Title: Emerging Rules on Cross-border Subsidies: A Typological Analysis and Proposals for China’s Approach

Authors: Ding Ru, Xiang Yiqian

Keywords: Labour standards, Fair trade, Trade and investment treaty

Abstract:A cross-border subsidy refers to a subsidy whose provider and receiver are located in the territories of different countries. In recent years, new rules on cross- border subsidies have been included in both the EU law and some regional trade agreements. The new cross-border subsidy rules are considered an attempt to counteract the effect of certain foreign investment activities, which will impact China’s foreign investment including that within the Belt and Road Initiative (BRI). Considering the cross-border subsidy rules’ distinctive characteristics and potential adverse impact on international trade and investment, this article aims to provide a typology of these new rules to facilitate analysis of whether they are consistent with the WTO rules. Moreover, this article argues that China should take a holistic approach to counteract the potential impact of these rules by utilizing the WTO dispute settlement mechanism, updating the investment agreements, and formulating domestic regulations.

Keywords: Cross-border Subsidy Rules, WTO, Belt and Road Initiative