Policy Loans Wto Compliance

Ever since Canada initiated the first anti-subsidy investigation of products originating from China in 2004, WTO members have gradually begun applying countervailing duty law to products originating from China. Anti-subsidy investigation in this regard conducted by United States and Canada shows a rising trend, amongst which, "policy loans" granted by Chinese policy banks and state-owned commercial banks to specific enterprises has attracted extensive attentions of WTO members. More than half of the anti-subsidy investigations conducted both by United States and Canada involve the investigation of loans provided by Chinese policy banks and state-owned commercial banks. From the perspective of United States and Canada, these "policy loans" constitute financial contributions from Chinese government and are specific to certain enterprises since policy banks and state-owned commercial banks are controlled by the government, thus many policy lending programs were identified as constituting subsides under WTO laws by them. As a result, Chinese policy loans'compliance with WTO laws shall be worthy of our consideration.This thesis is divided into four chapters. The first chapter systematically introduces the contents and types of policy loans and makes detail analysis of the meaning and form of the "policy" thereinto and the relations between policy loan and the "policy" This chapter also points out that the "policy" thereinto shall be documents which bind upon lenders and only are there sufficient evidences proving direct causations between the "policy" and the "loan", a loan could be regarded as a "policy loan". The second charter analyzes main disputes aroused out of Chinese policy loans' compliance with WTO laws through the introduction and analysis of anti-subsidy investigations conducted by United States and Canada against Chinese policy loans. The third chapter, through the analysis of the rules of loan providing under WTO laws, probes into the issue that what kind of loans are prohibited by WTO anti-subsidy rules. This chapter also probes into whether Chinese policy loans constituting loans prohibited by WTO laws with respect to the subject, the specificity and the benefits of loans provided by state-owned commercial banks through the analysis of the arguments regarding the compliance of the said loans with WTO laws held by United States and China in the WTO "double-remedies" case. Furthermore, this chapter points out that the most important evidence in this "double remedies" case is the proof of causations between the alleged policy loans between related industrial policies, in case of lacking such evidences, no loans provided by state-owned commercial banks shall be regard as "policy loans". The fourth chapter makes some suggestions regarding how China shall deal with the compliance crisis of policy loans and points out that China shall improve relevant legislations and adjust relevant industrial policies to make it consistent with WTO laws and shall actively cope with such investigations by adjusting the mentality of response.