(40)

Shenghua’s argument concerning the compatibility of Article 2(6a) of the basic Regulation with WTO law is of similar nature to the one submitted by Ketong and was addressed in recital (30). With respect to Shenghua’s arguments on the relation between state ownership, as well as property and bankruptcy laws, and significant distortions, the Commission recalled that according to the first and fourth indent of Article 2(6a)(b) of the basic Regulation, presence in the market in question of enterprises which operate under State ownership, control or policy supervision, as well as the lack, discriminatory application or inadequate enforcement of bankruptcy, corporate or property laws, are among the elements relevant for the assessment of existence of significant distortions. The Commission noted in this connection that other than presenting this general point, Shenghua did not call into the question the Commission’s detailed analysis in recitals (43), (44) and (46) of the provisional Regulation and recital (38). Shenghua’s arguments concerning the company’s independence from the government are more specific, however, they cannot alter the Commission’s assessment in recitals (47) and (48) of the provisional Regulation. First, while Shenghua’s reference to political parties in other countries is in any event irrelevant in the present context, the Commission noted the ever stronger CCP control over businesses in general (see recital (41) of the provisional Regulation) and of the calcium silicon sector in particular (see recitals (47) and (48) of the provisional Regulation). Second, as to Shenghua’s CEO being at the same time the Party Secretary, the Commission observed that not only did Shenghua not contest the Commission’s analysis of the party building activities and the CCP’s role in the company in recital (48) of the provisional Regulation. To the contrary, the company openly confirmed its reliance on the ‘strong support of the government and all sectors of society’ and its intentions to ‘be guided by the spirit of the Sixth Plenary Session of the 18th CPC Central Committee and the series of important speeches by General Secretary Xi’ on its own website (6). The Commission recalled in this connection also recital (41) of the provisional Regulation and the corresponding assessment on the CCP’s influence over the Chinese economy, in particular Chapter 2 of the Report. Shenghua’s reference to its articles of association is therefore misleading. The minority shareholder which at the same time serves as the company’s executive director is by virtue of his CCP membership explicitly obliged to implement the party’s principles and policies (7). Consequently, the articles of association, far from showing Shenghua’s independence from the state, in fact demonstrates clear ties between the party/State policies and the company’s business conduct. Third, Shenghua’s reading of the Chinese SOE law is plainly selective. While the company emphasized the formal division between the administrative and shareholder roles of the State according to Article 6 of the SOE law, it chose to omit a reference to Article 1. Article 1 defines the overall purpose of the law as, inter alia, supporting the leading role of the State-owned economic sector in the national economy, and promoting the development of the socialist market economy. Shenghua also failed to refer to Article 7 which mandates the State to encourage greater investment of State capital in key industries and areas important for the national economy; as well as to Article 36 according to which SOEs, when making investments, shall comply with the national industrial policies.