. /.  WORLD TRADE  
ORGANIZATION  G/SCM/Q2/CHN/13 
23 September 2005 
 
 (05-4232) 
Committee on Subsidies 
and Countervailing Measures  Original:   English 
 
   
TRANSITIONAL REVIEW MECHANISM PURSUANT TO 
SECTION 18 OF THE PROTOCOL ON THE ACCESSION 
OF THE PEOPLE'S REPUBLIC OF CHINA 
 
Questions from Japan to CHINA with regards to
 
China's Transitional Review Mechanism on Subsidy Practices  
 
 
 The following communication, dated 21 September 2005, is being circulated at the request of 
the Delegation of Japan.  
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 Japan welcomes that, in the fourth year after China’s accession, implementation of its commitments on subsidies has evolved from simple progress into a cruising phase.  The transitional review mechanism has been useful for making Ch ina’s transitional efforts more efficient and 
productive, and it is a pleasure for Japan to have contributed to this process. 
 
 In accordance with Section 18 of the Protoc ol on the Accession of the People’s Republic of 
China, which states that "China shall provide releva nt information to each subsidiary body in advance 
of the review" and in the spirit of cooperation in rendering the TRM process most efficient and 
effective, Japan requests China to provide prior to the meeting of the Committee on Subsidies and 
Countervailing Measures, the responses and relevant  information to the following questions and 
comments. 
  
1. Failure to submit its annual subsidies notification 
 
 Since China has not yet made notifications under Article 25.1 of the SCM Agreement, it is 
quite difficult for other WTO Members to know th e actual situation of various subsidy schemes in 
China. Again, Japan strongly requests China to co mply with its obligations to submit its annual 
notifications of subsidies under the SCM Agreemen t so as not to undermine the transparency that 
Members have worked hard to develop. At the same time, please explain the reason why China has 
not yet submitted any notifications to the SCM Committee. 
  
2. VAT refund scheme for copper 
 
 Japan would like to request China to provide detailed information, including a text of law on 
VAT refund scheme for copper, which China stated  was consistent with WTO rules at the SCM 
committee last November and October, 2003.  Our industry, especially the smelting copper industry, G/SCM/Q2/CHN/13 
Page 2  
 
has a very keen interest on the scheme and shows gr ave concern for the difficulty to get relevant 
information on this scheme.  In the consultation he ld on May, 2004 between the vice-minister of the 
Ministry of Commerce, China, and that of the Mi nistry of Economy, Trade and Industry, Japan, China 
stated that it was reviewing VAT refund scheme for copper including the option of partial abolition of 
the scheme, and further stated that it would provide  more accurate informa tion after consulting with 
the section in charge in the Government of Ch ina. At the SCM Committee and the working-level 
consultation on April, 2005, Japan requested again the detailed information. However, Japan has not 
yet been informed. Japan appreci ates if China provides us with the information on any progress, 
including the schedule of abolition of this scheme. Besides, please let us know when Japan could get 
detailed description of the refund scheme.  Japa n would like China to provide them as soon as 
possible. 
 
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