Study On Basic Legal Issues Of Subsidy And The Status In China

With China entering into WTO, a great number of scholars put their attention onto WTO legal system study, which reflect that China really regard to be WTO member much. Anti-dumping measure, countervailing measure and safeguard measure are permitted under WTO legal system, which may influence international trade. While, studies on subsidy and countervailing are much less than studies on dumping and anti-dumping at the present in China. It may be resulted from that no countervailing investigation occurred to China. I think Agreement on Subsidy and Countervailing Measures (hereinafter SCM), as one part of WTO legal frame, is very important to us. We should pay more attention on it.This thesis is consists of two parts, five sections in total. The first part focuses on basic legal issues on subsidy. This part analyses the definition and classifications of subsidy under SCM. The definition is simple according to articles of SCM, but it became quite complicated in practice. Therefore, it's necessary to study panel reports and appellate reports on subsidy issues, which gave more explanation on articles of SCM and help us to make correct understanding. The classification is also pivotal because different subsidy measure will result in different reflection by other Member States. Subsidy is a necessary measure in each country, which accelerate speed of economy growth, promote export and protect internal industries when they are in infant period. But on the other hand, it also caused adverse effects to the interest of other Members, and it is also an obstacle to free trade. Consequently, to balance interests of Members of WTO, subsidy is limited and even prohibited some time.As far as China is concerned, to be a formal WTO Member, on one aspect, China must obey each rule under WTO legal framework and SCM, which requires China to remove some subsidy measures, make amendments to another some. On the other aspect, China needs appropriate subsidy means to protect and develop internal industries and promote economy growth. Therefore, in the second part, I based on some typical practices at the present as examples, to analyses whether they are consistent with SCM and other rules under WTO. To give some suggestion then, what we can do, what we cannot, and how we should do in this field.