Over the next few years, China faces the prospect of major regional and bilateral trade negotiations. A likely key element in such negotiations is trade arrangements involving state-owned enterprises (SOEs). China is viewed from outside as having a large SOE sector, and large SOEs are viewed as having a protected monopoly position in domestic Chinese markets. This paper discusses some of the key sub-issues potentially arising with SOEs in these negotiations. These include: arrangements for SOEs under China’s antitrust laws as well as the operation of these arrangements in practice via case law, and how trade is affected by them; the potentially large increase in Chinese coverage of the World Trade Organization (WTO) government procurement code if Chinese SOEs were to be included under it; the implications of the changing relative size of SOEs and private sectors in China for the “non-market” economy (NME) designation, which China consented to upon WTO accession; and claimed subsidization of SOEs through various devices. The aim is to lay out a potential negotiating issues list for SOEs to better focus debate and outline possible approaches to accommodation, rather than definitively resolve the issues.

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CIGI Papers present in-depth analysis and discussion on governance-related subjects. They include policy papers that present CIGI experts' positions or contributions to policy debates, and background papers that contain research findings, insights and data that contribute to the development of policy positions.
  • Hejing Chen worked as a post-doctoral fellow in the Department of Economics at the University of Western University from September 2010 to June 2014. She holds a Ph.D. in economics from Xiamen University and her research interests are international trade in services, China’s economic policies and international finance.