China WT/TPR/S/230/Rev.1 
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IV. TRADE POLICIES BY SECTOR 
(1) INTRODUCTION  
1. Since the previous Trade Policy Review of China, some progress has been made in  
trade-related liberalization, especially in service s, including financial services, telecommunications, 
and tourism.  China has been undertaking structural reform of its economy, and considers its trade and 
investment regime as an integral part of its ongoing structural reform strategy.  The reform aims to:  
reduce reliance on heavily export-oriented (and capita l-intensive) manufacturing, some sectors of 
which tend to be over-invested due to state-owne d banks' tendency to favour  large SOEs;  increase 
productivity in agriculture;  and expand its services sector by, inter alia , the reduction, if not 
elimination, of obstacles to trade in services. 
2. The outbreak of the global financial crisis in late 2008 also negatively affected incomes of 
China's farming population.  As a result, the gap between rural and urban liv ing standards has tended 
to increase since 2008.  Rebalancing of income dist ribution between urban and rural areas is also one 
of China's main policy objectives.  The Governme nt seeks to achieve "coordinated and balanced 
development" between regions by, inter alia,  public spending on rural education, health, pensions, 
and a "minimum livelihood guarantee", as well as tax c oncessions in and transfer payments to the less 
developed regions.  Nonetheless, la bour productivity of agriculture, which is an important sector in 
rural economies, decreased slightly in 2007 and remains about one fifth of the level in other sectors;  
there is also a considerable surplus of labour in the sector;  jobs need to be found elsewhere in the 
economy.  China's average MFN tariff on agricultu ral products remained largely unchanged during 
2007-09.  Tariff rate quotas are applied to some cereal s, sugar, chemical fertilizers, and wool and 
cotton.  China continues to use state trading to ma nage trade of some products.  The domestic prices 
of some products are subject to "government-gui ded prices".  The Government also maintains 
minimum procurement prices on rice and wheat from major production areas, mainly to compensate farmers in the event of declines in market prices be low certain thresholds.  As long as this protection 
remains in place, it may prove difficult for the G overnment to succeed in raising total factor 
productivity in agriculture. 
3. China's energy sector continues to be characterized by a high level of state ownership, 
regulation, and limited competition.  Energy security remains at the core of China's energy strategy;  another major policy goal includes reducing energy inte nsity and thus protect the environment.  China 
aims to reduce carbon emissions per unit of GDP be tween 40% and 45% from their level in 2005.  
Despite low tariffs, trade restrictions (both impor t and export) remain on energy products. Imports 
often require state trading and import volumes of  crude and processed oil by non state-trading 
enterprises are limited.  To improve coordination across industries and ministries, the Government restructured the regulatory framework by setting up a National Energy Administration (NEA) in 2008; 
however, it remains unclear how much autonomy the NEA is to have from the National Development 
and Reform Commission (NDRC).  The Government also began its pricing reform on energy and 
resource products so that prices can reflect the ma rket demand and supply, the scarcity of resources, 
and the cost of environmental damage.   
4. Manufacturing has traditionally had a greater sh are in trade and investment than have 
agriculture and services.  The Government continu es to "guide" the allocation of capital and resources 
in the economy, including the manufacturing sector.  Export taxes and VAT rebate rates on 
manufacturing products continue to be adjusted from time to time.  Sector-specific industrial policies 
were issued at the beginning of 2009 to facilitate  the development of ten sectors;  nine were 
manufacturing and one "logistics", and had been aff ected strongly by the global financial crisis.   WT/TPR/S/230/Rev.1 Trade Policy Review 
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5. The authorities maintain that China's liberaliza tion of services has been implemented ahead of 
dates envisaged in its accession commitments.  While  the Government's intention is to open the 
services sector further to private and foreign participation as a means of boosting growth and 
providing alternative employment to agriculture, the pace of liberalization has been slower than that 
for manufacturing.  As a result, some services sectors are still subject to a high degree of state control 
and lack of competition.   
6. While financial reforms continue, China's capita l market remains heavily dependent on loans 
provided by state-owned banks, which have lent mainly to SOEs.  Lack of access to external 
financing through the capital market, particularly for small domestic private companies, continues to 
result in these companies relying heavily on reta ined earnings (or funds raised from family and 
friends).  Stringent qualification requirements s till apply to foreign-funded banks; these include 
comparatively high minimum asset requirements on sole or controlling shareholders and high 
minimum paid-in capital amounts, restrictions on the supply of credit-card services, and restrictions on the business scope of foreign banks branches.  Si nce China's previous Review in 2008, the reform 
to convert the Agricultural Bank into a shareholdi ng bank has made progress.  There have been no 
significant changes to requirements concerning the establishment and operation of foreign insurance 
companies.  The stock market in China continued to develop during the period under review, and the 
process of converting shares of SOEs to be traded  in the market has progressed.  Restrictions on 
foreign investment in financial services remained largely unchanged.     
7. Since 2008, China has lowered the minimu m registered capital requirement in 
telecommunications.  It has also eliminated the approval requirement for domestic companies to be 
listed abroad.  Limitations on foreign participation still exist in telecommunications, maritime and air 
transport, legal, accounting, tourism, and postal services.    
(2) A
GRICULTURE  
(i) Features and market developments 
8. China is the world's top producer of agricultura l products by value, with total production of 
about Y 4,078 billion (US$536 billion).  Despite ri sing value of production, the contribution of 
agriculture to GDP continued to decline, falling from 11.1% in 2006 to 10.7% in 2008 and 10.6% in 2009 because of even more rapid growth in other sectors of the economy.  At the same time;  
agriculture's share of employment, which had increased from 39.9% in 2006 to 40.8% in 2007, 
decreased to 39.6% in 2008.
1  As a result, labour productivity in agriculture remained largely 
unchanged between 2006 and 2008 at about  one fifth of the level in the rest of the economy, with the 
result that average rural incomes fell further behind th e urban average, thus contributing to a widening 
gap between rural and urban living standards.2  Low labour productivity in agriculture reflects, inter 
alia, its high labour intensity, low average size of farms, and the lack of mechanization.  The 
Government has been implementing agricultural re form to improve farmers' welfare and mitigate 
rural-urban disparities, and more recently to stimulate domestic demand in the face of the global 
economic slowdown since late 2008.   
                                                      
1 Data include employment in forestry and fishing. 
2 In 2007, per capita urban household income was Y 9,997, while rural household income was Y 4,140, 
and in 2008, per capita urban household income was Y 15,781, while rural household income was Y 4,761.  
This trend apparently continued in early 2009 (BBC News online.  Viewed at:  http://news.bbc.co.uk/2/hi/ 
7833779.stm [26.10.2009]). China WT/TPR/S/230/Rev.1 
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9. China became a net importer of agricultural pr oducts in 2004 and international trade has 
continued to grow.  Exports increased by 8.7% and imports by 32.8% in 20083;  however, agricultural 
products accounted for only 2.5% of total goods export s and 4.4% of imports.  China's top market for 
agricultural exports continues to be Japan, which acc ounted for 18.8% of total agricultural exports in 
2008 (26.3% in 2006).4  In 2008, the main imports were soybeans from the United States and palm oil 
from Malaysia.5 
(ii) Policy objectives and administration 
10. The Government's key objectives in the agricu lture sector have remained those announced in 
the Eleventh Five-Year Plan6, such as developing agriculture through improving overall agricultural 
production, promoting restructuring, and improving infrastructure and services, as well as the 
traditional objectives of attaining food security, an d of maintaining stable domestic production to 
protect farmers' interests.  At least 16 institutions are in charge of agriculture-related issues in China, 
and the main laws and regulati ons related to agriculture have  remained unchanged since 2008. 
11. The OECD has estimated that the Producer Subsid y 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%.7  Support to specific commodities (the Single Commodity Transfer or 
SCT) made up about 32% of the total PSE and vari ed widely from one commodity to another.  
Support was particularly high for:  cotton (at 43% of  farm receipts);  sugar (at 35%);  and maize (at 
22%).8  All product-specific support was provided through market price support.  The total value of 
support for production is higher because the SCT figures do not include support generally available to 
agriculture, such as input subsidies.9   
12. Nonetheless, the policy tools used to achieve th ese objectives are not always consistent and, 
in some cases, may be in conflict with each other.  One example is the use of export restrictions to 
limit the rise in domestic prices resulting from higher international prices.  This also has a negative 
impact on farmers' incomes, 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 environm ental effects.  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.
10   
13. One major issue facing agriculture in China is structural adjustment.  The average size of 
farm holdings is relatively small, at 0.6 ha.  Improving productivity would require bigger farms;  
                                                      
3 According to China Customs Statistics, exports of  agricultural products decreased 3.3% and imports 
decreased 11.9%.   
4 UNSD Comtrade database (SITC Rev.3). 
5 In 2008, China imported US$21.8 billion of soybeans, of which US$8.4 billion was from the 
United States;  and US$5.2 billion of palm oil,  of which US$3.5 billion was from Malaysia. 
6 See WTO (2008). 
7 The average PSE for OECD countries for 2007 was 22% and ranged from 1% in New Zealand to 65% 
in Korea (OECD, 2009b). 
8 OECD (2009a).  
9 Anderson (2009) notes that the trend shown in the OECD's support estimates is part of a long-term 
regional trend observed in several Asian countries to re duce and remove disincentives to agriculture production 
and replace them with other policies that provide a net transfer of resources to producers (Anderson, 2009, 
pp. 351-384).  
10 OECD (2002). WT/TPR/S/230/Rev.1 Trade Policy Review 
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although structural reform is mentioned in China's agriculture 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.   
(iii) Policy instruments 
(a) Border measures 
Measures affecting imports 
14. The average applied MFN tariff on agricultural products (WTO definition) in 2009 was at 
15.2%, largely unchanged since 2007;  the authoriti es consider that China's tariffs on agriculture, 
which have been reduced since its accession to the WTO, are already sufficiently low.11  Protection 
varies considerably from one product to a nother, with higher-than-average tariffs on, inter alia,  some 
cereals (65%-40%), sugar (50%), tobacco (57%), and some bevera ges (65%-42.3%).  Imports of 
agricultural products are subject to lower VAT (13% ) than other products (17%  - general VAT rate), 
and agricultural products produced and sold directly  by small-scale farmers are exempt from VAT (on 
grounds of administrative simplicity).   
15. In response to high prices or to balance domestic  supply and demand for foodstuffs, tariffs are 
sometimes reduced temporarily.  During 2008, in r esponse to higher international prices and supply 
problems following the earthquake in Sichuan, impor t tariffs for several f ood products were reduced 
temporarily.12   
16. During the term of the Eleventh Five Year Pl an (i.e. 2006-10), seeds (seedlings), fish fries and 
seed sources of wild animals and plants for breedi ng, within certain quantities, are exempted from the 
VAT;  this applies equally to imports and domestic ally produced goods.  The reason for the adoption 
of this exemption was not clear to the Secretariat;   presumably, it is part of government policy to 
provide higher quality breeding and propagation material to producers.     
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).13  Actual in-quota imports of cotto n substantially exceeded the annual 
quota of 894,000 tonnes.14  Agricultural products subject to state trading comprise grains (corn, rice, 
and wheat), sugar, tobacco, cotton, and some chem ical fertilizers.  With the exception of tobacco, 
these commodities are also subject to TRQs;  a subs tantial amount of the quotas are allocated to 
STEs.15  Imports of tobacco remain under state monopoly. 
                                                      
11 The average applied MFN tariffs for agricultural products (WTO definition) and non-agricultural 
products in 2009 are unchanged by including or excluding ad valorem  equivalents of non- ad valorem  duties, 
which were provided by the Chinese authorities.   
12 OECD (2009a). 
13 The 45 lines are included in HS Chapters 10 (wheat, maize, and rice), 11 (cereal flour), 17 (sugar),  
31 (fertilizer), 51 (wool and wool top), and 52 (cott on).  Though fertilizer is no t an agricultural product 
according to the WTO definition, it is  mentioned in this section because of its importance as an input. 
14 In-quota imports of cotton increased from 1.165 million tonnes in 2007 to 2.111 million tonnes 
in 2008. 
15 Data provided by the authorities indicate that in 2008, STEs had the right to import 90% of the wheat 
quota, 60% of corn, 50% of rice, 70% of sugar, and 33% of cotton quotas, unchanged since 2007.   China WT/TPR/S/230/Rev.1 
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18. Some agricultural imports remain subject to  automatic licensing to monitor imports, and  
non-automatic import licences to fulfil China's inte rnational obligations and to administer TRQs.16  
Automatic licensing covers, inter alia,  poultry, vegetable oil, and t obacco.  On 1 August 2009, China 
began to apply automatic import licensing on fresh milk, milk powder, and whey in order to 
monitoring imports.  In addition, Chinese buyers of dairy products are required to report their imports 
to the China Chamber of Commerce of Import and Export of Foodstuffs, Native Produce and Animal 
By-Products;  the authorities maintain that this requi rement is also aimed at monitoring the quantity of 
imports of diary products, for statistical purposes.   The general import prohibition is applied to 
products such as opium and ivory.   
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 tariff lines (H S 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, so me 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 agricu lture are to improve food security, and to 
maintain stable domestic production and prices, taxing  the export of such products in order to reduce 
domestic prices also reduces farmers' incomes.  To compensate for the fall in incomes requires direct 
payments, inputs subsidies, and support for producti on.  Some of these policies are neither effective 
nor efficient (Box III.1).  Direct income support pr ogrammes 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 subject to export prohibitions.
17  Only state-trading 
enterprises are allowed to export for cotton, rice, maize, and tobacco.  China continues to impose 
global (i.e. irrespective of destination) and destin ation-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-specific quotas remain in plac e for exports of live cattl e, live swine, and live 
fowl to the Special Administrative Regions of Hong Kong and Macao.   
22. China has notified to the WTO that it did not  maintain or introduce any export subsidies 
in 2007.18  Exporters of agricultural products are entitled  to VAT rebates at the time of exportation;  
rebates vary according to commodity and are often lo wer than the statutory VAT rate, which results in 
an effective levy on exports.19  The VAT on agricultural goods is 13%, but the "usual" export rebate 
rate for agricultural goods is 5%.  
                                                      
16 The authorities consider goods imported under TRQs  as products subject to non-automatic licensing, 
as they require non-au tomatic quota licences. 
17 These products are ivory, bezo ar, musk, liquorice roots of the kind used in perfumes, peat, some 
plants of medicinal use, and blackmoss (a seaweed). 
18 WTO document G/AG/N/CHN/13, 18 February 2009. 
19 The authorities maintain that insufficient fiscal capac ity is the main cause of the less-than-full export 
VAT rebate and the Government has no intention to levy taxes on exports;  therefore, the less-then-full export VAT rebate should not be simply interpreted as an export tax levy. WT/TPR/S/230/Rev.1 Trade Policy Review 
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(b) Internal measures 
23. Agricultural production in China is supported by  a broad range of programmes, including:  
minimum prices for grains;  purchases by state tr ading enterprises;  direct payments;  favourable 
taxation;  input subsidies;  and preferential loan s.  As noted, the actual level of support varies 
considerably from one product to another.  China has made no notifications to the WTO Agriculture 
Committee regarding the support given to the agri culture 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. 
Taxation 
24. China started to gradually phase out agricultura l taxes in 2004.  As a result, the remaining 
taxes on agricultural products are the tobacco leaf tax (20% of the purchase price for tobacco leaves), 
the VAT (13%), the deed tax (levied when a land contr act or the right to a house is transferred), city  
maintenance and construction tax, stamp tax, and farmland occupation tax (levied when arable land is 
used for non-agricultural purposes).  Imports of certain agricultural products, including seeds and 
seedlings, fish fries and seed sources of wild animals and plants for breeding, up to specified annual 
ceilings, are exempt from VAT.  Estimates of tax revenue forgone are not available, as the competent 
authorities for finance and taxation do not have such statistics. 
25. In order to ensure that governments at county a nd township levels continue to have a stable 
source of revenue in the absence of revenues from the agricultural tax (abolished on 1 January 2006) 
and other taxes, transfers from th e Central Government have been pr ovided.  The Central Government 
has transferred Y 41.9 billion annually to compensate for the removal of the agriculture tax and the 
special agriculture tax.   
Input supports  
26. The funds provided to the Comprehensive Subsidy on Agricultural Inputs, introduced in 
2006, continued to increase, from Y 12 billion in 2 006 to Y 63.8 billion in 2008.  These supports are 
provided as an area-based payment to grain growers.   In addition, support for improved quality seeds 
has also increased considerably in  recent years, from Y 4.07 billi on in 2006 to Y 12.07 billion in 
2008.  The support for quality seeds is available fo r wheat, rice, maize, soybeans, rapeseeds, and 
cotton.  The central Government also provided a further Y 4 billion in 2008 (up from Y 2 billion in 2007) for subsidies for agricu ltural machinery and tools.   
27. In addition to direct subsidies for inputs, China has price control programmes intended to 
reduce the cost of fertilizers through preferential prices  for electricity and natural gas used by fertilizer 
producers, preferential transport prices, and exem ptions from VAT and the rail construction fund.  
The Government has also reduced import duties a nd VAT on some raw materials for fertilizers;  it 
charged special export taxes of up to 150% in Se ptember 2008, and at two rates, 50% or 75%, 
in 2009.
20 
Direct payments 
28. About Y 15.1 billion was provided as direct subs idies in 2008 (including those accorded to 
grain producers);  and Y 71.6 billion as general direct  subsidies for grain farmers to assist them in 
meeting actual and envisaged changes in econom ic environment, such as price changes for  
agricultural inputs (e.g. diesel and chemical fertilizers).    
                                                      
20 OECD (2009a). China WT/TPR/S/230/Rev.1 
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Price controls and marketing 
29. The price of some commodities remains controlle d or "guided" by the Government;  these 
include tobacco, edible salt, and "key reserve materials" (Chapter III).21  According to the authorities, 
the only remaining price control in China concerns tobacco.  
30. A minimum procurement price scheme is in place for rice and wheat in major producing 
areas.  The Government purchases these products at  the minimum procurement price when market 
prices fall below a certain threshold.  The Government raised the minimum procurement prices for rice and wheat twice in 2008 and again in 2009.  Pu rchases are made by the state-owned China Grain 
Reserves Corporation (Sinograin), funded by loan s from the Agricultural Development Bank.  The 
loans are repayed with the proceeds of subsequent  sales of the commodity.  The Outline of Middle 
and Long Term Plan for Grain Security (2008-20), which aims to increase grain output and to maintain China's 95% self-sufficiency ratio, also plans to hold a minimum of 70% of wheat and rice 
reserves.   
31. The state-owned China State Cotton Reserve Corpor ation continues to intervene in the market 
to stabilize prices and supply and, similarly, stat e sugar reserves are used to stabilize the market.
22 
32. China's tobacco industry is subject to a stat e monopoly, with controls over production, 
marketing, and trade of tobacco products.     
Land reform and other reforms relevant to rural communities 
33. Under the Real Right Law (Property Law) of  2007, farmland continues to be owned by 
village collectives, which extend contracts to i ndividual households.  China implements stringent 
restrictions on conversion of arable land into non-ar able land.  Under the current "land tenure" system, 
individual farmers acquire land tenure rights for at least 30 years.  Within the period of tenure, 
individual farmers are guaranteed their lawful rights  for occupation, usage, and profits of tenured 
land.  According to the authorities, by the end of 2008, a majority of the farmers in China had obtained a long-term and guaranteed ri ght to land contract and operation;   to date, more than 90% of 
farmers have received their operation certificates.  In October 2008, the Govern ment 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 encourage 
these transfers;  they have allowed farmers to tran sfer the operation right of the land contract through 
various forms, including subcontracting, leasing swapping.
23  This has apparently enabled farmers to 
transfer their land use rights more freely, and contributed to mechanization in agriculture.   It remains 
to be seen how the size and the nature of such transfers will affect productivity in agriculture.  
34. In August 2009, a pilot pension programme was in troduced for farmers.  The programme is to 
provide "personal account" pensions and basic pensions to farmers currently over 60 and residing in 
the pilot programme areas.  The basic pension is fu lly subsidized by the Government.  This scheme is 
apparently intended to complement a three-pillar pilot rural pension programme introduced in 2003.24  
                                                      
21 The key reserve materials are cotton, grain, sugar, and steam filature yarns.  Chemical fertilizers are 
also considered key reserve materials. 
22 OECD (2009a). 
23 At the same time, the Government maintains that  the transfer should not change the nature of 
collective ownership of land.    
24 The first pillar consists of a basic pension scheme (Y 55 per month).  The second pillar is provided in 
accordance with the accumulation of indivi dual contributions of about 4-8% of  average local income.  The third WT/TPR/S/230/Rev.1 Trade Policy Review 
Page 76 
 
 
Furthermore, free compulsory education was in troduced in rural areas in 2007, as well as rural 
cooperative health care system, covering 85% of the rural population.    
(3) ENERGY  
35. China continues to have a high demand for ener gy, due mainly to its rapid growth.  This 
increasing need for energy, combined with environmental concerns, has shaped China's energy policy.  
Energy security remains the core of China's ener gy strategy, and the Government intends to secure 
energy via, inter alia , building reserves, promoting the dive rsification of suppliers, developing 
renewable energy sources, strengthening energy con servation, and improving the efficiency of energy 
consumption.  Other major policy goals include re ducing 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 2010.25  In 2008, energy consumption per un it of GDP fell by 5.2%, after a fall of 
5.04% in 2007 and 2.74% in 2006.  In Novemb er 2009, the State Council announced another 
compulsory target;  by the end of 2020, China is to reduce its carbon emissions per unit of GDP between 40% and 45% from their 2005 level.
26 
36. Despite the still growing importance of energy  issues in China, th ere is currently no 
comprehensive law for the sector and the legisla tive framework continues to be provided by 
regulations and administrative doc uments rather than by laws.27  Regulatory responsibility was split 
between several government agencies, which impe ded coordination across industries and ministries.28  
Against this background, the Government has rest ructured the regulatory framework by setting up a 
National Energy Administration (N EA) in August 2008, with the inte ntion of building an effective 
national-level energy institution.29  The NEA took over responsibilities from:  inter alia , the Energy 
Bureau under the NDRC, the Office of the National Energy Leading Group under the State Council, 
and the nuclear power administration of the Commission of Science, Technology, and Industry for National Defence (COSTIND).
30  However, it appears that the NEA still lacks the authority to 
effectively coordinate the interests of ministri es, commissions, and state-owned energy companies.31  
It is also unclear how much autonomy the NEA is to have from NDRC on energy policy; for example, 
the NEA is under the administration of the NDRC, which remains in charge of, inter alia , "guiding" 
energy prices.   
                                                                                                                                                                     
pillar is based on voluntary individual accounts held in the National Social Security Fund.  The Government 
aims to cover 10% of China’s rural population by end-2009 and 100% by 2020 (World Bank Office, 2009). 
25 The amount of energy consumed in 2006 to produce one yuan's worth of output of goods and 
services needs to be reduced by 20% by 2010. 
26 State Council Informati on Office online information.  Viewed  at: http://www.sci o.gov.cn/xwfbh/ 
xwbfbh/wqfbh/2009/1126/index.htm (in Chinese) [08.12.2009]. 
27 An energy law is currently in the drafting process. 
28 In 2003, the Ministry of Ener gy, created in 1988 to oversee th e development of the coal, oil, 
electricity and nuclear energy sector s, was dismantled, and an Energy Bureau was set up under the NDRC.  The 
NDRC, through the Energy Bureau, is in charge of national strategies and policies, prices, and approving 
overseas projects of energy products.   
29 The NEA was established with a view to:  strengthening the prospective, strategic, and 
comprehensive study of energy issues;  formulating development plans, key policies, and standards on energy; 
organizing the implementation of such policies;  and improving the Government's ability to guarantee energy 
safety. 
30 In principle, the NEA has a broad mandate:  administering the energy sector;  drafting energy plans 
and policies;  negotiating with international energy agencies;  and approving foreign investment in the energy 
sector.   
31 Downs (2008). China WT/TPR/S/230/Rev.1 
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37. China has been relaxing its investment regi me in the energy sector, although the sector 
remains state-dominated.32  In 2005, the State Council issued guidelines (the so-called "36-clause on 
the non-public sector") allowing private companies (i ncluding domestic and foreign enterprises) to 
invest in previously restricted sectors dominated by SOEs, including the oil and gas industry.33  
However, this 36-clause is not implemented evenly in China, and the state monopoly is a barrier for 
private competition; for example, the State- owned Assets Supervision and Administration 
Commission (SASAC) explicitly identified seven indus tries, including oil and coal, for state control.34  
Also, although private companies are allowed to run refining, wholesaling, and retailing of oil, a lack of access to stable crude oil supply remains a major problem (i.e. oil imports and exploration are both 
controlled by SOEs).
35  Thus, the oil and gas industry remains dominated by three state-controlled 
companies, the China National Petroleum Corpor ation (CNPC), China Petr ochemical Corporation 
(Sinopec), and China National Offshore Oil Corporation (CNOOC).   
38. As in the previous Review, tariff protection on en ergy products is low, but their imports are 
often subject to state trading, and some energy pr oducts are subject to automatic import licensing.  
The applied tariff on crude petroleum (HS 2709.0000) remained zero in 2009, while the tariff on 
processed petroleum products (HS 2710) was lowered from 5.8% in 2007 to 5.1% in 2009.  Imports 
of waste oils continue to be prohibited (H S 2710.9100 and 2710.9900).  Imports of crude and 
processed oil are under state trading, although non-state-trading enterprises can import limited volumes.  In 2009, imports of 22 million tonnes of crude oil and 11.25 million tonnes of processed oil 
were allowed by non-state-trading enterprises register ed in China, with a registered capital of no less 
than Y 50 million.
36  On the other hand, exports of energy pr oducts in general, including oil and coal, 
are restricted;  they are subject to export quotas, licen sing, state trading, or export taxes (Chapter III).  
39. China does not encourage the domestic processing of products that are highly polluting or 
highly energy/resource consuming under "processing trade".  Most coal products and some processed petroleum products cannot be imported under bond ed status as inputs to be processed under 
"processing trade", while some other products canno t be exported if processed under the "processing 
trade" regime.  However, their imports or exports are still allowed under "normal trade", that is, if the 
import tariffs are paid on imported inputs.   
40. Realizing that the Government price controls  had provided incorrect signals to consumers 
because the prices did not include the social costs of  environmental externaliti es, and that energy has 
tended to be under-priced, the Government has been continuing its tax reforms and has begun pricing 
reforms for energy products, in pa rticular processed oil products.
37  The Government also is 
considering introducing an e nvironment tax during the 12th Five-year period (2011-15).  In addition, 
in December 2008, China abolished six fees, incl uding road tolls, and raised excise tax rates on 
processed oil (from Y 0.2 to Y 1 per litre for petrol, and from Y 0.1 to Y 0.8 per litre for diesel).  Following this, the Government started to appl y a new pricing mechanism on processed oil from 
                                                     
 
32 Foreign competition in the retail of crude and processed oil products has been allowed since 2004, 
and petroleum refining was included in the 2007 Catalogue of Encouraged Foreign Investment Industries.  The 
wholesale market was opened to foreign competition in 2006.   
33 The State Council's Guidelines on Encouraging an d Supporting the Development of the Non-Public 
Sector including Individual and Private Enterprises. 
34 All China Federation of Industry and Commerce (2007), p. 30. 
35 People's Daily  online news (11 May 2009).  Viewed at:  http://energy.people.com.cn/GB/9273 
566.html (in Chinese)  [28.05.2009]. 
36 MOFCOM announcement No. 60 , 2008. Viewed at:  http://w ww.mofcom.gov.cn/aarticle/b/c/ 
200810/20081005826894.html;  and No. 80.  Viewed  at: http://www.mofcom.gov. cn/ aarticle/b/c/200808/ 
20080805744180.html (in Chinese [26.10.2009]). 
37 The Government raised VAT for coal from 13% to 17% as of January 2009. WT/TPR/S/230/Rev.1 Trade Policy Review 
Page 78 
 
 
May 2009, under which domestic prices of proc essed oil are based on the average price of 
international crude.38  When the international crude oil pri ce is below US$80 per barrel, processed oil 
is priced at the crude oil price plus "normal" pro cessing profit;  when the international crude oil price 
is between US$80 and US$130 per barrel, the refineries "normal" processing profit diminishes, down 
to zero; when international crude oil is at more than US$130 per barrel, the Government is to take 
fiscal measures to guarantee supplies of processed oil, without increasing its prices.39   
(4) MANUFACTURING  
41. Manufactured exports have traditionally been among the main engines of growth in China.  In 
general, manufacturing is relatively open to both trade and foreign investment.  The import tariffs for 
manufactured products are low, on average (for a developing country), and are mostly ad valorem ; a 
few specific duties are imposed.  In 2009, the aver age applied tariff for manufacturing products (ISIC 
Rev.2) was 9.5% (9.7% in 2007).  They are mostly ad valorem  duties, with a few specific duties 
imposed.  In accordance with inte rnational obligations, some manufactured goods are prohibited from 
being imported or subject to non-automatic import li censing (Chapter III).  Many are also subject to 
automatic import licensing for statistical purposes.  A few products can be imported only under state 
trading.   
42. Nonetheless, the average tariff for China's au tomotive 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%.40  An automatic import licence is required from the 
MOFCOM.  Also, imports of complete vehicles ar e permitted only through four coastal ports, two 
terrestrial ports, and Alataw Pass.41  The importation of used vehicles, parts, and components are 
prohibited.   
43. A significant share of China's international trade is under the mode of "processing trade" 
(Tables AI.1 and AI.2), under which imports are exempted from duties if the imported inputs are processed and exported within a certain period.  With a view to lowering energy intensity and 
protecting the environment, some goods are "restric ted" or "prohibited" from import (or export) under 
processing trade;  however, the import (or export) of  these products is allowed provided their import 
duties are paid.  Further, roughly 85% of processi ng trade is conducted by FIEs, which have been 
traditionally favoured over domestic enterprises by banks.   
44. Despite low import tariffs, China's exports of ma nufactured products are subject to less-than-
full rebate of VAT, and a few manufacturing products  are also subject to export taxes (Box III.1).  
The Government has been adjusting its VAT rebate rates or export taxes to control, restrict, or 
"manage" exports of certain products (Chapter III). 
45. Since China's previous Review, the Governme nt has been continuing with its direct 
intervention measures to "guide" resources into certain sectors of the economy, particularly 
manufacturing.  China uses industrial policies, co mbined with expansionary fiscal and monetary 
policies, to boost the development of the manufact uring sector.  For example, in early 2009, China 
                                                     
 
38 Domestic prices for processed oil products are adjusted when the international crude oil price 
changes by more than 4% from the moving average over 22 consecutive working days.   
39 NDRC announcement No. 1198, 2009. 
40 The authorities maintain that China has lowered its import tariffs on automobile products eight times 
since its accession to the WTO. 
41 Alataw Pass is to import complete vehicles from the Commonwealth of Independent States, into 
Xinjiang Uygur Autonomous Region and used in Xinjiang only. China WT/TPR/S/230/Rev.1 
 Page 79 
 
 
issued industrial revitalization plans for ten sectors.   The only services sector was logistics;  the 
nine manufacturing sectors produced nearly 80% of China's total industrial value added and accounted 
for around one third of China's GDP.  These nine sect ors had all been affected greatly by reduced 
external demand (Chapter III).  Their regulator, th e Ministry of Industry and Information Technology 
(MIIT), along with the NDRC, intends to promote th e development of these sectors by adjusting the 
VAT rebate rates on exports, providing preferential loans, supporting their innovation, and "guiding" 
the consolidation of industrial structures.     
(5) SERVICES  
(i) Overview 
46. The Government has placed more emphasis on developing services by way of further 
liberalization of sectors, including financial service s, telecommunications, and tourism.  While the 
presence of SOEs is considerable in key services sectors, such as banking, telecommunications, and civil aviation, and there are still significant restri ctions on foreign invest ment and private-sector 
activities, China has adopted some measures to furt her liberalize services, particularly financial 
services, telecommunications, and tourism.
42  China's commitments under the General Agreement on 
Trade in Services have not changed since its previous  Review;  the authorities consider that China had 
already implemented some of its GATS commitmen ts ahead of the dates envisaged, and recent 
reforms are part of an ongoing liberaliza tion process since its accession to the WTO. 
(ii) Financial services 
47. In spite of recent developments, China's capital market is still underdeveloped.  Data provided 
by the authorities indicate that market capitalizati on 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% 
through the issuance of government secur ities, and corporate bonds and equity.43  The high degree of 
state ownership is another notable feature of the financial sector in China.  The authorities have 
recently introduced various measures to strengthe n supervision, and further develop the capital 
market, including the establishment of a new board  (ChiNext) for start-up businesses, and conversion 
of non-tradeable shares to tradeable shares. 
(a) Banking 
48. Recent reforms include a recapitalization of the Ag ricultural 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.  Four new subsidiaries, 22 new locally  incorporated banks and 6 new branches of foreign 
banks were approved in 2008, and 4 new subsidiaries, 16 new locally  incorporated banks, and 3 new 
branches were approved in 2009. 
49. The disposal of NPLs has progressed.  At the end of 2008, the ratio of NPLs to total loans of 
major commercial banks was at 2.4%, compared with 7.0% at the end of the first quarter 2007;  the 
NPL ratio of rural commercial banks is somewhat higher, at 3.9%.  At the end of 2007, NPLs of state-
owned commercial banks (SOCBs) amounted to Y 1,115 billion (a bout 8.1% of total loans 
outstanding);  they had fallen to Y 420.8 billion (abo ut 2.8% of total loans outstanding) at the end of 
2008.  In the third quarter of 2 009, these NPLs amounted to Y 3 64.2 billion (1.86% of total loans 
                                                      
42 See WTO document S/C/W/309, 2 November 2009 for details of laws, regulations, administrative 
guidelines, and other measures affecting trade in services. 
43 PBC (2009). WT/TPR/S/230/Rev.1 Trade Policy Review 
Page 80 
 
 
outstanding).  The authorities maintain that the five  largest SOCBs did not transfer any NPLs to asset 
management companies in 2008 or 2009. 
50. On 1 August 2009, the Circular of the State Administration of Foreign Exchange on Issues 
Concerning Foreign Exchange Administration of Ov erseas Lending Granted by Domestic Enterprises 
entered into force.  It broadened the financing sources of overseas lending by domestic enterprises;  
these enterprises may now decide, inter alia,  the timing and number of overseas lending transactions, 
at their discretion, within the total approved amount  of lending.  The balance of domestic enterprises' 
overseas lending may now reach 30% of  their owners' equity (while not exceeding the amount of the 
enterprises' overseas FDI).44  
51. The Bank of Tokyo-Mitsubishi was approved to issue bonds in RMB in China in May 2009.  
It was not clear to the Secretariat whether th is was on a "pilot" or permanent basis.   
52. China does not have a deposit insurance scheme;  the authorities are currently considering the 
possibility of designing such a scheme.   
53. Deposits at the China Postal Savings Bank,  inaugurated in March 2007, amounted to 
Y 2.5 trillion in November 2009.  Th e Bank is subject to the same la ws, regulations, and rules, as well 
as enterprise income tax, as other banks.  Accordi ng to the authorities, the bank is recognized as a 
community bank or rural bank with extensive outlets  across the nation, especially in the countryside. 
54. The main legislation regulating the sector has not changed since 2008.45  Authorities 
responsible for regulating comme rcial banks in China include the China Banking Regulatory 
Commission (CBRC), which is the primary authority r esponsible for the regula tion and supervision of 
banking institutions as well as overseas operations of  local institutions.  Its main regulatory and 
supervisory responsibilities have remained largely un changed.  The People's Bank of China (PBC) is 
also responsible for maintaining financial stability.46  The PBC has retained some broad supervisory 
powers, beyond the macro-prudential control of the financial sector.47   
55. The licensing requirements and procedures, including for the expansion of the branching 
network domestically, have remained unc hanged since China's previous Review.48  The establishment 
of a commercial bank requires CBRC approval and the issuance of an operating licence.  Likewise, 
                                                      
44 Previously, pursuant to the Circular on Administration Internal Management of Foreign Exchange by 
Transnational Corporations issued by the SAFE, domestic enterprises were allowed to engage in overseas 
lending from their own foreign exchange reserve, provided that each lending transaction was verified and 
approved by the competent authority. 
45 It includes the Law on the People's Bank of Chin a, the Law on Commercial Banks, and the Law on 
Regulation and Supervision of the Banking Sector.  The Regulations on Administration of Foreign-Funded 
Banks and its Implementing Rules determine the rules under which foreign bank branches, wholly  foreign-funded banks, sino-foreign joint-venture banks may operate in China, while the Administrative Rules 
Governing the Equity Investment in Chinese Financial Institutions by Overseas Financial Institutions regulate 
equity investment by foreign financial institutions in Chinese-funded financial institutions already established.  
In the Regulations on Administration of Foreign-Funded Banks, a "foreign bank" is a commercial bank 
established outside China and approved by the supervis ory authority where the bank is established, whereas a 
"foreign-funded financial institution" is a wholly fo reign-funded bank, a Sino-foreign joint-equity bank, a 
foreign bank's branch or a foreign bank's representative office. 
46 WTO (2008). 
47 WTO (2008). 
48 The Law on Commercial Banks and the CBRC Rules on the Implementing Procedure for 
Administrative Licensing (issued on 12 January 2006) define the business scope, and set out licensing and other requirements for domestic-funded commercial banks. China WT/TPR/S/230/Rev.1 
 Page 81 
 
 
there has been no change in the minimum regist ered capital requirement to establish banks, or to 
prudential requirements including the capital adequacy ratio (CAR).49  Commercial banks may need 
further authorization to supply specific services,  such as derivatives and wealth management, in 
accordance with prudential principles and depe nding on the capacity of individual banks.50  
Authorized commercial banks having obtained the relevant business qualification from the CBRC 
may conduct investment in certain financial produ cts outside China, on behalf of both domestic 
institutions and China's residents.51   
56. Commercial banks in China are generally proh ibited from:  trading and underwriting equity 
securities (unless they establish a separ ate subsidiary for that purpose52);  underwriting insurance 
policies (they may act as agents to sell insurance products53);  making domestic investments (other 
than in debt instruments issued by the Government and financial institutions, commercial paper, and 
corporate bonds issued by qualified non-financial institutions, and certain derivative products);  
engaging in trust investment business, securities operati ons, investing in real estate other than for their 
own use, and making equity investments in non- banking financial institutions and entities (unless 
otherwise specifically decided by the State Council);  supplying financial leasing services directly (but 
by establishing a separate subsidiary).54  China has been gradually promoting the establishment of 
fund management companies owned by commercial banks on a trial basis55;  since 2008, the China 
Minsheng Bank Corp., Merchant Bank of China,  and Shanghai Pudong Development Bank, and 
five large state-owned banks have obtained a pproval to establish fund management companies. 
57. After the outbreak of the global financial cr isis in 2008, the CBRC issued rules aimed at 
strengthening supervision of bank lending for fixed assets and proj ect financing, as part of China's 
ongoing reform of the regulatory environment for banking.  The CBRC Guideline on the Corporate Governance Reform and Supervision of State-ow ned Commercial Banks, issued on 16 May 2006 and 
                                                     
 
49 For example, minimum registered capital is Y 1 billion for a commercial bank, Y 100 million for an 
urban commercial bank, and Y 50 million for a rura l commercial bank;  th e CAR must exceed 8%. 
50 A separate licence is required for all these services.  Pursuant to Article 3 of the Law on Commercial 
Banks, unless otherwise stipulated, commercial banks w ithin China are not allowed to engage in trust 
investment and securities operations, nor to invest in n on-self-use fixed assets or non-bank financial institution 
(NBFI) and enterprises.  Currently, with the authori zation by the State Council, two commercial banks have 
equity investment in trust investment companies, while five commercial banks and one policy bank have established their own financial leasing companies.  Ba nks whose headquarters are in Hong Kong and Macao 
SARs are considered "foreign" in this context. 
51 To apply for these services, the commercial bank must already have a foreign exchange business 
qualification.  SAFE will, upon app lication, grant each qualifying commercia l bank a foreign-exchange quota 
for its offshore-client wealth-management business, with in which the bank may invest in foreign exchange 
financial products with foreign exchange purchased with RMB.   
52 Nonetheless, commercial banks are allowed, inter alia , within their business scope, to underwrite and 
deal in government bonds and bonds issued by financial institutions.  See WTO (2008) for other  
securities-related activities banks may undertake. 
53 Commercial banks providing insurance agency services must obtain licences from the CIRC before 
conducting agency insurance business .  Pursuant to Article 3 of the Law on Commercial Banks, unless 
otherwise stipulated, banks are not allowed to establish separate insurance companies.  Nonetheless, the State 
Council has started a pilot programme on "comprehensive operations" by commercial banks, under which the 
supervisory authority has promulgated Pilot Rules on Administration of Equity Investment in Insurance Companies by Commercial Banks, specifying that a commercial bank may invest in only one insurance 
company.   
54 Banks wishing to supply these services must, inter alia , apply for a licence. 
55 The pilot programme on "comprehensive operations" by commercial banks also include:  a pilot 
programme on equity investment by commercial banks in insurance companies;  allowing some commercial 
banks to establish subsidiaries to engage in financial leasing;  and a pilot programme for commercial banks to establish fund management companies. WT/TPR/S/230/Rev.1 Trade Policy Review 
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currently being revised, continues to serve as a ke y guideline for corporate governance in banking.  
The current Rules Governing Capital Adequacy  of Commercial Banks, based on the 1988 Basel 
Capital Accord (Basel I) were issued in 2007;  the CBRC is gradually implementing the new Basel 
Capital Accord (Basel II).56     
58. Since China's previous Trade Policy Review, th ere have been no changes in the requirements 
(including the minimum registered and paid-u p capital and total operating capital) for the 
establishment of a wholly foreign-funded bank (subs idiary), a Chinese-foreign joint-venture bank, or 
branches opened by these banks, and a branch of foreign bank.  The minimum asset requirements remain higher for the establishment of branches than for locally incor porated entities.  Pursuant to the 
Guideline on Risk Management of Annexati on Loan by Commercial Banks, promulgated on 
9 December 2008, commercial banks that meet the standards in the Guideline are now allowed to 
engage in annexation loan ope rations (those related to fina ncing merger and acquisition 
transactions).
57  Wholly foreign-funded and Chinese-forei gn joint-venture banks may engage in the 
same business operations as domestic commercial banks, both in local and foreign currency.58  
Branches of foreign banks are not allowed to issue credit cards;  the authorities maintain that such 
restrictions are for prudential reasons and consider  that this is standard practice in many other 
countries.  Branches of foreign banks may receive time deposits of not less than Y 1 million each from Chinese citizens within China.  Restrictions concerning foreign equity participation in domestic 
financial institutions have not changed since the previous Review;  they are stipulated in the 
Administrative Measures on Equity Investments of  Overseas Financial Institutions in Chinese 
Financial Institutions.
59  Rules and regulations on opening of branches also remain unchanged;  the 
authorities state that the reasons for applying different treatment for domestic banks and  foreign-funded banks are largely prudential.  
59. In addition to the sector-specific lending pr ovided by policy banks, the PBC and other 
administrative authorities encourage commercial banks to adapt their lending to specific borrowers in 
light of relevant government policies;  loan growth may be restricted administratively.  Interest rates 
are subject to benchmarks, and lower and upper limits around th ese benchmark rates.  Banking 
institutions must set their rates within the limits.  Commercial banks are able to charge lending rates 
above the benchmark (but not lower than 90% of the benchmark), and offer deposit rates below – but 
not above – the benchmark.  Market -based interest rates are allowed in the money and bond markets, 
                                                     
 
56 Large commercial banks that play an active role in other countries' or regions' financial markets, and 
whose overseas business constitutes a substantial share of their total business activities will start to implement Basel II at end 2010, and no later than end 2013.  Other commercial banks, including foreign bank subsidiaries 
in China, may apply to implement Basel II on a voluntary basis. 
57 Before starting operations, a commercial bank must design its business process for annexation loans 
and internal control system, as stipulated in the Guidelin e.  After reporting to the supervisory authority, the bank 
may formally start the operation. 
58 Operational foreign-funded banks wishing to engage  in local-currency business must have had their 
business in China for at least three years, and have  been profitable for two consecutive years, prior to 
application.    
59 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 fi nancial 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 
institution 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 companies, finance companies affiliated to 
enterprises, and other Chinese financial institutions char tered by the CBRC that are legally incorporated within 
the territory of the People's Republic of China. China WT/TPR/S/230/Rev.1 
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and commercial banks may charge lending rates a bove the benchmark (but not below 90% of the 
benchmark), and offer deposit rates below (but not above) the benchmark.60  The interest rate spread 
has been narrowing, suggesting that more competition has taken place (Chapter I). 
60. A maximum interest rate has been set for certa in foreign-currency-dominated deposits of less 
than US$3 million with a maturity of one year or less.61  The foreign currencies involved include: U.S. 
dollars, yen, euros, and Hong Kong dollars.  Re garding non-interest income, certain services are 
subject to regulated prices.62   
(b) Insurance  
61. At end 2008, there were 8 insurance groups and 112 insurance companies in China;  64 were 
domestic companies (31 property insurance, 30 life insurance, and 3 reinsurance), and 48 foreign 
companies (16 property insurance, 26 life insuran ce and 6 reinsurance).  The Chinese insurance 
market remains highly concentrated.  According to o fficial information, the three largest life insurance 
companies held about 63% of market share in 2008, compared with 71.6% in 2006;  the share of the three largest non-life companies was about 64% in 2008, compared with 67.25% in 2006.  The insurance premiums of foreign insurance comp anies amounted to Y 39.12 billion, accounting for 
about 4% of the national market share.  The as sets of foreign insurance companies at end 2008 
totalled Y 152.24 billion, accounting for 4.5% of the total assets of the sector (up from 4.4% in 2001).  Taking into consideration the foreign-invested share in Chinese insurance companies, foreign 
insurance companies' total income  accounted for around 24%;  33 Chinese insurance companies have 
received foreign investment to date.   
62. The insurance market is regul ated by the China Insurance Regulatory Commission (CIRC).  
The main legislation administering insurance service s is the Insurance Law;  its latest amendment 
entered into force on 1 October 2009.
63  Under the Law, all insuran ce companies providing insurance 
services in China must be registered, and all legal persons (including natural persons) or organizations 
in China requiring coverage in China must purchas e insurance services from  an insurance company 
registered and established in China.  Approval is required for forms and rates for products having a 
"bearing on the interests of the public" (e.g. public s ecurity liability insurance products), compulsory 
insurance products, and newly developed life insu rance products.  Forms and rates for all other 
products, must be submitted to the regulatory author ity just for the record.  Furthermore, the Rules on 
the Administration of Insurance Brokerage Institutio ns regulate insurance and reinsurance brokerage 
business and the Rules on the Administration of In surance Agency Institutions regulate insurance 
agencies.  The Provisional Regulations on the Administration of Insurance Asset Management 
Companies allow foreign and domestic insurance co mpanies to establish insurance asset management 
companies.   
63. During the revision of the Insurance Law, th e CIRC issued a notice in September 2008 to 
impose a moratorium on establishing sales offices for insurance;  in accordance with a newly 
                                                      
60 Mortgage loans have been subject to a different policy.  See WTO (2008). 
61 There are no restrictions on interest ra tes for foreign-currency-dominated loans,  
foreign-currency-denominated deposits over US$3 million, or foreign-currency-dominated deposits of less than US$3 million with a maturity of more than one year. 
62 These include:  basic RMB settlement services (e.g . bank drafts, bank acceptances, promissory notes, 
checks, entrusted collection);  and other commercial bank services determined by the CBRC and the State Development and Reforming Commission, based on the competitive situation in the market.  Fees for other 
products and services are to be determined by banks ba sed on market conditions.  Regulated prices will be based 
on costs and allow for "slight profits". 
63 WTO document S/C/W/309, 2 November 2009. WT/TPR/S/230/Rev.1 Trade Policy Review 
Page 84 
 
 
amended Insurance Law, the CIRC issued the Ru les on Administration of Insurance Companies, 
which entered into force on 1 October 2009.  The Rules aim to strengthen internal control of 
insurance companies' affiliates;  the supervision of sales offices is also subject to the Rules.  
Reinsurance business is covered by the Regulations on the Administration of Reinsurance Business. 
64. Insurers may engage in either property insura nce (loss or damage to property, liability 
insurance, and credit insurance) or personal insuranc e (including life, health, and accident and injury 
insurance);  they may not concurrently provide pr operty and personal insurance services, although an 
insurance company engaged in pr operty insurance may, upon approval from the CIRC, provide short-
term health and accidental injury insurance.  For establishing branches, there have been no changes to 
minimum registered capital requirements, or ot her conditions, since China's previous Review.  
Foreign insurance companies may enter the market  as 100% foreign-owned subsidiaries for non-life 
insurance and up to 50% foreign owned for life insu rance.  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", which entered into force in 
December 200864, clarifies certain conditions for the establishment of representative offices by 
foreign insurance companies, including a  minimum asset requirement of US$2 billion.  The circular 
is intended to strengthen supervision of represen tative offices of foreign insurance companies in 
China.65  
65. In order to establish an insura nce asset company, non-life compan ies must have total assets of 
at least Y 5 billion, while life in surance companies and insurance hold ing groups must have at least 
Y 10 billion, and companies must have engaged in  the insurance business in  China for at least 
eight years. 
66. China Post Life Insurance Co mpany Limited obtained CIRC approval to start preparatory 
work for establishment in April 2008, and was es tablished on 9 September 2009, with registered 
capital of Y 500 million.  From a regulatory perspectiv e, China Post Life Insurance is treated in the 
same way and under the same laws and regulations as other insurance companies in China;  the 
authorities maintain that China Post  Life Insurance does not enjoy any preferential treatment in regard 
to supervision standards.  The new company targets mainly farmers, low-income urban residents, and 
migrant workers in cities;  it is subject to ente rprise income tax, like ot her insurance companies. 
(c) Securities 
67. Reform to convert non-tradeable shares of SO Es into tradeable share has continued since 
China's previous Trade Policy Review (Chapter III(4)(iv)). 
68. On fund management, at end-Oc tober 2009, 88 foreign instit utions had obtained licences as 
qualified foreign institutional investors (QFIIs);  76 ha ve started to invest in the securities market in 
China (37 licences were granted between  early 2008 and end-October 2009).66  The authorities 
maintain that on approving foreign participation, pr iority is given to institutions dealing with  
long-term capital management and investment, such  as pension fund, insurers, and charity funds.  
                                                      
64 The establishment and operations of foreign insurance companies are governed by the Regulations 
on Administration of Foreign-funded Insurance Companies, and the Detailed Rules for Implementation of 
Regulations on Administration of Foreign-funded Insurance Companies.  The authorities maintain that notices 
and rules issued by the CIRC since 2008 mainly concern the CIRC’s supervision.   
65 For details of supervision of domestic insurance companies, see the Rules on Administration of 
Insurance Companies. 
66 Applications to qualify as a QFII must be approved by the CSRC, while the SAFE is responsible for 
approving the investment quota.  See WTO (2008) for details. China WT/TPR/S/230/Rev.1 
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Guiding principles on QFII inspections were issued in  2008, with a view to strengthening inspection.  
With regard to QFII's investment in A-shares, no single QFII may hold more than 10% in a listed 
company, and aggregate ownership of shares by QFIIs may not exceed 20%.   
69. Three service providers in the Hong Kong SA R have been allowed to make equity 
investments in China's futures mark et in the form of joint ventur es.  The authorities are currently 
evaluating the business operations of the three compan ies, and studies are to be conducted on further 
opening the sector;  thus a moratorium on gran ting new approvals is currently in effect.  
70. On 23 October 2009, the ChiNext board, a new "growth enterprises board" aiming to attract 
innovative firms and other growing enterprises, was established in th e Shenzhen Stock Exchange.  At 
end-October 2009, 28 companies were  listed in the ChiNext, raising about US$2.3 billion.  In 
accordance with relevant rules by the CSRC, befo re starting up an account and investing in the 
ChiNext, investors must be familiar with the rul es of "growth enterprise board", be well aware of the 
market risk, and have the corresponding risk tolerance.  
71. The stamp duty on the purchase of shares was eliminated in September 2008.  The sale of 
shares remains subject to stamp duty of 0.1% on the value of transactions.  There is no capital gain tax 
associated with the trading of shares. 
72. As of October 2009, there were 106 securities brokerage firms in operation, 60 fund 
management companies, 164 futures firms, and 99 securities investment consultancy entities;  there 
were 8 domestic securities companies (with foreign investment) and 33 sino-foreign joint-venture 
fund management companies.67  More than 1,600 companies were listed on the two stock exchanges 
(Shanghai and Shenzhen), with a combined mark et capitalization of Y 12.1 trillion at end 2008.68  
Reflecting the recent global financial crisis, betw een end-2007 and end-2008, market capitalization 
decreased by 64% (in RMB terms) in Shanghai.69  Market capitalization of A-shares was about 59% 
of GDP in May 2009, 60% of which is in shares that are to be unlocked by 2010.  
73. There are three types of shares:  A-sh ares, B-shares, and overseas-listed shares.70  While 
China's stock market has a small number of institutiona l investors, shares held by these investors have 
been increasing.  At end 2007, the market value of  free-float A-shares held by institutional investors 
amounted to Y 4.43 trillion, or 48.71% of market capitalization of free-float shares and 13.54% of the 
total market capitalization in China (including non-tradeable shares and tradeable shares still  
"locked-up").  At end 2008, the market value of fr ee-float A-shares held by institutional investors was 
Y 2.45 trillion, or 54.62% of free-float market capitalization and 20.21% of the total market 
capitalization in China.   
                                                      
67 China Securities Depository and Clearing Corpora tion (CSDCC) is the sole  supplier of securities 
registration and transfer, securities depository services , and securities payment, cl earing, and delivery.  For 
bonds not traded in these two exchanges, these services are ensured by the China Government Securities 
Depository Trust & Clearing Co. Ltd (CGSDTC).  Commer cial banks acts as sub-cu stodians in the interbank 
market. 
68 Both exchanges are n on-profit legal entities governed by a board of directors, and employ a 
membership system.  Only full members ar e allowed to trade on the exchange.   
69 World Federation of Exchange (2009). 
70 A-shares are denominated in local currency, can  be freely traded and transferred in domestic 
markets. Since 2002, QFIIs have been allowed to invest in A-shares.  B-shares are domestically listed shares of 
China-incorporated co mpanies, denominated in U.S. dollars in Shanghai, and HK dollars in Shenzhen.  
Overseas-listed shares  are shares issued by Chinese companies lis ted on securities markets outside China  
(mainland). WT/TPR/S/230/Rev.1 Trade Policy Review 
Page 86 
 
 
74. At end-September 2009, for listed enterprises that had not accomplished the reform on 
conversion of shares, there was a total of about 9.9 billion non-tradeable A-shares, while the total 
market value of tradeable shares amounted to Y 10.07  trillion.  The total market value of locked-up 
tradeable shares amounted to Y 9.5 trillion, accounti ng for around 49% of the total market value of 
A-shares.  At end-December 2008, there were  235 listed companies owned by the Government, 
accounting for 13.73% of the total listed compani es in number, and 19.74% of the total market 
capitalization. 
75. Despite some recent development, the Chin ese bond market, particularly the corporate 
segment, remains small and underdeveloped71, particularly the corporate segment.  There were 
14 listed companies issuing corporate bonds, raising Y 28.8 billion in 2008, compared with 
3 companies raising Y 11.2 billion in 2007.   
76. In China's futures market, a total of 19 pr oducts are traded in the three exchanges72, there 
were a total of 1.36 billion lots of transactions, fo r a transaction value of Y 71.9 trillion in 2008.  The 
products traded include agricultural products, me tal products, energy-relate d products and chemical 
industry products.  Only Chinese citizens and corpor ations organized and registered in China may 
trade in these markets.  Only memb ers of the futures exchanges are a llowed to trade directly in the 
exchange;  trading by non-members is allowed only through authorized brokerage firms.  
Transactions in overseas futures must be approved by  the CSRC, and may only be used for hedging;  
such transactions can only aim at sterilization.  To  date, 31 enterprises have been allowed to conduct 
overseas futures transactions.   
77. Securities and futures markets are regulated by  the CSRC.  The main legislation is the 
Securities Law.73  Under the Law and the Measures on the Administration of Stock Exchanges, stock 
exchanges are self-regulatory legal entities, provi ding space and facilities for, as well as organizing 
and supervising, the trading of securities.74  
78. Requirements for establishing a securities compan y have remained largely unchanged since 
China's previous Review.75  Under the Securities Law, a securities company must take the form of a 
limited liability company or a joint-stock limited company, and must be approved by the CSRC to 
engage in securities business.76  The Regulations on the Administra tion and Supervision of Securities 
Firms, which entered into force on 1 June 2008 aim to improve the le gal framework governing 
securities firms concerning, inter alia,  incorporation standards, risk controls, supervision of 
                                                      
71 There are four categories of bonds in China's bond market:  government or treasury bonds (T-bonds);  
central bank bonds; financial institu tions bonds (F-bonds); and enterp rise bonds (E-bonds).  China's bond 
market consists of three main market s:  the interbank market, the bank-co unter market, and the exchange market 
(Shanghai and Shenzhen).  See WTO (2008). 
72 Shanghai Futures Exchange (SHFE), Zhengzhou Commodity Exchange (ZCE), and Dalian 
Commodity Exchange (DCE).    
73 Other major laws and regulations include the Company Law, the Securities Investment Fund Law, 
the Regulations on Administration of Futures Trade, and various regulations dealing with securities offering and 
listing;  securities and futures trading;  corporate gov ernance, mergers and acquisitions of listed companies; 
market intermediaries; and securities investment funds. 
74 In addition, the Securities Depository and Clearing Company provides a centralized register, custody 
and clearing services to, and exercises self -regulation over, secu rities trading.   
75 See WTO (2008). 
76 A securities company may engage in:  securities brokerage; securities investment consultancy;  
financial consultancy related to securities trading and in vestment;  securities underwriting;  securities business 
on its own account;  securities asset management;  and any other securities business.  Securities companies are 
allowed, with CSRC approval, to provide client  financing and securities financing services. China WT/TPR/S/230/Rev.1 
 Page 87 
 
 
companies, accountability, and protection of cu stomers rights, as well as sound development of 
capital market.    
79. China Securities Investors Protection Fund Corporation Ltd., established in August 2005, is a 
state-owned company that runs a securities investor protection fund, aimed at protecting stock 
investors from brokerages' bankruptcy or regulatory takeover for mismanagement and 
misappropriation.  Since 2008, the Corporation has been expanding its functions into areas such as 
risk monitoring and risk control, and graduall y establishing an integrated investor protection 
mechanism for monitoring and evaluating risk. 
80. In principle, foreign suppliers may enter Chin a's securities markets through the establishment 
of a new joint-venture with a Chinese partner or by taking a stake in an existing listed securities 
firm.77  In December 2007, China raised the foreig n equity participation limit in listed Chinese 
securities firms to 25% (accumulated total foreign par ticipation);  the limit is 20% for a single foreign 
investor, and aggregate ownership of shares by foreign companies may not exceed 25%;  under the 
previous requirement, no single company was allowed to hold more than 10% in a listed company, and aggregate ownership of shares by foreign comp anies could not exceed 20%.  At the same time, 
China reduced the period of contin uous operation in securities required  to obtain approval for foreign 
equity participation in such firms to five years (previously ten years).  In 2008, two joint-venture 
securities firms were approved, and on 1 January  2008, China allowed qualified joint-venture 
securities firms to gradually expand their business into, inter alia,  A-share brokerage, securities 
proprietary business, and asset management.  The fo reign equity limit for joint-venture securities 
firms is 33%. 
81. Since 2008, there have been no changes to th e Measures for the Administration of Securities 
Investment Fund Management Companies, which re gulate the establishment of domestically owned 
and sino-foreign joint-venture asset management companies.
78  The aggregate equity limit of foreign 
investment (direct and indirect holdings) for joint-venture fund management companies is 49%.  Currently, 16 foreign institutions ha ve foreign equity shares of 49%.   
(d) Financial information 
82. New provisions on the Administration of Prov ision of Financial Information Services in 
China By Foreign Institutions entered into for ce on 1 June 2009;  they eased restrictions on the 
provision of financial information services by foreign institutions.  
                                                     
 
77 The business scope of these joint ventures is lim ited to underwriting stocks (including A, B, and H-
shares) and bonds (including government and corporate bonds);  brokerage business in only B and H-shares;  
and brokerage and proprietary trading of bonds (including government and corporate bonds). 
78 Under the measures, minimum registered capital of Y 100 million is required to establish a fund 
management company. Principal shareholders, defined as those having no less than 25% of total registered capital in the investment fund management company, must have minimum registered capital of Y 300 million;  
other shareholders must have registered capital and net assets of no less than Y 100 million.  A foreign 
shareholder in these companies must:  (a) be a financial institution established according to the law of its country of origin;  (b) be lo cated in a country that has "perfect secur ities 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,  even if it is not a major shareholder. WT/TPR/S/230/Rev.1 Trade Policy Review 
Page 88 
 
 
(iii) Telecommunications  
83. Since its previous Review, China has conti nued to liberalize telecommunication services and 
promote competition in the sector;  new players an d technology have been introduced and prices have 
come down. 
(a) Recent developments 
84. In September 2008, the minimum registered cap ital requirement was lowered from Y 2 billion 
to Y 1 billion for foreign-invested telecom enterp rises engaging in basic telecom across the country, 
or across provinces, autonomous regions, and m unicipalities directly under the central government. 
The minimum requirement for basic telecommuni cations provided within a province, city, 
autonomous region, or municipality directly under the Central Government was also lowered, from 
Y 200 million to Y 100 million.79  At the same time, the Government eliminated the approval 
requirement for domestic companies to be listed abroad.   
85. The basic telecom market was restructured in  2008, and China Telecom entered the mobile 
telecom service market on 7 January 2009.  Curren tly there are three basic services providers, all 
providing fixed-line service, mobile telephone service,  data, IP telephony, and satellite service.   
86. With a view to promoting transparency, China has been engaging in dialogues (involving 
meetings for questions and an swers) on telecommunications with the United States, the 
European Union, and Japan.   
(b) Market structure 
87. Penetration rates of fixed-line services decreased  slightly from 28.1 lines per 100 persons in 
2006 to 27.1 lines per 100 persons in 2007;  the corresponding figures for mobile telephones were 
35.3 and 41.6.  There has been a significant increase in  the use of Internet services.  According to the 
ITU's World Telecommunication Regulatory Database, as of 2008, China had granted 3 licences for 
local-distance service, local service, international service, mobile service, and leased-line service, 
respectively, 5 for satellite service, 1,257 for inte rnet service providers, 253 for data communications, 
43 for VSAT (Very Small Aperture Terminal) service , 13,894 for content providers, and 1,090 for call 
centres. 
88. As a result of market restructuring led by the Government in 2008, China has 
three nationwide basic telecommunications service providers, China Telecom, China Mobile, and 
China Unicom, which are all state-owned enterprises.   In October 2009, market shares in the fixed-
telecom market, in terms of the number of subscrib ers and revenue, respectively, were:  64.5% and 
69.9% for China Telecom, 35.5% and 30.1% for Chin a Unicom, and the remainder for China Mobile.  
Similarly, in the mobile telecom market, the r espective shares were 6.7% and 5.2% for China 
Telecom, 20.5% and 12.1% for China Unicom, and 70.8% and 82.7% for China Mobile.  The State 
remains the majority owner of all the basic telecom service providers80;  however, private 
participation and foreign investment has been allo wed gradually.  The three companies have been 
listed in different stock exchanges:  currently, the share of foreign ownership is around 25.8% in 
China Mobile, 31.6% in China Unic om, and 22.3% in China Telecom. 
                                                      
79 No new official applications to engage in basic telecommunications have been made by foreign 
investors since 2008. 
80 These assets are held by the state-owned Assets Supervision and Administration Commission 
(SASAC) on behalf of the country, despite the Regula tions on Telecommunications (issued in 2000), which 
stipulate the separation of the Government from the business of providing telecommunication services. China WT/TPR/S/230/Rev.1 
 Page 89 
 
 
(c) Regulatory structure and policies 
89. The telecoms sector is regulated by the Ministry of Information Industries and Technology 
(MIIT), which sets tariffs and tariff caps for basic services, and supervises their implementation.81  
Internet activities and services are regulated, supervised, and administered by several departments, inter alia , the ministries and agencies dealing with th e press, publications, education, health, drug 
administration, and industry and commerce.  Telecommunication services that convey radio and 
television programming are regulated by the State Administration of Radio, Film and Television 
(SARFT).   
90. The authorities consider that the MIIT is an  independent regulator, independent from any 
telecommunications enterprises, as it is financed by State fiscal budget and its personnel are public 
servants.  The MIIT, the NDRC, and the Ministry of  Finance jointly promulgated an announcement to 
encourage the recent restructuring of telecom service providers;  and the MIIT is in charge of issuing 
licences.   
91. Telecommunication services are subject to the Anti-Monopoly Law. 
92. The regulatory structure, and legislation a nd 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 th at China does not have 
a specific licence 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.   
93. Three 3G licences were granted to the three b asic service providers in January 2009.  The 
authorities maintain "technological neutrality" in granting licences, allowing telecom operators to 
select technologies recommended by the ITU;  Chin a Mobile uses TDSCDMA, China Unicom uses 
WCDMA, and China Telecom uses CDMA2000.  
Interconnection 
94. No major changes have been made to rules governing interconnection during the review 
period.
82  A dominant carrier must not refuse requests for interconnection from other telecom service 
operators, and interconnec tion agreements must be filed with the MIIT.83  The authorities do not yet 
                                                      
81 In addition, the relevant provincial telecom administration authorities are responsible for supervising 
and managing prices on local telecom services, in cooper ation with the local authorities in charge of pricing;  
they are also responsible for the approval and registration of telecom pricing in the region, supervising the 
market, and dealing with violators. 
82 The process for interconnection is set out mainly in the Regulations on Telecommunications, the 
Regulations on the Interconnection between Public Telecommunication Networks, Measures on Supervision and 
Administration of Communications Quality between Public Telecommunications Networks, and Measures on 
Settlement of Interconnection and Apportionment of Relay Expense between Public Telecommunications 
Networks.  The MIIT Measures on Settlement of Calling Charges between Telecommunications Networks regulate interconnection between telecom operators, and re quire fees to remain below certain levels.  Service 
providers may negotiate any charges that are not set out in the regulations;  MIIT or the relevant provincial 
telecom administration authorities may interven e when the parties are unable to agree. 
83 A dominant carrier is defined under the Regulations on the Interconnection between Public 
Telecommunication Networks as those who control necessary basic telecommunication equipment, and have 
more than a 50% market share in the local business and are able to "substa ntially affect the market accession of 
other service providers". WT/TPR/S/230/Rev.1 Trade Policy Review 
Page 90 
 
 
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 una ble to reach a mutual agreement, they can apply 
to the MIIT or the relevant provincial telecom authority for mediation.   The MIIT has settled several 
interconnection disputes, including one in 2008 and tw o 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. 
Foreign investment and licensing 
95. Foreign investment in the sector is regulated by the Administrative Regulations on Foreign 
Investment in Telecommunications.  The re gulations were amended In September 2008 to, inter alia, 
lower the minimum registered capital requirement from Y 2 billion to Y 1 billion for  foreign-investment telecom enterprises engaging in  basic telecom services across the country, or 
across provinces, autonomous regions, and municipa lities directly under the central government;  and 
from Y 200 million to Y 100 million for FIEs engaging in basic telecom services within a province, 
autonomous region, and municipality di rectly under the central government.
84  At the same time, the 
Government eliminated the approval requirement  for domestic telecom enterprises being listed 
abroad.  The Administrative Regulations also stipul ate restrictions on foreign equity participation;  
foreign participation is allowed up to 49% for basi c telecom services and up to 50% for value-added 
telecom services.85  Procedures for an FIE to obtain a licence have not changed since 2008.  
Telecommunications tariffs 
96. Data provided by the authorities indicate that th e average of "comprehensive telecom tariffs" 
dropped by 11.5% year-on-year in 2008.  There are mainly three types of tariffs:  government set, government guided, and market adjusted.
86  For example, the MIIT sets tariff caps for fixed-line 
domestic, international long-distance te lephony, and mobile domestic roaming.87  Tariffs for different 
telecom services vary significantly by region due to  economic conditions and users' ability to pay.  
The current regulatory framework for telecom tari ffs includes:  Measures on the Approval and Filing 
Procedure of Telecommunication Tariff, the Catalogue of Telecommunications Tariffs Subject to 
Market-adjusted Prices, and the Catalogue of Tel ecommunications Tariffs Administered by Provincial 
                                                      
84 State Council Order No. 534, promulgated on 10 September 2008. 
85 The minimum registered capital for a telecom FIE providing value-added services across the country 
or across different provinces, autonom ous regions, and municipalities direc tly under the Central Government (an 
area), is Y 10 million;  for services provided within an area, the requirement is Y 1 million.  The minimum 
registered capital requirement stipulated in the Administrative Regulations on Foreign Investment in 
Telecommunications is identical for foreign-invested and domestic telecom enterprises. 
86 Details of the government-set and government-guided tariffs administered by the Central 
Government are provided in the Catalogue of the National Development and Planning Commission and the 
State Council on Ministerial Pricing (Decree No. 11 of  the National Development and Planning Commission).  
The Notice on Implementing the Market Adjusted Pricing for Part of the Telecommunication Business provides 
information regarding market adjusted tariffs. 
87 In March 2008, China lowered calling charges on domestic roaming of mobile telephone from  
Y 1.3-1.5 per minute to no higher than Y 0.6 per minute, and called charges from about Y 1.3-1.5 per minute to 
no higher than Y 0.4 per minute.  Tariff caps are Y 0.07/6 seconds for domestic long-distance telephony, and 
Y 0.8/6 seconds for international long-distance telephony (for outgoing calls to the Hong Kong and Macao SARs, and Chinese Taipei, the tariff cap is Y 0.2/6 seconds ).  Various provinces have different ceilings for call 
charges within the operating range of local wired te lephone networks, ranging from Y 0.18 per minute to 
Y 0.3 per minute.  Single-direction charging of mobile telephone business, in which the called numbers are not 
charged, has been implemented within the business range to which the calling numbers belong, equivalent to the 
range of a local wired telephone network. China WT/TPR/S/230/Rev.1 
 Page 91 
 
 
Communications Administration Authorities.  The Regulations on Telecommunication stipulate that, 
where there is "adequate competition", prices of tele com services must be determined by the market.  
Tariffs for value-added services, and services wher e there is "sufficient market competition" have 
been liberalized gradually since 2002.  In April 2008, charges were liberalized for temporary and 
short-term leasing of ordinary fi xed-line telephone, local junction ci rcuit, narrowband ISDN, packet 
exchange, voice (audio) circuit, DDN, dig ital circuit, and frame relay.     
97. To adjust the charges for telecom services subject to government-set or government-guided 
tariffs, telecom business operators must file an app lication with competent authorities, with copy to 
the competent price administrative departments of  the State Council or provincial governments.  
Business operators may determine and adjust their charges for telecom servi ces within the permitted 
range of government guided tariffs, and those s ubject to market-adjusted tariffs by notifying, ex ante,  
such prices or adjustments, to the competent aut horities.  From 18 November 2009, the charges for 
basic monthly line rental and for calls within the ope rating range of local network, both in local-wired 
telephone business and wireless network telephone se rvices (also called wireless local telephone or 
Xiao Ling Tong), as well as permanent rented circu its, were made subject to certain price ceilings 
(government-set tariffs).   
98. According to the authorities, telecom service ope rators in China may offer preferential prices 
to customers, including credit accumulation and discounts, for reasons including competition and upgrading of technology.  The pricing structure for mobile telephony services is similar.  The 
authorities maintain that China, with its vast area and population, requires heavier front-loaded 
investment in telecom infrastructur e than most other countries.   
Universal service 
99. Under the Regulations on Telecommunications  (2000), operators must provide universal 
service.  A fund is in the process of being establishe d by the MIIT, together with other ministries;  
they are working on a cost structure for compensati ng service providers for the provision of universal 
service.  Meanwhile, MIIT has issued a detailed plan related to universal service requirements on 
operators each year since 2004.  Between January  2008 and December 2009, telephone service newly 
reached about 56,665 remote "natural villages" ( over 20 households) and abou t 2,805 "administrative 
villages".  The proportion of natural villages in China having telephone services rose from 90.6% to 
93.5% and that of administrative villages from 99.5% to 99.8% during the period.   
(iv) Transport services 
(a) Air transport services 
Main trade-related developments 
100. During the review period, direct cross-strait flights was made possible and a number of 
regular flights between China and Chinese Taipei are already in operation.  There have been no other 
major changes to the regulatory framework for air transport servi ces.  Nonetheless, the authorities 
consider that China has always been committed to ope ning up its market for civil aviation;  the scope 
of opening has been large and the only area currently cl osed to foreign participation is management of 
air traffic control systems.
88  In 2008 and 2009, the authorities approved ten FDI projects worth 
                                                      
88 Since 2002, foreign investors in all-cargo, all-passe nger, or combined airlin es in China have been 
allowed to hold 49% of the capital, while the individual shareholding of a foreign investor and its affiliates must 
not exceed 25%.  See WTO (2008) for more details of FDI restrictions in civil aviation. WT/TPR/S/230/Rev.1 Trade Policy Review 
Page 92 
 
 
US$94.93 million, concerning, inter alia, investment in air traffic companies, training of pilots and 
airport services.    
Market overview 
101. At end 2009, there were 42 independent civil ai rlines in China, including 23 state-owned 
companies.    
Regulatory framework 
102. The CAAC is the main agency responsible fo r governance of the civil air transport sector.  
The sector is regulated by the Civil Aviation Law,  administrative regulations issued by the State 
Council, and related rules formulated by the CAAC.  Since China's previous Review, there has been 
no change in the legislative framework on civil aviati on;  requirements for the establishment of public 
air transport enterprises have also remained unchanged.   
103. The authorities state that no domestic air lines are accorded exclusive rights by the 
Government.  Nonetheless, Chinese civil servants are re quired to take Chinese flag carriers for official 
missions, unless no such flights are available on the "most economical routes".  It would appear that some form of government assistance has recently be en accorded to some Ch inese airline companies.
89 
104. International airports are mainly owned and managed by the Government;  there is some 
foreign investment through joint ventures.   
105. Airport slot allocation for some busy airports is conducted by Slot Coordination Committees 
in accordance with the Provisional Rules on Slot  Management issued by the Civil Aviation 
Administration of China (CAAC);  the authorities main tain that the rules follow the principles of the 
IATA guidelines.90  Slot Coordination Committees are co mposed of the regional administrative 
bureau, regional air traffic control bureau, the air lines that use the coordinated airport regularly, and 
representatives from the airport administrative institu tions;  the president of a Committee comes from 
the regional administrative bureau. 
106. According to the authorities, there are no exam ination or approval requirements for Chinese 
airlines to use foreign computer reservation systems ( CRS);  agents of foreign airline companies must 
obtain approval from the CAAC before connecting to , or using foreign CRS to reserve tickets for 
customers, in accordance with the Provisional Ad ministrative Measures on the Usage of Computer 
(Passenger) Reservation System By Foreign Air Trans port Enterprises and their Sale Agents within 
the Territory of China. 
Bilateral air service agreements and international linkages 
107. Between January 2007 and June 2009,  China signed bilateral air services agreements with six 
countries (Tadzhikistan, Zambia, Saudi Arabia, Tanz ania, Angola and Croatia), one protocol with the 
United States, and renewed one agreement (with Nort h Korea).  China has 112 bilateral air service 
agreements in force.91  Currently, 90 foreign airlines operate over 1,330 passenger flights per week 
                                                      
89 Centre for Asia Pacific Aviation online informati on.  Viewed at:  http://www.centreforaviation.com/ 
news/2010/03/30/air-china-china-southern-and-china-eastern-relish-fresh-cash-injections-amid-booming-demand/page1 [1 April 2010]. 
90 See WTO document S/C/W/Add.2, 28 September 2007, paragraph 592 for details of China's slot 
allocation mechanism. 
91 For details see WTO (2006). China WT/TPR/S/230/Rev.1 
 Page 93 
 
 
and 313 cargo flights between 30 cities in China and over 100 cities overseas.92  Following an 
approval for direct chartered flights between China and Chinese Taipei, which began on 15 December 2008, a bilateral pact was signed on 26 April 2009 to allow direct scheduled air traffic 
between 27 cities in China and 8 cities in Chinese Ta ipei;  they have allowed 270 scheduled passenger 
flights per week (270 flights have been in ope ration since 31 August 2009) and 28 scheduled cargo 
flights per week between China and Chinese Taipei, served by 9 airlines from China and 5 airlines 
from Chinese Taipei.     
Foreign investment in the sector 
108. Foreign investment in the civil aviation industry is governed by Order No. 110, issued jointly 
by the CAAC, the MOFCOM (then MOFTEC), and the NDRC.  Foreign investors are allowed to 
invest in or to manage all businesses related to civil air transport, except for those concerning air 
traffic control systems.  
109. Foreigners may invest by establishing an equity joint venture or contractual joint venture; or 
through the purchase of shares of civil aviation enterprises, including shares issued overseas and 
foreign shares issued in Chin a by the aviation enterprises.
93  Foreign investors in all-cargo, all-
passenger, or combined airlines in China are allowe d to hold 49% of the capital, while the individual 
shareholding of a foreign investor and its a ffiliates must not exceed  25%.  CAAC Decree 110 
stipulates that a single foreign investor (including its affiliate companies) may hold no more than 25% 
of the shares of an airline, and total fore ign shares in an airline must not exceed 49%. 
110. China allows service providers from the Special Administrative Regions of Hong Kong and 
Macao to provide management services for medium a nd small airports in the form of a contractual 
joint venture, equity joint venture or solely-funded enterprise. 
(b) Maritime transport services 
Main trade-related developments   
111. As in air transport, cross-strait maritime tr affic has been allowed since China's previous 
review, resulting in a significant increase in traffi c between China and Chinese Taipei.  Reform in 
pilotage services has made progress since 2007.  In  other areas, the regulatory environment for 
maritime transport in China h as remained largely unchanged. 
Market structure 
112. Some 90% of China's exports and imports ar e transported by sea.  At end 2008, about 
300 international maritime transport companies were  registered in China, among which about 30 were 
joint ventures.  More than 160 international liner s have been engaging in international shipping 
operations;  116 are overseas companies from around 30 countries and regions (about 72% of the total).  China is party to the UNCTAD Conven tion on a Code of Conduct for Liner Conferences, 
1974. It is not clear to the Secretariat whether liner conferences are exempted from the Anti-
Monopoly Law.    
                                                     
 
92 These figures do not include flights between China and the Hong Kong and Macao SARs and 
between China and Chinese Taipei. 
93 Foreign investors must be qualified as a Chinese legal person to invest, in the form of contractual 
joint venture, in public air transport and general aviatio n enterprises engaging in business flights and air sight-
seeing. WT/TPR/S/230/Rev.1 Trade Policy Review 
Page 94 
 
 
113. About 40 foreign shipping companies have set up wholly foreign-owned companies in China. 
Over 3,300 domestic and foreign companies ha ve been qualified as non-vessel-operating common 
carriers (NVOCC), of which around 1,500 are foreign- invested companies and offshore companies.  
Since 2007, 30 foreign line rs have obtained new licences to engage  in international liner operations. 
Nearly 210 offshore companies have been qualified as NVOCCs, 5 overseas shipping companies have 
set up new wholly foreign-owned companies related to shipping and container transportation services, 
and opened 46 new subsidiaries in China.   
Regulatory system 
114. The regulatory system for maritime transport has remained largely unchanged since the 
previous Review of China.  The Ministry of Transport (MOT), the Ministry of Communications 
(MOC) until March 2008, is in charge of formulati ng shipping and port policies.  The Maritime Code 
and the Regulations on International Maritime Transportation provide the general regulatory 
framework, and encourage multimodal transport.  Examination and verification by the MOT is 
required for an international shipping operator to engage in international liner services.  Bulk shipping 
is also covered by the Regulations.  In October 2007, China eliminated the approval requirement for 
the establishment of permanent representative offices in China by foreign-funded enterprises engaging 
in international shipping and auxiliary servi ces to international maritime transportation.   
115. According to the authorities, there are no financial subsidies or cargo preferences for 
domestic shipping companies;  domestic and foreign companies enjoy equal market access with regard to international maritime transport services.   
116. Shipping and towing between domestic ports (cabotage) must be undertaken by ships flying 
the national flag, unless otherwise stipulated by laws or administrative rules and regulations.
94  
According to the authorities, there are no exclusivit y rights or subsidies for ships flying the national 
flag.  
117. An Ad-hoc Tax-free Registration Policy for the Chinese-flagged ocean shipping fleet, 
introduced on 1 July 2007, remains in place.95  The authorities maintain th at the purpose of the Policy 
is to encourage the development of the Chinese-fl agged ocean shipping fleet, and to safeguard the 
legitimate rights of Chinese seafarers.  Under this policy, Chinese-owned vessels that were registered 
overseas before the end of 2005, had reached a certain ship age, and met relevant technical conditions, 
were exempted from customs duty and import VAT, and allowed to register back in China in 
accordance with the current ship registration regulatio ns, if they complied with certain criteria on the 
age of the vessel and technical requirements, a nd if they submitted import declarations within 
two years, from 1 July 2007.  This Policy, orig inally scheduled to end in June 2009, was extended 
until 2011. 
                                                      
94 The Regulation on Vessel Registration stipulates that, to fly the national flag, a vessel must be 
registered in China and obtain Chinese nationality.  Its cr ews are usually Chinese citizen s;  when it is necessary 
to recruit foreign crew, approval from the MOC is required.  In addition, if the ship is owned by a Chinese 
citizen, the owner must have their residence or main business office in China;  if the ship is owned by a legal 
person, their main business office must be in China;  for a joint venture with foreign investment, no less than 50% of the company's registered capital must be owned by the Chinese partner.   
95 Based on a notice issued in 2007 by the Ministry of Finance:  the Notice on Relevant Issues on 
Import Taxation Policies Concerning the Registration in  China of Chinese-Funded  "Flag of Convenience" 
Ships. China WT/TPR/S/230/Rev.1 
 Page 95 
 
 
Foreign direct investment 
118. There has been no significant change in th e regulatory framework on foreign direct 
investment in the maritime sector.96  Wholly foreign-owned enterprises are allowed in maritime cargo 
storage and warehousing services;  sino-foreign equity  joint ventures or sino-foreign contractual joint 
ventures with the majority share held by the fore ign partners are allowed for international ship 
management, international maritime container freight stations, and container yard services. 
Port services and auxiliary services 
119. Legislative framework concerning port services si nce China's previous Review has remained 
largely unchanged.  The MOT is responsible for overall national port administration, including 
formulation of policy, while local governments design ate a department (port administration authority) 
to implement port-related re gulations and policies.  The main legi slation is the Port Law, under which 
domestic and foreign investment in  port construction and operation is "encouraged".  To engage in 
port operations, enterprises must obtain an operating licence from the port administration authorities.   
120. Foreign investment in construc tion and management of port infrastructure (public wharf) is 
listed as "encouraged" in the Cata logue for the Guidance of Foreign Investment Industries;  foreign 
investors may establish wholly owned port operators or set up joint ventures.  A port's berths may be 
owned and operated by state-owned harbour companies, FIEs, or private enterprises.  Port 
administrative functions are under the port administra tion authorities;  port enterprises are responsible 
for daily operation.  
121. Port charges are decided by the MOT and the NDRC, based on cost and level of competition 
in the market;  port operators may set some f ees, such as for warehousing and container yard 
services.97  
122. Under the Regulations on Administration of Pilota ge, pilotage is compulsory for foreign-flag 
vessels, and for some Chinese vessel s under certain laws or regulations.  All pilotage staff must be 
Chinese nationals.  Since 2005, reforms in pilotage services have been conducted to, inter alia,  
separate pilotage entities from port enterprises and, b ased on the principle of "one port, one pilotage 
entity", establish non-profit pilotage entities admini stered by local port administration authorities.98  
More than 40 such pilotage entiti es have been established to date.  
Bilateral and international agreements 
123. According to the authorities, China does not  have any cargo reservation or preference 
measures;  all commercial cargo is accessed freely, unless covered by cargo-sharing arrangements.   
                                                      
96 In addition to Article 32 of the Maritime Tran sportation Regulations, which provides a general 
regulatory framework for foreign investment, detailed regulations are provided in the Administrative Rules on 
Foreign Investment in the International Maritime Tran sportation Industry.  Under these rules, the MOC, and 
MOFCOM are responsible for granting approval for the establishment of FIEs operating in international 
maritime transport.  Sino-foreign equity joint ventures, sino-foreign contractual joint ventures, or wholly 
foreign-owned enterprises are allowed to offer routine se rvices, such as canvassing of cargoes, issuance of bills 
of lading, settlement of freight, and signing of servi ce contracts for the investor's owned or operated vessels. 
97 Details of port charges are published on the website of the Ministry of Transport.  Viewed at:  
http://www.moc.gov.cn/zhuzhan/jiaotongguifei/guojiaguifei/gangkouguifei/200710/t20071009_430586.html. 
[05.12.2009]. 
98 According to the authorities, for reasons of nationa l security and port safety, it is not appropriate to 
privatize or corporatize pilotage entities. WT/TPR/S/230/Rev.1 Trade Policy Review 
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124. China is a Category-A member of Council of th e International Maritime Organization (IMO).  
It is party to the International Convention for the Safety of Life at Sea of 1974 (SOLAS), and the International Ship and Port Facility Security Code  (ISPS).  The port administration authorities and 
maritime safety administrations in China are resp onsible for the security of ship and port facilities 
across the country in accordance with the Regulations  on Ship Security and the Regulations on Port 
Facility Security. 
125. China has concluded bilateral maritime trans port agreements with 60 countries/economies.  
The authorities indicate that disclosure of the conten t of some agreements, including the list of all the 
60 countries/economies requires the consent of both pa rties involved.  Bilateral agreements with 
Argentina, Brazil, Thailand, and Zaire have cargo-sh aring provisions;  the authorities maintain that 
cargo-sharing provisions are not used in practice.
99  A consultation mechanism has also been set up 
between China and several WTO Members, including  the United States, the European Union, Japan, 
and the Republic of Korea.  On 4 November 2008, China and Chinese Taipei agreed to open some of 
their ports to allow direct maritime traffic betw een them;  to date, China has opened 68 ports and 
Chinese Taipei has opened 13.  The authorities indicate that no data are available on the 
volume/frequency of such traffic. 
126. Since China's previous Review, there has b een no change in the Agreement on Maritime 
Transport between China and the United States100, or arrangements under the Closer Economic 
Partnership Arrangements (CEPA) with the Speci al Administrative Regions of Hong Kong and 
Macao.101   
(v) Postal and courier services 
127. China's main postal regulations include the Postal Law, Measures of Administration on 
Supervision of General Postal Services, Measure s of Administration on Express Delivery Market, and 
Measures of Administration on Operation License of Express Delivery Services.  The State Post 
Bureau is the competent authority for the superv ision and administration of general postal services 
and the postal market in China.  Under the leadership of the Postal  Administrative Department of the 
State Council, the postal administrative ins titutions of provinces, autonomous regions, and 
municipalities directly under the jurisdiction of th e Central Government are in charge of regional 
supervision and administration for general postal ser vices and the postal market.  China Post is the 
wholly state-owned enterprise;  it provides basi c mail services and express delivery of letters and 
parcels, as well as financial services. 
128. Both foreign and domestic private express deliver y companies engage in international express 
delivery of letters and parcels, competing with Ch ina Post Group Corporation.  An amended Postal 
Law entered into force on 1 October 2009.  The am ended Law accords exclusiv ity to state-owned post 
                                                      
99 According to the authorities, these agreements include all the coastal countries that have diplomatic 
relations with China.   
100 Under the Agreement, U.S. shipping companies are allowed to establish joint-venture shipping 
agencies and wholly owned shipping companies, container transport servi ce companies, and logistic service 
companies in China, while the United States does not la bel Chinese shipping companie s as "controlled carriers". 
101 Under the CEPA, service suppliers in these region s are allowed to:  set up wholly owned companies 
in China to conduct international ship management, seaborne cargo storage and warehousing, container yards, 
container freight stations, and NVOCC business;  offer serv ices such as cargo canvassing, issuing bills of lading, 
settling freight, and signing service contracts for the ships they own or operate;  and utilize trunk-line container 
carriers to transport empty containers they own or rent between the mainland ports, after undergoing Customs 
procedures.  The minimum registered capital requirements for these suppliers to engage in warehousing services 
and freight forwarding se rvices are the same as for domestic enterprises. China WT/TPR/S/230/Rev.1 
 Page 97 
 
 
offices for the basic delivery of "corresponden ce".  According to the amended Postal Law, 
"correspondence" refers to letters and postcards;  it would appear that "delivery of correspondence" 
includes "express delivery services".  The Law also  prescribes that "correspondence" means the 
information carriers that are sent to certain indivi duals or companies by addresses with sealed covers;  
books, newspapers or periodicals are not included in "correspondence".  According to the authorities, 
the amended law will not prohibit foreign-inv ested express delivery enterprises from operating 
international express delivery of letters (except for ce rtain private letters) and the international and the 
domestic express delivery of parcels.  The legal office of the State Council is working on the examination and amendment of the "Provisions on the exclusive operation scope of the postal 
enterprises (draft for review)" subm itted by the State Post Bureau. 
129. The amended Postal Law establishes a licensing system for express delivery operations;  it 
would appear that intra-provincial express de livery companies will face a minimum capital 
requirement of Y 500,000, while the requirement for inter-provincial and international business will 
be of Y 1 million and Y 2 million, respectively.  The amended law also provides scope for compulsory payments to subsidize universal postal services.  The State Post Bureau and the provincial 
post administrative department are in charge of  examination and approval for express delivery 
operations.  The authorities state that the State Po st Bureau has issued Ad ministrative Measures of 
Express Delivery Operation Licensing, and detaile d application conditions and process for express 
delivery operation licences, based on the provisions of the Postal Law.    
130. For some years, both foreign and domestic private express delivery companies have been 
engaging in express letter services, and there are over 100,000 foreign and non-state express mail 
service providers in China, which handle a large shar e of same-city mail delivery and over half of 
trans-province express mail services;  mail below 350 grams accounts for over half of their services.
102  It remains to be seen how the new law, t ogether with its implementing regulations, will 
affect these business operations.   
131. On 4 November 2008, the Association for Relati ons Across the Taiwan Straits and the Straits 
Exchange Foundation signed the Postal Agreement Ac ross the Taiwan Straits, which stipulates that all 
the postal services should be offered across the Taiw an Straits, within the scope of airmail letters, 
snail-mail letters (postal mail, registered lette rs, postcards, aerogrammes, presswork, braille, and 
packets), airmail parcels and snail mail parcels, express mail service (EMS), and postal exchange.  
Both sides may send mail packages to  the other party's post processing centre by air or direct ocean 
shipping.  The authorities indicate that mail exchange  across the Straits has been fully realized.  For 
China, the cities that may deliver mail to Ch inese Taipei include Beijing, Shanghai, Guangzhou, 
Fuzhou, Xiamen, XIi'an, Nanjing, Chengdu;  for Ch inese Taipei, the cities that may deliver mail to 
China include Taipei, Kaohsiung, Keelung, Kinmen and Matsu Islands. 
(vi) Tourism 
132. The authorities are of the view that China liber alized the tourism sector in advance of its 
GATS commitments.  In 2008, there were 30 foreign travel agencies operating regularly in China;  
15 were wholly owned by foreign companies and 8 foreign controlled (3 from Hong Kong SAR, and 
others from Canada, Australia, Germ any, the United Kingdom, and Japan). 
133. On 1 May 2009, the Regulations of Administration on Travel Agencies were revised and 
renamed the Regulations on Travel Agencies;  th e new regulations allow foreign-invested travel 
agencies already established in China to open bran ch offices, allow any foreign natural or legal 
                                                      
102 Beijing Review online information.  Viewed  at:  http://www.bjreview .com.cn/lianghui/txt/2006-
12/20/content_57427.htm [15.02.2010]. WT/TPR/S/230/Rev.1 Trade Policy Review 
Page 98 
 
 
persons to establish travel agencies in China (p reviously, only foreign travel agencies or foreign 
enterprises whose core business was in tourism sect or were allowed to invest in China), and offer 
foreign-invested tourism agencies national treatment  by lowering the amount of required registered 
capital.103  Foreign-invested travel agencies are prohibited, in principle, from providing outbound 
travel services.  However, under the revised re gulations, such business is allowed (1) with the 
approval of the State Council, (2) under provision of certain FTAs104, and (3) under special provisions 
in Mainland and Hong Kong or Macao Closer Econom ic Partnership Arrangements.  Currently, the 
authorities are accelerating a pilot programme to allow foreign companies to provide outbound travel 
businesses.   
134. China has concluded memoranda of understa nding (MOUs) for approved-destination status 
(ADS), which allow travel agen cies in China to sell group tours to ADS countries and economies.  
The authorities consider that the objective of ADS is  to facilitate group travel by Chinese citizens to 
foreign countries;  all countries may apply for ADS status.  China has signed MOUs with 139 countries and regions (134 at end 2007);  104 ha ve entered into force.  Group tours by Chinese 
nationals to non-ADS countries and economies are not allowed.   
(vii) Other services  
135. The Law on Lawyers was amended on 28 Oc tober 2007 and entered into force on 
1 June 2008;  its implementing rules, the Measures for the Administration 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, a nd administrative rules of law firms, and licensing 
requirements and practices of lawyers, and provide  for the protection of occupational rights of 
lawyers.  They are intended to improve the lega l framework for a rapidly changing environment for 
China's legal service sector.  The amendment did no t affect the regulatory environment for foreign 
lawyers and foreign law firms operating in China.
105   
136. Legislation, regulations, and rules concer ning distribution and accounting services have 
remained largely unchanged since China's previous review. 
                                                      
103 Under the new Regulations on Travel Agencies, the amount of required regist ered capital for foreign 
investment was lowered to Y 300,000 (previously Y 2.5 million). 
104 None of China's FTAs (excludi ng Mainland and Hong Kong or Macao Closer Economic Partnership 
Arrangements) has provisions allowing foreign-invested travel agencies to provide outbound travel services. 
105 For details, see WTO (2008). China WT/TPR/S/230/Rev.1 
 Page 99 
 
 
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