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please illustrate Non tariff barrier in China with regards to FTA with Canada with some real life evidences. For reference: like SOE influence, ambiguous regulation

please illustrate Non tariff barrier in China with regards to FTA with Canada with some real life evidences.

For reference:

  1. like SOE influence, ambiguous regulation at different levels - Central, Province, Municipality, Subsidy for exports
  • China does not have a true federal system; its provinces and municipalities are still subordinate to the central government. But the governments often operate with de facto autonomy at the sub-national level, and are sometimes poorly supervised by Beijing. The sheer size and complexity of the Chinese governmental and economic system is such that both provinces and municipalities can pursue policies that do not always align with the central government's directives. This creates risks that, regardless of the provisions of a CCFTA, in practice subordinate Chinese governments may either simply disregard those provisions, or may require regular policing and intervention by Canada under a CCFTA. (Toward a Canada-China FTA)
  • Although WTO membership has led to improvements and more openness in China's commercial system, it still lacks transparency and consistency. Corruption and business practices that favour local companies (in violation of WTO rules) remain major concerns. (Calvert, 2019)
  • SOEs are seen by some as solely arms of the state, advancing the agenda of the government of China. The distinction between China's state and private sector has started to blue under Xi regime. (Calvert, 2019)

  • China excluded rapeseed and vegetable oil from China Australia Free Trade Agreement (ChAFTA), also excluded sugar, rice, cotton, and wheat by designating them under "significantly sensitive staples" (Sun (2015), as cited in Leblond, 2017). Similarly, China is likely exclude canola seed, other major agriculture exports from CCFTA (Leblond, 2017).
  • Wood and paper products were kept out of ChAFTA. If the same happens in CCFTA, Canada will loose on the huge potential for exports (Leblond, 2017).
  • China is heavily subsidising the pulp and paper production industry and it grew three folds during 2002-2009 (Leblond, 2017).
  • Chinese companies are growing very fast and developing huge internal economies of scale in manufacturing industry due to the continuous government support. It will be very difficult for Canadian companies to compete with free market access (Leblond, 2017).
  • China provides incentives to domestic companies by way of govt. procurement, subsidies, cheap financing, artificially low cost of raw material, energy, component, and land, support in R&D and technology acquisition, import barrier, and restriction on foreign investment in specific sectors (Leblond, 2017).
  • The subsidies resulted into overcapacity in various sectors including steel, aluminium, cement, refining, flat glass, paper and paperboard, which was mentioned in the report of European Union Chamber of Commerce in China (Leblond, 2017).
  • China's latest industrial policy "Made in China 2025" delineates significant government support to almost all advance manufacturing sectors and the IT sector. The strategy was termed as import substitution plan by European Union Chamber of Commerce in China. It also paved the way for Chinese companies to penetrate international market with high-tech products (Leblond, 2017).
  • Low level of data security, intensive collection digital data by Govt., exclusion from local subsidy and blocking of information technology market make it extremely difficult for foreign companies to compete in china (Leblond, 2017).
  • Major obstacles identified by Canadian business in doing business in China are lengthy and complicated certification; local content requirements; custom procedures; labelling requirements; limitations to market access due to national security concerns; IP rules and practices; technical barriers to trade; restrictions for entities in China to make offshore payments; inconsistent interpretation of regulations and laws and lack of transparency; and labour law and practices (Kutulakos et al. 2017, as cited in Leblond, 2017)

Sun (2015, as cited in Leblond, 2017) mentions that "Chinese NTMs in conjunction with broader, more systematic or institutional constraints, can be more consequential and costly than tariffs alone."

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