Foreign Trade

in China

China entry to WTO

Chinas entry into the WTO set in motion the most far-reaching
reforms since Beijing since 1978.
Over 1100 laws and regulations have been changed since 2001
China can not impose one level of barriers (e.g., tariffs) against one
member country and another level for others
China will participate in the WTO's dispute settlement system
Manufactured goods saw the largest decrease in tariffs.

 Tariffs were eliminated on computers, semiconductors and other

information technology products in compliance with the Information
Technology Agreement
In agriculture, it has pledged to bind all tariffs and reduce them from
an average level of 31.5 percent to 17.4 percent
Foreign car makers will be able to distribute and retail vehicles on
their own, and provide financing to buyers.

Application of Import Tarif

The Various Import Tarifs Imposed are :
Ad Valorem Duty
Specific Duty apply to beer made of malt, crude petroleum oil,
phototypesetting films
Compound Duty apply to video tape recorders, videotape
reproducers, television cameras and camera with digital image
storage
Selective Duty apply to natural rubber only

Ad Valorem Duty
General Tariff Rate apply to goods imported from and produced in
countries and regions with which China has concluded no agreements
for reciprocal tariff preferences
MFN Rate apply to goods from WTO members and other countries
and regions which have preferential agreements with China
The Agreement Rate apply to goods imported or produced or
manufactured in the countries and regions which join together with
China into regional trade agreements for tariff preferences
The agreement tariff rate are currently applicable to the imported
goods from Korea, Sri Lanka, based on Bangkok Agreement, and
Pakistan, Chile based on the relevant agreement with China, goods
from ASEAN members, based on the arrangement of CAFTA.
The Special Tariff Rate apply to goods from countries and regions
that have special tariff preferences with China. Currently applicable to
imported goods from 39 countries, including Cambodia, Burma,
Laos ,Bangladesh and other least developed Africa countries. Zero

rate for goods from Hong Kong and Macao based on CEPA Closer
Economic Partnership Arrangement with Hong Kong and Macao.

Dumping Policy
According to the rules of the WTO: a product is to be considered as
being dumped, i. e. introduced into the commerce of another country
at less than the Normal Value
While all the above rules are only suitable to those so-called market
economy members. However, according to (ii) (a) Article 15 of the
Protocol on the accession of China to the WTO therefore, there were
many cases ,a third substitution country was used to calculate the
cost of Chinese products.
Some of the examples of the ridiculous anti-dumping duties to
Chinese products:
Mexico Chinese Shoes 1004%
Peru
Chinese Shoes
903.92%
Brazil
Chinese Locks
760%
Mexico Chinese Pencils 451%

Subsidies
Subsidies is a sum of money granted by the state or a public body to help
an industry or business keep the price of a commodity or service low. China
has agreed to certain subsidy rules, including rules applicable to stateowned enterprises. Specifically, where government benefits are provided
to an industry sector and state-owned enterprises are the predominant
recipients or receive a disproportionate share of those benefits
The following products which have huge subsidies in china.
Grain
Vegetable Oil

Sugar
Tobacco
Crude Oil / Processed Oil
Chemical Fertilizer
Cotton
Tea
Rice / Corn / Soy Bean
Tungsten Ore / Ammonium Paratungstates / Tungstate Products
Local Content Requirement
When a foreign company makes products in a country, the materials,
parts etc that have been made in that country rather than imported.
A minimum level of local content is sometimes a requirement under
trade laws when giving foreign companies the right to manufacture in
a particular place.
Under the WTO TRIMS Agreement, China is obliged to eliminate a
range of restrictions on international trade and investment, including
local content requirements, regardless of whether they are contained
in national or local legislation. The TRIMS Agreement also prohibits
the Chinese government from enforcing existing contractual
agreements that contain local content requirements.
The Secret 60, Rule
While there doesn't appear to be any explicit local content
requirements in any published national or local Chinese regulations,
there is the possibility that these may exist in neibu, or internally
circulated administrative directives. Recent comments made by
officials at the Ministry of Information Industry suggest that this may
be the use. One official stated that manufacturers in the People's
Republic of China were required to include at least 60% local content
in their finished products. The official, however, could not cite any
existing local or national regulations where this obligation was set out.
Making a Commitment to Use Local Content
Another source of local content requirements can be found in the
documents prepared by foreign investors in order to form a FIE in
China. During the establishment process, Chinese officials insist that
the feasibility study reports prepared by applicants include the stated
intention of utilizing locally produced parts and components within

their future manufacturing operations. It is also not unusual for

foreign investors to be obliged to reiterate this commitment in the FIE
% joint venture contract or articles of association. In circumstances
where foreign investors are in an unfavorable bargaining position with
the approval authorities during the establishment period, these
commitments can be quite extensive. Foreign investors may be
willing to concede more to the approval authorities in industries
where the number of foreign players is tightly controlled, such as
mobile phones manufacturing.