January 2000 PulseOnline: Headline News: Landmark China WTO Package Reached (Page 6 of 6)

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State-Owned and State-Invested Enterprises - The protocol addresses important issues related to the Chinese government's involvement in the economy. China has agreed to ensure that state-owned and state-invested enterprises will make purchases and sales based solely on commercial considerations, such as price, quality, availability and marketability, and provide U.S. companies with the opportunity to compete for sales and purchases on non-discriminatory terms and conditions.

China also agreed that it will not influence these commercial decisions (either directly or indirectly) except in a WTO-consistent manner. With respect to applying WTO rules to state-owned and state-invested enterprises, the United States clarified, in several ways, how these firms are subject to WTO disciplines. For example,

Purchases of goods or services by these state-owned and state-invested enterprises are not government procurement and thus are subject to WTO rules.
The United States clarified the status of state-owned and state-invested enterprises under the WTO Agreement on Subsidies and Countervailing Measures. This will help ensure the United States can effectively apply its trade law to these enterprises when it is appropriate to do so.

Grandfathering - China will grandfather all market access and activities in all service sectors. This will protect existing U.S. distribution service, financial service, professional and other service providers in China, including those operating under contractual or shareholder agreements or a license, from restrictions as Chinese commitments phase in. This covers all sectors, including telecom.

For more information on the Chinese telecom market or the details of the WTO agreement, contact Christine Keck at (202) 383-1482 or email ckeck@tia.eia.org.