G/SCM/Q2/CHN/61  
 
27 April 2016  
(16-2371)  Page: 1/11  
Committee on Subsidies and Countervailing Measures  Original: English  
 
SUBSIDIES 
REPLIES TO QUESTIONS1 POSED BY CANADA 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.  
_______________ 
  Regional Subsidies  
 
Question 1  
 
Article 25 of the ASCM requires members notify any subsidy granted or maintained 
within their territories. Could China explain why only central government level programmes have been notified? Could Ch ina please indicate when sub-central 
government level programmes will be notified? 
 Reply: 
 
China is preparing the subsidy notification at sub-central government level, and will submit it to 
the WTO as soon as it is completed.  
 
Amount of support 
 Question 2 
 
Article 25.3 of the ASCM requires that subsidy notifications include information on subsidy per unit or, in cases where this is not possible, the total amount or the annual 
amount budgeted for that subsidy. For many of the notified programmes, there are no 
figures on the amount of support provid ed. Could China please indicate when 
information on subsidy per unit or on the total amount or the annual amount budgeted 
will be provided? 
 
Reply: 
 
The statistics system for tax expenditure has not be en established in China. Therefore, the amount 
of tax forgone as a result of the implementation of preferential tax policies is not available at 
present. This explains the lack of information on subsidy per unit or on the annual total amount of certain notified programmes in China's subsidy notification, mostly those in form of preferential tax 
treatment. 
 Preferential tax policies for high or  new technology enterprises (p. 11) 
 
                                               
1 G/SCM/Q2/CHN/54. 
2 G/SCM/N/220/CHN-G/SCM/N/253/CHN-G/SCM/N/284/CHN. G/SCM/Q2/CHN/61 
 
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  Question 3 
 Could China identify the eligibility criteria for projects to be approved for this program? 
For example, what type of enterprises within what industry can apply for a financial 
contribution? Could China provide recent exam ples of the types of projects that have 
received support from this fund?  
Reply: 
 
This is a preferential tax programme, in which identified high and new tech enterprises enjoy a reduced enterprise income tax rate of 15%. The programme does not involve financial 
appropriations, any financial contribution or fund. 
 According to Article 4 of the Administrative Measures for Determination of High and New Tech 
Enterprises , GUO Ke Fa Huo No. 172 [2008], a high and new tech enterprise identified under the 
Measures may apply for enjoying the preferential tax policies in pursuance of the Law of the People's Republic of China on En terprise Income Tax, Regulations for the Implementation of Law of 
the People's Republic of China on Enterprise Income Tax, the Law of the People's Republic of China 
on the Administration of Tax Collection and the Detailed Rules on the Implementation of the Law of the People's Republic of China on the Administration of Tax Collection.  
According to Article 10 of the Administrative Me asures for Determination of High and New Tech 
Enterprises, the following conditions shall be simultaneously satisfied for an enterprise to be identified as a high and new tech enterprise: 
 
(1) The enterprise was registered within the territory of China (but excluding the 
enterprise registered in Hong Kong, Chin a, Macao China and Chinese Taipei) and has 
independent intellectual property of the core technologies in its key products 
(services) by way of independent research and development, acceptance of transfer, donation or merger during the recent three years, or by way of exclusive licensing for 
five years or longer; 
(2) The scientific and technical personnel with junior college degree or above account for 
over 30% of the total number of employees of the enterprise, of whom the research 
and development personnel account for over 10% of the total number of employees of 
the enterprise the same year; 
(3) The enterprise has been continuously conducting research and development activities 
for the purpose of acquiring new knowledge  of science and technology (excluding 
humanities and social sciences), innovatively employing new knowledge of science and 
technology or substantially improving the technologies or products (services), and the proportion of its total research and develo pment expenditure during the recent three 
accounting years in its total sales revenue meets the following requirements: 
(a) If the sales revenue of the enterprise during the latest year is less than 50 
million yuan, the proportion shall not be lower than 6%; 
(b) If the sales revenue of the enterprise during the latest year is 50-200 million 
yuan, the proportion shall not be less than 4 %; 
(c) If the sales revenue of the enterprise during the latest year is more than 200 
million yuan, the proportion shall not be less than 3%. 
The proportion of the aggregate research and development expenditure incurred within 
China in the total research and development expenditure shall be no less than 60%. If the enterprise was registered less than 3 years ago, the calculation shall be based on the actual number of years of its business operation. 
(4) The enterprise's revenue from high and new tech products (services) accounts for 
over 60% of its total revenue during the same year; and 
(5) The enterprise's level of organizing and managing research and development, capacity 
of transforming scientific and technological achievements, number of independent 
intellectual property rights, growth in sales and total assets as well as other indicators meet the requirements in the Guidelines on the Administration of Determination  of 
High and New Tech Enterprises (to be formulated separately). 
 Preferential tax policies for enterprises with  foreign investment established in special 
economic zones (excluding Sh anghai Pudong Area) (p. 12) 
 G/SCM/Q2/CHN/61 
 
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  Question 4 
 Could China clarify which types of companies have been the major beneficiaries of this 
tax policy? 
 
Reply: 
 
This tax policy is not for enterprises in any specific industry or sector, rather, it applies to all 
foreign-invested enterprises located in special economic zones (excluding Shanghai Pudong Area). Therefore, there is no such question as which types of companies are the major beneficiaries of 
the policy. It's worth mentioning that this tax policy is a transitional preferential policy for foreign-
invested enterprises after the implementation of the new Enterprise Income Tax Law in 2008, and 
will be invalidated at the expiration of the transitional period. After that, foreign-invested enterprises will enjoy the same preferential enterprise income tax as that for domestic enterprises 
and there will be no tax preferential treatment tailored to foreign-invested enterprises. 
 Question 5 
 
Paragraph one, in the section on how the subs idy is provided and to whom, states that 
foreign enterprises which have establishmen ts or places in these Special Economic 
Zones are eligible for the special tax rates.  Can China confirm that foreign enterprises 
are also eligible for the benefits ou tlined in paragraphs 2, 3 and 4? 
 Reply: 
 The preferential tax treatment mentioned in paragraphs 2 and 3 applies to foreign-invested enterprises in specific areas, while that in paragraph 4 applies to resident enterprises (including 
foreign-invested and domestically-invested enterprises) in specific areas. None of the tax 
preference contained in these three paragraphs applies to foreign enterprises that have establishments or places in the above special economic zones.  
This tax policy is a transitional preferential policy for foreign-invested enterprises after the 
implementation of the new Enterprise Income Ta x Law in 2008, and will be invalidated at the 
expiration of the transitional period. After that, foreign-invested enterprises will enjoy the same 
preferential enterprise income tax as that for domestic enterprises and there will be no tax 
preferential treatment tailored to foreign-invested enterprises.  
Preferential tax policies for enterprises with foreign investment established in the three 
gorges of Yangtze River economic zone (p. 15)  Question 6 
 
Could China provide more information and ex amples of what is meant by "projects 
encouraged by the State"?  
 
Reply: 
 
According to Article 7.3 of the Income Tax Law of the People's Republic of China for Enterprises 
with Foreign Investment and Foreign Enterprises, foreign-invested enterprises established in the 
old districts of the cities where the coastal economic open areas, special economic zones or economic and technological development zones are located, or in other regions designated by the 
State Council, and are under the categories of energy, transportation, ports, docks or other 
projects encouraged by the state, may be levied a reduced rate of 15% of enterprise income tax. 
Specific measures shall be formulated by the State Council. The Income Tax Law of the People's 
Republic of China for Enterprises with Foreign Investment and Foreign Enterprises was abolished 
after the new Enterprise Income Tax Law came into effect in 2008. In addition, this tax policy is a transitional preferential policy for foreign-invest ed enterprises after the implementation of the new 
Enterprise Income Tax Law in 2008, and will be invalidated at the expiration of the transitional 
period. After that, foreign-invested enterprises will enjoy the same preferential enterprise income tax as that for domestic enterprises and there will be no tax preferential treatment tailored to foreign-invested enterprises.  
 G/SCM/Q2/CHN/61 
 
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  Preferential tax policies in the Western Regions (p. 17) 
 Question 7  
Could China provide a list of the major industri es that have been beneficiaries of this 
particular policy? Which enterprises "establis hed in the western regions and/or engaged 
in the encouraged or advantageous industri es" have been the bigge st beneficiaries of 
the VAT exemption? Could China provide in formation regarding the amount of tax 
forgone under this Programme?  Reply: 
 In terms of beneficiaries of this tax preferenti al policy, enterprises engaged in the encouraged 
industries refer to those having the items included in the Catalogue of Encouraged Industries in 
Western Regions as their major business, and with the income from the major business accounting 
for over 70% of its total revenue. The Catalogue of Encouraged Industries in Western Regions is promulgated separately. Before its promulgation, enterprises falling within the scope of the 
Catalogue for the Guidance of Industrial Restructuring (2005 Version and 2011 Version), 
Catalogue for the Guidance of the Foreign Investment Industries (2007 Amendment) and Catalogue for the Guidance of the Advantageous Industries in Central and Western Regions for Foreign Investment (2008 Amendment), after being confirmed by tax authorities, may be levied a 
reduced rate of 15% of enterprise income tax. Th e Catalogue of Encouraged Industries in Western 
Regions was promulgated on August 20
th 2014, and went into effect on 1 October 2014. For details 
of the Catalogue, please visit http://www.sdpc.gov.cn/zcfb/zcfbl/201408/t20140822_623299.html . 
As for the amount of tax foregone, since the statistics system for tax expenditure has not been 
established in China, related information is not available.   
Preferential tax treatment for building mate rials products produced with integrated 
utilization of resources (p. 21)  Question 8 
 
Could China clarify whether steel products ar e included as manufactured products listed 
in the Catalogue? If so, could you provid e a detailed list of which steel products?  
 
Reply: 
 
For more information about the products, please refer to the Catalogue of Comprehensive Use of 
Resources for Preferential Enterprise Income Tax Treatment (2008 Version) , Cai Shui 
No. 117 of 2008, which can be downloaded at http://www.chinatax.gov.cn/n8103 41/n810755/c1225541/content.html . 
 
Preferential VAT on hydr opower products (p. 27) 
 
Question 9 
 Could China clarify which companies have  been the major beneficiaries of the 
preferential VAT? Of the power stations that have benefited the most from this 
preferential tax, could China provide a list of which industries/companies have been 
their major customers?   
Reply: 
 
All hydroelectric power stations (including pumped-storage power stations) with installed capacity 
exceeding one million KW and selling self-produced electrical power products can enjoy the 
preferential treatment of VAT. The policy does  not differentiate ownership types and has no 
particular beneficiary. All qualified power stat ions can enjoy the preferential tax treatment 
according to regulations. 
 Tax policies for the research and development of enterprises (p. 37) 
 G/SCM/Q2/CHN/61 
 
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  Question 10 
 Could China explain how "new technologies, new products and new techniques" are defined under this programme? Which "new technology" companies have been the 
major beneficiaries of this tax policy? 
 Reply: 
 According to Article 3 of the Administrative Measures for the Before-tax Deduction of Enterprise Research and Development Expenses (for Trial Implementation) (Guo Shui Fa No. 116 of 2008), 
"research and development activities" that enjoy this tax policy refer to the continuous research 
and development activities with clear objectives conducted by enterprises for the purpose of 
obtaining new knowledge of science or technology (excluding humanities and social sciences), creatively using new scientific and technological knowledge or substantially improving 
technologies, techniques or products (services). The expression "creative use of new scientific and 
technological knowledge or substantial improvement of technologies, techniques or products (services)" means that enterprises have made  valuable achievements in innovation of 
technologies, techniques and products (services)  through research and development activities, 
which can promote the technologies and techniques in the relevant industries in the region (province, autonomous region, municipality directly under the Central Government or city with independent planning status) to a leading place, bu t such activities as conventional upgrading of 
enterprises' products (services) or direct applic ation of disclosed scientific research results and 
other activities (for instance, direct adoption of disclosed new techniques, materials, devices, products, services or knowledge, etc.) shall be excluded. 
 
This preferential tax policy is not for enterprises in any specific industry or sector. Any enterprise that meets the above conditions, regardless of its ownership type, and no matter it's foreign-
invested or domestically-invested, may be entitl ed to the policy. Therefore, there is no such 
question as which companies are the major beneficiaries of the policy.   Research and development fund for industrial technologies (p. 38) 
 
Question 11  
What are the criteria for "approved rese arch and development projects"? Which 
industrial technologies qualify for this partic ular fund? Could China provide a list of the 
companies/industries that have been approved for funding? 
 
Reply: 
 Research and development projects are approved  through review of applications or bidding 
procedures. Important technological research and development projects of commonweal or public 
interest are eligible for the fund.  
Development fund for SMEs (p. 39) 
 Question 12 
 
Could China clarify what the definition fo r SMEs is in order to qualify for this 
development fund? Furthermore, do state enterprises qualify for this development fund? Could China identify which industries are targeted for support in their investments 
abroad? 
 Reply: 
 SMEs are qualified according to the Notice on Printing and Distributing the Stipulations of 
Classification Standards for Small- and Medium-sized Enterprises , MIIT Lian Qi No. 300 of 2011. 
The fund does not differentiate ownership types, and does not involve overseas investment.  
 Special fund for the development of international economy and trade (p. 42)  G/SCM/Q2/CHN/61 
 
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  Question 13 
 Could China clarify whether this fund is the successor to the "Fund for promotion of 
coordinated development of foreign trade and economic relations among regions" 
(Section 38)? Could China clarify what the elig ibility criteria (i.e. sizes) are? Similarly, 
are enterprises or institutions from all indust ries eligible to qualify? Could China clarify 
whether there is any export performance or import substitution requirements associated 
with this fund? 
 Reply: 
 
Since April 2014, the fund for promotion of coordinated development of foreign trade and 
economic relations among regions has been incorpor ated into the special fund for the development 
of international economy and trade.  According to Article 11 of the Measures for the Administration 
of the Special Fund for Foreign Trade and Economic Development , MOF Circular Cai Qi No. 36 
of 2014 (hereafter referred to as "the Measures") , enterprises and institutions applying for the 
special fund for the development of internationa l economy and trade should meet the following 
conditions: 
 
(1) Independent legal entities registered within the territory of China according to law. 
Those engaging in overseas business using the fund for purposes specified in Article 
6.3 of the Measures (i.e. conducting outbound investment, project engineering, 
foreign labour cooperation, and construction of overseas economic and trade cooperation zones, etc.) shall also have b een registered or gone through procedures 
according to the law of the countries (or regions) where the projects are located; and 
such contracts or cooperation agreements shall have entered into force. 
(2) Having obtained relevant business licenses or been examined and approved or filed 
for record. 
(3) Having opened up businesses for the purposes specified in Article 6 of the Measures. (4) Having not seriously violated any laws or  regulations in the recent five years, and 
having not delayed the payment of any payable financial fund. 
(5) Having submitted statistical materials as required by the country.  
(6) Meeting other conditions as stipulated. 
 
All enterprises meeting the above conditions may apply for the fund, regardless of their types of 
ownership. The application of this fund is no t subject to any export performance or import 
substitution requirement. 
 
Fund for Promoting the trade of agricultural, light industry and text ile products (p. 44) 
 Question 14 
 
Could China specify how "agricultural, light industry and textile products" are defined 
under this programme? Regarding the form of the subsidy, could China also explain 
what is meant by "Financial Appropriat ions"? Could China confirm whether this 
programme is ongoing?  
Reply: 
 
"Agricultural, light industry and textile products" are defined as agricultural products, light industrial products and textile products. Regarding the form of the subsidy, "Financial 
Appropriations" mean granting of fiscal funds. This fund was abolished in 2010 according to 
MOFCOM Announcement No. 109 of 2010 and no longer exists.  
 
Preferential tax policies for enterprises engage d in projects of preliminary processing of 
agricultural, forest, animal and fishery products (p. 45)  
Question 15 
 Could China indicate if this programme is  a successor to the programme "Preferential 
tax policies for enterprises engaged in projects  of preliminary processing of agricultural, 
forest, and animal and fishery products (Sec tion 42)"? Could China provide an estimate G/SCM/Q2/CHN/61 
 
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  of the number of companies or types of compan ies that have received support under this 
programme? China notes that "Enterprise income tax on the income derived by an 
enterprise from stipulated projects of pr eliminary processing related to farming, 
forestry, animal husbandry and fisheries ma y be exempted or reduced." Could China 
please provide the definition of "stipulated pr ojects" if it has changed from its previous 
notification? Could China identify the criteria by which stipulated projects by enterprises 
may qualify for income tax exemptions or re ductions? Could China identify the criteria 
for "preliminary processing" (versus secondar y processing) in the areas of farming, 
animal husbandry and fisheries? Could Ch ina comment on the frequency by which 
enterprises that qualify for preferential  tax policies are exempted from paying 
enterprise income tax? Could China identify the average reduction in enterprise income 
tax for qualifying enterprises? Could China confirm whether this programme is ongoing? 
 Reply: 
 This programme was Programme 54 in China's Subsidy Notification covering the notification period from 2005 to 2008. This policy has been in effect si nce 2008. Projects of preliminary processing of 
agricultural, forest, animal and fishery products , unless otherwise specified, are subject to the 
Industrial Classification for National Economic Ac tivities (GB/T4754-2002). For the definition of 
"preliminary processing", please refer to the MOF and SAT Notice on Issuing the Scope of 
Preliminary Processing of Agricultural Products Entitled to Preferential Policies on Enterprise 
Income Tax (for Trial Implementation)(Circular Caishui No. 149 of 2008, and the Supplementary 
Notice on the Scope of Preliminary Processing of Ag ricultural Products Entitled to the Preferential 
Enterprise Income Tax  (Circular Caishui No. 26 of 2011). 
 
Fund for specialized economic co operatives of farmers (p. 45) 
 
Question 16 
 Could China explain what the definition is for "qualified specialized cooperatives of 
farmers", and if there have been any changes fr om its previous notification for this type 
of program? It is mentioned that local governments review applications for fund 
allocation. Could China clarify what the cr iteria for such review processes are, 
specifically what kinds of activiti es qualify or disqualify eligibility? 
 
Reply: 
 
According to the Notice of Administrative Measures on Fund for Specialized Cooperatives of 
Farmers  (MOF Circular Cai Nong No.156 of 2013), the specialized cooperatives of farmers includes 
farmers' professional cooperatives, joint stock cooperatives, rural water using cooperation organizations, specialized technique associations, etc. The cooperatives of farmers applying for this 
fund shall meet the following conditions: 
(1) Registered according to relevant regulations with a charter in line with the principle of 
"run, managed and used by farmers". 
(2) With sophisticated financial management  system and meeting the requirements of 
codes such as democratic management decision-making. 
(3) With sound service networks, and can effectively provide members of cooperatives 
with professional agricultural services. 
(4) With management and maintaining skills to ensure that the assets generated by 
projects play a long-term role. 
(5) In principle, the number of cooperative members shall be no less than 100 
households, and the cooperative shall enjoy certain industrial basis. 
The fund for cooperatives shall be allocated with the consideration of local financial resources, development of specialized cooperatives of farmers, working ability of each area, and other 
relevant factors. 
Comparing with the abolished Provisional Administrative Measures on Fund for Specialized 
Cooperatives of Farmers  (MOF Circular Cai Nong No.87 of 2004), this 2013 Circular adds the 
content of "(4) with management and maintaining skills to ensure that the assets generated by 
projects play a long–term role". The applicable scope of the fund includes: (1) introducing new species and promoting new technology; (2) provid ing trainings and services in professional 
technology and management knowledge; (3) organizing standardized production; (4) preliminary 
processing, management, storage and preservation of agricultural products; (5) services such as G/SCM/Q2/CHN/61 
 
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  obtaining certification, brand cultivating, marketing and information consulting; (6) promoting 
innovative development of specialized cooperatives of farmers; (VII) other matters in improving services and management skills.  
Fund for subsidizing the training of  rural migrant labour force (p. 46) 
 Question 17 
 
To whom and how is the subsidy is provided? Who/which organizations would be qualified for providing training services to  farmers? Would foreign companies providing 
consulting services with establishments in Ch ina be qualified? Would foreign institutions 
without establishment in China be eligible? Could China define what types of training 
services to farmers qualify for this subsidy? For example, one of the policy objectives is 
to facilitate the migration of the rural labour  force, would non-farming related training 
be eligible for this subsidy? 
 Reply: 
 This subsidy is provided to rural labour force that needs training of non-agricultural skills. Funds are transferred to local finance to allocate. For example, in 2009-2010, the subsidy is mainly used for the purpose of conducting non-agricultural skills training of rural labour force to meet the 
requirements of urbanization. 
 Subsidy for promoting superior strains and seeds (p. 48) 
 
Question 18  
Could China clarify which crops or livestock  were targeted under the program? Could 
China provide evidence of the effectivene ss of this subsidy for promoting superior 
strains and seeds to increase both quality and quantity of their agricultural output? 
Regarding the form of the subsidy could Chin a also explain what is meant by "Financial 
Appropriations"?  
 Reply: 
 The subsidy was established in 2002 and provided to soybeans in the same year. In 2014, the subsidy was employed to crops including rice, wheat, corn, soybean, rapeseed, cotton, highland 
barley, peanut and potato, resulting in facilita ting the use of superior strains and seeds by 
farmers, accelerating the popularization of superi or strains and seeds. At present, the coverage 
ratio of superior strains and seeds in China's ma in crops has been stabilized at above 96%, the 
use of such strains and seeds has promoted the gr owth in grain yield and constitutes an important 
reason for the growth of grain output for 12 years in  a row. The form of this subsidy, i.e. financial 
appropriations, is to give farmers cash as subsidy. It is a grant.  
 
Subsidy for purchasing agricultural machinery and tools (p. 49) 
 Question 19 
 
Based on the description that the MOA and MOF jointly review applications for funds 
submitted by local governments; could Chin a clarify whether individual farmers and 
service providers can apply directly for th is subsidy? Could China clarify what the 
criteria is for determining what are "agricul tural machinery and tools" for eligibility for 
this subsidy? Could China identify the averag e rate of subsidy for agricultural machinery 
and tools for this programme? Is there a maximum subsidy cap to each individual 
farmer or service provider? Is the subsidy for made-in-China agricultural machinery and 
tools only? Would foreign agricultural machiner y and tools be eligible for the subsidy as 
well, and how could they become eligible to apply for the subsidy?  
 
Reply: 
 The objects of the subsidy for purchasing agricultural machinery and tools are individuals and 
agricultural production and management organizati ons that are directly engaging in agricultural G/SCM/Q2/CHN/61 
 
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  production. Purchasers of machinery or tools shall submit applications for the review and 
confirmation by government authorities. Products subject to subsidy must be identified for the popularization of agricultural machinery and tools, to ensure applicability, reliability and safety.  
Comprehensive subsidies for agricultural inputs (p. 49) 
 Question 20 
 
Could China confirm whether this programme is ongoing and clarify which agricultural 
inputs are eligible for this subsidy? Could China also explain the specific mechanisms by which compensation to farmers is calculated  in the circumstances of price hikes of 
agricultural inputs? For example, are paym ents calculated based on the percentage 
increase in an input's price, or are paymen ts made when prices exceed a predetermined 
target price? Could China identify the averag e rate of subsidy for farmer losses for this 
programme? Could China please provide a breakdown of the expenditures paid to 
support production of specific commoditi es by year (e.g., 2014 canola/rapeseed, 
soybeans, etc.)?  
 
Reply: 
 The main means of agricultural production covered by the comprehensive subsides for agricultural 
inputs are diesel and fertilizer. Considering the ch ange in price of agricultural inputs and grain 
price of the current year as well as the national financial resources, financial authorities determine the scale of the next year's comprehensive subsidies for agricultural inputs. The value of direct 
subsidy to farming households is calculated by th e area of the contracted land they own. Farming 
households are eligible for the subsidy whether they use the subsidy to purchase agricultural inputs or not, or whether they use the subsidy for the production of specific products. Therefore, 
the subsidy is non-product-specific, and there is no expenditure breakdown for specific 
commodities.  Direct subsidy to farmers (p. 50) 
 
Question 21  
Could China confirm whether this programme is ongoing? Could China clarify if the 
edibility criteria for direct payment eligibility have changed since its last notification for 
this type of program? If yes, please desc ribe the criteria. Coul d China clarify whether 
there is still no limit on the maximum amount  of direct subsidy paid per farmer? Could 
China identify examples of whom the direct payment is provided to? Would it be to the 
owners of the taxable area of farmland? How are direct payments determined in 
circumstances where land tenure is uncertain  or undefined? Could China provide further 
information on the effectiveness of this subs idy in terms of growth in the numbers of 
farmers, number of farms, farm  income or production data? 
 
Reply: 
 
This subsidy has been abolished since 2016. Ther e has been no change in the qualification and 
criteria for the subsidy since the last notification, eligible farmers for the subsidy are those with 
contracting right of land. In fact, taxable area of farmland is the same as that of contracted land. Land beyond the contracted land in principle cannot get subsidy. At present, the Chinese government only has information of subsidized area of land and value of subsidy, but has no 
information on the number of farmers, the number of farms or income.  
 Fund for agricultural comprehensive development (p. 51) 
 
Question 22  
Could China identify the eligibility criteria for projects to be approved for this fund? For 
example, can projects by individuals or priv ate enterprises qualify for this fund? Could 
China provide new examples of the types of projects that have re ceived support from 
this fund? 
 G/SCM/Q2/CHN/61 
 
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  Reply: 
 
The agricultural comprehensive development projects include land management projects and industrialized operation projects. According to Administrative Measures on National Fund for and 
Projects of Agricultural Comprehensive Development  (MOF Decree No. 60), the agricultural 
comprehensive development project management shall conform to the following principles: 
(1) Adjusting measures to local conditions and making overall planning; 
(2) Paying attention to development scale and industrialized operation; 
(3) Relying on technology and focusing on benefits; (4) Competing fairly and giving approval priority to excellent projects. 
Any individual or private enterprise that m eets these conditions may apply for this fund. 
 
Fund for disaster prevention and relie f in agricultural production (p. 54) 
 
Question 23 
 Could China clarify the eligibility criteria for "preventing and controlling agricultural 
disasters" that agricultural producers must ensure in order to qualify for this fund? 
Could China identify the average rate of su bsidy for farmer damages and losses caused 
by agricultural disasters for this programme?  
Reply: 
 
Agricultural disasters refer to agricultural natural disasters and agricultural biological disasters that 
cause serious threat and hazard to and cause significant losses to agriculture, animal husbandry 
and fishery. Agricultural natural disaster main ly includes: drought, flood, freeze injury, snow 
disaster, earthquakes, landslides, debris flow, ha ilstorm, storm surge, sea ice, grassland fires, 
etc.; and agricultural biological disaster mainly contains: diseases, insect attack, weed injury and 
rodent damage of crops, grassland rat damage, dise ases and pest injury, poison grass, red tides, 
etc. The fund for disaster prevention and relief in agricultural production is a special subsidy fund for the prevention, control and relief of disasters arranged by central finance budget. From 2009 to 
2014, the average rate of disaster relief in animal husbandry is 48.4%.  
 Subsidy fund for agricultural resources  and ecological protection (p. 55) 
 
Question 24  
Regarding subsidies on farmers' income loss du ring a period of farmland pollution, could 
China identify the average rate of subsidy fo r farmer income losses for this fund? What 
are the eligibility criteria for "farmland pollu tion" for farmers to qualify for this fund? 
 
Reply: 
 
At present, China mainly prevents farmland pollution through reducing the consumption of 
chemical fertilizers and improving the quality of cultivated land, etc. Relevant work is still in the 
pilot phase. Each pilot province formulates its specific implementation plan, and determines the scale and criteria of subsidy.  
 
Subsidy fund granted by Central Finance to close small enterprises (p. 78)  Question 25 
 
Canada notes that this program is targeted at small enterprises, but wonders whether China has similar programs for larger enterpri ses that may be operating in situations of 
overcapacity and excess production. 
 
Reply: 
 Small enterprises in smelting, chemical engineering, building materials, papermaking, tanning, 
printing and dyeing and brewing generally have th e problems of high energy consumption, heavy 
pollution and potential safety hazards. This fund aims at covering the expense of staff resettlement G/SCM/Q2/CHN/61 
 
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  for the laid-off employees from closed small enterprises in the above mentioned fields and other 
relevant expenses. China does not have similar fund tailored to large-scale enterprises.  
 
__________