China has confirmed the application of WTO rules to state-owned
enterprises and extended those disciplines to state-invested enterprises,
e.g., companies in which the government has an equity interest. Under these
commitments, China’s state-owned and state-invested enterprises are
required to buy and sell based on commercial considerations, such as quality
and price.
China must also provide U.S. companies opportunities to sell products to
state-owned and state-invested enterprises.
Purchases and sales of goods and services by state-owned enterprises, for
commercial resale, or for use in the production of goods for commercial sale
are not considered to be government procurement and are subject to WTO
rules.
Application of the WTO Agreement on Subsidies and Countervailing Measures
(SCM Agreement) to state-owned enterprises has been clarified. The agreement
establishes that the United States can use alternative benchmarks in
determining whether China’s government has provided a benefit to an
industry, such as equity infusions or soft loans. We have also clarified
that we can take action against certain subsidies given to state-owned
enterprises.
