RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/ACC/SPEC/CHN/1 
14 June 2000 
 (00-2364) 
Working Party on the  
Accession of China  
 
 
 
REVISED OUTLINE OF THE DRAFT REPORT OF THE WORKING PARTY 
ON THE ACCESSION OF CHINA TO THE WTO1 
 
  The following Revised Outline of the Draft Re port of the Working Party on the Accession of 
China has been prepared for the information of Working Party members and China, and to assist in 
recording the work done to date.  The Revised  Outline is intended to reflect the multilateral 
discussions that have taken place in the Working Party and draws upon text from the previous Outline 
of the Draft Report dated 28 May 1997, the Draft Protocol dated 28 May 19 97, and China's Updated 
Version of the Memorandum on the Foreign Trad e Regime, circulated on 21 March 2000 in document 
WT/ACC/CHN/17.  
 
 In preparation of this Revised Outline, it w as sometimes necessary to adapt some of the bold 
text of the Draft Report dated 28 May 1997 wh en developing the record of discussions and 
commitment paragraphs in the Revised Outline.  Cr oss references to the bold text of the Draft Report 
are provided whenever the text has been adapted,  and any adapted text is marked in italics.  
 
_______________ 
 
                                                     
 
1 In English only WT/ACC/SPEC/CHN/1 
Page 2  
 
 
 
REVISED OUTLINE OF THE DRAFT REPORT OF THE WORKING PARTY
 
ON THE ACCESSION OF CHINA TO THE WTO  
 
 
I. INTRODUCTION 
 
1. At its meeting on 4 March 1987, the Counc il established a Working Party to examine the 
request of the Government of the People's Republic of China (hereinafter referred to as "China") 
(L/6017, submitted on 10 July 1986) for resumption of its status as a GATT contracting party, and to 
submit to the Council recommendations which may include  a draft Protocol on the Status of China.  
In a communication dated 7 December 1995, the Government of China applied for accession to the 
Agreement Establishing the World Trade Organization (hereinafter referred to as the "WTO Agreement") pursuant to Article XII of the WTO Agreement.  Following China's application and 
pursuant to the decision of the General Council on 31 January 1995, the existing Working Party on 
China's Status as a GATT 1947 Contracting Party was transformed into a WTO Accession Working 
Party, effective from 7 December 1995.  The terms of reference and the membership of the Working 
Party are reproduced in document WT/ACC/CHN/2/Rev.6.   
 
2. The Working Party on China's Status as a Contracting Party met on 20 occasions between 
1987 and 1995 under the Chairmanship of H.E. Mr. Pierre-Louis Girard (Switzerland).  The Working 
Party on China's accession to the WTO Agreement met on _________________ and 
_________________ under the same Chairman.   
 DOCUMENTATION PROVIDED 
 
3. The Working Party had before it, to serve  as a basis for its discussion, a Memorandum on 
China's Foreign Trade Regime (L/6125) and questions  posed by members of the Working Party on the 
foreign trade regime of China, together with repli es of the Chinese authorities thereto.  In addition, the 
Government of China made available to the Work ing Party a substantial amount of documentation., 
which is listed in document WT/ACC/CHN/…    WT/ACC/SPEC/CHN/1 
 Page 3 
 
 
INTRODUCTORY STATEMENTS 
 
4. In statements to the Working Party, th e representative of China emphasized that the 
resumption of China's status as a contracting part y and accession to the WTO were priorities for the 
government and critically important elements in the process of economic reform towards a more 
market-oriented economy and opening to the outside wo rld.  He noted in this connection that China 
had been a full participant in the Uruguay Round and had signed the Final Act accepting the results of 
these negotiations.  5. The representative of China not ed that China had a territory of 9.6 million square kilometres 
and, at the end of 1998 a popul ation of 1.25 billion.  Since 19 79, China had been progressively 
reforming its economic system, with the objective of  establishing and improving the socialist market 
economy.  The reform package introduced in 1 994 covering the banking, finance, taxation, 
investment, foreign exchange and foreign trade sectors, had brought about major breakthroughs in 
China's socialist market economy.  State-owned ente rprises had been reformed by a clear definition of 
property rights and responsibilities,  a separation of government from enterprise, and scientific 
management.  A modern enterprise system had been  created for the state-owned sector, and the latter 
was gradually getting on the track of growth thro ugh independent operation, responsible for its own 
profits and losses.  A nation-wide unified and open ma rket system had been developed.  An improved 
macroeconomic regulatory system used indirect mean s and market forces to play a central role in 
economic management and the allocation of res ources.  A new tax and financial system was 
functioning effectively.  Financial policy had b een separated from commercial operations of the 
central bank, which now focussed on financial regulati on and supervision.   The exchange rate of the 
Chinese currency Renminbi had been unified and re mained stable.  The Renminbi had been made 
convertible on current account.  Furt her liberalization of pricing policy had resulted in the majority of 
consumer and producer produc ts being subject to market prices.  The market now played a much more 
significant role in boosting supply and meeting demand.   
6. He further noted that as a result, in 1999, the Gross Domestic Product (GDP) of China totaled 
RMB 8.2054 trillion yuan (approximately US$990 billi on).  In 1998, the net per capita income for 
rural residents was RMB 2,160 yuan (approximately US$260), and the per capita dispensable income 
for urban dwellers was RMB 5,425 yuan (approximately  US$655).  In recent years, foreign trade had 
grown substantially.  In 1999, total imports and exports of goods reached US$360.65 billion, of which 
exports stood at US$ 194.93 billion, and impor ts, $165.72 billion. Exports from China in 1998 
accounted for 3.4% of the world's total.   WT/ACC/SPEC/CHN/1 
Page 4  
 
7. The representative of China noted that the Gove rnment of China had always considered that 
rejoining the multilateral trading system would offer great benefits, placing China's trade and 
economic relations on a stable a nd predictable footing, subject to multilaterally agreed rules and 
disciplines, as well as improving market access for China and its trading partners.  It had always been the policy of China's Government that reform and market-opening should proceed simultaneously 
with the development of the legal system.  High pr iority had been given to economic legislation to 
guide and safeguard the development of the socialist market economy.  
 8. The representative of China stated that a lthough China's was clearly a special case, China 
expected to avail itself of the derogations and speci al provisions made availa ble to developing country 
members of the WTO.  In response, some members of the Working Party indi cated that because of the 
significant size, rapid growth and transitional na ture of the Chinese econo my, China should not 
automatically receive all the benefits accorded to original developing country Members of the WTO.  
In particular, some members of the Working Party considered that certain transitional arrangements 
available to developing country WTO Members should not be granted to China.  Some members of 
the Working Party considered that  notwithstanding the fact that many of the features of China's 
economy were at present those of a developing country economy, China should, as a minimum, undertake to bring certain measures into conformity on a more expedited basis than would otherwise 
be required of an original developing country Member of the WTO.  
 
9. Many members of the Working Party expressed th eir interest in carrying out bilateral market 
access negotiations with China with respect to industrial and agricultu ral products, and initial 
commitments in services.  The representative of China stated that China was ke en to undertake such 
negotiations with interested Working Party members.   
 
10. Some members of the Working Party stated that in addition to undertaking market access 
negotiations in goods and services, close attenti on should also be paid to China's multilateral 
commitments, in particular China's future obliga tions under the Multilateral Ag reements in Trade in 
Goods and the General Agreement on Trade in Serv ices (GATS).  This was of vital importance to 
ensure that China was able to take full benefit of  the WTO Membership as quickly as possible, as well 
as to ensure that the value of an y market access conditions undertaken was not adversely affected by 
inconsistent measures such as some types of non-tariff measures.   
11. Some members of the Working Party expr essed concern over discrepancies in statistical 
information supplied by the government of Chin a on trade volume/value.  Members and China  WT/ACC/SPEC/CHN/1 
 Page 5 
 
 
pursued this issue separat ely in an Informal Group of Experts on Export Statistics.  The Group of 
Experts submitted its report to the Chairman of the Working Party on 30 June 1994 (document …). 
 
12. The Working Party reviewed the foreign tr ade regime of China.  The discussions and 
commitments resulting therefrom are contained in pa ragraphs … below and in the draft Protocol of 
Accession.  
 II. ECONOMIC POLICIES 
 Non-discrimination  
 
13. Some members expressed concern regarding the application of the principle of non-
discrimination in relation to foreign individuals a nd enterprises (whether wholly or partly foreign 
funded).  Those members stated that China shoul d enter a commitment to accord non-discriminatory 
treatment to all foreign individuals and enterpri ses and foreign-funded enterprises in respect of the 
procurement of inputs and goods and services neces sary for production of goods and the conditions 
under which their goods were produced, marketed or so ld, in the domestic market and for export.  In 
addition, China should also enter a commitment to guarantee non-discriminatory treatment in respect 
of the prices and availability of goods and servi ces supplied by national and sub-national authorities 
and public or state enterprises, in areas including transportation, energy, basic telecommunications, 
other utilities and factors of production.   14. Some members of the Working Party also  raised concerns over China's practice of 
conditioning or imposing restri ctions upon participation in the Chinese economy based upon the 
nationality of the entity concerned.  Those members in  particular raised concerns over such practices 
in relation to the pricing and pr ocurement of goods and services, a nd the distribution of import and 
export licences.  Members of the Working Party requ ested that China enter into a commitment not to 
condition such practices on the nationa lity of the entity concerned.   
 
15. In response, the representative of China emphasi zed the importance of the commitments that 
the government was undertaking on non-discrimina tion. The representative of China noted, however, 
that any commitment to provide non-discriminator y treatment to Chinese enterprises and foreign 
enterprises and individuals in China would be subject  to other provisions of the Protocol and, in 
particular, would not prejudice China's rights und er the General Agreement on Trade in Services 
(GATS), China's GATS schedule or commitments und ertaken in relation to trade-related investment 
measures.  The Working Party took note of this statement . WT/ACC/SPEC/CHN/1 
Page 6  
 
 
16.  The representative of China further confirmed t hat China would provide the same treatment 
to Chinese enterprises and foreign en terprises and individuals in China.  China would eliminate dual 
pricing practices as well as differences in treatment a ccorded to goods which are produced for sale in 
China and those produced for export.  The Worki ng Party  took note of these commitments.   
 
[The preceding 2 paragraphs were developed from the following paragraph of the Outline of the 
Draft Report of the Working Party  on China: 
 
xx. China emphasized the importance of the commitments that the government was 
undertaking on non-discrimination.  China confirmed that it would be providing the same 
treatment to Chinese enterprises and foreign ente rprises and individuals in China in respect of 
the requirements of this section of the Protocol.  This would involve elimination of dual pricing 
practices as well as differences in treatment a ccorded to goods which are produced for sale in 
China and those produced for export.  China noted, however, that these requirements are 
subject to other provisions of the Protocol and, in particular, do not prejudice China's rights 
under the General Agreement on Trade in Services (GATS), China's GATS schedule or commitments undertaken in relation to trade-relat ed investment measures.  The Working Party 
took note of this statement.]  
 
Monetary and Fiscal Policy 
 
[to be completed] 
 
Foreign Exchange and Payments 
 
17. Some members of the Working Party raised c oncerns about China's use of foreign exchange 
controls to regulate the level and composition of trade in goods and services.  In response, the 
representative of China stated that its system of  foreign exchange controls was undergoing rapid 
change.  Significant moves had been taken to refo rm, rationalize and liberalize the foreign exchange 
market.  The practice of multiple exchange rates in swap centres had been abolished.  China was 
moving towards a unified foreign exchange market and had removed many of the restrictions on the 
use of foreign exchange.  Some members of the Working Party stated that China should undertake 
appropriate commitments on its reform  of foreign exchange controls.  
  WT/ACC/SPEC/CHN/1 
 Page 7 
 
 
18. In response, the representative of China stated  that China was a member of the International 
Monetary Fund (IMF). The purpose of China's fore ign exchange reform was to gradually reduce 
administrative intervention and increase the role of market forces.  From 1979, a forex retention 
system was applied in China, although foreign exch ange swap was gradually developed.  In early 
1994, official RMB exchange rates were unified with  the market rates. The banking exchange system 
was adopted and a nation-wide unified inter-bank forex market was estab lished, with conditional 
convertibility of the Renminbi on current account.  Since 1996, foreign investment enterprises (FIEs) 
were also permitted into the banking exchange syst em, and the remaining exchange restrictions on 
current account were eliminated. On 1 December 1996, China had formally accepted the obligations 
of Article VIII, Sections 2, 3, and 4 of the IMF's Articles of Agreement, removing exchange 
restrictions on current account transactions.  Acco rdingly, since then the Renminbi had been fully 
convertible on current account. 
 19. The State Administration of Foreign Exchange  (SAFE) was affiliated with the People's Bank 
of China (PBC), and was the administrative organ empowered to regulate foreign exchange.  Its main 
functions were to monitor and advise on balance- of-payments, foreign exchange matters.  SAFE was 
also required to draft appropriate regulations and m onitor compliance.  He further noted that domestic 
and foreign banks and financial in stitutions could engage in fore ign exchange business, with the 
approval of the PBC.  
 
20. In response to requests from members of the Wo rking Party for further information he further 
added that for foreign exchange  payments under current account, domestic entities (including FIEs) 
could purchase forex at market exchange rates from designated banks or debit their forex accounts 
directly upon presentation of valid  documents.  For payments such as pre-payment, commission and 
etc., exceeding the proportion or limit, the entities could also purchase forex from the banks upon 
meeting the bona fide test administered by SAFE. Foreign exchange for personal use by individuals 
could be purchased directly from the banks upon pr esentation of valid documents (within a specified 
limit).  For amounts exceeding the limit, individuals able to prove their need for additional forex 
could purchase it from the banks.  He also noted that current account forex receipts owned by 
domestic firms should be re patriated promptly into China and be sold to the designated banks at the 
market rates (unless the firm was permitted to hol d a domestic forex account).  A clearance system for 
forex payment (imports) and forex receipt (exports) had also been adopted.   
21. Concerning the exchange rate regime in par ticular, the representative of China noted that 
since the unification of exchange rates on 1 Janua ry 1994, China had adopted a single and managed 
floating exchange rate regime based on supply an d demand.  PBC published the reference rates of WT/ACC/SPEC/CHN/1 
Page 8  
 
RMB against the US dollar, the HK dollar and Japan ese yen based on the weighted average prices of 
foreign exchange transactions during the previous da y's trading. The buying and selling rates of RMB 
against the US dollar on the inter-bank forex market c ould fluctuate within 0.3% of the reference rate. 
For the HK dollar and Japanese yen, the permitted ra nge was 1%.   Designated foreign exchange 
banks could deal with their clients at an agreed ra te.  Under such contracts the exchange rate of the 
US dollar was required to be within 0.15% of th e reference rate, whereas for the HK dollar and 
Japanese yen, the permitted range was 1%.  Permitted rates for other foreign currencies were based on 
the rates of RMB against the US dollar and cros s-exchange rates of other foreign currency on 
international market. The buying and selling ra te could not exceed 0.5% of the middle rate. 
 22. The representative of China further noted that  since 1 January 1994, designated forex banks 
had become major participants in foreign exch ange transactions.  On 1 April 1994, a Foreign 
Exchange Trading System was set up in Shanghai and branches were ope ned in several cities.  That 
Foreign Exchange Trading System had adopted a system of membership , respective quotation, 
concentrated trading and forex market settlement .  Designated forex banks  dealt on the inter-bank 
market according to the working position limit on banking exchange stipulat ed by SAFE and covered 
the position on the market. Depending on its macro economic objectives, the PBC could intervene in 
the forex open market in order to regulate market supply and demand and maintain the stability of the 
RMB exchange rate.  
 
23. The representative of China noted that since 1 December 1998, forex dealing of the FIEs was 
carried out through the banking exchange system. He further noted that to encourage foreign direct investment, China had granted national treatment to foreign investment enterprises in exchange 
administration.  Accordingly, FIEs were allowed to open and hold forex settlement accounts to retain 
receipts under the current account, up to a maximum amount stipulated by SAFE.  Receipts in excess 
of the maximum amount were required to be sold to  designated forex banks.  No restrictions were 
maintained on the payment and transfer of current  transactions by FIEs, and FIEs could purchase 
forex from designated forex banks or debit th eir forex accounts for any payment under current 
transactions, upon the presentation of valid documents to the designated forex banks or SAFE for the 
bona fide test.  FIEs could also open forex accounts to hold foreign-invested capital, and they could 
sell from them upon the approval of SAFE.  FIEs c ould also borrow forex directly from domestic and 
overseas banks, but were required to register the lo an and repayments with SAFE afterwards.  FIEs 
could remit foreign exchange directly from their forex accounts after liquidation according to law.   
  WT/ACC/SPEC/CHN/1 
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Balance-of-Payments Measures 
 24. Some members of the Working Party expr essed concern that China should not make 
indiscriminate use of balance-of-payments measur es pursuant to Article XII or XVIII:B of the GATT 
1994 as justification for the imposition of quantitative restrictions or other, price-based measures on 
imports.  Those members stated that the provisions  of Article XII or XVIII:B of the GATT 1994 and 
the Understanding on the Balance-of-Payments Pr ovisions of the GATT 1994 should be strictly 
respected by China.  Those member s also stated that measures taken for balance-of-payments reasons 
should have the least trade disruptive effect possible and should be limited to temporary import surcharges, import deposit requirements or other eq uivalent price-based trade measures, and those 
measures should not be used to provide import protect ion for specific sectors, industries or products.   
 
25. Those members further stated that any su ch measures should be notified pursuant to the 
Understanding on the Balance-of-Payments Provisi ons of the GATT 1994 to the General Council not 
later than the imposition of the measures, together with a time schedule for their elimination and a 
programme of external and domestic policy measur es to be used to restore balance-of-payments 
equilibrium.  Those members also stated that fo llowing deposit of such a notification, the Committee 
on Balance-of-Payments should meet to examine the notif ication.  It was noted that paragraph 4 of the 
Understanding on the Balance-of-Payments Provisi ons of the GATT 1994 would be available to 
China in the case of "essential products".   
 26. In response, the representative of China stated that China considered that it should have the 
right to make full use of Article XVIII:B to protect , as necessary, its balance-of-payments situation.  
Some members of the Working Party considered that China should undertake specific commitments 
in connection with the invocation of Article XVIII:B.   Those members also stated that the Committee 
on Balance-of-Payments should review the operation of any balance-of-payments measures taken by 
China on an annual basis, if so requ ested by China or a WTO Member.   
 Investment Regime 
 
[to be completed] 
 
State Ownership and Privatization  
 [to be completed] 
 WT/ACC/SPEC/CHN/1 
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Pricing policies  
 
27. Some members of the Working Party noted that China had made extensive use of price 
controls, for example in the agricultural sector .  Those members request ed that China undertake 
specific commitments concerning its system of state pr icing.  In particular, those members stated that 
China should allow prices for traded goods and servi ces in every sector to be determined by market 
forces, and multi-tier pricing practices for such goods and services should be eliminated.  Members 
noted, however, that the goods and services listed in A nnex 4 to China's Protocol were expected to 
remain subject to price controls, consistent with the WTO Agreement, in particular Article III of the 
GATT 1994 and Annex 2, paragraphs  3 and 4 of the Agreement on Agriculture.  Those members 
noted that except in exceptional circumstances, and subject to notification to the WTO Secretariat, 
price controls should  not be exte nded to goods or services beyond t hose listed in Annex 4, and China 
should make its best efforts to reduce and eliminat e those controls.  They also asked that China 
publish in the appropriate official journal the list of goods and services subject to state pricing and 
changes thereto.  
 
28. China confirmed that it would publish in the official journal the list of goods and 
services subject to state pricing and changes thereto, together with [cost and] price-setting 
mechanisms and policies.  The Working Party took note of these commitments.  
 29. The representative of China noted that Chin a currently applied a mechanism of market-based 
pricing under macro-economic adjustment.  He noted that national treatment wa s applied in the areas 
of government pricing for all imported goods.  There were presently three types of prices: government 
price, government guidance price and market-regulated price.  The Government price was set by price 
administration authorities and could not be chan ged without the approval by these authorities. 
Products and services subject to Government pricing were those having a direct bearing on the national economy and the basic needs of the people's livelihood, including those products that were scarce in China.   
 
30. He further added that the Government guidan ce price mechanism was a more flexible form of 
pricing.  The price administration authorities stipul ated either a basic price or floating ranges.  
Enterprises could, within the limits of the guidance and taking into account the market situation, make 
their own decisions on prices.  With market-regulat ed prices, enterprises were free to fix prices in 
accordance with supply and demand to the extent pe rmitted by generally applic able laws, regulations 
and policies concerning prices.     WT/ACC/SPEC/CHN/1 
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31. In formulating Government prices and Gove rnment guidance prices, the following criteria 
were taken into account: normal production costs, supply and demand situati on, relevant government 
policies and prices of related products. When fi xing prices of consumer goods, consideration was 
given to the limit of consumers' purchasing power.  He noted that due to continued reform of China's 
price system, the share of Government prices had dr opped substantially and that of market-regulated 
prices had increased;  of social retailing products, th e share of Government prices was about 4%, that 
of Government guidance prices 1.2%, and that of market-regulated prices 94 .7%.  For agricultural 
products, the share of Government prices was 9.1% , Government guidance prices 7.1%, and market-
regulated 83.3%.  For production inputs, the share of government prices was 9.6%, that of government guidance prices 4.4%, and market-regulated prices 86%.  The share of directly government-controlled prices had been much reduced such  that it was even smaller than that in major 
Western market economies.  The Chinese Government  considered that China's price system was 
becoming increasingly rationalized, creating a rela tively fair marketplace for all enterprises to 
compete on an equal footing.  
32. The representative of China recalled that Annex 4 of the Draft Protocol of Accession contains 
a comprehensive listing of all products and services presently subject to Government guidance pricing 
and Government pricing.  
33. China confirmed that price controls sha ll not be used for purposes of affording 
protection to domestic industries or services provi ders.  The Working Party took note of this 
commitment. 
 
Competition Policy  
 [to be completed] 
 
III. FRAMEWORK FOR MAKING AND ENFORCING POLICIES  
Powers of Executive, Legislative and Judicial Branches of Government 
 
34. The representative of China informed members of the Working Party that in accordance with 
the Constitution of the PRC, the Standing Committe e of the National People's Congress had the power 
to annul those regulations and administrative decree s issued by both central and local government that 
contravened the Constitution and laws. The State Co uncil had the power to annul those inappropriate 
regulations and administrative decrees issued by both central and local government. The Chinese WT/ACC/SPEC/CHN/1 
Page 12  
 
Government considered that these features of the Chinese legal system would ensure an effective and 
uniform implementation of the obligations resulti ng from China's accession to the WTO Agreement. 
 
35. Members of the Working Party stated that it sh ould be made clear that China would apply the 
requirements of the WTO Agreement and any additiona l obligations created by China's Protocol of 
Accession to its entire customs territory, including border trade regions, minority autonomous areas, 
Special Economic Zones, open coastal cities, econom ic and technical development zones and other 
special economic areas.   36. Members of the Working Party also stated that China should ensure that the provisions of the WTO Agreement and any additional obligations cr eated by China's Protocol of Accession were 
applied uniformly throughout its entire customs te rritory, including at the sub-national level.  
Members of the Working Party also noted that China should administer in a uniform, impartial and reasonable manner all its laws, regulations and othe r measures pertaining to or affecting trade in 
goods, services or TRIPS or the control of foreign exchange. In this connection, members of the 
Working Party requested that Ch ina establish a mechanism under whic h individuals and enterprises 
could bring to the attention of the national author ities cases of non-uniform application of the trade 
regime.  Members of the Working Party also noted that China's laws, regulations and other measures 
of government entities at the sub-national level w ould be required to conform to the obligations 
undertaken in China's Protocol of Accession and the WTO Agreement.    
 
Judicial Review 
 
37. Some members of the Working Party stated that China should designate independent 
tribunals, contact points, and procedures for the prom pt review of all administrative actions relating to 
the implementation of laws, regula tions, judicial decisions and administrative rulings of general 
application referred to in Article X:1 of the GA TT 1994, including administrative actions relating to 
import or export licences, non-tariff measures and an y other measures within the scope of the WTO 
Agreement.  Those members stated that notwithstanding Article X:3(c) of the GATT 1994, the 
tribunals should be independent of the agenci es entrusted with administrative enforcement of 
provisions contained in the WTO Agreement. 
 
38. Those members also stated that the administ rative actions subject to review should include 
measures relating to the availability and distributio n of import and export licenses, permits or quotas;  
application of measures for safeguard or balance-of-payments purposes or to protect against unfair 
trade;  and any other measures within the scope of the WTO Agreement, in particular any reviews  WT/ACC/SPEC/CHN/1 
 Page 13 
 
 
required to be made available under the relevant provisions of the TRIPS Agreement and the GATS.  
Such review procedures should include the opportunity  for appeal, without penalty, by individuals or 
enterprises affected by any administrative action subject to review.  If an initial right of appeal was to 
an administrative body, there should be an opportunity for a further appeal to a judicial body.  Any decision by any appellate body and the reasons th erefore would be communicated in writing to the 
appellant, together with notificati on of any right to further appeal. 
 
39. Some members of the Working Party expressed  concern about the functioning of China's  
institutions and procedures for the prompt review of  disputes over trade-related matters in China.  
Those members requested that the existing syst em be improved to provide speedier and more 
predictable access to those institutions and procedur es.  Members of the Working Party also requested 
that the types of measures subject to independent j udicial or administrative review should be extended 
from those currently covered by Chinese domestic pr ocedures.  In particular they requested that 
measures related to services trade and intellectual property and services be subject to such review 
processes.   
 
40. China confirmed that it would revise its patent and trademark laws so that, upon 
accession, all of its laws and regulations will be  consistent with protocol requirements on 
procedures for judicial review of administrative actions.  The Working Party took note of this 
commitment.  
 
41. China confirmed that measures subject to review would include measures affecting in any 
way the regulation, control, supply or promo tion of transportation and transportation-related 
services, insurance and insurance-related ser vices, banking and other financial services, 
telecommunications services, distribution services, entertainment services, information processing 
services, construction and maintenance services, pr ofessional services, and retail sales services.  
China undertook to ensure that all such measures would be subject to review.  The Working Party 
took note of that commitment.   
 
[The preceding paragraph was developed from th e following paragraph of the Outline of the 
Draft Report of the Working Party:  xx. China confirmed that measures subject to review would include measures affecting in 
any way the regulation, control, supply or prom otion of transportation and transportation-
related services, insurance and insurance-related services, banking and other financial services, 
telecommunications services, distribution servi ces, entertainment services, information WT/ACC/SPEC/CHN/1 
Page 14  
 
processing services, construction and maintena nce services, professional services, and retail 
sales services.  China undertook to ensure that a ll such measures would be subject to review.] 
 
Authority of Sub-Central Governments 
 
42. In response to questions, the representative of  China recalled that the central government had 
exclusive constitutional power to overturn all m easures taken at sub-national level that were 
inconsistent with China's international obligations.  
 
43. Several members of the Working Party rai sed concerns about the continued presence of 
multiple and overlapping trade instruments used by different levels of government within China.  
Those members considered that situation resulted in  a lessening of the security  and predictability of 
access to the Chinese market.  In addition, some members expressed concerns about the limited 
control exercised by the central government over trad e measures introduced at the sub-national level. 
 44. The representative of China indicated that China intended to apply the WTO Agreement to 
the fullest extent not inconsistent with mandatory legislation in existence on the date of entry into 
force of the Protocol.  Members raised concerns as to what China might consider to be existing 
"mandatory legislation".  China was requested to s ubmit an illustrative list of such legislation.  Some 
members of the Working Party stated that give n the constitutional power of China's central 
government to ensure compliance w ith China's WTO obligations by both its national and sub-national 
authorities, and to override inconsistent measures at the sub-national level, very few, if any, Chinese 
laws could meet the criteria of existing mandatory le gislation.  Some members of the  Working Party 
noted that the GATT 1994, unlike the GATT 1947, did not permit the possibility of exempting existing mandatory legislation.    
45. Some members raised concerns about the precise nature and scope of China's customs 
territory and how China's customs territory inter-rela ted with the separate cu stoms territories of Hong 
Kong, China, Macau, China and the separate Cu stoms Territory of Taiwan, Penghu, Kinmen and 
Matsu ("Chinese Taipei").  Members of the Working Party and China agreed that China would, as a 
WTO Member, in accordance with GATT Article XXIV:1, maintain standard WTO relations with 
those other separate customs territories.  46. Some members of the Working Party raised  concerns in relation to the uniformity of 
administration of the foreign trade and economic regi me within China.  In particular, those members 
raised concerns about measures ta ken by sub-national authorities.  In response, the representative of  WT/ACC/SPEC/CHN/1 
 Page 15 
 
 
China emphasized that the central government had full constitutional authority to ensure compliance 
with WTO obligations by both national and sub-nati onal governmental authorities in China.  Some 
members requested that an appropriate commitmen t be undertaken in this regard by China.  
 47. Some members of the Working Party raised concerns about the limited ability of China's 
central government to be sufficiently informed about non-uniform practices and to take necessary 
enforcement actions.  Those memb ers stated that China should establish a mechanism by which any 
concerned person could bring to the attention of the central government cases of non-uniform 
application of the trade regime. 
 
IV. POLICIES AFFECTING TRADE IN GOODS 
 
Trading Rights  
48. Some members noted that few enterprises with in China had full freedom to engage in foreign 
trade, i.e., the right to import and export goods w ithout restriction.  Those members noted that in 
many cases, enterprises wishing to import or export goods had to conduct such trade through a state-
trading enterprise.  Those members stated that China should progressively liberalize the right to trade, 
so that, within three years of accession to the WTO all enterprises in China would have the right to 
import and export as well as to trade in all goods th roughout the customs territory of China.  Such a 
commitment would be without prejudice to China's ri ght to regulate trade in a manner consistent with 
the WTO Agreement and would not include those g oods listed in Annex 2(a) 1 and 2(a)2 of China's 
Protocol of Accession, which would continue to be subject to state-trading in accordance with that Protocol.   
 
49. Those members also stated that enterprises enjo ying the right to trade should also be accorded 
national treatment under Article III of GATT 1994, especi ally paragraph 4 thereof, in respect of  
internal sale, offering for sale, purchase, transporta tion, distribution or use, including their direct 
access to end-users. Those members also stated that  all foreign individuals and enterprises, including 
those not invested or registered in China, shoul d be accorded treatment no less favourable than that 
accorded to enterprises in Ch ina with respect to the right to trad e.  In respect of goods that would 
remain subject to designated trading listed in A nnex 2b of China's Protocol of Accession, China 
should phase out limitations on the grant of trading ri ghts pursuant to the schedule in that Annex.  
They also stated that China should complete all necessary legislative procedures to implement these 
provisions during a transition period. 
 WT/ACC/SPEC/CHN/1 
Page 16  
 
50. Some members of the Working Party expressed concern that China's restrictions on the right 
of enterprises to engage in trade operated as signi ficant limitations on secure and predictable access to 
the Chinese market.  Members sought progressive elim ination of all such restrictions and objective 
and generally applicable criteria for the granting of  trading rights pending the elimination of all such 
restrictions.  China noted that it was in the pro cess of liberalizing trading rights but that certain 
products would remain the exclusive domain of d esignated foreign trade corporations.  China also 
noted that criteria for the granting of trading rights were set out in China's Foreign Trade Law.  Some  
members of the Working Party considered that Ch ina should enter a specific commitment in relation 
to trading rights.    
A. IMPORT REGULATION  
Ordinary customs duties 
 
51. Members of the Working Party noted the substa ntial unilateral tariff reductions made in many 
sectors by China in recent years.  They also acknowledged the increased breadth of bindings and 
reduction in average tariff levels.  Some member s expressed concern over continued high levels and 
the lack of proposed tariff bindings in some sectors.  
 
52. The representative of China provided member s of the Working Party with a copy of the 
Customs Tariff and related laws a nd regulations.  He noted that the Customs Tariff of China was a 
charge imposed on imported goods. The purpose of levy ing tariff was twofold:  (a) to regulate imports 
so as to promote and support domestic production, a nd (b) to serve as an important source of revenue 
for the treasury of the Central Government.  China' s tariff policy was to promote economic reform and 
opening of the economy.  The basic principles fo r establishing duty rates were as follows.  Duty-free 
or low duty rates were applied to imported goods  which were needed for the national economy and 
the people's livelihood but which were not produced sufficiently domestically.  Import duty rates on raw materials were generally lower than those on semi-manufactured or manufactured products.  For 
parts or components of machinery, equipment and instruments which were not produced domestically, 
or at a sufficiently high standard, the import duty was lower than the duty on complete products.  Higher duty rates were applied to products which were produced  domestically or which were 
considered non-essential for the national economy a nd the people's livelihood.   A higher duty was 
applied to imported products, the equivalent of which were produ ced domestically and the local 
manufacturer of which needed protection.   
  WT/ACC/SPEC/CHN/1 
 Page 17 
 
 
53. The representative of China noted that China had adopted the Harmonized Commodity 
Description and Coding System (HS) as from 1 Janua ry 1992 and joined the International Convention 
on the Harmonized Commodity Description and Coding System in the same year.  There were 21 
sections, 97 chapters and 7066 tariff headings in the Customs Import and Export Tariff of the PRC.  
Tariff rates were fixed by the State Council. Partia l adjustment to the duty rates was subject to 
deliberation and final decision by the State Tariff  Commission.  The current simple average of  
China's import duties was 14.44%. Among the 7066 ta riff headings, tariff rates for 709 headings were 
below 5%, those for 2015 were 5%-9%, those for 1356 were 10%-15% and those for 2896 were above 
15%.  Information on tariff rates for specific products  and import statistical data for recent years was 
provided to the Working Party.    
54. He also noted that there were two columns of  import duty rates: general rates and preferential 
rates. The preferential rates applie d to imports originating in countr ies and regions with which China 
had concluded reciprocal tariff agreements, whereas the general rates applied to imports from other 
sources. 
 
55. China undertook bilateral market access negotia tions on goods with members of the Working 
Party.  The results of those negotiations are contained in the Schedule of Concessions and 
Commitments on Goods and forms Annex 10 to China' s Draft Protocol of Accession to the WTO.  
 Other duties and charges levied on impo rts but not on domestic production 
 
56. Some members of the Working Party stated th at China should ensure that all other duties and 
charges applied to imported products were applied in conformity with the requirements of the WTO 
Agreement, in particular Article VIII of the GATT 1994.   
 
Rules of Origin 
 57. The representative of China noted that when an imported product was processed and 
manufactured in several countries, the country of orig in of the product was determined to be the last 
country in which the product underwent substantia l transformation. Substantial transformation was 
understood to mean processing which results in a cha nge of the four-digit level tariff classification or 
an added value (including all cost -related expenditures) exceeding 30% of the total value. These rules 
of origin were applicable to a ll imported products. The rules of orig in applied for statistical purposes 
were the same.  However, for statistical purposes, the Customs also records countries of consumption 
and trading countries. WT/ACC/SPEC/CHN/1 
Page 18  
 
 
Fees and charges for services rendered  
58. Some members of the Working Party expressed concern over an apparent lack of uniformity 
of customs fees and charges administered by national and sub-national authorities.  Members of the Working Party noted that as a condition of accession to the WTO China should undertake a 
commitment to ensure conformity of such fe es and charges with Articles II and VIII of the 
GATT 1994.  
Application of internal taxes to imports 
 59. Some members of the Working Party expressed concern that some internal taxes applied to 
imports, including a Value-added Tax (VAT) were  not administered in conformity with the 
requirements of the GATT 1994, particularly Article III.  Those members of the Working Party noted 
that China appeared to permit the application of di scriminatory internal taxes and charges to imported 
goods and services, including taxes and charges applie d by sub-national authorities.  Those members 
requested that China undertake a commitment to ensure  that all such internal taxes and charges would 
be in conformity with the requirements of the GATT 1994.    
60. In response, the representative of China noted  that there were three major types of taxes 
levied on products and services:  (a.) VAT levi ed on goods and services for processing, maintenance 
and assembling;  (b.) the Consumption Tax on some selected consumer products;  (c.) the Business 
Tax on providing services, transferring intangible assets and selling real estate.   Both the VAT and the Consumption Tax were applicable to entiti es importing goods. VAT and the Consumption Tax on 
imported goods were collected by the Customs at the point of entry.  He noted that VAT was  
reimbursed once goods were exported.   Exported goods were exempt ed from the Consumption Tax. 
 
61. He further noted that the State Council determ ined all policies concerning the levying of VAT 
and the Consumption Tax, adjustment of tax typ es and tax rates (tax value), as well as the tax 
exemption of VAT, the Consumption Tax and the Bu siness Tax.  The laws and regulations were 
interpreted and implemented by the Ministry of Finance and the State Administration of Taxation. VAT and the Consumption Tax were levied and admini stered by the State competent departments of  
taxation, while the Business Tax was collected and administered by the local competent departments 
of taxation.  
  WT/ACC/SPEC/CHN/1 
 Page 19 
 
 
Tariff rate quotas, tariff exemptions 
 
62. Some members of the Working Party expressed  concern over the lack of transparency, 
uniformity and security of China's administration of its tariff rate quota and tariff exemptions regime.  
Those members suggested that China enter a commitment in relation to those matters.  
 
Quantitative import restrictions, including prohibitions and quotas 
 
63. In response to requests for informati on from members of the Working Party, the 
representative of China noted that China prohibited the importation of certain commodities, including 
various types of weapons, ammuniti on and explosives, narcotic drugs,  poisons, obscene materials, and 
foodstuffs, medicines, animals and plants were inconsistent with Chin a's standards on food, 
medicines, animals and plants.  
 
64. Members of the Working Party noted that th ere were a large number of overlapping non-tariff 
measures in existence in China, bo th at the national and sub-national levels, which appeared to have a 
trade restrictive or trade distorting effect.  Those members requested that China undertake a 
commitment to eliminate and not to introduce, re -introduce or apply non-tariff measures other than 
those specifically identified and subject to phased elimination in Annex 3 to China's Protocol of 
Accession.   
65. Some members of the Working Party also ra ised concerns that many non-tariff measures were 
imposed by sub-national authorities in China on a non-transparent, discretionary and discriminatory 
basis.  Those members of the Working Party asked that China undertake a co mmitment to ensure that 
non-tariff measures would only be imposed by the ce ntral government or by sub-national authorities 
with clear authorization from the central governme nt.  Authorities lacking  authorization from the 
national authorities, should not be implemented or enforced.  
66. Some members of the Working Party noted that China had provided a list of non-tariff 
measures in respect of which China was prepared  to commence phased elimination.  That list was 
entered in Annex 3 of China's Protocol of Access ion.  Those members stated that China should 
eliminate the measures listed in acco rdance with the schedule provided in Annex 3, during the periods 
specified in Annex 3.  Those members also noted that the protection afforded by the measures listed 
in Annex 3 shall not be increased or expanded in size, scope, or duration, nor any new measures be 
applied, unless in conformity with the provisions of the WTO Agreement. 
 WT/ACC/SPEC/CHN/1 
Page 20  
 
67. Those members of the Working Party also noted that in implementing the provisions of 
Articles III and XI of the GATT 1994 and the Agre ement on Agriculture, China should eliminate and 
not introduce any new nor re-introduce any old non- tariff measures that coul d not be justified under 
the provisions of the WTO Agreement.  Those me mbers also stated that all non-tariff measures 
administered by China, whether or not referred to  in Annex 3 of the Protocol of Accession, which 
were applied after China's accession to the WTO, s hould be allocated and otherwise administered in 
strict conformity with the provisions of the WTO Agreement, including Article XIII of the 
GATT 1994 and the Agreement on Import Licensing Pro cedures, including notification requirements.  
 
Import licensing 
 68. In response to requests for information, the re presentative of China stated that the list of all 
entities responsible for the authorization or approva l of imports would be u pdated and republished in 
the official journal within 30 days of any change thereto.   
 
69. Concerns were expressed by some members of  the Working Party in relation to the use of 
import licensing as restrictive non-tariff measures. .  Some members of the Wo rking Party asked that 
China undertake a commitment to comply with  the requirements of the Agreement on Import 
Licensing Procedures.  In response, the representati ve of China stated that the number of products 
subject to restrictive licensing was being reduced a nd that China would comply with the requirements 
of the Agreement on Import Licensing Procedures  70. Some members of the Working Party stated  that in implementing the WTO Agreement and 
provisions of the Agreement on Import Licensing Procedures, China should undertake the following 
measures to facilitate compliance with those agreem ents.  They stated that China should notify the 
following on a regular basis in the official journal re ferred to in paragraph 2( C)2 of its Protocol of 
Accession:   
(a) a listing by product, of all organizations, including those organizations delegated such 
authority by the national authorities, that were responsible for authorizing or 
approving imports or exports, whether thr ough grant of license or other approval;   
 
(b) a description of all procedures and criteria for obtaining such import or export 
licenses or other approvals, and the conditi ons for deciding whether they should be 
granted; 
  WT/ACC/SPEC/CHN/1 
 Page 21 
 
 
(c) a list of all products, by HS system tari ff number, that were subject to tendering 
requirements, including information on pr oducts subject to such tendering 
requirements and any changes, pursuant to the Agreement on Import Licensing 
Procedures; 
 
(d) a list of all goods and technologies who se import or export was restricted or 
prohibited;  this  list should be notified to the Committee on Import Licensing;  and  
 
(e) any changes to the list of goods and technologies whose import and export were 
restricted or prohibited; 
 
Those members also stated that within 75 days of each publication, copies of those notifications 
should also be notified to the WTO Secretariat in a WTO official language for circulation to WTO Members and for submission to the Committee on Import Licensing.  
71. Those members of the Working Party also stated that China should notify the WTO 
Secretariat of all licensing and quota requirements remain ing in effect after the date of entry into force 
of this Protocol, listed separately by HS tariff line,  with the quantities covered by the restriction, the 
justification for maintaining the restriction or its sch eduled date of termination.  Those members also 
requested that China submit the notification of its  import licensing procedures to the Committee on 
Import Licensing, as required by Article 5 of the Agreement on Import Licensing Procedures.  Moreover, those members of the Working Party stated that China should report annually to the Committee on Import Licensing, on its automatic import licensing procedures noting the reasons for the import licensing requirement and justifying the n eed for their continuation.  That notification 
would also contain the information listed in Article 3 of the Agreement on Import Licensing 
Procedures.  In addition, those members stated that  China should ensure that import licences remained 
valid for at least six months, except in exceptiona l circumstances.  In such cases, China should 
promptly notify the Committee on Import Licensing of the exceptional circumstances requiring the 
shorter period of licence validity.  Those members also  stated that foreign individuals and enterprises 
and foreign-funded enterprises should be accorded tr eatment no less favourable than that accorded to 
other individuals and enterprises in respect of  the distribution of import licences and quotas. 
 
72. In response, the representative of China pr ovided additional information on the system of 
import licensing operating in China. He noted that  the import licensing system was administered 
without discrimination among countries or regions. In 1984, the State Council had promulgated the 
"Interim Regulations on Licensing System for Import Commodities", and MOFTEC and the General WT/ACC/SPEC/CHN/1 
Page 22  
 
Customs Administration had issued "Detailed Rules for the Implementation of the Interim 
Regulations on Licensing System for Import Commod ities". The Interim Regulations were uniformly 
implemented throughout China. The import licensing system ensured that limited foreign exchange 
resources were used for imports most needed by  national economic development and that necessary 
assistance could be provided to the domestic indus tries. In 1999, of the total import value of 
US$ 165.7 billion, imports subject to licensing repr esented 8.45%, covering US$ 14 billion.  He noted 
that MOFTEC determined which products should be subject to import licensing according to the 
relevant provisions of the "Foreign Trade Law".   
 
73. He stated that in 1993, China had applied im port restrictions to 53 product categories.  By 
1999, the number had been reduced to 35.  Products  covered were (1) Processed oil;  (2) Wool;  
(3) Polyester fibre;  (4) Acrylic fibres;  (5) Polyest er fillet;  (6) Natural rubber;  (7) Vehicles tyres;  
(8) Sodium cyanide;  (9) Sugar;  (10) Fertilizer;  (11) Tobacco and its products;  (12) Acetate tow;  
(13) Cotton;  (14) Motor vehicles and their key parts;  (15) Motorcycles and their engines and chassises; (16) Colour television sets and TV kinesc ope;  (17) Radios, tape recorders and their main 
parts;  (18) Refrigerators and their compressor;  (19) Washing machines;  (20) Recording equipment 
and its key parts;  (21) Cameras and their bodi es (without lenses);  (22) Watches;  (23) Air 
conditioners and their compressor;  (24) Audio a nd video tape duplication equipment;  (25) Crane 
lorries and their chassises;  (26) Electronic mi croscopes;  (27) Open-end spinning machines;  
(28) Electronic colour scanners;  (29) Grain;  (30)  Vegetable oil;  (31) Wine;  (32) Colour sensitive 
material;  (33) Chemical under s upervision and control that were  used for chemical weapon;  
(34) Chemicals used to produce narcotics;  and (35) Laser disc production facilities.  He also noted that in 1999, there were 13 commodity categor ies which were imported by the foreign trade 
companies designated by MOFTEC. These categori es were as follows:  (1) Processed oil  
(2) Fertilizer (3) Tobacco (4) Vegetable oil (5) Grai n (6) Natural rubber (7) Wool (8) Acrylic fibers 
(9) Sugar (10) Cotton (11) Crude oil (12) Steel and (13) Plywood. 
 
74. Concerning the grant and administration of import licences, the representative of China noted 
that the examination and approval of the licence t ook two to three working days. Applications for 
import licences could be submitted to the Quota and License Administrative Bureau of MOFTEC, or Special Commissioner Offices in 16 provinces, or Commissions on Foreign Economic Relations and Trade of various provinces, autonomous regions , and municipalities directly under the central 
government and those with indepe ndent budgetary status. Licensing ag encies authorized by MOFTEC 
could issue import licences on the basis of import documents submitted by the applicants,  approved 
by the competent departments. A licence could not be bought, sold or transferred, and was valid for 
one year.  Import licences could be extended once.     WT/ACC/SPEC/CHN/1 
 Page 23 
 
 
Customs Valuation  
 
75. The representative of China recalled that th e overwhelming majority of China's customs 
duties were ad valorem  duties.  The customs or duty-paying value of imported goods was assessed 
according to the C.I.F. price based on the normal transaction value. If the transaction value of imported goods could not be ascertained, the du ty-paying value was determined based on the 
transaction value or the computed value of identical or similar goods.  He also noted that the Customs 
Law provided for appeal procedures. In the event of  a dispute over calculation of duty paid or payable 
with the Customs, the dissatisfied importer could apply to the Customs for a reconsideration of the 
case. If the appeal was rejected the importer could sue at the People's Court.    
76. He further noted that in accordance with in ternational practices and provisions of China’s 
Customs Law, import duty reductions or exemp tions were available for the following goods: 
  (a) A consignment of goods, on which cu stoms duties were estimated below RMB 
10 yuan; 
  (b) advertising articles and samples,  which were of no commercial value; 
 
 (c) goods and materials, which were rendered gratis by international organizations or 
foreign governments; 
 
(d) fuels, stores, beverages and provisions fo r use en route loaded by any means of 
transport, which was in transit across the border; 
 
 (e) exported goods being replaced;   (f) goods damaged prior to Customs release; 
 
 (g) goods covered by international treaties providing for tariff reductions and exemptions 
which China had entered into or acceded to; 
  (h) goods temporarily imported; 
 
 (i) goods imported under the processing program;  WT/ACC/SPEC/CHN/1 
Page 24  
 
 (j) goods imported at zero cost for offset purpose; 
 
 (k) domestic- or foreign-funded projects encouraged by the country; 
  (l) articles for scientific research, education and the disabled.  
He noted that goods so imported were required to be put under the Customs supervision and control. 
The Customs duty was required to be recovered if su ch goods were sold, transferred or used for other 
purposes during the time period of supervision and control.  
 
Other customs formalities 
  [to be completed]  
Preshipment inspection 
  [to be completed]  
Anti-dumping, countervailing duties, safeguard regimes 
 77. The representative of China noted that Ch ina had recently promulgated Anti-dumping and 
Countervailing Regulations.  On saf eguard measures, he noted that at present, China was going 
through the legislative procedure of drafting legi slation regarding safeguard measures in accordance 
with the Article 29 of the Foreign Trade Law and the WTO Agreement on Safeguards.  
 
78. A member of the Working Party noted that China was continuing the process of transition 
towards a full market economy.  That member noted  that under those circumstances, in the case of 
imports of Chinese origin into a WTO Member, special difficulties could exist in determining price 
comparability in the context of anti-dumping inves tigations and countervailing duty investigations.  
That member stated that in such cases, the importi ng WTO Member may find it necessary to take into 
account the possibility that a strict comparison w ith domestic prices in China may not always be 
appropriate.    WT/ACC/SPEC/CHN/1 
 Page 25 
 
 
B. EXPORT REGULATIONS 
 
Customs tariffs, fees and charges for services rend ered, application of internal taxes to exports 
 
79. Some members of the Working Party noted th at certain taxes and charges appeared to be 
applied exclusively to exports.  Those members of the Working Pa rty stated that those taxes and 
charges should be eliminated unless applied in c onformity with GATT Article VIII or listed in 
Annex 6 to China's Protocol of Accession.   80. The representative of China noted that the majority of products were free of export duty, although 36 items, including tungsten ore, ferrosilicon  and some aluminum products were subject to 
export duties. He noted that the duty-paying valu e of exported goods was the F.O.B. price of the 
goods deducting the export tariff.   
Export licensing 
 81. The representative of China noted that China' s export licencing system was administered in 
accordance with the "Interim Procedures for the Export Licencing System". In 1992, there were 
143 categories of products subject to export licencing which accounted for 48.3% of the total value of 
the China's exports, but by 1999, the total number of  products subject to export licencing had been 
reduced to 58 categories and 73 items with an e xport value of US$ 18.5 b illion, taking up only 9.5% 
of total exports. Export licences for these products we re issued according to the stipulated commodity 
scope respectively by the Administrative Bur eau of Quota and License (ABQL), the Special 
Commissioner Offices (SCO) located in 16 provinces and the Commissions of Foreign Economic 
Relations and Trade (COFTEC) of various provin ces, autonomous regions, municipalities directly 
under the central government and those with independe nt budgetary status.  The main criteria used in 
determining whether a products was subject to expo rt licencing were set down in the Foreign Trade 
Law:  (1) to maintain national security or public in terests;  (2) shortage of supply in the domestic 
market or for the effective protection of exhaustib le domestic resources;  (3) limited market capacity 
of importing countries or regions;  or (4) obliga tions stipulated by international treaties.  
 82. He further noted that an application for an  export licence had to be submitted to the licence 
issuing institutions authorized by MOFTEC, togeth er with documents approving the export by the 
competent departments, and other relevant material s (such as the Export Qualification Certificate for 
the enterprises, export contract and so on). The pr ocedures were the same for all export destinations. 
A decision on the request for an export licence normally took three working days. Licences were valid WT/ACC/SPEC/CHN/1 
Page 26  
 
for six months and could be extended once.  FIEs  engaged in exporting products not produced by 
themselves were required to obtain export licences if  the products to be exported were subject to the 
licensing requirement.  If the products were not s ubject to licensing, customs clearance would be 
given after examination by the Customs on the basis of export contracts and ot her relevant documents. 
 83. Some members of the Working Party note d that certain export licensing requirements 
appeared to operate as restrictive non-tariff meas ures.  In response, the representative of China 
indicated that the number of products subject to  export licensing was being reduced and that China 
would abide by its WTO obligations concerning expor t formalities and licensing.  In response to this 
statement, members of the Working Party asked  that China undertake such a commitment.  
 
Export restrictions 
 
84. The representative of China noted that Chin a prohibited export of na rcotic drugs, poisons, 
materials containing State secrets, precious and rare animals and plants. 
 
Export subsidies  
85. Some members of the Working Party noted c oncerns about the extent of China's use of 
prohibited export subsidies.  In response, the repr esentative of China stated that all direct export 
subsidies on industrial and agricultural goods had be en eliminated.  Some members of the Working 
Party stated that China should enter a commitment to  eliminate all export subsidies by a date to be 
agreed.  Those  members of the Working Party stat ed that China should also provide a notification 
pursuant to Article 25 of the WTO Agreement on Subsidies and Countervailing Measures ("SCM 
Agreement") detailing all subsidies within the mean ing of Article 3 of that Agreement.  Those 
members also noted that the existing practice of granting preferential treatment to imported products 
and to joint venture production enterprises in Ch ina's special economic areas conditional upon export 
or re-export of products manufactured or subject to  additional processing in such areas, appeared to 
meet the definition of prohibited subsidies pursuan t to Article 3 of the Agreement on Subsidies and 
Countervailing Measures.  Those members also stated  that China should phase out all subsidies falling 
within the scope of Article 3 of the SCM Agreemen t.  Those members noted that China had provided 
a list of subsidies and a timetable for their elimin ation in Annex 5 of the Protocol of Accession of 
China to the WTO. 
 
  WT/ACC/SPEC/CHN/1 
 Page 27 
 
 
C. INTERNAL POLICIES AFFECTING FOREIGN TRADE IN GOODS 
 
Industrial policy, including subsidies 
 
86. Some members of the Working Party noted th at the situation of differential treatment of 
minority autonomous regions and other areas of economic poverty within China was uncertain and 
could raise problems in relation to the requirements of the Agreement on Subsidies and 
Countervailing Measures.  In response, the representa tive of China stated that the central government 
was required by the Constitution to provide assistan ce to those disadvantaged areas.  Some members 
of the Working Party stated that China should also provide a notification detailing all subsidies within 
the meaning of Article 1 of the SCM Agreement.  
 Sanitary and phytosanitary measur es, technical barriers to trade 
 
87. Some members of the Working Party considered that China should provide a notification of 
all laws and regulations relating to its sanitary and phytosanitary measures, including all products 
covered by such measures.  In addition, some memb ers of the Working Party raised specific concerns 
in relation to the use of quarantine procedures as non- tariff barriers.  In respon se, the representative of 
China stated that China's quarantine procedures we re not used as non-tariff measures.  The Working 
Party took note of China's notification on  SPS in document WT/ACC/CHN/14 and Corr.1. 
 88. In response to requests for informati on from members of the Working Party, the 
representative of China confirmed that internal me chanisms existed in China (e.g. policy guidelines, 
inter-agency committees) to inform and consult w ith, on an ongoing basis, government agencies and 
ministries (at national and sub-national levels), and private sector interests, on the rights and 
obligations under the GATT 1994 and the TBT Agreem ent 1994.  In response to further requests for 
information concerning the opportunity for public  consultation and comment on proposed standards 
and technical regulations, the representative of Chin a noted that China had already established such a 
mechanism.  Currently, China provided a 45 day peri od to allow for comments on proposed standards, 
technical regulations, and conformity assessment pro cedures.  If within that 45 day period a request 
for extension of the time-limit was received from a WTO Member, the period was extended to 60 days.  In addition, provision was also made a furt her extension of the time-limit beyond 60 days if 
requested by another Party to the TBT Agreement.  
 
89. Members of the Working Party noted that a list of products subject to statutory inspection 
upon importation into China, together with the app licable technical regulations and standards, the WT/ACC/SPEC/CHN/1 
Page 28  
 
objectives which they fulfilled and their necessity to  fulfil those objectives was contained in Annex 7 
of China's Protocol of Accession.   
 
90. Some members of the Working Party stated that pursuant to the requirements of the TBT 
Agreement, China's standards, technical regulati ons and conformity assessment procedures should be 
based, to the maximum extent possible, on relevant international standards, where they existed except 
where use of different standards, technical regula tions and conformity assessment procedures could be 
justified to the TBT Committee, pursuant to Article 2.4 of the TBT Agreement, as necessary to fulfil 
legitimate objectives as defined in Article 2.2 of the TBT Agreement.  Those members also stated that 
any such standards, technical regulations a nd conformity assessment procedures should be 
administered so as not to create unnecessary barriers to trade.   
 
91. Those members also stated that Government  inspection agencies should not apply compulsory 
standards to imported products wh ich related solely to fulfilling unspecified criteria of quality, 
quantity or weight, nor require statutory inspection of  products solely because of the volume of such 
imports.  Those members stated that China shoul d publish complete commodity inspection criteria, 
whether formal or informal, in its official journa l.  In this connection those members noted that 
pursuant to Article 15.2 of the TBT Agreement, China should provide a notification Statement on 
Implementation and Administration of the Agreement consistent with the relevant Decisions adopted 
by the Committee on Technical Barriers to Trad e of the Tokyo Round Agreement on Technical 
Barriers to Trade (TBT/16/Rev.7).    92. Some members stated that Government-m andated inspection agencies should not inspect 
imported products to assess compliance with the terms of commercial contracts.  Those members 
noted that China could inspect imported products or  require conformity assessment when third-party 
testing or certification was not able to fulfil the legitimate objectives listed in the TBT Agreement.  
They noted that once Mutual Recognition Agreements were concluded between Ch ina and a particular  
WTO Member, China should not require inspection nor  retesting in respect of any product exported 
from that Member which had been tested or certifie d to meet relevant international standards by a 
widely recognized conformity assessment body.  Concerning foreign and joint-venture commodity 
inspection agencies, members of the Working Pa rty stated that China should not maintain 
requirements which had the effect of acting as barriers to their operation.     
93. Members of the Working Party also stated that   in order to be fully consistent with the 
requirements of the TBT Agreement and the GA TT 1994, China should eliminate the two-tiered 
system used for imports and domestic products, and otherwise consolidate the standards, technical  WT/ACC/SPEC/CHN/1 
 Page 29 
 
 
regulations and conformity assessment procedures (e .g. testing, inspection, certification, quality 
system registration, laboratory accreditation) to ensu re that the same measures applied to domestic 
production were applied to imports and in the same way. 
 94. The representative of China stated that pursu ant to the provisions of the Agreements on TBT 
and SPS, China applied compulsory inspection and qu arantine as required in the interests of national 
security, life and health of human beings, animals and plants, environmental protection, as well as to 
prevent deceptive activities, as well as to animals, pl ants and their processed products.  He also noted 
that most of China's standards were the same as or equivalent to the international standards, and that 
China implemented the same standards, technical  regulations and accreditation procedures of 
inspection and quarantine to both imported and dom estic goods. There was no discrimination against 
the imported goods, animals and plants and their processed products.  
 95. The representative of China noted that China had set up TBT and SPS enquiry points of inspection and quarantine which had been notifie d to the WTO's SPS and TBT Committees.  Laws, 
regulations, rules, standards and procedures on entry-exit inspection and quarantine had been 
published in publications such as the "MOFTEC Gazette ".  Information could also be gathered from 
the State Administration of Entry-Exit Inspecti on and Quarantine, or from China's TBT and SPS 
enquiry points.  
 
96. Some members of the Working Party expressed concerns about the complexity and lack of consistency of China's standards and inspection regi me.  In addition, members of the Working Party 
noted that imported and domestic products were not  inspected by the same governmental entities and 
that this situation could result in less favourable tr eatment for imports.  Some members also criticized 
mandatory government inspection requirements for co mpliance with terms of commercial contracts.  
In response to those concerns, the representative of China stated that China intended to comply fully 
with its WTO obligations concerning its standards,  technical regulations and inspection regime.  
Notwithstanding the fact that many of the featur es of China's economy were at present those of a 
developing country economy, China was prepared  to undertake a commitment not to apply the 
provisions in Article 12 of the TBT Agreement.   97. Further to China's application of the provisions of the GATT 1994 and the TBT 
Agreement, China confirmed that:  
 
(a)  internal mechanisms exist (e.g. policy gu idelines, inter-agency committees) to inform 
and consult with, on an ongoing basis, gov ernment agencies and ministries (at national WT/ACC/SPEC/CHN/1 
Page 30  
 
and sub-national levels), and private sector interests, of the rights and obligations under 
the GATT 1994 and the TBT Agreement 1994;  and  
 
(b)  the recommended time to allow for co mments on proposed standards, technical 
regulations, and conformity assessment procedures  of sixty days (or forty-five days if no 
comments or request for extension of the time-limit have been received from other WTO 
Members within that time) is observed, and provision is made for giving due 
consideration to a time-limit beyond sixty days if requested by another Party to the TBT Agreement 1994.  
 
The Working Party took note of these commitments.   
 
Trade-Related Investment Measures  
 
98. Some members of the Working Party requested  that China enter a co mmitment to comply in 
full with the requirements of the Agreement on Trade-related Investment Measures (TRIMs 
Agreement) from the date of accession to the WTO.  In response, the repres entative of China stated 
that notwithstanding the fact that many of the feat ures of China's economy were at present those of a 
developing country economy, China was prepared to  undertake a commitment to notify and eliminate 
by the date of entry into force of the WTO Ag reement all trade-related investment measures 
inconsistent with the provisions  of the TRIMs Agreement.  Such  measures included, but were not 
limited to:  requirements that foreign firms bala nce their foreign exchange for importation with 
foreign exchange receipts;  requirements that firms meet specified export target levels in pursuance of 
such foreign exchange balancing requirements, in cluding by contract;  requirements for minimum 
export levels;  local content requirements;  and r estrictions on the sale of "non-resultant products", 
i.e., products not produced in China.  
State-trading entities 
 99. Some members of the Working Party stated  that the activities of China's state-trading 
enterprises were not sufficiently transparent.  So me members also raised concerns regarding the 
conformity of the activities of those enterprises w ith the requirements of Article XVII of the GATT 
1994, and the Understanding on the Interpre tation of Article XVII of the GATT 1994.  
 
100. Those members also stated that China shoul d ensure that the import purchasing practices and 
procedures of state-trading enterprises were fu lly transparent, and in compliance with the  WT/ACC/SPEC/CHN/1 
 Page 31 
 
 
requirements of the WTO Agreement. China should al so refrain from taking any measure to influence 
or direct state-trading enterprises as to the quantity, value, or country of origin of goods purchased or 
sold, except in accordance w ith the requirements of the WTO Agreement.  Those members also stated 
that in accordance with the GATT 1994 and the Unde rstanding on the Interpretation of Article XVII 
of the GATT 1994, China should notify information on  the pricing mechanisms of its state-trading 
enterprises for exported goods, including domestic pr ocurement prices, contract terms for delivery 
and financing terms and conditions. 
 
101. In response, the representative of China stat ed that its state-trading enterprises had full 
management autonomy and responsibility for their ow n profits and losses.  However, some members 
of the Working Party again stated that China shoul d undertake a commitment to ensure that all state-
trading enterprises should comply with the requireme nts of the WTO Agreement.  The representative 
of China noted that a list of products subject to state-trading had been provided in Annex 2a of 
China's Protocol of Accession.  
Free zones, special economic areas 
 
102. Members of the Working Party noted that there was insufficient information available 
concerning special economic areas, in particular their names, geographic boundaries, and relevant 
laws, regulations and other measures relating thereto.   In response, the representative of China stated 
that since 1979 China had established a number of zones and areas where more open policies were 
applied.  They included five Special Economic Zon es (SEZs), 14 coastal open cities, six open cities 
along the Yangtze River, 21 provincial capital citie s and 13 inland boundary cities.  Those areas 
enjoyed greater flexibility in utilizing foreign capita l, introducing foreign t echnology and conducting 
economic cooperation overseas.  At present, foreign investors were entitled to the certain preferential 
treatment.  
 
103. He further stated that FIEs located in SEZs or the Economic and Technical Development 
Zones of open coastal cities were entitled to a cor porate income tax rate of 15% (the normal income 
tax was 33%).  Profits remitted abroad by foreign investors were exempted from income tax.  The 
preferential income tax rate of 15% was applicab le to technology-intensive or knowledge-intensive 
items or projects with foreign investment of over US$30 million, as well as enterprises that operated 
in the fields of energy, transport and port construction.    104. The representative of China noted that throughout  the customs territory of China, a socialist 
market economy system was applied.  The sole excep tion to this general principle concerned all FIEs WT/ACC/SPEC/CHN/1 
Page 32  
 
across the country and state-owned firms within SEZ s, which operated under a market mechanism. In 
1999, the foreign trade volume of SEZs accounted fo r nearly one fifth of the nation's total. The 
national laws and regulations on ta xation were applicable to SEZs in a uniform manner. Laws and 
regulations on patent, copyright, trade marks and bankruptcy applied to state-owned enterprises in 
SEZs, and the SEZs were required to conform with a ll other laws and regulat ions applied throughout 
the customs territory of China.  
105. In response to further requests for informati on, the representative of China indicated that, 
pursuant to governmental policy, the importance of the special trade regimes continued to expand and 
the differences between these regimes and those of ot her parts of its customs territory continued to 
narrow. He noted, however, that the establishm ent of SEZs and other special economic areas was 
required to be approved by the State Council, a nd there was no current plan to establish any new 
special economic zones.  China noted that the long- term objective was to unify the application of its 
trade regime throughout the customs territory on pr inciples of a market-oriented economy.  Members 
of the Working Party expressed concern that produc ts introduced from these special economic areas 
into other parts of China's customs territory should be subject to the same treatment in the application 
of all taxes, import restrictions and customs and tari ff charges as that normally applied to imports into 
these other parts of the customs territory.  The representative of China stated that China would 
undertake to ensure such non-discriminatory treatment.   106. Some members also raised concerns about th e differential treatment within areas of minority 
autonomous regions and other areas of economic pove rty.  In response, the representative of China 
stated that China had a clear commitment to unifor m administration of trade regime within each such 
area and was determined to prevent smuggling.  107. Some members of the Working Party requested  that China take steps to ensure that all 
products imported into the customs territory of China from special economic areas should be subject 
to the same normal customs duties and charges as  any other product imported into the customs 
territory of China.  In particular, those memb ers requested that China undertake a commitment to 
apply all taxes, charges and measures affecting impor ts, including import restrictions and customs and 
tariff charges, that were normally applied to imports into the other parts of Ch ina's customs territory to 
all imported products, including physically incorporated components, imported into China's customs territory from the special economic areas.  108. China confirmed that it would strengthen the uniform enforcement of taxes, tariffs and 
non-tariff measures on trade between its special  economic areas and the other parts of China's  WT/ACC/SPEC/CHN/1 
 Page 33 
 
 
customs territory.  China further confirmed that statistics on trade between China's special 
economic areas and the other parts of its custom s territory would be maintained and improved, 
and would be notified to the WTO on a regular basis.  The Working Party took note of these 
commitments.  
 
109. Some members of the Working Party requested  that China notify to the WTO Secretariat all 
the relevant laws, regulations a nd other measures relating to its sp ecial economic areas or zones.  
They asked that the notification list and identify all those areas or zones.  Those members also 
requested that China notify the WTO Secretariat pr omptly, but in any case within 60 days, of any 
additions or modifications to its special economic areas, including no tification of the laws, regulations 
and other measures relating thereto.   
 
110. China confirmed that it would provide information in its notifications describing how 
the special trade, tariff, and tax regulations applied are limited to the designated special 
economic areas, including information concerning their enforcement.  The Working Party took 
note of this commitment. 
 
111. Some members of the Working Party also requested that any preferential arrangements 
provided for enterprises located w ithin the special export areas should be applied on the basis of non-
discrimination.  
 
Government procurement 
 
 [to be completed] 
 
Transit 
 
 [to be completed] 
 Agricultural policies 
 
112. Some members raised concerns in relation to China's intention to maintain certain quantitative 
import restrictions and restrictive licensing require ments in the agricultural sector. China indicated 
that it was willing to convert most quantitative rest rictions on agricultural products to their tariff-
based equivalents in conformity with the Agreemen t on Agriculture, but that for a very few products it 
was necessary to maintain restric tive licensing over the longer term.   WT/ACC/SPEC/CHN/1 
Page 34  
 
 
113. Some members requested further informati on concerning administrative guidance provided at 
the national and sub-national leve l which could have the effect of influencing the quantity and 
composition of agricultural imports.  Those member s requested that China undertake an appropriate 
commitment to eliminate these practices.   
114. China confirmed that it would not maintain, resort to or revert to guidance plans or 
administrative guidance at the national or sub-national level that regulate the quantity of 
imports, import controls, import substitution  practices, or other non-tariff trade measures 
maintained through state trading enterprises at  the national or sub-national level.  The 
Working Party took note of this commitment.  
 115. Some members requested additional informati on about the use of fiscal transfers and other 
forms of domestic subsidies to government-ow ned and government-controlled entities in the 
agricultural sector.  Those members stated that Ch ina's notifications under the Agriculture and other 
Agreements and related commitments  for subsidies should include refe rence to such measures.  Those 
members also stated that the information notifie d should also detail export subsidies within the 
meaning of Article 9 of the Agreement on Agriculture .  In response, the representative of China noted 
that China continued to maintain export subsidies on certain agricultural products. 
 
116. Some members of the Working Party stated that China should undertake a commitment not to invoke the provisions in Articles 6:2, 6:4(b), 9: 4, 12:2 and 15, and Annex 5, Section B of the 
Agreement on Agriculture.   
 
117. China's commitments on agricultural tariffs, on domestic support and export subsidies for 
agricultural products are contained in the Sc hedule of Concessions and Commitments on Goods 
annexed to China's Draft Protocol of Accession to the WTO. 
 
Trade in civil aircraft 
 
[to be completed] 
 
Textiles 
 
 [to be completed]  WT/ACC/SPEC/CHN/1 
 Page 35 
 
 
 
Non-Tariff Measures Maintained Against China  
 118. The representative of China stated that WT O Members should eliminate all discriminatory 
non-tariff measures maintained against Chinese expor ts from the date of China's accession to the 
WTO.  In response, some members of the Working Pa rty stated that, in their view, such measures did 
not need to be phased out until after China's foreign trade regime fully conformed to WTO 
obligations.  
 
Transitional Safeguards  
 
119. Some members of the Working Party stated th at there was a need during a transitional period 
for a special safeguard mechanism to guard agains t imports from China in such increased quantities or 
under such conditions as to cause or threaten inju ry to domestic producers of like or directly 
competitive products.  The representative of China stat ed that China opposed the creation of such a 
discriminatory safeguards provision and considered  that the safeguards provisions of the GATT 
provided sufficient protection to the domestic i ndustries of WTO Members.  Some members of the 
Working Party considered that the provision of a tr ansitional safeguard would have to be carefully 
circumscribed to prevent abuse in its invocation. 
 Transitional Review Mechanism  
 
120. Members of the Working Party stated that following China's accession to the WTO it would 
be necessary to establish a transitional review mech anism constituted by a Working Party to monitor 
China's compliance with its Protocol of Accessi on and the WTO Agreement within the overall 
framework of China's progress in the reform of its economic and foreign trade regimes.  Members 
considered that the review should be held every two years (or more frequently upon request of China 
or another WTO Member), and that a major review should be held, e.g., every six years.  That 
Working Party would have regard to the outline cont ained in Annex 9 to the Protocol of Accession of 
China, and could make recommendations, as appropr iate, to China or to the other WTO Members 
concerned.  Those members stated that that Working Party should al so decide whether and to what 
extent the transitional provisions  provided in paragraphs … of th is Report should no longer apply.  
Those members noted that once the transitional prov isions ceased to apply, the Transitional Review 
Mechanism would be extinguished.   
 WT/ACC/SPEC/CHN/1 
Page 36  
 
121. The representative of China stated that hi s government did not in principle oppose such a 
review mechanism but considered that the review could be carried out as part of the regular Trade 
Policy Review to which China would be subject.   In response, members of the Working Party stated 
that they considered that the WTO Agreement' s Trade Policy Review Mechanism was not well 
adapted to the type of specific review of complian ce with conditions of accession that they considered 
to be necessary.  Some members stated that the Trade Policy Revi ew of China in the WTO should 
occur as regularly scheduled, notwithstanding the po ssible creation of a special transitional review 
mechanism for China.  
V. TRADE-RELATED INTELLECTUAL PROPERTY REGIME 
 
General 
 
122. Some members of the Working Party stated  that China should undertake a commitment to 
fully comply with the requirements of the Agreement on TRIPS from ….   
Specific aspects of the intellectual property regime 
  [to be completed] 
 
VI. POLICIES AFFECTING TRADE IN SERVICES  123. Members of the Working Party expressed concerns  about the lack of transparency in China's 
services regime.  The representative of China stated th at China was prepared to enter a commitment to 
improve this aspect of its trade regime.    
124. China's Schedule of Specific Commitments on Se rvices is annexed to its draft Protocol of 
Accession reproduced in the Appendix to this Draft Report.  This Schedule of Specific Commitments 
on Services contains the market access commitm ents of China in respect of services. 
Notifications 
 
125. Members of the Working Party requested that China provide to the WTO Secretariat the 
notifications described in paragraphs … of this Draft Report.   
  WT/ACC/SPEC/CHN/1 
 Page 37 
 
 
Trade Agreements 
 126. Some members of the Working Party raised sp ecific concerns in relation to China's special 
trade arrangements, including barter trade arrange ments, with third countries and separate customs 
territories.  Those members requested that China enter a commitment to eliminate or bring such 
arrangements into conformity with WTO obligations by no later than the date of its accession to the 
WTO Agreement. 
 
Publication of information on trade 
 
 [to be completed] 
 
Transparency  
 
127. Some members of the Working Party request ed that China undertake to ensure that upon 
request, and prior to implementation or enforcem ent, all laws, regulations and other measures 
pertaining to or affecting trade in goods, services, TR IPS or the control of foreign exchange would be 
published and made available to WTO Members.   
 128. Those members also requested that China designate an official journal in which all laws, 
regulations and other measures pertaining to or a ffecting the subject-matter of the WTO Agreement 
would be published and that those laws regulations and other meas ures should only become effective 
following a period within which interested pa rties could submit comments to the designated 
authorities.  They asked that China publish that journal on a regular basis and make copies of all 
issues of this journal readily availa ble to individuals and enterprises. 
 
129. Members of the Working Party also request ed that China set up an enquiry point where 
information relating to all laws, regulations and other measures pertaining to or affecting trade in 
goods, services, TRIPS or the control of foreign exch ange could be obtained.  Those members stated 
that replies to such enquiries should generally be provided within 30 days of a request, though in no 
case take longer than 45 days, and if so delayed a st atement of indicating the reasons therefore should 
be provided in writing to the interested party.  Members noted that replies to enquiries would need to be complete and represent the authorita tive view of the Chinese Government. 
 130. Members of the Working Party further requ ested that China provide the WTO Secretariat 
with statistical data and information describing China's economy and trading system specified in WT/ACC/SPEC/CHN/1 
Page 38  
 
Annex 1 of its Protocol of Accession every two years,  and thirty calendar days prior to a meeting of 
the Working Party on Trade with China that would be established by China's Protocol of Accession.  
 
131. In response, the representative of China noted  that the Chinese Government regularly issued 
publications providing information on China's foreign trade system, such as the: "Almanac of Foreign 
Economic Relations and Trade" and "The Bulle tin of MOFTEC" published by MOFTEC; "Statistical 
Yearbook of China", published by the State Sta tistical Bureau; "China's Customs Statistics 
(Quarterly)", edited and published by the Customs General Administration.  China's laws and 
administrative rules and regulations of the State C ouncil relating to foreign tr ade were all published, 
as were regulations issued by Ministries and Commis sions. Such laws and regul ations were available 
in the "Bulletin of the State Council", the "Collec tion of the Laws and Regulations of the People's 
Republic of China (PRC)" and "MOFTEC Gazette". Th e administrative regulations and directives 
relating to foreign trade were also published in MOFTEC's official website 
(http://www.moftec.gov.cn) and periodicals.   
132. He further noted that information on exch ange controls affecting import and export was 
published by the State Administration of Foreign Ex change.  All the valid laws and regulations of 
foreign exchange control were reproduced on the website of the State Administration of Foreign 
Exchange (http://www.safe.gov.cn) and via the news media.   
 
133. Concerning administration of import and export, the representative of China noted that MOFTEC, together with the releva nt departments, decided the items and specific quantities of 
products subject to import and expor t licensing and made timely adjustments according to the need of 
the current situation.  Such information would be published on "International Business" newspaper 
and "MOFTEC Gazette".  
 134. He also noted that information on China's customs laws and regulations, import and export 
duty rates, and customs procedures were published in  the "State Council Bulletin" and in the press 
media, and were available upon request. The procedur es concerning application of duty rates, customs 
value and duty determination, drawback and duty recovery, as well as the procedures concerning duty 
exemptions and reduction, were also published.  Th e State Statistics Bureau also published quarterly 
customs statistics, calculated according to country of origin and consumption. The Customs General 
Administration published trade figures on the basis of eight-digit H.S. headings.    
 
135. The representative of China noted that any bilateral trade agreemen ts concluded between 
China and its trading partners and protocols on the exchange of goods negotiated under them were  WT/ACC/SPEC/CHN/1 
 Page 39 
 
 
published in "The Treaty Series of the PRC".  He al so noted that the "Directory of China's Foreign 
Economic Relations and Trade Enterprises" and "China's Foreign Trade Corporations and 
Organizations" were two publications , which identify foreign trade corporations and other enterprises 
in China engaged in foreign trade.   136. China confirmed that it would, to the maximum extent possible, make available to WTO 
Members translations into one or more of th e official languages of the WTO all laws, 
regulations and other measures pertaining to or affecting trade in goods, services, TRIPS or the 
control of foreign exchange, [___ calendar days ] before such measures  are implemented or 
enforced.  The Working Party took note of these commitments.  
 
137. China confirmed that publication of all laws, regulations and other measures pertaining 
to or affecting trade in goods, services, TRIPS or  the control of foreign exchange would include 
[the period for comment,] the effective date of these measures and the products and services 
affected by a particular measure [, identified by appropriate tariff line and CPC classification if 
necessary].  The Working Party took note of these commitments.  
 138. China confirmed that it would apply on a most-favoured-nation basis all transparency 
commitments agreed bilaterally with other count ries and separate customs territories. The 
Working Party took note of this commitment.  
 
139. China confirmed that it would publish in the official journal, by appropriate 
classification and by service where relevant,  a list of all organizations, including those 
organizations delegated such authority from the national authorities, that are responsible for 
authorizing, approving or regulating services activities whether through grant of license or 
other approval.  Procedures and the conditions fo r obtaining such licenses or approval would 
also be published.  The Working Party took note of these commitments.  
 
140. China confirmed that none of the informatio n required by the WTO or the Protocol to 
be disclosed shall be withheld as confidential in formation.  The Working Party took note of this 
commitment.  
 
141. China confirmed that it would establish or designate an enquiry point where all 
information relating to the laws, regulations and ot her measures pertaining to or affecting trade 
in goods, services, TRIPS or the control of foreign exchange, as well as the published texts, could be obtained.  This information would include the names of national or sub-national WT/ACC/SPEC/CHN/1 
Page 40  
 
authorities (including contact points) responsible for implementing a particular measure.  The 
Working Party took note of these commitments.  
 
Conclusions  
 
142. The Working Party took note of the explana tions and statements of China concerning its 
foreign trade regime, as reflected in this report.   The Working Party took note of the commitments 
given by China in relation to certain specific matters  which are reproduced in paragraphs […] of this 
Draft Report and noted that these commitments are incorporated in paragr aph 1.2 of the Draft 
Protocol of Accession of China.  
143. Having carried out the examination of the forei gn trade regime of China and in the light of the 
explanations, commitments and concessions made by the representative of China, the Working Party 
reached the conclusion that China be invited to accede to the Marrakesh Agreement Establishing the 
WTO under the provisions of Article XII.  For this purpose, the Working Party has prepared the draft 
Decision and Protocol of Accession reproduced in th e Appendix to this Report, and takes note of its 
Schedule of Concessions and Commitments on Goods [(document WT/ACC/SPEC/CHN…)] and 
China's Schedule of Specific Commitments on Services [(document WT/ACC/SPEC/CHN…)] that 
are annexed to the Draft Protocol.  It is proposed  that these texts be adopted by the General Council 
when it adopts the Draft Report.  When the Draft Decision is adopted, the Draft Protocol of Accession 
will be open for acceptance by China which will become  a Member thirty days after it accepts the said 
Draft Protocol.  The Working Party agreed, therefore, that it had completed its work concerning the negotiations for the accession of China to the WTO.  
__________