TRADE POLICY REVIEW

REPORT BY THE SECRETARIAT

China

Revision

This report, prepared for the ninth Trade Policy Review of China, has been drawn up by the WTO Secretariat on its own responsibility. The Secretariat has, as required by the Agreement establishing the Trade Policy Review Mechanism (Annex 3 of the Marrakesh Agreement Establishing the World Trade Organization), sought clarification from China on its trade policies and practices.

Any technical questions arising from this report may be addressed to Mr Masahiro Hayafuji (tel. 022 739 5873), Mr Arne Klau (tel. 022 739 5706), and Mr Michael Kolie (tel. 022 739 5931).

Document _WT/TPR/G/458 contains the policy statement submitted by China.

CONTENTS

SUMMARY. 9

1   ECONOMIC ENVIRONMENT. 15

1.1   Main features of the economy. 15

1.2   Recent economic developments. 16

1.2.1   Economic growth. 16

1.2.2   Monetary and exchange rate policy. 18

1.2.3   Fiscal policy. 19

1.2.4   Structural measures. 20

1.2.5   Balance of payments. 20

1.3   Developments in trade and investment 21

1.3.1   Trends and patterns in merchandise and services trade. 21

1.3.2   Trends and patterns in FDI 24

2   TRADE AND INVESTMENT REGIMES. 28

2.1   General framework. 28

2.2   Trade policy formulation and objectives. 30

2.3   Trade agreements and arrangements. 31

2.3.1   WTO. 31

2.3.2   Regional and preferential agreements. 32

2.3.2.1   Reciprocal arrangements. 32

2.3.2.2   Unilateral preferences. 33

2.3.3   Other agreements and arrangements. 34

2.4   Investment regime. 34

2.4.1   Regulatory framework and market access. 34

2.4.2   Examination and approval procedures. 37

2.4.3   Incentives for foreign direct investments. 37

2.4.4   Bilateral investment and tax agreements. 39

3   TRADE POLICIES AND PRACTICES BY MEASURE. 40

3.1   Measures directly affecting imports. 40

3.1.1   Customs procedures, valuation, and requirements. 40

3.1.1.1   Preshipment inspection. 44

3.1.1.2   Customs valuation. 44

3.1.1.3   Trade facilitation. 45

3.1.2   Rules of origin. 46

3.1.3   Tariffs. 46

3.1.3.1   Applied MFN tariffs. 46

3.1.3.2   Tariff rate quotas (TRQs) 49

3.1.3.3   Bound tariffs. 49

3.1.3.4   Preferential rates. 49

3.1.3.5   Tariff exemptions or concessions. 50

3.1.4   Other charges affecting imports. 51

3.1.4.1   Value added tax (VAT) 51

3.1.4.2   Consumption (excise) tax. 52

3.1.4.3   Vehicle Purchase Tax. 54

3.1.5   Import prohibitions, restrictions, and licensing. 54

3.1.5.1   Import prohibitions. 55

3.1.5.2   Import licensing requirements. 56

3.1.5.2.1   Automatic import licensing requirements. 57

3.1.5.2.2   Non-automatic import licensing requirements. 57

3.1.6   Anti-dumping, countervailing, and safeguard measures. 58

3.1.6.1   Anti-dumping measures. 58

3.1.6.2   Countervailing measures. 60

3.1.6.3   Safeguard measures. 60

3.2   Measures directly affecting exports. 60

3.2.1   Customs procedures and requirements. 60

3.2.2   Taxes, charges, and levies. 61

3.2.3   Export prohibitions, restrictions, and licensing. 62

3.2.4   Export support and promotion. 66

3.2.5   Export finance, insurance, and guarantees. 68

3.3   Measures affecting production and trade. 68

3.3.1   Incentives. 68

3.3.2   Standards and other technical requirements. 73

3.3.2.1   Overview and trend. 73

3.3.2.2   Standards and technical regulations. 74

3.3.2.3   Product certification. 75

3.3.2.4   Labelling and packaging. 76

3.3.3   Sanitary and phytosanitary requirements. 77

3.3.3.1   General framework. 77

3.3.3.2   Safety standards for food, animals, plants, and their products. 78

3.3.3.3   SPS measures. 79

3.3.3.4   Inspection and quarantine. 81

3.3.4   Competition policy and price controls. 82

3.3.4.1   Competition policy. 82

3.3.4.1.1   Legislative and institutional framework. 82

3.3.4.1.2   Main legislative amendments. 82

3.3.4.1.3   Enforcement 84

3.3.4.1.4   International cooperation. 85

3.3.4.2   Price controls. 85

3.3.5   State trading and state-owned enterprises. 87

3.3.6   Government procurement 89

3.3.6.1   Overview. 89

3.3.6.2   Legal and institutional framework. 90

3.3.6.2.1   Existing framework and latest developments. 90

3.3.6.2.2   Ongoing revisions of the Government Procurement Law and the Bid Invitation and Bidding Law. 92

3.3.6.3   Procurement methods and e-procurement 93

3.3.6.4   Domestic review procedure. 93

3.3.6.5   Accession to the GPA 2012 and other international cooperation. 94

3.3.7   Intellectual property rights. 94

3.3.7.1   Overview. 94

3.3.7.2   Institutional reforms and IP-related policies. 95

3.3.7.3   International context 95

3.3.7.4   Copyright and related rights. 96

3.3.7.5   Industrial property. 97

3.3.7.5.1   Trademarks. 97

3.3.7.5.2   Geographical indications. 98

3.3.7.5.3   Patents. 98

3.3.7.5.4   Utility models. 101

3.3.7.5.5   Industrial designs. 101

3.3.7.5.6   Layout-designs of integrated circuits. 101

3.3.7.5.7   New plant varieties. 102

3.3.7.5.8   Undisclosed information and trade secrets. 102

3.3.7.6   Enforcement 102

3.3.7.6.1   Overview. 102

3.3.7.6.2   Administrative procedures. 103

3.3.7.6.3   Judicial measures. 104

3.3.7.6.4   Customs measures. 104

3.3.7.6.5   Criminal procedures. 104

4   TRADE POLICIES BY SECTOR. 106

4.1   Agriculture, forestry, and fisheries. 106

4.1.1   Agriculture. 106

4.1.1.1   Features of trade in agriculture. 106

4.1.1.2   Legal and institutional framework. 107

4.1.1.3   Policy objectives and reforms. 110

4.1.1.4   Policy instruments. 111

4.1.1.4.1   Border measures. 111

4.1.1.4.2   Measures affecting exports. 113

4.1.1.4.3   Internal measures. 114

4.1.1.4.3.1   Support measures. 114

4.1.1.4.3.2   Price controls and market price support systems. 116

4.1.1.4.3.3   Other measures. 116

4.1.1.4.4   Levels of support 118

4.1.2   Forestry. 118

4.1.3   Fisheries. 118

4.1.3.1   Features and market developments. 118

4.1.3.2   Legal, institutional, and policy framework. 120

4.1.3.3   Government support to the fisheries sector 121

4.1.3.4   Fisheries conservation measures. 122

4.2   Mining and energy. 122

4.2.1   Mining. 122

4.2.2   Energy. 126

4.2.2.1   Overview and energy mix. 126

4.2.2.2   Electricity. 128

4.3   Manufacturing. 131

4.3.1   Main features and recent developments. 131

4.3.2   Selected subsectors. 133

4.3.2.1   Automobiles, aeronautics, and components. 133

4.3.2.2   Machinery, equipment, electronics, and related industries. 134

4.3.2.3   Iron, steel, shipbuilding. 135

4.4   Services. 135

4.4.1   Telecommunications services. 135

4.4.1.1   Overview. 135

4.4.1.2   Policy and regulatory framework. 137

4.4.1.3   Developments in digital economy. 138

4.4.1.4   Developments in cybersecurity. 139

4.4.2   Financial services. 141

4.4.2.1   Sectoral performance and policy objectives. 141

4.4.2.1.1   Sectoral performance. 141

4.4.2.1.2   Policy objectives. 144

4.4.2.2   Reform of the financial supervision framework. 144

4.4.2.3   Other regulatory developments. 146

4.4.2.3.1   Developments in the banking industry. 146

4.4.2.3.2   Developments in the insurance industry. 148

4.4.2.3.3   Developments in pension funds. 148

4.4.2.3.4   Developments in securities industries. 149

4.4.2.3.4.1   Stock markets. 149

4.4.2.3.4.2   Bond markets. 150

4.4.2.3.5   Developments in fintech. 150

4.4.2.3.6   Green finance. 151

4.4.3   Transport services. 152

4.4.3.1   Air transport 152

4.4.3.2   Maritime transport 154

5   APPENDIX TABLES. 156

CHARTS

Chart 1.1 Direction of merchandise trade, 2020 and 2023. 22

Chart 1.2 Product composition of merchandise trade by main HS sections, 2020 and 2023. 23

Chart 1.3 Foreign direct investment, 2002-22. 25

Chart 2.1 Number of restrictive measures on access to foreign investment, 2017-21. 36

Chart 2.2 Number of encouraged activities, 2017, 2019, 2020, and 2022. 38

Chart 3.1 Distribution of MFN applied tariff rates, 2017, 2021, and 2024. 48

Chart 3.2 Average applied tariff rates, by HS section, 2021 and 2024. 48

Chart 3.3 Anti-dumping measures in force, by product, 31 December 2023. 59

Chart 3.4 Fees related to exports and imports of IP, 2013-22. 95

Chart 3.5 Patent applications, 2013-22. 100

Chart 3.6 Patent grants, 2013-22. 100

Chart 3.7 Patent grants by top fields of technology, 2022. 101

Chart 4.1 Total consumption of energy and its composition, 2018 and 2022. 128

Chart 4.2 Structure of electricity production and consumption, 2021. 129

Chart 4.3 Trade in telecommunications, computer and information, 2016-22. 136

Chart 4.4 Trade in financial services, 2016-23. 142

Chart 4.5 China's former financial supervision framework. 145

Chart 4.6 China's current financial supervision framework. 145

TABLES

Table 1.1 Selected macroeconomic indicators, 2018-23. 16

Table 1.2 GDP by sector, 2018-23. 18

Table 1.3 Balance of payments, 2018-23. 20

Table 1.4 International trade in services by sector, 2018-23. 24

Table 1.5 Inward foreign direct investment by partner, 2018-22. 25

Table 1.6 Inward foreign direct investment by sector, 2018-22. 26

Table 1.7 Outward foreign direct investment by partner, 2018-22. 26

Table 1.8 Outward foreign direct investment by sector, 2018-22. 27

Table 3.1 China's legislation related to customs procedures, 2024. 40

Table 3.2 Tariff structure, 2017, 2021, and 2024. 47

Table 3.3 Summary analysis of the Chinese preferential tariff, 2024. 49

Table 3.4 Consumption tax, June 2023. 52

Table 3.5 Tax revenue, 2020-22. 53

Table 3.6 Import prohibitions notified to the WTO for the 2020-24 period. 55

Table 3.7 Anti-dumping investigations and measures, January 2021-December 2023. 58

Table 3.8 Anti-dumping definitive measures in force, by trading partner,
January 2021-June 2023. 59

Table 3.9 Countervailing investigations and measures, 2021-23. 60

Table 3.10 Export duties by type and HS chapter, 2024. 62

Table 3.11 Products subject to export quotas and licensing (including a licence management system for the export of dual-use items), March 2024. 64

Table 3.12 Public support based on the Wind database, 2018-22. 70

Table 3.13 Public support based on the CSMAR database, 2018-22. 70

Table 3.14 Main national investment funds in China (including GIFs/GGFs) 71

Table 3.15 Major subnational funds (including GIFs/GGFs) 72

Table 3.16 Policy documents managing GIFs/GGFs. 73

Table 3.17 Standards approved, 2020-23. 75

Table 3.18 SPS-related STCs raised against China, April 2021–February 2024. 80

Table 3.19 Competition enforcement statistics, 2021-23. 84

Table 3.20 Products and services subject to price controls by the Central Government, 2023  86

Table 3.21 Products and services subject to price controls by local governments, 2023. 87

Table 3.22 SOEs in China's economy, 2017-22. 88

Table 3.23 China's 10 largest SOEs, 2023. 89

Table 3.24 Value of government procurement and share of GDP, 2020-22. 90

Table 3.25 List of government procurement-related measures issued during the period under review. 91

Table 3.26 Value of contracts awarded under different government procurement methods at the central and local government levels, 2020-22. 93

Table 3.27 Procurement-related complaints at the central and local government levels,
2020-22. 94

Table 3.28 Membership in international IPR Conventions, as at March 2024. 96

Table 3.29 Copyright collective management organizations – fees and membership. 97

Table 3.30 Trademark applications and registrations, 2020-22. 98

Table 3.31 Utility models – Applications and registrations, 2020-22. 101

Table 3.32 Industrial designs – Applications and registrations, 2020-22. 101

Table 3.33 IP enforcement, 2021-23. 103

Table 4.1 Principal indicators for agriculture, animal husbandry, forestry, and fisheries,
2018–23. 106

Table 4.2 Agricultural trade, 2018–23. 106

Table 4.3 Main agriculture-related laws, April 2024. 109

Table 4.4 TRQs on agricultural products and their utilization, 2020-22. 112

Table 4.5 Agricultural products subject to export quotas and licensing, March 2024. 113

Table 4.6 Export quotas for maize, rice, and wheat flour, 2020-22. 114

Table 4.7 Central government tax incentives provided to the agriculture sector, 2023. 114

Table 4.8 Central government fiscal appropriations for the agriculture sector, 2023. 115

Table 4.9 Minimum procurement prices, 2020-23. 116

Table 4.10 Distribution of the financing of the agricultural insurance scheme between central and local authorities. 117

Table 4.11 Fisheries indicators, 2020–22. 119

Table 4.12 Fish and fish products trade, 2018–23. 119

Table 4.13 Main minerals in China, 2021. 122

Table 4.14 Trade in selected minerals, 2018-22. 124

Table 4.15 China energy production and consumption 2018-23. 126

Table 4.16 China's key trading partners for crude oil imports, 2018-22. 126

Table 4.17 Trade in manufactures, 2018-23. 131

Table 4.18 Trade in motor vehicles, 2017-22. 134

Table 4.19 Telecom prices as a percentage of GNI per capita, 2022. 137

Table 4.20 Assets of the financial institutions in China, 2020-23. 142

Table 4.21 Data on bank loans to the real estate sector, and green loans, 2021-23. 143

Table 4.22 Five-category risk classification criteria. 147

Table 4.23 China's green finance pilot zones. 152

Table 4.24 Ship tonnage tax rates, 2024. 155

BOXES

Box 2.1 Changes in 2022 to the National and PFTZ Negative Lists. 36

Box 3.1 GACC trade facilitation measures. 45

Box 4.1 Cotton production in China. 108

Box 4.2 Selected indicators of the telecommunications sector, 2022. 137

APPENDIX TABLES

Table A1.1 China's merchandise exports by destination, 2018-23. 156

Table A1.2 China's merchandise imports by origin, 2018-23. 157

Table A1.3 Merchandise exports by HS section and major HS chapter/heading, 2018-23. 158

Table A1.4 Merchandise imports by HS section and major HS chapter/heading, 2018-23. 159

Table A1.5 Merchandise trade of intermediate goods (IG) by category, 2013-23. 160

Table A2.1 Main notifications under WTO Agreements, 13 April 2021–15 January 2024. 161

Table A2.2 WTO dispute settlement cases involving China, 13 April 2021–15 January 2024. 163

Table A3.1 MFN applied tariff summary, 2024. 164

Table A3.2 Measures applied to imports originating in specific trading partner(s) based on the announcements/decrees of the GACC and other relevant ministries and agencies, March 2024. 165

Table A4.1 Central government support to fisheries as notified to the WTO. 169

Table A4.2 Local government support to fisheries as notified to the WTO. 171