 RESTRICTED  
  
WT/TPR/S/415  
15 September 2021  
(21-6703) Page: 1/206 
Trade Policy Review Body   
 
TRADE POLICY REVIEW  
REPORT BY THE SECRETARIAT  
CHINA 
This report, prepared for the eighth 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 Masahiro Hayafuji 
(tel. 022 739 5873) , Arne Klau (tel . 022 739 5706) , Katie Waters ( tel. 022 739 5067), Michael Kolie 
(tel. 022 739 5931), and Verena Hess -Bays (tel . 022 739 5489). 
 
Document WT/TPR/G/ 415 contains the policy statement su bmitted by China.  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note: This report covers developments up until mid -April 2021 , in accordance with the work 
programme initially agreed with China. This report is subject to restricted circulation and press 
embargo until the end of the first session of the meeting of the Trade Policy Review Body on China. 
This report was drafted in En glish.   WT/TPR/S/ 415 • China  
 
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  CONTENTS  
SUMMARY  ................................ ................................ ................................ ......................  10 
1   ECONOMIC ENVIRONMENT  ................................ ................................ ........................  16 
1.1   Main Features of the Economy  ................................ ................................ ..................... 16 
1.2   Recent Economic Developments  ................................ ................................ ................... 18 
1.2.1    Growth and impact of COVID ‑19 ................................ ................................ ................ 18 
1.2.2    Monetary and exchange rate policy  ................................ ................................ ............ 19 
1.2.3    Fiscal policy  ................................ ................................ ................................ ............ 21 
1.2.4    Structural measures  ................................ ................................ ................................ .22 
1.2.5    Balance of payments  ................................ ................................ ................................ 22 
1.3   Developments in Trade and Investment  ................................ ................................ ........ 24 
1.3.1    Trends and patterns in merchandise and services trade  ................................ ................ 24 
1.3.2    Trends and patterns in FDI  ................................ ................................ ....................... 27 
2   TRADE AND INVESTMENT REGIMES ................................ ................................ ...........  31 
2.1   General Framework  ................................ ................................ ................................ ....31 
2.2   Trade Policy Framework and Objectives  ................................ ................................ ......... 32 
2.2.1   Institutional framework  ................................ ................................ ............................ 32 
2.2.2    Trade policy formulation and objectives  ................................ ................................ ......33 
2.3   Trade Agreements and Arrangements  ................................ ................................ ........... 34 
2.3.1    WTO ................................ ................................ ................................ ...................... 34 
2.3.2    Regional and preferential agreements  ................................ ................................ ........ 34 
2.3.3    Other agreements and arrangements  ................................ ................................ ......... 36 
2.4   Investment Regime  ................................ ................................ ................................ ....36 
2.4.1    Regulatory framework and market access  ................................ ................................ ...36 
2.4.2    Examination and approval procedures  ................................ ................................ ........ 41 
2.4.3    Incentives to foreign dire ct investments  ................................ ................................ .....43 
2.4.4    Bilateral investment and tax agreements  ................................ ................................ ....44 
3   TRADE POLICIES AND PRACTICES BY MEASURE  ................................ ........................  45 
3.1   Measures Directly Affecting Imports  ................................ ................................ .............. 45 
3.1.1    Customs procedures, valuation, and requirements  ................................ ....................... 45 
3.1.1.1    Preshipment inspection  ................................ ................................ .......................... 48 
3.1.1.2    Customs valuation  ................................ ................................ ................................ 48 
3.1.1. 3   Trade facilitation  ................................ ................................ ................................ ...48 
3.1.2    Rules of origin  ................................ ................................ ................................ ......... 50 
3.1.3    Tariffs  ................................ ................................ ................................ .................... 51 
3.1.3.1    Applied MFN tariffs  ................................ ................................ ................................ 51 
3.1.3.2    Tariff rate quotas (TRQs)  ................................ ................................ ....................... 53 
3.1.3.3    Bound tariffs  ................................ ................................ ................................ ........ 53 
3.1.3.4    Preferential rates  ................................ ................................ ................................ ..53 
3.1.3.5    Tariff exemptions or concessions ................................ ................................ ............. 55 WT/TPR/S/ 415 • China  
 
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  3.1.4    Other charges affecting imports  ................................ ................................ ................. 55 
3.1.4.1    Value added tax (VAT)  ................................ ................................ ........................... 55 
3.1.4.2    Consumption (excise) tax  ................................ ................................ ...................... 56 
3.1.4.3    Automobile Purchase Tax  ................................ ................................ ....................... 57 
3.1.4.4    Port construction fees  ................................ ................................ ............................ 58 
3.1.5    Import prohibitions, restrictions, and licensing  ................................ ............................ 58 
3.1.5.1    Import prohibitions  ................................ ................................ ............................... 58 
3.1.5.2    Import licensing requirements  ................................ ................................ ................ 60 
3.1.5.2.1    Automatic import licensing requirements  ................................ ............................... 61 
3.1.5.2.2    Non-automatic import licensing requirements  ................................ ........................ 62 
3.1.6    Anti-dumping, countervailing, and safeguard measures  ................................ ................ 62 
3.1.6.1    Anti-dumping measures  ................................ ................................ ......................... 62 
3.1.6.2    Countervailing measures  ................................ ................................ ........................ 65 
3.1.6.3    Safeguard measures  ................................ ................................ ............................. 66 
3.2   Measures Directly Affecting Exports  ................................ ................................ .............. 67 
3.2.1    Customs procedures and requirements  ................................ ................................ .......67 
3.2.2    Taxes, charges, and levies  ................................ ................................ ........................ 68 
3.2.3    Export prohibitions, restrictions, and licensing  ................................ ............................. 69 
3.2.4    Export support and promotion  ................................ ................................ ................... 72 
3.2.5    Export finance, insurance, and guarantees  ................................ ................................ ..73 
3.3   Measures Affecting Production and Trade  ................................ ................................ .......75 
3.3.1    Incentives  ................................ ................................ ................................ ............... 75 
3.3.2    Standards and other technical requirements  ................................ ............................... 79 
3.3.2.1    Overview  ................................ ................................ ................................ ............. 79 
3.3.2.2    Product certification  ................................ ................................ .............................. 82 
3.3.2.3    Labelling and packaging  ................................ ................................ ......................... 83 
3.3.3    Sanitary and phytosanitary requirements  ................................ ................................ ....84 
3.3.3.1    Legal, institutional, and policy framework  ................................ ................................ 84 
3.3.3.2    SPS measures  ................................ ................................ ................................ ......86 
3.3.3.3    Inspection and quarantine  ................................ ................................ ...................... 88 
3.3.3.4    Genetically modified organisms (GMOs)  ................................ ................................ ...88 
3.3.4    Competition policy and price controls  ................................ ................................ ......... 89 
3.3.4.1    Competition policy  ................................ ................................ ................................ 89 
3.3.4.1.1    Legislative and institutional framework  ................................ ................................ .89 
3.3.4.1.2    Monopoly agreements  ................................ ................................ ......................... 91 
3.3.4.1.3    Dominant market positions  ................................ ................................ .................. 91 
3.3.4.1.4    Mergers and acquisitions  ................................ ................................ ..................... 92 
3.3.4.1.5    Administrative monopoly  ................................ ................................ ..................... 93 
3.3.4.1.6    Enforcement  ................................ ................................ ................................ ......93 
3.3.4.1.7    International cooperation  ................................ ................................ .................... 94 WT/TPR/S/ 415 • China  
 
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  3.3.4.2    Price controls ................................ ................................ ................................ ........ 94 
3.3.5    State tr ading, state -owned enterprises, and privatization  ................................ ............. 97 
3.3.6    Government procurement  ................................ ................................ ......................... 99 
3.3.6.1    Overview  ................................ ................................ ................................ ............. 99 
3.3.6.2    Legal and institutional framework  ................................ ................................ .........  100 
3.3.6.3    Procurement methods and e -procurement ................................ ..............................  103 
3.3.6.4    Other policy considerations in government procurement  ................................ ..........  104 
3.3.6.5    COVID‑19-related government procurement measures  ................................ ............  105 
3.3.6.6    Supplier complaint mechanism  ................................ ................................ .............  106 
3.3.6.7    Accession to the GPA and other international cooperati on ................................ ........  106 
3.3.7    Intellectual property rights  ................................ ................................ ......................  106 
3.3.7.1    Overview  ................................ ................................ ................................ ...........  106 
3.3.7.2    Institutional reforms and IP -related policies  ................................ ...........................  107 
3.3.7.3    International context  ................................ ................................ ...........................  108 
3.3.7.4    Copyright and related rights  ................................ ................................ .................  108 
3.3.7.5    Industrial property  ................................ ................................ ..............................  109 
3.3.7.5.1    Trademarks  ................................ ................................ ................................ ..... 109 
3.3.7.5.2    Geographical  indications  ................................ ................................ ...................  110 
3.3.7.5.3    Patents  ................................ ................................ ................................ ...........  111 
3.3.7.5.4    Utility models  ................................ ................................ ................................ .. 113 
3.3.7.5.5    Industrial designs  ................................ ................................ .............................  114 
3.3.7.5.6    Layout -designs of integrated circuits  ................................ ................................ .. 114 
3.3.7.5.7    New plant varieties  ................................ ................................ ...........................  114 
3.3.7.5.8    Undisclosed information and trade secrets  ................................ ...........................  115 
3.3.7.6    Enforcement  ................................ ................................ ................................ ....... 116 
3.3.7.6.1    Overview  ................................ ................................ ................................ ........  116 
3.3.7.6.2    Administrative procedures  ................................ ................................ .................  117 
3.3.7.6.3    Judicial measures  ................................ ................................ .............................  118 
3.3.7.6.4    Customs measures  ................................ ................................ ...........................  119 
3.3.7.6.5    Criminal  procedures ................................ ................................ ..........................  119 
4   TRADE POLICIES BY SECTOR  ................................ ................................ ...................  120  
4.1   Agriculture, Forestry, and Fisheries  ................................ ................................ .............  120 
4.1.1    Overview  ................................ ................................ ................................ ..............  120 
4.1.2    Agriculture  ................................ ................................ ................................ ............  120 
4.1.2.1    Features and market development  ................................ ................................ ........  120 
4.1.2.2    Legal and institutional framework  ................................ ................................ .........  123 
4.1.2.3    Policy objectives and reforms  ................................ ................................ ...............  124 
4.1.2.4    Policy instruments  ................................ ................................ ...............................  125 
4.1.2.4.1    Border measures  ................................ ................................ ..............................  125 
4.1.2.4.2   Measures affecting exports  ................................ ................................ ................  126 WT/TPR/S/ 415 • China  
 
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  4.1.2.4.3    Internal measures  ................................ ................................ ............................  127 
4.1.2.4.3.1    Support measures  ................................ ................................ .........................  127 
4.1.2.4.3.2    Price controls and market price support systems  ................................ ...............  129 
4.1.2.4.3.3    Other measures  ................................ ................................ ............................  130 
4.1.2.4.4    Levels of support ................................ ................................ ..............................  130 
4.1.3    Fisheries  ................................ ................................ ................................ ...............  133 
4.1.3.1    Features and market developments  ................................ ................................ ....... 133 
4.1.3.2    Legal, institutional, and policy framework  ................................ ..............................  134 
4.1.3.3    Government support to the fisheries sector  ................................ ............................  136 
4.1.3.4    Fisheries conservation measures  ................................ ................................ ...........  136 
4.2   Mining and Energy  ................................ ................................ ................................ .... 137 
4.2.1    Mining  ................................ ................................ ................................ ..................  137 
4.2.2    Energy  ................................ ................................ ................................ .................  140 
4.2.2.1    Overview including environmental policy  ................................ ................................  140 
4.2.2.2    Coal ................................ ................................ ................................ ..................  142 
4.2.2.3    Oil ................................ ................................ ................................ .....................  143 
4.2.2.4    Gas ................................ ................................ ................................ ...................  144 
4.2.2.5    Electric ity ................................ ................................ ................................ ...........  144 
4.3   Manufacturing  ................................ ................................ ................................ ..........  148 
4.3.1    Recent developments  ................................ ................................ .............................  148 
4.3.2    Selected subsectors  ................................ ................................ ...............................  149 
4.3.2.1    Automobiles, automotive parts, and components  ................................ ....................  149 
4.3.2.2    Machinery and equipment  ................................ ................................ ....................  151 
4.3.2.3    Iron and steel  ................................ ................................ ................................ ..... 152 
4.3.2.4    Electronic, IT, and integrated circuits ................................ ................................ ..... 153 
4.3.2.5    Shipbuilding  ................................ ................................ ................................ ....... 154 
4.4   Services ................................ ................................ ................................ ..................  155 
4.4.1    Financial services  ................................ ................................ ................................ ... 155 
4.4.1.1    Overview  ................................ ................................ ................................ ...........  155 
4.4.1.2    Reform of the financial supervision framework  ................................ ........................  157 
4.4.1.3    Recent regulatory developments  ................................ ................................ ...........  158 
4.4.1.3.1    Overview  ................................ ................................ ................................ ........  158 
4.4.1.3.2    Regulatory developments in banking  ................................ ................................ .. 158 
4.4.1.3.2.1    Developments in licensing of foreign banks  ................................ .......................  158 
4.4.1.3.2.2    Developments in banking prudential regulations and measures to tackle other 
systemic risks  ................................ ................................ ................................ ..................  159 
4.4.1.3.2.3    Other measures in banking  ................................ ................................ .............  160 
4.4.1.3.3    Regulatory developments in insurance  ................................ ................................  161 
4.4.1.3.3.1    Developments in licensing requirements  ................................ ...........................  161 
4.4.1.3.3.2    Developments in prudential regulations  ................................ ............................  162 
4.4.1.3.4    Recent developments in securities activities  ................................ ........................  162 WT/TPR/S/ 415 • China  
 
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  4.4.1.3.4.1    Foreign participation  ................................ ................................ ......................  162 
4.4.1.3.4.2    Measures to improve governance and prevent risks  ................................ ...........  163 
4.4.1.3.4.3    Foreign activities of Chinese companies  ................................ ............................  164 
4.4.1.3.5    Developments in pension fund management  ................................ ........................  165 
4.4.1.3.6    Measures to ease cross -border transactions and promote CNY internalization  ..........  165 
4.4.1.3.7    Developmen ts in the fintech industry  ................................ ................................ .. 165 
4.4.2    Telecommunications  ................................ ................................ ...............................  167 
4.4.2.1    Overview  ................................ ................................ ................................ ...........  167 
4.4.2.2    Regulatory framework  ................................ ................................ .........................  168 
4.4.2.2.1    Developments in 5G  ................................ ................................ .........................  169 
4.4.2.2.2    Facility sharing  ................................ ................................ ................................  169 
4.4.2.2.3    Number portability  ................................ ................................ ...........................  170 
4.4.2.2.4    Spectrum management  ................................ ................................ .....................  170 
4.4.2.2.5    Cloud computing  ................................ ................................ ..............................  170 
4.4.2.2.6    Cybersecurity  ................................ ................................ ................................ .. 170 
4.4.2.2.7    E-commerce  ................................ ................................ ................................ .... 172 
4.4.3    Transport  ................................ ................................ ................................ ..............  174 
4.4.3.1    Maritime transport  ................................ ................................ ..............................  175 
4.4.3.2    Air transport  ................................ ................................ ................................ ....... 177 
5   APPENDIX TABLES  ................................ ................................ ................................ .. 181 
 
CHARTS  
 
Chart 1.1 Product composition of merchandise trade by main HS section, 2016 and 2020  ........... 25 
Chart 1. 2 Direction of merchandise trade, 2016 and 2020  ................................ ....................... 26 
Chart 1.3 Foreign direct investment, 2000 -19 ................................ ................................ ........ 28 
Chart 2.1 Number of restrictive measures in China's Special Administrative Measures   
determining access to foreign investment, 2017 -20................................ ................................ 38 
Chart 3.1 Distribution of MFN applied tariff rates, 2015, 2017, and 2021  ................................ ..52 
Chart 3.2 Average applied tariff rates, by HS section, 2017 and 2021  ................................ .......53 
Chart 3.3 Import licensing by HS section, 2020  ................................ ................................ .....61 
Chart 3.4 Anti -dumping measures in force, by product , 31 December 2020  ............................... 65 
Chart 3.5 Main elements contained in SPS measures notified by China, 1 January 2018 -  
13 April 2021  ................................ ................................ ................................ .................... 87 
Chart 3.6 Exports and imports of fees for the use of IP, 2010 -19 ................................ ...........  107 
Chart 3.7 Patent applications, 2010 -19 ................................ ................................ ...............  112 
Chart 3.8 Patent grants, 2010 -19................................ ................................ .......................  112 
Chart 3.9 Patent grants by top fields of technology, 2019  ................................ .....................  113 
Chart 4.1 Value of production of agriculture and animal husbandry, 200 9-19 ..........................  121 
Chart 4.2 Volume of production, 2009 -19 ................................ ................................ ...........  121 
Chart 4.3 Green and Amber Box support, 2011 -16 ................................ ...............................  131 WT/TPR/S/ 415 • China  
 
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  Chart 4.4 OECD measurement of support, 2010 -19 ................................ ..............................  132 
Chart 4.5 Total consumption of energy and its composition, 2015 and 2019 ............................  141 
Chart 4.6 Total energy consumption by sector, 2015 and 2018  ................................ ..............  141 
Chart 4.7 Structure of electricity production and consumption, 2018  ................................ ...... 145 
Chart 4.8 Installed generation capacities by primary energy, 2019  ................................ .........  146 
Chart 4.9 International passenger flights, January to December, 2019 and 2020  .....................  178 
Chart 4.10 Domes tic passenger flights, January to December, 2019 and 2020  .........................  178 
 
TABLES  
 
Table 1.1 Selected macroeconomic indicators, 2015 -20 ................................ .......................... 16 
Table 1.2 GDP by sector, 2015 -20 ................................ ................................ ........................ 19 
Table 1.3 Balance of payments, 2015 -20 ................................ ................................ .............. 23 
Table 1.4 Composition of trade in services, 2015 -20 ................................ .............................. 27 
Table 1.5 Inward foreign direct investment by source, 2015 -19 ................................ ............... 28 
Table 1.6 Inward foreign direct investment by main sectors, 2015 -19 ................................ ......29 
Table 1.7 Outward FDI by main destination, 2015 -19 ................................ ............................. 29 
Table 1.8 Outward FDI by main sectors, 2 015-19 ................................ ................................ ..30 
Table 3.1 China's legislation related to customs procedures  ................................ ..................... 45 
Table 3.2 Tariff structure, 2015, 2017, and 2021  ................................ ................................ ...51 
Table 3.3 Summary analysis of the Chinese preferential tariff, 2020  ................................ ......... 54 
Table 3.4 VAT rates, December 2020  ................................ ................................ .................... 56 
Table 3.5 Consumption tax, March 2021  ................................ ................................ ............... 56 
Table 3.6 Import prohibitions notified to the WTO for period 2018 -20 ................................ .......59 
Table 3.7 Anti -dumping investigations and measures, January 2018 -December 2020  ................. 64 
Table 3.8 Anti -dumping measures in force, by trading partner/region, January 2018 - 
December 2020   ................................ ................................ ................................ ................ 64 
Table 3.9 Countervailing investigations and measures, 2016 -20 ................................ .............. 66 
Table 3.10 Countervailing investigatio ns initiated during the review period, as at 
31 December  2020 ................................ ................................ ................................ ............. 66 
Table 3.11 Export duties by type and HS chapter, 2020  ................................ .......................... 69 
Table 3.12 Products subject to export quotas and licensing, 2020  ................................ ............ 70 
Table 3.13 Overview of SINOSURE short -term export credit insurance policy  ............................. 74 
Table 3.14 Overview of SINOSURE medium - and long -term export credit insurance policy  .......... 75 
Table 3.15 Government guidance funds  ................................ ................................ ................ 77 
Table 3.16 Policy -related funds  ................................ ................................ ............................ 78 
Table 3.17 Central Government institutions with SPS -related responsibilities, 2021  .................... 85 
Table 3.18 Main SPS -related laws and regulations, January 2021  ................................ ............. 85 
Table 3.19 SPS -related STCs raised against China, 1 January 2018 -13 April 2021  ...................... 87 
Table 3.20 Department rules related to price controls, 2021  ................................ .................... 95 
Table 3.21 Products/serv ices subject to price controls by the Central Government, 2021  ............ 95 WT/TPR/S/ 415 • China  
 
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  Table 3.22 Products/services subject to price controls by local go vernments, 2020  .................... 96 
Table 3.23 SOEs in China's economy, 2013 -19 ................................ ................................ ......98 
Table 3.24 China's 10 largest state -owned enterprises, 2020 ................................ ................... 98 
Table 3.25 Government procurement by type of purchase, 2017 -19 ................................ ......... 99 
Table 3.26 Government procurement -relate d laws, regulations, and administrative measures  ... 101 
Table 3.27 Government procurement by procurement method, 2017 -19 ................................ . 103 
Table 3.28 Copyright collective management organizations – fees and membership  .................  109 
Table 3.29 Trademark applications and registrations, 2017 -19 ................................ ..............  110 
Table 3.30 Utility models – Applications and registrations, 2017 -19................................ ........  114 
Table 3.31 Industrial designs – Applications and r egistrations, 2017 -19 ................................ .. 114 
Table 3.32 IP enforcement, 2018 -20 ................................ ................................ ..................  117 
Table 3.33 Judicial measures, 2018 -19 ................................ ................................ ...............  118 
Table 4.1 Principal indicators for agriculture, animal husbandry, forestry, and fisheries,  
2015-20 ................................ ................................ ................................ .........................  120 
Table 4.2 Agricultural  production, 2015 -19 ................................ ................................ ..........  120 
Table 4.3 Agricultural exports and imports, 2015 -20 ................................ ............................  121 
Table 4.4 Main agriculture -related laws, December 2020  ................................ ......................  124 
Table 4.5 TRQs on agricultural products and their utilization, 2018 -19 ................................ .... 126 
Table 4.6 Agricultural products subj ect to export quotas and licensing in 2020  ........................  127 
Table 4.7 Export quotas for maize, rice, and wheat flour, 2018 -20 ................................ .........  127 
Table 4.8 Central Government tax incentives provided to the agriculture sector, 2018  ..............  128 
Table 4.9 Central Government fiscal appropriations for the agriculture sector, 2018  .................  128 
Table 4.10 Minimum procurement prices, 2016 -21 ................................ ...............................  130 
Table 4.11 Distribution of the financing o f the agricultural insurance scheme between  
central and local authorities   ................................ ................................ .............................  130 
Table 4.12 OECD indicators for support to agriculture in China, 2010 -19 ................................ . 132 
Table 4.13 Fisheries indicators, 2015 -19 ................................ ................................ .............  134 
Table 4.14 Fishery exports and imports, 2015 -20 ................................ ................................  134 
Table 4.15 Main mining production, 2017 -19 ................................ ................................ ....... 137 
Table 4.16 Mining industry foreign investment regime, 2017 and 2020  ................................ ... 139 
Table 4.17 China's key trading partners for oil imports, 2018 -20 ................................ ...........  144 
Table 4.18 Investment in power generation capacity by source, 2017 -19 ................................  146 
Table 4.19 Investment regime for electricity, 2017 and 2020  ................................ ................  146 
Table 4.20 Action plans for IT and its subsectors, 2016 -20 ................................ ....................  154 
Table 4.21 Overview of the regulatory regime for fintech  ................................ ......................  166 
Table 4.22 Telecoms prices as a percentage of GNI per capita, 2019  ................................ ...... 168 
Table 4.23 Value of merchandise goods imported to and exported from China through  
different transport modes, 2018 -20 ................................ ................................ ....................  174 
Table 4.24 Ship tonnage tax rates, 2020  ................................ ................................ .............  176 
Table 4.25 CAAC policies supporting active response to the COVID ‑19 outbreak  .......................  179 
 WT/TPR/S/ 415 • China  
 
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  BOXES  
 
Box 2.1 Main changes in the 2019 National Negative List for foreign investments and  
the 2019 Encouraged Catalogue  ................................ ................................ .......................... 38 
Box 2.2 Main changes in the 2020 National Negative List for foreign investments and  
the 2020 Encour aged Catalogue  ................................ ................................ .......................... 39 
Box 3.1 GACC trade facilitation measures  ................................ ................................ ............. 49 
Box 3.2 Main laws, regulations, and guidelines dealing with competition policy issues ................. 90 
Box 4.1 Fisheries conservation measures, 2018 -20 ................................ ..............................  137 
Box 4.2 Selected indicators of the telecommunications sector, 2020  ................................ ....... 168 
 
APPENDIX TABLES  
 
Table A1.1 Bilateral debt stocks to China – public and publicly guaranteed (PPG), 2014 -19 ....... 181 
Table A1.2 Merchandise exports by HS section and major HS chapter/subheading, 2015 -20 ..... 182 
Table A1.3 Merchandise imports by HS section and major HS chapter/subheading, 2015 -20 ..... 183 
Table A1.4 China's merchandise exports by destination, 2015 -20................................ ...........  184 
Table A1.5 China's merchandise imports by origin, 2015 -20 ................................ ..................  185 
 
Table A2.1 Main notifications under WTO  Agreements, 1 January 2018 -13 April 2021  ...............  186 
Table A2.2 WTO dispute settlement cases involving China, 1 January 2018 -13 April 2021  .........  188 
Table A2.3 Industries in which F DI was/is restricted, 2019 and 2020  ................................ ...... 189 
Table A2.4 Industries in which FDI was/is prohibited, 2019 and 2020  ................................ ..... 191 
 
Table A3.1 MFN applied tariff summary, 2021  ................................ ................................ ...... 193 
Table A3.2 Active central subsidy programmes notified in 2019  ................................ .............  194 
Table A3.3 Summary of IPR legislation, as at late -January 2021  ................................ ............  196 
Table A3.4 Membership in Internation al IPR Conventions, as at January 2021  .........................  198 
Table A3.5 General regulatory framework of new plant varieties protection  .............................  199 
 
Table A4.1 Central Government support to fisheries as notified to the WTO  .............................  200 
Table A4.2 Local government support to fisheries as notified to the WTO  ................................  201 
Table A4.3 Tariff lines and rates as per the Resource Tax Law  ................................ ...............  204 
Table A4.4 Tariff lines and tariff rate range before the implementation of the Resource  
Tax Law  ................................ ................................ ................................ ..........................  206 
 
  WT/TPR/S/ 415 • China  
 
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  SUMMARY  
1. Since China's previous Trade Policy Review in 2018, the country's economy has been a major 
driver of global growth . Real GDP growth rates fell from just under 7.0% in 2016 -18 to 6.0% in 
2019 and 2.3% in 2020. Growth is projected to reach 6.0% again in 2021, as economic activities 
are expecte d to normalize. China's GDP per capita was USD  11,710 in 2020, up from USD  9,976 in 
2018. The long -term structural changes in China's economy, away from agriculture and industry 
towards services, continued during the review period. Services now make up som e 55% of GDP. 
Remarkable progress on poverty alleviation has been achieved over the past decades, resulting from 
high GDP growth rates and market -oriented reforms.  
2. The outbreak of the COVID ‑19 pandemic in early 2020 had a major impact on output and 
employm ent. At the beginning of 2020, China 's econom y contracted by 6.8%.  Virtually all sectors 
were severely hit by the pandemic, with the notable exceptions of financial services and information 
technology . Starting in mid -2020, the economy began to recover, ma inly driven by public investment 
and international trade. Swift fiscal and monetary policy reactions helped mitigate the economic 
impact of the COVID ‑19 pandemic, but as a result of the Government's stabilizing measures , financial 
stability risks may have increased.  
3. Price stability remains the main goal of monetary policy. Inflation rates remained low during 
the review period, fluctuating between -0.5% and 3.8%. China has a managed floating exchange 
rate regime. The exchange rate of the Chinese yuan (CNY) i s determined with reference to a basket 
of currencies with a publicly known composition; the CNY's central parity is determined daily as a 
"fix". Officially reported foreign exchange reserves held steady during the review period, at around 
USD 3.1 trillion . Regulations on capital movements remain in place on inflows and outflows. China's 
bilateral lending to the rest of the world, notably to African countries, has increased over the past 
years. The CNY is fully convertible for current account transactions a nd partially convertible for some 
capital account transactions. China continued its efforts to further internationalize the CNY. As at 
mid-2020, about 2% of global payments were conducted through the CNY.  
4. China's current account surplus contracted between 2016 and 2018, but grew again in 2019, 
to USD  102.9 billion. Available information for 2020 indicates a widening of the surplus, to 
USD 273.9 billion (1.9% of GDP), while for 2021, the authorities predict a narrowing of the current 
account surplus. The financial account (excluding reserve assets) posted a strong deficit in 2015, a 
surplus between 2016 and 2019, and a deficit in 2020. Direc t investment was in surplus in all recent 
years except for 2016. The portfolio investment account was in deficit until 2016 and has posted a 
surplus since 2017. China's merchandise trade surplus declined between 2016 and 2018, which was 
a major driver of i ts narrowing current account surplus. In 2019 and 2020, the trade surplus grew 
again. China's balance of trade in services has traditionally posted a deficit, which grew between 
2015 and 2018, but fell in 2019 and 2020.  
5. China's merchandise exports increase d every year during the review period, to attain a peak 
of nearly USD  2.6 trillion in 2020. Exports fell in the first half of 2020 due to the COVID ‑19 pandemic, 
but grew strongly afterwards due to China being the first manufacturing power to resume operati ons 
after the first wave of global shutdowns, and its role as leading supplier of protective health 
equipment and electronics related to working from home. At over 44%, machinery and electrical 
equipment continue to represent a very large and rising share in China's merchandise exports. The 
United  States  and the European  Union  remain China's main destinations for merchandise exports. 
Asia remains the most important region for China's merchandise  exports, with a share of over 44% 
in 2020. Within Asia, Japan and the Republic of Korea are the most important trading partners. 
Africa and the Middle East received between 4% and 5% of China's exports, while the share for 
Latin America fluctuated around 6%.  
6. China's merchandise imports increased sharply between 2016 and 2018, but fell in 2019 and 
2020. At about 35%, machinery and electrical equipment make up an important and stable share of 
China's imports, followed by mineral products (some 25%). The European  Union  remains the most 
important supplier of goods, while the share of the United  States  in China's imports fell, from nearly 
9% in 2015 to 6.6% in 2020. The share of imports originating in Asia fluctuated at around 47% 
between 2016 and 2019, but increased to over 49% in 2020. Africa, Australia,  and the Middle Ea st 
account for about 4%, 5% , and 7% of China's merchandise imports, respectively.  WT/TPR/S/ 415 • China  
 
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  7. China 's services exports grew from USD  217 billion in 2015 to USD  244 billion in 2019, but 
fell to USD  235 billion in 2020. They are mostly composed of various business servi ces, 
transportation, and travel. Services imports grew from USD  436 billion in 2015 to USD  506 billion in 
2019, but fell to USD  380 billion in 2020. Travel is traditionally by far the most important individual 
category.  
8. Annual foreign direct investment ( FDI) inflows into China continued to grow between 2016 
and 2019, although at a much slower pace than in previous periods. Outward FDI, after lagging 
behind for many years, overtook inward FDI in 2015. It peaked in 2016 and has fallen sharply every 
year since . Manufacturing remains by far the largest sector of FDI inflows into China. The most 
important sectors for China's FDI abroad are leasing and business services, and manufacturing. 
Investment under the Belt and Road Initiative accounts for some 13% of Chin a's recent outward 
FDI; it is mostly concentrated in Central and South East Asia, with a focus on infrastructure projects.  
9. During the review period, China continued to aim at expanding international trade and 
investments, as outlined in Five -Year Plans and  various Administrative Measures. Efforts to address 
climate change issues were also noticeable within China's trade policy framework. The main ongoing 
actions in this regard included industrial restructuring, energy structure optimization, energy 
conserva tion and efficiency, and the establishment of a carbon emissions trading market.  
10. In pursuit of its trade policy objectives, China accords a leading role to the multilateral trading 
system and regional trade agreements (RTAs) in which it participates. China  is an active Member of 
the WTO; it is an observer to the Committee on Government Procurement, and has been negotiating 
its accession to the Plurilateral Agreement on Government Procurement since 20 07. China is also an 
observer to the Plurilateral Agreemen t on Trade in Civil Aircraft, and a participant in the Information 
Technology Agreement. It also participates in Joint Statement Initiatives on e -Commerce; 
investment facilitation for development; micro, small, and medium -sized enterprises; and  domestic 
regulation in services. Between 2018 and mid-April 2021, China was involved in 10 trade disputes 
as a complainant and 11 as a respondent. During the review period , China signed new RTAs with 
Mauritius, Cambodia, and 14 other countries within the framework of the Regional Comprehensive 
Economic Partnership (RCEP) Agreement. By the end of February 2021, China had signed 19 RTAs 
with 26 countries and territories. Chin a submitted various notifications to the WTO  during the review 
period . Nevertheless, some notifications, including those on state trading enterprises and domestic 
support, remain outstanding.  
11. A new Foreign Investment Law was adopted, with the aim of, inter alia, improving China's 
business environment for foreign investors and ensuring that they participate in market competition 
on an equal basis. The legislation stipulates that investors are protected against expropriation, 
restrictions on cross -border remi ttances, IPR infringement, and forced transfer of technology.  
12. Various negative lists and the Catalogue of Encouraged Industries for Foreign Investment, 
which are revised periodically, remain the main instrument s used to guide FDI in China. The 2020 
version  of the Special Administrative Measures on Access to Foreign Investment (National Negative 
List) further reduced the number of restrictive measures from 63 in 2017 to 33 in 2020. FDI in the 
Pilot Free Trade Zones (PFTZs) is guided by another negative list (PFTZ Negative List). In 2020, 
three PFTZs were established , bringing the total to 21. FDI  is not allowed in prohibited industries 
that are included in either the PFTZ Negative List or the National Negative List; for those in a 
restricted industry, investo rs must comply with the required administrative measures. Projects in 
the encouraged category are eligible for preferential treatment. In 2018, China issued the Market 
Access Negative List, which lists industries that are prohibited or subject to licensing  for investment 
and operation within China by market participants of any kind, including state -owned, private, 
domestic , or foreign -invested  enterprises . Certain FDI projects may be subject to national security 
reviews if they are deemed to have an influen ce on national security. Examination and approval are 
required for foreign -invested projects involving fixed asset investment and projects involving 
"serious" overcapacity.  
13. Various tax incentives are available to foreign -invested enterprises ( FIEs) to prom ote sectors 
deemed beneficial to the development of China's economy. Furthermore, several relief measures 
were recently taken or announced for foreign investors, as a response to the COVID ‑19 pandemic.  WT/TPR/S/ 415 • China  
 
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  14. China has taken various trade -facilitating measures wi th respect to import registration, 
documentation, and inspection requirements, as well as in response to the COVID -19 pandemic. Its 
national single window for international trade was extended and , reportedly , the overall customs 
clearance time for imports nationwide was reduced.  
15. China's simple average applied most-favoured nation (MFN) rate decreased from 9.3% in 2017 
to 7.1% in 2021, with tariff -rate reductions in nearly all product categories. The percentage of tariff  
lines bearing rates higher than 15% ( international tariff peaks) was 4.5% in 2021, significantly lower 
than the 13.9% in 2017. Applied MFN tariffs ranged from 0 %-65%; the highest tariffs of 65% apply 
to 20 agricultural tariff lines . China applies lower  tariffs under its preferential trade agreements 
(PTAs) and RTAs. The share of duty -free tariff lines in China's RTAs ranges between 0.04% (RTAs 
with Hong Kong, China and Macao, China) and 6.6% ( Separate Customs Territory of Taiwan, Penghu, 
Kinmen and Mats u (Chinese Taipei) ). Duty-free lines accounted for 12.6% of all lines . China also 
grants preferential tariff treatment to imports from least developed countries ( LDCs) that have 
established diplomatic relations with China and completed the exchange of dipl omatic notes. By 
February 2021, China had implemented zero tariffs on 97% of tariff lines for these 41 LDCs.  
16. Other charges affecting imports are the value added tax (VAT), the consumption tax, the 
Automobile Purchase Tax, and (until recently) port construc tion fees. During the review period, some 
VAT rates were reduced. Port construction fees levied on imported and exported goods were 
permanently abolished in January 2021.  
17. Some changes were made in the import regime on prohibition and licensing. Since 
1 January 2021, imports of all solid waste products have been prohibited, and the previous regime 
for allowing imports of certain wastes under licensing conditions has been terminated. Certain 
recycling materials for brass, iron -steel materials, copper, and cas t aluminium alloys may be 
imported if they meet the required standards. Automatic import licensing requirements, in place for 
monitoring purposes have been removed on certain items and non -automatic import licensing 
requirements were removed for some used mechanical and electrical products.  
18. Changes in legislation concerning anti -dumping measures during the review period included 
the adoption of the Ministry of Commerce's ( MOFCOM ) Rules on Interim Review of Dumping and 
Dumping Margins (Interim Review Rules)  in April 2018 and the entering into force of t he Rules on 
Questionnaires in Anti-Dumping  Investigations  and t he Rules for Hearing of Anti-Dumping  and 
Anti-Subsidy Investigations in May 2018. Other than these, t he laws and regulations governing 
anti-dumping , countervailing, and safeguard measures in China remained largely unchanged during 
the review period. Between January 2018 and December 2020, China initiated 34 anti-dumping  
investigations and 8 countervailing investigations; it did not initiate any new safeguard 
investigations. As at end -December 2020, China was enforcing 113 anti-dumping  definitive 
measures affecting imports from 16 countries or territories and 6 countervailing measures. Chemic al 
products continue to account for most anti-dumping  measures in force at end -December 2020, 
followed by products made of resin, plastic, and rubber.  
19. Regarding  the export regime, i n the wake of the COVID -19 pandemic, the authorities took 
steps to further streamline customs procedures, including inspections and quarantine, and reduce 
port charges for exporters of medical devices. To ensure the quality of exported medical devices, 
reinforced quality control measures were also put in place for enterprises inv olved in the export of 
COVID‑19-related test kits and other medical devices.  
20. China charges export taxes on certain products. As at January 2021, 102 tariff lines (at the 
8-digit level) were subject to statutory export duties, while 75 tariff lines carried interim duties. 
Prohibitions and restrictions are also in place on a variety of export items. Restricted exports may 
be subject to quotas or licences. During the review period, 23 new items were added to the list of 
technologies subject to export restricti ons, while 4 items that were subject to export prohibition and 
5 items that were subject to export restriction were removed.  
21. During the review period, a new Export Control Law was adopted; it provides for the 
establishment of a single framework for restric ting exports of controlled items, i.e. dual -use items 
(with both civilian and military applications); military products; nuclear products; and goods, 
technologies, and services that are related to the maintenance of national security and interests and 
the implementation of international obligations such as nuclear non-proliferation.  WT/TPR/S/ 415 • China  
 
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  22. The authorities indicate that China did not maintain or introduce any export subsidies on 
agricultural products during the review period. All exporters are generally entitled to  VAT rebates. 
To promote exports, the Trade Development Bureau of MOFCOM  organizes exhibitions in emerging 
markets and provides export -oriented training activities. It also maintains the websites of China 
Trade Promotion and provides, through various servi ce platforms, background information about 
foreign markets.  
23. China continued to provide incentives and financial support to different sectors and industries 
during the review period. In June 2019, China notified its support programmes for the 
period  2017-18. The notification contains information on 79 central -level and 420 subcentral -level 
programmes, many of which, however, had expired by the time of the notification. No information 
was provided by the authorities on how many of the programmes were still ac tive as at April 2021. 
The notifications submitted to the WTO and the replies provided by China to questions asked by 
other Members  did not enable the Secretariat to have a clear overall picture o f China's support 
programmes. In particular, the notificatio ns do not contain information on expenditure levels in 
certain critical sectors , such as aluminium, electric vehicles, glass, shipbuilding, semiconductors, or 
steel. Information on subsidies going beyond the 2019 notification was not made available to the 
Secretariat. In addition to the notified programmes, numerous other initiatives are reported to be in 
place to support different industries and attract foreign investment. So -called "government guidance 
funds " use public resources to make equity investment s in industries that the Government considers 
important, while numerous policy -related funds finance direct investments to support a particular 
policy initiative. Many of these funds seem to be endowed with sums over CNY  100 billion. According 
to the autho rities, the incentives provided by these funds do not constitute subsidies and are not 
required to be notified under the Agreement on Subsidies and Countervailing Measures 
(SCM  Agreement) . 
24. Since its previous Review, China introduced or revised various laws  and regulations related to 
standards and other technical requirements. On 1  January  2018, the revised Standardization Law 
entered into force and included new provisions such as those on association standards. According to 
the authorities, at end -2020, amo ng the national standards that correspond to the relevant 
international standards, 92.4% of mandatory standards (technical regulations) and 91.4% of 
voluntary standards were adoptions or adaptation s of international standards, compared with 74.3% 
and 85.9%  at end -2017. Between January 2018 and mid-April 2021, China submitted 344 technical 
barriers to trade ( TBT) notifications. During this period, i n the TBT Committee, 25 specific trade 
concerns were raised by Members regarding TBT measures maintained or planned by China.  
25. During the review period, there was a substantial reorganization of the agencies responsible 
for sanitary and phytosanitary (SPS) -related issues. The main change to the legal framework for 
SPS-related issues was the entry in to force of the Implementing Regulations of the 2015 Food Safety 
Law 2019. During the review period, 13 specific trade concerns were raised in the SPS Committee  
on SPS measures maintained by China , of which 8 were raised for the first time.  Between 
1 Janua ry 2018 and mid-April 2021, China submitted 165 notifications to the SPS Committee . 
26. In 2018, the State Administration for Market Regulation (SAMR) was established as the 
national administrative body for regulating market -related issues, including competiti on. The 
previous functions and personnel of the National Development and Reform Commission ( NDRC ), the 
State Administration for Industry and Commerce ( SAIC), and MOFCOM in their respective fields of 
competition policy merged into the SAMR. A new Anti -Monop oly Bureau and a new Price Supervision 
and Anti -Unfair Competition Bureau were established as the competition agencies within the SAMR. 
The State Council also established an Anti -Monopoly Committee to organize, coordinate, and guide 
the anti -monopoly work across the country. In 2019, the Anti -Unfair Competition Law was revised 
to strengthen the protection of trade secrets. There were no changes to the legislation concerning 
price controls during the review period.  
27. China 's state  trading enterprises have the exclusive right to import or export the following 
products: wheat, maize, sugar, tobacco, rice, cotton, crude and processed oil, refined coal, chemical 
fertilizers, tungsten and tungstate products, antimony, and silver. State ownership remains very 
importa nt in China 's economy, even in non -strategic, commercially oriented sectors, with 
state-owned enterprises ( SOEs) still having large market shares. No privatization took place during 
the review period ; reform of SOEs proceeded almost exclusively in the cont ext of mixed ownership 
reform.  WT/TPR/S/ 415 • China  
 
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  28. There have been no major changes to China's legislative and regulatory regime concerning 
government procurement since the previous Review , while modifications to relevant laws are 
currently under consideration.  The total valu e of government procurement in China was 
CNY 3.3 trillion in 2019 (the latest year for which data were made available), accounting for 3.3% 
of GDP; important infrastructure projects implemented by SOEs are not covered by the Government 
Procurement Law. The  majority of procurement takes place at the sub -Central Government level.  
29. During 2018 and 2019, China undertook wide -ranging reforms that included its intellectual 
property ( IP) regime ; the infrastructure of IP courts ; and amendments to the Trademark Law, the 
Patent Law, and the Anti -Unfair Competition Law, which govern trade secrets. As part of these 
reforms, in 2018, the State Intellectual Property Office became the China National Intellectual 
Property Administration under the SAMR. The IP enforcement reg ime continued to evolve in response 
to the challenges posed by the shift from brick -and-mortar stores to virtual marketplaces and the 
implementation of international agreements. For example, copyright surveillance of large -scale 
video, music, and literatur e websites, as well as online storage service providers, was strengthened.  
30. While the overall value of production of agriculture and animal husbandry increased steadily 
over the review period, China continues to be a net importer of agricultural products. China is 
pursuing a rural revitalization strategy. Rural reform initiatives have included amending the Law on 
the Contracting of Rural Land to legally upgrade the institutional arrangements on the land 
management right on rural contracted land , and steps have been taken to e xtend a similar approach 
to rural homesteads. As part of the Government's restructuring in 2018, the Ministry of Agriculture 
(MOA) was renamed the Ministry of Agriculture and Rural Affairs (MARA) , and its responsibilities 
were expanded, a National Food and Strategic Reserves Administration was created, and th e State 
Administration of Grain was dissolved. In 2021, the average MFN applied tariff on agricultural 
products was 12.7% (14.8% in 2017). China continues to make use of tariff -rate quotas on wheat, 
corn, rice, sugar, wool, wool tops , and cotton, which are  administered through import licences; fill 
rates have fluctuated and were under 50% for wheat, rice, and wool tops in 2019. Little up -to-date 
information was available on current government support to the agriculture sector , given that 
China's most recent  domestic support notification to the WTO covers the period up to 2016, and its 
SCM notification to 2018. China continues to implement a minimum purchase price policy for rice 
and wheat, with certain price reductions reported in recent years. Likewise, Chi na continues to 
maintain reserves of maize, rice, soya beans, and wheat , as well as a subsidized agricultural 
insurance scheme providing coverage for natural disasters . 
31. China is one of the world's largest fish -producing countries , particularly in aquacultu re, and is 
a net importer of fish. The simple average MFN tariff on fish and fishery products (WTO definition) 
was 6.8% in 2021, with tariffs ranging from 0 %-15%. Since 2018 , China has revised its fishing 
licence rules. No updated data were available on fi sheries subsidies from 2019, and on fuel subsidies 
to the fisheries sector over the whole review period. However, the authorities indicate that the 
Government will shortly issue a new policy to terminate fuel and boat construction subsidies, with 
the last of these pay -outs being made at end -2020. Reportedly, the Government has taken measures 
to monitor and control fishing vessels, enhance its international compliance capability, and prevent 
illegal, unreported, and unregulated fishing activities , and it is taking first steps to introduce a total 
allowable catch system.  
32. During the review  period, some liberalization steps were taken in the mining sector to allow 
increased foreign participation; foreign investment prohibitions and restrictions on the exploratio n 
and development of a number of mining products were removed. Foreign investment in the 
exploration, exploitation, and processing of rare earth s, radioactive minerals, and tungsten is 
prohibited. The average MFN applied tariff on mining products was 1.7% in 2021, unchanged 
since 2017.  
33. China continues to reduce its proportion of coal consumption, in line with objectives set for 
green and low -carbon energy development in the 13th Five -Year Plan for Energy Development. Other 
measures regarding the promotion o f clean energy included the authorities' efforts to fully 
operationalize China's carbon emission trading framework, set renewable electricity consumption 
quotas as a share of total power consumption in each province, and implement a new environmental 
tax policy. The energy sector was further opened to foreign investments during the review period, 
through several liberalization measures, such as the removal of the restrictions on the exploration 
and development of oil and natural gas (except for oil shale, o il sands, and shale gas).  WT/TPR/S/ 415 • China  
 
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  34. The Made in China 2025 (or China Manufacturing 2025) initiative (launched in 2015) and the 
Internet Plus initiative (launched in 2015) remain China's main initiatives to promote its 
manufacturing sector. The authorities undertook a series of market -opening measures, such as 
lifting of restrictions on the share holding  ratio of foreign investment in commercial vehicle 
manufacturing, with a view to promoting the sector's competitiveness. Furthermore, some 
manufacturing activities were  added to the list of encouraged industries, mainly certain items for 
integrated circuits, chip packaging equipment, cloud computing devices, key components of 
industrial robots, new energy vehicles, and intelligent vehicles.  The average MFN applied tariff  on 
manufactured products was 7% in 2021 (9.7% in 2017).  
35. During the review period, China continued to liberalize its financial sector to allow increased 
foreign participation. A new supervision framework was established to address new types of financial 
risks, such as shadow banking. Foreign shareholding ratio limits were lifted for commercial banks, 
life insurers and insurance asset management companies, securities companies, futures companies, 
and fund management companies. Furthermore, foreign investors were allowed to participate in 
various segments of China's financial sector, including bond rating and private pension fund 
management.  
36. In the telecommunications sector, China granted 5G licen ces to its three major telecom 
operators and a broadcasting comp any. At the same time , the authorities put in place strategic plans 
for an integrated development of 5G and industrial Internet. Several regulations, administrative 
measures, and technical specifications were adopted or published for public comment, with a  view 
to fully implementing the 2017 Cybersecurity Law. The E -commerce Law was passed during the 
review period to regulate business activities of selling goods and/or providing services through 
information networks such as the Internet.  
37. The State continues  to have major presence in maritime and air transport. Developments in 
the maritime transport sector since 2018 have included continued measures to encourage qualified 
Chinese -funded international "Flag of Convenience" ships to return to China and a lifting of 
restrictions on foreign investment in international shipping and international shipping agency 
services in China . As is the case for other economies, the COVID -19 pandemic has had a big impact 
on the air transport sector, with international and domestic passenger flights dropping dramatically 
from February 2020; only the domestic passenger flight segment has recover ed. China has taken 
various measures to support the air and maritime sectors in the wake of the COVID -19 outbreak.  
 
 
 WT/TPR/S/ 415 • China  
 
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  1  ECONOMIC ENVIRONMENT  
1.1  Main Features of the Economy  
1.1.  China's GDP per capita rose to USD 11,710 in 2020, up from USD  8,148 in 2016 (Table  1.1). 
Real GDP growth rates fell from just under 7% in 2016 -18 to 6.0% in 2019 and 2.3% in 2020. 
Despite the slowdown in growth rates, China continues to be a major driver of global growth, and 
its conve rgence with advance d economies continues. Rapid economic development over the last 
decades, induced by market -oriented reforms, lifted hundreds of millions of people out of poverty.  
1.2.  China's population stood at an estimated 1.4 1 billion in 2020.1 While the  population is estimated 
to peak in 2029, at around 1.44 billion, the working -age population has been shrinking since 2012.2 
In 2020, China's newly  born population was 12 million, the lowest since 1949 . The percentage of 
people aged 65 and over has been rapidly rising, from 6.96% in 2000 to 13.50% in 2020 . 
Urbanization further increased, with around 65%  of the population now living in cities. Life 
expectancy is currently estimated at 77.3 years.  
1.3.  China's growth has been ac companied by a n increase in income inequality. Despite 
unprecedented poverty reduction over the past decades, the income gap between the richest and 
the poorest remains significant. According to the National Bureau of Statistics, the Gini index of 
income d istribution fell from 49.1 in 2008 to 46.2 in 2015, to climb again to 46.5 in 2019.3 According 
to World Bank data, income distribution is more equal, with a Gini index of 43.0 in 2008, falling to 
38.5 in 2016.4 With regard to wealth distribution, some academic studies suggest that the top decile 
and percentile shares of wealth increased sharply between 1990 and 2015 .5 According to the 
authorities, official indicators on wealth distribution do not exist.  
Table 1.1 Selected macroeconomic indicators, 2015 -20 
 2015  2016  2017  2018  2019  2020  
Nominal GDP (CNY billion)  68,885.8  74,639.5  83,203.6  91,928.1  98,651.5  101,598.6  
Nominal GDP (USD billion)  11,061.6  11,233.3  12,310.5  13,894.9  14,280.0   14,722.8  
Real GDP (CNY billion, 2015 prices)  68,885.8  73,603.6  78,717.0  84,030.3  89,030.5  91,120.5  
Real GDP (USD billion, 2015 prices)  11,061.6  11,077.4  11,646.7  12,701.1  12,887.3   13,204.4  
GDP per capita (CNY)  50,237.0  54,139.0  60,014.0  66,006.0  70,581.0   ..  
GDP per capita (USD)   8,067.0   8,148.0   8,879.4   9,976.8  10,216.7   11,710.0  
National accounts        
Real GDP (percentage change)  7.0 6.8 6.9 6.7 6.0 2.3  
Domestic demand  7.3 7.9 6.8  7.4   5.5  1.5  
Consumption  8.3 8.5 7.3  8.1   6.0  -0.8 
Investment  6.1 7.2 6.1  6.5  4.5  4.6 
Fixed  7.9 7.3 5.9  7.1   5.1  4.3 
Contribution to GDP growtha       
Consumption  4.9 4.5 3.9 4.3 3.5 -0.5 
Investment  1.6 3.1 2.7 2.9 1.7 2.2 
Net exports  0.6 -0.8 0.3 -0.5 0.7 0.7 
Unemployment rate (%)b 4.1 4.0 3.9  3.8   3.6   ..  
Prices and interest rates        
Inflation (CPI, percentage change)  1.4 2.0 1.6  2.1   2.9   3.8  
Benchmark lending rate (%, end of year)  4.35  4.35  4.35  4.35  4.15  3.85  
Benchmark deposit rate (%, end of year)  1.50  1.50  1.50  1.50  1.50  1.50  
Exchange rate        
CNY per USD (period average)   6.227   6.644   6.759   6.616   6.908   6.899  
Nominal effective exchange rate index (percentage 
change)   9.7  -5.4  -2.5   1.5  -1.8  -1.2  
Real effective exchange rate (REER) indexc 
(percentage change)   9.8  -4.9  -2.9   1.4  -0.8   1.3  
Monetary indicators        
Net domestic credit (percentage change, end -
period)  23.7 20.1 11.3 10.3 10.7 13.3  
Broad money, M2 (percentage change, end -
period)  13.3 11.3 9.0 8.1 8.7 10.1  
 
1 The authorities indicate that more accurate figures will be published with the results of the 
2020 census, which were only partially available as at April 2021.  
2 Information provided by the authorities.  
3 National Bureau of Statistics, Statistical Yearbo ok, various issues.  
4 World Bank. Viewed at: https://data.worldbank.org/indicator/SI.POV.GINI . 
5 Picketty, T. (2020), Capital and Ideology , Cambridge, Massachusetts: Harvard University Press ; and 
Piketty, T., Yang. L., and Zucman, G. (2019), "Capital Accumulation, Private Property, and Rising Inequality in 
China, 1978 -2015", American Economic Review , Vol. 109, No.  7, pp.  2469-2496.  WT/TPR/S/ 415 • China  
 
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   2015  2016  2017  2018  2019  2020  
Required reserve ratio (RRR) (% of bank deposits)  17.5  17.0   ..   ..   ..   ..  
Excess reserve ratio (% of bank deposits)   2.1   ..   ..   ..   ..   ..  
Fiscal policyd (% of GDP)        
Financial deficit  -3.4 -3.8 -3.7 -4.1 -4.9  ..  
Total revenue  22.1 21.4 20.7 19.9 19.2  ..  
Tax revenue  18.1 17.5 17.4 17.0 15.9  ..  
Total expenditure  25.5 25.2 24.4 24.0 24.1  ..  
General government gross debt  41.1 44.2 46.8 50.6 51.6  ..  
Saving and investment (source: National Bureau of Statistics)      
GDP by expenditure approach (CNY billion)  69,209.4  74,598.1  82,898.3  91,577.4  99,070.8   ..  
Final consumption expenditure (CNY billion)  37,192.1  41,080.6  45,651.8  50,613.5  55,263.2   ..  
Households  26,020.2  28,866.8  32,069.0  35,412.4  38,718.8   ..  
Government  11,171.8  12,213.8  13,582.9  15,201.1  16,544.4   ..  
Gross capital formation (CNY billion)  29,782.7  31,819.9  35,788.6  40,258.5  42,667.9   ..  
Net exports of goods and services (CNY billion)  2,234.6  1,697.6  1,457.8  706.0  1,139.8   ..  
Savings (CNY billion)  31,354.1  33,196.5  37,405.9  40,805.9  43,807.7   ..  
Savings (% of GDP by expenditure)  45.3 44.5 45.1 44.6 44.2  ..  
Investment (% GDP by expenditure)  43.0 42.7 43.2 44.0 43.1  ..  
Savings -investment gap (% of GDP by 
expenditure)  2.3 1.8 1.9 0.6 1.2  ..  
Saving and investment (source: IMF)        
Gross national savings (% of GDP)  45.8  44.5  44.8  44.1  44.1 45.0 
Gross investment (% of GDP)  43.0  42.7  43.2  44.0  43.1 43.1 
Savings -investment gap (% of GDP)   2.8   1.8   1.6   0.1  1.0 1.9 
External sector (% of GDP, unless otherwise indicated)       
Current account balance   2.6   1.7   1.5   0.2   0.7   1.9  
Net merchandise trade   5.2   4.4   3.9   2.7   2.8   3.5  
Value of exports  19.4  17.7  18.0  17.4  16.7  17.0  
Value of imports  14.2  13.4  14.1  14.7  14.0  13.5  
Services balance  -2.0  -2.1  -2.1  -2.1  -1.8  -1.0  
Capital account   0.0  -0.0  -0.0  -0.0  -0.0  -0.0  
Financial account (excluding reserve assets)  -0.8  0.2   0.1   1.1   0.2  -0.7  
Direct investment , net  0.6  -0.4   0.2   0.7   0.4   0.7  
Reserve assets   3.1   3.9  -0.7  -0.1   0.1  -0.2  
Merchandise exportse (percentage change)  -4.5  -7.2  11.4   9.1  -1.3   4.6  
Merchandise importse (percentage change)   -13.4  -4.2  16.0  17.1  -2.1  -0.6  
Service exportse (percentage change)  -0.8  -4.1   2.2   9.6   4.6   -3.7  
Service importse (percentage change)   0.7   1.3   6.9  11.4  -3.8   -24.7  
Gross official reservesf (USD billion; end -period)   3,406.1   3,097.8   3,235.9   3,168.0   3,222.9   3,356.5  
Foreign currency reserves (USD billion; end -
period)   3,330.4   3,010.5   3,139.9   3,072.7   3,107.9   3,216.5  
Total external debt (USD billion; end -period)   1,383.0   1,415.8   1,758.0   1,982.8   2,057.3   2,132.4  
Debt service ratiog  5.0   6.1   5.5   5.5   ..   ..  
.. Not available.  
a Refers to the growth of GDP multiplied by the respective contribution share.  
b Registered unemployment in urban areas.  
c A positive increase in the REER means an appreciation of the CNY relative to the other major 
currencies in the index.  
d Including central and local governments.  
e Growth rates on merchandise and services trade are based on USD.  
f Including foreign currency reserves, IMF reserve position, special drawing rights, and gold.  
g Debt service ratio refers to the ratio of the payment of principal and interest  of foreign debts to the 
foreign exchange receipts from foreign trade and non -trade services of the current year.  
Source:  National Bureau of Statistics; State Administration of Foreign Exchange; People's Bank of China; and 
the IMF.  
1.4.  Since the global financi al crisis in 2008, China has experienced a marked slowdown in growth 
of total factor productivity (TFP), according to a World Bank study; the authorities indicate that no 
estimates of TFP were conducted by the Government, and they do not agree with this as sessment.6 
Aggregate TFP growth is reported to have slowed from 2.8% in 1998 -2008 to 0.7% in 2009 -18. In 
2017, signs of improving labour productivity and TFP growth emerged, but both remain significantly 
lower than their pre -crisis levels. According to th is study, it would also appear that the allocation of 
a larger share of credit and investment to infrastructure and housing led to lower returns on capital, 
a rapid build -up in debt, and higher risks to growth. Also, an academic study suggests that the 
resurgence in the state sector following the global financial crisis may have contributed to larger 
 
6 Brandt, L., Litwack, J., et al. (2020), China's Productivit y Slowdown and Future Growth Potential , 
World Bank Policy Research Working Paper 9298.  WT/TPR/S/ 415 • China  
 
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  entry barriers for non -state firms and, hence, lower non -state sector growth.7 The authorities do not 
agree with these views.8 
1.5.  Under its 14th Five-Year Plan for Economic and Social Development (2021 -25), China aims to 
achieve "sustained and healthy" economic development in 2021 -25, with a focus on higher quality 
growth.9 While not suggesting specific GDP  growth targets, the Plan lays out a 15 -year goal to raise 
per capita GDP levels to those of a moderately developed country by 2035, while strengthening 
China's technological capacities, developing a robust domestic market, and reaffirming a significant 
green transformation of production and lif estyles.  
1.2  Recent Economic Developments  
1.2.1   Growth and impact of COVID ‑19 
1.6.  The COVID ‑19 pandemic has posed an unprecedented shock to China's economy. Besides 
inflicting human cost s, it has had a major impact on output, trade, and employment. At the beginning 
of 2020, economic growth fell to its lowest level in 40 years: between the last quarter of 2019 and 
the first quarter of 2020, growth fell by almost 13 percentage points, from 5.8% to -6.8%.10 Apart 
from financial services and information technology, all secto rs were severely hit. Over 100  million 
workers were directly affected by the pandemic, by being put on unpaid leave  in retention schemes 
or reduced -work programmes, exiting the labour market, or becoming unemployed.11 In May  2020, 
the Government abandoned the announcement of the annual GDP target for the first time in more 
than 25 years due to factors that are difficult to predict, such as the coronavirus pandemic and 
uncertainties around trade.  
1.7.  Fuelled by a middle class that has been increasing both in number and in average income, 
consumption played an important role in sustaining economic growth until 2019, although household 
saving rates remained high. Over the same period, investment growth slowed. Starting in mid -2020, 
China's economy began to recover from the pandemic, as economic activity normalized. The 
recovery was mainly driven by public investment and international trade, whereas private 
consumption remained sluggish in the presence of continued uncertainties ; the authorities consider 
that the recovery in private consumption gain ed momentum in recent months , as observed in retail 
sales of consumer goods .  
1.8.  Poverty rates fell during the review period. According to the authorities, t he incidence of 
poverty dropped from 3.1% in 2017 to 1.7% in 2018 and  to 0.6% in 2019, using the 2011 poverty 
line.12 At the same time, income levels of those over the poverty line or living in poor regions rose 
significantly. The authorities also underline the results that were achieved regarding access to basic 
education,  electricity, healthcare, and improved infrastructure. The authorities further indicate 
China's aim to completely eradicate poverty by 2020.  
1.9.  With regard to the sectoral composition of China's GDP, the long -term structural change away 
from industry towards services continued during the review period (Table 1.2). The contribution of 
agriculture to GDP fell from 8.7% in 2015 to 7.3% in 2018, before slightly climbing again during the 
pandemic. While the share of industry fell, it remains very high by international comparison, at 
around 31%. Services now make up 55% of China's GDP, up from 51% in 2015. The fastest -growing 
service sectors during the review period include information transmission, software, and information 
 
7 Lardy, N. (2019), The State Strikes Back: The End of Economic Reform in China?  Washington, DC: 
Peterson Institute for International Economics.  
8 According to the autho rities, by end -2020, the balance of CNY real estate loans grew by 11.7% year -
on-year, 3.1 percentage points lower than the growth rate of end -2019; according to China's official statistics, 
in regard to profit, the growth rate of private companies was high er than that of state -owned enterprises.  
9 NDRC. Viewed at: https://www.ndrc.gov.cn/xxgk/zcfb/ghwb/202103/t20210323_1270124.html . 
10 Data provided by the authorities.  
11 ILO (2020), China – Rapid Assessment of the Impact of COVID ‑19 on Employment . The authorities 
indicate that in 2020 11.86 million new jobs were created for urban residents, and the average surveyed urban 
unemployment rate was 5.6%.  
12 It should be noted that C hina's progress in poverty alleviation is strongly dependent on the poverty 
line chosen as a benchmark. According to an academic study, progress is most impressive when using the 
1985 poverty line, equivalent to USD  0.98 in 2011 prices. The use of the 2000  (equivalent to USD  1.30 in 2011 
prices) or the 2011 (USD  2.29) poverty lines leads to lower poverty reduction. Chen, S. and Ravallion, M. 
(2020), Reconciling the Conflicting Narratives on Poverty in China , NBER Working Paper 28147.  WT/TPR/S/ 415 • China  
 
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  technology; and leasing and business services. Nevertheless, the pandemic -related slump was 
strong for individual subsectors such as accommodation and food service activities, as well as 
wholesale and retail trade.  
Table 1.2 GDP by sector, 2015 -20 
    2015  2016  2017  2018  2019  2020  
GDP by industry at constant prices (annual percentage change)       
Agriculture, forestry and fishing  4.0  3.5  4.1  3.6  3.2  3.1  
Industrya 5.7  5.7  6.2  6.1  4.8  2.4   
Manufacturing  6.2  5.9  6.5  6.1  4.6  2.3  
Construction  7.3  7.7  3.9  4.8  5.2  3.5  
Services  8.8  8.1  8.3  8.0  7.2  2.1   
Wholesale and retail trade  6.7  7.7  7.8  6.7  5.6  -1.3   
Accommodation and food service activities  6.6  7.7  8.2  6.7  5.5  -13.1   
Transport, storage and communication  4.4  6.9  9.6  8.3  6.5  0.5   
Financial intermediation  16.7  4.8  4.8  4.8  6.6  7.0   
Real estate  3.8  8.8  7.0  3.5  2.6  2.9   
Information transmission, software and information 
technology  13.7  16.9  20.5  27.8  21.7  16.9  
 
Leasing and business services  11.1  13.0  12.0  10.9  8.7  -5.3   
Other  8.7  8.0  7.8  7.6  6.9  1.0  
Share of main sectors in current GDP (%)        
Agriculture, forestry and fishing  8.7  8.4  7.8  7.3  7.5  8.0  
Industrya 34.1  32.9  33.1  32.8  31.6  30.8   
Manufacturing  29.0  28.1  28.1  27.8  26.8  26.2  
Construction  6.9  6.9  7.0  7.1  7.2  7.2  
Services  50.8  52.4  52.7 53.3  54.3  54.5   
Wholesale and retail trade  9.8  9.9  9.8  9.7  9.7  9.4   
Accommodation and food service activities  1.8  1.8  1.8  1.8  1.8  1.6   
Transport, storage and communication  4.4  4.4  4.5  4.4  4.3  4.1   
Financial intermediation  8.2  8.0  7.8  7.7  7.7  8.3   
Real estate  6.2  6.7  6.9  7.0  7.1  7.3   
Information transmission, software and information 
technology  2.5  2.7  2.9  3.1  3.4  3.7  
 
Leasing and business services  2.6  2.9  3.0  3.2  3.3  3.1   
Otherb 14.7  15.4  15.6  15.9  16.4  16.5  
a Including mining and quarrying, manufacturing, and production and supply of electricity.  
b Includes scientific research and technical services; water, environment, and public facilities 
management; resident services, repairs and other services; education; health and social work; 
culture, sports and entertainment; and public management, social security, and social organizations.  
Source:  National Bureau of Statistics. Viewed at: https://data.stats.gov.cn/english/easyquery.htm?cn=B01 . 
1.10.   Swift fiscal and monetary policy reactions (Section 1.2.2) helped mitigate the  economic 
impact of the COVID ‑19 pandemic and prepare for the recovery. GDP growth was 2.3% in 2020, 
which made China the only G -20 economy with a positive growth rate that year. Growth is projected 
to be over 6% in 2021, as economic activities continue to  normalize and further domestic outbreaks 
of COVID -19 remain under control. However, according to the IMF, risks of the projection are tilted 
to the downside, with a possible resurgence of the pandemic and a tightening of financial 
conditions.13 
1.2.2   Monetary a nd exchange rate policy  
1.11.   Price stability remains the primary, but not the only, goal of monetary policy. Under the Law 
on the People's Bank of China (PBOC), the objective of monetary policy is to maintain the stability 
of the value of the currency and there by promote economic growth. However, the PBOC refrains 
from explicit inflation targeting. Overall, monetary policy remained prudent until early 2020.  
1.12.   In August 2019, the PBOC changed the formation mechanism of China's lending benchmark 
rate, the loan prime  rate (LPR). With a view to better reflecting market dynamics, the new LPR is 
linked to rates set during open market operations, namely the PBOC's medium -term lending facility, 
which is determined by broader financial system demand for central bank liquidi ty. The number of 
quotation banks was expanded from national banks to urban commercial banks, rural commercial 
 
13 IMF (2021), People's Republic of China: Staff Report for the 2020 Article  IV Consultation , IMF Country 
Report No.  21/6. The authorities indicate that they do not agree with various conclusions of recent IMF and 
OECD reports.  WT/TPR/S/ 415 • China  
 
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  banks, foreign -invested banks, and private banks. Since August 2019, the new LPR has been 
announced on the 20th of every month, in lieu of publis hing it on a daily basis.  
1.13.   With a view to safeguarding financial market stability and providing liquidity to the banking 
system during the pandemic, the PBOC expanded its relending facilities to provide targeted support 
to manufacturers of medical supplies and daily necessities. Furthermore, the authorities tolerated 
rising levels of non -performing loans in heavily impacted regions and sectors, and introduced a 
payment moratorium for most micro, small, and medium -sized enterprises (MSMEs) and other 
eligible firms until end -2021. Furthermore, the PBOC lowered various policy rates. Non -interest rate 
instruments deployed by the PBOC aimed to provide additional support especially to smaller firms. 
They included expanding relending facilities, reducing targeted re serve requirement ratios, 
increasing bank lending targets, expanding credit support by policy banks, subsidizing local banks' 
repayment moratoria, and introducing a zero -interest scheme for uncollateralized lending to MSMEs. 
The various measures led to a r apid increase in bank lending and had a significant positive measure 
on corporate bond issuance.  
1.14.   As a result of the Government's stabilizing measures, however, financial stability risks 
increased.14 According to the IMF, these risks include a strong increa se in private sector debt, a 
likely deterioration of credit quality, and intensified pressure on small banks and some local 
governments. The authorities consider that the quality of credit assets of commercial banks is 
basically stable. The IMF estimates c orporate debt to have increased by some 10 percentage points 
to 127% of GDP in 2020, while local government debt (excluding local government financing 
vehicles) also rose rapidly, to some 25% of GDP.  
1.15.   The CPI inflation rate was low during the review period. However, in the first half of 2020, 
inflation picked up, to increase to 3.8%, mainly caused by increasing food (notably pork) prices due 
to the lingering effects of the African swine fever and heavy rains and floods. In November  2020, 
the CPI fell by 0.5%, China's first decrease in the CPI since November  2009. The decrease in prices 
was caused by a drop in food prices, notably of pork. 
1.16.   China has a managed floating exchange rate regime. Since 2015, the exchange rate of the 
Chinese yuan (CNY) has been determined with reference to a basket of currencies with a publicly 
known composition; the CNY's central  parity is determined daily as a "fi x". The fix takes into account 
the previous day's closing rate, and the move of the currency basket overnight. The use of the 
counter -cyclical adjustment factor in the daily trading band's central parity formation, which was 
introduced in 2017, was phased out in October 2020. Market makers can deviate 2% in either 
direction. At the end of 2020, the central parity of the CNY exchange rate was CNY 6.5249 per 
US dollar, down from a seasonal high of CNY  7.1690 in May 2020.  
1.17.   Officially reported foreign exchange r eserves have held steady at around USD  3.1 trillion since 
mid-2016, signalling that the CNY faced no great appreciation or depreciation pressure during the 
review period.  
1.18.   China continued its efforts during the review period to further internationalize the CNY; for 
example,  it took measures including bilateral swap agreements15, the pursuit of alternatives to the 
SWIFT inter -bank payments system16, and investment in credit rating agencies for sovereign debt. 
According to the authorities, China promotes the two-way opening of the capital market , facilitates 
foreign investors to invest in CNY assets, optimiz es policies on cross -border CNY business, promotes 
trade and investment facilitation, and further improves the CNY internationalization infrastructure . 
About 70 countries now also use the CNY as reserve currency. Yet as at mid -2020, only about 2% 
of global payments were conducted through the CNY.17 It would appear that regulations on capital 
movements (see below) constitute a major obstacle for the further in ternationalization of the CNY. 
 
14 IMF (2021), People's Republic of China: Staff Report for the 2020 Article  IV Consultation , IMF Country 
Report No.  21/6.  
15 As at January 2021, China entered into bilateral swap agreements with 40 trading partners. The 
largest are with Hong Kong, China (CNY  450 billion), the Republic of Korea (CNY  400 b illion), the 
United  Kingdom (CNY  350 billion), and Singapore (CNY  300 billion).  
16 China launched the China Inter -bank Payment Service (CIPS) clearing and settlement services system 
in 2015. Supervised by the Central Bank, CIPS states that it processed CNY  181.8 billion (USD  28.2 billion) a 
day in 2020, with participation of banks from 99 countries and regions.  
17 PBOC (2020), 2020 RMB Internationalization Report . According to the Report, more than 70 central 
banks and monetary authorities have incorporated the CNY into their foreign exchange reserves.  WT/TPR/S/ 415 • China  
 
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  China's bilateral lending to the rest of the world substantially increased over the past years 
(Table  A1.1).  
1.19.   Since 2014, the PBOC has been developing a central bank digital currency, the e -CNY or 
e-renminbi. It is designed to  be a legal tender combining digital currency and electronic payment 
characteristics, thus serving as cash (M0). The e -CNY is currently being tested across several 
regions, selected banks, and electronic payment platforms. It is expected to offer a higher degree 
of anonymity and lower handling charges than those of existing payment providers, higher 
compatibility across platforms, and, by broadening the reach of people with limited access to finance, 
to lead to more financial inclusion. The PBOC plans to us e the e -CNY for domestic transactions 
initially.  
1.20.   The CNY is fully convertible for current account transactions and partially convertible for some 
capital account transactions. Residents and non -residents are permitted to use the CNY for foreign 
direct inve stment.  
1.21.   Regulations on capital movements, set by the State Administration on Foreign Exchange 
(SAFE), remain in place on inflows and outflows. New foreign exchange measures entered into force 
on 1 January  2020. The 12 measures introduced various relaxation s and simplifications and 
extended the scope and application of existing regional pilot schemes.  
1.22.   "Qualified institutional investors" (overseas institutional investors that have been approved 
by the China Securities Regulatory Commission) may invest in Chin a's stock and bond market 
through specific channels. Regulations on portfolio inflows have been further liberalized. In 
November 2020, the two  major inbound foreign investment program mes (Qualified Foreign 
Institutional Investors, QFII , and Renminbi Qualified Foreign Institutional Investors, RQFII) were 
combined, while applications were simplified, review cycles shortened, data submission 
requirements reduced, and some restrictions lifted. Foreign portfolio investment (the market value 
of equities held by QFII/RQFII) in China amounted to CNY  1,081 billion in February  2021.  
1.2.3   Fiscal policy  
1.23.   Against the background of dampening of domestic demand and weaker exports, partly 
resulting from trade tensions, the authorities resorted to various stim ulus measures during the 
review period, involving taxes, access to credit, and infrastructure investment; however, according 
to an OECD study, the stimulus may increase corporate sector indebtedness and, more generally, 
reverse progress in the deleveraging  of state -owned enterprises (SOEs).18 The authorities do not 
agree with the conclusion of the OECD study. The y indicate  that the description  in the study does 
not reflect the fact s. For example, they state that the overall debt risk of central SOEs is drop ping; 
there has been no bond default since 2017 , and the average debt ratio of central SOEs decreased 
from 66.7% in 2016 to 65.0% in 2019.  
1.24.   With a view to mitigating the economic impact of the COVID ‑19 pandemic, the Government 
put in place strong and except ionally high fiscal support, including an extension of the coverage of 
unemployment insurance. The Government also provided various tax relief measures and partially 
waived social security contributions by employers to protect employment. With the reopenin g of the 
economy, fiscal policy measures shifted to demand support, including  infrastructure investment, 
while employment measures remained important.  
1.25.   According to the IMF, the total amount of discretionary fiscal policy measures implemented 
in 2020 was es timated at 4.7% of GDP. Coupled with declining tax revenue, the measures 
contributed to a strong increase in the deficit of the Central Government, to some 18.2% of GDP.19 
This is a major increase compared with the period since 2015, when fiscal deficits o scillated between 
3% and 5% of GDP. As a result, China's augmented debt20 to GDP ratio increased to some 92% 
 
18 IMF (2021), People's Republic of China: Staff Report for the 2020 Article  IV Consultation , IMF Country 
Report No.  21/6; and OECD (2019), OECD Economic Surveys: China 2019 . 
19 IMF (2021), People's Republic of China: Staff Report for the 2020 Article  IV Consultation , IMF Country 
Report No.  21/6.  
20 The augmented deficit, as defined by the IMF, includes local government investment vehicles, 
government -guided funds, and other off -budget activities.  WT/TPR/S/ 415 • China  
 
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  in 2020. Against the background of narrowing fiscal space and a rapidly ageing  population, fiscal 
consolidation with appropriate adjustment policie s will be important in the medium term.  
1.26.   Value added tax and other indirect taxes contribute to some 65% of fiscal revenues, whereas 
corporate taxes account for around 26% and the personal income tax (PIT) for some 5%. A 2018 
reform of the PIT raised the ta xable income threshold and introduced a wide range of deductions 
that further narrowed the tax base. Customs tariffs and other import duties accounted for about 
1.8% of total fiscal revenue in 2018. China's tax to GDP ratio amounted to 17% in 2018, and to 
16% in 2019.  
1.2.4   Structural measures  
1.27.   Structural reforms since China's previous Review include the implementation of tariff cuts 
(Section  3.1.3), the further opening of the financial sector with a shortening of the negative list for 
financial FDI, and the r emoval of restrictions on the investment quota for foreign institutional 
investors (Section 4. 4.1). 
1.28.   Labour market reforms provided for a cautious liberalization of the hukou21 or permit system, 
with a view to increasing labour market mobility and improving  the allocation of labour. Under the 
2019 Urbanization Plan, cities with populations of less than 3 million eliminated all restrictions on 
household registration. Moreover, cities with populations between 3 million and 5  million relaxed 
restrictions on new  migrants and removed limits on key population groups.  
1.29.   State ownership remains important, even in non -strategic, commercially oriented sectors, 
with SOEs still having large market shares. At the same time, reform of SOEs proceeded almost 
exclusively in the  context of mixed ownership (Section  3.3.5). 
1.30.   Various regulatory measures were undertaken during the review period in order to ensure 
financial stability by enhancing prudential regulations and deleveraging highly indebted corporations 
(Section 4. 4.1). Thes e measures include the reining -in of shadow banks, tighter rules on informal 
lending, the merger of the banking regulator and the insurance regulator into the China Banking and 
Insurance Regulatory Commission (CBIRC) in 2018, and ongoing reform s of the com prehensive 
national social credit system, which covers firms and individuals.22 
1.31.   Under the One Belt and One Road Initiative, or the Belt and Road Initiative (BRI)23, launched 
in 2013, the Government seeks to connect nearly 140 countries and regions through rail lines, 
pipelines, highways, ports, and other infrastructure. As at March 2021, total expenditure under the 
BRI amounted to USD  640 billion. According an OECD study, infrastructure projects of the BRI may 
have an impact on the debt burden on recipient countries.24 Nonetheless, the authorities do not 
agree with the conclusion of the study. The  authorities also underline the trade -enhancing and 
mutually beneficiar y nature of the projects.  
1.2.5   Balance of payments  
1.32.   China's current account surplus started to decline in 2016, with a surplus of USD  191.3 billion 
(1.7% of GDP). In 2018, the surplus narrowed to USD  24.1 billion, but grew again to 
USD 102.9  billion in 2019 (Tab le 1.3). Available information for 2020 indicates a widening of the 
surplus, to USD  273.9 billion (1.9% of GDP), caused mainly by lower commodity prices, the collapse 
 
21 Hukou is a household registration system. The authorities state that the registration distinction 
between agricultural and non -agricultural households has been abolished, and certain policies differentiating 
urban and rural household registrations have been abolished.  
22 China's social credit system is composed of databases and initiatives that monitor and assess the 
trustworthiness of individuals, companies, and government entities. Each entry is given a social credit score, 
with rewards for those who have a high rating, and negative consequences for those with low scores. The 
databases are managed by the National Development and Reform Commission (NDRC), the PBOC, and the 
country's court system.  
23 The BRI is a network of ports, roads, railways, airports, powe r plants, oil and gas pipelines and 
refineries, and free trade zones. It also incorporates the supporting IT, telecom, and financial infrastructure. 
On land, it follows the ancient Silk Road connecting Asia with Europe, while at sea, the Maritime Silk Road  
connects eastern China to the Middle East, Africa, and Europe.  
24 OECD (2019), OECD Economic Surveys: China 2019 . WT/TPR/S/ 415 • China  
 
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  in outbound tourism, and a surge in exports of pandemic -related and other goods. For 2021 , the 
authorities predict a narrowing of the current account surplus.  
Table 1.3 Balance of payments, 2015 -20 
(USD million)  
  2015  2016  2017  2018  2019  2020  
Current account  293,022  191,337  188,676  24,131  102,910  273,980  
Goods and services balance  357,871  255,737  217,010  87,905  131,844  369,673  
Trade balance  576,191  488,883  475,941  380,074  392,993  515,000  
 Exports  2,142,753  1,989,519  2,216,214  2,417,443  2,386,640  2,497,156  
 Imports  1,566,562  1,500,636  1,740,272  2,037,369  1,993,647  1,982,156  
Service balance  -218,320  -233,146  -258,932  -292,168  -261,149  -145,327  
 Exports  217,399  208,404  213,064  233,567  244,359  235,209  
 Imports  435,719  441,550  471,995  525,735  505,508  380,536  
Income  -52,199  -54,880  -16,478  -61,365  -39,184  -105,173  
Credit  223,816  226,654  289,698  268,496  273,514  241,681  
 Compensation of employees  33,105  26,883  21,699  18,109  14,258  14,736  
 Investment income  189,885  199,210  267,303  248,295  257,464  224,393  
 Other  826 560 697 2,092  1,792  2,552  
Debit  276,015  281,533  306,176  329,861  312,699  346,854  
 Compensation of employees  5,718  6,211  6,762  9,946  11,157  14,360  
 Investment income  270,139  275,108  299,156  319,616  300,820  331,508  
 Other  158 215 258 299 722 986 
Current transfers  -12,649  -9,520  -11,856  -2,410  10,250  9,480  
 Credit  35,938  30,900  28,168  27,757  25,907  37,607  
 Debit  48,588  40,420  40,024  30,167  15,657  28,127  
Capital account  316 -344 -91 -569 -327 -77 
Financial account  -91,523  27,594  18,021  153,795  26,598  -105,765  
 Assets  9,454  -231,985  -423,920  -362,039  -260,532  -626,329  
 Liabilities  -100,977  259,579  441,941  515,835  287,130  520,563  
Financial account excluding reserve 
assets  -434,462  -416,070  109,537  172,682  7,308  -77,759  
Direct investment  68,099  -41,675  27,791  92,338  50,260  102,554  
Assets  -174,391  -216,424  -138,293  -143,027  -136,910  -109,922  
Liabilities  242,489  174,750  166,084  235,365  187,170  212,476  
Portfolio investment  -66,470  -52,271  29,498  106,874  57,948  87,329  
Assets  -73,209  -102,770  -94,803  -53,507  -89,419  -167,333  
 Equity securities  -39,679  -38,238  -32,847  -17,712  -29,332  -130,996  
 Debt securities  -33,530  -64,531  -61,956  -35,795  -60,087  -36,338  
Liabilities  6,739  50,499  124,301  160,381  147,366  254,662  
 Equity securities  14,964  23,416  36,209  60,668  44,906  64,138  
 Debt securities  -8,226  27,083  88,092  99,713  102,460  190,525  
 Financial derivates (other than 
reserves) and employee stock options  -2,087  -5,384  354 -6,153  -2,355  -11,409  
Assets  -3,420  -6,550  1,538  -4,816  1,393  -6,901  
Liabilities  1,333  1,166  -1,185  -1,338  -3,748  -4,508  
Other investment  -434,004  -316,741  51,894  -20,376  -98,545  -256,234  
Assets  -82,465  -349,906  -100,847  -141,803  -54,886  -314,166  
Other equity  -12 -2 40 -1,493  -1,491  -484 
Currency and deposits  -55,010  -64,280  -57,111  -14,999  -101,750  -130,397  
Loans  -47,464  -110,267  -43,466  -81,830  25,962  -128,177  
 Insurance, pension, and 
standardized guarantee schemes  -3,198  -266 -47 -573 -1,168  -3,330  
Trade credits and advances  -45,966  -100,800  -19,400  -65,300  36,800  -36,900  
Other accounts receivable  69,186  -74,292  19,137  22,392  -13,240  -14,878  
Liabilities  -351,538  33,165  152,742  121,427  -43,659  57,933  
Currency and deposits  -122,552  9,062  107,944  51,436  -55,734  77,437  
Loans  -166,667  -17,361  50,060  32,115  42,540  -35,442  
 Insurance, pension, and 
standardized guarantee schemes  2,393  -668 657 210 1,803  3,275  
Trade credits and advances  -62,283  16,200  -1,200  40,800  -28,750  7,550  
Other accounts payable  -2,428  25,932  -4,719  -3,135  -3,517  5,113  
Reserve assets  342,939  443,665  -91,516  -18,887  19,291  -28,006  
Net errors & omissions  -201,816  -218,587  -206,606  -177,358  -129,181  -168,138  
Note:  In the financial account, a positive value for assets represents a net decrease, while a negative value 
represents a net increase. A positive value for liabilities represents a net increase, while a negative 
value represents a net decrease.  
Source:  State Administration of Foreign Exchange. Viewed at: http://www.safe.gov.cn/ . 
1.33.   The financial account (excluding reserve assets) posted a strong deficit in 2015, a surplus 
between 2016 and 2019, and a deficit in 2020. Direct investment posted a surplus in all recent years 
except for 2016. Projects under the BRI played an important role in outward investments. The 
authorities  consider that the surplus was due in part to China's endeavours to open the economy. WT/TPR/S/ 415 • China  
 
- 24 - 
 
  The deficit on the portfolio investment account declined until 2016 and turned into a surplus in 2017. 
In 2020, the surplus amounted to USD  87.3 billion.  
1.34.   China's declinin g merchandise trade surplus was a major driver of its narrowing current 
account surplus. The merchandise trade surplus fell from USD  576 billion in 2015 to USD  380 billion 
in 2018, before climbing again to USD  393 billion in 2019. Available figures for 202 0 indicate that 
the COVID ‑19 pandemic led to a further increase in China's trade surplus, to USD  515 billion; in the 
first phase of the pandemic, imports plummeted more quickly than exports, and in the second phase 
exports recovered earlier. China's balanc e of trade in services has traditionally posted a deficit, which 
grew between 2015 and 2018, but fell in 2019 and 2020.  
1.3  Developments in Trade and Investment  
1.3.1   Trends and patterns in merchandise and services trade  
1.35.   China's merchandise exports increased every year between 2016 and 2019, to attain a peak 
of nearly USD  2.6 trillion in 2020 (Chart 1.1 and Table A1.2). In the first half of 2020, export levels 
fell due to the COVID ‑19 pandemic, but China's share of global manufacturing exports rose to a 
record high in the second half of the year. Exports received a boost because China was the 
first manufacturing power to resume operations after the first wave of international shutdowns, and 
it is the world's bigger producer of protective health equipment, such as masks and surgical gowns, 
and electronics related to working from home.  
1.36.   China's merchandise imports increased sharply between 2016 and 2018, but fell in 2019 
and 2020 (Table A1.3). During the pandemic, merchandise imports fell sharply, t o USD  931 billion 
in the first half of 2020, but the decrease in imports was less pronounced than that for exports. 
During the second half of 2020, imports recovered and contributed to sustaining global growth.  
1.37.   During the review period, the United  States a nd the European  Union (EU-27) remained 
China's main destinations for merchandise exports (Chart 1.2 and Table A1.4). The European  Union's 
share in China's exports increased from 13.5% in 2016 to 15.1% in 2020. Within the 
European  Union, the importance of G ermany and the Netherlands as export destinations further 
increased. The United  States' share fell, from over 19% in 2018 to 17.5% in 2020. Asia remains the 
most important region for China's goods exports, with a share of over 44% in 2020. Within Asia, 
Japan and the Republic of Korea are the most important trading partners. Africa and the Middle East 
received between 4% and 5% of China's exports, while the share for Latin America fluctuated 
around  6%. 
1.38.   On the import side, the European  Union is the most impor tant suppliers of goods, with a share 
of 12.6% of all imports in 2020 (Table A1.5). The share of the United  States in China's imports fell, 
from nearly 9% in 2015 to 6.6% in 2020. The share of imports originating in Asia fluctuated around 
47% between 2016 and 2019. It increased to over 49% in 2020. Australia's share increased over 
time, to 5.6% in 2020. Africa and the Middle  East account for 4% and 7% of China's imports, 
respectively.  
1.39.   Machinery and electrical equipment continue to represent a very large and  rising share in 
China's merchandise exports – over 44% in 2020 (Chart 1.1 and Table  A1.2). The share of textiles 
and textile articles fell from 12.0% in 2015 to 10.4% in 2019, and up slightly to 10.8% in  2020. The 
shares of chemical products and plastics increased during the same period.  
1.40.   At about 35%, machinery and electrical equipment make up an important and stable share 
of China's imports (Table A1.3). The share of mineral products in China's imports increased from 
some 17% in 2016 to 25% in 2019, mainl y caused by an increase of the share of fuels. Its share 
dropped to 22.1% in 2020. Until 2017, China was the leading importer of plastic waste (totalling 
USD 3,263 million), but since then it has reduced its imports to USD  49 million in 2018 , 
USD 0.5 million in 2019 , and USD  0.1 million in 2020 .25 
 
25 UN Comtrade database.  WT/TPR/S/ 415 • China  
 
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  1.41.   According to an academic study, it would appear that the structure of merchandise trade has 
been characterized by a rapid expansion of production stages conducted in China.26 It states that 
Chinese firms span more  production stages as they grow more productive, larger, and more 
experienced.  
Chart 1.1 Product composition of merchandise trade by main HS section, 2016 and 2020  
 
Source:  UN Comtrade database.  
 
26 Chor, D., Manova, K., and Yu, Z. (2020), Growing Like China: Firm Performance and Global 
Production Line Position , NBER Working Paper No.  27795, September 2020.  
Chart 1.1  Product composition of merchandise trade by main HS section, 2016 and 2020
2016 2020
Total:   USD 2,097.6 billion Total:  USD 2,590.6 billion  
Base metals & 
articles thereof
5.0%Chemicals 
6.9%Machinery;
electrical equipment
44.4%
Base metals &
articles thereof
5.7% 
Total:   USD 1,587.9 billion Total:   USD 2,055.6 billion Transport 
equipment
4.3%Textiles &
textile articles
10.8%Other
12.8%
Source:  UNSD, Comtrade database.Other 
10.2%Base metals &
articles thereof
7.4%
Other
11.8%Vegetables 
& cereals
3.4%
Transport
equipment
4.2%Transport 
equipment
4.4%  Other
14.4%
Chemicals 
7.3%Transport
equipment
6.1%Textiles & 
textile articles
12.1% 
Base metals 
& articles 
thereof
6.8%
Machinery; 
electrical equipment
42.8%Plastics & rubber
4.6%
Machinery;
electrical equipment
35.3% Machinery; 
electrical equipment
36.0% Plastics & rubber 
4.2% Plastics & rubber
4.7% Plastics & rubber
3.9%
Petroleum & 
mineral products
17.4%Petroleum & 
mineral products
22.1%
Precious stones
& metals
5.0%Chemicals 
5.3%Chemicals 
4.7%
Vegetables
& cereals
3.5%Precision
instruments
3.3%Misc. manufacturing
7.7%Exports 
Imports 
Precision 
instruments
6.1%Precision
instruments
5.1%Misc. manufacturing
7.0%
Precision 
instruments
3.5%WT/TPR/S/ 415 • China  
 
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  Chart 1.2 Direction of merchandise trade, 2016 and 2020  
 
a Commonwealth of Independent States, including certain associate and former member states.  
b Includes goods that have been exported from China and thereafter re -imported into China.  
Source:  UN Comtrade database.  
1.42.   Services exports grew from USD  217 billion in 2015 to USD  244 billion in 2019, but fell to 
USD 235 billion in 2020. They are mostly composed of various business services, transportation, 
and travel (Table 1.4). The relative importance of communication, computer, information, 
maintenance, repair, and other business services grew, while the shares of manufacturing services 
and travel decreased over time.  
Chart 1.2
Direction of merchandise trade, 2016 and 2020
2016 2020
Exports (f.o.b.)
Asia/Oceania
45.6%
Total:  USD 2,097.6 billion Total:  USD 2,590.6 billion
EU-27
11.9%Middle East
5.4%
CISa2.9%
United States
8.5%Australia
4.5%
Malaysia
3.1%Imports (c.i.f.)
EU-27
12.6%Australia
5.6%
CISa3.7%
United States
6.6%
Total:  USD 1,587.9 billion Total:  USD 2,055.6 billionJapan
6.2%
Middle East
6.0%Korea, Rep. of
8.4%Korea, Rep. of  
10.0%United States
18.4%Other Asia/
Oceania
18.4%
United States
17.5%Middle East
4.2%
Source :  UN Comtrade database.Japan
8.5%
Chinab
8.1%CISa
2.9%
EU-27
15.1%CISa2.7%Africa 
4.3%
Japan
9.2%
Other Asia/
Oceania
9.7%Hong Kong, China
10.5%
EU-27
13.5%Middle East
4.6%
Other Europe
4.0%
Other America
6.7%Hong Kong, China
13.7%Japan
5.5%
Chinese Taipei
9.8%Other Asia/
Oceania
19.4%
Africa 3.5%Other Asia/
Oceania
12.3%Korea, Rep. of
4.5%
Other Europe
4.3%Africa
4.3%
Chinese Taipei
8.7%
Asia/Oceania
49.4%Asia/Oceania
47.8%Asia/Oceania
44.2%
Other
America
5.0%Other 
America
4.7%Other America
7.4%
Africa 3.5%Korea, Rep. of
4.3%
Chinab
6.1%
a      Commonwealth of Independent States, including certain associate and former member states.     
b      Includes goods that have been exported from China and thereafter re -imported into China.Brazil
4.1%Brazil
2.9%Viet Nam
4.4% Viet Nam 2.9%
Malaysia
3.6%
Other Europe
4.3%Other Europe
2.8%Viet Nam
3.8%WT/TPR/S/ 415 • China  
 
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  Table 1.4 Composition of trade in services, 2015 -20 
    2015  2016  2017  2018  2019  2020  
Total credit (USD billion)  217.4  208.4  213.1  233.6  244.4  235.2    
% of total credit   
Manufacturing services on physical inputs  9.4 8.9 8.5 7.5 6.4 5.6  
Maintenance and repair services  1.7 2.5 2.8 3.1 4.2 3.3  
Transportation  17.8 16.2 17.5 18.1 18.9 24.1  
Travel  20.7 21.3 18.1 17.3 14.7 6.0  
Construction  7.7 6.1 5.7 5.8 5.9 5.4  
Insurance and pension  2.3 1.9 1.9 2.1 2.0 2.3  
Financial services  1.1 1.5 1.6 1.4 1.6 1.8  
Charges for the use of intellectual property  0.5 0.6 2.3 2.4 2.7 3.6  
Communication, computer & information  11.3 12.2 12.6 12.9 14.3 16.5  
Other business services  26.9 27.8 27.8 28.3 28.3 29.9  
Personal, cultural & recreational services  0.3 0.4 0.4 0.4 0.4 0.4  
Government goods and services  0.5 0.6 0.8 0.8 0.6 1.1 
Total debit (USD billion)  435.7  441.5  472.0  525.7  505.5  380.5    
% of total debit   
Manufacturing services on physical inputs  0.04 0.04 0.04 0.1 0.1 0.1  
Maintenance and repair services  0.3 0.4 0.5 0.5 0.7 0.9  
Transportation  19.6 18.2 19.8 20.8 20.8 24.9  
Travel  57.3 56.6 54.6 52.7 50.4 34.3  
Construction  2.3 1.9 1.8 1.6 1.8 2.1  
Insurance and pension  2.0 2.9 2.4 2.2 2.2 3.2  
Financial services  0.6 0.5 0.3 0.4 0.5 0.9  
Charges for the use of intellectual property  5.1 5.4 6.1 6.8 6.8 9.9  
Communication, computer & information  2.6 2.9 4.1 4.5 5.3 8.7  
Other business services  9.1 9.8 9.0 8.9 9.9 13.3  
Personal, cultural & recreational services  0.4 0.5 0.6 0.6 0.8 0.8  
Government goods and services  0.6 0.7 0.7 0.9 0.7 0.9 
Source:  Information provided by the authorities.  
1.43.   According to the authorities, in 2019, China's major trading partners for trade in services were 
Hong Kong, China; the  United  States; Japan; Singapore; Germany; and the United Kingdom.  
1.44.   Services imports grew from USD  436 billion in 2015 to USD  506 billion in 2019, but fell to 
USD 380 billion in 2020. Travel is traditionally by far the most important individual category, though 
its share had already declined before the pandemic, followed by transport services and business 
services. While the contribution of travel and construction services decreas ed, the relative 
importance of telecommunications, computer and information services, and of charges for the use 
of intellectual property grew over time.  
1.3.2   Trends and patterns in FDI  
1.45.   Foreign investment into China continued to grow between 2016 and 2019, although at a much 
slower pace than in previous periods (Chart 1.3). China's inward FDI stock amounted to 
USD 1.8 trillion in 2019. Outward FDI, after lagging behind for many years, ove rtook inward FDI 
in 2015. It peaked in 2016 and has fallen sharply every year since. The total stock of China's outward 
FDI amounted to USD  2.1 trillion in 2019.  
1.46.   Hong Kong, China is by far the most important source for FDI into China ( Table  1.5). Other 
important sources include Singapore, the Republic of Korea, the British Virgin Islands, Japan, and 
the United  States.  
1.47.   The manufacturing sector remains by far the largest recipient of FDI into China, followed by 
real estate and leasing and bu siness services (Table 1.6). Sectors such as agriculture, mining, and 
construction are of limited importance for FDI.  WT/TPR/S/ 415 • China  
 
- 28 - 
 
  Chart 1.3 Foreign direct investment, 2000 -19 
(USD billion)  
 
Source:  UNCTAD, World Investment Report 2020 . Viewed at: 
https://unctad.org/en/Pages/DIAE/World%20Investment%20Report/Annex -Tables.aspx . 
Table 1.5 Inward foreign direct investment by source, 2015 -19 
(USD billion)  
 2015  2016  2017  2018  2019   
% of total FDI  
Total  126.27  126.00  131.04  134.97  138.14   
Hong Kong, China  86.39  81.47  94.51  89.92  96.30  69.7 
Singapore  6.90 6.05 4.76 5.21 7.59 5.5 
Korea, Republic of  3.20 4.75 3.67 4.67 5.54 4.0 
British Virgin Islands  7.39 6.74 3.99 4.71 4.96 3.6 
Japan  3.20 4.75 3.26 3.80 3.72 2.7 
United  States  2.09 3.10 2.65 2.69 2.69 1.9 
Cayman Islands  2.09 3.10 2.18 4.07 2.56 1.9 
Netherlands  0.75 0.56 2.17 1.27 1.80 1.3 
Macao, China  0.89 0.82 0.64 1.28 1.74 1.3 
Germany  1.44 1.39 1.54 3.67 1.66 1.2 
Separate Customs 
Territory of Taiwan, 
Penghu, Kinmen and 
Matsu ( Chinese  Taipei ) 1.56 2.39 1.77 1.39 1.59 1.1 
Samoa  7.63 8.08 1.23 1.55 1.19 0.9 
United Kingdom  0.00 0.00 1.00 2.48 0.86 0.6 
France  1.22 0.87 0.79 1.01 0.79 0.6 
Switzerland  0.22 0.55 0.46 0.60 0.64 0.5 
Bermuda  0.71 0.46 1.34 2.17 0.48 0.4 
Other  0.60 0.96 5.06 4.47 4.03 2.9 
Note:  Figures refer to foreign capital actually used.  
Source:  WTO Secretariat calculations based on data from the National Bureau of Statistics. Viewed at: 
https://data.stats.gov.cn/english/easyquery.htm?cn=C01 . 
050100150200250
05001,0001,5002,0002,500
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
FDI inward stock FDI outward stock FDI inflow FDI outflowChart 1. Foreign direct investment, USD billion
Source:  UNCTAD, World Investment Report 2020.  Viewed at:  
https://unctad.org/en/Pages/DIAE/World%20Investment%20Report/Annex -Tables.aspx .Left-hand scale: Right -hand scale:WT/TPR/S/ 415 • China  
 
- 29 - 
 
  Table 1.6 Inward foreign direct investment by main sectors, 2015 -19 
(USD billion)   
2015  2016  2017  2018  2019   
% of total FDI  
Total  126.27  126.00  131.04  134.97  138.14  100.0  
Agriculture, forestry and fishery  1.53 1.90 1.07 0.80 0.56 0.4 
Mining  0.24 0.10 1.30 1.23 2.19 1.6 
Manufacturing  39.54  35.49  33.51  41.17  35.37  25.6 
Electricity, gas and water  2.25 2.15 3.52 4.42 3.52 2.6 
Construction  1.56 2.48 2.62 1.49 1.22 0.9 
Wholesale and retail trade  12.02  15.87  11.48  9.77 9.05 6.6 
Transport, storage and post  4.19 5.09 5.59 4.73 4.53 3.3 
Hotels and catering service  0.43 0.37 0.42 0.90 0.97 0.7 
Information transmission, computer 
and software  3.84 8.44 20.92  11.66  14.68  10.6 
Financial intermediation  14.97  10.29  7.92 8.70 7.13 5.2 
Real estate  28.99  19.66  16.86  22.47  23.47  17.0 
Leasing and business services  10.05  16.13  16.74  18.87  22.07  16.0 
Scientific research, technical services 
and geological prospecting  4.53 6.52 6.84 6.81 11.17  8.1 
Water conservancy, environment and 
public facilities  0.43 0.42 0.57 0.47 0.52 0.4 
Other  1.68 1.11 1.68 1.46 1.67 1.2 
Note:  Figures refer to foreign capital actually used.  
Source:  WTO Secretariat calculations based on data from the National Bureau of Statistics. Viewed at: 
https://data.stats.gov.cn/english/easyquery.htm?cn=C01 . 
1.48.   China continues to be a significant  investor abroad, although annual outward flows have 
dropped considerably since 2017. The most important destinations are Hong Kong, China; the British 
Virgin Islands; Singapore; the United  States; and Indonesia (Table 1.7). Projects under the BRI play 
an important role for outward investment. The most important sectors for China's FDI abroad are 
leasing and business services, manufacturing, financial intermediation, and wholesale and retail 
trade (Table 1.8).  
1.49.   According to the authorities, investment under the BRI accounts for some 13% of China's 
recent outward FDI. It accounts for a wide geographical dispersion of the FDI stock. Investments 
are mostly concentrated in Central and South East Asia, mainly with a focus on infrastructure 
projects.  
Table 1.7 Outward FDI by main destination, 2015 -19 
(USD billion)   
2015  2016  2017  2018  2019   
% of total FDI  
Total  145.67  196.15  158.29  143.04  136.91  100.0  
Hong Kong, China  89.79  114.23  91.15  86.87  90.55  66.1 
British Virgin Islands  1.85 12.29  19.30  7.15 8.68 6.3 
Singapore  10.45  3.17 6.32 6.41 4.83 3.5 
United  States  8.03 16.98  6.43 7.48 3.81 2.8 
Indonesia  1.45 1.46 1.68 1.86 2.22 1.6 
Australia  3.40 4.19 4.24 1.99 2.09 1.5 
Viet Nam 0.56 1.28 0.76 1.15 1.65 1.2 
Germany  0.41 2.38 2.72 1.47 1.46 1.1 
Thailand  0.41 1.12 1.06 0.74 1.37 1.0 
United Kingdom  1.85 1.48 2.07 1.03 1.10 0.8 
Japan  0.24 0.34 0.44 0.47 0.67 0.5 
Macao, China  1.08 0.82 -1.02 0.81 0.59 0.4 
Korea, Republic of  1.32 1.15 0.66 1.03 0.56 0.4 
Cayman Islands  10.21  13.52  -6.61 5.47 -4.36 -3.2 
Other  14.61  21.73  29.09  19.11  21.68  15.8 
Source:  WTO Secretariat calculations based on data from the National Bureau of Statistics. Viewed at: 
https://data.stats.gov.cn/english/easyquery.htm?cn=C01 . WT/TPR/S/ 415 • China  
 
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  Table 1.8 Outward FDI by main sectors, 2015 -19 
(USD billion)   
2015  2016  2017  2018  2019   
% of total FDI  
Total  145.67  196.15  158.29  143.04  136.91  100.0  
Agriculture, forestry and fishery  2.57 3.29 2.51 2.56 2.44 1.8 
Mining  11.25  1.93 -3.70 4.63 5.13 3.7 
Manufacturing  19.99  29.05  29.51  19.11  20.24  14.8 
Electricity, gas and water  2.14 3.54 2.34 4.70 3.87 2.8 
Construction  3.74 4.39 6.53 3.62 3.78 2.8 
Wholesale and retail trade  19.22  20.89  26.31  12.24  19.47  14.2 
Transport, storage and post  2.73 1.68 5.47 5.16 3.88 2.8 
Hotels and catering service  0.72 1.63 -0.19 1.35 0.60 0.4 
Information transmission, computer 
and software  6.82 18.66  4.43 5.63 5.48 4.0 
Financial intermediation  24.25  14.92  18.79  21.72  19.95  14.6 
Real estate  7.79 15.25  6.80 3.07 3.42 2.5 
Leasing and business services  36.26  65.78  54.27  50.78  41.88  30.6 
Scientific research, technical services 
and geological prospecting  3.35 4.24 2.39 3.80 3.43 2.5 
Water conservancy, environment and 
public facilities  1.37 0.85 0.22 0.18 0.27 0.2 
Other  3.49 10.06  2.62 4.49 3.07 2.2 
Source:  WTO Secretariat calculations based on data from the National Bureau of Statistics. Viewed at: 
https://data.stats.gov.cn/english/easyquery.htm?cn=C01 . 
 WT/TPR/S/ 415 • China  
 
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  2  TRADE AND INVESTMENT REGIMES  
2.1  General Framework  
2.1.  China's general legal and institutional framework has remained largely unchanged since the 
previous Review.1 China's legislature comprises the National People's Congress (NPC) and its 
Standing Committee.2 The State Co uncil (the Central Government) is the executive body and the 
highest organ of state administration.3 China's judicial system consists of the Supreme People's 
Court, local People's Courts at different levels, and special courts dealing with, inter alia , intellectual 
property4, military, financial, and maritime issues.  
2.2.  During the review period, China proceeded with the reform of its judicial system, which was 
initiated in 1999 through a Five -Year Reform Program for People's Courts. The fifth cycle of such 
reforms was launched in May 2019 to cover the period 2019 -23. The main objectives include the 
enforcement of judicial accountability. In this regard, in December 2018, the Supreme People's Court 
promulgated the Opinions on the Further and Full Implementatio n of the Judicial Accountability 
System; in addition, the Opinions on Deepening the Comprehensive Supportive Reforms of the 
Judicial Accountability System were issued in July 2020. They aim to enhance the mechanisms of 
trial supervision and management and the uniform application of law, as well as improving the 
supportive mechanism  for judicial personnel . 
2.3.  Steps were also taken in recent years to further modernize the judicial specialization for issues 
related to e -commerce. In addition to the Hangzhou Inter net Court, which was established on 
18 August  2017, the Beijing Internet Court and the Guangzhou Internet Court were established on 
9 September 2018 and 28 September 2018, respectively. They aim to handle 11 types of Internet -
related cases, including contr acts for financial loans, the purchase of goods, services, online disputes 
about torts, and copyright infringements. The authorities state that the three Internet Courts had 
dealt with 248,258 Internet -related cases by end -December 2020.  
2.4.  In the hierarchy o f China's domestic legislation, the Constitution prevails over any other law or 
statute, followed by laws and administrative regulations (issued by the State Council); local, 
autonomous, and separate regulations; departmental rules (enacted by ministries a t the Central 
Government level or bodies directly under the State Council exercising regulatory functions); and 
local rules (enacted by the People's Government at the provincial, autonomous region, or municipal 
level directly under the State Council and th e People's Government of cities with districts or 
autonomous prefectures).  
2.5.  In order to regulate actions taken by various public bodies, including local governments, and 
prevent the introduction of policy measures that eliminate or restrict competition, on 1 June 2016, 
the State Council published the Opinions on Establishing a Fair Competition Review System in the 
Development of the Market System in an effort to  restrain regional authorities from adopting policies 
and practices that may impede competition. A ccording to the authorities, since the establishment of 
the system, all regions and departments have reviewed new policy measures concerning the 
economic activities of market entities in accordance with the requirements . 
2.6.  In principle, all trade -related rul es formulated by the authorities at all levels must comply with 
international trade agreements to which China is a party, including the Marrakesh Agreement 
 
1 WTO document WT/TPR/S/375/Rev.1, 14 September 2018.  
2 The NPC meets in session once a year. The deputies elect the members of its Standing Committee, 
which has the power to interpret the Constitution and other  laws, and enact and amend laws, except for those 
enacted by the NPC. When the NPC is not in session, the Standing Committee may also exercise the following 
functions: amend laws enacted by the NPC; review and approve adjustments to the national economic a nd 
social development plans or to the state budget; and appoint Ministers. The NPC elects the President and the 
Vice President of China. The President promulgates the legislation adopted by the NPC or its Standing 
Committee. In accordance with the Constitu tion, the President, in pursuance of the decisions of the Standing 
Committee of the NPC, ratifies or abrogates treaties and important agreements concluded with foreign States. 
The President appoints the Premier and other members of the State Council, i.e. Vice Premiers, State 
Councillors, Ministers, the Auditor -General, and the Secretary -General, in line with the decisions of the NPC 
and its Standing Committee . 
3 Led by the Premier, the State Council is composed of Vice Premiers, State Councillors, Minister s in 
charge of ministries and Ministers in charge of commissions, the Auditor -General, and the Secretary -General.  
4 Intellectual property courts are established in Beijing, Shanghai, Guangzhou, and Haikou . WT/TPR/S/ 415 • China  
 
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  Establishing the World Trade Organization and its follow -up agreements, China's accession protocol, 
and China's Working Party Report.5 Draft laws and regulations at the ministerial and departmental 
levels are published online in Chinese for not less than a 30 -day period for public comments6, except 
when, as per a decision of the State Council, laws and  regulations need to be kept confidential. 
Public comments can be submitted through the Ministry of Justice website.7 The China Foreign Trade 
and Cooperation Economic Gazette, issued by the Ministry of Commerce (MOFCOM), publishes 
China's trade -related laws, regulations , and rules.8 
2.7.  Administrative decisions may be appealed within a statutory time -limit. Appeals can be made 
to a department at higher level than the one that made the decision. Several independent 
administrative reconsideration commissions are currently established on a pilot basis.  
2.8.  Pursuant to the Regulations on the Implementation of the Foreign Investment Law (FIL), 
MOFCOM established a Complaint Coordination Mechanism for Foreign -invested Enterprises (FIEs) 
within relevant ministries or departments of the State Council. It coordinates and facilitates the work 
related to complaints of FIEs at the Central Government level, and it guides and supervises local 
authorities in their handling of complaints. The Measures  for Complaints by Foreign -invested 
Enterprises further provide that MOFCOM shall be responsible for handling issues in three categories: 
(i) complaints related to the administrative actions of relevant departments of the State Council, 
provincial People's  Governments, and their staff; (ii)  proposals to improve relevant policies and 
measures by the departments of the State Council and provincial People's Governments; and 
(iii) complaints with a significant national or international bearing, for which MOFCOM  established 
the National Complaint Centre for FIEs (temporarily administered by the Investment Promotion 
Agency).  
2.2  Trade Policy Framework and Objectives  
2.2.1   Institutional framework  
2.9.  The National Development and Reform Commission (NDRC) oversees China's macroeco nomic 
planning. It is responsible for formulating and implementing strategies for national economic and 
social development and coordinating major economic operations.9 The NDRC is also responsible for 
conducting research and setting objectives and policie s on economic reforms, such as those included 
in the Five -Year Plans  for Economic and Social Development . Each year, it submits a plan for national 
economic and social development to the NPC on behalf of the State Council.  
2.10.   MOFCOM is mainly responsible for the coordination and implementation of trade -related 
investment and economic cooperation policies.  In particular, regarding domestic and international 
trade, foreign investment, and international economic cooperation, its responsibilities include: 
(i) formulating strategies, guidelines, and policies; and (ii) drafting laws, regulations, and 
departmental rules .10 Other Ministries involved in trade policy formulation and implementation 
include those in charge of: agriculture, ecology and environment, finance,  industry and information 
technology, and transportation.  
2.11.   On 7 March 2018, the NPC approved the Plan to Deepen Reforms of Party and State 
Institutions. The Plan sought to reorganize existing ministries and agencies that comprise the State 
Council. In the c ontext of the restructuring, some functions of MOFCOM were transferred to other 
agencies. For example, the newly established State Administration for Market Regulation (SAMR) 
assumes responsibility for anti -monopoly law enforcement from the NDRC, MOFCOM, a nd the former 
State Administration for Industry and Commerce (SAIC). The SAMR also took over the functions of 
the Office of the Anti -Monopoly Commission of the State Council and the National Leading Group on 
 
5 State Council, Guo Ban Fa No.  29, 2014, Notice o f the General Office of the State Council on Further 
Enhancing the Compliance of Trade Policies.  
6 In accordance with Regulations on Procedures of the Rules Formulating, and on the Procedures for the 
Formulation of Administrative Regulations (amended in De cember 2017).  
7 Ministry of Justice. Viewed at: http://www.chinalaw.gov.cn . 
8 China Foreign Trade and Cooperation Economic Gazette , No. 46, 2015. Viewed at: 
http://english.mofcom.gov.cn/article/policyrelease/gazette/201509/20150901125925.shtml . 
9 NDRC, Main Functions of the NDRC , 17 December 2008. Viewed at: 
https://en.ndrc.gov.cn/mfndrc_8237/200812/t20081217_1193980.html . 
10 MOFCOM, Mission , 7 December 2010. Viewed at: 
http://english.mofcom.gov.cn/column/mission2010.shtml . WT/TPR/S/ 415 • China  
 
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  the Fight against IPR Infringement and Counterfe iting, as well as MOFCOM's law enforcement 
functions concerning the Anti -Monopoly  Law. MOFCOM's responsibilities with respect to foreign aid 
were assigned to the China International Development Cooperation Agency, and its function of 
administering sugar re serves is now assigned to the National Food and Strategic Reserves 
Administration. The CBIRC  also took over MOFCOM's previous functions of formulating business 
operation and regulatory rules for pawn shops, financial leasing companies, and commercial 
factoring enterprises. The supervisory structure of financial services also underwent a significant 
change during the review period (Section 4.4.1).  
2.2.2   Trade policy formulation and objectives  
2.12.   China's trade policy objectives have remained largely unchanged since th e previous Review; 
China seeks to further liberalize its trade and investment regime to reshape its economy. The 
13th Five-Year Plan for Economic and Social Development (2016 -20), which was issued in 
December  2016, lays out objectives to expand trade and i ncrease outbound and inbound 
investment.11 Reflecting China's broader industrial and economic goals, the Plan aims to widen 
market access for foreign investment by, inter alia,  loosening foreign investment restrictions in 
various sectors such as manufactur ing and finance, as recently reflected in the negative lists for 
foreign investments (Section 2.4). The 14th Five-Year Plan for Economic and Social Development 
(2021 -25) was adopted by the National People's Congress  on 11 March 2021.  
2.13.   Trade policy objective s are also outlined in sectoral and provincial Five -Year Plans and various 
Administrative Measures (such as negative lists and catalogues) that provide guidance to the 
implementation of the overall policies, such as on products that are subject to licences  or export 
duties; industries that can benefit from preferential treatment; and sectors in which investment is 
encouraged, permitted, or restricted.  
2.14.   The Government continues to promote its vision to expand international trade, and outward 
direct investment  is considered one way to promote trade. Consequently, the Government continues 
to proceed with the Belt and Road Initiative (BRI), which aims to, inter alia , promote 
intergovernmental cooperation; improve roads, energy, and information infrastructure; rem ove 
trade and investment barriers; deepen financial cooperation; and promote cultural and educational 
exchanges.  
2.15.   In November 2019, the State Council issued the Guiding Opinions on Promoting High -quality 
Trade Development, which reiterate the authorities' i ntention to promote high -quality trade 
development through, inter alia , innovation in science and technology, improved trade structure, 
and two -way investments.  
2.16.   The Pilot Free Trade Zones (PFTZs) programme was adopted as a testing ground for 
nationwide inv estment liberalization and streamlined regulations; the authorities consider that the 
PFTZs play an important role in optimizing China's business environment, and serve to stimulate 
open development and cooperation of trade and investment. The PFTZs offer preferential policies for 
the import, handling, manufacturing, and exporting of goods, via, inter alia , tax incentives, free flow 
and exchange of capital, and fast -tracked procedures for investment.  
2.17.   Since 2013, China has established an increasing number of  PFTZs. In 2020, three PFTZs were 
established in Beijing, Anhui, and Hunan, while the area of the Zhejiang PFTZs was expanded. This 
brought the total to 21, including the existing 18 PFTZs (in Chongqing, Fujian, Guangdong, Guangxi, 
Hainan, Hebei, Heilongji ang, Henan, Hubei, Jiangsu, Liaoning, Shaanxi, Shandong, Shanghai, 
Sichuan, Tianjin, Yunnan and Zhejiang).  
2.18.   In pursuing its trade policy objectives, China recognizes the leading role of the multilateral 
trading system (MTS), trade and investment liberalizat ion and facilitation, and the expansion of its 
regional trade agreements (RTAs), which the authorities view as a complement to the MTS.12 
 
11 NDRC, The 13th Five -Year Plan for Economic and Social Development of the People's Republic of 
China (2016 -2020) . Viewed at: 
https://en.ndrc.gov.cn/policyrelease_8233/201612/P020191101482242850325.pdf . 
12 WTO document WT/TPR/G/375, 13 July 2018.  WT/TPR/S/ 415 • China  
 
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  2.19.   During the review period, as reflected in several measures, China attached great importance 
to addressing climate chan ge issues. The authorities indicate that the country implements an active 
national strategy on climate change and has achieved positive results through a series of measures, 
such as industrial restructuring, energy structure optimization, energy conservati on and efficiency 
improvement, the establishment of a carbon emissions trading market, and expanding the forest 
carbon sink. They also expect that China will reach a peak in carbon dioxide emissions before 2030 
and carbon neutrality before 2060.  
2.3  Trade Agre ements and Arrangements  
2.3.1   WTO  
2.20.   China has been a WTO Member since 11 December 2001. At the Trade Policy Review Body, 
its trade policies have been reviewed seven times; the previous Review took place in July 2018. 
China is an observer to the Committee on Government Procurement and has been negotiating its 
accession to the Plurilateral Agreement on Government Procurement (GPA) since 20 07. On 
21 October 2019, China introduced to the parties to the Agreement its sixth revised market access 
offer in the contex t of its negotiations to join the GPA (Section 3.3.6). China is an observer to the 
Plurilateral Agreement on Trade in Civil Aircraft. China is also a participant in the Information 
Technology Agreement . 
2.21.   The authorities state that China attaches great impor tance to and supports the work related 
to e-commerce within the WTO framework; it joined the Friends of e -Commerce for Development 
(FED) in September 2017.  China also participates in the Joint Statement Initiatives on electronic 
commerce; investment facili tation for development; micro, small, and medium -sized enterprises; 
and domestic regulation in services.  
2.22.   During the review period, China submitted various notifications to the WTO (Table  A2.1). 
Nevertheless, some notifications, including those on state tra ding enterprises and domestic support, 
remain outstanding.  According to the authorities, China is preparing new notifications.  
2.23.   Under the WTO dispute settlement system, between 2018 and 13 April 2021, China was 
involved in 10 disputes as a complainant and 1 1 as a respondent (Table A2.2). China was involved 
as a third party in 38 disputes brought to the Dispute Settlement Body during the same period.  
2.3.2   Regional and preferential agreements  
2.24.   The authorities state that China is committed to creating a global network of RTAs to further 
consolidate economic and trade ties between the country and its trading partners and reinforce 
two-way trade and investment; such efforts have accelerated the pace to open relevant industries 
and enhanced the competitiveness of t heir respective enterprises. China considers its network of 
RTAs as means to complement the MTS and further promote free trade rules.  
2.25.   By the end of February 2021, China had signed 19 RTAs with 26 countries and territories.13 
On 12  November  2018, the Protoc ol to Update the Free Trade Agreement between China and 
Singapore was signed; it entered into force on 16 October 2019. The Protocol revised the original 
agreement in six areas (i.e. the rules of origin, customs procedures and trade facilitation, trade 
remedies, trade in services, investment, and economic cooperation); furthermore, it added 
e-commerce, competition policy, and environment to the Agreement.  
2.26.   On 28 April 2019, the Protocol to Update the Free Trade Agreement between China and 
Pakistan  was signed ; it entered into force on 1 December 2019. It made revisions to the original 
agreement in terms of, inter alia, market access and the schedule of tariff concessions of trade in 
goods, rules of origin, trade remedy, and investment; it also added a chapter on customs 
cooperation.  The tariff reduction arrangement was implemented on 1 January 2020. It is set to 
increase the proportion of bilateral duty -free lines to 75% (from the original 35%). Both sides 
immediately eliminated tariffs on 45% of the tariff lin es, and China committed to gradually eliminate 
 
13 MOFCOM, China FTA Network . Viewed at: 
http://fta.mofcom.gov.cn/list/rcepen/enrcepnews/1/encateinfo.html . WT/TPR/S/ 415 • China  
 
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  tariffs on 15% of the tariff lines in 5 years and another 15% in 10 years. In addition, tariff rates 
were cut by 20% on other products that account for 5% of China's tariff lines.  
2.27.   The China -Mauritius Free Trad e Agreement was signed on 17 October 2019; it entered into 
force on 1 January 2021. It covers topics such as trade in goods, trade in services, investment, and 
economic cooperation. China and Mauritius pledged to eventually reach zero tariffs on 96.3% and 
94.2% of traded items, respectively. As for China, the duties applicable on 87.6% of these tariff 
lines will be eliminated with immediate effect upon the entry into force, while the remaining tariffs 
will be eliminated over a seven -year period. The Agreeme nt also covers more than 40 services 
sectors, including financial, telecommunications, ICT, professional, construction, and health. The 
two sides are committed to liberalize more than 100 subsectors.14 
2.28.   The China -Cambodia Free Trade Agreement was signed on 12 October  2020. It has not yet 
entered into force. The Agreement includes provisions on trade in goods, rules of origin, customs 
procedures and trade facilitation, sanitary and phytosanitary measures, trade in services, investment 
cooperation, cooperation  under the BRI, e -commerce, economic and technical cooperation, 
transparency, administrative and institutional provisions, and dispute settlement. It has annexes on 
Schedules of Specific Commitments on trade in services, in which the two sides are committe d to 
liberalize some of their services sectors. China and Cambodia pledged to eventually eliminate tariffs 
on 97.53% and 90% of the tariff lines, respectively. In particular, the duties applicable on 97.44%  of 
tariff lines from China, and 87.5% of tariff l ines from Cambodia, will be eliminated upon the entry 
into force of the Agreement, while the remaining tariffs on 0.09% and 2.5% of the tariff lines will be 
eliminated over 5 to 20 years.  
2.29.   On 15 November 2020, China and 14 other countries signed the Regiona l Comprehensive 
Economic Partnership (RCEP) Agreement.15 The Agreement has provisions on trade in goods; rules 
of origin; customs procedures and trade facilitation; sanitary and phytosanitary measures; 
standards, technical regulations, and conformity asses sment procedures; trade remedies; trade in 
services; temporary movement of natural persons; investment; intellectual property; e -commerce; 
competition; small and medium -sized enterprises (SMEs); economic and technical cooperation; 
government procurement; i nstitutional provisions; and dispute settlement. It has four market access 
annexes (schedules of tariff commitments, schedules of specific commitments for services, 
schedules of reservations and non -conforming measures for services and investment, and sche dules 
of specific commitments on temporary movement of natural persons).16 In general, tariffs on 90% 
of tariff lines will be eliminated; regarding trade in services, some participating signatories made 
commitments in over 100 sectors/subsectors. In additi on, participating countries adopt a negative 
list approach to make commitments on investment in non -services sectors. The RCEP Agreement 
will take effect 60  days after its ratification by at least six Association of Southeast Asian Nations 
(ASEAN) and thre e non -ASEAN signatories.  
2.30.   On 26 January 2021, the Protocol to Upgrade the Free Trade Agreement between China and 
New Zealand was signed; it has not yet entered into force. The Upgrade Protocol revised the original 
agreement in five areas (rules of origin, c ustoms procedures and trade facilitation, technical barriers 
to trade, trade in services, and cooperation); furthermore, it added e -commerce, government 
procurement, competition policy, and environment and trade chapters to the Agreement.  
2.31.   During the review  period, China was negotiating the following agreements: the China -Japan -
Republic of Korea FTA, the China -Gulf Co -operation Council FTA, the China -Sri Lanka FTA, the China -
Israel FTA, the China -Norway FTA, the China -Republic of Moldova FTA, the China -Panam a FTA, the 
China -Palestine FTA, and the Agreement on Trade in Services and Investments between China and 
Belarus. In addition, the country is involved in subsequent or upgrading negotiations with the 
Republic of Korea, Peru, and Singapore.  
 
14 MOFCOM, China FTA Network: China and Mauritius Sign Free Trade Agreement , 18 October  2019. 
Viewed at: http://fta.mofcom.gov.cn/enarticle/chinamauritiusen/enmauritius/201910/41658_1.html . 
15 MOFCOM, Regional Comprehensive Economic Partnership (RCEP) . Viewed at: 
http://fta.mofcom.gov.cn/topic/enperu_recp.shtml . 
16 MOFCOM, "The Leading Official of the Department of International Trade and Economic Affairs of 
MOFCOM Expounded on the Regiona l Comprehensive Economic Partnership (RCEP) Agreement (I)", press 
release, 16  November 2020. Viewed at: 
http://english.mofcom.gov.cn/article/newsre lease/policyreleasing/202011/20201103017259.shtml . WT/TPR/S/ 415 • China  
 
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  2.32.   The authorities indicate that on 11 December 2018, a Memorandum of Understanding 
between MOFCOM and the Ministry of the Economic Development of the Russian  Federation  was 
signed on a cooperation and development plan for the Russian  Federation's Far East Region17, a 
policy  document that aims to guide cooperation between the two sides and serve as a guiding 
document for Chinese enterprises to invest in the region.  
2.33.   On 15 January 2020, China and the United  States signed the China -United States Phase 1 
Economic and Trade Agreement.18 It contains provisions related to, inter alia , intellectual property, 
technology transfer, trade in food and agricultural products, and financial services.  
2.3.3   Other agreements and arrangements  
2.34.   China continues to grant unilateral preferences to le ast developed countries (LDCs). According 
to the authorities, since 2015, it has implemented zero tariffs on 97% of taxable items for LDCs that 
have established diplomatic relations with China and completed the exchange of diplomatic notes. 
As at end -Augus t 2020, 39 LDCs had been given unilateral preferences. Bangladesh, Burkina Faso, 
and Kiribati were added to the list of beneficiaries on 1 July 2020, 1  September 2018, and 
1 August  2020, respectively. Since 1 January 2020, Equatorial Guinea has been exclud ed from the 
list, as it "graduated" from the LDC category in June 2017.  
2.4  Investment Regime  
2.4.1   Regulatory framework and market access  
2.35.   On 15 March 2019, China adopted the FIL, which aims to improve the business environment 
for foreign investors and ensure that F IEs participate in market competition on an equal basis with 
their domestic counterparts, in accordance with the law.  On 31 December 2019, the State Council 
promulgated the Implementing Regulations of the FIL. Both the FIL and its Implementing 
Regulations entered into force on 1 January 2020. Subsequently, the previous laws and 
implementing regulations for foreign investors and FIEs, i.e. the Law on Sino -Foreign Equity Joint 
Ventures, the Law on Sino -Foreign Cooperative Joint Ventures, and the Law on Foreig n-Invested 
Enterprises, as well as their administrative regulations and rules, were repealed.  
2.36.   The FIL grants national treatment to foreign investments in industries outside the Special 
Administrative Measures on Access to Foreign Investment (National Negat ive List) through the 
"pre-establishment national treatment and negative list management system", under which foreign 
investors and their investments are to be granted treatment no less favourable than that granted to 
domestic investors and their investmen ts at the establishment stage (FIL, Article  4). Article  28 of 
the FIL stipulates that "for industries outside of the National Negative List, the investment 
administration shall be conducted under the principle of equal treatment to domestic and foreign 
investment". Furthermore, the FIL's Implementing Regulations require that FIEs and wholly Chinese -
invested enterprises be equally treated in such aspects as government funding arrangements, land 
supply, tax and fee reduction and exemption, qualification licen sing, development of standards, 
project applications, and human resource policies.  
2.37.   The authorities state that the system was developed after being implemented in PFTZs and 
was expanded nationwide in 2016, followed by the adoption of the National Negative L ist in 2017.  
2.38.   The FIL and its Implementing Regulations also accord domestic companies and FIEs equal 
treatment regarding access to government funding arrangements, land supply, tax abatement or 
exemption, qualification licensing, standard setting, project a pplication, or human resource policies. 
In addition, FIEs are accorded equal treatment under the FIL in, inter alia , participation in 
government procurement, protection of intellectual property, and licensing formalities. Article  10 of 
the FIL provides tha t foreign companies may comment on new legislation and administrative rules 
concerning foreign investment.  
2.39.   Various investment protection measures exist under the FIL. In a case where the State needs 
to expropriate a foreign investor to protect the public i nterest, such expropriation shall be made 
 
17 Sino-Russian Cooperation and Development Plan in Russia's Far East Region (2018 -2024).  
18 MOFCOM. Viewed at: http://www.m ofcom.gov.cn/article/ae/ai/202001/20200102930845.shtml . WT/TPR/S/ 415 • China  
 
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  pursuant to statutory procedures and in a non -discriminatory manner, with compensation made 
based on the market value of the expropriated investment. Local governments must comply with 
policy commitments19 made to,  and perform various contracts concluded with, foreign investors in 
accordance with the law. If it becomes necessary to adjust those commitments or agreements due 
to the public interest, foreign investors shall be compensated for losses incurred.  
2.40.   With respect to cross -border remittances, in accordance with the FIL, a foreign investor may 
freely transfer inward and outward, in CNY or foreign currencies, inter alia , its capital contributions, 
profit, capital gains, proceeds from disposition of assets , royalties from IPRs, lawfully obtained 
compensation or indemnity amounts, and proceeds from liquidation. Under the FIL, no entity or 
individual shall illegally restrict, inter alia , the type of currencies, amount, or frequency of such 
remittances.  
2.41.   Under the FIL, legal liability shall be pursued in case of any IPR infringement. In addition, the 
FIL prohibits government officials from forcing foreign investors to transfer their technology by 
administrative means; it also requires the authorities to keep con fidential any trade secret of foreign 
investors that they may become aware of during the performance of their duties.20 
2.42.   Under the FIL, FDI in China is also guided by the National Negative List and the Catalogue of 
Encouraged Industries for Foreign Investme nt (Encouraged FDI Catalogue), which lists industries 
where FDI is encouraged. Industries that are listed in the Encouraged FDI Catalogue are eligible for 
preferential measures, such as discounted land prices and tax incentives.  
2.43.   For restricted industries, foreign investors must meet the specific conditions, such as 
shareholding limits, stipulated by the National Negative List. Foreign investors might need prior 
approval from the Government to invest in restricted markets. For industries not on the National 
Negative List, foreign investors shall receive treatment equal to their domestic counterparts when 
investing.  
2.44.   In June 2018, the National Negative List was issued and the 2017 version of the Catalogue of 
Industries for Guiding Foreign Investment was repeale d. Since then, the National Negative List has 
been revised every year. Compared with the 2017 version, the 2020 National Negative List 
introduced new opening -up measures in such industries as seeds, oil and gas, mineral resources, 
ship and aircraft manufac turing, infrastructure, finance, value -added telecommunications, and 
culture.  
2.45.   On 23 June 2020, the current version of the National Negative List was issued by the NDRC 
and MOFCOM to replace the 2019 version.21 It further reduced the number of restrictive m easures, 
which continues to decrease (from 63 in 2017 to 33 in 2020) (Chart 2.1). The sectors liberalized 
concern services, manufacturing, and agriculture. For example, in the financial sector, the caps on 
foreign ownership of securities companies, securit ies investment fund management companies, 
futures companies, and life insurance companies were lifted; in manufacturing, the restrictions on 
foreign investment in the smelting and processing of radioactive minerals, as well as on the 
production of nuclear fuel, were eliminated. In agriculture, the selection and breeding of new wheat 
varieties and the production of seeds are no longer required to be controlled by the domestic party. 
The main differences between the 2018, 2019, and 2020 National Negative List s are highlighted in 
Box 2.1 and Box 2.2. Table A2.3 and Table A2.4 provide the lists of restricted and prohibited 
measures, respectively, in 2019 and/or 2020.  
 
19 Article  27 of the Implementing Regulations now defines "policy commitments" as any written 
commitment made by a local People's Government at any level or its relevant departments to foreign investor s 
and FIEs with respect to supporting policies, preferential measures, and other means of facilitating foreign 
investment.  
20 The authorities state that the Government has never made, through existing laws, regulations, or 
policies, technology transfer a pr econdition for inward FDI, or issued any laws, regulations, or policies 
obligating investors to transfer their technologies.  
21 NDRC. Viewed at: 
https://www.ndrc.gov. cn/xxgk/zcfb/fzggwl/202006/P020200624549035288187.pdf . WT/TPR/S/ 415 • China  
 
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  Chart 2.1 Number of restrictive measures in China 's Special Administrative Measures 
determining access to foreign investment, 2017 -20 
 
Source:  Special Administrative Measures on Access to Foreign Investment and the Free Trade Zone Special 
Administrative Measures on Access to Foreign Investment (2017, 20 18, 2019, and 2020 editions).  
Box 2.1 Main changes in the 2019 National Negative List for foreign investments and 
the 2019 Encouraged Catalogue  
Encouraged category  
Activities added  
Manufacturing  
1. Electronic equipment  such as 5G equipment (mobile phones, cars, drones, etc.) and their core 
components, etchers for integrated circuits, chip packing equipment, cloud computing equipment, etc.  
2.  Equipment such as industrial robots, key components of new  energy vehicles (NEVs), smart vehicles, etc.  
3.  New raw materials for vaccines, cell therapy medicine, large -scale cell culture products, etc.  
4.  New materials for aerospace, monocrystalline silicon, and large wafers, etc.  
Services  
1. Development of col d-chain logistics, e -commerce, construction and operation of special railway lines, etc.  
2.  Artificial intelligence technology, clean production, carbon capture, and circular economy  
3.  Construction and management of ecological protection projects  
4.  Medical institution services  
5.  Tourism infrastructure construction, and tourism information services  
Encouraged areas of investment  
1. Yunnan, Hunan, and Inner Mongolia:  Agriculture products processing, textile and clothing, furniture 
manufa cturing, etc.  
2. Anhui, Sichuan, and Shanxi: Integrated circuits, tablet computers, communication terminals, etc.  
3. Henan and Hunan:  Logistics storage facilities, car filling stations, etc.  
 
Restricted category  
 
Activities removed  
Mining  
1.  Exploration and development of oil and natural gas (excluding coal -bed methane, oil sands, shale gas, 
etc.) – limited to joint venture and cooperation  
Energy and water supply  
1.  Construction and operation of gas and heat in cities with a population of more than 500,0 00 – requirement 
that the Chinese party shall hold the controlling majority of shares  
Telecommunications  
1.  Multi-party communication, store -and-forward, and call centre businesses – requirement that foreign 
investment should not exceed 50%  
Transportation  
1.  Domestic shipping agent business – requirement that the Chinese party shall hold the controlling majority 
of shares  
Culture, sports, and entertainment  
1.  Performance brokerage institutions – requirement that the Chinese party shall hold the controlling 
majority of shares  
2.  Construction and operation of movie theatres – requirement that the Chinese party shall hold the 
controlling majority of shares  
 
63
48
40
3395
45
37
30
020406080100
2017 2018 2019 2020Chart 2.[CHN] Number of restrictive measures in China's Special Administrative Measures determining access to foreign investment, 2017 -
2020
Source: Special Administrative Measures on Access to Foreign Investment and the Free Trade Zone Special Administrative Measures on
Access to Foreign Investment (2017, 2018, 2019, and 2020 editions) .National negative list
PFTZ negative listWT/TPR/S/ 415 • China  
 
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  Prohibited category  
 
Activities removed  
Mining  
1. Exploration and mining of molybdenum, tin, antimony, and fluorite  
Manufacturing  
1. Production of Xuan paper and ink ingot  
Environment  
1. Exploitation of wildlife resources originally produced in China and protected by the country  
 
Activities added  
Mining  
1. Exploration, mining and mineral processing of rare earth s, radioactive minerals , and tungsten  
Source:  National Negative List (2019) and the Encouraged Catalogue (2019).  
Box 2.2 Main changes in the 2020 National Negative Lis t for foreign investments and the 
2020 Encouraged Catalogue  
Encouraged category  
 
Activities added (National Catalogue ) 
Advanced manufacturing  
1. High-end manufacturing – Integrated circuit packaging and test equipment manufacturing, laser 
projection equipment, ultra -high-definition TV (UHD TV), ventilator, extracorporeal membrane 
oxygenation, artificial intelligence auxiliar medical equipment, hardware manufacturing related to 
L3/L4/L5 autopilot, etc.  
2. New materials – High-purity electron -grade hydrof luoric acid, hydrogen fluoride, special glass fibre, 
polarizing film, diffusion film, photomask, polyvinyl polyamine, high -performance fibre, environmental 
biofilm, new pesticides, and other items  
3. Key components – High-pressure vacuum element, special valv e, special bearing, special glass, wheel 
speed sensor, etc.  
4. Environmental protection – Construction and equipment manufacturing of receiving and disposing facilities 
for marine pollutants at ports, construction and equipment manufacturing of emergency facilities for 
hazardous chemicals and oil products at ports, etc.  
5. Pharmaceutical – Production of vaccines against AIDS, hepatitis C, cervical cancer, malaria, hand -foot-
and-mouth disease, etc.  
 
Production -oriented services  
1. Research and developme nt (R&D) and design – R&D of 5G mobile communication technology, block chain 
technology, sewage treatment facilities design, etc.  
2. Commercial services – High-end equipment maintenance, transformation, and integration of digital 
production line, industrial s ervice network platform, etc.  
3. Modern logistics – Bulk commodity import and export distribution centre, community logistics and 
distribution system, etc.  
4. Information services – Online education, online healthcare, online office, etc.  
 
Activities added (Regi onal Catalogue ) 
1. Heilongjiang and Yunnan: Agricultural product processing, tourism development, etc.  
2. Henan, Shaanxi, and Guangxi: Medical equipment, epidemic prevention and protection articles, active 
pharmaceutical ingredient (API) production, etc.  
3. Hubei, Sichuan, and Chongqing: Semiconductor materials, graphene, industrial ceramics, etc.  
4. Anhui and Shanxi: vocational school, etc.  
5. Hainan: Yacht design and manufacturing, financial leasing services, R&D, design, and parts manufacturing 
of NEVs, etc.  
 
Restricted category  
 
Activities removed  
 
Agriculture  
1. Selection and breeding of new wheat varieties and production of seeds – requirement that the Chinese 
party shall hold the controlling majority of shares (a share ratio of not less than 34%)  
Manufacturing  
1. Manufacturing of commercial vehicles – requirement that foreign investment should not exceed 50%  
Energy and water supply  
1. Construction and operation of city water drainage network for a city with a population of more than 
500,000 – requirement that the Chi nese party shall hold the controlling majority of shares  WT/TPR/S/ 415 • China  
 
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  Financial services  
1. Foreign investment in life insurance, futures, and securities companies – requirement that foreign 
investment should not exceed 51%  
Leasing and business services  
1. Market research projects – limited to cooperative joint ventures  
Health and social work  
1. Investment in medical institutions – limited to cooperative joint ventures  
 
Prohibited category  
 
Activities removed  
Scientific research and technical services  
1. Investment in g eodetic measurement, marine mapping, aerial photography mapping, ground movement 
measurement, administrative boundary mapping, topographic maps, maps of world's state regions, maps 
of national administrative regions, maps of provinces below administrative regions, national maps for 
educational purposes, local maps for educational purposes, true three -dimensional maps and electronic 
navigation maps, regional geological mapping, mineral geology, geophysics, geochemistry, hydrogeology, 
environmental geology, g eological disasters, remote sensing geology and other mapping and 
measurements – prohibition lifted for  mining right owners in carrying out their work within the scope of 
their mining rights  
Transportation, warehousing, and mail services  
1. Investment in air traffic control  
Manufacturing  
1. Investment in smelting and processing of radioactive minerals, as well as in production of nuclear fuel  
 
Activities added  
Transportation, warehousing, and mail services  
1. Construction and operation of airport towers  
Source:  National Negative List (2020) and the Encouraged Catalogue (2020).  
2.46.   In 2018, the NDRC and MOFCOM jointly issued the Market Access Negative List, which was 
implemented nationwide. It listed industries that are prohibited or subject to  licensing for investment 
and operation within China. According to the authorities, for industries not on the List, market 
participants of any kind may enter in a lawful and equal manner. It is a common negative list that 
applies equally to market particip ants of any kind, including state -owned and private enterprises, 
domestic -invested enterprises, and FIEs, as well as large enterprises and SMEs. It aims to further 
open up the economy and provide a level playing field for market participants.22 The most re cent 
version was issued in 2020; it contains 123 items (down from 151 in the 2018 version and 131 in 
the 2019 version) that are banned to non -state companies (both domestic and foreign -owned) or 
require government approval for entry. While the National Neg ative List applies only to foreign 
investors, the Market Access Negative List applies to both domestic and foreign investors. When 
investing in China, a foreign investor must first meet the requirements of the Negative List for the 
Access of Foreign Invest ments, and then those of the Market Access Negative List.  
2.47.   The 2020 edition of the Catalogue of Encouraged Industries for Foreign Investment, which 
replaced the 2019 edition, contains two sections: one national and one regional for 22 provinces and 
municipa lities located in Central and Western China.23 The national section of the 2020 Encouraged 
Catalogue contains 480 industries. Compared with the 2019 Catalogue, 65 items were added, and 
50 were revised. The main changes in the 2019 and 2020 Encouraged Catal ogues' national section 
are summarized in Box 2.1 and Box 2.2. The regional section of the 2020 Encouraged Catalogue 
contains 755 items, with 62 items added and 38 revised, compared with the 2019 edition.  
2.48.   FDI in the PFTZs is guided by a different negative list. The current one is the Special 
Administrative Measures for Foreign Investment Access to Pilot Free Trade Zones (2020 PFTZ 
Negative List). The 2020 PFTZ Negative List provides an outline of sectors in which foreign 
investment is restricted or prohibit ed in PFTZs. For all industries not listed in this document, foreign 
 
22 China started its Market Access Negative List Scheme, on a pilot basis, in March 2016 via the Market 
Access Negative List (Trial Edition). The pilot programme listed 328 items and covered the provinces of 
Shanghai, Guangdong, Tianjin, and Fujian. The tria l was subsequently expanded in 2017 to cover 15 provinces.  
23 The regional section covers Anhui, Chongqing, Gansu, Guangxi, Guizhou, Heilongjiang, Hainan, 
Henan, Hubei, Hunan, Inner Mongolia, Jiangxi, Jilin, Liaoning, Ningxia, Qinghai, Shaanxi, Shanxi, Sich uan, 
Tibet,  Xinjiang, and Yunnan.  WT/TPR/S/ 415 • China  
 
- 41 - 
 
  investors will receive the same treatment as that for domestic companies with regard to the 
establishment and approval requirements and process.  
2.49.   The 2020 PFTZ  Negative List, issued on 23 June 2020 and entered into force on 23 July 2020, 
reduced the number of restrictive measures from 95 in 2017 to 30 in 2020 (Chart 2.1).24 
2.50.   According to the authorities, some administrative regulations in the PFTZs were temporari ly 
adjusted during the review period.25 On 26 October 2019, the Standing Committee of the NPC 
authorized the State Council to temporarily adjust the application of relevant regulations of the 
Foreign Trade Law, the Road Traffic Safety Law, the Fire Prevent ion Law, the Food Safety Law, the 
Customs Law, and the Seed Law in PFTZs for three years. On 15 January 2020, the State Council 
decided to temporarily adjust and implement the relevant provisions of the Regulations on the 
Administration of Commercial Perfo rmances, the Regulations on the Administration of Foreign -
Invested Telecommunications Enterprises, and the Regulations on the Administration of the Printing 
Industry in PFTZs (Guo Han No. 8, 2020). On 29 April 2020, the Standing Committee of the NPC 
author ized the State Council to temporarily adjust the application of the relevant provisions of the 
Land Administration Law, the Seed Law, and the Maritime Law in the China (Hainan) PFTZ until 
31 December 2024. On 18 June 2020, the State Council decided to temp orarily adjust and implement 
the Regulations on Customs Affairs Guarantees, the Regulations on Import and Export Tariffs, the 
Regulations on International Maritime Transport ation, the Regulations on the Inspection of Ships 
and Offshore Facilities, and the Regulations on the Administration of Domestic Water Transport, until 
31 December 2024.  
2.51.   Some of China's policies also reflect the country's efforts to phase out industries consider ed 
to be heavily polluting. These efforts are documented in the Catalogue for  Guiding Industry 
Restructuring, which was last updated in October 2019, entered into force on 1 January 2020, and 
superseded the 2011 version.26 The Catalogue consists of three categories – "encouraged", 
"restricted", and "obsolete" industries (industries  that conform to the relevant laws, regulations, and 
policies of the State are "permitted", but are not listed in the Catalogue). It lists 821 encouraged 
items, 215 restricted items, and 441 items that will be phased out. Encouraged items shall be 
examined , approved, or filed in accordance with relevant regulations. Restricted items shall not be 
newly built, and the existing production capacity is allowed to be upgraded within a certain period 
of time. Items to be phased out shall be prohibited from investm ent and shall be phased out within 
the prescribed time -limit. In principle, this provision applies to all types of enterprises in China.  
2.4.2   Examination and approval procedures  
2.52.   Foreign investments are not allowed in prohibited industries included in either the  PFTZ or the 
National Negative List. Regarding foreign investment in a restricted industry included in either 
the PFTZ or the National Negative List, investors must comply with the required administrative 
measures, such as those for equity shareholding and  qualifications for senior management officers. 
Under the regime, the market regulation authority shall conduct a formal examination of relevant 
application materials. Where a foreign investor or FIE invests in any sector not specified in either 
the PFTZ o r the National Negative List, registration (record -filing) shall be conducted under the 
principle of equal treatment for domestic and foreign investments. For investments in a sector that 
is included in a negative list and subject to restrictions on the pr oportion of contribution and the 
nationality of the legal representative (primary person in charge), the registration shall be conducted 
in accordance with the law.  
2.53.   Until 2019, under the examination and approval system, foreign investors who invest in 
restricted areas could have their companies registered at the relevant market regulatory authority, 
only after being approved by MOFCOM or relevant industrial administrative departments. On 
1 January 2020, the FIL and its Implementing Regulations removed the r equirement of approval by 
the commercial and industrial authorities. Instead, new FIEs must be registered directly with the 
State Council's administration of market regulation, or the administrations for market regulation of 
 
24 The number of prohibited or restricted items in the PFTZ Negative List was 190 in 2013.  
25 Temporarily adjusted administrative regulations will be re -adjusted as appropriate based on the 
results of related reforms.  
26 State Council, The National Development and Reform Commission Revised and Issued the "Industrial 
Structure Adjustment Guidance Catalogue (2019) ". Viewed at: http://www.gov.cn/xinwen/201 9-11/06/content 
_5449193.htm . WT/TPR/S/ 415 • China  
 
- 42 - 
 
  the local People's Government a uthorized by the State Council in accordance with the FIL. 
Investment in industries and fields that require a licence in accordance with the law shall go through 
the relevant licensing procedures.  
2.54.   A foreign investor or FIE shall submit investment informati on to the commerce authority 
through the enterprise registration system. Investment information accessible via the 
interdepartmental information -sharing system shall not be required to be submitted separately to a 
different authority. The authorities state  that the contents and scope of foreign investment 
information reporting shall be determined by the principle of real necessity .27 For the submission of 
annual reports, instead of preparing three different reports, foreign investors or FIEs shall combine 
specific information required by MOFCOM and the State Administration of Foreign Exchange (SAFE) 
into a single report prepared for the SAMR.28 The reporting system applies to FIEs and foreign -
invested partnerships. The reporting requirements cover informatio n with respect to the 
establishment of and changes to FIEs and their subsidiaries, as well as annual reporting. For the 
sectors not specified in the National Negative List, the registration requirements are the same as 
those for domestic enterprises. The b usiness forms, structures, and rules of activities of companies 
shall be governed by the Company Law, the Partnership Law, and other laws. The FIL and the 
Implementing Regulations provide for an interim period of five  years (until 31 December 2024) for 
FIEs to adapt to the new legal requirements and to implement relevant corporate changes.  
2.55.   Foreign -invested projects (FIPs) involving fixed assets investment are subject to the general 
filing system and limited approval system.29 The authorities note that in Fe bruary 2021, about 99% 
of FIPs were subject to the informative filing system. The system did not undergo a substantial 
change during the review period. Projects subject to verification (approval) are those listed in the 
Catalogue of Investment Projects Sub ject to Government Approval (2016), while those not included 
in it are subject to record -filing. The approval standards are based on several core criteria, including 
laws and regulations; the development plan; market access conditions; and industrial, land , and 
environmental policies. The authorities indicated that FIP applications are generally approved as long 
as they have no negative impact on national security, the environment, or public interest, and they 
comply with the relevant laws , regulations,  and Catalogues, and the national development plans and 
industrial policies.  
2.56.   The Catalogue of Investment Projects Subject to Government Approval (2016) indicates in 
which instances FIPs  are subject to approval and the authorities in charge of undertaking the 
procedure. Depending on the amount invested, approval is granted by various agencies listed in the 
Catalogue. Investment projects valued at USD  300 million or more in the restricted industries require 
approval from the NDRC, and they are submitted to the State Council for record -filing, provided that 
the total investment amounts to at least USD  2 billion. Provincial governments may approve 
restricted projects funded by foreign investm ent of up to USD  300 million.  
2.57.   The Catalogue also lists specific projects that require the approval of the Government for both 
domestic and foreign enterprises in such areas as agriculture, energy, transportation, information 
technology, raw materials, manu facturing of machinery, light manufacturing, high and new 
technology, and construction in urban areas.  
2.58.   In the case of projects involving "serious" overcapacity, the approval process is outlined in 
the Guiding Opinions on Resolving Serious Production Overca pacity Conflicts, Guo Fa No. 41, 2013. 
In accordance with requirements of existing policies, projects designed to expand capacity in any of 
these sectors are strictly prohibited.  
2.59.   Pursuant to the Circular on the Establishment of a System for Security Review  of Acquisition 
of Domestic Enterprises by Foreign Investors, foreign investments in Chinese domestic enterprises 
might be subject to national security review if the FDI is deemed to have an influence on national 
security. It applies only to certain types of foreign M&A transactions. The Circular provides for the 
 
27 On 31 December 2019, MOFCOM and the SAMR issued the Measures for Reporting of Information on 
Foreign Investment, followed by the Notice on Matters Concerning the Reporting of Information on Foreign 
Investment, a supporting d ocument released by MOFCOM. Both regulations took effect on 1 January 2020.  
28 On 16 December 2019, MOFCOM, the SAMR, and SAFE jointly issued the Notice on Completing Annual 
Reporting "Multiple Reports in One" Reform Related Work.  
29 As regulated by the Admi nistrative Measures for the Approval and Record -Filing of Foreign -Invested 
Projects (FIPs), NDRC Order No. 12, 2014.  WT/TPR/S/ 415 • China  
 
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  scope, content, working mechanism, and procedures for the M&A security review, and it creates a 
unified and standardized security review system for M&A activities conducted by foreign investors. 
The FIL and its Implementing Regulations contain provisions on national security review. In 
April 2019, the NDRC issued Announcement No.  4, 2019, clarifying that the application materials for 
the security review of foreign investment shall be received by the  NDRC Government Affairs Service 
Hall. On 19 December 2020, the NDRC and MOFCOM issued the Measures for the Security Review 
of Foreign Investment, further clarifying the review authorities, scope, and procedures, which aimed 
at improving the standardizatio n, accuracy, and transparency of security review. The Measures came 
into force on 18 January 2021.  
2.60.   The document containing Trial Measures for the National Security Review of Foreign 
Investment in Pilot Free Trade Zones (Guo Ban Fa No. 24, 2015) was publish ed in 2015 to explore 
and improve the system for national security review of foreign investments.30 It continues to govern 
the security review of foreign investment in PFTZs, and its scope of application is wider than the 
above -mentioned review system.  Under the Measures, investments by foreign companies are 
reviewed if they involve businesses related to the military fields, key agricultural products, energy, 
infrastructure, transportation, culture, information technology, and equipment manufacturing that 
relate to national security. The review evaluates the influence of foreign investment on national 
security, economic stability, social order, morality, Internet safety, and the development of key 
technology concerning state security. A joint committee with representatives from the NDRC, 
MOFCOM, and other agencies is in charge of conducting the review.  
2.61.   The authorities state that the SAMR has been working with relevant ministries and agencies 
to shorten the time for the enterprise registration process and stre amline the procedures. The SAMR 
has provided guidance for relevant local governmental departments in the construction of a unified 
online service platform for enterprise establishment. Enterprise registration, official seal making, 
invoice application, and  purchase of tax control equipment can be completed online by filling out one 
single form. The authorities indicate that it takes less than five working days to establish an 
enterprise in China.  
2.4.3   Incentives to foreign direct investments  
2.62.   China offers various  tax incentives to FIEs to promote sectors deemed beneficial to the 
development of its economy. Most equipment imported to be used in projects in sectors listed in the 
Catalogue of Encouraged Industries may benefit from customs duty exemptions. Goods liste d in the 
Catalogue of Products Imported for Foreign Investment Projects and Not Eligible for Tax Exemption 
and in the Catalogue of Imported Major Technical Equipment and Products Not Eligible for Tax 
Exemption (last revised in 2019 and entered into force o n 1 January  2020) are excluded from this 
treatment.  
2.63.   In September 2018, the Ministry of Finance, the State Taxation Administration, the NDRC, 
and MOFCOM jointly issued the Notice on Widening the Scope of Application of Temporary Waiver 
for Withholding Incom e Tax for Overseas Investors Using Distributed Profits for Direct Investments 
(Cai Shui No. 102, 2018). According to the Notice, the scope of application of the favourable tax 
policy put in place in 2017 (Cai Shui No. 88, 2017) was expanded from encouraged  FIPs to all 
non-prohibited FIPs and areas. Under the Notice, profits derived by foreign investors from resident 
companies in China are entitled to a tax deferral incentive and will not trigger withholding tax if the 
investors reinvest the profits in any n on-prohibited FIPs.  
2.64.   Until 2019, projects in sectors listed in the Catalogue of Priority Industries for Foreign 
Investment in the Central -Western Regions of China (Central -Western Regions Catalogue) could 
benefit from customs duty exemptions on the importat ion of equipment within the scope stipulated 
by relevant policies. On 30 June 2019, the Government combined the encouraged category of the 
Catalogue for the Guidance of Foreign Investment Industries with the Central -Western Regions 
Catalogue, and according ly issued a unified Catalogue of Encouraged Industries for Foreign 
Investment.  
 
30 State Council, Notice of the General Office of the State Council on Issuing the Trial Measures for the 
National Security Review of Foreig n Investment in Pilot Free Trade Zones . Viewed at: 
http://www.gov.cn/zhengce/content/2015 -04/20/content_9629.htm . WT/TPR/S/ 415 • China  
 
- 44 - 
 
  2.65.   Enterprises may enjoy a reduced enterprise income tax rate of 15%, provided that they meet 
certain conditions and engage in encouraged industries in certain areas.  
2.66.   Foreign inves tment is encouraged in high -tech enterprises and R&D. When importing R&D 
equipment or procuring it domestically, "qualified" domestic and foreign R&D centres can apply for 
import duty, VAT, and consumption tax exemption, and a VAT refund for domestic equip ment.31 
2.67.   The following region -specific preferential tax regimes (establishing reduced rates for the 
beneficiaries) were extended or initiated during the review period: the preferential policies for 
corporate income tax in the Large -scale Development in the Western Region32; the preferential 
income tax policy of Hainan Free Trade Port33; individual income tax incentives in the Guangdong -
Hong Kong, China -Macao, China Greater Bay Area.34 Furthermore, some tourism industry projects 
were added to the catalogue of prefere ntial corporate income tax in Hengqin New Area.35 
2.68.   As a response to the COVID ‑19 pandemic, several relief measures were taken or announced 
for foreign investors. For example, all export tax rebates must be made in full without delay except 
for energy -intens ive and polluting products. In addition, the measures provide that China will work 
to shorten the negative list on foreign investment and expand the catalogue of industries where 
foreign investment is encouraged, encourage financial institutions to increas e foreign trade loans to 
cope with the impact of the pandemic, and encourage commercial insurance companies to offer 
short-term export credit insurance and lower premium rates. Under the measures, recent tax and 
fee relief policies designed to help compani es in difficulty should equally apply to both domestic 
enterprises and FIEs.  
2.69.   On 9 March 2020, the NDRC issued the Circular on Further Deepening the Reform regarding 
Foreign Investment Projects Responding to the COVID ‑19 Pandemic (NDRC Foreign Investment 
Announcement No. 343, 2020). The Circular includes a number of measures, such as simplifying the 
approval procedures for foreign investment projects.36 
2.4.4   Bilateral investment and tax agreements  
2.70.   As at end -June 2020, China had signed 107 agreements on avoidance of double taxation, 101 
of which have come into effect.37 In addition, China has tax arrangements with the Hong Kong 
Special Administrative Region (SAR) and the Macao SAR. Since January 2018, China has entered 
into agreements on avoidance of doub le taxation with Angola, Argentina, the Republic of the Congo, 
and Gabon, and has fully revised and signed new double taxation avoidance agreements with 
New Zealand, Italy, and Spain. On 30 December 2020, China and the European  Union concluded, in 
principl e, a Comprehensive Agreement on Investment; the text of the Agreement is yet to be 
finalized by both sides.  
 
31 Notice of the Ministry of Finance, the General Administration of Customs and State Taxation 
Administration on Import Tax Policies that Support Sci -Tech Innovation during the 13th Five-Year Plan Period 
(Cai Guan Shui No.  70, 2016) and Announcement of the Ministry of Finance, the Ministry of Commerce and 
State Taxation  Administration on Continuing to Implement the VAT Policy on Equipment Purchased by R&D 
Institutions.  
32 Announcement on Continuing Corporate Income Tax Policies for Large -scale Development in the 
Western Region ( MOF Announcement No.  23, 2020).  
33 Notice on Preferential Corporate Income Tax Policies for the Hainan Free Trade Port (Cai Shui [2020] 
No. 31) and Notice on Individual Income Tax Policies for High -end Talents in Short Supply in Hainan Free Trade 
Port (Cai Shui No.  32, 2020).  
34 Notice on Individua l Income Tax Incentives for Guangdong -Hong Kong, China -Macao, China Greater 
Bay Area (Cai Shui No.  31, 2019).  
35 Notice on Adding Projects in the Tourism Industry to the Catalogue of Corporate Income Tax 
Preferences for Hengqin New Area (Cai Shui No.  63, 2019). 
36 State Council, Notice of the National Development and Reform Commission on Responding to the 
Epidemic . Viewed at: http://www.gov.cn/zhengce/zhengceku/2020 -03/11/conte nt_5490062.htm . 
37 State Taxation Administration, Tax Policy  and Tax Treaties . Viewed at: 
http://www.chinatax.gov.cn/chinatax/n810341/n810770/index.html . WT/TPR/S/ 415 • China  
 
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  3  TRADE POLICIES AND PRACTICES BY MEASURE  
3.1  Measures Directly Affecting Imports  
3.1.1   Customs procedures, valuation, and requirements  
3.1.  The General Administration of Customs (GACC) remains responsible for customs matters. 
In 2018, the GACC took on responsibilities relating to exit -entry inspection and quarantine previously 
held by the General Administration of Quality Inspecti on and Supervision (Section 3.3.3). China has 
45 customs institutions directly under the GACC (including 42 customs areas, 678 subordinated 
customs institutions, and 132 subordinated customs offices).  
3.2.  Customs procedures are regulated by several pieces of l egislation (Table 3.1). Recent changes 
to the Customs Law and the Regulations on Import and Export Duties removed the administrative 
licensing requirements for temporary imports and export.1 Changes to various other customs -related 
regulations, including the Provisions on the Customs Administration of Declarations for the Import 
and Export of Goods and the Customs Rules on Administration of the Levying of Duties on Imports 
and Exports, were aimed at optimizing the business environment, reducing institution al transaction 
costs, simplifying customs procedures, and shortening  the time for customs clearance.2 
Table 3.1 China's legislation related to customs procedures  
Legislation  Date of issuance/amendment  
Customs Law  Decree No.  50 issued in 1987, and amended in 2000, 2013, 
2016, and 2017  
Regulations on Import and Export Duties  State Council Decree No.  392, adopted in 2003, and amended 
in 2011, 2013, 2016, and 2017  
Provisions on the Customs Administration 
of Declarations for the Import and Export 
of Goods  GACC Decree No.  103, adopted in September 2003, and 
amended in 2014, 2017, and 2018  
Customs Rules on Administration of the 
Levying of Duties on Imports and Exports  GACC Decree No.  124, adopted in 2005, and amended in 
2010, 2014, 2017, and 2018  
Source:  Information provided by the authorities.  
3.3.  As at the time of China's previous Review, importers must register as foreign trade operators 
with the Ministry of Commerce (MOFCOM) or its authorized bodies before filing customs declarations. 
Foreign -invested enterprises (FIEs) may register as foreign tr ade operators; FIEs require a copy of 
the certificate of "approval of foreign -invested enterprises" to register. According to the authorities, 
the GACC has taken measures to simplify and facilitate registration procedures3, has cancelled the 
validity peri od for the registration of customs declaration enterprises and their branches so that 
registration is of long -term effect4, and will no longer check the approval certificate of FIEs under 
certain circumstances .5 
 
1 Customs Law (as amende d in 2017). Viewed at: http://www.customs.gov.cn/customs/302249/ 
302266/302267/1880958/index.html ; and Regulations on Import and Export Duties (as amended in 2016) . 
Viewed at: http://www.customs.gov.cn/customs/302249/302266/302267/2558681/index.html . 
2 Amendments to the Customs Administration of Declarations for the Import and Export of Goods and 
the Customs Rules on Administration of the Levying of Duties on Imports and Exports (through GACC 
Order  No. 235 on Decree on the Publication of the General Administration of Customs Decision on the 
Amendment of Some Regulations. Viewed at: 
http://www.customs.gov.cn/customs/302249/302266/302267/1413710/index.html . 
3 The relevant GACC announcements are: No.  28, 2018, on Issues Concerning the Integrati on of 
Enterprises' Qualifications for Customs Declaration and Inspection. Viewed at: http://www.customs.gov.cn/ 
customs/302249/302266/302267/1662054/index.html ; No. 143, 2018, on Relevant Matters concerning the 
Promotion of Integrated Customs Declaration and Inspection to Optimize the Registration of Customs 
Declaration Entities. Viewed at: http://www.customs.gov.cn/xining_customs/533860/533861/2060885/index. 
html; and No.  191, 2018, on Matters concerning Further Optimizing the Administration of the Reg istration of 
Customs Declaration Entities. Viewed at: 
http://www.customs.gov.cn/customs/302249/302266/302267/2136553/index.html . 
4 GACC Announcement No.  213, 2019, on Cancelling the Validity Period of the Registration of Customs 
Declaration Enterprises and Their Branches.  
5 GACC Announcement No.  226, 2019, on No Longer Verifying the Approval Certificate for a Foreign -
Funded Enterprise. The circumstances when verificati on of approval certificates is not required include when: 
(i) foreign -invested international freight agent enterprises apply for customs declaration agency of inbound and WT/TPR/S/ 415 • China  
 
- 46 - 
 
  3.4.  Import declarations may be submitted on pa per or in electronic format through the single 
window system (see below). The use of a customs broker is mandatory. Documents to be provided 
with import declarations are listed in the Provisions on the Customs Administration of Declarations 
for the Import and Export of Goods. They include contracts, invoices, a packing list, a list of freight 
(manifest of cargo), bills of ladings (transport bills), acting customs clearance authorization 
entrustment agreement, import licences, and any other import documents as prescribed by the 
GACC.6 The authorities indicate that since 2020 some documents, including contracts and packing 
lists, no longer need to be submitted to customs in the import declaration process7, and other 
required documents have been simplified or  optimized for the application and printing processes. 
The GACC does not charge fees for making customs declarations or for the use of the National Single 
Window (see below). With the consent of the GACC, import declarations may be filed, and customs 
clearance may take place, in advance of the goods' arrival in China8; according to the authorities, 
this is encouraged.  
3.5.  In 2019, the GACC launched a reform of the "two -step declaration" for imports, which  means 
that enterprises do not need to submit all declar ations and documents at one time. The first step 
involves making the summary declaration with the bill of lading to pick up the goods. The second  step 
involves completing the whole declaration process within a specified time. According to the 
authorities, the reform, which was first piloted in some customs offices, made enterprise declaration 
more efficient and convenient, accelerated cargo release, and further improved the efficiency of 
customs clearance. It has been applied across the country since  1 January 2020.  
3.6.  China maintains a standardized National Single Window (NSW) for international trade 
(www.singlewindow.cn), initiated in 2016 and based on the China E -Port.9 The NSW connects the 
systems of the relevant port management and international trade dep artments, providing a one -stop 
service for customs  formalities and procedures. It is interconnected with provincial single windows, 
which are nationally standardized but also embedded with locally distinct services.10 The NSW was 
also enhanced to provide a  one-stop platform for trade services and for inter -connection with trading 
partners. Since China's previous Review, the number of connected ministries and commissions 
increased (from 11 in January 2018 to 25 at end -2020), and the number of basic service f unctions 
(e.g. port law enforcement services) increased from 9 to 16 over the same period. The NSW is now 
fully operational. The NSW is the main online entry point for traders to submit their customs 
declarations and associated documents. In 2018, over 70%  of imports were declared through the 
single window. By end -2019, the percentage had risen to 100%. Use of the NSW remains voluntary. 
According to the authorities, the online application rates for other major declaration services, such 
as cargo, manifest, and ship declarations, has reached 100%. China shared its experience of the 
NSW with the WTO Committee on Trade Facilitation in  2019.11 
3.7.  The GACC operates an "Internet + Customs" platform, which provides online access to 
government customs services, such as  pre-declaration information input, export rebates, 
administrative approval, and intellectual property rights (IPR) registration. The system allows 
enterprises to submit information in one place rather than to different port management 
authorities.12 It is separate from the NSW (see above), which provides a single platform for the 
submission of standardized information and documentation to the relevant authorities.  
3.8.  Importers are required to comply with the inspection and quarantine requirements of Customs, 
as stipulated by law, regulations, and the Catalogue of Import and Export Commodities Subject to 
Compulsory Inspection. The Catalogue lists commodities as required to protect human, animal or 
plant health, and the environment, and to prevent fraud and safe guard national security. The list 
 
outbound express; and (ii)  consignees and consigners of foreign -invested import and e xport goods go through 
the cancellation procedures with customs.  
6 Provisions on the Customs Administration of Declarations for the Import and Export of Goods, 
Article  27. Viewed at: http://www.customs.gov.cn/customs/302249/302266/302267/2539748/index.html . 
7 GCC Notice on Issuing the List of Measures to Coordinate Port Epidemic Prevention and Contr ol and 
Facilitate Customs Clearance (Shu Zong Fa No.  57, 2020).  
8 Provisions on the Customs Administration of Declarations for the Import and Export of Goods, 
Chapter  III. 
9 China  E-Port is a large information -sharing platform for customs clearance that was jointly established 
several years ago by the GACC and other relevant departments under the State Council.  
10 WTO document WT/TPR/ M/375/Add.1, 1 February 2019.  
11 WTO TFA Database. Viewed at: https://tfadatabase.org/members/china . 
12 GACC . Viewed at: http://english.customs.gov.cn/ . WT/TPR/S/ 415 • China  
 
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  was amended twice (in 2019 and 2020) to remove import supervision inspection requirements on 
390 tariff lines (at the 10 -digit HS level), including cloth and adult clothing, textiles, machinery, and 
cold-rolled steel plate s.13 During the review period, the GACC issued various administrative 
measures for the inspection and/or quarantine of specific goods.  
3.9.  Enterprises are classified into different groups based on risk analysis, which is based on their 
credit rating and the ch aracteristics of the commodities they import. Additionally, transport modes 
have different risk indices, for example, relating to sensitive routes and the country of departure.14 
The authorities indicate that data on the share of imports subject to physica l inspection are not 
available.  
3.10.   In October 2018, the GACC adopted the inspection and supervision method of "inspection and 
release before testing" for imported low -risk minerals such as iron ore, manganese ore, chromium 
ore, lead ore and its concentrate, a nd zinc ore and its concentrate. According to the authorities, the 
average inspection and release time of imported iron ore has been significantly reduced from 
18.89  days to 2.21  days.  
3.11.   The authorities indicate that, in October 2020, the overall clearance t ime for imports 
nationwide was 43.48 hours, reduced by 55.35% compared with 2017.15 
3.12.   China's Authorized Economic Operator (AEO) scheme remains in place; the authorities 
indicate that, over the past decade, it underwent several revisions and improvements and  developed 
from the initial single system to a customs credit management system that combines the 
requirements of the national credit system with the AEO system of the World Customs Organization. 
By end -2020, there were 3,523 AEOs in China, accounting for 0.65% of all import and export 
enterprises but covering around 30% of the total value of imports and exports. By 
end-February  2021, China had signed mutual recognition agreements of AEO systems with 
43 trading partners. China shared its AEO programme exper ience with the WTO Trade Facilitation 
Committee in 2018.16 
3.13.   Some 163 "special customs supervision areas", governed by their own respective regulations, 
continue to exist; 39.3% are located in the Pilot Free Trade Zones (PFTZs). The objectives of such 
areas include carrying out bonded processing, logistics, and services. China's special customs 
supervision areas are approved by the State Council and supervised by Customs. There are six  types 
of these areas: bonded zones, export processing zones, bonded logist ics parks, bonded ports, 
comprehensive bonded zones, and cross -border industrial zones. There have been no major changes 
in their rules and regulations. China also applies different customs procedures to specific areas, in 
some instances on a trial basis, to assess their functionality.17 Special customs procedures remain 
in place to facilitate customs formalities for importers (and exporters) of multiple batches of time -
limited, fresh, perishable, difficult -to-store, and dangerous goods, as well as bonded g oods exported 
 
13 GACC Announcements No.  220, 2019, and No.  9, 2020. Viewed at: 
http://www.customs.gov.cn/customs/302 249/302266/302267/2811876/index.html ; and 
http://www.customs.gov.cn/customs/302249/302266/302267/2858709/index.html . 
14 WTO documents WT/TPR/S/375/Rev.1, 14  September  2018; and WT/TPR/M/375/Add.1, 
1 February  2019. An enterprise's credit rating is based on import and export records and whether it is  
law-abiding. Enterprises are categorized according to their credit rating into authorized enterprises, enterprises 
of general integrity, and dishonest enterprises.  
15 The authorities indicate that figures on import clearance times cited in the previous Sec retariat Report 
(WTO document WT/TPR/S/375/Rev.1, 14 September 2018) referred to handling procedures for customs 
clearance (the time from Customs' acceptance of the declaration of goods to the issuing of the release order). 
The figures provided in this Rev iew consider overall clearance time for goods at the port (the time from the 
arrival of goods at the port to their pick -up, including arrival at the port, unloading and tally, clearance 
preparation, customs clearance, and customs release).  
16 WTO TFA Databa se. Viewed at: https://tfadatabase.org/members/china . 
17 GACC Decree No.  209, 27 June 2013, Customs Supervision Measures for Hengqin New Area. Viewed 
at: http://www.mofcom.gov.cn/article/b/g/201309/20130900326388.shtml ; and GACC Decree 
No. 208, 27 June 2013, China Customs Regulatory Approach to Pingtan Comprehensive Experimental Zone 
(Trial). Viewed at: http://www.mofcom.gov.cn/article/b/g/201309/20130900326405.shtml . WT/TPR/S/ 415 • China  
 
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  from or imported into China via road ports.18 Specific customs clearance supervision modes to 
support China's cross -border e -commerce pilot projects have been continued.19 
3.14.   Citizens, legal persons, or other organizations believing that a specific administrative act of 
Customs infringes upon their legitimate rights and interests may file an application for administrative 
reconsideration within 60 days of the knowledge of such an act, or file a lawsuit in a People's Court 
within six months of such knowledge. For tax payment disputes, a party can file an application for 
administrative reconsideration with Customs in accordance with the Customs Law. If the party is 
dissatisfied, t he next step is to file an administrative proceeding with a People's Court. Between 
January 2018 and July 2020, the GACC accepted 104  administrative review cases, including 
43 government information publicity cases, 6  inspection and quarantine treatment ca ses, 
12 administrative penalty cases, 8 taxpaying disputes, 1  complaint report reply, 2 administrative 
licensing cases, and 2 enterprise management cases. Over the same period, the GACC handled 
46 lawsuits, including 16 complaints and reports, 1  taxpaying dispute, 3 administrative penalty 
cases, 20 government information publicity cases, 5  unaccepted reconsideration cases, 
1 administrative compensation case, and 1 administrative licensing case.  
3.1.1.1   Preshipment inspection  
3.15.   In 2019, China notified to the WTO its l aws and regulations putting the Agreement on 
Preshipment Inspection into force.20 These are the Law on Import and Export Commodity Inspection 
(amended in 2018)21; Regulations on the Implementation of the Law on Import and Export 
Commodity Inspection (revis ed in 2019)22; Measures for the Inspection, Supervision and 
Administration of Imported Old Mechanical and Electrical Products23; and the Measures for the 
Supervision and Administration of Inspection and Quarantine of Imported Solid Waste Which Can Be 
Used as Raw Materials.24 The authorities indicate that mandatory preshipment inspection (PSI) 
requirements are applied to a specified range of imported old mechanical and electrical products; 
PSI requirements also used to be required for imports of solid waste before such imports were 
prohibited on 1  January  2021 (Section 3.1.5).  
3.1.1.2   Customs valuation  
3.16.   There have been no changes in China's customs valuation rules and procedures since its 
previous Review. These are contained in GACC Decree No.  2013 and were notified t o the WTO 
in 2018.25 Customs value is determined on the basis of the transaction value and, when it cannot be 
used, the other valuations methods are used in sequential order, as stipulated in the WTO Customs 
Valuation Agreement.  
3.1.1.3   Trade facilitation  
3.17.   China de posited its instrument of acceptance of the Protocol of Amendment inserting the 
Agreement on Trade Facilitation (TFA) into Annex 1A to the WTO  Agreement on 4  September  2015. 
 
18 Administrative Measures for Centralized Declaration of Imported and Exported Goods.  
19 At the time of China's previous Review, fou r new customs clearance supervision modes had been 
proposed to support cross -border e -commerce pilot projects (general export, export to special areas, direct 
purchase import, and e -commerce bonded import), three new supervision modes for cross -border e -commerce 
had been set up; and a cross -border e -commerce retail import and export informational customs clearance 
management system had been established (WTO document WT/TPR/M/375/Add.1, 1 February 2019). As 
indicated by the authorities in the context of this  Review, in 2020 Customs carried out the pilot programme of 
business -to-business export in cross -border e -commerce in 22 customs offices.  
20 WTO document G/PSI/N/1/Rev.4/Add.1, 23  October  2019.  
21 Law on Import and Export Commodity Inspection. Viewed at: 
http://www.customs.gov.cn/customs/302249/302266/302267/2369445/index.html . 
22 Regulations on the Implementation of the Law on Import and Export Commodity Inspection. View ed 
at: http://www.customs.gov.cn/customs/302249/302266/302267/2369666/index.html . 
23 Measures for the Inspection, Supervision and Administration of Imported Old Mechan ical and 
Electrical Products. Viewed at: 
http://www.customs.gov.cn/customs/302249/302266/302267/2371611/index.html . 
24 Measures for the Supervision and Administration of Inspection and Quarantine of Imported Solid 
Waste Which Can Be Used as Raw Materials. Viewed at: 
http://www.customs.gov.cn/customs/302249/302266/302267/2371598/ind ex.html . 
25 WTO document G/VAL/N/1/CHN/6, 12 April 2018.  WT/TPR/S/ 415 • China  
 
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  China notified its Category A commitments, which cover the majority of measures, i n June 201426, 
and its Category B commitments in June 2017.27 China does not have any Category C commitments. 
The authorities indicate that implementation of Category B clauses was accelerated and, in some 
cases, achieved ahead of schedule. Notably, the "Single Window" clause was implemented in 
July 2019, and the "e stablishment and publication of average release times" was implemented in 
January 2020. According to the WTO TFA database, China fully implemented the Agreement ahead 
of the original date of 22  February  2020.28 China updated official publication locations and contact 
points with relevant information and participated in exchanges of experience within the Committee 
on Trade Facilitation (it shared its AEO programme experience with the Committee in October 2018 
and its single window experience in October  2019) .29 
3.18.   In February 2020, the GACC issued 10 Measures to Cope with the Impact of the Epidemic and 
Promote the Steady Growth of Foreign Trade in order to reduce the impact of COVID ‑19 on the 
Chinese economy and promote the steady growth of foreign trade when pr eventing and controlling 
the epidemic (Box 3.1). Additionally, in March 2020, the GACC issued a List of Measures for 
Coordinating Work to Prevent and Control the Epidemic at Ports and Facilitating Customs Clearance. 
Reportedly, this list contains 50 measur es to implement the decisions and arrangements on epidemic 
prevention and control and the facilitation of customs clearance at ports, focusing on four aspects: 
(i) preventing imported cases of COVID ‑19; (ii)  facilitating customs clearance; (iii)  reducing i mport 
and export costs; and (iv)  ensuring the unimpeded operation of industrial chains and foreign trade 
supply chains.30 
Box 3.1 GACC trade facilitation measures  
1. Simplification of business registration and h elp with clearance formalities.  Applications for changes 
to a business's registration information (except name changes) may be postponed until after the outbreak 
ends. The GACC will provide more timely assistance to businesses (especially micro, small, and  medium -sized 
enterprises (MSMEs)) with import/export problems.  
2. Expedited clearance of imported electromechanical equipment and raw materials urgently 
needed for domestic production , including through increased use of inspection machines and minimized 
used of laboratory testing of goods on strength of third -party certificates, test reports, or enterprise quality 
and safety self -declarations.  
3. Import facilitation of food and agricultural product imports.  Expedited process to grant market 
access to more categories of agri -food products from more countries and to register more establishments. 
Shortening of quarantine approval process. Green lanes to be established at key ports to provide around -the-
clock clearance for foreign agri -food products  on a reservation basis. Priority inspection of imported food and 
agricultural products over other goods and priority testing of products suspected to contain pests or disease.  
4. Support businesses in export expansion. The GACC optimizes of pre -export co ntrol and certification 
services. Expedited administrative approval for registered exporters and training in dealing with technical 
trade barriers.  
5. Simplified sanitary approval for imported special medical supplies.  Direct release by customs of 
importe d special medical supplies used for curing, preventing, and diagnosing COVID ‑19 on the strength of 
certificates issued by relevant competent authorities, provided the sanitary risk is controllable.  
6. Simplified extension formalities for processing trade enterprises , in case of delayed resumption of 
production.  
7. Simplified write -off formalities and reduced on -site audits.  The GACC handles write -off formalities 
based on the inventory data provided by enterprises, without checking at the factory. If feasi ble, the GACC 
conducts off -site audits by video or electronic data transmission to minimize interruption to enterprises' 
production and operation.  
8. Simplified and expedited administrative penalty procedures.  The GACC handles law -breaking cases 
involving  anti-epidemic supplies in a fast and simple way, and should not detain the involved goods, items, 
transportation conveyances or account documents under usual circumstances. The involved party's written 
confession, if proven by key evidence such as inspect ion records can be used as evidence by the GACC.  
 
26 WTO documents WT/PCTF/CHN/1, 1 June 2014; and G/TFA/N/CHN/1/Add.1, 24 November 2017.  
27 WTO documents G/TFA/N/CHN/1, 6 June 2017; and G/TFA/N/CHN/1/Add.2, 14 February 2018.  
28 WTO TFA Database. Viewed  at: https://tfadatabase.org/members/china . 
29 All TFA notifications may be viewed at: https://tfadatabase.org/members/china . 
30 GACC. Viewed at: http://www.customs.gov.cn/customs/xwfb34/302425/2892073/index.h tml. WT/TPR/S/ 415 • China  
 
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  9. Enhanced international coordination and steps to cope with external trade restrictions. 
Monitoring, analysis, and publication of external trade restrictions by the GACC and provision of consultation 
services.  
10. Efficiency with support of "Internet + Customs".  When a paper document is required for verification, 
its electronic copy can be ac cepted by the GACC upon approval before the submission of the paper document. 
Customs, through a new service hotline and media platforms, answers queries from enterprises and publishes 
customs policies and measures.  
Source:  GACC. Viewed at: http://www.customs.gov.cn/customs/ztzl86/302414/302415/gmzyx/zcwj5/3358 
972/index.html ; and GACC, GACC Launches Facilitative Measures as Foreign -Trade Businesses Beg in 
to Resume Operations , 19 February 2020. Viewed at: 
http://english.customs.gov.cn/Statics/8f0f8824 -eef2-492b-ace6-77d84bf12f1f.html . 
3.19.   The authorities confirm t hat China's COVID ‑19-related measures affecting goods , in the area 
of trade facilitation,  include: (i)  a MOFCOM notice actively guiding and encouraging enterprises to 
apply for import and export licences through a paperless process, further simplifying the  materials 
required for the paperless application for import and export licences, optimizing the application and 
updating processes of electronic keys, and encouraging enterprises to apply for and update electronic 
keys online; (ii)  a Ministry of Agricultu re and Rural Affairs (MARA) circular implementing 
nine facilitation measures regarding three  categories of agricultural administrative approval (licence 
renewal, simplification of approval procedure, and optimization of approval process); and (iii)  trade 
facilitation measures through the holding of the 127th Canton International Fair online.31 
3.1.2   Rules of origin  
3.20.   China continues to apply preferential and non -preferential rules of origin.  
3.21.   Non-preferential rules of origin are used to apply the most -favoured nation (MFN) tariff rate; 
ensure the origin of goods subject to anti -dumping, countervailing, and safeguard measures; ensure 
that import quotas and tariff quota limits are imposed on spec ific countries; and determine the origin 
of imported goods purchased by the Government. During the review period, the GACC simplified the 
application process for certificates of non -preferential origin.32 
3.22.   Preferential rules of origin apply in accordance wi th the specifications of the various 
preferential agreements signed by China. They are also used to grant preferential treatment to 
imports from least developed countries (LDCs). In general, the criteria used to determine origin 
include change in tariff cl assification, whether the good is wholly obtained in one party, regional 
value content, processing operation, or other requirements. Most free trade agreements (FTAs) 
provide for the possibility of bilateral cumulation. Since China's previous Review, rules  of origin of 
FTAs with Chile; Macao, China; and Georgia were notified to the WTO.33 The main features of all of 
China's preferential rules of origin in force are described in the Secretariat report for China's previous 
Review.34 To facilitate customs regu lation -compliant clearance, China extended its electronic 
networking systems of origin, which enable the transmission of electronic data regarding certificates 
of origin in real time; the systems now cover 16 countries and regions under 13 RTAs.35 
 
31 WTO, COVID‑19: Measures Affecting Trade in Goods . Viewed at: 
https://www.wto.org/english/tratop_e/covid19_e/trade_related_goods_measure_e.htm . 
32 This ch ange was introduced through GACC Administrative Measures for the Issuance of Certificates of 
Non-Preferential Origin, implemented through GACC Order No.  240, which amends various regulations. Viewed 
at: www.customs.gov.cn/customs/302249/302266/302267/1880777/index.html . Filing procedures were 
changed to simplify material submission requirements; applicants are no longer required to submit copies of 
documents, including  the business licence, registration form for foreign trade operators, and organization code 
certificates, and they do not need to submit the original copies to be checked.  
33 WTO documents G/RO/N/191, 20 January 2020; G/RO/N/187, 20 September 2019; and G/RO /N/171, 
24 May 2018.  
34 WTO document WT/TPR/S/375/Rev.1, 14  September  2018. Table A3.1 describes the main features of 
the rules of origin under the Asia Pacific Trade Agreement and the Association of South East Asian Nations Free 
Trade Agreement, as well as China's RTAs with Aus tralia; Hong  Kong, China; Macao, China; Chile; the Republic 
of Korea; New  Zealand; Pakistan; Singapore; Peru; Switzerland; Iceland; Georgia; and Costa Rica.  
35 New systems that became operational during the review period were under China's RTAs with 
Pakista n (online date of 30/04/2018); Chile (01/01/2019); Singapore (01/01/2019); ASEAN (Singapore, 
01/11/2019; and Indonesia, 15/10/2020); Georgia (01/01/2020), and five LDCs (Bangladesh, Niger, Ethiopia, 
Mozambique, and Timor -Leste on 18/08/2020).  WT/TPR/S/ 415 • China  
 
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  3.1.3   Tariffs  
3.1.3.1   Applied MFN tariffs  
3.23.   China's tariff structure is composed of MFN tariff rates, "agreement tariff rates", special 
preferential tariff rates, general tariff rates, and tariff quota rates. In addition, interim tariff rates, 
which are usually lower than MFN rat es, are applied for a specific period of time (usually one year).36 
3.24.   China's applied MFN tariff in 2021 consists of 8,580  lines at the 8 -digit level in the 2017 
Harmonized System. Most tariff lines (87.4%) carry ad valorem  tariffs. 
One thousand  eighty -one tariff lines (12.6% of all lines) were duty -free. Thirty -four tariff lines 
(0.4 % of all lines) carry specific rates.  
3.25.   The simple average applied MFN rate in 2021 was 7.1%, compared with 9.3% in 2017, with 
tariff-rate reductions in nearly all product categor ies. The tariff was higher for agricultural products 
(WTO definition), at 12.7%, showing a notable decrease compared with 2017 and 2015 (Table  3.2). 
The average applied tariff on non -agricultural products fell to 6.2% (from 8.5% in 2017 and 8.6% 
in 2015). The percentage of tariffs that exceeded 15% (international tariff peaks) was 4.5% 
(significantly lower than the 13.9% in 2017). The percentage of tariffs subject to domestic tariff 
peaks was 1.9% (compared with 1.8% in 2017).  
3.26.   With respect to agriculture, t he main decreases in tariff rates can be found under food 
preparations. The tariff average under HS Chapter 16 (preparations of meat and fish) dropped from 
10.4% in 2017 to 5.5% in 2021, and the maximum tariff rate dropped from 23% to 12%. The tariff 
avera ge under HS Chapter 19 (preparations of cereals, flour, starc h, or milk) dropped from 17.5% 
in 2017 to 9.0% in 2021, and the maximum tariff rate dropped from 30% to 10%. Under 
HS Chapter  20 (preparations of vegetables, fruit, or nuts), the tariff average d ropped from 20.1% 
in 2017 to 6% in 2021.  
3.27.   Among the main products/product groups affected by decreases in tariff peaks were food 
preparations, clothing and footwear (HS Chapters 62 -64), articles of stone and cement 
(HS Chapter  68), articles of precious meta ls (HS 7113 to HS 7117), motor vehicles (HS  8703), and 
monitors and projectors (HS 8528).  
Table 3.2 Tariff structure, 2015, 2017, and 2021  
 
MFN applied  Current 
bounda,c Final 
boundc 2015  2017a 2017b 2021a 
Bound tariff lines (% of all tariff lines)  100.0  100.0  100.0  100.0  100.0  100.0  
Simple average rate  9.5 9.5 9.3 7.1 9.6 9.6 
 WTO agricultural products  14.8 14.8 14.6 12.7 15.1 15.1 
 WTO non -agricultural products  8.6 8.6 8.5 6.2 8.8 8.7 
Duty-free tariff lines (% of all tariff lines)  9.7 9.8 9.8 12.6 9.6 10.3 
Simple average rate of dutiable lines only  10.5 10.5 10.3 8.1 10.7 10.7 
Tariff quotas (% of all tariff lines)  0.6 0.6 0.6 0.5 0.5 0.5 
Non-ad valorem  tariffs (% of all tariff lines)  0.5 0.4 0.4 0.4 0.0 0.0 
Domestic tariff "peaks" (% of all tariff lines)d 2.2 2.0 1.8 1.9 2.1 2.1 
International tariff "peaks" (% of all tariff lines)e 14.4 14.6 13.9 4.5 15.5 15.3 
Overall standard deviation of tariff rates  7.5 7.5 7.4 6.1 7.7 7.6 
Coefficient of variation of tariff rates  0.8 0.8 0.8 0.9 0.8 0.8 
Nuisance applied rates (% of all tariff lines)f 2.9 2.9 3.2 4.3 2.8 2.5 
 
36 Agreement r ates apply to imports from countries and customs territories with which China has 
preferential trade agreements (Section 2). Special preference duty rates are unilateral preferences applied to 
imports originating in LDCs with which China has a trade agreem ent. General rates apply to: products whose 
origin cannot be determined; products from countries that do not have a reciprocal trade agreement with 
China; non -WTO Members; and some territories of EU member States. If a country appears in several lists, the  
most favourable duty rate applies, taking into account the rules of origin. Interim duties are fixed annually by 
the Customs Tariff Commission, and usually apply from 1 January to 31 December of each year. Interim duties 
are applied on an MFN basis and re place the MFN duties for the lines that are affected. Interim duty rates are 
lower than the MFN rates, and in certain instances the interim duty rate applies to just part of a tariff line.  WT/TPR/S/ 415 • China  
 
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MFN applied  Current 
bounda,c Final 
boundc 2015  2017a 2017b 2021a 
Number of lines  8,285  8,547  8,547  8,580  8,580  8,580  
Ad valorem  rates (> 0%)  7,437  7,671  7,669  7,499  7,753  7,696  
Duty-free rates  806 838 840 1,081  827 884 
Specific rates  34 34 34 34 0 0 
Alternate rates  3 3 3 3 0 0 
Otherg 5 1 1 0 0 0 
a As at 1  July. Tariff cuts implemented by the expansion of the Information Technology Agreement are 
included.  
b As at 1  December  2017. Tariff cuts fully applied at the 8 -digit level (179 tariff lines) are included.  
c Bound rates are based on the 2021 tariff  schedule. Final bound rates are fully implemented by 2023.  
d Domestic tariff peaks are defined as those exceeding three times the overall average applied rate.  
e International tariff peaks are defined as those exceeding 15%.  
f Nuisance rates are those gre ater than zero, but less than or equal to 2%.  
g Rates involving either an ad valorem  rate, if the price is below or equal to a certain amount, or a 
compound rate, if the price is higher.  
Note:  Calculations are based on national tariff line level (8 -digit),  excluding in -quota rates and including 
ad valorem  equivalents (AVEs) for non -ad valorem  rates provided by the authorities.  
 Interim duty rates are used for the calculations when fully applied at the 8 -digit level.  
Source:  WTO Secretariat calculations, bas ed on data provided by the authorities.  
3.28.   In 2021, China's applied MFN tariff contained 50 different ad valorem  tariff rates (compared 
with 78 in 2017). These ranged from 0 -65%, with a standard deviation of 6.1 (Table A3.1).  
3.29.   Over 87% of all tariffs ranged fr om duty -free to 10%, higher than the 71% reported in 2017, 
and in tandem the share of lines with rates higher than 10% decreased significantly. In 2021, 1.9% 
of tariff lines had rates of over 20% (Chart 3.1). China's highest tariffs of 65% apply to 20 tari ff 
lines (wheat and meslin; maize, other than seed; rice; wheat and meslin flour; cereal groats, meal 
and pellets; certain worked cereal grains (of maize and of barley); and vermouth and other wine 
flavoured with plants (in containers holding more than 2 l itres)). Rates of 57% apply to four tariff 
lines (other manufactured tobacco (HS 2403)). Rates of 50% apply to 10 tariff lines (7 to cane or 
beet sugar and chemically pure sucrose in solid form (HS 1701) and 3 to mineral or chemical 
fertilizers (HS  3105)).  
Chart 3.1 Distribution of MFN applied tariff rates, 2015, 2017, and 2021  
 
Note:  Figures above the bars denote the share of total lines. 2015 tariff schedule is based on 
HS12  nomenclature, and 2017 and 2021 o n HS17.  
Source:  WTO Secretariat calculations, based on data provided by the authorities.  
9.717.543.1
15.2
8.4
3.82.2 9.818.442.8
15.1
7.8
4.2
1.912.623.151.9
7.9
2.5
0.81.1
05001,0001,5002,0002,5003,0003,5004,0004,5005,000
Duty free >0-5 >5-10 >10-15 >15-20 >20-25 >25
Note:     Figures above the bars denote the share of total lines.  2015 tariff schedule is based on HS12 nomenclature, and 
2017 and 2021 on HS17.
Source:  WTO Secretariat calculations, based on data provided by the authorities.Number of tariff linesChart 3.1   Distribution of MFN applied tariff rates, 2015, 2017, and 2021
Tariff rates (%)MFN 2015 (8,285 tariff lines)
MFN 2021 (8,580 tariff lines)
(as at 1 July)MFN 2017 (8,547 tariff lines)
(as at 1 December)WT/TPR/S/ 415 • China  
 
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  3.30.   Between 2017 and 2021, average tariff rates decreased across all HS sections except for 
03 (fats and oils) and 19 (arms and ammunition). The most significant drops wer e seen in 
HS Sections  04 (prepared food, beverages); 11 (textiles and articles); 12 (footwear and headgear); 
14 (precious stones , etc.); 17 (transport equipment); 20 (miscellaneous manufacturing); and 
21 (works of art , etc.) (Chart 3.2).  
Chart 3.2 Average applied tariff rates, by HS section, 2017 and 2021  
 
Note:  Excluding in -quota rates and including AVEs for non -ad valorem  rates. Interim duty rates are used 
for the calculations when fully applied at the 8 -digit level.  
Source:  WTO Secretariat calculations, based on data provided by the authorities.  
3.1.3.2   Tariff  rate quotas (TRQs)  
3.31.   Wheat (7 tariff lines), corn (5 lines), rice (14 lines), sugar (7 lines), wool and wool top 
(9 lines), cotton (2 lines), and chemical fertilizer (3 lines) are subject to TRQs (Section  4.1.2). 
3.1.3.3   Bound tariffs  
3.32.   Upon its entry into the WTO, China boun d 100% of its tariffs at ad valorem rates ranging from 
0-65% for agriculture (WTO definition) and from 0 -50% for non -agricultural products. The simple 
average current bound rate is 9.6% (15.1% for agriculture and 8.8% for non -agricultural goods); 
final bou nd rates must be implemented by 2023. While all tariffs were bound at ad valorem rates, 
applied MFN tariffs on 37 tariff lines are non -ad valorem . At the time of China's previous Review, 
the authorities indicated that ad valorem  equivalents do not exceed t he bound tariff rate in practice, 
as the lower rate is applied.  
3.1.3.4   Preferential rates  
3.33.   China applies preferential tariffs under its preferential (PTAs) and regional trade agreements 
(RTAs) (Section  2.3.2). Hong Kong, China and Macao, China face the lowest aver age tariff duties, 
followed by Chile and New  Zealand (Table 3.3). The share of duty -free tariff lines in China's RTAs 
ranges between 0.04% (RTAs with Hong Kong, China and Macao,  China) and 6.6% ( Separate 
Customs Territory of Taiwan, Penghu, Kinmen and Mats u (Chinese Taipei) ). Data on utilization of 
preferential tariffs under RTAs and PTAs were not available.  
3.34.   China also grants preferential tariff treatment to imports from LDCs that have established 
diplomatic relations with China, and completed the exchange of diplomatic notes. By February 2021, 
0%2%4%6%8%10%12%14%16%18%20%
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21TotalChart 3.[CHN]  Average applied tariff rates, by HS section, 2017 and 2021
01   Live animals & products        
02   Vegetable products
03   Fats & oils      
04   Prepared food, beverages
05   Mineral products
06   Chemicals & products07   Plastic & rubber
08   Hides & skins
09   Wood & articles
10   Pulp, paper, etc.
11   Textiles & articles
12   Footwear, headgear13   Articles of stones
14   Precious stones, etc.
15   Base metals & products
16   Machinery
17   Transport equipment
18   Precision instruments19   Arms & ammunition
20   Miscellaneous manufacturing
21   Works of art, etc.MFN 2021 (as at 1 July)
Note:  Excluding in -quota rates and including AVEs for non -ad valorem rates.  Interim duty rates are used for the 
calculations when fully applied at the 8 -digit level.  
Source:  WTO Secretariat calculations, based on data provided by the authorities.MFN 2017 (as at 1 December)WT/TPR/S/ 415 • China  
 
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  China had implemented zero tariffs on 97% of tariff lines for these 41 LDCs. Submissions have been 
made by LDCs and China to the WTO Committee on Rules of Origin regarding utilization rates of 
LDC exports under China' s LDC preferential trade arrangement.37 
Table 3.3 Summary analysis of the Chinese preferential tariff, 2020  
  Total  WTO agriculture  WTO non -agriculture  
Average 
(%) Duty -free 
ratesa (%) Average 
(%) Duty -free 
ratesa (%) Average 
(%) Duty -free 
ratesa (%) 
MFN 7.1 12.6 12.7 8.9 6.2 13.2 
Agreement tariff rates        
APTAb 6.5 12.8 11.8 9.8 5.7 13.3 
ASEANc 0.6 94.0 1.6 92.5 0.4 94.3 
Hong Kong, China CEPAd 0.04 99.2 0.0 100.0  0.05 99.1 
Macao, China CEPAd 0.04 99.2 0.0 100.0  0.05 99.1 
Chinese  Taipei ECFAe 6.6 19.9 12.5 10.3 5.7 21.4 
Pakistan FTA  3.8 46.3 8.9 27.8 3.0 49.2 
Chile FTA  0.4 97.6 1.9 94.9 0.1 98.0 
New Zealand FTA  0.4 97.9 1.9 94.8 0.1 98.4 
Singapore FTA  4.1 45.8 8.4 43.1 3.4 46.2 
Peru FTA  0.9 93.4 2.5 89.2 0.6 94.0 
Costa Rica FTA  0.5 95.9 2.5 86.6 0.2 97.4 
Iceland FTA  0.5 96.0 2.6 90.9 0.2 96.8 
Switzerland FTA  2.0 62.2 5.0 39.6 1.6 65.8 
Australia FTA  0.5 94.6 2.5 87.2 0.2 95.8 
Korea, Rep. of FTA  3.5 42.1 7.1 24.9 2.9 44.8 
Georgia FTA  0.8 90.8 3.3 80.6 0.4 92.4 
Mauritius FTA  1.6 87.9 4.6 78.0 1.1 89.5 
Least developed preferential rates      
Special preferential tariff agreement for:      
Bangladesh and Lao PDR 
under APTA  7.0 13.9 12.6 9.1 6.1 14.7 
Cambodia  6.5 18.7 10.1 30.0 6.0 16.9 
Lao PDR  6.8 16.4 10.9 23.8 6.1 15.2 
Myanmar  6.8 16.5 11.9 14.7 6.0 16.8 
LDC1 (40 countries)  0.6 96.6 2.3 93.5 0.3 97.0 
LDC2 (Benin, Timor -
Leste, Myanmar)  0.8 94.4 2.4 92.3 0.5 94.8 
Memorandum item:        
Bangladeshf 0.5 96.6 2.3 93.5 0.3 97.0 
Cambodiag 0.4 97.1 1.4 94.6 0.2 97.5 
Lao PDRh 0.4 97.1 1.4 94.7 0.2 97.5 
Myanmari 0.5 95.7 1.4 94.6 0.3 95.8 
Singaporej 0.6 94.1 1.5 92.6 0.4 94.3 
Korea, Rep. ofk 3.4 42.1 7.1 24.9 2.8 44.8 
a Duty-free lines as a percentage of total tariff lines.  
b Preferential rates under the Asia Pacific Trade Agreement (APTA) are applicable to the Republic of 
Korea, Sri Lanka, Bangladesh, India, and Lao People's Democratic Republic ( PDR). 
c Preferential rates under th e Association of South East Asian Nations (ASEAN) Agreement are 
applicable to Brunei  Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the 
Philippines, Singapore, Thailand, and Viet  Nam.  
d Closer Economic Partnership A rrangement  (CEPA).  
e Cross -straits Economic Co -operation Framework Agreement.  
f Based on lowest rates taken among APTA, Bangladesh and Lao PDR under APTA, and LDC1.  
g Based on lowest rates taken among ASEAN, special preferential for Cambodia under APTA, 
and LDC1.  
h Based on lo west rates taken among APTA, ASEAN, Bangladesh and Lao  PDR under APTA, special 
preferential for Lao PDR, and LDC1.  
i Based on lowest rates taken among ASEAN, special preferential for Myanmar, and LDC2.  
j Based on lowest rates taken among ASEAN, and Singapore FTA.  
k Based on lowest rates taken among APTA, and the Republic of Korea FTA.  
Note:  Calculations are based on national tariff line level (8 -digit), excluding in -quota rates and including 
AVEs for non -ad valorem  rates provided by the authorities. Interim duty rates are used for the 
calculations when fully applied at the 8 -digit level.  
Source:  WTO Secretariat calculations, based on data provided by the authorities.  
 
37 WTO document G/RO/W/192, 9 October 2019; and G/RO/W/197, 20 July 2020.  WT/TPR/S/ 415 • China  
 
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  3.1.3.5   Tariff exemptions or concessions  
3.35.   Tariff exemptions apply to the following imports: (i ) goods in a single consignment on which 
the duties are estimated to be less than CNY  50; (ii)  advertising material and samples of no 
commercial value; (iii)  goods donated by international organizations or foreign governments; 
(iv) goods damaged prior to c ustoms clearance; (v)  fuels and provisions to be used by vessels that 
are in transit in China; and (vi) goods imported for daily use and valued at less than CNY  8,000 per 
person per day. Tariff concessions can apply to goods that are processed and exported  within a 
specific period of time.  
3.36.   In addition, duty exemptions and reductions may apply in accordance with the relevant 
regulations by the State Council, and on goods imported into designated areas, for specific 
enterprises for a specific use.38 For insta nce, imported commodities are exempt from import duties 
and other taxes when entering special customs supervision areas. Various customs duty exemptions 
in place for the period 2017 -18 were notified to the WTO Committee on Subsidies and Countervailing 
Measures.39 Information was not available on any customs duty exemptions or reductions introduced 
since 2019; the authorities indicate that there were no available data on revenue forgone from tariff 
concessions or exemptions over the same period.  
3.1.4   Other charge s affecting imports  
3.37.   As noted in previous Reviews, other charges affecting imports are the value added tax (VAT), 
the consumption tax, the Automobile Purchase Tax, and (until March 2020) port construction fees. 
To support COVID ‑19 prevention and control, co mpanies and individual businesses are exempt from 
VAT and consumption tax (and various other charges that do not affect imports40) for goods 
self-produced, processed through commissioning, purchased, or donated for the purposes of curbing 
the spread of COV ID‑19, through public welfare social organizations, People's Governments and their 
departments at or above the country level and other state entities, or directly to hospitals 
undertaking the task of COVID ‑19 prevention and control. This exemption was effective from 
1 January  2020.41 
3.1.4.1   Value added tax (VAT)  
3.38.   In 2019, VAT accounted for 39.5% of total tax revenue (up from 39.1% in 2017). In 
May 2018, VAT tiers were reduced to 16%, 10%, and 6% (from 17%, 11%, and 6% in 2017).42 
Effective from April 2019, VAT was further reduced to 13%, 9%, and 6% (Table 3.4).43 
3.39.   As notified to the WTO, preferential VAT policies were in place during the period 2017 -18 for: 
(i) incubators of science and technology enterprises; (ii)  science and technology parks of national 
univers ities; (iii)  integrated utilization of resources; (iv)  new-type wall materials; 
(v) photovoltaic -generated electricity; (vi)  hydropower electricity; (vii)  small enterprises making 
little profit; (viii)  enterprises that employ disabled people; (ix)  imported  products exclusively used 
by disabled people; (x)  products for disabled people; (xi)  anti-HIV-AIDS medicine; (xii)  tea sold in 
the border areas; (xiii)  imported products for the purpose of replacing the planting of poppies; 
(xiv) imports of seeds (seedlin gs); (xv)  the integrated circuit industry; (xvi)  large passenger 
aircraft; and ( xvii) anti-cancer drugs.44 Pending China's submission of its new notification to the 
WTO Committee on Subsidies and Countervailing Measures, information was not provided by the  
authorities regarding which preferential VAT policies remain in place. From 1 January 2020 to 
31 December  2020, taxpayers were exempt from VAT on income obtained by providing film 
 
38 Customs Law, Article  57. 
39 WTO document G/SCM/N/343/CHN, 19  July 2019.  
40 These taxes/charges are the urban maintenance and construction tax, the educational surtax, and 
local education surcharges.  
41 MOFCOM and State Taxation Administration, Announc ement No.  9, 2020, on the Relevant Donation 
Tax Policies Supporting the Prevention and Control of the COVID ‑19 Outbreak.  
42 State Taxation Administration. Viewed at: 
http:/ /www.chinatax.gov.cn/eng/c101270/c101271/c5094511/content.html . 
43 KPMG, China's VAT System Takes Significant Steps Forward in Applying International Best Practice 
VAT Policies , 25 March 2019. Viewed at: https://home.kpmg/cn/en/home/insights/2019/03/china -tax-alert-
12.html . 
44 WTO document G/SCM/N/343/CHN, 19  July 2019.  WT/TPR/S/ 415 • China  
 
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  projection services.45 From 1  January  2019 to 31  December  2022, taxpayers a re exempt from VAT 
on goods donated for poverty alleviation, under certain conditions.46 
Table 3.4 VAT rates, December 2020  
Rate Products and services  
13% (1) Rate applied for taxpayers selling goods, labour services, or tangible movable property 
leasing services or imported goods, except as otherwise specified in items (2), (4), and (5).  
9% (2) Rate applied to taxpayers selling transportation, postal, basic telecommunications, 
construction, or immovab le leasing services, selling immovables, transferring the right to use 
the land, or selling or importing: (i)  grain and other agricultural products, edible vegetable oil, 
and edible salt; (ii)  tap water, heating, cooling, hot water, coal gas, liquefied pet roleum gas, 
natural gas, dimethyl ether, methane gas, and coal products for residential use; (iii)  books, 
newspapers, magazines, audio -visual recordings, and electronic publications; (iv)  feed, 
fertilizer, pesticide, agricultural machinery, and agricultura l films; and (v)  other goods 
specified by the State Council.  
6% (3) Rate applied to taxpayers selling services or intangible assets, except as otherwise 
specified in items (1), (2), and (5).  
Zero-rated (4) Rate applied to taxpayers exporting goods, except as specified by the State Council, and 
to domestic entities and individuals selling services or intangible assets across national borders 
within the scope prescribed by the State Council.  
Exempt  (5) VAT exemptions apply to: self -produced agricultural products sold by agricultural 
producers; contraceptive medicines and devices; antique books; apparatus and equipment 
imported and directly used for scientific research, experiments, and teaching; impo rted 
materials and equipment from foreign governments and international organizations as 
gratuitous aid; articles exclusively for persons with disabilities that are directly imported by 
organizations of persons with disabilities; and self -used articles sol d by the seller.  
Source:  Interim Regulation on Value Added Tax ( State Council Order No.  691), Articles 2 and 15; Notice of 
the Ministry of Finance and State Taxation Administration on the Relevant Policies on the 
Streamlining and Combination of Value -added Tax Rates (Cai Shui No.  37, 2017); and 
Announcement of the Ministry of Finance, the State Taxation Administration, and the GACC on 
Relevant Policies for Deepening the Value -added Tax Reform (Announcement No.  39, 2019).  
3.1.4.2   Consumption (excise) tax  
3.40.   In 2019, t he consumption (excise) tax (CT) accounted for 8% of total tax revenue (up from 
7.1% in 2017). The CT continues to be levied on products that are considered to be harmful to 
human health, social order, and the environment; luxury goods; high -energy consump tion and 
high-end products; and non -renewable and non -replaceable petroleum products. Tax rates vary 
depending on the product; they can be ad valorem , specific, or compound. There have been no 
changes to excise tax rates since China's previous Review (Tabl e 3.5). As notified to the WTO, 
preferential CT rates were available for petroleum products produced with comprehensive utilization 
of resources, imported products exclusively used by disabled people, and refined oil.47 Pending 
China's submission of its ne w notification to the WTO's Committee on Subsidies and Countervailing 
Measures, information was not provided by the authorities regarding new preferential CT rates or 
exemptions recently introduced.  
Table 3.5 Consumption tax, March 2021  
Product  Tax rate  
Cigars  36% 
Cigarettes   
Production procedure   
Price higher than CNY  70 per carton  56% plus CNY  0.003/cigarette  
Price lower than CNY  70 per carton  36% plus CNY  0.003/cigarette  
Wholesale  11% plus CNY 0.005/cigarette  
Cut tobacco  30% 
 
45 Announcement of the Ministry of Finance and State Taxation Administration on the Tax and Fee 
Support Policies for the Film Industry and Other Industries (Announcement No.  25, 2020).  
46 Announcement of the Ministry of Finance, the State Taxation Administration, and the State Council 
Leading Group Office of Poverty Alleviation and Development on the Policy of Exemption of Value -Added Tax on 
Goods Donated for Poverty Alleviation (Announcement No.  55, 2019).  
47 WTO document G/SCM/N/343/CHN, 19  July 2019.  WT/TPR/S/ 415 • China  
 
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  Product  Tax rate  
Alcoholic drinks and liquor   
White spirit distilled from grain, potatoes or grapes  20% plus CNY 0.5/500  g (or per 500  ml) 
Yellow rice wine  CNY 240/tonne  
Beer made from malt, whose factory price of a value over 
or equal to CNY  3,000 (VAT excluded) per tonne  CNY 250/tonne  
Beer made from malt, whose factory price of a value of less 
than CNY  3,000 (VAT excluded) per tonne  CNY 220/tonne  
Other fermented alcoholic beverages  10% 
Luxury cosmetics  15% 
Precious jewellery, pearls, jade, and precious stone   
Gold, silver platinum jewellery, and diamonds  5% 
Pearls, jade, and precious stones  10% 
Firecrackers and fireworks  15% 
Gasoline  
Motor gasoline and aviation gasoline (containing > 0.013 g 
of lead per litre) CNY 1.52/litre  
Motor gasoline and aviation gasoline (containing < 0.013 g 
of lead per litre)  CNY 1.52/litre  
Diesel oil  CNY 1.2/litre  
Aviation kerosene  CNY 1.2/litre  
Naphtha  CNY 1.52/litre  
Solvent  CNY 1.52/litre  
Lubricants  CNY 1.52/litre  
Fuel oil  CNY 1.2/litre  
Motor vehicles  
Passenger vehicles with less than 9  seats with a cylinder 
capacity of:   
- less than 1,000  ml 1% 
> 1,000 ml, but < 1,500 ml  3% 
> 1,500  ml, but < 2,000 ml  5% 
> 2,000  ml, but < 2,500 ml  9% 
> 2,500  ml, but < 3000 ml  12% 
> 3,000  ml, but < 4,000 ml  25% 
- 4,000 ml or more  40% 
Middle -size or light passenger vehicles for commercial 
purposes  5% 
"Ultra -luxurious" vehicles  In addition to the CT for the production 
(import) based on the above rate, the CT for 
retail is levied at 10%  
Motorcycles   
Those with a cylinder capacity of not more than 250 ml  3% 
Those with a cylinder capacity of more than 250  ml 10% 
Yachts  10% 
Luxury watches, with a unit price higher than CNY  10,000  20% 
Golf equipment  10% 
Solid wood flooring  5% 
Disposable chopsticks  5% 
Batteries  4% 
Paint  4% 
Source:  Information provided by the authorities.  
3.1.4.3   Automobile Purchase Tax  
3.41.   Under the 2019 Automobile Purchase Tax Law, China levies a 10% tax on domestically 
produced and imported vehicles.48 The 2019 Law replaces the 2000 Provisional Regulations Vehicle 
Purchase Tax. For domestic production, the tax is applied to the full price paid by the taxpayer to 
the seller, excluding VAT. For imported vehicl es, the taxable price is the duty -paid price plus customs 
 
48 Automobile Purchase Tax Law. Viewed at: http://www.npc.gov.cn/englishnpc/c23934/202009/ 
f0e542fd054f412c9af8ceef9298c573.shtml . Changes introduced by the 2019 Law: (i)  adjusted the scope of 
taxation (from automobiles, motorcycles, trams, trailers, an d agricultural transport vehicles to automobiles, 
trams, automobile trailers, and motorcycles with an engine displacement of more than 150  ml; and adjusted 
the types of taxable vehicles; (ii)  abolished the maximum taxable price requirement; (iii)  added the  statutory 
exemption items; (iv)  cancelled the paper tax clearance certificate of vehicle purchase tax; (v)  revised the 
definition of non -transportation vehicles with fixed items; (vi)  upgraded the legal level of tax refund provisions; 
and (vii)  added prov isions related to the coordination mechanism.  WT/TPR/S/ 415 • China  
 
- 58 - 
 
  duty and CT. It is applied to the cost of the vehicle including the import tax and CT.49 The tax does 
not apply to urban rail vehicles (e.g. subways and light railways), special wheeled machinery ve hicles 
(e.g. loaders, graders, excavators, and bulldozers), cranes, forklifts, and electric motorcycles. Since 
2014, the tax has been exempted for certain new energy vehicles (NEVs); this exemption will remain 
in place until end -2022. NEVs exempt from the tax/levy are administered by the Ministry of Industry 
and Information Technology (MIIT) and the State Taxation Administration through the regularly 
updated Catalogue of Models of New Energy Vehicles Exempted from Automobile Purchase Tax. Both 
domestically produced and imported NEVs that meet all the specific requirements (which relate to, 
inter alia, technical requirements and testing and services standards) can apply to be listed in the 
Catalogue, and all the Catalogue -listed models can enjoy tax exemptions.50 As notified to the WTO, 
other preferential tax rates applied in 2017 and 2018 to urban public transportation enterprises that 
purchase public buses and trolleybuses, low emission cars, and trailers.51 Pending China's 
submission of its new not ification to the WTO Committee on Subsidies and Countervailing Measures, 
information was not available on whether these preferential tax policies remain in place or if any 
new preferential tax rates/exemptions have been recently introduced.  
3.1.4.4   Port constructi on fees  
3.42.   Until 1  March  2020, China levied port construction fees on imported and exported goods.52 
For domestic export containers and inland containers, the fees were CNY  32 per 20 -foot container 
and CNY  48 per 40 -foot container. For foreign import and expo rt containers, the fees were 
CNY 64 per 20 -foot container and CNY  96 per 40 -foot container. The fee for other non -standard 
containers, except 20 -foot and 40 -foot containers, was levied according to that of similar types of 
containers (for non -standard cont ainers less than 30 feet, the fee was levied according to that of 
20-foot containers; for non -standard containers of 30 feet and above, the fee was levied according 
to that of 40 -foot containers). The authorities indicate that a temporary decision was take n not to 
collect these fees from 1 March to 31  December 2020, followed by a permanent decision to abolish 
fees from 1  January  2021.  
3.1.5   Import prohibitions, restrictions, and licensing  
3.43.   China continues to classify imports into three categories: not restricted, restricted, and 
prohibited. The import of restricted goods is administered through licences or import quotas, 
although the latter were not applied during the review period. The licensing system does not 
differentiate between the origins of products unless otherwise provided for in RTAs entered into 
by China.53 
3.1.5.1   Import prohibitions  
3.44.   According to the Foreign Trade Law (last amended in 2016), China may maintain import 
prohibitions on the grounds of protection of human health or safety, protection of the lives or  health 
of animals and plants, protection of the environment, and implementation of measures related to 
the import or export of gold or silver.  
3.45.   China notified to the WTO its import prohibitions in place for the period 2018 -20 (Table 3.6). 
These prohibition s applied to certain toxic substances and wild animal products; certain old/second -
hand mechanical and electrical equipment; certain hazardous chemicals, pesticides, and persistent 
organic pollutants; mercury -added products; certain solid wastes; ractopami ne; certain types of 
filament lamp; and charcoal imported from Somalia. This list of prohibited products is also contained 
 
49 For full details, see Automobile Purchase Tax Law, Article  6. 
50 The exemption criteria for the period 2017 -20 are contained in the Announcement of the Ministry of 
Finance, the State Taxation Administration, t he MIIT, and the Ministry of Science and Technology on the 
Exemption of Automobile Purchase Tax for New Energy Vehicles (Announcement No.  172, 2017). Seemingly, 
the exemption was extended until end -2022. Global Times , "China Scraps Vehicle Purchase Tax for  all NEVs", 
22 April 2020. Viewed at: https://www.globaltimes.cn/content/1186457.shtml#:~:text=China%20has%2 0al 
ready%20scrapped%20the,to%20all%20NEVs%20this%20time . 
51 WTO document G/SCM/N/343/CHN, 19  July 2019.  
52 Ministry of Finance and Ministry of Transport Administrative Measures for the Collection and Use of 
Port Construction Fees (Cai Zong No.  2011, 2019).  
53 WTO document G/LIC/N/3/CHN/18, 30 January 2020.  WT/TPR/S/ 415 • China  
 
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  in MOFCOM's Catalogue of Commodities Subject to Import Prohibition.54 In 2018, MOFCOM and the 
GACC adjusted the list of used mechanic al and electrical products prohibited from import, by 
removing from the Catalogue used mechanical and electrical products such as aircraft engines, ship 
engines, non -medical X -ray equipment, and computer gamespot.55 
Table 3.6 Import prohibitions notified to the WTO for period 2018 -20 
Product  Tariff line code(s) affected, based on 
HS17  WTO 
justification 
and grounds 
for restriction  National legal basis and 
entry into force  
Certain toxic 
substances and 
wild animal 
products  ex0506, ex0507, ex1302, ex2903  Article  XX of 
GATT  1994  Former Ministry of Foreign 
Trade and Economic 
Cooperation (MOFTEC) 
Announcement No.  19, 
2001 
Certain 
old/second -hand 
mechanical and 
electrical 
equipment  ex7311, ex7321, ex7613, ex8402, ex8403, 
ex8404, ex8416, ex8417, ex8519, ex8520, 
ex8521, ex9018, ex9022, ex9504, ex8407, 
84078408, 87  Article  XX of 
GATT  1994  MOFTEC, GACC, and AQSIQ 
Joint Announcement 
No. 37, 2001 
Certain hazardous 
chemicals, 
pesticides, 
persistent organic 
pollutants, and 
mercury -added 
products  ex2524, ex2903, ex2908, ex2910, ex2915, 
ex2918, ex2919, ex2921, ex2924, ex2925, 
ex2932, ex2914, ex2909, ex2920, ex3808, 
ex3824, ex8506, ex8535, ex8536, ex8539, 
ex3304, ex3401, ex3808, ex 9025, ex9026, 
ex9018   Article  XX of 
GATT  1994, the 
Rotterdam 
Convention, the 
Stockholm 
Convention, 
and the 
Minamata 
Convention  MOFCOM, GACC, and 
former State Environmental 
Protection Administration 
(SEPA) Joint Announcement 
No. 116, 2005;  MOFCOM, 
GACC, an d Ministry of 
Ecology and Environment 
(MEE) Joint Announcement 
No. 73, 2020 
Certain solid 
wastes (also 
including other 
solid waste of 
which tariff lines 
unspecified)  ex0501, ex0502, ex0505, ex0506, ex0507, 
ex0511, ex1522, ex1703, ex2517, ex2525, 
ex2530, e x2618, ex2619, ex2620, ex2621, 
ex2710, ex2713, ex2804, ex3006, ex3804, 
ex3825, ex4004, ex4017, ex4115, ex4707, 
ex6309, ex6310, ex7001, ex7112, ex7401, 
ex7802, ex8102, ex8105, ex8107, ex8110, 
ex8111, ex8112, ex8548, ex2520, ex2524, 
ex6806, ex8415, ex8418, e x8450, ex8469 
to ex8473, ex8508 -ex8510, ex8516, 
ex8517, ex8518, ex8539, ex9504, ex8519 
to ex8531, ex8532 to ex8534, ex8540 to 
ex8542, ex9018 -ex9022, ex84, ex85, ex90, 
and other solid waste unspecified ex3915, 
ex5103, ex5104, ex5202, ex5505  Article  XX of 
GATT 1994, the 
Basel 
Convention  Ministry of Environmental 
Protection (MEP), MOFCOM, 
National Development and 
Reform Commission 
(NDRC), GACC, and AQSIQ 
Joint Announcement 
No. 39, 2017 
Certain solid 
wastes  ex2618, ex2619, ex3915, ex7204, ex7404, 
ex7602, ex 8908  Article  XX of 
GATT  1994, the 
Basel 
Convention  MEE, MOFCOM, NDRC, and 
GACC Joint Announcement, 
No. 6, 2018 
Certain solid 
wastes  ex4401, ex4501, ex7204, ex8101, ex8104, 
ex8106, ex8108, ex8109, ex8112, ex8113  Article  XX of 
GATT  1994, the 
Basel 
Conven tion  MEE, MOFCOM, NDRC, and 
GACC Joint Announcement, 
No. 6, 2018 
 
54 Catalogue of Goods Prohibited from Import (1st Batch), MOFCOM Announcement No.  19, 2001. 
Viewed at: http://www.mofcom.gov.c n/article/b/e/200207/20020700031637.shtml ; 3rd Batch, MOFCOM, 
GACC, and State Administration of Environmental Protection Announcement No.  36, 2001. Viewed at: 
http://www.mofco m.gov.cn/article/b/c/200404/20040400209990.shtml ; 4th Batch and 5th Batch, MOFCOM, 
GACC, and State Administration of Environmental Protection Announcement No.  25, 2002. Viewed at: 
http://www.mofcom.gov.cn/article/b/c/200404/20040400205769.shtml ; 6th Batch, MOFCOM, GACC, and State 
Administration of Environmental Protection Announcement No.  116, 2005. Viewed at: http://www.mofcom. 
gov.cn/article/b/c/200602/200602015 75919.shtml ; and Adjustment of Catalogue of Goods Prohibited from 
Import (3rd Batch), MOFCOM, GACC, and State Administration of Environmental Protection Announcement 
No. 73, 2004. Viewed at: http://www.mofcom.gov.cn/article/b/c/200412/20041200313887.shtml . 
55 MOFCOM and GACC Announcement on Matters Concerning Adjustments to the Catalogue of Used 
Machinery Items Prohibited from Import No.  106, 2018. Viewed at: 
http://www.mofcom.gov .cn/article/b/c/201812/20181202821859.shtml . The Catalogue of Goods Prohibited 
from Import (2nd Batch) issued by MOFCOM, the GACC, and the General Administration of Quality Supervision, 
Inspection and Quarantine of 27 December 2001 was concurrently repeale d. "Gamespot" refers to video games 
on a TV receiver, video games or other game consoles operated by coins, and other video games.  WT/TPR/S/ 415 • China  
 
- 60 - 
 
  Product  Tariff line code(s) affected, based on 
HS17  WTO 
justification 
and grounds 
for restriction  National legal basis and 
entry into force  
Ractopamine  29225020  Article  XX of 
GATT  1994 MOFCOM and GACC Joint 
Announcement No.  110, 
2009  
Certain type of 
filament lamp  ex8539  Article  XX of 
GATT  1994 NDRC, MOFCOM, GACC, 
State Administration for 
Industry and Commerce 
(SAIC), and AQSIQ Joint 
Announcement No.  28, 
2011 
Charcoal imported 
from Somalia  4402 Article  XXI of 
GATT  1994, 
United Nations 
S/RES/2036 
(2012)  MOFCOM Announcement 
No. 27, 2012 
Source:  WTO document G/MA/QR/N/CHN/5/Rev.1, 15  February  2019; and information provided by the 
authorities.  
3.46.   Since 1  January  2021, imports of all solid waste products have been prohibited, and the 
previous regime for allowing imports of certain wastes under licensing co nditions has been 
terminated.56 These wastes were contained in the Catalogue of Restrictive Solid Waste (that can be 
used as raw materials) and the Catalogue of Non -restrictive Solid Waste. During  the review period, 
questions and concerns about China's cha nges to measures restricting and prohibiting imports of 
solid waste were raised in the WTO Committee on Import Licensing by the European  Union, the 
United  States, Canada, the Republic of Korea, Australia, and Japan. Concerns related to, inter alia, 
the imp act of these measures on global recycling processing capacity, and the apparent 
non-application of the same bans and restrictive contaminant standards to domestically sourced 
solid wastes. China was urged to ensure transparency by notifying measures, both introduced and 
planned, and to consider less trade -restrictive measures. In response, China has drawn attention 
to, inter alia, pollution in China and the imperative of limiting the negative effects of solid waste.57 
Certain recycling materials for brass, iron -steel materials, copper, and cast aluminium alloys may 
be imported if they meet the required standards.58 
3.1.5.2   Import licensing requirements  
3.47.   China's import licensing system includes automatic and non -automatic import  licences. In 
addition, licences are used to allocate TRQs (Section 4.1 .2). Furthermore, China applies import 
licences to specific dual -use substances for the purposes of safeguarding national security and public 
interest and under relevant international a greements.59 Most import licensing requirements are in 
HS Sections 17 (transport equipment) and 3 (animal/vegetable fats and oils) (Chart 3.3).  
 
56 Ministry of Ecology and Environment, MOFCOM, NDRC, and GACC Announcement on Relevant Issues 
Regarding Complete Prohibition on Imported Solid Waste (Announcement No.  53, 2020). Viewed at: 
https://www.mee.gov.cn/xxgk2018/xxgk/xxgk01/202011/t20201125_809835.html . 
57 WTO documents G/LIC/M/50, 1 5 January 2020; G/LIC/M/49, 21 August 2019; G/LIC/M/48, 14 March 
2019; and G/LIC/M/47, 25 September 2018.  
58 MEE, Announcement on Issues Related to Standardizing the Management on the Imports of Recycling 
Materials for Brass, Recycling Materials for Copper and Recycling Materials for Cast Aluminium Alloys . Viewed 
at: https:// www.mee.gov.cn/xxgk2018/xxgk/xxgk01/202010/t20201 019_803869.html . The texts of the 
relevant national standards ma y be viewed at: http://openstd.samr.gov.cn . 
59 WTO document G/LIC/N/3/CHN/18, 30 January 2020; and GACC Announcement No.  68, 2019, on the 
Issuance of the Catalogue of Du al-Use Items and Technologies Subject to Import and Export Licensing. Viewed 
at: http://cys.mofcom.gov.cn/article/zcgz/201912/20191202927099.shtml . WT/TPR/S/ 415 • China  
 
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  Chart 3.3 Import licensing by HS section, 2020  
 
Note:   Calculati ons are based on the 2020 tariff schedule at 8 -digit level.  
Source:   WTO Secretariat calculations, based on data provided by the authorities.  
3.1.5.2.1   Automatic import licensing requirements  
3.48.   A Catalogue of Goods Subject to Automatic Import Licensing is issued annua lly.60 All 
commodities listed in the Catalogue can be imported freely; automatic import licences are 
maintained only for monitoring purposes. In 2020, 24 categories of goods were subject to automatic 
import licensing requirements implemented by MOFCOM (com prising 356 tariff lines at the 
HS 10-digit level)61, and a further 18 categories of goods (comprising 206 tariff lines at the 
HS 10-digit level)62 were subject to automatic import licensing requirements, implemented by 
provincial -level local competent com mercial departments or local and departmental 
electromechanical offices, entrusted by MOFCOM . Changes to the Catalogue during the review period 
involved the removal of licensing requirements for 15 product types totalling 118 HS codes, including 
steam turb ines and automobile products63, and the cancellation of automatic licensing measures for 
bauxite and aluminium oxide (two HS codes) in January 2020.  
3.49.   There have been no major changes in the application procedures and terms of automatic 
import licences since  the previous Review.64 The validity of an automatic import licence is 
six months ; it can be extended in certain cases. Applications can be filed with MOFCOM or its 
entrusted institutions. Licence applications shall be immediately approved by the issuing a uthority 
(or within a maximum of 10 working days under special circumstances). Automatic import licences 
 
60 Catalogue of Goods Subje ct to Automatic Import Licensing (2020), MOFCOM and GACC Joint 
Announcement No.  63, 2019. Viewed at: 
http://images.mofcom.gov.cn/wms/202001/20200108224418706.pdf . 
61 These categori es are beef; pork; lamb; fresh milk; milk powder; cassava; barley; sorghum; 
soybeans; rapeseed; sugar (out -of-quota); corn distillers grains; soybean meal; tobacco; crude; refined oil; 
fertilizer; diacetic acid; fibre tow; tobacco machinery; mobile communi cation products; satellite, radio, and TV 
equipment; car products; aircraft; and ships.  
62 These categories are broiler products, vegetable oil, iron ore, copper concentrate, coal, refined oil, 
fertilizer, steel, construction machinery, printing machines, textile machinery, metal smelting and processing 
equipment, metal processing machine tools , electrical equipment, car products, aircraft, ships, and medical 
equipment.  
63 Products for which licensing requirements were removed included some mobile communication 
products, some ships, game consoles, steam turbines, non -vehicle engines and key parts , hydraulic turbines 
and other power plants, chemical plants, food machinery, paper machinery, some textile machinery, some 
metal smelting and processing equipment, electrical equipment, railway locomotives, some automotive 
products, and some medical equip ment.  
64 For details regarding the procedure to obtain automatic import licences, see China's last notification 
under Article  7.3 of the Agreement on Import Licensing Procedures (WTO document G/LIC/N/3/CHN/18, 
30 January 2020).  
0510152025303540
01 02 03 04 05 06 10 11 15 16 17 18Chart 3.[M licensing]  Import licensing by HS section, 2020
% of HS section
Note:   Calculations are based on the 2020 tariff schedule at 8 -digit level.  
Source:  WTO calculations, based on data provided by the authorities.Automatic import licensing
Non-automatic import licensingHS section
01  Live animals and products
02  Vegetable products
03  Animal/vegetable fats and oils
04Prepared food products
05  Mineral products
06  Chemicals and products thereof
10  Pulp, paper and paperboard
11  Textiles and clothing
15  Base metals
16  Machinery and electrical equipment
17  Transport equipment
18  Precision materialWT/TPR/S/ 415 • China  
 
- 62 - 
 
  are not transferable. Enterprises are allowed, and encouraged, to apply for and receive import 
licences online.65 
3.1.5.2.2   Non-automatic import licensing requirements  
3.50.   Products subjected to non -automatic licences are listed in the Catalogue of Import Goods 
Subject to Licensing.  
3.51.   In 2020, the Catalogue of Import Goods Subject to Licensing listed 118 tariff lines at the 
HS 10-digit level that were sub ject to non -automatic import licensing (compared with 139 tariff lines 
at the HS 10 -digit level in 2017).66 During the review period, some used mechanical and electrical 
products, such as engineering machinery, electric power and electrical equipment, and textile 
machinery, were deleted from the Catalogue. As noted in previous Reviews, imports subject to 
non-automatic licences mainly include used mechanical and electronic equipment, and substances 
that deplete the ozone layer. The purpose of non -automatic i mport licensing for ozone -depleting 
substances is to fulfil China's obligations under the Montreal Protocol on Substances that Deplete 
the Ozone Layer, and the licensing requirements with respect to used machinery are to serve social 
interests and to prote ct the environment and consumer health and security.67 The procedures to 
obtain a non -automatic import licence have remained unchanged since the previous Review . 
3.1.6   Anti-dumping, countervailing, and safeguard measures  
3.1.6.1   Anti-dumping measures  
3.52.   As noted in previous Reviews, MOFCOM is the agency responsible for initiating and conducting 
anti-dumping investigations and determining the existence of dumping and of injury, and their causal 
link. MOFCOM's Trade Remedy and Investigation Bureau (TRB) is responsible for anti -dumping, 
countervailing duty, and safeguards investigations and determinations (with the exception of 
anti-dumping investigations involving agricultural products, where the injury investigation is 
conducted jointly by MOFCOM and the Mi nistry of Agriculture).  
3.53.   The legal framework for the conduct of anti -dumping investigations and the application of 
anti-dumping measures remains the Foreign Trade Law68, the Regulations on Anti -Dumping69, and 
a number of published Rules, some of them provis ional.70 During the review period, three of these 
Rules were amended (see below); there have been no other changes to the anti -dumping procedures 
that are covered in detail in China's previous Reviews.71 The authorities indicate that China is 
preparing not ification to the WTO regarding these amended rules. In 2018, China notified to the 
WTO its Interim Rules on Implementation of the World Trade Organization Ruling in Disputes 
Concerning Trade Remedy Measures, which entered into force on 29  July 2013.72 
3.54.   On 4 April 2018, MOFCOM promulgated the Rules on Interim Review of Dumping and Dumping 
Margins (Interim Review Rules), which replace the Interim Rules for the Mid -Term Review of 
Dumping and Dumping Margins that have been in place since 2002. They introduced va rious 
changes. First, they refined and clarified provisions relating to the rights and obligations of the 
investigating agency and interested parties, including in relation to: (i)  clarifying the timing for filing 
a periodical review application to provide  an opportunity for a periodical review application under 
special circumstances; (ii)  clarifying that exporters and manufacturers must submit evidence that 
proves the necessity of a review; (iii)  clarifying the period for domestic industry to request evide nce 
 
65 MOFCOM and GACC Announcement No.  82, 2018, on Paperless Application and Receiving of Import 
Licences and Paperless Customs Clearance for Goods. Viewed at: 
http:/www.mofcom.gov.cn/article/b/e/201810/20181002794907.shtml . 
66 Catalogue of Import Goods Subject to Licensing (20 20), MOFCOM and GACC Announcement No.  65, 
2019. Viewed at: http://www.mofcom.gov.cn/article/b/e/201912/20191202927133.shtml . 
67 WTO document G/LIC/N/3/CHN/18, 30 January 2020.  
68 WTO document G/ADP/N/1/CHN/2/Suppl.4, 1 December 2004.  
69 WTO document G/ADP/N/1/CHN/2/Suppl.3, 20 October 2004.  
70 WTO documents G/ADP/N/1/CHN/2/Suppl.1, 18  February 2003; G/ADP/N/1/CHN/2/Suppl.2, 14  April 
2003; G/ADP/N/1/CHN/2/Suppl.4, 1  December 2004; G /ADP/N/1/CHN/2/Suppl.5, 11  January 2007; and 
G/ADP/N/1/CHN/2/Suppl.6, 19  October 2007.  
71 WTO document WT/TPR/S/375/Rev.1, 14  September  2018; and WT/TPR/S/342/Rev.1, 12 October 
2016.  
72 WTO document G/ADP/N/1/CHN/2/Suppl.7, 3 October 2018.  WT/TPR/S/ 415 • China  
 
- 63 - 
 
  materials to be submitted during the review; (iv)  clarifying that the exporter/producer can submit 
an application for an interim review; and (v)  cancelling the provision that the periodical review is 
not completed as an automatic end -of-term review. Se cond, they adopted clearer and stricter 
periodical review procedures and time requirements to ensure investigation efficiency. Third, they 
incorporated provisions to be consistent with WTO rules (e.g. improving the description of the 
sampling survey and th e disclosure before final ruling).73 
3.55.   The Rules on Questionnaires in Anti -Dumping Investigations, which came into force on 
4 May 2018, are the basis for conducting questionnaire investigations in anti -dumping investigations 
and replaced rules in place since  2002. Changes introduced related to: (i)  extending the application 
of questionnaire surveys beyond determining dumping and dumping margins to include determining 
damage issues; (ii)  clarifying the rights and obligations of the investigating agency and int erested 
parties74; (iii) deleting the content that should be stated in the specific questionnaire descriptions 
and requirements; (iv)  setting questionnaire survey procedures and time requirements; and 
(v) incorporating WTO -consistent provisions into the ru les relating to handling of information that 
requires confidentiality, providing interested parties with an opportunity to comment, and setting 
out the conditions for applying facts available.75 
3.56.   The 2018 Rules for Hearing of Anti -dumping and Anti -Subsidy I nvestigations also came into 
force on 4  May 2018.76 The Rules replaced three rules governing such hearings in place since 2002.77 
Changes introduced related to: (i)  the creation of a unified hearing procedures (there is no longer a 
distinction between diff erent types of investigations (anti -dumping, countervailing, and damage)); 
(ii) the refining of procedural provisions and clarification of rights and obligations of the investigating 
agency and interested parties (including with respect to the investigatin g agency's consideration for 
the need for confidentiality, its notification of the holding of hearings through an online 
announcement, its explanation of reasons for not holding a hearing, and the provision of 
opportunities for interested parties to expres s their opinions); (iii)  introduction of clearer and stricter 
hearing procedures and time requirements; and (iv)  introduction of WTO -consistent provisions 
relating to interested parties' rights to express their opinions/reasons to the investigating agency 
through other means if they are not physically present at the hearing.78 
3.57.   China initiated 34 anti -dumping investigations from January 2018 to end -December 2020 
(Table 3.7). These investigations related to the following products/trading partners: polyphenyle ne 
ether (United  States, August 2020); wines in containers holding 2 litres or less (Australia, 
August  2020); certain monoalkyl ethers of ethylene glycol and propylene glycol (United  States, 
August 2020); polyvinyl chloride (PVC) (United  States, August 202 0); ethylene -propylene -
non-conjugated diene rubber or ethylene propylene diene monomer (European  Union, Republic of 
Korea, and United  States, June 2019); polyphenylene sulphide (Japan, Republic of Korea, Malaysia, 
and United  States, May 2019); methionine ( Japan, Malaysia, and Singapore, April 2019); m -Cresol 
(European  Union, Japan, and United  States, July 2019); n -Propanol (United  States, July 2019); 
ortho -dichlorobenzene (India and Japan, January 2018); phenol (European  Union, Japan, 
Republic  of Korea, Tha iland, and United  States, March 2018); barley (Australia, November  2018); 
stainless steel billet and hot -rolled stainless steel plate (coil) (European  Union, Indonesia, Japan, 
and Republic of Korea, July 2018); 7-phenylacetamido -3-chloromethyl -3-cephem -4-carboxylic acid 
p-methoxybenzyl ester (India, November 2018); vertical machining centres (Japan and 
Chinese  Taipei, October 2018); and grain sorghum (United  States, February 2018).  
 
73 MOFCOM. Viewed a t: http://english.mofcom.gov.cn/article/policyrelease/announcement/201804/ 
20180402734712.shtml . The Interim Review Rules stipulate  the meaning of the periodical review, the 
conditions and procedures for filing a case, the procedures and standards for deciding to file a case, the scope 
of investigation for the review period, calculation of dumping margin and price commitments in revie w, time -
limit, and announcement of review and effectiveness of measures.  
74 Investigating agencies under the amended rules are required to notify and explain to interested 
parties the reasons for not accepting submitted information and give them the opportu nity to explain further. 
The number of response sheets submitted by interested parties was reduced to lift the burden on enterprises. 
Interested parties are now allowed to submit their own answer sheets.  
75 MOFCOM. Viewed at: http://gpj.mofcom.gov.cn/article/bi/bj/gzjd/201804/20180402729842.shtml . 
76 These rules stipulate hearing procedures, including the holding method, application time -limit and 
method, decision and noti fication, registration and participation, and submission of written materials . 
77 The three rules were the Interim Rules for Anti -dumping Investigation Hearings, Interim Rules for 
Countervailing Investigation Hearings, and Industrial Damage Hearing Rules.  
78 MOFCOM. Viewed at: http://gpj.mofcom.gov.cn/article/bi/bj/gzjd/201804/20180402729839.shtml . WT/TPR/S/ 415 • China  
 
- 64 - 
 
  Table 3.7 Anti-dumping investigations and measures, January 2018 -December 2020  
 2018  2019  2020  
Investigation initiations  16 14  4 
Provisional measures  22 9 5 
Definitive measures 23 13 2 
Expired/terminated measures  4 11 6 
Source:  WTO documents G/ADP/N/350/CHN, 9  March  2021; G/ADP/N/342/CHN, 16  October  2020; 
G/ADP/N/335/CHN, 21  April 2020; G/ADP/N/328/CHN, 23  October  2019; G/ADP/N/322/CHN, 
12 April 2019; and G/ADP/N/314/CHN, 22  October 2018.  
3.58.   China's anti -dumping measures on the following products  were terminated during the review 
period: methyl methacrylate (MMA) (Singapore, Thailand, and Japan, December 2020); adipic acid 
(United  States, European  Union, and Republic of Korea, October 2020); pyridine (India and Japan, 
November 2019); methyl ethyl ketone (Japan and Chinese  Taipei, November 2019); polyvinyl 
chloride (Japan, Republic of Korea, Chinese  Taipei, and United  States, October 2019); cellulose pulp 
(Brazil, Canada, and United  States, April 2019); solar -grade polysilicon (European  Union, 
Novem ber 2018); toluene diisocyanate (European  Union, March 2018); sulfamethoxazole (India, 
June 2018); and broiler products (United  States, February 2018).79 
3.59.   As at end -December 2020, China was enforcing 11 3 anti-dumping definitive measures. 
Imports from 16 countries or territories (counting the European  Union as one when measures are 
applied to all EU member States) were affected. Among all affected trading partners, imports from 
the United  States were subject to the largest number of anti -dumping measures, followed by Japan, 
the European  Union, and the Republic of Korea, reflecting the same trend as in previous years 
(Table  3.8). 
Table 3.8 Anti-dumping measures in force, by trading partner/region, January 2018 -
December 2020  
Trading partner/region  2018  2019  2020  
United  States  23 22 24 
Japan  20 20 21 
European  Union  15 17 17 
Korea, Republic of  13 15 16 
Chinese  Taipei  10 8 7 
India 6 6 6 
Singapore  4 4 4 
Thailand  5 6 6 
Turkey  1 1 1 
Australia  0 0 1 
Brazil  2 2 2 
Canada  1 0 0 
France  1 1 0 
Indonesia  0 1 1 
Italy 1 1 0 
Malaysia  3 3 4 
Russian  Federation  1 1 1 
Saudi Arabia, Kingdom of  1 1 1 
South  Africa  1 1 1 
Total  108 110 113 
Note:  Figures for 2018 -20 reflect anti -dumping measures in force on 31 December of each year. 
Undertakings and duties are considered as separate measures.  
Source:  WTO documents G/ADP/N/350/CHN, 9  March  2021;  G/ADP/N/335/CHN, 21  April 2020; and 
G/ADP/N/322/CHN, 12  April 2019.  
3.60.   China's longest -standing anti -dumping measures i n force relate to chloroprene rubber from 
the European  Union, Japan, the Republic of Korea, and the United  States; dispersion unshifted 
single -model optical fibre from Japan and the Republic of Korea; potato starch from the 
European  Union; nonyl phenol fro m India and Chinese  Taipei; paper for electrolytic capacitors from 
Japan; and bisphenol -A from Japan, the Republic of Korea, Singapore, and Chinese  Taipei.  
 
79 WTO documents G/ADP/N/335/CHN, 21 April 2019; G/ADP/N/328/CHN, 23  October  2019; 
G/ADP/N/322/CHN, 12  April 2019; and G/ADP/N/314/CHN, 23 October 2018.  WT/TPR/S/ 415 • China  
 
- 65 - 
 
  3.61.   Chemical products continue to account for most measures in force at end -December  2020, 
followed by p roducts made of resin, plastic, and rubber (Chart  3.4). 
Chart 3.4 Anti-dumping measures in force, by product, 31  December 2020  
 
Note:  Other includes live animals and products (two measures); vegetable product s (two measures); 
prepared foodstuff (one measure); and glassware (two measures).  
Source:  WTO notifications.  
3.1.6.2   Countervailing measures  
3.62.   The legal framework governing countervailing measures remains the Foreign Trade Law (last 
amended in 2016), the Regulations on Countervailing Measures (last amended in 2004), and a 
number of published rules. There have been no changes to existing rules, no r have new ones been 
introduced, since January 2018. In 2018, China notified to the WTO its Interim Rules on 
Implementation of the World Trade Organization Ruling in Disputes Concerning Trade Remedy 
Measures, which entered into force on 29  July 2013.80 
3.63.   There have been no changes to the procedures for countervailing investigations. These 
procedures are similar to those applied for anti -dumping investigations; the main differences are 
described in China's Trade Policy Review Report  for its previous Review.81 
3.64.   The number of China's countervailing investigations initiated and measures in force have 
remained relatively constant over the past five years (Table 3.9). Eight countervailing investigations 
were initiated during the review period  (since 2018) , one of whi ch then terminated due to public 
interest considerations and one of which was terminated due to withdrawal by the applicant 
(Table  3.10). In January 2019, China undertook a sunset review of countervailing measures on 
solar-grade polysilicon from the United  States, resulting in continuation of the definitive duties 
imposed in January 2020. In April 2019, China undertook a rebus sic stantibus  review of 
countervailing measures on distiller dried grains with solubles from the United  States, resulting in 
maintaining the original measures.  
3.65.   Details of China's RTA provisions on CV measures are contained in the Trade Policy Review 
Report for its prev ious Review.82 
 
80 WTO document WT/SCM/N/1/CHN/1/Suppl.5, 3 October 2018.  
81 WTO document WT/TPR/S/375/Rev.1, 14  September  2018.  
82 WTO document WT/TPR/S/375/Rev.1, 14  September  2018.  
Chart 3.4   Anti -dumping measures in force, by product groups, as of 31 December 2020
Total:  113
Source: WTO notifications.Chemical products
57Paper; paperboard & articles
4Textiles & textile articles
3 Resins, plastic & rubber
24
Note: Other includes live animals and products (2 measure); vegetable products (2 measures);
prepared foodstuff (1 measure); and glassware (2 measures) .Base metals & articles thereof
13
Precision instruments
5
Other
7WT/TPR/S/ 415 • China  
 
- 66 - 
 
  Table 3.9 Countervailing investigations and measures, 2016 -20 
 2016  2017  2018  2019  2020  
Investigation initiations  1 1 3 1 4 
Provisional measures  1 0 1 0 2 
Definitive measures  0 1 1 0 2 
Expired/terminated measures  0 0 2 0 0 
Measures in force (end -period)  4 5 4 4 6 
Source:  WTO documents G/SCM/N/371/CHN, 26  February  2021; G/SCM/N/363/CHN, 16  October  2020; 
G/SCM/N/356/CHN, 13  March  2020; G/SCM/N/349/CHN, 23 October; G/SCM/N/342/CHN, 
9 April 2019; G/SCM/N/334/CHN, 22  October  2018; G/SCM/N/328/CHN, 6  April 2018; 
G/SCM/N/313/CHN, 1  March  2017; and WT/TPR/S/375/Rev.1, 14  September  2018.  
Table 3.10 Countervailing investigations initiated durin g the review period, as at 
31 December  2020  
Partners  Product  Initiation  Provisional 
measures  Final 
measures  Import volume  
Australia  Barley  21/12/2018  - 19/05/2020  
6.9%  
All others 
6.9%  61.57% of apparent 
domestic consumption  
 Wines in containers 
holding 2 litres or less  31/08/2020  11/12/2020  
6.3% -6.4%  
All others 
6.4%  - 13.36% of apparent 
domestic consumption  
India 7-phenylacetamido - 
3-chloromethyl - 
3-cephem - 
4-carboxylic -acid 
p-methoxybenzyl ester  26/11/2018  - None 
(application 
withdrawn on 
25/05 /2020)  100% of total imports  
United  States  polyvinyl chloride 
(PVA)  14/10/2020  - - 1.54% of apparent 
domestic consumption  
 Certain monoalkyl 
ethers of ethylene 
glycol and propylene 
glycol  14/09/2020  - - 18.29% of apparent 
domestic consumption  
 Polyphenylene ether  14/08/2020  - - 15.18% of apparent 
domestic consumption  
 n-Propanol (NPA)  29/07/2019  09/09/2020  
34.2% -
37.7%  
All others 
37% 18/11/2020  
34.2% -37.7%  
All others 37%  67.43% of total 
imports  
 Grain sorghum  04/02/2018  - None 
(Terminated – 
Public 
Interest) 
18/05/2018  - 
- None.  
Source:  WTO documents G/SCM/371/CHN, 26  February  2021; G/SCM/N/363/CHN, 16  October  2020; 
G/SCM/N/356/CHN, 13  March  2020; G/SCM/N/349/CHN, 23  October  2019; G/SCM /N/342/CHN, 
9 April 2019; and G/SCM/N/334/CHN, 22  October  2018.  
3.1.6.3   Safeguard measures  
3.66.   During the review period, China did not initiate any new safeguard investigations. As indicated 
in the previous Review, China imposed a safeguard measure on sugar on 22  May 2017.83 China 
notified to the WTO that the measure would remain in force for three years (i.e. until May 2020). 
China did not notify an extension of the safeguard measure. On 16  October  2018, Brazil requested 
 
83 The investig ation was initiated in September 2016 and definitive safeguard measures in the form of 
an additional ad valorem  duty of 45% were imposed on 22  May 2017. The duty applied to imports outside the 
existing quota and were to be reduced to 35% within three years (WTO document WT/TPR/S/375/Rev.1, 
14 September  2018; see also WTO documents G/SG/N/8/CHN/2/Suppl.1, G/SG/N/10/ CHN/2, and 
G/SG/N/11/CHN/2, 23  May 2017). China subsequently notified the WTO that exemptions from this measure 
applicable to certain developing countries had been revoked, and that the safeguard measure would apply to 
imports of sugar from all developing countries (regions) from 1 August 2018 (WTO documents 
G/SG/N/8/CHN/2/Suppl.2, G/SG/N/10/CHN/2/Suppl.1, and G/SG/N/11/CHN/2/Suppl.1, 18 July 2018).  WT/TPR/S/ 415 • China  
 
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  consultations with China pursuant to the Unders tanding on Rules and Procedures Governing the 
Settlement of Disputes (DSU) on certain Chinese measures concerning imports of sugar.84 This 
request covers: (i)  China's 22  May 2017 safeguard measure on imported sugar; (ii)  China's 
administration of its TRQ f or sugar; and (iii)  China's so -called "automatic import licensing" system 
for out -of-quota sugar. The European  Union, Thailand, and Guatemala requested to join the 
consultations.85 A panel has not been established as of the writing of this report.  
3.67.   In 2018, China notified to the WTO its Interim Rules on Implementation of the World Trade 
Organization Ruling in Disputes Concerning Trade Remedy Measures, which entered into force on 
29 July 2013.86 Other than this new information, the laws and regulation s governing safeguard 
measures in China did not change during the review period. The Foreign Trade Law (last amended 
in 2016), the Regulations on Safeguards (last amended in 2004), and other published rules provide 
the regulations on safeguard investigatio ns and the application of measures.  
3.68.   As noted in previous Reviews, MOFCOM, specifically the TRB , is in charge of investigating and 
determining if there has been an increase in imports and if injury has been caused. If an investigation 
involves agricultural goods, the investigation and determination must be done jointly with the 
Ministry of Agricultu re. Investigation procedures have not changed since, and are detailed in, China's 
Trade Policy Review Report  for its previous Review, as are details on safeguard provisions in the 
RTAs to which China is signatory.87 
3.2  Measures Directly Affecting Exports  
3.2.1   Customs procedures and requirements  
3.69.   The general framework of export procedures, including registration and documentation, 
remained largely unchanged during the review period. Registration formalities for exports of goods 
for commercial purposes are similar to those for imports and governed by the same regulations 
(Section 3.1.1).  
3.70.   An exporter must register as a foreign trade operator with MOFCOM or its authorized bodies, 
before filing customs declarations. Export declarations must be made on paper or in electron ic 
format . As at the time of the previous Review, declarations can be made either by the consignor, or 
by a customs declaration enterprise entrusted by the consignor. On 1  January  2020, the authorities 
established a paperless application system for export licences and customs clearance operations for 
goods subject to exports control.88 Exporters of the specified goods may choose to adopt paper or 
paperless operations. On 9  September  2019, the same system was established for export licence 
application of use d cars.89 
3.71.   As stipulated by the Law on Inspection of Import and Export Commodities, exporters must 
comply with the requirements of the Catalogue of Import and Export Commodities Subject to 
Compulsory Inspection, which is regularly amended to add or subtract  commodities. The inspection 
of import and export commodities aims to protect the health and safety of human beings, protect 
the life and health of animals or plants, protect the environment, prevent fraud, and safeguard 
national security. The import and e xport commodities that are included in the Catalogue shall be 
inspected by Customs. For cabins and containers used for the exports of perishable food, the carrier 
or the packing unit must apply for inspection before loading.90 
3.72.   Some items, such as dangerous  chemicals, fireworks, lighters, food products, and rare earths, 
are subject to export inspection. These goods must be inspected where they are produced. The 
packaging of the exports of dangerous chemicals or goods must also undergo inspection and tests.  
 
84 WTO document WT/DS568/1, 22  October 2018.  
85 WTO documents WT/DS568/2, 2  November 2018; and WT/DS568/3 -4, 5 November 2018.  
86 WTO document G/SG/N/1/CHN/2/Suppl.5, 3 October 2018.  
87 WTO document WT/TPR/S/375/Rev.1, 14  September  2018.  
88 MOFCOM, MOFCOM and GACC Notice No.  64, 2019. Viewed at: 
http://www.mofcom.gov.cn/article/b/e/201912/20191202927111.shtml . 
89 Shang Ban Mao Han No.  297, 2019.  
90 FAO, Law of the People's Republic of China on Import and Export Commodity Inspection . Viewed at : 
http://www.fao.org/faolex/results/details/en/c/LEX -FAOC152646/ . WT/TPR/S/ 415 • China  
 
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  3.73.   Under China's risk management system, enterprises are classified into different groups based 
on risk analysis. As with import procedures, customs inspection and supervision depend upon the 
enterprise's rating (Section 3.1.1). Goods exported by high -risk ent erprises and other high -risk 
goods (based on risk analysis) are inspected, while other exports are released through fast -track 
clearance or a "low -risk examination".  
3.74.   Following the global outbreak of the COVID ‑19 pandemic, China launched a series of trade 
facilitation and compliance measures with a view to, inter alia , containing COVID ‑19, maintaining 
trade flows of medical supplies, and minimizing the disruption caused by COVID ‑19. An emergency 
plan was adopted to further streamline customs procedures, incl uding inspections and quarantine, 
and reduce port charges.91 In February 2020, the GACC rolled out 10 measures to support new 
importers and exporters to overcome challenges relating to the pandemic, including the 
simplification of business registration and  clearance formalities, optimization of pre -export control 
and certification services, and the supply of up -to-date market information.92 
3.75.   The authorities also implemented more stringent control measures on enterprises involved in 
the export of COVID ‑19-related test kits and other medical devices. On 31  March  2020, MOFCOM, 
the GACC, and the National Medical Products Administration issued Announcement No.  5, 2020, on 
Ensuring the Orderly Export of Medical Supplies93; subsequently, on 25  April 2020, MOFCOM, th e 
GACC, and the State Administration for Market Regulation (SAMR) issued Announcement No.  12, 
2020, on Reinforcing Quality Regulation on Exported Supplies for COVID ‑19 Response.94 The 
Announcements introduced a new quality verification procedure for the ex port of medical products, 
including a requirement to provide a valid medical device product registration certificate in China. 
In addition, exporters must provide proof that the products meet the quality standards of the 
importing country.95 
3.2.2   Taxes, charges , and levies  
3.76.   China applies export duties in accordance with the Regulations on Import and Export Tariffs. 
They are applied with a view to protecting the domestic environment and supporting the effective 
utilization and sustainable development of energy and  scarce resources. Interim tariff rates may be 
applied to export goods within a certain period. The State Council shall establish the Customs Tariff 
Commission to decide on the goods subject to interim tariff, the tariff rates, and the time -limit. The 
authorities state that interim export tariff rates are adjusted as appropriate based on national 
economic development considerations.  
3.77.   Export duties are calculated based on the transaction value of exports, plus transport -related 
fees, and insurance cost. In 20 20, all export duties were ad valorem . Certain items are subject to 
the interim export tariff levied at a rate of zero.  
3.78.   As at January 2021, 102 tariff lines (at the 8 -digit level) were subject to statutory export 
duties, unchanged since 2015, while 75 tariff lines carried interim duties, down from 180 in 2017 
(Table 3.11). The highest tax rate (50%) applies to tin ores and concentrates (HS  2609).  
 
91 UNCTAD, Case Study: China's Trade Facilitation Responses to the COVID ‑19 Pandemic , 22 May 2020. 
Viewed at : https://unctad.org/en/pages/newsdetails.aspx?OriginalVersionID=2328 . 
92 GACC, GACC Launches Facilitative Measures as Foreign -Trade Businesses Begin to Resume 
Operations , 19 Februa ry 2020 . Viewed at: http://english.customs.gov.cn/Statics/8f0f8824 -eef2-492b-ace6-
77d84bf12f1f.html . 
93 MOFCOM. Viewed at: http://www.mofcom.gov.cn/article/b/e/202003/20200302950371.shtml . 
94 MOFCOM. Viewed at: http://en glish.mofcom.gov.cn/article/policyrelease/announcement/ . 
95 National Medical Products Administration. Viewed at: https://www.nmpa.gov.cn/ . The updated lists of 
products covered by the Announcements are available on t he website of the China Chamber of Commerce for 
Import and Export of Medicines and Health Products ( www.cccmhpie.org.cn ). WT/TPR/S/ 415 • China  
 
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  Table 3.11 Export duties by type and HS chapter, 2020  
HS chapter  Statutory duties  Interim duties  
No. of lines  Range %  No. of lines  Range %  
Total 102 20-50 75 0-35 
03 Fish and crustaceans  1 20 0 n.a. 
05 Products of animal origin, n.e.s.  4 40 1 0 
26 Ores, slag and ash  7  20-50 2 0-20 
28 Inorganic chemicals  3  20-30 1 10 
29 Organic chemicals  1 40 1 0 
41 Raw hides and skins  2 20 0 n.a. 
72 Iron and steel  17 20-40 5 10-20 
74 Copper and articles thereof  32 30 32 0-15 
75 Nickel and articles thereof  4  40 4 5-15 
76 Aluminium and articles thereof  24 20-30 24 0-15 
79 Zinc and articles thereof  4 20 4 0-15 
81 Other base metals  3  20 1 5 
n.a. Not applicable.  
Note:  Tariff lines where export duties are only partially applied are included.  
Source:  Customs Tariff of Import and Export of the People's Republic of China, 2020.  
3.2.3   Export prohibitions, restrictions, and licensing  
3.79.   Export restrictions and prohibitions are aimed to, inter alia,  maintain national security, social 
public interests, or public morality; protect human health or safety, or the lives or health of animals 
and plants; protect the environment; protect exhaustib le natural resources that are in short domestic 
supply or may require effective protection; and take effect in case of serious disturbance of the order 
of export business operations.  
3.80.   Export restrictions, including prohibitions and licensing requirements ar e in place on a variety 
of items, as highlighted in China's WTO notification in 2019 on its quantitative restrictions.96 The list 
of items that are subject to prohibitions and restrictions is generally announced by MOFCOM, in 
collaboration with other relev ant departments. Export prohibitions apply to products such as certain 
forest litter and turf, ractopamine, certain hazardous chemicals, natural sand (except metallic sand), 
pesticides and persistent organic pollutants, charcoal, certain toxic substances, and wild animal 
products. The legal basis for export prohibitions are mainly provided by: (i)  former Ministry of 
Foreign Trade and Economic Cooperation (MOFTEC) Announcement No.  19, 2001; (ii)  MOFCOM, 
GACC, and SFA Joint Announcement No.  40, 2004; (iii)  MOFCOM, GACC and former State 
Environmental Protection Administration (SEPA) Joint Announcement No.  116, 2005; (iv)  MOFCOM, 
GACC Joint Announcement No.  87, 2006; (v)  MOFCOM, GACC Joint Announcement No.  96, 2008; 
and (vi)  MOFCOM and GACC  Joint Announcement No.  110, 2009.  
3.81.   China applies export licences to specific dual -use substances for the purposes of safeguarding 
national security and public interest and performing the obligations under relevant international 
agreements. The control is e xecuted by the State Administration of Science, Technology and 
Industry for National Defence and MOFCOM, in coordination with other relevant agencies.  
3.82.   Restricted exports may be subject to quotas and licences. China imposes global and 
destination -specific e xport quotas. The list of products subject to quotas (Table 3.12) and the quota 
volumes for the following year is published on 31  October of each year. MOFCOM announces the 
total export quota of goods before 31  October each year. The authorities state that  the latest total 
quota was provided through the Announcement on the Total Export Quotas for Goods (MOFCOM 
Announcement No.  49, 2020).  
3.83.   Regarding licensing requirements, MOFCOM issues on a yearly basis the Catalogue of Goods 
Subject to the Administration of  Export Licences.97 The Catalogue lists goods that are subject to 
export licensing (Table 3.12). The 2019 announcement, set to be implemented in 2020, lifted the 
licensing requirements for export of vitamin C and penicillin products. The Catalogue also lis ts goods 
 
96 WTO document G/MA/QR/N/CHN/5/Rev.1, 15  February  2019.  
97 MOFCOM Announcement No.  47, 2019;  and MOFCOM and GACC Announcement No.  66, 2019. Viewed 
at: http://www.mofcom.gov.cn/article/b/e/201912/20191202927141.shtml . WT/TPR/S/ 415 • China  
 
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  that are subject to export quota (Table 3.12). For exports subject to a quota, the exporter must 
obtain the quota prior to applying for a licence.  
Table 3.12 Products subject to export quotas and lice nsing, 2020  
Products  Type of 
management  Comment  
Products subject to quotas and licensing    
Wheat, maize, rice, cotton, and coal  Export quota 
(licence)  The export quota is 
allocated by the NDRC 
and the licence issued 
by MOFCOM.  
Wheat, maize, and rice flour; ephedra herbs for medicinal use 
(cultivated); sawn timber; live chicken (for export to Hong 
Kong, China); live swine and cattle (for export to Hong Kong, 
China and Macao, China); crude oil; and refined oil (excluding 
lubricating oil, grease, and lubricating base oil)  Export quota 
(licence)  The export quota is 
allocated by MOFCOM.  
Rush and rush products; liquorice and liquorice products  Export qu ota 
bidding 
(licence)  The export quota is 
allocated by MOFCOM.  
Products subject to licensing    
Live cattle and swine (for export to markets other than Hong 
Kong, China and Macao, China); live chicken (for export to 
markets other than Hong Kong, China); beef, pork, and 
chicken; natural sand (including standard sand); bauxite; 
phosphate rock; magnesia; talc block (powder); fluorite 
(fluorspar); rare earths; tin and tin products; tungsten and 
tungsten products; molybdenum and molybdenum products; 
antimony and antimony products; coke; refined oil (lubricating 
oil, grease, lubricating oil base oil); paraffin; semimetals and 
semimetal products; disodium sulphate; silicon carbide; citric 
acid; silver; platinum (exported under processing trade); 
indium an d indium products; motorcycles (including all -terrain 
vehicles) and motorcycle engines and frames; and automobiles 
(including complete sets of parts) and automobile chassis.  Export licence  Export traders apply 
for export licences 
with relevant export 
contracts. 
Substances that deplete the ozone layer  Export licence  Export of such product 
must be allowed 
before applying for an 
export licence.  
Source:  MOFCOM Announcement No.  47, 2019; and MOFCOM and GACC Announcement No.  66, 2019.  
3.84.   According to the authorities, the value of exports of goods subject to export licensing stood 
at USD  63.86 billion in 2020, up from USD  39.50 billion in 2017.  
3.85.   In addition, to "maintain foreign trade order", export declarations of certain products subject 
to export licensin g (liquorice, liquorice products, and natural sand), when exported to 
Chinese  Taipei; Hong Kong, China; and Macao, China, may be cleared only through designated ports. 
The export clearance ports of liquorice are Tianjin Customs, Shanghai Customs, and Dalia n Customs; 
the export clearance ports of liquorice products are Tianjin Customs and Shanghai Customs; the 
export clearance ports of natural sand (to Chinese  Taipei; Hong Kong, China; and Macao, China) are 
limited to the province (autonomous region, municip alities) customs. The authorities state that the 
measures of administration at designated ports for the export of liquorice and liquorice products, 
and natural sand shall be cancelled in 2021.  
3.86.   The Catalogue of Technologies Restricted or Forbidden for Expor t was published in 
August  2020 by MOFCOM and the Ministry of Science and Technology (MOST).98 The first version of 
the Catalogue was released in 1998 and was amended twice (in 2001 and in 2008). The amendments 
to the 2020  Catalogue were based on the draft proposed revisions released by MOFCOM and the 
corresponding public comments collected in 2018.  
3.87.   The Amendment added 23 new items to the list subject to export restrictions, including 
technologies related to drones, production of space materials, design and construction of large -scale 
high-speed wind tunnels, and aerospace bearings and lasers. It also provides description of new 
 
98 MOFCOM, 2020 Catalogue, Notification No.  38/2020 , 28 August 2020. Viewed at: 
http://www.mofcom.gov.cn/article/b/c/202008/20200802996641.shtml . WT/TPR/S/ 415 • China  
 
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  elements and technical specifications subject to export control. For example, it adds "personalised 
information recommendation servi ce technology based on data analysis" and "artificial intelligence 
interactive interfaces", one type of which uses voice recognition.  
3.88.   The Amendment removed four items that were subject to export prohibition in the 
2008 Catalogue, which involve technologies  related to microbial fertilizers, as well as the production 
of synthetic and semisynthetic caffeine and vitamin B2 production, and it removed five items that 
were subject to export restriction in the 2008 Catalogue, which involve technologies related to t he 
Newcastle disease vaccine (for chickens), production of natural medicines, preparation and 
processing of functional polymer materials with biological activity, production of certain synthetic 
and semisynthetic chemicals, and information security firewal l software.  
3.89.   Exports of a technology, either by means of transfer or licensing, would be prohibited if such 
technology is classified as a prohibited technology in the Catalogue. With regard to transfer of any 
technology subject to export restrictions in the  Catalogue, approval from a competent commerce 
authority at the provincial level is required before entering into any substantial transfer negotiation 
with foreign counterparties, and an export licence issued by the same authority would be also 
required wh en completing the technology transfer agreement.  
3.90.   On 17  October  2020, the Standing Committee of the NPC passed the Export Control Law, 
which entered into force on 1 December 2020. Under Article  2 of the Law, export control refers to 
"prohibitions or restric tions on transfer of controlled items from the territory of the People's Republic 
of China to overseas and the provision of controlled items by any citizen or incorporated or 
non-incorporated organization of the People's Republic of China to any foreign or ganization or 
individual".  
3.91.   The Law defines "controlled items" to include dual -use items (with both civilian and military 
applications), military products, and nuclear products. In addition, "controlled items" include "other 
goods, technologies, services th at are related to the maintenance of national security and interests 
and the implementation of international obligations such as non -proliferation". It also requires 
exporters to provide documentation establishing the intended end -use and end -user for the 
controlled items to be issued by the end -user or the Government at the end -user's location. 
End-users are required to commit not to change the end -use or transfer the item to any third party 
without authorization from the Chinese export control authorities . Exporters and importers are 
further obliged to report any potential change in the end -use or end -user. 
3.92.   While the previous export control framework still remains in place  on a number of fragmented 
lists of items, the new Export Control Law provides for th e establishment of a single framework for 
restricting exports of controlled items through published control lists. According to the authorities, 
China has formulated six administrative laws and regulations on export control, including the 
Administrative Ru les on Monitored Chemicals, the Regulations on the Control of Nuclear Exports, the 
Administrative Regulations on the Export of Military Products, the Regulations on the Export Control 
of Dual -use Nuclear Items and Related Technologies, the Regulations on t he Export Control of 
Missiles and Missile -related Items and Technologies, and the Regulations on the Export Control of 
Dual-use Biological Items and Related Equipment and Technologies. Specific export control lists were 
also released. In addition to the es tablished control lists, the new legislation authorizes export control 
authorities to list items for "temporary controls" for a provisional period of up to two years before 
determining whether to list the items on a control list. The authorities indicate t hat China is in the 
process of formulating supporting regulations and shall release further regulations at a later stage.  
3.93.   Besides the item -based control lists, the Law provides for the establishment of control lists of 
foreign business entities that fall under one of the following cases: (i)  violate end -user or end -use 
restrictions; (ii)  "possibly endanger national security and interests "; or (iii)  use controlled items for 
terrorist purposes. Chinese exporters will be barred from dealing with foreign business entities on 
the controlled list. However, they will be able to request exemptions under certain conditions, 
according to the Law.  
3.94.   Exporters must apply for an export licence from the relevant export control authority in order 
to export any item listed on a control list or subject to temporary controls. Article  13 of the Law 
provides that approval or disapproval of exports will be based o n eight criteria: national security and 
interests, international obligations and external commitments, the type of exports, the sensitivity of WT/TPR/S/ 415 • China  
 
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  controlled items, the countries or regions they are bound for, the end -users and end -uses, relevant 
credit record s of exporting companies, and "other factors stipulated by laws and administrative 
regulations ". For goods, technologies, and services other than those listed on the export control list 
and temporarily controlled items, an exporter must apply to the nation al export control authorities 
for an export licence, if the exporter knows or should know, or has been notified by the national 
export control authorities, that the relevant goods, technologies, and services may endanger national 
security and interests, or  may be used for the design, development, production, or use of weapons 
of mass destruction and their means of delivery, or may be used for terrorism.  
3.95.   Under the Law, China may take measures reciprocally, according to the actual circumstances, 
if any countr y or region "abuses" its export control measures in ways that endanger China's national 
security and interest.  
3.2.4   Export support and promotion  
3.96.   China's most recent notification to the WTO regarding export subsidies was submitted in 2020. 
China indicated that e xport subsidies were not granted to agricultural products in 2019.99 
3.97.   Exporters are entitled to VAT rebates.  
3.98.   After the issuance by the Ministry of Finance (MOF)  and the State Taxation Administration of 
the Announcement on Increasing the Export Tax Refund Ra te of Some Products in 2020100, the VAT 
rebate rate of all products, except for the high -pollution, high -energy consuming, and 
resource -based products, became equal to the applied rate. The MOF and the State Taxation 
Administration administer the VAT rebate  regime.  
3.99.   Since 2018, VAT rebate rates on exports have been successively adjusted through the 
following measures: Notice of the MOF and the State Taxation Administration on Adjusting the VAT 
Rates (Cai Shui No. 32, 2018); Notice on Increasing the Export Reb ate Rates for Mechanical and 
Electrical Products, Cultural Products and Other Products (Cai Shui No. 93, 2018); Notice on 
Adjusting the Export Tax Rebate Rates for Certain Products (Cai Shui No. 123, 2018); MOF, State 
Taxation Administration, and GACC Anno uncement on Policies for Deepening the VAT Reform 
(Announcement No.  39, 2019); and MOF and State Taxation Administration Announcement on 
Increasing the Export Tax Refund Rates for Certain Products (Announcement No.  15, 2020).  
3.100.   The latest adjustment to VAT r ebate rates (Announcement No.  15, 2020) increased VAT 
refund rates for 1,464 goods as from 20  March  2020.101 The announcement includes 380 agricultural 
and agricultural -related items and increases the rebate rate from 6% to 9%. The rate for the 
remaining 1, 084 tariff lines in the Announcement increased from 9% to 13%.  
3.101.   Following the most recent round of adjustments of VAT rebate on exports, four refund rates 
are in force: 13%, 9%, 6%, and 0%, with the proportion of tariff lines subject to each rebate rate 
being 61.2%, 18.9%, 0.1%, and 19.6%, respectively. Products not subject to VAT rebate include 
high-energy -consuming products, high -polluting products, and endangered species of fauna and 
flora. 
3.102.   Exports promotion may also take the form of import duty exemption s for certain products 
(Section 3.1 .3). Beyond their primary role as a test ground for policy reforms, PFTZs have attracted 
companies that export. Since 2013, China has established an increasing number of PFTZs across the 
country ; currently, there are 31 P FTZs. In the Shanghai PFTZ, for example, benefits available to 
companies include a reduced corporate income tax rate of 15% (standard 25%) for five years in 
industries such as integrated circuits, artificial intelligence, biomedicine, and civil aviation; r educed 
individual income tax for foreign staff in PFTZ companies; and streamlined customs handling for 
PFTZ imports and exports.  
3.103.   Companies located in the Shanghai PFTZ can produce either in bonded or non -bonded areas. 
The payment  of import tariffs  by compa nies located in bonded areas is suspended and only become s 
 
99 WTO document G/AG/N/CHN/53, 7 December 2020.  
100 Ministry of Finance and State T axation Administration Announcement No.  15, 2020.  
101 The Bulletin is available at: http://szs.mof.gov.cn/zhengcefabu/202003/t20200317_3484123.htm . WT/TPR/S/ 415 • China  
 
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  effective when final products are sold to the rest of China. The PFTZ also features a distinctive 
mechanism for dispute resolution, with arbitration governed by a separate set of Arbitration Rules 
issued by the Shanghai International Arbitration Centre.  
3.104.   According to the authorities, in 2020, the total foreign trade value amounted to 
CNY 4.7 trillion in the 18 PFTZs, and 393,000 new companies were established (including 
6,472  newly established foreig n-funded enterprises).  
3.105.   Export support programmes also include the organization, by MOFCOM's Trade Development 
Bureau (TDB), of exhibitions in emerging markets and export -oriented training activities. The TDB 
also maintains the websites of China Trade Promo tion and provides, through various service 
platforms, background information about foreign markets.  
3.106.   The Overseas Commercial Complaint Service Centre for Chinese Enterprises provides 
services to Chinese enterprises in the areas of complaint -handling, consul ting, talent base 
construction, and support for start -ups. 
3.107.   The authorities indicate that several export promotion and assistance activities abroad were 
implemented during the review period. As at June 2020, the China Council for the Promotion of 
Internatio nal Trade had established 387 trade cooperation mechanisms with 341  institutions in 
143 countries and regional organizations. Since 2019, trade forums were held with countries 
including Cambodia, Pakistan, and Nepal.  
3.2.5   Export finance, insurance, and guarante es 
3.108.   Export finance102, insurance, and guarantees are predominantly granted by a number of 
policy financial institutions with the mandate to promote foreign trade and cross -border investment. 
The bulk of export finance is provided by the China Export -Import B ank (China Eximbank), which 
provides export finance, and the state -owned China Export & Credit Insurance Corporation 
(SINOSURE), which provides export credit insurance and related guarantees. Foreign -owned 
companies are also eligible for the services of Ch ina Eximbank and SINOSURE.  China is not a 
member of the OECD; it does not participate in the OECD's Arrangement on Officially Supported 
Export Credits. The authorities indicate that China has always been actively involved in the 
consultation of the Interna tional Working Group on export credits, including its technical working 
group.  
3.109.   China Eximbank  is a state -owned policy bank with the status of an independent legal entity. 
It is dedicated to supporting China's foreign trade, investment, and international economic 
cooperation.103 It was created in 1994 to provide financing for the importation and exp ortation of 
capital goods and services and for Chinese companies that undertake overseas construction and 
investment projects. Its main mandate includes facilitation of export and import of equipment and 
new- and high -tech products , and assisting Chinese c ompanies with comparative advantages in their 
offshore projects. According to the authorities, the Government injects capital into China Eximbank 
as its shareholder; in the course of business, China Eximbank raises funds mainly by issuing bonds 
in both dom estic and international capital markets.  
3.110.   China Eximbank primarily offers overseas financing through a range of activities such as 
export credits (including export buyer's credit and export seller's credit), loans for overseas 
construction and investment, a nd concessional loans. Export buyer's credit consists of loans 
extended to overseas borrowers to finance their imports of Chinese goods, while export seller's credit 
consists of loans granted to domestic enterprises within the scope of their export activit ies. The Bank 
provides two preferential facilities: government concessional loans and preferential export buyer's 
credit. Concessional loans are offered to developing countries at rates lower than market interest 
rates and are usually tied to Chinese expor ts.104 The authorities note that all projects operate 
according to market principles, and banks do not attach any additional conditions to their loans. 
 
102 According to the authorities,  this relates only to official export credit.  
103 China Eximbank, About the Bank . Viewed at: 
http://english.eximbank.gov.cn/Profile/AboutTB/Introduction/ . 
104 OECD Development Centre,  Perspectives on Global Development 2010 Shifting Wealth, How China is 
Influencing Africa's Development , April  2010. Viewed at: 
https://www.oecd.org/development/pgd/45068325.pdf . WT/TPR/S/ 415 • China  
 
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  China Eximbank provides its services to various enterprises. In 2018, China Eximbank conducted 
USD 178.1 billion worth of international settlement (USD  118.3 billion), letters of guarantee 
(USD  9.4 billion), and trade finance transactions (USD  50.3 billion), a year -on-year increase of 
8.85%.105 
3.111.   China Eximbank  is the designated institution to implement the Chinese Government 
Concessional Loan and Preferential Export Buyer's Credit, two Concessional facilities provided to 
other developing countries. As at end -2018, China Eximbank's concessional business covered more 
than 90 countries in the ASEAN region, South Asia, Central Asia, West Asia, Africa, Latin America, 
and the South Pacific.106 
3.112.   China's official export credit insurance agency is SINOSURE. It was created in 2001 by 
merging the export credit insurance depa rtments of China Eximbank and the People's Insurance 
Company of China, with the mandate to promote exports and cross -border investments through 
export credit insurance and investment insurance. Based on information provided by the authorities, 
SINOSURE's e xport credit insurance in 2018 and 2019 covered around 20% of total exports.  
3.113.   SINOSURE offers, inter alia , short -, medium -, and long -term export credit insurance, bond 
and guarantee facilities, and overseas investment insurance and credit information servic es. There 
are several kinds of short -term export credit insurance, with a maximum term of two years 
(Table  3.13). The list of available insurance products is available online.107 Exporters may choose 
from the following insurance products/solutions: (i)  comp rehensive cover insurance, which 
indemnifies exporters from the direct loss arising from political or commercial risks; (ii)  small and 
medium -size enterprise (SME) comprehensive cover insurance, which protects SME exporters from 
the risk of foreign exchang e collection; (iii)  small and micro enterprise easy credit insurance, which 
is tailor -made to meet the specific need of small and micro businesses; and (iv)  additional pre -export 
insurance, which mainly covers the credit risk before export of goods. Financ ing banks may also 
choose specific insurance products.  
Table 3.13 Overview of SINOSURE short -term export credit insurance policy  
Covered risks and insured percentage  
Covered commercial risks  
The buyer goes bankrupt or insolvent.  
The buyer defaults on payment for goods.  
The buyer refuses to take delivery of goods.  
The issuing bank goes bankrupt, closes down, or is under receivership.  
The issuing bank defaults in spite of consistency of trading documents and consistency between letter of 
credit and trading documents, or dishonours under usance of letter of credit.  
Covered political risks  
The country or region of the buyer or issuing bank prohibits or restricts the buyer or issuing bank from 
paying for goods or making letter of credit payment to the insured.  
An import ban is imposed on the goods purchased by the buyer, or the import permi t issued to the buyer is 
revoked.  
A war, civil war, or riot makes the buyer unable to perform the contract, or makes the issuing bank unable 
to discharge its payment obligation under letter of credit.  
A third country through which the payment by the buye r or issuing bank has to be routed issues a 
moratorium.  
Insured percentage  
Up to 90% for the loss resulting from political loss.  
Up to 90% for the loss resulting from bankruptcy, insolvency, default, or other commercial risks.  
Up to 90% for the loss resulting from the buyer's refusal to accept goods.  
Up to 100% under the export credit insurance (forfaiting) policy.  
Up to  90% under the SME comprehensive cover insurance.  
Source:  China Export & Credit Insurance Corporation (SINOSURE) . Viewed at: 
http://www.sinosure.com.cn/en/Insurance/steci/index.shtml . 
 
105 China Eximbank, 2018 Export -Import Bank Annual Report . Viewed at: 
http://www.eximbank.gov.cn/aboutExim/annals/2018_2/ . 
106 China Eximbank , Chinese Government Concessional Loan and Preferential Export Buyer's Credit (Two 
Concessional Facilities). Viewed at: 
http://english.eximbank.gov.cn/B usiness/CreditB/SupportingFC/201810/t20181016_6972.html . 
107 SINOSURE, ST Export Credit Insurance . Viewed at: 
http://www.sinosure.com.cn/en/Insurance/steci/index.shtml . WT/TPR/S/ 415 • China  
 
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  3.114.   SINOSURE offers various medium - and long -term insurance instruments to protect various 
risks born by exporters  and financial institutions (Table 3.14). The term is generally between 2  and 
15 years. Four insurance instruments exist under the medium - and long -term framework: export 
buyer's credit insurance; export supplier's credit insurance; export deferred payment  refinancing 
insurance; and overseas financial leasing insurance.108 
Table 3.14 Overview of SINOSURE medium - and long -term export credit insurance policy  
Covered risks and insured percentage  
Covered commercial risks  
The debtor declares bankruptcy, or the winding -up and/or dissolution or the debtor's default of payment of 
the principal or/and interest due and payable on the due date under the loan agreement or commercial 
contract.  
Covered political risks  
The debtor is being prohibited or inhibited from repaying its debt to the insured with the currency agreed in 
the loan agreement or with other freely convertible currencies as a result of the promulgation of any law, 
decree, order, rule, o r adoption of any administrative measure by the government of the debtor's country 
(or region) or a third country (or region) through which the repayment must be effected.  
The debtor is unable to implement its repayment obligations under the loan agreemen t as a result of any 
moratorium announced by the government of the debtor's country (or region) or a third country (or region) 
through which the repayment must be effected.  
The occurrence of war, revolution, or riot in the debtor's country (or region) or other applicable political 
events to be determined by SINOSURE.  
Insured percentage  
Up to 95% for export buyer's credit insurance and export deferred payment refinancing insurance.  
Up to 90% for export supplier's credit insurance.  
Up to 90% for overseas lease insurance with financial institution ((FI), including financial lease company) 
insured, or 90% for overseas lease insurance with non -FI insured.  
Note:  SINOSURE medium - and long -term export credit insurance c overs risks in relation to the co llection 
of deferred payment by exporters, the account receivable by financial leasing companies, and the 
recovery of loan principal and interest by financial institutions. The tenor is normally 2 to 15 years.  
Source:  SINOSURE, M / LT Export Credit Insuran ce. Viewed at: 
http://www.sinosure.com.cn/en/Insurance/meci/index.shtml . 
3.3  Measures Affecting Production and Trade  
3.3.1   Incentives  
3.115.   During the review period, China continued to provide incentives and financial support to 
different sectors and industries. The authorities indicate that these measures are in place to 
accelerate transformation and upgrading of traditional industries, foste r infant industries, stimulate 
innovation, promote development in remote areas, enhance competitiveness of SMEs, and attract 
FDI. Furthermore, support was also granted with a view to protecting the environment, reducing 
emissions, and conserving energy. Ge nerally, support is granted by the Central Government or local 
governments in the form of direct transfers and tax preferences. The authorities indicate that no 
incentives are granted in the form of access to credit.  
3.116.   The Government's Five -Year Plans for Ec onomic and Social Development serve as a 
reference for the design of support policies and for the identification of priority areas, even though 
the plans do not outline specific measures. The 13th Five-Year Plan (2016 -20) highlighted the 
importance of inno vation capacity, and advocated increased innovation in agriculture, strategic 
emerging industries, intelligent manufacturing, and services. In addition to the Five -Year Plans  for 
Economic and Social Development , there are also sector -specific Five-Year Plans for individual 
industries.  
3.117.   In June 2019, China notified to the WTO its support programmes at the central and 
subcentral levels during the period 2017 -18.109 The 249 -page notification contains information on 
79 central -level and 420 subcentral -level progr ammes. According to the notification, t he objectives 
of the subsidies are to support rural and regional development, protect the environment, conserve 
 
108 SINOSURE, M / LT Export Credit Insurance . Viewed at: 
http://www.sinosure.com.cn/en/Insurance/meci/index.shtml . 
109 WTO documents G/SCM/N/343/CHN, 19  July 2019; and G/SCM/N/343/CHN/Corr.1, 31  July 2019. WT/TPR/S/ 415 • China  
 
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  energy, upgrade specific industries, improve productivity and efficiency, and increase welfare of 
disable d people.  
3.118.   At the central level, support is provided in form of preferential taxes, payment and stamp 
duty exemptions, tariff and VAT reductions, and fiscal appropriation. Fifteen of the 79 programmes 
had already expired by the time of provision of the noti fication ( Table A3.2 ). No information was 
provided by the authorities on how many of the programmes were still active as at April 2021. 
Among the 59 central programmes still active in 2019, 7 were on the agricultural sector; 5 each on 
technology, fishery, energy, and disability; 4 on infrastructure; 3 each on waste management, 
financing, environment, and automobile and transportation; 2 each on SMEs, poverty reduction, 
pharmaceuticals, and economic development; and 1 each on oil and gas, mining, and FDI. Among 
the active programmes, budget information was only made available for 14 programmes that 
provided support in form of fiscal appropriation.  
3.119.   At the subcentral level, the notification contains 420 programmes in 31 provincial 
administrations and 5 designat ed city administrations. Of these programmes, 283 were still active 
in 2019. No information was provided by the authorities on how many of the programmes were still 
active as at April 2021. Under these programmes, incentives are provided to specific indust ries, 
SMEs, research and development (R&D) activities, industry upgrade, less developed regions, and 
rural areas. Support at the subcentral level is through fiscal appropriation. The amount of subsidies 
differs by municipality and by industry.  
3.120.   During the r eview period, several communications were submitted by other Members 
concerning China's subsidy policy and notifications.110 These communications referred to the amount 
of central and subcentral subsidies, the role of government guidance funds, China's fulf ilment of its 
subsidy notification requirements (in particular, subsidies not mentioned in the notifications), 
subsidies to individual sectors (e.g. agriculture, fisheries, and steel), and eligibility criteria for specific 
subsidy schemes. China provided w ritten answers to questions asked in these communications.111 
Specifically, China provided further information about the beneficiaries and eligibility criteria of the 
programmes. However, the total amount of expenditure or revenue forgone was usually not 
provided; according to the authorities, this is due to the lack of statistics on tax expenditures.  
3.121.   The authorities indicate that a notification on subsidies covering the years 2019 and 2020 
will be submitted to the WTO in due course.  
3.122.   The notifications submit ted to the WTO and the replies provided by China to questions asked 
by other Members  did not enable the Secretariat to have a clear overall picture o f China's support 
programmes . In particular, the notifications do not contain information on expenditure le vels in 
certain sectors such as aluminium, electric vehicles, glass, shipbuilding, semiconductors, or steel. 
Information on subsidies going beyond the 2019 notification was not made available to the 
Secretariat. In the WTO Committee on Subsidies and Countervailing Measure s, China generally 
provides answers to questions that focus on its subsidy notifications, but not on subsidy policies not 
covered in its notification.112 The authorities indicate that under the provisions of the 
WTO Agreement on Subsidies and Countervailing  Measures (SCM  Agreement), there is no obligation 
to provide written information on programmes not contained in the subsidy notification.  
3.123.   It would appear that transparency on government support may also be hampered, as the 
Government, through numerous stat e-owned enterprises (SOEs), is involved in the financing and 
management of companies, making it difficult to identify the precise policy actions (see also 
Section  3.3.5). The authorities do not agree with this statement and indicate that no implicit 
 
110 WTO documents G/SCM/Q2/CHN/75 -76, 30  January 2019; G/SCM/Q2/CHN/77, 5  March 2019; 
G/SCM/Q2/CHN/78, 4  April 2019; G/SCM/Q2/CHN/79, 9  April 2019; G/SCM/Q2/CHN/85, 27  January 2020; 
G/SCM/Q2/CHN/86 -89, 29  January 2020; and G/SCM/Q2/CHN/90, 20  August 2020 . Questions were asked by 
the United  States, the Dominican  Republic, Japan, New  Zealand, the European  Union, Canada, and Australia.  
111 WTO documents G/SCM/Q2/CHN/80 -84, 20 November 2019; G/SCM/Q2/CHN/91 -95, 28 October 
2020; and G/SCM/Q2/CHN/96, 30 October 2 020. 
112 WTO document G/SCM/M/110, 13 February 2020, paras.  109 and 117. Furthermore, in April 2017 
questions were posed by the European  Union and the United  States under Article  25.8 of the SCM  Agreement, 
regarding non -notified steel subsidies, to which Chi na has not yet provided written replies (WTO document 
G/SCM/Q2/CHN/70, 13 April 2017).  WT/TPR/S/ 415 • China  
 
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  subsid ies were paid to China's SOEs.  According to the authorities, the Government does not 
intervene in SOEs' financing, operation, and management.  
3.124.   In addition to the notified programmes, it would appear that numerous other initiatives are 
in place to support di fferent industries and attract foreign investment. So -called "government 
guidance funds", or government -guided investment funds, use public resources to make equity 
investments in industries that the Government considers important (Table 3.15). The Secreta riat 
was not able to get clarity on what these funds are.113 Some of them are still in the process of being 
established, and it is unclear what their ultimate size will be. According to some external sources, 
they are mostly financed by the Central Governme nt and local governments, large SOEs, and state -
owned financial institutions. Most of the funds are utilized to finance advanced manufacturing, new 
materials, and other innovative industries. Information provided in Table 3.15 was not confirmed by 
the auth orities; they expressed the view that the information is not relevant to this Review. They 
also state that these funds were in part privately funded, that they would not provide any subsidies, 
and hence would not have to be notified. According to the autho rities,  these funds are not required 
to be notified under the SCM Agreement as  support provided through these funds does not constitute 
subsidies . 
Table 3.15 Government guidance funds  
Name  Size 
(CNY 
billion)  Founding 
year Industries  
Beijing Science and 
Technology Innovation Fund  20 2017 Optoelectronics, big data, new materials, clean energy, 
artificial intelligence, advanced manufacturing, 
healthcare, information technology, quantum computing  
Chengdu Qianhai Industry 
Guidance Fund  40 2016 Infrastructure, emerging industry, advanced 
manufacturing industry, innovative industry, public 
services  
Futian Guiding Fund  10 2015 New energy, new material, aviation, healthcare, 
information technology  
Guangdong Semiconductor 
and Integrated Circuit 
Industry Investment Fund  15 2016 Integrated circuits, advanced manufacturing, devices  
Haihe River Industrial Fund  100 2015 Healthcare, biotechnology, new energy, advanced 
manufacturing, mobile Internet, new m aterials  
Henan Industrial 
Agglomeration Area 
Development Investment 
Fund 60 2017 Advanced manufacturing, services  
Jiangxi Development and 
Upgrade Guidance Fund  100 2017 Innovative and emerging industry, traditional industry 
upgrade, services  
Jilin Industry Investment 
Guidance Fund  10 2015 Strategic emerging industry, modern agriculture, services  
National Emerging Industry 
Investment Guidance Fund  40 2016 Not specified  
National SME Development 
Fund 100 2016 Not specified  
Shandong Finance Group  10 2014 Not specified  
Shenzhen Guidance Fund  100 2010 Information technology, healthcare, smart devices, 
environmental protection  
Shenzhen State -owned Asset 
Reform and Development 
Fund 150 2016 Environmental protection, advanced manufacturing  
Smart Yangtze River Industry 
Guidance Fund  30 2016 Real estate, sports, culture, tourism, agriculture, 
transportation, public services  
Xiamen Industrial Investment 
Fund 10 2015 Displays, computer and telecom devices, healthcare, new 
material, tourism and exhibitions, logistics, software, 
finance, culture  
Xuzhou Industry 
Development Fund  39.5 2016 Not specified  
Yangtze River Industry Fund  200 2015 Information technology, advanced manufacturing, new 
materials, healthcare, clean energy, emerging industries  
Zhongyuan Silk Road Fund  20 2017 Airport construction, logistics, trade, culture, tourism  
Source:  Compiled by the WTO Secretariat from various sources.  
 
113 Therefore, it is not clear if they are subject to notification to the WTO.  WT/TPR/S/ 415 • China  
 
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  3.125.   In addition, some other funds that are related to government policies appear to conduct 
direct investments to support a particular policy initiative (Table 3.16). These funds include 
expenditures under the Belt and Road Initiative (BRI), a nd funds for China's SOEs. According to the 
authorities, the incentives provided by these funds do not constitute subsidies and are not required 
to be notified under the SCM  Agreement.  
Table 3.16 Policy -relate d funds  
Name  Size 
(CNY 
billion)  Founding 
year Industries  
Advanced Manufacturing 
Investment Fund  20 
(first 
phase)  2016 "Made in China 2025" focus industries: rail transport, 
high-end shipping, marine engineering equipment, 
industrial robots, new energy cars, modern agricultural 
equipment, advanced medical devices, new materials  
Beijing Big Data Industry 
Investment Fund  10 
(first 
phase)  2016 Big data transaction platforms, sensors, chips, data 
resources, data technology  
Central Enterprise Guochuang 
Investment Guidance Fund  150 2017 High-speed rail, nuclear energy, aerospace, clean energy, 
3D printing, new energy cars, robotics, quantum network  
China Big Data Industry 
Development Fund  20-30 2016 Big data and related value chains in Guiyang City  
China Culture Industry 
Investment Fund  20 2011 Culture, media, entertainment, performing arts, data  
National Integrated Circuit 
Industry Investment Fund  139 
(first 
phase)  2014 Semiconductor manufacturing, chip design,  materials, 
testing and assembly  
Shanghai Integrated Circuit 
Industry Investment Fund  50 2017 Semiconductor manufacturing, chip design, materials, 
testing and assembly  
Silk Road Fund  265 2014 BRI-related projects  
Source:  Compiled by the WTO Secretariat from several sources.  
3.126.   It would appear that financial support is also provided to the semiconductor industry. 
According to a n OECD  study , it was estimated that  Chinese semiconductor firms received 86% of 
global equity support and 98% of all belo w-market borrowing.114 The study also estimate d that 
Chinese semiconductor companies receive more government funding than companies in other 
countries, and have below -market equity returns. Moreover, the study estimate d that state 
participation in China's s emiconductor industry has increased significantly over the past years, 
including in companies that started as privately owned. The authorities state that they cannot 
confirm the results of the study ; they also indicate that the conclusions of the study are not credible 
as they are based on estimated data.  
3.127.   Given the importance of the Chinese economy and the size of government support accorded 
to individual companies, China's support measures are reported to be susceptible to affect global 
markets, d ownstream industries, and individual value chains. Such effects of China's support cannot 
be quantified in general, as relevant data are not publicly available. Nevertheless, a study by the 
OECD found, for example, that China's financial support on energy and concessional finance for 
aluminium smelting, coupled with export restrictions on raw aluminium, provide Chinese exporters 
of semi -finished aluminium goods with a significant cost advantage, leading to important 
repercussions in global markets.115 The au thorities state that they do not agree with this view , and 
indicate that China does not provide subsidies on energy and concessional finance for aluminium 
smelting . 
3.128.   No official studies on the impact of China's public support on productivity growth and 
innovation are available. Available  firm-level data have allowed academic studies to analyse the 
efficiency of China's government support. With regard to the overall efficiency, it has been found 
that government support had a negative effect on corporate inves tment efficiency and is positively 
correlated with overinvestment.116 With regard to R&D support specifically, it has been shown that 
 
114 OECD (2019), Measuring Distortions in International Markets: The Semiconductor Value Chain , OECD 
Trade Policy Papers No.  234. 
115 OECD (2019), Measuring Distortions in International Markets: The Aluminium Value Chain , OECD 
Trade Policy Papers No.  218. 
116 Hu, J. et al. (2019), "Government Subsidies and Corporate Investment Efficiency: Evidence from  
China", Emerging Markets Review , Vol. 41. WT/TPR/S/ 415 • China  
 
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  China's public support led to an increase in patent quantity, but not in patent quality.117 The 
authorities do not agree wit h the conclusions of these studies .  
3.129.   In the wake of the COVID ‑19 pandemic, the Central Government and regional governments 
launched a series of policies to cushion the economic consequences caused by the pandemic, besides 
ensuring steady medical supplies a nd daily necessities. The Central Government's measures include 
tax reductions, reduction of certain social insurance fees, increase of employer contributions for 
unemployment insurance, temporary exemptions of social insurance fees for SMEs, reduction of 
electricity and gas costs, and deferred tax payments for SMEs. Measures taken by regional 
governments include the waiving of rents for SMEs, extending government procurement to support 
SMEs, selected repayment of employers' social insurance contributions, and exempting companies 
severely impacted by the pandemic from various taxes.  
3.130.   In April 2020, the Government released a Notice on Optimizing Fiscal Subsidies for Promoting 
New Energy Vehicles, extending subsidies for electric and hybrid vehicles until end -2022. Vehicles 
must meet minimum technical and performance criteria to qualify. The notice for the first time 
introduced a sales limit of 2 million vehicles per year. A price limit of CNY  300,000 including tax was 
also introduced. No information was availab le on total expenditure under this programme.  
3.131.   During the review period, China has continued to provide government support to its 
agriculture sector (Section 4.1 .2). China's 2019 subsidy notification also provides information about 
various programmes in the agriculture sector.118 China notified that it did not provide export 
subsidies in 2018.119 No notification on domestic support has been submitted to the WTO since the 
previous Review in 2018. The authorities indicate that a new notification  would be submitted before 
mid-July 2021.  
3.132.   Available figures indicate that China also continued to provide substantial support to its 
fisheries sector. China's subsidy notification refers to six different programmes at the Central 
Government level and 25 pr ogram mes at the local level .120 For example, CNY  398.5 million was 
provided in 2017 and 2018 for stock enhancement. According to external estimates, China's 
government support to its fisheries sector totalled USD  7.3 billion in  2018.121 Moreover, a large share 
of China's government support to the sector is considered as "capacity -enhancing". The authorities 
indicate that a new fisheries policy would be issued soon . 
3.3.2   Standards and other technical requirements  
3.3.2.1   Overview  
3.133.   Since its previous Review, China i ntroduced or revised various laws and regulations  related 
to standards and other technical requirements . On 1 January  2018, the revised Standardization Law 
entered into force and included new provisions such as those on association standards. According to 
the authorities, the Law improved the procedures for setting mandatory standards  (or technical 
regulations) , clearly defined local and sector  standards,  and established a disclosure system for self -
declaration of enterprise standards.  On 6 January  2020, the SAMR promulgated the Measures for 
the Administration of Mandatory National Standards, which stipulate the procedures for making and 
revising mandatory  standards. They entered into force on 1  June 2020. On 16  January  2020, the 
SAMR promulgated the Measures for the Administration of Local Standards, which stipulate 
procedures for making and revising local standards; they entered into force on 1  March  2020. On 
6 January  2020, the SAMR published the Measures for the Administration of Mandatory National 
Standards, which stipulate the procedures for making and revising mandatory standards; they 
 
117 Boeing, P. and Mueller, E. (2019), "Measuring China's Patent Quality: Development and Validation of 
ISR Indices", China Economic Review , Vol. 57; Boeing, P. and Mueller, E. (2016), Measuring Patent Quality and 
National Technological Capacity in Cross -country Comparison , Centre for European Economic Research 
Discussion Paper No.  16-048. 
118 WTO documents G/SCM/N/343/CHN, 19  July 2019; and G/SCM/N/343/CHN/Corr.1, 31  July 2019.  
119 WTO documents G/AG/N/CHN/51 -52, 6 November 2019.  
120 WTO documents G/SCM/N/343/CHN, 19  July 2019; and G/SCM/N/343/CHN/Corr.1, 31  July 2019 
(Programmes 74 -79). 
121 Sumaila , U.R., et al. (2019), "A Global Dataset on Subsidies to the Fisheries Sector", Marine Policy , 
Vol. 27; and Sumaila, U.R, et al. (2019), "Updated Estimates and Analysis of Global Fisheries Subsidies", 
Marine Policy,  Vol. 109.  WT/TPR/S/ 415 • China  
 
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  entered into force on 1  June 2020.122 Other changes during the revi ew period included: (i)  the 
adoption  on 29  June 2019 of the Vaccine Administration Law at the 11th Session of the Standing 
Committee of the 13th National People's Congress (it entered into force on 1  December  2019); 
(ii) the adoption on 26  August  2019 of t he revised Pharmaceutical Administration Law at the 
12th Session of the Standing Committee (it entered into force on 1  December  2019); (iii)  the 
promulgation on 3  September  2019 of the Circular on the Standards of Cosmetics Registration, 
Record -Filing, Ins pection and Test by the National Medical Products Administration (NMPA)123; 
(iv) the adoption on 31  August  2018 of the Soil Pollution Prevention and Control Law at the Standing 
Committee of the 13th National People's Congress; and (v)  the issue on 29  April 2020 of the 
Measures for the Environmental Management Registration of New Chemical Substances by the 
Ministry of Ecology and Environment (MEE) (Order No.  12 of the Ministry), which entered into force 
on 1 January  2021.124 
3.134.   The Standardization Law classifies China's standards into five major categories: national, 
sector, local, association, and enterprise. The national standards include both voluntary and 
mandatory standards. Sector standards and local standards are voluntary. The Law also stipulates 
that, whe re there are other provisions on the formulation of mandatory standards in laws, 
administrative regulations, and decisions of the State Council, such provisions shall prevail.  
3.135.   The Plan for Deepening Standardization Reform issued by the State Council propos es that 
the current mandatory national, sector, and local standards will be gradually integrated into 
mandatory national standards; the three -level system of mandatory national, sector, and local 
standards concerning environmental protection, engineering, construction,  and medicine and 
healthcare will be retained. Sector standards in military industries involving national security and 
secrets, such as nuclear and aerospace, are managed by the National Defence Science and 
Technology Industry Authorities of t he State Council.  
3.136.   The SAMR, established in 2018, is responsible for organizing and guiding the comprehensive 
law enforcement of market supervision, including law enforcement and inspection work in the fields 
of quality, measurement, certification, accredit ation, and standardization. Specifically, the Law 
Enforcement and Inspection Bureau of the SAMR is responsible for formulating and organizing the 
implementation of systems and measures for the comprehensive law enforcement of market 
supervision and investi gation and handling of cases; guiding the investigation and handling of 
relevant violations of market entities in access, production, operation, and trading; undertaking the 
work of organizing, investigating, and supervising the handling of major and impor tant cases with 
national influence, or major and important cases involving more than one province (autonomous 
region or municipality directly under the Central Government); and guiding the comprehensive law 
enforcement of local market supervision.  
3.137.   While th e China National Certification and Accreditation Administration (CNCA) and the 
Standardization Administration of China (SAC) no longer exist as entities, the SAMR retains their 
functions, using their names where relevant. The General Administration of Qual ity Supervision, 
Inspection, and Quarantine (AQSIQ) was dismantled when the SAMR was established.  
3.138.   China's standardization system is administered by the SAMR, performing as the SAC. The 
Department of Standard Techni cal Management of the SAMR issues, under t he name of the SAC, 
national standards plans; approves the release of national standards; and reviews and releases 
important documents such as standardization policies, management systems, plans, and 
announcements. In addition, it notifies the public of ma ndatory national standards, undertakes the 
management of the National Professional Standardization Technology Committee, and carries out 
the regular work of the State Council's standardization coordination mechanism. The Department of 
Standards Innovati ve Management of the SAMR, under the name of the SAC, coordinates, guides, 
 
122 The SAMR also promulgated the Measures for the Administration of Local Standards, which entered 
into force on 1  March  2020. 
123 NMPA Circular No.  72, 2019.  The Circular cancels requirements on qualification recognition for 
cosmetic administrative licensing inspection institutions and the designation of record -filing inspection 
institutions; it stipulates that inspection instit utions can register themselves for recording administration, and 
revises the procedures of registration, record -filing, inspections and tests, requirements for inspection items, 
and requirements for and styles of inspection reports.  
124 Measures for the Envi ronmental Management of New Chemical Substances (Ministry of 
Environmental Protection Order No.  7), issued on 19 January 2020, are to be repealed as Order No.  12 enters 
into force.  WT/TPR/S/ 415 • China  
 
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  and supervises the work related to sector, local, association, and enterprise standards. It is also in 
charge of organizing and participating in the activities of the International Org anization for 
Standardization, International Electrotechnical Commission, and other international or regional 
standardization organizations, as well as the signing of relevant international cooperation 
agreements.  
3.139.   Work related to standardization is carried  out under the unified organization of the SAC, the 
NDRC, the NMPA, other ministries, and local and industry associations (such as the China Association 
for Standardization) in their respective fields.125 
3.140.   The responsibility of the MIIT  and other institutions, such as the China Electronics 
Standardization Institute, the China Communications Standards Association, the NMPA, and the 
National Health Commission , in regard to standard setting has remained largely unchanged since 
the previous Review.126 
3.141.   The GACC is responsible for: (i)  entry -exit health quarantine, entry -exit inspection, and 
quarantine of animals and plants and their products, and the statutory inspection of imports and 
exports; (ii)  supervision and administration of the apprais al, verification, and quality safety of 
imports and exports; (iii)  inspection and quarantine as well as supervision and administration of food 
and cosmetics imports; and (iv)  food export -related work in accordance with bilateral and 
multilateral agreements . 
3.142.   China's technical barriers to trade (TBT) Enquiry Point is headquartered in the Research 
Centre of the GACC for International Inspection and Quarantine Standards and Technical 
Regulations; it assists the Notification and Enquiry Bureau of MOFCOM to submi t TBT notifications.  
3.143.   National standards are formulated in accordance with the Measures on Administration 
of National Standards, Order No.  10, 24 August  1990, unchanged since the previous Review.127 At 
the technical examination stage, mandatory standards mus t be publicly reviewed by convening 
meetings, and the period for receiving comments cannot be less than two months. The authorities 
state that before their approval, mandatory standards that may have a significant effect on trade 
and whose technical conten t is not in accordance with the technical content of relevant international 
standards must be notified to the WTO. Government agencies, such as the NDRC and the MIIT, have 
the staff to approve and promulgate technical regulations that may refer to voluntar y standards, 
rendering them mandatory.  
3.144.   As at end -2020, there were 39,460 national standards (2,133 mandatory and 
37,327  voluntary standards). According to the authorities, at end -2020, among the national 
standards that correspond to the relevant internatio nal standards, 92.4% of mandatory standards 
and 91.4% of voluntary standards were adoptions or adaptation s of international standards, 
compared with 74.3% and 85.9% at end -2017. Of the national standards approved in 2020 (before 
15 July), 4.0% were mandato ry, compared with 2.8% in 2018.  
3.145.   Between January 2018 and 13  April 2021, China submitted 344 TBT notifications, most of 
them under Article  2.9 of the TBT  Agreement.128 In the Committee on Technical Barriers to Trade, 
 
125 According to the authorities, both domestic and registered foreign -funded  enterprises may 
participate in China's national standardization activities. They must file an application to participate in the 
corresponding technical committee, as specified in the Administration Provisions on National Professional 
Standardization Techn ology Committee.  
126 WTO document WT/TPR/S/375/Rev.1, 14  September  2018.  
127 Industry or sectoral standards are formulated by the relevant technical committees. The 
standardization administrations of the competent ministries, with the support of the industry i nstitutes of 
standardization and technical committees, are responsible for establishing industry or sectoral standard 
development plans and approving the corresponding standards. Local standards are formulated by the 
standardization authorities of province s, autonomous regions, and municipalities directly under the Central 
Government in accordance with the Administrative Measures on Local Standards. Industry or sectoral and local 
standards must also be reviewed within five years of their implementation (Guo  Bao Wei Ban No.  3, 2009).  
128 WTO documents G/TBT/N/CHN/ series from 1 January 2016 to 8 April 2021.  WT/TPR/S/ 415 • China  
 
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  between January 2018 and 13  April 2021, 2 5 specific trade concerns (STCs) were raised by Members 
regarding TBT measures maintained or planned by China, including 9 new STCs.129 
3.3.2.2   Product certification  
3.146.   Except for the establishment of the SAMR , and the concurrent abolition of the AQSIQ, no 
changes have taken place in the laws and regulations governing China's certification system  since 
the previous Review . Certification and accreditation are regulated by: the Product Quality Law; the 
Import and  Export Commodity Inspection Law; the Regulations on Certification and Accreditation; 
the Regulations on Compulsory Product Certification; the Measures for the Administration of 
Certification Bodies; the Measures for the Administration of Certification Cer tificates and Certification 
Marks; the Measures for the Administration of Organic Product Certification; and the Measures for 
the Administration of Energy -Saving and Low -Carbon -Emission Product Certification. China 
administers both a voluntary certificatio n system and a compulsory product certification system.  
3.147.   The Certification and Supervision Department and Accreditation, Testing and Inspection 
Department under the SAMR, performing as the CNCA, is responsible for, inter alia , policies related 
to certificat ion, accreditation, testing, and inspection. The CNCA participates in the certification, 
accreditation, testing, inspection, and other international cooperation of qualification certification; 
undertakes the signing of relevant international cooperation pr otocols; organizes national 
inter-ministerial conferences on certification and accreditation; and coordinates with local and 
sectoral authorities regarding certification, accreditation, testing, and inspection.  
3.148.   The China National Accreditation Service for Conformity Assessment (CNAS), under the 
administration of the SAMR, is responsible for the accreditation of certification bodies, laboratories, 
inspection bodies, and relevant bodies. The CNAS is the national accreditation body recognized by 
the SAMR (as t he CNCA) in accordance with the Regulations on Certification and Accreditation. The 
Secretariat of the CNAS is located in the China National Accreditation Institute for Conformity 
Assessment (CNAI). As the legal entity of the CNAS, the CNAI assumes legal l iabilities arising from 
CNAS accreditation activities. The CNAS is mainly responsible for: (i)  establishing and operating the 
national accreditation system for conformity assessment bodies, and formulating and publishing 
accreditation rules, principles, gu idelines, and other normative documents in accordance with, 
inter alia, China's relevant laws and regulations and international and national standards; 
(ii) assessing the competence of local or foreign conformity assessment bodies that have filed 
applicati ons, making accreditation decisions, and conducting accreditation -related surveillance and 
management on accredited conformity assessment bodies; (iii)  directing and regulating the use of 
the CNAS logo and accreditation symbols; (iv)  organizing personnel t raining related to accreditation, 
and qualifying, recruiting, and managing accreditation personnel; (v)  offering relevant technical 
services to conformity assessment bodies, and providing the public with publicly available 
information on accredited conform ity assessment bodies; (vi) participating in international activities 
related to conformity assessment and its accreditation, and signing bilateral or multilateral 
accreditation cooperation agreements with relevant accreditation bodies, related bodies, or 
international organizations; (vii)  dealing with appeals and complaints related to accreditation; 
(viii) undertaking tasks assigned by relevant government departments; and (ix) carrying out other 
activities related to accreditation.  
3.149.   China's compulsory produ ct certification system, which applies to both domestic products 
and imports, aims to enforce product compliance with technical requirements. The products subject 
to compulsory product certification are listed in the Compulsory Product Certification Catalo gue 
(CCC Catalogue); they cannot be sold in China or imported without a China Compulsory Certification 
(CCC) and the corresponding CCC marks.130 The CCC system is based on national compulsory 
standards. The products that have been listed in the compulsory c ertification directory may only 
leave the factory, be sold, imported, and used in other business activity after they have been certified 
and labelled. In April 2020, for the purpose of optimizing the business environment and facilitating 
imports, the Annou ncement of the State Administration for Market Regulation and the General 
Administration of Customs on Releasing the Catalogue of Products Subject to CCC and 
 
129 STCs 294, 296, 428, 456, 457, 466, 477, 489, 493, 509, 526, 527, 533, 534, 545, 547, 551, 576, 
584, 611, 641, 642, 644, 665, and 667.  
130 SAMR Announcement on the Compulsory Product Certification Catalogue (CCC Catalogue) and 
Description and Definition Form (Announcement No.  18, 2020). Viewed at: 
http://gkml.samr.gov.cn/nsjg/rzjgs /202004/t20200428_314776.html . WT/TPR/S/ 415 • China  
 
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  2020 Reference Table for the Products Numbers (Announcement No.  21, 2020) was issued, 
specifying the product numbers involved in the CCC Catalogue.131 
3.150.   Under SAMR Announcement on the Compulsory Product Certification Catalogue  and 
Description and Definition Form (Announcement No.  18, 2020), the CCC  Catalogue includes 
103 products, 19 of which adopted self -declaration assessment. Under this method, the CCC marks 
can be applied after the submission of conformity information; there is no need to involve 
accreditation bodies for compulsory product certification.  
3.151.   The CCC Catalogue is approved and re leased jointly by the SAMR and the CNCA, together 
with the relevant industrial administrative departments, if approval from the industry regulator is 
required. Responsibility for the general administration of the compulsory product certification system 
and its implementation lies with the CNCA. Random conformity sampling tests are conducted on 
imports that have already acquired a CCC.  
3.152.   Procedures to obtain the CCC mark have remained largely unchanged since the previous 
Review; with the exception of 19 produc ts that have been accredited by self -declaration, an 
application must be submitted to the authorized accredited certification bodies designated by the 
CNCA, each of which is authorized to provide certification for several products subject to the CCC. 
In the context of the present Review, the authorities have indicated that there are 35 mandatory 
certification bodies.132 
3.153.   Under certain circumstances, exemptions from CCC certification may be granted. Eligible 
products include goods and samples required for rese arch, testing, and certification testing; 
parts/goods needed directly for end -users' maintenance purposes; equipment/spare parts 
(excluding office supplies) used to complement factory production lines/complete production lines; 
goods used only for commerci al display but not for sale; imported spare parts for the purpose of 
exports as a whole machine; and other goods that are exempt from CCC certification for special 
purposes.  
3.3.2.3   Labelling and packaging  
3.154.   Imported pre -packaged food or food additives require a lab el in Chinese, and instructions, 
as long as laws require, in Chinese. Such labels and instruction manuals must specify the origin of 
the product and the name, address, and contact details of the domestic agent importing the food.133 
The labels and instructi ons must comply with the provisions of the Food Safety Law and other 
relevant laws and administrative regulations and the requirements of the National Food Safety 
Standards, and state the country of origin of the food, as well as the name, address, and con tact 
details of the domestic agent. Pre -packed food without labels and/or instructions in Chinese or whose 
labels or instructions do not comply with the provision of the Law may not be imported.  
3.155.   Several changes to labelling and packaging requirements took place during the review 
period. For example, Articles  67-71 of the Food Safety Law, as amended in 2018, specify the 
requirements on food labelling. Article  33 of the Regulations on the Implementation of the Food 
Safety Law, as amended in 2019, provides tha t producers and distributors shall print conspicuous 
marks for their involvement in the business of genetically modified foods; it also stipulates that the 
labelling measures shall be formulated by the food safety supervision and administration department 
of the State Council while consulting the agricultural administrative department of the State Council.  
 
131 This involves updating the CCC Catalogue, drafting and promulgating the implementing rules for the 
compulsory certification of products listed in the CCC Catalogue, designing and promulgating certification 
marks, defining t he requirements for CCCs, designating certification bodies and testing laboratories, carrying 
out conformity assessment activities for CCC certification, and supervising and inspecting compulsory product 
certification.  The SAMR may also authorize market re gulation authorities of local People's Governments  at or 
above the county level as local regulation authorities for products listed in the CCC Catalogue in areas under 
their administration.  
132 Certification bodies include the China Quality Certification Centre, China Security Technology 
Certification Centr e, China Agricultural Product Quality Certification Centre, China Safety Glass Certification 
Centre, Product Conformity Assessment Centre, China Certification Centre for Fire Products under the Ministry 
of Public Security, and China Automotive Certificatio n Centre.  
133 Food Safety Law, Article  97; and General Rules for the Labelling of Pre -packaged Foods (GB 7718 -
2011), Article  4.1.6.3.  WT/TPR/S/ 415 • China  
 
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  3.156.   Other labelling and packaging requirements include the National Safety Standard General 
Rules for the Nutrition Labelling of Pre -packaged Foods (GB28 050-2011), the National Food Safety 
Standard General Rules for the Labelling of Pre -packaged Foods (GB7718 -2011), the National Food 
Safety Standard General Rules for Labelling of Pre -packaged Foods for Special Dietary Uses 
(GB13432 -2013), the Vaccine Administr ation Law (adopted on 29  June 2019), the revised 
Pharmaceutical Administration Law (issued on 26  August  2019), Regulations for the Implementation 
of the Drug Administration Law (unchanged since 2018), Regulations for the Supervision and 
Administration of M edical Devices (unchanged since 2018, currently being revised), the Regulations 
on the Supervision and Administration of Cosmetics (issued on 16  June 2020), the Product Quality 
Law (unchanged since 2018), the Administrative Measures for the Packaging and L abelling of 
Agricultural Products (unchanged since 2018), and the Provisions for the Administration of Food 
Labelling (AQSIQ Decree No.  123).134 
3.157.   The draft Measures for Supervision and Administration of Food Labelling, published by the 
SAMR in November 2019,  have not yet been adopted by the legislature. The revised draft of the 
Wildlife Protection Law was submitted to the 22nd session of the Standing Committee of the 
13th National People's Congress for the first review on 13  October  2020. Currently, it is being revised 
and improved based on the opinions of various parties.  
3.3.3   Sanitary and phytosanitary requirements  
3.3.3.1   Legal, institutional, and policy framework  
3.158.   During the review period, there was a substantial reorganization of the agencies responsible 
for sanitar y and phytosanitary (SPS) -related issues. In 2018, the former China Food and Drug 
Administration, General Administration for Industry and Commerce, and the AQSIQ were 
restructured into the SAMR, and the NMPA was established under the SAMR's responsibility.  The 
GACC took on many of the responsibilities previously held by AQSIQ. The respective responsibilities 
of the different institutions in charge of China's SPS system are set out in Table 3.17. China's WTO 
SPS Enquiry Point is the SPS Notification and Enqu iry Division in the Research Centre for 
International Inspection and Quarantine Standards and Technical Regulations within the GACC. Its 
national notification authority is the WTO Notification and Enquiry Centre within MOFCOM.135 
3.159.   As set out in the Food Safe ty Law, local food safety standards may be developed and 
published by the health administrative departments of provinces, autonomous regions, or 
municipalities directly under the Central Government for local specialties without national food safety 
standar ds. These must be reported to the heath administrative department of the State Council for 
recordation and must be immediately repealed after the relevant national food safety standards are 
issued.  
3.160.   The main SPS -related laws and  regulations are set out in T able 3.18. Amendments to the 
Law on Import and Export Commodity Inspection in 2018 involved deletion of references to customs 
inspection and release of goods based on a customs declaration certificate issued by a commodity 
inspection organization136, while changes the Law's 2019 Implementing Regulations reflected 
institutional changes.137 Similarly, amendments to the Food Safety Law in  2018138 were to reflect 
changes to the names of relevant authorities.  
 
134 AQSIQ Decree No.  123 is planned to be abolished after the Measures for the Supervision and 
Administration of Food Labellin g are issued and enter into force. The Provisions for the Supervision and 
Administration of Production of Food Additives (AQSIQ Decree No.  127) were abolished on 13 July 2020.  
135 WTO Sanitary and Phytosanitary Information Management System. Viewed at: 
http://spsims.wto.org/en/EnquiryPointsNotificationAuthorities/Search?countryCode=C156&filter= . 
136 Law on Inspection of Import and Export Commodities (as  amended in December 2018). Viewed at: 
http://www.customs.gov.cn/customs/302249/302266/302267/2369445/index.html . Changes were made to 
Articles 11 and 15 of the Law.  
137 Implementing Regulations of the Law on Inspection of Import and Export Commodities (revised and 
promulgated on 2 March 2019). Viewed at:  
http://www.customs.gov.cn/c ustoms/302249/302266/302267/2369666/index.html . 
138 Food Safety Law (revised and promulgated on 29 December 2018. Viewed at: 
http://www.npc.gov.cn/npc/c30834/20190 1/c6d064de8295489288ec1383b33212ee.shtml . WT/TPR/S/ 415 • China  
 
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  Table 3.17 Central Government institutions with SPS -related responsibilities, 2021  
Institution  Responsibilities  
National Health 
Commission  Superv ision and management of public health; food safety risk assessment; 
organization and formulation of national standards for food safety; monitoring, 
assessment, and information exchange of food safety risks; and safety reviews of 
novel food, new food additi ves, and new varieties of food -related products.  
Ministry of Agriculture 
and Rural Affairs 
(MARA)  Supervision of the safety and quality of agricultural products; supervision and 
management of livestock and poultry slaughtering facilities; and leading the  work 
of national entry -exit animal and plant quarantine.  
State Administration 
for Market Regulation 
(SAMR)  Coordination of food safety supervision and administration; organization of the 
formulation of major food safety policies; building a food safety e mergency 
response system; organization and guidance of emergency responses; 
investigation and handling of major food safety incidents; food safety inspection 
and administration; establishment of a supervision and inspection system and a 
mechanism for ident ifying and controlling hidden dangers that cover the whole 
process of food production, distribution, and consumption; organization of 
supervision and sampling inspection to ensure food safety, risk monitoring, 
guiding, and urging the verification and treat ment of substandard foods, as well 
as pre -warning and exchanges of information on risks.  
General Administration 
of Customs (GACC)  Entry -exit commodity inspection; entry -exit health quarantine; entry -exit animal 
and plant quarantine; administration of insp ection and quarantine of imported 
food and cosmetic products; and implementation of work related to exported food 
in accordance with multilateral and bilateral agreements.  
Source:  Information provided by the authorities.  
Table 3.18 Main SPS -related laws and regulations, January 2021  
Laws  Promulgation/revision  
Law on the Entry and Exit Animal and Plant Quarantine  Effective 1992. Last revised 2009  
Food Safety Law  Effective 2009. La st revised 2018  
Law on Inspection of Import and Export Commodities  Effective 1989. Last revised 2018  
Law on Quality and Safety of Agricultural Products  Effective 2006  
Regulations on Implementation of the Law on the Entry and 
Exit Animal and Plant Quarantine  Effective 1997  
Implementing Regulations of the Food Safety Law  Effective 2009. Last revised 2019  
Implementing Regulations for the Law on Inspection of Import 
and Export Commodities  Effective 2005. Last revised 2019  
Law on Animal Epidemic Prevention  Effective 1997. Last revised January 2021  
Source:  Information provided by the authorities.  
3.161.   The Implementing Regulations of the Food Safety Law entered into force in 
December  2019139; changes to these regulations reflect the major change s to the Food Safety Law 
in 2015 (described in China's previous Review). A draft of the Implementing Regulations was notified 
to the WTO in 2017.140 It would appear that an underlying principle of the Law and the Implementing 
Regulations is that food produc ers should hold primary accountability for food safety; they also 
contain provisions on traceability of food and agricultural products sold in China.  
3.162.   China's 13th Five-Year Food Safety Plan (2016 -20) set out the priority goals and associated 
tasks to impro ve food safety governance and the development of the food industry.141 These 
included, inter alia , increasing inspections and testing, addressing pollution, improving food safety 
standards and their integration with international standards, upgrading resear ch and testing 
capacities, strengthening enforcement and improving related laws and regulations. The authorities 
indicate that several steps have been taken to realize the goals in the Food Safety Plan including: 
projects to formulate or revise standards a nd inspection methods142; revisions to Administrative 
 
139 Implementation Regulations of the Food Safety Law (which entered into force on 1  December  2019). 
Viewed at: http://www.gov.cn/zhengce/content/2019 -10/31/content_5447142.htm . 
140 WTO document G/SPS/N/CHN/1055, 14 August 2017.  
141 FAO, 13th Five-Year National Food Safety Plan . Viewed at: 
http://www.fao.org/faolex/results/details/en/c/LEX -FAOC175008 . 
142 These projects covered general standards; hygienic standards for production and operation; 
supporting inspection methods; and standards for food safety and nutrition practices of formula foods f or 
infants and young children, formula foods for special medical purposes, and group meals for key populations.  WT/TPR/S/ 415 • China  
 
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  Measures on Food Safety Standards143; improvements to data collection to inform food safety risk 
assessments through monitoring activities, studies, and surveys; improvements to quantitative risk 
assessment techniques and models in the fields of chemistry and microbiology in order to discove r 
and assess food safety hazards developed by the China National Center for Food Safety Risk 
Assessment; updates to the Manual of National Food Safety Standards; and strengthened sampling 
inspection and monitoring of food safety. The authorities also indic ate that China has become 
increasingly active in developing international food standards.  
3.163.   MARA plans to introduce an edible agriculture product compliance certificate system and a 
National Agriculture Product Quality and Safety Traceability Platform. Accor ding to the authorities, 
these measures are only applicable to domestic production and operation of edible agricultural 
products.  
3.164.   From 2018 to early 2021, the GACC signed several memoranda of understanding or 
cooperation protocol with the relevant authorit ies in 28 trading partners on SPS -related issues, 
namely: import and export water product safety cooperation; import and export food safety 
cooperation; implementing SPS measures; animal and/or plant quarantine/inspection; animal health 
and quarantine; SPS  measures cooperation; further promoting e -certificate exchange and paperless 
cooperation; food safety and animal and plant health cooperation; implementing paperless 
cooperation on inspection and quarantine certificates; water product e -certificate cooper ation; 
establishing a cooperation system for joint prevention and control of plant epidemics and diseases 
in border areas; establishing the SPS measures working group; and notification and control 
procedures for certain significant poultry diseases.  
3.3.3.2   SPS me asures  
3.165.   Between 1  January  2018 and 13  April 2021, China submitted 165 notifications to the WTO 
Committee on Sanitary and Phytosanitary Measures (SPS Committee) , including 2 emergency 
notifications .144 The emergency notifications related to the suspension of imports of logs originating 
in six Australian states to prevent the introduction of quarantine pests145, and measures with respect 
to imported cold -chain food to prevent the transmission of COVID ‑19 (see below).146 Most of China's 
notifications during the re view period relate to human health and food safety (Chart 3.5). 
Forty-four of the SPS measures notified by China during the review period were based on 
international standards, recommendations, or guidelines.  
3.166.   The authorities indicate that, over the period January 2018 to December 2020, China issued  
22 national standards, including 4 revised ones, for animal health and 77 national standards in the 
phytosanitary area (including 2 revised standards). In 2019, China released the latest versions of 
the National Food Safety Standard – Maximum Residue Limits for Pesticides in Foods and the National 
Food Safety Standard – Maximum Residue Limits for Veterinary Drugs in Goods, which are applicable 
to foods sold in the Chinese market.147 
3.167.   In 2020, the GACC issued the Ann ouncement on Adjusting the Supervision Requirements for 
Certain Imports and Exports.148 This is aimed at optimizing the port business environment and 
reducing the burden on enterprises through removing certain SPS -related reporting, registration, 
certificat ion, inspection, and other regulatory requirements.  
3.168.   In order to prevent the reintroduction of the COVID ‑19 virus through imported cold -chain 
food and to protect the health and safety of consumers, the GACC  implemented emergency 
preventive measures for foreign manufacturers of imported cold -chain foods with positive novel 
coronavirus nucleic acid results. This was notified to the WTO as an emergency measure in 2020, 
 
143 According to the authorities, these revisions involved food safety standards of new food raw 
materials, new varieties of food -related products , and new varieties of food additives; the harmonization of 
local and national standards; and the harmonization of the standards set for imported food without national 
food safety standards.  
144 WTO Sanitary and Phytosanitary Information Management System. V iewed at: 
http://spsims.wto.org . 
145 WTO document G/SPS/N/CHN/1194, 12 January 2021.  
146 WTO document G/SPS/N/CHN/1173, 21 September 2020.  
147 GB 2763 -2019 and GB 31650 -2019, respectively.  
148 GACC Announcement No.  9, 2020. Viewed at: 
http://www.customs.gov.cn/customs/302249/2480148/3262223/index.html . WT/TPR/S/ 415 • China  
 
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  which is still in force.149 It has been rep orted that, in 2020, the city of Shenzhen introduced COVID ‑19 
handling and testing requirements for imports of frozen meat and seafood. In response to the 
pandemic, China has also taken measures to facilitate the imports of food and agricultural products 
and simplify sanitary approval for imported special medical supplies (Box 3.1).  
Chart 3.5 Main elements contained in SPS measures notified by China, 1 January 2018 - 
13 April 2021  
 
Note:  This chart indicates t he keywords contained in notifications in the WTO Sanitary and Phytosanitary 
Information Management System. Most notifications contain more than one keyword.  
Source:  WTO Sanitary and Phytosanitary Information Management System. Viewed at: 
http://spsims.wto.org . 
3.169.   During the review period, eight new STCs were raised in the SPS Committee, regarding: 
(i) restrictions on imports of US beef; (ii)  administrative measures for registration of overseas 
manufacturers of imported f ood; (iii)  actions related to COVID ‑19 that affect trade in food and 
agricultural products; (iv)  restrictions related to Highly Pathogenic Avian Influenza (HPAI); 
(v) recognition of equivalence for third parties as part the China -United  States Phase 1 Economic 
and Trade  Agreement ; (vi)  a proposed new health certificate format for shrimp imports; 
(vii) restrictions on bovine meat imports; and (viii)  delays in approving requests for new listings or 
reinstatements of export establishments. An additional fi ve STCs were raised in the SPS Committee 
regarding Chinese measures in place prior to this review period (Table 3.19).  
Table 3.19 SPS-related STCs  raised against China, 1 January 2018 -13 April 2021  
STC Member(s) raising STC , 
(Members supporting the 
concern)  First raised/last raised , 
(number of times 
subsequently raised)  
China's AQSIQ official certification 
requirements for food imports  Israel, United  States , 
(Australia, Canada, Chile, 
Costa Rica, Europe an Union, 
Guatemala, Japan, Republic 
of Korea, Mexico, Norway, 
Singapore, Switzerland, and 
Thailand)  2004/2019 , (7) 
General import restrictions due to bovine 
spongiform encephalopathy (BSE)  European  Union, 
United  States , (Canada, 
Switzerland, and Uruguay)  2004/2020 , (39) 
 
149 WTO docume nt G/SPS/N/CHN/1173, 21 September 2020 . The notification refers to GACC 
Announcement on the Implementation of Emergency Preventive Measures for Foreign Manufacturers of 
Imported Cold -chain Foods with Novel Coronavirus Nucleic Acid Positive Results (Announc ement No.  103, 
2020).  
Territory protectionAflatoxinsPharmaceutical productsBeveragesCOVID-19Territory protectionAnimal diseasesHeavy metalsPestsPlant healthToxinsMycotoxinsPesticidesModification of content/scopeMRLsPackagingContaminantsLabellingAnimal healthAnimal feedFeed additivesFood additivesFood safetyHuman health
0102030405060708090100110120130140150Chart 3.[CHN]  Main elements contained in SPS measures notified by China, 1 January 2018 to 13 April 2021WT/TPR/S/ 415 • China  
 
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  STC Member(s) raising STC , 
(Members supporting the 
concern)  First raised/last raised , 
(number of times 
subsequently raised)  
Import restrictions due to African swine fever  European  Union  2015/2020 , (9) 
Proposed amendments to the implementation 
regulations on safety assessment of 
agricultural GMOs  Paraguay, United  States  2015/2019 , (9) 
Import restricti ons due to HPAI  European  Union, 
United  States  2016/2020 , (11) 
Restrictions on imports of US beef  United  States  2019 
Administrative measures for registration of 
overseas manufacturers of imported food  United  States , 
(European  Union, Japan, 
Switzerland, and Thailand)  2020, (1) 
Actions related to COVID ‑19 that affect trade 
in food and agricultural products  Canada, United  States , 
(Australia, Brazil, Mexico, 
Paraguay, United Kingdom)  2020, (0) 
HPAI-related restrictions  Ukraine  2020, (0) 
Recognition of equivalence for third parties as 
part of the China -United  States  Phase 1 
Economic and Trade  Agreement  Australia  2020, (0) 
Proposed new health certificate format for 
shrimp imports  India 2021, (0) 
Restrictions on bovine meat imports  India 2021, (0) 
Delay in approving requests for new listing 
and reinstatement of export establishments  Australia  2021, (0) 
Source:  WTO Sanitary and Phytosanitary Information Management System. Viewed at: 
http://spsims.wto.org . 
3.3.3.3   Inspection and quarantine  
3.170.   The Law on Entry and Exit Animal and Plant Quarantine and its Implementing Regulations 
regulate the inspection of animals, plants, and related products that enter, exit, or transit through 
China; containers, packing materials, and bedding materials that contain or carry animals, plants, 
and related products; and means of transport from animal/plant e pidemic or infected areas. The 
Catalogue of Entry -Exit Commodities Subject to Inspection and Quarantine list all the imports and 
exports subject to statutory inspection by the entry and exit inspection and quarantine authorities 
prior to their commercializ ation (or exit) into (from) China. The current catalogue is contained in 
GACC Announcement No.  220, 2019.150 During the review period, the GACC issued revised measures 
for the supervision and/or inspection and/or quarantine of imports (and exports) of vario us products, 
including cultivation media; fruit; aquatic products, feed, and feed additives; cereals; genetically 
modified products; meat products, food, dairy products, and aquatic animals; propagation materials 
for entry plants; animals and plants; genet ic materials of animals; cotton; and non -edible animal 
products.151 
3.3.3.4   Genetically modified organisms (GMOs)  
3.171.   China has so far approved the certificates of import safety only for the following genetically 
engineered crops for processing as raw materials: soybea ns, corn, rapeseed, cotton, beets, and 
papayas, and their products. As indicated by the authorities during China's previous Review, safety 
evaluation is required for research, testing, production, processing, operation, and import of 
agricultural GMOs in C hina.152 This is undertaken by China's National Agricultural Genetically Modified 
Organisms Safety Council. China's agricultural GMO safety assessment systems are governed by the 
Guidelines for the Safety Assessment of Genetically Modified Plants, Guideline s for the Safety 
Assessment of Genetically Modified Animals, and Guidelines for the Safety Assessment of Genetically 
Modified Microorganisms for Animals, as well as several measures on safety assessment, testing, 
and regulation of agricultural GMOs.153 Reportedly in 2018, MARA amended the regulations on safety 
assessment, import approval, and labelling of agricultural GMOs; apparently these regulations 
 
150 GACC Announcement No.  220, 2019. Viewed at: 
http://www.customs.gov.cn/customs/302249/302266/302267/2811876/index.html . 
151 GACC Decrees No.  240 and No.  243, 2018.  
152 WTO document WT/TPR/M/375/Add.1, 1 February 2019.  
153 WTO document WT/TPR/M/375/Add.1, 1 February 2019.  WT/TPR/S/ 415 • China  
 
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  provide for additional in -country trials and studies on new biotech events as part of the dossier 
submissio n process.  
3.172.   The Implementing Regulations of the 2019 Food Safety Law require the introduction of 
conspicuous labelling requirements for genetically modified foods. China has not replaced the 
Regulations on Administration of the Labelling of Agricultural Gen etically Modified Organisms with 
the Implementing Regulations of the Food Safety Law.  
3.3.4   Competition policy and price controls  
3.3.4.1   Competition policy  
3.3.4.1.1   Legislative and institutional framework  
3.173.   During the review period, the legislative and institutional framework of the competition 
regime underwent significant adjustments. Relevant adjustments are still in progress. As part of the 
institutional reform of the State Council in 2018, the SAMR was established as the national 
administrative body for regulating market -related issues, including competition. The previous 
functions and personnel of the NDRC, the SAIC, and MOFCOM in their respective fields of competition 
policy merged into the SAMR. Thus, the fragmentation of the administrative enforcement of 
competition policy came to an end.154 A new Anti -Monopoly Bureau and a new Price Supervision and 
Anti-Unfair Competition Bureau were established as the competition agencies within the SAMR. The 
institutional structure of competition authorities at the provincial and local lev els of government has 
also been adjusted accordingly. The functions of the new Anti -Monopoly Bureau include: 
(i) coordinating and promoting the implementation of competition policies, and organizing and 
guiding the review of fair competition; (ii)  formulat ing anti -monopoly measures and guidelines; 
(iii) organizing the enforcement of anti -monopoly rules; and (iv)  undertaking international 
cooperation and exchanges in anti -monopoly enforcement. The State Council also established an 
Anti-Monopoly Committee to organize, coordinate, and guide the anti -monopoly work across the 
country. The Committee is headed by a leader of the State Council and composed of senior officials 
from relevant ministries and commissions . Following the institutional reform in  2018, the S AMR now 
serves as the General Office of the Committee and is responsible for its day -to-day work.155 
3.174.   Following the completion of the institutional adjustment, one of the priorities of the SAMR  is 
the adjustment of the competition policy legal framework by updating and integrating relevant 
departmental rules and guidelines that had been issued by previous enforcement authorities. The 
Anti-Monopoly Law (AML)156, the Anti -Unfair Competition Law157, and the Price Law remain the main 
legislation in the area of competition policy. The Anti -Unfair Competition Law was revised again in 
2019 to strengthen the protection of trade secrets. The SAMR issued several new integrated rules 
and guidelines, and many previous rules and guidelines ceased to apply. Notably, in June 2019, the 
SAMR issued new rules concerning monopoly agreements, the abuse of dominant market positions, 
and the abuse of administrative monopoly. They are: (i)  the Interim Provisions on Prohib iting 
Monopoly Agreements (SAMR Order No.  10, 2019); (ii)  the Interim Provisions on Prohibiting Abuse 
of Dominant Market Positions (SAMR Order No.  11, 2019); and (iii)  the Interim Provisions on 
Prohibiting Abuse of Administrative Power to Eliminate or Rest rict Competition (SAMR Order No.  12, 
2019). These new rules are expected to unify enforcement procedures and standards in relevant 
fields. Concerning concentration of undertakings, in September 2018, the SAMR updated and issued 
seven guiding rules on notif ications of concentration of undertakings. In October 2020, the SAMR 
issued the Interim Provisions on the Examination of Concentration of Undertakings (SAMR Order 
No. 30, 2020). With regard to competition issues related to IPR, in October 2020, the SAMR am ended 
the Provisions on Prohibiting Abuse of Intellectual Property Rights to Eliminate or Restrict 
 
154 Since the promulgation of the Ant i-Monopoly Law in 2008, the administrative enforcement of the Law 
had long been divided among the NDRC, MOFCOM, and the former SAIC. There had been the academic view 
that such an institutional framework had not been able to ensure the full functioning of c ompetition policy 
because it had diminished coherence in law and policy. See WTO document WT/TPR/S/375/Rev.1, 
14 September  2018, paras.  3.148 -3.149.  
155 Before the institutional reform in 2018, MOFCOM served as the General Office of the Committee.  
156 For more  information about the Anti -Monopoly Law, see WTO document WT/TPR/S/375/Rev.1, 
14 September  2018, paras.  3.144 -3.145.  
157 The Anti -Unfair Competition Law was amended in 2017 to remove its overlaps with the 
Anti-Monopoly Law. Major changes were explained in WTO document WT/TPR/S/375/Rev.1, 
14 September  2018, para. 3.146.  WT/TPR/S/ 415 • China  
 
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  Competition (SAMR Order No.  31, 2020). In addition, the Anti -Monopoly Committee of the 
State  Council issued several guidelines concerning various aspects of competition policy 
enforcement. Box  3.2 presents the main applicable laws, regulations, and guidelines dealing with 
competition policy issues in China.  
3.175.   The AML is currently under amendment. The main purpose of the amendment is to further 
improve the anti -monopoly system and rules and enhance the enforcement of the Law. The SAMR 
published a draft of the amended Law for public comments on 2  January  2020.158 According to the 
authorities, 265 comments were received from 75 organizations and citizens. These comme nts 
concern almost all aspects of competition policy, including monopoly agreements, abuse of dominant 
market position, abuse of administrative power, notification of concentration of undertakings, 
investigation, and legal liability. The draft of the Law w as completed and submitted to the 
State  Council in December 2020.  
Box 3.2 Main laws, regulations, and guidelines dealing with competition policy issues  
Laws  
• Anti-Monopoly Law (2007)  
• Anti-Unfair Competition Law (as amended in 2019) 
• Price Law (1997)  
Generally applicable regulations/guidelines  
• SAMR Notice on the Authorization of Anti -monopoly Law Enforcement (SAMR Anti -Monopoly Notice 
No. 265, 28  December  2018)  
• SAMR  Notice on Special Documentation Templates in Anti -Monopoly Cases (SAMR Anti -Monopoly Notice 
No. 72, 3 April 2019)  
• Provisions on Prohibiting Abuse of Intellectual Property Rights to Eliminate or Restrict Competition (as 
amended by SAMR Order No.  31, 23  October 2020)  
• Guidelines of the Anti -Monopoly Committee of the State Council on the Definition of Relevant Market 
(24 May 2009)  
• Guidelines of the Anti -Monopoly Committee of the State Council on Commitments by Operators in 
Monopoly Cases (4  January  2019)  
• Guide lines of the Anti -Monopoly Committee of the State Council on Conformity with the Anti -Monopoly 
Laws and Regulations (11  September  2020)  
• Guidelines of the Anti -Monopoly Committee of the State Council on Anti -Monopoly in the Field of 
Intellectual Property Ri ghts (4  January  2019)  
• Guidelines of the Anti -Monopoly Committee of the State Council on Anti -Monopoly in the Field of Internet 
Platform Economy (7  February  2021)  
Regulations on abuse of administrative power  
• Interim Provisions  on Prohibiting Abuse of Administrative Power to Eliminate or Restrict Competition 
(SAMR Order No.  12, 26  June 2019)  
• State Council Opinions on Establishing A Fair Competition Review System in the Development the Market 
System (Guo Fa No.  34, 2016)  
• NDRC, MOF, MOFCOM, SAIC and Legislative Affairs Office of the State Council Notice on Issuing the 
Detailed Rules for the Implementation of the Fair Competition Review (Trial) (NDRC Notice Jia Jian 
No. 1849, 2017)  
• SAMR Announcement on Issuing the Guidelines for the  Implementation of Third -party Assessments in 
Fair Competition Reviews (SAMR Announcement No.  6, 2019)  
Regulations on monopoly agreements  
• Interim Provisions on Prohibiting Monopoly Agreements (SAMR Order No.  10, 26  June 2019)  
• Guidelines of the Anti -Monopo ly Committee of the State Council on the Application of A Leniency 
Programme in Horizontal Monopoly Agreement Cases (4  January  2019)  
Regulations on abuse of dominant market positions  
• Interim Provisions on Prohibiting Abuse of Dominant Market Positions (SAMR Order No.  11, 26  June 2019)  
Regulations on price -related monopoly  
• Provisions on the Administrative Punishment of Price -related Violation (2010 Revision)  
 
158 The draft amended Law is available at: 
http://www.samr.gov.cn/hd/zjdc/202001/t20200102_310120.html . WT/TPR/S/ 415 • China  
 
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  Regulations on concentration of undertakings  
• Interim Provisions on the Examination of Concentration of Undertakings (SAMR Order No.  30, 2020)  
• Provisions of the State Council on Thresholds for Prior Notification of Concentrations of Undertakings 
(State Council Decree No.  529, 2008)  
• Notification Form of Anti -monopoly Examinatio n on the Concentration of Undertakings (as amended by 
SAMR on 29  September  2018)  
• Measures for Calculating the Turnover for the Declaration of Business Concentration in the Financial 
Industry (MOFCOM, PBOC, China Banking Regulatory Commission, China Securit ies Regulatory 
Commission, and China Insurance  Regulatory Commission Order No.  10, 2009)  
• Guidelines on the Procedures of Anti -Monopoly Review of Concentration of Undertakings 
(29 September  2018)  
• Guiding Opinions on the Notification of Simple Cases of Conce ntration of Undertakings (as amended on 
29 September  2018)  
• Guiding Opinions on Prior Notification of Concentration of Undertakings (as amended on 
29 September  2018)  
• Guiding Opinions on Regulating Notification Names for Cases of Concentration of Undertakings (as 
amended on 29  September  2018)  
• Guiding Opinions on Documentations and Materials in the Prior Notification of Concentration of 
Undertakings (as amended on 29  September  2018)  
• Model Text of Entrustment Agreement on Monitoring the Fulfilment of  Attached Remedies in Concentration 
of Undertakings (non -binding) (amended on 29  September  2018)  
Sectoral regulations  
• Guidelines of the Anti -Monopoly Committee of the State Council on Anti -Monopoly in Automotive Industry 
(4 January  2019)  
Other regulation s 
• Interim Provisions on Regulating Sales Promotion (SAMR Order No.  32, 29  October  2020)  
Source:  Information provided by the authorities.  
3.3.4.1.2   Monopoly agreements  
3.176.   The AML and the SAMR's Interim Provisions on Prohibiting Monopoly Agreements (SAMR  
Order No.  10, 26  June 2019) prohibit six types of  horizontal agreements: (i)  fixing prices; 
(ii) restricting the availability of products; (iii)  splitting the markets; (iv)  restricting the purchase or 
development of new technologies; (v)  joint boycotting of transactions; and (vi) other agreements 
confirmed by the authorities; and three types of vertical agreements: (i)  fixing the prices of products 
resold to a third party; (ii)  restricting the lowest prices of products resold to a third party; and 
(iii) other agreements confirmed by the authorities. The prohibition applies to written or verbal 
monopoly agreements or decisions and to concerted behaviour among firms without explicit written 
or verbal agreement. Trade associations are prohibited from introduci ng charters, rules, decisions, 
and standards that would eliminate or restrict competition and from organizing or promoting 
monopoly agreements among their members.  
3.177.   The AML provides for the application of administrative penalties for concluding and 
implemen ting a monopoly agreement, including issuing an order to discontinue the violation, the 
confiscation of any unlawful gains, and the imposition of a fine of between 1% and 10% of the 
turnover realized in the previous year. If the monopoly agreement has not yet been implemented, 
the fine may not exceed CNY  500,000. Monopoly agreements as a result of the abuse of 
administrative power are equally subject to penalties. Mitigation or exemption from the penalty may 
be obtained in cases of voluntary collaboration w ith the investigating authority or by providing 
material evidence during the investigation. On 4  January  2019, the Anti -Monopoly Committee of the 
State Council published Guidelines on the Application of a Leniency Programme in Horizontal 
Monopoly Agreement  Cases, according to which, generally speaking, a maximum of three qualified 
operators may be granted lenient treatment. The first company that applies for leniency will be given 
full or no less than 80% immunity from the fine; the second company, 30% -50%;  the third, 
20%-30%; and others, no more than  20%.  
3.3.4.1.3   Dominant market positions  
3.178.   The AML and the SAMR's Interim Provisions on Prohibiting Abuse of Dominant Market 
Positions (SAMR Order No.  11, 26  June 2019) prohibit operators holding dominant market positions 
from certain types of conduct by abusing their dominant position.  For instance, these firms are 
prohibited from: (i)  selling products at unfairly high prices or purchasing products at unfairly low WT/TPR/S/ 415 • China  
 
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  prices159; (ii) selling products at prices below c osts without valid reasons; (iii)  refusing to deal with 
counterparts, or imposing anti -competitive conditions in transactions; (iv)  unreasonable product 
bundling; (v)  applying differential prices among counterparts on an equal footing; and (vi)  refusing 
counterparts access to essential facilities without justified reasons.  
3.179.   The Interim Provisions also make it clear that operators in the public utility sectors, such as 
water, electricity, gas, heating, telecommunications, cable television, postal services, an d 
transportation, should not abuse their dominant market position to hurt consumers.  
3.180.   Operators found to have violated relevant provisions may be subject to the confiscation of 
any unlawful gains and to fines of 1% -10% of the turnover achieved in the previo us year.  
3.3.4.1.4   Mergers and acquisitions  
3.181.   According to the AML, the Provisions of the State Council on Thresholds for Prior Notification 
of Concentrations of Undertakings (State Council Decree No.  529, 2008) and the SAMR's Interim 
Provisions on the Examination of Concentration of Undertakings (SAMR Order No.  30, 2020), all 
concentrations reaching certain thresholds must be notified to the SAMR for approval before any 
concentration activity takes place. Concentrations may take the form of merger, acquisition, or 
business control through contract. The notification thresholds are: (i)  a combined worldwide 
turnover of all concerned operators exceeding CNY  10 billion in the year preceding the merger, and 
an individual turnover in the mainland of China of at least two of the operators exceeding 
CNY 400 million; or (ii)  a combined turnover in the mainland of China of all concerned operators 
exceeding CNY  2 billion in the year preceding the merger, and an individual turnover in China of at 
least two operators exceeding CNY  400 million. In case the SAMR concludes that the proposed 
concentration has or could have the effect of eliminating or restricting competition, the SAMR will 
allow the notifying operator to submit additional written comments and materials to support their 
application.  
3.182.   Operators participating in a concentration proposal may submit to the SAMR a proposal with 
a commitment to implement certain remedies that would alleviate the anti -competitive effect. The 
SAMR may attach three types of remedies to an approved c oncentration: (i)  structural remedies 
requiring the disinvestment of tangible assets, IPRs, and other intangible assets, or relevant rights 
and interests, etc.; (ii)  behavioural remedies such as operators making available their respective 
networks, platfor ms, and other infrastructure; licensing key technologies (including patents, 
proprietary technologies, or other IPRs); and terminating exclusive agreements; and (iii)  a 
combination of structural and behavioural remedies. For concentrations approved subject  to 
additional conditions, relevant operators are obliged to report to the SAMR on how relevant 
conditions are fulfilled. The SAMR may monitor and check the fulfilment by itself or through a trustee. 
Trustees that have not fulfilled their monitoring obliga tions may face a fine of no more than 
CNY 30,000.  
3.183.   To facilitate notification, swift review procedures were established for cases that are defined 
as "simple cases". The relevant rules are contained in the SAMR's Interim Provisions on the 
Examination of Con centration of Undertakings and the SAMR Guiding Opinions on the Notification of 
Simple Cases of Concentration of Undertakings (as amended on 29  September  2018).160 The simple 
 
159 Article  14 of the Interim Provisions provides that consideration may be given to prices offered by 
different operators in the same market, prices offered by the same operator in the same or similar markets, 
and abnormal price fluctuation in relation to production cost . 
160 Article  17 of the SAMR's Interim Provisions on the Examination of Concentration of Undertakings 
(SAMR Order No.  30, 2020)  provides that a concentration shall be considered as a simple case when: (i)  in the 
same relevant market, the total market share of all business operators participating in the concentration is less 
than 15%; (ii)  an upstream -downstream relationship exists  among the business operators participating in the 
concentration, and the market share of such business operators in both the upstream and the downstream 
markets is less than 25%; (iii)  the business operators participating in the concentration are neither in the same 
relevant market nor have any upstream -downstream relationship, and their market share in each market 
relevant to the concentration is less than 25%; (iv)  the business operators participating in the concentration 
intend to establish a joint vent ure abroad, which will not engage in any economic activities within the territory 
of China; (v)  the business operators participating in the concentration intend to acquire the equity or assets of 
an overseas enterprise that does not engage in any economic activities within China; or (vi) a joint venture 
jointly controlled by two or more business operators will be controlled by one or more of the existing business 
operators after the concentration.  WT/TPR/S/ 415 • China  
 
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  cases shall be published on the SAMR website for 10 days for public comment. Simpl e cases require 
simpler documentation and less consultation and are intended to result in higher efficiency and 
shorter timelines.  
3.3.4.1.5   Administrative monopoly  
3.184.   The AML generally prohibits administrative organs or organizations empowered by law or 
administrative regulation to administer public affairs from abusing their administrative power to 
eliminate or restrict competition. On 26  June 2019, the SAMR issued the  Interim Provisions on 
Prohibiting Abuse of Administrative Power to Eliminate or Restrict Competition (SAMR Order No.  12, 
2019). The Interim Provisions further elaborate on the prohibitions defined in the AML. Under the 
provisions of the AML, remedies agai nst administrative monopoly consist of rectification orders by 
the superior authorities, together with punishment of officials in charge and other directly liable 
persons.  
3.185.   To address administrative monopolies, China continuously promoted fair competition r eview 
of all of its administrative policies and measures during the review period. The initiative started in 
2016 under the guidance of the State Council Opinions on Establishing a Fair Competition Review 
System in the Development the Market System (Guo Fa  No. 34, 2016). It aims to tackle 
anti-competitive issues such as local protectionism, regional market closure, barriers to market 
entry, and illegal preference polices, which are caused by inappropriate administrative measures of 
the Government. The mecha nism requires that all administrative rules, norms, and measures in 
relation to market access, industrial development, investment promotion, tendering activities, 
government procurement, business operation norms, and qualification criteria go through fair 
competition review before being introduced. Any administrative measures that have the effect of 
eliminating or restricting competition should not be put into place unless they fall into the exceptions 
prescribed by the State Council Opinions. In the course  of policy -making and fair competition review, 
the authorities should hear the viewpoints of stakeholders or collect public comments. In 2017, the 
NDRC, the MOF, MOFCOM, the SAIC, and the Legislative Affairs Office of the State Council jointly 
issued the D etailed Rules for the Implementation of the Fair Competition Review (Trial) (NDRC Notice 
Jia Jian No.  1849, 2017). The SAMR, the NDRC, the MOF, and MOFCOM jointly published the Notice 
on Clearing Policies and Measures that Impede the Single Market and Fair  Competition (SAMR 
Anti-Monopoly Notice No.  245, 2019) on 25  December  2019 and the Notice on Further Promoting 
Fair Competition Reviews (SAMR Anti -Monopoly Notice No.  73, 2020) on 9  May 2020. The latter 
requires that such clearing work be conducted periodi cally in the future. According to the authorities, 
1.89 million documents were examined in 2019 and 2020, and nearly 30,000 of them were abolished 
or revised.  
3.3.4.1.6   Enforcement  
3.186.   Following the institutional reform of 2018, the SAMR has been the main anti -monopoly 
enforcement agency in China. On 28  December  2018, the SAMR circulated the Notice on the 
Authorization of Anti -monopoly Law Enforcement (SAMR Anti -Monopoly Notice No.  265, 2018) that 
specifies the enforcement mechanism and the obligations of relevant author ities. According to the 
Notice, the SAMR is directly responsible for cross -provincial anti -monopoly cases, anti -competitive 
conduct of provincial governments involving abuse of their administrative power, and complicated 
cases and cases of nationwide signi ficance. The SAMR may delegate such responsibilities to 
provincial -level administrations. The SAMR may also ask provincial -level administrations to carry out 
investigations in specific cases on its behalf. These administrations are also responsible for 
anti-monopoly cases within their respective regions. The Notice also requires that enforcement 
agencies at different levels take a proactive approach in handling anti -monopoly cases and 
preventing anti -monopoly conduct. It also emphasizes the importance of co nsistent enforcement 
procedures and criteria, improving transparency in relevant cases, strengthening the capacity of 
enforcement agencies, and enhancing competition advocacy.  
3.187.   In December 2020, the SAMR published its first enforcement annual report, the 20 19 Annual 
Report on Anti -Monopoly Enforcement in China.161 According to the Report, in 2019, the SAMR and 
the provincial administrations for market regulation initiated 103 monopoly investiga tions, including 
28 cases on monopoly agreements, 15 on abuse of dominant market positions, 24 on abuse of 
administrative power, and 36 on illegal concentration of undertakings. Among those 103  cases, 
 
161 SAMR. Viewed at:  http://www.samr.gov.cn/xw/zj/202012/P020201224808232684415.pdf . WT/TPR/S/ 415 • China  
 
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  46 were closed, and fines totalling CNY  320 million were is sued. These cases mainly concerned the 
following industries: natural gas, pharmaceuticals, auto parts, milk powder, transportation, storage, 
and real property. Investigated undertakings include SOEs, FIEs, private companies, and industrial 
associations. Co ncerning concentration of undertakings, the SAMR received 503  notifications, 
investigated 462 cases, and concluded 465 cases. Among the closed cases, five were approved with 
conditions, accounting for about 1.1%. Decisions on monopoly cases and the reviews  of 
concentration cases are published on the SAMR website ( http://www.samr.gov.cn/fldj/tzgg/ ). The 
2019 Annual Report on Anti -Monopoly Enforcement also presented 11 typical anti -monopoly cases, 
covering different types of anti -monopoly conducts.  
3.3.4.1.7   International cooperation  
3.188.   China has been active in international cooperation in the area of competition policy. By 
mid-2020, China signed 53 international anti -monopoly cooperation documents with 32  countries 
and regions and established bilateral and multilateral anti -monopoly cooperation mechanisms. Since 
its establishment in 2018, the SAMR has signed bilateral memoranda of understanding (MOUs) on 
anti-monopoly cooperation with the competition authorities of the E uropean  Union, Japan, the 
Republic of Korea, Serbia, Belarus, the Philippines, and Morocco. China and the Russian  Federation  
renewed their MOU on the Implementation of the Agreement on Cooperation and Exchanges in 
Anti-monopoly and Anti -Unfair Competition (2020 -21). The SAMR extended the MOU on Cooperation 
with BRICS Countries in the Field of Competition Laws and Policies.162 China actively participated in 
the BRICS Competition Conference and furthered cooperation with BRICS countries in competition 
policy. China also carried out cooperation and coordination in many merger and monopoly agreement 
cases with its trade partners such as Canada, the European  Union, Germany, India, the 
United  States, the Russian  Federation , and South  Africa. China also participated  in the United 
Nations Conference on Trade and Development (UNCTAD) activities in the area of competition and 
consumer protection.  
3.189.   There are competition chapters in China's bilateral FTAs with seven separate countries, as 
well as the Regional Comprehensive  Economic Partnership (RCEP) Agreement and the Agreement 
on Economic and Trade Cooperation with the Eurasian Economic Union (EAEU). Discussions on such 
chapters are ongoing in the context of several other FTA or FTA upgrade negotiations, including 
those wi th Japan and the Republic of Korea, the Gulf Cooperation Council, Norway, the Republic of 
Moldova, Israel, and Peru.  
3.3.4.2   Price controls  
3.190.   There were no changes to the legislation concerning price controls  during the review period . 
Article  18 of the Price Law163 authorizes the competent authorities to carry out, when necessary, 
price controls over: (i)  products that have a significant bearing on the national economy and people's 
livelihoods; (ii)  a limited number of rare products; (iii)  products of natural monopoly ; (iv) key public 
utilities; and (v)  key public services. Laws and regulations on specific industrial/service sectors may 
also contain provisions on price administration that reaffirm that relevant business operators or 
service providers should follow the principles and rules set out by the Price Law. These laws and 
regulations include, inter alia, the Pharmaceutical Administration Law, the Railway Law, the Postal 
Law, the Compulsory Education Law, the Notary Law, the Decision of the Standing Committee of t he 
National People's Congress on the Administration of Judicial Authentication, the Civil Aviation Law, 
and the Commercial Bank Law. Laws and regulations related to price controls are summarized in 
Table  3.20. 
3.191.   Price controls take two forms: "government -set prices" or "government -guided prices". 
Government -set prices are fixed prices set by the competent authorities, while government -guided 
prices are prices set by business operators within a range of prices set by the competent pricing 
depart ments or other related government departments, within which the real price is allowed to 
fluctuate. The determination of government -set prices or government -guided prices varies according 
to the type of product or service. Consideration is usually given to  the market situation and average 
social costs, as well as economic, regional, and seasonal factors, and development and social needs.  
 
162 BRICS countries are Brazil, the Russian  Federation, India, China, and South  Africa.  
163 MOFCOM. Viewed at: 
http://english.mofcom.gov.cn/article/policyrelease/Businessregulations/201303/20130300046121.shtml . WT/TPR/S/ 415 • China  
 
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  Table 3.20 Department rules related to price controls, 2021  
Laws/regulatio ns 
Central Government Pricing Catalogue  NDRC Order No.  31, 2020  
Regulations on Government Pricing  NDRC Order No.  7, 2017  
Measures on Monitoring and Auditing the Costs in 
Government Pricing  NDRC Order No.  8, 2017  
Measures on Hearings in Government Pricing  NDRC Order No.  2, 2008  
Regulations on Prohibiting Low Price Dumping  State Planning Commissiona Order No.  2, 
1999 
Regulations on Prohibiting Price Fraud  State Planning Commission Order No.  15, 
2001 
Provisions on Price Monitoring  NDRC O rder No.  1, 2003  
Administrative Measures on the Price of Water Supplied by 
Conservancy Projects  NDRC and the Ministry of Water Resources 
Order No.  4, 2003  
a The State Planning Commission is the predecessor of the National Development and Reform 
Commission and was replaced by the latter in 2008 in the internal reorganization of the State 
Council.  
Source:  Information provided by the authorities.  
3.192.   The commodities and services subject to price controls are listed in a Central Government 
Pricing Catalo gue and in Local Government Pricing Catalogues compiled by the provinces, 
autonomous regions, and municipalities, and they approved by the State Council. The Catalogues 
are updated regularly. The current Central Government Pricing Catalogue was issued by t he NDRC 
on 13  March  2020 (NDRC Order No.  31, 2020) and came into effect on 1  May 2020.164 The previous 
Catalogue (NDRC Order No.  29, 2015) was replaced at the same time.  
3.193.   Products subject to government -set or -guided prices are listed in Table 3.21. Currentl y, less 
than 3% of the economy is covered by price controls.  
3.194.   Products and services subject to prices set or guided by local governments are summarized 
in Table 3.22.  
Table 3.21 Products/services subject to price controls by the Central Government, 2021  
Item  Pricing contents  Remarks  
Electricity 
transmission and 
distribution  Electricity transmission -distribution price at or 
above the provincial level   
Oil and gas 
pipeline 
transportation  Trans -provincial (autonomous region or 
municipality directly under the Central 
Government) pipeline transportation price  Except for the internal pipelines of 
enterprises  
Basic 
transportation  Railway 
transportation 
services  Hard sea t and hard sleeper 
passenger fares of ordinary 
passenger trains on railways 
wholly owned or controlled by 
the Central Government 
through stockholding  Powered car trainsets and newly 
built railway -passenger -dedicated 
lines controlled by social capital 
investment are not included in the 
pricing range.  
Bulk cargo and baggage 
transportation prices of the 
railways wholly owned or 
controlled by the Central 
Government through 
stockholding  The pricing range covers the 
transportation prices of coal, oil, 
grains, fertilizers, and other full -car 
loads of cargos and baggage, 
except for cargo transportation 
through newly built railways 
controlled by social capital 
investment.  
Port services  Service fees of the 
monopolistic services of the 
main ports alon g the coast 
and the main trunk of the 
Yangtze River and all the 
other ports open to vessels of 
foreign nationality  The pricing range covers the 
entering and leaving ports, and the 
berthing and departing of ships, 
port security, and other services.  
 
164 The Central Government Pricing Catalogue. Viewed at ：
https://www.ndrc.gov.cn/xxgk/zcfb/fzggwl/202003/t20200316_1223371.html . WT/TPR/S/ 415 • China  
 
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  Item  Pricing contents  Remarks  
Civil aviation 
services  Passenger fares for domestic 
civil air routes and domestic 
sections of international civil 
air routes not eligible for 
competition  Except for first -class and business -
class fares  
Fees of the monopolistic part 
of safeguard service s for civil 
aviation  The pricing range covers the service 
fees of the monopolistic services of 
civil airports and military and civil 
dual-use airports, flight inspection 
service fees of civil airlines, and 
civil air traffic management service 
fees. 
Water supply of 
major water 
conservancy 
projects  Prices for water supplied by trans -provincial 
(autonomous region or municipality directly 
under the Central Government) water 
conservancy projects directly under the Central 
Government  Except for the prices negotiated 
voluntarily between suppliers and 
demanders  
Important postal 
services  Mail delivery fees   Except for competitive fields 
(including volume weight -calculated 
packages)  Postal remittance fees  
Classified mail correspondence fees  
Fees for the distribution of newspapers and 
periodicals prescribed by the State  
Mailing fees of packages with the single weight 
of less than 10 kg   
Important 
professional 
services  Basic service charges of commercial banks, bank 
card transaction fees  The pricing range covers the basic 
services of commercial banks such 
as transfer and remittance, cash 
remittance and bills, and bank card 
transaction services (except for 
competitive links such as acquiring 
service fees).  
Special drugs and 
blood  Special drugs  Prices of narcotic drugs and 
the first category of 
psychotropic drugs   
Blood  Supply prices at blood banks 
of blood for clinical use by 
citizens   
Source:  Information provided by the authorities.  
Table 3.22 Products/services subject to price controls by local governments, 2020  
Product  Type of control/rationale  Regulation  
Environment 
protection charges  The compensated use and trading of pollutant 
discharge right and hazardous wastes disposal 
charges are subject to local government pricing 
regulation.  
Rationale: public utilities  Regulations on Urban Drainage 
and Sewage Treatment  
Urban household 
garbage disposal 
charges  Urban household waste charges are subject to 
local government pricing regulation.  
Rationale: public utilities  Circular on Implementing Urban 
Household Garbage Disposal 
Charges and Promoting Garbage 
Disposal Industrialization  
Sewage disposal 
charges  Sewage disposal charges are subject to local 
government pricing regulation.  
Rationale: public utilities  Measures for the Administration 
of Collection Standards for 
Pollutant Discharge Fees  
Real estate prices 
and charges of 
related services  Economical housing, low -price house rental, and 
property service charges are subject to local 
government -guided prices.  
Rationale: public service  Administrative Measures on 
Economical Housing  
Administrative Measures on Low -
price House Rental  
Entrance to state -
owned key 
sightseeing sites  Prices are subject to regulation of local 
government pricing or local government -guided 
prices.  
Rationale: public service  Tourism Law  
Source:  Information provided by the authorities.  
3.195.   The Government continues to implement the minimum procurement price (MPP ) policy in 
government procurements of unhusked rice and wheat in their main production areas so as to 
maintain stable prices. In October  2019, the Government announced that the MPP of wheat would WT/TPR/S/ 415 • China  
 
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  remain unchanged in 2020, with a total procurement volume o f 37 million tonnes. In February 2020, 
the Government announced that the MPP of unhusked rice would remain basically the same as in 
the previous year with a total government procurement volume of 50 million tonnes.  
3.3.5   State trading, state -owned enterprises, a nd privatization  
3.196.   China provided its last full notification on state trading enterprises (STEs) in 2018.165 The 
authorities indicate that a new notification would be submitted before mid-July 2021.  The legislation 
regulating state trading has not changed sin ce 2014, nor have the reasons for maintaining this 
practice or the products subject to it. According to the authorities, state trading remains in place to 
ensure a stable supply and price of the products concerned, ensure food security, and protect 
exhaust ible and non -recyclable natural resources and the environment.  
3.197.   STEs in China have the exclusive right to import or export the following products: wheat, 
maize, sugar, tobacco, rice, cotton, crude and processed oil, refined coal, chemical fertilizers, 
tungs ten and tungstate products, antimony, and silver. The authorities indicate that STEs in China 
operate following the market mechanism, with no government interference.  
3.198.   The authorities indicate that the following companies can be considered as STEs: China 
Tobacco International Inc., China National Offshore Oil Corporation, Sinochem Group, China 
International Petroleum and Chemicals Co. Ltd., China National Agricultural Means of Production 
Group Co., Chinatex Corporation Co. Ltd., and Xinjiang Yin Long Interna tional Agriculture 
Cooperation Co. Ltd.166 
3.199.   In China's economy, state ownership of companies is important and coexists with diverse 
forms of private ownership. State participation varies from wholly SOEs and majority state ownership 
to the State acting as an other shareholder. The authorities note that the preponderance of public 
ownership is upheld in China's economy; the State encourage the development of a mixed -ownership 
economy, which involves cross -ownership holdings and an integration between state -owne d, 
collective, non -public (private), and other types of capital. The private sector is dominant in 
industries such as clothing, food, and assembly for export, while companies are predominantly 
state-owned in sectors such as energy, utilities and transport,  and financial and telecom services. 
SOEs are divided into commercial entities and public welfare entities.  
3.200.   The authorities indicate that, while privatization of SOEs is not planned, progress has been 
achieved in mixed -ownership reform. According to the au thorities, in November 2020, the Central 
Commission for Comprehensive Reforms approved a new proposal for a structural plan of China's 
SOEs.  
3.201.   The number of state -owned industrial enterprises in the industrial sector increased slightly 
during the past years,  whereas their number in the construction sector fell (Table  3.23). Profits of 
industrial SOEs increased until 2018, but fell strongly in 2019. SOEs and their subsidiaries with 
mixed ownership also play an important role on the stock markets.  
3.202.   The State -Owned Asset Supervision and Administration (SASAC) is in charge of contributing 
capital to, and appointing top managers in, SOEs under its management. It acts as a representative 
of the Government and is directly subordinated to the State Council. In January 2021, the number 
of SOEs under SASAC's authority totalled 97 (compared with 98 in January 2018), 428 subsidiaries 
of which are listed on national or international stock exchanges. No information was available on the 
number of employees or total assets of t he companies controlled by SASAC. SOEs in the financial 
sector are controlled by the State Council and the MOF.  
3.203.   The legal status of SOEs varies from fully Government -owned entities to stock companies 
with the State or state agencies as the dominant stockho lder. Hence, many large and formally 
private companies that may even be traded on the stock market have the State as an important or 
major shareholder, through direct ownership or state investment vehicles. For example, Ping An 
 
165 WTO documents G/STR/N/16 -17/CHN, 24 July 2018.  
166 These companies are mentioned in WTO documents G/STR/Q1/CHN/9 and G/C/W/749, 13 December 
2017.  WT/TPR/S/ 415 • China  
 
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  Insurance, China's biggest i nsurance company, has Shenzhen Investment as its single largest 
shareholder, and several other state entities also own significant portions of the company.167 
Table 3.23 SOEs  in China's economy, 2013 -19 
Sector  2013  2014  2015  2016  2017  2018  2019  
Industrial sectora        
Number of total enterprises  369,813  377,788  383,148  378,599  372,729  378,440  377,815  
Number of SOEsb 18,574  18,808  19,273  19,022  19,022  18,670  20,683  
 % of SOEs  5.0  5.0  5.0  5.0  5.1  4.9  5.5 
Total assets (CNY billion)  87,075  95,678  102,340  108,587  112,191  113,438  120,587  
Total assets of SOEsb (CNY billion)  34,399  37,131  39,740  41,770  43,962  43,991  46,968  
  % of SOEs 39.5  38.8  38.8  38.5  39.2  38.8  38.9 
Total profits (CNY billion)  6,815  6,815  6,619  7,192  7,492  6,635  6,580  
Total profits of SOEsb (CNY billion)  1,592  1,451  1,142  1,232  1,722  1,858  1,607  
 % of SOEs  23.4  21.3  17.2  17.1  23.0  28.0  24.4 
Construction        
 
Number of enterprises  78,919  81,141  80,911  83,017  88,074  95,400  .. 
Number of SOEs  3,847  3,753  3,603  3,593  3,453  3,080  .. 
  % of SOEs  4.9  4.6  4.5  4.3  3.9  3.2  .. 
Gross output value (CNY billion)  16,037  17,671  18,076  19,357  21,394  23,509  .. 
Gross output value of SOEs (CNY billion)  2,074  2,207  2,177  2,385  2,641  2,626  .. 
  % of SOEs  12.9  12.5  12.0  12.3  12.3  11.2  .. 
.. Not available.  
a Including mining, manufacturing, and production and supply of electricity, gas, and water.  
b Numbers referring to SOEs including state -holding enterprises.  
Source:  National Bureau of Statistics, China Statistical Yearbook  (various issues).  
3.204.   Of China's 10 largest SOEs, 3 are under SASAC's supervision (Table 3.24). The State remains 
a majority shareholder in 16 of the 100 largest publicly listed Chinese companies.  
Table 3.24 China's 10 largest stat e-owned enterprises, 2020  
(USD billion)  
Company name  Revenue  
SINOPEC  Groupa 407.0 
State Grid  383.9 
China National Petroleuma 379.1 
China State Construction Engineeringa 205.8 
Industrial & Commercial Bank of China  177.1 
China Construction Bank  158.9 
Agricultural Bank of China  147.3 
Bank of China  135.1 
China Life Insurance  131.2 
SAIC Motor 122.1 
a Controlled by SASAC.  
Source:  Fortune Global 500.  
3.205.   SOEs are very important in China's economy, in particular for the Government's employment 
and social and regional policy objectives. While no official figures exist on employment in SOEs and 
their share in GDP, an academic study estimated that in 2017 their sh are in GDP was between 23% 
and 28%, and that their share in employment was between 5% and 16%.168 According to the IMF, 
the productivity of China's SOEs is generally low compared with that of privately owned companies; 
the average productivity gap between S OEs and private companies is estimated at about 20%.169 
 
167 The authorities state that China's state -owned enterprises are all legal persons established in 
accordance with the Company Law and are not part of the Government. According to the authorities, based on 
commercial considerations, state -owned enterprises make independent decisions to make equity participation 
into private enterprises including large listed private companies.  
168 Zhang, C. (2019), How Much Do State -Owned Enterprises Contribute to China's GDP and 
Employment? , World Bank document . For the industrial sector, it has been estimated that SOEs in 2017 made 
up 18% of employment, 39% of assets, and 23% of sales revenue. Viewed at: 
http://documents1.worldbank.org/curated/en/449701565248091726/pdf/How -Much-Do-State -Owned -
Enter prises -Contribute -to-China -s-GDP-and-Employment.pdf . 
169 IMF (2021): People's Republic of China, Staff Report for the 2020 Article  IV Consultation , IMF 
Country Report No.  21/6. Viewed at: https://www.imf.org/en/Publications/CR/Issues/2021/01/06/Peoples -
Republic -of-China -2020-Article -IV-Consultation -Press -Release -Staff-Report -and-49992 . WT/TPR/S/ 415 • China  
 
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  The authorities state that they do not agree with the IMF's conclusion. The IMF also suggests that 
SOE reform would significantly lift productivity and growth.  
3.206.   The importance of SOEs in China's economy , coupled with high amounts of financial support, 
may affect the functioning of market -oriented policies and practices. It would appear that SOEs in 
China often benefit from credits extended by state banks or other forms of financing, implicit 
guarantees, capital injections, and preferential access to inputs. The authorities object to this 
statement and indicate that SOEs in China operate under market conditions, with no privileges 
granted by the Government.  
3.207.   It would appear that the China Structural Reform Fund, set up by 10 SOEs in 
September  2016, aims to optimize the management of Central Government enterprises, through 
the financing of SOE restructuring, overseas mergers and acquisitions, and capacity adjustment, 
with a view to enhancing industrial integr ation and improving the performance and efficiency of 
capital operations. The authorities state that the Fund is established, invested, and operated in a 
market -oriented manner. According to the authorities, no information is available on the paid -in 
capital of the Fund.  
3.208.   In July 2020, China established a bailout fund with a fundraising target of CNY  100 billion to 
provide emergency funding for SOEs short on cash in order to avoid possible defaults. The authorities 
indicate that the Fund is a market -based cr edit safeguard fund for central SOEs. No information was 
available on the fund's filling rate or disbursements.  
3.209.   The AML stipulates that for SOEs legally enjoying exclusive rights in production and sales or 
activities in sectors considered vital for China's  economy and to safeguard national security, the 
State shall, in order to protect the consumer interest and facilitate technological advancement: 
(i) protect these business operations; and (ii)  supervise and control these business operations and 
the prices  of relevant services and commodities provided by these operators (Section  3.3.4). 
3.3.6   Government procurement  
3.3.6.1   Overview  
3.210.   According to data provided by the authorities, the total value of  government procurement in 
China was CNY  3.3 trillion in 2019 (the latest ye ar for which data were made available), accounting  
for 3.3% of GDP (Table  3.25).  The majority of procurement takes place at the sub -Central 
Government level. Procurement by local entities accounted for 91.9% of China's total value of 
government procurement  in 2019; in the same year, procurement by the Central Government 
accounted for 8.1%.170 
Table 3.25 Government procurement by type of purchase, 2017 -19 
(CNY billion)  
 2017  2018  2019  
TOTAL  3,211.4  3,586.1  3,306.7  
Goods  800.2  806.5  860.7  
Central Government entities  110.4  122.9  146.4  
Local government entities  689.8  683.6  714.3  
Construction and engineering services  1,521.1  1,571.4  1,500.4  
Central Government entities  52.0 60.4 67.5 
Local government entities  1,469.1  1,511.0  1,432.9  
Other services  890.2  1,208.1  945.5  
Central Government entities  28.9 40.7 52.7 
Local government entities  861.3  1,167.5  892.9  
Total procurement by the Central Government  191.3  224.0  266.6  
Total procurement by local government entities  3,020.2  3,362.1  3,040.0  
Source:  Information provided by the authorities.  
 
170 Among the  31 provincial -level governments that report procurement data to the Central 
Government, the top 10 provinces/municipalities in terms of government procurement contract value are 
Guangdong, Shandong, Jiangsu, Henan, Zhejiang, Anhui, Sichuan, Shanghai, Guan gxi, and Hebei.  WT/TPR/S/ 415 • China  
 
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  3.3.6.2   Legal and institutional framework  
3.211.   There have been no major changes to China's legislative and regulatory regime concerning 
government procurement since the previous Review. The Government Procurement Law remains the 
primary legislation regulating government procurement activities.171 It app lies to procurements of 
goods, services, and construction works by state organs, public institutions, and social 
organizations.172 The Government Procurement Law does not apply to SOEs ; a large number of 
infrastructure projects and public utility works carr ied out by SOEs are therefore excluded from the 
scope of application of the Government Procurement Law. Furthermore, Article  4 of the Government 
Procurement Law provides that the construction works that fall within its definition of government 
procurement,  i.e. those works procured by state organs, public institutions, and social organizations 
(and not SOEs), must follow the tendering procedures set out by the Tendering Law when tendering 
is used as the procurement method. In all events, such construction w orks must still follow other 
policy requirements set out by the Government Procurement Law. The Tendering Law regulates 
tendering procedures regardless of whether the tendering concerns a project of a government 
agency or an SOE. Furthermore, according to the Government Procurement Law, the Central Military 
Commission issues separate regulations concerning military procurement and administrates their 
enforcement.  
3.212.   Both the Government  Procurement Law and the Tendering Law are currently under 
amendment. The draft amended Bid Invitation and Tendering Law was published online for public 
comment from 3  December  2019 to 1  January  2020.173 A further revised draft reflecting those public 
comments has been submitted to the State Cou ncil for review. At present, the Ministry of Justice is 
organizing a legislative review of the draft amendments. According to the Explanatory Note on the 
Draft174, the amended Tendering Law will, inter alia : (i) redefine its scope of application and 
deregul ate tendering activities in private investments; (ii)  enhance transparency of tendering 
activities; (iii)  adjust the time periods in tendering procedures in order to improve efficiency; 
(iv) restrict the use of lowest price criteria in tender evaluation an d encourage life -cycle cost 
assessment; (v)  promote e -tendering; (vi) clarify tendering requirements in public -private 
partnership (PPP) projects; and (vii) enhance anti -collusion in tendering and the monitoring of 
contract performance. The draft amended G overnment Procurement Law was published online for 
public comment from 4  December  2020 to 5  January  2021.175 According to its Explanatory Note, the 
amended Government Procurement Law will, inter alia : (i) adjust the scope of application of the 
Government Pr ocurement Law176; (ii) give full play to the policy goals of government procurement 
policy by including provisions on promoting innovation and safeguarding the interest of vulnerable 
groups, and specify relevant competent authorities and implementation meas ures; (iii)  improve and 
clarify government procurement methods and procedures; (iv)  improve the system of government 
procurement contracts; (v)  strengthen demand management in government procurement; 
(vi) enhance the position of procuring entities; and (vi i) simplify supplier qualification procedures. 
According to the authorities, the revision of the two  Laws will further align China's government 
procurement and tendering administration systems and harmonize the application of the two Laws.  
3.213.   The MOF and loca l financial departments at different levels of the government are the 
competent authorities to apply the Government Procurement Law. The NDRC and the Development 
and Reform Commissions at the sub -central levels of the government are authorities that guide and 
coordinate the implementation of the Tendering Law. They have issued various measures and 
 
171 For more information on the Government Procurement Law, the Tendering Law, and their respective 
Implementing Regulations, see WTO document WT/TPR/S/375/Rev.1, 14  September  2018, paras.  3.191 -
3.192.  
172 According to the authorities, "state organs" include organs of state power , administrative organs, 
judicial organs, procuratorial organs, and military organs. The term "public institutions" refers to public service 
organizations that are established by st ate organs or other organizations established by state -owned assets to 
carry out activities in the fields of education, science and technology, culture, and hygiene. There is no 
definition of "social organizations" in China's legal system.  
173 NDRC. Viewed a t: https://www.ndrc.gov.cn/hdjl/yjzq/yjfk/zbtbf/202001/t20200103_1218432.html . 
174 The Explanatory Note on the Draft was published together with the draft amended Law.  
175 Ministry of Finance. Viewed at: 
http://tfs.mof.gov.cn/zhengcefabu/202012/t20201204_3632547.htm . 
176 The amended draft Law provides that government procurement refers to the act  of obtaining goods, 
construction works, and services by state organs, public institutions, social organizations, and other procuring 
entities, for the purpose of fulfilling government affairs and public services, via contract means with fiscal funds 
or other public resources.  WT/TPR/S/ 415 • China  
 
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  guidelines to implement the two Laws and their Implementation Regulations. The departments 
responsible for industry and information technology, housing and urban -rural development, 
transport, railways, water resources, commerce, and civil aviation under the State Council issued 
their own administrative measures and/or guidelines on the application of the two  Laws. The SASAC 
and local state -owned assets supervision and administration departments at different levels of the 
government guide SOEs to improve their internal control systems and regulate their operation from 
an investor representative's perspective so as to ensure their full compliance with relevant laws, 
regulations, and institutional requirements. Table 3.26 provides a list of major government 
procurement -related laws, regulations, and administrative measures applicable nationwide.  
Table 3.26 Government procur ement -related laws, regulations, and administrative 
measures  
Law/Regulation  Promulgation 
year Latest 
amendment  
Government Procurement Law  2002  2014  
Regulations for the Implementation of the Government Procurement 
Law 2015  
Administrative Measures on Tendering for Government Procurement 
of Goods and Services  MOF Order 
No. 18, 2004  MOF Order 
No. 87, 2017  
Administrative Measures on Government Procurement by Non -Bid 
Procurement Methods  MOF Order 
No. 74, 2013   
Measures for the Administration  of Government Procurement of 
Imported Products  MOF Notice Cai Ku 
No. 119, 2007   
Administrative Measures on Release of Government Procurement 
Information  MOF Order 
No. 19, 2004  MOF Order 
No. 101, 2019  
Measures on Government Procurement Challenges and Complaints  MOF Order 
No. 20, 2004  MOF Order 
No. 94, 2017  
Administrative Measures on Government Procurement of Public -
Private Partnership Projects  MOF Notice Cai Ku 
No. 215, 2014   
Measures on Promoting the Development of Small and Medium 
Enterprises through Government Procurement  MOF Notice Cai Ku 
No. 46, 2020   
Notice of the Ministry of Finance, the National Development and 
Reform Commission, the Ministry of Ecology and Environmen t and 
the State Administration for Market Regulation on Adjusting and 
Optimizing Execution Mechanisms for Government Procurement of 
Energy -saving Products and Environmentally Labelled Products  MOF Notice Cai Ku 
No. 9, 2019   
Notice of the Ministry of Fin ance and the Ministry of Ecology and 
Environment on Environmentally Labelled Product Categories and 
Items for Government Procurement  MOF Notice Cai Ku 
No. 18, 2019   
Notice of the Ministry of Finance and the National Development and 
Reform Commission on Energy -Saving Product Categories and Items 
for Government Procurement  MOF Notice Cai Ku 
No. 19, 2019   
Notice of  the Ministry of Finance on  Promoting Fair Competition and 
Optimizing the Business Environment in Government  Procurement  MOF Notice Cai Ku 
No. 38, 2019   
Notice of  the Ministry of Finance on  the Public Disclosure of 
Government Procurement Intentions  MOF Notice Cai Ku 
No. 10, 2020   
Notice of the General Office of the Ministry of Finance on  Printing and 
Issuing the Standard Format for Government Procurement 
Announcements and Publicizing Information (2020)  MOF Notice Cai 
Ban Ku No.  50, 
2020  
Tendering Law  1999  2017  
Regulations for t he Implementation of the Tendering Law  2011 2017, 2018, 
and 2019  
Provisions on Construction Projects Subject to Mandatory Tendering  NDRC Order 
No. 16, 2018   
Provisions on Infrastructure and Utilities Projects Subject to 
Mandatory Tendering  NDRC Order Fa 
Gai Fa Gui 
No. 843, 2018   
Notice on Improving the Implementation of the Provisions on 
Construction Projects Subject to Mandatory Tendering and the 
Provisions on Infrastructure and Utilities Projects Subject to 
Mandatory Tendering  NDRC Notice  Fa 
Gai Ban Fa Gui 
No. 770, 2020   
Administrative Measures for Franchising Projects in Infrastructure 
and Public Utilities  NDRC Order 
No. 25, 2015   
Interim Provisions on Bid Evaluation Committees and Bid Evaluation 
Methods  SDPC  Order 
No. 2, 2001   
Measures for Electronic Tendering  Order No.  20 of 
eight ministries, 
2013  WT/TPR/S/ 415 • China  
 
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  Law/Regulation  Promulgation 
year Latest 
amendment  
Measures for Handling Complaints about Tendering Activities in 
Engineering Construction Projects  Order No.  11 of 
seven ministries, 
2004  
Measures for Goods Tendering in Engineering Construction Projects  NDRC Order 
No. 27, 2005   
Measures for Surveying and Designing Tendering in Engineering 
Construction Projects  Order No.  2 of 
eight ministries, 
2003  
Measures for Construction Tendering in Engineering Co nstruction 
Projects  Order No.  30 of 
seven ministries, 
2003  
Measures for the Administration of Bid Evaluation Experts and 
Comprehensive Bid Evaluation Experts Databases  SDPC Order 
No. 29, 2003   
Administrative Measures for Tendering Announcement and Release of 
Public Information  NDRC Order 
No. 10, 2017   
Interim Provisions on Standard Documents of Prequalification and 
Tendering in Engineering Construction Projects  NDRC Order 
No. 56, 2007   
Notice of National Development and Reform Com mission, Ministry of 
Industry and Information Technology, Ministry of Finance, Ministry of 
Housing and Urban -Rural Development, Ministry of Transport, 
Ministry of Railways, Ministry of Water Resources, National Radio and 
Television Administration and Civil  Aviation Administration of China 
on Printing and Distributing Concise Standard Construction Tendering 
Documents and Standard Designing Construction General Contract 
Tendering Documents  NDRC Notice Fa 
Gai Fa Gui 
No. 3018, 2011   
Notice on Printing and Distributing Five Standard Tendering 
Documents Including the Standard Equipment Procurement 
Tendering Document  NDRC Notice Fa 
Gai Fa Gui 
No. 1606, 2017   
Budget Law  1994  2014 and 
2018  
Regulations for the Implementation of the Budget Law  1995 2020 
Civil Code  2021   
Source:  Information provided by the authorities . 
3.214.   The Regulations for the Implementation of the Tendering Law were amended in 2017, 2018, 
and 2019. The 2017 Revision deleted the content regarding the professional qualification for 
tendering personnel; the 2018 Revision deleted the content regarding the qualification for the 
tendering agency; and the 2019 Revision removed the requirement for financial departments to 
supervise the budgetary performance of government procurement construction projects that are 
subject to tendering. According to the authorities, those Revisions have exerted no impact on trade. 
The Admin istrative Measures on Release of Government Procurement Information was amended in 
2019 (MOF Order No.  101, 2019). The new Measures further strengthen the information release 
system and provide that a  designated Internet media is the principal channel for publishing 
government procurement information. They specify that the Government Procurement website 
( www.ccgp.gov.cn  ) and its subordinate provincial -level websites should serve as the platform for 
the collection and  publication of government procurement information. They also emphasize 
enhanced enforcement of relevant rules in this regard.  
3.215.   The authorities have also been promoting the use of PPPs in investments in infrastructure 
and public utilities. Franchising is th e main form of PPP in China.177 Article  15 of the Administrative 
Measures for Franchising Projects in Infrastructure and Public Utilities (NDRC Order No.  25, 2015) 
provides that franchisees should be selected through competition. The NDRC Notice on 
Strength ening the Administration of the Investment and Construction of PPP Projects in Accordance 
with Laws and Regulations (NDRC Notice Tou Zi Gui No.  1098, 2019) further specifies that public 
tendering should be the main method in selecting franchisees. Franchis ees who are selected through 
tendering procedures and have the capacity to implement the projects on their own can carry out 
the projects by themselves without going through tendering procedures again. The Administrative 
 
177 Article  3 of the Administrative Measures for Franchising Projects in Infrastructure and Public Utilities 
(NDRC Order No.  25, 2015)  defines franchising as agreements between the Government and legal persons or 
other organizations, either domestic or foreign, under which the latter invest, build, and operate infrastructure 
and public utilities to provide public goods and services withi n certain periods and geographical areas. The 
agreements define rights and obligations of the Government and the franchisees and risk distribution between 
the two. Franchisees are entitled to gain profits from such projects.  WT/TPR/S/ 415 • China  
 
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  Measures on Government Procurement of Public -Private Partnership Projects (MOF Notice Cai Ku 
No. 215, 2019) apply to PPP projects. Foreign investors are allowed to participate in PPP projects 
and, according to the authorities, there are already numerous such cases in practice.  
3.216.   The administr ative measures on promoting green procurement and SMEs' participation in 
government procurement were also amended in 2019 and 2020 (Section 3.3.6.4).  
3.217.   The authorities note that China does not introduce special policies for government 
procurement activities under the BRI, including economic corridor projects. China does not have 
special government procurement policies in its PFTZs either.  
3.3.6.3   Procurement methods and e -procurement  
3.218.   During the review period, there were no changes to the procurement methods and 
proce dures.178 The Government Procurement Law, its Implementing Regulations, and relevant 
Administrative Measures provide for six procurement methods: (i)  public tendering; (ii)  selective 
tendering; (iii)  price inquiry ; (iv)  competitive negotiations; (v) competitive consultations; and 
(vi) single -source procurement. According to data provided by the authorities, in 2019, procurement 
through public tendering accounted for 78.31% of total procurement, selective tendering for 0.99%, 
price inquiry for 1.41 %, competitive negotiations for 3.55%, and single -source procurement for 
6.19%. The value under single -source procurement decreased from CNY  552.7  billion in 2017 to 
CNY 204.6 billion in 2019 (Table  3.27).  
Table 3.27 Government procurement by procurement method, 2017 -19 
(CNY billion ) 
Year Procurement method  
Total  Public 
tendering  Selective 
tendering  Price 
inquiry  Competitive 
negotiations  Competitive 
consultations  Single -
source 
procurement  
2017 3,211.4  2,170.1  24.9 73.9 133.0  180.8  552.7  
2018 3,586.1  2,528.8  39.4 83.6 129.6  298.7  423.3  
2019 3,306.7  2,589.6  32.6 46.7 117.5  204.7  204.6  
Source:  Information provided  by the authorities.  
3.219.   With regard to e -procurement, China planned to fully implement e -tendering by end -2020. 
In 2017, six ministries jointly issued the "Internet + Tendering/Procurement" Action Plan (2017 -19) 
(NDRC Notice No.  357, 2017). In 2019, the MOF issued the new Administrative Measures on Release 
of Government Procurement  Information (MOF Order No.  101, 2019). The old Measures (MOF Order 
No. 19, 2004) were repealed at the same time. All government procurement notices and relevant 
information should be published in the standard format announced by the MOF in 2020 (Cai Ban Ku 
No. 50, 2020). The NDRC Administrative Measures for Tendering Announcement and Release of 
Public Information (NDRC Order No.  10, 2017) also require that tendering notices and other relevant 
information of a project subject to mandatory  tendering be published on the China Tendering Public 
Service Platform or the provincial e -tendering platforms. The State Council further requires that all 
such information, upon publication, should also be transferred to and published in real time on the 
National Public Resources Trading Platform.179 According to the authorities, most regions and most 
industrial areas have fully implemented e -tendering.  
3.220.   To enhance predictability of government procurement and facilitate suppliers' awareness of 
market opportu nities, the MOF issued a Notice on Disclosure of Future Government Procurement 
Plans (MOF Notice Cai Ku No.  10, 2020), which requires that all procuring entities should disclose 
their procurement plans in advance where possible. The MOF notes that, during the review period, 
it organized a third -party evaluation of the work of local governments regarding the disclosure of 
 
178 For more information on the p rocurement methods and procedures, see WTO document 
WT/TPR/S/375/Rev.1, 14  September  2018, paras.  3.197 -3.207.  
179 The National Public Resources Trading Platform is the general hub for sharing public resources 
trading data in China. Information published on this platform contains, but is not limited to, government 
procurement. It also collects and publishes information on transactions of land use rights, mining rights, and 
state-owned property rights.  WT/TPR/S/ 415 • China  
 
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  information about government procurement. The evaluation shows that the transparency of 
government procurement has been significantly impr oved across the country.  
3.3.6.4   Other policy considerations in government procurement  
3.221.   China maintains buy -national policies in government procurement. Article  10 of the 
Government Procurement Law provides that unless the subject matter cannot be obtained within 
the territory of China or cannot be obtained with reasonable commercial terms, or the procurement 
is for use outside the territory of China, the procuring entities shall procure domestic goods, services, 
and construction works.  The Measures for the Administ ration of Government Procurement of 
Imported Products (Cai Ku No.  119, 2007) further require that in each specific case, the conditions 
that allow procurement of imported products need to be verified by the financial authorities.  
3.222.   It is also noted that the buy -national requirement does not apply to procurements by SOEs, 
as they are not considered as government procurement in China and are not bound by the 
Government Procurement Law. Therefore, the authorities state that there is no differential treatment 
of foreign goods, services, and suppliers in SOEs' procurements, including those in the areas of 
infrastructure and public utilities. In addition, Article  16 of the new Foreign Investment Law (FIL) 
(promulgated in March  2019) provide s that "the State shall guarantee that foreign -invested 
enterprises can participate in government procurement activities through fair competition; products 
produced and services provided by foreign -invested enterprises within the territory of China shall b e 
treated equally in government procurement".  
3.223.   Furthermore, Article  9 of the Government Procurement Law provides that government 
procurement shall be carried out to facilitate the realization of the economic and social development 
policy goals of the State,  including environmental protection, assistance to underdeveloped or ethnic 
minority regions, and promoting the development of SMEs. According to the authorities, SMEs 
became more active in participating in government procurement activities in the past 10 years. More 
than 70% of China's government procurement in value terms is currently performed by SMEs.180 To 
address issues arising in the implementation of previous Measures181, China issued the new Measures 
on Promoting the Development of Small and Medium E nterprises through Government Procurement 
(MOF Circular Cai Ku No.  46, 2020) on 18  December  2020.182 The new Measures came into force on 
1 January  2021, and the previous Measures ceased to apply at the same time. Compared with the 
previous measures, the new  Measures provide more details on the SME contract set -aside policy. 
They require that, in principle, small -value contracts, i.e. goods and services contracts below 
CNY 2 million and construction work contracts below CNY  4 million, be set aside for SMEs. F or 
contracts above the aforementioned thresholds, no less than 30% of them in value terms should be 
performed by SMEs. In contracts set aside for SMEs, no less than 60% should be performed by small 
and micro enterprises. The goal shall be achieved through contract set -asides, contract splitting, 
consortium bidding, or subcontracting. As regards the grant of price preferences to SMEs, the new 
Measures maintain the preference margins for procurements where the tender evaluation is based 
on the lowest price cr iterion.183 Additionally, they set out rules on granting preferences to SMEs in 
the procurement of construction works where the tender evaluation is based on the criterion of the 
 
180 Ministry of Finance. Viewed at: 
http://gks.mof.gov.cn/guizhangzhidu/202012/t20201228_3637423.htm . 
181 Interim Measures on Promoting the Development of Small and Medium Enterprises through 
Government Procurement (MOF Circular Cai Ku N o. 181, 2011). For more information about policies in favour 
of SMEs under the previous Interim Measures, see WTO document WT/TPR/S/375/Rev.1, 14  September  2018, 
para. 3.212.  
182 Ministry of Finance. Viewed at: 
http://gks.mof.gov.cn/guizhangzhidu/202012/t20201228_3637419.htm . 
183 In tender evaluation for procurement of goods and services, the tender submitted by a small or micro 
enterprise will compete with other tenders based on a  price 6% -10% lower than the original price offered by it. 
When the contract is delivered, it will be paid the full original price. For procurement of construction works, the 
price preference margin is 3% -5%. For joint tendering where small or micro enterp rises' share accounts for 
more than 30% of the contract value and for a large enterprise that intends to subcontract more than 30% of 
the contract value to small or micro enterprises, the tender will benefit from a price preference margin of 
2%-3% for proc urement of goods and services, and 1% -2% for procurement of construction works.  WT/TPR/S/ 415 • China  
 
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  most advantageous tender.184 The new Measures also contain provisions to suppor t SMEs through 
contract payment and credit guarantees.  
3.224.   With regard to environmental protection, China maintains policies to provide more 
favourable treatment to energy -saving products and environmentally friendly products in 
government procurement. Such po licies were first introduced in 2004 and 2006. During the review 
period, China adjusted implementation measures in this regard. Spe cifically, in 2019, the  MOF, the 
NDRC, the MEE, and the SAMR jointly issued a Notice on Adjusting and Optimizing Execution 
Mechanisms for Government Procurement of Energy -Saving Products and Environmentally Labelled 
Products (Cai Ku No.  9, 2019).185 Under the old measures,  relevant authorities published not only 
the catalogues but also the lists of brands and models that had been granted conformity certificates 
for such purposes.186 Under the new measures, the authorities publish only the generic catalogues 
and energy conser vation and environment protection standards187, and not the lists of brands and 
models. Product brands and models that have been granted certificates by recognized certification 
agencies are eligible for favourable treatment in government procurement. Accor ding to the 
authorities, such adjustments made it unnecessary for suppliers to apply for being included on the 
list and provide more equal opportunities for suppliers. The new Measures also enhance the 
obligation of procuring entities to implement such pol icies. 
3.225.   In addition, in 2020, relevant authorities published green packaging standards and green 
express mail packaging standards relating to government procurement. Procuring entities are 
required to specify in their procurement documentation that the pack aging should be recyclable, 
organic, and renewable.188 
3.226.   The authorities note that, during the review period, no specific government procurement 
policies were introduced to promote innovation.  
3.3.6.5   COVID‑19-related government procurement measures  
3.227.   To address the CO VID‑19 pandemic, China established "green channels" for government 
procurement in relation to the prevention and control of the pandemic. On 26  January  2020, the 
MOF circulated the Notice on Facilitating Procurement for Pandemic Prevention and Control (Cai  Ban 
Ku No.  23, 2020) which requires that state organs, public institutions, and social groups at all levels 
should open "green channels" for the procurement of goods, services, and construction works for 
pandemic prevention and control.189 The Notice also requires that sound internal control mechanisms 
be established and maintained for emergency procurement. On 6  February  2020, the MOF circulated 
the Notice on Government Procurement -related Matters during the Period of Pandemic Prevention 
and Control (Cai B an Ku No.  29, 2020).190 This Notice focuses on the protection of the health and 
 
184 For procurement of construction works where the tender evaluation is based on the criterion of the 
most advantageous tender (not the lowest price), the tender submitted by sm all and micro enterprises will 
benefit from a 3% -5% mark-up in its price points. For joint tendering where small or micro enterprises' share 
accounts for more than 30% of the contract value and for a large enterprise that intends to subcontract more 
than 3 0% of the contract value to small or micro enterprises, such a tender will benefit from a 1% -2% 
mark-up in its price points.  
185 Ministry of Finance. Viewed at: 
http://gks.mof.g ov.cn/guizhangzhidu/201902/t20190212_3146226.htm . 
186 For more information about the previous measures, see WTO document WT/TPR/S/375/Rev.1, 
14 September  2018, para.  3.213.  
187 The product lists are published through the joint Notice of the Ministry of Finance  and the Ministry of 
Ecology and Environment on Environmentally Labelled Product Categories and Items for Government 
Procurement (Cai Ku No.  18, 2019) and the joint Notice of the Ministry of Finance and the National 
Development and Reform Commission on Ene rgy-saving Product Categories and Items for Government 
Procurement (Cai Ku No.  19, 2019).  
188 These measures are contained in the joint Notice of the Ministry of Finance General Office, the 
Ministry of Ecology and Environment General Office, and the State Po st Bureau General Office on Commodity 
Packaging Standards for Government Procurement (Trial Edition) and the Express Mail Packaging Standards for 
Government Procurement (Trial Edition) (Cai Ban Ku No.  123, 2020).  
189 Ministry of Finance. Viewed at: 
http://gks.mof.gov.cn/guizhangzhidu/202001/t20200126_3464030.htm . 
190 Ministry of Finance. Viewed at: 
http://gks.mof.gov.cn/guizhangzhidu/202002/t20200207_3466846.htm . WT/TPR/S/ 415 • China  
 
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  safety of procurement professionals and suppliers during the pandemic and encourages the use of 
electronic means in government procurement.  
3.3.6.6   Supplier complaint mechanism  
3.228.   The supp lier complaint mechanism remained unchanged during the review period.191 The 
Government Procurement Law and the Measures for Handling Challenges and Complaints against 
Government Procurement  (MOF Order No.  94, 2017) require that the finance authorities at d ifferent 
levels of government review suppliers' complaints regarding government procurement activities at 
their respective levels.192 The results of complaint reviews  are published in designated media.  
3.3.6.7   Accession to the GPA and other international cooperation  
3.229.   China became an Observer in the WTO Committee on Government Procurement in 2002. It 
initiated its GPA accession negotiation in 2007. During the review period, significant progress was 
made on the accession. China submitted its 6th revised market access offer on 20  October  2019.193 
The new offer, for the first time, included non -sensitive military procurement. It also added 
seven  provinces and municipalities, 16 SOEs, and 36 local universities. No minority autonomous 
regions at the p rovincial level were included in the new offer, and some SOEs in the infrastructure 
and public utility sectors are missing. Some services sectors are not included in the offer. On 
29 May 2020, China circulated its updated Replies to the Checklist of Issues , which contain 
comprehensive information on China's government procurement regime.194 Consultations continue 
between China and GPA Parties to address the remaining issues in the accession process.  
3.230.   China has not included any market access commitments in the  area of government 
procurement in the context of any of the FTAs that it has negotiated with trading partners. According 
to the authorities, it remains China's priority to conclude its GPA accession before liberalizing its 
government procurement market th rough bilateral/regional tracks.  
3.3.7   Intellectual property rights  
3.3.7.1   Overview  
3.231.   During the review period, China's intellectual property (IP) regime and institutional 
framework continued to evolve, adjusting to technological developments and new business practices. 
China also made efforts to mainstream IP into its economy and adjust its programmes to enhance 
their effectiveness and compliance with international commitments.  
3.232.   In 2019, China was recognized as one of the top four economies in innovation capabi lity.195 
In 2020, China was the 8th most performing economy in economic transformation priorities196, and 
was ranked as the 14th of the 131 economies featured in the Global Innovation Index.197 These high 
rankings on IP -intensive indicators underpin the posit ive evolution of the Chinese IP regime.  
3.233.   China's participation in trade in IP has increased, as shown by the growth in total receipts 
of fees for the use of IP from USD  14 billion in 2010 to USD  41 billion in 2019. The trade deficit in 
this rubric has incre mentally narrowed down since 2010, reflecting the export activity related to 
royalties and licensing fees (Chart 3.6).  
 
191 For more information about the supplier complaint mechanism, see WTO document 
WT/TPR/S/375/Rev.1, 14  September  2018, paras.  3.215 -3.216.  
192 For more information in this regard, see WTO document WT/TPR/S/375/Rev.1, 14  September  2018, 
paras.  3.215 -3.216.  
193 WTO document GPA/ACC/CHN/51 , 21 October 2019.  
194 WTO document GPA/ACC/CHN/8/Rev.1, 2 June 2020.  
195 WEF (2019), The Global Competitiveness Report 2019 , p. 7. Viewed at: 
http://www3.weforum.org/docs/WEF_TheGlobalCompetitivenessReport2019.pdf . 
196 WEF (2020), The Global Competitiveness Report, Special Edition 2020 , p. 45. Viewed at: 
http://www3.weforum.org/docs/WEF_TheGlobalCompetitivenessReport2020.pdf . 
197 WIPO, 2020 Global Innovation Index . Viewed at: 
https://www.wipo.int/edocs/pubdocs/en/wipo_pub_gii_2020/cn.pdf . WT/TPR/S/ 415 • China  
 
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  Chart 3.6 Exports and imports of fees for the use of IP, 2010 -19 
 
Source:  WTO Data Portal. Viewed at: https://data.wto.org/ . 
3.3.7.2   Institutional reforms and IP -related policies  
3.234.   During 2018 and 2019, China undertook wide -ranging domestic reforms that included its 
IP regime, the infrastructure of IP  courts, and amendments to the Trademark Law, the Patent Law, 
and the Anti -Unfair Competition Law, which govern trade secrets (Section 3.3.7.5.8). As part of 
these reforms, in 2018, the State Intellectual Property Office became the China National Intellect ual 
Property Administration (CNIPA). The authorities state that the CNIPA is under the authority of the 
SAMR and is responsible for: (i)  promoting IP protection; (ii)  improving the IP protection system; 
(iii) registering and making administrative decisions  on trademarks, patents, and geographical 
indications (GIs); and (iv)  providing guidance on enforcement of trademarks and patents. The law 
enforcement staff of market supervision is responsible for the enforcement of trademarks and 
patents.  
3.235.   In 2019, the CN IPA, together with other relevant authorities responsible for the Innovation 
Policy, issued the Notice on Further Strengthening Intellectual Property Pledge Financing, which 
implements support measures to improve the service system of IP pledge financing, strengthen 
service innovation, enhance risk management, and improve supporting measures . It also establishes 
an online channel to facilitate the registration of patent pledges. In 2020, there were 12,039 patent 
and trademark pledge financing cases, totalli ng CNY  218 billion in loans, an increase of 43.8% for 
patents and 43.9% for trademarks from 2019.198 
3.236.   Building on previous work, the CNIPA published the Plan for Further Implementation of the 
National Intellectual Property Strategy to Accelerate the Construc tion of an Intellectual Property 
Power Country in May 2020. The Plan listed 100 measures related to, inter alia , the creation, use, 
protection, management, service, and international cooperation of IP, which aim to reduce subsidies 
or rewards for utility m odel, design, and trademark applications; cut examination periods for 
trademark and patent applications; reduce low -quality patent applications and malicious filing of 
trademarks; and ensure that decisions to grant awards or to promote or appoint staff in universities 
are not solely based on patent filings and grant rates.  
3.237.   Regarding IP -related issues, t he 14th Five-Year Plan for Economic and Social Development  
aims to promote  modernization through innovation and technological advancements and promote 
high-end, intelligent, and green production. Investment in R&D would have an important role in the 
areas of artificial intelligence, quantum information, integrated circuits, life and health sciences, 
neuroscience, biological breeding, and aerospace technology.  
 
198 Summary of 2020: Chinese IP System to a New Height , 28 January 2021. Viewed at: 
http://english.ipraction.gov.cn/article/ns/202101/334627.html . 
0510152025303540
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Exports Imports
Source:   WTO Data Portal.  Viewed at:  https://data.wto.org/Chart 3.[IP EXIM fees] Exports and imports of fees for the use of IP, 2010 -19
USD billionWT/TPR/S/ 415 • China  
 
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  3.238.   The China Manufacturing 2025 strategy highlights, inter alia , the importance of IP protection 
and enforcement  to promote IP -intensive sectors  such as robotics, information technology, and clean 
energy.  
3.239.   China amended its Anti -Unfair Competition  Law in April 2019 and its Trademark Law in 
November 2020. The amendments to the Patent Law were reviewed twice by the NPC Standing 
Committee  in October 2020 and are expected to be implemented from 1  June 2021. The Copyright 
Law was revised in November 202 0. Other IP -related laws have remained unchanged since the 
previous Review (Table A3.3).199 
3.3.7.3   International context  
3.240.   China  is a member  state of the World Intellectual Property Organization (WIPO), and 
participates in a number of international conventions and t reaties related to IPRs (Table A3.4).  
During the review period, China acceded to the Beijing Treaty on Audiovisual Performances, which 
entered into force on 28  April 2020.200 
3.241.   The China -United  States Phase 1 Economic and Trade Agreement contains specific pro visions 
related to: (i)  protecting trade secrets; (ii)  strengthening pharmaceuticals -related IP; (iii)  adjusting 
and extending patent terms; (iv)  preventing piracy and counterfeit on e -commerce platforms; 
(v) increasing transparency in the protection of GI s; (vi)  preventing manufacture and export of 
counterfeit goods; (vii)  ensuring adequate and effective protection and enforcement of trademark 
rights, particularly against bad -faith trademark registrations; and (viii)  increasing bilateral 
cooperation on IP  protection.201 
3.242.   China is a party to several bilateral trade agreements and RTAs that include IP chapters. 
Notably, in November 2020, China and other 14 Asia Pacific economies finalized the negotiations of 
the RCEP Agreement. Its IP chapter covers a wide range of topics such as copyrights, trademarks, 
GIs, patents, designs, genetic resources, traditional knowledge and folklore, protection against 
unfair competition, enforcement, cooperation, transparency, and technical assistance . 
3.243.   In February 2019, the CNI PA and the Saudi  Authority for Intellectual Property (SAIP) signed 
an MOU, which covers exchanges and cooperation in the development of the IP regime, capacity -
building, data exchange, trademarks, and GIs.  
3.244.   A two -year pilot collaboration project between the  CNIPA and the European Patent Office 
(EPO)  started in December 2020. It allows Chinese nationals and residents to select the EPO as the 
International Searching Authority for English -language international patent applications filed at the 
CNIPA or WIPO.  
3.3.7.4   Copyright and related rights  
3.245.   The legal framework  for the protection of copyrights and related rights is provided in the 
Copyright Law and relevant regulations, e.g. the Regulations for the Implementation of Copyright 
Law, the Regulations for the Protection o f Computer Software, the Regulations on Collective 
Copyright Management, the Regulations on the Protection of the Right of Dissemination via 
Information Network, and the Interim Measures for the Payment of Remuneration for the Broadcast 
of Sound Recordings  by Radio and Television Stations. Copyright owners or owners of related rights 
may authorize collective non -profit copyright management organizations  to exercise their rights.  
3.246.   The National Copyright Administration administers copyright registration nation ally. In the 
case of computer software, the Copyright Protection Centre of China registers copyrighted works.  
 
199 WTO documents IP/N/1/CHN/P/2 , 21 December 2010; IP/N/1/CHN/P/3, 26 August 2011; 
IP/N/1/CHN/C/1 (2001 Version), 8 July 2002; IP/N/1/CHN/L/1/Rev.1, 13 October 2003; IP/N/1/CHN/9 (2013 
Amendment), 19 October 2017; and IP/N/1/CHN/T/5 (2019 Amendment), 30 January 2020; and information 
provided by the authorities.  
200 WIPO IP Portal, WIPO -Administered Treaties: Contracting Parties: China . Viewed at: 
https://wipolex.wipo.int/en/treaties/ShowResults?country_id=38C . 
201 Government of China. Viewed at: http://www.gov.cn/guowuyuan/2020 -
01/16/content_5469650.htm . WT/TPR/S/ 415 • China  
 
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  3.247.   The procedure of registration under the Copyright Law has remained unchanged since the 
previous Review . Registration is voluntary and is not a requirement for copyright protection.202 The 
Copyright Law provides for copyright licensing and transfer of rights , unchanged since the previous 
Review. Copyright infringement can be sanctioned with fines.  
3.248.   The term of copyright protection for natural persons, as well as for certain works203, is life 
plus 50 years.204 Software copyright exists from the date on which its development is completed. 
The term of protection for typographical designs is 10 years. The authorities state that the term of 
protection for photographic works is the life of the author plus 50 years , and audio -visual works are 
protected for 50 years.  
3.249.   As at January 2021, there were five copyright collective management organizations in China: 
Music Copyright Society of China; China Audio -Video Copyright Association; China Written Works 
Copyright Society; the Images Copyright Society of China; and China Film  Copyright Association 
(Table 3.28).  
Table 3.28 Copyright collective management organizations  – fees and membership  
Organization  Fees collected  
(CNY million)  No. of members  
Music Copyright Society of China  404 10,031  
China Audio -Video Copyright Association  270 247 (including unit members and individual 
members)  
China Written Works Copyright Society  19.31  10,046  
Images Copyright Society of China  5.59 20,500  
China Film Copyright Association  0.0274  88 
Source:  Information provided by the authorities.  
3.3.7.5   Industrial property  
3.3.7.5.1   Trademarks  
3.250.   The legal framework for the protection and enforcement of trademarks is provided by the 
Trademark Law. Amendments to the Trademark Law entered into force in November 2019. 
The objectives of these amendments are to curb bad -faith applications, strengthen protection, and 
foster a favourable business environment. In order to implement the amendments, the Rules on 
Regulating Applications for Registration of Trademarks were developed and came into force in 
December 2019. The authorities indicate that the amendments and/or the regulations do not contain 
new provisions regarding parallel imports.  
3.251.   Since the reform of 2018, the CNIPA has been responsible for th e examination of trademark 
applications, registration and administration.  
3.252.   Registration is a prerequisite for protection, and ownership is determined on a first -to-file 
basis. According to Article  18 of the Trademark Law, foreign businesses are required to appoint a 
Chinese trademark agent. The period of protection is 10 years. According to the authorities, the 
request to renew the registration is to be filed 12 months before the date of expiration.  
3.253.   Foreign brand owners have the possibility to file trademark  applications either as national 
applications or international registrations under the Madrid Protocol.205 China adopted the Nice 
 
202 The copyright on the works of Chinese citizens, legal entities, or other organization s are 
automatically protected; this protection also applies to the copyright of foreigners whose works are first 
published in China. Copyright protection for works published abroad has remained unchanged since the 
previous Review.  
203 These include works of a legal entity or other organization, works created in the course of 
employment and the copyright of which is held by a legal entity or other organization, and cinematographic 
and photographic works. Audio and video productions, broadcasting, and public pe rformances are also granted 
protection for 50  years from the first day of production, broadcasting, or performance.  
204 In the case of more than one right holder, protection is granted for 50 years after the death of the 
last surviving right holder.  
205 WIPO, Madrid – The International Trademark System . Viewed at: https://www.wipo.int/madrid/en/ . WT/TPR/S/ 415 • China  
 
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  Classification of Goods and Services for the Purposes of the Registration of Marks .206 In addition, the 
CNIPA also developed a s ub-class system, whereby goods and services under each Nice class are 
classified into sub -classes, and some sub -classes are further categorized into different groups. The 
sub-classes are listed in the Chinese Classification Manual.  
3.254.   The China -United  States Phase 1 Economic and Trade Agreement contains provisions 
regarding bad -faith trademark registrations ; with a view to strengthening trademark protection, 
both Parties  shall ensure adequate and effective protection and enforcement of trademark rights, 
partic ularly against bad -faith trademark registrations.  
3.255.   During the review period, trademark  applications and registration  continued to increase. 
In 2019, residents accounted for 97% of trademark applications and 96% of registrations 
(Table  3.29).  
Table 3.29 Trademark applications and registrations, 2017 -19 
Trademarks  2017  2018  2019  
Applications  Resident  5,538,980  7,127,032  7,582,356  
Non-resident  209,195  243,677  255,085  
Madrid System submitted by Chinese applicants  4,810  6,900  6,491  
Registrations  Resident  2,656,039  4,796,851  6,177,791  
Non-resident  136,033  210,544  228,049  
Source:  Information provided by the authorities.  
3.3.7.5.2   Geographical  indications  
3.256.   GIs can be protected as certification marks or collective marks under the Trademark Law or 
by a sui generis  system contained in the Provisions on the Protection of Geographical Indication 
Products, administered by the CNIPA. In 2020, the CNIPA established the Technical Sub -committee 
on Geographical Indications of the National Technical Committee on Knowledge an d Intellectual 
Property Management Standardization.  
3.257.   According to the authorities, GIs  that have not been officially registered are still protected 
by the relevant laws, e.g. the Trademark Law, the Anti -Unfair Competition Law, the Food Safety 
Law, and the L aw on Quality and Safety of Agricultural Products.  
3.258.   The China -United  States Phase 1 Economic and Trade Agreement contains GI -related 
provisions, particularly: (i)  using relevant factors when making determinations for genericness, 
including usage of a term i n dictionaries, newspapers, and websites; how the good referred to by a 
term is marketed and used in trade;  and whether the term is used in relevant standards; (ii)  not 
providing GI protection to individual components of multi -component terms if the indivi dual 
component is generic; and (iii)  publicly identifying which individual components are not protected 
when granting GI protection to multi -component terms.  The CNIPA published Guidelines on 
Determining Common Names in Geographical Indication Protection ( Draft) in 2020, clarifying the 
determining factors, cancellation, and other aspects of common names in terms of the common 
name determination in GI protection.207 
3.259.   In September 2020, China and the European  Union signed a bilateral agreement to protect 
100 European  GIs in China and 100 Chinese GIs in the European  Union against infringement. During 
the four years after its entry into force, the agreement will expand in scope to cover an additional 
175 GIs from both sides. These GIs will have to follow the same approval procedure as the 
100 names originally covered by the agreement (i.e. assessment and publication for comment).208 
The authorities indicate that the agreement entered into force on 1  March  2021.  
3.260.   In 2018, 12 new applications for GI protection were acc epted, 67 GI protection products 
were granted, 223 companies were approved to use special signs of GI products, and 961 GIs were 
registered in the form of collective marks and certification marks. The authorities indicate that in 
 
206 WIPO, Nice Classification . Viewed at: https://www.wipo. int/classifications/nice/en/ . 
207 Government of China. Viewed at: http://www.gov.cn/guowuyuan/2020 -
01/16/content_5469650.htm . 
208 MOFCOM. Viewed at: http://tfs.mofcom.gov.cn/article/zscq/202009/20200903002354.shtml . WT/TPR/S/ 415 • China  
 
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  2019, five new application s for GI protection were accepted, 301 companies were approved to use 
special signs of GI products, and 462 GIs were registered in the form of collective marks and 
certification marks.  In 2020, 10 applications for GI protection were filed and 6 were grante d; 
1,052  companies were authorized to use GI signs, and 765 GI trademarks were registered.209 
3.3.7.5.3   Patents  
3.261.   The Patent Law and its Rules for Implementation provide the legal framework for the 
protection of inventions, utility models, and industrial designs.210 Parallel imports of patented goods 
are allowed, as provided by Article  69 of the Patent Law.  Articles 48 -58 relate to compulsory  licence 
provisions. Compulsory licences of patents may be granted in the public interest, or in the event of 
a natio nal emergency or extraordinary circumstances. So far, no compulsory licences have been 
granted in China.  
3.262.   The CNIPA is the authority responsible for receiving and processing patent applications and 
granting patents. The person concerned is free to request a  People's Court or administrative 
authority to settle disputes with respect to patents. The period of protection is 20 years.  
3.263.   During the review period, several regulations were amended. T he amendments to the 
Regulations on Patent Agencies came into force i n March 2019. Their objective is to improve the 
provisions regarding qualifications for practitioners, the code of conduct, and services supervision. 
According to the authorities, the revised Administrative Measures for Patent Agencies were 
implemented in May 2019; the revised Measures for the Patent Agent Qualification Examination were 
effective as at June 2019.  In September 2019, the CNIPA issued the Administrative Regulations of 
Collective Patent Examination , which aim to improve the examination efficien cy and quality of 
important patent applications. "Collective Patent Examination" means the collective processing of a 
group of patent applications focusing on the same key technology by the same applicant(s).211 The 
CNIPA also amended the Patent Examination  Guidelines in order to clarify  the examination standard 
in patent applications involving artificial intelligence and other new industries. The amendment 
entered into force in February 2020.  
3.264.   Amendments to the Patent Law were prepared with the objectives of  improving protection, 
boosting the application and use of patents, and enhancing the patent system. The NPC Standing 
Committee approved the amendments in October 2020; they are expected to enter into force on 
1 June 2021.  
3.265.   In November 2020, the CNIPA issue d draft amendments to the Implementing Regulations 
of the Patent Law for public consultation. The deadline for submitting opinions was 11  January  2021. 
The CNIPA will further complete the draft according to the opinions, and then submit the final draft 
to the legislature for review.  
3.266.   UNCTAD reported in 2019 that, in the 156 high -tech development zones established in China 
by end -2017, the ratio of R&D expenditures to total production value was 6.5%, three times the 
average in the national economy. Patents gr anted to enterprises within such high -tech development 
zones accounted for 46% of all business patents granted nationwide.212 
3.267.   The National Bureau of Statistics reported that the added value of China's patent -intensive 
industries reached approximately USD  1.53 trillion, contributing 11.6% to the GDP, in 2018. The 
equipment manufacturing sector contributed to 30.7% to the added value of the patent -intensive 
sectors. It was followed by information technology for manufacturing and services, manufacture of 
new ma terials, healthcare, high -technology services, and environmental protection industries. Data 
 
209 CNIPA, 2020 Statistics , 25 January 2021. Viewed at: 
http://english.ipraction.gov.cn/article/ns/202101/334279.html . 
210 Other patent -related regulations notified to the TRIPS Council are listed in WTO documents 
IP/N/1/CHN/3, 15  Decembe r 2010; IP/N/1/CHN/P/2, 21 December 2010; IP/N/1/CHN/4, 24 August 2011; and 
IP/N/1/CHN/P/3, 26 August 2011.  
211 CCIPT Patent and Trademark Office, China: CNIPA Issued Regulations on Collective Patent 
Examination , 18 November 2019. Viewed at: https://www.mondaq.com/china/patent/864738/cnipa -issued -
regulations -on-collective -patent -examination . 
212 WTO (2020), World Trade Report 2020 , p. 115. Viewed  at: 
https://www.wto.org/english/res_e/booksp_e/wtr20_e/wtr20_e.pdf . WT/TPR/S/ 415 • China  
 
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  provided by the authorities indicate that in 2019 the added value of China's patent -intensive 
industries reached CNY  11.4631 trillion, up by 7.0% compared with the  previous year ( including 
price factors), contributing 11.6% to GDP, equal to the previous year.  
3.268.   In 2019, the CNIPA was ranked as the top IP office, reaching 43.4% of world's total patent 
applications213 with 1.4 million filings, composed of 1.2 million fil ed by residents and 0.2 million by 
non-residents (Chart 3.7).214 
3.269.   In 2019, there was a total of 452,804 patent grants: 360,969 patents were granted to 
residents and 91,885 to non -residents (Chart 3.8).215 
3.270.   According to information from WIPO, in 2019, 10% of pa tents were granted in the field of 
computer technology, followed by 8% in measurement; 8% in electrical machinery, apparatus, and 
energy; and 7% in digital communication technologies. Chart 3.9 shows the top 15  fields of 
technology.  
Chart 3.7 Patent applications, 2010 -19 
 
Source:  WIPO IP Portal, WIPO IP Statistics Data Center. Viewed at: https://www3.wipo.int/ipstats/ . 
Chart 3.8 Patent grants, 2010 -19 
 
Source:  WIPO IP Portal, WIPO IP Statistics Data Center. Viewed at: https://www3.wipo.int/ipstats/ . 
 
213 WIPO (2020), WIPO IP Facts and Figures 2020 . Viewed at: 
https://www.wipo.int/edocs/pubdocs/en/wipo_pub_943_2020.pdf . 
214 WIPO IP Portal, WIPO IP Statistics Data Center. Viewed at: https://www3.wipo.int/ipstats/ . 
215 WIPO IP Portal, WIPO IP Sta tistics Data Center. Viewed at: https://www3.wipo.int/ipstats/ . 
0.00.20.40.60.81.01.21.41.6
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Resident Non-residentChart 3.[ ]   Patent applications, 2010 -19
Million of applications
Source:  WIPO IP Statistics Data Center.  Viewed at: https://www3.wipo.int/ipstats/
050,000100,000150,000200,000250,000300,000350,000400,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Resident Non-residentChart 3.[ ]   Patent grants, 2010 -19
Source:  WIPO IP Statistics Data Center.  Viewed at: https://www3.wipo.int/ipstats/WT/TPR/S/ 415 • China  
 
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  Chart 3.9 Patent grants by  top fields of technology, 2019  
 
Source:  WIPO IP Portal, WIPO IP Statistics Data Center. Viewed at: https://www3.wipo.int/ipstats/ . 
3.271.   The China -United  States Phase 1 Economic and Trade Agreement contains provisions 
regarding patent term extensions to compensate for unreasonable patent office and marketing 
approval delays that cut into the effective patent term, and to permit the use of suppl emental data 
to meet relevant patentability criteria for pharmaceutical patent applications. It also establishes a 
mechanism for the early resolution of potential  pharmaceutical patent disputes, including a cause of 
action to allow a patent holder to seek expeditious remedies before the marketing of an allegedly 
infringing product.216 Accordingly, China has formulated measures for the implementation of the 
early settlement mechanism for drug patent disputes in accordance with the provisions of the 
Agreement and the relevant provisions of the Patent Law. The measures were published for comment 
on 11  September  2020, and revised on the basis of domestic and foreign opinions. Articles 42 and 
76 of the fourth revision to the Patent Law touch upon "Effective Patent  Term Extension" and 
"Effective Mechanism for Early Resolution of Patent Disputes", specified in the China -United  States 
Phase 1 Economic and Trade Agreement. The 22nd session of the NPC Standing Committee adopted 
a decision on revising the Patent Law, and  the revised Patent Law is expected to come into force on 
1 June 2021. In addition, on 14  December  2020, the CNIPA published Announcement No.  391 on 
amending the Patent Examination Guidelines, which was implemented on 15  January  2021; 
according to the auth orities, it further clarified the examination standard for submitting experiment 
data after the application deadline.  
3.272.   In response to the challenges posed by the COVID ‑19 pandemic, the China Patent 
Information Center (CNPAT) developed in collaboration with the Patent Examination Cooperation 
(Beijing) Center of the Patent Office and the CNIPA to jointly develop an information -sharing public 
platform for patents related to the prevention of COVID ‑19. The platform provides precise patent 
information on almost 1 0,000 patents.217 
3.3.7.5.4   Utility models  
3.273.   The applications and registrations of utility models continued to grow during the review 
period. Resident applicants  represented 99% of applications and registrations (Table  3.30).218 
 
216 Government of China. Viewed at : http://www.gov.cn/guowuyuan/2020 -01/16/content_ 
5469650.htm . 
217 CNPAT, Information Sharing Platform for Patents on Pandemic Prevention against COVID -19. Viewed 
at: https://ncp.patentstar.cn/en . 
218 WIPO IP Portal, WIPO IP Data Center. Viewed at: https://www3.wipo.int/ipstats/ . 
9.7%
8.1%
8.0%
7.5%
4.2%
3.8%
3.7%
3.4%3.3%3.1%3.0%2.9%2.9%2.5%2.5%31.4%Computer technology
Measurement
Electrical machinery, apparatus, energy
Digital communication
Machine tools
Civil engineering
Transport
Audio-visual technology
Materials, metallurgy
Other special machines
Semiconductors
Handling
Chemical engineering
Medical technology
Optics
Other sectors
Source:  WIPO IP Statistics Data Center.  Viewed at: https://www3.wipo.int/ipstats/Chart 3.[ ]   Patent grants by top fields of technology, 2019WT/TPR/S/ 415 • China  
 
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  Table 3.30 Utility models – Applications and registrations, 2017 -19 
(million)  
Utility models  2017  2018  2019  
Applications  Resident  1.68 2.06 2.26 
Non-resident  0.01 0.01 0.01 
Registrations  Resident  0.97 1.47 1.57 
Non-resident  0.01 0.01 0.01 
Source:  WIPO IP Portal, WIPO IP Statistics Data Center. Viewed at: https://www3.wipo.int/ipstats . 
3.3.7.5.5   Industrial designs  
3.274.   The applications and registrations of industrial designs continued to grow during the review 
period. Resident applicants represented 97% of total applications and 96% of registrations 
(Table  3.31).  
Table 3.31 Industrial designs – Applications and registrations, 2017 -19 
Industrial designs  2017  2018  2019 
Applications  Resident   610,817.00   689,097.00   691,771.00  
Non-resident   17,841.00   19,702.00   19,846.00  
Registrations  Resident  426,442  517,693  539,282  
Non-resident  16,554  18,558  17,247  
Source:  WIPO IP Portal, WIPO IP Statistics Data Center. Viewed at: https://www3.wipo.int/ipstats . 
3.3.7.5.6   Layout -designs of integrated  circuits  
3.275.   Layout -designs of integrated circuits are protected under the Regulations on the P rotection 
of Layout -Designs of Integrated Circuits and under the Rules for Implementing the Regulations on 
the Protection of Layout -Designs of Integrated Circuits.  
3.276.   The CNIPA is responsible for the registration of layout -designs of integrated circuits. The 
authorities state that a  layout -design shall no longer be protected 15 years after the date of the 
completion of its creation, regardless of its registration or commercial exploitation.  
3.277.   Data provided by the authorities indicate that in 2018, the CNIPA rece ived 4,431 registration 
applications of layout -designs of integrated circuits, a year -on-year increase of 37.3%, and issued 
certificates for 3,815 layout -designs of integrated circuits, a year -on-year increase of 42.9%; in 
2019, it received 8,319 registrat ion applications of layout -designs of integrated circuits, a year -on-
year increase of 87.7%, and issued certificates for 6,614 layout -designs of integrated circuits, a 
year-on-year increase of 73.4%. And in 2020, 14,375 applications were submitted, a 72.8%  increase 
from the previous year, and 11,727 registrations were granted, a yearly increase of 77.3%.219 
3.3.7.5.7   New plant  varieties  
3.278.   The legal framework for the protection of new plant varieties is provided for by the 
Regulations on the Protection of New Varieties o f Plants (1997) and a body of implementing rules 
(Table A3.5). China acceded to the 1978 Act of the International Convention for the Protection of 
New Varieties of Plants in 1999.  
3.279.   The period of protection is 20 years from the date of authorization in the c ase of vines, forest 
trees, fruit trees, and ornamental trees, and 15  years for other plants. The Implementation Rules 
(Agriculture Part) and the Implementation Rules (Forestry Part) stipulate rules for protection of new 
plant varieties in agriculture and forestry, respectively, and Rules for the Review Board on New Plant 
Varieties regulate the review procedures for the authorization of new plant varieties.  
3.280.   The protection of new plant varieties in China is carried out by MARA and the National 
Forestry and G rassland Administration (NFGA). The Office of Plant Variety Protection of MARA is 
responsible for reviewing new varieties of agricultural plants and other related matters, including 
 
219 CNIPA, 2020 Statistics , 25 January 2021. Viewed at: 
http://english.ipraction.gov.cn/article/ns/202101/334279.html . WT/TPR/S/ 415 • China  
 
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  grain, cotton, oil -bearing plants, bast -fibre plants, sugar, vegetables (i ncluding watermelon and 
musk melon), tobacco plants, mulberries, tea plants, fruit trees (except dry fruits), ornamental 
plants (except ligneous plants), grasses, green manure, herbaceous medicinal plants, edible fungi, 
algae, rubber trees, and other plant s. The NFGA Science and Technology Development Center is 
responsible for the receipt, examination, and authorization of new varieties of forestry plants and 
other related matters.  
3.281.   Over the past 20 years, protection has expanded to a growing number of plant  varieties. 
The number of applications has also increased annually, making China the country with the largest 
number of annual applications for agricultural plant varieties. According to the data released by the 
Office of Plant Variety Protection of MARA, since 1999, the number of applications and registrations 
for plant varieties has increased rapidly. In early 2019, the cumulative number of applications had 
reached 26,000 and the total number of grants was 12,000. In 2018, the number of applications for 
new varieties of agricultural plants reached more than 4,800, which is equivalent to the total number 
of applications in the last 10 years.220 The numbers of applications for new varieties of agricultural 
plants in 2017, 2018, and 2019 were 3,842, 4,854, and 7,032, respectively, and the total number 
of grants reached 1,486, 1,990, and 2,288, respectively.  
3.282.   The NFGA released 7 lists of new varieti es protection, covering 284 varieties, most of which 
are active in forestry breeding. The number of applications for new varieties of forestry plants has 
also increased annually. By 2020, the total number of applications for new varieties of forestry plant s 
reached 5,566, and the total number of authorizations reached 2,643. In 2017, 2018, and 2019, 
there were, respectively, 623, 906, and 802 applications and 160, 145, and 439 authorizations for 
new varieties of forestry plants.  
3.283.   The authorities started revi ewing the Regulations on the Protection of New Varieties of Plants 
in 2019. The Supreme People's Court plans to issue a judicial interpretation on the Provisions on 
Application of Law in the Trial of Disputes over New Plant Variety Rights in 2021.221 
3.3.7.5.8   Undisclosed information and trade secrets  
3.284.   The legal framework governing the protection of  undisclosed information and trade secrets 
is composed by the Anti -Unfair Competition Law (last amended in 2019), the Administrative 
Licensing Law (last amended in 201 9), the Criminal Law (last amended in 2020), the Labour Law, 
the Regulations for the Implementation of the Law on Drug Control, and the Regulations on 
Administration of Agricultural Chemicals.  
3.285.   The Anti -Unfair Competition Law, as amended in 2019, contains r evised provisions on trade 
secrets. Article  9 defines "trade secrets" as "technical information, business operation information, 
and other commercial information that are not known to the public, have commercial value, and for 
which the trade secret owner has adopted corresponding measures to maintain its  confidentiality".  
3.286.   The amendment adds new types of trade secret infringements, particularly the acquisition 
of trade secrets through "cyber invasion"; prohibits indirect infringement of trade secrets that 
"instigates, induces, or helps others to obtain, disclose, use, or allow others to use the trade secrets 
of the rights holders in breach of confidential obligations or in violation of the requirements of the 
relevant rights holder on keeping confidential tr ade secrets"; expands the scope of persons who are 
subject to the provisions of trade secret infringement to include all individual and legal persons; 
adds punitive damages for malicious trade secret infringement; and increases the administrative 
fines tha t may be imposed for trade secret infringement.  
3.287.   Serious infringement of trade secrets constitutes a crime under the Criminal Law. In 
December 2020, the NPC Standing Committee passed the Criminal Law Amendments, which covered 
infringement of trade secrets. Specifically, the maximum and minimum penalty for this crime was 
increased, and the maximum penalty was increased from 7 to 10 years. The conviction and 
sentencing standards were revised, and actual losses will not be considered as the only prerequisite 
 
220 Twelve Tables Law Firm, "Introduction to the Protection of New Plant Varieties in China", 18 July 
2019. Viewed at: https://www.lexology.com/library/detail.aspx?g=b012e1f4 -d0a3-4ba3-9715-
f045afc811 8c#:~:text=China%20has%20established%20a%20legal,1%20of%20the%20same%20year . 
221 AFD China Intellectual Property Law Office, New Plant Varieties Protection in China , 26 October 2020. 
Viewed at: https://www.lexology.com/library/detail.aspx?g=2d8f77dd -bb01-463c-9783-41e1fa6bd0c0 . WT/TPR/S/ 415 • China  
 
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  for constituting a crime. According to the authorities, the definition of trade secrets in the Criminal 
Law was deleted, and its definition was mentioned in the corresponding provisions of the Anti -Unfair 
Competition Law revised in 2019.  
3.288.   According to Article  23 of the F IL, implemented in March 2019, administrative agencies and 
their employees shall keep confidential, according to the Law, the trade secrets of foreign investors 
and foreign -funded enterprises to which they have access in performing their duties , and neither 
divulge nor illegally provide others with such secrets. Article  39 of the F IL stipulates that during the 
promotion, protection, and administration of foreign investment, where an employee of an 
administrative agency divulges or illegally prov ides others with any trade secret to which he or she 
has access in performing his or her duties, disciplinary action shall be taken against the employee 
according to the Law; and if it is criminally punishable, the employee shall be held criminally liable 
according to the Law. In April 2019, the Administrative Licensing Law, which governs business 
licences and certain regulatory approvals, was amended to incorporate similar content as that in the 
FIL. Article  5 prohibits that individuals (including governme nt officials and external experts) involved 
in licensing procedures to disclose trade secrets and other confidential business information without 
the consent of the applicant, except in situations required by law or justified under national security 
or pub lic interest grounds.  
3.289.   The China -United  States Phase 1 Economic and Trade  Agreement required China to 
enumerate additional prohibited acts that constitute trade secret misappropriation, including: 
(i) electronic intrusions; (ii)  breach or inducement of a br each of duty not to disclose information 
that is secret or intended to be kept secret; and (iii)  unauthorized disclosure or use that occurs after 
the acquisition of a trade secret under circumstances giving rise to a duty to protect the trade secret 
from d isclosure or to limit the use of the trade secret. In addition, the agreement provides for burden 
shifting to an accused party in civil proceedings for misappropriation when the holder of a trade 
secret has produced prima facie  evidence, including circumst antial evidence, of a reasonable 
indication of trade secret misappropriation by the accused party. Other measures include the use of 
preliminary injunctions, clarifying criminal enforcement of misappropriation, and preventing 
unauthorized disclosure of tra de secrets by government entities.222 
3.3.7.6   Enforcement  
3.3.7.6.1   Overview  
3.290.   The IP enforcement regime continued to evolve in response to the challenges posed by the 
shift from brick -and-mortar stores to virtual marketplaces and the implementation of international 
agreements. In China, IP holders have the possibility of bringing ac tion against the infringer either 
directly in a court or by requesting the competent administrative authority to handle the case. An 
administrative resolution is not necessary prior to the judicial resolution. All public security 
authorities above the pref ecture and city levels have IPR crime -coordinating activities and lead 
organizations to arrange and coordinate action to crack down on infringement and counterfeiting 
activities. The Ministry of Public Security has cooperation agreements with other agencie s 
(e.g. Customs) to facilitate the prompt reporting of and intervention on IP -related infringements. 
The SAMR launched the "Iron Fist" Intellectual Property Law Enforcement Action to crack down on 
trademark infringement, counterfeit patents, and other ille gal activities. Table 3.32 provides an 
overview of enforcement actions taken by the authorities during the review period.  
3.291.   Regarding IP enforcement, the China -United  States Phase 1 Economic and Trade Agreement 
contains provisions aimed to: (i)  provide effec tive and expeditious action against infringement in the 
online environment, including requiring expeditious takedowns and ensuring the validity of notices 
and counternotices; (ii)  take effective action against e -commerce platforms that fail to take 
necessa ry measures against infringement; (iii)  take effective enforcement action against counterfeit 
pharmaceuticals and related products, including active pharmaceutical ingredients; (iv)  increase 
actions to stop the manufacture and distribution of counterfeits with significant health or safety 
risks; (v)  provide that the judicial authorities shall, except in exceptional circumstances, order the 
forfeiture and destruction of pirated and counterfeit goods, as well as the materials and implements 
predominantly used  in their manufacture; (vi)  significantly increase the number of enforcement 
actions against pirated and counterfeit goods at physical markets in China and those that are 
exported or in transit; (vii)  ensure, including through third -party audits, that gove rnment agencies 
 
222 Government of China. Viewed at: http://www.gov.cn/guowuyuan /2020 -01/16/content5469650.htm . WT/TPR/S/ 415 • China  
 
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  and SOEs only use licensed software; (viii)  provide deterrent -level civil remedies and criminal 
penalties for IP theft, including increasing the range of minimum and maximum pre -established 
damages, sentences of imprisonment, and monetary f ines; (ix)  require the transfer of cases from 
administrative authorities to criminal authorities when there is a reasonable suspicion of a criminal 
violation; (x)  ensure expeditious enforcement of judgments for violations of IPR; (xi)  provide legal 
presump tions of copyright ownership and waive certain other requirements for bringing copyright 
infringement claims; (xii)  eliminate or streamline requirements for foreign litigants to authenticate 
evidence for use in Chinese courts; and (xiii)  provide a reasonab le opportunity to present witnesses 
and to cross -examine opposing witnesses in civil proceedings.223 
Table 3.32 IP enforcement, 2018 -20 
 2018  2019  2020  
Cases  dealt with by governmental agencies 
(administrative level)     
Patents      
Number of disputes  66,700  77,300  39,000  
Copyright     
Number of disputes/administrative penalties  3,033  2,539  .. 
Imposition of fines (CNY million)  16 24 .. 
Cases transferred to judicial agencies  203 186 .. 
Businesses inspected  522,135  384,641  .. 
Illegal operation units banned  2,361  1,224  .. 
Underground dens detected  203 152 .. 
Trademarks     
Number of disputes  30,200  31,900  31,300  
Cases transferred to judicial agencies  172 236 709 
Value of fine (CNY million)  470 514 445 
Cases handled by Customs at the border     
Cases dealt with by courts     
First-instance civil IPR cases accepted  201,039  283,414  399,031  
First-instance civil IPR  cases closed  192,938  273,945  394,521  
Patent cases accepted  16,010  21,699  22,272  
Patent cases closed  14,254  19,151  23,071  
Trademark cases accepted  37,946  51,998  65,209  
Trademark cases closed  35,816  49,367  64,784  
Copyright cases accepted  137,267  195,408  293,066  
Copyright cases closed  133,357  192,385  289,029  
Technical contract cases accepted  2,098  2,680  3,135  
Technical contract cases closed   2,214  2,452  3,181  
Unfair competition cases accepted  2,429  4,080  4,128  
Unfair competition cases closed  2,179  3,207  3,902  
Other IPR cases accepted  5,289  7,549  11,221  
Other IPR cases closed  5,118  7,382  11,445  
Second instance civil IPR cases accepted  21,818  27,621  49,704  
Second instance civil IPR cases closed  20,525  26,288  48,710  
.. Not available.  
Source:  Information provided by the authorities.  
3.292.   China also released five judicial interpretations, including trade secret protection, patent 
licensing and confirmation, online IP infringement, criminal protection for IPRs, and evidence in 
IP-related civil proceedings, as well as providing three guiding opinions on IP protection for 
e-commerce platforms, strengthening the efforts of punishing IP infringements, and reinforcing the 
protection of copyrights and related rights.  
3.3.7.6.2   Administrative procedu res 
3.293.   Copyright administrative authorities have been established in all provinces, autonomous 
regions, municipalities, and certain cities to administer local copyright affairs including copyright 
enforcement. In 2018, local copyright law enforcement departme nts had 3,033 cases, of which 
203 were transferred to criminal judicial agencies. More than 7.4 million pirated products were 
seized. Special measures to crack down on copyright infringement and piracy included the Sword 
 
223 Government of China. Viewed at: http://www.gov.cn/guowuyuan/2020 -
01/16/content_5469650.htm . WT/TPR/S/ 415 • China  
 
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  Network 2018 and Sword Network 2019  strategies to promote copyrights in key areas such as 
network reprinting, short videos, movies, streaming media, and images. Data provided by the 
authorities indicate that 994 network infringement cases were investigated.  
3.294.   During the review period, copyrig ht surveillance of large -scale video, music, and literature 
websites, as well as online storage service providers, was strengthened. In 2018 and 2019, early 
warnings for 14 batches of key works, and 139 films and television works, were issued. These were 
reaffirmed by resident and non -resident right holders. The authorities have actively implemented 
outreach and training activities on enforcement and produced specific publications to inform the 
public.  
3.295.   During the review period, the CNIPA organized and launc hed IP protection campaigns and 
led nationwide efforts to crack down on infringements of trademarks, GIs, and patents. In 2018, the 
CNIPA joined MARA and four other departments to curb counterfeit, low -quality food in rural areas. 
In 2019, the CNIPA distri buted the Special Action Plan for IP Law Enforcement and Protection. Also 
in 2019, the SAMR issued the Iron Fist Action Plan for IP Enforcement for 2019 and 2020; according 
to the authorities, it launched law enforcement actions against trademark infringem ent, counterfeit 
patents, and other illegal activities, and issued the Implementation Measures for Reinforcing IP Law 
Enforcement in Online Shopping and Imports and Exports jointly with the Ministry of Public Security, 
MARA, the GACC, the National Copyrigh t Administration, and the National Intellectual Property 
Administration.  
3.296.   According to the authorities, since 2018, the CNIPA has taken the initiative to crack down 
on infringements in the area of forestry plant varieties. There is a plan to amend the Measu res for 
Administrative Law Enforcement on the Protection of New Varieties of Forestry Plants to strengthen 
the protection of plant variety rights.  
3.3.7.6.3   Judicial measures  
3.297.   During the review period, China continued its efforts to strengthen the capability of judic ial 
enforcement. In January 2019, the new IP Court of the Supreme Court was established and has 
national jurisdiction over technical IP appeals. This is a major milestone in the Chinese IP litigation 
system. The IP Court implemented the Uniform Judgment St andard System Project and explored 
the simultaneous trial mode of administrative and civil cases, as well as optimized the trial 
mechanism of technical IP cases. Data provided by the authorities indicate that the IP Courts in 
Beijing, Shanghai, and Guangzh ou have accepted more than 100,000 cases.  
3.298.   Since 2017, intermediate courts in 21 municipalities have set up special judicial agencies for 
first-instance IP cases. According to the authorities, local IP courts have improved the conduct of 
trials. Table 3.33 shows the number of judicial cases related to IP during 2018 and 2019.  
Table 3.33 Judicial measures, 2018 -19 
Cases/growth  2018  2019  
New cases received  334,951  481,793  
Cases concluded  319,651  475,853  
Percentage growth 2018 -19 44.16%  48.87%  
Source:  Information provided by the authorities.  
3.299.   The courts have implemented the Opinions on Strengthening the Protection of Intellectual 
Property Rights, improved the timeliness and suitability of judicial remedies , and made efforts to 
achieve coordination and proportionality between compensation for infringement damages and the 
market value of IPRs. According to the authorities, the quality and effectiveness of trials have been 
improved, and the leading role of cou rts in IPR enforcement has become more prominent.  
3.300.   According to the authorities, the Opinions of the Supreme People's Court on Promoting the 
"Three -in-One" Trial of Civil, Administrative and Criminal Cases Involving Intellectual Property Rights 
in Courts Na tionwide were put into practice. The Supreme People's Court reinforced its guidance on 
the "three -in-one" reform nationwide; researched IP -related criminal cases and revised relevant 
judicial interpretations; appointed a national database of technical inve stigators and experts; and 
issued the Technical Investigator Work Manual (2019) to provide work guidelines for courts. Courts WT/TPR/S/ 415 • China  
 
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  at all levels have further clarified how staff members could participate in technical fact -finding 
investigations.  
3.301.   The judicial sy stem has worked to improve transparency by implementing the work 
requirements called "Disclosure as Principle and Non -Disclosure as Exception" and widening the 
scope of public hearings.  
3.302.   In April 2020, the Supreme People's Court  released  the list of the top  10 IP law cases of 
2019.  The cases cover patents (invention and industrial design), trademarks, copyrights, and unfair 
competition.  The cases were adjudicated by courts throughout China at different appeal levels.  
3.3.7.6.4   Customs measures  
3.303.   The legal framework for IP enforcement at the border is provided by the Customs Law, the 
Regulations  on Customs Protection of Intellectual Property, and the Rules of the Customs for 
Implementing the Regulations on Customs Protection of Intellectual Propert y. 
3.304.   Ex officio  or active IPR enforcement upon entry into China requires recording the information 
of the relevant IPRs with the GACC. This procedure is free and allows customs officials to monitor 
suspicious activities, inspect import and export shipments, and work directly with the right holder to 
identify infringing goods. The GACC has the authority to suspend the customs clearance of suspected 
infringing goods, detain the shipment at the request of the IPR holder, and investigate the 
infringement. If no d etermination on infringement is possible, the IPR holder can still pursue the 
case in court. If an IPR holder has not registered with the GACC, the customs authority is not in a 
position to investigate. The IPR holder can request that customs detain a ship ment by providing 
evidence of the infringement and a deposit equivalent to the value of the goods. The IPR holder 
would need to file a case in court within 20 working days or the customs authority would release the 
goods. About 50,000 valid IPR registratio ns have been recorded with the GACC up to 
September  2019. In 2017, China Customs applied 22,500 IP protection measures, resulting in 
seizures of 19,100  shipments of goods suspected of IPR infringement. In 2018, China Customs 
applied 49,700  border protectio n measures, resulting in seizures of 47,200 shipments of goods 
suspected of IPR infringement. In 2019, China Customs applied 55,600 IP protection measures, 
resulting in seizures of 51,600 shipments of goods suspected of IPR infringement. Between 2017 
and 2 019, more than 97% of the seizures were based on China Customs'  ex officio  actions, while 
only around 3% was initiated by brand owners under passive protection scheme.  
3.3.7.6.5   Criminal  procedures  
3.305.   In December 2020, the Standing Committee of the National People's Congress adopted the 
amendments to the Criminal Law, which provide for stron ger criminal penalties for IPR 
infringements, raising the maximum prison term for trademark and copyright infringements from 
7 to 10 years; added the protection of service marks; and supplemented the types of criminal acts 
that infringe on trade secrets, a dding "industrial espionage crime". The amendment is scheduled to 
enter into force in March 2021.224 
 
 
 
224 China's Website for the Campaign agains t IPR Infringements and Counterfeits, "China Amends 
Criminal Law", 28 December 2020. Viewed at: http://english.ipraction.gov.cn/article/ps/202012/331706.html . WT/TPR/S/ 415 • China  
 
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  4  TRADE POLICIES BY SECTOR  
4.1  Agriculture, Forestry, and Fisheries  
4.1.1   Overview  
4.1.  The contribution of agriculture, animal husbandry, forestry, and fisheries to current GDP 
gradually decreas ed during the review period. The real growth rate fluctuated year -on-year, and 
employment (as a percentage of total employment) also gradually dec lined. Farming and animal 
husbandry continu e to account for the majority of gross value output (over 81.3% in 2020) 
(Table  4.1). 
Table 4.1 Principal indicators for agriculture, animal husbandry, forestry, and fisheries, 
2015 -20 
 2015  2016  2017  2018  2019 2020  
Contribution to current GDP (%)  8.7 8.4 7.8 7.3 7.4 6.0 
Real growth rate (%)  3.9 3.3 4.0 3.5 3.2 1.1 
Employment (percentage of total employment)a 28.3 27.7 27.0 25.1 .. .. 
Share of gross output value (%)b       
 Farming  55.6 54.8 55.8 57.1 56.2 52.1 
 Forestry  4.5 4.6 4.8 5.0 4.9 4.3 
 Animal husbandry  29.4 30.0 28.2 26.6 28.1 29.2 
 Fishery  10.6 10.7 11.1 11.3 10.7 9.3 
.. Not available.  
a Percentage of employment of the primary industry in total employment not including mining; data 
for employment in agriculture, forestry, animal husbandry, and fisheries were not available.  
b Including auxiliary services.  
Note:  The farming output data for 2020 are estimated data.  
Source:  Information provided by the authorities.  
4.1.2   Agriculture  
4.1.2.1   Features and market development  
4.2.  Over the period 2015 -19, the overall value of production of agriculture and animal husbandry 
increased steadily (Table 4.2). Longer term trends are contained in Chart 4.1 and Chart  4.2. 
Table 4.2 Agricultural production, 2015 -19 
 Value of production 
of agriculture and 
animal husbandry  Cereal sa Pork  Poultry  Fruits  Vegetables  Cotton  
CNY million        
2015 8,285,466  1,418,998  1,285,965  739,547  961,309  2,009,154  104,142  
2016 8,612,106  1,429,738  1,413,344  777,516  929,945  1,851,000  79,010  
2017 8,742,095  1,473,846  1,296,611  732,987  1,049,366  1,871,516  81,162  
2018 9,015,000  1,460,160  1,120,265  816,272  1,102,956  2,037,395  81,216  
2019 9,913,080  1,479,773  1,320,716  959,815  1,243,312  2,175,413  77,934  
'000 tonnes        
2015 .. 618,184  56,454  19,195  245,246  664,251  5,907  
2016 .. 616,665  54,255  20,017  244,052  674,342  5,343  
2017 .. 615,205  54,518  19,817  252,419  691,927  5,653  
2018 .. 610,036  54,037  19,937  256,884  703,467  6,103  
2019 .. 613,697  42,553  22,386  274,008  703,467  5,889  
.. Not available.  
a Main cereals produced are rice, wheat, and corn.  
Source:  National Bureau of Statistics, China Statistical Yearbook 2019 . Viewed at: 
http://www.stats.gov.cn/tjsj/ndsj/2019/indexeh.htm ; WTO document WT/TPR/S/375/Rev.1, 
14 September  2018; and data provided by the authorities.  WT/TPR/S/ 415 • China  
 
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  Chart 4.1 Value of production of agriculture and animal husbandry, 2009 -19 
 
Source:  National Bureau of Statistics, China Statistical Yearbook 2019 . Viewed at: 
http://www.stats.gov.cn/tjsj/nd sj/2019/indexeh.htm ; and data provided by the authorities.  
Chart 4.2 Volume of production, 2009 -19 
 
Source:  National Bureau of Statistics, China Statistical Yearbook 2019 . Viewed at: 
http://www.stats.gov.cn/tjsj/ndsj/2019/indexeh.htm ; and data provided by the authorities.  
4.3.  China continues to be a net importer of agricultural products, although agricultural imports 
represen ted only 6.4% of total merchandise imports in 2020. As at the time of China's previous 
Review, China's main agricultural exports by tariff line (at the HS 4 -digit level) are fruits and 
vegetables. I mports of agricultural products continue to be dominated b y soya beans, although their 
share in imports dropped between 2017 and 2020 (Table 4.3) . 
Table 4.3 Agricultural exports and imports, 2015 -20 
  2015  2016  2017  2018  2019  2020  
Exportsa (USD million)  50,425.8  52,491.7  54,576.6  57,619.8  58,490.6  57,486.6  
% of total exports  2.2 2.5 2.4 2.3 2.3 2.2 
 Growth rate (%)  0.2 4.1 4.0 5.6 1.5 -1.7 
Top 10 exports at HS 4 -digit level (% of total)       
 0703 Onions, garlic, fresh or chilled  4.7 6.0 5.0 3.4 4.5 4.6 
2008 Fruit and nuts prepared/preserved, 
n.e.s.  5.1 4.8 5.0 5.1 4.5 4.4 
 2106 Food preparations, n.e.s.  2.5 2.6 2.7 3.2 3.5 4.0 
 0712 Dried vegetables  5.6 6.2 7.3 7.0 5.0 3.7 
 0808 Apples, pears and quinces, fresh  2.9 3.7 3.7 3.2 3.1 3.7 
2309 Preparations of a kind used in 
animal feed  3.2 3.2 3.4 3.7 3.3 3.6 
 0902 Tea  2.7 2.8 2.9 3.1 3.5 3.5 
01,0002,0003,0004,0005,0006,0007,0008,0009,00010,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Other
Cotton
Vegetables
Fruit and nuts
Poultry
Pork
CerealsChart 4.[CHN] Value of production of agriculture and animal husbandry, 2009 -19
Source: National Bureau of Statistics and data provided by the authorities.CNY trillion
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019708090100110120130140150
 Cereals
 Pork
 Poultry
 Fruit
 CottonChart 1.[CHN]  Volume of production, 2009 -2019
Source:  National Bureau of Statistics and data provided by the authorities.Index (2008=100)WT/TPR/S/ 415 • China  
 
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    2015  2016  2017  2018  2019  2020  
2005 Other prepared/preserved 
vegetables  3.7 3.8 3.9 3.8 3.7 3.5 
 1302 Vegetable saps and extracts, etc.  2.5 2.4 2.5 2.6 2.7 2.8 
2103 Sauces; mixed condiments and 
seasonings  2.0 1.8 2.0 2.1 2.2 2.7 
Importsa (USD million)  108,526.1  102,992.2  115,441.9  123,793.3  132,583.1  157,424.1  
 % of total imports  5.8 6.5 6.5 6.3 5.8 6.4 
 Growth rate (%)  -5.1 -5.1 12.1 7.2 7.1 18.7 
Top 10 imports at HS 4 -digit level (% of total)       
 1201 Soya beans  32.1 33.0 34.3 30.8 26.7 25.1 
0203 Meat of swine, fresh, chilled or 
frozen  1.3 3.1 1.9 1.7 3.4 7.5 
 0202 Meat of bovine animals, frozen  2.1 2.4 2.6 3.8 6.0 6.2 
1901 Food preparations of cereals, flour 
or milk  2.7 3.4 3.9 4.4 4.4 3.7 
 1511 Palm oil and its fractions  3.4 2.8 3.0 2.7 3.1 2.6 
 0810 Fresh fruit, n.e.s. in chapter 8  1.8 1.8 1.7 2.0 2.4 2.6 
 2106 Food preparations, n.e.s.  1.2 1.4 1.7 2.2 2.4 2.5 
 5201 Cotton, not carded or combed  2.4 1.5 1.9 2.6 2.7 2.3 
0207 Meat of poultry, fresh, chilled or 
frozen  0.9 1.2 0.9 0.9 1.5 2.2 
0402 Milk and cream, concentrated or 
containing added sugar  1.4 1.5 1.9 2.0 2.4 2.1 
a WTO definition.  
Note:  Top 10 agricultural exports and imports by HS 4 -digit level are sorted by the year 2020.  
Source:  WTO Secretariat calculations, based on trade figures from UN Comtrade database.  
4.4.  Farmland continues to be owned by villagers' collectives that had a 15 -year ownership for a 
first round and a 30 -year ownership for a second round under the household contract responsibility 
system set up in the late 1970s and early 1980s. Having signed the contract, farmers are guaranteed 
the right to occupy, use, and profit from the tenur e of the farmland during the period covered by 
the contract. Rural households can transfer the land management right in exchange for income 
through the "three -rights" separation system, which was embedded in law through amendments to 
the Rural Contract Law  in 2018.1 According to the authorities, this system facilitated a more efficient 
allocation of land management rights to support appropriately scaled management and the 
development of modern agriculture. Reportedly, the registration and certification of 200 million rural 
households' contracted land rights have been completed, and, by the end of 2019, 550  million  mu 
(1 mu being 667  m2) of rural contracted land had been transferred. During the review period, a 
greater emphasis was placed on experimenting wi th a similar approach to underused or unused rural 
homesteads, to promote housing use and densification, as well as to liberate construction land for 
new industries. Homesteads are collective rural construction lands owned by the village collectives 
and al located for villagers to build homes and supporting facilities.2 The authorities indicate that pilot 
programmes for rural homestead reform have been carried out in 33  counties (cities or districts) 
since 2015. Following the requirement of acquisition in a  lawful and fair manner, economic and 
intensive use, and voluntary paid exit, pilot projects have explored guaranteeing housing for all rural 
households, establishing homestead paid use and exit mechanisms, delegating homestead approval 
authority, and impr oving the homestead management system. Some of the results gained from pilot 
programmes were incorporated into the newly revised Land Management Law. In 2018, the 
Government announced a policy to explore the three -rights separation system for homesteads.3 In 
June 2020, China adopted the Pilot Program for Deepening the Rural Homestead System Reform, 
 
1 Under a pilot three -rights separation system initiated in 2014, the right of collective ownership, the 
contracting right of farmer households, and the operating right of rural land were separated. The objective was 
to optimally utilize farmland considerin g increasing levels of urbanization and a corresponding underutilization 
of farmlands owned by farmers no longer living in rural areas and thus enable active farmers or agri -
businesses to work the land (CTGN, China's "No.  1. Document" to Continue Land Refo rms as Part of 
Revitalization Strategy , 4 February 2018. Viewed at: https://news.cgtn.com/news/7751444e31677a6333566 
d54/index.html ). In 2016, China adopted the Opinions on I mproving the System for Separating Rural Land 
Ownership, Contract Rights and Management Rights, making a systematic and comprehensive institutional 
arrangement for the "separation of three rights" of the rural contracted land, proposing to speed up the 
liberalization of land management rights, and establish and perfect a standardized management system for 
land transfer.  
2 The authorities indicate that, in the context of this Review, the Government has not yet calculated the 
total area of homesteads; however , in the future, MARA will establish a nationwide homestead survey system 
and make the survey results public, according to law.  
3 MDPI, "Report from a Chinese Village 2019: Rural Homestead Transfer and Rural Vitalization", MDPI 
Sustainability Journal , 18 October  2020. Viewed at: https://www.mdpi.com . WT/TPR/S/ 415 • China  
 
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  which requires the relevant authorities to explore the implementation of homestead collective 
ownership, the protection of rural households' entitlement to home stead and housing property 
rights, and the moderate relaxing of specific paths/measures regarding the rights of use of 
homesteads and rural houses while safeguarding and developing the rights and interests of farmers.  
4.1.2.2   Legal and institutional framework  
4.5.  The Government is responsible for establishing the general agricultural policy framework and 
the rules for its implementation. As part of the Government's restructuring in 2018, various 
institutional changes were made. The Ministry of Agriculture (MOA) was ren amed the Ministry of 
Agriculture and Rural Affairs (MARA) and falls under the responsibility of the State Council. Its 
priorities are resolution of the "three -rights" issues (Section 4.1.2.1), agricultural and rural 
development, implementation of the rural  revitalization strategy (Section 4.1.2.3), promotion of 
agricultural upgrading, farmer development, and acceleration of agricultural and rural 
modernization. MARA took over the responsibilities of the MOA, as well as the management 
responsibilities for th e agricultural investment projects of the National Development and Reform 
Commission (NDRC), the comprehensive agricultural development projects of the Ministry of 
Finance, the farmland investment projects of the Ministry of Land and Resources, and the far mland 
water conservancy construction projects of the Ministry of Water Resources. T he National Food and 
Strategic Reserves Administration (NAFRA) was also established under the purview of the NDRC, 
with a view to strengthening the overall planning and buil ding of a unified national material reserves 
system, enhancing the supervision and management of the central grain and cotton reserves, and 
improving the national reserve's capacity to respond to emergencies. The NAFRA is responsible for: 
(i) implementing the purchase, storage, rotation, and management of emergency reserves in 
accordance with the overall development plan and the catalogue of the national reserves system; 
(ii) constructing and managing related infrastructure; and (iii)  supervising and inspec ting 
government and enterprise reserves and the implementation of the reserve policies. It is also 
responsible for industry guidance of grain distribution and administrative management of the central 
reserves of grain and cotton. The State Administration o f Grain was dissolved. Additionally, the 
Ministry of Science and Technology (MOST), which has a lead role in supporting the development of 
the biotechnology industry, took responsibility for China's National Science Foundation, a public 
science funding bod y. MARA, together with, inter alia , the NDRC, the Ministry of Finance, and the 
Ministry of Commerce (MOFCOM), is in charge of implementing agricultural policy.  
4.6.  Among the central state -owned enterprises (SOEs ) and their subsidiaries under the 
State -owned Assets Supervision and Administration Commission's (SASAC) supervision operating in 
the agriculture sector and related sectors, such as food processing and the production of seeds, 
fertilizers, and pesticides,  are: the China Agriculture Development Group; COFCO Corporation; the 
China Grain Storage Group; China Salt Industry Group; Sinochem; China National Chemical Group; 
and the China National Seed Group.  
4.7.  Key laws in the agriculture sector are set out in Table 4.4. 
4.8.  In 2018, amendments to the Law on the Contracting of Rural Land  were made to legally 
upgrade the institutional arrangements on the "three -rights" separation system of rural contracted 
land (Section 4.1.2.1). Major changes to the Land Administration Law in 2019 were made to narrow 
the scope of land requisition, allow co llective operating construction land to enter the market, 
establish the means of protecting rural land designated for housing, and strengthen the protection 
of arable land (especially permanent basic farmland). Amendments to the Law and Safety of 
Agricultu ral Products in 2018 reflected institutional changes. The main change to the Law on the 
Organization of Villagers' Committees in 2018 was to change the term of a Villagers' Committee 
member from three to five  years. The 2018 revision to the Agricultural Me chanization Promotion Law 
did not involve any substantial changes.4 
4.9.  Since China's previous Review, FDI restrictions on companies selecting and cultivating new 
varieties of crop and producing seeds have been eased, except for soybean and rice; the requirem ent 
for Chinese parties to be controlling shareholders now applies only to corn. With respect to wheat, 
the Chinese shareholding threshold has been reduced to 34% (Table A2.3).5 
 
4 The revision merged the first and second paragraphs of Article  12. 
5 See also WTO document WT/TPR/S/375/Rev.1, 14  September  2018, Table  A2.3.  WT/TPR/S/ 415 • China  
 
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  Table 4.4 Main agriculture -related laws, December 2020  
Law 
(date of last amendment)  Coverage  
Agriculture Law, 1993 (2012)  Principles for agriculture development, management, and preservation. 
Agriculture encompasses crop -plantation, forestry, animal husbandry, 
and fisheries.  
Law on S pecialized Farmers' 
Cooperatives, 2006 (2017)  Regulations on norms and behaviour of specialized farmers' 
cooperatives.  
Law on Promotion of Agricultural 
Mechanization, 2004 (2018)  Provisions to encourage and support peasants and agricultural 
production and operation organizations to use advanced machines, 
promote mechanization, and develop modern agriculture.  
Law on the Contracting of Rural 
Land, 2002 (2018)  Provisions to stabilize and perfect the two -level operation system that is 
based on t he responsibility system of contracting by households 
supplemented by unified management, entitling peasants to a long -term 
and guaranteed right to land use.  
Law of Agricultural Engineering 
Extension, 1993 (2012)  Provisions to strengthen agricultural engi neering extension, and 
advance agricultural scientific research and new technology to ensure 
agricultural development and modernization.  
Land Administration Law, 1986 
(2019)  Provisions on the ownership and land use rights, land use planning, 
protection of  cultivated land, land for construction, and supervision and 
inspection.  
Law on the Quality and Safety of 
Agricultural Products, 2006 
(2018)  Provisions on quality and safety standards, origin, production, packing 
and labelling, and supervision and inspection of agricultural products.  
Law on the Organization of 
Villagers' Committees, 1998 
(2018)  Provisions on composition and responsibilities of villagers' committees, 
election of village committees, villagers' meetings, and democratic 
supervision and  management.  
Source:  FAOLEX Database, China . Viewed at: http://www.fao.org/countryprofiles/index/en/?iso3=CHN ; Land 
Administration Law. Viewed at: http://www.moj.gov.cn/Department/content/2019 -09/18/592_3232 
173.html ; Agricultural Mechanization Promotion Law. Viewed at: http://www.moa.gov.cn/gk/zcfg/fl/ 
202007/t20200716_6348748.htm ; Law on Quality and Safety of Agricultural Products. Viewed at: 
http://www .moj.gov.cn/Department/content/2019 -01/17/592_226992.html ; Law on the 
Organization of Villagers' Committees. Viewed at: http://www.moj.gov.cn/Department/content/ 
2019-01/17/592_227048.html ; and Rural Contract Law. Viewed at: 
http://www.npc.gov.cn/npc/c30834/201901/cd063e4c0f19465e9d41946001fe839c.shtml . 
4.1.2.3   Policy objectives and ref orms  
4.10.   The main agricultural strategy in China is the Strategic Plan for Rural Revitalization (2018 -22) 
released in 2018.6 The reasons for issuing the Plan were to build on improvements achieved in the 
agricultural sector and to address challenges relating to improving the quality and effectiveness of 
agricultural development, developing rural talents, lagging construction of rural public facilities, and 
closing the large gap between urban and rural public services and the income of urban and rural 
residents . According to the authorities, the Plan gives priority to agricultural and rural development, 
and the overall requirement of making the countryside prosperous in terms of industrial 
development, liveable in terms of ecological environment, civilized in te rms of conduct, effective in 
terms of governance, and well off in terms of the standard of living. Under the Plan, institutional 
mechanisms and policy frameworks for integrated development of the urban and rural areas are 
being developed to accelerate the modernization of rural governance systems and capabilities, as 
well as of agricultural and rural areas. Various plans were released to implement the goals contained 
in Strategic Plan, including China's No.  1 Central Documents on Agriculture and Rural Devel opment 
of 2018, 2019 and 20207; the Development Plan for Digital Agriculture and Rural Areas (2019 -25)8; 
and a white paper on food security in China.9 
 
6 Strategic Plan for Rural Revitalization. Viewed  at: http://www.gov.cn/zhengce/2018 -09/26/content_ 
532553 4.htm . 
7 For an explanation of the contents of these documents, as well as a link to the official texts, see FAO, 
China No.  1 Central Document of 2018.  Viewed at: http://www.f ao.org/faolex/results/details/en/c/LEX -FAOC 
179223 ; China  No. 1 Central Document of 2019 . Viewed at:  http://www.fao.org/faolex/results/details/en/c/ 
LEX-FAOC192851 ; and China No. 1 Central Document of 2020.  Viewed at: http://www.fao.org/faolex/results/ 
details/en/c/LEX -FAOC192850 . 
8 FAO (2019), Development Plan for Digital Agriculture and Rural Are as (2019 -2025) . Viewed at: 
http://www.fao.org/faolex/results/details/en/c/LEX -FAOC193207 . 
9 FAO (2019), White Paper: Food Security in China . Viewed at: 
http://www.fao.org/faolex/results/details/en/c/LEX -FAOC195922 . WT/TPR/S/ 415 • China  
 
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  4.11.   Policy objectives for modernizing the agricultural sector are also contained in China's 
13th Five-Year Plan  for Economic and Social Development  (2016 -20), which has four main elements: 
(i) strengthening the capacity for ensuring the safety of agricultural products; (ii)  establishing a 
modern agricultural operations system; (iii)  improving technology and equipment and increasing 
information technology (IT) application in agriculture; and (iv)  improving systems for providing 
support and protection for agricul ture. It also contains goals for developing the agricultural 
biotechnology segment, including genetically modified crops . In the 14th Five-Year Plan for Economic 
and Social Development , policy objectives in agriculture included : implementing the strategy o f rural 
revitalization, strengthen ing the use of industry to supplement agriculture, and promot ing the 
formation of a new type of urban -rural relationship between industry and agriculture . The authorities 
state that steps to implement the goals/reforms con tained in the above -mentioned plans include 
promotion of large -scale construction of high -standard farmland, demarcation of functional areas of 
grain production and essential production areas for agricultural products, strengthened innovation 
in agricultur al science and technology, and promotion of whole -process mechanized production of 
major crops. Additionally, support is being given to establishing modern agricultural industrial parks 
and townships and industry clusters, and developing new business model s (i.e. leisure agriculture, 
rural tourism, and rural e -commerce). Other areas of focus include encouraging clean agricultural 
production, developing a three -year action plan to protect and restore the rural environment, 
promoting rural culture, and improv ing transport infrastructure, utilities, and public service delivery.  
4.12.   In July 2020, MARA issued a 2020 -25 National Plan for Rural Industrial Development10, which 
sets out the goals and revenue targets for rural industrial development over the period, with 
priorities including upgrading agricultural product processing industries, expanding rural speciality 
industries, improving agricultural tourism, developing new -type rural service industries, promoting 
synergies between vertical integration of agriculture and rural industries development, and 
advancing entrepreneurship and innovation in rural areas.  
4.1.2.4   Policy instruments  
4.1.2.4.1   Border measures  
4.13.   Agricultural products (WTO definition) are, with the exception of some animal products, 
subject to ad valorem  applied rates.11 In 2021, the average most -favoured nation (MFN) applied 
tariff on agricultural products was 12.7% (14.8% in 2017). The product groups subject to 
higher -than-average tariff protection included sugars and confectionery (30.6%); cotton (22.0%); 
cereals and preparations (19.7%); beverages, spirits and tobacco (14.9%); and coffee and tea 
(13%). The simple average tariff for oilseeds, fats, and oils (including soybeans, one of China's 
major imports) was the lowest among agricultural products, at 10.1% (10.5% in  2017). In addition, 
the variability of agricultural tariffs, with a standard deviation (SD) of 10.1, was higher than that of 
non-agricultural products (SD  4.6). Variability was particularly high for cereals and preparations 
(SD 20.4) and sugars and confec tionery ( SD 16.2),  followed closely by beverages, spirits and 
tobacco (SD  15.8) and cotton (SD  14.7) (Table A3.1).  
4.14.   China continues to make use of tariff  rate quotas (T RQs), which are administered through 
import licences (Section 3.1.5).12 Except for uncombed cotton, in -quota and out -of-quota tariff rates 
are ad valorem . China applies an interim rate in the form of a sliding duty to a certain amount of 
uncombed cotton (HS  5201.0000) imported out of quota, with the sliding duty rate capped at 40% 
(i.e. the bound rate for cotton). Taking 2021 as an example, the sliding duty rate in the year depends 
on the base price (CNY  14/kg). If the dutiable value of the cotton imported is equal to or higher than 
the base price, a specific duty of CNY  0.28/kg  is levied, and if the import price is lower than the base 
price, an ad valorem  rate based on the sliding -scale duty formula applies . Since 2018, the 
implementation rate of tariff quotas has fluctuated, along with domestic and foreign market 
conditions. In  2018, the tariff quota fill rates for wheat, corn, and wool tops were relatively low at 
32%, 39%, and 13%, respectively (Table 4.5). In 2019, fill rates for wheat, rice, and wool tops were 
36%, 48%, and 17%, respectively. The authorities indicate that flu ctuating fill rates are due to 
 
10 MARA. Viewed at: http://www.moa.gov.cn/govpublic/XZQYJ/2 02007/t20200716_6348795.htm . 
11 These products are six tariff lines under HS 0207 – frozen meat and edible offal of fowls of the 
species  Gallus domesticus  (poultry), and one line under HS 0504.00.21 – frozen gizzard. Three tariff lines carry 
alternate/mixed  rates under HS 4001 – natural rubber; those three alternate rates are interim duties.  
12 WTO document G/LIC/N/3/CHN/18, 30 January 2020.  WT/TPR/S/ 415 • China  
 
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  changes in domestic and international market conditions; they note a higher fill rate of 87% for 
wheat in 2020.  
Table 4.5 TRQs on agricultural products and their utilization, 201 8-19 
Products  Out-of-
quota 
rates  In-quota 
rates  Tariff quota 
quantity  In-quota imports  
2018  2019  
(%) (tonnes)  
Wheat (7 lines)    9,636,000  3,098,719  3,487,626  
Wheat and meslin (4 lines)   65 1    
Wheat or meslin flour (1 line)  65 6    
Groats and meal of wheat (1  line)  65 9    
Pellets of wheat (1 line)   65 10    
Corn (5 lines)    7,200,000  2,827,288  4,793,424  
Maize (corn) seed (1 line)  20 1    
Maize (corn) other than seed (1  line) 65 1    
Maize (corn) flour (1 line)   40 9    
Groats and meal of corn (1 line)   65 9    
Rolled or flaked corn (1 line)   65 10    
Rice (14 lines)     5,320,000a 3,076,644  2,545,726  
Rice, other than broken (8 lines)   65 1    
Broken rice (2 lines)  10 1    
Rice flour (2 lines)   40 9    
Meal of rice (2 lines)   10 9    
Sugar (7 lines)   50 15 1,945,000  1,945,000  1,945,000  
Wool (6  lines)   38 1 287,000  253,832  277,166  
Wool tops (3 lines)  38 3 80,000  10,307  13,961  
Cotton (2 lines)  40 1 894,000  894,000  894,000  
a Tariff quota quantity is 2,660,000 tonnes for short - and medium -grain rice combined and 2,660,000 
tonnes for long -grain rice.  
Note:  The number of tariff lines in brackets (HS 8 -digit level) refers to the 2018 -19 customs tariff.  
Source:  WTO documents G/AG/N/CHN/55, 7 December  2020; and G/AG/N/CHN/50, 6  November  2019; and 
Ministry of Finance (2019), Customs Tariff of Imports and Export of the People's Republic of China . 
4.15.   The NDRC is responsible for allocating TRQs for grains and cotton, and MOFCOM allocates the 
rest. S ome products subject to TRQs (i.e. grains, cotton, and sugar) are also subject to state trading. 
In these cases, one part of the quota is allocated to state trading enterprises and the other part to 
other enterprises. The administration methods of the TRQs  as described by China in its notification 
to the WTO remained unchanged.13 
4.16.   The importation of grain (wheat, maize, and rice), sugar, tobacco, and cotton is subject to 
state trading.14 
4.17.   The VAT rate on agricultural domestic and imported goods stood at 9% i n 2020 (reduced from 
11% in 2017).15 Self-produced agricultural products sold by agricultural producers are VAT exempt 
(Table 3.4). Tobacco leaf (i.e. sun -dried leaf tobacco and toasted leaf tobacco) purchased in China 
is subject to a 20%  tobacco leaf tax.16 The authorities state that this tax is not levied on imported 
tobacco leaf.  
4.1.2.4.2   Measures affecting exports  
4.18.   China notified the WTO that export subsidies were not granted to agricultural products during 
the calendar years 2018 and 2019.17 The authorities did n ot provide an update as to whether export 
subsidies were provided in 2020. As indicated in its previous Review, China replied to the 
questionnaire on export competition, circulated on 31  October  2016, that it provides export financing 
 
13 WTO document G/AG/N/CHN/2, 25 September 2003, Table MA:1.  
14 WTO documents G/STR/N/16/CHN and G/STR/N/17/CHN, 24 July 2018. The period covered by the 
notification is 2015 -17. The authorities confirm that this remains the case as at early 2021.  
15 State Taxation Administration, together with the Ministry of Finance, issued the Circular on Policies for 
Simplifying and Consolidating Value -added Tax (VAT) Rates (Cai Shui No.  37, 2017), which reduced the 
applicable tax rate from 13% to 11% for agricultural products.  
16 Tobacco Tax Law of 2017. This Law replaced the Interim  Regulation on Tobacco Tax. The 20% tax 
rate did not change.  
17 WTO documents G/AG/N/CHN/51, 6  November  2019; and G/AG/N/CHN/53, 7  December  2020.  WT/TPR/S/ 415 • China  
 
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  programmes (i.e. expo rt credit, export credit guarantees, and insurance programmes) covering, 
inter alia, agricultural goods.18 With respect to the questionnaire on export competition circulated 
on 17  January 2020, the authorities indicate that the related information would be disclosed in its 
coming notification. No data were available on food aid provided by China during the rev iew period.  
4.19.   Export taxes are levied on four tariff lines (at the HS 8 -digit level) relating to products of 
animal origin, and two tariff lines on raw hides and skins (Table 3. 11).19 
4.20.   Exports of cotton, rice, maize, and tobacco are subject to state trading.20 These products, 
except for tobacco, are also subject to export quotas, which are managed by the NDRC and MOFCOM, 
and are allocated only to state trading enterprises. Wheat is also subject to export quotas 
(Table  4.6). 
Table 4.6 Agricultural products subject to export quotas and licensing in 2020  
Products  Type of licence  Comment  
Goods subject to quota and licensing  
Rice, maize, wheat, and cotton  Export quota licence  The quota is allocated by the 
NDRC and MOFCOM, and the 
licence is issued by MOFCOM.  
Live cattle and swine (for export to Hong Kong, 
China and Macao, China); live chicken for export to 
Hong Kong, China; and flour of maize rice and 
wheat  Export quota licenc e The quota is allocated by 
MOFCOM.  
Goods subject to licensing    
Live cattle and swine (for markets other than Hong 
Kong, China or Macao, China) and chicken (for 
markets other than Hong Kong, China) and frozen 
and chilled beef, pork, and chicken meat  Export licence  A licence is granted if the 
exporter has the relevant 
export contract.  
Source:  Information provided by the authorities.  
4.21.   Table 4.7 describes the size of the export quotas for maize, rice, and wheat flour in 2018, 
2019, and 2020.  
Table 4.7 Export quotas for maize, rice, and wheat flour, 2018 -20 
(Tonnes)  
Product  2018  2019  2020  
Maize flour  20,500  330 420 
Rice flour  2,500  50 60 
Wheat flour  329,600  154,200  155,540  
Source:  Information provided by the authorities.  
4.1.2.4.3   Internal measures  
4.1.2.4.3.1   Support measures  
4.22.   Central Government support to farmers takes the form of tax incentives (Table 4.8) or fiscal 
appropriations (Table 4.9). In 2018, China notified the WTO Agriculture Committee of the support 
given to the agriculture sector over the period  2011-16 (Section 4.1.2.4.4).21 Support programmes 
covering the period 2017 -18 were notified by China under the Agreement on Subsidies and 
Countervailing Measures (SCM  Agreement ). The only new notified programme introduced in 2018 
was the subsidy for a new round of returning cultivated land to forests and grassland. With respect 
to tax incentives, no information was provided on revenue forgone from Central Government tax 
incentives  (Table 4.8), as apparently China does not collect tax expenditures. Information was also 
 
18 WTO document WT/T PR/S/375/Rev.1, 14  September  2018.  
19 The lines concerned are 0506.10.00 (ossein and bones tr eated with acid); 0506.90.11, 0506.90.19, 
and 0506.90.90 (powder and waste of bones); and 4103.90.11 and 4103.90.19 (dried hides and skins of 
goats).  
20 WTO documents G/STR/N/16/CHN and G/STR/N/ 17/CHN, 24 July 2018.  
21 WTO documents G/AG/N/CHN/42 -47, 14  December 2018.  WT/TPR/S/ 415 • China  
 
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  not provided on which incentive schemes remain in force as at early 2021 and, in several cases, the 
form that fiscal appropriations take (i.e. grants, preferential lo ans, etc.).  
Table 4.8 Central Government tax incentives provided to the agriculture sector, 2018  
Title 
Legal basis  Objective  Subsidy  Start 
date 
Projects of agricultural, forestry, animal, 
and fishery  
Law of the People's Republic of China on 
Enterprise Income Tax (2007); 
Regulations for the Implementation of 
the Law of the People's Republic of 
China on Enterprise Income Tax (2007); 
MOF Circular Cai Shui No. 149, 2008; 
MOF Circular Cai  Shui No. 26, 2011;  
MOF Circular Cai Shui No. 73, 2016  To support the development of 
agriculture  Enterprise income tax 
exemption/reduction  from 
income derived by an enterprise 
from stipulated projects of 
preliminary processing related 
to farming, forestry, animal 
husbandry, and fisheries  2008  
Imported products for the purpose of 
replacing the planting of poppies  
MOF Circular Cai Shui No. 63, 2000  To support the replacement of the 
planting of poppies in the border 
areas in Yunnan province  VAT and tariff exemption  for 
approved imported products  2000 
Imports of seeds (seedlings)  
MOF Circular Cai Shui No. 26, 2016  To introduce and promote 
improved breeds, strengthen the 
protection of species resources, 
and develop high -quality, 
productive, and efficient 
agriculture  and forestry industries  VAT exemptions for approved 
imported  seeds (seedlings), 
breeding stock (fowl), fish fries 
(breeds), and wild animals  2006 
Preferential tax treatment for tea sold in 
the border areas  
MOF Circular Cai Shui No. 73, 2016  To reduce costs of ethnic 
minorities living in border areas to 
purchase border -selling tea, and 
ensure sufficient supply of border -
selling tea at border areas 
inhabited by ethnic minorities  VAT exemption for tea sold in 
border areas produced or 
distributed by  designated 
enterprises/distribution entities  2016 
Source:  WTO documents G/SCM/N/343/CHN, 19  July 2019; and G/SCM/N/343/CHN/Corr.1, 31  July 2019.  
Table 4.9 Central Government fiscal appropriations for the agr iculture sector, 2018  
Title 
Legal basis  Objective(s)  Subsidy  Start 
date Budgetary 
allotments  
(CNY million)  
Fund for development 
of agriculture  
MOF Circular Cai Nong 
No. 41, 2017  To promote agricultural 
production, optimize 
industrial structure, 
facilitate integration of 
industries, and improve 
agricultural efficiency  Provided to  farmers, family 
farms, farmer cooperatives, 
and agriculture machinery 
service providers for green 
and efficient technology 
promotion service and 
agricultural production 
development  2017 2018: 193,650  
Subsidy for agricultural 
comprehensive 
development  
MOF Decree No.  60 
(date not provided)  To strengthen agricultural 
infrastructure and 
ecological construction, 
improve comprehensive 
agricultural production 
capacity, promote the 
adjustment of agricultural 
structures, and increase 
farmers' incomes  Provided to  local governments 
for eligible agricultural 
comprehensive development 
projects  1988  2018: 39,540  
Fund for poverty 
alleviation (in Sanxi 
Area and for state -
owned poverty -
stricken farms and 
forestry farms)  
MOF Circular Cai Nong 
No. 8, 2017  To improve production, 
income, and living 
conditions of poor farmers, 
and accelerate economic 
and social development in 
poverty -stricken areas  Provided to local governments 
for development -oriented 
projects in Sanxi Area, and 
state-owned poverty -stricken 
farms and forestry farms  1980  2018: 106,095  
Fund for water 
resources development 
(for farmland water 
and soil conservation 
projects)  
MOF Circular Cai Nong 
No. 181, 2016  To supp ort rural areas to 
develop small farmland 
water conservation 
projects to prevent water 
and soil erosion  Provided to provincial 
governments for farmland 
water and soil conservation 
projects  1983  2018: 30,694.76  WT/TPR/S/ 415 • China  
 
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  Title 
Legal basis  Objective(s)  Subsidy  Start 
date Budgetary 
allotments  
(CNY million)  
Fund for disaster 
prevention and relief 
for agriculture, flood 
control, and drought 
MOF Circular Cai Nong 
No. 91, 2017  To support the response to 
agricultural disasters, 
floods, and droughts  To be allocated to 
beneficiaries that are to be 
determined in accordance with 
the disaster situation  2017  2018: 7,060.5  
Fund for agricultural 
resources and 
ecological protection  
MOF Circular Cai Nong 
No. 42, 2017  To be used for agricultural 
resource conservation, 
ecological protection, and 
benefit co mpensation  Provided to provincial 
governments to be allocated 
to eligible farmers, herdsmen, 
new types of agricultural 
entities, and units and 
individuals that undertake 
project tasks  2017  2018: 24,536  
Subsidy for a new 
round of returning 
cultivated land  to 
forests and grassland  
MOF Circular Cai Nong 
No. 66, 2018  To improve the ecological 
environment and promote 
sustainable development  Provided to provincial 
governments to be distributed 
to farmers to return cultivated 
land to forests and grassland  2018  2018: 12,789  
Note:  Forestry -related subsidies are not included in this table, with the exception of those related to 
turning cultivated land into forest.  
Source:  WTO documents G/SCM/N/343/CHN, 19  July 2019; and G/SCM/N/343/CHN/Corr.1, 31  July 2019.  
4.23.   The authorities indicate that pending China's new notification, which is apparently being 
prepared, information on new support programmes introduced during the review period (which are 
not covered in China's latest SCM notification) was not available. Howe ver, it would appear that 
since 2018, at least two  additional new programmes have been introduced: (i)  an environmental tax 
exemption for farming enterprises under which a temporary environmental protection tax exemption 
is provided for agricultural produc tion pollutant discharges (excluding large -scale breeding)22; and 
(ii) a subsidy fund for farmland construction  that aims to optimize the layout of farmland and improve 
its quality, and to attract talent and social capital to invest in agricultural develop ment. With respect 
to the latter, it would appear that farmland construction subsidy funds (comprising investment 
subsidies and loan discounts) are used for the construction of high -standard farmland and farmland 
water conservation. Target beneficiaries in clude small farmers, rural collective economic 
organizations, family farms, farmer cooperatives, large professional farms, and agricultural 
enterprises in grain production functional areas and important agricultural production protection 
areas.23 The budge tary allotments were CNY  67,392 million in 2019 and CNY  68,280 million in 2020.  
4.24.   A few subsidy programmes to support farmers at the sub -Central Government level were also 
notified to the WTO.24 Pending China's submission of its new notification to the SCM Committee, 
information was not available on whether these programmes remained in force as at early 2021 or 
if any new programmes have been introduced at the sub -Central Government level since 2 018. 
4.1.2.4.3.2   Price controls and market price support systems  
4.25.   As noted in previous Reviews, China implements a minimum purchase price policy for rice 
and wheat, considered to be the two most important grain varieties, in major producing areas. The 
authorities state  that, in general, farmers sell grain at market prices. Only when the market prices 
of rice and wheat fall below the minimum procurement prices (MPPs) can farmers sell the 
commodities that meet quality requirements to designated enterprises, so as to reduc e losses caused 
by falling grain prices. These prices, as well as limited total purchase volumes, are set on a yearly 
basis by the NDRC in consultation with MARA and other government agencies. The MPP of rice in 
 
22 Environmental Protection Tax Law of the People's Republic of China 2018, Article  12(1). Viewed at: 
https://www.ecolex.org/details/legisl ation/environmental -protection -tax-law-lex-faoc162625 . 
23 MARA, Cai Nong No.  46, 2019.  Viewed at: 
http://www.moa.gov.cn/gk/zcjd/201909/t20190904_6327227.htm . 
24 WTO documents G/SCM/N/ 343/CHN, 19  July 2019; and G/SCM/N/343/CHN/Corr.1, 31  July 2019. 
These programmes were: (i)  a grant for returning farmland to forests or pastures (Shanxi Province); (ii)  a 
subsidy for tobacco industry development (Fuling District of Chongqing Municipality) ; (iii) a reward for 
agricultural science parks (Qinghai Province); (iv)  a fund for treating domestic sewage in farming and pastoral 
areas (Qinghai Province); and (v)  a grant for turning the cultivated land into forestry (Dalian City, Liaoning 
Province).  WT/TPR/S/ 415 • China  
 
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  2018 was substantially lowered, while the MP Ps of wheat in both 2018 and 2019 were slightly 
lowered. (Table 4.10).  
Table 4.10 Minimum procurement prices, 2016 -21 
(CNY/tonne)  
 2016  2017  2018  2019  2020  2021  
Wheat  2,360  2,360  2,300  2,240  2,240  2,260  
Rice – early long -grain non -glutinous  2,660  2,600  2,400  2,400  2,420  .. 
Rice – late long -grain non -glutinous  2,760  2,720  2,520  2,520  2,540  .. 
Rice – round -grained non -glutinous  3,100  3,000  2,600  2,600  2,600  .. 
.. Not available.  
Source  Information provided by the authorities.  
4.26.   Grain reserves of maize, rice, soya beans, and wheat are maintained by the Central 
Government and local governments ; according to the authorities , the reserves are used only to cope 
with major natural disasters or other emergencies.  
4.1.2.4.3.3   Other measures  
4.27.   Under a subsidized agricultural insurance scheme, insurance premiums are subsidized by the 
Central Government and local governments, so that farmers pay only a balance of 20% -30% of the 
premium. The insurance scheme covers natural disasters such as rainstorms, floods, and droughts, 
but not income or levels of production. The distribution of financing between the Central Government 
and local governments varies by crop (Table 4.11). Data on total expenditures wer e not available.  
Table 4.11 Distribution of the financing of the agricultural insurance scheme between 
central and local authorities  
 Crops  Breeding  Non-commercial 
forestry  Commercial 
forestry  Tibetan 
varieties and 
natural rubber  
Central 
Government  40% in central 
and western 
regions; 35% in 
the eastern region  50% in central and 
western regions; 
40% in the eastern 
region  50% 30% 40% 
Local 
governments  25% 30% 40% 25% 25% 
Source:  Information provided by the authorities.  
4.28.   The authorities indicate that all banks are allowed to provide financing to agricultural projects 
based on commercial conditions. Following on from efforts taken by the People's Bank of China 
(PBOC) to increase access to financ e in rural areas as reported in China's previous Review, in 
April 2020, the PBOC cut the Required Reserve Ratio by 1 percentage point, with a cut of 
0.5 percentage points on 15  April and again on 15  May, for rural credit cooperatives, rural 
cooperative ban ks, and village banks, as well as city commercial banks operating solely within 
provincial -level administrative regions.  
4.1.2.4.4   Levels of support  
4.29.   In December 2018, China notified its domestic support commitments for the calendar 
years  2011 to 2016.25 These notifi cations show no support under the Blue Box (production limiting 
schemes) until 2016 , when China notified corn producer subsidies paid, based on fixed area and 
yields. Support notified under the Green Box increased year -on-year. Support under the Amber Box 
(including de minimis ) increased from 2011 to 2015 and then decreased significantly in  2016 
(Chart  4.3). 
4.30.   The OECD continues to calculate estimates of support to agriculture in China that provide 
more up -to-date indicators over the review period (with data available up to 2019) than do China's 
support notifications to the WTO (which cover up to 2016). However, the authorities indicate that 
 
25 WTO documents G/AG/N/CHN/42 -47, 14  December  2018.  WT/TPR/S/ 415 • China  
 
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  OECD data do not reflect China's official position and that they could not confirm OECD estimates; 
they do not agree wit h the methodologies or data source of the estimation.  
Chart 4.3 Green and Amber Box support, 2011 -16 
 
Source:  WTO documents G/AG/N/CHN/42 -47, 14  December 2018.  
4.31.   Compared with the WTO's methodology used to calculate the level of support provided under 
the Amber, Blue, and Green Boxes, the OECD's annual monitoring and evaluation reports on 
agricultural policies use a different methodology to calculate the value of support that is expressed 
in a number of indi cators, including: (i)  the Producer Support Estimate (PSE) for gross transfers 
from consumers and taxpayers to agricultural producers; (ii)  the Total Support Estimate (TSE) for 
transfers to the agricultural sector in general; and (iii)  the Single Commodity  Transfers (SCT) for 
transfers to specific commodities. As noted in previous Reviews, the PSE represents the value of 
transfers to producers, unlike support under the Amber, Blue, and Green Boxes that measure 
compliance with WTO commitments. Therefore, the  value of support as notified to the WTO is neither 
compatible nor comparable with the values calculated by the OECD.26 
4.32.   According to the OECD, total support to agriculture over the past decade peaked at 
CNY 2,676.7  billion in 2015, dropped to CNY  1,462.4  billion by 2018 , and then picked up slightly 
in 2019. Most of the total support to agriculture is from market price support arising from tariff 
protection, government purchases, and other programmes (Chart 4.4). While domestic prices 
remain, in general, gre ater than import prices, the gap has closed for certain products like wheat 
and milk, which at the time of China's previous Review had high producer nominal protection 
coefficients (the ratio of the price received by the producers to the border price). For  wheat, the 
 
26 OECD (2017), Agricultural Policy Monitoring and Evaluation 2017, OECD Publishing, Paris. Viewed at: 
http://dx.doi.org/10.1787/agr_pol -2017-en. 
050100150200250300350
2011 2012 2013 2014 2015 2016Corn
Rice
Wheat
Cotton
Soybean
Pigs, sheep, cows
Root crops, peanuts
Rapeseed
Sugar
Non-product specific02004006008001,0001,2001,400
2011 2012 2013 2014 2015 2016Thousands Infrastructure services
 Extension and advisory services
 Research, pest and disease
control, training
 All other general services
 Environmental programmes
 Public stockholding for food
security
 Payments for relief from natural
disasters
 Regional assistance programmes
 Decoupled income support,
domestic food aid
Source: WTO Secretariat notifications:  G/AG/N/CHN/42 to 47.Chart 4.[CHN]   Green and Amber Box support, 2011 -16
(CNY billion)WT/TPR/S/ 415 • China  
 
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  producer nominal protection coefficient  was 1.82 in 2016 and decreased to 1.18 in 2019. For milk 
at its peak, the coefficient  was 1.94 in 2016 and fell to 1.46 in 2019 (Table 4.12 ). 
Chart 4.4 OECD measurement of support, 2010 -19 
 
Source:  OECD, Agricultural Policy Monitoring and Evaluation . Viewed at: 
http://www.oecd.org/agriculture/topics/agricultu ral-policy -monitoring -and-evaluation/ . 
Table 4.12 OECD indicators for support to agriculture in China, 2010 -19 
(CNY billion, except nominal protection coefficient ) 
  2010  2011  2012  2013  2014  2015  2016  2017  2018  2019  
Total value 
of 
production  5,776.7  6,775.9  7,413.0  7,993.3  8,372.8  8,285.5  8,612.1  8,742.1  9,015.0  10,166.9  
TSE 902.3  804.1  1,273.0  1,461.4  1,523.7  1,676.7  1,653.8  1,633.4  1,462.4  1,521.8  
PSE 762.2  659.6  1,102.4  1,269.1  1,302.3  1,391.9  1,403.0  1,374.6  1,225.3  1,284.8  
MPS 529.3  388.4  788.0  939.5  961.4  1,013.7  999.0  937.9  783.0  834.8  
Producer 
nominal 
protection 
coefficient  1.15 1.10 1.17 1.18 1.18 1.19 1.18 1.18 1.15 1.14 
Wheat            
Value of 
production  230.0  246.6  265.4  291.5  309.5  308.9  297.5  313.2  294.9  300.0  
SCT 64.9 35.2 79.7 83.6 105.0  111.2  134.1  111.5  71.9 46.2 
MPS 64.9 35.2 79.7 83.6 105.0  111.2  134.1  111.5  71.9 46.2 
Producer 
nominal 
protection 
coefficient  1.39 1.17 1.43 1.40 1.51 1.56 1.82 1.55 1.32 1.18 
Maize            
Value of 
production  357.2  448.3  510.2  540.7  558.7  499.4  405.9  425.7  451.6  467.1  
SCT 74.5 11.1 60.2 128.9  156.3  133.5  81.5 80.1 102.6  96.0 
MPS 74.5 11.1 60.2 128.9  156.3  133.5  71.0 70.2 92.4 85.8 
Producer 
nominal 
protection 
coefficient  1.26 1.03 1.13 1.31 1.39 1.36 1.21 1.20 1.26 1.22 
Rice           
Value of 
production  462.0  540.8  564.0  555.9  580.8  574.8  566.5  586.3  549.1  523.5  
SCT -2.3 -56.3 162.1  176.3  185.2  204.8  165.5  157.6  59.5 34.1 
MPS -2.3 -56.3 162.1  176.3  185.2  204.8  165.5  157.6  59.5 34.1 
Producer 
nominal 
protection 
coefficient  1.00 0.91 1.40 1.46 1.47 1.55 1.41 1.37 1.12 1.07 
02,0004,0006,0008,00010,00012,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Total value of production (at farm gate)
 Producer support estimate
  Market price support
 Total support estimateChart 4.[CHN] OECD measurement of support, 2010-19
CNYbillion
Source: OECD.  Viewed at: http://www.oecd.org/agriculture/topics/agricultural -policy -monitoring -and-evaluation/ .WT/TPR/S/ 415 • China  
 
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    2010  2011  2012  2013  2014  2015  2016  2017  2018  2019  
Soya beans           
Value of 
production  55.9 57.8 60.9 54.0 51.0 41.0 43.7 53.3 55.5 63.1 
SCT 10.1 7.3 4.7 3.8 2.7 11.0 11.2 17.3 16.1 19.1 
MPS 10.1 7.3 4.7 3.8 2.7 7.7 5.2 4.5 3.4 6.3 
Producer 
nominal 
protection 
coefficient  1.22 1.15 1.08 1.08 1.06 1.23 1.14 1.09 1.06 1.11 
Milk           
Value of 
production  105.9  116.9  127.5  135.2  143.3  133.8  136.3  114.7  113.3  124.2  
SCT 10.2 15.0 34.1 34.3 33.7 58.9 65.2 40.3 37.0 37.4 
MPS 10.2 15.0 34.1 34.3 33.7 58.9 65.2 40.3 37.0 37.4 
Producer 
nominal 
protection 
coefficient  1.12 1.15 1.38 1.36 1.33 1.82 1.94 1.55 1.52 1.46 
Beef and veal           
Value of 
production  184.8  225.9  300.7  346.8  341.5  330.5  339.3  303.8  321.7  367.4  
SCT 23.5 29.9 39.2 44.7 43.8 42.3 43.5 39.2 40.9 47.0 
MPS 23.5 29.9 39.2 44.7 43.8 42.3 43.5 39.2 40.9 47.0 
Producer 
nominal 
protection 
coefficient  1.16 1.16 1.16 1.16 1.16 1.16 1.16 1.16 1.16 1.16 
Pig meat            
Value of 
production  783.0  1,149.7  1,061.7  1,082.4  1,018.3  1,125.8  1,311.0  1,095.7  941.9  1,116.2  
SCT 93.8 157.4  117.7  110.4  99.3 123.8  152.3  122.9  99.3 132.7  
MPS 93.8 157.4  117.7  110.4  99.3 123.8  152.3  122.9  99.3 132.7  
Producer 
nominal 
protection 
coefficient  1.16 1.16 1.16 1.16 1.16 1.16 1.16 1.16 1.16 1.16 
Poultry meat           
Value of 
production  326.6  364.0  347.9  368.2  370.0  361.3  365.9  399.2  476.9  577.3  
SCT 41.4 52.5 44.5 43.8 46.1 46.3 50.5 61.0 69.8 86.1 
MPS 41.4 52.5 44.5 43.8 46.1 46.3 50.5 61.0 69.8 86.1 
Producer 
nominal 
protection 
coefficient  1.17 1.17 1.17 1.17 1.18 1.18 1.18 1.20 1.19 1.19 
Source:  OECD, Agricultural Policy Monitoring and Evaluation . Viewed at:  
http://www.oecd.org/agriculture/topics/agricultural -policy -monitoring -and-evaluation/ . 
4.1.3   Fisheries  
4.1.3.1   Features and market developments  
4.33.   China is one of the world's largest fish -producing country. According to the UN Food and 
Agriculture Organization (FAO), it accounted for 35% of global fish production in 2018. In the same 
year, it accounted for around 15% of total global capture, and its share in world aquac ulture 
production was 57.9%.27 
4.34.   During the period between 2015 and 2019, there was a downward trend in employment, the 
number of registered fishing vessels, and the marine catch. Aquaculture production remained 
relatively stable (Table 4.13).  
4.35.   During the sam e period, fish exports (WTO definition) accounted for between 0.8% and 1.0% 
of the value of its total exports. Imports of fish gradually increased from 0.4% to 0.7% of total 
imports over the same period (Table 4.14). Data provided by the authorities indica te that, in 2019, 
China imported 6.3 million tonnes of fish and exported 4.3 million tonnes. The simple average tariff 
on fish and fishery products (WTO definition) was 6.8% in 2021, with tariffs ranging from 0 %-15% 
 
27 FAO (2020), The State of the World Fisheries and Aquaculture 2020 . Viewed at: 
http://www.fao.org/3/ca9229en/online/ca9229en.html#chapter -1_1. WT/TPR/S/ 415 • China  
 
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  (Table A3.1). Export duties are levied o n one tariff line for fish and crustaceans, namely  live eels, 
fry (HS 0301.92.10) (Table  3.11).  
Table 4.13 Fisheries indicators, 2015 -19 
 2015  2016  2017  2018  2019  
Employment  9,045,338  8,795,228  8,692,042  8,514,503  8,253,274  
Fishing vessels (of which 
motorized fishing vessels)  1,042,489  
(672,416)  1,011,071  
(654,154)  946,160  
(599,331)  863,892  
(556,150)  731,169  
(468,312)  
Marine catch ('000 tonnes)  
(of which algae)  17,617.476  
(26.177)  17,588.591  
(24.311)  15,393.376  
(20.349)  14,665.968  
(18.349)  14,012.888  
(17.445)  
Aquaculture production ('000 
tonnes)  
(of which algae)  49,379.012  
(2,098.078)  51,423.931  
(2,178.103)  49,059.903  
(2,235.012)  49,910.590  
(2,350.810)  50,790.728  
(2,543.861)  
Note:  The number of fishing vessels and the figures on the marine catch include China's distant water fleet 
and the catch on these vessels. Motorized fishing vessels include production fishing vessels and 
auxiliary fishing vessels, of which production fishing vessels include fishing vessels and culturing 
vessels. Fish catches include domestic marine fishing volume, pelagic fishing volume, and freshwater 
fishing volume. Aquaculture production includes mariculture output and freshwater aq uaculture 
output.  
Source:  Information provided by the authorities.  
Table 4.14 Fishery exports and imports, 2015 -20 
  2015  2016  2017  2018  2019  2020  
Exportsa (USD million)  19,802.4  20,205.2  20,601.7  21,740.3  20,163.0  18,589.4  
 % of total exports  0.9 1.0 0.9 0.9 0.8 0.7 
 Growth rate (%)  -6.0 2.0 2.0 5.5 -7.3 -7.8 
Top five exports at HS 4 -digit level 
(% of total):        
 1604 Prepared/preserved fish; 
caviar and caviar substitutes  15.1 14.4 15.0 16.9 18.6 22.4 
 1605 Crustaceans, molluscs, etc., 
prepared/preserved  16.5 16.8 19.8 21.3 18.4 18.7 
 0304 Fish fillets and other fish 
meat, fresh, chilled or frozen  21.6 21.0 21.4 20.6 21.3 18.0 
 0307 Molluscs, live, fresh, chilled, 
frozen, salted or in brine  17.2 18.2 16.5 15.1 14.6 14.6 
 0303 Fish, frozen, excluding fish 
fillets and other fish meat of 
heading 0304  12.8 13.6 13.3 13.2 14.1 12.8 
Importsa (USD million)  8,489.0  8,850.0  10,711.9  14,377.4  17,996.6  14,920.2  
 % of total imports  0.4 0.5 0.6 0.6 0.7 0.9 
 Growth rate (%)  -0.5 4.3 21.0 34.2 25.2 -17.1 
Top five imports at HS 4 -digit level 
(% of total):        
 0306 Crustaceans, live, fresh, 
chilled, frozen, salted or in brine  21.9 24.0 23.5 30.4 39.0 39.6 
 0303 Fish, frozen, excluding fish 
fillets and other fish meat of 
heading 0304  36.3 36.6 34.7 31.7 27.4 26.3 
 230120b Flours, meals and pellets 
of fish or crustaceans /molluscs etc.  21.2 18.3 20.8 15.5 11.0 13.2 
 0307 Molluscs, live, fresh, chilled, 
frozen, salted or in brine 9.7 10.3 9.7 8.7 8.7 7.9 
 0304 Fish fillets and other fish 
meat, fresh, chilled or frozen  1.6 1.7 2.1 3.1 3.6 3.5 
a WTO definition.  
b Shown at HS 6-digit level since only the 6-digit level code 230120 under 2301 is a fishery item . 
Note:  Top five fishery exports and imports by HS 4 -digit are sorted by the year 2020.  
Source:  WTO Secretariat calculations, based on trade figures from UN Comtrade database.  
4.1.3.2   Legal, institutional, and policy framework  
4.36.   MARA leads the preparation of draft laws and regu lations related to fisheries, develops 
departmental regulations, and guides fishery law development. Local governments are in charge of 
fisheries affairs in their respective administrative areas, including marine fisheries in contiguous sea WT/TPR/S/ 415 • China  
 
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  areas (unless t he State Council designates otherwise). Official information was not provided on the 
presence of SOEs in the shipping sector.  
4.37.   The main law governing the fisheries sector is the 2005 Fisheries Law, last amended in 2013. 
A revision to the Fisheries Law was d rafted and comments were solicited in 2019; as at April 2021, 
the draft law was being revised. The Rules for the Implementation of the Fisheries Law were 
amended in 2020, with changes relating to approval reequipments for constructing artificial reefs.28 
In 2018, MARA revised the Provisions on the Administration of Fishing Licences (MARA Decree No.  1, 
201829), and certain articles of these Provisions were further amended in 2020.30 The objective was 
to strengthen the management of fishing vessels and fishing licences; protect fishery resources; 
adapt to the Government's requirement for decentralization, regulation, and service; and address 
problems such as illegal shipbuilding, inco nsistent ship certificates, and off -site anchoring, which 
have made supervision difficult. Changes include bringing the method for classifying fishing vessels 
into conformity with international management rules; stipulating central and local entities 
respo nsible for examining, approving, and controlling vessels' catch quotas and net devices used; 
and stipulating the sea areas where  the different -sized vessels may fish in. The Provisions also 
include specific guidance on fishing log contents, submission meth ods, and punitive measures for 
violations. According to the authorities, first steps are being taken to introduce a total allowable 
catch system. However, further details were not provided.  
4.38.   Under the Fisheries Law, foreigners and foreign fishing vessels en gaging in fishery production 
in waters under China's jurisdiction must be approved by MARA. If the vessels belong to China's 
trading partners that have signed relevant treaties/agreements with China, the matters are handled 
in accordance with these treatie s.31 The Special Administrative Measures for the Access of Foreign 
Investment in the Pilot Free Trade Zones (2019) (FTA Negative List) lifted restrictions on foreign 
investment in aquatic product fishing in seas and inland waters under China's jurisdiction . The 
authorities indicate that the Government currently imposes no restrictions on FDI in aquaculture 
production.  
4.39.   The main government strategy for the fishing sector implemented during the review period 
was the 13th Five-Year Plan on Fishery Development (2016 -20).32 The Plan sought to tackle some of 
the main challenges facing the sector, including infrastructure weaknesses and old fishing vessels, 
and requirements in the areas of fisheries insurance and the developme nt of a legal framework for 
fisheries and its enforcement. The Plan's basic principles are to: (i)  adhere to ecology as a priority 
and promote green development, with a shift in focus from quantity growth to improving quality and 
efficiency; (ii)  promote i nnovation and scientific development; (iii)  implement a "going out" strategy 
involving, inter alia , the orderly development of deep -sea fisheries, improvements to the industrial 
chain, and strengthening of bilateral and multilateral fishery cooperation; (i v) adhere to people -
oriented development so those who are engaged in fishing are participants in and benefit from 
fishery modernization; and (v)  strengthen the rule of law in the sector, through improved laws, 
regulations, and enforcement mechanisms. One o f the elements of the Plan is to increase public 
financial investment in the fisheries sector to, inter alia, establish a policy support system that is 
conducive to the development of modern fisheries. Elements include reform and improvement of the 
fishery  oil price subsidy and a focus on supporting the reduction in the number of boats, the 
renovation and transformation of fishing vessels, the construction of artificial reefs, the maintenance 
and transformation of fishing ports, the standardization of ponds , the further development of factory -
based aquaculture, and subsidies for banned fishing.33 The Plan also stipulates the continued 
implementation of support policies for: (i)  multiplying and releasing healthy aquaculture breeding 
stock; (ii)  ensuring speci al funds for fishery administration, resource investigation34, species 
 
28 Rules for the Implementation of the Fisheries Law (2020), amended through State Council Decree 
No. 726. Viewed at: http://www.gov.cn/zhengce/2020 -12/25/content_5574001.htm . 
29 MARA Decree No.  1, 2018. Viewed at: 
http://www.yy j.moa.gov.cn/bjwj/201904/t20190419_6197470.htm . 
30 MARA Order No.  5, 2020. Viewed at: 
http://www.moa.gov.cn/nybgb/2020/202008/202010/t20201020_6354689.htm . 
31 Fisheries Law,  Article  8. 
32 MARA, China's 13th Five-Year Plan on Fishery Development. Viewed at: 
http://www.moa.gov.cn/nybgb/2017/derq/201712/t20171227_6131208.htm . 
33 Subsidies for banned  fishing refer to the livelihood subsidy for fishermen and -women affected by 
fishing moratoria and fishing bans.  
34 Resource investigation refers to the investigation of the reproduction, growth, death, migration, 
distribution, quantity, habitat, prospects , and means of exploitation of individuals or groups of aquatic animals.  WT/TPR/S/ 415 • China  
 
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  resource protection, disease prevention and control, quality and safety supervision, fishing port 
supervision, safety production supervision, and fishing vessel inspection supervision; (iii) increasing 
aquatic breeding, disease prevention, resource conservation, fishery equipment, and other 
technological innovations and promotion support. The fisheries sector objectives in the 14th Five-Year 
Plan for Economic and Social Development inclu de: achieving a breakthrough in a number of key 
core technologies in areas such as marine engineering, marine resources, and marine environment ; 
cultivating and expanding marine engineering equipment and marine biomedicine industries ; 
optimizing offshore g reen breeding  and building marine pastures ; building a number of marine 
economic development demonstration zones and characteristic marine industrial clusters ; and 
improv ing the development of the three major marine economic circles in the north, east , and south.  
4.1.3.3   Government support to the fisheries sector  
4.40.   Support to the sector is provided by both the Central Government and local/provincial 
governments. China's latest notification to the WTO covers the period 2017 -18 and contains 
six incentives/support programmes at the Central Government level; these relate to fuel subsidies 
and supporting fish processing, enhancing fish stocks,  supporting aquatic breed improving farms,  
preventing aquatic animal disease, and scrapp ing and renovating fishing vessels (Table A4.1). 
According to the authorities, the Government will shortly issue a new policy to terminate fuel and 
boat construction subsidies, with the last of these pay -outs being made at end -2020.  
4.41.   Twenty -three programmes  over the period 2017 -18 were notified to the WTO regarding 
measures in place in the coastal provinces of Hebei, Jilin, Jiangsu, Zhejiang, Fujian, Shandong, 
Guangdong, and Liaoning. These included support for marine economic development, marine and 
fishery  structural adjustment, aquatic breeding, supporting fishermen during the closed season, 
fishery insurance, fishery management and industry development, fishing vessel standardization 
and scrapping, processing, aquaculture, and distant water fisheries (Tab le A4.1). Pending China's 
new notification to the SCM Committee, information was not available on any new support/incentive 
schemes introduced at the local government level from the beginning of 2019. The authorities 
indicate that the notification is being  prepared.  
4.42.   The authorities note that fisheries insurance has not been incorporated in the policy -based 
agricultural insurance.  
4.1.3.4   Fisheries conservation measures  
4.43.   China is a major player in the distant water fisheries segment. As indicated by the FAO, China 
reported about 2.26 million tonnes from its "distant water fishery" in 2018; however, this is 
considered to be an underestimate, as the report provided details on species and fishing areas only 
for catches marketed in China (about 40% of the total of distant  water catches).35 The authorities 
indicate that China has taken measures recently to strengthen monitoring and control of fishing 
vessels, enhance its international compliance capability, fulfil its international obligations to conserve 
high-seas fishery resources, and prevent illegal, unreported, and unregulated (IUU) fishing activities 
(Box 4.1). They also indicate that China has undertaken investigations into various kinds of illegal 
fishing activities, and punished illegal enterprises and fishing vesse ls in accordance with the law. 
According to the authorities, between January 2018 and early 2021, the Government imposed 
different levels of penalties on 84 deep -sea fishing vessels belonging to 51 enterprises.  
4.44.   China has acceded to various international co nventions or agreements related to fisheries.36 
During the review period, China became a signatory to the Southern Indian Ocean Fisheries 
 
35 FAO (2020), The State of the World Fisheries and Aquaculture 2020 . Viewed at: 
http://www.fao.org/ 3/ca9229en/online/ca9229en.html#chapter -1_1. 
36 These conventions/agreements include: (i)  the International Convention for the Conservation of 
Atlantic Tunas (ICCAT); (ii)  the Agreement for the Establishment of the Indian Ocean Tuna Commission 
(IOTC); (iii)  the Convention on the Conservation and Management of Highly Migratory Fish Stocks in the 
Western and Central Pacific Ocean (WCPFC); (iv)  the Inter -American Tropical Tuna Commission Convention for 
the Strengthening of the Inter -American Tropical Tuna Commi ssion Established by the 1949 Convention 
between the United  States of America and the Republic of Costa Rica "Antigua Convention" (IATTC); (v)  the 
Convention for the Conservation of Antarctic Marine Living Resources (CCAMLR); (vi)  the Convention on the 
Conservation and Management of High Seas Fishery Resources in the South Pacific Ocean (SPRFMO); (vii)  the 
Convention on the Conservation and Management of High Seas Fisheries Resources in the North Pacific Ocean 
(NPFC); and (viii)  the International Convention  for the Regulation of Whaling.  WT/TPR/S/ 415 • China  
 
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  Agreement in October 2019. China has not acceded to the FAO's Port State Measures Agreement; 
the authorities state tha t they are studying this possibility and that the Government has included 
the list of IUU fishing vessels released by the acceding regional fisheries organizations into the 
controlling scope of Chinese ports. They note that China prohibits fishing vessels on the list from 
entering Chinese ports; refuses such fishing vessels to refuel, resupply, or repair in Chinese ports; 
and refuses the catches carried by such fishing vessels to be unloaded, transhipped, packed, or 
processed in Chinese ports.  
Box 4.1 Fisheries conservation measures, 2018 -20 
1. January 2019 – Notice on Further Strictly Adhering to International Tuna Management Measures issued by 
MARA. Objective: to implement resource conservation and management me asures adopted by the 
International Tuna Conservation Organization.  
2. January  2019 – List of IUU  fishing vessels approved by relevant regional fishery organizations provided by 
MARA and Ministry of Foreign Affairs, the Ministry of Communications, the General Administration of Customs 
(GACC), and other domestic departments and commercial and fishing p orts. Objectives: to implement Port 
State Measures and tackle illegal fishing activities. This list was updated in June 2020.  
3. August 2019 – Measures for the Monitoring and Management of Positions of Ocean Fishing Vessels revised 
by MARA. Objective: to strengthen supervision of ocean fishing vessels by increasing the frequency of 
reporting positions of fishing vessels from every 4 hours to every hour.  
4. November 2019 – Notice on Trial Implementation of Performance Evaluation of Pelagic Fishery Enterpri ses 
issued by MARA. Objectives: to establish a performance evaluation system for pelagic fisheries to strengthen 
fishery management and improve performance capability of pelagic fishery enterprises.  
5. April 2020 – Revised Regulations on the Management o f Pelagic Fishery implemented. Objectives: to 
strengthen supervision and management, and sustainable utilization of fishery resources; and to prevent IUU 
fishing activities.  
6. May 2020 – Notice on Strengthening the Management of High -Seas Transfer of Pel agic Fisheries issued by 
MARA. Objectives: to further standardize high -seas transfer activities and promote scientific conservation of 
high-seas fishery resources.  
7. July 2020 – Government implementation of a fishing moratorium on high -seas squid fisheri es and take all -
around management measures to protect high -seas squid resources and spawning population. Objective: to 
strengthen conservation of high -seas squid resources.  
Source:  Information provided by the authorities.  
4.2  Mining and Energy  
4.2.1   Mining  
4.45.   China has an abundance and a large variety of mineral resources. By end -2018, 173 kinds of 
minerals had been discovered, including 13 kinds of energy minerals, 59  kinds of metal minerals, 
95 kinds of non -metal minerals, and 6 kinds of water and gas mineral s.37 The main mining production 
is described in Table 4.15.  
Table 4.15 Main mining production, 2017 -19 
Mineral products  2017  2018  2019  
Crude oil (million tonnes)  192 189 191 
Natural gas (billion m3) 133.0  141.5  150.9  
Shale gas (billion m3) 9.0 10.9 15.4 
Coal (billion tonnes)  2.78 3.04 3.13 
Ferrous metals (billion tonnes)  
 of which iron ore (billion tonnes)  0.575  
0.567  0.591  
0.583  0.624  
0.613  
Non-ferrous metal (million tonnes)  327.69  361.70  376.13  
Precious metal (million tonnes)  94.09  91.41  88.67  
Rare elements, rare earth elements and scattered elements (million tonnes)  12.98  42.70  34.91  
Metallurgical auxiliary materials (e.g.  cannonite) (million tonnes)  111.49  127.80  142.55  
Chemical materials (million tonnes)  276.26  269.49  296.40  
Construction materials and other non -metal mineral (billion tonnes)  3.90 4.08 4.45 
Underground water and mineral water (million  tonnes)  12.06  12.87  12.80  
Source:  Information provided by the authorities.  
 
37 MNR (2019), China Mineral Resources . Viewed at: 
http://www.chinaminingtj.org/images/document/2019/CM_Resources_2019_en.pdf . WT/TPR/S/ 415 • China  
 
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  4.46.   The legal framework for mining did not change substantially during the review period. To a 
large extent, mining activities continue to be regulated under the Mineral Resources Law 
(promulgated in March 1986, and revised in August 1996 and Augu st 2009 ) and a large body of 
implementing measures: the Rules for the Implementation of the Mineral Resources Law ( State 
Council Decree No.  152, 26  March  1994); the Regulations for Registering to Explore for Mineral 
Resources Using the Block System ( State Council Decree No.  240, 12  February  1998; amended on 
29 July 2014); the Procedures for Administration of Registration of Mining of Mineral Resources 
(State Council Decree No.  241, 12 February  1998, amended on 29  July 2014); and the Measures for 
the Adminis tration of Transfer of Mineral Exploration Right and Mining Right ( State Council Decree 
No. 242, 12 February  1998, amended on 29  July 2014). Other regulations in the sector include the 
Regulation on the Exploitation of Continental Petroleum Resources in Co operation with Foreign 
Enterprises ( State Council Decree No.  131, 7 October  1993, amended on 18  July 2013) and the 
Regulations on the Exploitation of Offshore Petroleum Resources in Cooperation with Foreign 
Enterprises (amended on 18  July 2013). The Law on  the Exploration and Development of Resources 
in Deep Seabed Areas (adopted on 26  February  2016 and entered into force on 1  May 2016) 
regulates the exploration and exploitation of deep seabed resources. A Resource Tax Law was 
adopted in 2019.  
4.47.   The Ministry of Natural Resources (MNR) was established in 2018. Its area of competence 
consolidates the responsibilities of the former Ministry of Land and Resources and those of the 
National Administration of Surveying, Mapping and Geoinformation.  
4.48.   China continued to liberalize its mining sector during the review period. For example, the 
2019 National Negative List and Pilot Free Trade Zones (PFTZs) Negative List removed foreign 
investment prohibitions on the exploration or mining of molybdenum, tin, antimony, and fluo rite. In 
the 2018 PFTZ Negative List, the measure that oil and natural gas exploration and development shall 
be restricted to equity joint ventures or contractual joint ventures was abolished, and the same 
measure was abolished nationally in 2019. No modif ication pertaining to mining was made to the 
2020 editions of National and PFTZ Negative Lists. The only foreign investment limitation in mining 
consists of prohibition of foreign investment in the exploration, exploitation, and processing of rare 
earth s, radioactive minerals, and tungsten.  
4.49.   The Constitution proclaims state ownership of all minerals. However, the Government may 
transfer to a qualified holder the right to possess, use, and benefit from the mineral resources. The 
Civil Code protects the explor ation and mining rights obtained according to the law. Methods and 
processes for obtaining mining rights did not change substantially during the review period.38 Mining 
rights can be acquired through tender, auction, or listing, or agreements in limited ca ses. Subject 
to the Negative List for the Access of Foreign Investments (Table 4.16), China allows foreign 
companies and individuals to invest in exploration and exploitation of the mineral resources within 
its territory and sea areas under its jurisdictio n. They operate in the exploration and exploitation of 
minerals under the same condition as their domestic counterparts.  
4.50.   Steps were taken in the recent years to reform administrative procedures with respect to 
mining rights allocation. In 2017, the Ministry of Land and Resources issued four normative 
documents39 aiming to, inter alia : (i) improve the approval, registration, and management system 
of mineral exploration and mining rights; and (ii)  streamline the mineral rights application process.40 
Along the same lines, efforts were made by the authorities to encourage allocation of mining rights 
through competitive procedures . In fact, the Opinion of the MNR on Several Matters Concerning 
Promoting the Reform of Mineral Resources Administration (for Trial Implementation) (published on 
31 December 2019), in line with the Overall Programme for the Reform of the Ecological Civilis ation 
System (published on 21  September  2016), seeks to abolish the application for prior distribution of 
mineral resources, reduce the proportion of mineral resources allocated through agreements, and 
promote the competitive allocation of mineral resource s. While the Opinion requires the competent 
authorities to implement tender, auction, and listing methods to grant mineral rights, it imposes 
strict restrictions on the granting of mineral rights via agreements. At the same time, it stipulates 
 
38 WTO document WT/TPR/S/375/Rev.1, 14  September  2018.  
39 These documents are: (i)  Mineral Rights Transfer Rules; (ii)  Notice on Further Standardizing Approval, 
Registration and Mana gement of Mineral Resources Exploration; (iii)  Notice on Further Standardizing Mineral 
Rights Application Materials; and (iv)  Notice on Improving Issues Related to Approval, Registration and 
Management of Mineral Resources Exploitation.  
40 MNR (2018), China  Mineral Resources . Viewed at: https://www.gov.cn/xinwen/2018 -10/22/5333589/ 
files/01d0517b9d6c430bbb927ea5e48641b4.pdf . WT/TPR/S/ 415 • China  
 
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  that the exp loration rights and mining rights for key construction projects approved by the State 
Council, or projects related to exploration and exploitation of rare earths and radioactive minerals, 
may be granted by the agency in charge of natural resources through agreements.  
Table 4.16 Mining industry foreign investment regime, 2017 and 2020  
 2017  2020  
Encouraged  Exploration and exploitation of oil and natural gas as 
well as utilization of mine gas (limited to Chinese -
foreign equity or contractual joint ventures)  Exploration and exploitation of oil and 
natural gas, as well as utilization of mine gas  
Improvement in enhanced oil recovery (in the form 
of engineering services), as well as development and 
application of related new technologies  Same as in 2017  
Development and application of new technologies for 
oil exploration and exploitation in areas such as 
geophysical prospecting, drilling, well logging, mud 
logging, and down -hole operation  Same as in  2017 
Development and application of new technologies for 
enhancing utilization rate of mine tailings and the 
comprehensive application of ecological restoration 
technology in mining areas  Same as in 2017  
Exploration and exploitation of mines in short supply 
in China (such as mines of sylvite and chromite) and 
mineral separation  Same as in 2017  
Restricted  Exploration and exploitation of oil and natural gas 
(including coal -bed gas and excluding oil shale, oil 
sand, shale gas, etc.) (limited to Chinese -foreign 
equity or contractual joint ventures)  Not listed  
Exploration and exploitation of special and rare kinds 
of coal (with Chinese party as the controlling 
shareholder)  Not listed  
Exploration and exploitation of graphite  Not listed  
Smelting and separation of rare earth s (limited to 
Chinese -foreign equity or contractual joint ventures); 
smelting of tungsten  Not listed  
Prohibited  Exploration and exploitation of tungsten, 
molybdenum, tin, stibium, and fluorite  
Exploration, exploitation, and ore dressing of 
tungsten  Not listed  
Exploration, exploitation, and ore dressing of rare 
earths  Same as in 2017  
Exploration, exploitation, ore dressing, and smelting 
of radioactive minerals  Exploration, exploitation and ore dressing of 
radioactive minerals  
Source:  MOFCOM and the NDRC, Catalogue for the Guidance of Foreign Investment Industries 2017 , 
Catalogue of Encouraged Industries for Foreign Investment  (2020 edition), Special Administrative 
Measures on Access to Foreign Investment  (2020 edition); and 2020 National Negative List.  
4.51.   According to the authorities, in 2018 alone, 1,248 mining rights were granted, of which 
772 were allocated through competitive procedures, 55 through agreements, and the remainder 
through automati c allocation to the holders of the related exploration rights. Three hundred 
sixty exploration rights were granted, of which 175 were funded by the Government, 90 were 
granted through competitive procedures, 37 were filed through prior applications, and 58  were 
granted through agreements.  
4.52.   Some specific measures were adopted to further standardize and strengthen the approval 
management of rare earth and tungsten exploration and mining. On 14  December  2018, the MNR 
issued the Notice on Further Regulating the Approval Administration of Mineral Rights on Rare Earth s 
and Tungsten, which stipulates, inter alia , the continued suspension of the acceptance of new 
applications for rare earth exploration and mining registration; and the establishment, renewal, 
change o f registration, transfer, reservation, and termination of rare earth and tungsten exploration 
and mining rights. The Notice also specifies the principle for determining the total production quotas 
of rare earth s and tungsten, and the distribution of annual  production quotas in various provinces.  
4.53.   The Mineral Resources Law stipulates that mining rights allocation is subject to fixed charges. 
Therefore, in April 2017, the State Council issued the Reform Plan for Mineral Royalty System 
(Guo Fa No. 29, 2017) to protect the nation's mineral interests and create a fair mineral market WT/TPR/S/ 415 • China  
 
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  environment.41 It provides that mineral rights holders must pay the following fees to the competent 
authorities: (i)  the mineral rights grant proceeds for obtaining such miner al rights; (ii)  the mineral 
rights occupancy fee (i.e. the rental fee that mineral rights holders must pay each year, which is 
determined according to block size); and (iii)  the resource tax for the sale of mineral products. In 
line with the State Council' s reform plan, in June 2017, the Ministry of Finance and the former 
Ministry of Land and Resources issued the Interim Measures for Administrating the Collection of 
Proceeds from Granting Mineral Rights (Cai Zong No. 35, 2017). The Measures stipulate that t he 
proceeds from granting mineral rights represent the rights and interests of state owners; it also 
clarifies specific regulations on the collection of such proceeds.  
4.54.   With respect to taxation, on 26  August  2019, the National People's Congress adopted the 
Resource Tax Law, which entered into force  on 1 September  2020. It replaces the Provisional 
Regulations on Resource Tax of 25  December  1993 (amended on 30  September  2011 and 
implemented from 1  November  2011). Among the taxable resources specified by the La w 
(Tables  A4.3 and A4.4), some resources, including crude oil, natural gas, and shale gas, are subject 
to single rates that are applicable nationwide. For those resources with the range of rates specified, 
the Law grants provincial -level governments the po wer to propose the actual rates to be applied. 
The new law introduces unified tax items, clarifies the authorization for determining tax rates, and 
standardizes tax reduction and exemption policies.42 
4.55.   Regarding trade in mineral resources, according to the Catalogue of Commodities Subject to 
the Administration of Export Licences for 2020, exports of certain mineral products, including coal 
and oil (excluding lubricating oil), are subject to an export quota and an export licence, while exports 
of rare earth m inerals, tin and tin products, tungsten and tungsten products, molybdenum and 
molybdenum products, antimony and antimony products, indium and indium products, coke, 
lubricating oil, and fluorite are subject to an export licence.  
4.2.2   Energy  
4.2.2.1   Overview including environmental policy  
4.56.   China is the world's largest energy producer and consumer. In 2019, its total primary energy 
production was 3.97 billion tonnes of standard coal equivalents (SCEs). The energy self -sufficiency 
rate was 78.5%. China's energy c onsumption structure continued to change  during the review 
period, as the proportion of coal declined, accounting for 57.7% of the total energy consumption, 
down from 63.8% in 2015. Petroleum accounts for 18.9%, natural gas accounts for 8.1%, and 
primary e lectricity and other energy such as hydropower, nuclear power, and wind power account 
for 15.3%.43 
4.57.   Charts 4.5 and 4.6 describe the evolution of the energy mix of the total primary supply of 
energy, and its consumption by type of users.  
4.58.   The National Energy Commission (NEC), headed by the Premier of the State Council, acts as 
the coordinating and consultation body responsible for drafting the national energy strategy, and 
reviews key issues associated with national energy security and development. The Nationa l Energy 
Administration (NEA) is administered by the NDRC. The NEA is responsible for formulating and 
implementing energy development strategies, plans, and policies; makes recommendations on 
institutional reforms in the energy sector; and performs executi ve functions as the regulator and as 
the general office of the NEC.44 
 
41 State Council, State Counc il to Reform Mineral Resource Equity Benefit System , 20 April 2017. Viewed 
at: http://english.www.gov.cn/policies/latest_releases/2017/04/20/content_2 81475632183056.htm . 
42 State Council, China's Resource Tax Law to Take Effect on Sept 1 , 1 September 2020. Viewed at: 
http://english.www.gov. cn/statecouncil/ministries/202009/01/content_WS5f4d96dec6d0f7257693b5fc.html . 
43 MNR (2020), China Mineral Resources . Viewed at: 
http://www.mnr.gov.cn/sj/sjfw/ kc_19263/zgkczybg/202010/P020201022612392451059.pdf . 
44 In principle, the NEA has a broad mandate over the whole energy sector, i.e. coal, oil, gas, electricity 
(including nuclear power), new energy, and renewable energy (including hydropower). The NEA is a lso the 
regulator of the oil refinery, coal fuel, and fuel ethanol industries. Petrochemical and coal chemical industries 
that are not under the jurisdiction of the NEA are regulated by the MIIT.  WT/TPR/S/ 415 • China  
 
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  Chart 4.5 Total consumption of energy and its composition, 2015 and 2019  
 
Source:  Data provided by the authorities.  
Chart 4.6 Total energy consumption by sector, 2015 and 2018  
 
a Commerce refers to wholesale and retail trade, and hotels and catering.  
Source:  National Bureau of Statistics. Statistical Yearbook 2020 . 
4.59.   The authoriti es indicate that a new Energy Law is currently being drafted.  
4.60.   The authorities state that China regards the development of clean and low -carbon energy as 
the main direction for adjusting the energy mix. China intends to gradually reduce its proportion of 
coal consumption, increase its proportion of non -fossil energy consumption, reduce carbon dioxide 
and pollutant emission levels, and optimize the distribution of energy production. The country is 
actively pursuing a policy of decoupling of economic growth an d energy consumption, through 
increased energy efficiency. In the context of the 13th Five-Year Plan for Economic and Social 
Development (2016 -20), the national objective for the reduction of energy consumption per unit of 
GDP is 15%, and intermediary obje ctives are set on an annual basis. In 2015, energy consumption 
per unit of GDP dropped by 5.3%, surpassing the objective of 3.1%, and in 2016 it dropped by 4.8% 
(objective of 3.4%). The authorities indicated that the energy consumption per unit of GDP drop ped 
by 3.5% in 2017, 3% in 2018 , and 2.5% in 2019.  
Chart 4.5   Total consumption of energy and its composition, 2015 and 2019
Petroleum
18.4%2019 2015
Coal
63.8%
Source:  Data provided by the authorities.Total:  434,113 
10,000 tonnes of SCETotal:  487,000
10,000 tonnes of SCEPrimary electricity
& other energy
12.0%Natural gas
5.8%
Coal
57.7%Petroleum
18.9%
Natural gas
8.1%
Primary electricity 
& other energy
15.3%
Chart 4.6   Total energy consumption by sector, 2015 and 2018
Construction
1.7%2018 2015
Industry
68.2%
a   Commerce refers to wholesale and retail trade; hotels and catering.
Source:  National Bureau of Statistics China. Statistical Yearbook 2020.Total:  434,113
10,000 tonnes of SCETotal:  471,925
10,000 tonnes of SCECommercea
2.6%Transport & storage
8.9%Industry
65.9%Construction
1.8%
Residential
11.6%Transport & storage
9.2%
Commercea
2.8%
Residential
12.8%
Other
5.1%
Agriculture, 
forestry & fishery
1.9%Other
5.6%
Agriculture, 
forestry & fishery
1.9%WT/TPR/S/ 415 • China  
 
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  4.61.   The 13th Five-Year Plan for Energy Development represents the basic outline of China's energy 
policy for 2016 -20.45 It aims to optimize China's energy system, promote energy product and 
consumption reform,  and build a clean, decarbonized, safe, and efficient modern energy system. 
Along the same lines, Five-Year Plans have been launched for energy subcategories such as 
electricity, coal, natural gas, renewable energy, and energy technology.  
4.62.   The broader objec tives set for green and low -carbon  energy development in the 13th Five-Year 
Plan for Energy Development include that by 2020: (i)  the proportion of non -fossil energies in total 
energy consumption should be over 15%; and (ii)  the carbon dioxide emission per  unit of GDP should 
decrease by 18% compared with that in 2005. In the context of this Review, the authorities state 
that at the 75th United Nations General Assembly in September 2020, China pledged that it would 
strive to have carbon dioxide emissions pea k by 2030 and to achieve carbon neutrality by 2060. 
Furthermore, China announced that the carbon dioxide emission per unit of GDP should decrease by 
65% compared with the level of 2005, and the proportion of non -fossil energy consumption should 
reach about  25%. According to the authorities, as at 2019, non -fossil energy and natural gas 
accounted for 15.3% and 8.1%, respectively, of total energy consumption.  
4.63.   In December 2017, China launched the construction plan for the National Carbon Emission 
Right Trading Market (Power Generation Industry) to start building its National Carbon Emission 
Trading System. According to the plan, the power generation industry wil l be the first to carry out 
transactions on the national carbon market, which will be gradually expanded to other industries. 
In 2018, the work of responding to climate change was adjusted and incorporated into the mandates 
of the newly formed Ministry of Ecology and Environment.  
4.64.   In December 2020, China issued the Regulations on Carbon Emission Trading (Trial) and the 
Implementation Plan on National Carbon Emission Trading Quota Determination and Distribution for 
2019-2020 (Power Generation Industry). The R egulations provided a list of key emission units in the 
power generation industry that are included in the quota management, as well as the specific 
requirements for quota allocation and compliance, and officially launched the first compliance cycle 
of the  national carbon market.  
4.65.   Other measures regarding the promotion of clean energy included the Notice on Establishing 
and Improving the Safeguard Mechanism of Renewable Energy Power Consumption, which was 
jointly adopted on 10  May 2019 by the NEA and the NDR C. It provides a general framework for, 
inter alia , setting renewable electricity consumption quotas as a share of total power consumption 
in each province, defining quota setting methods, and monitoring quota trading.46 The authorities 
note that a number of periodic monitoring and evaluation reports have been issued to guide 
provincial authorities in formulating their local renewable energy power consumption plans. The 
same efforts will continue in 2021, as the authorities are calculating the 2021 consumpt ion quota, 
according to the broad national objective of achieving carbon neutrality by 2060.  
4.66.   On 1 January  2018, China implemented a new environmental tax policy aimed at promoting 
environmental protection and reducing pollution.  
4.67.   Subject to the Negative List for the Access of Foreign Investments, China allows foreign 
investment in the energy sector. Since 2018, in terms of foreign investment access in the oil and 
natural gas field, restrictions on the exploration and development of  oil and natural gas (except for 
oil shale, oil sands, and shale gas) have been removed, including those requirements that such 
investment projects must be joint ventures and cooperatives and that the construction and operation 
of gas pipeline networks in cities with a population of more than 500,000 must be controlled by 
Chinese shareholders.  
4.2.2.2   Coal 
4.68.   Coal, an abundant and relatively cheap resource in China, continues to represent a large part 
of the country's primary energy, and it is also the main cause of a ir pollution. Its share in national 
energy consumption was 57.7% in 2019 (down from 63.8% in  2015). China's coal production ranks 
 
45 The 13th Five-Year Plan for Energy Development targets are  aligned with objectives of the 
13th Five-Year Plan for Economic and Social Development.  
46 NEA. Viewed at: http://zfxxgk.nea.gov.cn/auto87/201905/t20190515_3662.htm . WT/TPR/S/ 415 • China  
 
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  first in the world, reaching 3.85 billion tonnes in 2019. Newly discovered reserves of coal amounted 
to 30.01 billion tonnes, which brough the total to 1,738.58 billion tonnes.47 
4.69.   The authorities note that, in recent years, China implemented policy measures to strictly 
control the new capacity of coal -fired power. In 2019, China's coal -fired power installed capacity 
stood at 1.04 TW. Its growth rate dropped by 30% on average over the period 2016 -20 compared 
with the period 2011 -15. The proportions of installed capacity and power generation of coal -fired 
power have been declining steadily year -on-year. Between 2018 and 2019, over 20  GW of coal -fired 
power units were shut down. The authorities also note that China's new power demand in recent 
years was mainly supplied through renewable energy.  
4.2.2.3   Oil 
4.70.   In 2019, newly discovered geological reserves of oil were 1.12 billion tonnes, of which,  the 
increased proven technical recoverable reserves were 160 million tonnes. Crude oil production was 
191 million tonnes, while consumption stood at 670 million tonnes.  
4.71.   The government policy on oil is defined in the 13th Five-Year Plan for Energy Developm ent 
(2016 -20). The Plan aims to increase crude oil reserves and the recovery efficiency of traditional oil 
fields, as well as speed up the development of shale oil and extend the corresponding pipeline 
network for crude oil and refined products. The explor ation and development of oil is listed among 
encouraged industries nationwide.  
4.72.   To implement the recommendations of the Several Opinions on Deepening Oil and Gas System 
Reform, the MNR issued the Opinions on Promoting the Reform of Mineral Resources Managem ent 
(Trial) on 31  December  2019. Among the several reform steps promoted by the Opinions, domestic 
and foreign enterprises that are registered in China, and have a minimum net asset of 
CNY 300 million, are entitled to obtain mining rights of oil and gas.  The Opinions state that the 
validity period of a prospecting right may be extended to five years at the time of initial registration, 
and each extension shall be five years.48 The regulation also unifies the exploration right and mining 
right of oil and gas . Under the Opinions, oil and gas exploration right owners who make a recoverable 
discovery should sign the mining right grant contract within five years.  
4.73.   The Special Administrative Measures on Access of Foreign Investment (National Negative List) 
(2019) a bolished the requirement that exploration and development of oil and natural gas (except 
for those including coal -bed methane, oil shale, oil sands, and shale gas) are limited to Chinese -
foreign equity.  
4.74.   Enterprises are allowed to determine their own oil pr ices based on the supply and demand in 
the market, on the premise of not exceeding the "ceiling price" decided by the NDRC. The pricing 
mechanism allows the NDRC to adjust the guided price when the moving average of prices over 
22 consecutive trading days fluctuates more than 4% in the international oil markets.49 The latest 
pricing mechanism was released in 2016.  
4.75.   The authorities indicate that China has not released any law or regulation on enterprises' 
compulsory oil reserve and does not require that oil companies must engage in oil reserve.  
4.76.   Over the last three years (2018 -20), the Kingdom of Saudi Arabia, the Russian  Federation , 
Iraq, Angola, Brazil, and Oman remained the top oil exporters to China. In 2020, the share of Norway 
and the State of Kuwait  in China's imports of oil increased substantially, while the share of the 
Islamic Republic of Iran remained on a significant decreasing trend (Table  4.17).  
4.77.   In 2020, China processed 670 million tonnes of crude oil. Foreign investors can participate in 
refining projects and are not subject to limitations in terms of legal forms.  
 
47 MNR (2020), China Mineral Resources. Viewed at: 
http://www.mnr.gov.cn/sj/sjfw/kc_19263/zgkczybg/202010/P020201022612392451059.pdf . 
48 Twenty -five per  cent of the block area shall be deducted for each extension to urge mineral right 
holders to accelerate exploration.  
49 Interim Administration Measures for Oil Prices (Fa Gai Jia Ge No.  1198, 2009).  WT/TPR/S/ 415 • China  
 
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  Table 4.17 China's key trading partners for oil imports, 2018 -20 
('000 tonnes)  
  2018  2019  2020  
World   461,907.9   505,890.3   542,385.5  
 Saudi Arabia, Kingdom of   56,733.9   83,322.3   84,923.0  
 Russian  Federation   71,494.4   77,664.9   83,572.3  
 Iraq  45,044.5   51,799.0   60,117.5  
 Brazil   31,622.2   40,156.6   42,189.9  
 Angola   47,387.6   47,368.5   41,785.1  
 Oman   32,909.8   33,871.7   37,838.3  
 Kuwait, State of   12,199.2   15,294.0   31,168.1  
 United Arab Emirates   23,212.4   22,688.3   27,496.9  
 United  States   12,281.3   6,349.5   19,760.3  
 Norway   895.1   1,018.2   12,712.8  
 Malaysia   8,882.7   12,046.6   12,529.0  
 Colombia   10,768.5   13,121.0   12,383.1  
 Congo   12,580.5   11,960.5   9,246.0  
 Qatar   1,347.7   858.3   6,200.4  
 United Kingdom   7,725.5   12,556.7   5,894.2  
 Gabon   3,624.9   7,022.4   5,853.5  
 Ecuador   1,872.4   2,050.4   4,712.6  
 Ghana   3,356.0   3,595.8   4,112.5  
 Nigeria   464.7   2,437.3   3,934.3  
 Iran, Islamic Republic of   29,272.7   14,769.4   3,917.7  
Note:  Top 20 import partners are sorted by the year 2020.  
Source:  WTO Secretariat calculations, based on UN Comtrade database.  
4.78.   Distribution of gasoline/petrol is mostly operated by the China National Petroleum Corporation 
(CNPC) and the China Petroleum and Chemical Corporation (SINOPEC). Foreign investors can 
participate in the retail distribution sector, as China has lifted restrictions on foreign investment in 
the construction and operation of petrol stations. The authorities indicate that a number of 
multinational corporations have entered the Chinese petrol station operation market.  
4.2.2.4   Gas 
4.79.   In 2019, China's natural gas production (including shale gas and coal -bed methane) stood at 
176.17 billion m3; consumption of natural gas stood at 306 billion m3.50 The newly discovered 
geological reserves of sh ale gas were 764.42 billion m3, of which the increased proven technical 
recoverable reserves were 183.84 billion m3. 
4.80.   Under China's energy development plan, the use of natural gas is to be expanded, as it is 
considered clean energy. In 2019, gas accounted f or 8.1% of energy consumption, up from 5.8% 
in 2015. In addition to industrial fuel and power generation, gas is mainly used for urban heating 
and cooking, transport, and the manufacture of raw chemical materials and chemical products.  
4.81.   Distribution of natu ral gas is mostly operated by the CNPC and SINOPEC, while private 
companies play a more substantial role in the retail sector. Foreign investors, notably from 
Hong Kong, China, are present in both the importing segment and in the urban gas retail distribut ion 
segment. According to the 2020 Negative List for the Access of Foreign Investments, the distribution 
of foreign -invested natural gas has been opened to foreign investors and shall be managed following 
the principle of consistent domestic and foreign in vestment.  
4.2.2.5   Electricity  
4.82.   By end -2019, China's installed power generation capacity was 2.01  billion  kW (up from 
1.9 billion  kW at end -2018). Thermal power, hydropower, nuclear power, wind power, and solar 
power accounted for 1.19 billion kW, 358 million kW, 49  million kW, 210 million kW, and 
200 million  kW, respectively. At end -2018, these figures were 1.04 billion kW, 352 million kW, 
45 million kW, 180 million kW, and 170 million kW, respectively.  
 
50 MNR (2020), China Mineral Resources . Viewed at: 
http://www.mnr.gov.cn/sj/sjfw/kc_19263/zgkczybg/202010/P020201022612392451059.pdf . WT/TPR/S/ 415 • China  
 
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  4.83.   On 19  December  2018, the Standing Committee of the NPC amended the Electricity Law 
(adopted in 1995 and came into force on 1  April 1996). It was previously amended in 2009 and 
2015. The 2018 amendment aimed to address the approval procedures of power busin esses. Under 
the amendment, applications for the establishment and a change in a power supply business shall 
be submitted to the electric power administrative department, which shall, in accordance with its 
duties and administrative authority, issue the el ectric power business licence after examination and 
approval in conjunction with the relevant departments.  
4.84.   The Administration Measures on Power Grid Enterprises' Full Purchase of Electricity Generated 
by Renewable Energy51 provide that on -grid electricity generated by renewable energy power plants 
must be purchased by distributors (regional monopolies) within the coverage of their power grids. 
Currently, Chinese grid companies include State Grid Corporation, China Southern Power Grid, Inner 
and Mongolia Pow er (Group) Co., Ltd., as well as a number of provincial grid enterprises.  
4.85.   Chart 4.7 describes electricity production, by source of primary energy, and electricity 
consumption, by type of economic activity, in 2018.  
4.86.   Chart 4.8 describes the installed generat ion capacities by source for 2019; Table  4.18 
describes the investment in generation capacity by source for 2017 and  2019.  
4.87.   In 2019, China lifted the requirements that the construction and operation of gas pipeline 
networks in cities with a population of mo re than 500,000 must be controlled by Chinese 
shareholders. However, for construction and operation of nuclear power plants, the Chinese parties 
must be the controlling shareholders (Table 4.19). Private investment, including foreign investment, 
is encoura ged in the development of the renewable energy sector. In the new 36 -Clause on Private 
Investment (State Council Circular 2010/13), domestic private capital is "encouraged" to build new 
energy sectors such as wind, solar, geothermal, and biomass power. Ele ctricity generation from 
wind, solar, or biomass power is also listed in the "encouraged" section of the Catalogue of 
Encouraged Industries for Foreign Investment (2020 edition). China also promotes electricity 
generation with nuclear energy; as in the cas e of renewable energy, FDI is encouraged.  
Chart 4.7 Structure of electricity production and consumption, 2018  
 
a Thermal power refers to electricity generated by coal, oil, gas, residual heat, waste incinerat ion, and 
biomass.  
b Commerce refers to wholesale and retail trade, and hotels and catering.  
Source:  National Bureau of Statistics , Statistical Yearbook 2020 . 
 
51 State Electricity Regulatory Commission (SERC), Decree 2007/25.  
Chart 4.7   Structure of electricty production and consumption, 2018
Consumption by economic activity Production by source
Thermal powera
71.1%
Source:  National Bureau of Statistics China.  Statistical Yearbook 2020.Total:  7,166 TWh Total:  7,151 TWhWind power
5.1%Nuclear power
4.1%Industry
68.7%Construction
1.2%
Solar power
2.5%Transport & 
storage 2.2%
Commerceb
4.1%
Residential
14.1%
Hydropower
17.2%Other
8.0%
Agriculture, 
forestry & fishery
1.7%
a  Thermal power refers to electricity generated by coal, oil, gas, residual heat, waste incineration, and 
biomass.
b  Commerce refers to wholesale and retail trade; hotels and catering.WT/TPR/S/ 415 • China  
 
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  Chart 4.8 Installed generation capacities by primar y energy, 2019  
 
a Thermal power refers to electricity generated by coal, oil, gas, residual heat, waste incineration, and 
biomass.  
Source:  National Bureau of Statistics , China Statistical Yearbook 2020 . 
Table 4.18 Investment in power generation capacity by source, 2017 -19 
Type  Unit (CNY million)  2017  2018  2019  
Hydropower  100 622 700 839 
Thermal power  100 858 786 634 
Nuclear power  100 454 447 382 
Wind power  100 681 646 1,244  
Solar power generation  100 285 207 184 
Source:  China Electricity Council, Statistical Data Collection of Electric Power Industry, 2017 -2019. 
Table 4.19 Investment regime for electricity, 2017 and 2020  
 
2017 Catalogue  2019 Encouraged Industries/2020 
Negative List  
Encouraged  Construction and operation of ultra -supercritical 
unit power station with the capacity of a single 
unit of 600,000  kW or more  Same as in 2017  
Construction and operation of back -pressure 
combined heat and power stations, combined 
cooling, heating and power stations, and 
combined heat and power stations with capacity 
of 300,000  kW or more  Same as in 2017  
Construction and operation of large air cooling 
unit power stations with the capacity of a single 
unit of 600,000  kW or more in water -deficient 
areas  Same as in 2017  
Construction and operation of integrated 
gasification combined cycle power generation 
and other clean coal power generation projects   Same as in 2017  
Construction and operation of power generating 
projects of a single unit of 300,000  kW or more 
by using fluidized bed combustion bolters and 
coal gangue and coal slime, etc.  Same as in 2017 
Construction and operation of hydropower 
stations for the primary purpose of power 
generation  Same as in 2017  
Construction and operation of nuclear power 
stations  Same as in 2017  
Construction and operation of new energy 
power stations (including but not limited to 
solar, wind, geothermal, tidal, tidal current, 
wave, and biomass)  Same as in 2017  
Construction and operation of power grid  Construction and operation of clean 
energy microgrid  
Seawater utilization (direct utilization of 
seawater or seawater desalination)  Seawater utilization (direct utilization of 
seawater or seawater desalination) ; 
brackish water utilization  
Chart 4.8   Installed capacity of power generation, 2019
Total
2,010 GW
Source:  NBS. China Statistical Yearbook 2020.Nuclear power
2.4%
Solar power
10.2%
Thermal powera
59.2%Wind power
10.4%Hydropower
17.8%
a     Thermal power refers to electricity generated by coal, oil, gas, residual heat, waste incineration, 
and biomass.WT/TPR/S/ 415 • China  
 
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2017 Catalogue  2019 Encouraged Industries/2020 
Negative List  
Construction and operation of water supply 
plants  Design, construction, and operation of 
water supply plant  
Construction and operation of renewable water  Design, construction, and operation of 
renewable water  
Construction and operation of sewage 
treatment plants  Design, construction, and operation of 
sewage treatment plants  
Construction and operation of vehi cle charging 
stations and battery replacement stations  Same as in 2017  
Construction and operation of hydrogen 
refuelling stations   Same as in 2017  
Restricted  Construction and operation of nuclear power 
stations (with Chinese party as the controlling 
shareholder)   Construction and operation of nuclear 
power stations (with Chinese party as the 
controlling shareholder)  
Construction and operation of power grid (with 
Chinese party as the controlling shareholder)   Not listed  
Construction and  operation of pipeline networks 
for gas, heat, and water supply and sewage in 
cities with a population of more than 500,000 
(with Chinese party as the controlling 
shareholder)  Not listed  
Source:  MOFCOM and NDRC, Catalogue for the Guidance of Foreign Investment Industries 2017 , Catalogue 
of Encouraged Industries for Foreign Investment  (2020 edition), and Special Administrative 
Measures on Access to Foreign Investment (2020 edition); and 2020 National Negative List.  
4.88.   China's efforts to liberalize power generation and utilization were outlined in Several Opinions 
on Further Deepening the Reform of the Electric Power System (Zhong Fa No. 9, 2015) , issued in 
March 2015 .52 The reform liberalizes electricity prices (notably  industrial ones), except for 
transmission and distribution and for public welfare purposes (i.e. residential, agricultural, and 
important utility uses, and other public welfare purposes determined by the Government) . 
Transmission and distribution tariffs are regulated by the NDRC and the NEA.  The authorities indicate 
that the NDRC has completed the approval of the transmission and distribution tariffs of the 
33 provincial grids during the regulatory period (2020 -22), and has for the first time ratified the  
transmission prices of five regional power grids. The new tariffs are set to come into force on 
1 January  2021. Certain l arge industrial and commercial consumers are encouraged to buy electricity 
from generation companies based on direct electricity purch ase agreements at negotiated prices.  
4.89.   In line with the liberalization steps initiated in 2015, the power retail market is open to 
non-state-owned investors under the Management Rules for Entry and Exit of Power Sale Companies 
and the Management Rules for Or derly Liberalizing of Power Distribution Businesses issued by the 
NDRC and the NEA in  October 2016 (Fa Gai Jing Ti No. 2120, 2016).53 The Rules stipulates licensing 
requirements for power sales enterprises. As at end -2020, there were about 4,500  electric p ower 
companies registered with the power trading agency of China. Since 2018, there has been no foreign 
investment restriction in the construction and operation of power grids. Under the current regime, 
the generation, transmission, and distribution of pow er shall be administered under the principle of 
equal treatment to both domestic and foreign investment.  
4.90.   Various electricity trading agencies have been established across the country, with the 
purpose  of linking the grids and the retail distribution compan ies, and trading electricity on a market 
basis. They are mainly responsible for the construction, operation, and management of trading 
platforms; the organization of market trading; the provision of settlement evidence and relevant 
services; the registration of bilateral contracts signed by the power us ers and generation companies; 
 
52 The orien tations of the reform were subsequently elaborated by six Supportive Documents for 
Electricity Mechanism Reform issued by the NDRC and the National Energy Administration (Fa Gai Jing Ti 
No. 2752, 2015), as well as by numerous implementing regulations and p ilot projects, notably:  (i) the Notice of 
NDRC and NEA on Standardizing the Pilot for Incremental Power Distribution Reform (Fa Gai Jing Ti No.  2480, 
2016); (ii)  the Reply of NDRC General Office and NEA General Affairs Division on Agreeing with the 
Establi shment of Incremental Power Distribution Reform Pilot in Ningdong (Fa Gai Ban Jing Ti No.  570, 2017); 
and (iii)  the Notice of NDRC and NEA on Standardizing the Second Batch of Pilot for Incremental Power 
Distribution Reform of 21  November 2017.  
53 NDRC and NEA, The Management Rules for Entry and Exit of Power Sale Companies,  and the 
Management Rules for Orderly Liberalizing of Power Distribution Businesses . Viewed at: 
https://w ww.ndrc.gov.cn/xxgk/zcfb/tz/201610/t20161011_963217.html . WT/TPR/S/ 415 • China  
 
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  the registration and management of market actors; and the disclosure and release of market 
information.  
4.91.   The trial of "pilot spot markets ", where  trading of electricity takes place on a spot basis instead 
of by medium - to long -term contracts, began in August 2017 in eight areas (Guangdong, west of 
Inner Mongolia, Zhejiang, Shanxi, Shandong, Fujian, Sichuan, and Gansu).  All pilot areas carried 
out a settlement trial in September. The authorities indicate that further simulations took place 
during the review period to verify the integrity of the market clearing and technical support system. 
In June  2019, all eight pilot power spot areas started simulated operation. In 2020, all pilot areas 
completed a monthly settlement trial. It i s planned that in 2021 some areas will carry out longer 
settlement trials.  
4.3  Manufacturing  
4.3.1   Recent developments  
4.92.   China is the world's largest producer of industrial goods. In 2018, with a total value -added 
amounting to some USD  4 trillion, the Chinese manufact uring sector accounted for 28% of global 
manufacturing output.54 The sector is an important driver of China's economy, despite its shrinking 
contribution to the country's GDP. Its share as a percentage of GDP stood at 27.2% in 2019, down 
from 29% in 2015. Additionally, its share in private sector employment was around 15.4% in 2018.55 
In 2019, manufactured products accounted for 95.4% of China's exports (up from 93.7% in 2016) 
and 66.5% of its imports (up from 64.9% in 2016).  
4.93.   The authorities consider that C hina's performance in manufacturing is largely attributed to its 
increasing integration in global value chains, driven by factors including trade and investment 
liberalization, abundant and productive labour, a large domestic market, high -quality infrastru cture, 
and innovation. However, the long -term sustainability of the sector may face environmental 
challenges and excess capacity . Firms in this sector may consistently face low capacity utilization 
rates, as well as incurring losses.  Nevertheless, t he auth orities state that, currently, there is no 
excess coal production capacity in China; since 2016, it has closed more than 1 billion tonnes of 
outdated coal production capacity, and the proportion of outputs of large -scale coal mines with or 
above 1.2 millio n tonnes per year has exceeded 80%. They also state that the steel, cement, 
aluminium,  and chemicals sectors have sound profitability level s, and they consider that there is no 
excess capacity in these industries.  
4.94.   A number of policy initiatives remain in f orce to address the challenges facing manufacturing 
activities and further develop the sector. As described in detail in the previous Review, major 
initiatives include the Made in China 2025 (or China Manufacturing 2025) initiative (launched in 
2015), and the Internet Plus initiative (launched in 2015) . According to the authorities, these 
initiatives are non -binding guidelines.  
4.95.   While the current policy initiatives are intended to promote the expansion of higher 
value -added and knowledge -based activities thr ough innovation, environmental considerations are 
also at the core of China's efforts in the manufacturing sector. They aim to reduce energy and 
resources consumed and pollutants emissions released per unit of industrial added value by 2025.56 
On 1  January  2018, China implemented a new environmental tax policy aimed at promoting 
environmental protection and reducing pollution. The new tax is set to affect companies in various 
economic sectors, mainly in manufacturing. It  replaces the pollution discharge fee  previously in 
place and applies to four pollutant categories when they are discharged directly into the environment 
in Chinese territory: atmospheric pollutants, water pollutants, solid waste, and noise.57 Reductions 
 
54 World Economic Forum,  These Are the Top 10 Manufacturing Countries in the World , 25 February 
2020. Viewed at: https://www.weforum.org/agenda/2020/02/countries -manufacturing -trade-exports -econo 
mics/#:~:text= According%20to%20data%20published%20by,China%20ove rtook%20it%20in%202010 . 
55 National Bureau of Statistics, China Statistical Yearbook 2019 . Viewed at: 
http://www.stats.gov.cn/tjsj/ndsj/2019/indexeh.htm . 
56 OECD (2017), Industrial Upgrading for Green Growth in China . Viewed at: 
https://www.oecd.org/greengrowth/Industr ial_Upgrading_China_June_2017.pdf . 
57 Exclusions include discharge of sewage/domestic waste into treatment facilities and solid waste into 
storage/disposal facilities where these meet national standards, emissions from agricultural production, and 
motor veh icle/vessel/aircraft emissions.  WT/TPR/S/ 415 • China  
 
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  on environmental tax are provided to c ompanies that pollute less than the standard. Penalties have 
been also strengthened.  
4.96.   The authorities are also cognizant of the issue of excess capacity in manufacturing58, and 
have made efforts to reduce capacity in recent years. As an example, the Supply -Side Structural 
Reforms (SSSR), which were announced in 2015, aim to reduce capacity, among other goals. During 
the review period, the country's efforts to phase out industries that it considers outdated or heavily 
polluting were shown in the Catalo gue for Guiding Industry Restructuring, last updated in 2019 
(Section  2.4.1).  
4.97.   In an effort to increase the competitiveness of the economy, manufacturing activities were 
further liberalized during the review period. The 2020 Special Administrative Measures on Access to 
Foreign Investment (the 2020 National Negative List) lifted the restrictions on the share ratio of 
foreign investment in commercial vehicle manufacturing. In addition, they eliminated the 
prohibitions on foreign investment in the smelting and processing of radioactive minerals, as well as 
the production of nuclear fuel. Furthermore the 2020 Catalogue of Encouraged Industries for Foreign 
Investment  (Encouraged FDI Catalogue) added a number of manufacturing activities to the list of 
encouraged in dustries, including fifth -generation equipment mobile terminals and their integrated 
system, etchers for integrated circuits, chip packaging equipment, cloud computing devices, key 
components of industrial robots, new energy vehicles (NEVs), intelligent ve hicles, aerospace new 
materials, cell therapy drugs, and large -scale cells culture products.  
4.98.   At the same time, some restrictions and prohibitions are in place vis-à-vis foreign 
investments. In the automotive industry, Chinese parties must hold no less than  50% in the 
manufacturing of passenger vehicles.59 In addition, a foreign investor may establish no more than 
two joint ventures in China to manufacture the same type of vehicles. Within the medicine production 
industry, foreign companies are prohibited fr om investing in the application of steaming, stir -frying, 
moxibustion, calcination of Chinese herbal medicines, and other processing techniques, as well as 
the production of confidential prescription products of proprietary Chinese medicines. Foreign 
investment in the production of satellite television broadcasting ground receiving facilities and key 
components is subject to licensing.  
4.99.   The Ministry of Industry and Information Technology (MIIT) is the main regulator for the 
manufacturing sector; it is respon sible for developing industrial strategies, making industry plans 
and standards, and monitoring the operation of the industry, including licensing for production of 
road vehicles and civilian explosives, according to the law. The NDRC is responsible for co ordinating 
industry development and developing industry upgrade strategies. MOST is also involved in industrial 
policies for high -tech manufacturing.  
4.3.2   Selected subsectors  
4.3.2.1   Automobiles, automotive parts, and components  
4.100.   In 2018, state-holding enterprises and f oreign -invested enterprises (FIEs) accounted for 
45.4% and 47.3%, respectively, of operating revenue in the automobile manufacturing sector 
(43.7% and 48.0%, respectively, in 2019).  
4.101.   China is the largest automobile market worldwide, both in terms of demand and supply. 
According to the results of the national survey of industries above a certain scale60, the production 
volume of automobiles in 2018 and 2019 was around 27.8 million and 25.7 million, respectively.  
4.102.   China's automobile industry  was hit hard by the  COVID‑19 pandemic. The authorities note 
that car production and sales fell by nearly 80% in February 2020. However, due to the epidemic 
prevention and control measures and recent economic developments, car production and sales have 
recovered markedly. In 2020, the decline in annual production and sales narrowed to less than 2%, 
and the production and sales of NEVs increased by 7.5% and 10.9%, respectively. According to the 
World Economic Forum, car manufacturers in China resorted to innovative marketing so lutions to 
 
58 This challenge is also present in sectors beyond manufacturing, such as coal mining.  
59 The authorities state that the limit will be cancelled in 2022.  
60 The above -mentioned designated scale is a statistical term used in China to refer to industrial 
enterprises with annual main business revenue of CNY  20 million or more.  WT/TPR/S/ 415 • China  
 
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  keep supply chains running. For example, some carmakers focused on consumers who were 
shopping online for cars, using tools including virtual reality and live broadcasts to stimulate sales.61 
4.103.   In 2020, the production and sales volume of automobil es were 25.22 million and 
25.31  million, respectively. According to the National Bureau of Statistics, in 2020, the operating 
revenue of the automobile manufacturing sector above the state -designated scale was 
CNY 8,155.77  billion, an increase of 3.4% year -on-year, and the profit was CNY  509.36 billion, with 
a year -on-year increase of 4.0%. Statistics from the China Association of Automobile Manufacturers 
suggest that the number of employees in the 17 key automotive enterprises (groups) stood at 
999,951, a year-on-year decrease of 5.6%.  
4.104.   In April 2020, in an effort to boost automobile consumption, 11 ministries and commissions, 
including the NDRC and MOFCOM, jointly issued a series of measures.62 In substance, the regulations 
delay the implementation of the N ational VI emission standards for six months (until January 2021), 
for the production of light vehicles (total mass not exceeding 3.5 tonnes).63 Measures were also 
taken, along the same lines, to extend the financial subsidy available for purchasing NEVs t o 
end-202264, accelerate the elimination of scrapped diesel trucks through preferential tax policies, 
and encourage financial institutions to actively develop financial services, such as automobile 
consumer credit. Furthermore, the authorities indicate tha t in order to increase the sales of 
second -hand vehicles, from 1 May 2020 to 31 December 2023, VAT rate on the distribution of used 
cars shall be reduced to 0.5%. Prior to this reduction, VAT rate was at 2% (which is lower than the 
3% rate under the "simpl ified method").65 
4.105.   The production of automobiles, including NEVs, is subject to approval by the NDRC and the 
MIIT. Measures were taken in November 2018 to reform the regulatory regime on the market 
admission (approval) of automobile manufacturers, as well as the admission of auto vehicle 
products.66 Specifically, the new reform, inter alia , unifies the rules (requirements) that regulate the 
admission of manufacturers and products in the auto industry67, and streamlines the list of mat ters 
subject to MIIT approval, so as to reduce the administrative burden on auto manufacturers.  
4.106.   In December 2018, the authorities took new measures to further facilitate certain 
administrative procedures on investments in the automotive sector.68 According  to the new rules, 
investment projects in complete vehicles and other related investments shall be managed by local 
Development and Reform Departments. The regulations also set strict control on new investments 
that aim to increase manufacturing capacity o f traditional oil -fuelled cars, in line with the country's 
efforts to promote NEVs and the sustainable development of the automotive industry.  
4.107.   The Automobile Mid - and Long -term Development Plan (launched in 2017) is the main 
strategic plan to promote the a uto industry. The Plan aims to, inter alia , improve the innovation 
system and promote the development of key areas, such as NEVs, smart network cars, and energy -
saving cars. The Plan also emphasizes the importance of strengthening international cooperation . 
4.108.   In accordance with the vision of the Automobile Mid - and Long -term Development Plan, 
specific plans were adopted during the review period. With regard to new generation vehicle 
manufacturing, a number of supporting actions were taken during the review pe riod to encourage 
production. In February 2020, the NDRC and other 11 departments jointly released the Intelligent 
 
61 World Economic Forum, This Industry Was Crippled by the Coronavirus – Here's How It' s Fighting 
Back, 25 February 2020. Viewed at: https://www.weforum.org/agenda/2020/02/coronavirus -china -
automotive -industry/ . 
62 Notice on Measures to Stabilize and  Expand Automobile Consumption (Fa Gai Chan Ye No.  684, 
2020).  
63 The National VI Emission Standards refer to the new emission standards on diesel particulate filters.  
64 MOF, Announcement on the Relevant Policies Concerning the Exemption of Vehicle Purchase  Tax on 
New Energy Vehicles. Viewed at: http://szs.mof.gov.cn/zhengcefabu/202004/t20200417_3500222.htm . 
65 Announcement on Value -Added Tax Policy Related to the Distribution of U sed Cars (Announcement 
No. 17, 2020).  
66 Measures for the Administration of Access by Road Motor Vehicle Production Enterprises and Products 
(MIIT Decree No.  50). 
67 The MIIT divides road vehicles into six categories (i.e. passenger vehicle (PV), commercial vehicle 
(CV), special purpose vehicle (SPV), trailer, motorbike, and low -speed automobile) for which emission 
requirements and process used to be in place for each category.  
68 Provisions on the Management of Investments in the Automotive Industry.  WT/TPR/S/ 415 • China  
 
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  Vehicle Innovation and Development Strategy to, inter alia , accelerate the transformation and 
upgrading of the automotive industry, and promo te innovation and development of intelligent 
vehicles. Under the Plan, commercial application of highly automated driving vehicles is expected to 
take place by 2025.  
4.109.   In October 2020, the Government outlined a development plan for the NEV industry, aiming 
to accelerate technological innovation and infrastructure construction.69 Under the plan, the average 
power consumption of new purely electric passenger cars shall be reduced to 12  kWh/100  km and 
the proportion of NEVs in the total sales of new vehicles shall be raised to 20% by 2025.  
4.110.   New rules were adopted in May 2019 to improv e the management of the recycling and 
dismantling of scrapped motor vehicles.70 The regulations lift the quota restriction on the number of 
recycling enterprises allowed in each region; though, without a qualification, no company or 
individual may operate such a business. The new rules are set to increase China's recycling and 
dismantling capability and promote the healthy development of the scrap industry.  
4.3.2.2   Machinery and equipment  
4.111.   Similar to the whole manufacturing sector, the machinery and equipment indust ry was hit 
hard by the COVID ‑19 outbreak. According to data provided by the authorities, from January to 
May 2020, the accumulative operating income of the machinery industry was CNY  7.4 trillion, a year -
on-year decrease of 9.03%, while imports stood at US D 112 billion, a year -on-year decrease of 
11.02%; exports amounted to USD  167.9  billion, a year -on-year decrease of 7.61%. However, 
according to the authorities, since the second quarter of 2020, production in the machinery industry 
has steadily improved, and the annual accumulative operating income for 2020 stood at 
CNY 23 trillion, a year -on-year increase of 4.2%, while export delivery value amounted nearly 
CNY 2 trillion, a year -on-year decrease of 3.1%. Imports of machinery equipment in 2020 amounted 
to USD 191.96 billion, a year -on-year increase of 0.8%, while exports stood at USD  440.25 billion, 
a year -on-year increase of 5.7%. Exports of medical devices totalled USD  12.91 billion in 2019, a 
year-on-year increase of 13.2% ; they totalled USD  18.14 billi on in 2020, a year -on-year increase of 
40.5%. The authorities note that machinery industry policy aims to pursue innovation -driven 
development; promote the transformation towards an intelligent, green, and service -oriented 
machinery industry; promote the o ptimization of industrial structures; improve product quality; 
improve the utilization rates of resources and energies; and reduce pollutant emissions.  
4.112.   In 2016, the Government launched the Robotics Industry Development Plan (2016 -2020) to 
promote robot app lications and to attract foreign investment. The plan aims to, inter alia , produce 
100,000 industrial robots annually by 2020. The authorities state that these targets have not been 
fully met. Under the Plan, special funds from the central budget were set to be earmarked to support 
robotics research and development, and financial institutions were encouraged to finance robotic 
projects.71 
4.113.   With respect to recent developments in relation to medical equipment, the authorities took 
measures in 2020 to support t he stable production of COVID ‑19 prevention and control materials. 
The State Taxation Administration and the MOF issued the Announcement on Tax Policies Supporting 
COVID‑19 Prevention and Control (Announcement No.  8, 2020). The Announcement allows a 
one-time deduction from corporate income tax of expenses related to newly purchased equipment 
by key producers of COVID prevention and control to expand their production capacity.72 
4.114.   Other strategic actions in machinery and equipment industries include: (i)  the M IIT's Guiding 
Opinions on Accelerating the Development of Environmental Protection Equipment Manufacturing 
Industry, which set the goal of reaching a production value of CNY  1 trillion for environmental 
equipment manufacturing by 2020; and (ii)  the Action Plans for High -End Smart Remanufacturing 
 
69 State Council, Cabinet Boost for New Energy Vehicles , 13 October 2020. Viewed at: 
http://english.www.gov.cn/policies/policywatch/202010/13/content_WS 5f85068dc6d0f7257693d696.html . 
70 State Council, Measures on the Management of the Recycling of Scrapped Motor Vehicles (State 
Council Decree No.  715).  
71 State Council, China to Triple Industrial Robot Production by 2020 , 27 April 2016. Viewed at: 
http://english.www.gov.cn/state_council/ministries/2016/04/27/content_281475336534830.htm . 
72 State Taxation Administration. Viewed at: 
http://www.chinatax.gov.cn/chinatax/n810341/n810755/c5143465/content.html . WT/TPR/S/ 415 • China  
 
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  (2018 -2020). In addition, the Plan of Intelligent Manufacturing Development (2016 -2020), issued 
by MIIT and the MOF, was put in place to guide the development of intelligent manufacturing. The 
Plan, inter alia , sets  the goals of completing the digitalization of traditional manufacturing sectors 
by 2020, establishing an intelligent manufacturing support system, and achieving intelligent 
transformation of key industries by  2025.  
4.3.2.3   Iron and steel  
4.115.   The value of China's iron  and steel exports stood at USD  33.4 billion in 2020, down from 
USD 46.9 billion in 2018, while the value of imports increased from USD  22.4 billion to 
USD 36.8 billion over the same period. According to the authorities, the same dynamic continued in 
2020,  in line with China's efforts to tackle overcapacity in the steel industry. Over the first half of 
2020 steel exports sharply decreased, and imports substantially increased. From January to May, 
China exported 25  million tonnes of steel products, a year -on-year decrease of 14%, and imported 
5.46 million tonnes of steel products, a year -on-year increase of 12%, reflecting the country's efforts 
to address excess capacity in the industry.  
4.116.   Efforts by China to eliminate production overcapacity in the steel indus try are guided by the 
Opinions on Reducing Overcapacity in the Steel Industry to Achieve Development by Solving 
Difficulties (Guo Fa No. 6, 2016).73 Among other actions, the Opinions prohibit the building up of 
new steel capacity. China also intends to encourage enterprises to eliminate part of their steel 
production capacity through, inter alia , proactive capacity elimination, mergers and acquisition s and 
restructuring, transformation and conversion of production lines, relocation and reconstruction, and 
global cooperation in production capacity. Under the Opinions, China plans to cut additional crude 
steel capacity by 150 million tonnes by 2020, to b ring capacity closer to consumption.  
4.117.   The authorities indicate that, by the end of 2019, China had reduced crude steel capacity by 
about 170 million tonnes in cumulative terms, which outperformed the goal of the 13th Five-Year 
Plan for Economic and Social D evelopment of reducing 150 million tonnes of excess steel capacity 
ahead of the 2020 deadline.74 They also note that zombie companies75 have been largely dismantled 
in the iron and steel industry. In addition, steel production not conforming to quality sta ndards was 
cut by 140 million tonnes in 2017. The authorities state that the capacity of "standard steel" has 
been fully banned.  
4.118.   Going forward with its capacity reduction efforts, in January 2018, China announced a new 
policy to forbid steel plants from in creasing their capacity. They were also required to remove at 
least 1.25 tonnes of outdated capacity for every tonne of new capacity in "environmentally sensitive" 
areas of the Beijing -Tianjin -Hebei region, the Yangtze River Delta, and the Pearl River Delt a.76 Under 
the Notice on Improving Capacity Replacement and Project Filing of Iron and Steel (Fa Gai Dian 
No. 19, 2020), as from 24  January  2020, the steel capacity replacement and project filing were 
suspended; guidelines for steel project filing were for mulated and introduced, and revisions were 
made to the measures for steel capacity replacement. The Notice also imposed some 
environment -related provisions and prohibited steel smelting capacity extensions.  
4.119.   According to the OECD, in November 2019, the NDRC , the MIIT, and the National Bureau of 
Statistics jointly issued a notice requiring steel companies to conduct a study and submit a report 
on the capacity status and production changes in their facilities over the last three years. The aim 
 
73 State Council, Opinions of the State Council on Resolving Excess Capacity in the Iron and Steel 
Industry . Viewed at: http://www.gov.cn/zhengce/content/2016 -02/04/content_5039353.htm . 
74 A 2020 report by the OECD on the world's steelmaking capacity noted a decrease in China's 
steelmaking c apacity from 1,192.9 million tonnes in 2016 to 1,152.2 in 2019; these figures were not confirmed 
by the authorities. According to the study, these calculations are based solely on the sum of all the steelmaking 
plants in existence for which information is available to the OECD Secretariat. OECD (2020), Latest 
Developments in Steelmaking Capacity . Viewed at: https://www.oecd.org/industry/ind/latest -developm ents-in-
steelmaking -capacity -2020.pdf . 
75 The term "zombie companies" r efers to companies that are unable to cover debt servicing costs from 
current profits.  
76 State Council, China Releases New Steel Capacity Replacement Policy , 9 January 2018. Viewed at: 
http://english.www.gov.cn/state_council/ministries/2018/01/09/content_281476006915798.htm . WT/TPR/S/ 415 • China  
 
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  of this investig ation was to review the changes in capacity and equipment in China's steel sector 
since 2016.77 
4.3.2.4   Electronic, IT , and integrated circuits  
4.120.   According to the Statistical Yearbook of China's Electronic Information, the market share of 
SOEs in electronic informat ion manufacturing enterprises (above a certain designated scale) stood 
at 3.5% in 2018, while private enterprises accounted for 47.3%.  
4.121.   The integrated circuit (IC) industry is the core of information technologies. As such, the 
authorities see it as a strate gic industry supporting national economic and social development and 
maintaining national security. The Made in China 2025 initiative reiterated China's focus on 
next-generation IT, with reference to semiconductors. The authorities indicate that in 2018, t he 
operating revenue of IC manufacturing enterprises (above a designated scale) was CNY  364.4 billion. 
In addition, the statistics of China Semiconductor Industry Association suggest that in 2019 the 
revenue of China's IC industry was about USD  108 billion , with 40.51% coming from IC designing, 
28.42% from IC manufacturing, and 31.07% from IC packaging and testing.  
4.122.   China relies heavily on the imports of high -end ICs. Exports of ICs stood at USD  117.1 billion 
in 2020 (up from USD  84.7 billion in 2018), while  imports amounted USD  350.8 billion (up from 
USD 312.7 billion in 2018). Most demand for semiconductors reflects the country's specialization in 
the assembly of electronics, as the majority of chips are not actually consumed in China but instead 
re-exporte d to other countries in the form of electronic equipment (e.g. phones, TVs, and tablets).  
4.123.   The 2014 Guidelines for Promoting the Development of the National Integrated Circuit 
Industry set specific targets to develop China's IC and semiconductor industry. I t identified the goals 
of raising the industry's revenue to over CNY  350 billion by 2015, and achieving an annual rate of 
revenue growth of over 20% by 2020. Priority tasks include the establishment of the National 
Leading Group for the Development of Inte grated Circuit Industry, the initiation of the National 
Integrated Circuit Industry Investment Fund, and the promotion of safe and reliable hardware and 
software.  
4.124.   On 24  September  2014, the National IC Industry Investment Fund was established, with 
initial funding of USD  23 billion. The authorities state that the Fund's investment management and 
decision -making of the Fund are under the market principles, and the Fund is not affiliated with any 
government authority. According to a study by the OECD, as at May 2019, shareholding in China's 
National IC Investment Fund included: the MOF (36%); China Development Bank Capital (22%); 
China National Tobacco, a central SOE (11%); and Beijing E -Town International Investment & 
Development, a local SOE (10%).78 The authorities did not confirm these figures.79 A second round 
of funding for the IC Fund was completed in 2019, which added USD  29 billion for investments into 
upstream, domestic semiconductor companies. According to the authorities, a s at October  2019, the 
major shareholders included the MOF (11.02 %), China Development Bank Capital (1 0.77%), 
Shanghai Guosheng Group (7 .35%), China National Tobacco (7 .35%), and Beijing  E-Town 
International Investment & Development ( 4.89%). 
4.125.   As described in the Secretariat's report for China's previous Review, certain tax incentives 
continue to be granted to companies in the IC industry, mainly through the 2015 revised Circular on 
Enterprise Income Tax Policies for Further Encouragement to Development of Integrated Circuit 
Industry (MOF and SAT No. 6, 2015), and the 2016 Ci rcular on Enterprise Income Tax Policies for 
Software Industry and Integrated Circuit Industry (MOF and SAT No. 49, 2016).80 
 
77 OECD (2020), Latest Developm ents in Steelmaking Capacity . Viewed at: 
https://www.oecd.org/industry/ind/latest -developments -in-steelmaking -capacity -2020.pdf . 
78 OECD (2019), Measuring  Distortions in International Markets – The Semiconductor Value Chain . 
Viewed at: http://www.oecd.org/officialdocuments/publicdisplay documentpdf/?cote=TAD/TC(2019)9/ 
FINAL&docLanguage=En . 
79 According to the OECD report, at the provincial level, the National IC Industry Investment Fund is 
supplemented by a series of local funds, such as the Beijing IC Industry Equity Investment Fund. The  
authorities also indicate that the local funds have no government involvement.  
80 WTO document WT/TPR/S/375/Rev.1, 14  September  2018.  WT/TPR/S/ 415 • China  
 
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  4.126.   On 4  August  2020, the State Council released the Policy on Promoting High -quality 
Development of Integrated Circuit Industry and So ftware Industry (Guo Fa No. 8, 2020).81 Under 
the Policy, China rolled out a wide range of favourable measures, such as preferential corporate 
income tax, favourable financing, support for R&D, preferential import duties for certain products, 
and simplifie d customs formalities. The authorities indicate that these measures are designed for 
domestic and foreign -invested companies on the same terms, as specified by the law. The Policy 
also seeks to strictly implement an intellectual property protection system for ICs and software and 
increase the penalties  for violations of IPRs. On international cooperation, the policy aims to, 
inter alia, create an environment for international companies to invest China; encourage 
international companies to build R&D centres in China; and promote the "Go Global" initiative of the 
IC industry and software industry. The authorities state that the incentives measures under this 
Policy are set to replace the existing preferential tax treatment, after a transition period.  
4.127.   The National Informatization Development Strategy, which was issued in July 2016, seeks 
to guide the development of national informatization in the next 10 years. Action plans for IT and 
its subsectors are presented in Table 4.20.  
Table 4.20 Action plans for IT and its subsectors, 2016 -20 
Plans  Goals (by 2020)  Date of issue  
Information Industry 
Development Guide  Revenue of the information industry will reach 
CNY 26.2 trillion (up 8.9% from 2015); general 
trade exports of electronic information products 
will account for 30% of the industry exports (up 
4.5% from 2015)  16 January  2017 
Plan for the Development of the 
Information and Communication 
Industry  (2016 -2020)  ICT revenue will reach CNY 3.5 trillion (up 15.5% 
from 2015)  17 January  2017 
Plan for the D evelopment  of the 
Software and Information 
Technology Services (2016 -
2020)  Revenue of software and IT will exceed 
CNY 8 trillion, with an annual growth rate of 
13%, accounting for 30% of the IT industry; 
exports of softwar e products will exceed 
USD 68 billion  17 January  2017 
Plan for the D evelopment  of the 
Large Data Industry (2016 -
2020)  Revenue of large data -related products and 
services will exceed CNY  1 trillion, with an annual 
growth rate of 30%  17 January  2017 
Three -Year Action Plan  for the 
Development of Cloud 
Computing (2017 -2019)  By 2019, the cloud computing industry will reach 
CNY 430 billion  30 March  2017 
Three -Year Action Plan  for the 
Development of Industrial 
Electronic Commerce  E-commerce purchases will amount to 
CNY 9 trillion and e -commerce sales to 
CNY 11 trillion  25 September  2017 
Information Industry 
Development Guide  Revenue of the information industry will reach 
CNY 26.2 trillion (up 8.9% from 2015); general 
trade exports of electronic information products 
will account for 30% of the industry's exports 
(up 4.5% from 2015)  16 January  2017 
Source:  Information provided by the authorities.  
4.3.2.5   Shipbuilding  
4.128.   The Made in China 2025 initiative considers shipbuilding as one of its 10 priority sectors. The 
Plan has the overarching strategic objective to make China strong in high -end shipbuilding. 
Furthermore, in the context of the 13th Five-Year Plan  for Economic and Social Development , the 
MIIT unveiled in December 2016  the Shipbuilding Industry Deepening Structural Adjustment, 
Accelerating Transformation and Upgrading Action Plan (2016 -20), outlining the reform and 
transformation upgrade needed for the shipbuilding industry.  
4.129.   In addition, the Plan aims to improve technological innovation, streamline capacity, 
incorporate intelligent manufacturing, improve overall quality and branding, promote military -
commercial shipbuilding collaboration, and extend the global reach in terms of investments and 
partnerships. It also urges shipbuilders to comply with environmental good practices and promote 
 
81 State Council, Policy on Promoting High -quality Development of Integrated Circuit Industry and 
Software Industry.  Viewed  at: http://www.gov.cn/zhengce/content/2020 -08/04/content_5532370.htm . WT/TPR/S/ 415 • China  
 
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  green shipping and energy efficiency. China's policy to promote a green shipbuilding industry was 
previously signa lled in 2009, as the country proposed to accelerate the scrap -and-build of old fleets 
and eliminate single -hulled oil tankers, aiming to increase the safety of ships and decrease the 
environmental burden from shipping by replacing old fleets with new green er vessels.  
4.130.   The 13th Five-Year Plan of China Ship Accessory and Equipment Industry (2016 -20) also 
pursued the objective of raising the proportion of domestic equipment to reach 80%, 60%, and 
40%, respectively, in three ship models, high -tech ships, and oce an engineering equipment by 
end-2020. According to the authorities, the Plan and its objectives serve only as guidelines.  
4.131.   In January 2017, the MIIT published a statement encouraging financial institutions to 
support the domestic shipbuilding industry. Acco rding to an OECD study, the China Banking 
Regulatory Commission (CBRC) encouraged financial institutions to support the domestic 
shipbuilding industry and exports of domestically built ships.82 The authorities indicate that over the 
years, they have provid ed support to the development of the real economy, including shipbuilding. 
As such, they note that in recent years, with the continuous improvement of China's shipbuilding 
technology and quality, as well as the enhancement of China's business environment, including 
financing conditions, demand for ships in China has increased, which has played a positive role in 
supporting Chinese shipbuilding enterprises to resist the adverse impact of long -term market 
downturn and maintain the healthy and stable developme nt of the industry.  
4.132.   China is the world's leading shipbuilder. In recent years, the level of ship design and 
shipbuilding in China has improved rapidly. China is building large container ships of above 
20,000  TEU in batch. Construction of large cruise ships  has also begun, but the product structure 
still needs to be optimized. Low value -added and low -tech ship types, such as bulk carriers, still 
account for a large proportion (52% of the total delivery in 2020 in terms of compensated gross 
tonnage ). 
4.133.   In 2019,  a plan to merge the country's two largest state -owned shipbuilders – the China 
State Shipbuilding Corp. (CSSC) and the China Shipbuilding Industry Co. (CSIC)  – was announced.83 
The authorities state that as at March 2021, the joint reorganization of the C SSC and the CSIC had 
not yet been completed.  
4.4  Services  
4.4.1   Financial services  
4.4.1.1   Overview  
4.134.   China's policy on financial services seeks to prevent and control financial risks, serve the 
real economy, and further promote liberalization.84 The authorities indicate that some current policy 
measures are geared towards addressing the rebound of non -performing bank assets, regulating 
shadow banking, and combatting financial corruption and crime. Specific efforts include actions to 
further impro ve the monetary policy transmission channel, improve the capital market, support small 
and medium -sized banks to replenish their capital and optimize their governance, improve the 
corporate governance of financial institutions, and regulate the qualificati ons and behaviour of 
shareholders. In the foreign exchange market, the authorities aim to promote market -based 
development of the foreign exchange market.  
 
82 OECD, Science, Technology and Industry Policy Papers , August 2019, No.  75. 
83 Both the CSSC and the CSIC are managed by the State -owned Assets Supervision and Administration 
Commission (SASAC) on behalf of the Government. The shipyards of the CSIC are located in northeast and 
northern China. Its subsidiaries include Dalian Shipbuil ding Industry, Bohai Shipbuilding Heavy Industry, 
Qingdao Beihai Shipping Heavy Industry, and Shanhaiguan New Shipbuilding Industry. CSSC shipyards are 
mainly located in eastern and southern China, and its subsidiaries include Shanghai Waigaoqiao Shipbuild ing, 
Jiangnan Shipyard (Group) Co., Ltd., Hudong -Zhonghua Shipbuilding (Group) Co., Ltd., and the rebranded 
CSSC Offshore & Marine Engineering Company (COMEC).  
84 The description will mainly focus on the regulatory developments that have occurred during the  
review period. See WT/TPR/S/375/Rev.1, 13 July 2018, paras.  4.143 -4.172; WT/TPR/S/342/Rev.1, 12  October 
2016, paras.  4.44-4.84; WT/TPR/S/300/Rev.1, 7  October 2014, paras.  4.48-4.84; WT/TPR/S/264/Rev.1, 20 
July 2012, paras.  96-164; and WT/TPR/S/230/Rev.1, 5 July 2010, paras.  47-82. WT/TPR/S/ 415 • China  
 
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  4.135.   The sector accounted for 7.9% of GDP in 2019 and 2018; it employed 8.2  million people 
in 2019, up fro m 6.9 million in 2018. Its structure is still unbalanced, with a significant predominance 
of banks over other types of financial institutions. The stock market is relatively small. Market 
capitalization of listed domestic companies stood at CNY  8.5 trillio n in 2019, representing roughly 
59.3% of GDP.85 By contrast, according to the World Bank, the ratio of total bank credit to GDP 
stood at 164.6% in 2019. Commercial banks' dominance of the sector is evident from their 
participation in the system's total ass ets: over 82% of assets and liabilities of banking institutions, 
up from some 78% for both indicators in 2018. The authorities indicated that in 2020, the market 
capitalization of listed domestic companies stood at CNY  79.72 trillion, representing 78.5% of  GDP. 
In 2018, 2019, and 2020, equity financing86 of non -financial sectors stood at CNY  861.5 billion, 
CNY 918.9 billion, and CNY  1.26 trillion, respectively; non -financial companies issued 
CNY 1.65 trillion, CNY  2.58 trillion, and CNY  3.45 trillion in cor porate bonds (including corporate 
goods, convertible bonds, and exchangeable bonds), respectively, in those same years through the 
exchange bond market. The exchange bond market issued local government bonds totalling 
CNY 2.56 trillion, CNY  2.83 trillion, and CNY  2.42 trillion, respectively, in 2018, 2019, and 2020.  
4.136.   State -owned banks are among the major players in China's financial sector. Large banks in 
the system (e.g. the Big Six state -owned commercial banks and the three policy banks87) and most 
other f inancial institutions (e.g. credit cooperatives, non -bank financial companies, and insurance 
companies) are either directly state -owned or owned by other SOEs. In a report to the NPC, the 
State Council indicated that total assets of state -owned financial i nstitutions at end -2017 was 
CNY 241 trillion, which represented 88% of the total.88 
4.137.   On 24  January  2019, the number of China's official big state -owned banks, the most 
important banks in the domestic system, reach ed six, following the inclusion of the Posta l Savings 
Bank of China by the authorities, alongside Industrial and Commercial Bank of China, Agricultural 
Bank of China, Bank of China, China Construction Bank, and Bank of Communications.89 The 
authorities state that, in recent years, China has encourag ed joint -stock commercial banks to 
optimize corporate governance structure, improve governance and execution efficiency, and 
accelerate high -quality development and transformation. In June 2019, the CBIRC approved the 
initial public offering (IPO) of the P ostal Savings Bank of China in A -shares.  
4.138.   Assets of banks continued to grow during the review period. As at the end of the first half of 
2020, the total CNY and foreign currency assets of China's banking institutions reached 
CNY 309.4  trillion, up 9.7% year -on-year. Profit growth of commercial banks was generally stable 
during the review period. However, in the first half of 2020, profits of commercial banks decreased 
year-on-year. Commercial banks accumulated a net profit of CNY  1.0 trillion, down by 9.4% y ear-
on-year. The average rate of net return on equity was 10.35%. The average rate of net return on 
total assets (ROA) of commercial banks was 0.83%. Compared with the end of the first quarter of 
2020, it decreased by 0.15 percentage points. The authoritie s note that risk resilience remained 
strong. The core Tier 1 capital adequacy ratio (CAR) of commercial banks (excluding branches of 
foreign banks) was 10.47%, down by 0.41 percentage points compared with the end of last quarter 
2019; Tier  1 CAR was 11.61% , down by 0.34 percentage points, and CAR was 14.21%, down by 
0.31 percentage poin ts compared with the end of the last quarter of 2019.90 
4.139.   Regarding non -performing loans (NPLs), at the end of 2020 Q2, the outstanding balance of 
NPLs of commercial banks was CNY 2.74 trillion, up by CNY  124.3 billion compared with last quarter. 
The NPL ratio of commercial banks was 1.94%, an increase of 0.03 percentage points compared 
with the previous quarter, which seems to reflect the economic impacts of the COVID ‑19 pandemic. 
 
85 World Bank, Market Capitalization of Listed Domestic Companies (Current US$) in China.  Viewed at: 
https://data.worldbank.org/indicator/CM.MKT.LCAP .CD?locations=CN . 
86 Including that in the Shanghai and Shenzhen Stock Exchanges and National Equities Exchange.  
87 The three policy banks are China Development Bank, Export -Import Bank of China, and Agricultural 
Development Bank of China.  
88 Zhang, C. (2019 ), How Much Do State -Owned Enterprises Contribute to China's GDP and 
Employment?,  World Bank document. Viewed at: http://documents1.worldbank.org/curated/en/449701565248 
091726/pdf/How -Much-Do-State -Owned -Enterprises -Contribute -to-China -s-GDP-and-Employment.pdf . 
89 Industrial and Commercial Bank of China, Agricultural Bank of Chi na, Bank of China, and China 
Construction Bank of China are designated as global systemically important banks by the Financial Stability 
Board.  
90 CBIRC, Supervisory Statistics of the Banking and Insurance Sectors – 2020 Q2 , 8 October 2020. 
Viewed at: http://www.cbirc.gov.cn/en/view/pages/ItemDetail.html?docId=921929&itemId=983 . WT/TPR/S/ 415 • China  
 
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  At the same time, the balance of loan loss provisions of commercial banks reached CNY  5.0 trillion, 
an increase of CNY  206.0 billion from the previous quarter. The provision coverage ratio was 182.4% 
in the first half of 2020, down by 0.80 per centage points compared with the end of last quarter 
2019. The authorities have introduced a phased deferment of loan repayments scheme, in which 
banks have been allowed to grant deferment of loan repayments to micro, small, and medium -sized 
enterprises (M SMEs) and other eligible firms upon application. In this case, banks could refrain from 
downgrading enterprises' loan risk categories, while upholding the approach of substantive risk 
assessment. The authorities note that in the first half of 2020, COVID ‑19 had a sizeable impact on 
China's economy, and new NPLs in the banking sector rose. In this regard, the CBIRC urged banks 
to do a more accurate classification of credit assets, adopt various means to make up for capital, 
increase the withdrawal of provisi ons in advance, continue to increase the disposal of NPLs, and 
strictly control the increment of new NPLs. They indicate that as at first quarter 2021 the risk of 
NPLs has generally eased.  
4.140.   Over the period leading up to the COVID ‑19 pandemic, the Government  had been exploring 
the resolution framework of financial institutions, and in accordance with laws and regulations, it 
intervened in three relatively weak banks. In 2019, developments in China's banking industry were 
marked by the takeover of Baoshang Ban k and the recapitalization of the Bank of Jinzhou and 
Hengfeng Bank. In November 2020, Beijing No.  1 Intermediate People's Court ruled for the 
bankruptcy liquidation of Baoshang Bank.  
4.141.   In the insurance sector, assets of companies increased during the review  period, amounting 
to CNY  22.0 trillion in the first half of 2020. Compared with the beginning of the year, assets of 
property and casualty insurance companies registered CNY  2.4 trillion, up 5.3%; assets of life 
insurance companies reached CNY  18.6 trilli on, up 9.6%; assets of reinsurance companies recorded 
CNY 513.3 billion, up 20.5%; and assets of insurance asset management companies were 
CNY 64.4 billion, up 0.5%.  
4.4.1.2   Reform of the financial supervision framework  
4.142.   During the review period, the authorities ca rried out a significant reshuffle of China's financial 
supervision system, in response to the changing realities of the country's financial environment. The 
recent liberalization efforts by China and the context of financial innovation  have been marked by 
the prevalence of new types of challenges and the emergence of a more diverse typology of market 
participants, mainly shadow banking. In 2017, the IMF and the World Bank considered that 
coordination and detailed exchanges of information between regulators were lacking; they pointed 
out the need for China to reform its financial supervision structure.91 The authorities consider that 
the establishment of the CBIRC in 2018 significantly strengthened the overall coordination and 
penetration supervision of banki ng and insurance. The recent reforms, including strict enforcement, 
have led to a decrease in shadow banking activities. The authorities state that in 2017 shadow 
banking dropped by about CNY  20 trillion from its historical peak. This helped to maintain th e 
stability of the financial system.  
4.143.   The new structure follows an integrated type of supervisory model. The Financial Stability 
and Development Committee (FSDC), established in November 2017, is a financial regulatory body 
under the auspices of the State C ouncil and headed by a Vice Premier, which is higher ranked than 
the ministry -level heads of the other financial regulators. The FSDC is tasked with, inter alia, 
implementing the decisions and plans of the State Council regarding the financial sector; deli berating 
major reform and development programmes for the financial sector; coordinating financial reform, 
development and regulation, issues concerning monetary policy and financial regulation, and major 
issues concerning financial regulation; analysing in ternational and domestic financial situations, 
addressing international financial risks, and conducting policy research on systemic risk prevention 
and treatment to maintain financial stability; and guiding local financial reform, development, and 
supervis ion of the duty performance of local financial regulatory authorities and governments. During 
the review period, a new supervisory arrangement was adopted, combining the oversight structure 
of banking and insurance to form one single regulator, the CBIRC. The CBIRC was established in 
April 2018, as a result of a merger of the CBRC and China Insurance Regulatory Commission (CIRC). 
 
91 IMF (2017), People's Republic of China: Financial Sector Assessment Program – Detailed  Assessment 
of Observance of Basel Core Principles for Effective Banking Supervision . Viewed at: https://www.imf.org/en/ 
Publications/CR/Issues/2017/12/26/Peoples -Republic -of-China -Financial -Sector -Assessment -Program -Detailed -
Assessment -of-45516 . WT/TPR/S/ 415 • China  
 
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  Its mandate is to, inter alia , regulate and supervise banking and insurance institutions, maintain fair 
competition in the bankin g and insurance sectors, and protect the legitimate rights and interests of 
stakeholders, including depositors and insurance policyholders.92 It also collects and publishes 
statistics on industry, approves the establishment or expansion of banks and insura nce companies, 
and resolves potential liquidity, solvency, or other problems that might occur in individual 
companies. The China Securities Regulatory Commission ( CSRC ) has a similar mandate in the 
securities and futures market that includes, inter alia, the responsibilities of policy formulation and 
implementation, including monitoring of compliance.93 
4.144.   As part of the reform of financial supervision, some legislative and rulemaking 
responsibilities originally vested in the CBRC, the CIRC, and the CSRC withi n their respective 
segments were transferred to the PBOC. Moreover , in addition to its central bank responsibilities of, 
inter alia , formulating and implementing monetary and exchange rate policies; regulating interbank 
markets, foreign exchange markets, t he payment and settlement system, and the credit information 
system; and building a macro -prudential monitoring system, and conducting regular risk 
assessments, the PBOC also leads the effort in preventing systemic financial risk and promoting the 
stabilit y of the financial system. It is responsible for establishing the mechanism for the assessment 
and identification of systemically important financial institutions, and leading the drafting of basic 
rules, monitoring, and analysis, as well as supervising su ch financial institutions.  
4.4.1.3   Recent regulatory developments  
4.4.1.3.1   Overview  
4.145.   China continued to reform its financial sector during the review period. While a number of 
licensing and prudential regulations were adopted or amended, several measures were taken to 
liberalize financial activities and to further promote foreign participation in the banking, insurance, 
pension fund management, and securities industries. As regards the opening of the financial market, 
in July 2019, the FSDC announced a package of 11 reform m easures covering: (i)  credit rating by 
foreign -invested companies; (ii)  foreign participation in asset management; (iii)  steps to encourage 
foreign financial institutions to invest in wealth management subsidiaries of Chinese commercial 
banks; (iv)  foreign  participation in pension fund management; (v)  foreign participation in currency 
brokerage; (vi)  lifting the foreign ownership cap on life insurance companies; (vii)  lifting the 
restrictions on foreign ownership in insurance asset management companies; (vi ii) relaxing the entry 
restrictions on foreign -invested insurance companies; (ix)  lifting foreign ownership limits on 
securities companies, futures companies, and fund management companies; (x)  allowing foreign -
invested financial institutions access to Typ e-A underwriting licences in the interbank bond market; 
and (xi)  allowing foreign institutional access to inter -bank bond markets.  
4.4.1.3.2   Regulatory developments in banking  
4.4.1.3.2.1   Developments in licensing of foreign banks  
4.146.   The 2018 National Negative List lifts the cap on foreign ownership in Chinese commercial 
banks, which was previously set at 20% for an individual foreign investor and 25% for a group of 
investors. Accordingly, on 17  August  2018, the CBIRC published the Dec ision on Abolishing and 
Revising Some Rules, which revises the Implementation Measures for the Administrative Licensing 
Items Concerning Chinese -Funded Commercial Banks.  
4.147.   Furthermore, on 15  October  2019, the State Council amended the Regulations on 
Administ ration of Foreign -Funded Banks (State Council Order No.  720), followed in December 2019 
by its implementing rules published by the CBIRC. The amendment abolishes the requirements that 
obliged foreign shareholders to have total assets of no less than USD  10 billion to establish wholly 
foreign -owned banks or a joint venture with Chinese banks, or USD  20 billion to establish branches 
in China. It also allows foreign investors to establish and operate both branches and wholly owned 
or joint ventures simultaneou sly in China, and operate agency collection and payment business. In 
addition, the amended regulation removed the requirement that "the Chinese sole or key 
shareholder of a joint venture bank shall be a financial institution". While the new regulation lowe rs 
 
92 CBIRC, About the CBIRC . Viewed at: https://www.cbirc.gov.cn/en/view/pages/ItemList.html?itemPId 
=974&itemId=975&itemUrl=About/Mandates.html&itemTitle=Mandates&itemPTitle=About%20the %20CBIRC . 
93 CSRC, About CSRC . Viewed at: http://www.csrc.gov.cn/pub/csrc_en/about/ . WT/TPR/S/ 415 • China  
 
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  the minimum amount of the fixed -term CNY deposit that branches of foreign banks in China can 
accept from Chinese individuals (from no less than CNY  1 million to no less than CNY  0.5 million per 
deposit), it also removes the approval requirement applicab le to foreign -invested banks engaging in 
CNY-related businesses.  
4.148.   The authorities indicate that on 27  April 2018 a Notice was issued by the CBRC94, allowing 
the operating capital of foreign banks to be calculated in a "consolidated manner". Under the new 
framework, if the operating capital of an established branch meets the minimum required capital, 
the foreign bank may authorize the established branch to allocate its excess operating capital to an 
additional branch in China.95 
4.4.1.3.2.2   Developments in banking prudential regulations and measures to tackle other 
systemic risks  
4.149.   Measures were taken during the review period to further improve China's prudential 
regulation framework, in accordance with the Core Principles of Effective Banking Supervision under 
Basel III (Revisions) and based on the actual situation of the banking industry in China.  
4.150.   On 24  April 2018, the authorities adopted the Measures for the Administration of the Large 
Exposures of Commercial Banks, effective on 1  July 2018, in line with Basel III s upervisory 
framework for measuring and controlling large exposures. Under the Measures, the total exposure 
of a commercial bank to an interbank counterparty or a group of connected interbank counterparties 
shall not exceed 25% of the bank's net value of Ti er 1 capital. The total exposure of a global 
systemically important bank to another global systemically important bank shall not exceed 15% of 
the bank's net Tier 1 capital.  
4.151.   On 25  May 2018, the Measures on Liquidity Risk Management of Commercial Banks were  
adopted, with an effective date of implementation of 1  July 2018. The Measures require commercial 
banks to increase the diversification of and to further stabilize their financing sources. They introduce 
three new indicators for liquidity risk supervision  in response to Basel III reforms96: 
• the net stable funding ratio (NSFR), which measures banks' long -term stable funding to 
support their business development, applies to lenders with assets of no less than CNY  200 
billion;  
• the adequacy ratio of the high -quality liquid assets (HQLA) ratio, which evaluates whether 
banks have enough HQLA to cover short -term liquidity gaps when under stress, applies to 
lenders with assets below CNY  200 billion; and  
• the liquidity matching ratio, which applies to all lenders, me asures the maturity matching 
of bank assets and liabilities.  
4.152.   In accordance with the Liquidity Risk Management Measures, a commercial bank with an 
asset size of CNY  200 billion and above shall continuously meet the minimum supervisory standards 
for the liqu idity coverage ratio (LCR) (at 100%), NSFR (at 100%), liquidity ratio (at 25%), and 
liquidity matching ratio (at 100%). A commercial bank with an asset size of less than CNY  200 billion 
shall continuously meet the minimum supervisory standards for adequacy  ratio of HQLA (at 100%), 
liquidity ratio (at 25%), and liquidity matching ratio (at 100%). Commercial banks shall fully 
implement the supervisory requirements for the liquidity matching ratio from 1  January  2020.  
4.153.   On 30  April 2019, the CBIRC launched a con sultation on the draft Interim Measures for the 
Classification of Financial Asset Risks of Commercial Banks, following the release of new benchmarks 
by the Basel Committee on Banking Supervision. The draft measures extend the risk classification 
from loans  to all financial assets that bear credit risk. The draft Measures, once adopted, would 
 
94 Notice of the General Office of the CBRC on Issues Concerning the Amendment and Implementation 
of Measures for t he Administrative Licensing of Foreign -Funded Banks (CBIRC Notice No.  45, 2018).  
95 State Council Information Office, Notice of the CIRC on Further Liberalizing Market Access for Foreign 
Banks. Viewed at: 
http://www.scio.gov.cn/32344/32345/39620/41925/xgzc41931/Document/1666285/1666285.htm . 
96 These indicators are in  addition to two indicators that were alread y in place: liquidity coverage ratio 
(LCR) and liquidity ratio.  WT/TPR/S/ 415 • China  
 
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  replace the 2007 Guidelines for Risk -Based Loan Classification, which classifies commercial loans 
into five tiers: normal, special mentioned, substandard, doubtful, and  loss. According to the 
authorities, the draft Measures extend the risk classification from loans to all financial assets that 
bear credit risk, emphasize the concept of debtor -centred classification, clarify the number of 
overdue days as an objective indi cator of risk classification, and refine the risk classification 
requirements for restructured assets.  
4.154.   Several other measures were taken by the authorities to better contain financial risks. In 
January 2018, the CBRC released the Measures for the Administr ation of Entrusted Loans by 
Commercial Banks to regulate entrusted loans and risks thereof.97 The Measures set clear guidelines 
on the sources of funds, loan purposes, and risk management, as well as strict supervisory rules on 
entrusted loans in commercia l banks. Under the Measures, the CBRC forbids the use of entrusted 
loans for, inter alia , bonds, futures, and financial derivatives investment. Over the same period, the 
CIRC revised rules to tighten regulation over the use of insurance funds, in order to better serve the 
real economy.  
4.155.   In April 2018, China's financial regulators jointly issued the Guiding Opinions on Regulating 
the Asset Management Business of Financial Institutions, and a supplementary notice was issued on 
20 July 2018 to clarify operation al details.98 The new rules set, inter alia , strict standards for 
investment in non -standard assets, standards of asset management product leverage, and strict 
controls on implicit guarantees.  
4.156.   In November 2018, the PBOC, the CBIRC, and the CSRC issued the Guidelines on Improving 
Regulation of Systemically Important Financial Institutions, which clarify the overall framework for 
the identification, regulation, and resolution of domestic systemically important financial institutions. 
In December 2020, the PBO C and the CBIRC issued the Measures for the Evaluation of Systemically 
Important Banks, which specify the scope, methodology, and procedure for evaluating domestic 
systematically important banks.  
4.157.   Other measures were also taken in relation to equity managem ent by commercial banks. On 
5 January  2018, the Interim Measures for the Equity Management of Commercial Banks were 
adopted by the CBRC. The Measures standardize the behaviour of shareholders of commercial banks. 
It also strengthens the information disclos ure and reporting requirements imposed on shareholders 
that have a significant impact on the operation and management of commercial banks.  
4.4.1.3.2.3   Other measures in banking  
Foreign participation in bond rating  
4.158.   The FSDC announced in July 2019 that it would allow fo reign-invested entities to provide 
credit ratings on all types of bonds in the Chinese interbank bond market and exchange -traded bond 
market. The move was initiated through the release on 1  July 2017 of PBOC Circular  No. 7/2017, 
which opened the interbank bond market to foreign credit rating agencies . The authorities indicate 
that S&P Global and Fitch Ratings have established wholly foreign -owned subsidiaries in China.  
4.159.   Prior to the 2019 Announcement, S&P Global Ratings was the only foreign entity that was 
allowed to participate in giving ratings to all kinds of bonds on the China interbank bond market, 
including financial institution bonds, debt financing instruments for non -financial enterprises, 
structured products, and foreign bonds. On 11  July 2019, S&P Global (China) Ratings released its 
first rating report for a domestic issuer in China, rating ICBC Financial Leasing Co., Ltd. "AAA" with 
a "stable" outlook. On 14  May 2020, the US firm Fitch Ratings was allowed, via its wholly owned 
subsidiary, to conduc t certain bond rating business in the interbank bond market. Moody's, another 
foreign -owned rating agency, operates in the Chinese market through equity participation. At 
present, Moody's holds 30% of the equity in China Chengxin International Credit Ratin g (CCXI), 
 
97 Entrusted loans refer to loans provided by a corporate lender to a corporate borrower through a 
commercial bank that acts as a trustee of the lender. Entrusted loans are considered to be sha dow banking in 
China.  
98 Notice on Further Clarifying Relevant Matters in the Guiding Opinions on Regulating the Asset 
Management Business of Financial Institutions (detailed rules).  WT/TPR/S/ 415 • China  
 
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  which is qualified to provide rating services for all bond products in the interbank and exchange 
markets.  
Participation of foreign financial institutions in the establishment and investment of the 
wealth management subsidiaries of commercial banks  
4.160.   The FSDC announced that China will encourage foreign financial institutions to participate in 
the establishment of, and make investments in, the wealth management subsidiaries of Chinese 
commercial banks. Furthermore, joint ventures betwee n foreign asset management agencies and 
Chinese banks or insurance companies to establish an asset management company controlled by 
the foreign party would be permitted. On 24  September  2020, the CBIRC approved the 
establishment of Huihua Wealth Management  Co., Ltd., a joint venture co -invested by France's 
Amundi Asset Management (55%) and Bank of China Wealth Management Co., Ltd. (45%). In 
addition, on 11  August  2020, the CBIRC approved a joint wealth management venture among 
Blackrock Financial Management  Inc., CCB Wealth Management Co., Ltd., and Fullerton Management 
Pte Ltd.  
4.161.   On 3  January  2020, the CBIRC published the Guiding Opinions on Promoting the 
High-Quality Development of the Banking and Insurance Industries, which encourage foreign -funded 
institut ions to participate in various aspects of the wealth management business. While the Guiding 
Opinions further encourage business collaboration in financing (including trade finance, finance 
granted to SMEs, and commodity finance), they also emphasize collab oration in the wealth 
management business.  
Currency brokerage by foreign companies  
4.162.   According to the FSDC's announcement, China will support foreign entities to establish 
currency brokerage firms using their own capital or to take an equity stake in a Chine se broker. On 
3 September  2020, the CBIRC approved the establishment of Japan's Ueda Yagi Money Broking 
(China) Co., Ltd., China's first wholly foreign -invested currency brokerage.  
Reform of the interest rate setting mechanism  
4.163.   On 17  August  2019, the PBOC r eleased an announcement to improve the formation 
mechanism of the loan prime rate (LPR), to further reflect market dynamics.99 Under the reforms, 
the new LPR will be linked to rates set during open market operations, namely the PBOC's 
medium -term lending f acility (MLF), which is determined by broader financial system demand for 
central bank liquidity. Since August 2019, the new LPR is announced at 9:30  a.m. on the 20th of 
every month, in lieu of publishing it on daily basis. The rate had up until the reform  been set using 
quotations from 10 contributing banks. The number of quotation banks was expanded from the 
top 10 nationwide banks by loan volume to 18 quotation banks, including 10 nationwide banks, 
2 city commercial banks, 2 rural commercial banks, 2 for eign-invested banks, and 2 private banks, 
to further reflect the representativeness of quotation banks and encourage small - and medium -sized 
banks to use LPR.  
4.4.1.3.3   Regulatory developments in insurance  
4.4.1.3.3.1   Developments in licensing requirements  
4.164.   Since 2018, the Centr al Government has launched several measures to open up the 
insurance industry, including abolishing the requirement of having a representative office in China 
for at least two years and 30 -year operation period to establish foreign -invested insurance 
institutions in China, allowing foreign insurance groups to invest in insurance institutions, and 
opening -up measures in the field of insurance intermediaries. On 15  October  2019, the State Council 
announced its decision to modify certain provisions in the Admi nistrative Regulations on Foreign -
 
99 PBOC, China Monetary Policy Report Quarter Four, 2019 , 19 February 2020.  Viewed at: 
http://www.pbc.gov.cn/en/3688229/3688353/3688356/3830461/3985458/2020030717393760199.pdf . WT/TPR/S/ 415 • China  
 
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  invested Insurance Companies100; it was followed in December  2019 by implementing rules 
published by the CBIRC.  
4.165.   Foreign ownership limits were also lifted on life insurers and insurance asset management 
companies. In 2018, t he PBOC announced that the foreign ownership cap on life insurance 
companies would be raised to 100% by 2021. Subsequently, in July 2019, the FSDC announced that 
China will accelerate this transition timeline by allowing Chinese life insurance companies to  be fully 
foreign -owned in 2020. On 9  December  2019, the CBIRC released the Notice Concerning Clarification 
of the Timeframe for the Cancellation of Foreign Ownership Restrictions on Joint Venture Life 
Insurance Companies. The Notice states that all restri ctions on foreign ownership of joint -venture 
insurance companies that engage in life insurance operations will be officially lifted starting 
1 January  2020, giving foreign investors the opportunity for full ownership. In addition, in line with 
FSDC's annou ncement, the CBIRC is revising the Interim Administrative Regulations on Insurance 
Asset Management Companies, which lift the 25% foreign ownership cap on insurance asset 
management companies.  
4.4.1.3.3.2   Developments in prudential regulations  
4.166.   China's current solvency  regime, the China Risk Oriented Solvency System (C -ROSS), was 
first brought into operation in January 2016. Under C -ROSS, three indicators need to be reported by 
insurers to the regulator in their solvency reports: (i)  the core solvency ratio (the ratio o f core capital 
to minimum capital); (ii)  the overall solvency ratio (the ratio of core capital plus supplementary 
capital to minimum capital); and (iii)  the integrated risk rating (IRR), which ranges from A (highest 
rating) to D (lowest) based on both quan titative capital requirements and an evaluation of 
unquantifiable capitalized risks.  
4.167.   In September 2017, the CIRC launched a public consultation on C -ROSS Phase II, to take 
into account the evolving nature of risks in the insurance industry. In January 2021 , the CBIRC 
revised and issued the Regulations on the Solvency Management of Insurance Companies, which 
specify solvency standards as follows: core solvency ratio to be not less than 50%; comprehensive 
solvency ratio to be not less than 100%; and IRR, whic h measures the overall solvency risk of 
insurance companies (including capitalized and uncapitalized risks), shall not be lower than Class B. 
A company will be considered to meet solvency standards only when all three  indicators are satisfied. 
According to  the authorities, after two rounds of quantitative testing and a number of expert 
discussions by the insurance industry, a draft containing all rules under C -ROSS Phase II has been 
completed. The authorities asked to receive the opinions from the industry by end -January 2021.  
4.4.1.3.4   Recent developments in securities activities  
4.4.1.3.4.1   Foreign participation  
4.168.   In March 2021, the authorities stated that the legislative work on the Futures Law was 
ongoing. The Futures Law is set to be the next overarching legislation for China' s futures industry.  
4.169.   Efforts have been made in recent years to develop and vitalize China's securities market, 
including expanding the range of products available to foreign investors, enlarging foreign investors' 
access to the Chinese market, and enhancing  the legal regime governing the sector.  
4.170.   On 28  June 2018, the 2018 edition of the Special Administrative Measures for the Market 
Entry of Foreign Investment (Negative List) provided that foreign shareholding restrictions in 
securities companies, futures com panies, fund management companies, and life insurance 
companies would be eased to allow investment up to a maximum stake of 51%, and the measures 
approved the lifting of all such restrictions in 2021. However, the shareholding restrictions for foreign 
securities companies, fund management companies, futures companies, and life insurance 
companies would be officially lifted in 2020, a year earlier than previously scheduled, which means 
that full foreign ownership is therefore allowed. The authorities note th at caps on foreign ownership 
of fund management companies and securities companies have been abolished nationwide since 
 
100 State Council, Amendments to Regulations in Fin ance Sector , 15 October 2019. Viewed at: 
http://english.www.gov.cn/policies/latestreleases/201910/15/content_WS5da57b97c6d0bcf8c4c1524e.html . WT/TPR/S/ 415 • China  
 
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  1 January  2020 and 1  December 2020, respectively. In addition, caps on foreign ownership of 
futures companies were lifted from 1 January  2020.  
4.171.   China also extended market access opportunities for holders of Qualified Foreign Institutional 
Investors (QFII) status and Renminbi Qualified Foreign Institutional Investors (RQFII) status. 
Initially, these statuses were created to allow foreign ins titutional investors to have access to a range 
of Chinese financial products (entire A -share market, bond markets, and other asset classes). In 
September 2020, the CSRC, the PBOC, and State Administration of Foreign Exchange (SAFE) 
released the Measures fo r the Administration of Domestic Securities and Futures Investment by QFII 
and RQFII, which took effect on 1  November  2020. The measures consolidated the QFII and RQFII 
schemes into one and further streamlined application procedures. As a result, foreign i nstitutions 
can make a one -time application for the new QFII status, which allows them to invest in China's 
securities and futures market in either CNY or a tradable foreign currency. The new rules also 
expanded QFIIs' scope of investment to include, inter alia, financial futures and commodity 
futures.101 
4.172.   On 7 May 2020, the PBOC and SAFE issued the Regulations on Fund Administration for 
Domestic Securities and Futures Investments by Foreign Institutional Investors (PBOC and SAFE 
Announcement No. 2, 2020) to end the quota system for both QFII and RQFII schemes. Under the 
defunct quota system, institutional investors seeking to participate in the QFII and RQFII schemes 
were required to apply for an individual quota that sets limits on how much they can invest i n the 
capital market. The reform steps also aimed to, inter alia , allow the QFII/RQFII to independently 
choose the currency and time of inward remittance and perform integrated management of domestic 
and foreign currencies, and cancel the requirements that  a Chinese certified public accountant must 
issue special audit reports on tax -related filing of investment income. The authorities note that the 
recent reforms have further promoted foreign participation, as at February 2021, a total of 576 QFII 
instituti ons had invested in China's capital market.  
4.173.   Regarding foreign participation in China's bond market, the authorities continued to 
gradually open the bond market to foreign market participants. Pursuant to the FSDC announcement 
in July 2019, the authorities note that China now allows foreign -invested entities to become Type -A 
lead underwriters in the interbank bond market, which allows them to act as lead underwriters of all 
types of bonds.  
4.4.1.3.4.2   Measures to improve governance and prevent risks  
4.174.   On 26  October  2018, the 13th National People's Congress adopted a decision to revise the 
Company Law. The revision seeks to improve the current share repurchase regime, mainly by 
broadening the share repurchase scenarios, simplifying the decision -making pr ocedures for share 
repurchase, extending the period in which a company holds the shares that it had repurchased, 
increasing the upper limit of the number of shares of a company held by the company itself, 
establishing and improving the treasury stock syste m of joint -stock companies, and supplementing 
the normative requirements of share repurchase of listed companies. Before the revision, companies 
were banned from buying back their publicly traded shares except under four circumstances.102 The 
new regime fur ther loosens the restrictions by allowing companies to convert repurchased shares 
into corporate bonds issued by listed companies, or to buy back shares to defend their corporate 
value and shareholders' interests.  
4.175.   An amendment to the Securities Law was ado pted on 28  December  2019 and entered into 
force on 1  March  2020.103 Major changes in the amended Securities Law include implementing a 
registration -based IPO regime (which replaces the current approval regulatory framework), 
enhancing disclosure requirement s and investor protection rules, and strengthening regulatory 
enforcement and risk prevention and control. The authorities indicate that in accordance with the 
 
101 CSRC, CSRC, PBC and SAFE Release the Measures for the Administration of Domestic Securities and 
Futures Investment by Qualified Foreign Institutional Investors and RMB Qualified Foreign Institutional 
Investors , 25 September 2020. Viewed at: 
http://www.csrc.gov.cn/pub/csrc_en/newsfacts/release/202009/t20200925_383652.html . 
102 The four circumstances were capital reduction, merger with other companies, awarding  the shares to 
employees, and at the request of dissident shareholders.  
103 State Council, New Securities Law Takes Effect , 1 March 2020. Viewed at: 
http://english.www.gov.cn/policies/latestreleases/202003/01/content_WS5e5b6168c6d0c201c2cbd4dc.html . WT/TPR/S/ 415 • China  
 
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  Securities Law, the administrative measures for the issuance and trading of asset -backed securit ies 
and asset management products shall be formulated by the State Council in accordance with the 
principles of the Law.  
4.176.   The authorities have also taken several measures with a view to further strengthening the 
supervision over securities companies, regula ting certain activities of securities companies, and 
preventing risks faced by securities companies. In this respect, in 2018, the CSRC, inter alia, issued 
the Guidelines for the Internal Control of Investment Banking Business of Securities Companies and 
revised the Administrative Measures on Sponsorship for Securities Issuance and Listing. In addition, 
the CSRC issued the Regulations on the Administration of the Equity of Securities Companies, the 
Regulations on Issues Concerning the Implementation of the Regulations on the Administration of 
the Equity of Securities Companies, and the Administrative Measures for the Private Asset 
Management Business of Securities and Futures Operating Institutions. In January  2020, the CSRC 
revised the Regulations on the Ca lculation Standards for Risk Control Indicators of Securities 
Companies.  
4.177.   In July 2020, the CSRC and the CBIRC jointly revised and issued the Administrative Measures 
for Securities Investment Fund Custody Business. It allows foreign bank branches in China t o apply 
for qualification as a securities investment fund custody business and their financial indicators such 
as net assets can be calculated based on the overseas head office. The Measures also specify the 
responsibilities that shall be undertaken by ove rseas head offices and strengthen supporting risk 
management and control arrangements.104 
4.178.   Several measures were adopted to further modernize the futures market. On 
7 September  2018, the Announcement on Further Strengthening the Collection of Trading Termina l 
Information from Futures Operators Clients (CSRC Announcement No. 27, 2018) was adopted. It 
requires futures companies to ensure, inter alia , that the trading orders placed by its clients through 
trading terminal software directly reach their information  system.  
4.179.   In June 2019, the CSRC issued the Amended Measures for the Supervision and 
Administration of Futures Companies, setting out stricter qualification requirements for major 
shareholders of futures companies, especially the controlling shareholders an d the largest 
shareholders, than those in the 2014 version of the Measures. The Amended Measures also set 
disciplines on, inter alia , the obligations of the shareholders, notably when it comes to the 
management of futures companies, and the management of d omestic branches, subsidiaries, and 
overseas operating institutions of futures companies.105 
4.180.   The authorities indicate that in February 2019 the CSRC issued the amended Regulation on 
the Classification and Supervision of Futures Companies.106 On 15  January 2021, the CSRC issued a 
Decision on Amending and Abolishing Some Rules on Securities and Futures (CSRC Order No.  179), 
which amended the Administrative Measures for the Qualifications of Directors, Supervisors and 
Senior Managers of Futures Companies and the Measures for the Administration of Futures 
Exchanges.  
4.4.1.3.4.3   Foreign activities of Chinese companies  
4.181.   Regarding foreign activities of Chinese securities companies, in September 2018, the CSRC 
issued the Administrative Measures for the Overseas Es tablishment, Acquisition, and Shareholding 
of Financial Institutions of Securities Companies and Securities Investment Fund Management 
Companies to further clarify the conditions for Chinese companies going abroad and to strengthen 
the parent company's con trol over its overseas subsidiaries.  
 
104 CSRC , CSRC and CBIRC Jointly Promulgated the Administrative Measures on Custodian Business for 
Securities Investment Funds , 11 July 2020. Viewed a t: 
http://www.csrc.gov.cn/pub/csrc_en/laws/rfdm/DepartmentRules/202007/t20200711_379940.html . 
105 CSRC, CSRC Order No.  155, 2019, Measures for the Super vision and Administration of Futures 
Companies. Viewed at: http://www.csrc.gov.cn/zjhpublic/zjh/201906/t20190614_357276.htm . 
106 CSRC, CSRC Notice No.  5, 2019, Decision on Amending the Regulation on the Classification and 
Supervision of Futures Companies. Viewed at: 
http://www.csrc.gov.cn/pub/zjhpublic/zjh/201902/t20190222_3512 28.htm . WT/TPR/S/ 415 • China  
 
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  4.4.1.3.5   Developments in pension fund management  
4.182.   The FSDC announced that China will permit foreign financial institutions to set up or invest 
in Chinese private pension fund management companies. However, China's pension fund 
management sector is still operating under a pilot programme. According to the authorities, China 
continues to adopt the model of "one -on-one approval for eligible companies". They indicate that 
the CBIRC has not received formal applications from foreign fin ancial institutions to set up or invest 
in private pension fund management companies in China.  
4.183.   The only foreign presence in the industry was made effective on 27  March  2019, as the 
CBIRC approved Heng An Standard Retirement Insurance Co., Ltd., a joint ven ture between the 
UK insurance company Standard Life Aberdeen PLC and Tianjin TEDA International to establish the 
first foreign -invested pension insurance company in China. Currently, there are eight established 
Chinese pension insurance companies.  
4.184.   China's private pension segment has considerable growth potential. The authorities are 
considering measures to promote individual pillar -three pensions, including formulating new laws 
and regulations, and launching preferential tax policies.  
4.4.1.3.6   Measures to ease cross -border transactions and promote CNY internalization  
4.185.   Measures were taken during the review period to promote the internationalization of the 
CNY – among  them, the recent reforms of the QFII/RQFII status (as described in 
Section  4.4.1.3.4.1) to further faci litate qualified overseas investors to invest in China's capital 
market. In 2019, the PBOC reformed the procedures for foreign Central Banks to have better access 
to China's interbank market.  
4.186.   In addition, the Notice on Further Improving Cross -border CNY Bu siness Policies to Promote 
Trade and Investment Facilitation (Yin Fa No. 3, 2018), adopted on 5  January  2018, aims to promote 
cross-border CNY business in relation to trade and investment. The Notice provides that companies 
may settle with CNY for all cros s-border transactions that can be settled in foreign currencies in 
accordance with the law. It also states that domestic enterprises may transfer CNY  funds raised 
abroad by issuing bonds and stocks back to the domestic market for use as needed.  
4.187.   On 23  Octob er 2019, SAFE issued the Circular on Further Promoting the Facilitation of Cross -
border Trade and Investment (Hui Fa No. 28, 2019). The regulation consists of measures to simplify 
the foreign exchange control requirements under both current account transac tions 
(e.g. import/export of goods and services) and capital account cross -border transactions (e.g.  equity 
investment and debt financing), and relax the longstanding domestic equity investment restriction 
imposed on FIEs. Prior to this reform, only FIEs with the explicit wording of "investment" in their 
business scope (such as foreign -invested holding companies and foreign -invested venture 
capital/private equity investment enterprises) were allowed to use their capital funds to make further 
onshore equity investments. Now, with the implementation of the regulation, normal FIEs (without 
an investment business scope) are also allowed to utilize and convert their capital received from 
foreign investors to make equity investment provided that: (i)  the restricti ons of the applicable 
Negative List are complied with, and (ii)  the investment is genuine and legitimate.  
4.188.   Regarding the necessary infrastructure for CNY internationalization, on 2  May 2018, the 
CNY Cross -border Interbank Payment System (Phase II) was estab lished. According to the 
authorities, it improved the settlement mode, extended the system's external service hours, 
lengthened the list of direct participants, and further improved the application system design.  
4.4.1.3.7   Developments in the fintech industry  
4.189.   The au thorities encourage financial institutions to adopt new information technologies, as a 
way to improve the accessibility of financial services and reduce risk through the application of big 
data and artificial intelligence. In 2019, the PBOC issued the Fint ech Development Plan, which lays 
out the basic principles, development goals, and supportive measures from 2019 -21. The PBOC WT/TPR/S/ 415 • China  
 
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  conducted a pilot programme in 10 different places.107 In recent years, the surge of fintech has 
opened new possibilities for expand ing access to credit for small borrowers, including small and 
medium -sized enterprises (SMEs). Big Tech companies, such as Alibaba and Tencent, have extended 
loans to millions of small borrowers.108 The leading virtual banks, MYbank (affiliated with Alibaba ), 
WeBank (affiliated with Tencent), and XW Bank (affiliated with tech giant Xiaomi), provide loans to 
millions of small firms annually, more than 80% of which have no credit history.109 The Central 
Bank's digital currency (e -CNY), which is currently being tested, is also expected to expand the 
coverage of payment services to unbanked households and small firms. This could improve their 
access to finance and further promote financial incl usion.  
4.190.   The 13th Five-Year Plan for the Development of Information Technology in China's Financial 
Sector also seeks to promote, inter alia , the innovative development of inclusive finance, financial 
infrastructure development, comprehensive financial stati stics, and financial IT. The Plan identifies 
the following priorities: (i)  attaining international advanced standards with regards to financial 
information infrastructure; (ii)  harnessing IT to drive financial innovation; (iii)  comprehensively 
deepening fi nancial standardization; (iv)  improving the security of all financial  networks; and 
(v) significantly improving governance capabilities of financial IT .110 
4.191.   Baidu, Alibaba, and Tencent are responsible for most of the high -profile innovations that 
have occurred in China's finance industry. Millions of people use Tencent's WeChat Pay and Alibaba's 
Alipay daily to make  third-party mobile payments . The fintech products currently offered include 
mainly online payment services, Internet banking, Internet loans, crowdfunding, Internet wealth 
management, Int ernet securities, and Internet insurance. Tech companies are required to obtain 
the corresponding financial licences to conduct financial services business.  
4.192.   There is no single comprehensive regulation that governs fintech activities. Various 
administrative  measures on financial services apply to fintech business operators. Additionally, China 
has not set up a single supervisory authority for the regulation of the fintech industry. As indicated 
in Table 4.21, the relevant businesses of the fintech industry a re subject to the supervision of the 
traditional regulatory authorities, depending on the characteristics of the services provided. The 
authorities indicated that in the fintech industry, financial innovation must be carried out on the 
premise of prudentia l supervision; supervision must be strictly implemented. All financial activities 
must be licensed and fully regulated in accordance with the law to avoid regulatory arbitrage. 
According to the authorities, all types of entities, domestic or foreign, are t reated equally.  
Table 4.21 Overview of the regulatory regime for fintech  
Business  Regulator  Specific legislation  
Online payment  People's Bank of China  Administrative Measures on Payment 
Services of Non -financ ial Institutions; 
Management Measures for Bank Card 
Acquiring Business; Administrative 
Measures on Online Payment Business of 
Non-bank Payment Institutions; Barcode 
Payment Service Specification (Trial)  
Insurance sales on the 
Internet  China Banking and In surance 
Regulatory Commission  Measures on Internet Insurance Business  
Online trust business and 
consumer financing  China Banking and Insurance 
Regulatory Commission  .. 
Blockchain information 
service  Cybersecurity Administration of 
China  Administrative Rules on Block Chain 
Information Services  
.. Not available.  
Source:  Information  provided by the authorities.  
 
107 The projects include the Industrial and Commercial Bank of China's supply chain financing project; 
the Bank of Agriculture's microloan product; a payment token project jointly developed by Citic Bank, China 
UnionPay, Baidu's fintech arm Du Xiaoma n Financial, and the online travel service platform Ctrip.com; Citic 
Bank's application programming interface solutions; Bank of Ningbo's fast loan product; and China UnionPay, 
Xiaomi and JD's joint project using cell phones as point -of-sale devices.  
108 Frost et al. (2019), BigTech and the Changing Structure of Financial Intermediation . Viewed at: 
https://www.bis.org/publ/work779.pdf . 
109 IMF (2020), Fintech Credit Risk Assessment for SMEs: Evidence from Chi na, IMF working paper 
WP/20/193. Viewed at: https://www.imf.org/en/Publications/WP/Issues/2020/09/25/Fintech -Credit -Risk-
Assessment -for-SMEs -Evidence -from-China -49742 . 
110 PBOC. Viewed at: http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/3333848/index.html . WT/TPR/S/ 415 • China  
 
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  4.193.   On 10  November  2020, the State Administration for M arket Regulation (SAMR) issued a 
consultation draft of the Anti -Monopoly Guidelines on the Sector of Platform Economies, aiming to 
prevent monopolistic behaviour by Internet platforms to ensure fair competition and strengthen 
anti-monopoly law enforcement.  All companies engaged in Internet platform business must be 
subject to anti -monopoly supervision. The draft expressly refers to the Anti -Monopoly Law, and set 
rules to discipline the online market, in compliance with the provisions already stated under th e 
Anti-Monopoly Law.  
4.194.   Since 4  September  2017, initial coin offerings (ICOs), i.e. fundraising in which virtual 
currencies (such as Bitcoin) are raised by way of the sale and circulation of digital tokens, are strictly 
prohibited in China, pursuant to the An nouncement on Preventing Risks relating to Fundraising 
through Token Offerings. Consequently, financial institutions and non -bank payment institutions are 
prohibited from providing products or services for token fundraising activities, including account 
opening, registration, trading, clearing, settlement, and other services.  
4.195.   On 21  March  2018, the PBOC circulated Announcement No.  7, 2018, which allows qualified 
foreign institutions to provide electronic payment services in respect of both domestic transacti ons 
and cross -border transactions. To provide third -party electronic payment services in China, qualified 
foreign investors must establish a foreign -invested payment institution and obtain a payment 
business operating licence in accordance with the 2010 Ad ministrative Measures on Payment 
Services of Non -financial Institutions. In addition, they must store, process, and analyse in Chinese 
territory all personal information and financial data collected and generated in China. Where 
international transfers of such information are necessary to process cross -border transactions, the 
transfer must comply with applicable laws and regulations.  
4.196.   As a consequence of the reform, on 31  December  2020, the US fintech company PayPal 
completed a stake acquisition deal that m akes it the first foreign company to offer digital payment 
services in China. PayPal acquired a 30% stake in Gopay, a Chinese provider of electronic payment 
services, more than a year after its purchase of 70% of Gopay, making it the sole owner.  
4.4.2   Telecommun ications  
4.4.2.1   Overview  
4.197.   China is the world's largest telecommunications market in terms of mobile, fixed -telephone, 
fixed-broadband, and mobile broadband subscriptions.111 In 2020, information, communication, and 
computer services accounted for 16.5% of total services exports (14.3% in 2019) and 8.7% of total 
services imports (5.3% in 2019).  
4.198.   According to the authorities, China's telecommunications policy aims at guiding and  
facilitating a sound and high -quality development of the information and communication industry, 
including guiding technological transformation and upgrades, optimizing the allocation of resources 
and productive factors, improving the accessibility and af fordability of information and 
communication services, maintaining fair market competition environment, safeguarding the 
legitimate interests of market entities and users, and ensuring network security.  
4.199.   China's telecommunications market has experienced not iceable development in recent 
years, in particular with regard to optical broadband, and 4G and 5G networks. As at 
September  2020, the proportion of optical fibre users reached 93%, and the proportion of 4G users 
reached 80%. China was ranked 80th of 176  economies in the 2017 International Telecommunication 
Union (ITU) Information and Communications Technology Development Index, moving up 
three  places from the previous year.112 
4.200.   The main economic characteristics of the telecommunications sector and their recent 
evolution are described in Box 4.2. Table 4.22 provides average telecom prices in  2019 in China, 
computed by the ITU as a percentage of the gross national income (GNI) per capita. The authorities 
indicate that China's telecommunications charges are determined by the market and have been set 
by telecom companies since 2014. They also note that since 2018 the out -bundle charges for local 
 
111 ITU (2018), Measuring the Information Society . Viewed at: https://www.itu.int/en/ITU -D/Statistics/ 
Documents/publications/misr2018/MISR -2018-Vol-2-E.pdf. 
112 ITU, ICT Development Index 2017. Viewed at: https://www.itu.int/net4/ITU -D/idi/2017/index.html . WT/TPR/S/ 415 • China  
 
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  mobile calls have been in the range of CNY 0.10-CNY 0.15/minute, and the charges for international 
long-distance calls were CNY  0.49-CNY 2.99/minute, while the charges for local and international 
calls made by fixed lines have been about CNY  0.10/minute and CNY  0.39-CNY 6.88/minute, 
respectivel y. 
Box 4.2 Selected indicators of the telecommunications sector, 2020  
Total telephone subscribers  (per 100 inhabitants):  1.776 billion  (126.9 ) 
Mobile phone subscribers  (% total telephone subscribers): 1.594 bill ion (89.8) 
Internet users  (per 100 inhabitants): 989 million as at end -March 2020 (70.4)  
Broadband Internet subscribers : 484 million  
Main actors  
Number of companies providing value -added telecoms services : about 85,000 nationwide by end -June 2020.  
Names and market shares of the leading companies for fixed telecoms services (2020 ): China Telecom 
(61.9%), China Unicom (26.0%), and China Mobile (12.1%).  
Name and market shares of the leading companies for mobil e telephones services ( 2020): China Mobile 
(58.8%), China Telecom (22.0%), and China Unicom (19.2%).  
Name and market share of the broadband Internet services ( 2020): China Telecom (38.7%), China Mobile 
(43.5%), and China Unicom (17.8%).  
Foreign ownership participation in telecom companies (2019 ): In the basic telecoms sector, the proportions of 
overseas public shares of China Telecom, China Mobile, and China Unicom were 17.15%, 27.28%, and 20.1%, 
respectively.  
By end -2020, a total of 395 foreign -invested enterprises had entered China's telecoms market, mainly engaged 
in information services and e -commerce -related businesses.  
State ownership (2019 ): In the field of basic telecoms services, the proportions of state -owned shares of 
China Telecom, Chi na Mobile, China Unicom, and China Broadcasting Network were 82.85%, 72.72%, 
52.10%, and 100.00%, respectively.  
Source:  Information provided by the authorities.  
Table 4.22 Telecoms prices as a percentage of G NI per capita, 2019  
 China  Asia and Pacific  World  
Mobile voice prices (% GNI per capita)  0.4 2.5 4.3 
Mobile data prices (% GNI per capita)  1.0 2.7 4.3 
Fixed -broadband prices (% GNI per capita)  0.6  6.4 10.3 
Source:  ICT, Price Trends 2019 . Viewed at: https://www.itu.int/en/mediacentre/Documents/Documents/ITU -
Measuring_Digital_Development_ICT_Price_Trends_2019.p df. 
4.201.   According to the ITU, under the universal service policy, which has remained unchanged 
since the previous Review, enterprises invested more than USD  6.2 billion between 2015 and 2017 
to build optical fibre in 130,000 administrative villages, covering 9 5% of the nation's administrative 
villages.113 The authorities did not confirm these figures.  
4.4.2.2   Regulatory framework  
4.202.   The regulatory regime for telecoms services in China has been described in detail in previous 
Reviews114 and has remained largely unchanged. The principal statute governing telecoms services 
remains the 2000 Telecoms Regulations (last amended in 2016). It is supplemented by a large body 
of implementing regulations covering a wide range of matters, including licensing, fee collection, 
interconnectivity, and foreign participation. For example, the Classified Catalogue of 
Telecommunications Services 2015 lists the classifications of basic telecoms service and value -added 
telecoms service. These classifications a ffect the licensing and administration of a particular telecoms 
service. Telecoms licences are granted for a limited scope of operation, i.e. the holder of a telecoms 
licence is only permitted to carry out the activities specified in the licence.  
4.203.   The MIIT is the main regulator of the telecommunications and information service market. 
It is in charge of t he licensing and administration of telecoms services and access tariffs and charges. 
 
113 ITU (2018), Measuring the Information Society Report 2018 , Vol. 2. Viewed at: 
https://www.itu.int/en/ITU -D/Statistics/Documents/publications/misr2018/MISR -2018-Vol-2-E.pdf. 
114 Notably in WTO documents WT/TPR/S/375/Rev.1, 13 July 2018, pa ras. 4.119 -4.142; 
WT/TPR/S/342/Rev.1, 12  October 2016, paras.  4.29-4.43; WT/TPR/S/300/Rev.1, 7  October 2014, 
paras.  4.37-4.47; WT/TPR/S/264/Rev.1, 20 July 2012, paras.  165-204; and WT/TPR/S/230/Rev.1, 5 July 
2010, paras.  83-98. WT/TPR/S/ 415 • China  
 
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  It is also responsible for formulating national telecoms regulations, s tandards, and policies. The 
telecoms administration bureaus of provinces, autonomous regions, and municipalities (the Local 
Communications Bureaus) under the MIIT are in charge of administrating telecoms services within 
their jurisdictions, as well as the initial review of applications to operate nationwide.  
4.204.   The regulations on foreign investment in telecommunications services in China are stipulated 
in, inter alia , the Special Administrative Measures on Access to Foreign Investment (National 
Negative List) and the Pilot Free Trade Zone Special Administrative Measures on Access to Foreign 
Investment (PFTZ Negative List). Telecommunications companies are subject to the provision of 
telecommunications services pursuant to the market opening commitments made at China's 
accession to the WTO. These specify that the foreign share ratio for value -added telecommunications 
services (except for e -commerce, domestic multi -party communications, storage -forwarding, and 
call centres) shall not exceed 50%; for basic telecomm unications, the controlling stake shall be held 
by the Chinese national. Within the PFTZs, there is no restriction on the foreign share ratio for 
investment in information services (application store only) and Internet access service. For 
investment in dom estic virtual private network (VPN) services, the foreign share ratio shall not 
exceed 50%.  
4.205.   Pursuant to the Mainland China and Hong Kong, China/Macao, China Closer Economic 
Partnership Arrangement, Internet data centre (IDC) services are open to service pr oviders from 
Hong Kong,  China and Macao, China, and the share ratio of Hong Kong, China or Macao, China 
service providers shall not exceed 50%.  
4.206.   Since 2018, notable developments in the telecommunications sector have included the 
launch by China of its first  5G licences, a new law on e -commerce, regulations on cybersecurity, the 
launch of a number portability programme, measures to promote facility sharing, and a series of 
measures to further modernize the telecoms sector.  
4.4.2.2.1   Developments in 5G  
4.207.   On 6 June 2019, t he MIIT issued the Basic Telecommunication Business Operation License 
to three state -owned carriers (China Telecom, China Mobile, and China Unicom) and a state -owned 
broadcasting company (China Broadcasting Network) to approve their operation of "fifth gen eration 
digital cellular mobile communication services". As a consequence, the MIIT revised the 
Telecommunication Services Classification Catalogue (2015) to accommodate the new item. The 
2019 revised Catalogue adds "A12 -4 Fifth generation digital cellular  mobile communication services" 
to "A12 Cellular mobile communication services" under Category A "Basic telecommunication 
services". The new item refers to voice, data, multimedia, and other services provided through 
fifth-generation (5G) digital cellular mobile communication networks. According to the authorities, 
by end -June 2020, more than 400,000 5G base stations had been built.  
4.208.   In March 2020, the MIIT issued the Notice on Promoting the Accelerated Development of  5G. 
It provides guidance for the industr y to fully promote 5G network construction, application 
popularization, technological development, and security assurance.  
4.209.   In November 2019, the MIIT issued the Plan for Advancing the 512 Program on 5G Plus 
Industrial Internet, a policy document to facilit ate the integrated development of 5G and industrial 
Internet.  It aims to promote the use of 5G technologies to upgrade five public service platforms 
by 2022.  
4.4.2.2.2   Facility sharing  
4.210.   On facility sharing, the MIIT  continues to require basic telecommunications enterprises to 
carry out infrastructure construction in accordance with the requirements of sharing basic 
telecommunications facilities or co -construction. In addition, Internet access service providers in 
China can provide Internet access services to users by leasing the network resources from basic 
telecommunications companies and wired access facilities service providers. In June 2020, China 
issued the Implementation Opinions on Supporting the Accelerated De velopment of 5G Networks 
Through the Co -construction and Sharing of Telecommunication Infrastructure. According to the 
authorities, as at end -June 2020, the sharing rate of newly built towers in China stood at 90%, which WT/TPR/S/ 415 • China  
 
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  is equivalent to sharing the constr uction of 780,000 towers and saving a total of CNY  140 billion. As 
at end -2020, China's telecom operators had opened more than 330,000 shared 5G base stations.  
4.4.2.2.3   Number portability  
4.211.   In November 2019, in order to further improve the service quality of the tele communications 
industry, China officially rolled out a mobile number portability programme, which allows mobile 
users to keep their phone numbers when switching to a new mobile provider. According to the 
authorities, as at end -2020, 19.18 million subscribe rs had taken advantage of number portability, 
accounting for 1.48% of the total number of mobile subscribers. As a first step in this programme, 
the MIIT had carried out a number portability trial in Tianjin and Hainan Provinces in November 2010 
and expand ed it to five provinces in 2017. As at end -June 2017, number portability had been 
employed by more than 790,000 subscribers in five  provinces.115 
4.4.2.2.4   Spectrum management  
4.212.   There were also new developments in the framework of spectrum management. In 2019, 
the MIIT  promulgated provisions on the management of the use of the frequencies of enhanced 
Machine -Type Communication (eMTC) systems, specifying the usage frequency of eMTC systems, 
the management requirements of base station terminals, and other content. The Min istry also issued 
Announcement No.  52, 2019, which defines the catalogue, radio frequency specifications,  and 
management requirements of micro -power short -range radio transmitting equipment, with a view 
to further standardizing the management of such equip ment.  
4.4.2.2.5   Cloud computing  
4.213.   The authorities state that since the previous Review, no substantial progress has been  made 
with regard to cloud -enabled services regulations. The Notice on Standardizing Cloud Service Market 
and Facilitating the Sound Development of the Industry, which was adopted in 2017, has not yet 
been implemented. However, the authorities note that the Notice sets a clear path and institutional 
guarantees for foreign investors to participate in China's market for cloud -enabled services. While 
cloud services are not open to foreign investment116, the authorities allow the joint provision of cloud 
services through contractual partnerships between Chinese and foreign enterprises, where the 
Chinese enterprise applies for a cloud services licence to con duct a partnership with a 
foreign -invested enterprise.  
4.4.2.2.6   Cybersecurity  
4.214.   The Cybersecurity Law, which entered into force on 1  June 2017, remains in force; it aims 
"to ensure network security, to safeguard cyberspace sovereignty, national security and the socie tal 
public interest, to protect the lawful rights and interests of citizens, legal persons and other 
organizations, and to promote the healthy development of economic and social informatization". 
Article  37 of the Law requires "critical information infrast ructure" operators (CIIOs) to store within 
the mainland of China all personal information and "important data" gathered or produced within 
the mainland of China .117 The Law further stipulates conditions regarding  a security assessment of 
locally stored data . During the review period, in order to implement the Law, several regulations, 
administrative measures, and technical specifications were adopted or published for public comment. 
According to the authorities, regulations concerning CIIOs are be ing drafted. On 28  May 2019, the 
Cyberspace Administration of China (CAC) released, for public comment, draft measures to clarify 
the definition of "important data". In addition, the Draft Measures on Security Assessment of Cross -
Border Transfer of Persona l Information were released on 13  June 2019. With respect to cross -
border transfer of scientific data, on 17  March  2018, the Measures for the Administration of Scientific 
 
115 WTO document WT/TPR/S/375/Rev.1, 13 July 2018.  
116 In China's Classification Catalogue of Telecommunications Services (2015 Version), cloud services 
are a form of Internet data centre (IDC) services for which China did not make a commitment when it acceded 
to the WTO.  
117 Article  31 states that operators in the following sectors are liable to be designated as CIIOs: public 
communication and information services, power, traffic, water resources, finance, public service, e -government 
and other critical informati on infrastructure that if destroyed, suffer a loss of function, or experience a data 
leak might seriously endanger national security, national welfare, the people's livelihood, or the public interest.  WT/TPR/S/ 415 • China  
 
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  Data took effect. The Measures include basic rules for managing scientific data in Ch ina and would, 
inter alia , regulate cross -border transfers of this type of data.  
4.215.   Regarding network security, Article  21 of the Cybersecurity Law stipulates that China shall 
implement a tiered system of network security protection, in which network operator s are required 
to comply with a Multi -Level Protection Scheme (MLPS). Network operators shall, according to the 
requirements of the tiered system, fulfil security protection obligations. The tiered system is a basic 
system in the field of network security determined by law. Network operators shall, in accordance 
with the significance of their networks in such factors as national security, economic construction 
and social life, and the severity of the harm to national security, social order, public interest,  and 
the legitimate rights and interests of citizens, legal persons, and other organizations, determine the 
level of security protection according to the degree of harm to the factors. There are five levels of 
network security protection, escalating from L evel 1 to Level 5. A network at Level 2 or above shall 
be filed with a public security authority at or above the prefectural level. In order to implement the 
tiered system, China issued a series of technical standards, and improved the standard system with  
technological innovation and development. In line with the MLPS's implementation, the SAMR issued 
a series of national standards on 13  May 2019, to provide detailed technical requirements for 
enhancing the MLPS.118 These new national standards, together wi th the Regulation on the 
Cybersecurity Multi -level Protection Scheme (which came into force on 1  December 2020), 
constitute a substantial base for what is referred to as MLPS  2.0, as they impose heightened 
regulatory requirements compared with MLPS 1.0. Pu blic security organs have strengthened their 
supervision, inspection, and guidance on the implementation of the tiered system to ensure the 
security of network operation. Any network operator who fails to perform the security protection 
obligations as pres cribed by Article  21 shall be punished in accordance with Article  59 of the 
Cybersecurity Law.  
4.216.   The Regulation on Internet Security Supervision and Inspection by Public Security Organs 
(promulgated on 15  September  2018 and came into effect on 1  November  2018) is another 
regulation along the lines of Internet protection in China.119 It regulates the authorities of Public 
Security Bureaus (PBSs) in inspecting Internet service providers, including Internet information 
providers, Internet cafes, and data centres.  Under the Regulation, PBSs must comply with legal 
authorities and procedural requirements when entering business sites, reviewing and copying 
relevant information, and checking technical measures in place to safeguard network and 
information security.  
4.217.   The Encryption Law was also enacted on 26  October  2019 and came into effect on 
1 January  2020.120 It encourages enterprises to voluntarily apply to qualified testing and certification 
agencies for the testing and certification of their commercial encryption pr oducts. However, testing 
and certification might be mandatory for certain commercial encryption products and services that 
may affect "national security, national welfare and people's livelihood, and society's interest" and 
shall be included in the Catalog ue of Critical Network Equipment and Network Security -specific 
Products.121 
4.218.   In China's ongoing efforts to regulate its cyber domain, on 17  January  2017, the MIIT issued 
the Circular on Cleaning up and Regulating the Internet Access Service Market, which is legislation 
that prohibited the use of VPNs as at 31 March 2018.  However, it would appear that companies in 
China can still apply to the Government to offer VPNs for commercial purposes.  
4.219.   There were also new developments regarding the protection of personal  information. On 
6 March  2020, the SAMR and the Standardization Administration of China (SAC) jointly published 
the Information Security Technology – Personal Information (PI) Security Specification 
(GB/T  35273 -2020) to replace the 2017 version (GB/T 35273 -2017). The Specification took effect 
on 1 October  2020. The Specification is a national standard (not mandatory, in principle), as well as 
 
118 These standards include: Information Security Technol ogy – Baseline for Classified Protection of 
Cybersecurity (GB/T  22239 -2019); Information Security Technology – Technical Requirements of Security 
Design for Classified Protection of Cybersecurity (GB/T 25070 -2019); and Information Security Technology – 
Evaluation Requirements for Classified Protection of Cybersecurity (GB/T 28448 -2019).  
119 State Council. Viewed at: http://www.gov.cn/gongbao/content/2018/content_5343745.htm . 
120 NPC. Vie wed at: 
http://www.npc.gov.cn/npc/c30834/201910/6f7be7dd5ae5459a8de8baf36296bc74.shtml . 
121 CAC, Critical Network Equipment and Special Network Security Product Ca talog (First Batch) . Viewed 
at: http://www.cac.gov.cn/2017 -06/09/c_1121113591.htm . WT/TPR/S/ 415 • China  
 
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  a recommended guideline that reinforces the Cybersecurity Law.122 The authorities rely on it as a 
benchmark to determ ine whether business operators follow the country's data protection rules. The 
2020 Specification seeks to ensure that individuals or entities that provide their PI (subjects) have 
a certain degree of autonomy. It also regulates the behaviour of those who collect PI for providing 
a product or service (controllers). On some issues, such as the collection of biometric data or when 
sharing and transferring PI, the Specification states that controllers must obtain explicit consent, 
i.e. an authorized statement on either paper or an electronic format affirming the collector has the 
right to process the PI of the subject. Collectors are also required to inform subjects on their intended 
purposes, method of collection, scope, and storage time. Regarding cross -borde r transfer, Article  9.8 
of the Specification states that PI collected and generated in China can be transferred overseas, but 
the controller must comply with all relevant national regulations and standards. On the specific 
legislation concerning PI protect ion, on 21  October  2020, China published for public comment the 
first draft of the Personal Information Protection Law123, the country's first comprehensive law 
regulating , inter alia , the processing of PI.124 
4.220.   China also implemented the provision of the Cybe rsecurity Law concerning national security 
review requirements for CIIOs purchasing certain network products and services. This was made 
through the Measures on Cybersecurity Review, and was jointly adopted on 27  April 2020 (effective 
1 June 2020) by the C AC and 11 other government agencies.125 The Measures seek to implement 
Article  35 of the Cybersecurity Law, which established a cybersecurity review requirement on 
network products and services procured by CIIOs.  Purchases of network products or services wi th a 
potential effect on national security are subject to the cybersecurity review system outlined under 
the Measures. Such network product and services include core network devices, high -performance 
computers and servers, mass storage devices, large datab ases and application software, network 
security devices, cloud computing services, and other network products and services that have a 
significant impact on the security of the critical information infrastructure.  
4.221.   The Measures establish an interagency cybersecurity review body, which consists of 
members from 12 government agencies – the C AC, the NDRC, the MIIT , the Ministry of Public 
Security, the Ministry of National Security, MOFCOM, the Ministry of Finance, the PBOC, the SAMR, 
the National Radio and Television Administration, the National Administration of State Secrets 
Protection, and the State Cryptography  Administration  – and is led by the CAC.  The Office of 
Cybersecurity Review is established in the CAC . 
4.222.   Under the Measures, CIIOs shall conduct an assessment of potential national security risk 
exposure prior to the procurement of network products or servic es. If the self -assessment identifies 
a national security risk, the CIIO shall report the case to the Office of Cybersecurity Review  for a 
cybersecurity review. However, if a member of the interagency cybersecurity review body  believes 
the network products  or services used by the CIIO affect or may affect national security, the Office 
of Cybersecurity Review shall report the case to the CAC and initiate a cybersecurity review without 
an application from a CIIO . 
4.4.2.2.7   E-commerce  
4.223.   On 31  August  2018, the Standing Com mittee of the NPC passed the E -commerce Law, which 
came into force on 1  January  2019. The Law applies to all business activities of selling goods and/or 
providing services through information networks such as the Internet, with the exception of financial 
products and services or services that provide news, audio, and video programmes; publications; or 
cultural products. It contains provisions on, inter alia : (i) the definitions of e -commerce operators, 
e-contracts, and e -payments; (ii)  guarantees for e -comm erce transactions; (iii)  data protection and 
promotion of consumer protection; (iv)  fair competition and mechanisms for dispute resolution; 
(v) cross-border commerce; and ( vi) the provision of substantial civil and criminal penalties.  
 
122 Dai, K. and Deng, J. (2019), "A 15 -Step Guide to Data Protection, Privacy and Cybersecurity in 
China", Swiss Chinese Law Review Journal , Issue 2. Viewed at: https://www.sclalawreview.org/a -15-step-
guide -to-data-protection -privacy -and-cybersecur ity-in-china/ . 
123 China Law Insight, Personal Information Protection Law (Draft): A New Data Regime , 11 November 
2020. Viewed at: https://www.chinalawinsight.com/2020/11/articles/compliance /personal -information -
protection -law-draft-a-new-data-regime/ . 
124 NPC. Viewed at: http://www.npc.gov.cn/flcaw/more.html . 
125 CAC. Vi ewed at: http://www.cac.gov.cn/2020 -04/27/c_1589535450769077.htm . WT/TPR/S/ 415 • China  
 
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  4.224.   According to Article  2 of the E -commerce Law, e -commerce refers to business activities that 
sell goods or provide services via information networks like the Internet. Article  9 further defines 
e-commerce operators to be natural persons, legal persons, and unincorporated organi zations that 
engage in the business activities of selling merchandise or providing services on the Internet or other 
information networks. As such, the E -commerce Law mainly applies to the following three types of 
operator s: (i) platform operators, i.e. an y legal persons or unincorporated organizations that provide 
a space for digital business, transaction matching, information release, and other services to 
facilitate parties in an e -commerce transaction; (ii)  operators on platforms, i.e. third -party 
merch ants that sell goods or provide services on e -commerce platforms; and (iii)  online sellers, 
i.e. other e -commerce players doing business through their own websites or through other online 
channels, such as social media applications.  
4.225.   By law, all e -commerce operators, except individuals who sell their own agricultural products 
or handcrafts or who carry out sporadic and small transactions, are required to obtain a business 
licence. E -commerce operators must fulfil their taxation obligations and could enjoy pr eferential tax 
treatments according to relevant laws and regulations.  
4.226.   Regarding intellectual property (IP) protection, the E -commerce Law holds liable both 
counterfeiters and e -commerce operators that fail to take appropriate measures to prevent sellers 
in violation of intellectual property rights (IPRs). It also provides that IP holders can notify a platform 
owner of an alleged infringement, and the platform owner has the obligation to prevent the trade of 
the infringed good pending investigation. Platform  operators that fail to fulfil their responsibilities in 
terms of IP protection within a specified time period are punishable by a fine ranging from 
CNY 50,000 to CNY  2 million.  
4.227.   Article  17 of the E -commerce Law further fosters consumer protection by requir ing 
e-commerce operators to disclose truthful, accurate, and timely information concerning commodities 
or services and to avoid engaging in misleading and deceptive practices.  
4.228.   Article  22 of the E -commerce Law spells out fair competition obligations for all  e-commerce 
operators, with special emphasis on those with dominant market positions. Operators with 
advantages in the market due to technology or number of users are prohibited from abusing their 
position to exclude or restrict competition.  
4.229.   On consumers' privacy protection, pursuant to Articles 23 and 24 of the Law, e -commerce 
operators must abide by existing Chinese laws and regulations in respect of protection of personal 
data when collecting and using users' personal data. The Law further requires e -commerce operators 
to expressly specify to users the procedures for inquiring about, correcting, and deregistering their 
accounts. Operators are required to deal with personal data in a timely manner if users request to 
see, correct, or delete their data. Fur ther efforts are also ongoing in connection with personal data 
protection, as China unveiled its draft of the Personal Data Protection Law for public consultation on 
21 October  2020. Once adopted, the Law will, inter alia, clarify state agencies' role in p rotecting 
individuals' data and implement consent -based rules for processing information.  
4.230.   Regarding foreign business, the E -commerce Law provides that China shall encourage 
cross-border e -commerce (CBEC) development. In practice, the authorities have been promoting 
CBEC (activities of purchasing or selling products via online shopping across national borders). On 
27 April 2020, the State Council issued the Approval of the Establishment of Integrated Pilot Areas 
for Cross -border E -commerce in 46 Cities and Areas  (Guo Han No. 47, 2020). This brought the total 
number of CBEC pilot zones to 105. In December 2019, the authorities extended the List of Goods 
under Cross -border E -commerce Retail Importation to allow more foreign goods to be delivered to 
Chinese consumers through the CBEC retail importation programme.126 
4.231.   Oversees enterprises involved as vendors in CBEC must be registered with the General 
Administration of Customs (GACC ). In practice, they must entrust a Chinese company as "domestic 
agent" to handle the registration procedures. The domestic agent must be a legal entity registered 
with the SAMR.127 They must also designate a Chinese agent, which will be held directly accou ntable 
by the authorities for consumer complaints, product recall, and other product quality or safety 
 
126 MOFCO. Viewed at: http://cws.mofcom.gov.cn/article/swcjzc/202001/20200102929369.shtml . 
127 Announcement on Matters Concerning the Supervision of Retail Imports and Exports in Cross -Border 
E-comm erce (GACC Announcement No.  194, 2018).  WT/TPR/S/ 415 • China  
 
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  obligations. Domestic enterprises shall undergo registration formalities with Customs in their 
location, in accordance with the provisions on the adminis tration of the registration of customs 
declaration entities.128 
4.232.   CBEC pilot areas have promoted the development of innovative systems such as import 
e-commerce platforms, export e -commerce platforms, third -party payment platforms, and logistics 
companies.  
4.233.   The E-commerce Law provides that e -commerce disputes can be settled by: (i)  negotiating; 
(ii) requesting mediation by consumer organizations, industry associations, or other legally 
established mediating organizations; (iii)  filing complaints with relevant a uthorities; (iv)  filing for 
arbitration; or (v)  instituting legal proceedings. Additional measures to bolster e -commerce include 
the establishment of Internet courts. Internet courts in Beijing and Guangzhou were formally 
established in September 2018, fol lowing the opening of China's first Internet court in Hangzhou 
in 2017 (Section 2.1). Internet courts were established to hear matters relating to e -commerce and 
online transactions. In general, the entire litigation process is conducted online. Internet c ourts may 
decide to complete part of the litigation process offline, upon application by the litigants or due to 
the needs of trying cases. In September 2018, the Supreme People's Court also issued the Provisions 
on Several Issues Concerning the Trial of C ases by Internet Courts, to regulate the litigation activities 
of Internet courts.  
4.4.3   Transport  
4.234.   The share of transport, storage, and communication in GDP decreased from 4.4% in 2018 
to 4.1% in 2020 (Table 1.2). Transportation is one of China's major traded se rvices; during the 
review period, China maintained a slight deficit in transportation services trade. In 2018, there were 
1.8 million people employed in the railway transportation sector, 3.6 million in road transport, 
0.4 million in water transport, 0.6 m illion in air transport, and 0.03 million in pipeline transport. 
Around 0.3 million people were employed in the associated industries of intermodal transport and 
forwarding agencies, and 0.4 million people in loading, unloading, and storage.129 
4.235.   In value ter ms, shipping is the main mode of transport for imports and exports of 
merchandise goods (Table 4.23). Data were not available on the volume of merchandise trade 
transported through the different modes.  
Table 4.23 Value of merchandise goods imported to and exported from China through 
different transport modes, 2018 -20 
(USD million)  
 2018  2019  2020  
Maritime transport     
 - Imports  1,191,383.7  1,172,461.0  1,033,210.4  
 - Exports  1,655,367.9  1,660,002.5  1,502,594.3  
Air transport     
 - Imports  502,385.0  488,220.0  450,972.1  
 - Exports  402,449.4  405,995.6  410,163.5  
Railway transport     
 - Imports  20,284.2  20,284.7  22,989.2  
 - Exports  29,618.1  34,887.5  49,049.1  
Road transport     
 - Imports  364,768.3  338,584.4  314,322.7  
 - Exports  376,464.6  366,397.6  327,853.0  
Source:  Information provided by the authorities.  
4.236.   The Ministry of Transport (MOT) remains responsible for road, water, and air transport, as 
well as administration of rail transport.  
 
128 Announcement on Launching the Pilot Program of Supervision over Business -to-Business Export in 
Cross -Border E -commerce (GACC Announcement No.  75, 2020).  
129 National Bureau of Statistics, China Statistical Yearbook 2 019. Viewed at: 
http://www.stats.gov.cn/tjsj/ndsj/2019/indexeh.htm . WT/TPR/S/ 415 • China  
 
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  4.4.3.1   Maritime transport  
4.237.   China is the world's third ship owning country in terms of cargo -carrying capacity, accounting 
for 6,896 ships in 2020 with a total dead weight tonne (DWT) capacity of 128,892,849. More than 
4,500 of the se ships operated under the national flag (43.56% of total in DWT terms), while 
2,300  Chinese -owned ships operated under a foreign flag (56.44% of total in DWT terms).130 In 
order to encourage qualified Chinese -funded international "Flag of Convenience" shi ps to return to 
China, ships that were declared for import and were registered between September 2016 and 
September 2019 were exempt from customs duties and import VAT.131 A total of 80  vessels were 
approved for duty -free import, of which 39 vessels went th rough registration procedures in China.  
4.238.   China's main shipping law is the Maritime Law, which became effective in 1993.132 There 
were no amendments to the Law during the review period. China's commitments related to maritime 
transport under the General Agreement on Trade in Services (GATS) are described in detail in a 
previous Review.133 
4.239.   China's major state -owned shipping comp anies include China COSCO Shipping Corporation 
Limited (COSCO Shipping) and China Merchants Group. COSCO Shipping is the world's biggest 
shipping company, with a fleet of 1,371 vessels with a combined capacity of 109.33 million DWT. 
Reportedly, it has the world's biggest container fleet, as well as dry bulk vessels, tankers, and 
general and specialized cargo vessels.134 The shipping activities of the conglomerate China 
Merchants Group are undertaken through its subsidiaries China Merchants Energy Shipping Co . Ltd. 
(which specializes in energy and bulk cargo transportation), Xunlong Shipping, and 
Hong Kong,  China Ming Wah Shipping Co. Ltd. Reportedly, China Merchants Group is the world's 
fourth -largest energy transportation enterprise.  
4.240.   There have been no chang es to China's maritime cabotage policies during the review period; 
domestic water transport companies are required to have Chinese parties as the controlling 
shareholders (Table A2. 3). The Maritime Law stipulates that maritime transport and towage services  
between ports in China must be undertaken by ships flying the Chinese flag, except as otherwise 
provided for by laws or administrative regulations. The Regulations on the Administration of 
Domestic Water Transport stipulate that operators of water transpo rt may not operate domestic 
water transport business with foreign ships. However, with the permission of the competent 
department of transport under the State Council, operators of water transport may temporarily 
operate a transport business with foreign s hips subject to time and voyage limitations. Between 
January 2018 and February 2020, eight foreign ships were so authorized.  
4.241.   In 2019, the State Council issued the Decision on Revising Certain Administrative Rules and 
Regulations (State Council Decree No.  709), and revised the Regulations on International Maritime 
Transportation, which lifted the restrictions on foreign investment in international shipping and 
international shipping agency services in China.135 Previously, international maritime companies 
were limited to Chinese -foreign equity/cooperative joint venture operations.136 The authorities 
confirm that there are no requirements for government cargo to be transported on domestically 
flagged ships.  
 
130 UNCTAD (2020), Review of Maritime Transport 2020 . Viewed at: 
https://unctad.org/system/files/official -document/rmt2020_en.pdf . 
131 Notice of the State Taxation Administration of the Ministry of Finance and the General Administration 
of Customs on the List of the Fourth Batch of Chinese -funded "F lags of Convenience" Vessels Enjoying Import 
Tax Preferential Policies. Viewed at: 
http://www.chinatax.gov.cn/chinatax/n810341/n810825/c101434/c29917165/cont ent.html . 
132 Maritime Law of the People's Republic of China. Viewed at: 
http://www.lawinfochina.com/display.aspx?lib=law&id=191 . 
133 WTO document WT/TPR/S/264/Rev.1, 20 July 2012.  
134 COSCO  Shipping, Group Profile . Viewed at: http://en.coscoshipping.com/col/col6918/index.html . 
135 Regulations on International Maritime Transportation, as revised in 2019. Viewed at: 
http://www.gov.cn/zhengce/content/2019 -03/18/content_5374723.htm . 
136 Catalogue of Industries for the Guidance of Foreign Investment (2017 Revision), referenced in WTO 
document WT/TPR/S/375/ Rev.1, 14  September  2018.  WT/TPR/S/ 415 • China  
 
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  4.242.   In 2018, the Ship Tonnage Tax Law was enacted, at the same time the Provisional 
Regulations of the Ship Tonnage Tax were repealed.137 Ships entering domestic ports from ports 
outside China are subject to a ship tonnage tax. The Law sets preferential rates for Chinese taxable 
ships and taxable ships whose country of registry has signed treaties or agreements that mutually 
grant MFN tre atment clauses of ship taxes and fees. For other taxable ships, the ordinary tax rate 
applies. The tax is levied in accordance with the net tonnage of the ship and the duration of the 
tonnage tax licence. The tonnage tax payable is calculated by multiplyin g the net tonnage of the 
ship by the applicable tax rate (Table 4.24). Various exemptions apply, including fishing and breeding 
fishing boats. The passage of the Law does not change the tax framework and burden, but it does 
raise the status of the previous  administrative regulation to NPC law (as required by the 
2015 amendment to the Law on Legislation).138 
Table 4.24 Ship tonnage tax rates, 2020  
 Ordinary tax rate according to 
licence period  Preferential tax ra te according 
to licence period  
1-year 
licence  90-day 
licence  30-day 
licence  1-year 
licence  90-day 
licence  30-day 
licence  
No more than 2,000 net tonnes  12.6 4.2 2.1 9.0 3.0 1.5 
2,000 -10,000 net tonnes  24.0 8.0 4.0 17.4 5.8 2.9 
10,000 -50,000 net tonnes  27.6 9.2 4.6 19.8 6.6 3.3 
Over 50,000 net tonnes  31.8 10.6 5.3 22.8 7.6 3.8 
Source:  FAO, Vessel Tonnage Tax Law of the People's Republic of China . Viewed at:  
http://www.fao.org/faolex/results/details/en/c/LEX -FAOC172978/ . 
4.243.   According to the authorities, during the COVID ‑19 pandemic, the MOT established an 
International Logistics Guarante e Coordination Mechanism, and set up international logistics work 
shifts for 24 -hour entity operations and offered various guarantee measures for maritime 
transportation enterprises, including temporarily exempting port construction charges of imported 
or exported goods (Section 3.1.4), reducing cargo dues and port facility security charges, extending 
vessel certificates, offering online seaman training and licence renewal, formulating pandemic 
prevention guides, and assisting shipping companies in changes of shifts by seamen.  
4.244.   By end -2019, China had 408 ports. According to United Nations Conference on Trade and 
Development (UNCTAD), in 2019, four of China's ports were in the top five global container ports 
(in order of throughput: Shanghai, Ningbo -Zhoushan, Shenzhen, and Guangzhou).139 The authorities 
state that no state -owned ports are operated by third parties (including foreign companies) under 
concession agreements. There are no restrictions on the share ratios of FDI in investment in Chinese 
ports. Inform ation was not available as to whether there is any foreign investment in Chinese ports 
in practice. Various SOEs provide port services.  
4.245.   The Port Law is the main law governing the construction and operation of ports. In 2018, 
China revised the Law to allow port tally businesses to operate without having to obtain a permit.140 
4.246.   According to the Catalogue of Central Determined Prices and the Regulation on Port Charges, 
port operating service charges are divided into market -regulated price, government -guided pric e, 
and government pricing. Among them, the government -guided and government -priced port charges 
 
137 FAO, Vessel Tonnage Tax Law of the People's Republic of China . Viewed at: 
http://www.fao.org/faolex/results/details/en/c/LEX -FAOC172978/ . 
138 Library of Congress, China: Tobacco Leaf Tax and Vessel Tonnage Tax Laws Passed , 19 January 
2018. Viewed at: https://www.loc.gov/law/for eign-news/article/china -tobacco -leaf-tax-and-vessel -tonnage -
tax-laws-passed . 
139 UNCTAD (2020), Review of Maritime Transport 2020 . Viewed at: 
https://unctad.org/system/files/off icial-document/rmt2020_en.pdf . 
140 FAO, Law of the People's Republic of China on Ports  (Port Law). Viewed at: https://www.ecolex.org/ 
details/ legislation/law -of-the-peoples -republic -of-china -on-ports-2015-lex-faoc155111/?q=china&type=legis 
lation&xdate_min=&xdate_max= . The Port Law was amended in 2018 in accordance with the Decision of the 
Standing Committee of the National People's Congress to Amend Four Laws Including the Electric Powe r Law 
(Order No.  23 of the President). Viewed at: http://www.npc.gov.cn/zgrdw/npc/xinwen/2019 -01/07/content 
2070259.htm . Port tally business is the provision of service s, such as tallying and the checking of the apparent 
condition of cargo for the consignor, in the cargo handover process.  WT/TPR/S/ 415 • China  
 
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  are decided by the MOT and the NDRC. Market -set port charges, such as port handling lump sum 
charges, may be set by port operators themselves.  
4.247.   With respect to c ompletion of major port infrastructural works in recent years, the authorities 
indicate that in December 2017 Phase IV of the Automated Container Terminal of Yangshan Port in 
Shanghai was completed and put into operation; reportedly, this terminal is the w orld's largest single 
fully automated terminal. In 2019, Phase II of the Yangtze River Nanjing Section Deepwater Channel 
Project was officially put into use. As notified to the WTO, China offers preferential tax policies for 
Chinese -foreign equity joint ve ntures engaged in port and dock construction, as well as for public 
infrastructure projects that are particularly supported by the  State.141 
4.4.3.2   Air transport  
4.248.   The Civil Aviation Administration of China (CAAC) remains the main regulator of the air 
transport indu stry. The strategy for the sector is contained in the 13th Five-Year Plan for the 
Development of China's Civil Aviation.142 Additionally, the Program of Building National Strength in 
Civil Aviation in the New Era was issued on 10  December  2018; it outlines strategic plans, 8  major 
tasks, and 33 key measures for the future development of civil aviation.143 In December  2018, minor 
amendments were made to the Civil Aviation Law.144 During the review period, regulations on foreign 
civil aircraft flight management,  civil airport management, and civil aircraft nationality registration 
were slightly revised.  
4.249.   Air connectivity has continued to increase; the number of international routes grew from 
739 in 2016 to 953 in 2019, and the number of domestic routes increased f rom 3,055 to 4,568 over 
the same period.145 
4.250.   As at end -2020, 67 airlines were established in China; 50 were state owned, 9 have foreign 
equity participation, and 8 are listed as stock companies. The CAAC has approved 14 private or 
private -holding airlines. Information was not available as to whether it is required for persons or 
goods to be transported on nationally registered airlines. Restrictions on foreign investment in civil 
aviation remain unchanged.  
4.251.   International scheduled passenger and freight transportation are regulated by bilateral air 
services agreements. Since January 2018, China has signed new air service agreements with Congo 
(January 2018), Côte  d'Ivoire (June 2018), Rwanda (July 2018), Dominica (November 2018), the 
European  Union (May 2019), the Bahamas (September 2019), and Member Sta tes of the Association 
of South East Asian Nations (ASEAN) (Protocol III, November 2019). Cabotage remains reserved to 
domestic airlines.146 The passenger fares of the domestic civil air routes are subject to prices guided 
by the Government (except for comp etitive areas). Airlines are permitted to raise the fare by no 
more than 25% of a benchmark fare. The rationale for maintaining price control is that competition 
has not yet developed in some areas of the passenger transportation industry in domestic civil  air 
routes.  
4.252.   As a consequence of the COVID ‑19 outbreak, international passenger flights from China 
dropped dramatically from February 2020, as compared with February  2019, and have remained at 
a low level (Chart 4.9). The domestic passenger transport segme nt also declined significantly in 
February 2020, as compared with February  2019, but recovered by end -2020 (Chart 4.10).  
 
141 WTO document G/SCM/N/343/CHN, 19  July 2019.  
142 CAAC, 13th Five-Year Plan for the Development of China's Civil Aviation . Viewed at: 
http://www.caac.gov.cn/XXGK/XXGK/FZGH/201704/t20170405_43502.html . 
143 CAAC, Program of Building National Strength in Civil Aviation in the New Era . Viewed at: 
http://www.caac.gov.cn/XXGK/XXGK/ZCFB/201812/t20181212_193452.html . 
144 CAAC, Civil Aviation Law  (as revised in 2018). Viewed at: 
http://www.caac.gov.cn/XXGK/XXGK/FLFG/201510/t20151029_2777.html . The amendments were as follows: 
civil airports other than those open to the public shall be put on record; the "quarantine" in Article  103 was 
deleted; and the drone authorization clause was included in the Law.  
145 National Bureau of Statistics, China Statistical Yearbook 2019 . Viewed at: 
http://www. stats.gov.cn/tjsj/ndsj/2019/indexeh.htm ; and updated information provided by the authorities.  
146 WTO document WT/TPR/S/264/Rev.1, 20 July 2012.  WT/TPR/S/ 415 • China  
 
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  Chart 4.9 International passenger flights, January to December, 2019 and 2020  
 
Source:  ICAO, Operational Impact on Air Transport . Viewed at: https://data.icao.int/coVID -
19/operational.htm . 
Chart 4.10 Domestic passenger flights, January to December, 2019 and 2020  
 
Source:  ICAO, Operational Impact on Air Transport . Viewed at: https://data.icao.in t/coVID -
19/operational.htm . 
4.253.   In order to respond to the COVID ‑19 outbreak and mitigate its impact on the development 
of the aviation industry, the CAAC has taken the following measures: (i)  the Guidelines for 
Preventing Spread of Coronavirus Disease 2019 (C OVID‑19) Airlines and Airports were issued and 
updated seven  times; (ii)  the pandemic  prevention and control measures for civil aviation operations 
were adjusted and refined according to the needs of epidemic prevention and control; prevention 
measures on both human beings and goods were strengthened; and prevention and control 
requirements for cargo flights and cargo operations were enhanced; (iii)  management measures for 
international operation crews were formulated to ensure the smooth flow of internatio nal passengers 
and cargo; (iv)  supportive policies were introduced in early 2020 and have been implemented 
(Table  4.25); (v)  the management of cargo routes and flights was optimized; (vi) a "green channel" 
for the approval of international cargo flights wa s opened and is available 24 hours a day and 7  days 
a week, so as to support the resumption of airlines; this has reportedly greatly reduced approval 
times and simplified approval procedures; and (vii) airlines were supposed to use surplus passenger 
010,00020,00030,00040,00050,00060,000Chart 4.[CHN]  International passenger flights, January to December , 2019 and 2020
Source:  ICAO. Viewed at: https://data.icao.int/coVID -19/operational.htm2019
2020+10.8%
-57.7%
-82.9% -83.5%-85.0% -83.4%-81.1% -80.3%2020 over 2019:  
-73.5%
-85.2%-83.7%-85.7%-79.7%
050,000100,000150,000200,000250,000300,000350,000400,000Chart 4.[CHN]  Domestic passenger flights, January to December , 2019 and 2020
Source:  ICAO. Viewed at: https://data.icao.int/coVID -19/operational.htm2019
2020-3.1%
-72.2%+4.5%
-3.4%
-17.9%
-25.4%
-56.4%+2.6%
2020 over 2019:  
-22.9%-8.4%
-48.3%
-53.5%+2.3WT/TPR/S/ 415 • China  
 
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  plans to carry cargo and implement "passenger -to-cargo" flights under the premise of ensuring 
safety.  
Table 4.25 CAAC policies supporting active response to the COVID ‑19 outbreak  
Areas  Policies  
Proactive financial 
and economic 
policies  • Implement favourable policies, including exemption from payment by airlines into 
civil aviation development fund for landing. Ensure preferential measures for the 
civil aviation industry are effectively implemented.  
• Implem ent policies of financial support from the Central Government treasury during 
the COVID ‑19 outbreak to international scheduled passenger flights and major 
transport flight missions deployed by the Joint Prevention and Control Mechanism of 
the State Council.  
• Add incentive support for epidemic containment missions carried out by general 
aviation enterprises by fully leveraging on existing subsidy policies.  
Fee reductions and 
burden alleviation  • Airport authorities to exempt airlines from charges associated with the operation of 
air transport services and ground handling for major transport flight missions 
deployed by the Joint Prevention and Control Mechanism of the State Council. Air 
traffic control entities to exempt airlines from approa ch command charges and route 
navigation service charges.  
• Reduced charges for airports and air navigation services on domestic and foreign 
airlines and airlines from Hong Kong, China; Macao, China; and Chinese  Taipei 
regions. Reduced benchmark for landing  charges at Category I and II airports by 
10%; reduced benchmark of difference between purchase and sales of jet fuel for 
domestic flights of domestic airlines by 8% (effective from 23  January  2020).  
• Information service providers and subordinate public entities and companies of the 
CAAC are encouraged to reduce current charges as appropriate.  
Infrastructure 
investment 
expansion  • Airport authorities, relevant operation support entities, and civil aviati on medicine 
research institutions may apply for subsidies from civil aviation development fund 
for urgent procurements or R&D of dedicated fixed facilities and equipment for 
epidemic containment purposes.  
• Support for orderly start and resumption of major construction projects in a 
scientific manner. Online channels available for project applications to facilitate 
acceleration of pre -project formalities and coordinate solutions for priorities and 
difficult p roblems with project start and resumption. Major and emergency 
construction projects encouraged to use available trade centres to accelerate bidding 
process. Major infrastructure projects of hub airport building, poverty alleviation, 
and Blue Sky Protectio n Campaign to be started/resumed as a matter of priority. 
Aim is to complete an annual fixed asset investment of CNY  100 billion.  
• Implement current civil aviation development fund -related policies to better support 
airlines in improving safety capabilit ies. Expand investments in airlines' projects of 
safety, security, flight operation quality oversight, and application of satellite 
navigation and other new technologies. Support safety upgrade modifications of 
airlines' airborne equipment, and arrange ful l subsidy from civil aviation 
development fund for B737NG aircraft data frame expansion projects.  
• Support planning and construction of strategic infrastructure projects of air traffic 
control, IT, fuel supply, and others related to national, industrial, and public 
interests by increasing government funding.  
Air transport 
development 
facilitation  • Increase policy flexibility for introducing aircraft transport capacity. Encourage and 
guide airlines to optimize current capacity and streamline capacity introduction 
procedures.  
• Improve approval administration of routes and flights to enable airlines to make 
dynamic adjustments to flight plans, international route structure, and traffic rights 
entitlement and capacity in line with mar ket demands, by streamlining routes, flight 
approval procedures, and slot coordination procedures, and shorten time for 
approval on start or resumption of international route operation.  
• Extend flight schedule for the 2019 winter season until 2 May 2020, suspending 
evaluation of airlines regarding flight schedule execution rate, slot resource 
utilization rate, and flight regularity rate. Actively develop slot policies for flight 
rescheduling, taking into consideration needs of airlines to resume oper ation, 
exempting domestic flights from evaluation of slot execution rate for the 2020 
summer season, and allowing orderly circulation of slots in domestic, international, 
and regional slot pools in light of changes in market demands for the 2020 summer 
season. 
• Actively support and assist airlines with their special operation requirements during 
the COVID ‑19 outbreak and traffic right and slot issues encountered in resumption 
of international route operation, and maintain close communication and coordinati on 
with relevant national civil aviation authorities regarding these issues.  WT/TPR/S/ 415 • China  
 
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  Areas  Policies  
Administrative 
service 
optimization  • Adjust working methods of administrative approval by enabling online processing 
and off -site processing channels. Optimize approval procedures and introduce 
informing and committing mechanism to improve approval efficiency.  
• Transform regulation method, improve oversight performance, reduce on -site 
supervision, and make full use of new regulation modes, such as off -site 
supervision.  
Source:  CAAC International Cooperation and Service Centre, Notice of CAAC on Policies Supporting Active 
Response to COVID -19 Outbreak , 29 April 2020. Viewed at: 
http://ww w.icscc.org.cn/en/content/details_98_1939.html . 
4.254.   By end -2019, China had 238 certified transportation airports, of which 59 were international. 
The Special Administrative Measures for Access of Foreign Investment (National Negative List) 
(2020) stipulate tha t the construction and operation of civil airports must be relatively controlled by 
Chinese parties and that foreign parties are prohibited from participating in the construction and 
operation of airport towers (Table A2. 3); foreign parties may participate  in the construction and 
operation of airports in accordance with this provision. There have been no changes to the rules on 
computer reservation services, repair and maintenance services, and ground -handling services 
during the review period.147 China's GA TS commitments in air transport were described in a previous 
Review.148 
4.255.   The authorities indicate that major airport infrastructure projects undertaken during the 
review period include d the new project of Beijing Daxing International Airport and the Phase II I 
Expansion Project of Shanghai Pudong International Airport.  
 
 
147 China's rules on computer reservation systems are described in WTO document 
WT/TPR/S/300/Rev.1, 7 October 2014.  Its rules on repair and maintenance services and ground -handling 
services are described in WTO document WT/TPR/S/264/Rev.1, 20 July 2012.  
148 WTO document WT/TPR/S/264/Rev.1, 20 July 2012.  WT/TPR/S/ 415 • China  
 
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  5  APPENDIX TABLES  
Table A1. 1 Bilateral debt stocks to China – public and publicly guaranteed (PPG), 
2014 -19 
Country  2014  2015  2016  2017  2018  2019  
Angola  9,283.6  8,789.3  17,623.7  18,592.7  17,493.2  15,724.7  
Argentina  657.4  1,702.7  1,800.4  2,803.6  3,133.6  3,237.9  
Bangladesh  888.2  919.4  974.5  1,357.0  3,099.1  3,599.6  
Belarus  3,198.4  3,681.7  4,026.6  4,371.0  4,742.4  4,975.9  
Bolivia, Plurinational State of  550.4  518.8  571.5  713.6  891.7  1,044.9  
Brazil  7,705.4  6,211.9  4,720.2  11,224.8  10,328.1  5,042.9  
Cambodia  2,374.8  2,683.4  2,797.7  3,137.6  3,424.9  3,608.6  
Cameroon  1,904.3  2,139.5  2,385.8  3,076.0  3,154.9  3,626.6  
Congo, Democratic Rep. of the  2,051.2  1,948.9  1,902.5  1,837.4  2,040.9  3,751.9  
Côte d'Ivoire  569.6  796.4  1,203.6  1,697.4  1,969.3  2,546.6  
Djibouti  178.7  518.0  887.5  1,160.5  1,186.5  1,195.5  
Ecuador  5,184.0  5,484.3  8,213.4  7,548.9  6,823.6  6,057.4  
Egypt  330.4  322.0  1,924.2  2,328.6  4,192.3  4,117.7  
Ethiopia  5,465.1  7,271.2  8,243.8  8,734.1  8,655.9  8,351.6  
Gabon  808.5  882.8  1,054.0  1,103.8  1,187.9  1,221.7  
Ghana  2,369.7  2,469.1  2,332.3  2,101.0  1,893.6  1,824.0  
Indonesia  964.9  969.7  1,026.0  1,317.1  1,614.7  1,764.8  
Kazakhstan  .. .. 257.6  906.2  1,245.0  1,180.6  
Kenya  2,229.6  3,140.5  4,345.3  5,844.6  6,902.3  7,493.4  
Kyrgyz  Republic  1,115.9  1,303.0  1,521.3  1,708.1  1,719.4  1,778.5  
Lao People's Democratic Rep.  2,635.6  3,048.7  3,379.5  3,739.1  4,431.5  5,252.0  
Maldives  157.3  149.9  306.6  395.4  927.9  1,165.8  
Mongolia  571.6  598.4  736.8  814.4  978.9  1,054.7  
Mozambique  1,473.5  1,558.4  1,645.6  1,962.0  2,011.7  1,910.1  
Myanmar  4,434.2  4,520.4  4,188.3  4,187.0  3,682.2  3,341.7  
Nigeria  1,293.1  1,444.7  1,642.0  1,931.0  2,485.1  3,175.1  
Pakistan  5,138.9  5,988.7  7,637.0  10,996.2  18,131.7  21,620.0  
Senegal  360.0  503.8  902.2  1,142.9  1,315.0  1,225.4  
Serbia  542.7  740.3  796.9  924.7  1,046.7  1,241.2  
South  Africa  .. .. .. 1,500.0  1,900.0  2,298.8  
Sri Lanka  4,294.7  4,520.8  4,678.4  5,070.1  6,060.9  6,371.6  
Sudan  1,677.2  1,579.5  1,487.7  1,421.1  1,330.2  1,246.2  
Tajikistan  901.5  1,045.6  1,152.8  1,187.4  1,169.1  1,122.7  
Turkey  515.9  524.3  511.1  868.5  1,625.9  1,933.3  
Uganda  399.4  762.5  1,098.8  1,545.5  1,945.7  2,149.2  
Uzbekistan  1,094.0  1,273.9  1,768.4  1,813.8  1,824.2  1,958.1  
Viet Nam 2,284.0  2,071.4  2,046.1  2,112.9  2,037.5  1,787.9  
Zambia  1,294.6  1,638.1  2,061.0  2,496.8  2,827.5  3,420.2  
Zimbabwe  816.5  1,003.2  1,141.2  1,254.9  1,470.2  1,565.5  
Total of countries above  77,714.7  84,725.1  104,992.4  126,927.6  142,901.0  145,984.4  
Total debt stocks to China  85,876.5  93,816.3  114,814.7  137,495.6  153,671.1  157,111.9  
.. Not available.  
Source:  World Bank, International Debt Statistics database.  
  WT/TPR/S/ 415 • China  
 
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  Table A1. 2 Merchandise exports by HS section and major HS chapter/subheading, 
2015 -20 
HS section/chapter/subheading  2015  2016  2017  2018  2019  2020  
Total exports (USD billion)  2,273.5  2,097.6  2,263.4  2,494.2  2,499.0  2,590.6  
 (% of total exports)   
Exports under processing trade  35.1 34.1 33.5 32.0 29.4 27.1 
01 Live animals and products  0.8 0.8 0.8 0.7 0.7 0.6 
02 Vegetable products  1.0 1.2 1.1 1.0 1.1 1.1 
03 Fats and oils  0.03 0.03 0.04 0.04 0.05 0.1 
04 Prepared food, beverages and tobacco  1.2 1.4 1.3 1.3 1.3 1.2 
05 Mineral products  1.4 1.4 1.7 2.1 2.1 1.4  
27 Mineral fuels and oils  1.2 1.3 1.6 1.9 1.9 1.2  
 2710 Petroleum oils and oils from 
bituminous minerals, not crude …  0.8 0.9 1.1 1.4 1.5 1.0 
06 Chemicals and products thereof  4.7 4.7 5.1 5.5 5.2 5.3  
29 Organic chemicals  1.9 2.0 2.2 2.4 2.3 2.2 
07 Plastics and rubber  3.8 3.9 4.0 4.1 4.3 4.6  
39 Plastics and articles thereof  2.9 3.0 3.1 3.2 3.4 3.7 
08 Raw hides and skins; leather, furskins and articles 
 thereof  1.5 1.5 1.5 1.4 1.4 1.0 
09 Wood, cork, straw  0.7 0.7 0.7 0.7 0.6 0.6 
10 Pulp of wood; paper and paperboard  1.0 1.0 1.0 0.9 1.0 0.9 
11 Textiles and textile articles  12.0 12.1 11.4 10.7 10.4 10.8  
61 Clothing, knitted or crocheted  3.7 3.5 3.2 2.9 2.9 2.4  
62 Clothing, not knitted or crocheted  3.5 3.4 3.2 2.9 2.7 2.4  
63 Other made up textile articles; worn 
articles; rags  1.2 1.2 1.2 1.1 1.1 2.9 
12 Footwear, headgear, etc.  3.0 2.8 2.7 2.5 2.5 2.0  
64 Footwear, gaiters and the like  2.4 2.3 2.1 1.9 1.9 1.5 
13 Articles of stone, plaster, cement  2.4 2.1 2.0 2.1 2.2 2.2 
14 Precious stones and metals  1.4 1.0 0.8 0.8 0.8 0.7 
15 Base metals and articles thereof  7.8 7.4 7.3 7.5 7.3 6.8  
73 Articles of iron and steel  2.7 2.5 2.5 2.6 2.8 2.7 
16 Machinery, electrical equipment  42.2 42.8 43.4 43.9 43.5 44.4  
84 Machinery and mechanical appliances, parts 
thereof  16.0 16.4 16.9 17.2 16.7 17.0 
 
 8471 Automatic data processing machines 
and units thereof …  6.0 6.0 6.3 6.2 5.9 6.6 
 
 8473 Parts … suitable for use with machines 
of heading no. 8469 to 8472  1.3 1.2 1.5 1.8 1.3 1.2 
 
85 Electrical machineries and parts thereof  26.1 26.4 26.4 26.6 26.8 27.4  
 8517 Telephone sets, including telephones 
for cellular networks …  9.4 9.6 9.7 9.6 9.0 8.6 
 
 8528 Monitors and projectors …  1.2 1.3 1.4 1.3 1.2 1.2  
 8542 Electronic integrated circuits  3.1 2.9 3.0 3.4 4.1 4.5 
17 Transport equipment  4.7 4.4 4.6 4.7 4.5 4.3  
87 Vehicles, parts thereof  2.8 2.9 3.0 3.0 3.0 2.9  
 8708 Parts and accessories of motor 
vehicles of HS 8701 to 8705  1.2 1.3 1.4 1.4 1.3 1.3 
18 Precision equipment  3.6 3.5 3.4 3.1 3.2 3.3  
90 Optical, photographic, measuring, medical 
instruments …  3.2 3.2 3.1 2.9 2.9 3.1 
19 Arms and ammunition  0.0 0.0 0.0 0.0 0.0 0.0 
20 Miscellaneous manufactured articles  6.9 7.0 7.0 6.8 7.2 7.7  
94 Furniture, lighting, signs, prefabricated 
buildings  4.3 4.2 3.9 3.9 4.0 4.2 
 
95 Toys, games, sports requisites  1.9 2.1 2.4 2.3 2.5 2.8 
21 Works of art, etc.  0.02 0.01 0.01 0.01 0.03 0.03 
Other   
0.0 0.2 0.2 0.2 0.7 1.0 
Source:  WTO Secretariat calculations, based on UN Comtrade database and information from the General 
Administration of Customs.  
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  Table A1. 3 Merchandise imports by HS section and major HS chapter/subheading, 
2015 -20 
HS section/chapter/subheading  2015  2016  2017  2018  2019  2020  
Total imports (USD billion)  1,679.6  1,587.9  1,843.8  2,135.0  2,069.0  2,055.6    
(% of total imports)   
Import under processing trade  26.6 25.0 23.4 22.0 20.1 19.6 
01 Live animals and products  1.0 1.4 1.3 1.4 2.0 2.5 
02 Vegetable products  3.6 3.4 3.3 2.9 3.0 3.5  
12 Oil seeds and oleaginous fruit; misc. grains, 
seeds and fruit  2.4 2.4 2.4 2.0 1.9 2.2 
 
 1201 Soya bean, whether or not broken  2.1 2.1 2.1 1.8 1.7 1.9 
03 Fats and oils  0.5 0.4 0.4 0.4 0.5 0.5 
04 Prepared food, beverages and tobacco  1.2 1.2 1.2 1.2 1.3 1.4 
05 Mineral products  17.7 17.4 20.7 23.0 24.9 22.1  
26 Ores, slag and ash  5.6 5.9 6.9 6.4 7.9 8.8  
 2601 Iron ores and concentrates  3.4 3.7 4.1 3.5 4.8 5.8  
27 Mineral fuels and oils  11.8 11.1 13.5 16.3 16.6 13.0  
 2709 Petroleum oils and oils obtained from 
bituminous minerals; crude  8.0 7.3 8.9 11.2 11.5 8.6 
 
 2711 Petroleum gases and other gaseous 
hydrocarbons  1.5 1.4 1.8 2.3 2.5 2.0 
06 Chemicals and products thereof  6.7 6.9 7.2 7.3 7.5 7.3  
29 Organic chemicals  2.8 2.8 3.0 3.2 2.8 2.2  
30 Pharmaceuticals  1.1 1.3 1.4 1.3 1.6 1.7 
07 Plastics and rubber  4.7 4.7 4.8 4.3 4.2 4.2  
39 Plastics and articles thereof  3.9 3.8 3.7 3.5 3.4 3.5 
08 Raw hides and skins; leather, furskins  and articles 
thereof  0.7 0.6 0.5 0.4 0.4 0.4 
09 Wood, cork, straw  1.1 1.2 1.3 1.2 1.1 1.0 
10 Pulp of wood; paper and paperboard  1.4 1.4 1.5 1.5 1.3 1.3 
11 Textiles and textile articles  1.9 1.8 1.7 1.6 1.5 1.4 
12 Footwear, headgear, etc.  0.2 0.2 0.2 0.2 0.3 0.3 
13 Articles of stone, plaster, cement  0.5 0.6 0.5 0.5 0.5 0.5 
14 Precious stones and metals, pearls  5.8 5.0 3.5 2.9 2.9 1.5  
7108 Gold, unwrought or in semi -manuf. forms, 
or in powder form  4.7 4.0 2.8 2.1 2.1 0.6 
15 Base metals and articles thereof  5.2 5.0 5.2 5.0 4.6 5.7  
72 Iron and steel  1.1 1.1 1.2 1.0 1.1 1.8  
74 Copper and articles thereof  2.3 2.1 2.2 2.2 2.0 2.4 
16 Machinery, electrical equipment  34.9 35.3 34.0 33.9 33.1 36.0  
84 Machinery and mechanical appliances, parts 
thereof  9.4 9.3 9.2 9.5 9.2 9.3 
 
85 Electrical machineries and parts thereof  25.5 26.0 24.8 24.4 23.9 26.7  
 8517 Telephone sets, including telephones for 
cellular networks …  2.9 2.9 2.6 2.3 2.0 2.1 
 
 8542 Electronic integrated circuits  13.7 14.3 14.2 14.6 14.7 17.1 
17 Transport equipment  5.8 6.1 5.8 5.4 4.7 4.2  
87 Vehicles, parts thereof  4.1 4.5 4.3 3.8 3.6 3.6  
 8703 Motor vehicles for the transport of persons  2.6 2.8 2.7 2.3 2.3 2.2 
18 Precision instruments  6.2 6.1 5.5 5.0 5.0 5.1  
90 Optical, photographic, measuring, medical 
instruments …  5.9 5.8 5.3 4.8 4.8 4.8 
19 Arms and ammunition  0.0 0.0 0.0 0.0 0.0 0.0 
20 Miscellaneous manufactured articles  0.4 0.5 0.5 0.4 0.4 0.3 
21 Works of art, collectors' pieces and antiques  0.02 0.01 0.00 0.01 0.04 0.03 
Other   
0.4 0.8 0.8 1.4 0.7 0.5 
Source:  WTO Secretariat calculations, based on UN Comtrade database and information from the General 
Administration of Customs.  
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  Table A1. 4 China's merchandise exports by destination, 2015 -20 
  2015  2016  2017  2018  2019  2020  
Total exports (USD billion)  2,273.5  2,097.6  2,263.4  2,494.2  2,499.0  2,590.6   
(% of total)  
Americas  25.1 25.1 26.2 26.6 24.3 24.9 
 United  States  18.0 18.4 19.0 19.2 16.8 17.5 
 Other America  7.1 6.7 7.1 7.4 7.5 7.4 
 Mexico  1.5 1.5 1.6 1.8 1.9 1.7 
 Canada  1.3 1.3 1.4 1.4 1.5 1.6 
 Brazil  1.2 1.0 1.3 1.4 1.4 1.3 
Europe  17.0 17.5 17.8 17.8 18.6 19.4 
 EU-27 13.1 13.5 13.9 14.2 14.7 15.1 
 Germany  3.0 3.1 3.1 3.1 3.2 3.4 
 Netherlands  2.6 2.7 3.0 2.9 3.0 3.0 
 Italy 1.2 1.3 1.3 1.3 1.3 1.3 
 EFTA 0.3 0.3 0.3 0.3 0.3 0.3 
 Other Europe  3.6 3.7 3.6 3.3 3.6 4.0 
 United Kingdom  2.6 2.7 2.5 2.3 2.5 2.8 
CISa 2.4 2.7 2.9 3.0 3.2 2.9 
 Russian  Federation  1.5 1.8 1.9 1.9 2.0 2.0 
Africa  4.7 4.3 4.1 4.1 4.4 4.3 
Middle East  4.9 4.6 4.4 3.9 4.3 4.2 
 United Arab Emirates  1.6 1.4 1.3 1.2 1.3 1.2 
Asia 45.9 45.6 44.6 44.5 45.2 44.2 
 Japan  6.0 6.2 6.1 5.9 5.7 5.5 
 Other Asia  39.9 39.5 38.5 38.6 39.4 38.6 
 Hong Kong, China  14.5 13.7 12.3 12.1 11.2 10.5 
 Korea, Republic of  4.5 4.5 4.5 4.4 4.4 4.3 
 Viet Nam 2.9 2.9 3.2 3.4 3.9 4.4 
 India 2.6 2.8 3.0 3.1 3.0 2.6 
 Chinese  Taipei  2.0 1.9 1.9 2.0 2.2 2.3 
 Singapore  2.3 2.1 2.0 2.0 2.2 2.2 
 Malaysia  1.9 1.8 1.8 1.8 2.1 2.2 
 Australia  1.8 1.8 1.8 1.9 1.9 2.1 
 Indonesia  1.5 1.5 1.5 1.7 1.8 1.6 
 Thailand  1.7 1.8 1.7 1.7 1.8 2.0 
 Philippines  1.2 1.4 1.4 1.4 1.6 1.6 
Other  0.0 0.1 0.0 0.0 0.0 0.0 
Memorandum:        
APEC 63.7 63.8 63.5 64.0 62.3 62.7 
ASEAN  12.2 12.2 12.3 12.9 14.4 14.8 
EU-28 15.7 16.2 16.5 16.5 17.2 17.9 
a Commonwealth of Independent States, including certain associate and former member states.  
Source:  WTO Secretariat calculations, based on UN Comtrade  database and information from the General 
Administration of Customs.  
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  Table A1. 5 China's merchandise imports by origin, 2015 -20 
  2015  2016  2017  2018  2019  2020  
Total imports (USD billion)  1,679.6  1,587.9  1,843.8  2,135.0  2,069.0  2,055.6   
(% of total)  
Americas  16.5 16.1 16.4 16.0 15.2 15.7 
 United  States  8.9 8.5 8.4 7.3 6.0 6.6 
 Other America  7.7 7.6 8.0 8.7 9.3 9.1 
 Brazil  2.6 2.9 3.2 3.6 3.8 4.1 
 Chile 1.1 1.2 1.1 1.3 1.3 1.4 
 Canada  1.6 1.2 1.1 1.3 1.4 1.1 
Europe  15.6 16.2  15.6  15.1 15.1 15.4 
 EU-27 11.3 11.9 12.1 11.7 12.2 12.6 
 Germany  5.2 5.4 5.3 5.0 5.1 5.1 
 France  1.5 1.4 1.5 1.5 1.6 1.4 
 Italy 1.0 1.1 1.1 1.0 1.0 1.1 
 EFTA 2.7 2.7 2.0 2.0 1.5 1.2 
 Other Europe  1.5 1.5 1.6 1.4 1.4 1.6 
 United Kingdom  1.1 1.2 1.2 1.1 1.2 1.0 
CISa 3.0 2.9 3.1 3.7 4.2 3.7 
 Russian  Federation  2.0 2.0 2.2 2.8 2.9 2.8 
Africa  4.1 3.5 4.1 4.6 4.6 3.5 
 South  Africa  1.8 1.4 1.3 1.3 1.3 1.0 
Middle East  6.0 5.4 6.0 7.2 7.5 6.0 
 Saudi Arabia, Kingdom of  1.8 1.5 1.7 2.1 2.6 1.9 
Asia 46.1 47.8 47.6 46.4 47.0 49.4 
 Japan  8.5 9.2 9.0 8.4 8.3 8.5 
 Other Asia  37.6 38.6 38.6 37.9 38.8 40.9 
 Chinese  Taipei  8.5 8.7 8.5 8.3 8.4 9.8 
 Korea, Republic of  10.4 10.0 9.6 9.6 8.4 8.4 
 Australia  4.4 4.5 5.2 4.9 5.8 5.6 
 Viet Nam 1.8 2.3 2.7 3.0 3.1 3.8 
 Malaysia  3.2 3.1 3.0 3.0 3.5 3.6 
 Thailand  2.2 2.4 2.3 2.1 2.2 2.3 
 Indonesia  1.2 1.3 1.5 1.6 1.6 1.8 
 Singapore  1.6 1.6 1.9 1.6 1.7 1.5 
 India 0.8 0.7 0.9 0.9 0.9 1.0 
 Philippines  1.1 1.1 1.0 1.0 1.0 0.9 
Other  8.6 8.2 7.2 6.9 6.3 6.2 
 Free Zone Chinab 8.5 8.1 7.2 6.9 6.2 6.1 
Memorandum:        
APEC 67.3 63.6 67.1 65.4 64.3 66.9 
ASEAN  11.6 12.4 12.8 12.6 13.6 14.6 
EU-28 12.4 13.1 13.3 12.8 13.4 13.5 
a Commonwealth of Independent States, including certain associate and former member states.  
b Includes goods that have been exported from China and thereafter re -imported into China.  
Source:  WTO Secretariat calculations, based on UN Comtrade database and information from the General 
Administra tion of Customs.  
 
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  Table A2. 1 Main notifications under WTO  Agreements, 1 January 2018 -13 April 2021  
WTO  Agreement  Description  Latest document symbol and date  
Agreement on Agriculture  
Articles 10 & 18.2 – ES:1 Export subsidies  G/AG/N/CHN/53, 7  December 2020  
Articles 10 & 18.2 – ES:2 Export subsidies – total exports  G/AG/N/CHN/54, 7  December 2020  
Article  18.2 – MA:2 Tariff quotas – imports  G/AG/N/CHN/55, 7  December 2020  
Article  18.2 – DS:1 Domestic support  G/AG/N/CHN/47, 14 December 2018  
Article  18.3 – DS:2 New or modified domestic support  G/AG/N/CHN/49, 14  December 2018  
Agreement on the Application of Sanitary and Phytosanitary Measures  
Article  7, Annex B  Regulations:   
 54 in 2018  G/SPS/N/CHN /1062 -1115 
 33 in 2019  G/SPS/N/CHN/1116 -1148 
 45 in 2020  G/SPS/N/CHN/1149 -1193 
 24 in 2021  G/SPS/N/CHN/1194 -1217 
Agreement on Import Licensing Procedures  
Article  7.3 Replies to the questionnaire  G/LIC/N/3/CHN/18, 30 January 2020  
Agreement on Preshipment Inspection  
Article  5 – first time  Laws and regulations  G/PSI/N/1/Rev.4, 16 October 2019  
Agreement on Rules of Origin  
Article  5, paragraph 4 of 
Annex  II – ad hoc  China -Georgia FTA  G/RO/N/171, 24 May 2018  
 China -Macao, China CEPA  G/RO/N/187, 20 September 2019  
 China -Chile FTA  G/RO/N/191, 20 January 2020  
 China -Mauritius FTA  G/RO/N/212, 4 February 2021  
Agreement on Safeguards  
Articles 12.5 & 8.2  Proposed suspension of 
concessions and other obligations  G/L/1218; G/SG/N/12/CHN/1, 3  April 2018  
G/L/1220; G/SG/N/12/CHN/2, 5 April 2018  
G/L/1221; G/SG/N/12/CHN/3, 5 April 2018  
Agreement on Subsidies and Countervailing Measures  
Article  25.1 & GATT  1994 
Article  XVI:1  Subsidies  G/SCM/N/343/CHN, 19  July 2019  
Article  25.11 – ad hoc  Countervailing measures  G/SCM/N/346, 20 March 2019  
G/SCM/N/360/Rev.1, 5 May 2020  
G/SCM/N/375, 11 March 2021  
Article  25.11 – semi-annual  Countervailing duty  actions:   
 1 January -30 June 2018  G/SCM/N/334/CHN, 22 October 2018  
 1 July-31 December 2018  G/SCM/N/342/CHN, 9 April 2019  
 1 January -30 June 2019  G/SCM/N/349/CHN, 23 October 2019  
 1 July-31 December 2019  G/SCM/N/356/CHN, 13 March 2020  
 1 January -30 June 2020  G/SCM/N/363/CHN, 16 October 2020  
 1 July-31 December 2020  G/SCM/N/371/CHN, 26 February 2021  
Agreement on Technical Barriers to Trade  
Article  2.10 Technical regulations – urgent  G/TBT/N/CHN/1577, 31 March 2021  
Article  2.9 Technical regulations:   
 49 in 2018  G/TBT/N/CHN /1247 -1252, 1258, 1262 -1270, 
1272-1273, 1276 -1299, 1303 -1309 
 84 in 2019  G/TBT/N/CHN/1312, 1314 -1330, 1332 -1341, 
1344-1399 
 107 in 2020  G/TBT/N/CHN/1402 -1413, 1415 -1425, 1429, 
1435-1452, 1455 -1458, 1461 -1514, 1516 -
1521, 1523  
 58 in 2021  G/TBT/N/CHN /1528 -1538, 1540 -1576, 1578 -
1587 
Articles 2.9 & 5.6  Technical regulations and 
conformity assessment 
procedures (proposed) :  
 6 in 2018  G/TBT/N/CHN/1254, 1259, 1300 -1302, 1310  
 2 in 2019  G/TBT/N/CHN/1313, G/TBT/N/CHN/1342  
 1 in 2020  G/TBT/N/CHN /1434  
Article  5.6 Conformity assessment 
procedures (proposed):   
 10 in 2018  G/TBT/CHN/1246, 1253, 1255 -1257, 1260 -
1261, 1272, 1274 -1275 
 2 in 2019  G/TBT/CHN/1311, 1331  
 18 in 2020  G/TBT/CHN/1414, 1426 -1428, 1430 -1433, 
1453, 1454, 1459, 1460, 1515, 1522, 1524 -
1527 
 1 in 2021  G/TBT/CHN/1539  
Article  5.7 Conformity assessment 
procedures (urgent)  G/TBT/CHN/1400, 1401  WT/TPR/S/ 415 • China  
 
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  WTO  Agreement  Description  Latest document symbol and date  
Agreement on Trade -Related Aspects of Intellectual Property Rights  
Article  63.2 Replacement or consolidation of 
the Anti-Unfair Competition Law  IP/N/1/CHN/10; IP/N/1/CHN/U/1, 30 January 
2020 
 Replacement or consolidation of 
the Trademark Law  IP/N/1/CHN/11; IP/N/1/CHN/T/5, 30 January 
2020 
Agreement on Trade Facilitation  
Articles 1.4, 10.4.3, 10.6.2, 
12.2.2  Contact information  G/TFA/N/CHN/4, 10 January 2020; 
G/TFA/N/CHN/2/Rev.3, 30 April 2020  
Articles 22.1 & 22.2  Technical assistance, information 
and contact points  G/TFA/N/CHN/3, 18 October 2019  
Agreement on Trade -Related Aspects of Intellectual Property Rights  
Article  63.2 Replacement or consolidation of 
the Anti -Unfair Competition Law  IP/N/1/CHN/10; IP/N/1/CHN/U/1, 30 January 
2020 
 Replacement or consolidation of 
the Trademark Law  IP/N/1/CHN/11; IP/N/1/CHN/T/5, 30 January 
2020 
Decision on Notification Procedures for Quantitative Restrictions  
G/L/59/Rev.1 – biennial –  
complete notification  Market access – quantitative 
restrictions  G/MA/QR/N/CHN/5/Rev.1, 15 February 2019  
GATT  1994  
Article  XVII:4(a) & paragraph  1 
of the interpr etation of 
Article  XVII State trading  G/STR/N/16/CHN; G/STR/N/17/CHN, 27 July 
2018 
Article  XXIV:7(a) of the 
GATT  1994 & Article  V:7(a) 
of the GATS  China -Mauritius FTA  WT/REG442/N/1 -S/C/N/1037, 7 January 
2021 
Article  XXIV:7(a) of the GATT 
1994 & Article  V:7(a) of the 
GATS  China -Georgia FTA  WT/REG391/N/1 -S/C/N/900, 5 April 2018  
Agreement on Implementation of Article  VI of the GATT  1994  
Article  16.4 – ad hoc  Anti-dumping actions  G/ADP/N/311, 26  March 2018;  
G/ADP/N/320, 29  November 2018;  
G/ADP/N/325, 1  April 2019;  
G/ADP/N/334, 15  November 2019;  
G/ADP/N/339/Rev.1, 5  May 2020 
G/ADP/N/353, 10  March  2021 
Article  16.4 – semi-annual  Anti-dumping actions  G/ADP/N/294/CHN, 15  March 2017;  
G/ADP/N/308/CHN, 18  April 2018;  
G/ADP/N/314/CHN, 23  October  2018;  
G/ADP/N/322/CHN, 12  April 2019;  
G/ADP/N/328/CHN, 23  October  2019;  
G/ADP/N/335/CHN, 21  April 2020  
G/ADP/N/350/CHN, 9 March 2021  
Agreement on Implementation of Article  VII of the GATT  1994  
Article  22.2 Customs valuation  G/VAL/N/1/CHN6, 12 April 2018  
Source:  WTO Secretariat.  
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  Table A2. 2 WTO dispute settlement cases involving China, 1 January 2018 -13 April 2021  
Subject  Respondent/  
complainant  Request for 
consultation 
received  Status (as at 
13 April 2021)  WTO 
document 
series  
China as respondent      
Anti-dumping and countervailing duty 
measures on barley  China/  
Australia  16/12/2020  In consultations  WT/DS598  
Measures concerning the importation of 
canola seed from Canada  China/  
Canada  09/09/2019  In consultations  WT/DS589  
Certain measures concerning imports of 
sugar  China/  
Brazil  16/10/2018  In consultations  WT/DS568  
Additional duties on certain products from 
the United  States  China/  
United  States  16/07/2018  Panel composed  WT/DS558  
Certain measures of transfer of 
technology  China/  
European  Union  20/06/2018  In consultations  WT/DS549  
Certain measures concerning the 
protection of intellectual property rights II  China/  
United  States  23/03/2018  Panel composed  WT/DS542  
Subsidies to producers of primary 
aluminium  China/  
United  States  12/01/2017  In consultations  WT/DS519  
Tariff rate quotas for certain agricultural 
products  China/  
United  States  15/12/2016  Report(s) adopted with 
recommendation to 
bring measures into 
conformity  WT/DS517  
Domestic support for agricultural 
producers  China/  
United  States  13/09/2016  Authorization to 
retaliate requested 
(including 22.6 
arbitration)  WT/DS511  
Anti-dumping measures on imports of 
cellulose pulp from Canada  China/  
Canada  15/10/2014  Implementation 
notified by respondent  WT/DS483  
Anti-dumping and countervailing duty 
measures on broiler products from the 
United  States  China/  
United  States  20/09/2011  Compliance 
proceedings completed 
with finding(s) of non -
compliance  WT/DS427  
China as c omplainant      
Tariff measures on certain goods from 
China – III United  States/  
China  02/09/2019  In consultations  WT/DS587  
Tariff measures on certain goods from 
China  – II United  States/  
China  23/08/2018  In consultations  WT/DS565  
Certain measures related to renewable 
energy  United  States/  
China  14/08/2018  In consultations  WT/DS563  
Safeguard measure on imports of 
crystalline silicon photovoltaic products  United  States/  
China  14/08/2018  Panel composed  
Delayed  WT/DS562  
Certain measures on steel and aluminium 
products  United  States/  
China  05/04/2018  Panel composed  WT/DS544  
Tariff measures on certain goods from 
China  United  States/  
China  04/04/2018  Panel report under 
appeal  WT/DS543  
Measures related to price comparison 
methodologies  European  Union/  
China  12/12/2016  Authority for panel 
lapsed  WT/DS516  
Measures affecting tariff concessions on 
certain poultry meat products  European  Union/  
China  08/04/2015  Settled or terminated/  
Mutually agreed 
solution  WT/DS492  
Certain me thodologies and their 
application to anti -dumping proceedings 
involving China  United  States/  
China  03/12/2013  Authorization to 
retaliate requested  WT/DS471  
Countervailing duty measures on certain 
products from China  United  States/  
China  25/05/2012  Authorization to 
retaliate requested  WT/DS437  
Source:  WTO Secretariat.  
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  Table A2. 3 Industries in which FDI was/is restricted, 2019 and 2020  
2019  2020  
Agricultural, forestry, livestock, and fishery industries  
Selection and seed production of new varieties of wheat and 
corn: the Chinese parties as the controlling shareholders.  Selection of new wheat varieties and seed 
production: the Chinese parties holding no 
less than 34%; and selection of new corn  
varieties and seed production: controlled by 
the Chinese parties.  
Manufacturing industries  
Printing of publications: the Chinese parties as the controlling 
shareholders.  Same as in 2019  
Except for special vehicles and new energy vehicles, the 
Chinese parties in vehicle manufacturing shall hold no less 
than 50% of the shares; a foreign investor may establish two 
or fewer equity joint ventures in China to manufacture the 
same type of vehicle products.  Manufacturing of complete automobiles, 
exclud ing special purpose vehicles, new 
energy vehicles, and commercial vehicles: 
the Chinese parties holding no less than 
50% of the shares; a foreign investor may 
establish two or fewer equity joint ventures 
in China to manufacture the same type of 
complete au tomobile products.  
Industries of production and supply of electricity, heat, gas, and water  
Construction and operation of nuclear power plants: the 
Chinese parties as the controlling shareholders.  Same as in 2019  
Construction and operation of urban water supply and 
drainage network for cities with a population of more than 
500,000: the Chinese parties as the controlling shareholders.  Not listed  
Transportation, warehousing, and postal services industries  
Domestic water transport companies: the Chine se parties as 
the controlling shareholders.  Same as in 2019  
Public air transport companies: the Chinese parties as the 
controlling shareholders, the investment ratio of a foreign 
investor and its affiliates shall not exceed 25%, and the legal 
representati ve shall be a Chinese citizen.  Same as in 2019  
General aviation enterprises: the legal representative shall be 
a Chinese citizen. General aviation enterprises for the 
agricultural, forestry, and fishery industries: limited to equity 
joint ventures. Other general aviation enterprises: the 
Chinese parties as the controlling shareholders.  Same as in 2019  
Construction and operation of civil airports: the Chinese 
parties as the controlling shareholders.  Construction and operation of civil airports: 
the Chinese parties as the controlling 
shareholders, and foreign parties may not 
participate in the constructi on and 
operation of the airport tower.  
Information transmission, software, and IT service industries  
Telecommunications companies : limited to China's WTO 
commitment to open telecommunications services, value -
added telecommunications business of no more t han 50% of 
the foreign share ratio (except e -commerce, domestic multi -
party communications, storage and forwarding categories, 
and call centres). Basic telecommunications services: the 
Chinese parties as the controlling shareholders.  Same as in 2019  
Finance industries  
Securities companies: foreign investment shall not exceed 
51%. Securities investment fund management companies: 
foreign investment shall not exceed 51%. (Elimination of the 
foreign -equity ratio limit will occur in 2021.)  Not listed  
Futures companies: foreign investment shall not exceed 51%. 
(Elimination of the foreign -equity ratio limit will occur in 
2021.)  Not listed  
Life insurance companies: foreign investment shall not 
exceed 51%. (Elimination of the foreign -equity ratio limit will 
occur in 2021.)  Not listed  
Leasing and commercial services industries  
Market surveys: limited to equity or cooperative joint 
ventures; radio and television ratings surveys therein: the 
Chinese parties as the controlling shareholders.  Market surveys: limited to equity joint 
ventures; radio and television ratings 
surveys therein: the Chinese parties as the 
controlling shareholders.  WT/TPR/S/ 415 • China  
 
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  2019  2020  
Education  
Pre-school education, ordinary high school, and higher 
education institutions: subject to Sino -foreign  cooperative 
education, and led by the Chinese parties (the principal or 
principal administrative officer shall be a Chinese national, 
and the Chinese parties shall comprise not less than half of 
the council, board, or joint administrative committee).  Same as in 2019  
Health and social work  
Medical institutions: limited to joint ventures and cooperation.  Medical institutions: limited to equity joint 
ventures.  
Source:  NDRC and MOFCOM, The Special Administrative Measures on Access to Foreign Investment  
(2019  and 2020 editions), 2019 and 2020 National Negative Lists; and information provided by 
the authorities.  
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  Table A2. 4 Industries in which FDI was/is prohibited, 2019 and 2020  
2019  2020  
Agricultural, forestry, livestock, and fishery industries  
Development, breeding, cultivation, and production 
of the precious and fine varieties that are rare and 
special in China, or the production of the relevant 
reproductive materials thereof (including high -
quality genes in the industries of crop production, 
livestock, and aquaculture).  Development, breeding, cultivation, and production 
of related reproductive materials (including good 
genes of cultivation, husbandry, and aquaculture) of 
China's rare and unique varie ties.  
Selection and breeding of transgenic varieties of 
agricultural crops, livestock, and breeding poultry 
and aquatic fry, or the production of their transgenic 
seeds (sprouts).  Breeding genetically modified varieties of crop 
seeds, livestock, and poultry breeds and aquatic 
breeds, as well as manufacturing of genetically 
modified seeds (seedlings) thereof.  
Fishing of aquatic products in sea area under 
Chinese jurisdiction and within Chinese territorial 
waters.  Same as in 2019  
Mining industries  
Rare earths, radioactive minerals, tungsten 
exploration, mining, and mineral processing.  Same as in 2019  
Manufacturing industries  
Smelting, processing, and production of nuclear fuel 
in radioactive minerals.  Not listed  
Application of steaming, stir -frying, moxibustion, or 
calcination of Chinese herbal medicines and other 
processing techniques, as well as the production of 
confidential prescription products of proprietary 
Chinese medicines.  Same as in 2019  
Satellite TV broadcast ground receiving facilities and 
key parts production.  Same as in 2019  
Wholesale and retail industries   
Wholesale and retail of tobacco leaves, cigarettes, 
re-dried tobacco leaves, and other tobacco products.  Same as in 2019  
Transportation, storage and warehousing, and postal services industries  
Air traffic control.  Not listed  
Postal companies, and domestic express delivery 
mail business.  Same as in 2019  
Information  transmission,  software,  and information  technology  services  
Internet news information services, online publishing 
services, Internet audio -visual programme services, 
Internet cultural operations (except music), and 
Internet public distribution of information services 
(except content already opened in China's WTO 
accession commitments).  Same as in 2019  
Leasing and commercial services industries  
Chinese legal matters (except pr ovision of 
information on impact on Chinese legal 
environment), and no foreign investor appointed as 
a partner of a domestic law firm.  Same as in 2019  
Social surveys.  Social surveys.  
Scientific research and technological services industries  
Human stem cell, gene diagnosis, and therapeutic 
technology development and application.  Same as in 2019  
Humanities and social science research institutions.  Same as in 2019  
Geodetic surveying, marine surveying and mapping, 
aerial photography for surveying and mapping, 
ground motion surveying, and surveying and 
mapping of administrative boundaries. Preparation 
of topographic maps, world administrative area 
maps, national administrative area maps, maps of 
administrative areas at or below the provinc ial level, 
national teaching maps, local teaching maps, true 
three -dimensional maps and electronic navigation 
maps; and regional geological mapping, mineral 
geology, geophysics, geochemistry, hydrogeology, 
environmental geology, geological disasters, remot e 
sensing geology, and other surveys.  Geodetic surveying, marine surveying and mapping, 
aerial photography for surveying and mapping, 
ground motion surveying, and surveying and 
mapping of administrative boundaries. Preparation 
of topographic maps, world ad ministrative area 
maps, national administrative area maps, maps of 
administrative areas at or below the provincial level, 
national teaching maps, local teaching maps, true 
three -dimensional maps and electronic navigation 
maps; and regional geological mappi ng, mineral 
geology, geophysics, geochemistry, hydrogeology, 
environmental geology, geological disasters, remote 
sensing geology and other surveys. (The mining 
right holders are not subject to the Special 
Administrative Measures when carrying out work 
within the scope of their mining rights.)  WT/TPR/S/ 415 • China  
 
- 192 - 
 
  2019  2020  
Education  
Compulsory education institutions and religious 
education institutions.  Same as in 2019  
Cultural, sports, and entertainment industries  
News organizations (including but not limited to 
news agencies).  Same as in 2019  
Editing, publishing, and production of books, 
newspapers, periodicals, audio -visual products, and 
electronic publications.  Same as in 2019  
Radio stations, TV stations, radio and TV channels 
(frequencies), radio and TV transmission network 
(transmitter stations, relay stations, radio and TV 
satellites, satellite uplink stations, satellite receiving 
stations, microwave stations, surveillance stations, 
and cable radio and TV transmission networks, etc.). 
Business of video broadcasting by order of radio and 
TV, and installation services of ground receiving 
facilities for satellite TV broadcasting.  Same as in 2019  
Companies producing and operating radio and TV 
programmes (including introduction of business).  Same as in 2019  
Film production companies, distribution companies, 
cinema companies, and film importation business.  Same as in 2019  
Auction companies for heritage auction, heritage 
stores, and state -owned heritage museums.  Same as in 2019  
Performing arts groups.  Same as in 2019  
Source:  NDRC and MOFCOM, The Special Administrative Measures on Access to Foreign Investment  
(2019  and 2020 editions), 2019 and 2020 National Negative Lists; and information provided by 
the authorities.  
  WT/TPR/S/ 415 • China  
 
- 193 - 
 
  Table A3. 1 MFN applied tariff summary, 2021  
  Number 
of lines  Average 
(%) Range (%)  Standard 
deviation  Duty 
free 
(%) MFN 
applied  Bound  
Total  8,580  7.1 0-65 0-65 6.1 12.6 
 HS 01 -24 1,418  11.2 0-65 0-65 10.1 9.4 
 HS 25 -97 7,162  6.3 0-50 0-50 4.6 13.2 
By WTO category        
WTO agricultural products  1,175  12.7 0-65 0-65 11.0 8.9 
 Animals and products thereof  170 11.4 0-25 0-25 7.9 18.2 
 Dairy products  21 11.2 2-20 6-20 4.1 0.0 
 Fruit, vegetables, and plants  390 10.7 0-30 0-30 6.6 6.2 
 Coffee and tea 33 13.0 2-30 8-32 4.7 0.0 
 Cereals and preparations  129 19.7 0-65 0-65 20.4 7.8 
 Oils seeds, fats, oil and their products  108 10.1 0-30 0-30 7.4 20.4 
 Sugars and confectionery  21 30.6 5-50 8-50 16.2 0.0 
 Beverages, spirits and tobacco  66 14.9 0-65 0-65 15.8 1.5 
 Cotton  5 22.0 10-40 10-40 14.7 0.0 
 Other agricultural products, n.e.s.  232 11.9 0-38 0-38 7.9 6.9 
WTO non -agricultural products  7,405  6.2 0-50 0-50 4.3 13.2 
 Fish and fishery products  352 6.8 0-15 0-23 2.9 8.2 
 Minerals and metals  1,260  6.1 0-50 0-50 4.3 8.5 
 Chemicals and photographic supplies  1,431  5.7 0-47 0-47 3.9 9.2 
 Wood, pulp, paper and furniture  421 2.1 0-12 0-20 2.5 41.3 
 Textiles  851 6.9 2-38 2-38 2.4 0.0 
 Clothing  299 6.7 5-12 14-25 1.4 0.0 
 Leather, rubber, footwear and travel goods  226 10.1 0-25 0-25 4.8 0.4 
 Non-electric machinery  1,042  6.2 0-25 0-35 3.6 16.4 
 Electric machinery  468 5.1 0-20 0-35 4.4 37.0 
 Transport equipment  424 10.6 0-45 0-45 7.2 0.2 
 Non-agricultural products, n.e.s.  611 5.7 0-20 0-35 4.8 30.4 
 Petroleum  20 4.8 0-9 0-9 3.0 15.0 
By ISIC sector        
ISIC 1 – Agriculture, hunting and fishing  670 9.7 0-65 0-65 9.7 22.1 
ISIC 2 – Mining  123 1.7 0-6 0-8 1.7 41.5 
ISIC 3 – Manufacturing  7,786  7.0 0-65 0-65 5.7 11.3 
 Manufacturing excluding food processing  6,956  6.4 0-50 0-50 4.5 12.3 
ISIC 4 – Electrical energy  1 0.0 0 0 0.0 100.0  
By stage of processing        
First stage of processing  1,190  8.4 0-65 0-65 9.2 20.6 
Semi-processed products  2,627  6.3 0-65 0-65 5.4 5.4 
Fully processed products  4,763  7.3 0-65 0-65 5.5 14.5 
By HS section        
01 Live animals and products  533 9.3 0-25 0-25 6.1 12.4 
02 Vegetable products  514 13.7 0-65 0-65 12.5 10.9 
03 Fats and oils  56 12.6 2-30 5-30 5.9 0.0 
04 Prepared food, beverages and tobacco  315 9.9 0-65 0-65 11.1 3.5 
05 Mineral products  201 2.9 0-9 0-12 2.5 27.9 
06 Chemicals and products thereof  1,354  5.8 0-50 0-50 4.8 9.7 
07 Plastics, rubber, and articles thereof  280 8.9 0-25 0-25 4.2 0.4 
08 Raw hides and skins, leather, and its products  106 9.7 3-20 5-23 4.3 0.0 
09 Wood and articles of wood  235 1.6 0-12 0-20 2.4 42.6 
10 Pulp of wood, paper and paperboard  161 3.8 0-7.5 0-7.5 2.3 21.7 
11 Textiles and textile articles  1,147  7.1 1-40 3-40 3.4 0.0 
12 Footwear, headgear, etc.  73 8.1 4-14 10-25 2.3 0.0 
13 Articles of stone, plaster, cement  205 10.4 0-20 0-28 3.5 0.5 
14 Precious stones and metals, pearls  90 5.0 0-21 0-35 5.8 38.9 
15 Base metals and articles thereof  773 5.8 0-9 0-30 2.3 2.5 
16 Machinery, electrical equipment, etc.  1,545  5.7 0-25 0-35 4.0 24.9 
17 Transport equipment  439 10.4 0-45 0-45 7.2 0.7 
18 Precision equipment  336 5.5 0-20 0-30 5.2 34.2 
19 Arms and ammunition  21 13.0 13-13 13-15 0.0 0.0 
20 Miscellaneous manufactured articles  186 5.2 0-20 0-25 4.4 34.4 
21 Works of art, etc.  10 3.1 0-6 0-14 2.6 20.0 
Note:  Calculations are based on national tariff line level (8 -digit), excluding in -quota rates and including 
AVEs for non -ad valorem  rates provided by the authorities.  
 Interim duty rates are used for the calculations when fully applied at the 8 -digit level.  
Source: WTO Secretariat calculations, based on data provided by the authorities.   
  WT/TPR/S/415 • China  
 
- 194 - Table A3. 2 Active central subsidy programmes notified in 2019  
Sector (number 
of programmes)  Programme number and name  Duration  Budget  
(CNY million)  
Agriculture (7)  33 Projects of agricultural, forestry, animal and fishery  2000-present  .. 
35 Imported products for the purpose of replacing the planting of poppies  2000-present  .. 
36a Imports of seeds (seedlings)  2016-2020 .. 
50 Fund for water resources development  1983-present  2017: 30,787.72  
2018: 20,684.76  
52a Fund for agricultural resources and ecological protection  2011-present  2017: 22,036; 2018: 24,536  
53 Subsidy for a new round of returning cultivated land to forests and grassland  2014-present  2017: 9,197; 2018: 12,789  
65a Agricultural production (excluding large -scale farming)  2008-present  .. 
Technology (5)  5a High or new technology enterprises  2008-present  .. 
6 Additional calculation and deduction of R&D expenses  2017-2020 .. 
7 Enterprises transferring technology  2008-present  .. 
10a Service enterprises with advanced technology  2016-present  .. 
41 Integrated circuit industry  2008-present  .. 
Fishery (5)  74 Enterprises engaged in projects of agricultural, forestry, animal and fishery  2008-present  .. 
75 Fishery stocks enhancement and fish fries releasing  2009-present  Since 2017, statistical 
breakdown for this 
programme is not available. 
The estimated size of  the 
funds is CNY  398.5 million.  
76 Subsidy for the prevention of aquatic animal diseases  2017-present  2017: 44; 2018: 60  
78 Improved aquatic breed  2014-present  2017: 100; 2018: 100  
79 Reform in tax and fee on refined oil (for fisheries)  2015-present  In varying amounts  
Energy (5)  12a Projects for environmental protection, water and energy conservation  2008-present  .. 
54a Fund for energy conservation and emission reduction  2015-present  2017: 34,066; 2018: 33,230  
61 Special fund for development of renewable energies  2016-2020 2017: 5,400; 2018: 6,887.44  
62a Subsidy fund for surcharge of electricity price of renewable energies  2012-present  2017: 75,000; 2018: 83,900  
64a Shale gas  2018-March 2021  .. 
Disability support 
(5) 27a Enterprises that employ disabled people  2016-present  .. 
28a Enterprises employing disabled people  2007-present  .. 
29a Imported products exclusively used by disabled people  1997-present  .. 
30 Products for the disabled people  1994-present  .. 
31a Enterprises producing goods exclusively used by the disabled people  2004-2020 .. 
Chemical & 
material (5)  13a Building materials products produced with integrated utilization of resources  2008-present  .. 
14a Integrated utilization of resources  2015-present  .. 
15a New-type wall materials  2015-present  .. 
16 Petroleum products produced with comprehensive utilization of resources  1) and 2) 2009 -present;  
3) 2013 -2023 .. 
40 Refined oil  2011-present  ..  
  WT/TPR/S/415 • China  
 
- 195 - Sector (number 
of programmes)  Programme number and name  Duration  Budget  
(CNY million)  
Infrastructure (4)  1 Chinese -foreign joint ventures engaged in port and dock construction  Five years of tax exemption and 
five years of reduction by half  .. 
2 Enterprises with foreign investment established in Special Economic Zones 
(excluding Shanghai Pudong area)  Five yea rs of tax exemption and 
five years of reduction by half  .. 
3 Enterprises with foreign investment established in Pudong area of Shanghai  Five years of tax exemption and 
five years of reduction by half.  .. 
11a Public infrastructure projects  2008-present  .. 
Waste 
management (3)  67 Sites of centralized treatment of urban and rural sewage and centralized 
treatment of domestic garbage  2018-present  .. 
68 Comprehensive utilization of solid wastes  2018-present  .. 
69 Enterprises that are below pollutant discharge standards prescribed by the 
state and local governments  2018-present  .. 
Financing (3)  45 Accelerating depreciation of fixed assets  1)-4) 2014 -present;  
5)-6) 2015 -present;  
7) 2018 -December 2020  .. 
63a Reward and subsidy for fee reduction of the financing guarantee provided for 
small and micro enterprises  2018-2020 2018: 3,000  
71 Financing  2018-December 2020  .. 
Environment (3)  22a Clean Development Mechanism  2007-present  .. 
55a Fund for air pollution prevention and control  2016-present  2017: 16,000; 2018: 20,000  
70 Enterprises involving the reduction of excessive capacities and structural 
adjustment  Tax exemption of up to two years  .. 
Automobile and 
transportation (3)  20 Urban public transportation enterprises that purchase buses and trolleybuses  2012-December 2020  .. 
46 Vehicle purchase tax for trailers  2018-June 2021  .. 
66 Specific mobile sources of pollution  2018-present  .. 
SME (2)  23 Small and micro enterprises  2008-present  .. 
26 Governmental funds  2016-present  .. 
Poverty reduction 
(2) 47 Fund for poverty alleviation  1980-present  2017: 86,095; 2018: 106,095  
73 Poverty alleviation migration  2018-December 2020  .. 
Pharmaceutical 
(2) 32 Anti-HIV-AIDS medicine  1) 2016 -December 2020;  
2) 2016 -2018 .. 
72 Anti-cancer drugs  2018-present  .. 
Economic 
development (2)  4 The Western Regions  1) 2001 -2020;  
2) two years of tax exemption and 
three years of reduction by half;  
3) 2001 -present.  .. 
57a Fund for development of international economic relations and trade  2014-present  2017: 11,976; 2018: 11,378  
Oil & gas (1)  39 Urban land use of oil and gas production enterprises  2015-present  .. 
Mining (1)  37a Filling mining and mining resources in exhaustion stage  2016-present  .. 
FDI (1)  38a Import of equipment  1998-present  .. 
.. Not available.  
a Programme eligibility tied to specific information that is not provided in the notification.  
Source:  WTO documents G/SCM/N/343/CHN, 19 July 2019; and G/SCM/N/343/CHN/Corr.1, 31  July 2019.    
  WT/TPR/S/415 • China  
 
- 196 - Table A3. 3 Summary of IPR legislation, as at late -January 2021  
Form  Main legislation  Coverage  Period of protection  Notification to 
the TRIPS 
Council  
Copyrights and 
related rights  Copyright Law 
(last amended in 
2020)  Works of literature, art and sciences, which are expressible in 
some form and created in writing; orally; musically, 
theatrically, quyi, choreographic and/or acrobatically; fine 
arts and architecture; ph otography; audio -visual works and 
works created by a process analogous to cinematography; 
graphic works such as drawings of engineering designs and 
product designs, maps and sketches, and model works; 
computer software; and other intellectual creations wit h the 
characteristics of works.  For natural persons, works are protected for life 
plus 50 years.  
For legal persons, cinematographic and 
photographic works are protected for 50  years.  
Software copyright exists from the date on 
which its development is compl eted. 
For legal persons, audio -visual and 
photographic works are protected for 50  years, 
and typographical designs are protected for 10 
years.  IP/N/1/CHN/C/1 , 
8 July 2002  
Trademarks  Trademark Law 
(last amended in 
2019)  Applications to register as a trademark any word, device, 
letter of the alphabet, number, three -dimensional symbol, 
colour combination, sound or any combination thereof that 
identifies and distinguishes the goods of a natural person, 
legal person or other organization from those of oth ers. The 
Law has been amended four times since 1982. The latest 
amendment aims to  strengthen  trademark protection, 
promote a fair business environment, effectively curb bad -
faith trademark registratio ns, and increase compensation for 
infringement of tradem ark rights.  10 years from the day the registration is 
granted, renewable indefinitely.  IP/N/1/CHN/T/5, 
30 January 2020  
Patents  Patent Law (last 
amended in 2008)  Inventions and utility models for which patent rights are to be 
granted shall be ones which ar e novel, creative and of 
practical use.  20 years from the date of filing the application. 
The term of protection for utility models is 10 
years, and the term for designs is 15 years, 
from the date of application.  IP/N/1/CHN/P/2, 
21 December 2010  
Layout -designs 
of integrated 
circuits  Regulations on the 
Protection of 
Layout -Designs of 
Integrated Circuits 
(promulgated in 
2001)  Any layout -design which is original in the sense that the 
layout -design is the result of the creator's own intellectual 
effort and is not commonplace among creators of layout -
designs and manufacturers of integrated circuits at the time 
of its creation.  10 years from the date of filing an application 
for registration of the layout -design or from the 
date on which it was first com mercially 
exploited anywhere in the world, whichever 
expires earlier. No matter whether it has been 
registered or commercially exploited, a layout -
design shall no longer be protected 15 years 
after the date of the completion of its creation.  .. 
New plant 
varieties  Regulations on the 
Protection of New 
Varieties of  Plants 
(last amended in 
2014) Artificially cultivated plant varieties, or ones developed from 
discovered wild plants, which possess novelty, distinctness, 
uniformity and stability, and which are d uly named.  20 years from the date of authorization in the 
case of vines, forest trees, and ornamental 
trees, and 15  years for other plants . .. 
Anti-Unfair 
Competition  Anti-Unfair 
Competition Law 
of the People's 
Republic of China 
(last amended in 
2019)  Protection of trade secrets. Improves the definition and 
expands the scope of infringement, enhances legal liability for 
infringing trade secret and transfers the burden of proof in 
civil trial procedures that infringe trade secrets.   IP/N/1/CHN/10, 
IP/N/1/CHN/U/1 , 
30 January 2020   
  WT/TPR/S/415 • China  
 
- 197 - Form  Main legislation  Coverage  Period of protection  Notification to 
the TRIPS 
Council  
Criminal Law  Criminal Law (last 
amendment in 
2020)  Criminal penalties for IPR infringements, raising the maximum 
prison term for trademark and copyright infringements from 7 
to 10 years, adding the protection of service mar ks, 
supplementing the types of criminal acts that infringe on 
trade secrets, and adding "industrial espionage crime".  
 
In December 2020, the NPC Standing Committee passed the 
Criminal Law Amendment (XI), which increased the criminal 
penalties for infringem ent of IPRs. It increased the maximum 
sentence for infringement of trademark rights, copyrights, 
and trade secrets from 7 to 10 years, and increased the 
minimum penalty from control or criminal detention to 
fixed-term imprisonment. In addition, the Amendme nt 
enhanced the protection of service trademarks, added the 
types of criminal acts that infringed on trade secrets including 
the crime of commercial espionage, and added the types of 
acts of copyright infringement including the crime of 
infringement of per former's rights.   .. 
.. Not available.  
Source:  Information provided by the authorities; and notifications to the TRIPS Council.1 
 
1 Notifications to the TRIPS Council: WTO documents IP/N/1/CHN/P/2, 21 December 2010; IP/N/1/CHN/P/3, 26 August 2011; IP/N/1/CHN/C/1 (2001 Version), 8 
July 2002; IP/N/1/CHN/L/1/Rev.1, 13 October 2003; IP/N/1/CHN/9 (2013 Amendment), 19 October 2017; and IP/N/1/CHN/T/5 (2019 Am endment), 30 January 2020. 
Viewed at: https://e -trips.wto.org/ . WT/TPR/S/ 415 • China  
 
- 198 - 
 
  Table A3. 4 Membership in International IPR Conventions, as at January 2021  
International 
organization  International instrument  Status  Date  of accession (or 
signature, ratification)  
WIPO  Beijing Treaty  In force  28 April 2020 
WIPO Copyright Treaty  In force  9 June 2007 
WIPO Performances and Phonograms Treaty (WPPT)  In force  9 June 2007 
Strasbourg Agreement  In force  19 June 1997 
Locarno Agreement  In force  19 September  1996 
Madrid Protocol  In force  1 December  1995 
Budapest Treaty  In force  1 July 1995 
Nice Agreement  In force  9 August  1994 
Patent Cooperation Treaty (PCT)  In force 1 January  1994 
Phonograms Convention  In force  30 April 1993 
Berne Convention  In force  15 October  1992 
Madrid Agreement (Marks)  In force  4 October  1989 
Paris Convention  In force  19 March  1985 
WIPO Convention  In force  3 June 1980 
Marrakesh VIP Treaty  Signed  (signed 28  June 2013)  
Singapore Treaty  Signed  (signed 29  January  2007)  
Trademark Law Treaty (TLT)  Signed  (signed 28  October  1994)  
Washington Treaty  Signed  (signed 1  May 1990)  
UPOV  UPOV Convention  In force 23 April 1999 
UNESCO  Universal Copyright Convention  In force  30 October  1992 
Source:  WIPO IP Portal, WIPO -Administered Treaties: Contracting Parties: China . Viewed at: 
https://wipolex.wipo.int/en/treaties/ShowResults?country_id=38C . 
  WT/TPR/S/ 415 • China  
 
- 199 - 
 
  Table A3. 5 General regulatory framework of new plant varieties protection  
Laws/regulations  Issuing authority  Latest 
amendment  
Regulations on the Protection of New Varieties of  Plants  State Council  29 July 2014 
Implementing Rules for the Regulations of the Protection of New 
Varieties of Plants (Agriculture Part)  Ministry of Agriculture  25 April 2014 
Implementing Rules for the Regulations of the Protection of New 
Varieties of Plants (Forestry Part)  Ministry of Forestry  25 January  2011 
Administrative Execution Measures of the Protection of New Varieties 
of Forestr y Plants  Ministry of Forestry  30 December  2015 
Rules for the Review Board on New Plant Varieties  Ministry of Agriculture  13 February  2001 
Interpretation of the Supreme People's Court concerning Some 
Issues on Disputes of Trial of Cases over New Plant Verities  Supreme People's 
Court  5 February  2001 
Interpretation of the Supreme People's Court on Some Issues 
Concerning the Application of Law in the Trial of Cases Involving the 
Disputes over Infringement upon the Rights of New Plant Varieties  Supre me People's 
Court  12 January  2007 
Seed Law  National People's 
Congress Standing 
Committee  4 November  2015 
Provisions on Infringement Cases of New Plant Varieties in 
Agriculture  Ministry of Agriculture  12 December  2002 
Source:  Information provided by the authorities.  
  WT/TPR/S/ 415 • China  
 
- 200 - 
 
  Table A4. 1 Central Government support to fisheries as notified to the WTO  
Title 
Legal basis  Objective  Subsidy and beneficiaries  Start 
date Revenue 
forgone/ 
budgetary 
allocation in 
2018 (CNY 
million)  
Projects of agricultural, 
forestry, animal and 
fishery  
Law of the People's 
Republic of China on 
Enterprise Income Tax 
(2007); Regulations for 
the Implementation of the 
Law of the People's 
Republic of China on 
Enterprise Income Tax 
(2007); MOF Cir cular Cai 
Shui No.  149, 2008; MOF 
Circular Cai  Shui No.  26, 
2011; MOF Circular Cai 
Shui No . 73, 2016 Support the development 
of fishery preliminary 
processing, among 
others.  Enterprise income tax 
exemption/reduction  from income 
derived by an enterprise from 
stipulated projects of preliminary 
processing related to farming, 
forestry, animal husbandry, and 
fisheries.  2008 No data on 
revenue 
forgone  
Fishery stocks 
enhancement and fish 
fries releasing  
MOF Circular Cai Nong 
No. 42, 2017 Enhance natural fishery 
resources, increase 
fishermen's income, and 
improve fishery 
performance.  Funds are provided through local 
governments to fishermen, relevant 
scientific research institutions, and 
social groups involved in stocks 
enhancement and fish  fries 
releasing.  2009 Budgetary 
allocation:  
2018: 
estimated to be 
398.5a 
Public subsidy for the 
prevention of aquatic 
animal diseases  
NDRC Circular Fa Gai 
Nong Jing No.  913, 2017 Promote sustainable 
development of 
aquaculture industry, 
and support prevention 
and control of aquatic 
animal diseases.  Investment funds are provided to 
aquatic animal disease prevention, 
control and monitoring centres, and 
regional centres.  2017 Budgetary 
allocation:  
2018: 60  
Subsidy for scrapping and 
dismantling vessels and 
for ship type 
standardization; subsidy 
fund for fishery 
development and the 
scrapping, dismantling, 
and renovating of vessels  
MOF Circular Cai Jian 
No. 977, 2015; MOF 
Circular Cai Jian No.  418, 
2016 Reduce intensity of 
marine fishin g and 
promote the reduction in 
fishing vessels;  
rehabilitate ecological 
environment;  
improve fishing vessels 
safety;  
optimize and adjust the 
industrial structure; 
promote the sustainable 
development of distant 
water fishing; and phase 
out vessels with high -
energy consumption, 
high emissions, and poor 
safety performances.  Provided to/for fishermen for 
reducing the number of fishing 
vessels and quitting marine fishing; 
scrapping, dismantling, and 
renovating fishing vessels, with an 
emphasis on certain vessels ; 
construction of fishery equipment 
and facilities; conservation and 
utilization of international fishery 
resources; scrapping and renovation 
of seagoing transport vessels ahead 
of schedule; dismantling of inland 
vessels; and renovating and building 
new mo del vessels.  2015 Budgetary 
allocation:  
2018: 7,927.15  
Subsidy for improved 
aquatic breed  
Fishery Law of the 
People's Republic of 
China, 2013  Improve the quality of 
aquaculture species.  Provided to eligible aquatic breed 
improving farms.  2014 Budgetary 
allocation: 
2018: 100  
Subsidy for reform in tax 
and fee on refined oil (for 
fisheries)  
MOF Circular Cai Jian 
No. 499, 2015; MOA 
Circular Nong Ban Yu 
No. 65, 2015 Protect fisheries 
resources and facilitate 
fishery industrial 
restructuring; reduce 
fishing intensity; 
promote the sustainable 
development of fisheries; 
maintain the livelihood of 
fishermen; increase the 
incomes of fishermen; 
maintain the stability of 
fishing areas; and ensure 
the safety of the 
fishermen's lives and 
property.  Support takes the form of Central 
Government funds distributed 
through local governments to 
fishermen and enterprises involved 
in the reduction of the number of 
fishing vessels and no longer 
engaging in fishing, and whose 
fishing vessels are dism antled or 
transformed into artificial reefs. 
Some support is provided to 
fisheries resource conservation, and 
for a closed fishing season, fishery 
and fishery administration 
informatization construction, 
navigation sign -post construction in 
fishing ports, etc. 2015 No data 
provided  
a This is one part of a bigger programme. Disaggregated figures for this single programme are not 
available; they have been estimated.  
Source:  WTO documents G/SCM/N/343/CHN, 19  July 2019; and G/SCM/N/343/CHN/Corr.1, 31  July 2019.  WT/TPR/S/ 415 • China  
 
- 201 - 
 
  Table A4. 2 Local government support to fisheries as notified to the WTO  
Title 
Legal basis  Objective  Subsidy and beneficiaries  Start 
date 
Budgetary 
allocation  
(CNY 
10,000)  
Hebei Province      
Subsidy for improving 
aquatic breeds  
Ji Neng Ye Yu Fa No.  4, 
2017 Promote aquaculture industry upgrade 
and protect key aquaculture species 
resources.  Provided to eligible aquatic 
breeding production enterprises.  2017 2018: 
500 
Jiangsu Province      
Grant for fishermen 
during the Yangtze 
River fishing closed 
seasons (Nanjing City)  
Ning Nong Cai No.  16, 
2017 Alleviate the hard -living conditions of 
fishermen during the fishing closed 
seasons, and secure smooth 
implementation of closed fishing for the 
Yangtze River.  Grant scheme. Provided to 
fishermen during the fishing 
closed seasons.  2017 No data 
provided  
Grant for fishermen 
during the Yangtze 
River fishing closed 
seasons (Zhenjiang 
City) 
Su Zheng Ban Fa 
No. 18, 2003 Safeguard the livelihood of fishermen 
during the fishing closed seasons.  Grant scheme. Provided to 
fishermen on the Yangtze River.  2003 2018: 
48.6 
Grant for fishermen on 
the Yangtze River 
during the spring 
fishing closed season 
(Changzhou City)  
Chang Xin Nong No.  16, 
2017; Chang Xin Nong 
No. 73, 2018 Provide grant for fishermen during the 
fishing closed period to ensure smooth 
implementation of the fishing closure.  Grant scheme. Provided to 
fishermen during the spring 
fishing closed seasons.  2017 2018: 
45 
Zhejiang Province      
Grant for policy -based 
fishery mutual 
insurance  
Zhe Cai Nong No.  55, 
2012 Improve fishermen's capacity to 
withstand natural disasters, and ensure 
social stability in the fishing areas.  Grant scheme. Provided to 
eligible individuals/organizations 
engaged in fishing 
production/operation.  2005 2018: 
6,550  
Fund for marine and 
fishery comprehensive 
management and 
industry development  
Zhe Cai Nong No.  47, 
2015 Promote healthy, sustainable 
development of marine fisheries and 
recovery of fishery resources. Promote 
eco-friendly and safe aquaculture 
models and improve marine 
management and public services.  Grant scheme. Provided for: 
(i) fisheries recovery, fishery 
stocks enhancement, and 
fishermen quitting marine 
fishing; (ii)  eco-friendly 
renovation in the fishery i ndustry 
and promotion of eco -friendly, 
circular, and safe aquaculture 
models; (iii)  monitoring of 
marine environment and 
economics and development of 
the marine protected areas; 
(iv) development or standardized 
fishing ports; and (v)  quarantine 
inspection of aquatic animals and 
safeguarding of the quality of 
aquatic products.  2015 2018: 
49,506.5  
Grant for supporting 
fishing boat 
standardization projects 
(Hangzhou City)  
Cai Jian No.  499, 2015; 
Cai Jian No.  977, 2015; 
Zhe Cai Jian No.  14, 
2016 Control the in tensity of fishing; 
eliminate old, wooden, polluting 
capture and aquaculture boats that are 
highly destructive to resources; and 
realize sustainable fisheries 
development goals, including well -
ordered production, scientific utilization 
of resources, a good  ecological 
environment, and continuous 
improvement of people's livelihoods.  Grant. Provided to fishing boat 
owners operating legally.  2017 2018: 
392 
Fund for policy -based 
fishery insurance 
(Ningbo City)  
Yong Hai Ban No.  141, 
2018 Make fishermen better able to 
withstand natural disasters and risks, 
and maintain the stability of the fishing 
community.  Grant to contribute to insurance 
premiums. Provided to fishing 
vessels and owners of fishing 
vessels that engage in or provide 
services for fishery p roduction 
and management in Ningbo.  2005  2018: 
19 WT/TPR/S/ 415 • China  
 
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  Title 
Legal basis  Objective  Subsidy and beneficiaries  Start 
date 
Budgetary 
allocation  
(CNY 
10,000)  
Fujian Province      
Funds for marine 
economic development  
Min Cai Nong No.  30, 
2017 Promote the healthy and sustainable 
development of the marine economy, 
and encourage innovation in marine 
technologies, such as marine 
biomedicine, marine aquaculture 
equipment, marine renewable energy, 
etc. Grant and reward (among 
others). Provided to eligible 
enterprises.  2017 2018: 
12,003.6  
Fund for marine and 
fishery structural 
adjustment  
Min Cai Nong No.  62, 
2014 Promote the safety of production, 
increase the quality of aquaculture, 
and promote the transformation of the 
development mode of fishery economy.  Grant. Provided to aquaculture 
enterprises, farms, cooperatives, 
and scientific research institutes.  2017  2018: 
2,800  
Fund for aquatic 
products processing 
(Fuzhou City)  
Rong Hai Yu No.  407, 
2017; Rong Hai Yu 
No 431, 2018 Promote high -quality development of 
aquatic products processing industry.  Reward. Provided to eligible 
aquatic products pr ocessing 
enterprises.  2017 2018: 
414 
Fund for aquaculture 
(Fuzhou City)  
Rong Hai Yu No.  406, 
2017; Rong Hai Yu 
No. 432, 2018 Encourage comprehensive farming of 
rice and fish, factory fish farming, etc.  Reward. Provided to eligible 
aquaculture enterprises.  2017 2018: 
421.3  
Fund for marine and 
fishery development 
(Xiamen City)  
Xia Hai Yu No.  16, 2018 Promote marine scientific and 
technological innovation, aquaculture 
breeding techniques, recreational 
fishery, and distant water fisheries.  Grant and reward. Provided to 
eligible enterprises that comply 
with domestic law and 
international fishery 
management rules.  2018 No data 
provided  
Shandong Province      
Fund for distant water 
fishery development 
(Rizhao City)  
Ri Zheng Zi No.  100, 
2017 Promote the healthy and sustainable 
development of distant water fisheries, 
and improve the stability, safety, 
resistance to pollution, and habitability 
of distant water fishing vessels.  Grant. Provided to eligible 
approved distant water fishing 
enterprise s that comply with 
domestic law and international 
fishery management rules.  2017 No data 
provided  
Fund for distant water 
fishery (Qingdao City)  
Qing Zheng Zi No.  88, 
2012 Promote healthy and sustainable 
development of the fishery industry, 
and make fishing vessels more energy -
saving and environmentally friendly.  Grant. Provided to eligible distant 
water fishery enterprises that 
comply with domestic law and 
international fishery 
management rules.  2013 No data 
provided  
Guangdong Province      
Fund for developing the 
deep water cage 
aquaculture  
Yue Hai Yu Han No.  6, 
2015 Optimize the fishery industry structure, 
and protect marine resources.  Grant. Provided to eligible 
aquaculture enterprises.  2015  No data 
provided  
Production and living 
allowances for 
fishermen during closed 
seasons (Zhuhai City)  
Zhu Hai Non Shui 
No. 192, 2017 Protect fishery resources, promote 
sustainable development of the fishery 
industry, and address the livelihood 
problem of fishermen during closed 
fishing periods to maintain social 
stability in fishing areas.  Grant. Provided to fishermen 
subject to fishing closure 
practice.  2017  2018: 
12.3 
Fund for aquaculture 
(Zhongshan City) 
Zhong Hai Yu No.  73, 
2017 
Zhong Hai Yu No.  74, 
2017 Improve aquaculture breedin g, 
enhance the quality management of 
aquaculture breeds. and realize 
sustainable development of the fishery 
industry.  Fund support. Granted to 
enterprises holding valid farming 
permits and breed production 
permits.  2013  2018: 
108 
Living allowances for 
fishermen during fishing 
closed seasons. 
(Zhongshan City)  
Yue Hai Yu No.  25, 
2018 Protect fishery resources, promote 
sustainable development of the fishery 
industry, and address the livelihood 
problem of fishermen during closed 
fishing periods to maintain so cial 
stability in the fishing area.  Allowances. Provided to crew 
members of the fishing boats 
subject to the fishing closure.  2009  2018: 
208.6  
Guangzhou Province      
Fund supporting the 
policy -based 
aquaculture insurance  
Hui Nong No.  179, 2017 Build the risk resistance capacity of 
aquaculture, reduce the loss resulting 
from natural disasters, and promote 
sustainable development of the 
aquaculture industry.  Fund support. Provided to 
farmers and enterprises engaged 
in legal aquaculture activities and 
have participated in the 
insurance scheme.  2017 2018: 
462 WT/TPR/S/ 415 • China  
 
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  Title 
Legal basis  Objective  Subsidy and beneficiaries  Start 
date 
Budgetary 
allocation  
(CNY 
10,000)  
Liaoning Province      
Subsidy for scrapping 
and dismantling vessels 
and for ship type 
standardization (Dalian 
City) 
Cai Jian No . 977, 2015 Reduce the intensity of marine fishing, 
and increase grant on top of Central 
Government funds to fishermen 
quitting marine capture.  Grant. Provided to fishermen or 
enterprises that volunteer to quit 
marine capture and/or scrap 
dismantle, and dispose of the ir 
ships with no harm done.  2017 No data 
provided  
Fund for marine and 
fishery development  
(Dalian City)  
Da Cai Nong No.  431, 
2017 Protect the marine environment, and 
promote healthy and sustainable 
development of the fishery industry.  Grant. Provided for aquatic 
product safety detection, marine 
environment monitoring and 
forecasting, fishery safety 
management, stock 
enhancement, fisherman 
personal accident insurance, and 
purchase of standard aquaculture 
fishing vessels.  2017 No data 
provided  
Source:  WTO d ocuments G/SCM/N/343/CHN, 19  July 2019; and G/SCM/N/343/CHN/Corr.1, 31  July 2019.  
 
  WT/TPR/S/ 415 • China  
 
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  Table A4. 3 Tariff lines and rates as per the Resource Tax Law  
Tariff lines  Tariff objects  Tariff rates  
Energy 
minerals  Crude oil  Raw ore  6% 
Natural gas, shale gas, natural gas hydrate  Raw ore  6% 
Coal Raw ore or 
mineral dressing  2%-10% 
Coal-derived (bed) gas  Raw ore  1%-2% 
Uranium, thorium  Raw ore  4% 
Oil shale,  oil sand, natural asphalt, stone coal  Raw ore or 
mineral dressing  1%-4% 
Terrestrial heat  Raw ore  1%-20% or 
CNY 1-30 per 
cubic metre  
Metallic 
minerals  Ferrous 
metals  Iron, manganese, chromium, vanadium, 
titanium  Raw ore or 
mineral dressing  1%-9% 
Non-ferrous 
metals  Copper, lead, zinc, tin, nickel, antimony, 
magnesium, cobalt, bismuth, mercury  Raw ore or 
mineral dressing  2%-10% 
Bauxite  Raw ore or 
mineral dressing  2%-9% 
Tungsten  Mineral dressing  6.5%  
Molybdenum  Mineral dressing  8% 
Gold, silver  Raw ore or 
mineral dressing  2%-6% 
Platinum, palladium, ruthenium, osmium, 
iridium, rhodium  Raw ore or 
mineral dressing  5%-10% 
Light rare earth s  Mineral dressing  7%-12% 
Medium and heavy rare earth s  Mineral dressing  20% 
Beryllium, lithium, zirconium, strontium, 
rubidium, caesium, niobium, tantalum, 
germanium, gallium, indium, thallium, 
hafnium, rhenium, cadmium, selenium, 
tellurium  Raw ore or 
mineral dressing  2%-10% 
Non-metallic 
minerals  Minerals  Kaolin  Raw ore or 
mineral dressing  1%-6% 
Limestone  Raw ore or 
mineral dressing  1%-6% or 
CNY 1-CNY 10 
per tonne (or 
per cubic 
metre)  
Phosphorus  Raw ore or 
mineral dressing  3%-8% 
Graphite  Raw ore or 
mineral dressing  3%-12% 
Fluorite, pyrite, natural sulphur  Raw ore or 
mineral dressing  1%-8% 
Natural quartz sand, vein quartz, powder 
quartz, crystal, industrial diamond, Iceland 
stone, kyanite, sillimanite (sillimanite), 
feldspar, talc, corundum, magnesite, pigment 
minerals, trona, Glauber's salt, sodium 
saltpetre, alunite, arsenic, boron, iodine , 
bromine, bentonite, diatomaceous earth, 
ceramic clay, refractory clay, bauxite, 
attapulgite clay, sepiolite clay, illite clay, 
rectorite clay  Raw ore or 
mineral dressing  1%-12% 
Pyrophyllite, wollastonite, diopside, perlite, 
mica, zeolite, barite, toxoid, calcite, 
vermiculite, tremolite, industrial tourmaline, 
chalk, asbestos, blue asbestos, andalusite, 
garnet, gypsum  Raw ore or 
mineral dressing  2%-12% 
Other clays (casting clay, brick clay, 
ceramsite  clay, cement batching clay, cement 
batching red clay, cement batching loess, 
cement batching mudstone, clay for 
insulation materials)  Raw ore or 
mineral dressing  1%-5% or 
CNY 0.1-CNY 5 
per tonne (or 
per cubic 
metre)  
Stones  Marble, granite, dolomite, quartzite, 
sandstone, diabase, andesite, diorite, slate, 
basalt, gneiss, amphibolite, shale, pumice, 
tuff, obsidian, nepheline, feldspar, 
serpentinite, medical stone, marl, potassium -
bearing rock, potassium -bearing sand shale, 
natural oilstone, p eridotite, turpentine, 
trachyte, gabbro, pyroxenite, syenite, 
volcanic ash, volcanic slag, peat  Raw ore or 
mineral dressing  1%-10% WT/TPR/S/ 415 • China  
 
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  Tariff lines  Tariff objects  Tariff rates  
Gravel  Raw ore or 
mineral dressing  1%-5% or 
CNY 0.1-CNY 5 
per tonne (or 
per cubic 
metre)  
Precious 
stones  Gem, jade, gem-grade diamond, agate, 
topaz, tourmaline  Raw ore or 
mineral dressing  4%-20% 
Water and 
gas minerals  Carbon dioxide, hydrogen sulphide, helium, radon  Raw ore  2%-5% 
Mineral water  Raw ore  1%-20% or 
CNY 1-CNY 30 
per cubic 
metre  
Salts Sodium salt, potassium salt, magnesium salt, lithium salt  Mineral dressing  3%-15% 
Natural brines  Raw ore  3%-15% or 
CNY 1-CNY 10 
per tonne (or 
per cubic 
metre)  
Sea salt   2%-5% 
Source:  Information provided by the authorities.  
  WT/TPR/S/ 415 • China  
 
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  Table A4. 4 Tariff lines and tariff rate range before the implementation of the Resource 
Tax Law  
No. Tariff lines  Tariff object  Tariff rate range  
1 Crude oil, natural gas  Raw ore  6% 
2 Coal Raw ore  2%-10% 
3 Metallic ores  Iron ore  Mineral concentrate  1%-6% 
4 Gold ore  Gold ingots  1%-4% 
5 Cooper ore  Mineral concentrate  2%-8% 
6 Bauxite  Raw ore  3%-9% 
7 Lead-zinc ore  Mineral concentrate  2%-6% 
8 Nickel ore  Mineral concentrate  2%-6% 
9 Tin ore  Mineral concentrate  2%-6% 
10 Tungsten ore  Mineral concentrate  6.5%  
11 Molybdenum ore  Mineral concentrate  11% 
12 Light rare earth s Mineral concentrate  11.5%, 9.5%, 7.5%. 
Applicable tariff rates 
are different among 
regions in China. For 
example, 11.5% in 
Inner Mongolia, 9.5% in 
Sichuan, and 7.5% in 
Shandong.  
13 Medium and heavy rare 
earth s Mineral concentrate  27% 
14 Other metallic ore 
products not elsewhere 
classified  Raw ore or mineral 
concentrate  No more than 20%  
15 Non-metallic 
ores Graphite  Mineral concentrate  3%-10% 
16 Diatomite  Mineral concentrate  1%-6% 
17 Kaolin  Raw ore  1%-6% 
18 Fluorite  Mineral concentrate  1%-6% 
19 Limestone  Raw ore  1%-6% 
20 Pyrite ore  Mineral concentrate  1%-6% 
21 Phosphate ore  Raw ore  3%-8% 
22 Potassium chloride  Mineral concentrate  3%-8% 
23 Potassium sulphate  Mineral concentrate  6%-12% 
24 Well salt  Sodium chloride 
primary products  1%-6% 
25 Lake salt  Sodium chloride 
primary products  1%-6% 
26 Salt extracted from 
underground brines  Sodium chloride 
primary products  3%-15% 
27 Coal seam (formed) gas  Raw ore  1%-2% 
28 Clay, gravel  Raw ore  CNY 0.1-5 per tonne or 
cubic metre  
29 Other non -metallic ore 
products not elsewhere 
classified  Raw ore or mineral 
concentrate  No more than CNY  30 
per tonne or cubic 
metre for specific tariff 
rate; no more than 
20% for ad valorem  
tariff rate  
30 Sea salt  Sodium chloride 
primary products  1%-5% 
Source:  Information provided by the authorities.  
__________  
 