China's Foreign Trade System
Note from the United States Delegation
On May 26, 1986, the Trade Committee Working Party met for a discussion of issues concerning China, including that country's accession to the GATT. As background to the discussion, the Secretariat had prepared a note, "Problems posed by China's Possible Application to Accede to the GATT (TC/WP (86)15). Following up on the Working Party's discussion, the United States would like to submit the following questions on the nature of China's foreign trade system for further discussion and/or future research:
A.
The role of the plan in foreign trade. What percentage of China's foreign trade is carried out exclusive of any formal planning? Even if a certain share of China's foreign trade is 'unplanned," is it accurate to conclude that market forces are
-- especially if foreign allowed to operate on that share
What exchange allocation is strictly controlled by Beijing? steps has China taken to reduce the role of central planning in foreign trade (along the lines of the reforms in the domestic economy)? Does trade decentralization, i.e., from Beijing to local-level importing and exporting enterprises increase the use of market forces in the foreign trade sector (or is decentralized trade still subject to the irrationalities induced by China's pricing structure)?
B. Chinese price policy. Does domestic price reform affect prices in the foreign trade sector? In light of China's self-proclaimed "irrational" price structure (i.e., one in which prices are not related to relative scarcities in the economy or to production costs), how are export prices determined in China? Given irrational prices, what constitutes a subsidy? In a related question, are Chinese wage and production cost data accurate or distorted? Is the government moving to remove food, housing, and other subsidies given to workers and to enterprises?
What are
C. Fields of competence, and responsibilities, etc. the relevant Chinese laws and regulations governing this question? How many regulations are "restricted' (NEIBU) or otherwise not generally available to outside observers?
D. Financial autonomy of firms. What are the applicable laws and regulations concerning autonomy of enterprises engaged in foreign trade? What is the status of China's foreign exchange restrictions? Does China have a consistent policy on
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