THE STATE-OWNED ENTERPRISES ISSUE IN CHINA’S PROSPECTIVE TRADE NEGOTIATIONS

THE STATE-OWNED ENTERPRISES ISSUE IN CHINA’S PROSPECTIVE TRADE NEGOTIATIONS

download (6)Hejing Chen and John Whalley

EXECUTIVE SUMMARY
China,in the next few years,faces the prospect of major regional and bilateral trade negotiations possibly
including the Trans-Pacific Partnership(TPP),the Regional Comprehensive Economic Partnership with the Association of Southeast Asian Nations(ASEAN) and Japan,Korea,India,Australia and New Zealand and separate negotiations with India,Korea and Japan,potentially the United States and even possibly the European Union.A likely key element in such negotiations,and one already raised by the United States in the TPP negotiations,is that of trade arrangements involving state-owned enterprises (SOEs).China is viewed from outside as having a large SOE sector,and large SOEs are viewed as having a protected monopoly position in domestic Chinese markets.This paper discusses some of the key sub-issues potentially arising with SOEs in these negotiations.These include:arrangements for SOEs under China’s antitrust laws as well as the operation of these arrangements in practice via case law, and how trade is affected by them;the potentially large increase in Chinese coverage of the World Trade Organization (WTO) governmentprocurement code if Chinese SOEs were to be included under it;the implications of the changing relative size of SOEs and private sectors in China for the“non-market”economy (NME) designation,which China consented to upon WTO accession;and claimed subsidization of SOEs through various devices.

THE STATE-OWNED ENTERPRISES ISSUE IN CHINA’S PROSPECTIVE TRADE NEGOTIATIONS

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