New dimension of commerce ruled by law

In 2016, Chinese Ministry of Commerce comprehensively carried out the spirits of the 18th National Congress of the Communist Party of China (CPC) and the third, fourth, fifth and sixth plenary sessions of the 18th CPC Central Committee, profoundly learned and implemented the spirits of the series of speeches made by General Secretary Xi Jinping, thoroughly put into effect the overall layout of ‘Five-in-One’ and the strategic layout of ‘Four-pronged Comprehensive’ based on the five development ideas and in accordance with the unified deployments of the CPC Central Committee and the State Council, built a law-based, convenient and international business environment focused on promoting supply-side structural reform, and made new progress in the development of commerce ruled by law.

Carry out legislation in an orderly manner. First, in the field of foreign investment, while promoting the unified legislative deliberation on the Foreign Investment Law, the Ministry of Commerce cooperated with the state legislative body in completing the special revision of laws, including the revision of provisions in respect of administrative approval of the Law of the People’s Republic of China on Wholly Foreign-owned Enterprises, Law of the People’s Republic of China on Sino-foreign Equity Joint Ventures, Law of the People’s Republic of China on Sino-foreign Cooperative Joint Ventures and Law of the People’s Republic of China on the Protection of the Investments of Taiwan Compatriots, wherein the establishment and change of the registration of foreign-invested enterprises beyond the scope of the special administrative measures for market access prescribed by the State are subject to filing instead of approval. The Interim Administrative Measures for the Record-filing of the Incorporation and Change of Foreign-invested Enterprises was promulgated in order to achieve linkage between laws. Second, in the field of domestic trade circulation, the Ministry of Commerce improved the legal system for domestic trade circulation, providing strong support for pushing forward with supply-side structural reform in the field of domestic trade circulation, expanding consumption and promoting economic growth; in February 2016, the Ministry of Commerce submitted the Law on Commodity Circulation (Draft for Review) to the State Council and carried forward legislative deliberation. In addition, the Ministry of Commerce cooperated with the Financial and Economic Affairs Committee under the National People’s Congress in finishing the drafting of the E-commerce Law (Draft), and propelled the development and revision of regulations and rules on scrap vehicle collection, service outlets of direct selling enterprises and automobile sales. Third, in the field of foreign trade, the Ministry of Commerce took the lead in drafting the Law on Export Control (Draft), and introduced departmental rules including the Measures for the Supervision and Administration of International Bidding Agencies for Electromechanical Products and the Administrative Measures for the Use of Foreign Aid Signs (for Trial Implementation).

Vigorously promoting negotiations with foreign countries. First, major progress was made in Sino-US and Sino-EU negotiations concerning the investment treaty. In 2016, the United States and China held a total of ten rounds of formal negotiations and one round of small-scale consultations, made positive progress in the negotiations on new issues, exchanged the improved offer for the negative list two times, and proposed substantive opening-up measures in important fields. In 2016, the European Union and China held a total of four rounds of formal negotiations and four meetings involving the in-depth discussion of core contents and key terms. Second, active efforts were made to promote negotiations on the investment treaty with countries along the ‘One Belt One Road’ route and major countries in which China’s overseas investments are made. Third, the Ministry of Commerce facilitated the achievement of substantive progress in Sino-EU negotiations on the geographical indication treaty, and completed the exchange of lists of geographical indication products.

Properly settling WTO disputes. In 2016, gratifying results were achieved in the filing of and response to lawsuits related to WTO disputes. First, in terms of the filing of lawsuits, a major phased victory was obtained in the case in which China is appealing against America for anti-dumping measures. The panel ruled in favor of China on the major claims, including zeroing methodology for targeted dumping and the refusal to implement separate tax rates for Chinese export enterprises, and ruled that 13 American anti-dumping measures involved practices contrary to WTO rules. In the case in which China is appealing against the European Union for fastener-related anti-dumping measures, China won a significant victory in the lawsuits of the original trial and execution, with China’s core claims receiving support, and the European Union revoked its anti-dumping measures. Second, proper responses were given to lawsuits in which China served as the defendant, effectively safeguarding the legitimacy of China’s related measures and the interests of domestic industries. The case in which America is appealing against China concerning the demonstration base of the transformation and upgrading of foreign trade and public service platforms, and the case in which America is appealing against China for preferential tax policies for domestic regional aircraft, were properly solved in the consultation stage. In the case in which Canada is appealing against China for pulp-related anti-dumping measures, the panel fully supported China’s claims with regard to the issue concerning the objective review of the impact on the number of dumped imports and the impact on domestic industries.

Third, regarding issues concerning the expiration of Article 15 of the Protocol on the Accession of China to the WTO, the Ministry of Commerce carried out preparatory work of the lawsuit related to the ‘surrogate country’ practices of WTO members, filed lawsuits against the United States and the European Union simultaneously on December 12th, urged them to take WTO obligations seriously, showed China’s attitude of firmly safeguarding its rights, and actively maintained the gravity of WTO rules and the authority of the multilateral trade system.

Actively promoting international exchange and cooperation. First, the Ministry of Commerce took the lead in attending the meetings of the working groups for bankruptcy law, e-commerce and other work of the United Nations Commission on International Trade Law, and fully expressed China’s opinions at the meetings. The Ministry of Commerce actively explored matters related to the establishment of offices in China by the United Nations Commission on International Trade Law and the International Development Law Organization; conducted more exchanges with the International Institute for the Unification of Private Laws and participated in discussions concerning relevant issues under the Convention on International Interests in Mobile Equipment; actively took part in discussions of issues surrounding investment and intellectual property rules organized by multilateral platforms including the Organization for Economic Co-operation and Development and the Asia-Pacific Economic Cooperation, and exerted influence on the formulation of future multilateral rules. Second, the Ministry of Commerce successfully held the 21st China-U.S. Legal Exchange, meetings of Sino-US, Sino-EU, Sino-Japan and Sino-Russia working groups on intellectual property rights, and the first meeting of the Commission on Intellectual Property Rights of the Sino-South Korea Free Trade Zone; implemented bilateral IPR cooperation projects, carried out IPR exchange activities in the United States and Europe and held the Sino-EU Forum on Internet Intellectual Property Rights Protection; proposed the establishment of BRICS IPR cooperation, and held the High-level Conference on Intellectual Property for ‘One Belt One Road’ Countries in Beijing to discuss the IPR cooperation of countries along the ‘One Belt One Road’ route.

Effectively carrying out administration according to the law. First, the Ministry of Commerce handled 30 cases of administrative reconsideration and 20 cases of administrative lawsuits. It improved the internal working procedures of administrative reconsideration, and started using a special administrative reconsideration seal of the Ministry of Commerce. It also further optimized the internal mechanism of responding to administrative lawsuits, and hired lawyers to provide annual legal services for responses to administrative lawsuits given by the Ministry of Commerce.

In addition, the Ministry of Commerce put forward improvement suggestions to relevant parties with regard to the problems reflected in the cases of reconsideration and lawsuits against China. It also effectively conducted the legal review of major administrative punishments, and handled five punishment cases of failure to report anti-monopoly in accordance with the law. Second, the Ministry of Commerce conducted a comprehensive clean-up of its regulations and normative documents, repealed and revised nearly 30 regulations and normative documents in two batches, and issued the Catalogue of Current Regulations of the Ministry of Commerce and Catalogue of Current Normative Documents of the Ministry of Commerce. Third, the Ministry of Commerce carried out the summary of the Sixth Five-year Plan for Law Popularization and Education of the Ministry of Commerce, developed the Seventh Five-year Plan for Law Popularization and Education of the Ministry of Commerce, and held one China-Germany training class in economic law and two law popularization training classes for the national commerce system.

2017 is an important year for implementing the 13th Five-year Plan and deepening supply-side structural reform. In combination with the new commerce situation, the Ministry of Commerce will vigorously promote key legislation, actively settle disputes, protect China’s trading interests by the use of rules, actively participate in the formulation of international rules, comprehensively advance administration according to the law and create a good legal environment for commercial development, thus greeting the successfully held 19th CPC National Congress with outstanding achievements.

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