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1. China should improve its current legislation, reform its trade regime and adjust its trade policies. After more than twenty years of practice and exploration, China has established a trade regime and formulated a set of laws and regulations that basically conform to the WTO rules and Chinese situations, but there is still much to improve. At present, China should improve its rules on tax refund and foreign exchange regulation system so as to reduce the economic dependency ratio on foreign trade, change its export-oriented economic growth strategy to a comprehensive mode based on combining capital, investment and export, strengthen regulation on the export of enterprises and improve the quality of economic growth.
2. China should create a mechanism to increase the sensitivity of enterprises to PSSMs and encourage them to respond positively and actively. Under the old trade regime before 2004, exporting enterprises in China included production enterprises having the right to foreign trade, specialized foreign trade companies and foreign trade agencies.In many cases involving antidumping, countervailing and safeguards against Chinese products, conflicts of interests between production enterprises, foreign trade agencies and foreign trade agencies and foreign trade companies often led to lack of cooperation and harmonization, resulting in negligence or inactiveness in dealing with PSSMs so that unfavorable measures were imposed upon Chinese products, which in turn induced many more WTO members to apply trade remedial measures to Chinese products. Up till now, few cases of PSSMs have been successful in reaching their aims, yet it is early to say that no more such PSSMs will occur. China should create a mechanism to motivate and encourage enterprises within its territory to tackle the issue of PSSMs on the principle that “whoever responds to the PSSMs will benefit and whoever neglects or refuses to act positively will be punished”.
3. China should enhance its economic ties with the world and intensify its efforts to speed up the establishment of regional economic cooperation with its neighboring countries. The refusal of the western countries headed by the United States to acknowledge China as a market economy has worsened the global context for the Chinese foreign trade. Consequently more antidumping cases occurred against China after its accession to the WTO. Some WTO members are now making or modifying foreign trade laws on the basis of Article XVI of the Accession Protocol in an effort to legitimatize the adoption of PSSMs against products originating in China by means of domestic legislation. It is urgently indispensable for China to tighten its economic relation and cooperation with the neighboring countries and speed up negotiations for the establishment of customs unions and free trade areas. On the other hand, China should also seek more support from developing countries and those long in good relation and cooperation with it in recognizing China’s market economy status so that cases of PSSMs investigations could decline.
4. China should make optimal use of the WTO dispute settlement mechanism and conduct consultations with relevant countries for better resolutions to trade disputes. Where there are interests, there are conflicts. It is also true of international trade. When a WTO member decides to initiate investigations for PSSMs, China should make no efforts to escape. Instead, it is more advisable for China to exploit the consultation mechanism to settle the trade disputes in the bud and, where necessary, resort to the dispute settlement mechanism shaped by the WTO. Negligence or inactiveness will only result in more serious injury to its trade interests.
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