Review Of Chinese Foreign Trade Subsidies Policy And Response To The Amendment Of American Countervailing Laws

In the modern world, the competition of foreign trade between countries is becoming fierce gradually. In order to promote the development of domestic economy, every government takes many measures to protect their own commerce profits and strengthen the competition ability of exporting products in the international markets, such as economic, political and legislative measures. Since the entry into the WTO, the foreign trade of China is increasing in the high speed, which promotes the development of domestic economy effectively. However, a great number of cases on trade friction have come out after these satisfactory achievements. Specially in the recent years, the effect of countervailing measures, which have come out not long ago, are becoming more an more serious in the Chinese foreign trade fields with anti-dumping measures.With the developing of world economy, subsidies and countervailing measures are always very important in the global trade system. On the one hand, subsidies are rather essential to achieve their goals on trade and finance as governments' policy; On the other hand, subsidies are able to affect production and trade, which distort the distribution of resource and make production go against the market principle. Therefore, the influence of subsidies is profound to economy on many aspects, such as social welfare, international competition ability, terms of trade, exchange rate, economy of importing and exporting countries, income distribution, and so forth.Since Canada initiated countervailing investigation to China in 2004, the USA is also trying its best to find out some possible measures to apply its countervailing laws to China. Although the effect of countervailing measures to China is not obvious at present, we are able to forecast that it will gradually becoming one of important means to suppress the foreign trade of China in future taken by developed countries after anti-dumping measures. Therefore, we government and enterprises must be more active. At the same time with improving market economy systems, we should try our best to adjust unreasonable subsidies policies in our country; covert industry subsidies measures and enhance the research and construction on legislation of countervailing duties, so as to adapt well to the requires from the ASCM of WTO and stick up for our native benefits in the greatest extent.The thesis makes analysis on the economic effects of subsidies and countervailing measures from some aspects on the base of domestic and foreign data. In order to make the analysis more accurate, it adopts methods from Game theory. Meanwhile, it brings forward some possible countermeasures to convert Chinese industry subsidies policy on the background of this brand-new countervailing situation.