G/SCM/Q2/CHN/117  
 
25 October  2022 
(22-7966) Page: 1/2 
Committee on Subsidies and Countervailing Measures  Original: English  
 
SUBSIDIES  
REPLIES TO FOLLOW -UP QUESTIONS1 FROM  
THE UNITED KINGDOM TO REPLIES2 REGARDING  
THE NEW AND FULL NOTIFICATION OF CHINA3 
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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Prefe rential tax policies for high -tech enterprises  
Follow -up to  question 1: 
1. Could China please outline the eligibility criteria for an enterprise to qualify as a 
"high -tech enterprise" under this scheme?  
Reply : 
Please refer to Article 11 of the Notice of the Ministry of Science and Technology, the Ministry of 
Finance and the State Administration of Taxation on Issuing the Revised Version of Administrative 
Measures for the Identification of High and New Technology Enterprises (G. K. F. H. [2016] No.32), 
Article 28 of The Enterprise Income Tax Law of the People's Republic of China and Article  93 of its 
Implementation Regulations.  
Preferential tax policies for Clean Development Mechanism  
Follow -up to  question 5:  
2. Could China please provide examples of the types of activity supported by the 
Clean Development Mechanism?  
Reply : 
As for the types of activities supported by the CDM, China is a non -Annex I Party to the Kyoto 
Protocol, according to which, Chinese enterprises may voluntarily develop CDM emissions reduction 
projects, and gain income by selling the CDM emissions reductio n amount to Annex I Parties. 
According to the internationally accepted CDM -related rules, the projects supported by CDM involve 
renewable energy, energy conservation, energy efficiency, fuel substitution and comprehensive 
utilization of resources.  
The Not ice of the Ministry of Finance and the State Administration of Taxation on Issues Concerning 
the Enterprise Income Tax Policy for China's Clean Development Mechanism Fund and Enterprises 
Implementing Clean Development Mechanism Projects (C. SH. [2009] No.3 0) makes it clear that: 
the income from transfer of GHG emissions reduction amount enterprises implementing CDM 
 
1 G/SCM/Q2/CHN/113  
2 G/SCM/Q2/CHN/ 111. 
3 G/SCM/N/372/ CHN. G/SCM/Q2/CHN/117  
 
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  projects hand over to the state as per the stipulated proportion, pursuant to the Administrative 
Measures for the Operation of CDM Projects (Ord er No.37 of NDRC, Ministry of Science and 
Technology, Ministry of Foreign Affairs and Ministry of Finance), is allowed to be deducted when 
calculating the taxable income.  
Preferential VAT for large passenger aircraft and new regional aircraft   
Follow -up to  questions 9 & 10 : 
3. Could China please clarify whether it is collecting relevant data and outline when 
this information is expected to become publicly available?  
Reply : 
No such data is collected.  
General questions  
Follow -up to  question 15: 
4. Could China please clarify whether it is collecting relevant data and outline when 
this information is expected to become publicly available?  
Reply : 
No such data is collected.  
Follow -up to question 16 : 
5. Could China please confirm whether state -owned banks provided any preferential 
lending to SOEs during the notification period?  
Reply : 
In accordance with laws and regulations in China such as the Law on Commercial Banks, commercial 
banks operate independently, assume risks on their own and take responsibility  for their own profits 
and losses. When conducting credit business, they shall strictly verify the credit record of borrowers 
and provide guarantee for the recovery of loans as agreed. During the notification period, Chinese 
state-owned banks strictly comp lied with relevant laws and regulations, followed the principles of 
equality, free will and fairness in business dealings with customers, and treated enterprises of all 
types of ownership equally and fairly. Both state -owned and non -state-owned enterprises  were 
subject to the same criteria, and each line of credit was priced in a market -oriented way according 
to the risk level of borrowers and loan, loan term and benchmark interest rate.  
Follow -up to question 17: 
6. Noting China's response that government depa rtments do not intervene in the 
decision -making of government guidance funds, could China please clarify what 
involvement government departments have in government guidance funds?  
Reply : 
The government guidance funds were founded in accordance with The Company Law of the People's 
Republic of Chi na and other applicable laws, and have established a market -oriented fund 
governance structure accordingly. Together with other investors, the government contributes to the 
funds and shares the investment returns. The funds are independent market entities operating in a 
market -oriented manner, whose day -to-day operations are free from any government intervention.  
 
 
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