A Study On The Legal Issues Of Subsidies To China's State-Owned Enterprises Under The WTO Framework

Subsidies to China's State-Owned Enterprises (SOEs) under the WTO framework are not only generally subject to the Agreement on Subsidies and Countervailing Measures (the SCM Agreement) which is the corn of WTO subsidy disciplines, but also particularly subject to the legal documents on the accession of China to WTO. This paper first analyzes the WTO rules with respect to subsidies to SOEs, and then, under the framework of these rules, try to discuss the domestic issues under the perspective of international law and discuss problems of subsidies to China's SOEs together with the question of how to reasonably utilize WTO subsidy disciplines, with the purpose of presenting a guide for China. This paper includes four chapters besides the preface and conclusion.Chapter 1 introduces the general rules stipulate subsidies to SOEs under the WTO framework. First from their existing basis, then turns to special rules under the SCM Agreement about subsidies to SOEs, including the definition and exceptional rules to developing countries or transition economy states.Chapter 2 analyzes the types and nature of subsidies to China's SOEs. There are mainly four types, including tax preference, policy-related subsidies to cover enterprise losses, preferential loans and funds for special purposes. Subsidies to SOEs may be specific and actionable which are subject to the SCM Agreement. They will cause potential trade effects to international trade.Chapter 3 discusses the special rules of China's accession documents with respect to subsidies to SOEs. Take the interface theory as the jurisprudence basis of the special rules on subsidies to China's SOEs. Then this paper provides an analysis of the special rules towards the issue of subsidies to SOEs, involving the specificity standard about subsidies to China's SOEs, the non-market economy methodology for calculating subsidies, the exclusion of China from the privatization exception and the absence of any transitional period for China to phase out its subsidies to SOEs. These special rules have turned out to reflect a growing sentiment in the world fearing the impact of China's rise as a new economic power.Chapter 4 takes chance of the new trade disputes we're facing with, pointing out the governmental attitude and countermeasures to the problems of subsidies to China's SOEs. Our government should not only clean up and adjust the subsidy policy to SOEs, but should also learn to make full use of WTO disciplines.