Retail and Wholesale Sector's WTO Commitments

Limitations on market access for retailing services (excluding tobacco):
If the services are provided in the form of cross-border supply, there shall be no limitations except for mail order. If the services are provided in the form of consumption abroad, there shall be no limitations. If the services are provided in the form of commercial presence, foreign service suppliers may supply services only in forms of joint ventures in five Special Economic Zones (Shenzhen, Zhuhai, Shantou, Xiamen and Hainan) and six cities (Beijing, Shanghai, Tianjin, Guangzhou, Dalian and Qingdao).

In Beijing and Shanghai, a total of no more than four joint venture retailing enterprises are permitted respectively. In each of the other cities, no more than two joint venture retailing enterprises will be permitted. Two joint venture retailing enterprises among the four to be established in Beijing may set up their branches in the same city.

Upon China's accession to the WTO, Zhengzhou and Wuhan will be immediately open to joint venture retailing enterprises. Within two years after China's accession to the WTO, foreign majority control will be permitted in joint venture retailing.
Retailing of chemical fertilizers will be open within five years after the accession.

There shall be no limitations within three years after accession, except for: retailing of chemical fertilizers, within five years after accession; and those chain stores which sell products of different types and brands from multiple suppliers with more than 30 outlets. For such chain stores with more than 30 outlets, foreign majority ownership will not be permitted if those chain stores distribute any of the following products: motor vehicles (for a period of five years after accession at which time the equity limitation will have been eliminated), and products listed above and in Annex 2a of the Protocol of China's WTO Accession.

The foreign chain store operators will have the freedom of choice of any partner, legally established in China according to China's laws and regulations. If the services are provided in the form of presence of natural persons unbound, there shall be no commitments except as indicated in Horizontal Commitments and the contents of Horizontal Commitments are: there shall be no commitments except for measures concerning the entry and temporary stay of natural persons who fall into one of the following categories:

(a) Managers, executives and specialists defined as senior employees of a corporation of a WTO Member that has established a representative office, branch or subsidiary in the territory of the People's Republic of China, temporarily moving as intra-corporate transferees, shall be permitted entry for an initial stay of three years;

(b) Managers, executives and specialists defined as senior employees of a corporation of WTO Members, being engaged in the foreign invested enterprises in the territory of the People's Republic of China for conducting business, shall be granted a long-term stay permit as stipulated in the terms of contracts concerned or an initial stay of three years, whichever is shorter;

(c) Service salespersons---persons not based in the territory of the People's Republic of China and receiving no remuneration from a source located within China, and who are engaged in activities related to representing a service supplier for the purpose of negotiation for the sale of such services of that supplier where: such sales are not directly made to the general public and the salesperson is not engaged in supplying the service, entry for salespersons is limited to 90 days.

Limitations on national treatment:
If the services are provided in the form of cross-border supply, there shall be no limitations except for mail order. If the services are provided in the form of consumption abroad, there shall be no limitations. If the services are provided in the form of commercial presence, there shall also be no limitations. If the services are provided in the form of presence of natural persons unbound, there shall be no commitments except as indicated in Horizontal Commitments and its contents shall be the same as the above-mentioned commitments in the aspect of limitations on market access.

Additional commitments on wholesale services are:
foreign-invested enterprises may distribute their products manufactured in China, including those expected products as listed in the market access or sector or sub-sector column, and provide subordinate services as defined in Annex 2. Foreign service suppliers are permitted to provide full range of related subordinate services, including after sales services, as defined in Annex 2, for the products they distribute.

As for franchising and retail trade services away from a fixed location, in the aspect of limitations on market access:
If the services are provided in the form of cross-border supply, there shall be no limitations. If the services are provided in the form of consumption abroad, there shall also be no limitations. If the services are provided in the form of commercial presence, within three year after China's accession to the WTO, limitations shall be cancelled.

If the services are provided in the form of presence of natural persons unbound, there shall be no commitments except as indicated in Horizontal Commitments and the contents are the same as the above-mentioned commitments in the aspect of limitations on market access.

In the aspect of limitation on national treatment: if the services are provided in the form of cross-border supply, there shall be no limitations. If the services are provided in the form of consumption abroad, there shall be no limitations. If the services are provided in the form of commercial presence, within three year after China's accession to the WTO, limitations shall be cancelled.

If the services are provided in the form of presence of natural persons unbound, there shall be no commitments except as indicated in Horizontal Commitments and its contents shall be the same as the above-mentioned commitments in the aspect of limitations on market access. No further limitations on franchising and retail trade services away from a fixed location except the above-mentioned commitments.

Wholesale trade services are under distribution services in WTO's sector catalogue of service trade, and the distribution services are generally covered by sector or sub-sector No. CPC 61, 62, 63 and 8929. The wholesaling consist of the sale of goods/merchandise to retailers to industrial, commercial, institutional, or other professional business users, or to other wholesalers and related subordinated services. Commitments on wholesale services made at China's entry to WTO are as follows:

In the aspect of limitations on market access for wholesale services (exclusive of salt and tobacco):

if the services are provided in the form of cross-border supply, there shall be no limitations. If the services are provided in the form of consumption abroad, there shall also be no limitations. If the services are provided in the form of commercial presence, within one year after China's accession to the WTO, foreign service suppliers may establish joint ventures to engage in the commission agents' business and wholesale business of all imported and domestically produced products, except those products that immediately follow.

For these products, foreign service suppliers will be permitted to engage in the distribution of books, newspapers, magazines, pharmaceutical products, pesticides and mulching films within three years after China's accession, and to engage in the distribution of chemical fertilizers, processed oil and crude oil within five years after China's accession.

If the services are provided in the form of presence of natural persons unbound, there shall be no commitments except as indicated in Horizontal Commitments and the contents of Horizontal Commitments are: there shall be no commitments except for measures concerning the entry and temporary stay of natural persons who fall into one of the following categories:

(a) Managers, executives and specialists defined as senior employees of a corporation of a WTO Member that has established a representative office, branch or subsidiary in the territory of the People's Republic of China, temporarily moving as intra-corporate transferees, shall be permitted entry for an initial stay of three years;

(b) Managers, executives and specialists defined as senior employees of a corporation of WTO Members, being engaged in the foreign invested enterprises in the territory of the People's Republic of China for conducting business, shall be granted a long-term stay permit as stipulated in the terms of contracts concerned or an initial stay of three years, whichever is shorter;

(c) Service salespersons---persons not based in the territory of the People's Republic of China and receiving no remuneration from a source located within China, and who are engaged in activities related to representing a service supplier for the purpose of negotiation for the sale of such services of that supplier where: (a) such sales are not directly made to the general public and (b) the salesperson is not engaged in supplying the service, entry for salespersons is limited to 90 days.

In the aspect of limitation on national treatment: if the services are provided in the form of cross-border supply, there shall be no limitations. If the services are provided in the form of consumption abroad, there shall be no limitations. If the services are provided in the form of commercial presence, there shall also be no limitations. If the services are provided in the form of presence of natural persons unbound, there shall be no commitments except as indicated in Horizontal Commitments and its contents shall be the same as the above-mentioned commitments in the aspect of limitations on market access.

Additional commitments on wholesale services are: foreign-invested enterprises are permitted to act as agents for the commissions of their products produced in China, including those except products as listed in the market access or sector or sub-sector column, and provide subordinate services as defined in Annex 2. Foreign service suppliers are permitted to provide full range of related subordinate services, including after sales services, as defined in Annex 2, for the products they distribute.

As for wholesale services away from a fixed location, in the aspect of limitations on market access: if the services are provided in the form of cross-border supply, there shall be no limitations. If the services are provided in the form of consumption abroad, there shall also be no limitations. If the services are provided in the form of commercial presence, within three year after China's accession to the WTO, limitations shall be cancelled. If the services are provided in the form of presence of natural persons unbound, there shall be no commitments except as indicated in Horizontal Commitments and the contents are the same as the above-mentioned commitments in the aspect of limitations on market access.

In the aspect of limitation on national treatment: if the services are provided in the form of cross-border supply, there shall be no limitations. If the services are provided in the form of consumption abroad, there shall be no limitations. If the services are provided in the form of commercial presence, within three year after China's accession to the WTO, limitations shall be cancelled. If the services are provided in the form of presence of natural persons unbound, there shall be no commitments except as indicated in Horizontal Commitments and its contents shall be the same as the above-mentioned commitments in the aspect of limitations on market access.

No further limitations on wholesale services away from a fixed location except the above-mentioned commitments.