BIZCHINA / Construction
WTO Commitments
Updated: 2006-04-18 11:29
Construction Industry's WTO Commitments
In the World Trade Organization (WTO) entry negotiations concerning the
construction industry, China presented itself as a developing country,
persisted in the basic principles of mutual benefits and a win-win
strategy, and promised to implement the commitments it will undertake as
a WTO member country as it aims to achieve the maximum protection in the
development of China's construction industry. As a result, China's
construction industry will open its doors to the outside world in a
progressive and limited way.
1. Commitments to prospects, design and consulting services
A. Limitations in market access
(1) Unbound for cross-border deliveries of plan designs, other types of
cross-border deliveries are required in cooperation with Chinese design
institutes;
(2) Only joint ventures (JV) with a foreign majority ownership are
permitted. Within the first five years of China's accession to the WTO,
only wholly foreign-owned enterprises will be permitted.
B. Limitations on national treatment:
Foreign service providers must be certified architects, engineers or
enterprises engaging in construction design, engineering and urban
planning in their resident countries.
2. Commitments to construction
A. Limitations in market access:
Sino-foreign JV enterprises with a foreign majority ownership are
permitted. Within the first three years of China's accession to the WTO,
wholly foreign-owned enterprises will be permitted. Wholly foreign-owned
enterprises can only undertake the following four types of construction
projects:
(1) Construction projects wholly financed by foreign investments and/or
grants.
(2) Construction projects financed by loans from international financial
institutions awarded through international tendering according to the
terms of the loans.
(3) Chinese-foreign jointly constructed projects with a foreign
investment equal to or more than 50 percent; and Chinese-foreign jointly
constructed projects with a foreign investment less than 50 percent but
technically difficult to be implemented by Chinese construction
enterprises alone.
(4) Chinese-invested construction projects difficult to implement by
Chinese construction enterprises alone can be jointly undertaken by
Chinese and foreign construction enterprises with approval from the
provincial government.
3. Commitments to national treatment:
There is little difference in requirements in registered capital between
the present Sino-foreign JV enterprises and Chinese enterprises.
The limitations will be abolished within three years of China's entry
into the WTO.
4. Commitments to related countries:
Apart from the above two-part commitments, commitments made in bilateral
talks upon joining the WTO with Japan are also adaptable to all WTO
member countries.
(1) According to the principle of national treatment, China will do its
best to lower the standard minimum amount of registered capital for
wholly foreign-owned construction enterprises and Sino-foreign JV and
cooperation construction enterprises.
(2) In the regulations (within three years of China's WTO membership),
China will put the contracting performance of the parent companies into
consideration when fixing the new qualification level for wholly
foreign-owned construction enterprises.
(3) China will retain the present regulations that stipulate foreign
construction enterprises can contract construction work without
establishing a business presence in China until the new regulations
allowing wholly foreign-owned construction enterprises in China come into
effect.
(4) China will publicize a notice before the deadline for the present
regulations. Even if the regulations are abolished, construction
contracts approved beforehand will be implemented.
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