WORLD TRADE  
ORGANIZATION  G/SG/Q1/CHN/27 
27 April 2006 
 (06-1971) 
Committee on Safeguards Original:   English 
  
 
NOTIFICATION OF LAWS AND REGULATIONS UNDER 
ARTICLE 12.6 OF THE AGREEMENT 
 
Replies to the Questions Posed by JAPAN
1 Regarding the  
Notification of the PEOPLE'S REPUBLIC OF CHINA2 
 
 
 The following communication, dated 20 April 2006,  is being circulated at the request of the 
Delegation of the People's Republic of China.  
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 Q1. The Consistency of Article 31 of Regulati ons of PRC on Safeguards with GATT and 
WTO-SG Agreement 
 
 Following the comments by PRC at th e previous TRM meeting, measures under 
Article 31 of Regulations of PRC on Safeguards “are different from rebalancing measures.”  
Please specify on which provisions of GATT, WTO-SG Agreement and/or Dispute Settlement 
Understanding the above measures based . 
 Reply:  Based on the provisions of DSU, China is en titled to resort to the multilateral dispute 
settlement as a countermeasure in order to bring an y relevant discriminatory measure taken by a WTO 
Member into conformity.  If a relevant measure is  taken by a non WTO member, China is free to take 
any action as a countermeasure.     According to Article 6 of the Foreign Trade Law of the People’s Republic of China, “the 
People’s Republic of China, in respect of the Forei gn Trade, in accordance with international treaties 
or agreements to which the People’ s Republic of China is a contracti ng party or acceding party, grants 
the other contracting parties or acceding par ties the most-favoured-nation treatment, national 
treatment or other treatments, or on the principles of mutual advantage and reciprocity, grants the 
other party the most-favoured-nation treatment, nati onal treatment or other treatments”.  Article 7 
stipulates that “in the event that any country or re gion applies discriminatory prohibitions, restrictions 
or other like measures against the People’s Republic  of China in respect of trade, the People’s 
Republic of China may, depending on actual circ umstances, take countermeasures against the 
aforesaid country or region.”  Therefore, Article 31 of Regulation on Safeguards is the application of 
the principle of reciprocity in the area of safeguard  measures embodied in the Foreign Trade Law.   
Until now, China has not applied Article  31 of Regulation on Safeguards. 
 
                                                     
 
1 G/SG/Q1/CHN/25/Rev.1 
2 G/SG/N/1/CHN/2/Suppl.3 G/SG/Q1/CHN/27 
Page 2  
 
  Q2. Lack of Explicit Provisions in Domestic Acts 
  The Acts and regulations on safeguards of PRC do not have specific provisions regarding some rules provided under GATT and WTO-SG Agreement.  Although PRC stated that some of them, such as considerations of “unforeseen developments,” were assured at its 
investigation procedures, GOJ requests PRC to pr ovide those rules explicitly in the relevant 
laws and regulations.  
 
• Regulations of PRC on Safeguards do not stipulate as one of the conditions for taking 
Safeguard measure “unforeseen developments”, prescribed in GATT Article XIX: 1(a).  In the previous TRM meeting, PRC stated that  it had made investigations in consistent 
with WTO-SG Agreement, even though with out any specific provisions.  In order to 
assure the consistency with the WTO-SG Agreement, GOJ requests PRC to provide the 
above-mentioned rule clearly in its laws and regulations .   
 Reply: 
 
 In the course of safeguard investigation, China will take “unforeseen developments” into 
consideration and give certain e xplanation in this regard.   
 
• Article 3.1 of WTO-SG Agreement stipulat es that “the opportunity to respond to the 
presentations of other parties and to submit their views, inter alia , as to whether or not the 
application of a safeguard measure would be in th e public interest” shall be given.  However, 
Article 19 of Regulations of PRC on Safegua rds only provides, “[t]he application of 
safeguard measures shall be in the public interest.”  From the point of view of the clarity and  
the consistency with WTO-SG Agreement, GOJ  requests PRC to stipulate explicitly “the 
opportunity to respond to the presentations of othe r parties and to submit their views” in the 
laws and regulations. 
 
Reply: 
  In accordance with Article 12 of Regulation on Safeguard, “The Ministry of Commerce shall 
provide opportunities for importers, exporters and ot her interested parties to present their views and 
supporting arguments”.   
• Regarding compensation measures (Article 8.1 of WTO-SG Agreement), PRC commented in 
the previous TRM meeting, “[c]onsultations under Article 24 of Regulations of PRC on 
Safeguards respond to the matter of the re levant provisions of WTO Agreement on 
Safeguards and the article includes compensati on measures.”  However, the article only 
requires making available “adequate opportuniti es for consultations,” and does not mention 
any compensation measures.  GOJ request PRC to include a provision about compensation 
measures in the relevant regulations, making it fully consistent with WTO Agreement on 
Safeguards. 
 Reply:   Consultations under Article 24 of the Re gulation include the consultation on the 
compensation measures.  If China takes safeguard me asures, it will honour the obligations set by the 
WTO Agreement.  
  G/SG/Q1/CHN/27 
 Page 3 
 
 
  Q3. Disclosure of Data for Investigations 
  With regard to the definition of “domestic  industry,” PRC commented at the previous 
TRM meeting that it was specified in Article 10 of Regulations of PRC on Safeguards, and PRC had conducted investigations based on the article.  But, in the case of the steel safeguard, PRC 
limited the scope of its investigation to eight domestic steel manufacturers, and deemed the sum 
of the above eight manufacturers’ productions as  the total production of domestic industry, 
because of the reason that their outputs accounted  for a major part of the total production in 
PRC.  However, investigation authority of PRC did not disclose any specific data on output 
quantities in its findings.  GOJ request PRC to  make the relevant data public along with its 
findings in its future investigation.  
Reply:   
 Article 14 of the Regulation on Safeguards stipulat es that “The explanations to the findings of 
an investigation on the increase in quantity of im ports, injuries and the reasons thereof shall be 
published by the Ministry of Commerce”. China w ill publish relevant information in accordance with 
this Article. 
 
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