World Trade Organization: U.S. Companies' Views on China's Implementation of Its Commitments Page: 2 of 61
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Accountability- Integrity Reliability
Highlights of GAO-04-508, a report to the
Chairman and Ranking Minority Member,
Senate Committee on Finance, and to the
Chairman and Ranking Minority Member,
House Committee on Ways and Means
Why GAO Did This Study
As the second largest source of
foreign direct investment in China,
U.S. companies continue their keen
interest in China's implementation
of its World Trade Organization
(WTO) commitments. China's 2001
WTO commitments include specific
pledges to increase market access,
liberalize foreign investment,
continue fundamental market
reforms, and improve the rule of
law. In 2002, GAO reported on
selected U.S. companies' views,
finding that many commitment
areas, particularly those related to
rule of law, were important to U.S.
companies. GAO also found that
company representatives expected
China's reforms would have a
positive impact on their business
operations but expected some
difficulties during implementation.
In 2003, GAO continued to analyze
companies' views about (1) the
extent to which China has
implemented its WTO
commitments and (2) the impact of
China's implementation of its WTO
commitments on U.S. companies'
business operations. GAO
collected the views of
representatives from 82 U.S.
companies with a presence in
China. GAO focused on companies
in the agriculture, banking,
machinery, and pharmaceutical
industries. Results reflect a
response rate of 60 percent of the
study population. These responses
may not reflect the views of all U.S.
companies with activities in China.
To view the full product, including the scope
and methodology, click on the link above.
For more information, contact Loren Yager at
(202) 512-4128 or yagerl @ gao.gov.
WORLD TRADE ORGANIZATION
U.S. Companies' Views on China's
Implementation of Its Commitments
What GAO Found
U.S. company representatives who completed GAO's 2003 questionnaire
thought that China had implemented most of the 26 listed WTO commitment
areas on average only to some or little extent. When respondents assessed
five areas found to be of greatest importance to their companies overall - (1)
standards, certifications, registration, and testing requirements; (2) customs
procedures and inspection practices; (3) intellectual property rights; (4)
tariffs, fees, and charges; and (5) consistent application of laws, regulations,
and practices - responses were mixed, but they reported that China had
taken at least some steps to implement these commitment areas. Our
analysis showed that the importance placed on specific areas differed among
the agriculture, banking, machinery, and pharmaceutical industries. For
example, agricultural respondents identified tariffs as important while
banking respondents identified scope of business restrictions for services as
important. Few respondents were able to assess all of China's commitment
areas for reasons that varied depending on each company's experience and
operations in China.
More than two thirds of respondents reported that China's implementation
of its WTO commitments had a positive impact on their companies' ability to
do business in China. However, some respondents indicated that China's
reform efforts had created difficulties for their company operations in China.
Overall, company representatives reported that company activities, such as
volume of production in China and company revenue stream, have increased
since China joined the WTO. However, respondents noted that changes in
business activities cannot be directly attributed to China's WTO accession.
Impact of China's WTO Implementation on GAO Questionnaire Respondents' Companies
Little or no impact
Source: GAO 2003 Questionnaire of U.S. Companies in China on China-WTO Issues, question 8.
Note: Number of respondents = 80. Two respondents had no basis to judge.
United States General Accounting Office
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United States. General Accounting Office. World Trade Organization: U.S. Companies' Views on China's Implementation of Its Commitments, report, March 24, 2004; Washington D.C.. (digital.library.unt.edu/ark:/67531/metadc298401/m1/2/: accessed September 22, 2018), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.