G/SCM/Q2/CHN/124  
 
22 January  2024 
(24-0474) Page: 1/6 
Committee on Subsidies and Countervailing Measures  Original: English  
 
  
SUBSIDIES  
QUESTIONS POSED BY THE UNITED STATES REGARDING  
THE NEW AND FULL NOTIFICATION OF CHINA1 
The following communication, dated and received on 21 January 2024 , is being circulated at the 
request of the delegation of the United States . 
 
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The United States continues to be dissatisfied by China 's underreporting of its subsidies pursuant to 
the WTO Agreement on Subsidies and Countervailing Measures, especially at the sub -central level, 
where a significant amount of subsidies are implemented.  China 's reporting of subsidies in many 
sectors continues to be woefully incomplete, particularly its wide range of fisheries subsidies – 
including, but not limited to , fishing vessel acquisition and renovation grants, grants for new fishing 
equipment, subsidies for insurance, subsidized loans for processing facilities, fuel subsidies , and the 
preferential provision of water, electricity and  land. Specifically with regard to fisheries subsidies, 
for several years, the United States has raised long -standing concerns over China 's fisheries 
subsidies programs, including through written requests for information pursuant to Article 25.8 of 
the WTO  Subsidies Agreement, as well as an Article 25.10 counter notification covering these same 
measures previously raised.   
Unfortunately, even though the United States and other WTO Members have continued to press 
China to notify all of its subsidies to the W TO in accordance with its WTO obligations, it appears that 
China has still yet to submit a complete notification of subsidies maintained by the central and 
sub-central governments.  China 's 2023 subsidies notification remains lacking in completeness, and 
appears to again overreport on certain programs lacking in relevance to trade and underreport in 
other programs that do pertain to or affect trade.  In this regard, the United States sets forth the 
following questions:  
Question 1  
A. In past submissions, we have sought additional information as to how "high-tech" is defined 
for purposes of Central Government Program 3 "Preferential tax policies for high -tech 
enterprises ", but have been referred by China to the general legislation gover ning this 
program.  Can China please further explain, beyond a reference to the underlying legislation, 
how "high-tech" is defined for purposes of this program?  
B. Further, China uses the term "high-tech" with respect to several provincial -level programs.  
Could China elaborate how "high-tech" is defined for the purposes of the following programs:  
i. Shandong Province Programs 1, 5, and 7  
ii. Henan Province Programs 11, 18, 19, and 22  
iii. Guangdong Province Programs 11, 21, 22, and 24  
iv. Guangxi Zhuang Autonom ous Region Programs 6, 9, 11, and 13  
v. Hainan Province Program 7  
vi. Sichuan Province Programs 8 and 22  
 
1 G/SCM/N/401/CHN  G/SCM/Q2/CHN/124  
 
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  Question 2 
A. With respect to Central Government Program 15 "Preferential tax treatment for energy -saving 
and new energy vehicles and vessels ", are "vessels " referring explicitly to fishing vessels?   
B. If so, please describe how incentivizing the creation of new fishing vessels is not contributing 
to fishing overcapacity.  
C. China indicates that eligibility is limited to the "new energy vehicles that are li sted in the 
Catalogue of the Models of New Energy Vehicles Exempted from Vehicle Purchase Tax. " What 
new energy vehicles that are manufactured outside of China are included in the Catalogue of 
the Models of New Energy Vehicles Exempted from Vehicle Purchas e Tax?  
Question 3  
A. As noted in past submissions, China 's subsidy notification appears to over -report 
inconsequential subsidy programs that need not be notified, and China 's responses to these 
inquiries in the past have been largely nonresponsive and/or inad equate.  Given that the 
following programs appear generally available to all enterprises, why does China believe that 
Central Government Programs 21, 22, 23, 24, 25, 26, 59, and 63 – programs benefiting 
enterprises employing the handicapped or disabled or benefitting the aforementioned classes 
of people directly, or subsidizing medicine to combat HIV -AIDS and cancer, or medicine for 
orphans – are specific under Article 2 of the Subsidies Agreement?  
Question 4  
A. As noted in previous years, under Central Government Program 27 (Preferential tax policies 
for farming, forest, animal husbandry and fishery product projects ), distant water fishing 
enterprises are completely exempt from income tax.  Is that correct?  
Questi on 5 
A. China invests in various sectors by having government guidance funds that are majority 
state-owned purchase equity in Chinese enterprises.  Pursuant to National Development and 
Reform Commission 2019 Document 1638, these investments must comply with Ch ina's 
national industrial policies, among other policies. Moreover, a report on below -market 
financing by the Organization for Economic Cooperation and Development (OECD) concluded 
that many of the government equity investments made by government guidance funds have 
not generated a return at a level consistent with the expectations of a private investor.   
In light of these facts, why has China not notified the following government guidance funds: 
(1) National IC Fund; (2) Advanced Manufacturing Industry Inv estment Fund; (3) Strategic 
Emerging Industries Guidance Fund; and (4) National IC Fund, Phase 2?  
Question 6  
A. Why is China notifying a program that provides subsidies to "registered poor people " 
(Central  Government Program 38 Promoting entrepreneurship and employment of key 
groups)?  
Question 7  
A. Are the benefits under Central Government Program 48 and Anhui Province Program 1, both 
for "development of international economy and trade, " provided by the same program 
funding?  
B. Are the benefits provided under these programs linked to exports?  If not, please explain  in 
greater detail the criteria for evaluating eligibility for the program?  G/SCM/Q2/CHN/124  
 
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  Question 8  
A. What types of industries receive benefits under Central Government Program 46 Fund for 
Energy Conservation and Em ission Reduction?   
B. Is this program limited to certain high -polluting industries , and if so, which industries?  
Question 9  
A. China reported that "project cities " are recipients of benefits under Central Program 47 
(Fund for Air Pollution Control ). Does this mean that government bodies are receiving funds 
under this program, or are enterprises or industries receiving funds?  
B. If enterprises or industries are receivin g funds under  this program , please explain what types 
of industries or enterprises receive benefits under this program.  
Question 10  
A. Under Central Government Program 49 (Special fund for the development of clean energy ), 
China notified that certain users of natural gas and hydro -power were recipients of benefits.  
What types of industries receive benefits under this program?  
Question 11  
A. Under Central Government Program 50 (Additional subsidy for renewable energy tariffs ), 
China merely noted that "grid enterprises " are recipients of benefits.  Can China explain further 
what types of industries or enterprises receive benefits under this program?  
Question 12  
A. What type of commercial enterprises are being subsidized under Central Government 
Program  60 (Preferential tax treatment for relocation from inhospitable areas for poverty 
alleviation )? 
Question 13  
A. Please explain how Central Government Programs 68 and 69 are not contributing to the 
creation of new overcapacity in the fishing industry ? 
B. How does Centra l Government Program 68 differ from the "Subsidy fund for fishery 
development and the scrapping, dismantling and renovating of vessels " program that expired 
December 31, 2019?  
C. Can you confirm that the fifth key aspect for allocation of funding under Central Government 
Program 68 includes "basic resource factors " such as the number of distant water vessels and 
their tonnage? How does subsidizing based on the number of distant -water fishing vessels 
"Reduce the intensity of offshore fishing " or any of the other listed policy objectives?   
Question 14  
A. What types of industries or enterprises receive benefits under Beijing Municipality 
Programs  1, 2, 3, and 8?  
Question 15  
A. Were the companies that benefitted from Beijing Municipality Program 6 state -owned 
enterprises?  If not, please explain  which enterprises benefitted from the program  during the 
period covered by China 's notification . G/SCM/Q2/CHN/124  
 
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  Question 16  
A. Are any of the benefits provided under Beijing Municipality Program 10 for enhancing 
"international business ca pabilities " linked to exports?   
B. If not, please explain  any criteria for eligibility for the program in greater detail . 
Question 17  
A. Under Beijing Municipality Program 11, what are considered "cutting -edge industries "? 
Question 18  
A. What types of industries or  enterprises receive benefits under Anhui Province Program 2?  
Question 19  
A. For the Shaanxi Province Program 5 (Fund for New Energy Vehicle Promotion and Application 
Projects ) and the Qingdao City of Shandong Province Program 1 (Fund for Promotion and 
Applic ation of New Energy Vehicles ), are certain models and/or brands of electric vehicles only 
eligible for these subsidies  or are the subsidies  widely available?   
B. If eligibility for either of these subsid ies is limited, please elaborate on how and/or whom it is 
limited to.  
Question 20  
A. For Gansu Province Programs 5, 7, and 9, please elaborate on what makes an enterprise 
eligible for these three programs.  
B. To the extent that that only "high-tech" enterprises are eligible, can China please further 
explain how "high-tech" is defined for purposes of each program and whether these programs 
are limited to certain "high-tech" industries and/or enterprises?  
Questio n 21 
A. For Xiamen City of Fujian Province Program 1, please explain how this program is not 
contributing to fishing or fishing -related activities that lead to the creation of new overcapacity 
or overfishing in the fishing industry.  
Question 22  
A. For the Xiamen  City of Fujian Province Program 2, please elaborate on what makes 
integrated  circuit (IC) enterprises eligible for this subsidy.  Is eligibility based on a certain chip 
size or the type of IC an IC enterprise produces?  
Question 23  
A. For the Shenzhen City of  Guangdong Province Program 4, please elaborate on what it is meant 
by "units" being eligible for this subsidy as opposed to "enterprises. " Further, please explain 
what types of industries or enterprises benefit from this subsidy.  Is this program limited t o 
certain industries?  
Question 24  
A. For the Xinjiang Uygur Autonomous Region Program 1, please specify which eligible industries 
constitute "strategic emerging industries " in this region.  G/SCM/Q2/CHN/124  
 
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  Question 25  
A. For the Shenzhen City of Guangdong Province Programs 6 a nd 7, are the funds targeted at 
certain industries with heavy pollution ( e.g., steel)?  If so, please specify which industries.  
Question 26  
A. Please explain how "green and high -quality development" is defined for purposes of 
Fujian  Province Programs 1, 2 , and 4.  
Question 27  
A. Under Fujian Province Program 3 (Special Fund for Marine Economic Development ), what sort 
of industries, projects, and activities are targeted by this program? Please explain how the 
fund is not contributing to fishing or fishing -relate d activities that lead to the creation of new 
overcapacity or overfishing in the fishing industry.  
Question 28  
A. Under Shandong Province Program 3 (Subsidy for Offshore Wind and Floating Offshore 
Photovoltaic Projects ), who is constructing these offshore win d power projects? Are the 
enterprises that benefit from this program state -owned enterprises? If not, please explain  who 
the recipients of this program are .  
Question 29  
A. For Shandong Province Program 4 (Subsidy for Biomass Power Projects ), please explain w hat 
constitutes a biomass power project and which "eligible enterprises " are involved in their 
development . 
Question 30  
A. For Shandong Province Program 8 (Reward and Subsidy for Restructuring of 
High Energy -Consuming Industries ), please specify which "eligib le enterprises " constitute 
"high energy -consuming industries ." 
Question 31  
A. For Henan Province Program 3 (Fund for Energy Conservation and Emission Reduction ), are 
the funds targeted at certain industries with heavy pollution ( e.g., steel)? If so, please specify 
which industries are eligible for these grants.  
Question 32  
A. What type of commercial enterprises are being subsidized under Hubei Province Program 1 
(Special Fund to Alleviate Poverty )? If no commercial enterprises receive subsidies under this 
program, why is a program provided to "poverty -stricken " communities incl uded in the 
notification?  
Question 33  
A. For Hunan Province Program 1 (Special Fund for Promotion and Application of New Energy 
Vehicles ), what constitutes an eligible enterprise?  Is eligibility contingent on exportation of 
new energy vehicles?  
Question 34  
A. For Guangxi Zhuang Autonomous Region Program 3 (Subsidy for Charging Infrastructure and 
Supporting Operation Services for New Energy Vehicles ), does the construction and operation G/SCM/Q2/CHN/124  
 
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  of charging piles and charging sockets result in an exportable good or service ? Please explain 
which industries are involved in these activities.  
Question 35  
A. For Sichuan Province Program 12 (Fund for Energy Conservation Emission Reduction and 
Low Carbon Development ), please explain which industries are eligible for this program, and  
what constitutes "low carbon development ." 
Question 36  
A. For the program entitled "Preferential tax policies for enterprises transferring technology ," 
(Central Government Program 5) how does an enterprise demonstrate the transferring of 
technology to become eligible for the subsidy?   
B. What forms of technology transfer are eligible for the subsidy?   
C. Are there limitations on what types of enterprise s may receive the transferred technology?  
Question 37  
A. What advanced technology service enterprises are eligible for the program entitled 
"Preferential tax policies for advanced technology service enterprises " (Central Government 
Program 8) ?  
B. How is an "advanced technology service enterprise " defined for the p urposes of this program?  
Question 38  
A. For the program entitled "Preferential tax treatment for enterprises with comprehensive 
utilization of resources ," (Central Government Program 11)  what are the "resources specified 
in the Catalogue of Comprehensive Use of Resources for Preferential Enterprise Income Tax 
Treatment? " 
Question 3 9 
A. We note that while China has made extensive use of municipal - and provincial -level subsidy 
programs to promote purchases of electric vehicles, these programs are not included in China 's 
notification2. Please provide a detailed description of all subsidies provided to producers of 
electric vehicles and all incentives to promote the purchase of electric vehicles in the following 
localities: (1) Beijing; (2) Shanghai; (3 ) Chongqing; (4) Fujian; and (5) Hunan . 
 
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2 For example, information on the programs in Beijing are detailed in 
http://bj.people.com.cn/n2/2023/0302/c14540 -40321060.html