CHINA – ANTI-DUMPING MEASURES ON STAINLESS STEEL PRODUCTS FROM JAPAN REPORT OF THE PANEL
Document: REPORT OF THE PANEL
Date: 19 June 2023
Document codes: WT/DS601/R
Complainant: Japan
Respondent: China
Third parties: Australia, Brazil, Canada, EU, India, South Korea, Mexico, Russia, Saudi Arabia, Taiwan, U.S., Vietnam
Dispute stage: Panel
Agreements cited: Art. 3.1, 3.2, 3.3, 3.4, 3.5, 4.1, 6.5, 6.5.1, 6.9, 12.2, 12.2.2  Anti-dumpingArt. VI  GATT 1994

CHINA – ANTI-DUMPING MEASURES ON STAINLESS STEEL
PRODUCTS FROM JAPAN
REPORT OF THE PANEL
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LIST OF ANNEXES
ANNEX A
PANEL DOCUMENTS
Contents Page
Annex A-1 Working Procedures of the Panel 4
Annex A-2 Additional Working Procedures of the Panel concerning business confidential
information
11
Annex A-3 Additional Working Procedures of the Panel facilitating arbitration under
Article 25 of the DSU
13
Annex A-4 Interim Review 14
ANNEX B
ARGUMENTS OF THE PARTIES
Contents Page
Annex B-1 Integrated executive summary of the arguments of Japan 44
Annex B-2 Integrated executive summary of the arguments of China 58
ANNEX C
ARGUMENTS OF THE THIRD PARTIES
Contents Page
Annex C-1 Integrated executive summary of the arguments of Australia 74
Annex C-2 Integrated executive summary of the arguments of Brazil 78
Annex C-3 Integrated executive summary of the arguments of Canada 79
Annex C-4 Integrated executive summary of the arguments of the European Union 84
Annex C-5 Integrated executive summary of the arguments of Chinese Taipei 86
Annex C-6 Integrated executive summary of the arguments of the United States 92

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CASES CITED IN THIS REPORT
Short Title Full Case Title and Citation
China – Autos (US) Panel Report, China – Anti-Dumping and Countervailing Duties on Certain
Automobiles from the United States , and Add.1, adopted
18 June 2014, DSR 2014:VII, p. 2655
China – Broiler Products Panel Report, China − Anti-Dumping and Countervailing Duty Measures on Broiler
Products from the United States , and Add.1, adopted
25 September 2013, DSR 2013:IV, p. 1041
China – Cellulose Pulp Panel Report, China – Anti-Dumping Measures on Imports of Cellulose Pulp from
Canada, and Add.1, adopted 22 May 2017, DSR 2017:IV, p. 1961
China – GOES Appellate Body Report, China – Countervailing and Anti-Dumping Duties on Grain
Oriented Flat-Rolled Electrical Steel from the United States, WT/DS414/AB/R,
adopted 16 November 2012, DSR 2012:XII, p. 6251
China – GOES
(Article 21.5 – US)
Panel Report, China – Countervailing and Anti-Dumping Duties on Grain Oriented
Flat-Rolled Electrical Steel from the United States – Recourse to Article 21.5 of
the DSU by the United States, WT/DS414/RW and Add.1, adopted
31 August 2015, DSR 2015:VII, p. 3865
China – X-Ray Equipment Panel Report, China – Definitive Anti -Dumping Duties on X -Ray Security
Inspection Equipment from the European Union, WT/DS425/R and Add.1,
adopted 24 April 2013, DSR 2013:III, p. 659
EC – Bed Linen Panel Report, European Communities – Anti-Dumping Duties on Imports of
Cotton-Type Bed Linen from India , WT/DS141/R, adopted 12 March 2001, as
modified by Appellate Body Report WT/DS141/AB/R, DSR 2001:VI, p. 2077
EC – Fasteners (China) Appellate Body Report, European Communities – Definitive Anti -Dumping
Measures on Certain Iron or Steel Fasteners from China , WT/DS397/AB/R,
adopted 28 July 2011, DSR 2011:VII, p. 3995
EC – Fasteners (China)
(Article 21.5 – China)
Appellate Body Report, European Communities – Definitive Anti -Dumping
Measures on Certain Iron or Steel Fasteners from China – Recourse to Article 21.5
of the DSU by China, WT/DS397/AB/RW and Add.1, adopted 12 February 2016,
DSR 2016:I, p. 7
EC – Salmon (Norway) Panel Report, European Communities – Anti-Dumping Measure on Farmed
Salmon from Norway, WT/DS337/R, adopted 15 January 2008, and Corr.1, DSR
2008:I, p. 3
EC – Tube or Pipe Fittings Appellate Body Report, European Communities – Anti-Dumping Duties on
Malleable Cast Iron Tube or Pipe Fittings from Brazil , WT/DS219/AB/R, adopted
18 August 2003, DSR 2003:VI, p. 2613
EC – Tube or Pipe Fittings Panel Report, European Communities – Anti-Dumping Duties on Malleable Cast
Iron Tube or Pipe Fittings from Brazil, WT/DS219/R, adopted 18 August 2003, as
modified by Appellate Body Report WT/DS219/AB/R, DSR 2003:VII, p. 2701
EC and certain member
States – Large Civil Aircraft
Appellate Body Report, European Communities and Certain Member States
– Measures Affecting Trade in Large Civil Aircraft , WT/DS316/AB/R, adopted
1 June 2011, DSR 2011:I, p. 7
EU – Fatty Alcohols
(Indonesia)
Appellate Body Report, European Union – Anti-Dumping Measures on Imports of
Certain Fatty Alcohols from Indonesia , WT/DS442/AB/R and Add.1, adopted
29 September 2017, DSR 2017:VI, p. 2613
EU – Fatty Alcohols
(Indonesia)
Panel Report, European Union – Anti-Dumping Measures on Imports of Certain
Fatty Alcohols from Indonesia , WT/DS442/R and Add.1, adopted
29 September 2017, as modified by Appellate Body Report WT/DS442/AB/R,
DSR 2017:VI, p. 2765
EU – Footwear (China) Panel Report, European Union – Anti-Dumping Measures on Certain Footwear
from China, WT/DS405/R, adopted 22 February 2012, DSR 2012:IX, p. 4585
Guatemala – Cement I Appellate Body Report, Guatemala – Anti-Dumping Investigation Regarding
Portland Cement from Mexico, WT/DS60/AB/R, adopted 25 November 1998, DSR
1998:IX, p. 3767
Korea – Certain Paper Panel Report, Korea – Anti-Dumping Duties on Imports of Certain Paper from
Indonesia, WT/DS312/R, adopted 28 November 2005, DSR 2005:XXII, p. 10637
Korea – Pneumatic Valves
(Japan)
Appellate Body Report, Korea – Anti-Dumping Duties on Pneumatic Valves from
Japan, WT/DS504/AB/R and Add.1, adopted 30 September 2019, DSR 2019:XI,
p. 5637
Korea – Pneumatic Valves
(Japan)
Panel Report, Korea – Anti-Dumping Duties on Pneumatic Valves from Japan ,
WT/DS504/R and Add.1, adopted 30 September 2019, as modified by Appellate
Body Report WT/DS504/AB/R, DSR 2019:XI, p. 5935
Pakistan – BOPP Film (UAE) Panel Report, Pakistan – Anti-Dumping Measures on Biaxially Oriented
Polypropylene Film from the United Arab Emirates, WT/DS538/R and Add.1,
circulated to WTO Members 18 January 2021, appealed 22 February 2021
Russia – Commercial
Vehicles
Appellate Body Report, Russia – Anti-Dumping Duties on Light Commercial
Vehicles from Germany and Italy , WT/DS479/AB/R and Add.1, adopted
9 April 2018, DSR 2018:III, p. 1167

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Short Title Full Case Title and Citation
Thailand – H-Beams Panel Report, Thailand – Anti-Dumping Duties on Angles, Shapes and Sections of
Iron or Non -Alloy Steel and H -Beams from Poland , WT/DS122/R, adopted
5 April 2001, as modified by Appellate Body Report WT/DS122/AB/R, DSR
2001:VII, p. 2741
US – Carbon Steel Appellate Body Report, United States – Countervailing Duties on Certain
Corrosion-Resistant Carbon Steel Flat Products from Germany, WT/DS213/AB/R
and Corr.1, adopted 19 December 2002, DSR 2002:IX, p. 3779
US – Continued Zeroing Appellate Body Report, United States – Continued Existence and Application of
Zeroing Methodology , WT/DS350/AB/R, adopted 19 February 2009, DSR
2009:III, p. 1291
US – Hot-Rolled Steel Appellate Body Report, United States – Anti-Dumping Measures on Certain
Hot-Rolled Steel Products from Japan , WT/DS184/AB/R, adopted
23 August 2001, DSR 2001:X, p. 4697
US – Softwood Lumber VI Panel Report, United States – Investigation of the International Trade
Commission in Softwood Lumber from Canada , WT/DS277/R, adopted
26 April 2004, DSR 2004:VI, p. 2485
US – Zeroing (EC) Appellate Body Report, United States – Laws, Regulations and Methodology for
Calculating Dumping Margins ("Zeroing") , WT/DS294/AB/R, adopted
9 May 2006, and Corr.1, DSR 2006:II, p. 417

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EXHIBITS REFERRED TO IN THIS REPORT
Exhibit Short Title (if any) Description
CHN-7.b (BCI) Nisshin Steel's questionnaire
response, section V
Nisshin Steel's response to the questionnaire for the
anti-dumping case of stainless steel billet and
hot-rolled stainless plate/coil, section V
CHN-11.b (BCI) Nisshin Steel's response to
additional questions of MOFCOM
Nisshin Steel's response t o additional questions of
MOFCOM (26 December 2018)
CHN-12.b (BCI) Nippon Steel's response to
additional questions of MOFCOM
Nippon Steel's response to additional questions of
MOFCOM (26 December 2018)
CHN-13.b Non-confidential version of attachment 6 to the
application
CHN-21.b Applicant's reply to interested
parties' comments
(1 November 2018)
The applicant's reply to certain interested parties'
comments of the anti -dumping investigation on
stainless steel billet and hot rolled stainles s steel
plate (coil) (1 November 2018)
CHN-22.b Applicant's reply to interested
parties' comments
(23 January 2019) (revised)
The applicant's reply to certain interested parties'
comments of the anti -dumping investigation on
stainless steel billet and hot-rolled stainless steel
plates (coils) (23 January 2019) (revised)
CHN-23.b Gansu Jiu's questionnaire
response
Gansu Jiu's response to the questionnaire for the
anti-dumping case of stainless steel billet and
hot-rolled stainless plate/coil (extract)
CHN-24.b BCMR's questionnaire response BCMR's response to the questionnaire for the
anti-dumping case of stainless steel billet and
hot-rolled stainless plate/coil (extract)
CHN-25.b BCF's questionnaire response BCF's response to the question naire for the
anti-dumping case of stainless steel billet and
hot-rolled stainless plate/coil (extract)
CHN-26.b Angang Lianzhong's
questionnaire response
(revised)
Angang Lianzhong's response to the questionnaire for
the anti -dumping case of stainless st eel billet and
hot-rolled stainless plate/coil (extract) (revised)
JPN-5.b MOFCOM's final determination MOFCOM, Final determination on anti -dumping
investigation on imported stainless steel billets and
hot-rolled stainless steel plates/coils originating in
the European Union, Japan, Korea, and Indonesia
(22 July 2019)
JPN-6.b Application Applicant, Application for anti-dumping investigation
submitted by the PRC domestic stainless steel billet
and hot rolled stainless steel plate/coil industry
(22 June 2018)
JPN-8.b (BCI) Non-injury brief (revised) Japanese respondents, Non -injury defense in the
stainless steel anti -dumping investigation (revised)
(21 November 2018)
JPN-11.b MOFCOM's questionnaire for domestic producers
JPN-18.b MOFCOM's disclosure Letter dated 5 July 2019 disclosing essential facts for
final determination of the anti -dumping case on
stainless steel billets and hot -rolled stainless steel
plates/coils

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ABBREVIATIONS USED IN THIS REPORT
Abbreviation Description
Angang Lianzhong Angang Lianzhong Stainless Steel Corporation
Anti-Dumping Agreement Agreement on Implementation of Article VI of the General Agreement on Tariffs
and Trade 1994
Baosteel Baosteel Stainless Steel Co., Ltd.
BCF Beihai Chengde Ferronickel and Stainless Steel Co., Ltd.
BCI business confidential information
BCMR Beihai Chengde Metal Rolling Co., Ltd.
DSB Dispute Settlement Body
DSU Understanding on Rules and Procedures Governing the Settlement of Disputes
Gansu Jiu Gansu Jiu Steel Group Hongxing Iron & Steel Co., Ltd.
GATT 1994 General Agreement on Tariffs and Trade 1994
MOFCOM Ministry of Commerce of China
NYK Nippon Yakin Kogyo Co., Ltd.
POI period of investigation
WTO World Trade Organization

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1 INTRODUCTION
1.1 Complaint by Japan
1.1. On 11 June 2021, Japan requested consultations with China pursuant to Articles 1 and 4 of the
Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), Article XXIII:1
of the General Agreement on Tariffs and Trade 1994 (GATT 1994), and Articles 17.2 and 17.3 of
the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994
(Anti-Dumping Agreement) with respect to the measures and claims set out below.1
1.2. Consultations were held on 19 July 2021.
1.2 Panel establishment and composition
1.3. On 19 August 2021, Japan requested the establishment of a panel pursuant to Articles 4.7
and 6 of the DSU, Article XXIII of the GATT 1994, and Article 17.4 of the Anti-Dumping Agreement.2
At its meeting on 27 September 2021, the Dispute Settlement Body (DSB) established a panel
pursuant to the request of Japan in document WT/DS601/2, in accordance with Article 6 of the DSU.3
1.4. The Panel's terms of reference are the following:
To examine, in the light of the relevant provisions of the covered agreements cited by
the parties to the dispute, the matter referred to the DSB by Japan in document
WT/DS601/2 an d to make such findings as will assist the DSB in making the
recommendations or in giving the rulings provided for in those agreements.4
1.5. On 13 January 2022 , Japan requested the Director -General to determine the composition of
the panel, pursuant to Article 8.7 of the DSU. On 24 January 2022, the Director-General accordingly
composed the Panel as follows:
Chairperson: Mr José Luis Pérez Gabilondo
Members: Ms Keisha-Ann Thompson
 Mr Jose Antonio Buencamino
1.6. Australia, Brazil, Canada, the European Union, India, the Republic of Korea (Korea), Mexico,
the Russian Federation, the Kingdom of Saudi Arabia, Chinese Taipei, the United States, and
Viet Nam notified their interest in participating in the Panel proceedings as third parties.
1.3 Panel proceedings
1.7. After con sultation with the parties, the Panel adopted its Working Procedures 5, Additional
Working Procedures on business confidential information (BCI)6 and a partial timetable on
23 February 2022. The Panel subsequently revised the time table on 28 February 2022,
4 August 2022, 14 October 2022, and 3 November 2022.
1.8. The Panel held a first substantive meeting with the parties on 29 and 30 June , as well as
1 July 2022. A session with the third parties took place on 30 June 2022. The Panel held a second
substantive meeting with the parties on 11 and 12 October 2022. While the Panel proposed to the
parties that the substantive meetings be held in -person at the WTO premises in Geneva, due to
constraints related to the COVID -19 pandemic identified by the pa rties, the Panel conducted both
substantive meetings via secure videoconference. On 12 December 2022, the Panel issued the
descriptive part of its Report to the parties. The Panel issued the Interim Report and Final Report to
the parties on 22 March 2023 and 10 May 2023 respectively.

1 Request for consultations by Japan, WT/DS601/1 (Japan's consultation request).
2 Request for the establishment of a panel by Japan, WT/DS601/2 (Japan's panel request).
3 DSB, Minutes of the meeting held on 27 September 2021, WT/DSB/M/456, para. 5.4.
4 Constitution note of the Panel, WT/DS601/3.
5 Working Procedures of the Panel (Annex A-1).
6 Additional Working Procedures of the Panel concerning business confidential information (Annex A-2).

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2 THE MEASURES AT ISSUE
2.1. In its panel request, Japan identified the measures at issue as China's measures imposing
anti-dumping duties on stainless steel products from Japan, as set forth in the Ministry of Commerce
of China (MOFCOM) Announcement No. 9 of 2019 and Announcement No. 31 of 2019, including any
and all annexes and amendments thereto. 7 Pursuant to the measures, China imposed definitive
anti-dumping duties on imports of certain steel products 8 from Japan, Korea, the European Union,
and Indonesia.9
3 PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS
3.1. Japan requests that the Panel find that the measures at issue are inconsistent with Articles 1,
3.1, 3.2, 3.3, 3.4, 3.5, 4.1, 6.5, 6.5.1, 6.9, 12.2 and 12.2.2 of the Anti -Dumping Agreement and
Article VI:6(a) of the GATT 1994.10 Japan further requests, pursuant to Article 19.1 of the DSU, that
the Panel recommend that China bring its measures into conformity with the GATT 1994 and the
Anti-Dumping Agreement.11
3.2. China requests that the Panel reject Japan's claims in this dispute in their entirety.12
4 ARGUMENTS OF THE PARTIES
4.1. The arguments of the parties are reflected in their executive summaries, provided to the Panel
in accordance with paragraph 25 of the Working Procedures adopted by the Panel (see Annexes B-1
and B-2).
5 ARGUMENTS OF THE THIRD PARTIES
5.1. The arguments of Australia, Brazil, Canada, the European Union, Chinese Taipei, and the
United States are reflected in their executive summaries, provided in accordance with paragraph 28
of the Working Procedures adopted by the Panel (see Annexes C-1, C-2, C-3, C-4, C-5, and C-6).
India, Korea, Mexico, the Russian Federation, the Kingdom of Saudi Arabia, and Viet Nam did not
submit written or oral arguments to the Panel.

7 Japan's panel request, pp. 1-2 (referring to MOFCOM Announcement No. 9 of 2019 on the preliminary
ruling of anti-dumping investigation into imports of stainless steel billets and hot-rolled stainless steel
plates/coils originating in the European Union, Indonesia, Japan, and Korea, available at:
http://www.mofcom.gov.cn/article/b/c/201903/20190302845525.shtml; and MOFCOM Announcement No. 31
of 2019 on final ruling of anti-dumping investigation into imports of stainless steel billets and hot-rolled
stainless steel plates/coils originating in the European Union, Indonesia, Japan, and Korea, available at:
http://www.mofcom.gov.cn/article/b/e/201907/20190702883527.shtml).
8 The "Subject product" section of MOFCOM's final determination sets out the following as the "Product
description":
Stainless steel billet and hot -rolled stainless steel plate (coil) refers to alloyed steel with carbon
content (by weight) of 1.2% or less and chromium content of 10.5% or more, regardless of other
elements, except for cold -rolled ones. Stainless steel billet has a rectangular (except
square) cross-section or other semi -finished stainless steel products. Hot -rolled stainless steel
plate (coil) is made of stainless steel billet through hot rolling and other processes, which is in the
shape of roll or plate, regardless of the width and thickness.
(MOFCOM's final determination (Exhibit JPN-5.b), pp. 10-11)
In these panel proceedings, Japan used the term "slabs" instead of "billets" because, in its view, slabs is the
more precise term to describe the stainless steel products in question. China used the term "billets", noting in
this regard that MOFCOM used the term billets in the investigation, that the relevant HS codes refer to either
billets or slabs, and the relevant HS codes describe the products in a manner that corresponds to
MOFCOM's description of billets. (Japan's request for interim review, para. 2; China's comments on
Japan's request for interim review, para. 4).
9 China's first written submission, para. 68.
10 Japan's first written submission, paras. 65, 218, 302, 361, 444, 453, 493, 531, 609, 673, and 675.
11 Japan's first written submission, para. 676.
12 China's first written submission, para. 982.

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6 INTERIM REVIEW
6.1. On 5 April 2023, the parties submitted a written request asking us to review precise aspects of
the Interim Report. On 19 April 2023 both parties submitted comments on each other's request for
review. The request and comments made at the interim review stage as well as our discussion and
disposition of the parties' request are set out in Annex A-4.
7 FINDINGS
7.1 Japan's claims concerning MOFCOM's definition of the domestic industry
7.1.1 Introduction
7.1. In the underlying investigation, MOFCOM defined the domestic industry as domestic producers
representing a "major proportion" of total domestic production of the like product, namely, stainless
steel billets (slabs), coils, and plates. MOFCOM found that the share of total domestic production of
the applicant domestic producers and those domestic producers that supported the application was
65.18% to 81.37% over the injury period of investigation (POI) (2014 to the first quarter of 2018)
and concluded that this represented a "major proportion" . In reaching this finding , MOFCOM
calculated the collective output of the domestic producers included in the "domestic industry" as the
sum of their (a ) production volume of coils and plates , and (b ) sales volume of billets (slabs).
MOFCOM then divided that figure by what it stated was the "total production output" in China of the
same products to arrive at the proportion of total domestic production represented by the collective
output of the producers included in the definition of the domestic industry. 13 The "total production
output" used by MOFCOM was calculated as the sum of overall (a ) production volume of coils and
plates, and (b) sales volume of billets (slabs) in China.
7.2. MOFCOM used the sales volume of billets (slabs) as an indicator of the production vo lume of
billets that were not further processed into coils or plates, to avoid what it referred as the "double
counting" problem. In particular, noting that billets (slabs ) are mainly processed into coils and
plates, MOFCOM sought to avoid a situation where it double counted the production of billets (slabs),
once in the production volume of billets (slabs), and then again in the production volume of coils
and plates.14
7.3. Japan claims that MOFCOM 's determination of the domestic industry was inconsistent with
Articles 4.1 and 3.1 of the Anti-Dumping Agreement, because of the following three alleged flaws:
a. By using the sales volume of billets (slabs ) as an indicator for production,
MOFCOM's methodology for calculating domestic production created a risk of inflating the
domestic industry's share in domestic production.
b. MOFCOM failed to address and explain an alleged discrepancy in the domestic
industry's share in domestic production and its market share, which brought into question
the reliability of MOFCOM's production data.
c. MOFCOM failed to examine whether the defined domestic industry was representative.
7.4. China rejects the entirety of Japan's claims, and in addition, maintains that certain aspects of
Japan's claims are outside of the Panel's terms of reference. In paragraphs 7.5-7.24 below, we first
focus on the issues arising with regard our terms of reference, and then turn, in paragraph 7.29 to
the substantive issues.
7.1.2 Terms of reference
7.5. Japan's panel request states in relevant part as follows:

13 MOFCOM's final determination (Exhibit JPN-5.b), p. 28.
14 MOFCOM's final determination (Exhibit JPN-5.b), p. 28.

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Japan considers that these measures are inconsistent with China's obligations under the
following provisions of the GATT 1994 and the Anti-Dumping Agreement:
…
6. Article 4.1 of the Anti-Dumping Agreement:
(a) because China, in defining the domestic industry, relied on sales volume of slabs
instead of production volume of slabs , and did not define the domestic industry as
domestic producers whose output of the products constitutes a major proportion of the
total domestic production of those products; and
(b) in conjunction with Article 3.1 of the Anti -Dumping Agreement, because China
improperly defined the domestic industry and, as a result , failed to base its
determination on positive evidence and conduct an objective examination of the facts
with respect to the domestic industry producing the like products.15
7.6. China ra ises two concerns about how Japan has sought to argue the claims specified in
paragraph 6 of its panel request.
a. First, China contends that the claim Japan pursues in this proceeding challenging
MOFCOM's determination of the domestic industry impermissibly expands the scope of the
claim presented in Japan's panel request, which according to China, is specifically focused
on MOFCOM's failure to rely on the production volume of billets (slabs).
b. Second, China contends that Japan 's claim under Article 3.1 of th e
Anti-Dumping Agreement, as presented in its panel request, is purely consequential to a
finding of violation under Article 4.1 of the Anti-Dumping Agreement. Accordingly, China
submits that Japan is not entitled to pursue the claim it has raised in this proceeding that
MOFCOM's determination of the domestic industry was inconsistent with Article 3.1.
7.7. We recall that a panel's terms of reference are defined by Articles 6.2 and 7.1 of the DSU.
Under the terms of Article 7.1, a panel is instructed to "examine … the matter referred to the DSB"
in the complaining party's panel request. In turn, Article 6.2 provides that:
The request for the establishment of a panel shall be made in writing. It shall indicate
whether consultations were held, identify the specifi c measures at issue and provide a
brief summary of the legal basis of the complaint sufficient to present the problem
clearly.
7.8. Previous DSB reports, with which we agree, have clarified that the "matter referred to the DSB"
consists of the following two ele ments, which together form the basis of a panel 's terms of
reference: (a) identification of the specific measure at issue; and (b ) a brief summary of the legal
basis of the complaint, or the claims. 16 China's complaint concerns the extent to which
Japan's submissions in these proceedings correspond to the "brief summary of the legal basis of the
complaint" set out in the panel request.
7.9. The legal basis of a complaint refers to the claims set out in a panel request alleging that the
respondent has violated, or nullified or impaired the benefits arising from, an identified provision of
a covered agreement.17 To provide a brief summary of the legal basis of a complaint, a panel request
must plainly connect the challenged measure with the provision of the covered agreement that it
claims was infringed.18 With these considerations in mind, we examine in the sections that follow,
each of China's two concerns with respect to how Japan has sought to argue the claims specified in
paragraph 6 of its panel request – namely, (a) whether Japan's submissions in this proceeding go
beyond the brief summary of the legal basis of its complaint presente d in the panel request; and
(b) whether Japan 's claim under Article 3.1 of the Anti -Dumping Agreement, as presented in its

15 Emphasis added.
16 See e.g. Appellate Body Reports, Guatemala – Cement I, paras. 69-76; US – Carbon Steel, para. 125;
US – Continued Zeroing, para. 160; and EC and certain member States – Large Civil Aircraft, para. 639.
17 Appellate Body Report, Korea – Pneumatic Valves (Japan), para. 5.31.
18 Appellate Body Report, Korea – Pneumatic Valves (Japan), para. 5.6.

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panel request, is purely consequential to a finding of violation under Article 4.1 of the
Anti-Dumping Agreement.
7.1.2.1 Whether the claim Japan pursues in this proceeding challenging
MOFCOM's definition of the domestic industry is outside of the scope of our terms of
reference
7.10. According to China, paragraph 6(a) of Japan 's panel request reveals only one reason for
Japan's concern about MOFCOM's determination of the domestic industry – namely, that "MOFCOM
should have relied on the production volume of stainless steel billets [slabs]", instead of the sales
volume of billets (slabs). 19 Thus, according to China, any claim by Japan that does not take issue
specifically with MOFCOM's failure to rely on the production volume of billets (slabs ) is outside the
Panel's terms of reference.20
7.11. During the course of this proceeding, Japan explained that it is no longer pursuing the claim
set out in paragraph 6(a) of its panel request.21 Instead, Japan has clarified that it is pursuing the
claim set out in paragraph 6(b) of its panel request, which it argues is a claim based on Article 4.1
of the Anti-Dumping Agreement read in conjunction with Article 3.1.22
7.12. In response to Japan's submission that it has abandoned its claim under paragraph 6(a), and
that it is only pursuing the claim set out in paragraph 6(b) of the panel request, China contends that
if paragraph 6(b) was meant to describe an independent claim under Article 4.1, whether or not in
conjunction with Article 3.1, there would not be point of also providing paragraph 6(a). 23
In particular, China contends that the language of Japan's panel request shows that
paragraph 6(b) establishes a purely consequential claim to the claim set out in paragraph 6(a).24
Thus, China maintains that paragraph 6(b) does not cover the claim that Japan has presented and
pursued in its submissions in this dispute.
7.13. Turning to Japan 's panel request, we note that the chapeau of paragraph 6 refers to
Article 4.1 of the Anti -Dumping Agreement, thus indicating that this provision serves as the legal
basis for the claims set out in both paragraph 6(a) as well as paragraph 6(b). However, we s ee
nothing in the text of either paragraph suggesting that the allegations made in paragraph 6(b) are
dependent and consequential on those made in paragraph 6(a).
7.14. Paragraph 6(b) can be read as being comprised of two parts. In the first part, the stated basis
for the alleged violation is "because China improperly defined the domestic industry". In the second
part, the text of paragraph 6(b) stipulates that "as a result" of this conduct, MOFCOM "failed to base
its determination on positive evidence and conduct an objective examination of the facts with respect
to the domestic industry producing the like products". The second part of paragraph 6(b) is,
therefore, dependent on the first part of paragraph 6(b), because Japan contends that "as a result"
of the improper definition of the domestic industry, China failed to make its determination on positive
evidence and conduct an objective examination of the facts. In contrast, the first part of
paragraph 6(b) stands by itself and indicates that the object of Japan's challenge is the improper
definition of the domestic industry. Thus, we do not share China 's view that the entirety of
paragraph 6(b) presents a purely consequential claim to the one set out in paragraph 6(a). Instead,
paragraph 6(b), and particularly the first part of this paragraph, provides an independent basis for
Japan's claims challenging the improper definition of the domestic industry.
7.15. Considering that the first part of paragraph 6(b) reveals that Japan is challenging the
improper definition of the domestic industry, and does so without limiting its focus to
MOFCOM's failure to rely on the production volume of billets (slabs), we do not consider that Japan
is precluded, as China contends, from raising a claim that does not take issue specific ally with
MOFCOM's failure to rely on the production volume of billets (slabs). Instead, we consider that the
three grounds raised by Japan challenging MOFCOM 's domestic industry definition are three
arguments in support of Japan 's claims. Thus, Japan 's terms of reference do not preclude it from

19 China's first written submission, para. 597.
20 China's first written submission, para. 599.
21 Japan's comments on China's request for a preliminary ruling, para. 18.
22 Japan's comments on China's request for a preliminary ruling, paras. 19-22.
23 China's second written submission, para. 356.
24 See e.g. China's second written submission, paras. 357-358.

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raising a claim that does not take issue specifically with MOFCOM's failure to rely on the production
volume of billets (slabs).
7.1.2.2 Whether Japan's claim under Article 3.1 is a consequential claim
7.16. We now turn to the second question before us, i.e. whether Japan's claim under Article 3.1,
as presented in its panel request, is purely consequential.
7.17. China observes that in paragraph 6(b) of its panel request, Japan stated that "as a result of"
MOFCOM's allegedly improper definition of the domestic industry, MOFCOM " failed to base its
determination on positive evidence and conduct an objective examination of the facts", noting that
the italicized language reflects the text of Article 3.1.25 Thus, China c ontends that Japan's claim
under Article 3.1 is consequential to its claim under Article 4.1.26
7.18. Japan argues that its claim under Article 3.1 is not consequential to its claim under Article 4.1,
and furthermore clarifies that it is not making an independen t claim under Article 3.1.27 Instead,
Japan contends that " Articles 4.1 and 3.1 of the Anti -Dumping Agreement should be interpreted
together", and that MOFCOM's "improper definition of domestic industry … is inconsistent with the
disciplines pursuant to both Articles 4.1 and 3.1 of the Anti-Dumping Agreement".28
7.19. We recall that the relevant part of Japan's panel request states as follows:
Japan considers that these measures are inconsistent with China's obligations under the
following provisions of the GATT 1994 and the Anti-Dumping Agreement:
…
6. Article 4.1 of the Anti-Dumping Agreement:
…
(b) in conjunction with Article 3.1 of the Anti -Dumping Agreement, because China
improperly defined the domestic in dustry and, as a result, failed to base its
determination on positive evidence and conduct an objective examination of the facts
with respect to the domestic industry producing the like products.29
7.20. Paragraph 6(b ) refers to Article 4.1 of the Anti -Dumping Agreement "in conjunction with"
Article 3.1. It is followed by two narrative descriptions. The first description, starting with "because"
refers to the improper definition of the domestic industry. The second description, starting with "as
a result", refers to MOFCOM's failure to "base its determination on positive evidence and conduct an
objective examination of the facts with respect to the domestic industry producing the like products".
Japan's argument is that the panel request refers to Article 4.1 "in conjunction with Article 3.1", and
thus Japan is challenging under both these provisions MOFCOM's improper definition of the domestic
industry, as well as the failure to base the determination on positive evidence and conduct an
objective examination.30 However, in our view, if that were the case, paragraph 6(b) would become
circular and the second part of the paragraph would be redundant.
7.21. In this regard, we note that the reference to "objective examination" and "positive evidence"
in the second p art of paragraph 6(b) echoes the text of Article 3.1. If, in the first part of

25 China's second written submission, para. 360.
26 China's second written submission, paras. 359-361.
27 Japan's response to Panel question No. 1, para. 2. See also Japan's second written submission,
para. 272.
28 Japan's response to Panel question No. 1, para. 2. (emphasis added)
29 Emphasis added.
30 See e.g. Japan's second written submission, para. 272. Japan contends that if the second description
in paragraph 6(b), starting after the phrase "as a result", only corresponds to an investigating
authority's obligation under Article 3.1, no language highlighting the reference to "the domestic industry
producing the like products" would appear in this paragraph because, according to Japan, the obligation in
Article 3.1 is not limited to the definition of the domestic industry, but is centred on the determination of
injury. (Ibid. para. 272).

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paragraph 6(b), Japan were contending that MOFCOM failed to make an objective examination based
on positive evidence in defining the domestic industry (as a reliance on Article 3.1 would suggest),
then, in our view, there would be no need for the second part of paragraph 6(b), which also refers
to a failure to make an objective examination based on positive evidence. Indeed, the second part
of paragraph 6(b) would in that case become redundant because if the first part already challenged
the definition of the domestic industry on this basis under Article 4.1 and Article 3.1, there would be
no reason to repeat that allegation in the second part. Moreover, even if only part of the reason for
the alleged violation described in the first part of paragraph 6(b) were the same as the reason for
the consequential violation described in the second part (as reliance on Article 3.1 would suggest),
then Japan's contentions in the two parts of paragraph 6(b) would be circular.
7.22. However, the circularity and redundancy in Japan 's panel request are removed if one
understands the first part of paragraph 6(b) to be challenging an improper definition of the domestic
industry under Article 4.1, and the second part to be contending that as a result of this violation,
MOFCOM acted inconsistently with Article 3.1, to the extent that its findings were not based on an
objective examination of positive evidence. This understand ing would be consistent with the fact
that Article 4.1 (not Article 3.1), is the provision in the Anti -Dumping Agreement that prescribes
rules for how to define the domestic industry. It is an understanding that also matches how Japan
presented its claims in its first written submission. For instance, in heading F.3(a) of its first written
submission, Japan contends that MOFCOM acted inconsistently with Articles 4.1 and 3.1 because
MOFCOM relied on a methodology that may have overestimated the proportion of the total domestic
production held by the domestic industry, "thereby" allegedly introducing a material risk of distortion
in the injury analysis.31 The use of the adverb "thereby" here indicates that Japan's contention that
MOFCOM introduced a material risk of distortion into the injury analysis (a matter regulated by
Article 3, not Article 4) is dependent upon the assertion that MOFCOM may have overestimated the
proportion of total domestic production of those companies forming part of the domestic indus try.
To this extent, in our view, Japan's submissions confirm that its allegation of a violation of Article 3.1
is dependent upon MOFCOM 's alleged failure to define the domestic industry in accordance with
Article 4.1.
7.23. Thus, in the light of the above cons iderations, paragraph 6(b) of Japan 's panel request
presents two sets of claims in relation to MOFCOM 's determination of the domestic industry. The
first of these claims, described in the first part of paragraph 6(b), broadly challenges the consistency
of MOFCOM's definition of the domestic industry with Article 4.1 alone. As we have explained, in our
view, this part of Japan's claims cannot be read as being grounded in Article 3.1 because that would
lead to redundancy and circularity. Japan 's second claim is purely consequential to its first claim,
and it is grounded in Article 3.1.
7.24. In the light of our finding that the reference to Article 3.1 in Japan's terms of reference
indicates a claim that is consequential to its claim under Article 4.1, in the sections that follow, we
will first review the merits of Japan's submissions with respect to its claim under Article 4.1 of the
Anti-Dumping Agreement.
7.1.3 Article 4.1 of the Anti-Dumping Agreement
7.25. Article 4.1 of the Anti-Dumping Agreement, which sets out the rules on the definition of the
domestic industry, states in relevant part as follows:
For the purposes of this Agreement, the term "domestic industry" shall be interpreted
as referring to the domestic producers as a whole of the like products or to those of
them whose collective output of the products constitutes a major proportion of the total
domestic production of those products[.]
7.26. Article 4.1 defines the domestic industry as:
a. domestic producers as a whole of the like products, or

31 Japan uses a similar formulation in headings F.3(b), and F.3(c) of its first written submission.

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b. those whose collective output of the like products constitutes a major proportion of the
total domestic production of those products.
7.27. Previous DSB reports, with which we agree, have understood the phrase "major proportion"
in Article 4.1 to have both quantitative and qualitative connotations.32
a. Regarding the quantitative connotation, previous DSB reports have found that while
Article 4.1 does not explain in numerical terms what exact proportion of domestic
production represents a major proportion, it should be a relatively high proportion of the
total domestic production.33
b. With respect to the qualitative connotation, previous DSB reports have found that domestic
producers of the like product who are included in the domestic industry must be
representative of the total domestic production.34
7.28. Thus, if MOFCOM's definition of the domestic industry does not co mply with the quantitative
and qualitative aspects of the "major proportion" requirement, we will find a violation under
Article 4.1 of the Anti -Dumping Agreement. In addition, we note that while reviewing whether
MOFCOM's definition complies with these requirements, we will be bound by our standard of review
under Article 17.6(i) of the Anti-Dumping Agreement. Article 17.6(i) states that in its assessment of
the facts of the matter, "the panel shall determine whether the authorities ' establishment of the
facts was proper and whether their evaluation of those facts was unbiased and objective." Thus, if
we find that in defining the domestic industry, MOFCOM failed to establish the facts properly, or
failed to make an unbiased and objective evaluation of those facts, we will find a violation under
Article 4.1.
7.1.3.1 Japan's arguments with respect to the alleged flaws in MOFCOM 's methodology
for calculating domestic production
7.29. As already noted, MOFCOM calculated the share of total domestic production of the producers
selected to represent the "domestic industry " by summing the volume of production of stainless
steel coils and plates with the external sales volume of billets (slabs), instead of the production
volume of billets (slabs). Japan contends that, as a matter of fact, it is possible that producers
included in the definition of the domestic industry had a higher proportion of external sales of billets
(slabs) compared to domestic producers not included in the domestic industry.35 In such a scenario,
Japan maintains that MOFCOM 's method of calculation would overestimate the share of these
producers in the total domestic production as opposed to those producers not included in the
domestic industry.36
7.30. Japan acknowledges that MOFCOM used the sales volume of billets (slabs ) to avoid double
counting the production volume of billets ( slabs).37 However, Japan maintains that
MOFCOM's decision to use sales volume of billets (slabs ) as an indicator for its production volume
did not resolve the double counting problem.38 According to Japan, this is because billets (slabs) sold
by the domestic industry may be consumed in China by other producers (whether or not part of the
domestic industry) to produce coils and plates, thus again creating the "double counting" issue that
MOFCOM sought to resolve through its methodology of using sales volume of billets (slabs).39
7.31. China defends MOFCOM 's decision to use the sales volume of billets (slabs), and contends
that MOFCOM did not overrepresent the domestic industry 's share in overall production. China
submits that because the majority of billets (slabs) were captively used to produce coils and plates,
MOFCOM needed to avoid double counting those billets (slabs), once as production volume of billets

32 Appellate Body Reports, Russia – Commercial Vehicles, para. 5.12; EC – Fasteners
(China) (Article 21.5 – China), para. 5.302.
33 Appellate Body Report, EC – Fasteners (China) (Article 21.5 – China), para. 5.299 (quoting
Appellate Body Report, EC – Fasteners (China), para. 412).
34 Appellate Body Reports, Russia – Commercial Vehicles, para. 5.13; EC – Fasteners
(China) (Article 21.5 – China), para. 5.303.
35 Japan's response to Panel question No. 3, para. 9.
36 Japan's response to Panel question No. 3, para. 9.
37 Japan's first written submission, para. 470.
38 Japan's first written submission, para. 470.
39 Japan's first written submission, para. 470.

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(slabs), and then again as production volume of coils and plates.40 China argues that the use of sales
volume of billets (slabs ) as an indicator for its production volume was a reasonable alternative,
considering it was not known whether billets (slabs) sold in the market were transformed into plates
and coils.41 In this way, China maintains that MOFCOM was able to avoid the problem of double
counting to the extent possible.
7.32. China also contends that MOFCOM 's methodology could not h ave overestimated the
proportion of total domestic production represented by the domestic industry because the domestic
industry's share in domestic production was very high, and its sales of billets (slabs ) were limited.
Accordingly, China maintains that such sales could not have distorted MOFCOM's assessment of the
domestic production.42
7.33. The question before us is whether, in assessing whether the production of the firms included
in the domestic industry represented a "major proportion" of total domestic production under
Article 4.1, MOFCOM properly established the facts and evaluated those facts in an unbiased and
objective manner. The relevant parts of MOFCOM 's determination of the domestic industry are set
out below.
The Applicant used stainless steel billet as an indicator to calculate the production output
of stainless steel billet and hot-rolled stainless steel plate (coil ) in the application. In
the preliminary determination, the Investigating Authority considered that this indicator
resulted in omission of production output or double counting, and it would be more
reasonable to use th e commodity volume of stainless steel billet, plus the production
output of hot-rolled stainless steel plate (coil), as an indicator to calculate the production
output of stainless steel billet and hot -rolled stainless steel plate (coil), so as to avoid
the omission of external sales of a few stainless steel billets and avoid the double
counting to the extent possible.
After preliminary determination, some interested parties asserted that when the
Investigating Authority calculated the domestic industry rep resentativeness, the
production output (rather than sales volume ) of stainless steel billet should be used.
The Applicant asserted that it would be more reasonable to use the commodity volume
of stainless steel billet, plus the production output of hot -rolled stainless steel plate
(coil), as an indicator to calculate the production output of stainless steel billet and
hot-rolled stainless steel plate (coil), so as to avoid the omission of external sales of a
few stainless steel billets and avoid the double counting to the extent possible. If it was
calculated according to the production output of the stainless steel billet, the double
counting would be further caused. After review, the Investigating Authority considered
that the usage of stainless steel bill ets included two aspects in the case: firstly, they
were mainly processed to stainless steel plate (coil); secondly, a few of them were sold
as commodity billet. The sales volume of the commodity billet was actually the partial
production output of stainle ss steel billet in the case. Therefore, the Investigating
Authority decided to maintain the preliminary finding in the final determination, and
calculated the production output of stainless steel billet and hot -rolled stainless steel
plate (coil) by using commodity volume of stainless steel billet, plus the production
output of hot-rolled stainless steel plate (coil), as the indicator.43
7.34. This excerpt reveals that MOFCOM recognized that the calculation of total production of the
domestic like product was not a straightforward exercise because of the fact that billets (slabs) are
inputs into the production of coils and plates. MOFCOM acknowledged that these facts could give
rise to a double counting problem, and it sought to avoid this by using the external sales volume of
billets (slabs) as an indicator of domestic production of billets (slabs) . At the same time, MOFCOM
considered that using the sales volume of billets (slabs) would also avoid omitting "a few" external
sales of billets (slabs) from its calculation.
7.35. MOFCOM explained that using the sale s volume of billets (slabs ) allowed it to avoid double
counting the production of billets (slabs ) to the extent possible – once as production of billets

40 China's first written submission, para. 648.
41 China's response to Panel question No. 2, para. 13.
42 China's first written submission, para. 653.
43 MOFCOM's final determination (Exhibit JPN-5.b), pp. 28-29. (emphasis added)

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(slabs), and then again as coils or plates made from such billets (slabs). In our view, the type of
double counting alluded to by MOFCOM in its report would have resulted in an inaccurate calculation
of the domestic production data used to determine the proportion of the total domestic production
attributable to firms included in the defined domestic industry. We recognize that it was precisely to
avoid this potential problem that MOFCOM chose to use external sales of billets (slabs) in its
calculation.
7.36. However, a s Japan notes, to the extent that billets (slabs ) may be sold by one Chinese
producer to another Chinese producer that consumed them to manufacture coils or plates, the same
type of double counting problem that MOFCOM sought to address by relying on external sales volume
would arise. Thus, we agree with Japan that on the facts before MOFCOM, double counting could
arise in two scenarios:
a. First, when a domestic producer in China captively consumes billets (slabs) and processes
it into coils or plates.
b. Second, when a domestic producer in China sells billets (slabs ) to another producer in
China, which, in turn processes it into coils and plates.
While MOFCOM acknowledged and sought to avoid the first of these two instances of possible double
counting, it did not address that double counting might also arise in the second scenario.

7.37. In our view, faced with such circumstances, an unbiased and objective investigating authority
determining whethe r the production of certain firms constituted a "major proportion" of total
domestic production should have either (a ) described whether, and if so how, it avoided double
counting arising from external sales to other Chinese producers who would use such billets (slabs) to
manufacture coils or plates or, in the alternative (b) provided a reasoned and adequate explanation
as to why it was unnecessary to address the double counting arising in this second scenario.
MOFCOM's report addresses neither of these points.
7.38. China maintains that MOFCOM 's approach was appropriate for two reasons. First, China
submits that the external sale of billets (slabs ) was a unique practice that hardly took place. 44
China's view thus is that for this reason the impact of MOFCOM 's methodology in ascertaining the
percentage share of the domestic industry in domestic production would be very low. 45 Second,
China contends that because MOFCOM had no information on the record as to what happened with
the billets (slabs) that were sold externally, it could not have taken any further action with regard
to the sale of billets (slabs).46
7.39. China's first line of argument is essentially that because of the limited external sales of billets
(slabs), MOFCOM's decision to use those sales volumes as an indicator of production volume would
only minimally affect the outcome in terms of the percentage share of the domestic industry in
domestic production. However, while China contends that the impact of MOFCOM 's methodology in
ascertaining the percentage s hare of the domestic industry in domestic production would be very
low, China has not supported this factual assertion with evidence. In response to our questions at
the second meeting of the Panel, China stated that the volume of external sales of stainle ss steel
billets (slabs) was based on the statistics provided by the Stainless Steel Branch of China Special
Steel Enterprise Association, which was confidential. 47 By way of illustration, China stated that in
the most recent time period (first quarter of 2018), the volume of external sales of billets by Chinese
producers represented [[***]] of the production of steel billets.48 However, given that the period of
investigation used by MOFCOM in its analysis covered consecutive years from 2014 to the first
quarter of 2018, we do not consider that data from only the first quarter of 2018 is adequately
representative of the period MO FCOM used to make its assessment. In any case, nowhere in
MOFCOM's report is there any discussion or analysis of this kind.
7.40. As regard China's second argument, we are of the view that having noted that stainless steel
billets (slabs) are mainly processed into coils and plates, MOFCOM would have been on notice that

44 China's second written submission, para. 382.
45 China's second written submission, para. 382.
46 China's second written submission, para. 380.
47 China's response to Panel question No. 42(a), para. 13.
48 China's response to Panel question No. 42(a), para. 13.

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the same type of double counting problem it sought to avoid by not using production of billets
(slabs) could have arisen by using sales volume of billets (slabs ) in its calculations. While we
recognize that MOFCOM decided to use the external sales volume of billets (slabs) to avoid double
counting the production of billets (slabs), we consider that acting as an unbiased and objective
investigating authority, MOFCOM should have either (a) further in vestigated whether billets
(slabs) sold externally by Chinese producers were being used to produce coils or plates in China by
other producers; or (b) at the very least, provided a reasoned and adequate explanation as to why
it was unnecessary to address the double counting arising in this second scenario. MOFCOM's report
contains no such discussion.
7.41. Based on the foregoing, we find that Japan has established that MOFCOM's determination of
the domestic industry was inconsistent with Article 4.1 of the Anti-Dumping Agreement because, by
not addressing in any way the second double counting scenario described above, MOFCOM failed to
provide a reasoned and adequate explanation of its finding that the production of the firms included
in the domestic industry repr esented a "major proportion" of the total production of all Chinese
producers.
7.1.3.2 Japan's arguments concerning the alleged discrepancy between domestic
industry market share data and its share in domestic production
7.42. Japan contends that MOFCOM overestimated the domestic industry 's share in domestic
production because certain data showed that the domestic industry 's market share ( i.e. share of
domestic sales) was lower than its share of total domestic production. 49 Japan acknowledges that
the domestic industry 's market share and its share of domestic production could differ because
market share, unlike domestic production, is calculated based on the domestic industry's share in
overall sales plus imports, minus expo rts (i.e. total apparent domestic consumption). However,
Japan contends that because imports into China were low, the domestic industry's market share and
its share in domestic production should have been quite similar (but were not). 50 Japan also
recognizes that market share and the share in domestic production would differ when domestically
produced billets (slabs ) are exported, and thus not included in overall consumption figures in
China.51 However, Japan contends that MOFCOM's final determination is silent on whether this was
indeed the case. 52 In particular, Japan contends that "[e]ven when faced with the dramatic
divergence between the proportion of the domestic industry [in domestic production] and its market
share(s), MOFCOM's final determination [was] silent on this issue".53
7.43. China contends that any analysis pertaining to market share is irrelevant to an analysis under
Article 4.1, because Article 4.1 focuses on the domestic industry's share in total domestic production
whereas market shares are based on the overall sales volume.54 In addition, China submits that the
alleged discrepancy between the domestic industry 's market share and its share in domestic
production may be explained by the following:
a. The domestic indust ry's market share data were calculated by dividing the domestic
industry's sales by the overall consumption in China. The overall consumption included
sales by three Chinese producers that were excluded from the domestic industry because
they were related to exporters.55 The domestic industry 's share in domestic production
was calculated by dividing their production by the total production output in China. The
total production output excluded the production data pertaining to those three Chinese
producers that were specifically excluded from the domestic industry.56
b. Japan itself refers to the possibility that a large part of domestic production was sold
outside China.57

49 Japan's first written submission, paras. 478-481.
50 Japan's first written submission, paras. 477 and 482-483.
51 Japan's first written submission, para. 484.
52 Japan's first written submission, para. 484.
53 Japan's second written submission, para. 288.
54 China's first written submission, paras. 663-664.
55 China's first written submission, para. 666; second written submission, para. 399. See also
China's first written submission, paras. 441-442.
56 China's first written submission, para. 666. See also Japan's second written submission, para. 291.
57 China's first written submission, para. 665.

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7.44. We note that the "major proportion" requirement in Article 4.1 focuses on the share of th e
domestic industry in total domestic production, and not the domestic industry 's share in domestic
consumption (or market share). We also note that Article 4.1 of the Anti -Dumping Agreement (or
any other provision of the Anti-Dumping Agreement) does not specifically require an explanation of
why there may be a difference between the domestic industry 's market share and its share of
domestic production.58 In the absence of any obligation, we do not consider that MOFCOM was
required to expla in in its determi nation any difference between the domestic industry 's share of
domestic production and its market share. Moreover, to the extent that Japan may be arguing that
the difference in the domestic industry producers' market share compared with their share in total
domestic production shows that the latter data relied upon by MOFCOM were inaccurate, we note
that, as Japan acknowledges, the sources of the different data sets are different. In our view, the
difference in the market share of the domestic industry compared with its share of total domestic
production is not, alone, sufficient to show that the data used to calculate the domestic
industry's share in domestic production was unreliable. Japan has not demonstrated how exactly the
data on domestic production was inaccurate.
7.45. Based on the foregoing, we find that Japan has not established that MOFCOM's definition of
the domestic industry was inconsistent with Article 4.1 because of an absence in MOFCOM's final
determination of any explanation with respect to the difference in the domestic industry's share of
domestic production and its market share.
7.1.3.3 Japan's arguments concerning the representativeness of the domestic industry
7.46. Japan contends that MOFCOM failed to comply with the "qualitative" aspect of the "maj or
proportion" requirement in Article 4.1 of the Anti-Dumping Agreement because it did not ensure that
the domestic industry was substantially representative of the domestic producers as a whole. For
Japan, MOFCOM's failure arises because in examining the proportion of the domestic production of
billets (slabs ) represented by the applicant and its supporters, MOFCOM accumulated the sales
volume of billets (slabs ) with the production volume of coils and plates. 59 In doing so, Japan
maintains that MOFCOM failed to ensure that the domestic industry substantially reflected the total
domestic production of each of these three product categories.60 Japan submits in this regard that
if the composition of the producers included in the domestic industry is different and unique
compared to the array of producers responsible for total domestic production (comprising producers
other than those in the domestic industry), then there would be a material risk that any injury found
with respect to the "domestic industry" would not reflect the actual state of the domestic producers
as a whole.61
7.47. In particular, Japan contends, by pointing to certain exhibits, that the evidence before
MOFCOM should have allowed it to understand that the domestic industry's production ratio of billets
(slabs), coils, and plates differed from the production ratio of the domestic producers as a whole. 62
Japan also points to evidence showing significant differences between billets (slabs), coils , and
plates, which according to Japan were three different products that had different characteristics and
were not substitutable with one another.63 Japan contends that a definition of the domestic industry
that does not properly take into account the differences among these three product categories will

58 We note that Japan responded to China's argument that the difference between the domestic
industry's market share, and its share in domestic production could be explained (a) by differences between
the production and sales volume; and (b) MOFCOM's exclusion of three producers from the "total production
output" used to calculate the share of the domestic industry in domestic production. (Japan's second written
submission, paras. 289-291).
Regarding the first argument, Japan contends that by arguing that the difference between production
and sales may explain the discrepancy, China admits that the domestic industry had unique characteristics that
affect its production or sales, and which, in turn, supports Japan's view that the domestic industry was not
representative of domestic production. However, Japan did not explain how such a difference establishes that
the domestic industry was not representative of domestic production.
Regarding the second argument, Japan contends that the final determination does not show the extent
to which production volume of the three excluded producers explain the discrepancy between the domestic
industry's market share and share in domestic production. However, again Japan did not point to any legal
requirement why MOFCOM was required to make such a showing in its final determination.
59 Japan's first written submission, para. 486.
60 Japan's first written submission, para. 486.
61 Japan's first written submission, para. 489.
62 Japan's response to Panel question No. 4, para. 14.
63 Japan's response to Panel question No. 4, para. 15; second written submission, para. 296.

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not be able to accurately analyse the different impact that the imports of each of these categories
may have on the state of the domestic industry.64
7.48. China notes that Japan has not provided any evidence to support its view that the domestic
industry before MOFCOM was different or unique compared to the firms making up total domestic
production, noting in this regar d Japan's admission during the first substantive meeting that there
was no evidence to support Japan's view.65
7.49. China also questions the legal basis of Japan's view that MOFCOM should have confirmed that
the production ratio of the domestic industry with respect to these three products was equivalent or
close to the production ratio of these three products in total domestic production.66 Moreover, noting
Japan's reliance on certain exhibits that, per Japan, should have allowed MOFCOM to under stand
that the domestic industry 's production ratio of billets (slabs), coils , and plates differed from the
production ratio of the domestic producers as a whole, China asserts that Japan fails to show how
these exhibits support Japan's view.67
7.50. In addition, China rejects Japan's argument that MOFCOM's definition of the domestic industry
should have properly taken into account the differences among billets (slabs), coils, and plates.
Instead, China states that the "major proportion" requirement of Article 4.1 must be assessed in
relation to the like product produced by the domestic producers as a whole. Having defined the
domestic like product to include billets (slabs), coils, and plates (which Japan does not challenge),
MOFCOM, per China, was not required t o conduct a separate analysis for these three product
categories.68 Instead, in China's view, MOFCOM was only required to define the domestic industry
based on the like product as a whole (which included all these three product categories), which is
what it did.
7.51. The question before us is whether MOFCOM failed to comply with the "major proportion"
requirement in Article 4.1 by not ensuring that the production of the defined domestic industry
substantially reflected the total domestic production of each of th e three product categories falling
within the scope of the domestic like product. In answering this question, we start by noting that,
as previous DSB reports have also recognized, neither the product under consideration nor the
domestic like product need to be homogenous, and thus products falling within the "domestic like
product" do not need to be like each other.69 However, to comply with the qualitative aspect of the
"major proportion" requirement under Article 4.1, the domestic industry as defined by the
investigating authority must still be representative of domestic producers as a whole. If the domestic
industry is unique compared to the rest of the domestic producers because, for example, it focuses
on the production of a particular type of like pro duct that is not produced by other domestic
producers, then depending upon the facts, the domestic industry may potentially be
unrepresentative of the domestic industry as a whole. However, the burden for demonstrating any
such unrepresentativeness is on the complainant, and here it is up to Japan to make a prima facie
case through arguments and evidence, that MOFCOM failed to define the domestic industry
consistently with Article 4.1.
7.52. In respect of Japan's arguments in its first written submission, we asked Japan to identify the
specific evidence before MOFCOM supporting its view that the domestic industry was different and
unique compared to the rest of the domestic producers. While at the first substantive meeting Japan
contended that there was "no decisive evidence" in this regard, in its written responses to our
questions it pointed to two attachments (attachments 4 and 5 ) in the application filed by the

64 Japan's first written submission, para. 488.
65 China's second written submission, para. 387.
66 China's second written submission, para. 393.
67 China's second written submission, para. 395.
68 China's first written submission, paras. 668-670. During the interim review, China objected to the use
of the term "product categories" when referring to billets (slabs), coils and plates. (China's request for interim
review, para. 3). China requests the use of the term "shapes" instead. We note that MOFCOM did not use
consistent terminology when referring to billets (slabs), coils and plates, and MOFCOM did not use the term
"shapes". In contrast, we do find certain MOFCOM references to "product categories" in the parts of
MOFCOM's determination in relation to billets (slabs), coils and plates. (MOFCOM's final determination
(Exhibit JPN-5.b), p. 43). We have decided to retain the reference to product categories in the final report, and
note that this reference does not prejudge any of the substantive issues before us.
69 See e.g. Panel Report, Korea – Certain Paper, paras. 7.217-7.220.

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domestic industry.70 Japan notes that attachment 4 and some portions of a ttachment 5 were not
disclosed by MOFCOM (or China ) for confidentiality reasons. 71 However, Japan does not properly
explain what exactly in those exhibits could be potentially relevant to supporting Japan 's claim,
instead contending that "it is impossible for Japan to fully understand what types of data are
contained" in those attachments. 72 Nevertheless, Japan contends that based on this evidence
MOFCOM "must have been able to understand" that the domestic industry 's production ratios
differed from the rat io of the same for domestic production. 73 For instance, Japan contends that
MOFCOM "could have noticed" that Shanxi Taigang Stainless Steel Co. Ltd, which was a major
component of the domestic industry, was different and unique with regard to the production volume
of composition of these three products. However, Japan does not cite to any evidence in support of
this view.74
7.53. Japan also points to evidence presented by Japanese respondents to MOFCOM which showed
significant differences between billets (slabs), coils, and plates.75 Japan submits that based on this
evidence, interested parties requested MOFCOM to assess the representativeness of the domestic
industry separately for each of the three product categories at issue.76 Japan asserts that MOFCOM
failed to properly review this evidence. Instead, MOFCOM rejected, without proper consideration of
this evidence, the interested parties ' request to assess the representativeness of the domestic
industry separately for each of the three product categories at issue, based on MOFCOM's view that
the three product categories, i.e. billets, coils, and plates formed part of the same domestic like
product and product under consideration.77
7.54. In our view , Japan has not established that the domestic industry as defined was not
representative of the domestic industry as a whole because of differences between billets, coils, and
plates. We noted above that neither the product under consideration nor the domestic like product
need to b e homogeneous. Thus, differences between the product categories forming part of the
product under consideration or domestic like products are not determinative of whether the domestic
industry as defined is representative of the domestic industry as a whol e. While evidence in a
particular case might lead to a conclusion that a domestic industry was not representative due to
the mix of products it produced, in this case Japan has presented no such evidence.
7.55. Based on the foregoing, we find that Japan has fail ed to establish that MOFCOM defined the
domestic industry inconsistently with the "major proportion" requirement in Article 4.1 of the
Anti-Dumping Agreement for the reason that the domestic industry was unrepresentative of
domestic production as a whole.
7.1.4 Conclusion
7.56. Based on the foregoing, and for the reasons set out in paragraph 7.41, we find that Japan
has established that MOFCOM's determination of the domestic industry was inconsistent with
Article 4.1 of the Anti-Dumping Agreement. We furthermore find that Japan has not established that
MOFCOM's definition of the domestic industry was inconsistent with Article 4.1 of the
Anti-Dumping Agreement because of the following reasons:
a. the alleged discrepancy between the domestic industry's market share data and its share
in domestic production; and
b. the alleged lack of representativeness of the domestic industry.
7.57. In light of these findings under Article 4.1 of the Anti-Dumping Agreement, and in the absence
of an independent claim by Japan under Article 3.1, we do not consider it is necessary, for the

70 Japan's response to Panel question No. 4, para. 14.
71 Japan's response to Panel question No. 4, para. 14.
72 Japan's response to Panel question No. 4, para. 14.
73 Japan's response to Panel question No. 4, para. 14.
74 Japan's response to Panel question No. 4, para. 14.
75 Japan's response to Panel question No. 4, para. 15.
76 Japan's response to Panel question No. 4, para. 15.
77 Japan's response to Panel question No. 4, para. 16.

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purpose of securing a positive solution to the dispute , to make additional findings in relation to
Japan's consequential claim under Article 3.1 of the Anti-Dumping Agreement.
7.2 Japan's claims concerning MOFCOM's cumulation analysis
7.2.1 Introduction
7.58. In conducting its injury analysis, MOFCOM cumulatively assessed the impact of dumped
imports from all four sources of investigated imports, namely, imports from the European Union,
Indonesia, Japan, and Korea . Japan claims that MOFCOM's decision to cumulatively assess t he
impact of the dumped imports was inconsistent with Articles 3.1 and 3.3 of the
Anti-Dumping Agreement.78
7.59. Japan notes that Article 3.3 of the Anti -Dumping Agreement permits an investigating
authority to cumulatively assess the impact of imports from different countries or territories under
investigation only if it determines, inter alia, that such a cumulative assessment is "appropriate" in
light of (a) the conditions of competition between the imported products from the subject countries
or territories; and (b) the conditions of competition between those imported products and the
domestic like product. Japan contends that MOFCOM failed to properly de termine whether such
conditions of competition existed, and thus did not have a proper basis to cumulatively assess the
dumped imports from the four sources under investigation.
7.2.2 Articles 3.3 and 3.1 of the Anti-Dumping Agreement
7.60. Article 3.3 of the Anti-Dumping Agreement, which sets out the relevant rules on cumulation,
reads as follows:
Where imports of a product from more than one country are simultaneously subject to
anti-dumping investigations, the investigating authorities may cumulatively assess the
effects of such imports only if they determine that (a) the margin of dumping
established in relation to the imports from each country is more than de minimis as
defined in paragraph 8 of Article 5 and the volume of imports from each country is not
negligible and (b) a cumulative assessment of the effects of the imports is appropriate
in light of the conditions of competition between the imported products and the
conditions of competition between the imported products and the like domestic
product.79
7.61. Article 3.1 of the Anti-Dumping Agreement provides that:
A determination of injury for purposes of Article VI of GATT 1994 shall be based on
positive evidence and involve an objective examination of both (a ) the volume of the
dumped imports and the effect of the dumped imports on prices in the domestic market
for like products, and (b) the consequent impact of these imports on domestic producers
of such products.
7.62. The interpretative question before us focuses on the investigating authority's obligation under
Article 3.3 to cumulatively assess imports from different sources only if it is "appropriate" to do so
in light of the conditions of competition between (a) the imported products and (b) the imported
products and the domestic like product.
7.63. Japan argues that Article VI of the GATT 1994 does not allow investigating authorities to
attribute injury to subject imports from a specific member if imports from that member do not in
fact cause material injury to the domestic industry, and asserts that Article 3.3 of the
Anti-Dumping Agreement is not an exception to this principle. 80 Thus, relying in part on certain
statements made by the Appellate Body in EC – Tube or Pipe Fittings, Japan initially argued, in its
first written submission, that a cumulative assessment of imports is permitted under Article 3.3

78 Japan also makes consequential claims under Articles 3.2, 3.4, and 3.5. (Japan's first written
submission, paras. 391, 393, and 440-450).
79 Emphasis added.
80 Japan's first written submission, paras. 225-226.

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"[o]nly in such circumstances" where "dumped imports from each country (region ) [under
investigation] could be found to be 'in fact' causing injury through a cumulative assessment, which
cannot be identified through a country -specific analysis".81 However, in response to our questions,
Japan subsequently clarified that this argument should not be understood to mean that an
investigating authority is required under Article 3.3 to examine, or make a separate assessment of,
whether imports from only some of the investigated members are causing i njury to the domestic
industry.82 Japan has explained that it is not contending that an investigating authority is required
under Article 3.3 to con duct separate causation assessments for each source of investigated
imports.83 Instead, Japan maintains that in determining whether a cumulative assessment is
appropriate in light of the conditions of competition, an investigating authority must at least identify
factual circumstances where the imported products from any one source compete with e ach other,
and with the domestic like prod ucts, in such a way that the imports from any source can make up
for lower levels of imports from any other source.84
7.64. China rejects Japan 's interpretation of Article 3.3. China contends that under
Japan's interpretation, an investigating authority may fin d cumulation to be appropriate in light of
the conditions of competition only if it first conducts a country -specific injury analysis to ascertain
that such a country -specific analysis would not be capable of identifying material injury to the
domestic industry.85 However, per China, Article 3.3 does not impose such a requirement.86
7.65. In reflecting on the legal standard under Article 3.3, we note that this provision permits an
investigating authority to cumulatively assess the effects of subject imports from different sources
if three conditions are met:
a. the margin of dumping established in relation to imports from each country or territory
under investigation is more than de minimis;
b. the volume of imports from each such country or territory is not negligible; and
c. cumulative assessment is "appropriate" in light of the "conditions of competition" between
the imported products, and between the imported and domestic like product.
7.66. Article 3.3, on its face, does not impose any additional conditions that an inves tigating
authority must meet before cumulating imports from different sources.87 Moreover, Article 3.3 does
not set out any mandatory or indicative factors that it requires an investigating authority to consider
when determining whether cumulation is "appropriate" in light of "the conditions of competition".88
The absence of any such factors suggests that Article 3.3 leaves an investigating authority with a
margin of discretion as to how to structure this determination.89 In our view, however, it follows
from the text of Article 3.3, that an investigating authority must at the very least ground its
cumulation findings on an understanding of the dynamics of competition between the relevant
products derived from the record evidence.
7.67. Japan submits that Article 3.3 establishes an obligation on investigating authorities to identify
factual circumstances in which the imported products from any one source compete with each other,
and with the domestic like products, "in such a way that the imports from any source can make up
for lower levels of imports from any other source".90 To the extent that we should understand this
submission to mean that Japan is of the view that factors such as the competitive overlap between
imports from different sources under in vestigation, and the degree of competition between those
sources of imports and the domestic like product, are relevant considerations, we agree that such
factors, which go to the heart of the competitive relationship between the relevant products, might

81 Japan's first written submission, para. 228.
82 Japan's responses to Panel question No. 6(a), para. 21; question No. 6(b), para. 26; and
question No. 9, para. 35.
83 Japan's response to Panel question No. 6(b), para. 26.
84 Japan's second written submission, para. 138; response to Panel question No. 7, para. 29.
85 China's second written submission, para. 235.
86 China's second written submission, para. 236.
87 See e.g. Appellate Body Report, EC – Tube or Pipe Fittings, para. 109.
88 Panel Report, EU – Footwear (China), para. 7.404.
89 See e.g. Panel Report, EU – Footwear (China), para. 7.403.
90 Japan's second written submission, para. 138. (emphasis added)

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well inform an investigating authority's determination of whether a cumulative assessment is
"appropriate".
7.68. However, we do not see any textual basis in Article 3.3 to find that investigating authorities
are required to identify factual circumstances showin g that the competitive relationship between
imported products and the domestic like product is such that "imports from any source can make up
for lower levels of imports from any other source". While considerations pertaining to the
substitutability of the relevant products may be an important part of developing an understanding
of the conditions of competition, it does not follow that an investigating authority is precluded from
cumulating th e effects of dumped imports unless it has demonstrated that the competitive
relationship between relevant products is such that imports from any one of the investigated sources
may take the place of imports from other sources. In our view, such an approach would be at odds
with the very purpose of cumulation, as it would mean that a domestic industry would have no
recourse to remedy injury suffered through the combined effects of different sources of dumped
imports, whenever each of the sources of imports are not in close competition with each other, even
though they compete directly with the domestic like product. We find a useful statement of the
general considerations leading us to reach this conclusion in the following views expressed by the
Appellate Body in EC – Tube or Pipe Fittings:
A cumulative analysis logically is premised on a recognition that the domestic industry
faces the impact of the "dumped imports" as a whole and that it may be injured by the
total impact of the dumped imports, even though those imports originate from various
countries. If, for example, the dumped imports from some countries are low in volume
or are declining, an exclusively country -specific analysis may not identify the causal
relationship between the dumped imports from those countries and the injury suffered
by the domestic industry. The outcome may then be that, because imports from such
countries could not individually be identified as causing injury, the dumped imports from
these countries would not be subject to anti -dumping duties, even though they are in
fact causing injury . In our view, therefore, by expressly providing for cumulation in
Article 3.3 of the Anti-Dumping Agreement, the negotiators appear to have recognized
that a domestic industry confronted with dumpe d imports originating from several
countries may be injured by the cumulated effects of those imports, and that those
effects may not be adequately taken into account in a country -specific analysis of the
injurious effects of dumped imports.91
7.69. Although Japan maintains that this Appellate Body statement supports its own position, we
do not read it that way. In this passage, the Appellate Body explains that, in its view, the cumulation
analysis under Article 3.3 recognizes that the domestic indust ry faces the impact of the dumped
imports as a whole. According to the Appellate Body, "those effects may not be adequately taken
into account in a country-specific analysis" because, if, "for example, the dumped imports from some
countries are low in volume or are declining, an exclusively country-specific analysis may not identify
the causal relationship between the dumped imports from those countries and the injury suffered
by the domestic industry". Thus, the Appellate Body suggests that, depending upon the facts,
cumulation under Article 3.3 may permit an investigating authority to find injury to a domestic
industry from the cumulated effects of dumped imports from all investigated sources, in situations
when it may not be possible to find injury from t he effects of dumped imports on an individual
country-specific basis.
7.70. We agree with this understanding of Article 3.3 and find it to be instructive when applied to
the factual scenario we have posited above . That scenario is a situation in which each sour ce of
dumped imports is in direct competition with the domestic like product, but less so with dumped
imports from other sources. In such a situation, a country -specific analysis may not identify injury
to the domestic industry because the effects of the dumped imports determined with respect to one
of the sources of dumped imports may not be sufficient to satisfy the threshold of injury. However,
when the effects of the dumped imports from all sources are combined, it might well be possible to
establish injury. Accepting Japan's submission in this context would mean that the domestic industry
would have no recourse to remedy the injury suffered from the combined effects of all imports simply
because imports from the different investigated sources may not be perfect substitutes for each
other or, in any case, capable of replacing theoretical declines in the volume of imports from any

91 Appellate Body Report, EC – Tube or Pipe Fittings, para. 116. (emphasis omitted)

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source. Again, we find this outcome to be inconsistent with what we understand to be the purpose
of cumulation.
7.71. Thus, to the extent that Japan's complaint against MOFCOM's determination of cumulation is
grounded in the view that MOFCOM was required to identify factual circumstances showing that the
competitive relationship between dumped imports, or between dumped imports and the domestic
like product, is such that "imports from any source can make up for lower levels of imports from any
other source", we find that it has no legal basis in Article 3.3 and, therefore, dismiss it.
7.72. Having said that we note that in challenging MOFCOM 's decision to perform a cumulative
assessment of injury, Japan has not consistently relied upon the legal interpretation of Article 3.3
we have rejected above. While certain aspects of Japan's submissions are clearly based on that
interpretation, we under stand other aspects of its submission s to be more simply grounded in
Japan's view that MOFCOM failed to perform an objective assessment of the competitive
relationships between the dumped imports, and the dumped imports and the domestic like product,
in light of the record evidence. We proceed to examine the merits of Japan's claims on this basis.
7.2.3 MOFCOM's cumulation analysis
7.73. MOFCOM's decision to cumulatively assess the impact of dumped imports from the
European Union, Indonesia, Japan, and Korea, was based on its findings with respect to competitive
relationship between the relevant products. In relation to the conditions of competition between
imported products, MOFCOM's final determination sets out the following analysis and conclusion:
The investigation shows that the physical and chemical characteristics, product usage,
raw material, production technology and other aspects of dumped imports originating
in the EU, Japan, Korea and Indonesia were basically the same; the companies in the
EU, Japan and Korea and Indonesia sold the dumped imports to the domestic market
by direct sale, distribution and other manners, which accounted for a relevant market
share of the domestic market; all manufacturers or dealers had the same or similar
pricing strategies; the dumped imports had the same customer group, and the domestic
downstream users could freely purchase and use the dumped imports originating in the
EU, Japan, Korea and Indonesia.
To sum up, the Investigating Authority determined that there was a comp etitive
relationship between dumped imports in the preliminary determination.92
7.74. With respect to the conditions of competition between the imported and domestic like
products, MOFCOM's analysis and conclusions were as follows:
The investigation shows that t he physical and chemical characteristics, raw material,
production process, product usage, sales channel and other aspects of the dumped
imports and domestic like products were basically the same. The consumer market of
the domestic stainless steel billet and hot -rolled stainless steel plate (coil) was a
competitive and open market, the dumped imports and domestic like products
competed with each other in the domestic market, and the price was an important factor
that affected the product sales. The sales channel of the dumped imports and domestic
like products was same or similar, and they were sold on domestic market by direct
sale, distribution and other manners; the customer group of them was same and
intersected, and the domestic downstream users purcha sed and used the dumped
imports and domestic like products alternatively; the sale of products of all sources did
not have obvious time and regional preference.
Accordingly, the Investigating Authority determined that there was a direct competitive
relationship between dumped imports and domestic like products in the preliminary
determination.93

92 MOFCOM's final determination (Exhibit JPN-5.b), p. 31.
93 MOFCOM's final determination (Exhibit JPN-5.b), pp. 31-32.

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7.75. During the investigation, certain interested parties highlighted the fact that the models,
volumes, and prices of the products they exported were different from tho se exported from other
sources of imports under investigation, and for this reason not in competition with each other .94
Interested parties from Korea also asserted that Korean products were made for specific customers
and were not in a competitive relationship with the domestic like product. 95 While acknowledging
that volume and price trends of the investigated imports from different sources were not the same,
and that there were many grades of billets (slabs), coils and plates, MOFCOM noted, inter alia,
that96:
a. exports from all four investigated origins included the 300-series grade;
b. exports from all four investigated origins overlapped in terms of product categories and
grades;
c. subject imports from Indonesia directly competed with those from European Union, Japan,
and Korea; and
d. subject imports from Korea were also sold to unaffiliated downstream users in the Chinese
market.
7.76. Japan argues that MOFCOM's cumulation analysis is undermined by its failure to consider a
range of factors, which in Japan's view, reveal that the competitive relationship between the relevant
products could not support a finding that cumulation was appropriate. The specific factors Japan
points to are: (a) the differences in the proportion of billets (slabs), coils, and plates, as well as the
different grades of these products, exported from the European Union, Indonesia, Japan, and Korea;
and (b) the differences in the distribution channels (affiliated vs . unaffiliated party sales), volumes
and prices of the same product categories or grades exported from these four sources.
7.77. While declining to endorse the data Japan relies upon 97, China submits that the data do not
support Japan's contentions. Rather, according to China, the relevant data relied upon by Japan
show that exports from the four sources of investigated imports were in competition with each other,
which in turn, supporte d MOFCOM's decision to cumulate. China also focuses on the alleged
significant overlap in the categories and grades of the products exported from all four investigated
sources. Specifically, China maintains that the data Japan relies upon show that:
a. a large proportion of coils, billets (slabs) and except for Indonesia, plates98, were exported
from all four investigated sources;
b. the 300-series, which was the most important grade among the dumped imports 99, was
exported from all four investigated sources;
c. the 400-series was exported from all investigated sources except Indonesia.100
7.78. We review the merits of Japan's submissions in the sections that follow.

94 MOFCOM's final determination (Exhibit JPN-5.b), p. 32.
95 MOFCOM's final determination (Exhibit JPN-5.b), p. 32.
96 MOFCOM's final determination (Exhibit JPN-5.b), pp. 33-34.
97 In making its arguments in support of its cumulation claim, Japan presented charts 20-38 in its first
written submission, which cited a non-injury brief filed before MOFCOM as the source of the data in those
charts. In response to our questions, China agreed that chart 20 in Japan's first written submission, which sets
out the ratio of billets (slabs), coils, and plates in the export basket of the European Union, Indonesia, Japan,
and Korea, was before MOFCOM in the underlying investigation. (China's response to Panel question No. 11,
para. 60). Thus, the data in chart 20 reflect undisputed facts on the record before us. However, China does not
take any position regarding the accuracy or reliability of the other charts, and states that these charts and data
were not presented as such in the non-injury brief cited by Japan. In any case, China submits that the data put
forth by Japan in this regard shows that subject imports from the four investigated sources were in competition
with each other. (China's response to Panel question No. 11, paras. 61-62)
98 China's first written submission, para. 411.
99 China's first written submission, para. 411.
100 China's first written submission, para. 411.

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7.2.3.1 Differences in the proportions of billets (slabs), coils, and plates, as well as the
different grades of these products, exported from the European Union, Indonesia, Japan,
and Korea
7.79. In challenging MOFCOM's analysis of the conditions of competition, Japan contends that billets
(slabs), coils, and plates are not substitutable with each other. Considering that the proportions, or
percentage shares, of billets (slabs), coils , and plates in the export basket of the European Union,
Indonesia, Japan, and Korea differed, Japan argues that it was questionable whether exports from
these four sources were in competition with each other.101 Similarly, Japan argues that because the
proportions, or percentage share s, of the different steel grade s in the export basket s of the
European Union, Indonesia, Japan, and Korea differed, the exports from these four sources were not
in competition with each other.
7.80. With regard to the differences in the percentage share s of billets (slabs), coils, and plates in
the export baskets of the European Union, Indonesia, Japan, and Korea, we refer to the following
table, which Japan produced using data China agrees was on MOFCOM's record.102
Subject Imports Stainless steel
billets (slabs)
Hot-rolled stainless
steel coils
Hot-rolled stainless
steel plates
European Union 2.9% 56.5% 40.6%
Indonesia 39.3% 60.7% 0.0%
Japan 0.3% 72.8% 26.9%
Korea 5.0% 94.0% 1.0%

7.81. The data show that with the exception of Indonesia, which did not export plates, the
four sources under investigation exported all three product categories, namely, billets (slabs), coils,
and plates. In this light, we do not consider that the differences in the proportion of billets (slabs),
coils or plates in the basket of imports from each of the investigated sources undermine s the
objectivity of MOFCOM's conclusion regarding the competitive relationship between subject imports.
7.82. Turning to the differences asserted by Japan in grades of exported steel, China objects to the
reliability of the data Japan relies upon for this purp ose because of its underlying assumptions.103
Nonetheless, taken at face value, we note that the relevant data reveal that 300-series products
were exported from all four investigated sources, and that the European Union, Japan, and Korea
exported the 400-series products as well. In particular, the data provided by Japan show that within
the export basket of the European Union, Indonesia, Japan , and Korea the percentage share of
nickel-containing products (300-series) was 78.49%, 100%, 44.40% and 92.51% respectively. The
share of nickel -free (400 -series) products within the export basket of the European Union,
Indonesia, Japan, and Korea was 13.21%, 0%, 53.67% and 2.25%.104
7.83. Unlike Japan, w e do not consider that these data undermine the objectivity of
MOFCOM's findings regarding the competitive relation ship between exports from the
European Union, Indonesia, Japan , and Korea . Instead, we consider them to be consistent with
MOFCOM's factual findings, including its finding s that (a) exports from the investigated sources
overlapped in terms of grades ; and (b) exports from all four investigated sources included the
300-series grade. Accordingly, we find that even without resolving the factual dispute between the
parties about the reliability of the data Japan relies upon, Japan has not established that the relevant
data, when taken at face value, demonstrate that MOFCOM's findings regarding the competitive
relationship between the subject imports were not objective or supported by a proper factual basis.
7.2.3.2 Differences in the distribution channels, volumes and prices of the same
categories or grades of products exported from the European Union, Indonesia, Japan ,
and Korea
7.84. Japan contends that a variety of evidence presented before MOFCOM brou ght into question
the competitive relationship between subject imports from the European Union, Indonesia, Japan,
and Korea. Japan asserts that MOFCOM's finding of an overall competitive relation ship between

101 Japan's first written submission, para. 248.
102 China's response to Panel question No. 11, para. 60.
103 See e.g. China's response to Panel question No. 11, para. 61. See also Japan's first written
submission, fn 322 and chart 21.
104 Japan's first written submission, chart 21.

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subject imports from these four sources did not properly engage with this evidence and was thus
not objective or based on a reasoned and adequate explanation. Japan 's submissions focus on
evidence pertaining to differences in distribution channels, volume and price trends , pertaining to
the subject imports from the four different sources.
7.2.3.2.1 Distribution channels
7.85. Japan submits that Indonesian and Korean exports of billets (slabs) were mainly intra-group
sales and thus not openly commercialized in the Chinese market. 105 Japan also contends that coils
from Korea did not compete with subject imports from the other three sources because they were
sold to affiliated companies, while adding that in light of the fact that coils are semi-finished products,
it was also highly likely th at subject imports from the European Union and Indonesia were sold to
affiliated customers.106 Relying on its understanding that cumulative assessment under Article 3.3
is appropriate only when subject imports compete with each other such that the imports f rom one
source can substitute lower imports from any other source, Japan submits that intra -group sales
cannot be cumulated with openly commercialized sales because they will normally lack a competitive
overlap.107 Japan contends that the alleged dominance of intra-group sales with regard to certain
imports from Korea and Indonesia is one of the important factors that cast doubt on the existence
of the competitive overlap allegedly found by MOFCOM, but MOFCOM failed to address this issue in
its determination.108
7.86. China contends that just because certain imports are focused on intra -group sales does not
mean that they do not compete with other imports.109 China also notes that imports from Korea and
Indonesia were not exclusively intra-group sales, but included merchant sales as well.110
7.87. We note that Japan's arguments challenging MOFCOM's alleged failure to consider differences
in distribution channels are tied to its legal interpretation of Article 3.3, which we have previously
rejected. To this extent, Japan's submissions concerning the differences in channels of distribution
of the subject imports are based on a misconceived understanding of the obligations in Article 3.3.
Moreover, we note that the evidence Japan relies on is not necessarily representative of subject
imports from Indonesia or Korea as a whole. In this regard, we take note of China's submission that
Japan's assertions are limited to exports of billets (slabs) by Indonesia, and do not apply to coils,
which comprised the majority of Indonesian exports.111 We also note China's submission that POSCO
sold to affiliated and non -affiliated customers in China though, as MOFCOM stated, sales to
unaffiliated customers accounted for a small share of its total exports. 112 Japan does not disagree
with these factual assertions.113
7.88. Thus, we do not consider that Japan has shown how the evidence it refers to regarding
differences in distribution channels undermines the objectivity of MOFCOM's overall evaluation of
the competitive relation between subject imports.
7.2.3.2.2 Volume trends
7.89. Japan notes that (a) almost all of the subject imports of billets (slabs) were from Indonesia
and Korea, and notes that Indonesian imports "skyrocketed" in 2017 114; (b) while the
European Union, Japan, and Korea constantly exported coils during the POI, coils from Indonesia
suddenly "exploded" in and after 2017 115; and (c) the majority of plates originated in the
European Union and Japan, with small amounts imported from Korea which increased in 2017.116

105 Japan's first written submission, paras. 261-264.
106 Japan's first written submission, para. 271. Japan did not cite any evidence in support of its view that
it was highly likely that imports from the European Union and Indonesia were sold to affiliated entities.
107 Japan's comments on China's response to Panel question No. 44, para. 11.
108 Japan's comments on China's response to Panel question No. 44, para. 23.
109 China's response to Panel question No. 44, paras. 37-38.
110 China's response to Panel question No. 44, para. 47.
111 China's response to Panel question No. 44, para. 49.
112 China's response to Panel question No. 44, para. 50.
113 See e.g. Japan's comments on China's response to Panel question No. 44, paras. 23-24.
114 Japan's first written submission, para. 260.
115 Japan's first written submission, para. 270.
116 Japan's first written submission, para. 282.

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7.90. China asserts that the volume data relied on by Japan demonstrates, rather than refutes, the
existence of a competitive relationship between the subject imports.117 China supports this assertion
by noting, for example, that the data Japan relies upon show that there was a large increase in
exports of coils from Indonesia in 2017, and that there were similarities in the export trends from
other sources.118 China also notes how the data reveal that Japan's exports of a particular grade of
coils competed with and replaced exports from the European Union and Korea.119 Finally, China
submits that differences in the volume of subject imports exported from different sources do not
necessarily call into question their competitive relationship.120
7.91. We note that in the underlying investigation MOFCOM acknowledged the differences in volume
trends from the different sources under investigation, but found that these did not undermine its
finding regarding the competitive relationship that existed between them.121 In our view, Japan has
not established through its arguments regarding the differences in the volumes of the imports, that
MOFCOM's overall finding in respect of the conditions of competition, could not have been reached
by an objective and impartial investigating authority. If an investigated source of exports increases
in volume during the course of the POI (as was the case with Indonesia, whose exports of billets
(slabs) and coils increased in 2017) that may well be a sign that exports from that source are
effectively competing with imports from all other sources, which would make it appropriate for an
investigating authority to cumulatively assess the imports from all such sources.
7.92. Thus, we do not consider that Japan has shown how the evidence it refers to regarding
differences in the volumes of the subject imports undermines the objectivity of MOFCOM's overall
evaluation of the competitive relation between subject imports.
7.2.3.2.3 Price trends
7.93. Japan argues that considering the differences in price trends within subject imports,
MOFCOM's finding that cumulation was appropriate in light of the conditions of competition between
subject imports, and between subject imports and the domestic like product, was flawed.
7.94. Japan contends that because the prices of Indonesian and Korean billets (slabs) and coils
were close to, or lower than, the prices of the domestic like product, it is these exports, rather than
billets (slabs) or coils exported by Japan or the European Union, that were likely to impact the prices
of the domestic like product.122 Japan also argues that it is Korean plates, rather than plates exported
from the European Union or Japan, that were likely to impact the domestic like product prices
because the European Union and Japan focused on the high -end and high -priced segment of the
market, and thus had predominant shares of the subject imports. 123 In this light , Japan contends
that MOFCOM erred when it found that the competitive relationship between subject imports and
the domestic like product was such that made cumulation appropriate.
7.95. Similarly, Japan maintains that MOFCOM erred when it found that the conditions of
competition between subject imports were such that cumulation was appropriate because of the
higher prices of billets (slabs) and coils exported by the European Union and Japan, relative to
Indonesia and Korea. 124 Japan adds that the stable prices of plates exported by the
European Union and Japan confirm their strong positions in the sector, and contends that prices of
Korean plates were more variable and generally tended to be slightly lower.125
7.96. Although noting that there were differences in the pric e trends in exports from the
European Union, Indonesia, Japan, and Korea, China contends that these differences do not call into
question MOFCOM's findings regarding a competitive relation ship between subject imports, or
between subject imports and the domestic like product.126 China submits that the data relied on by

117 China's first written submission, paras. 413-414.
118 China's first written submission, para. 413.
119 China's first written submission, para. 414.
120 China's first written submission, para. 409.
121 MOFCOM's final determination (Exhibit JPN-5.b), p. 34.
122 Japan's first written submission, paras. 268, 278, and 280.
123 Japan's first written submission, paras. 283 and 287.
124 Japan's first written submission, paras. 265 and 275.
125 Japan's first written submission, para. 284.
126 China's first written submission, para. 412.

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Japan actually show largely similar trends in the prices of exports from the European Union,
Indonesia, Japan, and Korea.127
7.97. While we are of the view that a consideration of price trends may be relevant in assessing the
conditions of competition between subject imports, or between subject imports and the domestic
like product, we do not consider that Japan has shown that MOFCOM's analysis of the conditions of
competition was flawed in the light of the price trends Japan maintains demonstrate a lack of
competition. Japan focuses on the higher prices from Japan and the European Union relative to
prices from Korea and Indonesia. Japan relies on such price differences to advance its view that only
part of the subject imports – specifically those from Indonesia or Korea – might have been causing
injury to the domestic industry, and that Japanese subject imports could not have had any negative
impact on the prices of domestic like products.128 However, we note that the relevant enquiry under
Article 3.3, either when assessing the conditions of competition between subject imports and the
domestic like product, or between subject imports, is not whether subject imports could have been
causing injury to the domestic industry, but rather whether a cumulative assessment of the subject
imports is appropriate in light of the conditions of competition.
7.98. Japan contends that the European Union and Japan focused on plates, which is a product
category that is high-end and in the high-priced segment, and thus had predominant shares of the
subject imports in this product category.129 However, the data Japan relies upon show an increase
in imports of plates from Korea over the POI . In our view, this undermines Japan's argument that
higher-priced subject imports from the European Union and Japan did not compete with subject
imports from Korea.130 Similarly, Japan's arguments regarding the absence of competition between
Indonesian and Korean coils with those exported by the European Union or Japan are undermined
by the fact that Indonesian exports of coils increased significantly in 2017.
7.99. Thus, we do not co nsider that Japan has shown how the evidence it refers to regarding
differences in the prices of the subject imports undermines the objectivity of MOFCOM's overall
evaluation of the competitive relation between subject imports.131
7.2.3.3 Conclusion
7.100. Based on the foregoing, we conclude that Japan has not established that MOFCOM acted
inconsistently with Articles 3.1 and 3.3 of the Anti-Dumping Agreement in finding that a cumulative
assessment of the effects of the subject imports was appropriate in light of the conditions of
competition between the imported products and the conditions of competition between the imported
products and the like domestic product.132

127 China's first written submission, para. 412.
128 Japan's first written submission, paras. 268-269, 281, and 288.
129 Japan's first written submission, para. 283.
130 We also note that in chart 27 of its first written submission, Japan presents data pertaining to the
country-specific volume of subject imports of coils of the 300-series. Chart 27 shows an increase in Indonesian
exports of coils of the 300-series over the POI, which is accompanied, particularly in the first quarter of 2018
by decline in Korean, Japanese and EU imports of the same type. (Japan's first written submission, p. 115). In
chart 28, Japan presents data pertaining to the country-specific volume of subject imports of coils of the
400-series. The data show an increase in Japanese exports of coils of the 400-series over the POI, which is
accompanied particularly in the first quarter of 2018 by decline in imports from Korea and the European Union.
(Japan's first written submission, p. 116). We consider, as China also argues, that these data support, rather
than undermine, MOFCOM's findings regarding the existence of a competitive relation between subject imports.
(See e.g. China's first written submission, paras. 413-414). In particular, the changes in the volume of subject
imports from the European Union, Indonesia, Japan, and Korea show that they were competing in the Chinese
market for market share.
131 We also note that in charts 24, 25, 29, 31, 34, and 35 of its first written submission, Japan
presented country-specific prices of billets (slabs), coils, and plates, which were not split up based on grades.
Considering the parties agree that differences in grades affect prices, we are of view that the probative value of
these charts is limited.
132 In the light of this finding, we also reject Japan's claims that MOFCOM's price effects analysis, impact
analysis and causation findings were, respectively, inconsistent with Articles 3.2, 3.4, and 3.5 of the
Anti-Dumping Agreement as a consequence of MOFCOM's alleged violation under Articles 3.1 and 3.3.

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7.3 Japan's claims concerning MOFCOM's consideration of price effects
7.3.1 Introduction
7.101. In the underlying inves tigation, MOFCOM found that the subject imports significantly
depressed the price of domestic like products. 133 In its price effects analysis, MOFCOM examined
trends pertaining to:
a. the volume, market share, and prices of subject imports and domestic like p roducts
separately for each product grade; and 134
b. the volume and weighted average prices of the subject imports as a whole, compared with
those pertaining to the domestic like product as a whole, over the injury POI.135
7.102. While MOFCOM considered the price effects of the subject imports of each grade on the
domestic like products of the corresponding grade, MOFCOM rejected the interested parties'
argument that it should consider price effects for stainless steel billets (slabs), stainless steel plates,
and stainless steel coils (product categories) separately.136 Several aspects of MOFCOM's price
effects findings were based on facts available.
7.103. Japan claims that MOFCOM's consideration of price effects was inconsistent with Articles 3.1
and 3.2 of the Anti-Dumping Agreement based on the following grounds:
a. MOFCOM's findings with respect to the comparability of prices of product categories was
not based on an objective examination of positive evidence137;
b. MOFCOM's individual series-specific price effects analyses were not based on an objective
examination of positive evidence138; and
c. MOFCOM's finding of overall price depression was not based on an objective examination
of positive evidence.139
7.104. China denies Japan's claims relying upon two broad lines of defence. First, China maintains
that Japan's claims must be dismissed because MOFCOM's consideration of price effects was based
on best information available, and Japan has not challenged MOFCOM's reliance on best information
available under Article 6.8 and Annex II of the Anti-Dumping Agreement.140 Second, China argues
that Japan has , in any case, not demonstrated that MOFCOM's price effects analysis (which was
based on best information available) involved a comparison of prices that MOFCOM improperly
considered to be comparable, or that the price effects analysis or any aspect thereof was otherwise
inconsistent with Articles 3.1 and 3.2 of the Anti-Dumping Agreement.141
7.105. Below, we first address China's threshold argument that Japan's claims under Articles 3.1
and 3.2 of the Anti -Dumping Agreement must be rejected because Japan has not brought a claim
under Article 6.8 and Annex II of the Anti-Dumping Agreement. For reasons explained below, we do
not agree with China's threshold submission. We then address Japan's claims under Articles 3.1
and 3.2 of the Anti-Dumping Agreement on merits.
7.3.2 Whether the absence o f Japan 's claims under Article 6.8 and Annex II legally
implies that its claims under Articles 3.1 and 3.2 must be dismissed
7.106. China argues that because MOFCOM's consideration of price effects was based on best
information available, Japan's failure to chall enge MOFCOM's final determination under Article 6.8

133 MOFCOM's final determination (Exhibit JPN-5.b), p. 43.
134 MOFCOM's final determination (Exhibit JPN-5.b), pp. 41-42.
135 MOFCOM's final determination (Exhibit JPN-5.b), p. 43.
136 MOFCOM's final determination (Exhibit JPN-5.b), pp. 43-44.
137 Japan's first written submission, paras. 74 and 138.
138 Japan's first written submission, paras. 139-141 and 185-187.
139 Japan's first written submission, para. 188, 204, and 216.
140 China's first written submission, para. 118.
141 China's first written submission, paras. 104-105.

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and Annex II of the Anti-Dumping Agreement should lead to a dismissal of Japan's claims concerning
price effects under Articles 3.1 and 3.2 of the Anti -Dumping Agreement.142 According to China, a
lack of c ooperation by investigated exporters would hamper an authority from finding "positive
evidence" and carry out an "objective examination" pursuant to Article 3.1 by creating gaps in
information, thus necessitating resort to best information available to fil l those gaps. 143 Thus, in
China's view, allowing Japan to pursue its claim under Articles 3.1 and 3.2 of the
Anti-Dumping Agreement would diminish its rights and obligations in Article 6.8 and Annex II of the
Anti-Dumping Agreement144 and upset the careful b alance struck by Article 6.8 and Annex II
between investigating authorities' ability to complete an investigation in the event of
non-cooperation, and the due process and participatory rights of interested parties.145
7.107. Japan contends that even when an invest igating authority resorts to the use of facts
available, it is not exempt from the requirement to ensure that its consideration of price effects is
based on an objective examination of positive evidence pursuant to Articles 3.1 and 3.2 of the
Anti-Dumping Agreement.146 Japan argues that its claim under Articles 3.1 and 3.2 is that all the
information and evidence that MOFCOM relied upon, whether facts available or not, is insufficient to
substantiate that MOFCOM's price effects analysis involved an objective examination of positive
evidence.147
7.108. We note that nothing in Article 6.8 of the Anti -Dumping Agreement indicates that an
investigating authority's resort to best information available with respect to a given aspect of its
determination causes other provis ions of the Agreement to become inapplicable to that aspect of
the determination. Therefore, the fact that MOFCOM resorted to best information available for its
consideration of price effects does not imply that its findings on price effects cannot be chal lenged,
as a matter of law, under Articles 3.1 and 3.2 of the Anti-Dumping Agreement. In the absence of a
claim under Article 6.8 and Annex II of the Anti -Dumping Agreement, we cannot review whether
MOFCOM's decision to resort to facts available was justified, or whether MOFCOM should have chosen
a different set of data than the set it chose as the best information available for relevant aspects of
its consideration of price effects. However, the Anti-Dumping Agreement does not preclude us from
reviewing whether MOFCOM objectively examined the information that it did choose as the best
information available with respect to the relevant aspects of its consideration of price effects and
whether it reasonably and adequately explained its findings. We review below Japan's claims under
Articles 3.1 and 3.2 of the Anti-Dumping Agreement bearing this approach in mind.
7.3.3 Whether MOFCOM's price effects analysis was consistent with Articles 3.1 and 3.2
of the Anti-Dumping Agreement
7.109. Before addressing Japan's three main gr ounds set out in paragraph 7.103 above for
challenging MOFCOM's consideration of price effects, we note that the parties disagree on certain
aspects of the legal in terpretation of these provisions. In resolving Japan's claims, we first set out
our interpretation of the aspects of Articles 3.1 and 3.2 of the Anti -Dumping Agreement on which
the parties disagree. We then examine whether MOFCOM acted inconsistently with these provisions,
as we have interpreted them.
7.3.3.1 Articles 3.1 and 3.2 of the Anti-Dumping Agreement
7.110. There is no disagreement between the parties that Articles 3.1 and 3.2 of the
Anti-Dumping Agreement require an investigating authority to ensure that price c omparisons used
for the purpose of considering the price effects of subject imports on the domestic like product must
involve comparable prices.148 However, when it comes to identifying the circumstances in which the
prices of different product categories may or may not be comparable and, therefore, the factual
conditions that would trigger an investigating authority's obligation to take appropriate steps to
ensure price comparability, the parties have expressed competing views.

142 China's first written submission, para. 118.
143 China's second written submission, para. 22.
144 China's second written submission, para. 23.
145 China's second written submission, paras. 20 and 24.
146 Japan's second written submission, para. 50.
147 Japan's second written submission, para. 49.
148 China's second written submission, para. 61; Japan's first written submission, para. 75.

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7.111. China maintains that the obligation to ensure price comparability is triggered only when the
following circumstances are present: (a) the investigation covers various product categories, which
have price differences between them; (b) the price differences between product categories are
significant; and (c) the baskets of the imported and the domestic like products being compared are
not sufficiently similar in their product mix of different product categories.149 China explains that
when product categories have no price differences bet ween them, or when these differences are
"very small", comparing prices of product categories in the aggregate would not distort the
objectivity of the price effects analysis. 150 Similarly, China asserts that if the baskets of subject
imports and the domest ic like products are sufficiently similar in their composition, comparing
average prices will lead to objective results, even if the underlying categories differ in price.151
7.112. According to Japan , China erroneously argues that an authority is required to mak e
adjustments to ensure price comparability only when there are price differences between the product
categories being compared. Japan contends that non -price differences such as those in physical
characteristics or uses that affect the competitive relatio nship between the product categories also
need to be addressed to ensure price comparability between the product categories. 152 Japan also
maintains that China wrongly argues that an investigating authority will be required to take steps to
ensure price comparability only if there are significant price differences between product categories
that comprise the product under consideration .153 Moreover, Japan submits that even if the
composition of the baskets of subject imports and of the domestic like products is similar, changes
in the average prices may have been caused by changes in the product mix and not by actual
movements in the price of each product .154 Therefore, for Japan, the text of the
Anti-Dumping Agreement or findings of past panels do not require any of the three conditions
referred to by China to exist for an investigating authority to be required to take steps to ensure
price comparability.155
7.113. Articles 3.1 and 3.2 of the Anti-Dumping Agreement provide:
A determination of injury for purposes of Article VI of GATT 1994 shall be based on
positive evidence and involve an objective examination of both (a) the volume of the
dumped imports and the effect of the dumped imports on prices in the domestic market
for like products, and (b) the consequent impact of these imports on domestic producers
of such products.
With regard to the volume of the dumped imports, the investigating authorities shall
consider whether there has been a significant increase in dumped imports, either in
absolute terms or relative to production or consumption in the importing Member. With
regard to the effect of the dumped imports on prices, the investigating authorities shall
consider whether there has been a significant price undercutting by the dumped imports
as compared with the price of a like product of the importing Member, or whether the
effect of such imports is otherwise to depress prices to a significant degree or prev ent
price increases, which otherwise would have occurred, to a significant degree. No one
or several of these factors can necessarily give decisive guidance.
7.114. The first interpretative question to which the parties' arguments give rise is whether
there must be significant price differences between investigated product categories for an
investigating authority to be compelled to take appropriate steps to ensure price comparability.
China asserts that the requirement in Article 3.2 for investigating authorities to consider whether
there has been "significant price undercutting" by subject imports, or whether subject imports have
depressed prices of the domestic like product or prevented price increases to a "significant degree",
shows that Article 3.2 is not concerned with any price differences but only those that are significant.
According to China, this focus on the significance of price effects is also relevant to the obligation to
ensure price comparability. 156 Japan, however, argues that China confuses the co ncept of price

149 China's second written submission, para. 62.
150 China's second written submission, para. 64.
151 China's second written submission, para. 64.
152 Japan's second written submission, paras. 21-26; opening statement at the first meeting of the
Panel, para. 21.
153 Japan's opening statement at the first meeting of the Panel, para. 21.
154 Japan's opening statement at the first meeting of the Panel, para. 20.
155 Japan's second written submission, para. 43.
156 China's response to Panel question No. 12, para. 68.

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comparison with that of price comparability. According to Japan the word "significant" in Article 3.2
of the Anti-Dumping Agreement relates to the investigating authorities' obligation to consider where
there has been "significant" price undercutting, price suppression, or price depression, and therefore
pertains to price comparisons and not price comparability.157
7.115. We share Japan 's view that the adjective "significant" in Article 3.2 of the
Anti-Dumping Agreement qualifies the concepts of pri ce undercutting, price depression or price
suppression. These three price effects are possible outcomes of a price effects analysis and are
therefore conceptually distinct from price comparability. Thus, contrary to China's contention, the
term "significan t" in the text of Article 3.2 does not appear to establish that a minimum price
difference between product categories covered in the investigation is required to trigger the
obligation to take appropriate steps to ensure price comparability.
7.116. The logical implication of China's submission is that no issue of price comparability will arise
when different product categories are sold at equivalent prices or prices that are not significantly
different. Yet, the notion of price comparability under Articles 3.1 and 3.2 is not about the extent to
which two prices may differ, but rather, whether two prices are comparable for the p urpose of
objectively examining whether the effect of dumped imports on prices of domestic like products is
significant price undercutting, price depression, or price suppression. The comparability of two prices
for this purpose is not informed by their relative levels. It will instead depend upon the characteristics
of the transactions to which the prices pertain, and the extent to which the product categories at
issue compete with each other. We share Japan's view that the differences that are relevant for the
purposes of ensuring price comparability include not only price differences, but also non -price
differences (such as those in physical characteristics and uses) that could affect substitutability and
the competitive relationship between the subject imports and the domestic like products.
7.117. In this regard, we recall that the obligation to ensure price comparability arises from the
requirement in Article 3.1 of the Anti -Dumping Agreement for an authority to objectively examine
the effect of dumped imports on prices in the domestic market for like products. 158 Article 3.2 also
requires investigating authorities to consider whether there has been an "effect of dumped imports
on prices" in the form of one or more of the three price effects identified in the provision. Normally,
for one product to have an effect on the prices of another product, the two products would be
expected to compete with each other. Thus, contrary to China's view, we do not consider that price
differences must exist between product categories in order for there to be a problem of price
comparability – and, therefore, a need to make adjustments.159
7.118. The second interpretative question before us is whether, as China argues, the differences
in characteristics of product categories at issue other than their prices (i.e. non -price differences)
are relevant to the issue of price comparability only if such non -price differences give rise to a
difference in the prices of the product categories. China finds support for this view in certain alleged
findings of the panel in China – Autos (US). Specifically, according to China:
The panel in that dispute held that, when finding a certain "lack of competitive overlap"
because of certain product differences, the investigating authority should – in assessing
the price effects under Article 3.2 – make "further inquiries into those differences to
determine whether they affected prices ". It follows that other differences between

157 Japan's response to Panel question No. 12, para. 52.
158 Appellate Body Report, China – GOES, para. 200.
159 China asserts, relying on certain findings of the Appellate Body in EU – Fatty Alcohols (Indonesia),
US – Hot-Rolled Steel, and US – Zeroing (EC), that Article 2.4 of the Anti-Dumping Agreement requires an
investigating authority to make allowance only in respect of differences in characteristics of compared
transactions that have an impact on prices of the transactions. For China, the same principle must apply to
Article 3.2 of the Anti-Dumping Agreement also. (China's response to Panel question No. 21, paras. 112-113
(referring to Appellate Body Reports, EU – Fatty Alcohols (Indonesia), para. 5.22; US – Hot-Rolled Steel,
para. 177; and US – Zeroing (EC), para. 156)). We consider that the findings of the Appellate Body that China
refers to were not made in the context of a situation involving product categories that may not be in a
competitive relationship, and hence their price may not be comparable. Thus, we consider China's reliance on
the relevant findings of the Appellate Body to be inapposite.

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product models, for instance in physical characteristics or end uses, are only relevant
in this context if and to the extent that they have an impact on the products' prices.160
7.119. We understand that in referring to differences between product categories that "have an
impact on the products' prices", China means such differences between product categories that give
rise to a difference in the relative prices of the product categories at issue. The following extract
from China's opening statement at the second meeting of the Panel confirms our understanding:
MOFCOM concluded that the price differences resulting from the different shapes of the
product at issue were "reasonable" and could not undermine the fact that they belonged
to the "same category of product". In other words, the distin ction between product
models based on their shape was not determinative of the products' price, and thus not
relevant to take into account for price comparability purposes.161
In the quoted extract, China indicates that MOFCOM considered shape -based distinctions to not be
determinative of prices (or to impact/affect prices) as MOFCOM found that different shapes did not
give rise to price differences. Further, China states that "[i]f there is no price difference, adjustments
cannot address the issue at stake" and that "[d]ifferences that have no impact on prices cannot be
addressed by adjustments and are thus, logically, not to be addressed in the framework of the price
effects consideration."162 Again, China uses the notions of no price difference and differences that
have no impact on prices in the same sense.163
7.120. Thus, in relying on the relevant findings of the panel in China – Autos (US), China has
understood that non -price differences allegedly causing a lack of competition between dumped
product-types and domestic like products should be considered to affect price comparability only if
they give rise to a difference in the relative prices of the product categories. We do not consider that
this is what the panel in China – Autos (US) intended. We note that the panel in China – Autos (US)
found that:
By this, we are not saying that price adjustments are needed in every case where there
are differences between the subject imports and the domestic like product. Adjustments
may not be required where the subject product and the domestic like product are
identical or where the [investigating authority] concludes that any differences between
the two baskets of goods do not justify such adjustments. However, where there ar e
differences between the subject imports and the domestic like product it cannot simply
be presumed that prices are comparable without consideration of the specific facts and
circumstances.164
The panel clarifies in this passage that when there are (non -price) differences between subject
imports and the domestic like product, price comparability cannot be presumed. Rather, the
(non-price) differences must be examined to determine whether they affect price comparability. Had
the panel been of the view that non-price differences must always give rise to a difference in the
relative prices of the product categories in order to impact price comparability, then it is difficult to
understand why the panel emphasized the need to perform a fact -specific evaluation of whether
non-price differences affect price comparability (and not just relative prices, per se).

7.121. In addition, there is nothing in the part of the panel's findings that China relies upon to
suggest that it was intended to be understood to exclude the possibility that there may be
circumstances when non-price factors that do not affect relative prices may nevertheless affect price

160 China's response to Panel question No. 21, para. 111 (referring to Panel Report, China – Autos (US),
paras. 7.280-7.281). (emphasis added by China; fn omitted)
161 China's opening statement at the second meeting of the Panel, para. 15.
(emphasis added; fn omitted)
162 China's response to Panel question No. 46, para. 69.
163 We also note that an adjustment accounting for price differentials between product categories is just
one possible method available to an investigating authority to ensure price comparability. Another method for
an investigating authority to do so might be to separately consider price effects of imports of each product type
on domestic like product of the corresponding product type. Thus, in our view, the availability to make
adjustments accounting for a price differential between product categories as a method to ensure price
comparability does not mean that a price differential must necessarily be found to exist for an investigating
authority to be required to take steps to ensure price comparability.
164 Panel Report, China – Autos (US), fn 448.

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comparability. Indeed, this argument was not even considered by the panel in China – Autos (US).
Thus, China's reliance on China – Autos (US) to support its submission that non -price differences
should be considered to affect price comparability only when they are shown to affect relative prices
is unfounded.
7.122. As we stated in paragraph 7.116 above, pursuant to Articles 3.1 and 3.2 the question is
whether the price of subject imports and the domestic like product are comparable. Prices of two
products do not become comparable simply because the products are sold at the same or similar
price. For example, if an apple is sold at the same price as an orange, this does not mean that the
prices of apples and oranges are comparable for the purpose of a p rice analysis under Articles 3.1
and 3.2. Whether prices are comparable will instead depend upon the characteristics of the
transactions to which the prices pertain, and the extent to which the product categories at issue
compete with each other. Competition between the product categories may depend upon differences
in the physical or other characteristics of the products. 165 We therefore share Japan's view that
non-price differences (such as those in physical characteristics and uses) that could affect
substitutability and the competitive relationship between the product categories at issue are relevant
for the purposes of ensuring price comparability , regardless of whether such difference cause the
relative prices of product categories to differ.166
7.123. The third interpretative issue before us arises from China's contention that the obligation
to address price comparability arises only if there are significant differences in the product mix of
domestic and imported products being compared. 167 In support of this contention, China refers to
the following finding of the panel in China – Broiler Products:
Where the products under investigation are not homogenous, and where various models
command significantly different prices, the investigating authority must ensure that the
product compared on both sides of the comparison are sufficiently similar such that the
resulting price difference is informative of the "price undercutting ", if any, by the
imported products. For this reason, for the price undercutting analysis to comply with
Articles 3.1/15.1 and 3.2/15.2 may well require the investigating authority to perform
its price comparison at the level of product mo dels. In a situation in which it performs
a price comparison on the basis of a "basket" of products or sales transactions, the
authority must ensure that the groups of products or transactions compared on both
sides of the equation are sufficiently similar so that any price differential can reasonably
be said to result from "price undercutting " and not merely from differences in the
composition of the two baskets being compared. Alternatively, the authority must make
adjustments to control and adjust for re levant differences in the physical or other
characteristics of the product.168
7.124. Disagreeing with China, Japan contends that even in a situation where the baskets of subject
imports and domestic like products comprise the same set of product categories, a pri ce effects
analysis comparing the aggregated average prices of subject imports and domestic like products
may not necessarily constitute an objective price effects consideration. 169 We understand Japan to
contend that in a situation in which the baskets of subject imports and domestic like products
comprise the same product categories in the same proportion relative to each other within a year,
but this proportion changes in absolute terms for both baskets identically from year to year, any
change in the weighted average prices of the two baskets from year to year may be caused by the

165 We note that the panel in China – Broiler Products expressly recognized the centrality of competitive
relationship between product categories to the issue of price comparability in the following words:
An authority only needs to make an adjustment where the difference in physical or other
characteristics of the products affects their competitive relationship. Because the focus of the
comparison performed under Articles 3.2 and 15.2 is on the competitive relationship between
subject imports and domestic like products in the market of the importing Member, price
comparability needs to be ensured in terms of the perceived importance of potential differences to
consumers in that market[.]
Panel Report, China – Broiler Products, fn 737 (referring to Panel Report, EC – Tube or Pipe Fittings,
para. 7.293)
166 Japan's response to Panel question No. 12, paras. 49-51.
167 China's first written submission, para. 125.
168 Panel Report, China – Broiler Products, para. 7.483.
169 Japan's second written submission, paras. 40-41.

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change in the proportion of the product categories within two baskets relative to the previous year
even if the prices of all individual product categories remain constant. For example, an identical
increase in the proportion of the lower priced product type within both baskets from one year to the
next will show a decline in the weighted average price of the two baskets even though the two
baskets have the same proportion of the product categories relative to each other and the prices of
each individual product type remains the same.170 In such a scenario, a finding of price depression
would be mistaken in Japan's view.
7.125. We agree with Japan that even when the baskets of subject imports and domestic like
products comprise the same product categories in the same proportion in a year, any changes in the
average prices of the baskets from one year to the other could be a refle ction of a change in the
proportion of the product categories within two baskets relative to the previous year. Thus, a
similarity in the product mix of domestic and imported products being compared does not mean that
an issue of price comparability cannot arise. Therefore, we do not agree with China's view that the
obligation to ensure price comparability is triggered only if the baskets of the imported and the
domestic like product being compared are not sufficiently similar in their product mix. Further, in
our view, China's reliance on China – Broiler Products is misplaced. Contrary to China's assertion,
the panel in China – Broiler Products did not find that the obligation to ensure price comparability
will only arise if there are significant differences in the product mix between domestic and imported
products. Rather, in stating that "the authority must ensure that the groups of products or
transactions compared on both sides of the equation are sufficiently similar", the panel was
addressing what an investigating authority must do to undertake an objective consideration of price
effects in one particular set of circumstances, namely, where (a) the products under investigation
are not homogenous ; (b) various product categories command significantly diff erent prices; and
(c) the authority performs a price comparison based on a basket of products or sales transactions.
Thus, rather than setting out a general condition that must exist in all factual situations in order for
the obligation to ensure price com parability to be triggered , the panel in China – Broiler Products
was merely stating how an investigating authority may fulfil the obligation to ensure price
comparability in one particular set of factual circumstances. Contrary to China's submission, the
panel was not suggesting that the investigating authority's obligation to ensure price comparability
will arise only if there are significant differences in the product mix of the domestic like products and
the imported products being compared.
7.126. To sum up our findings concerning the applicable legal standard, we recall that the parties
agree that an investigating authority needs to ensure that price comparisons undertaken for the
purposes of Article 3.2 of the Anti -Dumping Agreement involve comparable pr ices. Price
comparability for this purpose is not about the extent to which prices of the products at issue differ
in a relative sense. Whether any two prices are the same or different does not speak to whether
those prices are comparable. Rather, price co mparability depends upon the characteristics of the
transactions to which the prices pertain and the competitive relationship between the product
categories at issue. In this regard, differences in relative prices of the product categories at issue,
as well as non-price differences between them (such as those in terms of physical characteristics or
end-uses), that affect the competitive relationship between the product categories will be pertinent
to an authority's consideration of price effects. Bearing the foregoing in mind, we will review whether
MOFCOM undertook an objective examination of the relevant evidence before it in determining
whether the prices of various product categories were comparable and whether MOFCOM supported
its findings with reasoned and adequate explanations.
7.3.3.2 MOFCOM's examination of the price comparability of product categories
7.127. Japan argues that MOFCOM's price comparisons between subject imports and the domestic
like products, undistinguished by product categories (i.e. billets (slab s), coils, or plates), did not
involve an objective examination of positive evidence. According to Japan, MOFCOM failed, for
several reasons, to adequately explain the basis upon which it found that the prices of different
product categories were comparabl e, notwithstanding record evidence showing that the product
categories differed in various ways. 171 Japan contends that by making price comparisons between
baskets of subject imports and domestic like products, including products belonging to different
product categories, without ensuring that products on both sides of the comparison are sufficiently

170 Japan's second written submission, para. 41.
171 Japan's first written submission, paras. 88-89.

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similar, MOFCOM failed to ensure price comparability among product categories.172 China, however,
maintains that MOFCOM was entitled to consider that no adjustment was required to ensure price
comparability between billets (slabs), coils, and plates as it concluded, based on the best information
available, that the alleged differences between the prices of billets (slabs), coils, and plates, were
"reasonable".173
7.128. Before evaluating the merits of Japan's allegations of error, we note that MOFCOM addressed
the argument of certain interested parties that price effects should be analysed for the three product
categories separately at the end of its consideration of price effects in the following manner:
After preliminary determination, the interested parties commented that, firstly, the price
effect should be analyzed for the three product categories, stainless steel billet,
hot-rolled stainless steel plate and hot -rolled stainless steel coil, and each of these
product categories should be further analyzed according to specification. Secondly, the
subject products and the domestic like products had a remarkable price difference and
different price trends for individual y ears, demonstrating that they did not have
competitive relationship, and the imported subject products did not depress the price
of domestic like products.
The Investigating Authority considered that, firstly, as previously mentioned , the
stainless steel billet and hot-rolled stainless steel plate (coil) were the same category
of product. The overall demand, supply and competition for the domestic stainless steel
billet and hot-rolled stainless steel plate (coil) were examined in the case, rather than
the demand and supply for one segmented product market of stainless steel billet and
hot-rolled stainless steel plate (coil). Meanwhile, because some foreign exporters in the
case did not submit the questionnaire responses, the Investigating Authority could not
obtain the relevant information of classification of the stainless steel billet and hot-rolled
stainless steel plate (coil), and the Investigating Authority made best efforts to conduct
price effect analysis for 200 -series, 300 -series, 400 -series and othe r series
specifications of the stainless steel billet and hot -rolled stainless steel plate (coil)
according to the best information available.174
This passage reveals that MOFCOM rejected the interested parties' comments and decided to make
no adjustments to the relevant prices to ensure price comparability between product categories on
two grounds: (a) MOFCOM's "previously mentioned" finding that "stainless steel billet and hot-rolled
stainless steel plate (coil) were the same category of product"; and (b) the fact that "some" foreign
exporters' failed to submit questionnaire responses, which according to MOFCOM, meant that it
"could not obtain the relevant information of classification of the stainless steel billet and hot-rolled
stainless steel plate (coil)".

7.129. We note that the final determination does not specify the relevant section of the
determination to which the words "previously mentioned" refer. However, in response to a question
from the Panel, China clarified that the words "previously mentioned" r efer to pages 11 and 12 of
the final determination "where MOFCOM examined the alleged differences between billets, plates
and coils" as part of its findings in relation to the scope of the product under consideration.175
Below is the relevant extract from those findings:
The interested parties from the EU, Japan, and Korea asserted that the scope of the
subject product in this case was too broad, involving several different products with
different prices, and requested to exclude one or more products to limit the investigation
scope or divide into several investigations. After the preliminary determination, relevant
interested parties continued to argue that the Investigating Authority shall distinguish

172 Japan's first written submission, para. 136.
173 China's first written submission, para. 221.
174 MOFCOM's final determination (Exhibit JPN-5.b), pp. 43-44. (emphasis added)
175 China's response to Panel question No. 20, para. 104. We note that even though China referred to
page 12 of the final determination alone as being the location of the "previously mentioned" findings identified
in MOFCOM's consideration of price effects, we read the findings on page 12 together with the coextensive
findings on page 11 which continue into page 12.

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different products for separate assessments due to the differences between stainless
steel billet and hot-rolled stainless steel plate (coil).
The Applicant asserted that stainless steel billet, hot -rolled stainless steel plate and
hot-rolled stainless steel coil have the same basic physical and chemical characteristics,
the same or like production process and equipment, final usage, sales channels and
regions, customer groups, etc., and the difference in product prices is reasonable for
products with different subdivided specifications under the same category of product.
Based on either factual or legal analysis, stainless steel billet, hot-rolled stainless steel
plate (coil) shall be identified as the same category of product. There is no legal
provision requiring that the subcategories/specifications of the subject product must be
similar or directly competitive in order to constitute a subject product.
Upon examination, the Investigating Authority considered that: Firstly, the stainless
steel billet, hot-rolled stainless steel plate and hot-rolled stainless steel coil are all alloy
steel products with the carbon content (by weight) of 1.2% or less and chromium
content of 10.5% or more and same basic physical and chemical characteristics, which
are mainly made of molten iron, chrome, nickel and st ainless steel scrap, with a small
amount of niobium, copper, titanium manganese and other alloying elements according
to the requirements, and are casted into billet with continuous casting equipment and
manufactured by hot rolling. Secondly, the stainless steel billet and hot-rolled stainless
steel plate (coil) manufactured by companies with continuous production capacity
entered the final consumption market. For the stainless steel billets purchased by some
companies without continuous production capacity, they were hot-rolled into hot-rolled
stainless steel plate (coil) and entered the final consumption market. Thirdly, due to the
difference in physical form between stainless steel billet and hot -rolled stainless steel
plate (coil), their prices have reasonable differences. In addition, given that the products
belong to different classification standards, it cannot be used as independent standard
to determine whether the products belong to the same category of product. Therefore,
in the preliminary determination, the Investigating Authority decided not to accept the
above arguments from interested parties on the scope of the subject product.
After further examination, the Investigating Authority also found that the physical and
chemical characteristics and technical indices of hot -rolled stainless steel plate/coil
depended on the physical and chemical characteristics of the stainless steel billet in the
steelmaking process, and that there was no substantial difference in the basic internal
characteristics, and that the difference in physical form cannot disprove the fact that
they had the same basic characteristics. The final trading market and usage of stainless
steel billet and hot -rolled stainless steel plate (coil) are consistent. The hot -rolled
stainless steel plate and the hot-rolled stainless steel coil have crossed and overlapped
downstream usages in actual application, such as storage tanks, bridges and vessels.
Although they have differences in specific segment uses and customers , these are
reasonable differences within the products of the same category due to segmentation
specifications. Their final usage and customer group have similarity. Therefore, the
Investigating Authority maintained the preliminary determination that stainless steel
billet and hot-rolled stainless steel plate (coil) fall into the same category of product and
can be assessed as a whole.176
7.130. Referring to the foregoing findings in the final determination, China contends that MOFCOM
properly found, based on best information available , that the differences between the prices of the
product categories were "reasonable", and thus did not warrant any specific action to ensure price
comparability.177 China also contends that based on even Japan's own allegedly erroneous standard
for price c omparability, MOFCOM properly addressed the alleged differences between the product
categories in terms of their physical and chemical characteristics, end-uses, and customer groups in
making this determination.178
7.131. We first note that China's submission that MOFCOM was not required to take further action
to ensure price comparability, after finding that the price differences between product categories

176 MOFCOM's final determination (Exhibit JPN-5.b), pp. 11-12. (emphasis added)
177 China's first written submission, para. 221.
178 China's second written submission, para. 135; response to Panel question No. 21, para. 107.

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was "reasonable", rests on an interpretation of Article 3.2 that we disagreed with in
paragraphs 7.114-7.117 above. In particular, we have found that the existence of a significant (or,
in fact, any degree of) price difference between two products does not alone determine whether
prices are comparable for the purpose of the price effects analysis called for under Articles 3.1
and 3.2. Therefore, insofar as MOFCOM concluded that it was not required to take actions to ensure
price comparability on the basis of its finding that the price differences between product categories
were "reasonable", MOFCOM acted inconsistently with its obligations under Articles 3.1 and 3.2 of
the Anti-Dumping Agreement.
7.132. Second, we note that MOFCOM's analyses of price and non-price differences between product
categories were made for the purpose of responding to the interested parties' arguments about the
scope of the product under consideration, not the comparability of the prices of the different product
categories.179 Also, the findings themselves recognize that "reasonable" differences exist between
product categories as regards prices, physical characteristics, end -uses and customers. We do n ot
consider that such findings concerning product scope, in the absence of any additional explanation,
could alone support a conclusion that the prices of the separate product categories falling within the
product under consideration are all comparable for the purpose of Article 3.2 of the
Anti-Dumping Agreement. In this regard, we note that the definition of product scope and the
examination of price comparability for the purpose of considering price effects are two substantively
different aspects of an in vestigating authority's determination. The fact that an authority may
consider that certain price and non -price differences between product categories are "reasonable"
when deciding whether to include the different product categories into the product scope does not,
in and of itself, imply that an investigating authority may, without explanation, appropriately rely
upon the same considerations to conclude that such price and non-price differences do not give rise
to price comparability issues.
7.133. We note that previous panels have faulted investigating authorities for drawing similar
inferences concerning price comparability from product scope determinations. In China – X-Ray
Equipment, the panel rejected China's argument that because MOFCOM had concluded that the
domestic products were "like" the subject imports in considering the product scope, MOFCOM
ensured price comparability by comparing prices of "like" products in the price effects analysis. The
panel took the view that a conclusion in the context of product scope that the domestic product was
"like" the product under consideration did not imply that MOFCOM fulfilled its obligation to ensure
price comparability when considering price effects under Article 3.2 of the
Anti-Dumping Agreement.180 Likewise, the panel in China - Autos (US) did not consider that a finding
of "likeness" for the purposes of Article 2.6 of the Anti-Dumping Agreement necessarily means that
annual average prices of domestic like products as a whole could be compared to annual average
prices of imported products as a whole. 181 In the light of the facts of that dispute, the panel in
China – Autos (US) concluded by finding that "the differences between the two baskets of goods
should have prompted an objective decision-maker to make further inquiries into those differences
to determine whether they affected prices, before proceeding to undertake a price effects analysis
on the basis of AUVs for the two baskets of goods. Yet, MOFCOM's final determination contains no
further discussion of differences between subject imports and the domestic like product for the
purposes of a price comparison in the context of MOFCOM's price depression analysis".182 We share
the line of thinking expressed by the panels in these two disputes. Thus, unlike C hina, we do not
consider that by relying on an examination of price and non -price differences between product
categories in the context of its analysis of the interested parties' views on product scope, MOFCOM
properly established that it was not required to take specific steps to ensure price comparability
between product categories.
7.134. Even though we have found MOFCOM's examination of price comparability between product
categories to be deficient for reasons discussed in paragraphs 7.131-7.133 above, Japan's claims
under Articles 3.1 and 3.2 of the Anti -Dumping Agreement are gr ounded on several additional
allegations of MOFCOM's failure to examine price comparability between product categories based
on an objective examination of positive evidence. We address these additional grounds put forth by

179 As Japan points out, an analysis of differences between product categories for the purpose of
defining product scope does not in itself show that such differences were properly considered for the purpose of
establishing price comparability. (Japan's second written submission, para. 60).
180 Panel Report, China – X-Ray Equipment, paras. 7.65-7.66.
181 Panel Report, China – Autos (US), para. 7.278.
182 Panel Report, China – Autos (US), para. 7.281. (fn omitted)

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Japan in support of its claim below. As some of these grounds pertain to MOFCOM's examination of
price differences between product categories while others pertain to MOFCOM's examination of
non-price differences between product categories, we divide our analysis of such grounds into two
sections.
7.3.3.2.1 MOFCOM's assessment of evidence concerning price differences between
product categories
7.135. Japan argues that MOFCOM failed to explain the meaning of "reasonable differences" in
prices of different product categories in the final determination and, for this reason, MOFCOM failed
to provide a reasoned and adequate explanation of its findings. 183 China explains that MOFCOM
considered the price differences to be insignificant, and thus "reasonable". 184 Moreover, according
to China, the context in which the finding of "reasonable differences" in prices of product categories
appears in the final determination clarified the meaning of the term "reasonable". Specifically, China
points to the following as the "context" in question: (a) the statement immediately following the
finding of "reasonable differences" in prices of the product categories; and (b) MOFCOM's statement
that "difference[s] in physical form cannot disprove the fact that they had the same basic
characteristics".185
7.136. We do not consider that either of these statements adequately explains the meaning of
"reasonable differences" in the prices of the product categories. The sentence in MOFCOM's final
determination following the "reasonable differences" finding states that such prices differences
cannot be used "as [an] independent standard to determine whether the products belong to the
same category of product" as "the products belong to different classification standards". 186 This
statement refutes the relevance of price differences between product cat egories to the question of
whether they "belong to the same category of product", not on the ground that such price differences
were insignificant, but on a ground that is entirely unrelated to the magnitude of such price
differences, namely that the product categories belong to different classification standards. Further,
MOFCOM's statement that "difference in physical form cannot disprove the fact that they had the
same basic characteristics" is distinct from its finding concerning "reasonable differences " in the
prices of the product categories, and is silent on the question of the magnitude of such price
differences. We also do not consider that "reasonable" price differences referred to in the final
determination could be understood to mean insignificant price differences, as China suggests.
We therefore agree with Japan that the ambiguity inherent in MOFCOM's finding of "reasonable
differences" in the prices of product categories undermines China's submission that this finding was
reasonably and adequately explained.
7.137. China contends that MOFCOM made clear that it relied on the best information available for
the assessment of price comparability between product categories by stating that "because some
foreign exporters in the case did not submit the questionnaire responses, the Investigating Authority
could not obtain the relevant information of classification of the stainless steel billet and hot -rolled
stainless steel plate (coil), and the Investigating Authority made best efforts to conduct price effect
analysis […] according to the best information available".187 Japan, however, maintains that the final
determination does not indicate that MOFCOM used best information available to find that
"reasonable differences" existed between the prices of product ca tegories. Moreover, according to
Japan, MOFCOM's final determination does not identify the data that MOFCOM used to make this
finding.188
7.138. The MOFCOM statement China relies upon appears towards the end of its consideration of
price effects, when MOFCOM rejec ts the interested parties' request for MOFCOM to consider price
effects for each product category separately. The full sentence reads as follows:

183 Japan's first written submission, para. 121.
184 China's first written submission, para. 219.
185 China's opening statement at the second meeting of the Panel, para. 16 (referring to MOFCOM's final
determination (Exhibit JPN-5.b), p. 12).
186 MOFCOM's final determination (Exhibit JPN-5.b), p. 12.
187 China's second written submission, para. 144 (quoting MOFCOM's final determination (Exhibit JPN-5.b),
p. 44).
188 Japan's opening statement at the second meeting of the Panel, para. 13; and comments on
China's responses to Panel question No. 45, paras. 27 and 31. See also Japan's closing statement at the
second meeting of the Panel, para. 7.

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Meanwhile, because some foreign exporters in the case did not submit the questionnaire
responses, the Investi gating Authority could not obtain the relevant information of
classification of the stainless steel billet and hot -rolled stainless steel plate (coil), and
the Investigating Authority made best efforts to conduct price effect analysis for
200-series, 300-series, 400-series and other series specifications of the stainless steel
billet and hot -rolled stainless steel plate (coil) according to the best information
available.189
7.139. In our view, it is not clear what MOFCOM meant by this statement. The statement refers to
MOFCOM's inability to obtain "information of classification of" the product categories. However, we
do not understand "information of classification" to mean pricing information, and thus nothing in
this statement leads us to conclude t hat MOFCOM relied on best information available to reach the
finding of "reasonable differences" in the prices of the product categories. Further, while the
statement refers to "best efforts", it uses this expression in relation to MOFCOM's series -specific
price effects analyses, and not MOFCOM's finding with respect to the magnitude of the price
differences between the product categories. We also note that while the statement China relies upon
appears on page 44 of the final determination in the context of MOFCOM's consideration of price
effects, the finding of "reasonable differences" in the prices of the product categories is found at
page 12 of the final determination in the context of MOFCOM's analysis of product scope. Neither of
the findings made on t hese two pages cross -refers to the other one. Further, the findings and
explanation set out on page 12 do not contain any reference to MOFCOM having resorted to best
information available in respect of the finding on "reasonable differences" in the prices of the product
categories. We therefore agree with Japan that MOFCOM failed to indicate that its finding of
"reasonable differences" in the prices of product categories was based on the best information
available. In our view, this omission undermines Chin a's assertion that MOFCOM's final
determination was reasonably and adequately explained.
7.140. China maintains that the data sets that MOFCOM used as the best information available to
conclude that there were reasonable price differences between product categori es were
(a) MOFCOM's conclusion on price comparability in the dumping determination 190, and (b) the
Indonesian imports data from China customs. 191 According to Japan, however, China's assertions
are ex post rationalizations.192 Japan contends that nothing in the final determination reveals that
MOFCOM's conclusion concerning price comparability of product categories in its dumping analysis
formed the basis for MOFCOM's finding of reasonable price differences in the product scope section
or any aspect of its price effects analysis. 193 Likewise, Japan argues that nothing in the final
determination indicates that MOFCOM relied upon the prices of subject imports from Indonesia as
the basis for its conclusion that price differences between product categories were "reasonable", and
hence China's submissions in this regard are also ex post rationalizations.194
7.141. We agree with Japan that MOFCOM's conclusion on price comparability in its dumping
determination, which China points to as being a part of the best information available used to reach
its reasonable price differences finding, was not mentioned either in the context of
MOFCOM's product scope analysis, or in the section containing the price effects analysis of the final
determination.195 Thus, there is no indication in MOFCOM's final determination that it relied upon
these findings in any way for the purpose of its consideration of the comparability of prices.

189 MOFCOM's final determination (Exhibit JPN-5.b), p. 44.
190 China states that Nippon Yakin Kogyo Co., Ltd. (NYK), a Japanese respondent, requested MOFCOM to
differentiate between product categories for the purposes of dumping analysis prior to the preliminary
determination, but did not argue against MOFCOM's decision to reject NYK's request following the preliminary
determination. Thus, according to China, MOFCOM considered its conclusion that it need not differentiate
between product categories for dumping analysis to be the best information available for its determination that
there are no price comparability issues affecting product categories for the purposes of its price effects
analysis. (China's response to Panel question No. 15, para. 87).
191 China's response to Panel question No. 45, para. 58. According to China, data concerning Indonesian
imports showed "only very minor price differences" between the product categories at issue. (China's first
written submission, para. 219).
192 Japan's comments on China's response to Panel question No. 45, paras. 27 and 31.
193 Japan's comments on China's response to Panel question No. 45, para. 31.
194 Japan's response to Panel question No. 19, para. 67.
195 Japan's comments on China's response to Panel question No. 45, para. 31.

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7.142. Responding to Japan's argument that China's reliance on China customs data co ncerning
Indonesian imports is ex post facto rationalization, China points to page 37 of the final determination
where MOFCOM states that "China Customs data is the best information available" and that
"Indonesia's exports to China mainly comprised of 300-series products".196 We note, however, that
the statements China relies upon concerning Indonesian exports are not made in the part of
MOFCOM's final determination where it examined product scope and made the reasonable price
differences finding. MOFCOM's statements appear at the beginning of its price effects analysis in the
following context:
The data provided by the responding companies who submitted the questionnaire
response and the relevant information provided by the interested parties according to
the requirements of the Investigating Authority show that, first, the EU exports to China
included 300 -series and other series of products; Second, Korea's exports to China
included 300-series and 400-series products; Third, Japan's exports to China include d
300-series and 400-series and other series of products; Fourth, Indonesia's exports to
China mainly comprised of 300 -series products; Fifth, domestic like products included
all four types of products mentioned above. Therefore, the Investigating Authorit y
adjusted the exchange rates, customs duties and customs clearance fees of the
300-series, 400-series and other-series products that were actually exported to China,
and then compared with domestic like products of the same specifications in China.
Since the EU and Indonesia companies did not submit the questionnaire responses, the
Investigating Authority could not obtain accurate information on the volume and price
of dumped imports of each specification. The Investigating Authority determined the
relevant specification information of the EU and Indonesian dumped imports based on
the facts available, and further determined the total specification data of the
four countries (regions) involved. The Investigating Authority considered that China
Customs data is the best information available. 197
As we read it, this passage does not indicate that by virtue of comprising mainly of 300 -series
products, data concerning Indonesian exports to China were picked by MOFCOM as the best
information available for the purp ose of determining whether prices of product categories were
comparable, or that the price differences between product categories were "reasonable".

7.143. In our view, having failed to identify the data sets that constituted the best information
available on which MOFCOM relied to conclude that there were "reasonable differences" in the prices
of product categories, MOFCOM also, consequently, failed to explain how the data on the record of
the investigation supported its conclusion. Thus, without commenting on MOFCOM's alleged resort
to any particular data sets as the best information available, we consider that the requirement to
undertake an objective examination of the best information available would require an objective and
unbiased authority to explain how it supported the relevant conclusion. MOFCOM's final
determination does not do so. While China has offered explanations as to why the best information
available indicated that there were "reasonable" price difference between product categories, such
explanations constitute ex post rationalizations that we cannot take into account as they do not
appear in the final determination.198 Finally, Japan argues that MOFCOM failed to objectively examine
other record evidence indicating that the prices of product categories were not comparable , and
therefore failed to conduct an objective examination of positive evidence in accordance with
Articles 3.1 and 3.2 of the Anti-Dumping Agreement. Japan's arguments in this regard have focused
on pricing information submitted by certain Japanese respondents 199, and certain presentations of
Chinese customs data presented by (a) the applicant, in attachment 9 to the application200; (b) the

196 China's second written submission, para. 144 (quoting MOFCOM's final determination (Exhibit JPN-5.b),
p. 37).
197 MOFCOM's final determination (Exhibit JPN-5.b), p. 37. (emphasis added)
198 In this regard, we recall that since a panel's review is not de novo, ex post rationalizations
unconnected to the investigating authority's explanation – even when founded on record evidence – cannot
form the basis of a panel's conclusion. (Panel Report, Korea – Pneumatic Valves (Japan), para. 7.10).
199 Specifically, Japan points to certain questionnaire responses submitted by Nisshin Steel and Nippon
Steel. (Japan's comments on China's response to Panel question No. 45, para. 37 (referring to
Nisshin Steel's questionnaire response, section V (Exhibit CHN-7.b (BCI)), p. 9); Nisshin Steel's response to
additional questions of MOFCOM (Exhibit CHN-11.b (BCI)), pp. 2-8; Nippon Steel's response to additional
questions of MOFCOM (Exhibit CHN-12.b (BCI)), p. 2.).
200 Application (Exhibit JPN-6.b), attachment 9.

BCI deleted, as indicated [[***]]

Japanese respondents, in annex 17 to the non-injury brief201, and (c) the Japanese respondents, in
annex 34 to the non-injury brief.202 We note, however, that China has not identified these alternative
sources of data and information as the best information available that MOFCOM relied upon for the
purpose of its "reasonable price differences" finding. Moreover, while Japan identifies the legal bases
of this part of its complaint to be Articles 3.1 and 3.2, we note that the problem at the centre of
Japan's submission is MOFCOM's decision not to rely on and disregard the evidence referred to in
(a), (b), and (c) above. In our view, Japan's fundamental concern is therefore about the rejection
of submitted evidence and the selection of best information available , which is regulated under
Article 6.8 and Annex II of the Anti-Dumping Agreement, not Articles 3.1 and 3.2 . Accordingly, as
previously explained in paragraph 7.108, we do not see a factual or legal basis to review the merits
of Japan's arguments concerning MOFCOM's decision not to review the alternative sources of data
and information referred to in (a), (b), and (c) above. We therefore make no findings with respect
to Japan's additional submissions on this matter.
7.3.3.2.2 MOFCOM's assessment of evidence concerning non -price differences between
product categories
7.144. Japan contends that MOFCOM failed to explain the basis on which it considered various
product categories to be comparable despite record evidence showing the existence of various
non-price differences between them that affected their substitutability.203 In Japan's view, MOFCOM
disregarded this evidence and thus failed to ensure price comparability.204
7.145. China submits that MOFCOM did consider such non -price differences between product
categories205, and points to the following portions of MOFCOM's final determination in support of its
submission:
Upon examination, the Investigating Authority considered that: Firstly, the stainless
steel billet, hot-rolled stainless steel plate and hot-rolled stainless steel coil are all alloy
steel products with the carbon content (by weight) of 1.2% or less and chromium
content of 10.5% or more and same basic physical and chemical characteristics, which
are mainly made of molten iron, chrome, nickel and stainless steel scrap, with a small
amount of niobium, copper, titanium manganese and other alloying elements according
to the requirements, and are casted into billet with continuous casting equipment and
manufactured by hot rolling. Secondly, the stainless steel billet and hot-rolled stainless
steel plate (coil) manufactured by companies with continuous production capacity
entered the final consumption market. For the stainless steel billets purchased by some
companies without continuous production capacity, they were hot-rolled into hot-rolled
stainless steel plate (coil) and entered the final consumption market. Thirdly, due to the
difference in physical form between stainless steel billet and hot -rolled stainless steel
plate (coil), their prices have reasonable differences.
…
After further examination, the Investigating Authority also found that the physical and
chemical characteristics and technical indices of hot -rolled stainless steel plate/coil
depended on the physical and chemical characteristics of the stainless steel billet in the
steelmaking process, and that there was no substantial difference in the basic internal
characteristics, and that the difference in physical form cannot disprove the fact that
they had the same basic characteristics. The final trading market and usage of stainless
steel billet and hot -rolled stainless steel plate (coil) are consistent. The hot -rolled
stainless steel plate and the hot-rolled stainless steel coil have crossed and overlapped
downstream usages in actual application, such as storage tanks, bridges and vessels.
Although they have differences in specific segment uses and customers, these are
reasonable differences within the products of the same category due to segmentation
specifications. Their final usage and customer group have similarity.

201 Non-injury brief (revised) (Exhibit JPN-8.b (BCI)), annex 17.
202 Japan's comments on China's response to Panel question No. 45, paras. 37-40.
203 Japan's first written submission, para. 88.
204 Japan's first written submission, paras. 134-135.
205 China's second written submission, para. 135; response to Panel question No. 21, paras. 106-107.

BCI deleted, as indicated [[***]]

…
The investigation shows that the dumped imports are basically the same as the
domestically produced stainless steel billets and hot-rolled stainless steel plates (coils)
in terms of physical and chemical characteristics, raw materials, production processes,
product uses, sales channels and customer group, falling into the like products, both
with similarity and substitutability.206
7.146. Japan contends that these passages from the final determination d o not explain why and
how the product categories are substitutable, and thus comparable for the purpose of the price
effects analysis. 207 Moreover, according to Japan, MOFCOM's findings did not properly take into
account a range of non -price differences bet ween product categories that were brought to
MOFCOM's attention in the non -injury brief of the Japanese respondents. Japan extensively
describes these differences in terms of physical characteristics, uses, customers and distribution
channels, treatment by Chinese customs, applicable tariff rates, classification in Chinese national
steel standards, production processes, and raw materials. 208 Japan maintains that MOFCOM's price
effects analysis did not reasonably and adequately address this evidence.
7.147. We evaluate the merits of the parties' submissions with respect to these alleged differences
in the following subsections.
a. Physical characteristics
7.148. The final determination notes that hot -rolled stainless steel billets ( slabs), hot -rolled
stainless steel coils, and hot-rolled stainless steel plates have the "same basic physical and chemical
characteristics".209 Before making this finding, MOFCOM notes that billets (slabs), coils, and plates
"are all alloy steel products with … carbon content (by weight) of 1.2% or less and chromium content
of 10.5% or more". 210 According to Japan, the commonality in chemical composition that the final
determination refers to is not adequate to address the differences in physical characteristics of the
products that cause them to be non-substitutable.211 In this regard, Japan points in particular to the
following: (a) billets (slabs) are semi-finished products, that are used as inputs in the production of
coils and plates; and (b) billets (slabs), coils, and plates have different shapes.212
7.149. In our view, MOFCOM's final determination does not explain wh y billets (slabs) would be
substitutable, and hence comparable for the purposes of Article 3.2, with coils and plates if they are
an input used in the production of coils and plates. Furthermore, the final determination also does
not address whether the differences in the shapes of billets (slabs), coils, and plates would have a
bearing on the comparability of their prices. 213 While the final determination states that due to
differences in physical form between billets (slabs), coils, and plates, their prices have "reasonable
differences", and that they have "reasonable differences" in "specific segment uses and customers"
due to "segmentation specifications", this finding does not shed light on whether these "reasonable"
differences between billets (slabs), coils, and plates impact the extent to which the products compete
and, therefore, the comparability of their prices.
b. Use

206 MOFCOM's final determination (Exhibit JPN-5.b), pp. 11-12 and 40.
207 Japan's second written submission, para. 59.
208 Japan's first written submission, paras. 90-133. Japan also refers to differences between the
three product categories in terms of their prices in these paragraphs. These differences, however, have been
discussed in section 7.3.3.2.1.
209 MOFCOM's final determination (Exhibit JPN-5.b), p. 11.
210 MOFCOM's final determination (Exhibit JPN-5.b), p. 11.
211 Japan's first written submission, para. 91.
212 Japan's first written submission, paras. 92-95 (referring to Non-injury brief (revised) (Exhibit JPN-8.b
(BCI)), p. 9).
213 The non-injury brief indicates that the thickness of billets (slabs) is not less than 50mm, while the
thickness of plates is less than 3mm in case of thin plates and not less than 3mm in case of thick plates. The
non-injury brief also states that plates are "custom manufactured to meet specific project requirements".
Unlike billets (slabs) and plates, coils are not flat but are delivered in a coiled shape. (Non-injury brief (revised)
(Exhibit JPN-8.b (BCI)), p. 9).

BCI deleted, as indicated [[***]]

7.150. MOFCOM described and addressed the uses of the billets, coils, and plates as follows:
Main usages: It generally has two usages. On e is the raw material for cold -rolled
stainless steel. It can be manufactured into cold-rolled stainless steel products through
cold rolling processes. The other is as a finished product for direct sales. It is mainly
used for vessels, containers, railway, electric power, petroleum, petrochemical and
other industries.
…
The final trading market and usage of stainless steel billet and hot-rolled stainless steel
plate (coil) are consistent. The hot -rolled stainless steel plate and the hot -rolled
stainless ste el coil have crossed and overlapped downstream usages in actual
application, such as storage tanks, bridges and vessels. Although they have differences
in specific segment uses and customers, these are reasonable differences within the
products of the same category due to segmentation specifications. Their final usage and
customer group have similarity.214
7.151. Japan argues that these findings do not mention the use of billets (slabs), which are used
as an input in the production of hot-rolled products. Per Japan, billets (slabs) cannot be used directly
for the production of cold -rolled products, or sold as finished products. 215 Japan also argues that
while the final determination refers to two uses of the subject product, namely (a) manuf acture of
cold-rolled products and (b) finished product for direct sales, the two are distinct and
non-interchangeable uses of coils on the one hand and plates on the other. 216 According to Japan,
coils cannot be used for storage tanks, bridges, or vessels, for which purposes plates are used.
Likewise, plates are "custom manufactured to meet specific project requirements" and are not used
as raw material for the production of cold -rolled products.217 Thus, Japan argues that MOFCOM
wrongly found that the uses of billets (slabs), coils, and plates "cross" or "overlap".218 Japan contends
that by failing to address the evidence concerning the lack of substitutability of billets (slabs), coils,
and plates from a customer's perspective, MOFCOM failed to ensure price comparability between the
baskets of subject imports and the domestic like products that comprise three distinct product
categories.219
7.152. China contends that by explaining that "hot -rolled stainless steel plat e (coil) is made of
stainless steel billet through hot rolling and other processes", MOFCOM showed that the final usage
of billets coincides with the usage of coils and plates. 220 China also contends that "overall evidence
before MOFCOM" indicated that coils and plates had overlapping usages.221
7.153. We n ote that the non -injury brief submitted by Japanese respondents before MOFCOM
identifies the following uses of billets (slabs), coils, and plates:
Stainless steel slabs are mainly used for rolling to produce flat sheet materials (including
thick plates, m edium plates, thin sheets, strip reels), and thus are semi -finished
products or raw materials.
Hot-rolled stainless steel coils are mainly used to manufacture coil -cut steel sheets,
cold-rolled steel coils, welded steel tubes and steel sections.

214 MOFCOM's final determination (Exhibit JPN-5.b), pp. 11-12.
215 Japan's first written submission, para. 98.
216 Japan's first written submission, para. 98.
217 Japan's first written submission, para. 98 (quoting Non-injury brief (revised) (Exhibit JPN-8.b (BCI)),
p. 8).
218 Japan's first written submission, para. 102.
219 Japan's first written submission, paras. 104-105.
220 China's response to Panel question No. 46, para. 71 (quoting MOFCOM's final determination
(Exhibit JPN-5.b), p. 11). (emphasis omitted)
221 China's response to Panel question No. 46, para. 76.

BCI deleted, as indicated [[***]]

Hot-rolled stainless steel plates are widely used in the construction materials of ships,
bridges, tanks, etc.222
Aside from noting that hot-rolled stainless steel plates and hot-rolled stainless steel coils are made
from stainless steel billet, the final determinati on does not speak to the usages of stainless steel
billets (slabs). While China contends that the final usage of stainless steel billet coincides with those
of coils and plates because the former is an input used for the production of the latter, we do not
consider that this reasoning alone suffices to establish that billets (slabs) compete with plates and
coils such that their prices are per se comparable for the purposes of Article 3.2. In this regard, we
note that the submission from the applicant that China relies upon to show that the usages of coils
and plates overlap explains that billet "is basically not circulating in the final consumer market, [and]
there is no independent use [of billets]".223 The final determination, however, does not explain how
or why the prices of a product of which there is no independent use (i.e. billets (slabs)) could be
considered comparable to downstream products with several independent usages (i.e. coils and
plates) for the purposes of Article 3.2.
7.154. Likewise, the final determination refers to the two uses of the subject product, namely "raw
material for cold -rolled stainless steel" and "finished product for direct sales", without addressing
the fact that the non-injury brief identifies the former as a use of coils alone, and the latter as a use
of plates alone. The final determination also does not refer to any evidence showing that both coils
as well as plates could be used interchangeably as an input into the production of cold -rolled
products, and as a finished product for direct sales. China points to certain briefs submitted by the
applicant and certain statements filed by domestic companies before MOFCOM, as record evidence
supporting MOFCOM's finding that coils and plates have overlapping usages. 224 We note, however,
that the evidence from the applicant contains statements suggesting that coils have overlapping
usages as plates after coils have been processed into "open and flat plate[s]". 225 To us, these
statements indicate that coils converted into "open and flat plate[s]", rather than coils per se, have
overlapping usages as plates. Thus, the applicant's submissions do not support China's assertion
that coils and plates have overlapping usages.
7.155. We note that the questionnaire responses of Gansu Jiu Steel Group Hongxing Iron & Steel
Co., Ltd. (Gansu Jiu), Beihai Chengde Metal Rolling Co., Ltd. (BCMR), Beihai Chengde Ferronickel
and Stainless Steel Co., Ltd. (BCF), and Angang Lianzhong Stainless Steel Corporation
(Angang Lianzhong) speak of common usages of coils and plates without distinguishing between the
usages of the two. 226 However, the final determination does not indicate how MOFCOM took into
account the conflicting evidence in the non -injury brief submitted by Japanese respo ndents
indicating that coils and plates have distinct usages. We also agree with Japan's argument that even
if coils and plates are both used in the same project, for example, the construction of a bridge, they
may not necessarily be substitutable for spec ific purposes within that project. 227 Indeed if all
components used in the construction of a bridge were to be construed to be comparable for the
purposes of a price effects analysis under Article 3.2 of the Anti-Dumping Agreement only because
they are used in the same project, stainless steel plates and cement would be comparable products.
In our view, an objective and unbiased investigating authority would have considered the differences
in the usages of coils and plates more closely than referring general ly to broad overlapping
applications of these product categories when determining the comparability of their prices for the
purposes of Article 3.2.

222 Non-injury brief (revised) (Exhibit JPN-8.b (BCI)), pp. 9-10.
223 Applicant's reply to interested parties' comments (1 November 2018) (Exhibit CHN-21.b), p. 2.
224 China's response to Panel question No. 46, paras. 78-82 (referring to Applicant's reply to interested
parties' comments (1 November 2018) (Exhibit CHN-21.b); Applicant's reply to interested parties' comments
(23 January 2019) (revised) (Exhibit CHN-22.b); Gansu Jiu's questionnaire response (Exhibit CHN-23.b);
BCMR's questionnaire response (Exhibit CHN-24.b); BCF's questionnaire response (Exhibit CHN-25.b); and
Angang Lianzhong's questionnaire response (revised) (Exhibit CHN-26.b)).
225 Applicant's reply to interested parties' comments (1 November 2018) (Exhibit CHN-21.b), p. 2;
Applicant's reply to interested parties' comments (23 January 2019) (revised) (Exhibit CHN-22.b), p. 5.
226 We also note that the response of Gansu Jiu identifies that hot-rolled coils are used as raw material
for cold rolling, but does not state that stainless steel plates could also be used as raw material for cold rolling.
(Gansu Jiu's questionnaire response (Exhibit CHN-23.b), p. 2).
227 Japan's comments on China's response to Panel question No. 46, para. 48.

BCI deleted, as indicated [[***]]

c. Customers
7.156. Japan argues that while the final determination refers to the "final trading market and usage"
of billets (slabs), coils, and plates as being "consistent", in Japan's view, examining only the "final"
trading market does not constitute an objective examination as to the substitutability of the product
categories from the customer's perspective and, therefore, of the price comparability of the different
product categories.228 Japan asserts that even if the product categories share a "final usage", this
does not establish that they have the same direct usage, or that they are interchangeable from the
perspective of the relevant customers. 229 Referring to record evidence, Japan contends that there
are "substantial differences" in the customers and distribution cha nnels of the three product
categories.230
7.157. We note that even if the product categories at issue are eventually consumed for the same
final purpose, their substitutability from the perspective of actual customers will depend on the
immediate purpose for which they are used. For example, if product A is a semi -finished product
used as an input to manufacture product B (like, e.g. billets (slabs) are used to produce coils), which
in turn is an input used to produce the finished product C (like, e.g. coils may be used to produce
steel sheets), all three products are eventually being used for final consumption. However, that does
not imply that product A will have the same customer, and will be therefore substitutable from the
customers' perspective, with product C. In such a scenario, product A will be purchased by customers
with the capacity to produce product B and will not directly be procured by final consumers of
product B. Likewise, a manufacturer of the intermediate product B will purchase product A, but not
product C. Hence, the fact that all three products have the same "final usage" does not necessarily
demonstrate that they are substitutable from the customers' perspective , suggesting that their
prices may not be comparable.
7.158. In this case, Japan has referred to record evidence to support its point that, despite having
the same "final usa ge", billets (slabs), coils, and plates differ in terms of actual customers. Japan
asserts that customers who need hot -rolled stainless steel coils to produce cold -rolled coils cannot
purchase billets (slabs) instead, as they would not have the hot-rolling mills required to convert
billets (slabs) into coils.231 Japan also contends that such customers also cannot purchase plates, as
plates cannot be put into cold -rolling mills that are designed to cold -roll thinner and long sheets
uncoiled from coils. 232 Japan further asserts that customers of plates for construction cannot
purchase billets (slabs) as they would not have hot -rolling mills necessary to produce plates from
slabs, and can also not purchase coils as these cannot be turned into plates.233 In addition to these
assertions based on logic, Japan refers to the non -injury brief presented before MOFCOM by the
Japanese respondents, which describes the "customer bases" of the three product categories as
follows: (a) stainless steel billet (slab) "is typically used by the stainless steel producer to process
internal downstream products or sold to affiliated companies[;] [i]n a few cases it may also be sold
to other stainless steel producers to produce downstream hot -rolled products" 234; (b) hot-rolled
stainless steel coils have as their "major customers" producers of downstream products including
cold-rolled steel "and are rarely used as final products" 235; and (c) hot-rolled stainless steel plates
have as their "major customers" shipyards, container yards, machinery factories, etc. and are
"custom manufactured to meet customers' specific project requirements".236
7.159. MOFCOM's final determination does not address the divergences in the customer groups of
billets (slabs), coils, and plates that were evident from the record evidence before MOFCOM. The
mere finding that the three product categories have the same "final trading market and usage" and
"crossed and overlapped downstream usages in actual application, such as storage tanks, bridges
and vessels" reveals no consideration of the impact of the different actual customer groups on the

228 Japan's first written submission, paras. 103 and 110.
229 Japan's first written submission, para. 105.
230 Japan's first written submission, para. 106.
231 Japan's first written submission, para. 104.
232 Japan's first written submission, para. 104.
233 Japan's first written submission, para. 104.
234 Non-injury brief (revised) (Exhibit JPN-8.b (BCI)), p. 10. Japan asserts that the non-injury brief
notes that "stainless steel slabs from Indonesia Tsingshan are only used for the self-use of the Chinese
companies subordinated to Tsingshan Holding Group". (Japan's first written submission, para. 107 (referring to
Non-injury brief (revised) (Exhibit JPN-8.b (BCI)), p. 27).
235 Non-injury brief (revised) (Exhibit JPN-8.b (BCI)), p. 10.
236 Non-injury brief (revised) (Exhibit JPN-8.b (BCI)), p. 10.

BCI deleted, as indicated [[***]]

comparability of price. We consider that MOFCOM's failure to examine the evidence concerning the
differences in customer groups of billets ( slabs), coils, and plates, meant t hat its ultimate
determination was not based on an objective examination of positive evidence and was not
reasonably and adequately explained.
d. Tariff classification and Chinese quality standards
7.160. Japan argues that differences in the physical characterist ics and uses of the three product
categories are reflected in the classification of different steel products in the Chinese tariff system.237
Japan argues that while MOFCOM listed the applicable tariff numbers that comprised the product
under consideration in the final determination, it did not "explore how the differences reflected in
the classifications affected price comparability". 238 Japan contends that the application of different
tariff rates to different product categories shows "that the conditions of competition between Subject
Imports and domestic like products are different for stainless steel slabs, hot -rolled stainless steel
coils, and hot-rolled stainless steel plates". 239 Per Japan, the classification of steel products in the
National Standard o f the People's Republic of China (Chinese quality standards) also shows that
"stainless steel slabs, hot-rolled stainless steel coils, and hot-rolled stainless steel plates [are] three
separate and distinct products and that stainless steel slabs can be only semi-finished products".240
Japan submits that MOFCOM improperly failed to address the differences in tariff rates and quality
standards applicable to billets (slabs), coils, and plates in its consideration of price effects.241
7.161. We understand Japan's submissions concerning MOFCOM's alleged failure to properly explore
the differences in tariff classifications and quality standards to be grounded in the view that such
classifications and standards reflect the differences in physical characteristics and usages of the
product categories that should have been taken into account in MOFCOM's analysis of price
comparability. Having already found that MOFCOM did not properly address evidence concerning the
physical characteristics, usages and customers, of the releva nt products, we do not think it is
necessary, for the purpose of securing a positive solution to the dispute, to make additional findings
with respect to the merits of this aspect of Japan's complaint.
e. Production processes
7.162. Finally, Japan maintains that MOFCOM's findings regarding production processes of different
product categories did not address the possibility that differences in production stages could lead to
differences among the three products in terms of their uses and customers, rendering them
non-substitutable.242 Japan argues that the commonality in the production processes of various
product categories identified by MOFCOM would lead "to an absurd conclusion that the prices of all
products made of stainless steel … are comparable". 243 As the es sence of Japan's arguments
regarding differences in the production processes of different product categories appears to be that
such differences could give rise to differences in the uses and customers of the product categories,
we consider that, in the light of our previous findings, we need not address Japan's submissions on
production processes to assist the parties achieve a satisfactory resolution of the dispute.
Conclusion in respect of MOFCOM's assessment of non-price differences:
7.163. For the reasons discussed above, we consider that MOFCOM did not properly engage with
record evidence concerning differences in the physical characteristics, usages, and customer groups
of the three product categories, which were relevant to the competitive relati onship between the
product categories, and thus to the comparability of their prices. Accordingly, we consider that
MOFCOM failed to provide a reasoned and adequate explanation supporting its determination that
the prices of the product categories were comparable for the purpose of its price effects analysis.

237 Japan's first written submission, para. 111.
238 Japan's first written submission, para. 111.
239 Japan's first written submission, paras. 116-117 (referring to Application (Exhibit JPN-6.b),
attachment 7).
240 Japan's first written submission, paras. 119-120 (referring to Non-injury brief (revised)
(Exhibit JPN-8.b (BCI)), annex 1, pp. 67-69).
241 Japan's first written submission, paras. 117 and 120.
242 Japan's first written submission, para. 128.
243 Japan's first written submission, para. 133. (emphasis omitted)

BCI deleted, as indicated [[***]]

7.3.3.2.3 China's arguments concerning the relevance of MOFCOM's findings of price
comparability to MOFCOM's consideration of price effects
7.164. As a general defence to Japan's arguments concerning MOFCOM's alleged failure to properly
address the issue of price comparability, China argues that since MOFCOM's price effects
consideration was based on a comparison of price trends rather than of actual prices, and on volume
of the subject imports, the price comparability issues concerning product categories could not have
impacted the objectivity of MOFCOM's assessment. 244 Below, we first address China's arguments
concerning the distinction China seeks to draw between a price effects analysis based on a
comparison of "price trends" and one based on a comparison of "actual prices". We then address
China's defence concerning MOFCOM's use of volume trends in its price effects analysis.
a. Price trends versus actual prices
7.165. In support of its view that MOFCOM's comparison of price trends was not affected by the
price comparability issues raised by Japan 245, China refers to the followi ng excerpt from the
Appellate Body report in Korea – Pneumatic Valves:
The KTC's transaction -to-average comparison analysis was thus aimed at assessing
whether the prices of dumped imports were lower than the prices of domestic like
products for determini ng price effects within the meaning of Article 3.2, second
sentence. Price comparability thus became an important issue as the probative value of
the comparison depended on the degree of price comparability and concerned the
objectivity and evidentiary fou ndation of the KTC's price suppression and price
depression findings under Articles 3.1 and 3.2. We agree with the Panel that the KTC
was required to ensure price comparability in these price comparisons inasmuch as it
relied on the price differentials to find that dumped imports had price -suppressing
and -depressing effects on domestic prices.
…
Accordingly, to the extent an investigating authority relies on price comparisons in its
consideration of price effects of subject imports, price comparability ne eds to be
ensured. Thus, where an investigating authority fails to ensure price comparability in
price comparisons between dumped imports and the domestic like product, this
undermines its findings of price effects under Article 3.2, to the extent that it relies on
such price comparisons.246
7.166. Disagreeing with China, Japan argues that neither the text of Article 3.2 of the
Anti-Dumping Agreement nor any past panel or Appellate Body findings have drawn a distinction
between prices and price trends. Japan also c onsiders China's assertion that MOFCOM relied on a
comparison of price trends rather than actual prices is an ex post facto rationalization of MOFCOM's
analysis.247
7.167. We share Japan's view that price comparability must be established regardless of whether
an investigating authority compares "price trends" or "actual prices". If price comparability is not
ensured when comparing price trends, a comparison of the price trends of the baskets of subject
imports and of like domestic products will not reveal whether the movements in price trends are the
result of actual changes in price rather than changes in the product mix. 248 Thus, as the panel in
China – Autos (US) found, "the comparability of prices for subject imports and the domestic like
product may well have a n impact on [an authority's consideration of price effects] even when
absolute values or actual prices are not directly considered". 249 Accordingly, in our view,
China's reliance on the Appellate Body's findings in Korea – Pneumatic Valves is misplaced.
The Appellate Body's statements do not prescribe different degrees of relevance of the issue of price
comparability depending on whether a price effects analysis is based on a comparison of price trends

244 China's response to Panel question No. 28, para. 151; first written submission, para. 228.
245 Japan's response to Panel question No. 28, para. 103.
246 Appellate Body Report, Korea – Pneumatic Valves (Japan), paras. 5.247 and 5.323.
247 Japan's response to Panel question No. 28, paras. 105-106.
248 Japan's response to Panel question No. 28, para. 106.
249 Panel Report, China – Autos (US), para. 7.282.

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or of actual prices.250 China has, therefore, failed to e stablish that the price comparability issues
concerning product categories could not have impacted the objectivity of MOFCOM's assessment
simply because MOFCOM's price effects consideration was based on a comparison of price trends
rather than of actual prices.
b. Volume of dumped imports
7.168. Relying upon certain findings of the Appellate Body in China – GOES, China argues that the
objectivity of MOFCOM's assessment of price effects was not affected by price comparability issues
as it was grounded in its findings with respect to the volume of dumped imports.
7.169. The Appellate Body in China – GOES found that in circumstances where an investigating
authority relies on both subject import prices and volume, a panel must still allow for the possibility
that either price s or volume was sufficient by itself to sustain a finding .251 However, the
Appellate Body agreed with the panel's conclusion that in the facts of that case it was not possible
to conclude that MOFCOM's finding of price depression might be upheld based purel y on
MOFCOM's findings regarding the effect of the increase in the volume of subject imports. 252
The Appellate Body noted that in reaching that conclusion, the panel had found that nothing in
MOFCOM's determination suggested that MOFCOM itself found the volume effects of subject imports
alone to be sufficient for a finding of price suppression. The Appellate Body noted that without such
explanation from MOFCOM, the panel could not have itself undertaken to disentangle the relative
contribution of prices and volume based effects of the subject imports to MOFCOM's final
determination without risking engaging in a de novo review.253
7.170. We agree with the Appellate Body that, in principle, a finding of price effects could be
sustained based on the effect of the volume of subject imports on the prices of the domestic like
product. Moreover, as the parties point out, MOFCOM's findings of series -specific price effects do
contain references to the volume of subject imports.254 However, as was the case before the panel
and the Appellate Body in China – GOES, MOFCOM's final determination in this case does not explain
whether MOFCOM's analysis of import volume alone could have sustained MOFCOM's consideration
of price effects. We note that in response to our question asking whether MOFCOM's consideration
of price effects could be sustained on the basis of MOFCOM's volume-trends analysis alone, China
did not respond in the affirmative and did not provide any explanation as to how anything in
MOFCOM's final determination would support that conclusion. Rather, China only asserted that
"MOFCOM in this case relied on both the prices and the volumes of the dumped imports to reach its
conclusion on the existence of adverse price effects".255 Given that China itself does not argue that,
or explain how, MOFCOM's volume effects analysis was alone sufficient to justify its price effects
findings, we do not see a need to consider this issue any further.
7.3.3.2.4 Conclusion in respect of Japan's claims concerning MOFCOM's findings with
respect to the comparability of prices of product categories
7.171. Based on the foregoing analysis, we find that MOFCOM acted inconsistently with Articles 3.1
and 3.2 of the Anti-Dumping Agreement because in making its findings on price effects, MOFCOM
failed to ensure that there was no issue of price comparability between the product categories.
In particular, we find that MOFCOM acted inconsistently with these provisions for the following
reasons:
a. to the extent that MOFCOM's price effects findings were based on China's view that the
obligation to ensure price comparability is triggered only when there are significant price
differences between products categories, MOFCOM proceeded on a misconceived
understanding of the notion of price comparability;

250 Japan's response to Panel question No. 28, paras. 106-107.
251 Appellate Body Report, China – GOES, para. 216.
252 Appellate Body Report, China – GOES, para. 221.
253 Appellate Body Report, China – GOES, para. 220.
254 Japan's response to Panel question No. 29, paras. 108-109; China's response to Panel question
No. 29, para. 152.
255 China's response to Panel question No. 29, para. 153.

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b. MOFCOM failed to base its determination on an objective assessment of positive evidence
because it relied on its scope of subject product findings, without any further explanation,
to show that there were no price comparability issues between product categories;
c. MOFCOM failed to explain what best information available was relied on in making the
finding of "reasonable differences " in prices, and MOFCOM did not explain how the best
information available that it selected supported this finding. MOFCOM also did not explain
how a finding of "reasonable differences" between product categories could be understood
to mean that there was no issue of price comparability as regards the products categories;
and
d. MOFCOM did not objectively examine the record evidence reg arding the non -price
differences between product categories submitted by Japanese respondents before
MOFCOM.
7.3.3.3 Whether MOFCOM's individual series -specific price effects analyses were based
on an objective examination of positive evidence
7.172. Japan argues that MO FCOM failed to ensure price comparability when performing its
series-specific price effects analyses for the following reasons256:
a. MOFCOM did not address the differences in the mix of various product categories
(i.e. billets (slabs), coils, and plates) in the series -specific baskets of imports and the
domestic like products that it compared in its series-specific price effects analyses, thus
failing to ensure that any price differentials between the series-specific baskets of subject
imports and domestic like products were not caused by differences in the mix of product
categories in the relevant baskets;
b. the series-specific volume figures on which MOFCOM relied in its series -specific analyses
were inaccurate , and series-specific volume and market shares fig ures did not show
fluctuations in series-specific import volumes and market shares during the injury POI;
c. MOFCOM's series -specific analyses in respect of 300 -series and other series did not
adequately explain why the findings of "adverse price effects" wer e not undermined by
(i) the divergent price trends between subject imports and domestic like products; and
(ii) consistent overselling by the subject imports; and
d. MOFCOM's findings of price effects with regard to 300 -series and the other series were
ambiguous and MOFCOM did not make specific findings of price effects with regard to the
400-series or the 200-series at all.257
Japan argues that these defects show that MOFCOM's series-specific price effects analyses did not
provide an objective basis for establishing that the subject imports in each of the series had a price
effect on the domestic like product in the corresponding series , and could not have been a valid
basis for MOFCOM's conclusion that the subject imports as a whole had a price depressing effect on
the domestic like products as a whole .258 China requests the Panel to reject Japan's arguments
concerning each of the alleged defects in MOFCOM's series -specific price effects consideration
identified by Japan.
7.173. As we have found in section 7.3.3.2 above that MOFCOM's finding with respect to the price
comparability of the three product categories was not based on an objective examination, we also
consider that MOFCOM's individual series-specific price effects analyses did not involve an objective
examination of positive evidence. This is because the baskets of subject imports and domestic like
products belonging to individual series would each comprise the three product categories. Given that
MOFCOM failed to establish that the prices of product categories were comparable, we agree with
Japan that, as a consequence, MOFCOM also failed to ensure that its series -specific price
comparisons did not preclude the possibi lity that the observed changes in average series -specific

257 Japan's second written submission, para. 112.
258 Japan's second written submission, para. 120.

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prices could be the result of changes in the product category mix rather than genuine changes in
series-specific prices.
7.174. In the light of this finding, we do not consider it is necessary, for the pur pose of securing a
positive solution to the dispute, to make additional findings on the merits of Japan's remaining
arguments in support of its view that MOFCOM's series-specific price effects analyses did not involve
an object ive examination of positive e vidence as required under Articles 3.1 and 3.2 of the
Anti-Dumping Agreement.259
7.3.3.4 Whether MOFCOM's finding of overall price depression was based on an objective
examination of positive evidence
7.175. Japan argues that MOFCOM's finding of overall price depression in respect of the product
under consideration as a whole was not objective because MOFCOM failed to explain how such a
finding could have been made in the light of evidence showing that prices of the domestic like product
as a whole "generally rose" over the POI, and that prices of the subject imports as a whole "largely
diverged" from, and were "consistently higher" than, prices of the domestic like products. 260 Japan
also maintains that MOFCOM' s series-specific price effects analyses could not objectively support
MOFCOM's overall conclusion of price depression, as MOFCOM did not explain why a price decrease
in only two series (i.e. the 300-series and the other series) could form the basis for a finding of price
depression in respect of the product as a whole when the prices of the 200-series and the 400-series
showed an overall increasing trend.261
7.176. China argues that Japan has mischaracterized MOFCOM's findings. According to China,
MOFCOM's overall finding of "price depression" was not based on a comparison of weighted average
prices of the subject imports and the domestic like products taken as a whole, but rather
MOFCOM's series-specific price effects analyses.262 Moreover, China maintains that its series-specific
price effects analyses adequately supported its overall conclusion of price depression.263
7.177. We note that we have already concluded that (a) MOFCOM's decision to compare prices of
subject imports and domestic like products undistinguished by product categories was inconsistent
with Articles 3.1 and 3.2 of the Anti-Dumping Agreement; and (b) MOFCOM's individual
series-specific price effects analyses did not involve an objective examination of positive evidence.
MOFCOM's overall conclusion of p rice depression was dependent on both of these findings .264
Consequently, we find that MOFCOM's overall conclusion of price depression was also inconsistent
with Articles 3.1 and 3.2. In such circumstances, we do not consider it is necessary, for the purpose
of securing a positive solution to the dispute, to make findings on the merits of Japan's additional
allegation that MOFCOM's finding of price depression failed to properly account for the fact that
average domestic prices for the product as a whole "generally rose", and that average import prices
"largely diverged" from, and were "consistently higher" than, average domestic prices.

259 We note that Japan argues that MOFCOM improperly failed to consider differences between series of
grades, including differences in their mechanical properties, uses and customers, which cast doubt on the
comparability of the prices of baskets of products comprising products of different series of grades. Given that
MOFCOM divided the PUC into products of various series of grades and purported to perform series-specific
price effects analyses for each grade separately, we do not consider it necessary, for the purpose of securing a
positive solution to the dispute, to consider Japan's arguments concerning MOFCOM's alleged failure to
consider the differences between series of grades that had a bearing on the comparability of their prices.
(Japan's first written submission, paras. 142-172).
260 Japan's first written submission, paras. 188 and 205.
261 Japan's first written submission, paras. 197 and 202.
262 China's first written submission, paras. 250-251 and 346.
263 China's first written submission, para. 260.
264 We make no finding, however, as to whether MOFCOM's overall conclusion of price depression was
based exclusively on its series-specific price effects analyses, or was also based on its comparison of weighted
average prices of the subject imports and domestic like products as a whole.

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7.3.4 Overall conclusion in respect of Japan's claim s under Articles 3.1 and 3.2 of the
Anti-Dumping Agreement
7.178. In the light of the analysis set out above, we conclude that Japan has established that
MOFCOM's consideration of price effects was inconsistent with Articles 3.1 and 3.2 of the
Anti-Dumping Agreement because:
a. for reasons summarized in section 7.3.3.2.4, MOFCOM's findings with respect to the
comparability of prices of stainless steel billets (slabs), stainless steel plates, and stainless
steel coils (product cat egories) was not based on an objective examination of positive
evidence;
b. for reasons set out in section 7.3.3.3, MOFCOM's individual series -specific price effects
analyses were not based on an objective examination of positive evidence; and
c. MOFCOM's overall conclusion of price depression was dependent on MOFCOM's erroneous
findings of price comparability and its flawed series-specific price effects analyses.
7.4 Japan's claim s concerning MOFCOM's examination of the impact of the subject
imports on the state of the domestic industry
7.4.1 Introduction
7.179. In the underlying investigation, MOFCOM examined trends concerning a range of economic
indices reflecting the state of the domestic industry over the injury POI. Following this examination,
MOFCOM summarized its assessment of the state of the domestic industry as follows:
In summary, despite the improvement of the domestic industry's product ion and
financial situation for individual years, due to the impact of increased volume and
decreased price of dumped imports, during the injury POI, under the circumstance of
favorable market conditions such as steady growth in domestic demand and positiv e
industrial policies, the domestic industry was still facing severe production and operation
pressures, production capacity was not effectively released, market share saw an overall
downward trend, and ending inventory was high, pre-tax profits were still at a low level,
and investment did not receive returns that it should have had.265
7.180. MOFCOM went on to reject the interested parties' argument that most of the relevant
economic indices were positive and did not suggest the existence of injury. In this respect, MOFCOM
noted that its injury determination was not "based solely on certain indices of the domestic industry,
but all economic indices and the impact of other factors". 266 MOFCOM found that a comprehensive
consideration of all indices indicated that the domestic industry suffered injury.267
7.181. Japan challenges MOFCOM's analysis of the impact of the dumped imports on the domestic
industry under Articles 3.1 and 3.4 of the Anti-Dumping Agreement on several grounds. Japan claims
that MOFCOM did not objectively examine evidence pertaining to domestic sales price, domestic
sales volume, market shares of the domestic industry, apparent domestic consumption, capacity
utilization, ending inventory, pre -tax profits, and return on investment. 268 Japan also argues that
MOFCOM failed to explain why the economic factors showing negative trends supported an
affirmative injury determination even though several factors exhibited positive trends. 269 China
argues that each of Japan's arguments is unfounded.270

265 MOFCOM's final determination (Exhibit JPN-5.b), p. 49.
266 MOFCOM's final determination (Exhibit JPN-5.b), p. 50.
267 MOFCOM's final determination (Exhibit JPN-5.b), p. 50.
268 Japan's first written submission, paras. 350 and 354-355.
269 Japan's first written submission, para. 360.
270 China's first written submission, para. 419.

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7.4.2 Articles 3.1 and 3.4 of the Anti-Dumping Agreement
7.182. Article 3.1 of the Anti-Dumping Agreement, which prescribes a set of overarching obligations
that must be followed when determining injury, states:
A determination of injury for purposes of Article VI of G ATT 1994 shall be based on
positive evidence and involve an objective examination of both (a) the volume of the
dumped imports and the effect of the dumped imports on prices in the domestic market
for like products, and (b) the consequent impact of these imports on domestic producers
of such products.
7.183. Article 3.4 of the Anti-Dumping Agreement provides:
The examination of the impact of the dumped imports on the domestic industry
concerned shall include an evaluation of all relevant economic factors and indices having
a bearing on the state of the industry, including actual and potential decline in sales,
profits, output, market share, productivity, return on investments, or utilization of
capacity; factors affecting domestic prices; the magnitude of t he margin of dumping;
actual and potential negative effects on cash flow, inventories, employment, wages,
growth, ability to raise capital or investments. This list is not exhaustive, nor can one
or several of these factors necessarily give decisive guidance.
7.184. We note that Article 3.1 requires a determination of injury, including the examination of the
impact of subject imports on the domestic industry pursuant to Article 3.4, to be based on an
objective examination of positive evidence. Article 3.4 requires an investigating authority to examine
the impact of the dumped imports on the domestic industry. Thus, the text of Article 3.4 creates a
link between dumped imports and the state of the domestic industry. An investigating authority is
required to examine this link by evaluating all relevant economic factors and indices that have a
bearing on the state of the domestic industry, including those set out explicitly in Article 3.4. While
an investigating authority must assess the factors listed in Article 3.4, this provision does not require
all factors to be indicative of injury. We agree in this regard with previous panels that an investigating
authority may conclude that there is injury to the domestic industry even when certain individual
factors do not show negative trends, provided that the authority adequately explains how its
evaluation of the relevant economic factors and indices support the overall determination of injury.271
Consistent with its obligation to conduct an objective examination of injury, a n investigating
authority faced with evidence that would not support a finding of injury must explain how it took
that evidence into account in reaching a conclusion of injury.272
7.4.3 Analysis of Japan's claims under Articles 3.1 and 3.4
7.4.3.1 MOFCOM's examination of domestic sales price and domestic sales volume
7.185. Japan argues that MOFCOM failed to properly examine the impact of subject imports on the
state of the domestic industry because its evaluation of certain relative and absolute trends in
domestic sales prices and volumes was deficient.273 According to Japan, MOFCOM's impact analysis
failed to adequately address the following trends:
Sales prices
a. From 2014 to 2015, when the domestic sales price declined, the price of the subject
imports increased, indicating that subject imports did not explain the decrease in domestic
sales price.274

271 Panel Report, Pakistan – BOPP Film (UAE), appealed 22 February 2021, para. 7.353 (referring to
Panel Reports, Thailand – H-Beams, paras. 7.236 and 7.249; and China – Cellulose Pulp, para. 7.129).
272 Panel Report, Pakistan – BOPP Film (UAE), appealed 22 February 2021, para. 7.420 (referring to
Panel Reports, Thailand – H-Beams, para. 7.249; and China – Cellulose Pulp, para. 7.129).
273 Japan's first written submission paras. 344-350; second written submission, paras. 199-205.
274 Japan's first written submission, para. 348.

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b. The decrease in domestic sales price from 2014 to 2015 was followed by increases in
domestic sales prices in 2016 and 2017, and the domestic sales price increased overall by
11.87% between 2014 to 2017.275
Sales volume
c. From 2014 to 2015, when the domestic sales volume decreased, the volume of subject
imports also decreased, indicating that subject imports did not explain the decrease in
domestic sales volume.276
d. The decrease in domestic sales volume from 2014 to 2015 was followed by significantly
larger volumes of domestic sales in 2016 and 2017, and domestic sales volume between
2014 and 2017 increased overall.277
7.186. We note that Japan's concerns about the manner in which MOFCOM evaluated trends in sales
prices pertain to MOFCOM's finding in its impact analysis that "the price of dumped imports
continuously fell, and the price of domestic like products was significantly depressed". 278 China
refutes Japan's argument by asserting that this finding is "based on the detailed price effects
consideration MOFCOM carried out with due consideration for the different series of steel grade".279
We recall that in section 7.3.4 above, we have found MOFCOM's consideration of price effects to be
inconsistent with Articles 3.1 and 3.2 of the Anti -Dumping Agreement. Given that China
acknowledges that MOFCOM's consideration of trends in sales prices for the purpose of its impact
analysis was based on its earlier consideration of price effects, the defects in the latter would taint
the former. Consequently, we find that Japan has established that MOFCOM's evaluation of trends
in sales prices for the purpose of its impact analysis to the extent that it relied upon MOFCOM's earlier
findings with respect to price effects, was inconsistent with Articles 3.1 and 3.4 of the
Anti-Dumping Agreement.
7.187. Turning to Japan's submissions in relation to MOFCOM's examination of trends in sales
volumes, China asserts that MOFCOM was not obliged to focus on the part of the injury POI Japan
focuses on in making its arguments (i.e. developments between 2014 and 2015).280 China contends
that Japan's arguments disregard MOFCOM's analysis of the state of the domestic industry in respect
of the injury POI as a whole and for each individual year of the injury POI, including an assessment
of the first quarter of 2018 relative to the first quarter o f 2017.281 China also submits that an
investigating authority need not find injury for all relevant economic factors, provided it addresses
conflicting evidence.282 China contends that MOFCOM properly explained that due to steady growth
in domestic demand, t he implementation of favourable industrial policies and the reduction of
outdated production capacity, certain indicators, including production output and sales volume,
improved during the injury POI, but that these positive elements did not undermine its conclusion
as many indicators declined despite favourable developments.283
7.188. We note that MOFCOM found that the sales volume of the domestic like products "kept an
overall growth trend during the injury POI".284 When assessing the state of the domestic industry on
a year-by-year basis, MOFCOM noted that from 2014 to 2015, several indicators pertaining to the
state of the domestic industry deteriorated, including sales volume. Regarding 2016, MOFCOM noted
that "du e to the favorable effects of domestic industrial adjustment policies and continuous
improvement of the domestic industry's management and technical level" 285, several indicators,
including sales volume, developed positively. For 2017, MOFCOM found that whi le "factors such as

275 Japan's first written submission, para. 346.
276 Japan's first written submission, para. 347.
277 Japan's first written submission, para. 346. In this regard, Japan points to the fact that while the
domestic sales volume (in 10,000 tons) dropped from 373.69 in 2014 to 365.81 in 2015, the domestic sales
volume in 2016 and 2017 were "significantly larger" relative to the level in 2015: 516.40 and 502.68 for 2016
and 2017, respectively.
278 MOFCOM's final determination (Exhibit JPN-5.b), p. 48.
279 China's first written submission, para. 464.
280 China's first written submission, paras. 472 and 479.
281 China's first written submission, paras. 474, 475, and 480.
282 China's first written submission, para. 478.
283 China's second written submission, paras. 280-288.
284 MOFCOM's final determination (Exhibit JPN-5.b), p. 45.
285 MOFCOM's final determination (Exhibit JPN-5.b), p. 49.

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further elimination of outdated production capacity" led to improvement in several factors, the
increased volume and decreased price of the subject imports led to, among others, a decrease in
domestic sales volume . Finally, for the firs t quarter of 2018, MOFCOM noted that although sales
volume increased, several other factors deteriorated.286 In conclusion, MOFCOM again acknowledged
that for the injury POI as a whole, "circumstance[s] of growing trend of domestic demand" led to
improvement in sales volume, but found that other factors declined nevertheless.287
7.189. We recall that Articles 3.1 and 3.4 do not require an investigating authority to find that all
factors, or even a defined set of factors, display negative trends in order to conclude that there is
injury to the domestic industry. An investigating authority must, however, adequately explain how
its evaluation of the relevant economic factors and indices (potentially showing both positive and
negative trends) support an overall determin ation of injury. Consistent with its overarching
obligation to conduct an objective examination of injury, an investigating authority faced with
evidence that would not support a finding of injury must explain how it took that evidence into
account in reaching a conclusion of injury.288
7.190. The final determination reveals that MOFCOM examined and acknowledged the positive
movements in domestic sales volume, both in individual parts of the injury POI as well as over the
injury POI as a whole. MOFCOM weighed those positive movements against negative developments
in certain other factors, and found the negative developments to outweigh the positive movements
in domestic sales volume.289 Japan has not explained how MOFCOM's balancing of the effects of the
different factors (including positive movements in domestic sales) was deficient. Accordingly, we
find that Japan has not establish that MOFCOM failed to properly address the positive movements in
domestic sales volume in its impact analysis.
7.191. We next consider Japan's argument that MOFCOM did not properly evaluate relative changes
in the sales volume of subject imports and domestic like products between 2014 and 2015. In our
view, Japan has not explained why MOFCOM's examination of the impact of dumped imports on the
domestic industry ought to have addressed sales volume trends from 2014 to 2015. We note that
the relevant inquiry under Article 3.4 pertains to the "examination of the impact of the dumped
imports on the domestic industry". MOFCOM found subject imports to be dumped during the period
1 January 2017 to 31 December 2017. Thus, the question before MOFCOM for the purpose of
Article 3.4 pertained to the impact of these dumped imports on the state of the domestic industry.
MOFCOM found that the volume of subject imports increased in 2017, whereas the volume of
domestic sales decreased.290 The trends in 2017 must be certainly viewed in context of the trends
in the overall injury POI (1 January 2014 to 31 March 2018), which includes the base year
2014-2015. However, whether or not the volume of subject imports and domestic like products
declined together in that base year (i.e. 2014, a period at the very beginning of the injury POI which
did not coincide with the dumping POI), does not speak directly to the question o f whether the
"dumped" imports had an impact on the state of the domestic industry.
7.192. Further, MOFCOM evaluated the decrease in domestic sales volume in the more recent part
of the injury POI (i.e. 2017) in relation to the increase in the volume of subject imports in the same
period. Given that more recent data are more pertinent to current injury291, we consider that Japan
has not explained why MOFCOM's omission to address the decreasing trends in both domestic sales
volume and import volume in a more remote part of the injury POI would, in and of itself, undermine

286 MOFCOM's final determination (Exhibit JPN-5.b), pp. 48-49.
287 MOFCOM's final determination (Exhibit JPN-5.b), p. 50.
288 Panel Report, Pakistan – BOPP Film (UAE), appealed 22 February 2021, para. 7.420.
289 MOFCOM found that "[t]he evidence show[ed] that, in order to meet the growth of domestic market
demand … sales volume of domestic like products kept an overall growth trend during the injury POI … [b]ut
the existing capacity of domestic industry was not fully utilized, the utilization of capacity was maintained
to 76-86%, and the ending inventory was always in higher level". MOFCOM also found that "[i]n 2016, due to
the favorable effects of domestic industrial adjustment policies and continuous improvement of the domestic
industry's management and technical level, the sales volume … domestic like products increased … but pretax
profits and return on investments were still at a lower level" and that "[i]n January-March of 2018, [even
though] the sales volume increased, the economic indices such as sales revenue, market share, productivity,
pretax profit, return on investment, and net cash flow declined with varying degrees. The ending inventory of
domestic like products reached the highest level in history". (MOFCOM's final determination (Exhibit JPN-5.b),
pp. 48-49).
290 MOFCOM's final determination (Exhibit JPN-5.b), p. 49.
291 Panel Report, Pakistan – BOPP Film (UAE), appealed 22 February 2021, paras. 7.26 and 7.89.

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the objectivity of MOFCOM's impact analysis.292 Thus, we find that Japan has not established that
MOFCOM's evaluation of domestic sales volume was inconsistent with Articles 3.1 and 3.4 of the
Anti-Dumping Agreement.
7.4.3.2 MOFCOM's examination of market shares
7.193. In essence, Japan challenges the objectivity of MOFCOM's examination of market shares in
the context of its impact analysis and asserts that such examination was not based on positive
evidence on the following two grounds: (a) MOFCOM did not objectively calculate the market share
figures for the domestic industry293, and (b) MOFCOM failed to objectively examine certain trends in
the market shares of the domestic industry and subject imports.294
MOFCOM's calculation of market share figures for the domestic industry
7.194. Japan argues that MOFCOM's calculation of the market share of the domestic industry was
not objective, because MOFCOM allegedly included data with respect to the captive use of the
products in the numerator as part of the figure representing domestic sales, but not in the
denominator as part of the figure representing domestic apparent consumption. 295 According to
Japan, by includ ing captive use data only in the numerator, MOFCOM distorted the market share
figures. Thus, per Japan, MOFCOM's impact analysis did not involve an objective examination of
positive evidence.296
7.195. China asserts that Japan's understanding of the data used by MOFCOM to calculate the
domestic industry's market share is incorrect. Referring to record information, China asserts that,
contrary to Japan's submission, MOFCOM included data with respect to the captive use of the
products in both the numerator and the denominator of the domestic industry's market share
calculation.297
7.196. Japan has not specifically contested China's explanation or the record evidence China asserts
MOFCOM relied upon. Rather, in responding to China's clarification, Japan takes issue with another
alleged aspect of MOFCOM's determination of the domestic indust ry's market share. Specifically,
Japan complains about the "mere reference" in MOFCOM's final determination to the fact that
MOFCOM evaluated the domestic industry's market share "including the captive use", without
disclosing its "complex calculation formula" or providing "evidence or data substantiating the details
or mathematical implications" of the inclusion of captive use data in its calculation.298 According to
Japan, by falling short in these areas, MOFCOM failed to provide a "meaningful basis" for i ts injury
determination.299
7.197. We recall, however, that Japan has not specifically contested the record evidence China
referred to in its clarification of MOFCOM's findings. While Japan takes issue with MOFCOM's "mere"
statement about "including the captive use" in the domestic industry's market share figures, Japan
has not explained why the record evidence China referred to does not "substantiate the details or
mathematical implications" of MOFCOM's calculation. Likewise, to the extent Japan's concern is
MOFCOM's failure to disclose the "complex calculation formula", Japan has not explained why such
alleged lack of disclosure rendered MOFCOM's examination of domestic market shares inadequate
and inconsistent with the substantive obligations of Articles 3.1 and 3.4. Accordingly, there is no
basis for us to find that MOFCOM's "mere" statement about "including the captive use" in the
domestic market share figures renders its examination of domestic market shares inconsistent with
Articles 3.1 and 3.4 of the Anti-Dumping Agreement.

292 We also note that MOFCOM otherwise repeatedly acknowledged the generally positive trend in
domestic sales volume in its impact analysis, and appears to have relied on negative trends in certain other
factors as the basis for its conclusion that the domestic industry suffered material injury.
293 Japan's first written submission, paras. 339-343; second written submission, paras. 217-219.
294 Japan's first written submission, paras. 351-354; second written submission, paras. 206-209.
295 Japan's second written submission, paras. 217-218.
296 Japan's second written submission, paras. 218-219.
297 China's response to Panel question No. 49, paras. 92 and 97.
298 Japan's comments on China's response to Panel question No. 49, para. 63.
299 Japan's comments on China's response to Panel question No. 49, para. 63.

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MOFCOM's examination of domestic industry's market shares
7.198. Japan contends that while MOFCOM's determination of material injury to the domestic
industry was based, inter alia , on its finding that the market share of the domestic industry
experienced an overall decline during the injury POI, MOFCOM did not properly examine whether
subject imports explained the decline in the domestic industry's market share.300 Japan argues that
the subject imports had a "low" market share between 2014 and 2 017, which remained below 4%
and increased only by 2 percentage points in this period. Japan also highlights that while subject
imports gained 9 percentage points of market share in the first quarter of 2018 relative to the first
quarter of 2017, the domestic industry lost "only about 1% of market share" in that period. Based
on the foregoing market share figures, Japan argues that to objectively examine the impact of
subject imports on the state of the domestic industry, MOFCOM should have explained how and why
subject imports with low market share that also oversold the domestic like products could lead the
domestic industry to suffer injury by losing market share.301 Japan contends that by failing to provide
such explanation, MOFCOM acted inconsistently wi th Articles 3.1 and 3.4 of the
Anti-Dumping Agreement.302
7.199. China contends that in the first quarter of 2018, when the market share of subject imports
more than doubled to reach 10.44%, domestic industry lost approximately 1 percentage point of its
market share, which shows that the increase in the market share of the subject imports and the loss
in the market share of the domestic like products were correlated. 303 China also notes that during
the same period, the domestic prices of all product grades declined.304 China refers to
MOFCOM's finding that "in order to maintain a certain sales volume and market share" the domestic
industry was forced to lower its prices, and on that basis asserts that "the domestic industry would
have lost even more market share in the first quarter of 2018 had it not further decreased its sales
price".305 China also asserts that for specific series of grades, the market share of the subject imports
was "much higher" pointing in particular to MOFCOM's finding that for the othe r series this figure
was 79% to 92% during the injury POI.306
7.200. The question before us is whether MOFCOM provided a reasoned and adequate explanation
of its findings concerning domestic market shares for the purpose of examining the impact of subject
imports on the domestic industry. In its evaluation of the factors having a bearing on the state of
the domestic industry, MOFCOM made the following factual observations regarding the domestic
industry's market share:
During the injury POI, the market share of domestic like products kept a fluctuating and
declining trend. It was 40.28%, 38.54%, 44.24%, 41.52% and 38.43% respectively in
2014, 2015, 2016, 2017 and January -March of 2018. Of which it was down 1.74
percentage points year -on-year in 2015, up 5.70 percent age points year -on-year in
2016, down 2.72 percentage points year -on-year in 2017; it was 39.59% in
January-March of 2017, and it was down 1.16 percentage points year -on-year in
January-March of 2018.307
7.201. After setting out its factual observations with respect to all other factors, MOFCOM conducted
an overall impact analysis, which included the following statements referring to the domestic
industry's market shares:
a. In 2017, "the increased volume and decreased price of dumped imports weakened the
effect" of positive industrial policies, and that in 2017, "the market share [of the domestic
industry] was down 2.72 percentage points".

300 Japan's first written submission, paras. 351-352.
301 Japan's first written submission, para. 354.
302 Japan's first written submission, para. 354.
303 China's first written submission, paras. 483-485.
304 China's first written submission, para. 486.
305 China's first written submission, para. 487 (referring to MOFCOM's final determination
(Exhibit JPN-5.b), p. 41).
306 China's first written submission, para. 483 (referring to Final determination (Exhibit JPN-5.b), p. 42).
307 MOFCOM's final determination (Exhibit JPN-5.b), p. 45.

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b. The market share of the domestic like products also declined in the first quarter of 2018.308
MOFCOM then made its finding regarding the overall state of the domestic industry, stating,
inter alia, in this regard as follows:
In summary, despite the improvement of the domestic industry 's production and
financial situation for individual years, due t o the impact of increased volume and
decreased price of dumped imports, during the injury POI, under the circumstance of
favorable market conditions such as steady growth in domestic demand and positive
industrial policies, the domestic industry was still facing severe production and operation
pressures, production capacity was not effectively released, market share saw an overall
downward trend, and ending inventory was high, pretax profits were still at a low level,
and investment did not receive returns that it should have had. Therefore, the
Investigating Authority determined in the preliminary determination that, during the
injury POI, the domestic industry of stainless steel billet and hot -rolled stainless steel
plate (coil) suffered material injury.309
7.202. China asks us to reject Japan's submission that MOFCOM should have explained how and
why subject imports with low market share could lead the domestic industry to suffer injury by
alluding to the correlation between the increase in the subject imports' market share and the
decrease in the domestic industry' s market share over the injury POI.310 In China's view, such a
correlation shows the impact of subject imports on the domestic industry's market share. However,
MOFCOM's final determination con tains no discussion of any such correlation. Thus,
China's submission that MOFCOM's market share findings can be explained in the light of the
correlation between the market shares of subject imports and domestic like products is ex post, and
we thus canno t consider it. Accordingly, we find that Japan has established that
MOFCOM's examination of the domestic industry's market share in the context of its impact analysis
was not reasonably and adequately explained.311
7.203. Japan also argues that MOFCOM should have explained how subject imports that significantly
oversold domestic like products could have adversely affected the market share of the domestic
industry.312 We note that in making this argument, Japan refers to the prices of subject imports and
domestic like products set out at page 57 of the final determination. These are average prices of the
dumped imports and domestic like products that do not distinguish between product categories and
product grades. In section 7.3.3.2.4 we have found that MOFCOM did not properly establish that the
price of different product categories were comparable with each other. Also, the parties ag ree that
the prices of different product grades are incomparable. It follows, therefore, that a comparison of
the prices of the subject imports and the domestic like product as a whole cannot be relied upon to
objectively establish whether the subject impo rts did, in fact, oversell the domestic like product.
Indeed, Japan has made this very point in other arguments it has advanced in this proceeding. 313
Accordingly, we find that Japan has failed to establish that MOFCOM's examination of the domestic
industry's market share in the context of its impact analysis was not reasonably and adequately
explained due to MOFCOM's failure to address how the alleged overselling impacted the domestic
industry's market share.
7.204. In addition to the arguments discussed above, Japan also alleges that MOFCOM's evaluation
of market share did not involve an objective examination of positive evidence as it was based

308 MOFCOM's final determination (Exhibit JPN-5.b), p. 49.
309 MOFCOM's final determination (Exhibit JPN-5.b), p. 49.
310 China's first written submission, paras. 483-485.
311 China also refutes Japan's argument that MOFCOM failed to explain its findings concerning the
market share of the domestic industry in light of the subject imports' market share by referring to certain
findings that MOFCOM made in the context of its price effects analysis. (China's first written submission,
paras. 486-487) We note, however, that MOFCOM did not link its examination of domestic industry's market
share in the context of its impact analysis to the price effects findings that China points to. Thus, China's
argument is ex post and we thus cannot consider it. In any case, given that we have found MOFCOM's price
effects analysis to be inconsistent with Articles 3.1 and 3.2 of the Anti-Dumping Agreement, China cannot
validly rely on such price effects findings to justify any other aspect of MOFCOM's findings.
312 Japan's first written submission, para. 354.
313 Japan's first written submission, para. 76.

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"exclusively" on a comparison between the figures for the first quarter of 2018 with those for the
first quarter of 2017.314
7.205. As reflected in paragraph 7.200 above, when setting out the data concerning the domestic
industry's market shares, MOFCOM acknowledged that "the market share of domestic like products
kept a fluctuating and declining trend". MOFCOM also noted towards the end of the impact analysis
that market share of the domestic industry declined overall during the injury POI despite growing
domestic demand. In addition, MOFCOM noted the decline in market share of the domestic industry
in 2017 and in the first quarter of 2018. Thus, in its evaluation of market share of the domestic
industry, MOFCOM acknowledged the fluctuating trend in this factor, but focused on (a) the overall
decline in market share over the injury POI; and (b) the decline in the market share of the domestic
industry in the later part of the injury POI. Thus, contrary to Japan's contention, and as a matter of
fact, MOFCOM's evaluation of market shares does not appear to have exclusively involved a
comparison of figures from the first quarters of 2017 and 2018 alone.
7.206. Based on the foregoing, for reasons set out in paragraph 7.202, we find that Japan has
established that MOFCOM failed to provide a reasoned and adequate explanation of its analysis of
domestic market share for the purpose of examining the impact of dumped imports on the domestic
industry. MOFCOM therefore acted inconsistently with Articles 3.1 and 3.4 of the
Anti-Dumping Agreement by failing to perform an objective examination of the impact of the subject
imports on the market share of the domestic industry.
7.4.3.3 MOFCOM's examination of apparent domestic consumption
7.207. Japan argues that the method and the figures that MOFCOM used for calculating apparent
domestic consumption are unclear from the final determination. 315 Japan asserts that apparent
domestic consumption should be calculated by adding total domestic production and import volume
and then subtracting export volume. However, according to Japan, in the final determination the
figures for total domestic consumption were higher than the sum of the total domestic production
and the volume of subject imports. 316 In Japan's view, this inconsistency in figures concern ing
apparent domestic consumption coupled with the absence of an explanation regarding the calculation
method used to arrive at these figures made MOFCOM's impact analysis inconsistent with Articles 3.1
and 3.4 of the Anti-Dumping Agreement.317
7.208. China agrees with Japan that apparent domestic consumption is typically calculated by
adding total domestic production and import volume and then subtracting export volume, and as
such apparent domestic consumption should be equal to or less than the sum of the total domestic
production and the import volume. 318 However, China asserts that in arguing that the apparent
domestic consumption used in the final determination was greater than the sum of the total domestic
production and import volume, Japan overlooks the fact that the domestic production volume
referred to in the final determination excluded volumes produced by three Chinese companies that
were not included in the domestic industry for the purpose of the proceedings before MOFCOM. 319
China points out that the apparent domestic consumption figure on the other hand included the
domestic like products produced by the three companies that were otherwise excluded from the
investigation. Per China, the figures for apparent domestic consumption and total domestic
production identified in the final determination could be reconciled by keeping in view the fact that
data concerning these three companies were included in the apparent domestic consumption figures
but not in total domestic production figures set out in the final determination.320
7.209. We note that China placed before us record evidence corroborating its explanation as to how
the figures for apparent domestic consumption and total domestic production set out in the final
determination could be reconciled. 321 This evid ence shows that for each year of the injury POI,

314 Japan's first written submission, para. 357.
315 Japan's first written submission, para. 335.
316 Japan's first written submission, paras. 334-335.
317 Japan's first written submission, para. 338.
318 China's first written submission, para. 441.
319 China's first written submission, para. 444.
320 China's first written submission, para. 444.
321 China's response to Panel question No. 48, paras. 89-91 (referring to Applicant's reply to interested
parties' comments (23 January 2019) (revised) (Exhibit CHN-22.b), pp. 2-4; and Application (Exhibit JPN-6.b),
attachment 9).

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MOFCOM calculated the apparent domestic consumption by first summing up the production volume
of the domestic industry as defined for the purposes of the underlying investigation, the production
volume of Ch inese producers excluded from the domestic industry, and the total import volume
(including subject and non-subject imports).322 From this sum, MOFCOM subtracted the total export
volume from China. Japan did not rebut the validity of the evidence submitted by China. Through
this uncontested evidence, China has shown that the apparent domestic consumption figures were
higher than the sum of the total domestic production and import volume figures set out in the final
determination because the apparent domestic consumption figures, but not the latter figures,
included (a) production volume of Chinese producers not included in the domestic industry, and
(b) import volume of non-subject imports. We therefore consider that Japan has not established that
the domestic apparent consumption figures set out in the final determination suffered from any
discrepancy.
7.210. Japan also asserts that MOFCOM improperly included the production attributable to Chinese
producers not included in the domestic industry in the figure for apparent domestic consumption,
and by so doing MOFCOM failed to conduct an objective examination of positive evidence in its
evaluation of apparent domestic consumption.323 Japan also appears to take the view that the figures
for apparent domestic consumption should only include the production volume attributable to
domestic industry and should exclude the production volume attributable to Chinese producers that
were not incl uded in the domestic industry. This view is mistaken , however, because apparent
domestic consumption represents the amount of the subject product from all sources being
consumed domestically in a year, and not just the amount of production attributable to the domestic
industry. Indeed, this is also why apparent domestic consumption includes import volumes from
investigated countries and non-investigated countries.324 Therefore, Japan has not established that
MOFCOM failed to undertake an objective examinatio n of positive evidence in respect of domestic
apparent consumption.
7.211. Finally, Japan also argues that MOFCOM failed to disclose the method used to calculate the
apparent domestic consumption figures set out in the final determination. 325 However, Japan has
not explained why this concern pertaining to disclosure of the precise formula used to calculate
apparent domestic consumption must necessarily render MOFCOM's determination inadequate and
inconsistent with the substantive obligations in Articles 3.1 and 3.4 of the Anti-Dumping Agreement.
Thus, we find that Japan has not established a violation of Articles 3.1 and 3.4 on this basis.
7.4.3.4 MOFCOM's examination of capacity utilization and ending inventory
7.212. Japan argues that MOFCOM's statement in the final determinat ion that production capacity
was "not effectively released" and the ending inventory was "high" was not reasonably and
adequately explained.326 According to Japan, capacity utilization was generally improving and ending
inventory was stable during the injury POI. Accordingly, Japan contends that MOFCOM's evaluation
of capacity utilization and ending inventory did not constitute an "objective examination" and was
thus inconsistent with Articles 3.1 and 3.4 of the Anti-Dumping Agreement.327
7.213. China argues that MOFCOM's evaluation that the capacity was underutilized, and the ending
inventory remained high during the POI was clear on its face. China submits that Japan has failed
to advance any reasons about how MOFCOM could have explained this evaluation further.328
7.214. We note that in the final determination, MOFCOM provided the following data on capacity
utilization and ending inventory in the injury POI329:

322 China states that production volume figures for each producer represented the sum of production
volume of coils, production volume of plates, and external sales of billets. (China's response to Panel question
No. 48, paras. 89-91).
323 Japan's second written submission, para. 215.
324 Japan does not take issue with the inclusion of import volumes in the apparent domestic
consumption figures.
325 Japan's second written submission, para. 214.
326 Japan's first written submission, para. 356.
327 Japan's first written submission, para. 356.
328 China's first written submission, para. 491.
329 MOFCOM's final determination (Exhibit JPN-5.b), pp. 47-48.

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 2014 2015 2016 2017 Q1 2017 Q1 2018
Capacity
utilization
percentage
76.26 81.73 85.14 83.02 81.69 83.73
Year-on-year
change
(percentage
points)
Not applicable 5.47 3.41 -2.12 Not applicable 2.05 (relative
to Q1 2017)

 2014 2015 2016 2017 Q1 2017 Q1 2018
Ending
inventory
498,900 tons 543,200 tons 443,300 tons 442,600 tons 650,000 tons 558,200 tons
Year-on-year
change
Not applicable 8.88% -18.39% -0.15% Not applicable -14.13%
(relative to
Q1 2017)
7.215. In the final determination, MOFCOM noted that the capacity utilization of domestic like
products "kept a rising trend". 330 As regards ending inventory, MOFCOM noted that the ending
inventory of domestic like products "firstly fell and then rose". MOFCOM also found that over the
injury POI, "the existing capacity of domestic industry was not fully utilized, the utilization of capacity
was maintained to 76 -86%, and the ending inventory was always in higher level". 331 Regarding
capacity utilization, MOFCOM also noted that notwithstanding positive developments including
elimination of outdated production capacity and growing domestic demand, capacity utilization was
down by 2.12 percentage points in 2017.332 As regards ending inventory, MOFCOM also noted that
the "ending inventory of domestic like products reached the highest level in history" in the first
quarter of 2018.333 In summarizing the basis on which MOFCOM found the domestic industry to be
materially injured in the preliminary determination – a conclusion that it upheld in the final
determination, MOFCOM noted that the "production capacity was not effectively released" and th at
"ending inventory was high". 334 These findings were used by MOFCOM to support its affirmative
material injury determination.
7.216. We note that the data on capacity utilization show that except for a decline in the level of
capacity utilization from 2016 to 2017, capacity utilization improved in every other part of the injury
POI and was also better at the end of the injury POI relative to the beginning. MOFCOM itself noted
that capacity utilization kept a rising trend through the injury POI. However, MOFCOM did not refer
to any benchmark of what constitutes "effective release" of capacity, or otherwise explain why it
considered that the production capacity "was not effectively released" notwithstanding the rising
trend in this indicator through the injury POI. While MOFCOM found that capacity of the domestic
industry was not "fully utilized" and specified the range within which capacity utilization remained
(i.e. 76-86%), we do not consider that this was sufficient to explain MOFCOM's view that the capacity
was not "effectively released" – a view that MOFCOM used in support of its affirmative material
injury determination.
7.217. As regards ending inventory, we note that except for an increase in the inventory level from
2014 to 2015, the inventory level appears to have declined year-on-year for every other part of the
injury POI. According to Japan, the inventory level was "stable" during the injury POI, and therefore
MOFCOM's appraisal of the ending inventory as being "high" was not adequately explained.335

330 MOFCOM's final determination (Exhibit JPN-5.b), p. 47.
331 MOFCOM's final determination (Exhibit JPN-5.b), p. 48.
332 MOFCOM's final determination (Exhibit JPN-5.b), pp. 49-50.
333 We note that contrary to MOFCOM's finding that the ending inventory reached the highest level in
history in the first quarter of 2018, the data in the final determination indicates that the inventory level in the
first quarter of 2017 was higher than that in the first quarter of 2018. Therefore, rather than having ascended
to the highest level in history, the ending inventory in the first quarter of 2018 appears to have come down
relative to the first quarter of the preceding year – a consideration that MOFCOM appears to have overlooked.
Japan has not challenged this finding.
334 MOFCOM's final determination (Exhibit JPN-5.b) p. 49. When weighing indices showing positive
trends in the injury POI versus those that showed a negative trend, MOFCOM referred to the "downward trend"
in capacity utilization following 2017 to be negative factor. It is unclear what MOFCOM referred to as the
downward trend following 2017 in relation to capacity utilization, given that the level of capacity utilization in
2017 (83.02%) as well as the first quarter of 2017 (81.69%) was lower than that in the first quarter of 2018
(83.73%). Thus, utilization of capacity appears to have improved after 2017, rather than having suffered a
downward trend after 2017. Japan, however, has not challenged this finding.
335 Japan's first written submission, para. 356.

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China contends that because the ending inventory increased from 2014 to the first quarter of 2018,
Japan's assertion that the ending inventory was "stable" during the injury POI was invalid, and
MOFCOM's observation that the ending inventory "was always in higher level [sic]" was an adequate
evaluation of this indicator.336
7.218. We note that MOFCOM did not refer to any benchmark that would reveal what it considered
to constitute a "high" level of ending inventory, or otherwise explain why it conside red that the
ending inventory "was always in higher level" during the injury POI . China argues that
MOFCOM's appraisal of the ending inventory level as being "high" was clear in and of itself as the
ending inventory increased from 2014 to the first quarter of 2018.
7.219. For the following reasons, we do not consider that China's references to the increase in the
inventory level in the first quarter of 2018 relative to 2014 constitutes a sufficient explanation as to
why MOFCOM characterized the inventory level as being "high" through the injury POI. First, we
note that MOFCOM did not refer to the higher inventory level in the first quarter of 2018 relative to
the ending inventory in 2014 as the explanation for its finding that the ending inventory "was always
in h igher level". As such, China's argument is ex post to MOFCOM's determination. Second, the
inventory level declined year -on-year for every part of the injury POI except 2014 to 2015.
Therefore, in the absence of an explanation by MOFCOM, it is not clear how MOFCOM's own data
showing the evolution of inventory levels over the injury POI support its conclusion that they were
"always in higher level".
7.220. Based on the foregoing, we find that Japan has established that MOFCOM failed to objectively
examine evidence concerning capacity utilization and ending inventory and therefore acted
inconsistently with Articles 3.1 and 3.4 of the Anti -Dumping Agreement in respect of its evaluation
of capacity utilization and ending inventory.
7.4.3.5 MOFCOM's examination of pre-tax profit and return on investment
7.221. Japan argues that MOFCOM's evaluation of pre-tax profit and return on investment did not
involve an objective examination of positive evidence as it was based "exclusively" on a comparison
between the figures for the first quarter of 2018 with those for the first quarter of 2017.337
7.222. China argues that Japan's contention is factually inaccurate as MOFCOM analysed pre -tax
profit and return on investment for the whole injury POI.338 China also argues that to the extent that
MOFCOM's evaluation did focus on the most recent period, Japan has failed to explain why such
focus would be unreasonable.339
7.223. We note that in the final determination, MOFCOM made the following findings in respect of
pre-tax profit and return on investment:
a. When providing data for various indicators, MOFCOM noted that ( i) "the pretax profit of
domestic like products turned losses into gains, but it substantially decreased at the later
[part of the] period"; and (ii) "the investment return of domestic like products kept a rising
trend, and fell at the later [part of the] period".340
b. Subsequently, when addressing the status of the domestic industry in the year 2015,
MOFCOM noted that the domestic industry experienced "a sharp decline of 944.93% in
pretax profits" and "a decline of 3.56 percentage points in the return on investment".341
c. When doing the same for the year 2016, MOFCOM found that due to favourable effects of
domestic industrial policies and "continuous improvement of the domestic

336 China's first written submission, para. 491.
337 Japan's first written submission, para. 357.
338 China's first written submission, paras. 493-494.
339 China's first written submission, paras. 498-499.
340 MOFCOM's final determination (Exhibit JPN-5.b), pp. 45-46.
341 MOFCOM's final determination (Exhibit JPN-5.b), pp. 48-49.

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industry's management and technical level … [the] domestic industry turned losses into
profits, but pretax profits and return on investments were still at a lower level".342
d. For 2017, MOFCOM noted that owing to the effects of "factors such as further elimination
of outdated production capacity", pre-tax profits increased, but increased volume and
decreased price of the subject imports led to a decline in certain other indicators.343
e. Finally, MOFCOM noted that in the first quarter of 2018, as the "sales prices of the domestic
like products continued to decline", pre-tax profit and return on investment declined with
varying degrees.344
f. MOFCOM then summarized its preceding analysis by noting that while "the domestic
industry's production and financial situation" improved for individual years, due to
increased volume and decreased price of the dumped imports "pretax profits were still at
a low level" and " investment did not receive returns that it should have had" despite
favourable market conditions such as steady growth in domestic demand and positive
industrial policies.345 When concluding its impact analysis, MOFCOM found that even under
growing domestic demand, return on investment and pre-tax profits had a "significant
downward trend" after 2017.346
7.224. The foregoing shows that MOFCOM did not limit its evaluation of pre -tax profits and return
on investment to a comparison between the first quarter of 2017 and the first quarter of 2018 alone.
Rather, MOFCOM addressed the status of these indicators in other parts of the injury POI as well.
7.225. Accordingly, we find that Japan has not established that MOFCOM acted inconsistently with
Articles 3.1 and 3.4 of the Anti -Dumping Agreement because "with respect to pre -tax profit and
return on investment, MOFCOM based its finding exclusively on a comparison between the figures
for the first quarter of 2018 and those for the first quarter of 2017".347
7.4.3.6 MOFCOM's examination of economic factors showing positive trends
7.226. Japan argues that MOFCOM failed to explain in its impact analysis why economic factors
showing negative trends supported an affirmative injury determination when several other factors
exhibited positive trends. In Japan 's view, this failure rendered MOFCOM's impact analysis
inconsistent with Articles 3.1 and 3.4 of the Anti-Dumping Agreement.348
7.227. China maintains that MOFCOM properly explained that positive trends in certain factors were
attributable to a steady growth in domestic demand, favourable industrial policies, and the reduction
of outdated production capacity, but that they were not sufficient to counteract the impact of the
dumped imports.349 China asserts that "most importantly", MOFCOM found that in the most recent

342 MOFCOM's final determination (Exhibit JPN-5.b), p. 49.
343 MOFCOM's final determination (Exhibit JPN-5.b), p. 49.
344 MOFCOM's final determination (Exhibit JPN-5.b), p. 49.
345 MOFCOM's final determination (Exhibit JPN-5.b), pp. 46-49.
346 MOFCOM's final determination (Exhibit JPN-5.b), p. 50.
347 We note that Japan has also argued that "given that MOFCOM acknowledged that the interested
parties asserted that the profit indices of domestic listed companies had improved, and were not injured,
during the first half of 2018, there was a need for MOFCOM to conduct analyses of the trends between the first
quarter of 2017 and the first quarter of 2018". (Japan's first written submission, para. 357 (fn omitted)). To
us, it is unclear why Japan asserts that based on some data submitted by interested parties regarding "the first
half of 2018", there would be a need for MOFCOM to somehow "conduct analyses of the trends between the
first quarter of 2017 and the first quarter of 2018". In any case, MOFCOM addressed the argument concerning
data from the first half of 2018 in the following manner: "the semi-annual report data of some listed
companies relating to the domestic industry for January-June of 2018 submitted by relevant interested parties
exceeded the scope of injury POI, and was only the data of individual domestic companies, which cannot be
regarded as evidence for non-injury of domestic industry". (MOFCOM's final determination (Exhibit JPN-5.b),
p. 50).
348 Japan's first written submission, para. 360.
349 China's first written submission, para. 504.

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period, namely the first quarter of 2018, a number of economic indices declined with varying
degrees.350
7.228. We have already found that MOFCOM erred in its evaluation of certain individual ec onomic
indices, namely market shares, capacity utilization, and ending inventory . We do not consider it is
necessary, for the purpose of securing a positive solution to the dispute, to also make findings on
Japan's argument concerning MOFCOM's alleged failure to explain why economic factors showing
negative trends supported the conclusion of material injury given other positive developments in the
state of the domestic industry.
7.4.4 Conclusion
7.229. Based on the foregoing, we find that Japan has established that MOFCOM acted
inconsistently with Articles 3.1 and 3.4 of the Anti -Dumping Agreement because in its impact
analysis:
a. MOFCOM failed to perform an objective examination of domestic market share for the
purpose of examining the impact of subject imports on the domestic industry;
b. MOFCOM's findings on trends in sales prices were based on its erroneous price effects
consideration; and
c. MOFCOM failed to objectively examine evidence concerning capacity utilization and ending
inventory of the domestic industry, and did not provide reasoned and adequate
explanations in support of its findings concerning these economic indices.
7.5 Japan's claim concerning MOFCOM's causation determination
7.5.1 Introduction
7.230. MOFCOM began its causation analysis by noting that price is the main factor affecting product
competition and that price of imported products is an important reference factor for price negotiation
between downstream users and the domestic industry. MOFCOM recalled its findings that the overall
price of dumped imports had declined over the injury POI and had significantly depressed the price
of the domestic like products. In this connection, MOFCOM noted that the domestic industry sold
products at prices below "cost of sales", finding, furthermore, that the increase in prices from 2016
attributable to "positive policies" such as the removal of outdated production capacity did not bring
reasonable profits to the domestic industry because of the declining prices of subject imports. 351
MOFCOM also found that the increase in the volume and market share of dumped imports over the
injury POI had a negative impact on various indices reflecting the state of the domestic industry.352
Specifically, MOFCOM noted that:
During the injury POI, dumped imports occupied the market share in China t hrough
dumping, while dumped imports caused a downward pressure on the sales prices of
domestic like products, resulting in a significant squeeze on the market space of
domestic like products, and no effective release in the production capacity, a downward
trend in market share, a high level of ending inventory and low pretax profits, which
caused difficulties and pressure on the production and operation of the domestic
industry.353
Accordingly, MOFCOM found that there was a causal link between the subject i mports and material
injury to the domestic industry.354
7.231. MOFCOM then went on to examine other known factors that were potentially causing
material injury to the domestic industry, other than dumped imports, exploring, among others,

350 China's second written submission, para. 288.
351 MOFCOM's final determination (Exhibit JPN-5.b), p. 51.
352 MOFCOM's final determination (Exhibit JPN-5.b), pp. 51-52.
353 MOFCOM's final determination (Exhibit JPN-5.b), pp. 51-52.
354 MOFCOM's final determination (Exhibit JPN-5.b), p. 52.

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interested parties' submissions with respect to the impacts of increased nickel prices and
environment protection regulations.
a. MOFCOM found that while in circumstances of growing demand, an increase in the price
of nickel could reasonably be expected to be passed through to the domestic like products,
"the price of domestic like products was even lower than the cos t during the injury POI"
due to the price depression caused by subject imports. MOFCOM also found that the price
of domestic like products containing nickel decreased when the price of nickel increased.
Accordingly, MOFCOM concluded that the increase in nickel price did not refute the causal
link between subject imports and material injury.355
b. MOFCOM found that "the total period expenses of the five domestic production companies
including environmental protection expenses did not increase significantly durin g the
injury POI". Noting that there was no evidence showing that strict environmental standards
caused material injury to the domestic industry, MOFCOM found that this factor did not
refute the causal link between subject imports and material injury.356
7.232. Japan argues that MOFCOM's causation analysis was inconsistent with Articles 3.1 and 3.5
of the Anti-Dumping Agreement based on the following grounds:
a. As MOFCOM's causation analysis was based on its price effects and impact analyses that
were themselves inc onsistent with Articles 3.1, 3.2 , and 3.4 of the
Anti-Dumping Agreement, the causation analysis is, as a consequence, inconsistent with
Article 3.1 and the first sentence of Article 3.5 of the Anti -Dumping Agreement357
(consequential violation argument).
b. As MOFCOM failed to take into account certain evidence pertaining to the trends in the
subject imports' volume, prices and market shares in its examination of the causal
relationship between subject imports and materia l injury to the domestic industry,
MOFCOM acted inconsistently with Article 3.1 and the obligation in the second sentence of
Article 3.5 for an authority to demonstrate causation "based on an examination of all
relevant evidence"358 (argument concerning all relevant evidence).
c. As MOFCOM failed to ensure that it did not attribute to the subject imports the injurious
effects of (i) the decrease in the price of nickel between May 2014 and the end of 2015,
(ii) the increase in the price of nickel after mid -2016, and (iii) stricter environmental
protection standards, MOFCOM acted inconsistently with Article 3.1 and the third sentence
of Article 3.5 of the Anti-Dumping Agreement (non-attribution arguments).359
7.233. China asserts that each ground raised by Japan challenging MOFCOM's causation analysis is
unfounded.360
7.5.2 Articles 3.1 and 3.5 of the Anti-Dumping Agreement
7.234. Articles 3.1 and 3.5 of the Anti-Dumping Agreement provide as follows:
A determination of injury for purposes of Article VI of GATT 1994 shall be based on
positive evidence and involve an objective examination of both (a) the volume of the
dumped imports and the effect of the dumped imports on prices in the domestic market
for like products, and (b) the consequent impact of these imports on domestic producers
of such products.
…

355 MOFCOM's final determination (Exhibit JPN-5.b), p. 53.
356 MOFCOM's final determination (Exhibit JPN-5.b), p. 53.
357 Japan's first written submission, paras. 387 and 394.
358 Japan's first written submission, paras. 398 and 414.
359 Japan's first written submission, paras. 419 and 437.
360 China's first written submission, para. 507.

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It must be demonstrated that the dumped imports are, through the effects of dumping,
as set forth in paragraphs 2 and 4, causing injury within the meaning of this Agreement.
The demonstration of a causal relationship between the dumped imports and the injury
to the domestic industry shall be based on an examination of all relevant evidence
before the authorities. The authorities shall also examine any known factors other than
the dumped imports which at the same time are injuring the domestic industry, and the
injuries caused by these other factors must not be attributed to the dumped imports.
Factors which may be relevant in this respect include, inter alia, the volume and prices
of imports not sold at dumping prices, contraction in demand or changes in the patterns
of consumption, trade restrictive practices of and competition between the foreign and
domestic producers, developments in technology and the export performance and
productivity of the domestic industry.
7.235. Article 3.5 requires Members to ascertain whether the dumped imports are causing injury to
the domestic industry ("causation") and, as part of that causation analysis, it also requires Members
to ensure that they do not attribute to dumped imports the injury caused by known f actors other
than the dumped imports ("non -attribution"). Specifically, the first sentence of Article 3.5 requires
that an investigating authority demonstrate that dumped imports are, "through the effects of
dumping, as set forth in paragraphs 2 and 4", causing injury. This text thus requires the authority
to bring together the findings arrived at under Articles 3.2 and 3.4 to ascertain whether "the dumped
imports are … causing injury". The second sentence of Article 3.5 requires the authority to
demonstrate the causal relationship between the dumped imports and injury "based on an
examination of all relevant evidence before [it]". The third sentence of Article 3.5 requires an
investigating authority to examine "any known factors" that are causing injury "at the same time"
as dumped imports, and ensure that it does not attribute the injury caused by those other factors
to the dumped imports. The fourth sentence of Article 3.5 lists some of the factors other than
dumped imports that "may be relevant", and makes it clear, by using the words "include, inter alia",
that the list is not exhaustive.
7.236. Article 3.5 does not set out a specific methodology for investigating authorities to follow in
order to fulfil its requirements. However, the method applied by an invest igating authority must
comport with the overarching obligation in Article 3.1 to undertake an objective examination based
on positive evidence.
7.5.3 Analysis of Japan's claims under Articles 3.1 and 3.5 of the Anti -Dumping
Agreement
7.5.3.1 Consequential violation argument
7.237. Japan argues that MOFCOM's causation analysis was inconsistent with Article 3.1 of the
Anti-Dumping Agreement and the first sentence of Article 3.5 of the Anti -Dumping Agreement
because it relied on MOFCOM's price effects and impact analyses which were themselves inconsistent
with Articles 3.1, 3.2, and 3.4 of the Anti-Dumping Agreement.361
7.238. We recall that the first sentence of Article 3.5 requires an investigating authority to
demonstrate that dumped imports are causing injury " through the effects of dumping, as set forth
in paragraphs 2 and 4"362, which indicates that the examination of causation is based, among others,
on the findings arrived at under Articles 3.2 and 3.4. We have already found that Japan has
established that MOFCOM's price effects analysis was inconsistent with Articles 3.1 and 3.2, and that
MOFCOM's impact analysis was inconsistent with Articles 3.1 and 3.4. Accordingly, we find that
Japan has established that MOFCOM's causation analysis was, as a consequence o f the preceding
inconsistencies, also inconsistent with Articles 3.1 and 3.5 of the Anti-Dumping Agreement.
7.5.3.2 Argument concerning all relevant evidence
7.239. Japan argues that MOFCOM's causation analysis was inconsistent with Article 3.1 of the
Anti-Dumping Agreement and the second sentence of Article 3.5 of the Anti -Dumping Agreement
because MOFCOM's analysis of the causal relationship between the subject imports and the material
injury to the domestic industry was not based on an objective examination of "all re levant

361 Japan's first written submission, para. 394.
362 Emphasis added.

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evidence".363 In particular, Japan contends that MOFCOM failed to take into account in its
examination of the causal relationship all relevant evidence by failing to address (a) the different
price and volume trends pertaining to different subsets of the PUC in its causation and impact
analyses, and the impact of certain subsets of the PUC on the corresponding subsets of the domestic
like product364; (b) the relative trends in the market shares of the subject imports and domestic like
products, and the "low" market share of the subject imports365; and (c) the overselling by the subject
imports and the divergence in certain year -on-year trends in the prices of the subject imports and
domestic like products.366
7.240. Japan explains that while its consequential claim (set out in section 7.5.3.1 above) is based
on the obligation prescribed in the first sentence of Article 3.5, it s claim concerning
MOFCOM's alleged failure to take into account "all relevant evidence" is based on the requirements
in the second sentence of Article 3.5.367 On its face, the text of these two sentences speaks to the
grounds for establishing the same caus al relationship. Thus, having already found that MOFCOM
failed to establish that causal relationship consistently with Articles 3.1 and 3.5 of the
Anti-Dumping Agreement as a consequence of the various flaws in MOFCOM 's price effects and
impact analyses, we do not think that it is necessary, for the purpose of securing a positive solution
to the dispute, to make additional findings with respect to the consistency of the same (already
flawed) causation findings with the same provisions.368
7.5.3.3 Non-attribution arguments
7.241. Japan argues that MOFCOM acted inconsistently with Article 3.1 and the third sentence of
Article 3.5 of the Anti -Dumping Agreement as it failed to (a) examine "any known factors" other
than subject imports causing injury to the domestic industry; an d (b) ensure that injury caused by
such factors was not attributed to the subject imports.369 In particular, Japan argues that MOFCOM
failed to conduct a proper non -attribution analysis with respect to the following factors: (i) the
decrease in the price of nickel between May 2014 and the end of 2015; (ii) the increase in the price
of nickel since the middle of 2016; and (iii) stricter environmental protection requirements.370
7.5.3.3.1 Decrease in the price of nickel from May 2014 to the end of 2015
7.242. Japan asserts that starting May 2014 until the end of 2015, the world price of nickel, and
the price of the nickel-containing 300-series products in China, declined simultaneously. According
to Japan, this indicates that the decrease in the prices of 300 -series products ove r this period in
China was caused "to a significant degree" by the decrease in nickel prices. 371 Japan argues that
because MOFCOM did not examine the relationship between the decrease in the price of nickel and
the prices of domestic like products, MOFCOM failed to conduct a non-attribution analysis involving
an objective examination based on positive evidence in respect of this factor.372 Referring to certain
statements and information concerning "fluctuation" in the pricing of nickel in the non -injury brief
and the Japanese respondents' comments on the preliminary determination, Japan contends that
the decrease in the price of nickel was "known" as a non-attribution factor to MOFCOM.373
7.243. China maintains that nothing in the record evidence indicates that the interested parties
argued that the decrease in the price of nickel between May 2014 and the end of 2015 was a factor
other than subject imports causing injury to the domestic industry.374 China also observes that while
the argument concerning decrease in nickel prices concerns developments in 2015, MOFCOM's injury

363 Japan's first written submission, paras. 395-398.
364 Japan's first written submission, paras. 401-406; second written submission, para. 236.
365 Japan's first written submission, para. 410-411.
366 Japan's first written submission, paras. 416-417.
367 Japan's response to the Panel question No. 30, paras. 118-119.
368 Moreover, we note that the majority of the facts Japan relies upon to make out its claim under the
second sentence of Article 3.5 are the same as those underlying several arguments Japan raised in the context
of its price effects and impact analyses claims, which we have already addressed in the resolution of those
claims.
369 Japan's first written submission, para. 419.
370 Japan's first written submission, para. 419.
371 Japan's first written submission, paras. 420-421.
372 Japan's first written submission, para. 423.
373 Japan's response to the Panel question No. 32, para. 127.
374 China's response to the Panel question No. 32, para. 156.

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assessment – particularly in relation to the nickel -containing 300-series products – was based on
the overall evolution of prices in the injury POI. Hence, there was no basis for MOFCOM to treat any
decrease in nickel price as an "other factor" that caused injury to the domestic industry.375
7.244. We note that pursuant to the third sentence of Article 3.5, the issue that we must address
is whether the decrease in the price of nickel between May 2014 to th e end of 2015 was a "known
factor[] other than the dumped imports which at the same time [was] injuring the domestic
industry". We recall, however, that the POI to determine the existence of dumping in this case was
1 January 2017 to 31 December 2017. Thus , the period of the decrease in nickel prices (May 2014
to end of 2015) was not part of the dumping period, and MOFCOM did not make findings on whether
subject imports were dumped during this preceding period. For this reason, we do not consider that
arguments and evidence presented by the Japanese respondents in respect of "fluctuation" in the
pricing of nickel meant that MOFCOM should have been aware that the decrease in price of nickel
between May 2014 and end of 2015 was causing injury to the domestic i ndustry "at the same time
[as the dumped imports]". Accordingly, we find that Japan has not established that MOFCOM acted
inconsistently with Articles 3.1 and 3.5 of the Anti -Dumping Agreement by failing to perform a
non-attribution analysis in respect of the decrease in nickel prices between May 2014 and the end
of 2015.
7.5.3.3.2 Increase in the price of nickel since the middle of 2016
7.245. Japan argues that MOFCOM did not perform a non-attribution analysis involving an objective
examination of positive evidence in respect of the effect of the increase in world nickel prices since
the middle of 2016. 376 Japan argues that this increase in the price of nickel could have led to a
shortage of raw materials and rising costs. According to Japan, this could have negatively a ffected
the domestic industry in one of two ways: (a) it could have caused the domestic industry to pass on
the increased costs through higher prices, thus sacrificing the domestic industry's price
competitiveness and sales volume; or (b) it could have caused the domestic industry to absorb the
increased costs to maintain price -competitiveness by decreasing their profit margins. 377 Japan
contends that some of MOFCOM's observations in its evaluation of the increase in nickel prices were
either contradicted by, or were otherwise not rooted in, record evidence. Specifically, Japan contends
that MOFCOM's finding that the prices of nickel -containing domestic products declined when the
price of nickel increased contradicts record evidence, as prices of the domestic like products as a
whole as well as domestic like products of the nickel-containing 300-series rose after 2016.378 Japan
also argues that MOFCOM did not substantiate its finding that the price of domestic like products
was even lower than the costs with any record evidence.379 On this basis, Japan argues that MOFCOM
failed to fulfil the requirements of Articles 3.1 and 3.5 in its evaluation of the increase in price of
nickel following 2016.
7.246. China argues that MOFCOM did not find that the increase in the price of nickel caused injury
to the domestic industry, and was hence not required to carry out a non -attribution analysis in
respect of this factor. 380 China argues that MOFCOM properly reasoned that while nickel price
increases should normally be passed throug h to domestic like products when domestic demand
grows, the investigation showed that the price of domestic like products decreased as the price of
nickel increased, and was lower than the domestic industry's cost of production during the injury
POI. For MOFCOM this demonstrated that the increase in nickel prices did not cause injury to the
domestic industry.381 Relying on certain findings of the panel in EU – Fatty Alcohols (Indonesia),
China argues that by demonstrating the persistence of injury during par ts of the injury POI when
the price of nickel did not increase, MOFCOM adequately demonstrated that dumped imports caused
injury to the domestic industry regardless of the increase in price of nickel.382 China also argues that
Japan's assertion that the prices of 300-series domestic like products continued to rise since 2016

375 China's second written submission, paras. 337-338.
376 Japan's first written submission, para. 430.
377 Japan's first written submission, para. 426.
378 Japan's first written submission, para. 427.
379 Japan's first written submission, para. 428.
381 China's first written submission, para. 575.
382 China's first written submission, para. 576 (referring to Panel Report, EU – Fatty Alcohols
(Indonesia), para. 7.179).

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is factually incorrect, as there was a decrease in such prices in the first quarter of 2018 relative to
the first quarter of 2017.383
7.247. In the final determination, MOFCOM found that changes in the price of nickel affect
"production and operation" of the domestic industry, but the price of nickel is "not the only factor
affecting the operation of the companies".384 MOFCOM explained:
In the context of sustained and steady growth in domestic mar ket demand, the price
fluctuations of raw materials should be reasonably passed through to the price changes
of domestic like products. However, as the foregoing analysis shows, the price of
domestic like products was even lower than the cost during the in jury POI, due to the
significant price depression caused by dumped imports. The data show that, with the
increase in the price of nickel that is a raw material, the price of corresponding
nickel-containing products did not rise but declined.385
Based on the foregoing, MOFCOM upheld its preliminary finding that the "rise in raw material prices
could not refute the causal link between the dumped imports and the material injury of [the]
domestic industry".386
7.248. We note that a key pillar in MOFCOM's evaluation of the effect of the increase in nickel prices
on the domestic industry was its finding that the price of the domestic like products was lower than
the cost of production "due to the significant price depression caused by dumped imports". We recall,
however, that we have found that MOFCOM's finding of price depression did not involve an objective
examination of positive evidence, and was inconsistent with Articles 3.1 and 3.2 of the
Anti-Dumping Agreement. By relying on its flawed price depression findings in t he way set out
above, MOFCOM's evaluation of the impact of increased nickel prices on the domestic industry was,
as a consequence, also tainted and, therefore, inconsistent with Articles 3.1 and 3.5 of the
Anti-Dumping Agreement.
7.249. We note, furthermore, that as Japan contends, the final determination does not refer to the
record evidence MOFCOM relied upon to find that "the price of domestic like products was even lower
than the cost during the injury POI". Moreover, MOFCOM's final determination does not specify the
magnitude of the difference s in the prices and costs of the domestic like products, nor the timing
and duration of the alleged differences observed within the injury POI . In the absence of this
information, there is, in our view, no objective basis in the published determinations for MOFCOM to
have established that the price of domestic like products was "even lower than the cost during the
injury POI".387 We therefore consider that MOFCOM's finding that "the price of domestic like products
was even lower than the cost during the injury POI" was not based on an objective examination of
positive evidence.
7.250. Japan also challenges MOFCOM's finding that "with the increase in the price of nickel that is
a raw material, the price of corresponding nickel -containing products did not rise but declined".
Japan contends that this finding is not supported by record evidence, given that, according to Japan,

383 China's first written submission, paras. 578-579.
384 MOFCOM's final determination (Exhibit JPN-5.b), p. 53.
385 MOFCOM's final determination (Exhibit JPN-5.b), p. 53.
386 MOFCOM's final determination (Exhibit JPN-5.b), p. 53.
387 We also note that while China asserts that the information concerning pricing and costs of the
domestic like products that formed the basis of this finding was contained in "Section IV of the confidential
questionnaires lodged by the domestic producers", China did not furnish this information before us despite our
explicit request for China to do so. (China's response to Panel question No. 50, paras. 105-106 (referring to
MOFCOM's questionnaire for the domestic producers (Exhibit JPN-11.b), pp. 30 and 33)). We note that China
refers to MOFCOM's questionnaire for domestic producers, which inter alia contained questions concerning the
domestic industry's costs and prices, in identifying the basis for MOFCOM's price-below-cost finding. However,
we agree with Japan that the document that China points to only shows the questions that MOFCOM asked the
domestic producers but not the responses, and the fact that such questions were asked does not establish that
domestic sales prices were lower than the costs for all or any of the domestic producers. China also asserts
that pursuant to Article 3.10 of the DSU, the good faith of China's submission that MOFCOM made the relevant
finding based on information contained in the questionnaire responses should not be questioned. In this
regard, we agree with Japan that Article 3.10 of the DSU does not contain a requirement for panels to accept
as being valid any factual assertion made by a party without any record evidence substantiating that assertion.
(Japan's comments on China's response to Panel question No. 50, para. 67).

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the price of nickel-containing 300-series domestic like products rose after 2016.388 China contends,
in response, that MOFCOM's finding was based on developments concerning prices of 300-series and
200-series nickel products from 2014 to 2017 and from January -March 2017 to
January-March 2018.389
7.251. We note that, contrary to China's assertion, the final determinati on does not specify that
MOFCOM's finding was based on developments concerning prices of 300-series and 200-series nickel
products from 2014 to 2017 and from January -March 2017 to January-March 2018. Moreover, we
note that the relevant data concerning pric es of 300-series and 200-series domestic like products
did not distinguish between product categories. As we have found in section 7.3.3.2.4 above,
MOFCOM failed to establish that the prices of product categories were comparable. 390
MOFCOM's failure to do so implies that MOFCOM 's comparison of prices of products belonging to a
certain grade at two different points of time was not objective. This is because any change that
MOFCOM observed in the prices of products of a particular grade at two points in time may have
been an outcome of a change in the proportion of product categories within the set of products
belonging to that grade. Such an analysis would therefore not constitute an objective examination
of the relationship between nickel prices and the prices of the domestic like products. Accordingly,
it would also not be adequate for a proper non -attribution analysis in respect of nickel prices. We
therefore consider that MOFCOM's finding that "with the increase in the price of nickel that is a raw
material, the price of corresponding nickel -containing products did not rise but dec lined" was not
reasonably and adequately explained.
7.252. China argues that even if MOFCOM had concluded that the increase in the price of nickel
caused injury to the domestic industry, by demonstrating the persistence of injury notwithstanding
the prices of nickel, MOFCOM carried out a non-attribution analysis consistent with Article 3.5 of the
Anti-Dumping Agreement.391 In making this argument, China relies on the following passage of the
panel report in EU – Fatty Alcohols (Indonesia), which, in China's view, applies mutatis mutandis to
the present case:
Article 3.5 does not prescribe a particular methodology for separating and distinguishing
the injurious effects of the dumped imports from other known factors.
The EU authorities assessed the impact of the dumped imports on the domestic industry
during periods when the economic crisis was not affecting the industry, and found
downward trends during those periods. In our view, this provided a sufficient basis for
them to consider the impact of the dumped imports on the domestic industry and assess
whether they were causing injury independently of the effects of the crisis. …
[T]he EU authorities inferred – both from the decline in the domestic industry's market
share in the face of the dumped imports before the crisis, and from the persistence of
this reduced market share after the crisis – that the dumped imports largely contributed
to material injury suffered by the domestic industry regardless of the ec onomic crisis.
We do not consider this conclusion to be unreasonable.392
7.253. As we understand it, this extract reveals that the panel in EU – Fatty Alcohols
(Indonesia) found that the EU authorities had undertaken a reasonable non-attribution analysis
because they had demonstrated that the subject imports had a negative impact on the domestic
industry during the periods when the "other known factor" – i.e. the economic crisis – was not
affecting the domestic industry. In reaching this conclusion, the pa nel specifically referred to the
following explanation the EU authorities had provided in support of their findings:
[T]he investigation showed that the improvement [ after the crisis] did not allow the
recovery of the Union industry which was far from its economic situation that prevailed
at the beginning of the period considered. Furthermore, as mentioned in recital 89,
2008, just before the financial crisis started, was the year with the highest increase in

388 Japan's first written submission, para. 427.
389 China's response to Panel question No. 51, para. 108.
390 We recall that the subject imports and domestic like products, including products belonging to each
product grade, comprised of three product categories: stainless-steel billets (slabs), stainless-steel coils, and
stainless-steel plates. In section 7.3.3.2.4 above, we conclude that MOFCOM's finding that there was no price
comparability issue in relation to product categories was inconsistent with Articles 3.1 and 3.2 of the
Anti-Dumping Agreement.
391 China's first written submission, para. 576.
392 Panel Report, EU – Fatty Alcohols (Indonesia), para. 7.179. (emphasis original; fns omitted)

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dumped imports from the countries concerned and the sharpest decrease in sales
volume of the Union industry. After that year the Union industry did not recover and
the dumped imports continued to be massively present in the Union market. For these
reasons it is clear that, regardless of other factors, dumped imports largely contributed
to the material injury suffered by the Union industry during the IP.393
China maintains that MOFCOM demonstrated the persistence of injury regardless of the price of
nickel, and hence carried out a proper non -attribution analysis in respect of this factor just as the
EU authorities were found to have done in EU – Fatty Alcohols (Indonesia). We note, however, that
China has not referred to anything in MOFCOM 's final determination to indicate that, like the
EU authorities in EU – Fatty Alcohols (Indonesia), MOFCOM actually considered and pursued this line
of analysis.394 Thus, in the circumstances of the stainless steel investigation, we find China's reliance
on the panel report in EU – Fatty Alcohols (Indonesia) is inapposite.
7.254. In summary, we find that Japan has established that MOFCOM's conclusion that the increase
in the price of nickel did not break the causal link between the subject imports and material injury
to the domestic industry was inconsistent with Articles 3.1 and 3.5 of the Anti-Dumping Agreement
because: (a) MOFCOM's finding that "the price of domestic like products was even lower than the
cost during the injury POI" was not based on an objective examination of positive evidence ; and
(b) MOFCOM's finding that the price of nickel-containing products did not rise but declined with the
increase in the price of nickel was not reasonably and adequately explained.
7.5.3.3.3 Stricter environmental protection requirements
7.255. Japan argues that despite acknowledging that "investment in environmental protection will
increase the costs and expenses" of the domestic industry, MOFCOM did not objectively examine the
evidence submitted by the interested parties concerning the impact on the domestic industry of the
cost increases associated with the adoption of stricter environmental standards. 395 This evidence
included (a) the Environmental Protection Tax Law that had become effective as of 1 January 2018
and that replaced the pollutant discharge fees with an environment protection tax; and (b) the 2017
annual report of a Chinese steel producer named Gansu Jiu whi ch stated, inter alia, that stricter
environmental protection standards would cause it to "face enormous pressure on environmental
protection".396 Japan argues that MOFCOM found that there was no evidence that strict
environmental standards caused material injury to the domestic industry without addressing this
evidence.397 Japan asserts that while MOFCOM noted that the domestic industry's total expenses did
not increase significantly during the injury POI, MOFCOM did not separately examine cost increases
associated with stricter environmental protection standards, and did not explain how these increases
did not negatively affect the domestic industry.398
7.256. China argues that contrary to Japan's submission MOFCOM did, in fact, specifically find that
environmental protection expenses did not increase, and there was no evidence su ggesting the
opposite.399 China argues that the 2017 annual report of a Chinese stainless -steel company that
Japan relies on merely refers to "environment protection pressures" without mentioning specific

393 Panel Report, EU – Fatty Alcohols (Indonesia), para. 7.179. (emphasis added)
394 In fact, in its impact analysis under Article 3.4 of the Anti-Dumping Agreement, MOFCOM
emphasized the "significant downward trend" in certain indices after 2017, i.e. in the period coinciding with the
increase in nickel prices, when weighing the indices that displayed a positive trend over the injury POI against
developments that were negative for the domestic industry. In this respect, MOFCOM states that:
In addition, the Investigation Authorities noted that, first, under the circumstance of the
growing trend of domestic demand, the domestic industry expanded its production scale,
and some indices such as production capacity, production output, and sales volume saw a
certain increase, but the market share of domestic industry saw an overall decline, and
indices such as utilization of capacity, sales revenue, return on investment and pretax
profits had a significant downward trend after 2017.
(MOFCOM's final determination (Exhibit JPN-5.b), p. 50 (emphasis added))
395 Japan's first written submission, para. 433.
396 Japan's first written submission, para. 432 (referring to Non-injury brief (revised) (Exhibit JPN-8.b (BCI)),
p. 56).
397 Japan's first written submission, para. 434.
398 Japan's first written submission, para. 433.
399 China's first written submission, para. 580.

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additional costs. China also submits that the new la w that Japan refers to entered into force
on 1 January 2018, i.e. towards the end of the injury POI, and thus could not have explained the
injury observed throughout the injury POI .400 China argues that having reviewed the evidence,
MOFCOM found that stricter environmental standards did not cause injury, and was thus not obliged
to carry out any additional non-attribution analysis.401
7.257. We note that before MOFCOM, Japanese interested parties asserted that stricter Chinese
environmental protection standards (in cluding through the introduction of a new environmental
protection tax law) meant that steel enterprises were not only facing pressure from rising costs, but
also from higher environmental management requireme nts.402 In support of this assertion, the
interested parties pointed to certain statements made in the annual report of one of the Chinese
producers, where the producer referred to the effects of the environment protection requirements.403
Specifically, this producer noted in its report how as an effect of these requirements the "cost of raw
materials and fuel rose significantly and the comprehensive profitability of [its] products was
challenged".404
7.258. In addressing these submissions regarding the impact of environmental protection on the
domestic industry, MOFCOM stated as follows:
[R]egarding the impact of environmental protection, the investment in environmental
protection will increase the cost and expenses of the enterprise. However, the total
period expenses of the five domestic production companies i ncluding environmental
protection expenses did not increase significantly during the injury POI. There is no
evidence to show that strict environmental standards caused material injury to the
domestic industry. The impact of environmental protection cannot refute the causal link
between dumped imports and material injury to domestic industry. In the final
determination, the Investigating Authority decided to maintain the preliminary
determination.405
7.259. Thus, MOFCOM began its evaluation of the interested parties' submission by acknowledging
that investment in environmental protection would increase costs and expenses. MOFCOM then
proceeded to note that in the present case, "the total period expenses of the five domestic production
companies including environment al protection expenses did not increase significantly during the
injury POI". In other words, MOFCOM found that, whatever the actual costs of environmental
protection were to the domestic industry, those costs did not push the industry 's total expenses
significantly higher. According to China, this finding was based on record evidence of the total
expenses of domestic producers, information that was provided in indexed form in the
non-confidential versions of the questionnaire responses of the domestic prod ucers. These data do
not separately identify environmental expenses incurred by any domestic producer. However, the
information on total costs includes data with respect to Gansu Jiu, the company whose annual report
was relied upon by interested parties. 406 We see nothing in MOFCOM 's finding that total industry
expenses (including environmental protection expenses) did not increase significantly to be
contradicted by this record evidence.
7.260. Having found that the domestic industry's total expenses, including environmental
protection expenses, did not significantly increase, MOFCOM then concluded that there " is no
evidence to show that strict environmental standards caused material injury to the domestic
industry". Considering the submissions and evidence provided by the interested parties to MOFCOM
(which we note pertained to the situation of one of the Chinese domestic producers) focused on the
effect of environment protection on the cost of raw material and fuel, it was, in our view, reasonable
for MOFCOM to focus on the domestic industry's total cost in addressing this issue.
7.261. Based on the foregoing, we find that Japan has failed to establish that MOFCOM failed to
objectively examine the evidence submitted by the interested parties concerning the impact on the

400 China's first written submission, para. 581.
401 China's first written submission, para. 582.
402 Non-injury brief (revised) (Exhibit JPN-8.b (BCI)), p. 56.
403 Non-injury brief (revised) (Exhibit JPN-8.b (BCI)), p. 56.
404 Non-injury brief (revised) (Exhibit JPN-8.b (BCI)), p. 56.
405 MOFCOM's final determination (Exhibit JPN-5.b), p. 53.
406 China's response to Panel question No. 50, para. 112.

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domestic industry of the cost -increases associated with the adoption of stricter environmental
standards, and thereby acted inconsistently with Articles 3.1 and 3.5 of the
Anti-Dumping Agreement.
7.5.4 Overall conclusion
7.262. Based on the foregoing, we find that Japan has established that MOFCOM 's causation
analysis was inconsistent with Articles 3.1 and 3.5 of the Anti-Dumping Agreement for the following
reasons:
a. because it relied upon MOFCOM's price effects and impact analyses, which we have found
were inconsistent with Articles 3.1, 3.2, and 3.4 of the Anti-Dumping Agreement;
b. because, for reasons set out in paragraph 7.254 above, MOFCOM's analysis in respect of
the increase in nickel prices since mid -2016 was not based on an objective examination
of positive evidence, and was not reasonably and adequately explained.
7.6 Japan's claims concerning MOFCOM's confidential treatment of certain information
7.6.1 Introduction
7.263. In the underlying investigation, the applicant redacted the names of four companies from
the application on grounds of confidentiality. These companies were Chinese domestic producers
that the applicant excluded from the domestic industry because they were importers of the product
under consideration, or were related to companies that had started to produce the product under
consideration in a country und er investigation (Indonesia). The applicant provided its reasons for
requesting confidentiality in the non-confidential version of the application, which stated as follows:
According to the provision of Article 8 of Provisional Rules for Filing Antidumping
Investigations, if domestic producer is related to exporter or importer or if it itself is an
importer of the products under investigation, it may be excluded from the domestic
industry. [Enterprise Name]4 and [Enterprise Name]5 are importers of products under
investigation, and [Enterprise Name] 6 and [Enterprise Name] 7 started production of
products under investigation in Indonesia. Therefore, the production outputs of these
four companies are excluded from the total production of the domestic like product in
Table 1 above. For relevant proof documents, please see Attachment 6.407

4 The data in [] is names of companies excluded from domestic industries. It involves the trade
secrets of enterprises, and is applied for confidentiality.
5 The data in [] is names of companies excluded from domestic industries. It involves the trade
secrets of enterprises, and is applied for confidentiality
6 The data in [] is names of companies excluded from domestic industries. It involves the trade
secrets of enterprises, and is applied for confidentiality.
7 The data in [] is names of companies excluded from domestic industries. It involves the trade
secrets of enterprises, and is applied for confidentiality.

7.264. Attachment 6, referred to in the extract above, states as follows:
The contents of this [appendix] are the evidence materials of the enterprises excluded
from the domestic industry as stated in the text of the Application, which prove that
these enterprises are affiliated with the exporters or importers, or ar e themselves
importers of the products under investigation, including screenshots of specific import
data, corporate structure charts and related reports, etc.
As this [appendix] involves commercial secrets of the relevant enterprises, we request
to keep it confidential.408

407 Application (Exhibit JPN-6.b), pp. 15-16.
408 Non-confidential version of attachment 6 to the application (Exhibit CHN-13.b).

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7.265. Thus, the applicant explained that (a) the redacted data were the names of companies that
it excluded from the domestic industry for being either importers of the product under consideration,
or a producer of the product under consideration in Indonesia; and (b) the names of the companies
involved trade secrets of the companies in question. On 22 March 2019, MOFCOM issued the
preliminary determination in which MOFCOM disclosed the names of two of these four companies.
Japan asserts, and China does not deny, that MOFCOM did not disclose the names of two other
companies. The parties agree that the names of all four companies were disclosed in the final
determination.409
7.266. Japan challenges MOFCOM's decision to treat this redacted information as confidential,
claiming that it is inconsistent with Articles 6.5 and 6.5.1 of the Anti-Dumping Agreement.410
7.6.2 Analysis of Japan's claim under Article 6.5
7.267. Japan claims that MOFCOM acted inconsistently with Article 6.5 because it granted, without
good cause being shown, the applicant 's request to redact the names of four companies from the
application on grounds of confidentiality . In its first written submission, Japan argue d that the
applicant's explanation that the company names pertained to the domestic industries, and were
redacted because they were "trade secrets of enterprises", did not show "good cause" because411:
a. the company names were public information;
b. although, in general, business activities "related to the exporters or importers or are
themselves importers of the allegedly dumped product" might be confidential information
deserving of protection, the Application d id not contain the kind of detailed information
that might be deserving of confidential treatment;
c. the business activities of these companies (i.e. they were importers, or related to
exporters or importers) were, in any case, disclosed, which would undermine the
applicant's position regarding the confidential treatment of the company names on account
of their business activities; and
d. MOFCOM itself did not treat the company names as confidential during the investigation.
7.268. During the course of these proceedings, Japan clarified that its claim is focused on
MOFCOM's decision to accept the applicant's request for confidential treatment of the company
names at the time the application to initiate an anti-dumping investigation against subject imports
was filed with MOFCOM.412 Thus, according to Japan, "[w]hether or not MOFCOM eventually disclosed
the names to the Japanese Respondents subsequently is irrelevant in finding whether MOFCOM failed
to assess good cause at the time it granted confidential treatment".413
7.269. Relying upon several news articles from the internet, Japan contends that the business
activities of the relevant companies were public information at the time the application was filed.
However, Japan clarifies that it is not arguing tha t "MOFCOM by itself was required to have
'google-searched' the relevant news article … before its decision" to accept the confidential treatment
requested by the applicant. 414 Instead, Japan submits that it is for the party submitting the
information to furnish reasons justifying such confidential treatment, and for the investigating
authority to assess those reasons, and scrutinize the party's showing in order to determine whether
the submitting party has sufficiently substantiated its request. 415 Japan argues that the reasons

409 China's first written submission, para. 720; Japan's first written submission, para. 507.
410 Japan also makes conditional claims under Articles 6.5 and 6.5.1, wherein Japan contends that if
China seeks to justify either the insufficient disclosure of the "essential facts under consideration" pursuant to
Article 6.9, or the inadequacy of the public notice under Articles 12.2 and 12.2.2, on the ground that the
information not disclosed in those documents was confidential, we must examine whether confidential
treatment of that information was justified under Articles 6.5 and 6.5.1. We address these conditional claims to
the extent necessary when we focus on Japan's claims under Articles 6.9, 12.2, and 12.2.2.
411 Japan's first written submission, paras. 504-507.
412 Japan's response to Panel question No. 53(a), para. 22. See also Japan's response to Panel question
No. 37, para. 143.
413 Japan's response to Panel question No. 37, para. 143.
414 Japan's response to Panel question No. 53(b), para. 23.
415 Japan's response to Panel question No. 53(b), para. 23.

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given in the application for the confidential treatment were insufficient for MOFCOM to find that there
had been a showing of "good cause".
7.270. China submits that any disclosure of the company names in the underlying investigation
would have revealed which exact companies were related to an exporter or an importer, or were
themselves importers of the product under consideration.416 China submits that information
pertaining to this kind of business activity can qualify as a trade secret, and is by nature
confidential.417 Thus, China contends that when any information is by nature confidential, the party
seeking confidential treatment can show "good cause" by establ ishing that the information fits into
the description provided in Article 6.5. China contends that the applicant showed good cause on this
basis because:
a. it explained that the company names were of those excluded from the domestic industry,
and that it involved trade secrets of the companies concerned418; and
b. MOFCOM's decision to subsequently not treat these company names as confidential did
not undermine its original assessment regarding the confidential treatment of this
information.419
7.271. In resolving Japan' s claim, we must examine whether MOFCOM was justified under
Article 6.5 in accepting the confidential treatment of the company names at the time the application
requesting the initiation of the anti-dumping investigation was filed with MOFCOM.
7.272. Article 6.5 Anti-Dumping Agreement states as follows:
Any information which is by nature confidential (for example, because its disclosure
would be of significant competitive advantage to a competitor or because its disclosure
would have a significantly ad verse effect upon a person supplying the information or
upon a person from whom that person acquired the information), or which is provided
on a confidential basis by parties to an investigation shall, upon good cause shown, be
treated as such by the autho rities. Such information shall not be disclosed without
specific permission of the party submitting it.420
7.273. Article 6.5 permits investigating authorities to treat as confidential information (a) which is
by nature confidential or (b) which is provided on a confidential basis by parties to an investigation,
upon good cause shown . We agree with previous DSB reports that the requirement to show good
cause applies to these two situations, which may in practice overlap. 421 Moreover, while Article 6.5
does not define good cause, or set out how good cause must be established, we agree with previous
DSB reports that the good cause alleged must constitute a reason sufficient to justify the withholding
of information from both the public and from the other parties inter ested in the investigation, who
would otherwise have a right to view this information under Article 6 of the
Anti-Dumping Agreement.422 We also agree with previous panels that have taken the view that
Article 6.5 does not require any particular form or mean s of showing good cause, or any particular
type or degree of supporting evidence. 423 Instead, the type of evidence and the extent of
substantiation an investigating authority must require will depend on the nature of the information
at issue and the particu lar "good cause" alleged. 424 Ultimately, the obligation remains with the
investigating authority to examine objectively the justification given for the need for confidential
treatment.425
7.274. In this case, MOFCOM accepted the applicant's request for confidential treatment on the
grounds set out in the application without explanation or giving reasons. MOFCOM's conduct

416 China's first written submission, paras. 700 and 707.
417 China's first written submission, para. 704.
418 China's first written submission, para. 715.
419 China's first written submission, paras. 717-718.
420 Fn omitted.
421 Appellate Body Report, EC – Fasteners (China), paras. 536-537.
422 Appellate Body Report, EC – Fasteners (China), para. 537.
423 Panel Report, EU – Footwear (China), para. 7.728.
424 Appellate Body Report, EC – Fasteners (China), para. 539.
425 Appellate Body Report, EC – Fasteners (China), para. 539.

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suggests that it implicitly accepted that the reasons given by the applicant demonstrated there was
"good cause" to treat the relevant information confidentially. In our view, the mere fact that MOFCOM
did not make an explicit finding with respect to the merits of the request for confidential treatment
does not necessarily mean that it acted inconsistently with Article 6.5. As we read it, Article 6.5 does
not impose a specific requirement on an investigating authority to set out a reasoned decision in its
published report with respect to an interested party's claim of "good cause" in every factual situation.
Just as Article 6.5 does not prescribe how an interested party must establish good cause, so too is
it silent about how an investigating authority must objectively determine whether a request for
confidential treatment is warranted. Given the multitude of facts and data presented during an
investigation, we cannot exclude that there may be situations when, in the light of the information
at issue, and the good cause alleged by the interested party, an investigating authority may be
found to have objectively examined good cause by implication, simply by accepting into the record
and making available a redacted submission which contains a sufficient explanation of the alleged
good cause. Such conduct would signal that the investigating authority had accepted and adopted
the stated reasons for the confi dential treatment of information as its own. In our view, an
investigating authority acting in this way would not have acted inconsistently with Article 6.5 if the
objective basis of its decision to accept the request for confidential treatment without fur ther
explanation, is apparent from the interested party's explanation of good cause.
7.275. Turning to the facts of MOFCOM's investigation, we note from the relevant parts of the
application, quoted in paragraph 7.263 above, that the application redacted the names of certain
companies but described the business activities of these companies. In particular, the application
stated that " [Enterprise Name] [fn] and [Enterprise Name] [fn] are importers of products under
investigation, and [Enterprise Name] [fn] and [Enterprise Name] [fn] started production of products
under investigation in Indonesia." The footnotes explained that the redacted information were "the
names of companies excluded from domestic industries", and that these were the "trade secrets" of
these companies.
7.276. Japan contends that the names of the companies were public information, and thus there
could be no good cause to treat these names as confidential. However, considering that the business
activities of the companies were disclosed by the applicant, revealing the company names would
mean that their specific business activities would also be disclosed. Japan agrees that the bu siness
activities of a company, specifically whether it is related to exporters or importers, or is itself an
importer of the alleged ly dumped product, may constitute confidential information deserving of
protection.426 However, Japan contends that the appl ication does not contain the "kind of detailed
information that might be deserving of confidential treatment" because it contains only broad
descriptions, such as "importers of products under investigation" and "start production of products
under investiga tion into production in Indonesia", none of which are confidential in nature .427
Specifically, Japan maintains that if the applicant believed that the business activities of the relevant
companies should be treated as confidential, the applicant should have redacted and summarized
the relevant information pertaining to the business activity of the companies, rather than redacting
only the names of the relevant companies.428
7.277. We do not see why the applicant should have redacted more information than it considered
necessary to protect the relevant trade secrets, given that the redaction of company names was
sufficient to achieve that objective. Considering, as Japan agrees, that the business activities of the
companies in question may constitute confidential inf ormation, and that disclosure of the company
names would have revealed the business activities of the specific companies, we do not see why the
categorization of the redacted information (i.e. the company names) as a trade secret was
unreasonable at the time MOFCOM accepted the request.429 On the contrary, when considered in the
light of the surrounding facts, in our view, the explanations provided in the application reveal that

426 Japan's first written submission, para. 506.
427 Japan's first written submission, para. 506.
428 Japan's first written submission, para. 505.
429 In reaching this conclusion, we have taken note that Japan's claim focuses on MOFCOM's initial
treatment of the company names in the application, and that whether or not MOFCOM eventually disclosed the
names to the Japanese respondents subsequently is irrelevant in finding whether MOFCOM failed to assess
good cause at the time it granted confidential treatment. (Japan's response to Panel question No. 37,
para. 143). We also note that Japan has not suggested that MOFCOM knew, or had any basis to know, at the
time the application was made, that the business activities of these specific companies were public information.

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MOFCOM had an objective basis to accept the request for confidential treatment w ithout further
explanation.
7.278. Based on the foregoing, we find that Japan has not established that MOFCOM acted
inconsistently with Article 6.5 of the Anti-Dumping Agreement when it accepted, by implication, that
the good cause which the applicant presented justified the redaction of the company names at the
time it made its application.
7.6.3 Analysis of Japan's claim under Article 6.5.1
7.279. Japan claims that MOFCOM acted inconsistently with Article 6.5.1 because it accepted the
applicant's request for the confidential treatment of company names without requiring the applicant to:
a. provide a non-confidential summary of the redacted information; and
b. describe the "exceptional circumstances" that would justify the applicant's failure to
provide such a summary or provide a statement of the reason why summarization was not
possible.
7.280. Noting that the applicant explained that the redacted information were names of companies
excluded from the domestic industry, and that the information involved trade secrets of enterprises,
China asserts that these explanations were non -confidential summaries called for under
Article 6.5.1.430
7.281. Article 6.5.1 of the Anti-Dumping Agreement provides as follows:
The authorities shall require interested parties providing confidential information to
furnish non -confidential summaries thereof. These summaries shall be in sufficient
detail to permit a reasonable understanding of the substance of the information
submitted in confidence. In exceptional circumstances, such parties may indicate that
such information is not susceptible of summary. In such exceptional circumstances, a
statement of the reasons why summarization is not possible must be provided.
7.282. Article 6.5.1 thus applies in two scenarios:
a. First, investigating authorities must require interested parties providing confidential
information to furnish non-confidential summaries.
b. Second, in exceptional circumstances, the parties may indicate that the information is not
susceptible of summary, and in such circumstances must provide a statement of the
reasons why summarization is not possible.
7.283. Under Article 6.5.1, the requirement to describe the exceptional circumstances justifying the
failure to provide a non -confidential summary, or the requirement to provide a statement of the
reason why summarization was not possible, arises only when a non -confidential summary is not
provided. China contends that such a summary was provided in this case, and thus, according to
China, the question of describing the exceptional circumstances that just ify failure to provide a
non-confidential summary does not arise.
7.284. With respect to the sufficiency of the non -confidential summary, Article 6.5.1 requires that
the non-confidential summary "be in sufficient detail to permit a reasonable understanding of the
substance of the information submitted in confidence". The sufficiency of the information provided
will depend on the confidential information that is at issue , but must permit a reasonable
understanding of the substance of the information withheld in order to allow the other parties to the
investigation an opportunity to respond and defend their interests .431 The confidential information
at issue in this case are company names, which were redacted to avoid disclosing the business
activities of the relevant companies.

430 China's first written submission, paras. 728-729.
431 Appellate Body Report, EC – Fasteners (China), para. 542.

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7.285. We note, as set out in paragraph 7.275 above, that the applicant disclosed in the
non-confidential summary of the application the business activities of the companies whose names
were redacted, specified that the redacted information were the "names of companies", and also
that these companies were excluded from the domestic industry. Attachment 6 of the application,
quoted in paragraph 7.264 above, explained that these enterprises were affiliated with the exporters
or importers or were themselves importers of the product concerned. Considering the names of the
companies were confidential, the non -confidential summary, in our view, was sufficient to permit
the interested parties to develop a reasonable understanding of the substance of the information
submitted in confidence, namely that four domestic producers were being excluded from the
domestic industry in light of their business activities (as importers, or foreign producers of the
product concerned). Accordingly, we consider that Japan has not established that the
non-confidential summary of the confidential information in the application was inconsistent with
Article 6.5.1.
7.286. Based on the foregoing, Japan has not established that MOFCOM acted inconsistently with
Article 6.5.1 of the Anti-Dumping Agreement.
7.7 Japan's claims concerni ng the disclosure of the e ssential facts under consideration
which formed the basis for MOFCOM's decision to apply definitive measures
7.7.1 Introduction
7.287. In the underlying investigation, MOFCOM issued a "Letter Disclosing Essential Facts"
(disclosure document), 432 which Japan maintains failed to disclose certain essential facts under
consideration forming the basis of MOFCOM's decision to impose definitive measures, as required by
Article 6.9 of the Anti-Dumping Agreement. Japan specifically challenges MOFCOM's disclosure with
respect to the following aspects of MOFCOM's determination:
a. price effects analysis;
b. definition of the product under consideration;
c. cumulation analysis;
d. impact analysis;
e. causation determination; and
f. definition of the domestic industry.
7.7.2 Article 6.9 of the Anti-Dumping Agreement
7.288. Article 6.9 of the Anti-Dumping Agreement states as follows:
The authorities shall, before a final determination is made, inform all interested parties
of the essential facts under consideration which form the basis for the decision whether
to apply definitive measures. Such disclosure should take place in sufficient time for the
parties to defend their interests.
7.289. As the terms of Article 6.9 stipulate, essential facts must be disclosed before the decision
applying definitive measures is published, and such disclosure must leave enough time for interested
parties to defend their interests. Thus, in essence, Article 6.9 prescribes a rule requiring an
investigating authority to be transparent in relation to th e facts that were essential to reaching a
final determination with a view to ensuring that interested parties can defend their interests.
7.290. Essential facts are not defined in Article 6.9 or elsewhere in the Anti -Dumping Agreement.
However, we agree with previous DSB reports that have considered them to be those facts that are
significant in the process of reaching a decision as to whether or not to impose definitive

432 MOFCOM's disclosure (Exhibit JPN-18.b).

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measures433; facts that are salient for a decision to apply definitive measures, as well as those that
are salient for a contrary outcome.434 Whether a particular fact is essential depends on the nature
and scope of the substantive obligations at issue, the content of the particular findings needed to
satisfy such substantive obligations, and the factual circumstances of each case. 435 Moreover, we
also agree with a previous DSB report that the disclosure of essential facts should permit an
interested party to understand the basis for the decision to apply definitive measures and enable an
interested party to defend itself 436; and that for this reason, they must be disclosed in a coherent
way so as to permit an interested party to understand the basis for the decision to apply definitive
measures.437
7.291. Based on this understanding of Article 6.9 , we will examine whether Japan has established
that MOFCOM failed to act consistently with this provision in the underlying investigation.
7.7.3 Analysis of Japan's claims under Article 6.9
7.7.3.1 Price effects
7.292. Japan's claims regarding the lack of disclosure with res pect to MOFCOM's price effects
findings cover the following issues438:
a. MOFCOM's finding that billets (slabs), coils, and plates were part of the same category of
products.
b. MOFCOM's series-specific price effects analysis.
c. The role of "brand effects" of subject imports in MOFCOM's price analysis.
7.7.3.1.1 Disclosure regarding MOFCOM's finding that billets (slabs), coils , and plates
were "the same category of product"
7.293. In the underlying investigation, interested parties requested MOFCOM to examine price
effects separately for billets (slabs), coils, and plates.439 However, MOFCOM did not do so based on,
inter alia, its finding that billets (slabs), coils , and plates were "the same category of product". 440
MOFCOM's finding was based on its view that billets (slabs), coils , and plates have the "same basic
characteristics" and only "reasonable" price differences. 441 Japan contends that MOFCOM was
required, but failed, to disclose the factual basis for its finding that billets (slabs), coils , and plates
were "the same category of product".442
7.294. China submits that due to non-cooperation by exporters, MOFCOM's findings regarding price
differences between different grades, and between billets (slabs), coils, and plates, were made based
on "best information available".443 China contends that MOFCOM disclosed the basis for its decision
to resort to "best information available" as well as the data it used to replace the information that
was missing due to such non -cooperation.444 In particular, MOFCOM identified China customs data

433 Appellate Body Report, China – GOES, para. 240.
434 Appellate Body Report, China – GOES, para. 240.
435 Appellate Body Report, Russia – Commercial Vehicles, para. 5.220.
436 Appellate Body Report, Russia – Commercial Vehicles, para. 5.220.
437 Appellate Body Report, China – GOES, para. 240.
438 We do not separately examine submissions made by Japan in paragraphs 562-566 of its first written
submission, which are conditional arguments. In these paragraphs Japan submits that "[e]ven if MOFCOM
adequately considered the differences among series of grades, MOFCOM was obligated to disclose the facts
under consideration". Japan submits that its arguments "presuppose[]" that China did in fact examine
additional undisclosed facts relating to differences between the various grades and it maintains its submissions
only to the extent this supposition turns out to be correct. (Japan's first written submission, para. 566).
439 MOFCOM's final determination (Exhibit JPN-5.b), p. 11.
440 MOFCOM's final determination (Exhibit JPN-5.b), pp. 11-12.
441 China's response to Panel question No. 20, para. 104 (referring to MOFCOM's final determination
(Exhibit JPN-5.b), p. 12).
442 Japan's first written submission, para. 538.
443 China's first written submission, para. 771.
444 China's first written submission, paras. 774-775.

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as the best information available, and these data were publicly available.445 China submits that using
in particular Indonesian prices, which pertained to only one grade, from the China customs data,
MOFCOM found that there were no significant price differences between billets (slabs), coils , and
plates that it needed to address.446
7.295. We note that MOFCOM's conclusion that billets (slabs), coils , and plates were in the same
category of products was based on its view that billets (slabs), coils , and plates have the "same
basic characteristics" and only "reasonable" price differences. In our view, MOFCOM failed to disclose
the essential facts that it considered in arriving at this finding. In particular, in assessing the
differences between these three product categories, MOFCOM stated that due to the differences in
physical form, their "prices have reasonable differences".447 However, in the disclosure there is no
discussion of or reference to the factual basis for this statement. For instance, MOFCOM's statement
is not accompanied by any citation explaining the data supporting this finding . While we recognize
that MOFCOM used best information available to make its determination in this regard, we do not
see why that would justify the non-disclosure of the basis on which MOFCOM found reasonable price
differences between billets (slabs), coil s, and plates to exist. Thus, we find that MOFCOM failed to
disclose in a coherent way the essential facts that it considered at arriving at its finding that there
were reasonable price differences between billets (slabs), coils, or plates.
7.296. With respect to MOFCOM's finding that billets (slabs), coils , and plates had the same basic
characteristics, which focused on the non-price differences between these product categories, Japan
notes that MOFCOM explained that although there were differences in s pecific segments, uses and
customers for these product categories, these were "reasonable differences within the products of
the same category due to segment specifications". 448 In the same vein, MOFCOM also noted that
their "final usage and customer group have similarity".449 Japan contends that MOFCOM's disclosure
did not disclose any facts used as the basis for MOFCOM's analysis of "segment uses and customers"
as well as "final usage and customer groups" broken down on a product -by-product basis.450 We
note China's submission that MOFCOM disclosed the following with respect to the final usage and
customer group:
Main usages: [the product under consideration] generally has two usages. One [billets]
is the raw material for cold-rolled stainless steel. It can be manufactured into cold-rolled
stainless steel products through cold rolling processes. The other [coils/plates] is as a
finished product for direct sales. It is mainly used for vessels, containers, railway,
electric power, petroleum, petrochemical and other industries.
… The hot-rolled stainless steel plate and the hot-rolled stainless steel coil have crossed
and overlapped downstream usages in actual application, such as storage tanks, bridges
and vessels.
… [T]he usage of the domestic stainless steel billet and hot-rolled stainless steel plate
(coil) and the subject product was basically the same, and they were mainly applied in
vessels, containers, railway, power, petroleum, petrifaction and other industries. The
sales channel of the domestic stainles s steel billet and hot -rolled stainless steel plate
(coil) and the subject product was basically same, which were mainly directly sold, and
part of products were sold through trader’s agent in Chinese market. Both of them had
the same customer group, and partial domestic users purchased and used not only the
subject products, but also the domestic stainless steel billet and hot -rolled stainless
steel plate (coil).451

445 China's first written submission, para. 775.
446 China's first written submission, para. 782.
447 MOFCOM's disclosure (Exhibit JPN-18.b), p. 10.
448 Japan's second written submission, paras. 358 and 366. Japan makes these submissions in the
context of its argument challenging the disclosure with respect to the product under consideration as well as
price effects. Moreover, while MOFCOM made these specific findings in the context of defining the product
under consideration, and specifically whether billets (slabs), coils, and plates were in the same category of
products, as China notes, MOFCOM relied on these findings as part of its price effects analysis.
449 Japan's second written submission, paras. 358 and 366.
450 Japan's second written submission, paras. 358 and 366.
451 China's first written submission, para. 765 (referring to MOFCOM's disclosure (Exhibit JPN-18.b),
pp. 9-10, and 14). (emphasis omitted)

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7.297. We agree with Japan that these statements do not demonstrate that MOFCOM disclosed the
factual basis for its finding that billets (slabs), coils , and plates had the same basic characteristics.
For instance, MOFCOM states that there were "reasonable differences within the products of the
same category due to segment specifications".452 Yet, it did not disclose the relevant specifications
under consideration. Similarly, MOFCOM states that coils and plates have overlapping usages without
identifying the factual basis underlying its assertion. In this regard, we note for example that
interested parties argued before MOFCOM that shipyards for construction of ships will not turn
directly to purchasing hot-rolled stainless steel coils for replacement just because of the shortage of
hot-rolled stainless steel plates. 453 They also argued that rolling mills for processing and
manufacturing cold-rolled sheets (such as cold-rolling plants) will not purchase hot -rolled stainless
steel plates to roll cold -rolled sheets just because of the shortage in the hot -rolled stainless steel
coils market.454 Considering the arguments made by the interested parties, in our view, they would
have needed these facts to defend their interests and engage with MOFCOM's finding that billets
(slabs), coils, and plates have the "same basic character istics". In failing to disclose these facts,
MOFCOM failed to disclose the essential facts that formed the basis of its determination with respect
to price effects, specifically its finding that billets (slabs), coils, and plates were in the same category
of products.
7.298. Based on the foregoing, we find that Japan has established that MOFCOM failed to properly
disclose the essential facts forming the basis of its finding that billets (slabs), coils, and plates were
in the same category of products.
7.7.3.1.2 Disclosure regarding the series-specific price effects analyses
7.299. Japan contends that MOFCOM did not adequately disclose the factual basis for its
series-specific price effects analyses pertaining to the 300 -series, 400 -series, and other series.
Japan's complaint focuses on the lack of disclosure with respect to:
a. The import volume of dumped imports as well as the proportion of dumped imports in the
basket of dumped imports and the domestic like product in relation to the 300 -series,
400-series, and other series.
b. The relation between the increase in costs of the domestic industry for producing the
400-series and the price effects analysis.
c. The domestic sales volume of the other series for certain years of the injury POI.455
7.300. China rejects Japan's arguments.
a. With respect to import volume, China contends that because a price effects analysis does
not necessarily require an examination of the volume of dumped imports, MOFCOM was
not required to disclose in detail the volume of dumped imports by series of steel grade.456
China si milarly contends that MOFCOM was not required to disclose the series -specific
proportion of subject imports in the basket of dumped imports and domestic like
products.457 China asserts that to the extent certain facts pertaining to import volume and
proportion were considered as part of MOFCOM's price effects analysis, MOFCOM disclosed
them.458
b. Regarding the relation between the increase in costs of the domestic industry and the price
effects analysis in the 400 -series, China contends that MOFCOM found that t he prices of
the domestic like product increased but not to a level higher than its cost.459 China submits
that because the domestic prices in 2015 and 2016 were lower than in 2014, and the price

452 MOFCOM's disclosure (Exhibit JPN-18.b), p. 10; MOFCOM's final determination (Exhibit JPN-5.b),
p. 12.
453 Non-injury brief (revised) (Exhibit JPN-8.b (BCI)), p. 10.
454 Non-injury brief (revised) (Exhibit JPN-8.b (BCI)), p. 10.
455 Japan's first written submission, para. 558.
456 China's response to Panel question No. 54 (a) and (b), para. 117.
457 China's response to Panel question No. 54 (a) and (b), para. 118.
458 China's response to Panel question No. 54 (a) and (b), para. 118.
459 China's first written submission, para. 798.

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increase took place in 2017, it was logical for MOFCOM to foc us on the data in 2017. 460
MOFCOM accordingly disclosed the data for 2017.
c. With respect to the disclosure concerning the domestic sales volume in relation to the
other series, China notes that MOFCOM referred to domestic sales volume because the
domestic industry increased its domestic sales by lowering prices, which resulted in
adverse price effects.461
7.301. We will examine below MOFCOM's disclosure with respect to each of these series. In doing
so, we note that in determining whether a fact underlying MOFCOM's price effects analysis was
"essential" under Article 6.9, we will examine the nature of price effects analysis made by MOFCOM
and the facts supporting it. We note in this regard that China confirmed that MOFCOM relied on the
volume and price of s ubject imports in assessing the effect of subject imports on the prices of the
domestic like products.462
7.7.3.1.2.1 300-series
7.302. With respect to the 300-series, MOFCOM's disclosure states as follows:
Regarding the 300 -series products, during the injury POI, the prices of 300 -series
dumped imports and 300-series domestic like products both showed a downward trend,
and the price difference between the two was significantly reduced, down 72% from
2014 to 2017. In January-March of 2018, the price of 300-series dumped imports was
lower than that of 300 -series domestic like products, and the price difference was
RMB 873/ton. The total volume of 300 -series dumped imports increased from
80,000 tons in 2014 to 500,000 tons in 2017. In 2017, 300 -series dumped imports
accounted for 17% of the dumped imports and domestic like products of the same
specification, and this proportion reached 48% in January -March of 2018. The overall
price decline of the 300-series dumped imports had a comparatively great effect on the
price of do mestic like products of the same specification and as a whole. In order to
obtain and maintain certain quantities of product sales, from 2014 to 2015, the price of
300-series domestic like products was close to or lower than its sales cost; although the
price rebounded due to the positive domestic policies in 2016, as the volume of
300-series dumped imports significantly increased and the import prices continued to
decline, the prices of 300-series domestic like products declined again at the end of the
POI. The price of 300 -series dumped imports already fell below that of 300 -series
domestic like products.
The 300-series dumped imports had adverse effects on the prices of 300 -series
domestic like products.463
7.303. We note that in response to Japan's contention th at MOFCOM only partially disclosed the
volume and proportion of subject imports over the POI, China submits that MOFCOM relied on the
evolution of imports from 2014 to 2017, and it disclosed the volume of imports for those two years.
With respect to the proportion of subject imports, China similarly contends that MOFCOM disclosed
the facts pertaining to the proportion of subject imports that it relied on as part of its price effects
analysis, which were the increase in proportion from 2017 to the first quarter of 2018.464
7.304. We note that in reaching its conclusion that dumped imports of the 300 -series had adverse
effects on the prices of the domestic like product of the 300 -series, MOFCOM expressly referred to
the evolution of the volume of imports from 2014 to 2017, and the changes in the proportion of
subject imports from 2017 to the first quarter of 2018. Considering MOFCOM only relied on changes
in the proportion of subject imports from 2017 to the first quarter of 2018, we do not consider that
MOFCOM needed to disclose data pertaining to other periods of the POI. However, with respect to
subject import volume, we note MOFCOM found that "although the price rebounded due to the

460 China's first written submission, para. 798.
461 China's first written submission, para. 794.
462 China's response to Panel question No. 29(b), para. 153.
463 MOFCOM's disclosure (Exhibit JPN-18.b), p. 25 (emphasis added). See also MOFCOM's final
determination (Exhibit JPN-5.b), p. 41.
464 China's response to Panel question No. 54(a) and (b), para. 124.

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positive domestic policies in 2016, as the volume of 300 -series dumped imports signi ficantly
increased and the import prices continued to decline, the prices of 300-series domestic like products
declined again at the end of the POI". While MOFCOM focuses on the relation between the significant
increase in volume of imports and prices of d omestic like product (presumably from 2016), the
finding would not have made it clear to the interested parties which specific years of the POI MOFCOM
relied on to assess the increase in the volume of subject imports. Considering that this finding was
a basis for MOFCOM to find adverse effects in the 300 -series, in our view MOFCOM should have
disclosed the essential facts underlying this finding in a coherent way so as to allow the interested
parties to defend their interests. To the extent the passage sugg ests that MOFCOM was relying on
the increase in subject imports from 2016 to the end of the POI (which ended on the first quarter of
2018), this would suggest that MOFCOM also relied on changes in the volume of subject imports in
the intervening years of the POI, including the first quarter of 2018, and not just changes from 2014
to 2017 as China contends. In such a case, MOFCOM should have also disclosed the data pertaining
to these periods.
7.305. Based on the foregoing, we find that Japan has established that MOFCOM did not disclose
the essential facts with respect to its finding concerning the adverse effect of subject imports of the
300-series on prices of the domestic like product of the same series.
7.7.3.1.2.2 400-series
7.306. With respect to the 400-series, MOFCOM's disclosure stated as follows:
Regarding the 400 -series products, the price of 400 -series dumped imports was
consistently higher than that of 400-series domestic like products, and the trend of the
two was generally consistent, showing an upward trend. The price of 400-series dumped
imports increased cumulatively by 1.93% in 2017 as compared with 2014, which was
less than the cumulative increase in 400 -series domestic like products over the same
period. The volume of 400 -series dumped imports contin ued to increase, from
88,000 tons in 2014 to 156,000 tons in 2017, with a cumulative increase of 77%. In
January-March of 2018, the volume increased by 18% year-on-year. The proportion of
400-series dumped imports in the dumped imports and domestic like pr oducts of the
same specification increased from 5% in 2014 to 9% in 2017. Affected by this, during
the injury POI, although the price of 400 -series domestic like products increased, the
increase in price was basically at the same level as the increase in c ost. In 2017, the
sales cost of 400 -series domestic like products increased by 29%, and the price only
increased by 25% during the same period.465
7.307. With respect to Japan's contention regarding the partial disclosure of the volume and
proportion of subject imports, we take China's point, which in our view is supported by the extract
of MOFCOM's disclosure set out above, that MOFCOM's 400-series price effects findings were based
on a consideration of the proportion of subject imports only in 2014 and in 2017. 466 However,
MOFCOM's statement that the "volume of 400 -series dumped imports continued to increase"
suggests that MOFCOM's findings were also based on a consideration of the increase in imports over
the entire POI, including intervening trends during the POI. Indeed, China itself states that "MOFCOM
explained that the increase was continuous, which reveals the intermediary trends (continuously
increasing year-on-year) rather than just providing information on starting and end point data",
which shows to us that MOFCOM considered the volume of subject imports in the intervening years
of the POI, and not just changes from 2014 to 2017.467 In our view, simply stating that the volume
of imports of this series "continued to increase" does not disclose in a coherent way the changes in
the volume of subject imports over the POI.
7.308. We also note the following statements made by MOFCOM: "during the injury POI, although
the price of 400-series domestic like products increased, the increase in price was basically at the
same level as the increase in cost"468; and that "[i]n 2017, the sales cost of 400-series domestic like
products increased by 29%, and the price only increased by 25% during the same period." Japan

465 MOFCOM's disclosure (Exhibit JPN-18.b), p. 26 (emphasis added). See also MOFCOM's final
determination (Exhibit JPN-5.b), p. 42.
466 China's response to Panel question No. 54 (a) and (b), para. 124.
467 China's first written submission, para. 797.
468 Emphasis added.

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contends that these MOFCOM statements focused only on the sales cost for 2017 and did not disclose
the data other than for 2017 (or explain why those data were not relevant).469 Japan states that the
data pertaining to the "sales cost" and "increase in costs" were essential facts that MOFCOM was
required to disclose. 470 However, China maintains that MOFCOM found that subject imports
suppressed the prices of the 400 -series, and the prices of this series increased but not to a level
higher than the increase in costs.471 China states that the key increase in price took place in 2017,
and MOFCOM's focus on 2017 was logical as the domestic prices in 2015 and 2016 were lower than
those in 2014.472
7.309. In our view, the fact that MOFCOM made statements about the price-cost relationship that
existed "during the injury POI" reveals that its price effects findings with respect to the 400 -series
were based on a consideration of information from the entire injury POI – namely, from 2014 to the
first quarter of 2018. That being the case, interested parties were entitled to know the data that
MOFCOM considered for the entire injury POI. MOFCOM's disclosure that " [i]n 2017, the sales cost
of 400-series domestic like products increased by 29%, and the price only increased by 25% during
the same period" was not sufficient in our view for interested parties to defend themselves in relation
to MOFCOM's finding that during the injury POI the increase in price was basically at the same level
as the increase in cost.
7.310. Based on the foregoing, we find that Japan has established that MOFCOM did not disclose
the essential facts with respect to its finding concerning the adverse effect of subject imports of the
400-series on prices of the domestic like product of the same series.
7.7.3.1.2.3 Other series
7.311. With respect to the "other" series, MOFCOM's disclosure stated as follows:
Regarding other series products, the price of other series dumped imports showed an
upward trend from 2014 to 2017. In the same period, the price of domestic like products
of the same specifications fell first and then rose. In January-March of 2018, the prices
of the two declined. The import volume of other series dumped imports increased first
and then decreased, from 58,000 tons in 2014 to 68,000 tons in 2016, and decreased
year by year in the later period of the injury POI, but its proportion in the dumped
imports and domestic like products of the same specification was 79%-92%. Since the
import volume of other series dumped imports far exceeded the sales volume of
domestic like products, other series domestic like products were forced to lower their
prices to achieve an overall increase in sales volume, from less than 5,000 tons in 2014
to 10,000 tons in 2017. At the end of POI, the price of other series imported products
fell again, accompanied by the rise of the import volume accounting for the domestic
market share of the same specification, and the price of other series domestic like
products also fell in the same period.
Other series dumped imports had adverse effects on the prices of other series domestic
like products.473
7.312. Japan argues that MOFCOM did not disclose the volume of imports or the domestic sales
volume for the different parts of the POI, or specify the period where the proportion of subject
imports of the other series was in the range of 79%-92%.474 China submits that MOFCOM properly
disclosed information on the volume of subject imports. In support of this submission, China notes
that MOFCOM explained that dumped imports increased from 2014, and then decreased again to the
2016 level.475 Thus, according to China, it was thus clear that the 2015 volume of imports was higher
than the 2014 and 2016 levels. 476 In any event, per China, MOFCOM's finding was not linked to

469 Japan's first written submission, para. 560.
470 Japan's first written submission, paras. 560-561.
471 China's first written submission, para. 798.
472 China's first written submission, para. 798.
473 MOFCOM's disclosure (Exhibit JPN-18.b), p. 26. See also MOFCOM's final determination
(Exhibit JPN-5.b), p. 42.
474 Japan's comments on China's response to Panel question No. 54(a) and (b), para. 79(c); first written
submission, para. 556.
475 China's first written submission, para. 793.
476 China's first written submission, para. 793.

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import volume in absolute terms. Instead, MOFCOM 's finding was based on the fact that dumped
imports were significantly larger than the domestic sales. 477 In this respect, China contends that
MOFCOM disclosed that the proportion of subject imports was throughout the relevant period very
high, ranging between 79%-92%.478 The adverse effects, according to China, did not have anything
to do with any increase or decrease in the proportion of subject imports. Instead, the adverse effects
were based on the proportion of subject imports being significantly higher than that of domestic
sales.479 China also submits that MOFCOM referred to the domestic sales volumes by series since
the price effects related to the domestic producers of other series being forced to lower their prices
to achieve an increase in their domestic sales.480
7.313. In determining whether MOFCOM disclosed the essential facts underlying its finding
regarding the adverse effect of subject imports of the other series, we note that MOFCOM focused
on the changes in import volumes between 2014 and 2016, as well as the "later period of the injury
POI". This shows that MOFCOM examined the changes in volume of imports in different years of the
POI as part of its analysis. Thus, to the extent China's contention is that MOFCOM's finding was not
linked to import volume in absolute terms, we do not consider that this contention is supported by
MOFCOM's disclosure set out above. Instead, we consider that MOFCOM examined the changes in
volume of subject imports over the entire POI. However, MOFCOM failed to disclose the import
volume of subject imports over the POI. While MOFCOM referred to a decrease in imports in the later
period of the POI, in our view, such a narrative description does not disclose the subject import
volume in a sufficiently coherent manner for parti es to defend their interests. We note, moreover,
that MOFCOM found that "[a]t the end of POI, the price of other series imported products fell again,
accompanied by the rise of the import volume accounting for the domestic market share of the same
specification, and the price of other series domestic like products also fell in the same period".
However, in our view, such a disclosure is not consistent with Article 6.9 because it does not clarify
the specific period of the POI it refers to, or set out the sa les volume for the "end of the POI". We
also note that MOFCOM did not set out the specific periods during which the proportion in the dumped
imports and domestic like products of the same specification was 79%-92%. We thus do not consider
that MOFCOM's disclosure was sufficient under Article 6.9.
7.314. Based on the foregoing, we find that Japan has established that MOFCOM did not disclose
the essential facts with respect to its finding concerning the adverse effect of subject imports of the
other series on prices of the domestic like product of the same series.
7.7.3.1.3 Disclosure regarding brand effects
7.315. In making its finding on price effects, MOFCOM stated as follows:
Due to difference of development conditions, a certain brand effect owned by the
dumped imports in Chinese market should be recognized by consumers, and the price
decline of dumped imports (including the specific specifications) had an obviously
adverse effect on the price of the domestic like product.481
7.316. Japan contends that since the "brand effect" of subject imports led MOFCOM to conclude
that subject imports depressed domestic like product prices, despite being higher -priced, MOFCOM
should have, but failed to, disclose the factual basis supporting the finding that subject imports had
certain brand effects.482 China contends that MOFCOM referred in the disclosure document to the
fact that the dumped imports had a certain brand effect in the Chinese market, which, China notes,
explained why their prices were generally higher than the prices of the dome stic like products.483
However, per China, MOFCOM did not rely on such brand effects to reach any conclusion on price
effects.484 Instead, per China, MOFCOM examined the evolution of prices and volume over the POI

477 China's first written submission, para. 794.
478 China's first written submission, para. 794; response to Panel question No. 54(a) and (b), para. 120.
479 China's first written submission, para. 794.
480 China's first written submission, para. 794.
481 MOFCOM's disclosure (Exhibit JPN-18.b), p. 27. See also MOFCOM's final determination
(Exhibit JPN-5.b), p. 43.
482 Japan's first written submission, para. 568; second written submission, paras. 390-391.
483 China's first written submission, para. 813.
484 China's first written submission, para. 813.

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to assess whether subject imports were having an adverse effect on the prices of the same series
despite being priced higher than domestic like products.485
7.317. Although China contends that MOFCOM did not rely on brand effects to reach any conclusion
regarding the price effects of subject imports, we note from the above extract that MOFCOM, in the
same sentence, tied its statement that "a certain brand effect owned by the dumped imports in
Chinese market should be recognized by consumers" to the observation that "the price decline of
dumped imports (including the specific specifications) had an obviously adverse effect on the price
of the domestic like product". In our view, it i s not clear from this sentence that MOFCOM did not
rely on brand effects to explain the adverse effect on prices of the domestic like product. If anything,
the excerpt set out above appears to suggest the opposite. In the absence of a coherent disclosure
on the role of brand effects, or more detailed disclosure of the brand effects that MOFCOM found to
exist, interested parties would have been unable to meaningfully engage with MOFCOM's findings in
this regard or provide meaningful comments on whether such brand effects actually existed, and if
so, explained the higher prices of subject imports.
7.318. Based on the foregoing, we find that Japan has established that MOFCOM did not disclose
the essential facts with respect to its reference to the brand effect of subject imports.
7.7.3.1.4 Overall conclusion
7.319. Based on the foregoing, we find that Japan has established that MOFCOM acted
inconsistently with Article 6.9 because it failed to disclose the essential facts under consideration
that formed the basis for its price effects analysis with respect to the following:
a. MOFCOM's findings that billets (slabs), coils , and plates were in the same category of
products;
b. MOFCOM's price effects findings with respect to the 300 -series, 400 -series and other
series; and
c. MOFCOM's reference to certain brand effects of subject imports.
7.7.3.2 Definition of the product under consideration
7.320. In its disclosure document as well as its final determination, MOFCOM stated that "[b]ased
on either factual or legal analysis, stainless steel billet, hot-rolled stainless-steel plate (coil) shall be
identified as the same category of product [i.e. the product under consideration]".486 It then added
that "there is no legal provision requiring that the subcategories/specifications of the subject product
must be similar or directly competitive in order to constitute a subject product". 487 Nevertheless,
MOFCOM went on to make the following findings which it relied upon to support its definition of the
product under consideration:
[D]ue to the difference in physical form between stainless steel billet and hot -rolled
stainless steel plate (coil), their prices have reasonable differences.
…
After further examination, the Investigating Authority also found that the physical and
chemical characteristics and technical indices of hot -rolled stainless steel plate/coil
depended on the physical and chemical characteristics of the stainless steel billet in the
steelmaking process, and that there was no substantial difference in the basic internal
characteristics, and that the difference in physical form cannot disprove the fact that
they had the same basic characteristics. The final trading market and usage of stainless
steel billet and hot -rolled stainless steel plate (coil) are consistent. The hot -rolled
stainless steel plate and the hot-rolled stainless steel coil have crossed and overlapped

485 China's first written submission, para. 812.
486 MOFCOM's disclosure (Exhibit JPN-18.b), p. 9; MOFCOM's final determination (Exhibit JPN-5.b), p. 11.
(emphasis added)
487 MOFCOM's disclosure (Exhibit JPN-18.b), p. 9; MOFCOM's final determination (Exhibit JPN-5.b), p. 11.

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downstream usages in actual application, such as storage t anks, bridges and vessels.
Although they have differences in specific segment uses and customers, these are
reasonable differences within the products of the same category due to segmentation
specifications. Their final usage and customer group have simila rity. Therefore, the
Investigating Authority maintained the preliminary determination that stainless steel
billet and hot-rolled stainless steel plate (coil) fall into the same category of product and
can be assessed as a whole.488
7.321. Japan submits that interested parties were unable to examine the factual basis of MOFCOM's
finding that the price differences between billets (slabs), coils, and plates were "reasonable" because
MOFCOM failed to provide the figures for the prices that it considered. 489 Japan also contends that
because MOFCOM did not disclose the kind of segment uses and customers, or final usage and
customer groups that MOFCOM reviewed for each type of product category, and the extent to which
MOFCOM found them to be similar or different, interested parties could not examine whether the
differences in them were, as MOFCOM stated, "reasonable".490
7.322. China contends that, in light of the absence of any discipline in the Anti-Dumping Agreement
regarding the definition of the product under consideration , MOFCOM was under no obligation to
disclose the factual basis for assessing the similarities or dissimilarities between billets (slabs), coils,
and plates.491 Nonetheless, China contends that MOFCOM disclosed this factual basis.
7.323. We note that MOFCOM made its f inding that that billets (slabs), coils , and plates were in
"the same category of product" when defining the product under consideration, and then relied on
this finding as part of MOFCOM's price effects analysis. We recall that in paragraphs 7.295-7.298
above, we examined Japan's complaint against MOFCOM's disclosure pertaining to its price effects
analysis, finding that MOFCOM failed to disclose the essential facts underlying its finding that billets
(slabs), coils, and plates were in "the same category of product".
7.324. Specifically, we have found that in the light of the nature of its finding, MOFCOM was required
to, but did not, disclose the facts that it relied upon to conclude that that the products had the same
basic characteristics (for instance regarding non -price differences pertaining to segment
specifications and usages). Japan's complaint against MOFCOM's alleged failure to disclose the
essential facts underlying its decision on the product under consideration is focused on an alleged
failure on the part of MOFCOM to disclose the same information – namely, prices relied upon to
reach the "reasonable" price differences conclusion as well as the data underlying MOFCOM's finding
that the differences in the segment uses and customers of these three product categories were
reasonable. Having already found that MOFCOM failed to disclose this information in the context of
its price effects analysis, we do not believe it is necessary for the pu rpose of achieving a positive
resolution of this dispute to also make findings on the alleged non -disclosure of the essential facts
underlying MOFCOM's definition of the product under consideration.
7.325. Accordingly, we make no findings with respect to Japan's claim under Article 6.9 challenging
the lack of disclosure of the essential facts under consideration in relation to MOFCOM's definition of
the product under consideration.
7.7.3.3 Cumulation
7.326. Japan contends that MOFCOM failed to disclose the essential facts underlying its findings
regarding the similarities between certain characteristics of the subject imports from the
European Union, Indonesia, Japan, and Korea.492 In particular, Japan contends that MOFCOM failed
to disclose the essential facts pertaining to the following: (a) physical and chemical characteristics
of the products exported by the four countries, (b) their distribution channels, (c) their pricing
strategies (d) their customer groups, and (e) their volume and price change tr ends.493 Japan
contends in this regard, relying on previous DSB reports, that Article 6.9 requires an investigating

488 MOFCOM's disclosure (Exhibit JPN-18.b), p. 10; MOFCOM's final determination (Exhibit JPN-5.b), p. 12.
489 Japan's first written submission, para. 536.
490 Japan's first written submission, para. 536.
491 China's first written submission, para. 759.
492 Japan's first written submission, para. 571.
493 Japan's first written submission, paras. 572-580; second written submission, paras. 394-410.

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authority to disclose the facts in a manner that an interested party can understand what data the
investigating authority has used, and how it has used it.494 China rejects Japan's contentions.
7.327. In its disclosure document, MOFCOM stated, inter alia, as follows:
The investigation shows that the physical and chemical characteristics, product usage,
raw material, production technology and other aspects of dumped imports originating
in the EU, Japan, Korea and Indonesia were basically the same; the companies in the
EU, Japan and Korea and Indonesia sold the dumped imports to the domestic market
by direct sale, distribution and other man ners, which accounted for a relevant market
share of the domestic market; all manufacturers or dealers had the same or similar
pricing strategies; the dumped imports had the same customer group, and the domestic
downstream users could freely purchase and use the dumped imports originating in the
EU, Japan, Korea and Indonesia . To sum up, the Investigating Authority determined
that there was a competitive relationship between dumped imports in the preliminary
determination.
After preliminary determination, t he Investigating Authority also listened to the
statement of the Applicant and responding companies as well as other parties at hearing
and reviewed the written statement materials provided after hearing. After review,
firstly, the Investigating Authority considered that there were many grades of the
stainless steel billet and hot-rolled stainless steel plate (coil), and it was normal to have
a certain difference on different specifications and models. A cumulative assessment
does not require completely ide ntical competitive conditions of different countries
(regions). Secondly, according to the statistical data of China Customs, although the
volume and price change trend of the imports from four countries (regions) were
different, the dumping margin of imports from all countries (regions) within the dumping
POI was not de minimis, the volume of imports was not negligible, and the differences
in the volume and price change trends could not refute a competitive relationship.
Thirdly, as shown by the statistical data of China Customs, questionnaire responses and
sales information on a product-specific basis provided by various interested parties, all
of the dumped imports exported from the EU, Japan and Korea and Indonesia to China
included 300 -series products , the subject products of four countries (regions)
overlapped in terms of specifications and models, the dumped imports of Indonesia had
direct competition with those of the EU, Japan and Korea in the Chinese market .
Therefore, the Investigating Authority di d not accept the assertion from the foregoing
interested parties. Through comprehensive consideration of above opinion and reason,
the Investigating Authority maintained the decision of the preliminary determination in
the final determination, i.e., there was a competitive relationship between the subject
products and between the subject products and domestic like products, and it was
appropriate to make a cumulative assessment of the effects of dumped imports on the
domestic industry.495
7.328. The question before us is whether the disclosure above was sufficient to permit interested
parties to understand, for the purpose of defending their interests, the essential factual basis of
MOFCOM's finding that imports from the four investigated countries were similar on a ccount of
(a) physical and chemical characteristics ; (b) distribution channels ; (c) pricing strategies ;
(d) customer groups; and (e) volume and price change trends.
7.329. We begin by noting that when it comes to MOFCOM's findings with respect to volume and
price trends, MOFCOM's disclosure refers to the "statistical data of China Customs" as the source of
its analysis. Thus, contrary to Japan, we do not find fault in MOFCOM's disclosure with respect to
this matter. As regards MOFCOM's findings with respect to th e four other matters, we note that
Japan argues that MOFCOM was required to disclose (a) the data concerning various specifications
and models of the product broken down by four countries; (b) detailed facts that led MOFCOM to
conclude that the distribution channels of these four countries were similar, such as the "percentage
of each of the products imported from each of the countries (regions) via each of the relevant
distribution channels"; (c) the kind of customer groups or downstream users that exist f or subject
imports from each of the countries, or (d) the country -specific volume and price trends for each

494 Japan's second written submission, para. 395.
495 MOFCOM's disclosure (Exhibit JPN-18.b), pp. 17 and 19.

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country that was under investigation in this case. 496 In our view, this level of detail is not required
as part of a disclosure of essential facts fo r the purpose of Article 6.9. This is not to suggest that
this type of information is not relevant to the defence of the parties' interest in the course of the
anti-dumping proceedings in general. In fact, Article 6.4 specifically requires that investigati ng
authorities provide whenever practicable timely opportunities to interested parties to see information
that is relevant to the presentation of their case. Since Article 6.9 is not meant to duplicate the
requirements of Article 6.4, we do not consider that such detailed data needs to be disclosed as part
of the disclosure on essential facts.
7.330. Based on the foregoing, we find that Japan has not established that MOFCOM's disclosure of
the essential facts underlying its cumulation analysis was inconsistent wi th Article 6.9 of the
Anti-Dumping Agreement.
7.7.3.4 State of domestic industry
7.331. Japan contends that in evaluating the various factors that indicate the state of the domestic
industry, MOFCOM failed to disclose the calculation formulas and source of the informati on of the
figures for (a) domestic apparent consumption, (b) domestic sales volume, and (c) domestic market
share.497 In addition, as discussed in more detail below, per Japan, MOFCOM failed to provide a
sufficient disclosure of the essential facts underlying certain assertions it made as part of its analysis
of the impact on the domestic industry.498 China rejects Japan's contentions.
7.7.3.4.1 Disclosure of "calculation formula and source of information"
7.332. Japan argues that MOFCOM failed to disclose the calculation fo rmula and sources of
information used to determine domestic apparent consumption, domestic sales volume and domestic
market share figures used in its injury analysis. According to Japan, because injury factors for the
analysis of the state of domestic indu stry are important factors that affect the determination of
injury, the formulas and sources of information used to determine those factors should be considered
essential facts.499 Japan maintains that because its own calculations pertaining to apparent domestic
consumption, domestic sales volume and domestic market share raise serious doubts on the
reliability of the figures used by MOFCOM (and disclosed) to analyse the status of the domestic
industry, the disclosure of the facts underlying MOFCOM's assessm ent of these three injury factors
was even more important.500 Thus, according to Japan, MOFCOM should have disclosed the method
of calculation and the source of the data used for these three injury factors so that the interested
parties could verify the accuracy of MOFCOM's calculations.501
7.333. China contends that MOFCOM's disclosure pertaining to apparent domestic consumption,
domestic market share and domestic sales volume was consistent with Article 6.9. 502 Noting
Japan's submission that it is unable to reconc ile the figures presented by MOFCOM with respect to
these injury factors with its own calculations, China contends that this is due to calculation errors
made by Japan itself.503
7.334. With respect to apparent domestic consumption, as we note in paragraph 7.208 above, the
parties agree that it is typically calculated by adding total domestic production and import volume
and then subtracting the export volume. Japan contends that MOFCOM's disclosure with respect to
this factor was inadequate because, according to its own calculations the figures for apparent
domestic consumption set out in the determination were higher than the sum of total domestic
production and import volume. However, as we noted in paragraphs 7.209-7.210 above, Japan has
not established that this was actually the case. Specifically, Japan calculates the apparent domestic
consumption based on the production volume of the domestic industry set out in MOFCOM's injury
analysis. MOFCOM disclosed that the productio n output used for the injury analysis did not include

496 Japan's first written submission, paras. 572, 575, 578, and 580.
497 Japan's first written submission, para. 582.
498 Japan's first written submission, paras. 589-590 and 591-592.
499 Japan's first written submission, para. 583.
500 Japan's first written submission, para. 588.
501 Japan's first written submission, para. 588.
502 China's first written submission, para. 844.
503 China's first written submission, paras. 847-851.

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the production of three companies that MOFCOM excluded from the domestic industry.504 However,
the data set MOFCOM used to calculate apparent domestic consumption included (as it should have)
the domestic production of all domestic producers, including those excluded from the scope of the
domestic industry.505 Thus, as we see it, Japan's co ncerns do not arise from the lack of disclosure,
but from its own misunderstanding of the disclosed information.
7.335. With respect to domestic market share, as we note in paragraph 7.195 above, China
explains, relying on record evidence, that to calculate the domestic industry's market share,
MOFCOM used the domestic industry's sales volume plus domestic captive consumption in the
numerator and the total apparent consumption in the denominator. Japan does not include captive
consumption in the numerator, and thus its own calculations lead it to a market share figure that is
different from that presented by MOFCOM. However, we note that in its injury analys is, MOFCOM
stated that "[i]f the captive use [of domestic companies] was excluded, the market share of the
commodity volume was still gradually diminished since 2017".506 In our view, this disclosure would
have made it reasonably clear to the interested par ties that the market share figures used as part
of the injury analysis included data on captive consumption. Thus, as we see it, again Japan's
concerns do not arise from the lack of disclosure, but from its own misunderstanding of the disclosed
information.
7.336. With respect to the domestic sales volume, we note China's argument, with which we agree,
that domestic sales volumes are not based on any formula as such, but instead are a collation of the
reported sales volume of the domestic producers. In the absence of sufficient arguments from Japan
as to what specific calculations MOFCOM was required to disclose as part of the domestic sales
volume, we do not address this argument any further.
7.337. Based on the foregoing, we find that Japan has not established that MOFCOM failed to
disclose the essential facts with respect to domestic apparent consumption, domestic industry's
market share and sales volume.
7.7.3.4.2 Factual basis for certain assertions MOFCOM made as part of its analysis of the
impact of dumped imports on the domestic industry
7.338. Japan argues that MOFCOM failed to provide a sufficient disclosure of the essential facts
underlying certain assertions made by MOFCOM as part of its analysis regarding the impact of
dumped imports on the domestic industry. Japan focuses on the following finding made by MOFCOM.
In summary, despite the improvement of the domestic industry's production and
financial situation for individual years, due to the impa ct of increased volume and
decreased price of dumped imports, during the injury POI, under the circumstance of
favorable market conditions such as steady growth in domestic demand and positive
industrial policies, the domestic industry was still facing severe production and operation
pressures, production capacity was not effectively released, market share saw an overall

504 China's first written submission, para. 848 (referring to MOFCOM's disclosure (Exhibit JPN-18.b),
p. 36).
505 Japan objected to China's assertion that in calculating the production output of the domestic industry
(for the purpose of the injury analysis), MOFCOM excluded the production output of three domestic producers
(which were those producers that MOFCOM had excluded from the scope of the domestic industry), but
included the production of these domestic producers while calculating domestic apparent consumption.
In particular, Japan contended in its second written submission that China did not substantiate this assertion
"with any data or other information" demonstrating the total production output of the three producers it
excluded, and it is not possible to confirm whether the exclusion of those three producers from the total
production output can explain the discrepancy alluded by Japan. (Japan's second written submission,
para. 415). However, China provided explanations and data showing that one could derive the apparent
consumption figures provided in the final determination by adding to the production output of the domestic
industry, the production volume of excluded producers along with the import volume (and excluded export
volume). (China's response to Panel question No. 48, paras. 88-91). In its comments on China's response to
Panel questions, Japan did not object to these explanations and data.
506 MOFCOM's disclosure (Exhibit JPN-18.b), p. 33. See also MOFCOM's final determination
(Exhibit JPN-5.b), p. 50.

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downward trend, and ending inventory was high, pretax profits were still at a low level,
and investment did not receive returns that it should have had.507
7.339. Japan refers to the extract set out above, and states that this extract contains a "summary
of the reasons" that MOFCOM relied upon in concluding that the domestic industry suffered injury,
and that all items set out therein (including the reference to (a) positive industrial policies, (b) severe
production and operation pressures, and (c) that the domestic industry did not receive the return
on its investment that it should have) were essential facts that MOFCOM was required to disclose.508
Japan submits that interested parties were unable to examine these statements properly because
they received no information about the facts underlying these statements.
7.340. Regarding the reference to "positive industrial policies", China contends that the ref erence
was not extremely important and necessary in the process of reaching a decision and thus not an
essential fact.509 In any case, per China, MOFCOM disclosed details about the policy as follows:
According to the data of the injury POI, the domestic dem and continued to increase,
and the actual production output and demand basically increased simultaneously. At
the same time, the state's implementation of industrial policies to eliminate outdated
production capacity played a positive role in improving dom estic production and
operation.510
Because of the positive industrial policy of Chinese market in 2016, when the import
price of the dumped imports continuously fell, the market price of the domestic like
products transiently rebounded.511
In 2016, due to t he favorable effects of domestic industrial adjustment policies and
continuous improvement of the domestic industry’s management and technical level,
the sales volume and sales revenue of domestic like products increased, and domestic
industry turned losses into profits, but pretax profits and return on investments were
still at a lower level. In 2017, affected by factors such as further elimination of outdated
production capacity, the sales price of domestic like products rebounded, and the sales
revenue and pretax profits increased accordingly. However, the increased volume and
decreased price of dumped imports weakened the effect of relevant industrial policies.512
7.341. With respect to the reference to "severe production and operation pressures", China submits
that this statement is part of MOFCOM's reasoning (and not an essential fact itself). 513 China
contends that the disclosure explained the following in relation to severe production and operation
pressures:
During the injury POI, dumped imports occupied the market share in China through
dumping, while dumped imports caused a downward pressure on the sales prices of
domestic like products, resulting in a significant squeeze on the market space of
domestic like products, and no effective release in the production capacity, a downward
trend in market share, a high level of ending inventory and low pretax profits, which
caused difficulties and pressure on the production and operation of the domestic
industry.514
7.342. China contends that this explanation clarified that t he production and operation pressures
relied on the data concerning production capacity, market share, ending inventory and pre -tax
profits, all of which were disclosed in detail.515

507 MOFCOM's disclosure (Exhibit JPN-18.b), p. 32. See also MOFCOM's final determination
(Exhibit JPN-5.b), p. 49. (emphasis added)
508 Japan's first written submission, para. 590.
509 China's first written submission, para. 857.
510 MOFCOM's disclosure (Exhibit JPN-18.b), p. 36.
511 MOFCOM's disclosure (Exhibit JPN-18.b), p. 28.
512 MOFCOM's disclosure (Exhibit JPN-18.b), p. 32.
513 China's first written submission, para. 859.
514 China's first written submission, paras. 859-860. MOFCOM's disclosure (Exhibit JPN-18.b), p. 34.
515 China's first written submission, para. 860.

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7.343. With respect to the assertion that "investment did not receive returns tha t it should have
had", China again notes that this statement is part of MOFCOM's reasoning, and thus not an essential
fact.516 According to China, MOFCOM relied on the following data set out in the disclosure to support
its reasoning:
9. Return on Investment.
During the injury POI, the investment return of domestic like products kept a rising
trend, and fell at the later [part of the] period. It was -0.37%, -3.94%, 0.26%, 2.34%
and 0.45% respectively in 2014, 2015, 2016, 2017 and January -March of 2018. Of
which it fell by 3.56 percentage points year-on-year in 2015, changed from the negative
to the positive in 2016, rose by 2.08 percentage points year -on-year in 2017, it was
1.68% in January -March of 2017, and fell by 1.23 percentage points year -on-year in
January-March of 2018.517
In 2016, due to the favorable effects of domestic industrial adjustment policies and
continuous improvement of the domestic industry’s management and technical level,
the sales volume and sales revenue of domestic like products increased, and domestic
industry turned losses into profits, but pretax profits and return on investments were
still at a lower level.518
7.344. In determining whether MOFCOM made the proper disclosures, we agree with China that the
statements Japan focuses on must be considered in the context of other parts of the disclosure
document.
7.345. With respect to industrial policies, to the extent the reference to these industrial policies
were essential facts, MOFCOM's reference in other parts of the disclosure document to the
state's implementation of industrial policies to eliminate outdated production capacity would have
indicated to the interested parties the nature of the industrial policies that MOFCOM was referring to
in this summary section.
7.346. With regard to severe production and operation pressures, we note from the part of the
disclosure document cited by China, set out in paragraph 7.341 above, that MOFCOM identified a
series of factors "which caused difficulties and pressure on the production and operation of the
domestic industry". In our v iew, Japan has not adequately explained why in light of these
explanations in other parts of the disclosure document, interested parties could not understand what
the reference to severe production and operation pressures meant.519
7.347. With regard to MOFCOM's reference to the domestic industry's investment not receiving the
returns it should have we note that the disclosure document contains a section titled "return on
investment". In that section MOFCOM noted that "the investment return of domestic like product s
kept a rising trend, and fell at the later [part of the] period". MOFCOM also set out the percentage
changes in this regard in 2014, 2015, 2016, 2017 , and the first quarter of 2018. In light of these
references, we do not consider that Japan has establis hed why interested parties would have been
unable to understand MOFCOM's reference in the summary section that the domestic industry's
investment did not receive the returns it should have had.520

516 China's first written submission, para. 859.
517 China's first written submission, paras. 861-862. MOFCOM's disclosure (Exhibit JPN-18.b), p. 30.
518 China's first written submission, paras. 861-862. MOFCOM's disclosure (Exhibit JPN-18.b), p. 32.
519 See e.g. Japan's second written submission, para. 421. Japan generally asserts that with respect to,
inter alia, production and operation pressures, China's explanations are not understandable from the disclosure
document, and are thus ex post facto rationalizations, and in any event do not provide underlying data or other
information that allows the interested parties to verify the accuracy of MOFCOM's intermediate findings. Japan
does not identify the underlying data or other information that MOFCOM failed to disclose in this regard, and it
is not clear to us from Japan's response why, when viewed in context of other more details references in other
parts of MOFCOM's determination, MOFCOM's disclosure with regarding to production and operation pressures
was inadequate.
520 See, Japan's second written submission, para. 421. Like with respect to "production and operation
pressures", Japan contends that China's explanations, with regard to the domestic industry's investments not
receiving the returns it should have, are not understandable from the disclosure document, and are thus

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7.348. Japan also challenges MOFCOM's alleged failure to make discl osures with respect to the
following excerpt from MOFCOM's determination:
The Investigating Authority considered that the determination of whether domestic
industry was subject to material injury should not be based solely on certain indices of
the domestic industry, but all economic indices and the impact of other factors in the
domestic industry should be considered. The Investigating Authority comprehensively
considered the changes in all indices and found that the domestic industry suffered from
material injury. Therefore, the assertions of the above -mentioned interested parties
were not established.521
7.349. Japan states that in the underlying investigation several injury factors showed positive
trends, and that the reference to "other factors" in the above pa ssage suggests that undisclosed
negative factors provided sufficient evidence to rebut the implication that no injury to the domestic
industry occurred during the POI.522 Japan also submits that while MOFCOM stated that all economic
indices should be considered as part of the injury analysis, and that it comprehensively considered
the changes in all indices, it did not offer any explanations, or disclose any information about which
factors played a decisive role to the point that they overrode the positive p erformance in several
economic indices.523 China responds that the "other factors" referred to issues such as the favourable
effect of domestic industrial adjustment policies, improvements in the domestic industry, and
elimination of outdated production cap acity.524 China also notes that the comprehensive
consideration refers to a detailed analysis of the different economic indices pertaining to the state
of the domestic industry.525
7.350. In our view, the part of the extract quoted by Japan, including the references therein, needs
to be reviewed in proper context. The extract is from section IV of the disclosure document, where
MOFCOM examined the "domestic industry status within the POI". In examining the status of the
domestic industry, MOFCOM first reviewed 16 factors pertaining to the state of the domestic
industry.526 MOFCOM then continued to discuss other factors such as the effects of domestic
industrial adjustment policies and continuous improvement of the domestic industry's management
and technical level, as well as elimination of outdated production capacity, on the status of the
domestic industry. 527 Having set out those factors, MOFCOM noted the improvement in several
factors but concluded that despite such improvements in light of the negative factors, MOFCOM had
determined in the preliminary determination that the domestic industry was suffering material
injury.528 MOFCOM then turned to address the submissions made by the interested parties and the
applicant, and noted in this regard that "the interested parties once again asserted" after the
preliminary determination that, inter alia, most of the indices of the domestic industry were good.
7.351. In responding to these assertions, MOFCOM stated that it considered that the determination
of whether domestic industry was subject to material injury should not be based solely on certain
indices of the domestic industry, but all economic indices and the impact of other factors in the
domestic industry should be considered. MOFCOM added that it had comprehensively considered the
changes in all indices and found that the domestic industry suffered material injury. In our view,
when viewed in the context of the injury analysis that preceded these statements, it should have
been clear that M OFCOM was referring to its review of the 16 economic indices and other factors,
and its consideration of the changes in the economic indices set out in the earlier parts of section IV

ex post facto rationalizations, and in any event do not provide underlying data or other information that allows
the interested parties to verify the accuracy of MOFCOM's intermediate findings. But again Japan does not
identify the underlying data or other information that MOFCOM failed to disclose in this regard, and it is not
clear to us from Japan's response why, when viewed in context of the more details referenced in other parts of
MOFCOM's determination, MOFCOM's disclosure with respect to domestic industry not receiving the return on
investment it should have, was inadequate.
521 MOFCOM's disclosure (Exhibit JPN-18.b), p. 33; MOFCOM's final determination (Exhibit JPN-5.b),
p. 50. (emphasis added)
522 Japan's first written submission, para. 592.
523 Japan's first written submission, para. 592.
524 China's first written submission, para. 865.
525 China's first written submission, para. 866.
526 MOFCOM's disclosure (Exhibit JPN-18.b), pp. 28-31.
527 MOFCOM's disclosure (Exhibit JPN-18.b), p. 32.
528 MOFCOM's disclosure (Exhibit JPN-18.b), p. 32.

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of the disclosure document. Thus, we do not consider that Japan has established that MOFCOM failed
to properly disclose the essential facts in this regard.529
7.352. Based on the foregoing, we find that Japan has not established that MOFCOM failed to
disclose the essential facts underlying the assertions made as part of its analysis o f the impact of
dumped imports on the domestic industry.
7.7.3.5 Causation
7.353. Japan claims that MOFCOM failed to disclose the essential facts underlying its finding that
(a) nickel price fluctuation and (b) cost of environment regulations, were not factors that caused
injury to the domestic industry.530
7.7.3.5.1 Fluctuations in the nickel price
7.354. Japan notes that MOFCOM acknowledged the increase in the price of nickel during the POI,
but that it found that:
However, as the foregoing analysis shows, the price of domestic like products was even
lower than the cost during the injury POI, due to the significant price depression caused
by dumped imports. The data show that, with the increase in the price of nickel that is
a raw material, the price of corresponding nickel -containing products did not rise but
declined.531
7.355. Japan submits that MOFCOM did not reveal anything about the specific content of the price
of nickel-containing products, and asserts that the "price of nickel -containing products" and their
"cost" were essential fact s that MOFCOM should have disclosed. 532 Japan contends that the
disclosure document contains no explanation about the meaning of the phrase "nickel -containing
products", and asserts that China itself has been inconsistent in explaining what the phrase
means.533 In this regard, Japan submits that whereas in its first written submission China stated
that nickel -containing products referred to the 300 -series, in response to our questions it
subsequently stated that it referred to both the 300 and the 200-series.534 Japan also contends that
MOFCOM provided no grounds to support its view that the prices of domestic like products were
even lower than their cost during the injury POI, and notes that it is unclear what part of the
disclosure document MOFCOM's reference t o a "foregoing analysis" pertains to. 535 In particular,
Japan submits in this regard that MOFCOM did not provide any information on what cost MOFCOM
analysed, or offer any grounds to support its statement that the price of domestic like products was
generally lower than the cost.536

529 We note in this regard that Japan also argues that if MOFCOM only referred to factors listed in
section IV of the disclosure or factors indicated as "other factors", this supports Japan's claims under
Article 3.4 of the Anti-Dumping Agreement. (Japan's second written submission, para. 421). We note that we
have found it unnecessary to address Japan's claims under Articles 3.4 and 3.1 challenging
MOFCOM's evaluation of each of the factors and the overall impact thereof. Nonetheless, we note that we are
concerned here with MOFCOM's disclosure and not the substantive deficiencies in MOFCOM's injury analysis.
Japan also contends that to the extent MOFCOM's reference to "other factors" included the "elimination of
outdated production capacity" it should have provided the factual basis for this factor, including what event
MOFCOM was referring to. (Ibid.). We note that Japan is advancing through this argument a different basis for
challenging MOFCOM's disclosure than that it advanced in its first written submission. In any case, we find the
reference to the elimination of outdated production capacity to be self-explanatory, and do not see why
MOFCOM needed to refer to any specific event pertaining to the elimination of such capacity as part of its
disclosure obligations.
530 Japan's first written submission, para. 593.
531 Japan's first written submission, paras. 594-595 (quoting MOFCOM's final determination
(Exhibit JPN-5.b), p. 53). (emphasis added by Japan)
532 Japan's first written submission, para. 598.
533 Japan's comments on China's response to Panel question No. 55, paras. 85-86. See also
Japan's second written submission, para. 424.
534 Japan's comments on China's response to Panel question No. 55, para. 85.
535 Japan's first written submission, paras. 595 and 597.
536 Japan's first written submission, para. 597.

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7.356. In its first written submission, China stated that the "notion of 'nickel-containing products'
relates specifically to the 300-series".537 China explained that given that the 300-series contained a
significant amount of nickel as compared to the 200-series, it was logical that the 300-series would
be especially affected by fluctuations in the market price of nickel. 538 China submits that "[i]t was
therefore mainly this series [i.e. the 300-series] that MOFCOM was referring to when it explained in
the Final Determination that 'with the increase in the price of nickel that is a raw material, the price
of corresponding nickel -containing products did not rise but declined '".539 China adds that "the
200-series was not the primary focus o f MOFCOM's observations".540 Nonetheless, in response to
our questions at the second meeting, China submitted that MOFCOM's statement regarding the
decline in the prices of nickel-containing products applied to both the 300-series and the 200-series,
both of w hich contained nickel, though because the 300 -series contained more nickel it was
particularly affected by fluctuations in the market price of nickel.541 With regard to Japan's contention
that MOFCOM provided no grounds to support its view that the prices of domestic like products were
even lower than their cost during the injury POI, China submits that MOFCOM provided the essential
facts in this regard. 542 In support of this submission, China notes that MOFCOM referred to the
"foregoing analysis" that the price of domestic like products was even lower than the cost during the
injury POI, and this analysis referred to MOFCOM's findings in the context of price effects that in
order to obtain an maintain certain quantities of product sales, from 2014 to 2015, "t he price of
300-series domestic like products was close to or lower than its sales cost". 543 China submits that
any more detailed information on the relation between costs and prices of the domestic industry for
specific series risk providing domestic produ cers with too much information about their
competitors.544
7.357. We recall that under the terms of Article 6.9, essential facts must be disclosed in a coherent
way so as to permit an interested party to understand the basis for an investigating
authority's decision. We do not consider that a reference to "nickel-containing products" would have
disclosed with sufficient clarity to interested parties whether MOFCOM was referring to the 300-series
or the 200-series, or both. China argues that MOFCOM disclosed the grounds for its finding that "the
price of domestic like products was even lower than the cost during the injury POI" through its
"foregoing analysis". In that analysis, MOFCOM found that from 2014 to 2015, "the price of
300-series domestic like product s was close to or lower than its sales cost". However, we do not
consider that this amounts to a coherent disclosure of essential facts underlying its finding that the
price of domestic like products was even lower than the cost "during the injury POI". In this regard,
we note that whereas MOFCOM's finding pertained to nickel containing products and for the entire
injury POI, the findings on price effects that MOFCOM was referring to pertained to the 300 -series
alone, and pertained only to 2014 and 2015. Th us, we do not consider that MOFCOM coherently
disclosed the factual basis of its finding that the price of domestic like products was even lower than
the cost during the injury POI.
7.358. Based on the foregoing, we find that Japan has established that MOFCOM did not properly
disclose the essential facts underlying its causation determination in relation to the fluctuation in
nickel prices.
7.7.3.5.2 Cost of environment regulations
7.359. Japan notes that MOFCOM found that the impact of the cost of environmental regulations
did not preclude a finding that subject imports caused injury to the domestic industry, because the
total period expenses of five domestic companies, including environmental protection expenses, did
not increase significantly during the POI.545 Japan contends that MOFCOM should have disclosed the
factual basis for the finding that the total period expenses of these companies did not increase
significantly during the POI.546 According to Japan, MOFCOM's failure to make such disclosure was
even more serious because Japanese respondents had provided MOFCOM with data indicating that

537 China's first written submission, para. 870.
538 China's response to Panel question No. 55, para. 128.
539 China's response to Panel question No. 55, para. 128.
540 China's response to Panel question No. 55, para. 128.
541 China's response to Panel question No. 55, paras. 128-129.
542 China's first written submission, para. 871.
543 China's first written submission, para. 871.
544 China's first written submission, para. 872.
545 Japan's first written submission, para. 599.
546 Japan's first written submission, para. 600.

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such costs did, in fact, increase.547 Moreover, Japan maintains that if China's argument is that it was
not required to disclose this cost data because they were confidential, then it must prove that
MOFCOM provided sufficient non -confidential summaries. 548 China contends that MOFCOM's
disclosure that the costs of these five domestic companies did not increase significantly was
adequate under Article 6.9, and more detailed inf ormation would have led to disclosure of
confidential facts.549
7.360. In the disclosure document, MOFCOM noted the argument made by interested parties that
the "strict environmental standards caused the cost of companies to rise, causing injury to the
domestic industry".550 MOFCOM then stated as follows:
[R]egarding the impact of environmental protection, the investment in environmental
protection will increase the cost and expenses of the enterprise. However, the total
period expenses of the five domestic product ion companies including environmental
protection expenses did not increase significantly during the injury POI. There is no
evidence to show that strict environmental standards caused material injury to the
domestic industry. The impact of environmental protection cannot refute the causal link
between dumped imports and material injury to domestic industry. In the final
determination, the Investigating Authority decided to maintain the preliminary
determination.551
7.361. We note that in the absence of sufficient arguments from Japan challenging the confidential
treatment of the expenses of the domestic production companies, we must presume that the
expenses of these companies constituted confidential information that MOFCOM could not disclose.
However, an investigating authority is not exempted from its disclosure obligations under Article 6.9
when the essential facts in question are confidential. Instead, an investigating authority may meet
its disclosure obligations by providing non-confidential versions of the confidential information. But
this does not mean that an investigating authority necessarily has to include, as part of its Article 6.9
disclosure, all evidence that was on the non -confidential file of the investigating authority (which
interested parties had access to). Indeed, as we noted above, Article 6.9 is not meant to duplicate
the requirements of Article 6.4, which requires tha t investigating authorities provide, whenever
practicable, timely opportunities to interested parties to see information that is relevant to the
presentation of their case.
7.362. In paragraphs 7.258-7.259 of this Report, as part of our review of Japan's causation claims,
we noted that MOFCOM found that, whatever the actual costs of environmental protection were to
the domestic industry, those costs did not push the industry's total expenses significantly higher.
We also noted that per China this finding was based on record evidence of the total expen ses of
domestic producers, and this information was provided in indexed form in the non -confidential
versions of the questionnaire responses of the domestic producers. The disclosure document through
its references to the expenses of the five domestic comp anies made it clear whose specific data
MOFCOM were referring to, and we note that th ese data were on MOFCOM's file and available to
Japanese respondents.
7.363. Based on the foregoing, we find that Japan has not established that MOFCOM acted
inconsistently with Article 6.9 because it failed to make adequate disclosure of the essential facts
under consideration that formed the basis for its causation determination in relation to environmental
costs.

548 Japan's second written submission, paras. 430-432.
549 China's first written submission, para. 874.
550 MOFCOM's disclosure (Exhibit JPN-18.b), p. 35.
551 MOFCOM's disclosure (Exhibit JPN-18.b), p. 36.

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7.7.3.6 Definition of the domestic industry
7.364. Japan contends that MOFCOM f ailed to disclose the detailed method of calculating the
domestic industry's proportion of domestic production or the relevant supporting data. 552
In particular, per Japan, MOFCOM should have, but failed to disclose the following553:
a. meaning of the phrase "commodity volume";
b. names of companies supporting the domestic industry's application; and
c. figures for the commodity volume of billets (slabs) and production volume of coils and
plates.
7.365. China contends that it was clear from the disclosure document that MOFCOM used the phrase
"commodity volume" to refer to the external sales volume of the domestic producers. 554 China also
submits that the disclosure document named the companies that supported the domestic industry's
application.555 In addition, China argues that MOFCOM was not required to disclose individual data
for billets (slabs), coils or plates because considering these product categories were part of a single
like product, the essential fact was the total production data of these product categories.556
7.366. In its disclosure document, MOFCOM stated as follows:
The sales volume of the commodity billet was actually the partial production output of
stainless steel billet in the case. Therefore, the Investigating Authority decided to
maintain the preliminar y finding in the final determination, and calculated the
production output of stainless steel billet and hot -rolled stainless steel plate (coil) by
using commodity volume of stainless steel billet, plus the production output of hot-rolled
stainless steel plate (coil), as the indicator.
According to the data provided by Stainless Steel Council of China Special Steel
Enterprises Association, the national total production output of the stainless steel billet
and hot-rolled stainless steel plate (coil) within the POI was 10,950,400 tons in 2014,
11,055,200 tons in 2015, 12,107,600 tons in 2016, 11,737,000 tons in 2017 and
2,760,300 tons in January -March of 2018, and the total production output of the
stainless steel billet and hot -rolled stainless steel plate (coil) of the Applicant and
supporting companies was 7,137,800 tons, 7,649,800 tons, 9,160,900 tons,
8,932,800 tons and 2,246,200 tons respectively. The proportion that the production
output of the Applicant and supporting companies accounted for out of the national total
production output in the case was 65.18%, 69.20%, 75.66%, 76.11% and 81.37%
respectively. Therefore, the Investigating Authority determined that the Applicant and
supporting companies could represent the domestic industry in the prel iminary
determination according to Article 11 of Anti-Dumping Regulations, and the data could
be taken as the basis for analysis of the causal link between dumping and injury. The
domestic industry data based by this determination were from the above domes tic
producer unless otherwise specified.557
7.367. With respect to the meaning of "commodity volume", we note from the excerpt set out above
that MOFCOM stated that the sales volume of the commodity billet was actually the partial production
output of stainless st eel billet. It then stated that "[t]herefore" it had decided to calculate the
production output of billet and plates (coil) by " using commodity volume of stainless steel billet",
plus the production output of hot-rolled stainless steel plate (coil), as the indicator. In our view, an
interested party would be able to understand from these statements that MOFCOM used the phrase
"commodity volume" to refer to the sales volume of billets (slabs).

552 Japan's first written submission, para. 602.
553 Japan's first written submission, para. 602.
554 China's first written submission, para. 886.
555 China's first written submission, para. 878-882.
556 China's first written submission, para. 888.
557 MOFCOM's disclosure (Exhibit JPN-18.b), p. 15. (emphasis added)

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7.368. With respect to the identity of those domestic companies that supported the application, we
note that on page 1 of the disclosure document, MOFCOM stated as follows:
On June 22, 2018, on behalf of the domestic stainless steel billet and hot-rolled stainless
steel plate/coil industry, Shanxi Taigang Stainless Steel Co., Ltd. officially submitted an
application to the Investigating Authority to request an anti -dumping investigation on
stainless steel billet and hot-rolled stainless steel plate/coil originating in the EU, Japan,
Korea and Indonesia. Baosteel Stainless Steel Co., Ltd., Beihai Chengde Ferronickel and
Stainless Steel Co., Ltd., Beihai Chengde Metal Rolling Co., Ltd., Gansu Jiu Steel Group
Hongxing Iron & Steel Co., Ltd. and Angang Lianzhong Stainless Steel Corporation
supported this application.558
7.369. Thus, on page 1 MOFCOM identified the companies that supported the application at the
time it was made. Japan notes that the supporters identified above did not remain constant through
the course of the proceedings before MOFCOM. In particular, Baosteel Stainless Steel Co., Ltd.
(Baosteel) was excluded from the scope of the domestic industry. But we note that on page 16 of
the disclosure document, MOFCOM explained that Baosteel was excluded from the domestic industry.
Thus, interested parties were made aware of the change in the composition of supporter companies
as part of MOFCOM's disclosure of the essential facts, which shows, in our view, that MOFCOM
adequately disclosed the names of supporter companies.
7.370. With respect to the figures pertaining to the sales volume of billets (slabs) (which MOFCOM
used as an indicator for its production volume), and the production volume of coils and plates, we
note that MOFCOM did not disclose separate data for billets (slab s), coils, and plates, and instead
disclosed only an aggregate data of these three product categories. MOFCOM disclosed that to arrive
at these figures it used the production volume of coils and plates, and the commodity volume of
billets (slabs). We agree with China that considering billets (slabs), coils, and plates were part of the
domestic like product as a whole, the essential facts for the purpose of the definition of the domestic
industry, were the aggregate data, and not separate data for billets (s labs), coils , and plates.
In particular, considering that there is no requirement in the Anti-Dumping Agreement to separately
consider the production data of each constituent of the domestic like product, in our view Japan has
not established that MOFCOM failed to act consistently with Article 6.9 by failing to disclose separate
data for billets (slabs), coils, and plates.
7.371. Based on the foregoing, we find that Japan has not established that MOFCOM failed to
disclose the essential facts that formed the basis for its definition of the domestic industry.
7.8 Japan's claims concerning MOFCOM's public notice
7.8.1 Introduction
7.372. Japan makes claims under Articles 12.2 and 12.2.2 of the Anti -Dumping Agreement
challenging MOFCOM's alleged failure to make the requisite degree of disclosure in its public notice
setting out its final determination. With one exception, Japan's claims alleging the lack of disclosure
in this context focus on aspects of MOFCOM's final determination that it also challenges on a
substantive basis. The exc eption is Japan's claims on public notice concerning
MOFCOM's determination of the product under consideration, which Japan does not challenge on a
substantive basis.
7.8.2 Articles 12.2 and 12.2.2 of the Anti-Dumping Agreement
7.373. Articles 12.2 and 12.2.2 of the Anti-Dumping Agreement state as follows:
Public notice shall be given of any preliminary or final determination, whether
affirmative or negative, of any decision to accept an undertaking pursuant to Article 8,
of the termination of such an undertaking, and of the termination of a definitive
anti-dumping duty. Each such notice shall set forth, or otherwise make available
through a separate report, in sufficient detail the findings and conclusions reached on
all issues of fact and law considered material by th e investigating authorities. All such

558 Emphasis added.

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notices and reports shall be forwarded to the Member or Members the products of which
are subject to such determination or undertaking and to other interested parties known
to have an interest therein.
A public notice of conclusion or suspension of an investigation in the case of an
affirmative determination providing for the imposition of a definitive duty or the
acceptance of a price undertaking shall contain, or otherwise make available through a
separate report, all relevant information on the matters of fact and law and reasons
which have led to the imposition of final measures or the acceptance of a price
undertaking, due regard being paid to the requirement for the protection of confidential
information. In particular, the notice or report shall contain the information described
in subparagraph 2.1, as well as the reasons for the acceptance or rejection of relevant
arguments or claims made by the exporters and importers, and the basis for any
decision made under subparagraph 10.2 of Article 6.559
7.374. The "public notice" at issue here is MOFCOM's final determination (Exhibit JPN-5.b). Pursuant
to Article 12.2.2, a public notice must contain all relevant information on matters of fact and law,
which have led to the imposition of final measures. The chapeau of Article 12.2.2, i.e. Article 12.2,
requires publication of findings and conclusions on all issues of fact and law considered material by
the investigating authorities. According to the DSB report in EU – Footwear (China), with which we
agree, what is "material" in this respect refers to an issue that must be resolved in the course of the
investigation in order for the investigating authority to reach its determination on whether to impose
a definitive anti-dumping duty.560
7.375. Article 12.2.2 applies once the investigating authority has made its final determination. The
provision has been understood to reflect the principle that those parties whose interests are affected
by the imposition of final anti -dumping and countervailing duties are entitled to know, as a matter
of fairness and due process, the facts, law and reasons that have led to the imposition of such
duties.561 We agree with the DSB report in EU – Footwear (China) that this provision requires the
authority to explain its final determination, provi ding sufficient background and reasons for that
determination, such that its reasons for concluding as it did can be discerned and are understood.562
7.376. Likewise, we agree with the DSB report in China – X-Ray Equipment, that the level of detail
of the description of the authority's findings and conclusions must be sufficient to allow (a) inter alia,
the interested parties to assess the conformity of those findings and conclusions with domestic law,
and avail themselves of the Article 13 judicial review mechanism where they consider it necessary;
(b) exporting Members to ascertain the conformity of the findings and conclusions with the provisions
of the WTO Agreement, and to avail the WTO dispute settlement procedures where they consider it
necessary.563
7.377. We also n ote that having found substantive violations, several panels have found it
unnecessary to address claims under Articles 12.2 and 12.2.2. 564 The panel in EC – Bed Linen
explained the rationale of this approach as follows:
A notice may adequately explain the determination that was made, but if the
determination was substantively inconsistent with the relevant legal obligations, the
adequacy of the notice is meaningless. Further, in our view, it is meaningless to consider
whether the notice of a decision that is substantive[ly] inconsistent with the
requirements of the [Anti-Dumping] Agreement is, as a separate matter, insufficient
under Article 12.2. A finding that the notice of an inconsistent action is inadequate does
not add anything to the finding of violation, the resolution of the dispute before us, or
to the understanding of the obligations imposed by the [Anti-Dumping] Agreement.565

559 Emphasis added.
560 Panel Report, EU – Footwear (China), para. 7.844.
561 Appellate Body Report, China – GOES, para. 258.
562 Panel Report, EU – Footwear (China), para. 7.844.
563 Panel Report, China – X-Ray Equipment, para. 7.459.
564 Panel Reports, EC – Bed Linen, para. 6.259; EC – Salmon (Norway), para. 7.831; and China – GOES
(Article 21.5 – US), para. 7.200.
565 Panel Report, EC – Bed Linen, para. 6.259.

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7.378. We generally agree with this approach, and will apply it in this case unless we consider that
additional findings under Articles 12.2 and 12.2.2 are necessary for the successful resolution of this
dispute. In addition, we note that we have rejected in previous sections of the report some of Japan's
substantive claims that are based on MOFCOM's alleged failure to provide reasoned and adequate
explanations in its final determination (which, in fact, constitutes MOFCOM's public notice). To the
extent we have found, as part of our review of tho se substantive claims, that Japan has not
established that MOFCOM failed to provide a reasoned and adequate explanation of the relevant
issues in its public notice, we may, as appropriate, reach the same finding as part of our review of
Japan's claims under Articles 12.2 and 12.2.2 of the Anti -Dumping Agreement. In this regard, we
agree with the following approach of the DSB report in US – Softwood Lumber VI:
Canada specified that the asserted requirement for a "reasoned and adequate
explanation" of the USI TC's determination, which it alleges was not provided in this
case, did not derive from Articles 12.2.2 and 22.5, but rather from the substantive
obligations of Article 3 of the [Anti-Dumping] Agreement and Article 15 of the
SCM Agreement. In our view, Canada's claims under Articles 12.2.2 of the
[Anti-Dumping] Agreement and 22.5 of the SCM Agreement are thus dependent on the
disposition of the specific claims of violation.
In evaluating these claims, we note that our conclusions with respect t o each of the
alleged substantive violations asserted by Canada rest on our examination of the
USITC's published determination, which constitutes the notices provided by the
United States under Article 12.2.2 of the [Anti-Dumping] Agreement and Article 22.5 of
the SCM Agreement with respect to the injury determination in this case. No additional
materials have been cited to us with respect to the determination for consideration in
determining whether or not the USITC's determination are consistent with the relevant
provisions of the Agreements. Thus, if we find no violation with respect to a particular
specific claim, such a conclusion must rest on the USITC's published determination.
In this circumstance, it is clear to us that no violation of Articles 12.2.2 and 22.5 could
be found to exist in this case, where it is not disputed that the USITC determination
accurately reflects the analysis and determination in the investigations . On the other
hand, if we find a violation of a specific substantive requirement, the question of whether
the notice of the determination is "sufficient" under Article 12.2.2 of the
[Anti-Dumping] Agreement or Article 22.5 of the SCM Agreement is, in our view,
immaterial.566
7.8.3 Price effects
7.379. Japan challenges the deficiencies in MOFCOM's public notice regarding the analysis of price
effects. Japan contends that MOFCOM's finding regarding the existence of price effects and
depressive effect of subject imports on the prices of the domestic like product is "material" to the
decision to impose definitive measures.567 However, according to Japan, MOFCOM failed to make the
disclosures required under Articles 12.2 and 12.2.2. Specifically, Japan contends that MOFCOM failed
to make the requisite disclosures regarding its (a) findings on price comparability for billets (slabs),
coils, and plates; (b) its series -by-series price effects analysis; (c) relevant findings supporting
MOFCOM's consideration of the differences among the various series of the product; (d) findings
regarding the brand effects of subject imports. China rejects Japan's submissions.
7.380. In section 7.3 of the Report, we have found several substantive deficiencies in
MOFCOM's price effects analysis, as set out in its final determination. In light of those findings, we
are of the view that any additional finding that MOFCOM failed to also comply with Articles 12.2
and 12.2.2 when presenting its price effects analysis in the final determinatio n is not necessary to
achieve a positive resolution of this dispute.
7.381. Accordingly, we make no findings with respect to Japan's claims under Articles 12.2
and 12.2.2 challenging the lack of disclosure regarding MOFCOM's price effects analysis in the public
notice.

566 Panel Report, US – Softwood Lumber VI, paras. 7.40-7.41. (emphasis added; fn omitted)
567 Japan's first written submission, para. 625.

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7.8.4 Product under consideration
7.382. Japan notes that MOFCOM found billets (slabs), coils , and plates to be part of the same
category of products, but asserts that in making this finding MOFCOM failed to provide reasons for
ignoring the price and non -price differences among billets (slabs), coils , and plates. 568 Thus,
according to Japan, MOFCOM's disclosure with respect to the product under consideration was
inconsistent with Articles 12.2 and 12.2.2. China rejects Japan's submissions. China contends that
neither the Anti-Dumping Agreement nor Chinese domestic law sets out any requirements regarding
the definition of the product under consideration , and thus the criteria that MOFCOM took into
account in defining the product under consideration is not a materia l issue of fact or law in this
dispute.569 China contends that in any case MOFCOM disclosed its assessment regarding the
similarities and differences between the product categories that served to inform its determination
of the product under consideration.570
7.383. We note that Japan challenges MOFCOM's public notice of its finding that billets (slabs), coils,
and plates were part of the same category of products, arguing that it fails to set out MOFCOM's
reasons for ignoring the price and non-price differences among billets (slabs), coils, and plates. We
recall that in addressing Japan's substantive claims on price effects, we made findings regarding
MOFCOM's assessment of the price and non -price differences between billets (slabs), coils , and
plates. Specifically , as set out in paragraph 7.171 above, we have found several substantive
deficiencies in MOFCOM's finding regarding the price and non-price differences between billets
(slabs), coils , and plates. While we note the parties' disagreement on whether the criteria that
MOFCOM took into account in defining the product under consideration is a material issue of fact or
law under Article 12. 2, considering we have already found substantive violations in
MOFCOM's assessment of the price and non -price differences between billets (slabs), coils , and
plates, we are of the view that any additional finding that MOFCOM failed to also comply with
Articles 12.2 and 12.2.2 in the public notice of its assessment of the product under consideration in
the final determination is not necessary to resolve this dispute.
7.384. Accordingly, we make no findings with respect to Japan's claims under Articles 12.2
and 12.2.2 challenging the lack of disclosure regarding MOFCOM's assessment of the product under
consideration in the public notice.
7.8.5 Cumulation
7.385. Japan contends that MOFCOM failed to disclose the relevant facts and other matters in
sufficient detail with respect to its finding to cumulate imports from the European Union, Indonesia
Japan, and Korea. In particular, Japan contends that without concrete explanations as to why
MOFCOM found similarities and denied the existence of differences between the exports from these
four countries, and the factual basis for these decisions, the interested parties and exporting
Members could not understand why their claims and evidence as to the differences among the three
products were rejected. 571 For this same reason, they could al so not examine whether or not
MOFCOM's use of cumulative assessment conformed to the requirements of domestic law and/or the
Anti-Dumping Agreement.572
7.386. China contends that in presenting its analysis on cumulation, MOFCOM described its analysis
in detail and addressed all arguments raised by the interested parties.573 China asserts that MOFCOM
was not required to provide more details to comply with the public notice obligations under
Articles 12.2 and 12.2.2.574
7.387. We note that MOFCOM stated as follows in the public determination:
3. Competitive condition between dumped imports.

568 Japan's first written submission, paras. 620-623.
569 China's first written submission, paras. 909 and 911.
570 China's first written submission, paras. 912-916.
571 Japan's first written submission, para. 645.
572 Japan's first written submission, para. 645.
573 China's first written submission, para. 955.
574 China's first written submission, para. 956.

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The investigation shows that the physical and chemical characteristics, product usage,
raw material, production technology and other aspects of dumped imports originating
in the EU, Japan, Korea and Indonesia were basically the same; the companies in the
EU, Japan and Korea and Indonesia sold the dumped imports to the domestic market
by direct sale, distribution and other manners, which accounted for a relevant market
share of the domest ic market; all manufacturers or dealers had the same or similar
pricing strategies; the dumped imports had the same customer group, and the domestic
downstream users could freely purchase and use the dumped imports originating in the
EU, Japan, Korea and I ndonesia. To sum up, the Investigating Authority determined
that there was a competitive relationship between dumped imports in the preliminary
determination.575
4. Competitive condition between dumped imports and domestic like products.
The investigation shows that the physical and chemical characteristics, raw material,
production process, product usage, sales channel and other aspects of the dumped
imports and domestic like products were basically the same. The consumer market of
the domest ic stainless steel billet and hot -rolled stainless steel plate (coil) was a
competitive and open market, the dumped imports and domestic like products
competed with each other in the domestic market, and the price was an important factor
that affected the product sales. The sales channel of the dumped imports and domestic
like products was same or similar, and they were sold on domestic market by direct
sale, distribution and other manners; the customer group of them was same and
intersected, and the domest ic downstream users purchased and used the dumped
imports and domestic like products alternatively; the sale of products of all sources did
not have obvious time and regional preference.
Accordingly, the Investigating Authority determined that there was a direct competitive
relationship between dumped imports and domestic like products in the preliminary
determination.576
7.388. In our view, Japan has not established that MOFCOM's findings set out above do not explain
in a manner consistent with Articles 12.2 and 1 2.2.2 the reasons underlying its findings on
cumulation. We recall that our focus under Articles 12.2 and 12.2.2 is on the adequacy of the
explanations and reasons provided by the investigating authority in its public notice. Having already
found that MOFCOM's explanations of its cumulation findings are consistent with China's substantive
obligations under Articles 3.3 and 3.1, we see no basis to find that MOFCOM's explanations were
deficient under Articles 12.2 and 12.2.2.
7.389. Based on the foregoing, we find that Japan has not established that MOFCOM's public notice
with respect to its cumulation analysis was inconsistent with Articles 12.2 and 12.2.2.
7.8.6 Impact analysis
7.390. Japan makes two main arguments challenging the adequacy of MOFCOM's disclosure in the
public notice with respect to its impact analysis.
7.391. First, Japan refers to the following finding made by MOFCOM in the context of the impact
analysis.
In summary, despite the improvement of the domestic industry's production and
financial situation for individual years, due to the impact of increased volume and
decreased price of dumped imports, during the injury POI, under the circumstance of
favorable market conditions such as steady growth in domestic demand and positive
industrial policies, the domestic industry was still facing severe production and operation
pressures, production capacity was not effectively released, market share saw an overall

575 MOFCOM's final determination (Exhibit JPN-5.b), p. 31.
576 MOFCOM's final determination (Exhibit JPN-5.b), pp. 31-32.

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downward trend, and ending inventory was high, pretax profits were still at a low level,
and investment did not receive returns that it should have had.577
7.392. Japan contends that MOFCOM did not explain what these "positive industrial policies" and
"severe production and operation pressures" were, and gave no factual basis for these allegations
or for the statement that "investment did not receive returns that it should have had".578
7.393. Second, Japan focused on the following excerpt from MOFCOM's determination:
The Investigating Authority considered that the determination of whether domestic
industry was subject to material injury should not be based solely on certain indices of
the domestic industry, but all economic indices and the impact of other factors in the
domestic industry should be considered. The Investigating Authority comprehensively
considered the changes in all indices and found that the domestic industry suffered from
material injury. Therefore, the assertions of the above -mentioned interested parties
were not established.579
7.394. Japan contends that MOFCOM should have disclosed a detailed explanation about the "other
factors", and specifically which factors played a decisive role in overriding the positive economic
indices during MOFCOM's alleged comprehensive consideration of all relevant indices.580
7.395. China notes that Japan's submissions challenging the adequacy of MOFCOM's disclosure in
the public notice with respect to its impact analysis are "virtually identical" to its arguments under
Article 6.9, where it challenged MOFCOM's disclosure of the essential facts pertaining to its impact
analysis.581 Nonetheless, China submits that MOFCOM provided in other parts of its public notice, a
more detailed explanation on each of the issues raised by Japan.582
7.396. We note that Japan challenged as part of its claims under Article 6.9 the adequacy of the
disclosure with respect to these same findings (which were set out in the disclosure document that
MOFCOM issued before the final determination). The grounds advanced by Japan in support of its
claims under Articles 12.2 and 12.2.2 are the same that it advanced as part of its Article 6.9 claims,
which we rejected in paragraph 7.352 above. The same considerations that we set out in those
paragraphs also lead us to reject Japan's claims under Articles 12.2 and 12.2.2. In particular, we
consider, that while Japan focuses on certain excerpts from MOFCOM's final determination, a review
of MOFCOM's injury analysis as a whole show that MOFCOM provided sufficient reasons for its injury
analysis, and those reasons could be understood from the final determination.
7.397. Based on the foregoing, we find that Japan has not established that MOFCOM's public notice
with respect to its injury analysis was inconsistent with Articles 12.2 and 12.2.2 of the
Anti-Dumping Agreement.
7.8.7 Causation
7.398. Japan makes two main arguments challenging MOFCOM's alleged failure to disclose in the
public notice findings and relevant information with respect to the causal relation between subject
imports and the injury to the domestic industry.
a. First, Japan contends that MOFCOM failed to make the necessary disclosure in the public
notice when rejecting the interested parties' arguments regarding the negative impact of
the increase in nickel prices on cost of domestic like products, and the state of the domestic
industry.583

577 MOFCOM's final determination (Exhibit JPN-5.b), p. 49. (emphasis added)
578 Japan's first written submission, para. 648.
579 MOFCOM's final determination (Exhibit JPN-5.b), p. 50.
580 Japan's first written submission, para. 653.
581 China's first written submission, para. 957.
582 China's first written submission, paras. 959-962 and 965-967.
583 Japan's first written submission, para. 657.

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b. Second, Japan submits that MOFCOM failed to make the necessary disclosure in the public
notice when rejecting the interested parties' arguments regarding the negative impact of
strict environment standards on the domestic industry.584
7.399. China contends that MOFCOM (a) properly disclosed its reasoning with respect to the
negative impact of increased price of nickel, and (b) in explaining that total period expenses of the
five domestic companies, including environmental protection expenses, did not increase, MOFCOM
properly disclosed its reasoning for rejecting interested parties' arguments regarding the alleged
negative impact of strict environment standards on the domestic industry.585
7.400. With respect to the negative impact of increased price of nickel, in paragraph 7.254 above,
we have found, as part of our examination of Japan's claims on causation, substantive deficiencies
in MOFCOM's examination of the impact of increased price of nickel. In light of those findings, we
are of the view that any additional finding that M OFCOM failed to also comply with Articles 12.2
and 12.2.2 when making its causation determination in this regard is not necessary to resolve this
dispute.
7.401. Accordingly, we do not find it necessary to make findings regarding Japan's claims under
Articles 12.2 and 12.2.2 challenging the lack of disclosure regarding MOFCOM's price effects analysis
in the public notice.
7.402. With respect to the negative impact of strict environment standards on the domestic
industry, we have found, as part of our examination of Japan's claims on causation, that Japan has
failed to establish that MOFCOM failed to objectively examine in its final determination the evidence
submitted by the interested parties concerning the impact on the domestic industry of the
cost-increases associate d with the adoption of stricter environmental standards. Considering we
have found the explanations provided by MOFCOM in its final determination in this regard to be
substantively consistent with Articles 3.1 and 3.5, we see no reason to find that MOFCOM failed to
adequately explain or provide reasons for its findings in a manner consistent with Articles 12.2
and 12.2.2.
7.403. Based on the foregoing, we find that Japan has not established this aspect of Japan's claim
under Articles 12.2 and 12.2.2.
7.8.8 Definition of the domestic industry
7.404. The factual basis of Japan's claims under Articles 12.2 and 12.2.2 challenging the disclosure
with respect to the definition of the domestic industry is identical to those it advanced as part of its
Article 6.9 claims.586 In particular, like with respect to its claims under Article 6.9, Japan contends
that the final determination does not disclose587:
a. the meaning of the phrase "commodity volume";
b. the names of companies supporting the domestic industry's application; and
c. the figures for the commodity volume of billets (slabs) and production volume of coils and
plates.
7.405. Noting that Japan relies on the same type of arguments to support its claims under
Articles 12.2 and 12.2.2 that it raised under Article 6.9, China contends, that MOFCOM's public notice
explained the meaning of "commodity volume" and identified the names of companies supporting
the domestic industry's application.588 China also contends that considering the domestic like product
comprised billets (slabs), coils, and plates as a whole, MOFCOM was not required to provide as part
of its public notice individual data for each of these product categories.

584 Japan's first written submission, para. 657.
585 China's first written submission, paras. 972-974.
586 Japan's first written submission, para. 667.
587 Japan's first written submission, para. 667.
588 China's first written submission, paras. 978-979.

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7.406. We rejected all these three arguments whe n addressing Japan's claims under Article 6.9.
The same considerations that led us to reject those arguments in the context of Japan's claims under
Article 6.9 (set out in paragraphs 7.367-7.370 above) also lead us to reject these three arguments
in the context of Japan's claims under Articles 12.2 and 12.2.2. Accordingly, we find that Japan has
not established that MOFCOM failed to provide sufficient background and reasons for its findings
with respect to the definition of the domestic industry.
7.407. Based on the foregoing, we find that Japan has not established that MOFCOM's public notice
with respect to the definition of the domestic industry was inconsistent with Articles 12.2 and 12.2.2
of the Anti-Dumping Agreement.
7.9 Japan's consequential claims under Article 1 of the Anti -Dumping Agreem ent and
Article VI:6(a) of the GATT 1994
7.408. Japan makes claims under Article 1 of the Anti -Dumping Agreement and Article VI :6(a) of
the GATT 1994, which are entirely dependent on Japan's claims of violation under other provisions
of the Anti -Dumping Agreement . We do not consider that making findings with respect to
Japan's purely consequential claims will contribute towards the positive resolution of this dispute.
Accordingly, we make no findings with respect to Japan's claims under Article 1 of the Anti-Dumping
Agreement and Article VI:6(a) of the GATT 1994.
8 CONCLUSIONS AND RECOMMENDATION
8.1. For the reasons set forth in this Report, we conclude as follows:
a. With respect to China's request that we find that Japan is precluded, in light of its panel
request, from making the claims presented in its first written submission challenging
MOFCOM's definition of the domestic industry:
i. For the reasons set out in paragraph 7.15 above, we find that Japan is not precluded
from making the claims presented in its first written submission challenging
MOFCOM's definition of the domestic industry; and
ii. Japan's claim challenging MOFCOM's definition of the domestic industry, based on
Article 3.1 of the Anti-Dumping Agreement, is a consequential claim.
b. With respect to Japan's claims concerning MOFCOM's definition of the domestic industry:
i. Japan has established that MOFCOM's definition of the domestic industry was
inconsistent with Article 4.1 of the Anti -Dumping Agreement because MOFCOM failed
to provide a reasoned and adequate explanation of its finding that the production of
the firms included in the domestic industry represented a "major proportion" of the
total production of all Chinese producers.
ii. Japan has not established that MOFCOM's def inition of the domestic industry was
inconsistent with Article 4.1 of the Anti-Dumping Agreement because of:
(1) the alleged discrepancy between the domestic industry's market share data and
its share in domestic production; and
(2) the alleged lack of representativeness of the domestic industry.
iii. In the light of these findings, and for the reasons set out in paragraph 7.57 of this
Report, we decline to make additi onal findings in relation to Japan's consequential
claim under Article 3.1 of the Anti-Dumping Agreement.
c. With respect to Japan's claims concerning MOFCOM's decision to cumulate imports from
the different sources under investigation:
i. Japan has not established that MOFCOM acted inconsistently with Articles 3.1 and 3.3
of the Anti-Dumping Agreement in finding that a cumulative assessment of the effects

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of the subject imports was appropriate in light of , inter alia , the conditions of
competition between the i mported products , and the conditions of competition
between the imported products and the like domestic product.
ii. In light of this finding, we also reject Japan's claims that the MOFCOM's price effects
analyses, impact analyses and causation findings were, respectively, inconsistent with
Articles 3.2, 3.4, and 3.5 of the Anti -Dumping Agreement as a consequence of
MOFCOM's alleged violation under Articles 3.1 and 3.3.
d. With respect to Japan's claims concerning MOFCOM's price effects analysis:
i. Japan has established that MOFCOM acted inconsistently with Articles 3.1 and 3.2 of
the Anti-Dumping Agreement because in making its findings on price effects,
MOFCOM failed to ensure that there was no issue of price comparability between the
product categories. In particular, MOFCOM acted inconsistently with these provisions
for the following reasons:
(1) to the extent that MOFCOM's price effects findings were based on China's view
that the obligation to ensure price comparability is triggered only when there
are significant price differences between product categories , MOFCOM
proceeded on a misconceived understanding of the notion of price
comparability;
(2) MOFCOM failed to base its determination of price comparability on an objective
assessment of positive evidence because it relied on its scope of subject product
findings, without any further explanation, to show that there were no price
comparability issues between product categories;
(3) MOFCOM failed to identify the best information available relied on to make the
finding of "reasonable differences" in prices, and MOFCOM did not explain how
the best information available it selected supported this finding. MOFCOM also
did not explain how a finding of "reasonable differences" between product
categories could be understood to mean that there was no issue of price
comparability as regards the products categories; and
(4) MOFCOM did not objectively examine the record evidence regarding the
non-price differences between product categories submitted by Japanese
respondents before MOFCOM.
ii. Japan has established that MOFCOM's series -specific price effects analyses were not
based on an objective examination of positive evidence and, therefore, inconsistent
with Articles 3.1 and 3.2 of the Anti-Dumping Agreement, because MOFCOM failed to
preclude the possibility that the observed changes in average series -specific prices
resulted from changes in the product category mix rather than genuine changes in
series-specific prices.
iii. Japan has es tablished that MOFCOM's overall conclusion of price depression was
inconsistent with Articles 3.1 and 3.2 of the Anti -Dumping Agreement because it was
dependent on MOFCOM's flawed findings of price comparability between product
categories and series-specific price effects.
iv. In the light of these findings, and for reasons set out in paragraphs 7.161, 7.162,
7.174, and 7.177 above, we decline to make findings on the merits of Japan's
additional arguments in support of its claim under Articles 3.1 and 3.2 of the
Anti-Dumping Agreement.
e. With respect to Japan's claims concerning MOFCOM's analysis of the state of the domestic
industry:
i. Japan has established that MOFCOM acted inconsistently with Articles 3.1 and 3.4 of
the Anti-Dumping Agreement because:

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(1) MOFCOM's findings on trends in sales prices were based on its flawed
consideration of price effects;
(2) MOFCOM failed to perform an objective examination of domestic market share
for the purpose of examining the impact of the subject imports on the domestic
industry; and
(3) MOFCOM failed to objectively examine the evidence concerning capacity
utilization and ending inventory, and did not provide a reasoned and adequate
explanation of its findings with respect to these economic indices.
ii. Japan has not established that MOFCOM acted inconsistently with Articles 3.1 and 3.4
of the Anti-Dumping Agreement when examining, in the context of its impact analysis,
the domestic industry's sales volume, apparent domestic consumption, pre-tax profits,
and return on investment.
iii. In the light of these findings, and for reasons set out in paragraph 7.228 above, we
decline to make findings on the merits of Japan's additional arguments in support of
its claim under Articles 3.1 and 3.4 of the Anti-Dumping Agreement.
f. With respect to Japan's claims concerning MOFCOM's determination on causation:
i. Japan has established that MOFCOM's causation analysis was inconsistent with
Articles 3.1 and 3.5 of the Anti-Dumping Agreement because:
(1) MOFCOM's causation analysis relied on its price effects and impact analyses,
which w ere inconsistent with Articles 3.1, 3.2 and 3.4 of the
Anti-Dumping Agreement;
(2) MOFCOM's analysis of the increase in nickel prices since mid -2016 as a factor
other than dumped imports allegedly injuring the domestic industry at the same
time was not based on an objective examination of positive evidence, and was
not reasonably and adequately explained.
ii. Japan has not established that MOFCOM erred by not examining the decrease in the
price of nickel from May 2014 to the end of 2015 as a factor other than dumped imports
allegedly injuring the domestic industry at the same time.
iii. Japan has not established that MOFCOM failed to objectively examine the evidence
submitted by the interested parties concerning the impact on the domestic industry of
the cost-increases associated with the adoption of stricter environmental standards.
iv. In the light of these findings, and for reasons set out in paragraph 7.240 above, we
decline to make findings on the merits of Japan's claim under Article 3.1 and the
second sentence of 3.5 of the Anti-Dumping Agreement.
g. With respect to Japan's claims concerning the confidential treatment of certain company
names in the domestic industry's application:
i. Japan has not established that MOFCOM acted inconsistently with Article 6.5 of the
Anti-Dumping Agreement when it accepted, by implication, that the good cause the
applicant presented justified the redaction of the company names at the time it made
its application.
ii. Japan has not established that MOFCOM acted inconsistently with Article 6.5.1 of the
Anti-Dumping Agreement by not requiring the interested parties that provided the
confidential information to furnish non-confidential summaries thereof.
h. With respect to Japan's claims concerning the disclosure of essential facts under
consideration which formed the basis for MOFCOM's decision to apply definitive measures:

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i. Japan has established, for the reasons set out in paragraph 7.319 above, that MOFCOM
acted inconsistently with Article 6.9 of the Anti -Dumping Agreement in not disclosing
the essential facts underlying its price effects analysis.
ii. Japan has established, for the reasons set out in paragraph 7.358 above, that MOFCOM
acted inconsistently with Article 6.9 of the Anti-Dumping Agreement in not disclosing
the essential facts underlying its causation determination in relation to the fluctuation
in nickel prices.
iii. Japan has not established, for the reasons set out in paragraphs 7.330, 7.337, 7.352,
7.363, and 7.371, respectively, that MOFCOM acted inconsistently with Article 6.9 of
the Anti -Dumping Agreement in relation to its disclosure of the essential facts
pertaining to the following:
(1) MOFCOM's cumulation analysis;
(2) MOFCOM's examination of the state of the domestic industry;
(3) MOFCOM's causation determination in relation to cost of environment
regulations; and
(4) MOFCOM's definition of the domestic industry.
iv. For the reasons set out in para graph 7.325 of this Report , we decline to make
additional findings on the merits of Japan's claim with respect to the alleged lack of
disclosure concerning MOFCOM's definition of the product under consideration.
i. With respect to Japan's claims concerning the adequacy of the public notice published by
MOFCOM:
i. Japan has not established, for the reasons set out in paragraphs 7.389, 7.397, 7.403,
and 7.407, respectively, that MOFCOM's public notice in relation to the following was
inconsistent with Articles 12.2 and 12.2.2 of the Anti-Dumping Agreement:
(1) MOFCOM's cumulation analysis;
(2) MOFCOM's examination of the state of the domestic industry;
(3) MOFCOM's causation determination in relation to cost of environment
regulations; and
(4) MOFCOM's definition of the domestic industry.
ii. For the reasons set ou t in paragraphs 7.381, 7.384, and 7.401 above, we decline to
make additional findings on the merits of Japan's submissions with respect to the
consistency of the following aspects of MOFCOM's public notice with Articles 12.2
and 12.2.2 of the Anti-Dumping Agreement:
(1) MOFCOM's price effects analysis;
(2) MOFCOM's definition of the product under consideration; and
(3) MOFCOM's causation determination in relation to the fluctuation in nickel prices.
j. For the reasons set out in paragraph 7.408 above, we decline to make additional findings
with respect to Japan's claims under Article 1 of the Anti -Dumping Agreement and
Article VI:6(a) of the GATT 1994.

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8.2. Under Article 3.8 of the DSU, in cases where there is an infringement of the obligations
assumed under a covered agreement, the action is considered prima facie to constitute a case of
nullification or impairment. We conclude that, to the extent that the m easures at issue are
inconsistent with the Anti-Dumping Agreement, they have nullified or impaired benefits accruing to
Japan under this agreement.
8.3. Pursuant to Article 19.1 of the DSU, we recommend that China bring its measures into
conformity with its obligations under the Anti-Dumping Agreement.