Doing Business with China

Craig Pouncey and Lode van den Hende, Herbert Smith, Brussels

Overview

This chapter provides an overview of China's specific obligations in the area of 'market access' in the principal commercial sectors in which China has allowed foreign businesses, goods and services to trade or be traded in China. We have outlined the type of liberalization commitments that China has made and the type of legal issues that can arise. However, China's accession to the WTO is set out in more than 800 pages of detailed legal documentation and it is obviously not possible to provide a complete and accurate explanation of these issues in this short contribution. For fully accurate information it is necessary to consult the original documents or take appropriate advice.

At the outset, it is important to note that China has made two types of commitments:

• Like all WTO members , China has submitted schedules of commitments and concessions on trade in goods and services. Broadly speaking these determine the customs tariffs that China can apply to imported products and the extent to which China is obliged to allow foreign services companies to operate on its territory.

• China has also made a number of special concessions on its current and planned investment regime and on a number of specific issues such as trading rights. These 'special' commitments reflect the fact that China is an economy in transition from a state-based system to a market-based system. Thus, certain issues that arise in the Chinese context do not arise in the context of a 'normal market economy' and, for that reason, are not dealt with by traditional WTO rules. These special rules can be found in the Protocol of Accession and in the WTO Working Party Report on China's accession. As China's transition towards a market economy progresses, the practical significance of these special rules will diminish accordingly .