| Chinese state-owned enterprises (SOEs) have for some time received a large amount of subsidies from both central and local governments. While changes to Chinese SOEs have taken place during the past three decades of reform, some of these subsidies continue. Since China's accession into the WTO, measures adopted by the Chinese government should conform to the multilateral rules system. The question then becomes whether Chinese government support of SOEs is consistent with the WTO Agreement on Subsidies and Countervailing Measures (SCM Agreement). But measuring whether China is in compliance with the SCM Agreement is not as straightforward as it initially appears for at least three reasons. First, the term "subsidy" employed in daily language is different from a "subsidy" in the context of the WTO rules. Second, some forms of governmental assistance to Chinese SOEs are designed in a complicated way. Third, Chinese SOE reform is ongoing so that new phenomena emerge especially in terms of the state-enterprise relation. Against such a background, an immediate question should be asked that have SOEs received any subsidies during the SOE reform within the meaning of the SCM Agreement, and if so, what types of subsidies have SOEs obtained? To solve the foregoing questions, this thesis examines the SOE reform, identifies the scope of SOEs and reviews the various assistance provided to SOEs. The thesis then attempts to assess which type of assistance provided by Chinese government constitutes subsidies under the SCM Agreement.;Specifically, this study focuses on seven general types of assistance, because they are contentious in practice and complicated in nature, and they also have far-reaching implications. The seven types of assistance refer to undervalued exchange rate, preferential loan, access to the stock market, debt-equity swap, official export credit, land-use rights and energy subsidies. They are followed by an examination of the other types of assistance that are mainly provided to three industries, namely the iron and steel industry, the auto industry and the electronic information industry, on which state enterprises still have a considerable impact. |
