G/SCM/Q2/CHN/ 116 
 
25 October 2022  
(22-7965) Page: 1/8 
Committee on Subsidies and Countervailing Measures  Original: English  
 
SUBSIDIES  
REPLIES TO QUESTIONS POSED BY CANADA1 
REGARDING THE NEW AND FULL NOTIFICATION OF CHINA2 
The following communication, dated and received on 24 October  2022, is being circulated at the 
request of the delegation of China . 
 
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I. Subsidies at the Central Government Level  
Question 1  
The details of Program 49 ( Special Fund for Foreign Economic and Trade Development ) 
refer to providing support to underdeveloped regions to "improve international business 
operation capacities".  
a. Does this program support specific sectors? If so, please elaborate on the sectors 
eligible for this program.  
b. Does the program include support for firms to export products to other markets? 
If so, what are the conditions attached for the recipients to rec eive the support.  
Reply :  
Special fund for foreign economic and trade development clearly stipulates  that the fund  shall not 
be used as prohibited subsidies. The conditions for support of the f und shall not be contingent upon  
export performance.  
Question 2 
Programs 45 ( Subsidy fund for agricultural resources and ecological 
protection);  67 (Fisheries stocks enhancement and fish fries releasing); and 71  (Subsidy 
for reform in tax and fee on refined oil for fishery ) describe subsidies provided directly to 
fishers for various purposes including ecological protection, fishery stock enhancement 
and industrial restructuring.  
a. Please elaborate on what type of f ishing activities must fishers be engaged in to 
be eligible to receive subsidies under these programs?  
Reply :  
Please refer to the eligible fishing activities for the abovementioned three programs stipulated in the 
Subsidy Notification  2021.  
 
1 G/SCM/Q2/CHN/110  
2 G/SCM/N/372/CHN  G/SCM/Q2/CHN/ 116 
 
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  Question 3  
Program 49 ( Special Fund for Foreign Economic and Trade Development ) aims to 
"optimize the structure of international trade," develop trade in service and technology," 
according to the "factor approach".  
a. Could China provide more details on the factor approac h and whether any of 
subsidies provided under the program linked to exports?  
Reply :  
Special fund for foreign economic and trade development clearly stipulates  that the fund  shall not 
be used as prohibited subsidies. The conditions for support of the f und shall not be directly linked 
with export performance. The factor approach refers to the method of assigning weights or standards  
to relevant factors for fund allocation.  
Question 4  
Program 51 ( Additional Subsidy for Renewal Energy Tariffs ) promotes the utilization of 
renewable energy broadly by "grid enterprises."  
a. Could China provide more details on the type of renewable energy or renewable 
energy projects this subsidy will support and on the conditions attached to the 
provision of these sub sidies?  
Reply :  
The subsidy is determined by the amount of electricity generated by renewable energy and 
connected to the grid.  
For details, please refer to China's Renewable Energy Law:  
Article 19 − The on -grid tariff of renewable energy power generation  projects shall be determined 
by the competent pricing authority under the State Council according to the power generation 
characteristics of different types of renewable energy and the conditions of different areas, and in 
accordance with the principles c onducive to promoting the development and utilization of renewable 
energy and economic rationality, and shall be adjusted in due course to keep up with the 
advancement of renewable energy development and utilization technologies. The on -grid tariffs 
should  be made public.  
The on -grid tariffs of renewable energy power generation projects subject to tender in accordance 
with Para. 3 of Article 13 shall be the tariffs determined by the winning bid, but must not be higher 
than the on -grid tariffs of renewable e nergy power generation projects of the same kind determined 
in accordance with the provisions of the preceding paragraph.  
Article 20  − If the expenses incurred by a grid enterprise in purchasing electricity from renewable 
energy sources at the on -grid tariff determined in accordance with the provisions of Article 19 are 
higher than the difference between the expenses incurred calculated at the average on -grid tariff of 
conventional energy generation, the expenses shall be apportioned in the selling tariff. The specific 
measures shall be formulated by the competent pricing authority under the State Council.  
Article 21  − Reasonable connecti on fees and other reasonable fees paid by a grid enterprise for the 
purchase of renewable energy may be included in its transmission cost and recovered from the 
selling tariff.  
b. Is the provision of support conditional on meeting a local content threshold?  
Reply:  
No. There is  not such condition.  G/SCM/Q2/CHN/ 116 
 
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  Question 5  
Program 69 ( Subsidy Fund for Fishery Development and the Scrapping, Dismantling and 
Renovating of Vessels ) includes support to promote the development of distant water 
fishing and improve habitability of distant water fishing vessels.  
a. How does this subsidy fund intend to "promote the sustainable and healthy 
development of distant water fishing"?  
Reply :  
1. Reduce the intensity of marine fishing and promote ship reduction and conversion. 2. Restore the 
ecological environment in the waters, restore marine fishery resources, and promote the 
development of aquaculture, recreational fisheries and other industries. 3. Improve the safety and 
performance of fishing vessels, enhance the capacity of f ishing ports to prevent and mitigate 
disasters, improve the level of fishing safety, and ensure the safety of fishermen and their property. 
4. Optimize and adjust the industrial layout, protect the ecological environment of coastal waters 
and keep the spac e for aquaculture at a stable level. 5. Promote the sustainable and healthy 
development of distant -water fishing and make distant -water fishing vessels more reliable, safer, 
more pollution -free and habitable. 6. Accelerate the structural transformation of the shipbuilding 
industry and phase out vessels with high energy consumption, high emissions and poor safety and 
technical performance at an earlier date.  
The subsidy is not limited to distant -water fishing.  
b. What activities must distant water fishing vessels be engaged in to be eligible for 
this fund?  
Reply :  
1. Subsidies for fishermen involved in ship reduction, no longer engaging in marine fishing; 
2. Subsidies for scrapping, dismantling and upgrading of fishing vessels, in particular outdate d and 
wooden ones, those that fail to meet national inspection standards for fishing vessels, have poor 
safety and anti -pollution performance, fail to meet the standards for energy conservation and 
environmental protection, and those that are destructive t o marine fishery resources. 3. Subsidies 
for the construction of fishery equipment and facilities, such as artificial reefs, deep -water cages for 
aquaculture and public welfare projects in distant -water fishing bases. 4. The conservation and 
utilization of  international fishery resources that have met the conditions upon approval, and have 
no violation of laws or regulations during the development and utilization of resources. 5. Advance 
scrapping and renewal of distant -water fishing vessels, dismantling of  inland fishing vessels, and 
renovation and building of demonstration vessels.  
The subsidy is not specific to distant -water fishing.  
Question 6  
Program 71 ( Subsidy for Reform in Tax and Fee on Refined Oil for fishery ) aims, among 
other things, to protect fisheries resources and maintain the livelihood of fishers.  
a. Could China clarify how the fuel subsidy will be provided to fishers or fishing 
vessels that "no longer engage in fishing, and whose fishing vessels are dis mantled 
or transformed into artificial reefs"?  
Reply :  
The subsidy is for the reform in tax and fee on refined oil, i.e. a change of purpose for the fund 
previously used to subsidize fuel consumption. It is provided to: 1) support fishermen and 
enterprises  no longer engaging in fishing, or whose fishing vessels are dismantled or transformed 
into artificial reefs; 2) support fishery resources conservation, fishing ban, the development and 
application of information technology for fishery administration, navi gation aids in fishing ports, 
fishing vessel navigation and safety equipment, pond standardization, plant -based transformation G/SCM/Q2/CHN/ 116 
 
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  for water recycling and the construction of other aquaculture infrastructure; 3) support fishing and 
aquaculture individuals affe cted by the tax and fee reform, who shall comply with the laws and 
regulations on fishery resources conservation. The subsidy is completely unhooked from fuel use.  
b. Could China clarify what "fisheries resources conservation" is supported by this 
subsidy?  
Reply :  
The subsidy reduces the fishing intensity, and promotes the conservation of fishery resources, the 
adjustment of industrial structure, and the sustainable development of fishery by supporting 
fishermen and enterprises who are no longer engaged in fishing, whose fishing vessels are 
dismantled or transformed into artificial reefs, and who practice fishery resources conservation, and 
fishing bans, etc.  
II. Subsidies at the Sub -Central Government Level  
Question 7  
The following questio ns are in reference to programs related to "resolving overcapacity", 
namely:  
• Beijing Municipality Program 1.2 ( Fund for Resolving of Overcapacity in Coal Sector 
and Resettlement and Relocation of Employees );  
• Heibei Province Program 2.2 ( Reward and Subsid y to Resolve Overcapacity in Coal 
Industry ); 
• Inner Mongolia Autonomous Region Program 5.4 ( Reward and Subsidy Fund to 
Resolve Overcapacity in Steel and Coal Industries );  
• Anhui Province Program 12.3 ( Reward and Subsidy Fund to Resolve Overcapacity in 
Steel  and Coal Industries );  
• Guangxi Zhuang Autonomous Region Program 20.2 ( Special Reward and Subsidy for 
Restructuring of Industrial Enterprises );  
• Yunnan Province Program 25.1 ( Fund to Resolve Overcapacity ); and  
• Shaanxi Province Program 27.3 ( Fund to Resolve  Overcapacity ). 
a. Please provide a more detailed explanation of what "resolving overcapacity" 
entails, and how these programs will achieve addressing steel overcapacity.  
Reply :  
According to the Notice by the Ministry of Finance and the State Taxation Administration of Policies 
Concerning House Property Tax and Urban Land Use Tax for Capacity Reduction and Structural 
Adjustment (No. 107 [2018] of the Ministry of Finance) issued on  30 September  2018, the 
implementation period of these policies i s from 1 October 2018 to 31 December 2020 and the objects 
are enterprises that suspend production or operation or close down according to the requirements 
of capacity reduction and structural adjustment, including iron and steel industry.  
b. Please confirm wh ether any of the subsidies provided support relocating steel 
capacity to other locations in China or to steel production in another country.  
Reply :  
In order to promote capacity reduction, structural adjustment, as well as industrial transformation 
and upg rading, the Ministry of Finance, jointly with the State Taxation Administration, issued the 
Notice on Policies of House Property Tax and Urban Land Use Tax Concession for Enterprises 
Involving the Reduction of Excessive Capacities and Structural Adjustment  (Cai Shui [2018] No.  107) 
in September 2018. It clarified relevant policies on house property tax and urban land use tax. This 
policy applies to companies that have suspended  production or closed, instead of those seeking to 
expanding capacity. In accorda nce with Guo Fa [2013] No. 41 and Guo Fa [2016] No. 6, China 
strictly prohibits new steel production capacity in any name.  G/SCM/Q2/CHN/ 116 
 
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  Question 8  
Regarding Shanghai Municipality Program 9.1 ( Special Fund for Development of 
International Economy and Trade ) which establishes subsidies for eligible enterprises to 
"change development mode of foreign trade".  
a. Could China confirm if this support targets specific sectors? If so, please elaborate 
on the type of sectors eligible for this program.  
Reply :  
For details, please refer to Measures for the Use and Management of Special Fund for Foreign 
Economic and Trade Development of Shanghai Municipality (H. Sh. C. [2016] No.207).  
b. Does this support include support for firms to export products to foreign markets?  
Reply:  
The program is not linked to exports.  
Question 9  
Zhejian Province Program 11.1 ( Subsidy for Policy Mutual Insurance of Fishery ) aims to 
help fishers mitigate risks of natural disasters and to ensure social stability of fishing 
areas.  
a. Could China clarify what is meant by "ensure social stability of fishing areas"?  
Reply :  
The Grant for policy -based fishery mutual insurance in Zhejiang Province is employer liability mutual 
insurance (personal insurance) and fishing boat mutual insurance. The k ey support areas of special 
funds for marine and fishery comprehensive management and industrial development in Zhejiang 
Province include supporting fishermen to quit fishery capture and switch to other sector or jobs , 
ecological transformation in fishery  sector , protection and utilization of marine resources, and basic 
investigation of marine and fishery, etc.  
The aim of the program is to enhance the ability of fishermen to withstand natural disasters and 
ensure social stability in fishing areas.  
Question  10 
Regarding both Zheijian Province Programs 11.1 ( Subsidy for Policy Mutual Insurance of 
Fishery ) and 11.7 ( Fund to Support Projects of Standardized Construction of Fishing 
Vessels ). 
a. What specific activities must recipients be engaged in to be eligible for this 
subsidy?  
Reply :  
Program 11.1 is not limited to specific activities, and the subsidy is provided as below:  
(I) The employer liability mutual -aid insurance is subsidized at a rate of 20% of the amount of the 
mutual contributions payable fo r the liability for mutual -aid insurance for accidental death and for 
that for accidental disability. If the insured amount exceeds RMB 500,000 for accidental death and 
RMB 300,000 for accidental disability, the premium of the corresponding mutual -aid insu rance is not 
eligible for the subsidy.  G/SCM/Q2/CHN/ 116 
 
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  (2) Mutual -aid insurance for fishing vessels is subsidized at 20% of the amount of mutual -aid 
insurance premium payable for total loss liability.  
Program 11.7: It will be mainly used for conserving public fishery reso urces in the province, reducing 
marine fishing intensity, supporting fishermen to shift to non -fishing activities, improving 
comprehensive fishery safety control, and building safety facilities for fishing vessels and fishing 
ports.  
Question 11  
Regarding S handong Province Program 15.2 ( Special Fund to Support the Development of 
Distant Water Fishing ). 
a. What requirements must be met in order for  an "enterprise" to be considered 
eligible for a grant under this fund?  
Reply :  
The Program aims to encourage distant water  fishing enterprises to invest in Rizhao, Shandong.  
b. Does the program support, among other things, the construction of new vessels?  
Reply:  
No, it does not support the construction of new vessels.  
Question 12  
Guangxi Zhuang Autonomous Region Program 20.21 ( Subsidy for Reform in Refined Oil 
Prices ) provides subsidies to reduce the costs of operating motor fishing vessels.  
a. What conditions must be met in order for owners of registered motor fishing 
vessels to be eligible to receive this grant (e.g. fishing in certain geographic areas, 
the size of the vessel,  etc.)?  
Reply :  
The grant is for owners of registered motor fishing vessel s.  
Question 13  
Regarding Chongqing Municipality Program 22.15 ( Subsidy for Reform in Refined Oil ) 
which seeks to conserve fishery resources, prohibit fishing and to incentivize fishers to 
reduce the number of fishing vessels and switch new jobs.  
a. What act ions, other than "quitting fishing," constitute "fishery resource 
conservation" under this program?  
Reply :  
The subsidy covers (1) fishing ban, (2) fishery resources conservation, and (3) guiding fishermen to 
reduce the number of fishing vessels and shift to non -fishing activities.  
Question 14  
While China notified one investment guidance fund, i.e. Qinghai Prov ince Program 29.2 
(Fund for College Students Innovation and Entrepreneurship ), the WTO Secretariat – in 
its last trade policy review report of China3 - has identified several investment guidance 
 
3 WT/TPR/S/415  G/SCM/Q2/CHN/ 116 
 
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  funds which appear to be financed by the central and local g overnments and SOEs to 
support different industries including in advanced manufacturing, new materials and 
innovative technologies and industries. A study from the Center for Security and 
Emergency Technology reports that as of 2020, China had set up "1,74 1 guidance funds, 
with a cumulative registered target size of 11 trillion RMB".4 
a. Can China provide an explanation for why other guidance funds have not been 
notified?  
Reply :  
The list of written questions regarding China 's subsidies should be based about the programs already 
notified.  
Question 1 5 
Daliang City of Liaoning Province Program 32.2 ( Fund for Marine Fishery Development ) 
provides funding for activities such as fishery stock enhancement and fishers' personal 
accident insurance and purchase of standardized aquacultural fishing vessels.  
a. Could China clarify what individuals or enterprises are eligible to receive a grant 
through this fund?  
Reply :  
The recipients are administrative units, enterprises, coop erative organizations and individuals 
engaged in marine fisheries in Dalian.  
b. What activities must individuals or enterprises be engaged in to be eligible to 
receive this grant?  
Reply :  
Priority is given to such areas as quality and safety inspection of aq uatic products, marine 
environmental monitoring and forecasting, fisheries safety management, prevention and control of 
aquatic animal disease  and protection of new species, subsidies for the proliferation and release of 
fishery resources, pilot test premi um subsidies for accidental injury insurance for fishermen, etc.  
Question 1 6 
Among other things, Xiamen City of Fujian Province Program 15.2 ( Special Fund for Marine 
and Fishery Development ) provides support for the development of distant -water fishing.  
a. Could China elaborate further of the what does supporting the development of 
distant -water fishing entails? Does that include an increase in fishing capacity?  
Reply :  
For details, please refer to the Administrative Measures of Xiamen  Municipality for the Special Fund 
for the Development of Marine Economy, which already expired at the end of 2019. It does not 
include an increase in fishing capacity.  
b. What requirements must be met in order for  an "enterprise" to be considered 
eligible for this program?  
 
4 https://cset.georgetown.edu/wp -content/uploads/CSET -Understanding -Chinese -Government -
Guidance -Funds.pdf  G/SCM/Q2/CHN/ 116 
 
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  Reply :  
The distant -water fishing grant is for enterprises that are registered and incorporated in Xiamen 
after 17 September 2012, whose projects undertaken are in normal operations, and which have had 
zero major workplace safety incidents or major violations of l aws and regulations in the past 
three  years, as well as distant -water fishing vessels included in the plan issued by the Ministry of 
Agriculture and Rural Affairs for fishing vessel renewal and transformation, and distant -water fishing 
vessels (including a uxiliary vessels) approved by the Ministry of Agriculture and Rural Affairs prior 
to 31 December 2015.  
 
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