Study On China’s Subsidies Under SCM Of World Trade Organization

Today, the reason why countries whether including developing and developed countries usesubsidies frequently, precisely because the subsidies play a key role in protection, competition orfoster of the enterprise or industry, and in favor of the social and economic development. Sincethe late1970s, under the guidance of reform and opening up policy, China has introduced a hostof preferential policies to encourage exports, which objectively promote the economicdevelopment and opening up rapidly. China has already become an international trading power.After China’s accession into the WTO, China makes full use of the excellent environment of tradeliberalization, our products enjoying the comparative advantages of the great labor and rawmaterials, and seizing the international market with low price competition, keeping trade surplusto the United States, Canada and European Union for several years. China’s rapid export growth inthe huge trade surplus constitutes a greater pressure on the trade deficit countries. In order toalleviate the resulting competitive pressures and protect their own products and enterprises, manytrade partners crazily collecting countervailing duties while they shift the focus of economicsystem in domestic to "China threat theory". After the antidumping, countervailing has become aedge tool to imports products of China. After becoming the member of WTO, China has cleanedand amended subsidies system according to SCM requirements and the Protocol on the accessionof the People’s republic of China. But the countervailing measures never stop and significantcharacteristics. The characteristics are those the countervailing measures are so strong and focuson the few industry be involved and be launched with antidumping. In2004, Canada, wholaunched the first anti-subsidy investigation to China, opened the door to the implementation ofcountervailing measures. Today, a new round of trade remedy tide to China has began, that is thecountervailing remedy tide. From2006to2011, China has became “the most suffered country”on countervailing all over the world. Why so many countervailing happened to us? We havecleaned and amended subsidies system according to the rule. What wrong with our subsidysystem? What do we need? These are important things to us.After defining and classing the subidies and countervailing, this article analyzes the mainreason why the countervailing has launched by countries from external reasons and internal reasons. Except the trade surplus, China will be a “Market Economic Status” on2016is one ofimportant reasons. The countries who don’t recognize the market status of China have found theway to remedy to us, because they can’t use “subrogate country” policy on our products. Thecountervailing is the most way they can find. The problem is still unresolved in our system,although we cleaned and amended subsidies system. After summed up all cases which hadlaunched, we can find the countervailing measures are very extensive. It involves tax preference,preferential loan, low prices infrastructure investment and raw materials in projects, subsides ofthe State-owned Enterprise and so on. And the focus are Public Body and the Specificity Standardof subsides. From two problems, we can grasp further the characteristic of subsides system. Andthen, the important problem will be find and slove.