Concluding remarks by the Chairperson

As we conclude our discussions on China’s trade policies and practices, which have been thorough and constructive, I am pleased to summarize the main issues and Members’ key impressions, including praises, concerns, and expectations for future actions and reforms by China.

This ninth Trade Policy Review of China has indeed given us an excellent opportunity to understand the significant developments in China’s economic, trade, and investment regimes over the last three years, while also highlighting areas where Members expect further improvements. The Review benefitted from the constructive participation of China’s delegation, led by Vice-Minister Li Fei of the Ministry of Commerce, the insightful remarks of Ambassador Dandy Satria Iswara, Deputy Permanent Representative in charge of WTO issues of Indonesia, and the valuable contributions of the numerous delegations that took the floor.

During the review period, supportive macroeconomic policies, increased private consumption, and post-COVID-19 reopening contributed to relatively strong GDP growth, reaching 5.2% in 2023. Some Members showed appreciation for China’s role as a major driving force for global economic growth. However, these developments occurred in a context of heightened geopolitical tensions, growing demographic challenges, and waning productivity growth. Moreover, challenges in the real estate sector added complexity to China’s economic outlook. I was pleased to note that the Chinese authorities are aware of all these challenges calling for decisive action. Such action includes the continued effort in liberalizing the country’s investment framework and in fostering increased involvement of the private sector.

Members acknowledged and appreciated the authorities’ proactive approach in addressing the challenges confronting the Chinese economy. They particularly welcomed the recent reforms and policy priorities set forth in the 14th Five-Year Plan, which underscore the significance of advancing trade and investment liberalization. Members encouraged China to continue and enhance its reform endeavours across several domains, including the judicial system, state-owned enterprises (SOEs), adoption of green energy, and progression towards a digital economy.

Members showed keen interest in China’s business environment, particularly the conditions of foreign participation. They welcomed efforts by the Chinese authorities to further attract foreign investment. Most of them specifically commended China on its continued liberalization efforts, which have further allowed foreign-funded companies to invest in important sectors, such as manufacturing. But they also voiced concerns regarding issues such as the opaque application of certain regulations and discriminatory treatment against foreign-funded companies, which appeared to undermine the benefits of China’s liberalization measures.

A common theme in Members’ statements was the significant role of China within the WTO, with a strong expectation that China further enhances its constructive engagement. Members expressed appreciation for China’s contributions to the WTO’s efforts, particularly its active participation in various initiatives, such as the joint statement initiatives and the ongoing negotiations on the Fisheries Subsidies Agreement. China’s involvement in WTO dispute settlement reform discussions and its participation in the Multi-party Interim Appeal Mechanism (MPIA) were also acknowledged. Members conveyed their hope for China to lead by example. At the same time, Members encouraged China to assume the responsibilities that come with its economic weight and play a corresponding role in the WTO. In this context, several Members urged China to commit itself to refrain from claiming WTO developing country status in the future or voluntarily withdraw from those who stands to benefit from the Special and Differential Treatment provisions in the WTO Agreements.

Some Members considered that in order for China to take on responsibilities that could match its economic significance, it would be crucial for its authorities to consider reducing negative spillovers emerging from China’s domestic and trade-related policies and practices. They expressed concerns about certain practices, such as economic coercion and the use of economic measures for political reasons, which undermined confidence in China’s assertion of being an open, rules-based, transparent, and non-discriminatory economy.

Many Members reiterated their demand for China to increase transparency in its state support framework. Considerable scepticism remained among Members about the thoroughness and overall quality of China’s subsidy notifications. In addition to the lack of transparency, many Members believed that China’s subsidies distorted global markets and promoted overcapacity. Some Members urged China to join other major economies in discussions on industrial policies to help mitigate their possible negative global impacts.

The role of the State and the importance of SOEs in China’s economy remained an issue for numerous Members. A particular issue was the absence of a competitive neutrality framework for SOEs. Several Members highlighted that the size of China’s economy and the significant presence of SOEs could have profound impacts on global markets. They urged China to pursue more extensive reforms of its SOEs and adopt international standards and best practices to enhance productivity growth and business performance.

Several Members raised concerns about China’s imposition of restrictive SPS measures on certain agricultural products and other foodstuffs from various partners. Some argued that these measures lacked scientific justification and were not in line with relevant international standards. China was requested to promptly reconsider its stance on these issues and refrain from using measures that create non-tariff barriers. Some Members also voiced concerns about China’s growing implementation of technical regulations that diverged from established international standards.

Some Members encouraged China to further submit its revised market access offer, with the view to expediting its accession to the Agreement on Government Procurement. Some Members also noted that China remained closed in many important sectors in that regard. Other Members observed that Chinese entities are being encouraged through informal state intervention to reduce their procurement of imported high-tech inputs in favour of domestic producers. This perceived trend towards import substitution and self-sufficiency by China was highlighted as a growing concern.

On intellectual property, while some Members continued to highlight a lenient IP framework, including problems that could relate to forced technology transfer, others commended recent reforms by Chinese authorities that have improved the country’s IPR enforcement framework. China was urged to intensify its efforts and aim at fully eradicating IPR violations.

The substantial number of questions, over 1,500, posed to China during this Review, alongside interventions by 72 Members, including on behalf of groups of Members, underscore the importance of China in the multilateral trading system. I encourage the Chinese authorities to carefully consider the constructive suggestions put forth by Members during this Review. I commend China for providing thorough written responses to all questions received within the prescribed deadline, and delegations anticipate receiving the final responses within one month.

In conclusion, I extend my gratitude to all delegations for their contributions to the successful Review of China’s trade policies and practices.

The Review will be concluded when the outstanding and follow-up written questions have been answered by China within one month. I thank you for your participation. I thank the Secretariat and interpreters for their wonderful contributions in facilitating the entire process and organizing this TPR. Before I close, please note that the next meeting of the Trade Policy Review Body will be on 25 and 27 September 2024 to discuss the TPR of Kazakhstan. With this, I declare the meeting closed.