PRC commentary (41)

context: Canada supplied 74 percent of the PRC’s imported canola meal in 2024, covering 45 percent of domestic supply. The ongoing anti-dumping probe into Canadian canola seeds, launched in September 2024, has already curbed imports. If further restrictions follow, feed costs could rise as lower canola imports already push a soymeal rally. The 100 percent tariff on Canadian canola oil and meal, effective 20 March 2025, aligns with Beijing’s push to diversify agricultural imports.

The tariff decision follows Canada’s 2024 tariffs on PRC EVs (100 percent) and steel/aluminium (25 percent), prompting Beijing’s anti-discrimination probe. Market expectations had centred on canola seed and meal as likely targets, but canola seed imports remain unaffected, writes Futures Daily.

The announcement had a muted impact on canola oil futures, which rose 4.61 percent before pulling back. However, canola meal surged due to supply concerns.

Canada’s role in the PRC’s vegetable oil market has declined since 2018 when its share of canola oil imports stood at 70–80 percent. That share had fallen to just 0.03 percent by 2024, while Canada still accounted for 96 percent of the PRC’s canola seed imports (6.13 million tonnes) and 74 percent of canola meal imports (2.02 million tonnes).

The latest tariffs reinforce the PRC’s long-term shift away from Canadian suppliers. The market anticipates greater diversification in oilseed imports.

However, global canola supply constraints add complexity. 

The USDA forecasts 2024/25 global canola production at 85.31 million tonnes, down 4.6 percent y-o-y, with Canada’s production falling 7 percent to 17.8 million tonnes due to lower yields and reduced acreage.

EU and Australian canola output is also declining, and supply is tightening. Meanwhile, PRC canola imports dropped in early 2025, with March arrivals projected at just 260,000 tonnes. Low crushing volumes and declining stocks are further reshaping the market.

Vegetable oil markets remain volatile.

Palm oil faces weak export demand, with Indonesia delaying its B40 biodiesel mandate, while soybean oil tracks US–PRC trade tensions. South American output is strong, but US acreage cuts are providing some price support.

While the tariff’s impact on canola oil supply is limited, analysts see continued upside for canola meal, as tightening imports sustain higher feed costs. Traders are closely watching stock levels and trade flows, with spread opportunities emerging between canola, soybean and palm oil.

context: The 2025 No.1 Document prioritises industry relief, proposing a set of stabilisation policies. Key recommendations from legislators include cost reduction measures, supply chain improvements and import adjustments. While some policy responses—such as a potential resumption of live cattle transport subsidies—are gaining traction, industry leaders stress the need for long-term risk management, quality upgrades and financial support to ensure resilience.

Wholesale beef price has dropped 25.7 percent y-o-y, reaching C¥57.32/kg on 10 March 2025, down from C¥77.15/kg in early 2023, writes Farmers Daily. 

The decline marks a five-year low, driven by herd expansion, rising beef imports and dairy cattle culling, notes Zhang Li 张莉 NPC (National People’s Congress) representative and Anhui Livestock Technology Extension Station director.

Stabilising the industry requires coordinated supply chain efforts, Zhang argues. Seed technology innovation, better cost management and improved beef grading standards are critical to restoring profitability.

Zhang focused on transportation costs in 2024, highlighting that moving cattle from northeast China to Anhui costs C¥115–252 per head (C¥0.3–0.5/kg).

She proposes reinstating green transport subsidies for live cattle to ease financial burdens on farmers.

Excessive beef imports have worsened price pressure, argues Zan Linsen 昝林森 Chinese People’s Political Consultative Conference member and Northwest A&F University professor.

The PRC imported 2.91 million tonnes of beef in 2024, 48.8 percent of total meat imports. Large-scale foreign producers have a cost advantage over Chinese farms, undermining domestic competitiveness.

He recommends adjusting import quotas and enforcing stricter quality standards to protect higher-value domestic beef.

Beyond short-term relief, risk mitigation is essential. Market monitoring, early-warning systems and data integration across agencies should be strengthened to stabilise industry expectations, advises Zan.

Financial support is also key, contends Chen Enming 陈恩明 NPC representative and Binzhou Agricultural Technology Promotion Centre senior engineer.

He proposes feed cost subsidies for corn silage, as many farms rely on cheaper alternatives due to high grain prices.

Extending subsidised livestock loans from one to three years to five years and introducing price insurance could enhance sector resilience.

While beef prices remain weak, local recoveries have emerged following the No.1 Document’s release, notes Zan.

The downturn presents an opportunity for structural upgrades, with calls for improved breeding programs, cost-efficient feeding methods and technology-driven productivity gains to drive long-term sustainability.

context: The State Council Customs Tariff Commission has announced a sharp increase in tariffs on Canadian agricultural imports, further escalating trade tensions. Presented as a direct response to Canada’s October 2024 tariffs on Chinese electric vehicles, steel and aluminium, the measure is separate from the Ministry of Commerce ongoing anti-dumping investigation into Canadian canola, launched in September. While the latest tariffs are expected to have little direct impact on canola oil imports, they carry significant implications for canola meal supply. 

A 100 percent tariff on Canadian canola oil, canola meal and peas and a 25 percent tariff on seafood and pork will take effect on 20 March 2025.

The tariffs apply to the listed products without exemptions under existing bonded or tax reduction policies. Beijing framed the measure as a necessary counteraction, labelling Canada's tariffs as discriminatory and violating WTO rules.

The impact on Canadian canola oil will be minimal, argues China Grain Net.

Canola oil, a widely used cooking oil, has already seen a sharp decline in Chinese imports from Canada, accounting for less than 1 percent of total imports in 2024, while Russia supplied 58 percent. Some shipments arrived in early 2025, but further wash trades remain likely.

The tariffs will effectively exclude Canadian canola oil from the Chinese market, easing oversupply concerns and stabilising domestic prices.

However, the impact on canola meal will be more pronounced.

Canola meal, a key protein source in animal feed, is a critical Canadian export to the PRC. Canada supplied 74 percent of the PRC’s imported canola meal in 2024, making up 45 percent of total domestic supply.

The ongoing anti-dumping investigation into Canadian canola seeds, launched in September 2024, has already curbed imports.

If the investigation results in further trade restrictions, Chinese canola meal imports from Canada are expected to decline further, tightening domestic supply and potentially driving up feed costs.

The tariffs align with Beijing’s broader strategy to diversify agricultural imports, reducing reliance on Canada in favour of Russia and Belarus. These measures signal a potential long-term shift in the trade relationship, with implications for both countries' agricultural sectors.

context: The US announced further restrictions on advanced semiconductor exports to 140 PRC companies on 2 December 2024. The Ministry of Commerce responded swiftly with tit-for-tat measures, stopping exports of some critical minerals used in semiconductors to the US such as gallium, germanium, antimony and ultra-hard materials. As PRC–US high-tech rivalry intensifies, similar sanctions may follow, exacerbating decoupling as both sides step up 'self-reliance' drives.

Huo Jianguo 霍建国 China Society for WTO Studies vice director shares his insights on the Ministry of Commerce's latest measures

• objectives
  • safeguard national security and interests
  • fulfil its international obligations, such as preventing proliferation
  • countermeasure against the US' abuse of export control measures and unilateral hegemonic practices
• rationale of the measures
  • exert greater pressure on the US in procuring these critical minerals
    • with the PRC's dominance in the export of these products and relevant technological processes, the US faces challenges in finding alternative suppliers
      • these supply contracts are usually long-term and fixed, it is hard to switch suppliers easily
  • the measures are aimed to let the US' feel the 'pain' and costs from unilateralism so that it would return to the negotiating table with the PRC
• future strategies for the PRC
  • PRC retaliatory measures may expand beyond entities and assets in PRC, to impact entire global industry chains related to the PRC
  • the PRC will work together with other like-minded cuntries to raise the US' costs for its radical containment strategy
• three key significances of the measures
  • demonstrates the PRC's determination to defend its development rights and push for industrial upgrades
  • targets the US military-industrial complex and semiconductor industry directly
  • aims to deter further US provocations and encourage a more rational approach
    • facing higher pressure, US chip manufacturers are likely to put more pressure on the incoming Trump administration
    • relevant PRC industry associations in internet, semi-condutor and automobile are also calling for 'cautious procurement' of US chips and to step up domestic chip production
      • PRC market influence as the world's largest market will put even more pressure on US chip firms

context: Under Trump’s 'America First' agenda, the global economic landscape faces unprecedented uncertainty. Trump’s proposed high tariffs threaten to rewrite trade relationships, disrupt global supply chains and weaken the multilateral trade system. During Trump's first term, the PRC initially reacted with a ‘rational and reserved’ tit-for-tat counter-tariffs that many interpreted as a over-assertive foreign posture. Beijing then refocused on 'doing our own thing well', excluding industrial policy from trade negotiations. Economist Zhang Monan 张茉楠 argues basic disagreements over political and economic structures will fuel tensions for decades to come.

The return of Trump could escalate US–PRC trade tensions, warns Zhang Monan 张茉楠 China Centre for International Economic Exchanges US and Europe Research Department deputy director.

Trump's proposed measures—such as revoking the PRC’s PNTR (Permanent Normal Trade Relations) and imposing tariffs of up to 60 percent—would not only disrupt bilateral trade but also severely impact the global industrial and supply chain system. Zhang cites a Peterson Institute estimate, which shows that canceling PNTR would harm US industries, widen the trade deficit and worsen inflation.

Trump has vowed to impose a 10–20 percent tariff on all foreign goods. While it remains uncertain how much of this agenda will materialise, Zhang cautions that such a framework would trigger a 'new tariff cold war', fundamentally rewriting US–PRC trade relations and likely spark a serious global trade war.

Trump’s initial tariffs, which began in 2018, targeted a wide range of PRC goods—from high-tech products to raw materials and consumer goods—and Biden has largely upheld these measures. In 2023

• bilateral trade between the US and the PRC fell 11.6 percent to $664.5 bn that year
• PRC exports to the US dropped 13 percent, while imports fell 6.8 percent
• the PRC’s trade surplus with the US narrowed to US$336 bn, a 17 percent y-o-y decline, marking its lowest level in over a decade
• US dependence on PRC imports shrank from 21 percent in 2018 to around 14 percent in 2023
• the share of capital goods and intermediate goods imported by the US from the PRC dropped to 16.1 percent and 9.2 percent, respectively—declining by 15.2 and 4.6 percentage points since 2017

Despite these declines, trade has not disappeared—it has shifted, says Zhang. She highlights that tariffs have altered bilateral trade volumes but not the broader global trade structure. Paradoxically, these policies have strengthened the PRC’s economic ties with emerging markets and extended its indirect trade links with the US, she says, noting

• PRC–Mexico trade grew at an annual rate of 15 percent from 2019 to 2022
• Indian imports from the PRC surged, particularly in sectors like machinery and chemicals

context: The rules-based WTO system is increasingly being challenged, not least by the impairment of its dispute settlement system, rising trade protectionism, PRC–US trade frictions and controversy surrounding subsidies for green industries. Seeing that this is in their interests, Beijing is vocal about upholding multilateralism with the Global South. But at the same time, the PRC is actively leveraging bileteral, regional and Belt and Road Initiative projects to negotiate new trade deals and rules. In response to recent geopolitical and trade shifts, participating in the current trade order and forging a new one are both high on Beijing's agenda.

Trade conflicts related to green subsidies such as electric vehicles will be more frequent, as the WTO has yet to establish a set of trade framework to addresss climate change, suggests Zhang Xiangchen 张向晨 WTO deputy director-general

• subsidies
  • WTO has its own rules about subsidies
    • but WTO members do not have a consensus about how to handle new developments such as green subsidies
  • more explorations and negotiations are required to discuss what are good and bad subsidies
    • conditions for these actions do not exist at the moment
      • need to wait until the timing is ripe
    • more discussions and negotiations, while complicated, are better than bilateral trade frictions and unilateralism
• 'reglobalisation'
  • is about being more inclusive to developing countries, especially African countries, allowing them to reap the benefits of this round in globalisation
  • the benefits of the last round of globalisation have not been shared equally between countries
  • there are now new opportunities brought by the adjustment in supply chains (e.g. in labour costs and geopolitics)
    • multinational firms have changed their concepts from the last round of globalisation to priortise efficiency above all else
      • now they are balancing between profits and security, which are bringing opportunities to developing countries due to the reallocation of global supply chains
        • e.g. Morocoo has attracted a lot of PRC investment as there are no tariff barrriers on production and exports from there to the EU

Zhang points out that further integration in the global supply chains by some of these African countries can help them move up the global supply and value chains, facilitating their digital and green transformation in the process

• e.g. the PRC has been gradually earning more from each Apple iPhone as it takes up more parts on the value chain
• greater integration in the global value chains means a greater chance for that country to improve its industries 
  • this has allowed the PRC to manufacture more components in the country without relying as much on imports

context: After hitting the second-highest volume on record in 2023, grain imports surged through H1 2024, driven by low global prices. Import volumes rose 9.3 percent y-o-y through May, reaching 84.18 million tonnes by the end of H1, up 4.7 percent y-o-y. However, these low prices saw the value drop 13.9 percent. Recent rumours suggest that import restrictions may be imposed to support domestic grain prices. This follows previous price support measures, like Agricultural Development Bank of China earmarking C¥110 bn for summer grain purchases in May to stabilise prices. 

Beijing reportedly plans to tighten grain import restrictions to protect domestic farmers and stabilise local grain prices. 

The government may cap total annual grain imports at or below 2023 levels. Any excess could be delayed until 2025, with controlled customs clearance to manage monthly import volumes, reports New Agriculture Observer. This would mean capping imports of the 'four major grains' (rice, wheat, corn and soybeans) at 3.7 million tonnes/month for the rest of the year. 

Major grain importers were advised in the last week of August to halt the import of barley and sorghum to boost domestic prices and support farmers' incomes, reports Grain & Oil Daily. Barley imports have risen 67 percent, and sorghum has surged 95 percent y-o-y January–July 2024. Despite falling domestic prices, foreign barley and sorghum are mainly used for feed, thus squeezing out demand for corn and weakening domestic prices.   

USDA data shows that no new-season corn has been sold to the PRC this year, compared to 270,000 tonnes last year, raising concerns about future adjustments to the PRC’s import targets and the pressure this would exert on global grain prices. This is despite imported US corn costing C¥1,930/tonne, including taxes, around C¥400/tonne cheaper than domestic corn [CP note: another sign of the broad push to 'de-Americanise' imports].

Domestic corn and wheat prices have shown signs of stabilising in response to the news of potential import restrictions. However, despite the expected tightening of import controls, the impact on the domestic market might be limited due to ample domestic supply, including increased corn production and sufficient wheat reserves, argues New Agriculture Observer. 

The primary challenge is weak demand, particularly in the feed sector, rather than supply. Decreased pig farming activity has led to a decline in feed consumption, lowering the demand for corn. The drop in corn prices has increased its competitiveness, reducing the demand for wheat as a substitute. Even if grain imports are restricted, weak domestic demand will continue to exert downward pressure corn and wheat prices.

context: After issuing Opinions on accelerating the development of a carbon footprint management system in November 2023, Beijing issued a plan in June to set one up and another plan on controlling total amount and intensity of carbon emissions in August. The new system aims to encourage greater cooperation and trust in international carbon footprint work and help achieve dual carbon goals. Advisors have called for Beijing to replace Western overcapacity theories with ‘green transition’ and ‘climate justice’ narratives. 

Guided by the MIIT (Ministry of Industry and Information Technology) Electronic Information Department, China Electronics Standardisation Institute officially launched the 'PV (photovoltaic) industry product carbon footprint basic database and accounting platform' in Beijing on 23 August 2024, according to East Money.

This marks the initial establishment of the PRC’s carbon footprint accounting system for the PV industry. The platform provides comprehensive technical support for the entire carbon footprint accounting process, from standard foundations and data acquisition to accounting software application.

This development is of great significance, enabling PV industry enterprises to accurately and efficiently account for the carbon footprint of their products, thereby promoting energy conservation, carbon reduction, and the overall green and low-carbon development of the industry, the report says.

context: Institutional opening is Beijing's top policy initiative to remove non-tariff barriers, open up services and align domestic standards and rules with high-level international trade agreements like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. In June 2023, the State Council released 33 measures to foster institutional opening in free trade zones and the Hainan free trade port. Seen as a key to boosting trade growth, acquiring advanced know-how and responding to Western decoupling, more efforts in institutional opening can be expected. 

CCTV (China Central Television) announced 33 measures in line with institutional opening have been put into practice, noting that some of the measures may be expanded further to other regions. The article outlines the implementation of rules in 

• goods trade
  • 12 out of the 33 pilot measures are related to goods
  • exemption of customs duties for aircraft, ships and their parts that temporarily left the country for repair but returned to the Hainan free trade port, regardless of whether value-added activities had taken place
    • 92 such exemption cases were processed, saving enterprises C¥4 million
  • allowing the import of remanufactured products
    • before the pilot program, the PRC limited and prohibited some imports of remanufactured products
    • 62 types of remanufactured products are now allowed for import with an annual estimated trade value of C¥500 million
      • e.g., reciprocating piston engines and automotive transmissions
• services trade
  • introduced the nataional negative list of cross-border services trade
    • opening up areas such as professional qualifications of natural persons, professional services and finance
  • efforts made by the Beijing FTZ (free trade zone)
    • recently updated the list of recognised overseas professional qualifications to increase the number of professions from 82 to 122
      • professionals holding relevant certifications can practice in Beijing and provide professional services
      • selected 16 high-recognised professional qualifications and matched with corresponding intermediate titles
      • matched corresponding advanced titles and introduced talents for seven urgently needed overseas professional qualifications 
      • actively promote the standardisation and mutual recognition of corporate talent evaluation criteria with overseas partners
      • accelerate the expansion of openness in sectors such as the internet, telecommunications and healthcare

The article notes that the FTZs are exploring other 'institutional innovation' based on their respective strengths and positioning

• Tianjin and Fujian are exploring in the digital economy field
• Zhejiang and Jiangsu are exploring innovative development of the whole industry chain in key commodities and biomedicine

Cui Weijie 崔卫杰 Chinese Academy of International Trade and Economic Cooperation vice dean notes that besides the common missions assigned by the centre, FTZs will also undertake differentiated exploration of reform and liberalisation based on major national strategic tasks.

context: The much-anticipated Third Plenum concluded in July 2024. Emphasising addressing geopolitical trade risks (something often off-script at economic conclaves), it revealed Beijing’s concerns over challenges from intensifying decoupling. For some PRC experts, potential remedies for this include stepping up reform and 'institutional opening' to establish closer ties between China and the rest of the world.

Zhang Yansheng 张燕生 China International Economic Exchange Centre chief researcher unpacks the Third Plenum spirit via 'three-relationships'

• relationship between opening up and reform
  • emphasis on greater synergy between the two
  • modernisation with Chinese characteristics needs to be positioned from global perspectives
    • against rising trade disputes with other countries in the 'new three' sectors, the PRC needs to establish domestic and export coordination mechanisms
      • a great power such as the PRC will generate large production and export volume in any emerging industrial sector, and managing this will be key to future development
    • the PRC should commit itself to global cooperation and develop third party markets together with other countries
      • rethinking global production and cooperation systems
  • while the West champions delinking from China in their new wave of globalisation, the PRC's response should be further expanding global cooperation
    • consensus building and sharing development dividends 
• relationship between Chinese-style modernisation and socialism with Chinese characteristics
  • one prominent facet of Chinese-style modernisation is a massive population driving new productive forces
  • the PRC needs to think about how to balance its domestic development and external responsibilities
  • maintaining socialism with Chinese characteristics and the party's comprehensive leadership will be key to managing the US–PRC rivalry and efforts to foster common prosperity 
  • Western countries' recent pivot to industrial policies is a response to over-marketisation policies introduced in the 1980s, but the PRC faces a different problem of lagging behind in marketisation
    • the role of market mechanisms should be further leveraged
• relationship between Chinese-style modernisation and modernatisation of governance
  • improve national macro-governance to be more professional, market-oriented, rules-based and international
    • US–PRC macroeconomic cycles are not sychronised, which is creating competition in their governance capacities
    • three indicators are key to guage this competition
      • comparing norminal GDP, total factor productivity and ROE (return on equity) net return on assets 
  • improve the national strategic planning and coordination system
    • revise industrial policies to address stagnation in scitech caused by the market liberalisation wave of the 1980s
  • expand domestic demand
    • the PRC should
      • provide short-term consumer subsidies
      • increase disposable income for people
      • realise social security reform and grow the middle-class
      • increase the fiscal deficit rates to address the lack of funds and liquidity inadeuacies of local governments, businesses and people

context: The need to establish a robust product carbon footprint database has become increasingly urgent, especially following the introduction of the EU's Batteries Regulation. This issue was a focal point for several experts at this year's Two Sessions in March. The PRC dominates global lithium battery production, but its heavy reliance on coal results in significantly higher CO2 emissions compared to other manufacturing countries. Experts argue that increasing the proportion of green energy and enhancing the traceability of China's battery supply chain are critical steps for protecting domestic companies and ensuring sustainable practices.

Establishing a product carbon footprint database can help Chinese firms avoid overestimation of product footprints due to a lack of data, argues Qiu Lin 邱林 Envision Intelligent Zero Carbon chief scientist at the China Automotive Power Battery Industry Innovation Alliance annual meeting held 30 May.

To further reduce carbon footprints, Lin suggests

• increasing the direct supply of green electricity is the number one means of reducing carbon footprints
  • due to overreliance on thermal power, China’s battery industry carbon footprint is 20-40 percent higher than other battery manufacturing countries such as Japan and South Korea 

The EUs new Batteries Regulation calls for comprehensive supervision of the power battery supply chain, including minerals mining, battery manufacturing, utilisation and recycling. At present, the PRC lacks a carbon footprint database for the entire life-cycle of battery products. 

Carbon footprint refers to the CO2 emissions generated during the entire life cycle of the battery, including from upstream raw materials mining and processing, midstream battery manufacturing and transportation and downstream consumer use. 

At least 30 percent of the carbon footprint of an electric vehicle comes from the battery, explains Liang Rui 梁锐 New Wanda vice-president. The focus of battery carbon footprint management is on the supply chain, especially manufacturing of cathode and anode materials.  

In addition, with international policies and customers’ increasingly stringent supply chain ESG (environment, social, governance) management, domestic battery companies will inevitably have to export data overseas. But companies currently face security and compliance challenges in data export. This requires joint efforts from regulatory agencies, industry associations, firms and institutions argues Liang, including 

• issuing detailed rules for power battery data export compliance under ‘Measures for data export security assessment’ 
• helping companies improve data export awareness and compliance, data classification and security risk assessment  

context: Services trade is identified as a key growth area in the 2024 government work report. It is also a key area in need of further opening up and reform in the PRC's 'institutional opening' vision to align with international standards. Accounting for around half of the nation's GDP, the services sector is expected to open up further and continue to grow.

In answering journalists' questions, a MofCOM (Ministry of Commerce) spokesperson unpacked the new national and FTZ (free trade zone) negative lists for cross-border services trade, including

• the significance of the two lists
  • demonstrate the PRC's
    • commitment to aligning with high-standard international trade rules and promoting 'institutional opening'
    • willingness to share development opportunities with the world
  • it is the first time the PRC uses an integrated negative list approach to regulate cross-border services trade on a national level
    • this raises transparency and predictability for the industry
    • in the past, the PRC
      • mainly uses positive lists in international agreements to grant other parties market access or national treatment
      • has access measures scattered in various industries and regulatory regimes
  • the lists are based on the results of rules exploration in the Hainan FTP (free trade port)
• further opening up in the FTZs 
  • relaxed restrictions on vocational qualifications for natural persons
    • allowing foreign talents to sit six types of exams, including
      • urban and rural planners
      • real estate appraisers
      • auctioneers
      • registered survey and design engineers
      • veterinarians
      • registered supervision engineers
  • finance
    • adopted some measures already piloted in the Hainan FTP
      • allow qualified foreigners to open securities and futures account
      • allow qualified foreigners to apply to engage in securities investment and futures trading advisory business
  • professional services
    • removes the restrictions on businesses established outside the PRC to engage in customs declaration business
      • overseas service providers can provide customs declaration services to entities in the pilot FTZs in a cross-border manner
  • culture
    • relaxes the restriction on the proportion of key Chinese personnel in PRC-foreign co-produced TV dramas 
      •  from not less than one-third to not less than one-fourth

context: The national commerce work conference organised by MofCOM (Ministry of Commerce) summarised work done in 2023 and planned priorities for 2024. Aside from the usual talking points, the idea of safeguarding national economic security surfaced again, calling for greater vigilance in addressing major risks in trade.

The work conference discussed work priorities in eight areas, including

• expand consumption
  • improve the market and distribution system
  • leverage 'consumption promotion year' and organise various consumer promotion activities
  • stimulate consumption potential
  • cultivate and strengthen new types of consumption
  • stabilise and expand traditional consumption
  • upgrade service consumption quality
• strengthen momentum for foreign trade
  • upgrade goods trade
  • expand intermediate goods trade, cross-border e-commerce exports, innovative service trade and digital trade
• develop the brand of 'Invest in China'
  • promote stable quantity and quality improvement of foreign investment
  • relax market access for foreign investment,
  • strengthen services and guarantees for foreign investment
  • continue to build a first-class business environment that is market-oriented, governed by law and internationalised
• enhance the efficiency of open platforms and expand institutional opening
  • implement upgrade strategies in pilot free trade zones 
  • deepen comprehensive pilots of opening up the service industry
  • enhance the functions of various parks, such as national-level economic and technological development zones
• promote the high-quality development of the BRI (Belt and Road Initiative)
  • implement the eight specific actions of the BRI
  • coordinate and promote landmark projects and 'small and beautiful' livelihood projects
  • expand cooperation in digital, green and other fields
  • improve international economic and trade cooperation mechanisms
• promote innovation in outbound investment
  • improve the quality of cooperation
  • accelerate the signing of high-standard investment agreements
  • improve the quality of overseas economic and trade cooperation zones
• actively participate in global economic governance and strengthen multilateral and bilateral economic and trade cooperation
  • support the 13th Ministerial Conference of the World Trade Organisation to reach pragmatic results
  • expand the scale of high-standard pilot free trade zones
• safeguard economic security
  • strengthen the construction of rules in foreign commerce
  • prevent and resolve major risks

context: NDRC and other agencies issued 'Opinions on accelerating development of product carbon footprint management system' on 24 November 2023. The EU's CBAM (Carbon Border Adjustment Mechanism) is a signal that carbon is on the cusp of becoming a defining and influential factor in global trade. 

In an explainer on its new Opinions on establishing a system for products' carbon footprint, NDRC highlighted the global trend of an increasing number of countries adopting carbon footprint accounting, evaluation and certification systems for key products. Numerous multinational corporations are also integrating product carbon footprints into their sustainable supply chain management prerequisites.

NDRC stresses the new Opinions seek to bolster

• industrial upgrading by promoting energy-saving measures and reducing carbon emissions among enterprises
• green consumption habits and expanding the availability of low-carbon products
• the competitiveness of PRC foreign trade products

The Opinions put forward five key tasks

• formulating product carbon footprint accounting rules and standards
• building a carbon footprint database
• a product carbon label certification system
• enriching product carbon footprint application scenarios
• promoting international connection and mutual recognition of carbon footprints

Supporting these tasks are policy measures including 

• more policy R&D of carbon footprint accounting rules and standards
• encouragement of social capital to invest in commercial carbon footprint databases
• guidance for financial institutions to systematically implement an enterprise-level evaluation system focused on green and low-carbon criteria derived from product carbon footprints
• a specialised working group of product carbon footprint management experts to provide technical assistance for key tasks
• vocational training programs addressing carbon footprint-related aspects
• improving data quality to ensure accuracy and reliability
• measures to combat fraud, false claims and excessive standards 
• strengthening intellectual property protection through dedicated institutions for dispute mediation, arbitration and notary services

context: As part of an outcome of the Third BRI (Belt and Road) International Cooperation Forum, the PRC signed an FTA (free trade agreement) with Serbia on 17 Oct 2023. This is the fourth FTA signed with a European country, after Switzerland, Georgia and Iceland. The negotiations started in April 2023 and were substantially completed in September 2023. Against intensifying trade frictions with the EU and the US, Beijing will deepen ties with Central and Eastern Europe to strengthen its vision for the BRI, as the region remains an important hub connecting the PRC and Eurasia.

According to MofCOM (Ministry of Commerce), the key features of the PRC-Serbia FTA include

• a strong focus on trade in goods
  • the PRC and Serbia will abolish tariffs on 90 percent of all tariff lines
    • 60 percent will be abolished immediately after the agreement comes into effect
    • the proportion of zero-tariff items will eventually reach about 95 percent
    • wide product coverage for tariff cuts
      • both sides will gradually reduce tariffs on products of concern to each side from the current 5 to 20 percent threshold to zero
        • for PRC exports to Serbia, this includes automobiles, photovoltaic modules, lithium batteries, communication equipment, mechanical equipment, refractory materials and some agricultural and aquatic products
      • for Serbian exports to the PRC, this includes electric motors, tires, beef, wine and nuts
  • trade facilitation
    • deepen cooperation in customs, information exchange and streamlining trade procedures
• clarify rules of origin
  • 40 percent of the regional value content shall be used as the basis of the rules of origin, supplemented by product-specific rules of origin
  • set out the specific requirements on the format and procedures of implementing rules of origin
  • accept declarations of origin submitted by approved exporters as evidence of origin
• investment and services
  • both sides agreed to cooperate in investment promotion and facilitation
    • share and exchange investment information
    • enhance the transparency of the investment environment
    • simplify the application and approval procedures
  • liberalise trade in services and market opening in accordance with the WTO General Agreement on Trade in Services
• strengthen cooperation in intellectual property protection
  • follow the principles and provisions of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights 
• other areas
  • strengthen cooperation in health and traditional Chinese medicine
  • set out rules on competition policy to be followed by enterprises on the basis of recognising independent competition law enforcement

context: Premier Li Qiang's September visit to Indonesia is a follow-up to President Xi Jinping's meeting with President Joko Widodo in Chengdu in July 2023, when the two presidents reportedly agreed on fostering cooperation and jointly building a ‘Community of Shared Future’. Indonesia is the largest country in ASEAN by population and land area. Since the COVID-19 pandemic, ASEAN has overtaken the EU and the US as the PRC’s largest trading partner, a trend likely to continue as Beijing commits further to developing RCEP (Regional Comprehensive Economic Partnership) and BRI (Belt and Road Initiative), ASEAN being a key member of both.

Premier Li Qiang 李强 visited Indonesia on 8 Sep 2023 and met with President Joko Widodo in Jakarta. Following up on the earlier consensus between the two countries reached in July 2023 to strengthen cooperation, the two sides signed bilateral documents on cooperation in industry, agriculture, fisheries, e-commerce, and scitech innovation. Li stated that the PRC is committed to 

• deepening strategic trust with Indonesia, supporting each other's major interests and concerns, addressing risks and challenges together, and giving full play to high-level dialogue and cooperation mechanisms
• expanding pragmatic cooperation 
  • related to the Jakarta-Bandung High-Speed Railway
  • developing the 'Regional Comprehensive Economic Corridor' and 'Two Countries, Twin Parks' industrial cooperation as flagship projects for the BRI
  • implementing the RCEP Agreement
    • expanding imports of Indonesian commodities and high-quality ag and fishery products
    • encouraging Chinese companies to invest in Indonesia
  • supporting the construction of Indonesia's new capital
  • working with Indonesia to accelerate 'new engines' of growth such as the digital economy and green development
  • strengthening cooperation in ag, healthcare, youth, education, culture, tourism and other fields
• multilateral collaboration 
  • continuing to promote the 'Bandung Spirit and adhering to 'true multilateralism'
    • pushing global governance in a more just and equitable direction
    • jointly implementing the PRC's Global Development Initiative, Global Security Initiative and Global Civilisation Initiative at bilateral, regional and multilateral levels

context: Xi Jinping stressed 'institutional opening' at the China International Import Expo in Nov 2022. The concept marks a departure from traditional trade policies that focus mainly on reducing tariff barriers. Instead, it places greater emphasis on opening non-tariff barriers and promoting greater openness in the areas of services, standards and rules. This approach recognises that in today's global economy, trade is not just about the movement of goods, but also about the flow of ideas, knowledge and technology. By prioritising institutional opening, promoters suggest China can create a more level playing field for its businesses and investors, and ensure that the benefits of globalisation are shared more broadly and equitably.

In the face of growing anti-globalisation sentiment and increasing unilateralism and protectionism, the traditional approach of opening up commodity and resource flows has become inadequate for meeting the demands of the current global landscape, says Wei Jianguo 魏建国 former vice-minister of commerce.

The broader institutional opening-up approach, which also includes labour, capital, technology and data, is now more effective in optimising the allocation of all production factors, he says. By creating a supportive regulatory framework that encourages competition, innovation and collaboration, institutions can help unlock the full potential of a country's resources and drive sustainable economic growth, he told a seminar on 'China's high-level opening to the outside world and construction as a trade power'.

Institutional opening can play a crucial role in promoting sustainable economic development, agrees Zhu Guangyao 朱光耀 former vice-minister of finance, noting that the shifting dynamics of great power politics require a new approach from China. According to him, the best way to address these challenges is to promote high-level opening-up and deepen integration with the global economy. This would involve leveraging the attractiveness of China's super-large market to the rest of the world, he says.

Two concrete actions are currently being pursued to promote institutional opening up, he says, noting China

• is actively seeking to join the Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPTPP)
• has started negotiations to join the Digital Economy Partnership Agreement (DEPA) 

It is crucial to accelerate the development of a comprehensive top-level framework to enhance the overall systemic nature of institutional openness and ensure its success, says Zhao Ping 赵萍 CCPIT (China Council for the Promotion of International Trade) Academy vice-president. This can be achieved, she says, by establishing effective mechanisms to connect border and post-border systems, and developing high-standard economic and trade rules that support sustainable growth and development.

To effectively prevent economic security risks while expanding opening up, she says China should further establish and improve systems such as anti-monopoly reviews and unreliable entity lists, noting the 'provisions on the unreliable entity list' as a first step.

context: As China celebrates the 20th anniversary of its accession to the WTO, it continues to receive criticism on its unfair trade practices in SOEs subsidies, unilateral trade sanctions, IPR infringements and other trade-distorting measures as harming the global trade system. Despite a recent MoF (Ministry of Finance) announcement opposing discrimination against foreign firms in government procurement activities, China still does not meet the membership requirements of WTO's Government Procurement Agreement after submitting applications on seven occasions.  

A press conference on WTO’s 8th review of China’s trade policies was jointly held by SCIO (State Council Information Office) and MofCOM (Ministry of Commerce) on 28 Oct 2021. The press conference highlighted

• WTO's positive comments
  • thanking China for eliminating tariffs for least developed countries and helping them integrate into the multilateral trade system
• arguments countering WTO criticisms
  • new revisions of Administrative Permission Law and the Foreign Investment Law both ban forced technology transfers through admin measures
  • China’s average goods import tariffs at 7.4 percent are lower than the average of developing countries; for trade in services, almost 120 subcategories have been opened up, exceeding China's WTO commitment of 100
  • China submitted its 2019-2020 industrial subsidy report in time, one of the most challenging commitments for developing member countries
  • China has enjoyed less special treatment as a developing country and overshot a number of voluntary targets
• support for WTO reform
  • reform topics
    • ag subsidy rules
      • some developed countries heavily subsidy ag industry
      • ag subsidy should be discussed together with industrial subsidy to ensure fair competition in both areas
    • tightening regulations to address the overuse of trade remedy measures
    • restoring non-actionable subsidies to free up policy space for member countries in combating COVID-19 and climate change
    • public grain security
    • fishery subsidy
  • dispute settlement mechanism
    • resuming the normal operation of the WTO appellate body to prevent bullying behaviour in trade disputes
  • reform methods
    • for traditional topics, supporting negotiations based on principle of consensus
    • for emerging trade topics such as digital e-commerce rules about which not all members can reach an agreement in the short-term, suggesting the form of a joint statement initiative to allow the exploration of specific rules and best practices

context: In the face of increasing sanctions imposed by the US, China also elevated its counter-sanctions from administrative enforcement measures to the legal level. Related companies may have to choose their political positions in the future. The lifting of US bans on WeChat and TIKTOK seems to have initially shown this law is effective.

13th NPC (National People's Congress) Standing Committee passed Anti-foreign Sanctions Law at its 29th session on 10 Jun 2021. It specifies

• circumstances of taking countermeasures
  • adopting discriminatory restrictive measures against Chinese citizens and organisations
  • interference in China's internal affairs
• targets to whom countermeasures apply
  • compiling countermeasure lists: individuals and organisations directly or indirectly involved in formulating, deciding and implementing discriminatory restrictive measures
  • other individuals and organisations implicated
• countermeasures
  • four types of countermeasures
    • entry and exit restrictions
    • restrictions on property in China
    • restrictions on transactions and cooperation
    • others
  • relevant departments of State Council
    • making countermeasure decisions (final)
    • can suspend, change or cancel relevant countermeasures
• countermeasures working mechanism
  • setting up a coordination mechanism for anti-foreign sanctions
• obligations of relevant organisations and individuals
  • individuals and organisations within China should implement countermeasures
  • forbidding individuals and organisations to implement or assist in implementing discriminatory restrictions on China
  • other legal documents may provide for other necessary countermeasures

The new law is largely aimed at long-arm jurisdiction and illegal sanctions imposed by the US on China, Tian Feilong 田飞龙 Beijing University of Aeronautics and Astronautics School of Law associate professor told Global Times. Tian believes that Hong Kong should consider including this law as Annex III in the Hong Kong Basic Law.

The main purpose of this law is to authorise administrative law enforcement agencies and judicial institutions to initiate sanctions and counter-sanctions, which means that a specific legal system will be developed in the future, Huo Zhengxin 霍政欣 China University of Political Science and Law professor said.