U.S.-China Trade: Summary of 2003 World Trade Organization Transitional Review Mechanism for China Page: 57 of 101
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Summary of issues by theme Raised by Raised by China's response
United other WTO
Writtene was of the view that future liberalization should
not be discussed in the context of TRM.
Requirement for 30 percent of the EC - Writtenb Some of the questions raised were related to
working capital of foreign branches to CBRC's prudential regulation and
be deposited at a local bank listed by administration of foreign invested banks (e.g.,
Chinese authorities or used to buy the requirement to deposit 30 percent of
Government bonds. working capital of foreign banks at a local
bank). These measures were for the purpose
of regulating the operations of foreign banks,
and were based on prudential principles. The
objective was to keep away financial risks
arising from the operation of foreign banks.
These prudential regulations to prevent
financial risks should also be respected.
Reason for limited opening of foreign EC -
banks to one new branch per year, Written,b
unlike Chinese banks; prudent Verbalf
restrictions in its licensing regime. Japan -
Procedures and criteria used in Japan - On the questions concerning the commitment
determining the extent of local currency Writtenc to permit foreign financial institutions to provide
services that a foreign financial local currency business to Chinese enterprises
institution is allowed to engage in. two years after accession. In that regard, China
would implement those commitments in due
time according to what was stated in the
Multi-stage licensing process for banks Chinese The licensing procedure for foreign banks was
as trade barrier for market access. Taipei - a domestic regulation issue in nature, based on
Written,d the need of prudential regulation and in
Verbalf conformity with the internal working formality of
Canada - China's regulatory body. This licensing
Written,e procedure applied equally to foreign-invested
Verbalf banks and domestic banks. Secondly,
according to China's research, many WTO
Members had similar requirements with regard
to licensing procedures for the approval of
foreign banks. Certain developed-country
Members also required a "preliminary review"
or "pre-review" stage before final approval.
Thirdly, at present, Members were engaged in
discussions on a possible multilateral discipline
on licensing procedures, and therefore it was
inappropriate for the Committee to review
China's licensing procedures before any
possible discipline in the future. (Verbal')
Plan and time schedule to introduce Canada -
more flexibility into China's capital rules Writtene
to help smaller firms compete on a more
Reason for requirement that the value of Canada - There was one question on the requirement
a foreign bank's foreign currency Writtene that the value of foreign banks' foreign
deposits received within China shall not currency deposits within China should not
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/m1/57/: accessed May 24, 2019), University of North Texas Libraries, Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.