WORLD TRADE  
ORGANIZATION  G/ADP/Q1/CHN/56 
G/SCM/Q1/CHN/56 13 April 2005 
 
(05-1528) 
Committee on Anti-Dumping Practices 
Committee on Subsidies and Countervailing Measures Original:   English 
 
 
NOTIFICATION OF LAWS AND REGULATIONS UNDER  
ARTICLES 18.5 AND 32.6 OF THE AGREEMENTS 
 
Replies to Questions Posed by the EUROPEAN COMMUNITIES1 
and the UNITED STATES2 Regarding the  
Notification of the PEOPLE'S REPUBLIC OF CHINA3 
  
 The following communication, dated 12 April 2005, is being circulated at the request of the Delegation of the People's Republic of China. 
 
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Replies to Questions of the European Communities on Countervailing Measure Legislation
 
(G/SCM/Q1/CHN/49) 
 
Q1:  Provisional measures:   Article 29 of the regulation does not mentio n all conditions enumerated in Article 17 
ASCM for the introduction of provisional measu res.  Can China please confirm that it will fully 
respect the provisions of Article 17 ASCM and, therefore, introduce provisional countervailing 
measures only after an investigation has been in itiated according to this regulation and public 
notice has been given to that effect and in terested parties have been given adequate 
opportunities to submit information and make  comments and only when the authorities 
concerned judge such measures necessary to  prevent injury being caused during the 
investigation? 
 Reply
 
  According to Article19, 20 and 26 of Regulations of the People’s Republic of China on 
Countervailing Measures, and Provisional Rules for Initiation of Countervailing Investigations,  the 
procedural and substantial requirements to apply a provisional measure have been in full compliance 
with Article 17 of ASCM.  
                                                     
 
1 G/ADP/Q1/CHN/49-G/SCM/Q1/CHN/49 
2 G/ADP/Q1/CHN/52-G/SCM/Q1/CHN/52 
3 G/SCM/N/1/CHN/1/Suppl.4 (1 December 2004) an d G/SCM/N/1/CHN/1/Suppl .3 (20 October 2004) G/ADP/Q1/CHN/56 
G/SCM/Q1/CHN/56 Page 2 
 
 
 Replies to the Questions of the United States on Countervailing Measure Legislation
 
(G/SCM/Q1/CHN/52)  
Q1. With regard to Article 4 of the notified reg ulations, please explain what other factors 
will be considered if it appears that a subsidy is specific though it may not meet the criteria under Article 4 (1-5). 
 
Reply
 
 
 According to the third item of Article 4 of Regulations of the People’s Republic of China on 
Countervailing Measures , when the authorities determine the sp ecificity of a subsidy, besides the 
Article 1 to 5, the factors such as the number of subsidized enterprises, the amount, proportion, length 
of time, and form of the subsidy received by enterprises shall be considered.  Q2. Article 4 of the notified regulations does not appear to describe whether a subsidy will 
be found to be specific if it is limited “in fact” to certain enterprises or industries, as provided for in Article 2.1(c) of the Agreement on Subsidies and Countervailing Measures (ASCM).  
Please explain whether and under what circumstances a subsidy will be found to be “in fact” specific.  
 
Reply
 
  According to the third item of Article 4 of Regulations of the People’s Republic of China on 
Countervailing Measures , a subsidy may be found to be “in fact” specific after serious consideration 
of some factors such as the number of subsidized enterprises, the amount, proportion, length of time, 
and form of the subsidy received by enterprises. 
 
Q3.  With regard to Article 6(4) of the notified reg ulations, please clarify that the provision of 
equity capital from a government shall not be considered as conferring a benefit unless the 
investment decision is regarded as inconsistent  with usual business practice (including for the 
provision of risk capital) of private investors in  the territory of that Member in accordance with 
ASCM Article 14(a).  
 
Reply
  
  In determining whether equity capital fro m a government constitutes subsidy, Chinese 
authorities take into account of whether the investme nt decision is in consistent with the usual 
investment practice.  
Q4.  Please clarify whether under Articles 6.5 and 6.6, the adequacy of remuneration will be 
determined in relation to the prevailing market conditions for the good or service in question in 
the country of provision or purchase, taking  into account price, quality, availability, 
marketability, transportation and other conditi ons of purchase or sale, in accordance with 
ASCM Article 14(d).  
 
Reply
 
 
 When Chinese authorities determine whether th e provision of goods or services or purchase 
of goods by a government is a countervailable subsid y, we will consider whether the remuneration is 
adequate by comparing it with prevailing market cond itions for the goods or service in question in the 
country of provision or purchase (including price, quality, availability, marketability, transportation 
and other conditions of purchase or sale)  G/ADP/Q1/CHN/56 
 G/SCM/Q1/CHN/56 
 Page 3 
 
 
  
Q6. With regard to Article 15 of the notified regulations, please confirm that evidence with 
regard to the amount and nature of the subsidy will need to be provided in accordance with ASCM Article 11.2(iii) and not merely evidence that a subsidy exists.  
 
Reply   According to Article 16 of Provisional Rules for Initiation of Countervailing Investigations , 
the evidence attached to the application shall not  only show the existence of a subsidy, but also 
explain the nature and amount of the subsidy in question. 
 
Q7. With regard to Article 29 of the notified regulations, please confirm that the provisional 
duties guaranteed by deposits or bonds will be  equal to the amount of the provisionally 
calculated subsidization per ASCM Article 17.2.  
 
Reply
  
  China will apply Article 29 of Regulations  of the People’s Republic of China on 
Countervailing Measures  
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