STATE TRADING

Replies to QUESTIONS POSED BY THE EUROPEAN UNION[1]
REGARDING the notification of China^[2]

The following communication, dated and received on 13 November 2024, is being circulated at the request of the delegation of China.

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China thanks the European Union for its questions. The answers to the questions are as follows：

In point III, Description of the functioning of the State Trading Enterprises, it is written that:

In the products of which the export is currently subject to state trading administration, i.e. rice, maize, cotton, coal, crude oil, tungsten, antimony and silver listed in Annex 2A2 of Protocol on the Accession of the People's Republic of China as well as tobacco, rice, maize, cotton, coal, crude oil and tobacco can only be exported by state trading enterprises, and no annual review of qualification of state trading enterprises is needed. Processed oil could be exported by non-state trading enterprises.

[…]

Quota license administration applies to the export of rice, maize, cotton, coal, crude oil, and processed oil (excluding lubricating oil, grease, lubricating base oil). Each state trading enterprise determines its export level within its licensed quota, according to market supply and demand, as well as prices and other factors. State trading enterprises which import/export tobacco determine their import/export level through commercial negotiations taking into account the supply capacity of domestic and international markets as well as the acceptability of enterprises.

[…]

State trading enterprises are operated following market mechanism. Export prices of state trading enterprises are determined by such enterprises themselves according to the prices of international market and the supply in domestic market, and by referring to the cost prices plus circulation expenses such as fees for warehousing, transportation, bank interests and inspection, etc.

In point IV, Statistical information, China did not provide any data related to the quantities exported by the STEs of the products listed in points II and III of the notification. Moreover, China did not provide any information on the average procurement price and the average domestic price for corn and rice.

In its DS:1 notification _G/AG/N/CHN/65 for Calendar year 2020, China has reported administered price for rice (in supporting table DS:5):

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Question 1:

Could China please confirm whether the administered prices reported in DS:1 notification could be also considered for the purposes of the STEs statistical tables? If so, China should update its STE notification accordingly. If not, please explain the difference of the applicable prices.

Reply:

Administered prices reported in DS:1 notification are the prices that have been set by the government to purchase the rice or wheat from the farmers in the domestic market. They mainly reflect the productions costs of corn or wheat, and they are not the prices at which state trading enterprises purchase or sell.

Question 2:

Could China please clarify why China is not in a position to provide the quantities of corn and rice exported by the STEs? Which are the exporting destinations of those products?

Reply:

China currently does not have statistics on STEs exporting of the above-mentioned products.

Question 3:

Could China please clarify if China exported any wheat for the period covered by this notification?

Reply:

Wheat is not a product of which the export is subject to the state trading administration, as listed in the annex 2A2 of the Protocol on the Accession of the People’s Republic of China. The total export volumes of wheat from year 2021 to 2023 were respectively 83,877 tons, 146,358 tons, and 204,975 tons.

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