Re­form plans give US ‘ hope about trade’

China Daily (Hong Kong) - - BUSINESS - By HE WEI in Shang­hai hewei@chi­

Wash­ing­ton has new hopes for fairer trade since Bei­jing en­dorsed a “de­ci­sive role” for mar­ket forces, an an­nual re­port on China’s World Trade Or­ga­ni­za­tion prac­tices has sug­gested.

The United States is “en­cour­aged” by a num­ber of far-reach­ing eco­nomic re­form pro­nounce­ments drawn up at the Third Plenum of the 18th Cen­tral Com­mit­tee of the Com­mu­nist Party of China, ac­cord­ing to the 2013 Re­port to Congress on China’s WTO Com­pli­ance, which was re­leased on Tues­day.

The re­port is com­piled by the Of­fice of the US Trade Rep­re­sen­ta­tive.

The de­ci­sion pur­ports to present one of the largest and most am­bi­tious eco­nomic re­form pro­grams, and the US is “en­cour­aged by these broad pol­icy pro­nounce­ments and will closely mon­i­tor China’s im­ple­men­ta­tion mea­sures to deter­mine how and to what ex­tent China fol­lows through on them”, ac­cord­ing to the USTR re­port.

Among the big­gest draws are the broad­en­ing of for­eign in­vest­ment ac­cess in China, ex­plo­ration of the pos­si­bil­ity for na­tional treat­ment at all phases of in­vest­ment and the em­ploy­ment of a “neg­a­tive list” ap­proach in iden­ti­fy­ing ex­cep­tions.

The re­port rec­og­nized the many “im­pres­sive steps” China has taken to im­ple­ment its com­mit­ments fol­low­ing ac­ces­sion to the WTO in 2001.

No­table de­vel­op­ments this year to rein­vig­o­rate the mar­ket econ­omy in­cluded China’s readi­ness to fo­cus on a high-stan­dard bi­lat­eral in­vest­ment treaty with the US and the cre­ation of the China (Shang­hai) Pi­lot Free Trade Zone as a way to test the wa­ters of trade and in­vest­ment lib­er­al­iza­tion.

These ini­tia­tives, if real­ized, would pro­vide tremen­dous ben­e­fits not only to China but also to its trad­ing part­ners, in­clud­ing the US, the re­port said.

But it also called for eased mar­ket re­stric­tions on im­ported goods and for­eign sup­pli­ers, as well as a lift­ing of govern­ment sub­si­dies and to guid­ance that’s im­posed on State-owned en­ter­prises.

“China con­tin­ued to pur­sue in­dus­trial poli­cies in 2013 that seek to limit mar­ket ac­cess for im­ported goods, for­eign man­u­fac­tur­ers and for­eign ser­vice sup­pli­ers, while of­fer­ing sub­stan­tial govern­ment guid­ance, re­sources and reg­u­la­tory sup­port to Chi­nese in­dus­tries,” it said.

The USTR also called on Bei­jing to over­haul its le­gal struc­ture in or­der to bet­ter pro­tect in­tel­lec­tual prop­erty.

The re­port has aimed to act on be­half of US busi­nesses and serves as the “agenda-set­ter” in the China-US Strate­gic and Eco­nomic Di­a­logue, said Wu Xinbo, di­rec­tor of the Cen­ter for Amer­i­can Stud­ies at Fu­dan Univer­sity in Shang­hai.

Wu said the re­port pro­vides a com­pre­hen­sive and frank ret­ro­spect on China’s WTO com­pli­ance.

“The re­port is noth­ing but con­ven­tional rhetoric. The US is among the big­gest ben­e­fi­cia­ries of China’s WTO mem­ber­ship. So the ba­sic tone of the re­port is set to be pos­i­tive,” said Jin Can­rong, a Sino-US re­la­tions ex­pert at the Bei­jing-based Ren­min Univer­sity of China.

But the US is eye­ing fur­ther moves for bank­ing re­lax­ation to cash in on the lu­cra­tive fi­nan­cial seg­ment, so “it has to act tough on cer­tain fronts”, said Jin, re­fer­ring to the US’ con­sis­tent ap­peal for lower mar­ket thresh­old.

“Ex­port growth from the US to China has jumped sig­nif­i­cantly in the past few years, while Chi­nese in­vestors are step­ping up in­vest­ment across the US. That is to say, Amer­i­cans will in­creas­ingly value the Chi­nese mar­ket and ap­pre­ci­ate Chi­nese-led cap­i­tal,” Wu said.

The re­port came on the same day that China said it will rein­ves­ti­gate US poul­try prod­uct ship­ments for po­ten­tial vi­o­la­tions of trade terms, af­ter the WTO ruled against penal­ties that the govern­ment im­posed on im­ports.

Ac­cord­ing to a state­ment by the Min­istry of Com­merce, China will seek ev­i­dence that US white-feather poul­try prod­ucts were sub­si­dized and sold be­low cost.

Ear­lier this month, China filed a com­plaint un­der the WTO’s dis­pute set­tle­ment mech­a­nism over an­tidump­ing mea­sures by the US against 13 types of Chi­nese prod­ucts.

The US has so far brought 15 WTO cases against China since Bei­jing’s mem­ber­ship started in 2001, which is more than twice as many WTO cases as any other WTO mem­ber has brought against China.

The US al­le­ga­tions may have touched the core of China’s com­pli­ance prob­lems, which largely lie in the con­tra­dic­tion be­tween in­ter­na­tional rules and do­mes­tic laws, said Yao Weiqun, as­so­ci­ate pres­i­dent of the Shang­hai WTO Af­fairs Con­sul­ta­tion Cen­ter.

Yao said that a fur­ther push is needed to ac­cel­er­ate China’s open­ing up to for­eign goods and ser­vices, as well as to re­form State-owned en­ter­prises and im­prove the rule of law to al­low fair com­pe­ti­tion.

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