The Cause And Strategy Analysis Of The Anti-subsidy Against China

China is playing a decisive role in the great development of the international economic intercourses. The development of the economic level, the extent of the international participation and the deepening of the economic exchange are the characteristics of the development of China. Meanwhile, the entry of WTO provides a great opportunity of the global competition. However, the anti-subsidy, as one of the three trade relief measures, is becoming the hot topic in the trade development. As the anti-dumping measure can no longer limit the progress of China, anti-subsidy is commonly used to restrict the exporting of China. The domestic analysis is less on the account of the less happened cases than the anti-dumping cases. This thesis makes the research on the reason and strategy analysis of the anti-subsidy against China.The paper includes six parts.The first part is the basic introduction and the background illustration of the subsidy and anti-subsidy. It mainly illustrates the necessity of the anti-subsidy case research and the background of the happened cases of the anti-subsidy against China. The anti-subsidy cases against China commonly happen in the recent years, which is in the rigorous situation. It is about the previous analysis on the anti-subsidy. The scholars have already done a lot research on the subsidy and anti-subsidy home and abroad. The main theory references are the traditional trade theory and the strategic trade theory. These two theories have different focuses on the economic liberalization. The traditional trade theory is against any form of the subsidy. The strategic trade theory is for the subsidy as it benefits the market configuration. These two theories are not totally opposite to each other, but interlinked. Because of the different research models and premises, the conclusions are different. According to the development of the trade, the subsidy promotes the economy. Therefore, the strategic trade theory is more reasonable in reality. The second part is the overview of the subsidy and anti-subsidy. The subsidy means the financial or the price support to the certain enterprises or industries by the government or the public institution. The aim of the subsidy is to help the concerning enterprises to gain the comparative advantages, which has strong influence on the international competitiveness. The direct function of the subsidy is to benefit the price competition.According to the Agreement of the Subsidy and Countervailing measures, the subsidy includes the prohibited subsidy, actionable subsidy and non-actionable subsidy. The prohibited subsidy includes the exporting subsidy and substitute subsidy. Once the prohibited subsidy is confirmed, the countervailing measures could be adopted without the clarification of the impingement. The actionable subsidy is permitted in a certain scale. The actionable subsidy confirmation is determined by the impingement reality. The non-actionable subsidy could not be sued. The countervailing measure can not be adapted to the investigated country. The non-actionable subsidy includes the non-specific subsidy and specific subsidy. The specific subsidy is commonly known to the public, which is usually adopted in the R&D, for the backward areas and for the environment protection. The function of the subsidy lies in the reduction of the operating cost, expanding the export, increasing the income of the foreign exchange and revenue, facilitating the main industries and infant industries, upgrading the economic structure and reinforcing the R&D. Therefore, the anti-subsidy is inevitably coming out. The anti-subsidy means the investigation and the anti-subsidy measures which is issued by the departments of the importing nation according to the request of the concerning industries in the native country. The anti-subsidy measure includes the countervailing duty and the counter measures. The foreign and domestic investigation procedures are different.The third part is the present situation analysis of the anti-subsidy case against China. China is the N0.2 countries which are initiated the anti-subsidy case. The most frequent anti-subsidy cases against China are initiated by America. The anti-subsidy case on the steel of the George Town was failed because of the non-market economy status, although the impingement actually existed. The international court still upheld the verdict of the preliminary one. Then in the 1991, the electric fan was sued to the department of the commerce. And in this phase, America defined the market-oriented industry in the non-market economy nation. The steel is the main material of the electric fan. However, the price of the steel is not determined by the market. According to this term, the request of the anti-subsidy treatment was not approved. The anti-subsidy against China on the coated paper in 2006 is the turning point of the trade between China and America. The investigation ran on 13 aspects. After the adjustments of the anti-subsidy laws, the International trade court of America judged that China is no longer in the scope of the non-market economy country protection. But the lack of the actual impingement made the anti-subsidy sanction fail. The adjustments of the legislation and policy cause the change in the trend of the trade.According to the analysis of the three main initiated countries and regions, this paper summarizes the characteristics of the anti-subsidy against China. They are the frequent investigation, the inequity of the treatment in the anti-subsidy case, the large sum of the money involved, commonly happened in the labor-intensive industries and initiated by some developed countries.Considering the characteristics above, the fourth part concludes the reasons of the anti-subsidy cases against China as followings. Firstly, the adjustment of the subsidy policies is in urgent need. The exporting subsidy and the substitute subsidy must be banned or shifted immediately. Once any foreign country initiated the anti-subsidy on this term, our country is likely to be sanctioned. There is still a large part in the non-actionable subsidy for us to use. Secondly, the policies on the subsidy are imperfect. Because of the unfavorable beginning of the development, the attractive tax policies are carried out to promote the economy. The tax rebate system and many kinds of the supporting funds are easily judged as the actionable subsidy. Thirdly, the legislation on the subsidy and anti-subsidy is still lack. Although we have already made lot improvements on the legislation, there are still some problems to solve. For example, the definition on the subsidy is not concrete. The regulation is less as well. The perfection of the legislation and the procedures are in urgent need. The fourth is the enterprises' lack of the coping ability. The awareness and the measures are lagging. The fifth is the economic environment around the globe. Because of the raise of the economic level and the China Threat Theory, some countries take the anti-subsidy as the tool to suppress the economy development of our country. It is usually called as the second area of the political war, which makes the economic situation more severe than ever before.Basing on the analysis above, the fifth part gives the suggestions for the anti-subsidy cases against China in the aspects of the governmental behavior and the enterprise behavior.In the aspect of the governmental behavior, the first strategy is to make the most of the concerning regulations on the subsidy. In the permitted scope, the utilization of the subsidy plays a promoting role in the development of the domestic economy. The legislation of the subsidy is an effective way to avoid the anti-subsidy investigation. The limitation of the prohibited subsidy, proper use of the actionable subsidy and the utmost use of the non-actionable subsidy are the concrete explanation of this strategy. For example, the west development is a great chance for the use of the non-actionable subsidy. Shifting the form of the subsidy could legally promote the economic development. The second strategy is to perfect the subsidy and anti-subsidy legislation. The Foreign Trade Law and Regulations on Subsidy and Countervailing Measures of the People's Republic of China needs to be improved according to the international practice, which has the power to regulate the subsidy utilization and the protecting procedure. The third is to perfect the supporting policies for the domestic enterprises. The assistance on the information and the R&D investment are beneficial to the coping ability of the enterprises. Besides, the favorable terms for the developing countries could be referred to use. The adjustment of the tax policies is essential. These five strategies are all in the aspect of the government behavior.In the respect of the enterprise behavior, the companies could take the measures as followings. The first is the optimization of the exporting structure. The labor-intensive-oriented exporting structure has to be reformed so as to realize the industry upgrading. The second is the making use of the guild. The guild could help the enterprises to coping the anti-subsidy case in various ways, such as publicizing the concerning knowledge, the cooperation with the government and chamber of the commerce, the supervision of the industry development, giving suggestions on the pricing, and so on. The third is to enhance the enterprises'enthusiasm to cope with the pleading. The enterprises could do more on the publicity and education of the subsidy and anti-subsidy knowledge, the training of the professionals, the increase of the investment on the R&D, and so on.