WORLD TRADE
ORGANIZATIONG/ADP/8
18 November 2002
(02-6363)
Committee on Anti-Dumping Practices
CHAIRMAN'S REPORT TO THE COUNCIL FOR TRADE IN GOODS
ON TRANSITIONAL REVIEW OF CHINA
1. The Committee on Anti-Dumping Practices undertook the first transitional review of China
pursuant to Paragraph 18 of the Protocol on the Accession of the People's Republic of China(WT/L/432) at its meeting on 24-25 October 2002.
2. There is no information specified for subm ission to the Committee under Annex 1A to the
Protocol.  Prior to the meeting, China had made several of the notifications required of all Members
under the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade
1994 (the Anti-Dumping Agreement).  These can be found in documents G/ADP/N/1/CHN/1 andG/ADP/N/1/CHN/2, both of  which concern legisla tion, and G/ADP/N/ 92/CHN, which is China's semi-
annual report of anti-dumping actions for the period 1 January to 30 June 2002.  China had also notified
preliminary or final actions taken, as reflected in document G/ADP/N/95.
3. Members submitted questions in the context of  the transition review relating to China's
notification of legislation in G/ADP/N/1/CHN/2.  The questions posed by Members in this regard can be
found in documents G/ADP/Q 1/CHN/1 and G/ADP /Q1/CHN/3 throug h G/ADP/Q1/CHN/7.
4. The statements made at the meeting of 24-25 October 2002, at which the transitional review
was Item D of the agenda, are reflected in the minutes of the meeting, which will be circulated as
document G/ADP/M/22.  The relevant paragraphs, which reflect the statements made and the
discussion at the meeting, are annexed.G/ADP/8
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Excerpt from the Minutes of the Regular Meeting of the Committee on Anti-Dumping
Practices held on 24-25 October 2002, to be circulated as document G/ADP/M/22
D. TRANSITIONAL REVIEW UNDER PARAGRAPH 18 OF THE PROTOCOL OF
ACCESSION OF THE PEOPLE'S REPUBLIC OF CHINA TO THE WORLD TRADEORGANIZATION
1. The Chairman recalled that paragraph 18 of the Protocol of Accession of the People's
Republic of China to the WTO provides that all subsidiary bodies, including the Committee, "which
have a mandate covering China's commitments under the WTO Agreement or [the] Protocol shall,
within one year after accession, review, as appropria te to their mandate, the implementation by China
of the WTO Agreement and of the related provisions of [the] Protocol".  He noted that China was to
provide relevant information in advance of the re view, including information specified in Annex 1A
of the Protocol, and that China can also raise issues relating to any reservations under Section 17 or to
any other specific commitments made by other Members on the Protocol in subsidiary bodies which
have  a relevant mandate.  The Committee must report the results of the review promptly to the
Council for Trade in Goods.  Review is to take pl ace after  accession in each year for eight years with
a final review in year 10 or at an earlier date decided by the General Council.  There are noprocedures set out for the conduct of the transiti on review in the Protocol, except that China is to
provide relevant information in advance of the review.
2. The Chairman noted in this regard that there is no information specified for submission to the
Committee under Annex 1A.  He observed that China had made several of the notifications required
of all Members under the Agreement, which co uld be found in documents G/ADP/N/1/CHN/1 and
G/ADP/N/1/CHN/2, both of which concern legislation, and G/ADP/N/92/CHN, which is China's
semi-annual report for the period 1 January-30 June 2002.  China had also notified preliminary or
final actions, as reflected in G/ADP/N/95.  Members had submitted questions in the context of the
transition review, all of which related to China's notification of legislation in document
G/ADP/N/1/CHN/2.  The Chairman reminded Members that that notification would be included on
the agenda of the Committee's meeting in spring 2003 in the regular course of business.  Before
turning to the questions posed by Members, the Chair asked whether any Member had any general
comments.
3. The delegate of the United States made a statement regarding the US views on the transitional
review mechanism.1  He stated that the remedies authorized by the Agreement on Implementation of
Article VI of the General Agreement on Tariffs and Trade 1994 (the “Anti-Dumping Agreement”)
form an essential part of the current rules-ba sed international trading system.  Transparency,
predictability, and adherence to the rule-of-law are all critical to the WTO-consistent application of
these remedies, as well as to ensuring that they don’t  act as an unjustifiable barrier to trade.  Hence, it
is in all Members’ interests to ensure that each Member promptly and effectively implements their
WTO obligations in this area.
4. He continued by stating that Members' joint goal in this transitional review mechanism should
be to conduct a thorough and meaningful review, both to highlight to China its successes, and to
identify areas where more work needs to be done.  As China is becoming increasingly active in using
its anti-dumping law, it is important that it lay out its plan for bringing its practices into better
conformity with its WTO commitments where there are gaps.  The United States wanted to do its
utmost to facilitate such a review and urged China to join in the review in the spirit in which it is
                                                     
1 Subsequently circulated as document G/ADP/W/428, 28 October 2002.G/ADP/8
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intended.  A key part of the review is for Members to ask questions about areas of China’s practices
that they do not understand.  The United States and five other Members posed such questions.2
5. The United States recognized and applauded China’s efforts to implement trade remedy laws
and regulations consistent with WTO requirements.  China had been prompt in promulgating new
regulations and implementing rules, with new regulations having gone into effect on 1 January 2002,followed by eleven sets of provisional implementing rules between February and April.  The
United States were disappointed, though, by the delay in China’s notifying these regulations and rules
– the regulations were not notified until May (by name only) and the text of the regulations not until
September (G/ADP/N/1/CHN/1 and 2, respectively).  To the knowledge of the United States, China
has not yet notified its statute governing anti-dumping measures nor the text of its provisional
implementing rules.
3
6. With regard to transparency, the United States encouraged the Ministry of Foreign Trade and
Economic Cooperation’s (MOFTEC) efforts to make non-confidential information submitted during
anti-dumping proceedings available to interested parties and to the public.  To the United States'
knowledge, the State Economic and Trade Commission (SETC) has not established a means to make
available to the public, or even to interested parties, non-confidential summaries of materials
submitted to the agency.  At both agencies, there appears to be little or no disclosure of theirrespective analysis and decision-making process.  However, none of the anti-dumping investigations
that China had initiated since its accession to the WTO had reached the point of a preliminary
decision.  The United States hoped China took advantage of this early stage to further develop
transparency in its proceedings.
7. The United States were also encouraged that the notified regulations embrace the principles of
rule of law and due process.  However, the regu lations provide no elaboration on these topics.  In
particular, China should identify the specific statute or statutes that govern its anti-dumping actions
and notify those laws to the Committee.  China also should clarify the roles of Chinese government
entities involved in China’s anti-dumping regime:  MOFTEC, SETC and the State Council Tariff
Commission.  Also unclear are the entities to whom  appeals of anti-dumping determinations may be
made and the rules under which such appeals will be conducted.
8. China had made a significant effort to mold its revised regulations to the provisions and
requirements of the AD Agreement, which was particularly evident when the notified regulations are
compared with China’s pre-accession anti-dumping regulations.  The language in China’s notified
regulations appeared generally to follow that in the AD Agreement, although there were certain areas
where key provisions were omitted or were worded in an ambiguous manner.  In addition, China
included certain provisions that do not appear in the AD agreement.  The most prominent examplewas Article 56 of the notified regulations, which indicates that China may take “corresponding”
measures when another country “discriminatorily” imposes anti-dumping measures on exports from
China.  This provision appeared to have provoked universal comment – each of the Members that
submitted TRM questions expressed concern about Article 56.  The United States and other Members
also had questions about such topics as:
• The factors that China will examine in conducting an injury analysis under Article 3 of the
AD Agreement;
                                                     
2 G/ADP/Q1/CHN/1, 3, 4, 5, 6 and 7.
3 The United States reserved comment and the right to pose questions on the provisional rules and the
topics that they covered until China formally submitted the text of the rules to the Committee.  A list of the
provisional rules that China had issued was included in China’s May notification.G/ADP/8
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• China’s definition of “interested” and “related” parties under Articles 6.11 and 4.1 of the AD
Agreement, respectively;
• China’s calculation of export price and normal value under Article 2 of the Agreement;
• China’s use of facts available in anti-dumping determinations under Annex II of the AD
Agreement; and
• How China intended to identify and address evasion of anti-dumping measures.
9. The questions the United States and other Members posed attempted to seek understanding of
the issues noted above.  The United States were disappointed that China had not provided writtenanswers to those questions.  Such responses would have greatly facilitated the review during these
meetings.  In order to make the review useful to all, China included, the United States urged China to
agree to submit in a timely manner, written responses to the questions posed by the Members.
10. The delegate of the United States stressed that the United States does not take issue with
China’s use of anti-dumping remedies, so long as such actions comport with WTO rules.  TheUnited States also looked forward to continued cooperation with China, such as through technical
assistance exchanges, as it develops its trade remedy regime.  The United Stated hoped these
exchanges would foster a mutual understanding of each other’s unfair trade laws and promote fair
application of the rules in accordance with WTO guidelines.  In that regard, the United States had just
completed a program of comprehensive anti-dumping training assistance to a delegation of traineesfrom the Shanghai WTO Affairs Consultation Centre over the course of their four-month stay in
Washington this fall.  The United States were eager to provide similar assistance to the Government
of China, as well as other groups within China that need such training.
11. The Chairman thanked the delegate of the United  States and invited the delegate of China to
take the floor to make a statement or to respond to the questions found in documents
G/ADP/Q1/CHN/1, and G/ADP/Q1/CHN/3-7.
12. The delegate of China stated that China welc omed this opportunity to address the Committee
on the implementation of China’s commitments with regard to Anti-Dumping within the framework
of paragraph 18 of China’s Protocol of Accession.  China’s accession to the WTO reflected the strong
quest of China for a fair and open trading system, and the resolution to resist protectionist pressures ofall kinds. Therefore, in spite of the challenges and difficulties arising from WTO Membership, the
Chinese Government had taken a firm and positive stand on the implementation issues, for example,
institutional restructuring, undertaken by China to better adapt to the demands posed in particular by
the WTO accession, fulfilling WTO obligations and China's accession commitments.
13. As part of the implementation efforts, an enormous amount of preparations had been made by
various related government agencies for the smooth proceeding of this review.  To facilitate this
exercise, he would present to the Committee a brief introduction in this regard.  His statement wouldbe composed of three parts.  The first part described the implementation of the AD Agreement and
China's preparation for this review; the second part would be China's responses to the questions and
comments from Members raised before this meeting, a nd in the last part of the presentation, he would
raise some issues of concern to China for the attention of Members.
14. Part one - implementation of the Agreement and preparation for the review.  First, on
the issue of China’s legislation on anti-dumping practices.  The Foreign Trade Law of The People’s
Republic of China  came into force on 1 July of 1994, which marked the establishment of the anti-
dumping system in China.  Article 30 of the Law stipulates that, “Where a product is imported at lessG/ADP/8
Page 5
than normal value of the product and causes or threatens material injury to an established domestic
industry concerned, or materially retards the establishment of a particular domestic industry, the State
may take necessary measures in order to remove or ease such injury or threat of injury or retardation”.
Article 32 of the Law stipulates that, in the event of such situation, “the authority or agency
designated by the State Council shall conduct investigations and make determinations…”
15.  Under the above-mentioned Articles of the Foreign Trade Law, China promulgated The
Regulations on Anti-Dumping and Countervailing Measures  on 25 March of 1997.  These regulations,
the first regulations on anti-dumping in China, were drafted with help from the United States and the
European Union.  After China’s accession to the WTO, China promulgated The Regulations of The
People’s Republic of China on Anti-Dumping  on 1 January 2002 on the basis of WTO rules, taking
into account the experience China had gained in applying the Regulations  of 1997, and also the
practices of some other WTO Members.  China cherished the cooperation and technical assistancereceived from WTO Members in the formulation of the new regulations.
16. Compared with the Regulations  of 1997, the new Regulations  are more detailed, with
59 Articles, and provide more predictability as well as transparency to the parties concerned.  And, in
the same spirit, the Ministry of Foreign Trade and Economic Cooperation of China (MOFTEC)
promulgated as many as eleven administrative rules regarding anti-dumping, namely:
• Provisional Rules of MOFTEC on Public Hearing in Anti-Dumping Investigations;
• Provisional Rules of MOFTEC on Questionnaire in Anti-Dumping Investigations;
• Provisional Rules of MOFTEC on On-The -Spot Investigations in Anti-Dumping
Investigations;
• Provisional Rules of MOFTEC on Information Disclosure in Anti-Dumping Investigations;
• Provisional Rules of MOFTEC on Price Understandings in Anti-Dumping Investigations;
• Provisional Rules of MOFTEC on Access to N on-Confidential Information in Anti-Dumping
Investigations;
• Provisional Rules of MOFTEC on Sampling in Anti-Dumping Investigations;
• Provisional Rules of MOFTEC on Initiation of Anti-Dumping Investigations;
• Provisional Rules of MOFTEC on Interim Review in Anti-Dumping Investigations;
• Provisional Rules of MOFTEC on New Shipper Review in Anti-Dumping Investigations;
• Provisional Rules of MOFTEC on Refund of Anti-Dumping Duty in Anti-Dumping
Investigations.
17. Being an integral part of China’s anti-dumping regulations, the above-mentioned rules
provide guarantees to protect the interests and rights of all the parties concerned.  The translation of
these rules was underway and the English versions would be notified to this Committee soon.
18. Second, on the application of the legislation.  Based on the provisions of The Regulations on
Anti-Dumping and Countervailing Measures  of 1997, China initiated its first anti-dumping
investigation on newsprint on 10 December 1997.  In total 12 investigations were initiated with 8concluded under the Regulations  of 1997.
19. By the end of September 2002, China had initiated 21 anti-dumping investigations on
products from 20 countries and regions, covering petrochemical, steel, chemical and paper products,
etc.  To date, of the total of 21 investigations, 8 had been concluded, and the other 13 were still in
process.  Of the 8 investigations concluded, 2 in vestigations were terminated due to no injury to
domestic industry.  The other 6 investigations resulted in definitive measures.  With regard to these
measures, some exporters were granted a zero duty rate; some exporters were given price
undertakings; and certain Members were excluded from the investigation on the basis of negligible
import volumes.G/ADP/8
Page 6
20. In the process of formulating the above-mentioned Regulations  and rules, China spared no
efforts in maintaining consistency with the relevant  WTO rules in all aspects, including the initiation
procedures and the subsequent investigation, the determination of dumping and injury, reviews, etc.
21. Third, notification by China under the Anti-Dumping Agreement.  After accession, China had
fully implemented its notification obligations pursuant to the Anti-Dumping Agreement.  On28 May 2002, China notified to the Committee on Anti-Dumping Practices the regulations and
administrative rules on Anti-Dumping in accordance with Article 18.5 of the Anti-Dumping
Agreement, which is contained in the WTO document G/ADP/N/1/CHN/1.  On 27 August 2002,
China further submitted to the Committee the English version of the Regulations on Anti-Dumping ,
which is contained in the WTO document G/ADP/N/1/CHN/2.  On 3 September 2002, China
provided to the Committee a notification concerning the anti-dumping actions taken during the first
half of 2002, pursuant to Article 16.4 of the Anti-Dumping Agreement.  Last but not least, China hadalso notified promptly preliminary and final measures taken.
22. Part two - responses to the comments and questions of common concern to some
Members .  Some Members had submitted questions with regard to the anti-dumping legislation and
the practices of China in advance of the meeting.  Some Members who raised questions expressed
their concern that Chinese regulations on anti-dumping were too simple to completely reflect theAnti-Dumping Agreement and that China’s anti-dumping practices may not be fully compatible with
WTO Anti-Dumping Agreement.
23. First, as just mentioned, China strictly observed the Anti-Dumping Agreement in the process
of formulating the Regulations of the People's Republic of China on Anti-Dumping  so as to ensure the
latter’s full consistency in all areas.  Second, under the Regulations , MOFTEC has formulated
11 rules for Chinese anti-dumping practices.  Relevant rules on injury enquiries are in the process of
formulation by the State Economic and Trade Commi ssion (SETC).  These rules, together with the
Regulations  itself, form a comprehensive package of China’s anti-dumping legislation to fully
implement the Anti-Dumping Agreement.  As just mentioned, the translation of these rules is
underway.  After China had notified the English versions to the Committee, Members would findanswers very easily for their questions.
24. The delegate of China then addressed some specific questions posed by Members.
1. Function of various government Author ities in anti-dumping investigations.  At
present, there are three government administrations who deal with anti-dumping matters in
China -- the Ministry of Foreign Trade and Economic Cooperation (MOFTEC), the State
Economic and Trade Commission (SETC) an d the State Council Tariff Commission.
MOFTEC and the SETC are the investigating authorities.  MOFTEC is in charge of theinvestigation and determination of dumping.  SETC is responsible for the investigation and
determination of injury.  The Tariff Commission decides whether to levy provisional or
definitive anti-dumping duty.  Under Articles 29, 38 and 50 of the Anti-Dumping Regulations
of China , the Tariff Commission decides whether to levy an anti-dumping duty, including the
level of the duty, upon a proposal made by MOFTEC on the basis of the investigationfindings.  However, the level of the duty decided by the Tariff Commission cannot exceed the
dumping margin determined by MOFTEC.  Other than the above-mentioned functions carried
out by SETC and the Tariff Commission, MOFTEC deals with the other issues related to anti-
dumping including notification, consultation, etc.G/ADP/8
Page 7
2. Implementation of Article 56 of the AD Regulation.  Some Members also
expressed their concern on the “corresponding measures” under Article 56 of China’s Anti-
Dumping Regulations .  The delegate of China made clear that that (1) so far China had not
applied Article 56 and therefore had not yet taken any “corresponding measures” in any case,
(2) being a WTO Member, before taking “corresponding measures”, China would resort tothe dispute settlement provisions under Article 17 of the AD Agreement and dispute
settlement provisions under Annex II of the WTO Agreement, if the other party was a WTO
Member.
3. Administrative and Judicial review.  If the concerned parties disagree with the
relevant anti-dumping decisions, Article 53 prescribes the mechanism of administrative and
judicial review.  Where interested parties disagree with the final determination, the decisionson the imposition of anti-dumping duties, the retroactivity of anti-dumping duties, refund of
anti-dumping duties and imposition of anti-dumping duty on new shippers, they can apply for
administrative reconsideration.  In accordance with Article 14 of The Administrative Review
Law of the People's Republic of China , the review authority shall be the department under the
State Council that carried out the administrative action.
For judicial review, China had The Administrative Litigation Procedure Law of the People’s
Republic of China .  According to this law, the People’s  Court, at intermediary level, within
the jurisdiction of which the government authority making the administrative decision in
question is located will deal with litigation against this government authority.  Furthermore,the People’s Supreme Court of China is in the process of formulating rules on hearings in the
administrative litigation on anti-dumping.  After its promulgation, China would notify WTO
as soon as possible.
As to the standard of the review, the reconsideration authority or the court shall focus on
whether there are procedural irregularities, abuse of power, improper interpretation and
application of law, etc.  However, they are not entitled to reinvestigate the case.
4. Best Information Available (BIA).  Article 21 of China’s Anti-Dumping
Regulations  stipulates that the investigating authority may make determinations on the basis
of the facts available and the best information available, if the interested party fails to provide
the information required, or refuses to provide relevant materials, or otherwise fails to providenecessary information within a reasonable time-limit or significantly impedes the
investigation.  This Article is consistent with Article 6.8 and the provisions of Annex II of the
Anti-Dumping Agreement.
In the questionnaires, China underscores, in bold letters, “ If, within the prescribed time-
frame, your company fails to submit the completed questionnaire as required, or fails to
submit a comprehensive and accurate answer sheet, or does not allow MOFTEC to
verify the information and materials provided, MOFTEC may, pursuant to the Anti-
Dumping Regulations of the PRC , make determinations on the basis of the facts available
and best information available. ”  This principle applies to the injury enquiries as well.
In practice, Chinese investigating authorities always try to verify all the information and
materials submitted by the responding companies.  Best information available (BIA) is
applied only when the information required is not submitted or the submitted information can
not be verified with due difficulties.G/ADP/8
Page 8
5. Anti-circumvention.  Some Members also asked questions with regard to Article 55
of China's Anti-Dumping Regulations , which stipulates that MOFTEC and SETC may take
appropriate measures to prevent the circumvention of anti-dumping measures.  Although this
Article provides the possibility of remedial measures when circumvention takes place, the
delegate of China made it clear that, to date, China had not invoked this Article and had nottaken any anti-circumvention measures.  However, China noted that quite a number of
Members do have relevant rules and practices on anti-circumvention.  This issue has been
under discussion for a long time in the WTO, and was also a subject of the Negotiating Group
on Rules, as well as the Committee.  Once any new disciplines were agreed, China shall fully
implement them.
25. Part three, the Market Economy status of China and the implementation of Annex 7 to
China's accession protocol by certain Members.    Section 18 of China’s Protocol of Accession also
stipulates that China can also raise issues relating to any reservations under Section 17 or to any other
specific commitments made by other Members in the Protocol.  The Chinese delegation had been
requested, by Chinese enterprises who have been fo r a long time the victims of other Members’ unfair
anti-dumping practices, to raise at this meeting their serious concerns over other Members' anti-dumping regulations and practices against Chinese products.
26. The first would be the issue of “market economy status” ("MES”).  Despite the fact that
China had made remarkable achievements over the past two decades in the establishment of its market
economy and that Chinese companies were now totally driven by market forces in their business
operations, China had noticed that few Chinese companies had been granted market economytreatment.  To a large extent, this was due to the fa ct that the criteria and procedures provided for in
China’s Protocol of Accession, which justify fair treatment towards Chinese companies meeting
market conditions, were not properly reflected in the anti-dumping rules and practices maintained by
some Members.  These inconsistencies seriously impaired the interests of Chinese companies and
impeded normal trade between China and these Members.  China required those Members toobjectively evaluate the achievements that China had made in establishing a market economy system
and to strictly observe the relevant WTO rules to ensure fair treatment of Chinese companies.
27. The delegate of China also reminded some Members of the commitments they had made with
regard to the reservation of some existing anti-dumping measures against Chinese products that are
not consistent with WTO rules. Annex 7 of the Prot ocol provides clear-cut phase-out arrangements for
these.  China required that these provisions be carried out by these Members in due course.
28. China had been fulfilling its WTO accession commitments in a positive and serious spirit.
The efforts made, as well as the difficulties that have been overcome, should be recognized by all
Members.  Great improvement had been made in terms of legislative construction, market access
opportunities, and policy transparency since China’s accession to the WTO.  The delegate of China
hoped that the information notified to the Committee prior to the meeting and the presentation made
just now would help facilitate this review.  As a new Member of WTO, the Chinese Government was
willing to enter into closer cooperation with the WTO as well as other Members.  
29. With the guidance of the Chair and cooperation from Members, the delegate of China was
convinced the review could greatly improve understanding between China and other Members, and
would achieve positive results.
30. The Chairman thanked the delegate of China and inquired whether Members had follow-up
questions or comments with respect to China's intervention.G/ADP/8
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31. The delegate of the United States thanked the Chinese delegation for its statement and its
cooperation in the review.  He asked the Chinese delegation whether it intended to provide detailed
answers to each of the questions raised by the Members in advance of this meeting?
32. The delegate of the European Communities thanked China for the explanations given and for
the efforts undertaken in order to implement the obligations taken in acceding to this organization.
The EC had listened very carefully to what had been said and had tried to compare what had been said
to the questions which had been posed by the EC prior to the meeting, but had not found replies to all
its questions.  The EC realized that a significant number of the questions posed could probably be
answered, as the delegate of China pointed out, by looking at the provisional rules for which English
translations were being prepared, and to which th e EC looked forward.  Some of the questions also
covered issues which, at least at first sight, did not appear to be covered by these provisional rules.
These were the EC's questions concerning normal value, injury, legal representatives, and so on.  TheEC wondered whether China envisaged to give a reply on these questions which do not relate to the
provisional rules, and if so, at what time could the EC expect such a reply.
33. The delegate of Chinese Taipei echoed the positive remarks made by the previous speakers,
that credit should be given to China for their obvious efforts in preparing those responses to the
questions and comments tabled by his delegation and several others.  However, he was not sure,having heard the Chinese oral presentation, whether all of his delegation's concerns had been
thoroughly responded to.  His authorities would study China's responses later in detail, and might ask
follow-up questions.  As one of China's major trading partners and a major investor, Chinese Taipei
felt very much obliged to identify and address several important concerns in areas where China might
have lapsed in its implementation of the Protocol of Accession.  Of course, Chinese Taipei stronglybelieved that China's smooth implementation was in the best interest of all Members, including China
itself.  Therefore, his delegation welcomed and appreciated the opportunity to exchange views with
Chinese colleagues, taking advantage of this review mechanism, and wished China well in this review
exercise.
34. The delegate of Japan thanked the delegate of China for the explanations given.  China's
explanations covered some questions Japan had posed beforehand, but many of the questions still
remained unanswered.  Therefore, Japan was looking forward to answers from China, and also to the
notification of the other regulations referred to by the Chinese delegate.
35. The delegate of Korea stated that, as one of the questioning Members, he appreciated very
much the Chinese response, which was  to the point and presented in a very cooperative manner.  His
delegation was especially very much encouraged by the response of China that Regulation 56 would
be implemented in strict compliance with the Dispute Settlement Understanding and the Anti-
Dumping Agreement.  Furthermore, Korea was also  very much encouraged that anti-circumvention
will be implemented only after there are unified rules arrived at through negotiation.
36. The delegate of Cuba thanked China for such a broad and complete presentation, and
congratulated China for the considerable efforts th at they had made in barely a year following
accession.  Cuba saw that work had been done on legislation and on very complex and technicalsubjects, such as that addressed in the Committee.  Cuba was still involved in the same process.  Cuba
recognized China's efforts in the context of a burdensome exercise which is being conducted in
parallel in several bodies of the organization.
37. The delegate of Canada thanked the delegation of China for its presentation, which had been
helpful.  Canada also wondered whether China woul d be providing answers in writing to the questions
that had been submitted as part of this exercise.G/ADP/8
Page 10
38. The delegate of China thanked the Members who had spoken for their positive comments.
With respect to the questions raised by the United  States, the European Communities, Chinese Taipei,
Japan, Korea, Cuba and Canada, he invited his colleague to give responses to some specific questions.
39. The delegate of China, before turning to spec ific questions posed by WTO Members, made a
general remark.  He noted that every country has a different legal culture.  It is Chinese tradition for
the legislative body just to set forth the general principles and the guidelines for carrying out of
administrative action, and to leave room for the impl ementing authority to formulate detailed rules to
accommodate changing circumstances.  It was not in tended that the legislative authority compel the
implementing authority to violate China's international obligations.  On the contrary, as Members
know, the WTO Anti-Dumping rules are evolving, the simplification of the legislation especially for
anti-dumping legislations is to allow the Chin ese Government actively to participate in the
negotiations and take into account the changing circumstances when the legislations are implemented.
40. Turning to the specific questions, the delegate of China observed that as there were so many
questions put to China, it was not appropriate to read the question first and provide replies.  Instead,
he would structure his replies by the sequence of the Articles as they appear in the notified
regulations.
41. First with regard to Article 1, concerning the legal basis for the formulation of the anti-
dumping regulation, this question had already been answered by the head of the Chinese delegation --
the legal basis for the anti-dumping regulations is the Foreign Trade Law of the People's Republic of
China.
42. Coming to Article 4, with regard to paragraph 2 of Article 4 of the Regulations, several
questions were posed by WTO Members.
(a) The first question would be what is the difference between the terms "country" and
"region".  The delegate of China noted that, as a matter of fact, there are some
separate customs territories. In Chinese, the term "country" has sovereign meaning
and some anti-dumping measures have had to be imposed against products from a
separate customs territory as well as from customs unions, which are for certain notcountries.
(b) The second question would be under what conditions the price and the quantity of
sales do not permit a fair comparison.  The delegate of China stated that when the
price is below cost according to Article 2.2.1 sales of the like product in the domestic
market of the foreign country or sales to third countries at prices below per unit cost
of production plus administrative selling and general cost might be seen as not being
in the ordinary course of trade.  As to the quantity, the delegate of China notedfootnote 2 of the AD Agreement, providing that the domestic sales have to be more
than five per cent of those exports to China.
(c) The third question is that what is an appropriate third country.  Normally, to
determine an appropriate country would mean that the price has to be representative
as required by Article 2.2 of the AD Agreement.
(d) The fourth question is how to determine the reasonable amount for expenses and
profits. The delegate of China confirmed that China would comply with the rules
contained in Articles 2.2.1 and 2.2.2 for the determination of cost and profits.
43. As regards Article 5, one question was raised on paragraph 2 of Article 5, that is, under what
conditions the price will be deemed unreliable.  The delegate of China noted that China construed thisG/ADP/8
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term as what is provided for in Article 2.3, that is, the price will be deemed unreliable when there is
any association or compensatory arrangement betwee n the exporter and the importer or a third party.
44. With respect to Article 6, many Members raised the concern that the Chinese legislation did
not list all factors that may affect price comparability.  However, the delegate of China noted that
there are some provisions in Article 6 that will require the investigating authority to make adjustmentsto those factors which might affect price comparability.  In the provisional rules on initiation of anti-
dumping investigations, China listed all those factors that might affect fair comparison that are listed
in the Agreement, the difference in physical characteristics, level of trade and the quantity of sales,
etc.
45. With respect to Article 8, several questions were raised.
(a) The first concern was that from the wording of Article 8 of China's regulation, no
differentiation was made between injury.  In  other words, injury in this Article was
used as a general term, that includes material injury, threat of material injury and
material retardation.  This is why some Members were concerned that some factors
only relate to a specific type of injury determination.  They worried that the Chinese
investigating authority would apply all those factors to a single injury determination.
As he had stated, injury was used as a general term, so the Chinese authorities hadformulated all the factors that might be rela ted to an injury determination for all types
of injury.  However, in practice, the inve stigating authority, that is the SETC, would
look into those factors relating to the specific type of injury.  For example,
paragraph 4 of Article 8 only relates to the threat determination, not the current
material injury situation. In China's provisional rules on initiation of anti-dumpinginvestigations, the petitioner is required to provide a different set of data.  If Members
had had an opportunity to look at the provisional rules, they would find that
paragraph 6, that is the production capacity or export capacity of the exporting
country, only is required when the injury allegation was made on the basis of threat of
material injury.
(b) The third concern raised by WTO Members was that paragraph 3 of Article 8 did not
list all the factors that are listed in the rele vant WTO rules.  Members worried that the
Chinese investigating authority may consider fewer economic factors than those
required by the WTO Agreement.  The delegate of China first stated that the
economic factors that are listed in the AD Agreement are non-exhaustive.  That was
also the case for Article 8, paragraph 3.  In practice the investigating authority always
considers all possible economic factors and indices having a bearing on the positionof the domestic industry.
46. With regard to Article 11, the delegate of China clarified that there might be a problem of
translation.  In Chinese this Article states that if domestic producers are related to exporters or
importers they may be excluded from the domestic industry.  If one looks at the English translation,
one may have the impression that the exclusion is mandatory.  Another point is how to determine that
the domestic producers are related to exporters or importers.  The criteria China takes into account in
practice are exactly as stipulated in the AD Agreement, footnote 16.  That is, whether the domestic
producer controlled the exporter or importer or the domestic producer and the exporter or importer
jointly controlled the third person, or are controlled by the third party.  This is the same as provided
for in the AD Agreement.
47. With regard to Article 12, the question is how to determine the scope of the like product.  In
practice, China considers several factors, physical characteristics, use, marketing channels, etc. NoneG/ADP/8
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of those factors are decisive, and it has to be decided on a case-by-case basis.  The delegate of China
noted that this is the view taken by  the WTO panels and Appellate Body.
48. Coming to Article 13, some Members asked what is the meaning of "relevant organization".
The delegate of China explained that in the Chinese legal system, they have different kinds of
organizations.  Some have personality and some have no legal personality.  Looking at the wording ofArticle 13, only natural persons, legal persons are mentioned.  If there were no reference to other
relevant organizations, the provision might exclude trade associations, or trade unions from being
considered as interested parties.
49. Addressing questions concerning Article 19.
(a) The first question is the scope of the interested parties.  The scope of the interested
parties as set out in the AD Agreement is non-exhaustive in nature.  If one looks at
the wording of Article 19, it lists some of them, and then refers to other interestedorganizations and parties.  China wants to encompass as many as possible of those
interested parties and take a participating ro le in the investigations, to express their
views to enable the investigating authority to make their determinations on an
objective basis.
(b) The second question is the notification to the known exporters.  Some Members
questioned that the Chinese Government never notified the known exporters.  The
delegate asserted that this was not the case.  Indeed, in some cases, China did not
notify the known exporters.  However, when China fulfilled the obligation under the
AD Agreement, to give notification to the government of the exporting country
before the initiation of the case, China always asked the diplomatic representative tokindly notify their exporters that the Chinese Government had initiated an anti-
dumping case against them.  Those requests were always accepted, so in that case
China did not notify the exporters.  After the initiation, normally the foreign exporter
would retain a Chinese lawyer to represent them in the case.  The Chinese authorities
notified all decisions to their legal representatives.
(c) The third question is that China has no provisions on the content of the public notice.
Yes indeed, in the regulation there were not su ch rules.  However, in China, it is not
appropriate for the State Council to deal with such specific issues.  Those issues are
left to the Ministry.  When China formulated the provisional rules on initiation of the
case, China had a specific and very detailed provision on what has to be contained in
the public notice.
50. Coming to Article 20.
(a) Some Members asked whether the Chinese investigating authority would require
consent from the companies concerned before on-the-spot verification is carried out.
The answer was yes.  In every case, before Chinese officials conducted an on-the-spot
verification, they always obtained consent from the company concerned and informed
them of the time schedule of the verification.
(b) The second question was when the request for on-the-spot verification is objected to,
whether best information available would be used.  The delegate of China directed
Members' attention to Article 21.  In that Article, China did not use the words "the
investigating authorities shall  make a determination on the basis of best information
available", it used the word " may".  That means that it is not mandatory for the
investigating authority to use the best information available when the request for on-G/ADP/8
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the-spot verification is objected to.  In practice, China always tried to verify by other
means the information submitted.  If it could be verified without undue delay, China
did not resort to best information available.
(c) The third question was regarding disclosure of the result of the verification.  China
had a provisional rule on disclosure of information concerning the anti-dumpinginvestigation.  There, China had a specific procedure for disclosure of the result of
verification to the parties that verified.
(d) The fourth question was whether China had specific rules on sampling.  The answer
was yes, China did have very specific rules on sampling.
51. With regard to Article 22.
(a) The first question was what constitutes confidential information?  In accordance with
the WTO rules, that is the AD Agreement, there are two kinds of confidentialinformation.  That is, information that is confidential by nature, and the second kind
of confidential information is information that a party provides on a confidential
basis.  China does the same in practice.
(b) The second question was whether China had rules on summaries of confidential
information, to which the answer was yes.
(c) Another question was raised about the wording in paragraph 2 of Article 22.  The
regulation says that the request for confidentiality has to be "justifiable".  Some
Members raised a concern that this is different from "warranted".  The delegate of
China indicated that this was simply a matter of translation, and one can read
justifiable as warranted.
(d) The fourth question about confidential information was that whether China had rules
similar to administrative protective orders, such as are used in the United States.  The
answer was no. Confidential information is  only for the use of the investigating
authority, it is not allowed for the legal representative of parties other than the party
submitting it, to access such confidential information.
52. With regard to Article 23, the delegate of China stated that MOFTEC had established a
special office for access to public files in the investigation.  Those files were readily available to the
public, not only the interested parties.
53. With regard to Article 27, one question was raised.  China's law mentioned five circumstances
in paragraph 1, while in paragraph 2 just three were listed.  Some Members asked what the difference
is between the two paragraphs.  The delegate of China stated that paragraph 2 sets out the
circumstances in which a case had to be terminated against a specific country or region, on theproducts from that country or region, meeting the conditions stipulated in paragraph 2, 3 and 4.  The
first paragraph is talking about the termination of the whole case, to use the term of the EC, that is the
proceeding will be terminated under the circumstances of the first paragraph.  Under the second
paragraph only an investigation against a specific country will be terminated.
54. With regard to Article 28, several questions were raised.
(a) The first was the time-period of the provisional anti-dumping measure in Article 30,
and why it can be extended to 9 months.  The delegate of China directed Members'
attention to Article 38, which indicated that the final anti-dumping measure will beG/ADP/8
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decided upon by the Tariff Commission under the State Council.  What governs the
exercise of the discretion of the Tariff Commission is Article 42, that is, the amount
of the anti-dumping duty shall not exceed the margin of dumping established in the
final determination.  That is to say, although China had no explicit lesser duty rule, it
did keep such a possibility, to apply a lesser duty rule, if the Tariff Commission seesfit.  That means that the provision of Article 30, that a provisional measure can be
extended up to 9 months, is consistent with the AD Agreement.  This brought him
back to Article 28, regarding which some Members raised a question concerning the
refund of the provisional anti-dumping duty.  The delegate of China stated that first,
when the provisional duties collected have to be refunded, there are no further actions
for importer or exporter to take for the refund. MOFTEC will notify the Customs to
make those refunds.  Second, China made such refund within 90 days, according toArticle 9.3.2 of the AD Agreement.  Third, no interest will be paid on those refunds.
(b) The second question with regard to Article 28 was that China did not follow the AD
Agreement in formulating the conditions to impose provisional measures.  That is
according to Articles 7.1.1 and 7.1.3, if the injury determination is made on the basis
of threat, the threat has to be imminent and only under the circumstances that ifprovisional measures are not imposed the threat of material injury will become a
current injury.  China did not set forth such conditions in Article 28.  However, he
asked Members to note that in Article 28 China used the word may not shall .
55. With regard to Article 31, some Members raised the question that the Chinese regulations did
not stipulate that the small margin of increase of price was to be required, when the lesser increase inprice would enough to remove the injury.  However, the delegate of China noted that this was not
mandatory by nature, so China did not incorporate such provisions in its regulation.
56. With regard to Article 48, some Members asked that China did not make clear whether the
extension of anti-dumping measures will be five years.  The delegate of China stated that China
wanted to keep the possibility that it would extend an anti-dumping measure shorter than five years.With that, he stated that he had finished with the answers to specific questions.
57. The delegate of China noted that, with respect to the question raised by several Members
regarding written answers, the Chinese delegation ha d no written answers.  He noted that paragraph
18 of the Protocol of China's Accession serves as the only legal basis governing the TRM exercise,
and asserted that no one in the room could justify a request for written responses from that paragraph.
Of course, China had noticed that there were some differences in the understanding of the paragraph,
but China believed it was not the mandate of this Committee to interpret the paragraph, and he hopedthe Committee would not waste time.  The second point he made was that China believed the
information provided prior to the meeting, at the meeting, and the explanations made by his colleague,
were sufficient for a meaningful review.  China understood that it was technical, and his delegation
could agree that the statement made by the head of the Chinese delegation be submitted to the
Secretariat and Members could get copies for transparency purposes.  The third point he wanted tomake in addressing the concerns of Members was that, since the experts from China were here for the
review, Members who had any follow-up questions might approach those experts, and China would
hold informal bilateral discussions with them.  He stated that informal bilateral contacts had nothing
to do with the TRM, and China was not intending to  substitute this for multilateral exercise, but to
supplement the multilateral exercise.
58. The Chairman thanked the Chinese delegation for the detailed answers and comments
provided to the Committee, noting that Members would benefit from it.G/ADP/8
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59. The delegate of Chinese Taipei thanked the Chinese delegation for its replies, and raised two
points as follow-up.
(a) First, about Article 30 of the notified regulation.  China had replied that because the
Tariff Commission has the possibility to look into the lesser duty, the provisional
measure may be extended to nine months.  He sought clarification that it was notmerely because the Commission has the mandate to look into the matter.  That is, the
provisional measure would last for nine months only in the case where the
Commission did conduct the examination on lesser duty.
(b) The second follow-up question was about the provisional rules on initiation which his
delegation had raised in its question.  His understanding was that this provisional rule
was only available in Chinese.  His authorities had taken the effort to look into the
Chinese version, and could comprehend the provisions there.  They had found that inArticle 39 of the provisional rules on initiation, if the investigating authority intended
to conduct an on-site investigation, this intention must be announced in the Public
Notice.  His question concerned whether or not an on-site investigation would only be
conducted when it is mentioned in the Public Notice.  He recognized that the text of
the provision was not available to all Members for the time being, so would be morethan happy to wait until everybody had the notification available and have the
question outstanding at that point.
60. The delegate of the European Communities thanked China for the very extensive and very
valuable replies.   He had been quite impressed with the degree of detail which the delegate has
entered into on the various issues raised.  He did not want to enter into the issue whether there wasany legal obligation to provide written responses or  not.  He considered that the reply had been
fantastic, to use the word of the head of the Chinese Delegation, and constituted a very valuable
contribution in understanding the Chinese Anti-Dump ing Law.  Simply on that basis alone, it would
be extremely helpful to have some written record of  this because it would help for future reference.
Without entering into any discussion of obligation, he thought it would simply be helpful foreverybody here to understand the replies if they were available in written form.
61. With respect to one question put by his delegation, concerning the issue of legal
representation in case of anti-dumping proceedings, he thought China had not replied.  The question
was whether non-Chinese lawyers can make representations for exporters in the context of anti-
dumping proceedings in front of MOFTEC and SETC, and should this not be the case then the EC
would appreciate it if China could explain why not.
62. The delegate of the United States thanked the Chinese delegation for the lengthy and
comprehensive answers to the questions.  The United States did have a few follow-up questions.
(a) The first was, recognizing that the lesser duty rule is not mandatory, in what cases
had the Tariff Commission lowered the margin recommended by MOFTEC?  And
what criteria did it apply to identify the appropriate margin.
(b) The United States asked to be given an example of an other relevant organization that
would be considered legal under the Chinese system.
(c) The United States also asked whether the Tariff Commission is subject to judicial
review in the People's Court, and whet her it would be subject to the Court's
determinations?G/ADP/8
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(d) In the discussion of the questions on sampling, the delegate indicated that China does
in fact have rules on sampling.  The United States would appreciate it if China could
specify where those rules may be found.
(e) In a similar vein, in the discussion of confidential information and the need to provide
public summaries of such information, again the delegate indicated that China doeshave rules with respect to such public summaries.  Again, the United States would
appreciate it if China could specify where these rules may be found.
(f) One additional question at this time related to the delegate's discussion of notification
to known exporters.  In that discussion, if he had understood correctly, the delegate of
China seemed to indicate that China regarded notice to the government of the
exporting country as constituting notice to the exporters, and requesting that the
exporting countries government provide notice to the exporters.  The United Statesasked if China could provide some additional indication of how it believed that to be
consistent with the requirements of Article 6.1.3 of the Anti-Dumping Agreement.
63. The delegate of China briefly responded to the follow-up questions.
(a) First, with respect to legal representation in the anti-dumping investigations,
according to China's rules it is not allowed for foreign attorneys-at-law to represent
foreign exporters or other parties, to make submissions or to attend the public
hearings.  This was because China's law on attorneys-at-law does not allow a foreign
lawyer not qualified to practice law in China to act.  Since anti-dumping
investigations are quasi-judicial exercise, it is not allowed.  He noted that this was not
the appropriate forum to discuss whether foreign lawyers can represent interestedparties in an anti-dumping case – that was a matter of Trade in Services.
(b) As to the function of the Tariff Commission and the State Council, he clarified that
the Tariff Commission cannot amend the dumping margin determined by the
MOFTEC.  However, it can take a differ ent decision on MOFTEC's proposal for the
final anti-dumping measures.  That is to say, the Tariff Commission can lower theduty rate.  However, it cannot raise the anti-dumping rate above the dumping margin
determined by MOFTEC.
(c) Another point was that the Tariff Commissi on is also subject to judicial review.
(d) Regarding the rules for summaries of confid ential information, he noted that it was
not easy to formulate very detailed rules for a summary of confidential information.
He was not aware of any country which had specific rules.  What he had said was that
China had some rules on the summary of confidential information, that is, thesummary has to be meaningful to enable the other party to understand the substance
of the information submitted on the confidential basis.
(e) As to the question of notification to known exporters, in practice, it was difficult for
the Chinese authorities to find the addresses of exporters in the petitioner's
application, so it was very difficult to carry out such a notification.  However, if itwas possible to notify known exporters, the authorities would do that.
(f) With regard to Article 30 of the Chinese Anti-Dumping Regulation, he noted that the
similar article in the Anti-Dumping Agreem ent stated that whenever the competent
authorities are entitled to consider whether to impose a lesser duty, the provisional
measure can be extended to 9 months.  China did have that possibility.  Having saidG/ADP/8
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that, he clarified that in practice, China had never extended provisional measures
beyond 6 months.
64. The delegate of China noted that China understood that the questions could not be exhausted
by one TRM.  A TRM is an 8-10 year programme, and China did not expect to graduate from an 8-10
year programme in one year, so there would be many more opportunities, multilateral and bilateral.China hoped to cooperate with other Members on this issue.
65. The Chairman considered that Members recognized this to be a useful exercise.  Important
information had been presented, and everybody had learned a great deal about the Chinese Anti-
Dumping laws and the implementation of the Anti-Du mping Agreement in China.  He noted that, as
he had mentioned earlier in the meeting, the legislation that was the subject of questions today would
be on the Committee's agenda in the spring, in the regular course of business, so as the delegate of
China had said, there would be more opportunities to continue discussing these issues.
66. Turning to the Committee's report on the review, the Chairman noted that there are no
guidelines for the report contained in the Protocol.  In several other bodies that had undertaken the
transition review, the Chairman had, acting on his own responsibility, prepared a brief, factual report,
with references to the documents concerned, and at taching the portion of the minutes of the meeting
which relate to the transition review.  He asked Members whether this procedure should be followed
in the Committee.
67. The Committee so decided .
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