U.S.-China Trade: Summary of 2003 World Trade Organization Transitional Review Mechanism for China Page: 56 of 101
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Summary of issues by theme Raised by Raised by China's response
United other WTO
Ability of Chinese owned vessel to buy Norway -
insurance directly from an insurance Verbal
company not incorporated or present in
China; taxes applicable to such cross-
border business; restrictions on the
ability of a Chinese company to obtain
foreign exchange to buy direct non-life
insurance from insurance companies
not incorporated or present in China.
Requirement that an insurance Canada - Regarding the questions on language
company must have senior Writtene requirements for senior management
management personnel for the branch personnel of foreign-invested insurance
office who speak Chinese; criteria used companies, China said that CIRC had already
to assess this qualification. changed the related qualification requirements
contained in the measures governing the
qualifications of senior management personnel
of insurance companies. The language
requirement was no longer in force. (Verbalf)
Requirement that foreign-invested firms Canada -
obtain special written permission from Writtene
the regulator before they can negotiate
contractual deposits with local banks.
High minimum working capital Written,a EC - Writtenb China believed that a WTO Member was
requirements for direct branches of Verbalf Japan - entitled to set its own minimum working capital
foreign banks. Verbalf requirements for branches of foreign banks.
Chinese Some other WTO Members also had different
Taipei - working capital requirements for branches of
Written,d foreign banks, although levels might differ.
Verbalf Secondly, China's minimum working capital
Canada - requirement was a prudential requirement,
Verbale which was set up according to the
Australia - development level of its financial sector and
Verbalf the regulatory capacity of the financial
Requirements for minimum working EC - authority. The requirement also tried to cater
capital and capital adequacy ratios Written,b for the demands of foreign bank branches in
required for each direct branch in China Verbalf terms of their business operation. Thirdly,
from the same bank. Canada - along the same line, China also had working
Writtene capital requirements for branches of domestic
banks. However, with the improvement of the
risk management system of foreign banks and
the development of China's regulatory
framework, China Banking Regulatory
Commission (CBRC) would relax the minimum
capital requirement for foreign banks
accordingly. Finally, the Chinese
representative reiterated that the determination
of the minimum capital requirements was a
legitimate right of a Member to regulate, and it
was irrelevant to GATS rules and China's
accession commitments. He expressed the
hope that future TRM processes would not be
bothered by such irrelevant questions.
Draft regulation that would limit inter- EC - Writtenb With regard to the 40 percent limitation on
bank financing to 40 percent of RMB Japan - interbank borrowing, the Chinese
liabilities of a bank. Written,c representative said that at present there was
Verbalf no such regulation for foreign banks. The
Canada - requirement did not exist at this moment. China
GAO-05-209R U.S.-China Trade
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United States. Government Accountability Office. U.S.-China Trade: Summary of 2003 World Trade Organization Transitional Review Mechanism for China, text, January 25, 2005; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc301428/m1/56/: accessed May 19, 2019), University of North Texas Libraries, Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.