Chinese Trade Policies And Regulations Essay

Chinese Trade Policies And Regulations Essay

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Chinese trade policies and regulations are often viewed as another Great Wall and tapping into the market is often considered to be a long and complicated process. On December 2001, China joined the WTO with hopes of their trade system and barriers to gradually liberalize. On July 2004, China amended the Foreign Trade Law, which allowed any type of enterprise to register for trading rights. Chinese residents are also allowed to conduct foreign trade. China currently has 13 “Free Trade Agreements” (FTAs). Reduced import tariff rates can be applied to certain goods imported from these FTA countries into China. Specifically, Hong Kong and Macao have preferential treatment with zero tariff rates, provided that the imported commodities fulfill origin requirements. This means that these suppliers (Hong Kong, Macao) can enter the mainland market in various areas. These FTA countries are called the “Closer Economic and Partnership Agreements” (CEPA) with the following countries; ASEAN member states, Hong Kong, New Zealand, Singapore, Pakistan, Chile, Peru, Costa Rica, Iceland, Switzerland, Korea and Australia.

State Council Executives in China sought to expand the domestic consumer demand for stable economic growth. Therefore policies on certain imports and exports of certain daily consumer goods in demand of the mainland were lowered. From June 2015, the import tariff rate on daily consumer products including clothes, skincare products, and paper diapers were lowered about 50% for each item category. For example, suits were lowered from 23% to 10%, skincare products from5% to 2%, and paper diapers from 7.5% to 2%.

Antidumping Regulations in the EU/US and China
Anti-dumping (AD) is defined as selling a product below its normal value. Th...

... middle of paper ...

... by EU companies in China. The Chinese government can question the promotion of FDI with NMES and strict AD regulations when other countries assume that Chinese companies do not adhere to market economy conditions.

Long and Short term Effects on AD Duties

AD duties exist to level the competition between national companies and foreign competition. In the long run however, AD duties may not have a lasting impact on eliminating unfair prices distortions. AD duties reduce imports on a target country short term, but can increase fierce competition with the possibility of eliminating unproductive firms in the Chinese market. The competition is then increased when companies further reduce production costs and increase exports in the long run. Therefore, AD duties could create unintended consequences in the market balance in China, decreasing their chances in gaining MES.

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