Laws of the People's Republic of China

Ministry of Commerce

Order of the Ministry of Commerce of the People's Republic of China

No.5

Provisions on the Antidumping Investigation of Industry Injury, Provisions on the Countervailing Investigation of Industry Injury, Provisions on the Investigation of Industry Injury under Safeguard Measures that have been reviewed and passed by the 5th executive meeting of the Ministry of Commerce on September 9, 2003, are hereby issued and shall be put into effect after 30 days.

Lv Fuyuan, the minister of the Ministry of Commerce

October 17, 2003

Provisions on the Antidumping Investigation of Industry Injury

Chapter I. General Provisions

Article 1

The present Provisions are formulated in accordance with the Antidumping Regulation of the People's Republic of China (hereinafter referred to as Antidumping Regulation), with the aim to regulate the antidumping investigation of industry injury.

Article 2

The present Provisions shall apply to the activities related to the antidumping investigation of industry injury in accordance with the Antidumping Regulation.

Article 3

The Ministry of Commerce of the People's Republic of China (MOFCOM) shall take charge of the antidumping investigations of industry injury. As for the antidumping investigations of industry injury related to agricultural products, the responsibility shall be undertaken jointly by the MOFCOM and the Ministry of Agriculture.

Chapter II. Cognizance of Injury

Article 4

The term "industry injury" refers to an actual injury or a risk of actual injury to the existing domestic industry, or actual encumbrance of the establishment of a domestic industry resulted from dumped imports.

The term "actual injury" as stated in the present Provisions refers to the non-negligible injury caused by dumped imports to an established domestic industry.

The term "risk of actual injury" means that no actual injury has been caused to the domestic industry, but there is evidence showing that an actual injury to the domestic industry is clearly foreseeable and imminent unless measures are taken against it.

The term "actual encumbrance" means that the dumped imports have not resulted in actual injury or have not formed a risk of actual injury to the domestic industry, but has seriously retarded the establishing process of domestic industry.

Article 5

In the Cognizance of the injury caused to the domestic industry by dumped imports, the following matters shall be investigated:

(1)

The volume of the dumped imports and the consequential effect dumped imports on the price of domestic kindred products;

(2)

The consequential effect of the dumped imports on domestic industry.

Article 6

The investigation of dumped imports shall involve whether there has been a significant increase in dumped imports either in absolute terms or relative to the production or the consumption of the domestic kind products.

The investigation of the consequential impact of dumped imports on the price of domestic like products shall involve whether there has been a significant price reduction of the dumped imports or whether the dumped imports have resulted in a significant depression in the price of the domestic like product or prevented price increase of the domestic like products that would have occurred.

Article 7

The investigation of the impact of the dumped imports on the domestic industry shall involve an assessment of all relevant economic factors and indicators which have influences on the situation of the industry, including actual and potential decline in sales, profits, output, market share, productivity, return on investment, or equipment utilization, the factors that have influences on domestic prices, the amplitude of the dumped imports; the actual or potential adverse effects on the inventories, employment, wages, growth, ability to raise capital or to make investment etc.

Article 8

The determination of an actual injury shall be based on the clearly foreseeable and imminent situation, in which if no measures are taken, an actual injury will occur. The determination of a risk of actual injury shall be based on facts, rather than simply on complaints, conjectures or the least possibility.

Moreover, when determining a risk of actual injury, investigations shall be made but not limited to the factors as follows:

(1)

Significant increase rate showing a likely actual increase of dumped imports;

(2)

The capability of the exporters to use fully and freely or of potential actual increase, which shows a likely actual increase of dumped exports entering the market of the importing members. In the use of this indicator, one should consider the factor whether there are any other export markets that may take in any additional exports;

(3)

Whether the imported product are being imported in prices of significant depression or suppression of prices of domestic like product, which is likely to cause an increase of the demands of imports;

(4)

The inventories of the products under investigation.

Article 9

When determining an actual encumbrance of the establishment of a domestic industry, the investigation shall, in addition to the factors listed in Article 8 , 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 effects;

(3)

The impact of the dumped imports on the domestic market;

(4)

The follow-up productivity of the dumped imported product and the development trends 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 closest to those of the imported dumped product in question.

Article 11

In the determination of like products, such factors shall be taken into account as the physical characteristics of the products, chemical features, manufacturing equipment and techniques, purposes of use, substitutability, appraisal of consumers and producers, distribution channels, and prices, etc.

Article 12

The influence of the dumped imports on domestic industry shall be assessed on the basis of the separate definition of the production of the domestic like product. If, on the basis of the techniques of production and the producers' sales and profits, one cannot distinguish the production of domestic like product from the production of other products, the influence of dumped 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 the producers of the domestic like product in China, or the producers whose total output forms the principal part of the total output of the domestic like product; however, if a domestic producer is associated with an export business operator or import business operator, or he himself is an import business operator of the dumped imports, he may be not be considered as the domestic industry.

The term "is associated with" mentioned above means that one party directly or indirectly controls or influences another, or both parties are controlled or influenced by a third party, or both parties jointly control or influence 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 sell all of or nearly all of the like products manufactured by them in this 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 areas; and

(3)

Other factors.

Article 15

An accumulative evaluation of the influence of dumped imports on the domestic industry may be made if the dumped imports come from two or more countries (regions) and simultaneously meet requirements as follows:

(1)

The dumping margin is not less than 2% and the volume of dumped imports isn't negligible;

(2)

It is reasonable to make an accumulative evaluation according to the competition conditions among the dumped imports and those between the dumped imports and the domestic like products,.

(3)

The term "negligible" mentioned above means that the volume of the dumped imports from a country (region) is considered negligible if it accounts for below 3% of the total volume of the imported like product, but excluding the circumstance that countries which individually account for below 3% collectively account for more than 7% of the total volume of imports of like products.

Article 16

In an accumulative assessment, the following factors shall be considered:

(1)

The continuity and possibility of the influence of dumped imports from different countries (regions) on the domestic industry;

(2)

The substitutability between the dumped imports from different countries and the domestic like product, including such factors as the demands of special clients, product quality and so on;

(3)

The sales prices, quoted prices of the sells and actual transactions prices of the dumped imports from different countries (regions) and the domestic like product in the markets of a same area;

(4)

Whether there are identical or similar distribution channels for a dumped product imported from different countries (regions) and the domestic like product, and whether they occur in the market simultaneously;

(5)

Other competition conditions that exist among the dumped imports and between the dumped import product and the domestic like product; and

(6)

Other factors.

Article 17

In the investigation of industry injury, the MOFCOM shall give users or consumers of the dumped imports an opportunity to present their views and evidences.

Article 18

The period subject to antidumping 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 applies for answering the antidumping investigation of industry injury, it shall apply to the MOFCOM within 20 days from the day when an announcement on the initiation of antidumping investigation of industry injury is made, and shall carry out relevant registration formalities. At the same time, the applicant shall offer the information related to 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)

producers and business operators of domestic like products, or guilds or other organizations of the producers and business operators of the products; or

(4)

others.

Article 21

An interested party who is involved in the investigation shall present his identification certificate. In the case that the interested party is an enterprise or any other organization, it shall submit its business license and other registration certificates, and the identification certificate of the legal representative.

In the case that an interested party entrusts an agent to deal with the matter under investigation, it shall present identification certificate of the agent and a power of attorney. In the case that an interested party entrusts a lawyer as his proxy, the lawyer shall serve a law firm in China and shall practice law in China, a power of attorney, the business license of the law firm and the law-practice certification of the lawyer shall be presented.

Article 22

In the antidumping investigation of industry injury , the objects of the MOFCOM include domestic producers, domestic import business operators, domestic purchasers, domestic end consumers, foreign export business operators and foreign producers, etc.

Article 23

The MOFCOM may, whenever necessary, consign experts in the fields of the relevant industry, accounting, economics, trade, and law to provide consultation services. The experts involved shall keep the secrets.

Article 24

The MOFCOM shall take such means as questionnaires, sampling, hearing, technical authentication, on-the-spot investigation and so on to make an industry injury investigation.

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 forms of questionnaires

Article 26

An interested party shall submit answers to the questionnaires according to the method and time limit as specified in the questionnaires. If it needs 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 make 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 major purposes and content of the examination.

Article 28

The MOFCOM may, on the requirement of the interested parties or in need of the investigation, upon the approval of the relevant country (region), consign persons to the country (region) to conduct investigations on the productive capacity, investments in expanding production, inventories, place of origin or entrepot, the link among the enterprises and other information related to the product.

Article 29

The MOFCOM may require the interested parties to submit or supplement written materials according to the relevant provisions, and the interested may offer to submit written materials to the MOFCOM as well.

Article 30

The MOFCOM may, at the request of an interested party, or whenever necessary, hold a hearing of industry injury.

Article 31

In the case that an interested party involved 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, attach 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. In the absence of substantial content, the MOFCOM may request the interested party to supply relevant content and evidential materials.

Article 32

In the case that any interested party involved in the industry injury investigation fails to provide a non-confidential summary or an open texts of the materials submitted by it, or fails to provide good reasons, the MOFCOM may refuse to take the materials into account. If the MOFCOM does not considers it necessary to keep the materials submitted by an interested party secret, it might request the interested party to withdraw its application for secrecy purposes.

Article 33

In the industry injury investigation, any interested party involved shall faithfully provide 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 with the investigation by any other means, the MOFCOM may make a ruling based on the facts it has already obtained and the best information available.

Chapter IV. Supplementary Provisions

Article 34

As an interested party involved 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 is considered as the formal language by the industry injury investigation of the MOFCOM. Any document, materials or information offered by an interested party shall be written in standard Chinese. As for any materials in any other language, a Chinese translation and the original text shall be submitted, and the Chinese version shall prevail. Any materials in any non-prevailing language without attaching a Chinese version shall not be considered 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 Antidumping Investigation of Industry Injury and Award (Order No. 45 (2002) of the former State Economic and Trade Commission shall be repealed.