G/SCM/N/372/HKG  
29 June 2021 
(21-5214) Page: 1/10 
Committee on Subsidies and Countervailing Measures  Original:  English  
 
  
SUBSIDIES  
NEW AND FULL NOTIFICATION PURSUANT TO ARTICLE XVI:1 OF THE  
GATT 1994  AND ARTICLE 25 OF THE AGREEMENT ON SUBSIDIES  
AND COUNTERVAILING MEASURES  
HONG KONG, CHINA 
The following communication, dated  and received on 28 June 2021, is being circulated at the request 
of the delegation of Hong Kong , China.  
 
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Pursuant to Article XVI:1 of the GATT 1994  and Article 25 of the Agreement on Subsidies and 
Countervailing Measures  (ASCM) , Hong Kong, China submits herewith the new and full notification  
for the fiscal year 2020 -21 (i.e. 1 April 2 020 - 31 March 2 021). In accordance with Article 25.7 of 
the ASCM, the notification of the measures concerned does not prejudge their legal status,  effects 
or nature under the GATT 1994  and the ASCM . 
1  FISHERIES DEVELOPMENT LOAN FUND  
1. Title of the programme  
Fisheries Development Loan Fund.  
2. Period covered by the notification  
Fiscal year 2020 -21. 
3. Policy objective  and/or purpose  
(a) To provide one -off loans for owners of trawlers and fish collectors affected by the trawl ban1 
to, without increasing the overall fishing efforts, upgrad e their vessels to standards required 
for their continued operational needs , switch to more sustainable fisheries operations and 
other fisheries -related operations, or carry out projects that will reduce fuel consumption or 
the carbon footprint of their operations . The deadline of application was 31.12.2015 ; 
(b) To provide loans for capture fishermen and owners of fish collectors to, without increasing the 
overall fishing efforts, switch to more sustainable fisheries operations and other fisheries -
related operations, or carry out projects that will reduce fuel consumption or the carbon  
footprint of their operations ; and 
(c) To provide loans that help fish farmers develop aquaculture , or improve their aquaculture 
businesses leading to more environmentally friendly  operations or better aquaculture products 
in terms of quality and food safety standards.  
 
1 All trawling activities in Hong Kong waters have been banned since 31 December 2012.  G/SCM/N/372/HKG  
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  4. Background and authority  
The Fund is administered by the Agriculture, Fisheries and Conservation Department  (AFCD)  to 
facilitate the sustainable development of the fisheries industry.  
5. Form 
Loan. 
6. To whom and how the assistance is provided  
Applica nts for loans under 3(a) and 3(b) above must be Hong Kong residents and owners of local 
fishing vessel s or fish collector s, holding valid licences necessary for their operations ; or locally 
registered fisheries co -operative societies/companies with the majority of their 
members/shareholders being local capture fishermen who fulfil the aforementioned criteria . 
Applicants for the loans under 3(a)  also have to prove that they are genuinely affected by the trawl 
ban. 
Applicants for loans under 3(c) above must be Hong Kong residents, holding valid licences necessary 
for operating their aquaculture businesses ; or locally registered fisheries co -operative 
societies/companies with the majority of their members/shareholders being local aquaculture 
operators who fulfil the aforementioned criteria.  
An interest rate of 1% per annum  is applied to the  loans under 3(a) above ; 2.5% per annum  for the 
loans under  3(b) above ; and at an interest rate based on the "No Gain No Loss" principle of the 
Hong Kong Special Administrative Region (HKSAR) Government for the loans under 3(c)  above . The 
"No Gain No Loss" rate is set by taking into account factors such as the best lending rate s of the 
note-issuing banks in Hong  Kong.  
A one -off interest -free deferral of loan repayment for a period of one year from 1 May 2 020 to 
30 April 2 021 was granted to loan borrowers of the Fund for helping them tide over the period  with 
financial hardships amidst the  COVID -19 pandemic . During the period, they did not need to repay 
their loan instalments  and no  interest would  be accrued . Their repayment period would  also be 
extended accordingly.  
7. Amount  
HKD 25,645,000. 
8. Duration  
On-going , except for 3(a) above  which is no longer open for application and will be terminated when 
all outstanding  loans are repaid . 
9. Statistical  data permitting an assessment of the trade effects  
Not available . 
2  FISH MARKETING ORGANIZATION LOAN FUND  
1. Title of the programme  
Fish Marketing  Organization Loan Fund.  
2. Period covered by the notification  
Fiscal year 2020 -21. G/SCM/N/372/HKG  
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  3. Policy objective and/or purpose  
Without increasing the overall fishing efforts, to provide loans for fishermen to meet their operational 
and sustainable development needs, including  the repair and replacement of fishing vessels, gear 
and equipment ; assisting fishermen to tide over the annual fishing moratorium.  
4. Background and authority  
The Fund is set up by the Fish Marketing Organization ( FMO), a statutory body established under 
the Marine Fish (Marketing) Ordinance (Cap. 291), with funding /injections from both FMO and the 
HKSAR Government . AFCD and FMO are involved in the administration of the Fund.  
5. Form 
Loan.  
6. To whom and how the assistance is provided  
Applicants must be a member of a registered fishermen's co -operative society or a registered fishing 
company, or a local fisherman who:  
• holds a valid fishing vessel licence issued by the Marine Department;  
• is a bona fide fisherman ; 
• markets or intends to market his catches through FMO ; and 
• fulfils other requirements as specified by FMO.  
There are two types of loans that may be granted under the Fund : (a) general loans, and ( b) special 
one-year loans for fishermen affected by the annual fishing moratorium in the South  China Sea . The 
interest rates applicable in the fiscal year 2020-21 were as follows:  
(a) general loans : 2.833% per annum  for individual fishermen, and 1.333 % per annum  for 
members of registered co -operative societies  (as at 31.3.2021); 
(b) special one-year loans : 1% per annum . 
7. Amount  
The amount of loans issued  for the special one -year loans and general loans were HKD 99,270,000  
and HKD 180 ,000 respectively . 
8. Duration  
On-going . 
9. Statistical data permitting an assessment of the trade effects  
Not available . 
3  KADOORIE AGRICULTURAL AID LOAN FUND  
1. Title of the programme  
Kadoorie Agricultural  Aid Loan Fund.  
2. Period covered by the no tification  
Fiscal year 2020 -21. G/SCM/N/372/HKG  
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  3. Policy objective and/or purpose  
To provide loans for fish farmers and farmers to meet  development and working capital  needs, 
including the purchase of necessary inputs for production such as stocks , fry and feed, as well as 
improvement of farm facilities for enhancing productivity.  
4. Background and authority  
The Fund is established  under the Kadoorie Agricultural Aid Loan Fund Ordinance (Cap. 1080) with 
donations/injections from both non -government sources and the HKSAR Government.  
5. Form 
Loan. 
6. To whom and how the assistance is provided  
Applicants must be fish farmers and farmers and the interest rates applicable in the fiscal year 
2020-21 were as follows:  
• loans not exceeding HKD 200 ,000: 0.00075 % per annum  for development capital, and 
0.001 % per annum  for working capital ; and 
• loans exceeding  HKD 200,000: 4.0833 % per annum . 
7. Amount  
HKD 960 ,000. 
8. Duration  
On-going . 
9. Statistical data permitting an assessment of the trade effects  
Not available . 
4  SUSTAINABLE FISHERIES DEVELOPMENT FUND  
1. Title of the programme  
Sustainable Fisheries  Development Fund . 
2. Period covered by the notification  
Fiscal year 2020 -21. 
3. Policy objective and/or purpose  
To fund programme s, projects and research that would contribute to fostering the sustainable 
development of the fisheries industry and bring benefits to the operations of the local fisheries  
community as a whole . Projects that may benefit from the Fund include those that provide technical 
assistance and training in fishing operations, support for fishermen to switch to other fisheries or 
sea related operations following implementation of the trawl ban in Hong Kong waters since 
December 2 012, assistance for local fishermen and aquaculturists  to modernise their operations and 
monitoring and assessment of the effectiveness of the sustainable fisheries management measures 
implemented in Hong  Kong. In general, projects should be non -profit making in nature . G/SCM/N/372/HKG  
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  4. Background and authority  
The Fund is administered by the AFCD . 
5. Form 
Grant . 
6. To whom and how the assistance is provided  
(a) Legal entities  which should be a company incorporated in Hong Kong  under the  Companies 
Ordinance (Cap. 622) and has substantial connection to  Hong Kong  or a body corporate 
incorporated in Hong Kong  under  other Ordinances of the HKSAR , and having demonstrated 
a close con nection with the fisheries  industry in Hong Kong. These include local registered 
fisheries  co-operatives, non -profit  making fisheries organi sations, non -governmental  
organi sations or social enterprises ; and 
(b) Academic and research  institutions in Hong Kong . 
An application fulfilling the assessment criteria will be considered, vetted and awarded on its 
individual  merits (including the efficacy  of the project and the capacity and capability of the 
applicant) . If there are initiatives  that aim to demonstrate the technical feasibility and commercial 
viability of new fisheries practices which may subsequently be transferred to other stakeholders 
within the fisheries industry, such initiatives with commercial elements will be funded on a dollar -
for-dollar matching basis, with the HKSAR Government's total contribution capped at the applicant's 
total contribution . The HKSAR Government will recoup the cost commensurate with its share of 
contribution.  
7. Amount  
HKD 38 ,162,000 . 
8. Duration  
It is open for applications since July 2 014. The Fund has an approved commitment of HKD 500  million. 
Its continuation  is contingent upon the availability of fund s. 
9. Statistical  data permitting an assessment of the trade effects  
Not available . 
5  SUBSIDIES FOR FISHING VESSELS WITH MAINLAND DECKHANDS  (UNDER THE 
ANTI -EPIDEMIC FUND ) 
1. Title of the programme  
Subsidies for Fishing Vessels with Mainland Deckhands . 
2. Period covered by the notification  
Fiscal year 2020-21. 
3. Policy objective  and/or purpose  
To provide immediate relief to the owners of the fishing vessels and fish collectors with Mainland 
deckhands, the operation  of whom were seriously affected by the COVID -19 pandemic.  G/SCM/N/372/HKG  
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  4. Background and authority  
The Anti -epidemic Fund was established under the F inancial Secretary Incorporation Ordinance 
(Cap.  1015) to  − 
(a) enhance the capability of government bureaux and departments as well as other relevant 
parties in combating the epidemic ; and 
(b) provide assistance or relief to enterprises and members of the public hard hit by the present 
epidemic or affected by anti -epidemic measures.  
Most of the Hong Kong fishing vessels and fish collectors rely on deckhands from the Mainland China 
in their operation . Due to the COVID -19 pandemic, the Mainland deckhands were  unable to report 
duty, and the vessels  concerned were unable to operate for a prolonged period of time . The relief 
measure  to the owners of fishing vessels or fish collectors with Mainland deckhands under the 
Anti-epidemic Fund is administered by the AFCD . 
5. Form 
Grant . 
6. To whom  and how the assistance is provided  
The relief was provided to the owners of the fishing vessels and fish collectors  meeting the following 
criteria : 
• the applicant is the owner of a Class III vessel licensed under the Merchant Shipping 
(Local  Vessels) (Certification and Licensing) Regulation (Cap. 548D) , i.e. fishing vessel, fish 
carrier, fishing sampan and outward open sampan ; 
• the vessel on application holds a valid M ainland permit ; and 
• the applicant  employs Mainland deckhands on the subject vessel.  
The relief was provided  to eligible applicants as follows - 
• HKD 200,000 for each vessel of 25 metres or above in length ; and 
• HKD 80 ,000 for each vessel of less than 25 metres in length.  
7. Amount  
The total amount of special  one-off relief issued was HKD 223 ,280,000 . 
8. Duration  
Application for the relief was open since 5 March 2 020 and closed on 1 7 April 2 020. 
9. Statistical data permitting an assessment of the trade effects  
Not available . 
6  SUBSIDIES FOR LOCAL PRIMARY PRODUCERS (UNDER THE ANTI -EPIDEMIC FUND ) 
1. Title of the programme  
Subsidies for Local Primary  Producers . G/SCM/N/372/HKG  
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  2. Period covered by the notification  
Fiscal year 2020-21. 
3. Policy objective  and/or purpose  
To provide immediate financial  relief to local primary producers, the business or operation of whom 
has been affected by the COVID -19 pandemic.  
4. Background and authority  
The operation and business  of local primary producers h ave been affected by the serious and 
prolonged impact of the COVID -19 pandemic on the food business sector . The relief measures was 
established under the Anti -epidemic Fund ( details are set out in Item 5 above) . It is administered 
by the AFCD . 
5. Form 
Grant . 
6. To whom and how the assistance is provided  
Local primary producers (including owners of vegetable farms, hydroponic farms, flower farms and 
nurseries, marine fish culture farms, pond fish culture farms, fishing vessels  and fish collector 
vessels, but excluding livestock farms)  may apply for the relief. Grants are provided to applicants 
meeting the relevant eligibility criteria . A one-off grant of HKD 10 ,000 was provided to each eligible 
local primary producer.  
7. Amount  
The amount  of fund approved  for the fiscal year 20 20-21 was HKD 71,450,000 . 
8. Duration  
Application for the relief was open since 25 April 2 020 and closed on 1 June 2 020. 
9. Statistical data permitting  an assessment of the trade effects  
Not available . 
7  LOCAL MASK PRODUCTION SUBSIDY SCHEME  (UNDER THE ANTI -EPIDEMIC FUND)  
1. Title of the programme  
Local Mask Production  Subsidy Scheme ( LMPSS ). 
2. Period covered by the notification  
Fiscal year 2020-21. 
3. Policy objective  and/or purpose  
To provide financial incentives to facilitate the establishment of mask production facilities in 
Hong Kong so as to address the severe shortage situation and to build up stock . 
4. Background and authority  
Due to  the spread of t he COVID -19 worldwide, the demand for masks has surged significantly, 
aggravating the acute supply shortage situation in Hong Kong which largely relies on import for 
masks and driving up prices.  G/SCM/N/372/HKG  
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  The support scheme was established under the Anti -epidemic Fund (details are set out in Item 5 
above) . The Hong Kong Productivity Council (HKPC), a statutory body established under the 
Hong Kong Productivity Council Ordinance, has been commissioned to act as the Secretariat to 
administer the LMPSS . 
5. Form 
Capital support  and procurement of masks  calculated on the basis of actual costs incurred.  
6. To whom and how the assistance is provided  
All companies registered in Hong Kong with a valid Certificate of Incorporation issued by the 
Companies Registry and a vali d Business Registration Certificate issued by the Inland Revenue 
Department are eligible to apply for support under the LMPSS . 
(a) The HKSAR Government  provides capital support  to a maximum of 20 production lines, 
covering cost items relevant to the establishment of a mask production line (i.e. production 
equipment, venue setup, clean room setup, and testing and standard compliance costs) . 
Based on the actual costs of setting up  mask production facilities in Hong Kong, a grant of up 
to HKD 3 million  may be given to each factory for setting up one production line of masks, 
while an additional grant of up to HKD 2 million  may be given for an additional production line 
of the same g rantee . The ceiling of grant amount for each production line is based on the 
committed monthly production output . The capital support is disbursed in four instalments, 
depending on the progress of establishing the production lines and production outputs.  
(b) In addition, the HKSAR Government  procures up to two  million  masks from each production 
line every month for one year . The price of the masks is set with reference to major production 
costs and the grantees have to submit documentary proof for verification purposes.  
7. Amount  
In the fiscal year 2020 -21, the HKSAR Government has disbursed a total of HKD 14 ,600,000  capital 
support to the 20 production lines . The production lines have supplied to the HKSAR Government a 
total of 372.9  million  masks . The procurement price of the masks will be set with reference to the 
production costs of individual grantees after verification of documentary proof.  
8. Duration  
The LMPSS  was launched in March 2 020. The quota of 20 production lines has been exhausted and 
applica tion is now clo sed. 
9. Statistical  data permitting an assessment of the trade effects  
The amount of capital support disbursed to the 20 production lines and the number of masks 
delivered to the Government are available at the dedicated website of the HKPC 
(https://www.hkpc.org/en/our -services/additive -manufacturing/latest -information/hkpc -mask -
production -support ) and will be updated monthly.  
8  CHINESE MEDICINE DEVELOPMENT FUND  
1. Title of the programme  
Chinese Medicine  Development Fund . 
2. Period covered by the notification  
Fiscal year 2020-21. G/SCM/N/372/HKG  
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  3. Policy objective  and/or purpose  
To enhance  the overall standards of the Chinese medicine (CM) industry , encourage CM -related 
scientific research , and promote public knowledge and understanding of CM.  
4. Background  and authority  
The Fund was established in June 2 019 with a non -recurrent commitment of HKD 500 million  by the 
HKSAR Government . It is managed by the Food and Health Bureau . An Advisory Committee has 
been set up to advise and make recommendations to the HKSAR Government on matters relating to 
the overall administration  and operation of the Fund . Two funding programmes have been 
established under the Fund.  
Enterprise Support Programme  
It provides matching funds for individual Chinese medicine practitioners (CMPs) and clinics, members 
of the CM industry and CM drug traders to enhance the professional and manufacturing standards 
as well as management quality of CM drug and help them with registration of proprietary 
Chinese  medicines (pCms) in accordance with statutory requirements, such as offering technical and 
hardw are support to manufacturers of pCms to assist them in conforming with the Good 
Manufacturing Practices (GMP) standard.  
Industry Support Programme  
It provides funding for non -profit -making organisations, professional bodies, trade and academic 
associations  and research institutions to support training programmes and courses to nurture talent 
for the future Chinese Medicine Hospital and facilitate development of CM, conduct applied or policy 
research on CM, and organise various CM promotional activities.  
As technical support to the CM industry, a CM resources platform has been established under the 
Fund to provide practical information.  
5. Form 
Grant. 
6. To whom and how the assistance is provided  
Enterprise Support Programme  
It provides financial  support  to the fol lowing:  
(a) CMPs and persons  engaged in the CM drug industry for training to enhance professional 
capabilities;  
(b) CM clinics  to improve clinic facilities;  
(c) CM drug traders to improve warehouse and logistics facilities ; and 
(d) manufacturers to enhance manufacturing quality and management systems of pCms in 
conforming with the GMP standard  and manufacturers/wholesalers to register pCms in 
accordance with statutory requirements.  
Approved funding  is provided on a reimbursement basi s with the following funding limits:  
• for (a), the funding  ratio is 60 % or 90% with funding limit ranges from HKD 1 ,000 to 
HKD 60,000 per person depending on the nature of the courses;  
• for (b), the funding ratio is 50 % or 80% depending on the nature of the facilities with funding 
limit capped at HKD 25 ,000 per clinic;  G/SCM/N/372/HKG  
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  • for (c), the funding ratio is 50 % or 80% depending on the nature of the facilities with funding 
limit capped at HKD 100 ,000 per licensee ; and 
• for (d), as far as  enhancement of manufacturing quality and management systems of pCms 
is concerned, the funding ratio is 50 % or 90% with funding limit ranges from HKD 30 ,000 to 
HKD 600 ,000 per manufacturer under various schemes depending on the nature of subsidised 
items . For facilitation of pCm registration, the funding ratio is 50 % with funding limit  capped 
at HKD 20 ,000 for each pCm and HKD 200 ,000 for each pCm manufacturer or wholesaler . 
Industry Support Programme  
It provides  financial support to non-profit -making organisations, professional bodies, trade and 
academic associations and research institutions , either a statutory organisation or an organisation 
registered under the laws of Hong Kong.  
Approved funding is provided either in advance (by instalment) or on a  reimbursement basis, 
depending  on fulfilment of certain administrative requirements . It funds up to 100 % of approved 
subsidised items, with the following funding limits:  
• A funding limit of HKD 2 ,750,000 per application relating to CM industry training programmes;  
• A funding limit of HKD 750 ,000 per application relating to CM promotion ; and 
• A funding limit of HKD 2 ,000,000 per application relating to CM applied studies and research . 
7. Amount  
In the fiscal year 2020-21, around  HKD 42 ,000,000  of fund was approved . 
8. Duration  
On-going.  
9. Statistical  data permitting an assessment of the trade effects  
Not available . 
 
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