ARCHIVES HISTORIQUES
DELACOMMISSION
COLLECTION RELIEEDES
DOCUMENTS "COM"
COM(79)167
Vol.1979/0073

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(79)167 final
Brussels,26thMarch1979
POSITION CONCERNING THEINCLUSION OFCHINA N
AMONGTHEGSPBENEFICIARIES TOBETAKENBY
THECOMMUNITY ATTHEFIRSTMEETING
OFTHEEEC-CHINA JOINTCOMMISSION
(CommunicationfromtheCounciltotheCommission )
A
.//
C0M(79)167final

Position concerning theinclusion ofChinaamongtheGSPbeneficiaries
tobetakenbyt-heCommunity atthefirstmeetingoftheEEC-China
JointCommission
1.DuringthecourseofhisrecentvisittoChina,President JENKINS
informed theChineseauthorities thatfollowing anin-depth examination
oftheeconomic andpolitical aspectsofthisproblem (1)theCommission
wouldgivesympathetic consideration totheinclusion ofPRChinaamong
thebeneficiaries ofitsGSP.TheChineseauthorities werealsoinformed
thatChinamightbeexcluded fromGSPbenefitforcertainsensitive pro­
ductsandthatthepossibility ofbenefitting fromtheGSPinthefield
oftextiles wouldbeconditional uponthesatisfactory outcomeofthe
currentnegotiations foranagreement inthetextilesector.
2.Thedetailed mechanics forthisinclusion wouldbespeltoutwhenthe
Commission presented theCouncilwithitsGSPschemefor1980.
3.ThefirstmeetingoftheJointCommittee setupundertheEEC-China
agreement startson3May.Onthatoccasion theChinesewillraisethe
question oftheGSPastheyhavealreadydoneonseveralprevious occasions .
ThisisthereasonwhytheCommission considers thatitisbothadvisable
andimportant thattheCouncilshoulddeclareitselfbeforethatmeetingin
! '-
favourinprinciple oftheinclusion ofChinaonsuchabasis.
4.Morethanayearafterthesignature oftheAgreement withChina,this
takentogether withthecurrenttextilenegotiations ,wouldconstitute one
ofthefirstconcreteactstogivefleshtothisagreement andwouldcontri­
butetothestrengthening oftradebetweenthetwoparties.
-
5.Inviewofthetimetable,itappearsnecessary fortheCounciltotake'
adecision atitsnextmeeting on2/3April1979.
6.Theprecisedetailsofthecommunication totheChineseauthorities will
beworkedoutincollaboration withthe113Committee duringtheworktopre
parefortheabovementioned JointCommittee .
(1)SeeAnnex

-2-
7.Itremainsunderstood thatadecision inprinciple bytheCouncilof
thiskindinnowayprejudges theproposals whichtheCommission willin
duecoursehavetoputforward onaGSPafter1980.

ANNEX
iAnalysis oftheimpactofincluding thePeople's
Republic ofChinaamongthebeneficiaries ofthe
Community' sGSP
1.Thedecision toadmitacountrytothelistofbeneficiaries underthe
Community'sGSPhasalwaysbeenbasedontwocriteria :membership ofthe
Groupof77or,ifthecountryconcerned isnotamemberoftheGroup,the
actualmeritsofthecase.Sincethe.People'sRepublic ofChinaisnota
memberoftheGroupof77thewishithasexpressed musttherefore beexamined
onthebasisofitseconomic situation andthestateofitsrelations withthe ■
Community .
2.Examination ofthebasiceconomicindicators ,detailsofwhicharegiven
intheattached annexes,showsthatChinaoughttobeconsidered asadevelo­
pingcountry.Itmaybepointedoutinparticular thatChina'spercapitaGNP
in1976wasUSD410,whichiscomparable tothatofotherless-deve-
lopeddeveloping countries,such3sZambiaandHonduras .Furthermore ,
<aihou?hChin*isStrenuouseffortstoindust^^^'a^icul^e remain
lheba3is°Mt8econonorandstillemploys6%ofthelabourforce.Moreover,' ,
asregardsenoreyforexample,perenpitaconsumption in1975was693kg(of
coal ..e^uivaient)fwhichputsChinaonalevelwithcountriessuchasPeru*^
andIraq.•* ■;t .■V
3.China'stradebalancewiththeCommunity hasregularly beenindeficit
since1958,andamarkedsurplus wasnotrecordeduntil1977,probably asa
resultofcertaininternal problems.Inthefirst11monthsof1978theChinese
deficithadalreadyrisento471million UA',whichrepresents 56%ofChinese
exportstotheCommunity .Onecanforeseethisbalancestayingnegativefor
sometimetakingintoaccountthecapitalequipment whichChinaneedstocarry
outitsindustrialisation . •'■

ANNEX
A.With regard toth«implications ofinoluding China intheGSP tthefollowing
points may "benoted :
(i)theproportion oftotal imports into theEECfrom China whioh would "be
covered bytheCSP inthecase where no^sector were -tobeexcluded ,re­
presented 34,1% in1976 and54,2% in1977 ;
(ii)in1977 these imports were made upasfollows :16.4$ agricultural
products ,60.4/oindustrial products and23*4 /&textile products ;
(iii)with regard toagricultural products ,thecomposition ofChina 'sexports
totheEEC issuch itsinclusion among thebeneficiaries should not cause
anyparticular problems ;
^(iv)inthecaseofindustrial products ,62fiofimports intotheEECcomprise
non-sensitive products andshould nottherefore cause serious problems ;
where sensitive products areconcerned ,however ,China 'sinclusion could
give rise .todifficulties incrisis sectors (footwear ,leather goods ,eto.)
(v)inview ofthevolume ofChina 'sexports oftextile products ,thedifficulti
that might arise asaresult ofthe inolusion ofChina inthe list of
CSPbenoficiaries could be.avoided-by the conclusion ofacomprehensive
I
agreement covering this sector ;negotiations tothis endbegan on
23Jacuary 1979 ;
*
I Γ"
\
(vi)astudy ontheoretical utilization oftheCSPbased onthe
1977 cchcme chows that ifChina 'suseofthepreferential
t ?
advantages were equivalent totheaverage rate ofusebythe .
present CCPbeneficiaries ,namely 60^1 ,itwould come in ,
eighth position ,with total imports under thoCSPomounting
toaround 200million EUA. .1 x:'^
' ■ _.Jl'
Itshould bepointed out inthis connection that onedonor country
-Australia -hasalready decided toaccord China GSPtreatment without
requiring anofficial application ,andthat according toourinformation
Japan isgiving favourable consideration totheinclusion ofChina among
thecountries covered byitsscheme .

V\
\..\■•Aren:'9597000km2 :•V'-: ''
rnrrTntion:835*3million(1976) -•t.
Theaverageannualgrowthratefortheperiod197^-75was.
1.7fa(3*3/Sforthourbanpopulation and1»5S#forthelabour «
force);33£ofthepopulation isunder15and6l$Jisof
working ago•',.'•
Theprojected population illtheyear2000is1093million,
risingtoa,hypothetical stationary ,figure'of1393million
intheyear2090.'•*'••'' i-.-'-'•
>-•'CTTPpercapita:.UDD410in197"
ofpercapitafoodproduction (base100in1965–67)»108(1974–76)
""'VAn~iciiltvrr :6S^ofthelabourforceisengagedinagriculture..Inthe
4period1975-77 »production ofgrain,sweetpotatoes andsoya
;• remainedstationary ataround280milliontonnes(which •
:■/resultedinimportsofwheatgoingupfrom2.5milliontonnes .
;V'. in1976/77to10milliontonnesin1977/73).The1935 /
';, »'production target(400milliontonnes)-.willprobablybehard
toachicvoinviewofthosignificant gapbetween someregions
, andthose–whicharestillfewinnumber–whereproduction
•\' levelsareveryhigh.Riceexports now-amounttonomore
than700000tonnesperyear."
Industry :Between 1972and1975USD3000million wa3spentonimporting
•j.•, ••-'turnkeyfactories fromJapan,theUnitedStatesandtheCommunity ;
.; ;tinderthe1978-35programme 120industrial projectsaretobe
.putintooperation (includingtensteel'complexes ,nine
> noiv-ferrous metalcomplexes ,eightcoalmines,tenoilandgas
1developments ,thirtylargepowerstations' ,"sixmajorrailways
y andfivemajorports. j-1 r '
Encm-:"Annualgrowthofproduction was4.6£betweeni960andI965.-
Percapitaconsumption (kgofcoalequivalent):693(1975).
1 '·1...' ·.-■. ;-
'•" , '• \::1.•',
A. ■ ' '■ . '■ V»'« •!
KB:Althoughtheresults ,takenoverallaregood,thelevelofachievement
isnevertheless modestandnotalwayssolidlybased:'percapitaproduction
•,-ofsteel,fertilisers andenergyisstillverylow#r'
V.v,•^ ,V-
f. '•V'
WrV!>vcloprucnt Hrport,197?*TheWorldBank(Arwrurt1975).

TP-ATE
^~""J^,"*A **•"**^*••*ta•*^«,-i ''"*'*>^***
vio-^-vistheCo=unity upto1575»covedintosurplusfro=1/7'./
onv;ards.However,thissituation wouldseemto"beduetotheinternal
njJljcr'iLrzit t&Lxperiod.andreprasenta nnija.passing .
trend.
CMn.->Tnf^vor^al^Jtrad^
rr.nrviHjnn 197-1" 197r'-, '1^76 I077
cx-norl^ 56}6■ ..60^ 6000 6007
irnr^ojrt^i 7260 7 59235.267
Xfclnr.co •>-1624 '.-986 +77+820
2.Inexternaltrade,theproportion ofChincGCexportsaccounted forhy
theEECbanfluctuated betvjecn11/5and11,5$(l^fotoJapan,17«5$ "to"the
CI-2JAcountries ,2l£toHongKong).In1976,importsintoChinafromthe
Conxiunity rcprccented 19»7Zf°oftotalimports,.oomparodwith32.2JJfrom'
Japanand17.C/IfromtheCMSAcountries, >
"i»on im •JB2S:..'.JäK 1221
« - •
E3Cimportsfrom ■ •*;•;,' ■
China •:'.'607 .'626 1183 857
EECexportsto
China V'771-,1084 1120 787
Balance +84 +45^' «-63 •■70
V
\
Source:SOSC ■ 1
ItchouldalcohonotedthatimportsintothoCommunity fromthePeople's
EepublicofChina,accountforonly0»5/£oftotalEECimports.
' i
Thereasonforthodrop "between1976and-1977wasthestoppageofgold
exportstotheCommunity.. ,,

!-5-
//T–elicit ofthfi-vlr.r'.cr o*^>.0Pcc^c*?Srfrvfrlic "-
ofChinainthelistofcountries coveredbytheCor,minify'sCSP'?V
//.
/
/1.-IisportsintotheEECfromChinaofproductscoveredbytheCSPI
(Source:SQEC)• . !
,/
r­»ooom
'1976 1977t
J
Arricultural products 7343218.185 »;'.75COI ■16,14%
Chapters 1to24 .66523 13Sf
subjecttoquota I i.y••6909
ι.
*.φ813 ,
ïnduotrial products •\•"*24222959.97% •';280689 •60.4%.
senoitive ,s••.<t
■.ϊν
■ί17247 17939
somi-sensitive 23319; 80569
Ihybrid • ..MV'.V fr>,%
non-sensitive j'' '156
;694 ;172558 ,
Textile'products
.•>8822521.84%m 103900-23
»*.42,:
seneitive 1■^'y
.v•■•62971' 90896
.r..
semi-sensitive \\">■/; 18851 T*V'5539
.i /
non-sensitive •.iM.
ν.·3281.&y670
juteandcoir •t3122 795-«
>ECSCproductsr-34Oi.01%;m
sensitive ^'.
I ..*.I'•
*•y
.r,4
semi-sensitive 30
■■'•.'':''
TOTAL
4a.:403.920î•
.*-v,;''
j r:
•.'<K',-**-i••*χ. ·V
'•/.u.
2^2:».
600 •
V*'■·%"1'''"ί···'^;;1:'I'.

*-• bulic ofinportc into thoCor.3unity ofagricultural products covered
bythoGSPiomade upofpigeon moat (33$)andtea (10$).Thoproportion
accounted forbyagricultural products subjoct toquota isvory snail .
3» »tfithregard toindustrial products ,sensitive products account odfor
ofthototal in197& and6.4/°in1977 »made upasfollows ;
;(a)irv-vel nooda &2piODDu.a-.,equivalent to .24$ofthiscategory
(GCPsiaxinua ■dountry amount 39^7000u-a.J ;
(b)leather garments :3585000u.a.»eqxuvalont "to20$ofthis category
..K'.riirar arreurrt ZD1ZDDOa.a./);
(c)footwear :1182000u.a.,equivalent to6.6$ ofthis category
(GSPmaximum counlry amount 484000u»a.)»
(d)ohairo andother ooataj 29<jO000u.a.,oquivalont to16.5$ ofthis
category (GSPmaximum country amount 4234000u.a.);
(e)furnituro :3450000u.a.j equivalent to19«2$ ofthis category
(GSPmaximum country amount 3178000u.a»)» - '
Thofigures forimports from China ofproducts inthis category arehigh
inrolation tothequotas laid down under theGSP ,particularly ifitis
considered that theCommunity industries concerned are'experiencing
economio difficulties®
With regard toothor industrial produots :
χ
basket ware (hybrid produots in1976 buteemi-sonsitive in1977 )
accounted for70$oftherelevant category in1976 and60$in1977 ;
gloves ?25$ofsoaii-sensitive products in1976 and12$ in1977 »
Among thenon-sensitive products ,furskins accounted for14$ofthototal
forthis category in1976and30$in1977 »wh^le modioamonts accounted
for7$in1976 and6$in1977 . ""
4.In 197o~77,imports into thoCommunity oftextile products coverod .
bytheCSPwould have accounted forbetween 22$and23.5$ oftotal
imports .Inthis category ,"other woven fabrics ofcotton ,unbleached "
ar.i "zen*3andboys *outer g-irn^nts "respectively accounted for63$
and12$ ,ofsensitive textile products (1976). Chinese exports of
1
textile products tothe Community could give rise todifficulties
ontheCommunity market in "Slew oftheir volume andthesensitivity
ofthis seotoz *.