Chapter Two: Trade Regulation

¡¡¡¡WTO rules are binding on the government of its members and thereby the national government as well as the provincial governments shall abide by the basic principles governing multi£­lateral trade in both management and behavior. As early as in the preparation for China's accession, Shanghai took the lead in transforming government functions for WTO accommodation by waiving a number of items from government examination and approval, simplifying administration through decentralization and increasing transparency of its administrative procedures. After the accession, at the forefront of reform and opening£­up, Shanghai has earnestly carried out the accession commitments as uniformly required by the Central Government. Basic rules of non£­discrimination, transparency, etc. were observed by further reforming the trade regulations and according all the other WTO members with MFN Treatment and National Treatment.
¡¡¡¡Part One¡¡Regulation on Trade in Goods
¡¡ I. Economic Policies and Legal Framework
¡¡¡¡Shanghai established the Leading Office in 2002, which has combed through 125 local laws and regulations, 386 municipal rules and 751 municipal documents according to the overall schedule by the Central Government. At the end of 2001, the Shanghai Municipality submitted 6 proposals to the Standing Committee of the Shanghai People's Congress for nullification and revision of local laws and regulations (So far, the Standing Committee has adopted the proposals for 2 revisions and 1 nullification. Other proposals are being further studied). The Shanghai Municipal Government issued Directive No.118 on March 28, 2002, nullifying 22 rules and then Directive No.119 on April 1, 2002, revising 19 rules, which have all been released to the public. At the same time, the Municipal Government also issued the Announcement of Nullification of 213 Documents. One of them was the Provisional Measures Governing the Renting of Public£­owned Houses.
¡¡¡¡Up to now, over 13,000 regulatory documents issued by different municipal departments, districts and counties have been examined. After the screening and examination, about 4000 such documents were nullified and over 600 revised.
¡¡¡¡In the combing through, Shanghai has focused on: 1) rules and policies covering export subsidies or import restrictions not in line with WTO rules (including subsides to import substitutes); 2) measures that do not grant national treatment to foreign£­invested enterprises as committed in accession; 3) rules and regulations that are not in conformity with state laws and administrative regulations.
¡¡¡¡II. Trade Regulation
¡¡¡¡1. Allowing Foreign Trade Rights
¡¡¡¡During the period before and after the accession, Shanghai has gradually eased control on foreign trade rights. As a result, a large number of enterprises have obtained the right to conduct import and export and three joint venture foreign trade companies were established in Pudong upon the approval by the State Council. All these have shown that Shanghai has been ahead of other provinces and regions in this regard. Besides, measures have been adopted by the Pudong New Area to grant private manufacturers the right to conduct import and export. The enlargement of foreign trade entities not only means compliance with trade liberalization and non£­discrimination principles of the WTO but also contributes to the sustainable development of foreign trade in Shanghai. According to the accession commitments, Shanghai will increasingly ease its control on foreign trade rights year by year, which will further expand the number of foreign trade dealers and boost foreign trade.
¡¡¡¡Major measures taken by Shanghai in 2002 to allow more foreign trade rights are as follows: First, Shanghai has switched to the verification and registration systems for foreign trade rights. On July 15, 2001, the import and export right registration system for manufacturing enterprises and the distribution right verification system for foreign trade distributors were put in place. At the same time, those enterprises registered in the Pudong New Area applying for foreign trade rights or distribution rights have found the registered capital requirement lowered. By March 26, 2002, there have been 278 such newly registered and verified enterprises. Second, the Pudong New Area took the lead in lessening the requirement for registered capital. Starting from March 27, 2002, the New Area Government further lowered the requirement on domestic businesses for registered capital when they apply for foreign trade rights. In 2002, 2,310 enterprises obtained the foreign trade rights, with private enterprises accounting for 73£¥ of the total. When efforts have been intensified in Shanghai to grant private enterprises foreign trade rights, training is also provided to help improve the professionalism of these foreign trade companies. Third, Shanghai eased control on the export£­related purchasing rights of foreign£­invested manufacturing enterprises. When the export volume of enterprises reaches USD10 million, they will be granted the export£­related purchasing rights.
¡¡¡¡2. Trade Facilitation
¡¡¡¡In 2002, Shanghai has sped up the establishment of the £àEasy Clearance System'.
¡¡¡¡To catch up with world standard in Customs clearance, the city came up with a proposal ¡°to improve the clearance efficiency of the Shanghai port¡± in October 2000. As a key municipal project, the proposed system has received extensive support. All£­out efforts have been made throughout the whole construction making full use of creative ides, new technologies and novel methods, especially in difficult areas and against difficult products. By the end of 2002, the objective for the £àEasy Clearance System' has been realized. Any goods that meet the requirement of inspection bodies, that are urgently needed by consignees, that have complete and accurate documents, or that are not subject to inspection or tariffs can apply for earlier inspection and earlier declaration and enjoy on£­the£­spot release. The whole clearance process, including the delivery and collection of goods, can be completed within 24 hours for sea shipment and 12 hours for air cargo. The ¡°Airborne Direct System¡± tried in the Waigaoqiao Bonded Area can clear the imports within 6 hours. Similarly, the ¡°Speedy Clearance System¡± in the Songjiang Export Processing Area has shortened the clearance time to 4 hours. The Convenient Clearance System available for key export enterprises has limited clearance for imported air cargo to 8 hours. As a result, Shanghai has become one of the most secure and efficient ports in China.
¡¡¡¡At the same time, the advantage in the integration of data and resources regarding clearance is gradually taking shape. Back in 2001, premium attention was paid to the establishment of a clearance information system. Under the collaborative efforts of the Shanghai Municipal Foreign Economic Relations and Trade Commission, the Shanghai Municipal Planning Commission, the Shanghai Information Office, the Shanghai Customs, the Shanghai Inspection and Quarantine Bureau, the Shanghai Port Administration, and the Shanghai Transport Administration, three companies including the Shanghai Economic and Trade Network Company, the Shanghai EDI center and the Shanghai Shipping EDI Center were restructured and merged to form a new company¡ª¡ªthe Shanghai E£¦T International Corporation. In 2002, the integrated ¡°Easypass.com¡± was launched, providing information on international economic and trade activities, port logistics and government regulation, and has paved the way for Shanghai to establish an integrated clearance information system.
¡¡¡¡Furthermore, Shanghai has applied electronic management to the ¡°Easy Clearance System¡±. With ¡°Easypass.com¡± and E£¦T Corporation, over 20 clearance forms and papers are handled electronically by the sophisticated system. In Shanghai Port, daily transfer of electronic forms and papers reaches more than 20,000 pieces on average, with a record high of 7730 pieces of electronic packing lists. In the second half of 2002, Shanghai continued to implement the policy of applying for £àearlier inspection, earlier Customs declaration and on£­the£­spot release ' to speed up paperless clearance procedures. At the same time, Shanghai has promoted electronic bookkeeping in some export processing enterprises, especially those selected from multinational companies and hi£­tech enterprises to improve regulating efficiency and lower business cost.
¡¡¡¡ ¡¡¡¡3. Reforming Quota and Licensing Control System
¡¡¡¡After accession to the WTO, 105 out of the 349 categories of textile products that were subject to quota control have found it totally removed and 20 partially removed, accounting for 35.8£¥ of the total. This year, Shanghai has issued 153,000 quota certificates, 23£¥ less than that of the same period last year. It is predicated that products with partial removal of quota by designers account for approximately one third of quota£­controlled exports.
¡¡¡¡Some originally quota£­controlled products such as color photosensitive materials and audio£­visual equipment have switched to voluntary registration or general licensing control. Some are even completely free from control, such as timber. Once requiring approval for dealing in such bulk products, now it is totally open to an increasing number of importers and exporters.
¡¡¡¡Meanwhile, information on quota£­controlled product catalogue total quota, increases in quota, and quota allocation is released to the public in time and bid of tender is invited to ensure openness, fairness, and transparency in quota allocation.
¡¡¡¡Reform on textile quota allocation has created incentives for enterprises to expand their export. According to rough statistics, exports have grown by 24.3£¥ over the same period last year in 125 categories of textiles and clothing which are completely or partially free from quota restriction.
¡¡¡¡ ¡¡¡¡4. Safeguard Measures
¡¡¡¡After accession, China is entitled to resort to safeguard measures to protect its products from unfair treatment in other countries and its domestic industries from injury. As Shanghai exports enjoy fairly strong competitive edges after accession, the number of disputes involving Shanghai exports is bound to rise with the rapid expansion in exports and in export destinations. From time to time, Chinese export enterprises have suffered from unfair treatment. In these circumstances, Shanghai has been intensifying its study on the use of safeguard measures. Information concerning safeguard measures has been collected and sorted out so that a better understanding can be reached of the WTO Agreement on Safeguards and procedures and conditions needed for WTO members to take safeguard measures. Based on the information, analyses are made on possible safeguard investigations and their implications. Meanwhile, in order to use safeguard to protect domestic industry from injury, the study has also kept a close track of the industries which have suffered from injuries caused by foreign imports and followed up the effectiveness of the safeguard measures China has adopted.
¡¡¡¡5. Technical Barriers to Trade
¡¡¡¡Ever since the accession, there has been an increase in various trade protection measures against Chinese exports including the use of technical standards, sanitary and phytosanitary measures, IPR protection measures in addition to antidumping and safeguard measures. In February 2002, the European Union issued an injunction against animal£­source food from China affecting RMB700 million£­worth agricultural exports from China. Besides, the EU applied Customs measures against China£­made DVD players and adopted the RC Action requiring low£­price lighters be installed with security devices to protect children. Furthermore, the EU raised inspection standards for pesticide residue content and lead content in tea. These are various trade barriers against Chinese exports.
¡¡¡¡ ¡¡¡¡Shanghai has intensified the study on TBT in 2002. Relevant laws and regulations have been written and improved in line with WTO multi£­lateral rules and basic principles. Local technical regulations, standards and conformity assessment procedures have been improved in line with TBT and SPS Agreements of the WTO. Assistance has been given to enterprises in studying general technical standards for electric and mechanical products, environmental technical standards (such as ecological standards and packing technology), food hygiene and safety standards and SPS measures so that enterprises can obtain promptly various certification needed for market access. Shanghai has fully exercised its right to enforce relatively stringent local technical standards and environmental standards according to relevant agreements of the WTO.
¡¡¡¡5.1 Enhancing the Enforcement and Application of WTO/TBT Agreement
¡¡¡¡a) Based on the unified screening of all local standards over the past two years, Shanghai has gathered specialists and professionals from relevant technical agencies, intermediaries, industries and enterprises to conduct timely review of the existing local standards according to WTO/TBT rules so as to bring the local standards into conformity with national and international standards.
¡¡¡¡b) According to the Shanghai Standardization Regulation and the requirements listed in Annex 3 to WTO/TBT Agreement for Code of Good Practice For the Preparation, Adoption and Application of Standards, Shanghai has revised the measures on local standards management and published its work program at regular intervals to enhance the openness and transparency of adding standards and amending procedures, and expand the involvement of parties. At the same time, Shanghai has stepped up its preparation of local standards regarding information technology, logistics, services, agriculture and food safety, ecology, environmental protection, which take into account the practical needs and characteristics of social and economic development in Shanghai.
¡¡¡¡c) Shanghai has complied with the requirements of the China WTO/TBT Notification and Enquiry Center by passing TBT information on to relevant local authorities and enterprises, and meantime notifying WTO/TBT Enquiry Point in China of information on technical regulations, standards, conformity assessment procedures developed by Shanghai. It is active in exchanging opinion and information with other WTO members regarding trade£­related technical regulations, standards, and conformity assessment procedures.
¡¡¡¡d) A technical standards service network, based on the Shanghai Standardization Information Network, which links the National WTO/TBT Notification and Enquiry Point with agencies of the Shanghai Municipality as well as related enterprises and intermediaries is under construction. This network serves the government, enterprises and the public by updating them with the latest technical standards at home and abroad.
¡¡¡¡e) Two databases are being built, foreign and domestic standards for one and major product standards of Shanghai for the other. To prepare for the expansion into other countries, it is necessary for Shanghai to collect more international and foreign standards in addition to those already on hand. Focusing on major imports and exports, Shanghai is developing Information and Data Management System Regarding Major Industrial and Agricultural Exports to EU and the same system for North America is to follow, together with Product Standard Database Regarding Major Industrial and Agricultural Exports to Japan and Shanghai Local Regulations and Standards Database as well as the database on major industrial and agricultural products of Shanghai. And the work to be done includes gradual establishment of standard information service systems to offer fast tracking and convenient services, and the establishment and improvement of the data base for retrieving information on technical regulations, standards and conformity assessment procedures developed by Shanghai's major trading partners. Thus the local enterprises will be equipped with convenient access to the relevant information needed for trade.
¡¡¡¡f) Efforts are being made to develop personnel specialized in the study, translation and application promotion of technical standards. This new contingent of knowledge£­wise and foreign language£­proficient specialists shall follow the dynamic development of foreign and domestic technical regulations, standards and conformity assessment procedures. It is hoped that such service system will be formed to provide both comprehensive and specialized services.
¡¡¡¡5.2 SPS Measures
¡¡¡¡a) The enforcement of measures in this aspect has been strengthened. In 2002, there is a considerable increase in the number of cases where imports to Shanghai were found disease£­carrying. Compared with last year, goods detained for containing biological hazards increased sharply both in number and in type. Among 1213 batches of goods detained in 2002, 345 batches were found carrying such pest or diseases as Indian bunt in wheat, apple moth and banana incurvariid, representing a 2.5£­fold increase over the same period last year. When the State Quality Surveillance Administration together with the Ministry of Hygiene issued a joint declaration (No.1) in 2002 to ban the import of cosmetics from areas infected with Mad£­cow Disease, the Shanghai Entry£­Exit Inspection and Quarantine Bureau immediately took corresponding measures and notified the importers and traders involved in a timely manner.
¡¡¡¡b) Shanghai imposed compulsory port inspection on products against certificates and licenses. Starting from May 1, 2002, compulsory inspection was imposed on imports of 47 categories subject to safety and quality licensing control and statutory inspection. That is, the above£­mentioned imports will be submitted for inspection against import safety and quality license or relevant certification documents, without which imports will be denied entry by the Customs. From July 1, 2002, Shanghai has made compulsory inspection on imports listed as the first batch in the Catalogue of Imports Subject to Entry Inspection by Entry£­Exit Inspection and Quarantine Agencies, covering commodities under 56 HS headings. From May 1, 2003, Shanghai shall make compulsory inspection on 132 products listed in the Catalogue of Compulsory Certification Commodities (CCC certification) after careful preparation and dissemination. This aims at ensuring conformity of imports with Chinese safety, hygienic and environmental protection technical standards so as to protect the health and safety of Chinese citizens.
¡¡¡¡c) Label management has been implemented in Shanghai for import and export food and cosmetics. According to Ordinance No.21 issued by the State Quality Surveillance Bureau, pre£­packed import or export food and cosmetics are to be submitted for inspection against the acceptance of application for labels of food or cosmetics. Starting from November 1, 2002, goods must be submitted for inspection against the label verification certificates. It is hoped that active dissemination and prodding will enhance the enforcement of the inspection system.
¡¡¡¡5.3 Promoting Export Food Hygiene Registration System
¡¡¡¡Shanghai has promoted hygiene registration system for export food according to Ordinance No.20 issued by the State Surveillance Bureau. Starting from May 20, 2002, Shanghai started to adopt HACCP system recommended by CAC on compulsory basis for the production of 6 types of export food including canned food, aquatic products (excluding live, frozen, dried and salted products), meat and meat products, quick£­frozen vegetables, fruit and vegetable juice and quick£­frozen instant food containing meat or aquatic products. At the same time, supervision has been strengthened and necessary assistance provided to enterprises to meet the inspection by foreign hygienic or veterinary officials. In 2002, Shanghai received 4 groups of foreign government officials from countries and regions including Japan, which on different occasions inspected 7 food exporters. Besides, Shanghai promoted 20£­odd registrations by local food processing enterprises in foreign countries and regions like the USA.
¡¡¡¡5.4 Strengthen Other Inspection and Quarantine Measures
¡¡¡¡a) Promoting classified management. Initiatives have been taken in Shanghai to develop inspection and quarantine model in line with international practice. The aim is to promote the implementation of the Easy Clearance System of the Port of Shanghai and to facilitate trade. Enterprises are urged to enhance their quality control and brand fame. Premium exporters are given support to implement their brand strategy. Based on the effectiveness of quality control system and credibility of product quality, export manufacturers and dealers are put under classified management, which ensures both efficiency in management and convenience to enterprises. In 2001, Shanghai published the first list of 57 enterprises subject to Category A Management, followed by the second list of 48 enterprises subject to Category A Management Regarding Inspection and Quarantine including the Shanghai Tire and Rubber (Group) Company Ltd.
¡¡¡¡b) Establishing a residue and pest prevalence monitoring system. Through the system, Shanghai is able to monitor the whole process of raising or processing regarding animals and plants and the related products. As required by the annual national plan, annual inspection and monitoring of residue in export food of animal origin (including plant products) has been conducted, according to the national inspection and quarantine standards and those of the importing countries or regions. If enterprises were found to have used pesticide or medicine not in line with standards or abused pesticide or medicine, their qualification as well as the export of their products would be suspended. In adopting the registration and filing system for livestock farms, Shanghai has reinforced routine supervision of the farms so as to ensure safe application of pesticide or medicine. Besides, Shanghai has implemented the filing system to monitor export vegetables through one platform (of file management) and two systems (Harmful Bios Inspection System and Pesticide Residue Monitoring System) to ensure vegetables meet the requirements of importing countries and regions. In this regard, a ceratitis inspection and monitoring network is established, which covers melon and fruit exporters in Shanghai. At the same time, one or two vegetable farming and processing enterprises will be picked to run HACCP system as a pilot program. Through monitoring key points, residue and pest prevalence can be put under control.
¡¡¡¡c) Establishing an early warning and quick risk£­response mechanism. As required by the State Quality Surveillance Bureau for taking early warning measures, Shanghai is finding ways to respond to the increasing flow of unqualified or discarded products from foreign countries into China. Once a warning is issued by the State Quality Surveillance Bureau, Shanghai will strengthen inspection and quarantine over the products involved. At the same time, Shanghai has strengthened the notification of pestilence and control of unqualified products so that more stringent measures can be taken against high£­risk prone animal or plant products. Intensified inspection and quarantine over imports and control of the flow of the products is effected so that once goods are found upon inspection harmful to human beings or animals and plants, they will be sealed or destroyed instantly.
¡¡¡¡6 Customs Valuation ¡¡¡¡In line with the accession commitments, the Chinese government has made relevant amendments to the Customs Law of the People's Republic of China, the Tariff Regulation and Methods of Dutiable Price Valuation in order to conform to the WTO Agreement on Customs Valuation. The Shanghai Customs has fully complied with the WTO regulations at all levels of operations. Most importantly, the Shanghai Customs has promoted the smooth development of Customs valuation by ¡°pre£­valuation¡± and ¡°price follow£­up check¡± in its execution, and therefore secured the objectivity, fairness and standardization in conducting Customs valuation.
¡¡¡¡6.1 Establishing ¡°transaction price¡± as the New Principle of Valuation
¡¡¡¡The relevant laws, rules and regulations lately revised in line with the WTO valuation principles stipulate that the dutiable price of import commodities be valuated and determined by the Customs on the basis of transaction price. The Shanghai Customs, sticking to this principle, has carried out Customs valuation strictly per corresponding regulations and procedures in the interests and for the convenience of importers and rejected employing normal prices, minimum prices, referential prices or other arbitrary or fabricated prices not in line with WTO valuation principles. It is estimated that the adoption rate of transaction price is over 95£¥ in the determination of dutiable price by the Shanghai Customs.
¡¡¡¡6.2 Selecting Valuation Methods in the Order Set by the WTO Rules
¡¡¡¡In cases whereby import commodities have no transaction prices, or the transaction prices are unavailable or unacceptable, the Shanghai Customs adopts the following valuation methods in the order stipulated by the WTO Agreement on Customs Valuation: identical product method, similar product method, deductive method, computed price method and fall£­back method, and agree in principle to importers' option of deductive method or computed price method. When the Shanghai Customs resorts to the latter method for valuation, it never fails to justify its choice by putting forward adequate convincing evidences to make clear that the former method cannot serve the purpose.
¡¡¡¡6.3 Enhancing the Transparency of Customs Valuation at the Shanghai Port
¡¡¡¡After China's entry into the WTO, the Shanghai Customs has improved the transparency of its valuation through diverse means. For instance, it has published and offered free of charge to relevant enterprises Tips for Customs Valuation and 100 FAQs about Customs Valuation, thus effectively informing the enterprises interested and the public of the WTO Agreement on Customs Valuation and Methods of Dutiable Price Valuation. And the Shanghai Customs also updates on a regular basis its web page to release relevant valuation stipulations, procedures and Q£¦As for various commodities. Moreover, the Shanghai Customs on the other hand adds Customs valuation courses and lectures into its training programs designed for import and export enterprises. Besides, the Shanghai Customs also issues Valuation Notification letters to keep the importers duly informed. Through unremitting efforts, the transparency of Customs valuation at the Shanghai port has been greatly enhanced, therefore wining support from and cooperation of a great number of import and export enterprises. Since the beginning of 2002, there have been no administrative reviews or legal actions arising from valuation.
¡¡¡¡III. Anti£­dumping and Anti£­subsidy
¡¡¡¡1. Anti£­dumping
¡¡¡¡In 2002, the Shanghai WTO Affairs Consultation Center, the Shanghai Municipal Foreign Economic Relations and Trade Commission and the Shanghai Information Center joined hands to develop an anti£­dumping early warning and consultative service system software, which has started to keep track of import and export of certain products. The early warning system in collaboration with relevant trade associations is to track the production cost, selling price and export market of the certain exports to build up a database. The Municipal Economic Commission working with other departments concerned is to set up an early warning system for industry injuries.
¡¡¡¡As required by the post£­accession situation, the Fair Trade Office, a new organ affiliated to the Municipal Foreign Economic Relations and Trade Commission, was put in place to cope with the increasing international trade disputes and to safeguard the legitimate rights and interests of local exporters and their business reputation. Major responsibilities of the Fair Trade Office cover:
¡¡¡¡a. Coordination on behalf of the Ministry of Foreign Trade and Economic Cooperation (MOFTEC) of efforts from representative local enterprises in response to anti£­dumping charges;
¡¡¡¡b. Motivating enterprises involved to actively respond to anti£­dumping charges, providing professional assistance to them on scheme drafting, investigation and administrative review;
¡¡¡¡c. Tracking the remedial effects to local industries in cases of anti£­dumping, countervailing and safeguard measures taken by China;
¡¡¡¡d. Collecting information about the anti£­dumping, countervailing and safeguard investigations launched by foreign countries against local products, and conducting statistical analysis of impacts on local imports and exports by actions from foreign countries and regions;
¡¡¡¡e. Monitoring and investigating unfair treatments suffered by local exporters in other countries;
¡¡¡¡f. Setting up a regional import and export early warning and monitoring system;
¡¡¡¡g. Establishing a feedback system to ensure timely report to the MOFTEC on the development of fair trade practices.
¡¡¡¡h. Disseminating knowledge of fair trade practices and strengthening related personnel training.
¡¡¡¡2. Subsidy and Countervailing
¡¡¡¡After accession, the Chinese government may take advantage of the WTO Agreement on Subsidies and Countervailing Measures to protect Chinese export products from discriminatory treatments in international trade, thus to safeguard the legitimate rights and interests of our export enterprises. Meanwhile, direct subsidies used to be granted to export enterprises by the government are no longer permitted.
¡¡¡¡According to the WTO Agreement on Subsidies and Countervailing Measures, Shanghai shall phase out prohibited subsidies by making justifiable use of actionable subsidies and making full use of non£­actionable subsidies.
¡¡¡¡3.1 Removing Prohibited Subsidies
¡¡¡¡From the year of 2002 on, the policy on ¡°discount interest¡± subsidy for key export products will gradually give way to zero£­tax subsidy to come in line with the international practices of export tax refund. It means that the discrepancy between the tax paid before export and the actual tax refund afterwards will be compensated after the added value tax of the export products has been paid.
¡¡¡¡3.2 Taking Full Advantage of Non£­actionable Subsidies
¡¡¡¡From the year 2002 on, some new subsidy measures have been adopted. The following subsidies fall into the category of non£­actionable:
¡¡¡¡a. Subsidies granted to promote trade and market expansion
¡¡¡¡b. Subsidies granted to establish support and safeguard system, mainly those on special insurance premium rates.
¡¡¡¡c. Subsidies on research and development.
¡¡¡¡Part Two Regulation of Trade in Services ¡¡¡¡As a major effort in response to the WTO accession, Shanghai is opening its market for trade in services to grant more market access and to speed up foreign investment. Standing in relative advantage in developing its trade in services, Shanghai has grasped good opportunities of China's entry and availed itself of the pioneering position in finance, insurance, value£­added telecom, retailing and professional services in China. Centered on services in finance, commerce, real estate, logistics, conference £¦ exhibition, and intermediary agencies, the opening of trade in services is stepped up to attract more foreign investment. As a result the comprehensive service functions of the city are constantly enhanced.
¡¡¡¡Related measures taken in Shanghai since 2002 are as follows:
¡¡¡¡a) Attracting regional headquarters of multinational companies to Shanghai. Based on ¡°Tentative Regulations on Encouraging Multinational Companies to Locate Regional Headquarters in Shanghai¡± drafted in the first half of 2002, and with the support of relevant ministries and departments of the central government, Shanghai is promoting the acceptance, examination and approval of the applications made by multinational companies to establish their regional headquarters. So far, 16 multinational companies have received acceptance.
¡¡¡¡b) Establishing purchasing centers for multinational companies. Shanghai encourages multinational companies to set up purchasing centers in Shanghai with tax£­refund priority and all£­round supportive services as well as year£­long exhibition locale. By granting the purchasing and export right to the multi£­national purchasing center, Shanghai hopes to allow more foreign enterprises access to foreign trade. The world£­famous commercial businesses, in particular, are allowed to establish their purchasing centers or open up shops or branches to introduce advanced product ideas and management concepts.
¡¡¡¡c) Speeding up the market opening to international logistics. To further develop foreign trade in Shanghai, promote fair trade and trade facilitation, Shanghai hopes to utilize more foreign investment to expand trade£­related service industries. Shanghai has taken the lead in introducing and developing the third party logistic enterprises by working with famous international logistics companies for valuable management experiences, which will inject vitality into the development of international logistics in Shanghai.
¡¡¡¡d) Vigorously promoting the cooperation and joint venture in conference £¦ exhibition. To gain from the dynamic interaction between conference £¦ exhibition and foreign trade, Shanghai uses its unique position as the pioneer in the area to go big on conference £¦ exhibition. More famous foreign companies of exhibition will be attracted to Shanghai so that relevant international standards can be applied as early as possible, which shall further facilitate fair trade between China and other WTO members.
¡¡¡¡e) Expanding foreign investment in finance. Taking advantage of the pioneering position of the Pudong New Area, the city is expanding the scope of financial services with foreign investment and exploring offshore finance possibilities. At the same time, internationally popular forms of investment are being introduced including overseas fund, international venture capital fund, project financing and listing on overseas equity market so that more flexible financial management pattern will be identified to provide innovative services to trade financing, finance and insurance.
¡¡¡¡f) Encouraging the establishment of intermediary services in law, accounting, consultancy etc. through further opening up such professional services.
¡¡¡¡g) Accelerating the opening in tourism and other fields of culture and education. Shanghai is promoting the use of foreign investment to develop its tourism, science and education, culture and sports so as to run pilot programs in these areas.
¡¡¡¡Part Three Trade£­related
Investment Measures
¡¡¡¡In line with the accession commitments, Shanghai has abolished relevant laws, regulations and other measures which require the balance of trade and foreign exchange, local content, export performance, compensation and technology transfer.
¡¡¡¡Part Four Protection of Trade£­related
Intellectual Property Rights
¡¡¡¡2002, the first year after China's entry into the WTO, was a tough year because it had to cope with arduous tasks of protecting and regulating intellectual property rights without a transitional period. That constituted the first and new challenge to Shanghai. What Shanghai has done was to resolve the emerging issues on practical basis in the protection of intellectual property rights by giving full play to government, society, market and enterprise initiatives. In transforming the role government used to play, trade associations now take a positive part in the regulation of intellectual property rights. Enterprises are provided with the full knowledge and skills of the international rules in intellectual property rights protection, thus enhancing their competitiveness in the world market.
¡¡¡¡1. Administrative enforcement of patent law
¡¡¡¡The Shanghai Patent Bureau has been making unswerving efforts to strengthen patent protection by cracking down on patent infringement and fake products in order to cultivate a healthy investment environment and build up a favorable image of an international metropolis. While equal attention is paid to both the publicity and the administrative enforcement of the Patent Law of the People's Republic of China to safeguard the legitimate rights and interests of patentees, patent disputes were solved efficiently and promptly through legal means and administrative conciliation. At the same time, efforts have been made to maintain market and economic order by cracking down on patent counterfeiting and infringement. From January to December of 2002, the Shanghai Patent Bureau has accepted 39 cases of patent infringement and another 24 cases carried over from the preceding years. So far, 50 of these 63 cases have already been closed. Among them, 26 cases were recalled by the appellants and the other 23 settled through conciliation. In the course of investigation into patent counterfeiting, 17 cases have been filed and settled.
¡¡¡¡While looking into those cases, the administrative bodies endeavored to popularize the Patent Law of the People's Republic of China so as to raise the awareness of the infringers in patent protection. And on the other hand, assistance is provided to new product developers in conducting necessary research for already registered patents prior to their development and application for patents. Regular inspection of the market has pushed businesses for standardized management of patented products in market circulation, stopped in time such illegal activities as forging patent number or patented marks, and thus taught the offenders an instructive lesson.
¡¡¡¡2. Administrative enforcement of copyright law
¡¡¡¡From January through December of 2002, the Shanghai Copyright Bureau has dealt with 68 cases, confiscating 25,838 pirated copies of textbooks and reference books, 36,119 pirated copies of other books and maps. Administrative punishment was given in 9 cases, with a total confiscated amount of RMB335 and fine of RMB108,292. 59 cases were solved through conciliation, involving civil compensation of RMB37,700.
¡¡¡¡During the same period in 2002, the Bureau also accepted 4 complaints from Microsoft and other foreign software companies, 2 of which have been settled through conciliation (yet to be implemented) and the rest of which are being processed. Besides, the Bureau has accepted 2 complaints from AUTODESK, which are also in process. BSA made 2 complaints on behalf of its member companies. One has been settled through conciliation (yet to be implemented), and the other is in process. Furthermore, under the entrustment of the State Copyright Bureau, a case is being processed where the frequency transformers sold by some distributors of electromechanical equipment were found to have infringed the copyright of certain software involved.
¡¡¡¡3. Enforcement of laws protecting trade marks.
¡¡¡¡In 2002, the Shanghai Industrial and Commercial Administration investigated 939 trademark violation cases, 2£¥ down from the same period last year. So far, 911 cases have been closed, with a total fine of RMB11.4133 million, up by 1.4£¥ compared with the same period last year. And 25 cases of them involved a fine above RMB100,000 each. A total of 1.0238 million pieces of illegal trade marks were confiscated and destroyed; 2742 pieces of stencils directly used to produce those trade marks were confiscated; 11.34 tons of goods bearing those marks were destroyed; 6 offenders in 5 cases were transferred to judicial bodies.
¡¡¡¡Of the total violations, 320 cases dealt with involved foreign trade marks, accounting for 44£¥ of the total trademark infringement and forgery cases. So far, 317 cases have been closed. Through specific regulation and routine inspection, Shanghai has successfully settled a number of cases involving the infringement of exclusive rights to foreign trade marks in an effort to protect top£­notch foreign trade marks. And it brought good comments from a lot of foreign£­invested businesses in this regard.
¡¡¡¡ ¡¡¡¡