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China promises to reduce its average tariff rate on imported farm products from 22 per cent to 15 per cent before 2010 and significantly increase the quota of low-tariff grain and cotton.
What China has done: Tariffs in agriculture have been decreased to little more than 15.4 per cent this year, and import quotas of grain and cotton were increased to 5 per cent of China's total output in 2003 from less than 3 per cent in 2001. In the first half of this year, China exported 3.38 million tons of grain, down 62.4 per cent year-on-year. Meanwhile, the nation's grain imports rose 180 per cent to 4.12 million tons in the same period.
Abstract of China's WTO commitments in the banking sector: China promises to allow foreign banks to do foreign currency business in China without geographical limits on its WTO accession. Foreign banks can do renminbi business with domestic enterprises two years after its entry, with all geographical and customer restrictions to be removed in five years.
What China has done: Foreign currency business was opened fully to foreign banks in 2001. Beginning this week, the number of Chinese cities in which foreign banks are allowed to conduct corporate renminbi business will be increased from 13 to 18. The government has approved Volkswagen, General Motors, Ford and Toyota to carry out auto-financing business. China has allowed foreign banks to hold up to a 20-per-cent stake in Chinese banks, more than its WTO commitments of 15 per cent.
Abstract of China's WTO commitments in insurance sector: China promises to open its re-insurance business upon accession, open its health and pension insurance business within three years of accession, allow foreign non-life insurance companies to establish joint ventures in which they can hold a 51-per-cent stake, and allow foreign life insurance companies to form joint ventures in which they can hold up to 50 per cent. All geographical restrictions will be removed within three years of WTO accession.
What China has done: Eleven foreign insurance firms have entered the Chinese market since accession, bringing the total of foreign insurers operating in China to 39, most being leading international insurers. The 39 foreign insurers opened 70 outlets throughout China. A total of 124 foreign insurance companies have opened their offices in China.
Abstract of China's WTO commitments in securities sector: China promises to allow foreign firms to form joint ventures with Chinese partners to manage investment funds. Their stakes cannot exceed 33 per cent, increasing three years after accession.
What China has done: Eleven overseas investment institutions have been granted qualified foreign institutional investors (QFII). The China Securities Regulatory Commission has ratified 13 Sino-foreign joint venture fund management firms.
Abstract of China's WTO commitments in retail sector: China will phase out restrictions on distribution services for most products within three years of accession. It agrees to lift joint venture restrictions on large department stores and virtually all chain stores within the three years. It will also scrap space restrictions on foreign-owned stores.
What China has done: A regulation on foreign retailers in China took effect on June 1, 2004, allowing foreign retailers to do business freely in major Chinese cities. The rule stipulates removing all geographical, commodity (except tobacco and salt) and share-holding limits on December 11 this year.
Abstract of China's WTO commitments in energy/oil sector: China agrees to gradually open the crude and refined oil sectors to private traders and to cut its state monopoly on oil trading by giving up 4 million tons of oil products and 10 per cent of crude imports to the private sector. China will also open retail oil distribution three years after accession and allow foreign firms at least 30 wholly-owned petrol stations each, and open its wholesale market five years after accession.
What China has done: China has removed import quota management for the three State-owned oil companies -- China National Petroleum (CNPC), Sinopec and China National Offshore Oil -- on January 1 this year. Ten new oil importers were ratified in April, including five independent traders. On August 15, all private oil importers were ratified. In October, French oil giant Total allied with Sinopec to develop petrol stations in China, and in November, British Petroleum signed with Sinopec and CNPC to build petrol stations.
(Business Weekly December 10, 2004)
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