D.卡尔顿 罗西
D. Carlton Rossi

Non-Market Economy


China's State-Owned Enterprises:
Nature, Performance and Reform


SHENG Hong and ZHAO Nong

This book provides a detailed description of state-owned enterprises (SOEs) in China with respect to both efficiency and income distribution. It demonstrates that state ownership in the form of SOEs does not use resources efficiently, holds a poor record in income distribution, and enjoys unfair advantages while competing with other firms. To illustrate this, the book presents data on how favored policies, monopolistic powers, and subsidies benefit SOEs.

Abstract: Chapter 1-9, Appendix


                                                                       MAO Yushi

Mao Yushi: China’s SOEs Are Termites,
Eating Away the Country’s Wealth

Mao Yushi

May 17, 2016

In China, we give less money to the people, so the consumption is relatively low. We give a lot to the government, so government investment is relatively high. High government investment has resulted in excess capacity.

China is now in an overcapacity situation that cannot be changed. We not only have overcapacity of cement and steel, but also excess electricity. Even though we have electricity, we are still investing in more power plants. We also have an excess of highways. This year I went on a trip to Hanzhong. I only saw 20 cars on the 200 km, two-hour trip. It is very expensive to build roads, tunnels, and bridges.



Mao Yushi: Environment, or GDP, we have to make the choice

MAO Yushi (currently under house arrest) is a well-known micro-economist who has held positions at Harvard University and the Beijing Institute of Economics. He graduated in 1950 from the faculty of engineering of Jiaotong University in Shanghai and has been chairman of the Unirule Institute of Economics since 1999.

Dialogue: Cities on Low Carbon Road Chinese video: 10 minutes 38 seconds

One thing that really matters is the price of energy. China's energy price is now low compared with energy prices in other countries. So people have no initiative to save energy, but to use energy regardless of the price. Some countries charge higher prices for residential electricity than in Beijing, and the same applies to car gasoline. The majority of other countries charge higher fees, except for Russia. Even in Hong Kong, energy prices are much expensive than on the mainland in Beijing.


            International Opposition to Dumping Practices of China

Rethinking China’s non-market economy status beyond 2016

Australian opposition to China's 'market economy status'


Most of the early recognitions of China’s market economy status were a precondition for the trade agreement with China. Among those countries, Australia is one of the frequent users of anti-dumping measures. Australia granted China a market economy status in 2005, in the course of the FTA negotiations, expecting that the benefits of an improved access to Chinese market would outweigh potential losses from reduced dumping duties. As a result, without adequate trade defence measures, Australia has been struggling with a surge of imported products from China.


Ambassador John McCallum has said that Canada will use the China-Australian free-trade agreement as a model for any negotiations. However, Australia's recognition in 2005 of China as a market economy was premature. Many Chinese products of state-owned firms have been dumped on the duped.

Canada is particularly concerned with dumping in areas of cellulose pulp and steel. In effect, export of wind turbines to Canada would be export of steel. Chinese steel turbines steal Canadian steel jobs.

It goes without saying that China will not enter into free-trade negotiations with any country without recognition of itself as a market economy. In other words, this is a deal breaker. Ambassador Lu Shaye has characterized China's state-owned companies as benign. "China's state-owned enterprises are not evil, but a baby-sitter who cares peoples' life." Chinese Liberal economists would disagree with that assessment and describe them as an impediment to market reform and the goal of a market economy. 

Canada is concentrating on more trade with China.  However, currently, it has a trade deficit with China. What makes the Canadian government  think that it can successfully negotiate a treaty that narrows the trade deficit rather than widens it. The emphasis should be placed on balanced or "fair-trade" with China rather than "free-trade".

D.卡尔顿 罗西 



                    Prime Minister John Howard (March 17, 2005)

Australian opposition to China's 'market economy status'

11.18 There was also strong opposition to the decision within Australia. Some expressed concern that the Howard government had played its trump card too early, given that the lure of MES could give Australia important leverage in FTA negotiations. The main opposition has come from manufacturing interests. The Australian Industry Group (AiG) campaigned strongly to ensure that domestic manufacturers were protected from Chinese dumping under an FTA. The Group's Chief Executive, Ms Heather Ridout, explained in March 2005 that AiG had had discussions with the Australian government to put arrangements in place that would protect Australian industry. This, in turn, will 'remove a major barrier to declaring China a market economy'.

11.19 The Australian Manufacturing Workers Union (AMWU) and the Australian Council of Trade Unions (ACTU) both made submissions to the committee which insisted that the proposed Australia–China FTA must protect Australian industry from dumping of Chinese imports. The ACTU's submission noted that the issue of dumping has featured prominently in the public debate on China's 'illegitimate cost advantages'. It expressed the ACTU's concern that an Australian FTA with China would significantly lessen the burden of proof for Chinese importers in anti-dumping cases. Mr Doug Cameron, the National Secretary of the AMWU, told the committee:

We are concerned about dumping. We do not believe that we should have given market economy status to China—there is absolutely no reason for that. The definition that the United States gives to the term 'market economy' should be at least the minimum position that we adopt in terms of market economy status.



                                            Greg Wood

Australian former High Commissioner - "Trade with China: Proceed with caution"

March 31, 2017

"It’s too early to say what, if anything, the FTA will deliver, trade-wise. Australian exports to China are actually down.  .  . . Beggaring belief, a Chinese firm with military connections was allowed to take over the management of our northernmost port of Darwin.  .  .  . If Canada is to draw one conclusion from Australia’s experience, it’s for political leaders to take the Canadian people with them, openly, in advance."

Bilateral trade had grown rapidly before Australia and China concluded a free-trade agreement (FTA). It’s negotiation was undertaken in great haste: the former Abbot government set itself a deadline and imprudently met it. The scope, complexity and intrusiveness of these so called “trade” agreements is becoming ever wider, their societal reach more profound. In Australia, what hasn’t kept up is the public (or parliamentary) consultation, and drawing out in advance the implications and likely consequences.

In crude terms, the deal in the FTA was that in return for limited improvements in our market access into China, Australia relaxed vetting of Chinese investment in Australia. That’s a sensitive trade-off.


Canadians are perturbed about rising house prices in major cities across the land. They perceive the proximal cause is foreign speculation. Today, it is reported that the number of homeless--particulary among native Canadians in Vancouver-- has incresed dramatically. In Toronto, if the the author recalls correctly there are 46,000 empty homes or should one say "ghost homes".

China's Unfinished Trade Revolution

December 09, 2016


On Sunday, a key provision contained in Article 15 of China's WTO accession protocols will expire. At issue is what countries must do to make the case that China is subsidizing exports as a way to undercut competition abroad. The provision stipulates that unless producers in China can "clearly show that market conditions prevail" in a given sector, WTO members importing Chinese goods from that sector can use a different methodology for assessing whether to impose anti-dumping measures.

But the very fact that Beijing and its WTO counterparts are still haggling over the meaning of Article 15 points to the incompleteness of that revolution. In all likelihood, the provision's vagueness on the matter of China's status reflects the fact that in 2001, neither China's leaders nor those of other WTO members imagined that come Sunday China would not be, clearly and for all to see, a market-driven economy.

The United States and Japan, driven both by domestic protectionism and a rising sense of strategic competition with China, have indicated that they do not yet regard China as a market economy and thus will not use market economy-based measures to judge China's dumping practices. It is unclear whether other major WTO players such as Canada, India and Mexico will follow suit.


The consequences of Justin Trudeau’s Chinese trade decision

Special to TVO.org

Sarah Reid and Linda van der Horst

March 09, 2016

“The issue has not come up in public debate because we have not come to a consensus on whether Canada should negotiate a free trade agreement with China,” says Yuen Pau Woo, distinguished East Asia fellow and former president of the Asia-Pacific Foundation. “If we do decide to proceed with free trade negotiations, the question of market economy status almost certainly will come up.”

“We know that China has overcapacity right now in its steel market and that it has been offloading some of that capacity at subsidized prices, and that obviously is a concern because we have domestic suppliers that would be hurt by those kind of practices,” Ferreira says. “That’s not something frankly that we would ever support. Everybody has to play by the rules.”

Galimberti says Canada should continue enforcing non-market economy provisions until China can demonstrate it is trading in accordance with WTO obligations.

Whether the Trudeau government will be willing to grant China market economy status as the price for a free trade deal is unclear. A spokesperson for Trade Minister Chrystia Freeland says: “Canada looks forward to taking a rigorous, step-by-step approach to enhancing our relationship with China, including engaging with Canadians on this issue.”