Statement of Reasons—Final decisions: Forged Grinding Media (FGM 2026 IN)

Decisions

Ottawa, September 8, 2026

On August 24, 2026, pursuant to paragraph 41(1)(a) of the Special Import Measures Act, the Canada Border Services Agency terminated the subsidy investigation in respect of forged grinding media exported from the People’s Republic of China (China) by Jiangyin Xingcheng Magotteaux Steel Balls Co., Ltd. and Tangshan ZWell Equipment Manufacturing Co., Ltd.

On the same day, pursuant to paragraph 41(1)(b) of the Special Import Measures Act, the Canada Border Services Agency made a final determination respecting the dumping of forged grinding media originating in or exported from China and a final determination of subsidizing in respect of forged grinding media originating in or exported from China, with respect to exporters for which the subsidy investigation has not been terminated.

Summary

[1] On November 20, 2025, the Canada Border Services Agency (CBSA) received a written complaint from Moly-Cop Canada (Kamloops, British Columbia) (hereinafter, “the complainant”) alleging that imports of certain forged or stamped grinding media (hereinafter, “FGM”) originating in or exported from the People’s Republic of China (China) are being injuriously dumped and subsidized.

[2] On December 11, 2025, pursuant to paragraph 32(1)(a) of the Special Import Measures Act (SIMA), the CBSA informed the complainant that the complaint was properly documented. On December 19, 2025, the CBSA informed the Government of China that a properly documented complaint had been filed. At that time, the Government of China was provided with a non-confidential version of the subsidy complaint and was invited for consultations pursuant to Article 13.1 of the Agreement on Subsidies and Countervailing Measures, prior to the initiation of the subsidy investigation. The CBSA did not receive any request for consultations.

[3] The complainant provided evidence to support the allegations that certain FGM from China have been dumped and subsidized, as well as evidence that discloses a reasonable indication that the dumping and subsidizing have caused injury or are threatening to cause injury to the Canadian industry producing like goods.

[4] On January 9, 2026, pursuant to subsection 31(1) of SIMA, the CBSA initiated investigations respecting the dumping and subsidizing of FGM from China.

[5] Upon receiving notice of the initiation of the investigations, the Canadian International Trade Tribunal (CITT) commenced a preliminary injury inquiry, pursuant to subsection 34(2) of SIMA, into whether the evidence discloses a reasonable indication that the dumping and subsidizing of the above-mentioned goods have caused injury or are threatening to cause injury to the Canadian industry producing the like goods.

[6] On March 11, 2026, pursuant to subsection 37.1(1) of SIMA, the CITT made a preliminary determination that there is evidence that discloses a reasonable indication that the dumping and subsidizing of FGM from China have caused injury to the domestic industry.

[7] On May 25, 2026, as a result of the CBSA’s preliminary investigations and pursuant to subsection 38(1) of SIMA, the CBSA made preliminary determinations of dumping and subsidizing of FGM originating in or exported from China.

[8] On the same date, pursuant to subsection 8(1) of SIMA, provisional duties were imposed on imports of dumped and subsidized goods that are of the same description as any goods to which the preliminary determinations apply, and that are released during the period commencing on the day the preliminary determinations were made and ending on the earlier of the day on which the CBSA causes the investigations in respect of any goods to be terminated pursuant to subsection 41(1) of SIMA or the day the CITT makes an order or finding pursuant to subsection 43(1) of SIMA.

[9] Based on the available evidence, the CBSA is satisfied that FGM originating in or exported from China by Jiangyin Xingcheng Magotteaux Steel Balls Co., Ltd. and Tangshan ZWell Equipment Manufacturing Co., Ltd. have been subsidized by an insignificant amount. Therefore, on August 24, 2026, the CBSA terminated the subsidy investigation pursuant to paragraph 41(1)(a), in respect of those goods.

[10] On the same day, pursuant to paragraph 41(1)(b) of SIMA, the CBSA made a final determination respecting the dumping of forged grinding media originating in or exported from China and a final determination of subsidizing in respect of forged grinding media from China, with respect to exporters for which the subsidy investigation has not been terminated.

[11] The CITT’s inquiry into the question of injury to the Canadian industry is continuing, and the CITT will issue its decision by September 22, 2026. Provisional anti-dumping and countervailing duties will continue to be imposed on the subject goods from China until the CITT renders its decision. However, provisional countervailing duties will not be imposed on imports of goods for which the subsidy investigation has been terminated. Any provisional duties paid or security posted on imports of goods for which the subsidy investigation has been terminated will be refunded, as appropriate.

Period of investigation

[12] The period of investigation (POI) for the investigations is October 1, 2024 to September 30, 2025.

Profitability analysis period

[13] The profitability analysis period (PAP) for the investigations is October 1, 2024 to September 30, 2025.

Interested parties

[14] Interested parties were notified at the initiation of the investigations and were sent Requests for Information (RFI). Refer to the Statement of Reasons—Initiation of investigations: Forged Grinding Media (FGM 2026 IN) for additional information on interested parties.

Exporters

[15] The following five exporters provided substantially complete responses to the CBSA’s dumping, section 20 and subsidy RFIs:

• Changshu Feifan Metalwork Co., Ltd.^{Footnote 1}
• Changshu Longte Grinding Ball Co. Ltd.^{Footnote 2}
• JiangyinXingcheng Magotteaux Steel Balls Co., Ltd.^{Footnote 3}
• Oriental Casting and Forging Co., Ltd.^{Footnote 4} and
• Tangshan ZWell Equipment Manufacturing Co., Ltd.^{Footnote 5}

On-site verification was conducted at Changshu Longte Grinding Ball Co. Ltd’s premises in June 2026.

[16] The CBSA also received responses to the CBSA’s dumping and subsidy^{Footnote 6} RFI from the following input suppliers, producers, and vendors:

• Changshu Longteng Special Steel Co., Ltd.^{Footnote 7}
• Changshu Longte International Trade Co., Ltd.^{Footnote 8}
• Chengde Jianlong Special Steel Co., Ltd.^{Footnote 9}
• Daye Special Steel Co., Ltd.^{Footnote 10}
• Jiangsu Yute Grinding International Co., Ltd.^{Footnote 11}
• Jiangyin Xingcheng Special Steel Works Co., Ltd.^{Footnote 12}
• ME Longteng Grinding Media (Changshu) Co., Ltd.^{Footnote 13}
• Molycop Singapore Trading Pte. Ltd.^{Footnote 14}
• Proesmma SA de CV^{Footnote 15}
• Qingdao Special Iron And Steel Co.,Ltd.^{Footnote 16} and
• Zhongte Yunshang (Jiangsu) Co., Ltd.^{Footnote 17}

Importers

[17] Four importers, Magotteaux Ltée,^{Footnote 18} ME Global Inc.,^{Footnote 19} Moly-Cop Canada,^{Footnote 20} and Suprasteel Worldwide SL.,^{Footnote 21} provided a response to the CBSA’s importer RFI.

Surrogates

[18] The CBSA received responses to the Surrogate Producer RFI from Moly-Cop Chile S.A^{Footnote 22} and Moly-Cop Mexico, S.A. de C.V.,^{Footnote 23} producers of FGM located in Chile and Mexico, respectively. On-site verification was conducted at Moly-Cop Chile, S.A.’s premises in June 2026.

Government

[19] The Government of China provided a partially complete response to the government subsidy RFI and subsequent SRFIs,^{Footnote 24} however it did not provide a response to the government section 20 RFI. On-site verification of the information provided by the Government of China with respect to the subsidy investigation was conducted in June 2026.

Product information

Imports into Canada

[27] During the final phase of the investigations, the CBSA refined the estimated volume and value of imports based on information from CBSA import entry documentation and other information received from the exporter and importer.

[28] The following table presents the CBSA’s analysis of imports of FGM for the purposes of the final determinations:

Investigations process

[29] Regarding the dumping investigation, information was requested from all known and potential exporters, producers, vendors and importers, concerning shipments of FGM imported into Canada during the POI.

[30] Regarding the subsidy investigation, information related to potentially actionable subsidies was requested from all known and potential exporters and producers in China. Information was also requested from the Government of China concerning financial contributions made to exporters or producers of FGM imported into Canada during the POI. The Government of China was also requested to forward the RFIs to all subordinate levels of government that had jurisdiction over the exporters.

[31] The Government of China and the exporters/producers were also notified that failure to submit all required information and documentation, including non-confidential versions, failure to comply with all instructions contained in the RFI, failure to permit verification of any information or failure to provide documentation requested during the verification visits or the desk audits may result in the margin of dumping, the amount of subsidy and the assessment of dumping and/or countervailing duties on subject goods being based on facts available to the CBSA. Further, the Government of China and the exporters/producers were notified that determinations on the basis of facts available could be less favorable to them than if complete, verifiable information was made available.

[32] After reviewing the RFI responses, SRFIs were sent to responding parties, in order to clarify information provided and request additional information, where necessary. On-site verification was conducted with respect to the information provided by Changshu Longte Grinding Ball Co. Ltd., the Government of China and Moly-Cop Chile S.A.

[33] Details pertaining to the information submitted by companies in response to the dumping and subsidy RFIs, as well as the results of the CBSA’s investigations, are provided in the Results of the dumping investigation and Results of the subsidy investigation sections of this document, respectively.

[34] As part of the final phase of the investigations, case briefs and reply submissions were provided by counsel representing the complainant, one exporter of subject goods from China, and on behalf of the Government of China. A summary of the representations is provided in Appendix 2.

Dumping investigation

[35] The following presents the final results of the investigation into the dumping of FGM originating in or exported from China.

Apparent causes of the extent of overcapacity and excess supply in the Chinese steel industry

[59] As discussed below, the extent of the production overcapacity and oversupply in the steel industry in China is largely attributed to the fact that the industry structure is developed mostly through government support and interventions than by market forces and fair competition.^{Footnote 45}

[60] After surging from 150 million MT in 2001 to 512 million MT in 2008,^{Footnote 46} a 241% increase, steel production in China increased by an additional 59% between 2008 and 2014, from 512 million MT to 813 million MT, while production capacity increased 77%, from 644 million MT to 1,140 million MT. During the 2008-2014 period, overcapacity increased from 132 million MT to 327 million MT, and utilization rate decreased from 80% to 71%.^{Footnote 47}

[61] As mentioned earlier, in 2024, the Chinese apparent market stood at 896.7 million MT, production stood at 1,005.1 million MT and capacity estimated at about 1,280 million MT, with a theoretical overcapacity of 384 million MT over domestic consumption. The CBSA recognizes that there may be a certain discrepancy between theoretical capacity and a more realistic capacity due to product mix and normal downtime for maintenance, yet, the excess capacity remains substantial. For perspective, the theoretical overcapacity is as high as the combined production of India, Japan, the United States and Russia, the next four largest global producers.^{Footnote 48} Despite a reported decline in production in 2025, the OECD expects substantial increases in steelmaking capacity in China, despite strong contraction in domestic demand and low prices.^{Footnote 49}

[62] The following graphic provide a good visual impression of the rate of the growth in steel production in China in the past quarter-century:

[63] While market forces played a role in the growth of the industry, especially prior to 2008, the massive capacity is said to exists largely thanks to “supportive industrial policies spanning decades whose sole aim was to help this strategic industry flourish.”^{Footnote 51} In particular, after the 2008 financial crisis, the Chinese government provided massive fiscal stimulus package including unprecedented large lending programs.

[64] It is said that the government-encouraged lending surge resulted mainly in the expansion of Chinese SOE production capacity, where there was no real additional demand.^{Footnote 52} In explaining the root of the overcapacity issue in China, the European Union Chamber of Commerce in China wrote that “The Chinese stimulus package poured credit into increasingly questionable projects and increased direct and indirect subsidies to investment and manufacturing. While these policies boosted the economy in the short term, in the medium term they have further distorted markets and complicated China’s economic transition.”^{Footnote 53}

[65] It also stated that “Instead of being subjected to strict market discipline, SOEs are often tasked with fulfilling broader political goals, such as pursuing market share, maintaining and expanding employment in their jurisdictions, as well as developing the capabilities and capacity to deliver for local investment projects”.^{Footnote 54} Capacity, production and market share goals are indeed used as the primary benchmarks to assess the performance of these state-controlled corporations. SOE reinvest their retained earnings to gain market share and to make their companies bigger. Such political governance of the steel industry will be further addressed later in this report.

[66] Local governments tend to encourage investments that maximize their fiscal incomes regardless of the overall market situation, and as mentioned, they encourage investments that will maintain employment in their own jurisdictions. This leads to additional state credit subsidies and implicit lending guarantees for investments. Local government protectionism has also been singled out as a reason for the industry fragmentation and lack of concentration. Local government also turn a blind-eye on violation of national environmental, health and safety standard, the equivalent of providing a local subsidy, giving those firms a distinctive cost advantage and keeps companies in business that may otherwise be closed.^{Footnote 55}

[67] A “zombie company” in the Chinese steel industry is defined as “a facility that cannot cover its full costs of production — including capital maintenance, environmental compliance, and a market rate of return — without some form of government support. It is not merely loss-making in a cyclical downturn; it is structurally unviable at any realistic point in the market cycle.”^{Footnote 56} A 2016 study reports that the steel industry in China had a proportion of zombie companies of 51.4%.^{Footnote 57} Evidently, the use of local subsidies to keep non-performing state-owned producers in business has been a significant problem in China, and a significant factor in the overcapacity problem and inefficient allocation of resources.^{Footnote 58Footnote 59}

[68] As stated by the United States International Trade Commission, “Chinese excess capacity has been facilitated by Chinese government (national and provincial) involvement in its steel industry though grants, preferential loans, debt-to-equity swaps, and tax refunds as well as various forms of indirect support to Chinese SOEs. A leading factor leading to overcapacity has been easy credit extension, via government guarantees or though state-owned banks.”^{Footnote 60}

[69] Government interventions, and particularly the provision of subsidies, including access to cheap financing, have been singled out as the reason for the state of the steel industry. As such, one must recognize the significant influence of non-market factors on overcapacity and oversupply.

Results of the dumping investigation

Subsidy investigation

[236] In accordance with section 2 of SIMA, a subsidy exists where there is a financial contribution by a government of a country, other than Canada, that confers a benefit on persons engaged in the production, manufacture, growth, processing, purchase, distribution, transportation, sale, export or import of goods. A subsidy also exists in respect of any form of income or price support within the meaning of Article XVI of the General Agreement on Tariffs and Trade, 1994, being part of Annex 1A to the World Trade Organization (WTO) Agreement that confers a benefit.

[237] SIMA defines “government” in subsection 2(1) as, in relation to any country other than Canada, the government of that country and includes:

1. any provincial, state, municipal or other local or regional government in that country
2. any person, agency or institution acting for, on behalf of, or under the authority of, or under the authority of any law passed by, the government of that country or that provincial, state, municipal or other local or regional government and
3. any association of sovereign states of which that country is a member

[238] Pursuant to subsection 2(1.6) of SIMA, a financial contribution exists where:

1. practices of the government involve the direct transfer of funds or liabilities or the contingent transfer of funds or liabilities
2. amounts that would otherwise be owing and due to the government are exempted or deducted or amounts that are owing and due to the government are forgiven or not collected
3. the government provides goods or services, other than general governmental infrastructure, or purchases goods or
4. the government permits or directs a non-governmental body to do any thing referred to in any of paragraphs (a) to (c) above where the right or obligation to do the thing is normally vested in the government and the manner in which the non-governmental body does the thing does not differ in a meaningful way from the manner in which the government would do it

[239] A state-owned enterprise (SOE) may be considered to constitute “government” for the purposes of subsection 2(1.6) of SIMA if it possesses, exercises, or is vested with, governmental authority. Without limiting the generality of the foregoing, the CBSA may consider the following factors as indicative of whether the SOE meets this standard: 1) the SOE is granted or vested with authority by statute; 2) the SOE is performing a government function; 3) the SOE is meaningfully controlled by the government; or 4) some combination thereof.

[240] If a subsidy is found to exist, it may be subject to countervailing measures if it is specific. A subsidy is considered to be specific when it is limited, in law or in fact, to a particular enterprise or is a prohibited subsidy. An “enterprise” is defined under SIMA as also including a “group of enterprises, an industry and a group of industries”. Any subsidy which is contingent, in whole or in part, on export performance or on the use of goods that are produced or that originate in the country of export is considered to be a prohibited subsidy and is, therefore, specific according to subsection 2(7.2) of SIMA for the purposes of a subsidy investigation.

[241] In accordance with subsection 2(7.3) of SIMA, notwithstanding that a subsidy is not specific in law, a subsidy may also be considered specific in fact, having regard as to whether:

• there is exclusive use of the subsidy by a limited number of enterprises
• there is predominant use of the subsidy by a particular enterprise
• disproportionately large amounts of the subsidy are granted to a limited number of enterprises and
• the manner in which discretion is exercised by the granting authority indicates that the subsidy is not generally available

[242] For purposes of a subsidy investigation, the CBSA refers to a subsidy that has been found to be specific as an “actionable subsidy”, meaning that it is countervailable.

Results of the subsidy investigation

[243] At the initiation of the subsidy investigation, the CBSA sent subsidy RFIs^{Footnote 215} to the Government of China, as well as to all known and potential exporters and producers of subject goods.

[244] Where a question required information from other authorities (e.g., state or provincial governments), the Government of China was requested to forward the questions to appropriate authorities.^{Footnote 216}

[245] The exporters and producers were requested to forward a portion of the subsidy RFI^{Footnote 217} to their suppliers of major production inputs, who were asked to respond to questions pertaining to their legal characterization as SOEs and their sales of major production inputs. Further, the exporters and producers were also requested to forward the subsidy RFI^{Footnote 218} to their related suppliers of major production inputs.

Decisions

[279] On August 24, 2026, pursuant to paragraph 41(1)(a) of SIMA, the CBSA terminated the subsidy investigation with respect to FGM originating in or exported from China by for Jiangyin Xingcheng Magotteaux Steel Balls Co., Ltd. and Tangshan ZWell Equipment Manufacturing Co., Ltd.

[280] On the same day, pursuant to paragraph 41(1)(b) of SIMA, the CBSA made a final determination respecting the dumping of FGM originating in or exported from China and a final determination of subsidizing in respect of FGM from China, with respect to exporters for which the subsidy investigation has not been terminated.

Future action

[281] The provisional period began on May 25, 2026, and will end on the date the CITT issues its finding. The CITT is expected to issue its decision by September 22, 2026. Provisional duties will continue to be imposed on the subject goods from China until the CITT renders its decision. However, provisional duties will no longer be imposed on imports of goods for which the subsidy investigation has been terminated. Any provisional duty paid or security posted will be refunded, as appropriate. For further details on the application of provisional duty, refer to the Statement of Reasons issued for the preliminary determinations.

[282] If the CITT finds that the dumped and subsidized goods have not caused injury and do not threaten to cause injury, all proceedings will be terminated. In this situation, all provisional duty paid or security posted by importers will be returned.

[283] If the CITT finds that the dumped and subsidized goods have caused injury, the anti-dumping duty and/or countervailing payable on subject goods released by the CBSA during the provisional period will be finalized pursuant to section 55 of SIMA. Imports released by the CBSA after the date of the CITT’s finding will be subject to anti-dumping duty equal to the margin of dumping and countervailing duty equal to the amount of subsidy.

[284] The importer in Canada shall pay all applicable duties. If the importers of such goods do not indicate the required SIMA code or do not correctly describe the goods in the customs documents, an administrative monetary penalty could be imposed. The provisions of the Customs Act apply with respect to the payment, collection or refund of any duty collected under SIMA. As a result, failure to pay duty within the prescribed time will result in the application of interest.

Retroactive duty on massive importations

[285] Under certain circumstances, anti-dumping and/or countervailing duty can be imposed retroactively on subject goods imported into Canada. When the CITT conducts its inquiry on material injury to the Canadian industry, it may consider if dumped and/or subsidized goods that were imported close to or after the initiation of the investigations constitute massive importations over a relatively short period of time and have caused injury to the Canadian industry. Should the CITT issue a finding that there were recent massive importations of dumped and/or subsidized goods that caused injury, imports of subject goods released by the CBSA in the 90 days preceding the day of the preliminary determinations could be subject to anti-dumping and/or countervailing duty.

[286] In respect of importations of subsidized goods that have caused injury, this provision is only applicable where the CBSA has determined that the whole or any part of the subsidy on the goods is a prohibited subsidy. In such a case, the amount of countervailing duty applied on a retroactive basis will equal the amount of subsidy on the goods that is a prohibited subsidy. An export subsidy is a prohibited subsidy according to subsection 2(1) of SIMA.

Publication

[287] A notice of these final decisions of dumping and subsidizing will be published in the Canada Gazette pursuant to paragraphs 41(3)(a) and 41(4)(a) of SIMA.

Contact us

[288] For further information, please contact the email address identified below:

Email: trade_remedies_registry-registre_recours_commerciaux@cbsa-asfc.gc.ca

Appendix 1: Summary of margins of dumping and amounts of subsidy

Appendix 2: Dumping and subsidy representations

Following the closing of the record on July 6, 2026, case briefs and reply submissions were received on behalf of the following parties:

• The complainant^{Footnote 222}
• Changshu Longte Grinding Ball Co., Ltd.^{Footnote 223} and
• Government of China^{Footnote 224}

The CBSA also received case arguments from Oriental Casting and Forging Co. Ltd. (Oriental Casting) after the due date. As the comments were received after the close of record and after the prescribed submission period for case arguments, the CBSA did not post the comments to the exhibits listing and the comments were not taken into consideration for the purposes of the final determinations. The CBSA did not receive any reply submissions from Oriental Casting.

Certain details provided in case briefs and reply submissions were designated as confidential information by the submitting counsel. This has restricted the ability of the CBSA to discuss all issues raised in these submissions. The material issues raised by the parties are summarized as follows:

Section 20 is not applicable as adjusted benchmarks do not support that prices in China are not what they would be in a competitive market

Case briefs

Changshu Longte Grinding Ball Co., Ltd. (Changshu Longte) argued that since the section 20 allegation rests on the theory that the Government of China indirectly determines domestic FGM prices through its control over the price of steel inputs, then the correct analytical lens would be to trace distortion to the input price paid by the FGM producer.^{Footnote 225} Changshu Longte argued that if section 20 conditions existed in respect of the Chinese FGM sector, one would expect to observe artificially depressed input prices.^{Footnote 226}

Changshu Longte suggests that a comparison with benchmarks would show no distortions once the benchmarks are adjusted for differences in logistics costs of procurement. For instance, Changshu Longte suggested using adjusted European prices (i.e. Germany and Italy) reported by CRU, which are available on the record,^{Footnote 227} to compare with its own acquisition cost of SBQ steel bar, the higher quality steel bar required to produce certain FGM products.^{Footnote 228} Pointing out that the CRU reported prices for German and Italian prices are on a delivered basis, Longte suggests using its own cost to move FGM from China to Canada, including ocean and inland freight, port charges, etc., to adjust the published European prices.^{Footnote 229} Changshu Longte then argued that its own purchase prices for domestic steel bar, or those of the other respondents, are comparable to the European prices as published by CRU, as adjusted by Changshu Longte.^{Footnote 230} Recognizing that SBQ steel requires a premium, Changshu Longte then suggested an upward adjustment to the benchmark.^{Footnote 231} Changshu Longte suggested that a comparison of the benchmark, adjusted for quality and freight, with its own purchase price, or with those reported by all five respondents would result in a differential that it does not consider to be substantial.^{Footnote 232}

Reply submissions

As a reply, Moly-cop Canada argued that Longte’s benchmark comparison is methodologically flawed, although even its own data suggests significant differences in prices.^{Footnote 233}

CBSA’s response

As discussed in the section of this Statement of Reasons on Section 20, as well as in the CBSA’s Section 20 Report for the Final Determination,^{Footnote 234} the CBSA compared the reported prices paid by the five respondents for merchant steel bar of Chinese origin, used for their production of FGM, with the prices paid by Moly-cop Mexico for merchant steel bar of Mexican origin, used for the company’s production of FGM. The CBSA compared net weighted average monthly prices (i.e. net of taxes and freight) of goods of similar qualities (i.e. MBQ vs SBQ) in both markets, and determined that Chinese FGM producers are able to acquire their principle input at a weighted average price that is substantially lower than the price paid by the FGM producer in Mexico, for substantially the same domestic products, at substantially the same time.

Furthermore, the CBSA also looked at the CRU published prices for merchant bar that were available on the record.^{Footnote 235} The CRU data on the record include prices for merchant steel bar for China (ex-warehouse Shanghai, VAT included), Asia (CFR non-CIS import basis), Germany (delivered), Italy (delivered) and USA Midwest (FOB mill). Even though the steel bars used to make FGM are of a higher level of quality than typical “Merchant Bar” product for which there are available reported benchmarks, these benchmarks nevertheless provide a representative overview of the price differential between merchant bar prices in China with other reference points of comparable goods. There is no need for a quality adjustment as CRU provides prices for comparable standard commercial quality steel regardless of the benchmark. The CBSA does agree with Changshu Longte that other adjustments are required to ensure a proper comparison, mainly with respect to freight and taxes.

While the CBSA agrees with the necessity to adjust the German and Italian prices, which are provided on a delivered basis, the CBSA disagrees that the cost to move FGM from China to Canada, which was the basis for the adjustment suggested by Changshu Longte, provides a reasonable basis to estimate the domestic delivery costs within Germany or Italy. The object is not to compare import price of Chinese bar to Europe with domestic prices in China. Even when deducting the highest amount of domestic freight on the record (using responses from the respondents and those from the surrogates in Chile and Mexico), the analysis demonstrates that purchasers in China are able to acquire merchant bar at prices that are substantially lower than the prices paid in Europe or elsewhere, for substantially the same products, at substantially the same time. Furthermore, considering that the CRU prices for China are VAT-included, the Chinese prices should be adjusted to remove the VAT. After this adjustment, the differential with the European adjusted price increases to 42.4%. The differential would be even higher if the inland freight to move bar from the mill to Shanghai warehouse is also deducted.

As argued by Changshu Longte in its case brief, if section 20 conditions existed in respect of the Chinese FGM sector, one would expect to observe artificially depressed input prices.^{Footnote 236} This is precisely what the CBSA is observing. Even if Europe is, as argued by Changshu Longte, not a perfectly comparable benchmark market to Asia because of general higher costs in the region,^{Footnote 237} and even considering the larger production scale in China, the CBSA believes that the evidence on the record nevertheless suggests a significant price differential between domestic prices in China and those in different markets, which it believes is largely attributed to government intervention in the Chinese steel market, including the direct effect of the subsidizing of the industry on the industry’s cost structure, as well as the indirect effect of the subsidizing on overcapacity and oversupply, with its resulting pressure on prices.

Applicability of paragraph 19(b) where section 20 conditions exist

Case briefs

Counsel for Changshu Longte submitted that, notwithstanding the section 20 finding, normal values should be calculated under paragraph 19(b) of SIMA using the exporter’s own costs, selling expenses and profit, relying on a constructed-cost approach where reliable costing information is available.^{Footnote 238}

Reply submissions

Counsel for the complainant submitted that paragraph 19(b) is inapplicable once section 20 conditions are found to exist, as section 20 displaces the ordinary normal value provisions by operation of the statutory text. Counsel further characterized the exporter’s alternative margin calculation under paragraph 19(b) as circular, submitting that it depends on premises the CBSA has already rejected.^{Footnote 239}

CBSA’s response

The CBSA considered the case briefs and reply submissions provided by counsel, as well as any representations filed during the investigation before the close of record. The CBSA has formed the opinion that section 20 conditions exist in the FGM sector in China and that the normal values have been determined pursuant to a ministerial specification under section 29 of SIMA, using a methodology described in section 20 of SIMA.

The CBSA should adjust the costs of production from the surrogate producers when determining normal values under section 20

Case briefs

Changshu Longte argued that if the CBSA determines the normal values pursuant to section 20 of SIMA, the costs of production of the surrogate producers should be adjusted by substituting only the price of the steel input material, while using the rest of the Chinese producers’ own conversion costs and amounts for profits to construct normal values.^{Footnote 240} In addition, Changshu Longte argued that the cost of steel input from the surrogate producers should be adjusted by deducting the freight cost included in the cost of input, to reflect the lower logistics costs of procurement of Chinese producers.^{Footnote 241} Changshu Longte argued that the variance between the prices it pays for its domestic bar prices and the price paid by the surrogate is related to logistics costs of procurement and not to any section 20 conditions in China.^{Footnote 242} Changshu Longte also maintained that costs incurred by trading companies should also be removed from the cost of production, along with the trading company’s markup.^{Footnote 243}

Reply submissions

Moly-cop Canada argued that no such adjustment is warranted and such adjustments would be contrary to section 20(1)(c), and that the CBSA rejected similar arguments in past investigations involving surrogate normal values, including Oil Country Tubular Goods, Truck Bodies, CISP and Wind Towers.^{Footnote 244} Moly-cop Canada also argued that “Stripping out these costs, as Changshu Longte proposes, would effectively import the very distortion that Section 20 is designed to eliminate.”^{Footnote 245}

CBSA’s response

Pursuant to paragraph 20(1)(c) of SIMA, the normal values of the goods is:

The adjustments to the normal values are prescribed in section 3 to 10 of the Special Import Measures Regulations (SIMR). Furthermore, subsection 11(1) of the SIMR specifies that

The CBSA agrees with the complainant that there are no basis under SIMA to determine normal values or adjust costs in the manner suggested by Changshu Longte. As explained in the body of this Statement of Reasons, for the vast majority of subject goods, the normal values were determined on the basis of methodology of subparagraph 20(1)(c)(i), based on the prices of like goods in Chile and Mexico. As mentioned earlier, where warranted, these prices were adjusted in the manner prescribed in the SIMR (i.e. pursuant to paragraph 5(d) and section 10). For some goods, the normal values were determined using the methodology of subparagraph 20(1)(c)(ii), on the basis of a constructed costs. For this purpose, costs were determined in the manner specified by subsection 11(1) of the SIMR, including all costs attributable to, or in any manner related to, the production of the goods. The domestic sales used in the determination of the amount for profit were also adjusted in the prescribed manner.

Furthermore, in forming an opinion that the government of the prescribed country substantially determines domestic prices and there is sufficient reason to believe that they are not substantially the same as they would be if they were determined in a competitive market, the CBSA is not directed to assess and rule on every single distinct aspect of the micro and macro-economic environment which may influences prices in that country (e.g. labour, freight, electricity, banking sector, etc.). As such, after having formed the opinion that section 20 is applicable, the normal values were determined using the methodologies of subparagraphs 20(1)(c)(i) and 20(1)(c)(ii), in the manner detailed in the body of this Statement of Reasons.

Relationship between the complainant and the surrogate producers

Case briefs

Changshu Longte argued that the fact that the surrogate producers whose data the CBSA is relying on are related to the complainant warrants additional caution and scrutiny from CBSA when evaluating comparability of the surrogate data.^{Footnote 246} While the exporter acknowledged that there is no evidence on the record suggesting that the costs from Moly-cop Chile or Mexico are artificially inflated, Changshu Longte noted that it appears that the CBSA did not verify the data of Moly-Cop Mexico.^{Footnote 247}

Reply submissions

The complainant argued that the relationship between the surrogates and Moly-cop Canada does not vitiate the data.^{Footnote 248}

CBSA’s response

In the course of the investigation, the CBSA afforded the same level of scrutiny to the surrogates’ data as to the respondents’. The CBSA sent multiple Supplemental Request for Information to all parties, including to both surrogates, in order to obtain clarification as well as to assess the completeness, accuracy and reliability of their responses. Changshu Longte and Moly-cop Chile were also verified on-site by the CBSA.

Export price determination

Case briefs

Counsel for the complainant submitted that Changshu Longte failed to produce documents necessary to assess export price reliability under section 24 and 25 of SIMA and whether the export price has been influenced by the relationship between the parties.^{Footnote 249}

Counsel for Changshu Longte submitted that the export price should be calculated under section 24 as the parties are not “associated persons” within the meaning of subsection 2(2) of SIMA and that the CBSA’s own reliability testing did not indicate the transaction price was influenced by their relationship.^{Footnote 250}

Reply submissions

In reply, counsel for the complainant submitted that the association inquiry extends beyond the relatedness criteria in subsection 2(3) to persons not dealing at arm’s length under paragraph 2(2)(b) and that a joint venture linking the exporter’s input supplier to the importer’s parents company warrants continued scrutiny of the relationship.^{Footnote 251}

CBSA’s response

The CBSA has considered the case briefs and reply submissions provided by the parties’ counsel, as well as any representations filed during the investigation before the close of record. Due to the relationship between the parties involved in the export sales, the CBSA performed a reliability test by comparing the export prices estimated in accordance with section 24 of SIMA, to the export prices estimated in accordance with paragraph 25(1)(c) of SIMA. Further to the reliability test, the export prices estimated under section 24 were found to be reliable for the purposes of SIMA. As such, export prices for Changshu Longte were estimated in accordance with section 24 of SIMA, based on the lesser of the adjusted exporter’s selling price or the adjusted importer’s purchase price.

Completeness and accuracy of exporters’ submissions

Case briefs

Counsel for the complainant submitted that Changshu Longte Group’s record submissions contain material deficiencies warranting application of ministerial specifications under subsection 29(1) and subsection 30.4(2) of SIMA where information remains insufficient.^{Footnote 252}

Counsel for Changshu Longte submitted that it and its affiliated entities provided sufficient information throughout the investigation to allow the CBSA to calculate exporter-specific normal values and export prices that all related companies acted in good faith and within the CBSA’s deadlines and that the CBSA had verified all responses filed on behalf of the exporter and its affiliates without notifying them of any unresolved deficiencies.^{Footnote 253}

Counsel for the complainant further submitted that the records of the responding exporters contain unreliable information and unresolved deficiencies including unreconciled discrepancies or missing cost data for related-party input transactions, insufficient evidence to satisfy the comparative test, unverified or unsupported benchmark pricing and for some exporters, a lack of on-site verification. Counsel submitted that these deficiencies warrant continued reliance on facts available, including ministerial specifications under section 29 of SIMA where necessary.^{Footnote 254}

Counsel for the complainant further submitted that the subsidy rates determined for these exporters should be increased to reflect benefits on the record that were not fully captured and subsidies received by related input suppliers that were not adequately disclosed or quantified. Counsel also submitted that critical information requested of Oriental Casting remains outstanding and as such, Oriental Casting's subsidy questionnaire responses should be considered deficient and the CBSA should maintain the all other non-cooperative exporters rate for Oriental Casting in the final determination of subsidy.^{Footnote 255}

Reply submissions

In reply, counsel for the complainant submitted that the exporter’s case brief did not address the deficiencies identified in the complainant’s case brief and that the CBSA should take these outstanding deficiencies into account in the final determination.^{Footnote 256}

CBSA’s response

The CBSA has considered the case briefs and reply submissions provided by counsel for Changshu Longte and counsel for the complainant regarding the completeness and accuracy of the responding exporters’ submissions. None of these exporters, other than Changshu Longte, filed a case brief or reply submission. The CBSA has determined that the information provided by these exporters, including Oriental Casting, was substantially complete for the purposes of the final determinations for both the dumping and subsidy investigations. The CBSA’s determination of normal values, export prices and amounts of subsidy for these exporters is set out in the Results of the Dumping Investigation and Results of the Subsidy Investigation sections of this document.

Determination of an amount of subsidy

Case briefs

Counsel for Changshu Longte submitted that subsidies should not exceed one level preceding the exporter. Even so, there needs to be evidence to show the subsidy pass through and a connection to the subject goods. Counsel also submitted that subsidies should be properly amortized and allocated based on what was used for subject goods, and equipment subsidies that were not used for subject goods should be removed.^{Footnote 257}

Reply submissions

Counsel for the complainant submitted that upstream subsidies can be pursued throughout the production chain when all the parties are associated and in the case of a vertically integrated company, it can be presumed that any upstream subsidies were passed through to the producer of the goods. Counsel also submitted that there is no legal basis under SIMA to exclude any subsidy categories as non-actionable. Counsel acknowledges that appropriate allocation may be warranted on certain basis such as capital equipment unrelated to the production of FGM.^{Footnote 258}

CBSA’s response

The CBSA considered the case briefs provided by counsel. The CBSA reviewed the evidence on the record regarding the pass-through of subsidies received by related input suppliers for the relevant cooperative exporters. For the purpose of the final determination, the CBSA determined the amount of subsidy based on the verified information as provided by the cooperative exporters.

Subsidy programs identified at the initiation

Case briefs

Counsel on behalf of the Government of China submitted that: the CBSA should ensure that program allegations meet the required initiation standard; the complaint and the initiation record did not provide sufficient program-specific evidence for certain programs; the programs were not sufficiently identified or substantiated to permit a meaningful government response; such allegations/programs did not provide a sufficient program-specific basis for initiation or continued examination in this investigation; certain allegations derived from prior proceedings were based on outdated or inapplicable legal premises; program allegations based on prior proceedings, broad descriptions, obsolete legal instruments, or the mere possibility of use should not be initiated or pursued without evidence showing their relevance to the subject goods and the responding companies during the POI; and the subsequent investigation should not be used to cure the absence of sufficient evidence at the time of initiation.^{Footnote 259}

CBSA’s response

The CBSA reviewed the information contained in the supporting documents submitted in the complaint, facts available on the administrative record for the CBSA’s previous subsidy proceedings, as well as other publicly available reference material, to determine whether the programs could constitute financial contributions in accordance with subsections 2(1) and 2(1.6) of SIMA. The programs were further examined to establish whether they could also be considered specific under subsections 2(7.2) or 2(7.3) of SIMA. At the time of initiation, the CBSA found sufficient evidence to support an investigation into all of the consolidated programs mentioned in the Initiation Statement of Reasons.

Subsidy programs identified after the initiation

Case briefs

Counsel on behalf of the Government of China submitted that programs identified only after initiation should not be treated as automatically covered by the original initiation, but should undergo a separate evidentiary assessment and the required procedural safeguards. Further, before pursuing such programs, the CBSA should conduct a separate program-specific evidentiary assessment consistent with articles 11.2 and 11.3 of the SCM agreement and provide adequate notice and a meaningful opportunity for the Government of China to consult and respond. The Government of China also submitted that a program should not be treated as properly initiated merely because an enterprise respondent reported it; and the CBSA should not examine or make countervailing findings on later-identified programs unless those programs have been separately supported by sufficient evidence and subjected to the required procedural safeguards.^{Footnote 260}

CBSA’s response

At the initiation, the Government of China has been provided a list of known and potential exporters and producers of subject goods and their contact information. For this investigation, the responding companies reported to have received benefits under their recorded programs. During the investigation, the CBSA has conveyed the available program information and the names of responding companies to the Government of China through the government subsidy supplemental RFIs and has offered opportunities to the Government of China to provide the information for those programs recorded by the responding companies and for additional programs investigated by the CBSA. The Government of China did not provide the requested information to enable the CBSA to have sufficient information to consolidate duplicate and/or equivalent programs and to obtain the official program names for the most of programs recorded by the responding companies. For the final determination, based on the facts available on the administrative record, the CBSA consolidated the programs recorded by the responding companies and additional programs further identified by the CBSA, and found a total of 34 consolidated subsidy programs that have conferred benefits to subject goods during the POI.

Government extension request for subsidy investigation

Case briefs

Counsel on behalf of the Government of China submitted that: the CBSA should recognize that reasonable extensions were necessary to provide the Government of China with a meaningful opportunity to respond; such extensions were necessary to ensure a complete and reliable response; the Government of China needed additional time before it could begin preparing its substantive response; and the Government of China required additional time because its response involved internal procedures and broad coordination.^{Footnote 261}

CBSA’s response

For this investigation, the Government of China was initially given 37 days to respond to the government subsidy RFI. Following the Government of China’s extension request, the CBSA has further granted an extension to the due date of their response to the government subsidy RFI from February 17, 2026 to March 2, 2026.

Scope of subsidy investigation

Case briefs

Counsel on behalf of the Government of China submitted that: the CBSA’s investigative approach unreasonably increased the burden on the Government of China; the CBSA did not select a fixed group of mandatory enterprise respondents at the outset in this investigation; because the scope of the Government of China’s response depended on which enterprises participated and which programs they reported, the Government of China did not initially know which companies, programs, authorities, and related entities would ultimately be covered; as additional companies and programs were identified during the investigation, the Government of China was required to respond to a continuously changing scope of inquiry, rather than a stable and clearly defined investigation; the CBSA also identified documents and measures through online research and requested the Government of China to confirm and explain them without first adequately establishing their relevance to the responding companies, the subject goods, or the POI; and open-ended investigative methods should not be used in the investigations.^{Footnote 262}

CBSA’s response

At the initiation, the Government of China has been provided a list of known and potential exporters and producers of subject goods and their contact information. The Government of China was requested to provide the information for all the subject goods exported to Canada by both responding companies and non-responding companies and for all the programs that have conferred benefits to exporters and/or producers of subject goods. As such, the scope of this investigation was defined. All the inquiries associated with the research of the public available information were related to the subsidy programs investigated by the CBSA in this investigation. These inquiries were used for the purposes of verifying the existence of the investigated programs or collecting the information associated with the programs recorded by the responding companies.

Use of best information available in subsidy investigation

Case briefs

Counsel on behalf of the Government of China submitted that: the CBSA should not rely on best information available without a program-specific explanation; and to the extent the CBSA considers that information remains missing for any specific program, it should identify the precise information gap, explain why that gap is material to the subsidy analysis, and conduct the required program-specific analysis based on the record.^{Footnote 263}

Counsel on behalf of the complainant submitted that the Government of China filed partial responses to the subsidy investigation RFI but failed to provide complete responses despite receiving two supplemental RFIs and an on-site verification.^{Footnote 264}

Reply submissions

Counsel on behalf of the complainant submitted that the CBSA properly treated the Government of China’s response as partially complete and should continue to rely on best information available under SIMA where the Government of China’s submissions are deficient.^{Footnote 265}

CBSA’s response

For the final determination, the program-specific analysis has been performed for each program as recorded by the responding companies and for each consolidated subsidy program. Where sufficient information has not been provided by the Government of China and the responding companies, the CBSA used facts available on the administrative record in its determination.

Subsidy New Program 4: Tax handling fee refund

Case briefs

Counsel on behalf of the Government of China submitted that: New Program 4 “Tax handling fee refund” does not constitute countervailable subsides; and tax handling fee refunds are compensation for withholding services and do not confer a benefit and are not specific.^{Footnote 266}

Reply submissions

Counsel on behalf of the complainant submitted that: tax handling fee refund is revenue foregone by the Government of China that the enterprise would not otherwise receive but for the government program; whether characterized as compensation for a withholding function or otherwise, the financial contribution and benefit elements are satisfied; and the CBSA should maintain its finding.^{Footnote 267}

CBSA’s response

For the final determination, due to the lack of information available on the administrative record, the CBSA was unable to determine the fair market value for the services as provided to the Government of China under this program. Further, the CBSA has determined this program to be not specific. As such, this program was removed from the investigation for the purposes of the final determination.

Subsidy Program 21: Corporate Income Tax Reduction for New and High Technology Enterprises (“NHTE”) and subsidy Program 22: Research and Development (“R&D”) Super Deduction

Case briefs

Counsel on behalf of the Government of China submitted that: the program “R&D super deduction” is not specific; specificity should be determined on a program-specific basis, based on law and evidence; the CBSA did not adequately consider the Government of China’s explanations concerning the R&D super deduction and NHTE (“New High Technology Enterprise”) income tax reduction; and the CBSA’s findings on these 2 programs lack a sufficient factual and legal basis.^{Footnote 268}

Reply submissions

Counsel on behalf of the complainant submitted that: the CBSA has consistently found Chinese R&D subsidies to be specific and actionable under SIMA; a subsidy that is available “in law” to all enterprises may nonetheless be found specific “in fact” under subsection 2(7.3) of SIMA; the Government of China provided no de facto specificity data; and the CBSA’s finding should be maintained.^{Footnote 269}

CBSA’s response

Program-specific analysis has been performed for the program 21 “Corporate Income Tax Reduction for New and High Technology Enterprises (“NHTE”)” and the program 22 “Research and Development (“R&D”) Super Deduction”. Details could be found in the Appendix 3 of this Statement of Reasons. For the final determination, based on the facts available on the administrative record, the CBSA has determined these 2 programs to be specific and therefore actionable in accordance to the paragraph 2(7.2) (a) or subsection 2(7.3) of SIMA.

Subsidy Program 34: Loans from State-Owned Banks

Case briefs

Counsel on behalf of the Government of China made the following comments with respect to Program 34 “Loans from State-Owned Banks”:^{Footnote 270}

• the CBSA’s findings on Program 34lack a sufficient factual and legal basis and loan programs require a transaction-specific analysis of the lender, the loan terms, the benchmark, the benefit calculation, and specificity
• a general memorandum concerning the institutional status of a bank does not establish that:
  • a particular loan to a responding exporter or related supplier was made pursuant to a government program
  • the bank acted as a government or public body in relation to that specific loan
  • the loan conferred a benefit
  • the alleged loan program was specific
• it has not been established that the loans under investigation were made under a government program rather than through ordinary commercial lending
• the CBSA was therefore required to make transaction-specific findings concerning the actual loans under investigation, including the lender’s role, the loan terms, benchmark, benefit, and specificity
• if the CBSA uses the Loan Prime Rates (LPRs) as the relevant benchmark for commercial loans in China, it must explain LPR approximates a comparable commercial loan for each investigated loan and must compare the actual terms of each loan with the appropriate benchmark, taking into account currency, term, timing, size, structure, creditworthiness, collateral, fees, and other relevant loan conditions
• the bank memos do not make loan-specific comparison and the CBSA should not countervail loans based on the bank memos alone
• at minimum, the CBSA must identify the specific loan, the lender, the legal and factual basis for treating the lender as the government or a public body in relation to that loan, the applicable benchmark, the benefit calculation, and the evidence supporting specificity

Reply submissions

Counsel on behalf of the complainant submitted that under SIMA subsection 2(1), “government” includes any public body that possesses, exercises, or is vested with governmental authority. They further submitted the CBSA’s institutional analysis is a necessary first step, and that transaction-specific benefit analyses follows. Having refused three times to forward the CBSA’s bank questionnaires and having blocked the CBSA from obtaining the very transaction-specific data it now demands, the Government of China cannot complain that the analysis lacks transaction-level granularity.^{Footnote 271}

CBSA’s response

Program-specific analysis has been performed for the program 34 “Loans from State-Owned Banks”. Details could be found in the Appendix 3 of this Statement of Reasons. For the final determination, based on the facts available on the administrative record, the CBSA has determined this program to be specific and therefore actionable in accordance to subsection 2(7.3) of SIMA.

Determination of all other exporters rate for subsidy investigation

Case briefs

Counsel on behalf of the Government of China made the following comments with respect to the determination of all other exporters rate:^{Footnote 272}

• the all other exporters rate must be based on a reasoned and record-supported methodology and this is reinforced by article 19.4 of the SCM agreement and article VI:3 of the GATT 1994
• the all other exporters rate therefore must remain connected to the subsidy actually found, or reasonably supported by the record, and cannot be constructed through assumptions that overstate the amount of subsidy attributable to exporters that were not individually examined
• current methodology is not supported by the record and based on multiple layers of adverse assumptions, rather than a rate that reasonably reflects the subsidy found to exist for any exporter or for the subject goods
• current methodology risks overstating all other exporters rate based on assumptions without supporting evidence on the record
• the CBSA should revise the all other exporters rate as estimated at the preliminary determination and any revised rate should be based on a reasonable and record-supported methodology that reflects the subsidy amounts actually found in this investigation
• at minimum, the CBSA should not include amounts for programs for which it has not established financial contribution, benefit and specificity, and should not apply the highest observed benefit under one set of programs to different programs for which sufficient program-specific information is unavailable

CBSA’s response

For the final determination, the CBSA has found a total of 34 consolidated subsidy programs that have conferred benefits to subject goods during the POI and all these consolidated subsidy programs are specific and therefore actionable. Based on the facts available on the administrative record, these 34 subsidy programs are consolidated from the programs recorded by the responding companies and additional programs further identified by the CBSA to account for duplicate and/or equivalent programs. For the final determination, for exporters of subject goods originating in or exported from China that did not provide a response to the subsidy RFI, or did not furnish sufficient information, an amount of subsidy was calculated on the basis of the sum of the highest amount of subsidy for each of the 34 consolidated subsidy programs, as found at the final determination, for the cooperative exporters located in China for whom the CBSA has sufficient information to determine an amount of subsidy.

Appendix 3: Summary of findings for subsidy programs

For the final determination, based on the information available on the administrative record, the CBSA consolidated the programs recorded by the responding companies and additional programs further identified by the CBSA to account for duplicate and/or equivalent programs, and found a total of 34 consolidated subsidy programs that have conferred benefits to subject goods during the POI.

For the final determination, the comments from the responding companies for the specificity of their recorded subsidy programs and the comments from the Government of China for the specificity of the investigated subsidy programs have been taken into consideration.

Category 1: Grants and grants equivalents

Program 1: Grants related to Foreign Trade Development Fund

General information

Through the foreign trade development fund, the Government of China provides funding support to exporting enterprises: to improve the competitiveness of their exported products; to develop an export processing base; to support the registration of trademarks in foreign countries; to support the training of foreign trade professional; and to explore international markets.

The following programs recorded by the responding companies have been consolidated into this program:

• 2021 Yushan High-Tech Zone Incentive for Promoting High-Quality Enterprise Development
• 2023 Central Government Special Fund for Foreign Trade and Economic Development
• 2023 Special Fund for High-Quality Development of Manufacturing
• Promoting High-Quality Development
• Provincial Special Fund for Foreign Economic and Trade Development

Financial contribution and benefit

For the purposes of the final determination, this program provides a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA in the form of a direct transfer of funds from the government, and it confers a benefit to the recipient equal to the amount of the grant.

Specificity

The Government of China did not provide information for the programs recorded by the responding companies. The responding companies also did not provide sufficient de jure and/or de facto evidence to demonstrate that the recorded programs are not specific. Based on the facts available on the administrative record, this program constitutes a prohibited subsidy (i.e., export subsidy) as defined in subsection 2(1) of SIMA. For the purposes of the final determination, the CBSA has determined this program to be specific pursuant to paragraph 2(7.2)(b) of SIMA.

Program 2: Grants related to Export Development, Performance and Assistance

General information

Under this program, certain companies in China received grants provided by the Government of China through sources other than foreign trade development fund to assist them in the development of export markets or to recognize their export performance.

The following program recorded by the responding company has been consolidated into this program:

• 2023: Encouraging Foreign Trade Enterprises to Maintain Stability and Improve Quality

Financial contribution and benefit

For the purposes of the final determination, this program provides a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA in the form of a direct transfer of funds from the government, and it confers a benefit to the recipient equal to the amount of the grant.

Specificity

The Government of China did not provide information for the program recorded by the responding company. The responding company also did not provide sufficient de jure and/or de facto evidence to demonstrate that the recorded program is not specific. Based on the facts available on the administrative record, this program constitutes a prohibited subsidy (i.e., export subsidy) as defined in subsection 2(1) of SIMA. For the purposes of the final determination, the CBSA has determined this program to be specific pursuant to paragraph 2(7.2)(b) of SIMA.

Program 3: Grants related to Research and Development

General information

This program constitutes financial aid for certain enterprises who are determined to have undertaken encouraged research and development activities.

The following programs recorded by the responding companies have been consolidated into this program:

• 2022: High Precision Series Rolling Functional Components Project
• 2023: Technology Application and Demonstration of Cable Suspension Bridges with Super Large Spans
• 2023: Special Alloy Large Ingot Purification Melting and Homogenization Control Technology
• 2023: Special Alloy Large Ingot Purified Melting and Homogenization Control Technology
• 2023: Super Large Span Cable Suspension Bridge Cable and Anchorage System Technology Application and Demonstration
• 2023: Ultra-High Strength, Ultra-Corrosion Resistant, High Fatigue Resistance Bridge Cables and Protective Materials Research and Development
• 2024: Industrial Manufacturing Technology of High Crack Resistance Thick Steel Plates for Extreme Marine Conditions
• 2024: Industrial Manufacturing Technology of Thick Steel Plates for Large Heat Input Welding Resistance
• 2024: Key Technologies for Segmented Control of Ultra-low Oxygen Titanium Smelting of Bearing Steel
• 2024: Research on the Evolution of Microstructure and Properties of Bearing Steel Processing Based on Artificial Intelligence
• 2024: Long Life and High Stability Bearing Steel Performance Evaluation and Demonstration Application
• 2024: Quality Carbon Steel Specification for Deep Drawing
• 2025: Research and Application of Materials for High Precision, High Speed, and High Rigidity Ball Screw Pairs
• 2025: Research and Application of High Precision, High Speed, and High Rigidity Ball Screw Pair Materials
• Application of Intelligent Manufacturing Mode for High Temperature Alloy Materials
• New Vanadium-based Materials Multi-scenario Application R&D Fund
• R&D Funding for High-strength Vanadium-bearing Forged Continuous Casting Round Billet Project

Financial contribution and benefit

For the purposes of the final determination, this program provides a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA in the form of a direct transfer of funds from the government, and it confers a benefit to the recipient equal to the amount of the grant.

Specificity

The Government of China did not provide information for the programs recorded the responding companies. The responding companies also did not provide sufficient de jure and/or de facto evidence to demonstrate that the recorded programs are not specific. For the purposes of the final determination, based on the facts available on the administrative record, the CBSA has determined this program to be specific pursuant to subsection 2(7.3) of SIMA.

Program 4: Grants related to Trademarks and Branding

General information

These grants are provided to certain enterprises who are recognized for their brands or trademarks or standards development.

The following program recorded by the responding company has been consolidated into this program:

• 2023: Brand, Quality, Standardization Construction Special Funds

Financial contribution and benefit

For the purposes of the final determination, this program provides a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA in the form of a direct transfer of funds from the government, and it confers a benefit to the recipient equal to the amount of the grant.

Specificity

The Government of China did not provide information for the program recorded by the responding company. The responding company also did not provide sufficient de jure and/or de facto evidence to demonstrate that the recorded program is not specific. For the purposes of the final determination, based on the facts available on the administrative record, the CBSA has determined this program to be specific pursuant to subsection 2(7.3) of SIMA.

Program 5: Performance Award Grants

General information

These grants and awards provide financial aids to certain enterprises with excellent performances or for recognition of their contributions to the local economy.

The following programs recorded by the responding companies have been consolidated into this program:

• 2023: Town level High Quality Economic Development Award
• 2024: High tech Enterprise Recognition Award
• 2024: Town level High Quality Economic Development Award
• 2024: Jiangsu Provincial Quality Award Subsidy Funds
• Changshu Municipal High Quality Development Award for 2024
• Reward funds for cities with strong quality
• Specialized and innovative "Little Giant" Enterprise Award
• Technology standard rewards
• The 8th Qingdao Mayor Quality Award

Financial contribution and benefit

For the purposes of the final determination, this program provides a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA in the form of a direct transfer of funds from the government, and it confers a benefit to the recipient equal to the amount of the grant.

Specificity

The Government of China did not provide information for the programs recorded by the responding companies. The responding companies also did not provide sufficient de jure and/or de facto evidence to demonstrate that the recorded programs are not specific. For the purposes of the final determination, based on the facts available on the administrative record, the CBSA has determined this program to be specific pursuant to paragraph 2(7.2)(a) or subsection 2(7.3) of SIMA.

Program 6: Environmental Protection, Energy Conservation and Emission Reduction Grants

General information

These are grants provided by the Government of China to certain enterprises for the purposes of improving environmental performance, such as monitoring and cleaning pollutants, improving energy efficiency, upgrading facilities to be more environmentally efficient, and treatment of waste water.

The following programs recorded by the responding companies have been consolidated into this program:

• 2019-2020: Provincial environmental protection guidance fund
• 2021: Port dust online monitoring system project (Changshu Transport Bureau)
• 2021: Development and Industrialization of High Performance Steel Materials Based on Green Energy-saving Processes
• 2022: Central air pollution prevention and control fund
• 2023: Unorganized Emission Control Enhancement Project
• 850 steel rolling Stick line Zhongbang High Speed Rail Plant 2 High speed wire and blast furnace heating furnace SDS calcium based desulfurization 0.15
• 850 steel rolling Stick line Zhongbang High Speed Rail Plant 2 High speed wire and blast furnace heating furnace SDS calcium based desulfurization 0.3
• Converter triple dust removal
• Dust control project in electric furnace area
• Energy Saving and Carbon Reduction Fund
• Energy Saving and Carbon Reduction Subsidy
• Environmental “Class A” Achievement Subsidy
• Environmental ultra-low emission upgrading and renovation project

Financial contribution and benefit

For the purposes of the final determination, this program provides a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA in the form of a direct transfer of funds from the government, and it confers a benefit to the recipient equal to the amount of the grant.

Specificity

The Government of China did not provide information for the programs recorded by the responding companies. The responding companies also did not provide sufficient de jure and/or de facto evidence to demonstrate that the recorded programs are not specific. For the purposes of the final determination, based on the facts available on the administrative record, the CBSA has determined this program to be specific pursuant to paragraph 2(7.2)(a) or subsection 2(7.3) of SIMA.

Program 7: Subsidies Related to Company/Enterprise Development and Innovation

General information

Grants and incentives are provided to encourage and support certain enterprises to develop business processes or promote innovation.

The following programs recorded by the responding companies have been consolidated into this program:

• 2021: JITRI-Xingcheng Special Steel Joint Innovation Center
• 2024: Provincial Manufacturing High Quality Development Incentive Fund
• Funding and Award for 2024 Standardization Projects
• Funding for the 2023 Changshu Science and Technology Innovation Carrier Recognition Award Subsidy Project
• Prize for Enterprise Group, 5th Shandong Provincial New Material Industry Innovation and Entrepreneurship Competition
• Special Fund for High Quality Development of Manufacturing Industry in Changshu City in 2023
• Special Fund for High-quality Economic Development of Meili Town in 2023

Financial contribution and benefit

For the purposes of the final determination, this program provides a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA in the form of a direct transfer of funds from the government, and it confers a benefit to the recipient equal to the amount of the grant.

Specificity

The Government of China did not provide information for the programs recorded by the responding companies. The responding companies also did not provide sufficient de jure and/or de facto evidence to demonstrate that the recorded programs are not specific. For the purposes of the final determination, based on the facts available on the administrative record, the CBSA has determined this program to be specific pursuant to paragraph 2(7.2)(a) or subsection 2(7.3) of SIMA.

Program 8: Grants for Relocating Production Facilities

General information

Under this program, the Government of China provides the grants to certain enterprises to support and encourage the relocation of production facilities.

The following programs recorded by the responding company have been consolidated into this program:

• Deferred Revenue: Landfill Fees
• Deferred Revenue: Relocation Project Technical Renovation Subsidies
• Deferred Revenue: Supporting Facilities Compensation Fees

Financial contribution and benefit

For the purposes of the final determination, this program provides a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA in the form of a direct transfer of funds from the government, and it confers a benefit to the recipient equal to the amount of the grant.

Specificity

The Government of China did not provide information for the programs recorded by the responding company. The responding company also did not provide sufficient de jure and/or de facto evidence to demonstrate that the recorded programs are not specific. For the purposes of the final determination, based on the facts available on the administrative record, the CBSA has determined this program to be specific pursuant to subsection 2(7.3) of SIMA.

Program 9: Grant for Retirement of Capacity

General information

Subsidies provided under this program are grants and incentives that are used to accelerate the elimination of backwards capacity and to support industries with excess production capacity.

For the purposes of the final determination, this program was removed from the investigation as the CBSA has not found this program could have conferred benefits to subject goods during the POI.

Program 10: Patent Assistance/Award

General information

Subsidies under this program to certain enterprises are grants and incentives related to promoting patent-based technology or patent-based projects or the development of intellectual property.

The following programs recorded by the responding companies have been consolidated into this program:

• 2024 Jiangyin City Patent Navigation Project (2024)
• 2025-Yangtze River Economic Belt High-Value Patent Transformation and Application Competition
• Expansion subsidy policy
• Reward for re examination of intellectual property demonstration enterprises
• Reward funds for intellectual property projects in Changshu City in 2024
• Science and Technology Innovation Incentive
• Subsidies Related to Company/Enterprise Development and Innovation

Financial contribution and benefit

For the purposes of the final determination, this program provides a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA in the form of a direct transfer of funds from the government, and it confers a benefit to the recipient equal to the amount of the grant.

Specificity

The Government of China did not provide information for the programs recorded by the responding companies. The responding companies also did not provide sufficient de jure and/or de facto evidence to demonstrate that the recorded programs are not specific. For the purposes of the final determination, based on the facts available on the administrative record, the CBSA has determined this program to be specific pursuant to paragraph 2(7.2)(a) or subsection 2(7.3) of SIMA.

Program 11: Special Economic Zones (SEZs) and Other Designated Areas Incentives

General information

Subsidies under this program are incentives and favorable policies for certain enterprises to encourage their investments and business development in SEZs and Other Designated Areas.

The following programs recorded by the responding company have been consolidated into this program:

• 2022-Jiangyin High-tech Zone Industry Strengthening Special Funds
• 2022-Jiangyin High-tech Zone Industry Enhancement Special Fund
• 2022 Annual Industry Intensification Special Funds (2023)
• 2022 High-tech Zone Talent Project (Skilled Talent) Subsidy Fund (2023)
• 2023-Science and Technology Innovation Special Funds
• 2023 Annual Digital Transformation and Upgrading Special Fund (2024)
• 2024 Data Element Competition Jiangsu Provincial Sub-competition (2024)
• 2024-Invoice Incentive
• 2024-Jiangyin City High-Tech Enterprise Award and Subsidy for 2023
• 2023 Jiangyin High-tech Zone 'Panlong Talent Plan' Salary Subsidies (2025)

Financial contribution and benefit

For the purposes of the final determination, this program provides a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA in the form of a direct transfer of funds from the government, and it confers a benefit to the recipient equal to the amount of the grant.

Specificity

The Government of China did not provide information for the programs recorded by the responding company. The responding company also did not provide sufficient de jure and/or de facto evidence to demonstrate that the recorded programs are not specific. For the purposes of the final determination, based on the facts available on the administrative record, the CBSA has determined this program to be specific pursuant to subsection 2(7.3) of SIMA.

Program 12: Grants Related to Employment, Training and Recruitment

General information

Subsidies under this program are grants and incentives designed to promote employment by supporting certain enterprises with the recruitment and training of their employees.

The following programs recorded by the responding companies have been consolidated into this program:

• 2023 Expansion Subsidy (2023)
• 2024-Skills Training Subsidy
• 2024-Tai Lake Talent Advanced Manufacturing Skills Leadership Award
• Absorbing first-time employment subsidies * Meili Town Finance and Asset Management Bureau
• Construction cost of postdoctoral workstation
• Enterprise Employment Incentives for Absorbing Poverty Alleviation Population
• Expansion subsidy
• Expansion subsidy policy
• Funding for Public Training Base for High skilled Talents * Changshu Municipal Human Resources and Social Security Bureau
• Golden Seed Talent Training Fund, Q1 2025
• High skilled talent cultivation award * Changshu Municipal Human Resources and Social Security Bureau
• One-time expansion subsidy
• One-time Employment Expansion Subsidy for University Graduates
• Pre-job training subsidy
• Pre-job training subsidy * Changshu Human Resources Training and Guidance Center
• Pre-job training subsidy for enterprise employees * Changshu Human Resources Training and Guidance Center
• Pre-job training subsidy
• Reward and Subsidy Measures for Vocational Skill Level Recognition and Evaluation Institutions
• Reward for cultivating high skilled talents
• Skill Master Studio Funding * Changshu Human Resources and Social Security Bureau
• Spring Festival stay allowance * Meili Town Finance and Asset Management Bureau
• Subsidies for improving the skills of assembly fitters and new apprentices in electrical engineering
• Subsidies for Key Construction Projects of High skilled Talents in Suzhou in 2024 * Changshu Human Resources and Social Security Bureau
• Subsidies for pre job training for enterprise employees
• Subsidies for skill improvement of high-altitude operation machinery operators (senior workers)
• Talent Awards
• Talent Development Fund
• Talent Introduction Subsidy * Changshu Municipal Human Resources and Social Security Bureau

Financial contribution and benefit

For the purposes of the final determination, this program provides a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA in the form of a direct transfer of funds from the government, and it confers a benefit to the recipient equal to the amount of the grant.

Specificity

The Government of China did not provide information for the programs recorded by the responding companies. The responding companies also did not provide sufficient de jure and/or de facto evidence to demonstrate that the recorded programs are not specific. For the purposes of the final determination, based on the facts available on the administrative record, the CBSA has determined this program to be specific pursuant to paragraph 2(7.2)(a) or subsection 2(7.3) of SIMA.

Program 13: Grants Related to Science and Technology

General information

Subsidies under this program to certain enterprises are grants and incentives designed to specifically promote the development of science and technology.

The following programs recorded by the responding companies have been consolidated into this program:

• 2023: Special Fund for Supporting Municipal and County-level Technological Innovation and Popularization of Science
• 2024: Changshu City Enterprise (Institution) Technology Contract Transaction Amount Incentive Fund
• 2024: Key Technologies for Green and Efficient Continuous Casting and Homogenization of Bearing Steel
• 2024: Qingdao Science and Technology Award
• 2024: Special Fund for Supporting Municipal and County-level Technological Innovation and Popularization of Science
• 2024: Science and Technology Award
• 2025: Qingdao Science and Technology Plan – Industrial Cultivation and Leading Special Project for Key Technology Research (New Energy, New Materials, Equipment Manufacturing, Next-Generation Information Technology)
• Enterprise Technology Center Support Fund
• Qingdao Science and Technology Award
• Subsidy for the Construction Project of Innovation Research Platform for Science and Technology Workers
• Suzhou 2022 21st batch science and technology development plan funds

Financial contribution and benefit

For the purposes of the final determination, this program provides a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA in the form of a direct transfer of funds from the government, and it confers a benefit to the recipient equal to the amount of the grant.

Specificity

The Government of China did not provide information for the programs recorded by the responding companies. The responding companies also did not provide sufficient de jure and/or de facto evidence to demonstrate that the recorded programs are not specific. For the purposes of the final determination, based on the facts available on the administrative record, the CBSA has determined this program to be specific pursuant to paragraph 2(7.2)(a) or subsection 2(7.3) of SIMA.

Program 14: Grants Related to Social Security

General information

Subsidies under this program to certain enterprises are grants and incentives related to social security (such as employment stabilization).

The following programs recorded by the responding companies have been consolidated into this program:

• 2023: Stable Employment Subsidy * Shanghai Operator Human Resources Co., Ltd
• 2025: Social Security Subsidy
• Employment Stabilization Refund
• Employment Stabilization Refund Subsidy
• Employment Stabilization Subsidy
• Industrial compliance and stability rewards
• Job expansion subsidy
• Job retention refund (Unemployment insurance benefit refund)
• Job Stability Subsidy
• Loss of Insurance Fund of the Human Resources Management Center
• One-time Job Expansion Subsidy
• Stable employment return
• Stable employment subsidy * paid on behalf of the loss insurance fund of the human resources management center
• Stable employment subsidies / Employment stabilization subsidies

Financial contribution and benefit

For the purposes of the final determination, this program provides a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA in the form of a direct transfer of funds from the government, and it confers a benefit to the recipient equal to the amount of the grant.

Specificity

The Government of China did not provide information for the programs recorded by the responding companies. The responding companies also did not provide sufficient de jure and/or de facto evidence to demonstrate that the recorded programs are not specific. For the purposes of the final determination, based on the facts available on the administrative record, the CBSA has determined this program to be specific pursuant to paragraph 2(7.2)(a) or subsection 2(7.3) of SIMA.

Program 15: Grants to Provide Business Support

General information

Subsidies under this program to certain enterprises are grants and incentives designed to provide business support.

The following programs recorded by the responding companies have been consolidated into this program:

• 2022: Business Development Special Fund
• Special Fund for High Quality Business Development of Changshu City in 2023

Financial contribution and benefit

For the purposes of the final determination, this program provides a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA in the form of a direct transfer of funds from the government, and it confers a benefit to the recipient equal to the amount of the grant.

Specificity

The Government of China did not provide information for the programs recorded by the responding companies. The responding companies also did not provide sufficient de jure and/or de facto evidence to demonstrate that the recorded programs are not specific. For the purposes of the final determination, based on the facts available on the administrative record, the CBSA has determined this program to be specific pursuant to paragraph 2(7.2)(a) or subsection 2(7.3) of SIMA.

Program 16: Grants related to Financial/Loan Interest

General information

Subsidies under this program are grants and incentives designed to support certain enterprises with financial/loan interest relief.

The following programs recorded by the responding company have been consolidated into this program:

• Jiangsu Provincial Department of Commerce subsidies * relief interest subsidies
• Loan interest subsidy for the first half of 2025 * Changshu Municipal Bureau of Commerce
• Relief interest subsidy * Jiangsu Provincial Department of Commerce
• Suzhou Municipal Bureau of Commerce provides relief and interest subsidies

Financial contribution and benefit

For the purposes of the final determination, this program provides a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA in the form of a direct transfer of funds from the government, and it confers a benefit to the recipient equal to the amount of the grant.

Specificity

The Government of China did not provide information for the programs recorded by the responding company. The responding company also did not provide sufficient de jure and/or de facto evidence to demonstrate that the recorded programs are not specific. For the purposes of the final determination, based on the facts available on the administrative record, the CBSA has determined this program to be specific pursuant to subsection 2(7.3) of SIMA.

Program 17: Grants for International Certification

General information

The grants under this program are provided to help certain enterprises to obtain international product certification.

This program was removed from the investigation as this program has been included in Program 1: Grants related to Foreign Trade Development Fund.

Program 18: Grants related to Small and Medium-Sized Enterprises

General information

Subsidies under this program are grants and incentives designed to provide supports to small and medium sized enterprises, and to encourage small and medium sized enterprises to perform technical and product innovations and to increase employment.

For the purposes of the final determination, this program was removed from the investigation as the CBSA has not found this program could have conferred benefits to subject goods during the POI.

Program 19: Insurance Grants

General information

Subsidies under this program are grants designed to reimburse export insurance (such as export credit insurance and export shipment insurance) costs incurred by certain enterprises.

The following programs recorded by the responding companies have been consolidated into this program:

• Export Credit Insurance Support Fund
• Special Export Marine Insurance Premium, First Half of 2024

Financial contribution and benefit

For the purposes of the final determination, this program provides a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA in the form of a direct transfer of funds from the government, and it confers a benefit to the recipient equal to the amount of the grant.

Specificity

The Government of China did not provide information for the programs recorded by the responding companies. The responding companies also did not provide sufficient de jure and/or de facto evidence to demonstrate that the recorded programs are not specific. Based on the facts available on the administrative record, this program constitutes a prohibited subsidy (i.e., export subsidy) as defined in subsection 2(1) of SIMA. For the purposes of the final determination, the CBSA has determined this program to be specific pursuant to paragraph 2(7.2)(b) of SIMA.

New Program 1: Subsidies Related to Rural Demonstration Site

General information

Subsidies under this program to certain enterprises are grants related to the construction of rural demonstration site.

The following program recorded by the responding company has been consolidated into this program:

• Farmland Subsidy (2022 Changshu Meili Town (Shengfa Village) Tianmei Rural Demonstration Site Construction Project)

Financial contribution and benefit

For the purposes of the final determination, this program provides a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA in the form of a direct transfer of funds from the government, and it confers a benefit to the recipient equal to the amount of the grant.

Specificity

The Government of China did not provide information for the program recorded by the responding company. The responding company also did not provide sufficient de jure and/or de facto evidence to demonstrate that the recorded program is not specific. For the purposes of the final determination, based on the facts available on the administrative record, the CBSA has determined this program to be specific pursuant to paragraph 2(7.2)(a) or subsection 2(7.3) of SIMA.

New Program 2: Grants Related to Parties and Other Organizations

General information

Subsidies under this program to certain enterprises are grants related to return of party fees.

The following program recorded by the responding company has been consolidated into this program:

• Return of "Two New" Party Fees

Financial contribution and benefit

For the purposes of the final determination, this program provides a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA in the form of a direct transfer of funds from the government, and it confers a benefit to the recipient equal to the amount of the grant.

Specificity

The Government of China did not provide information for the program recorded by the responding company. The responding company also did not provide sufficient de jure and/or de facto evidence to demonstrate that the recorded program is not specific. For the purposes of the final determination, based on the facts available on the administrative record, the CBSA has determined this program to be specific pursuant to paragraph 2(7.2)(a) or subsection 2(7.3) of SIMA.

New Program 3: Energy Subsidies

General information

Subsidies under this program are grants designed to reimburse energy costs incurred by certain enterprises.

The following program recorded by the responding company has been consolidated into this program:

• Heating Subsidy

Financial contribution and benefit

For the purposes of the final determination, this program provides a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA in the form of a direct transfer of funds from the government, and it confers a benefit to the recipient equal to the amount of the grant.

Specificity

The Government of China did not provide information for the program recorded by the responding company. The responding company also did not provide sufficient de jure and/or de facto evidence to demonstrate that the recorded program is not specific. For the purposes of the final determination, based on the facts available on the administrative record, the CBSA has determined this program to be specific pursuant to subsection 2(7.3) of SIMA.

New Program 4: Tax Handling Fee Refund

General information

Subsidies under this program are refunds related to the handling of taxes.

For the final determination, due to the lack of the facts available on the administrative record, the CBSA was unable to determine the fair market value for the services as provided to the Government of China under this program. Further, the CBSA has determined this program to be not specific. As such, this program identified at the preliminary determination was removed from the investigation for the purposes of the final determination.

New Program 5: Market Statistics Monitoring Subsidy

General information

Subsidies under this program to certain enterprises are incentives to encourage the reporting of market statistics information.

The following program recorded by the responding company has been consolidated into this program:

• Market Statistics Monitoring Subsidy (2024)

Financial contribution and benefit

For the purposes of the final determination, this program provides a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA in the form of a direct transfer of funds from the government, and it confers a benefit to the recipient equal to the amount of the grant.

Specificity

The Government of China did not provide information for the program recorded by the responding company. The responding company also did not provide sufficient de jure and/or de facto evidence to demonstrate that the recorded program is not specific. For the purposes of the final determination, based on the facts available on the administrative record, the CBSA has determined this program to be specific pursuant to subsection 2(7.3) of SIMA.

New Program 6: Invoice Incentives

General information

Based on the facts available on the administrative record, this program identified at the preliminary determination was removed from the investigation as this program has been included in Program 11: Special Economic Zones (SEZs) and Other Designated Areas Incentives.

New Program 7: Equipment Investment Funds

General information

Subsidies under this program are incentives designed to award certain enterprises for the equipment investments.

The following programs recorded by the responding company have been consolidated into this program:

• Enterprise stock development equipment investment award
• Equipment investment funds * Changshu Meili Technology Entrepreneurship Enterprise Management Service Co., Ltd
• High-quality development transformation and upgrade equipment investment award

Financial contribution and benefit

For the purposes of the final determination, this program provides a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA in the form of a direct transfer of funds from the government, and it confers a benefit to the recipient equal to the amount of the grant.

Specificity

The Government of China did not provide information for the programs recorded by the responding company. The responding company also did not provide sufficient de jure and/or de facto evidence to demonstrate that the recorded programs are not specific. For the purposes of the final determination, based on the facts available on the administrative record, the CBSA has determined this program to be specific pursuant to subsection 2(7.3) of SIMA.

New Program 8: Rental Subsidies

General information

Subsidies under this program are grants designed to provide supports to certain enterprises for their incurred rental costs.

The following program recorded by the responding company has been consolidated into this program:

• Rental subsidy

Financial contribution and benefit

For the purposes of the final determination, this program provides a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA in the form of a direct transfer of funds from the government, and it confers a benefit to the recipient equal to the amount of the grant.

Specificity

The Government of China did not provide information for the program recorded by the responding company. The responding company also did not provide sufficient de jure and/or de facto evidence to demonstrate that the recorded program is not specific. For the purposes of the final determination, based on the facts available on the administrative record, the CBSA has determined this program to be specific pursuant to paragraph 2(7.2)(a) or subsection 2(7.3) of SIMA.

New Program 9: Special Project Bond

General information

Subsidies under this program are grants and incentives designed to provide supports to certain enterprises for their special projects through bonds.

The following program recorded by the responding company has been consolidated into this program:

• 2024 Long-Term Special Treasury Bonds - Blower Motor Conversion to Electricity and Expansion of Total Substation Upgrade Project (2024)

Financial contribution and benefit

For the purposes of the final determination, this program provides a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA in the form of a direct transfer of funds from the government, and it confers a benefit to the recipient equal to the amount of the grant.

Specificity

The Government of China did not provide information for the program recorded by the responding company. The responding company also did not provide sufficient de jure and/or de facto evidence to demonstrate that the recorded program is not specific. For the purposes of the final determination, based on the facts available on the administrative record, the CBSA has determined this program to be specific pursuant to subsection 2(7.3) of SIMA.

New Program 10: National Debt Funds to Support Equipment Renovation and Updating Projects

General information

Subsidies under this program are grants and incentives specifically designed to provide supports to certain enterprises for their equipment renovation and updating projects through national debt funds.

The following program recorded by the responding company has been consolidated into this program:

• Energy-saving Renovation Project of Existing Continuous Caster Equipment

Financial contribution and benefit

For the purposes of the final determination, this program provides a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA in the form of a direct transfer of funds from the government, and it confers a benefit to the recipient equal to the amount of the grant.

Specificity

The Government of China did not provide information for the program recorded by the responding company. The responding company also did not provide sufficient de jure and/or de facto evidence to demonstrate that the recorded program is not specific. For the purposes of the final determination, based on the facts available on the administrative record, the CBSA has determined this program to be specific pursuant to paragraph 2(7.2)(a) or subsection 2(7.3) of SIMA.

New Program 11: Technological Transformation Investment Subsidy

General information

Subsidies under this program are grants and incentives designed to specifically encourage enterprises to provide or make technological transformation investments.

The following program recorded by the responding company has been consolidated into this program:

• 2024 Technological Transformation Investment Subsidy

Financial contribution and benefit

For the purposes of the final determination, this program provides a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA in the form of a direct transfer of funds from the government, and it confers a benefit to the recipient equal to the amount of the grant.

Specificity

The Government of China did not provide information for the program recorded by the responding company. The responding company also did not provide sufficient de jure and/or de facto evidence to demonstrate that the recorded program is not specific. For the purposes of the final determination, based on the facts available on the administrative record, the CBSA has determined this program to be specific pursuant to paragraph 2(7.2)(a) or subsection 2(7.3) of SIMA.

New Program 12: Funds for Special Projects

General information

Subsidies under this program to certain enterprises are grants and incentives designed to specifically encourage the development, construction or implementation of certain special projects.

The following programs recorded by the responding company have been consolidated into this program:

• Bonded Warehouse Base Project
• Railway project
• Steel pipe product upgrade and renovation project
• Zhongbang Project

Financial contribution and benefit

For the purposes of the final determination, this program provides a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA in the form of a direct transfer of funds from the government, and it confers a benefit to the recipient equal to the amount of the grant.

Specificity

The Government of China did not provide information for the programs recorded by the responding company. The responding company also did not provide sufficient de jure and/or de facto evidence to demonstrate that the recorded programs are not specific. For the purposes of the final determination, based on the facts available on the administrative record, the CBSA has determined this program to be specific pursuant to subsection 2(7.3) of SIMA.

New Program 13: Provincial special fund for building a manufacturing powerhouse (formerly Provincial industrial and information industry transformation and upgrading special fund)

General information

Through special funds as established by the provincial government, grants and incentives are provided to certain enterprises to promote high-end and intelligent and green development of the manufacturing industry and to accelerate the building of the province into a manufacturing powerhouse.

In Jiangsu province, this program was/is administered by Department of Industry and information Technology of Jiangsu Province and Department of Finance of Jiangsu Province. The relevant policy document is Measures for administration of Jiangsu province special fund for building a manufacturing powerhouse [2024] No.3.

The following programs recorded by the responding companies have been consolidated into this program:

• 2023: Jiangyin City Industrial and Information Technology Transformation and Upgrading Special Funds
• 2024: Resource Comprehensive Utilization Gas Power Generation Project
• 2024: Resource Comprehensive Utilization of Gas Power Generation Project
• The second batch of special funds for the construction of a strong manufacturing province in Jiangsu Province in 2024

Financial contribution and benefit

For the purposes of the final determination, this program provides a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA in the form of a direct transfer of funds from the government, and it confers a benefit to the recipient equal to the amount of the grant.

Specificity

The Government of China did not provide sufficient information for this program.^{Footnote 273} The responding companies also did not provide sufficient de jure and/or de facto evidence to demonstrate that the recorded programs are not specific. For the purposes of the final determination, based on the facts available on the administrative record, the CBSA has determined this program to be specific pursuant to paragraph 2(7.2)(a) or subsection 2(7.3) of SIMA.

Category 2: Tax Programs

Program 20: Corporate Income Tax Exemption and/or Reduction in Special Economic Zones (SEZs) and Other Designated Areas

General information

This program relates to government offering preferential corporate income tax rates for companies situated in designated preferential areas.

For the purposes of the final determination, this program was removed from the investigation as the CBSA has not found this program could have conferred benefits to subject goods during the POI.

Program 21: Corporate Income Tax Reduction for New and High Technology Enterprises (“NHTE”)

General information

This program is designed to encourage enterprises to strengthen scientific and technological innovation and increase investment in R&D and innovation activities, by providing preferential income tax treatment to enterprises recognized as high-tech enterprises.

This program is provided under the Enterprise Income Tax Law of the People’s Republic of China, the Implementation Regulations for the Enterprise Income Tax Law, and the Administrative Measures on Accreditation of High-tech Enterprises (2016 Revision) (Guo Ke Fa Huo [2016] No. 32). The relevant Articles in the Enterprise Income Tax Law and the Implementation Regulations for the Enterprise Income Tax Law are Article 28 and Article 93. The standard of being recognized as a high-tech enterprise is based on Article 11 of the Administrative Measures on Accreditation of High‐tech Enterprises (2016 Revision).

Under this program, companies recognized as high-tech enterprises are entitled to a reduced income tax rate of 15 percent rather than the normal national corporate income tax rate of 25 percent. This program is administered nationwide by the State Administration of Taxation of the People’s Republic of China and is implemented by local tax authorities within their respective jurisdictions.

Financial contribution and benefit

For the purposes of the final determination, this program provides a financial contribution pursuant to paragraph 2(1.6)(b) of SIMA. That is, amounts that would otherwise be owing and due to the government are deducted and/or exempted, and confer a benefit to the recipient equal to the amount of the deduction/exemption.

Specificity

The Government of China submitted that this program satisfies the non-specificity conditions under Article 2.1(b) of the WTO SCM Agreement and subsection 2(7.1) of SIMA, and thus is not specific.

Article 28 of the Enterprise Income Tax Law stipulates that the enterprise income tax on important high- and new tech enterprises that are necessary to be supported by the state shall be levied at the reduced tax rate of 15%.

Article 93 of the Implementation Regulations for the Enterprise Income Tax Law stipulates that the expression “high and new-technology enterprises under the key support of the state” as used in Article 28 (2) of the Enterprise Income Tax are enterprises that have their own independent, kernel intellectual property rights and at the same time meet the following conditions:

1. The product (service) falls within the scope of the High and New Technology Areas Entitled to the Key Support of the State
2. The proportion of research and development expenses in the sales revenues is not lower than the prescribed proportion
3. The proportion of the income from high and new technology products (services) in the total income of the enterprise is not lower than the prescribed proportion
4. The proportion of technicians in the total number of staff members of the enterprise is not lower than the prescribed proportion
5. Other conditions as stipulated in the measures for the determination of high and new technology enterprises

The High and New Technology Areas Entitled to the Key Support of the State and the measures for the determination of high and new technology enterprises shall be formulated by the competent departments of the State Council in charge of industry and information technology and science and technology, treasury, and taxation in collaboration with other relevant departments, and shall become effective after being ratified by the State Council.

Article 11 of the Administrative Measures on Accreditation of High‐tech Enterprises stipulates that an enterprise shall satisfy all the following criteria to be accredited as a high‑tech enterprise:

1. it has been established for more than one year at the time of application for accreditation
2. it has obtained intellectual property ownership for the core technology of its key products (services) through independent research and development, assignment, acceptance of gift, merger and acquisition etc
3. the core technology of its key products (services) falls under the scope stipulated in the Regions of Advanced Technologies Strongly Supported by the State
4. its technical personnel engaging in research and development and the relevant technological innovation activities constitute more than 10% of the total number of employees of the enterprise in the current year
5. the percentage of the total amount of expenditure for research and development in the past three accounting years (where the actual operating period is less than three years, compute in accordance with the actual operating period, same hereinafter) in the total amount of revenue from sale shall satisfy the following requirements:
   1. the percentage shall not be less than 5% for enterprises whose revenue from sale in the past year is less than RMB50 million (inclusive)
   2. the percentage shall not be less than 4% for enterprises whose revenue from sale in the past year ranges from RMB50 million to RMB200 million (inclusive) and

   3. the percentage shall not be less than 3% for enterprises whose revenue from sale in the past year is more than RMB200 million

      The percentage of the total amount of research and development expenses incurred in China by the enterprise constitutes not less than 60% of its total amount of research and development expenses

6. the revenue from high‑tech products (services) constitutes more than 60% of the total revenue of the enterprise in the current period
7. the enterprise's innovation capacity evaluation satisfies the corresponding requirements and
8. the enterprise has no record of major safety or quality incident or serious environmental violation during the year preceding the application

Before the on-site verification, the CBSA provided the verification questionnaire^{Footnote 274} to the Government of China. Through this document, the CBSA requested the Government of China to provide a detailed clarification and corresponding supporting documents if the Government of China issued or published any documents to further explain/clarify/interpret the restrictive terms as stipulated in Article 93 of the Implementation Regulations for the Enterprise Income Tax Law and/or Article 11 of the Administrative Measures on Accreditation of High‐tech Enterprises (2016 Revision) (such as “independent”, “kernel intellectual property rights”, “the scope”, “the prescribed proportion”, “high and new technology products (services)”, “other conditions”, “the core technology”, “key products (services)”, “the scope stipulated in the Regions”, “the relevant technological innovation activities”, “high-tech products (services)”, “innovation capacity evaluation”, “the corresponding requirements”, “major” and “serious”), or any documents to explain/clarify the application of those terms. The CBSA also requested the Government of China to provide a copy of the High and New Technology Areas Entitled to the Key Support of the State (as stipulated in Article 93 of the Implementation Regulations for the Enterprise Income Tax Law), a copy of Advanced Technologies Strongly Supported by the State (as stipulated in Article 11 of the Administrative Measures on Accreditation of High‐tech Enterprises (2016 Revision)), and any other documents referenced therein. Those terms and requested documents are considered to serve as the criteria or conditions governing eligibility for the subsidy from this program.

During the on-site verification, the Government of China responded that they did not have documents to further explain/clarify/interpret those terms, or to explain/clarify the application of those terms.^{Footnote 275} In addition, the Government of China did not submit the requested documents (the High and New Technology Areas Entitled to the Key Support of the State and Advanced Technologies Strongly Supported by the State).^{Footnote 276} When inquired, the Government of China also responded that they did not have submissions for any other de jure evidence and/or de facto evidence to demonstrate that this program was/is generally available/not specific.^{Footnote 277}

As such, sufficient information has not been provided or furnished by the Government of China to enable the CBSA to determine that this program satisfies the non-specificity conditions under Article 2.1(b) of the WTO SCM Agreement and subsection 2(7.1) of SIMA, and thus is not specific.

During the investigation, the CBSA requested the Government of China to provide information to analyze if the subsidy from this program is specific pursuant to subsection 2(7.3) of SIMA. The requested information has not been provided by the Government of China to the CBSA. Further, the responding companies also did not provide sufficient de jure and/or de facto evidence to demonstrate that this program is not specific.

For the purposes of the final determination, the CBSA has determined this program to be specific pursuant to paragraph 2(7.2)(a) or subsection 2(7.3) of SIMA, based on the facts available on the administrative record:

• The criteria or conditions governing eligibility for the subsidy from this program are not objective and the subsidy from this program is limited to a particular enterprise within the jurisdiction of the authority that is granting the subsidy
• Due to the number of responding companies who were found to have received benefits under this program, this program is considered to be not generally available

Program 22: Research and Development (“R&D”) Super Deduction

General information

This program is designed to encourage enterprises to increase their investment in R&D activities and strengthen innovation by allowing qualifying R&D expenses incurred for developing new technologies, new products and new processes to be additionally deducted when computing taxable income.

This program is provided under Article 30 of the Enterprise Income Tax Law, Article 95 of the Implementation Regulations for the Enterprise Income Tax Law and the Announcement of the Ministry of Finance and the State Taxation Administration on Further Improving the Policies Regarding Weighted Pre-tax Deduction of Research and Development Expenses (2023) (Announcement No. 7 [2023] of the Ministry of Finance and the State Taxation Administration).

Under this program, qualifying R&D expenses incurred for the development of new technologies, new products and new processes are entitled to an additional deduction when computing taxable income. The program is administered by the State Administration of Taxation of the People’s Republic of China, and is implemented by the local level state tax authorities within their respective jurisdictions. Qualifying enterprises were/are allowed to get different additional deduction percentages for the expenses incurred for the qualifying research and development activities by meeting different criteria.

Financial contribution and benefit

For the purposes of the final determination, this program provides a financial contribution pursuant to paragraph 2(1.6)(b) of SIMA. That is, amounts that would otherwise be owing and due to the government are deducted and/or exempted, and confer a benefit to the recipient equal to the amount of the deduction/exemption.

Specificity

The Government of China submitted that this program satisfies the non-specificity conditions under Article 2.1(b) of the WTO SCM Agreement and subsection 2(7.1) of SIMA, and thus is not specific.

Article 30 of the Enterprise Income Tax Law stipulates that the following expenses of an enterprise may be additionally calculated and deducted:

1. The expenses for the research and development of new technologies, new products and new techniques and
2. The wages paid to the disabled employees or other employees whom the state encourages to hire

Article 95 of the Implementation Regulations for the Enterprise Income Tax Law stipulates that the term “additional deduction of research and development expenses” as used in Article 30 (1) of the EIT Law refers to an additional 50% deduction of the research and development expenses incurred from the research and development of new technologies, new products, and new techniques on the basis of the actual deductions where the enterprise when no intangible asset has been formed and calculated into the current gains and losses. If intangible assets have been formed, they shall be amortized at 150% of the cost of the intangible assets.

Section II of the Announcement of the Ministry of Finance and the State Taxation Administration on Further Improving the Policies Regarding Weighted Pre-tax Deduction of Research and Development Expenses (2023) stipulates that other policy standards and management requirements for enterprises to enjoy the policies regarding weighted pre-tax deduction of R&D expenses shall be governed by the relevant provisions of the Notice by the Ministry of Finance, the State Taxation Administration and the Ministry of Science and Technology of Improving the Policies Regarding the Weighted Pre-tax Deduction of Research and Development Expenses (No. 119 [2015], MOF), the Notice by the Ministry of Finance, the State Taxation Administration and the Ministry of Science and Technology of Issues Concerning the Relevant Policies Regarding the Weighted Pre-tax Deduction of the Entrusted Overseas Research and Development Expenses of Enterprises (No. 64 [2018], MOF) and other documents.

Before the on-site verification, the CBSA provided the verification questionnaire^{Footnote 278} to the Government of China. Through this document, the CBSA requested the Government of China to provide a detailed clarification and corresponding supporting documents if the Government of China issued or published any documents to further explain/clarify/interpret the restrictive term as stipulated in Article 30 of the Enterprise Income Tax Law and Article 95 of the Implementation Regulations for the Enterprise Income Tax Law (i.e., “new technologies, new products and new techniques”), or any documents to explain/clarify the application of the term. The CBSA requested a copy of the Notice by the Ministry of Finance, the State Taxation Administration and the Ministry of Science and Technology of Improving the Policies Regarding the Weighted Pre-tax Deduction of Research and Development Expenses (No. 119 [2015], MOF) (and any other documents referenced therein). In addition, the CBSA requested the Government of China to provide a complete list for the “other documents” as stipulated in Section II of the Announcement of the Ministry of Finance and the State Taxation Administration on Further Improving the Policies Regarding Weighted Pre-tax Deduction of Research and Development Expenses (2023) and a copy for each of such documents. The term (i.e., “new technologies, new products and new techniques”) and requested documents are considered to serve as the criteria or conditions governing eligibility for the subsidy from this program.

During the on-site verification, the Government of China responded that they did not have existing documents to further explain/clarify/interpret the term (i.e., “new technologies, new products and new techniques”), or to explain/clarify the application of the term.^{Footnote 279} The Government of China provided a memorandum^{Footnote 280} for the phase “New Technologies, New Products and New Processes” under Article 30(1) of the Enterprise Income Tax Law, without additional supporting documents. In the memorandum, the Government of China provided the following submissions:

• The Notice by the Ministry of Finance, the State Taxation Administration and the Ministry of Science and Technology of Improving the Policies Regarding the Weighted Pre-tax Deduction of Research and Development Expenses (No. 119 [2015], MOF) is relevant to the practical application of the R&D super deduction policy
• The “R&D activities” in the Notice No. 119 [2015] means the on-going systematic activities with definite objectives conducted by enterprises for the purpose of acquiring new knowledge on science and technology, creatively applying new scientific and technological knowledge, or materially improving technologies, products (services) and techniques. This formulation focuses on the nature of the enterprise’s activities, including whether they are systematic, continuous, objective-oriented, and directed toward acquiring or creatively applying scientific and technological knowledge or materially improving technologies, products, services or processes
• The Notice No. 119 [2015] clarified that certain activities are not subject to the weighted pre-tax deduction polices, including: the conventional upgrading of enterprises’ products or services; the direct application of certain scientific research achievements, such as direct application of publicly available new processes, materials, devices, products, services or knowledge; technical support activities provided by enterprises to their clients after commercialization; repetitive or simple changes of existing products, services, technologies, materials or technological processes; market surveys and research, efficiency investigation or management research; quality control, test analysis, repair or maintenance as an industry or service process or conventional step; and research in terms of social sciences, arts or humanities

During the on-site verification, after receiving a copy of the Notice by the Ministry of Finance, the State Taxation Administration and the Ministry of Science and Technology of Improving the Policies Regarding the Weighted Pre-tax Deduction of Research and Development Expenses (Cai Shui [2015] No.119), the CBSA further inquired if the Government of China issued or published any documents to further explain/clarify/interpret the following paragraph: “For the purpose of this Notice, “R&D activities” means the on-going systematic activities with definite objectives conducted by enterprises for the purpose of acquiring new knowledge on science and technology, creatively applying new scientific and technological knowledge, or materially improving technologies, products (services) and processes.” or any documents to explain/clarify the application of this paragraph. The Government of China responded that there were/are no existing documents to further explain/clarify/interpret this paragraph, or to explain/clarify the application of this paragraph.^{Footnote 281} This paragraph is considered to serve as critical criteria or conditions governing eligibility for the subsidy from this program.

During the on-site verification, the Government of China did not submit a complete list for the “other documents” as stipulated in Section II of the Announcement of the Ministry of Finance and the State Taxation Administration on Further Improving the Policies Regarding Weighted Pre-tax Deduction of Research and Development Expenses (2023) and did not submit a copy for each of such documents. The Government of China only responded that the “other documents” as stipulated in Section II of the Announcement of the Ministry of Finance and the State Taxation Administration on Further Improving the Policies Regarding Weighted Pre-tax Deduction of Research and Development Expenses (2023) were/are not relevant to this investigation.^{Footnote 282} When inquired, the Government of China also responded that they did not have submissions for any other de jure evidence and/or de facto evidence to demonstrate that this program was/is generally available/not specific.^{Footnote 283}

As such, sufficient information has not been provided or furnished by the Government of China to enable the CBSA to determine that this program satisfies the non-specificity conditions under Article 2.1(b) of the WTO SCM Agreement and subsection 2(7.1) of SIMA, and thus is not specific.

During the investigation, the CBSA requested the Government of China to provide information to analyze if the subsidy from this program is specific pursuant to subsection 2(7.3) of SIMA. The requested information has not been provided by the Government of China to the CBSA. Further, the responding companies also did not provide sufficient de jure and/or de facto evidence to demonstrate that this program is not specific.

For the purposes of the final determination, the CBSA has determined this program to be specific pursuant to paragraph 2(7.2)(a) or subsection 2(7.3) of SIMA, based on the facts available on the administrative record:

• The criteria or conditions governing eligibility for the subsidy from this program are not objective and the subsidy from this program is limited to a particular enterprise within the jurisdiction of the authority that is granting the subsidy
• Due to the number of responding companies who were found to have received benefits under this program, this program is considered to be not generally available

Program 23: Corporate Income Tax Reduction for Micro and Small Enterprises

General information

This program provides qualifying micro and small businesses with a reduced corporate income tax rate, instead of the normal national corporate income tax rate of 25 percent.

The following program recorded by the responding company has been consolidated into this program:

• Corporate Income Tax Reduction for Micro and Small Enterprises

Financial contribution and benefit

For the purposes of the final determination, this program provides a financial contribution pursuant to paragraph 2(1.6)(b) of SIMA. That is, amounts that would otherwise be owing and due to the government are deducted and/or exempted, and confer a benefit to the recipient equal to the amount of the deduction/exemption.

Specificity

The Government of China did not provide information for the program recorded by the responding company. The responding company also did not provide sufficient de jure and/or de facto evidence to demonstrate that the recorded program is not specific. For the purposes of the final determination, based on the facts available on the administrative record, the CBSA has determined this program to be specific pursuant to paragraph 2(7.2)(a) or subsection 2(7.3) of SIMA.

Program 24: Reduction in Land Use Tax or Rental Fees

General information

This program provides qualifying businesses with a reduced land use tax rate.

The following program recorded by the responding company has been consolidated into this program:

• Preferential Policy for Urban Land Use Tax for Manufacturing High and New Technology Enterprises

Financial contribution and benefit

For the purposes of the final determination, this program provides a financial contribution pursuant to paragraph 2(1.6)(b) of SIMA. That is, amounts that would otherwise be owing and due to the government are deducted and/or exempted, and confer a benefit to the recipient equal to the amount of the deduction/exemption.

Specificity

The Government of China did not provide information for the program recorded by the responding company. The responding company also did not provide sufficient de jure and/or de facto evidence to demonstrate that the recorded program is not specific. For the purposes of the final determination, based on the facts available on the administrative record, the CBSA has determined this program to be specific pursuant to paragraph 2(7.2)(a) or subsection 2(7.3) of SIMA.

Program 25: Municipal/local Income or Property Tax Reductions

General information

This program relates to reductions and exemptions provided by municipal/local income authorities in respect of resource tax, urban maintenance and construction tax, property tax, farmland occupation tax, stamp duty, education surcharge, and local education surcharge.

For the purposes of the final determination, this program was removed from the investigation as the CBSA has not found this program could have conferred benefits to subject goods during the POI.

Program 26: Tax Policies related to Foreign Invested Enterprises (FIEs)

General information

This program relates to preferential tax policies for FIEs, such as tax credit for foreign investors reinvesting dividends.

For the purposes of the final determination, this program was removed from the investigation as the CBSA has not found this program could have conferred benefits to subject goods during the POI.

Program 27: Preferential Tax Policies in the Western Regions

General information

Certain companies located in the Western Regions of China are entitled to preferential tax policies.

For the purposes of the final determination, this program was removed from the investigation as the CBSA has not found this program could have conferred benefits to subject goods during the POI.

New Program 14: Tax policies related to enterprises recruiting self-employed or retired soldiers for entrepreneurship and employment

General information

Subsidies under this program are tax polices designed to specifically encourage enterprises to recruit self-employed or retired soldiers for entrepreneurship and employment.

The following program recorded by the responding company has been consolidated into this program:

• Tax policies related to enterprises recruiting self-employed retired soldiers for entrepreneurship and employment

Financial contribution and benefit

For the purposes of the final determination, this program provides a financial contribution pursuant to paragraph 2(1.6)(b) of SIMA. That is, amounts that would otherwise be owing and due to the government are deducted and/or exempted, and confer a benefit to the recipient equal to the amount of the deduction/exemption.

Specificity

The Government of China did not provide information for the program recorded by the responding company. The responding company also did not provide sufficient de jure and/or de facto evidence to demonstrate that the recorded program is not specific. For the purposes of the final determination, based on the facts available on the administrative record, the CBSA has determined this program to be specific pursuant to paragraph 2(7.2)(a) or subsection 2(7.3) of SIMA.

Category 3: Relief from Duties and Taxes

Program 28: Offsets to Taxable Income Related to Purchases of Domestic Machinery

General information

The amount of an enterprise's investment in the purchase of special equipment for environmental protection, energy and water saving, work safety, etc. may be deducted from the tax amount at a certain rate.

For the purposes of the final determination, this program was removed from the investigation as the CBSA has not found this program could have conferred benefits to subject goods during the POI.

Program 29: Relief from Duties and Taxes on Imported Material and Other Manufacturing Inputs

General information

Under this program, certain enterprises are entitled to paying taxes and/or custom duties for imported materials and/or other manufacturing inputs at reduced rates.

For the purposes of the final determination, this program was removed from the investigation as the CBSA has not found this program could have conferred benefits to subject goods during the POI.

Category 4: Goods/Services Provided by the Government

Program 30: Acquisition of Steel Bar or Other Material Input from SOE

General information

This program relates to the acquisition of inputs materials (steel bar or other material input) from Chinese State-Owned Enterprises (SOEs) at below fair market value. SIMA permits SOEs to be treated as “government” if they are found to possess, exercise or be vested with governmental authority.

Due to the lack of information on the administrative record, the CBSA was unable to determine that SOE input suppliers to the responding exporters/producers of subject goods constituted “government” under paragraph (b) of subsection 2(1) of SIMA.

For the purposes of the final determination, this program was removed from the investigation as the CBSA has not found this program could have conferred benefits to subject goods during the POI.

Program 31: Acquisition of Utilities (electricity, etc.) from SOE

General information

This program relates to the acquisition of utilities (gas, electricity, etc.) from Chinese State-Owned Enterprises (SOEs) at below fair market value. SIMA permits SOEs to be treated as “government” if they are found to possess, exercise or be vested with governmental authority.

For the purposes of the final determination, this program was removed from the investigation as the CBSA has not found this program could have conferred benefits to subject goods during the POI.

Program 32: Provision of Land by Government

General information

All land in China belongs to the Government of China (i.e., either national or local governments, or through a “collective” at the township or village level), and government land agencies across China control the allocation of land through the granting of land-use rights. Under this program, certain enterprises are entitled to reduced prices for land purchased from the Government of China.

The Government of China submitted that this program does not exist as a discrete, administrable program and the CBSA should terminate its investigation into this program. However, facts available on the administrative record indicates that lands had been sold to certain enterprises at less than the prices as established by the Government of China.

Financial contribution and benefit

For the purposes of the final determination, this program provides a financial contribution pursuant to paragraph 2(1.6)(c) of SIMA. That is, the government provides goods or services, other than general infrastructure, at less than fair market price.

Specificity

The Government of China did not provide information for this program. The responding company also did not provide sufficient de jure and/or de facto evidence to demonstrate that this program is not specific. For the purposes of the final determination, based on the facts available on the administrative record, the CBSA has determined this program to be specific pursuant to subsection 2(7.3) of SIMA.

Program 33: Debt-to-Equity Swaps

General information

The debt-to-equity swap is one of the most significant measures used in the financial restructuring of China's state-owned enterprises (SOEs) and state-owned banks. A debt-to-equity swap is a transaction in which a creditor forgives some or all of a company's debt in exchange for equity in the company.

For the purposes of the final determination, this program was removed from the investigation as the CBSA has not found this program could have conferred benefits to subject goods during the POI.

Category 5: Loans and Loan Guarantees

Program 34: Loans from State-Owned Banks

General information

This program relates to government loans at a preferential rate of interest. SIMA permits Sate-Owned banks to be treated as “government” if they are found to possess, exercise or be vested with governmental authority.

Specifically, an entity will constitute “government” under paragraph (b) of subsection 2(1) of SIMA when it possesses, exercises, or is vested with governmental authority. The following are factors that could indicate that this is the case in a particular entity:

• Express delegation or vesting of authority to an entity by statute or other legal instrument
• Evidence that an entity is, in fact, exercising governmental functions
• Evidence that a government exercises meaningful control over an entity

In their responses,^{Footnote 284} the Government of China made the following submissions:

• Commercial banks in China, whether state-owned or not, are not “authorities” within the meaning of “public bodies” within the meaning of Article 1.1(a)(1) the SCM Agreement
• With respect to the daily operations of banks and the appointment of senior management, Chinese commercial banks are independent and not subject to interference from any organization or individual
• In terms of operations, Chinese commercial banks are also independent and free from interference by any organization or individual
• Regarding the issuance of loans, decisions made by Chinese commercial banks are entirely based on market factors and are not subject to interference by any organization or individual
• As for credit assessment, Chinese commercial banks are also completely based on commercial evaluation logic and are not subject to interference by any organization or individual
• With regard to interest rate setting, Chinese commercial banks are also based on market factors and are not subject to interference by any organization or individual
• The lending process of Chinese commercial banks is standardized, transparent, and fair, and the process itself demonstrates that loan issuance and decision-making are not subject to interference by any organization or individual
• Loans granted by China’s commercial banks are based on commercial principles and market conditions. There is a commercial lending market in China. Loan interest rates in China are market-based, and commercial banks independently determine lending rates in accordance with market principles, taking into account factors such as funding costs and risk premiums, without government intervention in the pricing of bank loans

During the investigation, the CBSA requested the Government of China and the responding companies to forward relevant public bodies questions and specific loan questions to the following 6 Chinese state-owned banks:

• The Export-Import Bank of China
• China Development Bank
• Industrial and Commercial Bank of China
• China Construction Bank
• Bank of China
• Agriculture Bank of China

No responses have been received from any of those 6 Chinese state-owned banks.

Based on the facts available on the administrative record^{Footnote 285}, the CBSA has determined that the Export-Import Bank of China and China Development Bank constituted “government” under paragraph (b) of subsection 2(1) of SIMA, due to:

• Express delegation or vesting of authority to the Export-Import Bank of China and China Development Bank, through Article of association of the Export-Import Bank of China, Supervision and management measures of the Export-Import Bank of China, Article of association of China Development Bank, and Supervision and management measures of China Development Bank
• Evidence that the Export-Import Bank of China and China Development Bank were, in fact, exercising governmental functions, on the basis of annual reports as published by the Export-Import Bank of China and China Development Bank
• Evidence that the Government of China exercised meaningful control over the Export-Import Bank of China and China Development Bank, on the basis of Article of association of the Export-Import Bank of China, Supervision and management measures of the Export-Import Bank of China, Article of association of China Development Bank, Supervision and management measures of China Development Bank, and annual reports as published by the Export-Import Bank of China and China Development Bank

Based on the facts available on the administrative record,^{Footnote 286} the CBSA has further considered that the Export-Import Bank of China and China Development Bank were, in fact, exercising governmental functions when providing loans to the responding companies during the POI.

Based on the facts available on the administrative record^{Footnote 287}, the CBSA has determined that Industrial and Commercial Bank of China, China Construction Bank, Bank of China and Agriculture Bank of China constituted “government” under paragraph (b) of subsection 2(1) of SIMA when these 4 Chinese state-owned banks implemented the mandates, guidance, notices, polices and/or requirements as stipulated by the Government of China in respect of developing/promoting/advancing five major priorities/tasks/areas (technology finance, green finance, inclusive finance, pension finance and digital finance) and serving real economy, due to:

• Evidence that Industrial and Commercial Bank of China, China Construction Bank, Bank of China and Agriculture Bank of China were, in fact, exercising governmental functions, on the basis of the mandates as stipulated by China Central Financial Work Conference, policy documents as published by China National Financial Regulatory Administration, Chinese monetary policy reports as released by the People’s Bank of China and annual reports as published by these 4 Chinese state-owned banks
• Evidence that the Government of China exercised meaningful control over Industrial and Commercial Bank of China, China Construction Bank, Bank of China and Agriculture Bank of China, on the basis of the mandates as stipulated by China Central Financial Work Conference, policy documents as published by China National Financial Regulatory Administration, Chinese monetary policy reports as released by the People’s Bank of China and annual reports as published by these 4 Chinese state-owned banks

Based on the facts available on the administrative record,^{Footnote 288} the CBSA has further considered that Industrial and Commercial Bank of China, China Construction Bank, Bank of China and Agriculture Bank of China were, in fact, exercising governmental functions (i.e., implementing the mandates, guidance, notices, polices and/or requirements as stipulated by the Government of China in respect of developing/promoting/advancing five major priorities/tasks/areas (technology finance, green finance, inclusive finance, pension finance and digital finance) and serving real economy) when providing loans to the responding companies during the POI.

During the investigation, the CBSA requested the specific loan information from those 6 Chinese state-owned banks for the POI, such as the details about how the loan rate was determined for the responding companies; a complete and clear list of criteria that the responding companies must meet in order to get the loan rate determined for them; the loan rate offered by other banks for a same, similar or comparable loan; the general availability of preferential loan rate as provided to the responding companies etc.

None of those 6 Chinese state-owned banks have provided the requested information to the CBSA. As such, no information has been provided to the CBSA to perform more detailed analysis for each specific loan received by the responding companies.

Based on the facts available on the administrative record, the benchmark interest rates for commercial loans in China are the Loan Prime Rates (LPRs) (including the 1-year LPR and the over-5-year LPR).^{Footnote 289} As such, LPRs published by the China National Interbank Funding Center, as authorized by the People’s Bank of China, were selected as the benchmark interest rates to determine if a specific loan has been provided to the responding companies at a preferential loan rate. When determining the benefit for a specific loan received by the responding companies, the start date of the specific loan and the term of the specific loan were used to select applicable LPR on the basis of the characteristics of LPRs. No other information is available on the administrative record for the CBSA to establish other benchmark interest rates or to make adjustments to LPRs.

Financial contribution and benefit

For the purposes of the final determination, this program provides a financial contribution pursuant to paragraph 2(1.6)(a) of SIMA in the form of a direct transfer of funds from the government. The benefit would be the difference between the amount that would be payable on a benchmark commercial loan versus the amount which is payable under the government loan.

Specificity

The Government of China did not provide specificity information for this program. The responding companies also did not provide sufficient de jure and/or de facto evidence to demonstrate that this program is not specific. For the purposes of the final determination, the CBSA has determined this program to be specific pursuant to subsection 2(7.3) of SIMA, based on the facts available on the administrative record:

• The number of the companies receiving the loans at the rates below the applicable LPRs is considered to be limited as LPR is the most preferential lending rate offered by a commercial bank to its prime clients^{Footnote 290}
• Due to the number of responding companies who were found to have received benefits under this program, this program is considered to be not generally available
• This program is considered to be not generally available, as loans from those 6 Chinese state-owned banks were not provided to the responding companies always at the rates below the applicable LPRs

Program 35: Loan Guarantee Through the Government of China/SOE Banks/Public Bodies

General information

This program relates to the provision of guarantees for borrowers or debt issuers by the government, SOE banks or public bodies. A loan guarantee is assurance provided by the Government of China, a SOE bank or public body (the guarantor) to assume the debt obligation of a borrower if that borrower defaults. A guarantee can be limited or unlimited, making the guarantor liable for only a portion or all of the debt. SIMA permits Sate-Owned banks to be treated as “government” if they are found to possess, exercise or be vested with governmental authority.

For the purposes of the final determination, this program was removed from the investigation as the CBSA has not found this program could have conferred benefits to subject goods during the POI.

Program 36: Export Financing and Export Credit Guarantee/Insurance

General information

The Export-Import Bank of China is a state-funded and state-owned policy bank. It is a bank directly under the leadership of the State Council and dedicated to supporting China’s foreign trade, investment and international economic cooperation.

China Export & Credit Insurance Corporation is a state-funded policy-oriented insurance company with the mission of supporting China’s foreign trade and economic cooperation.

The Export-Import Bank of China and China Export & Credit Insurance Corporation provided export loans and export credit guarantees/insurance to the enterprises in China.

SIMA permits Sate-Owned banks or State-Owned Enterprises to be treated as “government” if they are found to possess, exercise or be vested with governmental authority.

For the purposes of the final determination, this program was removed from the investigation as the CBSA has not found this program could have conferred benefits to subject goods during the POI.

Program 37: Debt and Interest Forgiveness on Loans from State-Owned Banks

General information

Under this program, certain enterprises are entitled to the forgiveness of their debt or interests on loans from State-Owned banks. SIMA permits Sate-Owned banks to be treated as “government” if they are found to possess, exercise or be vested with governmental authority.

For the purposes of the final determination, this program was removed from the investigation as the CBSA has not found this program could have conferred benefits to subject goods during the POI.