A Study On RMB Exchange Rate Subsidies Under The Framework Of WTO

In recent years, the RMB exchange rate controversy intensifies, combined with China’s trade surplus growing increasingly and China’s powerful economic strength, Western countries like the US, with its own economic recession, become more and more anxious. They attempt to seek the sanctions of RMB exchange rate under the framework of WTO. This paper takes comparative analysis of the views and arguments of scholars home and abroad. It takes a literature search and case analysis method. This article is divided into four parts, it describes the theoretical basis and the main content of the RMB exchange rate subsidies, and analysis of some of the legal issues related to the RMB exchange rate, then in order to determine whether it constitutes a subsidy of RMB exchange rate, there must be three preconditions, namely, the exchange rate behavior discussed here must affect the behavior of the international trade; The yuan is undervalued; The WTO has jurisdiction. The main content of the article focused on the second and third chapters, these two chapters lead to the conclusion that under Subsidies and Countervailing Measures Agreement, the RMB exchange rate constitutes a financial assistance, the exporters are conferred a benefit and is export contigency. It leads to that RMB exchange rate constitutes prohibited export subsidies under the WTO’s framework. However, in the fourth chapter of this article, I put forward as long as it is in line with the requirements of the IMF, a country has sovereignty on it’s exchange rate policy, WTO has no right to resolve the problem belonging to the IMF. China should actively use WTO rules and gradually speed up the exchange rate market construction. Research significance of this paper is to recognize that RMB exchange rate constitutes export contigency subsidies under the WTO framework, and come up with some countermeasures for China to take.