. /.WORLD TRADE
ORGANIZATIONG/TRIMS/W/32
24 September 2003
(03-5052)
Committee on Trade-Related Investment Measures Original:  English
COMMUNICATION FROM THE UNITED STATES
The following communication, dated 23 September 2003, has been received from the
Permanent Delegation of the United States.
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TRANSITIONAL REVIEW MECHANISM PURSUANT TO PARAGRAPH 18
OF THE PROTOCOL ON THE ACCESSION OF
THE PEOPLE'S REPUBLIC OF CHINA ("CHINA")
Questions from the United States to China concerning
Trade-Related Investment Measures
1. In paragraph 204 of the Working Party Report, China committed to amend its 1994 Industrial
Policy for the Automotive Sector upon accession to make it compatible with WTO rules and
principles.  China also specifically agreed to elim inate export performance, local content and foreign
exchange balancing requirements from its laws, regulations and other measures, and not to enforce the
terms of any contracts imposing these requirements.  In addition, China agreed that it would no longer
condition importation or investment approvals on these requirements or on requirements such as
technology transfer and offsets.  Previously, China explained that it had revised the Law on Chinese-
Foreign Equity Joint Ventures, the Law on Chinese-Foreign Contractual Joint Ventures and the Lawon Wholly Foreign-Owned Enterprises to eliminate and cease the enforcement of  requirements
related to foreign exchange balancing, local cont ent, export performance, compulsory technology
transfer, etc., and that these revisions superseded conflicting provisions in the 1994 Industrial Policy
for the Automotive Sector.  China also indicated that it was conducting in-depth research and study
with a view to issuing a new automobile industrial policy and that it would issue new Guidelines for
Current Development of Automobile Industry .
Question 1
Please describe the status of that effort.
Question 2
Does China intend to circulate a draft of the Guidelines for Current Development of
Automobile Industry  for public comment before they are implemented, in accordance with
China’s obligations under Section 2(C)2 of China’s Protocol of Accession?G/TRIMS/W/32
Page 2
2. In paragraph 205 of the Working Party Report, China committed to completely remove all
restrictions on the categories, types or models of motor vehicles permitted for production, thereby
ensuring that motor vehicle producers will be free to choose the categories, types and models they
produced, within two years of China’s accession, or by 11 December 2003.
Question 3
Please describe the legal steps that China ha s taken, or plans to take, to implement this
commitment.
3. In paragraph 206 of the Working Party Report, China committed to raise the limit within
which investments in motor vehicle manufacturing could be approved at the provincial level onlyfrom the then-current level of US$30 million to US$60 million one year after China’s accession
(11 December 2002), US$90 million two years af ter China’s accession (11 December 2003) and
US$150 million four years after China’s accession (11 December 2005).  During the 2002
Transitional Review Mechanism, China noted that it was in the process of considering and
formulating relevant regulations.
Question 4
Please describe the legal steps that Chin a has taken to implement these commitments.
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