Implementation of Commitments

Trade in Goods

    With the accession to the WTO, average tariff level of China decreased from 15.3% in 2001 to 10.4% in 2004. Most import quota, license and chartered tender measures have been phased out. The previous system that obtaining trading right of companies must be approved by governments has been abolished, while acquisition of trading rights now simply requires companies to make commercial registration. Guangdong has been seriously enforcing measures (such as tariff concessions and phasing-out of non-tariff measures) initiated by the central government, therefore has facilitated the trade liberalization to a great extent.

• After China’s accession to the WTO, the import in Guangdong has grown rapidly. In 2003, total amount of imported goods reached 130.7 billion USD, increasing by 27.3% comparing with the previous year. Among the total imports, import of major commodities and resource-based products has been growing fast. For example, import of electromechanical products valued 74.04 billion USD, increasing by 34.1% comparing with the last year; USD45.41 billion of hi-tech products, increasing by 39.4%; USD5.54 billion of steel products, increasing by 34.3%; agricultural products USD3.37 billion, increasing by 39.1%; finished oil products USD2.16 billion, increasing by 47.6%; and automobiles and their chassis USD 776 million, increasing by 22.5%.
• Imports from major partners increased dramatically. In 2003, imports from EU amounted to USD8.68 billion, increasing by 8.65; USD7.51 billion from USA, increasing by 12.1%; USD22.92 billion from Japan, increasing 32%; and USD19.18 billion from ASEAN, increasing by 39.6%.
• Trade liberalization has had remarkable effects in Guangdong. Totally there are 14,776 private enterprises in Guangdong that have acquired the trading rights, which ranks the first in all the provinces in the country and represents a growth of 140%. Total amount of foreign trade effected by foreign-invested enterprises was USD174.68 billion, increasing by 35.9%, among which, total imports was USD79.3 billion, accounting for 60.67% of that of the whole province; imports and exports of private enterprises was USD22.39 billion, increasing by 161.6%, including imports USD11.1 billion, representing 8.49% of total imports into the province.
• Guangdong has been constantly improving its infrastructures at ports, streamlining administrative procedures, conducting reforms in regulatory modes such as conducting interconnected monitor on processing trade and introducing advanced technologies, to greatly enhance the efficiency at customs. On average, imported goods will pass trough the customs at Guangzhou port in one day, and 80% trucks can pass through the customs within one hour at Huangguang Port.

Trade in Services

    In the wake of the fulfillment of China’s commitments upon accession and the ease of market access requirements as to service sectors, more and more foreign enterprises are investing in Guangdong. During the two years after accession, FDI absorbed in services in Guangdong increased over 40% each year. Fields such as logistics, distribution, tourism, medical care, education and R&D became focuses of investment. In 2003, FDI absorbed in service sectors represented 27.4% of total FDI received in Guangdong.

• Banking
• By the end of September 2003, there were 25 operations established in Guangdong (excluding Shenzhen) by 23 foreign capital banks, encompassing 24 foreign bank branches and 1 foreign capital corporate body. Among these operations, 16 were located in Gaungzhou (including 1 braches), 5 in Zhuhai and 4 in Shantou. In addition, there were 13 representative offices in Guangzhou.
• Total assets of these 25 operations of foreign banks reached USD2.14 billion, and their total operational capital amounted to USD487 million.
• In the first half of 2003, the total assets of foreign capital banks in Guangdong ranked fifth among all provinces in the country. From January to September 2003, foreign capital banks have gained after-tax profit up to USD15,282,000, ranking No. 3 in the country.
• Banks of the United States have set up branches in Beijing, Shanghai and Guangzhou. On March 1, 2004, the first branch of USA banks in the mainland formally opened, which provide deposit service in RMB and foreign currencies, real estate mortgage loans in RMB, HK dollars and USD, finance management services, electronic banking, commercial credit and financing.
• Insurance
• On October 13, 2000, British Prudential plc set up CITIC Prudential Life Insurance Co in Guangzhou.
• In January 2002, Italian ASSICURAZIONI.GENERALI Insurance Co., Ltd. set up Generali China Life Insurance Co., Ltd. in Guangzhou.
• In January 2003, Britain-based Aviva plc established Aviva-COFCO Insurance Co., Ltd. in Guangzhou.
• American International Assurance (AIA) and American International Underwriters (AIU), subsidiaries to American International Group , INC.(AIG), have established branches in cities such has Shenzhen, Guangzhou and Shanghai.
• Distribution Services
• France-based CARREFOUR has opened 42 chain stores in China(including many in Guangdong), ranking No. 5 among chain businesses in China.
• Germany-based METRO owns 18 department stores in China, and the store in Dongguan, Guangdong is to be opened soon.
• Britain-based B&Q has opened 15 branches in China with total sales ranking No. 1 in the sector. In 2003, it set up three branches in Guangzhou Tianhe, Guanghzou Haizhu and Shenzhen Nanshan.
• UK-Dutch Shell Oils Company set up Zhonghai Shell Petrochemical Sales Co., Ltd, to provide sales services for the Nanhai petrochemical project with total capital of USD4.3 billion. The expected annual sales would be RMB 16 billion yuan.
• American retail Giant Walmart has set up 35 stores in 17 cities such as Shenzhen, Dongguang and Shantou, since it entered China in 1996.
• Supporting Services
• Multinational companies established over 100 institutions in Guangdong that provide supporting services, including regional headquarters, R&D centers and purchase centers.
• British BP set up BP (China) Investment Co., Ltd. in Guangdong.
• P&G established its Chinese headquarters in Guangzhou.

Intellectual Property Rights

    After acceding to WTO, China has improved IPR legislations, revising Copyright Law, Patent Law, Trademark Law and their implementing rules, as well as regulations with respect to computer software, anti-unfair competitions and IPR protection at customs, and repealing some ministerial rules inconsistent with TRIPS.

• Improvement of IPR legislations
      Based on national legislations, Guangdong also developed local IPR protection statutes such as Regulations on Patent Protection of Guangdong and Implementing Measures for Accountability System for Patent Administrative Enforcement in Guangdong.
• Enhancing IPR enforcement
• An associated conference system has been set up in Guangdong, aiming at tightening the cooperation between the authorities of technologies, economy, foreign trade, education, information and so on, to carry out united enforcement and build a broad IPR regulatory system.
• Reinforcing multi-department administrative enforcement. For instance, in the united enforcing action on April 26, 2003, 38 enterprises were brought under administrative penalties, 60 cases involving IPR-infringing were brought under administrative investigations and penalties, 200,000 discs(cassettes)of audio-visual products were seized and a case has been referred to criminal authorities for investigation.
• Strengthening criminal penalties. Judicial authorities in Guangdong attached great importance to trial of IPR disputes by lowering the amount standard for initiating criminal actions and aggravating criminal sanctions.
• Implementing border protection of IPRs, by introducing IPR recording system at customs and strengthening border inspections. In the first three quarters of 2003, Guangdong Customs investigated and dealt with 243 cases involving IPR infringement.
• Reinforcing trademark registration and patent application processing as well as self-discipline with respect to copyrights
• By the end of 2002, registered trademarks in Guangdong were up to 208,140, representing one eighth of the total registered trademarks in the country and ranking No.l among all provinces; In 2003, Guangdong accepted 38,864 applications for trademark registration, also ranking No. 1 in the country.
• In 2002, Guangdong accepted 34,339 patent applications, an increase of 24.4% comparing with the previous year; In 2003, Guangdong accepted 43,186 patent applications, an increase of 25.7% comparing with the previous year. The number of patent applications has remained No. 1 in the country for eight consecutive years.
• In March 2004, 11 audio-visual companies jointly established Guangdong United Media Company and signed an Anti-Piracy Statement, to build a self-discipline mechanism for companies. From preparation to establishment, the united company sent lawyers’ letters to over 300 audio-visual product stores and brought more than 600 actions to courts, among them, over 200 were closed or settled through consultations.
• Carrying out publicizing, trainings and exchanges and cooperation with foreign countries
• In celebration of the World Intellectual Property day (April 26) of 2004, a campaign named “A Week for Promoting Intellectual Property Right Protection” will be carried out nationwide. Relevant departments in Guangdong have arranged affluent activities for the campaign, to enhance the public awareness in IPR protection.
• In facilitating China’s accession to WTO, MOFCOM and EU initiated “EU-China WTO Program”. Under the assistance of the program, EU legal experts were twice invited to Guangdong to hold international IPR trainings, with a view to enhancing the understanding of the enterprises on matters as to response to and dealing with IPR disputes.
• In October 2002, a delegation led by EU Trade Commissioner Pascal Lamy visited Guangdong to inspect the fulfillment of China’s commitments upon accession in Guangdong. The delegation mainly discussed matters in relation to IPR protection and technical cooperation with officials of Guangdong responsible for foreign trade.

Rectification of Laws and Regulations

    According to Chinese laws, right of legislation on foreign trade and economic cooperation lies with the State. Local governments are responsible for enforcing national laws and regulations as well as developing local regulations and governmental rules through legislative procedures, based on national statutes and the local situation.

• Before and after acceding to WTO, the Chinese government laid down plans for rectification and improvement of relevant legislations in accordance with the rule of transparency of WTO, to make existing legislations compatible with WTO Agreement. State Council published a decision on October 6, 2001, repealing 71 and invalidating 80 administrative regulations promulgated by the end of 2000.
• Guangdong People’s Government has rectified 275 local regulations, repealing 6 and modifying 16; and rectified 570 normative documents, repealing 66 and revising 27.
• In October 2001, Department of Foreign Trade and Economic Cooperation of Guangdong (“GDDOFTEC”), according to its mandate, organized a rectification of regulations and policy-based measures concerning foreign trade and economic cooperation, cleaning up 406 policy-based measures promulgated during 1976-2000 by GDDOFTEC.
• A list of the first group of documents to be repealed and invalidated were published on the official website of the provincial foreign trade department and the media in December, which include 336 documents.
• In February 2003, GDDOFTEC made a second rectification to 60 policy-based measures that were to be maintained or modified in the first time of rectification. The list of the second group of measures to be rectified were published, with 12 measures repealed, 5 invalidated, 41 maintained and 2 cancelled.
• In January 2004, the list of the third group of measures was published, with 1 measure repealed and 1 invalidated.
• At present, a new turn of rectification is under way, in light of the Law on Administrative Licensing published in August 2003 and to take effect in July 2004.
• All laws, regulations and governmental rules enacted in Guangdong are published through the official website of the government and the monthly Guangdong Governmental Bulletin. Policy-based measures adopted by GDDOFTEC are also published on the official website of the government.

Standardization of Governmental Actions

    After acceding to WTO, the Chinese government defined the role of the government as “macro regulation, market supervision, social administration and public service”, and regards this definition as the direction and basis for boosting reforms in governments’ roles at various level.

• Around China’s accession to WTO, the Chinese government standardized legislations with respect to administrative behaviors, publishing Administrative Procedure Law, National Compensation Law, Administrative Review Law and Administrative Supervision Law. In 2003, the government promulgated Administrative Licensing Law, which will come into force in July 2004.
• In response to the rectification of legislations, Guangdong People’s Government organized reforms as to issues subject to examining and approving procedures, rectifying the enforcing activities of the provincial government and their internal organizations, canceling 318 issues under examining and approval procedures, shifting 54 issues to be under the administration of non-government institutions and moving 99 issues out of the scope of administrative review and approval.
• GDDOFTEC has standardized enforcing activities within its jurisdiction:
• Reforms in the governmental reviewing and approving system
  November 2001, organizing the reform in administrative reviewing and approving system.December 2001, the Program for Deepening Reforms in Administrative Examining and Approving System of GDDOFTEC were worked out and reported to the provincial government.At the end of 2002, the above program were formally adopted by the provincial government.In April 2003, the provincial government published No. 30 Document, in which, the government published adjusted catalogue of issues subject to review and approval; as for original 76 issues, 45 were maintained, 18 were cancelled, 2 were handed over to authorities at lower level and 11 were deregulated as ordinary issues.
• Establishing and improving accountability system for administrative enforcement
  The Handbook for Administrative Enforcement of Department of Foreign Trade and Economic Cooperation of Guangdong published in 2001 re-defined the accountability system for administrative enforcement of GDDOFTEC, making the accountability system specific to each post , detailing content, basis, procedures, time limit and code of conduct for enforcement, and also highlighting procedures, assessing system and fault accountability system for administrative enforcement.

Response to Investigations on Trade Remedies

• Publicizing and Training
      A workshop on matters as to response to anti-dumping cases and trainings on matters as to technical barriers to trade were held in the province, to enhance the understanding of enterprises on anti-dumping laws, etc.
• Responding actively
• In 2003, among 13 initiated cases involving trade remedies of Guangdong, Guangdong enterprises responded to 12 cases, showing that the enhancement of enterprises’ awareness in law.
• In 2001, Canadian government conducted an anti-dumping investigation on Chinese wind screen manufacturers. Upon request, the investigating authority verified on site the relationship between Chinese government and the windscreen-manufacturing sector, and GDDOFTEC arranged their inspection to the local government. The case was closed in August 2002. The 3 enterprises involved in the case were held to be subject to “zero”anti-dumping duty rate, and the investigating authority recognized that the wind screen manufacturing industry of China were operating towards the orientation of market economy. This was the first case in which that other Member granted market economy status on Chinese industries (enterprises), which was of great significance and also a successful case of Guangdong in safeguarding lawful rights and interests of enterprises by resorting to international rules.
• In 2003, the United States initiated an investigation on furniture and shrimp products from China. Guangdong furniture manufacturers formed a solidarity to conduct non-injury defense, and so did shrimp producers. It had been rare in previous anti-dumping cases that local industrial representatives conduct non-injury defense on behalf of an industry of China.
• Introducing the Market Economy Situation of Guangdong to WTO Members in a positive manner
• Through various channels, Guangdong has been trying to make WTO Members to understand the real status of Guangdong exporters operating under market economic system.
• On October 26, 2003, Mexican anti-dumping officers led by the Vice-Minister of the Ministry of Economy of Mexico visited Guangdong. Foreign trade and economic department of Guangdong arranged them to conduct on-site verifications to enterprises in Dongguan. Through the verifications, the officers of Mexico got acquainted with the operational and management modes of Guangdong exporters and understood the development of market economy in Guangdong, then bore in mind to try to offer fair treatment to Guangdong enterprises in future anti-dumping cases.
• In December 2003, Guangdong hosted the anti-dumping and countervailing symposium organized by MOFCOM, inviting investigating officers of US responsible for investigations on antidumping, countervailing and safeguard measures to discuss the application of trade remedies of China and US, with representatives of enterprises and governmental departments of Guangzhou and at various levels in the province, therefore has enhanced the understanding of the US investigating authority on the development of market economy in Guangdong.

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