G/SCM/Q2/CHN/64  
 
28 April 2016  
(16-2388)  Page: 1/22  
Committee on Subsidies and Countervailing Measures  Original: English  
 
SUBSIDIES 
REPLIES TO QUESTIONS FROM THE UNITED STATES1 REGARDING THE 
NEW AND FULL NOTIFICATION OF CHINA2 
The following communication, dated 26 April 2016, is being circulated at the request of the 
Delegation of China.  
_______________ 
  GENERAL 
1. The United States appreciates China's efforts to notify its central government 
subsidy programmes. However, we note that  subsidies provided at the sub-central 
government level were not included in China' s notification and, indeed, China has never 
notified a sub-central program. Article 25 of the Agreement on Subsidies and 
Countervailing Duties (Subsidies Agreement) sp ecifically requires that Members include 
in their notification information on any su bsidies granted or maintained within their 
territory, which includes subsidies at both the central and sub-central levels. Please 
indicate when China will comprehensively noti fy subsidies provided at the sub-central 
level.  
Reply 
 
China is preparing the subsidy notification at sub-central government level, and will submit it to 
the WTO as soon as it's completed. 
 2. When answering questions on its previo us notification, China clarified that the 
phrase "Financial appropriations" effectivel y means that grants ar e provided under the 
program. Is this true in all instances in wh ich the phrase "Financial appropriations" is 
used in China's most recent notification?  
Reply 
 
As China replied to the US's request G/SCM/Q2/CHN/47, ''Financial appropriations" used in the 
subsidy programs mentioned in China's subsidy notification indicates the usage of the fiscal funds 
in the fiscal budget management system.  
QUESTIONS REGARDING NOTIFIED PROGRAMS 
3. The United States has identified numerous programs included in China's 
submission that do not appear to meet the notification requirements of Article 25.1 of the Subsidies Agreement. The United States ha s previously highlighted what it considers 
to be "over-reporting" of subsidy progra ms by China in its prior notifications.
3 By 
including such programs in its notification, China artificially inflates the number of 
programs it has notified. The United States  considers that up to one-quarter of the 
                                               
1 G/SCM/Q2/CHN/57. 
2 G/SCM/N/220/CHN-G/SCM/N/253/CHN-G/SCM/N/284/CHN. 
3 G/SCM/N/123 CHN; G/SCM/N/155/CHN-G/SCM/ N/186/CHN; G/SCM/N/220/CHN-G/SCM/N/253/CHN-
G/SCM/N/284/CHN. G/SCM/Q2/CHN/64 
 
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  programs contained in China's third subsidy notification are reported on questionable 
basis. These include, inter alia , programs that do not appear to be specific to an 
enterprise, industry or groups thereof; do  not benefit industrial enterprises; are 
provided to individuals; or constitute suppo rt for general infrastructure or disaster 
relief. Examples of these programs include: 
 
 Program 12 -- Special Fiscal Fund to Alleviate Poverty 
 Program 23 -- Preferential tax treatment for the public buses and trolleybuses 
purchased by urban public transportation enterprises 
 Program 28 -- Preferential VAT policies for enterprises that employ disabled 
people 
 Program 29 -- Preferential tax treatmen t for imported products exclusively 
used by the disabled people 
 Program 44 -- Fund for subsidizing the training of rural migrant labor force 
 Program 60 -- Preferential tax treatment for endangered wild animals and 
plants as well as their products retu rned by foreign governments, by the 
government of Hong Kong SAR, China or the government of Macao SAR, China 
to China. 
 Program 82 -- Subsidy fund for producin g goods specially needed by the ethnic 
minorities. 
 Program 86 -- Preferential tax trea tment for anti-HIV-AIDS medicine. 
Reply 
 
China submits the subsidy notification pursuant to Article 25.1 of the Agreement on Subsidies and 
Countervailing Measures (the SCM Agreement) with a view to observing the transparency 
obligation under this agreement. The nature of the notified programs is not prejudged. In China's 
view, the programs listed by the US constitute specific subsidies defined by the SCM agreement, 
because they provide support to specific sectors, products or regions. 
 The United States has specific questions concerning these programs, which are as 
follows: 
 
Program 12 – Special Fiscal Fund to Alleviate Poverty  
4. Please explain the criteria for eligibility that individuals or other organization must 
meet to receive funding under this prog ram. How is "industry with distinctive 
characteristics in poverty stricken areas" defined under this program? 
 
Reply 
 The poverty stricken households and poverty stricken populations in rural areas recognized and 
identified based on the standards for poverty alleviation at central and local levels may enjoy this 
special subsidy. "Industry with distinctive characteristics in poverty stricken areas" refers to crop farming, breeding, ethnic handicraft and other industries with local characteristics in the poverty 
stricken areas.  
 5. Are there certain activities that recipi ents of funding under this program must 
perform? 
 Reply 
 
According to the working mechanism of poverty alleviation and development in which "the Central 
Government plans as a whole, the governments of provinces (autonomous regions and G/SCM/Q2/CHN/64 
 
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  municipalities directly under the Central Govern ment) take principal responsibilities, and the 
governments of municipalities (prefectures) and counties are responsible for the implementation", 
after the special poverty-alleviating fiscal funds are allocated to local governments, the latter may, according to the actual needs of local poverty alleviation and development work, use the funds 
mainly to improve the basic production and living conditions in rural poverty stricken areas, or to 
help poverty stricken populations to develop industri es with characteristics. Recipients of the fund 
are not required to engage in specific activities.  
 
Program 23 -- Preferential tax treatment for the public buses and trolleybuses purchased by urban public transportation enterprises  
 
6. Are commercial entities, e.g., industrial manufacturers of goods, eligible for the 
assistance provided under this program?  
Reply 
 
According to the MOF and SAT Notice on the Exemption of Vehicle Purchase Tax on Buses and 
Trolley Buses Purchased by Urban Public Transport Enterprises (Circular Caishui No. 51 of 2012), 
the public buses and trolley buses purchased by urban public transportation enterprises between 
1 January 2012 and 31 December 2015 shall be exempted from vehicle purchase tax. The urban public transportation enterprises mentioned abov e refer to: the enterprises identified by the 
competent transportation departments of the peop le's governments at or above the county level 
that have obtained urban public transportation operation qualifications according to law and provide travel services to the public. The public buses and trolley buses mentioned above refer to: 
the operational public buses and trolley buses for the public to take that are defined by the 
competent transportation departments of the peop le's governments at or above the county level 
according to the vehicles' actual scope of business and usage, operating in urban areas according 
to approved routes, stops, ticket prices and timetables.  
 Program 28 -- Preferential VAT policies for enterprises that employ disabled people 
 
7. Is any enterprise that employs disabled people, in any industry and without regard 
to location, eligible for assistance und er these programs? How many enterprises 
received or were eligible for assistance und er these programs each year covered by the 
reporting period? 
 Reply 
 Enterprises of various ownership types (including sole proprietorship, partnership and self-employment venture), public service units, social organizations and private non-enterprise units registered with the tax authorities may all enjo y this preferential tax policy, regardless of 
ownership types, industries or locations. It is roughly estimated that annually about 18,000 
enterprises enjoyed support of this policy during th e notification period, slowly decreasing year by 
year.  
 
Program 29 -- Preferential tax treatment for im ported products exclusively used by the 
disabled people. 
 
8. What enterprise or industry in China benefits when an imported product used 
exclusively by disabled people rece ives preferential tax treatment? 
 
Reply 
 
According to the Provisional Stipulations on the Tax Exemption of  Imported Products exclusively 
used by the Disabled People, units importing prod ucts exclusively used by the Disabled People 
refer to (1) taxpayers importing relevant products exclusively used by the Disabled People; (2) enterprises and public service units directly under the Ministry of Civil Affairs, welfare 
institutions under the civil affairs departments of provinces, autonomous regions and municipalities 
directly under the Central Government, artificial limb factories and rehabilitation hospitals for glory soldiers; and (3) public service units directly under China Disabled Persons' Federation (China Foundation for Disabled Persons) and welfare institutions and rehabilitation institutions under G/SCM/Q2/CHN/64 
 
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  disabled persons' federations (foundations for disabled persons) of provinces, autonomous regions 
and municipalities directly under the Central Government.  
 Program 44 -- Fund for subsidizing the training of rural migrant labor force. 
 
9. Please explain the criteria for eligibility that individuals, training institutions or 
other organization must meet to receive funding under this program. What is the nature 
of the financial contribution(s) provided under this program? 
 Reply 
 
The fund for training subsidy is used to subsidize the tuitions of farmers receiving training or to 
subsidize training institutions due to the lowering of charging standards. Training institutions shall be determined through public tendering or review of applications by the competent departments of 
local governments. The fund is grants for training subsidy. 
 10. Are commercial entities, e.g. industrial manufacturers of goods, eligible for the 
assistance provided under this program?  
 Reply 
 
The objects of the subsidy fund are farmers receiving training or training institutions that have 
lowered charging standards.  
 
Program 60 -- Preferential tax treatment for en dangered wild animals and plants as well 
as their government of Macao SAR, China to China.  
11. What are the eligibility criteria of this program? 
 Reply 
 
Tariff and import VAT on the endangered wild animals and plants as well as their products which 
are listed in the appendix to the Convention on International Trade in Endangered Species of Wild Fauna and Flora, returned by foreign government s, by the government of Hong Kong SAR, China 
or by the government of Macao SAR, China to the Office of the Administration of Import and 
Export of Endangered Species under SFA, upon the presentation of Certificate of Endangered 
Species of Wild Fauna and Flora as well as their products returned by foreign governments, by the 
government of Hong Kong SAR, China or by the government of Macao SAR, China, issued by the 
Office of the Administration of Import and Export  of Endangered Species, shall be exempted since 
1 January 2002.  
12. Who are the recipients of the assist a n c e  u n d e r  t h i s  p r o g r a m ?  A r e  c o m m e r c i a l  
entities, e.g. industrial manufacturers of goods, eligible for the assistance. 
 
Reply 
 
Office of the Administration of Import and Expo rt of Endangered Species under the SFA is the 
recipient of assistance under this program.  
 Program 82 -- Subsidy fund for producing goods specially needed by the ethnic minorities. 
 
13. Please explain the nature of the fina ncial contribution(s) provided under this 
program, e.g. grants, loans, etc. 
 
Reply 
 
The fund of the program is grants of fiscal fund. 
 G/SCM/Q2/CHN/64 
 
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  14. How many enterprises received assistance  under this program during the reporting 
period?   Reply 
 During the notification period, 1,860 enterprises enjoyed support of this program.  
Program 86 -- Preferential tax trea tment for anti-HIV-AIDS medicine. 
 15. What is the value of imported anti-HIV-A IDS medicine during the years included in 
the reporting period? What is the value of su ch domestically produced medicine during 
the same period? 
 Reply 
 During the notification period, the value of impo rted anti-HIV-AIDS medicine by China was around 
US$560 million, and there were no statistical data for the value of domestically produced medicine 
of the kind in the same period. 
 16. What commercial enterprise or industry in China benefits from preferential tax 
treatment for anti-HIV-AIDS medicine? 
 
Reply 
 
Importers of anti-HIV medicine may be exempted from tariff, import VAT and VAT in the domestic 
circulation stages, and designated domestic produc ers of domestically produced anti-HIV medicine 
are exempted from VAT in the production and circulation stages. 
 
OTHER PROGRAMMES 
Steel 
 
17. The Steel Industry Development Policy , National Development and Reform 
Commission, Order No. 35 (8 July 2005) as well as the revised 2015 draft for comment, outlines policy measures for supporting steel  enterprises and provides policy guidance 
on steel capacity and production, includin g support through preferential taxation, 
interest subsidies, and research fund ing. Specifically, the 2005 policy states:  
 
Article 16 We should support and organize the implementation of equipment 
localization of the iron and steel industry, enhance the research and 
development as well as designing and ma nufacture levels of major technical 
equipment of our iron and steel indust ry. For a major iron and steel project 
that is based on home-made equipment as newly developed, the state shall 
grant policy supports in such aspects as taxation, interest subsidy and 
scientific research funds. 
Article 18 The policies of imported technolo gies and equipment: enterprises 
are encouraged to use home-made equipment and technologies and reduce export. For any equipment or tec hnology that cannot be produced 
domestically or fails to meet the demand and, thus, must be introduced from 
abroad, the introduced equipment or technology shall be advanced and 
practical. For the equipment in large amount and big scope, we should organize and implement the localized  production thereof from now on. 
Enterprises are prohibited from ad opting any second-handed backward 
production equipment of iron and steel from home or abroad that has been 
eliminated. 
Given the language of the cited measure, pl ease explain why this measure and related 
implementing measures were not notified pursuant to Article 25 of the Subsidies Agreement.
4  
                                               
4 See also, G/SCM/Q2/CHN/15, 13 October 2005. G/SCM/Q2/CHN/64 
 
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18. The Steel Industry Adjustment and Revitalization Plan , Guo Fa [2009] No. 6 
(20 March 2009)5 outlines policy measures for supporting steel enterprises. For 
example:  
 
IV. Policy measures 
…  
(III) Strengthen input in technologica l progress and technical reconstruction. 
Special funds are available for the invest ment in capital construction within 
the central budget, and loans for supporting the technical reconstruction of steel enterprises (excluding the renova tion of power-saving technology), 
technological R&D and technology in troduction, to push forward the 
technological progress of steel industry. Adjust the steel structure to improve 
the quality of steel products. Further increase the financial incentive for 
power-saving technology to encourage and support the steel enterprises to 
positively carry forward the renovation of power-saving technology. 
… 
(IX) Implement financing policy. 
Strengthen financial support for backbone steel enterprises. Give support to 
the projects which are subject to the environmental protection, agrarian law and portfolio management requiremen ts, and enterprises which implement 
the merger, reorganization; go global , and make technological progress in 
terms of issuing stock, corporate bond, middle-term bill, short term financing 
and bank loan as well as absorbing the privately collected equities. Avoid the 
capital chain rupture of the large-size d backbone enterprises. If necessary, 
make available loan and discounts, and continuously implement financing 
restrictions for projects without approv al and the enterprises with backward 
productive capacity. 
Given the language of the cited measure, pl ease explain why this measure and related 
implementing measures were not notified pursuant to Article 25 of the Subsidies Agreement. 
 
19. The Anhui Province Steel and Iron Indust ry Adjustment and Revitalization Plan , 
Wan Zheng [2009] No. 56 (18 August 2009)
6 outlines policy measures for supporting 
the provinces steel enterprises. For example: 
 
IV. Policy Measures 
… 
(II) Set up finance and tax interest a llocation mechanisms in locations with 
resources and locations where processing  is occurring, intensify prospecting 
and direct mineral resources to advantaged enterprises like MA Steel. 
Preferentially allocate proven reserves of exploitable iron ore (4 billion tons, 
mainly around Ningwu, Huoqiu and Lujiang) in Anhui to advantaged 
enterprises like MA Steel, allow no new mi ning claims in the areas around the 
mines of advantaged enterprises like MA Steel, and support MA Steel in 
integrating and developing iron ore re sources. Encourage MA Steel to take 
part in earlier-stage exploration of iron  ore resources in Anhui and add to its 
resource reserves. 
                                               
5 See also, G/SCM/Q2/CHN/51, 14 October 2014, program #2. 
6 See also, G/SCM/Q2/CHN/51, 14 October 2014, program #6. G/SCM/Q2/CHN/64 
 
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  a. Please describe the preferential alloca tion of iron ore under this measure. 
b. Given the language of the cited measure,  please explain why this measure and 
implementing measures were not noti fied pursuant to the notification 
requirements of Article 25 of  the Subsidies Agreement. 
20. The Qinghai Province Opinions on the Implem entation of Steel and Iron Industry 
Adjustment and Revitalization , Qing Zheng [2009] No. 33 (25 June 2009)7 outline policy 
measures for supporting steel enterprises in the province. For example: 
 
V. Major Policies …  (III) Strengthen fiscal and taxation policy support. Strengthen fiscal input 
into technical progress and upgradin g, and apply funds primarily toward 
preliminary project work, interest discounts for independent innovation and 
technical progress, and energy conserva tion and emissions reductions etc. 
while guiding enterprises to increase their input and speed up industrial 
upgrades and transformation. Promote development of high-quality new special steel products, promote utilizatio n of low-grade iron ore, and promote 
development of direct redu ced iron. Actively carry ou t the implementation of 
relevant supplementary policies such as the reform of the national taxation 
system on enterprise income taxe s and value-added taxes, etc., and 
guarantee the implementation of variou s preferential policies; research and 
formulate relevant supplementary fisc al and taxation policies and support 
the development of key industries according to the taxation policies supporting industrial development that have been formulated by the state 
and the practical conditions of the province. 
 (IV) Strengthen financial service and support. The financial department shall 
take the initiative to strengthen communication and coordination with 
enterprises, and do well in its financial service. Strengthen credit support for 
key technical upgrades, energy-saving technical upgrades, energy conservation and emission reduction, and construction of key projects to 
guarantee project construction. 
(V) Improve the withdrawal mechanism for backward production capacity. 
Support iron and steel enterprises to pr operly relocate employees, shift their 
enterprise production and deal with  debt resolution etc. during the 
elimination of backward production capacity, and promote social harmony 
and stability. Meanwhile, gran t interest discounts or investment subsidies to 
projects that adopt new technology  for energy-saving technological 
upgrades. Strictly carry out a responsi bility system for energy conservation, 
emissions reductions, and elimination of backward production capacity; 
strengthen supervision and inspection  of the elimination of backward 
production capacity. Relevant depart ments shall not process any paperwork 
for projects that are inconsistent with  the rules, nor those that belong to 
projects with high energy consumption and high emissions. 
Given the language of the cited measure, pl ease explain why this measure and related 
implementing measures were not notified pursuant to Article 25 of the Subsidies Agreement. 
 
21. China has never notified a steel subsid y program at either the central or sub-
central level. Is it China's position that it  has never provided a specific subsidy to the 
steel industry since becoming a WTO Member? 
 
Reply to Questions 17-21 
 
The following questions were already raised by the US according to Article 25.8 of the SCM 
Agreement in documents G/SCM/Q2/CHN/46 and G/SCM/Q2/CHN/51. China has responded to 
                                               
7 See also, G/SCM/Q2/CHN/51, 14 October 2014, program #11. G/SCM/Q2/CHN/64 
 
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  them at the regular meeting of the Committee on Subsidies and Countervailing Measures in 
October 2015. Please refer to relevant meeting minutes. Please raise questions according to Article 25.1 of the SCM Agreement regarding th e new and full notification of China.  
 
Non-ferrous Metals 
 22. The State Council  Non-Ferrous Metals Industry Ad justment and Revitalization Plan , 
Guo Fa [2009] No. 14 (12 May 2009)
8 outlines guiding principles and policy measures 
for supporting the non-ferrous metals industries including tax rebates, special funds, and financing support. For example:  
 
Article 4.2 Work out plans for further expanding the scale of state purchase 
and storage of non-ferrous metals based on situational needs… 
Article 4.3 Allocate a special fund fo r the newly added central government 
investments to support the technolo gy research and development and 
technology transformation in the non- ferrous metals industries through the 
means of discount interest loans. Incr ease the support of financial rewards 
for the transformation of energy saving technologies, encourage and guide 
enterprises to vigorously advance the transformation of energy saving technologies. 
Article 4.4 Promptly promote the launc h of direct power-purchase pilot 
projects. The focus of support goes to backbone electrolytic aluminum 
enterprises that are conducive to industrial restructuring and meet the national environmental and land laws and investment management 
regulations to reduce production c ost and inject greater vitality into 
enterprises... 
Article 4.9 Increase support to the fi nancing of backbone non-ferrous metal 
enterprises. For projects that meet industrial policies, environmental and 
land laws and regulations, and investme nt management provisions as well as 
enterprises that conduct merger, reorganization, "go global", and 
technological transformation, give support  in terms of stock, enterprise bond, 
corporate liability, and bank loans… 
a. Please explain the mechanism under wh ich non-ferrous metals were bought 
and stored under this measure. Was the objective of the mechanism to support 
prices on non-ferrous metals in China? Please describe how this mechanism 
operated. 
b. Given the language of the cited measure,  please explain why this measure and 
related implementing measures were not notified pursuant to Article 25 of the 
Subsidies Agreement. 
23. The Hunan Province Non-Ferrous Metals In dustry Revitalization Implementation 
Plan (2009-2011) , Hunan Provincial People's Gove rnment, Xiang Zheng Fa [2009] 
No. 17 (3 June 2009)
9 outlines policy measures for supporting the non-ferrous metals 
industries in Hunan province. For example:  
Article 4.3 Increase credit availabilit y, reduce the threshold for working 
capital loans, and ensure reputable en terprises that have orders receive 
credit support in time. Give greater credit support to enterprises undertaking 
major construction projects … 
Article 4.4 … Build a provincial non- ferrous metal purchase and storage 
system. By way of 'government cont rol, bank loan, financial support, 
enterprise storage,' provincial financia l [shall] coordinate, focusing on the 
purchase and storage of non-ferrous metals including copper, aluminum, 
                                               
8 See also, G/SCM/Q2/CHN/51, 14 October 2014, program #22. 
9 See also, G/SCM/Q2/CHN/51, 14 October 2014, program #27. G/SCM/Q2/CHN/64 
 
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  zinc, tungsten, antimony, bismuth, and in dium. The scale of the first phase of 
purchase and storage is RMB 1 billion to RMB 1.5 billion. 
a. Please explain the mechanism under wh ich non-ferrous metals were bought 
and stored under this measure. Was the objective of the mechanism to support 
prices for non-ferrous metals in China? Please describe how this mechanism 
operated. How many phases of the prog ram were there and what was the total 
amount purchased? 
b. Given the language of the cited measure,  please explain why this measure and 
related implementing measures were not notified pursuant to Article 25 of the 
Subsidies Agreement. 
24. The Jiangsu Province Non-Ferrous Metals In dustry Adjustment and Revitalization 
Plan Outline  (Jiangsu Provincial People's Go vernment, Su Zheng Fa [2009] No. 86 
(31 May 2009)10 outlines policy measures for supporting the non-ferrous metals 
industries in Jiangsu province. For example: 
 
Article 4.1 Practically implement all na tional and provincial policies for 
preferential treatment of the non-ferrous  metal industry and strive to solve 
development problems and questions th at exist currently… give support to 
key enterprises that fit with national in dustrial policies in terms of funding, 
electricity use, land use, and other such  factors. Strive to develop and open a 
more direct power supply in our pr ovince for key aluminum smelting 
enterprises. 
Article 4.2 Make vigorous and positi ve use of indigenously-developed 
advanced and applied technologies to transform the industry…various 
financial programs should be made available to support key large-scale 
projects, key technologies, energy savings, emissions reduction, and 
elimination of outdated equipment. 
a. Please describe the support provided to  key enterprises for electricity use. 
b. Given the language of the cited measure,  please explain why this measures and 
other related implementing measures were  not notified pursuant to Article 25 
of the Subsidies Agreement. 
25. The Qinghai Province Opinions for the Implementation of Non-Ferrous Metals 
Industry Adjustment and Revitalization , Qinghai Provincial People's Government,  Qing 
Zheng [2009] No. 31 (25 June 2009)11 outlines policy measures for supporting the non-
ferrous metals industries in Qinghai province. For example: 
 
Article 4.1 Practically implement all national and provincial policies for 
preferential treatment of the non-ferrous metal industry … give support to 
key enterprises that fit national industrial policies in terms of funding, electricity use, land use, and other such  factors. Strive to develop and open a 
more direct power supply in our province for key aluminum smelting 
enterprises. 
Article 4.4: Strengthen financial servic es and support. Financial institutions 
are to take the initiative to strengthen communication between local 
governments and banks and emphasize strongly the focus on industrial 
financial services. Increase the focus on technological innovation, energy 
transformation, energy conservation projects, and key industrial credit 
support to ensure project completion. Ac hieve further innovation in financing 
methods, continue strengthening bank-government and bank-industry 
cooperation, and encourage enterprise s to expand the scale of corporate 
bond financing through the issuance of enterprise bonds, short-term 
                                               
10 See also, G/SCM/Q2/CHN/51, 14 October 2014, program #28. 
11 See also, G/SCM/Q2/CHN/51, 14 October 2014, program #29. G/SCM/Q2/CHN/64 
 
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  financing bonds, medium-term note s, and other means. Also support 
competitive enterprises with public financing and guide existing public 
companies to further expand  the scale of financing." 
Given the language of the cited measure, pl ease explain why this measure and related 
implementing measures were not notified pursuant to Article 25 of the Subsidies 
Agreement.  
26. China has never notified a non-ferrous subsidy program at either the central or 
sub-central level. Is it China's position that  it has never provided a specific subsidy to 
the non-ferrous industry si nce becoming a WTO Member? 
 
Reply to Questions 22-26 
 
The following questions were already raised by the US according to Article 25.8 of the SCM 
Agreement in documents G/SCM/Q2/CHN/46 and G/SCM/Q2/CHN/51. China has responded to 
them at the regular meeting of the Committee on Subsidies and Countervailing Measures in October 2015. Please refer to relevant meeting minutes. Besides, some questions seem to have 
little relevance with the WTO's SCM Agreement, the US is suggested to raise these questions in 
other committees. Please raise questions according to Article 25.1 of the SCM Agreement regarding the new and full notification of China.   
Semiconductors 
 27. In June 2014, the State Council released the Guidelines to Promote National 
Integrated Circuit (IC) Indust ry Development. Under these Guidelines, the State Council 
approved the establishment of a Nation al IC Investment Fund Co. Ltd (IC 
Fund), pursuant to the State Council Notificati on Regarding National Integrated Circuits 
Industry Investment Fund Establishment A pproval (Guo Han [2014] No. 48). The two 
largest shareholders of the IC Fund are th e Ministry of Finance (MOF), and the China 
Development Bank. According to an offici al Ministry of Industry & Information 
Technology (MIIT) report, the remaining sh areholders, all state-owned enterprises, 
invested in the Fund under the guidance of their respective administrative management 
agencies, including both MIIT and MOF. The IC Fund operates under the direction of the National IC Industry Leading Small Group, which is chaired by a Vice Premier of the 
State Council. The MIIT Electronics Info rmation Department and the MOF Economic 
Construction Department are responsible fo r operational oversight including "guiding 
the operations of the IC Fund," such a di recting and monitoring key investments and 
projects undertaken by the IC Fund. 
 The purpose of the IC Fund is to promote the growth of China's IC industry in line with the strategic objectives of the State outl ined in the Guidelines, with the funding 
provided in the form of an equity stake ow nership to allow the government to take an 
active role as a shareholder. The State Counc il has required that "no less than 60%" of 
the IC Fund be invested into the IC manufacturing sub-sector. Public sources report that 
this will allow the government to monitor the investee's management decision making 
process and will assist the government in balancing its national strategy for the 
development of this industry. Under these Gu idelines, it has been reported that China 
will provide 120 billion yuan between 2014 - 2017 and that local governments will also 
create their own IC Investment Funds. It ha s also been reported that the IC Fund will 
not impose strict return requirements on the firms receiving these investment funds. For example, MOF and CBD officials have said that  "strategic investments" made by the IC 
Fund will not be made based on market cond itions. Executives of the IC Fund and its 
affiliated entities have publicly stated th at "the IC Fund is not a pure financial 
investment, it is a policy tool." (See, e.g ., Asia Semiconductor Sector; SEMICON China 
Showcases the Emerging Local Ecosystem from Credit Suisse (23 March 2015) at 
pages 3-7, MIIT 2015 Annual Electronics Indust ry Work Meeting, and public reports of 
the March 19 Shanghai IC Equipment Industry Development Form) The 2014 Guidelines 
to Promote National Integrated Circuit (IC)  Industry Development appear to provide a 
financial contribution and benefit under Ar ticle 1 of the Subsidies Agreement because 
there is a provision of government funds an d the government investment is based upon 
national policy goals for the development of the IC industry without the expectation of G/SCM/Q2/CHN/64 
 
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  specific rates of return. In addition, this pr ogram appears to be specific under Article 2 
of the Subsidies Agreement because the funds are provided to the IC industry.  Please explain why this measure and related implementing measures were not notified 
pursuant to the notification requirements of Article 25 of the Subsidies Agreement. 
 28. In Tianjin Economic and Technological De velopment Area Interim Measure on 
Promoting Integrated Circuit Design Industry Development  (Tianjin Economic and 
Technological Development Area Manageme nt Commission (19 June 2013)) various 
support measures are described. These include:  
Article 4. [Special Fund] … Set up a "IC Design Industry Promotion Special 
Fund", used for service platform software and hardware environmental construction, operations expenditure support, and design enterprise R&D, 
tapes, and industrialization financ ial support and other expenditure 
subsidies.  
Article 10. [R&D Support] To enterpri ses that participate in multi-project 
wafer (MPW) products, give the proj ect expenditure 50% subsidies; to 
enterprises that use service platform EDA [Electronic Design Automation] software, give complete reduction or waiving of expenditures; for other R&D 
expenses, beginning from the year of enterprises' establishment within 5 
years, give 10% support subsidies to  enterprises R&D expenses; the above 
support and subsidy fees does not exc eed RMB 5 million at the highest every 
year. 
Article 12. [Industrialization Support] Beginning the month the enterprises 
pays VAT, give financial support that is  equivalent to the enterprise's paid 
VAT, and every enterprises' subsidy does not exceed 3 years, and the 
accumulated amount in 3 years does not exceed RMB 5 million. 
Given the provisions cited above, please explain why this measure and other related 
implementing measures were not notified pursuant to Article 25 of the Subsidies Agreement. 
 
29. In Shanghai Municipality Measure for the Administration of the Software and 
Integrated Circuit Industry Development Special Fund  (Shanghai Municipality Economic 
and Informatization Commission, Shanghai Muni cipality Bureau of Finance, Hu Jing Xin 
Fa [2012] No. 965 (28 December 2012)) variou s support measures are described. These 
include: 
 
Article 9 (Support Method) 
The special fund uses the methods of free subsidies and rewards to be 
arranged and used. 
Article 10 (Support Standards) 
The special fund's support is applicable to be used for the following 
standards: 
(1) To projects that have obtained national electronic information industry 
development fund support, give 50% accompanying support. 
(2) The support fund's support quota usually does not exceed 30% of the 
project's total financing, and at maximum does not exceed RMB 8 million. 
(3) To common service platform construction and demonstration use 
projects, the special fund usually give s support not exceeding 50% of total 
investment, and the support fund comple tely subsidies industry development 
and policy research projects. G/SCM/Q2/CHN/64 
 
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  (4) To IC design enterprises that utiliz e our city's IC production line and 
carry out the first round of engineering product tapes adhering to certain requirements, the special fund gives support not exceeding 30% of tape 
expenditures, and at maximum does not exceed RMB 5 million. 
Given the provisions cited above, please explain why this measure and other related 
implementing measures were not notified pursuant to Article 25 of the Subsidies Agreement. 
 
30. In Beijing Several Policies on Further Promoting the Software Industry and 
Integrated Circuit Industry Development  (Beijing Municipality People's Government, 
Jing Zheng Fa [2014] No. 6 (8 February 2014 )) various support measures are described. 
These include: 
 
II. IC Industry Policy 
… 
(16) Innovate IC industry invest ment and financing methods…Expand 
venture capital funding and other fina ncial channels, encourage and attract 
structure investors, industry capital, and overseas capital to participate and 
establish IC industry development fund s, and use equity shares investment 
and other methods to support IC indust ry to develop in coordination with 
other links, and promote key enterprise M&As and industry park 
construction. 
(18) Support high-end IC producti on project construction. To newly 
constructed or expanded production lines for 12 inches above with linewidth 
smaller than 65 nm…encourage and guide industry development funds, and 
social capital [should] give equity inve stment to these products, and city and 
district (county) governments give co nstruction of building or interest 
discount support. 
Given the provisions cited above, please explain why this measure and other related 
implementing measures were not notified pursuant to Article 25 of the Subsidies Agreement. 
 
Reply to Questions 27-30 
 
The questions regarding the preferential policies on  integrated circuit were already raised by the 
US according to Article 25.8 of the SCM Agreement in documents G/SCM/Q2/CHN/46 and G/SCM/Q2/CHN/51. China has responded to them at the regular meetings in April 2013 and 
October 2015 of the Committee on Subsidies and Countervailing Measures. Please refer to the 
minutes of relevant meetings.   China is preparing the subsidy notification at sub-central government level, and will submit it to 
the WTO as soon as it is completed. For local programs, the US may refer to that notification later. 
Please raise questions according to Article 25.1 of the SCM Agreement regarding the new and full 
notification of China. 
 
Investment and Interest Rate Subsidies  
31. There appears to be a general investment  system in China funded from the Central 
Budget (See, Interim Measures for the Administration of Central Budget Investment 
Subsidy and Interest Discount Projects , National Development and Reform Commission, 
Order No. 31 (8 June 2005); Interim Measures for the Administration of Central Budget 
Investment Subsidy and In terest Discount Projects , National Development and Reform 
Commission, Order No. 3 (15 June 2013).
12  
 
                                               
12 See also, G/SCM/Q2/CHN/51, 14 October 2104, program #42 and 43. G/SCM/Q2/CHN/64 
 
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  Article 3 of the 2013 measure states: 
Investment subsidies mentioned in these measures refer to 
investment subsidies given to lo cal governments and investment 
subsidy projects given by the Na tional Development and Reform 
Commission to qualifying enterprises. 
Interest discounts mentioned in these measures refer to loan 
interest subsidies given by the National Development and Reform 
Commission to qualifying investment  projects that utilize mid- to 
long-term bank loans. 
Investment subsidies and inve stment discounts are gratis 
investments.  
Article 4 of the 2013 measure lists as one of the focuses of this program as 
"Investment projects for … industrializ ation of high and new technologies." 
Article 23 states that projects that do  not have confidentiality requirements 
"shall be open to the public". 
a. Please explain why this program and other related implementing measures 
have not been notified pursuant to Article 25 of the Subsidies Agreement. 
b. Please describe the industries and se ctors that have benefitted under these 
measures. 
c. Article 7 of the 2005 measure placed limit s on the amount of the investment 
subsidy. The 2013 measure does not have  similar limits described. Are there 
limits on the amount of the investment subsidy under the 2013 measure? If so, 
please describe.  
32. There also appears to be an invest ment system for China's state-owned 
enterprises. In 2013, Article 2.1 of the Interpretation on 2013 Central State-owned 
Capital Management Budget  states:  
 
Expenditures for structural ad justment of the state-owned 
economy [account for] 37.988 billion yuan, [which is] used to support strategic mergers and re organizations between central 
enterprises, sort out equity relations in companies with multiple 
investor entities, sustain and st rengthen central enterprises' 
controlling force on major subsidiaries that affect national security and national economy lif elines, as well as resolve the 
historical legacy problem of central enterprises. 
Article 2.3 of the same 2013 budget document states: 
Expenditures for industrial u pgrading and development [account 
for] 17.676 billion yuan, [which is] used to enhance central 
enterprises' indigenous innovati on ability, push forward major 
technology innovation and industrialization of scientific and technological achievements, carry out the "12th Five-Year" 
energy saving and emission reduction targets and tasks, support 
central enterprises' energy saving and emission reduction work, and support central enterprises' in ternal industrial integration. … 
For 2014, Article 2.1 of the Interpretation on 2014 Central State-owned Capital 
Management Budget  states: 
 
Expenditures for structural ad justment of the state-owned 
economy [account for] 61.51 billion yuan, [which is] used to provide key support to major struct ural adjustment mainly in the G/SCM/Q2/CHN/64 
 
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  areas of optimizing industrial  structure and capital layout, 
including central enterprises' strategic mergers and reorganizations and equity restructuring. 
Article 2.3 of the same 2014 budget document states: 
 
Expenditures for industrial u pgrading and development [account 
for] 15.425 billion yuan, [which is] used mainly to support 
important industries involving the lifeline of the national economy 
and industrial upgrading and development projects in key areas, including breakthroughs in industrial development bottlenecks, breakthroughs in technology bottlenecks, integration 
of industry and research, and development of new industries. 
Although outside of the relevant report ing period, in 2015, Article 3.4 of the 
Interpretation on 2015 Central Stat e-owned Capital Management Budget  states: 
 
State-owned capital injections [account for] 53.6 billion yuan, including: 26.5 billion yuan expenditures for structural 
adjustment of the state-owned economy, [which is] used to sort 
out equity relations and support en terprise structural adjustment. 
Moreover, Article 3.5 describes an 8.8 b illion yuan subsidy policy for state-owned 
enterprises.  
 
a. Please explain why these programs have not been notified. 
b. What type of subsidy ( e.g., grant, equity infusion) was provided under the 
subsidy policy described in Article 3.5 in  2015? What types of industries have 
received support under this policy?  
c. What state-owned companies received  capital injections and funds for 
restructuring in 2009-2014?  
d. Are any of the funds under the above budget items provided under the  Ministry 
of Finance Notice on Issuing the Measur e for the Administration of the Central 
State-Owned Capital Management Budge t Key Industries Transformation 
Upgrading and Development Fund , Ministry of Finance, Cai Qi [2013] No. 389 
(29 November 2013)? Please identify any measures relevant to the distribution 
of funds under the budget provisions ci ted above. What industries benefited 
from these funds?  
Reply to Questions 31-32 
 
With respect to the subsidy programs involving central budgetary expenditures, please refer to 
China's new and full subsidy notifications up to 2014. Please raise questions according to Article 25.1 of the SCM Agreement regarding the new and full notification of China. 
 
Wild Capture Fisheries 
 33. The State Council measure titled, Certain Opinions of the State Council Concerning 
the Promotion of the Sustainable and Healt hy Development of the Marine Fishing 
Industry  (Guo Fa [2013] No. 11)
13 includes the following provision: 
 
VII. Strengthening guarantee measures … 
20) Increasing the degree of financial support: Subsidies for fishing populace 
production and occupation transfer and oil price subsidization policies for the 
fishing industry are to be compre hensively considered and improved. 
                                               
13 See, G/SCM/Q2/CHN/52, #2.2(b). G/SCM/Q2/CHN/64 
 
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  Research is to be done on raising th e subsidy standards for production and 
occupation transfer and on adjusting th e method of oil price subsidization so 
that there is coordination with fisher ies resources protection and industrial 
restructuring. Marine salvage policies for the fishing industry are to be 
continued to be implemented. Funding is to be provided for supporting 
fisheries administration, resources su rvey, variety resources protection, 
disease prevention and control, and qu ality and safety monitoring. Policies 
subsidizing reproduction and release an d aquaculture ecological environment 
restoration are to be continued to be implemented. The degree of support for 
scientific and technological innovation  and results transformation in areas 
such as aquatic product breeding, disease prevention, resources 
conservation, and fishing industry equipment is to be increased. 
Please explain why this measure and other implementing measures were not notified 
pursuant to Article 25 of the Subsidies Agreement. 
 
34. A provincial measure related to the measure cited above titled  Guangdong 
Provincial People's Govern ment's Opinion on Promoting the Transformation and 
Upgrading of Marine Fishery to Improve the Level of Marine Fishery Development  (Yue 
Fu [2013] No. 67) includes  the following provision: 
 
(XXI) Increase the degree of support. Continue to implement the policy of 
providing subsidies for the purchase of fishery machinery and gear, and to 
incorporate fishing industry into th e scope of preferential policy of 
agricultural land, electricity, water, and so on. For those distant water fishing 
enterprises that obtain the "Distant Water Fishing Enterprise Qualification 
Certificate" issued by the Ministry of  Agriculture, and engaged in distant 
water fishing business during the validity period, they are exempted from paying the corporate income tax. Al l local governments shall incorporate 
marine fishery into the public fina ncial support system, increase the 
investment amount, and provide priority  support. Continue to implement the 
fishermen switching jobs project, to broaden fishermen's sources of income. 
Vigorously promote the policy of fi shery insurance, timely carry out 
aquaculture insurance policy pilot, in  order to improve the fishery risk 
protection mechanism. Provide fisherme n with subsidies during the fishing 
(ban) moratorium. 
Please explain why this measure and other related implementing measures were not 
notified pursuant to Article 25 of the Subsidies Agreement.
 
 
35. A municipality measure, related to the above two measures, titled Notice on the 
Issuance of Shenzhen Municipal Interim Measures for Supporting the Development of Distant Ocean Fishing through the Special Fund for Agricultural Development;  Shenzhen 
Municipal Economy, Trade and Information Technology Commission and Shenzhen 
Municipal Finance Commission , (Shenzhen Economy Trade Information Ocean Doc 
[2014] No. 22) includes the following provisions:  
Article III. Enterprises shall be encourag ed to organize modern distant ocean 
fleets: 
(I) Support shall be provided for the building of tuna seiners, ultra-low 
temperature tuna longliners, fiberglass t una longliners, steel tuna longliners, 
saury fishing vessels and large squid fi shing vessels and other distant ocean 
fishing vessels that are in line with the State's aid regulations. Proactive 
assistance shall be provided to the en terprises in their application for state 
aid. For those vessels for which aid has already been received from the state, 
supporting aid in the amount equivalent  to 20% of the state aid shall be 
provided from the special fund, and they  shall not be eligible for repeat aid 
from other sources for fishing vessels. 
(II) For large tuna seiners (with fish ing quota, with total tonnage of 1,500 
per vessel or more and under 20 years old), large saury fishing vessels and G/SCM/Q2/CHN/64 
 
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  large squid fishing vessels (with total tonnage of 1,000 per vessel and under 
15 years old), ultra-low temperature tuna  longliners (with fishing quota, with 
total tonnage of 350 per vessel or more , and under 15 years old), newly built 
or purchased used by enterprises, aid in  an amount equivalent to 25% of the 
total investment (including investment  in the vessel purchase and equipment 
renovation) shall be extended from the special fund, and the maximum aid per vessel shall not exc eed respectively 8 million Yuan, 3 million Yuan and 
2 million Yuan. 
(III) Large trawl processing vessels (with total tonnage of 7,000 per vessel 
and under 20 years old) newly built or purchased used by enterprises shall 
b e  e n t i t l e d  t o  a i d  i n  a n  a m o u n t  e q u i v a l e n t  t o  2 5 %  o f  t h e  t o t a l  i n v e s t m e n t  
(including the investment in the vesse l purchase and equipment renovation) 
from the special fund, and the maximum amount of aid per vessel shall not exceed respectively 10 million Yuan. 
(IV) Large support vessels for distant ocean fishing (with total tonnage of 
2,000 per vessel and under 15 years old) and other distant ocean fishing vessels (with total tonnage of 100 pe r vessel or more and under 10 years 
old) newly built or purchased used by en terprises shall be entitled to aid in 
an amount equivalent to 10% of the total investment (including the investment in the vessel purchase and equipment renovation) from the 
special fund, among which the maximum amount of aid per vessel for large 
support vessels for distant ocean fishin g newly built or purchased used shall 
not exceed respectively 8 million Yuan and 6 million Yuan, while the 
maximum amount of aid per vessel for large vessels for distant ocean fishing 
newly built or purchased used shall not exceed respectively 500,000 Yuan 
and 400,000 Yuan. 
(V) For a large vessel for distant ocean fishing newly built or purchased used 
by an enterprise, after the three certif icates, namely Nationality Certificate 
for a Chinese Fishing Vessel, Certif icate of Ownership and the Vessel 
Inspection Certificate are obtained, th e ratio between the annual amount of 
maritime product capture from dist ant ocean transported back to our 
municipality and the annual capacity of the enterprise's fishing vessel must 
reach the following number: For tuna, the quantity shipped back shall not be less than 10% and not less than 60% for other fish types for the above 
vessel to be eligible for aid. The mone tary aid (including the State aid for 
shipping) shall be paid out in the ratio of 20%, 20%, 20%, 20%, and 20% respectively over a five-year period. If  the amount shipped back falls below 
the above requirement, vessel aid fo r the subsequent period shall be 
terminated. 
Please explain why this measure and other related implementing measures were not 
notified pursuant to Article 25 of the Su bsidies Agreement. Why were the measures 
cited China's last trade policy review repo rt and in the United States' Article 25.8 
request
14 not included in China's latest notification? 
 
36. China has never notified a wild capture fisheries subsidies program at either the 
central or sub-central level. Is it China's po sition that it has never provided a specific 
subsidy to the wild capture fisheries industry since becoming a WTO Member? 
 
Replies to Questions 33-36 
 The US already raised such questions accord ing to Article 25.8 of the SCM Agreement in 
documents G/SCM/Q2/CHN/46 and G/SCM/Q2/CHN/51.  China has responded to them in China's 
new and full subsidy notification up to 2014 as well as at the regular meeting of the Committee on Subsidies and Countervailing Measures in October 2015. Please refer to the contents of China's 
notification and relevant meeting minutes.  
 
                                               
14 G/SCM/Q2/CHN/52. G/SCM/Q2/CHN/64 
 
- 17 - 
 
  Please raise questions according to Article 25.1 of the SCM Agreement regarding the new and full 
notification of China.  Textiles 
 
37. The Shanghai Municipality Plan to Carry Out the Implementation of the Textile 
Industry Adjustment and Revitalization Plan  (Hu Fu Fa [2009] No.53)
15 categorizes the 
textile industry to be a "traditional pillar"  industry. The entire plan, which includes 
guiding principles and policies, appears to be specific to the textile industry and 
describes particular financial benefits that wi ll be provided to the industry. For example: 
 
"Strengthen the supportive efforts of special funds for the independent name 
brand enterprises of Shanghai that are to be used for light industry and the 
textile industry. On the basis of relevant  regulations, focus on giving rewards 
to those enterprises that have earned the title of national brand (Chinese 
world brands, Chinese brands, Famous Tr ademarks of China, and brands that 
are the most competitive in the market). Give funds to help improve the 
quality of well-known name brand enterprises and promote excellent 
performance and engage in other bran d projects. Give funds to "old and 
famous" Chinese enterprises… ." 
Given the language of the cited measure, pl ease explain why this measure and related 
implementing measures were not notified pursuant to Article 25 of the Subsidies 
Agreement.  
38. The Notice on Issuing the Anhui Province  Textile Industry Adjustment and 
Revitalization Plan (Wan Zheng [2009] No. 55)
16, which includes guiding principles and 
policies, appears to be specific to the textile  industry and describe s particular financial 
benefits that will be provided  to the industry. For example: 
 
"Increase textile and clothing export support. The export credit insurance 
premium subsidy budgeted for by the provincial government; export stock 
and incremental incentives and corpor ate policies such as international 
market development funds; give priori ty to supporting textile and garment 
enterprises. At the same time, encour age qualified textile enterprises to 
"step out", and actively strive to achi eve the optimal configuration of sales, 
research and development and all aspect s of production on a global scale. 
Encourage foreign trade enterprises to export provincial textile products." 
Given the language of the cited measure, please explain why this measure and other 
related implementing measures were not notifi ed pursuant to Article 25 of the Subsidies 
Agreement.  
39. The Notice of the People's Government of  Shandong Province on Printing and 
Distributing the Shandong Province Textile  Industry Adjustment Revitalization Plan  
(Lu Zheng Fa [2009] No. 48)
17 categorizes the textile industry to be a "pillar" industry. 
The entire plan, which includes guiding principl es and policies, appears to be specific to 
the textile industry and describes particular financial benefits that will be provided to 
the industry. For example: 
 
"Policy Support is increasing based on the nationwide implementation of the 
policy of driving internal demand. The State Council issued the Textile 
Industry Adjustment and Revitalization  Plan, giving greater fiscal, tax and 
financial support. ... credit support is given to enterprises which have good 
fundamentals but are troubled with operational and financial difficulties 
temporarily; greater help is given to  small- and medium-sized textile 
enterprises and guarantee institutions are encouraged to provide credit 
guarantee and financing service to ease  burdens on textile enterprises. In 
                                               
15 G/SCM/Q2/CHN/51, 21 October 2014; See program # 20. 
16 G/SCM/Q2/CHN/51, 21 October 2014; See program # 21. 
17 G/SCM/Q2/CHN/51, 21 October 2014; See program # 22. G/SCM/Q2/CHN/64 
 
- 18 - 
 
  addition ... technical transformation interest subsidy policies have been 
issued to provide policy support to in dustry transformation and upgrading." 
"Give Greater Support Concerning Fiscal  and Taxation Policies. First, take 
concrete measures to carry out preferential fiscal and taxation policies. Exert 
greater efforts in policy publicity and implementation, actively guide 
enterprises to make good and full use of preferential fiscal and taxation 
policies, and strengthen supervision and inspection over policy execution, so 
that the preferential policies will be em ployed fully, properly  and flexibly. At 
the same time, fiscal and taxation depa rtments at all levels shall fully play 
their role, actively studying and formulating supporting fiscal and taxation policies and tax administration measures  to boost industry adjustment and 
revitalization. Second, actively in tegrate special fiscal funds …"  
Given the language of the cited measure, pl ease explain why this measure and related 
implementing measures were not notified pursuant to Article 25 of the Subsidies 
Agreement. 
 40. The Notice of the People's Government of Henan Province on Printing and 
Distributing the Henan Province Textile Industry Adjustment Revitalization Plan  
(Yu Zheng [2009] No. 75)
18 categorizes the textile industry to be a "strategic pillar" 
industry. The entire plan, which includes guid ing principles and policies, appears to be 
specific to the textile industry and describe s particular financial benefits that will be 
provided to the industry. For example: 
 
"Give Greater Fiscal and Taxation Su pport ... comprehensively use special 
provincial fiscal funds to support  structure adjustment, technical 
transformation and energy conservation  and emission reduction projects of 
textile enterprises." 
"… support policies intended to grant in centives to enterprises by making use 
of local retained part of the VAT and income tax revenues imposed on newly 
established textile and garment enterp rises in industrial cluster areas." 
"… attach importance to the constructi on of about 30 specialized textile and 
garment parks, and give greater support  in terms of land, fiscal and tax 
policy, financing and environmental prot ection to improve industry transfer 
accommodating capability. Support spec ialized textile and garment parks in 
their efforts to establish public service platforms with respect to product 
test, R&D, logistics and em ployee training to promot e cluster-style industry 
transfer. The special investment promot ion fund of the Province will grant 
reward to major textile industry transfer projects." 
Given the language of the cited measure, pl ease explain why this measure and related 
implementing measures were not notified pursuant to Article 25 of the Subsidies Agreement. 
 
41. The Guangdong Province Textile Industry  Adjustment and Revitalization Plan  
(Yue Fu [2009] No. 164 
19 categorizes the textile industry to be a "traditional 
competitive" industry. The entire plan, whic h includes guiding principles and policies, 
appears to be specific to the textile industry  and describes particular financial benefits 
that will be provided to the industry. For example: 
 
"(II) Give Greater Credit Support to Textile Enterprises. Properly implement relevant policies issued by the State and give greater support to textile 
enterprises regarding working capital for production and operation purpose. 
... expand direct-financing channels for them, encourage financial institutions 
to develop innovative credit produc ts, improve the SME guarantee system, 
and give priority support to small and medium-sized textile enterprises that 
                                               
18 G/SCM/Q2/CHN/51 21 October 2014; See program # 23. 
19 G/SCM/Q2/CHN/51 21 October 2014; See program # 24. G/SCM/Q2/CHN/64 
 
- 19 - 
 
  meet industry policies and that have markets, technologies and development 
prospects." 
"(III) Give Greater Financial Support  to Textile Industry Structure 
Adjustment. Make good use of all specia l funds in an overall view to support 
energy conservation and emission re duction, public service platform, 
technical innovation, technical transformation and brand construction of the textile industry…" 
Given the language of the cited measure, pl ease explain why this measure and related 
implementing measures were not notified pursuant to Article 25 of the Subsidies Agreement.  
42. The Document of the Jiangsu Provincial  People's Government (Su Zheng Fa [2009] 
No. 84) Notice of the Provincial Government on Printing and Issuing the Jiangsu 
Province Textile Industry Adjustment  and Revitalization Plan Outline
20 categorizes the 
textile industry as a "conventional pillar" in dustry. The entire measure, which includes 
guiding principles and policies, appears to be specific to the textile industry and 
describes particular financial benefits that wi ll be provided to the industry. For example: 
 
"(I) Strengthen credit support. Carry ou t state credit policies for the textile 
industry, encourage financial institutions to strengthen their credit support for textile enterprises, and grant support for circulating funds for enterprises 
with a good basic situation but with temporary financial difficulties. Grant 
more sufficient credit support for fixed assets to important technical upgrade 
projects that conform to industrial po licy. Encourage guarantee authorities to 
provide credit guarantees and financ ing service for textile enterprises." 
"(II) Carry out a brand strategy. Formul ate relevant policies for supporting 
and protecting brands, support advant ageous enterprises to establish R&D 
centers, and vigorously promote constr uction of independent brands. Make 
full use of various national and prov incial dedicated funds supporting the 
development of foreign and economic  trade, support the export of 
indigenous-brand textiles…"  
Given the language of the cited measure, pl ease explain why this measure and related 
implementing measures were not notified pursuant to Article 25 of the Subsidies Agreement. 
 
Replies to Questions 37-42 
 
The US already raised relevant questions according to Article 25.8 of the SCM Agreement in 
documents G/SCM/Q2/CHN/46 and G/SCM/Q2/CHN/51. China has responded to them in the new and full notification up to 2014 and at the re gular meeting of the Committee on Subsidies and 
Countervailing Measures in October 2015. Please refer to the contents of China's notification and 
relevant meeting minutes. China is preparing the subsidy notification at sub-central government 
level, and will submit it to the WTO as soon as it is completed. For local programs, the US may refer to that notification later. Please raise questions according to Article 25.1 of the 
SCM Agreement regarding the new and full notification of China. 
 Renewable Energy 
 
43. The Renewable Energy Law, adopted by the 14th Session of the Standing 
Committee of the 10th National People's Congress
21 appears to target the development 
and utilization of renewable ener gy for energy development. The law is specific to the 
renewable energy which includes non-fossil energy of wind, solar, water, biomass, 
geothermal and ocean energies and describes particular financial benefits that will be 
provided to the industry. For example: 
 
                                               
20 G/SCM/Q2/CHN/51 21 October 2014; See program # 25. 
21 G/SCM/Q2/CHN/42 11 October 2011; See program # 1. G/SCM/Q2/CHN/64 
 
- 20 - 
 
   "[Article 24] The state finance shall set up an exclusive fund for the 
development of renewable energy to support the following activities…" 
 "[Article 25] As for the projects of development and utilization of renewable 
energy…the financial institutions ma y provide preferential loans with 
financial interest payments." 
 "[Article 26] The State shall give preferen tial taxation to projects listed into 
the catalogue of guidance for industrial development of renewable energy. 
The specific measures thereof sha ll be enacted by the State Council." 
Given the language of the cited measure,  please explain why this measure and 
implementing programs were not notified pursuant to Article 25 of the Subsidies Agreement. 
 
44. The Auto Industry Adjustment and Revitalization Plan
22 appears to be specific to 
the automobile industry and describes particular  financial benefits that will be provided 
to the industry. For example: 
 
 "Intensify investment in technology advancement and transformation. In the 
next three years, arrange RMB 10 billion in the newly added central budget to 
be used as technology advancement and transformation special fund, to 
provide key support for auto manufacturing enterprises to upgrade products… "  
Given the language of the cited measure, pl ease explain why this measure and related 
implementing measures were not notified pursuant to Article 25 of the Subsidies 
Agreement.  
45. The Interim Measures for Administering the Special Fund of the Renewable Energy 
Development in Yunnan  Province [No. 237]
23 appears to be specific to the renewable 
energy industry and describes particular financ ial benefits that will be provided to the 
industry. For example: 
 
 "Article 2 Yunnan Province Special Fund  of Renewable Energy Development" 
(hereinafter "the Special Fund") referred to in this document means the special 
fund arranged by provincial fiscal budge t, and specifically used to support the 
development of renewable energy." 
 "Article 7 The Special Fund provides support in the forms of free grant and loan 
interest subsidies." 
 "Article 8 Science and technology re search, standard formulation, and 
renewable energy resources exploration,  evaluation and relevant information 
system construction for renewable en ergy key technology transformation 
projects that are listed in national and provincial top research projects, shall 
usually receive appropriate support  in the form of free grant." 
 "Article 9 Renewable energy develo pment and utilization projects or 
demonstrative projects that are listed in national renewable energy industry 
development guidance catalogue and me et the credit terms, shall usually 
receive appropriate support in the fo rm of loan interest subsidies." 
Given the language of the cited measure, pl ease explain why this measure and related 
implementing measures were not notified pursuant to Article 25 of the Subsidies Agreement. 
 
                                               
22 G/SCM/Q2/CHN/42 11 October 2011; See program # 25 page 4. 
23 G/SCM/Q2/CHN/42 11 October 2011; See program # 30 page 4. G/SCM/Q2/CHN/64 
 
- 21 - 
 
  Reply to Questions 43-45 
 
The US already raised relevant questions according to Article 25.8 of the SCM Agreement in documents G/SCM/Q2/CHN/46 and G/SCM/Q2/CHN/51. China has responded to them in the new 
and full notification up to 2014 and at the re gular meeting of the Committee on Subsidies and 
Countervailing Measures in October 2015. Please refer to the contents of China's notification and relevant meeting minutes. China is preparing the subsidy notification at sub-central government 
level, and will submit it to the WTO as soon as it is completed. For local programs, the US may 
refer to that notification later.   Please raise questions according to Article 25.1 of the SCM Agreement regarding the new and full 
notification of China. 
 High and New Technology Zones 
 
46. The Tianjin Economic-Technological Developm ent Zone Provision on Promoting the 
Development of High and New Technology Sectors
24 appears to be specific to the high 
and new technology industries located in a designated area and describes particular 
financial benefits that will be prov ided to the industry. For example: 
 
 "[Special Fund] The Administrative Commi ssion allocates 5% of the disposable 
fiscal revenue each year to set up  the Tianjin Economic Technological 
Development Area (TEDA) Scientific and Technological Development Fund. 
Supporting policies, funds, and awards….." 
 "[Rent Subsidies]….production houses rented by high and new technology 
enterprises at the initial stage in the Development Zone… we  shall give them 
up to three years rent subsidy, and the total amount of the subsidy is not to 
exceed a million yuan." 
 "[Special Fund for Software and Integr ated Circuit Design Industries] Every 
year, set up a special fund of 5 millio n yuan for the software industry to 
support the building of public service pl atforms of software technology and the 
development of the software industry; ev ery year, set up a special fund of 10 
million yuan for the IC design industry is to give priority support to the building 
of IC design public service platforms and the development of the IC design 
industry." 
 "[Credit Guarantee] The Development Zone  is to set up a special fund of 20 
million yuan for special risks in credit guarantees to provide services such as 
circulating funds, financing, and guaran tees to small-and medium-size high and 
new technology enterprises through the TE DA small enterprise credit guarantee 
center." 
 "[Loan Discounts]For scientific and tec hnological industrialization projects of 
start-up type for high and new techno logy enterprises, [we]encourage and 
support interest subsidizing and bank lo ans to expand their production scale. 
[We shall] give enterprises subsidies in lin e with the annual interest of the loan 
that is calculated in accordance with the benchmark interest rate. The longest 
interest subsidy term is three years, an d the upper limit of the total amount of 
the interest subsidy is three million yuan." 
Given the language of the cited measure, pl ease explain why this measure and related 
implementing measures were not notified pursuant to Article 25 of the Subsidies Agreement.  
47. The Notice of People's Government of Beijin g Municipality on Printing and Issuing 
the Several Provisions on Further Promot ing High and New Technology Industry 
Development No. 38
25 appears to be specific to the high and new technology industry 
                                               
24 G/SCM/Q2/CHN/51 21 October 2014; See program # 99. 
25 G/SCM/Q2/CHN/51 21 October 2014; See program # 103. G/SCM/Q2/CHN/64 
 
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  and describes particular financial benefits that will be provided to the particular 
industry. For example:  
 "II. The municipal government establishes a special fund for encouraging the 
development of new and high-tech industries." 
 "The municipal government sets up technological innovation funds for 
supporting the transformation of ne w and high-tech achievement. The 
investment institutions that are esta blished and guided with funding from 
departments including the Municipal Fi nance Bureau, Municipal Science and 
Technology Commission, Municipal Pla nning Commission, and Administrative 
Committee of the Zhongguancun Scienc e and Technology Park, and the 
government raises funds through mu ltiple channels. These investment 
institutions promote the transformation of new and high-tech achievements by 
way of market research input, project development, venture investments, loans 
with discounted interest, and loan guarantees." 
 "The municipal government sets up sp ecial funds for the development of the 
Zhongguancun Science and Technology Park, with an emphasis on supporting 
the construction of infrastructure within the park as well as the transformation 
of new and high-tech achievements."  
 "The Municipal Economic Commission  and the Municipal Science and 
Technology Commission are to allocate no less than 50% of the technological 
transformation funds, restructuring f unds, and science and technology funds 
annually to support new and high-tech ac hievements, transformation projects, 
and joint implementation projects for in dustry, education and research by way 
of interest subsidy, capital fund inje ctions, and ... research and development 
subsidy." 
Given the language of the cited measure, pl ease explain why this measure and related 
implementing measures were not notified pursuant to Article 25 of the Subsidies 
Agreement.  Reply to Questions 46-47 
 The US already raised relevant questions according to Article 25.8 of the SCM Agreement in documents G/SCM/Q2/CHN/46 and G/SCM/Q2/CHN/ 51. China has responded to them in the 
subsidy notifications for the periods of 2005-2008 and 2009-2014 and also at the regular meeting 
of the Committee on Subsidies and Countervailing Measures in October 2015. Please refer to the contents of China's notifications and relevant meeting minutes. China is preparing the subsidy 
n o t i f i c a t i o n  a t  s u b - c e n t r a l  g o v e r n m e n t  l e v e l ,  a n d  w i l l  s u b m i t  i t  t o  t h e  W T O  a s  s o o n  a s  i t  i s  
completed. For local programs, the US may refer to that notification later.  Please raise questions according to Article 25.1 of the SCM Agreement regarding the new and full 
notification of China. 
  
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