Study On The Regulation Of Subsidies To State-Owned Enterprises Under The Non-Commercial Assistance Provisions Of CPTPP

The Comprehensive and Progressive Trans-Pacific Partnership("CPTPP")is the first international multilateral agreement to separate state-owned enterprises("SOEs")into separate chapters,specifically creating a non-commercial assistance clause to regulate SOE subsidies.Since China has submitted its application to join the CPTPP,the issue of non-commercial assistance provisions regulating subsidies to SOEs has become an unavoidable issue in international agreements.The non-commercial assistance clause is based on the theory of "competitive neutrality",but goes beyond the spirit of "competitive neutrality",seemingly aiming to prevent SOE subsidies from disrupting the level playing field,but in essence with the implicit purpose of reducing the competitive advantage of Chinese SOEs.The purpose of this provision is to reduce the competitive advantage of Chinese SOEs.A closer look at the constituent elements and scope of application of the non-commercial assistance clause reveals that it inherits and develops the traditional subsidy agreement under the WTO framework,namely the Agreement on Subsidies and Countervailing Measures(hereinafter referred to as the SCM Agreement).The non-commercial assistance clause reshapes the ambiguities of the SCM Agreement,expands the area of trade in goods adjusted by the SCM Agreement to the area of trade in services and international investment,greatly lowers the threshold for the determination of subsidies for state-owned enterprises,and provides all-round,high-standard and demanding regulation of subsidies for state-owned enterprises.China should take advantage of the negotiation opportunity of joining CPTPP to push back the reform of SOEs,promote the proper status of SOEs,and use the international standard of SOE subsidy regulation to promote the standardization and rule of law of China’s SOE subsidy system.This paper is divided into four parts,based on clarifying the realistic background and theoretical origin of the non-commercial assistance clause,studying in depth the main contents of the non-commercial assistance clause,analyzing its own shortcomings,ambiguities and realistic impacts on Chinese SOEs,and proposing countermeasures for dealing with the non-commercial assistance clause in the context of Chinese SOEs’ own development.The first part is to sort out the real background and theoretical origin of the non-commercial assistance clause.First,the increasingly frequent international competition activities of SOEs and the unreasonable way of SOE subsidies and the lack of uniform international regulation of SOE subsidies have prompted developed economies to seek effective regulation of SOE subsidies through non-commercial assistance clauses.This part examines the application of competition neutrality in the international rules on SOE subsidies from three perspectives:Australian,American and EU,and attempts to summarize the evolution and unique features of non-commercial assistance provisions.The second part analyzes in detail the main contents of the CPTPP non-commercial assistance provisions and discusses the treatment of controversial issues of SCM agreements by non-commercial assistance provisions in comparison.The definition of non-commercial assistance,the determination of "adverse impact" and the determination of "injury" are specifically analyzed and compared with the SCM Agreement,which leads to the treatment of three ambiguities in the SCM Agreement by the non-commercial assistance provisions: bypassing the determination of public agencies The non-commercial assistance clause has substantially expanded the scope of SOEs that fall under the regulation of the non-commercial assistance clause;simplified the process of determining benefits,thereby increasing the discretion of relevant agencies to apply external benchmarks;omitted the steps of determining subsidy specificity,thereby lowering the threshold for determining the specificity of SOEs’ subsidies;although the non-commercial assistance clause has reshaped and changed the SCM Agreement,it is still,in a sense,WTO-compliant.WTO compliance.The third part explores the shortcomings and ambiguities of the NCA,including the lack of identification of key terms,the lack of coordination with the application of the SCM Agreement,and the deviation from competition neutrality,and discusses the challenges posed by the NCA to China,such as promoting the reshaping of WTO rules to the disadvantage of developing countries,restricting the overseas investment of Chinese SOEs,and inhibiting normal business activities.In the fourth part,in the context of China’s proposed accession to the CPTPP in the new era,suggestions are made for China’s response strategies from both international and domestic perspectives,seeking to promote the reform of China’s SOEs in accordance with market rules,so that China’s SOE subsidies will gradually become standardized and transparent.