WORLD TRADE
ORGANIZATIONG/LIC/Q/CHN/6
4 September 2003
(03-4622)
Committee on Import Licensing Original:  English
CHINA'S TRANSITIONAL REVIEW MECHANISM1
Comments and questions from JAPAN to CHINA
The following communication, dated 1 September 2003, has been received from the
Permanent Mission of Japan.
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1. Japan welcomes that, in the second year after accession, implementation by China of its
commitments on import licensing has progressed and is entering into a cruising phase.  It appreciates
efforts by China for developing and improving necessary regulatory framework and smoothly
implementing phase-in commitments.  In a transitional period of evolving regulations, the importance
of regulatory transparency, predictability, stability and consistency is paramount;  the value of importlicensing commitments and the efforts to implement them could be easily clouded out by a shortness
of such elements either in regulations themselves or in their application.  The transitional review
mechanism could be useful for making those transitional efforts more efficient and productive, and it
is a pleasure for Japan to contribute to this process.
2. In this context, China is further invited to ta ke necessary steps to ensure regular and effective
application of public comments procedures, well-in-advance publication of laws and regulations,avoidance of abrupt regulatory change, clear demarcation of departmental responsibilities,
improvement in inter-departmental and central-provincial coordination and consistency etc.
3. In accordance with Section 18 of the Protocol on the Accession of the People’s Republic of
China, which states that "China shall provide releva nt information to each subsidiary body in advance
of the review" and in the spirit of cooperation to render the TRM process most efficient and effective,
Japan requests China to provide in advance of the meeting of the Committee on Import Licensing
responses and relevant information to the following questions and comments.
4. Questions
Publication and provision of information on the implementation of import quotas on automobiles
Concerns about the implementation of import quotas on automobiles
(i)The actual automobile imports registered $3.85 billion from April 2002 to March 2003, a period
subject to the quota for the first fiscal year, which was significantly lower than the import quota of
$7.94 billion.  We would like to know why the la rge disparity between these figures occurred.
                                                     
1 Pursuant to Section 18 of the Protocol of Acces sion of the People's Republic of China (WT/L/432).G/LIC/Q/CHN/6
Page 2
Furthermore, the customs-cleared imports in the second quarter in 2003 posted $1.21 billion,
as shown in the annex attached hereto.  Multiplying this figure four-fold amounts only to
$4.84 billion, which, again, results in a significant disparity from the nominal quota for 2003 of
$9.125 billion.  We are now concerned about the implementation of the quota as agreed, and would
like to know what measure the Government of China plans to take to improve this year’simplementation.
(ii) Annex 3 to China's Protocol of Accession st ates that items subject to the import quotas for
2003 are 44 under complete vehicles and only one item, bodies, under the auto parts.  We would like
the Government of China to confirm that there are no other items subject to the import quotas for
2003 than the foregoing ones.
Ensuring of the transparency of the current import quotas on automobiles
(iii)  In Paragraph 127 of the report of the Working Party
2, it is agreed that the allocation of quotas
and issuance of import licences shall be operated in conformity to simple and transparent procedures
pursuant to Article XIII of the GATT 1994 and the WTO Agreements including the Import LicensingProcedures.  Furthermore, Article 2(c) of Annex 1A-IV stipulates that China shall provide information
about the status of quota allocation and reallocation which meet WTO requirements under the
Agreement on Import Licensing Procedures and the report of the Working Party.
(iv) We would like the Government of China to inform us of the status of the quota allocation and
reallocation for 2003 with a view to ensuring a tran sparent system.  More specifically, we would like
the Government of China to present the actual quotas for 2003 by item and by country of origin.
(v)  Paragraph 130(c) of the report of the Working Party provides that quota holders that did not
import its full allocation would receive a proportional reduction in its quota allocation in thesubsequent year unless the quantity was returned for reallocation by 1 September.  In this connection,
we would like to know the number of the quota ho lders to whom the Government of China applied
this provision at the time of allocating the quota s for FY 2003 and the reduction in quota in total.
(vi)  We have the information that the Government of China controls the number of import
licences to be granted by category.  Especially, the number of import licences granted to cars of
2,000 cc or less displacement in the sedan category is small, which indicates that import licences arenot granted impartially, regardless of the engine displacement, and enough to meet the demand for
imported cars.  Is such information about the method for granting import licences true?
                                                     
2 WT/MIN(01)/3.G/LIC/Q/CHN/6
Page 3 US＄   2002/04 ～2003/03 2003/04 ～2003/06
SERIL NO HSNO DESCRIPTION OF PRODUCTS QUANTITY VALUE QUANTITY VALUE
104 84079090Spark-ignition reciprocation or rotary internal combustion
piston engines not elsewhere specified or included732,047 63,151,026   
105 84082010Compression-ignition internal combustion piston engines
(diesel or semi-diesel engines) for the prolusion of vehicles
of Chapter 87, with an output 132.39KW (180H.P.)or more15,701 154,919,387   
106 84082090Compression-ignition internal combustion piston engines
(diesel or semi-diesel engines) for the prolusion of vehiclesof Chapter 87, with an output less than 132.39KW (180H.P.)8,426 24,794,154   
24887012000 Road tractors for semi-trailers (truck tractors) 1,167 58,477,276     370 18,779,036
25087021020 Coaches for transport of passengers at aerodrome, diesel 5 1,316,211       - 0
25187021091 Buses with seats ≥ 30, diesel 217 13,817,371      11 709,571
25287021092 Buses with 20 ≤ seats < 30, diesel 44 1,706,040       - 0
25387021093 Buses with 10 ≤ seats < 20, diesel 60 1,847,813       4 100,032
25487029010 Other buses with seats ≥ 30, nes 198 7,619,848       5 223,844
25587029020 Other buses with 20 ≤ seats < 30, nes 427 15,139,704       9 407,153
25687029030 Other buses with 10 ≤ seats < 20, nes 3,136 56,826,506     586 10,018,962
25887032130 Saloon cars, ≤ 1000 cc, spark-igni reciprocatng 11 70,017      49 238,877
25987032190 Cars nes, ≤ 1000 cc, spark-igni reciprocatng 16 108,303       2 13,169
26087032230 Saloon cars, > 1000cc but ≤ 1500 cc, spark-igni recip 3,229 23,863,951     208 1,924,395
26187032240 Cross-country cars(4WD), > 1000cc but ≤ 1500cc, spark-igni recip 35 278,972      14 116,200
26287032250 Minibuses (seats ≤ 9), > 1000cc but ≤ 1500cc,spark-igni recip 17 197,960      16 224,163
26387032290 Cars nes, > 1000cc but ≤ 1500 cc,spark-igni recip 1 9,027       - 0
26487032314 Saloon cars, > 1500cc but ≤ 2500 cc,spark-igni recip 41,238 718,130,877  18,100 327,579,081
26587032315 Cross-country cars(4WD), > 1500cc but ≤ 2500 cc,spark-igni recip 13,368 230,131,057   2,557 45,121,683
26687032316 Minibuses(seats ≤ 9), > 1500cc but ≤ 2500 cc,spark-igni recip 12,343 225,249,091   1,643 30,063,158
26787032319 Cars nes, > 1500cc but ≤ 2500 cc,spark-igni recip 77 1,373,471      21 331,257
26887032334 Saloon cars > 2500cc but ≤ 3000 cc, spark-igni recip 12,658 348,838,424   5,549 193,179,046
26987032335 Cross-country cars(4WD), > 2500cc but ≤ 3000 cc, spark-igni recip 12,248 274,155,578   3,895 98,330,119G/LIC/Q/CHN/6
Page 4 US＄   2002/04 ～2003/03 2003/04 ～2003/06
SERIL NO HSNO DESCRIPTION OF PRODUCTS QUANTITY VALUE QUANTITY VALUE
27087032336 Minibuses(seats ≤ 9), > 2500cc but ≤ 3000 cc, spark-igni recip 612 13,400,082      20 474,748
27187032339 Cars nes, > 2500cc but ≤ 3000 cc, spark-igni recip 40 946,199      20 405,920
27287032430 Saloon cars, > 3000 cc, spark-igni recip 11,032 596,279,573   2,989 225,115,998
27387032440 Cross-country cars(4WD), > 3000 cc, spark-igni recip 17,249 543,176,293   3,507 129,015,620
27487032450 Minibuses (seats ≤ 9), > 3000 cc, spark-igni recip 1,267 156,932,429     157 3,677,773
27587032490 Cars nes, > 3000 cc, spark-igni recip 14 357,633       1 83,220
27687033130 Saloon cars, ≤ 500 cc, diesel 0 0       - 0
27787033140 Cross country cars(4WD), ≤ 1500cc, diesel 0 0       - 0
27887033150 Minibuses (seats ≤ 9), ≤ 1500cc, diesel 0 0       - 0
27987033190 Cars nes, ≤ 1500cc, diesel 0 0       - 0
28087033230 Saloon cars, > 1500cc but ≤ 2500 cc, diesel 12 231,691       3 71,450
281 87033240 Cross country cars(4WD), > 1500cc but ≤ 2500 cc, diesel 15 239,352       3 59,030
28287033250 Minibuses (seats ≤ 9), > 1500cc but ≤ 2500 cc,diesel 27 361,817       6 91,034
28387033290 Cars nes, > 1500cc but ≤ 2500 cc, diesel 7 174,005       - 0
28487033330 Saloon cars, > 2500 cc, diesel 9 201,500       1 14,042
28587033340 Cross country cars(4WD), > 2500 cc, diesel 49 1,286,217       8 123,772
28687033350 Minibuses (seats ≤ 9), > 2500 cc, diesel 20 257,064       2 18,843
28787033390 Cars nes, > 2500 cc, diesel 7 627,629       - 0
28887039000 Motor cars with seats ≤ 9, nes 19 350,746       2 67,770
29087042100 Trucks diesel, g.v.w. ≤ 5 t 24 401,646       5 25,000
29187042230 Trucks diesel, 5 t < g.v.w.< 14 t 441 4,741,865     100 2,014,267
29287042240 Trucks diesel, 14 t ≤ g.v.w. ≤ 20 t 276 6,800,272      55 574,722
29387042300 Trucks diesel, g.v.w. > 20 t 6,265 267,837,781   2,536 112,958,225
29487043100 Trucks spark-igni, g.v.w. ≤ 5 t 504 7,364,687      69 1,399,793
31887071000 Bodies for passenger carrying vehicles 10,628 21,433,610   5,082 10,343,960
  TOTAL 905,186 3,845,424,155 47,605 1,213,894,933
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