WORLD TRADE
ORGANIZATIONG/SCM/Q2/CHN/4
4 November 2002
(02-6052)
Committee on Subsidies and Countervailing Measures
SUBSIDIES
Questions Posed by MEXICO to the PEOPLE'S REPUBLIC OF CHINA under its
Protocol of Accessi on and Article 25.8 of the SCM Agreement
The following communication, dated 31 October 2002, has been received from the Permanent
Mission of Mexico.
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Questions by Mexico with regard to China's Transitional Review Mechanism on Subsidies and
Countervailing Measures and to Article 25.8 of the SCM Agreement
1. Please list and explain all of the subsidies, as defined in Article 1 of the Agreement on
Subsidies and Countervailing Measures, granted at the national and subnational level to enterprises in
the following sectors (including those that are horizontal in application):
- Leather and footwear;
- textiles and clothing;
- electric and electronic products;
- iron and steel (including steel products);
- chemical;- automotive industry (autoparts and automobiles).
2. Please identify the requirements for a company to be considered a foreign direct invested
enterprise devoted to exports.  Please also state whether such enterprises enjoy income tax exemptions
or rebates, and whether additional exemptions and rebates are granted to such companies if they areset up in the special economic zones.  Please specify exactly what these rebates consist in, and
whether they are related to export results.
3. Please explain what is currently stipulated in the Foreign Investment Enterprise Law, which
would appear to require enterprises with foreign capital to export a percentage of their production in
order to be eligible for tax breaks.
4. We would be grateful if you could provide your replies in writing, together with all of the
relevant legal instruments.
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