The Practice of Regulating the Activities of State Enterprises in the WTO (on the Example of China)

The problem of regulating the activities of state trading enterprises (STE) is extremely relevant in the World Trade Organization (WTO) due to both the "vagueness" of the definition of these enterprises and their legal status in different legal jurisdictions, and the ambiguity of multilateral regulatory rules and their interpretation when these enterprises participate in international trade. STE that have exclusive or special rights and privileges can affect the volume and direction of movement of goods in ways that may distort trade. In order to minimize possible trade imbalances generated by the STE, the WTO pays special attention to countries with transitional economies, such as China, where government intervention in trade has always been one of the main features of the functioning of the economy and remains a priority in some sectors to this day. One of the goals of this paper is to identify patterns in changes in the number and composition of STE notified by China and in product categories that these STE control. In addition, the paper assesses the impact of the application of counter-notification mechanism by the United States of America on the process of notifying Chinese new STE. The results of the study showed that China notifies the STE at a very slow pace, which is justified by the inefficiency of existing rules in the WTO regarding the notification process itself. China does not notify new STE either on its own initiative due to the lack of mechanisms for punishing non-notification, or at the request of third parties (in this case, the United States), citing that disclosure of information on requested new enterprises is a business secret and may not be provided, in accordance with paragraph 4 (d) of article XVII of the GATT.