Anti-Subsidy Regulations of the People's Republic of China (revised in 2004)

Anti-Subsidy Regulations of the People's Republic of China (revised in 2004)
(Promulgated by Order No.329 of the State Council of the People's Republic of China on November 26, 2001. Amended on the basis of the Decision of the State Council on the Revision of the Anti-Subsidy Regulations of the People's Republic of China on March 31, 2004.)

Chapter I General Provisions

Article 1 These Measures are hereby formulated in accordance with the relevant provisions of the Foreign Trade Law of the People's Republic of China with a view to maintaining fair and orderly competition in international trade.

Article 2 In the event that any subsidized imported product causes material damage to or threatens material damage to an established domestic industry, or represents a significant barrier to the establishment of a domestic industry, an investigation shall be conducted and Anti-subsidy measures shall be taken in accordance with these Regulations.

Chapter II Subsidies and Damage

Article 3 The term "subsidy" shall refer to a financial contribution or any form of income or price support conferred by the government or any public body of the exporting country (region) which benefits the recipient.
The government and any public body of the exporting country (region) are hereinafter together referred to as the government of the exporting country (region).
The term "financial contribution" as referred to in Paragraph 1 of this Article shall include the following:
1. direct financial assistance from the government of the exporting country (region) in the form of any money, loan, capital contribution, etc., or any conditional direct transfer of funds or any financial obligation from such a government in the forms of a loan guarantee, etc.;
2. any waiver of or failure to collect income receivable by the government of the exporting country (region);
3. the provision of goods or services other than general infrastructure, or the purchase of goods, by the government of the exporting country (region); and
4. any payment made by the government of the exporting country (region) to a funding organization, or the exercise of the functions of such an organization by a private body directed by the government of the exporting country (region).

Article 4 Any subsidy in respect of which an investigation is conducted and Anti-subsidy measures are taken in accordance with these Regulations must be a specifically targeted subsidy.
The following types of subsidy shall be deemed to be specifically targeted subsidies:
1. subsidies available to certain clearly-defined enterprises or industries from the government of the exporting country (region);
2. subsidies available to certain enterprises or industries which are clearly provided for in the laws or regulations of the exporting country (region);
3. subsidies available to certain specifically-designated enterprises or industries;
4. subsidies conditional on export achievements, including all types of subsidy enumerated in the illustrative list of export subsidies attached to these Regulations; and
5. subsidies conditional on the substitution of local produce of the exporting country (region) for imported produce.
In determining whether or not a subsidy is specifically targeted, factors such as the number and proportion of enterprises subsidized, the total value of the the subsidy, the duration of the subsidy and the method by which the subsidy is distributed to enterprises shall also be taken into account.

Article 5 The Ministry of Commerce shall be responsible for the investigation of and determinations on subsidies.

Article 6 The total value of a subsidy for imported products shall be calculated using the following methods according to the circumstances of the case:
1. where the subsidy is granted in the form of a gratuitous allocation of money, the total value of the subsidy shall be calculated on the basis of the total amount actually received by the enterprises concerned;
2. where the subsidy is granted in the form of a loan, the total value of the subsidy shall be calculated on the basis of the balance between the amount of interest that would be payable by the enterprise for a loan granted on normal commercial terms and the amount of interest to be paid for the loan actually granted;
3. where the subsidy is granted in the form of a loan guarantee, the total value of the subsidy shall be calculated on the basis of the difference between the amount of interest that would be payable by the enterprise if the loan were not guaranteed and the amount of interest to be paid by the enterprise under the guaranteed loan;
4. where the subsidy is granted in the form of a capital contribution, the total value of the subsidy shall be calculated on the basis of the amount of capital actually received by the enterprise;
5. where the subsidy is granted in the form of the provision of goods or services, the total value of the subsidy shall be calculated on the basis of the difference between the normal market price of the goods or services provided and the price actually paid by the enterprise;
6. where the subsidy is granted in the form of a purchase of goods, the total value of the subsidy shall be calculated on the basis of the difference between the price actually paid by the government and the normal market price of the goods; and
7. where the subsidy is granted in the form of any waiver of or failure to collect income receivable, the total value of the subsidy shall be calculated on the basis of the difference between the amount to be paid in accordance with the legal obligations of the enterprise and the amount actually paid by the enterprise.
For subsidies other than those enumerated in the preceding paragraph, the total value of the subsidy shall be determined in a fair and reasonable way.

Article 7 The term "damage" shall refer to the consequences of a subsidy in terms of any material damage it has caused or threatens to cause to an established domestic industry or the consequences of any subsidy that represents a significant barrier to the establishment of a domestic industry.
The Ministry of Commerce shall be responsible for the investigation and determination of any damage caused by a subsidy, save that any investigation into damage to a domestic industry involving agricultural products shall be conducted by the Ministry of Commerce in collaboration with the Ministry of Agriculture.

Article 8 In determining the damage caused to a domestic industry by any subsidy, the following matters shall be examined:
1.
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