WT/TPR/S/300/Rev.1 7 October 2014 (14-5666) Page: 1/197 Trade Policy Review Body TRADE POLICY REVIEW REPORT BY THE SECRETARIAT CHINA Revision This report, prepared for the fifth 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 Angelo Silvy (tel: 022 739 5249); Mrs. Eugenia Lizano (tel: 022 739 6578); Mr Pierre Latrille (Services section) (tel: 022 739 5266), and Mr Nelnan Koumtingue (tel: 022 739 6252). Document WT/TPR/G/300 contains the policy statement submitted by China. Note: This report was drafted in English. WT/TPR/S/300/Rev.1 • China - 2 - CONTENTS SUMMARY ........................................................................................................................ 9 1 ECONOMIC ENVIRONMENT ........................................................................................ 14 1.1 Recent Economic Developments.................................................................................. 14 1.1.1 Real economy ....................................................................................................... 14 1.1.2 Fiscal policy and structural reform ............................................................................ 17 1.1.2.1 Fiscal policy and related issues .............................................................................. 17 1.1.2.2 Structural reform measures .................................................................................. 19 1.1.3 Monetary and exchange rate policy .......................................................................... 22 1.1.3.1 Monetary policy .................................................................................................. 22 1.1.3.2 Exchange rate policy ........................................................................................... 24 1.1.4 Balance of payments .............................................................................................. 25 1.2 Developments in Trade and Foreign Direct Investment ................................................... 28 1.2.1 Merchandise trade ................................................................................................. 28 1.2.2 Trade in services ................................................................................................... 30 1.2.3 Foreign direct investment........................................................................................ 31 1.2.4 Outlook ................................................................................................................ 33 2 TRADE AND INVESTMENT REGIME ............................................................................ 35 2.1 Institutional and Legal Framework .............................................................................. 35 2.2 Trade Policy Framework and Objectives ....................................................................... 37 2.2.1 Institutional framework .......................................................................................... 37 2.2.2 Trade policy objectives ........................................................................................... 38 2.3 Participation in the World Trade Organization................................................................ 39 2.4 Regional Arrangements ............................................................................................. 40 2.4.1 Reciprocal agreements ........................................................................................... 40 2.4.2 Unilateral preferences ............................................................................................ 42 2.5 Foreign Investment Regime ....................................................................................... 42 2.5.1 Regulatory framework and market access ................................................................. 42 2.5.2 Examination and approval procedures ....................................................................... 45 2.5.2.1 Inward investment .............................................................................................. 45 2.5.2.2 Outward investment ............................................................................................ 48 2.5.3 Incentives to foreign investment .............................................................................. 49 2.5.4 China (Shanghai) Pilot Free Trade Zone (CSPFTZ) ...................................................... 51 2.5.5 Bilateral investment treaties .................................................................................... 54 3 TRADE POLICIES AND PRACTICES BY MEASURE ........................................................ 55 3.1 Measures Directly Affecting Imports ............................................................................ 55 3.1.1 Customs procedures and requirements ..................................................................... 55 3.1.2 Customs valuation ................................................................................................. 58 3.1.3 Rules of origin ....................................................................................................... 58 3.1.4 Tariffs .................................................................................................................. 58 WT/TPR/S/300/Rev.1 • China - 3 - 3.1.4.1 Applied tariffs and tariff structure .......................................................................... 58 3.1.4.2 Bound tariff ........................................................................................................ 60 3.1.4.3 Bilateral and regional preferences .......................................................................... 60 3.1.4.4 Tariff concessions ................................................................................................ 62 3.1.5 Other charges affecting imports ............................................................................... 62 3.1.6 Import prohibitions, restrictions, and licensing ........................................................... 64 3.1.7 Anti-dumping, countervailing, and safeguard measures ............................................... 66 3.1.7.1 Anti-dumping measures ....................................................................................... 66 3.1.7.2 Countervailing measures ...................................................................................... 71 3.1.7.3 Safeguards ........................................................................................................ 72 3.1.8 Standards and other technical requirements .............................................................. 73 3.1.8.1 Standards and technical regulations ....................................................................... 73 3.1.8.2 Product certification ............................................................................................. 74 3.1.9 Sanitary and phytosanitary requirements .................................................................. 76 3.2 Measures Directly Affecting Exports ............................................................................. 78 3.2.1 Export procedures and requirements ........................................................................ 78 3.2.2 Export taxes, charges, and levies ............................................................................. 79 3.2.3 Export prohibitions, restrictions, and licensing ............................................................ 81 3.2.4 Export support and promotion ................................................................................. 83 3.2.5 Export promotion and marketing assistance ............................................................... 83 3.2.6 Export finance, insurance, and guarantees ................................................................ 84 3.3 Measures Affecting Production and Trade ..................................................................... 86 3.3.1 Incentives ............................................................................................................ 86 3.3.2 Competition policy and price controls ........................................................................ 92 3.3.2.1 Overview ........................................................................................................... 92 3.3.2.2 Legislative and institutional framework ................................................................... 92 3.3.2.3 Monopoly agreements and dominant market positions .............................................. 94 3.3.2.4 Administrative monopolies .................................................................................... 96 3.3.2.5 Mergers and acquisitions ...................................................................................... 96 3.3.2.5.1 Anti-trust reviews of concentrations .................................................................... 96 3.3.2.5.2 National security review of concentrations ............................................................ 98 3.3.2.6 Price controls ..................................................................................................... 98 3.3.3 State trading, state-owned enterprises, and privatization..........................................