G/SCM/Q2/CHN/90  
20 August  2020 
(20-5703) Page: 1/6 
Committee on Subsidies and Countervailing Measures  Original:  English  
 
  
SUBSIDIES  
QUESTIONS FROM THE EUROPEAN UNION  REGARDING  
THE NEW AND FULL NOTIFICATION OF CHINA1 
The following communication, dated 19 August  2020, is being circulated at the request of the 
delegation of  the European Union.  
 
_______________  
 
 
Central Government level  
Scheme 5  – Preferential tax policies for high or new technology enterprises  
Question 1  
Can China please list what are the "high or new technology enterprises " covered by this tax policy 
and in what legislation/guidelines are they defined?  
Scheme 17 – Preferential VAT on photovoltaic generated electricity  
Question 2 
The notification states under "To whom is the subsidy provided " – The electricity produced by solar 
energy . Could China please clarify who is the actual recipient of the subsidy under this scheme?  
Scheme 33  – Preferential tax policies for projects of agricultural, forestry, animal and 
fishery  
Question 3 
Can China please explain how this preferential tax regime works? What are the thresholds on the 
amount of enterprise income that can benefit from this preferential regime? What is the normal tax 
rate and the preferential tax rate under this scheme?  
What are the "stipulated projects of  preliminary processing " which are covered in the fishery sector?  
Is it possible for the benefits under this scheme to be cumulated with those under those of 
Scheme  74 – Preferential tax policies for enterprises engaged in projects of agricultural, forestr y, 
animal and fishery. What is the difference between these two schemes?  
Scheme 41 – Tax preferences for the integrated circuit (IC) industry  
Question 4 
Can China clarify if this scheme along with the  "Fund for developing the software and IC design 
industr ies – Hengqin New District, Zhuhai City, Guangdong Province " are the only two schemes it 
 
1 G/SCM/N/343/CHN.  G/SCM/Q2/CHN/90  
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  has related to the IC industry? Are there any other such schemes which may not have been included 
in the notification such as the SMIC  – National IC Industry Investmen t Fund?  
Scheme 56  – Fund for development of strategic emerging industries  
Question 5 
Can China confirm that this scheme ended in 2017 and that there were no payments under this fund 
for 2018?  Can China please clarify which industries received funding under this fund?  
Has China replaced this fund with a different fund for strategic emerging industries?  To what extent 
the local government financial semis (LGFV) have been involved in strategic emerging industry 
related projects? If so, where are t hese reported in the notification for 2018?  Various press reports 
refer to a $47bn fund launched in 2018 in the context of Made in China 2025 and the 13th Five ‐Year 
Plan for SEIs. Can China please provide information on the amount of funding and nature of  funding 
schemes provided to SEIs in 2018?  
Can China provide information regarding the China Guidance Investment Fund for New and Emerging 
Industries and Business Creation which was set up in July  2016: RMB 17.85  billion Target: 
RMB 40 billion as well as t he National Fund for the Development of Strategic and Emerging 
Industries  - Target RMB 300  billion and the relationship between these funds and Scheme 56 in the 
notification.  
Scheme 58 – Reward for Public -Private -Partnership projects (PPP)  
Question 6 
Can C hina please list what are the eligible projects under this scheme?  
What are the conditions for receiving this funding?  
Scheme 59  – Fund for industrial transformation and upgrading.  
Question 7 
Can China please provide the amounts applicable under this scheme for 2017 and 2018. What is the 
amount allocated under the budget for this fund? What are the ten largest payments made under 
this fund and to which companies were the payments made?  
What measures are in place to ensure that "innovative capacity buil ding" is not used to build capacity 
in industries where there are efforts to cut capacity, such as steel sector for example?  
Scheme 60  – Reward and support fund for restructuring of industrial enterprises  
Question 8 
To whom is the funding under this scheme  paid – the enterprise or the employees affected by 
capacity reduction? What are the conditions attached to receiving such funding? Are there controls 
on what this funding can be used for by the enterprises?  
Can China explain the significant drop between f unding for 2017 and 2018?  
Scheme 74  – Preferential tax policies for enterprises engaged in projects of agricultural, 
forestry, animal and fishery.  
Question 9 
Please explain the "stipulated projects " for fisheries that can benefit from this scheme?  G/SCM/Q2/CHN/90  
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  Scheme 75  – Fishery stocks enhancement and fish fries releasing.  
Question 10 
Is the amount of RMB 398.5  million available for each year or the total amount of funding available 
under the program?  
Please exp lain the term "whole funds + task list" – what does this mean in practice?  
Which local governments receive funding under this scheme? Is there a breakdown available of how 
much of funding is granted to the various local governments?  
Do the individual sub -central local governments report this scheme individually? For example, what 
is the relationship with this scheme and the one reported by Zhejiang Province  – Fund for marine 
and fishery comprehensive management and industry development, which also covers fi shery stocks 
enhancement?  
Scheme 77  – Subsidy for scrapping and dismantling vessels and for ship type 
standardization (2017); Subsidy fund for fishery development and the scrapping, 
dismantling and renovating of vessels (2018).  
Question 11 
In the context o f assessing the trade effects of the scheme can China advise how many vessels, of 
the 20,000 target, have been dismantled under this scheme? Has this led to a drop in fishing 
volumes  - if so, how much?  
What arrangements, other than the letter of commitment  that the vessel owner must provide, ensure 
that the funding will not be used to refurbish the existing vessel or build another vessel?  
What safeguards exist to ensure that renovated vessels, which presumably would become more 
efficient, do not contribute to an increase in fishing volumes?  
Question 12 
Under MIC 2025, China released in 2016 a  "Specific programme to foster Manufacturing champions ". 
In 2019, the Ministry of Industry and Information Technology (MIIT) and China Federation of 
Industrial Economics  (CFIE) released the Fourth batch of champion manufacturing enterprises and 
products, in the context of the "Specific programme to foster Manufacturing champions ". Can China 
please advise if the previous batch under this scheme was notified to the WTO? Und er this program 
was there funding for 2017 and 2018? Will China notify the scheme if it not already included in 
previous notifications? What are the industries involved in this program?  
Question 13 
Apart from the specific subsidy schemes aimed at reducing overcapacity in the steel sector could 
China please identify which other schemes in the notification include support for the steel sector?  
Subsidies at the sub -central level  
Fisheries sector  
Question 14 
At a sub -central level there are only two schemes notified relating to the scrapping and dismantling 
of vessels: Chongqing Municipality - Subsidy for scrapping and dismantling vessels and Dalian City, 
Liaoning province - Subsidy for scrapping and dismantling vessel s and for ship type standardization. 
Can China confirm that these are the only two provinces with schemes for the dismantling of fishing 
vessels? Can China confirm that all provinces have notified such subsidies relating to the scrapping 
and dismantling of  vessels?  G/SCM/Q2/CHN/90  
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  Question 15 
In the subsidy notification that China made to the WTO in 2018 (G/SCM/N/315/CHN), the 
Scheme  2.38 - Fund in support of leading fishery enterprises of Tianjin Municipality stated that the 
duration of the subsidy was from 2016 - 2019. H owever, there is no such fund reported for the 
Tianjin Municipality in the 2019 notification. Can China please provide details of the amounts paid 
under the scheme in 2017 and 2018?  
Strategic emerging industries  
Question 16 
Funds for development of strateg ic emerging industries(SEIs).  
The EU noted seven Funds for development of SEIs in China's notification for the following regions: 
Hebei Province, Shanghai Municipality, Fujian Province, Zhongshan City of Guangdong Province, 
Gansu Province, Xinjiang Uygur a nd Shenzhen City of Guangdong Province.  
Could China please provide the amounts payable under these schemes for 2017 for Hebei Province 
(Scheme 15) and Shenzhen City of Guangdong Province (Scheme 2)?  
Could China please provide the amounts of these funds for  both years 2017 and 2018 for Gansu 
Province (Scheme 7) and Xinjiang Uygur (Scheme 3).  
Can China explain why the following SEI funds are not included in the notification:  
HUBEI Province's Governmental Industry Guiding Fund  
- Source: http://www.gov.cn/xinwen/2017 -11/22/content_5241521.htm  
JIANGSU PROVINCE - strategic emerging industry development investment fund.  
- Source:  http://www.mof.gov.cn/xinwenlianbo/jiangsucaizhengxinxilianbo/  
201908/t20190801_3340314.htm  
SHANDONG Guidance Fund for strategic emerging industries  
- Source : http://www.gov.cn/zhengce/2015 -09/25/content_5044504.htm  
New materials  
Question 17  
The development of new materials is one of China's priorities. In 2016, in order to implement 
the 13th FYP and MIC2025, China MIIT/NDRC/MOST/MOF published a the "New materials industry 
development guide" 2016/ 454 and encouraging fiscal and financial suppo rt to the sector. At a 
sub-central level there are only 4  schemes relating to Support for the development and upgrading 
of new materials production included in the notification.  
- Heilongjiang Province - Fund for the new metal material industry  
- Zhenjiang Cit y, Jiangsu Province - Grant for supporting the upgrading of new material 
manufacturing industries  
- Shaanxi Province - Fund for the development of new materials  
- Xixian New District, Shaanxi Province - Fund for foreign investment attraction  
Can China please provide a list of the eligible new materials covered by these schemes? Are there 
no schemes at central level relating to the development of new materials? Given the development 
of new materials is a priority for China, can China confirm that the schemes notified represent the 
full extent of the schemes/funding available in 2017 and 2018?  G/SCM/Q2/CHN/90  
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  New energy vehicles  
Question 18 
New energy car industry is one of the 10 industries identified under China's 2016 S trategic and 
emerging industries and new energy cars is one of the ten sectors covered by China 2025. Can China 
please identify which of the schemes notified both at central and sub -central level fall under funding 
for 2016 Strategic and emerging industrie s or funding for China 2025? Do the schemes notified 
represent the full amounts allocated under China's 2016 Strategic and emerging industries and 
China  2025?  
At Central level there are two preferential tax policies notified relating to new energy vehicles  
NEV (No. 20) and low -emission cars (No.  21) respectively. At sub -central level there are 22 schemes 
reported. For many of the schemes no funding amounts are given. Could China please provide the 
amounts which are missing under the following schemes: Beiji ng Municipality: Nos.  4 & 5, Tianjin 
Municipality: No.  9; Shanxi Province: Nos.  1 & 3; Jilin province: Nos 9; Heilongjiang Province: No.  6; 
Jiangsu province: Nos.  15 and 18; Zhejiang Province: No.  3; Guangxi Zhuang Autonomous Region: 
No. 2; Shaanxi Provinc e: No 9.  
Other  
Schemes in Beijing Municipality : 
- Reward for promoting the PPP model – what are the eligible projects under this 
scheme?  
Schemes in Tianjin Municipality : 
- Grant for projects that promote transformation and trading of scientific and 
technologic al research results - what are the eligible projects under this scheme?  
- Nankai District : Fund supporting the development of scientific and technological 
industry/what are the eligible enterprises?  
- Binhai New Area: Fund for hi -tech enterprises – can China p lease provide a list of 
the "Certified national hi -tech enterprises "? 
Schemes in Hebei Province : 
- Shijiazhuang City: Special reward for the restructuring of industrial enterprises – 
what are the criteria to qualify for this funding? What are the eligible industries?  
- Tangshan City: Fund for development of emerging industries – Please provide a list 
of what are considered emerging industries under this scheme?  
Schemes in Heilongjiang Province : 
- 3. Reward for technology trading & 4. Fund for technolog y transfer: What 
enterprises is this fund paid to? What are the qualifying criteria for funding?  
- Harbin city: 8. Grant for the biomedicine industry – Is this funding granted under 
the Made in China 2025 program? Does the scheme Subsidy supporting the 
devel opment of biomedicine industries under Shanghai Municipality: Minhang 
District fall under MIC 2025 also? Can China confirm that the 2019 WTO notification 
covers all schemes both at central level and sub -central level for the biomedicine 
sector?  
- 11. Suifenh e City - Grant for economic development: Who are the eligible 
enterprises and what are the criteria to qualify for grants under this scheme?  G/SCM/Q2/CHN/90  
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  Schemes in Shanghai Municipality : 
- Schemes 8. and 9 - Hongkou  District: What are the eligible industries under these 
schemes?  
Schemes in Henan Province : 
- 3. Fund for promoting transformation and development: What are the eligible 
enterprises? What are the amounts for 2017 and 2018?  
Schemes in Hunan Province : 
- 3. Fund for industrial  transformation and upgrading. What are the eligible 
enterprises? What are the amounts for 2017 and 2018?  
Schemes in Ningxia Hui Autonomous Region : 
- 1. Fund for new industrialized development projects – what enterprises are eligible 
for fundin g? 
Schemes in Shenzhen City of Guangdong Province : 
- 20. Fund for industrial development – Can China clarify if the amount given of "No 
more than 5  million yuan" relates to individual years or individual projects?  
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