On China's Export Tax Rebate System And The WTO Subsidy Rules Compliance

With rapid economic development, China surpassed Germany on merchandise exports as the world superpower in 2009 and surpassed Japan as the world's second largest economy in February 2011. This makes China be in the center of international trade friction. Countervailing charges have now become the focus, while export tax rebates, tax incentives system have always been accused by international anti-subsidy investigations.China's export tax rebate system has long been criticized by other countries, saying it as an export subsidy. Along with other subsidies, China's export tax rebate system has frequently encountered issues to the WTO anti-subsidy complaint in recent years. However, with a long history, the export tax rebate has been a system which is widely accepted around the world with its neutral character. Generally accepted but frequently criticized, the system apparently has some contradiction to the rules of WTO subsidies.In this article, the author explains China's export tax rebate system and the rules of WTO subsidies (particularly rules related with the export tax rebate), define and explain the compliance of "China's export tax rebate system" with "Rules of WTO subsidies" based on other countries' subsidy complaint on China's export tax rebate.The entire article is divided into five chapters, the author first introduces in the first chapter of the current situation China is facing upon the anti-subsidy prosecutions caused by the export tax rebates, thus put up the issue whether China's export tax rebates system is in compliance with WTO subsidy rules; In the second and third chapters, the author discusses, respectively, the export tax rebate and WTO subsidy rules their basic theory and background; In the fourth chapter, discusses China's export tax rebate system in practice in the perspective of anti-subsidy complaint, including the export tax rebate subsidy rules and China's commitment to them, the risk parts of China's export tax rebate system (include a table regarding the complaint of other countries in the name of the export tax rebate), and the compliance of the export tax rebate system. In the fifth chapter, the author discusses three major misunderstanding people have toward China's export tax rebate system, and make suggestions to the reform and modification of the system.