The Cause And Strategy Analysis Of The Countervailing Against China

Countervailing is recognized as an important Trade Remedy Measure by WTO; it can effectively reduce the distortions of the international market because of subsidies and maintain a normal global trade order. However, with the Intense international competition, the rapid rise of the new industrial countries and the continued downturn of U.S. and European economies after the Financial Crisis, countervailing measures have gradually evolved into a covert means of protection, by which developed countries can curb the economic development of developing countries. Trade friction in the international community also has developed from micro-enterprise level to macro-government levels. At present, more than70%global countervailing cases are against China. As one of the most active country in the international trade, China has become the focus country in countervailing investigation. Frequently countervailing allegations caused a serious impact on China’s macroeconomic policies formulation and development of international trade. Therefore, it is particularly important to understand and research subsidy and countervailing issues systematically and comprehensively. This paper focuses on the causes and strategies for countervailing investigations of China, trying to understand the multilateral rules and the unilateral laws of world’s major countries under the WTO framework of countervailing and analyze China’s countervailing status, trends and features by qualitative analysis, cross analysis, empirical analysis. Based on these analyses, it sums up the underlying causes of the foreign countervailing Investigations, and proposes suggestion for China’s countervailing measures.Based on the above ideas, this article is divided into six sections:the description of each section is as follows:Section1is Introduction. In this section, it clarifies the background and significance of this thesis, introduces the idea, methods, as well as innovations and deficiencies of this research. In addition, it briefly presents the research status on Subsidy and Countervailing of China and abroad. At this stage, foreign literatures mainly discusses the advantages and disadvantages and necessity of the Subsidies and Countervailing from the traditional trade theory and strategic trade theory, while domestic scholars are more inclined to investigate the countervailing duty law, and actively explore the impact and trends of countervailing on China’s economic.Section2is Foreign Subsidy and Countervailing Legal Mechanisms. This section focus on Policy interpretation of multilateral rules of the international anti-subsidy (WTO "SCM Agreement") and unilateral rules (for the analysis of anti-subsidy legislation in the United States, European Union and Canada), proposing the dilemma of the market economy status, and analyzing the countervailing practice of the U.S., EU and Canada against China.Section3analyzes the Status and Motivation about China suffering foreign countervailing. Firstly, it lists the objective data of countervailing investigations in our country over the years, and summarizes the current countervailing situation faced by China from the number of characteristics, country characteristics, industry characteristics and formal features of initialization respectively. Secondly, this section analyzes the underlying causes of our country under frequently countervailing investigations, including the main reason at the national level and objective reasons at the international level, involving political, economic and legal aspects.Section4is the Influence of Countervailing on the development of China’s foreign trade. It starts from a theoretical analysis of economic effects by the two-country model, concluding that subsidies make the domestic prices of goods rise and the export volume increase. However, countervailing measures can not only attack the export of Chinese products, but also indirectly transport China’s government subsidies to international markets, which has a negative impact on China’s export. In addition, this section summarizes the profound impact of the countervailing investigations on the development of China’s trade, and elaborates from five aspects:Products�'industrial chain�'the industrial policy�'Institutional impact�'herd effect.Sections is the countermeasures research and suggestions about China’s response to the international countervailing. Based on the former analysis, it proposes responding measures for government, industry associations and export enterprises. Government agencies should refer to the countervailing legal regulation of domestic subsidies, rules and countervailing regulations, and actively build countervailing early warning mechanism; industry associations should play an important role in communication, vigorously promote the professional quality, improve the scientific personnel training system, and help businesses respond to action actively; enterprises should strengthen technological innovation to enhance the core competitiveness of products, the optimization and upgrading of industrial structure, and actively implement the strategy of going out under the conditions allowed.Section6is conclusion. Countervailing complaint is a real threat for China in a long-term. The subsidy policy changes or adjustment of the export strategy can not be achieved overnight, we need the joint efforts of governments, industry associations, businesses, and more scholars, so China’s anti-subsidies has a long way to go.The innovation of this paper is mainly reflected in the following two aspects:Firstly, from the subject of the study, this paper focuses on anti-subsidy legislation in the U.S., EU and Canada. Combined with the present situation of China, it studies the countervailing multilateral rules and unilateral rules comprehensively and comparatively.Secondly, countervailing action and countermeasures is the focus of this study. It analyzes from the aspect of government, industry associations and enterprises comprehensively and deeply, concluding the characteristics of the foreign anti-subsidy measures, motivation, trends and the impact on China, and then summarizing up the scientific coping strategies. One of the innovations of this paper is the normative and systematic analysis, and the viewpoint of using practice in the theory.