WORLD TRADE
ORGANIZATIONG/ADP/Q1/CHN/15
G/SCM/Q1/CHN/15
11 April 2003
(03-2024)
Committee on Anti-Dumping Practices
Committee on Subsidies and Countervailing MeasuresOriginal:  English
NOTIFICATION OF LAWS AND REGULATIONS UNDER
ARTICLES 18.5 AND 32.6 OF THE AGREEMENTS
Questions Posed by the UNITED STATES Regarding the
Notification of THE PEOPLE'S REPUBLIC OF CHINA1
The following communication, dated 10 April 2003, has been received from the Permanent
Mission of the United States.
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QUESTIONS ON SUBSIDIES AND COUNTERVAILING MEASURES
1. The United States thanks China for its notification of its countervailing duty provisional rules
and regulations2  to the Committee on Subsidies and Countervailing Measures as required by
Article 32.6 of the Agreement on Subsidies and Countervailing Measures ("ASCM").
2. We understand that some rules that apply to countervailing duty proceedings have been issued
by the Chinese government, but do not appear to have been notified to the Committee.  For example:
(a) In September 2002, the Supreme People’s Court issued the Rules by the Supreme
People’s Court on the Issues Regarding Judicial Review of Countervailing
Administrative Case .
(b) The State Economic and Trade Commission (SETC) issued the Rules for Injury
Investigations and Determinations for Countervailing Duty Investigations  in
December 2002.
(c) The Regulation for Respecting Confidentiality by Government Officials , which
governs the protection of confidential information submitted to the Government ofChina.
When will China notify the translated text of these and any other relevant rules to the
Committee?
3.  Several sets of rules were issued by the Ministry of Foreign Trade and Economic Cooperation
(MOFTEC) for antidumping proceedings, for which no counterpart rules appear to have been issued
for countervailing duty proceedings.  These additional rules include:
                                                     
1 G/SCM/N/1/CHN/1 & Suppl.1.
2 G/SCM/N/1/CHN/1 (11 September 2002); G/SCM/N/1/CHN/1/Suppl.1 (18 February 2003)G/ADP/Q1/CHN/15
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(a) Provisional Rules for Sampling for Antidumping Investigations;
(b) Provisional Rules for Information Disclosure in Antidumping Investigations;
(c) Provisional Rules for Access to Non-Confidential Information in Antidumping
Investigations;
(d) Provisional Rules for Price Undertakings in Antidumping Investigations;
(e) Provisional Rules on New Shipper Review in Antidumping Investigations;
(f) Provisional Rules on Refund of Antidumping Duty;  and
(g) Provisional Rules on Interim Review  of Dumping and Dumping Margins.
Does MOFTEC intend to issue similar rules for countervailing duty proceedings as it did for
antidumping proceedings?
4. Article 1 of the notified regulations specifies that they are "formulated in accordance with the
Foreign Trade Law of the People’s Republic of China…".  Does "Foreign Trade Law" refer
exclusively to Law No. 19-586 adopted 12 May 1994 by the Seventh Session of the Standing
Committee of the Eighth National People’s Congress?  If not, what other laws apply to the notified
regulations and provisional rules? Have these other laws been notified to the Committee?
5.  Throughout this document, we refer to MOFTEC, SETC and the State Council Tariff
Commission as these are the organs cited in the notified regulations and rules.  In light of recent
government restructuring, please identify the specif ic government entities that will be administering
China’s countervailing rules and regulations, and the particular rules and regulations for which each
entity will be responsible.
6. With regard to Article 6 of the notified regulations:
(a) Paragraph 3 reflects the calculation method described in ASCM Article 14(c), but
omits the statements in the ASCM article that loan guarantees are not considered
benefits unless there is a difference in what would have been paid for a comparable
loan guarantee that the firm could actually obtain from commercial sources (plus
fees).  Is the intent of Paragraph 3 to mirror the requirements of ASCM Article 14(c)?
(b) How does Paragraph 5 take into account the standards for determining the market
price specified in ASCM Art. 14(d)?
7. Paragraph 3 of Article 8 of the notified regulations discusses the competent authority’s
examination of pricing and indicates that the authority should examine “price undercutting” of the
subsidized imports.  Please explain how this language is consistent with ASCM Art. 15.2, underwhich the investigating authorities are “to consider whether there has been a significant price
undercutting by the subsidized imports as compared with the price of a like product of the importing
Member…”.
8. Please clarify the standards of evidence that applicants must meet in providing each type of
information specified in Articles 14 and 15 of the notified regulations and Articles 15 through 22 of
the Provisional Rules on Initiation of Countervailing Investigations .
9. Article 16 of the notified regulations and corresponding articles of MOFTEC’s Provisional
Rules on Initiation of Countervailing Investigations do not include the provision of ASCM Art. 11.3
that requires the authorities to examine the accur acy and adequacy of the evidence provided in the
application to determine whether it is sufficient to justify the initiation of an investigation.  Also,
Article 16 does not include the provision of ASCM Art. 11.5 specifying that the authorities shallG/ADP/Q1/CHN/15
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avoid publicizing an application for investigation prior to an investigation being initiated.  How does
China intend to meet the requirements of ASCM Arts. 11.3 and 11.5?
10. Please confirm that Article 18 of the notified regulations and Article 44 of the Provisional
Rules on Initiation of Countervailing Investigations  are intended to implement the provisions of
ASCM Art. 11.6.  How does China envisage implementing this provision, including collecting the
evidence required by ASCM Art. 11 before self-initiating an investigation?  Is MOFTEC the only
organization that has authority to self-initiate countervailing duty proceedings?
11. With regard to the Provisional Rules for Initiation of Countervailing Investigations :
(a) Do Articles 8 and 9 of the Rules  concern solely how an “industry” is defined for
ascertaining whether there is sufficient support for the application for purposes of
ASCM Art. 11.4, or do they also relate to how the industry is defined for conducting
injury analysis for purposes of ASCM Art. 15?
(b) Article 9 of the Rules , which specifies when MOFTEC may define the domestic
industry on a regional basis, does not require that there be a concentration of
subsidized imports into the region.  Assumi ng that Article 9 is pertinent to injury
analysis, how is this provision consistent with the last sentence of ASCM Art. 16.2?
(c) Do Articles 18 and 19 of the Rules require an applicant to choose whether its
application is based on material injury to the domestic industry or threat of material
injury?  Can an applicant file an application based on   allegations  of both material
injury and threat?
(d) If an applicant files its application solely on an allegation of threat of material injury
pursuant to Article 19 of the Rules , is the applicant then free to omit from its
application the price and volume information specified in subparagraphs (1), (2), and
(3) of Article 18 of the Rules ?  If so, please explain how the provisions of Article 19
of the Rules  are consistent with Article 11.2(iv) of the ASCM.
12. Regarding the Provisional Rules for Questionnaires in Countervailing Duty Investigations :
(a) Article 13 of the Rules requires that responses and supporting materials be translated
into simplified Chinese characters.  For voluminous supporting documents, such as
company annual reports, will MOFTEC allow parties to limit translation to only the
relevant portions of the documents?
(b) What explanation will MOFTEC provide to parties submitting information of the
grounds for its conclusion under Article 20 of the Rules  that the reasons for
requesting confidential treatment are insufficient?
(c) Article 20 of the Rules  provides that MOFTEC will request amendment of a request
for confidential treatment in two situations:  1) the original reason given for the
request is deemed insufficient; or 2) the non-confidential summary  (or reason given
for not providing such a summary) is deemed insufficient.  However, Article 20 only
explains what will happen in one of those situations if the amendment continues to bedeemed insufficient (i.e. if the amended non-confidential summary is still insufficient,
the material will be disregarded).  Article 20 of the Rules  does not explain what steps
will be taken if the amended reason for requesting confidentiality is still deemedG/ADP/Q1/CHN/15
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insufficient.  In such a case, will the materials be disregarded or treated as non-
confidential?
(d) What does MOFTEC do with material which has been submitted to it, but which it
will disregard under Article 20 because of an insufficient non-confidential summary?
13. Regarding the Provisional Rules for the Conduct of Public Hearings in Countervailing Duty
Investigations :
(a) Please clarify what type of information would fall within the definition of “state
secrets” or “personal privacy” under Article 4 of the Rules .
(b) Articles 5 through 10 of the Rules  suggest that holding a hearing is at the discretion of
MOFTEC.  How is this Article consistent with ASCM 12.2, which states, “interested
parties shall have the right to present information orally”?
(c) Article 14 of the Rules  suggests that only interested parties may attend a hearing.
Does China allow for public attendance at hearings?
14. With regard to the Provisional Rules for On-the-Spot Verification in Countervailing Duty
Investigations :
(a) Please clarify the intent of the statement in Article 4 of the Rules  that MOFTEC will
only conduct verifications of exporters who have been fully cooperative in the
investigation.  For example, will failure to provide a small, discrete amount of data
while otherwise cooperating to the best of their ability prevent  any verification from
occurring?
(b) Please clarify the meaning and intent of Article 6 of the Rules .  What factors will
MOFTEC consider in determining whether the “particular circumstances” of each
case call for verification?
(c) Under what circumstances does MOFTEC foresee using non-government experts to
assist in verification, as indicated in Article 12 of the Rules ?  What is the penalty
should such experts breach their obligation of  confidentiality with respect to certain
company information?
(d) If, under Article 16 of the Rules , the verification team decides to use Chinese as the
working language, will MOFTEC provide translators?
(e) Please clarify what is envisioned as a “reasonable period” and elaborate as to the
level of detail that will be disclosed in MOFTEC reports of the results of verification,
as envisioned under Article 19 of the Rules .
(f) Article 21 of the Rules indicates that facts available may be applied when verification
fails to be completed as scheduled due to delay caused by exporters and producers in
question.  What allowance will MOFTEC make for circumstances where it is not
possible for the company to reasonably respond in the time allotted for verification?
(g) Will MOFTEC conduct verifications of questionnaire responses only in initial
investigations, or will MOFTEC also conduct verifications in interim reviews?
Under what circumstances will MOFTEC conduct a verification in a review?G/ADP/Q1/CHN/15
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15. Article 22 of the notified regulations does not provide a definition of “interested parties,”
which is particularly important with respect to the treatment of and access to confidential information.
How does China define interested parties and how does that definition comply with ASCM Art. 12.9?
16. Article 22 of the notified regulations states that “[a]n interested party may request the
investigating authorities to treat the information it provided as confidential if it considers that any
disclosure of such information will create significantly adverse effects.”  How does MOFTEC define
what constitutes “significantly adverse effects”?
17. How does China interpret the following provisions in Article 45 of the notified regulations:
(1)  “the subsidized imports increased massively during a short period of time;” (2)  “such increase
has caused injury which is difficult repair to a domestic industry;” and (3) “such products have
benefited from the subsidy ”?
18. Article 29 of the notified regulations indicates that any decision to apply provisional measures
is proposed by MOFTEC, but decided by the State Council Tariff Commission (the “Tariff
Commission”).  The same requirement applies to final determinations, as specified in Article 38.
What oversight rules govern the Tariff Commission’s decisions?  What discretion does the Tariff
Commission have in setting countervailing duties or otherwise modifying MOFTEC’s
recommendations?  Does the Tariff Commission have the authority to increase the countervailing dutydetermined by MOFTEC?
Article 29 also specifies that countervailing duties will be collected by Chinese Customs.
What provisions are available to an importer to seek redress in the event of a dispute over
classification of imported merchandise and/or an error in the amount of the duty collected by ChineseCustoms?  This question also applies to disputes over the amount of any duties to be refunded under
Article 46 of the notified regulations.
19. In regard to Article 47 of the notified regulations, will countervailing measures expire
automatically after five years if no review is undertaken?  If not, what procedures are required to
apply for revocation of the countervailing measures?  Please clarify the meaning of “may be extended
as appropriate” as used in Article 47.  For example, will there be a finite extension of thecountervailing measure?  Will another review be required to remove the measure at a later date, and if
so, how soon following the fifth anniversary ma y such a review be requested?  Under what
circumstances, and based upon what information will China conduct the review specified in
Article 47?  What rules will China follow in conducting such a review?
20. Article 54 of the notified regulations specifies that MOFTEC and SETC may take
“appropriate measures” to prevent circumvention of countervailing measures. Please describe how the
authorities will determine whether such circumvention has occurred, and the types of measures the
authorities may take if such circumvention has occurred?
21. Article 55 of the notified regulations specifies that China may take "corresponding measures"
when any country "discriminatorily" imposes countervailing measures against exports from China.
Based on what authority in the ASCM could China take such an action?  Under what circumstances
does China foresee applying this provision (i.e. what  would be considered as "discriminatory" within
the meaning of Article 55)?  What sorts of actions would be taken against another country?  Is there
any law prohibiting use of Article 55 prior to exhausting other remedies such as the WTO dispute
settlement process?G/ADP/Q1/CHN/15
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22. Please elaborate on how judicial reviews will be conducted, including specific entities that
will conduct the reviews and the procedures under which such reviews would be conducted. Does
China intend to notify the Committee of The Administrative Review Law of the People’s Republic of
China,  The Administrative Litigation Procedure Law of the People’s Republic of China  , Article 14 of
the Law of the People’s Republic of China on Administrative Reconsideration  and the Law of the
People’s Republic of China on Admi nistrative Litigation Procedure ?
23. What are the procedures for requesting and conducting appeals to the State Council Tariff
Commission referred to in Article 52 of the notified regulations?  Which courts have jurisdiction over
the findings of the Tariff Commission in appeals of  countervailing measure decisions?  What laws and
regulations govern such actions and what standard of evidence is required for the appeal?  Will Chinabe issuing rules concerning such appeals?
24. Please explain the differentiation between the terms "country" and "region" as used in the
notified regulations (e.g. Article 4).
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