Out Now: The WTO's Trade Policy Review of China

♠ Posted by Emmanuel in , at 5/22/2008 12:05:00 AM
One of the things I don't like about looking up documents on the WTO site is that they're usually in Word instead of PDF format. Also, they're usually unavailable in a single document but are borken down by chapters. Unfortunately, both hold true for this important release, the WTO's biennial trade policy review of the PRC. Draw your own conclusions, but the findings and recommendations do not deviate much from Washington's line. First, here is the online summary:

The report highlights details about structural reforms, including in the financial and other sectors that have introduced more market-oriented measures aimed at achieving a more efficient allocation of resources. The report also notes that China has continued to be one of the largest recipients of inward FDI and has become a large provider of outward FDI, reflecting its increasing integration into the global economy.

However, the report identifies imbalances in the sources of growth in the economy, which is mainly driven by exports and investment rather than by consumption, a widening gap between savings and investment reflected in China’s growing current account surplus, and rising income inequality despite high GDP growth.

The WTO Secretariat report, along with a policy statement by the Government of China, will be the basis for the second TPR of China by the Trade Policy Review Body of the WTO on 21 and 23 May 2008.

Next, here are excerpts from a summary section about China's trade and investment policy network. By all means, do read the rest of the report if you're further interested:

The overall aim of China's trade policy, which has remained unchanged since its previous Trade Policy Review, is to accelerate the opening of its economy to the outside world to introduce foreign technology and know-how, develop foreign trade, and promote "sound economic development". China aims to further strengthen the multilateral trading system; at the same time, it has been intensifying its pursuit of bilateral/regional free-trade agreements with some of its trading partners.

China has continued to attach high priority to the multilateral trading system and has been participating in the Doha Development Agenda negotiations. China grants at least MFN treatment to all WTO Members except El Salvador and some territories of EC member states. China has been a party to one dispute as a complainant and nine disputes as a respondent since 2006.

During the period under Review, two free-trade agreements entered into force (the China – Chile FTA on 1 October 2006 and the China – Pakistan FTA on 1 July 2007). The Agreement on Trade in Services of the China-ASEAN Free Trade Area also entered into force on 1 July 2007. Four further agreements are being negotiated.

Although some aspects of China's trade policy regime remain opaque, it has continued to adopt measures to increase the level of transparency of its trade and trade-related policies, practices, and measures. Since its previous Review, additional measures, such as the Regulation on Open Government Information, have been introduced with a view to enhancing transparency. On 13 September 2007, the National Corruption Prevention Bureau was established. Since its previous Trade Policy Review, several new trade-related laws, including the Property Law, the Enterprise Income Tax Law, the Anti-Monopoly Law and the Law on Enterprise Bankruptcy, have been adopted.

China has recently been moving towards achieving a level playing field for foreign and domestic investors in China. Until the end of 2007, China had provided better than national treatment in its taxation policies for foreign-invested enterprises (FIEs); since 1 January 2008, a uniform enterprise income tax rate of 25% has been applied to all enterprises (including FIEs) in accordance with the Enterprise Income Tax Law, with some exceptions such as lower rates granted for investment in certain industries. It would appear that all tax incentives now apply equally to domestic firms and FIEs. Several regulations and rules have been introduced or amended with a view to further liberalizing foreign direct investment and establishing a more rules-based and predictable business environment for foreign investors.