Construction Industry
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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