STATE TRADING

Questions Posed By Australia regarding the notifications of CHINA^[1]

The following communication, dated 18 April 2016, is being circulated at the request of the Delegation of Australia.

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Australia asks the following questions in relation to China's latest notifications:

AGRICULTURE

a)       On page 9, under Reply A-C, China states that for a number of commodities, that a portion of the respective tariff-rate quota (TRQ) may be allocated to entities other than STEs. Can China please identify specifically what are the current conditions non-STEs must follow to maintain importer access to the TRQs for wheat, cotton and sugar?

b)      On page 9, under Reply D, China states that "State trading enterprises are operated following market mechanism, with no government interference. State trading enterprises determine by themselves the import level of wheat, maize, rice, sugar, cotton and chemical fertilizer according to the quantity of TRQ that they have obtained, and taking into account the domestic supply and the prices of both domestic and international markets among other factors." Can China please explain how the allocation is determined between STEs, when more than one STE is awarded an importation TRQ allocation in any given year?

c)       Regarding Table I: Statistical Information Imports, can China please clarify why the data relating to "Import Quantity of State Trading Enterprises", "Average representative domestic sales price", "Average representative domestic sales price" and "Mark-up" is not available? Will China be in a position to provide this data in future notifications?

INDUSTRIAL PRODUCTS

a)       China's notification advises that just five STEs can export coal, and that no annual review of qualification is required. Further, quota license administration applies to the export of coal, with exports determined by quota size, market supply and demand, prices and other factors." On numerous occasions, the notification also states "State trading enterprises are operated following market mechanism, with no government interference."

b)      Can China please explain why it restricts the export of coal via a system of STEs and quota licenses? Given that it does have export quotas, can China provide details on how it determines the size of quota for each of the five existing STEs? Can China also advise why, under this system, the total quantity of coal exported from China has fallen in every year of data provided between 2003 and 2014 - from 93.9 million tons to just 5.6 million tons – a period in which domestic production more than doubled? Does China have any plans to review how the system for coal exports operates?

c)       With regard to Table II, can China please advise why it is unable to provide any information on coal pricing - whether procurement prices, domestic sales prices or export prices? Will China be able to provide such information in the future?

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