 
  WORLD TRADE  
ORGANIZATION  G/C/W/505 
25 November 2004 
 (04-5128) 
Council for Trade in Goods Original:   English 
  
 
TRANSITIONAL REVIEW MECHANISM UNDER PARAGRAPH 18 OF 
THE PROTOCOL ON THE ACCESSION OF THE PEOPLE'S REPUBLIC OF CHINA 
 
Information required by Annex 1A
 
 
Communication from the People's Republic of China  
   The following communication, dated 24 November 2004, is being circulated at the request of 
the Delegation of the People's Republic of China. 
 
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II.  ECONOMIC POLICIES 
 
2.1  Non-Discrimination 
 (a) the repeal and cessation of all WTO inconsiste nt laws, regulations and other measures 
on national treatment. 
 
 In 2004, China advanced further the trade-relate d legislative work, in which consistency with 
the national treatment principle of the WTO was highly emphasized.  As the fundamental law regulating China's foreign trade, the revised Fore ign Trade Law of the People's Republic of China, 
coming into force on 1 July 2004, explicitly stipulates  in Article 6 that the national treatment principle 
shall be observed.  During the three years after ac cession, China has been engaging in bringing into 
consistency with the WTO national treatment prin ciple the laws, regulations and administrative 
measures that are related to trade in goods, trade in  services and trade-related aspects of intellectual 
property rights, including those discussed in Ch ina's accession negotiations, through enactment, 
amendment or repeal.  The national treatment prin ciple is now well observed in the legislation of 
China relating to trade.  (b) the repeal or modification to provide full GA TT national treatment in respect of laws, 
regulations and other measures applying to in ternal sale, offering for sale, purchase, 
transportation, distribution or use of:  a fter sale service, pharmaceutical products, 
cigarettes, spirits, chemicals and boil er and pressure vessels (for pharmaceutical 
products, chemicals and spirits there is a reser vation of the right to use a transitional 
period of one year from the date of accessi on in order to amend or repeal relevant 
legislation) 
 
 The repeal or modification in respect of the administrative measures relating to after sale service, pharmaceutical products, cigarettes, boile r and pressure vessels products, in which full WTO 
national treatment was embodied, were submitted to  the Council for Trade in Goods in Annex 1A 
information of the past two years. G/C/W/505 
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  For chemicals, the  Decision on Abolishment of the First Batch of Items subject to 
Administrative Examination and Approval,  issued by the State Council on 1 November 2002, included 
the Environmental Administration Registration of Initial Imports of Chemical Products , which was a 
concern of many WTO Members during the negotiations on China's accession.  After that, Provisions 
on Environmental Administration of New Chemical Products was drafted by the State Environment 
Protection Administration based on broad public co mments and came into force on 15 October 2003.  
This new administrative measure takes fully into a ccount the international practices in environmental 
administration of new chemical products, and is in line with the requirement of WTO national 
treatment principle.  
 For spirits, the amendment of the Administrative Measures on Imported Spirits in the 
Domestic Market  is still going on due to the many aspect s involved in the issue and the huge amount 
of domestic coordination work, and the WTO national treatment principle is fully taken into account 
in the process. 
 
IV.  POLICIES AFFECTING TRADE IN GOODS 
 
4.5  Export Restrictions  (a)   any restrictions on exports through non-au tomatic licensing or other means justified by 
specific product under the WTO Agreement or the Protocol.  
  
 China maintains export administration of a small number of products for the purposes of protecting public interest, avoiding shortage in domestic supply, conserving the exhaustible natural 
resources, or undertaking obligations under interna tional treaties or intergovernmental agreements. 
This is in conformity with Article XX of GATT 1994. 
 
 In 2004, commodities subject to export admini stration include:  live cattle (to Hong Kong, 
China and Macau, China), live swine (to Hong K ong, China and Macau, China), fowls (to Hong 
Kong, China and Macau China), beef, pork, chicken m eat, tea, wheat, maize, rice, cotton, licorice and 
its products, Chinese iris and its  products, bauxite, light (dead)  burned magnesium, talc lump 
(powder), fluorspar lump (powder), rare earth, co al, coke, crude oil, processed oil, paraffin wax, 
artificial corundum, tungsten and its  products, heavy water, silicon  carbide, sawn timber, cocoon and 
silk products, silver, platinum (t hrough processing trade only), zinc and zinc alloy, tin and tin alloy, 
antimony and antimony products, motorcycle and motorc ycle engine, electric fan, bicycle, computers, 
substances depleting oz onosphere, chemicals under supervision and control, chemicals used for 
narcotics production.  Many of the products lis ted above obtain export licensing automatically.  
Besides, China also maintains export prohibition on the following products: horn-cores and tiger 
bones, bezoars, musk, certain chem icals used for narcotics production,  certain substances depleting 
ozonosphere, wood, wood charcoal, and platinum.  China will in a couple of days time submit to 
WTO a full notification of quantitative restrictions  of the year 2004, which will reflect detailed 
information on these export administrative measures,  including quota volume (if applicable).  
 4.9  State Trading Entities  (a) progressive abolishment of state trading in respect of silk measures, increasing and 
extending trading rights, granting the right to  trade to all individuals no later than 1 
January 2005 
 
 With regard to the administrative measures for cocoon and silk products, the Ministry of 
Commerce (MOFCOM) and the General Administration of Customs on 1 November 2004 jointly issued Announcement No. 64 of 2004, abolishing the state trading of cocoon and silk products from  G/C/W/505 
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 1 January 2005 as well as export quota and licensing for 7 cocoon and silk products in eight-digit HS 
code.   As regards the trading rights, the 8
th Session of the Standing Committee of the 10th National 
People's Congress adopted the amendment of the  Foreign Trade Law of the People's Republic of 
China on 4 April 2004, which stipulated the liberaliza tion of the availability of the rights to import 
and export, i.e. the trading rights.  On 25 June 2004, MOFCOM issued the Rules for Registration of 
Foreign Trade Operators in its Decree No. 14 of 2004 which was drafted based on broad public 
comments.  The Rules  came into force on 1 July 2004 and the provisions in the Foreign Trade Law of 
the People's Republic of China are implemented. 
 
(b)   access to supplies of raw materials in the te xtiles sector at conditions no less favorable 
than for domestic users, and not adversely aff ected access to supplies of raw materials as 
enjoyed under existing arrangements  
    
 Access to supplies of raw materials in textile  sector for foreign user s remains in the same 
conditions as for domestic users, and has not been adversely affected in this area.  
 
(c)   progressive increases in access by non state tr ading entities to trade in fertilizer and oil 
and the filling of quantities available for import by non state trading entities  
  
 After WTO accession, China implemented a registration system for non-state trading 
enterprises for importation of crude oil, processed oil and chemical fertiliz ers for the purpose of 
expanding the market access for non-state trading enterprises of these products.  On 1 August 2002, 
the former Ministry of Foreign Trade and Econ omic Cooperation (MOFTEC) in its Announcement 
No. 19 of 2002 published the cond itions, materials needed and pro cedures for application for the 
qualification registration of non-state trading enterprises for importation of crude oil, processed oil 
and chemical fertilizers.  After that, in its Announcement No. 50 and No. 51 of 2002, MOFTEC 
published two batches of lists of non-state tradi ng enterprises having registered for importation of 
crude oil, processed oil and chemic al fertilizers.  On 13 August 2004,  in its Announcement No. 46 of 
2004, MOFCOM published the third batch of the list of non-state trading enterprises having registered 
for importation of crude oil and processed oil.  On 26 August 2004, MOFCOM further issued 
Announcement No. 52 of 2004, publishing another five  non-state trading enterprises for importation 
of chemical fertilizers. Compared with the situa tion at the time of China’s accession, the number of 
non-state trading enterprises for importation of crud e oil, processed oil and chemical fertilizers has 
increased substantially.   
 According to the former State Economic  and Trade Commission (SETC) Announcement 
No. 50 and No. 51 of 2002, the volume permitted for importation of crude oil in 2003 by non-state 
trading enterprise was 9,520,000 tons, and the volum e permitted for importation of processed oil in 
2003 by non-state trading enterprise was 5,300,000 tons.  According to SETC Announcement No. 73 
of 2002, the 2003 TRQ volume for importation of ch emical fertilizers by non-state trading enterprises 
were as follows:  urea 180,000 tons, DAP 1,190,000 tons and NPK 600,000 tons.  
 
 According to MOFCOM Announcement No. 38 and No. 39 of 2003, the volume permitted for 
importation of crude oil in 2004 by non-state trad ing enterprises was 10,950,000 tons, and the volume 
permitted for importation of processed oil in 2004 by non-state trading enterprises was 6,100,000 
tons.  According to MOFCOM Announcement No. 55 of 2003, the 2004 TRQ volume for importation 
of chemical fertilizers by non-state trading ente rprises were as follows:  urea 230,000 tons, DAP 
1,560,000 tons and NPK 780,000 tons. 
 According to MOFCOM Announcement No. 58 of 2004, the volume permitted for 
importation of crude oil in 2005 by non-state trad ing enterprises is 12,600,000 tons, and the volume G/C/W/505 
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 permitted for importation of processed oil in 2005 by  non-state trading enterprises is 7,000,000 tons.  
According to MOFCOM Announcement No. 62 of 2004, the 2005 TRQ volume for importation of chemical fertilizers by non-state trading enterprises are as follows:  urea 280,000 tons, DAP 1,970,000 tons and NPK 990,000 tons.  Therefore the volum e available for importation of these products by 
non-state trading enterprises has been on a constant increase.  
 
 In 2003 and 2004, the volume permitted fo r importation of crude oil, processed oil and 
chemical fertilizers by non-state trading enterprises we re fully allocated.  However, as holders of the 
volume permitted for importation by non-state trading enterprises may also consign state trading enterprises to import, it is technically not feasible at this stage for the Cu stoms authorities to have 
statistics on the imports of the non-state trading enterprises and therefore the import performance by 
non-state trading enterprises is difficult to be confirmed with Customs statistics.  
4.10  Government Procurement 
 
(a) Laws, regulations and procedures 
 
 Law of the People's Republic of China on Government Procurement  took effect on 
1 January 2003, and the drafting of implemen ting regulations of the law is under way. 
 
(b) Procurement in a transparent manner and application   
  
 To ensure the transparency in government procurement, the competent authorities of the 
Chinese Government has taken a series of measures as follows:  (i) The scope of information on government proc urement to be publishe d is expanded.  At 
present, information on laws, regulations and administrative measures relating to government 
procurement, procurement opportunitie s, results of the contract aw ard and advance examination on 
qualification of suppliers et c. should be published in the government procurement website of China 
(www.ccpg.gov.cn)
, China Financial and Economic News  and  China Government Procurement 
magazine, which are designated by the Chinese Government.  
(ii) All the procurement projects open to fore ign suppliers are required to be implemented 
through tendering to provide foreign su ppliers with equal opportunities.  
 (iii) In the process of drafting regulations a nd administrative measures, public opinions and 
comments on the drafts are required to be solicited. 
 
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