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The United States has acknowledged China's achievements in implementing its commitment to the World Trade Organization (WTO), according to the latest report published by the United States Trade Representative (USTR).
"China has taken important steps in implementing the numerous commitments that it undertook upon its WTO accession on December 11, 2001," the report said.
The report is the fourth annual one that the USTR has published to report to US Congress on China's practices to meet its commitments to the WTO.
It covers nine broad categories of WTO commitments undertaken by China.
It said China has eliminated some trade barriers and has started to even out unequal treatment. Additionally, it has further opened the service market and strengthened the liberalization of bilateral and multilateral trade since it entered the WTO.
With regard to the IPR (intellectual property right) issue, which remains the top concern of the US Government, the report said that China has made significant efforts to implement its commitments to establish a legal framework to ensure the protection of IPR in accordance with the WTO's Agreement on Trade-Related Aspects of Intellectual Property Rights.
"China has done a relatively good job of overhauling the legal regime," the report commented.
However, the USTR stressed that China should further strengthen the enforcement of its laws and regulations.
The report added that the Sino-US Joint Commission on Commerce and Trade meeting held in July this year achieved some progress on a range of trade-related issues.
(China Daily December 15, 2005)
Tuesday, April 13, 2010
China Has Embraced World Since WTO Entry
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By Wei Ling
Affordable luxury was probably the first benefit most Chinese imagined they would enjoy when the country joined the World Trade Organization (WTO) four years ago.
But there are many other positive changes that have taken place since China joined the global trading club.
There is a great choice of services, more job opportunities and a greater desire to learn English.
WTO membership has brought cheaper, diversified foreign products to supermarkets, improvements in the services offered by banks, and chances to attend all sorts of training courses with a view to securing better positions with different employers.
But when we review the changes that have taken place in China since 2001, we have to say the impact of the WTO on Chinese people reaches far beyond mere material comfort.
An even more profound change has taken place in many people's mindset, no matter whether they are civil servants, the employees of businesses or farmers.
New concepts such as market economy, fair competition, transparency, win-win, the rule of law and international practice are no longer just buzzwords, but have seeped into everyday thinking and become part of daily life.
The broader opening up has widened horizons, ushered in social changes, enriched knowledge about international practices, and increased eagerness for integration in the world arena. Many have abandoned old ideas and working habits formed under the rigid planned economy.
What is really behind these changes is the transformation of the whole country from an inward-looking, planned economy to a more market-oriented powerhouse, and the reform of domestic enterprises that are adopting modern management systems.
The past four years have witnessed China's integration with the world economy in which China has become a fully-fledged player.
At home, laws and regulations have been revised so as to gradually open the market to foreign companies according to its commitments.
China has become a critical part of the global economy, contributing 12 percent to world trade growth and 10 percent to world economic growth last year.
Over the four years, China has attracted investment from the world's major multinationals, grown into a dominant manufacturer of goods, and become the third largest trader with foreign trade topping US$1.1 trillion last year.
For domestic enterprises, the impact of WTO membership is even more obvious. One needs only to observe how hot competition is in some sectors such as retailing, insurance and banking.
Pressure imposed by the market entry of multinationals has triggered sweeping reforms among domestic enterprises.
To narrow the gap with foreign rivals, they are striving to become modern enterprises applying advanced management and marketing skills.
The wider access to the world market has also encouraged a global perspective among enterprises when positioning themselves and their products in the market.
Reforms, as well as changes in overall economic performance, have inevitably influenced individuals.
More and more people have realized that China's integration with the world economy is an irreversible trend, and have been preparing in different ways.
To play the WTO game, firms have to learn international rules, refresh their ideas and abide by the new regulations.
In addition to its role as an administrator of society, the government has been striving to provide more services for the market economy making efforts to increase awareness of good service, fairness and efficiency among civil servants.
WTO protocols on transparency, and in particular WTO supervision of government performance, have put government departments under more pressure to deliver, leading to changes in their working style.
That explains government departments' simplified procedures and improved efficiency and more smiling civil servants.
Market-oriented reforms at domestic enterprises have also catalyzed changes in ideas and activities among employees. Fearing they may lose their jobs, many workers have been striving to improve their efficiency, acquire new skills and provide better services to make themselves, as well as their companies, more competitive.
In the past, a job at one of China's "big four" banks was described as a golden bowl meaning a high salary, rights to grant loans, a light workload and almost no chance of being laid-off.
But staff are facing tough times as banks launch massive market-oriented reform programmes in preparation for competition when China fully opens its banking sector in 2006.
An important part of reform is setting higher standards for business performance and service provision. To meet the new challenges, staff have to embrace concepts such as good service and efficiency, and improve their working habits.
WTO commitments have facilitated increased competition in many other industries, which in turn has motivated individuals to try to adapt to the new environment.
Another change in mindset is the increasing awareness of rights.
With China implementing its WTO commitments to foster the highest degree of transparency possible and the rule of law throughout society, citizens have learned to ask for better government services, to be treated equally, and call for greater government efforts to implement international rules and practices. That was rarely seen before 2001.
This process is not a flash in the pan. Only when new ideas, rules and practices are embodied in the actions of everyone in society will we really be able to claim that we are fully integrated with the world.
(China Daily December 13, 2005)
US Firms Benefit from China in WTO
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US businesses have benefited from China's entry into the World Trade Organization (WTO), says a report released by the US-China Business Council.
"The accession agreement has introduced significant market openings in China and, as a result, US companies enjoy far greater market access than they did five years ago," according to the report, which is an assessment of China's fourth year of WTO membership.
China has cut import tariffs by nearly 40 per cent, virtually eliminated import licenses and quotas and relaxed ownership restrictions on American businesses operating in China.
It has also allowed American companies to participate in many sectors in which they were previously prohibited, the report says.
Statistics from the US-China Business Council indicate that US exports increased by 81 per cent in the three full years since China entered the WTO on December 11, 2001, compared with 34 per cent growth in the three years prior to the accession.
Over the last five years, US exports to China have more than doubled, and grown five times faster than exports to Belgium, the second-fastest-growing export market of the United States, the statistics show.
The Chinese mainland and Hong Kong passed Japan to become the third-largest export market of the United States, following Canada and Mexico.
In the first half of this year, China's overall imports have slowed down. US exports to China have increased by only 10 per cent compared with the same period last year.
China has generally continued to make progress in its WTO implementation efforts this year, the report says.
In a survey of the council's member companies conducted this year, 75 per cent of respondents indicated that they viewed China's WTO entry as important to their companies' operations and objectives, and cited tariff reductions as the most significant commitment China has made to date.
China has also made notable strides in strengthening its economy and improving its legal environment, both of which give council members hope that China's market will continue to move towards the certainty and predictability that they expect from healthy and competitive economies, the report says.
But the report also says that the service sector, where US companies have strong competitive advantages, has not significantly opened.
(China Daily September 16, 2005)
US businesses have benefited from China's entry into the World Trade Organization (WTO), says a report released by the US-China Business Council.
"The accession agreement has introduced significant market openings in China and, as a result, US companies enjoy far greater market access than they did five years ago," according to the report, which is an assessment of China's fourth year of WTO membership.
China has cut import tariffs by nearly 40 per cent, virtually eliminated import licenses and quotas and relaxed ownership restrictions on American businesses operating in China.
It has also allowed American companies to participate in many sectors in which they were previously prohibited, the report says.
Statistics from the US-China Business Council indicate that US exports increased by 81 per cent in the three full years since China entered the WTO on December 11, 2001, compared with 34 per cent growth in the three years prior to the accession.
Over the last five years, US exports to China have more than doubled, and grown five times faster than exports to Belgium, the second-fastest-growing export market of the United States, the statistics show.
The Chinese mainland and Hong Kong passed Japan to become the third-largest export market of the United States, following Canada and Mexico.
In the first half of this year, China's overall imports have slowed down. US exports to China have increased by only 10 per cent compared with the same period last year.
China has generally continued to make progress in its WTO implementation efforts this year, the report says.
In a survey of the council's member companies conducted this year, 75 per cent of respondents indicated that they viewed China's WTO entry as important to their companies' operations and objectives, and cited tariff reductions as the most significant commitment China has made to date.
China has also made notable strides in strengthening its economy and improving its legal environment, both of which give council members hope that China's market will continue to move towards the certainty and predictability that they expect from healthy and competitive economies, the report says.
But the report also says that the service sector, where US companies have strong competitive advantages, has not significantly opened.
(China Daily September 16, 2005)
Overseas Retailers Rushing in
Overseas retailers have been "very active" this year after China abolished restrictions in the sector according to commitments to the WTO (World Trade Organization), a senior government official said yesterday.
In the first half of this year, the Ministry of Commerce approved 245 overseas-invested commercial enterprises, six times the number of companies approved last year.
There were 314 overseas-invested commercial enterprises in China at the end of last year, with 3,997 outlets and 9.2 million square metres of business area.
However, foreign-invested firms account for only 3 per cent of the total revenues in the sector.
The cities with the most overseas capital are Shanghai (12.9 per cent), Beijing (8.1 per cent), Xiamen (7.9 per cent), Dalian (7.8 per cent) and Qingdao (7.6 per cent).
China's retail sector has grown 34 times since 1978, said Huang Hai, assistant minister of commerce, adding that there were 55,000 large-scale retail outlets throughout the country at the end of last year, up by 18 per cent year-on-year.
Huang was speaking at opening of the 12th Asian Retailers Convention & Exhibition (ARCE) in Beijing.
Last year's revenues increased by 30.2 per cent year-on-year, hitting 5.4 trillion yuan (US$665.84 billion). The figure is expected to exceed 6 trillion yuan (US$739.83 billion) this year.
Huang said China expects to maintain an annual growth rate of 11 per cent in the coming few years; and forecast that revenues will reach 10 trillion yuan (US$1.23 trillion) by 2010.
He said that there will be more legislation to improve the investment environment for overseas capital.
"We will also complete the planning of retail networks in cities to provide for healthy competition," Huang added.
The government will push forward with the restructuring of domestic retail enterprises to strengthen their core competence, and encourage successful ones to go abroad, he said.
The convention, with the theme "Innovation and Cooperation" has attracted 1,500 overseas delegates and 2,500 domestic enterprises.
Dozens of experts, retail managers, scholars and government officials will make presentations on issues like developing strategies, new ideas in retail management, use of advanced and high technology and strategic co-operation between retailers and suppliers.
A retail exhibition will also be held as part of the event. Retailers, suppliers, financial institutions, IT firms and other enterprises will demonstrate their products, services and solutions at the 35,000-square-metre exhibition area.
(China Daily September 7, 2005)
Software Industry in Line with WTO
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To meet the requirements of the World Trade Organization (WTO), the government is pushing ahead with policies encouraging the development of the software industry, a senior official from the Ministry of Information Industry said.
"We should do the planning for the development of the software industry in the 11th Five Year Plan (2006-10) well and actively push the legislation of the State Council's circulars 18 and 47 into laws or regulations to meet the rules of the WTO," said Lou Qinjian, vice-minister of the information industry, at the opening of the ninth China International Software Exhibition.
The State Council released Circular 18 in August 2000, which encourages the development of software and integrated circuit (IC) industries through government funds, procurements, financing, engineer training and tax rebates.
It sets a value-added tax rate of 17 percent for software and IC companies, compared to 33 percent for most other industries, but software and IC companies can also get the extra taxes back, if their actual value-added tax burden exceeds 3 percent.
They can also get reductions or exemptions from income taxes and import taxes for major equipment.
However, tax rebates for the IC industry provoked complaints from the United States, European Union and Japan, which claim they run contrary to WTO rules and are unfair to foreign companies.
After rounds of negotiations, the government decided to cancel the tax preference for the IC industry from April, although full tax rebates on exports still stand.
Circular 47 from the State Council, released in July 2002, outlined goals and policies for the development of the software industry.
The sector, which has limited exports and accounts for just 3 percent of the global total, has not been complained about by other countries, but the government nevertheless has decided to revise its approach under WTO principles.
The two circulars, especially No 18, have played a significant role in the development of the domestic software industry.
Zhang Qi, director-general of the department of electronics and information products under the MII and a strong supporter of the development of the domestic software industry, said software companies had received 12 billion yuan (US$1.45 billion) in value-added tax rebates by the end of 2004.
Although that is still a small amount, the policy has largely stimulated the enthusiasm of software companies.
Industry revenue in 1999 was just 44 billion yuan (US$5.31 billion), but this has risen to 230 billion yuan (US$27.78 billion).
The number of software companies with revenues of more than 100 million yuan (US$12 million) surged from 38 in 1999 to 214 last year.
Possible policy changes will not harm software developers, but will support them within the framework of the WTO.
Lou said his ministry will continue to improve the legal environment for the development of the software industry, including rules helping software companies with financing, government funding for research and development, as well as more aggressive strikes against piracy.
The government will continue to stress the use of legal products in government agencies and commercial organizations.
Zhang said provincial government departments procured 112,000 copies of operating systems and 180,000 copies of office software last year.
Lou also urged big companies to take the initiative in developing domestic software standards and actively participating in international standardization drives.
Chinese software companies are already quite strong in Linux operating systems, office software and information security software, and some alliances have been formed by leading software companies, trying to build open standards for the industry.
A Changfeng Open Standard Platform Software Alliance was formed in April in Beijing to promote the development of Linux-based software.
Another China Open Source Software Promotion Alliance was cemented in July 2004, with the aim of developing a domestic standard for Linux software, to link different versions of software on the market, as well as to co-operate with Japan and South Korea in regional standards.
(China Daily June 15, 2005)
To meet the requirements of the World Trade Organization (WTO), the government is pushing ahead with policies encouraging the development of the software industry, a senior official from the Ministry of Information Industry said.
"We should do the planning for the development of the software industry in the 11th Five Year Plan (2006-10) well and actively push the legislation of the State Council's circulars 18 and 47 into laws or regulations to meet the rules of the WTO," said Lou Qinjian, vice-minister of the information industry, at the opening of the ninth China International Software Exhibition.
The State Council released Circular 18 in August 2000, which encourages the development of software and integrated circuit (IC) industries through government funds, procurements, financing, engineer training and tax rebates.
It sets a value-added tax rate of 17 percent for software and IC companies, compared to 33 percent for most other industries, but software and IC companies can also get the extra taxes back, if their actual value-added tax burden exceeds 3 percent.
They can also get reductions or exemptions from income taxes and import taxes for major equipment.
However, tax rebates for the IC industry provoked complaints from the United States, European Union and Japan, which claim they run contrary to WTO rules and are unfair to foreign companies.
After rounds of negotiations, the government decided to cancel the tax preference for the IC industry from April, although full tax rebates on exports still stand.
Circular 47 from the State Council, released in July 2002, outlined goals and policies for the development of the software industry.
The sector, which has limited exports and accounts for just 3 percent of the global total, has not been complained about by other countries, but the government nevertheless has decided to revise its approach under WTO principles.
The two circulars, especially No 18, have played a significant role in the development of the domestic software industry.
Zhang Qi, director-general of the department of electronics and information products under the MII and a strong supporter of the development of the domestic software industry, said software companies had received 12 billion yuan (US$1.45 billion) in value-added tax rebates by the end of 2004.
Although that is still a small amount, the policy has largely stimulated the enthusiasm of software companies.
Industry revenue in 1999 was just 44 billion yuan (US$5.31 billion), but this has risen to 230 billion yuan (US$27.78 billion).
The number of software companies with revenues of more than 100 million yuan (US$12 million) surged from 38 in 1999 to 214 last year.
Possible policy changes will not harm software developers, but will support them within the framework of the WTO.
Lou said his ministry will continue to improve the legal environment for the development of the software industry, including rules helping software companies with financing, government funding for research and development, as well as more aggressive strikes against piracy.
The government will continue to stress the use of legal products in government agencies and commercial organizations.
Zhang said provincial government departments procured 112,000 copies of operating systems and 180,000 copies of office software last year.
Lou also urged big companies to take the initiative in developing domestic software standards and actively participating in international standardization drives.
Chinese software companies are already quite strong in Linux operating systems, office software and information security software, and some alliances have been formed by leading software companies, trying to build open standards for the industry.
A Changfeng Open Standard Platform Software Alliance was formed in April in Beijing to promote the development of Linux-based software.
Another China Open Source Software Promotion Alliance was cemented in July 2004, with the aim of developing a domestic standard for Linux software, to link different versions of software on the market, as well as to co-operate with Japan and South Korea in regional standards.
(China Daily June 15, 2005)
WTO Entry: Little Impact on Security of Domestic Business
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Vice Minister of Commerce Gao Hucheng said Thursday China's entry into the World Trade Organization (WTO) three and a half years ago has brought little shock to domestic business.
Gao made the remark at a national working conference on industry security.
The growth of those industries enjoying comparative advantages has been accelerating, while weaker industries have not been affected greatly, he said.
During the past three and a half years, he acknowledged, China has rectified relevant laws and provisions and enacted new laws to meet the WTO commitments.
China has utilized all kinds of legal means to safeguard the security of domestic business during this period. It has launched 25 anti-dumping investigations and one safeguard investigation, he said.
Thanks to the optimized domestic industry structure, China's foreign trade volume has ranked third in the world after the United States and Germany, exceeding that of Japan, statistics show.
Gao noted that one reason Chinese industries have not been shocked by the WTO accession is that many industries are still in the WTO transition period, which protects them from possible impact of foreign competitors.
With the ending of the WTO transition period, domestic industries will face even tougher challenges and greater pressures, Gao said.
(Xinhua News Agency June 3, 2005)
Vice Minister of Commerce Gao Hucheng said Thursday China's entry into the World Trade Organization (WTO) three and a half years ago has brought little shock to domestic business.
Gao made the remark at a national working conference on industry security.
The growth of those industries enjoying comparative advantages has been accelerating, while weaker industries have not been affected greatly, he said.
During the past three and a half years, he acknowledged, China has rectified relevant laws and provisions and enacted new laws to meet the WTO commitments.
China has utilized all kinds of legal means to safeguard the security of domestic business during this period. It has launched 25 anti-dumping investigations and one safeguard investigation, he said.
Thanks to the optimized domestic industry structure, China's foreign trade volume has ranked third in the world after the United States and Germany, exceeding that of Japan, statistics show.
Gao noted that one reason Chinese industries have not been shocked by the WTO accession is that many industries are still in the WTO transition period, which protects them from possible impact of foreign competitors.
With the ending of the WTO transition period, domestic industries will face even tougher challenges and greater pressures, Gao said.
(Xinhua News Agency June 3, 2005)
Insurance Market to Keep WTO Promise
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China will continue to open up its insurance market in line with its World Trade Organization (WTO) commitments, a top regulator said Monday.
According to Wu Dingfu, chairman of the China Insurance Regulatory Commission (CIRC), the local insurance industry has already benefited from foreign expertise and know-how.
"Foreign insurance companies' management methodologies, know-how, and products have undoubtedly given a lift to the Chinese insurance industry, which is still in an early development phase," he said.
"At the same time, foreign insurers themselves have witnessed fairly good development," he told reporters at the CIRC-sponsored China International Insurance Forum.
"Although the opening up of the insurance sector under the WTO commitments has been fairly broad, insurance appears to be among the sectors that has benefited (from the opening up)," he added.
China lifted nearly all geographic and business scope restrictions on foreign insurers near the end of last year, basically fulfilling commitments made more than three years ago upon entry into the WTO.
CIRC officials said negotiations are under way on the removal of remaining restrictions on foreign insurers, including the right to offer motor vehicle third party liability insurance and set up wholly owned foreign life insurance businesses.
Thirty seven foreign insurers have entered the hugely promising Chinese market, which has averaged 30 percent annual growth over more than than 20 years. Although they hold a less than 3 percent market share, foreign insurers' growth has been accelerating in recent years, particularly in relatively wealthy coastal areas such as Shanghai.
But regulators do not appear to be worried about the rapid growth of foreign insurers, which some analysts predict could, on the back of years of preparation and the newly-obtained freedom, grab as much as a 10 percent market share in the coming five years.
In response to a question of whether he sees any excessive competition between foreign and local insurers in the coastal areas and any need to protect the mostly weaker local players, Wu said: "We will stand by the principle of fair competition.
"We believe that we must open up if we want to grow. We don't protect the laggards."
In an effort to promote co-operation with foreign insurance firms, the CIRC invited regulators and companies from more than 40 countries and regions to yesterday's forum to exchange experience on issues such as how to promote health, liability, agricultural and pension insurance.
But Wu said over-concentration of insurers in coastal cities will not benefit the growth of the industry, adding that his commission will encourage foreign insurers to invest in the less-developed central and western parts of the country.
Some foreign insurers are already making headway in the west, which is a natural result of the fierce competition in cities like Shanghai, he said.
"The market mechanisms are already prompting some adjustments," Wu said. "And we will be quicker with approvals (for investment) in the west. The favorable treatments from local governments will also be attractive."
On a related front, Meng Zhaoyi, director of the CIRC's International Department, said that while most foreign insurers complied with Chinese laws and regulations, there were also irregularities that have alerted regulators.
"Compliance of foreign insurance companies is generally good, as most of them abide by Chinese laws in their operations," Meng told China Daily. "But there are problems with some of them."
Some foreign insurers operating in China were found helping their overseas sibling firms sell policies on the Chinese mainland, which is illegal and disturbs order in the local market.
Foreign insurers were also found selling policies without having obtained a licence to do so, Meng said.
(China Daily May 24, 2005)
China will continue to open up its insurance market in line with its World Trade Organization (WTO) commitments, a top regulator said Monday.
According to Wu Dingfu, chairman of the China Insurance Regulatory Commission (CIRC), the local insurance industry has already benefited from foreign expertise and know-how.
"Foreign insurance companies' management methodologies, know-how, and products have undoubtedly given a lift to the Chinese insurance industry, which is still in an early development phase," he said.
"At the same time, foreign insurers themselves have witnessed fairly good development," he told reporters at the CIRC-sponsored China International Insurance Forum.
"Although the opening up of the insurance sector under the WTO commitments has been fairly broad, insurance appears to be among the sectors that has benefited (from the opening up)," he added.
China lifted nearly all geographic and business scope restrictions on foreign insurers near the end of last year, basically fulfilling commitments made more than three years ago upon entry into the WTO.
CIRC officials said negotiations are under way on the removal of remaining restrictions on foreign insurers, including the right to offer motor vehicle third party liability insurance and set up wholly owned foreign life insurance businesses.
Thirty seven foreign insurers have entered the hugely promising Chinese market, which has averaged 30 percent annual growth over more than than 20 years. Although they hold a less than 3 percent market share, foreign insurers' growth has been accelerating in recent years, particularly in relatively wealthy coastal areas such as Shanghai.
But regulators do not appear to be worried about the rapid growth of foreign insurers, which some analysts predict could, on the back of years of preparation and the newly-obtained freedom, grab as much as a 10 percent market share in the coming five years.
In response to a question of whether he sees any excessive competition between foreign and local insurers in the coastal areas and any need to protect the mostly weaker local players, Wu said: "We will stand by the principle of fair competition.
"We believe that we must open up if we want to grow. We don't protect the laggards."
In an effort to promote co-operation with foreign insurance firms, the CIRC invited regulators and companies from more than 40 countries and regions to yesterday's forum to exchange experience on issues such as how to promote health, liability, agricultural and pension insurance.
But Wu said over-concentration of insurers in coastal cities will not benefit the growth of the industry, adding that his commission will encourage foreign insurers to invest in the less-developed central and western parts of the country.
Some foreign insurers are already making headway in the west, which is a natural result of the fierce competition in cities like Shanghai, he said.
"The market mechanisms are already prompting some adjustments," Wu said. "And we will be quicker with approvals (for investment) in the west. The favorable treatments from local governments will also be attractive."
On a related front, Meng Zhaoyi, director of the CIRC's International Department, said that while most foreign insurers complied with Chinese laws and regulations, there were also irregularities that have alerted regulators.
"Compliance of foreign insurance companies is generally good, as most of them abide by Chinese laws in their operations," Meng told China Daily. "But there are problems with some of them."
Some foreign insurers operating in China were found helping their overseas sibling firms sell policies on the Chinese mainland, which is illegal and disturbs order in the local market.
Foreign insurers were also found selling policies without having obtained a licence to do so, Meng said.
(China Daily May 24, 2005)
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