In brief: trade barriers in China

Trade barriers

What government office handles complaints from domestic exporters against foreign trade barriers at the WTO or under other agreements?

The Bureau of Trade Remedy and Investigation (TRB) under the Ministry of Commerce (MOFCOM) is responsible for launching investigations into foreign trade barriers, which may be triggered by complaints from domestic exporters.

What is the procedure for filing a complaint against a foreign trade barrier?

Interested parties, including representatives of domestic industries or domestic businesses affected by the foreign trade barriers, may file a complaint with the TRB, which describes the foreign restrictive measures, the Chinese products or services concerned, and the adverse impacts on the domestic industries. The TRB will decide within 60 days of receipt of the complaint whether to launch an investigation.

What will the authority consider when deciding whether to begin an investigation?

In deciding whether to launch an investigation, the TRB will consider the sufficiency of the evidence submitted by the complainant, and whether the restrictive trade measures concerned constitute a trade barrier. A trade barrier must satisfy at least one of the following conditions:

• the restrictive measure contravenes the international treaties or other agreements, to which both China and the foreign country concerned are members; and
• the restrictive measure harms foreign trade in terms of either market access or competitiveness of the Chinese products or services concerned.

What measures outside the WTO may the authority unilaterally take against a foreign trade barrier? Are any such measures currently in force?

Chinese law only authorises MOFCOM to:

• take remedial action within the framework of the applicable bilateral or multilateral agreements; or
• request consultation or negotiation, or resort to dispute settlement mechanisms under such bilateral or multilateral agreements.

China has taken no retaliatory measures outside the World Trade Organization (WTO) framework against foreign trade barriers. China has brought numerous cases to the Dispute Settlement Body (DSB) concerning foreign trade barrier issues, including, for example, the complaint against measures by the United States government that provided incentives for the use of domestically sourced renewable energy products. There were apparent links between such DSB complaints and the trade barriers investigations previously conducted by the TRB.

What support does the government expect from the private sector to bring a WTO case?

In China, private-sector bodies are not legally obliged to provide financial support to cases brought by the Chinese government to the WTO. In practice, businesses or industry associations concerned are expected to cooperate with the request for information relevant to the WTO cases.

What notable trade barriers other than retaliatory measures does your country impose on imports?

China’s Agreement on the Application of Sanitary and Phytosanitary Measures (SPS) regime consists of a myriad of laws, regulations and national standards. The products covered include food, health food, animals and plants, animal feeds and cosmetics.

The essential requirements of the SPS regime are to ensure that the products concerned conform to China’s mandatory health and sanitary standards. These requirements are enforced mainly through the following mechanisms (which may overlap):

• a mandatory pre-registration requirement, under which specified products, such as cosmetics and health food, cannot be imported or distributed in China without obtaining registration from China’s food and drug regulatory authorities;
• a commodity inspection process that most food, cosmetics and animal or plant-derived products must undergo at the import clearance level, which may entail visual inspection and laboratory testing, depending on the tariff lines of the products;
• a requirement that foreign suppliers of certain animal-derived food products (eg, meat and dairy produce) be listed as ‘approved producers’ by the General Administration of Customs (GAC) through a bilateral protocol between GAC and its foreign counterpart; and
• designation of exporting countries where certain more ‘sensitive’ food products (eg, meat and fruit) are permitted to be imported. The designated countries are usually those that have disease control protocols with China.

The decentralised nature of the SPS regulatory and enforcement structure remains a considerable challenge in complying with this regime.

Similar to the SPS, China’s technical barriers to trade (TBT) also consist of complex technical regulations, rules and standards. These TBT requirements are enforced mainly through a technical conformity assessment system, known as the China Compulsory Certification (CCC). Specifically, products subject to CCC (which include a wide range of products, such as consumer electronics, household appliances and automotive products) are listed in a catalogue published by China’s standardisation and accreditation authority. These products must undergo a certification process, usually conducted by a local branch or designated agent of the Chinese authority in the foreign country of manufacture, to ensure conformity with the Chinese technical requirements. Certified products are allowed to use the CCC marking, which is a precondition for Chinese market access.

Also, as China promulgated the Cybersecurity Law in 2017, TBT measures have emerged applying to the export of foreign information security and network products into China. These measures essentially require that certain specified categories of ‘critical network products’ and ‘network security products’, as well as a broader category of network products supplied to critical information infrastructure in China be subject to different levels of testing, accreditation and national security reviews, to obtain Chinese market access. The grounds for granting or rejecting market access also vary with the products, which include technical conformity, the strength of encryption, a threat to China’s national security and supply chain sustainability, etc. The regulatory measures in this area are still evolving as China continues to roll out new implementation regulations, rules and national standards.

Apart from the SPS measures discussed above, the main agricultural trade barrier is the Tariff Rate Quota, which still impacts a broad category of products, including grain, cotton, sugar and wool, etc.