Studies On China’s Auto Industry Policy Legislation Under The WTO Rules

In2001, after joining the WTO, many of our industries are facing a huge impactbrought by the WTO, the automotive industry is one to be affected. In order toimprove the international competitiveness of the automotive industry, and enhance thecapability of independent innovation automobile, the Chinese government formulatedsome provisions, including The Policy on Development of Automotive Industry”,“The Measures for the Administration of Importation of Automotive Parts andComponents for Complete Vehicles” and “The Rules for Determining WhetherImported Automotive Parts and Components Constitute Complete Vehicles”.In2006, the United States, the EU and Canada require to establish a panel forinvestigating China automotive parts tariff policy. However, the Chinese governmentbelieves its policies are legitimate acts of circumvention, the purpose is to prevent theloss of tariff. In October26, As the consultations parties failed to reach any consensus,WTO Dispute Settlement Body formally approved the establishment of a single groupof experts to hear China-Measures affecting imports of automobile parts. The focusof dispute in this case focused on whether China violates the principle of nationaltreatment, general elimination of quantitative restrictions, prohibited subsidiesgranted.Through the program of the WTO and previous WTO case studies, we believethat China’s auto industry policy is essentially a customs duty of managementmeasures, it is consistent with WTO rules without the national treatment; The partsthat meet specific criteria import duties in accordance with the vehicle tariff waspurely a tariff classification method, WTO members has discretion for this, and it alsodoesn’t belong to the requirement of "domestic content requirements".At the same time, due to the import of auto parts constitute defining standardvehicle features are not started, Domestic auto companies also did not get anycompetitive advantage, therefore, China has not granted or maintained prohibited subsidies. In addition, China should be appropriate to relax the restrictions on foreignequity ratio in the future, on the one hand to comply with WTO rules, on the otherhand it can also make use of market mechanisms to encourage competition andpromote the development of the domestic auto companies.In summary, through the research above, the conclusions are as followed: firstly,establish the correct attitude towards WTO dispute settlement and use WTO disputesettlement procedures to safeguard the national interests; secondly，related law andpolicy should be consistent with WTO rules; finally, enhance technologicalinnovation capability, accelerate the development of China’s automobile industry.