## s458_sum_e ## Source details **Canonical URL:** [s458_sum_e](https://www.wto.org/english/tratop_e/tpr_e/s458_sum_e.pdf) ## Other formats - [Markdown version](/english/tratop_e/tpr_e/s458_sum_e.pdf.md) - [Structured JSON version](/english/tratop_e/tpr_e/s458_sum_e.pdf.json) --- ### Economic recovery, growth, and structural change - The economy recovered well from pandemic-related shocks; China's exports and imports continued to increase. - Growth of trade in intermediate goods strongly outpaced the growth of merchandise trade in general, indicating further integration into international supply chains. - The structural shift away from industry and towards services that China had previously embarked upon came to a halt. ### Living standards, inequality, and macro-fiscal position - Per capita GDP increased from USD 10,144 in 2019 to USD 12,614 in 2023. - High levels of income inequality and strong urban-rural wealth contrasts persist. - China's saving rate remains very high by international comparison, mainly due to precautionary savings. - Augmented government debt amounted to 116% of GDP in 2023, up from 99% in 2020. ### Consumption, reforms, and long-run demand drivers - Domestic consumption could be boosted by reforms in pensions, medical care, housing, and services liberalization. ### Monetary policy and external assets - Price stability remains the main goal of monetary policy; inflation rates stayed low with a maximum of 2.9% in 2019. - China maintains a managed floating exchange rate regime; the CNY is determined with reference to a publicly known basket of currencies. - The PBOC intervenes only to prevent excessive short-term fluctuations. - The CNY is fully convertible for current account transactions and partially convertible for some capital account transactions. - As at end-February 2024, officially reported foreign currency reserves stood at USD 3.2 trillion. ### External accounts and capital flows - Current account surplus: 2.24% of GDP in 2022; fell to 1.5% of GDP in 2023. - Increase in current account surplus up to 2022 mainly reflected a growing merchandise trade surplus and a considerable decline in the services balance deficit (largely due to a drop in outbound tourism). - The deficit of the financial account (excluding reserve assets) may reflect capital outflow pressures driven by interest rate differentials, concerns about growth prospects, and rising geopolitical risks. ### Merchandise and services trade - Merchandise exports: USD 2,589 billion in 2020; USD 3,594 billion in 2022; fell to USD 3,380 billion in 2023. - Merchandise imports: USD 2,069 billion in 2020; USD 2,716 billion in 2022; fell to USD 2,557 billion in 2023. - Between 40% and 50% of imports are sourced in Asia and Oceania. - Major export destinations: United States and the European Union. - Major import sources: European Union; the Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu (Chinese Taipei); Japan; and the United States. - Machinery and electrical equipment: important share of total merchandise trade. - Agricultural goods: minor role in exports; make up less than 10% of imports. - Services: exports expanded strongly from 2020 to 2022 but fell in 2023; services imports increased considerably between 2020 and 2023. ### Foreign direct investment and FDI stocks - Foreign investment flows into China decreased from USD 189 billion in 2022 to USD 163 billion in 2023. - Manufacturing sector remains the largest recipient of FDI. - China's total inward FDI stock: USD 3.8 trillion in 2022 (latest available), up from USD 1.9 trillion in 2020. - China's outward FDI stock: nearly USD 3 trillion in 2022, up from USD 2.6 trillion in 2020. ### Legal and judicial reforms affecting business environment - Five-Year Reform Programme of the People's Courts for 2019-2023: overhaul to strengthen property rights enforcement, ensure legal predictability, improve efficiency, and reduce litigation costs. - Measures: promotion of online adjudication; establishment of specialized courts (intellectual property, maritime, finance); promotion of alternative dispute resolution such as arbitration and international commercial jurisdictions. ### Domestic market harmonization and Five-Year Plan - Rules and mechanisms adopted to review regional administrative measures to establish a harmonized national market. - 14th Five-Year Plan for Economic and Social Development (2021-2025) adopted in 2021; outlines visions regarding opening of trade and investment framework. ### Trade policy stance and regional agreements - Authorities support a smoothly functioning multilateral trading system and emphasize WTO reform, investment facilitation for development, e-commerce, and services domestic regulation. - China broadened its network of RTAs; at the end of 2023, China had signed 22 RTAs involving 29 partners. - China offers unilateral tariff preference schemes for least developed countries. ### Foreign investment law and industrial strategy - 2020 Foreign Investment Law: principles protecting foreign investors against expropriation, restrictions on cross-border remittances, IPR infringement, and forced transfer of technology. - Foreign investment negative lists narrowed down to 31 items. - Increased number of industries placed in the Catalogue of Encouraged Industries for Foreign Investment to benefit from incentive packages. - Current Catalogue reflects commitment to upgrading supply chain positions in semiconductors and the clean energy sector. ### Customs, clearance times, and Trade Facilitation Agreement - Officially indicated customs clearance times: - Imports: 36.64 hours in 2021; 40.18 hours in 2022; 33.05 hours in Q1 2023. - Exports: 1.74 hours in 2021; 1.26 hours in 2022; 1.05 hours in Q1 2023. - On 1 January 2021, preshipment inspection requirement for imported waste as raw materials was removed; import of solid waste was banned. - No major changes to customs valuation rules and procedures since previous Review. - China has ratified the Trade Facilitation Agreement (TFA) and notified its Category A and B commitments; according to the WTO TFA database, China has fully implemented the Agreement. - No changes to laws or regulations concerning rules of origin since previous Review. ### Tariff structure and applied rates - Simple average applied MFN rate in 2024: 7.0% (compared with 7.1% in 2021). - Tariff for agricultural products (WTO definition): 12.6%. - Average applied tariff on non-agricultural products: 6.1% (from 6.2% in 2021). - Percentage of tariffs exceeding 15% (international tariff peaks): 4.3% (compared with 4.5% in 2021). - Percentage of tariffs subject to domestic tariff peaks: 1.9% (unchanged since 2021). - Universal import tariff quotas on certain products; examples and number of tariff lines: - Wheat: 7 tariff lines - Corn: 5 lines - Rice: 14 lines - Cotton: 2 lines - Sugar: 7 lines - Wool and wool tops: 9 lines - Chemical fertilizers: 3 lines - Preferential tariffs under PTAs and RTAs apply; Hong Kong, China and Macao, China face the lowest average tariff duties, followed by Chile and New Zealand. - Share of duty-free tariff lines in China's RTAs ranges between 99.2% (Hong Kong, China and Macao, China) and 23.4% (Chinese Taipei). - Data on utilization of preferential tariffs under RTAs and PTAs were not available. - No changes to duty exemptions, reductions, or concessions since previous Review. ### Taxation and consumption levies - Current VAT rates: 13%, 9%, 6%, and 3% (unchanged since previous Review). - Consumption tax levied on products deemed harmful, luxury goods, high-energy consumption and high-end products, and non-renewable petroleum products. - November 2022: consumption tax on e-cigarettes introduced at 36% at the production and import stage and 11% at the wholesale stage. - 2019 Vehicle Purchase Tax Law: 10% tax on domestically produced and imported vehicles (unchanged since previous Review). ### Import prohibitions and product-specific measures - August 2023: suspension of importation of all aquatic products originating in Japan. - China notified to the WTO import prohibitions for 2020-22 covering certain toxic substances, wild animal products, certain old/second-hand mechanical and electrical equipment, certain hazardous chemicals, pesticides, persistent organic pollutants, mercury-added products, solid wastes, ractopamine, certain types of filament lamps, and charcoal imported from Somalia. - Latest list of prohibited products issued in December 2023. ### Import licensing and catalogues - 2024: 24 categories of goods subject to automatic import licensing requirements implemented by MOFCOM; a further 21 categories subject to automatic import licensing requirements implemented by provincial-level or entrusted offices. - Tetrachlorethylene, polyvinyl chloride, and neoprene were added to the Catalogue of Goods Subject to Automatic Import Licensing during the review period. - 2024 Catalogue of Import Goods Subject to Licensing listed 149 tariff lines at the HS 10-digit level subject to non-automatic import licensing (up from 118 tariff lines at the HS 10-digit level in 2020). - Imports subject to non-automatic licences mainly include used mechanical and electronic equipment, and substances that deplete the ozone layer. ### Trade remedies and measures in force - China initiated 3 anti-dumping investigations from January 2021 to December 2023. - As at end-December 2023, China was enforcing 120 definitive anti-dumping measures. - Number of countervailing investigations initiated and measures in force has gradually declined over past few years. - No new safeguard investigations initiated during the review period. ### Export duties, restrictions, and export licensing - As of 1 January 2023: - 102 tariff lines subject to statutory export duties (unchanged since 2015). - 67 tariff lines carried interim duties (down from 75 in 2021). - Highest export tax rate: 50% applies to tin ores and concentrates. - Export restrictions and prohibitions remain in place to protect national security and public interest, human health and safety, animal and plant health, the environment, preserve scarce natural resources, maintain trading order, safeguard particular industries and balance of payments, and fulfill international treaty obligations. - 2023 Catalogue of Goods Subject to the Administration of Export Licenses (to be implemented in 2024) contains 43 categories (unchanged since 2020); some newly added products include items under liquorice and liquorice products, chemicals, certain graphite materials and their products, ozone-depleting substances, certain unmanned aerial vehicles, certain aviation engines, certain gallium- and germanium-related items, sawn timber, and certain automobile categories. - Licence management system enforced for export of particular dual-use items; during the review period export controls imposed on potassium perchlorate, high-pressure water cannons, gallium, germanium, items related to drones; adjustments made to temporary control measures applicable to export of graphite. - Catalogue of Technologies Restricted or Forbidden for Export modified in December 2023 by MOFCOM and the Ministry of Science and Technology. ### Pilot Free Trade Zones (PFTZs) - 22 PFTZs achieved total import and export volume of CNY 7.67 trillion in 2023, a year-on-year increase of 2.7%, accounting for 18.4% of the country's total trade. - Benefits for enterprises in PFTZs include a reduced corporate income tax rate of 15% applied for five years from incorporation and streamlined customs handling for enterprises dealing in core products/technologies in areas such as integrated circuits, artificial intelligence (AI), biomedicine, and civil aviation. ### Trade finance, export credit, and BRI support - 2022 China Eximbank international settlement, guarantee, and trade finance business: CNY 1,418.6 billion (international settlement registered CNY 843.6 billion; guarantee CNY 88.8 billion; trade finance CNY 486.2 billion). - Bank's outstanding balance of foreign trade loans saw a year-on-year increase of 20% in 2022. - Loan balance to support the Belt and Road Initiative amounted to CNY 2.2 trillion by end-2022, covering more than 130 countries. - 2022 total amount of export credit insurance: USD 753 billion, a large part short-term. - Export credit insurance provided by China Export & Credit Insurance Corporation covered 20.3% and 21.0% of total exports in 2021 and 2022, respectively. ### Subsidies, government support, and transparency concerns - China continued to provide financial support and incentives across central- and subcentral-level programmes; notifications for periods 2019-20 and 2021-22 were submitted in August 2021 and July 2023, respectively. - Secretariat could not form a clear overall picture of support programmes or levels of financial support for highly traded sectors (aluminium, electric vehicles, glass, shipbuilding, semiconductors, steel). - Commercial databases document important levels of public support concentrated in manufacturing with significant increases since 2018. - Government Guidance Funds / Government Investment Funds use public resources for equity investments in government-priority industries; no official overall endowment provided. - Academic and private equity estimates of overall endowment range from CNY 1.89 trillion to CNY 6.51 trillion. - Incentives by these funds generally not notified to the WTO; authorities state funds operate under market principles. - Overall lack of transparency on government support may contribute to debates on perceived overcapacity in certain sectors. ### Standards, technical regulations, and TBT notifications - Standardization Law (1988) and Regulations for Implementation (1990) remained unchanged during review period. - State Administration for Market Regulations (SAMR) responsible for standards development, product quality, food safety, measurement, certification, accreditation, and standards enforcement. - China Standards 2035 plan aims to set global standards in emerging technologies like 5G Internet, Internet of Things, and AI. - Between January 2021 and February 2024, China submitted 315 TBT notifications, mostly under Article 2.9 of the TBT Agreement. - Majority of technical regulations notified aim to protect human health and safety, ensure quality, or prevent deceptive consumer practices. - Between January 2021 and February 2024, 21 TBT-related specific trade concerns (STCs) were raised by other Members against China; eight of these STCs were newly raised. ### Sanitary and phytosanitary (SPS) measures - China aims to establish robust food safety governance; targeted reforms include increased inspections and testing, improved food safety standards and integration with international standards, upgraded research and testing capacities, and strengthened enforcement. - From April 2021 to March 2024, China notified 101 SPS measures to the WTO, of which 2 were emergency measures affecting specific Members. - Thirteen STCs related to Chinese measures were raised in the WTO SPS Committee during the review period. ### Competition policy and anti-monopoly enforcement - Anti-Monopoly Law amended in 2022 to include "safe harbour" rules for vertical agreements and strengthen enforcement, including higher penalties. - New rules increase the threshold for merger and acquisition notifications. - 2021: Anti-Monopoly Administration established within SAMR. ### State trading, SOEs, and ownership structure - State trading enterprises (STEs) have exclusive import/export rights for: tobacco, crude and processed oil, refined coal, chemical fertilizers, tungsten and tungstate products, antimony and antimony products, and silver. - Non-STEs with registered rights can handle part of import quotas for products such as wheat, maize, rice, sugar, and cotton. - State ownership remains very important across the economy; SOEs maintain substantial market shares and account for a large portion of total assets and profits in many sectors. - No major privatization during the review period; SOE reform proceeded mainly via mixed ownership. - Number of SOEs in industrial and construction sectors increased over the review period. - Authorities state SOEs base actions on commercial considerations and operate according to market-oriented principles and the rule-of-law, while also serving government policy and national industrial goals. ### Government procurement - No major changes to China's legal and institutional framework concerning government procurement since the previous Review. - The Government Procurement Law and its implementing legislation remain the primary legislation regulating government procurement activities. - The Government Procurement Law does not apply to procurement carried out by SOEs. - The total value of government procurement in China was CNY 3.5 trillion in 2022, accounting for 2.9% of GDP. - Public tendering is the main method of government procurement. - The great majority of procurement took place at the subcentral government level. - Limited progress was made during the review period in China's accession to the Agreement on Government Procurement. ### Intellectual property and innovation - Reforms undertaken during the review period include: - Revision of the Copyright Law that entered into force in June 2021. - Amendments to the Patent Law. - A new Seed Law that became effective in March 2022. - In 2022, more than 1.6 million patents were granted, of which around 155,000 to non-residents. - Income derived from IP exports grew strongly during the review period. - In enforcement, courts deal with over 500,000 IPR-related cases every year. - The SAMR regularly organizes nationwide actions to destroy infringing, counterfeit, and substandard goods. ### Agriculture and export competition - Laws revised or introduced during the review period include: - Law on the Promotion of Revitalization of Rural Areas (adopted in 2021). - Law on the Protection of Black Soil (adopted in 2022). - Animal Husbandry Law (revised in 2022). - The main agricultural strategy is set out in No. 1 Central Document on agricultural and rural development, released every year. - Agricultural products (WTO definition) are subject to ad valorem applied rates, except for some animal products. - In 2024, the average applied MFN tariff on agricultural products was 12.6% (12.7% in 2021). - Product groups with higher-than-average tariff protection: - Sugars and confectionery: 30.6% - Cereals and food preparations: 20.2% - Beverages and tobacco: 15.8% - Cotton, silk, and wool: 14.2% - Coffee, tea, cocoa, and spices: 12.7% - China applies an interim rate in the form of a sliding duty to a certain amount of uncombed cotton (HS 5201.00.00) imported out of quota, with the sliding duty rate capped at 40%. - Since 2020, the implementation rate of tariff quotas has fluctuated for some products, including wheat, rice, wool, and cotton; authorities indicate fluctuating fill rates are due to changes in domestic and international market conditions. - China notified to the WTO that export subsidies were not granted to agricultural products during calendar years 2020 and 2022. - China provides export financing programmes covering agricultural goods, including: - Short-term trade financing support for the export of agricultural products based on invoices, receipts, or credit letters. - Working capital loans for suppliers. - Medium- and long-term export credit insurance. - Overseas investment insurance. - Short-term export credit insurance. ### Fisheries and marine policy - The simple average tariff on fish and fishery products (WTO definition) was 6.8% in 2024, with tariffs ranging from 0 to 15%. - In 2021, MARA issued the 14th Five-Year Plan for National Fishery Development, specifying that domestic marine fishing output would be limited to 10 million tonnes by 2025. - Support to the sector is provided by both the Central Government and local/provincial governments. - China's latest notification to the WTO covers the 2021-22 period and contains three incentives/support programmes at the central government level; these relate to a subsidies fund for development of the fishery industry and a general-purpose transfer payment. - Of the programmes adopted by local governments during the 2021-22 period, 22 were also notified to the WTO. - China formally accepted the Protocol of the Agreement on Fisheries Subsidies by depositing an instrument of acceptance with the WTO on 27 June 2023. - In 2021, China removed fuel subsidies. ### Mining, minerals policy, and energy transition - Priorities include reducing production of minerals with excess capacity and ensuring supply of minerals for strategic emerging industries. - Trade measures include an export licence requirement for certain minerals. - Foreign individuals or companies are permitted to own mining rights in China, but are prohibited from investing, directly or indirectly, in the prospecting or exploitation of tungsten, rare earths, and radioactive minerals. - Energy consumption remains predominantly reliant on coal, but China plans to shift its energy usage away from coal. - Authorities recognize coal remains crucial for maintaining energy security, particularly during periods of reduced energy availability. - The relative importance of coal consumption has been declining in recent years. - China continued to improve its energy mix by favouring non-fossil energy sources such as hydropower, nuclear power, wind power, and photovoltaic. - To support investment in clean energy, China has implemented mechanisms such as feed-in tariff subsidies. ### Manufacturing sector - The manufacturing sector contributed between 26% and 28% to GDP over the review period. - China has become a major global manufacturing hub in recent decades. - Drivers of manufacturing performance: increasing integration in global value chains, trade and investment liberalization, abundant and productive labour, a large domestic market, high-quality infrastructure, and innovation. - Manufactured goods account for over 95% of China's exports. - The Made in China 2025 (or China Manufacturing 2025) Initiative is the main programme to promote the sector. - The manufacturing sector is a significant recipient of grants, research funding, and tax concessions. - Some Government Guidance Funds specifically target the manufacturing sector. ### Telecommunications and digital services - Trade in telecommunications services continued to expand, driven by digital innovation and increased demand for digital services. - State presence in fixed and mobile telecommunications services is substantial, though it decreased during the review period. - Emerging segments (Internet data centres, cloud computing, Internet of Things) are predominantly operated by private companies. - The foreign share ratio for value-added telecommunications services (except for e-commerce, domestic multi-party communications, storage-forwarding, and call centres) is limited to a maximum of 50%. - Authorities have undertaken cybersecurity measures to mitigate security challenges from digital transformation. - China has proposed the Global AI Governance Initiative to promote a balanced approach to AI development and security. ### Financial sector - The financial sector displays a significant predominance of banks; assets of the six large state-owned banks accounted for 40.8% of the total. - Developments marked by further liberalization to allow increased foreign participation and attract long-term capital. - Significant efforts made to promote green finance, including: - Structural monetary policy tools. - Climate risk stress tests. - Specific pilot projects. ### Transport and logistics - Air transport objectives: develop a civil aviation industry adhering to environmentally friendly practices and high performance standards. - Measures adopted to promote construction of green and smart airports and to limit plastic pollution in air transport. - Construction and operation of civil airports are to be controlled by Chinese companies, limiting foreign investment possibilities. - China envisions building a high-quality maritime transport industry by 2035, emphasizing modern governance systems, energy savings, and smart processes to consolidate competitiveness. - Foreign investment is generally allowed in the maritime industry, but the controlling stake of domestic water transport companies must be held by a Chinese person or organization. ### Outlook and macroeconomic projection - Over the review period, China's importance in the global economy and in trade has been further accentuated. - IMF projection for 2024: growth of 4.6%. - Longer-term risks to growth include population ageing, decreases in the labour force, and a deceleration of productivity increases. - Further downside risks over the coming years include geopolitical tensions, a deeper-than-expected contraction in the property sector, and weaker-than-expected global growth weighing on demand. - Role of trade: continued market-driven structural reforms, economic liberalization, and international integration likely to be crucial for China's future growth prospects. *WT/TPR/S/458 • China* ### 1. During the review period, China remained an important driving force for global economic ### s458_sum_e - 1. During the review period, China remained an important driving force for global economic ### Economic recovery, growth, and structural change - The economy recovered well from pandemic-related shocks; China's exports and imports continued to increase. - Growth of trade in intermediate goods strongly outpaced the growth of merchandise trade in general, indicating further integration into international supply chains. - The structural shift away from industry and towards services that China had previously embarked upon came to a halt. ### Living standards, inequality, and macro-fiscal position - Per capita GDP increased from USD 10,144 in 2019 to USD 12,614 in 2023. - High levels of income inequality and strong urban-rural wealth contrasts persist. - China's saving rate remains very high by international comparison, mainly due to precautionary savings. - Augmented government debt amounted to 116% of GDP in 2023, up from 99% in 2020. ### Consumption, reforms, and long-run demand drivers - Domestic consumption could be boosted by reforms in pensions, medical care, housing, and services liberalization. ### Monetary policy and external assets - Price stability remains the main goal of monetary policy; inflation rates stayed low with a maximum of 2.9% in 2019. - China maintains a managed floating exchange rate regime; the CNY is determined with reference to a publicly known basket of currencies. - The PBOC intervenes only to prevent excessive short-term fluctuations. - The CNY is fully convertible for current account transactions and partially convertible for some capital account transactions. - As at end-February 2024, officially reported foreign currency reserves stood at USD 3.2 trillion. ### External accounts and capital flows - Current account surplus: 2.24% of GDP in 2022; fell to 1.5% of GDP in 2023. - Increase in current account surplus up to 2022 mainly reflected a growing merchandise trade surplus and a considerable decline in the services balance deficit (largely due to a drop in outbound tourism). - The deficit of the financial account (excluding reserve assets) may reflect capital outflow pressures driven by interest rate differentials, concerns about growth prospects, and rising geopolitical risks. ### Merchandise and services trade - Merchandise exports: USD 2,589 billion in 2020; USD 3,594 billion in 2022; fell to USD 3,380 billion in 2023. - Merchandise imports: USD 2,069 billion in 2020; USD 2,716 billion in 2022; fell to USD 2,557 billion in 2023. - Between 40% and 50% of imports are sourced in Asia and Oceania. - Major export destinations: United States and the European Union. - Major import sources: European Union; the Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu (Chinese Taipei); Japan; and the United States. - Machinery and electrical equipment: important share of total merchandise trade. - Agricultural goods: minor role in exports; make up less than 10% of imports. - Services: exports expanded strongly from 2020 to 2022 but fell in 2023; services imports increased considerably between 2020 and 2023. ### Foreign direct investment and FDI stocks - Foreign investment flows into China decreased from USD 189 billion in 2022 to USD 163 billion in 2023. - Manufacturing sector remains the largest recipient of FDI. - China's total inward FDI stock: USD 3.8 trillion in 2022 (latest available), up from USD 1.9 trillion in 2020. - China's outward FDI stock: nearly USD 3 trillion in 2022, up from USD 2.6 trillion in 2020. ### Legal and judicial reforms affecting business environment - Five-Year Reform Programme of the People's Courts for 2019-2023: overhaul to strengthen property rights enforcement, ensure legal predictability, improve efficiency, and reduce litigation costs. - Measures: promotion of online adjudication; establishment of specialized courts (intellectual property, maritime, finance); promotion of alternative dispute resolution such as arbitration and international commercial jurisdictions. ### Domestic market harmonization and Five-Year Plan - Rules and mechanisms adopted to review regional administrative measures to establish a harmonized national market. - 14th Five-Year Plan for Economic and Social Development (2021-2025) adopted in 2021; outlines visions regarding opening of trade and investment framework. ### Trade policy stance and regional agreements - Authorities support a smoothly functioning multilateral trading system and emphasize WTO reform, investment facilitation for development, e-commerce, and services domestic regulation. - China broadened its network of RTAs; at the end of 2023, China had signed 22 RTAs involving 29 partners. - China offers unilateral tariff preference schemes for least developed countries. ### Foreign investment law and industrial strategy - 2020 Foreign Investment Law: principles protecting foreign investors against expropriation, restrictions on cross-border remittances, IPR infringement, and forced transfer of technology. - Foreign investment negative lists narrowed down to 31 items. - Increased number of industries placed in the Catalogue of Encouraged Industries for Foreign Investment to benefit from incentive packages. - Current Catalogue reflects commitment to upgrading supply chain positions in semiconductors and the clean energy sector. ### Customs, clearance times, and Trade Facilitation Agreement - Officially indicated customs clearance times: - Imports: 36.64 hours in 2021; 40.18 hours in 2022; 33.05 hours in Q1 2023. - Exports: 1.74 hours in 2021; 1.26 hours in 2022; 1.05 hours in Q1 2023. - On 1 January 2021, preshipment inspection requirement for imported waste as raw materials was removed; import of solid waste was banned. - No major changes to customs valuation rules and procedures since previous Review. - China has ratified the Trade Facilitation Agreement (TFA) and notified its Category A and B commitments; according to the WTO TFA database, China has fully implemented the Agreement. - No changes to laws or regulations concerning rules of origin since previous Review. ### Tariff structure and applied rates - Simple average applied MFN rate in 2024: 7.0% (compared with 7.1% in 2021). - Tariff for agricultural products (WTO definition): 12.6%. - Average applied tariff on non-agricultural products: 6.1% (from 6.2% in 2021). - Percentage of tariffs exceeding 15% (international tariff peaks): 4.3% (compared with 4.5% in 2021). - Percentage of tariffs subject to domestic tariff peaks: 1.9% (unchanged since 2021). - Universal import tariff quotas on certain products; examples and number of tariff lines: - Wheat: 7 tariff lines - Corn: 5 lines - Rice: 14 lines - Cotton: 2 lines - Sugar: 7 lines - Wool and wool tops: 9 lines - Chemical fertilizers: 3 lines - Preferential tariffs under PTAs and RTAs apply; Hong Kong, China and Macao, China face the lowest average tariff duties, followed by Chile and New Zealand. - Share of duty-free tariff lines in China's RTAs ranges between 99.2% (Hong Kong, China and Macao, China) and 23.4% (Chinese Taipei). - Data on utilization of preferential tariffs under RTAs and PTAs were not available. - No changes to duty exemptions, reductions, or concessions since previous Review. ### Taxation and consumption levies - Current VAT rates: 13%, 9%, 6%, and 3% (unchanged since previous Review). - Consumption tax levied on products deemed harmful, luxury goods, high-energy consumption and high-end products, and non-renewable petroleum products. - November 2022: consumption tax on e-cigarettes introduced at 36% at the production and import stage and 11% at the wholesale stage. - 2019 Vehicle Purchase Tax Law: 10% tax on domestically produced and imported vehicles (unchanged since previous Review). ### Import prohibitions and product-specific measures - August 2023: suspension of importation of all aquatic products originating in Japan. - China notified to the WTO import prohibitions for 2020-22 covering certain toxic substances, wild animal products, certain old/second-hand mechanical and electrical equipment, certain hazardous chemicals, pesticides, persistent organic pollutants, mercury-added products, solid wastes, ractopamine, certain types of filament lamps, and charcoal imported from Somalia. - Latest list of prohibited products issued in December 2023. ### Import licensing and catalogues - 2024: 24 categories of goods subject to automatic import licensing requirements implemented by MOFCOM; a further 21 categories subject to automatic import licensing requirements implemented by provincial-level or entrusted offices. - Tetrachlorethylene, polyvinyl chloride, and neoprene were added to the Catalogue of Goods Subject to Automatic Import Licensing during the review period. - 2024 Catalogue of Import Goods Subject to Licensing listed 149 tariff lines at the HS 10-digit level subject to non-automatic import licensing (up from 118 tariff lines at the HS 10-digit level in 2020). - Imports subject to non-automatic licences mainly include used mechanical and electronic equipment, and substances that deplete the ozone layer. ### Trade remedies and measures in force - China initiated 3 anti-dumping investigations from January 2021 to December 2023. - As at end-December 2023, China was enforcing 120 definitive anti-dumping measures. - Number of countervailing investigations initiated and measures in force has gradually declined over past few years. - No new safeguard investigations initiated during the review period. ### Export duties, restrictions, and export licensing - As of 1 January 2023: - 102 tariff lines subject to statutory export duties (unchanged since 2015). - 67 tariff lines carried interim duties (down from 75 in 2021). - Highest export tax rate: 50% applies to tin ores and concentrates. - Export restrictions and prohibitions remain in place to protect national security and public interest, human health and safety, animal and plant health, the environment, preserve scarce natural resources, maintain trading order, safeguard particular industries and balance of payments, and fulfill international treaty obligations. - 2023 Catalogue of Goods Subject to the Administration of Export Licenses (to be implemented in 2024) contains 43 categories (unchanged since 2020); some newly added products include items under liquorice and liquorice products, chemicals, certain graphite materials and their products, ozone-depleting substances, certain unmanned aerial vehicles, certain aviation engines, certain gallium- and germanium-related items, sawn timber, and certain automobile categories. - Licence management system enforced for export of particular dual-use items; during the review period export controls imposed on potassium perchlorate, high-pressure water cannons, gallium, germanium, items related to drones; adjustments made to temporary control measures applicable to export of graphite. - Catalogue of Technologies Restricted or Forbidden for Export modified in December 2023 by MOFCOM and the Ministry of Science and Technology. ### Pilot Free Trade Zones (PFTZs) - 22 PFTZs achieved total import and export volume of CNY 7.67 trillion in 2023, a year-on-year increase of 2.7%, accounting for 18.4% of the country's total trade. - Benefits for enterprises in PFTZs include a reduced corporate income tax rate of 15% applied for five years from incorporation and streamlined customs handling for enterprises dealing in core products/technologies in areas such as integrated circuits, artificial intelligence (AI), biomedicine, and civil aviation. ### Trade finance, export credit, and BRI support - 2022 China Eximbank international settlement, guarantee, and trade finance business: CNY 1,418.6 billion (international settlement registered CNY 843.6 billion; guarantee CNY 88.8 billion; trade finance CNY 486.2 billion). - Bank's outstanding balance of foreign trade loans saw a year-on-year increase of 20% in 2022. - Loan balance to support the Belt and Road Initiative amounted to CNY 2.2 trillion by end-2022, covering more than 130 countries. - 2022 total amount of export credit insurance: USD 753 billion, a large part short-term. - Export credit insurance provided by China Export & Credit Insurance Corporation covered 20.3% and 21.0% of total exports in 2021 and 2022, respectively. ### Subsidies, government support, and transparency concerns - China continued to provide financial support and incentives across central- and subcentral-level programmes; notifications for periods 2019-20 and 2021-22 were submitted in August 2021 and July 2023, respectively. - Secretariat could not form a clear overall picture of support programmes or levels of financial support for highly traded sectors (aluminium, electric vehicles, glass, shipbuilding, semiconductors, steel). - Commercial databases document important levels of public support concentrated in manufacturing with significant increases since 2018. - Government Guidance Funds / Government Investment Funds use public resources for equity investments in government-priority industries; no official overall endowment provided. - Academic and private equity estimates of overall endowment range from CNY 1.89 trillion to CNY 6.51 trillion. - Incentives by these funds generally not notified to the WTO; authorities state funds operate under market principles. - Overall lack of transparency on government support may contribute to debates on perceived overcapacity in certain sectors. ### Standards, technical regulations, and TBT notifications - Standardization Law (1988) and Regulations for Implementation (1990) remained unchanged during review period. - State Administration for Market Regulations (SAMR) responsible for standards development, product quality, food safety, measurement, certification, accreditation, and standards enforcement. - China Standards 2035 plan aims to set global standards in emerging technologies like 5G Internet, Internet of Things, and AI. - Between January 2021 and February 2024, China submitted 315 TBT notifications, mostly under Article 2.9 of the TBT Agreement. - Majority of technical regulations notified aim to protect human health and safety, ensure quality, or prevent deceptive consumer practices. - Between January 2021 and February 2024, 21 TBT-related specific trade concerns (STCs) were raised by other Members against China; eight of these STCs were newly raised. ### Sanitary and phytosanitary (SPS) measures - China aims to establish robust food safety governance; targeted reforms include increased inspections and testing, improved food safety standards and integration with international standards, upgraded research and testing capacities, and strengthened enforcement. - From April 2021 to March 2024, China notified 101 SPS measures to the WTO, of which 2 were emergency measures affecting specific Members. - Thirteen STCs related to Chinese measures were raised in the WTO SPS Committee during the review period. ### Competition policy and anti-monopoly enforcement - Anti-Monopoly Law amended in 2022 to include "safe harbour" rules for vertical agreements and strengthen enforcement, including higher penalties. - New rules increase the threshold for merger and acquisition notifications. - 2021: Anti-Monopoly Administration established within SAMR. ### State trading, SOEs, and ownership structure - State trading enterprises (STEs) have exclusive import/export rights for: tobacco, crude and processed oil, refined coal, chemical fertilizers, tungsten and tungstate products, antimony and antimony products, and silver. - Non-STEs with registered rights can handle part of import quotas for products such as wheat, maize, rice, sugar, and cotton. - State ownership remains very important across the economy; SOEs maintain substantial market shares and account for a large portion of total assets and profits in many sectors. - No major privatization during the review period; SOE reform proceeded mainly via mixed ownership. - Number of SOEs in industrial and construction sectors increased over the review period. - Authorities state SOEs base actions on commercial considerations and operate according to market-oriented principles and the rule-of-law, while also serving government policy and national industrial goals. *WT/TPR/S/458 • China* ### 28. There have been no major changes to China's legal and institutional framework concerning ### There have been no major changes to China's legal and institutional framework concerning ### Government procurement - No major changes to China's legal and institutional framework concerning government procurement since the previous Review. - The Government Procurement Law and its implementing legislation remain the primary legislation regulating government procurement activities. - The Government Procurement Law does not apply to procurement carried out by SOEs. - The total value of government procurement in China was CNY 3.5 trillion in 2022, accounting for 2.9% of GDP. - Public tendering is the main method of government procurement. - The great majority of procurement took place at the subcentral government level. - Limited progress was made during the review period in China's accession to the Agreement on Government Procurement. ### Intellectual property and innovation - Reforms undertaken during the review period include: - Revision of the Copyright Law that entered into force in June 2021. - Amendments to the Patent Law. - A new Seed Law that became effective in March 2022. - In 2022, more than 1.6 million patents were granted, of which around 155,000 to non-residents. - Income derived from IP exports grew strongly during the review period. - In enforcement, courts deal with over 500,000 IPR-related cases every year. - The SAMR regularly organizes nationwide actions to destroy infringing, counterfeit, and substandard goods. ### Agriculture and export competition - Laws revised or introduced during the review period include: - Law on the Promotion of Revitalization of Rural Areas (adopted in 2021). - Law on the Protection of Black Soil (adopted in 2022). - Animal Husbandry Law (revised in 2022). - The main agricultural strategy is set out in No. 1 Central Document on agricultural and rural development, released every year. - Agricultural products (WTO definition) are subject to ad valorem applied rates, except for some animal products. - In 2024, the average applied MFN tariff on agricultural products was 12.6% (12.7% in 2021). - Product groups with higher-than-average tariff protection: - Sugars and confectionery: 30.6% - Cereals and food preparations: 20.2% - Beverages and tobacco: 15.8% - Cotton, silk, and wool: 14.2% - Coffee, tea, cocoa, and spices: 12.7% - China applies an interim rate in the form of a sliding duty to a certain amount of uncombed cotton (HS 5201.00.00) imported out of quota, with the sliding duty rate capped at 40%. - Since 2020, the implementation rate of tariff quotas has fluctuated for some products, including wheat, rice, wool, and cotton; authorities indicate fluctuating fill rates are due to changes in domestic and international market conditions. - China notified to the WTO that export subsidies were not granted to agricultural products during calendar years 2020 and 2022. - China provides export financing programmes covering agricultural goods, including: - Short-term trade financing support for the export of agricultural products based on invoices, receipts, or credit letters. - Working capital loans for suppliers. - Medium- and long-term export credit insurance. - Overseas investment insurance. - Short-term export credit insurance. ### Fisheries and marine policy - The simple average tariff on fish and fishery products (WTO definition) was 6.8% in 2024, with tariffs ranging from 0 to 15%. - In 2021, MARA issued the 14th Five-Year Plan for National Fishery Development, specifying that domestic marine fishing output would be limited to 10 million tonnes by 2025. - Support to the sector is provided by both the Central Government and local/provincial governments. - China's latest notification to the WTO covers the 2021-22 period and contains three incentives/support programmes at the central government level; these relate to a subsidies fund for development of the fishery industry and a general-purpose transfer payment. - Of the programmes adopted by local governments during the 2021-22 period, 22 were also notified to the WTO. - China formally accepted the Protocol of the Agreement on Fisheries Subsidies by depositing an instrument of acceptance with the WTO on 27 June 2023. - In 2021, China removed fuel subsidies. ### Mining, minerals policy, and energy transition - Priorities include reducing production of minerals with excess capacity and ensuring supply of minerals for strategic emerging industries. - Trade measures include an export licence requirement for certain minerals. - Foreign individuals or companies are permitted to own mining rights in China, but are prohibited from investing, directly or indirectly, in the prospecting or exploitation of tungsten, rare earths, and radioactive minerals. - Energy consumption remains predominantly reliant on coal, but China plans to shift its energy usage away from coal. - Authorities recognize coal remains crucial for maintaining energy security, particularly during periods of reduced energy availability. - The relative importance of coal consumption has been declining in recent years. - China continued to improve its energy mix by favouring non-fossil energy sources such as hydropower, nuclear power, wind power, and photovoltaic. - To support investment in clean energy, China has implemented mechanisms such as feed-in tariff subsidies. ### Manufacturing sector - The manufacturing sector contributed between 26% and 28% to GDP over the review period. - China has become a major global manufacturing hub in recent decades. - Drivers of manufacturing performance: increasing integration in global value chains, trade and investment liberalization, abundant and productive labour, a large domestic market, high-quality infrastructure, and innovation. - Manufactured goods account for over 95% of China's exports. - The Made in China 2025 (or China Manufacturing 2025) Initiative is the main programme to promote the sector. - The manufacturing sector is a significant recipient of grants, research funding, and tax concessions. - Some Government Guidance Funds specifically target the manufacturing sector. ### Telecommunications and digital services - Trade in telecommunications services continued to expand, driven by digital innovation and increased demand for digital services. - State presence in fixed and mobile telecommunications services is substantial, though it decreased during the review period. - Emerging segments (Internet data centres, cloud computing, Internet of Things) are predominantly operated by private companies. - The foreign share ratio for value-added telecommunications services (except for e-commerce, domestic multi-party communications, storage-forwarding, and call centres) is limited to a maximum of 50%. - Authorities have undertaken cybersecurity measures to mitigate security challenges from digital transformation. - China has proposed the Global AI Governance Initiative to promote a balanced approach to AI development and security. ### Financial sector - The financial sector displays a significant predominance of banks; assets of the six large state-owned banks accounted for 40.8% of the total. - Developments marked by further liberalization to allow increased foreign participation and attract long-term capital. - Significant efforts made to promote green finance, including: - Structural monetary policy tools. - Climate risk stress tests. - Specific pilot projects. ### Transport and logistics - Air transport objectives: develop a civil aviation industry adhering to environmentally friendly practices and high performance standards. - Measures adopted to promote construction of green and smart airports and to limit plastic pollution in air transport. - Construction and operation of civil airports are to be controlled by Chinese companies, limiting foreign investment possibilities. - China envisions building a high-quality maritime transport industry by 2035, emphasizing modern governance systems, energy savings, and smart processes to consolidate competitiveness. - Foreign investment is generally allowed in the maritime industry, but the controlling stake of domestic water transport companies must be held by a Chinese person or organization. ### Outlook and macroeconomic projection - Over the review period, China's importance in the global economy and in trade has been further accentuated. - IMF projection for 2024: growth of 4.6%. - Longer-term risks to growth include population ageing, decreases in the labour force, and a deceleration of productivity increases. - Further downside risks over the coming years include geopolitical tensions, a deeper-than-expected contraction in the property sector, and weaker-than-expected global growth weighing on demand. - Role of trade: continued market-driven structural reforms, economic liberalization, and international integration likely to be crucial for China's future growth prospects. *WT/TPR/S/458 • China* --- _Source: https://www.wto.org/english/tratop_e/tpr_e/s458_sum_e.pdf_