RESTRICTEDWORLD TRADE
ORGANIZATIONWT/BOP/R/71
20 November 2003
(03-6193)
Committee on Balance-of-Payments Restrictions
REPORT OF THE MEETING OF 13 NOVEMBER 2003
1. The Committee on Balance-of-Payments Restrictions met on 13 November 2003, under the
Chairmanship of Ambassador Manzoor Ahmad (Pakistan), and adopted the agenda in
WTO/AIR/2204.
2. Under agenda item A, the Committee completed its second annual review of China under the
Transitional Review Mechanism of Paragraph 18 of China's Protocol of Accession.  The Chairman
noted that questions had been received in advance from Chinese Taipei (WT/BOP/W/25) and that, inaccordance with last year's practice, he would submit a Report on the Transitional Review Mechanismto the General Council on his own responsibility.
3. The statement by the representative of China is attached as Annex 1.  The representative of
Chinese Taipei said he appreciated the efforts made  in terms of transparency and compliance on the
part of the Chinese delegation and considered that his questions had been answered to his satisfaction.
4. Under agenda item B, the Committee a dopted its Annual Report (WT/BOP/R/72).WT/BOP/R/71
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Annex 1
Statement by the representative of the Chinese delegation
1. Thank you for giving me the floor and I would like to take this opportunity to brief the
Members and the Committee on the implementation of the Understanding on the Balance-of-
Payments Provisions of the GATT 1994 and the re levant commitments in China's accession protocol.
2. Concerning BOP data for 2002, the data on balance-of-payments for the year 2002 was
provided to the IMF in the first half of this year  by the Government of China.  This information can
also be accessed through the website of the State Administration of Foreign Exchange at
WWW.SAFE.GOV.CN.
3. Regarding the transparency requirements, China has committed in Paragraph 326 of its
Working Party Report to publish information on forex measures on SAFE's website and via the news
media.  In strict compliance with the commitment,  China has published all the laws, regulations and
measures on forex administration through the Foreign Trade and Economic Cooperation Gazette and
the website of the State Administration of Foreign Exchange as referred to above.  With the existence
of these channels, individuals, enterprises and WTO Members can keep abreast of the regulatory
framework and policies on the forex administration.
4. Up until now, China has not resorted to any BOP restrictions.  As a member of the IMF, the
foreign exchange regime of China is subject to the annual surveillance by the IMF.  The IMF has
continuously been confirming that China's forex regime is consistent with the IMF agreements, and
thus it complies with the WTO rules.  The IMF's annual conclusion is available at IMF, where
members of concern can have access.  To make necessary clarifications on the possible
misunderstandings with regard to our forex regime , however, I would like to provide some additional
explanations to some major aspects of it.
5. With respect to the settlement of current account transactions:  as it is known to all, the
convertibility of current account is, according to the Article VIII of IMF Agreements, not to impose
restrictions on the payment and transfer of the curr ent international transactions (in China, current
transactions with Hong Kong, Macao and Chinese Taipei are also included).  It is for the purpose of
bona fide test, anti-money laundering, and curbing hot money to require the relevant documents for
payment in and purchase of foreign exchange under current account.
6. Regarding the opening of foreign exchange deposit accounts:  according to the Notice to
SAFE Regarding the Related Issues of the Further Adjustment of the Foreign Exchange Account for
Current International Transactions (Huifa (2002) No 87), the qualifications for opening foreign
exchange account for current international transact ions of FIEs and Chinese enterprises have been
converged.
7. Concerning the qualification procedures applie d to foreign-invested enterprises (FIEs) in
respect of outward remittance of their earnings or dividends, the principle of convertibility of the
current account has been strictly followed by China.  The earnings and dividends of the foreign
investor of the FIEs are allowed to be remitted out.  The relevant documents to the authorized banks
are required for the bona fide test of the earnings by the foreign partners, and  it is also a regulatoryrequirement for normal and legitimate operation of the FIEs under the legal framework including the
Law of China on Foreign Invested Enterprises.WT/BOP/R/71
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8. I hope the above explanation I made can help members understand the efforts and
achievements made by China for the implementation of its commitments concerning BOPs measures.
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