China, subsidios

JUl21

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The report details two decades of false promises made by China since joining the WTO: * China’s subsidies have led to overcapacity, with several of their industries maintaining programs that are in direct violation of WTO subsidy rules. * Since joining the WTO, China has not submitted a complete notification of subsidies maintained by the central government and did not notify a single sub-central government subsidy until July 2016.

As of 2019, the University of Pennsylvania ranks ITIF as the most authoritative science and technology policy think tank in the world. http://www.businessghana.com/site/news/general/243291/20-Years-After-Joining,-China-Still-Shirks-WTO-Commitments; https://itif.org/publications/2021/07/26/false-promises-ii-continuing-gap-between-chinas-wto-commitments-and-its 

(BALANÇO)

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the

U.S.-led coalition has been arguing that the existing WTO

rules are insufficient in dealing with the problems created by

China’s state capitalism.92 At the 11th WTO Ministerial

Conference in Buenos Aires, the United States, the European

Union and Japan issued a joint statement condemning “severe

excess capacity in key sectors exacerbated by governmentfinanced

and supported capacity expansion, unfair competitive

conditions caused by large market-distorting subsidies and

state owned enterprises, forced technology transfer, and local

content requirements and preferences” as “serious concerns

for the proper functioning of international trade.”93 To address

these concerns, they vowed to enhance trilateral cooperation

in the WTO and in other forums.

While no WTO Member may claim a perfect record in subsidy notifications, China’s

failure in fulfilling that obligation seems to be particularly

egregious. This seems to be a perennial problem, which the

USTR U.S. trade representative has been complaining about ever since China’s

accession to the WTO.

Frustrated over the slow progress, the

United States invoked Article 25.10 of the SCM Agreement to

file a ‘counter notification’ in October 2011, which identified

more than 200 unreported subsidy measures.109 To address the

problem, the joint draft by the United States, the European

Union, Japan and Canada on strengthening the notification

requirements proposed some rather drastic measures, such as

naming and shaming the delinquent Member by designating it

as “a Member with notification delay,” curtailing its right to

make interventions in WTO meetings and nominations to chair

WTO bodies, and even levying a fine at the rate of 5% of its annual contribution to the WTO.

First, with regard to the new substantive issues being

proposed, while China expresses willingness to consider some

of the issues, such as electronic commerce and investment

facilitation, it objects to many proposals. For example, one of

the five suggestions in China’s position paper is the need to

“respect members’ development models,” which means that

China “opposes special and discriminatory disciplines against

state-owned enterprises in the name of WTO reform.”118

Second, on the procedural issue of subsidy

notifications, China adopts a dual-track approach. On the

defensive side, China proposes that developing countries only

comply with the notification obligations on a best-endeavor

basis,124 and should receive more technical assistance for that

purpose.125 On the offensive side, China throws the ball into

the court of developed countries by calling them to “lead by

example in submitting comprehensive, timely and accurate

notifications” and “improve the quality of their counternotifications.”

Henry Gao

Mai21    [A China no centro da polémica - há uma atenção especial em relaçãpo ao que faz a China]

The World Trade Organization forbids subsidies designed to promote exports or expand domestic production. Some claim spending on the steel industry, which led a global steel glut, violated the WTO rule. However, lacking data, the WTO has not been able to lodge a complaint. 

Still the WTO does not forbid all subsidies, with many countries giving support to their home industries. Japan, for example, provided roughly 50 billion yen ($457 million) to Mitsubishi Heavy Industries for the development of its SpaceJet. 

The U.S. and the EU have been fighting over the legitimacy of each other's subsidies for Boeing and Airbus since 2004. 

Meanwhile, China has been using subsidies, along with low-interest loans, to nurture domestic industries. The pandemic undoubtedly entailed an increase in such spending in 2020 as seen in the case of rolling stock maker CRRC, which received subsidies to maintain employment.

Nevertheless, state-backed companies, which account for just a third of listed businesses, collected roughly 60% of the money, indicating an uneven playing field. 

"The central government has yet to grasp the scope of subsidies by local governments," said Shinichi Seki, a senior economist specializing in China at the Japan Research Institute. That lack of transparency could end up allowing excess capacity just to maintain employment and economic momentum.

To counter China's use of subsidies, U.S. lawmakers are calling for a similar program. A bipartisan group of lawmakers is considering $50 billion in subsidies to expand domestic chip production, with the support of President Joe Biden. 

https://asia.nikkei.com/Politics/International-relations/US-China-tensions/Eyeing-US-China-wields-33bn-subsidies-to-bolster-chips-defense 

In an April 2013 article, Chinese media NetEase revealed that the CCP has never stopped its practice of providing various subsidies to state-owned enterprises, either directly or indirectly.

“China joined the World Trade Organization (WTO) and signed the Agreement on Subsidies and Countervailing Measures. This rule is directly related to the specific policies of financial support for enterprises. It was formulated to prevent subsidies from distorting normal market competition,” the article said. “By 2005, although the Chinese government had cancelled the operating loss subsidies for most state-owned enterprises, there were still various methods that provide hidden subsidies.”

For instance, from 2007 to 2009, China’s state-owned and state-controlled industrial enterprises received approximately $30.2 billion in financial subsidies. From 2008 to 2009, two aviation companies, five power groups, and two power grid companies received about $2.4 billion from the State-owned Assets Supervision and Administration Commission of the State Council.

In March last year, Xinhua News Agency also published an article stating that more than 100 companies received large subsidies from the government.

“Listed companies reveal that the subsidies they received this year from the government increased significantly [over previous years]. At least 102 listed companies received huge sums in government subsidies since March this year. A number of them received subsidies of more than 100 million yuan ($15.5 million),” the article said.

China National Petroleum Corporation (CNPC) and Sinopec are among the most profitable state-owned enterprises in China. Still, they received more than $10.8 billion in government subsidies, according to the Xinhua article.

Both companies also revealed the subsidies granted to them in their annual reports. Sinopec received $700 million in 2006, $1.9 billion in 2007, and $7.8 billion in 2008; while CNPC received $2.4 billion in 2008 and $200 million in 2010.

https://www.theepochtimes.com/chinas-subsidies-for-listed-companies-total-33-billion-prioritizing-defense-and-semiconductor-sectors_3824832.html