WORLD TRADE  
ORGANIZATION  G/SCM/Q2/CHN/20 
27 July 2006 
 (06-3621) 
Committee on Subsidies 
and Countervailing Measures Original:   English 
 
 
 
SUBSIDIES  
 
Questions from TURKEY Regarding the  
New and Full Notification of CHINA1 
 
  The following communication, dated 26 July 2006, is being circulated at the request of the Delegation of Turkey.  
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GENERAL
 
 
1. Can China please explain what criteria must be met in order to be listed in the following 
categories: 
 
• Catalogue of High and New Tec hnology Products of China. 
• Catalogue of the Industries, Products and Technol ogies Particularly Encouraged by the State. 
• Catalogue for the Guidance of the Foreign Investment Industries. 
• Catalogue for the imported products not subject to  tax exemption in foreign invested projects. 
 2. Can China please indicate how many compan ies and in which amount benefited under the 
following programmes per year? 
 
• Preferential Tax Policies for Foreign-Invested Export Enterprises. 
• Preferential Tax Policies for Chinese-Foreign Equity Joint Ventures Engaged in Port and 
Dock Construction. 
• Preferential tax policies for foreign-invested en terprises engaged in agriculture, forestry or 
animal husbandry and foreign-invested ente rprises established in remote underdeveloped 
areas. 
• Preferential tax policies for enterprises with  foreign investment which are technology-
intensive and knowledge-intensive. 
• Preferential Tax Policies for Enterprises Making Little Profits. 
• Preferential Tax Policies for Enterprises which Provide Employment for Unemployed People. 
• Subsidy for purchasing agricultural machinery and tools. 
• Fund for international market exploration by SMEs (both for SMEs and enterprises and 
organizations which provide services to SMEs. 
• Preferential tax policies for foreign invested enterprises and foreign enterprises which have 
establishments or place in China and are e ngaged in production or business operations 
purchasing domestically produced equipment. 
                                                     
 
1 G/SCM/N/123/CHN G/SCM/Q2/CHN/20 
Page 2  
 
  • Fund provided for agricultural industrialization. 
• Preferential tax policies for domestic ente rprises purchasing domestically produced 
equipment for technology upgrading purposes. 
 3. Can China please indicate otherwise (in the ab sence of the programme) applicable income tax 
rate for foreign-invested export en terprises for the fo llowing programmes? 
 
• Preferential Tax Policies for Foreign-Invested Export Enterprises. 
• Preferential Tax Policies for Chinese Foreign Equity Joint Ventures Engaged in Port and 
Dock Construction. 
• Preferential tax policies for foreign-invested en terprises established in remote underdeveloped 
areas. 
• Preferential tax policies for enterprises with  foreign investment which are technology-
intensive and knowledge-intensive. 
• Preferential Tax Policies for Enterprises making Little Profits. 
• Preferential Tax Policies for Enterprises which Provide Employment for Unemployed People. 
• Preferential tax policies for foreign invested enterprises and foreign enterprises which have 
establishments or place in China and are e ngaged in production or business operations 
purchasing domestically produced equipment. 
• Preferential tax policies for domestic ente rprises purchasing domestically produced 
equipment for technology upgrading purpose. 
 
Preferential Tax Policies for Fo reign-Invested Export Enterprises
 
 1. Can China please explain the tax rate appli cable under this programme, if an enterprise 
reinvests its share of profit obtained from the ente rprise directly into that enterprise and thereby 
increasing its registered capital after the expiration of  "period of enterprise in come tax exemption or 
reduction?".  2. In the "New and Full Notification of China" dated 13 April 2006, it is mentioned that export-
oriented development zones and other such enterpris es subject to enterprise income tax at the rax rate 
of fifteen per cent  that qualify under the above-mentioned c onditions shall pay enterprise income tax 
at the tax rate of ten per cent.  Can China please explain the criteria governing the eligibility to benefit 
from reduced fifteen per cent tax rate, other than  being located in the special economic zones and 
economic and technological development zones? 
 
Preferential Tax Policies for Chinese-Foreig n Joint Ventures Engaged in Port and Dock 
Construction  
 
1. Can China please explain the minimum foreign eq uity share in the joint venture allowed to 
benefit from this programme? 
 
Preferential tax policies for foreign-invested en terprises engaged in agriculture, forestry or 
animal husbandry and foreign-invested enterprises  established in remote underdeveloped areas  
 
1. Can China please explain what criteria must be met in order to be "remote underdeveloped 
areas"? 
 2. Can China please indicate otherwise applicable income tax rate for agriculture, forestry or 
animal husbandry industries?   G/SCM/Q2/CHN/20 
 Page 3 
 
 
  Preferential tax policies for enterprises with fo reign investment which are technology-intensive 
and knowledge-intensive  
 
1. Can China please explain what criteria must be  met in order to be technology-intensive and 
knowledge-intensive investment"? 
 
Preferential Tax Policies for Enterprises  making Little Profits  
 
1. Can China please indicate the regional breakdown of the number of companies benefited under this programme? 
 
Preferential Tax Policies for Enterprises which Provide Employment for Unemployed People
 
 
1. Can China please indicate the regional breakdown of the number of companies benefited under this programme? 
 
2. Can China please explain whether certain cond itions are applicable regarding the employment 
period of the unemployed people necessary to receive this benefit?  
Subsidy for purchasing agricultural machinery and tools
 
 1. Can China please indicate the regional breakdown of the number of companies benefited 
under this programme?  2. Can China please elaborate on the criteria governing the approval of the applications? 
 Fund for international market exploration by SMEs
 
 
1. Can China please explain the criteria governin g the determination of the financial support 
given to the companies?  2. Can China please explain the type of activ ities supported under the subheading "exploring a 
new market"? 
 
Preferential tax policies for foreign invested enterprises and foreign enterprises which have 
establishments or place in China and are engaged in production or business operations 
purchasing domestically produced equipment  
 
1. Can China please indicate whether an appli cation process exists with regard to this 
programme and the criteria governing the e ligibility and receipt of the benefit? 
 
Fund provided for agricultural industrialization  
 1. Can China please elaborate on the criteria governing the approval of the applications? 
 
Preferential tax policies for domestic enterpri ses purchasing domestically produced equipment 
for technology upgrading purpose  
 1. Could China please provide further details rega rding the policy objectives of this programme? 
 2. Can China please indicate how many compan ies and in which amount benefited under this 
programme per year? 
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