China Notifies WTO of State Trading Enterprise Imports and Exports

The WTO circulated today a notification from China submitted on October 19, 2021 entitled "New and full notification pursuant to Article XVII:4(a) of the GATT 1994 and paragraph 1 of the Understanding on the Interpretation of Article XVII." GATT Article XVII provides rules on state trading enterprises. The notification covers the years 2018-2020.

The notification document begins by identifying "State Trading Products and Enterprises," broken down into the categories of "Import" and "Export," with seven categories of imports and ten categories of exports listed. For example, under "Import," the document sets out a number of HS codes for grain, and identifies COFCO Corporation as the state trading enterprise. And as an example under "Export," the document sets out a number of HS codes for coal, and identifies the following state trading enterprises: 1. China National Coal Group Corporation 2. China Minmetals Corporation 3. Shanxi Coal Imp.&Exp. Group Co., Ltd. 4. Shenhua Group Corporation Ltd. 5. Aluminum Corporation of China Ltd.

The document then explains the "Reason or purposes for establishing and/or maintaining state trading enterprise" as follows:

To ensure stable supply of products subject to state trading, prevent consumers' interests from being affected by drastic price fluctuations, safeguard food security of the nation, protect exhaustible and non-recyclable resources and the environment, and achieve the goal of sustainable development.

The document also summarizes the legal basis for granting the relevant exclusive or special rights or privileges, including legal provisions and summary of statutory or constitutional powers. And it describes the functioning of the state trading enterprise system, including: How import/export levels are established; how export prices are determined; how the resale prices of imported products are determined; whether long-term contracts are negotiated by the state trading enterprise; and whether the state trading enterprise is used to fulfil contractual obligations entered into by the government.

Finally, in two tables at the end, the document provides detailed statistical information on imports and exports of products traded by these enterprises during the time period covered.