G/SCM/Q2/CHN/46/Suppl.1  
 
21 October 2014  
(14-6066)  Page: 1/2  
Committee on Subsidies and Countervailing Measures  Original: English  
 
SUBSIDIES 
REQUEST FROM THE UNITED STATES TO CHINA 
PURSUANT TO ARTICLE 25.8 OF THE AGREEMENT 
Supplement 
 
The following communication, dated 21 October 2014, is being circulated at the request of the 
Delegation of the United States. 
 
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Two years ago, the United States submitted qu estions to China under Article 25.8 of the WTO 
Agreement on Subsidies and Countervailing Measures (SCM Agreement).1 To date, China has not 
answered those questions, despite its obligation under Article 25.9 of the SCM Agreement to 
respond "as quickly as possible and in a comprehensive manner". In the absence of a response, the United States filed a submission under Article 25.10 of the SCM Agreement listing and 
providing electronic access to translations of 110 subsidy measures that appeared as if they should 
have been notified by China.
2 For some programs in the original Article 25.8 submission noted 
above, the United States was unable to locate an underlying legal measure but noted other information indicating that a subsidy program was still in place or had been in place. For these 
programs, the United States now submits the following questions. Please provide the following 
information for each of the programmes, polici es, or implementing measures discussed below: 
 
a. Current status of the programme, policy or implementing measure;  
b. The name of the programme, policy or implementing measure (including legal citation) 
under which the subsidies are provided, the administering authority, and the policy 
objective and/or purpose of the subsidy;  
c. A description of the subsidy provided und er the programme, policy or implementing 
measure including the form of the subsidy, e.g., grants, loans, tax concessions, etc.; 
d. Duration of the subsidy and/or any other time-limits attached to it;  
e. Eligibility criteria for the subsidy; and, 
f. Please explain whether China made available to WTO Members translations into one or 
more of the official languages of the WTO each of the laws, regulations and other 
measures relating to the policies discussed, as it is obligated to do under paragraph 330 
of the Working Party Report accompanying its Protocol of Accession. If so, please identify  
where these translations can be found. If not, pursuant to Part I, Paragraphs 2(C)(1) 
and 2(C)(3), of the Protocol on the Accession of th e People's Republic of China  
(WT/L/432), please provide legal citations for and identify where  all of the laws, 
regulations and other measures of the policies discussed can be found. 
                                               
1 G/SCM/Q2/CHN/46; 29 October 2012. 
2 G/SCM/Q2/CHN/51; 21 October 2014. G/SCM/Q2/CHN/46/Suppl.1 
 
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PROGRAMME SPECIFIC QUESTIONS  1. Assistance to Semiconductor Manufactu ring International Corporation (SMIC)  
 
Based on a review of SMIC's annual reports, it  appears that SMIC has received "government 
subsidies" at least since 2009 for research and development and plant construction. 
 
2. Subsidies to Newly-Established Industrial Projects in Zhongshan's Industrial Zones  
 According to publicly available sources, local gove rnment assistance is available to companies in 
the industrial zones. Specifically, RMB 3,000 per mu  is available for companies that meet one of 
the following three criteria: (1) domestically-invested industrial projects, industrial projects, products, and technology identified as a top prio rity in the development policies of the central 
government and the province; (2) foreign-invested in dustrial projects listed as encouraged in the 
"Catalogue for Guidance of Foreign Investment Industries;" or (3) industrial projects invested in specialized industrial towns for "lighting, hardware, electrical home appliances, air conditioners, 
garment, furniture and food, and in compliance with relevant industrial policies." 
  3. Priority support rendered by the centra l government to selected local textile 
industries  
 
According to press reports, the Chinese Nation al Textile and Apparel Industry Council and 
Hangzhou Municipal Government signed a cooperation agreement in 2006 providing for a 
RMB 320 million investment to build six centers in Xiaoshan district to provide an innovation and 
service platform for textile enterprises.  
4. Subsidies to Enterprises Located in the Lianyungang Economic-Technological 
Development Area (LETDZ)  
 According to publicly available sources, local gove rnment assistance is available to companies in 
the LETDZ. Specifically, (1) VAT and consumption tax exemptions in processing zones; (2) 
preferential VAT rebates for sales of goods to enterprises in the processing zone; and (3) rebates on water, electricity, and natural gas usage. 
 
5. Chongqing Chemical Industrial  Park Preferential Policies  
 
According to publicly available sources, and as previously detailed, it appears that companies 
located in the Chongqing Chemical Industrial Park are eligible for several incentives, including some that appear to be contingent upon exportation. Specifically, income tax exemptions are provided in the first five years a company is located in the industrial park. For the sixth through 
the tenth years of operation, if a company's ex port income exceeds 60% of the company's total 
sales income, 50% of the income tax revenue retained in the district office will be returned to the enterprise. 
 
6. Northeast Socks Industrial Park locate d in Liaoyuan City of Jilin Province   
 
According to publicly available sources, local gove rnment assistance is available to companies in 
the industrial zones.   
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