Is China's subsidy policy in line with the provisions of WTO?

Is China's subsidy policy in line with the provisions of WTO?

The Information Office of the State Council held a press conference on Tuesday, September 25, 2008, at 10 a.m. in the press release Hall of the Information Office of the State Council, inviting Fu Ziying, Deputy Minister and negotiator for international trade of the Ministry of Commerce, Vice Minister of Commerce and deputy representative of international trade negotiations, Wang Ziwen, Deputy deputy of the State Development and Reform Commission Director Lian Weiliang, Vice Minister of Industry and Information Technology Luo Wen, Vice Minister of Finance Zou Jiayi, Deputy Director-General of the State Intellectual Property Office He Hua and Deputy Director of the Information Office of the State Council Guo Weimin, spokesman, attended the presentation and interpretation of the White Paper on the Facts of Sino-US Economic and Trade Frictions and China's Position and answered reporters Ask.

Hongkong Dagong Wenhui media reporter:

Does China's subsidy policy comply with the relevant provisions of WTO? Will unfair competition be created? Thank you.

Zou Jiayi:

Thank you for your question. In the market economy, subsidy is a policy tool used by the government to deal with market failure and correct the imbalance of development. Such a policy tool is widely used in the world, including China and the United States. But the subsidy must follow certain rules. China is a member of the WTO. Our subsidy policy strictly abides by WTO rules. The WTO divides subsidies into three categories. The first category is prohibitive subsidies, mainly pointing out import subsidies and import substitution subsidies. The second kind is litigious subsidies, that is to say, it may cause certain distortions and unfairness to international trade, and may damage the interests of member states. Member states can resort to WTO dispute settlement mechanism subsidies. The third category is non-litigation subsidy, mainly refers to the subsidy which will not cause social distortions and trade inequities, mainly used to support research and development, support the backward areas of the country and support enterprises to achieve new and higher standards of ecological environment protection and so on.

Since China's accession to the WTO, China has been actively promoting the reform of domestic policy compliance. Our current subsidy policy is mainly based on non-litigious subsidies, supplemented by litigious subsidies. We have completely abolished prohibitive subsidies. At the same time, we have earnestly fulfilled the WTO Agreement on Subsidies and Countervailing Measures, which stipulates some obligations. For example, according to the WTO's transparency principle on subsidies, China strictly follows the requirements to regularly inform the WTO of the revision, adjustment and implementation of relevant laws, regulations and specific measures, since our accession to the WTO. Up to now, we have submitted thousands of notifications to the WTO. The most recent one was in July this year. We submitted to the WTO a circular on the central and local subsidy policies for the period 2015-2016, covering all provincial administrative regions for the first time.

Of course, I do not mean that our present policy is perfect. As a developing country, our subsidy policy has been constantly reformed and improved, and is still being reformed and perfected, and further reform and improvement will be needed in the future. The overall direction is: our subsidy policy should be mainly non-litigious subsidies, with the least possible use of litigious subsidies. I can cite two examples, for example, in the area of agricultural subsidies, we used to have "yellow box" subsidies, such as direct subsidies for grain farmers, comprehensive subsidies for agricultural production, and subsidies for improved varieties of crops. These three subsidies belong to "yellow box" subsidies and actionable subsidies. Now we have cancelled these three subsidies to support cultivated land instead. To protect the agricultural environment and promote sustainable development, some subsidies are "green box" subsidies. In the previous paragraph, we carried out capacity removal, in order to support enterprises to capacity removal, we set up a special award and subsidy fund for industrial enterprise restructuring, focusing on resolving excess capacity among the unemployed diversion placement and skills training, in these areas to provide support to enterprises, which is also an indictable subsidy.

Generally speaking, China has strictly abided by its commitments to the WTO. Our subsidy has not exceeded the scope permitted by the WTO in terms of both the level and manner of subsidy, and has not caused market distortions and unfair competition. But in practice, if some places have adopted some prohibitive subsidies, once found, we will resolutely correct. Thank you.

Editor in chief: Gui Qiang

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