to its textile and 
garment industry. This is seen to have adversely affected the competitiveness of Indian textile exports including MMF textiles. China is requested to state the exact number of the types of subsidies granted, the amount disbursed against each such scheme and the duration for which 
these subsidies are likely to continue.  
Answer 
China does not provide subsidies to its domestic indu stries that would violate relevant WTO rules. For 
more details, please refer to the second subsidy notif ication that China will submit this summer.  WT/TPR/M/230/Add.1 
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  14. 
i. Is it true that China is providing  export related subsidies such as cash and other 
incentives and production related subsidi es such as cheaper electricity, land etc. 
to its firms at local/city/town level in the steel, petro-chemical, engineering, 
inorganic chemicals, forestry & paper sect ors? If yes, then sector wise and year-
wise details may be given.  
Answer 
China seriously observes its commitments as provided for in Article 2(A) of the Protocol on the 
Accession of the People's Republic of China . Therefore, the WTO rules apply to the entire Customs 
territory of China, including at local/city/town level.  
ii. How China does calculate consumptio n taxes for imported products and 
domestic products?   
Answer 
Please refer to the Interim Regulations on Consumption Tax at http://www.gov.cn/zwgk/2008-
11/14/content_1149528.htm and the Rules on Implementation of the Interim Regulations on 
Consumption Tax  at http://www.chinatax.gov.cn/n 8136506/n8136593/ n8137537/n8138502/ 
8729527.html for details. 
iii. There is a perception that China levies higher tax burdens on firms exporting to 
China. Does China levy taxes on services inputs even when these services were 
not performed in China?  If yes, details thereof.   
Answer 
According to Article 1 of the  Interim Regulations on Business Tax , services suppliers within the 
territory of China are subject to business tax. Th e business tax is not related to services inputs.  
iv. China is encouraging the use of locally  made auto parts and components in the 
automobile industry, and the use of do mestically manufactured plant/machinery 
and technology through Regulations. The regulations in the auto sector, which 
were changed following dispute in the WT O, in practice are still in use. Would 
China like to comments on this?  
Answer 
China has fully complied with the rulings of DS339, DS340 and DS342.  15.  (i) Removal of 10% Import duty slapped on Indian Sesame seeds in China.  
  China is creating artificial trade barriers, hindering imports from India of agri 
products like Sesame seeds as discriminato ry import duties are being levied on 
imports of these products from India. Indian export of Sesame seeds to China 
attracts a 10 per cent import duty while nil duty is levied on Sesame seeds sourced from other countries.  WT/TPR/M/230/Add.1 
 Page 275 
 
 
    China is requested to clarify this discrimination and inform by when it would be 
waived. 
Answer 
China applies an MFN tariff duty of 10% to imported sesame seeds (HS 12074090). Sesame seeds 
imported from India enjoy a preferential tariff duty of 9% under the  Asia-Pacific Trade Agreement  
(APTA). Only the sesame seeds imported from ASEAN are subject to zero tariff duty under the  
China-ASEAN FTA . Such arrangements, including that for India under the APTA, are in conformity 
with Article XXIV of GATT 1994, hence do not constitute  artificial trade barriers or discrimination.  
16. 
Non-market country status for dumping duty determination- India observes that China's 
Protocol of Accession provides useful context to  confirm the conclusion that, in the case of 
imports originating in China, anti-dumping duties can be specified on a country-wide basis and not on the individual basis, when suppliers canno t show that market economy conditions prevail 
with regard to the manufacture, production and sale of the product concerned. Paragraph 150 
of China's Working Party Report provides such arrangement in this regard. China is still in the 
process of transition towards a full market econo my and, thus, that special difficulties could 
exist in determining price comparability while deciding about the anti dumping duty.   
Can China clarify that on what ground China be treated as market economy for the purposes of 
dumping duty determination?   
Answer 
China believes that the guiding principle of whethe r a Member is market economy or not is whether 
the allocation of resources is market-oriented. Market economy should have multiple instead of a 
single form. Recent measures by a lot of Members in  fighting the recent economic crisis demonstrate 
that the criteria for market economy are variable and multiple. It should also be pointed out that, when 
China acceded to the WTO, all WTO Members ha ve committed to recognize China's market economy 
status by 2016. 
INDIA – Part 2
 
India had submitted a list of 17 fruits  and vegetables for granting of market access to China during the 
year 2000.  While China has granted access for Indi an mangoes, grapes and bitter gourd, it is yet to be 
granted for the 14 fruits and vegetables.  
1. 
China may please inform by when 14 remaining fr uits and vegetables from India will be allowed 
to be exported to China.  
Answer 
China attaches great importance to India's export of  agricultural products to China. With the support 
and cooperation of India on risk evaluation, China has allowed India to export its mangoes and grapes 
to China in accordance with the pl ant quarantine protocol signed by and between India and China. For 
the market access of pomegranate , Chinese quince and pineapple etc, China is conducting risk 
analysis based on the technical materials provided by  India, and will timely inform India if there is 
any progress or if it needs India to provide supplem entary technical materials. Meanwhile, China is WT/TPR/M/230/Add.1 
Page 276  
 
  also conducting risk analysis over 7 vegetables of Indian okra, bean, pepper, cucumber, eggplant, pea, 
and West Indian gherkin. After obtaining preliminary results from the risk analysis, China will inform 
India of the relevant information. It is hoped that  India would cooperate in providing risk analysis 
materials timely and accurately. 
Buffalo meat from India has a good potential for export to China.  The Indian side in July 2006 
has requested General Administration of Quality Supervision, Inspection and Quarantine of the 
People's Republic of China delegation to visit sl aughter houses in India.  An Indian delegation 
led by Chairman APEDA visited China from 10
th to 12th July, 2007 to discuss market access for 
India.   
2. 
We would like China to indicate by when its au thorities will allow import of Indian buffalo 
meat.  
Answer 
China pays attention to India's export of buffa lo meat to China, and hopes that India would 
communicate actively with the competent authority of China to timely notify China of relevant 
epidemic disease information. Once such epidemic diseases as foot and mouth disease and cattle 
plague are wiped out in India and India receives the recognition of OIE, India and China can have 
consultation over this matter and have insp ection and quarantine access procedures started.  
A Protocol for import of Basmati rice was singed during the visit of the Chinese President to 
India in November 2006.  The Chinese inspectors visited India during 7-11 September 2009.  After the visit, the Chinese side had requested for standard Operating Procedures (SOPs) to 
ensure that the processing house and storage hou se are free from grain storage pests for export 
of basmati rice to China.  India has forwarded SOPs to China in October 2009.  
3. We would appreciate if China could share with us status update of this issue.  
Answer Currently, China is organizing experts to assess the materials relating to the testing system of 
quarantine of rice processing workshops and ware houses submitted by India on 19 January 2010, and 
will make relevant decisions according to the results of the assessment. 
An Indian wind energy company is already involv ed in major wind farm projects in China.  
However, the company continu es to face major barriers in mark et access in the Wind Energy 
Sector.   
Tariff Barriers 
 - Discriminatory Duties- excessively hi gh import duties and other charges  
 - Discriminatory Classification  - Unpredictability of tariff protection  WT/TPR/M/230/Add.1 
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   - Current customs duty regulations vary  somewhat across components and are 
applied differently to firms with different ownership structures.  
There are issues relating to accr editation criteria, IPRs, Joint Venture & Technology Transfer, 
Standards/Import Approval Requirements, delays in  customs clearance, lack of transparency, 
insistence on local content requirements, domestic subsidies and public procurement.  
4. 
We would like China to provide a detailed response on these issues.  
Answer 
The import tariffs of China fall into such categories as  general tariff rates, MFN tariff rates, agreement 
tariff rates, special preferential tariff rates etc. India is a party to the Asia Pacific Trade Agreement  
and therefore enjoys agreement tariff rates, which are more favourable than MFN tariff rates that are 
granted to most other countries and regions.  
The General Administration of Customs publishes the Customs Tariff of the coming year at the end of 
each year. The Regulations on Import and Export Duties  is also available publicly. The tariff rates of 
imports are applied according to customs clas sifications, which are fully predictable. 
The import tariffs of China vary with commodity classifications and countries and regions, but do not 
vary with businesses of different ownership structures. 
As for the so-called "discriminatory classification" , the Customs authorities make classification in 
accordance with the relevant provisions of the International Convention for Harmonized Commodity 
Description and Coding System . If there would be any question on classification on the part of India, 
India could go through relevant review procedures of  the Customs of China to have the issue settled. 
As for wind energy, as committed when entering the WTO, China implements corresponding MFN 
import tariff rates for wind power generating facilities,  for instance 10% and 8%  MFN tariff rates are 
respectively imposed on wind generators and wind generating sets. Meanwhile, in accordance with 
the Provisional Regulations on Value-Added Tax , a 17% value-added tax is levied on both domestic 
and imported wind power generating facilities. The ta riff and tax measures adopted by China conform 
to WTO rules and China's accessi on commitments, and do not constitute barriers to the export of 
Indian power generating facilities to China. 
For other questions mentioned by India, please sp ecify details so that China can look into it. 
Indian companies are facing tariff & Non ta riff barriers in the export of Power Plant 
Equipment from India to China.  Indian ex ports of power plant equipment to China are 
charged customs duty at 14% on CIF and a VAT of 17%.  Restrictive trade practices, not 
floating of international tenders in Power Plan t equipment and other such Non-Tariff Barriers 
are a big hindrance to the efforts of Indian companies to supply these equipments for removal 
of all technical barriers to the export of machin ery and power equipments export from India.  
5. What action China proposes to take in these areas to facilitate export of Indian power 
equipment?  WT/TPR/M/230/Add.1 
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  Answer 
Please refer to the answer to Question 4. 
Indian IT Industry faces some problems in  areas of Visa/Work permits and business tax 
regulations.  15% withholding tax on all remittances outside China is a matter of concern.  There should be no withholding tax at least on remittances made by a company for a work that 
it gets done outside China. 
6. We would appreciate China to provide details of measures it proposes to take to rectify the 
situation which is adversely impacting on India-China trade in services.   
Answer In accordance with the principle of source jurisdicti on to tax, the governments of almost all countries 
and regions exercise the power of levying taxes upon the incomes earned domestically. In accordance 
with the Law on Enterprise Income Tax , for a non-resident enterprise without any organizations or 
establishments within China, or with organizations or establishments within China but its income is 
not in fact related to such organizations or est ablishments, it shall pay enterprise income tax on its 
income derived from within China, and the income tax payable by a non-resident enterprise in respect 
of the income earned this way shall be  subject to withholding at source. The Regulations for 
Implementation of the Law on Enterprise Income Tax  further stipulates that the aforesaid income 
earned by a non-resident enterprise shall be subject to a reduced enterprise income tax rate of 10% 
(withholding tax), however, the interest income attr ibutable to loans from foreign governments to the 
Chinese Government, the interest income attributable  to preferential loans from international financial 
organisations to the Chinese Government and reside nt enterprises, and other income approved by the 
State Council may be exempt from enterprise income  tax. Therefore, such statement that a 15% 
withholding tax is imposed on all outward remittan ces from China is not correct, and the prevailing 
withholding income tax system of China is in line with international practice. 
In September 2006 an Indian television company submitted its application for landing right to 
China International Television Corporation (CIT VC) for hotels rated three star and above.  
However, in spite of regularly taking up this  matter landing right has not been granted.   
7. China may please inform its policy and authoris ation process in respect of grant of landing 
rights for foreign televisions companies.   
Answer Currently there are a large number and rich variet y of channels landed through China International 
Television Corporation (CITVC) and the market demand is saturated. From commercial point of 
view, the company has no plan to grant landi ng rights to more agencies for the time being.  
It has often been stated by many member st ates that disc-based copyright violations are 
considerably controlled with an effective Optical Disc Law.   WT/TPR/M/230/Add.1 
 Page 279 
 
 
  8. 
China is requested to inform whether there is a separate Optical Disc law in the country. If yes, 
then what has been its success in meeting the obj ectives of reducing disc based piracy and if not, 
does China contemplate introducing such a law?   
Answer China has the Copyright Law .  
Geographical Indications are essentially territorial  in nature. Yet there have been many cases of 
faux Gls being blatantly traded across borders e.g.  synthetic silk sarees made in design of Indian 
Kanjeevaram silk sarees, a registered GI have  been exported from China to India.  
9. 
As China seeks to curb counterfeit and pira ted products, we would appreciate for China 
sharing what steps it proposes to take to stop export of faux GIs products ?  
Answer 
The Chinese Government is always dedicated to  cracking down on any counterfeiting and piracy 
behaviours that infringe upon intellectual propert y rights, including counterfeiting geographical 
indications (GIs). In border law-enforcement, in addition to the Customs, the General Administration 
of Quality Supervision, Inspection and Quarantine (AQSIQ), which is responsible for entry-exit 
inspection and quarantine, also rigorously investig ate discovered or proved fa ke Gls products traded 
across borders in accordance with law. It is hoped th at India would provide detailed information about 
the fake Gls products that India mentioned (such as the full name and contact information of the 
exporter, contract and other trade documents, name or number of the means of transportation, date, 
port of dispatch etc.) 
In addition, China also hopes th at India and China could jointly establish a GIs protection and entry-
exit inspection cooperation mechanism, and inform each other of information relating to products 
under GIs protection as well as fake GIs products discove red in entry-exit inspection, so as to jointly 
crack down and prevent fake GIs products and their cross-border trade. 
CHINESE TAIPEI
 
WTO Secretariat Repo rt (WT/TPR/S/230) 
II. T RADE POLICY REGIME：FRAMEWORK AND OBJECTIVES  
INTRODUCTION  
(page 11, paragraph 1)  
The Report indicates that China is to accelerate the opening of its economy to the outside world, 
to introduce foreign technology and know-how, develop foreign trade, and promote economic 
development that is "mutually benefi cial" with its trading partners.  
In this connection, our questions are as follows:  
1. Could China please provide further in formation regarding its programme aimed 
at boosting sales of home appliances in rural areas? WT/TPR/M/230/Add.1 
Page 280  
 
  Answer 
Home appliances for rural residents, that is, the pilo t program of providing financial subsidies to rural 
residents for their purchase of home appliances, was first launched in December 2007 in the Provinces 
of Shandong, Henan and Sichuan. It was expanded to nationwide in December 2008. In 
December 2009 the efforts of the government in  this respect were further intensified. 
Firstly, the ceiling prices of products for which subs idies are provided were raised substantially. The 
ceiling prices of color TVs and mobile phones were doubled compared to that in December 2008; and 
the prices of 7 other categories of products incl uding fridges were raised by 25%-75%. Secondly, the 
coverage of home appliances in the program wa s expanded. Under the program there are now 
altogether 13 types of products of 10 categories of  home appliances. Thirdly, beneficiaries of the 
program were expanded. Since 1 January 2010, work ers of state-owned farms and tree farms became 
eligible for subsidies under the program and were  given the same treatment as rural residents. 
Enterprises' participation in the program  is decided by bidding procedures.  
2. May we suggest that, before completing  the formulation of related regulations 
and measures, the Chinese authorities mi ght like to consul our enterprises 
operating in Mainland China, with a view to taking their interests into account? 
Answer There are now over 80,000 Chinese Taipei-invested en terprises in mainland China, and they have 
made great contributions to the economic developmen t of Mainland China. Governments at all levels 
in mainland China attach great importance to  communication with Chinese Taipei-invested 
enterprises. When drafting related legislation and making policy adjustments, we will listen to views 
of businessmen from Chinese Taipei so that a sound e nvironment could be provided for their further 
development.  
(4) T
RADE POLICY OBJECTIVES  
(page 15, paragraph 19)   
China's imports from trading partners with whic h it has adopted bilateral/regional free trade 
agreements accounted for 24.7% of China's overall imports in 2009, down from 26.4% in 2006.   
Could China please:  
 1. Elaborate further on the origins of th e imports in the above-mentioned data for 
2006 and 2009 respectively?  
 2. Explain the reasons for this decline?  
Answer (questions (1) and (2)) 
Chinese import from FTA partners did not drop. According to statistics of Chinese Customs, Chin a's total imports from all members with which 
bilateral/regional free trade agreements were signed and entered into force, namely Hong Kong China, 
Macao China, Pakistan and ASEAN, were USD 101.57 billion in 2006, which accounted for 12.8% of 
the total imports of that year. In 2009, th e total imports from all members with which 
bilateral/regional free trade agreements were signed and entered into force, namely Hong Kong China, 
Macao China, Pakistan, ASEAN, Chile, New Zeal and and Singapore, were USD 150.08 billion, 
which was 14.9% of the total imports of the year.  WT/TPR/M/230/Add.1 
 Page 281 
 
 
  Year Origin Import Value 
(100 million USD) Total Percentage Notes 
ASEAN 895.3  
Pakistan  10.1  
Macao China 2.6  2006 
Hong Kong China 107.8 1,015.7 12.8% 
 
ASEAN 1,067.3  
Pakistan  12.6  
Macau China- 2.5  
Hong Kong China 87.1  
Singapore 178.0 Singed in 2008 
New Zealand 24.8 Singed in 2008 2009 
Chile 128.5 1,500.8 14.9% 
Singed in 2008 
(5) T RADE AGREEMENTS AND ARRANGEMENTS   
(iii) Bilateral arrangements 
China-Hong Kong, China; and China-Macau, China CEPAs. 
(pages 17 & 18, paragraphs 29 & 30) As we have seen from the Report, China's trade with its current bilateral FTA partners 
accounts for a minor and declining share of total trade.  For example, China's exports to these 
partners decreased from a 19.6% share of total exports in 2006 to 17.5% in 2009, and imports 
received from them decreased from 4.6% in 2006 to 4.3% in 2009. According to economic 
theory, when simple average applied rates fo r imports drop below the simple average MFN 
applied rate, the volume of exports and imports sh ould increase. China's trade with its bilateral 
FTA partners, however, goes against the theory, pa rticularly in the cases of China-Hong Kong, 
China, and China-Macau, China CEPAs. 
Our questions are therefore as follows:  
 1. We would appreciate some further explanation of this situation from China. Answer 
The notion that the trade between mainland China and Hong Kong China, Macao China is declining 
year by year, as said in the Report, does not tally wi th the real situation. According to statistics by 
Chinese Customs, from 2006 to 2008, the trade between mainland China and Hong Kong China, 
Macau China was continuously incr eased, with the growth rate sta nding at 21.7%, 18.7% and 10.3% 
respectively. In 2009, it was due to international fi nancial crisis that the bilateral trade of mainland 
China with Hong Kong China and Macau China dropped by 15.3%. 
Under the CEPAs reached by main land China with Hong Kong China and Macau China, bilateral 
trade also witnessed a tendency of growth; the grow th rates were 57.14%, 27 .27%, 5.35% and 15.90% 
from 2006 to 2009. Besides, because of the differen ces in scope, method, a nd treatment of transit 
trade and transshipment in statistics, trade statis tics of Hong Kong China and Macau China could be 
somewhat different from that of Chinese Customs. Ho wever, they also show that their trade with 
mainland China has a trend of increase both in value and quantity.  
 (2) Please could China explain in detail the reasons why the trade flows for both 
parties have decreased year-by-year? WT/TPR/M/230/Add.1 
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  Answer 
There are close economy and trad e links between mainland China and Hong Kong China, Macau 
China. As the global economy recove rs, bilateral trade is picking up together with the overall foreign 
trade of mainland China. From January to March 2010, the total exports a nd imports of mainland 
China was 617.8 billion USD, a 44.1% year-on-year growth. At the same ti me, total trade between 
mainland China with Hong Kong China and Macau China was 44.2 billion USD, a 28.78% growth 
year-on-year. 
(3) Has China thought of a possible solution to the above-mentioned situation, 
which has continued since 2009? 
Answer 
Please refer to the replies to the previous two questions.  (g) Other agreements 
(page 20, paragraph 37) 
As indicated in the Report, in June, 2004, China and the Southern African Customs Union 
(SACU) issued a joint declaration that both sid es had started FTA negotiations.  As of today, 
however, no negotiations have been held. Accord ing to China's free trade service website, both 
sides are trying to push the negotiations forward as  soon as possible to enter the practice stage.  
Are there any scheduled plans or specific timetables for FTA negotiations between China and 
the SACU? 
Answer China and SACU have not yet had substantial bila teral negotiations, and neith er is there a detailed 
timetable.  
III. T
RADE POLICIES AND PRACTICES BY MEASURE  
MEASURES DIRECTLY AFFECTING IMPORTS  
(vii) Standards and other technical requirements 
Standards and technical regulations 
(pages 35, 36 & 39, paragraphs 43, 46 & 59)   
We note from the Report that China has four types of standards: national, professional, local 
and enterprise standards, some of which a re voluntary, and others mandatory. Furthermore, 
China has been participating actively in regio nal and international MRAs on certification and 
accreditation. 
In 2007, 46.5% of the national standards were e quivalent to international standards; however, 
no recent data have been provided to the Secretariat.  
Medical devices imported into China must apply to the State Food and Drug Administration 
(SFDA) for an Import Medical Device Registrati on Certificate (IMDRC). In addition, the China 
Compulsory Certification (CCC) mark is require d for several categories of electrical devices. 
Medium/high-risk medical devices (Class II/III) and devices requiring a CCC mark must be 
tested by a lab in China.  WT/TPR/M/230/Add.1 
 Page 283 
 
 
  Our questions are as follows:   
 1. Could China provide recent data clarifying the equivalency status between its 
national standards and international standards, and the proportion of voluntary 
and mandatory standards as di fferent types of standards? 
Answer 
In 2009, 68% of Chinese national standards were equi valent to international standards. By the end 
of 2009, there were altogether 24,946 Chinese nati onal standards. Among these  standards, 3,177 were 
mandatory standards, accounting for 12.73%; 21, 587 were voluntary standards, accounting for 
86.53%; 182 were national advisory t echnical documents, accounting for 0.72%. 
 2. If tests have been conducted on the country of origin of a device following 
national standards, does that mean the device is exempted from repeat 
laboratory testing in China? 
 3. Since China has been participating actively in regional and international MRAs 
on certification and accreditation, woul d it consider allowing the SFDA to 
recognize more test agencies of medical device quality, including overseas 
agencies, to facilitate the testing pr ocesses of imported medical devices? 
Answer (questions (2) and (3)) Currently, there are multilateral and bilateral levels in the interna tional mutual recognition framework 
of China. At the multi-lateral level, China is a member of IECEE-CB and ILAC Mutual Recognition 
Agreements. CCC recognizes test reports by foreign testing bodies which conform to the requirements 
of relevant international mutual recognition syst ems. At the bilateral level, China has signed 
40 bilateral memoranda of coopera tion and agreements with 32 organizations in 23 countries and 
regions, among which 17 memoranda are related to  the international cooperation of CCC. In the 
framework of the memoranda, foreign certifi cation bodies, through cooperation with CCC 
certification bodies of China, may carry out part of  the CCC certification work. Besides, with the 
establishment of intergovernmental agreements fo r mutual recognition, foreign certification bodies 
approved by China can carry out CCC certification.  
(viii) Government procurement 
(page 39, paragraph 62)   
China applied for accession to the GPA on 28 D ecember 2007, and its initial offer was circulated 
to parties in January 2008.  Subsequently, it has submitted information on its domestic 
legislation, and held several rounds of consultation s with parties.  It has also provided further 
information on its GPA accession preparations, and the challenges it faces in this regard.  GPA Parties have expressed their willin gness to work with China to fa cilitate its accession process; 
in 2009, China submitted a progress report that was well received by parties.  
Some parties have since expressed concern s in the GPA Committee regarding: (i) recently 
tabled draft Chinese procurement regulations that do not, in their view, move China decisively 
toward GPA compliance; and (ii) China's indi genous innovation initiative, which allegedly 
contains a number of preferential features raising issues vis-à-vis the GPA and other WTO Agreements. 
We would appreciate further clarification from China as follows: WT/TPR/M/230/Add.1 
Page 284  
 
  1. What is the latest status of China's application to accede to the GPA? When will 
China submit its revised market access offer? 
Answer The Chinese government has been tr ying to accelerate the process of acceding to the GPA, and it has 
had active consultations with GPA participan ts. In October 2009 China submitted a roadmap on 
revised offer and proposed that the revised offe r would be submitted in 2010. In April 2010 China 
confirmed that on the basis of the submitted roadmap a strong revised offer would be tabled before the 
meeting of the WTO Committee on Government Proc urement in July, which would include such 
content as adding central procurement entities a nd expanding the coverage of goods, projects and 
service. 
2. What is the basic content of China's indigenous innovation initiative? What is 
the definition of "indigenous innovation"? 
Answer 
Encouraging indigenous innovation of enterprises and building an innovative country are important 
strategies that China adopts to promote scientific development and transformation of the pattern of 
economic development. It also provides new fi elds for cooperation and more development 
opportunities to domestic and international entrepre neurs as well as foreign-invested enterprises in 
China. 
In the recognition of indigenous innovative products, a ll enterprises lawfully established in China are 
treated equally and all manufacturers as legal pers ons are entitled to apply for such accreditation. 
From April 10 to May 10, 2010, the Chinese co mpetent authorities published online the revised 
conditions for recognizing indige nous innovative products, i.e. th e Notice on National Recognition of 
Indigenous Innovative Products 2010 (Draft) for pub lic comments. The revised Notice clarified those 
provisions in the Notice of the previous year which caused misunderstandings among enterprises, 
including the description of indigenous intellectua l rights, the expression concerning initial trademark 
registration and time of application, etc. Curre ntly, the authorities are studying the comments 
collected. China welcomes foreign-invested enterprise s from all countries and regions to participate in 
the process, to increase their invest ment in research, development and innovation, to bring in high-
quality human resources and advanced technologies, and to enhance their cooperation with Chinese 
partners so as to move up to  a new level of development. 
(3) MEASURES DIRECTLY AFFECTING EXPORTS  
(iii) Exports taxes   
(page 43, paragraph 78)   
Although China's government authorities believe that export taxes can help conserve natural 
resources or protect the environment, in it s Report, the WTO Secretariat questions the 
economic effectiveness in achieving these objectives.  
Could China please elaborate further on its ra tionale and opinion concerning this measure? 
Answer 
China's export administration on a few products are for the purpose of protecting environment, 
protecting human, animal or plant life or hea lth, conserving exhaustible natural resources, or 
protecting national security. Such measures do not c onstitute arbitrary discrim ination, or disguised  WT/TPR/M/230/Add.1 
 Page 285 
 
 
  restriction on international trade. Since the issu e concerned is subject to the ongoing WTO dispute 
cases of DS394, 395 and 398, China will provide further comments after the final rulings.  
(4) M EASURES AFFECTING PRODUCTION AND TRADE  
(i) Taxation and tax incentives   (d) Tax incentives  
(pages 51-52, paragraphs 113-116) 
According to the Report, China is focusing on implementing tax incentive measures for high-
tech industries and for SMEs without having undertaken any cost-benefit analysis, which raises 
questions as to their cost-effectiveness and thus  China's fiscal transparency.  The authorities 
maintain that they are gradually enhancing eval uation of tax incentives in order to solve the 
problem. 
Could China please provide information on the possible future direction of its tax incentives 
programmes in terms of their modification and implementation? 
Answer In order to boost the development of high-tech industries and promote technical innovation and 
progress of enterprises, the Enterprise Income Tax Law  implemented since 1 January 2008 offers a 
lower tax rate of 15% to qualified high-tech enterpri ses, just as the tax concessions offered by many 
other countries to high-tech enterprises.  
Also, to give full play of the role of small enterprises in independent innovation and employment, 
with reference to internationally prevailing practice, the new Law offers a lower tax rate of 20% to 
small enterprises. 
These measures are of great importance to the furt her development of the Chinese economy as well as 
the development of small and medium-sized enterpri ses. It will not only bring about direct economic 
effects but also produce indirect social effects in catalyzing industrialization of technical 
achievements and optimizing competitive market envi ronment. Therefore assessment of the measures 
requires comprehensive and long-term perspectives.  
(iv) Competition and consumer protection policy 
(a) Competition policy 
(page 60, paragraph 146)   
The Report states that, "If an organization or ag ency abuses its administrative power to restrict 
competition, its supervisory body is responsibl e for correcting the problem. The Anti-Monopoly 
Enforcement Authority is authorized to re commend actions to the supervisory body…this 
would depend not only on the efficiency of th e Anti-Monopoly Law Enforcement Authority, but 
also on enforcement at the local level."  
It would be appreciated if China could provide further information on the following aspects:  
Other than recommended actions, what other measures would the Anti-Monopoly Enforcement 
Authority adopt against "administrative monopolies"? 
Answer 
Article 51 of the Anti-Monopoly Law contains clear provisions in this respect. Where an 
administrative department or an organization empow ered by a law or administrative regulation to WT/TPR/M/230/Add.1 
Page 286  
 
  administer public affairs abuses its administrative power to eliminate or restrict competition, the 
department at a higher level shall order it to rectif y. The directly liable person(s)-in-charge and other 
directly liable persons shall be given administrativ e sanctions in accordance with law. The authority 
for enforcement of the Anti-Monopoly Law may pu t forward suggestions on handling the matter 
according to law to the relevant department at a higher level. 
How does the Anti-Monopoly Enforcement Author ity enhance AML enforcement at the local 
level? 
Answer According to Article 10.2 of the Anti-Monopoly La w, the anti-monopoly authority designated by the 
State Council may, when needed, authorize the corresponding authorities in the people's governments 
of the provinces, autonomous regions and municipa lities directly under the Central Government to 
take charge of anti-monopoly law enforcement in accordance with this Law.  The three enforcement 
authorities according to their respective mandate s and responsibilities have either generally or 
specifically authorized or entrusted corresponding authorities in the people's governments at the 
provincial level to undertake or participate in the enforcement of the Law  
(v) Intellectual property rights 
(b) Trade marks 
(page 66, paragraph 165)   
As indicated in the Report, parallel imports are still not addressed in legislation on trademarks 
in China.  
Could China please specify how the authorities currently handle this issue? Answer 
The recently revised Trademark Law that has taken effect does not have provisions concerning 
parallel import. 
IV. T
RADE POLICIES BY SECTOR  
(3) E NERGY  
(page 76, paragraph 36)   
Because energy regulatory responsibility in Ch ina was previously divided among several 
government agencies, the Chinese government set up the National Energy Administration 
(NEA) in August 2008, with the intention of building an effective national-level energy institution.  However, it appears that the NEA st ill lacks the authority to effectively coordinate 
the interests of the various energy agencies.   
Could the Chinese government please advise whether it has managed to make any progress 
towards finding a solution to this situation? 
Answer 
National Energy Administration (NEA) was establishe d during the institutional restructuring of the 
State Council in 2008 and has since been perform ing its functions. There have been no other 
institutional changes.  WT/TPR/M/230/Add.1 
 Page 287 
 
 
  (page 77, paragraph 37)   
China has been relaxing its investment regime in the energy sector, although the sector remains 
State-dominated.  In 2005, the State Council i ssued the so-called "36-clause on the non-public 
sector" allowing private companies to invest in  previously restricted sectors dominated by 
SOEs, including the oil and gas industry, but it was not implemented evenly in China, and the State monopoly is a barrier for private competition.   
How does the Chinese government reduce or deal wi th such lack of competition in the oil and 
gas sector.  
Answer 
So far, private enterprises have already gained acce ss to such fields as oil and gas pipelines and oil 
storage and sales. The oil industry is no longer closed  to the private sector. According to current laws 
and regulations, the exploration and developmen t of upstream oil and gas resources require 
qualification of enterprises authorized by the State. 
Moreover, we have heard that a "new 36-clause"  is expected to be announced by the State 
Council in the near future to overcome  barriers to private investments.  
Answer 
The Chinese government promulgated Certain Opinions on Encouraging and Guiding the Healthy 
Development of Private Investment , in order to further widen the areas for private investment. The 
document is available at http://www.gov. cn/ zwgk/2010-05/13/content_1605218.htm. 
(page 78, paragraph 40)   
When the international crude oil price is below US$ 80 per barrel, processed oil products are 
priced at the crude oil price plus "normal" processing profit. 
How does the NDRC determine the "normal" profit?   
Answer 
While the price for processed oil products is set, the "normal" processing profit of crude oil is 
determined in the light of the average cost pr ofit margin level of domestic processing sector. 
Are there any specific procedures and criteria for setting the price?  
Answer In May 2009, NDRC formulated and issued the Administrative Measures for Oil Prices (For Trial 
Implementation ) (FaGaiJiaGe [2009] No. 1198). Price ad justment procedures and criteria for 
processed oil products follow this rule of NDRC. 
Does the above practice mean that when the in ternational crude oil price exceeds US$ 80 per 
barrel, the price of processed oil products is controlled or regulated? WT/TPR/M/230/Add.1 
Page 288  
 
  Answer 
In accordance with the Administrative Measures for Oil Prices (For Trial Implementation ) 
(FaGaiJiaGe [2009] No. 1198), when the internationa l crude oil price exceeds US$ 80 per barrel, the 
processing profit margin will be deducted to calcula te the price adjustment level of processed oil 
products in order to ensure the balance of the interests of both producers and consumers and to 
maintain steady operation of the national economy.  
China's oil price reform aims at an ultimate formation of the price by the market. Due to the present 
inadequate competition in the oil market and also the weak ability of the society to bear, the price 
reform of processed oil products will remain a gradual process. 
Report by the Government of China 
III. T
RADE DEVELOPMENT AND TRADE POLICIES  
(2) P ROMOTING TRADE AND INVESTMENT  
(v) Continuing to implement the Going Global Strategy  (pages 19-20, paragraphs 75-82)   
Regarding China's overseas investment, as indi cated in the Report, outward investment 
activities are governed by the "Rules on Administration of Overseas Investment" which came into force on 1 May 2009. These Rules, however,  regulate only investment in non-financial 
sectors.  
 1. How are the outbound investment acti vities in financial sectors supervised?  
 2. Do they fall under the authority of  provincial governments or the central 
government?  
 3. What laws and regulations apply? 
Answer (questions (1), (2) and (3)) The regulatory authorities for outbound investment  activities in financial sectors include China 
Banking Regulatory Commission (CBRC), China Securities Regulatory Commission (CSRC), China 
Insurance Regulatory Commission (CIRC) and State Administration of Foreign Exchange (SAFE). 
The applicable laws and regulations include Law on Regulation of and Supervision over the Banking 
Industry , Insurance Law , Securities Law , Regulations on Supervision and Administration of Securities 
Firms , Regulations on Foreign Exchange Control , Measures on Administration of Chinese Financial 
Institution Abroad , etc.. 
Outward direct investment by Chinese enterprises have been encouraged recently.  
 4. What is the government's attitude towards their re-investment via a third 
country?  
 5. What laws and regulations govern in this situation?  
 6. Are there any laws and/or regulatio ns governing overseas investment made by 
individuals (i.e. natural persons)?  WT/TPR/M/230/Add.1 
 Page 289 
 
 
  Answer (questions (4), (5) and (6)) 
Rules on Administration of Overseas Investment  (MOFCOM Decree No.5 of 2009) is the major rule 
directly governing outbound investment. Other regula tions and rules may also be relevant, including 
for example Regulations on Foreign Exchange Control . On re-investment via a third country/region, 
China currently does not have special requirement as long as the investors follow laws and regulations 
of both the third country/region and also the d estination country/region. Overseas investment by 
individuals is basically by way of Qualified Domest ic Institutional Investors (QDII). Please refer to 
the Trial Measures for Administration of Securities Investment outside China by Qualified Domestic 
Institutional Investors  (CSRC Decree No.46) for details. 
The State Council officially released the "Further Improving the Work of Using Foreign Investment" 
in April 2010, in which plans for revising the "C atalogue for the Guidance of Foreign Investment 
Industries" are mentioned.   
 7. What are the principles that will apply in the forthcoming revision?  
 8. When will the revised Catalogue be completed? 
Answer (questions (7) and (8)) 
Certain Opinions of the State Council on Furt her Improving the Use of Foreign Capital  suggests that 
China should further enlarge open sectors, encour age foreign investment to go to high-end 
manufacturing, high-tech industries, modern service industries, new energy and energy-saving and 
environmental protection industries, and encourage foreign banks to set up offices and start business 
in central and western regions in accordance with  economic development and industrial adjustment 
needs. 
According to the Certain Opinions of the State Council on Further Improving the Use of Foreign 
Capital , revision of the Catalogue for the Guidance of Industries for Foreign Investment  has just 
begun, and specific work plan and timetable are still under discussion and to be decided. 
JAPAN – Part 1  
Report by the Secretariat (WT/TPR/S/230) 
II T RADE POLICY REGIME : FRAMEWORK AND OBJECTIVES  
(5) T RADE AGREEMENTS AND ARRANGEMENTS  
(iv) Unilateral preferences (Question 1: Page 20, paragraph 44) 
(1) China offers special preference tariffs to imports of certain goods originating from 
41 LDCs.  Please provide us (i) the reason why not all 49 LDCs identified by the United Nations 
resolution are included, (ii) more details on preference tariffs (Are both duty-free and quota-
free market access implemented by the LDC progra mme or not, etc.) and (iii) products not 
covered by the LDC programme and the reaso n why those products are not covered.  
Answer 
China will grant duty-free treatment for 95% of all China's tariff lines to all LDCs having diplomatic 
relations with China. The product coverage is the same for all these LDCs. China plans to implement 
duty-free treatment for LDCs with diplomatic relations  with China in respect of 60% of China's total WT/TPR/M/230/Add.1 
Page 290  
 
  tariff lines by the end of 2010, and will expand the tr eatment to cover 95% of China's total tariff lines 
in the next few years. 
China has included most agricultural and textile produc ts that are of export interests to LDCs into the 
95% duty-free tariff lines list, such as sesame and co ffee etc. Only those products whose tariffs could 
not be reduced individually according to China' s Accession Schedule and a few agricultural and 
industrial products have not been included in the zero tariff treatment. 
(2) Please provide us the scheme, if any, of suspension of preferential tariff treatment, 
triggered in cases such as preferen tial imports increasing rapidly. 
Answer 
After implementation of the duty-free scheme for LD Cs, according to the agreement between China 
and the LDC concerned, where one of the zero tari ff products is being imported into China in such 
increased quantities as to cause or thr eaten to cause serious injury to the domestic industry that 
produces like or directly competitive products of Chin a, the Chinese Government shall have the right 
to suspend the special preferential tariff treatment  of the product in question and will enter into 
consultations with the LDC concerned with a vi ew to seeking mutually satisfactory solution. 
(3) Regarding the Generalized System of Prefer ences (GSP), no mention seems to have been 
made in the Secretariat report. Please show us  whether China offers GSP to imports of goods 
originating from developing countries except LDCs or not. If so, Japan would like to know more 
details on GSP (we need information to the sa me extent as that provided in the Secretariat 
report about the tariff preferences for LDCs or that which would be provided by China's answers to our questions about the same issue.).  
Answer 
China does not offer GSP at present. 
III. T
RADE POLICIES AND PRACTICES BY MEASURE  
(2) Measures Directly Affecting Imports (ii) Tariffs  
(Question 2: Page 26, Paragraph 16) 
Please show us the data about the percentage of the total amount of duty collected per total 
value of imports (total amount of duty collected divided by total value of imports) in the past 
10 years. 
Answer 
China provided data on the total amount of duty co llected as well as total value of imports in the 
previous two TPRs in 2006 and 2008. Japan may draw results after calculation of those data. 
(Question 3: Page 29, Paragraph 19 - 21) 
(1) Regarding the word "standard applied MFN ta riff ", please show us which tariff rate is 
indicated by the word: Is it the WTO bound rate , or the General rate (based on China's 
applicable domestic laws, if any or a duty rate  which is lower between the WTO bound rate and 
the General rate?   WT/TPR/M/230/Add.1 
 Page 291 
 
 
  (2) As for the question above, if the General rate is set, please provide us China's viewpoint 
or way of thinking on setting the General rate . Are tariff lines different from products applied 
to the WTO bound rate? If so, please provi de the reason why there is a difference.  
Answer (for questions (1) and (2)) 
As China understands it, the "standa rd applied MFN tariff rates" men tioned in the Secretariat Report 
refers to the "MFN tariff rates" published by Ch ina annually, which are no higher than the "bound 
rates" set out in the Goods Schedule in China's WTO Accession Protocol. 
"General rates" refers to the import tariff rates a pplicable to imported goods from countries or regions 
other than those applying MFN tariff rates, agreemen t tariff rates, and special preferential tariff rates, 
as well as imported goods of which origins are uniden tified. The bound rates and the general rates are 
not comparable. 
(3) Regarding 439 interim tariffs which China adopted, please explain the (i)laws and 
regulations by which interim tariffs are set, (ii)mo re details of interim tariffs (such as the date 
when they were set, covered products, the reaso n why they are set, tariff rate (including the 
difference from MFN rate) and the applicable period) , (iii)how often and how the interim 
tariffs are reviewed, and (iv) if they have b een ever reviewed and the ta riff rate has changed, 
please provide examples and the reason (including  whether the interim tariff was abolished or 
not).  
Answer 
(1) In accordance with the Regulations on Import and Export Duties , interim tariffs may be 
applied to imported goods within a certain period.  
(2) Please refer to the 2010 Import and Export Tariffs  of the People's Republic of China for more 
details on interim tariffs.  
(3) The Customs Tariff Commission of the State Council is responsible for making adjustments 
to the interim tariffs.  
(4) In line with the national economic development situation, the Customs Tariff Commission of 
the State Council may put forth adjustment suggestions  of interim tariff rates, applicable period, etc 
and implement such adjustments upon approval by the State Council. For example, China implemented interim import tariff rates on neem oil and its abstracted products (HS 15159020) from 
2006 to 2008. These products were no longer subject to interim import tariff rates but the MFN tariff 
rates from 2009 in line with the s ituation of economic development. 
(vii) Standards and other technical requirements  
(Question 4: Page 36, Paragraph 47) 
(1) Concerning the acceptance of the results of certification, according to China's answer on 
the TBT committee (G/TBT/M/48 Paragraph 180), the Chinese government can accept the CoC 
(Certificate of Conformity) of the CCC (China Co mpulsory Certification) system issued by 
foreign based certification bodies if the Ch inese government concluded a MRA (Mutual 
Recognition Agreement) with a Foreign Government. On the other hand, according to 
Article 13 of the Regulations of the People's Republic of China on Certification and Accreditation, "Foreign certification bodies sha ll not be engaged in certification activities in 
China". WT/TPR/M/230/Add.1 
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  (2) We would like to have confirmed the correlation between the MRA and the Regulation. 
In other words, if Japan has an MRA with Ch ina, are Japanese certification bodies exempted 
from the applications of this provision? If not, what does Japan need to do in order for China to 
accept the CoC (Certificate of Conformity) of the CCC (China Compulsory Certification) of 
foreign certification bodies? Please kindly clarify this. 
Answer (for questions (1) and (2)) 
The understanding by Japan on Article 13 of the Regulations on Certification and Accreditation  is not 
correct.  
There are two channels under the current regula tion for foreign certification bodies to perform 
conformity assessment of China. First, China recognizes the test results of laboratories under the 
IECE/CB Scheme. Second, foreign certification bodies could acquire qualification for the CCC 
system through inter-governmental agreements. Ch ina is open to discuss mutual recognition and 
cooperation with foreign counterparts based on th e principles laid down in the TBT Agreement. 
(Question 5: Page 38, Paragraph 56 - 57) 
With regard to the National Indigenous I nnovation Products Accreditation system, China 
explained in its notification for 2010 that Foreign companies who would possess intellectual 
property rights or the right to use in accord ance with the Chinese laws, would be treated 
equally with domestic companies which would posses such rights.  This would mean that, even if 
products is not innovated within the territory of  China, such products could also obtain the 
qualification for participating in a tender proced ure under the same condition as those products 
which have been developed within the territory of China, as long as certain conditions are 
satisfied.  Even if the products have intellect ual property rights and trademarks which are duly 
registered in China (even if they are not necessarily  registered first in China), if such products 
are required to obtain the CCC, is this certific ate a condition for participating in a tender 
procedure? 
Answer Encouraging indigenous innovation of enterprises and building an innovative country are important 
strategies that China adopts to promote scientific development and transformation of the pattern of 
economic development. It also provides new fields for cooperation and more development 
opportunities to domestic and international entrepre neurs as well as foreign-invested enterprises in 
China. 
In the recognition of indigenous innovative products, a ll enterprises lawfully established in China are 
treated equally and all manufacturers as legal pers ons are entitled to apply for such accreditation. 
From April 10 to May 10, 2010, the Chinese co mpetent authorities published online the revised 
conditions for recognizing indige nous innovative products, i.e. th e Notice on National Recognition of 
Indigenous Innovative Products 2010 (Draft) for pub lic comments. The revised Notice clarified those 
provisions in the Notice of the previous year which caused misunderstandings among enterprises, 
including the description of indigenous intellectua l rights, the expression concerning initial trademark 
registration and time of application, etc. Curre ntly, the authorities are studying the comments 
collected. China welcomes foreign-invested enterprise s from all countries and regions to participate in 
the process, to increase their invest ment in research, development and innovation, to bring in high-
quality human resources and advanced technologies, and to enhance their cooperation with Chinese 
partners so as to move up to  a new level of development.  WT/TPR/M/230/Add.1 
 Page 293 
 
 
  (viii) Government procurement  
(Question 6: Page 39, Paragraph 62)  (1) What kind of procedures and steps are n ecessary to include sub-central government 
entities in China's coverage under the Annex 2 of the Appendix 1 of the GPA?  
Answer Inclusion of entities of a local government into GPA Appendix I is subject to approval by the 
corresponding local People's Congress. For that purpose, the local government must have a comprehensive knowledge on the GPA and conduct an a ppraisal on the pros and cons of joining the 
GPA. With reference to such appr aisal the local People's Congress would be in the position to decide 
whether to approve the inclusion or not. 
(2) In negotiations for GPA accession, China expl ained that state-owned enterprises (SOEs) 
should not be covered by the GPA and a refor m process is being conducted to separate SOEs 
from the central government. What is the current status of the SOEs' reform? Is it correct that, when SOEs purchase some import goods, they should get permission from the government?  
Answer The Government Procurement Law  is not applicable to the procurement by SOEs.  
With regard to SOE reform, the State-owned A ssets Supervision and Administration Commission of 
the State Council (SASAC) will reduce the number of SOEs under SASAC to 80-100 by the end 
of 2010. The measures include promoting the merger  and acquisition of large SOEs, pushing forward 
the restructuring between applied technology r esearch institutes and relevant manufacturing 
enterprises, and launching insolvency proceedings for some enterprises. 
(3) In acceding to the GPA, does China have an  intention of offering a broad coverage of 
services, including construction services?  
Answer 
The road map submitted by China in 2009 proposed to  enlarge the scope of services and projects to be 
included in China's revised offer. 
The services sectors in China are still at an earl y development stage and few projects have been 
subject to government procurement administration.  China will include in Appendix 1 of the GPA 
those services projects whose scope and content are b asically identical to relevant CPC classifications 
in the WTO based on experience in government procurement practice. 
With regard to construction projects, China w ill mainly include into Appendix 1 of the GPA 
construction projects in the CPC classification th e coverage and content of which are basically 
consistent with Chinese construction project management and practice. 
(Question 7: Page 40 - 41, Paragraph 63) 
Among the rules concerning Chinese government  procurement, China has a compulsory 
certification scheme for information security pro ducts. This scheme is not clearly consistent 
with global norms and approaches regarding the certification of IT security products (Common 
Criteria Recognition Arrangement), namely  CCRA. Some countries including Japan are WT/TPR/M/230/Add.1 
Page 294  
 
  interested in how China's scheme is to be implemented, especially the implementation 
regulations. The details of such implementati on regulations have not yet been disclosed. 
Notably, China has not made it clear how sensitive  information including the IP of the products 
will be protected within the certification/evalua tion process. While urging China to carefully 
consider whether the scheme can be implemented appropriately given the current situation and 
the views expressed by several countries, Japan would like to request China to describe the 
contents of the intended implementation regulatio ns and the schedule of the implementation of 
the scheme.  
Answer 
Information security is a common problem faced by the world and members have adopted various 
measures to address this problem. 
China notified the draft rules on 13 information secur ity products subject to compulsory certification 
to WTO (G/TBT/N/CHN/278-290) in August 2007 and made an announcement in January 2008 to 
fulfill its transparency obligations under the TBT Ag reement. In order to realize the goal of legal 
supervision and to reduce the effect of the compulsory certification on trade to the minimum extent, 
Chinese government has taken a series of specific measu res, for example, to base the standards of the 
compulsory certification on relevant international st andards, to listen to and take into consideration 
comments and suggestions of members, industrial orga nizations and enterprises, to adjust the scope of 
the compulsory certification scheme to those covered by the Government Procurement Law  and to 
postpone the implementation of the scheme by one year to 1 May 2010. The scheme has just been implemented. 
(Question 8: Page 41, Paragraph 68) Japan would like to know whether any challenge pr ocedures have been used so far, in which 
suppliers unfairly excluded from procurement processes or treated in a discriminatory way 
have been able to complain to the procuring agency, appeal to the Government Procurement 
Division of the Ministry of Finance, or subsequent ly file a complaint with a court. If any, please 
explain how the complaints have been treated by those entities? 
Answer 
In accordance with the Government Procurement Law , challenge procedures for suppliers include 
inquiry, question, complaint, administrative recons ideration and administrative litigation. Suppliers 
may only apply for administrative reconsideration or lodge an administrative litigation under the 
circumstances that the Ministry of  Finance fails to respond to their complaints within the specified 
time limit or that they are not satisfied with the re plies to their complaints. Please refer to Articles 51 
to 58 of the Government Procurement Law  for details. 
(Question 9: Page 41 - 42, Paragraph 70) 
When will the final Implementation Regulati ons of the Government Procurement Law be 
published? In February 2010, the government of  Japan and Japanese industries submitted some 
comments on the draft Implementation Regula tions and asked that the Regulations should 
conform to the WTO Agreement on Government Procurement. We hope China will take due 
account of our comments when finalis ing their implementation regulations.  WT/TPR/M/230/Add.1 
 Page 295 
 
 
  Answer 
The legislative Affairs Office of the State Council is  now working on the draft of the regulation with 
reference to the opinions of vari ous organizations and individuals. 
(3) M EASURES DIRECTLY AFFECTING EXPORTS  
(iii) Export taxes 
(Question 10: Page 42 – 43, Paragraph 76 - 77) 
(1) While China is committed to eliminating expo rt taxes for all items except for those listed 
in Annex 6 to its Protocol of the Accession, Ch ina levies export taxes on many types of non-
ferrous metals not listed in the Annex. Please ex plain the policy objectives of these export taxes 
and how China justifies them under the GATT. 
(2) Chemical fertilizers and their raw materials are not listed in Annex 6 to China's 
Protocol of the Accession as products subject to  export duty. How does China justify the export 
duty in a consistent manner with China's commit ment to the elimination of export duty upon 
accession to the WTO, Article 11.3?  
Answer (for questions (1) and (2)) China's export administration on a few products ar e for the purpose of protecting environment, 
protecting human, animal or plant life or hea lth, conserving exhaustible natural resources, or 
protecting national security. Such measures do not c onstitute arbitrary discrimination, or disguised 
restriction on international trade, and are fully c onsistent with WTO rules. Since the issue concerned 
is subject to the ongoing WTO dispute cases of DS394, 395 and 398, China will provide further 
comments after the final rulings.  
(iv) Export Prohibitions, restrictions, and licensing 
(Page 45 -46, Paragraph 85 - 86) 
Paragraphs 85 and 86 of the Secretariat's report states that China applies export quotas on and 
requires licensing for some agricultural products . Could China provide us with the basis for 
those measures and is it in conformity with Article XI of GATT. 
Answer 
China's export administration on a few products ar e for the purpose of protecting environment, 
protecting human, animal or plant life or hea lth, conserving exhaustible natural resources, or 
protecting national security. Such measures do not c onstitute arbitrary discrimination, or disguised 
restriction on international trade, and are fully c onsistent with WTO rules. Since the issue concerned 
is subject to the ongoing WTO dispute cases of DS394, 395 and 398, China will provide further 
comments after the final rulings.  
(Question 11: Page 45 -46, Paragraph 85 and TableIII.3) 
Paragraphs 85 and TableIII.3 of the report states that sawn timber is one of the products on 
which export quotas are applied. Could China provide us with detailed information on the 
restrictions on sawn timber and the reason  why China maintains such a restriction? WT/TPR/M/230/Add.1 
Page 296  
 
  Answer 
Sawn timber export is subject to quota in China, including 22 products at 8-digit HS.  44061000 44071010 44071020 44071030 44071040 44071090
 44072100 44072200 44072500 44072600 44072700 44072800 44072910 44072990 44079100 44079200 44079300 44079400
 44079500 44079910 44079980 44079990 
(Question 12: Page 45 - 46, Paragraph 86) 
(1) China implements an export licensing system on various kinds of non-ferrous metals: 
rare-earths, tungsten, antimony, tin, silver,  magnesium, bauxite, indium, molybdenum, and 
zinc. Please explain how China justifies its expo rt control through export licensing on these non-
ferrous metals under the GATT. 
(2) Are there restrictions in China on domest ic production and/or consumption of these 
metals? Japan would like to know the fa cts with specific quantitative data. 
Answer (for questions (1) and (2)) 
China's export administration on a few products ar e for the purpose of protecting environment, 
protecting human, animal or plant life or hea lth, conserving exhaustible natural resources, or 
protecting national security. Such measures do not c onstitute arbitrary discrimination, or disguised 
restriction on international trade, and are fully c onsistent with WTO rules. Since the issue concerned 
is subject to the ongoing WTO dispute cases of DS394, 395 and 398, China will provide further 
comments after the final rulings.  
(4) M
EASURES AFFECTING PRODUCTION AND TRADE  
(v) Intellectual property rights  
(Question 13: Page 62, Paragraph 152) 
According to the report, China is now preparing to revise the Trademark, Copyright and the 
Anti-Unfair Competition Laws. Please give schedul e for and contents of the revision of those 
laws.  
Answer 
For revision of the Trademark Law , China will go ahead in a manner consistent with the transparency 
obligation of China's WTO accession commitments . There is no specific schedule at present. 
In the revision, the following measures against tr ademark right infringements will be taken into 
consideration: increasing the types of acts of tradem ark right infringements; strengthening the efforts 
of investigation and punishment of the administ rative authorities; adding provisions on heavier 
punishment on repeated trademark right infringements; and increasing the amount of statutory civil 
compensation to the infringed from 500,000 Yuan to 1 million Yuan. 
In addition, Article 6 of the Regulations for the Implemen tation of the Trademark Law  concerning 
geographical indications is further clarified in the draft revision of the Trademark Law , i.e., where a 
geographic indication is to obtain the exclusive right  of trademark, it should apply for registration as a 
certification mark, or a collective mark.  WT/TPR/M/230/Add.1 
 Page 297 
 
 
  The revision of the Copyright Law  has completed. According to the Decision adopted at the 13th 
Session of the Standing Committee of the 11th National People's Congress on 26 February 2010, the 
Copyright Law is revised as follows. Firstly, Article 4 is  revised as that "Copyright owners, in 
exercising their copyright, shall not violate the Constitution or laws or infringe upon the public 
interests. The publication and dissemination of wo rks shall be subject to the administration and 
supervision of the State." Secondly, a provi sion is added in Article 26 of the revised Copyright Law  
that "In case of pledge of copyright, the pledger and the pledgee shall register the pledge with the 
copyright administration under the State Council. " For details, please see http://www.gov.cn/flfg/ 
2010-02/26/content_1544458.htm. 
As for revision of the Law against Unfair Competition , China will also go ahead in a manner 
consistent with the transparency obligation unde r China's WTO accession commitments. Revision to 
the Law against Unfair Competition will firstly be based on the experience drawn from the legislation 
and law-enforcement of the 1993 Law against Unfair Competition  and from international legislation 
of the similar nature; secondly, the content concer ning IPR protection would be added to strengthen 
the efforts of IPR protection; thirdly, the provisions about imposing a ban on commercial bribery 
would be identified and specified and the punish ment for committing commercial bribery would be 
strengthened; fourthly, the revision aims to make the Law against Unfair Competition  to be in 
consistency with the  Anti-Monopoly Law .  
(Question 14: Page 62, Paragraph 153) 
(1) Are there any concrete statistics that show that "the number of intellectual property-
related criminal cases has increased considerably" as stated in the report? In addition, please 
give the ratio of criminal transfers and criminal charges to cases which can be regarded as 
intellectual property-related crimes according to the interpretation promulgated by the Supreme People's Court and the Supreme People's Procuratorate.  
(2) With regard to the section of the Secretariat's report that says "Chinese governments 
at different levels conduct special operations such as  campaigns, targeting on specific areas of IP 
protection", please clarify the following two points: 
 (a) Where are these campaigns conducted?   (b) Please provide details of the ways local enforcement authorities are advised, if 
any. 
Answer (for questions (1) and (2)) 
China is committed to further improving enforcemen t of intellectual property rights protection in 
China. In April 2007, SIPO issued the Guiding Opinions on Strengthening IPR Protection and 
Administrative Enforcement . In April 2008, SIPO and the Ministry of Public Security jointly issued 
the Notice on Building Coordination Mechanism in a Common Effort to Strengthen IPR Protection . 
1. The protection of patent Starting from February 2008 SIPO has conducted the nationwide "Operation Thunderstorm" against 
IPR infringement and fraud, and "Operati on Sky Net" targeting patent fraud.  
2. Copyright protection In 2008 National Copyright Administration (NCAC) issued the Notice on Copyright Administrative 
Enforcement and Social Regulation  for 2008, and launched nationwide Special Operation against WT/TPR/M/230/Add.1 
Page 298  
 
  Illegally Pre-installed Computer Software as we ll as the Action for Combating Online Infringement 
and Piracy and conducted special enforcement operations. 
3. Trademark protection State Administration for Industry and Commerce (S AIC) has long been engaged in the special 
enforcement operation against c ounterfeiting and misleading while dealing with major unfair 
competition cases. In 2007 SAIC launched a special campaign combating misleading branding to 
crack down on malicious branding practices that mislead and confuse consumers. In 2007 industry 
and commerce authorities at all levels investigated  and handled 50,318 trademark violation cases, 
including 10,320 cases concerning foreign trademarks . In 2008 industry and commerce authorities at 
all levels dealt with 56,634 trademark viol ation cases, including 10,965 cases concerning overseas 
right holders. 
4. Customs IPR protection The Customs authorities have continued to effectiv ely combat infringement activities at the borders. 
The Customs continue to carry out special enforc ement operations with tightened regulation for key 
routes and commodities. Since 2007, the Customs have launched campaigns like the Dragon Boat 
Action targeting export of infringing goods by maki ng use of European and American ship or air 
routes and the Storm Action aimed at the import of counterfeit drugs. The Customs continue to 
cement its cooperation with overseas counterparts in IPR enforcement. 
5. Police enforcement In 2008, public security authorities across the country  filed 1919 IPR criminal cases and solved 1455 
cases, involving 1.65 billion RMB. Ministry of Public Security (MPS) actively explores the 
establishment of cooperation mechanism between th e police and the business community for criminal 
protection of IPR and has established a regular dialogue system for domestic and overseas right holders so that they can provide legal, specializ ed and technical support to each other. Moreover, 
MPS has reinforced bilateral and multilateral enfo rcement cooperation with overseas counterparts in 
jointly combating IPR crimes.  
6. Justice 
China's public prosecution authorities have fu rther improved the mechanism integrating 
administrative enforcement and criminal justice. Public prosecution authorities have worked closely 
with administrative enforcement departments and approved arrest and prosecuted suspects for IPR 
crimes while dutifully performing legal supervis ion, stepping up the review of the Decision on 
Administrative Penalty for IPR cases issued by th e administrative bodies and making suggestions for 
the prompt referral of criminal suspects to public security organs.  
In recent years, right holders' confidence in IPR tr ial is increasing in China. In 2007, local courts 
nationwide accepted and ruled on 17 ,877 and 17,953 civil cases of first instance while the figures 
for 2008 were 24,406 and 23,518. In terms of criminal trial, since the Supreme People's Court and the Supreme People's Procuratorate jointly issued judici al interpretations for handling IPR criminals, the 
people's courts have been accepting and ruling on more  cases of that category. In 2008, local courts 
nationwide closed 3,326 IPR criminal cases of fi rst instance compared to 2,684 of 2007. On 
10 March 2006, the Supreme People's Court laun ched the website for IPR ruling documents 
(http://www.ipr.chinacourt.org), which publishes the effective IPR rulin g documents of courts at all 
levels. 
  WT/TPR/M/230/Add.1 
 Page 299 
 
 
  (Question 15: Page 62, Paragraph 154) 
As we understand that "IPR protec tion support centres" were set up in addition to "complaint 
centres", please explain the difference between the former's roles and the latter's roles, and the 
present degree of the installation of "IPR protection support centres". 
Answer IPR protection support centers (or IPR assistance cen ters), in addition to performing the roles of IPR 
complaint centers, also provide IPR protection s upport services, inter alia offering references for 
determination of IPR infringements, providing  advisory opinions on compensation estimations, 
organizing discussions and demonstrations on IPR cases etc. By the end of 2009, the State Intellectual 
Property Office (SIPO) has approved the establis hment of 61 IPR protection support centers. 
(Question 16: Page 63, BOX III) (1) In what kind of cases can the enforcement agencies begin administrative actions on their 
"own initiative" to protect IPR as described in the report? How does the government prohibit these agencies from using their authority arbitrarily? 
Answer According to Article 60 of the Patent Law , a local intellectual property office will accept a patent 
infringement case only at the request of the patent ee. This differs from trademark infringement and 
copyright infringement, which can be investigated  and enforced by law-enforcement authorities on 
their own initiative. In 2009, intellectual prope rty offices in China totally accepted 937 cases related 
to patent infringements and disputes.  
In 2009, local administrations for industry and co mmerce handled 51,044 cases of various trademark 
violations, which included 10,461  foreign-related trademark cases. Among all the cases, 37,824 were 
enforced on their own initiative, accounting for 74.1% of the total. 
For copyright administrative enforcement, in 20 09, China launched the fifth nationwide campaign 
against internet infringement and piracy, and 541 cases related to internet infringement were dealt 
with. Statistical data on copyright enforcem ent are also available at www.ncac.gov.cn/cms/ 
html/205/1973/list-1.htm. 
For IPR border enforcement, in 2009, Customs authorities tracked down an d seized IPR-infringing 
export goods worth of over RMB 450 million. As for specific measures taken, firstly, Customs 
authorities carried out enforcement actions on thei r own initiative to protect intellectual property 
rights in accordance with their mandate. In 2009, th e value of infringing goods detained by China 
Customs on their own initiative reached RMB 430 milli on, accounting for 94.3% of the total value of 
infringing goods seized. Secondly, China Customs t ook a series of special actions in key areas and 
routes against border infringements such as the "dragon boat action" taken against the export of infringing goods by making use of European and Am erican ship or air routes from the end of 2007 to 
the beginning of 2008, and the special action fo r IPR protection in post and express mail June to 
December 2009. China Customs also  attach great importance to law enforcement cooperation with 
other countries and regions. China has signed docum ents relating to IPR protection cooperation with 
the USA, EU and also among Japan, South Korea a nd itself. Effective cooperation is underway in 
information exchange, enforcement experience sharin g, and data interchange in case statistics etc. 
(2) Please provide information regarding co-op eration such as information sharing about 
an IP criminal, among local enforcement authorit ies such as the Customs, AIC, TSB and so on. WT/TPR/M/230/Add.1 
Page 300  
 
  Answer 
Please refer to the answers to Q14 and Q16. 
(3) Please provide information of the state of progress of the IP criminal DB which is under 
construction at the Ministry of Commerce in  order to identify subsequent offenses. 
Answer We are not clear about the information source of Jap an concerning the database, but there is no such 
an IP criminal database being constructed by the Ministry of Commerce.  
(Question 17: Page 63 - 64, Box III 2. and Table III 7) 
Regarding administrative actions, please provide the number of the actions on request by the IP right 
holder or by the third party. And we also would like to know the number of the actions by 
administrative enforcement authorities such as SA IC, TSB, SIPO, and Customs respectively which 
were taken on their own initiatives. 
Answer Please refer to the answers to Q14 and Q16.  
(Question 18: Page 65, Paragraph 160) 
(1) According to Article 5 of the revised Patent Law and Article 65 of its Implementing 
Regulation, it is stipulated that the application for a patent shall be refused and the patent be invalidated respectively in the case that geneti c resources, which are actually used in the 
invention, are obtained in non-compliance with  the relevant Chinese laws and regulations. 
Please provide the names of all such applicable laws and regulations.  
Answer Relevant laws and regulations re fer to those concerning the admini stration of genetic resources. The 
Measures for Examination and Approval of Entry and Exit and Foreign Cooperative Research and 
Utilization of Livestock and Poultry Genetic Resources  which was promulgated by the State Council 
on 28 August 2008 and came into effect  on 1 October 2008 is an example. 
(2) As for Section II, Chapter 10, Article 9.5.3 of the "Guidelines of Examination for 
Article 26.5 of the revised Patent Law", please explain in detail what kind of inventions are 
identified by a patent examiner as inventions  which "depend on" genetic resources, at both 
preliminary and substantive examination.  
Answer 
According to Article 26 of the Regulations for Implementation of the Patent Law , the invention that is 
completed by resorting to the genetic resources refers to an invention that is completed by making use 
of the genetic functions of the genetic resources. Therefore, all inventions the completion of which 
has made use of the genetic functions of the genetic resources shall be regarded as inventions that are 
completed by depending on genetic resources at both stages of preliminary and substantive 
examinations.   WT/TPR/M/230/Add.1 
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  (Question 19: Page 66, Paragraph 163) 
Please let us know what kind of actions have been  taken lately or are planned for the future 
with regard to strengthening the penalty for trademark infringements ? 
Answer 
Please refer to the answers to Q14 and Q16. (Question 20: Page 66, Paragraph 164) (1) Are applicants given the opportunity to ma ke observations or corrections to the office 
rejecting an application before they appeal to the Trademark Review and Adjudication Board? 
Answer 
According to the stipulations in the current Trademark Law , when the trademark application is 
rejected or partially rejected, the applicant has no opportunity to make observations or corrections to 
the trademark authority. 
(2) Japan recognizes that an applicant who disagrees with the examiner's decision can 
appeal to the Trademark Review and Adjudica tion Board within 15 days. We are concerned 
that 15 day-period is too short particularly for foreign users. Do you have any plans to extend 
it? 
Answer 
In this amendment to the Trademark Law , it is proposed that the period be extended to 30 days.  
(3) When there is opposition to a trademar k registration being examined, what kinds of 
opportunities are given to the applicant to re but the opposition in the course of trial? 
Answer In accordance with Article 22 of the  Regulations for the Implementation of the Trademark Law , the 
applicant may make written reply in response to the reasons submitted by the opponent. 
(4) In the examination regarding an appeal for the cancellation of a trademark registration, 
what kinds of opportunities are given to the righ t holder to answer the appeal for cancellation? 
Furthermore, can the claimer make a countera rgument against the right holder's answer? 
Answer 
The Trademark Review and Adjudication Board w ill send the proofs and evidences provided by the 
claimer within the prescribed period to the tradem ark right holder (the respondent), and ask the latter 
to cross examine within the specified period. The parties are obliged to present evidences to prove 
both the facts based on which the request for cancella tion is filed, and the facts based on which the 
right holder rebuts the request for cancellation. Th e Trademark Review and Adjudication Board will 
review the facts and reasons of bot h the appeal and rebuttal and rule. WT/TPR/M/230/Add.1 
Page 302  
 
  (Question 21: Page 67, Paragraph 170 - 172) 
According to the report GIs can be registered with the Trademark Office from 2003, AQSIQ 
from 2005, and the Ministry of Agriculture from 2008. Are there any differences in the legal effects among GIs registered with each agency? 
The report also says that GIs registered with the State Trademark Office are protected in the 
same way as other trademarks, and says that they  can profit from such systems and that they 
can be protected for ten years and renewable ev ery ten years, and are registered with AQSIQ 
and the Ministry of Agriculture and are protect ed permanently. Is it possible to claim for a 
withdrawal of a GI protection registered with  these agencies if their GI does not fulfill the 
requirement of Article 22.1 of TRIPS Agreement in the future? 
Answer 
The geographical indication protection is carried ou t by the State Administration for Industry and 
Commerce (SAIC), the Ministry of Agriculture, and General Administration of Quality Supervision, 
Inspection and Quarantine (AQSIQ). They differ from e ach other in respect of legal basis, protection 
means and scope, remedies, division of duties and work focuses. The SAIC protects geographical 
indications by applying collective trademark and ce rtification trademark registration pursuant to the 
Trademark Law. Corresponding remedies for ge ographical indication infringement include 
administrative, civil and criminal ones. The Ministry  of Agriculture has registration administration for 
geographical indications of agricultural products based on administrative rules formulated in accordance with Law on Quality Security of Agricult ural Products. The focus of the protection is on 
geographical indication resources of agricultural products, product quality and traditional farming 
culture. AQSIQ's protection of geographical i ndication focuses on processing, which is based on 
administrative rules formulated in accordance with Product Quality Law. 
(Question 22: Page 67, Paragraph 175) 
According to the report, no "non-voluntary" licen ses have been issued so far in China. Please 
give the number of applications and the reasons for their rejection. 
Answer 
By 20 May 2010, China has not received any "non-vol untary" license application on layout design of 
integrated circuit.  
IV. T
RADE POLICIES BY SECTOR  
(2) A GRICULTURE  
(ii) Policy objectives and administration 
(Question 23: Page 71, Paragraph 11) 
Paragraph 11 of the report states that the proporti on of support is particularly high for cotton, 
sugar and maize. Could China provide AMS data for those products since 2005? Please provide data of the value of the production of those pro ducts to show that those AMS are within the de 
minimis level. 
Answer 
The Chinese government has notified the WTO its agri cultural domestic support  data for 2002-2004. 
The AMS, both product-specific and non product-specific, are within China's de minimis  limits i.e.  WT/TPR/M/230/Add.1 
 Page 303 
 
 
  8.5%. Besides, according to our estimation based on th e data available, the AMS levels in recent years 
did not exceed the above limit. 
(iii) Policy instruments 
(Question 24: Page 73 – 74, Paragraph 23) 
Japan understands that China notified its dome stic support data from 1999 to 2004 to the 
Committee on Agriculture. When will China submit  its domestic support notification for the 
years since 2005? Will China provide information on the tendency changes in AMS since 2005? 
Answer 
China has recently submitted to the WTO the ag ricultural domestic support notification for 2002-
2004. Regarding the notifications for years after 2005, as China's current statistic standard is different 
from the standard required by the WTO in the notif ication and also China reformed its budgetary 
subjects which now are quite different from the prev ious subjects, China needs more time to do the 
conversion of statistic standards and prepare the notifications.   
(Question 25: Page 74, Paragraph 26) 
Could China indicate how the Comprehensive S ubsidy on Agricultural Inputs referred to in 
Para. 26 of the Secretariat's report will be classifi ed in their notification to the Committee on 
Agriculture? 
Answer 
The comprehensive subsidy on agricultural i nputs is classified as "amber box" by China.  
(Question 26: Page 74, Paragraph 28) 
Could China indicate how the direct subsidy a nd the general direct subsidy referred to in 
Para. 28 of the Secretariat's report will be classi fied in their notification to the Committee on 
Agriculture? 
Answer 
The direct subsidy is classified as "green box", and th e general direct subsidy is classified as "amber 
box". The latter may be a different translation of  the comprehensive subsidy on agricultural inputs 
mentioned in question 25. 
(Question 27: Page 75, Paragraph 30) 
Para. 30 of the Secretariat's report states that the Government of China doubled the minimum 
procurement prices for rice and wheat in  2008 and 2009. Japan thinks the minimum 
procurement price scheme should be classified as  a market price support, that is AMS. Could 
China provide information on how much AMS fo r rice and wheat increased by raising the 
minimum procurement prices? 
Answer 
China has not yet finished processing related info rmation. The informati on will be provided in 
domestic support notifications of 2005 and years later.  WT/TPR/M/230/Add.1 
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  (5) S
ERVICES  
(i) Overview   (Question 28: Page 79, Paragraph 46) 
(1) On June 22, 2007, the Ministry of Public Safety, the State Secrets Bureau, the State 
Encryption Management Bureau, and the State Council Informitization Office of China 
published a circular regarding the Multi-Level Protection Scheme. This regulation places 
requirements regarding information security on "critical infrastructure" operators, but these 
include measures that could be discriminatory  against foreign products and services, and we 
believe that there is a possibility that this regulat ion could affect the exports of related products 
to China, and hinder the provision of services by  foreign firms in some sectors. Japan suggests 
that China should be prudent regarding the impl ementation of such a scheme which is broad in 
both coverage of sectors and of items. Japan would like to request China to describe the current 
situation and future schedule of the implementation  of the scheme, and whether this scheme will 
discriminate against foreign products and the pr ovision of services by foreign firms in the 
different sectors. 
Answer 
Chinese government initiated the MLPS program in 2007. The organizations  using information 
systems shall determine their level of protecti on according to the importance of the information 
system. The factors for determining levels are object ive, and enterprise ownership is not one of them. 
(2) Although the Government Report of China mentioned several sectors in which the 
Chinese government, toward liberalization, formul ated or amended a series of laws, regulation 
and rules in the past two years, it did not stat e the situation of construction and engineering 
sectors. Please provide recent changes in laws, reg ulations and rules in these sectors for further 
liberalization. We also would like to know the po licy principle of the Ministry of House and 
Urban-Rural Development of China on foreign construction companies.  
Answer In respect of construction and engineering servi ces, China has faithfully honored its accession 
commitments. China repealed rules and admini strative measures inconsistent with accession 
commitments and WTO principles, and promulga ted new ones to confirm and implement the 
commitments. China also took initiatives to fulfill pa rt of the commitments earlier that the committed 
schedule. For example, the Rules on Administration of Qualifications for Foreign-invested 
Construction Enterprises (Decree No. 113 of Ministry of Construction and the former Ministry of 
Foreign Trade and Economic Cooperation) was promulgated in 2002, allowing foreign capital 
construction enterprises to be established 2 year s earlier than the time set out in the accession 
commitments and at the same time abolishing the discriminatory requirements on qualifications for 
foreign-invested construction enterprises. 
China always welcomes enterprises of all members to  invest in the construction sector in China. It 
surely will contribute to technological communicati ons between China and these members and also to 
the development of the Chinese construction sector . Chinese government will faithfully implement its 
WTO commitments, observe WTO basic rules, and promote a sound market environment for foreign 
enterprises to invest in the construction sector in China.  
(3) The Government of Japan has especially co ncerns about the restriction on the types of 
projects which can be undertaken by foreign se rvice suppliers, the excessive requirement of 
assets, and the restriction on the establishment of branches by foreign enterprises. Please 
provide any information about China's consideration of these issues.  WT/TPR/M/230/Add.1 
 Page 305 
 
 
  Answer 
China has fulfilled its commitments in China's Services Schedule. China would be glad to clarify 
specific questions or concerns regarding the di fficulties encountered by specific companies from 
members.  
As a developing country, China has been constantly  promoting the reform and opening up in the 
services sector, although the service s industry in China is still in th e early stage of development. 
China will further raise the devel opment level of the services sector  and its proportion in the national 
economy. In this respect, China will continue to cons ummate its policies for market access of services 
sectors, speed up the establishment of an open, fair , and standardized system for services suppliers 
and encourage the participation of private investment including foreign investment. To be specific, 
China is going to expand the br eadth and depth of opening up in the services sector, encourage 
foreign capital to invest in energy conservati on and environmental protection services, modern 
services such as industrial designing, outsourcing, l ogistics etc, and Chinese and foreign companies 
are also encouraged to strengthen R&D cooperation. To build sound foreign investment environment, 
China will continue to streamline procedures for qua lification and licensing. The State Council issued 
Certain Opinions on Accelerating the Development of Services Sector  in 2007 and Certain Opinions 
on Further Improving the Use of Foreign Capital  early this year. The Catalogue for the Guidance of 
Industries for Foreign Investment  will be revised for the fifth times, and Catalogue of Advantaged 
Industries for Foreign Investment in Mid-West China  will also be amended in the near future. These 
latest development will certainly result in furt her market access opportunities for foreign services 
suppliers in China. 
(4) In addition, the Government of Japan cons iders that the efforts regarding bond finance 
are important for establishing a stable constr uction market.  Based on this understanding, 
Japan would like to know the current situation of  the implementation of the 'Model Guarantee 
Contracts for Construction 2005, No.74 ', which was adopted in May 2005. 
Answer According to Article 41 of the Law on Bid Invitation and Bidding , the winning bidder shall meet one 
of the following requirements: (1) it meets, to th e maximum extent, all the comprehensive evaluation 
criteria specified in the bid invitation documents ; or (2) it meets the substantive requirements 
specified in the bid invitation documents and offers the lowest of the bid prices evaluated; with the 
exception of the bid price that is below cost." 
Meanwhile, the Interim Provisions on Bid Evaluation Commission and Bid Evaluation Methods  
provides that bid evaluation methods shall include the evaluated lowest bidding price method, 
comprehensive evaluation method or other evaluati on methods specified by laws and administrative 
regulations. 
According to the abovementioned laws and rules,  bid evaluation is not based only on the lowest 
bidding price but should also follow comprehensive evaluation method and other methods set out by 
laws and regulations. Even if the evaluated lowest  price method is adopted, price is still not the only 
factor to be considered, as it is required that the pr ice should be no less than the cost and the bidding 
should meet the substantive requirements of bid invitation documents. 
(ii) Financial Services   
(Question 29: Page 79, Paragraph 47) 
(1) Japan understands that banks in China have to lower the loan-deposit ratio within 75% 
by 2011. Since most foreign-funded banks are not engaged in the local currency retail business WT/TPR/M/230/Add.1 
Page 306  
 
  under current restriction mentioned above and amount of deposits are limited, there may be 
concerns whether these regulations could impo se huge burden only on foreign-funded banks, 
which may cause problem in the consistency with China's schedule of commitments, namely with the obligation of NT. 
Answer The loan-deposit ratio requirement is for the purpose of risk management and therefore falls into the 
category of prudential requirement. This requirement  is exercised on the basis of national treatment 
and is consistent with the WTO rules. 
(2) We understand that electronic payments for credit card are dominated by China Union 
Pay. Japan would like to know how this monopoly can be justified in light of China's 
commitments on "All payment and money transmission services, including credit, charge and 
debit cards, travellers cheques and banks drafts (including import and export settlement). If 
China has no market entry regulations, is there any future plan for the promotion of competition? What are China's comments? 
Answer Regarding the issue of inter-bank clearing services fo r electronic payment, China believes the service 
is covered by "settlement and clearing services for fina ncial assets". This sub-sector is not included in 
China's services schedule. That means China has not made any co mmitment on this specific service. 
When China acceded to the WTO in 2001, there was no inter-bank clearing service for electronic 
payment provided by non-financial institution in China. And inter-bank clearing service for bank card 
payment is statutory responsibility of the People's Bank of China. Chinese government granted a 
franchise to China UNIONPAY to provide inter-bank clearing service for bank card as a non-financial 
institution. Therefore, at the time of accession, it was impossible for China to make a commitment to 
open up bank card clearing market for non-financial institutions to foreign investors. China will 
decide the next pace of market opening accord ing to the development of domestic market. 
(Question 30: Page 80, paragraph 51) 
One of Japanese major banks was approved to i ssue bonds in RMB in China in May 2009. Is 
this approval 'pilot' or permanent? 
Answer 
The Bank of Tokyo-Mitsubishi UFJ Ltd. has been ap proved to issue bonds in RMB in China, which is 
still on a pilot basis at present. 
(Question 31: Page 80, paragraph 52) 
Please explain the implementation plan of a depo sit insurance system after the previous Trade 
Policy Review. 
Answer 
China attaches great importance to the protection of  interest of depositors. After the global financial 
crisis broke out, there have been significant chang es to both domestic and international economic and 
financial environments, which present huge cha llenges to China's deposit insurance scheme under 
consideration. China is now studying further details  of the deposit insurance scheme on the basis of 
the latest international trend in the development a nd reform of the deposit insurance schemes in view  WT/TPR/M/230/Add.1 
 Page 307 
 
 
  of the global financial crisis as well as the actual need of China's economic and financial 
development. 
In terms of the guidelines for the deposit insurance scheme, preliminary considerations are firstly to 
introduce the scheme in a compulsory manner, whic h means that the scheme will cover all financial 
institutions in China that absorb deposits, except for branches in China of foreign banks; and secondly 
to apply differentiated rates in order to contain risk-carrying behaviors of  institutions with higher 
risks. As for the timing of the sy stem, since the work in still underway , there is no timetable that can 
be specified at this stage. 
(Question 32: Page 81, paragraph 56) 
China has been gradually promoting the estab lishment of fund management companies owned 
by commercial banks on a trial basis. Please ex plain whether China allows foreign financial 
institutions to establish fund management companies as well, in the light of NT. 
Answer 
Currently, some commercial banks are allowed to establish fund management companies on a pilot 
basis. The financial regulatory authorities still need time to decide on the next steps for the further 
liberalization of this service. 
(Question 33: Page 82, paragraph 57, footnote 56) 
As the Secretariat's report shows that local firm s in China with capital participation from a 
foreign company can voluntarily implement Basel  II, Japan would like to ask how are foreign 
bank branches treated? 
Answer Basel II is to be voluntarily implemented for the ba nks which are legal persons incorporated in China 
(both domestic and foreign banks). Since foreign ba nks' branches are not lega l persons in China and 
their financial data do not reflect the real conditio n of their parent companies, there is no such a 
requirement for foreign banks' branches.   
(Question 34: Page 82, paragraph 58) 
Branches of foreign banks are not allowed to i ssue credit cards for prudential reasons. Please 
explain the concrete reasons why only branches of  foreign banks cannot operate their businesses 
regarding credit cards. 
Answer 
Requirements on the RMB business of branches of foreign banks are prudential measures taken by 
China and are in conformity with WTO rules. Wh en the parent company of a foreign branch goes 
bankrupt, the sequence of liquidation is not favorable to depositors in the host country of the branch. 
International coordination of bankr uptcy liquidation has also proven to be a tough process. Therefore 
branches of foreign banks not incorporated in Chin a bear trans-national financial risks which prompt 
China to take prudential measures to protect depos itors. Many financial regulators across the world 
have intensified prudential supe rvision over branches of foreign banks. If foreign banks plan to 
provide RMB services to customers in China, they  can always choose to establish incorporated 
subsidiaries. WT/TPR/M/230/Add.1 
Page 308  
 
  (Question 35: Page 82, paragraph 59) 
Japan understands that the percentage of equi ty investment of a single overseas financial 
institution in a Chinese-funded financial institution could not exceed 20%. Japan would like to know how this restriction of foreign equity partic ipation can be justified in light of China's 
schedule of commitments which does not stipulate such limitation on the foreign equity 
participation of single institution. 
Answer 
According to China's Services Schedule, qualified foreign financial institu tions are allowed to 
establish wholly foreign-owned banks, including su bsidiaries and branches. However, China did not 
make commitments on the acquisition of existing dom estic banks by foreign financial institutions. 
Nevertheless, China allows foreign investors to acquire equities of Chinese-funded banks up to a 
certain level on the voluntary basis. According to the Measures on Administration of Equity 
Investment of Overseas Financial Instituti ons in Chinese-funded Financial Institutions , the percentage 
of equity investment of a single overseas financia l institution in a Chinese-funded financial institution 
may not exceed 20%. 
Furthermore, China's banking market is still under-de veloped. With the intern ational financial crisis 
not being out of the scene, we have every reason to  be cautious in further liberalizing China's banking 
market. On the other hand, such measure is within  the meaning of the "prudential measures" provided 
for in the Annex on Financial Services under the GATS, the implementation of which is for the 
purpose of the protection of investors, depositors and ensuring the integrity and stability of the 
financial system. 
(Question 36: Page 83, Paragraph 61) Please explain why foreign insurance institutio ns are not allowed to engage in compulsory 
insurance business. A large part of the non-life insurance mark et is carved out by this 
restriction and does China have any policy object ives with respect to this restriction?  
Answer According to China's WTO commitments, foreign non-life insurance companies are not allowed to 
engage in statutory insurance business, which includ es third party auto liability insurance. Therefore, 
further liberalization of this service shall be the topic of the market access negotiation under the Doha 
Development Agenda. 
(Question 37: Page 83 paragraph 63) 
(1) There is some certain high entry requirements  for legal entities of insurance companies 
and their affiliates in "the Rules on Administra tion of Insurance Companies" issued by the 
CIRC, which entered into force on 1 Octobe r 2009. Please provide information in detail 
regarding entry requirements. 
Answer 
Detailed information regarding entry requirements is contained in the  Rules on Administration of 
Insurance Companies . 
(2) Please explain the reason why only insura nce companies are imposed on strict entry 
requirements.  WT/TPR/M/230/Add.1 
 Page 309 
 
 
  Answer 
The Rules on Administration of Insurance Companies  is enacted for the purpose of regulating 
insurance companies. The entry requirements cont ained therein apply to all insurance institutions 
operating in the Chinese insurance market, be it domestic-funded or foreign-funded. 
(3) Please provide information about if these strict entry requirements secure NT? 
Answer 
Please refer to the answer to the previous question.  
(Question 38: Page 84 paragraph 64) 
(1) With respect to the foreign equity cap,  there are some substantial differences between 
non-life insurance (100%) and life insurance compan ies (50%). Japan would like to ask if there 
are any rational reasons for these differences? 
Answer 
According to China's Services Schedule, foreign investors are required to set up joint-venture 
enterprises in order to enter into China's life insurance market and fo reign equity ownership shall be 
no more than 50%. China's current policy is comple tely consistent with the above commitments.  
(2) When foreign insurance companies establis h representative offices in China, the CIRC 
requires them to hold minimum assets of US$2 billion under the CIRC circular "Interpretation 
of Several Issues Concerning the Application of th e Measures for the Administration of Foreign 
Insurance Institutions' Representative Offices in China", Please explain why this asset requirement are too severe to establish representa tive offices. Isn't this asset requirement too 
severe to facilitate the establishm ent of representative offices? 
Answer 
According to China's accession commitments, conditi ons for establishing a foreign-invested insurance 
institution include: the investor shall be a foreign insurance company with mo re than 30 years of 
establishment in a WTO member; it shall have a representative office in China for two consecutive 
years; it shall have total assets of more than US$ 5 billion at the end of the year prior to application. 
The horizontal commitments of China's Services Schedule stipulate that representative offices in 
China of foreign enterprises shall not engage in  profit-making activities. If the establishment of a 
representative office is for the purpose of establishing a foreign-invested insura nce institution so as to 
engage in profit-making activities, then the total a ssets of the foreign insurance institution shall be 
more than US$ 5 billion, otherwise it could not fu lfill the requirements specified in the Services 
Schedule. Therefore, the capital requirement of  US$ 2 billion is not only necessary but also 
reasonable. 
(Question 39: Page 84, paragraph 68) 
Regarding the approval process of QFIIs, please  provide the reason for giving priority to 
institutions dealing with long-term capital ma nagement, such as pension fund, insures, and 
charity funds. WT/TPR/M/230/Add.1 
Page 310  
 
  Answer 
This is for the purpose of prudential regulation.  Institutions dealing with long-term capital 
management are more concerned with long-term rather than s hort-term economic interest and 
therefore are more suitable to be strategic investors,  whose participation in the market is conducive to 
the stability of the financial market and the protection of investors' interests. 
(Question 40: Page 86, paragraph75) Please provide information, if any, on futu re plans for fostering the Chinese bond market, 
especially in the corporate segment. 
Answer 
The development pace of China's bond market is rela tively slow. To realize coordinated development 
of stock market and bond market, to expand financi ng channels of enterprises, to enrich securities 
investment products, and to improve the safety of  financial system, China Securities Regulatory 
Commission (CSRC) issued Rules on the Issuance of Corporate Bonds on Pilot Basis  in August 2007. 
A series of market-oriented institutional arrangeme nts were implemented, including approval system, 
sponsor system, credit rating system and market-ori ented pricing. These effort s have contributed to 
the rapid development of the bond market. In 2007 and 2008, there were respectively 3 and 30 listed 
companies to issue corporate bonds, with the fi nancing amounting to RMB 11.2 billion Yuan and 
RMB 99.8 billion Yuan respectively. 
In the future, with regard to the development of bond market, China will continue to increase the 
types of bond to be issued for fund raising, expand  the scope of investors, and pay special attention to 
the specific difficulties facing by small and medium-s ized enterprises in fund raising. The relevant 
authorities have pushed ahead the establishment of cr edit enhancing companies in order to solve the 
fund raising problems of small and medium-sized enterprises. 
(Question 41: Page 86, paragraph78) 
Please provide information, if any, on future plans of loosening the requirements for 
establishing a securities company. 
(Question 42: Page 87 paragraph 80) 
We recognize that, in order for foreign secu rities companies to run businesses in Chinese 
markets, their foreign equity must be limited to 33% and these companies must enter as joint-
venture securities firms. Please provide informat ion about if China has plans to loosen this 
limitation. Does China have any plans to loosen this limitation? 
Answer (for questions 41 and 42) In China's WTO commitments, qualified foreign secu rities institutions and investment banks are 
allowed to establish joint-venture enterprises with  domestic securities institutions, with foreign 
minority ownership not exceeding 1/3, to engage in underwriting A shares and in underwriting and 
trading of B and H shares as well as government and corporate bonds. 
After accession into the WTO, China has fully im plemented the aforementioned commitments. Since 
December 2007, CSRC has amended and promulgated the Rules for the Establishment of Securities 
Companies with Foreign Equity Participation  and the Trial Provisions for Securities Companies to 
Set up a Subsidiary , which have further improved the legal framework for the liberalization of the  WT/TPR/M/230/Add.1 
 Page 311 
 
 
  securities market. The CSRC has also implemented a series of autonomous liberalization measures, 
for instance, qualified joint-venture securities comp anies could progressively engage in new lines of 
business such as A-share brokerage and asset manageme nt, the requirements on qualifications of the 
foreign shareholders in the joint-venture secur ities firms are relaxed, with general financial 
institutions and non-financial ins titutions engaged in financial inv estment business allowed to invest 
in the joint-venture securities firms.  
China's securities market has the ch aracteristics of an "emerging plus transitional" market. Against 
this background, China has liberalized the secur ities sector in the same way as other emerging 
economies which have opened their markets. Refo rm and opening-up are the basic strategy for the 
development of China's securities sector. China is willing to discuss further market liberalization on a 
reciprocal basis with other WTO members in the market access negotiations under the Doha 
Development Agenda. 
(Question 43: Page 87 paragraph 82) 
(1) Regarding the supply of financial info rmation, Japan recognizes that there is no 
reservation in the Schedule of China. However,  the WTO Secretariat's report described that 
"New Provisions on the Administration of Provisi on of Financial Information Services in China 
by Foreign Institutions" eased restrictions on the supply of financial information services by 
foreign institutions. Please explain whether NT is secured in supplying financial information 
services.  
Answer 
According to the Rules on Administration of Provision of Fi nancial Information Services in China by 
Foreign Institutions  issued by the State Council Information Office, Chinese government will 
safeguard the legitimate rights and interests of foreign institutions on th eir supply of financial 
information services in China pursuant to law, and will facilitate their supply of the services. 
(2) Please explain what types of limitations there are regarding the provision of financial 
information services. 
Answer 
For provision of financial information services in China, foreign institutions shall abide by laws, 
regulations and rules of China. Specific provisions can be found in Article 17 of the Rules on 
Administration of Provision of Financial Info rmation Services in China by Foreign Institutions . 
Please refer to http://www.gov.cn/flfg/ 2009-04/30/content_1300556.htm for details.  
(iii) Telecommunications  
(Question 44: Page 88, paragraph 89) 
The report by the Secretariat says "Internet ac tivities and services are regulated, supervised, 
and administered by several departments." Regarding Internet activities, Japan would like China to explain regulations in each area and their actual applications as well as governing 
agencies in a detailed and comprehensive way. 
Answer 
For detailed information, please refer to the followi ng regulations, rules and administrative measures: 
the Regulations on Administration of  Internet Information Services  (State Council Decree No. 292), 
the Interim Provisions on Administration of Internet Publishing (General Administration of Press and WT/TPR/M/230/Add.1 
Page 312  
 
  Publication and former Ministry of Information Industry Decree No. 17), the Measures for the 
Administrative Protection of Internet Copyright (National Copyright Administration and former 
Ministry of Information Industry Decree No. 5), the Provisions for Administration of Internet News 
Services (State Council Information Office and former  Ministry of Information Industry Decree 
No. 37), the  Interim Measures for the Administration of Educational Website and Online-School 
(JiaoJi No.5 of 2000), the  Measures for the Administration on Internet Drug Information Services  
(State Food and Drug Administration Decree No. 9) and etc. 
(Question 45: Page 89, paragraph 92) 
Japan understands that a draft Telecommunicati ons Law is being examined in China by the 
State Council Legislative Office. Japan anticipa tes early enactment of the Telecommunications 
Law, and would like China to explain envisioned schedules for its legislation and enforcement as 
well as its outline. In particular, Japan would lik e to ask for a clear expl anation on how this law 
will comply with WTO rules.   
Answer 
The draft of the law has been submitted to the Stat e Council for review. Currently, the relevant work 
is going on according to the procedures and requirements of the Legislation Law , and the law will be 
kept consistent with China's WTO commitments. Chin a does not have a specific timetable of its final 
promulgation at this stage.  
(Question 46: Page 89, paragraph 94) 
According to article 18 of the "Regulation on Te lecommunications" and article 7 in "Regulation 
on the Interconnection offer," dominant tel ecommunications business operators are required to 
establish rules for interconnection. We would lik e China to provide specific information where 
such rules are available. (with the URL of a website if it is available from a website) 
Answer 
Inter-connection related regulations, rul es and administrative measures include Regulations on 
Telecommunications  (State Council Decree No.291), Rules on Interconnection between Public 
Telecommunication Networks (former Ministry of Information Industry Decree No. 9),  Measures on 
the Settlement of Disputes over Interconn ection between Telecommunication Networks  (former 
Ministry of Information Industry Decree No. 15), Measures for Settlement of  Interconnection Charges 
and Sharing of Relay Expenses between  Public Telecommunication Networks , Measures for 
Settlement of Internet Exchange Centers , Measures on Supervision and Regulation of Communication 
Quality of Inter-network Communication be tween Public Telecommunication Networks , Provisional 
Measures on Supervision and Regula tion of Communication Quality of  Inter-network Communication 
between Internet Backbone Networks  etc. All the aforesaid regulations, rules and administrative 
measures are available at the website of Ministry of Industry and Information Technology (www.miit.gov.cn ). 
(Question 47: Page 89, paragraph 94 and footnote 83) 
The WTO report says, "The authorities do not yet have clear standards to define 'dominant 
carriers'; they are studying appropriate definiti ons in the light of progress in technology and 
network structure." Japan would like to confirm that 'dominant carriers' include at least China 
Telecom, China Mobile and China Unicom. And while there seems already to be a definition of 'dominant carriers' in footnote 83, Japan would like to confirm what role this "definition" plays.  WT/TPR/M/230/Add.1 
 Page 313 
 
 
  Answer 
Regarding the definition of "dominant ca rrier", please refer to Article 5 of the Rules on 
Interconnection between Public Telecommunication Networks (former Ministry of Information 
Industry Decree No. 9). 
(Question 48: Page 90, paragraph 95) 
Japan recognizes that he minimum registered capi tal requirement for foreign-invested telecom 
enterprises remains extremely high. , Applying the same system to both facility-based providers 
and resale-based providers is especially unreaso nable in light of the necessary equipment 
investments to do business.  Therefore, Japan desires the elimination or further relaxation of 
the system, and would like China to explain th e future prospects of this system with 
explanations, especially with regard to the en try of resale-based business into the market. 
Answer 
The decision promulgated by the State Council in September 2008 on amending the Regulations on 
the Administration of Foreign Invested Telecommunication Enterprises (State Council Decree 
No. 534) halved the minimum registered capital re quirement for establishment of foreign invested 
telecommunication enterprises to engage in basic telecom services. Currently, China does not have 
other plans to make legislative changes in this respect. 
Regulations on the Administration of Fo reign Invested Telecommunication Enterprises  sets minimum 
registered capital requirement for foreign invested  telecom enterprises, domestic services suppliers are 
subject to the same requirement as well. It is th erefore consistent with national treatment principle . 
The telecom sector is a capital-intensive industry feat uring economy of scale. If the registered capital 
of telecom companies were too low, it would be in adequate to protect the investors and consumers. 
WTO members all have their own minimum registered capital requirements based on their national conditions. 
As far as resale is concerned, according to th e Notes for Scheduling Basic Telecom Services 
Commitments (S/GBT/W/2/Rev.1), unless otherwise noted in the sector column, any basic telecom 
services listed in the sector column may be provide d on a facilities-basis or by resale. Therefore, 
resale is a way for services supply rath er than a specific telecom service.  
List of Telecommunication Services  revised in 2003 canceled "resale of basic telecom services", which 
is consistent with WTO rules as well as China's commitment. As long as the services suppliers obtain 
the licenses for the basic telecom se rvices, they can decide on their own ways to provide the services, 
either by building their own networks or utilizing th e leased networks to provide services in the way 
of resale. 
(Question 49: Page 90, paragraph 99) 
(1) According to article 44 of the "Reg ulation on Telecommunications (2000),"  
"Telecommunications business operators must perf orm their corresponding obligations to make 
telecommunications services universally available, in accordance with relevant State 
regulations." Japan would like China to explai n the content of the universal service system 
(service coverage, scope of providers obligated to  offer services and providers obligated to carry 
the cost) with a specific explanation of "State regulations." 
(2) Regarding to the fund that is in the pr ocess of being established by MIIT for universal 
service, Japan would like China to provide its outline (scheme, schedule, scale etc.). In WT/TPR/M/230/Add.1 
Page 314  
 
  particular, Japan would like to ask for explan ation about the concrete content of the "cost 
structure for compensating servi ce providers" referred to in the report by the Secretariat. 
Answer (for questions (1) and (2)) 
Telecom universal service fund is a common practice fo r most countries to realize universal service of 
telecommunications, which is of critical importance for social and economic development. Universal 
service is mentioned in regulations and policy documents such as Eleventh Five-Year Plan for the 
Information Industry , Regulations on Telecommunications , and Notice on Issuing the Program for 
Reform of the Telecommunications System  and so on. Specific details on scope of universal service 
and coverage of providers are being studied by co mpetent authorities. Relevant rules will be notified 
to the WTO once finalized.  
(iv) Transport services   
(Question 50: Page 93, paragraph 111) 
Regarding paragraph 111 on page 93 of the Report  by the Secretariat, Japan would like to ask 
China to provide details on "reform" of Pilotage services. 
Answer 
Before the pilotage system reform, pilotage in stitutions had been affilia ted to harbor handling 
enterprises. After the reform, they were separated  from harbor handling enterprises and became public 
institutions under port administrative departments with  independent legal person status. This is more 
conducive to the supply of public pilotage services to all vessels. Meanwhile, competent authorities 
have strengthened supervis ion and administration over pilotage institutions without interfering with 
their specific business. China Pilotage Associ ation was established, which has acted as an 
intermediaries to enhance self-discipline of the sector.  
(vi) Tourism   
(Question 51: Page 97, paragraph 133) 
When will or did Chinese authorities start the pilot programme to allow foreign companies to 
provide outbound travel business? Which and how many countries and travel agencies can start 
providing outbound travel business, when Chin ese authorities start the pilot programme? 
Answer 
The relevant measures of a pilot program for the opening of foreign tour operators to engage in 
outbound services is under discussion and study, and will be released to promote further liberalization 
in this area when market development situa tion matures. Except under the Closer Economic 
Partnership Arrangement (CEPA) framework, no forei gn tour operator has been approved to provide 
outbound tourism. 
(vii) Other services  
(Question 52: Page 98, paragraph 135 - 136) 
(1) Japan would like to know if there's any improvement of updates regarding China's 
possible commitments on computer-related servi ces, especially on database services, and on 
maintenance and repair services.  WT/TPR/M/230/Add.1 
 Page 315 
 
 
  Answer 
The requests for further opening of these service sect ors are to be dealt with in the market access 
negotiations of the Doha Round. These are not is sues of China's implementation of commitments. 
China is willing to discuss these issues w ith other Members in the DDA negotiations. 
(2) Japan would like to know if there's an y improvement regarding audiovisual services, 
especially on Motion picture and video tape production and distribution services, Motion 
picture projection services and Sound recording services. 
Answer 
Audiovisual service is a sensitive sector for China in the DDA negotiations. We have no plan to make 
further commitment in this sector at present.  
(3) Japan would also like to know if there's any improvement regarding the reduction or 
elimination of the restriction, i.e., allowance of  the import of up to 20 motion pictures on an 
annual basis for theatrical relea se on a revenue-sharing basis. 
Answer 
China has implemented its commitments in this regard  and has no plan to reduce or eliminate relevant 
restrictions at this stage. 
(4) Regarding paragraph 136 on page 98 of the Secretariat's Report stating that 
distribution services have remained largely unc hanged, Japan has been interested in China's 
commitments in Mode 1 for mail order in Commi ssion Agents' and Wholesale Trade Services, 
and also, commitments in removal of restrictions for chain stores on MA in Mode 3 for Retailing Services. Japan would like to request th at China provide inform ation on any progress 
after the previous TPR. 
Answer 
The questions are new market acc ess requests subject to the DDA ne gotiations. China is willing to 
discuss these issues with other WTO Members in the DDA negotiations. 
(5) In addition to the services categories mentio ned in both of the reports, Japan has been 
interested in advertising services. Taking note of  China's liberalization process in the sector 
such as Advertisement Law and the Regulation s on Advertisement Administration and their 
Implementation Rules, Japan has sought clarification on China's measure that a foreign company whose main business is not advertising services is not permitted to establish wholly 
foreign-owned subsidiaries. Since there were not any satisfactory replies on this point from 
China at the last TRM in 2009, please provide information on subsequent changes on this 
regulation. If the regulation remains unchang ed, please explain how the restriction can be 
justified in light of China's schedule of commitments in advertising services. 
Answer 
The relevant provisions formulated by China are for the purpose of ensuring the healthy development 
of the advertising sector, protecting the just and la wful rights of investors, advertising agents and 
consumers, and are applicable to all advertis ing services providers. China welcomes overseas 
advertising agencies with advanced philosophy, market operation and management experience to 
invest in China to promote the healthy development of China's advertising industry. WT/TPR/M/230/Add.1 
Page 316  
 
  Appendix tables 
I. E
CONOMIC ENVIRONMENT  
(Question 53: Page 103 – 105, Table AI.1) 
As to the measure "Adjustments to the list of products subject to prohibition and restrictions 
under in the trade (certain plastic raw materials, plastic and wood products, textile products, 
and metallic products deleted from the list)", co uld China provide us with detailed information 
on the prohibition and restrictions in the wood products trade at the 8-digit level? 
Answer 
For adjustments in 2008 to the lists of products  subject to prohibition and restrictions under 
processing trade mentioned in Secretariat's report,  please refer to: 1) Announcement No. 120 of 2008 
of the Ministry of Commerce, the General Administration of Customs, at 
http://www.mofcom.gov.cn/aarticle/b/c/200812/ 20081205986024.html; a nd 2) Announcement 
No. 121 of 2008 of the Ministry of Commerce, the General Administration of Customs, at 
http://www.mofcom.gov.cn/ aarticle/b/c/200812/2008120 5986025.html. For other information on lists 
of products related to processing trade, please refe r to Decrees and Announcements released at the 
website of the Ministry of Commerce. 
JAPAN – Part 2  
Report by China (WT/TPR/G/230) II. G
ENERAL ECONOMIC ENVIRONMENT AND POLICY DIRECTION  
(2) S TIMULUS PACKAGE IN RESPONSE TO THE GLOBAL FINANCIAL CRISIS  
(iv) Increasing consumer demand  (Question 1:  Page 8 -9, Paragraph 24)  
We understand that the Chinese government is pl anning to implement stimulus programs for 
consumption which subsidize the purchase of build ing materials in rural areas, called 'Jian cai 
xia xiang'.  Please provide details of this policy,  including the total amount of the subsidy and 
the building materials that are to be subsidized. 
Answer 
Details of the policy proposing to subsidize the purchase of building materials in rural areas are still 
being studied and the policy has not yet been formally implemented. 
(3) P
ROMOTING THE TRANSFORMATION OF THE PATTERN OF ECONOMIC DEVELOPMENT   
(ii) Accelerating the development of the service sector  
(Question 2: Page 11, Paragraph 32)  
Regarding paragraph 32 on page 11 of the Report by China, Japan would like to ask China to 
provide details on "Opinions on the Implementation of Certain Policies and Measures for 
Accelerating the Development of the Servi ce Sector," which was announced in 2008. 
Answer For the Opinions on Accelerating the Development of the Service Sector  issued by the State Council 
in 2007, please refer to http://www.gov.cn/zw gk/ 2007-03/27/content_562870.htm. For the Opinions 
on the Implementation of Certain Policies and Me asures for Accelerating the Development of the  WT/TPR/M/230/Add.1 
 Page 317 
 
 
  Service Sector  issued by the General Office of th e State Council in 2008, please refer to 
http://www.gov.cn/zwgk/ 2008-03/19/content_923925.htm.  
(Question 3: Page 11, Paragraph33)  
(1) Government Report mentioned several sect ors in which the government has formulated 
or amended a series of laws, regulations and rules over the past two years, it did not mention the 
construction and engineering sectors. Please let us know of any recent efforts for further 
liberalization in the laws, regulations and rules in these sectors. We also would like to know the 
policy principles of the Ministry of Housin g and Urban and Rural Development of China 
toward foreign construction companies.  
Answer 
Please refer to the answer to the written question of Vol. 1 Q.28 (2) from Japan.  (2) Especially we have concerns about restrict ions on the types of projects which can be 
undertaken by foreign service suppliers, the burde nsome asset requirements, and the restriction 
on the establishment of branches by foreign enterprises. Please provide any information and 
your ideas on those issues. 
Answer 
The four types of construction projects which wholly foreign-owned enterprises are allowed to 
undertake in China are in line with China' s commitments upon its accession into WTO.  
In terms of the qualifications of construction en terprises, the same qualification requirements are 
applied to both Chinese and foreign-invested ente rprises consistent with the principle of national 
treatment, and the requirements for registered capital are also the same.  
With respect to the restriction on establishment of branches by foreign-invested enterprises in the 
sector in China, China did not make commitment in the Services Schedule.  
(3) Japan considers that the efforts regarding bond financing are important for establishing 
a stable construction market. Based on this opinion, Japan would like to know the current 
situation in the implementation of the 'M odel Guarantee Contracts for Construction （2005, 
No. 74）' adopted in May 2005. 
Answer 
Please refer to the answer to the written question of Vol. 1 Q.28 (4) from Japan.  (iii) Advancing strategies for scientific and technological innovation and intellectual 
property rights  
(Question 4: Page 12, Paragraph35)  
As the report described "China, like other developi ng countries, has long been subject to unfair 
and unreasonable unilateral restrictions imposed by some developed countries", please provide 
us with specific examples of what this is intended to mean. WT/TPR/M/230/Add.1 
Page 318  
 
  Answer 
Developing countries including China have always  been requiring developed countries to make 
substantive efforts in transferring technologies a nd exporting hi-tech products. However, the efforts 
on the part of the developed countries at present are indeed far from satisfactory.   
(Question 5: Page 12, Paragraph 35 - 37)  
(1) As, in 2006, the Chinese Government pr omulgated the "Outline of the National 
Program for Long- and Medium-Term Scientific  and Technological Development (2006-2020)", 
please explain the policy of intellectual propert y rights protection for foreign companies and 
their products. 
Answer 
For the Outline of the National Program for Long and Medium-Term Scientific and Technological 
Development (2006-2020) , please refer to http://www.gov.cn/ jr zg/2006-02/09/content_183787.htm. 
Part 8 of the Outline  contains policies and measures regarding IPRs and their protection.  
(2) While Section 2, "condition for certificat ion", of "Notice of 2010 National Indigenous 
Innovation Product" stipulates that items which h ave no dispute can be registered, there is no 
clause for cases in which a dispute would occu r after the registration. Please explain how 
legislative policies or any measures would be taken in order to address this matter. 
(3) In the same notice, Section 3 outlines that a company, in order to be an applicant, must 
possess the right to monopolize a registered trademar k or to use the product in China based on 
the law. However, the existence of well-known fo reign trademarks is not sufficiently considered 
at an examination stage and there are many cases  in which usurped application is registered. In 
such cases, the trademark application by th e authentic right holder in an overseas country 
cannot be registered, due to the above-mentioned  usurped application in China. Under this 
situation, the protection of the authentic ri ght holder is insufficient if the government 
establishes regulation which obliges the acquisiti on of the right to monopolize a registered 
trademark or to use the product. Please explain how legislative policies or any measures will be 
taken in order to address this matter. 
(4) As it can be interpreted by Section 3 that products which can receive favorable 
treatment are only those produced in China, it seems that import products cannot receive 
favorable treatment. If the aforementioned inte rpretation is not correct, can import products 
also receive favorable treatment? If they can,  please provide the evidence by citing concrete 
clauses. 
(5) Section 4 includes some unclear words a nd phrases whose meanings are difficult to 
understand. The phrase, "technologies used for product should be advanced ones" is an 
example of such unclearness. Japan would like to know whether the Chinese government has a 
plan to review this notice or to take new me asures for clarification of these definitions. 
Answer (for questions (2)-(5)) Encouraging indigenous innovation of enterprises and building an innovative country are important 
strategies that China adopts to promote scientific development and transformation of the pattern of 
economic development. It also provides new fi elds for cooperation and more development 
opportunities to domestic and international entrepre neurs as well as foreign-invested enterprises in 
China.  WT/TPR/M/230/Add.1 
 Page 319 
 
 
  In the recognition of indigenous innovative products, a ll enterprises lawfully established in China are 
treated equally and all manufacturers as legal pers ons are entitled to apply for such accreditation. 
From April 10 to May 10, 2010, the Chinese co mpetent authorities published online the revised 
conditions for recognizing indige nous innovative products, i.e. th e Notice on National Recognition of 
Indigenous Innovative Products 2010 (Draft) for pub lic comments. The revised Notice clarified those 
provisions in the Notice of the previous year which caused misunderstandings among enterprises, 
including the description of indigenous intellectua l rights, the expression concerning initial trademark 
registration and time of application, etc. Curre ntly, the authorities are studying the comments 
collected. China welcomes foreign-invested enterprise s from all countries and regions to participate in 
the process, to increase their invest ment in research, development and innovation, to bring in high-
quality human resources and advanced technologies, and to enhance their cooperation with Chinese 
partners so as to move up to  a new level of development 
III. T RADE DEVELOPMENT AND TRADE POLICIES  
(3) A DHERING TO FURTHER OPENING UP TO THE OUTSIDE WORLD  
(iv) Telecommunication services  
(Question 6: Page 23, Paragraph 90)  
Japan would like to know the current status of th at consideration and the possibility of China to 
liberalize Mode1 on the telecommunications sector. 
Answer 
China takes the question as new market access re quest which is subject to the DDA negotiations. 
China is willing to discuss the issue with other WTO Members in the DDA negotiations.  
(v) Distribution service of chemical fertilizers  
(Question 7: Page 23, Paragraph 91)  
Regarding paragraph 91 on page 23 of the Report  by China, Japan would like to request China 
to provide more detailed information on the Deci sion on Further Deepening the Reform of the 
Circulation System of Chemical Fertilizers, especi ally the future possibilities of expanding the 
same regulatory reform process in  other categories of service.  
Answer The full text of the Decision on Further Deepening the Reform of the Circulation System of Chemical 
Fertilizers can be found at http://www.gov.cn/zwgk/ 2009-08 /28/content_1403886.htm. With regard 
to the future possibilities of expanding the same regulatory reform process into other services, we 
have no relevant information at present. However,  after accession to the WTO China has fulfilled its 
commitments regarding the distribution services, an d the liberalization of the services sector has 
already reached a very high level. 
(4) S
TRENGTHENING AND ENHANCING THE MULTILATERAL TRADING SYSTEM  
(i) Doha Development Agenda (DDA)  (Question 8: Page 24, Paragraph 100)  
Paragraph 100 in China's Government Report mentioned that 'market access should be 
expanded substantially for the movement of na tural persons'. However, in architectural 
practice, we have heard that it is difficult for foreign architects to obtain the qualification of 
'constructor (Jian zao shi)' although the qualific ation examination is open to foreigners. Please 
provide the number of foreign and Chinese architects who currently possess the qualification of WT/TPR/M/230/Add.1 
Page 320  
 
  'constructor' (jian zao shi). Japan would also like to know if there are any measures to stimulate 
acquisition of qualification by foreign architects. 
Answer According to Article 34 of the  Provisional Rules on Qualific ation System for Constructors , upon the 
approval by relevant authority under the State C ouncil, those foreign professionals and professionals 
of Hong Kong China, Macao Chin a and Chinese Taipei who are allowed to conduct management of 
construction projects in China may participate in th e qualification exam for c onstructors and apply for 
registration. Up till now, there has been no foreign professional who participated in the exam. By the 
end of 2009 there were 21,732 professionals who obtaine d the qualification of first class constructor 
in China, among which 21,327 were registered. Cu rrently, there is no policy to encourage foreign 
constructors to acquire the qualifi cation of constructor in China. 
JAPAN – Part 3
 
TRADE DEVELOPMENT AND TRADE POLICIES  
(3) A DHERING TO FURTHER OPENING UP TO THE OUTSIDE WORLD  
(Question 1: Page 22, paragraph80) 
(1) In some regions it is difficult to est ablish branches due to the complexity of the 
application requirements. Please provide details of such application procedures in light of the enhancement of the transparency of domestic regulations.    
(2) It is said that only one branch per city is permitted in China. In China's horizontal 
commitments in the GATS schedule, the laws and regulations on branches of foreign enterprises 
are not included because China asserts that such regulations a re still being formulated.  Japan 
would like to ask China to provide detailed info rmation about the progress in the state in the 
preparation of relevant laws and regulations. 
Answer (for questions (1) and (2)) 
The Company Law , Regulations on the Administration of Registration of Companies , Law on 
Partnership Enterprises , and Administrative Provisions on the Registration of Foreign-invested 
Partnership Enterprises  have made clear stipulations on re gistration procedure and documentary 
materials required to be submitted when a foreign -funded enterprise applies for the registration of its 
branch. The so-called "only one branch per c ity is permitted in China" is not correct. 
(3) For construction companies to establish branch offices in China each region has its 
own/different regulations. This places a heavy bur den on companies and so Japan would like to 
know whether the Government of China has any plan to introduce legislation making uniform 
regulations that are applied throughout the country.    
Answer 
China applies a unified legal system nationwide. For construction companies to establish branches in 
China, such horizontal laws and regulations as Company Law  regarding the form of businesses and 
industry-specific laws and regulations as Construction Law , Rules on Administration of Foreign-
Invested Construction Enterprises regarding supervision and admi nistration of construction and 
engineering services shall apply uniformly. The s ituation mentioned in the question of Japan that 
"each region has its own/different regulations" should not exist. It is hoped that Japan could provide 
details about the situation so that China could study.  WT/TPR/M/230/Add.1 
 Page 321 
 
 
  (4) S TRENGTHENING AND ENHANCING THE MULTILATERAL TRADING SYSTEM  
(i) Doha Development Agenda (DDA)    (Question 2: Page 24, paragraph 100)  
In Mode 4 in China's schedule, ICT (Intra-corporate transferees) are granted a three year stay 
for some types of natural persons. Japan would like to have details on how permission for 
residence is currently implemented.   
Answer 
After entry into China, a foreigner may apply for an extension of stay before the expiry of the duration 
of stay on the visa or residence permit if he or she ne eds to continue to stay in China after the visa or 
residence permit expires. The immigration authority will determine whether to issue the extension or 
not after examination and verification of the rele vant information about the applicant such as the 
purpose for his or her visit to China and the conditions  he or she has to meet. For instance, a foreigner 
who is to work in China shall enter with a Z visa and apply to the immigration authority with such 
evidential materials as official letter from the em ployer, Employment Permit for Foreigners or 
Foreign Expert Certificate, and the immigration au thority may issue a 1-2 year residence permit for 
employment in China after examination and verifica tion, and a 2-5 year residence permit for those 
senior management and talents; foreign journalists resident in China shall enter with J-1 visas and 
apply to the immigration authorit y with such evidential material s as press card, and the immigration 
authority may issue residence permit for journalists with a validity of less than one year after 
examination and verification. The accompanying re latives of the above-menti oned persons may apply 
for residence permit for relatives with correspond ing validity with the proof materials of the 
relationship. 
Report by the Secretariat (WT/TPR/S/230 
II. T
RADE POLICY REGIME : FRAMEWORK AND OBJECTIVES  
(6) F OREIGN INVESTMENT REGIME    
(Question 3: Page 22, paragraph49) 
Regarding regulations on foreign direct inv estment, Japan appreciates China's efforts to 
increase the transparency of domestic regula tions and procedures, such as simplifying 
application procedures for investments and the clarification of the relevant tax systems. Is there any information on future plans to increase transparency in this area? 
Answer 
In recent years, China has continuously strengthene d the efforts in the reform of administrative 
licensing system, and has delegated much author ity of examination and approval to the local 
governments. The latest move in respect of fore ign investment is the release by the Ministry of 
Commerce (MOFCOM) of the Circular on Delegating Examination and Approval Authority over 
Foreign Investment (Shang Zi Fa No. 209 of 2010) on 10 June 2010. According to the Circular , the 
local people's governments at the provincial level shall be responsible for examination and approval 
of the establishment of foreign investment enterpri ses and their alterations for projects falling in the 
"encouraged" and "permitted" categories with total investment of less than USD 300 million and also for projects of "restricted" category with total investment of less than USD 50 million in the 
Catalogue for the Guidance of Industries for Foreign Investment . For details of the latest 
development, please refer to the official website of MOFCOM at www.mofcom.gov.cn.  WT/TPR/M/230/Add.1 
Page 322  
 
  III. T
RADE POLICIES AND PRACTICE BY MEASURE  
(2) M EASURES DIRECTLY AFFECTING IMPORTS  
(vi) Standards and other technical requirements  (Question 4: Page 36, paragraph 46) 
Japan welcomes China's continual efforts to  further enhance transparency in its 
standardization process and SAC's announcement that China allows foreign-owned companies 
established in China to participate as voting members in technical committees responsible for 
the promulgation of national standards. In this respect, Japan would like China to provide detailed information on the procedures and administ rative rules for the participation of foreign-
owned companies in technical committees a nd to indicate the way to access the relevant 
documents.  
Answer 
The procedures for foreign-invested enterprises to  join the technical committees are implemented 
according to the Administrative Provisions on National Specialized Technical Committees of 
Standardization . The rule prescribes that a technical committee is composed of members from 
enterprises, scientific research institutes, testing in stitutes, institutions of higher learning, government 
agencies, business associations and consumers etc; the candidates for such members shall be selected 
publicly and made known to the public by the Standardization Administration of China, and 
undisputed candidates shall then be subject to ex amination and approval by the Standardization 
Administration of China and then be appointed by  the technical committee. A qualified member shall 
meet the requirements of the Administrative Provisions  as well as other conditions provided for by the 
articles of association of the technical committee. Ot her parties may also participate in the activities of 
the technical committee in the capacity of observe rs or consultants in addition to members.  
The procedures for foreign-invested enterprises to  join the technical committees are basically as 
follows: contacting the secretariat of the technical committee; sending a letter to the technical 
committee to express the wish of participation as well as the specific form of participation; the 
secretariat of the technical committee shall formul ate a proposal and submit it to all members for 
voting pursuant to the articles of association; the t echnical committee shall report to its superior unit 
for examination and verification; the superior unit shall report to Standardization Administration of 
China for approval. 
The Administrative Provisions on National Specialized Technical Committees of Standardization is 
available at the website of Standardization Admi nistration of China at http://www.sac.gov.cn/templet/ 
default/ShowArticle.jsp?id=4857.  
IV. T
RADE POLICIES BY SECTOR  
(5) S ERVICES  
(ii) Financial services  (Question 5: Page 83, paragraph 61) 
(1) Regarding life insurance services, the Government of Japan has received a report that, 
to open new affiliates/branches, foreign-affilia ted insurance companies are not permitted to 
apply simultaneously for licenses for more than one affiliate/branch at the same time. Please 
explain how this treatment, clearly discriminati ng in favor of domestic companies, can be 
justified.   WT/TPR/M/230/Add.1 
 Page 323 
 
 
  Answer 
When examining and approving the application for the establishment of affiliates/branches, China 
Insurance Regulatory Commission (CIRC) treats domest ic and foreign insurance companies equally 
and follows the same laws, regula tions, rules and procedures. The Provisions on Administration of 
Insurance Companies contains specific and detailed re quirements on the application and 
establishment procedures of affiliates/branches wh ich are transparent and non-discriminatory and 
conform to China's WTO accession commitments.  
(2) Regarding property insurance services, Japan is very interested in China's efforts to 
widen channels to enhance the convenience for customers in areas such as, telemarketing, 
internet sales, and bank branches. Are there any future plans for loosening regulations in these 
channels?  
Answer 
China will carefully study Japan's suggestions. China has made extens ive commitments in respect of 
the insurance sector during the WTO accession negotiations, and the level of openness of China's insurance sector has alrea dy surpassed that of the average leve l of WTO members. China needs time 
to assess the openness of its insurance market and to adjust and improve market regulation and 
supervision. Therefore it is hard to make furt her commitments at present. However, reform and 
opening-up will always be the basic strategy for th e development of China's insurance industry, and 
China will push forward the opening-up of the sector in  future in light of the development of the 
market.  
(iii) Telecommunications  
(Question 6: Page 87, paragraph 83) 
Japan appreciates China's relaxing restrictions on  foreign equity participation. The demand 
from Japanese industries in the telecommunicati on service sector, especially in data center 
hosting services, is rapidly growing. Foreign pa rticipation is now allowed up to 50% for value-
added telecommunication services, but Japan woul d like to request China if it has any future 
plans to relax further the restrictions on foreign e quity participation, especially in this sector. 
Answer 
China made a commitment on opening value-adde d telecommunication services when entering the 
WTO, with the foreign equity participation no more than 50%. As a developing country, China 
believes that the commitment is already at a rela tively high level. Currently China does not have a 
plan to relax this restriction on foreign equity participation. In addition, China's WTO accession 
commitments do not include the opening-up of the data center hosting services.   
(iv) Transport services  
(Question 7: Page 91 – 92, paragraph 100) 
It is said that that a less favourable landing fee is imposed on foreign air lines at some airports in 
China compared that for Chinese airlines. This  discriminatory measure creates an unnecessary 
burden and extra operation costs for foreign airlin es. Does China plan to eliminate this measure 
with a view to facilitating trade? WT/TPR/M/230/Add.1 
Page 324  
 
  Answer 
The plan to reform the charges of civil airports  has been implemented since 1 March 2008. The plan 
observes the principle of non-discrimination and w ill gradually unify the standards for charges by 
airports for international flights of both Chinese ai rlines and foreign airlines. The reform is currently 
under way. 
(iv) Other services  
(Question 8: Page 98, paragraph 136) 
(1) Japan has long been interested in wholesale  services, and is aware of China's efforts to 
relax restrictions in that area. However, regardi ng the licensing procedures for expanding the 
scope of business, Japan has found that some procedures remain unclear and untransparent; 
for example, the documents required vary in type or numbers depending on the officials 
contacted. Are there any future plans to improve the transparency of such procedures? 
Answer 
The Chinese Government has always dedicated itsel f to enhancing transparency. Delegation of the 
authority of examination and approval over foreign investment projects to the local government at the 
provincial level aims to simplifying administ rative procedures and improving examination and 
approval efficiency, thereby reducing the time fo r foreign investors to obtain the approval and 
facilitating their investment in China. At the same  time, the Chinese Government will also strengthen 
training over local examination a nd approval authorities and their st aff and gradually promote the 
adoption of standardized examination and approval.  
(2) China is committed to opening its reta iling services following the GATS schedule, yet 
Japan understands that the minimum capital re quirements for foreign companies to obtain 
permission to expand and open new retail premis es are so high that they can be deemed 
discriminatory. Japan would like to suggest th at such measures would impose huge burdens 
only on foreign companies, and so may be incons istent with China's schedule of commitments as 
well as the obligation of NT. 
Answer 
On the question of the minimum capital requirements for foreign companies to develop retail business 
in China, according to the Measures for Administration of Foreign Investment in Commercial Fields  
(MOFCOM Decree No. 8 of 2004) and other relevant rules, a foreign-funded commercial enterprise 
shall meet the following conditions for developm ent of retail business in China: the minimum 
registered capital shall be in compliance with the provisions of the Company Law  as well as relevant 
provisions regarding the proportion between register ed capital and aggregate investment; the foreign-
funded commercial enterprise shall follow relevant  provisions concerning urban development when 
establishing premises to engage in retail services in China; the foreign-funded  commercial enterprise, 
the incorporation of which is approved, shall be subject to and pass the annual joint examination for 
enterprises before applying for establishment of new pr emises in China, and its registered capital shall 
be fully paid up. It can be seen from the above that  minimum requirement for registered capital is no 
different between domestic and foreign-invested re tail enterprises. The requirement therefore is not 
inconsistent with China's WTO accession commitments.  WT/TPR/M/230/Add.1 
 Page 325 
 
 
  JAPAN – Part 4  
Report by the Secretariat (WT/TPR/S/230) 
III T RADE POLICY AND PRACTICES BY MEASURE  
(4) M EASURES AFFECTING PRODUCTION AND TRADE  
(iv) Competition and consumer protection policy (Question 1:  Page 59 - 60, paragraph 144 - 145) 
As all merger cases which were approved with  conditions or rejected by MOFCOM are those 
which were related with foreign companies since the enforcement of the Anti-Monopoly Law on 
1 August 2008, Japan is concerned about the lack  of transparency of the procedures in the 
publications of the results of the review by MOFCOM. In addition, it seems that merger review procedure is functioned in order to protect national industries.  
(1) Please clarify whether any government agencies other than MOFCOM involved in the 
above-mentioned cases or not. 
Answer MOFCOM is the anti-monopoly law en forcement agency responsible for the review of concentration 
of business operators (undertakings).  
(2) Japan would like to know some concrete me asures which China plans to take to improve 
transparency and predictability of th e merger review procedures of MOFCOM. 
Answer 
Measures on the Notification of Concentration of Undertakings  (hereinafter referred to as 
"Notification Measures") and Measures on the Examination of Concentration of Undertakings  
(hereinafter referred to as "Examination Measures") were promulgated by Ministry of Commerce on 21 November 2009 and entered into force on 1 January 2010. "Notification Measures" and 
"Examination Measures" are rules formulated by Ministry of Commerce on the basis of Anti 
Monopoly Law  and Provisions of the State Council on Thresholds for Prior Notification of 
Concentrations of Undertakings , and are important part of  supporting legislation of Anti Monopoly 
Law. The two rules contain specific provisions on  the meaning and the calculation method of 
turnover, obligor of notification, consultation pr ior to notification, requirements for notification 
documents, objections and restrictive conditions, furt her review, implementation and supervision, etc. 
Based on that, Ministry of Commerce also promulgated the decisions to prohibit concentration of 
undertakings and to impose restrictive conditions on concentration of undertakings. To facilitate the 
understanding by the general public of these review decisions, Ministry of Commerce made adequate 
explanations on the filing of cases, reviewing process,  legal basis, etc, and made further explanation 
through media on major cases.  
China's answers to Japan's questions
 
(Question 2: Question 1 of Vol.1) (1) Regarding the special preference tariffs to LDCs, (i) as China answers that the 
treatment is "duty-free", is it QUOTA-FREE as well? (ii) As China answers that 5% tariff lines 
are excluded from the treatment, please provide us with information of the products which are 
not covered by the treatment and the reasons  why they are excluded, one by one and 
specifically. WT/TPR/M/230/Add.1 
Page 326  
 
  Answer 
At present, most products imported by China from LD Cs are not subject to quota. The scope of the 
5% products is not finally decided yet.  
(2) Regarding the suspension of the preferenti al tariff treatment to LDCs triggered by a 
sharp increase of imports, (i) has China ever terminated the treatment to certain product 
through this suspension scheme? (ii) If the trea tment is suspended, how long does the suspension 
last? In other words, when does the suspension end?  
Answer By the end of June 2010, China had not taken an y safeguard measures under the special preferential 
treatment framework. Regarding how the safeguard me asures will be implemented, China will decide 
through consultations in accordance with relevant pr ovisions in the letters exchanged with the related 
countries on the provision of special preferentia l tariff treatment by the Chinese Government.  
(Question 3: Question 3 of Vol.1) 
(1) (i)Please provide us with China's objective of setting the General rate. (ii) Do both the 
"conventional tariff" (in China's answer) a nd the "agreement-tariff rate" (in the secretariat 
report para17) mean the WTO bound rate? 
Answer Preliminary translation of the answer to the origin al question 3 is adjusted for purpose of translation 
accuracy. Please firstly refer to the adjusted translation of the answer. According to the Regulations 
on Import and Export Duties , the MFN tariff rates shall apply to imported goods originating in WTO 
members to which the MFN treatment is applied, and imported goods originating in countries or 
regions that have entered into bilateral trade agreements with China containing reciprocal MFN 
treatment clause, and also imported goods originati ng in the customs territory of China. Agreement-
tariff rates shall apply to imported goods originatin g in countries or regions with which China has 
entered into a regional trade agreement containing pr eferential tariff clauses. Special preferential tariff 
rates shall apply to imported goods originating in countries or regions with which China has entered 
into trade agreements which contain special tariff preference clauses. General tariff rates shall apply 
to imported goods originating in countries or regi ons other than the above-mentioned cases and also to 
those of undetermined origins. Besides, "conventiona l tariff rate" is not the correct translation, it 
should rather be translated as "agreement-tariff rate", and the term is not the WTO bound rate. 
(2) Regarding interim tariffs, (i) China answers th at the rate is determined "in line with the 
national economic development". Please provide us with the more detailed definition of "the 
national economic development" and describe th e concrete reasons why the interim rates have 
to be set on each product. (ii) How often and in what way is the review of the interim tariffs 
scheme is conducted? Does each interim rate e nd automatically when the applicable period 
ends? Or are there any chances that each interi m rate ends based upon results of the review, 
even during the applicable period? 
Answer 
The Customs Tariff Commission of the State Council ma kes decisions on interim tariffs in respect of 
applicable goods, rates to be applied and period of application. Interim tariff rates are determined in 
line with the national economic development, in cluding the production, consumption, import and 
export, etc. of relevant products.  WT/TPR/M/230/Add.1 
 Page 327 
 
 
  (3) Regarding the example of the interim tari ff on neem oil and its abstracted products, 
which is mentioned in the China's answer, please describe (i) whether the interim tariff rate was 
lower than the MFN rate, (ii)the rationale of the du ty rate, (iii)why the interim rate needed to be 
set, (iv) why the applicable period was three years (from 2006 to 2008), in other words, the 
rationale of the period, and(v)why the in terim rate needed to be abolished. 
Answer The reason to apply interim tariff on neem oil was that a large number of Melia azedarach trees were 
planted in Yunnan Province for the purposes of envi ronment protection and ecological development. 
In order to consolidate the work, neem oil pro cessing enterprises were set up simultaneously within 
the planting areas. As the Melia azedarach trees were not able to yield adequate neem oil in the first 
three years, China applied interim tariff (lower  than the MFN rate) on imported neem oil from 2006 
to 2008. Since 2008, the Melia azedarach trees can  supply enough neem oil, and the interim tariff 
was abolished. 
(Question 4: Question 11 of Vol.1) 
Japan appreciates the 8-digit HS list of the sawn timber subject to quotas. Please provide 
detailed information on these quotas (e.g. the quantity of the quotas, how the system is 
operated), and the reason why Chin a maintains such a restriction. 
Answer 
Please refer to the QR notifications China submits annually to the WTO. 
(Question 5: Question 12 of Vol.1) 
Although Japan appreciates the reply concerning paragraphs 85 and 86, it seems that China's 
answer in a general manner doesn't apply to the cases for agricultural products referred to in 
Table III.3, which are subject to export quotas (r ice, maize, wheat, cotton, maize flours, rice 
flours and wheat flours) or licensing (beef, po rk and chicken meat).Japan would like to know 
the reasons why these agricultural products are s ubject to export quotas or import licensing. 
Answer 
Regarding food, in recent years, due to factors su ch as the climate change, world food output is not 
stable, food prices fluctuate in the international ma rket, and food security is under a severe condition. 
China is a large developing nation with 1.3 b illion people, supporting 22% of the world population 
with only 7% land resources of the world. In order to safeguard national food security, China administers the export of major food products through quota.  
Regarding cotton, since China's reform and opening-u p, the textile industry in China develops rapidly 
and its self-produced cotton can only meet 60% of the demand. Cotton is imported in large amount, 
which accounts for one third of the global cotton trade each year. The textile industry employs more 
than 20 million people, 80% of whom are migrant workers from under-developed and remote areas. 
Ensuring the stable supply of cotton in textile indus try is of great significance for China to address the 
employment issue, guarantee the income of people from less developed areas and maintain social 
stability at large. It is under the above-mentioned context that the Chinese Government administers 
the export of cotton as a preventive measure to av oid possible shortage of cotton supply and the 
serious consequences thereof. WT/TPR/M/230/Add.1 
Page 328  
 
  (Question 6: Question 21 of Vol.1) 
As Japan questions, "Is it possible to claim for a withdrawal of a GI protection registered with 
these agencies if their GI does not fulfill the re quirement of Article 22.1 of TRIPS Agreement n 
the future?" in Question 21 of Vol. 1, China has not answered it yet. Japan waits China's reply 
in a manner consistent with the appropriate due-process. 
Answer The geographical indication protection is under way by the State Administration for Industry and 
Commerce, the Ministry of Agriculture, and AQSIQ. However, they differ from each other in legal 
basis, protection means and scope, legal remedies, separation of duty and work focus. Accordingly, 
withdraw of a GI is to be dealt with separately. 
(Question 7: Question 22 of Vol.1) 
As Japan appreciates China's answer for Ques tion 22, we understand the situation surrounding 
non-voluntary license of "layout design". In relation to this question, please describe the number of application and rejection of other IPR licenses. It would be also appreciated if China 
gives the reason of rejection. 
Answer 
China has not issued any compulsory  license concerning patent so far.  
(Question 8: Question 28 of Vol.1) Regarding the MLPS program, Japan believes that it  could greatly affect exports and provision 
of services. As Japan recognizes that pilot projects are currently implemented based on the 
program, it would be appreciated if China could explain what China plans for the further 
implementation of the program. Japan would also be grateful if China could provide 
information as to where further and more comp rehensive information regarding the specific 
measures included in the program (i.e. a websit e providing information.) can be obtained. 
Answer For information concerning MLPS, please refer to the website of China's Ministry of Public Security 
http://www.cspec.gov.cn/Release/Default.aspx. 
(Question 9: Question 26 of Vol.1) 
Japan thanks for the reply to our question on  the direct subsidy. We understand that "the 
direct subsidy" classified as "Green Box" is the subsidy which is mentioned in the notification to the Committee on Agriculture, G/AG/N/CHN/18, which states that the amount of direct 
payment is determined by the acreage of the land owned by the qualified farmers. Would China 
indicate how this measure meets the requirement of Para. 6(d) in Annex 2 of the Agreement on 
Agriculture? In addition, would China also indi cate how the amount of payment per acreage is 
determined? 
Answer 
The direct subsidy granted by the Chinese Government  to farmers is basically determined according 
to the taxed acreages of the cultivated land and th e amounts each year remain basically unchanged.  WT/TPR/M/230/Add.1 
 Page 329 
 
 
  Such subsidy is not related to production and does not distort trade. Therefore it meets relevant 
requirements of the Agreement on Agriculture on "Green Box." 
(Question 10: Question 29(1) of Vol.1) 
China explained that the loan-deposit ratio requirement fell into the category of prudential 
requirement. However, we reiterate that there m ay be concerns whether the loan-deposit ratio 
requirement could impose huge burden only on foreign-funded banks, which may cause 
inconsistency with China's schedule of commitments, namely with the obligation of NT. 
Therefore, please explain whether NT is secured in relation to this requirement. 
Answer 
The loan-deposit ratio requirement applies equally  to both domestic and foreign-funded banks, which 
means that national treatment is guaranteed. 
(Question 11: Question 38(1) of Vol.1) China explained that foreign equity ownership in  China's life insurance market shall be no 
more than 50%, and we understand that such China's policy is consistent with China's WTO 
commitment. However, considering that there is no limitation of foreign equity for non-life 
insurance services, the above-mentioned limitation in life insurance market could be eliminated. 
Please provide reasonable explanation on putting  such large difference in the limitations 
between those two markets. 
Answer 
Limitation on foreign equity ownership for life in surance services is the result of negotiations for 
China's accession into WTO. Whether and how lif e insurance market will be open in the future 
depends on the development and im provement of the financial market and the regulatory system in 
China. 
(Question 12: Question 43(1) of Vol.1) According to the explanation by China, China w ill safeguard the legitimate rights and interests 
on the supply of financial information services by foreign institutions and facilitate the supply of 
financial information services pursuant to "New Pr ovisions on the Administration of Provision 
of Financial Information Services in China by Foreign Institutions". Please explain whether NT 
is secured in supplying financial information services at this juncture. 
Answer 
In accordance with the Provisions on Administration of Provis ion of Financial Information Services 
in China by Foreign Institutions  promulgated by the State Council Information Office together with 
other government agencies, the Chinese Government  protects in accordance with law the legitimate 
rights and interests of foreign institutions in re lation to their provision of financial information 
services in China and will facilitate their provision  of financial information services in China in 
accordance with law.  
(Question 13: Question 47 of Vol.1) 
Since we have not been able to find, at any website, English version of the China's regulations 
listed in the answer, such as "Regulation on the Interconnection between Public WT/TPR/M/230/Add.1 
Page 330  
 
  Telecommunication Networks", please provide URL  for us to get an English version of the 
regulations. If China does not have English versi on in website, please provide the document in 
English. In case China does not have English ve rsion of the document, please provide us with 
Chinese version. Also, as Japan recognizes th at China Telecom, China Mobile, and China 
Unicom are included in the "dominant carriers", Japan would like China to answer whether this understanding is correct or not.  
Answer 
In China's answer to question 46 of  Vol.1, it was already said that the Chinese version of the rules are 
available at the website of Ministry of Industry and Information Technology (www.miit.gov.cn ). 
With the accelerating integration of technologies a nd the internet, it is a new question to identify 
"dominant carriers" based on the definition of "rel evant market." China has not determined who the 
dominant carriers are in the telecommunication industry. 
(Question 14: Question 49 of Vol.1) Regarding the explanation of China stating "the specific regulations on the service coverage and 
scope of providers are being studied and formul ated by the competent authorities", please 
provide a possible explanation on the prospect when the specific regulations will be formulated. 
Answer Relevant rules are to be formulated in accordance with statutory procedures. At present it is hard to 
tell when the specific rule will be promulgated.  
(Question 15: Question 52(5) of Vol.1) 
Japan would like ask China, again, to provide full explanation on the validity of the measure in 
light of China's schedule of commitments in ad vertising services, since the answer provided by 
China has explained only the contents of the measure and the above-mentioned validity has not 
been referred at all. Besides, if the measur e is supposed to remain unchanged, please explain 
how it can be justified in light of subparagraph 2( a) or 2(e) of the article 16, and the article 17, 
of the GATS. 
Answer 
A rule will remain effective as long as there is no invalidation date explicitly specified. China's 
Services Schedule contains provisions and commitments on advertising services (CPC871). The 
regulations and rules concerning advertising services now in China are consistent with these 
provisions and commitments. 
(Question 16: Question 8 of Vol.2) 
Please provide China's view on the situation where there are no foreign professionals with 
qualification of architects in China. Japan would like to know if any China's measures which 
have created these difficulties for foreigners are consistent with China's schedule of 
commitments in architectural services. 
Answer Foreign professional services providers with the quali fication of architects enjoy national treatment in 
China, which is consistent with China's commi tments in architectural services in the Services  WT/TPR/M/230/Add.1 
 Page 331 
 
 
  Schedule. In fact, a lot of architectural designs in  China in recent years are undertaken by foreign 
professional services providers. 
Japan and China have not entered into reciprocal  agreements in relation to the examination and 
registration of architects, Japanese professional arch itects at this stage cannot obtain the qualification 
of Chinese registered architects. 
China's answers to questions from the United States  
(Question 17: Question 24 from the United States (p.175)) 
Please provide details on how China's draft on th e criteria for accrediting domestic products for 
government procurement, which would stipulate pr ovisions on local content, will not constitute 
a market access barrier to products made outside China. 
Answer The Administrative Measures on Government Pr ocurement of Domestic Products (Draft)  concerns the 
accreditation of products produced within the customs territory of China and it does not involve imported products. 
CANADA
 
Report by the Government  of China (WT/TPR/G/230) 
Part II. General Economic Environment and Policy Direction; (3) Promoting the 
Transformation of the Pattern of Economic Development; (iii) Advancing strategies for 
scientific and technological innovation and intellectual property rights; paragraph 37, page 12: 
Could China please outline what specific measures or actions were taken to strengthen the 
efforts of law enforcement to protect intellectual property rights in China? 
Answer 
After the release of the Outline of National Intellectual Property Rights Strategy  in June 2008, the 
Chinese government has taken great efforts to promote the implementation of the Outline  and 
strengthen IPR protection.  
The Chinese government has set up an inter-minis terial joint conference mechanism involving 
28 government agencies for national IPR strategy im plementation. It develops annual IPR strategy 
implementation plans to safeguard the implementation of various tasks. In 2009, it carried out and 
completed more than 200 tasks, formulated and revised 54 pieces of IPR-re lated laws, regulations, 
rules and administrative measures, issued 82 major policies and measures, carried out 23 law 
enforcement actions, and established 28 public service platforms. IPR strategy implementation also 
moves forward steadily in various sectors and local  areas. Initial progress has been made for the 
achievement of the goal set in the Outline .  
The Chinese government will continue promoting IPR strategy implementation. On the one hand, it 
will focus on solving outstanding issues which are of  major concern to the general public, carry out 
special operations and in-depth investigation into major cases; on the other hand, it will continue to 
improve IPR system including relevant laws and re gulations so as to build a long-term IPR protection 
mechanism.  WT/TPR/M/230/Add.1 
Page 332  
 
  Take copyright as an example. National Copyright Administration (NCA), Ministry of Public Security 
(MPS), and Ministry of Industry and Information T echnology (MIIT) have jointly carried out special 
operations to combat Internet IPR infringement and piracy for five consecutive years since 2005. 
From August to November 2009, NCA, MPS and MIIT jointly carried out the fifth special operation against Internet IPR infringement and piracy, exercising active supervision over a total of 3130 key 
websites. Local copyright administrations, police and industry & information technology authorities 
jointly investigated and handled a total of 558 In ternet IPR infringement cases, investigated and 
punished 50 websites involved in network IPR infringe ment, shut down 375 illegal websites, issued 
556 temporary enforcement orders to remove or sh ield contents infringing upon the IPRs, imposed 
fines of 1.3375 million Yuan, confiscated 163 intern et servers, and transferred 25 major suspected 
criminal cases to judicial authorities.  
Report by the Secretariat (WT/TPR/S/230) 
Part I. Economic Environment; (3) Structural Policies; paragraph 32, page 9: The Secretariat Report outlines China's polic y of keeping input prices low in order to 
emphasize the development of heavy industry. The report notes the relationship between low 
input prices and overcapacity, esp ecially in heavy industry.  
2. With respect to electricity prices, could Ch ina explain its national and local government 
policies on electricity rates?  
Answer 
In accordance with the commitments  that China made upon accession, electricity price is subject to 
state pricing. Pursuant to the Electricity Law and the Pricing Law , general principles followed by the 
government when setting the prices are as follows. Firs tly, loss due to cost should be compensated in 
a rational manner; secondly, profits should be modera te; thirdly, tax should be included in the price; 
fourthly, all related parties shoul d share the burden in a fair manner. Since 2004, China has adopted a 
mechanism for adjusting electricity price that w as established on the correlation between electricity 
price and coal price, the latter has been fully libera lized. It should be noted that in recent years, the 
operation of power generating enterprises and grid enterprises has been sound and profitable, and 
there has been no such case where electricity  was sold below electricity supply cost.  
Depending on end users, electricity price can be divided into price for industry use, price for 
residential use, price for agricultural use and price for common businesses use. In term of electricity supply cost, electricity for residential use costs the most, with that for common business the second 
and that for industry the lowest. Therefore, electricity price for heavy industry is the lowest among all 
kinds of electricity prices.  
3. What changes have been made at the national and local level in order to facilitate the 
elimination of overcapacity in the steel sector?  
Answer 
Solving overcapacity issue is one of the most importa nt tasks in the steel sect or. To this end, China 
has taken great efforts to eliminate backward pr oduction capacity. The conso lidation and development 
of iron and steel industry is now based on the pr econdition of elimination of backward production 
capacity. In 2009, China eliminated backward steel  production capacity of 16.91 million tons and 
backward iron production capacity of 21.13 million tons . The continuous effort to eliminate backward 
production capacity has a positive effect on solving over capacity issue in the iron and steel industry.  WT/TPR/M/230/Add.1 
 Page 333 
 
 
  Part I. Economic Environment; (3) Structural Policies; paragraph 34, page 10: 
The Secretariat Report makes reference to the September 2009 announcement of the State 
Council to cut back expansion in certain key indus tries. On this subject the National Reform 
and Development Commission (NDRC) in their repo rt to the National People's Congress in arch 
of this year announced that China had closed backward production, am ounting to 16.91 million 
tons of iron ore and iron foundries with a to tal capacity of 21.13 million tons. The NDRC 
further announced that China will shut down back ward capacity of 6 million tons of steel and 
25 million tons of iron foundries.  
4. Could China please provide data on how mu ch capacity expansion in the steel industry 
has occurred alongside the elimination of backward capacity?  
Answer 
In 2009, there was 58 million tons of iron and steel  production capacity under construction in China. 
Since time is needed fo r capacities under-construction to go into mass production, the final statistical 
results of capacities going into production have not been  formally released at present. China plans to 
eliminate backward capacity of 30 million tons of  iron and 8.25 million tons of steel in 2010.  
Part II. Trade Policy Regime: Framework and Objectives; (2) Institutional and Legal 
Framework; (i) Transparency; paragraph 9, page 12: 
Canada appreciates the efforts made by the Chin ese authorities to improve the transparency of 
its laws, policies and practices. However, progress a ppears to be slow in aspects of China's trade 
policy regime, such as the application of tr ade remedy measures where China has become a 
major user.  
5. Could China please outline the details of the recent measures taken to improve 
transparency and what, if any, further measures are planned?  
Answer 
The Chinese government attaches grea t importance to the transparency of government work in the 
area of trade policies. All decrees and announcements  issued by Ministry of Commerce are available 
on its official website, so are the China Foreign Trade and Economic Cooperation Gazette  which 
contains trade-related laws, regulations, rules a nd measures, including announcements related to the 
implementation of trade remedy measures. Public  opinions would be solicited through various 
channels, including the official website, before the issuance of policies and measures. China also 
fulfills its notification obligation in the WTO. It submits notifications timely in most cases. In few 
areas where there are enormous practical difficulti es, China has also gradually set up working 
mechanisms to facilitate timely notification. In  the future, the Chinese government will further 
improve the transparency of its trade policies. 
Part II. Trade Policy Regime: Frameworks a nd Objectives; (2) Institutional and Legal 
Framework; (i) Transparency; paragraph 9, page 12: 
The Secretariat report mentions that some aspects of  China's trade policy regime remains complex and 
opaque, and thus can leave scope for administrative discretion and thus corruption.  According to a 
2008 Corruption Perceptions Index, which measures perceptions of corruption among public officials 
and politicians in 180 countries, Ch ina ranked 72nd, with a score of 3.6 out of 10;  in 2005, it ranked 
78th (out of 159 countries) with a score of 3.2.   WT/TPR/M/230/Add.1 
Page 334  
 
  6. Could China elaborate on the various measures it adopted recently to enhance 
transparency in the public sector?  
Answer 
The Chinese government attaches great importance to the transparency of government work. The 
main points can be summarized as follows:  
First, conscientiously fulfill accession commitments  on transparency. After accession into the WTO, 
the Chinese government designated China Foreign Trade and Economic Cooperation Gazette  as the 
official periodical for publishing trade-related laws , regulations, rules and measures on trade in goods, 
trade in services, trade-related intellectual prope rty rights and foreign exchange control. By 
19 May 2010, Ministry of Commence had issued 586 volumes of the Gazette  publishing thousands of 
laws, regulations, rules and measures. The Gazette  is available on the official website of Ministry of 
Commerce at http://www.mofcom.gov.cn. In addition, laws and regulations enacted by the Chinese 
government can also be found at least at the following websites, http://www.gov.cn and http://www.chinalaw.gov.cn.  
Second, continuously improve the transparency of legislative process and involve more public 
participation. According to the Legislation Law which entered into force in 2000, legislative openness 
has become a basic principle to be followed in government legislation activities. Public opinion 
solicitation has become a common practice in the process of drafting laws and regulations. The Legislative Affairs Office of the State Council h as set up a system for collecting public opinions on 
draft regulations and rules at its official website . Many government agencies have also set up opinion 
collection columns on their own official websites.  In April 2008, the Standing Committee of the 
National People's Congress (NPC) made a decision saying that all draft laws subject to the 
deliberation of the NPC Standing Committee s hould be published for public comments and opinions.  
Third, improve further the legal system for governme nt information disclosure to enhance publicity of 
government affairs. According to the requirements and arrangements of the Central Government on 
the work of government affairs publicity, government s and their departments at all levels are actively 
promoting government affairs publicity by various m eans such as official gazette, government affairs 
guidance, public hearing, press conference, expert  advice and so on. Generally, governments and their 
departments at all levels have opened their own websites. The Central Government also officially 
opened its portal website on 1 Ja nuary 2006 at http://www.gov.cn. The Regulations on Government 
Information Release  came into force on 1 May 2008, which would further increase the transparency 
of government work.  
Part II. Trade Policy Regime: Framework and Objectives; (2) Institutional and Legal 
Framework; (i) Transparency; paragraph 10, page 12: 
The Secretariat Report notes that all foreign trade-related laws, regulations, and rules are 
published in the China Foreign Trade and Economic Gazette, edited and published by MOFCOM. In its WTO Accession Protocol, China committed to "establish or designate an 
official journal dedicated to the publication of all laws, regulations and other measures 
pertaining to or affecting trade in goods, servic es, TRIPS or the control of foreign exchange 
and, after the publication of its laws, regulations  or other measures, in such journal, shall 
provide a reasonable period for comment to th e appropriate authorities before such measures 
are implemented…". Based on Canada's monito ring in 2008 and 2009, the Gazette publishes 
only some of those laws, regulations and rules.  A large number of trade policies, measures and 
circulars are routinely released on various govern ment ministry websites, such as those of 
MOFCOM, Ministry of Finance, MIIT, and the State Administration for Taxation, but not 
published in the Gazette.   WT/TPR/M/230/Add.1 
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  7. Could China please explain what criteria are used to determine which laws, regulations 
or rules are published in the Gazette?  
Answer 
According to China's WTO Accession Protocol, China Foreign Trade and Economic Cooperation 
Gazette  publishes collectively all the laws, regulations, rules and measures relevant to or affecting 
trade in goods, trade in services, TRIPS or foreign exchange control. All the laws, regulations, rules 
and measures published in China Foreign Trade and Economic Cooperation Gazette  are from various 
departments of the Chinese government. By 19 May 2010 Ministry of Commence had issued 586 
volumes of the Gazette  publishing thousands of laws, regul ations, rules and measures. The Gazette  is 
available at the official website of Mi nistry of Commerce http://www.mofcom.gov.cn. 
8. Does China intend to make the Gazette an ex haustive source of all trade-related policies 
and laws, regulations and rules, not just th ose narrowly defined as "foreign trade"?  
9. If so, what steps are planned and what is the target timeframe to achieve this goal?  
Answer (for Questions 8 and 9) 
China Foreign Trade and Economic Cooperation Gazette  is used for publishing collectively all the 
laws, regulations, rules and measures relevant to or  affecting trade in goods, trade in services, TRIPS 
or foreign exchange control. It does not replace official bulletins and other official information 
dissemination channels of vari ous government departments. 
Part II. Trade Policy Regime: Framework and Objectives; (2) Institutional and Legal 
Framework; (i) Transparency; paragraph 10, page 12: 
The Secretariat report notes that "All foreign trade-related laws, regulations, and rules are 
published in the China Foreign Trade and Economic Gazette, edited and published by 
MOFCOM. Enquiry points and enquiry websit es are established under the MOFCOM and the 
General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ).  It was 
not clear to the Secretariat which regulations are not published or why." 
10. Could China elaborate on which type of regulations are not published and why? 
Answer 
The laws, regulations and departmental rules of the Chinese government can be found at least at the 
following websites of http://www.gov.cn and http:/ /www.chinalaw.gov.cn. The laws, regulations, 
rules and other measures related to national security , specific measures setting foreign exchange rates 
or monetary policies as well as those laws, regula tions, rules and measures the publication of which 
would impede their implementation and enforcement will not be published.  
Part II. Trade Policy Regime: Framework and Objectives; (2) Institutional and Legal 
Framework; (i) Transparency; paragraph 12, page 13: 
According to Canadian analysis, in 2009, the Na tional People's Congress and the Legislative 
Office of the State Council published 11 draft laws, 23 draft administrative regulations and 50 draft departmental rules for public comment.  In addition, the ministries under the State 
Council issued numerous draft rules for public comment. However, there are notable gaps in 
publication for public comments and some laws, re gulations and rules are enacted retroactively 
or with immediate effect.  WT/TPR/M/230/Add.1 
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  11. Could China please explain under what co nditions it publishes draft trade laws, 
regulations and rules for public comments?  
12. What steps is China taking in order to ensure a consistent public consultation period 
and a reasonable period of time before implementation?  
Answer The Legislation Law , the Regulations on Procedures for Formulation of Administrative Regulation 
and the Regulations on Procedures for Formulation of Rules  all include detailed provisions on ways 
and means of public opinion solicitation when laws , regulations, rules and measures are drafted.   
For example, Article 12 of the Regulations on Procedures for Formulation of Administrative 
Regulation stipulates that the drafting of administrativ e regulations shall be based on in-depth 
investigation and study, learning from practices an d experiences, and extensive consultations with 
agencies, organizations and citizens. Public opinions may be collected through various means 
including symposia, presentations and hearings. Article 15 of the Regulations on Procedures for 
Formulation of Rules  stipulates that if government agencies, associations or citizens differ on draft 
rules or regulation that has direct bearings on the interest of citizens and legal persons as well as other 
organizations, the draft should be made open to p ublic 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 citizen s 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 provide d by the speaker, and the competent authority for 
the drafting of the rule shall take into considera tion of the opinions solicited in the hearing and should 
attach an introductory note to its handling and th e rational of the handling of the solicited opinions 
when the draft rule is submitted for approval. 
At present, soliciting public opinions has become a common practice in drafting the laws and 
regulations. A system for soliciting public opinions on drafts of rules and regulations is set up on the 
website of the Legislative Affairs Office of th e State Council. Special columns on soliciting public 
opinions are also available in the official websit es of many ministries and government agencies. The 
Standing Committee of the National People's Congress (N PC) also made a decision in April 2008 that 
from then on all draft laws subject to the delib eration of the NPC Standing Committee should be 
published for public comments and opinions. 
Part II. Trade Policy Regime: Framework and Obj ectives; (3) Formulation, Administration and 
Implementation of Trade Policy; (ii) Agencies involved in trade policy; paragraph 17, page 14: 
The Secretariat report states that "Several indus try associations also collect and share 
information, identify and deal with problems rel ated to industries, discuss trade policy issues 
that affect their industries, and represent th eir sectors in relation to Government".  
Could China please provide further detail on th e relationship between the Government and the 
various industry associations indicated as it applied to the formulation, implementation and 
administration of trade policy laws, policies and measures?  
Answer 
 When laws, regulations, rules and measures are dr afted, the drafting authority will solicit public 
opinions through various means including workshops,  symposia, presentations and hearings for in-
depth investigation and study, learning from practices and experiences, and having extensive  WT/TPR/M/230/Add.1 
 Page 337 
 
 
  consultations with agencies, organizations and c itizens. In the process of sharing opinions on the 
drafts with the drafting authorities, the function of an industry association, as one of the interested parties, is no different from other parties, such as experts, scholars and enterprise from both home and 
abroad.  
Part II. Trade Policy Regime: Framework and Objectives: (5) Trade Agreements and 
Arrangements; (ii) Regional Arrangements; (c ) China and ASEAN (Association of Southeast 
Asian Nations); paragraph 27, pages 16 and 17: 
The Secretariat report references China's regional trade arrangement with ASEAN, in the form 
of a China-ASEAN Free Trade Area (CAFTA), which includes among other goals "progressively eliminating tariff and non-tariff barriers to substantially all trade in goods" 
within ten years. The report states that, "two rounds of tariff reduction took place on 
1 January 2000 and 1 January 2010. In 2009, the sh are of duty-free tariff lines applicable to 
China's imports from individual ASEAN co untries ranged from 14.4% to 60.5%". 
14. Could China please provide an update on the status of tariff and non-tariff barrier 
elimination under the CAFTA?  
Answer 
4 rounds of tariff cuts were impl emented respectively on 1 July 2005,  1 January 2007, 1 January 2009 
and 1 January 2010. 91.5% of total imports from ASEAN countries are now enjoying zero tariff treatment. China and ASEAN are now discussing on non-tariff measures.  
15. What degree of tariff elimination (in term s of number of lines and trade volume; partial 
reduction versus full tariff elimination) is ulti mately anticipated by China under the CAFTA?  
Answer 
Under China-ASEAN FTA, tariff reduction will be concluded respectively in 2018 between China 
and 6 old ASEAN members and in 2020 between Chin a and 4 new ASEAN memb ers. After the tariff 
reduction, more than 90% of products (both in terms of tariff lines and trade volume) in both ways of 
trade will enjoy zero rate treatment.  
Part II. Trade Policy Regime: Framework and Objectives: (5) Trade Agreements and 
Arrangements; (iii) Bilateral Arrangements; (b ) China-Chile FTA; paragraph 31, page 18: 
The report references China's bilateral free trade agreement with Chile, specifically that 
"tariffs are to be eliminated within five or ten years, with 97% of both countries' tariffs eliminated by 1 January 2015. The two countries eliminated and reduced tariffs on 1 October 2006, 1 January 2007, 1 January 2008, and 1 January 2009 in accordance with the 
FTA".  
16. Could China please provide an update on the status of tariff elimination under its FTA 
with Chile? 
Answer 
In accordance with the China-Ch ile FTA, China and Chile both initiated the tariff reduction for 
commodity trade on 1 October 2006. Tariff was reduced for the fifth time under the FTA on 
1 January 2010, covering 2,706 tariff lines. After the tariff reduction, there are totally 7,029 tariff lines 
that implement the agreement tariff rates, with the average tariff rate being 1.3% and an average 
preference range of 87.7% compared with th at of the most favored nation tariff rates.  WT/TPR/M/230/Add.1 
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  Part II. Trade Policy Regime: Framework and Objectives: (5) Trade Agreements and 
Arrangements; (iii) Bilateral Arrangements; (f) China-Peru FTA; paragraph 35, page 20:  
The Secretariat report states that "the Chin a-Peru Free Trade Agreement was signed on 
28 April 2009; the Chinese authorities expect the agreement to enter into force in the first half 
of 2010; it has not been notified to the WTO".  
17. Could China please provide an update on the status of the implementation of the China-
Peru Agreement, and a sense of when the Ag reement will be notified to the WTO?  
Answer 
China-Peru FTA entered into force on 1 March 2010 and it has been notified to the WTO.  
Part II. Trade Policy Regime: Framework and Objectives: (5) Trade Agreements and 
Arrangements; (iii) Bilateral Arrangements; (g ) Other agreements; paragraph 37, page 20: 
The Secretariat report references China's bila teral free trade agreement negotiations with the 
Southern African Customs Union (SACU).  
18. Could China please provide an update on the status of these FTA negotiations with the 
Southern African Customs Union (SACU)?  
Answer 
China and SACU have not conducted subs tantial bilateral negotiations yet.  
Part II. Trade Policy Regime: Framework and Objectives: (5) Trade Agreements and 
Arrangements; (iii) Bilateral Arrangements; (g ) Other agreements; paragraph 38, page 20: 
The Secretariat report references China's bila teral free trade agreement negotiations with the 
Gulf Cooperation Council (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE).  
19. Could China please provide an update on the status of these FTA negotiations with the 
Gulf Cooperation Council (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE)?  
Answer 
Up till now, China and GCC have conduc ted 5 rounds of negations in ar eas of trade in goods, trade in 
services and also investment.  
Part II. Trade Policy Regime: Framework and Objectives: (5) Trade Agreements and 
Arrangements; (iii) Bilateral Arrangements; (g ) Other agreements; paragraph 39, page 20: 
The Secretariat report references China's bila teral free trade agreement negotiations with 
Iceland.  
20. Could China please provide an update on the status of these FTA negotiations with 
Iceland?  WT/TPR/M/230/Add.1 
 Page 339 
 
 
  Answer 
Up till now, China and Iceland have conducted 4 rounds of negations in areas of trade in goods, trade 
in services, investment and also economic cooperation. 
Part II. Trade Policy Regime: Framework and Objectives: (5) Trade Agreements and 
Arrangements; (iii) Bilateral Arrangements; (g ) Other agreements; paragraph 40, page 20: 
The Secretariat report references China's bila teral free trade agreement negotiations with 
Norway.  
21. Could China please provide an update on the status of these FTA negotiations with 
Norway?  
Answer Up till now, China and Norway have conducted 7 rounds  of negations in areas of trade in goods and 
services. 
Part II. Trade Policy Regime: Framework and Objectives: (5) Trade Agreements and 
Arrangements; (iii) Bilateral Arrangements; (g ) Other agreements; paragraph 42, page 20: 
The Secretariat report references China's "cross-straits economic cooperation framework 
agreement (ECFA)" negotiations with Chinese Taipei.  
22. Could China please provide an update on the status of the "cross-straits economic 
cooperation framework agreement (ECFA)" negotiations with Chinese Taipei? 
Answer 
 Up to 30 May, two rounds of expert discussi ons have been held on Cross-Strait Economic 
Cooperation Framework Agreement (ECFA) between Association fo r Relations across the Taiwan 
Strait (ARATS) and Straits Exch ange Foundation (SEF). The first expert discussion was held in 
Beijing on 26 March 2010, a nd the second was held from 31 March to 1 April.  
Part II. Trade Policy Regime: Framework and Objectives: (6) Foreign Investment Regime; 
paragraphs 45, 48, 49, page 21: 
In paragraph 45, China notes that during the period under review, a few new measures to 
further liberalize or facilitate FDI in China have  been adopted. Paragraphs 48 and 49 elaborate 
further on two, namely: (1) January 2009 amendmen t to the Catalogue of Priority Industries for 
Foreign Investment in Central-Western Region, which further opened up the coverage and scope of sectors for foreign investment, and (2) further streamlining to the policy of the 
delegating of authority to local governments which began in 2005.  
23. Could China please highlight the liberalizing changes in the encouraged category of the 
Catalogues for the Central-Western region?  
Answer 
Sectors included in the Catalogue of Advantaged Industries for Foreign Investment in Mid-West 
China  are treated as "encouraged category" for fore ign investment. Therefore, the revision of the 
Catalogue  itself embodied further liberalization. Compared with the old one, 126 new entries were WT/TPR/M/230/Add.1 
Page 340  
 
  added and 154 previous entries were modi fied in the current version of the Catalogue . Please visit 
http://www.ndrc.gov.cn/zcfb/zcfbl/2008ling/t20081224_2 53113.htm for detailed information of the 
2008 Catalogue . 
24. Could China please specify which industries (at the applicable review thresholds) are 
still subject to additional examinatio n and approval procedures from NDRC? 
Answer 
Pursuant to Chinese regulations and rules, foreign in vestment projects shall be verified and authorized 
by either central or local Development and Reform Commissions according to their respective 
responsibilities. Please refer to the Provisions on Guiding Direction of Foreign Investment  (State 
Council Decree No.346), the Interim Measures for the Admi nistration of Verification and 
Authorization of Foreign Investment Projects  (NDRC Decree No.22), the Catalogue for the Guidance 
of Industries for Foreign Investment  and the Catalogue of Advantaged Industries for Foreign 
Investment in Mid-West China for more information.  
Part II. Trade Policy Regime: Framework and Objectives; (6) Foreign Investment Regime; 
paragraph 48, page 21: 
The Secretariat Report notes that there has be en no change in China's Catalogue for the 
Guidance of Foreign Investment Industries. On April 13, 2010, the State Council stated that it intends to revise the 2007 Catalogue.  
25. Could China please confirm that the Cata logue will be published with a comments 
period and time to integrate changes before its final publication? 
26. When does China anticipate the draft publication and final promulgation?  
Answer 
Following the Certain Opinions from the State Council on Better Utilization of Foreign Investment , 
revision of the Catalogue for the Guidance of Industries for Foreign Investment  has just started . 
However, a detailed work plan and time framewo rk are yet to be decided after opinions are 
preliminarily solicited from interested parties a nd there is no timetable available at present. 
Part III. Trade Policies and Practices by Measu re; (1) Introduction; paragraph 9, page 25: 
27. With respect to the 'national security review' of China's Anti-Monopoly Law of 
1 August 2008, could China please explain what process is underway in order to clarify the provisions and in what timeframe? 
Answer 
China is now studying and drafting regulations on national security review over acquisitions of 
domestic enterprises by foreign investors. The regul ations would specify such details as competent 
authorities, review mechanism and procedures of the review etc. 
Part III. Trade Policies and Practices by Measur e; (2) Measures Directly Affecting Imports; 
(ii) Tariffs; (a) Overview: paragraph 17, page 26: 
The Secretariat report notes that "the Customs Tariff Commission of the State Council may set 
'interim' tariff rates, which are implemented on sp ecific products for a certain period of time".  WT/TPR/M/230/Add.1 
 Page 341 
 
 
  The footnote to this paragraph further not es that "where there are interim tariff rates on 
imported goods to which tariff-quota rates are a pplicable, the interim tariff rates apply".  
28. Are there cases in which the interim tariff rate is higher than the tariff-quota rate? 
29. If so, does the Customs Tariff Commission  of the State Council notify importers, 
through an official publication, of the date when interim tariff rates will be applied and the 
period of time over which they will be applied? 
Answer (for questions 28 and 29) 
No interim tariff rate is higher than TRQ in-quota rate.  
Part III. Trade Policies and Practices by Measure;  (2) Measures Directly Affecting Imports;(ii) 
Tariffs; (d) Tariff-rate quotas (TRQs); paragraph 25, page 32: 
The Secretariat Report indicates that in 2009, TRQs c ontinue to be applied to  8 categories of imported 
goods, involving 45 tariff lines at the HS 8-digit le vel.  This includes a TRQ for wheat (covering 
6 tariff lines) with a quota volume of 9,636,000 metric tonnes.  The Secretariat Report also notes (paragraph 38, page 35) that an STE accounted for 90 % of the total quota allocated for wheat. Further, 
note 1 in Section 1b of China's WTO bound tariff schedule outlines that the remaining 10% is 
allocated "to any non STE possessing the right to trade in any product as set forth in Section 5 of 
China's protocol of Accession". 
From 2006-2009 the average TRQ fill rate for Chin a's wheat TRQ was 4.3% (based on China's MA2 
notifications) with no year exceeding 10% fill.   
Canada would like to seek clarification from Chin a on the TRQ fill and operation of China wheat 
TRQ. 
30. Could China please outline the reasons for the low TRQ fill (less than 10%) from 2006-
2009? 
Answer 
Since China's accession into the WT O, China has allocated tariff ra te quotas of agricultural products 
according to its commitments. Enterprises that have  obtained quotas may decide whether to import the 
products at their own discretion based on market cond itions. In recent years, the filling of tariff rate 
quotas varies from product to product. For cotton, the 894,000 tons of quotas are filled every year. For 
corn, wheat and rice, due to abundant domestic s upply and stable market price based on the increase 
of grain output for six consecutive years since 2004,  enterprises do not have a strong import desire, 
leading to limited import volume.   
31. Could China please outline whether the im ports under their whea t TRQ from 2006-2009 
were made by the importing STE (with 90% of the TRQ volume allocation) or by a non STE 
possessing the right to trade in any product as set forth in Section 5 of China's protocol of Accession?  
Answer 
The Interim Measures for the Administration of Im port Tariff Rate Quotas of Agricultural Products 
amended in 2003 adopts the unified, fair, just, transparent, predictable and non-discriminatory 
principle for tariff rate quotas administration. In the application form for tariff rate quotas, there is a WT/TPR/M/230/Add.1 
Page 342  
 
  column requiring enterprises to indicate if they ag ree to disclose relevant information of themselves 
and their quotas obtained. On this question concer ning a specific enterprise, we have to respect 
opinions of the applicant enterprise 
Part III. Trade Policies and Practices by Measure: (2) Measures Directly Affecting Imports; (ii) 
Tariffs; (e) Tariff Exemptions and Re ductions: paragraph 27, page 33:  
32. Could China provide a complete list of  products subject to  import and export 
prohibitions under its processing trade regime? 
Answer 
Please refer to http://www.mofcom.gov.cn/aarticle/b/c/200906/ 20090606300331.html. 
33. Other than the list requested in Question 32, are there any other goods that do not 
qualify for duty-free importation under China's processing trade regime? 
Answer 
Since the feature of processing trade is bonded import, all products that are not subject to import 
and/or export prohibition under the processi ng trade regime may be imported in bond. 
34. What is the time period that an import ed good exempted from a tariff under China's 
processing trade regime can remain in the country before a duty is assessed? 
Answer 
Generally speaking one year, and two years at most. In accordance with the Measures of the Customs 
of the People's Republic of China on S upervision of Goods under Processing Trade 
(http://www.gov.cn/flfg/2008-01/16/content_859724.ht m), finished products under processing trade 
shall be re-exported within one year after the ha ndling of the processing trade manual. Extension of 
half a year can be granted upon application in case of  special circumstance of delay in performing the 
contract. A second extension of another half a year may also be granted upon application in case of 
further special circumstances. 
Part III. Trade Policies and Practices by Measur e: (2) Measures Directly Affecting Imports; 
(iv) Import Prohibitions and Licensing: paragraph 31, page 33 
The Secretariat report notes that China maintains import prohibitions on groun ds of public interest, 
environmental protection, or in accord ance with international commitments.  
35. Could China please advise which 'mineral pr oducts' and 'ash of precious metals' are 
either totally or partially prohibited a nd the reason(s) for each prohibition?  
Answer 
The notification on quantitative restrictions submitte d by China to WTO each year contains specific 
products subject to import prohibiti on and reasons thereof.  For products mentioned in the question, 
please refer to:  
 (1) The Catalogue of Products Subject to Import Prohibition (Third Batch) , 
Announcement No. 36 of 2001 promulgated jointly by the former Ministry of Foreign Trade and Economic Cooperation, the Gene ral Administration of Customs and the  WT/TPR/M/230/Add.1 
 Page 343 
 
 
  former State Administration of Envi ronmental Protection, available at 
http://wms.mofcom.gov.cn/aarticle/zcfb/ j/z/200208/ 20020800 036838.html; and  
 (2) The Catalogue of Products Subject to Impor t Prohibition (Fourth and Fifth Batches) , 
Announcement No. 25 of 2002 promulgated jointly by the former Ministry of Foreign Trade and Economic Cooperation, the Gene ral Administration of Customs and the 
former State Administration of Envi ronmental Protection, available at 
http://www.mofcom.gov.cn/aarticle /b/c /200404/20040400205769.html.  
The reason of prohibiting the import of mineral produc t cinders and waste as well as ash of precious 
metals used to retrieve metals is to protect  human life and health and also the environment.  
Part III. Trade Policies and Practices by Measur e: (2) Measures Directly Affecting Imports; 
(iv) Import Prohibitions and Licensing; (b) Licensing; paragraph 35, page 34: 
The Secretariat report indicates that China appli es automatic import licences to monitor certain 
imports for statistical purposes, concerning, inter alia , poultry and vegetable oil.  
36. Could China please provide information on al l of the ways in which it uses the statistics 
generated through the imposition of automatic im port licenses on poultry and vegetable oil?   
Answer 
The purpose of having automatic import licenses on pou ltry and vegetable oil is to monitor imports. 
The statistics generated thereof are to be used by the government al departments as well as by the 
importers, enterprises and individual users for them  to follow the prices and the demands and supplies 
of relevant products.  
Part III. Trade Policies and Practices by Measur e; (2) Measures Directly Affecting Imports; 
(vii) Standards and Other Technical Re quirements; paragraph 43, page 35: 
The Secretariat report notes that China has four  types of standards: national, professional, 
local, and enterprise standards.  
37. Could China please advise on the status of the National Forest Certification Standard, 
and the amount of land that has been certified? 
38. Could China please advise on how internat ional forest certification standards would be 
accepted in national procurement policies with regards to timber/forest product procurement.  
Answer (for questions 37 and 38) 
China issued international forest certification sta ndards in 2007, including forest management (FM) 
standards and Chain of Custody (COC) standards. In December 2009, the first forest certification 
body was established in China. So far, no for ests have been certified by the national forest 
certification system. 
Therefore, currently China's national procurement policy sets no forest certification requirements for 
lumber and forest products. China is studying on the feasibility of incorporating forest certification 
into national procurement policy, and by far Chin a has not yet implemented any procurement policy 
relevant to international forest certification. WT/TPR/M/230/Add.1 
Page 344  
 
  Part III. Trade Policies and Practices by Measur e; (2) Measures Directly Affecting Imports; 
(vii) Standards and Other Technical Requirement s; (a) Standards and Technical Regulations; 
paragraphs 43-46, page 35-36: 
The Secretariat's report mentions, in paragraph 43, that China has voluntary and mandatory 
standards and that "In 2007, (the latest year fo r which data were available), around 14.5% of 
national standards, 15% of professional st andards, and 19% of local standard were 
mandatory." The Secretariat report also states that 46.5% of China's national mandatory 
standards are equivalent to international st andards (Secretariat's report, paragraph 46, 
page 36).  
39. Could China please elaborate on the revisions it has made to the Measures of 
International Standards in order to reinforce the alignment with international standards? 
Also, the Technical Barriers to Trade (TBT) Agr eement establishes that the difference between 
a standard and a technical regulation lies in compliance. While conformity with standards is 
voluntary , technical regulations are by nature mandato ry. They have different implications for 
international trade. If an imported product does not fulfil the requirements of a technical 
regulation, it will not be allowed to be put on  sale. In the case of st andards, non-complying 
imported products will be allowed on the market, but then their market share may be affected if 
consumers' prefer products that meet local st andards such as quality or colour standards for 
textiles and clothing.  
40. Could China please define "mandatory standard"?  
Answer (for questions 39 and 40) 
 
Currently there is no amendment to the Measures for the Administration of Adoption of International 
Standards . 
China's mandatory national standards have the same  meaning as the technical regulations in Annex I 
of the TBT Agreement, and are a significant part of Chinese technical regulations. Since its accession 
to the WTO, around 60% of the TBT measures Ch ina has notified are mandatory standards. 
International Organization for Standardization (ISO) recommends China's mandatory national 
standards to the international community as one of the three modes of technical regulations. 
Therefore, China believes that there is no need to change this term. 
Voluntary standards become mandatory only when  they are cited by technical regulations. 
41. Could China confirm that a "mandatory standard" has the same meaning as a 
"technical regulation" under the Annex 1 TBT Agreement?  
Answer 
 China treats "mandatory standards" as technical regulations defined in the Annex 1 to the TBT 
Agreement.  
42. If yes, is there a reason why China is employing the term "mandatory standards" 
instead of "technical regulation"?   WT/TPR/M/230/Add.1 
 Page 345 
 
 
  Answer 
The term of "technical regulation" in the Chinese la nguage has its unique meaning, which is different 
from that of the TBT Agreement and thus may l ead to misconception. Therefore, China employs 
"mandatory standards" in the Chinese la nguage and translates it into English. 
43. Could China please explain the process by which voluntary standards are converted into 
technical regulation? Indeed Canada notes, in paragraph 43, that "Voluntary standard, 
however, can become mandatory if they are referenced in mandatory conformity assessment 
procedures. Concerns were raised in the TBT Committee in cases where no advance notice was 
given regarding such changes." Canada asks th at any "compulsory standards" developed be 
notified to the WTO with a comment period of at least 60 days. 
Answer 
In order to achieve the legitimate objectives such as pr otecting human health or safety, animal or plant 
life or health, or the environment, preventing d eceptive practices and safeguarding national security, 
some voluntary standards become mandatory technical  regulations when referenced in conformity 
assessment procedures. In these cases, China w ill notify WTO according to the transparency 
requirement of the TBT Agreement. China has al ways notified mandatory standards to WTO as 
technical regulations, and has generally allowe d members to comment in a period of 60 days, 
beginning with the day when the Secr etariat circulated the notification.  
Article 4.1 of the TBT Agreement commits central government standardizing bodies to comply with 
the Code of Good Practice for the Preparation, Ad option and Application of Standards ("the Code") 
found in Annex 3 of the TBT Agreement. Effective application of the Code of Good Practice was also 
stressed in the 5th Triennial Review of the Op eration and Implementation of the Agreement on 
Technical Barriers to Trade.  
44. Could China provide a copy of the Standardisation Administration of China's (SAC) 
work program, as per Article P of "the Code"? This would allow for a greater understanding of 
the Chinese standard development process. 
Answer 
Information on SAC's work program is open and public ly available online to all interested parties. 
Please go to SAC's website for details: www.sac.gov.cn. 
Part III. Trade Policies and Practices by Measur e; (2) Measures Directly Affecting Imports; 
(vii) Standards and other technical requirement s; (a) Standards and technical regulations; 
paragraph 46, page 36: 
The Secretariat report indicates that in 2007, 46.5% of China's national standards were 
equivalent to international standards, however no recent data was provided.   
45. Does China have a specific target for the prop ortion of national standards that are to be 
aligned with international standards?  
46. If yes, what is the target and over what period of time does China intend to reach the 
target?  WT/TPR/M/230/Add.1 
Page 346  
 
  Answer 
By the end of 2009, 68% of our national standard s in relevant areas are international or overseas 
advanced standards. 
It has been a longstanding and important technical policy of China to adopt international standards. 
Given the gap between domestic standards and inte rnational and overseas advanced standards, China 
will strive to revise those domestic standards to a lign them with international and overseas advanced 
ones. In the next five years, the proportion of in ternational and overseas advanced standards adopted 
will be significantly enhanced. 
Part III. Trade Policies and Practices by Measur e; (2) Measures Directly Affecting Imports; 
(vii) Standards and other Technical Requirement s; (a) Standards and technical regulations; 
paragraph 47, page 36: 
47. China is an active member of the APEC Telecommunications and Information Working 
Group (TEL) MRA Task Force.  Does China in tend to implement the APEC TEL Mutual 
Recognition Arrangement for Conformity Ass essment of Telecommunications Equipment? 
Answer 
 
China has no such plan at present.  
Part III. Trade Policies and Practices by Measur e; (2) Measures Directly Affecting Imports; 
(vii) Standards and other technical requirement s; (b) Sanitary and phytosanitary measures 
(SPS); paragraph 54, page 38: 
The Secretariat report indicates that China is a member of the World Organization for Animal 
Health (OIE), the Codex Alimentarius Commis sion, and the International Plant Protection 
Convention (IPPC).     
48. Recognizing that China is an OIE member, has China developed a documented import 
measure or import policy for beef and beef pro ducts originating from BSE affected countries, 
consistent with recommendations from the Terrestrial Animal Health Code, article 11.6.1, 
General provisions and safe commodities? 
Answer 
China is a country free of BSE, and therefore has ta ken serious, scientific and prudent policies in the 
prevention and control of BSE. China attaches much importance to the issue of Canadian beef export 
to China, and has noted the resu lts Canada has made in controlling the BSE. China will make active 
cooperation and exchanges with Canada in the spir it of scientific, pragmatic and friendly cooperation 
on the premise of safety. China would actively seek solution to the problem based on full knowledge 
of Canadian beef safety measures and BSE prevention and control system. 
49. The World Organisation for Animal Health  (OIE) officially recognized Canada as 
"controlled risk" for BSE.   For countries in th is risk category, OIE recommendations allow for 
the safe trade in beef and cattle under condi tions which Canada can meet. As Canada has 
achieved controlled risk status and furthermor e has provided China with a great amount of 
detailed technical information regarding Canada 's BSE control measures, would China please 
explain its continued ban on the importation of Canadian beef?  WT/TPR/M/230/Add.1 
 Page 347 
 
 
  Answer 
China attaches importance to the issue of Canadi an beef export to China. Based on bilateral 
arrangements, we have set up a jo int expert group to carry out related technical discussions. China 
would actively seek solution to this issue with the spirit of scientific, pragmatic and friendly cooperation, on the premise of safety.  
50. China requires Canada to certify that breedi ng swine exported to China be from farms 
free of animal cases of influenza A/H1N1 and lo cated in an area where in a radius of 50 km 
there were no cases of animal influenza A/H1N1 in the past three months. However, the Food 
and Agriculture Organization of the United Nations (FAO), the OIE, the World Health 
Organization (WHO), and the World Trade Organization (WTO) say there is no justification 
for the imposition of influenza A/H1N1 trade-rel ated measures on the importation of pigs or 
their products.  Would China please explain its certification requirements imported on live swine in light of the above? 
Answer 
In view of the spread of the new H1N1 influen za internationally (by April 2010 at least 98 animal 
infections of new A H1N1 in 23 countries/regions, involving 5 species), and in accordance with 
relevant laws and regulations of China, to safeguard and promote th e healthy development of trade of 
live pigs exported to China from countries concerned, China proposed to add in the original Protocol a 
provision that there be no animal influenza A H1N1  outbreaks in and around the farms, as well as the 
A H1N1 influenza testing requirements. The live pig trade can begin once our request is agreed and a 
health certificate is submitted for confirmation by China. 
In line with the principles of being science and to facilitate trade, China will continue to pay close 
attention to the development of the epidemic, time ly adjust its policies to protect the safety of 
livestock production and people's health. Meanwhile, China also hopes to strengthen cooperation with 
related countries in this respect, to jointly c ope with the challenges of A H1N1 influenza. 
51. In 2009, China implemented specific impo rt requirements for Blackleg Fungus of 
canola, Leptosphaeria maculans , a disease determined by China by pest risk assessment as a pest 
of quarantine significance.  Does China have a system in place whereby appropriate information on this particular pest of concern is  collected, verified and compiled, to support its 
declaration of pest freedom for Leptosphaeria maculans . If so, is this system consistent with 
what is described in section 1 of IPPC-ISPM No 6 Guidelines for Surveillance? 
Answer China is IPPC member. In accordance with Pest Detection Guide (ISPM16) and etc., national plant 
protection body of China is responsible for pl ant pest survey and detection, including Leptosphaeria 
maculans . Leptosphaeria maculans  does not occur in China, which has been recognized by Canadian 
experts. 
52. China requires certification that pork meat exported to China be certified free from 
influenza A/H1N1.  However, according to the OI E on June 11, 2009, "pork and pork products 
handled in accordance with good hygienic pr actices recommended by the WHO, FAO, CODEX 
Alimentarius Commission and the OIE, are not a source of infection."  Would China please 
explain why it requires certification for imported  pork meat derived from animals subjected to, 
and that passed, veterinary ante mortem and post-mortem inspections? WT/TPR/M/230/Add.1 
Page 348  
 
  Answer 
In view of the spread of the new H1N1 influen za internationally (by April 2010 at least 98 animal 
infections of new A H1N1 in 23 countries/regions, involving 5 species), and in accordance with relevant laws and regulations of China, to safeguard and promote th e healthy development of trade of 
live pigs exported to China from countries concerned, China proposed to add in the original Protocol a 
provision that there be no animal influenza A H1N1  outbreaks in and around the farms, as well as the 
A H1N1 influenza testing requirements. The live pig trade can begin once our request is agreed and a 
health certificate is submitted for confirmation by China. 
In line with the principles of being science and to facilitate trade, China will continue to pay close 
attention to the development of the epidemic, time ly adjust its policies to protect the safety of 
livestock production and people's health. Meanwhile, China also hopes to strengthen cooperation with 
related countries in this respect, to jointly c ope with the challenges of A H1N1 influenza. 
Part III. Trade Policies and Practices by Measur e; (2) Measures Directly Affecting Imports; 
(vii) Standards and Other Technical Requireme nts; (c) Certification and accreditation; 
paragraph 55, page 38: 
The Secretariat report indicates that improvement s have been made continuously to China's 
compulsory product certification system to si mplify the procedure of the system and thus 
mitigate the burden on enterprises. 
53. Could China please elaborate on the impr ovements made to the compulsory product 
certification system? 
Answer In 2008, China amended the  Rules on Administration of Compulsory Product Certification  in 2008. 
The draft of the rule was notified to WTO on 24 Ju ne 2008 (G/TBT/N/CHN/339). It came into effect 
on 1 September 2009. In practical implementati on, the Chinese government adopted the following 
measures to simplify procedures and facilitate ente rprises' certification application, i.e. online 
application; acceptance of CB certificate and testing report issued by IECEE-EB members and 
authorization of local certification agencies in most cases to do follow-up inspections after China's 
certification of foreign manufactures; lowering certification fees and avoiding repeated certificating and charges for such equipment in which spare pa rts and components are already certified; classifying 
key components to facilitate enterprises' application for record of changes.  
Part III. Trade Policies and Practices by Measur e; (2) Measures Directly Affecting Imports; 
(vii) Standards and other Tec hnical Requirements; (c) Certif ication and Accreditation; 
paragraph 56, page 38: 
54. What is the process in China for dete rmining which products are added to the 
Catalogue of Products Subject to  Compulsory Certification? 
Answer 
In order to protect national security, prevent decep tive practices, protect human health or safety, 
animal or plant life or health, or the environment,  China implements compulsory certification to some 
products. The Catalogue of Products Subject to Compulsory Certification  is formulated and adjusted 
by  AQSIQ, Certification and Accreditation Admi nistration and relevant agencies under the State 
Council, and is jointly issued by AQSIQ and Cer tification and Accreditation Administration. China  WT/TPR/M/230/Add.1 
 Page 349 
 
 
  notifies the draft rules concerning specific products subject to compulsory certification to WTO and 
allows members to make comments.  
55. Are public consultations with domestic a nd foreign stakeholders carried out prior to 
new products being added to the Catalogue of Products Subject to Compulsory Certification? 
56. If yes, what percentage of products involve public consultations?  
57. What criteria are used to determine if there will be public consultations?  
Answer (for question 55-57) 
According to the transparency requirements of th e TBT Agreement, China notifies the draft rules of 
specific products subject to compulsory certifica tion to WTO, and allows domestic and foreign 
interested parties to comment. 
58. Is China planning to move toward 100% of products having a public consultation and if 
so, in what timeframe?  
Answer 
China has been endeavouring to enhance transparency  in standards setting. China will gradually move 
towards higher ratio of public consultation in line with WTO rules, China's accession commitment as 
well as the development level of China's economy . However, there is no timeframe for 100% public 
consultation.   
Part III. Trade Policies and Practices by Measur e; (2) Measures Directly Affecting Imports; 
(vii) Standards and other Tec hnical Requirements; (c) Certif ication and Accreditation; 
paragraphs 55-58, page 38-39: 
The Secretariat report mentions the continued ex pansion of the Chinese Compulsory Product 
Certification (CCC) system to cover new pro ducts and sectors (paragraph 55-59). Canada has 
concerns because this threatens to limit the ability of Canadian exporters to access the Chinese 
market. Under the CCC system, only products t ested, inspected and certified by Conformity 
Assessment Bodies (CAB) recognized by the Certification and Accreditation Administration of the People's Republic of China (CNCA) can be sold in China.  
The process companies must follow in order to  test and certify their products under the CCC 
system is lengthy, complicated and costly. This process can also lead to the duplication of work, 
since often the same product is already certified for sale in Canada by a Canadian certification 
body. There are concerns that submitting equi pment to the CNCA for testing and certification 
constitutes a risk to the protection of intellect ual property. This concern reflects the experience 
of foreign companies with confidentiality breaches in the Chinese agencies which hold 
intellectual property information. 
59. Would the CNCA accredit foreign Conf ormity Assessment Bodies (CAB) to issue 
certificates of conformity for products subject to  its Compulsory Product Certification System 
(CCC)?     
60. If yes, what would be the process for a fo reign lab to be accredited under the CNCA ?   WT/TPR/M/230/Add.1 
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  Answer (for questions 59 and 60) 
The Regulations on Certific ation and Accreditation  and the Rules on Administration of Compulsory 
Product Certification  have stated clearly how to accredit certification bodies and laboratories to 
undertake CCC certification. CCC recognizes the CB repor ts within the scope of IECEE/CB scheme. 
The International Laboratory Accreditation Coopera tion (ILAC) is the cooperative organization of the 
laboratory accreditation agencies. ILAC/MRA is th e key technical base for mutual recognition 
between China and other countries and regions, and also the key guarantee to establish the trust 
between the parties of mutual recognition.   
Part III. Trade Policies and Practices by Measur e; (2) Measures Directly Affecting Imports; 
(vii) Standards and other Tec hnical Requirements; (c) Certif ication and Accreditation; 
paragraph 59, page 39: 
The Secretariat reports mentions that China ha s been participating actively in regional and 
international MRAs on certification and accreditation.  
61. Could China specify with whom they have binding memorandum of 
understandings (MRAs) and if these MRAs enable foreign laboratories to issue certificates of 
compliance with China?  
Answer 
At present, there are multilateral and bilateral le vels in the international mutual recognition 
framework of China. At the multi-lateral level, China is a member of IECEE-CB and ILAC Mutual 
Recognition Agreements. CCC recognizes test reports by foreign testing bodies which conform to the 
requirements of relevant international mutual reco gnition systems. At the bilateral level, China has 
signed 40 bilateral memoranda of c ooperation and agreements with 32 organizations in 23 countries 
and regions, among which 17 memoranda  are related to the international cooperation of CCC. In the 
framework of the memoranda, foreign certifi cation bodies, through cooperation with CCC 
certification bodies of China, may carry out part of  the CCC certification work. Besides, with the 
establishment of intergovernmental agreements fo r mutual recognition, foreign certification bodies 
approved by China can carry out CCC certification.  
Currently, the guideline for bilateral cooperati on is that Certification and Accreditation 
Administration of China signs framework agreemen ts on cooperation with relevant authorities of 
foreign countries, and then the technical bodies of  both countries negotiate concrete cooperation 
agreements according to the framework agreements. 
Part III. Trade Policies and Practices by Measures: (2) Measures Directly Affecting Imports: 
(viii) Government Procurement: pa ragraph 62, Footnote 45, page 39:   
The Secretariat report states that some GPA Parties 'have expressed concerns in the GPA 
Committee regarding China's indigenous innovat ion initiative, which allegedly contains a 
number of preferential features raising issues vis-à-vis  the GPA and other WTO Agreements'. 
Canada notes that China has recently released a Draft Notice Regarding the Launch of the 
National Indigenous Innovation Product Accr editation work for 2010. The 2010 Draft Notice 
indicates that accredited products 'will be incl uded in the Catalogue of National Indigenous 
Innovation Products and receive policy support in accordance with th e PRC Law on Science 
and Technology Progress and other relevant state regulations.'  
  WT/TPR/M/230/Add.1 
 Page 351 
 
 
  62. Could China please explain what type of policy support accredited products would 
receive? 
63. Would accredited products receive preferential treatmen t in the conduct of government 
procurement?  
Answer (for questions 62 and 63) According to Article 9 of the Government Procurement Law , government procurement shall give 
priority to domestic products. This is to facilita te the realization of policy objectives concerning 
economic and social development. Encouraging indigenous innovation of enterprises is a significant strategy of China to build an innovation-oriented country and to achieve scientific development. In 
the course of its implementation, domestic a nd foreign businesses will be treated equally. All 
manufacturers with legal person status in China in cluding foreign-invested ones are entitled to apply 
for accreditation. These two policies are not in conflict and will not lead to discrimination against foreign-invested enterprises 
Part III. Trade Policies and Practices by Measures; (2) Measures Directly Affecting Imports; 
(viii) Government Procuremen t: paragraph 65, page 40:   
The Secretariat report states that: 'under the (G overnment Procurement) Law, the Government 
should procure domestic goods, projects, and services.
  However, there are no provisions on 
local content, or rules of origin, to determin e whether a product is produced domestically.  
Purchasing of foreign products may be allowed under exceptional circumstances;  e.g., when the 
goods, projects, or services required are unavailable in China or unavailable on reasonable commercial terms, or when the goods, projects a nd services are procured for use outside China'. 
64. Given that the Government Procurem ent Law (GPL) requires the Government to 
procure domestic goods, projects and services, but  there are no provisions to determine whether 
a product is produced domestically, could Chin a please indicate how, in practice, suppliers 
determine whether a good, project or service is of domestic origin?   
Answer Since the promulgation of the Government Procurement Law , China has not formulated any standards 
to accredit domestic products. Therefore, the nationalit y of a good, project or service procured by the 
government is not determined in practice. Recently, the Ministry of Finance together with relevant 
departments of the State Council drafted the Administrative Measures on Government Procurement of 
Domestic Products (Draft)  in accordance with relevant provisions of the Government Procurement 
Law, and solicited public opinions through the Intern et from 21 May. The rule sets out the standards 
for accreditation of domestic products to be procured  by the government. For details, please refer to 
http://www.mof.gov.cn/zhengwuxinxi/bulinggon ggao/ tongzhitonggao/ 201005/ t20100521_31 
8992.html.  
65. Under the WTO Agreement on Government  Procurement (GPA), Parties commit to 
providing national treatment to the products, services and suppliers of other Parties.  The 
requirement under the GPL for the Government to procure domestic goods, projects and 
services runs counter to this principle.  Could China please explain how and when it plans to 
bring the GPL into compliance with GPA prin ciples of non-discrimination and national 
treatment, as part of its GPA accession?    WT/TPR/M/230/Add.1 
Page 352  
 
  Answer 
China is now under negotiations in respect of its accession to the WTO Agreement on Government 
Procurement (GPA), with the aim of granting natio nal treatment in government procurement to the 
enterprises and products of all par ticipating parties according to the principle of mutual benefit and 
equality and opening the government procurement market. The Chinese government will make 
overall planning on the amendment of legislation in line with the negotiation result of its GPA 
accession.  
Part III. Trade Policies and Practices by Measures; (2) Measures Directly Affecting Imports; 
(viii) Government Procuremen t: paragraph 66, page 40:   
The Secretariat report states that China's governme nt procurement covers only procurement of 
goods, construction and services listed in a Cent ralized Procurement Catalogue issued by the 
Ministry of Finance or provincial bureau of finance, or where the value is above a prescribed threshold.   
66. Does China have plans to expand the sco pe of the Government Procurement Law 
to include procurement beyond that which is currently covered by the law?    
Answer 
The procurement of goods, constructions and services which are not listed in the Centralized 
Procurement Catalogue  or below the prescribed procurement thresholds shall be regarded as a part of 
government procurement. However, such procuremen t is not subject to the mandatory provisions of 
the Government Procurement Law . China has no plan to enlarge the coverage of the Centralized 
Procurement Catalogue at the current stage.  
The Secretariat report states that: 'procurement by SOEs is not covered (under China's government 
procurement system), even when they may be  performing non-commercial or quasi-governmental 
functions'.   
67. Does China have plans to expand the scope  of its government procurement laws to 
include coverage of procurement by SOEs, pa rticularly when they are performing non-
commercial or quasi-governmental functions?   
Answer 
The Government Procurement Law  of China does not apply to the procurement by SOEs, and China 
has no plan to include procurement by SOEs into the scope of government procurement. 
Chinese SOEs are independent market players whos e daily operation activities are not interfered by 
the Chinese government. By far, China has not promulgated any laws specifically for SOEs 
procurements. However, for mandatory  bidding projects prescribed by the Law on Bid Invitation and 
Bidding , SOEs shall conduct procurement activities according to the Law. 
68. Could China please elaborate on what is meant by 'quasi-governmental functions'?   
Answer 
Chinese SOEs are independent market players. "Quasi -governmental functions" is a word used by the 
WTO Secretariat, and China is not clear about its specific meaning.  WT/TPR/M/230/Add.1 
 Page 353 
 
 
  Part III. Trade Policies and Practices by Measures; (2) Measures Directly Affecting Imports; 
(viii) Government Procuremen t: paragraph 69, page 41:   
The Secretariat report states that: 'imports used for procurement purposes require an approval from the 
Ministry of Finance, or its corresponding departments at the local level'.  
69. Could China please indicate whether approval from the Ministry of Finance or its 
corresponding departments would be required before  the initiation of the procurement process 
(e.g., before the procurement is publicly announced and bids are sought)? If so, please explain 
how a procuring entity would be able to dete rmine the need for imported goods in advance of 
the procurement process.    
Answer In accordance with Articles 6 and 7 of the Administrative Measures on Government Procurement of 
Imported Products , before the procurement, approval from the finance authorities is required and 
examination shall be conducted by the finance depa rtments of the local governments at the level of 
cities with districts or autonomous prefectures or above.  
In accordance with Article 7 of the Administrative Measures on Government Procurement of 
Imported Products , the precondition for determining the demand to procure imported goods is that the 
products are those unable to be obtained within Ch ina or unable to be obtained with reasonable 
commercial conditions, or those that need to be pr ocured in accordance with provisions of other laws 
and regulations.  
Please refer to http://www.mof.gov.cn/zhengwuxinx i/caizhengwengao/ caizhengbuwengao2008/caiz 
hengbuwengao20082/200805/t20080519_290 68.html for detailed provisions.  
Part III. Trade Policies and Practices by Measures; (2) Measures Directly Affecting Imports; 
(viii) Government Procurement;  paragraph 70, page 41:  
The Secretariat report states that the Government has been 'accelerating the formulation of the 
Implementation Regulations of the Government Pr ocurement Law, improving  coordination between 
the Government Procurement Law and the Law on  Bid Invitation and Bidding or Tendering, and 
promoting competition between government procurement agencies'.  
70. Could China please provide an update on the status of the Implementation Regulations 
of the Government Procurement Law?  When will these Regulations be publicly available?   
Answer 
The Chinese government has invited public opinions extensively for the draft of the Regulations for 
Implementation of the Government Procurement Law  in early 2010 through the website of 
http://www.gov.cn/gzdt/2010-01/11/content_1507655.ht m. At present, competent authority is 
modifying the draft regulation based on the public opinions received.   
71. Could China please explain the steps it is taking to harmonize the Government 
Procurement Law and the Law on Bid Invitation and Bidding or Tendering?   
Answer The Chinese government is now enacting the Regulations for Implementation of the Government 
Procurement Law and the Regulations for Implementation of the Law on Bid Invitation and Bidding . WT/TPR/M/230/Add.1 
Page 354  
 
  In this process, China would study the c oordination between the provisions of the Government 
Procurement Law  and those of the Law on Bid Invitation and Bidding .  
Part III. Trade Policies and Practices by Measur e; (2) Measures Directly Affecting Imports; 
(ix) Import-related financing; paragraph 71, page 42: 
The Secretariat report notes that "the Expo rt-Import Bank of China (EXIM Bank) offers 
import credit to importers in China to facilitat e imports of key technologies and equipment, or 
petroleum, natural gas, and other mineral produc ts in large-volume and long-term containers".  
72. Could China please identify the range of resource-based products that qualify for such 
funding? 
73. Could China please outline the eligibility criteria for loans?    
74. Are loans available to domestic and foreign-invested enterprises?  
75. Could China please indicate what percent age of import credits provided on an annual 
basis go to SOEs versus non-SOEs?   
76. What is the value of loans with respect to the import purchase price?    77. Is there a maximum loan amount?    
78. Could China please indicate how the interes t rate and other terms and conditions of the 
loans are established with respect to each borrower?   
Answer (for questions 72-78) 
All qualified import enterprises may apply for impor t credit with the Export-Import Bank of China. 
The criteria to be met include excellent financia l and operational status, capability to repay the 
principal and interest of the loan, and cap ability to provide corresponding guaranty.  
The Export-Import Bank of China does not disti nguish domestic enterprises and foreign-funded 
enterprises in issuing loans. Generally, the amount of import credit may not exceed a certain amount of the business contract value, and the rest part shall be provided by enterprises themselves. The bank only provides loans for the part exceed ing the enterprises' own fund.   
Part III. Trade Policies and Practices by Meas ure; (3) Measures Directly Affecting Exports; 
(ii) Export Subsidies; paragraph 75, page 42: 
The Secretariat report states that "China does not provide any export subsidies", and the Report by 
China (III. Trade Development and Trade Polic ies; (2) Promoting Trade and Investment; 
(ii) Improving Trade Financing; paragraphs 66-68, page 18) high lights some export credit activities 
by Chinese institutions.  
79. Could China please describe whether the ex port credit activities of the China Export-
Import Bank, the China Export and Credit In surance Corporation and the China Development 
Bank are consistent with the OECD Arrangement on Officially Supported Export Credits?   
80. If not, what types of obligations has the Government of China placed on these 
institutions to ensure compliance with WTO obli gations as they apply to export credits?   WT/TPR/M/230/Add.1 
 Page 355 
 
 
  81. Could China please indicate which sectors have been getting the export credits?   
82. Could China please describe any financing on preferential terms?   
Answer (for questions 79-82) 
China is not a party to the OECD Arrangement on Officia lly Supported Export Credits . However, in 
practice Export-Import Bank of China refers to the Arrangement  for key conditions of issuing export 
credit and is generally consistent with the basic framework the Arrangement . Besides, the bank also 
takes reference of the practices of official export credit institutions of other countries.  
SINOSURE adopts the common practice of ECAs in regard to pricing mechanism. Premium is 
calculated based on a designed premium model. Major factors of the model include country risk and 
commercial risk rating, credit terms, risks covered,  conditions of the insurance policy, operating and 
financial costs and etc. 
Part III. Trade Policies and Practices by Meas ure: (3) Measures Directly Affecting Exports; 
(iii) Export Taxes: paragraph 77 and 78, page 43: 
According to the Secretariat report, China revi ses its export tax rates, adjusts the list of 
commodities subject to export taxes or levies sp ecial export taxes "with a view to curtailing 
exports of certain products, including restricting exports of highly polluting and high-energy-
consuming products; promoting environmental protection, improving sustainable economic 
development; and conserving natural resources". The report also notes that China has also 
"removed or lowered export taxes on some products  to mitigate the negative effects of the global 
crisis on its exports".  
83. Has China conducted an impact assessment to determine whether export taxes have 
helped China to meet its stated objectives of conservation of natural resources or protection of 
the environment? If "yes", is the impact assessme nt publicly available and, if so, how can it be 
obtained? If "no", could China demonstrate how ex port duties have helped to conserve Chinese 
natural resources and promote environmental pr otection in China by providing concrete 
examples?     
84. Could China please advise if special export  taxes on HS 8-digit level lines have included 
minerals or metals and their semi-processed or  fully-processed product? If "yes", could China 
please provide the 8-digit HS codes and confirm the current specific levels of special export 
taxes for each line?    
85. Could China please provide the 8-digit HS codes for each mineral and metal product 
where export taxes were removed or lowered? Could China also provide the prior level of the 
export tax, the new level of the export tax, and the specific reasons for removing or lowering the 
export taxes.    
Answer (for questions 83-85) 
China's export administration on a few products ar e for the purpose of protecting environment, 
protecting human, animal or plant life or hea lth, conserving exhaustible natural resources, or 
protecting national security. Such measures do not c onstitute arbitrary discrimination, or disguised 
restriction on international trade, and are fully c onsistent with WTO rules. Since the issue concerned 
is subject to the ongoing WTO dispute cases of DS394, 395 and 398, China will provide further 
comments after the final rulings.   WT/TPR/M/230/Add.1 
Page 356  
 
  Part III. Trade Policies and Practices by Meas ure: (3) Measures Directly Affecting Exports; 
(iv) Tax Rebates on Exports: paragraph 80, page 43: 
According to the Secretariat report, "VAT may be rebated on exports, although th e rebate rates are, by 
and large, lower than the VAT  rates actually paid".  
86. Could China provide a comprehensive list of  products for which VAT rebate rates are 
lower than the VAT rates actually paid, including  HS 8-digit codes, product descriptions and 
VAT rebate rates per product?     
Answer 
Please go to the website of State Administration of  Taxation of China at http://www.chinatax.gov.cn 
and the information in available at the Export Rebate  Rate Inquiry column, or Canada may also go to 
the website of Ministry of Commerce at http://c ws.mofcom.gov.cn/static/col umn/ckts/ckzcfg.html/1 
and http://cws.mofcom.gov.cn/ckzcfg/2/dyncolumn.html for information.  
Part III. Trade Policies and Practices by Meas ure: (3) Measures Directly Affecting Exports; 
(iv) Tax Rebates on Exports: Box III.1: Export restrictions in China and their economic implications: page 44:  
In Box III.1, the Secretariat report explains how export restraints can provide domestic 
downstream processors with a competitive advantag e and stipulates that "restricting the export 
of some highly polluting or high-energy cons uming products is not the most economically 
efficient way to protect the environment", or to  conserve natural resources. It mentions that 
China is starting to consider alternative meas ures to achieve these objectives and provides an 
example of such an alternative measure in the case of rare earth.   
87. Could China provide more details and/or examples of alternative measures currently 
being considered to protect the environmen t and conserve natural resources?     
Box III.1 makes reference to China instituting a number of measures regarding rare earth 
including cutting export quotas,  increasing export taxes and imposing domestic production 
caps.  
88. Could China please provide its definition of "rare earths"?   
89. Could China please identify in detail all measures which are in place to control the 
exports of rare earths?   
Box III.1 notes that China is considering levying an environmental tax on the 
production/extraction of natural resources as early as 2011.   
90. Could China please provide more details regarding its current policy intentions?   
91. Could China please provide its definition of "natural resources" for the purposes of the 
tax under consideration?   
92. Does the definition here differ in scope from  the definition of "natural resources" used 
elsewhere by China? If "yes", in what way(s)?   WT/TPR/M/230/Add.1 
 Page 357 
 
 
  Part III. Trade Policies and Practices by Meas ure: (3) Measures Directly Affecting Exports; 
(vi) Export prohibitions, restrictions and licensing: paragraph 84 and 85, page 45: 
The Secretariat report notes that China applies global export quotas on 173 lines at the HS 8-
digit level, an increase of 27 lines compared to 2007.  
93. Could China explain how it justifies the increase of the number of HS 8-digit lines 
subject to export quotas compared to 2007?   
94. Could China provide a list of the global export quotas currently in place, including HS 
8-digit codes, product descriptions and amounts?    
95. Could China explain how it notifies interested parties concerning the products subject to 
export quotas and requirements for access?    
Part III. Trade Policies and Practices by Meas ure: (3) Measures Directly Affecting Exports; 
(vi) Export prohibitions, restrictions and licensing; paragraph 86, page 45: 
The Secretariat report notes that China mainta ins export licensing re quirements mainly to 
fulfill its obligations under international agreements . Table III.3 confirms that China continues 
to require export licenses and permits for zinc and zinc base alloy, ferroalloy and molybdenum 
products.  
96. Could China please provide a detailed explan ation as to why an export permit and an 
export license is required for each of these products?   
97. Could China also describe the process for obtaining a permit and outline the criteria 
used to issue a permit?   
98. Could China describe the process for obtainin g an export license, when prior receipt of 
a permit is required, and outline the criteria used to issue the license?  
Part III. Trade Policies and Practices by Measure; (3) Measures Directly Affecting Exports; (vi) 
Export Prohibitions, restrictions and licensing; Table III.3- Products subject to export quotas 
and licensing, 2009, page 46:  
Table III.3 in the Secretariat report notes th at trade measures with quotas allocated by 
MOFCOM include sawn timber products which a re subject to export quotas and licensing 
in 2009.  
99. Could China please outline the specific export quotas that the Ministry of Commerce 
has on sawn timber?   
Part III. Trade Policies and Practices by Meas ure: (3) Measures Directly Affecting Exports; 
(viii) State trading; paragraph 90, page 46: 
The Secretariat report states that while "imports subject to state trading may be imported by 
non-state-trading enterprises (STEs), state trading of exports must be conducted by STEs". Could China please explain its rationale for ut ilizing non-state-trading enterprises for the 
export of tungsten, antimony and silver?   
The Secretariat report also states that export pr ices charged by STEs are based, inter alia, on 
international market prices.  WT/TPR/M/230/Add.1 
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  100. Why does China require that state trading of exports be contro lled by STEs when 
products are traded globally and accompan ied by international market prices?   
Answer (for questions 87-101) 
China's export administration on a few products ar e for the purpose of protecting environment, 
protecting human, animal or plant life or hea lth, conserving exhaustible natural resources, or 
protecting national security. Such measures do not c onstitute arbitrary discrimination, or disguised 
restriction on international trade, and are fully c onsistent with WTO rules. Since the issue concerned 
is subject to the ongoing WTO dispute cases of DS394, 395 and 398, China will provide further 
comments after the final rulings.   
Part III. Trade Policies and Practices by Meas ure: (4) Measures Affecting Production and 
Trade; (ii) Direct expenditures, industrial polic ies, and price "guidance" measures; Table III.5 
– Selected government transfers, 2007-08, page 52: 
Table III.5 of the Secretariat report indicates th at China's total government expenditure for 
agriculture, forestry and water conservancy ha d a growth rate of 33.5% at $454.4 billion 
in 2008.  
101. In what areas has China expande d its expenditures in forestry?    
Answer 
The Chinese government has pushed forward the forest  ecological protection and construction work to 
maintain ecological balance in response to globa l climate change. In 2008, the Chinese government 
increased its investment in forestry industry. The increased investment has ma inly been used for the 
following two aspects, i.e. supporting the grain fo r green work in West China, Beijing-Tianjin 
sandstorm source area and certain areas in Centra l China, and increasing the ecological benefits 
compensation to national-level public forests.    
Part III. Trade Policies and Practices by Meas ure: (4) Measures Affecting Production and 
Trade; (ii) Direct expenditures, industrial policies, and price "guidance" measures; 
paragraph 118, page 53: 
102. Could China please outline the details of  the non-ferrous metal sector-specific policy 
developed to address reduced external  demand due to the global crisis? 
Answer 
For the purpose of environment protection and natu ral resources conservation, China excises annual 
domestic exploitation and production cap for minera ls such as rare earth, tungsten, antimony, tin, 
molybdenum and bauxite etc. There are also thr esholds imposed for access in these sectors. Detailed 
information is available at the website of Mini stry of Industry and Information Technology at 
http://www.miit.gov.cn.   
Part III. Trade Policies and Practices by Meas ure: (4) Measures Affecting Production and 
Trade; (ii) Direct expenditures, industrial policies, and price "guidance" measures; 
paragraph 119, page 53: 
103. Under the Price Law, there are both gov ernment-set and government-guided prices. 
Could China please provide a list of commodities a nd state which are subject to government-set  WT/TPR/M/230/Add.1 
 Page 359 
 
 
  and government-guided price? Can China please ex plain what level of discretion provincial and 
local governments have in setting prices? 
Answer 
The Pricing Catalogue of (former) State Planning Commission and other Relevant Departments 
under the State Council issued in 2001, available at http://www.ndrc.gov.cn/zcfb/zcfbl/zcfbl2003pro/ 
t20050707_27540.htm pr ovided for the products and services that are subject to state pricing and 
government guidance pricing. The governments at the provincial level publish pricing catalogues of 
their own, which shall include both those in the Pricing Catalogue of (former) State Planning 
Commission and other Relevant Departments under the State Council and some other products and 
services according to local situations.  
Products and services which are subject to state pr icing and government gui dance pricing at the 
provincial level mainly include heating, water res ources (exclude those subject to central pricing), 
medical care, education, some entrance fees of ma jor tourist sites, low-rent housing and low-income 
housing, and highway passenger transportation.  
104. Could China please indicate whether the Bu reau of Commodity Pricing in each province 
is in charge of price "guidance" for any mineral or metal commodities or products? 
105. If "yes", could China please name the province and describe the corresponding price 
"guidance" for each mineral or  metal commodity or product? 
Answer (for questions 105 and 106) 
Provincial pricing authorities do not "guide" mineral or metal prices.  
Part III. Trade Policies and Practices by Meas ure; (4) Measures Affecting Production and 
Trade; (iii) State-owned enterprises, private enterprises and corporate governance; (a) SOEs; 
paragraph 124, page 55: 
Canada understands that China might soon be requesting an increased dividend payment from 
its SOEs.  The Secretariat report indicates th at a certain portion of these dividends will be 
"earmarked" to be re-directed back to SOEs.  
106. Could China please identify if SOEs a re exempted from the requirement to pay 
dividends that they would otherwise be required to pay under this program? 
Answer 
The Secretariat Report is inaccurate in certain statement. According to the Opinions of the State 
Council on the Pilot Implementation of the State Capital Operating Budget , the state capital operating 
budget refers to the income and e xpenditure budget of the State as the owner to legally receive and 
distribute the proceeds from State capital. Income budget refers to the plan of the State to collect the 
proceeds of State capital from enterprises annually at a stipulated percentage; expenditure budget 
refers to the expenditure plan compiled by the St ate according to the scale of income of State capital 
operating budget and the requireme nt of national economic growth. Income budget includes profits 
turned over to the State by State-owned ente rprises, bonuses and dividends received from State-
owned shares (equities), income from the transfer  of State-owned property (including State-owned 
shares) of an enterprise and also income from li quidations. Expenditure budge t shall be arranged and 
determined according to the macroeconomic polici es of the State and the tasks of the reform and 
development of State-owned enterprises at differe nt stages. When necessary, some expenditure may WT/TPR/M/230/Add.1 
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  be used for social security purposes and etc. Therefor e, Secretariat Report is incorrect in stating that a 
certain portion of these dividends will be "earma rked" to be re-directed back to SOEs.  
According to Article 12 of the Interim Measures for Administrati on of Collection of Proceeds from 
State-owned Capital of Central Enterprises,  if a central enterprise is to have its proceeds payable 
reduced or exempted due to major adjustments in light of State policies or huge losses as a result of 
force majeure such as major natural disasters, it shall file an application with the Ministry of Finance 
and the SASAC. The application sha ll be reported to the State Council for approval by the Ministry of 
Finance after consultation with the SASAC, and th e proceeds payable that have been reduced or 
exempted shall be directly turned into State- owned capital or State-owned capital accumulation. 
Therefore, SOEs may be exempted from the requirement to pay proceeds from State capital 
(dividends) after being approved by relevant authorities.   
107. Could China please outline what percentage of total dividends paid to the Ministry of 
Finance by the SOEs is set aside or earmar ked for SASAC (current and future projections)? 
Answer 
According to the Opinions of the State Council on the Pilot Implementation of the State Capital 
Operating Budget and the  Measures for Compilation of Central State-owned Capital Operating 
Budget (for Trial), Ministry of Finance shall compile the draft of central State-owned capital 
operating budget for submission to the National People's Congress for review. The draft budget is 
based on the suggested drafts of the annual Stat e-owned capital operating budget proposed by each 
central State-owned capital operating budget unit (i ncluding SASAC). The SASAC budget covered in 
the draft budget of Ministry of Finance shall be ar ranged and determined in the package according to 
the macroeconomic policies of the State and the task s of the reform and development of State-owned 
enterprises at different stages. It does not have a fixed proportion.       
108. Could China describe the process by whic h the SASAC allocates these funds back to 
SOE's and for what purposes? 
Answer According to the  Measures for Compilation of Central St ate-owned Capital Operating Budget (for 
Trial) ,  SASAC as a central budget unit shall prepare its  own draft of State-owned capital operating 
budget based on the expenditure plans of central St ate-owned capital operatin g budget proposed by 
each enterprises under its supervision. Ministry of Finance shall compile the draft of central State-
owned capital operating budget based on the suggested  drafts proposed by each central budget unit 
including SASAC. Ministry of Finance shall then  submit the draft to the National People's Congress 
for review and approval and shall reply to central  budget units after the draf t is approved. Central 
budget units (SASAC) shall reply to their supervised (or subordinate) enterprises based on the reply of 
Ministry of Finance. Enterprises then apply for fund  allocation with Ministry of Finance based on the 
reply obtained from their supervising central budget unit.    
109. Could China please describe how such funds are usually disbursed to SOEs (e.g. equity 
investments, loans, grants/operating budget contributions)? 
Answer 
The State-owned capital operating budget expenditure shall be arranged and de termined according to 
the macroeconomic policies of the State and the task s of the reform and development of State-owned 
enterprises at different stages. According to the  Measures for Compilation of Central State-owned 
Capital Operating Budget (for Trial) ,  the expenditure in the central State capital operating budget  WT/TPR/M/230/Add.1 
 Page 361 
 
 
  mainly includes: capital expenditure, which covers th e investment of State capital to new enterprises, 
increase of investment to existing enterprises a nd purchase of equities and shares from companies; 
expense expenditure, which covers the expenses for ma king up the costs for reform of SOEs; and also 
other expenditure such as the social security expenditure.  
Part III. Trade Policies and Practices by Meas ure; (4) Measures Affecting Production and 
Trade; (v) Intellectual Property Rights; paragraphs 151-154, pages 61-62: 
The Secretariat report states that "China has al so been intensifying the enforcement of IPR 
protection, for which it has a double-track system: administrative actions and judicial measures.  Regarding criminal penalties, two j udicial interpretations were promulgated on the 
application of criminal law in IP Cases. Since th en, the number of intellectual property-related 
criminal cases has increased cons iderably." In addition, the Secretariat report mentions that 
China conducts operations such as campaigns to  improve public awareness on IPR protection, 
set up reporting complaint centers, hotline, and on line reporting and complaint window, etc.   
110. Canada applauds China's efforts to enhance intellectual property right (IPR) protection 
of all main categories of IPR. Has China reviewed the value and volume thresholds that must be 
met in order for commercial scale intellectual property rights violations to be subject to 
criminal procedures and penalties?  
Answer 
Presently there is no plan of revising the thresholds. 
Part III. Trade Policies and Practices by Meas ure: (4) Measures Affecting Production and 
Trade; (v) Intellectual Property Rights; paragraph 151, page 61: 
111. China has made significant steps in addressing a number of areas in Intellectual 
Property Rights (IPR).  Does China have plan s to further protect the intellectual property 
interests of Chinese entrepreneurs and their non-Ch inese partners operating in China? If yes, in 
what way? 
Answer To further enhance intellectual property righ ts protection, the Chinese government issued Outline of 
the National Intellectual Property Strategy  in June 2008, and later set up an inter-ministerial 
coordination mechanism that involves 28 ministries to coordinate the implem entation of the national 
IPR strategy. IPR strategy implementation plan is  formulated annually, focusing on solutions of 
outstanding issues of public concern with the launc h of special operations to deal with major IPR 
cases on the one hand and on the other hand further im proving laws and regulations concerned so as 
to consolidate the mechanism on IPR protection in the long run. 
Part III. Trade Policies and Practices by Meas ure: (4) Measures Affecting Production and 
Trade; (v) Intellectual Property Rights; paragraph 152, page 62: 
112. Will China provide domestic and foreign stakeholders an opportunity to comment on 
new amendments to the Trademark Law? 
Answer 
Revision to the Trademark Law  will be made in a way consistent with the transparency obligations 
under China's commitments made at its accession to WTO. WT/TPR/M/230/Add.1 
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  113. When does China expect to comple te revisions to the Trademark Law? 
Answer 
At present we do not have a specific schedule yet.  
114. Will China provide domestic and foreign stakeholders an opportunity to comment on 
new amendments to the Copyright Law? 
Answer 
According to the Decision adopted at the 13
th Session of the Standing Committee of the 11th National 
People's Congress on 26 February 2010, the Copyright Law is revised as follows.  
Firstly, Article 4 is revised as that "Copyright owne rs, in exercising their copyright, shall not violate 
the Constitution or laws or infringe upon the public  interests. The publication and dissemination of 
works shall be subject to the administration and supervision of the State."  
Secondly, a provision is added in Article 26 of the revised Copyright Law  that "In case of pledge of 
copyright, the pledger and the pledgee shall register the pledge with the copyright administration under the State Council."  
For details, please see http://www.gov.cn/f lfg/2010-02/26/content_1544458.htm. 
Part III. Trade Policies and Practices by Meas ure: (4) Measures Affecting Production and 
Trade; (v) Intellectual Property Rights; paragraph 154, page 62: 
The Secretariat report states that "China ha s set up IPR working groups and information-
exchange mechanisms with various countries and regions to enhance IPR protection".  
115. Could China provide a list of IPR working groups and information-exchange 
mechanisms it has with other countries? 
Answer 
Bilaterally China has established information exch ange mechanism and conducted cooperation with 
the following countries/regions: United States, Japan,  Korea, Australia, Pakistan, ASEAN, Germany, 
UK, France, Italy, Spain, Israel, GCC, ARIPO and OAPI, etc.  
Part III. Trade Policies and Practices by Meas ure: (4) Measures Affecting Production and 
Trade; (v) Intellectual Property Rights; (a) Patents; paragraph 155-156, page 62: 
116. What is the average time required fo r an invention patent to be granted? 
Answer 
The substantive examination period for inventi on patent (from the beginning of the substantive 
examination stage to the issuance of the first examination notice) is 25.8 months in 2009.  
117. What actions is China taking to increa se capacity to process invention patent 
applications in a timely manner?  WT/TPR/M/230/Add.1 
 Page 363 
 
 
  Answer 
To improve examination efficiency and quality, Chin a has increased the number of patent examiners, 
strengthened the training for examiners, reformed the examination administration mechanism and the 
exanimation means, and made better use of su ch tools as electronic information technology. 
Part III. Trade Policies and Practices by Meas ure; (4) Measures Affecting Production and 
Trade; (v) Intellectual Property Rights; Box III.2: IPR Enforcement, page 63: 
China has made significant steps in addressing  a number of areas in Intellectual Property 
Rights (IPR). With regards to IPR enforcement, the promulgation of a new framework and regulations is a major move and requires follow up with Guidance Documents. These 
documents are aids to help the public to inte rpret the impact of new regulations, and are 
particularly important when the central gov ernment delegates enforcements of trademark 
rights to local authorities. Guidance Documents do not generally carry regulatory weight in and 
of themselves, but within the context of suppo rting regulatory amendments will foster greater 
transparency and hopefully reduce the amount of litigation they are current see in the judicial 
system. 
118. Could China clarify if they plan to adopt this best practise of elaborating such guidance 
documents to support the new regulatory bodies in light of the new national IPR strategy? 
Answer 
We would appreciate it if Canada could give an explanation on the meaning of "guidance document" 
so that the competent authorities could provide further clarification.  
Part III. Trade Policies and Practices by Meas ure; (4) Measures Affecting Production and 
Trade; (v) Intellectual Property Rights; Box III.2: IPR Enforcement, page 63: 
According to the Secretariat report, "Following a Decision of the Standing Committee of the 
Eleventh National People's Congress on Am ending the Copyright Law, adopted on 
26 February 2010, China recently reported to the DSB that it has implemented the 
recommendations and rulings of the DSB with respect to the Copyright Law.  On 
17 March 2010, the State Council adopted the deci sion to revise the Regulations for Customs 
Protection of Intellectual Property Rights." 
119. Would China provide specific information on how its Regulations for Customs 
Protection of Intellectual Property Rights have or will be revised and confirm which, if any, of 
the revisions are currently in force? 
Answer For enforcement of intellectual property rights at the border, the General Administration of Customs 
has formulated a new Measures of the General Administration of Customs for Implementation of the 
Regulations on the Customs Protection of Intellectual Property Rights . The rule became effective on 
1 July 2009. Please refer to http://www.gov.cn/flf g/2009-03/11/content_1256461.htm for details. 
Part III. Trade Policies and Practices by Meas ure: (4) Measures Affecting Production and 
Trade; (v) Intellectual Property Rights; (a) Patents; paragraph 157, pages 64: WT/TPR/M/230/Add.1 
Page 364  
 
  Canada appreciates China's efforts to strengthe n protection of IPR. However, the Secretariat 
report states that the third Amendment to China's Patent Law came into effect on October 1, 2009.  
120. Will China notify the changes to the WTO and permit WTO Members and interested 
persons the opportunity to present comments in order for China to receive the comments or 
suggested revisions of Members and interested  persons? Based on these comments, will China 
make modifications to the regulations? Alternat ively, if China does not intend to notify WTO 
members or other interested p ersons through the WTO, will the Chinese Ministry responsible 
for amendments to China's patent laws issue a draft notice regarding any proposed changes in 
order to receive comments or proposed modifications from interested parties? 
Answer 
When making amendments to the Patent Law , competent authorities have solicited public opinions 
through Internet, and have also collected co mments and recommendations from various parties 
concerned including foreign embassies in China, fo reign chambers of commerce, foreign-invested 
enterprises and other overseas organizations as well as relevant foreign agencies by way of domestic 
and overseas studies, symposiums and workshops etc.  For example on 12 December 2008 a workshop 
was held to hear the comments and views on the Patent Law  and its implementing regulation from 
foreign embassies in China and also foreign-inv ested enterprises. China w ill notify to the WTO the 
amended Patent Law  in accordance with the requirement of the TRIPS Agreement.  
Part III. Trade Policies and Practices by Meas ure: (4) Measures Affecting Production and 
Trade; (v) Intellectual Property Rights; (a) Patents; paragraph 158, page 65: 
121. What is China's definition of "in the public interest" with respect to compulsory 
licensing and Article 49 of China's Patent Law? 
Answer 
This Article is formulated in accordance with the provisions in paragraph (b) of Article 31 of the 
TRIPS Agreement. Its scope of application and such concepts as "in the public interest" are consistent 
with those in the TRIPS Agreement. 
Part III. Trade Policies and Practices by Meas ure; (4) Measures Affecting Production and 
Trade (v) Intellectual Property Rights, (a) Patents: paragraph 160, page 65: 
According to the Secretariat report, the revi sed Patent Law has introduced a compliance 
requirement and a disclosure obligation for th e application of patents based on genetic 
resources. Firstly, the revised Patent Law provid es that no patent shall be granted if an 
invention is based on genetic resources obtained or used in violation of any laws or 
administrative regulations. Secondly, the revised  Patent Law requires the applicant to disclose 
and explain the direct and original source of the ge netic resource. If the applicant is not able to 
disclose the original source, the applicant must provide the reasons.  
122. When will the specific relevant laws and administrative regulations be issued? For 
instance, the new Patent Law does not
 clarify what kind of reasons are justifiable or how much 
detail is required.   WT/TPR/M/230/Add.1 
 Page 365 
 
 
  Answer 
Relevant laws and regulations re fer to those concerning the admini stration of genetic resources. The 
Measures for Examination and Approval of Entry and Exit and Foreign Cooperative Research and 
Utilization of Livestock and Poultry Genetic Resources  which was promulgated by the State Council 
on 28 August 2008 and came into effect  on 1 October 2008 is an example. 
123 In addition, Canada has concerns with th e implementation of the disclosure obligation 
for the application of patents based on geneti c resources. Could China explain how the "direct 
source" and "original source" will be defined?  What reasons would be acceptable for not 
disclosing the original source? 
Answer Direct source of the genetic resources referred to in the Patent Law  means the direct channel through 
which the genetic resources are obtained. Original source of the genetic resources referred to in the Patent Law  means the place in the in-situ  conditions where the organism to which the genetic 
resources belong is collected. Where the genetic resources are directly obtained from a certain institution, such as seed bank (germ plasm bank) etc., but the institution does not have a record of the 
original source of the genetic resources, the appli cant shall state that fact and provide relevant written 
document issued by the institution. 
Part III. Trade Policies and Practices by Meas ure: (4) Measures Affecting Production and 
Trade; (v) Intellectual Property Rights; (b) Trademarks; paragraph 164, page 66: 
The Secretariat report states that in 2008 "the number of trademarks reviewed was higher than 
the number of applications, reflecting faster registration". In China's Action Plan on 
Intellectual Property Protection 2010, there is a goal of shortening examination periods for 
trademark applications down to one year.  
124. Could China please indicate what the current average time required is to register a 
trademark in China? 
Answer By the end of 2010 the average time to register a tr ademark is to be shortened to less than one year.  
Part IV. Trade Policies by Sector; (1) Introduction; paragraph 3, page 69: 
The Secretariat report notes that to improve coor dination across industries and ministries in its 
energy sector, China restructured the regulatory framework by setting up the National Energy Administration (NEA) in 2008. The report notes that it remains unclear  how the NEA interacts 
with the National Development and Reform Commission (NDRC) and whether it has the 
authority to effectively coordinate the interest s of ministries, commissions, and state-owned 
energy companies.  
126. Could China please explain how policy-maki ng and regulations in the energy sector has 
been organized, and outline the implications for further reform on energy and resource products? WT/TPR/M/230/Add.1 
Page 366  
 
  Answer 
In March 2008, the State Council conducted the sixt h institutional reform, in which it was decided to 
establish National Energy Administration and later also National Energy Commission, and to cancel 
National Energy Leading Group and its administrative body so as to strength the administration of the 
energy sector and to change the situation of mu ltiple and decentralized administration and poor 
coordination. 
In August 2008, the National Energy Administrati on formally began to function, directly under 
National Development and Reform Commission (ND RC). Two years after that, National Energy 
Commission as a high-level energy deliberation and coordination authority was formally established 
in January 2010. National Energy Commission is main ly responsible for the overall coordination of 
major energy issues, in which Premier WEN Jiabao holds the post of director, Vice Premier LI 
Keqiang holds the post of deputy director, and leading officials from 21 central ministries and commissions serve as members of the Commission,  including NDRC, Ministry of Science and 
Technology, Ministry of Industry and Information Tec hnology, Ministry of Finance, Ministry of Land 
and Resources, Ministry of Environmental Protecti on, Ministry of Transport, Ministry of Water 
Resources and State Electricity Regulatory Commission (SERC). The National Energy 
Administration acts as the administrative body of  the Commission. This new framework provides 
guarantee for decision-making, coordination and enforcement on energy issues. The administration over the energy industry is more centralized, clearer and further strengthened.  
Part IV. Trade Policies by Sector; (2) Agricult ure; (i) Features and market developments; 
paragraph 10, page 71:  
The Secretariat report notes that "At least 16 institutions are in charge of agriculture-related 
issues in China".  
126. Could China please list and elaborate upon th e mandate of each of these institutions and 
what role these institutions play in developing and delivering agricultural policy? 
Answer Ministry of Agriculture is the competent author ities under the State Council for agriculture. Besides, 
some other ministries are also responsible for certain  agriculture-related work within their own duties. 
A few examples are as follows. 
National Development and Reform Commission an d the State Administration of Grain under NDRC 
are responsible for key issues concerning overall de velopment of agriculture and rural economy and 
the macro adjustment and medium-long term planning of food issues. Ministry of Science and 
Technology is responsible for promoting the rura l development by technology and science. Ministry 
of Industry and Information Technology is responsib le for market access of agricultural chemicals. 
Ministry of Finance is responsible for budget of the agricultural sector and arrangement of 
agriculture-related funds. Ministry of Land and Resources is responsible for protecting arable 
farmland and rearrangement, reha bilitation and development of land. Ministry of Environment 
Protection is responsible for ecological and enviro nmental protection in rural areas. Ministry of 
Housing and Urban-Rural Developm ent is responsible for housing construction, housing safety and 
renovation of dilapidated houses in rural areas. Mi nistry of Water Resources is responsible for 
guidance of water-related works in rural areas. Ministry of Commerce  is responsible for agriculture-
related trade issues including import and export ad ministration of agricultural products, and also 
administration of swine slaughtering etc. State Forestry Administration is responsible for guidance of 
forestry development. State Council Leading Group Office of Poverty Alleviation and Development is  WT/TPR/M/230/Add.1 
 Page 367 
 
 
  responsible for setting standards on support for population of poverty and major poverty areas at 
county level.   
Part IV. Trade Policies by Sector; (2) Agricu lture; (iii) Policy Instruments; (a) Border 
measures; paragraph 21, page 73: 
The Secretariat report states that China continues to impose global and destination-specific 
export quotas for cotton, grains (maize, rice, and wheat) and tea. 
127. Does China have plans to phase out global and destination-specific quotas? 
Answer 
China presently does not have such plans.  
Part IV. Trade Policies by Sector; (2) Agricult ure; (iii) Policy Instruments; (b) Internal 
measures; paragraph 26, page 74: 
Canada understands that China has recently announ ced that the support price for rapeseed has 
been increased. 
128. Could China please indicate when a support  price for rapeseed was first introduced and 
under which policy?   
Answer 
China does not have support price for rapeseed. Rapeseed oil is a reserve product. For reserve of 
rapeseed oil, the authority has an  interim purchase price for reserves. 
129. Could China please elaborate on how the s upport price for rapeseed is determined and 
under what conditions the support price is used? 
Answer China does not maintain support price for rapeseed. If it is the purchase price for oilseed oil reserve 
that Canada would like to know, the purchase price is  determined with reference to market price.   
130. What are the criteria for determining wh en Sinograin sells th e purchased rapeseed 
stocks back onto the market and at what price? 
Answer Sinograin stores rapeseed oil which is made from oilseed  rather than oilseed itself. Therefore there is 
no such a case that Sinograin sells the ra peseed stock back into the market.  
Part IV. Trade Policies by Sector; (2) Agricult ure; (iii) Policy Instruments; (b) Internal 
measures; paragraph 30, page 75: 
The Secretariat Report notes that China has a minimum procurement price scheme for wheat 
and rice in the main production areas and that the Government purchases these products at the 
minimum procurement price when the market price falls below a given threshold.  The 
minimum procurement price for these products  was raised twice in 2008 and again in 
2009. These purchases are funded by loans made to the state-owned China Grain Reserves WT/TPR/M/230/Add.1 
Page 368  
 
  Corporation (Sinograin).  The loans are subsequent ly repaid with the proceeds from the sale of 
the commodity.  In addition, China holds mini mum reserves of wheat and rice in keeping with 
its policy of a given self-sufficiency ratio.  
131. Could China please indicate which Minist ry sets the minimum procurement price and 
elaborate on how the minimum procurement price and the market price threshold are 
determined? 
Answer 
The minimum purchase price is decided by the NRDC in consultation with the Ministry of 
Agriculture, the Ministry of Fina nce and the State Administration of Grain. Minimum purchase price 
for grain is determined to compensate the cost of grain production and to provide grain-growing 
farmers with proper profit.   
132. Are the minimum procurement prices for th ese products published and if so, could 
China please provide information as to where? 
Answer 
The minimum purchase price for grain is publishe d every year at NDRC's website www.ndrc.gov.cn. 
It is also widely reported by major media in China. 
133. What are the criteria for determining when Sinograin sells the commodities it has 
purchased back onto the market and at what price? 
Answer 
The price of Sinograin when selling back to the mark et uses a market-based pri ce with reference to a 
level suggested by relevant authorities. 
134. Could China please elaborate if the stocks purchased through the minimum 
procurement price mechanism are or are considered to be part of China's reserves of wheat and 
rice?  
Answer 
The stocks purchased through the minimum procurem ent price scheme are part of China's reserves.  
Part IV. Trade Policies by Sector; (3) Energy; paragraph 36, page 76: 
135. There are restrictions limiting market  opportunities for foreign energy companies 
selling energy equipment and technology in China. Some of these restrictions are national and some are local in nature. When will China relax rest rictions on the sale of electrical equipment 
and technology in the Chinese market to utilities?   
Answer The foreign investment rules in the energy sector  are in line with WTO rules and China's accession 
commitment. China would be grateful if Canada coul d point out what these "restrictions" mean so that 
China may look into these specific issues.   WT/TPR/M/230/Add.1 
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  Part IV. Trade Policies by Sector; (4) Manufacturing; paragraphs 44, page 78: 
The Secretariat report states that "The Government (of China) has been adjusting its VAT 
rebate rates or export taxes to  control, restrict, or 'manage' exports of certain products".  
136. Could China please provide a detailed d escription of the sectors and the various 
measure employed to "control, restrict, or manage" exports of certain products? 
137. Aside from low import duties, full or part ial VAT rebates, export taxes, preferential 
loans, and consolidation, are there any other dir ect interventionist measures which are used to 
"guide" certain sectors of the economy? 
138. Could China please identify the sectors that  are implicated and outline how these sectors 
were selected? 
Answer (for questions 137-139) 
A government always has policies and measures that are more or less of such intervening effects as to 
guide certain sectors of the economy. Being a WTO member, the Chinese government respects WTO rules when formulating policies and measures and pays  great attention to the WTO consistency of its 
policies and measures. 
On the issue of VAT rebate on exports, China believes that it is an internationally prevailing practice. 
China adjusted the value-added tax rebate rates in the last two years because enterprises suffered great 
difficulties with the shock of the international fi nancial crisis and requested strongly for such 
adjustments. China mainta ins that since the adjust ments made to the tax rebate rates on exports 
strictly follow the principle that the rebate rate  be no higher than the rate levied, they are not 
inconsistent with WTO rules. The general direction of the VAT rebate policy of China is to achieve 
policy stability and continuity on the basis of continuously improving tax collection and 
administration. 
Regarding China's export administration on a few produc ts including export tax, they are in place for 
the purpose of protecting environment, protecting huma n, animal or plant life or health, conserving 
exhaustible natural resources, or protecting na tional security. Such measures do not constitute 
arbitrary discrimination, or disguised restriction on international trade, and are therefore consistent 
with WTO rules. 
Over the past two years, faced with serious challeng es of the international financial crises, the Chinese 
Government staged economic stimulus package, including ten industrial revitalization plans. 
Aside from adjustments of the VAT rebate policy on export of certain products, tax policies China 
adopted under the industrial revitalization plans fo r ten sectors are mainly the purchase tax reduction 
by half, or 5%, for passenger cars with displace ment at and below 1.6 liters during the period from 
20 January to 31 December 2009. In 2010, the pur chase tax on these cars is adjusted backward to 
7.5% from 5%, which is still lower than the normal rate of 10% and will be  valid through the year. 
Financial supports provided under th e industrial revitalization plans for ten sectors are mainly those to 
promote direct consumption, including subsidi es for home appliances going to the countryside, 
automobiles and motorbikes to the countryside, and "old for new" of household appliances. Policies 
and measures including those aforesaid which have b een taken by China in the fight against the global 
financial crisis have been notified to the mon itoring mechanism of the WTO Trade Policy Review 
Body (TPRB) for the financial crisis. For more deta ils of the policies and measures, please refer to the WT/TPR/M/230/Add.1 
Page 370  
 
  information contained in the monitoring report dr afted by the WTO Secretariat under the mechanism 
which has been verified by China. 
Part IV. Trade Policies by Sector; (5) Serv ices; (ii) Financial Services; (a) Banking; 
paragraph 52, page 80: 
The Secretariat report notes that China does not h ave a deposit insurance scheme, though it is 
currently considering designing such a scheme.  
139. Could China please provide an update on the timing for an eventual deposit insurance 
system? 
Answer 
The deposit insurance system of Chin a is briefly introduced as follows. 
China attaches great importance to the protection of interest of depositors. The authority began 
legislative work in this respect as early as 2006 in order to provide a legal basis for the establishment 
the deposit insurance system. In 2008, after the globa l financial crisis broke out, significant changes 
have occurred in both domestic a nd international economic and fina ncial environment, which present 
huge challenges to the establishment of China's de posit insurance system. At present, the Chinese 
government is further studying the implementation de tails of the system on the basis of the latest 
international reform and developm ent trend of deposit insurance system after the break-out of the 
global financial crisis as well as the demand of  China's economic and financial development. 
For the deposit insurance system to be implemente d in future, some preliminary thoughts are as 
follows. Firstly, to introduce a compulsory insuran ce system, which will cover all banking institutions 
established in China with legal person status that absorb deposits, except fo r branches in China of 
foreign banks. Secondly, to apply differentiated ra tes according to such indexes as the scale of assets 
and capital sufficiency ratio of the insured instituti ons so as to contain risk-carrying behaviors of 
institutions with higher risks. Thirdly, to adopt  compensation with limit, taking as reference the 
internationally prevailing practice of having 80%-90%  depositors fully protected. Fourthly, to give 
necessary functions to deposit insurance institutions , such as premium collection, fund management, 
deposit compensation, and also auxiliary duties of ri sk prevention, correction and disposal of insured 
institutions. 
Part IV. Trade Policies by Sector; (5) Serv ices; (ii) Financial Services; (a) Banking; 
paragraph 56, page 81: 
The Secretariat report notes that commercial ba nks in China are generally prohibited from 
trading and underwriting equity securities, unless they establish a separate incorporated entity 
for that purpose.  
140. Could China please indicate whether the sa me regulations would govern both domestic 
and foreign commercial banks seeking to establish a securities subsidiary? 
Answer 
According to Article 43 of the Law on Commercial Banks , commercial banks are not allowed to 
engage in trust investment or securities business in China, except where otherwise provided for in the 
regulations of the State. The law requires separat e operation of banking and securities business, which 
are equally applied to both domest ic and foreign commercial banks.  WT/TPR/M/230/Add.1 
 Page 371 
 
 
  Part IV. Trade Policies by Sector; (5) Serv ices; (ii) Financial Services; (a) Banking; 
paragraph 59, page 82: 
The Secretariat report notes that in addition to the sector-specific lending provided by policy 
banks, the PBC and other administrative authorities encourage commercial banks to adapt their lending to specific borrowers in lig ht of relevant government policies.  
141. Could China please indicate whether the se ctor-specific lending practices are working, 
and whether there is a plan for phasing out these measures? 
Answer 
For loans to specific borrowers, co mmercial banks in China at presen t grant loans based on market 
conditions and whether to provide credit to certain  kind of borrowers or not are determined by 
commercial banks themselves on the basis of thei r own business development strategy and their 
judgment of the credit standing of the borrower as  known to them. The People's Bank of China does 
not encourage commercial banks to pr ovide loans to sp ecific borrowers. 
For sector-specific loans, as just said, commercial banks in China at present grant loans based on 
market conditions, and will comprehensively consid er such factors as cost, earnings, assets quality 
etc. The influence of industry policy is that it is one  of the information for re ference, and there are no 
special loans specifically for certain industries. 
Part IV. Trade Policies by Sector; (5) Servi ces; (ii) Financial Services; (b) Insurance; 
paragraph 63, page 83: 
The Secretariat report notes that a moratorium on sales offices for insu rance was imposed in 
September 2008, and that further to this mora torium the Insurance La w has been amended.  
142. Could China please provide an update on ho w the amendments to the rules have been 
working, and in particular the changes to strengthen the internal control of insurance 
companies? 
Answer 
The purpose of the amendment of the Insurance Law  is to standardize the insurance activities, protect 
the legitimate rights and interests of parties to insurance activities, strengthen the supervision and 
administration of the insurance business and promote its  healthy development. In view of the features 
of the insurance industry and problems in practice, the newly amended Insurance Law  adds articles on 
protection of the interests of policy-holders and the insured parties. The law also requires regulator to 
strengthen supervision and administration on risks of insurance companies, esp ecially the solvency of 
insurance companies, which also serves for the good of policy-holders and the insured parties. In 
terms of the internal control of insurance compan ies, please refer to Articles 108-109, 111-112, 117, 
129 and 152 of the Insurance Law .   
143. Could China please indicate whether the am ended rules apply to domestic and foreign 
insurance entities in the same way?  
Answer The amended Insurance Law  is equally applied to domestic and foreign insurance companies. 
144. Are further amendments to th e Insurance Law being considered? WT/TPR/M/230/Add.1 
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  Answer 
The amended Insurance Law  came into force on 1 October 2009. China has no plan to do another 
legislative revision in the short term.   
Part IV. Trade Policies by Sector; (5) Servi ces; (ii) Financial Services; (c) Securities; 
paragraph 70, page 85: 
The Secretariat report notes that a new "growt h enterprises board" was established in the 
Shenzen Stock Exchange in October 2009.  
145. Could China please indicate how the rules or guidelines for the new board will affect 
initial public offerings in China? 
Answer The Interim Measures on Administration of Initial Public Offering and Listing on Growth Enterprise 
Board  was promulgated on 31 March 2009. The rule  standardizes the activities of initial public 
offerings and listings on the growth enterprise board and specifies statutory requirements of issuance 
conditions, procedures, information di sclosure and supervision for the in itial public offerings. It is of 
far reaching importance for the development of grow th enterprises and protection of the interest of 
public investors. For detailed info rmation, please refer to the rule. 
Part IV. Trade Policies by Sector; (5) Servi ces; (ii) Financial Services; (c) Securities; 
paragraph 80, page 87: 
The Secretariat report notes that two joint-ven ture securities firms qualified to gradually 
expand their business into A-share brokerage, securities proprietary business, and asset 
management.  
146. Could China please indicate what plans it  has for further wideni ng of the number of 
firms allowed to engage in such activities? 
Answer 
Allowing qualified joint-venture securities companies to gradually expand their business scope is one 
of the opening-up measures of China's securities services. China will continue to liberalize its 
securities services according to the n eed of the domestic market. China is willing to talk with other 
WTO Members on this issue in the DDA negotiations. 
Part IV. Trade Policies by Sector: (5) Servic es; (iii) Telecommunications: paragraph 88, 
page 88: 
The Secretariat Report notes that the Regulati ons on Telecommunications (2000) stipulate the 
separation of the Government from the busin ess of providing telecommunications services.  
147. As the State is the majority owner of a ll basic telecommunication  service providers, how 
does China ensure that this "separation" is maintained? 
Answer 
As early as 1998 when it was established, the former  Ministry of Information Industry (MII) separated 
itself structurally and financially from all the telecommunications operators and services suppliers.  WT/TPR/M/230/Add.1 
 Page 373 
 
 
  The newly created Ministry of Industry and Information Technology (MIIT) which is the successor of 
MII continues to implement its responsibility as an  independent regulator. The MIIT has complied 
with the requirements of "independent regulat or" as provided for in the Reference Paper. 
CANADA – Follow-up  
Report by the Secretariat (WT/TPR/S/230) 
Part I. Economic Environment; (3) Structural Policies; paragraph 32, page 9: 
The Secretariat Report outlines China's polic y of keeping input prices low in order to 
emphasize the development of heavy industry. The report notes the relationship between low 
input prices and overcapacity, esp ecially in heavy industry.  
With respect to electricity prices, could China explain its national and local government policies 
on electricity rates?  
Answer 
Please refer to the answer to question 2 in the previous list of questions from Canada. 
Part II. Trade Policy Regime: Framework and Objectives: (6) Foreign Investment Regime; 
paragraphs 45, 48, 49, page 21: 
In paragraph 45, China notes that during the period under review, a few new measures to 
further liberalize or facilitate FDI in China have  been adopted. Paragraphs 48 and 49 elaborate 
further on two, namely: (1) January 2009 amendmen t to the Catalogue of Priority Industries for 
Foreign Investment in Central-Western Region, which further opened up the coverage and scope of sectors for foreign investment, and (2) further streamlining to the policy of the 
delegating of authority to local governments which began in 2005.  
24. Could China please specify which industries (at the applicable review thresholds) are 
still subject to additional examination and approval procedures from NDRC?  
Answer 
Please refer to the answer to question 24 in the previous list of questions from Canada. 
Part III. Trade Policies and Practices by Measu re; (1) Introduction; paragraph 9, page 25: 
27. With respect to the 'national security review' of China's Anti-Monopoly Law of 
1 August 2008, could China please explain what process is underway in order to clarify the provisions and in what timeframe?  
Answer given 
At present, China is studying and drafting the rules on the security review of merger of domestic 
enterprises by foreign investors. These rules will se t out such particulars in respect to the security 
review authority, review mechanism and procedures, etc.  WT/TPR/M/230/Add.1 
Page 374  
 
  Follow-up Question 
Could China please indicate the timeframe for the studying and drafting of the rules to clarify 
the provisions of the 'national security review'?  
Answer 
By June 2010 there is no timeframe set  for the work in this respect.  
Part III. Trade Policies and Practices by Me asure; (2) Measures Directly Affecting 
Imports;(ii) Tariffs; (d) Tariff-rate qu otas (TRQs); paragraph 25, page 32: 
The Secretariat Report indicates that in 2009, TR Qs continue to be applied to 8 categories of 
imported goods, involving 45 tariff lines at the HS 8-digit level.  This includes a TRQ for wheat (covering 6 tariff lines) with a quota volume of 9, 636,000 metric tonnes.  The Secretariat Report 
also notes (paragraph 38, page 35) that an  STE accounted for 90% of the total quota allocated 
for wheat. Further, note 1 in Section 1b of China's WTO bound tariff schedule outlines that the 
remaining 10% is allocated "to any non STE possessi ng the right to trade in any product as set 
forth in Section 5 of China's protocol of Accession".  
From 2006-2009 the average TRQ fill rate for China's wheat TRQ was 4.3% (based on China's 
MA2 notifications) with no year exceeding 10% fill.   
Canada would like to seek clarification from China on the TRQ fill and operation of China 
wheat TRQ.   
31. Could China please outline whether the im ports under their whea t TRQ from 2006-2009 
were made by the importing STE (with 90% of the TRQ volume allocation) or by a non STE 
possessing the right to trade in any product as set forth in Section 5 of China's protocol of 
Accession?  
Answer 
Please refer to the answer to question 31 in the previous list of questions from Canada. 
Part III. Trade Policies and Practices by Measur e; (2) Measures Directly Affecting Imports; 
(vii) Standards and other Technical Requirement s; (a) Standards and technical regulations; 
paragraph 47, page 36: 
47. China is an active member of the APEC Telecommunications and Information Working 
Group (TEL) MRA Task Force.  Does China in tend to implement the APEC TEL Mutual 
Recognition Arrangement for Conformity Ass essment of Telecommunications Equipment?  
Answer 
Please refer to the answer to question 47 in the previous list of questions from Canada. 
Part III. Trade Policies and Practices by Measur e; (2) Measures Directly Affecting Imports; 
(vii) Standards and other technical requirement s; (b) Sanitary and phytosanitary measures 
(SPS); paragraph 54, page 38:  WT/TPR/M/230/Add.1 
 Page 375 
 
 
  The Secretariat report indicates that China is a member of the World Organization for Animal 
Health (OIE), the Codex Alimentarius Commis sion, and the International Plant Protection 
Convention (IPPC).     
52. China requires certification that pork meat exported to China be certified free from 
influenza A/H1N1.  However, according to the OI E on June 11, 2009, "pork and pork products 
handled in accordance with good hygienic pr actices recommended by the WHO, FAO, CODEX 
Alimentarius Commission and the OIE, are not a source of infection."  Would China please 
explain why it requires certification for imported  pork meat derived from animals subjected to, 
and that passed, veterinary ante mortem and post-mortem inspections?  
Answer Please refer to the answer to question 52 in the previous list of questions from Canada. 
Part III. Trade Policies and Practices by Measur e; (2) Measures Directly Affecting Imports; 
(vii) Standards and other Tec hnical Requirements; (c) Certif ication and Accreditation; 
paragraphs 55-58, page 38-39: 
The Secretariat report mentions the continued ex pansion of the Chinese Compulsory Product 
Certification (CCC) system to cover new pro ducts and sectors (paragraph 55-59). Canada has 
concerns because this threatens to limit the ability of Canadian exporters to access the Chinese 
market. Under the CCC system, only products t ested, inspected and certified by Conformity 
Assessment Bodies (CAB) recognized by the Certification and Accreditation Administration of the People's Republic of China (CNCA) can be sold in China.  
The process companies must follow in order to  test and certify their products under the CCC 
system is lengthy, complicated and costly. This process can also lead to the duplication of work, 
since often the same product is already certified for sale in Canada by a Canadian certification 
body. There are concerns that submitting equi pment to the CNCA for testing and certification 
constitutes a risk to the protection of intellect ual property. This concern reflects the experience 
of foreign companies with confidentiality breaches in the Chinese agencies which hold 
intellectual property information.  
59. Would the CNCA accredit foreign Conf ormity Assessment Bodies (CAB) to issue 
certificates of conformity for products subject to  its Compulsory Product Certification System 
(CCC)?  
60. If yes, what would be the process for a foreign lab to be accredited under the CNCA?  
Answer (for questions 59 and 60) Please refer to the answer to questions 59-60 in  the previous list of questions from Canada. 
Part III. Trade Policies and Practices by Measur e; (2) Measures Directly Affecting Imports; 
(vii) Standards and other Tec hnical Requirements; (c) Certif ication and Accreditation; 
paragraph 59, page 39:  
The Secretariat reports mentions that China ha s been participating actively in regional and 
international MRAs on certification and accreditation.  WT/TPR/M/230/Add.1 
Page 376  
 
  61. Could China specify with whom they have binding memorandum of 
understandings (MRAs) and if these MRAs enable foreign laboratories to issue certificates of 
compliance with China?  
Answer 
Please refer to the answer to question 61 in the previous list of questions from Canada. 
Part III. Trade Policies and Practices by Measur e; (2) Measures Directly Affecting Imports; 
(ix) Import-related financing; paragraph 71, page 42:  
The Secretariat report notes that "the Expo rt-Import Bank of China (EXIM Bank) offers 
import credit to importers in China to facilitat e imports of key technologies and equipment, or 
petroleum, natural gas, and other mineral produc ts in large-volume and long-term containers".  
75. Could China please indicate what percent age of import credits provided on an annual 
basis go to SOEs versus non-SOEs?  
Answer 
China has no such statistics. 
76. What is the value of loans with respect to the import purchase price?  
77. Is there a maximum loan amount?  
78. Could China please indicate how the interes t rate and other terms and conditions of the 
loans are established with respect to each borrower? 
Answer: (for questions 76-78) 
The amount of import credit usually does not exceed ce rtain amount of the commercial contract value, 
and the outstanding amount should be covered by th e enterprise itself. The import credit only covers 
the part which exceeds the self-owned funds of the ente rprise. As to the inter est rate, China adopts the 
policy of "imposing only lower limits with ceilings removed" for the lending rates of RMB by financial institutions. The lower limit is 0.9 time s of the People's Bank of  China benchmark rate. 
Financial institutions may determ ine their lending rates by themselves as long as the rates are above 
the lower limit.  
Part III. Trade Policies and Practices by Meas ure; (3) Measures Directly Affecting Exports; 
(ii) Export Subsidies; paragraph 75, page 42: 
The Secretariat report states that "China does not provide any export subsidies", and the 
Report by China (III. Trade Development and Trade Policies; (2) Promoting Trade and Investment; (ii) Improving Trade Financing; para graphs 66-68, page 18) highlights some export 
credit activities by Chinese institutions.  
81. Could China please indicate which sectors have been getting the export credits?  
82. Could China please describe any financing on preferential terms?   WT/TPR/M/230/Add.1 
 Page 377 
 
 
  Answer (79-82) 
China has not yet signed OECD Arrangement on Officia lly Supported Export Credits . However, in 
practice China Export and Import Bank refers to the Arrangement  for key conditions for issuing 
export credit. The basic frame work requirements of the Arrangement  have already been met. Besides, 
the bank also takes reference of the practices of offi cial export credit institutions of other countries.  
Sinosure adopts the common practice of ECAs in regard  to pricing mechanism. Premium is calculated 
based on a designed premium model, major factors of  the model include country risk and commercial 
risk rating, credit terms, risks covered, conditions  of the insurance policy, operating and financial 
costs and etc. 
Follow-up Question:  
 Could China please indicate which sectors h ave been getting the export credits and 
describe any financing on preferential terms?  
Answer (follow-up for questions 81 and 82) 
Regarding the sectors covered by the export credit as well as other detailed information, please refer 
to the 2009 yearbook of the EXIM bank at http:// www.eximbank.gov.cn/annual/2009.shtml and the 
year books of SINOSURE at http://www.sinosure.com.cn/sinosure/gywm/xbkw/gsnb/ default.html. 
Part III. Trade Policies and Practices by Meas ure: (3) Measures Directly Affecting Exports; 
(viii) State trading; paragraph 90, page 46: 
The Secretariat report states that while "imports subject to state trading may be imported by 
non-state-trading enterprises (STEs), state trading of exports must be conducted by STEs".  
100. Could China please explain its rationale for utilizing non-state-trading enterprises for 
the export of tungsten, antimony and silver?  
Answer 
The text in paragraph 90, Chapter III of the Secretaria t Report reads that "state trading of exports must 
be conducted by STEs". Therefore there is no such a case as mentioned in the question that non-state-
trading enterprises are used for the expor t of tungsten, antimony and silver.  
The Secretariat report also states that export prices charged by STEs are based, inter alia, on 
international market prices.  
101. Why does China require that state trading of exports be contro lled by STEs when 
products are traded globally and accomp anied by international market prices?  
Answer 
STEs operate according to market conditions. As to th e list of products subject to state-trading, i.e. 
Annex 2 of China's Accession Protocol, they were  results of negotiations between China and WTO 
members at the time when China acceded.  
Part III. Trade Policies and Practices by Meas ure: (4) Measures Affecting Production and 
Trade; (ii) Direct expenditures, industrial policies, and price "guidance" measures; 
paragraph 118, page 53: WT/TPR/M/230/Add.1 
Page 378  
 
  103. Could China please outline the details of  the non-ferrous metal sector-specific policy 
developed to address reduced external demand due to the global crisis?  
Answer 
Please refer to the answer to question 103 in the previous list of questions from Canada. 
Part III. Trade Policies and Practices by Meas ure: (4) Measures Affecting Production and 
Trade; (ii) Direct expenditures, industrial policies, and price "guidance" measures; 
paragraph 119, page 53:  
104. Under the Price Law, there are both gov ernment-set and government-guided prices. 
Could China please provide a list of commodities a nd state which are subject to government-set 
and government-guided price? Can China please ex plain what level of discretion provincial and 
local governments have in setting prices?  
105. Could China please indicate whether the Bu reau of Commodity Pricing in each province 
is in charge of price "guidance" for any mineral or metal commodities or products?  
106. If "yes", could China please name the province and describe the corresponding price 
"guidance" for each mineral or metal commodity or product?  
Answer 
Please refer to the answers to questions 104, 105-106 in the previous list of questions from Canada. 
Part III. Trade Policies and Practices by Meas ure; (4) Measures Affecting Production and 
Trade; (v) Intellectual Property Rights; paragraphs 151-154, pages 61-62: 
The Secretariat report states that "China has al so been intensifying the enforcement of IPR 
protection, for which it has a double-track system: administrative actions and judicial 
measures.  Regarding criminal penalties, two j udicial interpretations were promulgated on the 
application of criminal law in IP Cases. Since th en, the number of intellectual property-related 
criminal cases has increased cons iderably." In addition, the Secretariat report mentions that 
China conducts operations such as campaigns to  improve public awareness on IPR protection, 
set up reporting complaint centers, hotline, and on line reporting and complaint window, etc.   
111. Canada applauds China's efforts to enhance intellectual property right (IPR) protection 
of all main categories of IPR. Has China reviewed the value and volume thresholds that must be met in order for commercial scale intellectual pr operty rights violations to be subject to 
criminal procedures and penalties?  
Answer 
Please refer to the answer to question 111 in the previous list of questions from Canada. 
Part III. Trade Policies and Practices by Meas ure: (4) Measures Affecting Production and 
Trade; (v) Intellectual Property Rights; paragraph 152, page 62:  
113. Will China provide domestic and foreign stakeholders an opportunity to comment on 
new amendments to the Trademark Law?   WT/TPR/M/230/Add.1 
 Page 379 
 
 
  Answer given: 
The revisions to the Trademark Law will be made in compliance with the transparency obligations 
under China's commitments at its accession to WTO.  
Follow-up Question:  
 Could China please indicate whether it w ill be providing domestic and foreign 
stakeholders an opportunity to comment on these revisions?  
Answer 
China will provide opportunities to comment for both  domestic and foreign interested parties in line 
with the transparency related principles and obl igations of the WTO rules and China's accession 
commitments.  
Part III. Trade Policies and Practices by Meas ure: (4) Measures Affecting Production and 
Trade; (v) Intellectual Property Rights; paragraph 154, page 62:  
The Secretariat report states that "China ha s set up IPR working groups and information-
exchange mechanisms with various countries and regions to enhance IPR protection".  
116. Could China provide a list of IPR working groups and information-exchange 
mechanisms it has with other countries?  
Answer 
Please refer to the answer to question 116 in the previous list of questions from Canada. 
Part III. Trade Policies and Practices by Meas ure; (4) Measures Affecting Production and 
Trade; (v) Intellectual Property Rights; Box III.2: IPR Enforcement, page 63:  
China has made significant steps in addressing  a number of areas in Intellectual Property 
Rights (IPR). With regards to IPR enforcement, the promulgation of a new framework and 
regulations is a major move and requires follow up with Guidance Documents. These 
documents are aids to help the public to inte rpret the impact of new regulations, and are 
particularly important when the central gov ernment delegates enforcements of trademark 
rights to local authorities. Guidance Documents do not generally carry regulatory weight in and 
of themselves, but within the context of suppo rting regulatory amendments will foster greater 
transparency and hopefully reduce the amount of litigation they are current see in the judicial 
system.  
119. Could China clarify if they plan to adopt this best practise of elaborating such guidance 
documents to support the new regulatory bodies in  light of the new national IPR strategy?  
Answer Please refer to the answer to question 119 in the previous list of questions from Canada. 
Part III. Trade Policies and Practices by Meas ure; (4) Measures Affecting Production and 
Trade (v) Intellectual Property Rights, (a) Patents: paragraph 160, page 65: WT/TPR/M/230/Add.1 
Page 380  
 
  According to the Secretariat report, the revi sed Patent Law has introduced a compliance 
requirement and a disclosure obligation for th e application of patents based on genetic 
resources. Firstly, the revised Patent Law provid es that no patent shall be granted if an 
invention is based on genetic resources obtained or used in violation of any laws or administrative regulations. Secondly, the revised  Patent Law requires the applicant to disclose 
and explain the direct and original source of the ge netic resource. If the applicant is not able to 
disclose the original source, the applicant must provide the reasons.  
123. When will the specific relevant laws and administrative regulations be issued? For 
instance, the new Patent Law does not
 clarify what kind of reasons are justifiable or how much 
detail is required.  
Answer 
Please refer to the answer to question 123 in the previous list of questions from Canada. 
Part III. Trade Policies and Practices by Meas ure: (4) Measures Affecting Production and 
Trade; (v) Intellectual Property Rights; (b) Trade marks; paragraph 164, page 66:  
The Secretariat report states that in 2008 "the number of trade marks reviewed was higher 
than the number of applications, reflecting faster registration". In China's Action Plan on 
Intellectual Property Protection 2010, there is a goal of shortening examination periods for trademark applications down to one year.  
125. Could China please indicate what the current average time required is to register a 
trademark in China?  
Answer Please refer to the answer to question 125 in the previous list of questions from Canada. 
Part IV. Trade Policies by Sector; (1) Introduction; paragraph 3, page 69:  
The Secretariat report notes that to improve coor dination across industries and ministries in its 
energy sector, China restructured the regulatory framework by setting up the National Energy Administration (NEA) in 2008. The report notes that it remains unclear  how the NEA interacts 
with the National Development and Reform Commission (NDRC) and whether it has the 
authority to effectively coordinate the interest s of ministries, commissions, and state-owned 
energy companies.  
126. Could China please explain how policy-maki ng and regulations in the energy sector has 
been organized, and outline the implications for further reform on energy and resource products?  
Answer given: 
In March 2008, the State Council c onducted the sixth institutional re form, and decided to establish 
National Energy Administration and National Energy  Board, and to cancel National Energy Leading 
Group and its administrative body so as to strengt h energy industry management, change multiple 
management, decentralized management  and poor coordination situation. 
In August 2008, the National Energy Administration was formally put into operation, directly under 
National Development and Reform Commission (ND RC). After two years of preparation, National  WT/TPR/M/230/Add.1 
 Page 381 
 
 
  Energy Board as a high-level energy deliberation an d coordination authority was formally established 
in January 2010. National Energy Board is mainly  responsible for the overa ll coordination of major 
energy issues, of which Premier WEN Jiabao holds the post of director, Vice Premier LI Keqiang holds the post of deputy director, and leading officials from 21 central and state ministries and commissions serve as members of the Commission, in cluding those from NDRC, Ministry of Science 
and Technology, Ministry of industry and information technology, Ministry of Finance, Ministry of 
Land and Resources, Ministry of Environmental Protec tion, Ministry of Transport, Ministry of Water 
Resources and State Electricity Regulatory Commission (SERC). The National Energy Administration acts as the administrative body, which provides sound guarantee for decision-making, coordination and enforcement of energy affairs. Th e administration over energy industry is thus more 
centralized, clear and strengthened.  
Follow up question: 
Could China explain the National Energy Admini stration's regulatory powers in terms of the 
approval process for future regulations? In pa rticular, do foreign enterprises have an 
opportunity to comment formally on energy re gulations under development by the National 
Energy Administration?  
Answer 
According to the Legislation Law , Regulations on Procedures for Formulation of Administrative 
Regulations and Regulations on Procedures for Form ulation of Departmental Rules , regulations are 
formulated and approved by the State Council, and NEA has the power to formulate and approve 
department rules. For such legislation, China will provide opportunities to comment for both domestic 
and foreign interested parties in line with the tran sparency related principles and obligations of the 
WTO rules and China's accession commitments.  
Part IV. Trade Policies by Sector; (2) Agricult ure; (i) Features and market developments; 
paragraph 10, page 71:  
The Secretariat report notes that "At least 16 institutions are in charge of agriculture-related 
issues in China".  
127. Could China please list and elaborate upon th e mandate of each of these institutions and 
what role these institutions play in developing and delivering agricultural policy?  
Answer 
Please refer to the answer to question 127 in the previous list of questions from Canada. 
Part IV. Trade Policies by Sector; (2) Agricult ure; (iii) Policy Instruments; (b) Internal 
measures; paragraph 30, page 75:  
The Secretariat Report notes that China has a minimum procurement price scheme for wheat 
and rice in the main production areas and that the Government purchases these products at the 
minimum procurement price when the market price falls below a given threshold.  The 
minimum procurement price for these products  was raised twice in 2008 and again in 
2009. These purchases are funded by loans made to the state-owned China Grain Reserves 
Corporation (Sinograin).  The loans are subsequent ly repaid with the proceeds from the sale of 
the commodity.  In addition, China holds mini mum reserves of wheat and rice in keeping with 
its policy of a given self-sufficiency ratio. WT/TPR/M/230/Add.1 
Page 382  
 
  134. What are the criteria for determining when Sinograin sells the commodities it has 
purchased back onto the market and at what price?  
Answer given: 
The price by Sinograin use a market-reference price w ith reference to a standard price by Finance of 
Ministry.   
Follow-up Question: Could China please provide more details on the criteria for determining when
 Sinograin sells 
the commodities it has purchased back onto the market?  
Answer 
Preliminary translation of the answer to the original  question 134 is adjusted for purpose of translation 
accuracy. Please firstly refer to the adjusted translation of the answer. For the follow-up question, as 
one of the tasks of Sinograin is to maintain the st ability of the grain market, the selling back to the 
market usually happens at the time when the price is in the trend of going higher.  Decisions of the 
selling-backs are made with reference to the mark et conditions. For more details it is difficult for 
China to provide right now.  
Part IV. Trade Policies by Sector; (3 ) Energy; paragraph 36, page 76:  
136.  There are restrictions limiting market opportunities for foreign energy companies 
selling energy equipment and technology in China. Some of these restrictions are national and some are local in nature. When will China relax rest rictions on the sale of electrical equipment 
and technology in the Chinese market to utilities?   
Answer Please refer to the answer to question 136 in the previous list of questions from Canada. 
Part IV. Trade Policies by Sector; (4) Manufacturing; paragraphs 44, page 78: 
The Secretariat report states that "The Government (of China) has been adjusting its VAT 
rebate rates or export taxes to  control, restrict, or 'manage' exports of certain products".  
137. Could China please provide a detailed d escription of the sectors and the various 
measure employed to "control, restrict, or manage" exports of certain products?  
138. Aside from low import duties, full or part ial VAT rebates, export taxes, preferential 
loans, and consolidation, are there any other dir ect interventionist measures which are used to 
"guide" certain sectors of the economy?  
139. Could China please identify the sectors that  are implicated and outline how these sectors 
were selected?  
Answer (for questions 137-139) 
Please refer to the answer to questions 137-139 in  the previous list of questions from Canada.  WT/TPR/M/230/Add.1 
 Page 383 
 
 
  Part IV. Trade Policies by Sector; (5) Servi ces; (ii) Financial Services; (b) Insurance; 
paragraph 63, page 83: 
The Secretariat report notes that a moratorium on sales offices for insu rance was imposed in 
September 2008, and that further to this mora torium the Insurance La w has been amended. 
143. Could China please provide an update on ho w the amendments to the rules have been 
working, and in particular the changes to strengthen the internal control of insurance 
companies?  
Answer 
Please refer to the answer to question 143 in the previous list of questions from Canada 
JOINT CANADA, UNITED STATES, MEXICO QUESTIONS  
Policy Statement by China (WT/TPR/G/230, 26 April 2010)  
Part II. General Economic Environment and Policy Direction; (2) Stimulus Package in 
Response to the Global Financial Crisis; (iii) Advancing Industrial Restructuring; 
paragraphs 21-23, page 8: 
We applaud China's efforts to close outdated, in efficient and/or polluting steelmaking capacity. 
Given its global influence, China's pursuit of the restructuring of its steel industry could, if 
successful, have a significant and long lasting po sitive impact on the effective functioning of 
global steel markets.  We note with int erest the importance China attaches to industrial 
restructuring. It is in this context that assist ance to small and medium-sized enterprises within 
the steel sector, typically the most inefficient and/ or polluting enterprises, are identified as a key 
element of China's stimulus package and thus such assistance  stands out as contrary to China's 
closure and restructuring efforts. While the difficulties faced by such enterprises are 
acknowledged, such assistance may act to ob viate the more general capacity reductions 
envisaged by the overall iron and steel polic y. How will China reconcile the potentially 
competing goals of reducing and/or eliminating backward production capacities while at the same time assisting such enterprises to cushio n those hardest hit by global developments?  
Answer 
The relatively fast growth of the steel production cap acity in recent years was primarily the result of 
the boost of the domestic market demand. Since 2004,  total capacity control, elimination of outdated 
production capacity and industrial restructuring have always been the basic principles of the China's steel industry policy. Even against the background of  international financial crisis, the restructuring 
plan of the steel industry adopted by China has taken as its priority total capacity control and 
elimination of outdated production capacity, instead of export promotion. Reduction and elimination 
of outdated production capacity will bring China's steel  industry to an efficient and environmentally 
friendly path, thus meeting the development needs ag ainst the background of globalization. As to the 
notion in the question that  assistance to small a nd medium-sized enterprises within the steel sector, 
typically the most inefficient and/or polluting ente rprises, are identified as a key element of China's 
stimulus package, China does not know on what gr ounds it is based, but this notion is certainly not 
correct. 
Part II. General Economic Environment and Policy Direction; (2) Stimulus Package in 
Response to the Global Financial Crisis; ( iii) Increasing consumer demand; paragraph 26, 
page 9:  WT/TPR/M/230/Add.1 
Page 384  
 
  We note the series of measures that China has adopted to improve the well-being of its people. 
In this respect, has China adopted any sector sp ecific adjustment measures to assist workers 
displaced by restructuring in the iron and steel industries?  
Answer 
To solve such problems as personnel relocation re sulted from closure and el imination of outdated 
production capacity, the Chinese government will gi ve proper financial s ubsidy to support the 
settlement of relevant relocation problems such as living assistance to and re-employment training of 
laid-off workers. However, such subsidy is not direct ed only at the steel industry, it is applicable also 
to other industries subject to elim ination of outdated production capacity. 
Report by the Secretariat (WT/TPR/S/230, 26 April 2010)  
Part III. Trade Policies and Practices by Meas ure; (3) Measures Directly Affecting Exports; 
(iii) Export Taxes; paragraphs 77-78, page 43: 
And Part III. Trade Policies and Practices by Meas ure; (4) Measures Affecting Production and 
Trade; (ii) Direct Expenditures, Industria l Policies and Price "Guidance" Measures; 
paragraph 118, page 53: 
The WTO Secretariat notes that China has incl uded the "adjustment" of VAT rebate rates as 
part of its sector-specific stimulus plans, including the plan for steel.  China has stated that as part of its stimulus it would maintain "fle xible" VAT and border tax policies to "maintain 
China's share of the international market."  We are concerned that China chose to increase 
VAT rebates on steel at a time of low demand in global markets and that Chinese government 
and industry leaders continue to describe export targets for steel of about 10 percent of 
production without regard to market forces.  Please explain why China continues to apply 
differential VAT rebates to steel and steelmaki ng inputs and increased VAT rebates to promote 
exports in 2009. 
Answer First of all, China's tax rebate on export goods do es not exceed the VAT levied on them. This is the 
case even after raising rebate rates on certain products in 2009. 
Secondly, the general direction of the VAT rebate policy of China is to achieve policy stability and 
continuity on the basis of continuously improvi ng tax collection and administration. The rebate 
adjustment in 2009 was in response to requests of businesses and industry associations in order to 
help them overcome enormous difficulties under the sp ecial background of the international financial 
crisis. The product coverage and margin of the rebate raise are determ ined upon comprehensive 
assessment taking into account various factors incl uding the seriousness of the shock and difficulties 
faced by various sectors, employment situation in the sectors, as well as the improvement achieved in terms of pollution and energy consumption of these sectors etc.  
Part III. Trade Policies and Practices by Measur e; (2) Measures Directly Affecting Imports; 
(iv) import prohibitions and licensing, (b) Licensing, paragraph 35, page 34: 
China maintains import licensing on certain iron a nd steel imports.  China is by far the largest 
importer of iron ore and we are concerned that China has used increasingly restrictive iron ore 
licensing to control imports and direct iron ore to specific steelmaking enterprises.  What are  WT/TPR/M/230/Add.1 
 Page 385 
 
 
  the criteria for obtaining iron and steel licenses?  What is the purpose of licensing for imports of 
iron ore?  What is the fee structure associated  with obtaining licenses?  What is the role of 
China's steel trade associations (including CISA and CCCMC) in administering export and 
import licensing programs for iron and steel?   
Answer The automatic import licensing of iron ore is to sa tisfy the need of statistics collection and import 
monitoring, and there is no limit on quantity or price.  
The Ministry of Commerce is the competent authority  in charge of the automatic import licensing of 
iron ore. The materials required for application for iron ore automatic import license are prescribed in the Measures for the Administration of Automatic Import License of Goods, which is available at 
http://www.mofcom.gov.cn/ aarticle/b/e/200501/  20050100327887.html. Where the materials 
submitted by the applicant satisfy the provisions in  the Measures for the Administration of Automatic 
Import License of Goods, the Ministry of Commer ce will issue automatic import license to the 
applicant. There is no other charge for the appli cation for iron ore automatic import license except for 
the certificate cost. 
The Chinese government notes that Chinese steel ente rprises have reached certain consensus on the 
issue of iron ore import, and have adopted industr y self-discipline measures. These actions epitomize 
the will of the industry, and members may obtain re levant information from the website of China Iron 
and Steel Association at http://www.chinaisa.org.cn. 
NEW ZEALAND – Part 1
 
Trade Policy Review: Report by China 
III. T RADE DEVELOPMENT AND TRADE POLICIES  
2. P ROMOTING TRADE AND INVESTMENT  
(i) Launching a Pilot Programme of settlement of cross-border trade in RMB  (WT/TPR/G/230, p. 18, para. 65) Also relates to (WT/TPR/G/230, p. 15, para. 52)  
The report notes that China is conducting expe riments in cross-border trade in RMB. Could 
China please provide detail on the RMB settlement experiments, including what kinds of government-to-government structures would be n ecessary for foreign banks to participate in 
this scheme?  
Answer 
To deal with global financial crisis and to prom ote the development of trade between China and its 
neighboring countries and regions, China decided in  April 2009 to launch a pilot programme of 
settlement of cross-border trade in RMB in Shangha i, and the cities of Gua ngzhou, Shenzhen, Zhuhai 
and Dongguan in the Guangdong Province. The programme so far has been going on smoothly. The channels of settlement in RMB function well a nd various lines of business are conducted in good 
order, which have simplified procedures of pilot enterprises and facilitated trade and also helped 
import and export enterprises to avoid effectively exchange rate risks. 
On 17 June 2010, China further expanded the pilo t programme of cross-border trade settlement in 
RMB, and the areas in China joining the pilot pr ogramme have been expa nded from Shanghai and the 
four cities in the Guangdong Province to a ltogether 20 provinces, autimonous regions and 
municipalities including Beijing, Tianjin, Inner Mongo lia, Liaoning, Shanghai, Jiangsu, Zhejiang, WT/TPR/M/230/Add.1 
Page 386  
 
  Fujian, Shandong, Hubei, Gua ngdong, Guangxi, Hainan, Chongqing , Sichuan, Yunnan, Jilin, 
Heilongjiang, Tibet, and Xinjiang etc. Meanwhile, there would be no longer restriction on overseas 
areas where cross-border trade settlement in RMB could be done. Enterprises may settle  their cross-
border trade in RMB with business partners in a ll countries and regions that are willing to accept 
RMB for settlement. 
Trade Policy Review: Report by Secretariat  III. T
RADE POLICIES AND PRACTICES BY MEASURE  
2. M EASURES DIRECTLY AFFECTING IMPORTS  
(vii) Standards and other technical requirements (WT/TPR/S/230, p. 37, para. 51) 
It appears that some products that are not
 listed in the Catalogue of Entry-Exit Commodities 
Subject to Inspection and Quarantine may be required to undergo entry-exit inspection. What is the process for determining which products  may undergo this inspection? What are some 
examples of products not in the Catalogue th at have been subject to spot checks?  
Answer According to the Law on Import and Export Commodity Inspection  and its implementing regulations, 
AQSIQ is responsible for promulgating and adjusting the Catalogue of Import and Export 
Commodities Subject to Inspection and Quarantine  pursuant to the principles of protecting the health 
and safety of human beings, protecting the life a nd health of animals or plants, protecting the 
environment, preventing frauds and safeguarding national security. For products not listed in the 
Catalogue , sample inspections may be required on those pr oducts which are related to safety, health 
and environment protection, and have been fre quently complained by domestic and overseas 
consumers, or have had a relatively large number of goods returns, or have had serious quality 
accidents or have recently had new special technical requirements in China or abroad. AQSIQ decides, adjusts and publishes the import and export commodities beyond the Catalogue that are 
subject to sample inspections and may publish sam ple inspection results, announce alerts, and take 
necessary preventive measures or report the sample inspection results to relevant departments.  
IV. T
RADE POLICIES BY SECTOR  
5. S ERVICES  
WT/TPR/S/230, page 79, para. 46 
The report indicates that the Chinese Governme nt has placed more emphasis on developing 
services by way of further liberalisation of services, including financial services, 
telecommunications, and tourism. Does China have  any plans for further services sectors to be 
liberalised, and if so, which sectors?  
Answer 
As a developing country, China has been constantly  promoting the reform and opening up in the 
services sector, although the service s industry in China is still in th e early stage of development. 
China will further raise the devel opment level of the services sector  and its proportion in the national 
economy. In this respect, China will continue to cons ummate its policies for market access of services 
sectors, speed up the establishment of an open, fair , and standardized system for services suppliers 
and encourage the participation of private investment including foreign investment. To be specific, 
China is going to expand the br eadth and depth of opening up in the services sector, encourage 
foreign capital to invest in energy conservati on and environmental protection services, modern 
services such as industrial designing, outsourcing, l ogistics etc, and Chinese and foreign companies  WT/TPR/M/230/Add.1 
 Page 387 
 
 
  are also encouraged to strengthen R&D cooperation. To build sound foreign investment environment, 
China will continue to streamline procedures for qua lification and licensing. The State Council issued 
Certain Opinions on Accelerating the Development of  Services Sector in 2007 and Certain Opinions 
on Better Utilization of Foreign Investment early this year. The Catalogue for the Guidance of 
Industries for Foreign Investment will be revised for the fifth times, and Catalogue of Advantaged 
Industries for Foreign Investment in Mid-West Chin a will also be amended in  the near future. These 
latest development will certainly result in furt her market access opportunities for foreign services 
suppliers in China. 
As a member in WTO acceded not long ago, China has made extensive commitments in the services 
sectors. 100 services sectors and sub-sectors are liberalized according to China's accession 
commitments. Wholly foreign-owned subsidiaries ar e allowed in 54 sub-sectors and majority foreign 
ownership is allowed in other 23 sub-sectors. More over, national treatment is accorded to foreign 
invested enterprises in more than  80 sub-sectors, and most mode 1 and 2 commitments are "none" for 
foreign services suppliers. Like many other members, China only maintains very few equity limitations on some important and sensitive sectors. China will continue to promote liberalization in 
the services sector in accordance with its domestic  market circumstance and its bilateral and 
multilateral trade agreements. 
NEW ZEALAND – Part 2
 
Trade Policy Review: Report by China II. G
ENERAL ECONOMIC ENVIRONMENT AND POLICY DISCUSSION  
Stimulus Package 
(WT/TPR/G/230, p. 18, para. 15)  
The contribution of China's stimulus package to supporting global economic growth has been 
significant.  Can China explain what measures it has taken to ensure that the package has been 
implemented in such a way as to ensure that th ere is no inadvertent preference or support to 
domestic suppliers or industry?  
Answer 
In formulating and implementing various policies and measures in response to the international 
financial crisis, China attaches great importance to international factors and possible impact of such 
measures upon other members, making reference to in ternational practices to the extent possible and 
respecting fully WTO rules. Assessment of WTO consistency of such policies and measures is particularly stressed. Furthermore, China also no tifies on a regular basis its latest trade-related 
measures to the monitoring mechanism that WTO established under its Trade Policy Review body 
after the outbreak of the crisis, and verifies carefully  all the information regarding China gathered and 
transmitted by the WTO Secretariat, so as to realiz e transparency of China's trade-related measures 
adopted since the global financial crisis.  
Trade Policy Review: Report by Secretariat  
III. T
RADE POLICIES AND PRACTICES BY MEASURE  
2. M EASURES DIRECTLY AFFECTING IMPORTS  
Contingency measures (WT/TPR/S/230, p. 26, para. 39)   
The report notes that between 1 January 20 07 and 31 December 2008 China adopted 16 anti-
dumping measures.  In conducting anti-dumpi ng investigations, how does China meet its WT/TPR/M/230/Add.1 
Page 388  
 
  obligations under Article 6.9 of the WTO Agreement on the Implementation of Article VI of 
GATT 1994 to inform all interested parties, in sufficient time for them to defend their 
interests, of the basis for the decision whether to apply definitive measures? 
Answer 
With respect of Article 6.9 of the WTO Agreement on Implementation of Article VI of GATT1994, 
Regulations of the People's Republic of China on Anti-Dumping  (G/ADP/N/1/CHN/2/Suppl.3) in 
Article 25.2 provides that before the final determ ination is made, the Ministry of Commerce shall 
inform all known interested parties of the essentia l facts on which the final determination is based. 
Provisional Rules on Disclosure of Information in Anti-dumping Investigations  
(G/ADP/N/1/CHN/2/Suppl.1) and Rules on Information Access and Disclosure in Industry Injury 
Investigations  (G/ADP/N/1/CHN/2/Suppl.6) of Ministry  of Commerce contain further detailed 
provisions in this respect. Therefore, the investiga ting authority in China will disclose to interested 
parties or their agents the essential facts on which th e final determination is based within a reasonable 
period of time before the definitive determinati on in accordance with the requirement of the WTO 
Anti-Dumping Agreement so that the interested pa rties will have sufficient time to submit comments 
to defend their interests. 
(v) Intellectual Property Rights 
d. Geographical Indications WT/TPR/S/230, page 67, para. 196   
The Secretariat report notes that Geographical i ndications (GIs) are currently regulated by: the 
State Trademark Office, the AQSIQ, and the Mini stry of Agriculture.  Could China provide 
more information about why and how three di fferent bodies administer the GI regime in 
China? Is there an objections procedure in pla ce for third parties who wish to oppose the 
protection of a certain GI? 
Answer 
The geographical indication protection is carried ou t by the State Administration for Industry and 
Commerce (SAIC), the Ministry of Agriculture, and General Administration of Quality Supervision, 
Inspection and Quarantine (AQSIQ). They differ from e ach other in respect of legal basis, protection 
means and scope, remedies, division of duties and work focuses. The SAIC protects geographical 
indications by applying collective trademark and ce rtification trademark registration pursuant to the 
Trademark Law. Corresponding remedies for ge ographical indication infringement include 
administrative, civil and criminal ones. The Ministry  of Agriculture has registration administration for 
geographical indications of agricultural products based on administrative rules formulated in 
accordance with Law on Quality Security of Agricult ural Products. The focus of the protection is on 
geographical indication resources of agricultural products, product quality and traditional farming 
culture. AQSIQ's protection of geographical i ndication focuses on processing, which is based on 
administrative rules formulated in accordance with Product Quality Law. 
PERU – Part 1
 
WT/TPR/S/230 II. R
ÉGIMEN DE POLÍTICA COMERCIAL :  MARCO Y OBJETIVOS  
II. T RADE POLICY REGIME :  FRAMEWORK AND OBJECTIVES  
3) Formulación, administración y aplicación de la política comercial 3) Formulation, administration and implementation of trade policy  WT/TPR/M/230/Add.1 
 Page 389 
 
 
  i) Principales leyes comerciales 
i) Main trade laws 
Párrafo 15: Sobre las disposiciones para la divu lgación de la información gubernamental, ¿en 
qué idiomas se hace o se tiene previsto hacer?  
Paragraph 15:  Concerning the provisions on the disclosure of government information, in what 
languages is it done or planned to be done? 
Answer 
The Chinese government uses the official language of Chinese to disclose government information. 
However, since 1979, the laws passed by the National People's Congress and the administrative 
regulations promulgated by the State Council have  been regularly translated into English and 
published. 
III. P
OLÍTICAS COMERCIALES , POR MEDIDAS  
III. T RADE POLICIES AND PRACTICES BY MEASURE  
1) I NTRODUCCIÓN  
1) I NTRODUCTION  
Párrafo 1: ¿Cuál es el objetivo y ámbito de aplicación de la reforma del tránsito aduanero? 
¿Puede China indicar cuáles son los dispositivos legales que regulan dicha reforma?  Paragraph 1:  What is the objective and scope of the customs transit reform?  What are the 
legal provisions governing this reform? 
Answer 
With regard to the Customs transit reform, or th e reform to promote regi onal integration of the 
Customs administration, Chinese government ini tiated the pilot practice in October 2005 in 
11 Customs including Customs in Shanghai, Hangzhou and Ningbo of the Yangtze River Delta Area, Customs in Guangzhou, Shenzhen, Gongbei, Huangpu and Jiangmen of the Pearl River Delta Area, 
and also Customs in Beijing and Tianjin of the B ohai Rim Region. At the end of July 2006, the 
General Administration for Customs of China decide d to formally launch nationwide the reform to 
promote regional Customs clearance.  
In the mode of regional Customs clearance, the ex isting limitations as a result of Customs districts 
were eliminated, and the "two declarations, two rele ases" practice were changed to "one declaration, 
one release." After the clearance of imported goods at  the port, they generally can be directly 
transported to the plant for discharge. After being lo aded in the factory, goods to be exported can be 
transported directly to the Customs at the port for loading into the ships (veh icles) and exit. Customs 
procedures were simplified, costs reduced, and e fficiency of import and export clearance of goods 
improved. After introduction of the regional Cust oms clearance, clearance procedures can be 
completed generally within one working day. The lo gistics constraints caused by division of Customs 
districts were reduced. Inland enterprises could bene fit from the same convenien ce as those located at 
coastal ports. 
2) M
EDIDAS QUE AFECTAN DIRECTAMENTE A LAS IMPORTACIONES  
2) M EASURES DIRECTLY AFFECTING IMPORTS  
i) Procedimientos aduaneros, valoración y normas de origen i) Customs procedures, valuation, and rules of origin WT/TPR/M/230/Add.1 
Page 390  
 
  a) Procedimientos aduaneros e insp ección previa a la expedición 
a) Customs procedures and pre shipment inspection 
¿La Administración Aduanera de China cuenta con algún portal electrónico o base de datos 
pública, dirigido al sector empresarial? ¿Está di sponible en otro idioma diferente al chino? 
 
Does China's customs administration have some  kind of website or public database targeting 
the business sector?  Is it available in any language other than Chinese? 
Answer 
Please consult the website of the General Administration for Customs of China at 
www.customs.gov.cn. Its English website is english.customs.gov.cn. 
vii) Normas y otras prescripciones técnicas 
vii) Standards and other technical requirements 
Párrafo 43: ¿Podría brindar más información sob re en qué consisten las normas profesionales 
de China?  
Paragraph 43:  Could you please provide us more information on what China's professional 
standards are? 
Answer 
According to China's Standardization Law, standard s in China are divided into national standards, 
industry standards, local standards and enterprise stan dards. For technical requirements that need to be 
unified across the country, national standards shoul d be developed. National standards shall be 
developed by the administrative department for sta ndardization under the Stat e Council. For technical 
requirements where national standards are absent but  which need to be unified within specific 
industry across the country, industry standards ma y be developed. Industry standards shall be 
developed by relevant admini strative departments under the St ate Council and filed with the 
administrative department of standardization under the State Council. After formulation and 
promulgation of national standards, industry sta ndards are abolished simultaneously. For safety and 
sanitation requirements of industrial products wher e national standards and industry standards are 
absent but which need to be unified within a provin ce, an autonomous region or a municipality, local 
standards may be established. Local standards shall be formulated by administrative departments for 
standardization of provinces, autonomous regions or municipalities and filed with the administrative 
department of standardization under the State C ouncil and other related ad ministrative departments 
under the State Council. After formulation and pr omulgation of national standards or industry 
standards, local standards are abolished simultane ously. Where there are no national standards or 
industry standards for a product produced by an ente rprise, enterprise standards should be developed 
as the basis for organization of production. Product st andards of the enterprise must be filed with the 
local government administrative departments for standardization and other relevant competent 
administrative departments. Where there are alread y national standards or industry standards, the 
State encourages enterprises to establish their own st andards more stringent than national standards or 
industry standards, which are to be applied within these enterprises. That sai d, where the formulation 
of standards is otherwise provided for by law, th e provisions of such law shall prevail. For more 
details, please refer to the website of the Standard ization Administration of China at www.sac.gov.cn.   
 Párrafo 43: ¿Cuáles son los principales sectores en los que China ha alineado sus normas 
técnicas con estándares internacionales?   WT/TPR/M/230/Add.1 
 Page 391 
 
 
  Paragraph 43:  What are the main sectors in which China has aligned its technical standards 
with international standards? 
Answer 
By the end of 2009, 68% of China's national standa rds in related areas are international or overseas 
advanced standards. Related areas refer to areas  where China's standardization work has its 
counterpart in international standardization work. This includes standards identically adopted (IDT), 
equally adopted (EQV), or adopted with modification (MOD). 
Párrafo 43: ¿Qué medidas se están tomando o se pien san adoptar, si fuera el caso, respecto a las 
preocupaciones de la OMC de acuerdo al documento G/TBT/W/300, sobre la falta de 
notificaciones correspondiente a un cambio  de norma voluntaria en obligatoria? 
 
Paragraph 43:  What measures, if any, are being taken or planned with respect to the WTO's concern expressed in document G/TBT/W/300 at the lack of notifications of changes of 
standards from voluntary to mandatory? 
Answer Technical regulations and conformity assessmen t procedures of China are all published on the 
gazettes and official websites of competent authoritie s. Since the entry into the WTO, China has been 
seriously fulfilling the transparency obligations  under the TBT Agreement, with over 740 TBT 
measures notified so far. China's TBT Enquiry Point has also responded to over 2,000 pieces of enquiries. China will continue to fulfil its due ob ligations in line with the TBT Agreement. If 
voluntary sectoral standards are incorporated in mandatory conformity assessment procedures, China 
will notify to the WTO according to the requirement of the TBT Agreement. 
Párrafo 45: ¿La información sobre los documentos  de asesoramiento técnico está disponible al 
público en alguna página web? Si esto es así, ¿podrían brindarla por favor?  Paragraph 45: Is information on the advisory technical documents available to the public via 
the web?  If so, what is the website? 
Answer 
Yes, the information is published on the website of AQSIQ (http://www.aqsiq.gov.cn). 
Transparencia: ¿Cuál es el estado de las noti ficaciones  a la OMC, realizadas por China, 
respecto de sus reglamentos técnicos?  
Transparency:  What is the status of China's WTO notifications with respect to its technical 
regulations? 
Answer 
Since the entry into the WTO, China has notified over 740 TBT measures to the WTO. 
Transparencia: ¿Cuáles son los procedimientos de transparencia utilizados por China para la 
publicación de sus reglamentos técnicos? ¿P osee la SAC una web consolidada para la 
publicación de estos reglamentos?   WT/TPR/M/230/Add.1 
Page 392  
 
  Transparency:  What transparency procedures are used by China for the publication of its 
technical regulations?  Does the SAC have a co nsolidated website for the publication of such 
regulations? 
Answer 
Technical regulations of China are all publicly availa ble at the gazette and also the official website of 
the Standardization Administration of China, i. e http://www.sac.gov.cn, which is the consolidated 
website for the publication of such regulations . They are also available through the WTO/TBT 
Enquiry Center of China. 
Transparencia: ¿Cuál es el periodo que China otorga a los miembros de la OMC para 
comentarios sobre sus proyectos de reglamentos t écnicos o procedimientos de evaluación de la 
conformidad? ¿Cuál es el periodo promedio que China posee entre la publicación de un 
reglamento técnico y su entrada en vigor?  Transparency:  What is the period granted by China to WTO Members for comments on its 
draft technical regulations or conformity assessment  procedures?  What is the average length of 
time between publication of a technical reg ulation and its entry into force in China? 
Answer 
On the period granted by China to WTO Members for comments on the draft technical regulations or 
conformity assessment procedures, currently the practi ce in China is to follow the requirements of the 
TBT Agreement. 
Transparencia: ¿Posee China un mecanismo para la publicación de respuestas a los 
comentarios recibidos de los miembros de la OM C a los proyectos de reglamentos técnicos o 
procedimientos de evaluaci ón de la conformidad? 
 Transparency:  Does China have a mechanism for publishing replies to the comments received 
from WTO Members on draft technical regulat ions or conformity assessment procedures? 
Answer 
Responses of China to the comments from WTO Members on draft technical regulations or 
conformity assessment procedures are all available through the WTO/TBT Enquiry Center of China. 
Transparencia: ¿Qué porcentaje de estos reglament os técnicos y procedimientos de evaluación 
de la conformidad son traducidos y public ados en un idioma oficial de la OMC? 
 
Transparency:  What percentage of these tec hnical regulations and conformity assessment 
procedures are translated and published in an official WTO language? 
Answer 
All the technical regulations or conformity  assessment procedures notified to the WTO are 
summarized in a WTO working language. WTO members may also consult the TBT Enquiry Center 
of China to see whether a specific technical regul ation or conformity assessment procedure has a 
translated version in a WTO working language.   WT/TPR/M/230/Add.1 
 Page 393 
 
 
  Evaluación de la conformidad ¿Cuál es el enfoque  usado por China para la supervisión de que 
los resultados de evaluación de la conformidad estén de acuerdo a reglamentos técnicos? ¿Esta 
supervisión se realiza en aduanas o mercado interno?  Conformity assessment:  What supervisory approach  is used by China to ensure that the results 
of conformity assessments comply with technical regulations?  Is such supervision conducted at 
customs or in the domestic market? 
Answer 
China has a comprehensive framework on administra tion and supervision of institutes engaged in 
conformity assessment, which ensures that the r esults of conformity assessments comply with 
technical regulations. Such domestic framewor k has nothing to do with the Customs. 
viii) Contratación pública 
viii) Government procurement 
¿Existe un portal centralizado o portales electróni cos por regiones con respecto a la publicación 
sobre la información pertinente en materia de co ntratación pública (legislación, convocatorias, 
bases, resultados de las adjudicaciones, etc.)? ¿Las publicaciones están disponibles en idioma 
inglés?  Is there a centralized portal or are there websites  for each region for the publication of relevant 
information in the area of government procurem ent (legislation, calls for tenders, conditions, 
results of contract awards, etc.)?  Are the publications available in English? 
Answer 
The government procurement website of the Centra l Government makes centralized announcement of 
related information, see http://www.ccgp.gov.cn. 
¿Se pueden realizar transacciones/licitac iones en línea/electrónicamente?  
Can transactions/bids be made online/electronically? 
Answer 
The website announces information concerning bid inv itations and results. It does not provide such 
function as online or electronic transactions or bids.  
IV. P
OLÍTICAS COMERCIALES , POR SECTORES  
IV. T RADE POLICIES BY SECTOR  
4) S ERVICIOS  
4) S ERVICES  
ii) Servicios financieros / a) Sistema bancario ii) Financial services / a) Banking 
En el párrafo 59 se señala que "(…) el PBC y ot ras autoridades administrativas alientan a los 
bancos comerciales a que adapten sus créditos a p restatarios específicos conforme a las políticas 
gubernamentales pertinentes". El Perú desea  conocer ejemplos específicos sobre políticas 
gubernamentales pertinentes en este sector , y sobre qué prestatarios se benefician. 
 According to paragraph 59, "( … ) the PBC a nd other administrative authorities encourage 
commercial banks to adapt their lending to sp ecific borrowers in light of relevant government WT/TPR/M/230/Add.1 
Page 394  
 
  policies".  Peru would like to have specific examples of relevant government policies in this 
sector, and on the borrowers that benefit from this. 
Answer 
Commercial banks in China at present grant loans based on market conditions, and will 
comprehensively consider such factors as cost, earnings, assets quality etc. The influence of industry 
policy is that it is one of the information for refe rence, and there are no speci al loans specifically for 
certain industries. 
iii) Telecomunicaciones / c) Marco normativo y políticas 
iii) Telecommunications/ c) Regu latory structure and policies 
En el párrafo 51 se señala: "Según los datos facili tados por las autoridades, el promedio de las 
"tarifas globales de telecomunicaciones" se redujo en el 11,5 por ciento interanual en el 2008. 
Básicamente hay tres tipos de tarifas: las fijadas por el Gobierno, las orientadas por el Gobierno 
y las ajustadas en función del mercado". El P erú desea conocer los mecanismos que utiliza el 
Gobierno para orientar las tarifas en el sector telecomunicaciones. 
 
According to paragraph 96, "[d]ata provided by the authorities indicate that the average of 
'comprehensive telecom tariffs' dropped by 11. 5 per cent year on year in 2008.  There are 
mainly three types of tariffs:  government set, go vernment guided, and market adjusted."  Peru 
would like to know what mechanisms the G overnment uses to guide tariffs in the 
telecommunications sector. 
Answer With the development of China's teleco mmunications reform, the administration on 
telecommunication tariffs has been greatly loo sened. The previous situation of dominance of 
government pricing and government guidance prices in  the sector has changed to a new situation 
where market prices work together with government  guidance prices, and the latter usually conern 
only the upper limit of the prices, and apply only  in a few basic telecommunications services cases 
where either the market competition is still insuffici ent or the services are closely related to the public 
interests of end users. Apart from that, the criteria and structure of the tariffs are established by the 
operators themselves according to market conditions. 
En el párrafo 96 se señala: "El Reglamento sobre Telecomunicaciones establece que, cuando 
haya "suficiente competencia", los precios de los servicios de telecomunicaciones se 
determinarán en función del mercado". El Pe rú desea conocer qué criterios se utilizan para 
determinar si existe "suficiente competencia". 
 Paragraph 96 further states that:  "The Regulations on Telecommunication stipulate that, where there is 'adequate competition', prices of  telecom services must be determined by the 
market."  What criteria are used to determ ine whether there is "adequate competition"? 
Answer 
Regulations on Telecommunications stipulates that tariffs for telecommunications services having 
adequate market competition shall be subject to  market forces. At present, telecommunication 
services subject to market prices are regarded as those having adequate competition. They cover 
34 specific items of 9 categories, including for example IP telephone services, long-distance charges 
for mobile phones etc.  WT/TPR/M/230/Add.1 
 Page 395 
 
 
  iv) Servicios de transporte / a) Servicios de transporte marítimo 
iv) Transport services/ a) Maritime transport services 
En el párrafo 116 se señala: "El transporte ma rítimo y el remolque entre puertos nacionales 
(cabotaje) deben ser realizados por buques con pabe llón nacional, […]". Además, en la nota 94 
del mismo párrafo se señala: "[…] Por lo genera l, las tripulaciones son chinas; cuando es 
necesario contratar tripulación extranjera se requiere la aprobación del MOT. […]". Al 
respecto, Perú desea conocer qué requisitos se debe cumplir para contar con la autorización del 
MOT para incluir tripulación extranjera, y si exis te un límite de la misma respecto del total de 
la tripulación.  
According to paragraph 116, "[s]hipping and towi ng between domestic ports (cabotage) must be 
undertaken by ships flying the national flag, [ … ]".  Footnote 94 to the same paragraph further states that:  "[ … ] its crews are usually Chinese citizens;  when it is necessary to recruit foreign crew, approval from the MOC is required.  […]"  What are the requirements for obtaining authorization from the MOC to include foreign crew?  Is there a limit on the number of foreign 
crew in proportion to the total crew? 
Answer 
According to Article 19  of the Regulations on S eafarers, foreign crew members working on Chinese 
ships shall obtain employment permits in accordance with laws, administrative regulations and other 
relevant rules of the State, and shall hold a ppropriate professional certificates prescribed by the 
administrative department of transportation under the State Council and shall hold relevant identity 
documents issued by the governments of their own countries. 
En el párrafo 125 se señala: "China ha suscrito acuerdos bilaterales sobre transporte marítimo 
con 60 países o economías.  Las autoridades han i ndicado que la divulgación del contenido de 
algunos acuerdos, incluida la lista comple ta de los 60 países o economías requiere el 
consentimiento de las partes en esos acuerdos".  El Perú desea conocer en qué medida, considera 
China, que la divulgación de los acuerdos so bre transporte marítimo es consistente con el 
Artículo III (Transparencia) del AGCS.  According to paragraph 125, "China has conclu ded bilateral maritime transport agreements 
with 60 countries/economies.  The authorities i ndicate that disclosure of the content of some 
agreements, including the list of all the 60 count ries/economies requires the consent of both 
parties involved."  To what extent does China consider that disclosure of maritime transport 
agreements is consistent with Arti cle III (Transparency) of the GATS? 
Answer 
MFN exemption list only requires such elements as  description of services exempted. Although there 
are transparency obligations from Article III, Article  III bis also states that nothing in this Agreement 
shall require any Member to provide confidential in formation, the disclosure of which would impede 
law enforcement, or otherwise be contrary to the public interest, or which would prejudice legitimate 
commercial interests of particular enterprises, public or private. 
En el párrafo 125 también se señala: "China y el Taipei Chino acordaron abrir algunos de sus 
puertos para permitir el tráfico marítimo directo entre ellos;  hasta la fecha, China ha abierto 
68 puertos, y el Taipei Chino, 13". El Perú desea conocer si es que el tráfico entre China y el 
Taipei Chino es de carga, de pasajeros o de ambos. 
 WT/TPR/M/230/Add.1 
Page 396  
 
  Paragraph 125 further states that "China and Chin ese Taipei agreed to open some of their ports 
to allow direct maritime traffic between them;  to date, China has opened 68 ports and Chinese 
Taipei has opened 13."  Does the traffic between  China and Chinese Taipei consist of cargo, 
passengers or both? 
Answer The traffic has both. According to the Cross-Strait Shipping Agreement, vessels registered on both  
sides, upon permission, can engage in direct cross-strait passenger and cargo transport. 
PERU – Part 2
 
1. In the section of the Chapter entitled "Tra de Policies by Sector" that discusses China's 
policy instruments for the agriculture sector, and specifically under the heading "Internal 
measures", paragraph 23 ( punto  85) states that China has made no notifications to the WTO 
Agriculture Committee regarding the support given to the agriculture sector during the period 
under Review;  some agricultural support programmes were included in China's latest notification 
(in 2006) to the Committee on Subsidies and Countervailing Measures .   
Since China has not notified the amounts of do mestic support provided since 2006, it would be 
useful, in the interests of greater transparency , if China would notify to the Committee on 
Agriculture the detailed levels of domestic support given to its agriculture sector, classified by support type (green box, amber box
) and by type of activity or agricultural product for which 
the support is intended.   
Answer 
China has recently submitted to the WTO the ag ricultural domestic support notification for 2002-
2004.  
Regarding the notifications for years after 2005, as Ch ina's current statistic standard is different from 
the standard required by the WTO in the notificatio n and also China reformed its budgetary subjects 
which now are quite different from the previous s ubjects, China needs more time to do the conversion 
of statistic standards and prepare the notifications. 
2. In the Chapter entitled "Trade Policies a nd Practices by Measure", under the heading 
"Measures Directly Affecting Imports" is a sect ion entitled "Rules of origin", in which 
paragraphs 14 and 15 ( puntos  13 y 14) address the question of non-preferential or preferential 
origin of goods.  
On the subject of rules of origin, Peru kindly asks China to answer the following questions:   
- Who issues certificates of origin, which is a useful item of information for 
logistics operators, exporters and importers?   
Answer State Administration for Quality Supervision, Insp ection and Quarantine (AQSIQ) is responsible for 
administration of issuance of certificates of orig in. The local entry-exit inspection and quarantine 
authorities under AQSIQ issue both preferential and non preferential certificates of origin. China 
Council for the Promotion of International Trad e and its local commissions issue non-preferential 
certificates of origin.  WT/TPR/M/230/Add.1 
 Page 397 
 
 
  - How is verification of origin performed in China?   
Answer 
The Chinese Customs verify the origin of goods in accordance with procedures provided for in 
relevant free trade agreements, preferential trade a rrangements and applicable mutual administrative 
assistance agreements between Ch inese Customs and the customs of other countries and regions. 
- Does China plan to introduce electronic certification?   
Answer 
China at this stage has no plan to introduce electronic certification.  
3. Also in the Chapter entitled "Trade Policies and Practices by Measure", under the 
heading "Measures Directly Affecting Imports" is a section relating to "standards and other 
technical requirements", which encompasses "cer tification and accreditation".  Paragraph 56 
states as follows:  The Certification and Accreditation Administration of China (CNCA) under 
AQSIQ administers China's compulsory product cer tification system and the China Compulsory 
Certification (CCC) mark.  The Catalogue of Prod ucts Subject to Compulsory Certification, which 
is revised whenever necessary, lists products requiring the CCC mark, without which these 
products cannot be marketed in or imported into China.  In 2009, the Catalogue contained 23 groups, and 172 subcategories of products, covering, inter alia , electrical wires and tools, 
household electrical appliances, motor vehicle s, safety parts and accessories, and toys . 
It is not clear to Peru whether China's Ca talogue of Products Subject to Compulsory 
Certification has been notified to the WTO.  We kindly request China to clarify this point.   
Answer 
China has notified the Catalogue of Products Subj ect to Compulsory Certification to the WTO. 
MEXICO – Part 1
 
1. ¿Cómo identifica el gobierno chino a los sectores productivos con mayor potencial de 
desarrollo y de aporte al crecimi ento económico de su nación? 
How does the Chinese Government identify produc tive sectors with the greatest potential for 
development and contribution to China's economic growth? 
Answer 
China identifies industries which have development potential and are of great importance for national 
economic growth in each five-year development plan. 
2. ¿Qué políticas públicas, come rciales y de otra índole, se implementan para asegurar y 
afianzar el desarrollo de los sectores? 
What public, trade and other policies are being implemented to ensure and strengthen sectoral 
development? WT/TPR/M/230/Add.1 
Page 398  
 
  Answer 
Over the last few years, China in troduced a series of policies to cu rb overgrowth in industries with 
high energy consumption and promote energy e fficiency and emissions reduction, thereby 
intensifying the efforts for industrial restructuring and upgrading. 
First, the threshold for entry into high energy -consuming industries was raised. Guidelines that 
prescribe entry criteria for the coke, aluminium, fibre glass and chlor-alkali (sodium hydroxide and 
PVC) industries etc were drafted and promulgated to enforce entry requirements more favourable to 
energy efficiency improvement, environmental pr otection, technology advancement and integrated 
utilization of resources, and to regulate these industries by curbing the duplication and blind 
expansion of low-efficiency projects.  
Second, the overgrowth of exports by high ener gy-consuming industries was checked. In June 2007, 
export duties were levied or increased on energy-c onsuming, high-pollution and resource depleting 
products including steel billets, coke and natural gr aphite. The rebate of VAT on export of some of 
these products was discontinued. 
Third, a call was made to implement higher energy  efficiency and lower emissions among industrial 
manufacturers. On 3 June 2007, the State Council issued a Work Program on Energy Conservation 
and Emissions Reduction, which set forth the obj ectives and requirements for energy conservation 
and emissions reduction by 2010.  Take the auto indu stry as an example, the policy in the form of the 
Provisions on the Entry of New Energy Car Manufact urers requires safer and more energy-efficient 
and environmentally-friendly production. 
Fourth, the reorganization of existing industri es was accelerated. The implementation of the 
Antimonopoly Law has expedited the reform of industries with monopolistic characteristics and 
created a more competitive market. The reform on prici ng of oil, natural gas, electricity and coal is 
progressing steadily to further improve the market economy system. 
Informe de la Secretaría de la OMC
 
RESUMEN  
En el párrafo 4  se indica que en respuesta a los efect os de la recesión económica mundial, el 
Gobierno de China ha introducido políticas fiscales y monetarias expansionistas para compensar el 
acusado descenso de la demanda externa, y ha dado prioridad a la demanda interna para impulsar el 
crecimiento del PIB. 
Paragraph 4  states that the Chinese Government responded to the effects of the global economic 
recession by introducing expansionary fiscal and mone tary policies to offset the sharp decline in 
external demand, putting more emphasis on domestic demand to drive GDP growth. 
3. México quisiera saber: ¿Cómo prevé el gobierno de China continuar con su política de 
impulsar su mercado interno para ser menos depe ndiente al comercio exterior una vez que se 
termine este paquete de estímulo a la economía? 
Mexico would like to know how the Chinese Gove rnment plans to pursue its domestic-market 
oriented policy so as to become less dependent  on foreign trade once the economic stimulus 
package has come to an end.  WT/TPR/M/230/Add.1 
 Page 399 
 
 
  Answer 
In 2010 China will continue to promote the expansi on of consumption demand of  residents, including 
to: 
 1. continue to increase the income of farm ers, the basic pension of enterprise retirees 
and the minimum subsistence level of urban and rural residents, thus to enhance the 
consumption power of residents, especially  those with medium and low incomes; 
 2. consolidate and expand traditional cons umption, and cultivate into new and hot 
consumption areas such as information, tour ism, culture, fitness, training, caring of 
the aged people, housekeeping services, and promote the optimization and upgrading of consumption structure; 
 3. expand consumption credit; 
 4. push forward improvement of comme rcial and logistic facilities and other 
infrastructure both in countryside and in urban residential communities, and promote the development of e-commerce; 
 5. strength the regulation of market order and make efforts to build a convenient, safe 
and secure environment for consumption; 
 6. continue to implement and improve polic ies and measures to stimulate consumption, 
for example, to increase ceiling prices, varieties and types of home appliances, 
expand the scope of benef iting population and improve subsidy criteria and rules 
under the consumption stimulus program to subsidize rural residents for purchase of 
home appliances, to strengthen supervis ion and examination on enterprises winning 
the bids in the implementation of these consumption stimulus programs; to improve 
policies concerning the trade-in of old home appliances and motor vehicles and also those to encourage rural resi dents to purchase motor vehicles and motorbikes, and to 
continue the implementation of the purchase tax reduction policy for low-emission vehicles with the reduced tax rate of 7.5%. 
C
APÍTULO I. E NTORNO ECONÓMICO  
CHAPTER I.  ECONOMIC ENVIRONMENT  
3) P OLÍTICAS ESTRUCTURALES  
3) S TRUCTURAL POLICIES  
De acuerdo con el párrafo 26  se indica que desde el punto de vi sta del presente Examen, se destacan 
tres elementos del estado actual de desarrollo y re forma de la economía de China.  Uno es su 
cuantioso y persistente superávit de ahorro inte rno frente a la inversión interna, que tiene su 
contrapartida internacional en el superávit por cuen ta corriente de China en su balanza de pagos. 
According to paragraph 26 , from the point of view of this Review three features of China's current 
stage of economic development and re form stand out.  One is China's large and persistent surplus of 
domestic savings over domestic invest ment, which has as its international counterpart China's current 
account surplus in its balance of payments. 
4. ¿A través de qué mecanismos prevé el gobiern o chino en el futuro canalizar el superávit 
en el ahorro interno hacia inversión interna? WT/TPR/M/230/Add.1 
Page 400  
 
  What mechanisms does the Chinese Government pr opose to use in the future to channel the 
surplus in domestic savings over domestic investment?  
Answer 
China will take various measures to guide and en courage the domestic savings to transfer into 
domestic investments. Such measures include for example to proactively and steadily promote the 
development of domestic financial ma rket and the reform of investment and financing systems. Please 
refer to the Government Report of China prepar ed for this review for more information.  
En el mismo párrafo  se indica que el tercer elemento es la capacidad excesiva de varias industrias 
básicas de China, en particular si se tiene en cu enta la actual reducción de la demanda mundial de la 
producción de esas industrias. Más adelante en el párrafo 32  se indica, en el mismo sentido, que la 
brusca reducción de la demanda externa en 2009 puso de  manifiesto el exceso de capacidad de varias 
industrias básicas de manufacturas pesadas de China,  tales como las del acero, el aluminio y el 
cemento.  
Paragraph 26  further indicates that the third feature is  overcapacity in several of China's core 
industries, particularly in the face of current reduced global demand for the output of those industries.  
A little further down, paragraph 32  states in this connection that the abrupt reduction in external 
demand in 2009 highlighted the overcapacity of a number of China's core heavy manufacturing industries, such as steel, aluminium, and cement. 
5. ¿Cuáles son las mayores dificultades que enfr enta el gobierno de China para reducir la 
sobreproducción en sectores básico s con sobrecapacidad instalada, tales como el acero, aluminio 
y cemento? 
What are the greatest difficulties facing the Chinese Government in reducing overcapacity in 
core sectors with an excess of installed capacity such as the steel, aluminium, and cement industries? 
Answer 
The major difficulty is that in consideration of social and economic stability, the elimination of out-
dated production capacity of certain industries may ta ke a relatively long transitional period. In the 
background of the international financial crisis, it is  unavoidable to witness some capacity surplus at a 
certain stage. However, Chinese government will stick to the policy guideline of sustainable 
development. Therefore, in the long term, China is  confident and capable to  resolve the problem of 
capacity surplus in these industries th rough relatively stable transition.  
De acuerdo con el párrafo 31,  el Gobierno está tomando medidas para diversificar la economía 
mediante la promoción del desarrollo agrícola y la potenciación de la función del sector de los 
servicios como generador de crecimiento y empleo y la expansión de los sectores de servicios a los 
consumidores a gran escala. Se indica que en ma rzo de 2007, el Consej o de Estado publicó un 
documento en el que recomienda, entre otras cos as, un incremento de tres puntos porcentuales en la 
participación de los servicios en el PIB entre 2005  y 2010, con miras a alcanzar el 50 por ciento 
para 2020. 
According to paragraph 31,  the Government is taking steps to diversify the economy by promoting 
the development of agriculture and increasing the ro le of the services sector in generating growth and 
employment and developing large-scale consumer-servi ces industries.  It is also mentioned that in 
March 2007 the State Council issued a document calli ng, inter alia, for a three percentage point  WT/TPR/M/230/Add.1 
 Page 401 
 
 
  increase in the share of services in GDP betwee n 2005 and 2010, with a view to reaching 50% 
by 2020. 
6. ¿Cuál será la estrategia a seguir por el  gobierno chino para alcanzar esta meta?  
What will be the Chinese Government's strategy to achieve this goal? 
Answer As a developing country, China has been constantly  promoting the reform and opening up in the 
services sector, although the service s industry in China is still in th e early stage of development. 
China will further raise the devel opment level of the services sector  and its proportion in the national 
economy. In this respect, China will continue to cons ummate its policies for market access of services 
sectors, speed up the establishment of an open, fair , and standardized system for services suppliers 
and encourage the participation of private investment including foreign investment.  
The State Council issued Certain Opinions on A ccelerating the Development of Services Sector 
in 2007 and Certain Opinions on Further Improving the Use of Foreign Capital early this year. The Catalogue for the Guidance of Industries for Forei gn Investment will be revised for the fifth times, 
and Catalogue of Advantaged Industries for Foreig n Investment in Mid-West China will also be 
amended in the near future. These latest developm ent will certainly result in further market access 
opportunities for foreign services suppliers in China.  
7. ¿Cuáles serían lo  sectores de servicios pr ioritarios a desarrollar hacia el futuro? 
Which services sectors would be developed as  a matter of priority for the future? 
Answer 
China is going to expand the breadth and depth of opening up in the services sector, to encourage 
foreign capital to invest in energy conservati on and environmental protection services, modern 
services sectors such as industrial designing, outsourcing, logistics etc, and Chinese and foreign companies are also encouraged to  strengthen R&D cooperation. To build sound foreign investment 
environment, China will continue to improve the administration and to streamline the licensing procedures.  
8. ¿Cuál es el papel que desempeñará  hacia el futuro el mercado de capitales?, ¿Qué 
prioridad le otorga el gobierno de China a su liberalización y desregulación respecto a otros sectores de servicios? 
What will be the role of the capital market in  the future?  What priority does the Chinese 
Government give to its liberalization and dereg ulation in relation to other services sectors? 
Answer China is committed to building a multi-level capital market system which will consist of the main 
board, start-up board, agency share transfer system , bond market and futures market, with the aim to 
better serving the development of the national economy. 
China has fully implemented its market access commi tments in the financial services sector. As 
regard to the further liberalization of services sect ors, China is willing to discuss with other WTO 
members in the market access ne gotiations under the Doha Round. WT/TPR/M/230/Add.1 
Page 402  
 
  El párrafo 33  señala que la función de esas empresas se ha reforzado, aunque haya sido 
involuntariamente y sólo de modo temporal, a causa  de las recientes medidas de incentivación fiscal y 
financiera, que se han canalizado hacia las inversi ones públicas en infraestructuras y han dado lugar a 
una mayor demanda de productos de manuf acturas con gran intensidad de capital 
Paragraph 33  states that the role of State-owned enterp rises has been strengthened, if inadvertently 
and only temporarily, by the recent fiscal and fina ncial stimulus measures that have targeted public 
investment in infrastructure and generated in creased demand for capital-intensive manufactured 
products. 
9.  ¿Cuál es la estrategia a futuro del gobierno chino para hacer frente a esta 
problemática? 
What strategy does the Chinese Government h ave in mind for addressing this issue?  
Answer 
To counter the effects of the global financial cr isis, the Chinese government launched a series of 
stimulus measures including the two year 4-trillio n RMB investment plan, which goes mainly to 
housing projects for low-income population, projects to improve the well-being of rural residents and 
rural infrastructure, major infrastructure constr uction, energy conservation and emission-reduction 
and ecological improvement, as well as post-earthquake recovery and reconstruc tion etc. None of the 
investment translates into new large-scale production capacities. Th e purpose is to expand domestic 
demand through consolidation of the foundation for long-term economic development so that the 
economic downturn could be arrested and a steady growth be maintained.  
In terms of the orientation of the measures, the Ch inese government has no intention to have SOEs to 
benefit disproportionately. In fact, non state-owned en terprises also benefit a lo t from these measures. 
For example, non state-owned enterprises have direc tly or indirectly involved in and benefited from 
various stimulus projects like the program to suppor t rural residents to purchase home appliances, the 
program to trade-in old appliances and vehicles and also the infrastructure construction projects.  
The Chinese government has always been clear a nd consistent on its po licy to encourage the 
development of non-public sector including private and foreign-invested enterprises. Recently, the 
State Council issued another two policy documents, namely Certain Opinions of the State Council on 
Encouraging and Guiding the Healthy Development of Private Investment  and Certain Opinions of 
the State Council on Further Improving the Work of Using Foreign Investment . Additional measures 
promoting development of the non-public sector are designed primarily to create a market environment for fair competition of economic sect ors of various ownerships. Such measures will 
focus on offering equal policy treatment in biddings  and government procurem ent, safeguarding the 
fair participation of non-public enterprises in the market. Regulations and ru les concerning financing, 
foreign exchange administration, land use, public  services and etc will be reviewed and updated to 
enable non-public enterprises to ha ve access to various resources necessary for their development on 
an equal footing.  
C
APITULO II.  RÉGIMEN DE POLÍTICA COMERCIAL : MARCO Y OBJETIVOS  
CHAPTER II.  TRADE POLICY REGIME :  FRAMEWORK AND OBJECTIVES  
1) I NTRODUCCIÓN  
1) I NTRODUCTION  
En el párrafo 6  se indica que desde 2008 todos los incentivos  fiscales se aplican por igual a las 
empresas nacionales y las empresas con inversión extranjera, salvo en lo que se refiere a cierto trato  WT/TPR/M/230/Add.1 
 Page 403 
 
 
  preferencial subsistente otorgado a estas últimas debi do al principio de anterioridad, de conformidad 
con la Ley del impuesto sobre la renta de las sociedades, y la exención del impuesto de 
mantenimiento urbano y el impuesto de construcción de que gozan esas empresas. 
Paragraph 6  states that since 2008 all tax incentives apply equally to domestic firms and 
foreign-invested enterprises (FIEs), except for so me remaining preferential treatment accorded to 
FIEs due to "grandfathering", under the Enterprise Income Tax Law, and the exemption of FIEs from 
city maintenance tax and construction tax. 
10. México quisiera saber si este cambio en los incentivos fiscales a las empresas con 
inversión extranjera ha tenido algún efecto en la  recepción de IED a China y, de ser el caso, en 
qué montos o sectores. 
Mexico wishes to know whether this change reg arding tax incentives for FIEs has had any 
impact on inward FDI, and, if so, in what amounts or sectors.  
Answer 
Unification of the tax systems for domestic and foreig n enterprises, i.e., applying a uniform tax law to 
enterprises of different nature and types to achie ve an equal treatment in tax on various economic 
entities provides a tax environment favorable for fa ir competition of various types of enterprises, 
which will be conducive to the inflow of the foreign investment.  
En el párrafo 9  se indica que desde el anterior examen de  sus políticas comerciales en 2008, China ha 
continuado adoptando medidas para mejorar la tr ansparencia.  No obstante, algunos aspectos del 
régimen de la política comercial de China siguen siendo complejos y opacos.   Por ejemplo, China 
ocupó el lugar 38º en una lista de 48 países en el Índice de Opacidad de 2009, que mide el grado en 
que los países carecen de prácticas claras, precisas, fácilmente discernibles y ampliamente aceptadas 
en las relaciones entre los gobiernos, las empresas y los inversores. 
According to paragraph 9 , since the previous review of its tr ade policy in 2008 China has continued 
to take steps to improve transparency.  Nonethel ess, some aspects of China's trade policy regime 
remain complex and opaque.  For example, China ranked 38th among 48 countries in the 2009 Opacity 
Index, which measures the degree to which countri es lack clear, accurate, easily discernible, and 
widely accepted practices governing the relationshi ps among governments, businesses, and investors. 
11. En este sentido México quisiera saber si  el gobierno chino tiene contemplado una 
estrategia de reducir la opacidad con metas y tiempos concretos como ha ocurrido con los 
planes quinquenales de metas de cre cimiento económico y metas de crecimiento en el comercio, 
desde que iniciaron las reformas económicas en  China hacia finales de los años setenta.  
Mexico would like to know whether the Chine se Government is considering a strategy to 
remedy such opacity, with concrete objectives and timeframes as was the case with the five-year 
economic and trade growth plans since China be gan its economic reforms in the late 1970s. 
Answers 
The Chinese government has attached high attentio n to improving transparency of the government 
work. Some of the efforts made are summarized as follows:  
 1. Honoring accession commitments regarding transparency. After China's accession to 
WTO, the Chinese government designated "China Foreign Trade and Economic Cooperation Gazette" as the official publicati on to publish laws, re gulations and other WT/TPR/M/230/Add.1 
Page 404  
 
  measures relating to or affecting goods trade, service trade, intellectual property 
rights in connection with trade as well as foreign exchange administration. Up to 
May 2010, a total of 586 volumes have been issued, and thousands of laws, 
regulations, rules and other measures have been released in the Gazette. The Gazette is available at the website of the Ministry of Commerce http://www.mofcom.gov.cn. 
Besides, the laws, regulations and rules formulated by the Chinese government are 
also available at least at the fo llowing websites of http://www.gov.cn and 
http://www.chinalaw.gov.cn.  
 2. Continuously improving the transparency  of legislative process and expanding public 
participation. The Law on Legislation implemented as of 2000 has made publicity 
and transparency a fundamental principle required to be observed during government 
legislation process. Solicitation of public opinions has become a universal practice for drafting laws and regulations. The Legisla tive Affairs Office of the State Council has 
opened up a special system for comments so licitation on draft regulations and rules at 
its website http://www.chinalaw.gov.cn. Offi cial websites of many ministries and 
commissions also have special columns for public opinions soliciting. In April 2008, 
the Standing Committee of the National People's Congress made a decision that draft laws that it would review in future woul d expand their publicity scope and would all 
be made public to the whole society in ge neral circumstances for public opinions and 
comments.  
 3. Continuously optimizing the legal system  for disclosure of government information 
to make government affairs more transparen t. According to the requirements of the 
central government in connection with the transparency of government affairs, all levels of governments and their departments are making use of various means such as 
government bulletins, guidelines booklets, public  hearings, press briefings and expert 
consultations etc to advance the transp arency of government affairs. Most 
governments at all levels and their depart ments have established their own websites. 
The portal website of the Central Government  was also formally put into operation on 
1 January 2006. On 1 May 2008, Regulati ons on Government Information Release 
came into effect, which would further enha nce the transparency of government work.  
4) O
BJETIVOS DE LA POLÍTICA COMERCIAL  
4) T RADE POLICY OBJECTIVES  
En el párrafo 19  se indica que simultáneamente, China ha continuado intensificando sus iniciativas 
para establecer arreglos bilaterales y regionales que  conllevan acuerdos de libre comercio (sección 5) 
ii) infra)., no obstante, su comercio con los in terlocutores comerciales con los que ha concluido 
acuerdos bilaterales o regionales de libre comerc io sigue representando una pequeña proporción de su 
comercio total; las importaciones procedentes de esos interlocutores comerciales representaron en 
2009 el 24,7 por ciento de las importaciones totales de  China, frente al 26,4 por ciento en 2006, y las 
exportaciones destinadas a ellos representaron el 31 ,3 por ciento de sus exportaciones, porcentaje 
ligeramente superior al de 2006 (31,1 por ciento). 
Paragraph 19 states that, at the same time, China has continued to intensify its pursuit of 
bilateral/regional arrangements involving free-trade ag reements (section (5)(ii) below).  Nonetheless, 
the share of trade involving the trading partners w ith which it has adopted bilateral/regional free trade 
agreements still accounts for a minor share of its to tal trade;  imports with these trading partners 
accounted for 24.7 per cent of China's overall imports in 2009, down from 26.4 per cent in 2006, and exports to these partners accounted for 31.3 per cent of its exports,  up slightly from 31.1 per cent 
in 2006.   WT/TPR/M/230/Add.1 
 Page 405 
 
 
  12. En este sentido México quisiera saber, ¿Cuál es la estrategia futura del gobierno de 
China en la integración comercial a través de ac uerdos de libre comercio?  En específico, sobre 
el acuerdo entre ¿China, Japón y Corea?  
What is the Chinese Government's future stra tegy for trade integration through free trade 
agreements, and specifically the agreemen t between China, Japan and Korea? 
Answer 
Firstly, China believes that some data described in this paragraph of the Secretariat's Report is 
incorrect. According to statistics of Chinese Customs, China's tota l imports from all members with 
which bilateral/regional free trade agreements were signed and entered into force, namely Hong Kong 
China, Macao China, Pakistan and ASEAN, were  USD 101.57 billion in 2006, which accounted for 
12.8% of the total imports of that year. In 200 9, the total imports from all members with which 
bilateral/regional free trade agreements were signed and entered into force, namely Hong Kong China, 
Macao China, Pakistan, ASEAN, Chile, New Zeal and and Singapore, we re USD 150.08 billion, 
which was 14.9% of the total imports of the year. 
China takes RTAs as a means to further promote international trade liberalization. While actively 
promoting the Doha Round negotiations, China is also steadily moving forward negotiations on free 
trade agreements and other regional trade arrangements. 
Regarding free trade agreement between China,  Japan and South Korea, the academia-industry-
government joint research on the China-Japan-South Korea Free Trade Area was officially launched 
on 6 May 2010 in Seoul, South Korea. The three parties have agreed to strive for completion of the research before the Summit Meeting of China, Jap an and South Korea in 2012. The Free Trade Area 
will help to further strengthen economic and trade ties among the three countries and promote the 
economic cooperation process in Northeast Asia. 
5) A
CUERDOS Y ARREGLOS COMERCIALES  
5) T RADE AGREEMENTS AND ARRANGEMENTS   
iii) Acuerdos bilaterales 
iii) Bilateral arrangements 
f) Acuerdo de Libre Comercio China – Perú f) China-Peru FTA 
El párrafo 35 , señala que en el marco del Acuerdo de Libre Comercio entre China y Perú "se 
eliminarán los aranceles aplicados a las importacione s de cada una de las partes con respecto al 90 por 
ciento de las líneas arancelarias".  
Paragraph 35  states that the China-Peru Free Trade Ag reement will "eliminate tariffs on 90 per cent 
(in terms of tariff lines) of each other's imports". 
13. México desea conocer el plazo acordado para alcanzar dicho grado de eliminación 
arancelaria. 
What timeframe has been agreed in order to achieve this level of tariff elimination? 
Answer 
With the implementation of the Agreement, China and Peru will eliminate tariffs on respectively 
94.6% and 92% of the products imported from the ot her party. China will reduce tariffs on 93.8% of 
the products imported from Peru to 0 within 10 year s and will reduce tariffs on 0.8% of the products WT/TPR/M/230/Add.1 
Page 406  
 
  imported from Peru to 0 within 12, 15, 16 and 17 y ears respectively. Peru will reduce tariffs on 90% 
of the products imported from China to 0 within 10  years and will reduce tariffs on 2% of the products 
imported from China to 0 within 12, 15, 16 and 17 years respectively. 
6) R
ÉGIMEN DE INVERSIÓN EXTRANJERA  
6) F OREIGN INVESTMENT REGIME  
En el párrafo 46  se indica que China también fomenta la salida de IED en esferas como la 
investigación y el desarrollo, la producción y comercia lización, y la energía.  Según las autoridades, 
se promueve la salida de IED para aumentar la  amplitud y profundidad de la apertura al mundo 
exterior, intensificar la cooperación económica y comercial internacional y lograr un desarrollo 
común, sobre la base del principio fundamental de "beneficios mutuos, beneficios para todos y 
desarrollo común".  Desde el 1º de mayo de 2009, el Ministerio de Comercio ha delegado 
oficialmente en las autoridades comerciales local es de diversas provincias, regiones autónomas y 
municipios que dependen directamente del Gobierno  Central autoridad para examinar y aprobar las 
IED en el extranjero. 
According to  paragraph 46 , China also encourages outward FD I in areas such as research and 
development, production and marketing, and energy.  The authorities maintain that outward FDI is 
encouraged in order to expand the width and depth of opening up to the outside world, promoting 
international economic and trade cooperation, and achieving common development, on the basic 
principle of "mutual benefit, all-win, and common development".  Since 1 May 2009, the Ministry of Commerce has officially delegated the authority of  examination and approval of overseas FDI to the 
local commerce authorities of various provinces, autonomous regions, and municipalities directly 
under the Central Government China. 
14. A este respecto, a México le gustaría saber ¿cuáles son los criterios, sectores y 
consideraciones geográficas que han determinado y determinarán en el mediano y largo plazo 
las inversiones de China en el mundo? 
What are the criteria, sectors and geographical considerations that have determined and will 
determine China's investments worldwide in the medium and long term? 
Answer 
Details of the information required in this ques tion are available at the website of MOFCOM. Please 
refer to http://fec.mofcom.gov.cn.  
C
APÍTULO III .  POLITICAS COMERCIALES POR MEDIDA  
CHAPTER III .  TRADE POLICIES AND PRACTICES BY MEASURE  
2) M EDIDAS QUE AFECTAN A DIRECTAMENTE A LAS IMPORTACIONES  
2) M EASURES DIRECTLY AFFECTING IMPORTS   WT/TPR/M/230/Add.1 
 Page 407 
 
 
  iii) Impuestos indirectos que afectan las importaciones 
iii) Indirect taxes affecting imports 
El párrafo 29, relativo al IVA y los impuestos al consumo sobre las importaciones, señala que, "los 
tipos para las importaciones y las mercancías de producción nacional suelen ser los mismos, si bien los productos agropecuarios básicos vendidos por lo s agricultores directamente a los consumidores 
están exentos del IVA por motivos, entre otros, de simplificación administrativa, mientras que las 
importaciones de productos similares están sujetas al IVA.  Los tipos  actuales del IVA son del 17 o el 
13 por ciento para la mayoría de las mercancías.  Algunas importaciones, como las destinadas a las zonas de elaboración para la e xportación, pueden estar sujetas a reducciones o exenciones del IVA". 
According to paragraph 29 , which concerns VAT and excise ta xes on imports, the rates for imports 
and domestically produced goods are generally the same, although primary agricultural products sold 
by farmers directly to consumers are exempt from VAT on grounds of, inter alia, administrative simplicity, while imports of like products are subject to VAT.  The current VAT rates are 17 per cent or 13 per cent for most goods.  Some imports, such  as those destined for export processing zones, may 
be subject to VAT reductions or exemptions.  
15. ¿Podría China aclarar los motivos (simplificación administrativa y otros), por los cuáles se 
exenta del pago del IVA a los productos agropec uarios básicos vendidos por los agricultores 
directamente a los consumidores? 
Would China please explain the reasons (adm inistrative simplicity, etc.) why primary 
agricultural products sold by farmers directly  to consumers are exempt from VAT?   
Answer Regarding this policy, China has made explanation and clarifications for several times. In summary, 
we have the following points to make. 
First of all, China has a huge number of small farmers across the country, which makes it impossible 
to conduct accounting and tax filing. In other words,  to levy value-added tax upon them is infeasible 
and uneconomical because of the huge administrativ e cost. This is the fundamental reason behind the 
policy.  
Second, in China the agricultural production is ma inly based on household operation. The sales scale 
is very small. The VAT exemption is applied only to farmers who sell their own products like a 
kilogram of potatoes in an open air market. This is  completely different from the import of products in 
bulk. Their VAT policies are not comparable.  
Third, as far as we understand, other members with  a VAT system also seem to exempt VAT from 
farmers who sell their own products, while levy ing tax over imported agricultural products.  
Fourth, even if we apply VAT over these farmers,  we would adopt a policy that would establish a 
commercially-meaningful threshold like in other countries. Most farmers would fall below the 
threshold. The real effect would be the same as the current policy.  
Therefore, China does not believe the current polic y is not in compliance with its WTO obligations . 
16. A qué otras importaciones se hacen reducciones/exenciones del pago del IVA, distintas a 
las destinadas a las zonas de elaboración para la exportación? WT/TPR/M/230/Add.1 
Page 408  
 
  What imports other than those destined for export processing zones enjoy reductions 
on/exemption from payment of VAT? 
17. Cuáles son los criterios y/o requisitos para exentar o reducir el pago del IVA a ciertas 
importaciones, así como el tipo de productos a los que se les otorga este beneficio? 
What are the criteria and/or requirements for exemption from/reductions on VAT on certain 
imports and what types of produc t are covered by the benefit? 
Answer (questions 16 and 17) 
In consideration of the complexity of  the details of the tax policies, Me xico is suggested to refer to the 
2001-2004 subsidy notification (G/S CM/N/123/CHN) submitted by China for information required in 
the two questions. Also, in the past few years, gr eat changes have taken place in many tax incentives 
due to tax system reform in China. China will submit its 2005-2008 subsidy no tification soon. Mexico 
may refer to this notification for the latest information in this regard. 
vii) Normas y otras prescripciones técnicas 
vii) Standards and other technical requirements 
a) Normas y reglamentos técnicos 
a) Standards and technical regulations 
De acuerdo con el párrafo 43  China tiene cuatro tipos de normas:  nacionales, profesionales, locales y 
empresariales.  En las categorías de normas nacionales, profesionales y locales hay normas voluntarias y obligatorias.  En 2007 (último año para el que se disponía de datos), aproximadamente el 14,5 por ciento de las normas nacionales, el 15 por ciento de las normas profesionales  y el 19 por 
ciento de las normas locales eran obligatorias. 
According to paragraph 43 , China has four types of standard:  national, professional, local, and 
enterprise standards.  Within the national, prof essional, and local standards categories, there are 
voluntary and mandatory standards.  In 2007 (the la test year for which data were available), around 
14.5 per cent of national standards, 15 per cent of  professional standards, and 19 per cent of local 
standards were mandatory. 
18. ¿Cuál es la estrategia del gobierno de China para hacer frente a esta problemática de 
contar con un porcentaje de entre 15% y 19% de  obligatoriedad en las normas existentes? 
What is the Chinese Government's strategy for addressing the problem of mandatory standards 
accounting for between 15 and 19 per cent of existing standards? 
Answer 
By the end of 2009, there were altogether 24,94 6 Chinese national standards. Among these standards, 
3,177 were mandatory standards, accounting fo r 12.73%; 21,587 were voluntary standards, 
accounting for 86.53%; 182 were national advisory technical documents, accounting for 0.72%. By 
the end of 2009, 68% of China's national standards in related areas are international or overseas 
advanced standards. Related areas refer to areas  where China's standardization work has its 
counterpart in international standardization work. This includes standards identically adopted (IDT), 
equally adopted (EQV), or adopted with modifi cation (MOD). The Chinese government will further 
improve its national standard system.   WT/TPR/M/230/Add.1 
 Page 409 
 
 
  19. ¿Ha calculado el gobierno de China los efectos económicos de contar con estos 
porcentajes de obligatoriedad en las normas existentes?  
Has the Chinese Government calculated the economi c impact of such percentages of mandatory 
standards among existing standards? 
Answer No such calculations have been done so far.   
b) Medidas sanitarias y fitosanitarias 
b) Sanitary and phytosanitary measures (SPS) 
En el párrafo 52  se menciona que desde julio de 2008, la  AQSIQ ha reformado sus procedimientos 
de inspección de las entradas y salidas mediante la introducción de un sistema de despacho directo, 
destinado a facilitar el comercio antes de la reform a, las empresas importadoras (y exportadoras) eran 
objeto de inspecciones sólo en los puertos.  Tras la  reforma, determinadas mercancías importadas por 
algunas empresas pueden estar sujetas a inspecciones en destino.   Esas importaciones deben proceder 
de zonas libres de enfermedades y ser transportad as en contenedores sellados.  Además, no todas las 
mercancías pueden ser objeto de in spección en su destino;  los productos de una lista de 1.895 líneas 
arancelarias (al nivel de 10 dígitos del SA) elaborada por la AQSIQ, principalmente animales y 
plantas vivos y piensos, deben inspeccionarse en los puertos. 
Paragraph 52  reports that since July 2008, AQSIQ has been reforming its entry-exit inspection 
procedures by introducing a direct release system, w ith a view to facilitating trade.  Prior to the 
reform, importing (and exporting) enterprises were subj ect to inspections only at the ports.  After the 
reform, some enterprises, when importing certain goods , may undergo inspections at the destination.  
These imports must be from disease-free areas and tran sported in sealed containers.  Further, not all 
goods can be inspected at their destination;  pr oducts corresponding to 1,895 tariff lines (at the HS 
10-digit level) listed by the AQSIQ, mainly live an imals and live plants and feedstuffs, must be 
inspected at the ports. 
20. ¿Cuáles han sido los aspectos más positivos de esta reforma? ¿Hay mediciones del 
impacto económico de dicha reforma? 
What have been the most positive aspects of this reform?  Has its economic impact been 
measured in any way? 
Answer 
According to the Notice on Implementing the Inspec tion and Quarantine Direct Release System of 
Import and Export Goods issued by AQSIQ on 18 July 2008 (AQSIQ Notice No. 82 of 2008), "direct 
release" refers to the convenient and efficient in spection and quarantine release methods adopted by 
inspection and quarantine authorities for those impor t and export goods that meet the specified 
conditions, and it includes import direct release and export direct release. 
Import direct release means that the inspection and quarantine authorities at the ports do not take 
inspection or quarantine measures for the eligible import goods, which will be directly delivered to 
their destinations and will be subject to inspec tion and quarantine measures and released by the 
inspection and quarantine authorities at their destina tions. Export direct release means that enterprises 
can directly handle customs clearance procedures by presenting the customs clearance form issued by 
the inspection and quarantine authorities at the place of origin to the customs authorities at the place 
of customs declaration, which rele ase the eligible export goods that are identified as qualified after the WT/TPR/M/230/Add.1 
Page 410  
 
  inspection and quarantine measures by the inspection and quarantine authorities at the place of origin. 
The new system has facilitated the import and export of goods and reduced cost and enhanced 
efficiency of customs clearance for export enterprises.  
3) M
EDIDAS QUE AFECTAN DIRECTAMENTE A LAS EXPORTACIONES  
3) M EASURES DIRECTLY AFFECTING EXPORTS  
iii) Impuestos a la exportación 
iii) Export Taxes 
En el párrafo 77 se menciona que "China suprimió o reduj o los impuestos a la exportación respecto 
de algunos productos para mitigar los efectos negativos  de la crisis mundial en sus exportaciones; por 
ejemplo a partir del 1 de julio de 2009, China suprimió o redujo los impuestos a la exportación 
respecto, del trigo, el arroz, los abonos, el acero y algunos metales no ferrosos, entre otros productos" 
y que "según las autoridades, esos impuestos a la  exportación y sus ajustes son compatibles con las 
disciplinas de la OMC, ya que se basan en el artículo XX del GATT de 1994".  
According to paragraph 77 , China "removed or lowered export taxes on some products to mitigate 
the negative effects of the global crisis on its export s;  for example, as of 1 July 2009, China removed 
or lowered export taxes on, inter alia, wheat, rice, fe rtilizers, steel, and some non-ferrous metals", and 
"[t]he authorities maintain that these export taxes and their adjustments are consistent with WTO 
disciplines as they are based on Article XX of GATT 1994". 
21. ¿Podría China aclarar cómo utiliza los criterios económicos y comerciales de la 
economía mundial para ajustar su política de r estricciones a la exportación (impuestos a la 
exportación) y justificarlas con las disciplinas  de la OMC según el artículo XX del GATT? 
Would China please explain how it uses global econ omic and trade criteria to adjust its export 
restriction policy (export taxes) and justify the restrictions in terms of the WTO disciplines 
under Article XX of the GATT. 
De acuerdo con los párrafos 77, 78 y 79 : 
In the light of paragraphs 77, 78 and 79 : 
22. ¿Cuál es la posición de China hacia el fu turo respecto al uso de mecanismos para la 
restricción de exportaciones? 
What is China's position for the future as re gards the use of export restriction mechanisms? 
Answer (for questions 21 and 22) 
China's export administration on a few products ar e for the purpose of protecting environment, 
protecting human, animal or plant life or hea lth, conserving exhaustible natural resources, or 
protecting national security. Such measures do not c onstitute arbitrary discrimination, or disguised 
restriction on international trade, and are fully co nsistent with WTO rules. Since the WTO dispute 
cases of DS394, 395 and 398 are now ongoing, China will provide further comments after the final 
rulings.  
v) Concesiones fiscales en el marco del tráfico de perfeccionamiento 
v) Tax concessions under processing trade 
El párrafo 81  menciona que en el marco del tráfico de  perfeccionamiento, las importaciones están 
exentas de derechos arancelarios si las mercancías  se importan bajo control aduanero y se exportan en 
un plazo determinado. Sin embar go, algunos productos están sujetos a la "prohibición de exportación  WT/TPR/M/230/Add.1 
 Page 411 
 
 
  en el marco del tráfico de perfeccionamiento".  La exportación de esos productos se permite cuando 
no está prohibida en el régimen comercial normal;  sin embargo, cuando tales productos se exportan 
con arreglo al régimen normal, al igual que los demá s productos, su exportación está sujeta al pago de 
los aranceles de importación correspondientes a los insumos importados.  Como China no aplica 
procedimientos de devolución arancelaria, esos aran celes pueden constituir impuestos a la exportación 
(recuadro III.1).  En 2009 estaban sujetas a prohibi ciones a la exportación 1.016 líneas arancelarias al 
nivel de 8 dígitos del SA (frente a 617 líneas en 2007), y otras 139 líneas estaban sujetas a prohibiciones a la importación y la exportación en régimen de tráfico de perfeccionamiento. 
Paragraph 81  states that under the mode of "processing trade", import tariffs are exempted if the 
goods are imported in bond and exported within a certain period.  However, some products are 
"prohibited from being exported under processing trad e".  If these products are not prohibited from 
being exported under normal trade, their export is allowed;  however, when exported under normal 
trade, like other products, import tariffs must be paid on their imported inputs.  As China does not 
have tariff drawbacks, these tariffs can constitute  taxes on exports (Box III.1).  In 2009, 1,016 tariff 
lines at the HS 8-digit level were subject to export prohibitions (up from 617 lines in 2007), and 
another 139 lines were subject to both import and export prohibitions under processing trade. 
23. ¿Cuál es el plazo para exportar los produc tos importados bajo control aduanero en el 
marco del tráfico de perfeccionamiento? ¿Es este plazo el mismo para todos los productos o depende del sector del que se trate? 
Within what timeframe do products imported in bond under the mode of processing trade have 
to be exported?  Is the timeframe the same fo r all products or does it depend on the sector 
involved? 
Answer 
According to the Measures on Supervision and Administration of the Customs for Goods under 
Processing Trade (http://www.gov.cn/flfg/2008-01 /16/ content_859724.htm), products imported in 
bond under the mode of processing trade should be e xported within one year from the issuing date of 
the processing trade handbook. If due to special circ umstances where contract implementation must 
be extended, the timeframe may be extended once for half a year upon application. In case of a second 
special circumstance, a further extension may be granted for another half a year. Therefore, the timeframe is normally 1 year, and in an y case it can be no longer than 2 years.  
24. Cuáles son los productos sujetos a la prohib ición exportación en el marco del tráfico de 
perfeccionamiento, así como las ra zones para hacer tal prohibición? 
Which products are prohibited from being expo rted under processing trade, and why is their 
export prohibited? 
Answer 
The lists of products restricted and prohibited for import and/or export under processing trade are 
released annually by MOFCOM in its a nnouncements and gazette. Please refer to 
http://www.mofcom.gov.cn/aarticle/b/c/200906/ 2 0090606300331.html. The reason of the export 
prohibition is to reduce energy consumption and po llution to protect environment and human life and 
health.  
25. Existen productos para los cuáles está proh ibida su exportación bajo el régimen de 
tráfico de perfeccionamiento aunque su export ación bajo el régimen comercial normal está 
permitida? WT/TPR/M/230/Add.1 
Page 412  
 
  Are there products exported und er normal trade that are prohibited from being exported under 
processing trade? 
26. Podría China aclarar la razón por la cu ál, los productos (cuya exportación bajo el 
régimen del tráfico de perfeccionamiento está pr ohibida) que son exportados bajo el régimen 
comercial normal, están sujetos al pago de lo s aranceles de importación correspondientes a los 
insumos importados? 
Would China please explain why products (pro hibited from being exported under processing 
trade) that are exported under normal trade are subject to import tariffs on their imported 
inputs. 
27. ¿Podría China aclarar las razones por las que se incrementó el número de fracciones 
arancelarias sujetas a prohibiciones a la export ación y los nuevos productos a los que se aplica 
esta medida? 
Would China please explain why the number of tari ff headings subject to export prohibitions 
has been increased and specify the new pr oducts to which this measure applies. 
Answer (for questions 25 to 27) It is true that some products that are prohib ited from being exported under processing trade may be 
exported under normal trade. For details, please compare the above-mentioned lists of products 
restricted and prohibited for import and/or export  under processing trade with the QR notifications 
submitted by China to the WTO annually.  
Processing trade and normal trade are the two major trading modes in China. Processing trade is a 
type of trade facilitating measure with special s upervision of the Customs where goods particularly 
spare parts and raw materials are imported in bond for the purpose of re-export after being assembled 
or processed. Under normal trade, materials imported sh all be subject to import tariffs and other taxes 
applicable at the import stage.  
Processing trade is common in many countries especially developing countries. It aims to giving full 
play to the country's comparative advantages. That  China would not allow import and/or export under 
processing trade only means that China does not see th at assembly or processing in China of certain 
raw materials should be encouraged with the fac ilitation measure of processing trade for such purpose 
as environment protection. It does not mean that im port under normal trade should also be prohibited. 
In order not to distort normal trade, import unde r normal trade is allowed as long as enterprises 
consider it economically still practical. China will ad just lists of products s ubject to import and/or 
export prohibition under processing trade according to  the economic situation and development need, 
and the as explained previously, the lists and their adjustments will be promulgated by MOFCOM in 
its announcements and gazette and are also  available at the website of MOFCOM. 
vi) Prohibiciones, restricciones y régimen de licencias de importación 
vi) Export prohibitions, restrictions, and licensing 
b) Contingentes y licencias de exportación 
b) Export quotas and licensing  
En el párrafo 86 , se señala que las prescripciones en materia de licencias de exportación de China se 
aplican principalmente para cumplir las obligaciones contraídas por el país en el marco de acuerdos 
internacionales. Los acuerdos internacionales a que se re fiere la secretaría en la nota al pie 62, versan  WT/TPR/M/230/Add.1 
 Page 413 
 
 
  sobre la protección de la capa de ozono, la prohib ición de desarrollo de armas químicas, la lucha 
contra el tráfico de drogas, y el control residuos peligrosos. 
According to paragraph 86 , China's export licensing requirements are implemented mainly to fulfil 
its obligations under international ag reements.  The international agre ements to which the Secretariat 
refers in footnote 62 relate to protection of the oz one layer, the ban on the development of chemical 
weapons, the fight against drug trafficki ng, and the control of hazardous waste. 
28. ¿Las licencias que se requieren para la expo rtación de productos sujetos a contingentes 
buscan cumplir con el mismo objetivo, es decir, cumplir con las obligaciones contraídas por el 
país en el marco de acuerdos internacionales? 
Are the licences required for exporting products subj ect to quotas designed to achieve the same 
objective, that is, to fulfil China's obligations under international agreements? 
Answer 
The situation as said in the question depends on specific product.  In general, China's export 
administration on a few products are for the purpos e of protecting environment, protecting human, 
animal or plant life or health, conserving exhaustib le natural resources, or protecting national security. 
Such measures do not constitute arbitrary discrimina tion, or disguised restriction on international 
trade, and are fully consistent with WTO rules. Since the WTO dispute cases of DS394, 395 and 398 
are now ongoing, China will provide further comments after the final rulings.  
4) M EDIDAS QUE AFECTAN DIRECTAMENTE A LA PRODUCCIÓN Y AL COMERCIO  
4) M EASURES AFFECTING PRODUCTION AND TRADE  
v) Derechos de propiedad intelectual  
v) Intellectual property rights  
En relación con la Observancia de Propiedad Inte lectual (DPI), contenida en el recuadro III.2, 
quisiéramos  realizar las siguientes preguntas: 
As regards enforcement of intellectual property righ ts (IPRs), outlined Box III.2, we would have the 
following questions: 
29. ¿Cómo funciona la mediación que realiza la  autoridad administrativa entre el titular de 
los DPI y el infractor, y qué resultados se ha n obtenido con este proceso de mediación? 
How does the administrative authority mediate between the IPR holder and the infringer, and 
what results have been achieved through this mediation process? 
Answer 
According to Chinese law, mediation includes civ il mediation, administrative mediation and court 
mediation, which are all based on the voluntariness of the parties. Administrative mediation is an 
approach adopted by the administrative bodies to  deal with administrative disputes. If an 
administrative body encounters IPR disputes during the exercise of its administrative power, it may 
conduct mediation. However, in practice administra tive bodies rarely receive mediation application 
from relevant parties.  
30. ¿En qué casos la autoridad administrativa puede remitir al Tribunal del pueblo una 
infracción a los DPI, y qué procedimiento realiza este tribunal una vez que le ha sido remitido el 
asunto? WT/TPR/M/230/Add.1 
Page 414  
 
  In what instances may the administrative authority refer an IPR infringement to the People's 
Court, and how does the Court proceed once the case has been taken to it? 
Answer 
The administrative law-enforcement authorities must tr ansfer to the judicial authorities in a timely 
manner the cases meeting the criteria stipulated in th e Interpretation on Issues concerning the Specific 
Application of Law in Handling Criminal Cases of Infringement of Intellectual Property Rights, 
which was issued on 8 December 2004 by the Su preme People's Court and the Supreme People's 
Procuratorate and came info effect on 22 December 2004. 
31. ¿Cómo interactúan las diferentes oficin as gubernamentales encargadas de la 
administración y protección de los DPI con las a duanas para poder detectar mercancía apócrifa 
que infrinja DPI al ingresar o salir de China? 
How do the various government offices in charge of administering and protecting IPRs interact 
with Customs in detecting apocryphal goods that in fringe IPRs when entering or exiting China? 
Answer 
Since the last trade policy review the Chinese Cust oms have continued to effectively combat IPR 
infringements at the borders. Law enforcement on expor t has been particularly stepped up, with the 
cooperation with IPR right holders further strengt hened and the ability of on-spot detection of 
Customs inspection staff further enhanced. As for sp ecific measures taken, firstly, Customs authorities 
carried out enforcement actions on their own initia tive to protect intellectual property rights in 
accordance with their mandate. In 2009, the value of  infringing goods detained by China Customs on 
their own initiative reached RMB 430 million, accountin g for 94.3% of the total value of infringing 
goods seized. Secondly, China Customs took a series of special actions in key areas and routes against border infringements such as the "dragon boat acti on" taken against the export of infringing goods by 
making use of European and American ship or air routes from the end of 2007 to the beginning of 
2008, and the special action for IPR protection in  post and express mail June to December 2009. 
China Customs also attach great importance to la w enforcement cooperation with other countries and 
regions. China has signed documents relating to IP R protection cooperation with the USA, EU and 
also among Japan, South Korea and itself. Effe ctive cooperation is underway in information 
exchange, enforcement experience sharing, a nd data interchange in case statistics etc. 
32. ¿Existen bases de datos que compartan la Oficina Estatal de la Propiedad Intelectual 
(SIPO) con la Oficina Estatal de marcas de Fábr ica o de Comercio, la administración Nacional 
del Derecho de Autor, la Administración Esta tal de Productos Farmacéuticos y las Aduanas 
para poder verificar la titula ridad de los DPI de los produc tos que se exporten e importan? 
Are there databases shared by the State Intell ectual Property Office (SIPO) and the State 
Trademark Office, the National Copyright Admini stration, the State Drug Administration and 
Customs to verify IPR ownership of products being exported or imported? 
Answer 
There is no such a shared database established so far.  
33. ¿En qué consiste el Reglamento adoptado  por el Consejo de Estado, referente a la 
protección en Aduanas de los DPI?  WT/TPR/M/230/Add.1 
 Page 415 
 
 
  What is the scope of the Regulations on Customs Protection of Intellectual Property Rights 
adopted by the State Council? 
Answer 
Please refer to the Regulations on Customs Protec tion of Intellectual Property Rights, which is 
available at http://www.gov.cn/zwgk/2010-03/27/ content_1566452.htm. 
Con relación a los derechos de autor 
Copyright 
34. ¿La Ley de Derecho de Autor de China prevé la protección de títulos, nombres, 
denominaciones, características físicas y psicológi cas distintivas, o características de operación 
originales aplicados, de acuerdo con su naturaleza a alguno de los siguientes géneros:? 
Does China's Copyright Law provide for the protectio n of titles, names, appellations, distinctive 
physical and psychological characteristics, or orig inal operating characteristics, applied to any 
of the following categories in accordance with their nature? 
I. Publicaciones periódicas: Editadas en part es sucesivas con variedad de contenido y 
que pretendan continua rse indefinidamente; 
Periodical publications: published in successive  parts with a variety of content, with a 
view to indefinite continuation; 
II. Difusiones periódicas: emitidas en partes sucesivas con variedad de contenido y 
susceptibles de transmitirse; 
Periodic broadcasts:  emitted in successive parts with a variety of content and capable 
of further transmission; 
III. Personajes humanos de caracter ización o ficticio o simbólicos; 
 Character-based, fictional or symbolic human personalities; 
IV. Personas o grupos dedicados a actividades artísticas; y 
 Persons or groups engaged in artistic activities;  and 
V. Promociones publicitarias: contempl an un mecanismo novedoso y sin protección 
tendiente a promover u ofertar un bien o un servicio con el incentivo adicional de 
brindar la posibilidad al público en general de obtener otro bien o servicio en condiciones más favorables que en las que nor malmente se encuentra en el comercio. 
Promotional advertising:  involving a novel and unprotected mechanism for the 
purpose of promoting or offering a good or a service with the additional incentive of giving the general public the chance to  obtain another good or service on more 
favourable conditions than are availabl e in the ordinary course of trade. 
35. De ser este el caso, ¿Bajo qué figura jurídica los protege? 
If this is the case, under what legal provision are they protected? WT/TPR/M/230/Add.1 
Page 416  
 
  Answer (for questions 34 and 35) 
Regarding the objects protected by the Copyright Law, Article 3 of the Law provides that "works" 
mentioned in the Law shall include works of literature , art, natural science, social science, engineering 
technology and the like which are expressed in the follo wing forms: (1) written works; (2) oral works; 
(3) musical, dramatic, quyi (Chinese traditional play and musical), choreographic and acrobatic 
works; (4) works of fine art and architecture; (5 ) photographic works; (6) cinematographic works and 
works created in a way similar to cinematography; (7 ) graphic works such as drawings of engineering 
designs and product designs, maps and sketches, and model works; (8) computer software; and 
(9) other works as provided for in laws and administ rative regulations. Article 4 of the Regulations for 
the Implementation of the Copyright Law further specifies the definition and scope of the above 
objects. 
36. ¿La Ley de Derecho de Autor prevé la protección de las expresiones del folclore? 
Does the Copyright Law provide for the protection of expressions of folklore? 
37. De ser este el caso, ¿Qué abarca  la protección de las expresiones? 
If so, how extensive is the protection of such expressions? 
Answer (to questions 36 and 37) 
According to Article 6 of the Copyright Law, regula tions for the protection of copyright in works of 
folk literature and art shall be separately establishe d by the State Council. At present, the Legislative 
Affairs Office of the State Council is preparing for the drafting of the Measures for the Protection of Copyright in Works of Folk Literature and Art. 
38. ¿Cuál es la duración de la protección  de las obras literarias y artísticas? 
What is the term of protection of literary and artistic works? Answer 
For protection term of relevant rights, specific provisions are Article 20 and Article 21 of the 
Copyright Law.  
Article 20 provides that the protection of rights of authorship, alteration and integrity of an author 
shall be unlimited. 
According to Article 21, in respect of a work of a citizen, the term of protection of the right of 
publication and of the rights provided in Items (5) through (17) of Paragra ph 1 of Article 10 of the 
Law shall be the lifetime of the author and fifty y ears after his death, expiring on December 31 of the 
fiftieth year after his death. In the case of a work  of joint authorship, such term shall expire on 
December 31 of the fiftieth year after the death of the last surviving author. 
The term of protection of the right of publication and of the rights provided in Items (5) through (17) 
of Paragraph 1 of Article 10 of the Law where th e copyright belongs to a legal entity or other 
organizations, or in respect of a service work where the legal entity or organization enjoys the 
copyright (except the right of authorship), shall be  fifty years, expiring on December 31 of the fiftieth 
year after the first publication of such a work, ho wever, any such work that has not been published 
within fifty years after the completion of its creation shall no longer be protected by the Law.  WT/TPR/M/230/Add.1 
 Page 417 
 
 
  The term of protection of the right of publication and of the rights provided in Items (5) through (17) 
of Paragraph 1 of Article 10 of the Law in respect of a cinematographic work or a work created in a 
way similar to cinematography shall be fifty years, expiring on December 31 of the fiftieth year after 
the first publication of such a work. However, a ny such work that has no t been published within 
fifty years after the completion of its creation shall no longer be protected by the Law. 
39. ¿La Ley de Derecho de Autor prevé limit aciones y excepciones a favor de las personas 
con discapacidades?  
Does the Copyright Law provide for restrictions and exceptions in favour of persons with 
disabilities? 
Answer The current Copyright Law provides the followi ng limitations for the copyright concerning the 
disabled. Article 22 provides that in the followi ng cases, a work may be exploited without the 
permission from, and without payment of remunera tion to, the copyright owner, provided that the 
name of the author and the title of the work are in dicated and the other rights enjoyed by the copyright 
owner by virtue of this Law shall not be prejudiced . .. (12) translation of a published work into Braille 
and publication of the work so translated.  
The provisions in the preceding paragraph shall be  applicable to the limitations on the rights of 
publishers, performers, producers of audio and video recordings, radio stations and television stations. 
40. ¿Cuál es la duración de la protección de los derechos conexos en China?  
What is the term of protection of related rights in China? 
Answer Please refer to Article 20 and Article 21 of the Copy right Law as seen in the answer to question 38. 
41. ¿Cuántas sociedades de gestión colecti va existen en China y sobre que ramas del 
derecho de autor o titulares de derechos conexos? 
How many collective management societies are th ere in China and which branches of copyright 
or related rights do they cover? 
Answer 
By far, China has five major societies for co llective management of copyright, namely Music 
Copyright Society of China, China Audio-Vide o Copyright Association, China Written Works 
Copyright Society, Images Copyright Society of China and China Film Copyright Protection Association. They are established according to th e Regulations on the Collective Management of 
Copyright promulgated in 2004.  
42. ¿China es miembro de todos los tratados administrados por la OMPI en materia de 
Derecho de Autor? 
Is China a member of all the WIPO -administered copyright treaties? WT/TPR/M/230/Add.1 
Page 418  
 
  Answer 
China became a member of the World Intellectual Property Organization (WIPO) in 1980 and has 
acceded into four international conventions and tr eaties on copyright in relation to WIPO since 1992. 
In October 1992, China acceded into the Berne Conve ntion for the Protection of Literary and Artistic 
Works. In April 1993, China acceded into the Convention for the Protection of Producers of 
Phonograms Against Unauthorized Duplication of Their Phonograms. In June 2007, China acceded 
into the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty. 
Con relación a las indicaciones geográficas 
Geographical indications 
Párrafos 169, 170, 171 y 172. 
Paragraphs 169, 170, 171 and 172. 
43. Existe la posibilidad en China de que una  IG, registrada ante la Administración de 
Supervisión de Calidad Inspección y Cuarente na (AQISQ) coexista con una marca de 
certificación otorgada por la  Administración Esta tal de Industria y Comercio (SAIC) y de ser el 
caso. ¿Cuáles son los requisitos?  
Is it possible in China for a GI registered wi th the General Administration of Quality 
Supervision, Inspection and Quarantine (AQSIQ) to coexist with a certification mark granted 
by the State Administration for Industry a nd Commerce (SAIC) and, if so, what are the 
requirements? 
Answer It is possible in China that a GI registered with  the General Administration of Quality Supervision, 
Inspection and Quarantine (AQSIQ) coexist with  a certification mark granted by the State 
Administration for Industry and Commerce (SAIC).  
The SAIC protects GIs by applying collective trad emark and certification trademark registration 
pursuant to the Trademark Law. According to  the Trademark Law, an application for 
collective trademark or certification trademark shall be made to the Trademark Office of the SAIC if a 
GI needs to be protected. The applicant may s ubmit relevant documents in accordance with the 
Measures for the Registration and Administ ration of Collective Trademarks and Certification 
Trademarks . 
The AQSIQ accepts application for GI registration in accordance with the Provisions on the 
Protection of Geographical Indication Products  with full respect of the applicant's will. The rule can 
be found on the AQSIQ website at http//www.aqsiq.gov.cn. 
44. ¿Las IG's extranjeras reconocidas por al gún Acuerdo Internacional, están sujetas a 
algún procedimiento legal de registro, pago de derechos o remuneración? 
Are foreign GIs recognized under an internatio nal agreement subject to any legal procedure 
involving registration, payment of duties, or remuneration? 
Answer 
The holder of a foreign geographic indicati on may submit to the SAIC Trademark Office 
application for registration of a collective trademar k or certification trademark in accordance with the  WT/TPR/M/230/Add.1 
 Page 419 
 
 
  Trademark Law . Approval and legal protection will be gran ted after examination by the Trademark 
Office in accordance with rele vant laws and regulations. 
AQSIQ in its competence handles application for re gistration of foreign geogr aphic indications on the 
basis of its MOU signed with other countries with reference to the Provisions on the Protection of 
Geographical Indication Products  regardless of whether the geographic indication is recognized 
under international agreements. 
45. ¿Además del reconocimiento de las Indicaci ones Geográficas, su legislación contempla la 
protección de las Denominaciones de Origen. 
In addition to recognizing GIs, does China's legislation provide for the protection of 
appellations of origin? 
46. ¿En la legislación de China se contempla la  protección a las Indicaciones Geográficas de 
vinos y bebidas espirituosas? 
Does China's legislation provide for the protection of GIs for wines and spirits? 
Answer(for questions 45 and 46) 
Appellations of origin may register as collective trademarks or certification trademarks as GIs in 
accordance with the Trademark Law  and be protected. The Trademark Law  grants GI certification 
trademark protection to products that meet requirements of the Trademark Law  concerning GIs, 
including wines and spirits with geographical features.   
The GI definition in the Provisions on the Protection of Geographical Indication Products  covers 
general GIs and appellations of origin. The GI protec tion provided in the rule covers wines and spirits. 
47. Las indicaciones geográficas de vinos y be bidas espirituosas pueden ser registradas ante 
el Ministerio de Agricultura? 
Can GIs for wines and spirits be regist ered with the Ministry of Agriculture?  
Answer 
GIs for wines and spirits cannot be registered with the Ministry of Agriculture. 
Con relación a la protección de variedades vegetales 
Protection of new varieties of plants 
China al igual que México es miembro de la Unión Internacional para la Protección de las 
Obtenciones Vegetales (UPOV) desde marzo de 1999 c onforme el Acta de 1978, bajo la legislación 
que entró en vigor en ese país el 1º de octubre de  1997, por lo que no tendríamos preguntas respecto al 
marco jurídico, sino a la vigilancia de la legislación. 
China, like Mexico, is a member of the International Union for the Protection of New Varieties of 
Plants (UPOV), having acceded in March 1999 pursua nt to the Act of 1978, under legislation that 
entered into force in China on 1 October 1997.  Ou r questions therefore do not relate to the legal 
framework but to the monitoring of this legislation. 
En un Simposio sobre los Derechos de Propiedad Intelectual en el ámbito de la Biotecnología 
Vegetal, organizado conjuntamente por la Organizac ión Mundial de la Propiedad Intelectual (OMPI) WT/TPR/M/230/Add.1 
Page 420  
 
  y la UPOV, celebrado en octubre de 2003, en la  exposición del caso de China (documento WIPO-
UPOV/SYM/03/8) se mencionó que resultaba frecuente la infracción a los derechos de obtentor, tanto de agricultores como de empresas semilleras, y do nde las autoridades locales en ocasiones favorecían 
al infractor. 
A symposium on plant biotechnology intellectual property rights, jointly organized by the World 
Intellectual Property Organization (WIPO) and th e UPOV, was held in October 2003, and in the 
presentation of China's case (document WIPO-UPOV/SYM/03/8) reference was made to the fact that 
breeders' (both farmers and seed companies) rights we re frequently infringed and that at times the 
local authorities settled the matter in favour of the infringing party.  
48. En tal sentido, nos gustaría conocer ¿Qué acciones se han tomado pa ra el control y la 
implementación de un sistema eficaz que proteja el legítimo derecho del obtentor? 
We would like to know what steps have been taken with a view to controlling and implementing 
an effective system for the protection of the legitimate rights of plant breeders. 
Answer 
China does not know based on what the document referred to in the question came to such a 
conclusion as referred to in the question. Chinese gov ernment has always attached great importance to 
intellectual property rights protection, and for the ri ghts of plant varieties dual-track protection at both 
administrative and judicial fronts is adopted. When the right of plant varieties is infringed, the right holder or interested parties may either request the agricultural and forestry department in the 
provincial government or above to investigate a nd punish the wrongdoings, or bring a lawsuit to 
court. To handle cases concerning plant varieties rights in a fair and effective manner, Ministry of 
Agriculture has promulgated the Rules on Handling Cases Concerning Disputes over the Rights of 
New Plant Varieties  and the technical standards for quick DNA test of new varieties of plants 
including corn and rice. The Supreme People's Cour t has issued judicial interpretations including 
Certain Provisions on Application of Law in Adjudicating Cases Concerning Disputes over the 
Infringement of Rights of New Plant Varieties . By the end of 2009, agricultural authorities have 
investigated and handled 1,223 cases concerning the infringement and counterfeit of plant varieties, 
and people's courts have adjudicat ed 970 cases related to the infringeme nt of plant varieties rights. 
This has effectively contained plant varieties ri ghts infringing activities, protected legal rights and 
interests of relevant parties and improved seeds market environment.  
China's new plant varieties protection system is tr usted by both domestic and overseas breeders. By 
the end of May 2010, Ministry of Agriculture h as received 6,978 domestic and overseas applications 
for the rights of agricultural plant varieties. The number is among the top of the world.  
Chinese government is devoted to the improvement  of innovation environment and sticks to the 
principle that "everyone is equal before the la w". Ministry of Agriculture has not received any 
information complaining that "local government favors people infringing plant varieties rights". 
b) Marcas de fábrica o de comercio  
b) Trademarks 
49. ¿Además de la protección de la marca de fábr ica o de comercio, existe algún otro tipo de 
incentivo que se otorga por el registro de la s marcas de fábrica o de comercio?  
In addition to trademark protection, is any ot her type of incentive granted through trademark 
registration?  WT/TPR/M/230/Add.1 
 Page 421 
 
 
  Answer 
There are no other incentives granted through registration. The Chinese administrations of industry 
and commerce at all levels have  been advocating and publicizing trademark knowledge and trademark 
legislation via various media including TV, radio, newspapers and Internet by means of interviews, 
exhibitions, training, seminars, on-spot consulta tions and handout leaflets, so as to guide and 
encourage trademark users to use registered tradem arks. The awareness of the whole society to use 
trademark and to protect registered trademarks has been further strengthened. In 2009 alone, a 
historical high was hit with the trademark app lications for registration amounting to 830,500 cases 
nationwide, increasing by 18.96% year-on-year. 
4) M EDIDAS QUE AFECTAN A LA PRODUCCIÓN Y AL COMERCIO  
4) M EASURES AFFECTING PRODUCTION AND TRADE  
i) Tributación e incentivos fiscales  i) Taxation and Tax Incentives 
a) Panorama general  
a) Overview 
En el párrafo 96  se menciona que durante el período ob jeto de examen, China siguió aplicando 
diversas reformas fiscales, cuya finalidad es que  su sistema fiscal sea más sencillo, neutral y 
equitativo.  Por ejemplo, China unificó los impue stos sobre las rentas aplicados a las empresas de 
inversión extranjera y a las empresas nacionales, transformó el IVA de un impuesto basado en la 
producción en un impuesto basado en el consumo, y aumentó el umbral establecido para el pago del 
impuesto sobre la renta de las personas físicas.   China también puso en práctica un conjunto de 
políticas fiscales destinadas a promove r el desarrollo rural, la innovación tecnológica, la conservación 
de energía y la protección del medio ambiente.  Un a política fiscal más neutral podría indicar que el 
Gobierno se propone adoptar menos medidas de interf erencia directa en relación con la asignación de 
recursos. 
Paragraph 96 states that during the period under review, Ch ina has continued its various tax reforms, 
with a view to making its tax system simpler, more  neutral, and more equitable.  For example, it 
unified income taxes for foreign-invested enterp rises and domestic enterprises, transformed the VAT 
from a production-based to a consumption-based tax,  and increased the threshold for payment of 
individual income tax.  China also implemented a se ries of tax policies to promote rural development, 
technological innovation, energy conservation, and environmental protection.  A more neutral tax 
policy could indicate that the Government is to adopt less direct interference measures into the 
allocation of resources. 
50. ¿Cuál es el nivel de satisfacción del gobierno chino de las reformas realizadas para 
alcanzar la meta de dar vida a un sistema fisca l más sencillo, neutral y equitativo? ¿Cuáles son 
para el gobierno chino los principales retos a futuros a este respecto?  
How satisfied is the Chinese Government with the reforms conducted with a view to establishing 
a simpler, more neutral and more equitable tax sy stem?  In this respect, what does the Chinese 
Government regard as the key challenges for the future? 
Answer The various tax reforms implemented by China ar e in compliance with the policy objectives of tax 
system simplification, neutrality and fairness. Ho wever, this does not mean that government policy 
instruments, including tax measures will play no ro le. On the contrary, we believe that proactive and 
effective adjustment to the macro economy through government policy instruments will be significant WT/TPR/M/230/Add.1 
Page 422  
 
  and conducive to the sound functioning of market mechanism. In the future major challenges to 
China's tax system is how to promote transformatio n of the economic growth pattern and sustainable 
economic and social developm ent by way of tax reform. 
iii) Empresas de propiedad estatal, empr esas privadas y gestión empresarial 
iii) State-Owned Enterprises, Private En terprises, and Corporate Governance 
De acuerdo con el párrafo 121  se menciona que las EPE (Empresas de Propiedad Estatal) se han 
venido beneficiando en demasía de las medidas recientemente adoptadas por el Gobierno para 
fortalecer la economía, en particular las medidas de estímulo económico.  Al mismo tiempo, las 
empresas privadas nacionales tienen más dificultad es para acceder a los créditos bancarios.  Las 
autoridades han subrayado que el Gobierno siempre ha apoyado el desarrollo de las empresas de manera equitativa, independientemente de su estru ctura de propiedad, y que no tiene intención de 
favorecer a las EPE mediante los paquetes de medidas de estímulo. 
According to paragraph 121 , State-owned enterprises (SOEs) have been benefiting 
disproportionately from the Government's recent measures to boost the economy, particularly the 
economic stimulus.  At the same time, domestic pr ivate enterprises are finding it more difficult to 
access credits from banks.  The authorities emphasized that the Government has always supported the 
development of enterprises of all ownership stru ctures equally, and has no intention of favouring 
SOEs through the stimulus packages. 
51. ¿Qué tan prioritario es para  el gobierno chino lograr co ndiciones equitativas para las 
empresas privadas chinas con las EPE, en un cont exto en donde las empresas privadas en China 
han crecido de manera muy importante en los últimos años? 
To what extent is it a priority for the Chinese G overnment to level the playing field for domestic 
private enterprises in relation to SOEs, considering the vast expansion of private enterprise in China in recent years? 
Answer 
China adopts the socialist market economy system, in which SOEs and other enterprises are equal 
competitors in the market. China would develop the public sector of the economy and at the mean 
time encourage and support the development of the non-public sector, so as to form a new pattern of 
fair competition and mutual promotion of various types of enterprises.  
Los párrafos 124 y 125  mencionan que en función de su mayor rentabilidad, las EPE han comenzado 
a pagar dividendos al Estado y la gestión empres arial de las EPE también ha mejorado con su 
transformación en sociedades por  acciones y su cotización en bolsa. 
Paragraphs 124 and 125  report that owing to the SOEs' increasing profits China has started 
collecting dividends from them and that corporatization and listing on stock exchanges have improved 
the corporate governance of SOEs. 
52. ¿Cómo ve el gobierno chino el futuro de la s EPE a partir de estos cambios? ¿Cuál es el 
modelo de empresa estatal que el gobierno quiere construir en el futuro?  
How does the Chinese Government see the future of SOEs as a result of these changes?  What 
state enterprise model does the Government want to develop in the future?  WT/TPR/M/230/Add.1 
 Page 423 
 
 
  Answer 
Through years of reform and development, the ov erall quality of state-owned enterprises has been 
greatly improved, their economic returns increased and vitality enhanced.  
China will continue to promote the reform and deve lopment of state-owned enterprises and reform of 
the economic system. Policies and measures in this re spect will include encouraging non-public sector 
to participate in reform and restructuring of stat e-owned enterprises through merger, share-holding or 
equity participating; accelerating the introduction of joint stock system into state-owned enterprises to 
improve their corporate governance, promote their restructuring and public listing; encouraging the 
introduction of strategic investors, including overseas strategic investors; improving the exit mechanism for those inferior state-owned ente rprises etc. China will encourage state-owned 
enterprises to follow the new industrialization path  and resource-saving and sustainable development 
path. 
b) Empresas privadas nacionales 
b) Domestic private enterprises 
De acuerdo con el párrafo 127 , que indica que de acuerdo con algunos  investigadores, la verdadera 
fuente del desarrollo económico de China ha sido  sus empresas privadas nacionales, que no engloban 
a las empresas de inversión extranjera.  Esas empresas se han desarrollado a pesar de afrontar diversos obstáculos a la entrada y restricciones financieras.  
According to paragraph 127 , some researchers argue that the real source of China's economic 
development has been its domestic private enterp rises, which do not include foreign-invested 
enterprises.  These enterprises developed despite vari ous entry barriers and financial constraints. 
El párrafo 128  que dice que en principio, la Cláusula 36 suprimió los obstáculos a la entrada de las 
empresas privadas nacionales y de las empresas de inversión extranjera en determinados sectores a los que no tenían acceso.   Sin embargo, en la práctica, la aplicación de la Cláusula 36 no es uniforme 
entre los diferentes sectores e industrias.   
Paragraph 128  reports that the 36-Clause in principle removed barriers for domestic private firms 
and FIEs to enter certain sectors that had been closed to them.  However, in practice, the 
implementation of the 36-Clause is uneven across areas, and across industries. 
El párrafo 129  que indica que en general, las empresas pr ivadas nacionales también afrontan más 
limitaciones financieras que las EPE y las empresas de inversión extranjera. Además, se han presentado propuestas de establecer pequeños y medianos  bancos de nivel regi onal, pero no han sido 
aprobadas por los organismos de reglamentación de lo s servicios financieros.  Ese tipo de bancos, la 
mayor parte de cuyo capital es aportado por las empr esas privadas nacionales, podrían prestar mejores 
servicios a las PYME, que son, en su mayoría, empresas privadas nacionales. 
4. Paragraph 129  states that in general, domestic private enterprises are also more constrained 
financially than SOEs and FIEs.  Moreover, pro posals to establish small and medium-sized regional 
level banks have not been approve d by financial services regulators.  These banks, with the majority 
of their capital from domestic private enterprises, could better serve SMEs, which are mainly domestic private enterprises. 
53. México quisiera saber si ¿existe un plan de acción del gobierno chino hacia el futuro 
para fomentar un mayor acceso a capital para las empresas nacionales privadas?  WT/TPR/M/230/Add.1 
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  Does the Chinese Government have a forward-looking plan of action to provide greater access 
to capital for private domestic enterprises? 
Answer 
The financing difficulty facing SMEs, in particul ar small enterprises, is a common phenomenon on a 
global scale. To solve the problem a sustainable me chanism should be established, with which banks 
will have willingness, readiness and capacity to offer loan s. In view of this, on condition that the risk 
red line is not surpassed, China Banking Regul atory Commission (CBRC) will guide commercial 
banks to further optimize their service network layout, promote specialized services, innovate 
research and development system for new products, and advance series of mechanisms which include 
interest rate risk pricing mechanism, indepe ndent accounting mechanism, high efficiency loan 
examination and approval mechanism, incentive and control mechanism, professional staff training 
mechanism and default notification mechanism etc,  in order to increase adequacy, coverage and 
satisfaction of financing services for small enterprise. 
54. ¿Se tiene pensado que hacia el futuro se podrá aprobar el establecimiento de pequeños y 
medianos bancos a nivel regional para el apoyo de empresas privadas nacionales?  
Does China believe that the establishment, at regio nal level, of small and medium-sized banks to 
support domestic private enterprises may be approved in the future? 
Answer 
In 2010, the CBRC will adopt following measures to promote loan services for small enterprises:  
 (1) Encouraging banks to expand service network coverage. For example, the CBRC 
eliminated the quantitative restrictions on branches to be opened up by qualified 
small and medium-sized commercial banks, and encouraged those banks to give 
priority to the establishment of branches in  the West and Northeast of China where 
financial institutions are fewer and financ ial services are relatively weaker. Large 
banks are also required to extend its servi ces network to those regions with the 
establishment of special entities specifically for small enterprise financial services. 
 (2) Increasing village and town banks, loan  companies and rural mutual cooperatives 
which are primarily to serve county-level economy and small enterprises in relation 
to agriculture, rural areas and farmers. City  banks are also guided to reinforce their 
financial services for small enterprises.  
 (3) Exploring the establishment of community-level banking service system specialized 
for small enterprises, which will have a multitude of institutions, high network 
coverage, adequacy in capital supply, full market competition and high specialization 
in services. 
d) Pequeñas y medianas empresas (PYME) 
d) Small and medium-sized enterprises (SMEs) 
De acuerdo con el párrafo 136 , en 2009 el Gobierno chino asignó la suma de 5.110 millones de yuan 
con el objetivo de mejorar las condiciones credit icias para las PYME.  De la suma asignada, 
1.600 millones de yuan se usaron para otorgar gara ntías de crédito a las PYME.   Las autoridades 
ahora estudian la posibilidad de establecer un f ondo nacional de desarrollo para las pequeñas y 
medianas empresas.  WT/TPR/M/230/Add.1 
 Page 425 
 
 
  According to paragraph 136 , in 2009 the Government allocated  Y 5.11 billion to improve credit 
conditions for SMEs, of which Y 1.6 billion w as provided as credit guarantees to SMEs.  The 
authorities are now considering establishing a National SME Development Fund. 
55. ¿Cuál ha sido hasta el momento el impacto, medido por el gobierno de China, de este 
programa de mejoramiento de las condic iones crediticias de las PYME?     
What has been the impact so far, measured by  the Chinese Government, of this programme to 
improve credit conditions for SMEs?  
Answer 
To help small and medium-sized enterprises overcom e difficulties as a result of the financial crisis, 
improve their business environment and promote the quality of their growth, the State Council 
promulgated the Certain Opinions on Further Accelerating the Development of Small and Medium-
Sized Enterprises  on 19 September 2009. The policy document particularly proposed to effectively 
alleviate the difficulties in financing of small and medium-sized enterprises, including implementation 
of the financial policies supporti ng small enterprises, enhanced financial services to small and 
medium-sized enterprises, further expansion of th e financing channels for small and medium-sized 
enterprises, improvement of the credit guarantee syst em for small and medium-sized enterprises, and 
provision of credit information service to facilitate financing of small and medium-sized enterprises. 
For more details, please refer to the Certain Opinions on Further Accelerating the Development of 
Small and Medium-Sized Enterprises at http://www.gov.cn/ zwgk/2009-09/22/content_1423510.htm. 
56. ¿Cuáles son los principales rubros de apoyo a las pymes (investigación, capital de 
trabajo, innovación),  y los montos promedio de apoyo a una PYME? 
What are the main forms of support for SMEs (research, working capital, innovation) and the 
average amounts allocated in support of an SME? 
Answer 
For details of the support given to SMEs by the Ch inese government, Mexico is suggested to refer to 
the 2001-2004 subsidy notification (G/SCM/N/123/C HN) submitted by China. China will submit its 
2005-2008 subsidy notification soon , which will contain updated in formation in this regard. 
iv) Política de competencia y protección de los consumidores  
iv) Competition and consumer protection policy 
a) Política de competencia  
a) Competition policy  
En los párrafos 140, 141, 142, 143  se menciona que China tiene diversas leyes y reglamentos 
relacionados con la política de competencia.  Una im portante adición realizada en el período objeto de 
examen es la Ley Antimonopolio, que entró en vigor el 1º de agosto de 2008. Asimismo, se estableció 
la Comisión Antimonopolio del Consejo de Esta do para organizar, coordinar y "guiar" su 
aplicaciónLa Ley Antimonopolio abarca todos los sect ores de la economía y todo tipo de empresas. 
According to paragraphs 140, 141, 142 and 143, China has a variety of laws and regulations related 
to competition policy.  A major addition during th e period under review is the Anti-Monopoly Law, 
which entered into force on 1 August 2008, and an  Anti-Monopoly Commission of the State Council 
was set up, to organize, coordinate, and "gui de" anti-monopoly enforcement.  The Anti-Monopoly 
Law covers all sectors of the economy and all types of enterprises. WT/TPR/M/230/Add.1 
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  57. ¿Cómo se relaciona la aplicación de la nueva ley antimonopolio y la existencia de 
empresas de propiedad estatal las cuales tienen un a importante participación en la producción 
en algunos sectores de la economía?  
How does enforcement of the new Anti-Monopoly Law relate to the existence of State-owned 
enterprises, which have a large share in pr oduction in some sectors of the economy? 
58. ¿Cuál es la estrategia futura del gobierno chino a este respecto?  
What is the Chinese Government's future strategy in this respect? 
Answer (for questions 57 and 58) 
Through the implementation of Anti Monopoly Law , China hopes to prevent monopolistic conducts 
from restricting competition, promote and protect enterprises of various ownership structures to grow 
through fair competition, and thus promote the form ation of a mechanism for "survival of the fittest" 
and the transformation of economic  growth pattern. Therefore, Anti Monopoly Law  applies equally to 
monopolistic conducts of domestic a nd foreign enterprises of different ownership structures. There 
will be no differential treatment among enterp rises of different ownership structures. 
C
APITULO IV .  POLÍTICAS COMERCIALES POR SECTORES  
CHAPTER IV .  TRADE POLICIES BY SECTOR  
2) A GRICULTURA  
2) A GRICULTURE  
i) Características y evolución del mercado 
i) Features and Market Developments  
Con relación a la política agrícola orientada a dism inuir las disparidades entre la población del medio 
rural y el medio urbano (párrafos 8, 12 y 23  de la Sección IV) se indica que las medidas 
instrumentadas tienen una importante participación es tatal, en lugar de mecanismos de mercado que 
proporcionen las señales sobre qué tipo de producto s agrícolas se deben producir, y que permitan 
elevar los ingresos de los productores agrícolas. 
In connection with agricultural policy geared  towards mitigating rural-urban disparities 
(paragraphs 8, 12 and 23 ), the report indicates that the measu res taken involve strong government 
participation instead of market mechanisms that pr ovide the signals as to which agricultural products 
to produce and thereby raise the in come of agricultural producers. 
59. ¿La política de desarrollo agrícola, se consid era como parte integral de la política de 
desarrollo social?  
Is agricultural development policy regarded as an integral part of social development policy? 
60. ¿Que otros programas existe n para reducir la brecha entre la población rural y el resto 
de la población?  
What other programmes are there to reduce the gap between the rural population and the rest 
of the population? 
61. ¿Hay alguno que imp lique transferencias directas de ingreso, o bien otras medidas que 
no genere distorsiones a la actividad agrícola?   WT/TPR/M/230/Add.1 
 Page 427 
 
 
  Is there a programme providing for direct income transfers or other measures that do not 
create distortions in agricultural activity? 
62. ¿Qué magnitud tienen los recursos públicos destinados a propósitos de reducción de 
desigualdad social vía la política agrícola, versus otros programas dirigidos específicamente al mismo objetivo por otros medios? 
How much do public resources directed at reduc ing social imbalances through agricultural 
policy amount to compared with other programm es aimed at achieving the same objective by 
other means? 
Answer (for questions 59 to 62) 
The agricultural development policy is an important  and integral part of the overall economic and 
social development policy. In 2010, the Chinese gove rnment set out 8 specific tasks in the areas of 
economic and social development, among which are stepping up efforts to bridge the gap between 
cities and rural areas, to consolidate the foundation for agriculture and rural development and income 
rise for farmers, to increase agricultural producti on, to improve the conditions of agricultural 
production and rural life, and to increase income of farmers and advance the urbanization process. 
To bridge the gap between cities and rurual areas, the first and foremost point is to develop the 
economy so as to make bigger the cake of social we alth. Secondly, a reasonable income distribution 
mechanism shall be developed to cut even that cake. In the future, efforts will be made to deepen the 
reform of the income distribution mechanism, incr ease the income of city and rural residents, in 
particular that of the low and middle-income c itizens, and increase income of farmers through 
multiple channels. Efforts shall also be made to cr eate more jobs, improve the social security system 
covering city and rural residents, speed up the h ealthcare reform, and etc, so as to gurantee and 
improve people's livelihood, narrow the gap betwee n cities and rural areas to promote a harmonious 
society. 
In recent years, China has further strengthened its  efforts in addressing the problems of rural areas, 
farmers and agriculture ("three agriculture-related" pr oblems) and issued a series of measures. By far, 
China has basically formed an agricultural suppor t policy system for safeguarding grain production, 
enhancing agricultural efficiency, increasing fa rmers' incomes and promoting comprehensive 
development of rural areas, which is consistent w ith the agricultural support rules of the WTO. The 
main supporting measures are direct subsidies for farmers, comprehensive direct subsidies for 
agricultural inputs, subsidies for using superior seed  varieties and subsidies for purchasing agricultural 
machinery and tools. Others include transfer paym ent for big agricultural counties and investment for 
rural infrastructure construction. Besides, China also has the minimum purchase price policy for key 
grain products and the temporary reserve policy fo r corn, soybean, colza and cotton. Details of the 
support measures may be found in the 2001-20 04 subsidy notification (G/SCM/N/123/CHN) 
submitted by China, and in the 2005-2008 subsidy notification to be submitted by China soon, 
updated information in this regard will be incorporated. 
In the Government Report prepared for this review, it was also mentioned that over the past two years, 
investment in infrastructure and social programs in rural areas increased significantly. In the effort to 
increase the employment of the rural labour forces, training programs to improve the skills of rural 
migrant workers were launched on a large scale and policies were implemented to encourage rural 
migrant workers who returned to their home to start up their own businesses. Financial support for 
poverty alleviation purposes was also increased. From 2008 onwards the new poverty line of annual 
per-capita income of 1,196 Yuan was adopted to c over all low-income rural population. According to 
the new standard, 40.07 million people are eligible to receive assistance under poverty-relief 
programs. WT/TPR/M/230/Add.1 
Page 428  
 
  These policies and measures of the Chinese Government  towards rural areas, farmers and agriculture 
are long term policies and measures and will gradua lly improve farmers' welfare and narrow rural-
urban disparities. 
ii) Objetivos y administración de políticas 
ii) Policy Objectives and Administration  
De acuerdo con el párrafo 10  se indica que 10 los objetivos fundamentales del Gobierno en el sector 
agrícola siguen siendo los anunciados en el Undéci mo Plan Quinquenal: por ejemplo, desarrollar la 
agricultura mediante el aumento de la producción ag rícola global, la promoción de la reestructuración 
y la mejora de la infraestructura y los servicios. 
According to paragraph 10 , the Government's key objectives in the agriculture sector have remained 
those announced in the Eleventh Five-Year Plan, such as developing agriculture through improving 
overall agricultural production, promoting restruct uring, and improving infrastructure and services. 
En el párrafo 12, se menciona que no obstante, los instrume ntos de política utilizados para lograr 
esos objetivos no siempre son coherentes y, en alguno s casos, pueden estar en conflicto entre sí.  Otra 
preocupación que suscitan las políticas agrícolas de Ch ina es la importancia atribuida al sostenimiento 
de los precios del mercado y las subvenciones a los insumos, que no son los mecanismos más eficaces 
de que se dispone, ya que gran parte de los bene ficios va a parar a los proveedores de insumos 
agrícolas o queda absorbida por lo s mayores costos de los recursos ; esas políticas distorsionan más la 
producción y el comercio que otras. 
Paragraph 12 states that nonetheless, the policy tools used  to achieve these objectives are not always 
consistent and, in some cases, may be in conflict with each other.  Another concern with China's 
agriculture policies is the emphasis on market pric e support and input subsidies, which are not the 
most efficient mechanisms available, as a large part of the benefits is captured by suppliers of farm 
inputs or absorbed through higher resource co sts;  these policies are more production and 
trade-distorting than alternative policies. 
63. ¿Cuál es la estrategia del gobierno chin o hacia el futuro para mitigiar esta 
problemática? 
What strategy does the Chinese Government have in mind to mitigate this problem? 64. ¿Se tiene contemplado hacia el futuro el uso de políticas de apoyo al campo que generen 
menos distorsiones? ¿Cuáles serían?  
Is it considering the use of less distorting farm support policies in the future?  What would they 
be? 
Answer (for questions 63 and 64) 
China has notified the WTO its agricultural domes tic support data for 2002-2004. According to 
China's accession commitments, China does not ha ve total AMS, any amber box support shall be 
included in China's de minimis  limits. In general, China's agricu ltural support and protection measures 
have little distorting effect on trade, and China re lies more on green box measures to support farmers. 
In China's submitted domestic support notification the AMS, both product-specific and non product-
specific, are within China's de minimis  limits of 8.5%. Besides, according to our estimation based on 
data available, the AMS levels in recent years also did not exceed the above limit.   WT/TPR/M/230/Add.1 
 Page 429 
 
 
  iii) Instrumentos de política 
iii) Policy Instruments 
a) Medidas en frontera  
a) Border measures 
Medidas que afectan a las importaciones  
Measures affecting imports 
El párrafo 18, se refiere a   las licencias automáticas para supervisar y vigilar las importaciones, en 
particular de la leche fresca, la leche en polvo y el lactosuero. Paragraph 18 refers to automatic 
licensing to supervise and monitor imports of fr esh milk, milk powder and whey in particular. 
65. ¿Podría China proporcionar información sobre los volúmenes y plazos de estas licencias 
automáticas? 
Could China provide details of the volumes invol ved and the terms of validity of these automatic 
licences? 
Answer 
Please refer to China's annual notification in reply to  the Questionnaire pursuant to Article 7.3 of the 
Agreement on Import Licensing . 
Controles de precios y comercialización 
Price controls and marketing 
El párrafo 30  se refiere al Programa de R eserva de Cereales instrumentado por el gobierno chino. Al 
respecto, México desea saber si: 
Paragraph 30  mentions the Grain Reserves programme established by the Chinese Government.  
Mexico wishes to ask the following questions: 
66. ¿Los grandes volúmenes de compra que actu almente se han adquirido de granos (maíz, 
trigo arroz y frijol soya) obedecen al Program a de Reserva instrumentado por el gobierno 
chino? 
Have the current major grain (maize, wheat, ri ce and soya beans) procurements been made 
under the Reserves programme established by the Chinese Government? 
67. ¿Esta reserva influirá en el precio de granos a nivel mundial?  
Will the reserves impact world grain prices? 
68. ¿Se tendría que fijar un tope de inventarios? Should a ceiling be set for stocks? 
Answer (for questions 66 to 68) 
Supply of grain in China will primarily be based on its own capacity. We are not clear what 
purchasing entities were referred to when the question mentions "the current major grain 
procurements". Generally speaking, currently imports  of grain and soya bean s by Chinese enterprises WT/TPR/M/230/Add.1 
Page 430  
 
  are not related to government reserves. They ar e commercial activities of enterprises based on world 
market situations. 
69. ¿Cómo han cambiado los patrones de consum o alimenticios de la población china? En 
particular, con los aumentos en el nivel de  ingreso.  ¿Se han presentado, en promedio, 
disminuciones en el consumo de granos y aumentado el de cárnicos? 
What changes have there been in the Chines e population's food consumption patterns, in 
particular as a result of higher income levels?  On average, has there been a drop in grain consumption and higher consumption of meat products? 
Answer 
It is true that in recent years there is a drop in  grain consumption and high er consumption of meat 
products on an average basis in China. 
70. ¿Qué nivel de precio en los granos de be existir para implementar una medida 
arancelaria? 
What level must grain prices reach for a tariff measure to be implemented? 
Answer We do not understand what exactly the questions mean. Please clarify. 
5) S
ERVICIOS  
5) S ERVICES  
a) Sistema bancario  
a) Banking 
El párrafo 58  indica que desde el anterior Examen de  las Políticas Comerciales de China no se han 
modificado las prescripciones (en particular, sobre la cuantía mínima del capital social y el capital 
desembolsado y el total del capital de explotación) para el establecimiento de bancos (filiales) 
financiados exclusivamente con capital extranjero, ba ncos conjuntos chinos y extranjeros o sucursales 
abiertas por estos bancos y sucursales de bancos extranjeros.  En relación con los activos, los 
requisitos mínimos siguen siendo más altos para el  establecimiento de sucursales que para las 
entidades constituidas en el país.   
Paragraph 58  reports that since China's previous Trade Policy Review, there have been no changes 
in the requirements (including the minimum register ed and paid-up capital a nd total operating capital) 
for the establishment of a wholly foreign-funded ba nk (subsidiary), a Chinese-foreign joint-venture 
bank, or branches opened by these banks, and a br anch of a foreign bank.  The minimum asset 
requirements remain higher for the establishment of branches than for locally incorporated entities. 
71. ¿Existe el interés del gobierno chino de hacer modificaciones en el futuro a las 
prescripciones para el establecimiento de ba ncos financiados exclusivamente con capital 
extranjero, bancos conjuntos chinos y extranjeros o sucursales abiertas por estos bancos? ¿Disminuir las barreras a la entrada? 
Does the Chinese Government see any interest in making changes in the future to the 
requirements for the establishment of who lly foreign-funded banks, Chinese-foreign 
joint-venture banks or branches opened by such banks?  By removing entry barriers?  WT/TPR/M/230/Add.1 
 Page 431 
 
 
  Answer 
China's current policy is consistent with our accession commitments in the banking sector. Reform 
and opening-up are the basic strategy for the devel opment of China's services industry. China is 
willing to discuss further market liberalization on a reciprocal basis with other WTO members in the 
market access negotiations under the Doha Development Agenda.  
En los párrafos 83 y 88  se indica que desde su anterior exam en, China ha seguido liberalizando los 
servicios de telecomunicaciones y promoviendo la competencia en el sector, en el que se han 
introducido nuevos participantes y tecnologías y se han reducido los precios.  
Paragraphs 83 and 88 state that since its previous Review, China has continued to liberalize 
telecommunications services and promote competition in the sector;  new players and technology 
have been introduced and prices have come down.  
El Estado sigue siendo el propietario mayorita rio de todos los proveedores de servicios de 
telecomunicaciones básicas ;  sin embargo, se ha permitido gradualmente la participación privada y las inversiones extranjeras.  Las tres empresas co tizan en diferentes bolsas: en la actualidad, la 
participación extranjera en el capital es, aproximada mente, del 25,8 por ciento en China Mobile, del 
31,6 por ciento en China Unicom y del 22,3 por ciento en China Telecom. 
The State remains the majority owner of all the basic telecom service providers;  however, private 
participation and foreign investment have been a llowed gradually.  The three companies have been 
listed in different stock exchanges:  currently, the share of foreign ownership is around 25.8 per cent 
in China Mobile, 31.6 per cent in China Un icom, and 22.3 per cent in China Telecom. 
72. ¿Cuál ha sido el impacto, medido por el gobierno,  de la participación privada en el 
mercado de telecomunicaciones? ¿cuál es la meta  de liberalización del sector a la que quiere 
llegar el gobierno chino hacia el futuro? 
What has been the impact, measured by the Government, of private participation in the 
telecommunications market?  What level of liberalization of the sector does the Chinese Government seek to achieve in the future? 
Answer 
China believes that private capital plays an impor tant role in promoting economic development, 
pushing forward industrial structure adjustment, helping flourish urban and rural markets and 
providing more employment opportunities. China we lcomes all lawfully operating enterprises, 
including private enterprises, to en ter the telecommunication market. The Certain Opinions of the 
State Council on Encouraging and Guiding the Healthy Development of Private Investment  clearly 
encourages private capital participation in the te lecommunication sector. It encourages private capital 
entering basic telecommunication market by means of e quity participation, supports private capital to 
carry out value-added telecom business. It also  reiterates the strengthe ning of supervision and 
regulation on monopoly and unfair competition in the telecom sector to promote fair competition and 
resource sharing. 
Regarding opening-up objectives in future, China has never stopped the pace of reform and opening-
up and has been constantly promoting the healthy development of the telecom industry according to 
the actual conditions of the Chin ese market. China will decide on next steps of opening-up according 
to the development of the domestic market. WT/TPR/M/230/Add.1 
Page 432  
 
  ii) Financial services 
73. Would China have any plans in mind in the mid-term future to allow foreign direct 
investment in insurance companies?  
Answer 
According to China's WTO accession commitments, forei gn investors are allowed to invest directly in 
the insurance companies in China. Details in this re spect are specified in the insurance part of China's 
Services Schedule.  
74. In the opening of foreign bank branches in  China, they must notify the financial 
authorities of their work plan related to loans for merging and their internal control, to be 
allowed afterwards to operate normally.  Could Ch ina please clarify what is the usual length of 
this process? Is it merely a process of informin g or is it subject to approval as well? 
Answer 
According to Article 7 of the Regulations on Administration of Foreign-invested Banks , the 
establishment of foreign-invested banks and the bran ches thereof shall be subject to the examination 
and approval of the banking regul atory institution of the State Council. For specific application 
materials for establishing branches, please refer to Article 14 of the regulation.  
According to Article 15 of the Regulations on Administration of Foreign-invested Banks , the banking 
regulatory institution of the State Council shall ma ke a decision on whether or not to approve the 
preparations for establishment within 6 months fro m the day of receiving all required materials for 
application for establishing a foreign-invested banki ng institution and shall inform the applicant in 
writing. Under special circumstances where the banking regulatory institution of the State Council is 
not able to finish examination and make the decisi on on whether or not to approve the preparations for 
establishment within the period as previously prescr ibed, the period may be extended appropriately 
and the applicant shall be informed in writing,  however, the extended period shall not exceed 3 
months. Therefore, the examination and approval process will not exceed 9 month. 
75. Could China please kindly explain some of the cautionary reasons for which the 
treatment in the regulation of the opening of bank branches is different for foreign banks? 
Answer 
As foreign banks' branches in Chin a are not Chinese legal persons, risk control is much more difficult. 
In order to protect interests of de positors and to maintain financial stability, it is necessary to stipulate 
stricter requirements for establishment of branches of foreign banks than for establishment of foreign-
invested banks. This is consistent with the prin ciple of prudential supervision and is also a common 
practice in financial regulation in most countries and regions.  
iii) Telecommunication services 
76. Would China please let us know if there ar e any plans for allowing in the future the 
establishment of joint ventures between Chinese and foreign telecommunication companies? 
Would China please let us know if there are any plans for allowing in the future the 
establishment of joint ventures between Chinese and foreign telecommunication companies?  WT/TPR/M/230/Add.1 
 Page 433 
 
 
  Answer 
Currently China allows the establishment of Ch inese-foreign joint venture telecom enterprises. 
Enterprises may make investment decisi ons according to their own situations. 
MEXICO – Part 2  
Sanitary and phytosanitary measures 
1. How does China guarantee compliance with exit sanitary requirements for products 
shipped to Mexico and what regulations apply? 
2. What regulations apply to the issuing of o fficial sanitary certification for shipments to 
Mexico and which authority regulates this activity? 
3. Who is the contact point for validating th e authenticity of sanitary documents for 
exports to Mexico, official forms a nd measures to ensure authenticity?   
4. What measures does China take when it is notified of the possible forgery of sanitary 
documents for products exported to Mexico?   
Answer 
The term "products" and "exports" are too general in Question 1-4 and it is not clear to us what they 
refer to.  More specific information is re quired before replies could be provided.  
5. How does China guarantee an equivalent level of sanitary protection to that of countries 
of destination of exports and confidence in th e import and export certification systems?   
Answer 
Please specify what the term "sanitary prot ection" refers to in this question.  
6. What procedure does the Ch inese authority follow with regard to bilateral negotiations 
with other countries concerning meat products?   
Answer 
In view of international practices and Chinese la w, Chinese authorities will consult with relevant 
authorities in an exporting country according to the following procedures:  
 1. The exporting country proposes for the e xport of meat products to China with the 
General Administration of Quality Supervis ion, Inspection and Quarantine of China 
(AQSIQ). The Chinese side will then decide  whether the access procedure should be 
initiated with reference to the epidemic situ ation of animals in the exporting country. 
If the procedure is initiated, the Chinese si de will provide the exporting country with 
Questionnaires for the Appraisal of the Sani tary Management System of the Poultry 
Meat/Pork/Beef/Mutton/Deer Meat Exporting Country ; 
 2. The exporting country provides relevant technical materials, including laws and 
regulations of veterinarian sanitation and public health, relevant organizations, 
veterinarian service system, quality mana gement system, product processing method, WT/TPR/M/230/Add.1 
Page 434  
 
  safety and health control system, residue monitoring system, and animal epidemic test 
and monitoring conditions; 
 3. The Chinese side will conduct risk anal ysis and appraisal based on the official 
materials provided by the exporting country. If it is concluded that the risk of animal-
derived food of the exporting country is within the acceptable limit of the Chinese 
side, an expert team will be sent to the exporting country for field investigation;  
 4. The two parties will consult with each other regarding the content of the sanitary 
agreement on the inspection and quarantine of animal-derived food to be exported to 
China. The two parties shall sign the agreement and confirm the content and sample copy of the sanitary certificate;  
 5. The Chinese side will register companies of the exporting country which would 
export animal-derived food to China according to the Provisions on the 
Administration of the Registration of Foreign Productive Enterprises of Imported 
Food  (AQSIQ Decree No.16 of 2002). In the meantime, the exporting country should 
provide AQSIQ with such information as product varieties and annual production 
capacity (in metric tons) etc of the compan ies registered with China. The companies 
registered with China will then be adde d into the List of Countries and Regions 
Permitted for Exporting Meat Products to Ch ina and the Varieties and Uses of the 
Meat Products and will be publicized at th e website of AQSIQ before they finally 
export to China. 
7. What type of product requires an  import and export licence?   
Answer 
We understand that the license mentioned by Mexico here refers to quarantine license. According to 
relevant regulations of China on inspection a nd quarantine, the quarantine license for imported 
animals and plants applies to imported fruits, s oybean, grains, tobaccos, reproduction materials of 
animals and plants, and animals and animal products.  
8. What are the necessary formalities and which authorities have to be contacted to obtain 
an import and/or export licence?   
Answer 
We understand that the license mentioned by Mexico here refers to quarantine license. Prior to the 
signing of a contract, the importer shall apply fo r the quarantine license with local entry-exit 
inspection and quarantine department. The applicati on shall then be forwarde d to AQSIQ for approval 
after being examined by the local entry- exit inspection and quarantine department. 
9. How is a licence for the export of certain products to China renewed?   
Answer 
We understand that the license mentioned by Mexico here refers to quarantine license. The license 
will be effective for six months. The license is applied for and processed online. The relevant 
authority shall give reply within 20 working days after receiving the application from the importer. 
10. How does state trading work specifically in relation to agricultural products?    WT/TPR/M/230/Add.1 
 Page 435 
 
 
  Answer 
There are no other special sanitary or phyto sanitary measures for state trading products. 
11. How is the automatic licence obtained to ex port poultry and which authorities issue the 
licence?   
Answer We understand that the license mentioned by Mexico  here refers to quarantine license. After the 
access procedures mentioned in the answer to Ques tion 6 are completed, the Chinese importer shall 
file for registration for import of  meat products according to the Measures on the Administration of 
the Inspection and Quarantine of Meat Products at Entry and Exit  (AQSIQ Decree No.26 of 2002) so 
as to import meat products from the registered co mpanies of the exporting country and obtain the 
quarantine license for the entry of animals and plan ts. The quarantine license for the entry of animals 
and plants are issued by the entry-exit in spection and quarantine authority of China. 
12. What is the general procedure for verifyin g the safety of agricultural products?   
Answer 
The importer or agent shall apply for inspection w ith the inspection and quarantine authority at the 
ports and provide relevant materials. The insp ection and quarantine authority shall examine the 
documents for verification, conduct on-site inspecti on and send samples to labs for testing. The goods 
shall be released after the above inspection procedures are completed. 
13. From where and how can the new food safe ty standards which have apparently entered 
into force be obtained?   
Answer The latest food safety standards are available at the website of Ministry of Health 
http://www.moh.gov.cn.  
14. What are the animal health requirements for exporting poultry?   
Answer 
According to relevant laws and re gulations of China, the animal health requirements for poultry and 
poultry products to be exported to China sh all include but not limited to the followings:  
 1. The exporting country has established a co mplete veterinarian public health service 
system. China will conduct appraisal according to relevant provisions of OIE.  
 2. The exporting country confirms that there is no avian flu or Newcastle disease in its 
territory.  
 3. The live poultry for processing poultry meat  and poultry products to be exported to 
China shall come from farms without infec tious bursal disease, Marek's disease, avian 
mycoplasmosis, avian chlamydiosis,  fowl typhoid, avian pullorum, avian infectious 
bronchitis, infectious laryngotracheitis, avia n tuberculosis and fowl cholera in the 
most recent six months.  WT/TPR/M/230/Add.1 
Page 436  
 
   4. The live poultry for processing poultry meat  and poultry products to be exported to 
China shall come from farms which have not been restricted or monitored due to the 
occurrence of poultry diseases required to be reported as specified by OIE in the most recent six months. 
 5. The result of monitoring according to the national residue monitoring scheme of the 
exporting country shows that the poultry produced there does not have residues of 
drugs, chemicals or other toxic or hazardous substances harmful to human health.  
 6. The pre-slaughter and post-slaughter inspections and quarantines indicate that all 
slaughtered poultry are healthy without any symptom of infectious diseases, and their bodies and viscera do not have pathological ch anges; the residue of veterinary drugs, 
pesticides, heavy metals and other toxic and hazardous substances are within the 
upper limits of residues specified in the standards of China and the exporting country as well as international standards; the poultry is processed under the HACCP-based 
quality control system supervised by the authority of exporting country, and has not been contaminated by causative organisms and meets relevant regulations of China 
and the exporting country on organisms; th e poultry is sanitary and safe and suitable 
for people to eat. 
15. What products are listed in the Catal ogue of Entry-Exit Commodities Subject to 
Inspection and Quarantine?   
Answer 
According to the Law on Import and Export Commodity Inspection  and its implementing rules, 
AQSIA is responsible for promulgating and adjusting the Catalogue of Import and Export 
Commodities Subject to Inspection and Quarantine  in conformity with the principles of protecting the 
health and safety of human beings, protecting the lif e and health of animals or plants, protecting the 
environment, preventing frauds and safe guarding national security. In the 2010 Catalogue , there are 
3,921 HS tariff lines subject to import inspection a nd quarantine and 4,293 HS tariff lines subject to 
export inspection and quarantine. The product lists ar e available at the official website of AQSIQ 
http://www.aqsiq.gov.cn/zwgk/jlgg/ lhgg/200912/ t2 0091231_133945.htm.    
16. What does the inspection and quarantine process entail?   
Answer 
The importer or agent shall apply for inspection w ith the inspection and quarantine authority at the 
ports and provide relevant materials. The insp ection and quarantine authority shall examine the 
documents for verification, conduct on-site inspecti on and send samples to labs for testing. The goods 
shall be released after passing the above inspection procedures. 
17. What products are not listed in the en try-exit catalogue but may be subject to 
inspection?   
Answer For products not listed in the Catalogue of Import and Export Commodities Subject to Inspection and 
Quarantine , sample inspections may be conducted with th e focus on those products which are related 
to safety, health and environment protection, which are frequently complained by domestic and 
overseas consumers, which have a relatively large nu mber of goods returns, which have resulted in  WT/TPR/M/230/Add.1 
 Page 437 
 
 
  serious quality accidents and which have to meet new special technical requirements in China and 
abroad. 
18. Which pests are covered by the quara ntine measures for plant products?   
Answer 
The quarantine measures apply to plants, plant product s, containers, transportation tools, passenger's 
belongings, mailed articles and other goods and packing that may carry harmful organisms. 
19. What requirements must be met for AQSI Q to allow an enterprise to come under the 
direct release system? 
Answer 
Regarding the specific provisions on direct release system, please refer to the Notice on Implementing 
the Inspection and Quarantine Direct Rele ase System of Import and Export Goods issued by AQSIQ 
on 18 July 2008 (AQSIQ Notice No. 82 of 2008) at the official website of AQSIQ  http://www.aqsiq.gov.cn/zwgk/ jlgg/zj gg/2008/200807/t200 80721_82622.htm. 
20. Please explain how this entry/exit inspectio n of products listed in the Catalogue of 
Entry-Exit Commodities Subject to Inspection and Qu arantine is carried out, considering that a 
product is normally subject to only one inspection and not two?   
Answer 
The importer or agent shall apply for inspection w ith the inspection and quarantine authority at the 
ports and provide relevant materials. The insp ection and quarantine authority shall examine the 
documents for verification, conduct on-site inspecti on and send samples to labs for testing. The goods 
shall be released after passing the above inspection procedures. 
21. Has China established phytosanitary measures that are stricter than those stipulated in 
the relevant international rules, guidelines or reco mmendations and, if so, what is the scientific 
justification for doing so?   
Answer 
No. 22. If our phytosanitary measures differ from those of China with regard to exports, how 
does China consider that our country could demons trate objectively that the appropriate level 
of phytosanitary protection has been en sured and thus achieve equivalence?   
Answer 
According to the principle of equivalence as seen  in the SPS Agreement, if the exporting country can 
provide relevant materials in accordance with releva nt standards of international organizations to 
prove that its measures meet the phytosanitary prot ection level of China, China will consider to accept 
these measures.  
23. Are the Chinese laboratories which diagnose plant pests approved by the National Plant 
Protection Organization (NPPO) and, if so, what procedure has to be followed by these bodies to 
obtain such approval?   WT/TPR/M/230/Add.1 
Page 438  
 
  Answer 
The laboratories engaged in pest diagnosis for im port and export commodities shall be approved by 
AQSIQ. The laboratories shall have requi red professional personnel and equipment. 
On what basis may products not listed in the Catalogue be subject to entry/exit inspection (if it 
is assumed that they are not subject to compul sory inspection) and may spot checks be carried 
out on grounds of safety, sanitary and environmen tal protection?  On this issue, what are the 
safety, sanitary and environmental problems th at China mentions given that complaints are 
known to have been made by users?    
Answer 
According to the Law on Import and Export Commodity Inspection  and its implementing rules, 
AQSIA is responsible for promulgating and adjusting the Catalogue of Import and Export 
Commodities Subject to Inspection and Quarantine  in conformity with the principles of protecting the 
health and safety of human beings, protecting the lif e and health of animals or plants, protecting the 
environment, preventing frauds and safeguarding national security. For products not listed in the 
Catalogue , sample inspections may be conducted with th e focus on those products which are related 
to safety, health and environment protection, which are frequently complained by domestic and 
overseas consumers, which have a relatively large nu mber of goods returns, which have resulted in 
serious quality accidents and which have to meet new special technical requirements in China and 
abroad. AQSIQ will decide, adjust and publish th e extra-Catalogue import and export commodities 
subject to sample inspection and may publish sam ple inspection results, announce alerts, take 
necessary preventive measures or report the sample inspection results to relevant departments. 
24. What proof does China require to show that  Mexico has pest or disease-free areas and 
areas of low pest or disease prevalence and that this is unlikely to change?   
Answer 
Relevant parties shall establish a well-targeted disease prevention and control system and provide 
relevant disease monitoring, investigation and test  information and results according to relevant 
standards promulgated by in ternational organizations.   
25. What is China's service for providing in formation on and responses to requests or 
situations of a phytosanitary nature, such as  the adoption of new regulations, control and 
inspection procedures, and production and quarantine systems, and how does the service 
operate?   
Answer The WTO/TBT-SPS Notification and Enquiry Centre under AQSIQ is responsible for the service in 
this respect. Besides, enquiries may also be made to China WTO Notification and Enquiry Centre established in the Ministry of Commerce (MOFCOM). The WTO/TBT-SPS Notification and Enquiry Centre has been notified under the SPS Agreement and TBT Agreement. It performs its functions 
according to the requirements of the two Agreements. 
26. What are China's main regulated pests, of  potential phytosanitary risk to Mexico?  
What are China's national strategies for det ecting pests of quarantine importance?     WT/TPR/M/230/Add.1 
 Page 439 
 
 
  Answer 
China has established a relatively complete p est prevention and control system. China has 
promulgated well-targeted risk management meas ures according to the inspection and quarantine 
requirements of Mexico to ensure quality safety of the export products.    
27. What is the deadline for publication of new regulations in China's official journal and 
what is the applicable procedure?   
Answer 
On this question and other questions  concerning legislative procedures of China, Mexico is suggested 
to consult the Legislation Law , the Regulations on Procedures for the Formulation of Administrative 
Regulations  and the Regulations on Procedures for the Formulation of Rules . Mexico may request for 
English translations of these laws and regulati ons through the Permanent Mission of China to the 
WTO. 
28. How does China's phytosanitary  system operate, i.e. how is it structured or how is its 
NPPO organized?  Which authorities are respon sible for phytosanitary issues and what are 
their functions?   
Answer 
AQSIQ and its subordinate local entry-exit inspecti on and quarantine departme nts are responsible for 
the quarantine of animals and plants at entry an d exit, while Ministry of Agriculture and State 
Forestry Administration are responsible for the prev ention and control of domestic animal and plant 
epidemics. 
29. Does China have areas considered as posing  a phytosanitary risk, either on account of 
the presence of quarantine pests or because the se are currently under official control and/or in 
the process of eradication?   
Answer 
China conducts the quarantine for export plants and plant products strictly according to the quarantine 
requirements of the importing country to ensure th at its exported plants and plant products do not 
contain pests concerned by the importing country. 
30. With which countries does China have bilat eral international cooperation protocols and, 
if so, which products do they cover?   
Answer 
China has concluded bilateral animals and plants quarantine agreements w ith many countries and 
regions, covering fruits, grains, an imals and reproduction materials. 
How are import permits processed and how long  does it take for them to be issued?   
Answer 
We understand that the license mentioned by Mexico here refers to quarantine license. Prior to the 
signing of a contract, the importer shall apply fo r the quarantine license with local entry-exit 
inspection and quarantine department. The applicati on shall then be forwarde d to AQSIQ for approval WT/TPR/M/230/Add.1 
Page 440  
 
  after being examined by the local entry-exit inspec tion and quarantine department. The license will be 
effective for six months. The license is applied for and processed online. The relevant authority shall 
give reply within 20 working days after receiving the application from the importer. 
31. Does China have a database where its counterparts can view the phytosanitary 
requirements for importing plants, pl ant products and by-products?   
Answer 
China has basically established a database of laws, regulations and rules concerning the quarantine of 
entry and exit of animals and plants, which is also  continuous improved and up dated. Relevant parties 
may access the database through the website of AQSIQ. 
32. Considering the vast expanse of Chinese territory, how do China's central and 
35 provincial inspection and quarantine offices communicate and exchange information? 
Answer 
The central and local inspection and quarantine au thorities have smooth communications with various 
channels and approaches. They can communicate and exchange information through official 
documentation, conferences, telephones,  faxes and emails at any time. 
33. Does China have quarantine treatment enterp rises and how do they operate?  How often 
are they subject to inspection?   
Answer 
The quarantine treatment services shall be provided by enterprises with required qualifications. They 
shall have relevant professional personnel and equipment and must be examined and certified by 
AQSIQ. They are also subject to the supervisi on and inspection of the inspection and quarantine 
authority. 
34. Who issues China's international sanitary certificates, and how is it ensured that such 
official personnel is up to date, considering that in 2005 there were 30,000 authorized inspection 
and certification officials?   
Answer The entry-exit inspection and quarantine departments are in charge of issuing quarantine certificates 
for import and export products. Provincial inspecti on and quarantine departments are responsible for 
the assessment, training and update of authorized  inspection officials within their jurisdictions. 
ECUADOR – Part 1
 
Informe de la Secretaría WT/TPR/S/230 
Report by the Secretariat WT/TPR/S/230 
 
III. P OLÍTICAS COMERCIALES , POR MEDIDAS  
III. T RADE POLICIES AND PRACTICES BY MEASURE   WT/TPR/M/230/Add.1 
 Page 441 
 
 
  (1) I NTRODUCTION  
(1) I NTRODUCCIÓN  
En el párrafo 1 la Secretaría anota que China ha ma ntenido una estrategia de apertura a largo plazo y 
la tendencia de los aranceles sigue siendo descendente.  No obstante de lo anterior, China utiliza varios 
medios (incluidos obstáculos arancelarios y no aran celarios, restricciones a la exportación y propiedad 
estatal) para proporcionar "orientación" sobre la asignación de recursos.  
In paragraph 1 the Secretariat notes that China has continued its long-term strategy of opening its 
economy and that the trend in tariffs remains dow nward.  Nonetheless, China uses various means 
(including tariff and non-tariff barrier s, export restraints, and state-ow nership) to provide "guidance" 
on the allocation of resources. 
1. ¿Cuáles son las razones para  mantener este tipo de medidas que resultarían contrarias a 
la liberalización del comercio  y que podría n generar un efecto distorsionador en las 
importaciones y consecuentemente en el flujo de libre competencia interna? 
What are the reasons for maintaining measures such as these which deter trade liberalization 
and which could have a distorting effect on impo rts and therefore on the flow of free domestic 
competition? 
2. ¿Ha considerado el Gobierno de China establecer un plazo eliminar este tipo de 
medidas? 
Has the Government of China considered setting  a deadline for eliminating such measures?  
Paragraph 2 indicates that China's tariff could be complex, as its applied MFN tariff, for 
example, contains 60 different ad valorem  rates. 
Answer (1-2) 
The reason for the so-called "guidance"  in the  Secretariat's report is that China's industries are facing 
great challenges of phasing out backward produc tion capacities, promoting energy saving and 
consumption reduction, en hancing environmental protection, promoting competition and accelerating 
technological and industrial upgrading. Therefore,  the Chinese Government may put forward some 
macro guiding opinions on the development of certain industries.  In this process, China is attaching 
great importance to the consistency of these guiding  opinions with the multilateral rules, as well as the 
measures taken for the implementation of these guiding opinions. On specific is sues that may arise in 
this regard, China would deal with them based on WTO rules. 
En el párrafo 2 se indica que los aranceles de Chin a pueden ser complejos, puesto que, por ejemplo, el 
arancel NMF aplicado incluye 60 tipos ad valorem  diferentes. 
Paragraph 2 indicates that China's tariff could be complex, as its applied MFN tariff, for example, 
contains 60 different ad valorem  rates. 
3. ¿Podría el Gobierno de China brindar info rmación detallada acerca de las modalidades 
de  aplicación de estos diferentes tipos de aranceles? ¿Cuáles son los objetivos específicos que 
persiguen? 
Could the Government of China kindly provide de tailed information on the procedures for the 
application of these various tariff rates?  Wh at are the specific objectives being pursued? WT/TPR/M/230/Add.1 
Page 442  
 
  Answer 
The 56 different ad valorem  rates are consolidated results of the bilateral tariff negotiations held 
between China and WTO members when China en tered into WTO. Most of the 56 different ad 
valorem  rates are the final bound rates committed by China. China hopes that the Secretariat and 
WTO members would understand the historical background as to why China is currently applying 
different MFN rates in such a range.  
En el párrafo 3 se indica que China todavía utiliza el  comercio de Estado para  gestionar determinadas 
importaciones y exportaciones. 
Paragraph 3 indicates that China still uses state tradi ng to manage trade in certain imports and exports. 
4. ¿Cuáles son estas empresas del Estado, en  qué sectores productivos operan y cuál es el 
porcentaje de la producción nacional que representarían? 
Which state enterprises are these, in which productive sectors do they operate and what 
percentage of domestic production do they account for? 
Answer 
For state trading, Ecuador may consult relevant content in the Accession Protocol of China and the 
Working Report on China's Accession, in particular  Annex 2 of the Accession Protocol. China has 
also submitted STR notifications after accessi on, which include G/STR/N/7/CHN, G/STR/N/8/CHN, 
G/STR/N/9/CHN/Add.1. China is now revising the notifications and will submit a new STR 
notification to the WTO in the near future. 
El párrafo 6 se refiere a los impuestos y las d esgravaciones del IVA aplicados a la exportación. 
Paragraph 6 refers to export ta xes and VAT rebates on exports. 
5. ¿Cuáles son los requisitos para que una empresa exportadora nacional o extranjera, 
independientemente de su actividad pr oductiva, se acoja a estos beneficios? 
What requirements must be met for a national or  foreign export enterprise, regardless of its 
productive activity, to be granted these benefits? 
6. ¿Cuando se habla de desgravaciones de IVA, se hace referencia a un mecanismo de 
devolución de este impuesto indirecto? Se agradecerí a mayor explicación de este componente.  
With regard to VAT rebates, is this a refund me chanism for this indirect tax?  Please provide 
further details about this component. 
Answer (5-6) 
VAT rebate on exports is an internationally preva iling practice. It means that for goods exported, the 
VAT that has been actually paid in domestic produc tion and circulation stages will be returned. It is 
not a tax incentive. For all enterprises, whether dom estic or foreign-invested ones, as long as their 
products are exported, the VATs actually paid in the domestic production and circulation stages of 
these products would be returned.  WT/TPR/M/230/Add.1 
 Page 443 
 
 
  De acuerdo al párrafo 7 ha tenido lugar una tran sformación del IVA de un impuesto basado en la 
producción en un impuesto basado en el consumo, con el fin de simplificar la estructura impositiva de 
China, haciéndola más neutral por lo que respecta a la inversión. 
According to paragraph 7, VAT has been transformed from a production-based to a 
consumption-based tax, with a view to simplifying China's tax structure and rendering it more neutral 
as far as investment is concerned. 
7. ¿Podría proporcionar mayor información acerca de la manera en la que dicha 
transformación se lleva a cabo? 
Please provide further information on how this transformation is being carried out. 
Answer As to the VAT, China launched a reform in 2009.  As a result, the VAT system has changed from 
production-based to consumption-based. The main  elements of the reform were that, from 
1 January 2009 on, with the precondition that the current VAT rates remain unchanged, where the 
taxpayer throughout the nation (irrespective of region s and industries) has paid VAT for the purchase 
of capital equipment, the input VAT can be offset against the output VAT. If the input VAT is not yet 
fully offset, the balances can be carried forward for use in future periods. Meanwhile, as a supporting 
measure to the reform, the levying rate for small- scale taxpayers is uniformly lowered to 3%. For 
more detailed information, please refer to the Interim Regulations on Value Added Tax  (Decree 
No. 538 of the State Council) and its implementing rules. 
Según el párrafo 8 las empresas de propiedad estatal  se han beneficiado desp roporcionadamente de las 
medidas gubernamentales de estímulo económico para impulsar la economía. 
According to paragraph 8, state- owned enterprises (SOEs) have b een benefiting disproportionately 
from the Government's economic stimul us measures to boost the economy. 
8. ¿Podría precisar cuáles son los sectores econó micos más beneficiados de dichas medidas 
y en dónde incursionan las empresas estatales? 
Please specify the economic sectors which have benefited most from these measures and which 
are penetrated by State enterprises. 
Answer 
China does not agree to the view in the Secretaria t's Report, as China's economic stimulus plans are 
not targeted at certain types of enterprises, and th e government investments have been mainly put in 
fields relating to people's livelihood. In the process of SOEs reform, SOEs are retreating from general 
competitive industries. In addition, governments at a ll levels have also adpoted a series of policies and 
measures to help medium-sized and small enterpris es and private enterprises to address the impact of 
the financial crisis, including to ease the financi ng difficulties and to redu ce enterprises' burdens. 
Therefore no specific SOEs in no specific industr ies benefit specially from the economic stimulus 
plans.  
9. ¿Se podría catalogar como subsidios los privilegios exclusivos y especiales que el 
Gobierno de China otorga a las empresas de propiedad estatal? 
Could the exclusive and special privileges granted by the Government of China to state-owned 
enterprises be classified as subsidies? WT/TPR/M/230/Add.1 
Page 444  
 
  Answer 
With respect to China's subsidies, Ecuador may cons ult relevant content in the Accession Protocol of 
China and the Working Report on China's Accession, in  particular Annex 5 of the Accession Protocol. 
China has also submitted a subsidies notificati on after accession, namely G/SCM/N/123/CHN. China 
is now revising the notification and will subm it a new one to the WTO in the near future. 
10. ¿Existe compatibilidad con el  Artículo XVII del GATT de 1994 en lo que se relaciona a 
las actividades de las empresas comerciales de l Estado y el Entendimiento Relativo a la 
Interpretación de éste artículo del GATT de 1994? 
Are the activities of state-trad ing enterprises consistent with  Article XVII of the GATT 1994 
and the Understanding on the Interpretation of Article XVII of the GATT 1994? 
Answer 
State-owned enterprises and state trading are different  concepts. China's state trading administration is 
consistent with Article 17 of GATT 1994, the Unde rstanding on the Interpretation of Article XVII of 
the GATT 1994, as well as the commitments in Chin a's Accession Protocol and the Working Party 
Report.  
2) M
EDIDAS QUE AFECTAN DIRECTAMENTE A LAS IMPORTACIONES  
2) MEASURES DIRECTLY AFFECTING IMPORTS ii) Tariffs a) Panorama general  a) Overview 
El párrafo 17 se refiere a los distitnos tipos arancelarios aplicados por China. Paragraph 17 refers to China's various applied tariff rates. 
11. ¿Ha considerado el Gobierno de China la adopción de un método más sencillo para la 
aplicación de estas modalidades de aranceles con estructura diferente de los normalmente utilizados por el resto de países? 
Has the Government of China considered adopting  a more straightforward method for applying 
these tariffs which are structured differently fr om those normally used by other countries? 
Answer 
China believes that its tariff system is not complicat ed, and at this stage there is no plan to make 
major changes to the system. 
b) Tipos arancelarios NMF aplicados 
b) MFN tariff rates 
Tipos arancelarios NMF aplicados   
Applied MFN tariff rates 
Los párrafos 19 y 20 se refieren a los distintos tipos arancelarios NMF aplicados por China. 
Paragraphs 19 and 20 refer to China' s various applied MFN tariff rates.  WT/TPR/M/230/Add.1 
 Page 445 
 
 
  12. ¿Podría el Gobierno de China brindar información detallada sobre  estas   
peculiaridades de aplicación de aranceles? ¿Tiene  previsto unificar los aranceles ad-valorem en 
tarifas únicas? 
Could the Government of China kindly provide  detailed information on these peculiarities in 
the application of tariffs?  Does it plan to unify the ad valorem  tariffs as single tariffs? 
Answer 
At present, import tariff rates are applied by way of ad valorem  duty, specific duty, compound duty, 
alternative duty and sliding duty. For specific products to which they are applied, please refer to the  
Customs Tariff of Import and Export of the People' s Republic of China 2010. China has no plan at 
this stage to impose a unified ad valorem  tax. 
iii) Impuestos indirectos que afectan a las importaciones  
iii) Indirect taxes affecting imports 
En el párrafo 29 se alude al pago del IVA para las importaciones de productos agrícolas básicos, 
exceptuando a los vendidos por los agricultores a los consumidores, por fines de simplificación 
administrativa. 
Paragraph 29 refers to the paym ent of VAT on imports of primary agricultural products, excluding 
those sold by farmers directly to consum ers on grounds of administrative simplicity. 
13. ¿Cuál sería el fundamento legal en el marco de la normativa de la OMC que justifique 
la aplicación de tal exención? 
What legal basis is there within the framework of WTO law to justify the application of this 
exemption? 
Answer 
Regarding this policy, China has made explanation and clarifications for several times. In summary, 
we have the following points to make. 
First of all, China has a huge number of small farmers across the country, which makes it impossible 
to conduct accounting and tax filing. In other words,  to levy value-added tax upon them is infeasible 
and uneconomical because of the huge administrativ e cost. This is the fundamental reason behind the 
policy.  
Second, in China the agricultural production is ma inly based on household operation. The sales scale 
is very small. The VAT exemption is applied only to farmers who sell their own products like a 
kilogram of potatoes in an open air market. This is  completely different from the import of products in 
bulk. Their VAT policies are not comparable.  
Third, as far as we understand, other members with  a VAT system also seem to exempt VAT from 
farmers who sell their own products, while levy ing tax over imported agricultural products.  
Fourth, even if we apply VAT over these farmers,  we would adopt a policy that would establish a 
commercially-meaningful threshold like in other countries. Most farmers would fall below the 
threshold. The real effect would be the same as the current policy.  
Therefore, China does not believe the current polic y is not in compliance with its WTO obligations. WT/TPR/M/230/Add.1 
Page 446  
 
  v) Comercio de Estado  
v) State Trading 
En el párrafo 36 se indica que virtud de la Ley de  Comercio Exterior (2004) , determinados productos 
pueden ser objeto de comercio de Estado, entre otras cosas para asegurar la estabilidad del suministro 
interno, estabilizar los precios, salvaguardar la i nocuidad de los alimentos y proteger el medio 
ambiente y los recursos agotables" e informa sobre la nómina de prod uctos importados por las 
empresas comerciales del Estado. 
Paragraph 36 indicates that "under the Foreign Trade Law (2004), the State may subject certain goods 
to state trading, including to ensure stable domest ic supply, stabilize prices, safeguard food safety, and 
protect the environment and exhaustible resources" and lists the products imported by state-trading 
enterprises (STEs). 
14. ¿La intensidad en el uso de comercio de  Estado ha convertido a estas empresas en 
monopolios que influyen en la libre competencia?  
Has the intensive use of state trading resulted in these enterprises having monopolies which 
affect free competition? 
Answer 
As to the products whose import is currently subject  to state trading administration,  namely wheat, 
corn, rice, sugar, cotton, fertilizers, crude oil, re fined oil and tobacco as set out in Annex 2A1 to 
China's Accession Protocol, the annual tariff quotas fo r wheat, corn, rice, sugar, cotton, urea, DAP 
and NPK fertilizers all involve part of non-state trading quotas. Enterprises having trading rights 
through registration may engage in this part of non-state trading bu siness if they meet the conditions 
set out in the announcement annually released fo r the quota volumes and the ways for quota 
allocation.  
Regarding import of crude oil and refined oil, en terprises having trading rights through registration 
may engage in this part of non-state trading busin ess after they file record in accordance with the Trial 
Measures for the State Trading Administration of the Import of Crude Oil, Refined Oil and Fertilizers  
(Decree No. 27 of 2002 of the Ministry of Fo reign Trade and Economic Cooperation) and the 
Announcement on Application Conditions, Application Materials and Application Procedures for 
Qualifciation Record Filing of Non-State Trading En terprise for Import of Crude Oil, Refined Oil, 
and Fertilizer  (Announcement No. 19 of 2002 of the Ministry of Foreign Trade and Economic 
Cooperation) if they meet the conditions set out  in the announcement annually released for the non-
state trading volumes and application procedures.  
Thus, state trading enterprises do not constitute a monopoly that may affect competition.   
vii) Normas y otras prescripciones técnicas 
vii) Standards and other technical requirements 
Normas y reglamentos técnicos 
Standards and technical regulations 
En el párrafo 43 se señala la preocupación expr esada en el Comité OTC acerca de la falta de 
comunicación con debida antelación de los cambios a las normas voluntarias y obligatorias. 
Paragraph 43 refers to the concerns raised in th e TBT Committee about the fact that changes to 
voluntary and mandatory standards have not been duly notified in advance.  WT/TPR/M/230/Add.1 
 Page 447 
 
 
  15. ¿Podría explicar el Gobierno de China la s razones por las cuales no ha realizado las 
notificaciones en los plazos adecuados al Comité OTC? 
Could the Government of China kindly explain why it has failed to notify the TBT Committee 
of such changes within the appropriate time-frames? 
Answer Generally speaking, China has been doing fairly we ll in its notifictions to the TBT Committee. Since 
the entry into the WTO, China has seriously fulf illed the transparency obligations under the TBT 
Agreement and has notified over 740 TBT measures so  far. However, there was some delay in the 
notifications of a few specific measures. China will ma ke efforts in the future to further improve in 
this respect. 
 
b) Medidas sanitarias y fitosanitarias 
b) Sanitary and phytosanitary measures (SPS) 
En el párrafo 49 se resalta la preocupación expresada en el Comité MSF ante la falta de notificación 
de la nueva Ley sobre inocuidad de lo s alimentos antes de su aplicación. 
Paragraph 49 highlights the concerns raised in the SPS Committee about the lack of notification of the 
new Food Safety Law before its implementation. 
16. ¿Podría explicar el Gobierno de China la s razones por las cuales no ha realizado la 
notificación respectiva en esta materia y, en su  caso, cuándo cumplirá con esta obligación? 
Could the Government of China kindly give the rea sons for its failure to submit a notification in 
this regard and, if applicable, indicate when it will fulfil this obligation? 
Answer 
The Food Safety Law  is based on the Food Hygiene Law  and there is no technical requirement that 
will have a major impact on international trade, ther efore, China did not submit notification before the 
Law was passed. However, after the Food Safety Law  entered into force, China timely submitted 
notifications on the 178 relevant food safety regula tions and standards based on the Law and provided 
a common period for members. 
3) M
EDIDAS QUE AFECTAN DIRECTAMENTE A LAS EXPORTACIONES  
3) M EASURES DIRECTLY AFFECTING EXPORTS  
iii) Impuestos de exportación iii) Export Taxes 
En el párrafo 76 se tratan los tipos provisionales de impuestos a la exportación. Paragraph 76 concerns in terim export tax rates. 
17. ¿Podría indicar qué acciones de hecho y derecho activarían estos impuestos 
provisionales y si existe alguna condición de me rcado por la cual son superiores a los tipos de 
impuestos legales? 
Could China kindly indicate the factual and lega l actions which would trigger these interim tax 
rates and whether there are particular market  conditions which explain why these rates are 
higher than the statutory tax rates? WT/TPR/M/230/Add.1 
Page 448  
 
  18. ¿La aplicación de este tipo de medidas se relacionaría con otras interpretativas además 
del artículo XI, con las de los artículos XII, XIII y XVIII, en donde los términos "restricciones a 
la importación" o "restricciones a la exportac ión" comprenden las restricciones aplicadas en 
relación con las transaccion es comerciales Estatales?  
Is the application of measures of this type related to other interpretations of Article XI, as well 
as of Articles XII, XIII and XVIII, on the basis of which the terms "import restrictions" and 
"export restrictions" include restrictions applied in relation to State commercial transactions? 
Answer (17-18) 
China's export measures on a few products are for the purpose of protecting environment, protecting 
human, animal or plant life or health, conserving ex haustible natural resources,  or protecting national 
security, which we believed are permitted under WTO ru les. Since the issue concerned is subject to 
the ongoing WTO dispute cases of DS394, 395 and 398 , China will provide further comments after 
the final rulings.  
viii) Comercio de Estado 
viii) State Trading 
En el párrafo 90 se señala que el comercio de Es tado que afecta a las exportaciones sólo puede ser 
realizado por empresas comerciales del Estado. 
Paragraph 90 indicates that state trading of exports must be conducted by STEs. 
19. ¿Podría el Gobierno de China indicar si el hecho de no permitir que otra empresa 
comercial, que no sea empresa comercial de Estado, realice exportacio nes de los productos 
sujetos a comercio de Estado, quebranta las dispos iciones de no discriminación contenidas en el 
Artículo XVII del GATT de 1994? 
Could the Government of China kindly indicate whether the fact that non-state-trading 
enterprises are not permitted to export products  subject to state trading violates the provisions 
on non-discrimination contained in Article XVII of the GATT 1994? 
Answer China's state trading administration is consistent with Article 17 of GATT 1994,  the Understanding on 
the Interpretation of Article XVII of the GA TT 1994, as well as the commitments in China's 
Accession Protocol and the Working Party Report.  It should be pointed out that state-owned 
enterprises and state trading are not necessarily linke d. State-owned enterprises refer to enterprises 
whose majority shares are owned by the State or ove r which the State has the controlling power. State 
trading enterprises refer to those enterprises granted with state trading qualification to engage in the 
import and/or export trade of th e products set out in Annex 2A and 2B to China's WTO Accession 
Protocol. 
ix) Promoción de las exportacion es y ayuda a la comercialización 
ix) Export facilitation and marketing assistance 
El párrafo 91 se refiere a los créditos de exportación. Paragraph 91 refers to export finance.  WT/TPR/M/230/Add.1 
 Page 449 
 
 
  20. ¿Existe alguna diferencia entre el costo de  los  créditos otorgados por el Banco EXIM y 
la banca privada de China? 
Is there a difference between the cost of finance granted by the EXIM Bank and that granted by 
private banks in China? 
Answer For the lending rates of RMB by fi nancial institutions, the People's Bank of China imposes only lower 
limit and the ceiling is removed. The lower limit is  0.9 times of the benchmark rate issued by the 
People's Bank of China. Financial institutions including commercial banks and the EXIM Bank may 
determine their lending rates by themselves as long as the rates are above the lower limit. 
4) M
EDIDAS QUE AFECTAN A LA PRODUCCIÓN Y AL COMERCIO  
4) M EASURES AFFECTING PRODUCTION AND TRADE  
i) Tributación e incentivos fiscales i) Taxation and Tax Incentives 
c) Tributación directa 
c) Direct taxation 
Impuesto sobre la renta de las personas físicas 
Individual income tax 
De acuerdo al párrafo 111 se concede una reducci ón fiscal del 10 por ciento para los dividendos 
distribuidos por empresas chinas cotizadas en bolsa. 
According to paragraph 111, a reduced tax rate of  10 per cent is imposed on the dividends distributed 
by domestically listed Chinese companies. 
21. ¿Pueden las empresas extranjeras asentadas en China acceder a este tipo de deducción 
fiscal? 
Can foreign enterprises located in Chin a access this type of tax reduction? 
Answer 
The description in paragraph 111 of  Chapter III of the Secretariat's Report concerns China's individual 
income tax system and should not be understood as a policy of enterprise income tax. China's tax laws 
stipulate that when calculating personal taxabl e income, dividends and bonuses obtained from listed 
companies by individual investors are temporarily calculated with a reduction of 50%. The dividends 
and bonuses income of foreign individuals obtained from foreign-invested enterprises are temporarily 
exempted from individual income tax. 
d) Incentivos fiscales 
d) Tax incentives 
De acuerdo al párrafo 113 se otorgan incentivos a las empresas que se han establecido en zonas 
económicas especiales. 
According to paragraph 113, incentives are given to  enterprises established in special economic zones 
(SEZs). WT/TPR/M/230/Add.1 
Page 450  
 
  22. ¿Podría detallar qué tipo de industria se bene ficia de los incentivos fiscales  otorgados en 
las zonas económicas especiales? 
Could China kindly specify the type of industry which benefits from the tax incentives granted 
in special economic zones? 
Answer For tax incentives that enterprises in Special Ec onomic Zones may enjoy, please refer to China's 
subsidy notification for 2001-2004 (G/SCM/N/123/CHN) . With the reform of China's tax system in 
the past few years, tax incentives in Special Econom ic Zones have changed much with many already 
phased out. For the latest information, please refer to the subsidy notifica tion for 2005-2008 which 
China will submit in the near future.  
iii) Empresas de propiedad estatal, empr esas privadas y gestión empresarial 
iii) State-Owned Enterprises, Private En terprises, and Corporate Governance 
Empresas de propiedad estatal 
SOEs 
En el párrafo 123 se señala que las EPE gozan de ventajas competitivas con respecto a las empresas 
privadas. 
According to paragraph 123, SOEs have co mpetitive advantages over private enterprises. 
23. ¿Cuáles son esas ventajas competitivas?  
What are these competitive advantages? 
Answer China adopts the socialist market economy system, in which SOEs and other enterprises are equal 
competitors in the market. China would develop the public sector of the economy and at the mean 
time encourage and support the development of the non- public sector, so as to form a pattern of fair 
competition and mutual promotion of various types of enterprises. 
De acuerdo al párrafo 124 la obligación de pagar di videndos reducirá la canti dad de beneficios no 
distribuidos de que dispondrán las EPE para financiar sus inversiones. 
According to paragraph 124, th e obligation to pay dividends will reduce the amount of retained 
earnings available to SOEs for financing their investments. 
24. ¿Cómo se distribuyen estos recursos a las EPE?  ¿Existe algún criterio para la asignación 
de recursos obtenido del pago de estos divide ndos  respecto de la actividad productiva o 
exportadora de las EPE? 
How are these resources distributed to SOEs?  A re there any criteria for the allocation of 
resources obtained from the payment of these divi dends relating to the production or export 
activity of SOEs?  WT/TPR/M/230/Add.1 
 Page 451 
 
 
  Answer 
The Secretariat Report is inaccurate in certain statement in paragraph 124. According to the Opinions 
of the State Council on the Pilot Implementa tion of the State Capital Operating Budget , the state 
capital operating budget refers to the income and expenditure budget of the State as the owner to 
legally receive and distribute the proceeds from Stat e capital. Income budget refers to the plan of the 
State to collect the proceeds of State capital from enterprises annually at a stipulated percentage; 
expenditure budget refers to the e xpenditure plan compiled by the State according to the scale of 
income of State capital operating budget and the re quirement of national economic growth. Income 
budget includes profits turned over to the State by  State-owned enterprises, bonuses and dividends 
received from State-owned shares (equities), income from the transfer of State-owned property 
(including State-owned shares) of an enterprise and also income from liquidations. Expenditure 
budget shall be arranged and determin ed according to the macroeconomic policies of the State and the 
tasks of the reform and development of State-owne d enterprises at different stages. When necessary, 
some expenditure may be used for social security purposes and etc. Therefore, Secretariat Report is 
incorrect in stating that a certain portion of these di vidends will be "earmarked" to be re-directed back 
to SOEs. 
En el párrafo 126 se señala que el acceso al capital y su costo siguen siendo mejores para las EPE que 
para las empresas privadas nacionales 
According to paragraph 126, SOEs s till tend to have a lower cost of and better access to capital than 
domestic private enterprises. 
25. ¿Existen líneas preferenciales de crédito otorgadas por Banco del Estado o privados 
para las EPE? 
Are SOEs granted preferential credit lines by either the State Bank or private banks? 26. ¿Existen limitaciones en cuanto a los sectores productivos a los que esas Existen líneas 
preferenciales de crédito otorgadas deban ir dirigidas? 
Are there restrictions with regard to the producti ve sectors targeted by these preferential credit 
lines? 
Answer (25-26) 
After years of continuous reform of China's banking sector, both State-owned commercial banks and 
other commercial banks have already become i ndependent economic entities operating at their own 
risks with independent decision-making powers. Thei r lending criteria when deciding whether to grant 
a loan or not are mainly dependent upon whether the enterprises have sound solvency situation and 
good corporate credit etc, rather than whether these enterprises are state-owned or private ones. 
IV. P
OLÍTICAS COMERCIALES , POR SECTORES  
IV. T RADE POLICIES BY SECTOR  
INTRODUCCIÓN  
INTRODUCTION  
Los párrafos 2 y 3 se refieren a la intervención del G obierno de China en el sector agrícola, a través de 
la implementación de precios orie ntados por el Gobierno", y en el sector energético mediante la 
limitación de importaciones y regulaciones adicionales. WT/TPR/M/230/Add.1 
Page 452  
 
  Paragraphs 2 and 3 refer to the intervention of th e Government of China in  the agricultural sector 
through the implementation of " government-guided prices" and in the energy sector by means of 
import restrictions and additional regulations. 
27. ¿Podría considerarse a estas medidas como  incompatibles con el Artículo XI, literal 
c) numeral i), disposición que no permite que las medidas gubernamentales tengan por efecto 
regular los precios así como tampoco la inclus ión de medidas gubernamentales que tengan por 
efecto estabilizar los precios? 
Could these measures be considered to be inconsis tent with Article XI(c)(i) which does not allow 
governmental measures which operate to regulat e prices or the inclusion of governmental 
measures which operate to stabilize prices? 
Answer 
Ecuador may have misunders tanding of this part of the Secretaria t's Report. Regarding the agriculture 
sector, China's grain market has already been libera lized with the prices decided completely by the 
market demands and supplies. The minimum purcha se prices of the government are triggered only 
when the market prices drop to such a low level that the interests of farmers will be seriously affected. 
In such case the government will purchase the agricultural products concerned at the set minimum 
purchase prices to alleviate the negative impact of the drastic prices drops on the income of farmers. If 
triggered, they will be calculated into the yellow box of the agriculture domestic support of China.  
China therefore sees no inconsistency of this pr actice with the WTO rules. Regarding the energy 
sector, trade measures in this respect are also cons istent with the commitments contained in China's 
Accession Protocol. As to Article XI mentioned in Ecuador's question, it con cerns general elimination 
of quantitative restrictions, which in China's vi ew does not seem to be related with pricing. 
2) A
GRICULTURA  
2) A GRICULTURE  
ii) Objetivos y administración de políticas ii) Policy objectives and administration 
En los párrafos 11 y 12 se tratan las subvenciones que  reciben los productores agrícolas por parte del 
Gobierno. 
Paragraphs 11 and 12 refer to the Government subsidies rece ived by agricultural producers. 
28. A la luz de la definición de subvención contenida en el artículo 1 del Acuerdo sobre 
Subvenciones y Medidas Compensatorias ¿Ha  prev isto  el Gobierno de China disminuir las  
Ayudas Internas a los Productores?  
In view of the definition of a subsidy contained in Article 1 of the Agreement on Subsidies and 
Countervailing Measures, does the Government of China plan to reduce domestic support for 
producers? 
Answer 
The Chinese government has notified the WTO its agri cultural domestic support  data for 2002-2004. 
The AMS, both product-specific and non product-specific, are within China's de minimis  limits of 
8.5%. Besides, according to our estimation based on th e data available, the AMS levels in recent years 
also did not exceed the above limit.  WT/TPR/M/230/Add.1 
 Page 453 
 
 
  iii) Instrumentos de política 
iii) Policy instruments a) Medidas en frontera a) Border measures Medidas que afectan a las importaciones 
Measures affecting imports 
En lo que se refiere a la aplicación de las "medidas en frontera",  en el párrafo 14 se manifiesta que 
"La protección varía considerablemente de un produc to a otro, y se aplican aranceles superiores al 
promedio a algunos cereales….., el azúcar….., el tabaco….. y algunas bebidas……. entre otros 
productos….".En el párrafo 17 se habla de "……ap licación de contingentes arancelarios a 45 líneas 
arancelarias a nivel de 8 dígitos del SA que compre ndían trigo, maíz, arroz, azúcar, abonos químicos, 
lana y l
ana peinada, y algodón….."…." Los productos ag rícolas sujetos al comercio de Estado 
comprenden cereales (maíz, arroz y trigo), azú car, tabaco, algodón y algunos abonos químicos.  A 
excepción del tabaco, esos productos también están su jetos a contingentes arancelarios;  una cantidad 
sustancial del contingente se asigna a empresas come rciales del Estado.  Las importaciones de tabaco 
siguen controladas por un monopolio del Estado". En  el párrafo 18 se indica "Algunas importaciones 
de productos agrícolas continúan sujetas a li cencias automáticas para supervisar las 
importaciones……" 
With regard to the application of "border measu res", paragraph 14 states that "Protection varies 
considerably from one product to anothe r, with higher-than-average tariffs on, inter alia , some cereals 
… , sugar … , tobacco … , and some beverages… ".   Paragraph 17 refers to the application of 
"tariff-rate quotas (TRQs) to 45 tariff lines at the HS eight-digit level on wheat, maize, rice, sugar, 
chemical fertilizer, wool and wool top, and cotton… ".  "Agricultural products subject to state trading 
comprise grains (corn, rice, and wheat), sugar, tob acco, cotton, and some chemical fertilizers.  With 
the exception of tobacco, these commodities are also subject to TRQs;  a substantial amount of the quotas are allocated to STEs.  Imports of tobacco remain under state monopoly."  Paragraph 18 states 
that "Some agricultural imports remain subject to automatic licensing to monitor imports… ". 
29. ¿Podría el Gobierno de China informar si tiene proyectado  eliminar estas medidas que 
constituyen obstáculos a la liberalización del comercio en el corto plazo? 
Could the Government of China kindly indicate  whether it plans to eliminate these measures 
which constitute obstacles to trade liberalization in the short term? 
Answer First of all, the import tariff rates for cereals and sugar mentioned in paragraph 14 of Chapter IV of 
the Secretariat's Report are the out-of quota rates. It is normal that the out-of-quota rates are higher 
than the average tariff rate of agricultural pr oducts, and this is fairly common in many WTO 
members. These rates therefore should not be regarded  as to reflect that China exercises a high level 
protection of its agricultural products.  
Second, the in-quota tariff rates and the out-of-quot a tariff rates that China has for the TRQ products 
(45 tariff lines at HS 8 digit level) are all deci ded in accordance with Ch ina's accession commitments. 
They do not exceed the committed level.  
Thirdly, China believes that the number of the Chin ese products subject to TRQs is very small. In 
comparison with many WTO members, both the number of the TRQ products and the tarriff rates are at a very low level, which does not c onstitute substantial trade barriers.  WT/TPR/M/230/Add.1 
Page 454  
 
  b) Medidas internas 
b) Internal measures 
De acuerdo al párrafo 23 China no ha hecho ningu na notificación al Comité de Agricultura de la 
OMC sobre el apoyo otorgado al sector agrícola dur ante el período objeto de examen, a pesar de que 
la producción agrícola está apoyada por una amp lia gama de programas, que incluyen: precios 
mínimos para los cereales;  compras por empresas comerciales del Estado;  pagos directos;  
tributación favorable;  subvenciones a los insumos;  y préstamos preferenciales. 
According to paragraph 23, China has made no notifications to the WTO Agriculture Committee 
regarding the support given to the agriculture sector during the period under review, even though agricultural production is supported by a broad range  of programmes, including:  minimum prices for 
grains;  purchases by state trading enterprises;  direct payments;  favourable taxati on;  input subsidies;  
and preferential loans. 
30. ¿Podría el Gobierno de China informar si existen razones especiales por las cuales no ha 
notificado al Comité de Agricultura la  vigencia de estos programas de apoyo? 
Could the Government of China kindly indicate wh ether there are special reasons for its failure 
to notify the Committee on Agriculture of  the validity of these support programmes? 
Answer 
China has submitted the agricultural domestic support notification for 2002-2004 to the WTO 
recently.  
Regarding the notifications for years after 2005, as Ch ina's current statistic standard is different from 
the standard required by the WTO in the notificatio n and also China reformed its budgetary subjects 
which now are quite different from the previous s ubjects, China needs more time to do the conversion 
of statistic standards and prepare the notifications. 
ECUADOR – Part 2
 
Report by the Secretariat (WT/TPR/S/230 ) 
III. T RADE POLICIES AND PRACTICES BY MEASURE  
(3) M EASURES DIRECTLY AFFECTING EXPORTS  
(iv) Tax rebates on exports 
According to paragraph 80, VAT may be rebated on  exports, although the rebate rates are, by and 
large, lower than the VAT rates actually paid. 
1. Could the Government of China please tell us whether the VAT rebate rates available to 
exporters are only allowed for certain export  sectors, and whether the percentage rebate 
allowed is the same for dom estic and foreign companies? 
Answer 
Tax rebate on exports is a policy whereby exports are exempted from or refunded for the turnover tax 
incurred in various links of produc tion and distribution within the borders of the exporting country. 
Internationally it is a common practice. In China the tax rebate policy mainly re fers to the rebate of 
VAT on exports. Except for a few stipulated products  of high pollution and energy consumption, the  WT/TPR/M/230/Add.1 
 Page 455 
 
 
  VAT rebate policy in China applies to all export pr oducts from all industrial sectors according to the 
stipulated rebate rates. The policy also appli es equally between domestic and foreign enterprises. 
IV. T RADE POLICIES BY SECTOR  
(2) A GRICULTURE  
(iii) Policy instruments 
(b) Internal measures Direct payments 
Paragraph 28 refers to direct subsidies without specifying the type of subsidies involved. 
2. Could the Government of China please explai n the type of subsidies referred to in this 
paragraph? 
Answer 
In recent years, China has further strengthened its  efforts in addressing the problems of rural areas, 
farmers and agriculture ("three agriculture-related" pr oblems) and issued a series of measures. By far, 
China has basically formed an agricultural suppor t policy system for safeguarding grain production, 
enhancing agricultural efficiency, increasing fa rmers' incomes and promoting comprehensive 
development of rural areas, which is consistent w ith the agricultural support rules of the WTO. The 
main supporting measures are direct subsidies for farmers, comprehensive direct subsidies for 
agricultural inputs, subsidies for using superior seed  varieties and subsidies for purchasing agricultural 
machinery and tools. Others include transfer paym ent for big agricultural counties and investment for 
rural infrastructure construction. Details of ma ny support measures may be found in the 2001-2004 
subsidy notification (G/SCM/N/123/CHN) submitt ed by China, and in the 2005-2008 subsidy 
notification to be submitted by China soon, updated in formation in this regard will be incorporated. In 
general, China relies more on green box measures to  support farmers, and China's agricultural support 
and protection measures have little distorting effect on trade. 
Report by the Government (WT/TPR/G/230
) 
II. G ENERAL ECONOMIC ENVIRONMENT AND POLICY DIRECTION  
(2) S TIMULUS PACKAGE IN RESPONSE TO THE GLOBAL FINANCIAL CRISIS  
(ii) Moderately easy monetary policy 
According to paragraph 20, as a response to the fina ncial crisis the People's Bank of China promptly 
adjusted policy orientation and began to implement a moderately easy monetary policy which played 
an important role in enhancing confidence, expanding demand and achieving turnaround in the 
development of the economy. 
3. Could the Government of China provide more information as to whether the 
implementation of a moderately easy mone tary policy caused by effects such like 
over-investment in property, inflation risk, banks' bad debts risk? 
Answer 
To address the impact of international financia l crisis, the Chinese Government staged economic 
stimulus plans and implemented a moderately easy monetary policy. The sust ained and rapid growth 
of monetary credit has played a significant role in expanding demand, boosting confidence and 
promoting economic recovery. In general, direction of loans is in line with the need to promote 
economic restructuring. For instance, a large proportion of loans have been used to support 
infrastructure construction and consumption upgrad ing and urbanization. Meanwhile, China Banking WT/TPR/M/230/Add.1 
Page 456  
 
  Regulatory Commission (CBRC) has been following cl osely risks that may be brought about by 
sustained and rapid credit increase, especially the impact of non-performing loans. In this regard, 
CBRC has timely taken the following measures on the basis of pre-judgment of risks: firstly, 
reminding timely of the risks in key sectors prone to risks, such as sectors with excessive production 
capacity and real estate; secondly, conducting on-spot  inspection over the risks of newly issued loans 
since the beginning of 2009 to timely correct impr oper operations of banks; th irdly, taking prudential 
and counter-cyclical supervisory measures from m acro perspective by raising the requirements on 
bank capital adequacy ratio and requiring banks to increase provisioning coverage ratio to 150% by 
the end of 2009; fourthly, releasing a series of measures and guidelines strengthening administration on fixed assets loans, working capital loans, persona l loans and project financing etc. The aforesaid 
measures have been conducive to the sustainability  of finance in supporting economic growth as well 
as the sound functioning of financial system. Be sides, China's economy is still at a stage of 
urbanization and consumption structure upgrading and is  expected to maintain a relatively fast growth 
rate within quite long period of time in future. Th e risk control capacity of financial institutions has 
improved evidently after their reforms in previ ous years. Generally speaking, credit risks are 
controllable.  
(iii) Advancing industrial restructuring 
Paragraph 23 indicates that to alleviate the diffi culties of SMEs the Chinese Government in 2009 
increased the fund for the development of SMEs from 3. 9 billion Yuan to 9.6 billion Yuan to enhance 
support to SMEs including in such areas as technological innovation and structural adjustment. 
4. Could the Government of China provide additional information on how this fund was 
used? 
Answer 
Details of the support measures of the Chinese government to SMEs, including the Development 
Fund for SMEs mentioned in the Government Re port, may be found in the 2001-2004 subsidy 
notification (G/SCM/N/123/CHN) submitted by China.  Ecuador may refer to the document for more 
information. In the 2005-2008 subsidy notifi cation to be submitted by China soon, updated 
information in this regard will be incorporated. 
(iv) Increasing consumer demand 
Paragraph 24 points out to the efforts undertaken by the Government to increase consumer spending.  
In that regard, in 2009 the Chinese central governme nt provided 32 billion Yuan for implementation 
of a series of consumption stimulus programmes. 
5. Due to the fact that the maintenance of this type of stimulus programmes requires a 
significant amount of resources, is the Govern ment of China considering the adoption of 
additional measures to foster consumer spending? 
Answer 
Domestic demand expansion is not only the fundament al point of China in handling the international 
financial crisis, but also a long-term strategic guideline for promoting sustainable and coordinated 
development of China's economy. Consumption expa nsion was an important part in the stimulus 
package of China in response to the international financial crisis. The measures, apart from those 
programs to directly promote consumption, also  include implementing a more active employment 
policy, adopting measures to increase the incomes of farmers and low-income groups in urban areas, 
and accelerating the improvement of urban and rural social security systems etc. They have achieved  WT/TPR/M/230/Add.1 
 Page 457 
 
 
  obvious effects. In 2009, China's GDP increased by 8.7%, in which 4.6% was driven by final 
consumptions. Besides, the retail sales of consum er goods increased by 15.5%. After deducting the 
price factor, the actual increase was 16.9%. Meanwhile , as stated in our Government Report, China 
still faces the reality that the per-capita national in come is still low, therefore the Chinese Government 
must make long-term and strenuous efforts to en sure continuous increase of people's income, to 
enhance the development levels of social security a nd social programs in order to finally realize the 
transformation that the role of consumption in  driving the economic growth be strengthened.  
(4) C ONTINUE TO DEEPEN THE REFORM  
(iv) Reform of state-owned enterprises and development of the non-public sector 
According to paragraph 49, in addition to the issuing of Opinions on Further Promoting the 
Development of SMEs, the State Council is studdi ng policies and measures to further encourage 
private investment. 
6. Has any evaluation been conducted on the kind of impact these policies would have in 
private investment? 
Answer The State Council promulgated Certain Opinions on Encouraging and Guiding the Healthy 
Development of Private Investment  to further widen the areas for private investment. The document is 
available at http://www.gov.cn/zwgk/2010-05/13/co ntent_1605218.htm. In promoting further the 
growth of the non-public sector, China focuses more on creation of a market environment promoting fair competition among all economic sectors, includi ng ensuring equal policy treatment in tendering 
and bidding and government proc urement, guaranteeing fair market  participation opportunities for 
non-public enterprises, reviewing laws, regulations  and policies relating to financing, foreign 
exchange administration, land use and public technical  services etc so that various production factors 
and resources are equally available to non-public en terprises for their development. Measures in this 
respect are now being staged and implemented a nd there have not been evaluation done yet. 
7. What is the percentage that SMEs occupy in China's economy? 
Answer 
For the definition of small and medium-sized en terprises (SMEs) in China, please refer to the  Interim 
Provisions on the Standards for Small and Medium-sized Enterprises  (No.143 [2003] of the former 
State Economic and Trade Commission). Ecuador may request for this rule through the Permanent 
Mission of China to the WTO. Currently economi c statistics in China cover only enterprises 
(industrial) above designated size, i.e. those with annual revenue from principal business over 5 
million Yuan, therefore a large number of SMEs are not included. It is estimated that SMEs accounts for 99% in the number of all the enterprises in Chin a, 60% in the total economy and 80% of the total 
employment. 
III. T RADE DEVELOPMENT AND TRADE POLICIES  
(1) T RADE DEVELOPMENT AND BASIC CHARACTERISTIC  
(ii) Basic characteristic of China's foreign trade 
Paragraph contains references to "processing trade" and "foreign-invested enterprises" 
8. How does the Government of China defi ne "processing trade" and "foreign-invested 
enterprises"? WT/TPR/M/230/Add.1 
Page 458  
 
  Answer 
Processing trade refers to the trade mode under which goods particularly spare parts and raw materials 
are imported in bond for the purpose of re-export after being assembled or processed in China. In this 
case the goods are under strict supervision of the Custom s so as to ensure that the final products are 
exported. If the final products are not e xported, import tariffs will be re-levied. 
Foreign-invested enterprises in China include Ch inese-foreign equity joint-venture enterprises, 
Chinese-foreign contractual joint-venture ente rprises and foreign-capital enterprise. Foreign 
companies may also set up their branches in China. For details please refer to the Company Law , the  
Law on Chinese-Foreign Equity Joint-Ventures , the Law on Chinese-Foreign Contractual Joint-
Ventures  and the Law on Foreign-Capital Enterprise  and their implementing regulations and rules. 
Ecuador may request for these laws and regulations  through the Permanent Mission of China to the 
WTO. 
(2) P
ROMOTING TRADE AND INVESTMENT  
(i) Launching the pilot programme of settlement of cross-border trade in RMB 
Paragraph 65 talks about the launch of a pilot prog ramme to settle the cross-border trade in RMB in 
Shanghai and other four cities of Guangdong Provi nce, namely Guangzhou, Shenzhen, Zhuhai and 
Dongguan. 
9. Is there any assessment on how this pilo t programme has performed and whether there 
is the intention to implement it on a nationwide basis? 
Answer To deal with global financial crisis and to prom ote the development of trade between China and its 
neighboring countries and regions, China decided in  April 2009 to launch a pilot programme of 
settlement of cross-border trade in RMB in Shangha i, and the cities of Gua ngzhou, Shenzhen, Zhuhai 
and Dongguan in the Guangdong Province. The programme so far has been going on smoothly. The channels of settlement in RMB function well a nd various lines of business are conducted in good 
order, which have simplified procedures of pilot enterprises and facilitated trade and also helped 
import and export enterprises to avoid effectively exch ange rate risks. By the end of April 2010, the 
total volume of settlement of cross-border trade in RMB has reached over RMB 30 billion.  
China would take the following steps to promot e the settlement of cross-border trade in RMB 
according to actual conditions.  
Firstly, to gradually expand the domestic pilot areas , and eliminate the restrictions on countries and 
regions that may involve in the settlement of cross- border trade in RMB to a llow enterprises to do the 
settlement with any countries or regions willing to settle in RMB. 
Secondly, to steadily explore and carry out on p ilot basis various cross-border RMB businesses like 
cross-border direct investment in RMB and trade financing in RMB in an orderly manner.  
Thirdly, to look into the request of overseas capital in  RMB to invest in domestic financial market and 
gradually promote the opening up of do mestic financial market provided that the risk is under control. 
On 17 June 2010, China further expanded the pilo t programme of cross-border trade settlement in 
RMB, and the areas in China joining the pilot pr ogramme have been expa nded from Shanghai and the 
four cities in the Guangdong Province to alto gether 20 provinces, autonomous regions and 
municipalities including Beijing, Tianjin, Inner Mongo lia, Liaoning, Shanghai, Jiangsu, Zhejiang,  WT/TPR/M/230/Add.1 
 Page 459 
 
 
  Fujian, Shandong, Hubei, Gua ngdong, Guangxi, Hainan, Chongqing , Sichuan, Yunnan, Jilin, 
Heilongjiang, Tibet, and Xinjiang etc. Meanwhile, there would be no longer restriction on overseas 
areas where cross-border trade settlement in RMB could be done. Enterprises may settle  their cross-
border trade in RMB with business partners in a ll countries and regions that are willing to accept 
RMB for settlement 
(v) Continuing to Implement the Going Global Strategy 
According to paragraph 76, by the end of 2009, Chinese enterprises had already established 
18 overseas economic and trade cooperation zones in 14 countries and regions, which facilitated 
outbound investment of Chinese enterprises, especially SMEs. 
10. What are the reasons behind focusing the benefits of these measures on SMEs? 
Answer 
Ecuador probably has a misunderstanding here. Establishment of overseas economic and trade 
cooperation zones does not focus only on the benefits for SMEs, large enterprises may also benefit. In 
view of the fact that SMEs lack experiences in overseas investment and operation and are more vulnerable to the risks and difficulties, establishment of such zones therefore would factually facilitate 
more SMEs' overseas development. 
CHILE – Part 1
 
Informe de la Secretaría  
Secretariat Report  
Resumen 
Summary 
Párrafo 16 
Paragraph 16 
China está empezando a examinar la posibilidad de  aplicar medidas internas, distintas de las 
comerciales, para preservar los recursos naturales, ahorrar energía y proteger el medio ambiente, entre 
otras, un impuesto ambiental a la producción y extra cción de recursos naturales durante el Duodécimo 
Programa Quinquenal (2011-2015).  
China is starting to consider internal measures other than trade measures to conserve natural 
resources, save energy, and protect the environment, such as an environmental tax on the production/extraction of natural resources during the 12
th Five-Year plan period (2011-2015). 
¿Podría Delegación de China informar sobre cuáles serían los sectores productivos  que 
quedarían sometidos a dicho régimen; y, si una ve z adoptado dicho sistema, se eliminarían  las 
medidas comerciales actualmente vigentes para alcanzar objetivos de ahorro de energía, 
reducción de emisiones y preservación de la naturaleza?  
Would the Chinese delegation please explain which productive sectors would be subject to this 
regime and, were it to be adopted, would the tr ade measures currently in effect to save energy, 
reduce emissions and conserve the na tural environment be abolished? WT/TPR/M/230/Add.1 
Page 460  
 
  Answer 
In pursuit of energy saving, emission cut and environm ent protection, China puts stringent restrictions 
on energy intensive, highly polluting and highly r esources-consuming sectors, as well as those sectors 
that have already featured with excessive produc tion capacity. In this respect China has adopted 
following measures: 1) endeavoring to eliminat e backward production capacity; 2) specifically 
supervising the implementation of the workplan of energy saving; 3) strict control over new projects 
featuring high pollution and high energy consum ption and those in sectors already having excessive 
capacity, and more stringent energy efficiency ap praisal and review of fixed assests investment 
projects in manufacturing; 4) promoting energy efficiency standardization of key industries and enterprises within; 5) upgrading for green techonol ogy; 6) optimizing policies favorable for green 
techonology; 7) establishing in industrial sectors of monitoring and early warning system for energy 
saving and emmission reduction and formulating emergency plan; 8) enhancing public awarenesss of 
energy saving and pollution reduction. 
With  regard to the environmental tax mentioned in the question, relevant authorities are currently 
studying on the issue, and related information will be  released at appropriate time in light of the 
progress of the work. 
S
ECCIÓN II  RÉGIMEN DE POLÍTICA COMERCIAL :  MARCO Y OBJETIVOS  
SECTION II  TRADE POLICY REGIME :  FRAMEWORK AND OBJECTIVES  
2) M ARCO INSTITUCIONAL Y JURÍDICO  
2) I NSTITUTIONAL AND LEGAL FRAMEWORK  
Párrafo 10 
Paragraph 10 
Aun cuando los centros de información y sitios We b de información se establecen en el marco de 
MOFCOM y la Administración General de Superv isión de la Calidad, Inspección y Cuarentena 
(AQSIQ). ¿Existe como una buena práctica en mate ria de transparencia que se publique además los 
Reglamentos Técnico y Procedimientos de la Evalu ación de la Conformidad en el sitio Web de la 
agencia regulatoria respectiva?  
Although enquiry points and enquiry websites are established under the MOFCOM and the General 
Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), is there a kind of good 
transparency practice whereby technical regulations and conformity assessment procedures are published on the website of the respective regulatory agency? 
¿Es a través de éste sitio web que se publican los proyectos de Reglamentos Técnicos y 
Procedimientos de Evaluación de la Conformi dad para la presentación de observaciones? ¿Se 
hace este procedimiento también por medio de la agencia reguladora respectiva?  
Is this the website on which draft technical reg ulations and conformity assessment procedures 
are published for public comment?  Is this also  done through the relevant regulatory agency? 
Answer (for the above 2 questions) 
According to Article 15 of the Regulations on Procedures for the Formulation of Rules  (State Council 
Decree No. 322), When the rules being drafted direc tly involve the immediate interests of citizens, 
legal persons or other organizati ons, and relevant organs, organiza tions or citizens hold substantive 
disagreement with the rules being drafted, these rul es shall be made public for comments; the drafting 
units may also hold hearings thereon.  WT/TPR/M/230/Add.1 
 Page 461 
 
 
  The AQSIQ has a consultation window on its website  to publish drafts of rules and regulatory 
documents for public consultation. In addition,  the portal website of the Legislative Affairs Office of 
the State Council, i.e. the China Legislative Inform ation Network System also provides a column for 
drafts of administrative regulations and rules which are open for public opinions. The website is 
http://www.chinalaw.gov.cn.  
Technical regulations of China are also publicly ava ilable at the gazette and also the official website 
of both the Standardization Administration of Ch ina, i.e http://www.sac.gov.cn, and Certification and 
Accreditation Administration of China, http://www. cnca.gov.cn. They are also available through the 
WTO/TBT Enquiry Center of China. 
Párrafo 14 
Paragraph 14 
Se hace mención que la coordinación entre el Gobierno Central y los gobiernos locales sigue 
siendo escasa y pueden existir obstáculos al  comercio interno como consecuencia del 
proteccionismo provincial. En el examen no se ha ce mención de que manera se ve afectado el 
comercio internacional ¿Existen estadísticas al  respecto? ¿Cuáles son los principales productos 
que se ven afectados por estas medidas proteccionistas?  
This paragraph states that coordination betw een central and local governments remains weak, 
and barriers to internal trade may exist as a re sult of provincial protectionism.  There is no 
mention in the Report of how this affects in ternational trade.  Are there statistics on the 
subject?  What are the main products affected by such protectionist measures? 
Answer The Chinese goverenment has been consistently dedi cated to the consolidation of a fair, open, 
competitive and unified national market, and has take n as an important task to fight back local 
protecionism in its efforts to safeguard the order of the market economy.  There is a mechanism in 
place to review and abolish local regulations and rules which are protectionist or monopolistic in 
nature and are contradictory with national laws a nd regulations. New measures in this respect also 
include enactment of the Anti-Monopoly Law , and strengthened enforcement and further improvement 
of the Pricing Law  and the Law Against Unfair Competition , as well as other legislative, judicial and 
administrative efforts.  
3) F
ORMULACIÓN , ADMINISTRACIÓN Y APLICACIÓN DE LA POLÍTICA COMERCIAL  
3) F ORMULATION , ADMINISTRATION , AND IMPLEMENTATION OF TRADE POLICY  
Párrafo 16 
Paragraph 16 
En este párrafo se hace mención a los Organismos pa rticipantes en la aplicación de la política 
comercial. ¿Son éstos además quienes participan  en el ámbito regulatorio? De ser así ¿existe 
una instancia de coordinación entre ellos?  
This paragraph mentions the agencies involved in the implementation of China's trade policy.  
Are these agencies also involved in regulatio n?  If so, is there a body responsible for 
coordinating between them? WT/TPR/M/230/Add.1 
Page 462  
 
  Answer 
Ministry of Commerce is not the government agency  responsible for the reshuffle of the government 
agencies under the State Council in 2008. If Chile is inte rested in the history of each of the reshuffles 
of the Central Government of China,  please visit http://www.gov.cn/test/2009-
01/16/content_1206928.htm. As to the specific re sponsibility and jurisdiction of each government 
ministry or commission in the implementation of tr ade policies as well as their regulation, Chile may 
visit http://www.gov.cn/gjjg/2005-08/01 /content_1 8608.htm.  Each ministry and commission is 
responsible for coordination of policies issues th at fall within its responsibility and jurisdiction. 
Coordination mechanism also exists at  the more senior State Council level. 
¿Dentro de las redistribuciones normativas en tre ministerios y organismos se establecieron 
procedimientos a favor de la transpa rencia y buenas prácticas regulatorias? 
With the reassignment of regulatory functions among ministries and agencies, have procedures 
been established to provide for transp arency and good regulatory practice? 
Answer 
China has complete and comprehensive legisla tive and administrative requirements on government 
transparency. For example, the Legislation Law , the Regulations on Procedures for the Formulation 
of Administrative Regulations , the Regulations on Procedures for the Formulation of Rules  and the 
Regulations on Submission of Regulations and Rules for the Record all contain detailed formulation 
and promulgation procedures conerni ng different types of legislation. Such systemic requirements do 
not change with the reassignment of regulat ory functions among ministries and agencies. All 
ministries and government agencies, however their functions adjusted, should  always follow such 
requirements. That said, the Chinese government has also attached great importance to the further 
enhancement of transparency a nd improvement of regulatory prac tice. In the Government Report 
China submitted for this review, the latest devel opment in this respect was mentioned, i.e. a new 
Regulations on Government Information Release  came into force on 1 May 2008. The reshuffle of the 
Central Government in 2008 also reflects the effo rts of the Chinese government to further improve 
regulatory efficiency for purpose of good regulatory practice. 
S
ECCIÓN  III  POLÍTICAS COMERCIALES , POR MEDIDAS  
SECTION III  TRADE POLICIES AND PRACTICES BY MEASURE  
(2)  ii) Aranceles 
(2)  ii) Tariffs 
Párrafo 26 
Paragraph 26 
Se señala que se aplican exenciones y reduccione s arancelarias a las mercancías importadas por 
empresas seleccionadas, perteneci entes a sectores cuyo desarrollo se promueve conforme a lo 
establecido por determinadas políticas.  Por ejemplo, aquellas que fabrican equipos para tratar la 
contaminación atmosférica pueden importar equipos para su propio uso exentos de derechos de 
importación.  
Tariff exemptions and reductions  apply to goods imported by de signated enterprises belonging to 
sectors whose development is promoted as specified in  certain policies.  For example, enterprises such 
as those manufacturing equipment for treating air pollutants may import equipment for their own use, exempt from import tariffs.  WT/TPR/M/230/Add.1 
 Page 463 
 
 
  ¿Podría la Delegación de China proporcionar m ayores antecedentes sobre la manera en que ha 
implementado dichas medidas, dado que habría ciertas limitaciones inherentes a la clasificación 
arancelaria? ¿Se cuenta con algún listado de equipo s para tratar la contaminación, clasificados 
según el sistema armonizado? ¿Cómo se otorga dicho beneficio?  
Would the Chinese delegation please provide furth er details as to how such measures have been 
implemented, in view of the fact that there appear to be certain limitations inherent in tariff 
classification?  Is there a list of equipment for trea ting air pollutants, classified according to the 
Harmonized System?  How is this benefit conferred? 
Answer 
Chile might have missed the key point of this para graph of the Secretariat Report.  The Report refers 
to the policy where an enterprise, domestic or fo reign-invested, may import equipments for its own 
use with the import tariffs exempted as long as this  enterprise is in the sectors as listed in the 
"encouraged category" of either the  Catalogue for the Guidance of Industrial Restructuring  or the  
Catalogue for the Guidance of Industries for Foreign Investment . Details of this policy may also be 
found in China's subsidy notification of G/SCM/N/123/CHN.  
Here, there are two key preconditions to be met fo r the enterprise to enjoy the tariff exemption. 
Firstly, the sector in which the enterprise invests must  either be listed in the "encouraged category" of 
the Catalogue for the Guidance of  Industrial Restructuring  or the "encouraged category" of the 
Catalogue for the Guidance of Industries for Foreign Investment . Air pollutant treating is an example 
of such a sector. Secondly, the equipment to be imported is only for the purpose of self use by the enterprise. It should be noted that the equipment to  be imported in this case does not have to be air 
pollutant cleansing related. China does not have a specific list of equipments for treating air 
pollutants.  
Adicionalmente, el Informe señala que con el fin de  reducir el consumo de energía y proteger el 
medio ambiente, el Gobierno puede no otorgar trat o preferencial a determinadas mercancías que se 
encuentran "en régimen de tráfico de perfecci onamiento".  Por tanto, su importación puede 
restringirse o prohibirse. En 2009, sobre la base de la información facilitada por las autoridades, 
279 líneas (de 8 dígitos del SA) estaban sujetas a prohibiciones de importación y otras 139 estaban 
sujetas a prohibiciones de importación y exportaci ón en régimen de tráfico de perfeccionamiento 
(sección 3), v)).  
The Report further states that in order to reduce en ergy consumption and protect the environment, the 
Government may not grant preferential treatment under  processing trade to certain goods.  Thus, such 
goods may be "restricted" or "prohibited" from bei ng imported.  In 2009, based on information from 
the authorities, 279 lines (HS 8-digit) were subject to import prohibitions a nd another 139 lines were 
subject to import and export prohibitio ns under processing trade (section (3)(v)). 
¿Podría la Delegación China proporcionar mayores antecedentes sobre el régimen de tráfico de 
perfeccionamiento y acerca de las líneas que estarían sujetas a dicho régimen?  
Would the Chinese delegation please provide further details regarding the processing trade 
system and the tariff lines subject to the system? 
Answer 
Processing trade refers to the trade mode under which goods particularly spare parts and raw materials 
are imported in bond for the purpose of re-export after being assembled or processed in China. In this 
case the goods are under strict supervision of the Custom s so as to ensure that the final products are WT/TPR/M/230/Add.1 
Page 464  
 
  exported. If the final products are not exported, impor t tariff of the goods will be levied. The fact that 
certain goods are prohibited from importation or exportation under processing trade does not 
necessarily mean that they are also  prohibited under normal trade.  
With regard to the information on the adjustment of  the lists of products subject to restriction and 
prohibition under processing trade, please visit Joint Announcement of Ministry of Commerce 
(MOFCOM) and General Administration of Customs (GAC) No. 120 of 2008 at 
http://www.mofcom.gov.cn/aarticle/b/c/200812/200 81205986024.html, and Join t Announcement of 
MOFCOM and GAC No. 121 of 2008 at h ttp://www.mofcom.gov.cn/aarticle/b/c/200812/ 
20081205986025.html. Other informati on concerning processing trade is also available at the columns 
in the official website of MOFCOM prom ulgating MOFCOM Decrees and Announcement at 
http://www.mofcom.gov.cn/aarticle/b /c/201001/ 20100106729509.html. 
(2)  vii) Normas y otras prescripciones técnicas 
(2)  vii) Standards and other technical requirements 
Párrafo 43 
Paragraph 43 
Se establece que China tiene cuatro tipo de no rmas, este sentido ¿Qué se entiende por norma 
nacional, profesional, local y empresarial?  
The Report states that China has four types of standard.  What does it mean by national, 
professional, local, and enterprise standards? 
Answer 
According to China's Standardization Law , standards in China are divi ded into national standards, 
industry standards, local standards and enterprise stan dards. For technical requirements that need to be 
unified across the country, national standards shoul d be developed. National standards shall be 
developed by the administrative department for sta ndardization under the Stat e Council. For technical 
requirements where national standards are absent but  which need to be unified within specific 
industry across the country, industry standards ma y be developed. Industry standards shall be 
developed by relevant admini strative departments under the St ate Council and filed with the 
administrative department of standardization under the State Council. After formulation and 
promulgation of national standards, industry sta ndards are abolished simultaneously. For safety and 
sanitation requirements of industrial products wher e national standards and industry standards are 
absent but which need to be unified within a provin ce, an autonomous region or a municipality, local 
standards may be established. Local standards shall be formulated by administrative departments for 
standardization of provinces, autonomous regions or municipalities and filed with the administrative 
department of standardization under the State C ouncil and other related ad ministrative departments 
under the State Council. After formulation and pr omulgation of national standards or industry 
standards, local standards are abolished simultane ously. Where there are no national standards or 
industry standards for a product produced by an ente rprise, enterprise standards should be developed 
as the basis for organization of production. Product st andards of the enterprise must be filed with the 
local government administrative departments for standardization and other relevant competent 
administrative departments. Where there are alread y national standards or industry standards, the 
State encourages enterprises to establish their own st andards more stringent than national standards or 
industry standards, which are to be applied within these enterprises. That sai d, where the formulation 
of standards is otherwise provided for by law, th e provisions of such law shall prevail. For more 
details, please refer to the website of the Standardization Administration of China at 
http://www.sac.gov.cn.  WT/TPR/M/230/Add.1 
 Page 465 
 
 
  ¿Cuál ha sido el trabajo en relación a las preo cupaciones expresadas en relación al paso de una 
norma voluntaria a obligatoria y la no comunicación de estas? ¿Se han considerado las recomendaciones propuestas en el documento G/TBT/W/300 y de qué manera?  
What has been done to address concerns regardi ng the transition from voluntary to mandatory 
standards and the fact that these have not been  communicated?  Have the recommendations put 
forward in document G/TBT/W/300 been taken into account and, if so, how? 
Answer 
Technical regulations and conformity assessmen t procedures of China are all published on the 
gazettes and official websites of competent authorities.  China will also fulfil its due obligations in line 
with the TBT Agreement.  If voluntary sectoral standards are incorporated in mandatory conformity 
assessment procedures, China will notify to the WTO according to the requirement of the TBT 
Agreement. 
Párrafo 46 
Paragraph 46 
Se menciona que el proceso de elaboración de  normas no ha cambiado sustancialmente ¿Se 
tiene planificado alguna revisión de este proceso en torno a la facilitación de la transparencia y 
las buenas prácticas de reglamentación? 
The paragraph indicates that the process of develo ping standards has not substantially changed.  
Are there any plans to review the process in the interests of facilitating transparency and good 
regulatory practice? 
Answer After China's accession to WTO, Standardizati on Administration of China (SAC) notified its 
acceptance of Code of Good Practice in Annex 3 to the TBT Agreement (G/TBT/CS/N/143). SAC 
adopted Administrative Rules for National Standardization Technical Committees to ensure the 
fairness in the standardization work in each pr ofessional technical area. The voluntary standards 
developing bodies follow the Rules for National Standardization Technical Committees in their work 
and thereby observe the Code of Good Practice in Annex 3 to the TBT Agreement. As a matter of 
fact, the Administrative Rules for National Standardization Technical Committees was revised and 
promulgated in January 2009 to promote furthe r transparency and good regulatory practice. 
¿Las empresas de propiedad extranjera ya se en cuentran participando en las actividades de 
normalización? De ser así ¿Cómo ha sido la experiencia hasta este momento? ¿Existe otra instancia donde exista un trabajo público – privado en materia regulatoria? 
Are foreign owned enterprises already participating in standardization activities?  If so, what 
experiences have been made so far?  Is there another body in which public private work is 
conducted in the regulatory sphere? 
Answer 
Foreign-owned companies have already participat ed in Chinese standard- setting process. According 
to statistics, 15% of national technical committees for specific standards have the participation of 
representatives from foreign-owned enterprises. Chin a believes that the participation of foreign-
owned enterprises in China's standard-setting is co nducive to China's standard-setting work and has 
paid much attention in this regard. The Administrative Rules for National Standardization Technical WT/TPR/M/230/Add.1 
Page 466  
 
  Committees  provides that members of the technical co mmittees shall have wide representation to 
cover enterprises, scientific and research institut es, testing agencies, higher education institutions, 
government agencies, industrial associations, cons umers and etc. The composition of the technical 
committees determines that the national standard-setti ng is the result of private-public work, and this 
is the same case also for industria l standards and local standards. 
Se menciona que el 46,5% de las normas  nacionales era equivalente a las normas 
internacionales ¿Cuál ha sido la estadística al año 2009? ¿En que sectores se puede encontrar 
esta alineación? 
It is also mentioned that 46.5 per cent of nati onal standards were equivalent to international 
standards.  What are the statistics for 2009?  In  which sectors have standards been aligned? 
Answer 
By the end of 2009, 68% of China's national standards in relevant areas are international or overseas 
advanced standards. Relevant areas refer to the standardization related areas of China that are 
corresponding with international ones, including IDTEQV or MOD.  
Párrafo 47 
Paragraph 47 
Además del Acuerdo de Reconocimiento Mutuo de APEC ¿Ha sido necesario modificaciones al 
marco legal para lograr este acuerdo? ¿Existen ot ros Acuerdo de Reconocimiento  Mutuo en los 
cuales estén participando?  
As regards the APEC MRA, was it necessary to amend the legal framework in order to reach 
this agreement?  Is China party to other MRAs? 
Answer 
At present, there are multilateral and bilateral le vels in the international mutual recognition 
framework of China. At the multi-lateral level, China is a member of IECEE-CB and ILAC Mutual 
Recognition Agreements. CCC recognizes test reports by foreign testing bodies which conform to the 
requirements of relevant international mutual reco gnition systems. At the bilateral level, China has 
signed 40 bilateral memoranda of c ooperation and agreements with 32 organizations in 23 countries 
and regions, among which 17 memoranda  are related to the international cooperation of CCC. In the 
framework of the memoranda, foreign certifi cation bodies, through cooperation with CCC 
certification bodies of China, may carry out part of  the CCC certification work. Besides, with the 
establishment of intergovernmental agreements fo r mutual recognition, foreign certification bodies 
approved by China can carry out CCC certification.  
Currently, the guideline for bilateral cooperati on is that Certification and Accreditation 
Administration of China signs framework agreemen ts on cooperation with relevant authorities of 
foreign countries, and then the technical bodies of  both countries negotiate concrete cooperation 
agreements according to the framework agreements. 
Adicionalmente nos gustaría cono cer de qué manera se realizan los procesos de consulta pública 
así como también como se realizan los Procedimie ntos de la Evaluación de la Conformidad 
(declaración del proveedor, tercera parte o ambos). 
We would also like to know how the public co nsultation process operates and how conformity 
assessment procedures are conducted (declaratio n by the supplier, third party or both).  WT/TPR/M/230/Add.1 
 Page 467 
 
 
  Answer 
For general procedural issues regard ing public consultation or conform ity assessment, please go to the 
website of China Certification and Accreditati on Administration at  http://www.cnca.gov.cn,  and 
China National Accreditation Service for Comformi ty Assessment at  www.cnas.org.cn. Regarding 
declaration by the supplier, accepting suppliers decl aration of conformity needs the guarantee from a 
series of rules and regulations. At present, conditi ons are not ripe for China to accept suppliers 
declaration of conformity. 
(4)  iii) Empresas de propiedad estatal, em presas privadas y gestión empresarial  
(4)  iii) State-owned enterprises, private enterprises, and corporate governance 
Párrafo 123 
Paragraph 123 
El Informe señala que recientemente, en respuesta a las "orientaciones" cont enidas en los Dictámenes 
del Consejo de Estado publicados en diciembre de 2006, las EPE comenzaron a retirarse de algunos 
de los sectores más competitivos, pero siguen c oncentradas en otros donde predominan los 
monopolios estatales (según las autori dades, estos últimos son los relacionados con la seguridad 
nacional y el desarrollo económico general, con inclus ión de las industrias del petróleo y el carbón).  
Agrega que gracias a la posición monopólica asociad a con estos sectores, estas EPE gozan de ventajas 
competitivas con respecto a las empresas privadas y que los beneficios de las EPE siguieron en alza (en 2009, aumentaron un 9,8 por ciento). 
The Report states that recently, "guided" by the State Council's Opinions issued in December 2006, 
SOEs have been retreating from some of the more competitive industries, but remain concentrated in 
other industries with a state monopoly (according to the authorities, these are industries related to 
national security and overall economic development, in cluding petroleum and coal).  It adds that the 
associated monopoly position gives these SOEs co mpetition advantage over private enterprises and 
that the profits of SOEs continued to rise (they increased by 9.8 per cent in 2009). 
¿Podría por favor la República Popular de China precisar cuáles serian, a su parecer, las 
ventajas competitivas y/o comparativas que  gozarían las EPE respecto de las empresas 
privadas? 
Would the People's Republic of China please specify what in its view are the competitive and/or 
comparative advantages enjoyed by SOEs over private enterprises? WT/TPR/M/230/Add.1 
Page 468  
 
  Answer 
China adopts the socialist market economy system, in which SOEs and other enterprises are equal 
competitors in the market. China would develop the public sector of the economy and at the mean 
time encourage and support the development of the non-public sector, so as to form a new pattern of 
fair competition and mutual promotion of various types of enterprises. 
The focus of reform of state-owned enterprises in the next stage is to continue promoting the strategic 
restructuring of state-owned economy. Corporate reform of large state-owned enterprises will be 
speeded up. More social capital will be introduced to  achieve diversification of property rights. Legal 
person governance structure and senior management compensation system will be further enhanced. 
The budget system for managing State capital will be further improved. Reform of state-owned 
monopoly sectors will be accelerated to relax market access and introduce competition. 
Additional measures promoting development of the non-public sector are designed primarily to create 
a market environment for fair competition of economic  sectors of various ownerships. Such measures 
will focus on offering equal policy treatment in bidd ings and government procurement, safeguarding 
the fair participation of non-public enterprises in the market. Regulations and rules concerning 
financing, foreign exchange administration, land use, public services and etc will be reviewed and 
updated to enable non-public enterprises to have  access to various resources necessary for their 
development on an equal footing 
S
ECCIÓN IV  POLÍTICAS COMERCIALES , POR SECTORES  
SECTION IV  TRADE POLICIES BY SECTOR  
Párrafo 13 
Paragraph 123 
Un importante problema con que se enfrenta la agricu ltura en China es el reajuste estructural.  El 
tamaño medio de las explotaciones agrícolas es relati vamente reducido, de 0,6 hectáreas.  El aumento 
de la productividad requeriría explotaciones más grand es;  aunque en la política agrícola de China se 
menciona la reforma estructural, los instrumentos de política utilizados no la abordan directamente.  
El tamaño de las explotaciones agrícolas aumenta lentamente, lo que puede  constituir una delicada 
cuestión social y económica, ya que requiere menos agricultores. 
One major issue facing agriculture in China is st ructural adjustment.  The average size of farm 
holdings is relatively small, at 0.6 ha. Improving productivity would require bigger farms;  although 
structural reform is mentioned in China's agri culture policy, the policy instruments used do not 
address it directly.  Increasing farm size, which is happening slowly, can be a delicate social and economic issue, as it requires fewer farmers. 
¿Cómo piensa China re-enfocar las medidas de política para dar soluciones a los problemas e 
implicancias de la reforma estructural? ¿Qué  monto de recursos debiera comprometer para 
ello? 
How does China envisage re-focusing its policy me asures in order to remedy the problems and 
implications of structural reform?  How much in terms of resources would be required to reach 
the target? 
Answer 
Since the last review, the Chinese Government h as continued pursuing the "pay-back" policies and 
strengthened further its support for agriculture, ru ral areas and farmers in a bid to continuously 
increase the incomes of the farmers. Over the past tw o years, investment in infrastructure and social  WT/TPR/M/230/Add.1 
 Page 469 
 
 
  programs in rural areas as well as direct financial support to farmers increased significantly. In the 
effort to increase the employment of the rural labour forces, training programs to improve the skills of rural migrant workers were launched on a large sca le and policies were im plemented to encourage 
rural migrant workers who returned to their hom e to start up their own businesses. Financial support 
for poverty alleviation purposes was also increased .  From 2008 onwards the new poverty line of 
annual per-capita income of 1,196 Yuan was adopted  to cover all low-income rural population. 
According to the new standard, 40.07 million peopl e are eligible to receive assistance under poverty-
relief programs. 
By far, China has basically formed an agricu ltural support policy system for safeguarding grain 
production, enhancing agricultural efficiency , increasing farmers' incomes and promoting 
comprehensive development of rural areas, which is consistent with the agri cultural support rules of 
the WTO. The main supporting measures are direct subsidies for farmers, comprehensive direct 
subsidies for agricultural inputs, subsidies for using superior seed varieties and subsidies for 
purchasing agricultural machinery and tools. Others  include transfer payment for big agricultural 
counties and investment for rural infrastructure c onstruction. Besides, China also has the minimum 
purchase price policy for key grain products and the temporary reserve policy for corn, soybean, colza 
and cotton.  These policies and mesures of the Ch inese Government towards rural areas, farmers and 
agriculture are long term policies and measures an d will gradually improve farmers' welfare and 
narrow rural-urban disparities. 
China also would like to elaborate on the latest devel opment of its rural social assistance system in its 
efforts to alleviate poverty and narrow the urban-rural gap. 
 1. A nationwide social assistance system established and urban-rural equality basically 
achieved 
  Firstly, while streamlining and improving the minimum social security system in 
urban areas, the security system has also b een set up and executed in rural areas. The 
survival right of citizens having financial difficulties in urban and rural areas is 
equally protected. By the end of 2008, the system had covered a total of 23.35 million 
Chinese citizens in cities and towns, and h as attained the goal of "covering all those 
who should be covered." Meanwhile 42.84 million poor farmers had been covered by 
the system and the same goal is to be achieved progressively.  
  Secondly, while medical care assistance system is deployed universally in rural areas, 
the same system is being constructed progr essively in all cities and towns, which 
provides an institutional guarantee to address the problem of lack of access to medical 
services for citizens having financial difficulties. In 2008, 5.976 million rural dwellers received direct assistance under th e system, and 37.467 rural dwellers were 
assisted by the system to join in the ru ral cooperative medical care programmes. In 
cities and towns, 5.29 urban dwellers received direct assistance under the system and 
9.14 million urban dwellers were assisted by  the system to join in medical care 
insurance.  
  Thirdly, while the establishment and admini stration of social welfare organisations in 
urban areas is reinforced, a special programme has been implemented in rural areas to construct and administrate centralised fac ilities for "Wu Bao" where this particular 
group of citizens enjoy free food, clothes, housing, medication and funeral services 
(education for orphans) provided by the state. This programme consolidates the 
material foundation for supporting those ur ban and rural dwelle rs who have no 
income, no ability to do labour and no statut ory supporters and therefore live in most WT/TPR/M/230/Add.1 
Page 470  
 
  difficult situation. At present, 1.45 million people of this kind live in these centralized 
facilities, accounting for 27% of all those entitled to the programme.  
  Generally speaking, the social assistance system has ensured that urban and rural 
citizens having financial difficulties can all enjoy equal treatment and care and fair 
support and assistance. It enables an early urban-rural balanced development and 
overall equality in the process of China's social development.  
 2. Continuously increasing financial input in  the social assistance system for both rural 
and urban schemes 
  In recent years, financial authorities at a ll levels, particularly the central financial 
authority, have increased input in the social assistance progr ammes year by year. 
Particularly since 2007 the central financia l authority has increased significantly the 
financial input in the minimum social secu rity programmes, especially in the rural 
areas. As a result, the gap between urban a nd rural areas in social assistance work has 
been quickly narrowed, which ensured a ba lanced development of social assistance 
work in urban and rural areas. In 2007, for the first time the central financial authority 
provided earmarked fund for rural minimum so cial security programmes with a total 
of RMB 3 billion. This figure quickly in creased to RMB 9.3649 billion in 2008, an 
increase of 212%. The central financial au thority also provided RMB 16 billion for 
urban minimum security programmes in 2007 and RMB 26.9446 billion in 2008, a 
68.55% increase. Judging from the situation nationwide, financial input in rural minimum security programmes increased faster than that in urban programmes, 
moving financial input in rural and urban areas towards a basic balance. Total 
expenditure on rural minimum security programmes amounted to RMB 10.9 billion 
in 2007 and RMB 22.2 billion in 2008, a 103.7% increase. Total expenditure on urban minimum security programmes amount ed to RMB 38.5 billion, 62.4% higher 
than the figure for 2007 which was RMB 23.7 b illion. In terms of financial input in 
medication support and assistance, rural areas have seen a better situation than urban 
areas. Budgets provided by central financial authority for rural and urban medication 
support and assistance programmes were RMB 2.12 billion and RMB 1.28 billion respectively in 2007. The figures for 2008 were RMB 2.69 billion and RMB 2.35 billion respectively. Meanwhile, the state has built up and improved the administration system of the earmarked f und. Fund for social welfare programmes is 
subject to specific administration, speci fic accounting and must only be used for 
earmarked purposes. All these have ensu red the efficient use of the fund. 
 3. Giving priority to areas with financial difficulties so as to achieve a coordinated and 
balanced development of all regions. 
  Central and provincial governments have always given priority to support regions 
with financial difficulties. Over the years,  the funds provided by central financial 
authority for social assistance programmes have  been largely used in the central and 
western regions and traditional industrial b ases that have financial difficulties. No or 
very little such fund is provided for economic ally developed regions in the east. In the 
particular fund distribution formula, the gravity of financial difficulty of various regions is the key parameter. This practi ce plays a positive role in coordinating the 
development across various regions. At pr esent, the work of social assistance and 
support is developing rapidly all over the country and has covered every region. 
Many economically underdeveloped central a nd western regions are in the forefront 
in terms of social assistance. This work  provides a minimum social security guarantee  WT/TPR/M/230/Add.1 
 Page 471 
 
 
  for citizens having financial difficulties and plays a crucial role in promoting social 
harmony and economic growth. 
Informe de China 
Report by China 
SECCIÓN II  E NTORNO ECONÓMICO GENERAL Y DIRECCIÓN DE LAS POLÍTICAS  
SECTION II  GENERAL ECONOMIC ENVIRONMENT AND POLICY DIRECTION  
2) P AQUETE DE MEDIDAS DE ESTÍMULO PARA HACER FRENTE A LA CRISIS FINANCIERA 
MUNDIAL EN RESPUESTA DE LA CRISIS ECONÓMICA  
2) S TIMULUS PACKAGE IN RESPONSE TO THE GLOBAL FINANCIAL CRISIS  
i) Política fiscal proactiva i) Proactive fiscal policy 
Párrafo 17 
Paragraph 17 
¿Podría la Delegación de China proporcion ar mayores antecedentes acerca del paquete 
económico que ha implementado en respuesta a la  crisis económica, específicamente a su plan 
de inversión de $924,3 miles de millones de yuan, de los cuales un 16% está dirigido a la restructuración económica, conservación de energía  y reducción de emisiones y mejoras en el 
desempeño ambiental? ¿Qué tipo de proyectos o medidas se implementaron y qué experiencia se 
ha recogido? 
Would the Chinese delegation please provide furth er details concerning the economic package it 
has implemented in response to the economic cris is, and specifically its investment plan of 
924.3 billion Yuan, of which 16 per cent goes to economic restructuring, energy conservation and emission reduction and environmental improvement?  What types of project or measure have been implemented and what has been the experience in this regard? 
Answer 
Details of the two-year 4 trillion Yuan investme nt are as follows: 400 billion Yuan for low-rent 
housing, renovation of shanties and other housing projects for low-income population; 370 billion 
Yuan for water, electricity, road s, gas, housing and other works and infrastructure in rural areas, 
1.5 trillion Yuan for railways, roads, airports, wa ter conservancy and other major infrastructure and 
also renovation of city electricity grids, 150 billio n Yuan for medical care, education, culture and 
other social needs, 210 billion Yuan for energy- saving, pollution reduction and ecological projects, 
370 billion Yuan for economic restructuring and 1 tril lion Yuan for reconstruc tion of Wenchuan after 
the devastating earthquake. 
In the investment, the 1.5 trillion Yuan for infrastru cture accounted for 37.5% of the total and was the 
priority part of the 4 trillion Yuan investment pa ckage in order to boost domestic demand. According 
to statistics, between November 2008 and Augu st 2009, major infrastructure projects  with 
338.5 billion Yuan investment had been completed,  including 53,400 km of newly build highways 
and 8 new airports which created a new pass enger throughput of 5.09 millions. When the 
234 railways investment projects under construction are completed, the total railway operational 
mileage will increase from 80,000 km in 2008 to 1 10,000 km. Also, 73,000 km grids will be added. 
The 4 trillion Yuan investment pack age has been a major force to tu rn around the downturn of the 
Chinese economy. According to the National Bureau of Statistics of China, among the three major 
driving forces of the GDP growth in 2009, invest ment has the highest contribution percentage of WT/TPR/M/230/Add.1 
Page 472  
 
  92.3%, pulling the economic growth by 8 percentage  points, consumption contributed 4.6 percentage 
points, and net exports by -3.9 percentage points. Total fixed assets investment increased by 30.1 percent and the investment structure has been further optimised.   
iii) Avance de la reestructuración industrial 
iii) Advancing industrial restructuring 
Párrafo 23 
Paragraph 23 
¿Podría China detallar el alcance y los efectos de las medidas mencionadas para ayudar a las 
PYMES?  
Would China please specify the scope and eff ects of the measures in support of SMEs? 
Answer 
To help small and medium-sized enterprises overcom e difficulties as a result of the financial crisis, 
improve their business environment and promote the quality of their growth, the State Council promulgated the Certain Opinions on Further Accelerating the Development of Small and Medium-
Sized Enterprises  on 19 September 2009. The policy document particularly proposed to effectively 
alleviate the difficulties in financing of small and medium-sized enterprises, including implementation 
of the financial policies supporti ng small enterprises, enhanced financial services to small and 
medium-sized enterprises, further expansion of th e financing channels for small and medium-sized 
enterprises, improvement of the credit guarantee syst em for small and medium-sized enterprises, and 
provision of credit information service to facilitate financing of small and medium-sized enterprises. 
For more details, please refer to the Certain Opinions on Further Accelerating the Development of 
Small and Medium-Sized Enterprises at http://www.gov.cn/zwgk/2009-09/22/content_1423510.htm. 
Sección III  D
ESARROLLO DEL COMERCIO Y POLÍTICAS COMERCIALES  
Section III  T RADE DEVELOPMENT AND TRADE POLICIES  
1) Características básica s del desarrollo comercial 
1) Trade Development and Basic Characteristics 
iii) Aumento del riesgo de proteccionismo a escala mundial iii) Mounting risks of global protectionism 
Párrafos 61 a 63 
Paragraphs 61 to 63 
China expone que sus exportaciones han sido un creciente blanco de medidas de defensa 
comercial gatilladas por otros paí ses.  Del contexto de esos párra fos parece desprenderse la idea 
de que el aumento de esas medidas de defens a comercial que afectan a China  se debería al 
"creciente riesgo del proteccionismo global".  En otras palabras, parece que estos párrafos 
indican que China se ha visto afectada por estas medidas y que ello se debería únicamente a la 
actitud proteccionista de algunos países. ¿Podría China confirmar lo anterior? 
China explains that its exports have increasing ly been targeted by trade defence measures 
initiated by other countries.  These paragraphs appear to suggest that the growing number of 
trade defence measures affecting China is due to "the mounting risks of global protectionism".  
In other words, they seem to indicate that Chin a has been affected by such measures and that 
these are solely due to a protectionist attitude on the part of certain countries.  Would China 
please confirm whether this is so?  WT/TPR/M/230/Add.1 
 Page 473 
 
 
  Answer 
China has always maintained that trade remedy measures should be used in a rational and restrained 
manner. China opposes the abuse of trade remedy m easures. China hopes that all members maintain 
and strengthen ways of communication to properl y handle and resolve trade frictions through 
dialogues and consultations. 
China will continue to pursue mutually beneficial and win-win strategy in the course of its opening 
up, and will work together with other members to firmly oppose to any form of trade protectionism 
and to promote trade liberalization and facilitation. In the short term, China is committed to advancing 
the Doha Round of negotiations based on the progress to date, so as to achieve  a comprehensive, just 
and balanced outcome as soon as possible. 
At the same time, China will also continue to pr omote the transformation of its trade development 
pattern. In parallel with doestic measures to limit production and consumption of products not 
conducive to energy conservation, emission reduc tion and environmental protection, China will 
continue to implement export cont rol of non-renewable natural res ources and products of high energy 
consumption and high emissions, to promote the tran sformation and upgrading of processing trade, to 
enhance the added value of its products exported, and to promot e the development of trade in 
services. 
2) Fomento del comercio y la inversión 
2) Promoting Trade and Investment  
vi) Fomento sostenido de la transfromaci ón del modelo de comercio exterior 
vi) Continuing to promote the transformation of the pattern of foreign trade  
Párrafo 79 Paragraph 79 
El Informe señala que se han tomado diversas medidas para optimizar y transformar los patrones de 
comercio internacional, entre las cuales se destacan medidas para restringir el consumo y la 
producción de ciertos productos para alcanzar los objetivos de ahorro de energía, reducción de 
emisiones y protección ambiental. El Gobierno chi no también ha continuado con la implementación 
de medidas  de control a la expor tación de productos de alto consumo de energía o  de emisiones y de 
aquellos productos derivados de r ecursos naturales no renovables, para  avanzar en la transformación y 
modernización del comercio y, de este modo, mejorar el valor agregado de los productos de 
exportación, y promover el desarrollo del comercio de servicios. 
The Report states that a number of measures have b een taken to optimize and transform the pattern of 
foreign trade, including measures to restrain c onsumption and production of certain products to 
achieve energy-saving, emission reduction and en vironmental protection targets.  The Chinese 
Government has also continued to implement meas ures to control the export of products of high 
energy consumption or high emission and products of  exhaustible natural resources, to advance the 
transformation and upgrading of trade, and thus enhance the added value of export products and 
promote the development of services trade. 
¿Podría la Delegación de China proporcionar mayores antecedentes sobre cuáles han sido los 
mayores obstáculos en la implementación de di chas medidas? ¿Qué criterios se utilizan para 
determinar si un producto tiene un alto consum o de energía o de emisiones – cuál sería el 
umbral aceptable? 
Would the Chinese delegation please provide furt her details regarding the major obstacles 
encountered in the implementation of such meas ures?  What are the criteria for determining a WT/TPR/M/230/Add.1 
Page 474  
 
  high energy consumption or high emission product and what would be the acceptable 
threshold? 
Answer 
In recent years, industrial development in China has been accelerating and has entered a crucial stage. 
At the same time, harsh challenges have also emer ged, including for example unsustainable resources 
and energy consumption, and heavy pollution. Ener gy consumption of GDP per capita in China now 
is 2-3 times of the international level. The Chin ese government has therefore endeavored to enhance 
energy and resources utilization efficiency so as to achieve sustainable development and the transformation of the growth pattern. At present, industrial energy consumption accounts for 70% of 
the total energy consumed in China. As industry is a major energy consuming sector of the economy, 
China attaches great importance to energy conser vation, pollution reduction in industrial sectors and 
has achieved some progress in this regard.  
For criteria of energy consumption in different industrial sectors, the Ministry of Industry and 
Information Technology has promulgated access criteria of dozens of industrial sectors. Members may visit the website of the Ministry of Industry and Information Technology for detailed information 
at http://www.miit.gov.cn. 
ARGENTINA
 
WT/TPR/S/230, Informe de la Secretaria 
WT/TPR/S/230, Report by the Secretariat 
I. E NTORNO ECONÓMICO  
I. E CONOMIC ENVIRONMENT  
1) P OLÍTICAS DE COMERCIO Y DESARROLLO DE CHINA  
1) C HINA 'S TRADE AND DEVELOPMENT POLICIES  
Párrafos 11 a 14, página 4-5 
Paragraphs 11 to 14, pages 4-5 
A partir del reciente incremento de presiones inflacionarias, como consecuencia de las políticas 
fiscales y monetarias expansionistas adoptadas para hacer frente a la crisis internacional, ¿puede 
esperarse que las autoridades chinas decidan subir las tasas de interés y/o apreciar su moneda, medida 
que, además de estabilizar los precios internos de Ch ina, puede contribuir a disminuir los desbalances 
externos de los Estados Unidos y de los paí ses de la Unión Europea, algo que tanto vienen 
reclamando esos países? 
With the recent resurgence of inflation as a con sequence of the expansionary fiscal and monetary 
policies adopted in response to the international cr isis, can it be expected that the Chinese authorities 
will decide to raise interest rates and/or allow the currency to appreciate, a move which would not 
only stabilize domestic prices in China but also help  to reduce the deficits of the United States and 
European Union members, as these countries have been urging China to do? 
Párrafos 13 y 14, página 5 
Paragraph 13 and 14, pages 4-5 
El informe indica que China aplica un tipo de cambio  "flotante dirigido" basado en la oferta y la 
demanda del mercado pero ajustado en función a una canasta de monedas. Asimismo, se indica que el  WT/TPR/M/230/Add.1 
 Page 475 
 
 
  Gobierno tiene previsto seguir mejorando este régimen,  y mantener el tipo de cambio estable, a un 
nivel adaptable y equilibrado. 
The report states that China applies a "managed fl oating" exchange rate ba sed on supply and demand 
of the market but adjusted with refe rence to a basket of currencies.  It  also states that China intends to 
further improve this regime and maintain the exchange  rate stable at an adaptive and balanced level. 
¿Cómo está compuesta la canasta de monedas y cómo  funciona el mecanismo de ajuste que se le 
realiza al Yuan?¿Cuáles son las medidas que pien sa tomar el Gobierno de China para mejorar 
este régimen? 
What is the composition of the basket of currencies and how does the Yuan adjustment 
mechanism work? What measures does the Government have in mind to improve the regime? 
Answer (for the above questions) 
Since 1994 China has been continuously improving it s market-based mechan ism for RMB exchange 
rate formation. The RMB started to adopt a single,  managed floating exchange rate regime based on 
market supply and demand on 1 January 1994. Since 21 July 2005 China further improved the 
managed floating exchange rate re gime and started to adopt the managed floating exchange rate 
regime based on market supply and demand with reference to a basket of currencies. On 
19 June 2010, the People's Bank of  China announced further reform initiative on the RMB exchange 
rate regime on top of the 2005 exchange rate regi me reform, the focus of which was to stick to a 
dynamic management and adjustment of the floati ng exchange rate of RMB based on market supply 
and demand, with reference to a basket of cu rrencies and in accordance with the previously 
announced exchange rate fluctu ation ceiling in the inter-bank foreign exchange market.  
II. RÉGIMEN DE POLÍTICA COMERCIAL :  MARCO Y OBJETIVOS  
II. T RADE POLICY REGIME :  FRAMEWORK AND OBJECTIVES  
1) A CUERDOS Y ARREGLOS COMERCIALES  
1) T RADE AGREEMENTS AND ARRANGEMENTS  
iii) Acuerdos bilaterales 
iii) Bilateral arrangements 
h) Otros posibles acuerdos bilaterales  
h) Other potential bilateral arrangements 
Párrafo 43, página 23 
Paragraph 43, page 20 
En abril de 2005, noviembre de 2006 y noviembre de  2009 se iniciaron estudi os de viabilidad de 
acuerdos de libre comercio entre China y la India,  China y Corea, y China y Suiza, respectivamente. 
Feasibility studies on a China-India FTA, China- Korea FTA, and China-Switzerland FTA started in 
April 2005, November 2006, and November 2009, respectively. 
¿Podría China brindar mayor información sobre lo s criterios o el contenido de los estudios de 
viabilidad de acuerdos bilaterales que se están llevando a cabo? 
Please provide further details concerning the cri teria or content of the feasibility studies for 
bilateral arrangements that are underway. WT/TPR/M/230/Add.1 
Page 476  
 
  Answer 
The academia-industry-government joint study of Ch ina-South Korea Free Trade Zone was launched 
in November 2006, and ended in May 2010. During the five joint study conferences, both countries 
went deep into the present situation of economic a nd trade relations between China and South Korea, 
including trade in goods, trade in services, investme nt policies, customs procedures, trade remedies, 
competition policies, intellectual property rights, gove rnment procurement, rules of origin, animal and 
plant inspection and quarantine, technical barrier s to trade, economic cooperation, and proposed 
conclusion and recommendations. The study helped both countries deepen mutual understanding and 
laid a good foundation for further work on the China-South Korea Free Trade Zone. 
China and Switzerland reached consensus to launch a joint study to examine the feasibility of China-
Swiss Free Trade Zone in January 2009. After tw o preliminary industry exchanges, both countries 
formally declared on 30 November of the same year  to launch the joint feasibility study. The first 
meeting of the study was held in Beijing in Februa ry 2010. The joint study will lucubrate such issues 
as general economic and trade situation, bilate ral economic and trade re lations and industrial 
structures, and put forward policy proposals on whether to launch free trade zone negotiation or not.  
2) M
ARCO INSTITUCIONAL Y JURÍDICO  
2) I NSTITUTIONAL AND LEGAL FRAMEWORK  
i) Transparencia 
i) Transparency 
Párrafo 9, página 13 
Paragraph 9, page 12 
El informe resalta que algunos aspectos del régimen de la política comercial de China siguen siendo 
complejos y opacos. En este sentido, el Gobierno  ha adoptado recientemente diversas medidas 
encaminadas a mejorar la tran sparencia del sector público. 
The report points out that some aspects of China' s trade policy regime remain complex and opaque, 
and that the Government recently adopted various measures to enhance transparency in the public 
sector. 
¿Cuáles son esas medidas?  
What are these measures? ¿Qué otras medidas piensa tomar el Gobierno pa ra simplificar y transparentar el régimen de 
política comercial? 
What other measures does the Government intend to take to simplify the trade policy regime 
and make it more transparent? 
Answers (to the above questions) 
The Chinese government has attached high attentio n to improving transparency of the government 
work. Some of the efforts made are summarized as follows: 
 I. Honoring accession commitments regarding transparency. After China's accession to 
WTO, the Chinese government designated "China Foreign Trade and Economic Cooperation Gazette" as the official publicati on to publish laws, re gulations and other  WT/TPR/M/230/Add.1 
 Page 477 
 
 
  measures relating to or affecting goods trade, service trade, intellectual property 
rights in connection with trade as well as foreign exchange administration. Up to 
May 2010, a total of 586 volumes have been issued, and thousands of laws, 
regulations, rules and other measures have been released in the Gazette. The Gazette is available at the website of the Ministry of Commerce http://www.mofcom.gov.cn. 
Besides, the laws, regulations and rules formulated by the Chinese government are 
also available at least at the fo llowing websites of http://www.gov.cn and 
http://www.chinalaw.gov.cn. 
 II. Continuously improving the transparency  of legislative process and expanding public 
participation. The Law on Legislation  implemented as of 2000 has made publicity and 
transparency a fundamental principle required to be observed during government 
legislation process. Solicitation of public opinions has become a universal practice for drafting laws and regulations. The Legisla tive Affairs Office of the State Council has 
opened up a special system for comments so licitation on draft regulations and rules at 
its website http://www.chinalaw.gov.cn. Offi cial websites of many ministries and 
commissions also have special columns for public opinions soliciting. In April 2008, 
the Standing Committee of the National People's Congress made a decision that draft laws that it would review in future woul d expand their publicity scope and would all 
be made public to the whole society in ge neral circumstances for public opinions and 
comments. 
 III. Continuously optimizing the legal system  for disclosure of government information 
to make government affairs more transparen t. According to the requirements of the 
central government in connection with the transparency of government affairs, all levels of governments and their departments are making use of various means such as 
government bulletins, guidelines booklets, public  hearings, press briefings and expert 
consultations etc to advance the transp arency of government affairs. Most 
governments at all levels and their depart ments have established their own websites. 
The portal website of the Central Government  was also formally put into operation on 
1 January 2006. On 1 May 2008, Regulations on Government Information Release  
came into effect, which would further enha nce the transparency of government work. 
6) R
ÉGIMEN DE INVERSIÓN EXTRANJERA  
6) F OREIGN INVESTMENT REGIME  
Párrafo 45, página 23 
Paragraph 45, page 21 
Se indica que China adoptó algunas medidas para lib eralizar o facilitar más la Inversión Extranjera 
Directa (IED) en el país, con inclusión de la  modificación de la Guía de Ramas de Producción 
Prioritarias para la Inversión Extranjera en las regi ones central y occidental de China, en virtud de la 
cual se ampliaron la cobertura y el alcance de los sectores abiertos a la inversión extranjera. 
The report states that China adopted a few measures to  further liberalize or facilitate FDI in China, 
including an amendment to the Catalogue of Priority  Industries for Foreign Investment in the Central-
Western Region, which further opened up the covera ge and scope of sectors for foreign investment. 
¿Podrían indicar cuáles son los sectores que están ab iertos a la inversión extranjera en virtud de 
esta Guía? 
Please indicate which sectors are open to foreign investment under this Catalogue. WT/TPR/M/230/Add.1 
Page 478  
 
  Answer 
The newly amended Catalogue of Advantaged Industries for Foreign Investment in Mid-West China 
altogether listed 411 items, including 154 revised it ems and 126 new items. The Catalogue further 
expanded the fields and scope of th e opening-up of the central and western part of China. The items 
cover successive industrial developm ent of national key ecological projects like returning farmland to 
forests and grasslands and protection of natural fo rests; development and application of technologies 
for water-saving irrigation and water saving on dr y land farming and tillage; projects of ecological 
system restoration and reconstruction in mine d-out and subsidence areas of mining areas; key 
automotive components and parts manufacturing; co mprehensive developmen t and exploitation of 
advantageous resources; as well as services area ns including value-added telecommunications, 
tourism, construction and operation of public utilities including gas, heat and water supply etc. Please 
refer to the Catalogue at http://www.gov.cn/flfg/ 2008-12/25/conten t_1187108.htm for more details.  
Párrafo 47, página 24 
Paragraph 47, page 21 
Si bien el informe indica que las principales le yes y reglamentos relacionados con la IED apenas 
variaron durante el período objeto de examen, ta mbién  menciona que en 2009 se publicaron medidas 
para la administración del establecimiento de  sociedades colectivas por empresas o personas 
extranjeras en China, que entraron en vigor el 1º de marzo de 2010. 
While the report states that the main laws and regula tions specifically related to FDI remained largely 
unchanged during the review period, it also mentions that Measures for Administration of Establishment of Partnership Enterprise by Fore ign Enterprises or Individuals within China were 
published in 2009 and entered into force on 1 March 2010. 
¿En qué consisten estas medidas y en qué  difieren del marco normativo anterior? 
What are these measures and how do they diff er from the previous regulatory framework? 
Answer What was promulgated on 1 March 2010 was the Measures for Administration of Establishment of 
Partnership Business in China by Foreign Enterprises or Individuals . It is an administrative 
regulation supplementary to the Law on Partnership Enterprises . The regulation provides a new form 
of commercial presence in China, i.e. partnership enterprise, for foreign enterprises and individuals. 
From the perspective of GATS, it provides a form of commercial presence and therefore is a horizontal issue. The above-mentioned  Catalogue for the Guidance of Foreign Investment Industries  
and the  Catalogue of Advantaged Industries for Foreign Investment in Mid-West China  amended to 
encourage and guide foreign investment relate to sectoral commitments in the perspective of the 
GATS. 
Párrafo 48, página 24 
Paragraph 48, pages 21-22 
Se menciona que nuevo catálogo de la Guía para  industrias con inversión extranjera incluye 
410 subsectores y proyectos, los cuales además pu eden beneficiarse de determinadas medidas 
preferenciales. 
The report says that the new Catalogue of Advant aged Industries for Foreign Investment includes 
about 410 subsectors and projects, which are eligible for certain preferential measures.  WT/TPR/M/230/Add.1 
 Page 479 
 
 
  ¿Cuáles son los 410 subsectores y proyectos incluidos en el actual Catálogo? 
Which are the 410 subsectors and projects included in the current Catalogue? 
¿En qué consisten las medidas preferenciales de las cuales estos pueden beneficiarse y bajo que 
requisitos se aplican? 
What do the preferential measures for which th ey are eligible consist of, and what are the 
requirements for applying them? 
¿Existe un sitio en Internet en donde pueda obtenerse información detallada de esta Guía? 
Is there a website on which detailed informat ion concerning this Catalogue can be found? 
Answers (to the above 3 questions) 
Please refer to the answer to the question under "párrafo 45, página 23". The new Catalogue of 
Advantaged Industries for Foreign Investment in Mid-West China  is available at http://www.gov.cn/ 
flfg/2008-12/25/content_1 187108.htm. Foreign investment projects in all the areas listed in the  
Catalogue of Advantaged Industries for Foreign Investment in Mid-West China  are entitled the 
preferential policies for the "encouraged" categor y of foreign investment. For details of the 
preferential policies, please refer to China's subs idy notification which w ill be submitted shortly. 
Párrafo 49, página 24 
Paragraph 49, page 22 
El informe indica que el procedimiento de examen y aprobación de la IED ha variado en lo que se 
refiere a cierta delegación de facultades en los gobi ernos locales. En particular, cuando un proyecto no 
excede los US$100 millones para las  inversiones "permitidas" y "alentadas", y US$50 millones para 
las restringidas, debe ser verificado por las comisiones locales  de desarrollo y reforma, lo que 
facilitaría la aprobación de IED. 
The report mentions that examination and approval pr ocedures for FDI have changed in that there is 
some delegation of authority to local government s.  Specifically, projects below a threshold of 
US$100 million for "permitted" and "encouraged" in dustries, and US$50 million for restricted 
industries are to be verified by the local  DRCs, which will facilitate approval of FDI. 
¿A qué se debe esta delegación de facultades y por qué este procedimiento favorecía la 
aprobación de IED? 
What is the reason for this delegation of authority and why will this favour the approval of 
FDI? 
Answer 
The authority mentioned here refers to the auth ority to examine and approve foreign investment 
projects. Provincial authorities are now delegated the power to approve projects which previously 
may only be approved by the Central Government. This has further simplified approval procedures, 
enhanced approval efficiency and accelerated the appr oval of foreign investment projects. It is now 
more convenient for foreign investors to make inve stment in China. In the meantime, it should be 
noted that the legal basis and criteria of approval remain unchanged after the decentralization of the 
approval authority. Both centrally and locally approved projects should be  examined and approved 
according to the same laws, regulations and rules.  WT/TPR/M/230/Add.1 
Page 480  
 
  III. P
OLÍTICAS COMERCIALES , POR MEDIDAS  
III. T RADE POLICIES AND PRACTICES BY MEASURE  
1) I NTRODUCCIÓN  
1) I NTRODUCTION  
Párrafo 6, página 28 
Paragraph 6, page 24 
El informe menciona que China continúa aplicando  restricciones a la exportación, pero al mismo 
tiempo aclara que se están examinando medidas alte rnativas para cumplir con los objetivos del 
gobierno. 
The report mentions that China continues to apply e xport restrictions, but also that it is considering 
alternative measures to attain its objectives. 
¿Que medidas alternativas han sido analizadas?  
What alternative measures are being considered? Asimismo, se menciona que se está evaluando la  aplicación de un impuesto ambiental a algunos 
productos derivados de los recursos naturales. 
The report also mentions that the Government is considering levying an environmental tax on some 
natural resource products. 
¿Sobre qué base se aplicaría este impuesto ambiental? On what base would this environmental tax be levied? ¿Podrían especificar qué productos son susceptibles de aplicación? Please specify the products on which it might be levied. ¿Qué otras medidas esta analizando el Go bierno relacionadas a la cuestión ambiental? 
What other measures is the Government consid ering in relation to environmental issues? 
Answers (to the above 4 questions) 
Regarding the environment tax, rele vant authorities are currently stud ying on the feasibility of levying 
taxes on pollution discharges to reform the current practice of collecting pollution discharge fees with 
reference to the successful experience of other countries in reducing pollution discharges through 
pollution discharge tax. Further information will be provided at appropriate time according to the 
progress. 
Párrafo 8, página 29 
Paragraph 8, pages 24-25 
El informe menciona que las empresas de propiedad estatal se han beneficiado 
desproporcionadamente con las medidas gubernamenta les de estímulo económico, pero se indica que 
esa no es la intención del Gobierno respecto a este tema.  WT/TPR/M/230/Add.1 
 Page 481 
 
 
  The report states that State-owned enterprises (SOE s) have been benefiting disproportionately from 
the Government's economic stimulus measures to boos t the economy, but that this is not the intention 
of the Government. 
In that case, please explain what the Government's  intention is as regards the benefits obtained 
by the SOEs. 
¿Podrían comentar, entonces, cuál es la inte nción del Gobierno respecto a los beneficios 
adquiridos por las empresas de propiedad estatal? 
Answer 
Economic stimulus measures were introduced to address the serious negative impact on Chinese 
economy of the international economic crisis trigge red by the US subprime crisis. In terms of the 
orientation of the policy, Chinese government has no intention to have SOEs to benefit 
disproportionately from the stimulus measures. In fact, non state-owned enterprises also greatly benefit from these measures. For example, non state- owned enterprises have directly or indirectly 
involved in and benefited from vari ous stimulus projects like the program to support rural residents to 
purchase home appliances, the program to trade- in old appliances and vehicles and also the 
infrastructure construction projects.  
The Chinese government has always been clear a nd consistent on its po licy to encourage the 
development of non-public sector including private and foreign-invested enterprises. Recently, the State Council issued another two policy documents, namely Certain Opinions of the State Council on 
Encouraging and Guiding the Healthy Development of Private Investment  and Certain Opinions of 
the State Council on Further Improving the Work of Using Foreign Investment . The policy documents 
provide clear policy guidance for further promoti ng the development of non-public sector.    
2) M
EDIDAS QUE AFECTAN DIRECTAMENTE A LAS IMPORTACIONES  
2) M EASURES DIRECTLY AFFECTING IMPORTS  
i) Procedimientos aduaneros, valoración y normas de origen 
i) Customs procedures, valuation, and rules of origin 
a) Procedimientos aduaneros e insp ección previa a la expedición 
a) Customs procedures and preshipment inspection 
Párrafo 11, página 29 
Paragraph 11, page 25 
El informe menciona que China continúa con la refo rma de su sistema de tránsito aduanero, iniciada 
en 2005, para simplificar los proced imientos de declaración en aduana. 
The report states that China has continued to reform  its Customs transit system to simplify Customs 
declaration procedures, a reform begun in 2005. 
¿Podrían brindar más información acerca de dicha reforma?  
Please provide further details concerning this reform. WT/TPR/M/230/Add.1 
Page 482  
 
  Answer 
Regarding the Customs transit reform, or the reform  to promote regional integration of the Customs 
administration, Chinese government initiated the pilot practice in October 2005 in 11 Customs including Customs in Shanghai, Hangzhou and Ning bo of the Yangtze River Delta Area, Customs in 
Guangzhou, Shenzhen, Gongbei, Huangpu and Jiangmen  of the Pearl River Delta Area, and also 
Customs in Beijing and Tianjin of the Bohai Rim Region. At the end of July 2006, the General 
Administration for Customs of China decided to fo rmally launch nationwide the reform to promote 
regional Customs clearance. 
In the mode of regional Customs clearance, th e existing limitations as a result of the current 
boundaries of jurisdiction of each Customs were elim inated, and the "two declarations, two releases" 
practice were changed to "one declaration, one rel ease." After the clearance of imported goods at  the 
port, they generally can be directly transported to  the plant for discharge. After being loaded in the 
factory, goods to be exported can be transported di rectly to the Customs at the port for loading into 
the ships (vehicles) and exit. Customs procedures we re simplified, costs reduced, and efficiency of 
import and export clearance of goods  improved. After introduction of the regional Customs clearance, 
clearance procedures can be completed generally w ithin one working day. The logistics constraints 
caused by division of Customs districts were reduc ed. Inland enterprises could benefit from the same 
convenience as those located at coastal ports. 
c) Normas de origen  
c) Rules of origin 
Párrafo 15, página 30 
Paragraph 15, page 26 
El informe indica que China aplica las normas de or igen preferenciales con arreglo a los distintos 
acuerdos comerciales regionales y bilaterales suscr iptos, mencionando que ha firmado un acuerdo de 
libre comercio con Perú en abril de 2009, pero que éste aún no ha entrado en vigor. 
The report states that preferential rules of origin are applied in accordance with the various regional 
and bilateral trade agreements China has concluded,  and mentions that China has signed a free-trade 
agreement with Peru, although it h as not yet entered into force. 
¿Podrían indicar cuántos y qué productos se han negociado con Perú? 
Please indicate how many and which pro ducts have been negotiated with Peru. 
¿Cuándo entrará en vigor dicho acuerdo? When will this agreement enter into force? 
Answer (for the above 2 questions) 
The free trade agreement between China and Peru has taken effect as of 1 March 2010. China and 
Peru would gradually eliminate 94.6% and 92% of the tariffs of goods imported from the other party 
respectively, which include China's light industr y products, electronic prod ucts, home appliances, 
machinery, automobile, chemical products, vegeta bles and fruits and Peru's fish powder, mineral 
products, fruits and fishes etc. In terms of trade in  services, Peru would further open up 90 subsectors 
including mining, research and development, educ ation in Chinese, traditio nal Chinese medicine, 
martial arts, etc, while China would further ope n up 16 subsectors including mining, consultancy, 
translation, sports and tourism etc. For more details please refer to http://fta.mofcom.gov.cn.   WT/TPR/M/230/Add.1 
 Page 483 
 
 
  Se expresa, asimismo, que "Las normas de origen preferenciales suelen variar de un acuerdo a otro y, 
en ocasiones, entre grupos de productos, con lo que puede aumentar la complejidad del régimen de 
importaciones de China. 
It is also mentioned that "preferential rules of or igin tend to vary from agreement to agreement, and 
sometimes across product groups, which could add to  the complexity of China's import regime". 
¿Está evaluando el Gobierno Chino simplificar el régimen de origen preferencial, o está a la 
espera de que se acuerde primero en la OMC la armonización de los regímenes de origen no 
preferencial?  
Is China considering simplifying the preferential origin regime or is waiting for prior agreement 
on harmonization of non-preferential rules of origin within the WTO? 
Answer 
Preferential rules of origin are the results of Ch ina's negotiations with va rious countries and regions. 
The fact that preferential rules of origin vary w ith specific agreements concluded between China and 
other countries is also commonly seen in the cases of othe r countries. It is therefore not true that this 
has made China's import system more complex. Howe ver, to further facilitate trade, China is also 
considering to further streamline the implementati on of the preferential rules of origin from the 
procedural perspective. 
ii) Aranceles 
ii) Tariffs 
a) Panorama general  
a) Overview 
Párrafo 17, página 31 
Paragraph 17, pages 26-27 
El informe menciona que la Comisión de Ar anceles Aduaneros del Consejo de Estado puede 
establecer tipos arancelarios "provisionales", los cuales se aplican a ciertos productos durante un 
período determinado. 
The report states that the Custom s Tariff Commission of the State Council may set "interim" tariff 
rates, which are implemented on specific products for a certain period of time. 
¿Sobre qué productos se aplican estos tipos arancelarios provisionales? 
Which products are these interim tariff rates applied to? ¿Cuáles son los criterios para su aplicación? What are the criteria for applying them? 
¿Durante cuánto tiempo se aplican? 
For how long are they applied? 
Answer(for the above 3 questions) WT/TPR/M/230/Add.1 
Page 484  
 
  In accordance with the Regulations on Import and Export Duties , interim duties may be applied to 
imported and exported goods within  a certain period. The Customs Tariff Commission of the State 
Council is responsible for making adjustments to the interim duties. In line with the national 
economic development situation including the situa tions of production, c onsumption and import and 
export of relevant products, the Customs Tariff Commission of the State Council may put forth 
adjustment suggestions of interim duty rates, app licable period, etc, which will be implemented upon 
approval by the State Council. Interim duty rates are no higher than MFN duty rates, neither are they higher than the bound duty rates. For more details on interim duties, please refer to the Customs Tariff 
of Import and Export of the People's Republic of China 2010 . 
b) Tipos arancelarios NMF 
b) MFN tariff rates 
Párrafo 20, página 33 
Paragraph 20, page 29 
El informe indica que se aplican tipos no ad valorem  a 52 líneas arancelarias y que las autoridades 
han facilitado los equivalentes ad valorem  (EAV) para todas las líneas arancelarias con tipos no 
ad valorem  excepto dos. 
The report states that non- ad valorem  rates are applied to 52 tariff lines and that the authorities 
provided ad valorem  equivalents (AVEs) for all but two non- ad valorem  tariff lines. 
¿Cuáles son las 52 líneas no ad valorem ? 
Which are the 52 non- ad valorem  tariff lines? 
¿Podrían brindarnos informació n acerca de los equivalentes? 
Please provide details concerning the equivalents. Answer (for the above 2 questions) 
Products which are subject to non- ad valorem  duties in 2010 are mainly frozen chicken, photographic 
materials and camcorders, consisting altogether of 55 tariff lines, of which 46 tariff lines are subject to 
specific duties. For more details, please refer to the Customs Tariff of Import and Export of the 
People's Republic of China 2010.   
After China's accession into the WTO, the specific  duties (AVEs) levied over the years were all 
converted strictly according to the ad valorem  rates committed in the accession. The rates of specific 
duties were re-calculated every year to ensure that the actual rates applied did not exceed the ad 
valorem  rates committed by China in the Goods Schedul e. The conversion was primarily based on the 
average import price of the recent (four) years provi ded by the Customs authorities. However, for few 
tariff lines, the years where no import was recorded or  where the prices had fluctuated too drastically 
were excluded. The calculation formula is: Committed ad valorem  rates x Average import price = 
Specific duty. 
It should be pointed out that after re-calculation of the rates of specific duties every year, where the 
specific duties (AVEs) were lower than the binding rates, the lower specific duties would apply. At 
present, the specific duties (AVEs) of about 70% of  the tariff lines are lowe r than their corresponding 
binding rates.  WT/TPR/M/230/Add.1 
 Page 485 
 
 
  d) Contingentes arancelarios  
d) Tariff-rate quotas (TRQs) 
Párrafo 25, página 37 
Paragraph 25, page 32 
Se menciona que durante todo el año 2009, se ap licaron contingentes arancelarios a ocho categorías 
de productos importados, clasificados en 45 líneas arancelarias a nivel de 8 dígitos del SA. 
The report mentions that in 2009, TRQs continue to  be applied to eight cat egories of imported goods, 
involving 45 tariff lines at the HS 8-digit level. 
¿Podrían informarnos por cuánto tiempo mas aplicarán dicho contingente? 
Please indicate for how much lo nger these quotas will be applied. 
¿Sobre qué bases se aplica el mismo? 
On what bases are they applied? 
Answer (for the above 2 questions) 
China applies import tariff rate quotas on 8 categor ies of products (45 8-digit tariff lines). This is 
based on China's accession commitments and there is  no plan of adjustment at this stage.  
e) Exenciones y reducciones arancelarias 
e) Tariff exemptions and reductions 
Párrafo 26, página 38 
Paragraph 26, pages 32-33 
El informe menciona que se aplican exencion es y reducciones arancelarias a las mercancías 
importadas por empresas seleccionadas, conforme  a lo establecido por "determinadas políticas". 
Brindan como ejemplo a las empresas (nacionales y con inversión extranjera) de sectores alentados 
que figuran en el Catálogo de reestructuración industr ial y en el Catálogo de inversión extranjera de 
China. 
The report mentions that tariff exemptions and reductions apply to goods imported by designated 
enterprises as specified in "certain policies", and gives the example of enterprises (both domestic and 
foreign-invested enterprises) in "encouraged" in dustries listed in China's Industrial Restructuring 
Catalogue and the Catalogue  for Foreign Investment. 
¿Qué criterios deben cumplir las empresas para poder acceder a dichas exenciones? 
What criteria must enterprises satisfy to be eligible for these exemptions? 
¿Que sectores han sido elegidos para percibir el beneficio? Which sectors have been selected to benefit? 
Answer (for the above 2 questions) 
The 2001-2004 subsidy notification (G/SCM/N/123/ CHN) submitted by China has contained the 
information that Argentina is inte rested in. In the past few years, great changes have taken place in WT/TPR/M/230/Add.1 
Page 486  
 
  many tax incentives due to tax system reform in  China. China will submit its 2005-2008 subsidy 
notification soon. Argentina may refer to this notifi cation for the latest information in this regard. 
Párrafo 27, página 38 
Paragraph 27, page 33 
El informe  menciona la  aplicación de exencion es arancelarias a las mercancías importadas para el 
tráfico de perfeccionamiento en zonas de control aduanero. 
The report states that tariff exemptions also a pply to goods imported in bond under processing trade 
into Customs controlled areas. 
¿Podrían explicar de qué se trata el "Tráfico de Perfeccionamiento"?  
Please explain what this "processing trade" consists of. 
Answer 
Processing trade refers to the trade mode under which goods particularly spare parts and raw materials 
are imported in bond for the purpose of re-export after being assembled or processed in China. In this 
case the goods are under strict supervision of the Custom s so as to ensure that the final products are 
exported. If the final products are not exporte d, import tariff of the goods will be levied.  
iii) Impuestos indirectos que afectan a las importaciones 
iii) Indirect taxes affecting imports 
Párrafo 29, página 38 
Paragraph 29, page 33 
El informe menciona que algunas importaciones pue den estar sujetas a reducciones o exenciones del 
IVA. 
The report mentions that some imports may be  subject to VAT reductions or exemptions. 
¿Cuáles son las importaciones incluidas en este beneficio? 
Which imports enjoy this benefit? 
Answer 
The 2001-2004 subsidy notifica tion (G/SCM/N/123/CHN) submitted by China has contained 
information in this respect that Argentina is inter ested in. In the past few years, great changes have 
taken place in many tax incentives due to tax syst em reform in China. China will submit its 2005-
2008 subsidy notification shortly. Argentina may refer to  this notification for the latest information in 
this regard. 
iv) Prohibiciones y régimen de licencias de importación 
iv) Import prohibitions and licensing 
a) Prohibiciones de importación 
a) Import prohibitions  WT/TPR/M/230/Add.1 
 Page 487 
 
 
  Párrafo 31, página 39 
Paragraph 31, pages 33-34 
Se informa que China mantiene prohibiciones a las  importaciones, las cuales figuran en los Catálogos 
publicados por el Centro de Comercio Exterior del Ministerio de Comercio (MOFCOM) y otros 
organismos, como por ejemplo la Ad ministración General de Aduanas. 
The report states that China maintains import prohibitions which are listed in Catalogues 
issued by MOFCOM and other relevant ministries, such as the General Customs Administration. 
¿Dónde se encuentran publicados exactamente estos Catálogos y en qué idioma? Where exactly are these Catalogues published and in what language? 
Answer 
The list of all products prohibited from import a nd export is published through announcement of the 
Ministry of Commerce and is also available on the we bsite of the Ministry of Commerce. Besides, the 
quantitative restriction notification submitted by China to WTO each year also covers 
comprehensively information in this regard, for example, the WTO document 
G\MA\NTM\QR\1Add.11. 
b) Licencias 
b) Licensing 
Párrafo 34, página 39 
Paragraph 34, page 34 
El párrafo 34 del informe menciona que en el último año 95 líneas arancelarias estaban sujetas a 
licencias no automáticas de importación y que dentro de éstas están incluidas sustancias que agotan la 
capa de ozono. 
The report mentions that last year 95 tariff lines  were subject to non-automatic import licensing, 
including ozone-depleting substances. 
¿Podrían detallar qué sustancias consideran que agotan la capa de ozono? 
Please give details of which substances are considered to be ozone-depleting. Answer 
According to the 2009 Catalogue of Classified Licensing for Goods under Import License 
Administration  that came into effect on 1 January 2009,  substances that deplete the ozonosphere and 
key used mechanical and electrical products are subject to import license administration in China, which contain totally 83 tariff lines at HS 8-digit. The said Catalogue is available on the website of 
the Ministry of Commerce and can be obtained on http://www.acs.gov.cn. Besides, the quantitative 
restriction notification submitted by China to WTO each year also covers comprehensively 
information in this regard. 
vi) Medidas comerciales especiales  
vi) Contingency measures WT/TPR/M/230/Add.1 
Page 488  
 
  Párrafos 39 a 41, páginas 39 y 41 
Paragraphs 39-41, page 35 
En esos párrafos el informe describe las medid as comerciales especiales tomadas por China en el 
periodo 2007-2008. Sin embargo, el informe no hace referencia a los procedimientos y normas que 
rigen la investigación e imposici ón de este tipo de medidas. 
In these paragraphs the report describes the conti ngency measures China applied in the period 2007-
2008.  However, it does not mention the rules and procedures governing the investigation for and imposition of such measures. 
Detallar sectores sobre los cuales han sido  aplicadas este tipo de medidas. 
Please indicate the industries to which such measures have been applied. 
¿Podrían facilitar la normativa que se aplica para cada uno de estos  procedimientos? 
Please provide the legislative/regulatory provi sions governing each of these procedures. 
Answer 
For detailed information, please refer to the semi -annual/quarterly notifications on the measures 
concerned that China submits to the WTO. A ll relevant announcements are also published and 
available at http://gpj.mofcom.gov.cn. 
vii) Normas y otras prescripciones técnicas  
vii) Standards and other technical requirements 
a) Normas y reglamentos técnicos 
a) Standards and technical regulations 
Párrafo 43, página 41 
Paragraphs 39-41, page 35 
El informe menciona que China posee cuatro tipos de normas:  nacionales, profesionales, locales y 
empresariales. En las tres primeras categor ías las normas pueden ser tanto voluntarias como 
obligatorias. 
The report indicates that China has four types of  standards:  national, professional, local, and 
enterprise standards.  Within th e first three of these categories, standards may be voluntary or 
mandatory. 
¿Qué criterios se utilizan para la clasificación de normas? 
What criteria are used for classifying standards? ¿Bajo qué parámetros se considera que una norma es voluntaria u obligatoria?  What parameters are applied for considering wh ether a standard is voluntary or mandatory? 
Answer (for the above 2 questions) 
National, sectoral and local standards include  both mandatory and voluntary standards. Those 
standards that safeguard people's health and safety of personnel and property, as well as those that are  WT/TPR/M/230/Add.1 
 Page 489 
 
 
  required by laws and administrative regulations to be  compulsory are mandatory standards. Others are 
recommended standards.  
Párrafo 44, página 41 
Paragraph 44, page 36 
El informe menciona que China presentó a la OM C 184 notificaciones sobre reglamentos técnicos en 
2008, y 199 en el último año.  
The report mentions that China submitted 184 notifi cations to the WTO on technical regulations in 
2008 and 199 in 2009.  
¿Se utilizan criterios internacionalmente reco nocidos para la elaboración de reglamentos 
técnicos?  
Are internationally recognized criteria u sed for drawing up technical regulations? 
¿Sobre qué productos se concentran dichos reglamentos? On which products do these regulations focus? Las notificaciones mencionadas, ¿ se encuentran en alguno de los idiomas oficiales de la OMC? 
Are these notifications to be found in any of the official WTO languages? 
Answer (for the above 3 questions) 
China has been fulfilling its notification obligatio ns since the accession to the WTO and so far has 
notified more than 740 TBT measures according to the requirement of the WTO TBT Agreement. 
Technical regulations and conformity assessmen t procedures of China are all published on the 
gazettes and official websites of competent departme nts. More details are available at http://www.tbt-
sps.gov.cn/sites/english/Pages/default.aspx. Chin a's notifications to the WTO are submitted in 
English. 
Párrafo 46, página 42 
Paragraph 46, page 36 
Se menciona que "en 2007, el 46,5 por ciento de las normas nacionales eran equivalentes a las normas 
internacionales; sin embargo, no se han facilitado datos recientes a la Secretaría."  
The report states that "in 2007, 46.5 per cent of nati onal standards were equiva lent to international 
standards;  however, no recent data were provided to the Secretariat". 
¿Podría China explicar el motivo por el cual no pudo facilitar tales datos a la Secretaría y si 
estima poder hacerlo en fecha cercana?  
Could China please explain why it has not provi ded such data to the Secretariat and say 
whether it thinks it can do so in the near future?  
Answer 
By the end of 2009, 68% of China's national standa rds in related areas are international or overseas 
advanced standards. Related areas refer to areas  where China's standardization work has its WT/TPR/M/230/Add.1 
Page 490  
 
  counterpart in international standardization work. This includes standards identically adopted (IDT), 
equally adopted (EQV), or adopted with modification (MOD). By the end of 2009, there were altogether 24,946 Chinese national standards.  Among these standards, 3,177 were mandatory 
standards, accounting for 12.73%; 21,587 were vol untary standards, accounting for 86.53%; 182 were 
national advisory technical documents, accounting for 0.72%. 
Párrafo 49, página 42 
Paragraph 49, page 37 
Se menciona la Ley de Inocui dad Alimentaria, que entró en vigor el 1° de junio de 2009 
(G/SPS/N/CHN/121), regulando todos los aspectos de la producción, procesamiento, distribución, 
importación y exportación en materia de inocuidad de alimentos.  
The report mentions the Food Safety Law which entered into force on 1 June 2009 
(G/SPS/N/CHN/121), governing all aspects of produc tion, processing, distribution, import and export 
as regards food safety. 
Dado el amplio ámbito de aplicación de la Ley,  y visto que contiene varias disposiciones que 
podrían tener un impacto considerable en el co mercio internacional, ¿podría China brindar 
mayores informaciones sobre su grado de reglamentación?  
Given the wide scope of the Law and the fact that  it contains various provisions that could have 
a considerable impact on international trade, could China please provide further information 
concerning the degree of regulation? 
En particular, ¿podría China especificar el pr ocedimiento de implementación en relación al 
requisito de realizar un análisis de riego previo a la obtención del permiso de importación en el 
caso de productos para los cual es no existe una "norma nacional de inocuidad alimentaria"?, 
¿este requisito es también solicitado a los produc tos nacionales en iguale s circunstancias? ¿se 
tendrá en consideración el comercio histór ico de productos amparados por normativa 
horizontal en materia de higiene y calidad? 
In particular, please specify the procedure for implementing the requirement that a 
risk-analysis be undertaken prior to the grant of an import licence in the case of products for 
which a "domestic food safety standard" does no t exist.  Is this requirement also applied to 
domestic products in the same circumstances?  Will the past trade in products covered by 
horizontal rules on hygiene and quality be taken into consideration? 
Answer (for the above 3 questions) 
The Food Safety Law , effective on 1 June 2009, stipulates that China practices a food safety 
regulatory system of divided responsibilities in specific links of the entire food safety chain plus 
overall comprehensive coordination. The State C ouncil set up a National Food Safety Commission as 
the top-level authority to deliberate and coordi nate affairs concerning food safety, which is 
responsible for analyzing food safety situation, st udying, planning and guiding the overall food safety 
work, putting forth major policies on food safety re gulation, and supervising the implementation of 
food safety regulation responsibilities. The Commission has set up an office to undertake its daily 
work. Under the lead of the Commission, Ministry  of Agriculture, AQSIQ, State Administration for 
Industry and Commerce and State Food and Drug Administration supervise and administer 
respectively the production of agricultural products , food production, food circulation and catering 
service. Ministry of Health assumes the duty of overall coordination of food safety work, held 
responsible for food safety risk assessment, formulation of food safety standards, food safety  WT/TPR/M/230/Add.1 
 Page 491 
 
 
  information dissemination, determination of qualif ication criteria for food inspection agencies and 
formulation of inspections norms, and investigati on and treatment of major food safety incidents. 
The provisions of the Food Safety Law , the division of food safety supervision responsibilities and the 
operation mechanism under the legal framework ar e consistent with the SPS Agreement. China 
performs its notification obligation in respect of th e laws, regulations and st andards concerning food 
which are related with international trade in accordance with th e SPS Agreement and TBT 
Agreement, and will take into considerati on the opinions and comments of WTO members.  
Párrafo 55, página 44 
Paragraph 55, page 38 
Se menciona que "en el Comité OTC hubo preocupaci ón porque el sistema de certificación obligatoria 
de los productos podría ser oneroso y, en con secuencia, obstaculizar el comercio.[1] Según las 
autoridades, se han introducido mejoras continuame nte y China se ha comprometido a simplificar el 
procedimiento del sistema y, de ese modo, aliviar la carga resultante para las empresas." 
The report states that "concerns were raised in  the TBT Committee that the compulsory product 
certification system could be burdensome and thus an  impediment to trade.  The authorities pointed 
out that improvements have been made continuous ly, and China was committed to simplifying the 
procedure of the system and thus mitigate the burden on enterprises." 
¿Podría China brindar información sobre las medidas que piensa implementar para la 
simplificación del procedimiento del sistema y si  habrá mayor aceptación de las declaraciones 
de conformidad por parte de los proveedores en el  caso de productos de bajo riesgo como fue 
solicitado en el Examen Anual de transición de la República Popular China (punto III del Acta 
de Reunión Ordinaria del Comité OTC de noviembre de 2009 -documento G/TBT/M/49- 
tomando en consideración la Lista indicativa de enfoques que pueden facilitar la aceptación de 
los resultados de la evaluación de la conformidad elaborada por el Comité OTC (G/TBT/1/Rev.9, anexos a la Parte 1, Sección A)? 
Could China provide information on the measures it is thinking of taking to simplify the 
procedure of the system, and on whether there wi ll be better acceptance suppliers' declarations 
of conformity for low-risk products as requested in the Annual Transitional Review of the People's Republic of China (Section III of the Minutes of the Regular Meeting of the TBT Committee of November 2009 - document G/TBT/M/49) - bearing in mind the Indicative List of Approaches to Facilitate Acceptance of the Result s of Conformity Assessment  drawn up by the 
TBT Committee (G/TBT/1/Rev.9, annexes to Part 1, Section A)? 
Answer 
China revised the Rules on Administration of Compulsory Product Certification  in 2008. The draft of 
the rules was notified to WTO on 24 June 2008 (G/TBT/N/CHN/339) for comment by members. The rules came into effect on 1 September 2009. In or der to simplify the CCC application procedures for 
enterprises, China has adopted fo llowing measures: online application; acceptance of CB certificate 
and testing report issued by IECEE-EB members and authorization of local certification agencies in 
most cases to do follow-up inspections after China's certification of foreign manufactures; lowering certification fees and avoiding repeated certificating and charges for such equipment in which spare 
parts and components are already certified; classifying key components to facilitate enterprises' application for record of changes. 
ix) Financiación relacionada con las importaciones  
ix) Import-related financing WT/TPR/M/230/Add.1 
Page 492  
 
  Párrafo 71, página 48 
Paragraph 71, page 42 
En el párrafo 71, el informe menciona que el Banco de Exportación e Importación de China ofrece 
crédito a la importación para facilitar las im portaciones de tecnologías y equipos esenciales. 
The report states that the Export-Import Bank of China (EXIM Bank) offers credit to importers in 
China to facilitate imports of key technologies and equipment. 
¿Cuáles son las características de estos créditos? 
What are the features of such credits? ¿Financian únicamente importaciones de tecnologías y equipos esenciales, o también productos 
corrientes? 
Do they finance only imports of key technol ogy and equipment, or consumer products too? 
Answer (for the above 2 questions) 
Credit for importing technology and equipment  is a type of debt fina ncing provided by the Export-
Import Bank of China to Chinese enterprises for their need of funds in Chinese and foreign currencies 
in import of technology and equipment. There is a column called "import credit" on the website of the 
said Bank introducing types of credit, prospective borrowers, application conditions and application 
documentation etc of credit for import provided by the Bank. Please refer to http://www.eximbank.gov.cn/list/yewu/dwdb/ 1/yewu.html for more details. 
3) M
EDIDAS QUE AFECTAN DIRECTAMENTE A LAS EXPORTACIONES  
3) M EASURES DIRECTLY AFFECTING EXPORTS  
ii) Subvenciones a la exportación 
ii) Export subsidies 
Párrafo 75, página 49 
Paragraph 75, page 42 
El informe menciona que China se comprometió a no mantener ni introducir subvenciones a la 
exportación para sus productos agropecuarios. 
The report states that China made commitments not to  maintain or introduce any export subsidies to 
its agricultural products. 
¿Podrían indicar si para los producto s industriales China otorga subvenciones? 
Please indicate whether China grants subsidies to industrial products. 
Answer 
China eliminated export subsidies as early as in 1991 and has also made commitment upon WTO 
accession. Due to the technical complexity of subs idy, members often have different understanding as 
to under what conditions a subsidy may constitute an export subsidy. This is not surprising. China's 
position towards export subsidy has been clear and c onsistent, i.e. we will observe the WTO rules and 
China's accession commitments .  WT/TPR/M/230/Add.1 
 Page 493 
 
 
  ix) Promoción de las exportacion es y ayuda a la comercialización 
ix) Export facilitation and marketing assistance 
Párrafo 91, página 54 
Paragraph 91, page47 
El informe indica que China fomenta las exportaci ones principalmente mediante los créditos a la 
exportación administrados por el Banco de Export ación e Importación de China (Banco EXIM), los 
seguros de créditos a la exportación otorgados por  la Corporación China de Seguros de Crédito y 
Exportación (SINOSURE), y las ferias de exportación.  
The report mentions that China facilitates exports  mainly through export finance operated by the 
Export-Import Bank of China (EXIM Bank), export credit insurance by the China Export & Credit 
Insurance Corporation (SINOSURE), and export fairs. 
¿Cuáles son las condiciones bajo la s cuáles se otorgan los créditos?  
What are the terms and conditions for such finance? ¿Qué requisitos debe cumplir una empresa para acceder a los mismos? 
What requirements must an enterpri se satisfy to be eligible for it? 
Answer(for the above 2 questions) 
Both the websites of the Export-Import Bank of China and the China Expor t & Credit Insurance 
Corporation have columns to introduce their business. Please visit http://www.eximbank.gov.cn and 
http://www.sinosure.com.cn for more detailed inform ation. Enterprises may also inquire about more 
specific information through the contact means published on the websites. 
Párrafo 94, página 55 
Paragraph 94, page 47 
En el párrafo 94 el informe menciona que el MOFCOM concedió en 2009, a través del 
"Proyecto 421", créditos a la exportación por va lor de u$s 42.100 millones para maquinaria y 
productos electrónicos. 
The report states that in 2009 MOFCOM provided US$42.1 billion in export credits for 
machinery and electronics products under the "421 Project". 
¿En qué condiciones se otorgaron esos créditos? On what terms were these credits granted? Desearíamos conocer más detalles acerca de los objetivos y el funcionamiento del 
"Proyecto 421". 
Please provide further details concerning th e objectives and operation of "Project 421". 
Answer (for the above 2 questions) 
"421 project" refers to the efforts of the Chinese e xport credit insurance institution to support banks to 
provide trade financing to the market in the coming few years in order to alleviate the constraint of WT/TPR/M/230/Add.1 
Page 494  
 
  trade financing and to promote the development of  international trade and economy. The project is 
implemented under the background that, due to the gl obal financial crisis, the trade financing market 
has experienced serious depression with liquidity  shortage, bringing un precedented pressure and 
challenges to international trade. Various intern ational organizations and governments have initiated 
series of measures to promote trade financing. Chin a initiated this project to encourage both policy 
and commercial financial institu tions to expand trade financi ng scale and increase liquidity in 
response to the proposal of the G20 London Summ it under the premise that WTO rules should be 
observed. Presently, this project is still under way. It  will be adjusted according to the situations of 
both the global economic recovery and the improvement of trade financing . 
4) M
EDIDAS QUE AFECTAN A LA PRODUCCIÓN Y EL COMERCIO  
4) M EASURES AFFECTING PRODUCTION AND TRADE  
i) Tributación e incentivos fiscales 
i) Taxation and tax incentives 
Párrafo 102, página 57 
Paragraph 102, page 49 
El informe indica que, en 2009, China transformó  el Impuesto al Valor Añadido (IVA) de un 
impuesto basado en la producción en un impuesto b asado en el consumo, eliminando la desgravación 
del IVA que beneficiaba a los bienes de capital importados. Las autoridades consideran que esta 
modificación ayuda a eliminar los efectos cascad a del IVA basado en la producción pero que, sin 
embargo, esto significó una importante reducción en los ingresos fiscales del Estado. 
The report states that in 2009, China transformed its VAT from a production-based to a 
consumption-based tax at the national level, a nd the VAT exemption on imported capital equipment 
was discontinued.  The authorities consider the transformation helps remove the cascading effects of the production-based VAT;  at the same time, this  meant a significant loss for China's tax revenue. 
¿De qué manera el gobierno entiende que esta modi ficación ayuda a eliminar los efectos cascada 
del IVA? 
How does the Government consider that this chan ge helps to remove the cascading effects of 
VAT? 
¿Por qué el gobierno de China informa que los ingresos fiscales del estado se han reducido en 
virtud de esta modificación, teniendo en cuenta que los bienes de capital importados ya no se 
benefician de una desgravación arancelaria? 
Why does the Government report that tax revenue declined as a result of this change, taking 
into account that imported capital goods are now not entitled to tariff exemption? 
Answer (for the above 2 questions) 
Production-based VAT is transformed into consum ption-based VAT in this VAT reform. No VAT 
levied on the fixed assets purchased was allowed to be deducted under the production-based VAT, 
which therefore has a large tax base but repetitiv e taxation. Now VAT levied on the fixed assets 
purchased is allowed to be deducted under the co nsumption-based VAT, as a result the tax base 
shrinks to quite an extent while repetitive taxation is eliminated on a thorough basis. Since repetitive 
taxation is eliminated, national revenue surely is affected.   WT/TPR/M/230/Add.1 
 Page 495 
 
 
  Párrafo 114, página 60 
Paragraph 114, page 51 
El informe menciona que China otorga incentivos fiscales a las PYMEs, las cuales se benefician de 
reducciones del impuesto sobre la renta y del IVA, entre otros incentivos, pagando por ejemplo el impuesto sobre la renta a un tipo del 20% (en lugar del tipo legal del 25%) e incluso llegando obtener 
una reducción del 50% de esa renta. Los pequeños contribuyentes, que estaban sujetos a tipos del IVA 
del 6% o del 4% ahora pagar un IVA a un tipo del 3%. 
The report mentions that tax incentives are given to SMEs, which may benefit from, inter alia , lower 
enterprise income tax and lower VAT, for example paying enterprise income tax at a rate of 20% 
(instead of the statutory 25 per cent) and even in  some cases having their taxable income reduced by 
half. Small-scale tax payers, who were subject to VAT at 6 per cent or 4 per cent, now pay VAT at 
3%. 
¿Cómo se compatibiliza esta exención o reducción de  impuestos indirectos con lo dispuesto en el 
Acuerdo sobre Subvenciones y Medidas Compensatorias? 
How is this exemption from or reduction of indirect taxes consistent with the provisions of the 
Agreement on Subsidies and Countervailing Measures? 
¿Cuáles son los parámetros que utiliza China pa ra considerar a una empresa como "Pequeña o 
Mediana"? 
What parameters does China apply for considering  an enterprise as "small or medium-sized"? 
Answer (for the above 2 questions) 
For the definition of small and medium-sized en terprises (SMEs) in China, please refer to the  Interim 
Provisions on the Standards for Small and Medium-sized Enterprises  (No.143 [2003] of the former 
State Economic and Trade Commission). Argentina ma y request for this rule through the Permanent 
Mission of China to the WTO. 
In addition, it should be clarified that small-scale tax payer is a taxation term inology and is different 
from the concept of SME. Detailed information c oncerning the support of the Chinese government to 
SMEs is found in the subsidy notification (G/SCM /N/123/CHN) that China submitted in accordance 
with the Subsidies Agreement. It is a common practice among WTO members to provide support for 
SMEs, and the support from the Chinese government in this respect as seen in the subsidies 
notification is fully consistent with the Subsid ies Agreement. China will update the information 
concerning its support to the SMEs in the comi ng 2005-2008 subsidies notification that it would 
submit shortly.    
i) Política de competencia y protección de los consumidores 
i) Competition and consumer protection policy 
b) Protección de los consumidores 
b) Consumer protection 
Párrafos 149 y 150, página 71 
Paragraphs 149-150, page 61 
El informe señala que China aplica un sistema de control de la calidad de los productos 
comercializados, en virtud de las Leyes sobre Calidad de los Productos y de Represión de la WT/TPR/M/230/Add.1 
Page 496  
 
  Competencia Desleal. No obstante, el informe re salta que, desde el año 2000, determinadas empresas 
están exentas de la inspección que realiza el Orga nismo de Control de la Calidad (AQSIQ), con el 
objeto de facilitar la libre circulación de mercancí as dentro del territorio chino, cuyas provincias 
imponen diferentes criterios técnicos para estable cer reglamentos o métodos de inspección. Con 
arreglo a este sistema de exenciones, las empresas "admisibles" podían presentar una solicitud a la 
oficina local de inspección de la calidad, que remití a los documentos de solicitud a la AQSIQ, la cual 
concedía, eventualmente, la aprobación cuya valid ez era de tres años, con posibilidad de renovación.  
The report states that China applies a quality contro l system for marketed products by means of the 
Product Quality Law, and the Anti-Unfair Competition Law.  Nevertheless, the report points out that since 2000 certain enterprises have been exempt ed from AQSIQ quality inspection in order to 
facilitate the free flow of goods within China, as local governments were impo sing different technical 
or inspection criteria.  Under the exemption system , "qualified" enterprises could apply to the local 
quality inspection bureau, which forwarded the app lication documents to the AQSIQ.  Approval was 
granted by AQSIQ and was valid for three years, with possibility of renewal. 
¿Estas exenciones son también aplicables a las empresas que exportan a China? En caso de 
respuesta negativa ¿Por qué? 
Are these exemptions also applicable to enterp rises exporting to China?  If not, why not? 
¿Cuáles son los criterios que utiliza las AQSIQ para determinar la "admisibilidad" de las 
empresas en este régimen de exenciones? 
What criteria does AQSIQ use to determine "eli gibility" of enterprises for the exemption 
regime? 
¿Tiene pensado el gobierno de China un plan para  armonizar los criterios para la elaboración 
de reglamentos técnicos y métodos de inspecci ón en las distintas regiones? ¿No sería este un 
método más eficaz para facilitar la comercializaci ón dentro del territorio, en lugar de establecer 
un régimen de exenciones para determinadas empresas? 
Does the Government plan to harmonize the cri teria for drawing up technical regulations and 
inspection methods among the provinces?  Would th is not be a more effective way of facilitating 
trade within China, rather than establishing a system of exemptions for specific enterprises? 
Answer (for the above 3 questions) 
The inspection exemption was terminated in 2008.  
v) Propiedad Intelectual  
v) Intellectual property rights 
Recuadro III.2 ("Observancia de los DPI"), página 73 
Box III.2 ("IPR enforcement"), page 63 
El informe indica que el 17 de marzo de 2010, el Consejo de Estado de China adoptó la decisión de 
revisar el Reglamento sobre protección en aduana de los derechos de propiedad intelectual.  
The report mentions that on 17 March 2010, the St ate Council adopted the decision to revise the 
Regulations for Customs Protection of Intellectual Property Rights.  WT/TPR/M/230/Add.1 
 Page 497 
 
 
  ¿Qué modificaciones se están estudiando en virtud de esta revisión? 
What changes are being studied in the context of this revision? 
Answer 
The amended Regulations on Customs Protection of Intellectual Property Rights  was promulgated by 
the State Council on 24 March 2010 and came in to effect on 1 April 2010. Please refer to 
http://www.gov.cn/zwgk/2010-03/27/ content_1566 452.htm for more detailed information. 
IV. P OLÍTICAS COMERCIALES , POR SECTORES  
IV. T RADE POLICIES BY SECTOR  
1) I NTRODUCCIÓN  
1) I NTRODUCTION  
Párrafo 1, página 80 
Paragraph 1, page 69 
El informe indica que en algunos sectores existe un ex ceso de inversión debido a la tendencia de los 
bancos de propiedad estatal a favorecer a las grandes empresas estatales. En contraposición, las pequeñas empresas privadas nacionales prácticamente no tienen acceso al crédito y se financian en 
gran medida con fondos proporci onados por familiares y amigos. 
The report states that some sectors tend to be ove r-invested due to state owned banks' tendency to 
favour large SOEs.  In contrast, small domestic pr ivate companies lack a ccess to credit and rely 
heavily on funds raised from family and friends. 
¿Qué medidas está tomando el gobierno de China para solucionar esta desigualdad? 
What measures is the Government t aking to overcome this inequality? 
Answer 
China has paid much attention to the difficulties of SMEs in their access to credit and has always tried 
to resolve this problem. For example, the Chinese government has been actively exploring effective 
means to support financing of SMEs through corporat e bonds. Due to their limited strength, relatively 
low credit rating and low market recognition, the SM Es suffer from relatively high financing cost and 
are facing more obstacles in issuing bonds. In r ecent years, the Chinese gove rnment has successfully 
facilitated the issuance of collective bonds by some SMEs through the model of "unified organization, 
unified guaranty, collective issu ance, and separate debt and repayment". In 2007, 1 billion Yuan 
Shenzhen SMEs Collective Bonds  (20 enterprises) and 305 milli on Yuan ZhongGuanCun High-tech 
SMEs Collective Bonds (4 enterp rises) were issued on a pilot b asis. Since the outbreak of the 
international financial crisis, China has adopted a more active attitude in promoting the development 
of SMEs collective bonds. On 28 April 2010, the 515 million Yuan Dalian SMEs Collective Bonds 
(8 enterprises) was successfully issued. 
In order to improve further the operation environm ent of the SMEs and promote a rapid and sound 
development of these enterprises, the State Council issued on 19 September 2009 Certain Opinions on 
Further Accelerating the Development of Small and Medium-Sized Enterprises (available at 
http://www.gov.cn/zwgk/2009-09/22/content_1423510 .htm). The policy document particularly 
proposed to effectively alleviate the difficulties in  financing of SMEs, including implementation of 
the financial policies supporting small enterprises,  enhanced financial services to SMEs, further WT/TPR/M/230/Add.1 
Page 498  
 
  expansion of the financing channe ls for SMEs, improvement of the credit guarantee system for SMEs, 
and provision of credit information service to  facilitate financing of these enterprises. 
3) E
NERGÍA  
3) E NERGY  
Párrafo 35, página 88 
Paragraph 35, page 76 
En el párrafo 35, se indica que uno de los importantes objetivos de política de China incluye la 
reducción de la intensidad energética y, con ello , la protección del medio ambiente En noviembre de 
2009, el Consejo de Estado anunció que para fi nales de 2020, China deberá haber reducido sus 
emisiones de carbono por unidad del PIB entre un 40% y un 45% con respecto a su nivel de 2005. 
The report mentions that a major policy goal is reducing energy intensity and thus protecting the 
environment;  the Eleventh Five-Year Plan (2006- 10) set a compulsory target to reduce energy 
intensity by 20% by 2010.  In November 2009, the State Council announced that by the end of 2020, China is to reduce its carbon emissions per unit of  GDP between 40% and 45% from their 2005 level. 
¿Cuáles son las medidas que se aplicarán al sect or industrial a los efectos de alcanzar estos 
objetivos? 
What measures will be applied to the indus trial sector to achieve these objectives? 
Answer 
China's energy consumption per unit of GDP h as decreased by 14.38% accumulatively since 2006. 
However, there is still gap to achieve the goal of 20%  decrease by the end of "the Eleventh Five-Year 
Plan". At present, China is adopting the following measures to strengthen energy saving, consumption 
reduction, emission reduction and pollution treatment . The first is to strengthen the work of 
eliminating outdated production capacity. The second is to conduct special inspections over the 
implementation of energy consumption limits. The th ird is to impose strict control on new projects 
with high energy consumption and high pollution a nd of surplus capacity and strengthen the energy 
saving appraisal and examination of industrial fixe d assets investment projects. The fourth is to 
promote the key industries and key enterprises to meet the set energy efficiency standards. The fifth is 
to strengthen technical reconstruction and inno vation for energy saving and emission reduction 
purposes. The sixth is to improve policies and measures favourable for energy saving and emission 
reduction. The seventh is to set up industrial en ergy saving and emission reduction monitoring and 
alerting system and formulate emergency response plan s. The eighth is to strengthen the publicity on 
industrial energy saving, consumption reducti on, emission reduction and pollution treatment. 
Párrafo 36, página 88 
Paragraph 36, page 76 
En el párrafo 36 se destaca que a pesar de la importa ncia creciente de las cuestiones vinculadas con la 
energía, China aún carece de un marco normativo de importancia en el sector. 
It is stressed in this paragraph that despite the still growing importance of energy issues in China, 
there is currently no comprehensive law for the sector. 
¿Tiene pensado el gobierno de China establecer un marco normativo general para el sector, en 
lugar de los numerosos reglamentos y documento s administrativos que hasta ahora lo rigen?   WT/TPR/M/230/Add.1 
 Page 499 
 
 
  5. Does the Government intend to introduce a comprehensive legal framework for the sector, 
replacing the many regulations and admi nistrative documents currently governing it?  
Answer 
China is in the process of drafting the Energy Law , which will serve as an important regulatory 
framework for the energy sector.   
Párrafo 38, página 89 
Paragraph 38, page 77 
En el párrafo 38 el informe indica que los productos energéticos gozan de un bajo grado de protección 
arancelaria, pero sus importaciones son a menudo obj eto de comercio de Estado y algunos de ellos 
están sujetos a licencias automáticas de importación. 
The report states that tariff protection on energy pro ducts is low, but their im ports are often subject to 
state trading, and some energy products are subject to automatic import licensing. 
¿Cuáles son las causas por las cu áles estos productos son objeto a comercio de Estado y licencias 
de importación y cuáles son estos productos? 
Why are some of these products subject to state trading? 
¿Cómo se administran las licencias de importación? 
How are the import licences administered? 
Answer (for the above 2 questions) 
That a small number of products are subject to state trading in China is the result of the negotiations 
held for China's accession to the WTO. Please refe r to Annex 2 of China's Accession Protocol for 
more detailed information concerning state tradi ng. On administration of licenses in China, please 
refer to the notifications China has been submitting to the Committee on Import Licensing to respond 
to the Questionnaire on Import Licensing Procedures,  namely G/LIC/N/3/CHN/1, G/LIC/N/3/CHN/2, 
G/LIC/N/3/CHN/3, G/LIC/N/3/CHN/4, G/LIC/N/3/CHN/5, G/LIC/N/3/CHN/6, G/LIC/N/3/CHN/7, G/LIC/N/3/CHN/8.  
Párrafo 39, página 90 
Paragraph 39, page 77 
En el párrafo 39, se indica que, con el objetivo de no fomentar la elaboración de productos altamente 
contaminantes, la mayoría de los productos de l carbón y algunos productos del petróleo no pueden 
importarse en régimen de depósito en almacén a duanero como insumos que se han de elaborar 
conforme al régimen de "tráfico de perfeccionamiento". No obstante, se permiten sus importaciones en el marco de "intercambios comerciales normales", es decir, si se pagan los aranceles aplicados a los 
insumos importados. 
The report mentions that so as not to encourage the domestic processing of products that are highly 
polluting, most coal products and some pro cessed petroleum products cannot be imported under 
bonded status as inputs to be processed under "processing trade".  However, their imports are still allowed under "normal trade", that is, if th e import tariffs are paid on imported inputs. WT/TPR/M/230/Add.1 
Page 500  
 
  Si el objetivo final es no fomentar la elabor ación de productos altamente contaminantes ¿Cuáles 
son las razones para permitir el  ingreso de estos productos en  los casos en que paguen los 
derechos aduaneros correspondientes? 
If the final objective is not to encourage the pr ocessing of highly polluting products, what are 
the reasons for allowing entry of these products  if the applicable import tariffs are paid? 
Answer 
Processing trade is a type of trade facilitating meas ure with special supervision of the Customs where 
goods particularly spare parts and raw materials are imported in bond for the purpose of re-export 
after being assembled or processed. It is adopted by many countries especially the developing countries, aiming to giving full play to the country's comparative advantages. That China would not 
allow import under processing trade means only that China does not see that assembly or processing 
in China of certain raw materials should be enco uraged with the facilitation measure of processing 
trade for such purpose as environment protection. It does not mean that import under normal trade 
should also be prohibited. In order not to distort normal trade, import under normal trade is allowed as 
long as the importers consider it economically still practical. 
Párrafo 40, página 90 
Paragraph 40, pages 77-78 
Se señala que "El Gobierno está considerando(…) la posibilidad de establecer un impuesto ambiental 
en el período abarcado por el Duodécimo Plan Quinquenal (2011-2015)". 
It is mentioned that the Government is consid ering introducing an environment tax during the 
12
th Five-year period (2011-2015). 
¿Podría China especificar el alcance de ese im puesto ambiental, cuáles serían los sectores 
productivos alcanzados y su ámbito de aplicac ión (si productos nacionales y/o importados)? 
Please give details of the scope of this envi ronment tax, the production sectors covered and 
scope of application (whether applicable to  domestic and/or imported products). 
Answer Regarding the environment tax, rele vant authorities are currently stud ying on the feasibility of levying 
taxes on pollution discharges to reform the current practice of collecting pollution discharge fees with 
reference to the successful experience of other countries in reducing pollution discharges through 
pollution discharge tax. Further information will be provided at appropriate time according to the 
progress. 
4) S
ECTOR MANUFACTURERO  
4) M ANUFACTURING  
Párrafo 45, página 91 
Paragraph 45, page 78 
El informe indica que China ha seguido aplicando medi das de intervención directa para "orientar" los 
recursos, especialmente hacia el sector manufacturero. En particular, está utilizando políticas 
industriales, junto con políticas fiscales y monetari as expansionistas.  Por ejemplo, en 2009, publicó 
planes de revitalización industrial con respecto a 10 sect ores. El Ministerio de Industria y Tecnología 
de la Información (MIIT) se propone fomentar el d esarrollo de esos sectores ajustando los tipos de  WT/TPR/M/230/Add.1 
 Page 501 
 
 
  desgravación del IVA respecto de las exportaciones,  concediendo préstamos preferenciales, apoyando 
su innovación y "orientando" la consolidación de las estructuras industriales. 
The report states that China has been continuing w ith its direct intervention measures to "guide" 
resources into certain sectors of the economy, particularly manufacturing.  In particular, it is using industrial policies, combined with expansiona ry fiscal and monetary policies, to boost the 
development of the manufacturing sector.  For exampl e, in 2009, China issued industrial revitalization 
plans for ten sectors.  The Ministry of Indust ry and Information Technology (MIIT) intends to 
promote the development of these sectors by adjusting the VAT rebate rates on exports, providing preferential loans, supporting their innovation, and "gui ding" the consolidation of industrial structures. 
¿En qué consisten los planes de revitalización y cuáles son los sectores a los cuáles se aplican? 
What do these revitalization plans consist of, and which industries are covered? 
¿Que otras medidas de intervención directa utiliza  China para "orientar" los recursos hacia el 
sector manufacturero, además de los planes de revitalización? 
What other direct intervention measures do es China use to "guide" resources towards 
manufacturing, besides the revitalization plans? 
¿En qué consisten los préstamos preferenciales otorgados por el MIIT? 
What do the preferential loans granted by MIIT consist of? 
Answer (for the above 3 questions) 
The ten industries having adjustment and revitalization plans are steel, automobile, electronics and 
information, textiles, non-ferrous metals, equipm ent manufacturing, light industry, petrochemical, 
ship-building, logistics. 
Apart from adjustments of the VAT rebate policy on export of certain products, tax policies China 
adopted under the industrial revitalization plans fo r ten sectors are mainly the purchase tax reduction 
by half, or 5%, for passenger cars with displace ment at and below 1.6 liters during the period from 
20 January to 31 December 2009. In 2010, the pur chase tax on these cars is adjusted backward to 
7.5% from 5%, which is still lower than the normal rate of 10% and will be  valid through the year. 
Tax rebate on exports is an internationally prev ailing practice. China adjusted the value-added tax 
rebate rates in the fight against global financia l crisis because enterprises have suffered great 
difficulties with the shock of the crisis and have requested strongly for such adjustments. Argentina 
may refer to our answer to the U.S. Question 30 wh ere such background situation is elaborated with 
an example. China maintains that si nce the adjustments made to the ta x rebate rates on exports strictly 
follow the principle that the rebate rate be no higher than the rate levied, they are not inconsistent with 
WTO rules. 
Financial supports provided under th e industrial revitalization plans for ten sectors are mainly those to 
promote direct consumption, including subsidi es for home appliances going to the countryside, 
automobiles and motorbikes to the countryside, and "old for new" of household appliances. Policies 
and measures including those aforesaid which have b een taken by China in the fight against the global 
financial crisis have been notified to the mon itoring mechanism of the WTO Trade Policy Review 
Body (TPRB) for the financial crisis. For more deta ils of the policies and measures, please refer to the 
information contained in the monitoring report dr afted by the WTO Secretariat under the mechanism 
which has been verified by China. WT/TPR/M/230/Add.1 
Page 502  
 
  Regarding preferential loans, China would like to take the opportunity to clarify that, commercial 
banks in China follow market principles when providi ng loans. Whether to provide loans to certain or 
certain types of clients, under what conditions to  provide loans, these are all decided by commercial 
banks themselves based on their individual business development strategy and their studies of the 
credit record of the clients, as well as such f actors as costs, earnings, assets quality and risks etc. 
5) S
ERVICIOS  
5) S ERVICES  
vi) Turismo 
vi) Tourism 
Párrafo 133, página 113 
Paragraph 133, pages 97-98 
El informe indica que las agencias de viajes con inve rsión extranjera tienen prohibido el suministro de 
servicios de viajes al exterior. Sin embargo esa actividad está permitida con la autorización del 
Consejo de Estado o con arreglo a las disposic iones de ciertos acuerdos de libre comercio. 
The report states that foreign-invested travel ag encies are prohibited from providing outbound travel 
services.  However, such business is allowed with  the approval of the State Council or under the 
provisions of certain FTAs. 
¿Cuáles son las razones por las cuáles no se le s permite a agencias de viajes con inversión 
extranjera suministrar servicios de viajes al exterior? 
What are the reasons for not a llowing foreign-invested travel agencies to provide outbound 
travel services? 
¿Qué requisitos debe cumplir la agencia para ob tener la autorización del Consejo de Estado? 
Teniendo en cuenta que, según el informe, no ex isten acuerdos de libre comercio firmados por 
China que permitan a agencias de viaje extranj eras suministrar servicios al exterior ¿Existen 
agencias autorizadas actualmente bajo la autorización del Consejo de Estado? 
What requirements must an agency satisfy to obtain State Council approval?  Bearing in mind 
that, according to the report, China has not si gned any free trade agreement allowing foreign 
travel agencies to provide outbound services, are there currently any agencies that have obtained State Council approval? 
Answer (for the above 2 questions) 
In accordance with Article 23 of the Regulations on Travel Agencies  implemented on 1 May 2009, 
foreign-invested travel agencies may not engage in the business of Chinese citizens' traveling to 
foreign countries and to Hong Kong China, Macao China and Chinese Taipei, unless it is decided by 
the State Council or otherwise provided for in the free trade agreements signed by China with other 
countries or regions. Therefore, foreign-invested travel agencies may not engage in the outbound 
travel services for Chinese citizen s at current stage. However, some  Hong Kong China-invested travel 
agencies established in Guangdong Province now ha ve started piloting on local Chinese citizens' 
outbound group travel to Hong Kong China and Macau  China in accordance with the relevant 
provisions of the CEPAs between mainland Chin a and Hong Kong China and Macau China. In 
addition to that, to further liberalize the touris m market in a proactive manner, Chinese relevant 
authorities are now deliberating and formulating regul atory rules for joint-vent ure travel agencies to  WT/TPR/M/230/Add.1 
 Page 503 
 
 
  carry out pilot operation of outbound travel of Chinese citizens. Relevant pilot program will be 
launched after such rules are promulgated. 
Asimismo, se indica que en mayo de 2009 entró en vigor el nuevo Reglamento sobre las agencias de 
viajes que "(…) permite abrir sucursales a las agencias de viajes con inversión extranjera ya establecidas en China, autoriza a las personas físicas o jurídicas extr anjeras para establecer agencias 
de viajes en China (anteriormente , sólo las agencias de viajes extr anjeras o empresas extranjeras cuya 
actividad esencial estuviese en el sector del turismo podían realizar  tales inversiones en China) y 
concede trato nacional a las agencias de turismo con inversión extranjera al reducir la cuantía del 
capital social requerido." 
It is also stated that on 1 May 2009, the new Regul ations on Travel Agencies came into force;  the 
new regulations "allow foreign-invested travel ag encies already established in  China to open branch 
offices, allow any foreign natural or legal persons to establish trav el agencies in China (previously, 
only foreign travel agencies or foreign enterprises  whose core business was in tourism sector were 
allowed to invest in China), and offer foreign- invested tourism agencies national treatment by 
lowering the amount of required registered capital". 
Dado que ya ha transcurrido un año desde la entr ada en vigor de este nuevo Reglamento, ¿han 
realizado las autoridades chinas una evaluación de sus resultados? Si es así, ¿podrían brindar 
información sobre esos resultados? 
Given that a year has passed since the new Regu lations came into force, have the authorities 
carried out an assessment of its results?  If so, please provide information on the results. 
Answer China has received 18 applications from foreign natu ral persons and legal persons for travel agency 
establishment since September 2009 and approved 12 applications according to the requirements and 
standards set out in the said Regulations. These 12 travel agencies operate well. 
Por otra parte, se explica que si bien, en principi o, las agencias de viajes con inversión extranjera 
tienen prohibido el suministro de servicios de viaj es al exterior, con arreglo al Reglamento sobre las 
agencias de viaje de 2009, esa actividad está perm itida en ciertos casos. Asimismo, se menciona que 
"actualmente, las autoridades están acelerando el desarrollo de un programa experimental que 
permitirá a las empresas extranjeras suministrar servicios de viajes al exterior." 
It is also stated that while foreign-invested trav el agencies are prohibited, in principle, from providing 
outbound travel services, under the revised regulati ons such business is allowed in certain cases and 
that "currently the authorities are accelerating a pilot programme to allow foreign companies to 
provide outbound travel businesses". 
¿Podrían las autoridades chinas brindar detalles sobre este programa experimental? 
Please provide details concerning this pilot programme. 
Answer 
Relevant measures on pilot program allowing foreign travel agencies to engage in outbound services 
are under discussion. The measures will be released wh en ready and further liberalization in this area 
will be progressed in line with the development of the market. WT/TPR/M/230/Add.1 
Page 504  
 
  Párrafo 134 , página 114 
Paragraph 134, page 98 
Se indica que, con el objetivo de facilitar los viaj es en grupo de ciudadanos chinos a otros países, 
China ha suscrito memorándums de entendimiento sobre la condición de "destino autorizado" con 
139 países, en virtud de los cuales las agencias de viajes de China sólo pueden vender viajes en grupo 
a los países y economías que tengan esa condición. 
The report states that in order to facilitate group travel by Chinese citizens to foreign countries China 
has concluded memoranda of unde rstanding (MOUs) for approved-des tination status (ADS) with 
139 countries and regions, which allow travel agencies in China to sell group tours only to ADS countries. 
¿Qué requisitos debe cumplir un país para ob tener la condición de "destino autorizado"? 
What requirements must a country fulfil to  obtain "approved-destination status"? 
Answer 
China has not formulated any uniform standards or requirements on whether a place can become the 
"destination of outbound travel" of Chinese citizens. The specific conditions are subject to bilateral 
consultations. 
¿Cuáles son los países que actualmente tienen esa condición? 
Which countries currently have this status? 
Answer 
Destinations for outbound travel of Chinese citizen s now cover 139 countries and regions. The list is 
available on the website of the National Tourism Administration of China at http://www.cnta.gov.cn. 
¿De qué manera entiende China que la designació n de "destinos autorizados" facilita los viajes 
en grupo de ciudadanos chinos a otros países? 
How does China consider that the designation of "approved destinations" facilitates group 
travel by Chinese citizens abroad? 
Answer By designating "outbound travel destinations " and signing memorandum of understandings, the 
parties will provide guarantees in respect of safety,  travel environment, language and so on according 
to the commitments in the memorandum, which will protect the interests of Chinese travelers.  
WT/TPR/G/230, I
NFORME DEL GOBIERNO  
WT/TPR/G/230, R EPORT BY THE GOVERNMENT  
II. E NTORNO ECONÓMICO GENERAL Y DIRECCIÓN DE LAS POLÍTICAS  
II. G ENERAL ECONOMIC ENVIRONMENT AND POLICY DIRECTION  
3) P ROMOCIÓN DE LA TRANSFORMACIÓN DEL MODELO DE DESARROLLO ECONÓMICO  
3) P ROMOTING THE TRANSFORMATION OF THE PATTERN OF ECONOMIC DEVELOPMENT   WT/TPR/M/230/Add.1 
 Page 505 
 
 
  iv) Intensificación de los esfuerzos para la conservación de energía y la reducción de la 
contaminación 
iv) Intensifying efforts for energy conservation and pollution reduction 
Párrafo 39, página 13 
Paragraph 39, page 12 
Se indica que "en 2009, el Gobierno chino publicó un sistema de índices para la evaluación de la 
producción limpia en 11 ramas de producción".  
It is stated that "in 2009, the Chinese Government  released the system of indices for clean production 
assessment in 11 industries". 
¿Podría China brindar más información sobre e se sistema de índices, indicando cuáles son las 
ramas de la producción alcanzadas?  
Please provide more information on this system  of indices, indicating which industries are 
concerned. 
Answer 
In order to implement the Law of the People's Republic of China on Promoting Clean Production , to 
evaluate the quality of enterprises' clean productio n, and to guide and push forward enterprises to 
carry out clean production, a series of clean produc tion evaluation indicators were formulated and 
issued by the National Development and Reform Commission in accordance with the Circular of the 
General Office of the State Council on Forwarding the Opinions of the National Development and 
Reform Commission and Other Authorities on Ac celerating and Pushing forward Clean Production  
(GuoBanFa No. 100 of 2003) and the General Rules on Formulating th e Evaluation Indicator System 
for Industrial Clean Production (GB/T20106-2006), covering such industries as electrolytic 
manganese, cement, fermentation, soda ash, machiner y, sulfuric acid, leather processing, packaging, 
thermal power, phosphate, tires, lead-zinc, ceramic s, coating manufacturing and so on. Please visit 
http://www.ndrc.gov.cn for more details. 
III. D ESARROLLO DEL COMERCIO Y POLÍTICAS COMERCIALES  
III. T RADE DEVELOPMENT AND TRADE POLICIES  
2) F OMENTO DEL COMERCIO Y LA INVERSIÓN  
2) P ROMOTING TRADE AND INVESTMENT  
iv) Compromiso con un desarrollo  equilibrado de las import aciones y las exportaciones 
iv) Committed to balanced deve lopment of import and export 
Párrafo 71, página 21 
Paragraph 71, page 19 
Se indica que "al tiempo que ha tratado de estabilizar las exportaciones, el Gobierno chino ha 
mantenido su mercado abierto y se ha esforzado por aumentar las importaciones, a fin de lograr un 
desarrollo mucho más equilibrado de las importaciones y las exportaciones." 
The report states that "while endeavouring to stab ilize export, the Chinese Government has kept its 
market open and made efforts in expanding importa tion so as to achieve a much more balanced 
development of import and export". WT/TPR/M/230/Add.1 
Page 506  
 
  Se reconoce el esfuerzo realizado por China al resp ecto, y nuestro país comparte este enfoque de 
desarrollo equilibrado de importaciones y export aciones. ¿Podría China cuantificar para su 
modelo económico cuál sería la meta deseable de desarrollo equilib rado de sus importaciones en 
función al nivel de sus exportaciones? 
We recognize China's efforts in this regard and share the approach of balanced development of 
imports and exports.  Could China quantify, fo r its economic model, th e desirable target for 
balanced development of its imports in relation to the level of its exports? 
Answer 
Both export and import levels are dynamic. As a big trading nation, China not only pays great 
attention to exports, but also imports. We pursue a balanced development of import and export.  
Since the reform and opening-up, with the econom y growing and exports increasing, China's import 
scale has also been rapidly expanding. China's goods imports increased from 10.9 billion US dollars 
in 1978 to 1 trillion US dollars in 2009, up by 92 times. In the 9 years since China's WTO accession, China's newly added imports each year either appr oached or exceeded 100 billion US dollars. China's 
share in the world's total imports increased from around 1 percent in th e past up to 8 percent in 2009, 
making China second largest importing country in the world. 
China's increase of imports has not only met with its increasing domestic demands, but also created 
more market opportunities for other countries and regi ons to export more to China. China's import has 
played an import role in stabilizing the world ec onomy in the battle of tackling the recent financial 
crisis. In the first half of 2010, China's imports  embraced rapid growth, increasing by 52.7 percent 
compared with the same period of last year, 17.5 percentage points higher than the growth rate of 
export, thus reducing the trade surplus by 42.5 percen t year-on-year. In the future, China will continue 
to open up its market by taking concrete meas ures to expand imports to achieve a balanced 
development of trade. 
COSTA RICA
 
Informe de la Secretaría, WT/TPR/S/230  
Report by the Secretariat, WT/TPR/S/230  
III. P OLÍTICAS Y PRÁCTICAS COMERCIALES , POR MEDIDAS  
III. T RADE POLICIES AND PRACTICES BY MEASURE  
1) Introducción 
1) Introduction 
¿En qué consiste la aplicación de un impuest o ambiental como alternativa a las actuales 
restricciones a las exportaciones, con el fin de  proteger el medio ambiente y conservar los 
recursos naturales? ¿A cuáles productos se les aplicaría dicho impuesto? ¿ (Página 28, párrafo 6) 
With reference to the levying of an environmenta l tax as an alternative to the current export 
restraints in order to protect the environmen t and conserve natural reso urces, what does this 
consist of in practice?  Which products would the tax be applied to?  (Page 24, paragraph 6)  WT/TPR/M/230/Add.1 
 Page 507 
 
 
  Answer 
Relevant authorities are currently studying on the issu e of environmental tax. Related information will 
be released at appropriate time in light of the progress of the work. 
Podrían abordar con mayor detalle el concepto de  "NMF aplicados provisionalmente. ¿A cuáles 
productos se les aplica? Estos aranceles se aplican en respuesta a precios elevados o con el 
objetivo de equilibrar la oferta y demanda int erna de productos? (P ágina 33, párrafo 19) 
Please provide further details about the "interi m" MFN tariff rates.  Which products are 
covered?  Are these duties applied in response to high prices or to balance domestic supply of 
and demand for products?  (Page 29, paragraph 19) 
Answer In accordance with the Regulations on Import and Export Duties , interim tariffs may be applied to 
imported goods within a certain period. The Cu stoms Tariff Commission of the State Council is 
responsible for making adjustments to the inte rim tariffs. In line with the national economic 
development situation, the Customs Tariff Commission  of the State Council may put forth adjustment 
suggestions of interim tariff rates, applicable period, etc and implement such adjustments upon 
approval by the State Council. Interim duty rates are no higher than MFN duty rates, neither are they 
higher than the bound duty rates. For more details on interim tariffs, please refer to the Customs Tariff 
of Import and Export of the People's Republic of China 2010. 
2) 
MEDIDAS QUE AFECTAN DIRECTAMENTE A LAS IMPORTACIONES  
2) MEASURES DIRECTLY AFFECTING IMPORTS  
vii) Normas y otras prescripciones técnicas 
vii) Standards and other technical requirements 
a) Normas y reglamentos técnicos a) Technical standards and regulations 
En caso que las normas voluntarias se vuelvan obligatorias por referencia en los procedimientos 
obligatorios de evaluación de la conformidad,  el operador económico que quiera exportar sus 
productos a China, ¿debe pagar para conocer el contenido de dicha norma, o al incorporarse 
como obligatoria para la importación de produc tos se vuelve de alguna forma de conocimiento 
público? Adicionalmente, al volverse obligatoria dich a norma, se notifica en algún momento a la 
Secretaría del Comité de Obstáculos Técnicos al  Comercio de la OMC, en cumplimiento a las 
obligaciones de transparencia derivadas del Acuerdo OTC? (Página 41, párrafo 43) 
Where a voluntary standard becomes mandatory because it is referenced in mandatory 
conformity assessment procedures,  do economic operators wishing to  export to China have to 
pay to learn the contents of the standard, or is there some form of public disclosure of the 
information when the standard becomes mandatory for imports?  Secondly, when the standard 
becomes mandatory, is the secretariat of the WTO Committee on Technical Barriers to Trade 
notified in due course, in compliance with  the transparency obligations under the TBT 
Agreement?  (Page 35, paragraph 43) 
Answer 
Technical regulations and conformity assessmen t procedures of China are all published on the 
gazettes and official websites of competent authorities.  China will also fulfil its due obligations in line 
with the TBT Agreement.  If voluntary sectoral standards are incorporated in mandatory conformity WT/TPR/M/230/Add.1 
Page 508  
 
  assessment procedures, China will notify to the WTO according to the requirement of the TBT 
Agreement. 
c) Certificación y acreditación 
c) Certification and accreditation 
En el caso del sello de conformidad CCC aplicado por China para algunos productos, cual es la 
justificación para que se controle el cumplimien to del marcado CCC en los productos importados a 
nivel de frontera, en lugar de realizar se en mercado?  (Página 44, párrafo 55) 
With regard to the China Compulsory Certification (CCC) mark applied to some products, what is the 
justification for controlling compliance with the CCC mark in the case of imports at the border rather 
than on the market?  (Page 38, paragraph 55) 
¿Podría China aceptar los resultados de evaluaci ón de la conformidad realizada por organismos 
evaluadores ubicados en terceros pa íses, para optar por el marca do CCC? En caso afirmativo, 
¿cuál sería el procedimiento para el reconocimien to de esos resultados? (Página 44, párrafo 55) 
Could China accept the results of conformity a ssessment carried out by assessment bodies in 
other countries to grant the CCC mark?  If so , what would be the procedure for obtaining 
recognition of such results?  (Page 38, paragraph 55) 
¿Es el Centro de la Calidad de China (CQC) el  único organismo encargado de la certificación 
voluntaria o marcado CQC? (Página 44, párrafo 58) 
Is the China Quality Certification Centre (CQC) the sole body responsible for voluntary 
certification or the CQC mark?  (Page 38, paragraph 58) 
¿Podría un organismo certificador ubicado en un tercer país ser autorizado para encargarse del 
proceso de certificación CQC? (Página 44, párrafo 58) 
Could a certification body located in another country be authorized to carry out the CQC 
process?  (Page 38, paragraph 58) 
¿Cual es el objetivo del marcado voluntario CQC? (Página 44, párrafo 58) What is the purpose of the voluntary CQC mark?  (Page 38, paragraph 58) 
¿Cuáles son los beneficios que brinda China (a  través de su institución "China National 
Accreditation Service for Conformity Assessment " -CNAS)  a otros países que son firmantes de 
acuerdos de reconocimiento mutuo en el marco de instituciones de acreditación como ILAC e 
IAF?  (Página 44, párrafo 59) 
What benefits does China (through the China Na tional Accreditation Service for Conformity 
Assessment - CNAS) afford to other countries that are signatories to mutual recognition 
agreements in the framework of accreditation bodies such as ILAC and IAF?  (Page 39, 
paragraph 59) 
Answer (all the questions under c)) 
CCC (China Compulsory Product Certification) is a compulsory certification system for certain 
products in China. Relevant produc ts covered by CCC must be certif ied before being exported to or 
sold in China. CQC certification is  voluntary instead of compulsory.   WT/TPR/M/230/Add.1 
 Page 509 
 
 
  The Entry-Exit Inspection and Quarantine authorit ies perform inspection on import commodities at 
the border in accordance with the Law of the People's Republic  of China on Import and Export 
Commodity Inspection and its  Implementation Regulations. 
At present, there are multilateral and bilateral le vels in the international mutual recognition 
framework of China. At the multi-lateral level, China is a member of IECEE-CB and ILAC Mutual 
Recognition Agreements. CCC recognizes test reports by foreign testing bodies which conform to the 
requirements of relevant international mutual reco gnition systems. At the bilateral level, China has 
signed 40 bilateral memoranda of c ooperation and agreements with 32 organizations in 23 countries 
and regions, among which 17 memoranda  are related to the international cooperation of CCC. In the 
framework of the memoranda, foreign certifi cation bodies, through cooperation with CCC 
certification bodies of China, may carry out part of  the CCC certification work. Besides, with the 
establishment of intergovernmental agreements fo r mutual recognition, foreign certification bodies 
approved by China can carry out CCC certification.  
Currently, the guideline for bilateral cooperati on is that Certification and Accreditation 
Administration of China signs framework agreemen ts on cooperation with relevant authorities of 
foreign countries, and then the technical bodies of  both countries negotiate concrete cooperation 
agreements according to the framework agreements. 
d) Etiquetado 
d) Labelling 
¿Para efectos del etiquetado de los productos, cu ando la etiqueta original del producto no está 
redactada en el idioma chino, se permite el us o de etiquetas complementarias o adhesivas para 
corregir dicho inconveniente? (Página 45, párrafo 60) 
6. As regards product labelling, when the orig inal label is not written in Chinese can 
additional or adhesive labels be used to remedy this problem?  (Page 39, paragraph 60) 
Answer 
Please indicate what kind of products Costa Rica is referring to in this question. ¿En caso de información que haga falta en la et iqueta original del producto, es posible utilizar 
etiquetas complementarias o adhesivas para  hacer las correcciones del caso? (Página 45, 
párrafo 60) 
If information is missing in the original label, can additional or adhesive labels be used to 
remedy the problem?  (Page 39, paragraph 60) 
Answer Please indicate what kind of products Costa Rica is referring to in this question. 
2) M
EDIDAS QUE AFECTAN DIRECTAMENTE A LAS IMPORTACIONES  
2) M EASURES DIRECTLY AFFECTING IMPORTS  
ii) Aranceles ii) Tariffs 
3) M
EDIDAS QUE AFECTAN DIRECTAMENTE A LAS EXPORTACIONES  
3) M EASURES DIRECTLY AFFECTING EXPORTS  WT/TPR/M/230/Add.1 
Page 510  
 
  iii) Impuestos de exportación 
iii) Export taxes 
China  señala que existen obstáculos a las importaci ones con el objetivo de "gestionar determinadas 
exportaciones por motivos de conservación de los recu rsos naturales y la conservación de los recursos 
energéticos". Costa Rica solicita  mayor información sobre los siguientes puntos: 
China states that the rationale for the existing import barriers is to manage specific exports in order to 
conserve natural resources or for energy saving.  Co sta Rica would be grateful for further information 
on the following points: 
¿Cuáles son los tipos de medidas que se aplican específicamente por motivos ambientales y de 
que manera se asegura que las medidas cu mplan con este objetivo? (páginas 31, 49 ; 
párrafos 16,77, 78 y 80) 
What types of measure are applied specifically  on environmental grounds, and how does China 
ensure that the measures serve that objective?  (Pages 26, 43, paragraphs 16, 77, 78 and 80) 
¿Cuál es la lista de productos a la que se aplican estas medidas? Si la lista puede ser variada en 
el tiempo quisiéramos tener acceso a la última lis ta existente. (páginas 31 , 49 ; párrafos 16,77, 78 
y 80) 
Please provide the list of products to which these measures apply.  If the list varies over time, 
please provide the latest one.  (Pages 26, 43, paragraphs 16, 77, 78 and 80) 
Answer (for the above 2 questions) 
China has difficulty in understanding the question of Costa Rica, in particular the wording that "China 
states that the rationale for the existing import barri ers is to manage specific exports in order to 
conserve natural resources or for energy saving." We do not know what the "existing import barriers" 
in the sentence mean in this context. It is true  that China now maintains export administration on a 
few products which are for the purpose of protecting environment, protecting human, animal or plant 
life or health, conserving exhaustible natural resour ces, or protecting national security. However, the 
export administration on the few products has nothing to do with the "existing import barriers" as 
mentioned in the question of Costa Rica. China be lieves that such export administration measures do 
not constitute arbitrary discrimination, or disguised  restriction on international trade, and are fully 
consistent with WTO rules. Since the issue concer ned is subject to the ongoing WTO dispute cases of 
DS394, 395 and 398, China will provide further comments after the final rulings. 
In addition, the export administration measures of China including quota and licensing are included in 
China QR notifications which are submitted to the WTO annually. As to the export tax, they are 
available in the Customs Tariff of Import and Ex port of the People's Republic of China which are 
published annually. 
IV. P
OLÍTICAS COMERCIALES , POR SECTORES  
IV. T RADE POLICIES BY SECTOR  
3) Energía 
3) Energy 
Se señala que China ha decido reducir su intensidad energética el 20 % al 2010 y  sus emisiones 
de carbono entre un 40% y un 45%  al 2020 con relación a sus emisiones al 2004. Además del impuesto ambiental y la regulación de precios a ciertos productos, Costa Rica solicita  WT/TPR/M/230/Add.1 
 Page 511 
 
 
  mayor detalle sobre qué medidas económicas toma ría China para lograr estas metas y en qué 
documentos están descritas? (páginas 88 y 90; párrafos 35 y 40) 
7. It is stated that China intends to reduce it s energy intensity by 20 per cent by 2010 and 
its carbon emissions by between 40 per cent and 45 per cent by 2020 from their 2005 level.  Besides the environment tax and price controls  for certain products, Costa Rica would be 
grateful for further information on what econo mic measures China will be taking to achieve 
these targets and on the source documents in which they are described.  (Pages 76 and 77, 
paragraphs 35 and 40) 
Answer 
To realize the above-mentioned objectives, Chin a will mainly adopt the following policies and 
measures: 
First, with respect to industry policies, China will take reduction of cons umption of resources and 
energy as the core of industrial policies, speed up the upgrading of industrial structure, promote the 
development of service industry and high-tech industry, accelerate the elimination of backward production capacity, restrict the excessively rapid gr owth of industries of high energy consumption 
and high emission, in order to shift to an economic development pattern featuring "lower input, lower 
consumption, lower emission and higher efficiency".  
Second, with respect to energy policies, while boos ting traditioinal energy saving and efficient use of 
fossil energy, China will intensify the development of  clean and renewable energy, and on the basis of 
ecological protection, develop hydroelectric power in  an orderly way, develop nuclear power actively, 
encourage and support the development of biomass en ergy, solar power, terrestrial heat, wind energy 
and other new renewable energy in rural areas, re mote regions and other areas with proper conditions. 
Third, with respect to pricing policies, China w ill advance energy price reform actively and steadily, 
form a price formation mechanism that can refl ect the scarcity of resources, market supply and 
demand relationship and the cost of pollution treat ment, establish a pricing system conducive to the 
realization of energy restructuring and sustai nable development to boost energy production and 
meanwhile reduce the discharge of greenhouse g ases in consumption. China will conduct timely 
adjustment of the prices of refined oil and natural gas, and implement a policy to promote energy-saving when dispatching power generation. 
Fourth, with respect to tax policies, China is c onduting a study on carbon tax, adjusting some mineral 
resource taxes, researching on tax policies enc ouraging the development of energy-saving and 
environment-friendly cars with small displacement and accelerating the phasing-out of vehicles with 
higher fuel-consumption, and is also to improve the preferential tax policy for the comprehensive 
waste use and the recovery and recycle of renewable resources. 
Fifth, with respect to the market  mechanism concerning carbon trading,  China is an active participant 
of the clean development mechanism project under the Kyoto Protocol . China is also studying the 
feasibility of carbon trading, i.e., to explore carbon emission trading on a voluntary basis. 
• En relación al impuesto ambiental que se planea implementar, ¿será un 
impuesto destinado a la eficiencia energ ética o tendrá otros fines? ¿Cómo se 
diferenciaría su destino? (páginas 88 y 90; párrafos 35 y 40)  
• With regard to the planned environment tax, is this a tax aimed at energy 
efficiency or does it have other purposes?  How will its specific object be differentiated?  (Pages 76 and 77, paragraphs 35 and 40) WT/TPR/M/230/Add.1 
Page 512  
 
  Answer 
For environmental tax, relevant authorities are curre ntly studying on the issue and related information 
will be released at appropriate time in light of the progress of the work. In addition, to improve energy 
efficiency, China is implementing other types of tax such as resources tax. 
¿Aplica China restricciones no arancelarias a pro ductos importados en razón de su intensidad 
energética? De ser así, ¿en qué normativa están  basadas estas restricciones? (páginas 88 y 90; 
párrafos 35 y 40) 
8. Does China apply non-tariff restrictions to im ports based on their energy intensity?  If 
so, what is the legislative or regulatory ba sis for such restrictions?  (Pages 76 and 77, 
paragraphs 35 and 40) 
Answer 
China does not have non-tariff measures against im ported products on the border based on energy 
intensity. 
COLOMBIA – Part 1
 
El informe de la Secretaria WT/TPR/S/230 ) 
From the Report of the Secretariat (WT/TPR/S/230 ) 
 II. R
ÉGIMEN DE POLÍTICA COMERCIAL : MARCO Y OBJETIVOS  
II. T RADE POLICY REGIME :  FRAMEWORK AND OBJECTIVES  
 6) Régimen De Inversión Extranjera 
6) Foreign Investment Regime 
De conformidad con el párrafo 45.    "En 2008, China fue el tercer receptor de IED a escala mundial, 
tras los Estados Unidos y Francia.
1  Se han fomentado las inversiones extranjeras principalmente en 
las manufacturas, haciendo especial hincapié en la pr oducción de alto valor añadido;  recientemente se 
ha promovido más la IED en los servicios mediante , entre otras cosas, la mitigación, o liberalización, 
de las restricciones a la IED en determinados sectores, como los de las telecomunicaciones y el 
turismo …  En 2005, el Gobierno Central empezó a delegar en los gobiernos locales la facultad de 
conceder licencias para el establecimiento y la modificación de las operaciones de las empresas con inversión extranjera "alentadas" y de determin ados sectores … Las autoridades esperan que ello 
facilite la aprobación de IED..  Además, desde 2007 China promueve el sistema de concesión de 
licencias en línea para la realización de IED". 
According to paragraph 45, "[i]n 2008, China was the th ird largest recipient of FDI in the world, after 
the United States and France.
2  Foreign investment has been en couraged mainly in manufacturing 
with particular emphasis on high va lue-added production;  recently, FDI in services has been more 
encouraged by, inter alia , the relaxation, if not liberalization, of FDI restrictions, in certain sectors, 
such as telecommunications and tourism …  In 20 05, the Central Government began delegating to 
local governments licensing authority for the est ablishment and modification of operations of 
                                                      
 1 En 2008 entró en China IED por valor de 108.300 millones de dólares EE.UU.;  en los Estados 
Unidos y Francia se registraron entradas de 316.100 millones y 117.500 millones de dólares EE.UU., respectivamente (UNCTAD (2009)). 
 
2 In 2008, inflows of FDI into China were US$108.3 billion;  inflows into the United States and France 
were US$316.1 billion and US$117.5 billion, respectively (UNCTAD, 2009).  WT/TPR/M/230/Add.1 
 Page 513 
 
 
  "encouraged" FIEs and certain selected sectors …  The authorities expect this to facilitate FDI 
approval …  Furthermore, since 2007, China has promoted the online licensing system for FDI." 
1. En cuanto al sistema de "concesión de licencias en línea para la realización de IED", se 
agradecería a China  una explicación más detallada sobre este sistema. 
1. Could China please provide further details concerning the "online licensing system for 
FDI"? 
2. ¿Qué entidad es la encargada de manejar el  sistema? En cuáles caso no se concede la 
licencia en línea y qué cobertura tiene el sistema: nacional o regional? 
2. What entity is responsible for managing th e system?  What are the cases in which online 
licences are not granted, and what is the cov erage of the system:  national or regional?  
Answer (1-2) 
"Foreign Investment On-line Licensing Service Sy stem" is an on-line office system built by the 
Ministry of Commerce to further simplify the ad ministrative licensing procedures concerning foreign 
investment. Through this system, six administrative licensing items, namely licensing for establishment of financial leasing company with  foreign investment, for establishment and 
modification of courier services company with fo reign investment, for modification of term of 
business operation of foreign-funded enterprises, fo r modification of business scope of foreign-funded 
enterprises, for increase of capital in  foreign-funded enterprises, and for equity transfer of foreign-
funded enterprises, may currently be handled on-line. The users of the system are the commerce authorities at the provincial level and the Mini stry of Commerce. The corresponding systems are 
"provincial end" and the "MOFCOM end" respectivel y. The "provincial end" provides such functions 
as project input, review, submission, inquiry of handling state at the MOFCOM end, as well as 
information query and statistics services.  
The Department of Foreign Investment Administra tion of the Ministry of Commerce is responsible 
for the administration of the system, which covers th e whole country. There is also an introduction to 
the system at the official website of the Mini stry of Commerce (http://wzzxxk.wzs.mofcom.gov.cn). 
There is at the website also detailed guidance to the documents to be submitted for licensing and the 
licensing procedures.  
Según el párrafo 46.  "China tambié n fomenta la salida de IED en esferas como la investigación y el 
desarrollo, la producción y comercialización, y la en ergía.  Según las autoridades, se promueve la 
salida de IED para aumentar la amplitud y profundida d de la apertura al mundo exterior, intensificar 
la cooperación económica y comercial internacional y lograr un desarrollo común, sobre la base del 
principio fundamental de "beneficios mutuos, benefi cios para todos y desarrollo común".  Desde el 
1ºde mayo de 2009, el Ministerio de Comercio  ha delegado oficialmente en las autoridades 
comerciales locales de diversas provincias, re giones autónomas y municipios que dependen 
directamente del Gobierno Central autoridad para examinar y aprobar las IED en el extranjero…". 
According to paragraph 46, "China also encour ages outward FDI in areas such as research and 
development, production and marketi ng, and energy.  The authorities maintain that outward FDI is 
encouraged in order to expand the width and depth of opening up to the outside world, promoting 
international economic and trade cooperation, and achieving common development, on the basic 
principle of 'mutual benefit, all-win, and common development'.  Since 1 May 2009, the Ministry of 
Commerce has officially delegated the authority of  examination and approval of overseas FDI to the 
local commerce authorities of various provinces, autonomous regions, and municipalities directly 
under the Central Government …" WT/TPR/M/230/Add.1 
Page 514  
 
  3. ¿Qué mecanismos utiliza el gobierno de ch ina para promover la salida de IED, cuales 
son los requisitos que debe cumplir una empresa china para que le sea aprobada una solicitud 
de IED en el extranjero, así como los requisitos que debe cumplir un país para que se autorice la 
IED en él, por parte de empresas chinas? 
3. What mechanisms does the Government of China use to encourage outward FDI, what 
requirements does a Chinese company have to meet  for an application for overseas FDI to be 
approved, and what requirements does a country h ave to meet for FDI by Chinese companies to 
be approved in that country? 
Answer 
The procedures of examining and approving outbou nd investment as well as situations for non-
approval are explicitly provided for in the Rules on Administration of Outbound Investment  
(MOFCOM Decree No. 5 of 2009) which was prom ulgated on 16 March 2009 a nd entered into force 
on 1 May 2009. The Rules  provides for the uniform principles to be followed by both central and local 
governments when examining and approving outbound investment projects. The Rules  is available at 
http://www.mofcom.gov.cn/ aarticle /b/c/200903/20090306103210.html. 
III. P
OLÍTICAS COMERCIALES , POR MEDIDAS  
III. T RADE POLICIES AND PRACTICES BY MEASURE  
1) I NTRODUCCIÓN  
1) I NTRODUCTION  
De acuerdo con el párrafo 1,  "China  ha intr oducido un sistema de despacho directo en sus 
procedimientos de inspección de entrada y salida para facilitar el comercio…" 
According to paragraph 1, China h as "introduced a direct release syst em into its entry-exit inspection 
procedures to facilitate trade …" 
4. ¿Podrían China explicarnos como f unciona el sistema de despacho directo? 
4. Could China please explain how th is direct release system works? 
Answer 
According to the provisions of the Notice on Implementing the Inspection and Quarantine Direct 
Release System of Import and Export Goods  issued by AQSIQ on 18 July 2008 (AQSIQ Notice 
No. 82 of 2008), "direct release" refers to the convenient and efficient inspection and quarantine 
release methods adopted by inspection and quaran tine authorities for those import and export goods 
that meet the specified conditions, and it includes import direct release and export direct release. 
Import direct release means that the inspection and quarantine authorities at the ports do not take 
inspection or quarantine measures for the eligible import goods, which will be directly delivered to 
their destinations and will be subject to inspec tion and quarantine measures and released by the 
inspection and quarantine authorities at their destina tions. Export direct release means that enterprises 
can directly handle customs clearance procedures by presenting the customs clearance form issued by 
the inspection and quarantine authorities at the place of origin to the customs authorities at the place 
of customs declaration, which rele ase the eligible export goods that are identified as qualified after the 
inspection and quarantine measures by the inspection and quarantine authorities at the place of origin. 
The new system has facilitated greatly the import and export of eligible goods. Clearance costs of 
enterprises are lowered and efficiency improved.   WT/TPR/M/230/Add.1 
 Page 515 
 
 
  De conformidad con el párrafo 8.  "El Gobierno sigue utilizando políticas industriales para "orientar" 
el desarrollo de determinados sectores, como los 10 sectores (en gran medida manufactureros) señalados a principios de 2009, a fin de contra rrestar los efectos de la crisis mundial…"  
According to paragraph 8, "[t]he Government c ontinues to use industrial policies to 'guide' the 
development of certain sectors, such as the ten (l argely manufacturing) sectors identified in early 2009 
to counter the effect of the global crisis …" 
5. ¿Cuáles fueron los criterios que utiliz ó China para seleccionar estos 10 sectores? 
5. What criteria did China use to select these ten sectors? 
Answer 
The ten sectors are steel, automobile, electronic info rmation, textiles, non-ferrous metal, equipment 
manufacturing, light industry, petrochemical industry,  shipbuilding and logistics. Some of them are 
pillar industries in the national economy, some are important strategic industries, while others are 
industries closely related to people's livelihood. The added value of the nine manufacturing sectors 
among the ten is nearly 80% of the total industria l added value and they account around 1/3 of the 
GDP of the nation. Taxes paid by enterprises above  designated size in these sectors account for about 
40% of the total tax revenues of China, and pers onnel directly employed in these sectors account for 
about 30% of the total number of employees in urban units.  
De conformidad con el párrafo 10, "China ha segui do mejorando su marco legislativo e intensificado 
la observancia de la protección de los derechos de propiedad intelectual." 
According to paragraph ten, "China has continued to improve its legislative framework and intensify 
the enforcement of IPR protection." 
6. ¿Podría China compartir su experiencia en éste tema y explicar brevemente las medidas 
que ha adoptado para tal efecto? 
6. Could China please share its experience in this area and explain briefly the measures 
adopted to that end? 
Answer After issuing the Outline of the National Intellectual Property Strategy  in June 2008, the Chinese 
government is implementing seriously the Outline  to further strengthen protection of the IPRs. 
The Chinese government establishe d an inter-ministerial coordination mechanism that involves 
28 government agencies and formulated annually plans for implementing the IPRs strategy. In 2009, over 200 specific tasks were fulfilled, 54 pieces of regulations, rules and administrative guidelines 
related to IPRs were formulated or revised, 82 major policies and measures were issued, 23 law-
enforcement actions were taken, and 28 public service platforms were set up. At the same time, the 
implementation of the IPR strategy in various sect ors and regions also pressed ahead. Preliminary 
progress has been made in the realiza tion of the stated goals set in the Outline . 
According to Article 60 of the Patent Law , a local intellectual property office will accept a patent 
infringement case only at the request of the patent ee. This differs from trademark infringement and 
copyright infringement, which can be investigated  and enforced by law-enforcement authorities on 
their own initiative. In 2009, intellectual prope rty offices in China totally accepted 937 cases related 
to patent infringements and disputes.  WT/TPR/M/230/Add.1 
Page 516  
 
  In 2009, local administrations for industry and co mmerce handled 51,044 cases of various trademark 
violations, which included 10,461  foreign-related trademark cases. Among all the cases, 37,824 were 
enforced on their own initiative, accounting for 74.1% of the total. 
For copyright administrative enforcement, in 20 09, China launched the fifth nationwide campaign 
against internet infringement and piracy, and 541 cases related to internet infringement were dealt 
with. Statistical data on copyright enforcem ent are also available at www.ncac.gov.cn/cms/ 
html/205/1973/list-1.htm. 
For IPR border enforcement, in 2009, Customs authorities tracked down an d seized IPR-infringing 
export goods worth of over RMB 450 million. As for specific measures taken, firstly, Customs 
authorities carried out enforcement actions on thei r own initiative to protect intellectual property 
rights in accordance with their mandate. In 2009, th e value of infringing goods detained by China 
Customs on their own initiative reached RMB 430 milli on, accounting for 94.3% of the total value of 
infringing goods seized. Secondly, China Customs t ook a series of special actions in key areas and 
routes against border infringements such as the "dragon boat action" taken against the export of infringing goods by making use of European and Am erican ship or air routes from the end of 2007 to 
the beginning of 2008, and the special action fo r IPR protection in post and express mail June to 
December 2009. China Customs also  attach great importance to law enforcement cooperation with 
other countries and regions. China has signed docum ents relating to IPR protection cooperation with 
the USA, EU and also among Japan, South Korea a nd itself. Effective cooperation is underway in 
information exchange, enforcement experience sharin g, and data interchange in case statistics etc. 
2) M
EDIDAS QUE AFECTAN DIRECTAMENTE A LAS IMPORTACIONES  
2) M EASURES DIRECTLY AFFECTING IMPORTS  
i) Procedimientos aduaneros, valoración y normas de origen i) Customs procedures, valuation, and rules of origin  Procedimientos aduaneros e inspec ción previa a la expedición 
Customs procedures and pre-shipment inspection 
Según el párrafo 11 se menciona que, "China ha seguido reformando su sistema de tránsito aduanero 
para simplificar los procedimientos de declaración en aduanas". 
Paragraph 11 states that "China has continued to reform its Customs transit system to simplify 
Customs declaration procedures." 
7. ¿Podría China explicar como funciona el rég imen de tránsito y que beneficios trae  la 
reforma para las usuarios aduaneros? 
7. Could China please explain how this tr ansit system works and how the reform has 
benefited customs users? 
Answer 
With regard to the Customs transit reform, or th e reform to promote regi onal integration of the 
Customs administration, Chinese government ini tiated the pilot practice in October 2005 in 
11 Customs including Customs in Shanghai, Hangzhou and Ningbo of the Yangtze River Delta Area, 
Customs in Guangzhou, Shenzhen, Gongbei, Huangpu and Jiangmen of the Pearl River Delta Area, 
and also Customs in Beijing and Tianjin of the B ohai Rim Region. At the end of July 2006, the 
General Administration for Customs of China decide d to formally launch nationwide the reform to 
promote regional Customs clearance.   WT/TPR/M/230/Add.1 
 Page 517 
 
 
  In the mode of regional Customs clearance, the ex isting limitations as a result of Customs districts 
were eliminated, and the "two declarations, two rele ases" practice were changed to "one declaration, 
one release." After the clearance of imported goods at  the port, they generally can be directly transported to the plant for discharge. After being lo aded in the factory, goods to be exported can be 
transported directly to the Customs at the port for loading into the ships (veh icles) and exit. Customs 
procedures were simplified, costs reduced, and e fficiency of import and export clearance of goods 
improved. After introduction of the regional Cust oms clearance, clearance procedures can be 
completed generally within one working day. The lo gistics constraints caused by division of Customs 
districts were reduced. Inland enterprises could bene fit from the same convenien ce as those located at 
coastal ports. 
e) Exenciones y reducciones arancelarias 
e) Tariff exemptions and reductions 
De conformidad con el Parágraf o 26, "China afirma que  se aplican exenciones y reducciones 
arancelarias a las mercancías importadas por empresas seleccionadas, conforme a lo establecido por determinadas políticas". 
According to paragraph 26, "[t]ariff exemptions  and reductions also apply to goods imported by 
designated enterprises as specified in certain policies." 
8. ¿Cuales son los criterios y/o políticas establecidas por China para seleccionar las 
empresas a las que se les otorgaran estas exenciones y reducciones arancelarias? 
8. What are the criteria and/or policies established by China to select the enterprises to 
which these tariff exemptions and reductions are accorded? 
Answer 
For details of the policies, Colombia may consult the subsidies notification China submitted in 2006, 
i.e. G/SCM/N/123/CHN. China is now revising the notification and will submit a new one to the 
WTO in the near future. 
IV. P
OLÍTICAS COMERCIALES , POR SECTORES  
IV. T RADE POLICIES BY SECTOR  
2) A GRICULTURA  
2) A GRICULTURE  
iii) Instrumentos de política 
iii) Policy instruments b) Medidas internas b) Internal measures 
Pagos Directos Párrafo 28  "En 2008 se conced ieron subvenciones directas por valor de 
15.100 millones de yuan aproximadamente (incluidas las otorgadas a los productores de cereales);  y 
subvenciones directas de carácter general por valor de 71.600 millones de yuan a los productores de 
cereales para ayudarles a adaptarse a los cambios de l entorno económico reales y previstos, como las 
variaciones de los precios de los insumos agríco las (por ejemplo, diésel y abonos químicos)." 
Direct payments, paragraph 28:  "About Y 15.1 billion was provided as dir ect subsidies in 2008 
(including those accorded to grain producers);  a nd Y 71.6 billion as general direct subsidies for grain 
farmers to assist them in meeting actual and envi saged changes in economic environment, such as 
price changes for agricultural inputs (e .g. diesel and chemical fertilizers)." WT/TPR/M/230/Add.1 
Page 518  
 
  9. ¿Con que criterios se distribuyen los "Pagos Directos" entregados a los agricultores, y 
en que sectores, además de los cereales? 
9. On the basis of what criteria are "direct payments" to farmers distributed, and in what 
sectors apart from grain? 
Answer In recent years, China has further strengthened its  efforts in addressing the problems of rural areas, 
farmers and agriculture ("three agriculture-related" pr oblems) and issued a series of measures. By far, 
China has basically formed an agricultural suppor t policy system for safeguarding grain production, 
enhancing agricultural efficiency, increasing fa rmers' incomes and promoting comprehensive 
development of rural areas, which is consistent w ith the agricultural support rules of the WTO. The 
main supporting measures are direct subsidies for farmers, comprehensive direct subsidies for 
agricultural inputs, subsidies for using superior seed  varieties and subsidies for purchasing agricultural 
machinery and tools. Others include transfer paym ent for big agricultural counties and investment for 
rural infrastructure construction. Besides, China also has the minimum purchase price policy for key 
grain products and the temporary reserve policy for co rn, soybean, colza and cotton. For details of the 
policies, Colombia may consult the subsidi es notification China submitted in 2006, i.e. 
G/SCM/N/123/CHN. China is now revising the notification. The new notification that China is to submit to the WTO in the near future will in clude the latest status of these policies. 
5) S
ERVICIOS  
5) S ERVICES  
ii) Servicios financieros 
ii) Financial services 
Indica el párrafo 47 del informe de la Secretaria, que "A pesar de las últimas novedades, el mercado 
de capitales de China aún está poco desarrollado.  Lo s datos facilitados por las autoridades indican 
que, en mayo de 2009, la capitalización bursátil del me rcado de acciones "de tipo A" representaba el 
71,5 por ciento del PIB, frente al 49 por ciento aproximadamente en 2006.  En 2008, el sector no 
financiero recaudó fondos por un to tal de 5,998.4 billones de yuan, de los que el 83 por ciento se 
financió mediante préstamos bancarios y el 17 por ci ento a través de la emisión de títulos del Estado y 
de acciones y bonos de sociedades anónimas.   El a lto grado de propiedad est atal es otra característica 
señalada del sector financiero de China.  Las auto ridades han adoptado recientemente varias medidas 
para fortalecer la supervisión y seguir desarro llando el mercado de capitales, que incluyen el 
establecimiento de una nueva junta (ChiNext) para  empresas creadas recientemente y la conversión de 
acciones no comerciables en acciones comerciables" 
Paragraph 47 of the Secretariat Report states that "[ i]n spite of recent deve lopments, China's capital 
market is still underdeveloped.  Data provided by the authorities indicate that  market capitalization in 
the A-share market represented 71.5% of GDP as of May 2009, compared with about 49% in 2006.  In 2008, a total of Y 5,998.4 billion worth of funds was raised by the non-financial sector, of which 
83% was financed through bank loans and 17% th rough the issuance of government securities, and 
corporate bonds and equity.  The high degree of stat e ownership is another notable feature of the 
financial sector in China.  The authorities have  recently introduced various measures to strengthen 
supervision, and further develop the capital ma rket, including the establishment of a new board 
(ChiNext) for start-up businesses, and conversion of non-tradable shares to tradable shares." 
10. ¿Cuál es el porcentaje de participación estatal en la propiedad de instituciones 
financieras en China? 
10. What is the percentage of State own ership of financial institutions in China?  WT/TPR/M/230/Add.1 
 Page 519 
 
 
  Answer 
There is no fixed percentage of the State ownershi p in Chinese financial institutions. The institutions 
may be divided into those with the State having  a controlling shareholding and others where the 
shareholding of the State is not controlling. For deta iled information of percentage of State ownership 
in specific financial institutions, please refer to the information of the Shanghai Stock Exchange, 
Shenzhen Stock Exchange, Hong Kong Stock Excha nge and New York Stock Exchange concerning 
Chinese financial institutions listed there.  
iii) Telecomunicaciones 
iii) Telecommunications 
c) Marco normativo y políticas 
c) Regulatory structure and policies 
En el párrafo 92, indica el documento de la Secret aria, "La estructura normativa, la legislación y los 
reglamentos sobre telecomunicaciones se han manten ido básicamente sin cambios desde el anterior 
examen de China.  El Reglamento sobre Teleco municaciones constituye el marco legal general del 
sector.  La Oficina de Asuntos Legislativos del Consejo de Estado está examinando un proyecto de 
Ley sobre Telecomunicaciones.  Las autoridad es sostienen que China no aplica un régimen de 
licencias específicas para la "reventa" de serv icios de telecomunicaciones;  una vez obtenida la 
licencia de telecomunicaciones básicas, las empresa s pueden elegir de qué fo rma desean suministrar 
los servicios, ya sea estableciendo sus propias in stalaciones o en condiciones de reventa". 
Paragraph 92 of the Secretariat Report states that "[t]he regulatory structure, and legislation and 
regulations on telecommunications have remained largely unchanged since China's previous Review.  
The Regulations on Telecommunication provide the overall legal framework for the sector.  A draft 
Telecommunications Law is being examined by the State Council Legislative Office.  The authorities 
maintain that China does not have a specific lic ence for 'resale' of telecommunication service;  
enterprises may choose how they wished to provide  services after obtaining a basic telecom licence, 
either by establishing their own facilities or by providing services on resale basis." 
11. ¿Existen otro tipo de licencias  para otros segmentos de servicios? 
11. Are there other types of licen ces for other services segments? 
Answer According to Article 7 of the Regulations on Telecommunications , the State implements a licensing 
system for operation of telecommunications services. Article 8 of the Regulations stipulates that 
telecommunications services are divided into b asic telecommunications services and value-added 
telecommunications services. There is in China no licensing for services  other than basic 
telecommunications services and value-added telecommunications services.  
Interconexión 
Interconnection 
De conformidad con el párrafo 94, "Durante el  período objeto de examen no se han introducido 
cambios importantes en la normativa sobre inte rconexión.[1]  Una empresa que tenga posición 
dominante no debe denegar las solicitudes de inte rconexión de las demás empresas de servicios de 
telecomunicaciones, y los acuerdos sobre interc onexión deben depositarse en el MIIT.[2]  Las 
autoridades no han establecido aún criterios claros pa ra definir el concepto de "empresa dominante", y 
están estudiando las definiciones adecuadas en funci ón de los progresos realizados en la tecnología y 
la estructura de las redes.  Las normas de interc onexión se aplican por igual a los tres proveedores de WT/TPR/M/230/Add.1 
Page 520  
 
  servicios de telecomunicaciones básicas.  Si no llegan a un acuerdo mutuo, las empresas pueden 
solicitar la mediación del MIIT o de la autoridad provincial de telecomunicaciones competente.  El 
MIIT ha solucionado varias diferencias sobre interc onexiones, entre ellas una en 2008 y dos en 2009.  
Las autoridades consideran que el mecanismo del mercado funciona bien en lo que respecta a las 
tarifas de interconexión, ya que los tres proveedor es de servicios básicos tienen extensas redes en el 
territorio de China". 
According to paragraph 94, "[n]o major changes ha ve been made to rules governing interconnection 
during the review period.  A dominant carrier must  not refuse requests for interconnection from other 
telecom service operators, and interconnection agre ements must be filed with the MIIT.  The 
authorities do not yet have clear standards to define 'dominant carriers';  they are studying appropriate 
definitions in the light of progress in technology and network structure.  The interconnection rules 
apply equally to the three basic telecom providers .  If the operators are unable to reach a mutual 
agreement, they can apply to the MIIT or the releva nt provincial telecom authority for mediation.  The 
MIIT has settled several interconnection disput es, including one in 2008 and two in 2009.  The 
authorities consider that the market mechanism works well in interconnection charges because all 
three basic service providers have extensive networks throughout China." 
12. ¿Bajo qué condiciones pueden los proveedo res de servicios diferentes de los servicios 
básicos interconectarse con un proveedor dominante? 
12. Under what conditions can providers of serv ices other than basic services interconnect 
with a dominant carrier? 
Answer 
According to Article 8 of the Rules on Interconnection between Public Telecommunication Networks 
(former Ministry of Information Industry Decree No. 9) , telecommunications carriers may not refuse 
the interconnection requests of other telecommunications  carriers or violate relevant State regulations 
by restricting their subscribers' selection of tel ecommunications services lawfully operated by other 
telecommunications carriers. For specific conditions of interconnection and sharing of services, please 
refer to the detailed provis ions in Chapter II of the Rules on Interconnection between Public 
Telecommunication Networks. 
Tarifas de telecomunicaciones  
Telecommunication tariffs  
De acuerdo con el párrafo 96 del informe de la  Secretaria, "Según los datos facilitados por las 
autoridades, el promedio de las "tarifas globales de telecomunicaciones" se redujo en el 11,5 por 
ciento interanual en 2008.  Básicamente, hay tres tipos  de tarifas:  las fijadas por el Gobierno, las 
orientadas por el Gobierno y las ajustadas en función del mercado.[3]  Por ejemplo, el MIIT establece 
tarifas máximas para los servicios de telefonía de larga distancia nacional e internacional de línea fija 
y de itinerancia nacional de teléfonos móviles.[4]  Las tarifas aplicadas a los diferentes servicios de 
telecomunicaciones varían notablemente entre la s distintas regiones, debido a las condiciones 
económicas y la capacidad de pago de los usuarios.  El vigente marco normativo de las tarifas de 
telecomunicaciones comprende, entre otras disposiciones, las Medidas sobre el procedimiento de aprobación y presentación de tarifas de telecomunicaciones, el Catálogo de tarifas de 
telecomunicaciones sujetas a precios ajustados en función del mercado y el Catálogo de tarifas de 
telecomunicaciones administradas por autoridades provinciales de administración de las comunicaciones.  El Reglamento sobre Telecomunicaciones establece que, cuando haya "suficiente 
competencia", los precios de los servicios de te lecomunicaciones se determinarán en función del 
mercado.  Las tarifas de los servicios de valor añ adido y de los servicios en los que hay "suficiente 
competencia del mercado" se han liberalizado gr adualmente desde 2002.  En abril de 2008 se  WT/TPR/M/230/Add.1 
 Page 521 
 
 
  liberalizaron los precios del arriendo temporal y a co rto plazo de servicios de telefonía ordinaria de 
línea fija, circuitos de enlace local, RDSI de banda estrecha, intercambio de paquetes, circuitos de voz 
(audio), redes de datos digitales, circu itos digitales y retransmisión de tramas" 
According to paragraph 96 of the Secretariat Repor t, "[d]ata provided by the authorities indicate that 
the average of 'comprehensive te lecom tariffs' dropped by 11.5% year-on-year in 2008.  There are 
mainly three types of tariffs:  government set, govern ment guided, and market adjusted.  For example, 
the MIIT sets tariff caps for fixed-line domestic, in ternational long-distance telephony, and mobile 
domestic roaming.  Tariffs for different telecom services vary significantly by region due to economic 
conditions and users' ability to pay.  The current regulatory framework for telecom tariffs includes:  
Measures on the Approval and Filing Procedure of  Telecommunication Tariff, the Catalogue of 
Telecommunications Tariffs Subject to Mark et-adjusted Prices, and the Catalogue of 
Telecommunications Tariffs Administered by  Provincial Communications Administration 
Authorities.  The Regulations on Telecommunicati on stipulate that, where there is 'adequate 
competition', prices of telecom services must be dete rmined by the market.  Tariffs for value-added 
services, and services where there is 'sufficient mark et competition' have been  liberalized gradually 
since 2002.  In April 2008, charges were liberalized for temporary and short-term leasing of ordinary 
fixed-line telephone, local junction circuit, narrowba nd ISDN, packet exchange, voice (audio) circuit, 
DDN, digital circuit, and frame relay." 
13. ¿Cuál es la cobertura de los servicios de valor agregado, existe un régimen especial de 
licencia para estos servicios?  
13. What is the coverage of value-added services?  Is there a special licensing regime for 
these services? 
Answer 
For details of the value-added telecomm unications services, please refer to the List of 
Telecommunication Services . According to Article 7 of the Regulations on Telecommunications , the 
State implements a licensing system for operation of telecommunications services. Article 8 of the 
Regulations stipulates that telecommunications services are divided into basic telecommunications 
services and value-added telecommunications services. There is in China no licensing for services  other than basic telecommunications services and value-added telecommunications services. 
P
ROPIEDAD INTELECTUAL  
INTELLECTUAL PROPERTY  
v) Derechos de propiedad intelectual v) Intellectual property rights 
Recuadro III.2: Observancia de los DPI 
Box III.2:  IPR enforcement 
"Además, aunque el Acuerdo sobre los ADPIC no  obliga a los Miembros a aplicar medidas en 
frontera respecto de las exportaciones de mercancías de marca de fábrica o de comercio falsificadas o 
mercancías pirata que lesionan el derecho de au tor, China ha prestado especial atención a la 
protección de la propiedad intelectual en lo que se refiere a las exportaciones.  A ese respecto, ha 
cooperado con los Estados Unidos, la UE y otros Miembros para reforzar los reglamentos de 
observancia en relación con las exportaciones de me rcancías falsificadas y pirateadas, mejorar la 
cooperación con las aduanas extranjeras e impart ir formación a los fabricantes y exportadores 
nacionales en lo que respecta a la protección de la propiedad intelectual. 
En la reunión que celebró el 20 de marzo de 2009, el Órgano de Soluci ón de Diferencias (OSD) 
adoptó un informe del Grupo Especial que se ocupó del asunto China - Medidas que afectan a la WT/TPR/M/230/Add.1 
Page 522  
 
  protección y observancia de los derechos de propied ad intelectual (WT/DS362).  El 15 de abril de 
2009, China informó a ese Órgano de su propósito de  aplicar las recomendaciones y resoluciones del 
OSD relativas a dicho asunto.  La diferencia se re fería a medidas relacionadas con la observancia de 
los DPI, entre ellas las siguientes:  el Reglamento  sobre protección en aduana de los derechos de 
propiedad intelectual, y las Medidas de Aplicación de  la Aduana con respecto al Reglamento de la 
República Popular China sobre protección en aduana de los derechos de propiedad intelectual." 
En este extracto del documento se afirma que Chin a se ha preocupado por ejercer una observancia en 
frontera más allá de las disposiciones mínimas establecidas en los ADPIC. Al respecto se afirma que después del informe del Órgano de Solución de dife rencias del asunto China-Medidas que afectan a la 
protección y observancia de los derechos de propi edad intelectual (WT/DS362), China ha mejorado y 
reforzado sus medidas de control en aduanas, median te instrumentos como reglamentos, entre otros. 
Al respecto, teniendo en cuenta que Colombia ma ntiene un control en frontera sobre derechos de 
propiedad intelectual de  marcas y derecho de autor. 
"Furthermore, although the TRIPS Agreement does not  oblige Members to apply border measures in 
cases of the exportation of counterfeit trademark or pirated copyright goods, China has paid special 
attention to the intellectual property protection of e xports.  In this regard, China has cooperated with 
the United States, the EU, as well as with other Members, to strengthen enforcement regulations on counterfeit and pirated exports, im prove cooperation with foreign customs, and educate domestic 
manufacturers and exporters of in tellectual property protection. 
At its meeting on 20 March 2009, the Dispute Settlement Body adopted a Panel report on China - 
Measures Affecting the Protection and Enforcement of Intellectual Property Rights  (WT/DS362).  On 
15 April 2009, China informed the DSB of its intention to implement the recommendations and 
rulings of the DSB in connection with this matte r.  The dispute concerned measures relating to 
enforcement of IPRs, including:  the Regulations  of Customs Protection of Intellectual Property 
Rights, and the Implementing Measures of Customs for the Regulations of the People's Republic of China on Customs Protection of Intellectual Property Rights." 
This excerpt from the document states that China h as tried to apply border enforcement measures that 
go beyond the minimum requirements contained in the TRIPS Agreement.  Following the report of 
the Dispute Settlement Body in China – Measures Affecting th e Protection and Enforcement of 
Intellectual Property Rights  (WT/DS362), China apparently improved and reinforced its customs 
control measures by means of instruments such as re gulations, etc.  Bearing in mind that Colombia 
maintains border control on trademark a nd copyright intellectual property rights: 
14. ¿Cuáles son en concreto los derechos de propiedad intelectual sobre los cuales se ejerce 
control en frontera en la actualidad y cuál es son las medidas que se han tomado para la 
observancia de estos derechos?  
14. What, precisely, are the intellectual property rights on which border control is currently 
exercised and what measures have been taken to enforce those rights? 
Answer 
In accordance with the Regulations on Customs Protection of Intellectual Property Rights , the 
Customs will investigate the facts of infringement  after detaining the suspected infringing goods. The 
goods found infringing upon the intellectual property ri ghts by the Customs after investigation will be 
confiscated. Also, the Customs may impose administ rative penalties on consignees and/or consignors 
of infringing goods in accordance with the Regulations on Customs Protection of Intellectual 
Property Rights .  WT/TPR/M/230/Add.1 
 Page 523 
 
 
  a) Patentes 
a) Patents 
De conformidad con el párrafo 158. "La revisión incluye también motivos adicionales por los que 
puede expedirse una licencia obligatoria.  De conf ormidad con la Ley de Patentes anterior, podían 
concederse licencias obligatorias en  caso, entre otros, de "emergencia nacional", o cuando "ocurriera 
cualquier situación extraordinaria" o "por el interés público".  La Ley revisada permite además la 
concesión de licencias obligatorias en determinadas circunstancias con respecto a productos farmacéuticos patentados.  Esa modificación da ef ecto a la Decisión del Consejo General de la OMC 
sobre la aplicación del párrafo 6 de la Declaración de Doha relativa al Acuerdo sobre los ADPIC y la 
Salud Pública, y a la subsiguiente Decisión sobr e la enmienda del Acuerdo sobre los ADPIC con 
respecto a la concesión de licencias obligatorias que permitan a terceros fabricar productos 
farmacéuticos patentados para su  exportación a beneficiarios del mecanismo del "párrafo 6" de la 
Declaración de la OMC." 
En lo referente a este párrafo licencias obligatori as el documento establece que China ha adoptado una 
nueva ley de patentes que permite casos adiciona les motivados para otorgar estas licencias. Al 
respecto, afirma que esta medida se implementaría en aras de acatar lo establecido en el párrafo 6 de 
la Declaración de Doha, relativa a los ADPIC.  
According to paragraph 158, "[t]he revision also  includes further grounds on which a compulsory 
licence may be issued.  Under the previous Patent Law, compulsory licences could be granted in the 
event of, inter alia , 'national emergency', or 'any extraordinary state of affairs occurs', or 'in the public 
interest'.  The revised Law further enables the gr ant of compulsory licences in certain circumstances 
for patented pharmaceutical products.  This ame ndment gives effect to the WTO General Council 
Decision on the Implementation of Paragraph 6 of th e Doha Declaration on the TRIPS Agreement and 
Public Health and subsequent Decision on the Am endment of the TRIPS Agreement in providing for 
compulsory licensing to enable third parties to ma nufacture patented drugs for export to recipients 
under the WTO 'paragraph 6' mechanism." 
Regarding these compulsory licences, the document st ates that China adopted a new patent law which 
further enables the grant of compulsory licences wher e justification is provided.  This measure is 
apparently being implemented in or der to give effect to paragraph 6 of the Doha Declaration on the 
TRIPS Agreement and Public Health. 
15. ¿Cuáles son los motivos adicionales para otorgar estas licencias obligatorias? 
15. What are the further justifications  for granting these compulsory licences? 
Answer 
The article is formulated in accordance with Artic le 31(b) of the TRIPS Agreement. Its scope of 
application and related concepts such as "extraordinary  state of affairs" are consistent with those in 
the TRIPS Agreement. 
Según el párrafo 160. "La Ley de Patentes revisada  exige también que los solicitantes de patentes 
divulguen la fuente directa y original de los recu rsos genéticos cuando la u ltimación de una invención 
dependa de esos recursos, medida aplicada a la luz de  lo dispuesto en el Convenio sobre la Diversidad 
Biológica.  En el caso de las invenciones que dependan de recursos genéticos cuyo acceso o 
utilización sea contrario a la ley y/o los reglamento s administrativos, no deberán concederse derechos 
de patente. " WT/TPR/M/230/Add.1 
Page 524  
 
  De acuerdo con el párrafo 25, según el documento de  la Secretaria,…"estab lece que al momento de 
otorgar patentes de invenciones que  dependan de recursos genéticos , se está obligado a divulgar el 
origen. De lo contrario, si no se ejerce un acc eso o una utilización adecuada de los recursos, las 
autoridades administrativas no conceden las patentes.  
According to paragraph 160, "[t]he  revised Patent Law also requires patent applicants to disclose the 
direct and original source of genetic resources when the completion of an invention depends upon 
such genetic resources, a measure implemented in th e light of the Convention on Biological Diversity.  
For inventions depending upon genetic resources the a ccess or use of which is against law and/or 
administrative regulations, the invention should not be granted patent rights." 
According to the Secretariat document, paragraph 25 states that in granting patents for inventions 
depending upon genetic resources, the origin must be disclosed.  Otherwise, if there is improper 
access or use of the resources, the administra tive authorities will not grant the patents. 
16. ¿Cuáles son las sanciones existentes: nulidad de patentes o su reivindicación? 
Igualmente quisiéramos conocer si existen sanciones pecuniarias o penales para este ejercicio 
incorrecto del acceso a los recursos genético s y/o uso indebido de las patentes. 
16. What sanctions are currently applied:  invalid ation of patents or claims to that effect?  
We would also like to know whether there are any pecuniary or criminal sanctions for such improper exercise of access to genetic resources and/or improper use of patents. 
Answer 
Access to or use of genetic resources against law and/or administrative regulations refers to the access 
to or use of genetic resources which fails to follow  the provisions of relevant laws and administrative 
regulations of China requiring obtaining prior ap proval from relevant administrative authority or 
permission of owners.  
For example, according to Article 7 of Measures of the People's Republic of China for Examination 
and Approval of Entry and Exit and Foreign Coop erative Research and Utilization of Livestock and 
Poultry Genetic Resources , exit of livestock or poultry genetic resources included in the protection list 
shall obtain prior approval from the Ministry of Ag riculture. No patent shall be granted to an 
invention if the invention is dependent upon livest ock or poultry genetic resource included in the 
protection list whose exit however has not gone  through the aforesaid approval procedures. 
According to Article 65 of the Regulations for Implementation of the Patent Law , after the grant of 
the patent, if the patent applicant had provided wro ng or incomplete information with regard to the 
source of genetic resources, it would not necessarily lead  to the invalidation of the patent. But if there 
is enough evidence that proves the genetic resources are obtained or utilized in a way in violation of 
the Chinese laws and administrative regulations, the pa tent will be declared invalid for this reason. 
COLOMBIA – Part 2
 
Does the Government of the People's Republic of China have a special entity or mechanism for 
the procurement of agro-industrial products such as sugar or milk with a view to commercial 
resale or distribution to the disadvantaged populat ion?  If so, can foreign products participate 
in this process?  If that is the case, what is  the entity responsible for making these purchases and 
what is the procedure for interested suppliers?  WT/TPR/M/230/Add.1 
 Page 525 
 
 
  Answer 
According to the information we have so far, China has no special entity  or mechanism for the 
procurement of agro-industrial products such as suga r or milk for commercial resale or distribution to 
the disadvantaged population. 
THAILAND  
WTO Secretariat Report (WT/TPR/S/230 ) 
IV. T RADE POLICIES AND PRACTICES BY MEASURE  
(2) M EASURES DIRECTLY AFFECTING IMPORTS  
(i) Customs procedures, valuation, and rules of origin (b) Customs valuation 
Para. 13, Page 26 
Thailand has concern on the Chinese customs' application of reference price on fruit products. 
Under the reference price system, the customs val ues of fruit products from Thailand are often 
determined at the value higher than the declared import prices. This has resulted in the internal 
taxes being evaluated at the value higher than they should have been. Thailand would like to 
seek for clarification on; 
 - The methodology and factors used in  constructing the reference prices and 
whether such reference prices apply to products from all sources. 
 - Whether the reference prices for individual products at each port of entry are 
the same.  
 - How the customs values of fruit products are determined when the import prices 
are declared at the price lower than the reference prices. 
 - Whether the Chinese customs authority automatically applies the reference 
price as the customs value for such case. 
Answer 
The Customs value of the imported goods is determined on the basis of the transaction value which is 
the price actually paid or payable for the goods by the buyer when sold for export to the territory of 
the People's Republic of China, including the charg es associated with the transport of imported goods 
and the cost of insurance and associ ated costs incurred prior to the unloading of the goods at the port 
of entry within the Customs territory of the People's Republic of China.  
Where the transaction value of the imported goods fails  to meet the conditions and considerations laid 
down in the relevant regulations, or it cannot be determined, Cust oms shall, after acquainting itself 
with relevant information and havi ng consultation over price with the obligatory Customs duty payer, 
apply the following methods of va luation to determine the Customs value of the imported goods in the 
sequential order:  
 1. the transaction value of the identical goods sold for export to the territory of the 
People's Republic of China and exported at or about the same time as the goods being 
valued;  WT/TPR/M/230/Add.1 
Page 526  
 
   2. the transaction value of the similar goods  sold for export to the territory of the 
People's Republic of China and exported at or about the same time as the goods being 
valued;  
 3. the unit price at which the imported goods, identical or similar imported goods are 
sold in the greatest aggregate quantity, at  or about the time of importation of the 
goods being valued, and in the first sale to  an unrelated party within the Customs 
territory of the People's Republic of China, provided that profit and general expenses 
or/and commissions usually paid incurred in connection with the first sales within the 
Customs territory of the People's Republic of China of imported goods of the same 
class or kind, the cost of transport, in surance cost and other associated charges 
incurred after unloading of the imported goo ds at the port of importation within the 
territory and import duties and inte rnal taxes shall be deducted; 
 4. the computed value which shall consist of the total sum of the following items: the 
cost or value of materials and fabricati on or other processing employed in producing 
the imported goods; an amount for profit and general expenses equal to that usually 
reflected in sales of goods of the same class or kind as the imported goods being 
valued which are sold for export to the Cu stoms territory of the People's Republic of 
China; the cost of transport, insurance and associated charges incurred prior to  
unloading the goods at the entry within the Customs territory of the People's Republic 
of China; 
 5. the value determined on a reasonable basis. 
The Customs value applies to products from all s ources and is implemented in a uniform manner in 
China. 
Indirect taxes affecting imports 
Para. 29, Page 33 Para. 29, Page 33 indicates that primary agricul tural products sold by farmer directly to 
consumer are exempted from VAT while imports of  like products are subject to VAT. Thailand 
would like to seek for clarification on whether the VAT exemption is also applied to the sales of 
primary agriculture products from farmer to retailer.  
- In case where VAT is not exempted for such transaction, what is the 
methodology used in calculating VAT? 
Answer China's policy in this regard is that primary agricultural products produced by farmers and sold 
directly by them are exempted from VAT.  
Regarding this policy, China has made explanation and clarifications for several times. In summary, 
we have the following points to make: 
First of all, China has a huge number of small farmers across the country, which makes it impossible 
to conduct accounting and tax filing. In other words,  to levy value-added tax upon them is infeasible 
and uneconomical because of the huge administrativ e cost. This is the fundamental reason behind the 
policy.   WT/TPR/M/230/Add.1 
 Page 527 
 
 
  Second, in China the agricultural production is ma inly based on household operation. The sales scale 
is very small. The VAT exemption is applied only to farmers who sell their own products like a 
kilogram of potatoes in an open air market. This is  completely different from the import of products in 
bulk. Their VAT policies are not comparable.  
Third, as far as we understand, other members with  a VAT system also seem to exempt VAT from 
farmers who sell their own products, while levy ing tax over imported agricultural products.  
Fourth, even if we apply VAT over these farmers,  we would adopt a policy that would establish a 
commercially-meaningful threshold like in other countries. Most farmers would fall below the 
threshold. The real effect would be the same as the current policy.  
Therefore, China does not believe the current polic y is not in compliance with its WTO obligations. 
(4) M EASURES AFFECTING PRODUCTION AND TRADE  
(v) Intellectual property rights (a) Patent Para. 155- 161, Page 62-65 
- According to Patent system, does China have set up any database system of 
patent for accession of public? 
 - According to Para. 158, Page 65, does in Patent Law of China have defined that 
who has the authorities to issue compulsory  licenses, and what are the definitions 
of extraordinary state of affairs occurs and the public interest? 
Answer 
Regarding the database, please visit www.sipo.gov.cn. 
Compulsory license is issued by th e State Intellectual Property Office (SIPO). Its scope of application 
and related concepts such as "extraordinary state of  affairs" are in complete consistency with the 
TRIPS Agreement, since the Article concerned in the Patent Law  is made in accordance with 
Article 31(b) of the TRIPS Agreement. 
Trademark 
Para. 163, Page 66  - According to Para. 163, Page 65 Filling in ternational application to China as the 
designated country, does it specify that the owner has to appoint an local agent 
and the application and important documents have to be translated into Chinese? 
Answer In accordance with the Madrid Agreement for International Registration of Trade Marks and its 
protocol, all the international registration applications  are filed with the International Bureau of World 
Intellectual Property Right (WIPO) without the need to appoint any agent. The applicant can file the application in any of the languages of English, Fren ch and Spanish, without the need to translate the 
application and other doc uments into Chinese.  WT/TPR/M/230/Add.1 
Page 528  
 
  Copyright and related rights 
Para. 163, Page 66  - According to Para. 167, Page 66 that mentions about the increasing of the items 
of computer software were registered 91.25% in 2008, how do you manage the 
Copyright Registration/Recordation system?  
Answer 
In accordance with the relevant international treaty,  the copyright is registered on a voluntary basis in 
China. The Copyright Protection Center under the National Copyright Administration and copyright 
protection centers in some of the provinces, muni cipalities directly under the Central Government are 
responsible for the registration of copyrights. Le gislation concerning copyright registration is now 
under study and has not yet been adopted. 
IV. T
RADE POLICIES BY SECTOR  
(2) A GRICULTURE  
(ii) Policy objectives and administration Para. 11 – 12, Page 71 
11. The OECD has estimated that the Producer Subsidy Estimate (PSE) in China was about 
9% of the value of gross farm receipts in 2007,  down from 11% in 2006, but considerably higher 
than in 1995-97 when it averaged 3%.  Support to specific commodities (the Single Commodity 
Transfer or SCT) made up about 32% of the total PSE and varied widely from one commodity to another.  Support was particularly high for:   cotton (at 43% of farm receipts);  sugar (at 
35%);  and maize (at 22%).  All product-specific support was provided through market price 
support.  The total value of support for produc tion is higher because the SCT figures do not 
include support generally available to agriculture, such as input subsidies.   
12. Nonetheless, the policy tools used to achieve these objectives are not always consistent 
and, in some cases, may be in conflict with ea ch other.  One example is the use of export 
restrictions to limit the rise in domestic prices re sulting from higher international prices.  This 
also has a negative impact on farmers' incom es, while direct payments, market price support, 
and input subsidies are provided concurrently.  Furthermore, input subsidies, which include fertilizer subsidies, encourage the use of fertilizers  that can have harmful environmental effects.  
Another concern with China's agriculture policies is the emphasis on market price support and 
input subsidies, which are not the most efficien t mechanisms available, as a large part of the 
benefits is captured by suppliers of farm input s or absorbed through higher resource costs;  
these policies are more production and trade- distorting than alternative policies. 
 - Could China please explain more detail on Producer Subsidy Estimate? 
Furthermore please provide us whether these domestic support programs will be changed or readjusted to meet the req uirement of Doha Round agreement?  
Answer The Chinese government has notified the WTO its agri cultural domestic support  data for 2002-2004. 
The AMS, both product-specific and non product-specific, are within China's de minimis  limits i.e. 
8.5%. Besides, according to our estimation based on th e data available, the AMS levels in recent years 
did not exceed the above limit.   WT/TPR/M/230/Add.1 
 Page 529 
 
 
  (iii) Policy instruments 
(d) Boarder measures Para. 14, Page 72 Measures affecting imports 
14. The average applied MFN tariff on agricul tural products (WTO definition) in 2009 was 
at 15.2%, largely unchanged since 2007; the authorities consider that China's tariffs on 
agriculture, which have been reduced since its accession to the WTO, are already sufficiently 
low.  Protection varies considerably from one product to another, with higher-than-average 
tariffs on, inter alia,  some cereals (65%-40%), sugar (50%),  tobacco (57%), and some beverages 
(65%-42.3%).  Imports of agricultural products  are subject to lower VAT (13%) than other 
products (17% - general VAT rate), and agricultu ral products produced and sold directly by 
small-scale farmers are exempt from VAT (on grounds of administrative simplicity).   
- Does China consider eliminating or phasing out this practice so that imported 
and domestic produced agricultural commo dities will receive the same treatment 
to comply with the national treatment obligation under WTO? 
Answer 
Please refer to the answer above to the question concerning Para. 29, Page 33. 
Para. 17, Page 72 
17. In 2009, tariff-rate quotas (TRQs) applied to 45 tariff lines at the HS eight-digit level on 
wheat, maize, rice, sugar, chemical fertilizer, wool and wool top, and cotton at the eight-digit 
level (down from 55 lines in 2005).  Actual in-quo ta imports of cotton substantially exceeded the 
annual quota of 894,000 tonnes.  Agricultural pro ducts subject to state trading comprise grains 
(corn, rice, and wheat), sugar, tobacco, cotton,  and some chemical fertilizers.  With the 
exception of tobacco, these commodities are also s ubject to TRQs;  a substantial amount of the 
quotas are allocated to STEs.  Imports of tobacco remain under state monopoly. 
As seen here, the imports of corn, rice, wheat, sugar, and cotton are subject to both state trading 
enterprises and TRQs,   
- Could China please explain in detail how STEs administer imports of these 
products?  
Answer 
For wheat, maize, rice, sugar and cotton which are subject to import state trading in line with the 
Protocol on the Accession of China, in the annual TR Qs for wheat, maize, rice, sugar and cotton, all 
have some shares for non-state trading enterprises.  These non-state trading enterprises which can meet 
the requirements published in the annual announcement regarding TRQ allocation, can engage in the 
importation under the non-state trading shares of the TRQs. 
In the business determination of importation of whea t, maize, rice, sugar and cotton, an individual 
state trading enterprise will consider the TRQ it holds, as well as domestic s upply and demand and the 
price in both domestic and international market. The Government does not involve in the decision 
makings. WT/TPR/M/230/Add.1 
Page 530  
 
  - What were the fill rates for the part of the tariff quota allocated to state trading 
enterprises?  Please provide import level of these products for the most recent 
3 years. 
Answer 
The Interim Measures for the Administration of Im port Tariff Rate Quotas of Agricultural Products 
amended in 2003 adopts the unified, fair, just, transparent, predictable and non-discriminatory 
principle for tariff rate quotas administration. In the application form for tariff rate quotas, there is a 
column requiring enterprises to indicate if they ag ree to disclose relevant information of themselves 
and their quotas obtained. On this question concer ning a specific enterprise, we have to respect 
opinions of the applicant enterprise.  
For China's tariff rate quota administration and the fill -in rates in general, please refer to the following 
notifications of China to the WTO: G/AG/N/CHN/3, G/AG/N/CHN/5, G/AG/N/CHN/7&7C1, G/AG/N/CHN/9, G/AG/N/CHN/11, G/AG/N/CHN/14 and G/AG/N/CHN/16. Besides, Thailand may also refer to G/MA/W/39G/MA/W/52, G/MA/W/64, G/MA/W/74, G/MA/W/83, G/MA/W/92 and G/MA/W/99. 
Para. 19-21, Page 73 Measures affecting exports 19. Between 1 January 2008 and 31 December 2008, the Government imposed interim 
export tariffs, ranging from 5% to 25% on 57 ta riff lines (HS 8-digit) covering wheat, corn, rice, 
and  soybeans;  the authorities maintain that the objective of such measures is to conserve 
natural resources or to protect the environment.  On 1 July 2009, some of these export taxes 
were removed or lowered, including on wheat and rice.  In addition, China has in place some 
measures to discourage exports of ethanol and fertilizers. 
20. While China's main policy objectives in agric ulture are to improve food security, and to 
maintain stable domestic production and prices, t axing the export of such products in order to 
reduce domestic prices also reduces farmers' inco mes.  To compensate for the fall in incomes 
requires direct payments, inputs subsidies, and s upport for production.  Some of these policies 
are neither effective nor efficient (Box III.1).  Direct income support programmes for consumers, for example, may be a more efficient and less trade-distorting measure than export 
taxes or restrictions, although they may involve higher administrative cost.    
21. Eight agricultural products are currently subj ect to export prohibitions.  Only state-
trading enterprises are allowed to export for co tton, rice, maize, and tobacco.  China continues 
to impose global (i.e. irrespective of destination) and destination-specific export quotas.  In 2009, 
global export quotas applied to cotton, grains (maize, rice, and wheat) and tea, some of which 
are subject to state trading.  Destination-sp ecific quotas remain in place for exports of live 
cattle, live swine, and live fowl to the Special Admi nistrative Regions of Hong Kong and Macao.   
 - Could China please explain how STE intervention practice conform to WTO 
domestic support obligation? 
 - Does China have any plan to liberalize this STE to ensure an ambitious result of 
the Doha Round negotiation?  WT/TPR/M/230/Add.1 
 Page 531 
 
 
  Answer 
The current import and export state trading admi nistration on some products are implemented in 
accordance with China's accession protocol and Ch ina's commitment upon accession. China would be 
glad to discuss with interest ed members on this matter. 
__________