Trade Guide: China

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With over 1.35 billion citizens, China (official name: the People’s Republic of China) is the most populous country in the world, and the second largest by land area.

Customs, Technical Standards, and Trade Regulations

The China Compulsory Certification (CCC) mark is China‘s national safety and quality mark. The CCC mark is required for 23 categories including 254 products. These range from electrical fuses to toaster ovens to automobile parts to information technology equipment. Imports of any products on the CCC mark list cannot enter China unless CCC registration has been obtained, and the mark has been affixed to individual products. Domestic products must also comply with the same regulations, although there have been complaints from exporters that the regulations are applied inconsistently to domestic Chinese products. In general, China’s regulatory system is fairly opaque and inconsistent. Legal protections, especially in intellectual property right protection, are for the most part not up to developed world standards.

Trade Policy and Free Trade Agreements

The cornerstone of China’s trade policy and export success has been its historic accession to the World Trade Organization in 2001 – a feat which took 15 years to negotiate. WTO membership provided China with significantly enhanced access to the large markets of the developed world, in particular, the US and the EU. Capitalizing on this access, along with its low wage rates and favorable exchange rate policies, China has amassed the largest bilateral trade surplus in history (with the US).

At the same time, the Chinese market has not been as open as many of China’s trade partners would like. Each new WTO entrant negotiates its own accession agreement which stipulates the precise concessions, time-table, and market-opening initiatives that the country must commit to in return for WTO membership. China is generally regarded to have negotiated an extremely shrewd agreement which permitted it to gain preferential access to the markets of large WTO member consumer markets, but allowed China to maintain a variety of restrictions, and in some sectors, fairly high tariff barriers.

In addition to its WTO membership, China maintains the following FTAs:

China is now in the process of negotiating the Regional Comprehensive Economic Partnership. The RCEP includes the 10 member nations of ASEAN, plus China, Australia, New Zealand, India, Japan, and Korea. Since China already has FTAs in place with a number of these countries, the RCEP will serve to unite these agreements under a common umbrella. The RCEP is not anticipated to be as progressive or “ground breaking” as the Trans Pacific Partnership, and a variety of restrictions and barriers will continue to be in place after the agreement in implemented.

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