Characteristics of Subsidies Granted by China and Practical Challenges: Referring to the U.S.-China dispute

Author Name KAWASHIMA Fujio  (Nagoya University)
Creation Date/NO. June 2011 11-J-067
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The U.S.-China disputes on subsidies granted by China have become a serious matter. For example, the U.S. initiated a series of investigations on countervailing duties and also initiated a Trade Act 1979 Section 301 investigation on subsidies granted by China. Moreover, several WTO dispute settlement cases involving subsidies granted by China have been already initiated. First, this paper focuses on Chinese industrial policies in general and introduces their historical background, policy makers, and the characteristics of their policy tools. Through analyzing the disputes mentioned above, it also clarifies the characteristics of subsidies granted by China and points out what types of legal issues arise from the viewpoint of WTO law, especially the Agreement on Subsidies and Countervailing Measures. Finally, based on the findings above, it examines what types of challenges confront Japan at present and breaks them down into the following four practical aspects: How Japan should take advantage of the WTO Dispute Settlement Mechanism; how Japan should amend its domestic legal system regarding countervailing measures; how the WTO law should be amended; and how Japan should design both a Japan-China economic partnership agreement (EPA) and a bilateral investment agreement (BIA) in the future.