Chinese Law Prof Blog

WTO issues panel report finding against China in auto parts dispute

A few months ago I blogged about the WTO panel's finding against China in the auto parts dispute. The panel report has now been made public. In the "Continuation" section of this post, I'll copy parts of the USTR statement and the Xinhua report describing what the dispute was about.

Here are some relevant documents (HT: Bill Abnett):

• USTR press release (July 18, 2008)
• Xinhua News Agency report (July 18, 2008)
• Panel report (from WTO Web site, in MS Word and PDF)
• Various news reports
• China Daily op-ed (July 22, 2008)
• AP report on China's plan to appeal (July 22, 2008)

From the USTR's press release:

Increasing access to China's auto market was a key issue in China's accession to
the WTO. China imposes an additional charge on imported auto parts whenever the
imported parts are incorporated into a final assembled vehicle that fails to
meet certain local content requirements. The WTO panel agreed with the United
States that these higher charges unfairly discriminate against the use of
imported parts in the assembly process and discourage automobile manufacturers
in China from using imported auto parts in the assembly of vehicles. They also
put pressure on foreign auto parts producers to relocate manufacturing
facilities to China.

In particular, all vehicle manufacturers in China that use imported parts must
register with China's Customs Administration and provide specific information
about each vehicle they assemble, including a list of the imported and domestic
parts to be used, and the value and supplier of each part. If the number or
value of imported parts in the assembled vehicle exceeds specified thresholds,
the Chinese authorities assess a 25 percent tax on each of the imported parts.

The United States argued, and the WTO panel agreed, that these regulations
impose an internal charge on U.S. auto parts resulting in discrimination against
U.S. auto parts, in violation of WTO rules. The panel found that China is acting
inconsistently with several WTO provisions, including Articles III:2 and III:4
of the General Agreement on Tariffs and Trade 1994 and specific commitments made
by China in its WTO accession agreement.

The United States requested formal WTO consultations with China on March 30,
2006. The WTO established the dispute settlement panel on October 26, 2006, the
first such panel against China. China has the opportunity to appeal today's
report.

From the Xinhua report:

[The panel's verdict] largely upheld U.S., EU, and Canadian complaints that Chinese tax measures on imported auto parts violated WTO rules.

China considers auto parts as a complete vehicle if they account for 60 percent
or more of the value of a final vehicle and charges a higher tariff on them.

Chinese trade officials said the measure is meant to keep "lawbreakers" from
exploiting the differences between tariff rates for importing entire automobiles
and auto parts, and to protect consumer interests.

However, the three complainants argue that the Chinese tax measure deters
auto-makers from using imported parts to build cars in the country, which costs
jobs abroad.

This is the first time that the WTO has ruled against China in a trade dispute.

China still has the right to appeal.

Teng Biao in the Financial Times

Here's a mini-profile of Teng Biao (腾彪) in the July 23rd issue of the Financial Times. Check out in particular the embedded video in which Teng talks about his work. I have met Teng on several occasions; this soft-spoken man is truly admirable. I would be proud to have half his courage.

When people like Teng stick their necks out, what values are they sticking them out for? This, I guess, is my disagreement with those who insist that it's Eurocentric or narrow-minded or whatever to support the standard menu of human rights in China, and that "the Chinese" must find their own way, perhaps on some kind of Confucian foundation. When you get right down to it, the proponents of various schemes of managed democracy, popular consultation, corporatist assemblies, etc. do not risk their livelihoods and their personal safety to promote their views in China; people like Teng Biao do. He is as Chinese as all the others, and what he does is a legitimate part of China finding its own way. If he is willing to take these risks to support the standard menu of human rights, should the rest of us be too paralyzed by the fear of being accused of unthinkingly subscribing to the assumptions of some hegemonic ideology to support him? (Rhetorical question!)

Earthquake parents pressed to sign document promising silence

There's a story in the July 24th New York Times about parents of children killed in collapsed schools being pressed by officials to sign a document in which they request aid, praise the care of the Party and government, and promise not to make trouble. The amount of money is not mentioned in the document, but is apparently about $8800 in cash and a "per-parent pension" (annual? for life?) of about $5600.

Click here for a copy of the document the parents are asked to sign; sorry I don't have time to offer a translation.

Notes on pre-Olympics administrative licensing procedures

No realm is immune, it seems, from the tide of arbitrary government action that is preceding the Olympics. (Yes, I know you can't really be "immune" from a "tide", but I'm writing this in a hurry.) The following comments are from a music scene insider involved in a club on the east side of Beijing:

For those following the "No fun Olympics" story, clubs which have stopped performances, following the sudden new requirement that they must get performance licenses to have shows, have been given more bad news.  The Culture Ministry is responsible for giving the licenses, but they say they will not give a license to any club until it gets an approval from the Sanitation Department.  The Sanitation Department, however, refuses to give approval. 

One of my friends who works in the Beijing government called up a contact in the Sanitation Department for an explanation, and she was told that the Culture Ministry instructed the Sanitation Department not to give approvals to any club.  According to another club owner we spoke to, the Culture Ministry does not want to be accused of preventing "culture", so they have used this rather clumsy administrative head fake to hide their actions.

Some clubs have licenses from earlier times (large ones were all required to get them).  Most smaller clubs don't have them.  Some have decided to go ahead and hold shows anyway, while others, especially those run by foreigners, are more cautious.   

More on RMB problems and the foreign investment approval process

A short while ago I reported an interesting story about a foreign investment deal that ran into problems because the approval authorities thought the foreign acquirers were paying too much. It's not just a one-off or local problem, apparently. Here's a Dow Jones report about the same kind of thing going on in Shenzhen and Guangzhou. The first four paragraphs are below; please click on the link for the rest. Don't forget, you read it here first!

After years of cross-border mergers being delayed by authorities wary of foreign firms snapping up Chinese assets too cheaply, Beijing's preoccupation with hot money may be swinging the pendulum the other way.

Now some foreign investors are being told by China's currency regulator that they're paying too much for Chinese companies.

A spike in inward foreign direct investment this year - up 46% on year in the first half, compared with a 14% rise for all of 2007 - suggests potentially volatile speculative funds are flooding into China in the form of artificially high price tags on corporate investments.

That has prompted the State Administration of Foreign Exchange in recent months to question a number of deals where the agreed purchase price was higher than the value of the assets indicated by an independent appraisal.

Unlawful execution procedures yet again

Because public executions so clearly violate Art. 212 of the Criminal Procedure Law, many people have questioned the facts as reported in the Washington Post story of July 19th (blogged about earlier here and here). This is understandable. At this point, however, on the basis of various things I've seen, my judgment is that the story is more likely accurate than not, and that an execution that was in substance public did indeed take place. Reports of this kind of thing in the post-Mao era are, I think, relatively rare - certainly I don't recall seeing any before. (This is different from saying their occurrence is rare.) But a colleague has sent me a link to a Chinese news report from 2006 that describes a public execution:

"9点50分，石悦军被押着从宣判现场出发前往执行现场，在执行死刑的现场的警戒线两旁，百姓把周围的可以观看的位置都站满了。" (At 9:50, Shi Yuejun was taken from the site where the sentence was pronounced [DC: probably some kind of sentencing rally] to the execution ground. Outside the police line at the execution ground, the common people (baixing) occupied every place available for watching [the execution].)

If this isn't "示众" ("displaying to the public", as prohibited by Art. 212), I don't know what is.

Unlawful execution procedures in Xinjiang - follow-up

There has been considerable discussion - in this blog's comments section, on Chinalaw, on the Washington Post's web site, and elsewhere - on the accuracy of a report in the July 19th Washington Post about three executions being carried out in front of an audience of thousands in Xinjiang. I blogged about it here. Instead of adding yet another update, I thought a new blog post was in order.

I contacted the author of the WP article, Edward Cody, to ask him about his sources. His response, which I post with his permission, is below. In brief, four witnesses told him in separate interviews that they had actually seen the executions. This does not unassailably establish the proposition that they really did see them, but it seems at least to establish that Cody was very careful in reporting what he did and cannot fairly be accused of sloppiness.

Here's his response (very, very slightly edited since he wrote in haste):

"I talked with four people in Yingishahar, in separate interviews, who said they saw the executions. As far as I know, they did not belong to any group or otherwise have an agenda, other than being Uighurs. I made something of a point of asking them whether they saw the executions because I, too, had seen the RFA report and was departing from the premise that two people were executed. All four said No, three people were executed. When I asked whether they had seen it, they said yes. When I put my hand to my throat in a hanging gesture, one or two said No, the executions were carried out by rifle. I suppose there is always a possibility that my interviewees - all four - extrapolated having witnessed the public trial in the square with having witnessed what they knew came afterward, but that seems a stretch, particularly since I asked them specifically about seeing the executions."

Unlawful execution procedures in Xinjiang - back to the Cultural Revolution?

JULY 21st UPDATE:

Joseph Wang has a clarification that is too important to be left buried in the Comments section:

The Washington Post is very confused about what happened.  Here is the original story from Radio Free Asia.

http://www.rfa.org/english/news/uyghur/terror-07112008120250.html

As far as I can tell the sentencing was public but the execution was not, which is in accordance with Article 212 of the Criminal Procedure Law.

ORIGINAL POST BELOW:

The July 19th issue of the Washington Post carries a story that leads with three executions in Yengishahar, Xinjiang Province. I won't comment on the political issues involved, except to note that the executions occur in the context of an overall pre-Olympic security crackdown that has resulted in detentions, house arrests, and internal deportations - very often without any legal basis that I know of - for those considered "elements of instability" (不安定因素) such as activist lawyers and petitioners.

The interesting legal aspect of these executions is that they are reported to have been carried out in front of an audience of thousands. It is impossible to believe that the authorities in charge were not aware of Article 212 of the Criminal Procedure Law, which states clearly that executions shall not be carried out in public (the Chinese term, 示众, is more like "displayed to the masses"). One also doubts that the condemned were offered the chance for some last words, as is also required by Article 212. Thus, one can only conclude that when the law prohibited the authorities from doing what they wished to do, they simply didn't give a damn.

Here's the text of Art. 212:

第二百一十二条 人民法院在交付执行死刑前，应当通知同级人民检察院派员临场监督。
死刑采用枪决或者注射等方法执行。
死刑可以在刑场或者指定的羁押场所内执行。
指挥执行的审判人员，对罪犯应当验明正身，讯问有无遗言、信札，然后交付执行人员执行死刑。在执行前，如果发现可能有错误，应当暂停执行，报请最高人民法院裁定。
执行死刑应当公布，不应示众。
执行死刑后，在场书记员应当写成笔录。交付执行的人民法院应当将执行死刑情况报告最高人民法院。
执行死刑后，交付执行的人民法院应当通知罪犯家属。