WORLD TRADE
ORGANIZATIONG/ADP/Q1/CHN/27
G/SCM/Q1/CHN/27
6 October 2003
(03-5242)
Committee on Anti-Dumping Practices
Committee on Subsidies and Countervailing MeasuresOriginal:  English
NOTIFICATIONS OF LAWS AND REGULATIONS UNDER
ARTICLE 18.5 AND ARTICLE 32.6 OF THE AGREEMENTS
Questions posed by the UNITED STATES
Regarding the Notification of CHINA
The following communication, 2 October 2003, has been received from the Permanent
Mission of the United States.
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Questions on Subsidies and Countervailing Measures
The United States thanks China for its noti fication of its Rules on Investigations and
Determinations of Industry Injury for Countervailing Measures (the “Rules”).1
1. Article 3 of the Rules  states that countervailing duty (“CVD”) investigations of injury
involving agricultural products shall be conducted by the State Economic and Trade Commission
(“SETC”) in conjunction with the Ministry of Agriculture.2  Could China please clarify the role of the
Ministry of Agriculture in a CVD investigation?
2.  Article 5 of the Rules defines “material injury” as “injury that has been caused to a domestic
industry and is not negligible”.  For purposes of this definition, does the concept of “negligible” injury
refer to the concept of negligible import volume addressed by Article 16 of the Rules?  If not, could
China explain its understanding of the concept of “negligible” injury?
3. Article 15.7 of the Agreement on Subsidies and Countervailing Measures (the “ASCM”)
defines the analysis for threat of material injury and states that “no one of these factors by itself can
necessarily give decisive guidance, but the total ity of the factors considered must lead to the
conclusion that further subsidized exports are imminent and that, unless protective action is taken,
material injury would occur”.  ASCM Article 15.7 also  states that “the change in circumstances which
would create a situation in which the subsidy w ould cause injury must be clearly foreseen and
imminent”. Article 7 of the Rules does not contain language implementing these provisions of ASCM
Article 15.7.  How does China intend to comply with these provisions?
4. Are the factors that SETC examines in ascertaining impact for threat analysis under
Article 7.6 of the Rules the same as the ones SETC examines for analysis of material injury under
                                                     
1 G/SCM/N/1/CHN/1/Suppl.2  (14 April 2003)
2 The United States is aware of reports that, since the time these regulations were notified, the injury
function has been transferred to the Ministry of Commerce.  However, we have continued to refer to the SETC
throughout these questions for consistency with the notified regulations.G/ADP/Q1/CHN/27
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Article 6.4 of the Rules?  If not, how does the examination of impact for threat analysis differ from
that for analysis of material injury?
5. Article 8 of the Rules details the factors to be examined in the determination of material
retardation of the establishment of a domestic industry.  Will these factors be considered in relation to
one another or is any single factor considered to be determinative?
6.  Article 11 of the Rules refers to factors which may be examined in the determination of like
product and specifically mentions “comments from consumers and producers...”.  Does China intend
to permit other interested parties to comment on this issue?  How will such comments be solicited?
7. The first sentence of Article 13 of the Rules states that “In the determination of injury to [the]
domestic industry, SETC may exclude the product un der investigation or part thereof that did not
cause injury to the domestic industry”.  The m eaning of this provision, which does not appear to
implement any portion of the ASCM, is unclear.  Could China provide an example of a factual
situation in which SETC would apply this provision?  How can SETC determine that a portion of theproduct under investigation did not cause injury before it has concluded its investigation of injury?
8. Can China please explain how it defines “negligible” as used in Articles 5 and 16 of the
Rules?  In determining whether imports are negligible in a CVD investigation, how will the Chinese
authorities address the special requirements applicable to import volumes from developing countriesconsistent with ASCM 27.10?
9.  Article 18 of the Rules states that SETC shall take account of public interest in making a
determination of injury to the domestic industry.
(a) Will interested parties have an opportunity to present evidence in this respect?
(b) Will interested parties be allowed to view the information submitted by users and consumers
of the subsidized imports, or adequate non-confidential summaries thereof?
10. Article 19 of the Rules states that the period of investigation for injury is normally the three
years immediately prior to the initiation of the investigation.  Under what circumstances would Chinause a different period?
11. According to ASCM Article 11.3 “[t]he authori ties shall review the accuracy and adequacy of
the evidence provided in the application to determine whether the evidence is sufficient to justify the
initiation of an investigation”.  Article 20 of the Rules does not contain any reference to “the accuracyand adequacy of the evidence”.  How will China ensure that its authorities examine the accuracy and
adequacy of the evidence, as required by ASCM Article 11.3?
12. Article 21 of the Rules describes the information that must be included in the application for
initiation of a countervailing duty investigation.  Although this Article lists information required oninjury, considerations for cumulative assessment, and other factors that caused injury to the domestic
industry, it does not contain any provision regarding the application including sufficient evidence of a
causal link between the subsidized imports and the alleged injury, as required by ASCM Article 11.2.
Does China require petitions to contain information concerning causation?
13.  Article 16 of the Regulations of the People’s Republic of China on Countervailing Measures
3
states that “the  government of the country (reg ion) the product of which may be subject to such
                                                     
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investigation shall be invited for consultation regard ing the subsidy in question”.  However, Article 23
of the Rules states that SETC “may” accept invitations for consultation from the governments....”
Under what circumstances would SETC not take part in consultations?
14. Article 23 of the Rules does not contain any provision under which the Members whose
products are subject to the investigation are, upon request, to be provided access to the
non-confidential evidence being used for initiating the investigation, as required by ASCM
Article 13.4.  Will this information be provided to such Members?
15. ASCM Article 12.1 states that  “[i]nterested Members and all interested parties in a
countervailing duty investigation shall be given notice of the information which the authorities requireand ample opportunity to present in writing all evidence which they consider relevant in respect of the
investigation in question.”
(a) In applying Article 24 of the Rules, will China allow respondents the opportunity to revise
information included with the notice of appearance after it is submitted?
(b) What is the status of interested parties who do not register as respondents?  Additionally, will
an interested party be considered as registered if it responds to the best of its ability, but does
not submit all of the information requested?
(c)  Please specify the entities that may be treated as interested parties pursuant to Article 24(4)
of the Rules, which states that “others” may be granted interested party status.
16.  In circumstances where SETC engages experts in a CVD investigation, pursuant to Article 28
of the Rules, how will China ensure that these experts maintain the confidentiality of the dataexamined, as provided for in Article 12.4 of the ASCM?
17. Article 31 of the Rules states that the questionnaires shall be returned “within the time limit”
specified in the questionnaire.
(a) What is the time limit for questionnaire responses?  Are these calendar days
or
working days?
(b) Under what circumstances will SETC not grant an extension?18.  Article 32 of the Rules does not provide for making the results of verifications available to a
firm that was verified.  How will the administering authorities disclose results of the
on-the-spot-verification to ensure compliance with Article 12.6 and Annex VI of the ASCM?
19.  Article 33 of the Rules does not provide for protecting the confidentiality of information
received during the investigation in the territory of other Members, as required in ASCM Article 12.6.
How will China ensure that Article 33 is implemented consistent with the ASCM?
20.  Article 33 of the Rules states that, when requested by an interested party, SETC may conduct
a verification.  Under what circumstances would a requested verification not be conducted?  What
provisions will the administering authority make for a situation in which it cannot conduct all
requested verifications?G/ADP/Q1/CHN/27
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21. Article 35 of the Rules states that when requested by an interested party, or when SETC
deems it necessary, a public hearing may be held.  Under what circumstances would requests for
hearings not be honoured?
22.  Will China be issuing further rules for price undertakings?  If so, when?  If not, how will
China determine if an undertaking is sufficient to  eliminate the injurious effect of the subsidy, in
accordance with  ASCM Article 18.1?
23.  Will China entertain requests for price undertakings pursuant to Article 37 of the Rules prior
to making a preliminary determination of dumping and injury?  If so, please explain how such a
practice would be consistent with ASCM Article 18.2 which states that price undertakings shall not besought or accepted until after an affirmative preliminary determination of subsidization and injury
caused by subsidization has been made?
24.  The second sentence of Article 38 of the Rules states that, if exporters refuse or do not offer a
proposal for price undertaking, “SETC is free to determine that a threat of injury is more likely to berealized if the exporters continue to subsidize the imported products.”
(a) Is this a factor SETC will consider in addition to the factors pertinent to threat analysis listed
in Article 7 of the Rules?
(b) How is SETC’s consideration of this factor consistent with Article15.7 of the ASCM?
25. If a respondent’s request for confidential information is denied, will the respondent be given
an opportunity to revise the non-confidential summary  or to withdraw any confidential information
prior to its disclosure?  How will China treat confidential information submitted by the respondentsonce the investigation is completed?
26.  Article 44 of the Rules does not contain any provision making allowances for difficulties
experienced by interested parties, in particular small companies, in supplying information requested,
nor does it require authorities to offer assistance, as provided for in ASCM Article 12.11.  How does
China intend to implement this ASCM requirement?
27.  Will China issue provisional rules for access to non-confidential information during injury
investigations?  If so, when?  Prior to that time, what will govern such access?
28.  Article 45 of the Rules states that interested parties shall have access to non-confidential
information after the initiation of the case and prior to the publication of the final determination.  The
second paragraph of Article 45 states that the interested parties may also have access to the
non-confidential information within a reasonable period after publication of the final determination.
(a) Are there any circumstances in which interested parties would be denied access to
non-confidential information?  If so, please  explain.  How would such circumstances be
consistent with ASCM Article 12.3?
(b) How does China define “reasonable period” for purposes of this provision?  Will records of
investigations be available indefinitely for refe rence in future investigations and for judicial
review?
(c) How is this Article consistent with ASCM Article 12.3, under which  authorities are to
“provide timely opportunities for all interested Members and interested parties to see all
information that is relevant to the presentatio n of their cases, that is not confidential…”?G/ADP/Q1/CHN/27
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29. How is Article 46 of the Rules consistent with Article 23 of the  Regulations of the People’s
Republic of China on Countervailing Measures4, which states “the investigating authorities shall
allow applicants, interested parties and governments of interested countries (regions) to have access tothe information relevant to the investigation, provided that the information has not been treated as
confidential?”
(a) What is the “relevant certificate” required by Article 46? How do interested parties obtain this
certificate?
(b) What are the procedural formalities referred to in Article 46?  Where can respondent parties
obtain information on these procedural formalities?
30.  While Articles 45, 46, and 47 of the Rules contain provisions permitting interested parties to
inspect non-confidential information, they do not expressly address whether parties are entitled to
prepare presentations based on such information that they inspect.  Do interested parties have such
rights?  If not, how does China implement the requirements of Articles 12.3 and 12.8 of the ASCM?
What facilities does China provide for viewing and copying non-confidential information?
31.  Article 50 of the Rules lists circumstances which would lead to termination of the injury
investigation.  This list does not include termination based on the amount of the subsidy being de
minimis , although these grounds are included in Article 28 of the Regulations of the People’s
Republic of China on Countervailing Measures .  How is Article 50 consistent with Article 11.9 of the
ASCM which states that there shall be immediate termination in cases where the amount of a subsidy
is de minimis (i.e., less than 1 percent, ad valorem)?
32.  Article 51 of the Rules contains provisions on interim and expiration reviews.
(a) Does China intend to issue implementing rules for interim reviews and expiration  reviews?
If so, when?  Will these rules be notified to the WTO?
(b) Will five-year expiration reviews be conducted in all cases either at the request of interested
parties or based on self-initiation by the administering authority?
(c) Under what circumstances will the administering authority self-initiate a review?(d) What is the timeline for completion of interim and expiration reviews?
(e) Will the determination be issued publicly?  If so, in what format (e.g., where will it be
published)?
(f) What organization now conducts interim and expiration reviews?
(g) What procedural rights will parties have with respect to the injury determination?
33. Articles 55 through 58 of the Rules address circumvention.(a) Will China develop and publish procedures for investigations of circumvention of CVD
measures?
                                                     
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(b) With respect to Article 57(1) of the Rules, during what length of time prior to  initiation of an
investigation would alleged “practices of circumvention ” be considered a factor to be
examined in determining whether there has been circumvention of countervailing measures?
(c) How can actions prior even to the initiation of a countervailing duty investigation constitute
“circumvention” of a measure, if the measure does not even exist at that time?
(d) What are the “appropriate measures” SETC may take in situations where circumvention of a
countervailing measure causes injury to the domestic industry pursuant to Article 58 of the
Rules?
34.  When parties provide requested information in Chinese, as required by Article 59 of the
Rules, and a relevant document is lengthy, may a party submit a translation of only the pertinent
portions of the lengthy document, or must the party provide a translation of the entire document, no
matter how lengthy?
35.  Will SETC interpretations of the Rules, referenced in Article 61 of the Rules, be subject to
judicial review?
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