RESTRICTED WORLD TRADE ORGANIZATION
ORGANISATION MONDIALE DU COMMERCE
ORGANIZACIÓN MUNDIAL DEL COMERCIOWT/ACC/CHN/30
18 July 2000
(00-2944)
Working Party on the
Accession of ChinaOriginal: English/
anglais/
inglés
COMMUNICATION FROM CHINA
In preparation for the Working Party meeting to be held on 19-27 July 2000, the Chinese
delegation has submitted the following documentation,  entitled "Reply by the Chinese Delegation to
the Checklist of Information Requested from China during the Tenth Session of the Working Party"1.
Groupe de travail de
l'accession de la chine
COMMUNICATION DE LA CHINE
En vue de la réunion du Groupe de travail qui aura lieu du 19 au 27 juillet 2000, la délégation
chinoise a communiqué la documentation ci-après, intitulée "Réponse de la délégation chinoise à la
liste de renseignements demandés à la Chine pendant la dixième session du Groupe de travail".1
Grupo de Trabajo sobre la
Adhesión de China
COMUNICACIÓN DE CHINA
Para preparar la reunión del Grupo de Trabajo que se celebrará del 19 al 27 de julio de 2000,
la delegación china ha presentado la siguiente documentación, titulada "Respuesta de la delegación
china a la lista recapitulativa de información solicitada a China durante la décima reunión del Grupo
de Trabajo".1
                                                     
1 In English only./En anglais seulement./En inglés solamente.WT/ACC/CHN/30
Page 2
Reply by the Chinese Delegation to the Checklist of Information Requested
from China during the 10th Se ssion of the Working Party
13 July 2000
1. Working Party Draft Report (WT/ACC/SPEC/CHN/1)
• Page 6 - heading Monetary and Fiscal policy.  Please provide a short general description of
current and future government policies.
Response from China:
      Through the reform and opening up in the last two decades, China has established a fiscal
management system which is compatible with the requirements of market economy. With respect to
fiscal revenue, a taxation system with the value-added tax as the main part has been established since
the taxation reform in 1994. With respect to fiscal expenditure, over recent years the government has,in line with the public fiscal requirement genera lly exercised by market economies, strengthened its
adjustment on the structure of expenditure and given priority to public needs so as to ensure the
normal operations of the government.
      In recent years, while pursuing proactive fiscal policy, China has implemented proper monetary
policy and has taken a series of adjusting and reform measures which include lowering the interestrate for loans of financial institutions, improving the system of required deposit reserves and lowering
the ratio of required reserves, positively increasing the input of base money and encouraging the
commercial banks to expand their credit.
      In respect of future fiscal policy, the Chinese government will further improve its taxation system
and will be continuing to improve the efficiency of fiscal expenditure through implementing reformmeasures such as sectoral budget, centralised payment by the national treasury and zero base budget
as well as improving management on fiscal expenditure. With respect to future monetary policy, the
central bank will be continuing to pursue a prudent policy, to maintain the stability of RMB, topromote the interest rate liberalization and to establish a modern commercial banking system.WT/ACC/CHN/30
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• Page 8 - under heading Foreign Exchange and Payments.  Please identify and provide the
Working Party with a copy of the law mentioned in the last sentence of paragraph 23.
Response from China:
The laws and regulations mentioned under this heading include:
· Law of the People's Republic of China on Chinese-Foreign Equity Joint Venture;
· Law of the People's Republic of China on Chinese-Foreign Contractual Joint Venture;
· Regulations on the Exchange System of the People's Republic of China; and
· Regulations on the Sale and Purchase of and Payment in Foreign Exchange.
The Chinese delegation has provided copies of these laws and regulations during the Ninth
Session of the Working Party.
• Page 9 - heading Investment Regime.  Please provide a short general description of current and
future government policies.
Response from China:
      Since the inception of the reform and opening up policy in late 1970's, China has carried out a
series of reforms of its investment regime. The highly centralised investment administration under the
planned economy has been progressively transformed into a new pattern of diversification of
investors, multi-channel of capital sources and diversification of investment modalities. Thegovernment encourages foreign investment into the Chinese market and has uninterruptedly opened
and expanded the scope for investment. At the same time, the Chinese government also encourages
the development of non-state-operated economy and is  speeding up the opening of areas for non-state
investment. With China's program in the establishment of its market economy, the construction
projects of various enterprises utilising free capital and financed by the credit of the enterprise will be
fully subject to the decision-making of the enterprise concerned and at their own risk. The commercialbanks' credit activities to all kinds of investors will be based on the evaluation and decision-making of
their own and be at their own risk. The business activ ities of intermediate investment agencies will be
fully subject to the market and will provide service at the instruction of the investors. These agencies
will break up their administrative relations with government agencies and the service activities
financed by the government should also be subject to the terms and conditions agreed in the contracts
concerned.WT/ACC/CHN/30
Page 4
• Page 9 - modified heading Commercial Operati on of State Owned Enterprises (replacing State
Ownership and Privatisation).  Please provide a short general description of current and future
government policies.
Response from China:
      The state-owned enterprises of China have basically operated in accordance with rules of market
economy. The government will no longer directly administer the human, finance and material
resources and operational activities such as production, supply and marketing. The prices ofcommodities produced by state-own enterprises are decided by the market and resources in
operational areas are fundamentally allocated by the market. The state-owned banks have been
commercialised and the central revenue will no longer used to invest in these enterprises. China isfurthering its reform of the state-owned enterprises and establishing the modern enterprise system.
• Page 10 - heading Pricing Policies.  Please give the full title and place and frequency of
publication of the Official Journal mentioned in paragraph 27. Please provide a list of all products
subject to (i) basic price and (ii) floating range guidance pricing mentioned in paragraph 30.  In
paragraph 31, please provide a short statement of future government policies in relation to
liberalisation of pricing policies.
Response from China:
      The official journal providing the information of price is the Commodity Price Notice of the
People's Republic of China published in Beijing.
      The floating range of guidance pricing referred to in paragraph 30 is generally 5% to 15%. The
short statement of liberalisation on future government policies referred to in paragraph 31 reads asfollows:
      China will be continuing to further its price reform, adjusting the catalogue subject to state pricing
and further liberalise its pricing policies.
• Page 11 heading Competition Policy. Please provide a short general description of current and
future government policies.
Response from China:
      The Chinese government encourages fair competition and is against unfair competition acts of all
kinds. The Law of the People's Republic of Chin a on Combating Unfair Competition promulgated on
September 2, 1992 and implemented on December 1, 1992 is the basic law to maintain the order of
competition in the market. In addition, the Price Law, the Law on Tendering and Bidding, theWT/ACC/CHN/30
Page 5
Criminal Law and other relevant laws also cont ains provisions on anti-monopoly and anti unfair
competition. China is now formulating the Law on Anti-Monopoly.
• Page 11/12, heading Powers of Executive, Legislative and Judicial Branches of Government.
Please provide information on the status that international treaties enjoy under Chinese
Constitutional law, with particular regard to the WTO Agreement once it enters into force for
China.
 Response from China:
       The Representative of China stated that China has been consistently performing its international
treaty obligations in good faith. According to the Constitution and the Law on the Procedure ofConclusion of Treaties, the WTO Agreement falls into the category of "important international
agreements" that is subject to the ratification by the Standing Committee of the National People's
Congress. China shall make its best effort to keep its laws and regulations pertaining to trade oraffecting trade in conformity with the WTO Agr eement and with its commitments so as to fully
perform its international obligations. China's domestic laws and regulations ensure the full
implementation of the WTO Agreement in China. For this reason, China has commenced a plan tosystematically revise its relevant domestic laws. Therefore, the WTO Agreement will be implemented
in an effective and uniform way after China's accession.
• Page 15, heading Trading Rights.  In paragraph 49, please provide a description of the "end users"
contemplated in the first sentence.  Please also provide a short description of government plans
for the staged elimination of designated tradin g, focussing in particular on the sectors or
enterprises to be liberalised, time periods, criteria for liberalisation, market share etc.
Response from China:
The end user herein refers to the Chinese enterprises without right to import and/or export. At
present, these enterprises import the products for their own use through enterprises with right to
import and export. Three years after China's accession to the WTO, the right to trade shall be
liberalised, as a result of which, all enterprises in  China will have right to trade, therefore the end
users at that time will be legal persons of enterprises which use imported products.
      Designated trading.
      China will adjust and expand its list of enterprises under designated trading regime annually
during the transitional period, until such time as th e full implementation of the commitment contained
in Annex 2b. The criteria for enterprise under design ated trading regime include the registered capital,
import and export volume and the import volume of products subject to designated trading in the
previous year, bank credit rating and profits and losses.WT/ACC/CHN/30
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• Page 16, heading Ordinary Customs Duties.  Please  indicate whether China intends to join the
Information Technology Agreement.
Response from China:
      China will join the Information Technology Agreement upon its accession to the WTO and the
schedule of concessions will be incorporated in its final schedule.
• Page 17, heading Rules of Origin.  Please provide information on the precise methodology used to
determine whether a product had undergone substantial transformation.  Are the same rules of
origin criteria used for both preferential and non-preferential purposes?  Are rules of origin
applied as an instrument of trade policy?
Response from China:
      China's rules of origin for import and export are non-preferential rules of origin. Upon its
accession to the WTO, China will implement the Agreement on Rules of Origin of the WTO. Once
the international harmonisation of non-preferential rules of origin has concluded, China will fullyadopt the internationally harmonised non-preferential rules of origin.
      The criteria for making the determination of substantial transformation is (a) change in tariff
classification of a four-digit tariff line in the Customs Import and Export Tariff of the People's
Republic of China; or (b) the value added component is 30% or more in the total value of a new
product.
      China will not use the rules of origin as an instrument to pursue trade objective directly or
indirectly.
• Page 18, heading Fees and Charges for Services Rendered.  Please provide information on the
fees applied to imports for services rendered at national and sub-national level, together with
calculation methodology and a short explanation of how the precise amount of the fee collected
reflects the cost of provision of the service charged for.
Response from China:
      China commits itself to comply with Articles II and VIII of GATT 1994 in this regard.WT/ACC/CHN/30
Page 7
• Page 19, heading Tariff rate quotas, Tariff exemptions.  Please provide information on how tariff
exemptions are applied and whether they are applied on a m.f.n. basis.
Response from China:
      The tariff exemption policy of China is developed and implemented in accordance with the
Customs Law of the People's Republic of China and the Regulations of the People's Republic of
China on Import and Export Duties. The coverage of specific tariff reduction or exemption is
provided for by the State Council.  All the statutory tariff reduction and exemption are applied on a
m.f.n. basis.
• Page 19, heading Quantitative import restrictions, including prohibitions and quotas.  Please
provide information on the phasing in of the liberalisation contemplated for the products listed in
Annex 3 of the Draft Protocol.  Please also confirm whether Annex 3 is a full and complete list of
all products subject to non-tariff measures.
Response from China:
      During the phasing-in period, China will administer relevant quotas, licenses and tendering
requirement in accordance with the current administ rative regulations which has been notified to the
Secretariat. China has also modified Annex 3 on the basis of the comments raised during the latestsession of the Working Party. Annex 3 contains all the products subject to quotas, licenses and
tendering requirement in China.
• Page 20, heading Import licensing.  Please state the name and place of publication of the official
journal mentioned in paragraph 68.
Response from China:
      MOFTEC Gazette, a weekly magazine published in Beijing under the sponsorship of MOFTEC
which is available at MOFTEC.
• Page 23, heading Customs Valuation.  Please provide more information in relation to the
circumstances in which the Customs officer may determine that the "normal transaction value"
cannot be "ascertained".
Response from China:
      The China side believes that there will not be a situation where the "normal transaction value"
cannot be "ascertained" since the WTO Customs Valuation Agreement provides several methods for
valuation.WT/ACC/CHN/30
Page 8
Page 24.  Heading Other Customs formalities.  Please provide information on any other customs
formalities that need to be complied with by an importer or customs agent.
Response from China:
      China joined the International Convention on the Simplification and Harmonisation of Customs
System in 1988 and signed the Protocol on the Amendment the International Convention on the
Simplification and Harmonisation of  Customs System. The Customs authorities of China have only
adopted such customs formalities as declaration, examination, levying of duties and release which areconsistent with international practices.
• Page 24.  Heading Preshipment inspection.  Please state whether China uses or expects to use the
services of any preshipment inspection firm.
Response from China:
      Currently, there are trade and commerce inspection agencies (including joint venture agencies)
engaged in preshipment inspection. China commits itself to comply with the Agreement onPreshipment Inspection of the WTO, and will regulate the existing trade and commerce inspection
agencies and permit the qualified agencies to be engaged in preshipment inspection in line with the
government mandate or the terms and conditions of commercial contracts.
• Page 24, heading Anti-Dumping, countervailing duties, safeguard regimes.  Please provide further
information on the institutions and authorities responsible for the implementation of the recent
law on anti-dumping and countervailing measures.  Please provide further information on the
status of the draft legislation on safeguards.
Response from China:
1. Competent Authorities for Anti-dumping and Countervailing Duty Investigations and Their
Corresponding Responsibilities
       Pursuant to the stipulations of "Regulation on Anti-dumping and Anti-subsidy of the People's
Republic of China", there are four Chinese government bodies responsible for anti-dumping and
countervailing duty investigations. Their responsibilities are as follows:
        A. Ministry of Foreign Trade and Economic Cooperation (MOFTEC)
      Receiving anti-dumping and countervailing petitions; Conducting investigation on dumping and
dumping margin and issuing relevant preliminary determination decisions and notices; Negotiating
with foreign interested parties on "Price Undertaking" if necessary; Providing proposal on imposition
of definitive anti-dumping or countervailing duties or proposals on duty refund, etc. There is an Anti-WT/ACC/CHN/30
Page 9
dumping Division established under the Depart ment of Treaties and Law of MOFTEC, with
responsibility to handle anti-dumping and countervailing investigations on alleged imports.
       B. State Economics and Trade Commission (SETC)
       Responsible for the investigation of injury caused by the dumped or subsidised imports to the
domestic industry, the extent of such injury and make injury findings.
       There is a non-permanent decision and policy making body in SETC which named as the "Injury
Investigation and Determination Committee” (IIDC) which is composed of six commissioners from
the relevant departments of SETC. There is a permanent executive office in charge of the
investigation of injury to the industry and submitting its findings to the IIDC for approval.
       C. General Customs Administration (CGA)
       Coordinating anti-dumping investigations  with MOFTEC; Enforcing anti-dumping measures such
as collecting cash deposits, dumping or countervailing duties and monitoring its implementation.
       D. Tariff Commission of State Council(TCSC)
       Making final decisions on whether or not to levy the dumping or countervailing duties and refund
duties based on the suggestions by MOFTEC with re gard to imposing anti-dumping or countervailing
duties and reimburse excess amount of duties respectively.
2. The status of the draft legislation on safeguards
 Upon the accession to WTO, China will implement Regulation on Safeguard by which the future
Safeguard measures will be regulated. The drafting work of this regulation is still on the way. It can
be expected that the contents of this new regulation will be fully consistent with Safeguard agreement
of WTO.
• Page 25, heading Export licensing.  Please provide information concerning the use of export
licensing as a mechanism to limit the quantity of exports.
Response from China:
      China applies its export license system to certain agricultural products, resource products and
chemicals, the underlying purposes of which are to ensure the reasonable and orderly exploitation of
mineral resources, protect the biological environment and implement its obligations underinternational conventions as well as for statistical purpose.WT/ACC/CHN/30
Page 10
Page 26, heading Export Subsidies.  Please confirm that all industrial export subsidies have been
notified to the Working Party.
Response from China:
      China has confirmed that all of its industrial subsidies have been notified to the Working Party.
• Page 33, heading Government Procurement.  Please provide a short description of the government
procurement policy and process, together with a statement of future plans with respect to further
liberalisation and foreign participation in the procurement process.
Response from China:
      In order to promote China's government pr ocurement, the Ministry of Finance promulgated the
Interim Regulations on Government Procurement in April 1998. The Interim Regulations is stipulatedin line with the spirit of the Agreement on Government Procurement of the WTO and on the basis of
the relevant provisions of the United Nations Model Law on Procurement of Goods, Construction and
Services while making reference to the laws and regulations of some WTO Members on governmentprocurement. The policy and procedure regarding government procurement provided for therein are
consistent with the international conventions. China sticks to the fundamental principles of being
open, fair, equitable, efficient and in the public interest when carrying out government procurement.At present, China is formulating the Government Procurement Law.
• Page 33, heading Transit.  Please provide a brief description of the rules and regulations
governing transhipment of goods through the customs territory of China.
Response from China:
      The current regulation of transit in China is the Regulations of the Customs of the People's
Republic of China on the Supervision and Administration of Transit Goods which is consistent withArticle V of GATT 1994.
• Page 33, heading Agricultural policies.  Please provide a brief description of government policy
and future plans for the agriculture sector.
Response from China:
      Since  China is a country with vast agricultural base, as well as a country with vast population,
agricultural security, food security in particular, is an issue of supreme importance. China will base itspolicies on domestic agricultural supply, especially on balanced supply and demand of grains.
Meanwhile, China will actively seek international resources as a necessary supplement. With its deeds
the Chinese government has provided its consistent support for the progressive liberalization ofWT/ACC/CHN/30
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international trade in agriculture. As a matter of fact, this process has to be sensitive to development
realities of different members.
• Page 34, heading Trade in civil aircraft.  Please provide a short statement on the civil aircraft
industry in China and an indication of whether China plans to join the Agreement on Trade in
Civil Aircraft.
Response from China:
      China's civil aircraft industry was established in 1980's. With more than ten enterprises and over
10,000 employees, the industry has developed, improved and rebuilt more than ten types of aircraft.
The industry is characterised by backward production equipment, insufficient investment and lowtechnical level. Besides, it has not formed economy of  scale. Therefore, China is not in the position to
commit to joining the Agreement on Trade in Civil Aircraft at present stage.
• Page 37, heading Transparency.  Please provide a full listing of the official journals referred to in
this section, together with an address of the agency responsible for their publication.
Response from China:
1. Gazette of the Standing Committee of the National People's Congress of the People's Republic of
China
2. Gazette of the State Council of the People's Republic of China
3. Collection of the Laws of the People's Republic of China
4. Collection of the Laws and Regulations of the People's Republic of China
5. Gazette of MOFTEC of the People's Republic of China
6. Proclamation of the People's Bank of the People's Republic of China
7. Proclamation of the Ministry of Finance of the People's Republic of ChinaWT/ACC/CHN/30
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2. Annexes to the Draft Protocol
• Annex 2(a)1.  Please clarify whether other agencies are involved in the importation of fertilizer.
Please also confirm that no entity is involved in the importation of sugar.
      Response from China:
      China confirms that Sinochem and Chin a National Agricultural Means of Production Group
Corporation (CNAMPGC) are authorized state trading enterprises to import fertilizer. The entitiesprocessing the right to import sugar are specified in Annex 2(a)1.
• Annex 3.  Please update the list to add all products covered by recent bilateral accords concluded
with the US and EC.
      Response from China:
      China has revised Annex 3 which will be submitted to the Working Party.
• Annex 5a.  Please review the draft Annex to ensure that all subsidies paid are described therein,
in particular, those concerning the banking sector, tax deferrals, sub-national subsidies, special
treatment of companies located in special economic zones etc.
      Response from China:
      China confirms that all subsidies have been notified.
• Annex 7a .  Please create separate sections to this draft Annex for SPS and TBT measures, and
add replace the "Justification" column with references to "legitimate objectives" of the kind
described in Article 2 of the TBT Agreement.
       Response from China:
       China has revised Annex 7(a) which will be submitted to the Working Party.WT/ACC/CHN/30
Page 13
3. Information supplied
• Table on Amendment of Legislation .  Please review all laws at the national and sub-national
level and their relation to the subject matters of the WTO Agreement and provide a revised table
identifying areas of specific inconsistency and the planned action for elimination of any
inconsistency, e.g. Agreement on TRIMS.
       Response from China:
       China has revised this table which will be submitted to the Working Party.
• State Trading .  Please revise this table to ensure that all entities are state trading enterprises
within the definition of Article XVII of the GATT 1994 or the Understanding on the
Interpretation of Article XVII of the GATT 1994.
      Response from China:
      China has revised its answer on the questionnaire which will be submitted to the Working Party.
China confirms that all the enterprises notified in the questionnaire are state trading enterprises within
the definition of Article XVII of the GATT 1994 and the Understanding on the Interpretation of
Article XVII of the GATT 1994. All the enterprises are doing business out of commercialconsideration.
• TBT.   Please provide a detailed description of the work currently underway to ensure compliance
with the requirements of the Agreement on TBT.
      Response from China:
      China has revised the Checklist of Illustrative TBT Issues for Consideration in Accession which
contains the relevant explanations. The checklist will be submitted to the Working Party.
• TRIMS .  Please provide more information on the work currently underway to ensure compliance
with the requirements of the Agreement on TRIMS.
      Response from China:
      In order to make the officials responsible for foreign investment policy be acquainted with
knowledge of the WTO rules and the commitment Chinese government made in its accession
negotiations, China has held training courses for them in a bid to ensure the implementation of theTRIMs Agreement in China. China is now intensif ying the efforts on sorting out its laws and
regulations on investment. China has developed plans for revising the Law of the People’s Republic
of China on Joint ventures with Chinese and Fore ign Investment, Law of the People’s Republic ofWT/ACC/CHN/30
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China on Chinese-Foreign Contractual Joint Ventures, Law of the People’s Republic of China on
Foreign-funded Enterprises as well as their respective rules for implementation, so as to make them
consistent with TRIMs Agreement and China's commitment.
• Agricultural Subsidies .  Please provide additional information on the data source used in pages
7, 8 and 9.  Please also provide additional updated information on the base years 1993 -1995.
      Response from China:
      In accordance with the WTO Document WTO/ACC/4, the base year for applying countries shall
be the latest three years for which statistics are available. Therefore, the base year for lasted
submission of China's Domestic Support Suppo rting Tables (WT/ACC/CHN/22) is 1996 to 1998.
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