WORLD TRADE  
ORGANIZATION   
G/SCM/Q2/CHN/45 
10 October 2012 
 (12-5509) 
Committee on Subsidies 
and Countervailing Measures Original:   English 
 
 
 
SUBSIDIES 
 
Questions Posed by JAPAN Regarding the 
New and Full Notification of CHINA1 
 
 
 The following communication, dated 9 October 2012, is being circulated at the request of the Delegation of Japan. 
 
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General 
 
Question 1  
While we appreciate the second notif ication of China (G/SCM/N/155/CHN-
G/SCM/N/186/CHN), the second notification covers onl y those programmes granted or maintained at 
the central government level from 2005 to 2008.  Wh en does China plan to submit notification which 
covers the subsidies granted or maintained fro m 2009 to 2010?  Why do notifications by China 
always cover 5-year terms? 
 
Question 2 
 
 At the Committee meeting in October 2011, the delegate of China explained to the Committee 
that China would work towards incorporating local  programmes into the notification (G/SCM/M/79).  
When does China plan to submit notification which includes the programmes granted or maintained at 
both the central and the local government level?  
 
Preferential tax policies for enterprises with fo reign investment recognized as high or new 
technology enterprises established in the State high or new technology industrial development 
zones (No. 8) 
 
Preferential tax policies for enterprises recogn ized as high or new technology enterprises 
established in the State high or new technology industrial development zones (No. 9) 
 
Preferential tax policies for high or new technology enterprises (No. 10) 
                                                      
 1 G/SCM/N/155/CHN-G/SCM/N/186/CHN.  G/SCM/Q2/CHN/45 
Page 2  
 
  Question 3 
  Please explain what kind of 'high or new technolog y' is subject to the subsidies.  If there are 
any differences in the definition of 'high or ne w technology' between these three subsidies, please 
explain these differences.  
Question 4 
  Please explain the details of the eligibility criteri a to receive these subsidies other than those 
described in paragraph 7.  "To whom  and how the subsidy is provided". 
 Question 5 
 
Were the enterprises benefited from programmes No.8 -1) and No.9 -1) also eligible for 
programme No. 10 after January 2008?  
 
Question 6 
 
 With regard to programme No. 8, there is  seemingly the same programme in the previous 
notification (G/SCM/N/123/CHN), 'Preferential tax policies for enterprises with foreign investment 
recognized as high or new technology enterprises established in the State high or new technology 
industrial development zones, and for advanced te chnology enterprises invested in and operated by 
foreign business', hereinafter called "No. 8 of G/SCM/N/123/CHN".  In programme No. 8 of 
G/SCM/N/123/CHN, advanced technology enterprises invested in and operated by foreign businesses 
were provided with preferential ta x treatment.  This preferential treatment does not appear in 
programme No. 8 of G/SCM/N/155/CHN.  Was this part of the preferential treatment terminated 
before April 2006, when China made the notification G/SCM/N/123/CHN?   
Special fund for the industrialization of wind power equipment (No. 26) 
 
Question 7 
 
 Please explain the details of 'domestically controlled enterprises' (paragraph 7).    
Preferential tax policies for the research and development of enterprises (No. 40) 
Preferential tax policies for the research and development of enterprises (No. 41) 
Preferential tax policies for the research and development of enterprises (No. 42) 
 
Question 8  
 According to the notification, the duration of No. 40 is from 2003 to the end of 2005, and that 
of No. 41 is from 2006 to the end of 2007.  No. 42 is  from 1 January 2008 to 'present'.  Are these three 
the same series of subsidies?  Please explain the relationship between these three. 
 
Question 9  
 Please explain what kind of research and development is subject to these three subsidies.  
Please explain the details including the differences between the three.  G/SCM/Q2/CHN/45 
 Page 3 
 
 
  Question 10 
 
 Please explain the details of the eligibility crite ria to receive these th ree subsidies including 
the differences between the three. 
 
Question 11 
 
 What is the meaning of 'intangible assets' ?  When the new technologies, new products and 
new techniques fail to become 'intangible assets', to what extent could an enterprise receive 
preferential treatment? 
 
Fund for international market exploration by SMEs (No. 49) 
 
Question 12 
  What is the definition of "SMEs"?  Please expl ain the details of the eligibility criteria to 
receive the subsidy.  
 Question 13 
 
 According to paragraph 7, "To whom and how  the subsidy is provided", "the grant is 
allocated on the basis of the approved applicati on for fund after market exploration activities are 
completed".  Please explain how the allocation of th e grant works in this programme.  What is the 
"market exploration activities" and what kind of info rmation is required for an enterprise to have the 
grant allocated?  
 
Fund for promotion of coordinated development of  foreign trade and economic relations among 
regions (No. 52) 
 
Question 14  
 What does "coordinated development of fo reign trade and economic relations" mean?  
 Question 15 
 
 What kind of projects are subsidised under this programme?  
Question 16 
  To whom is this subsidy pr ovided? Please explain the details of the eligibility criteria to 
receive the subsidy;  who runs the projects ai med at exploration of international markets? 
 Question 17 
 
According to the notification, this programme started in 2000.  Why does this programme not 
appear in the previous notification of China, G/SCM/N/155/CHN? 
 
 
 
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