Reform gives US 'hope about trade'

Washington has new hopes for fairer trade since Beijing endorsed a "decisive role" for market forces, an annual report on China's World Trade Organization practices has suggested.

The United States is "encouraged" by a number of far-reaching economic reform pronouncements drawn up at the Third Plenum of the 18th Central Committee of the Communist Party of China, according to the 2013 Report to Congress on China's WTO Compliance, which was released on Tuesday.

The report is compiled by the Office of the US Trade Representative.

The decision purports to present one of the largest and most ambitious economic reform programs, and the US is "encouraged by these broad policy pronouncements and will closely monitor China's implementation measures to determine how and to what extent China follows through on them", according to the USTR report.

Among the biggest draws are the broadening of foreign investment access in China, exploration of the possibility for national treatment at all phases of investment and the employment of a "negative list" approach in identifying exceptions. 

The report recognized the many "impressive steps" China has taken to implement its commitments following accession to the WTO in 2001. 

Notable developments this year to reinvigorate the market economy included China's readiness to focus on a high-standard bilateral investment treaty with the US and the creation of the China (Shanghai) Pilot Free Trade Zone as a way to test the waters of trade and investment liberalization. 

These initiatives, if realized, would provide tremendous benefits not only to China but also to its trading partners, including the US, the report said. 

But it also called for eased market restrictions on imported goods and foreign suppliers, as well as a lifting of government subsidies and to guidance that's imposed on State-owned enterprises.

"China continued to pursue industrial policies in 2013 that seek to limit market access for imported goods, foreign manufacturers and foreign service suppliers, while offering substantial government guidance, resources and regulatory support to Chinese industries," it said.

The USTR also called on Beijing to overhaul its legal structure in order to better protect intellectual property. 

The report has aimed to act on behalf of US businesses and serves as the "agenda-setter" in the China-US Strategic and Economic Dialogue, said Wu Xinbo, director of the Center for American Studies at Fudan University in Shanghai. 

Wu said the report provides a comprehensive and frank retrospect on China's WTO compliance. 

"The report is nothing but conventional rhetoric. The US is among the biggest beneficiaries of China's WTO membership. So the basic tone of the report is set to be positive," said Jin Canrong, a Sino-US relations expert at the Beijing-based Renmin University of China. 

But the US is eyeing further moves for banking relaxation to cash in on the lucrative financial segment, so "it has to act tough on certain fronts", said Jin, referring to the US' consistent appeal for lower market threshold.

"Export growth from the US to China has jumped significantly in the past few years, while Chinese investors are stepping up investment across the US. That is to say, Americans will increasingly value the Chinese market and appreciate Chinese-led capital," Wu said. 

The report came on the same day that China said it will reinvestigate US poultry product shipments for potential violations of trade terms, after the WTO ruled against penalties that the government imposed on imports.

According to a statement by the Ministry of Commerce, China will seek evidence that US white-feather poultry products were subsidized and sold below cost.

Earlier this month, China filed a complaint under the WTO's dispute settlement mechanism over anti-dumping measures by the US against 13 types of Chinese products.

The US has so far brought 15 WTO cases against China since Beijing's membership started in 2001, which is more than twice as many WTO cases as any other WTO member has brought against China.

The US allegations may have touched the core of China's compliance problems, which largely lie in the contradiction between international rules and domestic laws, said Yao Weiqun, associate president of the Shanghai WTO Affairs Consultation Center.

Yao said that a further push is needed to accelerate China's opening up to foreign goods and services, as well as to reform State-owned enterprises and improve the rule of law to allow fair competition.