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- ICI Comment Letters
U.S. and China Sign Bilateral Trade Agreement
Washington, DC, December 3, 1999 - On November 15, 1999, the United States and China entered into a bilateral agreement for China’s accession into the World Trade Organization (WTO). Among other things, the agreement outlines the terms under which foreign firms will be allowed to enter China’s asset management market.
In the bilateral agreement, China made significant commitments in specific sectors of its economy as well as commitments across all sectors. For asset management, China made commitments to provide significantly greater access to its asset management market than currently available. Specifically, under the agreement, U.S. firms may own up to 33% of joint venture asset management firms upon accession of China into the WTO. Three years after accession, U.S. firms may own 49% of asset management firms. Moreover, China has committed that, as domestic managers are permitted to provide broader array of services, it will allow foreign managers to provide the same services as domestic managers.
For China to become a full member of the WTO, China must enter into separate bilateral agreements with other key trading partners, including the European Union. All the member nations of the WTO must agree to China’s accession, and China must complete its domestic procedures for accession. As part of the WTO agreement, the U.S. Congress will be asked next year to grant China permanent Most Favored Nation (MFN) or Normal Trade Relations (NTR) treatment.