| Summary: | The dissertation discusses the application of “Agreement on Subsidy and Countervailing Measures (ASCM)” of WTO to non-market economies (NMEs). The difficulties of application of ASCM to NMEs mainly lie in two basic questions. The first is how to separate the subsidy and government involvement in a NME. The second is how perfect the market has to be in order to qualify as a benchmark to calculate subsidy margins. By focusing on WTO rules and substantial WTO cases, this dissertation analyzes the difficulties in application of ASCM to NMEs from seven perspectives in legal practice. They are: (1) whether subsidies in public utility enterprises in China are actionable, because such subsidies as upstream subsidies pass benefits to export-oriented enterprises? (2) whether subsidies may continue after privatisation of state-owned companies? (3) whether the loans provided by state-owned banks in China are subsidies? (4) whether it is fair to evaluate the subsidies margins of the land use rights in China by using out-of-country benchmark? (5) tax-incentive subsidies in China; (6) the calculation of a subsidy margin in NMEs; and (7) whether currency manipulation constitutes a subsidy? The dissertation finds that the difficulties of application of ASCM to NMEs are due to a number of reasons. First, the deficiencies of ASCM cannot explain the application of ASCM to NMEs; second, if applicable to NMEs, there are difficulties in defining a subsidy in NMEs and in calculating a subsidy margin in NMEs; third, the non-unification of assessment of a NME results in unfairness to China which faces different standards of evaluating a NME. Even though China has been a market economy in some countries’ view, it is difficult to be recognised as a market economy by all countries.
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