WORLD TRADE
ORGANIZATIONG/ADP/Q1/CHN/34
G/SCM/Q1/CHN/34
27 October 2003
(03-5714)
Committee on Anti-Dumping Practices
Committee on Subsidies and Countervailing MeasuresOriginal:  English
NOTIFICATIONS OF LAWS AND REGULATIONS UNDER
ARTICLE 18.5 AND ARTICLE 32.6 OF THE AGREEMENTS
Replies to Questions posed by the UNITED STATES1
Regarding the Notification of CHINA2
The following communication, dated 27 October 2003, has been received from the Permanent
Mission of the People's Republic of China.
_______________
Q1. Article 3 of the Rules  states that countervailing duty (“CVD”) investigations of injury
involving agricultural products shall be conducted by the State Economic and Trade
Commission (“SETC”) in conjunction with the Ministry of Agriculture.3  Could China please
clarify the role of the Ministry of Agriculture in a CVD investigation?
Reply
The Ministry of Agriculture of the People’s Republic of China is in charge of the agricultural
affairs and plays the role of assisting the Ministry of Commerce in a CVD investigation.
Q2.  Article 5 of the Rules defines “material in jury” as “injury that has been caused to a
domestic industry and is not negligible”.  For purposes of this definition, does the concept of“negligible” injury refer to the concept of negl igible import volume addressed by Article 16 of
the Rules?  If not, could China explain its understanding of the concept of “negligible” injury?
Reply
The meaning of the “injury that has been caused to a domestic industry and is not negligible”
has been elaborated in Article 6 of the Rules.
Q3. Article 15.7 of the Agreement on Subsidies and Countervailing Measures (the “ASCM”)
defines the analysis for threat of material injury and states that “no one of these factors by itself
can necessarily give decisive guidance, but the to tality of the factors considered must lead to the
conclusion that further subsidized exports are imminent and that, unless protective action is
taken, material injury would occur”.  ASCM Article 15.7 also states that “the change in
                                                     
1 G/ADP/Q1/CHN/27-G/SCM/Q1/CHN/27
2 G/SCM/N/1/CHN/1/Suppl.2  (14 April 2003)
3 The United States is aware of reports that, since the time these regulations were notified, the injury
function has been transferred to the Ministry of Commerce.  However, we have continued to refer to the SETC
throughout these questions for consistency with the notified regulations.G/ADP/Q1/CHN/34
G/SCM/Q1/CHN/34
Page 2
circumstances which would create a situation in which the subsidy would cause injury must be
clearly foreseen and imminent”. Article 7 of the Rules does not contain language implementing
these provisions of ASCM Article 15.7.  How does China intend to comply with these
provisions?
Reply
Article 7 of the Rules states the factors to be considered in the analysis of threat of material
injury to the domestic industry. The investigating authority will refer to the relative rules of the WTO
agreements in the determination of the threat of injury to industry.
Q4. Are the factors that SETC examines in as certaining impact for threat analysis under
Article 7.6 of the Rules the same as the ones SETC examines for analysis of material injury
under Article 6.4 of the Rules?  If not, how does the examination of impact for threat analysis
differ from that for analysis of material injury?
Reply
Article 6.7 of the Rules refers to the relative economic data and index of the domestic
industry that the investigating authority should cons ider when determining whether the material injury
to the domestic industry has been caused by subsidy, which will also be used in the analysis of threatof material injury to the domestic industry.
Q5. Article 8 of the Rules details the factors to be examined in the determination of material
retardation of the establishment of a domestic industry.  Will these factors be considered in
relation to one another or is any single factor considered to be determinative?
Reply
Article 8 of the Rules states the factors to be examined in determining whether the material
retardation of the domestic industry has been established, which will be taken into full consideration
in the investigation and determination of the investigating authority.
Q6.  Article 11 of the Rules refers to factors which may be examined in the determination of
like product and specifically mentions “comments from consumers and producers...”.  Does
China intend to permit other interested partie s to comment on this issue?  How will such
comments be solicited?
Reply
Article 11 of the Rules refers to factors that may be examined in the determination of like
product, of which the comments from consumers and producers are only one aspect and will be
referred to by the investigating authority.
Q7. The first sentence of Article 13 of the Rules states that “In the determination of injury to
[the] domestic industry, SETC may exclude the product under investigation or part thereof that
did not cause injury to the domestic industry”.  The meaning of this provision, which does not
appear to implement any portion of the ASCM, is unclear.  Could China provide an example ofa factual situation in which SETC would apply th is provision?  How can SETC determine that a
portion of the product under investigation did not cause injury before it has concluded its
investigation of injury?G/ADP/Q1/CHN/34
G/SCM/Q1/CHN/34
Page 3
Reply
What is stated in Article 13 of the Rules is th at the investigating authority, after careful and
objective investigation and analysis, may exclude the products under investigation or part thereof thatdo not cause injury to the domestic industry.
Q8. Can China please explain how it defines “neg ligible” as used in Articles 5 and 16 of the
Rules?  In determining whether imports are negligible in a CVD investigation, how will the
Chinese authorities address th e special requirements applicable to import volumes from
developing countries consistent with ASCM 27.10?
Reply
The word “non-negligible” refers to the material injury which is different from threat of
material injury and material retardation.
Q9. Article 18 of the Rules states that SETC shal l take account of public interest in making a
determination of injury to the domestic industry.
(a) Will interested parties have an opportuni ty to present eviden ce in this respect?
(b) Will interested parties be allowed to view the information submitted by users
and consumers of the subsidized imports, or adequate non-confidential
summaries thereof?
Reply
Article 18 of the Rules states that the investigating authority shall take account of public
interest in making an investigation of injury to the domestic industry and provide the users and
consumers of the subsidized imports with the opportunity of presenting views and evidence.
Q10. Article 19 of the Rules states that the period  of investigation for injury is normally the
three years immediately prior to the initiation of the investigation.  Under what circumstances
would China use a different period?
Reply
Basically, China would use a different period of investigation under the following 4
circumstances:  1. Operation of dom estic industry applicant is shorter than 3 years;  2. In the view of
China’s investigating authorities, 3 years is not enough for domestic industry applicant to carry out
investigation;  3. Necessary readjustments are made in consideration of fiscal year or accounting
needs, which do not affect the final conclusion;  4. Other circumstances as regulated by Chinese Law.
Q11. According to ASCM Article 11.3 “[t]he authorities shall review the accuracy and
adequacy of the evidence prov ided in the application to de termine whether the evidence is
sufficient to justify the initiation of an investi gation”.  Article 20 of the Rules does not contain
any reference to “the accuracy and adequacy of  the evidence”.  How will China ensure that its
authorities examine the accuracy and adequa cy of the evidence, as required by ASCM
Article 11.3?G/ADP/Q1/CHN/34
G/SCM/Q1/CHN/34
Page 4
Reply
China’s investigating authorities have the capability to ensure the examination of the accuracy
and adequacy of the evidence before initiation of an investigation, which have also been proved inpractice.  Not only do we request the applicant to provide all evidence as regulated by law, but also
request these evidence should be from either official statistics, officially authorized sector statistics or
lawful publications and lawful state bills.
Q12. Article 21 of the Rules describes the information that must be included in the
application for initiation of a countervailing du ty investigation.  Although this Article lists
information required on injury, considerations for cumulative assessment, and other factors
that caused injury to the domestic industry, it does not contain any provision regarding the
application including sufficient evidence of a causal link between the subsidized imports and the
alleged injury, as required by ASCM Article 11.2.  Does China require petitions to contain
information concerning causation?
Reply
Causation is one of the factors that the investigating authority should consider in the initiation
of countervailing duty investigations, which is clearly stated in the Regulations of the People’s
Republic of China on Countervailing Measures .
Q13. Article 16 of the Regulations of the People’s Republic of China on Countervailing
Measures4 states that “the  government of the country (region) the product of which may be
subject to such investigation shall be invited for consultation regarding the subsidy in question”.
However, Article 23 of the Rules states that SETC “may” accept invitations for consultation
from the governments....” Under what circum stances would SETC not take part in
consultations?
Reply
What is stated in the two articles above means that as one of the investigating authorities, the
SETC is authorized to accept invitations for consultation from the government of the country (region)the product of which may be subject to the investigation. The function of countervailing duty
investigation that was attributed to the former SETC and Ministry of Foreign Trade and Economic
Cooperation has been integrated into the newly-established Ministry of Commerce. As a result the
problem does not exist any longer.
Q14. Article 23 of the Rules does not contain any provision under which the Members whose
products are subject to the investigation are, upon request, to be provided access to the
non-confidential evidence being used for init iating the investigation, as required by ASCM
Article 13.4.  Will this information be provided to such Members?
Reply
All the investigations and determinations by th e Chinese government will strictly follows the
WTO rules, so is the case with this aspect.
Q15. ASCM Article 12.1 states that  “[i]nterested Members and all interested parties in a
countervailing duty investigation shall be given notice of the information which the authorities
                                                     
4 G/SCM/N/1/CHN/1 (11 Sept 2002)G/ADP/Q1/CHN/34
G/SCM/Q1/CHN/34
Page 5
require and ample opportunity to present in writ ing all evidence which they consider relevant in
respect of the investigation in question.”
(a) In applying Article 24 of the Rules, will China allow respondents the opportunity
to revise information included with the notice of appearance after it is
submitted?
(b) What is the status of interested parties who do not register as respondents?
Additionally, will an interested party be considered as registered if it responds to
the best of its ability, but does not submit all of the information requested?
(c) Please specify the entities that may be treated as interested parties pursuant to
Article 24(4) of the Rules, which states that “others” may be granted interested
party status.
Reply
(a) The revision is allowed as long as it is reasonable.
(b) The interested parties who do not register as respondents may not obtain the
questionnaires from the investigating authority in time and would not supply theinformation that is favorable to them to th e investigating authority as a result. If the
interested parties registered and responded, but failed to submit the adequate
information, then the investigating auth ority may determine with the inadequate
information provided and the result of the determination may not be favorable to the
interested parties.
(c) For example: the down stream users and consumers.
Q16. In circumstances where SETC engages ex perts in a CVD investigation, pursuant to
Article 28 of the Rules, how will China ensure th at these experts maintain  the confidentiality of
the data examined, as provided for in Article 12.4 of the ASCM?
Reply
The experts engaged will go through a strict selection procedure and shall meet certain
requirements. They must have no shared interest or relation with the interested parties. Besides, the
experts will sign a confidentiality agreement with th e investigating authority, which they will work in
strict accordance with and take the legal obligation accordingly
Q17. Article 31 of the Rules states that the questionnaires shall be returned “within the time
limit” specified in the questionnaire.
(a) What is the time limit for questionnaire responses?  Are these calendar days
or working days?
(b) Under what circumstances will  SETC not grant an extension?
Reply
(a) The time limit is normally 37 calendar days.G/ADP/Q1/CHN/34
G/SCM/Q1/CHN/34
Page 6
(b) The former SETC has in general accepted all the reasonable extension requests of the
respondents.
Q18. Article 32 of the Rules does not provide for making the results of verifications available
to a firm that was verified.  How will the ad ministering authorities disclose results of the
on-the-spot-verification to ensure compliance with Article 12.6 and Annex VI of the ASCM?
Reply
In accordance with the relative WTO rules, the Chinese investigating authorities will disclose
results of the on-the-spot verification to the companies that are related to the verification under thepremise that the confidential information shall be protected.
Q19.  Article 33 of the Rules does not provide for protecting the confidentiality of information
received during the investigation in the terr itory of other Members, as required in ASCM
Article 12.6. How will China ensure that Article 33 is implemented consistent with the ASCM?
Reply
China fully respects the requirement of the interested parties on protecting the confidentiality
of information. The investigating authority will normally ask the interested parties to supply a non-confidential summary of the information as well as the confidential documents so that other interested
parties could get the knowledge of the non-confidential information.
Q20. Article 33 of the Rules states that, when requested by an interested party, SETC may
conduct a verification.  Under what circumstances would a requested verification not beconducted?  What provisions will the administering authority make for a situation in which it
cannot conduct all requested verifications?
Reply   
What is stated in Article 33 means that as one  of the investigating authorities, the former
SETC is authorized to conduct a verification abroad when requested by an interested party. Thefunction of countervailing investigation that was attributed to the former SETC and Ministry of
Foreign Trade and Economic Cooperation has been integrated into the newly-established Ministry of
Commerce. As a result, the problem does not exist any longer.
Q21. Article 35 of the Rules states that when requested by an interested party, or when SETC
deems it necessary, a public hearing may be held.  Under what circumstances would requests for
hearings not be honoured?
Reply
A public hearing may not be held under the condition that the interested parties do not request
one and the investigating authority thinks it has fully understood the opinions from the interested
parties.
Q22.  Will China be issuing further rules for price undertakings?  If so, when?  If not, how
will China determine if an undertaking is suffici ent to eliminate the injurious effect of the
subsidy, in accordance with  ASCM Article 18.1?G/ADP/Q1/CHN/34
G/SCM/Q1/CHN/34
Page 7
Reply
Article 37, 38 and 39 of the Rules have elaborated the above issue.
Q23. Will China entertain requests for price undertakings pursuant to Article 37 of the Rules
prior to making a preliminary determination of dumping and injury?  If so, please explain how
such a practice would be consistent with ASCM Article 18.2 which states that price
undertakings shall not be sought or accepted until after an affirmative preliminary
determination of subsidization and injury caused by subsidization has been made?
Reply
There is no such expression in Article 37 of the Rules. It is a misunderstanding of the
United States.
Q24. The second sentence of Article 38 of the Rules states that, if exporters refuse or do not
offer a proposal for price undertaking, “SETC is free to determine that a threat of injury is
more likely to be realized if the exporters continue to subsidize the imported products.”
(a) Is this a factor SETC will consider in addition to the factors pertinent to threat
analysis listed in Article 7 of the Rules?
(b) How is SETC’s consideration of this factor consistent with Article15.7 of the
ASCM?
Reply
Article 38 of the Rules states that “The fact that the exporters or governments of exporting
countries (regions) do not offer or accept a proposal for undertakings, shall in no way prejudice the
countervailing duty investigation of the injury to industry and the determination thereof.”. The
investigating authority will continue to analyze the factors listed in Article 7 of the Rules.
Q25. If a respondent’s request for confidential information is denied, will the respondent be
given an opportunity to revise the non-confidential summary or to withdraw any confidential
information prior to its disclosure?  How will China treat confidential information submitted by
the respondents once the investigation is completed?
Reply
Yes.  The respondent will be given the opportunity to revise the non-confidential summary or
to withdraw any confidential information prior to its disclosure. The investigating authority will
continue to maintain the confidentiality of the confidential information supplied by the respondent.
Q26. Article 44 of the Rules does not contain an y provision making allowances for difficulties
experienced by interested parties, in particular small companies, in supplying information
requested, nor does it require authorities to offer assistance, as provided for in ASCM
Article 12.11.  How does China intend to implement this ASCM requirement?
Reply
The investigating authority will offer the possibl e assistance to the interested parties in the
investigation in accordance with the relative WTO rules.G/ADP/Q1/CHN/34
G/SCM/Q1/CHN/34
Page 8
Q27. Will China issue provisional rules for ac cess to non-confidential information during
injury investigations?  If so, when?  Prior to that time, what will govern such access?
Reply
We will issue rules for the handling confidential and non-confidential information during
injury investigations. Prior to the issuance of such  rules, the investigating authority will work in
accordance with Regulations of the People’s Republic of China on Countervailing Measures and
Rules on Investigations and Determinations of Industry Injury for Countervailing Measures.
Q28. Article 45 of the Rules states that interested parties shall have access to non-confidential
information after the initiation of the case and prior to the publication of the final
determination.  The second paragraph of Article 45 states that the interested parties may also
have access to the non-confidential information within a reasonable period after publication of
the final determination.
(a) Are there any circumstances in which interested parties would be denied access
to non-confidential information?  If so, please explain.  How would such
circumstances be consistent with ASCM Article 12.3?
(b) How does China define “reasonable period” for purposes of this provision?  Will
records of investigations be available indefinitely for reference in future
investigations and for judicial review?
(c) How is this Article consistent with ASCM Article 12.3, under which  authorities
are to “provide timely opportunities for all interested Members and interested
parties to see all information that is re levant to the presentation of their cases,
that is not confidential…”?
Reply
Article 45 of the Rules states that interested parties shall have access to the non-confidential
information after the initiation of the case and prior to the publication of the final determination. The
interested parties may also have access to the non-confidential information within a reasonable period
after the publication of the final determination. Article 45 reflects the essence and spirits of ASCM
and is consistent with Article 12.3 of ACSM.
Q29. How is Article 46 of the Rules consistent with Article 23 of the  Regulations of the
People’s Republic of China on Countervailing Measures5, which states “the investigating
authorities shall allow applicants, interested parties and governments of interested countries
(regions) to have access to the information relevant to the investigation, provided that the
information has not been treated as confidential?”
(a) What is the “relevant certificate” required by Article 46? How do interested
parties obtain this certificate?
(b) What are the procedural formalities referred to in Article 46?  Where can
respondent parties obtain information on these procedural formalities?
                                                     
5 G/SCM/N/1/CHN/1 (11 Sept 2002)G/ADP/Q1/CHN/34
G/SCM/Q1/CHN/34
Page 9
Reply
Article 46 of the Rules reflect the essence and spirit of Article 23 of Regulations of the
People’s Republic of China on Countervailing Measures and explains the specific operation of
Article 23 in the actual situation. Article 46 requires the interested parties to present their identity
certificate and make the registration when referring to the non-confidential information.
Q30. While Articles 45, 46, and 47 of the Rules contain provisions permitting interested
parties to inspect non-confidential information,  they do not expressly address whether parties
are entitled to prepare presentations based on such  information that they inspect.  Do interested
parties have such rights?  If not, how does China implement the requirements of Articles 12.3
and 12.8 of the ASCM? What facilities does China provide for viewing and copying
non-confidential information?
Reply
Article 45, 46 and 47 of the Rules reflect the WTO principles. The investigating authority will
provide the interested parties with the necessary facilities for viewing, abstracting and copying non-
confidential information.
Q31. Article 50 of the Rules lists circumstances which would lead to termination of the injury
investigation.  This list does not include term ination based on the amount of the subsidy being
de minimis , although these grounds are included in Article 28 of the Regulations of the People’s
Republic of China on Countervailing Measures .  How is Article 50 consistent with Article 11.9 of
the ASCM which states that there shall be imme diate termination in cases where the amount of
a subsidy is de minimis (i.e., less than 1 percent, ad valorem)?
Reply
The treatment of de minims  subsidies has already been provided for in Regulations of the
People’s Republic of China on Countervailing Measures , therefore there is no duplicated provision in
the Rules.
Q32. Article 51 of the Rules contains provisions on interim and expiration reviews.
(a) Does China intend to issue implementing rules for interim reviews and
expiration  reviews?  If so, when?  Wi ll these rules be notified to the WTO?
(b) Will five-year expiration reviews be conducted in all cases either at the request
of interested parties or based on self-initiation by the administering authority?
(c) Under what circumstances will the administering authority self-initiate a
review?
(d) What is the timeline for completion of interim and expiration reviews?(e) Will the determination be issued publicly?  If so, in what format (e.g., where will
it be published)?
(f) What organization now conducts interim and expiration reviews?G/ADP/Q1/CHN/34
G/SCM/Q1/CHN/34
Page 10
(g) What procedural rights will part ies have with respect to the injury
determination?
Reply
With regards to the interim and expiration reviews, Regulations of the People’s Republic of
China on Countervailing Measures and Rules on Investigations and Determinations of Industry Injury
for Countervailing Measures have made the clear elaboration.
Q33. Articles 55 through 58 of the Rules address circumvention.
(a) Will China develop and publish procedures for investigations of circumvention
of CVD measures?
(b) With respect to Article 57(1) of the Rules, during what length of time prior to
initiation of an investigation would alleged “practices of circumvention ” beconsidered a factor to be examined in determining whether there has been
circumvention of countervailing measures?
(c) How can actions prior even to th e initiation of a countervailing duty
investigation constitute “circumvention” of a measure, if the measure does not
even exist at that time?
(d) What are the “appropriate measures” SETC may take in situations where
circumvention of a countervailing measure causes injury to the domestic
industry pursuant to Article 58 of the Rules?
Reply
The circumvention of anti-dumping and countervailing measures is a new issue. WTO
stresses that the investigating authority should take effective measures to prevent the circumvention.
Rules on Investigations and Determinations of Industry Injury for Countervailing Measures has
explained the issues on circumvention and anti-circumvention. At present China has no practicalexperience on anti-circumvention and we will improve the relating laws and practices.
Q34. When parties provide requested information in Chinese, as required by Article 59 of the
Rules, and a relevant document is lengthy, may a party submit a translation of only the
pertinent portions of the lengthy document, or mu st the party provide a translation of the entire
document, no matter how lengthy?
Reply
Article 60 of the Rules has clearly stated that any documents, materials or messages provided
by the interested parties should be in standard Chinese. Non-Chinese documents should be translated
into Chinese.G/ADP/Q1/CHN/34
G/SCM/Q1/CHN/34
Page 11
Q35. Will SETC interpretations of the Rules, re ferenced in Article 61 of the Rules, be subject
to judicial review?
Reply
Yes.
__________