  
  
G/SCM/Q2/CHN/98  
26 January  2021 
(21-0733) Page: 1/2 
Committee on Subsidies and Countervailing Measures  Original:  English  
 
  
SUBSIDIES  
SECOND SET OF FOLLOW -UP QUESTIONS1 POSED BY THE UNITED STATES  
REGARDING THE 2017 NEW AND FULL NOTIFICATION OF CHINA2 
The following communication, dated 2 5 January  2021, is being circulated at the request of the 
delegation of the United States . 
 
_______________  
 
 
Question 1  
The United States originally asked this question : "It appears that none of the sub -central legal 
measures referenced in the sub -central section of China's notification have been published in the 
MOFCOM Gazette . Does China agree that normative documents that establish or implement a 
subsidy program at the sub -central level of government must be published in the MOFCOM Gazette 
pursuant to Ch ina's Protocol of Accession? " In response, China stated : "China has been committed 
to enhancing transparency in practice ." What is the meaning of this answer?  The United States 
considers China 's transparency obligations under its Protocol of Accession to b e critically important.  
Does China accept its obligation to publish the legal measures that establish and implement its 
subsidy programs at all levels of government?  
Question 2 
With respect to the National Integrated Circuit Investment Fund (IC Fund)  China  states that the 
shareholders vote according to the proportion of equity held.  China does not deny that the 
shareholders of the IC Fund are nearly all government entities.  Given these facts, does China agree 
that the government controls the IC Fund?  If not , please explain.  
Question 3 
What has been the rate of return of the IC Fund since its inception?  
Question 4 
Please describe the "rigid investment yields and exit methods " of the IC Fund 's decision -making 
committee.  What are the investment yields used?  
Question 5 
In response to a question regarding China 's equity investments into its state -owned enterprises, 
China states "as the state is a shareholder of state -owned enterprise s, it is fulfilling the rights and 
obligations of a shareholder  increas ing the capital in the invested enterprise by injecting the capital 
from the state-owned capital management budget " and that therefore,  "it should not be regarded 
as a subsid y." Is it China 's position that regardless of the terms and conditions under which the 
Government of China invests in a state-owned enterprise s and regardless of the financial health and 
prospects of the state -owned enterprise into which the Government of China invests , that such an 
 
1 G/SCM/Q2/CHN/87 (original questions); G/SCM/Q2/CHN/ 94 (answers).  
2 G/SCM/N/315/CHN.  G/SCM/Q2/CHN/98  
- 2 - 
  investment can never be considered a subsidy under Article 1 of the Agreement on Subsidies and 
Countervailing Measures?  
 
 
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