Article 1 The present Provisions are formulated in accordance with the Countervailing Regulation of the People''s Republic of China (hereinafter referred to as Countervailing Regulation) in order to regulate the countervailing investigation of industry injury.

Article 2 The present Provisions shall apply to to the activities related to the countervailing investigation of industry injury in the light of the Countervailing Regulation.

Article 3 The Ministry of Commerce of the People''s Republic of China (MOFCOM) shall take charge of the countervailing investigations of industry injury. As for the countervailing investigations of industry injury involving agricultural products, the responsibility shall be taken jointly by the MOFCOM and the Ministry of Agriculture.

Chapter II. Determination of Injury

Article 4 The term "industry injury" refers to an actual injury or a
risk of actual injury to an existing domestic industry, or the
actual encumbrance of the foundation of a domestic industry resulted
from subsidies.
The term "actual injury" as stated in the present Provisions refers
to the non-negligible injury that has already been caused by
subsidies to an existing domestic industry.
The term "risk of actual injury" means that the subsidies hasn''t
resulted in actual injury to the domestic industry, but there are
evidences showing that actual injury to a domestic industry is
clearly foreseeable and imminent unless measures are taken against
it. The term "actual encumbrance" means the retardation of the
establishing process and the development of a to-be-established
domestic industry, which results in the failure of the foundation of
the domestic industry.
Article 5 In the determination of injury to a domestic industry
resulted from subsidies, the following matters shall be
investigated:
(1) The volume of the subsidized imports and the consequential
influence of subsidized imports on the price of the domestic like
products;
(2) The consequential influence of subsidized imports on the
domestic industry.
The investigation of the subsidized imports shall involve whether
there has been a great increase in the subsidized imports either in
absolute terms or in relation to production or consumption of the
domestic like product.
The investigation of the consequential influence of the subsidized
imports on the price of the domestic like products shall involve
whether there has been a significant price reduction on the
subsidized imports or whether the subsidized imports have induced a
significant depression in prices of the domestic like product or
prevented price increase of the domestic like product that would
have happened.
Article 6 The investigation of the influence of subsidized imports
on a domestic industry shall involve an assessment of all relevant
economic factors and indicators which have an impact on the
situation of industry. These factors and indicators include the
actual and potential decline in sales, profits, output, market
share, productivity, the return on investment, or equipment
utilization; the factors that affect domestic prices; the amplitude
of the subsidized imports; the actual or potential adverse effects
on the inventories, employment, wages, growth, ability to raise
capital or to make investment etc. In the case that agricultural
products are involved, whether a heavier burden is placed on the
government''s support plans should be taken into account.
Article 7 In the determination of the actual injury to a domestic
industry by subsidies, the feature of the subsidies and the
consequential influence on trade shall be examined as well.
Article 8 The determination of a risk of an actual injury shall be
based on clearly foreseeable and imminent situation, in which if no
measure is taken, actual material injury would have occurred. The
determination of a risk of an actual injury shall be based on the
facts, rather than simply on complaints, conjectures or the least
possibility.
Moreover, in the determination of a risk of an actual injury,
examination shall be made but not limited to the factors as follows:
(1) The feature of the subsidies and the possible consequential
impact on trade;
(2) A significant increase rate of subsidized imports showing a
likely actual increase of imports;
(3) An increase of the productivity of the producers of the
subsidized imports showing a likely real increase of imports. If
this indicator is adopted, one should consider the factor whether
there are any other export markets that may take in any additional
exports;
(4) Whether the imported products are being imported at prices that
greatly depressing or suppressing the prices of domestic like
product, and it is likely to induce an increase of the demands of
imports;
(5) The inventories of the products product under investigation.
Article 9 In the determination of an actual encumbrance of the
foundation of a domestic industry, examination shall be made but not
limited to the factors as follows:
(1) The foundation and the related preparatory work of the domestic
industry;
(2) The increase of domestic demands and the consequential impact;
(3) The impact of the subsidized imports on the situation of
domestic market;
(4) The follow-up productivity of the subsidized imported product
and the future tendency in the domestic market.
Article 10 Like product refers to a product that is identical to, or
in the absence of such a product, one that has characteristics
closely similar to those of the subsidized product under
investigation.
Article 11 In the determination of like products, there are a lot of
factor that may be taken into account, including the physical
characteristics of the products, chemical features, manufacturing
equipment and techniques, purposes of use, substitutability,
appraisal of consumers and producers, distribution channels, and
price, etc.
Article 12 The impact of subsidized imports on the domestic industry
shall be evaluated on the basis of a separate definition of the
production of the domestic like product. If, on the basis of the
techniques of production and the sales and profits of the producers,
one cannot distinguish the production of domestic like product from
the production of other products, the impact of subsidized imports
shall be determined by reference to the production of the narrowest
product group or scope which include the domestic like product
insofar as the product group or scope can provide sufficient
information.
Article 13 In the determination of a domestic industry, one should
consider all of the producers of the domestic like product in China,
or the producers whose total output forms the major part of the
total output of domestic like product; however, if a domestic
producer have relations with an export business operator or import
business operator, or he himself is an import business operator of
the subsidized imports, he may not be considered as the domestic
industry.
The term "have relations with" mentioned in the preceding item means
that one party controls or influences another party in a direct or
an indirect way, or both parties are controlled or influenced by a
third party, or both parties jointly control or affect a third party
in a direct or an indirect way.
Article 14 In the determination of a regional industry, the
following factors shall be considered:
(1) The producers have sold all or nearly all of the like product
manufactured by them in the regional market;
(2) The demands of the regional market aren''t satisfied or aren''t
mainly satisfied by the like-product producers in other domestic
regions; and
(3) Other factors.
Article 15 An accumulative evaluation of the impact of subsidized
imports on domestic industry may be made if the subsidized imports
come from more than two countries (regions) and meet concurrently
the following requirements:
(1) The amount of the subsidy for an imported product from a country
(region) isn''t minim and the volume of the imports isn''t
negligible;
(2) According to the competition conditions among the subsidized
imports and those between the subsidized imports and domestic like
product, it is reasonable to make an accumulative evaluation.
The term "minim subsidy " mentioned in the preceding item refers to
a subsidy whose amount is below 1% of the value of the product; but
for the subsidized product imported from a developing country
(region), minim subsidy refers to one whose amount is below 2% of
the value of the product.
Article 16 In the process of the accumulative evaluation, the
following factors may be considered:
(1) The continuity and possibility of the influence of subsidized
imports from different countries (regions) on the domestic industry;
(2) The substitutability between the subsidized imports from
different countries and the domestic like product, including such
factors as the demands of special clients, the product quality and
other related factors;
(3) The sales prices, sellers'' quotations and actual transaction
prices of the subsidized imports from different countries (regions)
and the domestic like product in the same market of area;
(4) Whether there are identical or similar distribution channels for
a subsidized product imported from different countries (regions) and
the domestic like product, and whether they appear in the market
simultaneously;
(5) Other competition conditions that exist among the subsidized
imports and between the subsidized import product and the domestic
like product; and
(6) Other factors.
Article 17 In the countervailing investigation of industry injury,
the MOFCOM shall give users or consumers of the subsidized imports
an opportunity to present their views and evidences.
Article 18 The period subject to countervailing investigation of
industry injury shall generally be 3-5 years before the
investigation commences.
Chapter III. Industry Injury Investigation
Article 19 When any interested party intends to answer the
countervailing investigation of industry injury, it shall submit an
application to the MOFCOM within 20 days from the day when an
announcement on the initiation of countervailing investigation of
industry injury is made, and shall carry out relevant registration
formalities. At the same time, the applicant shall offer the
documents about its productivity, output, inventories, construction
and expansion plans, the volume and amount of the product exported
to China, the volume and amount of the product imported by the
import business operators.
Article 20 The interested parties may be:
(1) Overseas producers export business operators, and domestic
import business operators of the products under investigation, or
guilds or other organizations of the producers, export business
operators and import business operators of the products under
investigation;
(2) The government of the country (region) of origin and the export
country (region) of the products under investigation as well as the
representatives thereof;
(3) The producers and business operators of domestic like product,
or guilds or other organizations of the producers and business
operators of the products; or
(4) Others .
Article 21 In the case that an interested party takes part in the
investigation, he shall present his identification certificate. If
the interested party is an enterprise or any other organization, it
shall present its business license and other registration
certificates, and the identification certificate of the legal
representative thereof.
In the case that an interested party entrusts an agent to
participate in the investigation, it shall present identification
certificate of the agent and a power of attorney. If an interested
party entrusts a lawyer as his agent, the lawyer shall come from a
law firm in China and shall practice law in China, and a power of
attorney, the business license of the law firm and the law-practice
certification of the lawyer shall be presented.
Article 22 The objects of the MOFCOM''s countervailing investigation
of industry injury include domestic producers, domestic import
business operators, domestic purchasers, domestic end consumers,
overseas export business operators and overseas producers, etc.
Article 23 The MOFCOM may, whenever necessary, hire experts in the
fields of the relevant industry, accounting, economic and trade and
law to provide advisory services. The experts involved shall keep
the secrets to themselves.
Article 24 The MOFCOM shall take a lot means to conduct an industry
injury investigation, including questionnaires, sampling, hearings,
technical authentications, on-the-spot investigation and other
forms.
Article 25 The questionnaires issued by the MOFCOM to the interested
parties include domestic producer questionnaires, domestic importer
questionnaires, domestic consumer questionnaires, overseas producer
and overseas exporter questionnaires, and other types of
questionnaires
Article 26 An interested party shall offer answers to the
questionnaires according to the method and time limit as specified
in the questionnaires. If it is necessary to extend the time limit,
it shall, 7 days prior to the time limit for the submission of
answers, submit a written application to the MOFCOM and give an
explanation. It is for the MOFCOM to decide whether to extend the
time limit or not.
Article 27 The MOFCOM may make on-the-spot investigation to the
interested parties. Prior to the on-the-spot investigation, it shall
notify the relevant interested parties of the main purposes and
content of the investigation beforehand.
Article 28 On the request of the interested parties or in the need
of the investigation, the MOFCOM may, upon the approval of the
relevant country (region), send persons to the said country (region)
to make investigations on the productivity, investments in expanding
production, inventories, place of origin or entrepot, the
affiliation among the enterprises and other information related to
the product.
Article 29 The MOFCOM may request the interested parties to offer or
supplement written materials in the light of the relevant
requirements, and the interested party may, on his own initiative
submit written materials to the MOFCOM as well.
Article 30 On the request of the interested parties or whenever the
MOFCOM considers it necessary, a hearing of industry injury may be
held.
Article 31 In the case that an interested party who takes part in
the industry injury investigation considers it necessary to keep the
materials and the relevant evidence secret, it shall, when
submitting the materials to the MOFCOM, provide simultaneously a
non-confidential summary of the materials, or submit the
confidential text and an open text of the materials.
The non-confidential summary and open text shall contain reasonable
substantial content of the confidential information. The MOFCOM may,
in the absence of substantial content, order the interested party to
supplement relevant content and evidential materials.
Article 32 In the case that any interested party who participates in
the industry injury investigation fails to provide non-confidential
summary or open texts of the materials submitted by it, or fails to
provide good reasons, the MOFCOM may reject to take the materials
into account. If the MOFCOM does not consider it necessary to keep
the materials submitted by an interested party secret, it may
request the interested party to withdraw its secrecy application.

Article 33 During the process of industry injury investigation, any interested party subject to the industry injury investigation shall faithfully present the information and offer relevant materials. If any interested party fails to do so, or fails to provide necessary information within a reasonable time limit, or seriously intervene the investigation by any other means, the MOFCOM may judge on the basis of the facts it has already obtained and the best information available.

Chapter IV. Supplementary Provisions

Article 34 When an interested party, who takes part in the industry injury investigation, submits any document or evidential material to the MOFCOM, it shall submit the original Chinese text in quintuplicate accompanied by the corresponding electronic text (computer floppy disks or CDs) in triplicate.

Article 35 Chinese language prescribed by the administrative department of languages of the state as the formal language shall be taken as the prevailing language by the MOFCOM in the industry injury investigation Any document, materials or information offered by any interested party shall be written in standard Chinese. As for any materials in any other language, a Chinese version and the original text shall be submitted, and the Chinese version shall prevail. Any materials in the non-prevailing languages without attaching a Chinese version shall not be regarded as valid and lawful evidential material

Article 36 The authority to interpret the present Provisions shall remain with the Ministry of Commerce.

Article 37 The present Provisions shall go into effect 30 days after the date of promulgation. At the same time when the present Provisions are implemented, the Provisions on the Countervailing Investigation of Industry Injury and Award (Order No. 46 (2002) of the former State Economic and Trade Commission shall be abolished.

Bright Jon, Attorney-at-law   Fax: +86-512-53516040   email@colaw.cn