The Analysis On Challenging RMB Exchange Rate As A Subsidy

From Canada was launched in2004to China the first instance of acountervailing investigation, export products in our country are facing anti-dumpingand anti-subsidy double threat.On this basis, I with WTO SCM agreement as theoretical framework, the use ofquantitative analysis and qualitative analysis method, according to the relevantpeople’s currency issue involved in the countervailing investigation, analyzes thecurrent situation of foreign anti-subsidy towards China, found that there are manyreasons for the yuan into a countervailing investigation: first of all, China is the rapidgrowth of foreign trade subsidy cases rising macro background; Second, China’sspecial economic system and the WTO commitments is a principle; Finally, Europeanand American domestic politics is a direct cause.The countervailing of facing the current situation, we put forward some copingstrategies to cope with the growing international countervailing investigations againstChina: Legal countermeasures: mainly by preventing the IMF ruled against theconclusion of our country; Avoid the WTO subsidies and dumping of RMB exchangerate determination; Refuses to pass a country’s domestic law way to respond to solvethe issue of RMB exchange rate, etc. Policy countermeasures: the main way to speedup the exchange rate formation mechanism reform, let the market play a bigger role inthe process of exchange rate; Establish the exchange stabilization fund, to cut off theforeign exchange effect of base money supply channels, alleviate the pressure ofwritten off central bank liquidity; Catch the world of the time, exploring renminbiregionalization, get rid of the dependence on international payments in developedeconomies monetary situation. Reasonable tax system improvement countermeasures:improve to be exempted from VAT, breaks or deferred consumption in the productionof export process inputs of the former stage of cumulative indirect taxes; Unifiedincome tax rate, change the unreasonable tax incentives, cancel the SCM agreementspecified in the various prohibitive tax subsidies, an indirect method to switch to avariety of subsidies for export enterprise and products; Make full use of the not appealsubsidies, for companies, institutions of higher education and research institutions of research and development (R&D) subsidies; Make full use of the developing countriesand transition economies of the terms of the special and differential treatment to resistthe countervailing measures.