Introduction

The focus of this chapter is on China's WTO obligations with regard to the activities of its sub-national entities. In particular, the chapter examines whether the WTO Agreement requires China to remove inconsistent sub-national measures, or whether China's obligation stops at taking available ‘reasonable measures’ to ensure compliance. If the latter is correct, the chapter provides an opinion as to what would constitute ‘reasonable measures’.

China's sub-national entities – why are they relevant?

In the process of acceding to the WTO, and in its economic reforms until this point, China has undergone a significant liberalization process. However, given the scale of the change taking place, it may be that not all parts of China reach the end-goal at the same time.

Clearly, the Chinese central government will seek to implement China's WTO obligations in a uniform manner across the nation, and intends to fulfil its obligations in good faith. This chapter does not question China's commitment to act in good faith. Rather, it seeks precisely to define China's obligations with regard to sub-national entities, and what the legal consequences of not being able to meet these obligations would be, from a WTO perspective.

A constitutional construction

According to the Constitution of the People's Republic of China, China is a ‘unitary, multinational’ state. Article 30 notes that the administrative division of China consists of provinces, autonomous regions and municipalities directly under the central government.

Article 2 of the Constitution provides for both the National People's Congress and local people's congresses.